Property II Flashcards
concurrent ownership
each cotenant has the right to use and possess the entire property
3 types of concurrent ownership
- tenancy in common
- joint tenancy
- tenancy by the entirety
How is a tenancy in common conveyed? (language)
“to A and B”
What is the default type of concurrent ownership?
tenancy in common
Tenancy in Common (what does each tenant have)
each tenant has an undivided, fractional interest; can use entire parcel, but divide proceeds according to proportionate shares; freely alienable, devisable, and descendible
How is a joint tenancy conveyed?
“to A and B as joint tenants with right of survivorship”
Defining factors of joint tenancy (2)
right of survivorship and 4 unities of time must be present
4 Unities
time, title, interest, possession
What is created if one (or more) of the unities isn’t present?
tenancy in common
What type of concurrent ownership is the historical default?
joint tenancy
How can a husband/wife create a joint tenancy with his/her spouse?
Through a straw man; cannot convey “to myself and my wife as joint tenants with RoS” because time and title were missing
Joint Tenancy
not devisable or descendible; can be severed unilaterally when one party transfers her interest; can alienate during lifetime
Why are joint tenancy’s disfavored?
because of unilateral severance
How is a tenancy by the entirety created?
“to A and B as tenants by the entirety”
Tenancy by the Entirety
only for married couples; way to protect assets that’s not a will; undivided right to use and posses, right of survivorship
Difference between tenancy by the entirety and a joint tenancy
one spouse cannot unilaterally destroy the other’s right of survivorship
Sawada
neither spouse has a separate divisible interest in the property that can be conveyed to third parties or reached by creditors
James v. Taylor
if an instrument of conveyance does not show an intent to create a right of survivorship, the instrument cannot create a joint tenancy
Tenhet v. Boswell
a lease does not sever joint tenancy but expires upon the death of the lessor
Title Theory
mortgage destroys unity of time and title, severs joint tenancy
Lien Theory
mortgage does not destroy unities, does not sever joint tenancy (split as to whether mortgage survives death of joint tenant)
Partition
any tenant in common or joint tenant has the right to sue for partition (ends the cotenancy and assets are distributed); can have agreements not to partition if reasonable in duration and purpose (traditionally could not)
Partition by Sale
more common and more efficient, sell the property and divide the proceeds
Factors a party wanting a Partition by Sale must demonstrate
property cannot be conveniently partitioned in kind
the interests of one or more of the parties will be promoted by the sale
the interests of the other parties will not be prejudiced by the sale
Partition by Kind
preferred in theory, each keeps proportional share of the land
Esteves v. Esteves
a cotenant in possession does not owe any rent to a cotenant out of possession, absent an ouster
Ouster
one cotenant in possession refuses to allow another cotenant to occupy the property; becomes an adverse possessor; one who ousts the other is liable to the other for rent
Cotenants Rights: sharing rents and profits
each cotenant is entitled to proportionate share
Cotenants Rights: sharing costs
no reimbursement required on expenses for improvements and repairs, but can receive credit
Implied Warranty of Habitability
requires rental premises be offered and maintained in a physical condition that provides safe, habitable housing for tenants; only applies to residential leases
3 Elements of a WoH Claim
defect must be substantial
landlord must have notice of defective condition
landlord must have been given a reasonable time to repair the defect and not done so
Marital Property
at common law, a woman lost all property rights upon marriage and every conveyance to a married couple was a tenancy by the entirety
Dower Rights
surviving spouse gets a life estate in 1/3 of all the freehold land which was owned by the decedent spouse and inheritable by his issue; cannot be destroyed even upon conveyance to a third party
Separate Property System
during marriage: property is separately owned by the spouse who acquires it; creditors cannot attach to spouse’s property
divorce: equitable distribution
death: forced/elective share
Community Property System
During: owned by both spouses equally; equal, undivided shares; gifts, inheritance, prior owned property all remains separate
Divorce: community property is divided, equal share or equitable distribution factors
Death: devise half, however, the other half belongs to surviving spouse
Traditional Landlord Rights
set rent, gain possession at the end of the term, choose tenants, right of the parties to decide on the extent of landlord services
Immutable Rules
supersede any contrary provisions in the lease, usually to protect vulnerable RESIDENTIAL tenants
Default Rules
fills in gaps parties did not address in the lease; can ignore default rules, but cannot evade immutable rules
Choosing the Tenant
Landlord is free to choose whatever tenant, but may not discriminate based on race, gender, or national origin, but may not advertise in a discriminatory way
FHC v. Roommate.com
the anti-discrimination provisions of the FHA do not apply to roommate selection because of the nature of the roommate relationship
Neithamer v. Brenneman Property Services
Once a plaintiff makes a prima facie showing of discrimination under the FHA, the defendant may provide a nondiscriminatory reason for rejecting the application, but the plaintiff may rebut this by establishing the defendant’s reason is merely pretext.
