Propery

Question 1

Fee simple absolute

Answer 1

Estate has all possible rights that a person may hold to that parcel of land, including unimpeded right to sell or convey and unimpeded right to devise property.

Question 2

Defeasible estate

Answer 2

Estate may terminating upon happening or event before its maximum duration has run.

Question 3

Fee simple determinable

Answer 3

Estate terminates automatically on occurrence of named future event and returns to grantor.

Question 4

Fee simple subject to condition subsequent

Answer 4

Estate may be cut short and retaken by grantor upon occurrence of named future event.

Question 5

Fee simple subject to executory interest

Answer 5

Estate is automatically divested in favor of a named person upon happening of named event.

Question 6

Fee tail

Answer 6

Estate descends to grantee’s children only. Disfavored in modern law and usually treated as fee simple absolute.

Question 7

Life estate

Answer 7

Estate that lasts for duration of grantee’s life. Life estate pur autre vie is measured by life of someone other than grantee’s. Life tenant has duty to repair, to pay interest on a mortgage, and to pay ordinary taxes. Cannot commit waste (voluntary, permissive, ameliorative).

Question 8

Non-freehold estate

Answer 8

Estate limited in duration

Question 9

Grantor future interests

Answer 9

Possibility of reverter: Automatic reversion to grantor

Right of reentry/power of termination: Grantor may exercise right of reentry and termination upon happening of main event

Reversionary interest: Future interest when grantor transfers less than fee interest to third person

Question 10

Grantee future interest

Answer 10

Remainder: Future interest in third person intended to take effect after natural termination of preceding estate

Vested remainder subject to total divestment: Remainder interest is vested but may terminate on happening of future event

Vested remainder subject to open: Remainder is made to a class, and at least one member satisfies conditions precedent to vesting, but others may later join class.

Rule of convenience: Class closes as soon as one member of class becomes entitled to immediate possession.

Question 11

Executory interest

Answer 11

Future interest in third person that cuts short previous estate before it would naturally terminate.

Shifting: Interest passes from one grantee to another

Springing: Interest transfers from grantor to grantee

Question 12

Rule against perpetuities

Answer 12

Interest is invalid if it does not vest within 21 years of life-in-being at the creation of the interest. Only applies to executory interests, contingent remainder, and vested remainder subject to open. Does not apply to charitable trusts or interest interests fully vested at time of creation.

Question 13

Restraints on alienation

Answer 13

Total restraint invalid on fee but upheld if reasonable on less than a fee

Partial restraint: Purchase option or right of first refusal. Court considers limitations in time/scope, purpose of restraint, interests of parties, and whether constraint is supported by consideration.

Question 14

Tenancy in common

Answer 14

Each co-tenant owns undivided possessory interest in whole property.

Modern majority rule is that tenancy in common is default unless right of survivorship is specifically stated.

Question 15

Joint tenancy

Answer 15

Each co-tenant owns undivided possessory interest in whole property and has right of survivorship.

Traditionally, requires unities in time, title, interest, in possession. Modern rule requires only interest and possession.

Survivorship takes precedence over will or inheritance by intestacy.

Question 16

Tenancy by the entirety

Answer 16

Each spouse has undivided interest in whole of property and right of survivorship, unless expressly stated otherwise.

Severance only occurs when spouses jointly convey to third party, spouse conveys to other spouse, or couple divorces.

Question 17

Types of leases

Answer 17

Term of years: Lease with definite beginning and end

Periodic tenancy: Lease with set beginning that continues from period to period until proper notice given. Notice must be equal to rental period, up to six months

Tenancy at will: No fixed duration, lasts only as long as landlord and tenant desire

Tenancy at sufferance: Occurs when tenant does not move out and landlord does not want tenant to stay

Question 18

Tenant’s defenses

Answer 18

Failure to deliver possession (minority rule is that landlord has no obligation, tenant must take property)

Eviction. Actual eviction occurs when tenant is removed from all or part of property, including if landlord occupies part of property. Constructive eviction occurs if landlord allows condition of premises to deteriorate so much that tenant is effectively forced out.

Surrender of premises (landlord must accept)

Destruction (not defense at common law), unless T intentionally or negligently causes destruction

Question 19

Tenant’s transfer of interest

Answer 19

Assignment: T transfer all remaining interest in contract. A has privity of estate with LL while T remains in privity of contract. A and T both liable to LL for rent.

