Property Flashcards
What is a life estate and its duties re: paying taxes?
A life estate is a present possessor interest that is limited in duration by the life of the grantee, unless otherwise specified. The grantee, as a life tenant, assumes certain duties with respect to the estate. These duties include paying taxes on the real property but only to the extent that the life tenant receives a financial benefit from the property. The financial benefit is determined differently depending on whether the life tenant:
(1) occupies the property - financial benefit is measured by the fair market rental value of the property; or
(2) does not occupy the property - financial benefit is measured by the income derived from the land.
When a life estate ends, title reverts to the grantor or specified remainder man. If the life tenant fails to pay property taxes, then the holder of a remainder interest may pay the taxes to protect that interest - but has no duty to the life tenant to do so.
What happens at the end of a tenancy for years?
At the end of a fixed term, a tenancy for years automatically expires. A tenant who remains on the premises after the lease expires without the landlord’s permission is considered a tenant at sufferance.
A tenancy at sufferance continues until the tenant vacates the premises, is evicted, or is bound to a new tenancy. Absent an applicable statute, the landlord is not required to give the tenant at sufferance notice to vacate the premises before taking steps to recover possession of the property.
What is a joint tenancy?
A type of concurrent estate in which each covenant holds an undivided and equal interest in the property with the right of survivorship. A joint tenant can sever the joint tenancy by conveying his/her interest during life to another, thereby creating a tenancy in common. But a joint tenant cannot devise his/her property interest and it will not pass by intestacy bc, at death, the joint tenant’s interests ceases to exist and is automatically absorbed into the surviving joint tenants’ interests.
What is the difference between privy of estate and contract?
A landlord and tenant have a legal relationship based on both:
(1) privity of contract - their shared interest in the lease agreement; and
(2) privity of estate - their successive right to possess the property (i.e. the tenant’s current right of possession is immediately followed by the landlord’s future right of possession).
How does assignment effect privity of estate and contract?
Assignment is a complete transfer of a tenant’s interest to a third party (assignee) for the remainder of the tenant’s lease term, so:
(1) the original tenant retains privity of contract and remains liable for all covenants in the lease; and
(2) the assignee gains privity of estate and becomes liable to the landlord for the rent and other other covenants in the lease that run with the lease.
Bc of this privity, the original tenant and the assignee are jointly and severally liable for the landlord’s entire harm arising from a breach of the lease. Landlord can recover from tenant and/or assignee.
What is the implied covenant of marketable title and how does it relate to the merger doctrine?
Unless otherwise stated, an implied covenant of marketable title is part of a land-sale contracts, regardless of the type of deed created. Under this covenant, the seller promises to deliver title that is reasonably free from doubt and under no threat of litigation, such that a reasonable person would accept and pay for it. Red flags for marketable title:
(1) covenants
(2) easements
(3) leases
(4) liens
(5) gaps in chain of title
(6) boundary disputes
(7) existing zoning violations
(8) adverse possession
However, under the merger doctrine, any obligations contained int he land-sale contract merge into the deed and are extinguished at closing. As a result, these obligations are enforceable only if they are contained in the deed, and a violation of a land-sale contract must be raised before or upon closing.
What is the doctrine of equitable conversion?
A majority of jurisdictions apply doctrine of equitable conversion when a land-sale contract is silent regarding the risk of loss. Under this doctrine, the risk of loss is placed on the party with equitable title at the time the property was destroyed unless the other party is at fault for the loss. The seller retains legal title to real property during the pendency of the sales contract, but the buyer receives equitable title once the contract is formed and can be specifically enforced.
However, under the UVPA (minority), the seller retains the risk of loss unless and until the buyer takes possession or title is transferred.
What is the estoppel by deed doctrine?
Under the estoppel by deed doctrine, a grantor who conveys an interest in land by warranty deed before actually owning it is estopped from later denying the effectiveness of that deed. When the grantor acquires ownership of the land, the after-acquired title is transferred automatically to the prior grantee.
What is the Shelter Rule?
Under the Shelter Rule, a person who receives a property interest from a BFP is entitled to the same protection under the recording act as the BFP. This is true even if that person would not otherwise be protected by the recording act because the persona acquired title to the property by gift, intestate succession, or devise.
