Property Flashcards
Fee simple absolute
largest possible estate; infinite duration (“To A”)
Defeasible Fee
(1) Fee simple determinable; (2) Fee simple subject to a condition subsequent; (3) Fee simple subject to an executory interest
Fee simple determinable
limited by specific durational language. Property automatically reverts back to grantor upon happening of event.
Accompanying future interest = possibility of reverter
fee simple subject to a condition subsequent
limited by conditional language. Grantor has power to terminate grantee’s estate. Doesn’t terminate automatically.
Accompanying future interest = right of reentry
fee simple subject to an executory interest
Fee Simple Subject to an Executory Interest: automatically transfers to a third party upon happening of event.
Accompanying future interest = executory interest
Life estate
lasts for duration of grantee’s life. Fully transferable during measuring life. LT has ownership rights and must make reasonable repairs. Cannot commit waste.
life tenant rights
right to possess
right to collect rent/lease/mortgage/sell
doctrine of waste
Permissive - failure to take reasonable steps to preserve land, protect property, make reasonable repairs
Voluntary - acts the decrease value of property. intentional or negligent damage
Ameliorative - changes that benefit and increase the value of the property
remainder
future interest created in 3P that arises immediately upon terminating of preceding estate “To A for life, then B.” B has a remainder
vested remainder
remainder that becomes possessory upon natural expiration of preceding estate. Created in ascertainable person + Not subject to condition precedent
vested remainder subject to total divestment
interest has already vested and is subject to termination upon happening of a condition
vested remainder subject to open/partial divestment
remainder vested in class of people, at least one is alive + capable of taking possession. “To A for life, remainder to B and heirs”
(Class gifts)
contingent remainder
arises if (a) there’s condition precedent to future interest becoming possessory and (b) future interest vests in an unknown or unborn person
executory interest
created in a 3P that cuts prior estate short upon happening of specified condition
shifting executory interest
arises when title shifts from grantee to a third party
Always follows a defeasible fee or VR subject to total divestment.
springing executory interest
arises when title springs from grantor to third party
“To A if and when he gets married”
Rule against Perpetuities
no property interest is valid unless it must vest, if at all, no later than 21 years after the dead of a life in being at the time the interest was created.
Affected Future Interest = contingent remainder, vested remainders subject to open, executory interests
tenancy in common
each tenant holds an undivided interest with unrestricted rights to possess whole property. No right of survivorship.
joint tenancy
two or more persons hold an undivided interest in property with right of survivorship.
4 Unities (PITT): Possession, Interest, Time, Title
severance of joint tenancy
A JT may be severed when one tenant conveys her interest in the property. The severance of a JT converts it to a tenancy in common (“TIC”)
tenancy by the entirety
only between married parties at time of grant. Severed by death, divorce or mutual agreement. Right of survivorship. Can’t convey w/o consent of other spouse
tenancy for years
has a start and end date. Terminates automatically. created by express agreement. no notice required to terminate
periodic tenancy
repetitive for a set period of time with no predetermined end date. Created by express or implied agreement. Notice required to terminate
tenancy at will
no stated duration. lasts as long as parties desire. may be terminated by either party but must give reasonable time to vacate
tenancy at sufferance
Holdover Tenant. Tenant occupies space after expiration. Tenancy lasts until T vacates, or L evicts T or L elects to hold T to a periodic tenancy
mortgages and joint tenancies
Lien Theory (Maj) – JT can take mortgage on her interest w/o severing JT bc no title passes to mortgagee
Title Theory (Min) – JT is severed if any JT takes a mortgage on her interest bc title passes to mortgagee
Tenant Duties
duty to pay rent
duty to repair
avoid waste
LL remedies for T’s breach
T retains possession: File for notice of eviction OR continue lease and sue for rent due
T abandons premises: Surrender (treats as abandonment and release T from lease); Ignore (Min) hold T liable for unpaid rent; Re-let (Maj) lease premises to new Ts and hold breaching Ts liable for any losses
LL Duties
duty to deliver
repair
implied warranty of habitability
implied warranty of quiet enjoyment
Duty to Deliver Possession
Majority/English Rule: LL must deliver actual possession to T
Minority: LL must deliver legal possession
Implied Warranty of Habitability (Residential)
Premises must be fit for basic human habitation. If breached, T’s remedies:
After giving notice to L, T can (1) vacate and terminate lease (2) make reasonable repairs and deduct costs from future rent (3) reduce or withhold rent OR (4) remain in possession and seek money damages
Implied warranty of quiet enjoyment (commercial and residential)
T has right to quiet use and enjoyment of premises w/o interference of L
Actual Eviction
T physically excluded from entire premises. T may stop paying rent
Partial eviction
T may abate to reasonable rental value of partial portion
Constructive Eviction
There must be an actual breach as a result of substantial interference of L.
T must give notice of problem + vacate within reasonable time if L fails to make repairs.
