Property Essays

Question 1

Constructive Eviction

Answer 1

Trigger: think failure to keep AC intact

When a landlord substantially interferes with the tenant’s use and enjoyment of their property by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused.

To end the lease, the tenant must show that the landlord breached a duty, which caused the loss of the substantial use and enjoyment of the premises, gave the landlord notice and reasonable opportunity to cure, and vacate the property within a reasonable time.

Temporary or de minimis acts do not generally amount to constructive eviction.

Question 2

Landlord’s Duty to Repair

Answer 2

Under the CL, LL had no implied duty to repair.

However, majority today says LL’s do have an implied duty to repair for residential leases EVEN WHEN THE LANDLORD TRIES TO PLACE THE BURDEN ON THE TENANT.

Courts do not generally apply the LL’s duty to repair to commercial leases because the implied warranty of habitability does not apply to commercial leases.

Question 3

Lease Termination

Answer 3

Termination of a lease occurs automatically upon the expiration of a lease term.

Termination may also occur before the expiration of a lease term when the tenant surrenders the leasehold and the LL accepts the return (e.g. by accepting a key).

When a tenant abandons a leasehold without justification, the LL may treat the abandonment as an offer of surrender and could accept that surrender by retaking the premises.

Question 4

Duty to Mitigate

Answer 4

When a tenant abandons a leasehold, the LL may treat the abandonment as an offer of surrender and accept such surrender, or the LL may attempt to re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency.

The majority of jurisdictions now require a LL to mitigate damages by attempting to re-rent the premises in the event that the tenant abandons and breaches the lease.

The LL must make a good faith attempt to re-rent the property, but may treat the premises as one of his vacant stock.

Question 5

Termination of an Easement through Merger

Answer 5

An easement is terminated if the owner of the dominant estate or servient estate acquires fee simple title to the other estate.

The easement is said to merge into the title.

The merger of property results in the extinguishment of the property right.

Question 6

Easement by Prior Use

Answer 6

If the owner of two parcels of land previously used one parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known, and reasonably necessary to the dominant land’s use and enjoyment.

Ask: Was the use open and obvious? What benefits does the use offer?

Question 7

Future-Advances Mortgage Priority over Lien After Foreclosure

Answer 7

When multiple interests must be paid out of the proceeds of a foreclosure sale, generally, the earliest mortgage placed on the property has priority over other interests.

Obligatory payments under a senior future-advances mortgage paid out after a junior lender remits its loan amount and records its lien have priority over amounts loaned by the junior lender.

**Look for a construction loan for future advance mortgages

Question 8

Joint Tenancy Creation

Answer 8

A joint tenancy exists when at least two people own property with the right of survivorship.

Each joint tenant must have the 4 unities: the right to possess or use the property and equal interests which were created at the same time and the same instrument.

Question 9

Joint Tenancy Severance/Mortgages

Answer 9

The severance of joint tenancy may occur in several ways and results in a tenancy in common.

A joint tenant may grant a mortgage in his joint tenancy interest.

In title theory states, which is the minority, the granting of a mortgage constitutes a transfer of title.

A transfer of title severs the joint theory and converts it into a tenancy in common.

Question 10

Joint Tenancies and Leases

Answer 10

There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest.

Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.

Question 11

Tenancy in Common Rule/Effect of Transfer

Answer 11

A tenancy in common exists when two or more co-owners have an equal right to possess property, but do not have a right of survivorship.

In that case, each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the co-tenant’s interest.

Each tenant can unilaterally transfer, devise, mortgage, or lease his interest to a third party, without affecting the interest of the other tenants.

Question 12

Tenancy in Common/Rental Income

Answer 12

A co-tenant must account to other co-tenants for rent received from third parties, but can deduct operating expenses, including necessary repairs, when calculating net proceeds.

Third-party rents are divided based on the ownership interest of each tenant.

Question 13

Joint Tenancy/Right of Survivorship

Answer 13

At death, a joint tenant’s property passes automatically to the remaining joint tenants due to the right of survivorship.

Question 14

Assignment of Lease

Answer 14

Absent language to the contrary, a lease can be freely assigned.

When a lease prohibits the tenant from assigning the lease, the tenant may nevertheless assign; however, the landlord generally can then terminate the lease for breach of one of its covenants and recover any damages.

When a lease prevents assignment without the permission of the landlord, and the lease is silent as to a standard for exercising that permission, the majority approach imposes a requirement that the landlord may withhold permission only on a reasonable ground in relation to the property being leased and not on a whim or personal prejudice.

The traditional rule is that the landlord may withhold permission at his discretion.

Question 15

Tenancy for Years/Surrender

Answer 15

A tenancy for years is an estate measured by a fixed and ascertainable amount of time.

Termination of a tenancy for years may occur before the expiration of the term, such as when the tenant surrenders the lease.

A tenant surrenders a lease by transferring the lease back to the landlord with the landlord accepting the return.

If the landlord accepts the surrender, the tenant is not obligated for future rent.

Question 16

Zoning Ordinance/Nonconforming Use

Answer 16

When a zoning ordinance is enacted or modified, there are often properties within that zone that do not conform to the requirements (i.e. a nonconforming use).

