Property

Question 1

1) Larry, Mo, and Curly bought a parcel of timber land together as joint tenants with right of survivorship. Curly decided to sell his share to Shemp. What result?

A) Shemp is a joint tenant with Larry and Mo.
B) Larry, Mo, and Shemp are now tenants in common.
B) Curly’s action requires the entire parcel to be partitioned and sold, because each had an undivided interest in the whole.
D) Shemp is a tenant in common.

Answer 1

D) Shemp is a tenant in common.

After the conveyance, Shemp is a tenant in common with Larry and Mo, but with respect to each other, Larry and Mo are still joint tenants with right of survivorship.

Question 2

7) Tiffany has an undeveloped 2-acre lot bordering a lake, which passed to her in her aunt’s will in 1982. Her aunt kept the property strictly as an investment and never visited the property after its purchase. The neighbors had for years crossed over a small trail to the lake. Tiffany plans to build a vacation home on the lot. Matt, an avid boater, loves being out on the lake, but does not live on it. Back in 1969, he found a trail from the road to the lakefront across the parcel which now belongs to Tiffany. Matt uses the trail on Tiffany’s property daily to gain access to the lake. In fact, he used the parcel so much, that he expanded the path from the road to the lake so he could launch his boat. Which of the following is true?
A) Any easement Matt has does not apply to Tiffany, only her aunt.
B) Tiffany may terminate the easement by blocking the path for 20 years.
C) Tiffany can request Matt pay her a reasonable price for using the path.
D) Tiffany can transfer the easement to her brother.

Answer 2

B) Tiffany may terminate the easement by blocking the path for 20 years.

An easement by prescription can be terminated by Tiffany, the owner of the servient estate, taking the land back by way of prescription. Tiffany can physically block the path for 20 years as a means of terminating Matt’s easement. All the CHO elements of prescription must be met.

Question 3

10) Edgar buys a lot from Carl, while Jane buys a neighboring lot from Marc. Jane has no access to any roads from her lot. Can Jane use the road on Edgar’s lot to get to the main road?
A) Yes, because she has an easement by necessity.
B) Yes, because she has an easement by implication.
C) No, because there is no express easement.
D) No, because there was no express reservation.

Answer 3

C) No, because there is no express easement.

In order for Jane to have an easement, it must be expressly given by Edgar.

Question 4

18) Betsy and Ross were long-time neighbors. Betsy purchased her parcel of land from Mack in 1960, while Ross purchased his from Jack in 1962. Ross’s parcel was situated in front of Betsy’s and contained a one-story house. Both homeowners enjoyed a lovely view of the lake. In 1969 Betsy asked Ross to enter into a covenant that he, his heirs, and his assigns would never add another story to the home that would destroy Betsy’s view of the land. Ross agreed, and the covenant was put into writing and included with the deed. For the purpose of this question only, assume Ross sold his parcel to Gill in 2000. In 2004, Gill decides to build another story to his home. Will Betsy be able to enforce the covenant against Gill?
A) Yes, because there is vertical privity.
B) Yes, because there is horizontal privity.
C) No, because there is no vertical privity.
D) No, because there is no horizontal privity.

Answer 4

D) No, because there is no horizontal privity.

In this question we are looking to see if the burden of the covenant will run to Gill. Betsy will not be able to enforce the covenant against Gill because there is no horizontal privity between Gill and Betsy; Betsy has no interest in Gill’s land besides the covenant. If Betsy had sold the land originally to Ross and the covenant was made during that transaction, then horizontal privity would be met. But since this was a covenant made outside of a sale, horizontal privity does not run.

Question 5

21) The developer of the Sunnyside subdivision had a grand vision of a large residential neighborhood that was friendly to all types of families. She promised all new lot purchasers that the lots would be restricted to residential use only; however, nothing was ever put in writing. Jane bought lot number 45 in the subdivision. At the time of her purchase, the subdivision was surrounded by woods. Jane’s lot was a five acre corner lot that bordered the woods. Ten years later, the entire wooded area had been developed into more residential neighborhoods. Jane now plans to turn her lot into a small gas station and snack shop to serve the subdivision and neighboring communities, which have no nearby amenities. If Jane’s plans can be stopped, it would be by
A) A person in the neighboring community seeking to enforce an equitable servitude.
B) A person in the neighboring community seeking to enforce a real covenant.
C) Another resident of Sunnyside seeking to enforce a negative equitable servitude.
D) Another resident of Sunnyside seeking to enforce a real covenant.

Answer 5

C) Another resident of Sunnyside seeking to enforce a negative equitable servitude.

The facts do not state that the residential restriction was ever put into the deeds, or that it was even put into writing. Therefore, the best answer here is C, a negative servitude, which can be implied based upon a common scheme. The developer told each new lot owner of the scheme, so the requirement of notice is met.

Question 6

25) The zoning committee for the city of Brenton recently passed a regulation that no building in the town square can be taller than 4 stories. At present there is only one building, which is situated on the edge of the square that is over four stories tall. What can be said for the regulation?
A) The regulation is presumed to be invalid, until proven otherwise.
B) The regulation is presumed to be valid.
C) It is invalid spot zoning.
D) It is valid spot zoning.

Answer 6

B) The regulation is presumed to be valid.

A zoning regulation is presumed to be valid, as long as it is reasonably related to the police powers (health, public safety, morals, and the welfare) of the community.

Question 7

29) The Sanford Corporation purchased a large parcel of land next to a cattle ranch and built a large residential area for families. The flies and the smells of the ranch are beginning to disrupt the use and enjoyment of the community areas. Which of the following is the best answer?
A) This is private nuisance, so any one of the community members can bring suit.
B) This is a public nuisance, so any person, regardless of whether they own land in the development or not, can bring suit if they have special harm.
C) Since the cattle ranch was in existence first, nothing can be done.
D) The cattle ranch will have no defenses to the nuisance it is causing.

Answer 7

B) This is a public nuisance, so any person, regardless of whether they own land in the development or not, can bring suit if they have special harm.

This situation describes a public nuisance since the use and enjoyment of public areas are being harmed. Any person who can show the nuisance is of greater harm to her than to the general community will be able to bring a claim.

Question 8

30) Sarah Seller signed a purchase and sale agreement with Bobby Buyer to convey her home, lot number 123, block 29, addition 23H in Pleasantville, Queens County, Anystate. Bobby paid Sarah $5,000 in earnest money, which she accepted. Although the lot number typed into the document was 321, the rest of the information was correct. Before closing, Harry offered Sarah $75,000 more for the property than her contract with Bobby. She accepted. The legal consequence is that
A) Return of the earnest money to Bobby is the only relief available.
B) Bobby is not entitled to return of the money because he did not ensure the contract contained a valid legal description of the property.
C) Bobby may have relief if the address was a “typo” despite the legal description rule.
D) Harry has committed fraud by purchasing property already contracted to another buyer.

Answer 8

C) Bobby may have relief if the address was a “typo” despite the legal description rule.

Note that the contract is unenforceable as it exists, because it does not contain a street address or a valid legal description of the property. However, Bobby may seek to have the contract reformed due to the scrivener’s error.

Question 9

34) Desmond sold his home to Sydney for $275,000. In the purchase and sale agreement, the house was described by its street address, Desmond was listed as the seller and Sydney as the buyer, the sales price was listed, and it was signed by Desmond. What’s the possible problem with enforcing this contract?
A) The house description was not adequate for a valid contract.
B) The parties were not identified with enough accuracy.
C) The contract was not signed by Sydney, the buyer.
D) The contract was not notarized.

Answer 9

C) The contract was not signed by Sydney, the buyer.

