Property-Notes/slides

Question 1

Failure to Deliver Possession

Common law rule (English Rule): LL is duty-bound to deliver actual possession of premises to T

If could not do so, then T was excused from having to pay rent until LL succeeded in delivering possession to premises (Majority Rule)

American Rule: obligation to deliver the right to possession, rather than actual possession. (Minority Rule)

Question 2

Actual Eviction:

Answer 2

Intention conduct by the LL

Where LL, by an affirmative act, removes T from all or part of the premises

A defense to payment of rent—If the tenant is evicted from any part of the premises, the rent obligation stops entirely until he or she repossesses the entire property. In addition, the tenant can stay in possession of the rest of the property without paying rent.

Question 3

Constructive Eviction: Act of omission by the LL, generally unintentional conduct by the LL

There are 3 elements that must be met for there to have been a constructive eviction:

Answer 3

There are 3 elements that must be met for there to have been a constructive eviction:

The landlord must have committed wrongful actions or must have wrongfully neglected to maintain the property so that the existing conditions represent a “substantial interference” with the tenant’s enjoyment of the property.

The tenant must give notice to the landlord of the problem and the landlord must fail to take the steps necessary to remedy the situation.

The tenant must actually leave the property because of the interference.

Question 4

Destruction of the Leasehold: When the lease is silent neither party is under a duty

Answer 4

Common-Law- the destruction of the leasehold no excuse to rent obligation. The land was the key, not the structures on the land

Modern Law- destruction is a defense to payment of rent UNLESS Tenant intentionally or negligently caused destruction

Question 5

Common-Law: Tenant has a duty to find replacement tenant or continue to pay rent

Modern Jurisdictions: Landlord has a duty to attempt to mitigate damages- find a new tenant

Question 6

Waste:

Answer 6

A T always has an obligation to not commit waste of the premises.

Question 7

Voluntary Waste:

Answer 7

T cannot intentionally or negligently damage anything on the property. T is liable for the cost of correcting the damage

Question 8

Permissive Waste:

Answer 8

Tenant is obligated to take reasonable steps to guard against damage to premises and make reasonable repairs when needed prevent future damage (tenant is in the best position to correct the problem).

Question 9

Ameliorative Waste:

Answer 9

T alters or improves the leased premises. LL can sue for cost of restoring land to original condition.

Question 10

LL’s Breach of Express Covenant:

Answer 10

At common law, the landlord’s express covenants in a lease are independent of the tenant’s covenant to pay rent. Therefore, where a landlord breaches an express covenant, the tenant is still obligated to pay rent.

Question 11

LL-T Liablity of Injury of Another

Answer 11

LL not liable when he warned of a latent defect to the T in advance for the third-party injury. The T may be liable.

Question 12

Implied Warranty of Habitability:

Answer 12

Under the common law, there was no implied covenant that required the landlord to make sure that the property was in livable condition before he or she leased to the tenant.

Question 13

Periodic Tenancy- does not have an end date, expiration date. LL and T require notice to the other party. Whatever the period is agreed is, i.e., per week, month, ect. Must notice clock starts at the beginning of the full period.

Answer 13

For Example, LL and T, have a month-to-month agreement. Paid August, T paid August. It’s August 15th, LL has provided notice. What is the earliest the T has to move out? The answer is Oct. 1st because there So, the notice of Termination clock will not start until Sept. 1st. Termination will be offset by a month.

Question 14

At-Will

Answer 14

No notice needed, just leave.

Question 15

Tenancy for a term of years:

Answer 15

whether less than one year term, i.e., 6months would still count as a tenancy for years because of set timeframe. Element: A specific end date must be identified. Statute of Frauds requires in writing if 1 year or longer.

Question 16

Rule Against Perpetuities

Answer 16

Contingent remainders are subject to the rule of perpetuities

Option to purchase connected with a fee

Powers of appointment

Executory interests

Rights of first refusal

Question 17

Quitclaim Deed

Answer 17

Seller makes no warranties. The grantor only conveys whatever interest he has.

Question 18

Special Warranty Deed

Answer 18

Seller warrants that no title defects occurred during his ownership of the property. However, the seller does not warrant that there are no defects in the chain of title from which he derived title.

Question 19

General Warranty Deed

Answer 19

Seller warrants that no title defects have occurred during his ownership and that there are no title defects in the chain of title from which he derived title.

Question 20

Race Statute

Answer 20

First to record prevails.

