Property Law

Question 1

What is a divisible interest?

Answer 1

Capable of passing by will, by devise.

Question 2

What does intestate mean?

Answer 2

Death without will.
Intestacy is the probate court mechanism for distributing assets subject to set rules

If an interest is descendible, it can pass through statute of intestacy

Question 3

What does alienability mean?

Answer 3

Transferability inter vivos (between living people)

Question 4

What are the present possessory interests? (6)

Answer 4

1. Fee simple absolute
2. Fee tail
3. Defeasible fees (fee simple determinable, fee simple subject to condition subsequent, fee simple subject to executory limitation)

Question 5

What is fee simple absolute? What are some of its features?

Answer 5

Absolute ownership of potentially infinite duration.

Freely divisible - can leave it in your will.
It is descendible - will pass through intestacy laws
Alienable - transferable during owner’s life span
No accompanying future interest (nobody is waiting)

Question 6

What is an heir apparent?

Answer 6

A prospective future heir, since after all a living person is incapable of having property heirs.

Question 7

What is a fee tail?

Answer 7

Ex. “To A and the heirs of his body”

Historical vestige, virtually abolished today. Meant to keep land with lineal family.

Attempted creation of fee tail today creates fee simple absolute.

When it was recognized, created future interest. In grantor, a reversion. In third person, the remainder.

Question 8

What are the three defeasible fees?

Answer 8

1. Fee simple determinable
2. Fee simple subject to condition subsequent
3. Fee simple with executory limitation

All carry the risk of forfeiture should some condition manifest. Fee simples with a catch.

Question 9

What does defeasible mean?

Answer 9

Capable of forfeiture. To suffer defeasance is to suffer forfeiture. Thus, defeasible fees carry the possibility of suffering a forfeiture if some condition manifests.

Question 10

What is fee simple determinable, and its features/requirements?

Answer 10

Ex. “To A for so long as” “during” “until”
Ex. “So long as X remains a lawyer,” “during tenure of Obama administration,” “until return of prayer in public schools.”

Features:

1. If stated condition is violated, forfeiture is automatic.
2. Divisible, descendible, alienable - but always subject to the condition.
3. One future interest: possibility of reverter in the grantor (Frank Sinatra Didn’t Prefer Orville Redenbacher)

Requirements:
Clear durational language.

Question 11

What is fee simple subject to condition subsequent, and what are some of its features and requirements?

Answer 11

Ex. “To A, but if X event occurs, grantor reserves the right to reenter and take”

Features:
Grantor has right of entry, synonymous with power of termination. This doesn’t change things automatically.
Can be cut short at grantor’s option if stated condition occurs (not automatic, at grantor prerogative)

Requirements:
Clear durational language
Right to reenter and retake in event of breach (clear and explicit)

Question 12

What is fee simple subject to executory limitation, and what are its features and requirements?

Answer 12

Ex. “To A, but if X event occurs, then to B.”
“To B, but if he ever plays music on the premises, then to M.”

Features:
If a particular condition is violated, interest is automatically forfeited in favor of third party
The third party has a shifting executory interest.
The grantee has a fee simple subject to third party’s shifting executory interest.

Uses the same language as a fee simple determinable (for so long as/until) or fee simple subject to condition subsequent (provided that/but if) but rather than automatically reverting to grantor or giving grantor right to terminate, it automatically divests in favor of a third party upon the happening of a stated event.

Question 13

What are rules of construction applicable to defeasible fees?

Answer 13

1. Words of mere hope, desire, intent, expectation are insufficient to encumber a defeasible fee. Words of hope will confer a fee simple absolute (for the purpose of, with the expectation that, with the hope that)
2. Courts require clear durational language (so long as, but if, until, unless)
3. Absolute restraints on alienation are void, unless it is linked to a reasonable, time-limited purpose (creates fee simple absolute if void)

Question 14

When will a restraint on alienation be upheld?

Answer 14

When it is linked to a (1) reasonable, (2) time-limited purpose. Otherwise, repugnant to courts as matter of public policy.

Ex. “O conveys to A so long as she never attempts to sell.” This is an absolute restraint on alienability, will be voided, confer fee simple absolute. O has nothing.

Ex. “O conveys until A so long as she does not attempt to sell until 2016, when clouds on the title will be resolved.” This is reasonable and time-limited, will not be void. This would create a fee simple determinable to A, with a possibility of reverter for O.

Question 15

What is a life estate?

Answer 15

An estate that must be measured in explicit lifetime terms, and never in terms of years.

Features:
Grantee is the life tenant.
Grantor has a reversion, meaning at end of grantee’s life, the property is returned to grantor or grantor’s heirs
Can be measured by third party’s lifetime (life estate per autre vie)

Ex. “O conveys to A for life.”
NOT ex.: “O to A for 50 years” - that is a term of years.

Question 16

What is a life estate per autre vie?

Answer 16

A life estate measured by the life of someone other than the grantee.
Grantee holds life estate per autre vie.
Grantor/grantor’s heirs have reverter at end of third party’s life.

Ex. “From O to A for the life of B.”
Here, A has the life estate per autre vie, measured in B’s life span. O has a reversion. At the end of B’s life, it reverts back to O or O’s heirs.

Question 17

What rules must life tenants follow?

Answer 17

1. Entitled to all ordinary uses and profits from the land.
2. Life tenant must not commit waste (must not harm future interest holders)

If life tenant takes out a mortgage and doesn’t involve remaindermen, the remaindermen will not be held liable for any remaining balance.

Question 18

What are the three types of waste under the waste doctrine?

Answer 18

1. Voluntary destruction [overt act]
2. Permissive waste [neglect]
3. Ameliorative waste [enhance property value]

Question 19

What is voluntary destruction, for the purposes of the waste doctrine?

Answer 19

Overt conduct or destruction that causes a drop in the property value.

Ex. cracking windows with eggs, exploiting natural resources (timber, mineral, oil, e.g.) so long as exception does not apply

Question 20

What are the four exceptions to the waste doctrine rule that a life tenant is not allowed to consume or exploit natural resources?

Answer 20

PURGE [you can purge the land if:]

1. Prior Use (if prior to grant, land was used for exploitation, unless otherwise agreed, limited to Open Mines doctrine)
2. Repairs (may consume natural resources to conduct maintenance, ex. timber for front facade)
3. Grant (may exploit if granted the right to)
4. Exploitation (land suitable only to exploitation, e.g. quarry)

Question 21

What is the Open Mines doctrine?

Answer 21

Life tenant may continue to mine if it was already mine before life estate began, but is limited to the mines already open.

Question 22

What is permissive waste, for the purposes of the waste doctrine?

Answer 22

When land negligently falls into disrepair during a life tenant’s tenure.

Standard: life tenant must simply maintain the premises in reasonably good repair.

Must pay ordinary taxes when profits are being generated on the land.
If profits are not being generated from the land, life tenant must pay ordinary taxes w/r/t premises’ fair rental value.

Question 23

What is ameliorative waste, for the purposes of the waste doctrine?

Answer 23

During their life tenure, a life tenant may not engage in acts that will enhance the property value unless all future interest holders are known and consulted.

Honors the sentimental value of property.

Question 24

What are the future interests accompanying a life estate?

Answer 24

If held by grantor, a reversion.

If held by a third party, remainder.

Question 25

What are the future interests capable of creation in a grantor (3)?

Answer 25

1. Possibility of reverter (only fee simple determinables)
2. Right of entry/power of termination (only applies to fee simple subject to condition subsequent)
3. Reversion (default interest)

Question 26

What is a reversion?

Answer 26

The default future interest in a grantor.

Whenever the grantor carves out an estate of lesser duration or magnitude than they started with, other than fee simple determinable or fee simple subject to condition subsequent. The residue left in the grantor, which arises by operation of law, is a reversion.

Whenever a holder of fee simple absolute carves out an estate of lesser than full transfer, there will be a reversion.

Reversion is transferable, devisable, and descendible. The holder of a reersion may sue a possessory owner for waste.

Question 27

What is the future interest capable of creation in a transferee (future interest has been created in a third party)?

Answer 27

Remainder. Remainder is a future interest created in a grantee, never a grantor.

This transferee is a third party, capable of becoming possessory after the preceding estate of fixed duration, when in the same conveyance as the original transfer. Remainders may be vested or contingent.

Features:

1. Always accompanies preceding estate of fixed duration (usually life estate or term of years) (ex. To A for life, and then to B - goes to B)
2. Patient - waits for present possessory interest to run its course
3. Never follows a defeasible fee. Can’t cut short or divest a present transferee (if third party at end of defeasible fee, will be executory interest)

Question 28

What is a vested remainder?

Answer 28

A remainder will be vested when it is created in (1) an already ascertained taker and (2) has not been subjected to a condition precedent.

Note: vested remainders are inheritable! (Ex. “remainder to my son’s children.” If son has B and G, and boy dies but boy has kids, the kids can get that remainder interest)

Question 29

What is a contingent remainder?

Answer 29

A remainder will be contingent when it is created in (1) a not-yet-ascertained taker, and/or (2) subjected to as-yet-unmet condition precedent.

Question 30

What is an as-yet-unborn/unascertained taker, for purposes of a contingent remainder?

Answer 30

As-yet-unborn/unascertained contingent remainder:

Ex. To A for life, then to B and B’s heirs. If B is alive, B’s heirs are unknowable.
Ex. To A for life, then to A’s widow - if husband is still alive, the widow cannot be identified (widow is a technical term)

Ex. To A for life, then those children of B who outlive A. If A is alive, remainder is not yet known.

Question 31

What is an as-yet-unmet condition precedent, for the purposes of a contingent remainder?

Answer 31

As-yet-unmet condition precedent:
Condition appears before language creating the remainder, or is woven into language creating the grant to the remainder.

