Property Flashcards
Where do landlords keep security deposits, and to whom does the accrued interest on those deposits belong?
The landlord is required to receive security deposits in an escrow account. The majority rule is that the interest belongs to the tenant, NOT the landlord.
What is the deed?
The deed is the document that tranfers legal title on the day of closing
What are the three present warranties for a warranty deed?
(1) Seisin
(2) Right to convey
(3) Covenant against encumbrances
What does it mean to be a present warranty?
For present warranties, the breach must happen on the day of closing. Any later is too late for breach of a present warranty.
What are the three future warranties?
(1) Quiet enjoyment
(2) Warranty (against future claims)
(3) Further assurances (that seller will do whatever necessary to fix defects in title)
How long do future warranties last?
Forever
What is a general warranty deed?
A general warranty deed is a promise for all 6 warranties since the property was developed/created.
What is a special warranty deed?
A special warranty deed is a promise for all 6 warranties since the seller had title.
What is the difference between a general warranty deed and a special warranty deed?
General warranty deed = Warranty is since property was developed
Special warranty deed = Warranty is since seller had title
What is a quitclaim deed?
A quitclaim deed makes no promises regarding the title. It is usually used in conveyances between family members because otherwise it would be very dumb as a buyer.
Must a deed be in writing?
Yes because of the statute of frauds
Must the seller deliver the deed? How can they do so?
Yes, the seller must deliver the deed by showing intent to give up control of the property.
Is the acceptance of the deed presumed?
Yes, acceptance of the deed is presumed unless the buyer rejects it.
Is the contract for a property sale and the deed for the sale the same document?
NO - these are different documents until they are merged at closing
What is merger in a sale of property?
Merger = At closing, the contract and the deed ~merge~ and become one controlling document. One beating heart of two souls intertwined. It’s them against the world.
How specifically does the deed have to define the property?
The deed must have a reasonably definitive description of the property - usually metes and bounds
What is the test to know whether the deed adequately describes the property?
Whether a reasonable person would know what the deed is describing.
Must the deed name the person receiving title in the conveyance?
Obviously yes. There needs to be an identifiable grantee.
What is ademption?
Ademption = When you leave property to someone via will but then sell the property before you die, so the intended recipient will not actually get it
Where does property go if it’s left to someone in a will but that person dies before the testator?
The property goes into the residuary estate
What happens when a testator leaves someone a property with liens attached?
The decedent’s estate will pay off the lien so the beneficiary can take the property free of liens.
What is adverse possession and its elements?
Adverse possession is when squatters acquire title to land through possession, if their use is:
(1) Continuous
(2) Actual, open, and notorious
(3) Hostile (AKA without consent)
(4) Exclusive (not sharing possession with owner)
What is tacking?
Tacking is intentionally transferring your right to someone for a period of time before returning to your post. For SOL purposes.
Can non-attorneys draft documents?
Yes - non-attorneys can draft documents, BUT they cannot give legal advice
Can an agent sign the deed on behalf of the grantor?
Yes, an agent CAN sign a deed on the behalf of the grantor, AS LONG AS there is permission in writing to do so. This is the Equal Dignity Rule.
Does an officer of a corporation with the right to sign on behalf of the corporation need written permission to sign a deed?
No - Officers of a corporation with right to sign don’t need written permission to sign. (Given the,,,right to sign they already have)
Do signing agents need written permission to sign a deed on behalf of the grantor?
No - their whole job is signing, they’re only there to sign the papers. They do not need written permission for this.
Is the lack of written permission to sign the deed a defense when the the grantor is trying to induce reliance?
No - Grantor is estopped if he tries to induce reliance.
(reader, know that i don’t really know what this means)
What are the three types of recording statutes?
(1) Race
(2) Race notice
(3) Notice (by recording)
Who wins in a race statute jurisdiction?
Whoever is first to record wins - it’s a race! And they do NOT have to be a bona fide purchaser
Who wins in a race-notice statute jurisdiction?
The first bona-fide purchaser who recorded wins in a race-notice jurisdicition.
Who wins in a notice statute jurisdiction?
