Property

Question 1

Is a grantor’s deed that is unrecorded sufficient for inquiry notice?

Answer 1

Yes. When a grantor’s deed is unrecorded, the grantee is expected—at her peril—to demand a viewing of her grantor’s title documents at the time of the purchase and insist that they be recorded.

Inquiry notice means that a subsequent grantee is held to have knowledge of any facts that a reasonable inquiry would have revealed, even if he made no inquiry.

Question 2

Is a life estate transferable?

Answer 2

Yes, this is a Life Estate per autre vi. And must pay property taxes for the life of the transferor of the LE.

Question 3

What is the changed conditions exception to the rule that a life tenant cannot commit waste?

Answer 3

Generally, a life tenant cannot tear down improvements simply because the life tenant wants to make a more profitable use of the land. But an exception exists when changed conditions have made the destruction of the improvement reasonably necessary.

Question 4

Under what circumstances would a court partition the property of TIC?

Answer 4

Any tenant in common has a right to judicial partition of property, either in kind or by sale and division of the proceeds when co-tenants
are squabbling and cannot come to any agreement.

The remedy of partition terminates the
co-tenancy and divides the common property. Where TIC cannot agree on the use of the land, a court will probably partition the property.

Question 5

When does a conveyance terminate a joint tenancy?

Answer 5

When one party conveys unilaterally. Whereas if joint tenants convey together, then the JT is NOT severed.

Question 6

When is a landlord liable to a tenant for a latent defect on the property?

Answer 6

Generally, landlords are not liable for latent defects unless the LL knew or had reason to know of the defect. An exception exists where the lease is short and the house is furnished; a LL will be liable to a tenant under such circumstances.

Question 7

When may a landlord impose a higher rent on a holdover tenant in a new lease? (EG - month to month)

Answer 7

While the rent (as well as other terms) of the new tenancy will generally be the same as the old tenancy, there is an exception when the landlord has told the tenant of a future higher rent and that notification came before the expiration of the old lease. In that event, the landlord can impose the higher rent in the new periodic tenancy.

Question 8

When does merger extinguish an easement?

Answer 8

The duration of the servient estate must be equal to or longer than the duration of the dominant estate (and therefore the easement).

Question 9

Is nonuse sufficient to cause abandonment of an easement?

Answer 9

No. There must be an act or manifestation of intent to permanently abandon the easement.

Question 10

When can a residential deed restriction be voided under the doctrine of changed neighborhood conditions?

Answer 10

Restrictive covenants on all lots in a subdivision can be voided if changed conditions have made the ENTIRE property unusable for the specified use, and this means that the entire subdivision must have changed so significantly that enforcement of the restriction would be inequitable.

Question 11

When does risk of loss pass under the equitable conversion doctrine?

Answer 11

When a transfer of land is preceded by a contract for sale, the risk of loss to the property during that time interval is imposed on the buyer in most jurisdictions.

EG - a loss due to fire or other casualty (assuming it was not due to the fault of either party), the buyer must still pay the contract price at the closing date unless the contract provides otherwise.

Question 12

What are trade fixtures? Are they removable? Why or why not?

Answer 12

Equipment installed for the purpose of trade by a tenant–or trade fixtures–are generally removable (even if it is not an integral part of the premises) and the tenant pays for any damages caused by the removal.

Absent an agreement to the contrary, these annexations are removable because it was not the intention of the tenant to make them a permanent part of the premises.

Question 13

In a notice jx, can a non BFP buyer take from a BFP?

Answer 13

Yes. Under the Shelter Rule, a person who takes from a BFP will prevail against any interest that the transferor-BFP would have prevailed against.

You step into the shoes of the BFP and assume their status.

Question 14

What does it mean to transfer title “subject to” a morgtage, rather than “assuming” a mortgage?

Answer 14

In the majority of jurisdictions, when
a mortgagor transfers title to another, and the transferee takes “subject to” the mortgage, that means that the transferee will not be liable to the mortgagee on the promise underlying the mortgage. So the third party transferee cannot be sued on the debt.