T may stop paying rent and terminate lease
Retaliatory Eviction
L can’t evict T for complaining about violations or refusing to pay rent when L breaches warranty of habitability
LL Liabilities
Common areas – duty of reasonable care
Latent defects – duty to disclose hidden defects reasonable known
Assumption of risk – L is liable for harm caused by negligent repairs
Public use – L liable for known defects if L is aware property is used for public use and T is unlikely to make repairs
T’s liabilties
Duty of care to invitees, licensee, foreseeable trespassers
assignments
T transfers entire leasehold. L can go after T and T1
sublease
T transfers part of leasehold. L can go after T, T can go after T1
easements
nonpossessory interest in land that confers a right to use another’s land
servient estate
burdened land
dominant estate
benefited landed
easement appurtenant
entitles dominant estate owner to use servient estate owners land. Attaches to dominant estate and passes automatically even if not mentioned in conveyance
easement in gross
entitles an individual or entitle to use servient estate. Attaches only to servient estate. Similar to a license but irrevocable and can be transferred
express easement
arises when affirmatively created by parties in a writing that satisfies the requirements for a deed.
writing must include identity parties, words of transfer, description of the property and the grantor’s signature.
Easement by necessity
division of portion of land + absolute necessity of access created by division. Property is virtually useless w/o easement. Expires automatically when necessity ends
implied easement
implied by prior use
easement by prescription
Adverse possession: (1) actual (2) open and notorious (3) hostile (4) continuous. no exclusivity requirement
easement by estoppel
good faith reliance on permission to use easement created to prevent unjust enrichment
negative easement
prevents owner from using land in specific way. Must be expressly created in writing signed by grantor
affirmative easement
tied to land and gives the holder of the dominant estate the right to make affirmative use of the servient estate holder’s property
termination of easements
Released: Signed writing
Merger: easement merges into title
Estoppel: reasonable reliance easement is no longer enforced
Necessity ends
Condemnation: govt taking
Abandonment
Prescription
duty to repair easement
easement holder has duty to make repairs if he’s sole user. If both servient owner and easement holder use easement, the repair costs are apportioned
license
right to use land and enter land of another. revocable at licensors will unless coupled with interest
profits
nonpossessory interest in land. holder of profit has right to take resources from land of another. can be expressly created or by prescription. may be extinguished through misuse or overuse of resources
convenants v. equitable servitudes
Difference is Remedy. Covenant is for money damages; Equitable servitude is for injunctions
real covenants
Written promise or contractual limitation to do or not do something on land
Termination: (a) written release, (b) merger of estates, (c) condemnation of burdened property
for burden to run
Writing, Intent to Bind, Horizontal and Vertical Privity, Touch and Concern, Notice
Horizontal - between original parties; Vertical – Between original party + successors
for benefit to run
writing, intent, vertical privity, touch and concern
equitable servitude
In writing, intent for covenant to run with successors, touch and concern land, notice of covenant
Defenses to enforcement: Pervasive changes in neighborhood, estoppel, acquiescence, unclean hands, laches
implied reciprocal servitude
can be applied from common scheme if 3 elements are met: (1) intent to create common scheme (2) restrictive covenant (3) notice: inquiry, actual or record
adverse possession
trespasser may acquire title to property. (1) actual (2) exclusive (3) open and notorious (4) hostile (5) continuous for statutory period
land-sale contracts
SOF must be met: In writing, signed by party charged, and contain all essential terms of K.
Exceptions: Partial performance
Land Sale K outside SOFs is enforceable if any of the two following apply: (1) pay all or some of purchase price, (2) take possession and/or (3) make substantial improvements
equitable conversion
when land-sale K is formed
Equitable title passes to buyer
Legal title remains with seller until close
Risk of loss follows equitable title
uniform vendor and purchasers risk act
Seller retains risk of loss until transfer of legal title or buyer takes possession
marketable title
title free from defect or unreasonable risk of litigation. seller generally not required to deliver marketable title until closing
time is of the essence
not enforced unless specifically part of the K
duty to disclose defects
seller must disclose all known material physical defects not readily observable
deeds
legal instrument that transfers ownership/legal title from seller to buyer (Donative intent, delivery and acceptance)
deed requirements
Writing - must comply with SOF
Delivery - express intent
Acceptance - presumed
Property description - reasonably definite description
Identified parties
Signed by Grantor
Merger- at closing, deed and contract merge into one
recording acts - Notice
subsequent BFP wins “without notice” “in good faith”
recording acts - race
first to record wins regardless of knowledge of prior interest
recording acts - race-notice
subsequent BFP protected if (1) takes w/o notice and (2) first to record
types of notice
tested at time of conveyance
actual: grantee with personal knowledge of prior interest
inquiry: if reasonable investigator would disclose prior claims
record: property recorded and appears in chain of title
General Warranty Deeds
Seller Warrants no title defects were created by him or all prior holders. Contains 6 covenants:
Present:
Seisin - grantor owns land described
Right to convey - grantor has right to transfer title
Against encumbrances - no undeclared encumbrances on the land
Future:
Quiet enjoyment - no interference from 3P claims
Warranty - grantor will defends against 3P claims
Further assurances
Special Warranty Deed