Question 21

Notice Statute

Answer 21

Last BFP Wins!

Question 22

Race-Notice Statute

Answer 22

– First BFP to record wins.

Question 23

BFP?

Answer 23

pays value (purchaser, mortgagee, judgment creditor), takes in good faith without notice of earlier conveyance/mortgage.

Question 24

Adverse Possession Elements:

Answer 24

a) open, visible and notorious:
b) actual;
c) exclusive;
d) hostile and under a claim if title and right; and
e) continuous for the statutory period.

tacking: predecessor from one to the next

Privity of estate requires an intent to transfer

Tolling: statute will not run for a period of time

i. Due to disability at the time of entry by adversary
ii. Incompetency, prison

Question 25

Reversionary Interests—Future Interests in Transferor

Answer 25

a. Possibilities of Reverter and Rights of Entry: These future interests are discussed above in connection with the present estates to which they are attached.
b. Reversions: A person owning an estate in real property can create and transfer a lesser estate (in the durational sense). The residue left in the grantor, which arises by operation of law, is a reversion.

** All Reversionary Interest are Vested, thus not subject to the Rule of Perpetuity**

Question 26

Remainders:

Answer 26

A remainder is a future interest created in a transferee that is capable of taking in present possession and enjoyment (i.e., capable of becoming a present interest) upon the natural termination of the preceding estates created in the same dispo­sition. Unlike a reversion, which arises by operation of law from the fact that the transferor has not made a complete disposition of his interest, a remainder must be expressly created in the instrument creating the intermediate possessory estate.

Question 27

Indefeasibly Vested Remainder:

Answer 27

An indefeasibly vested remainder is a remainder that:

(1) Can be created in and held only by an ascertained person or persons in being;
(2) Must be certain to become possessory on termination of the prior estates (i.e., there

is no condition that may operate to prevent the remainder from someday becoming a

present interest);

(3) Must not be subject to being defeated or divested (compare the vested remainder

subject to total divestment, c., infra); and

(4) Must not be subject to being diminished in size (compare the vested remainder

subject to open, b., infra).

Question 28

Vested Remainder Subject to Open:

Answer 28

This is a vested remainder created in a class of persons (e.g., “children,” “brothers and sisters”) that is certain to take on the termination of the preceding estates but is subject to diminution by reason of other persons becoming entitled to share in the remainder. It is also called a “vested remainder subject to partial divestment.”

Question 29

Divesting Interests Are Executory Interests:

Answer 29

Once the remainder vests in one existing member of the class, the divesting interest in the unborn members of the class is called an executory interest.

Question 30

Effect on Marketability of Title

Answer 30

Note that where there are outstanding interests in the unborn children, the vested remainderman and the life tenant cannot jointly convey good title.

Question 31

Vested Remainder Subject to Total Divestment:

Answer 31

A vested remainder subject to total divestment arises when the remainderman is in existence and ascertained and his interest is not subject to any condi­tion precedent, but his right to possession and enjoyment is subject to being defeated by the happening of some condition subsequent.

Question 32

Contingent Remainder: Two ways to create a contingent remainder

Answer 32

1. Subject to Contingent Precedent: A remainder is contingent if its taking in possession is subject to a condition precedent (event, occurrence)
2. Unborn or Unascertained Persons: Interest in real property in favor of unborn
3. Destructibility of Contingent Remainders: At common law, a contingent remainder had to vest prior to or upon termination of the preceding freehold estate or it was destroyed.
   a. Today, this rule is abolished in almost all states.
   b. Merger Doctrine, occurs when a partial interest, merges into an whole interest of property. However, it a life estate and the next inline interest were created simultaneously, there would be no merger. Shelley’s Case.

Question 33

An executory interest is any future interest in a transferee that does not have the characteristics of a remainder; i.e., it is not capable of taking on the natural termination of the preceding life estate. Specifically, an executory interest is an interest that divests the interest of another.

Answer 33

a. Shifting Executory Interest-Divests a Transferee is one that divests the interest of another transferee; i.e., it cuts short a prior estate created by the same conveyance.

b. Springing Executory Interest is an interest that “Follows a Gap” in possession or Divests the estate of the Transferor.

c. Executory Interest Follows a Fee. A remainder cannot follow a fee simple interest! Thus, any interest that follows a fee is held by a third person is an executory I.
d. Important Differences between Executory Interests and Remainders:
(1) executory interests are not destructible, while contingent remainders are destructible in a few jurisdictions;
(2) executory interest are not considered vested; and
(3) the Shelley’s case Rule does not apply, but it does apply to remainders limited to heirs of the grantee.