The LAST bona fide purchaser wins. AKA the subsequent purchaser for value without notice.
Are creditors bona fide purchasers?
No - creditors are NOT bona fide purchasers
Are mortgagers bona fide purchasers?
YES, mortgagors are bona fide purchasers
Is a beneficiary of a transfer by will a bona fide purchaser?
No - there is no bona fide purchaser in a conveyance by will
Is there a bona fide purchaser in a gift transfer?
No - there is no bona fide purchaser in a conveyance by gift
Is an adverse possessor a bona fide purchaser?
No - there is no bona fide purchaser in an adverse possession acquisition
What should you think if you see the word “first” next to the word “recorded”?
Race-notice! If it doesn’t say “first recorded” or “recorded first,” it is not race-notice
What is the shelter rule?
If a bona fide purchaser gives the property to a third person, the third person will win the property against any other purchaser that the gifting BFP would win against.
O gives to A on Monday. A does not record. O gives to B the Wednesday. B does record. B gifts to C. Who gets the property at the end of the day?
C gets the property at the end of the day - because C got it from B, and B would beat A because B recorded and A didn’t. That’s the shelter rule, babe.
What is a wild deed?
A wild deed is a recorded deed that is outside the chain of title. Remember, the chain of title always starts with the original grantor.
O gives to A. Then A gives to B. Then O gives to C. Who has the wild deed and why? Who gets the property?
B has the wild deed because B did not get the property from the original grantor, even though he got it before C.
C gets the property in a fight because they were the last BFP.
What is an after-acquired title?
An after-acquired title is when the seller doesn’t have legal title on the day they intended to convey it to the buyer.
What happens if a grantor acquires title after closing?
Title will pass automatically to the grantee.
What is a purchase money mortgage?
A purchase money mortgage is the money used to pay for a property
Where does a purchase money mortgage fall in the line of priority?
FIRST! Purchase money mortgage always gets priority. They get paid first.
What is redemption?
Redemption is when you pay off the debt on a mortgage to prevent foreclosure.
When does the owner have the equitable right of redemption?
The owner has the equitable right of redemption from the time of notice to the time of sale.
When is the equitable right of redemption waived?
Never! Owner automatically has this right from the time of notice to the time of sale.
When is statutory redemption available?
Statutory redemption is available during the period of time after the foreclosure sale.
Is the owner automatically entitled to statutory redemption?
No!
In a lien theory state, what does the bank hold? What does the owner hold?
In lien theory states, the bank only has a lien. The owner hold the title.
In a title theory state, what does the bank hold? What does the owner hold?
In title theory states, the bank holds the title. The owner only has an equitable interest.
Can the owner sell the property in a lien theory state? How come?
Yes - the owner can sell the home in a lien theory state because they hold title.
Can the owner sell the property in a title theory state? How come?
No - Owners cannot sell the house in a title theory state because they don’t own title.
What happens when joint tenants take out a mortgage in a title theory state? How come?
The joint tenants with a mortgage in a title theory state become tenants in common because the interest has been conveyed to a third party.
Do joint tenants become tenants in common if they take out a mortgage in a lien theory state?
No - the mortgage will NOT sever the joint tenancy in a lien theory state. Only in title theory states.
What does it mean to assume the mortgage?
When the new buyer of a property takes over the mortgage payments, they have assumed the mortgage.
Is the original owner of a property liable if the buyer assumes the mortgage?
The original owner is secondarily liable for the mortgage unless there was a novation.
What is a novation?
A novation occurs when a new purchaser is substituted for the seller’s personal liability.
Who is liable for paying the mortgage on a property that the new buyer purchased subject to the mortgage?
The original owner is liable for payment.
Can the bank foreclose on the new owner of a house if the new owner bought it subject to a mortgage?
Yes! If the original owner doesn’t pay the mortgage, the house will be foreclosed and buyer is on the streets, shit outta luck even though they are not liable for the mortgage.
What is a deed in lieu of foreclosure?
This is when instead of going through foreclosure proceedings, you just agree to hand the deed over to the bank.
