Property Flashcards
Present Estates: Fee Simple Absolute - How It’s Created + Distinguishing Characteristics
Created: “To A” or “To A and his heirs”
Characteristics: Freely alienable (transfer inter vivos), devisable (pass by will), and descendible (pass intestate/no will)
Present Estates: Defeasible Fee Types + Remember What Defeasible Means
1) Fee Simple Determinable
2) Fee Simple Subject to Condition Subsequent
3) Fee Simple Subject to Executory Limitation
Remember: Defeasible means the land is capable of forfeiture if a condition is not met
Present Estates: Fee Simple Determinable - How to Create + Distinguishing Characteristics (Devise/Descend/Alienate) + Future Interest
Create: “To A SO LONG AS…” “To A UNTIL…” or “To A DURING”
Characteristics: This estate, like all defeasible fees, is DEVISABLE, DESCENDIBLE, and ALIENABLE, subject to the condition
Future Interest: Possibility of Reverter for original owner - automatic transfer if condition is violated
Present Estates: Fee Simple Subject to Condition Subsequent - How It’s Created + Future Interest
Create: 1) Durational language + 2) Clear statement of right of reentry (e.g. “To A but if X event occurs, grantor reserves the right to re-enter and retake.”
Future Interest: Right of Entry for original owner - optional transfer if original owner claims land back after condition is violated
Present Estates: Fee Simple Subject to Executory Limitation - How It’s Created + Distinguishing Characteristics + Future Interest
Create: “To A, but if X event occurs, then to B”
Characteristic: This estate is just like FS Determinable, only now, if the condition is broken, the estate is AUTOMATICALLY TRANSFERRED TO SOMEONE OTHER THAN THE GRANTOR
Future Interest: Shifting Executory Interest
Present Estates: Two Important Rules of Construction for Defeasible Fees (Desire/Hope/Expectation + Absolute Restraints)
1) Words of mere desire, hope, or intention are INSUFFICIENT to create a defeasible fee (courts WILL NOT FIND a defeasible fee UNLESS clear durational language is used)
2) Absolute restraints on alienation ARE VOID
Present Estates: Life Estate - How It’s Created + Future Interest + Remember Pur Autre Vie + Distinguishing Characteristics (Remember Waste)
Create: “To A for life”
Future: Original owner has a REVERSION, if held by a third party its a REMAINDER
Remember: A life estate pur autre vie is measured by the LIFE OTHER THAN GRANTEE’S (e.g. To A for the life of B)
Characteristics: The life tenant is entitled to ALL ORDINARY USES and profits, BUT may not commit waste
Present Estates: Three Types of Waste
1) Voluntary Waste - ACTUAL, OVERT CONDUCT that causes a decrease in property value
2) Permissive Waste - Land is NEGLECTED or life tenant fails to reasonably protect the land (including taxes based on either profit from land OR fair rental value - NOT fair market value)
3) Ameliorative Waste - ENHANCEMENT OF PROPERTY value is prohibited unless ALL FUTURE INTEREST HOLDERS CONSENT
Future Interest: Future Interests Capable of Creation in the Grantor
1) Possibility of Reverter (available in fee simple determinable)
2) Right of Entry (available in fee simple subject to condition subsequent)
3) Reversion (grantor who transfers an estate lesser than the duration she started with, other than fee simple determinable or fee simple subject to condition subsequent)
Future Interest: Interests in Transferees
Held by someone other than the grantor:
1) Contingent remainder, or
2) Vested Remainder ((i) indefeasibly vested remainder, (ii) vested remainder subject to complete defeasance, or (iii) vested remainder subject to open), or
3) Executory Interest ((i) shifting executory interest, or (ii) springing executory interest)
Future Interest: What is a Remainder? + Tip
A future interest created in a grantee that transfers upon expiration of a prior estate
Tip: Think of remainders as SOCIABLE, they are ALWAYS accompanied by a preceding estate of known fixed duration (life estate or term of years) and never cut shorts the prior taker, but instead waits for their turn to take the property patiently
Future Interest: Remainders - Contingent v. Vested
Contingent - A remainder is contingent if: (1) it is created in an UNASCERTAINED OR UNKNOWN PERSON (e.g. To A for life, then to B’s first child. A is alive but B has no children), or (2) it is subject to an UNMET CONDITION PRECEDENT (e.g. “To A for life, then, if B graduates from college, to
B.” A is alive. B is now in high school), or both
Vested - Created in a known taker who is not subject to a condition precedent
Future Interest: Types of Vested Remainders + Comma Rule + Rule of Convenience
1) Indefeasibly Vested Remainder - certain to acquire an estate in the future with no strings attached
2) Vested Remainder Subject to Complete Defeasance - remainder’s taking is not conditioned on an unmet precedent (that would be contingent remainder), BUT can be cut short by a CONDITION SUBSEQUENT
