PROPERTY Flashcards
📌 What happens if a purchaser in a real estate sales contract dies after the contract is formed but before closing?
✅ The heirs or devisees of the deceased purchaser have the right to compel the vendor to complete the transaction.
✅ They may seek a judgment for specific performance if necessary.
📌 Why does Quality Air Group’s interest not violate the Rule Against Perpetuities, and how should it be characterized?
✅ Rule Against Perpetuities Compliance: The interest must vest or fail by 2050, which is less than 21 years after creation. (It could be longer with a measuring life.)
✅ Shifting vs. Springing Use:
- Shifting use: Cuts off an interest conveyed to a grantee.
- Springing use: Cuts off an interest retained by the grantor.
Quality Air Group’s interest is a shifting use because it cuts off Aquatic Preservation Association’s estate, not the banker’s.
📌 What is a fee simple subject to an executory interest, and why does the librarian prevail in this case?
✅ Fee Simple Subject to an Executory Interest: An estate that automatically divests to a third party upon the occurrence of a named event.
✅ Case Application:
The professor deeded the property to the librarian, but if it ceases to be used for educational purposes, it transfers to the alma mater.
Serving a beer does not indicate a change in educational use, so the condition has not been triggered.
Result: The librarian retains the estate because the named event has not occurred.
📌 When is a deed delivery considered valid, and why is the deed invalid in this case?
✅ Valid Delivery of a Deed:
The grantor giving the deed to the grantee creates a presumption of valid delivery.
Extrinsic evidence can be used to prove the grantor’s lack of intent to transfer title.
✅ Why the Deed Is Invalid Here:
- The skier gave the deed to the instructor, but oral evidence suggests the skier only intended to transfer title if she did not return from her mountain climb alive.
- This shows no present intent to transfer title, so no valid delivery occurred, and the deed was not effective.
📌 Why does the recording act not protect a subsequent purchaser after adverse possession, and who has priority in this case?
✅ Adverse Possession & the Recording Act:
- Acquisition of title through adverse possession is NOT considered a “conveyance” under the recording act.
- Therefore, the recording act does not protect a subsequent purchaser who buys the property after adverse possession is perfected.
✅ Priority in This Case: - Since the engineer cannot rely on the recording act, the rule of “first in time, first in right” applies under common law.
- The hunter’s interest takes precedence over the engineer’s interest.
📌 Is the animal rescuer entitled to have the water district pay to restore the property to its previous condition, and why or why not?
✅ No, the animal rescuer is not entitled to the property’s previous condition:
- The cost of restoring the property to its original special condition is greater than the cost of restoring it to match the surrounding area.
✅ Reasonable Compensation:
- The animal rescuer is entitled to reasonable compensation for any damage done during the water district’s repair of the pipes.
- However, the rescuer is not entitled to restoration of the land to its previous special condition if it costs more than restoring it to match the surrounding area.
- The cost difference (restoring to original condition vs. surrounding area) makes the higher cost restoration unreasonable.
What kind of estate is created when property is given to three children, but any child’s share transfers to the others if they do not graduate college within five years?
A fee simple subject to an executory interest. This type of estate is automatically divested in favor of a third party upon the occurrence of a specific event. Here, the three children receive the property, but if any fail to graduate from college within five years, their share automatically transfers to the remaining graduates.
📌An owner had a home valued at $100,000 and owed Bank No. 1 $50,000 for a first mortgage lien. The owner owed Bank No. 2 $40,000 for a second mortgage.
The owner applied to Bank No. 1 for additional funds to purchase a motor home, and the bank provided the funds. Bank No. 1’s mortgage was increased to $100,000 after it increased the homeowner’s mortgage.
Should Bank No. 2 feel undersecured due to Bank No. 1 increasing the homeowner’s mortgage?
✔️Yes, because Bank No. 2 (junior mortgage)should have been required to authorize the additional loan.
✔️A senior mortgage modification that materially prejudices a junior mortgage holder, such as increasing the principal amount, allows the junior mortgage to prevail over the modification.
✔️Here, Bank No. 1’s increase in the mortgage amount affects Bank No. 2, but because Bank No. 2 prevails over the modification, it should not feel undersecured.
📌A husband inherited a beach house on the ocean. The property taxes were so high that the husband could no longer afford to live at the beach house.
📌The husband was divorced three times before he married his wife. The husband had three daughters with his wife and three sons from his prior marriages. The husband conveyed the beach house “to my wife and the female heirs of her body.”
📌Under the majority rule, what estate does the wife receive when property is conveyed “to my wife and the female heirs of her body”?
