Property Flashcards
Fee Simple Absolute
Language: “To A and his heirs” or “To A”
Duration: Absolute ownership, of potentially infinite duration
Transferability: Devisable, descendible, alienable
Future Interest: None
Fee Tail
Language: “To A and the heirs of his body”
Duration: Lasts only as long as there are lineal blood descendants of grantee
Transferability: Passes automatically to grantee’s lineal descendants
Future Interest: Reversion (if held by grantor); Remainder (if held by 3rd party)
In IL: Creates a life estate, with remainder in grantee’s heirs
Defeasible Fees
1) Fee Simple Determinable
2) Fee Simple Subject to Condition Subsequent
3) Fee Simple Subject to an Executory Interest
Courts disfavor restrictions on alienability. So to create a defeasible fee, must use clear durational language.
No absolute restrains on transferability
Fee Simple Determinable
Language: “To A so long as…” or “until…” or “while…”
Duration: Potentially infinite, so long as event doesn’t occur
Transferability: Alienable, devisable, descendible, subject to condition
Future Interest: Possibility of Reverter (held by grantor)
Fee Simple Subject to Condition Subsequent
Language: “To A, but if X event happens, grantor reserves the right to reenter and retake”
Duration: Potentially infinite, so long as the condition is not breached and thereafter until holder of the right of entry timely exercises the power of termination
Transferability: Alienable, devisable, descendible, subject to condition
Future Interest: Right of Entry/Power of Termination (held by grantor)
Fee Simple Subject to Executory Interest
Language: “To A, but if X event occurs, then to B”
Duration: Potentially infinite, so long as stated contingency does not occur
Transferability: Alienable, devisable, descendible, subject to condition
Future Interest: Executory Interest (held by 3rd party)
Life Estate
Language: “To A for life” or “To A for the life of B”
Duration: Measured by life of transferee or by some other life (per autre vie)
Transferability: Alienable, devisable, and descendible if pure autre vie and measuring life is still alive
Future Interest: Reversion (if held by grantor); Remainder (if held by 3rd party)
Waste
Life Tenant is entitled to all ordinary uses and profits from the land
Must not harm the future interest holders
Types of Waste
1) Voluntary or Affirmative Waste
2) Permissive Waste, or Neglect
3) Ameliorative Waste
Voluntary Waste
Overt conduct that causes a drop in value (willful destruction)
Includes consumption of natural resources, unless PURGE
- PU: Prior Use
- R: Repairs
- G: Grant
- E: Exploitation
Permissive Waste
Allowing the land to fall into disrepair
- Must maintain the premises in reasonably good repair
- Must pay ordinary taxes
Ameliorative Waste
Must not engage in acts that enhance property value, unless future interest holders are a) known and b) consenting
Vested Remainder
Vested if: 1) created in an ascertained person and 2) not subject to any condition precedent
1) Indefeasibly Vested Remainder
- The holder is certain to acquire an estate in the future with no strings attached
2) Vested Remainder Subject to Complete Defeasance
- The holder’s right to possession could be cut short because of a condition subsequent
3) Vested Remainder Subject to Open
- A group of takers, where at least one is qualified to take
- Each classmember’s share is subject to partial dimunition because additional members can join
- Rule of Convenience: The class closes whenever any member can demand possession
Contingent Remainder
Contingent if either: a) created in an unascertained person or b) is subject to a condition precedent
Executory Interests
1) Shifting: Cuts short someone other than the Grantor
2) Springing: Cuts short the Grantor
Remainders vs. Executory Interests
1) Remainders accompany a preceding estate of fixed duration (e.g., a life estate or a term of years)
2) Remainders never follow a defeasible fee. Cannot cut short or divest a prior transferee
The Rule of Destructibility of Contingent Remainders
Rule: Contingent remainders destroyed if still contingent at the time the preceding estate ended
Today: Rule is abolished. If still contingent, grantor and heirs take subject to springing executory interest.
The Rule in Shelley’s Case
Rule: If conveyance says “To A for life, then, on A’s death, to A’s heirs” –> present and future interests merge. A gets a fee simple absolute.