Comma Rule: To tell the difference between a contingent remainder and vested remainder subject to complete defeasance, apply this rule. When conditional language in a transfer follows language that, taken alone and set off by commas, would recreate a vested remainder, the condition is a subsequent, and you have a vested remainder subject to complete defeasance
3) Vested Remainder Subject to Open - Remainder vested in a CLASS or GROUP, at least one of whom is qualified to take possession, but each class member’s share could decrease with each additional member added, not yet ascertained
Rule of Convenience: The class closes whenever any member is within its rights to demand possession
Future Interest: Executory Interest Definition
An executory interest is a future interest created in a transferee (third party), which is NOT a remainder because it takes effect by either CUTTING SHORT some interest in another person (“shifting”) or in the grantor or his heirs (“springing”)
Future Interest: Executory Interests - Shifting Executory Interest v. Springing Executory Interest
Shifting: A shifting executory interest ALWAYS FOLLOWS A DEFEASIBLE FEE and cuts short someone OTHER THAN THE GRANTOR
Springing: An executory interest that cuts short the INTEREST OF THE GRANTOR
Rule Against Perpetuities
A future interest is void if there is ANY POSSIBILITY, however remote, that the given interest could vest MORE THAN 21 YEARS AFTER THE DEATH OF A LIFE IN BEING
Rule Against Perpetuities: Four-Step Technique for Assessing Potential Rap Problems
1) Determine which future interests have been created by conveyance, RAP ONLY applies to (i) contingent remainders, (ii) vested remainders subject to open, and (iii) executory interests;
2) Determine what has to happen for the future interest holder to take;
3) Look for the people alive at the date of the conveyance whose lives/deaths are relevant to what has to happen for conveyance (i.e. measuring life); and
4) Determine whether we will know for sure within 21 years after the death of a measuring life if the future interest holders can take. If we will not know, only the future interest is void
Rule Against Perpetuities: Bright Line Rule
An executory interest with NO LIMIT on the time within which it must vest VIOLATES RAP
Rule Against Perpetuities: Reform of the RAP - “Wait and See” or “Second Look” Doctrines
The validity of any suspect future interest is determined on the basis of the facts as they now exist, at the CONCLUSION OF OUR MEASURING LIFE
Rule Against Perpetuities: Reform of the RAP - Uniform Statutory Rule Against Perpetuities (USRAP)
Codifies the common law RAP and, in addition, provides for an ALTERNATIVE 90-YEAR VESTING PERIOD
Rule Against Perpetuities: Reform of the RAP - Cy Pres Doctrine
If a given disposition violates the rule, a court may reform it in a way that MOST CLOSELY MATCHES the grantor’s intent, while still complying with RAP
Adverse Possession Elements + Tip + Remember State of Mind
1) Continuous,
2) Open and Notorious,
3) Actual, and
4) Hostile
Tip: COAH
Remember: Possessor’s subjective state of mind is IRRELEVANT, it doesn’t matter if he thought he was on his own land or knew he was encroaching on another’s land
Adverse Possession: Tacking + Remember Privity Definition or Lack Thereof
One adverse possessor may tack on to his time with the land his predecessor’s time, so long as there is PRIVITY between the possessor
Remember: Privity is satisfied by any NON-HOSTILE nexus (e.g. contract, deed, or will), by contrast privity is absent when the possessor acquires land BY OUSTING his predecessor
Adverse Possession: Disabilities
The statute of limitations WILL NOT RUN against a true owner who is afflicted by a disability AT THE INCEPTION of the adverse possession (e.g. insanity, infancy, imprisonment)
Concurrent Estates: Three Forms of Concurrent Ownership
1) Joint Tenancy
2) Tenancy by the Entirety
3) Tenancy in Common
Concurrent Estates: Joint Tenancy - Distinguishing Charactersitics
1) Right of survivorship - when one joint tenant dies, the other(s) automatically receive her share in he property interest
2) Alienability - A joint tenant’s interest is alienable inter vivos
3) Not Devisable nor Descendible
Concurrent Estates: Joint Tenancy - Four Unities to Create + Tip P.I.T.T. Lets Go PITT + Remember Clear Expression
The following elements must be present to create a joint tenancy:
1) Possession
2) Interest
3) Time
4) Title
Tip: PITT lets go Pitt
Remember: In addition to the four unities, to create a JTWROS, the grantor MUST CLEARLY EXPRESS the right of survivorship
Concurrent Estates: Joint Tenancy - How Can it be Severed + Remember 3 Types of Partition + Tip SAP
1) Severance and Sale - a joint tenant may sell or transfer her interest during her lifetime, new buyer becomes tenant in common
2) Severance and Partition - (i) voluntary agreement, (ii) partition in kind (judicial action for physical division of property), and (iii) forced sale (land is sold and proceeds are divided)
