Property Flashcards
Fee Simple Absolute
Runs forever and is fully alienable.
From O to A.
Voluntary Waste
Any affirmative action beyond the right of maintenance that causes harm to the premises.
Exception: Open mines doctrine
Permissive Waste
Tenant has failed to maintain.
Must:
- Be responsible for ordinary repair (NOT replacements)
- Pay taxes
- Pay interest on the mortgage. (Life tenant)
Ameliorative Waste (definition)
Affirmative act that alters the property substantially but INCREASES the value of it.
Ameliorative Waste (rule)
If CHANGED CONDITIONS have made the property RELATIVELY WORTHLESS in its current use, the life tenant can tear down without liability to the holder of future interest.
Rule of Convenience
Class closes when any one of the class is entitled to a distribution. (Only a rule of construction, not law)
Five Future Interests
Future interest = future possession
Retained by GRANTOR:
- Reversion
- Possibility of Reverter
- Right of Entry (Power of Termination)
Given to GRANTEE:
- Remainder
- Executory Interest
Reversion
Interest kept by GRANTOR when he gives LESS than the durational estate the grantor had.
Ex. O to A for life.
Property reverts back to O after A’s death.
Possibility of Reverter
Matches with: FEE SIMPLE DETERMINABLE.
Grantor keeps possibility of reverter
Fee Simple Determinable
Ends automatically when the condition happens
Ex. O to A FOR SO LONG AS no liquor is consumed on the premises.
Look for DURATIONAL language.
for so long as, while, during, until, …
Right of Entry
When grantor give fee simple to condition subsequent, grantor keeps a right of entry.
Does not occur automatically. Grantor must exercise the right.
Fee Simple Condition Subsequent
Language gives to grantee with condition introduced by “provided however” and gives O the right to “go and retake”
Ex. O to A; provided, however that if liquor is ever served on the premises the O shall have the right to reenter and retake the premises.
Other possible language: but if, upon condition that…
WATCH OUT: Grantor must EXPRESSLY reserve the right and a failure to do so will result in the condition being ignored.
Vested Remainder
Nothing stands in the way of its becoming possessory on the expiration of the estate that comes before it. (We know who will take and there are no conditions to taking)
ex. O to A for life, then to B and his heirs.
B has the vested remainder
Vested Remainder Subject to Open (Vested Remainder Subject to Partial Divestment)
Where the remainder interest is to a class who’s members are not yet fully known, the class remains open to allow for future persons who qualify as members of this class.
Types of Contingent Remainders
Something must happen or be known before the remainder can become possessory. One of three:
Ex. O to A for life, then to B and his heirs if B is 21 on A’s death.
- Condition
- Grantee not in existence (contingent upon grantee being born)
- Identity of exact taker unknown.
Contingent Remainders become possessory when:
(if at all) only upon the NATURAL EXPIRATION of the estates coming before them.
Remainders NEVER affect the estate that comes before them.
Executory Interest
Operates to CUT SHORT the estate that comes before it.
Ex. O to A for life, then to B and his heirs; but if at B’s death B is not survived by issue, then to C and her heirs
RAP applies to:
- Contingent remainders
- Executory interests
- Vested remainders subject to open
Rule Against Perpetuities
No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of interest.
BAR: Look at facts and ask if EVERYONE alive at time of grant die and 21 years pass before the interest might vest? If so. VOID.
Charity to Charity RAP exception
RAP never violated if gift over is from one charity to another. Note: BOTH must be charities.
RAP: Age contingency in open class
Watch for facts where the class is open and the gift over is contingent on a class member reaching a certain age. (Remember 21 years. More than that of an age restriction is probably a violation.)
RAP: Fertile Octogenarians
Regardless of age anyone is capable of having children.
Remember - age in bar questions is irrelevant.
Class gifts void because of RAP
Remember - bas as to one, bad as to all! NO member of class can take, even if they’ve already satisfied the class condition.
RAP: The unborn spouse
A giftover following a widow’s life estate where the gift over cannot vest until the widow dies.
Transfer by deed look at situation:
at the time the deed is executed.
Transfer by will look at situation:
at the time of the testator’s death.
Joint Tenancy Characteristics
- Right of survivorship
2. Right to partition
Creation of joint tenancy:
TTIP
- Time
- Title
- Interest
- Possession
Ways to sever joint tenancy
- Conveyance
- Mortgage (in a title theory state)
- Contract of Sale
- ACTUAL Creditor’s Sale
JT Destruction by Conveyance
JT’s transfer of his interest destroys just the sellers JT, turning it into a tenancy in common for the buyer, the other JT’s are still in tact.
JT Destruction by Contract of Sale
Doctrine of equitable conversion means severance occurs when a contract of sale is signed, NOT at closing.
