property mbe Flashcards

1
Q

A landowner died, validly devising his land to his wife “for life or until remarriage, then to” their daughter. Shortly after the landowner’s death, his daughter executed an instrument in the proper form of a deed, purporting to convey the land to her friend. A year later, the daughter died intestate, with her mother, the original landowner’s wife, as her sole heir. The following month, the wife remarried. The wife then executed an instrument in the proper form of a deed, purporting to convey the land to her new husband as a wedding gift.Who now owns what interest in the land?

A

(A) The daughter’s friend owns the fee simple.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

In the most recent deed in the chain of title to a tract of land, a man conveyed the land as follows: “To my niece and her heirs and assigns in fee simple until my niece’s daughter marries, and then to my niece’s daughter and her heirs and assigns in fee simple.” There is no applicable statute, and the common law Rule Against Perpetuities has not been modified in
the jurisdiction. Which of the following is the most accurate statement concerning the title to the land?

A

(D) The niece has a defeasible fee simple determinable and the daughter
has an executory interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Thirty years ago, a landowner conveyed land by warranty deed to a church (a charity) “so long as the land herein conveyed is used as the site for the principal religious edifice maintained by said church.” Twenty years ago, the landowner died intestate, survived by a single heir. One year ago, the church dissolved and its church building situated on the land was demolished. There is no applicable statute. The common law Rule Against Perpetuities is unmodified in the jurisdiction. In an appropriate action, the landowner’s heir and the attorney general, who is the appropriate official to assert public interests in charitable trusts, contest the right to the land. In this action, who will prevail?

A

(A) The landowner’s heir, as successor to the landowner’s
possibility of reverter.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A landowner lawfully subdivided his land into 10 large lots. The recorded subdivision plan imposed no restrictions on any of the 10 lots. Within two months after recording the plan, the landowner conveyed Lot 1 to a buyer, by a deed that contained no restrictions on the lot’s use. There was then a lull in sales. Two years later, the real estate market in the state had generally improved, and during the next six months, the landowner sold and conveyed eight of the remaining nine lots. In each of the eight deeds of conveyance, the landowner included the following language: “It is a term and condition of this conveyance, which shall be a covenant running with the land for the benefit of each of the 10 lots [with an appropriate reference to the recorded subdivision plan], that for 15 years from the date of recording of the plan, no use shall be made of the premises herein conveyed except for single-family residential purposes.” The buyer of Lot 1 had actual knowledge of what the landowner had done. The landowner
included the quoted language in part because the municipality had amended its zoning ordinance a year earlier to permit professional offices in any residential zone. Shortly after the landowner’s most recent sale, when he owned only one unsold lot, the buyer of Lot 1 constructed a one-story house on Lot 1 and then conveyed Lot 1 to a doctor. The deed to the doctor contained no reference to any restriction on the use of Lot 1. The doctor applied for an appropriate certificate of occupancy to enable her to use a part of the house on Lot 1 as a medical office. The landowner, on behalf of himself as the owner of the unsold lot, and on behalf of the other lot owners, sued to enjoin the doctor from carrying out her plans and to impose the quoted restriction on Lot 1. Who is likely to prevail?

A

(A) The doctor, because Lot 1 was conveyed without the restrictive covenant in the deed to the first buyer and the subsequent deed to the doctor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

A landowner orally gave his neighbor permission to share the use of a private road on the landowner’s land so that the neighbor could have more convenient access to the neighbor’s land. Only the landowner maintained the road. After the neighbor had used the road on a daily basis for three years, the landowner conveyed his land to a grantee, who immediately notified the neighbor that the neighbor was not to use the road. The neighbor sued the grantee, seeking a declaration that the neighbor had a right to continue to use the road. Who is likely to prevail?

A

(B) The grantee, because the neighbor had a license that the grantee could terminate at any time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

A man contacted his lawyer regarding his right to use a path that was on his neighbor’s vacant land. Fifteen years ago, after part of a path located on his land and connecting his cabin to the public highway washed out, the man cleared a small part of his neighbor’s land and rerouted a section of the path through the neighbor’s land. Twelve years ago, the neighbor leased her land to some hunters. For the next 12 years, the hunters and the man who had rerouted the path used the path for access to the highway. A month ago, the neighbor discovered that part of the path was on her land. The neighbor told the man that she had not given him permission to cross her land and that she would be closing the rerouted path after 90 days. The man’s land and the neighbor’s land have never been in common ownership. The period of time necessary to acquire rights by prescription in the jurisdiction is 10 years. The period of time necessary to acquire title by adverse possession in the jurisdiction is 10 years. What should the lawyer tell the man concerning his right to use the rerouted path on the neighbor’s land?

A

(C) The man has an easement by prescription to use the path.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

A businesswoman owned two adjoining tracts of land, one that was improved with a commercial rental building and another that was vacant and abutted a river. Twenty years ago, the businesswoman conveyed the vacant tract to a grantee by a warranty deed that the
businesswoman signed but the grantee did not. The deed contained a covenant by the grantee as owner of the vacant tract that neither he nor his heirs or assigns would “erect any building” on the vacant tract, in order to preserve the view of the river from the commercial building on the improved tract. The grantee intended to use the vacant tract as a nature preserve. The grantee promptly and properly recorded the deed. Last year, the businesswoman conveyed the improved tract to a businessman. A month later, the grantee died, devising all of his property, including the vacant land, to his cousin. Six weeks ago, the cousin began construction of a building on the vacant tract. The businessman objected and sued to enjoin construction of the building. Who is likely to prevail?

A

(B) The businessman, because the cousin is bound by the covenant made by the grantee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

A woman died, devising land that she owned in another state to her daughter, who was then 17 years old. A neighbor who owned the property immediately adjacent to the land wrongfully began to possess the land at that time. For 24 of the next 25 years, the neighbor planted and harvested crops on the land, hunted on it, and parked cars on it. However, in the
sixth year after he first took possession of the land, the neighbor neither planted crops nor hunted nor parked cars on the land because he spent that entire year living in Europe. The neighbor built a small gardening shed on the land, but he never built a residence on it. When the daughter was 28, she was declared mentally incompetent and had a conservator appointed to oversee her affairs. Since then, she has continuously resided in a care facility. The applicable statute of limitations provides as follows: “An ejectment action shall be brought within 21 years after the cause of action accrues, but if the person entitled to bring the cause of action is under age 18 or mentally incompetent at the time the cause of action accrues, it may be brought by such person within 10 years after attaining age 18 or after the person becomes Competent.” If the daughter’s conservator wins an ejectment action against the neighbor, what will be the most likely explanation?

A

(D) The neighbor was not in continuous possession of the land for 21 years.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A man owned a large tract of land. The eastern portion of the land was undeveloped and unused. A farmer owned a farm, the western border of which was along the eastern border of the man’s land. The two tracts of land had never been in common ownership.Five years ago, the farmer asked the man for permission to use a designated two acres of the eastern portion of the man’s land to enlarge her farm’s irrigation facilities. The man orally gave his permission for such use. Since then, the farmer has invested substantial amounts of money and effort each year to develop and maintain the irrigation facilities within the two-acre parcel. The man has been fully aware of the farmer’s actions. Nothing regarding this matter was ever reduced to writing. Last year, the man gave the entire tract of land as a gift to his nephew. The deed of gift made no reference to the farmer or the two-acre parcel. When the nephew had the land surveyed and discovered the facts, he notified the farmer in writing, “Your license to use the two-acre parcel has been terminated.” The notice instructed the farmer to remove her facilities from the two- acre parcel immediately. The farmer refused the nephew’s demand. In an appropriate action between the nephew and the farmer to determine whether the farmer had a right to continue to use the two-acre parcel, the court ruled in favor of the farmer.
What is the most likely reason for the court’s ruling?