Proving Discriminatory Intent
- the plaintiff establishes a prima facie case of discrimination
- the burden then shifts to the defendants to prove a legitimate, non-discriminatory reason for his conduct
4 Nonfreehold Estates
- Term of Years (fixed duration)
- Periodic Tenancy (automatically renewed)
- Tenancy at Will (no fixed ending)
- Tenancy at sufferance (wrongful occupation)
Leases and SoF
lease of real property for longer than 1 year cannot be enforced unless it is in writing
Standard Form Leases
tenants are not allowed to negotiate terms
Rent Control
ordinance limits the amount of rent a landlord can charge
Keydata Corp. .v U.S.
a lessor is obligated to provide the lessee with actual possession of the leased premises at the beginning of the term; incoming tenant may sue holdover tenant but not landlord (split as to whether landlord must deliver physical possession)
American Rule (delivering of possession)
lessor only promises that possession of the premises will not be withheld by the lessor or someone with superior title
English Rule (delivering possession)
lessor covenants to deliver actual possession of the premises to the lessee
Transferring the Tenant’s Interest
CL: leasehold interest is freely alienable; contractual restrictions permitted
Majority Rule: where a lease contains an approval clause, the lessor may arbitrarily refuse
Minority Rule: must have commercially reasonable objection
Novation
landlord expressly releases the tenant from future liability
Ernst v. Conditt
one who takes assignment of a leasehold interest is responsible to the lessor under the terms of the lease
Berg v. Wiley
when a lessor feels that the tenant in possession is violating the terms of the lease, the lessor must exercise judicial remedies to retake the property
Sole Discretion Clause
landlord may refuse consent for any reason in his sole discretion
Reasonableness Clause
refuse consent only on a commercially reasonable basis
Silent Consent Clause
no standard in lease; might require landlord’s consent, but contain no standard to guide his decision
Kendall v. Ernest Pestana
A commercial lessor may not unreasonably withhold his consent to an assignment of a lease, with or without a clause requiring landlord’s consent to transfer the lease (minority rule, but is growing)
Factors used to determine reasonableness of landlord withholding consent
- suitability of property for the use
- legality of proposed us
- need for alteration of premises
- nature of occupancy
- the financials of the new lease
Summer v. Kridel
a landlord has a duty to mitigate damages when he seeks to recover rent due from a defaulting tenant
3 Ways to End the Tenancy
- surrender
- abandonment
- eviction
surrender
mutual agreement to terminate the lease early
abandonment
tenant vacates premises and stops paying rent before the lease is up
abandonment options
sue for all rent, terminate the lease, mitigate damages and then sue for ren
eviction
if tenant stops paying rent but remains on the premises, the landlord may retake possesson
constructive eviction
when the landlord so substantially interferes with the tenant’s access, use and enjoyment, or causes or allows conditions that are tantamount to an actual eviction
Must a tenant vacate the premises for constructive eviction?
yes
Remedies for eviction
terminate lease and stop paying rent
Necessary Elements for Constructive Eviction
intentional (actual or inferred) acts or failures to act by the landlord (who has notice or knowledge of the problem) that breach of a duty owed to the tenant
wrongful conduct: act or omission
that substantially interferes with the tenant’s enjoyment of the premises or render the premises unfit for the purpose for which it was leased
the tenant vacates the premises within a reasonable time after the landlord’s action
JMB Properties v. Paolucci
Because Paolucci entered into a new lease and remained on the premises, he failed to surrender the premises within aa reasonable time after the alleged constructive eviction, and thus waived his claim to constructive eviction
Elk Creek Management v. Gilbert
a landlord unlawfully retaliates against a tenant if the landlord terminates a lease because of the tenant’s good faith complaint
In Re Clark
Tenants can receive damages for egregious living conditions
Implied Warranty of Habitability
“do whatever is necessary to put and keep the premises in a fit and habitable condition” and imposes specific duties as well, such as providing running water (including hot water); adequate heating, lighting, and plumbing; trash facilities; and safe and clean common areas; The Revised Uniform Residential Landlord and Tenant Act (2015) extends this list to include: effective waterproofing; control of rodents, bedbugs, and vermin; prevention of exposure to hazardous substances such as lead paint, mold, and radon gas; floors, doors, stairways, etc. in good repair; locks and other security devices in good repair; and provision of safety equipment required by law.