JT Destruction by Mortgage (lien theory state)
Does not sever. When mortgage is executed NO TITLE TRANSFERS, so no unity is disturbed.
JT Destruction by Mortgage (title theory state)
Severance occurs. Title actually passes from mortgagor to mortgagee and when paid off goes back to mortgagor - therefore unity is disturbed.
Tenancy in Common
- Right to partition.
- NO right to survivorship.
- All TIC must have equal rights of possession.
This is the default tenancy.
TIC: Possession
Each co-tenant has the right to possess all the property consistent with other co-tenants’ rights to also possess it.
TIC: Accountability
Requirement that one co-tenant may have to account to another for a share of profits the co-tenant received.
GENERAL RULE: One co-tenant does NOT have to account to another co-tenant for a share of the profits.
TIC: Exceptions to Accountability General Rule
Under these exceptions a co-tenant DOES have to share his profit with the other TICs.
- Ouster
- Agreement to share
- Lease of the property
- Depletion of natural resources
TIC: Contribution
Right of one co-tenant to force the others to pay their share of some expenditure the co-tenant made.
Contributions that may be compelled:
Necessary repairs
Mortgage payments that co-tenant signed on.
Taxes and other government levies.
Contributions will not be compelled for improvements.
Tenancy for years
Any estate measured by a fixed period of time NO MATTER HOW SHORT is a tenancy of years.
Key phrase is a SPECIFIED TIME - does not have to be for years.
Statute of Frauds applicable for tenancy for years OVER one year. (So must be in writing.)
Periodic Tenancy
An ongoing, continuing, repetitive estate, until one party gives valid notice.
Periodic tenancy by implication
Created where lease is silent as to its duration.
If a lease does not specify how long it is to last, then it is presumed to be a periodic tenancy measured by the RENT payment.
Periodic tenancy by operation of law
- Acceptance of Rent when lease violates Statute of Frauds
2. The Hold-Over Case
Hold-Over Case
Tenant stays after expiration of lease, then the landlord accepts the rent.
Note: exceptions in cases where it’s only a few hours or the hold-over is beyond the tenants control (death, serious injury)
Termination of periodic tenancy
Must give proper notice.
1. Time - equal to the period.
(Unless period is over a year, then just six months notice is required.)
2. The correct effective day of termination: the last day of the period, ONLY.
Ex. Rent period starts on the 15th of the month then the only correct effective date of termination is the 14th.
Tenancy at Will
Either party can terminate at any time, without notice.
Termination of tenancy at will
- Death of either party
- Waste by tenant
- Assignment by tenant
- Transfer of title by the landlord
- Lease by landlord to someone else
Tenancy of sufferance
The bare possession of a holdover tenant.
What options does the landlord have in a tenancy at sufferance?
At L’s SOLE option L can:
1. Sue T for trespass and recover damages, OR
2. Impose new periodic tenancy on T.
RESIDENTIAL properties will always be month to month.
Termination of periodic tenancy
Must give proper notice.
1. Time - equal to the period.
(Unless period is over a year, then just six months notice is required.)
2. The correct effective day of termination: the last day of the period, ONLY.
Ex. Rent period starts on the 15th of the month then the only corre
Periodic tenancy by operation of law
- Acceptance of Rent when lease violates Statute of Frauds
2. The Hold-Over Case
Hold-Over Case
Tenant stays after expiration of lease, then the landlord accepts the rent.
Note: exceptions in cases where it’s only a few hours or the hold-over is beyond the tenants control (death, serious injury)
Tenancy at Will
Either party can terminate at any time, without notice.
Termination of tenancy at will
- Death of either party
- Waste by tenant
- Assignment by tenant
- Transfer of title by the landlord
- Lease by landlord to someone else
Tenancy of sufferance
The bare possession of a holdover tenant.
What options does the landlord have in a tenancy at sufferance?
At L’s SOLE option L can:
1. Sue T for trespass and recover damages, OR
2. Impose new periodic tenancy on T.
RESIDENTIAL properties will always be month to month.
Imposition of new periodic tenancy on commercial property.
If expired tenancy was for a year or more - the new tenancy is year-to-year.
If it was for less than a year the new tenancy is measured by the rent period of the old tenancy.
Defenses to equitable enforcement
- Unclean hands
- Acquiescence
- Laches
- Estoppel
Unclean hands
P did the same thing as D
Acquiescence
e.g. P let neighbor on other side do the same thing.
Laches
Did not object in a timely manner.
Estoppel
e.g. P said earlier that she did not mind if D put up an office building.
All or Nothing Rule regarding Equitable Servitudes Defenses
You cannot void a restriction because of changed conditions in the area unless ALL LOTS in the subdivision are affected.