Tip: SAP (Sale and Partition)
Concurrent Estates: Tenancy by the Entirety Creation + Protections (TIP - CANT TOUCH THIS)
Presumptively arises to ANY CONVEYANCE to married partners, UNLESS grant clearly states otherwise
Protections: 1) Creditors of only one spouse cannot touch this tenancy for satisfaction of debt, and 2) Unilateral conveyance - one spouse, acting alone, cannot defeat the right of survivorship by unilaterally conveying to a third party
Concurrent Estates: Tenancy in Common - Distinguishing Characteristics
1) Each co-tenant owns an individual part, and each has a RIGHT TO POSSESS the whole, and
2) Each interest is devisable, descendible, and alienable
Concurrent Estates: Rights and Duties of Co-Tenants - Rent from Co-Tenant in Exclusive Possession + Remember Rent from Third Parties
Absent ouster, a co-tenant in exclusive possession is NOT LIABLE to the other for rent
Remember: A co-tenant who leases all or part of the premises to a third party MUST provide their co-tenants a fair share of the rental income (distribute rent based on ownership of property)
Concurrent Estates: Rights and Duties of Co-Tenants - Carrying Cost + Remember Repairs
Each co-tenant must pay his fair share of the carrying cost (e.g. taxes, mortgage, interest payments)
Remember: The repairing co-tenant enjoys a right to contribution based on percentage of ownership for reasonable and necessary repairs AS LONG AS he gave notice of the need
Concurrent Estates: Rights and Duties of Co-Tenants - Improvements + Remember At Partition
During the right to a co-tenancy, there is NO RIGHT to contribution for “improvements” made unilaterally by one co-tenant
Remember: At partition occurs at the end of a co-tenancy, the improver gets the credit equal to any value increase he caused
Concurrent Estates: Rights and Duties of Co-Tenants - Waste
A co-tenant must not commit waste, an aggrieved co-tenant is permitted to bring an action for waste against another
Four Leasehold Estates
1) Tenancy for Years
2) Periodic Tenancy
3) Tenancy at Will
4) Tenancy at Sufferance
Leasehold Estates: Tenancy For Years Description + Remember Notice to Terminate + Remember SOF
A lease for a fixed, DETERMINED PERIOD OF TIME
Remember: No notice is needed to terminate because the end is automatic based on pre-determined date
Remember: A term of years GREATER THAN ONE YEAR must be in writing to be enforceable
Leasehold Estates: Periodic Tenancy Description + Creation
This lease continues for SUCCESSIVE intervals until properly terminated
Creation: May be created 1) Expressly (i.e. To T for month to month), or 2) by Implication by one of three ways ((i) no mention of duration but provision is made for the payment of rent at set intervals, (ii) oral term of years measured by way rent is tenured, and (iii) if a landlord elects to HOLD OVER a tenant who has wrongfully stayed at the conclusion of the original lease
Leasehold Estates: Periodic Tenancy - Termination + Remember Common Law v. Restatement For Year to Year
Notice, usually in writing, for the time at LEAST equal to the period of the tenancy itself
Remember: Common law - six months notice, BUT BAR EXAM TESTS RESTATEMENT, which is one month before termination
Leasehold Estates: Tenancy at Will Description + Remember Court’s Presumption + Remember Termination
A tenancy for NO FIXED DURATION
Remember: Unless stated expressly in the lease, courts will treat the tenancy as an implied periodic tenancy based on the payment of regular rent
Remember: A tenancy at will in theory may be terminated at either time by either party, BUT courts now require a REASONABLE DEMAND to quit the premises
Leasehold Estates: Tenancy at Sufferance Creation + Termination
Creation: When the T has wrongfully held over, past the expiration of the lease
Termination: The tenancy at sufferance lasts ONLY until the L evicts the tenant or elects to hold them to a new tenancy
Tenant’s Primary Duties + Remember Waste
1) Duty to repair
2) Duty to pay rent
Remember: T must NOT commit waste
Tenant’s Duties: Duty to Repair When Lease is Silent
T need only MAINTAIN the premises, meaning routine repairs other than those due to ordinary wear and tear
Tenant’s Duties: Law of Fixtures + Fixture Defined + Remember Passing With Ownership of Land & Exception
When a T removes a fixture, she is liable for voluntary waste
Fixture: A once movable chattel that, by virtue of its annexation to realty, intends to PERMANENTLY IMPROVE realty (e.g. heating systems, windows, certain lighting)
Remember: Fixtures pass with ownership of the land, meaning if what T installed amounts to a fixture, T MUST NOT remove it
Exception: T may remove a CHATTEL that she installed so long as REMOVAL DOESN’T CAUSE SUBSTANTIAL HARM to the premises
Tenant’s Duties: T’s Duty to Repair When T Has Expressly Covenanted in Lease to Maintain Property in Good Condition (Then v. Now)
At common law, T was responsible for any loss to the property, including loss attributable to force of nature.