Same 6 covenants but only warrants against defects arising during time grantor has title
Quitclaim Deed
makes no warranties about the land
BFP
someone who purchases property for value w/o notice of prior conveyance or encumbrance
Lien priority of mortgages
purchase money mortgage –> first recorded liens –> all other recorded liens –> unrecorded liens
Mortgage
security interest in land that serves as collateral for repayment of loan
Lien Theory: mortgagor has title + right to possession absent foreclosure
Title Theory: mortgagee has title to property during loan period
acceleration clause
terms in loan agreement that require mortgagor to pay off full loan immediately if certain conditions are met
foreclosure
method by which security is applied to satisfy a debt. Property is sold to satisfy debt in whole or in part
purchase money mortgage
mortgage given in exchange for funds used to buy property. takes priority over mortgages. must be recorded
redemption
Equitable: Anytime prior to foreclosure sale, can redeem property by paying amount due
Statutory: For certain period, can buy property back after foreclosure sale
deficiency judgement
if debts exceed sale proceeds, mortgagee can file suit against mortgagor for debt balance
taking subject to a mortgage
buyer doesn’t agree to pay and is not liable for debt. seller remains liable for debt
assumption of mortgage
buyer agrees to pay and becomes personally liable for mortgage. seller becomes secondarily liable as surety
lateral support rights
ownership of land includes rights to have land supported in its natural state by adjoining land
Undeveloped: Landowner who excavates on land is strictly liable for damages to undeveloped adjoining land
Improvements: landowner who excavates on his land is strictly liable only if adjoining land would have collapsed in undeveloped state
Improvements contribute to collapse: Landowner who excavates on land is liable only if he’s negligent
subjacent support rights
underground structure must support surface structure existing when subjacent estate was created
Strict liability - subjacent owner is strictly liable for support surface land + pre-existing surface structure
Negligence - subjacent owner is negligent for failure to support subsequently constructed buildings
riparian doctrine
water belongs to those who own land bordering water course
Reasonable use theory (maj): riparian owners share rights to reasonable use + are liable to other owners if use is unreasonable interfering with other owner’s use
Natural Flow theory (min): riparian owner may be enjoined for any use resulting in substantial or material reduction in others water quality, quantity or velocity
zoning ordinances
zoning ordinances are valid so long as they’re reasonably related to public welfare, not too restrictive and not discriminatory as to race or particular parcel
variance
landowners can get govt permission to depart from literal restrictions of ordinace. To qualify for variance, landowner must show (1) undue hardship and (2) variance won’t be contrary to public welfare
use variance
permit that allows operation of structure for purpose not permitted by ordinance. Applicant must show (1) undue hardship w/o variance (2) variance won’t harm community and (3) no fault in seeking request/not a bad actor
area variance
allows building to exist in dimension slightly different than what variance permits
non-conforming use
pre-existing use of land that now doesn’t conform to ordinance at the time of enacting
takings clause
if govt reduces property value or takes property belonging to another, the govt must pay damages and provide just compensation to the owners
fixtures
chattel attached to real property
Structures and items incorporated into structure become part of realty but can be removed if
- S preserved right to remove in K or
- Leased property can be restored to former condition w/o damages in reasonable time
fair housing and discrimination act (FHA)
prohibits discrimination in the sale, rental and financing of homes
Protected Classes: applies to discrimination based on color, race, religion, national origin, sex, disability, and familial status
FHA exception
owner occupied building with no more than 4 units and single family homes sold or rented w/o broker are not subject to FHA
Restraints on Alienation
Disabling – total prohibition on transfer of property interest by its own, always void
Forfeiture – property is forfeited if interest owner attempts to transfer his interest
Promissory – promise by party to transfer property interest
void contract
Void (invalid upon creation): Forgery, illegality, fraud in factum, duress by physical compulsion
voidable contract
Voidable (valid unless set aside): lack of capacity, mistake, misrepresentation, duress by threat, undue influence, fraud in inducement
real estate contracts
a real estate broker is entitled to commission if (1) a ready, willing and able buyer is produced or (2) seller enters into sale contract with a buyer during listing period
transfer of promissory note & mortgage
mortgagee is generally free to transfer promissory note and/or mortgage securing that note unless:
Mortgage or note expressly states otherwise
Transfer is forbidden by statute/public policy OR
Transfer will increase duties, burdens or risks on mortgagor
Rents & Taxes
Cotenant generally not required to pay rent to the other cotenants and has no right to be reimbursed for repairs.
cotenant can seek contribution for certain operating expenses (e.g., taxes), contribution is limited to the amount that exceeds the property’s rental value when sought by a cotenant in sole possession.
lapse
a devise of property will fail if beneficiary dies before testator and no alternate beneficiary is named—unless the testator indicates a clear intent that the devise is to survive the beneficiary’s death.
right to third party rents
A co-tenant must account to other co-tenants for rent received from third parties. Each tenant is entitled to an amount of the rent proportionate to his ownership interest.
contribution for operating expenses
A co-tenant can collect contribution from the other co-tenants for paying more than his portion of operating expenses, which includes property taxes.
