Property Law Flashcards
Who remains liable on a lease when the tenant assigns their interest in the lease?
Both the tenant and the assignee are liable for lease breaches (ex. failing to pay rent)
What is estoppel by deed?
a doctrine that prevents/estops someone from contradicting what they stated in a deed about who owns a certain property
What is a license?
a license is a non-possessory property interest to enter and use someone else’s land
When can a license be revoked?
A license is freely revocable by the grantor any time unless the licensee detrimentally relied on it, or the license was accompanied by a property interest
When does a license terminate/die?
If the grantor revokes it, if the grantor or licensee dies, or if the land is sold to someone new
What is the implied covenant of marketable title?
A covenant where the seller promises that the title is free of claims/disputes, and free of threats of litigation
When does the implied covenant of marketable title exist?
It inherently exists as a burden on every seller in every land sale contract
How does the merger doctrine effect marketable title?
The doctrine states that any obligations/duties in a land sale contract merger into the deed and are extinguished at closing
What are damages provisions?
Land sale contracts can have damages provisions that state how much a party can recover if one of them breaches
Are damages provisions allowed in land sale contracts?
Yes, so long as the damage $ is reasonable, typically 15% of the purchase price
What is a bona fide purchaser?
a purchaser who validly buys the property without notice of other parties’ claims
What is earnest money?
a deposit paid by a buyer in a land sale that shows the buyer’s good faith intent to buy the land
How does earnest money affect damages in a land sale?
If the buyer has made an earnest payment, then no other damages are available in the event of the buyer’s breach.
What is a deed in lieu of foreclosure?
A deed where the borrower conveys all interest in the property to the lender to satisfy the defaulting loan and avoid foreclosure
what is a profit a prendre?
a nonpossessory property interest in land that gives the profit holder the right to enter another’s land to remove specific natural resources
what is a public nuisance?
an interference with someone’s ability to use/enjoy a public right (health, safety, etc.)
What is a private nuisance?
an interference with someone’s ability to enjoy their own property
What is the standard for private nuisance?
That the interference be substantial and unreasonable
What is the standard for public nuisance?
That the interference harm the plaintiff to a greater degree than the general public
Can a mortgage borrower transfer the property?
Yes, the mortgagee/borrower is free to transfer the property so long as the mortgage doesn’t state otherwise?
Who remains liable for a mortgage default if the land is transferred?
Depends on whether the grantee/new owner accepted (i.e., assumed) the mortgage.
Who is liable for a mortgage breach if the grantee/new owner assumed/accepted the mortgage?
If the grantee took the property and assumed the mortgage, both he and the original mortgagor/borrower remain liable for breach, but the latter only as a surety/backup
Who is liable if the grantee did not accept/assume the mortgage and instead took the property “subject to” the mortgage?
If the grantee took “subject to” the mortgage, meaning they didn’t agree to take on the mortgage, then the original grantor remains solely liable.
If the grantee “assumed” the mortgage, they become primarily liable, although the original grantor is still secondarily liable.
What is a tenancy at will?
a leasehold that has no specific time frame in which the tenant and landlord agree to just let the tenant keep renting for however long
How is a tenancy at will terminated?
Can be terminated by either landlord or tenant at any time
What is the right of subjacent support?
The right of a landowner to not have underground activity/mining affect the above-ground
When can someone violate the right of subjacent support?
A third party underground/miner is strictly liable for a failure to support the land and buildings that existed at the time of the conveyance
What is lapse in relation to property conveyance via a will?
lapse invalidates a conveyance via will if the beneficiary dies before the testator
What is ademption?
a doctrine that invalidates a conveyance via will if bequeathed property was no longer owned by the testator
What is abatement?
a doctrine that reduces the size/value of will devises that cannot be satisfied by the assets remaining after the testator’s debts are paid
What is exoneration?
a doctrine that allows a will beneficiary to use the estate’s remaining assets to pay off an encumbrance on the property
Are wild crops considered part of the property in a land sale?
