Property (from Grossman + outline) Flashcards
For the sale of land, there are 2 transactions: (1) the real estate kx and (2) the___
deed
the real estate kx is made to confirm the ____ that the parties will sell the land and the terms
This real estate kx must be in _____ due to the ____
intent
writing
SOF
EXCEPTION for the sale of land where you DO NOT need a writing. This is the concept of part performance.
Part performance is found when the buyer gives SOME (like down payment) of the purchase price, made IMPROVEMENTS on land or take ____ of property
possession
a real estate kx must have (1) price, (2) parties, (3) basic description of the terms, and (4) signed by the party ___
to be charged
under the doctrine of equitable conversion, this takes place when you SIGN the real estate kx. The ROL transfers to the ___ when the parties sign the real estate kx. The buyer now has equitable title
BUYER
The buyer bears the ROL once he signs the real estate kx due to the rule of____
Buyer also has ___ interest in the property
equitable conversion
equitble
in the real estate kx, there is an implied promise to convey _______ title which means it is free of any ____
marketable
encumbrances
Examples of encumbrances that would make title unmarketable include easements, liens, zoning _____, morgages,
VIOLATIONS (not simply the presence of an ordinance)
in a real estate kx, time is generally _______unless time is STATED in kx
NOT of the essence
on the day of closing, the real estate kx MERGERS into the deed. Therefore, you can only sue on the ___
deed
Once you sign the deed, the terms of the real estate kx do not exist on its own anymore
k
in a land sale kx, ____ is an equitable remedy the court can order to make a person finish the kx.
___is granted when an item of the kx is UNIQUE. And land is always considered unique
specific performance
the seller MUST disclose physical defects to the buyer that seller KNOWS about, generally ones that cannot be seen by buyer. Look for stuff like safety. BUT if defects are ____ to buyer then don’t have to disclose
known
equitable conversion deals with _____
ROL
what makes a title unmarketable?
DEVA
Defect in chain of title
Encumbrances (mortgage or easement not mentioned in the kx)
Violation of a zoning ordinance
Title acquired by adverse possession
Does a violation of a housing or building code render title unmarketable?
NO
An executed deed means that the deed ___ the parties, has words of ____, is signed by the seller, and describes hte land
identifies
grant
A quitclaim deed gives ______
no warranties
a warranty deed gives 6 covenants:
PRESENT
pReSNt covenatns of Right to convey, _____, No encumrances,
seisen
a warranty deed gives future covenatns FEW
Further assurances
quiet Enjoyment
___
warranty
if the mortgagor gives away her interest “subject to” the mortgage, the _____ mortgagor is liable on the mortgage
original
if the new transferee “____” the interest, both the _____ and the ___ are liable
assumes
ORIGINAL mortgagor
NEW TRANSFEREE
remember hte new party ASSUMES liability as well
if there is a NOVATION, then only the ____ is liable
new transferee
a due on sale clause (which state that if the mortgagor transfers the interest in land without the mortgagee’s consent, the full balance under the loan is due IMMEDIATELY) are ____
enforceable
in a majority of states, they follow the _____ where the mortgage only has a lien on the land
LIEN THEORY
some states follow the ______ where ____ is transferred tot eh bank right away upon loaning the money
title theory
A bank can begin foreclosure proceedings upon ___
default
under the equity of redemption, this allowd a debtor to ____ the property by paying ______ due under the mortgage agreement prior to foreclosure
This right cannot be waived in the mortgage or deed of trust but may be waived later for ___
redeem
EVERYTHING
consideration
the PURCHASE MONEY MORTGAGE is the most important mortgage
this is THE LOAN you used to actually purchase the property. Paid back FIRST
an acceleration clause states that the entiere balance is due if a payment is missed
this is _____
enforceable
Redemption after foreclosure - this is a stautory right. THis allows the debtor to get the property _______ after the foreclosure sale by paying the _______ within a period of time
BACK
full purchase price
The equitable right of redemption can ______ be waived
NEVER
elements of adverse possession:
Cookies
Often
Are
Hidden
- continuous
- Open visible and notirious
- Actual (and exclusive) possession
- Hostile
continuous means _____ for the amount of time the statute says
uninterrupted
note that just because the use is seasonal, this doesn’t mean it can’t be continuous
seasonal = fine
off one year = clock starts ___
over
two ways to prove the elements of open, visible, and notorious for adverse possession:
(1) showing that the actual owner KNREW you were there and did not agree to it, or
(2) your conduct is outlandishly obvious, and the owner _____
should have known
ALERT: If you tell other people the true owner actualyl owned the land, you _____ claim this as adverely possessed
CANNOT