According to the Statute of Frauds, a contract for land must be in writing and signed by the party to be charged. This means that each party must sign the contract for the other party to enforce it. Here the seller has signed, so the buyer can enforce the contract. But if the buyer refuses to close, the agreement may not be enforceable since the buyer did not sign.

Question 10

40) Bob and Lois purchased a home from Al and Linda that had been their personal residence for four years. Six months later, a pipe in a wall burst and flooded the entire basement, damaging the rest of the structure and destroying Bob and Lois’ furniture. Upon inspection of the plumbing inside the walls, they discover the entire house was originally plumbed improperly and all of the walls must be opened up to replace all the pipes throughout the house. Bob and Lois sue Al and Linda. What results?
A) Bob and Lois will prevail under implied warranty of habitability.
B) Al and Linda are liable because they failed to disclose the defective plumbing.
C) Al and Linda are liable under express warranty theory.
D) Bob and Lois have no recourse against Al and Linda under these facts.

Answer 10

D) Bob and Lois have no recourse against Al and Linda under these facts.

P has no recourse because the implied warranty of habitability only applies to new homes.

Question 11

54) Roberta Renter rented a two-bedroom apartment from Larry Landlord. The contract states that the lease was for 12 months, with rent due the first of each month. It had no provisions for extending the lease beyond the 12 months. Roberta did not provide notice as she approached the end of that year. At the end of 12 months, she remained in the apartment. Larry wants her to leave, but she submitted a monthly rent check for the same amount as each of the previous 12 months on the first day of the 13th month. Which is Larry’s least desirable course of action?
A) Cash the check.
B) Begin unlawful detainer action.
C) Sue for trespass because Roberta’s right of possession expired even though she did not provide 30 days notice.
D) Pay a moving company to move Roberta’s belongings to storage while she is at work.

Answer 11

D) Pay a moving company to move Roberta’s belongings to storage while she is at work.

Private evictions without court orders are prohibited by statute in most jurisdictions.

Question 12

56) Larry Landlord rented a furnished apartment to Terrance Tenant in a term lease for 24 months, with rent payable the first of each month. After three months, the rent stopped coming. Larry sent notice to Terrance of the late rent, and after one week of no response, entered the apartment only to find Terrance and all the apartment’s furnishings gone. Larry immediately filed a lawsuit seeking 21 months of rent plus the value of all the missing property. On his court date a year later, the apartment was still vacant because Larry wanted to await the outcome of the suit before re-renting the space. What is the court most likely to decide?
A) Larry is entitled to no recovery due to Terrance’s theft of the furnishings.
B) Larry is entitled to 21 months of rent.
C) Larry is entitled to some damages, but less than 21 months.
D) Larry is entitled to 9 months of rent.

Answer 12

C) Larry is entitled to some damages, but less than 21 months.

Larry has a responsibility to mitigate damages. Therefore he is entitled to the amount remaining on the lease (21 months) minus the amount for which he could have reasonably re-rented the apartment.

Question 13

59) Libby Landlord entered into a lease with Tara Tenant for 2,000 square feet of space to be used as a law office.  The lease stated that unapproved lease assignments were prohibited and that the rent was $1,200 a month.  Tara took possession and began making payments on the 1st of each month. Which best describes the lease?
A) This is a periodic tenancy. 
B) This is a tenancy at will. 
C) This is a term tenancy.  
D) This is a tenancy at sufferance.

Answer 13

A) This is a periodic tenancy.

This is a periodic tenancy, month-to-month, established by the payment of rent.

Question 14

61) Mother conveys her summer home “to Daughter, but if she does not graduate from law school and pass the bar exam at the first sitting, then the property goes to Son.” Which of the following is correct:
A) Daughter has a fee simple subject to a condition subsequent and Mother has a right of entry.
B) Daughter has a fee simple subject to a condition subsequent and Son has a right of entry.
C) Daughter has a fee simple subject to an executory interest and Son has a future executory interest.
D) Daughter and Son’s interests are merged giving Daughter a fee simple absolute.

Answer 14

C) Daughter has a fee simple subject to an executory interest and Son has a future executory interest.

Because the future interest is in a third party and not the grantor, the future interest is an executory interest. Therefore, Daughter has a fee simple subject to an executory interest and Son has a future executory interest.

Question 15

65) Oscar owned Blackacre in fee simple absolute. He conveyed it “to Able, but if anyone uses alcohol on the premises, then to Bob and his heirs.”
A) Able has a fee simple determinable because of the “but if” language.
B) Able has a fee simple subject to a condition subsequent due to the “but if” language.
C) Able has a fee simple subject to an executory limitation.
D) Bob has a right of reverter.

Answer 15

C) Able has a fee simple subject to an executory limitation.

This is a fee simple subject to an executory limitation with a shifting executory interest in fee simple to Bob.

Question 16

67) Terry Tycoon wants to keep his vast plantation in his family for several generations in the future, so he conveys it “to my son, Timmy, and to his heirs.” The effect of this transfer is to create
A) A fee tail, which limits transfers out of the family.
B) An interest in fee absolute.
C) A life estate interest in Timmy, since that is the default interest in most jurisdictions.
D) A fee simple determinable, which has the possibility of reverter if Timmy conveys to other than his heirs.

Answer 16

B) An interest in fee absolute.

This conveyance is an attempt to create a fee tail, which is abolished in most jurisdictions, therefore the interest defaults to a fee simple absolute.

Question 17

73) X conveys a small farm “to A for life, with the remainder to X’s heirs.” Which of the following is correct?
A) A has a life estate, X has a reversion in fee simple, and the heirs take nothing.
B) A has a life estate and X’s heirs have a vested remainder.
C) A has a life estate and X’s heirs have a contingent remainder.
D) A takes a fee simple.

Answer 17

A) A has a life estate, X has a reversion in fee simple, and the heirs take nothing.

A clearly has a life estate. Under the doctrine of worthier title, X cannot grant to his heirs that which they would receive by inheritance. The farm would be inheritable by X’s heirs, therefore X has a reversion in fee simple and the heirs take nothing.

Question 18

75) Grantor conveys “to Zane for life, remainder to Zane’s widow for her life, remainder to the children of Zane living at his widow’s death.” Which of the following is correct?
A) The remainder to the widow’s children is void.
B) The remainder to the widow’s children is valid because they are an open class.
C) The remainder to widow’s children is valid because the Rule Against Perpetuities has been abolished in most jurisdictions.
D) The remainder to widow’s children is valid under the Doctrine of Worthier Title.

Answer 18

A) The remainder to the widow’s children is void.

The remainder to the children is void because they must survive the widow, who might be unborn at the date of transfer. The RAP assumes that Zane could remarry a woman who is not a life in being at the time the interest is created.

Question 19

81) In which of the following situations does a joint tenancy exist?
A) Marla conveys her property to her son, Bob, as a joint tenant with her.
B) Marla conveys her property to her three children, with 1/4 share going to Joan, 1/4 share to Bob, and 1/2 to Garth.
C) Marla conveys her property to her three children. Because the children do not get along, Marla dictates that Joan shall possess and occupy the southern 1/3 portion of the land, Garth the northern 1/3, and Bob the central 1/3.
D) Bob, Garth, and Joan own Brownacre as joint tenants. Joan dies, devising all of her property to Mark.

Answer 19

D) Bob, Garth, and Joan own Brownacre as joint tenants. Joan dies, devising all of her property to Mark.

An interest in a joint tenancy cannot be devised by will. When Joan died, Bob and Garth continued as joint tenants with one another. The other answers are incorrect because a joint tenancy is created only when all of the tenants have the same four PITS unities of possession, interest, time, and source of title.

