Property

Question 1

PROPERTY - 1-Ownership - B-Future Interests - 10-Rule Against Perpetuities

1. When is RAP violated?

2. RAP: to A and their heirs so long as it is used for residential purposes, but if it is ever used for other than residential purposes, then to B?

Answer 1

1. RAP - VEST OR FAIL IN LIFE + 21 YEARS

• if a future property interest is not guaranteed to vest or fail within a measured life + 21 years, then it violates the rule against perpetuities

2. EG RAP VIOLATION

• to my sister and her heirs so long as it is used for residential purposes, but if it is ever used for other than residential purposes, then to the local community center - not guaranteed to vest or fail within life of sister + 21 years - sister has fee simple determinable and the brother retains a possibility of reverter - the executory interest to the community center is void

Question 2

PROPERTY - 1-Ownership - C-Concurrent Estates - 4-Rights & Obligations

1. What happens if one cotentant rents the property to a 3rd party?

Answer 2

1. COTENANT MAY RENT TO 3RD PARTY & SHARE RENTS & POSSESSION

• one cotenant may unilaterally rent property to a 3rd party, and must share the rent with cotenants proportionally; other cotenants can’t eject 3rd party, but they still have equal right to possession

Question 3

PROPERTY - 3-Land Sale Contract - B-Performance - 2-Time of the Essence

1. When is time of the essence in a land sale contract?

Answer 3

1. GENERALLY TIME IS NOT OF THE ESSENCE

• in a land sale contract, generally time is not of the essence, so parties may perform on the closing within a reasonable time; to make time of the essence requires express language or a strong inference of intent

Question 4

PROPERTY - 3-Land Sale Contract - D-Equitable Conversion - 4-Effect of the Buyer’s or Seller’s Death

1. Between making the land sale contract and closing, what are the buyer’s and seller’s interests in the property?

Answer 4

1. BUYER = EQUITABLE TITLE = REAL PROPERTY INTEREST / SELLER = LEGAL TITLE = PERSONAL PROPERTY INTEREST

• between formation of the land sale contract and closing, the buyer has equitable title which is treated as an interest in real property; the seller has only legal title and their right to payment is treated as personal property, eg, holds it in trust for the buyer; if either dies, their interests pass accordingly - buyer’s as real property and seller’s as personal property; buyer bears the risk of loss unless contracted otherwise

Question 5

PROPERTY - 4-Titles - A-Adverse Possession - 1-Continuous

1. What is required for continuous adverse possession?

Answer 5

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1. CONTINUOUS POSSESSION = WITHOUT SUBSTANTIAL INTERRUPTION

• adverse possession requires continuous possession for the statutory period without substantial interruption
• substantial interruption is generally found if:
  
  • adverse possessor abandons it with intent to relinquish
  • owner retakes it open and notoriously, or
  • 3rd party ousts
• could be used seasonally if that’s the nature, eg, a beach house

Question 6

PROPERTY - 4-Titles - B-Delivery & Recording of Deed - 4-Title insurance

1. What does title insurance protect against and who does it apply to?

Answer 6

1. TITLE INSURANCE = HOLDER PROTECTED FROM PRIOR DEFECTS FOREVER

• title insurance protects the holder from defects existing at purchase, and continues even after land is sold; only protects the policy holder (and their heirs), not subsequent buyers, ie, it doesn’t run with the land

Question 7

PROPERTY - 5-Mortgages & Security Interests - C-Transfer - 1-By the Mortgagor

1. What liabilities do the mortgagor/grantor and the grantee have upon a transfer?

Answer 7

1. MORTGAGOR LIABILITY: SUBJECT TO = PRIMARY / ASSUMPTION = SECONDARY / MODIFICATION = NONE

• if a mortgagor/grantor transfers property, the grantee takes it subject to the mortgage (ie, subject to foreclosure) and the grantor remains primarily liable; if the grantee assumes the mortgage, the grantee become primarily liable and the grantor remains liable secondarily as a surety; if the mortgagee and grantee modify the contract, the grantor has no liability

Question 8

PROPERTY - 6-Disputes About the Use of Land - A-Easements - 5-Termination

1. What happens to an easement when one party acquires both estates?

Answer 8

1. MERGED ESTATES TERMINATES EASEMENT

• if one party acquires title to both the dominant and servient estate, the easement terminates

Question 9

PROPERTY - 6-Disputes About the Use of Land - A-Easements - 2c-Easement by Prescription

1. How is an easement by prescription created?

Answer 9

1. EASEMENT BY PRESCRIPTION IS LIKE ADVERSE POSSESSION BOT NOT EXCLUSIVE - ANOCH(E)

• an easement by prescription arises when one adversely uses another’s land in a way that is (1) actual, (2) open and notorious, (3) continuous, and (4) hostile

Question 10

What is the relationship between a zoning ordinance and a private rule by an HOA?