Ex. To A for life (present possessory life estate), then if B graduates college (condition precedent), to B. If A is alive and B is only in high school, B has a contingent remainder subject to an as-yet-unmet condition precedent.

Question 32

If a future interest has been created in someone other than the grantor, what are the three types of interests it could be?

Answer 32

1. Vested remainder
2. Contingent remainder
3. Executory interest

Question 33

What are the three types of vested remainders?

Answer 33

1. Indefeasibly vested remainder
2. Vested remainder subject to complete defeasance
3. Vested remainder subject to open

Question 34

What is an indefeasibly vested remainder?

Answer 34

The holder of this remainder is certain to acquire in the future with no strings attached.

Ex. To A for life, remainder to B. A is alive. B is alive. A has a life estate. B has an indefeasibly vested remainder. B is known. There are no conditions to his taking.

If an indefeasibly vested remainder predeceases the person they were waiting on, at common law B’s future interest passes by will or intestacy.

Rule Against Perpetuities does not apply.

Question 35

What is a vested remainder subject to complete defeasance (or to complete divestment aka)?

Answer 35

A future interest where the taking is not subject to a condition precedent and the remainder is known. However, the right to possession could be cut short by a condition subsequent.

This is a cloud that stays over the taker even after gaining lawful possession.

Rule Against Perpetuities does not apply.

Question 36

How can one tell whether a right to possession is subject to a condition subsequent, thereby making it a vested remainder subject to complete defeasance?

Answer 36

The comma rule: when conditional language follows language that, taken alone and set off by commas, would create a vested remainder, then it is a condition subsequent and there is a vested remainder subject to complete defeasance.

Ex. “O conveys to A for life, remainder to B, provided however if B dies under the age of 25, to C.”
B has the vested remainder subject to complete defeasance, because if the condition subsequent does not occur (doesn’t live to 25), C’s heirs take. O has reversion.

COMPARE contingent remainders, when conditional language appears before language creating remainder, there is a condition precedent:
Ex. “O conveys to A for life, and if B has reached 25, to B.”
Ex. If Remainder Man has not yet gained entry.

Question 37

What is a vested remainder subject to open?

Answer 37

When the remainder is vested in a group, a whole class/category of takers, at least one of whom is qualified to take.

Each class member’s share is subject to partial diminution because additional members can still join.

A class is either open or closed. It is open if others can still join. It is closed when no others can join.

If class members predecease prior life tenant, in the absence of a statute, their share goes to devisees/heirs.

Rule Against Perpetuities may apply.

Question 38

How can one determine whether a class is open or closed, for the purposes of a vested remainder subject to open, a future interest in transferee

Answer 38

Go to common law rule of convenience. According to that, the class closes whenever ANY member can demand possession.

Ex. When heirs can’t demand possession until death of life tenant, when life tenant dies can demand possession.

Exception: The womb option. Child in the womb of someone at the time the class closes can still collect.

Question 39

What are the three historical doctrines that limit eligibility for contingent remainders?

Answer 39

1. Rule of destructibility
2. Rule in Shelley’s Case
3. Doctrine of worthier title

Question 40

What is the rule of destructibility?

Answer 40

If an as-yet-unfulfilled condition precedent in a contingent remainder is still unfulfilled at the time the preceding estate ended, the contingent remainder is destroyed.

Ex. To A for life, and if B reaches age 21 then B. A dies, leaving behind 19 year old B. B’s contingent remainder is destroyed, because prerequisite wasn’t satisfied when preceding life estate ended. Reverts to O/O’s heir in fee simple absolute.

Only invoke if the call of question asks “historically at common law” - today, the destructibility rule has been abolished. If B was under 21, the property would go to O or O’s heirs subject to B’s springing executory interest (and B could take at age 21).

Question 41

What is the Rule in Shelley’s Case?

Answer 41

It merged present and future interests, if those interests were held by the same grantee/heirs. It was a rule of law, which led to strict applicability even in the face of contrary grantor intent. Only apply if call of question asks “historically at common law”

Today, if O conveyed to A for life and then to A’s heirs on A’s death, A would have a life estate and A’s heirs would have a contingent remainder, reversion to O.

Question 42

What is the doctrine of worthier title?

Answer 42

If a grantor, who is alive, nonetheless tries to create a future interest in as-yet-unascertainable heirs, the doctrine voids the future interest and gives reversion to grantor.
Ex. “O to A for life, and then to O’s heirs (A is alive),

This is a rule of construction that applied historically. Today, the doctrine is subject to grantor intent.

Today, ask: did the grantor truly intend to create a future interest for his as-yet-unascertainable heirs? If so, we will honor that (ex. “O hereby declares that O shall not obtain a reversion”)

Question 43

What is an executory interest?

Answer 43

Kanye at the Grammys.

Future interest created in a transferee (third party), which is not a remainder and either cuts short some interest in another person (shifting) or in grantor/heirs (springing). It either divests the preceding interests (shifting), or follows a gap in possession (springing).

Rule Against Perpetuities applies.

Question 44

What is a shifting executory interest?

Answer 44

A future interest that always follows a defeasible fee. It cuts short someone other than the grantor, when a condition comes into being. The executory interest can be triggered either by B’s conduct or by current landowner’s conduct.

Subject to the Rule Against Perpetuities; many of them violate it (any executory interest without time limit within which it must vest violates RAP).

Ex. “To A and her heirs (fee simple), but if B returns from Canada sometime next year (defeasible), to B and his heirs.”
B has a shifting executory interest. A has fee simple subject to B’s shifting executory interest. Does not violate RAP.

Ex. “To A, but if A uses the land for nonresidential purposes at any time during the next 20 years, then to B.”

Question 45

What is a springing executory interest?

Answer 45

A future interest that cuts the grantor’s own interest short. It has the possibility to limit grantor’s otherwise limitless time upon the fruition of a condition.

Subject to the Rule Against Perpetuities.

Ex. O conveys to A, if and when he marries. A unmarried. A has springing executory interest. O has fee simple subject to A’s springing executory interest.
Ex. O conveys to A, if and when he becomes lawyer.

Question 46

What is the Rule Against Perpetuities?

Answer 46

Certain kinds of future interest are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.

Question 47

What is the four step technique for assessing potential RAP problems?

Answer 47

1. What type of future interest was created by the conveyance?
2. What are the conditions precedent to the vesting of the suspect future interest? (What has to happen?)
3. Find a measuring life (whose death is relevant to the conveyance?)
4. Will we know, with certainty, within 21 years of our measuring life, if our future interest holder(s) can or cannot take? However wild the option, and subject to the Fertile Octegenarian Rule?
   If yes, conveyance is good.
   If not, future interest is void.

Question 48

What future interests are subject to the Rule Against Perpetuities?

Answer 48

YES:

1. Contingent remainders
2. Executory interests
3. Certain vested remainders subject to open.

NO:

1. Any future interest in the grantor
2. To indefeasibly vested remainders
3. Vested remainders subject t complete defeasance

Question 49

When will a gift to an open class always violate the Rule Against Perpetuities?

Answer 49

When the gift is conditioned on the members surviving to an age beyond 21.

“Bad as to one, bad as to all.” - You must show that the condition precedent to every class member’s taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely w/r/t ANY member of class, entire class gift is void.

Ex. “To A for life, then to such of A’s children as live to attain the age of 30.” A has 2 children, B & C. B is 35 and C is 40. A is alive. Violates, b/c A could have a child right before death.

Question 50

When will a shifting executory interest always violate the Rule Against Perpetuities?

Answer 50

When the executory interest has no limit in the time within which it must vest.

Ex. To A and his heirs, so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs.” A has fee simple subject to executory limitation, B has shifting executory interest. A might abide with the condition within lifetime, could be breached centuries later. Too remote.

Exception: charity-to-charity exception.

Question 51

What is the charity-to-charity exception of the Rule Against Perpetuities?

Answer 51

A gift from one charity will not violate RAP, simply to encourage people to be charity.

NOTE: this exception only applies if it goes from charity to charity.

Ex. “To Red Cross, so long as premises are used for Red Cross pruposes, and if they cease to be so used, then to the YMCA.” Would otherwise violate, shifting executory interest with no time limit, but is OK here.

Question 52

What is the “wait and see” or “second look” doctrine within the Rule Against Purposes?

Answer 52

Majority doctrine - apply unless explicitly told to apply common law RAP.

Under this reform effort, validity of any suspect future interest is determined on the basis of the facts as they now exist, at the end of a measuring life.

1. Wait until end of relevant measuring life
2. Does it pass scrutiny, based on the facts as they are?

Question 53

What is USRAP?

Answer 53

Uniform Statutory Rules Against Perpetuity.

Codifies the common law RAP and provides for an alternative 90-year vesting period (any suspect future interest must be certain to vest within 90 years of the date of its creation).

Question 54

What is the “cy pres” doctrine?

Answer 54

Embraced by both “wait and see” majority courts, as well as USRAP (but not by common law).

If a given disposition violates RAP, court can reform it in such a way so that it matches grantor intent while complying with RAP.

Automatically reduces any offensive age contingency to 21.

Question 55

What are possible formations for a concurrent estate? (3)

Answer 55

1. Joint tenancy
2. Tenancy by entirety
3. Tenancy in common

Question 56

What are the distinguishing characteristics of a joint tenancy?

Answer 56

Two or more own, with the right of survivorship.
Alienable, but not divisible or descendable.
Upon death, immediately to other tenants.

Note: personal liability stays separate, even after death. So if there’s a property lien on one JT who dies, the other JT takes the property and isn’t subject to that lien.

Question 57

What is the right of survivorship?

Answer 57

In the context of joint tenancy, when one joint tenant dies, his share automatically goes to the surviving other joint tenants.