In contrast, assuming a mortgage does make that third party liable to the mortgagee, and they may be sued on the remaining debt.

Question 15

Will a court enforce specific performance of a land sale K that includes adversely possessed land?

Answer 15

No, bc the title is not marketable due to the threat of litigation regarding specific performance of the sale K.

To fix, they must first quiet title. A buyer does not have to buy a lawsuit.

Question 16

A deed delivered to a grantee who is dead at the time of delivery is void, voidable, or valid?

Answer 16

Void.

A deed is not effective to transfer an interest in real property unless it has been delivered. The grantee must actually exist at the time of delivery; otherwise, the deed is not valid (i.e., void). A void deed will be set aside by a court even if title purportedly has passed to a bona fide purchaser.

Question 17

Does a LL’s promise in a lease to maintain the property terminate when the property is sold? Why or why not?

Answer 17

A landlord’s promise in a lease to maintain the property does not terminate because the property is sold. Although no longer in privity of estate, the original landlord and tenant remain in privity of contract, and the original landlord remains liable on the covenant unless there is a novation substituting a new party for an original party to the contract. (A novation requires the assent of all parties, and completely releases the original party.)

Question 18

What is adequate consideration to entitle a BFP to protection of a recording statute?

Answer 18

To be a bona fide purchaser for value, and thus entitled to the protection of a recording statute, the purchaser must prove that real—not merely nominal—consideration was paid. In other words, one must prove that he is a purchaser rather than a donee. The consideration need not be adequate or the market value, but it must be of substantial pecuniary value.

EG - $1 for a deed to land is likely inadequate to be a BFP.

Question 19

What is the doctrine of estoppel by deed? Can it apply when a conveyance is done by quitclaim deed? Why or why not?

Answer 19

Under the doctrine of estoppel by deed, if a grantor, who does not have good title at the time she gives a warranty deed to her grantee, should later acquire good title to the property, that title springs through the grantor and vests in the grantee by operation of law. Under this majority position, the warranties contained in the warranty deed estop her from denying ownership when she first executed the deed to the grantee.

However, the doctrine of estoppel by deed does not apply in the majority of states where the conveyance is done by a quitclaim deed because a quitclaim deed contains no warranties of title.

Question 20

Which party has priority when, in a race-notice jx, neither party records their interest in the land?

Answer 20

The common law rule that priority is given to the grantee who was first in time applies unless operation of the jurisdiction’s recording statute changes the result.

EG - In a race-notice jx, and neither party has recorded, the prior interest in land will prevail.

Question 21

What result when neither the buyer nor the seller perform at the closing at the sale of land?

Answer 21

Absent an agreement to the contrary, the closing date will be extended indefinitely until one party tenders performance.

The buyer’s obligation to pay the purchase price and the seller’s obligation to convey title are concurrent conditions, meaning NEITHER party is in breach of the contract until the other party tenders performance, even if the closing date has passed. However, the parties are NOT excused from performing absent repudiation or impossibility. Rather, once one party performs, the other must concurrently perform to avoid being in breach.

Question 22

What is needed to enforce a reciprocal negative servitude?

Answer 22

To enforce a reciprocal negative servitude, the court will need to find:

(i) a common scheme for development, and
(ii) notice of the covenants.

Question 23

When will a restriction on the majority of the lots of a subdivision be binding on those even without the restriction?

Answer 23

When the restriction is a negative reciprocal servitude.

Question 24

If the seller under a real estate contract dies before closing, what result?

Answer 24

Under the doctrine of equitable conversion, if the seller under a real estate contract dies before the closing, the successors to the seller’s real property must give up legal title at closing.

Question 25

What is the difference between the equitable right to redemption and the statutory right to redemption

Answer 25

In all states, the equity of redemption provides the borrower with an equitable right, at any time BEFORE the foreclosure sale, to redeem the land or free it of the mortgage or lien by paying off the amount due or, if an acceleration clause applies, the full balance due.

Only about half the states, however, give the borrower a statutory right to redeem for some fixed period AFTER the foreclosure sale has occurred; the amount to be paid is generally the foreclosure sale price, rather than the amount of the original debt.