Question 34

Joint Tenancy

Created between two or more co-tenants

Right of survivorship

Answer 34

Severance:

Lien Theory (majority rule): One joint tenant’s execution of a mortgage on her interest does not by itself cause a severance.

Title Theory: A mortgage is a transfer of title, so the transfer destroys the unity of title and severs the joint tenancy.

Question 35

Tenancy by the Entirety

Answer 35

A marital estate – a joint tenancy between spouses, including the right of survivorship

Terminated by: Death of either spouse, divorce, mutual agreement, or execution by a joint creditor by both spouses

Question 36

Tenancy in Common

Answer 36

A concurrent estate without a right of survivorship

Question 37

CO-TENANCIES

Answer 37

Co-tenants have a right to possess the whole property. An out-of-possession co-tenant is entitled to share in rents derived by another co-tenant from third parties, but an out-of-possession co-tenant is not entitled to collect rent from a co-tenant who is in actual possession of the property unless the in possession co-tenant has wrongfully ousted the other co-tenant.

Question 38

Ouster:

Answer 38

One tenant wrongfully excludes another co-tenant from possession.

The ousted co-tenant is entitled to receive his share of the fair rental value of the property for the time he was wrongfully deprived of possession.

Question 39

3 Present (do not run with the land

Covenant of seisin

Covenant of right to convey

Covenant against encumbrances

3 Future (do run with the land)

Quiet enjoyment

General warranty

Further assurances

Question 40

Covenant of Quiet Enjoyment

Answer 40

Every lease contains a covenant of quiet enjoyment (express or implied).

A landlord is deemed to have breached this covenant if the landlord actually or constructively evicts a tenant.

A constructive eviction occurs when:

(1) the landlord’s act substantially and permanently interferes with the tenant’s use and enjoyment of the premises; and
(2) the tenant moves out.

Thus, when a tenant has been constructively evicted, he may treat the lease as terminated and withhold rent.

Question 41

Landlord Breaches the covenant of quiet enjoyment–Majority Rule

Answer 41

This will be considered a constructive eviction.

When the tenants are only constructively evicted from part of the premises, there has been a partial constructive eviction.

Under the majority rule, if a tenant is constructively evicted from part of the premises, the tenant may receive a rent abatement, but is not relieved of all liability for rent.

Therefore, the tenants are not entitled to withhold their entire rent payment but may receive an abatement.

Question 42

A tenancy for a term of years

Answer 42

• a definite beginning and end, and
• no notice is required to terminate the lease.

When the landlord and tenant agreed to another one-year lease on the same terms, the parties either extended the duration of the lease or created another term of years for the following calendar year. Either way, the lease remained one for a term of years, which will terminate at the end of the lease with no notice required.

Question 43

The majority rule-T possession

Answer 43

The majority rule is the English rule, which requires that a landlord provide:

• not just the right to possession, but also
• actual possession of the leased property.

Therefore, it is the landlord’s responsibility to evict the former tenant and deliver actual possession of the ranch to the woman.

Question 44

breach of an implied warranty of habitability

Answer 44

In order to have a valid claim against a landlord for breach of an implied warranty of habitability, the tenant must:

• notify the landlord of defect, and
• the landlord must fail to repair the defect within a reasonable time.

Because the family notified the landlord of the defect and the landlord refused to make the necessary repairs, the family will prevail.

Question 45

tenancy at sufferance

Answer 45

A tenancy at sufferance occurs when a tenant remains in possession of the leased premises (“holds over”) after the end of the lease term. A tenancy at sufferance is not a true tenancy. In most states, if a residential tenant holds over, the landlord may recover possession of the premises and receive the reasonable rental value for the holdover period.

Question 46

A tenant may seek money damages for a landlord’s breach of a term or covenant in the lease.

Answer 46

A tenant may seek money damages for a landlord’s breach of a term or covenant in the lease.

Traditionally, a tenant may vacate the premises and terminate the lease if the tenant has been evicted by the landlord, actually or constructively.

Today, statutes in many jurisdictions provide the tenant with the following statutory remedies: (1) withholding rent; or (2) repairing the premises and deducting the cost of repair from subsequent rent payments.

Therefore, under the circumstances, this is the best answer choice.