Today, the MAJORITY VIEW is when the premises is destroyed without T’s fault, T may end the lease
Tenant’s Duties: Duty to Pay Rent - Landlords Options if T Breaches Duty to Pay Rent but Stays in Possession + Remember Tenant at Sufferance
1) Evict through the courts, or
2) Continue the relationship and sue for the rent due
Remember: If the relationship is continued, the tenant becomes a T at sufferance
Tenant’s Duties: Self-Help Rule
Landlord MUST NOT engage in self-help, it is punishable civilly and criminally
Tenant’s Duties: T Breaches Duty to Pay Rent But is Out of Possession - Landlord’s Options + Tip SIR + Remember Duty to Mitigate
1) Surrender - L could choose to treat T’s abandonment as an implicit offer to surrender
2) Ignore - ignore the abandonment and hold T responsible for unpaid rent (minority of states allow this)
3) Re-let - find a new T for premises on the wrongdoer’s behalf, and hold wrongdoer liable for any deficiency
Remember: Landlord must attempt to re-let because they have a duty to mitigate damages
Landlord’s Duties: Duty to Deliver Possession + Remember Hold Over Tenants
The majority rule requires that L put T in ACTUAL PHYSICAL POSSESSION of the premises
Remember: If at the start ot T’s lease, a prior holdover T is still in possession, T gets damages
Landlord’s Duties: Implied Covenant of Quiet Enjoyment + Remember Which Properties This Applies To
T has a right to quiet use and enjoyment of the premises without interference from L
Remember: This applies to ALL commercial and residential leases
Landlord’s Duties: Implied Covenant of Quiet Enjoyment - How L Breaches
1) Wrongful eviction of T from premises
2) Constructive eviction of T
Landlord’s Duties: Implied Covenant of Quiet Enjoyment - Elements of Constructive Eviction + Tip SING
1) Substantial Interference;
2) Notice, and L must fail to correct it;
3) Goodbye, T must leave the premises within a reasonable time after L fails to correct the problem
Landlord’s Duties: Wrongful Acts of Other Tenants + Exceptions
The landlord is NOT liable to a tenant for the wrongful acts of OTHER TENANTS
Exceptions: 1) L must not allow a NUISANCE on site, and
2) L must control COMMON AREAS
Landlord’s Duties: Implied Warranty of Habitability + (1) Remember Which Properties This Applies To + (2) Remember Waivability
The premises must be fit for basic human dwelling
(1) Applies ONLY TO RESIDENTIAL leases, not commercial
(2) This implied warranty is NON WAIVABLE - any provision in a lease taking this away is nullified
Landlord’s Duties: Implied Warranty of Habitability - T’s Remedies of Breach + Tip M R 3 (Mr. 3) + Remember Escrow
1) Move, or
2) Repair and reduce from rent, or
3) Reduce payment and place in escrow, or
4) Remain and sue for money damages
Remember: T must place withheld rent into an escrow account to show her good faith
Landlord’s Duties: Retaliatory Eviction
If T lawfully reports L for housing code violation, L is barred from penalizing T (e.g. raising rent, ending lease, harassing T)
Transfers of Leaseholds: Assignment v. Sublease + (1) Remember Prior Written Approval + (2) Remember L Implied Waiver
Assignment: T transfers his WHOLE INTEREST in a lease to a third party
Sublease: T transfers PART OF HIS INTEREST in a lease to a third party
(1) L can prohibit T from assigning or subletting without L’s PRIOR WRITTEN APPROVAL
(2) However, once L consents to one transfer by T, L waives the right to object to future transfers, UNLESS L EXPRESSLY RESERVES THE RIGHT
Transfers of Leaseholds: If Assignment Occurs, Whose in Privity of Estate and Whose in Privity of Contract + Consequences of This
1) L and T2 are in privity of estate, but not privity of contract
2) L and T1 are no longer in privity of estate, but remain in privity of contract
Consequences: If T2 violates K, L may go after T1 (privity of K claim) OR T2 (privity of estate claim)
Transfers of Leaseholds: If Sublease Occurs, Whose in Privity of Estate and Whose in Privity of Contract
The L and the sublesee are in neither privity of estate NOR privity of K. Instead, T2 is responsible to T1 and vice versa
Transfers of Leaseholds: Landlord’s Tort Liability - Caveat Lessee + Exceptions - Tip CLAPS
This common law doctrine states L has NO DUTY to make the premises safe for T
Exceptions: 1) Common Areas,
