Property Flashcards
Attachment of lien after partition
When a co-tenancy is divided in an action for partition by sale, any lien on a tenant’s property interest will stay attached to that interest if the creditor is not a party to the action. But, if the creditor is a party, then the lien will attach to the sale proceeds attributable to that interest.
Adverse Possession
(OCEAN)
O=Open and Notorious – apparent or visible to a reasonable owner
C=Continuous – uninterrupted for the statutory period
E=Exclusive – not shared with the owner
A=Actual – physical presence on the portion of the land to be adversely possessed
N=Non-permissive – hostile and adverse to the owner
Equitable right of redemption
Allows a debtor to avoid foreclosure by paying the full amount of the outstanding debt. This means that the tenant can only redeem co-owned property by paying the amount owned by ALL tenants.
Marshalling
This applies when a senior creditor has a security interest in multiple assets, and a junior creditor has an interest in one of those assets. It requires the senior creditor to first foreclose on the asset against which it holds an exclusive security interest to preserve the junior creditor’s interest in the remaining asset.
Termination of licenses
Can be revoked at any time and terminate automatically upon either: (1) the death of either party; or (2) conveyance of the servient estate
Warranty of marketable title
Seller will convey the buyer title that is reasonably free from doubt and under no threat of litigation such that a reasonable person would accept and pay for it.
Conflict of laws rule for real property issues
Issues related to foreclosure but do not affect an interest in land (i.e. lender’s right to sue the borrower before foreclosing on the mortgaged property) are determined by the law of the state with the most significant relationship to the transaction and the parties
Life tenant’s right to remove chattel
A life tenant (holder of life estate) has the right to remove the chattel within a reasonable time after the estate ends if: (1) the life tenant did not intend for the annexation to be permanent; and (2) the chattel can be removed without substantial damage to the property or the chattel
Fee Simple Determinable
Durational language (i.e. “so long as” “during” “until)
Future interest: Grantor’s possibility of reverter
Third Party’s executory interest (fee simple subject to executory limitation)
Fee simple subject to condition subsequent
Conditional (i.e. “but if” “provided that” “unless”)
Future interest: Third party’s executory interest; Grantor’s right of entry
What is a mortgage?
A lien against real property given to secure a debt
Lien theory
(Majority rule) Lender receives security interest in property. Mortgagor retains title & possession unless lender forecloses
Title theory
Lender receives legal title & mortgager retains right of possession. Title reverts to mortgagor once debt is paid.
Intermediate theory
Mortgagor retains title & possession until default, then full title passes to lender without foreclosure
Can mortgagee take possession of mortgagor-abandoned mortgaged property?
Yes.
NOTE – mortgagee who does so incurs liability as if he/she were the owner
Does lack of access to a public road render title unmarketable?
Yes
When is the time for a buyer to object to marketability of title?
Prior to delivery and acceptance of a deed
Merger doctrine
Contract for sale of land merges with the deed once the deed has been delivered to and accepted by the buyer. If any problems with title arise thereafter, the buyer must rely on the covenants of title or other provisions contained within the deed.
Buyer can no longer sue on the contract and is stuck suing on the deed.
Purchase money mortgage
Has super priority over all other liens because it is granted to secure the purchase price of mortgaged property. Accordingly, PMMs trump the “first in time, first in right” rule that sets priority based on the date a lien is recorded.
Surety
One who assumes responsibility for another’s debt if that person defaults
Due on sale clause
A clause that gives a lender the option to demand immediate payment of the full amount of the outstanding mortgage debt, including interest, if the mortgaged property is transfered without the lender’s written permission
Are illegal contracts void as against public policy?
Generally, yes
Promise to perform a preexisting duty
Generally unenforceable for lack of consideration
When is a debtor’s promise to pay all or part of a preexisting debt enforceable?
When the debtor renewed his/her promise despite a technical defense (eg, statute of limitations) AND the renewed promise was made in writing or partially performed.