If the crops are wild and uncultivated, they are considered part of the land and pass automatically to the new owner.
Are cultivated crops considered part of the land?
Crops that’re cultivated/purposefully grown are considered the landowner’s personal property but run with the land in the event of a sale. However, the original owner still has a right to re-enter and harvest them if they’re ripe for harvest at the time of the land sale
Can a deed be delivered via a third party?
Yes. If the third party’s transfer of the deed to the grantee is conditioned on the grantor’s death, then the grantor’s delivery of the deed must evidence the intent to make a present gift to be effective.
How can a deed be delivered?
A deed is presumed delivered when it’s been recorded
When is a deed accepted?
The grantee is presumed to accept the deed if the deed is beneficial to them?
What are the required elements of a deed?
1) Must be in writing,
2) identify both parties,
3) signed by grantor,
4) adequate description of the property’s essential elements
5) words of transfer
What is the rule of convenience?
a doctrine affecting rule against perpetuities and class gifts. The rule closes the class once any class member has is entitled to immediate possession
what is a due-on-sale clause?
A clause that can appear in mortgages stating that if the borrower sells/gives the property to someone else, the lender can demand full payment of the loan
What property conveyances cannot be subject to due-on-sale clauses?
Devise, descent, or transfer to joint tenant upon death
Transfer to spouse or child
Transfer to ex-spouse in divorce
Transfer to borrower’s living trust
Creation of subordinate lien without occupancy rights
Granting leasehold interest of less than 3 years without option to purchase
What is right of first refusal?
a type of options contract that allows its holder the first opportunity to buy property if it ever goes up for sale
When is a right of first refusal valid?
If it complies with the statute of frauds and has reasonable terms. Reasonableness is determined by balancing the utility of the purpose served by this restraint against the likely harm that would result from enforcing it.
What is the lien theory in regards to mortgages?
A doctrine followed by most states holding that a mortgage as a lien that won’t destroy a joint tenancy.
What is the title theory in regard to mortgages?
a mortgage being put onto land does sever the joint tenancy and turns it into a tenancy in common. This applies even if the other join tenants didn’t consent to the mortgage.
What does the doctrine of merger say about deeds and land sales?
Once a land sale has happened, the sale contract and the deed merge together, and the terms of the deed control.
What are the elements of a valid convenant?
TWIP
Touch and concerns the land
writing: must be in writing
intent: must be intent to touch and concern the land
Privity: there must be vertical privity if the covenant is benefitting the party; horizontal and vertical privity if it’s burdening the party
What is the extra element present for covenants burdening the landowner?
Notice. There must be constructive or actual notice given to the burdened person that the covenant exists.
What are the 3 types of tenancies?
joint tenancy
tenancy in common
tenancy in the entirety
what are the 4 types of rental tenancies?
tenancy for years
tenancy at will
periodic tenancy
tenancy in sufferance
what is the doctrine of equitable conversion?
Arises in situations where a land sale contract is silent as to risk of loss.
Doctrine holds that the risk of loss is placed on the party with equitable title at the time the property is destroyed.
Buyer gets equitable title when the contract is formed and becomes enforceable, i.e., the time between the execution of the contract and the closing
What are the 2 exceptions to a tenant’s duty to pay rent?
1) destruction of the property (not the fault of the tenant)
2) material breach of the lease by the landlord (covenant of quiet enjoyment, warranty of habitability)
What are the duties of a life tenant?
Duty to repair property
Duty to avoid waste (not taking care of property or ameliorative waste)
Duty to pay current charges (mortgages, taxes) up to the financial benefits they’ve received from the property
(if the life tenant hasn’t received any financial benefits from property, they don’t have a duty to pay the charges)
What is subrogation?
An exception to the typical encumbrance priority rule (first to file)
Subrogation allows a third party to take the place of a senior mortgage in the priority line if that third party fully pays what the senior mortgage.
This doesn’t destroy junior interests, but it lets third parties hop the priority line.