A

(A) The investments and efforts by the farmer in reliance on the license estop the man, and now the nephew as the man’s donee, from terminating the license.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

For 22 years, the land records have shown a man as the owner of an 80-acre farm. The man has never physically occupied the land. Nineteen years ago, a woman entered the farm. The character and duration of the woman’s possession of the farm caused her to become the owner of the farm under the adverse possession law of the jurisdiction. Three years ago, when the woman was not present, a neighbor took over possession of the farm. The neighbor repaired fences, put up “no trespassing” signs, and did some plowing. When the woman returned, she found the neighbor in possession of the farm. The neighbor vigorously rejected the woman’s claimed right to possession and threatened force. The woman withdrew. The woman then went to the man and told him of the history of activity on the farm. The woman orally told the man that she had been wrong to try to take his farm. She expressly waived any claim she had to the land. The man thanked her. Last month, unsure of the effect of her conversation with the man, the woman executed a deed purporting to convey the farm to her son. The son promptly recorded the deed. The period of time to acquire title by adverse possession in the jurisdiction is 10 years. Who now owns the farm?

A

(C) The son, because he succeeded to the woman’s adverse possession title by privity of conveyance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

A landowner executed an instrument in the proper form of a deed, purporting to convey his land to a friend. The landowner handed the instrument to the friend, saying, “This is yours, but please do not record it until after I am dead. Otherwise, it will cause me no end of trouble with my relatives.” Two days later, the landowner asked the friend to return the deed to him because he had decided that he should devise the land to the friend by will rather than by deed. The friend said that he would destroy the deed and a day or so later falsely told the landowner that the deed had been destroyed. Six months ago, the landowner, who had never executed a will, died intestate, survived by a daughter as his sole heir. The day after the landowner’s death, the friend recorded the deed from him. As soon as the daughter discovered this recording and the friend’s claim to the land, she brought an appropriate action against the friend to quiet title to the land. For whom should the court hold?

A

(C) The friend, because the deed was delivered to him.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A grantor executed an instrument in the proper form of a warranty deed purporting to convey a tract of land to his church. The granting clause of the instrument ran to the church “and its successors forever, so long as the premises are used for church purposes.” The church took possession of the land and used it as its site of worship for many years. Subsequently, the church decided to relocate and entered into a valid written contract to sell the land to a buyer for a substantial price. The buyer wanted to use the land as a site for business activities and objected to the church’s title. The contract contained no provision relating to the quality of title the church was bound to convey. There is no applicable statute. When the buyer refused to close, the church sued the buyer for specific performance and properly joined the grantor as a party. Is the church likely to prevail?

A

(A) No, because the grantor’s interest prevents the church’s title from
being marketable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

A seller and a purchaser signed a contract for the sale of a 60-year-old house. The contract required a warranty deed to be given at closing. The contract was silent regarding the condition of the house, and the purchaser did not ask. The purchaser received a warranty deed with all covenants of title at the closing and promptly recorded the deed. Approximately one month after the closing, the furnace in the house stopped working, the basement flooded, and the roof leaked so badly that the second floor could not be occupied. The seller, when told of the house’s condition, was genuinely surprised. There is no applicable statute. The purchaser has sued the seller for damages. Will the purchaser likely be successful?

A

(C) No, because the seller gave no warranty regarding the condition of the house.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

A seller entered into a written contract to sell a tract of land to an investor. The contract made no mention of the quality of title to be conveyed. The seller and the investor later completed the sale, and the seller delivered a warranty deed to the investor. Soon thereafter, the value of the land increased dramatically. The investor entered into a written contract to sell the land to a buyer. The contract between the investor and the buyer expressly provided that the investor would convey a marketable title. The buyer’s attorney discovered that the title to the land was not marketable and had not been marketable when the original seller had conveyed to the investor. The buyer refused to complete the sale. The investor sued the original seller for breach of contract, claiming damages from the seller’s failure to convey marketable title, which resulted in the investor’s loss of the sale to the subsequent buyer. Who is likely to prevail on this count?

A

(C) The original seller, because her contract obligations as to title
merged into the deed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When a homeowner became ill, he properly executed a deed sufficient to convey his home to his
nephew, who was then serving overseas in the military. Two persons signed as witnesses to qualify the deed for recording under an applicable statute. The homeowner handed the deed to his nephew’s friend and said, “I want [the nephew] to have my home. Please take this deed for him.” Shortly thereafter, the nephew’s friend learned that the homeowner’s death was imminent. One day before the homeowner’s death, the nephew’s friend recorded the deed. The nephew returned home shortly after the homeowner’s death, learned about the deed, and took possession of the home. The homeowner had died intestate, leaving a daughter as his sole heir. When she asserted ownership of the home, the nephew brought an appropriate action against her to determine title. The law of the jurisdiction requires only two witnesses for a will to be properly executed. If the court rules for the nephew and against the daughter, what will be the most likely explanation?

A

(A) The deed was delivered when the homeowner handed it to the nephew’s friend.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

An uncle was the record title holder of a vacant tract of land. He often told friends that he would
leave the land to his nephew in his will. The nephew knew of these conversations. Prior to the
uncle’s death, the nephew conveyed the land by warranty deed to a woman for $10,000. She did
not conduct a title search of the land before she accepted the deed from the nephew. She
promptly and properly recorded her deed. Last month, the uncle died, leaving the land to the
nephew in his duly probated will. Both the nephew and the woman now claim ownership of the
land. The nephew has offered to return the $10,000 to the woman.
Who has title to the land?

A

C) The woman, because of the doctrine of estoppel by deed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

A buyer and a seller entered into a written contract for the sale of an identified parcel of land. The contract expressly provided that the buyer was to pay $150,000 cash for the land at the time of the closing but did not state the closing date. The parties had not agreed on the closing date because the buyer was not sure at the time the contract was signed how she would raise the cash.
Fifteen days after the contract was signed, the seller learned that he could sell the land to a third party for $200,000. The seller asked the buyer if she would agree to rescind the contract. The buyer refused. The seller then told her that he would not complete the transaction, contending that the contract was unenforceable under the statute of frauds because an essential element (time for performance) was not agreed upon by the parties and was not expressly stated in the written agreement. The seller sold the land to the third party. The buyer brought an appropriate action against the seller for breach of contract. For which party is the court likely to find?

A

(B) The buyer, because the court will infer that performance within a reasonable time was intended.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Thirty years ago, a landowner conveyed land by warranty deed to a church (a charity) “so long as the land herein conveyed is used as the site for the principal religious edifice maintained by said
Church.” Twenty years ago, the landowner died intestate, survived by a single heir.
One year ago, the church dissolved and its church building situated on the land was demolished.
There is no applicable statute. The common law Rule Against Perpetuities is unmodified in the
Jurisdiction. In an appropriate action, the landowner’s heir and the attorney general, who is the appropriate official to assert public interests in charitable trusts, contest the right to the land.
In this action, who will prevail?