Interpretation: Rule of Law. Applies even if contrary to Grantor’s intent.
Today: Rule is abolished. A would get a life estate, A’s unknown heirs have a contingent remainder, O has a reversion.
The Doctrine of Worthier Title
Rule: If O is still alive, tries to create a future interest in his heirs, the future interest is void.
- E.g., O, who is alive, conveys “To A for life, then to O’s heirs” –> Contingent remainder in O’s heirs is void, and O has a reversion.
Interpretation: Rule of Construction. Does not apply if contrary to Grantor’s intent.
Today: Rule is abolished in Illinois (but viable in other states). If abolished, O’s heirs have a contingent remainder.
Rule Against Perpetuities
Certain kinds of interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.
Step 1: Determine which future interests have been created by the conveyance. RAP only applies to contingent remainders, executory interests, and certain vested remainders subject to open
Step 2: Identify the conditions precedent to the vest of the suspect future interest
Step 3: Find a measuring life in being at the date of conveyance
Step 4: Will we know, with certainty, within 21 years of the death of our measuring life, if our future interest holders can take? If not, the future interest is void.
Bright Line Rules: 1) A gift to an open class that is conditioned on the members surviving beyond age 21 always violates the common law RAP.
2) An executory interest with no limit on the time within which it must vest always violates the RAP.
Fixing a RAP problem: Cross out the future interest. If that doesn’t work grammatically, the entire conditional clause is stricken.
Charity-to-Charity exception
“Wait and See” or “Second Look” Doctrine
The validity of any suspected future interest is determined on the basis of the facts as they exist at the end of the measuring life.
Uniform Statutory Rule Against Perpetuities
Codifies the common law RAP; also provides for an alternative 90-year vesting period
Cy Pres Doctrine
Adopted by the “Wait and See” and USRAP doctrines
Court may reform a conveyance to most closely match Grantor’s intent. Reduction of offensive age contingency is reduced to 21 years.
Joint Tenancy - Generally
Definition: Two or more own with the right of survivorship
Transferability: Alienable, but not divisible or descendible
Creation:
1) Four Unities – same time, same title, same interests, right to possess the whole
2) Grantor clearly expresses right of survivorship
3) Use of a straw (but not in IL)
Tenancy by the Entirety
Definition: Between married partners with a right of survivorship
Creation: Arises presumptively in any grant to married partners, unless stated otherwise
Protections/Restrictions:
1) Creditors of only 1 spouse can’t touch this
2) Neither tenant acting alone can defeat right of survivorship by unilateral transfer to 3rd party
Tenancy in Common
Definition: Two or more own with no right of survivorship. Each co-tenant owns an individual part, and each has a right to possess the whole.
Transferability: divisible, descendable, and alienable
Joint Tenancy - Severance
SPAM = Sale, Partition, And Mortgage
1) Sale
- JT can sell or transfer interest during lifetime
- Disrupts the 4 unities
- In equity, mere act of entering into a contract for sale severs (equitable conversion)
2) Partition
- By voluntary agreement
- In Kind (e.g., sprawling acreage)
- Forced Sale (e.g., a building)
3) Mortgage
- Lien Theory (IL): JT’s execution of a mortgage does not sever
- Title Theory: JT’s execution DOES sever
Rights and Duties of Co-Tenants
1) Possession: If co-tenant excludes another from possession in whole or part, Wrongful Ouster
2) Rent from 3rd parties: Co-tenant must account to others, providing them their fair share of the rent income
3) Carrying costs: Each co-tenant is responsible for his or her fair share of carrying costs (e.g., taxes or mortgage interest payments) based upon undivided share
4) Repairs: Repairing co-tenant enjoys a right to contribution for reasonable, necessary repairs provided she has told the other of their need. Contribution is based upon undivided share.
5) Waste: Must not commit waste
6) Partition: Right to bring an action for partition
- At partition, improving co-tenant is entitled to a credit equal to any increase in value she caused. Or bears liability for drop in value.
