Property - Bar Review

Question 1

Restraint on alienation

Answer 1

Occurs when a grantor restricts the sale of land that is being conveyed. Generally, a restraint is void, and the restrictive line item will be struck from the conveyance. Public policy for restraints based on religion or marriage.

Question 2

Marketable title

Answer 2

Implied in every land sale contract is a warranty that at closing the seller will give the buyer marketable title that is reasonably free from defects (EZAP) regardless of the type of deed contemplated by the contract. It need not be perfect, but it should be free from unreasonable risks of litigation involving property. Purchasers have a duty to report defects to give the seller reasonable time to cure. Marketability challenges must be made before deed transfer, otherwise they will merge with the deed.

Question 3

Tenancy in common

Answer 3

A tenancy in common is the default concurrent estate held with no right of survivorship. Tenants can hold different interests in the property, but each is entitled to possession of the whole. Freely devisable, descendible, and alienable.

Question 4

Co-tenancy repairs

Answer 4

Each co-tenant is responsible for their pro rata share of carrying costs (taxes, mortgage interest, ordinary repairs) based upon the undivided share they hold. A co-tenant that makes repairs is entitled to contribution for reasonable and necessary repairs provided they gave reasonable notice to the other co-tenants.

No right of contribution for improvements, but improving cotenant entitled to full increase or decrease in value upon disposition.

Question 5

Joint tenancy

Answer 5

A joint tenancy is a concurrent estate with a right of survivorshipheld by two or more persons. Requires four unities: 1) time; 2) title; 3) interest; and 4) possession.

Question 6

Joint tenancy severance

Answer 6

When one joint tenant unilaterally transfers their ownership interest, the new tenant takes possession of a tenancy in common. The remaining interest holders continue as joint tenants. Severance can occur through sale, conveyance, partition, or mortgage in a title theory state. Doctrine of equitable conversion will sever at formation of a valid contract.

Question 7

Tenancy by the entirety

Answer 7

A tenancy by the entirety is a joint tenancy held by a married couple with the right of survivorship. It is only severable on death, divorce, a creditor of both spouses, or by mutual agreement. Neither spouse alone can convey or encumber a tenancy by the entirety.

Question 8

Legal possession

Answer 8

Under the American view, the landlord only has the duty to deliver legal possession, not actual possession. The English rule requires delivery of actual possession.

Question 9

Leaseholds

Answer 9

A leasehold provides the tenant with a present possessory interest in real property.

Question 10

Tenancy for years

Answer 10

A leasehold estate for a fixed period of time is known as a tenancy for years. This leasehold automatically terminates at the end of a lease period. A lease longer than one year requires a writing per the statute of frauds.

Question 11

Periodic tenancy

Answer 11

A tenancy that continues for a specified time until terminated by proper notice is a periodic tenancy. Can be created by express agreement, by implication if rent is paid at specific periods, or by law. Requires notice of a full period, except for a year-to-year tenant who only requires six-months’ notice.

Question 12

Tenancy at will

Answer 12

A tenancy at will is an ongoing leasehold which will continue until terminated by either the tenant or the landlord, or upon death or attempted transfer.

Question 13

Tenancy at sufferance

Answer 13

A tenancy at sufferance occurs when a tenant has wrongfully held over beyond the expiration of the lease.

Question 14

Holdover tenant

Answer 14

A holdover tenant is one that remains in possession of property despite the expiration of their lease. If the landlord allows them to remain on the property and accepts rent, the tenant becomes a month-to-month periodic tenant.

Question 15

Tenant duties

Answer 15

A tenant’s duties include payment of rent, not to commit waste, and not to use the premises for an illegal purpose. A landlord can terminate the lease or seek injunctive relief in the event of illegal use by a tenant.

Question 16

Rental fees (cotenancy)

Answer 16

Rental fees earned from third parties must be shared with all joint tenant and tenant in common owners.

Question 17

Ouster

Answer 17

A tenant in common or joint tenant who is denied access to their property has been subjected to ouster. A tenant in common cannot adversely possess an interest in a tenancy in common absent an ouster.