Question 58

What are the requirements for creating a joint tenancy?

Answer 58

The Four Unities (T-TIP). Joint tenants must take their interests
T - at the same time
T - by the same title (same instrument, i.e. deed)
I - with identical interests (shares) AND
P - right to possess the whole

In addition:

1. Must clearly express right of survivorship, as joint tenancies are disfavored (avoids intestacy in Probate Ct.)
2. Use of a straw (if you own and wish to create, must first convey to 3d party who conveys back as joint tenancy)

Question 59

How may joint tenancy be severed?

Answer 59

SPAM:

1. Severance and sale
2. Partition (voluntary, partition in kind, forced sale)
3. (Severance) And Mortgage

Question 60

What is severance and sale?

Answer 60

When one joint tenant sells or transfers her interest during her lifetime. She may do so secretly, without knowledge/consent of others. One joint tenant’s sale severs the joint tenancy as to the seller’s interest, disrupting the four unities.

Joint tenancy remains intact between the remaining members, but not to those who completed sale.
Note: buyer becomes a tenant in common.

Question 61

How does the doctrine of equitable conversion impact the severance and sale method of ending a joint tenancy?

Answer 61

In equity, a joint tenant’s mere act to enter into a contract for the sale of her share severs the joint tenancy at that moment.

Question 62

What are the three variations on partition as a method of severing a joint tenancy?

Answer 62

1. Voluntary agreement
2. Partition in kind
3. Forced sale

Question 63

How can parties sever a joint tenancy through voluntary agreement via partition?

Answer 63

If parties decide, can amicably and privately come to terms.

Question 64

What is partition in kind?

Answer 64

If parties are unable to agree on how to sever the joint tenancy, this is a court action that divides up the parcel among tenants.

Really only works when the parcel is subject to division, e.g., farm or vineyard.

Question 65

What is a forced sale, as a means of severing a joint tenancy through partition?

Answer 65

A court action used to sever joint tenancy when the parties are unable to agree, and when the court cannot properly divide the parcel among the remaining tenants (e.g. it doesn’t lend itself to being parceled out, a single building).

The parcel is sold, with proceeds divided proportionately.

Question 66

What is the Severance And Mortgage method of severing a joint tenancy?

Answer 66

Minority: One joint tenant’s execution of a mortgage or lien on her share severs the joint tenancy as to that now encumbered share.

In the majority, one tenant getting out a mortgage wouldn’t end the joint tenancy at all. Majority: lien theory of mortgage - joint tenant’s execution of a mortgage on his interest only creates a lien.

Minority: title theory of mortgage - execution of mortgage severs the title.

Question 67

What is a tenancy by entirety?

Answer 67

1. Between married partners (21 states recognize)
2. Right of survivorship
3. Can’t just be engaged
4. In states that apply it, applies presumptively between married partners unless otherwise stated

Question 68

What protections does a tenancy by entirety create for its parties?

Answer 68

1. Creditors of only one spouse can’t touch tenancy.
2. Neither tenant acting alone can unilaterally transfer to a third party; can’t unilaterally defeat right of survivorship.

Question 69

What are major features of the tenancy in common?

Answer 69

1. Two or more own
2. No right of survivorship
3. Each co-tenant owns individual part
4. Each co-tenant has right to possess the whole
5. Each interest is divisible, descendible, alienable.

Question 70

What are the rights of possession in a tenancy in common?

Answer 70

Each co-tenant is entitled to possess the whole. If one wrongfully excludes another from possession of the whole or any part, has committed wrongful ouster.

Ex. G contributed 90% of purchase price, Marcia 10%; G can’t relegate M to only 10% of premises.

Question 71

What rights do co-tenants have to collect rent in a tenancy in common?

Answer 71

1. Absent ouster, a co-tenant in exclusive possession is not liable to the others for rent. A co-tenant who finds himself in the exclusive possession if others left voluntarily is not liable for all rent.
2. Rent from third parties - a co-tenant who leases all or part of premises to third party must give co-tenants their fair share (e.g. equal to interest in whole; if only paid for 10% of property, get 10% of rent)

Question 72

Can one co-tenant in a tenancy in common come to adversely possess the parcel?

Answer 72

No. The hostile element of adverse possession is lacking. Unless he has ousted other co-tenants, can’t acquire.

Question 73

What are co-tenants’ responsibilities w/r/t carrying costs in a tenancy in common?

Answer 73

Both responsible for fair share of carrying costs (taxes, mortgage interest payments), based upon each undivided share (if G contributes 90% and M 10% to purchase, that is their proportionate share.

Question 74

What are co-tenants’ responsibilities w/r/t repairs on the property?

Answer 74

The repairing co-tenant has a right to contribution for reasonable, necessary repairs, provided that she has told the other of the need (proportional share based on proportion bought in)

Question 75

What are co-tenants’ responsibilities w/r/t improvements?

Answer 75

No right of contribution to “improvements” - you can’t get co-tenants to pay for improvements you make.

At partition, improving co-tenant entitled to a credit, equal to any increase in value caused. So-called improver also bears full liability at partition for any drop in value caused by “improvement.”

Question 76

What are co-tenants’ responsibilities w/r/t waste?

Answer 76

A co-tenant cannot commit waste (voluntary, permissive, ameliorative). A co-owner can bring a waste action during the life of co-tenancy.

Question 77

What types of tenants can bring a partition action?

Answer 77

Joint tenant or tenant in common.

Question 78

What are the four leaseholds/nonfreehold estates?

Answer 78

1. Tenancy for years
2. Periodic tenancy
3. Tenancy at will
4. Tenancy at sufferance

Question 79

What is a tenancy for years (aka Estate for years/term of years)?

Answer 79

Lease for fixed period, 2 days or 10 years.
If you know termination date from start.
No notice is needed to terminate, since tenant knows from the start.

Ex. L leases Blackacre to T “from 1/1/11 to 7/1/11”

A term of years greater than 1 year must be in writing to be enforceable, due to Statute of Frauds.

Question 80

What is a periodic tenancy (successive tenancy)?

Answer 80

A lease that continues for successive intervals, until LL or T give proper notice of termination. May be created expressly, or through implication.

Ex. LL conveys “to T, from month to month” “year to year” or “week to week” - continuous, cyclical, open-ended. (express period tenancy)

Ex. Reservation of annual rent, payable monthly, creates year-to-year periodic tenancy.

Question 81

How may a periodic tenancy be impliedly created?

Answer 81

1. Land is leased with no mention of duration, but provision is made for payment of rent at set intervals
2. Oral term of years in violation of Statute of Frauds, measured by the way rent is tendered (ex. agree to a 5 year lease orally, monthly rent; if L accepts T’s check, first payment renders interest implied periodic tenancy
3. The holdover - in a residential lease, if LL elects to hold over a tenant who wrongly stayed on past conclusion of original lease, implied periodic tenancy arises. Period is based on rent payment intervals. Tenant will be held to higher rent IF the LL notifies tenant of rent increase prior to lease expiring.

If non-residential, a holdover from an original lease that is 1+ year in length will create a year-to-year tenancy, which will have the same terms as original tenancy unless landlord notified tenant before termination of original tenancy about increased rent or changed term.

Question 82

How may a periodic tenancy be terminated?

Answer 82

Notice, usually written, must be given.

Notice at CL must be at least equal to the period itself unless otherwise agreed (ex. month’s periodic tenancy, need one month’s notice). If tenancy is year-to-year or greater, need 6 months’ notice.

Can by changed by private agreement.

Question 83

What is a tenancy at will?

Answer 83

A tenancy for no fixed duration. Rare, so unless parties expressly call it a tenancy at will, it will be treated by courts as implied periodic tenancy so long as rent is paid at regular intervals.

Termination: either party at any time, reasonable demand to quit usually needed.

Ex. “To T for as long as LL or T desires.”

Question 84

What is a tenancy at sufferance?

Answer 84

When T has wrongfully held over past the expiration date of the lease. The leasehold estate is called tenancy at sufferance, which permits LL to recover rent.

Tenancy at sufferance lasts only until LL evicts T or elects to hold T to a new tenancy - short time period.

Question 85

What are tenants’ liabilities to third parties, in a LL-tenant situation?

Answer 85

In tort, T is responsible for:

1. Keeping premises in good repair
2. For injuries when T invited third party, even if LL explicitly made promises to repair (though T may seek indemnification from L)

Question 86

What is a tenant’s duty to repair when the lease is silent?

Answer 86

T must maintain premises and make routine repairs, other than those due to ordinary wear and tear. T must not commit any of the 3 types of waste.

Ex. responsible for unclogging your drain

Question 87

What is the law of fixtures?

Answer 87

When a tenant removes a ficture, the tenant commits voluntary waste. A fixture is a once movable chattel that, by virtue of its attachment/annexation to the realty, objectively shows the intent to permanently improve the realty.

T can’t remove a fixture, even if she installed it herself. Fixtures pass with the ownership of the land.

Ex. heating system, custom storm windows, furnace, certain lighting installations

Question 88

What is the test for determining whether a tenant installation qualifies as a fixture?

Answer 88

Express agreement controls.

In the absence of an agreement, T may remove the chattel installed so long as removal won’t cause substantial harm to premises. If removal will cause substantial damage, then in objective judgment T has shown intent to install a fixture. Fixture stays up.

Factors for determining intent in residential context:
Relationship between annexor and premises? Heirloom, e.g.? Intent of tenant when installed? How much damage will be caused if the fixture is removed?

In determining commercial fixtures - apply the trade fixtures doctrine. Under the trade fixtures doctrine, we allow all commercial tenants to remove all trade fixtures prior to the lease expiring.
If you have a hybrid residential/commercial area, ask what purpose the equipment was installed for.