Question 20

82) Torel Tenant writes a letter to Lorrie Landlord telling her that he is unhappy in Lorrie’s apartment house and wants to get out of his lease. Landlord writes back telling Torel that she will treat the lease as terminated. A few days later, Torel receives a bill in the mail for the rent due for the remainder of the lease term. Which of the following is correct?
A) Torel need not pay rent because Landlord’s letter constituted an acceptance of Torel’s surrender.
B) Torel must still pay rent because Landlord did not expressly waive this obligation in her acceptance letter.
C) Torel must still pay rent because Landlord’s letter was not an acceptable acceptance of Torel’s surrender.
D) Torel must still pay rent because a surrender does not terminate a tenant’s duty to pay rent.

Answer 20

A) Torel need not pay rent because Landlord’s letter constituted an acceptance of Torel’s surrender.

A tenant is relieved of his duty to pay rent if the landlord accepts the tenant’s offer of surrender. Here, the letters constituted effective termination and acceptance of the surrender, relieving Torel of the obligation to pay rent.

Question 21

88) Neighbors Barney and Melvin exchanged formal written covenants to use their lots only for residential purposes. Melvin later sold his lot to George who planned to build a bowling alley on his lot. What chance does Barney have to stop the bowling alley from being built?
A) No chance unless the bowling alley is prohibited by the local zoning ordinance.
B) Barney could enforce the restriction as an equitable servitude if George had notice of the restriction.
C) Barney could not enforce the restriction because there was no horizontal privity of estate between Barney and Melvin.
D) Barney could not enforce the restriction because it does not touch and concern the land.

Answer 21

B) Barney could enforce the restriction as an equitable servitude if George had notice of the restriction.

A covenant may be enforced as an equitable servitude against a purchaser who had notice of the restriction

Question 22

89) In states which recognize tenancy by the entirety:
A) Neither spouse can convey his/her interest without the other’s consent.
B) The right of survivorship cannot be broken during the marriage.
C) Either spouse may sever the tenancy.
D) The tenancy may be severed by either spouse’s creditors.

Answer 22

A) Neither spouse can convey his/her interest without the other’s consent.

Neither spouse may transfer his/her interest in or sever the tenancy by the entirety without the other’s consent.

Question 23

91) Annabelle dies, leaving her estate “to Carter and his heirs, but if Carter should not graduate from law school, to Belle and her heirs.” What interest does Carter have?
A) Fee simple absolute.
B) Fee simple subject to a condition subsequent.
C) Fee simple determinable.
D) Fee simple subject to an executory interest.

Answer 23

D) Fee simple subject to an executory interest.

This is a fee simple subject to an executory interest because there is a condition subsequent to Carter’s interest and the future interest is held by a third party.

Question 24

93) In order for a covenant to run and be binding on the purchaser of the burdened land:
A) The covenant must be intended to run with the land.
B) The covenant must be stated in a deed.
C) There must be a common plan or scheme of development.
D) All of the above.

Answer 24

A) The covenant must be intended to run with the land.

In order to bind a subsequent purchaser, there must have been an intent to bind successors in interest.

Question 25

99) George and Georgia Generous gave their farm Parkacre to the City of Pleasantville with a warranty deed. The conveyance language in the deed stated, “George and Georgia Generous hereby grant Parkacre to Pleasantville for the purpose of constructing a park thereon.” Pleasantville did not need another park and after a few years sold it to Dorothy Developer who proceeded to build a strip mall on the property. Which of the following is true?
A) Upon selling the property to Dorothy Developer, the property reverted to the Generouses.
B) The gift to the City created a fee simple determinable and an automatic possibility of reverter in the Generouses.
C) Dorothy Developer took Parkacre as a fee simple absolute.
D) The gift to the city created a fee simple determinable and a right of re-entry in the Generouses.

Answer 25

C) Dorothy Developer took Parkacre as a fee simple absolute.

Dorothy Developer took Parkacre as a fee simple absolute because her grantor, the city, had a fee simple absolute. The indication that the grantor would like the land to be used as a park was only an expression of a wish or motivation without a future interest.

Question 26

100) Owen owned Greenacres in fee simple. He conveyed it “to Alma, but if Baker is living thirty years from the date of this deed, then to Baker.” The limitation to Baker is
A) Invalid.
B) Valid, because Baker’s interest is a reversion.
C) Valid, because Baker’s interest will vest, if at all, within a life in being.
D) Valid, because Baker’s interest is vested subject to divestment.

Answer 26

C) Valid, because Baker’s interest will vest, if at all, within a life in being.

Baker has a potential shifting executory interest and is thus subject to the Rule Against Perpetuities. The interest is valid because it must vest within a life in being (Baker’s) plus twenty-one years. The interest will vest or fail during his lifetime.

Question 27

103) Johnny, a widower, is owner of Apple Seed Farms in fee simple. Johnny has one son, Jr., who is married. Jr. has one daughter, Dawn, who is married but has no children. Dawn has requested for tax purposes that she be skipped over in any disposition of Apple Seed Farms. Johnny then makes the following conveyance, “To Jr. for life, then to Dawn’s children in fee simple.” What interest, if any, was created in Dawn’s unborn children?
A) springing use.
B) A vested remainder subject to divestment (open).
C) A contingent remainder.
D) None.

Answer 27

C) A contingent remainder.

The unborn children have a contingent remainder in the farm. A contingent remainder is either subject to a condition precedent or is made in favor of an unascertainable person.

Question 28

104) Marcus, a very sick elderly man, made the following conveyance before his death. "To my son, I give my little red Corvette, so long as he does not get a speeding ticket.  If he does, then to my grandson, Spike."  What interest, if any, does Spike have?
A) A shifting executory interest.
B) A springing executory interest.
C) A vested remainder.
D) A contingent remainder.

Answer 28

A) A shifting executory interest.

Spike has a shifting executory interest because upon the occurrence of the specified event, a speeding ticket, Son’s interest in the car will be forfeited in favor of Spike.

Question 29

105) Thelma’s will devised all her property “to Aiden for life, remainder to Beth’s children.” At the time of Thelma’s death, she was survived by Aiden, Beth, and Beth’s children, Claire and Donna. The interest to Beth’s children, including those not yet born, can best be characterized as follows:
A) Claire and Donna have vested remainders, unborn children have executory interests.
B) Claire and Donna have vested remainders subject to condition subsequent; the unborn children have contingent remainders.
C) Claire and Donna have vested remainders subject to open; the unborn children have contingent remainders.
D) Claire and Donna have contingent remainders; the unborn children have executory interests.

Answer 29

C) Claire and Donna have vested remainders subject to open; the unborn children have contingent remainders.

Claire and Donna have vested remainders subject to open because they are ascertainable, there is no condition on their grant, and the devise is subject to open because there are possible other remainder takers to come. The unborn children have contingent remainders because they are unascertainable at Thelma’s death.

Question 30

107) In a validly executed will, Skipper devised his 10 acre parcel of land on a small island, Islandacre, “to Gilligan for life, remainder to Gilligan’s children alive at his death, their heirs and assigns, so long as the land is used for residential purposes.” At Skipper’s death, he was survived by: his daughter Skipette, Gilligan, Gilligan’s son Skip, and Gilligan’s illegitimate daughter Ginger. Three years later, Skipette sold “all my interest in Islandacre” to Ginger. The next year Gilligan died, leaving all his property to Ginger. This jurisdiction does not follow the merger doctrine, nor the Rule in Shelley’s case. If, shortly after Gilligan’s death, Skip sold Islandacre to the Professor who immediately began building a university, who has title to Islandacre?
A) The Professor, because the restriction upon the use of Islandacre is an unreasonable restraint upon alienation.
B) Ginger, because the devise from Skippette gave her a fee simple.
C) Ginger, because the Professor ceased using Islandacre for residential purposes.
D) Skippette, because the interest to Gilligan’s children was void under the Rule Against Perpetuities.

