Property MCQ

Question 1

LE Taxes

Answer 1

A life tenant has the obligation to pay ordinary taxes on the real property, but only to the extent that the life tenant receives a financial benefit from the property. When the life tenant occupies the land, the financial benefit is measured by its fair rental value.

Question 2

Right of First Refusal

Answer 2

A right of first refusal is a partial restraint on alienation that, if reasonable, is valid and enforceable by an injunction. This right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another party.

Question 3

Vacating Tenant at Sufferance

Answer 3

Unless required by statute, a landlord is not required to give a tenant at sufferance notice to vacate the premises before taking steps to recover possession of the property.

Question 4

Estoppel by Deed

Answer 4

Under the doctrine of estoppel by deed, a grantor who conveys an interest in land by warranty deed before owning it is estopped from later denying the effectiveness of that deed. And the grantor’s after-acquired title automatically transfers to the prior grantee.

Question 5

Enforcing Equitable Servitude

Answer 5

The benefit of enforcing an equitable servitude is held only by the original parties and their successors in interest.

Question 6

License

Answer 6

A license is a nonpossessory right to enter and use another’s land for a specific purpose. A license is freely revocable—by the licensor, upon the death of either party, or upon conveyance of the licensed property—unless the licensee detrimentally relied on it or the license is coupled with an interest.

Question 7

Doctrine of Merger

Answer 7

Under the doctrine of merger, the seller’s duties in a contract for the sale of real property—including the duty to deliver marketable title—merge into the deed at closing. As a result, these duties are enforceable thereafter only if they are contained in the deed.

Question 8

Doctrine of Equitable Conversion

Answer 8

Unless the land-sale contract states otherwise, the doctrine of equitable conversion places the risk of loss on the buyer once the contract is formed and can be specifically enforced.

Question 9

Fixture

Answer 9

A fixture is a chattel that is (1) attached to real property in such a manner that it is treated as part of the realty and (2) used for some larger component or function of the land (e.g., a wall separating adjoining properties).

Question 10

Private Nuisance

Answer 10

Private-nuisance liability arises when a defendant’s interference with the plaintiff’s use and enjoyment of his/her property is both substantial (offensive, annoying, or intolerable to normal person in community) and unreasonable (severity of plaintiff’s harm outweighs utility of defendant’s conduct).

Question 11

SOL Adverse Possession

Answer 11

The statute of limitations for adverse possession will not run against a true owner afflicted with a disability (e.g., insanity, infancy, imprisonment) at the inception of the adverse possession until the disability is removed.

Question 12

third-party owner of subsurface rights

Answer 12

A third-party owner of subsurface rights is strictly liable for any failure to support the land and buildings that predate the conveyance of those rights, provided that the damage would have occurred in the land’s natural state.

Question 13

Novation

Answer 13

A novation is the substitution of a new contract for an old one when a party to the original contract agrees to release the other party and substitute a new one.

Question 14

exoneration-of-liens doctrine

Answer 14

Under the common-law exoneration-of-liens doctrine, the recipient of a specific devise of real property can use the remaining assets in the testator’s estate to pay off any encumbrances on that property.
Most states have abolished this doctrine, and payment of an encumbrance on devised real property is required only if the will so specifies.

Question 15

fructus naturales

Answer 15

Wild, uncultivated crops (i.e., fructus naturales) are considered part of the real property on which they grow, and they pass automatically with the land. The prior owner has no right to reenter the land to remove the crops.

Question 16

fructus industriales

Answer 16

Crops that are purposely planted and cultivated (i.e., fructus industriales) are considered the landowner’s personal property and, similarly, are generally conveyed with the land. However, the prior owner has the right to reenter to remove these crops if they were:

-harvested and therefore severed from the land
-ripe (i.e., mature) and therefore deemed constructively severed from –the land (in some courts) or
planted by a tenant with a lease of uncertain duration or an adverse possessor under a claim of right.

Under the doctrine of emblements, a tenant has a right to reenter the land to remove, harvest, and cultivate crops planted prior to the termination of his/her tenancy (if termination is not the tenant’s fault). Adverse possessors have the same rights as a tenant.

Question 17

doctrine of ademption

Answer 17

The doctrine of ademption by extinction causes a devise of a specific asset to fail if a testator does not own it at the time of death. Proceeds from the sale of the asset, or property purchased with those proceeds, then become part of the general estate.

Question 18

Title Theory State

Answer 18

In a title-theory state, the lender has legal title to mortgaged land and can take possession of the land at any time even if the mortgagor is not in default.

Question 19

Deed Delivery

Answer 19

Delivery is presumed when the deed has been recorded in the county land records since the recording creates a rebuttable presumption that the deed is intended to be presently operative. Physically handing over a deed is not required and does not conclusively prove a grantor’s present intent to convey property

Question 20

Termination of Covenant

Answer 20

A covenant can be terminated in the same manner as an easement, including by abandonment. Abandonment occurs when an affirmative act—something more than neglect or nonuse—shows a clear intent to relinquish the covenant.