Question 18

Subleases

Answer 18

A sublease is a transfer of less than the full amount of the lease term/property to another. A sublessee is only in privity with the sublessor by contract and is not personally liable to the landlord for rent or for the performance of any covenants in the main lease unless the sublessee expressly assumes the covenants or maintains privity of estate. Someone who leases cannot sublease for longer than their own lease, or they risk being ejected.

Question 19

Implied warranty of habitability

Answer 19

Implied in every residential (not commercial) lease, requires that the landlord provide a place to live that is suited for human habitation, including heat, running water, and sewage disposal. If breached, the tenant may move out and terminate the lease, withhold or reduce rent, repair and offset rent, or remain and sue for damages. This warranty is not waivable by the tenant.

WOPT - Withold, Offset/repair, Possession continued, Terminate and vacate

Question 20

Constructive eviction

Answer 20

A constructive eviction can occur as a result of the landlord’s breach of the implied covenant of quiet enjoyment if the landlord substantially interferes with the tenants use and enjoyment of the premises by their actions or failure to act to resolve a problem. The breach must cause a substantial loss of use and enjoyment of the premises, and the tenant must give the landlord notice and opportunity to cure. Once the tenant vacates, the tenant may terminate the lease and seek damages.

SING - Substantial Interference, Notice, Goodbye
Partial constructive - stay and abate
Total constructive - stay and pay no rent

Question 21

Self-help

Answer 21

Self-help is the actions taken by a landlord to eject a tenant from their property. Most states do not allow self-help. Instead, the landlord must properly serve the tenant with notice of a lawsuit and obtain a judgement of possession from the court. (e.g., a landlord changing the locks if the tenant does not pay constitutes impermissible self-help).

Question 22

Assignment of a lease

Answer 22

Assignment occurs when a tenant transfers all of their remaining interest to a third party. Leases are freely assignable unless prohibited in the lease agreement. The assignee is in privity of estate with the landlord for rent and all other covenants that run with the land. The assignor remains liable under privity of contract.

Question 23

Assignment clauses

Answer 23

Anti-assignment clause are valid but narrowly construed against the landlord. If they learn of an assignment and do not object, the clause is deemed waived. If the clause is violated, the landlord accepts the assignment by accepting rent from the new tenant.

Question 24

Real covenants

Answer 24

A real covenant is a nonpossessory interest in land, obtained by contract and recorded to establish that it runs with the land. This contract is a formal obligation of the burdened party to either do or refrain from doing something on the land. Breaches of real covenants are remedied with money damages.

WITH VERNE

Question 25

Enforcing a benefit of a real covenant

Answer 25

Enforcement of a real covenant requires a writing that satisfies the statute of frauds (horizontal privity), intent for the covenant to run with the land, vertical privity, and the covenant must touch and concern the land. WITH VERNE

Question 26

Enforcing the burden of a real covenant

Answer 26

All of the above plus it requires horizontal privity and notice. Notice may be actual, inquiry, or constructive.

Question 27

Vertical privity

Answer 27

A transfer of rights or burdens between a party that enters a covenant and their successors in interest.

Question 28

Horizontal privity

Answer 28

The original parties that enter a real covenant must have privity of estate, that is, a grantor-grantee relationship. Neighbors do not have privity of estate and cannot enforce the burden of a real covenant.

Question 29

Covenant termination

Answer 29

Merger, Estoppel, Condemnation, Prescription, Release (written) (ME CPR)

Question 30

Covenant defenses

Answer 30

Changed conditions, Unclean hands, Estoppel, Abandonment, Acquiescence (CUEAA)

Question 31

Waste

Answer 31

Affirmative waste is voluntary or intentional, permissive waste is through neglect, and ameliorative waste can be effected via improvements to the land that change the character or value of the land, or that do not benefit the landowners. All vested future interests can sue to enforce to covenant not to create waste.