A zoning ordinance must generally make provision for property with an existing nonconforming use.

Unless the ordinance provides otherwise, the time for testing whether the nonconforming use is protected by a grandfather provision is the date that the zoning ordinance takes effect.

Question 17

Enlarging Nonconforming Use

Answer 17

Generally, a property owner whose nonconforming use has been grandfathered is not entitled to subsequently increase the nonconforming use.

However, the owner may be permitted to increase the frequency of the nonconforming use to to upgrade the means to accomplish the nonconforming use, so long as the nature of the character of the use does not constitute substantial change.

Look for: Enlarging a building that’s a nonconforming use or acquiring adjacent property

Question 18

Disbursement of Obligatory/Optional Funds in a Future-Advances Mortgage

Answer 18

A mortgage is an interest in real property that serves as security for an obligation.

A future-advances mortgage is a mortgage given by a borrower in exchange for the right to receive money from the lender in the future (i.e. a line of credit).

Future-advances mortgages can be obligatory or optional.

Future advances made pursuant to a loan that makes advances conditioned on “satisfactory progress” of the project are optional, not obligatory.

Look for: Home-equity, construction, business, and commercial loans

Question 19

Priority and Future-Advances Mortgages

Answer 19

If there is more than one interest in the property, the basic “first in time, first in right” rule is applied to determine priority.

However, there is an exception for future-advances mortgages.

If the advances under a F-A mortgage are optional, then a subsequent mortgage has priority over amounts that are actually loaned after the future-advances mortgagee has notice of the subsequent mortgage.

The jurisdictions are split as to whether actual notice is required or whether constructive notice is sufficient.

Majority: Actual notice
Minority: Constructive notice

Question 20

Fee Simple Determinable

Answer 20

A fee simple determinable is limited by specific durational language (“so long as” “until).

It terminates automatically upon the happening of the stated condition.

The grantor retains a possibility of reverter.

Remember to ask: Did the grantee even breach the condition?

Question 21

Fee Simple Subject to Condition Subsequent

Answer 21

An FSCS is limited in duration by specific conditional language (“provided that” “but if”).

Upon occurrence of the stated condition, the present fee simple will terminate only if the grantor affirmatively demonstrates an intent to terminate.

Grantor must explicitly retain the right to terminate in the FSCS in the conveyance (depending on whether court may be willing to imply a right to terminate).

Preference for FSCS over FSD.

Remember to ask: Did the grantee even breach the condition?

Question 22

Survivorship Contingency for Contingent Remainders

Answer 22

Majority View: Survivorship contingency applies at the termination of the interests that precede distribution of the remainder. E.g. the remainderman predeceases the life tenant, so the remainderman’s devisees don’t get to take when life tenant dies

Minority View: Survivorship contingency requires the remainderman to only survive the testator, not the life tenant. E.g. The remainderman’s devisees may take even if the remainderman predeceases the life tenant

Question 23

Joint Tenancy vs. Tenancy in Common

Answer 23

Define both

Presumption in favor of tenancy in common, but presumption can be rebutted by language and intent.

Modern trend is to focus on the intent of the parties if language creating the co-tenancy is unclear.

Question 24

Joint Tenancy Severance for Mortgage (Lien theory and Title theory)

Answer 24

A joint tenant may grant a mortgage interest in the joint tenancy property to a creditor.

Majority: Most states apply the lien theory, which states that the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale.

Minority: A minority applies the title theory, which states that the mortgage severs title and the tenancy would be converted into a tenancy in common.

Question 25

Joint Tenancy Severance upon Conveyance

Answer 25

Joint tenants can convey all or part of their individual interests during their lifetimes to a third party, thereby severing the joint tenancy.

A joint tenancy is severed when one of the joint tenants contracts to sell her interest in the property.

Question 26

Bona Fide Purchaser

Answer 26

A bona fide purchaser is a person who paid value for an interest and did not have notice of the prior-in-time interest.

Notice can be actual, by inquiry, or constructive.

Grantees are held to have constructive notice of all prior conveyances that were properly recorded.

Question 27

Equitable Conversion

Answer 27

Under the doctrine of equitable conversion, when one of the contracting parties dies prior to the performance date of the contract, the seller’s interest may be treated as personal property and the buyer’s interest may be treated as a real property interest for purposes of distributing the property pursuant to either’ will.

When the seller has devised his real property interests, the proceeds from the sale of the property under contract are treated as personal property that passes to the devisee of the seller’s personal property.

Question 28

Easement Termination by Abandonment

Answer 28

Easements can terminate by written release, prescription, estoppel, condemnation, and abandonment.

Neither a statement of intent to abandon nor non-use can extinguish an easement absent affirmative conduct.

An easement can only be terminated based on a theory of abandonment if the owner of the easement acts in an affirmative way that clearly shows intent to relinquish the easement right.

Question 29

Wild Deed

Answer 29

A recorded deed that is not within the chain of title is a “wild deed.”

Answer 30

A grantee with inquiry notice cannot prevail against those prior claims. A purchaser is held to know whatever a reasonable inspection of the property would have disclosed. Taking a quitclaim deed does not in itself create inquiry notice of prior claims in most states.