2) Latent defects (L must WARN T of hidden D WHICH L HAS KNOWLEDGE or reason to know)
3) Assumption of Repairs (once L undertakes a repair, he must complete with REASONABLE CARE);
4) Public Use (L who leases PUBLIC SPACE for a short time and who should know of the defect is liable for any defects on the premises);
5) Short-Term lease of Furnished Dwelling (L is responsible for any defective condition which proximately injures T)
Easements Definition
A grant of non-possessory property interest that entitles its holder to some form of use or enjoyment on another’s land
Easements: Affirmative v. Negative
Affirmative: The right to go onto and do something on servient land
Negative: Entitles its holder to prevent the servient landowner from doing something
Easements: Negative Easement Categories + Tip L.A.S.S. + Remember Minority Additional Category
1) Light
2) Air
3) Support
4) Stream water from artificial flow
Remember: A minority of states also allow a negative easement for scenic view
Easements: Negative Easement - How to Create
Negative easements can only be created EXPRESSLY, by a writing signed by the grantor
Easements: Appurtenant v. In Gross + (1) Remember Parcels of Land Involved w/ Appurtenant + (2) Remember Common Examples of In Gross Easements
Appurtenant - An easement that benefits its holder in his PHYSICAL USE or ENJOYMENT of HIS OWN property
(1): Two parcels of land must be involved: (i) a dominant tenement, which derives the benefit, and (ii) a servient tenement, which bears the burden. (Easements in gross only have a servient tenement which is burdened, no dominant tenement)
In Gross: Confers upon its holder ONLY a personal or pecuniary advantage that is not related to HIS OWN USE of land
(2): Examples - right to place a billboard on another’s lot, right to swim in another’s pond, or utility company’s right to lay power lines on another’s lot
Easements: Appurtenant Transferability + Remember Bona Fide Purchaser Without Notice
This will transfer AUTOMATICALLY with the DOMINANT TENEMENT, regardless of whether it is ever mentioned in the conveyance. The burden also passes with automatically with the servient estate, UNLESS the new owner is BONA FIDE PURCHASER WITHOUT NOTICE of the easement
Easements: In Gross Transferability
An easement in gross WILL NOT TRANSFER, unless it is for commercial purposes
Easements: Creation of Affirmative Easements + Tip PING
1) Prescription,
2) Implication,
3) Necessity, and
4) Grant
Easements: Creation of Affirmative Easements - Grant + Remember SOF
An easement that is in writing signed by grantor
Remember: If for more than one year, it must be in writing complying with elements of a deed
Easements: Creation of Affirmative Easements - Implication
Implied from prior use; at time land is severed, (i) the previous use was APPURTENANT, and (ii) parties EXPECTED use would survive division because it is REASONABLY NECESSARY to the dominant tenement’s use and enjoyment
Easements: Creation of Affirmative Easements - Necessity
When grantor conveys a portion of its land with no way out, except over some part of the grantor’s land
Easements: Creation of Affirmative Easements - Prescription
Acquired by analogy to adverse possession (COAH), continuous for given statutory period, open and notorious, actual use, hostile
Easements: Creation of Affirmative Easements - Scope of Easements
The scope is determined by the terms or conditions that created it
Easements: Ways to Terminate + Tip E.N.D. C.R.A.M.P
1) ESTOPPEL, servient owner materially changes his or her position in reasonable reliance on the easement holder’s assurances the easement will no longer be enforced
2) NECESSITY, easements born of necessity will expire when the need ends, UNLESS reduced to express grant
3) DESTRUCTION, of the servient land, other than through willful conduct
4) CONDEMNATION by government eminent domain
**5) RELEASE, given by easement holder to servient land IN WRITING
**6) ABANDONMENT, showing intent to abandon easement by PHYSICAL ACTION (e.g. putting up a structure preventing entrance onto servient land)
7) MERGER, when title to easement and title to servient land become vested in THE SAME PERSON
8) PRESCRIPTION, servient owner may extinguish easement by interfering with it in accordance with elements of ADVERSE POSSESSION