What are the three types of restraint on alienation.
A restraint on alienation is provision that restricts the transferability of real property.
(1) Disabling - prohibition on transfer of property interest by its owner are always void;
(2) Forfeiture - owner forfeits property interest if owner attempts to transfer it - can be valid on future or life interests;
(3) Promissory - promise by property-interest holder not to transfer property interest can be valid.
What is a right of first refusal?
A right of first refusal is a partial, promissory restraint on alienation that gives its holder a preemptive right to acquire property prior to its transfer to another property. The right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another. If so, the right of first refusal is valid and enforceable by an injunction.
What are a grantee’s obligations when mortgaged property is transferred?
A mortgage is an interest in real property given to a lender (mortgagee) to secure a debt. The debtor (mortgagor) can freely transfer mortgaged property to a grantee unless the mortgage states otherwise. After the transfer, the mortgage remains attached to the property and the debtor remains personally liable for the mortgage debt. The grantee’s obligations depend on whether the grantee either:
(1) took subject to the mortgage - the grantee does not agree to pay and is not personally liable for the debt; or
(2) assumed the mortgage - the grantee expressly agrees to pay and becomes personally liable for the debt, while the debtor becomes secondary liable as a surety.
What happens to an easement when the dominant and servient estate merge?
The easement is terminated when the dominant estate and servient estate merge into the hands of a single owner.
When is an easement by necessity implied?
An easement by necessity will be implied if these three elements are met:
(1) Necessity - the dominant (benefited) estate is virtually useless without an easement across the servient (burdened) estate;
(2) Common ownership - the dominant and servient estate were under common ownership in the past; and
(3) Severance - the necessity arose when the land was severed and the dominant and servient estates were created.
What is a license and when does it revoke?
A licence is a nonpossesory right to enter and use someone’s land for a specified purpose. A license is freely revocable unless the licensee detrimentally relied on the license OR the license was coupled with an interest in the property (ex. remainderman’s license to enter and inspect property).
A license can be revoked by the licensor at any time, but it terminates automatically upon (1) the death of the licensor; OR (2) the conveyance of the licensed property.
What is an express servitude and what are its four requirements?
An equitable servitude is a promise to do or not to do something on land that is enforceable at equity by injunction. An express servitude is enforceable if the four requirements are met:
(1) Writing - satisfies SoF
(2) Intent to run - promising parties intended for the servitude to bind their successors in interest;
(3) Touch and concern - servitude relates to the use, enjoyment, or occupation of the dominant and servient estates; and
(4) Notice - person to be bound had actual, record, or inquiry notice of the servitude
What is a remainder?
A remainder is a future interest in real property that is capable of becoming possessory upon the expiration of a life estate or term of years. There are two types:
(1) Vested - not subject to any condition precedent AND held by an identifiable living person;
(2) Contingent - subject to some condition precedent OR held by an unknown or unborn person.
A vested remainder is subject to complete divestment if the occurrence of a subsequent condition will eliminate the remainder interest.
Compare a life estate and a defeasible life estate.
A life estate is a present possessory interest that terminates upon the death of an individual. The future interest that follows a life estate is called a reversion or a remainder. A remainder is vested if the interest is not subject to a condition precedent and is created in an ascertainable grantee.
In contrast, a defeasible life estate is a life estate that may be terminated upon the death of an individual OR by the occurrence of a stated event. A defeasible life estate is followed by a reversion or an executory interest. These future interests may be transferred during life or upon death.
What are the steps in RAP?
(1) Does the grantee have a contingent future interest? No… RAP doesn’t apply; Yes…
2) Must vested event occur within 21 years after creation of interest? Yes… valid interest; No…
(3) Could interest possibly vest >21 years after validating life ends? No… valid interest; Yes…
(4) Common Law = void interest; Majority = wait & see for 90 years.
What is a class gift and how does it relate to RAP?
A gift is a voluntary transfer of property w/o consideration. A class gift is created when the gift recipients are unspecified but can be identified in the future. Because a class gift is a contingent future interest, RAP renders the gift void unless the interest must vest or fail within 21 years after the end of a relevant life in being with the interest created.