A

(A) The landowner’s heir, as successor to the landowner’s possibility of reverter.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Twenty-five years ago, a man who owned a 45-acre tract of land conveyed 40 of the 45 acres to a developer by warranty deed. The man retained the rear five-acre portion of the land and continues to live there in a large farmhouse. The deed to the 40-acre tract was promptly recorded. It contained the following language: “It is a term and condition of this deed, which shall be a covenant running with the land and binding on all owners, their heirs and assigns, that no use shall be made of the 40-acre tract of land except for residential purposes.” Subsequently, the developer fully developed the 40-acre tract into a residential subdivision consisting of 40 lots with a single-family residence on each lot. Although there have been multiple transfers of ownership of each of the 40 lots within the subdivision, none of them included a reference to the quoted provision in the deed from the man to the developer, nor did any deed to a subdivision lot create any new covenants restricting use. Last year, a major new medical center was constructed adjacent to the subdivision. A doctor who owns a house in the subdivision wishes to relocate her medical office to her house. For the first time, the doctor learned of the restrictive covenant in the deed from the man to the developer. The applicable zoning ordinance permits the doctor’s intended use. The man, as owner of the five-acre tract however, objects to the doctor’s proposed use of her property. There are no governing statutes other than the zoning code. The common law Rule Against Perpetuities is unmodified in the jurisdiction. May the doctor convert her house in the subdivision into a medical office?

A

(B) No, because the man owns property benefitted by the original restrictive covenant and has a right to enforce it.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

A grantor owned two tracts of land, one of 15 acres and another of 5 acres. The two tracts were a mile apart. Fifteen years ago, the grantor conveyed the smaller tract to a grantee. The grantor retained the larger tract. The deed to the grantee contained, in addition to proper legal descriptions of both properties and identifications of the parties, the following language: “I, the grantor, bind myself and my heirs and assigns that in the event that the larger tract that I now retain is ever offered for sale, I will notify the grantee and his heirs and assigns in writing, and the grantee and his heirs and assigns shall have the right to purchase the larger tract for its fair
market value as determined by a board consisting of three qualified expert independent real estate appraisers.” With appropriate references to the other property and the parties, there followed a reciprocal provision that conferred upon the grantor and her heirs and assigns a similar right to purchase the smaller tract, purportedly binding the grantee and his heirs and assigns. Ten years ago, a corporation acquired the larger tract from the grantor. At that time, the grantee had no interest in acquiring the larger tract and by
an appropriate written document released any interest he or his heirs or assigns might have had in the larger tract. Last year, the grantee died. The smaller tract passed by the grantee’s will to his daughter. She has decided to sell the smaller tract. However, because she believes that the corporation has been a very poor steward of the larger tract, she refuses to sell the smaller tract to the corporation even though she has offered it for sale in the local real estate market. The corporation has brought an appropriate action for specific performance of the right of first refusal after taking all of the necessary preliminary steps in its effort to exercise its right to purchase the smaller tract. The daughter has asserted all possible defenses. The common law Rule Against Perpetuities is unmodified in the jurisdiction, and there are no applicable statutes. If the court rules for the daughter, what will be the likely reason?

A

(A) The provision setting out the right to purchase violates the Rule Against Perpetuities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

In the most recent deed in the chain of title to a tract of land, a man conveyed the
land as follows: “To my niece and her heirs and assigns in fee simple until my niece’s
daughter marries, and then to my niece’s daughter and her heirs and assigns in fee
Simple.” There is no applicable statute, and the common law Rule Against Perpetuities has not
been modified in the jurisdiction. Which of the following is the most accurate statement concerning the title to the
Land?

A

(D) The niece has a defeasible fee simply determinable and the daughter has an executory interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

A landowner conveyed his land by quitclaim deed to his daughter and son “as joint tenants in
fee simple.” The language of the deed was sufficient to create a common law joint tenancy
with right of survivorship, which is unmodified by statute. The daughter then duly executed a
will devising her interest in the land to a friend. The the son duly executed a will devising his
interest in the land to a cousin. The son died, and later the daughter died. Neither had ever
married. The daughter’s friend and the cousin survived. After both wills have been duly probated, who owns what interest in the land?

A

(D) The daughter’s friend owns the fee simple.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

A mother who died testate devised her farm to her son and her daughter as “joint tenants with right of survivorship.” The language of the will was sufficient to create a common law joint tenancy with right of survivorship, which is unmodified by statute in the jurisdiction. After the mother’s death and with the daughter’s permission, the son took sole possession of the farm and agreed to pay the daughter a stipulated monthly rent. Several years later, the son defaulted on a personal loan, and his creditor obtained a judgment against him for $30,000. The creditor promptly and properly filed the judgment. A statute of the jurisdiction provides: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” Six months later, the son died. There are no other applicable statutes. Is the creditor entitled to enforce its judgment lien against the farm?

A

(A) No, because the daughter became sole owner of the farm free and clear of the creditor’s judgment lien when the son died.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Seven years ago, a man, his sister, and his cousin became equal owners, as tenants in common, of a house. Until a year ago, the man lived in the house alone. The sister and the cousin are longtime residents of another state. One year ago, the man moved to an apartment and rented the house to a tenant for three years under a lease that the man and the tenant both signed. The tenant has since paid the rent each month to the man. Recently, the sister and the cousin learned about the rental. They brought an appropriate action against the tenant to have the lease declared void and to have the tenant evicted. The tenant raised all available defenses.

A

(D) The lease is valid, and the tenant is not evicted but must share possession with the sister and the cousin.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

A husband and wife acquired land as common law joint tenants with right of
survivorship. One year later, without his wife’s knowledge, the husband executed a
will devising the land to his best friend. The husband subsequently died.
Is the wife now the sole owner of the land?

A

(D) Yes, because the devise to the friend did not sever the joint tenancy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

A landlord leased an apartment to a tenant by written lease for two years ending on the last day of a recent month. The lease provided for $700 in monthly rent. The tenant occupied the apartment and paid the rent for the first 15 months of the lease term, until he moved to another city to take a new job. Without consulting the landlord, the tenant moved a friend into the apartment and signed an informal writing transferring to the friend his “lease rights” for the remaining nine months of the lease. The friend made the next four monthly $700 rent payments to the landlord. For the final five months of the lease term, no rent was paid by anyone, and the friend moved out with three months left of the lease term. The landlord was on an extended trip abroad, and did not learn of the default and the vacancy until the end of the lease term. The landlord has sued the tenant and the friend, jointly and severally, for $3,500 for the last five months’ rent. What is the likely outcome of the lawsuit?

A

(A) Both the tenant and the friend are liable for the full $3,500, because the tenant is liable on privity of contract and the friend is liable on privity of estate as assignee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Six years ago, a landlord and a tenant entered into a 10-year commercial lease of land. The written lease provided that if a public entity under the power of eminent domain condemned any part of the land but not all of it, the lease would terminate and the landlord would receive the entire condemnation award. Thereafter, the city condemned approximately two-thirds of the land. The tenant notified the city and the landlord that an independent appraisal of the value of the tenant’s possessory interest established that it substantially exceeded the tenant’s obligation under the lease and that the tenant was entitled to share the award. The appraisal was accurate.
In an appropriate action among the landlord, the tenant, and the city as to the right of the tenant to a portion of the condemnation award, for whom will the court likely find?