What is a License? + Remember Writing + Remember Revocation
A privilege to enter another’s land for some delineated purpose (e.g. tickets to an event, neighbors talking by the fence allowing use of land)
Remember: It is NOT REQUIRED to have a writing, licenses are not subject to the statute of frauds
Remember: Licenses are FREELY REVOCABLE at the will of the licensor, UNLESS estoppel applies (investment of substantial money or labor)
Rights from Profit + Remember Creating and Terminating
Entitles its holder to enter the servient land and take from it (e.g. timber, minerals, oil)
Remember: The rules for creating and terminating profit are THE SAME AS EASEMENT
Covenant Description + Difference with Easement
A promise to do or not do something related to land
Difference: This is NOT the grant of a property interest, rather a CONTRACTUAL LIMITATION or promise regarding land
Covenants: Negative v. Affirmative
Negative (Restrictive Covenants): A promise to REFRAIN from doing something (e.g. not to build commercially, not to post a for sale sign)
Affirmative: A promise TO DO something (e.g. maintain common fence)
Covenant v. Equitable Servitude
The difference mainly relies on the BASIS OF DAMAGES sought.
Covenant: money damages
Equitable Servitude: injunctive relief
Restrictive Covenants: When Does A Covenant Run With the Land? + Steps to Create (Tip WITHN & WITV)
When it is capable of binding successors to the originally promising parties
Step 1: Does the BURDEN pass on? Look for (i) Writing, (ii) Intent, (iii) Touch and concern the land, (iv) Horizontal and vertical privity, meaning grantor/grantee, landlord/tenant, mortgagor/mortgagee relationship (horizontal) AND non-hostile nexus between past and present landholder (vertical), (v) Notice
Step 2: Does the BENEFIT pass on? Look for (i) Writing, (ii) Intent, (iii) Touch and concern with land, and (iv) Vertical privity
Equitable Servitude Definition + Remember Damages + How to Create (Tip WITNES) + Remember Privity
A promise that equity enforces against successors, damages are injunctive relief
Create: Look for (i) Writing (not always), (ii) Intent, (iii) Touch and concern, (iv) Notice, (v) Equitable Servitude
Remember: Privity IS NOT REQUIRED to bind successors to an equitable servitude
Implied Equitable Servitude (Common Scheme Doctrine) + Remember Forms of Notice (Tip AIR)
A court may imply a reciprocal negative servitude to hold the unrestricted lot holder to a promise IF the following two elements are met:
1) When the sale begins, the Subdivider had a general scheme of residential development which included the defendant’s lot, and
2) The defendant lot-holder (B) had NOTICE of the promise contained in those prior deeds when it took
Remember: Three forms of notice: (i) Actual, (ii) Inquiry - routine inspection would reveal covenant, and (iii) Record - notice imputed by public documents
Defense to Equitable Servitude
Doctrine of Changed Conditions - Changed circumstances are SO PERVASIVE that the entire area has changed
Land Contract Definition + SOF Requirements
A land contract conveys EQUITABLE TITLE to the buyer, until the buyer secures LEGAL TITLE at the closing
Under SOF, the contract must:
1) be in writing,
2) signed by the party against whom enforcement is sought,
3) describe the land, and
4) be supported by consideration
Land Contract: Exception to the SOF - Doctrine of Part Performance
The doctrine of part performance is satisfied and equity will decree specific performance of an oral contract IF two of the following three elements are met:
1) takes possession,
2) pays all or a significant part of the price, and/or
3) substantial improvements are made
Land Contract: Risk of Loss - Doctrine of Equitable Conversion + Remember Destruction
The buyer owns the land once the contract is signed
Remember: If, in the interim between contract and closing, Blackacre is destroyed through no fault of either party, the BUYER BEARS THE RISK OF LOSS
Land Contract: Two Implied Promises + Remember Circumstances That Render Title Unmarketable + Remember Disclaimer to Failure to Disclose
1) Seller will provide marketable title (free from reasonable doubt), and
2) Seller will not make false statements of material fact
Remember: 3 Circumstances of Unmarketable Title -
1) Adverse Possession,