Ex. a bench that is otherwise removable but part of the in-wall organ is also part of fixture, if it would damage the aesthetic value. Damage can be to value!

Question 89

What is a tenant’s duty to repair when the tenant has expressly covenanted in the lease to maintain property in good condition for the duration of the lease?

Answer 89

At common law (historically): T was liable for loss to the property, including loss due to force of nature. T was a sitting duck.

Today, majority view: T off the hook when premises are destroyed without T’s fault.

Question 90

What if tenant breaches the duty to pay rent and is in possession of the premises?

Answer 90

LL only has two options:

(1) evict through courts or
(2) continue the relationship and sue for rent due.

If LL moves to evict, is nonetheless entitled to rent from the tenant until tenant (who is now tenant at sufferance) vacates.

Can never engage in self-help: changing the locks, forcibly remove T, remove T’s possessions. Punishable both civilly and criminally.

Question 91

What if tenant breaches duty to pay rent and is NOT in possession of the premises?

Answer 91

Ex. T wrongfully vacates with time left on a term of years (just leaves, stops paying, even though lease isn’t up)

1. Surrender (treat T abandonment as implicit offer of surrender, which L accepts, though surrender must be in writing if term is great than 1 year to satisfy SoF - letter can be from LL accepting surrender in writing to last known address)
2. Ignore (hold T responsible for rent as though they were here - minority option)
3. Re-let the premises on wrongdoer tenant’s behalf, and hold them liable for any deficiency (majority)

Majority rule is that L must at least try to re-let the apartment (mitigation principle)

Question 92

What is the landlord’s duty to deliver possession? (majority and minority)

Answer 92

Majority/English: requires that L fully put T in possession of premises. Thus, if at end of T’s lease a prior holdover T is in possession, L has breached and new T gets damages.

Minority (American): L only needs to give T legal possession, no need for actual possession.

Question 93

What is the landlord’s duty w/r/t the implied covenant of quiet enjoyment?

Answer 93

Tenant has a right to the quiet use and enjoyment of the properties, without interference from LL (residential and commercial).

Question 94

What are the two ways that a landlord can breach their duty to tenants w/r/t the implied covenant of quiet enjoyment?

Answer 94

Actively - actual wrongful eviction (or exclusion from premises)

Breach by constructive eviction - SING:
S I - Substantial interference due to LL’s actions or failures, permanent or chronic
N - Notice, T must notify and LL must fail to fix
G - Goodbye. Aggrieved tenant must leave the site after LL fails to remediate.

Question 95

What is the exception to the general rule that the LL is not generally liable for acts of other tenants?

Answer 95

L may not permit nuisance on site.
L must control common areas

Also, if there is a latent defect and LL fails to notify, liable.

Question 96

What is the implied warranty of habitability?

Answer 96

Applies only to residential leases.
Nonwaivable warranty that the premises are fit for basic dwelling.

Appropriate standard may be supplied by housing code and case law.

Ex. no heat in winter, no plumbing, no running water.

Question 97

What are tenant’s entitlements when the implied warranty of habitability is breached?

Answer 97

MR CUBED.

M - Move out and end the lease, but T doesn’t have to leave (contrast w/ constructive eviction requirement to show implied breach of quiet enjoyment)
R - Repair and deduct - tenant makes repairs and reduces rent from future month dollar for dollar
R - Reduce rent or withhold all rent until court determines fair rental value, typically T must place in escrow to show good faith
R - Remain in possession, pay rent, and affirmatively seek money damages

Question 98

What is the prohibition on retaliatory evictions?

Answer 98

If T lawfully reports LL for housing code violations, LL is barred from penalizing T by eviction.

Examples: raising rent, ending lease, harassing T, taking other reprisals

Question 99

What is an assignment vs. a sublease?

Answer 99

In absence of a prohibition in the lease, T may freely transfer the interest in whole (assignment) or in part (sublease).

An assignment is when a tenant transfers possession of the premises for the remaining balance on a lease. It doesn’t mean tenant is off the hook. They are in privity of contract.

In lease, LL may prohibit T from assigning or subletting without prior written approval, but once LL consents to one transfer, waives the right to future objections (unless he expressly reserves that right) (Rule in Dumpor’s Case)

Question 100

What is privity of estate, w/r/t assignment?

Answer 100

A property-based nexus; LL and whatever tenant is currently possessing the premises.

Question 101

What liabilities does the privity of estate confer between new possessor and landlord?

Answer 101

L and T2 are liable to each other for all covenants in the original lease that “run with the land”

Ex. promise to pay rent, paint premises, repair, e.g.

Ex. L leases to T1. T1 assigns T2. T2 assigns T3. T3 abuses.
L can proceed against T3 b/c privity of estate
L can proceed against T1 secondarily due to privity of contract
L cannot make any claims against T2, unless T2 was also in privity of contract.

Question 102

What is privity of contract, w/r/t assignment?

Answer 102

Those who exchanged the original promissory rules (original leaseholder and LL, usually).

L and T2 are not in privity of contract unless T2 explicitly assumes all promises in the original lease.

In the case of an assignment from T1 to T2, because LL and T1 remain in privity of contract, they remain secondarily liable to one another (in case primary is unavailable)

T1 always remains in privity of contract, and is thus jointly and severally liable.

Question 103

How does privity of estate and contract affect a tenant’s choice to sublet to a sublessee?

Answer 103

L and sublessee are neither in privity of estate nor in privity of contract; they share no nexus.

T2 is liable to T1, vice versa.

Relationship between L and T1 is fully intact.

Question 104

What is the doctrine of caveat lessee?

Answer 104

It is the common law norm that the landlord is under no duty to make the premises safe. “Buyer beware.”

Modern - subject to many exceptions, five main ones.

Question 105

What are the five most common exceptions to the caveat lessee doctrine?

Answer 105

Tenant learns of these, she CLAPS. (Landlord can have tort liability for failing to maintain:)

C - Common areas (hallways, stairwells)
L - Latent defects rule (L must warn T of hidden defects that L knows or should have known about. Mere duty to warn, not repair.)
A - Assumption of repairs (LL who makes repairs negligently is liable, doesn’t have to assume them)
P - Public use rule (L who leases public space w/ defect they should know about due to severity of defect, and knows T will not repair due to length of lease, liable for any defects on the premises
S - Short term lease of furnished dwelling - L is liable for any defect on site.

Question 106

What are the non-possessory interests in property?

Answer 106

Servitudes!

Easement
License
Profits
Covenants
Equitable servitudes

Question 107

What is an easement?

Answer 107

The grant of a nonpossessory property interest (dominant tenement) that entitles its holder to some form of use or enjoyment of another’s land (servient tenement).

Can be affirmative or negative, most are affirmative.

Question 108

What is an affirmative easement?

Answer 108

The affirmative right to do something on servient land.

May be created through prescription, implication, necessity, grant.

Question 109

What is a negative easement?

Answer 109

Entitles the holder to prevent servient landowner from doing something that would otherwise be permissible, usually only in 4 categories (LASSS)
L - Light 
A - Air
S - Support
S - Stream water for artificial flow

Minority also for S - Scenic View

Question 110

How can a negative easement be created?

Answer 110

Exclusively through express writing signed by grantor.

Question 111

What is an easement appurtenant?

Answer 111

An easement is appurtenant when it benefits its holder in his physical use or enjoyment of the property.

It takes two - dominant tenement, servient tenement (bears burden)

Ex. A grants B right of way across A’s land so B can more easily reach his land. B has an easement appurtenant.

Question 112

What is an easement in gross?

Answer 112

It confers upon its holder only some personal or pecuniary advantage unrelated to use or enjoyment of land. Servient land is burdened, but no benefited/dominant tenement.

Ex. right to swim in another’s pond, right to place a billboard. These are personal choices between individuals.

Best choice if you want to attach strings to the ability of public to use your land.

Question 113

Are easement appurtenants transferable?

Answer 113

The easement appurtenant transfers automatically with the dominant tenement, regardless of whether it is even mentioned in the conveyance.

The burden of easement appurtenant passes with the servient estate, unless the new owner is a bona fide purchaser without notice.

Ex. A has easement entitling her to cut across B’s land. A sells parcel to X, with no mention of B. X can still enjoy easement, since it passes automatically.

Question 114

Is an easement in gross transferable?

Answer 114

No, unless it’s for commercial purposes. These are more personal easements.

Ex. S has easement to use B’s lake to fish for bait for its company. Easement in gross. Transferable to next commercial seller.

Question 115

How can an affirmative easement be created? (4)

Answer 115

PING.

P - Prescription (never got permission but used it)
I - Implication (past use makes it reasonably necessary)
N - Necessity (no other way out)
G - Grant

An easement, once created, is presumed to be of perpetual duration.

Question 116

How can an affirmative easement be created through prescription?

Answer 116

May be satisfied through adverse possession if:

1. Continuous use for statutory period
2. Open and notorious
3. Actual use (but need not be exclusive)
4. Hostile use (without servient owner’s consent)

Here, unlike in AP doctrine, possessor doesn’t get title but a limited use of prescriptive easement.

Question 117

How can an affirmative easement be created through implication?

Answer 117

If an easement is implied by existing lots, when:

1. Previous use was apparent
2. Parties expect it would continue because it is reasonably necessary to dominant land’s use and enjoyment

Ex. Lot 1 is hooked up to L2’s sewer drain pre-sale. Even if no mention of right to continue, court will imply easement.

Question 118

How can an affirmative easement be created through necessity?

Answer 118

Easement of right of way will be implied by necessity if grantor conveys portion of his land with no way out except over remaining land.