for actual and exclusive possession, for the clock to start ticking, you need to ACTUALLY PHYSICALLY trespass, and the owner cannot be possessing the property _____
WITH you
hostile means you don’t have the true owner’s permission to be there
yeah duh
Constructive adverse possession is simple. It is just when a psychopath enters a small portoin of land in good faith and with a _____ deed which says they owned the ____ parcel
fucked up
whole
Elements of constructive adverse possession:
(1) you enter the land under color of title (with a deed that appears to give title btu doesn’t because it’s _____
(2) you enter in good faith thinking your fake title actually gives you full deed to this land
(3) you enter _________ (even if ______)
(4) the owner is not there
BOOM
(1) defective
(3) a portion of the land (even if it’s a small part)
Adverse possession is all about controlling the WHOLE part of the land, whereas constructive AP, you only need to control PART Of the land so long as you _____ you owned the WHOLE thing… you get the whole thing
BELIEVED
once the adverse possession period ends, the adverse possesor has superior title over the true owner. But they still have to bring a “quiet title” action to establish they are the true owner.
if you don’t “quiet title” the property will NOT be _____ and will be under ____
marketable
threat of litigatoin
for taking in adverse possession, the two parties must be in privity. this usually can be achieved by:
blood
contract
deed, OR
___
will
For Adverse possession, the clock does NOT start running against an owner who is insane, in prison, or under 18 when the adverse possessor ____
starts their posssession
if two or more crackheads adversely possess the land TOGETHER, the acquire the title as ___
tenants in common
adverse possession can ONLY take the rights the owner themselves had
if you adversely possess a life estate , you get a life estate measured by the____
previous owner’s life
three things for a transfer of deed to be effective
Incredibly
Delicious
Apples
INTENT
DELIVERY
acceptance
deed must have PRESENT INTENT aka the power of ___
now
do you HAVE TO record a deed for it to be a valid delivery?
not necessarily
just ask - WAS THIS A PRESENT INTENT DELIVERY
will a deed with an oral condition that isn’t in the deed itself be valid?
YES just without the offending condition. GOOD DELIVERY
can you give property to a person who is dead?
NO. This is VOID and title remains with grantor
can you give title to a corporation that is not get legally formed?
NO
PSA: IF YOU DO NOT EXIST, WE ARE NOT GIVING YOU LAND.
Can the grantee give back a deed that was successfully delivered?
no
estoppel by deed (sometimes referred to as ____) ensures that if a grantor purports to convey title that he does not actually hold, and he subsequently acquires title to the property, it will automatially make the prior benefit conveyed to the grantee ____
after acquired title
valid
is a subsequent BFP required to search title?
no….
check
to be a subsequent BFP, a buyer must NOT have had ____, actual or constructive, of the original grantee
notice
if the original grantee properly recorded, the subsequent buyer would have been on notice and therefore cannot be a valid subsequent __
BFP
When the son purported to convey the vacant land to his friend by warranty deed with no exceptions, he did not yet have title. HOWEVER, the friend was a BFP who paid value for the warranty deed, and properly recorded it ___ of the mother’s interest
Therefore, applying the doctrine of _____, when the mother died and the son’s interest vested, his prior conveuance to the friend (who had no notice and paid value) will automatially become effective nad the friend will prevail
without notice
estoppel by deed
Courts are split as to whether an ___ to purchase during a lease period may be assigned separately from the tenatn’s interest int he leasehold itself
option
The most common type of leasehold is the estate for ____, which is an estate that lasts for a fixed period of time. The lease does not have to be a certain amount of time
years
an option to purchase property may be included within a tenant’s lease as long as the option is excercised ______
during the term of hte lease
RAP does NOT apply to an ___ to purchase land when it is contained within a lease of that property and may only be exercised during the term of the lease
option
the key issue is whether a leasehold estate can assign its _____ to purchase while keeping the remaining terms of the lease
option
a real covenant is just a ____ promise to DO or NOT to do something
written
covenants can be affirmative (to do something) or _____ (to refrain from doing something)
negative
there are 5 basic requirements to see whether a covenants will RUN with the land and bind _____
future landowners
When you loan a buyer money to buy a house (you don’t even have to be an ‘official lender’ by the way, it can be a loan between two family members)… that purchase-money loan gets super-priority over all other non-purchase money mortgages and claims, EVEN if the non-purchase money mortgage or liens were recorded first.