✔️The wife receives a fee simple absolute. Traditionally, the language “to A and the (male or female) heirs of his body” created a fee tail, which limited inheritance to direct descendants.
✔️However, under the majority rule, fee tails are disfavored and are typically interpreted as fee simple absolute, meaning the wife owns the property outright, and the children (male or female) take nothing.
📌If Daughter and Son hold property as joint tenants with right of survivorship, and Daughter predeceases Son, what interest does the Granddaughter inherit from Son’s will?
✔️ The granddaughter inherits complete ownership of the property. Since Daughter and Son were joint tenants with right of survivorship, when Daughter predeceased Son, her interest automatically transferred to Son.
✔️ Upon Son’s death, his will bequeaths the property to the granddaughter. Although she is married, a bequest to her does not automatically create a tenancy by the entirety with her spouse, so she takes sole ownership.
📌What is a requirement for a judicial foreclosure sale?
✔️ The sale must result in a fair sale price, which is not necessarily the fair market value of the property.
✔️ Judicial foreclosure sales must also be public, have proper notice, and be conducted in a reasonable manner, typically regulated by statute.
✔️ The fairness of the sale price is based on the mortgagee’s due diligence in conducting the sale, rather than the property’s actual market value.
📌What course of action should the young man take to continue his car painting business in a multi-family residential zone?
✔️He should apply for a conditional use permit. A** conditional use permit allows a non-permitted use in a zoned area if it is compatible with the surroundings and meets specific conditions set by the city**.
✔️The city may impose air pollution restrictions to control fumes. However, since the business is industrial in nature, approval is unlikely, but this is the best available option.
A landlord and tenant entered into a two-year lease agreement. After six months, the tenant assigned his interest in the property to a friend, who failed to pay the rent. The landlord may sue both the tenant and the friend for the unpaid rent.
Yes, the landlord may sue both the tenant and the friend for the unpaid rent.
When a tenant transfers all of his remaining rights and obligations under the lease, an assignment occurs. Following an assignment, both the original tenant and the assignee may be held liable for any breach in the lease agreement (such as unpaid rent). The original tenant is liable through privity of contract, and the assignee is liable through privity of estate. However, only a novation would discharge the original tenant from any further contractual liability.
What type of future interest do the colonel’s son’s children hold in the ranch after the conveyance of the property to the colonel’s friend for life?
The children hold a contingent remainder.
This is because the remainder is contingent upon the birth of the children, who are unborn at the time of the conveyance. Since the remainder is to the “children of my son,” it is unascertained (the children are not yet known or born) and thus contingent. Each child’s interest would vest when they are born, subject to the possibility of future children being born as well.
What is the likely outcome in separate suits to quiet title to a forested parcel and a beach parcel, based on the deeds from a landowner to his brother, daughter, and sister?
The forested property conveys a fee simple subject to an executory interest, but the executory interest in favor of the sister violates the Rule Against Perpetuities and is void. This leaves a fee simple determinable in favor of the brother, meaning the property will revert back to the landowner’s successor, in this case, the cousin.
What is the best path for the woman to pursue to achieve her goal of installing glass block in a window space?
The best path is to file an application for an area zoning variance, demonstrating practical difficulties in meeting the window requirement. A variance allows an exception to zoning codes for a specific property. To be granted a variance, the petitioner must show that meeting the zoning requirement is impractical or creates an undue hardship. In this case, the woman must argue that it is not feasible to secure the premises against break-ins and vandalism without using glass block for the window.
A landowner’s best friend had just found a new job and needed to find a new place to live. The landowner’s property was ideally
located near the best friend’s new place of employment. The landowner agreed in writing to allow his friend to live on the property as long as the friend promised to maintain the property. The friend immediately began living on and maintaining the property. Several
months later, the landowner decided to sell the property to his neighbor, who intended to live on it. Prior to completion of the sale, the neighbor inspected the property, and saw that the landowner’s friend lived there. After the sale was complete, the neighbor asked the landowner’s friend to vacate the property immediately, but the friend refused. He has been maintaining the property in good condition since he moved onto it. The jurisdiction in question applies the common law.
Will the neighbor prevail in an action to take possession of the property and force the landowner’s friend to vacate?
The correct answer is:Yes, because the landowner terminated the tenancy.