HELUVA
Adverse Possession:
- Hostile
- Exclusive
- Lasting
- Uninterrupted
- Visible (open and notorious)
- Actual
(ALL MUST BE PRESENT TO TAKE)
Duties of Tenant
If lease is silent the tenant must:
- Pay rent
- Not commit waste.
Effects if a ‘repair and maintain’ clause
Tenant is liable for ALL damage to the property, INCLUDING ordinary wear and tear unless that is specifically EXCLUDED from the promise to repair.
Landlord remedies: If T fails to pay rent?
- L can sue for both DAMAGES and to throw T off the property.
Landlord remedies: If T unjustifiably abandons the leasehold?
- L can treat abandonment as offer of surrender and accept the offer by retaking the premises; thus ending T’s liability at that date. OR
- Rerent the property on T’s account and hold T liable for any deficiency. (Mitigation of tenant’s damages)
Duties of a landlord
- To give T possession o the premises when lease begins.
- To deliver RESIDENTIAL premises in a habitable condition.
- Implied covenant of quiet enjoyment.
When a landlord breaches implied warranty of habitability (residential property only)
- T can move out and end the lease; or
2. T can stay, pay, and sue for damages.
Ways a landlord can breach an implied covenant of quiet enjoyment
- By a TOTAL EVICTION of T, which terminates lease, ending T’s obligation to pay rent.
- By PARTIAL EVICTION of T, which does NOT terminate the lease; T stays and pays NO RENT to L. (Note: if partial eviction is by person who has better title than the L, T’s rent is APPORTIONED.)
- By CONSTRUCTIVE EVICTION - Where L fails to provide a service that L is supposed to provide, thus making the premises uninhabitable.
Total Eviction
Terminates the lease ending T’s obligation to pay rent.
Partial Eviction
Locks T out of some portion of the property. Lease is not terminated and T pays no rent UNLESS the partial eviction is by someone who has better title then L - then T’s rent is apportioned.
Constructive Eviction
L fails to provide service that L is supposed to provide, thus making premises uninhabitable.
For T to be excused three requirements must be met:
- It must be the LANDLORD.
- Must be a SUBSTANTIAL interference with the covenant of quiet enjoyment.
- Must be an ABANDONMENT of the premises within a REASONABLE TIME after the breach.
Assignment
When T transfers everything, holding nothing back.
Sublease
When T transfers a PORTION of the lease period, holding some time back.
Privity of Estate
Liability on the conveyance.
Only exists between the PRESENT L and PRESENT T.
Privity of Contract
Liability on the contract.
Exists when there is an agreement between the parties or where an assignee ‘expressly assumes’ the obligations under the lease.
Touch and Concern Test
If performance of the covenant makes the land more VALUABLE or USEFUL then it meets the touch and concern test
Partial taking
Does not release T from obligation to pay FULL rent, but T gets an amount equal to the rent that will have to be paid over the remainder of the lease for the property taken.
Full taking
Extinguishes the lease and T is excused from paying rent.
T shares in the condemnation award only to the extent that the fair rental value of the lease exceeds the rent due under the lease.
General Rule for Landlord Tort Liability
At common law there is no duty of landlord to T or to T’s invitees for injuries on the premises during the life of the lease.
Exceptions to the general rule for landlord tort liability
- Latent Defects
- Short term leases of a furnished dwelling (3 months or less)
- Common areas under landlord’s control
- Negligent repairs
- Public use exception
Latent defects
Landlord is under a duty to DISCLOSE latent defects which landlord either knows of or has reason to know of.
The latent defect is a defect that T does not know of and a reasonable person in T’s position would not discover.
Landlords are liable for injuries in an area under the landlord’s control if:
Landlord failed to use REASONABLE care.
Negligent repairs
L is liable for injury resulting from L’s repair of a defect in the premises EVEN IF L used ALL DUE CARE in making the repair.
L created the deceptive appearance of safety for which L is liable.
Public use exception
L is liable for injury from defects in the premises if three requirements are satisfied:
- L must know or should know of major defects, and
- L must know or should know or should know that T will not fix the defect, and
- L must know or should know the public will be using the premises.
4 elements in determining intent on whether something is a fixture.
- Degree of attachment
- General custom with the item
- Degree of harm to the premises on removal.
- Trade fixtures are NEVER fixtures.
Washers and dryers are NEVER fixtures.
Easement
Non-possessory interest in land involving a right of use.
Easement Appurtenant
Easement that directly benefits the use and enjoyment of a specific piece of land.
(Always 2 properties here)
Servient estate
The property that is burdened with the easement,
Dominate estate
Property that is benefitted by the easement.
Easement in gross
Where NO property is benefited (there is no dominate estate)
Ex: Utility easements, RR tracks, etc.
ILT. 47
Three ways to create an easement
- Express easement.