Answer 30

C) Ginger, because the Professor ceased using Islandacre for residential purposes.

The sale of Skippette’s interest to Ginger passed the possibility of reverter Skippette owned as an heir of Skipper. When Islandacre was no longer used for residential purposes, the original interest given by Skipper was forfeited and the property reverted to Ginger via the purchase of Skippette’s interest.

Question 31

108) Batguy devised his Cave “to Kit Woman, her heirs and assigns, so long as they fight injustice, then to Bobin, his heirs and assigns.” Which best describes the various interests created?
A) Kit Woman has a fee simple determinable, Bobin has no interest, and Batguy’s heirs have a possibility of reverter.
B) Kit Woman has no interest, Bobin has no interest, and Batguy’s heirs have a fee simple.
C) Kit Woman has a fee simple determinable and Bobin has a contingent remainder.
D) Kit Woman has a fee simple determinable and Bobin has a vested executory interest.

Answer 31

A) Kit Woman has a fee simple determinable, Bobin has no interest, and Batguy’s heirs have a possibility of reverter.

The future gift to Bobin is void under the RAP because the heirs may stop fighting injustice long after a life in being plus 21 years.

Question 32

112) A condition in a contract for the purchase of real property that makes the purchaser’s obligation dependent upon his obtaining a given dollar amount of conventional mortgage financing
A) Can be satisfied by the seller if the seller offers the buyer a demand loan for the amount.
B) Is a condition subsequent.
C) Is implied as a matter of law.
D) Requires the purchaser to use reasonable efforts to obtain the financing.

Answer 32

D) Requires the purchaser to use reasonable efforts to obtain the financing.

A usual condition in a purchase and sale or earnest money receipt and agreement is that the buyer obtains satisfactory financing. The purchaser must use reasonable efforts to obtain the financing.

Question 33

113) Park purchased Marshall’s department store property. At the closing, Park delivered a certified check for the balance due and Marshall gave Park a warranty deed with full covenants to the property. The deed
A) Must be recorded to be valid between the parties.
B) Must recite the actual consideration given by Park.
C) Must be in writing and contain the signature of both parties duly witnessed.
D) Usually represents an exclusive integration of the duties of the seller.

Answer 33

D) Usually represents an exclusive integration of the duties of the seller.

A full warranty deed usually represents the final integrated agreement and the parol evidence rule would prohibit the introduction of prior or contemporaneous agreements that contradict the deed.

Question 34

114) Fulcrum Enterprises, Inc., contracted to purchase a four-acre tract of land from Devlin as a site for its proposed factory. The contract of sale is silent on the type of deed to be received by Fulcrum and does not contain any title exceptions. The title search abstract revealed that there are 51 zoning laws which affect Fulcrum’s use of the land and that back taxes are due. A survey revealed a stone wall encroaching upon a portion of the land Devlin is purporting to convey. A survey made 23 years ago also had revealed the encroachment. Regarding the rights and duties of Fulcrum, which of the following is correct?
A) Fulcrum is entitled to a warranty deed with full covenants from Devlin at the closing.
B) The existence of the zoning laws above will permit Fulcrum to avoid the contract.
C) Fulcrum must take the land subject to the back taxes.
D) The stone wall results in a potential breach of the implied warranty of marketability.

Answer 34

D) The stone wall results in a potential breach of the implied warranty of marketability.

The grantor implicitly warrants the property to be free of unusual encumbrances not specified in the deed.

Question 35

116) Gilgo has entered into a contract for the purchase of land from the Wicklow Land Company. A title search reveals certain defects in the title to the land to be conveyed by Wicklow. Wicklow has demanded that Gilgo accept the deed and pay the balance of the purchase price. Furthermore, Wicklow has informed Gilgo that unless Gilgo proceeds with the closing, Wicklow will hold Gilgo liable for breach of contract. Wicklow has pointed out to Gilgo that the contract says nothing about defects and that he must take the property “as is.” Which of the following is correct?
A) Gilgo can rely on the implied warranty of merchantability.
B) Wicklow is right in that if there is no express warranty against title defects, none exists.
C) Gilgo will prevail because he is entitled to a perfect title from Wicklow.
D) Gilgo will win if the title is not marketable.

Answer 35

D) Gilgo will win if the title is not marketable.

The seller must provide a marketable title free from encumbrances which might lead to litigation unless the purchase and sale agreement (or earnest money receipt and agreement) state to the contrary.

Question 36

118) Fosdick’s land adjoins Tracy’s land and Tracy has been using a trail across Fosdick’s land for a number of years. The trail is the shortest route to a roadway which leads into town. Tracy is asserting a right to continue to use the trail despite Fosdick’s objections. To establish an easement by prescription, Tracy must show
A) Implied consent by Fosdick.
B) Continuous use of the trail for the applicable statutory period.
C) Use of the trail with an intent to assert ownership to the underlying land.
D) Prompt recordation of the easement upon its coming into existence.

Answer 36

B) Continuous use of the trail for the applicable statutory period.

The statute in the jurisdiction dictates the necessary easement period which is often 20 years.

Question 37

119) Smith purchased a tract of land. To protect himself, he ordered title insurance from Valor Title Insurance Company. The policy was the usual type issued by title companies. Accordingly
A) Valor will not be permitted to take exceptions to its coverage if it agreed to prepare and insure the title abstract.
B) The title policy is assignable in the event Smith subsequently sells the property.
C) The title policy provides protection against any defects in title.
D) Valor will be liable for any defects in the abstract of the chain of title which arises, even though the defect could not have been discovered through the exercise of reasonable care.

Answer 37

D) Valor will be liable for any defects in the abstract of the chain of title which arises, even though the defect could not have been discovered through the exercise of reasonable care.

The purpose of title insurance is the buyer’s protection against any chain of title defects not specified as exceptions in the policy.

Question 38

122) Moch sold her farm to Watkins and took back a purchase money mortgage on the farm. Moch failed to record the mortgage. Moch’s mortgage will be valid against all of the following parties except
A) The heirs or estate of Watkins.
B) A subsequent mortgagee who took a second mortgage since he had heard there was a prior mortgage and failed to record it.
C) A subsequent bona fide purchaser from Watkins.
D) A friend of Watkins to whom the farm was given as a gift and who took without knowledge of the mortgage.

Answer 38

C) A subsequent bona fide purchaser from Watkins.

The basic rule is that a subsequent bona fide purchaser without notice takes free and clear.

Question 39

125) Tremont Enterprises, Inc. needed some additional working capital to develop a new product line. It decided to obtain intermediate term financing by giving a second mortgage on its plant and warehouse. Which of the following is true with respect to the mortgages?
A) If Tremont defaults on both mortgages and a bankruptcy proceeding is initiated, the second mortgagee has the status of general creditor.
B) If the second mortgagee proceeds to foreclose on its mortgage and the buyer takes free and clear title, the first mortgagee must be satisfied completely before the second mortgagee is entitled to repayment.
C) Default on payment to the second mortgagee will constitute default on the first mortgage.
D) Tremont cannot prepay the second mortgage prior to its maturity without the consent of the first mortgagee

Answer 39

B) If the second mortgagee proceeds to foreclose on its mortgage and the buyer takes free and clear title, the first mortgagee must be satisfied completely before the second mortgagee is entitled to repayment.

