Property Flashcards
Under a lease assignment, who can the landlord collect rent from between a tenant and a subletter?
Either the tenant or the subletter, because…
- tenant is in privity of contract with the landlord
- subletter is in privity of estate with the landlord
Under a sublease, who can the landlord collect rent from?
Only the tenant because the tenant is in privity of contract and estate with the landlord
Does a landlord need a tenant’s permission before transferring their interest?
NO.
What standard is applicable is the lease requires the landlord’s permission to transfer but is silent as to the standard?
- Majority rule: landlord may deny permission to transfer only for a commercially reasonable reason
- Minority rule: Landlord may deny permission at her discretion, for any reason at all
What are the three present implied covenants in a general warranty deed?
Covenants of…
- seisin
- right to convey
- against encumbrances
What are the three future implied covenants in a general warranty deed?
Covenants of…
- quiet enjoyment
- warranty
- further assurances
Covenant of seisin
Warrants that the deed describes the land in question
Covenant of the right to convey
Warrants that the grantor/seller has the right to convey the property
Covenant against encumbrances
Warrants that there are no undisclosed encumbrances on the property that could limit its value
Covenant of quiet enjoyment
Grantor promises that the grantee’s possession will not be disturbed by a third-party claim
Covenant of warranty
Grantor promises to defend against future claims of brought by a third party
Covenant of further assurances
Grantor promises to fix future title problems
Protections of special warrant deed
Same six covenants as general warranty deed, but only applicable to the acts or omissions of the grantor as to the health of the title
Implied warranty of fitness or suitability (new homes): applicability and protection
- Implied in almost all jurisdictions in a contract for the sale of a newly constructed residence
- Seller warrants that he used adequate material and good workmanship in working on the residence
Proper plaintiffs of implied warranty of suitability or fitness
- Initial home purchaser
- Subsequent purchasers who di not contract directly with the commercial developer or builder to recover damages
Three elements that must exist for an assignee-landlord to have the right to enforce a covenant
- original parties to lease intend to bind assignee-landlord
- covenant touches and concerns the land (affects the land’s use or value)
- transfer brings the assignee landlord into privity of estate mutual or successive relationship in the same property interest) with the tenant
Between the original landlord and the assignee-landlord, who can enforce a covenant that runs with the land if all three elements are not met?
Only the original landlord
Lien state (majority)
Treats a mortgage as a lien that does NOT sever a joint tenancy
Title state (minority)
A mortgage does sever a joint tenancy and coverts it into a tenancy in common
Elements of adverse possession
- Open and notorious, use that would put a reasonable true owner on notice of the adverse use
- Exclusive
- Hostile, claim of competing title
- Continuous (seasonal or infrequent use may suffice)
- Statutory Period
Five elements of real covenants
- Writing (SOF)
- Intent to run with the land
- Touch and concern
- Notice
- Privity (horizontal and vertical)
Horizontal privity
Privity of estate where the estate and covenant are contained in the same instrument (the deed)
Vertical Privity
Relationship between the original party to the agreement and his/her successors to the property
What specific types of privity are required to run a burden?
- Strict vertical privity (successor must take the original party’s entire interest)
- Horizontal privity
What specific kinds of privity of required for a benefit to run?
Only relaxed vertical privity (successor only needs to take an interest that is carved out of the original party’s estate)
What remedies are provided for real covenants vs. equitable servitudes?
- Real covenants –> real money, damages
- Equitable servitudes –> injunction
Equitable servitude
- another way to bind a successor to an original party’s promise
- easier standard to meet than real covenant (does not require privity at all)
Implied reciprocal servitude
- Equitable servitude that does not need to be in writing
- Usually comes up in planned communities
Characteristics of an implied reciprocal servitude
- Developer intends to create a covenant/promise on all plots in the subdivision
- Promises must be reciprocal (benefits and burdens all parcels equally)
- Must be negative (a restriction on the owner’s use)
- Successor must be on notice, at least inquiry
- Must be a common plan or scheme
What notice is required to run a real covenant?
Actual or constructive (record notice)
Equitable right of redemption
Allows the debtor to reclaim the property by paying the full amount of debt due including interest to lender at any time prior to foreclosure sale
Statutory right to redemption
Allows the debtor to reclaim the property by paying the foreclosure sale price to the purchaser within a fixed period of time (typically between three months and two years)
How does a forged signature affect a deed?
The deed is invalidated
Constructive adverse possession
Arises when the adverse possessor:
- enters the property under color of title (facially valid will or deed the describes the entire property)
AND
- actually possesses a reasonable portion of the property for that statutory period
Effect of constructive adverse possession
Can provide title to the whole property
What happens if a deed names a nonexistent co-tenant?
- Deed is void as to the co-tenant
AND - Grantor retains the non-existent co-tenant’s interest and becomes tenants in common with the other co-tenant named in the deed
Buyer who is “ready, willing, and able”
To purchase the property on terms that are agreeable to the seller
General rule re: broker’s right to commission based on “ready, willing, and able” buyer
Broker has a right to commission when the contract of sale is executed or, if the contract is subject to conditions, when the conditions are satisfied even if the sale does not take place
Rule in minority states re: broker’s right to commission based on buyer who is “ready, willing, and able”
“No sale, no commission” broker is not entitled to a commission if the buyer defaults
Equal dignities rule
A contract is required to pay a commission to a real estate agent or broker to be in writing because the underlying contract to sell the real property must be in writing
Lien theory
- Lender receives security interest in property
- Mortgagor retains title and possession unless lender forecloses
Title theory
- Lender receives legal title and is considered owner of the mortgaged property until the mortgage is paid in full
- Mortgagor retains right of possession
- Title reverts to mortgagor once debt is paid
Intermediate theory
Mortgagor retains title and possession until default (considered owner of the mortgaged property) then full title passes to lender without foreclosure
What happens if the mortgagor abandons the mortgaged property?
Mortgagee is entitled to take possession and incurs liability as if they were the owner
Lien priority on real property
- Purchase-money mortgage
- First recorded liens (senior priority)
- All other recorded liens (junior priority)
- Unrecorded liens (lowest priority)
When is an equitable vendor’s lien implied?
A seller transfers title to a buyer and any portion of the purchase price remains unpaid