Can the IWoH be waived?
no
Is there a requirement for the tenant to vacate the premises for a IWoH claim?
no requirement to abandon or vacate
Law of Waste
tenant’ implied duty to make repairs
Caveat Emptor
a tenant has a duty to inspect the premises to determine safety and suitability before entering a lease
Remedies for IWoH
withhold rent, repair and deduct, sue for damages, terminate the lease
Percentage Diminution Approach (IWoH)
tenant’s recovery reflects the percentage by which the tenant’s use and enjoyment has been reduced by the uninhabitable conditions
IWoH Majority Rule
only applies to residential leases
Wade v. Jobe
if a landlord breaches the IWoH, the tenant is entitled to a percentage reduction of the rent for the period of the breach
Implied Covenant of Quiet Enjoyment
a promise by the landlord that she would not wrongfully interfere with the tenant’s possession
Fidelity Mutual v. Kaminsky
landlord is not responsible for the actions of third parties only when the landlord does not permit the third party to act
Landlord Responsibility for Actions of Third Party
a landlord is not responsible for the actions of third parties ONLY when the landlord does not permit the third party to act
Is an oral agreement for the sale of an interest in real property enforceable?
no
Purchase Contract
the parties negotiate and sign a written purchase contract, and prepare to consummate the transaction
When is a deed effective?
a deed is only affective when it is delivered AND accepted
Rosengrant v. Rosengrant
did the grantor demonstrate his intent that the grantee receive an immediate interest in the property?
Restatements Approach to Delivery of a Deed
delivery is accomplished when the donor manifests that the document is to be legally operative while the donor is alive
4 Most Common Issues that arise during closing
- Statute of Frauds
- Marketable Title
- Duty to Disclose
- Equitable Conversion
Statue of Frauds
Contract must meet these requirements
- essential terms (identity of the parties, price, and property description)
- writing (formal contract or informal memo)
- signature (must be signed by the parties sought to be bound
Does failure to comply with SoF make the contract void?
No, it simply prevents the contract from being enforced
Doctrine of Part Performance
an oral contract for the sale of real property may be enforced if the buyer
- takes possession
- pays at lease party of the purchase price
- makes improvements to the property
Equitable Estoppel/Hickey v. Green
an oral contract may be enforced if
- one party acts to his detriment in reasonable reliance on another’s oral promise, or
- serious injury would result if enforcement is refused (some courts require a high degree of hardship)
Marketable Title
in every contract for the sale of real property, the seller expressly or impliedly promises that she will deliver marketable/merchantable title (unless the contract specifies otherwise)
Marketable title is the default standard
When is title considered to be marketable?
if a reasonable, prudent purchaser would pay fair market value for the property
Title is unmarketable if:
- the seller’s interest is less than the one she purports to sell
- the seller’s title is subject to an encumbrance (almost any private encumbrance causes title to be unmarketable, but not public ones)
- there is reasonable doubt about 1 or 2
Does existence of zoning ordinances or other public encumbrances render title unmarketable?
NO; however, if there were a violation of a public encumbrance title would be unmarketable
Insurable Title
title insurance company would be willing to insure the property at normal rates
Record Title
title that appears in the public land records; can have record title that is invalid
Lohmeyer v. Bower
purchaser may choose to cancel the sale if the title to the land is unmarketable
When is seller required to produce marketable title?
seller is not required to produce a marketable title until the closing, and once the buyer accepts the deed at closing, she can no longer sue to enforce the seller’s promise to deliver marketable title
Duty to Disclose–Caveat Emptor (CL)
“buyer beware” the seller of real property had no duty to disclose defects to the buyers; buyer had complete responsibility to assess the condition of the premises
Caveat Venditor
let the seller beware; opposite of caveat emptor
When does the seller have a duty to disclose?
in most jurisdictions, the seller of residential property is obligated to disclose defects he knows about that
- materially affect the value of the property, and
- are not known to or readily discoverable by a buyer
Is actual knowledge of the defect required?
actual knowledge of the defect is generally required, whether the seller or realtor should have known about it is inconsequential
Stambovsky v. Ackley
prospective buyer has no duty to disclose facts which materially affect the value of the property
Implied Warranty of Quality/Strawn v. Canuso
developer of newly-constructed residential property impliedly warrants that the property is fit for its intended use
Strawn v. Canuso
seller may be liable even if he has no actual knowledge of defects in the house he sells
Equitable Conversion
Once the parties execute an enforceable contract for the sale and purchase of property, the buyer is regarded as the equitable owner of the property, and the seller acquires the equitable right to be paid the purchase price