If the buyer at the foreclosure sale takes free and clear title, the sale proceeds are to be applied to the first mortgage with any excess going to the second mortgage.

Question 40

130) Wilmont owned a tract of waterfront property on Big Lake. During Wilmont’s ownership of the land, several frame bungalows were placed on the land by tenants who rented the land from Wilmont. In addition to paying rent, the tenants paid for the maintenance and insurance of the bungalows, repaired, altered, and sold them, without permission or hindrance from Wilmont. The bungalows rested on surface cinderblock and were not bolted to the ground. The buildings could be removed without injury to either the buildings or the land. Wilmont sold the land to Marsh. The deed to Marsh recited that Wilmont sold the land, with buildings thereon, “subject to the rights of tenants, if any.” When the tenants attempted to remove the bungalows, Marsh claimed ownership of them. In deciding who owns the bungalows, which of the following is least significant?
A) The leasehold agreement itself, to the extent it manifested the intent of the parties.
B) The mode and degree of annexation of the buildings to the land.
C) The degree to which removal would cause injury to the buildings or the land.
D) The fact that the deed included a general clause relating to the buildings.

Answer 40

D) The fact that the deed included a general clause relating to the buildings.

The general clause in the deed is not very significant because it is ambiguous as to the ownership of the bungalows.

Question 41

132) Larry Landlord owned a strip mall which was located alongside a major highway. Terry Tenant rented the front unit in the strip mall for a pizza-to-go operation under a standard 25-year lease. Ten years into the lease, the state decided to expand the highway by adding two lanes. This required condemnation of the front half of Larry’s strip mall. The state notified Larry and Terry of the condemnation proceeding. Larry insisted that Terry move to an empty space in the rear of the strip mall. The judge in the condemnation proceeding determined that Terry’s leasehold was worth $75,000. The likely outcome is that Terry will
A) Be forced to move to the rear of the strip mall, but will receive $75,000 from the condemnation award.
B) Be liable for the balance of the lease term, but will receive a $75,000 credit based on anticipatory repudiation.
C) Receive $75,000 and have no obligation to Larry.
D) Receive nothing because the lease violates the Rule Against Perpetuities.

Answer 41

C) Receive $75,000 and have no obligation to Larry.

The lessee is entitled to a condemnation award for eminent domain from the state; the facts say this valuation is $75,000. In addition, the lease is terminated under both the theory of impossibility and the theory of merger since the state will own both the property’s leasehold and reversionary interest after the eminent domain proceedings.

Question 42

137) Adam conveyed Purpleacre to Bryan for $50,000 using a deed containing the warranties of title, authority, right to convey, and free of encumbrances. Bryan lived on the property for 10 years and then sold to Charlie by conveying a limited warranty deed, for which Charlie paid $60,000. Five years later, Charlie is evicted from Purpleacre by Daniel because he had a paramount title that predated Adam’s interest. If Charlie brings suit against Adam, the likely outcome is
A) For Charlie in an amount of $50,000.
B) For Charlie in an amount of $60,000.
C) For Adam because privity of estate does not exist between Charlie and Adam.
D) For Adam because the covenants which were breached do not run with the land.

Answer 42

D) For Adam because the covenants which were breached do not run with the land.

The covenants of title (seisin), authority, and right to convey are personal and therefore do not run with the land. If there was a breach, it became a personal chose in action upon Adam’s delivery of the deed to Bryan.

Question 43

139) On February 1, Frost bought a building from Elgin, Inc. for $250,000. To complete the purchase, Frost: (1) borrowed $200,000 from Independent Bank, (2) gave Independent a mortgage for that amount, (3) gave Elgin a second mortgage for $25,000, and (4) paid $25,000 in cash. Independent recorded its mortgage on February 2 and Elgin recorded its mortgage on March 12. The following transaction also took place: On March 1, Frost gave Scott a $20,000 mortgage on the building to secure a personal loan Scott had previously made to Frost. On March 10, Scott recorded this mortgage. On March 15, Scott learned about the Elgin mortgage. On June 1, Frost stopped making payments on all of the mortgages. On August 1, the mortgages were foreclosed. Frost, on that date, owed Independent $195,000, Elgin $24,000, and Scott $19,000. A judicial sale of the building resulted in proceeds of $220,000 after expenses were deducted. The above transactions took place in a race-notice jurisdiction. Frost may redeem the property before the judicial sale only if
A) There is a statutory right of redemption.
B) It is probable that the sale price will result in a deficiency.
C) All mortgages are paid in full.
D) All mortgagees are paid a penalty.

Answer 43

C) All mortgages are paid in full.

The mortgagor can usually redeem the property before the judicial sale by paying all mortgages in full.

Question 44

141) Mary Beth contracted to buy an older home on a small lot in Ferndale. The previous deed had an easement recorded in it that said, “MUC (Midwest Utility Company) has the right to string four high voltage utility wires across the property along the eastern 20 feet of the lot at a height of 30-50 feet above the ground.” Mary Beth visited the land and saw no wires there. She asked the sellers if they were aware of the easement, or if they knew of MUC plans to place the wires over the property. They had lived there for three years and knew nothing other than to have noticed the same wording in the deed when they took possession. What is the legal effect of that clause in the deed?
A) It has no legal effect because the easement has been abandoned.
B) It is binding on the current owners, but not upon her. Since it is their deed and not hers, the clause lacks “privity” with respect to her and the deed they will convey to her.
C) It is binding because as an easement appurtenant, it binds all subsequent owners.
D) It is binding because it is an easement in gross and binds all subsequent owners.

Answer 44

D) It is binding because it is an easement in gross and binds all subsequent owners.

This is an easement in gross, not appurtenant, and it is binding on the buyer when she closes the purchase.

Question 45

145) Alice and Barbara bought side-by-side 5-acre tracts in Greenacre, which both backed up to a greenbelt where the City intended to build a public park. Both owners wanted to build their homes on the rear of their property to avoid the noise from the front street and get a better view of the park. When they realized they both had the same plans, they decided a common driveway would save both of them money. They thus built a 15-foot wide asphalt driveway straddling their property line and each gave the other a cross-easement to use the 7 feet of their land. The document was recorded and for 15 years they both used the driveway. After five years of study, the City decided it did not have the money to build the park and sold the parkland to a developer. The developer then built a new road along the back border of the two properties owned by Alice and Barbara. Barbara decided to build a driveway from the new back road and informed Alice that she intended to terminate the cross-easement to the front road. If Alice refuses and Barbara brings suit to terminate, the likely outcome is for
A) Barbara, because the lack of necessity terminates the easements.
B) Alice, if she still wants to own the common driveway.
C) Alice, because a cross-easement is a partnership requiring both partners’ agreement to continue.
D) Barbara, because Alice cannot show an economic detriment if the easement is terminated.

Answer 45

B) Alice, if she still wants to own the common driveway.

An express easement created by grant may only be terminated by abandonment, merger, or an instrument releasing the easement.

Question 46

151) What is a major difference between covenants and equitable servitudes in both the majority and minority jurisdictions?
A) Privity rules are relaxed with equitable servitudes.
B) The Statute of Frauds need not be met with equitable servitudes.
C) The requirements for benefits and burdens to run with the land are relaxed with equitable servitudes.
D) None of the above.

Answer 46

A) Privity rules are relaxed with equitable servitudes.

Horizontal and vertical privity are not required for equitable servitudes.