Sublease: Tenant transfers less than entire interest. SL has privity of estate and privity of contract with T, who continues to owe rent to LL

Question 20

Habitability and suitability of leased premises

Answer 20

Implied warrant of habitability: For residential premises, guarantee that LL will deliver and maintain premises that are safe, clean, and fit for human habitation

Covenant of quiet enjoyment: Promise that T will not be disturbed by LL during possession of premises

Question 21

Covenants

Answer 21

Covenant runs with the land if there is privity, intent (must be in writing), notice (actual, constructive, inquiry), and the covenant touches and concerns the land (reduces use of servient estate and increases use of dominant estate).

Horizontal privity: Relationship between original covenantor and covenantee–privity of contract in connection with land

Vertical privity: Relationship between original party to running covenant and successor in interest.

Breach leads to damages.

Question 22

Equitable servitude

Answer 22

Breach leads to injunction. Requires notice, intent, and the servitude to touch and concern the land.

Question 23

Implied reciprocal servitude

Answer 23

Typically restrictions are part of common scheme or plan–i.e., large percentage of lots are burdened, oral representations to buyers, statements in advertisements, or recorded plat maps. Can be enforced by original grantor, any affected purchaser, or subdivision association for common land.

Question 24

Termination of covenants and servitudes

Answer 24

Terminates upon written release, merger of dominant and servient estates, abandonment, estoppel, or changed circumstances such that reasons for restriction no longer valid

Question 25

Easement types

Answer 25

Appurtenant: Benefits parcel of land

In gross: Benefits person or entity (no dominant estate)

Question 26

Easement implied by prior use

Answer 26

(1) Severance of title to land held in common ownership, (2) use giving rise to easement in existence at the time of severance, (3) use was apparent and discoverable, (4) easement is necessary for proper and reasonable enjoyment of dominant tract

Question 27

Easement by necessity

Answer 27

(1) Common ownership of dominant and servient estate followed by severance, and (2) strict necessity for easement at the time of severance

Question 28

Waste

Answer 28

Voluntary waste: Commission of act that has more than trivial injurious effect on property

Permissive waste: Allowing premises to fall into disrepair or fialing to pay mortgage interest payments, taxes, etc.

Ameliorative waste: Increasing value of premises by altering it. Traditionally prohibited. Modern rule is to allow if market value of remainderman’s interest is not impaired, and either remainderman permits or substantial and permanent change in neighborhood has deprived property of reasonable value

Question 29

Doctrine of equitable conversion

Answer 29

Equitable title to property transfers to buyer upon execution of purchase and sale agreement.

Question 30

Easement by prescription

Answer 30

Use of property that is (1) open and notorious, (2) actual, (3) continuous (traditional requirement is 20 years), (4) hostile, and (5) exclusive

Question 31

Scope of easement

Answer 31

If language limits easement, that language will be enforced. Otherwise, easement holder can make reasonable use. Surcharging the easement occurs from excessive use and entitles owner to damages or injunction (but not termination of easement)

Question 32

Termination of easement

Answer 32

Release by dominant estate

Dominant and servient estates come into common ownership

Abandonment, if there is proof of intent to abandon and affirmative act in furtherance

Estoppel, if there is an act or representation in respect to the easement, justifiable reliance on the act or representation, and damages

Prescription

Sale to a bona fide purchaser for value without notice

Question 33

Profit a prendre

Answer 33

Nonposessory interest in land. Holder of profit has right to take resources from land of another.

Question 34

Fixture

Answer 34

Chattel so connected to real property that a disinterested observer would consider it part of the property.

Chattel becomes fixture if it is annexed to the property (permanent attachment), it has been appropriated to the use of the land, and annexor intends it to be a fixture.

Question 35

Zoning: Takings clause

Answer 35

Land use regulation is a taking if it deprives owner of all valuable use of land. Regulation that decreases value may be a taking based on the balancing of (1) the economic impact of the regulation on the claimant, (2) the owner’s reasonable investment-backed expectations, and (3) character of governmental action.

Question 36

Nonconforming use

Answer 36

Use permitted by zoning ordinance to continue notwithstanding general prohibition of similar use. May not be expanded or rebuilt, but insubstantial changes and reasonable alterations for repair purposes are permitted.