Question 32

Equitable servitudes

Answer 32

An equitable servitude is a non-possessory agreement regarding how land can be used, and is enforced by an injunction. Enforcement of the benefit requires a writing, intent by the parties to enter the agreement, and it must touch and concern the land. To enforce a burden, all of the above plus notice are required. No horizontal or vertical privity is required. TWIN

Question 33

Easements

Answer 33

Grant of a nonpossessory property interest entltling the dominant estate to use or enjoy the servient's land. These agreements must be in writing to satisfy the statute of frauds, excepting easements implied by necessity, prior use, and prescription. PING - Prescription, Implied, Necessity, Grant

Question 34

Easement in gross

Answer 34

An easement in gross provides use or benefit to a particular group or person, not necessarily attributable to an adjoining parcel.

Question 35

Easement appurtenant

Answer 35

Appurtenant easements benefit any successive owner’s enjoyment and use of the land and are attached to the land. Burdening easements pass to subsequent owners provided the new owner has notice.

Question 36

Easement creation

Answer 36

An easement can be created expressly by grant, or by implication through necessity, prior use, or prescription. PING - Prescription, Implied, Necessity, Grant

Question 37

Easement by implication

Answer 37

An easement will be implied when a single tract of land is divided and the previous owner established use. The easement must affect the value of the land, the prior owner must intend it to run with the land, and continued use must be forseeable such that it would unduly burden the dominant tenement if it were terminated.

Question 38

Easement by necessity

Answer 38

Created when a single owner subdivides property and access would be impossible without the easement. Once the necessity is ended, the easement is rescinded.

Question 39

Easement by prescription

Answer 39

Created when the possessor’s use is continuous, hostile, open, notorious, and actual, for the statutory period. Need not be exclusive use. CHOS(E)

Question 40

Termination of an easement

Answer 40

Estoppel, Necessity ended, Destruction, Condemnation, Release (written), Abandonment, Merger, Prescription (ENDCRAMP)

Question 41

Fixtures

Answer 41

A fixture is a chattel attached to the land, thereby converting it to real property. Fixtures may not be removed if it would cause voluntary waste unless the trade fixture exception applies.

Question 42

Transfer of an easement

Answer 42

An easement appurtenant is transferred when encumbered property is transferred to a successor. The burden and benefit convey as well, subject to a recording statute.

Question 43

Affirmative/negative easement

Answer 43

An affirmative easement allows the holder to affirmatively use another’s land, whereas a negative easement allows the holder to compel the owner not to use the land in a particular way (never implied - SALS - Support, Air, Light, Stream).

Question 44

Easement relocation

Answer 44

An easement appurtenant cannot be relocated once its location has been established, regardless of the justification. (e.g., dominant tenement wants to build a structure elsewhere on the property and move the right-of-way easement to accommodate it).

Question 45

Easement maintenance

Answer 45

The dominant tenement is required to make any necessary repairs to the easement. If the land is damaged by the holder, they are responsible for the repairs.

Question 46

Scope of easement

Answer 46

The dominant tenement may not unreasonably surcharge the easement by exceeding the scope contemplated by the parties at formation of the easement.

Question 47

Profit a prendre

Answer 47

An agreement that entitles its holder to enter the servient estate to extract resources from the contents or surface of the soil, such as minerals or timber. Statute of frauds applies (same as easements).

Question 48

License

Answer 48

A license grants its holder permission to enter another’s land for some specified narrow purpose. It need not be in writing, is nontransferable, and freely revocable unless estoppel bars revocability (coupled with an interest). Once revoked, the former licensed-holder becomes a trespasser.

Question 49

Recording statutes

Answer 49

A recording statue allows for documentation of transfer of real property ownership and provides guidance for priority of ownership. These statues are critical when determining the ownership of a parcel of property that has been transferred to multiple parties. There are three types of recording statutes.

Question 50

Race

Answer 50

Whoever records first is protected.

Question 51

Notice

Answer 51

Any subsequent bona fide purchaser that provides notice of ownership first will own the property when a previous purchaser failed to record.

Question 52

Race-notice

Answer 52

A subsequent bona fide purchaser prevails over a prior grantee if they did not know of the earlier transfer and their deed was recorded before the first purchaser’s deed.