A

(B) The landlord, because the parties specifically agreed as to the consequences of a partial condemnation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

A landlord and a tenant orally agreed to a commercial tenancy for a term of six months beginning on July 1. Rent was to be paid by the first day of each month, and the tenant paid the first month’s rent at the time of the agreement. When the tenant arrived at the leased premises on July 1, the tenant learned that the previous tenant had not vacated the premises at the end of her lease term on May 31 and did not intend to vacate. The tenant then successfully sued the previous tenant for possession. The tenant did not inform the landlord of the eviction action until after the tenant received possession. The tenant then sued the landlord, claiming damages for that portion of the lease period during which the tenant was not in possession. If the court finds for the landlord, what will be the most likely explanation?

A

B) The landlord had delivered the legal right of possession to the tenant.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A landlord leased a building to a tenant for a 10-year term. Two years after the term began, the tenant subleased the building to a sublessee for a 5-year term. Under the terms of the sublease, the sublessee agreed to make monthly rent payments to the Tenant. Although the sublessee made timely rent payments to the tenant, the tenant did not forward four of those payments to the landlord. The tenant has left the jurisdiction and cannot be found. The landlord has sued the sublessee for the unpaid rent. There is no applicable statute.If the court rules that the sublessee is

A

(C) The sublessee is not in privity of estate or contract with the landlord.

30
Q

A tenant leased a commercial property from a landlord for a 12-year term. The property included a large store and a parking lot. At the start of the lease period, the tenant took possession and with the landlord’s oral consent installed counters, display cases, shelving, and special lighting. Both parties complied with all lease terms. The lease is set to expire next month. Two weeks ago, when the landlord contacted the tenant about a possible lease renewal, she learned that the tenant had decided not to renew the lease, and that the tenant planned to remove all of the above-listed items on or before the lease termination date. The landlord claimed that all the items had become part of the real estate and had to remain on the premises. The tenant asserted his right and intention to remove all the items. Both the lease and the statutes of the jurisdiction are silent on the matter in dispute. At the time the landlord consented and the tenant installed the items, nothing was said about the tenant’s right to retain or remove the items. The landlord has sued the tenant to enjoin his removal of the items. How is the court likely to rule?

A

(C) For the tenant, provided that the tenant reasonably restores the premises to the prior condition or pays for the cost of restoration.

31
Q

A landowner lawfully subdivided his land into 10 large lots. The recorded subdivision plan imposed no restrictions on any of the 10 lots. Within two months after recording the plan, the landowner conveyed Lot 1 to a buyer, by a deed that contained no restrictions on the lot’s use. There was then a lull in sales. Two years later, the real estate market in the state had generally improved, and during the next six months, the landowner sold and conveyed eight of the remaining nine lots. In each of the eight deeds of conveyance, the landowner included the following language: “It is a term and condition of this conveyance, which shall be a covenant running with the land for the benefit of each of the 10 lots [with an appropriate reference to the recorded subdivision plan], that for 15 years from the date of recording of the plan, no use shall be made of the premises herein conveyed except for single-family residential purposes.” The buyer of Lot 1 had actual knowledge of what the landowner had done. The landowner included the quoted language in part because the municipality had amended its zoning ordinance a year earlier to permit professional offices in any residential zone. Shortly after the landowner’s most recent sale, when he owned only one unsold lot, the buyer of Lot 1 constructed a one-story house on Lot 1 and then conveyed Lot 1 to a doctor. The deed to the doctor contained no reference to any restriction on the use of Lot 1. The doctor applied for an appropriate certificate of occupancy to enable her to use a part of the house on Lot 1 as a medical office. The landowner, on behalf of
himself as the owner of the unsold lot, and on behalf of the other lot owners, sued to enjoin the doctor from carrying out her plans and to impose the quoted restriction on Lot 1.
Who is likely to prevail?

A

(A) The doctor, because Lot 1 was conveyed without the restrictive covenant in the deed to the first buyer and the subsequent deed to the doctor.

32
Q

A woman died testate. In her will, she devised a farm she owned to her husband for life, remainder to her niece. Her will did not specify the duties of the husband and the niece with regard to maintenance and expenses related to the farm. The husband took sole possession of the farm, did not farm the land, and did not rent the land to a third person, although the fair rental value was substantial. For two years in a row after the woman died, the county assessor sent the tax bills to the niece, but the niece did not pay the bills, because she and the husband could not agree on who should pay them. Finally, the niece paid the taxes to avoid a tax foreclosure sale. The niece then sued the husband for reimbursement for the two years’ worth of property taxes. There is no applicable statute. Is the niece likely to prevail?

A

(D) Yes, because the niece paid an obligation that was the sole responsibility of the husband.

33
Q

A landowner orally gave his neighbor permission to share the use of a private road on the landowner’s land so that the neighbor could have more convenient access to the neighbor’s land. Only the landowner maintained the road. After the neighbor had used the road on a daily basis for three years, the landowner conveyed his land to a grantee, who immediately notified the neighbor that the neighbor was not to use the road. The neighbor sued the grantee, seeking a declaration that the neighbor had a right to continue to use the road.

A

(B) The grantee, because the neighbor had a license that the grantee could terminate at any time.

34
Q

A man contacted his lawyer regarding his right to use a path that was on his neighbor’s vacant land. Fifteen years ago, after part of a path located on his land and connecting his cabin to the public highway washed out, the man cleared a small part of his neighbor’s land and rerouted a section of the path through the neighbor’s land.Twelve years ago, the neighbor leased her land to some hunters. For the next 12 years, the hunters and the man who had rerouted the path and used the path for access to the highway. A month ago, the neighbor discovered that part of the path was on her land. The neighbor told the man that she had not given him permission to cross her land and that she would be closing the rerouted path after 90 days. The man’s land and the neighbor’s land have never been in common ownership. The period of time necessary to acquire rights by prescription in the jurisdiction is 10 years. The period of time necessary to acquire title by adverse possession in the jurisdiction is 10 years. What should the lawyer tell the man concerning his right to use the rerouted path on the neighbor’s land?

A

(C) The man has an easement by prescription to use the path.

35
Q

A businesswoman owned two adjoining tracts of land, one that was improved with a commercial rental building and another that was vacant and abutted a river. Twenty years ago, the businesswoman conveyed the vacant tract to a grantee by a warranty deed that the
businesswoman signed but the grantee did not. The deed contained a covenant by the grantee as owner of the vacant tract that neither he nor his heirs or assigns would “erect any building” on the vacant tract, in order to preserve the view of the river from the commercial building on the improved tract. The grantee intended to use the vacant tract as a nature preserve. The grantee promptly and properly recorded the deed. Last year, the businesswoman conveyed the improved tract to a businessman. A month later, the grantee died, devising all of his property, including the vacant land, to his cousin. Six weeks ago, the cousin began construction of a building on the vacant tract. The businessman objected and sued to enjoin construction of the building.
Who is likely to prevail?

A

(B) The businessman, because the cousin is bound by the covenant made by the grantee.

36
Q

A woman died, devising land that she owned in another state to her daughter, who was then 17 years old. A neighbor who owned the property immediately adjacent to the land wrongfully began to possess the land at that time. For 24 of the next 25 years, the neighbor planted and harvested crops on the land, hunted on it, and parked cars on it. However, in the sixth year after he first took possession of the land, the neighbor neither planted crops nor hunted nor parked cars on the land because he spent that entire year living in Europe. The neighbor built a small gardening shed on the land, but he never built a residence on it. When the daughter was 28, she was declared mentally incompetent and had a conservator appointed to oversee her affairs. Since then, she has continuously resided in a care facility. The applicable statute of limitations provides as follows: “An ejectment action shall be brought within 21 years after the cause of action accrues, but if the person entitled to bring the cause of action is under age 18 or mentally incompetent at the time the cause of action accrues, it may be brought by such person within 10 years after attaining age 18 or after the person becomes Competent.” If the daughter’s conservator wins an ejectment action against the neighbor, what will be the most likely explanation?