Question 47

152) Magna Development purchased a large tract of desert land from Wherehouses, Inc. Magna decided to develop the area into a diversified neighborhood consisting of commercial areas, single family residences, and condominium units. The deeds from Magna expressly stated that “the grantee, heirs, and assigns” use was restricted to certain uses depending upon the location of the lot in the development and that they agreed to purchase all water from Magna Water Company. Magna developed about half the property and sold it to Mores Development. Mores, like Magna before it, operated the water company and all the units they sold contained the same covenants concerning use and water purchase. Nancy Next purchased a large house site in the development from Patty Prior who had purchased from Mores. Nancy’s house was alongside a river so she installed a pumping system and disconnected from Magna Water Company. Mores initially planned on bringing a suit against Nancy, but Mores and Nancy were able to resolve their dispute on the question of water source. But in the process of the dispute, Nancy became aware that starting a commercial marina on the river property would be quite profitable. She began to advertise for marina tenants who would rent the boat slips she intended to build. Mores learned of her plans and filed a lawsuit seeking a declaratory judgment and injunction that the marina violated the single family residence use which was required for her parcel. The court will likely find for
A) Mores, because the use covenant runs with the land.
B) Nancy, if the use restriction was not in writing.
C) Nancy, unless she had actual knowledge of the restriction.
D) Mores, if they reserved all commercial activity to themselves.

Answer 47

A) Mores, because the use covenant runs with the land.

This is the best answer because the covenant in question meets all of the requirements of at least a reciprocal negative servitude (and an equitable servitude if the use restriction was not in writing), including the requirement to “touch and concern” the land because it affects the value.

Question 48

155) Denise Developer wanted to build a regional shopping center in Newtown. Denise located a large farm in the area owned by Susan Seller that would be perfect for the development. They entered into a written agreement stating: “Susan hereby agrees to sell her 50 acre farm to Denise for $500,000 and promises to convey unrestricted and marketable title at the closing of escrow in not more than 90 days. If Denise does not receive legal title in not more than 90 days, this agreement becomes null and void.” Forty days later, Town Title Company issued their abstract of title covering Susan’s farm. It was then that Susan realized that the previous owner had conveyed an easement over the farm to the County government for construction of an electrical line for a proposed residential development. Upon investigation, it was determined that the development decided to purchase electricity from the adjoining county. Susan called Denise and explained the situation, but said she believed she could purchase the easement from the County since it was not being used. Forty days later, Denise called Susan to inquire about the negotiations with the County to purchase the easement. Susan reported that the negotiations were completed and that the County Executive had agreed to a price of $10,000 to reconvey the easement. The recommendation was to go to the County Council the next week. Denise stated, “Please try to get this closed ASAP.” Unfortunately, the County Council had a full docket of business at their next meeting and delayed action on the easement sale matter. It was finally passed by the Council, but it was only completed 95 days from the date of the original agreement entered into by Susan and Denise. The next day, Susan paid the $10,000 to the County and deposited a warranty deed into escrow for closing conveying marketable title to Denise. Denise then stated that Susan had breached the terms of the contract and she would not close. Susan filed a lawsuit against Denise alleging breach of contract and sought an order of specific performance. If the court issues the order requiring Denise to accept the property and pay the $500,000 to Susan, the best reason would be
A) Six days delay in the closing of the property transaction can never be deemed a total breach of contract.
B) Denise’s statement to Susan of “please try to get this closed as soon as possible” was a modification or waiver of the time is of the essence condition.
C) Denise would be operating inequitably if she is allowed to escape her contract responsibility because of a mere six day delay.
D) Time was not of the essence in the contract between Denise and Susan.

Answer 48

B) Denise’s statement to Susan of “please try to get this closed as soon as possible” was a modification or waiver of the time is of the essence condition.

The express time of the essence condition could be waived or converted to an accord since Denise led Susan to believe the condition was being modified. This alternative is reinforced by the fact that Susan paid $10,000 in reliance, expecting that the contract date for performance was extended.

Question 49

156) When Marty built his two story house, the residential zoning ordinance required concrete foundation walls of four inch thickness or greater. Over the 20 years since his house was built, the city has experienced several earthquakes and the zoning commission changed the requirements for concrete foundation walls to be six inches thick with steel rebar reinforcement and foundation “anchors.” Marty cannot afford the expense of retrofitting his house at this time. His best argument for keeping it the way it is
A) The ordinance is a “taking” under the Fifth Amendment.
B) He has a variance because his house was built to old code before the new changes took effect.
C) His non-compliance with the current ordinance is permitted because it is “spot zoning.”
D) He is allowed to keep his house as it is because of non-conforming use.

Answer 49

D) He is allowed to keep his house as it is because of non-conforming use.

Normally, unless the zoning changes state otherwise, non-conforming uses that were legal when built are “grandfathered” after the requirements become more restrictive.

Question 50

157) Tia owned a corner lot in the middle of an area zoned for residential use only. She wanted to open a “mom and pop” corner grocery and deli because she felt that the older residents in the neighborhood needed access to food shopping within a very short walking distance. Which answer most closely describes the procedure and action she must apply for?
A) A non-conforming use.
B) Spot zoning.
C) A variance.
D) Rezoning to allow commercial enterprises.

Answer 50

B) Spot zoning.

Spot zoning is the best answer because she is attempting to begin a use that is inconsistent with the current character of the surrounding area

Question 51

158) Ted owned a house that was located exactly 10 feet from his side property line.  This was in compliance with the city's old building codes, which required a minimum of 10 feet for buildings and five feet for porches and decks.  Ted was restricted to a wheelchair, and built an access ramp that was exactly five feet wide.  When he was finished, the edge of the ramp was five feet from the property line. Four years later, the city passed a new ordinance that required all structures, including decks and porches, to be 10 feet from the side property line.  Existing structures were grandfathered in.  However, if they needed repair or replacement, the new ordinance required compliance with the 10 foot restriction.  Ted's ramp was made of wood, and it was deteriorating after 15 years since its construction.  Which answer provides the appropriate form of relief if he is contemplating replacing the ramp?
A) Non-conforming use
B) Spot-zoning 
C) Variance.
D) Rezoning.

Answer 51

C) Variance.

A variance is an allowed deviation from a zoning restriction that will be granted to prevent unnecessary hardship when such a grant is not inconsistent with the general welfare and character of the neighborhood. The only argument against a variance in this instance is if the ordinance was passed for some purpose such as fire department accessibility, in which case, there must be a balancing between the owner’s needs and the needs of the community.

Question 52

164) Absentminded Albert owned Greenacre which contained an old rental house. He orally promised his favorite niece Deserving Diane that he would leave her the fee simple interest in Greenacre if she would study hard in her bar review course. She complied with his request and when she passed the bar, she drafted a new will for Uncle Albert which would convey Greenacre to her upon his death. All of the requirements of the Statute of Frauds were complied with in Albert’s will.||Four years later, Albert forgot about his agreement with Diane and decided to sell Greenacre. He signed a standard exclusive listing agreement with Bobbie Broker at a 7% commission rate. In the property listing agreement, Albert promised to convey a full statutory deed with “full warranties as to the house” if a buyer would agree to a full price of $100,000, payable at $500 a month. Albert’s next door neighbor Nathan knew nothing about the above facts, but had heard of the property listing from his barber who had called Bobbie Broker’s office in response to an advertisement in the local paper. Knowing Albert personally, he called him on the phone and inquired about the property. Albert sent him a copy of the purchase and sale agreement, but crossed out the portion containing the 7% commission payable to Bobbie Broker. Nathan and Albert both signed the purchase and sale agreement and hired Charlie Closer, a local attorney, to prepare the closing documents including the deed. The lawyer’s para-professional prepared a deed, but at Albert’s direction, it stated that the conveyance of the house was “as is, with all faults” rather than with “full warranties as to the house.” In addition, the para-professional mistyped $500 per month as $800 per month on the related promissory note. Unfortunately, Albert had a fatal stroke the morning of the day that he and Nathan were going to meet in Charlie Closer’s office to sign the deed and promissory note that would later be recorded. Diane claims she should get Greenacre according to Albert’s will and that it should not go to Nathan pursuant to the real estate transaction. The court decided against Diane and awarded Greenacre to Nathan. Nathan complained that the deed should be reformed to increase the warranties on the house from “as is, with all faults” to “full warranties as to the house.” Nathan also wants the court to reduce the note payment amount of $800 per month to $500 per month to reform the para-professional’s typing mistake. The disagreement as to terms is later satisfactorily resolved. Bobbie Broker demands that the estate pay her $7,000 to reflect the commission she believes is due her on the sale of Greenacre. The estate objects and in due course files an action seeking a declaratory judgment. In such an action, the best argument the estate can make to avoid paying the commission is that
A) The transfer occurred after Albert’s death so the commission agreement was terminated.
B) The listing agreement was not exclusive.
C) The purchaser was not procured by Bobbie Broker.
D) The final agreement transferring Greenacre contained numerous changes which were not contained in the original listing agreement.