Question 53

Bona fide purchaser

Answer 53

A purchaser of real property for value and without notice takes free from any prior competing claims.

Question 54

Shelter rule

Answer 54

A donee or grantee who takes from a bona fide purchaser shall prevail against competing claims against which the bona fide purchaser would have prevailed.

Question 55

Notice to a purchaser

Answer 55

There are three types of notice: Actual, inquiry, or constructive (record) notice. Actual refers to personal knowledge from any source, most frequently due to personal inspection of the property. Inquiry notice is present where a reasonable person would have grounds to inquire as to competing claims. Constructive notice is present where a prior grantee properly recorded their deed such that a title search would have revealed competing claims.

Question 56

Doctrine of merger

Answer 56

Terms in a land sale contract are no longer enforceable against the parties once the deed transfers as the merge with the deed.

Question 57

Warranties of title

Answer 57

A [general] warranty deed includes six covenants of title (SER-QWA): Seisin – the grantor warrants that they own the estate they are conveying. Encumbrances (covenant against) – Grantor promises there are no non-possessory interest, servitudes, or mortgages on the land, other than those previously disclosed. If an encumbrance is found after the sale, damages are equal to the diminution of value relative to the land in an unencumbered state. Right to convey – Grantor promises that they have authority to convey the property. Quiet enjoyment – Grantee’s possession will not be disturbed by competing claims of a third party. Warranty – Promise to defend the grantee if lawful claims of title asserted by others arise, but does not cover unlawful claims. Assurances (further) – Grantor’s promise to correct any future problems necessary to quiet the grantee’s title.

Question 58

Quitclaim deed

Answer 58

Deed which offers no warrantees or assurances, and only passes whatever rights the grantor has, even if none at all.

Question 59

Special warranty deed

Answer 59

Covenants against title defects created by the grantor but not against defects created by prior owners.

Question 60

Adverse possession

Answer 60

A way for a possessor of land to obtain good title where their possession is continuous, hostile, open, notorious, actual, and exclusive for the statutory period. The adverse possessor must pay property taxes. CHOSE

Question 61

Future estates

Answer 61

An interest in property where the holder of the interest will enjoy the right to own and possess the property at a future date. Future interest in the grantor is a reversion, possibility of reverter, or right of reentry, and a future interest in a third party is a shifting executory interest.

Question 62

Defeasible fees

Answer 62

Conditioned conveyance of real property requiring express language reserving a future interest in the grantor or third party where violation of its terms terminates the conveyance.

Question 63

Fee simple determinable

Answer 63

Present possessory estate defined by clear durational language upon which the events defined thereunder automatically cause the estate to terminate and vest in the grantor. Freely devisable, descendible, and alienable.

Question 64

Fee simple subject to a condition subsequent

Answer 64

Present possessory estate defined by clear conditional language which reserves a right of reentry upon which the estate will vest in the grantor upon occurrence of the condition and exercise of the right of reentry. Freely devisable, descendible, and alienable.

Question 65

Fee simple subject to an executory interest

Answer 65

Present possessory estate which may be cut short by the occurrence of a condition, the occurrence of which automatically vests ownership in a third party. Always follows a defeasible fee.

Question 66

Life estate

Answer 66

Present possessory estate which persists for the life of some individual. Per autre vie if the measuring life is someone other than the grantee. Freely alienable, but not devisable or descendible. Life tenant must not create waste, and this may be enforced by any vested future interest holder. Future interest is a remainder.

Question 67

Life tenant duties

Answer 67

Life tenant must not create waste, which includes the failure to maintain the property or pay mortgage interest and property taxes, although payment of taxes is not required if the land is vacant and unproductive. Any vested future interest holder can bring suit to enforce. Mortgage principal payments must be paid by the remainderman.

Question 68

Remainder

Answer 68

Future interest held by third party which becomes possessory upon the natural termination of the preceding estate, normally a life estate. Freely devisable, descendible, and alienable.