2) Encumbrances (servitude and mortgages), and
3) Zoning violations
Remember: The seller CANNOT avoid liability for fraud or failure to disclose by including in the contract a general disclaimer of liability (i.e. “property sold as it” or “with all faults”)
Land Contract: Implied Warranty of Fitness or Habitability + Exception
The land contract contains NO IMPLIED WARRANTIES of fitness or habitability, doctrine of caveat emptor
Exception: The implied warranty of fitness and workmanlike construction applies to the SALE OF A NEW HOME by a BUILDER-VENDOR
The Closing: When Does Legal Title Officially Pass From Seller to Buyer? + Tip LEAD + Remember Ambiguous Description
To pass legal title from seller to buyer the deed must be: Lawfully Executed And Delivered
Remember: The description must be clear and unambiguous, still counts if it can be researched (e.g. “all of my land” but NOT “some of my land”)
The Closing: Delivery Requirement + (1) Remember Present Intent Requirement + (2) Remember Rejection + (3) Remember Oral Condition
The delivery requirement is met when the grantor PHYSICALLY or MANUALLY (mail or agent) transfers the deed to the grantee
(1) : THE DEED NEED NOT BE ACTUALLY DELIVERED, the standard is solely of present intent to transfer
(2) : If the recipient expressly rejects the deed, it defeats delivery
(3) If a deed, absolute on its face, is transferred to the grantee with an oral condition, the deed transfers and the CONDITION IS CANCELED
The Closing: Types of Deed + Descriptions + Remember Six Covenants
1) Quit Claim Deed - Makes no covenants for title
2) Special Warranty Deed - Warrants against ALL COVENANTS, but grantor makes promises only on behalf of herself
3) Warranty Deed - Warrants against ALL DEFECTS in title, including grantor’s predecessors. Generally contains all six covenants (see below)
Remember: Six Covenants
(Present Covenants - breached at time deed is delivered)
1) Covenant of SEISIN (grantor is owner),
2) Covenant of RIGHT TO CONVEY (grantor has power to transfer),
3) Covenant AGAINST ENCUMBRANCES
(Future Covenants - breached when grantee is disturbed in possession)
4) Covenant of QUIET ENJOYMENT,
5) Covenant of WARRANTY (Grantor will defend if any superior title claim is asserted), and
6) Covenant for FURTHER ASSURANCES
Recording System: Define Bona Fide Purchaser + Remember AIR
One who buys for substantial value without notice that someone else purchased it first
Remember: Types of Notice - (i) actual (ii) inquiry, or (iii) record
Recording System: How to Prevail in Notice Statute Jurisdiction + Remember Key Language
The last BFP to take wins, regardless if A ultimately records first
Remember: “In good faith” or “without notice” are used in Notice Statutes
Recording System: How to Prevail in Race-Notice Statute + Remember Language
Any BFP who takes AND records first wins
Remember: “in good faith” or “without notice” PLUS “first recorded”
Recording System: Chain of Title - Shelter Rule + Example
One who takes from a BFP will PREVAIL against any entity that the transferor-BFP would have prevailed against
Ex: O to A, no recording, then O to B, a BFP who records. B to C as donee. C will prevail against A.
Recording System: Chain of Title - The Wild Deed + Example
If a deed, entered on the records, has a grantor missing to the chain of title, the deed is “wild” and incapable of giving record notice of its existence
Example: O to A, A does not record, then A to B, B records. Then O to C, a BFP who records. C wins
Recording System: Chain of Title - Estoppel By Deed + Remember Future BFPs
One who conveys realty in which he has NO INTEREST is ESTOPPED from denying the validity of that conveyance if he SUBSEQUENTLY ACQUIRES the title he had previously purported to transfer
Remember: If the original transferor who wrongly transferred, then gains good title, and transfers to a BFP, THAT NEW BFP will have good title and win in a notice statute (last BFP to win) and race-notice if he records first
Mortgages: Creation of a Mortgage Elements
1) A debt, represented by a note, and
2) Voluntary transfer of a security interest (lien) in debtors land
Mortgages: Purchase-Money v. Non-Purchase Money Mortgages
PM: When a debtor takes out a loan to purchase real estate, and uses that same real estate as collateral to lender.
