Property

Question 1

3 Types of Concurrent Estates

Answer 1

Under NY law, there are three types of concurrent estates in land:

1. Tenancy in common,
2. Joint tenancy, and
3. Tenancy by the entirety.

Question 2

Tenancy in Common

Answer 2

Tenancy in common is an undivided interest in the entire estate with no right of survivorship.

Tenancy in common is the default estate created by a conveyance or bequest of real property, UNLESS (a) there is express language stating that the parties have a survivorship right, which creates a joint tenancy OR (b) if the conveyance of real property is to a husband and wife, which by default creates a tenancy by the entirety. To create a tenancy in common, the grantor need not use explicit language. Each tenant in common owns an undivided interest in the property and has the right to use and enjoy the entire property. There are no survivorship rights with a tenancy in common and upon the death of one tenant, the tenant’s interest passes through bequest or intestacy.

Question 3

Joint Tenancy

Answer 3

Joint tenancy is an undivided interest in the entire estate with a right of survivorship.

A joint tenancy is a form of ownership in real property where the property is conveyed to two or more persons with the right of survivorship. New York no longer requires a “straw man” to reconvey the property as a joint tenancy or tenancy by the entirety. A straw man is a person to whom a landowner would convey the property so that the straw man could then reconvey it to both parties. This was done to maintain the unities of title, time, interest and possession. Upon the death of one joint tenant, the survivor(s) owns the deceased person’s interest absolutely. A joint tenant cannot devise her share by will, so if she wants someone other than the co-tenant to have her share of the property she must sever the joint tenancy during her life, which converts it into a tenancy in common. Joint tenants can seek to partition the property (as can tenants in common). If the parties cannot agree on joint possession of the property or how to divide possession, a partition action is an appropriate alternative. The proceeds from the sale will be divided between the joint tenants.

Question 4

Tenancy by the Entirety

Answer 4

Tenancy by the entirety is an undivided interest in the entire estate, available only to married couples, with a right of survivorship. Neither party may dissolve the tenancy by the entirety without the other’s permission.

New York distinction: Under NY law, one tenant by the entirety can mortgage his or her interest without the other’s permission.

Question 5

Rights of Concurrent Tenants

Answer 5

Co-tenants have the following rights and obligations:

1. Right to possession,
2. Contribution for taxes, insurance, etc.,
3. Partition,
4. Waste: The cotenant is liable in waste to the other cotenants and must also share any profits,
5. Adverse possession,
6. Forfeiture.

Question 6

Adverse Possession (“OCEAN U”)

Answer 6

Under NY property law, a party acquires title by adverse possession where the possession is:

1. Open,
2. Continuous for a period of 10 years,
3. Exclusive,
4. Actual,
5. Notorious, AND
6. Under a good faith claim of right (Claimant believes that he or she owns the land)

A claim of right means a reasonable basis for the belief that the property belongs to the adverse possessor.

In addition, the party against whom adverse possession is claimed cannot be under a disability at the time adverse possession begins.

Question 7

Type of Easements

Answer 7

Under NY law, there are four types of easements:

1. Implied easements,
2. Easement by prescription,
3. Easement by necessity, and
4. Easement by grant.

Question 8

Implied Easements

Answer 8

Under NY law, where a person previously owned undivided land of which sold only part, the court may find an easement by implication based on the condition of the land before the sale if claimant proves that the land was:

1. Under common ownership,
2. The use was continuous (new use is same as prior use),
3. Apparent (anyone who inspected the land must note the prior use), AND
4. Is reasonably necessary to the dominant estate (there must be no reasonable alternative to continuing the use).

The elements must be established by clear and convincing evidence.

Question 9

Easement by Prescription

Answer 9

A prescriptive easement under the New York Real Property Law is created when the owner of the land fails to bring an action against the users for the period of the statute of limitations for real property actions, which is 10 years under the New York CPLR.

Under NY law, the court may find an easement by prescription, where the use was:

1. Continuous for a period of 10 years,
2. Open,
3. Notorious, AND
4. Adverse.

Question 10

Easement by Necessity

Answer 10

In New York, an easement by necessity is created if: (1) the original piece of land owned by one owner is subdivided AND (2) the access in which the easement provides is essential to the use of the property because there is no other ingress or egress available.

Question 11

Easement by Grant

Answer 11

Under NY law, a signed writing creates an easement by grant.