Non-rights
1) Rent from co-tenant in exclusive possession: No right, absent ouster
2) Adverse possession: No hostility, absent ouster
3) Contribution for Improvements
Tenancy for Years
Definition: A lease for a fixed period of time.
- If more than 1 year, must be in writing because of S/F
Termination: No notice is needed to terminate
Periodic Tenancy
Definition: A lease which continues for successive intervals. Until L or T give proper notice to terminate.
Creation: Expressly or by implication
- Land is leased with no mention of duration, but provision is made for payment of rent at set intervals
- An oral term of years in violation of the S/F, measured by the way rent is tendered
- If residential, if L elects to hold over a T, measured by the way rent is tendered
Termination:
- Usually written notice, at least equal to the length of the period itself. If year-to-year –> 60 days
- Parties can contractually agree to different notice provisions
Tenancy at Will
Definition: Tenancy for no fixed duration. Parties must expressly agree to a tenancy at will (otherwise it becomes an implied periodic tenancy)
Termination: By either party at any time, but a reasonable demand to vacate is usually needed
Tenancy at Sufferance
Definition: Created if T has wrongfully held over past the expiration of the lease. We give a leasehold estate so that L can collect rent.
Termination: Lasts until L either a) evicts T or b) elects to hold T to a new tenancy
Tenant’s Liability to Third Parties
1) T must keep premises in good repair.
2) T is liable for injuries sustained by 3rd parties that T invites.
Tenant’s Duty to Repair
If Lease is Silent: T must maintain the premises and make routine repairs, other than those due to ordinary wear and tear
- Must not commit waste
- Removal of fixtures (if objectively shows intent to permanently improve the realty)
If T expressly convenanted to maintain the property
- Common Law: T is liable for any loss to the property
- Majority View: T may end the lease when premises ??????
Tenant’s Duty to Pay Rent
1) If T breaches and is in possession
- L can either a) evict through the courts or b) continue the relationship and sue for rent
- Cannot engage in self-help
2) If T breaches and is out of possession (SIR)
- Surrender: L treats T’s abandonment as an implicit offer of surrender. Though if greater than 1 year remaining, S/F
- Ignore: Ignore the abandonment and hold T responsible for unpaid rent
- Re-let (IL Rule). Re-let the premises, and hold T liable for any deficiency.
Landlord’s Duty to Deliver Possession
Majority: L must put T in actual possession
IL: L must give T only legal possession
Landlord’s Implied Covenant of Quiet Enjoyment
Majority: Applies to both residential and commercial
IL: Only residential
Breach by actual wrongful conviction
Breach by constructive eviction (SING)
- Substantial Interference (includes acts by other tenants if nuisance or in common area)
- Notice
- Goodbye
Landlord’s Implied Warranty of Habitability
Applies only to residential leases, and non-waivable
Standard: Premises must be fit for basic dwelling.
If breached, T can:
- Move out and end the lease
- Repair and deduct
- Reduce rent
- Remain in possession, seek money damages
Assignments and Leases
- Presumed to be available for tenants
- L can prohibit without L’s prior written approval
- Once L consents, waives the right to object to future transfers by T unless L reserves the right
If an assignment: think about privities
If a sublease: privities don’t change
L’s Tort Liability
Common Law of Caveat Lessee: Let T beware, that’s all
Exceptions (CLAPS)
- Common areas (must maintain)
- Latent defects (must warn)
- Assumption of repairs (liable for negligent repairs)
- Public use rule
- Short term lease of furnished dwelling
Real Covenants
Definition: A promise to do or not do something related to land.