NPM: When a debtor takes out a loan to finance something other than the subject of its lien.
Mortgages: Transfer of Interests - Mortgagee v. Mortgagor
Mortgagee - The mortgage automatically follows a properly transferred note
Mortgagor - If O, our debtor-mortgagor, sells Blackacre, the mortgage remains on the land as long as the mortgage instrument was properly recorded
Mortgages: Who is Personally Liable for the Debt in a Sale of Blackacre? (“Assuming” the Mortgage v. “Subject to” the Mortgage) + Remember Foreclosure
If buyer has “assumed the mortgage,” both O and B are personally liable (B primarily liable, O secondarily liable)
If buyer takes “subject to the mortgage” B assumes NO PERSONAL LIABILITY, only O is liable
Remember: If the mortgage is recorded, it remains on the land and if O does not pay the mortgage may be foreclosed
Mortgages: Foreclosure Proceedings + Remember Less Proceeds on Sale Than Owed v. More Proceeds on Sale Than Owed
If a debtor-mortgagor defaults on a loan, the mortgagee-creditor MUST foreclose by PROPER JUDICIAL PROCEEDING
Less: If the proceeds from sale of Blackacre are LESS than the amount owed, creditor brings DEFICIENCY ACTION against debtor
More: If the proceeds are MORE, any junior creditors will be payed, and lastly to the debtor
Mortgages: Effect of Foreclosure - Junior Interests Effects v. Senior Interests + Example
Foreclosure will terminate interests junior to the mortgage being foreclosed BUT will NOT AFFECT SENIOR INTERESTS
Ex: Blackacre has 3 mortgages in order of seniority. Second mortgage forecloses, ONLY second and third are resolved, first mortgage is not affected because it is a senior interest
Mortgages: Priority on Mortgages - First in Time, First in Right + Remember Purchase-Money Mortgagee
As a creditor, you must record. Until recorded, there is no priority. Once recorded, priority is determined by FIRST-IN-TIME, FIRST-IN-RIGHT
Remember: A purchase-money mortgagee’s priority, if recorded properly, has FIRST PRIORITY in the parcel it financed
Mortgages: Floating Liens + Remember Priority on Future Property
A lender takes as collateral a lien, not only in its debtors PRESENTLY held real estate and FUTURE real estate
Remember: A second mortgagee for a property, if purchase-money mortgagee, gets priority in a future real estate over a floating lien
Mortgages: Redemption + Remember After Foreclosure + Remember Acceleration Clauses + Remember Waiving Right to Redeem
Equitable redemption is universally recognized up to the DATE OF SALE, at any time prior to the foreclosure sale the debtor HAS THE RIGHT to redeem the land and free it of the mortgage
Remember: After a valid foreclosure, the right to equitably redeem is gone
Remember: If a creditor uses an acceleration clause (declared full balance due in event of default), to redeem, debtor must pay off full balance plus accrued interest plus costs
Remember: A debtor/mortgagor MAY NOT waive the right to redeem in the mortgage itself
Zoning: The Variance + Remember What Proponent Must Show to Use Variance
Grants a landowner permission to depart from a zoning stricture
Remember: Proponent must show: (i) undue hardship, and (ii) that the variance won’t diminish neighboring property values
Zoning: Eliminating Nonconforming Use
A once lawful in existence use now determined unlawful by a new zoning ordinance CANNOT be eliminated at once UNLESS just compensation is paid
Zoning: Cumulative v. Noncumulative Zoning
Cumulative: Creates a hierarchy of land uses, where a single-family home is graded highest use followed by “lesser” uses (two-family, then apartment, then factors, etc.), and land zoned for a particular use is ALSO GRANTED for higher uses on the hierarchy
Noncumulative: Land may be used ONLY for the precise purposes for which it is zoned
Condominiums Ownership Interest
Each owns the interior of her individual unit PLUS an UNDIVIDED INTEREST in the exterior and common elements
Condominiums: Homeowners’ Association (HOA) Interests + Remember Major Repairs
A HOA oversees the common elements where the owners share an undivided interest
Remember: The HOA can impose additional one time fees divided by owners