Question 21

Assuming Debt in Mortgage

Answer 21

A buyer who assumes a mortgage is primarily liable for the debt. And if the assumption of the mortgage was part of the purchase price, then the buyer may not raise defenses that the debtor could have raised against enforcement of the mortgage obligation.

Question 22

Equitable Servitude - Common Scheme

Answer 22

An equitable servitude can be implied from a common scheme if (1) the owner intended to create a common scheme, (2) the intended servitude was restrictive, and (3) persons to be bound had notice of the servitude. But it cannot be enforced against lots sold before the common scheme arose.

Question 23

Notice to Junior Interests

Answer 23

For a judicially supervised foreclosure sale, the foreclosing mortgagee must give notice to the holders of any junior interests in the property to eliminate those interests. Any others who have an interest in the property or are liable on the debt may be joined as proper but unnecessary parties.

Question 24

Due-On-Sale Exception

Answer 24

A due-on-sale clause permits the mortgagee to demand payment in full of the remaining mortgage debt if the mortgaged property is transferred without the mortgagee’s consent.

However, the transfer of residential property to the mortgagor’s living trust is exempt from this clause.

The provision is not enforceable against a conveyance of residential property to the debtor’s spouse or ex-spouse upon divorce.

Question 25

Easement Change in Use

Answer 25

An easement holder may increase the manner, frequency, or intensity of an easement’s use so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

Question 26

Time is of the Essence

Answer 26

When time is not of the essence in a real estate contract, failure to perform on the specified closing date constitutes a breach, but the contract cannot be rescinded if the breaching party can perform within a reasonable time thereafter.

Question 27

Right of First Refusal

Answer 27

Rights of first refusal are generally subject to the Rule Against Perpetuities, so this contingent future interest is void if it there is any possibility that it could vest more than 21 years after some relevant life in being at the creation of the interest.

Question 28

Equitable Conversion

Answer 28

Due to the doctrine of equitable conversion, a judgment obtained against a seller after the execution of a land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.

Question 29

Effective Deed

Answer 29

A deed is effective to convey a real property interest when it (1) is in writing and signed by the grantor, (2) identifies the grantor and grantee, (3) describes the property being transferred, and (4) contains words of transfer.

Question 30

Mineral Rights

Answer 30

The owner of mineral rights is strictly liable for any failure to support the land and any buildings that predate the conveyance of those rights, provided that the damage would have occurred in the land’s natural state. But the owner is liable only for negligence for damage to improvements built after the mineral rights were conveyed.

Question 31

Non-Existent Co-Tenant

Answer 31

A deed purporting to transfer real property to a nonexistent cotenant is void as to the nonexistent cotenant and creates a tenancy in common between the grantor and the other cotenant(s) named in the deed.

Question 32

Seller Refusing to Sell with Unmarketable Title

Answer 32

If a seller cannot convey marketable title, the buyer can rescind the land-sale contract. But if the buyer accepts the land with the defect and the seller refuses to perform, then the buyer can (1) rescind the contract and seek restitution, (2) seek specific performance with an abatement of the purchase price, or (3) sue for damages.

Question 33

Defenses/Liability for Donee in Mortgage

Answer 33

When mortgaged property is transferred to a donee, the donee may assert the donor-mortgagor’s defenses against the mortgagee-lender. But a purchaser who assumes an existing mortgage obligation as part of the purchase price may not do so.

Question 34

Implied Warranty of Marketable Title

Answer 34

The implied warranty of marketable title requires that the seller, at the time of closing, deliver title to the buyer that is free from an unreasonable risk of litigation.

Question 35

Equitable Mortgage

Answer 35

An equitable mortgage is created when an absolute deed—i.e., a deed that is free of encumbrances and transfers unrestricted title to property—is given with the intent to secure a debt.

Question 36

Forgery

Answer 36

A deed is void and unenforceable, even by a bona fide purchaser, if (1) the grantor’s signature is forged, (2) the deed itself is forged, or (3) the grantor is deceived about nature of the executed document.

Question 37

Future Advances Mortgage

Answer 37

If a future-advances mortgage is optional, then the future-advances mortgagee has priority with respect to amounts loaned before receiving notice of a subsequent mortgage. But if the advance is obligatory, then the future-advances mortgagee has priority with respect to amounts loaned before and after receiving notice.

Question 38

Mortgage & Obligation

Answer 38

Enforcement of a mortgage is subject to the same defenses as the obligation for which the mortgage serves as security.

Question 39

Liquidated Damages Clause

Answer 39

A liquidated damages clause allows the seller to retain the buyer’s deposit if the buyer breaches the real-estate contract. The clause is enforceable so long as the amount of liquidated damages is reasonable—e.g., no more than 10 percent of the purchase price. But it may not be enforced if the seller suffered no actual loss.