A

(D) The neighbor was not in continuous possession of the land for 21 years.

37
Q

A man owned a large tract of land. The eastern portion of the land was undeveloped and unused. A farmer owned a farm, the western border of which was along the eastern border of the man’s land. The two tracts of land had never been in common ownership. Five years ago, the farmer asked the man for permission to use a designated two acres of the eastern portion of the man’s land to enlarge her farm’s irrigation facilities. The man orally gave his permission for such use. Since then, the farmer has invested substantial amounts of money and effort each year to develop and maintain the irrigation facilities within the two-acre parcel. The man has been fully aware of the farmer’s actions. Nothing regarding this matter was ever reduced to writing. Last year, the man gave the entire tract of land as a gift to his nephew. The deed of gift made no reference to the farmer or the two-acre parcel. When the nephew had the land surveyed and discovered the facts, he notified the farmer in writing, “Your license to use the two-acre parcel has been terminated.” The notice instructed the farmer to remove her facilities from the two- acre parcel immediately. The farmer refused the nephew’s demand. In an appropriate action between the nephew and the farmer to determine whether the farmer had a right to continue to use the
two-acre parcel, the court ruled in favor of the farmer. What is the most likely reason for the court’s ruling?

A

(A) The investments and efforts by the farmer in reliance on the license estop the
man, and now the nephew as the man’s donee, from terminating the license.

38
Q

For 22 years, the land records have shown a man as the owner of an 80-acre farm. The man has never physically occupied the land. Nineteen years ago, a woman entered the farm. The character and duration of the woman’s possession of the farm caused her to become the owner of the farm under the adverse possession law of the jurisdiction. Three years ago, when the woman was not present, a neighbor took over possession of the farm. The neighbor repaired fences, put up “no trespassing” signs, and did some plowing. When the woman returned, she found the neighbor in possession of the farm. The neighbor vigorously rejected the woman’s claimed right to possession and threatened force. The woman withdrew. The woman then went to the man and told him of the history of activity on the farm. The woman orally told the man that she had been
wrong to try to take his farm. She expressly waived any claim she had to the land. The man thanked her. Last month, unsure of the effect of her conversation with the man, the woman executed a deed purporting to convey the farm to her son. The son promptly recorded the deed.
The period of time to acquire title by adverse possession in the jurisdiction is 10 years. Who now owns the farm?

A

(C) The son, because he succeeded to the woman’s adverse possession title by privity of conveyance.

39
Q

A landowner executed an instrument in the proper form of a deed, purporting to convey his land to a friend. The landowner handed the instrument to the friend, saying, “This is yours, but please do not record it until after I am dead. Otherwise, it will cause me no end of trouble with my relatives.” Two days later, the landowner asked the friend to return the deed to him because he had decided that he should devise the land to the friend by will rather than by deed. The friend said that he would destroy the deed and a day or so later falsely told the landowner that the deed had been destroyed. Six months ago, the landowner, who had never executed a will, died intestate, survived by a daughter as his sole heir. The day after the landowner’s death, the friend recorded the deed from him. As soon as the daughter discovered this recording and the friend’s claim to the land, she brought an appropriate action against the friend to quiet title to the land. For whom should the court hold?

A

(C) The friend, because the deed was delivered to him.

40
Q

A grantor executed an instrument in the proper form of a warranty deed purporting to convey a tract of land to his church. The granting clause of the instrument ran to the church “and its successors forever, so long as the premises are used for church purposes.” The church took possession of the land and used it as its site of worship for many years. Subsequently, the church decided to relocate and entered into a valid written contract to sell the land to a buyer for a substantial price. The buyer wanted to use the land as a site for business activities and objected to the church’s title. The contract contained no provision relating to the quality of title the church was bound to convey. There is no applicable statute. When the buyer refused to close, the church sued the buyer for specific performance and properly joined the grantor as a party. Is the church likely to prevail?

A

(A) No, because the grantor’s interest prevents the church’s title from being marketable.

41
Q

A seller and a purchaser signed a contract for the sale of a 60-year-old house. The contract required a warranty deed to be given at closing. The contract was silent regarding the condition of the house, and the purchaser did not ask. The purchaser received a warranty deed with all covenants of title at the closing and promptly recorded the deed. Approximately one month after the closing, the furnace in the house stopped working, the basement flooded, and the roof leaked so badly that the second floor could not be occupied. The seller, when told of the house’s condition, was genuinely surprised. There is no applicable statute. The purchaser has sued the seller for damages. Will the purchaser likely be successful?

A

(C) No, because the seller gave no warranty regarding the condition of the house.

42
Q

A seller entered into a written contract to sell a tract of land to an investor. The contract made no mention of the quality of title to be conveyed. The seller and the investor later completed the sale, and the seller delivered a warranty deed to the investor. Soon thereafter, the value of the land increased dramatically. The investor entered into a written contract to sell the land to a buyer. The contract between the investor and the buyer expressly provided that the investor would convey a marketable title. The buyer’s attorney discovered that the title to the land was not marketable and had not been marketable when the original seller had conveyed to the investor. The buyer refused to complete the sale. The investor sued the original seller for breach of contract, claiming damages from the seller’s failure to convey marketable title, which resulted in the investor’s loss of the sale to the subsequent buyer. Who is likely to prevail on this count?

A

(C) The original seller, because her contract obligations as to title merged into the deed.

43
Q

When a homeowner became ill, he properly executed a deed sufficient to convey his home to his
nephew, who was then serving overseas in the military. Two persons signed as witnesses to qualify the deed for recording under an applicable statute. The homeowner handed the deed to his nephew’s friend and said, “I want [the nephew] to have my home. Please take this deed for him.” Shortly thereafter, the nephew’s friend learned that the homeowner’s death was imminent. One day before the homeowner’s death, the nephew’s friend recorded the deed. The nephew returned home shortly after the homeowner’s death, learned about the deed, and took possession of the home. The homeowner had died intestate, leaving a daughter as his sole heir. When she asserted ownership of the home, the nephew brought an appropriate action against her to determine title. The law of the jurisdiction requires only two witnesses for a will to be properly executed. If the court rules for the nephew and against the daughter, what will be the most likely explanation?

A

(A) The deed was delivered when the homeowner handed it to the nephew’s friend.

44
Q

An uncle was the record title holder of a vacant tract of land. He often told friends that he would
leave the land to his nephew in his will. The nephew knew of these conversations. Prior to the
uncle’s death, the nephew conveyed the land by warranty deed to a woman for $10,000. She did
not conduct a title search of the land before she accepted the deed from the nephew. She promptly and properly recorded her deed. Last month, the uncle died, leaving the land to the
nephew in his duly probated will. Both the nephew and the woman now claim ownership of the
land. The nephew has offered to return the $10,000 to the woman. Who has title to the land?

A

(C) The woman, because of the doctrine of estoppel by deed.