Question 69

Vested remainder

Answer 69

Future interest in an ascertainable person in which no conditions precedent must occur before it may become possessory. May be subject to open where vested in a class of persons which has not yet closed.

Question 70

Contingent remainder

Answer 70

A potential future interest in land that is dependent upon the occurrence of a later event or satisfaction of some condition precedent

Question 71

Executory interest

Answer 71

Future interest in land that cuts short a prior estate, usually a defeasible fee. Shifting if out of a third party, springing out of the grantor.

Question 72

Rule against perpetuities

Answer 72

Prevents dead-hand control of property. Provides that no interest is good unless it must vest, if at all, not later than 21 years in being following the termination of some life in being at creation of the interest. Applies to contingent remainders, executory interest, certain vested remainder subject to open, and rights of first refusal. Does not apply to inter-charity gifts.

Question 73

Life estate mineral rights

Answer 73

Life tenant must account to future vested interest holders regarding removal of minerals.

Question 74

Subject to mortgage

Answer 74

A grantee of a mortgaged property takes subject to the mortgage, meaning the mortgagee can foreclose and the grantee can sue the original mortgagor to recover. If the grantee assumes the mortgage, he also becomes personally liable. If a property is foreclosed upon by a junior mortgagee, the property is taken by the buyer subject to any senior mortgages, where any junior mortgages are extinguished by the foreclosure.

Question 75

Foreclosure

Answer 75

Priority of a mortgage is determined according to order in which it was given by the mortgagor to the mortgagee. Junior mortgagees are extinguished upon a foreclosure and paid according to priority order, whereas senior mortgagees remain subject to. Deficiency judgement may be obtained against a mortgagor for any deficiency, holding the mortgagor personally liable.

Question 76

Deed conveyance

Answer 76

Description adequate, present intent to transfer, grantor’s signature (D-PIGS), and acceptance. Physical delivery creates a rebuttable presumption of delivery.

Question 77

Fair Housing Act

Answer 77

It is unlawful to refuse to sell or rent due to race, religion, sex, familial status, or ancestry. The Act also prohibits discriminatory terms of sale or advertisement. Exceptions exist for religious organizations, private clubs, and apartment buildings with four or fewer units when the owner occupies one of the units. Here, the owner can discriminate but cannot advertise preference.

Question 78

Land sale contracts

Answer 78

Requires a writing satisfying the statute of frauds, including subject matter (adequate description), price, identity if parties, and signature of the party to be charged (SQIPS).

Question 79

Zoning

Answer 79

State may exercise police power to dictate land use. Variance appropriate where it would be an undue burden on the landowner and would not harm surrounding property values. Conditional use permit where the use is valid under the zoning law but creates some sort of risk or harm to surrounding properties. Prior uses must be amortized. No unconstitutional exactions which constitute a conditional taking (GEREP – Government, Exactions, Reasonable, Extent and nature, Proportional)

Question 80

Non-conforming use

Answer 80

Allows a landowner to continue use despite change in zoning. Requires that prior use be legal, no break in continuous use, and use not substantially increased.

Question 81

Variance

Answer 81

Appropriate where it would constitute an undue hardship on the owner and not contrary to public safety or property values. E.g., setbacks, 3-acre parcel split in half, zoning requires 2-acre minimum to build residential, can apply for variance to construct a home.

Question 82

Spot zoning

Answer 82

Zoning confers a special benefit onto small parcel regardless of public interest is generally invalid.

Question 83

Dedication

Answer 83

Donation of land or creation of easement for public use. Express or implied, typically associated with housing subdivision, where a map or plan has been approved and recorded. Also called a common plan or scheme.

Question 84

Lateral/subjacent support

Answer 84

Landowners have absolute right. In natural condition, defendant will be strictly liable. If improved and would not have occurred but for the weight of the improvement, must satisfy negligence standard to recover unless the land would have subsided even without the improvements.

Question 85

Expectation damages

Answer 85

1. Put the party in position absent breach; 2. FUCC - Foreseeable, Unavoidable, Certain, Causal