Discussion of correct answer:Under the stated facts, the landowner granted his friend a tenancy at will. A tenancy at will is an estate in land that is terminable at the will of either the landlord or the tenant. At common law, this estate could be terminated by either party without advance notice. A tenancy at will may terminate under a variety of circumstances, including: the death of either party; the tenant’s causing the premises to fall into disrepair that affects the property value; the tenant’s assigning his tenancy to someone else; the landlord’s leasing the property to someone else; or the landlord’s conveying his interest in the property to a third person. Here, the landowner validly terminated the tenancy at will when he sold the property to the neighbor. As such, the friend no
longer has the right to possess the property, and the neighbor is entitled to take immediate occupancy.
A lawyer handed his son a deed granting the lawyer’s land “to my only granddaughter.” The lawyer instructed his son not to
give the deed to the granddaughter unless and until she survived her parents. In his conversation with his son, the lawyer
expressly retained the right to retrieve the deed. The son placed the deed in a desk drawer. Alas, the granddaughter discovered
the deed and promptly recorded it in accordance with the state’s recording act.
Three months later, the lawyer was involved in an automobile accident with another driver. The driver sued the lawyer and was
awarded a $100,000 judgment. Having no actual notice of the conveyance to the granddaughter, the driver recorded a
judgment lien against the lawyer’s land and sought enforcement of the lien. The state recording act reads, “Every unrecorded
conveyance of real property is void against any subsequent purchaser for consideration or mortgagee of the same property
whose conveyance is first duly recorded, and as against any subsequent judgment on record affecting the title.”
If the court finds in favor of the driver and enforces the judgment lien against the land, it will most likely be for which of the
following reasons?
The correct answer is:The conveyance by the lawyer to his granddaughter was not effective.
Discussion of correct answer:Since the granddaughter properly recorded her deed to the property, the driver must show that
there was no effective transfer of title to the granddaughter because there was no valid delivery of the deed. Grantors (such
as the lawyer) can give physical possession of a deed to a third party (such as the lawyer’s son) with instructions to transfer
the deed to a grantee under specified circumstances. All extrinsic evidence is admissible to determine whether the grantor
had the present intent to transfer title at the time he gave the deed to the third party. Oral evidence that a grantor, in
instructions to the third party, expressly retained the right to retrieve the deed results in a finding of no delivery. There is no
valid delivery in this case because the lawyer retained the right to retrieve the deed from his son.
In 2050, a developer purchased a parcel of land from the government. He intended to develop the area as a ski resort.
However, before he could make any improvements on the land, the developer suffered a head injury and was declared
incompetent. In 2055, an investor purchased the parcel next to the developer’s. Again, the seller was the government. The
investor built a large successful ski resort and, in 2065, she inadvertently expanded her resort onto the developer’s land. The
developer died in 2080. His daughter inherited his estate. In 2090, the investor was killed when she skied into a tree, and her
two sons inherited the resort. In 2104, the developer’s daughter sought to have the investor’s sons ejected from that part of their
resort that was on her land. The statutory period for adverse possession in this jurisdiction is 20 years.
Who will prevail in a suit by the developer’s daughter against the investor’s sons, and why?
The correct answer is:The investor’s sons will succeed because, by tacking their possession with their mother’s
possession, they have been in possession of the land for the required statutory period.
Discussion of correct answer:In order to fulfill the statutory period for adverse possession, there need not be continuous
possession by the same person. The period of adverse possession of one possessor can be tacked to the period of adverse
possession of another possessor when there is privity between the two. Because the investor’s sons took possession after a voluntary transfer from the investor, they are in privity and can tack their period of possession to her period of possession. In
addition, they can claim open, hostile, and continuous possession for the statutory period of 20 years, satisfying all the
requirements for adverse possession.
A farmer repaired farm machinery. The farmer worked on the machinery in a building on his farm, but parked the machinery
on an unused area at the back of his farm. The machines never stayed in that area for more than a week at a time, and the
farmer often had no machinery stored there. After the farmer had been operating his business for six years, he died. His son
inherited both the farm and the machinery repair business and continued to use the area. One day, five years later, the son
hauled a tractor to the area, only to find that a fence had been put up around it. His neighbor put the fence up after a survey
showed that he owned the area. Until the survey, both the son and the neighbor assumed that the area belonged to the son.
The statutory period for adverse possession in this jurisdiction is 10 years.
Will the son be able to take title to the area by adverse possession?
The correct answer is:Yes, because the farmer and his son were in continuous possession of the property for longer than
the statutory period.