COVENANTS
The covenants of quiet enjoyment and covenants of warranty are NOT breached by a WRONGFUL claim or eviction by a third party.
HE’S A FOWL
IN THE WRONG
THAT IS HOW YOU WILL REMEMBER THIS
A WRONGFOWL DEED WILL NOT FORCE THE GRANTOR TO DEFEND
YOU GOTTA PAY FOR THAT YOURSELF
The date of filing determines their priority rank. How easy is that!
who wins?
the PMM is paid first
Imagine a construction company is building a hotel. The mortgagor gives the construction company $10 million up front and then another guaranteed $5 million when they are 50% done.
This is a mandatory payment with a mandatory triggering condition (the property being 50% done)
When the payments are mandatory like this… all the new payments have the same priority as the original mortgage.
in an OPTIONAL future advance scenario
If the payments are optional on the other hand… like if the bank said “we might pay you $5 million if we like how the construction looks halfway through” … then the junior lien has priority over the later payments.
installment kx
When does the seller have to convey marketable title?
Not until the LAST payment
What is an absolute deed as security (i.e. an equitable mortgage?)
Goat has poor credit… so he can’t take out a mortgage on the land. He desperately needs money to keep it going.
So Goat asks to borrow money from Rainbow Brown in exchange for a security interest in the dodgeball gym Goat owns.
Rainbow agrees… but instead of executing a note or a mortgage deed… Rainbow simply asked for the deed itself with a writing which said “after the loan is paid back, Goat can get the deed back for the dodgeball gym.”
he moment Goat does not pay, he can simply avoid foreclosure altogether and take the property back, stripping Goat of any rights he would have under a normal mortgage.
Goat is “selling him the deed” and leasing it… but in reality Goat is a disguised borrower. If Goat defaults on his “rent” payments, which are really loan payments, then Rainbow, who holds legal title, can instantly terminate the tenancy and option rights without having to go through foreclosure and keep the property.
This is a disguised mortgage and it is used to fuck people over who are desperate or unaware of the law.
A _____s when the title is given to a third party (a trustee) to hold as security for a loan between a borrower and a lender.
3 parties
deed of trust
Basically, if the borrower fucks up and defaults on the loan… the Trustee can sell the property and apply the proceeds to the debt.
There are two competing theories regarding classification of mortgages: the title theory and the lien theory.
In a ____ theory state (minority of states), a mortgage granted by one joint tenant severs the joint tenancy and turns it into a ____
title
tenancy in common
In a ___-theory state (the majority of states are lien theory states), if one joint tenant takes out a mortgage it is only considered a ___ and will ____ the joint tenancy.
lien
lien
NOT SEVER
Memory Trick: Remember a tiny little piece of paper leaning against a house will not break it apart.
Alright… so can the debtor waive the right to redeem when they originally sign up for a mortgage!?
hell NO
Several renegade Goats coined this mnemonic in the July 2023 cycle and it has never left our group.
Mangoes for Nutrition stands for the idea that a Mortgage follows a Note transfer.
note v. mortgage
A promissory note is just an IOU… it says “hey, I promise to pay Mr. Bank back their money. I won’t let you down Mr. Bank.”
The mortgage allows for the bank to reach out and grab our land if we break our promise and don’t pay Mr. Bank back. It’s a document that says “if you don’t pay back your IOU… we are seizing your land and selling it”
Mangoes for Nutrition
When the investor got the fucking note, he also got the fucking mortgage.
someone assumes he. mortgage:
Assume. Both (Liable)
Anxious Beavers