Question 47

A constructive eviction

Answer 47

A constructive eviction occurs when:

(1) the landlord acts to substantially and permanently interfere with the tenant’s use and enjoyment of the premises; and
(2) the tenant moves out. Withholding something required by statute will constitute constructive eviction.

Question 48

A farmer owned a small farm near a town. The water to all outlets on the farmer’s farm other than his house was supplied by a well drilled by a previous owner a few hundred feet behind the farmer’s barn on the property. This well water became contaminated with arsenic. The congresswoman for that district who lived in the town was out hiking on the rural roads one very hot summer day when she got tired and decided to take a shortcut back to town over the farm fields. As she passed through the farmer’s farm, she noticed a water faucet next to the barn and stopped to take a long drink of the cool water. The arsenic content of the water made the congresswoman immediately very sick. The farmer discovered her unconscious body a few hours later and rushed her to the local hospital. After a long period of painful convalescence, the congresswoman recovered with minor long-term damage to her health. The congresswoman brought an action for personal injuries against the farmer arising from her drinking of the arsenic-contaminated water.

What will be the probable outcome?

A. Judgment for the farmer, if the congresswoman was the first person ever to enter upon his farm without permission.

B. Judgment for the farmer, unless the water faucet could be said to be an “attractive nuisance” under these circumstances.

C. Judgment for the congresswoman, if the farmer knew that the well water was tainted with arsenic.

D. Judgment for the congresswoman, if the farmer reasonably should have known that the well water was tainted with arsenic.

Answer 48

A. Judgment for the farmer, if the congresswoman was the first person ever to enter upon his farm without permission.

Discussion of correct answer: One who enters the defendant’s land without his permission or without a privilege to do so is a trespasser. The defendant is not liable to a trespasser whose presence is unknown to him, nor has he any duty to inspect his land to attempt to discover such trespassers. The defendant has a duty to exercise reasonable care to warn a known trespasser of hidden dangers known to the defendant and unknown to the trespasser. Where the defendant knows or reasonably should know that a portion of his land is frequently used by trespassers, he must take the same precautions to avoid injury to persons utilizing that portion of his land as if they were known trespassers, even if a particular plaintiff was not known to defendant and that plaintiff had never trespassed before. In this question, if no one had ever taken a shortcut across the farmer’s farm before the congresswoman, there was no basis to classify her as anything other than an unknown trespasser. As such, the farmer has no duty to warn her of any dangers.

Question 49

A man’s dream was to open a movie theater that would show nothing but the classics of the 1930s and 1940s - especially musicals. He began looking for an appropriate building, erected during that era, in the heart of downtown. The man soon received a call from a theater owner offering to lease a 150-seat theater downtown to the man. The owner informed the man from the outset that he was willing to lease the building at a discount because some of the overhead lighting was in need of repair. It was not adequately secured; in fact, some had fallen during a recent earthquake, and the owner knew that it would take at least two months to make the necessary repairs. The man signed a 1-month lease, hired a local contractor to repair the lighting, and began an advertising campaign with plans to open for business one month later. Response to the man’s concept was overwhelming, with the first ten showings sold out before the opening. The morning of opening day, the contractor informed the man that the lighting would not be completed for at least an additional two days. The man reluctantly proceeded with the opening anyway.

The day after the opening, a 5.0 aftershock hit the city. A section of the lighting hanging from the balcony fell, causing head injuries to a customer at one of the showings.

If the customer sues the owner, who will prevail?

A. The owner, because the man became solely liable for the condition of the premises as of the date he took possession.

B. The owner, because he disclosed the condition of the lighting to the man at the time of the lease.

C. The customer, because she was an invitee.

D. The customer, because the owner knew the man planned to use the building as a theater.

Answer 49

D. The customer, because the owner knew the man planned to use the building as a theater.

Discussion of correct answer: Generally, the lessor of real property is not liable for injuries resulting from conditions on the land. The lease is considered a transfer of all rights and responsibilities with regard to conditions on the land. There are a number of exceptions to this rule, however. One exception involves dangerous conditions existing at the time of transfer of possession of the property when the lessor knows the lessee will be holding the property open to the general public and knows that the lessee will not fix the dangerous conditions before the opening. The interest in protecting the public is considered so important that the lessor continues to be liable. The intent is to motivate lessors to transfer property in safe condition. Here, the owner knew the man intended to use the premises as a theater, open to the general public, and knew that the man would not have the necessary two months to make the necessary repairs before he opened the theater during his one month lease. Therefore the owner remains liable for the condition of the lighting.