Question 12

Profit

Answer 12

A right to take part of the soil or produce off the land.

Question 13

Covenant

Answer 13

A promise to do or not do a certain thing. A real covenant runs with the land at law, binding successors in interest.

Question 14

Equitable Servitude

Answer 14

A covenant enforceable in equity by successors to the original parties.

Question 15

Condition

Answer 15

Breach of the condition results in forfeiture.

Question 16

Restrictive Covenant

Answer 16

Under the common law of property, restrictive covenants are promises (to do or not do something on the land) that runs with the land if there is:

1. A writing signed by the party to be charged with the breach,
2. Intent by the original contracting parties (original grantor and grantee) that the covenant run with the land and bind successors in interest,
3. The covenant touches and concerns the land (the covenant relates to the direct use or enjoyment of the land),
4. There is privity of estate between the plaintiff and defendant back to a common owner who imposed the restriction, AND
5. There is notice (actual, constructive, or inquiry) of the covenant.

Question 17

Agency Agreements for the Sale of Real Property

Answer 17

In NY, a signed writing meeting the requirements of the statute of frauds is normally required for the agency for the sale of real property. A licensed real estate broker, salesperson, or attorney, however, is exempt from this requirement. The agent has a fiduciary duty to the seller. The agent agrees to find a buyer who is ready, willing, and able to buy the property.

Question 18

3 Type of Agency Agreements for the Sale of Real Property

Answer 18

1. Non-Exclusive agency
2. Exclusive agency
3. Exclusive right to sell

Question 19

Non-Exclusive Agency

Answer 19

The agent earns a commission only upon finding a ready, willing, and able buyer within the time period of the agreement. The seller does not pay a commission where another agent finds the buyer or where the seller finds the buyer.

Question 20

Exclusive Agency

Answer 20

If the agent finds a buyer within the time period of the agreement, or even if another agent finds the buyer, the seller must pay the agent the agreed-upon fee. The seller may, however, find a buyer and not pay a fee.

Question 21

Exclusive Right to Sell

Answer 21

If a ready, willing, and able buyer is found within the time period of the agreement, by anyone, including the seller, the seller must pay the agent the agreed-upon fee.

Question 22

Deed

Answer 22

Under the common law of real property, a deed is a conveyance that the seller gives to the buyer upon closing. The promises of the contract for sale merge with the deed unless the contract specifically states that the promises in the contract will survive the closing date.

Question 23

Types of Deeds

Answer 23

Under the common law of real property, there are three types of deeds:

1. General warranty deed,
2. Special warranty deed, and
3. Quitclaim deed.

Question 24

General Warranty Deed

Answer 24

Has three covenants:

1. Seisin (ownership),
2. Against encumbrances (in NY this runs with the land),
3. Warranty.

Question 25

Special Warranty Deed

Answer 25

One covenant only - covenant against encumbrances.

Question 26

Quitclaim Deed

Answer 26

Conveys all of the interest in the property that the seller has, with all encumbrances.

Question 27

Marketable Title

Answer 27

Marketable title is title that is free of encumbrances.

Question 28

Mortgage

Answer 28

A mortgage conveys an interest in real property that is security (a bond) for payment of a debt. The mortgage is accompanied by a note, which is the promise to pay the debt. Under NY law, the mortgage creates a lien on the property (an encumbrance).

Question 29

Original Mortgagor’s Liability

Answer 29

Under MBE and NY law, where the original mortgagor transfers property to a purchaser who assumes the mortgage, the new purchaser becomes the primary obligor on the mortgage, and the original mortgagor becomes secondarily liable.

New York distinction: To be liable on the debt, the transferee must not only accept the deed but also:

1. Sign the deed in which (a) his assumption of the debt is stated, along with (b) the time remaining on the mortgage, (c) the interest rate, AND (d) the amount of principal assumed;

OR

2. Sign a separate acknowledgement of the debt.

Question 30

Foreclosure Against a Subsequent Purchaser

Answer 30

Under NY law, where the purchaser of property does not assume the mortgage, but instead takes subject to the mortgage, the property itself serves as a source of payment for the debt. The original mortgagor remains personally liable on the bond, but the mortgagee (lender of the money) may foreclose on the property.