What happens if a dominant estate excessively increases the scope/intensity of use of an easement they have over someone else’s land?
Generally, an easement holder can increase the scope, intensity, and frequency they use the easement, so long as it doesn’t unreasonably interfere with or damage the use or enjoyment of the servient estate.
How do you create an easement by implication?
1) The dominant/servient estates used to be under common ownership
2) the common owner used the land as if there was an easement (continuous, known, and apparent use)
3) At the time the land was divided, the easement still existed
4) The easement is reasonably necessary for the dominant estate to be used and enjoyed
What are liquidated damages?
Damages designed to compensate a party in the event that the other party breaches the land sale contract
When are liquidated damages recoverable?
Only if they reasonably compensated the non-breaching party (typically 10-15% of the purchase price)
Liquidated damages greater than 15%, even if expressly agreed to by the parties, aren’t enforceable as they’re unreasonable.
Can a tenant remove a fixture in the leased property?
Only if there’s an express agreement giving the tenant the right to remove the fixture, or if 1) the leased property can be restored to its former condition and 2) the removal and restoration are done within a reasonable time frame
What is a condition a precedent in property law?
An uncertain future event that, by the terms of the contract, must occur in order for contractual performance to be due
What happens if a condition precedent doesn’t occur?
Generally, that excuses the performance as the triggering future event didn’t occur.
However, the nonoccurrence of the future event can be excused if the benefiting party waives it via words or conduct.
Such a waiver cannot be later retracted if the other party detrimentally relied on it.
Are future interests such as remainders and executory interests transferable?
Yes. A holder of a future interest is free to transfer that interest both inter vivos or via will/intestacy
What’s a key difference between a typical contract and a transfer of land via deed?
A transfer of land deed doesn’t require consideration.
Do co-tenants (joint tenants or tenants in common) owe any duties to one another?
Cotenants owe each other a fiduciary duty when they (1) jointly purchase property in reliance on each other or
(2) acquire their interests at the same time from a common source. This duty arises when the property is sold at a foreclosure sale and purchased by a cotenant, allowing the other cotenants to reacquire their interests by paying their share of the purchase price.
Can a senior mortgage modify its terms and still keep its senior place in line?
Yes. Modifying a mortgage doesn’t forfeit priority unless the modification prejudices a junior mortgage. In which case, the senior mortgage’s modified section is subordinated to the prejudiced junior.
When does a mortgage modification prejudice a junior mortgage?
If the modification affects the ability of the junior mortgage won’t get paid
What are the rights of cotenants?
Right to possess and enjoy the whole land
receive pro rata shares of rent from 3rd parties
Receive proportionate shares of income from removal of natural resources
What are the duties of cotenants?
Pay proportionate shares of expenses that may give rise to lien (eg, mortgage, property tax)]
Contribute to repair or improvement costs, but only when there’s an express agreement
If a tenant breaches the lease, can the landlord recover as damages the remaining rent to be paid on the lease?
No. The majority rule is that the landlord is not entitled to damages for future rents that would have been due under the lease. The landlord is only entitled to rental payments as they become due.
What is the after acquired title doctrine?
The doctrine applies when a grantor, not yet having title to the property, conveys the property to someone else via warranty deed.
Once the grantor does receive title to the land, it automatically passes to the person they conveyed it to earlier.
In effect, the grantor is selling/giving away their future right to the land.
Does the seller of residential property have to disclose defects in the home to sellers?
Yes. Under common law, seller of residential properties must disclose known, material defects to the property that the buyer couldn’t reasonably discover on their own (ex. damage to the foundation)
What is the doctrine of worthier title and when does it apply?
The doctrine applies when a grantor makes an inter vivos conveyance to someone and, in that same instrument, also conveys a future interest in that land to the grantor’s heirs (ex. leaving Bob your land in your will in fee simple, and in that same will, giving Bob’s kids a future interest in the land)
In such a case, the future interest dies, and the grantor is deemed to have a reversion
In a tenancy in common, for what activities/deals involving the land does a co-tenant need the other co-tenant’s consent?