Easement will be implied if, prior to the time property is divided, a use exists on the servient part that is reasonably necessary for the use of the dominant part, and all parties intended to continue after division. Use must be continuous and apparent at time the property is sold. Reasonable necessity factors:
Cost and difficulty of alternatives
Whether price paid reflects continued use

Question 119

How can an affirmative easement be created through grant?

Answer 119

Through a writing, the Deed of Easement (if it endures for more than 1 year must be in writing to satisfy SoF).

Note: even if the easement isn’t validly recorded/signed by a notary, it will still bind the original parties. Though this will affect its transferability, it doesn’t impact the easement as between the original parties.

Note: if the parties to the original creation of the use specifically state the location of the easement, its dimensions, and the special use or limits to such use, the courts honor this expression of specific intent. Absent specific limitations, it will be assumed that the parties intend that the easement meet both present and future reasonable needs of the dominant tenement. However, a basic change in the nature of the use is not allowed.

Question 120

What is the scope of an easement?

Answer 120

Determined by the terms that created it.

Question 121

How may someone terminate an easement?

Answer 121

END CRAMP

E - Estoppel ( 1. conduct or assertion by owner of easement that easement won’t be enforced, 2. reasonable reliance by servient tenement, 3. servient owner materially changes position i.e. by building over the area)

N - Necessity (expires as soon as the need ends, unless it was created by express grant)

D - Destruction of the servient land other than through the willful conduct of the servient owner

C - Condemnation of servient estate by eminent domain

R - Written release by easement holder to servient (most common)

A - Abandonment (easement holder/beneficiary must demonstrate by physical action that the intent is to never use the easement again; mere nonuse will be insufficient)

M - Merger doctrine (unity of ownership) - easement ends when title of both relevant parcels is vested in same person (even if title separates later, easement dead)

P - Prescription (servient owner may extinguish in accordance with adverse possession elements)

Once terminated, easement holder may be entitled to compensation for value lost.

Use of easement beyond legal scope will not eliminate the easement; instead, easement will be surcharged and servient owner can sue to enjoin use.

Question 122

What is a license?

Answer 122

A mere privilege to enter another’s land for a delineated purpose. It is NOT a nonpossessory interest in land.

Not subject to Statute of Frauds, no need for a writing.

Freely revocable at will of licensor, unless estoppel applies to revocation.

Ex. tickets to a show create freely revocable licenses.
Ex. Neighborhood orally seems to create easement, reneges the next day - didn’t actually create an easement, it was a freely revocable license.

Question 123

When will estoppel bar revocation of a license, thereby creating an irrevocable license?

Answer 123

Only when the licensee has invested substantial money, labor or both in reasonable reliance on license’s continuation.

Question 124

What is a profit? (Servitude)

Answer 124

Entitles holder to enter the servient land and take from it the soil or some substance of the soil (mineral, timber, oil, fish/game)

Can harvest from the land. Profit goes by easement rules (for creation and termination)

Creation - PING
Termination - ENDCRAMP
If the note is endorsed or delivered, transferee can be a holder in due course (can take the note free of any personal defenses that could have been raised against the original mortgaagee by the debtor mortgagee)

Question 125

What is a covenant?

Answer 125

A promise to DO or NOT DO something related to the land. IT’s not the grant of a property interest, but rather a K/promise re: land.

One tract is burdened, and the other is benefited.

Question 126

What is a restrictive covenant?

Answer 126

Promise to refrain from doing something related to the land.

Ex. I promise not to build for commercial purposes
Ex. I promise not to post a “for sale” sign

Question 127

What is an affirmative covenant?

Answer 127

Affirmative promise to do something re: land

Ex. I promise to paint our common fence

Question 128

How can someone tell the difference between a covenant or an equitable servitude?

Answer 128

On the basis of the remedy the plaintiff seeks. If P seeks money damages, construe as a covenant (legal cause of action is covenant).

If plaintiff seeks an injunction/specific performance, construe as an equitable servitude.

Question 129

When will covenants run with the land, such that they are capable of binding successors?

Answer 129

When there is both horizontal and vertical privity.

1. Does burden run vertically? (WITHIN)
2. Does the benefit run vertically? (WITV)

Question 130

What is horizontal privity, for the purposes of covenants?

Answer 130

Parties to a real covenant who shared an independent interest in the land at the time they entered into the covenant.

For the purposes of determining whether covenant transfers, it requires that they be in succession of estate (grantor/grantee, LL/T, mortgagor/mortgagee). Most ES’s fail to transfer based on this prong of the test.

Element is satisfied if the successor holds the entire durational interest held by the covenantor at the time she made covenant.

Ex. A promises B that A won’t build for commercial purposes

Question 131

What is vertical privity?

Answer 131

The relationship between A and A1, original landowner who sells land and the buyer of that land.

Requirements for vertical privity vis a vis covenant transferability: non-hostile nexus (e.g. blood, contract, devise, descent, NOT adverse possession)

Question 132

How does one determine whether the burden of a servient landowner’s promise run with the land (for the purposes of determining transferability of covenants)

Answer 132

Ex. A promises B. A sells to A1. Does promise run from A to A1? Apply WITHN.

W - Written promise between A and B

I - Intent that the covenant would run (courts find generously)

T - Touch and concern land, must affect legal relations as landowners (included: paying homeowners fees, noncompetes)

H - Horizontal and vertical privity both needed for burden to run. Horizontal requires succession of estate between A and B (e.g. grantor/grantee, mutual interests in same property) - often fails. Vertical requires non-hostile nexus between A and A1 (blood, contract, devise, descent, can’t be present with AP)

N - Notice. Burdened buyer had notice of the promise when she took (note: if the burdened party is not a BFP but rather is an heir, notice won’t necessarily be required)

Question 133

How does one determine whether the benefit of a covenant runs with the beneficiary land, for purposes of determining covenant transferability?

Answer 133

It is easier for benefits to run than it is for burdens to run. Mnemonic WITV:

W - Original promise must be in writing
I - Intent that benefit would run
T - Touch and concerns parties as landowners
V - Vertical privity (non-hostile nexus between B and B1, both benefiting parties).

Note: horizontal privity is not required for the benefit to run, which is why it is easier for benefits to run.

Question 134

What is an equitable servitude?

Answer 134

A promise that, regardless of whether it runs with the land at law, equity will enforce against the assignees of the burdened land who have notice of the covenant.

You don’t need privity of estate in order to enforce an equitable servitude.

Accompanied by injunctive relief.

Question 135

How can one create an equitable servitude that will bind successors?

Answer 135

WITN ES (WITN Equitable Servitude)

W - Writing (original promise)
I - Intent to bind
T - Touch and concern, affects landowner parties
N - Notice - successors of burdened land had notice of the promise.

Privity is NOT required to bind successors; it’s meant to be easier than a covenant because it isn’t a legal remedy but an equity.

Question 136

WHat is an implied equitable servitude, under the general/common development scheme doctrine?

Answer 136

Affects subdivision land, in which a RESTRICTIVE covenant affects majority of other lots but not one lot (the subdivider is building residential property and commercial buyer comes in)

DOES not APPLY to an affirmative covenant!

Two elements:

(1) When the sale began, the subdivider A had a general scheme of residential development, including D’s lot.
(2) D lotholder (B) had notice of the promise in the prior deeds. Three forms of notice will be imputed: action, inquiry notice, record notice.

Question 137

What are the three types of notice, for the purposes of satisfying the general/common scheme doctrine’s requirement of notice, in order to enforce an equitable servitude against a lotholder in a residential subdivision?

Answer 137

AIR

Actual notice - D knew of common restriction

Inquiry notice - neighborhood conforms to common restriction (lay of the land)) (constructive notice)

Record notice - form of notice sometimes imputed to buyers on the basis of publicly recorded documents (constructive notice)
Minority: harsh view, subsequent buyer D on record notice of contents of all prior deeds transferred to others by common grantor
Majority (better view): subsequent buyer has record notice only of the contents of the deed the grantor transferred to them.

Question 138

What is the equitable defense to enforcement of an equitable circumstance?

Answer 138

Changed circumstances. Super hard. Changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the entire area has changed.

Mere pockets of limited change will not be sufficient.

Question 139

What is adverse possession and its elements?

Answer 139

Possession for a statutorily proscribed period can, if certain elements are met, ripen into title.

Elements COAH
C - Continuous (uninterrupted for statutory period)
O - Open and Notorious (sort of possession the usual owner would make under the circumstances, doesn’t mean you need to build a structure)
A - Actual and exclusive (actual entry giving exclusive possession, can’t be shared with public but can give friends access sometimes)
H - Hostile (did not receive permission/consent, OR communicated hostility, e.g. doesn’t let her come on the land, explicit notification, etc.)

Note: on hostile prong, don’t need to know the land isn’t yours, just need to not have received consent to use it. And if you think the land is yours but subject to an invalid deed, that’s hostile.

Possessor’s subjective state of mind is irrelevant.

It can be acquired seasonally (use summer house every week).

Note: the SOL that determines the time period for AP doesn’t run against the holder of a future interest until that interest becomes possessory, b/c the holder of the future interest has no right to possession (and thus no COA) until the prior present estate terminates. New SOL for each possessor!

Question 140

When may tacking occur within adverse possession?

Answer 140

One AP may tack onto his time with the land to his predecessor’s time, so long as there is privity (non-hostile nexus, liberally construed).

Tacking NOT allowed when there has been an ouster.

Question 141

What is the disability exception to tacking and adverse possession?

Answer 141

Statute of limitations will not run against a true owner afflicted by a disability at the START of adverse possession

Ex. insanity, infancy, imprisonment.

Question 142

What are the two steps required in a real estate transaction

Answer 142

1. Land sale contract (short life)

2. Closing (deed - operative document)

Question 143

What are the Statute of Frauds requirements on land contracts?