Question 37

Zoning variance

Answer 37

Permission by zoning authorities to use property in forbidden manner to alleviate conditions specific to that piece of property. If area restriction, petitioner must show that there are practical difficulties meeting the requirement or requirements are unreasonable or create undue hardship. If use restriction, petitioner must show undue hardship.

Question 38

Special use permit

Answer 38

Required for uses in an area not zoned for that use but which would be beneficial to public welfare and compatible with the area.

Conditional use permit applies when use would be beneficial and compatible if certain conditions are met.

Question 39

Support rights

Answer 39

Lateral support: Landowner strictly liable if excavation causes neighboring land to sink and land is unimproved. If neighboring land is improved, landowner is liable based on negligence and if land would have collapsed in natural state.

Subjacent support: Right of support exists for land in natural state and buildings existing on date when subadjacent estate was severed. Underground landowner liable to damages to buildings erected later only if negligent

Question 40

Riparian rights

Answer 40

Natural flow doctrine (rare): Unlimited use for domestic purposes but artificial use only if use does not diminish flow

Reasonable use (majority): Any use that does not interfere unreasonably with other’s use of water

Prior appropriation (Western states): Water rights to first person to take water for beneficial purpose

Question 41

Real property contracts: essential terms

Answer 41

Description of property, description of parties, price, and any conditions of price or payment, (and signature)

Question 42

Real property contracts: doctrine of part performance

Answer 42

Oral contract for sale of land otherwise invalid may be enforced if part performance unequivocally shows existence of contract. Requires two of the following: payment of all or part of purchase price, taking possession, and making substantial improvements.

Question 43

Seller’s remedy for breach of real property sale

Answer 43

Expectation damages: Difference between market price at time of breach and contract price

Foreseeable consequential damages like mortgage interest payments

Reasonable reliance damage: Repairs and cost of inspections

Traditionally, seller may elect to keep down payment even in absence of liquidated damages provision. Modern approach requires seller to return amount of down payment in excess of damages.

Trend away from specific performance available for sellers.

Question 44

Buyer’s remedies for breach of real property sale

Answer 44

Expectation damages: Difference between market price at time of breach and contract price

Reliance damages

Restitution of down payment

Question 45

Marketability of title

Answer 45

All contracts for sale of real property contain implied promise to convey marketable title with no defects in chain of title, encumbrances, encroachments (if significant) or zoning violations. But, merges into deed at closing–no cause of action unless deed contains covenant of title

Question 46

Implied warranty of quality

Answer 46

Guarantee habitability and fitness applying to new or remodeled homes. Seller has duty to disclose material latent defects known to seller but not readily observable.

Question 47

Mortgage: General

Answer 47

Interest in real property to secure performance of an obligation.

Mortgage deed conveys interest in property. Mortgage note represents obligation and creates personal liability.

Question 48

Purchase-money mortgage

Answer 48

Mortgage to secure loan that enables mortgagor to acquire title to property (or make improvements), given as part of same transaction as buyer’s purchase.

Priority over other liens on property, even those recorded earlier, but only if they were executed prior to acquisition of title

Question 49

Future-advance mortgage

Answer 49

Line of credit granted on security of the home, generally to fund on-going construction. If proper notice is given to creditors, mortgage interest attaches on date that arrangement is made, not when funds are accessed. Can be obligatory or optional; if obligatory, mortgage takes priority over later creditors even if all advances have not been made.

Question 50

Installment land-sale contract

Answer 50

Buyer takes possession and makes payments to seller. Majority rule allows forfeiture of all installments and retaking of title if buyer defaults.

Question 51

Mortgage theories

Answer 51

Title theory: Classic common law. Mortgagee receives legal title subject to condition subsequent that divests title if mortgagor repays on time.

Lien theory: Majority. Mortgagee receives lien and mortgagor retains legal and equitable title until default

Intermediate theory: Mortgagor retains legal title util default, then legal title passes to mortgagee (small minority)

Question 52

Mortgage related waste

Answer 52

Mortgagor or life tenant commits waste if: fails to make timely payments, makes physical changes that reduce value, fails to maintain and repair properly, fails to comply with mortgage covenants, or retains rents owed to mortgagee.

Life tenant has duty to pay interest on mortgage, but capped at rents/profits from third person or reasonable rental value if tenant remains in possession.