Restitutionary damages
Damages awarded to restore to claimant the value of whatever benefit was conferred upon recipient to prevent unjust enrichment
Liquidated damages
Recoverable only if they reasonably compensate the injured party. As a result, they are not recoverable if they constitute a penalty – eg, when the liquidated amount exceeds 15% of the purchase price.
Profit
Nonpossessory interest in land that gives profit holder right to enter another’s land to remove products of soil (eg, timber, minerals, oils)
EX: Agreement with timber company giving right to enter my land to harvest as much timber as it wanted for the next 5 years.
License
Revocable privilege to enter and use another’s land for a specific purpose
Easement
Nonpossessory interest in land that gives easement holder right to: use another’s land for specific purpose (ie, affirmative easement) or prohibit other owner from doing something on land that owner would otherwise be allowed to do (ie, negative easement)
Warranty deed
Conveys a grantor’s real property to a grantee with assurances that there are no defects in title — i.e., no one else owns the land, and it is free from emcumbrances
What is the covenant of warranty?
An assurance that the grantor will defend and compensate the grantee for lawful claims made against the grantee’s title — e.g., when a third party prevails against the grantee in a quiet title action.
Can an option K contained in a lease be assigned separately from the lease?
No. The majority rule on this issue is that an option is an integral part of the lease agreement and cannot be separately assigned.
What do courts look at when the terms of an express easement are unclear?
Courts look to the parties’ intent to determine the easement’s location. Intent is often evidenced by the parties’ conduct
Servient estate
Land that is burdened by the easement or profit
Delivery of a deed through death escrow
A deed is delivered through a valid escrow when (1) the deed is given to an escrow agent with instructions to transfer it to the grantee upon the grantor’s death, and (2) the grantor relinquishes the right to take back the deed.
What is a life estate?
A present possessory estate that terminates upon the death of an individual
What is a life estate?
A present possessory estate that terminates upon the death of an individual
Are remainders transferable inter vivos, de usable by will, and descendible by inheritance?
Yes
Are remainders transferable inter vivos, de usable by will, and descendible by inheritance?
Yes
What is a vested remainder?
A remainder that is not subject to any conditions precedent AND held by an identifiable living person (eg, “then to my sister, her heirs and assigns)
What is a contingent remainder?
A remainder that is subject to an express condition precedent (other than the natural termination of the prior estate) OR held by an unknown or unborn person (eg, “then to my neighbor, but only if…”)
One stock rule
Traditionally, the benefit of an easement in gross could not be transferred, but most courts now allow transfer if the easement is for commercial use or if the parties intended it to be transferable. Whether the easement can also be appropriated (i.e. divided up) turns on whether it is: (1) non exclusive — in which case the easement cannot be divided among multiple transferees, or (2) exclusive — in which case the easement generally can be divided among multiple transferees.
However, — the apportionment of an exclusive easement in gross is subject to the “one stock” rule. Under this rule, the collective use that the transferees can make of the easement is limited to the use that the transferor made of the easement (ie, the transferor’s “stock”).
When a foreclosure sale results in deficiency, who can creditor obtain a deficiency judgment against?
(1) original debtor and/or (2) any party who has assumed the mortgage
Is a buyer who takes a property “subject to” the mortgage personally liable for debt, even after they make payments on a loan?
No.
Assumption of mortgage
Buyer expressly agrees to pay and become primarily liable for the debt while the debtor becomes secondarily liable as a surety.
Two or more persons adversely possess the land of another
When two or more persons adversely possess the land of another, they acquire a tenancy in common– a concurrent ownership interest with no right of survivorship.
What duties does a life tenant have?
Duty to pay current charges, duty to prevent waste, duty to make ordinary repairs
Nonjudicial sale (foreclosure)
Privately conducted public sale of mortgaged property (permitted only if mortgage contains power-of-sale clause)