When a property is foreclosed on, but there are multiple mortgages, what happens to the mortgages not in default?
Mortgages taken before the defaulted mortgage remain, and new buyer takes subject to these.
Mortgages taken AFTER the defaulted mortgage are wiped out!!
What is a deficiency judgement?
A judgement sought against the original owner of a foreclosed on property by the bank for the balance of the loan
When do deficiency judgements happen?
Banks seek deficiency judgements after the foreclosure sale if they couldn’t sell the house for enough money to pay off the loan
How much can the bank recover in a deficiency judgement?
The bank can seek the remaining balance of the loan after the property was sold at a foreclosure sale
When does the buyer get title to the property in an installment land contract?
The buyer gets title of the property once it is completely paid off. Not before that. All payments must be made.
Must a real estate contract be in writing?
Yes, generally, because of the statute of frauds
When does a real estate contract not have to be in writing?
A real estate contract does not have to be in writing if there is part performance: Some payment, improvement, and/or possession
What qualifies as part performance that will negate the writing requirement for a real estate contract?
2 OUT OF 3 are required for part performance:
(1) Some payment
(2) Improvement on the property
(3) Possession of the property
What terms must a real estate contract include?
(1) Price
(2) Parties
(3) Description of property
(4) Conditions of property
(5) Signed by the party to be charged
Pneumonic device: Pricy Parties Describe Conditional Situations
Does the buyer get legal title when the real estate contract is signed?
NO - the buyer gets EQUITABLE title when real estate contract is signed. NOT legal title until closing.
Does the risk of loss transfer to the buyer when the real estate contract is signed?
Yes - the risk of loss transfers to the buyer when the real estate contract is signed. Along with equitable title.
Does the seller of a property need legal title to the property on the day the real estate contract is signed?
No - the seller does not need legal title on the day of signing. They don’t need legal title until closing.
What does marketable title imply?
Marketable title implies a promise that the land is free from emcumbrances.
Is time of the essence?
No - unless stated, take the scenic route, frolic among the daisies, there is no rush.
What does the seller of the property have a duty to disclose?
The seller has a duty to reveal and disclose material defects that CANNOT be seen by the buyer.
Does the seller have to disclose the defects of a property that the buyer can clearly see?
No - the seller does not have to disclose the defects that the buyer can clearly see.
What is required for a land sale contract to be completely integrated?
(1) A negotiated and signed agreement
(2) A set closing date
These show an intent for the agreement to be complete and exclusive.
Why does it matter if a land sale contract is completely integrated?
Completely integrated = Parol evidence applies = NO extrinsic evidence of contract is allowed
What is an easement?
The right to use someone else’s land
What are the four ways to create an easement?
(1) By writing
(2) By prescription
(3) By implication
(4) By necessity
What is an easement by prescription?
Easement by prescription looks like adverse possession - Notorious, actual, continual use but does not not have to be exclusive
What’s the difference between adverse possession and an easement by prescription?
Adverse possession = Title
Easement by prescription = Right to the land
What is an easement by implication?
An easement by implication occurs when the easement is implied from prior use
What’s the common scenario featuring easement by implication?
A single property is then divided into two properties, but original owner wants to keep using the land the same way - there’s an easement implied from prior use.
What is an easement by necessity?
An easement by necessity arises when there is no other way to exit the land but to cross over the other person’s land
How long does an easement last?
Easements last FOREVER, unless expressly terminated
Is an easement terminated when the land is conveyed to someone else?
No! Easements last forever, unless expressly terminated
Is an easement terminated if the new owner does not know about the easement?
No! Easements last forever, unless expressly terminated
Is there such thing as a negative easement?
Yes - easements can be positive or negative.
What are the four ways to terminate an easement?
(1) By agreement
(2) By time (end of a set term)
(3) By merger
(4) Abandonment
What are the requirements for an easement by abandonment?
(1) Non-use
(2) Intent not to return
Is non-use alone sufficient to terminate an easement by abandonment?
No! You need non-use AND an intent not to return!
What is a covenant?
A writing that looks like a contract (promise for a promise) that can allow someone use of the land or restrict the use to specific purposes
How long do covenants generally last?