Question 31

Requirements Under the Statute of Frauds for Effective Conveyance

Answer 31

Under NY law, a deed must be lawfully executed and delivered. No conveyance is effective unless the grantor has given up all control over the deed. Under the statute of frauds, the deed must be:

1. In writing,
2. Signed by the party to be charged with the breach,
3. The price must be stated, AND
4. There must be a sufficient description of land.

Question 32

Bona Fide Purchaser

Answer 32

Under NY law, a bona fide purchaser pays value and takes in good faith without notice of any prior claims on the land.

Question 33

New York Recording Statute

Answer 33

Under the recording law of NY, a race-notice jurisdiction, an unrecorded conveyance of real property is void as against a subsequent good faith purchaser for value who files first.

Question 34

Uniform Vendor Purchaser Risk Act

Answer 34

Under the Uniform Vendor and Purchaser Risk Act, when the contract for the sale of property is signed, the risk of loss remains on the seller until:

1. The buyer takes possession, OR
2. The deed is transferred and legal title passes to the buyer.

Distinguish from equitable conversion: Under the old rule of equitable conversion, however, when the contract for the sale of property was signed, the buyer took equitable title and assumed the risk of loss between contract and closing. The buyer had to perform at the closing, even if the property was substantially destroyed.

Question 35

Effect of Damage Between Contract and Closing

Answer 35

NY distinction. Under NY law, if the property is damaged, either party may enforce the contract with an abatement in the price. If the property is destroyed, the seller cannot enforce the contract, but the buyer can, with an abatement.

Question 36

Effect of Buyer’s Breach

Answer 36

NY distinction. Under NY law, if the buyer breaches, the seller keeps the entire down payment.

Question 37

Insurance Proceeds

Answer 37

Under NY law, the right to insurance proceeds is personal to the beneficiary of the policy.

Question 38

Dissolution of Tenancy by the Entirety

Answer 38

A tenancy by the entirety is dissolved only when:

(a) the spouses divorce,
(b) one spouse dies, OR
(c) both spouses mutually agree.

Question 39

Partition of Real Property Held as Tenants by the Entirety

Answer 39

Partition of real property owned as a tenancy by the entirety is NOT allowed unless:

(a) both spouses choose to do so voluntarily;
(b) when both spouses are indebted from a judgment against them jointly as husband and wife; OR
(c) by divorce.

Question 40

Tenancy by the Entirety: Lien Theory

Answer 40

New York is a lien theory jurisdiction, which enables one spouse to mortgage or convey his or her interest in a property held as tenancy by the entirety. However, a tenancy by the entirety is a protected form of co-ownership of real property and the mortgagee or party who the interest is conveyed to will have limited rights. The lien or conveyance does not sever the tenancy by the entirety and is subject to the remaining tenant’s right of survivorship. In addition, the party who was conveyed the interest receives only a one-half undivided interest in the property, but has no the right to use and enjoy the property or the right to bring a partition action.

Question 41

Rights and Liabilities Concerning a Hold-Over Tenant

Answer 41

Under the common law, a tenancy for a fixed period of time with a preset expiration date is called a term of years. A landlord has two options if a tenant holds-over (when the tenant retains possession after the expiration of the lease):

(a) he may evict the tenant OR
(b) he may hold the tenant over. By holding the tenant over, an implied month-to- month tenancy is created with terms identical to the original lease terms.

But, if the tenant was informed by the landlord before the end of the lease term that renewal of the lease would involve higher rent, the higher rent would apply. At common law, the duration of the implied periodic tenancy was equal to that of the original tenancy. Due to the potential harshness of this rule, the common law was modified, in that all holdover tenancies create implied month-to-month tenancies unless otherwise agreed by the parties.

Question 42

Landlord’s Tort Liability (duty to repair)

Answer 42

Generally, a landlord does not have a duty to repair or make the premises safe. However, there are seven exceptions to this general rule:

(1) by statute a landlord of a “multiple dwelling” must keep the dwellings in good repair;
(2) the landlord has a duty of reasonable care in maintaining common areas;
(3) if the landlord expressly undertakes (contracts) such a duty;
(4) a landlord who leases a public space is personally liable if he knows or should know of a defect and doesn’t repair it;
(5) if the landlord leases a furnished short-term dwelling;
(6) if the landlord makes negligent repairs; and
(7) if the landlord knows or should know of a latent defect and fails to warn the tenant.