Answer 143

1. Must be in writing
2. Signed by party to be bound (D)
3. Describe land (and if land is incorrect, remedy is specific performance with pro rata reduction)
4. Some consideration

Question 144

What is the part performance exception to the Statute of Frauds requirements in land contracts?

Answer 144

If any two of the following three circumstances, equity intervenes and a decree of specific performance of oral contract for the sale of land:

1. B takes possession
2. B pays all or part of price, and/or
3. B makes substantial improvements

Buyer’s remedy is NOT damages! Only specific performance is available.

Question 145

How does the risk of loss problem deal with destruction between land contract and closing?

Answer 145

Apply doctrine of equitable conversion - equity regards as done that which ought to be done. Only applies to the buyer and seller, not to third parties (i.e. attaching property held in name of debtor).

Lives during land sale period. During escrow period, buyer bears risk of loss. Buyer can compel specific performance.

Once land K is signed, B owns land. If at interim between K and closing, land is destroyed through no fault of either party, B bears risk of loss unless K says otherwise. Most modern land contracts reallocate impose upon whichever party is in possession.

Thus, under equitable conversion, once an enforceable contract of sale is signed, the purchaser’s interest is real property and the seller’s interest is personal property (right to proceeds).

Note: you can’t generally recover the amount that was put up as consideration, b/c it is considered a reasonable assessment of whatever damages may occur.

Question 146

What are the two implied promises in every land contract?

Answer 146

1. Seller promises to provide marketable title at closing (marketable title is title free from reasonable doubt - lawsuits, threat of litigation). Three circumstances making title unmarketable:
   (1) Adverse possession
   (2) Encumbrances (servitudes, mortgages, unless buyer waives or seller is satisfying outstanding lien at closing using sale proceeds; exception: a beneficial easement that was visible or known to the buyer does not constitute an encumbrance)
   (3) When parcel violates a zoning ordinance (mere presence of zoning ordinance insufficient)
   Note: ancient mortgages/liens on which SOL has run will not affect marketability
2. Seller promises not to make any false statements of material fact (most states also hold seller liable for failure to disclose a latent material defect, even if K contains general disclaimer of liability)
   Ex. substantial variation in description of property from one deed to the next

Question 147

What implied warranties of fitness or habitability does the land contract contain?

Answer 147

NONE.
Common law norm: caveat emptor.

Exception: when the builder is also the seller, then they are implicitly standing behind the premise that it was constructed in a workmanlike manner and suitable for human habitation.

Question 148

What is the legal effect of a deed?

Answer 148

Deed passes legal title from seller to buyer

Land contract dies.

Question 149

What are the requirements for a valid deed that passes legal title from seller to title?

Answer 149

It must be LEAD (Lawfully Executed and Delivered). Also need words of INTENT, e.g. by using the word “grant”

Lawful execution standard:

1. In writing
2. Signed by grantor
3. Evidence an intention to convey the landz
4. Unambiguous description of land (“all of my land” suffices - sufficient if it gives enough information to ID, doesn’t need to have full metes and bounds)
5. Identifies grantor and grantee

Delivery requirement

1. Can be satisfied when grantor transfers deed physically (mail, agent, messenger, in-hand)
2. Does not require physical intent itself. Standard: did grantor have present intent to be bound, irrespective of whether or not the deed itself was handed over?
3. Delivery by escrow is OK (and in fact, when a deed is placed in escrow, there is valid conditional delivery and title will transfer automatically on occurrence of condition)
4. Recipient express rejection of deed defeats delivery (but return of deed is not necessarily reconveyance)
5. If deed, absolute on its face, is transferred to grantee with an oral condition, oral condition drops out

Re: acceptance of deed
Courts generally presume that a grantee accepts a deed if the conveyance would benefit her.
Courts also presume that grantee accepts deed if she is minor, if infant, or incompetent
If recorded, will be deemed accepted.

Question 150

What are the three types of deeds?

Answer 150

1. Quitclaim
2. General warranty deed
3. Statutory special warranty deed

Question 151

What are the features of a quitclaim deed, including any covenants?

Answer 151

No covenants.
Grantor isn’t even promising he has title to convey.
Worst deed a buyer.

Implicitly promised int he land contract to provide marketable title at closing (though any problems post-closing, seller off the hook)

Question 152

What are the features of a general warranty deed, including any covenants?

Answer 152

Features: warrants against all defects in title, including those due to grantor’s predecessor.

3 present covenants (breached, if ever, at moment of delivery - SOL runs from instant of delivery. Don’t run with the land)

1. Covenant of seisin (grantor owns estate, has both title and possession)
2. Covenant of right to convey (grantor is under no disability, no temporary restraints on grantor’s power to sell)
3. Covenant against encumbrances (no servitudes or mortgages on the state)

3 future covenants (SOL begins when breached, when grantee is disturbed while in possession. Enforceable by all future buyers, runs with the land).

1. Covenant for quiet enjoyment (no third party has lawful claim of title; grantor will indemnify grantee for claims of title brought by third parties)
2. Covenant of warranty (grantor will defend grantee against lawful title claims)
3. Covenant for future assurances (will cooperate in good faith with any other administrative issues)

Question 153

What is the statutory special warranty deed, and what are some of its features?

Answer 153

Provided for by statute in many states, contains two promises that grantor makes only on behalf of himself (not on behalf of predecessors):

1. Grantor promises he hasn’t conveyed Blackacre to anyone other than grantee.
2. Blackacre is free from encumbrances made by grantor

Question 154

In the case of a dirty double dealer, if B is a bona fide purchaser in a notice jurisdiction, what happens?

Answer 154

B always has superior title! Regardless of whether or not she records before A does.

Question 155

In the case of a dirty double dealer, if B is a bona fide purchaser in a race-notice jdn, what happens?

Answer 155

B has superior title ONLY IF she records properly before A does.

Question 156

What is a bona fide purchaser?

Answer 156

In issues of title superiority -

1. Purchases Blackacre for value AND
2. Without notice that someone else got there first.

“For value” – need only remit substantial pecuniary consideration, even if it’s much less than FMV.

Note: bona fide purchaser cannot ever be a donee/heir/devisee, because they didn’t pay valuable consideration.

Judgment lienors in majority of states are not protected as BFPS because they didn’t pay value for a judgment, or judgment attaches only to property “owned” by D.

NOTE: Bona Fide Purchasers are not protected against interests arising by operation of law, such as adverse possession or implied easements, because there is no instrument to record in order to perfect such interests. Instead, subsequent BFPs take subject to those interests.

However, a BFP will not take it subject to an EXPRESS easement that was not recorded, so long as they really are a BFP without notice.

Question 157

What are the three forms of notice that a buyer may potentially be charged with?

Answer 157

AIR (same as under equitable servitudes)
A - Actual notice
I - Inquiry notice (whatever an examination of land would show, creating duty to inspect; if recorded instrument makes reference to unrecorded transaction, is on inquiry notice to whatever reasonable follow up would show)
R - Record notice (of prior properly recorded transactions)

Question 158

What are features of language within a notice statute?

Answer 158

“A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

Question 159

What is the legal significance of a notice statute?

Answer 159

If at the time B takes, he is a bona fide purchaser, he wins. It doesn’t matter if A ultimately records first.

Last BFP to enter wins.

But note: a BFP is still unprotected against an interest arising by operation of law.

Question 160

What are features of language within a race-notice statute?

Answer 160

“Any conveyance of interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.”

It’s a race to record!

Question 161

In order to give record notice, how must a deed be recorded?

Answer 161

Deed must be properly recorded within the chain of title (sequence of recorded documents). Can be established through a title search of the grantor-grantee index.

Note: a title search is not complete without an examination of possession. If possession is unexplained by the record, the subsequent purchaser is charged with knowledge of whatever an inspection of the propertywould have disclosed and anything that would have been disclosed by inquiring of the psosessor.

Question 162

What is the Shelter Rule?

Answer 162

One who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against. The transferee “takes shelter” in transferor status, and steps into shoes of BFP even though otherwise doesn’t meet BFP status.

This also applies to easements! If a prior BFP didn’t have notice of an express easement, it doesn’t continue on to a subsequent purchaser even if they had notice of the easement.

Ex. O conveys to A who does not record. Later O conveys to B, BFP, who records. B conveys to C who is mere donee or who has actual knowledge of O to A transfer. C wins either way.

Question 163

What is the wild deed?

Answer 163

O sells to A, who does not record. A sells to B. B records. No reference of the O to A transfer. The A to B transfer is a Wild Deed, incapable of giving record notice.

You can’t record a wild deed that doesn’t include all prior transfers that are unrecorded. Put it on the first buyer to insist on correct title.

Question 164

What is estoppel by deed?

Answer 164

One who conveys deed in which he has no interest is estopped from denying the validity of that conveyance if he later acquires the previously transferred interest.

Note: most courts hold that this is personal estoppel, which means that the title inures to the grantee’s benefit only as against double dealing grantor, but not against a subsequent bona fide purchaser. (Thus, if the grantor transfers after-acquired title to an innocent purchaser for value, the new BFP gets good title - but check for record/inquiry notice).

Ex. if X sells land he doesn’t own, but then comes to own it, the sale from invalid time is valid.

Question 165

What are some common names for a legal mortgage?

Answer 165

The note, security interest in land, deed of trust, mortgage deed, sale leaseback

Question 166

Who is the mortgagor, and who is the mortgagee?

Answer 166

Debtor is mortgagor.

Creditor is mortgagee.

Question 167

What is a mortgage?

Answer 167

Conveyance of a security in land, intended by the parties to be collateral for the payment of a debt.

The union of a debt with a voluntary lien.

Question 168

What is a legal mortgage?

Answer 168

A mortgage in writing (usually required to satisfy SoF).