Covenants generally last forever, if it runs with the land
What are the five requirements for a covenant to run with the land?
(1) Writing
(2) Intent between the parties
(3) Notice
(4) Privity
(5) Touch and concern the land (AKA not a personal covenant)
What is equitable servitude?
Equitable servitude looks like a restrictive covenant and seeks an injunction.
What is implied reciprocal servitude?
Implied reciprocal servitude is when there are restrictions that apply to a common scheme and must be followed by all of the lot owners
Must there be notice for restrictions under implied reciprocal servitude?
Yes! Notice is required for implied reciprocal servitude restrictions.
How long do implied reciprocal servitude restrictions last?
Implied reciprocal servitude restrictions stay valid until there is a TOTAL change of the profile and character and use of the scheme.
Is growth of a common scheme a total change?
NO - growth does not count as a total change
What is a license?
A license is a right to enter the property, but the landowner can kick you out at any time for any reason
When can the landowner NOT kick out someone with a license to enter?
If the license to enter is coupled with the interest in the land
What is the right to profit?
Profit is the right to enter and take something off the land - NOT just use it.
Usually they’re digging oil, ore, or fruit up
What are the two elements of a taking?
(1) Government taking private property for public use
(2) Government paid the landowner just compensation
What are the landowner’s 3 main water rights?
The landowner has the right to:
(1) Reasonable use of water
(2) Reasonable amount of water
(3) Reasonable means to alter the flow of rain and snow
Can a landowner alter the flow of water if doing so would mildly hurt another owner?
YES - One owner can do whatever necessary to alter the flow of water, even if it hurts another owner, as long as it is reasonable
When are crops real property?
Crops are real property when they occur on the land naturally
When are crop personal property?
Crops are personal property when they were hand-planted or man-made
Do crops generally go with the property or the owner?
Generally, crops go with the property
In what two situations do crops go with the owner?
(1) When there is an express agreement that the crops go with the owner
(2) If the tenant has a right to harvest the crops, they’ll go with the tenant
If an owner is doing things on their land that damages an adjoining undeveloped property, what liability will they face?
Damaging an undeveloped adjoining property subjects an owner to strict liability for the damage.
If an owner is doing things on their land that damages an adjoining DEVELOPED property, what should you ask?
If an owner damages a developed property, ask whether the damage would have happened anyway - liability turns on the answer to this
What liability will an owner face if they’re doing things on their land that damages an adjoining developed property, but the damage would have happened anyway?
If the property is developed and the damage would have happened anyway, the owner faces strict liability.
What liability will an owner face if they’re doing things on their land that damages an adjoining developed property, and the damage would NOT have happened anyway?
If the damage would have not happened anyway, the owner will face liability for negligence.
What liability will an owner face for digging on an adjoining land?
An owner will face negligence liability for damages
What is a private nuisance?
A private nuisance is an unreasonable interference with use and enjoyment of one’s property, according to a reasonable person standard
Can a private party bring a suit for public nuisance?
Sure, a private party can bring a suit for public nuisance AS LONG AS they prove special damages unique to them.
What is a common interest owned community?
A common interest owned community is a neighborhood with a homeowner’s association where everyone is required to pay dues (Bramblewood)
How are condominium communities created?
Condominium communities are created by statute.
What must the owner of a condominium file to create the condominium?
The owner must file:
(1) a declaration setting forth obligations of owners and percentages of shares
(2) a plat
What does each condo owner own?
(1) The inside structure of their own condo
(2) The common areas of the community, as tenants in common alongside the other owners
Who pays the mortgage, taxes, and insurance for each condo unit?
The owner of the condo unit pay the mortgage, taxes, and insurance for the unit
Can the common areas in a condominium be partitioned?
No
Can condo owners separate their ownership of their unit and their ownership of the common areas?
Nope
What is a co-op?
A co-op is when a corporation owns a building and leases units to shareholders
Are the mortgages per unit in a co-op?
NO - there is a single mortgage on the whole property in co-ops; the owners each pay a share of those fees and taxes