45
Q

A buyer and a seller entered into a written contract for the sale of an identified parcel of land. The contract expressly provided that the buyer was to pay $150,000 cash for the land at the time of the closing but did not state the closing date. The parties had not agreed on the closing date because the buyer was not sure at the time the contract was signed how she would raise the cash.
Fifteen days after the contract was signed, the seller learned that he could sell the land to a third party for $200,000. The seller asked the buyer if she would agree to rescind the contract. The buyer refused. The seller then told her that he would not complete the transaction, contending that the contract was unenforceable under the statute of frauds because an essential element (time for performance) was not agreed upon by the parties and was not expressly stated in the written agreement. The seller sold the land to the third party. The buyer brought an appropriate action against the seller for breach of contract. For which party is the court likely to find?

A

(B) The buyer, because the court will infer that performance within a reasonable time was intended.

46
Q

A landlord leased an apartment to a tenant by written lease for two years ending on the last day of a recent month. The lease provided for $700 in monthly rent. The tenant occupied the apartment and paid the rent for the first 15 months of the lease term, until he moved to another city to take a new job. Without consulting the landlord, the tenant moved a friend into the apartment and signed an informal writing transferring to the friend his “lease rights” for the remaining nine months of the lease. The friend made the next four monthly $700 rent payments to the landlord. For the final five months of the lease term, no rent was paid by anyone, and the friend moved out with three months left of the lease term. The landlord was on an
extended trip abroad, and did not learn of the default and the vacancy until the end of the lease term. The landlord has sued the tenant and the friend, jointly and severally, for $3,500 for the last five months’ rent. What is the likely outcome of the lawsuit?

A

(A) Both the tenant and the friend are liable for the full $3,500, because the tenant is liable on privity of contract and the friend is liable on privity of estate as assignee.

47
Q

Six years ago, a landlord and a tenant entered into a 10-year commercial lease of land. The written lease provided that if a public entity under the power of eminent domain condemned any part of the land but not all of it, the lease would terminate and the landlord would receive the entire condemnation award. Thereafter, the city condemned approximately two-thirds of the land. The tenant notified the city and the landlord that an independent appraisal of the value of the tenant’s possessory interest established that it substantially exceeded the tenant’s obligation under the lease and that the tenant was entitled to share the award. The appraisal was accurate.
In an appropriate action among the landlord, the tenant, and the city as to the right of the tenant to a portion of the condemnation award, for whom will the court likely find?

A

(B) The landlord, because the parties specifically agreed as to the consequences of a partial condemnation.

48
Q

A landlord and a tenant orally agreed to a commercial tenancy for a term of six months beginning on July 1. Rent was to be paid by the first day of each month, and the tenant paid the first month’s rent at the time of the agreement. When the tenant arrived at the leased premises on July 1, the tenant learned that the previous tenant had not vacated the premises at the end of her lease term on May 31 and did not intend to vacate. The tenant then successfully sued the previous tenant for possession. The tenant did not inform the landlord of the eviction action until after the tenant received possession. The tenant then sued the landlord, claiming damages for that portion of the lease period during which the tenant was not in possession. If the court finds for the landlord, what will be the most likely explanation?

A

(B) The landlord had delivered the legal right of possession to the tenant.

49
Q

A landlord leased a building to a tenant for a 10-year term. Two years after the term began, the tenant subleased the building to a sublessee for a 5-year term. Under the terms of the sublease, the sublessee agreed to make monthly rent payments to the Tenant. Although the sublessee made timely rent payments to the tenant, the tenant did not forward four of those payments to the landlord. The tenant has left the jurisdiction and cannot be found. The landlord has sued the sublessee for the unpaid rent. There is no applicable statute. If the court rules that the sublessee is not liable to the landlord for the unpaid rent, what will be the most likely reason?

A

(C) The sublessee is not in privity of estate or contract with the landlord.

50
Q

A tenant leased a commercial property from a landlord for a 12-year term. The property included a large store and a parking lot. At the start of the lease period, the tenant took possession and with the landlord’s oral consent installed counters, display cases, shelving, and special lighting. Both parties complied with all lease terms. The lease is set to expire next month. Two weeks ago, when the landlord contacted the tenant about a possible lease renewal, she learned that the tenant had decided not to renew the lease, and that the tenant planned to remove all of the above-listed items on or before the lease termination date. The landlord claimed that all the items had become part of the real estate and had to remain on the premises. The tenant asserted his right and intention to remove all the items. Both the lease and the statutes of the jurisdiction are silent on the matter in dispute. At the time the landlord consented and the tenant installed the items, nothing was said about the tenant’s right to retain or remove the items. The landlord has sued the tenant to enjoin his removal of the items. How is the court likely to rule?

A

(C) For the tenant, provided that the tenant reasonably restores the premises to the prior condition or pays for the cost of restoration.

51
Q

A rectangular parcel of undeveloped land contained three acres and had 150 feet of frontage on a public street. The applicable zoning ordinance required that a buildable lot contain at least two acres and have frontage of not less than 100 feet on a public street. A brother and sister owned the land as tenants in common, the brother owning a one-third interest and the sister owning a two-thirds interest. Neither of them owned any other real property. The sister brought an appropriate action to partition the land and proposed that a two-acre rectangular lot with 100 feet of frontage be set off to her and that a one-acre rectangular lot with 50 feet of frontage be set off to the brother. The brother’s defense included a demand that the land be sold and its proceeds be divided one-third to the brother and two-thirds to the sister. Who will prevail?

A

(B) The brother, because the zoning ordinance makes it impossible to divide the land
fairly.

52
Q

Twenty-five years ago, a man who owned a 45-acre tract of land conveyed 40 of the 45 acres to a developer by warranty deed. The man retained the rear five-acre portion of the land and continues to live there in a large farmhouse. The deed to the 40-acre tract was promptly recorded. It contained the following language: “It is a term and condition of this deed, which shall be a covenant running with the land and binding on all owners, their heirs and assigns, that no use shall be made of the 40-acre tract of land except for residential purposes.” Subsequently, the developer fully developed the 40-acre tract into a residential subdivision consisting of 40 lots with a single-family residence on each lot. Although there have been multiple transfers of ownership of each of the 40 lots within the subdivision, none of them included a reference to the
quoted provision in the deed from the man to the developer, nor did any deed to a subdivision lot create any new covenants restricting use. Last year, a major new medical center was constructed adjacent to the subdivision. A doctor who owns a house in the subdivision wishes to relocate her medical office to her house. For the first time, the doctor learned of the restrictive covenant in the deed from the man to the developer. The applicable zoning ordinance permits the doctor’s intended use. The man, as owner of the five-acre tract, however, objects to the doctor’s proposed use of her property. There are no governing statutes other than the zoning code. The common law Rule Against Perpetuities is unmodified in the jurisdiction. May the doctor convert her house in the subdivision into a medical office?

A

(B) No, because the man owns property benefitted by the original restrictive covenant and has a right to enforce it.

53
Q

A woman owned a house on a lot abutting a public street. Six months ago, the city validly revised its zoning ordinances and placed the woman’s lot and the surrounding lots abutting the public street from the north in a zone limited to residential use; the lots abutting the public street on the south side were zoned for both residential and light business use. The woman asked the city’s zoning appeals board to approve her proposal to operate a court- reporting service from her house. This type of use would be permitted on the south side of the public street and, in fact, one such business has existed there for several years. The board approved the woman’s proposal. Why?

A

(A) A variance was granted.