Question 26

Which covenants compel the seller of real property to assist the buyer in a title dispute?

Answer 26

• Covenant of Warranty: the grantor agrees to defend, on behalf of the grantee, any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title.
• Covenant of Further Assurances: a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect.

Question 27

Do the terms of a land sale contract or the deed apply upon payment and delivery of deed?

Answer 27

Under the doctrine of merger, the contract merges into the deed, and the terms of the contract are meaningless; the terms and convenents of the deed control.

Question 28

What circumstances or conditions will an easement be extinguished?

Answer 28

An easement is extinguished when the easement is conveyed to the owner of the servient tenement.

For an easement to exist, the ownership of the easement and the servient tenement must be in different persons. (By definition, an easement is the right to use the land of another for a special purpose.) Thus, if ownership of the two property interests comes together in one person, the easement is extinguished.

Question 29

In an area with 100 residential lots deed with a provision that “all aluminum cans, glass bottles, and grass clippings of Grantee and her heirs and assigns shall be recycled”–does this touch and concern the land such that it is a covenant that runs with the land?

Answer 29

No. While recycling may benefit the community at large, “touch and concern” involves the relationship between landowners at law. Recycling by the veteran does not directly benefit the other landowners in the use and enjoyment of their land. Thus, it does not touch and concern the residential lots.

Question 30

What is the effect of an owner acquiring a disability on the statute of limitations in an adverse possession action?

Answer 30

The statute of limitations for adverse possession does not begin to run if the owner is under a disability to sue at the time his cause of action accrues (when the claimant begins the adverse possession). However, the disabled owner cannot toll the SOL if it begins to run BEFORE the disability arises.

Question 31

WIll a court find that time is of the essence in the closing of a real estate contract?

Answer 31

Generally, courts assume that time is NOT “of the essence” in real estate contracts. This means that the closing date stated in the contract is not absolutely binding in equity, and that a party, even though late in tendering her own performance, can still enforce the contract if she tenders within a reasonable time after the date.

EG - A court may find that failure to tender of payment within two months of closing is an unreasonable amount

Question 32

How is a license different from an easement or profit?

Answer 32

A license is revocable.

A profit is a nonpossessory interest in land that entitles the holder of the profit to enter on the servient tenement and take something off of the land (e.g., minerals, timber, oil, or game). Like an easement, a profit may be appurtenant or in gross.

If the profit exists to serve a dominant estate, the profit is appurtenant and can only be transferred along with the dominant estate.

Conversely, if the profit does not exist to serve a dominant estate, it is a profit in gross and may be transferred separate and apart from the dominant estate.

Question 33

Who bears the risk of loss if a property subject to an enforeceable contract for sale burns down?

Answer 33

Although jurisdictions differ as to which party has the risk of loss, the majority rule is that where property subject to an enforceable contract for sale is destroyed without the fault of either party before the date set for closing, the risk of loss is on the BUYER. Thus, the buyer must pay the contract price despite a loss due to fire, unless the contract provides otherwise.

Question 34

Does a junior lienholder have a right to pay off a mortgage before a senior mortgagee forecloses?

Answer 34

Yes, because foreclosure will destroy all interests that are junior to the mortgage being foreclosed, the junior mortgagee has the right to pay it off (i.e., redeem it) to avoid being wiped out by its foreclosure. Hence, a junior lienholder may pay off the outstanding balance of a senior bank’s mortgage and be subrogated to the bank’s rights against the mortgagor.

Question 35

Which covenant(s) in a deed do not flow to a grantee and their successors upon delivery of deed?

Answer 35

Seisin and encumbrances.

The covenant of seisin is a promise that the grantor has title to and possession of the realty. The covenant against encumbrances is a promise that no other person has encumbrances or liens against the realty. If the realty is not as covenanted, these covenants are breached the moment a deed containing them is delivered to a grantee. Since the covenants are breached upon delivery of the deed, however, they do not flow to successors of the covenantor’s grantee. Covenant of Quiet Enjoyment, however, can flow to successors because it only occurs when an actual eviction occurs.