Discussion of correct answer:Adverse possession requires proof of possession that is: (1) open, visible, and notorious; (2)
actual; (3) exclusive; (4) hostile and under a claim of title or right; and (5) continuous for the statutory period. Under the
objective majority rule for mistaken boundaries, possession is hostile so long as the possessor intends to claim the land as
his own, even if he is unsure as to the location of the boundaries. If an adverse possessor has not been in possession for
the full statutory period, he may still meet the time period by tacking his possession onto possession by a previous adverse
possessor. Tacking is allowed if the adverse possessor and his predecessor are in privity of estate. Privity of estate requires
an intentional transfer of possession from one person to the next. Here, possession of the property was transferred from the
farmer to his son, so there is privity of estate. The son’s possession may be added to the period of the farmer’s possession,
and their combined 11 years exceeded the statutory limit.
A brother and sister negotiated the sale to the sister of a portion of a parcel of real property owned by the brother in fee simple.
Their oral agreement called for the brother to sell the eastern half of the parcel for $100,000. The brother’s assistant drafted the deed,
which the brother executed without noticing that the metes and bounds description in the deed represented the western half of the
property. The sister delivered a certified check for the entire purchase price and immediately recorded the deed, also without noticing
the discrepancy. The sister subsequently learned of the error in the description of the property in the deed and sought reformation of
the deed. In the meantime, the brother had decided that he wished to keep the eastern half and to sell the western half instead.
What is the brother’s strongest argument against the reformation of the deed?
The court will not reform a written instrument so as to convey an entirely different parcel of land.
Discussion of correct answer:In a majority of jurisdictions, the court would be able to reform the deed. However, a minority of
jurisdictions hold that reformation may be granted only to cut down (reduce) the parcel of land granted in the erroneous deed and
that additional or different property cannot be conveyed by the reformed deed. Although the correct answer to a multistate question
is generally based on the majority rule, not the minority rule, this is the brother’s strongest argument against reformation of the
deed.
Soon after moving to town, a socialite met a well-dressed gentleman at the public library who said that he was a real estate agent.After several weeks of viewing properties with the gentleman, the socialite chose a beautiful house. The gentleman presented thesocialite with various papers to sign that indicated the owner/seller of the property was a heart surgeon. The socialite paid cash for theproperty and received a warranty deed signed by the surgeon at the time of the closing. Several months after the socialite moved in,the real owners, two professors, returned from their sabbatical abroad. When confronted with irrefutable evidence that she had beenswindled, the socialite moved out.
Which of the following is the best course of action for the socialite?
A suit against the surgeon alone for breach of the warranties of title.
Discussion of correct answer:Once title passes, the buyer cannot assert any rights against the seller except by way of suit-based
potential contract defenses (e.g., fraud, mistake, etc.) or for breach of a covenant of title. In this case, the surgeon has certainly
breached the covenant of seisin (a covenant by the grantor that he owns and possesses the estate he purports to convey).
A landowner owned a parcel of land situated upon the top of a mountain. Located below the property was a 40-acre hillside estate
owned by a neighbor. Both properties were within the watershed of a non-navigable stream that originated at the top of the mountain
and ran all the way down into the valley below. When the neighbor purchased his property in 1976, he started taking water from the
stream and used it to irrigate the southern half of his property, which he used as a farm.
In 2005, the landowner built a home on his property and started taking water from the stream for domestic purposes. The next year,
there was a drought. As a result, the stream flowed at a very low level, and there was only enough water to irrigate the neighbor’s
farmland or, in the alternative, to supply all of the landowner’s domestic water needs and one-quarter of the neighbor’s irrigation
requirements. The mountain was located in a jurisdiction where the period of prescription was 15 years.
The neighbor brought an appropriate action to declare that his water rights to the stream were superior to those of the landowner. In
addition, the neighbor moved to have the full flow of the stream passed to him, notwithstanding the effect it might have on the
landowner.
If this state follows the doctrine of prior appropriation, judgment should be for whom?
The neighbor, because he put the water to a beneficial use prior to the landowner’s use and has
continuously used the water.
Discussion of correct answer:Under riparian water rights, domestic use is superior to and protected against commercial or
agricultural use. However, under the prior appropriation doctrine, which this jurisdiction follows, the first in time to put the water to
beneficial use gains the superior rights in the water.
A woman financed the purchase of her home with a mortgage loan from her credit union. The mortgage note provided that the
interest rate was variable, and could be adjusted once every 18 months. After occupying her home and making the payments for
several years, she obtained a second mortgage loan from a bank to build a garage. A year later, her credit union adjusted the interest
rate on her mortgage, increasing it by 0.5%. The bank claimed that the interest rate adjustment was a modification that allowed its
second mortgage to prevail over the credit union’s original mortgage, to the extent of the increase.