Creation: Writing signed by Grantor
Transferability of Burden:
- Writing
- Intent
- Touch & Concern
- Horizontal Privity (must be in succession of estate)
- Vertical Privity
- Notice
Transferability of Benefit
- Writing
- Intent
- Touch & Concern
- Vertical Privity
Remedy: Damages
Equitable Servitudes
Definition: A promise that equity will enforce against successors
Creation: Writing signed by grantor
Transferability:
- Writing
- Intent (to bind successors)
- Touch & Concern
- Notice
Remedy: Injunction
Defense of Changed Conditions: Must be so pervasive that the entire area has changed
Easements
Definition: The grant of a nonpossessory property interest that entitles the holder to some form of use or enjoyment or another’s land (the servient tenement)
Types: Affirmative and Negative (LASS)
Affirmative Creation (PING)
- Prescription
- Implication from prior use
- Necessity
- Grant
Negative Creation: In writing by Grantor
Easement Appurtenant: Benefits holder in physical use or enjoyment of his property. Transferred automatically with dominant tenement. Transferred automatically with servient tenement, unless BFP without notice.
Easement in Gross: Confers upon holder only some personal or pecuniary advantage that is not related to his use or enjoyment of his land. Not transferable unless for commercial purposes
Remedy: Injunction or Damages
Termination of an Easement
1) Estoppel
2) Necessity: Easements by necessity expire when the need disappears
3) Destruction of the Servient Land
4) Condemnation of the Servient Estate
5) Release
6) Abandonment
7) Merger Doctrine
8) Prescription
License
Definition: A mere privilege to enter another’s land for a delineated purpose. Not subject to S/F and freely revocable unless estoppel applies
Profit
Definition: Entitles the holder to enter servient land and take soil, or some substance of the soil, such as minerals, timber, oil, etc.
Shares all the rules of easements
General or Common Scheme Doctrine
An implied equitable servitude
Requirements
1) When the sales began, the subdivider had a general scheme of residential development, which included D’s lot
2) D had notice of the promise contained in the prior deeds (actual, inquiry, or record)
Adverse Possession
Definition: Possession for a statutorily prescribed period of time can, if certain elements are met, ripen into title.
Elements:
1) Continuous (20 years in IL)
2) Open and Notorious
3) Actual
4) Hostile
Tacking: Must be privity
S/F will not run against a true owner who is afflicted by a disability at the start of adverse possession
The Land Contract
Endures until closing
Requirements: in writing, signed by parties to be bound, describe the land, state some consideration
If amount of land is less than stated size: specific performance + pro rata reduction in price
Implied Promises:
1) To provide Marketable Title at the closing
- Look for adverse possession, encumbrances (servitudes/mortgages) and zoning violations
2) To not make any false statements of material fact
- Must disclose latent material defects
Does not include a warranty of fitness or habitability. Buyer beware!
Doctrine of Part Performance
If an oral land contract, can still be enforced if 2 of 3 conditions are met:
1) B takes possession
2) B pays all or part of the price
3) B makes substantial improvements
Risk of Loss After Land Contract
Equitable Conversion: Equity regards as done that which ought to be done
B owns the land after land contract is signed. B bears the risk of loss unless contract says otherwise.
IL: Seller bears risk of loss until closing
The Closing
Controlling document becomes the deed. Passes title from seller to buyer.
Requirements:
1) Lawful Execution
- In writing, signed by Grantor
- Description of land
2) Delivery
- Physical transfer
- Look for Grantor’s present intent to be bound
- Recipient’s express rejection defeats delivery
No new oral conditions, unless through delivery by escrow
Quitclaim Deed
Contains no covenants re: post-closing.
But note, Grantor did impliedly promise marketable title at closing, within the land contract.
General Warranty Deed
Warrants against all defects in title, including those due to Grantor’s predecessors
Includes the 3 present, and 3 future covenants
Special Warranty Deed
Contains two promises made only on behalf of Grantor
1) Has not conveyed land to anyone other than Grantee
2) Land is free from encumbrances made by Grantor
Present Covenants
1) Seisin: Grantor owns the estate
2) Right to Convey: Grantor has the power to transfer. No temporary restraints or disabilities
3) Against Encumbrances: There are no servitudes or mortgages on land
Future Covenants
1) Quiet Enjoyment: Grantee won’t be disturbed in possession by a 3rd party’s lawful claim of title
2) Warranty: Grantor will defend Grantee against lawful title claims brought by others
3) Further Assurances: Grantor will do what’s needed in the future to perfect the title
Bona Fide Purchaser
One who buys property for value and without notice that someone else got there first
Types of Notice
1) Actual
2) Inquiry: Buyer is on inquiry notice of whatever an exam of the property would show. If recorded instrument references unrecorded transaction, Buyer is on inquiry notice for whatever a reasonable follow-up would show
3) Record: B is on record notice once prior deed is recorded properly. Must be recorded within the chain of title.