Answer 52

B) The listing agreement was not exclusive.

This is the best argument because a broker exclusive agreement only means the property owner will not sign up with another broker. This may not create a liability for the commission if the owner sells the property elsewhere without the broker’s involvement.

Question 53

169) Albert Adam and Barbara Blake had lived together for ten years even though they were never officially married. The couple used the title “Mr. and Mrs. Adam” on a number of credit cards and retail store accounts. Albert decided to buy a house and the deed referred to “Albert Adam and Barbara Blake and their heirs.” The jurisdiction does not recognize common law marriages, but does recognize tenancy by the entirety. Both parties signed the mortgage and promissory note as husband and wife. The couple made payments individually for about a year. Albert then fell in love with Carol Comfortable and left Barbara and the house. If Barbara brings a lawsuit for partition of the property, the likely outcome is that the request should be
A) Granted because when Albert left Barbara for Carol, he severed the tenancy by the entirety.
B) Granted because the deed did not create a tenancy by the entirety.
C) Denied because Albert has absolute title to the home.
D) Denied because one tenant in a tenancy by the entirety does not have the unilateral right to partition.

Answer 53

B) Granted because the deed did not create a tenancy by the entirety.

Because the two tenants were not officially married, a tenancy by the entirety never existed. Rather the couple were tenants in common and either tenant in common can petition a court to partition the property.

Question 54

170) Albert owned Greyacre in fee simple. Brett conveyed a warranty deed to Chuck for the same property. Chuck immediately recorded the deed at the office of the County Recorder where Greyacre was located. Subsequently, Albert conveyed a warranty deed for Greyacre to Brett which was promptly recorded. Chuck then conveyed a quitclaim deed to Edward who paid full value for the property and had no knowledge of the interest of Brett. In a dispute between Edward and Brett for Greyacre, the likely outcome is for
A) Edward, because he paid full value for the property and had no knowledge of Brett’s interest.
B) Edward or Brett, depending upon whether a subsequent grantee is subordinate to the rule of estoppel by deed in the jurisdiction.
C) Edward or Brett, depending upon whether Brett’s deed is deemed to be recorded in Edward’s chain of title.
D) Brett, because his deed is superior to Edward’s.

Answer 54

C) Edward or Brett, depending upon whether Brett’s deed is deemed to be recorded in Edward’s chain of title.

The primary issue would be whether the first deed from Brett to Chuck is deemed to be in Edward’s chain of title. If it was, then Edward would have constructive notice of the prior interest and thus cannot qualify as a BFP to override the doctrine of estoppel by deed.

Question 55

171) Cassandra purchased a home from Hector that was one-year old.  Six months later, the wiring in one of the walls overheated.  This caused sparks and the home burned down.  The fire inspectors and insurance inspectors agreed that the cause was faulty wiring. What is Cassandra's best claim against the builder?
A) Breach of title warranty. 
B) Breach of express warranty. 
C) Breach of implied warranty. 
D) None of the above.

Answer 55

D) None of the above.

In this instance, there are no warranties.

Question 56

175) Alice owned in fee simple absolute Silveracre, a 500-acre tract of land that contained a substantial amount of silver which had been partially mined. Alice gave Betty Banker a first mortgage to secure the loan money necessary to reopen the silver mine. Betty immediately recorded the mortgage. Unfortunately, this loan did not yield enough money to open the mine and Alice found it necessary to take out a second mortgage with Caroline. The Caroline mortgage contained an express representation that there were no senior obligations against Silveracre. Caroline immediately recorded her mortgage. The silver mine did not produce the revenue that was expected and Alice stopped making both of her mortgage payments. Betty foreclosed on her first mortgage and named both Alice and Caroline party defendants in interest. At the foreclosure sale, Alice purchased the property, thereby extinguishing Betty Banker’s interest. Alice then conveyed Silveracre to Doris using a statutory warranty deed. Doris paid full value with no knowledge of the conveyances to Alice or Betty or the foreclosure sale. The jurisdiction has a race-notice recording statute. If Caroline sues to foreclose her mortgage and names Alice and Doris as party defendants in interest, the court will likely find for
A) Caroline because when Alice acquired Silveracre at the foreclosure sale, Caroline would acquire a first mortgage through the doctrine of estoppel by deed.
B) Alice because when she purchased Silveracre at the foreclosure sale, the rights of all junior creditors were extinguished.
C) Doris because she will gain title to Silveracre since she paid full value and had no knowledge of the prior interests.
D) Caroline because the terms of her conveyance contained an express representation of no senior obligations against Silveracre.

Answer 56

A) Caroline because when Alice acquired Silveracre at the foreclosure sale, Caroline would acquire a first mortgage through the doctrine of estoppel by deed.

The best answer because Caroline would prevail over the other parties under the doctrine of estoppel by deed. Alice - the original mortgager - reacquired Silveracre by purchasing the property at the foreclosure sale, she came into the full unencumbered title. However, her prior grant of a mortgage to Caroline would estop her from denying that liability.

Question 57

182) Fred the farmer owned a small pig farm in Grant County, which is in a lien theory state. He needed to build a new barn in which to house the pigs in the wintertime. In order to finance it, he took out a $100,000 mortgage using the farm property as security. The note required monthly payments to Bagley’s Bank. Two years later Fred, who could no longer farm due to age and failing health, sold the pig farm to Gregg. He conveyed the farm by a deed that stated “grantee expressly assumes the mortgage grantor previously made with Bagley’s Bank.” Gregg made payments for six months, then defaulted. Who is liable to Bagley Bank?
A) Fred, because he signed the original note.
B) Gregg, because he expressly assumed the mortgage.
C) Both Fred and Gregg.
D) Either Fred or Gregg.

Answer 57

C) Both Fred and Gregg.

Gregg is liable because he expressly assumed the loan. Fred is still liable because an express assumption does not release the original obligor; this would take a release from the mortgagee.

Question 58

183) Kaye contracted to sell Hodges a building for $300,000. The contract required Hodges to pay the entire amount at closing. Hodges put the $300,000 into escrow. Kaye changed her mind regarding the wisdom of selling the property at that price and refused to close the sale of the building. Hodges sued Kaye. To what relief is Hodges entitled?
A) Punitive damages and compensatory damages.
B) Specific performance and compensatory damages.
C) Consequential damages or punitive damages.
D) Compensatory damages or specific performance.

Answer 58

B) Specific performance and compensatory damages.

Since land is unique, the normal buyer remedy for seller’s breach is specific performance. Compensatory damages are also recoverable if Hodges suffered other provable damage.

