Property

Question 1

Attachment of lien after partition

Answer 1

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.

Question 2

Adverse Possession

Answer 2

(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

Question 3

Equitable right of redemption

Answer 3

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.

Question 4

Marshalling

Answer 4

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.

Question 5

Termination of licenses

Answer 5

Can be revoked at any time and terminate automatically upon either: (1) the death of either party; or (2) conveyance of the servient estate

Question 6

Warranty of marketable title

Answer 6

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.

Question 7

Conflict of laws rule for real property issues

Answer 7

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

Question 8

Life tenant’s right to remove chattel

Answer 8

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

Question 9

Fee Simple Determinable

Answer 9

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)

Question 10

Fee simple subject to condition subsequent

Answer 10

Conditional (i.e. “but if” “provided that” “unless”)

Future interest: Third party’s executory interest; Grantor’s right of entry

Question 11

What is a mortgage?

Answer 11

A lien against real property given to secure a debt

Question 12

Lien theory

Answer 12

(Majority rule) Lender receives security interest in property. Mortgagor retains title & possession unless lender forecloses

Question 13

Title theory

Answer 13

Lender receives legal title & mortgager retains right of possession. Title reverts to mortgagor once debt is paid.

Question 14

Intermediate theory

Answer 14

Mortgagor retains title & possession until default, then full title passes to lender without foreclosure

Question 15

Can mortgagee take possession of mortgagor-abandoned mortgaged property?

Answer 15

Yes.

NOTE – mortgagee who does so incurs liability as if he/she were the owner

Question 16

Does lack of access to a public road render title unmarketable?

Answer 16

Yes

Question 17

When is the time for a buyer to object to marketability of title?

Answer 17

Prior to delivery and acceptance of a deed

Question 18

Merger doctrine

Answer 18

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.

Question 19

Purchase money mortgage

Answer 19

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.

Question 20

Surety

Answer 20

One who assumes responsibility for another’s debt if that person defaults

Question 21

Due on sale clause

Answer 21

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

Question 22

Are illegal contracts void as against public policy?

Answer 22

Generally, yes

Question 23

Promise to perform a preexisting duty

Answer 23

Generally unenforceable for lack of consideration

Question 24

When is a debtor’s promise to pay all or part of a preexisting debt enforceable?

Answer 24

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.

Question 25

Restitutionary damages

Answer 25

Damages awarded to restore to claimant the value of whatever benefit was conferred upon recipient to prevent unjust enrichment

Question 26

Liquidated damages

Answer 26

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.

Question 27

Profit

Answer 27

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.

Question 28

License

Answer 28

Revocable privilege to enter and use another’s land for a specific purpose

Question 29

Easement

Answer 29

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)

Question 30

Warranty deed

Answer 30

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

Question 31

What is the covenant of warranty?

Answer 31

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.

Question 32

Can an option K contained in a lease be assigned separately from the lease?

Answer 32

No. The majority rule on this issue is that an option is an integral part of the lease agreement and cannot be separately assigned.

Question 33

What do courts look at when the terms of an express easement are unclear?

Answer 33

Courts look to the parties’ intent to determine the easement’s location. Intent is often evidenced by the parties’ conduct

Question 34

Servient estate

Answer 34

Land that is burdened by the easement or profit

Question 36

Delivery of a deed through death escrow

Answer 36

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.

Question 37

What is a life estate?

Answer 37

A present possessory estate that terminates upon the death of an individual

Question 38

What is a life estate?

Answer 38

A present possessory estate that terminates upon the death of an individual

Question 39

Are remainders transferable inter vivos, de usable by will, and descendible by inheritance?

Answer 39

Yes

Question 40

Are remainders transferable inter vivos, de usable by will, and descendible by inheritance?

Answer 40

Yes

Question 41

What is a vested remainder?

Answer 41

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)

Question 42

What is a contingent remainder?

Answer 42

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…”)

Question 43

One stock rule

Answer 43

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”).

Question 44

When a foreclosure sale results in deficiency, who can creditor obtain a deficiency judgment against?

Answer 44

(1) original debtor and/or (2) any party who has assumed the mortgage

Question 45

Is a buyer who takes a property “subject to” the mortgage personally liable for debt, even after they make payments on a loan?

Answer 45

No.

Question 46

Assumption of mortgage

Answer 46

Buyer expressly agrees to pay and become primarily liable for the debt while the debtor becomes secondarily liable as a surety.

Question 47

Two or more persons adversely possess the land of another

Answer 47

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.

Question 48

What duties does a life tenant have?

Answer 48

Duty to pay current charges, duty to prevent waste, duty to make ordinary repairs

Question 49

Nonjudicial sale (foreclosure)

Answer 49

Privately conducted public sale of mortgaged property (permitted only if mortgage contains power-of-sale clause)