1) a conveyance of the entirety of the land
2) binding that co-tenant’s interests in the land in a contract with a third party (ex. signing a boundary agreement with the neighbor)
3) obtaining exclusive ownership over some or all of the property
in a tenancy in common, for what activities/deals involving the land does a co-tenant not need the other co-tenant’s consent?
1) a co-tenant conveying/leasing their own interest in the land
2) possessing and enjoying the entirety of the land
3) extracting minerals from the co-owned property, unless the extraction commits waste
What are the 3 present covenants of title that every land seller owes the buyer?
1) covenant of seisin: an assurance that the seller is the rightful owner of the property being sold
2) covenant against encumbrances: a promise that seller is legally entitled to transfer the property to the buyer
3) covenant of the right to convey: a promise that the land is owned free and clear of encumbrances like liens, taxes, mortgages, taxes, leases, easements, etc.
What are the 3 future covenants of title that every land seller owes the buyer?
1) covenant of warranty: a promise that the seller/grantor will defend against any title claims from third parties and pay any losses the buyer incurs as a result of any third-party claim
2) covenant of future assurances: a promise that the seller/grantor will do whatever is reasonably necessary help the grantee perfect the title should the need arise
3) covenant of quiet enjoyment: an assurance that the buyer’s right to possession will not be impacted by a third party’s legal claim to the title
what is an easement in gross?
a personal easement where a specific person/entity gains the right to use another party’s property in a defined way.
can a residential lease place the burden of repair for the rented property on the tenant?
No, any provision doing so in a residential least is void
in a nonresidential lease, can a residential lease place the burden of repair for the rented property on the tenant?
Yes. If the lease contains language putting the burden on the tenant, then the tenant will be liable to damages unless they’re caused by the landlord.
If the damage is substantial/structural and wasn’t caused by the tenant, then the tenant’s duty to repair is narrowly read
what is a wild deed?
A deed that’s improperly recorded and therefore it is not within the chain of title
how does a wild deed affect who has legal title to the property?
Depends on whether it’s a race or notice jurisdiction.
In a notice jurisdiction, the first to buy without notice (bona fide purchaser) has title. This is typically the non-wild deed because a wild deed is almost impossible to notice since it isn’t recorded
In a race jurisdiction, the first to record takes the title, unless that first recorder is a buyer springing from the tree of the wild deed. In that case, they can’t record first until the wild deed is cured and recorded.
what is estoppel by deed?
when someone sells the title to property they don’t actually own, but later on they do become the legitimate owner, they’re no longer allowed to assert legitimate ownership, because they sold it earlier
what is the after acquired title doctrine?
when someone sells the title to property they don’t actually own, but later on they do become the legitimate owner, title to the property automatically vests in the transferee they sold it too earlier.
does a life tenant’s duty to make reasonable repairs to the property require them to repair damages done by a third-party?
(ex. neighbor drunkenly drives his truck through the side of the house)
No. While a life tenant does have a duty to make reasonable repairs to the property, if the damage is caused by a third-party tortfeasor, they aren’t required to repair those damages
what are the 3 types of deeds?
1) general warranty deed
2) quitclaim deed
3) special warranty deed
what does a special warranty deed guarantee/promise?
It warrants/promises that there are no defects arising from the time the grantor had title.
what does a general warranty deed guarantee/promise?
It promises that the grantor has all 6 covenants, including that there are no defects/encumbrances arising from before the grantor had title or from when the grantor had title
what does a quitclaim deed guarantee/promise?
Nothing.
if a land seller breaches their requirement to deliver marketable title, what remedies are available to the buyer?
Buyer is excused from performing on the contract (buying the property) and sue the seller for breach of contract.
The breach of contract action could involve expectation damages (difference between the contract price and the market value on the date of performance) or specific performance if monetary damages are inadequate
If the buyer has already put money down on the property, they’re entitled to get that money back.