Answer 10

• A private rule may not violate a zoning ordinance; however, the two may coexist.
  • A private rule may not offer less restriction than an established zoning ordinance, but it may demand further restriction in addition to the ordinance.
  • If both a private rule and zoning ordinance are in place, the rule will be enforceable if it does not weaken or violate the zoning ordinance.

Question 11

What are the requirements for an equitable servitude?

Answer 11

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Equitable Servitude

1. a writing that satisfies the Statute of Frauds
2. restriction touched and concerned the land
3. places a burden on one and gives a benefit to the other
4. intent that the promise would be binding on the grantee’s heirs and assigns
5. notice - actual, constructive

Question 12

Common Interest Developments

• What are they?
• What powers do they have?

Answer 12

Common-Interest Communities / Developments – CIDs

• housing developments comprised of individually owned units
• shared facilities and common areas
• created through legal documents drafted by the developer
  
  • may be changed according to the community’s needs
• typically governed by an association made up of individual unit owners through an elected board

Power

• direct restraints on alienation of property are valid if reasonable
• indirect restraints are valid only if they have a rational justification that limit the potential market for the property
  
  • eg, pets, paint color, planting restrictions, .
• to ensure compliance with restraints, a board may:
  
  1. impose fines or penalties
  2. withdraw privileges to use common areas
  3. require prior submission of plans for projects to ensure compliance
  4. conduct reasonable inspections if reasonable belief violations exist
  5. deny voting privileges or board positions

Question 13

What is the difference between
1. Buying subject to a mortgage
2. Assuming a mortgage
3. Release by the mortgagee

Answer 13

1. Buying subject to a mortgage
   - a buyer is not personally liable for a prior mortgage, but if the responsible party ( prior mortgagee) fails to pay, the buyer is subject to foreclosure of the property
2. Assuming a mortgage
   - if the buyer assumes the mortgage, they become primarily responsible for its payment, while the prior mortgagee is secondarily responsible
3. Release by the mortgagee
   - if the mortgagor releases the mortgagee from responsibility, they are no longer secondarily responsible, and the buyer has full reaponsibility

Question 14

What happens if a life tenant commits waste?

Answer 14

A life tenant has a duty not to commit voluntary or permissive waste

Permissive Waste

• failure to keep the property in repair, to pay taxes, or pay interest on any mortgage

Voluntary Waste

• affirmative act that serves to somehow damage the land.
  
  • not necessarily an act that reduces the value of the land
  • changing the basic use of the land constitutes voluntary waste even if the land value increases as a result.
• The life tenant is held liable to the remainderman for any waste during their life tenancy

Question 15

What are a property owner’s rights when an adjacent owner blocks their sunlight, view, or fresh air?

Answer 15

There are no rights to sunlight, view, or fresh air, so they have no cause of action

Question 16

What are the SOF requirements for a land sale contract?

Answer 16

The Statute of Frauds requires a contract for the sale of land to contain:

1. identify the parties,
2. a description of the land,
3. evidence an intent to buy and sell,
4. a price term, and
5. signed by the party against whom enforcement is sought.

- Courts are liberal regarding the nature of a signature; it need only reflect an intent to authenticate the writing.

Question 17

Is a judgment lien good against property conveyed prior to the judgment when deed is not yet recorded?

Answer 17

If someone obtains a judgment lien against property conveyed prior to the judgment but not yet recorded, the judgment lien fails - because either/and:
- the one who obtained the judgment lien isn’t a BFP because they didn’t pay value
- the judgment can only attach to property actually owned by the defendant

Question 18

What is estoppel by deed?

Answer 18

Estoppel by deed applies to validate a deed where one incorrectly purported to have title, then later obtained title:

• a warranty deed,
• executed and delivered by a grantor
• who had no title to the land at that time,
• but who represented that they had such title and
• who thereafter acquired such title.

Question 19

If there is a conflict of laws as to a real property issue, which state’s choice of law rules will apply?

Answer 19

If there is a conflict of laws as to a real property issue, the choice of law rules of the situs will apply?

• situs: state where the property is located

Question 20

What are latent defects and what are a property seller’s duties as to them?

Answer 20

A latent defect is a defect known to the seller that will not be open and obvious to a buyer, ie, hidden.

Sellers are required to disclose all latent defects to a buyer, and are prohibited from concealing such defects in any way.

Question 21

What is a purchase-money mortgage and why is it important?

Answer 21

A purchase-money mortgage (PMM) is when the loan and the mortgage are made for the purchase of a house, ie, the loan is used to purchase the house, and the deed and the mortgage are made as part of the same transaction.

A mortgage on a house that is made after the mortgagee has purchased the house is not a PMM.

This is important because a PMM lien on a house has a higher priority than other liens when the house is foreclosed

The reason for this is that the mortgagee takes the house that is automatically encumbered by the PMM, thus a prior judgment lien cannot attach to the property before the PMM lien

Question 22

What is marketable title and when is it required?

Answer 22

Marketable title is title free from encumbrances. Unless a land sale contract states otherwise, the obligation to provide marketable title is implied.

If there is an encumbrance, the buyer is not required to purchase the property