Question 169

What is an equitable mortgage?

Answer 169

Both parties understand that property transfer is a collateral for the debt, but instead of executing a note or mortgage deed, O hands creditor an absolute deed on its face.

Still only alienable through valid foreclosure.

Parol evidence is allowed to show intent (so the agreement could be oral)

If the creditor proceeds to sell, mortgagor’s only recourse is to sue creditor for fraud and the sale proceeds. Can’t get it back!

Question 170

Once a mortgage has been created, what are the parties’ general rights to the property?

Answer 170

Debtor-mortgagor has title and right to possess.

Creditor-mortgagee has a lien.

Question 171

Which parties can transfer interests in mortgage?

Answer 171

All parties can transfer their interests. The mortgage follows a properly transferred note.

However, if note is transferred but original mortgagee doesn’t notify mortgagor and mortgagor pays, the transferee doesn’t have a valid claim.

Question 172

How may a creditor-mortgagee transfer his interest?

Answer 172

1. Endorsing the note, and delivering it to the transferee, OR
2. Executing a separate document of assignment.

Question 173

What is a “holder in due course” of a mortgage entitled to?

Answer 173

When mortgagee transfers interest to another creditor –

If the note is endorsed or delivered, transferee can be a holder in due course (can take the note free of any personal defenses that could have been raised against the original mortgagee by the debtor mortgagor). However, still subject to the real defenses.

Question 174

What are the “personal defenses” that a mortgagor can raise against the original mortgagee, but not a holder in due course of the mortgage?

Answer 174

Lack of consideration, fraud in the inducement (knew what they were signing was mortgage), unconscionability, waiver, estoppel.

A holder in due course may foreclose on a mortgage despite these missing elements.

Question 175

What are the “real defenses” that a debtor/mortgagor can always raise against creditor, whether against original mortgagee or the transferee holder in due course?

Answer 175

MAD FIFI4:

Material Alteration
Duress
Fraud in the Factum (didn't know it was a mortgage)
Incapacity
Illegality
Infancy
Insolvency

Question 176

What are the criteria needed in order for a transferee to become a holder in due course?

Answer 176

1. Note must be negotiable, made payable to named mortgagee
2. Original note must be endorsed, signed by named mortgagee
3. Original must be endorsed and delivered to transferee (no photocopy)
4. Transferee must take the note in good faith, without notice of illegality
5. Transferee must pay value for note (any amount more than nominal)

Question 177

Do recording statutes apply to mortgages?

Answer 177

Yes, so you apply notice or race-notice rules to the recording of the mortgage.

Question 178

When a debtor-mortgagor sells their property to a buyer, who is personally liable on the mortgage?

Answer 178

Depends!

If B has “assumed the mortgage,” and signs an agreement to assume the morgage, both are personally liable. B is primarily liable, and seller is secondarily liable.

If B takes property “subject to the mortgage”, Buyer does not have liability on the liability, owner remains responsible.

Must sign an agreement to assume the mortgage and become primarily liable.

Question 179

What is a foreclosure?

Answer 179

The mortgagee-creditor looks to the land for satisfaction. Must be by judicial action. Land is sold, and proceeds go toward satisfying the debt.

Question 180

What is a deficiency acton?

Answer 180

If the foreclosure sale proceeds come to less than the amount owed on the mortgage, the mortgagee can bring a deficiency action against the debtor.

Question 181

What fees are taken off the top of a foreclosure sale?

Answer 181

Attorney’s fees, foreclosure expenses, any accrued interest on the first bank’s lien.

Question 182

What is the order of payment on the proceeds of r a foreclosure sale?

Answer 182

Sale proceeds are used to pay off the mortgages in order of priority. Each claimant is entitled to satisfaction in full before a subordinated (junior) interest

If junior interest isn’t satisfied, can bring deficiency action may take.

Question 183

What if there is a surplus from foreclosure sale?

Answer 183

Surplus goes to debtor only after all junior interests are satisfied.

Question 184

Who are the necessary parties to a foreclosure action, and what are the consequences of failing to include all necessary parties in action?

Answer 184

Those with interests subordinate to those of foreclosing party are necessary parties (junior lienholders).

Debtor mortgagor is a necessary party, and must be joined.

Failure to include a necessary party results in the preservation of that party’s claim, despite the fact of a foreclosure sale. It doesn’t invalidate the sale altogether.

Question 185

What impact does a foreclosure sale have on interests senior to that mortgage?

Answer 185

None - foreclosure of Second Bank’s mortgage won’t affect First Bank’s mortgage. First Bank mortgage continues on land in hands of the foreclosure sale buyer.

Though foreclosure sale buyer is not personally liable, if the mortgage is not paid off the First Bank can foreclose. As a practical matter, if senior mortgage is not paid, senior creditor will foreclose.

Question 186

What is the rule for determining priority of properly recorded mortgages, among creditors?

Answer 186

First in time, first in right (based on when they record). EXCEPTION: purchase money mortgage

Question 187

What is a purchase money mortgage?

Answer 187

Mortgage given to lender lending money to mortgagor to buy property. Mortgage given to secure a loan that enables the debtor to acquire the encumbered land. Given “superpriority.”

Ex. C lends 100k so O can buy Blackacre. C takes as collateral a security interest in Blackacre. C is a purchase money mortgagee.

However, they’re subject to later liens by virtue of recording acts. If it Aisn’t recorded, you’lll lose.

Question 188

What is a subordination agreement?

Answer 188

Senior creditor may agree to subordinate its priority to a junior creditor, as a norm of freedom of contract.

Question 189

What is equitable redemption?

Answer 189

At any time prior to the foreclosure sale, the debtor can try to redeem the land. But once a valid foreclosure sale has taken place, the right to equitable redemption is gone.

Nonwaivable right (“clogging the equity of redemption”)

You can exercise the right of equitable redemption by paying off the missed payments, plus interests and costs.

Question 190

What is an acceleration clause in a mortgage?

Answer 190

Permits the mortgagee to declare the full balance of the mortgage due immediately, and payable in the event of a default. If debtor wants to exercise equitable redemption, must pay off full costs plus interests.

Question 191

What is statutory redemption?

Answer 191

Recognized in half the states. Debtor-mortgagor is given statutory right to redeem for fixed period AFTER foreclosure sale has occurred (typically 6 months to a year). Amount to be paid: foreclosure sale price.

Mortgagor usually keeps right to possess during statutory period.

When mortgagor redeems, effect is to nullify a foreclosure sale.

Question 192

What is lateral support doctrine?

Answer 192

A property owner is entitled to have her land supported in its natural state by adjoining land.

Strict liability will attach only if P shows that P’s improved land would have collapsed (subsidence) even in unadorned state (improvements did not contribute to collapse).

Even if the land would not have collapsed except for the weight of the buildings, the excavating landowner is
liable for damage to the buildings if his excavation is found to have been done negligently.

Question 193

What are the two major doctrines for determining water allocation in water-courses (streams, rivers, lakes)?

Answer 193

1. Riparian doctrine

2. Prior appropriation doctrine

Question 194

What is the riparian doctrine?

Answer 194

Water belongs to those who own the land bordering water course. In jurisdictions following the riparian doctrine for allocation of water in watercourses, the reasonable use theory permits each riparian owner (i.e. owner of land bordering watercourse) a reasonable use of the water, and a downstream owner cannot enjoin the reasonable use by an upstream riparian owner unless it substantially interferes with the downstream owner’s comparable use. Under this doctrine, uses are categorized as natural or artificial.

Natural uses (household consumption, gardening, limited grazing) prevail over artificial uses (irrigation, manufacturing); riparian owners can take all the water they need for natural uses, but cannot take water for artificial uses unless there is enough water for the domestic needs of all other riparian owners.

Riparian people - share right of reasonable use of water. One riparian is liable if their use unreasonably interferes with others’ use.

Reasonable use doctrine: almost everything is reasonable, except something malicious or crazy.

Question 195

What is the prior appropriation doctrine?

Answer 195

Water belongs initially to the state, but the right to divert and use it can be acquired by an individual, regardless of whether they happen to be a riparian owner (or whether their property abuts the watercourse).

Rights determined by priority of beneficial use (first in time, first in right).

Any productive or beneficial use of water (watercourse, agriculture) sufficient to create right.

Question 196

What’s the deal with groundwater?

Answer 196

Surface owner is entitled to make reasonable use of groundwater (water beneath the surface of earth that is not confined to a known channel, aka percolating water)

Question 197

What’s the deal with surface waters?

Answer 197

A common enemy! Nemesis!

Landowner may change the drainage or make any other changes or improvements on his land to combat the flow of surface water.

Many courts modify to prohibit unnecessary harm to others’ land.

Question 198

What are the land possessor’s rights?

Answer 198

To be free from trespass and private nuisance!

Question 199

What is trespass?

Answer 199

Invasion of land by physical object. Bring ejectment action if you want to eject a trespasser.

Question 200

What is private nuisance?

Answer 200

Substantial, unreasonable interference with another’s land use. Unlike trespass, it does not require physical invasion. Odors and noise can give rise.

Hypersensitive plaintiffs can’t collect.

Question 201

What’s eminent domain?

Answer 201

Government’s 5th Amdt. power to take private property for public use, in exchange for just compensation.

Question 202

What is an explicit taking in eminent domain law?

Answer 202

An act of governmental condemnation.

Question 203

What is an implicit/regulatory taking in eminent domain law?

Answer 203

Governmental regulation that wasn’t intended to be taking but has the same effect.

Remedy:

1. Compensate owner or
2. Terminate regulation and pay owner for damages

Question 204

Why can the government enact zoning statutes?

Answer 204

Police power. Reasonably controls land use.

Question 205

What is a variance in zoning laws?