54
Q

A creditor received a valid judgment against a debtor and promptly filed the judgment in the county. Two years later, the debtor purchased land in the county and promptly recorded the warranty deed to the land. Subsequently, the debtor borrowed $30,000 from his aunt, signed a promissory note for that amount, and secured the note with a mortgage on the land. The mortgage was promptly recorded. The aunt failed to make a title search before making the loan. The debtor made no payment to the creditor and defaulted on the mortgage loan from his aunt. A valid judicial foreclosure proceeding was held, in which the creditor, the aunt, and the debtor were named parties. A dispute arose as to which lien had priority. A statute of the jurisdiction provides: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” A second statute of the jurisdiction provides: “No unrecorded conveyance or mortgage of real property shall be good against subsequent purchasers for value without notice, who shall first record.” Who has the prior lien?

A

(C) The creditor, because its judgment was filed first.

55
Q

An investor purchased a tract of commercial land, financing a large part of the purchase price with a loan from a business partner that was secured by a mortgage. The investor made the installment payments on the mortgage regularly for several years. Then the investor persuaded a neighbor to buy the land, subject to the mortgage to his partner. They expressly agreed that the neighbor would not assume and agree to pay the investor’s debt to the partner. The investor’s mortgage to the partner contained a due-on-sale clause stating, “If Mortgagor transfers his or her interest without the written consent of Mortgagee first obtained, then at Mortgagee’s option the entire principal balance of the debt secured by this Mortgage shall become immediately due and payable.” However, without seeking his partner’s consent, the investor conveyed the land to the neighbor, the deed stating that it was “subject to a mortgage to [the partner]” and giving details and recording data related to the mortgage. The neighbor took possession of the land and made several mortgage payments, which the partner accepted. Now, however, neither the neighbor nor the investor has made the last three mortgage payments. The partner has sued the neighbor for the amount of the delinquent payments. In this action, for whom should the court render judgment?

A

(A) The neighbor, because she did not assume and agree to pay the investor’s mortgage debt.

56
Q

A businessman owned a hotel, subject to a mortgage securing a debt he owed to a bank. The businessman later acquired a nearby parking garage, financing a part of the purchase price with a loan from a financing company, secured by a mortgage on the parking garage. Two years thereafter, the businessman defaulted on the loan owed to the bank, which caused the full amount of that loan to become immediately due and payable. The bank decided not to foreclose the mortgage on the hotel at that time, but instead properly sued for the full amount of the defaulted loan. The bank obtained and properly filed a judgment for that amount. A statute of the jurisdiction provides: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” There is no other applicable statute, except the statute providing for judicial foreclosure of mortgages, which places no restrictions on deficiency judgments. Shortly thereafter, the bank brought an appropriate action for judicial foreclosure of its mortgage on the hotel and of its judgment lien on the parking garage. The financing company was joined as a party defendant, and appropriately sued for foreclosure of its mortgage on the parking garage, which was also in default. All procedures were properly followed, and the confirmed foreclosure sales resulted in the following: The net proceeds of the sale of the hotel to a third party were $200,000 less than the bank’s mortgage balance. The net proceeds of the sale of the parking garage to a fourth party were $200,000 more than the financing company’s mortgage balance. How should the $200,000 surplus arising from the sale of the parking garage be distributed?

A

(A) It should be paid to the bank.

57
Q

A man borrowed money from a bank and executed a promissory note for the amount secured by a mortgage on an office building that he owned. Several years later, the man sold the building. As specified in the contract of sale, the deed to the buyer provided that the buyer agreed “to assume the existing mortgage debt” on the building. Subsequently, the buyer defaulted on the mortgage loan to the bank, and appropriate foreclosure proceedings were initiated. The foreclosure sale resulted in a deficiency. There is no applicable statute. Is the buyer liable for the deficiency?

A

(C) Yes, because the buyer assumed the mortgage and therefore became personally liable for the mortgage loan and any deficiency.

58
Q

A man owned property that he used as his residence. The man received a loan, secured by a mortgage on the property, from a bank. Later, the man defaulted on the loan. The bank then brought an appropriate action to foreclose the mortgage, was the sole bidder at the judicial sale, and received title to the property as a result of the foreclosure sale. Shortly after the foreclosure sale, the man received a substantial inheritance. He approached the bank to repurchase the property, but the bank had decided to build a branch office on the property and declined to sell. If the man prevails in an appropriate action to recover title to the property, what will be the most likely reason?

A

(D) The jurisdiction provides a statutory right of redemption.

59
Q

A farmer borrowed $100,000 from a bank and gave the bank a promissory note secured by a mortgage on the farm that she owned. The bank promptly recorded the mortgage, which contained a due-on-sale provision. A few years later, the farmer borrowed $5,000 from a second bank and gave that bank a promissory note secured by a mortgage on her farm. The bank promptly recorded the mortgage. Subsequently, the farmer defaulted on her obligation to the first bank, which then validly accelerated the debt and instituted nonjudicial foreclosure proceedings as permitted by the jurisdiction. The second bank received notice of the foreclosure sale but did not send a representative to the sale. At the foreclosure sale, a buyer who was not acting in collusion with the farmer outbid all other bidders and received a deed to the farm. Several months later, the original farmer repurchased her farm from the buyer, who executed a warranty deed transferring the farm to her. After the farmer promptly recorded that deed, the second bank commenced foreclosure proceedings on the farm. The farmer denied the validity of the second bank’s mortgage. Does the second bank continue to have a valid mortgage on the farm?

A

(C) No, because the purchase at the foreclosure sale by the buyer under these facts eliminated the second bank’s junior mortgage lien.

60
Q

A seller who owned land entered into a valid written agreement to sell the land to a buyer by installment purchase. The contract stipulated that the seller would deliver to the buyer, upon payment of the last installment due, “a warranty deed sufficient to convey a fee simple title.” The contract contained no other provision that could be construed as referring to title. The buyer entered into possession of the land. After making 10 of the 300 installment payments obligated under the contract, the buyer discovered that there was outstanding a valid and enforceable mortgage on the land, securing the payment of a debt in the amount of 25 percent of the purchase price that the buyer had agreed to pay. There was no evidence that the seller had ever been late in payments due under the mortgage, and there was no evidence of any danger of insolvency of the seller. The value of the land was then four times the amount due on the debt secured by the mortgage. The buyer quit possession of the land, stopped making payments on the contract, and demanded that the seller repay the amounts that the buyer had paid under the contract. After the seller refused the demand, the buyer sued the seller to recover damages for the seller’s alleged breach of the contract. Should damages be awarded to the buyer?

A

(D) No, because the time for the seller to deliver marketable title has not arrived.

61
Q

A landowner mortgaged her land to a nationally chartered bank as security for a loan. The mortgage provided that the bank could, at its option, declare the entire loan due and payable if all or any part of the land, or an interest therein, was sold or transferred without the bank’s prior written consent. Subsequently, the landowner wanted to sell the land to a neighbor by an installment land contract, but the bank refused to consent. The neighbor’s credit was good, and all mortgage payments to the bank were fully current. The landowner and the neighbor consulted an attorney about their proposed transaction, their desire to complete it, and the bank’s refusal to consent. What would the attorney’s best advice be?

A

(A) Even if the landowner transfers to the neighbor by land contract, the bank may accelerate the debt and foreclose if the full amount is not paid.