Question 59

188) The boundary between Karl and Rachel residential lots was a 10-foot high concrete retaining wall. This was necessary because Karl’s property was immediately uphill on a very steep slope from Rachel. Karl recently moved to the land and built a very large house on the uphill lot. Rachel decided to landscape her back yard. After placing many thousands of dollars worth of plants in the yard, the concrete retaining wall looked more and more like an eyesore, so Rachel had her landscaper remove the wall. The shift in land caused portions of Karl’s large house to collapse. The deprivation of the lateral support would not have resulted in damage to the land if Karl’s new house were not so large. If Karl sues Rachel, the right/obligation involved in their dispute would be
A) For Rachel unless she had actual notice that Karl’s house would be damaged.
B) For Karl because his right of quiet enjoyment was breached.
C) For Karl because his lateral support right is absolute.
D) Against Rachel because she breached Karl’s subjacent support right.

Answer 59

C) For Karl because his lateral support right is absolute.

Removal of the retaining wall between adjacent properties by Rachel violated Karl’s lateral support rights and results in strict liability.

Question 60

190) Horace owned a small farm.  There was a stream that ran across his property.  He decided to dam the stream to make a small private trout-fishing pond.  Prior to his activity, there had never been any flooding problems.  However, since building his dam, whenever it rained, the diverted water spilled over into his neighbor Ignatio's yard, causing crop damage.  What is Ignatio's most likely action against Horace?
A) Violation of subjacent support.
B) Violation of lateral support.
C) Violation of riparian rights. 
D) Flood damages.

Answer 60

D) Flood damages.

Natural drainage patterns may be altered to control floods (dikes, diversions, etc.) under the “common enemy” doctrine as long as it does not create unnecessary damage to the land of another.

Question 61

191) Landlord rented a house to Buck pursuant to a one-year lease. After three months, Buck sent a letter to Landlord stating that he was going to move out immediately, and then vacated. Enclosed in the letter was a check covering the following month’s rent. Landlord made no attempt to re-rent the house and it remained vacant for the remainder of the lease. At the expiration of the lease, Landlord asserted a claim against Buck for unpaid rent from the date that Buck vacated the premises until the end of the lease term. In deciding landlord’s claim, the court should find for
A) Landlord, because Buck failed to pay the rent as agreed.
B) Landlord, because landlord had a right of re-entry.
C) Buck, because landlord had a right of re-entry.
D) Buck, because he essentially gave the landlord a month’s notice of his intent to vacate.

Answer 61

A) Landlord, because Buck failed to pay the rent as agreed.

Normally, a tenant who abandons property before the expiration of a lease is liable for the rent due for the remainder of the term. However, many states have statutes requiring the landlord to mitigate the damages, and attempt to re-rent the premises.

Question 62

195) Bob and Mark who both own fee simple absolute estates in adjoining parcels of land enter into a restrictive covenant. Sara later acquires Mark’s parcel. In which situation will there be vertical privity between Bob and Sara?
A) Mark transfers to Sara a leasehold estate.
B) Mark transfers to Sara a life estate.
C) Mark transfers to Sara a defeasible fee.
D) Mark transfers to Sara a fee simple absolute.

Answer 62

D) Mark transfers to Sara a fee simple

Vertical privity requires that the successor in interest takes for the same duration as the original owner. Answer D is the correct answer because Mark transferred his entire interest to Sara.

Question 63

198) Ted owned a large piece of land which he divided into two parcels, A and B. He retained A and sold B to Ben. In the deed, the parties mutually agreed that, “Owners of A and B and all of their heirs and assigns promise to maintain a paved road between the two pieces of property, sharing the expenses equally in its upkeep.” Over the next twenty years, several different people owned both parcels and the road fell into complete disrepair. David, the current owner of parcel A, wants to rebuild the road and wants the current owner of B, Jacob, to pay half of the expense. Jacob refuses. Can David successfully sue Jacob?
A) Yes, because the covenant ran with the land.
B) No, because the covenant was to maintain the road, but it was completely destroyed.
C) Yes, because the deed created an equitable servitude.
D) No, because the covenant was void under the Rule Against Perpetuities.

Answer 63

B) No, because the covenant was to maintain the road, but it was completely destroyed.

Real covenants and equitable servitudes terminate if abandoned; the facts say that the residents failed to carry out or enforce the restrictions. Here, failure of the residents to repair the road over a 20-year period likely constituted an abandonment.

Question 64

Easement

Answer 64

An easement is an assignable, non-possessory right to cross over or use another’s land. An easement is created by prescription, implication, necessity, expressly, or by estoppel.

Question 65

Prescriptive easement

Answer 65

A prescriptive easement must be continuous for the statutory period, hostile to the true owner’s interest, and the use must open and notorious sufficient for the owner to have actual or constructive notice.

Question 66

License

Answer 66

A license is a non-exclusive, non-assignable, permissive personal right to come onto another’s property.

Question 67

Profit a prendre

Answer 67

A profit a prendre is the right to go upon the land of another and take, extract, or sever some resource from the land. However, waste is not allowed and may result in an injunction against the holder of the profit. Overuse is similarly prohibited and may terminate the profit.

Question 68

Nuisance

Answer 68

A nuisance is a substantial interference with the use and enjoyment of another’s property.

Question 69

Covenant

Answer 69

A covenant is a promise in a deed burdening the “servient” tenement for the benefit of the dominant tenement. An enforceable covenant requires 1) compliance with the statute of frauds; 2) intention that the promise run with the land; 3) a matter that touches and concerns the land; and 4) vertical and horizontal privity. Damages are an available remedy for breach of a covenant.

Question 70

Equitable servitude

Answer 70

An equitable servitude is a promise enforced in equity against successors through injunctive relief. It requires 1) a writing; 2) an intention that the promise run with the land; 3) touches and concerns the land; and 4) the successor owner to have notice (actual, constructive, or inquiry) of the servitude.

Question 71

Zoning

Answer 71

Zoning is used to regulate property and control development. It is a quasi-judicial function, and requires that affected parties have notice and an opportunity to be heard. There must be an appearance of fairness in the decision making process. Judicial review requires standing, exhaustion of administrative remedies, ripeness, and a final determination by the zoning agency.

Question 72

Non-conforming use

Answer 72

A non-conforming property use that was legal when established but violates current zoning code is allowed to remain, so long as the nonconforming use is continuous from the time it was legal (allowed to be “grandfathered” in). The use cannot be substantially expanded or changed. If it is abandoned, the non-conforming use protection lapses forever.

Question 73

Warranty deed

Answer 73

A warranty deed contains the grantor’s covenant that they have title of seisin, authority and right to covey, free of encumbrance and marketable title, enjoyment and peaceful possession, and they will defend the buyer.

Question 74

Quitclaim

Answer 74

A quitclaim deed transfers all the ownership legal and equitable rights that grantor has in the property without any covenants or implied warranties.

Question 75

Race-Notice

Answer 75

The majority recording statute is race-notice and the first bona fide purchaser (BFP) who files the deed at the recording office prevails. A BFP must take for value, in good faith, and have no record or inquiry notice.

Question 76

Adverse possession

Answer 76

Adverse possession can ripen into title of record through quiet title action if the possession is exclusive, continuous for the statutory period, hostile to the true owner’s interest, and open and notorious such that the owner has actual or constructive notice of the adverse possession.

Question 77

Lease

Answer 77

A lease gives the tenant a nonfreehold possessory estate with the landlord retaining a reversionary interest at the end of the lease. It establishes a tenant’s right to use property for a period of time in exchange for rent.