Answer 205

Principal means to achieve flexibility in zoning.
Proponent must show:
1. Undue hardship
2. Granting variance won’t harm neighbors’ property values

Variance is granted or denied by administrative action, usually zoning board.

NOTE: a zoning variance does NOT affect the enforcement of a restrictive covenant! Can still be liable if you get a variance when you also have restrictive covenant. They are completely separate concepts.
Only possible exception: if the restrictive covenant would itself result in a zoning violation.

Question 206

What is a nonconforming use, within zoning laws?

Answer 206

Once lawful, existing use now deemed nonconforming by a new zoning ordinance. Cannot be eliminated all at once, unless just compensation paid (otherwise, unconstitutional taking)

Question 207

What is an unconstitutional exaction?

Answer 207

Amenities a government seeks in exchange for granting permission to build. To pass constitutional scrutiny, must be reasonably related in nature and scope to the impact and scope of proposed development.

Question 208

What happens if a mortgage is modified by agreement between the same parties?

Answer 208

Any increase in the debt resulting from the modification with be subject to a junior lien, even if the original mortgage itself had priority over the junior lien (so, you can collect on the principal, then others collect, then you collect on the modification).

Question 209

What is the effect of an optional (vs. obligatory) advance made after the junior lien?

Answer 209

Has a lower priority than the junior lien, even if the original mortgage is first in priority.

Question 210

Is a closing date in a land contract absolutely binding in equity?

Answer 210

No, unless there is evidence that time is of the essence. In general, courts presume that time is not of the essence in real estate contracts.

Ex. Closing date stated is not absolutely binding in equity, and a party (even if late in tendering his own performance) can still enforce if he tenders within a reasonable time (1-2 months).

Time will be considered of the essence only if:

1. contract so states
2. circumstances indicate it was parties’ intention (ex. rapidly fluctuating prices, need for money to close another critical transaction)
3. one party gives the other notice that he desires to make time of the essence.

Note: if time is NOT of essence, party late in tendering is not excused from performance absent repudiation or impossibility, and will be liable for incidental damages (ex. added mortgage interest, taxes)

Question 211

What is a pure race statute example?

Answer 211

“Any conveyance of interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded.”

Under race statute, notice is irrelevant

Question 212

What happens if seller of land dies before contract closes?

Answer 212

Successors to the seller’s real property must give up the legal title at closing. This is true because of equitable conversion, which presumes that buyer owns (equitable title to) real property at land contract signing.

Seller is entitled to the personal property (i.e. profits from the sale)

Question 213

Which parties are entitled to specific performance of a land contract?

Answer 213

Generally, both parties are entitled to specific performance.

Court will order seller to convey title if buyer tenders purchase price.

If seller cannot convey marketable title, buyer may obtain specific performance of land sale K with abatement of purchase price reflecting title defect.

Courts will order buyer specific performance if in breach.

Question 214

What is a deed of trust?

Answer 214

A security interest in land by which the debtor (trustor) transfers title to the land to a third party (trustee), such as lender’s lawyer or insurance company acting on behalf of the lender (beneficiary).

If default, lender instructs trustee to foreclose the deed of trust by selling the property.

Question 215

What is an equitable mortgage?

Answer 215

If court concludes that grantor transferred absolute deed to serve as security for an obligation. Then the grantee must foreclose by judicial action. Courts consider:

1. Existence of debt or promise of payment by grantor,
2. Grantee’s promise to return the land if debt is paid,
3. Whether the amount advanced by grantor was much lower than the property
4. Degree of grantor’s financial distress
5. Parties’ prior negotiations

Question 216

What is an installment land contract?

Answer 216

Security interest in land in which the debtor (buyer) contracts with seller to pay for land in regular installments until full K price paid, plus interest. Upon full payment, seller then transfers legal title to buyer.

Contract can contain forfeiture clause, providing that seller can cancel contract upon default, retain all money paid, and retake possession.

If a vendor sets a pattern of accepting imperfect payments, waives the right to strict performance.

Question 217

What is the result of a mortgagee transferring promissory note without written assignment of mortgage?

Answer 217

The mortgage generally follows the note.

A mortgage is a security interest in property, and a note is evidence of underlying debt. Physical possession of the mortgage and note is not required for the underlying debt.

Question 218

What is the title theory of mortgages? (Minority)

Answer 218

Legal title is in the mortgagee until the mortgage has been satisfied or foreclosed. The mortgagee is entitled to possession at any time, even before foreclosure sale.

Contrast with majority, lien theory.

Question 219

What is the intermediary theory of mortgages? (Minority)

Answer 219

Legal title transfers from the mortgagor to the mortgagee upon default.

As compared with the majority lien theory, this allows the mortgagee to take possession before the foreclosure.

Question 220

What is the lien theory of mortgages?

Answer 220

Mortgagee holds a security interest in the land, and the mortgagor is considered the owner until foreclosure. The mortgagee can’t take possession of land before foreclosure

Question 221

Between two mortgages, what is the effect on the junior mortgage when the mortgagor accepts an advance of funds from the senior mortgagee?

Answer 221

Junior mortgage is given priority over the advance if the advance was optional. (Note: not over the entire senior mortgage, just on the advance)

Generally, if the mortgage OBLIGATES the mortgagee to make further advances after the mortgage is executed, advances have the same priority. Thus, the junior mortgage would not have priority over an obligated advance.

Question 222

What is the relation-back doctrine?

Answer 222

When a deed is placed in escrow, there is valid conditional delivery and title transfers automatically on occurrence of condition. However, sometimes justice requires that the date of transfer go back to the moment that seller placed the deed in escrow (so the sale can go through).

Ex. seller places deed in escrow, becomes incapacitated (and therefore incapable of transferring title). We want them to be able to complete transfer, so apply relation-back doctrine and set date of transfer at date of escrow placement.

Assume it applies unless explicitly states otherwise.

Question 223

What is the natural flow theory?

Answer 223

Under the natural flow theory, a landowner cannot alter the rate or manner of natural flow of surface waters (e.g. rainfall, melting snow) where such actions would injure others above or below him.

Question 224

What is the doctrine of restrictive negative servitudes?

Answer 224

If a developer builds many parcels with restrictive covenants in most of them, but not all of them, the restrictive covenant or equitable servitude may be binding even if it isn’t in the deed. Requirements are:

1. Common scheme of development AND
2. Notice of the covenants (actual, inquiry, record)

Question 225

How does the Rule Against Perpetuities treat leases with option to purchase?

Answer 225

Exception to RAP if the lessee has an option to purchase, the lease would otherwise violate RAP, but the lessee is currently in possession.

Question 226

What is a disabling restraint?

Answer 226

Ex. “My brother shall have no right to convey property during life estate” - renders any conveyance ineffective. These are VOID, they don’t work!

Question 227

What is a forfeiture restraint?

Answer 227

An attempt to say that if someone tries to convey their land interest, they must forfeit their interest. This will be deemed effective if reasonable.

Question 228

How does the Rule Against Perpetuities treat “first refusal” provisions?

Answer 228

Right/options of first refusal provisions are generally presumed to be non-assignable, and therefore aren’t violations of RAP.

THey are not subject to RAP when connected to leaseholds (current tenant or assignee). If a tenant assigns the leasehold, the option generally is considered a running covenant, exercisable by the assignee absent a contrary intent. If the rule had become separable, RAP would be implicated.

However, if they are specifically assignable within the grant of title, that could violate RAP

Whenever heirs and assigns hold a right of first refusal, will violate RAP. However, if there is an ascertainable group of people, no RAP problem.

Exception: OPTION of first refusal.

Question 229

What is the “reformation” doctrine?

Answer 229

When there is a MUTUAL mistake or inconsistency in the description of property in a deed, the court can “reform” the deed to reflect the actual intention of the parties.

As long as the parties were in agreement as to the terms before the contract was reduced to writing, reformation can be had regardless of whether both parties signed the contract without noticing the deviation from the oral agreement or one party knew of the deviation and the other did not.

If both are mistaken as to the acreage but both understand the dimensions, dimensions take precedent.

Question 230

What is the doctrine of exoneration?

Answer 230

Loook in Conviser

Question 231

How can you appropriately convey marketable title over land you have adversely possessed?

Answer 231

First you must go to a judge and get a determination, otherwise you are not conveying marketable title. It’s a lawsuit to quiet title.

Question 232

What is an anti-lapse statute?

Answer 232

Common law: if a will beneficiary died before testator, will void.

Anti-lapse statute: saves the gift for a predeceasing beneficiary’s descendants if the beneficiary herself is a descendant of the testator

Question 233

What recourse does a junior interest have pre-foreclosure, in order to preserve its own mortgaage interest?

Answer 233

Junior mortgagee has the right to pay off the more senior mortgage (e.g. redeem it) to avoid being wiped out by its foreclosure.

When a mortgage is foreclosed, the purchaser at the sale will take title as it existed when the mortgage was placed on the property. Thus, foreclosure terminates interests junior to the mortgage being foreclosed but doesn’t affect senior interests.

Question 234

So imagine there is a foreclosure by a junior mortgagee, and the senior mortgage has been modified several times. Is the junior mortgagee taking the place subject to the modified version, or the original version?

Answer 234

The general rule is that when a mortgage is foreclosed, the buyer at the sale takes title as it existed when the mortgage was placed on the property. Thus, foreclosure will generally destroy all interests junior to the mortgage being foreclose, but will not discharge senior interests.

Where the landowners enter into a modification agreement with the senior mortgagee, raising its interest rate or otherwise making it more burdensome, the junior mortgagee will be given priority over the modification.

Question 235

How is an option for right of first refusal classified?

Answer 235

A covenant that runs with the land (b/c touches and concerns the land).