62
Q

Five years ago, an investor who owned a vacant lot in a residential area borrowed $25,000 from a friend and gave the friend a note for $25,000 due in five years, secured by a mortgage on the lot. The friend neglected to record the mortgage. The fair market value of the lot was then $25,000. Three years ago, the investor discovered that the friend had not recorded his mortgage and in consideration of $50,000 conveyed the lot to a buyer. The fair market value of the lot was then $50,000. The buyer knew nothing of the friend’s mortgage. One month thereafter, the friend discovered the sale to the buyer, recorded his $25,000 mortgage, and notified the buyer that he held a $25,000 mortgage on the lot. Two years ago, the buyer needed funds. Although she told her bank of the mortgage claimed by the investor’s friend, the bank loaned her $15,000, and she gave the bank a note for $15,000 due in two years secured by a mortgage on the lot. The bank promptly recorded the mortgage. At that time, the fair market value of the lot was $75,000. The recording act of the jurisdiction provides: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law.” Both notes are now due, and both the investor and the buyer have refused to pay. The lot is now worth only $50,000. What are the rights of the investor’s friend and the bank in the lot?

A

(D) Only the bank’s mortgage is an enforceable lien, because the buyer was an innocent purchaser for value.

63
Q

A landowner borrowed $100,000 from a lender and executed a valid mortgage on a commercial tract of land to secure the debt. The lender promptly recorded the mortgage. A year later, the landowner conveyed the same tract to a developer by a deed that expressly stated that the conveyance was subject to the mortgage to the lender and that the grantee expressly assumed and agreed to pay the mortgage obligation as part of the consideration for the purchase. The mortgage was
properly described in the deed, and the deed was properly executed by the landowner; however, because there was no provision or place in the deed for the developer to sign, he did not do so. The developer promptly recorded the deed. The developer made the monthly mortgage payments of principal and interest for six payments but then stopped payments and defaulted on the mortgage obligation. The lender properly instituted foreclosure procedures in accordance with the governing law. After the foreclosure sale, there was a $10,000 deficiency due to the lender. Both the landowner and the developer had sufficient assets to pay the deficiency. There is no applicable statute in the jurisdiction other than the statute relating to foreclosure proceedings. At the appropriate stage of the foreclosure action, which party will the court decide is responsible for payment of the deficiency?

A

(A) The developer, because he accepted delivery of the deed from the landowner and in so doing accepted the terms and conditions of the deed.

64
Q

Ten years ago, a seller sold land to a buyer, who financed the purchase price with a loan from a bank that was secured by a mortgage on the land. The buyer purchased a title insurance policy running to both the buyer and the bank, showing no liens on the property other than the buyer’s mortgage to the bank. Eight years ago, the buyer paid the mortgage in full. Seven years ago, the buyer sold the land to an investor by a full covenant and warranty deed without exceptions. Six years ago, the investor gave the land to a donee by a quitclaim deed. Last year, the donee discovered an outstanding mortgage on the land that predated all of these conveyances. As a result of a title examiner’s negligence, this mortgage was not disclosed in the title insurance policy issued to the buyer and the bank. Following this discovery, the donee successfully sued the buyer to recover the amount of the outstanding mortgage. If the buyer sues the title insurance company to recover the amount he paid to the donee, is he likely to prevail?

A

(C) Yes, because the buyer is protected by the title insurance policy even though he no longer owns the land.

65
Q

A woman acquired title to a four-acre lot. Several years later, she executed a mortgage on the lot to a bank to secure repayment of a $100,000 loan. Subsequently, the woman executed a mortgage on the same four-acre lot to a finance company to secure repayment of a $50,000 loan. Both mortgages were promptly recorded. The woman recently defaulted on both loans. The bank promptly initiated foreclosure proceedings and sent proper notice to all necessary parties. The current fair market value of the four-acre lot is $250,000. The finance company has filed a timely motion in the foreclosure proceeding asking the court to require the bank to first foreclose on two of the four acres in the four-acre lot. The bank opposes this motion and insists that it has the right to subject the entire four-acre lot to the foreclosure sale. Will the court grant the finance company’s motion?

A

(B) No, because the entire four-acre lot is subject to the bank’s senior mortgage.

66
Q

A man obtained a bank loan secured by a mortgage on an office building that he owned. After several years, the man conveyed the office building to a woman, who took the title subject to the mortgage. The deed to the woman was not recorded. The woman took immediate possession of the building and made the mortgage payments for several years. Subsequently, the woman stopped making payments on the mortgage loan, and the bank eventually commenced foreclosure proceedings in which the man and the woman were both named parties. At the foreclosure sale, a third party purchased the building for less than the outstanding balance on the mortgage loan. The bank then sought to collect the deficiency from the woman. Is the bank entitled to collect the deficiency from the woman?

A

(B) No, because the woman is not personally liable on the loan.

67
Q

A credit card company obtained and properly filed a judgment against a man after he failed to pay a $10,000 debt. A statute in the jurisdiction provides as follows: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” Two years later, the man purchased land for $200,000. He made a down payment of $20,000 and borrowed the remaining $180,000 from a bank. The bank loan was secured by a mortgage on the land. Immediately after the closing, the deed to the man was recorded first, and the bank’s mortgage was recorded second. Five months later, the man defaulted on the mortgage loan and the bank initiated judicial foreclosure proceedings. After receiving notice of the proceedings, the credit card company filed a motion to have its judgment lien declared to be the first lien on the land. Is the credit card company’s motion likely to be granted?

A

A) No, because the bank’s mortgage secured a loan used to purchase the land.

68
Q

A woman borrowed $100,000 from a bank and executed a promissory note to the bank in that amount. As security for repayment of the loan, the woman’s brother gave the bank a mortgage on a tract of land solely owned by him. The brother did not sign the promissory note. The woman subsequently defaulted on the loan, and after acceleration, the bank instituted foreclosure proceedings on the brother’s land. The brother filed a timely objection to the foreclosure. Will the bank succeed in foreclosing on the tract of land?

A

(C) Yes, because the bank has a valid mortgage.

69
Q

A businessman executed a promissory note for $200,000 to a bank, secured by a mortgage on commercial real estate owned by the businessman. The promissory note stated that the businessman was not personally liable for the mortgage debt. One week later, a finance company obtained a judgment against the businessman for $50,000 and filed the judgment in the county where the real estate was located. At the time the judgment was filed, the finance company had no actual notice of the bank’s mortgage. Two weeks after that filing, the bank recorded its mortgage on the businessman’s real estate. The recording act of the jurisdiction provides: “Unless the same be recorded according to law, no conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice or against judgment creditors without notice.” The finance company sued to enforce its judgment lien against the businessman’s real estate. The bank intervened in the action, contending that the judgment lien was a second lien on the real estate and that its mortgage was a first lien. Is the bank’s contention correct?

A

A) No, because the judgment lien was recorded before the mortgage, and the finance company had no actual notice of the mortgage.

70
Q

A seller conveyed residential land to a buyer by a warranty deed that contained no exceptions and recited that the full consideration had been paid. To finance the purchase, the buyer borrowed 80% of the necessary funds from a bank. The seller agreed to finance 15% of the purchase price, and the buyer agreed to provide cash for the remaining 5%. At the closing, the buyer signed a promissory note to the seller for 15% of the purchase price but did not execute a mortgage. The bank knew of the loan made by the seller and of the promissory note executed by the buyer to the seller. The buyer also signed a note to the bank, secured by a mortgage, for the 80% advanced by the bank. The buyer has now defaulted on both loans. There are no applicable statutes. Which loan has priority?

A

(B) The bank’s loan, because it was secured by a purchase-money mortgage.