Does the bank’s second mortgage prevail over the credit union’s mortgage to the extent of the increase?
No, because the increased interest rate is not considered a prejudicial modification.
Discussion of correct answer:If a senior mortgage is modified, a junior mortgage prevails over the modification to the extent of the
change, if the modification materially prejudices the junior mortgagee. An example of a modification that would be regarded as a
material prejudice is a modification of a fixed interest rate. Here, however, the woman’s mortgage from the credit union provided
that the rate was adjustable. Therefore, the increased interest rate was not materially prejudicial to the bank.
A man owned a granite quarry that had a worldwide reputation for the quality of its stone. He had no offspring to take over when
he died. Wanting to ensure the continuation of the quarry as a family business, he asked his nephew to take over. The nephew
agreed. The man agreed to sell him the quarry for a nominal amount provided that the nephew agreed to language in the deed stating:
“To my nephew and his heirs and assigns, but if my nephew dies without issue, then to his cousin and her heirs and assigns.” At the
time that the man conveyed the quarry to his nephew, the nephew was single and had no children. Soon after the nephew took over
the quarry, a spring was discovered that produced high-quality water. The nephew ordered the immediate cessation of all quarrying of
granite in the area of the source of the spring. The portion of the quarry he closed down was the richest area of production. The
nephew began to bottle water to sell in local and regional markets. By the time his cousin learned of the spring water operation on the
property, granite production at the quarry had decreased by 30%.
If the cousin seeks to enjoin the nephew from continuing the water extraction and to obtain a judicial accounting, which of the following
is the most likely reason that a court might find in favor of the nephew?
The correct answer is:The nephew can extract spring water from the property because he holds a fee simple defeasible in the
quarry.
Discussion of correct answer:The nephew holds a fee simple subject to an executory interest (one of the three kinds of defeasible
fees) and may use the estate in the same manner as a person who holds a fee simple (that is, subject only to government power to
impose land use restrictions or to bring a condemnation action). The language “but if the nephew dies without issue, then to his
cousin and her heirs and assigns” is conditional language that limits the duration of the nephew’s present fee simple estate such
that it will automatically terminate if he dies without issue and title to the quarry will pass to the cousin. As owner of the present fee
simple estate, the nephew can remove spring water from the quarry without consulting his cousin, who holds a future interest in the
property.
A newlywed couple bought a house in a wooded area, and eventually had three children. The husband wanted to build a
treehouse for his kids and, after examining all the trees on the property, found the perfect spot. After taking rough measurements of
the tree and the branches where he wanted to build, he bought the supplies he would need and built the treehouse. His kids
decorated every inch of it, and played in it regularly for years. The couple decided they wanted to live in a neighborhood closer to their
children’s school, so they bought a new house. In their search for the new home, the husband was looking for a yard where he could
relocate the treehouse. Their new home had a tree he thought would be a perfect fit. He slowly and carefully removed the nails from
the treehouse and removed the walls board by board, and placed it all in the moving van. At the walk through the day before the
closing, the buyers noticed the treehouse was gone. They refused to close until the treehouse was put back in place, stating that they
had a right to it. The husband was dismayed and refused to reinstall it, claiming it had sentimental value, was personalized to his
family, and he had a right to take it with him.
Who is correct?
The correct answer is: The buyers, because the treehouse is a fixture.
Discussion of correct answer: A fixture is a chattel that is connected to real property in such a way that a disinterested observer
would consider it to be part of the property. A chattel will generally become a fixture if it is annexed to the property, has been
appropriated to the use of the land, and the annexor intended it to be a fixture. Determining if chattel meets these standards is a
subjective analysis, and one may look to the permanency of the manner in which the chattel is attached to the land, how difficult it
is to move, the extent to which it has been customized to the real property, and the use of the chattel as it relates to the land. When
property is sold, the deed will transfer the land and all items deemed to be fixtures. Here, the treehouse will be considered a fixture.
The treehouse is built into trees, which are permanently part of the land, and the treehouse is intended to be used by those who
inhabit the property. The husband clearly custom-designed the treehouse for that particular parcel of land and the trees on the land.
A disinterested observer would almost certainly consider the treehouse to be part of the land. Therefore, it is a fixture and will be
transferred to the buyers through the deed. Test tip: This question is using your emotions against you, so you will feel sorry for the
dad who just wanted to take the family tree house with him. It is clearly a fixture question. Try to think of a definite example of a
fixture such as a heating duct. This is similar, as the tree house was solidly affixed to the land and was meant to be used by those
living on the property.