- Easements by implication
- Absolute right of access situation.
- Easement by Prescription
Express easement
Arises with the grant of an easement to someone else or the reservation of an easement when land is sold to another.
Must comply with Statute of Frauds and with deed formalities.
Easement by Implication
- Previous use by a common owner (someone who sells off a piece of his property to someone else.)
- Previous use must be:
- Continuous
- Apparent
- and Reasonably Necessary
Absolute right of access situation
An implied easement by necessity exists when property is landlocked.
However, the owner of the servient estate can choose the location of the easement, so long as the location is reasonable.
Easement by Prescription
Arises like title of adverse possession. Four requirements:
- Use must be adverse to the owner. (trespass)
- Must be continuous and uninterrupted for the statutory period. (Note: seasonal use okay if appropriate.)
- Use must be visible and notorious, or with the owners knowledge.
- Use must be without the owner’s permission. (Note: even ORAL permission suffices)
Pure Notice Statutes
Allows subsequent purchases for value and WITHOUT NOTICE or a prior conveyance to prevail over a prior transferee regardless whether the subsequent purchaser records.
So, if subsequent buyer has knowledge –> he cannot take.
4 Ways to Sever a Joint Tenancy
- Death
- Inter-vivos conveyance.
a. Severs the JT to the extent of the interest conveyed and a TIC is created. - Mortgage in title theory jurisdiction
- A final partition decree.
RAP does not apply to options connected to:
leaseholds.
Covenant of quiet enjoyment
that neither landlord or someone w/ paramount title will interfere w/ tenant’s quiet enjoyment and possession of the premises.
IMPLIED covenant in EVERY lease
Profit
A non-possessory interest in land that entitles the holder of the profit to enter onto the servient tenement to take the soil or a substance of the soil (oil, game, timber, etc.).
Partial restraint on alienation
Purports to restrict the power to transfer to a specific person, for a specific time, or by a specific method. Such restraints if for a reasonable purpose are likely to be upheld.
Marketable title
In EVERY LAND SALE CONTRACT there is an implied warranty that at closing the seller will provide buyer with marketable title.
Inability to establish a record chain of title will generally render the title unmarketable!!!
Notice
Actual, inquiry, or record notice
A Deed is voidable if:
it is executed by minor or incapacitated person. Or is obtained through fraud in the inducement, duress, undue influence, mistake, or breach of fidicuary duty. *****
***A voidable deed will be set aside ONLY IF the property has not passed to a BFP.
Delivery of a deed is presumed if:
the deed is handed to the grantee, acknowledged by the grantor before a notary, OR recorded.
ANTI-LAPSE statute
@CL if a will beneficiary died b/f the testator then the gift to the beneficiary was void.
Anti-lapse statute saves the gift for the predeceasing beneficiaries descendants IF the beneficiary himself is a descendant of the testator.
When a mortgagee transfers a promissory note, for the transferee to become a holder in due course:
- The note must be negotiable in form—i.e., the note must be payable to bearer or to the order of the named payee and must contain a promise to pay a fixed amount of money and no other promises, except that it may contain an acceleration clause and an attorneys’ fee clause;
- If there is a named payee, she must have indorsed (i.e., signed) the note;
- The note must be delivered to the transferee; and
- The transferee must pay value for the note and take the note in good faith, without notice that the note is overdue or has been dishonored, or that the maker has any defense to the duty to pay it.
A purchase money mortgage (“PMM”) is a mortgage given to either:
i) the vendor of the property as a part of the purchase price, or
(ii) a third party who lends funds to allow the buyer to purchase the property.
As between a vendor PMM and a third-party PMM imposed as part of the same transaction, the vendor’s is presumed to have priority, irrespective of the order of recording.
Statutory redemption:
is the right of a mortgagor to recover the land by paying the foreclosure sale price after the foreclosure sale has occurred.
Equitable redemption:
is the right of a mortgagor to recover the land by paying the amount overdue, plus interest, at any time before the foreclosure sale.
The benefit of the covenant will run with the land if:
- The covenanting parties intended that successors in interest be benefitted by the covenant;
- There is vertical privity between the covenantee and her successor in interest; and
- The covenant touches and concerns the land (i.e., it benefits the covenantee and her successor in their use and enjoyment of the benefited land).
The burden of an equitable servitude will run to successors in interest if: (3 things)
- The covenanting parties intended that successors in interest be bound by the covenant;
- The successor in interest has notice of the covenant (if she paid value); and
- The covenant touches and concerns the land (i.e., it benefits the covenantor and his successor in their use and enjoyment of the burdened land).
The benefit of an equitable servitude will run to successors in interest if:
- The covenanting parties intended that successors in interest be benefited by the covenant; and
- The covenant touches and concerns the land.