Question 53

Right to redeem

Answer 53

Mortgagor has right to redeem property by paying debt anytime before foreclosure. Statutory right of redemption continues until 6-12 months after foreclosure (by matching price). Mortgagee may not “clog” right to redemption.

Question 54

Transfer by mortgagor

Answer 54

Subject to mortgage: mortgagor may foreclose on property but transferee is not personally liable.

Assumes the mortgage: Transferee personally liable

Question 55

Acceleration clause (mortgage)

Answer 55

Entire debt becomes due upon happening of an event (usually default, encumbrance, or sale). Generally upheld.

Question 56

Foreclosure

Answer 56

Upon default, mortgagee may foreclose mortgage and obtain and obtain judgement for deficiency against any person personally liable on obligation.

Foreclosure sale destroys junior interests, unless junior mortgagee is not made a party and does not receive notice. If senior mortgage is modified, junior mortgage prevails over modification to extent that modification materially prejudices holder of junior mortgage

Question 57

Marshaling assets

Answer 57

Equitable doctrine to prevent senior creditor with multiple funding sources from prejudicing junior creditor with only one source. Requires creditor with more collateral options available to exhaust those other assets first.

Two funds doctrine: Junior and senior creditor have common debtor who owns multiple property, and junior creditor has lien on fewer properties.

Inverse order of alienation: When land subject to lien has been divided and sold to different grantees without release from mortgage, mortgagee must first satisfy lien out of land remaining in grantor’s possession.

Question 58

Adverse possession

Answer 58

Occupier of land acquires ownership if possession is:
(1) open, visible, and notorious
(2) actual–constructive adverse possession requires claim of entire premises despite only possessing some if done under color of title
(3) exclusive
(4) hostile–mistaken boundaries can be based on either objective standard (majority–applies even if possessor is unsure) or subjective standard (minority–requires possessor to know she crossed boundaries)
(5) continuous–common law is 20 years, but can tack or toll

Question 59

Transfer by deed

Answer 59

Requires: donative intent, delivery, and acceptance

Doctrine of relation back: Handing deed to third party constitutes valid delivery if grantor relinquishes all control over the deed, but delivery does not occur until agent actually delivers deed

Question 60

Types of deed

Answer 60

General warranty deed: Seller warrants that no title defects have occurred during his ownership or exist in his chain of title

Special warranty deed: Seller warrants that no title defects have occurred during his ownership of the property

Quitclaim deed: Seller conveys whatever interest he may have without making any warrantees

Tax deed: Transfers absolute title to purchaser of property sold for non-payment of taxes

Question 61

Covenants of title

Answer 61

Present covenants (do not run with the land):
(1) seisin: covenantor promises that she owns and possesses estate
(2) right to convey
(3) against encumbrances

Future covenants (run with the land)
(1) quiet enjoyment: grantee will not be disturbed by superior claim
(2) warranty: grantor will assist in defending title against lawful claims and will compensate grantee for losses due to assertion of superior title
(3) further assurances: grantor will take steps required to perfect title defects

Remedies for breach of covenant generally capped at amount D received for property

Question 62

Ademption

Answer 62

Destruction of testamentary gift because assets no longer belong to testator.

Adeemed by extinction: Property bequeathed is not in testator’s estate at death.

Ademption by satisfaction: Inter vivos gift with intent that provision of will be satisfied.

Question 63

Exoneration (property)

Answer 63

If buyer takes after execution of contract for sale of land but before closing, party that takes decedent’s real estate may demand closing and exoneration of liens. Majority rule is to take property subject to any outstanding lien.

Question 64

Race statute

Answer 64

Person who records first prevails.

Typical language: “No conveyance of land shall be calid to pass any property interest against lien creditors or purchasers for a valuable consideration from the donor, bargainor, or landlord but from the time of registration thereof….”

Question 65

Notice statute

Answer 65

Unrecorded conveyance is invalid against subsequent bona fide purchase for value and without notice. Must prove that claimant took subsequent in time, was a bona fide purchaser for value, and took property without notice.

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

Question 66

Race-notice statute

Answer 66

Unrecorded conveyance is invalid against subsequent bona fide purchaser for value, without notice, who records first. (Same as notice but must record first).

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

Question 67

Shelter rule

Answer 67

A person who is a successor in interest to a person protected by recording statute is also protected, unless conveyance is attempt to “wash” deed or person commits fraud in respect to the deed.