Notice Statute
Illinois!
Last BFP to enter wins
Race-Notice Statute
To win, must be a BFP AND must win the race to record
Chain of Title
The sequence of recorded documents capable of giving record notice to later takers. Typically a Grantor/Grantee index
Shelter Rule
One who takes from a BFP prevails against any entity that the transferor-BFP would have prevailed against
Wild Deeds
If a deed, entered on the records (A to B) has a grantor unconnected to the chain of title (O to A), the deed is a wild deed. It is incapable of giving record notice of its existence.
Estoppel by Deed
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he later acquires that previously transferred interest
Mortgage
Definition: The conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a debt.
Debtor = Mortgagor; has title and the right to possess (until foreclosure)
Creditor = Mortgagee; has a lien
Typically must be in writing to satisfy S/F
Equitable Mortgage
If O gives creditor a deed that is absolute on its face in exchange for a sum of money, court will look to parol evidence. May create equitable mortgage
Transfers by Creditor-Mortgagee
Ways to Transfer:
1) Indorse the note and deliver it to the transferee (could become HDC); OR
2) Execute a separate document of assignment
To be an HDC: negotiable note, indorsed, delivered, in good faith without notice of illegality, in exchange for value
If HDC, can foreclose despite any personal defenses (e.g., lack of consideration, fraud in the inducement, unconscionability, waiver, estoppel, etc.)
Either way, subject to mortgagor’s real defenses:
- Material Alteration
- Duress
- Fraud in the Factum
- Capacity
- Illegality
- Infancy
- Insolvency
Transfers by Debtor-Mortgagor
Lien remains on the land, so long as the mortgage was properly recorded
Liability after transfer?
- If Buyer “assumes the mortgage,” B is primarily liable and O is secondarily liable
- If Buyer takes “subject to the mortgage,” O is personally liable, but mortgage may still be foreclosed to B’s detriment
Foreclosure
Judicial action to sell the land. Proceeds go to satisfy the debt.
Order of payouts
1) Attorney’s fees, foreclosure expenses, court costs
2) Accrued interest on foreclosing mortgagee’s lien
3) Foreclosing mortgage
4) Junior mortgages
5) Surplus goes to debtor
Deficiency actions to recover anything still owed
Senior mortgagees continue to hold a lien on property
How to determine priorities
Priority is determined by first-in-time (to record), first-in-right
Purchase Money Mortgagee = if recorded properly, gets first priority
Equitable Redemption
Any time prior to the foreclosure sale, debtor can try to redeem by paying off missed payments, plus interest and costs
Cannot be waived
Statutory Redemption
Statutory right to redeem after foreclosure (usually 6-12 months), by paying the sale price.
Lateral Support
If land is improved, and neighbor’s excavation causes cave-in –> negligence standard
If P can show that improved land would have collapsed even in natural state –> strict liability standard
Riparian Doctrine
Illinois!
Water belongs to those who own the land bordering the water course. Share the right of reasonable use of the water
Liability: if one unreasonably interferes with another’s use
Prior Appropriation Doctrine
Water belongs initially to the state, but the right to divert it and use it can be acquired by an individual.
Rights are determined by priority of beneficial use.
Groundwater
Surface owner is entitled to make reasonable use of ground water. Must not be wasteful
Surface Waters
Common enemy rule: A landowner can make changes to land to combat the flow
Zoning
Definition: Pursuant to its police powers, gov’t may enact statutes to reasonably control land use
Variance: Proponent must show 1) undue hardship and 2) that the variance won’t cause a drop in neighboring property values
