Propery Flashcards
Fee simple absolute
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.
Defeasible estate
Estate may terminating upon happening or event before its maximum duration has run.
Fee simple determinable
Estate terminates automatically on occurrence of named future event and returns to grantor.
Fee simple subject to condition subsequent
Estate may be cut short and retaken by grantor upon occurrence of named future event.
Fee simple subject to executory interest
Estate is automatically divested in favor of a named person upon happening of named event.
Fee tail
Estate descends to grantee’s children only. Disfavored in modern law and usually treated as fee simple absolute.
Life estate
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).
Non-freehold estate
Estate limited in duration
Grantor future interests
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
Grantee future interest
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.
Executory interest
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
Rule against perpetuities
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.
Restraints on alienation
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.
Tenancy in common
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.
Joint tenancy
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.
Tenancy by the entirety
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.
Types of leases
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
Tenant’s defenses
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
Tenant’s transfer of interest
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
Habitability and suitability of leased premises
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
Covenants
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.
Equitable servitude
Breach leads to injunction. Requires notice, intent, and the servitude to touch and concern the land.
Implied reciprocal servitude
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.
Termination of covenants and servitudes
Terminates upon written release, merger of dominant and servient estates, abandonment, estoppel, or changed circumstances such that reasons for restriction no longer valid
Easement types
Appurtenant: Benefits parcel of land
In gross: Benefits person or entity (no dominant estate)
Easement implied by prior use
(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
Easement by necessity
(1) Common ownership of dominant and servient estate followed by severance, and (2) strict necessity for easement at the time of severance
Waste
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
Doctrine of equitable conversion
Equitable title to property transfers to buyer upon execution of purchase and sale agreement.
Easement by prescription
Use of property that is (1) open and notorious, (2) actual, (3) continuous (traditional requirement is 20 years), (4) hostile, and (5) exclusive
Scope of easement
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)
Termination of easement
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
Profit a prendre
Nonposessory interest in land. Holder of profit has right to take resources from land of another.
Fixture
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.
Zoning: Takings clause
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.
Nonconforming use
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.
Zoning variance
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.
Special use permit
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.
Support rights
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
Riparian rights
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
Real property contracts: essential terms
Description of property, description of parties, price, and any conditions of price or payment, (and signature)
Real property contracts: doctrine of part performance
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.
Seller’s remedy for breach of real property sale
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.
Buyer’s remedies for breach of real property sale
Expectation damages: Difference between market price at time of breach and contract price
Reliance damages
Restitution of down payment
Marketability of title
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
Implied warranty of quality
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.
Mortgage: General
Interest in real property to secure performance of an obligation.
Mortgage deed conveys interest in property. Mortgage note represents obligation and creates personal liability.
Purchase-money mortgage
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
Future-advance mortgage
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.
Installment land-sale contract
Buyer takes possession and makes payments to seller. Majority rule allows forfeiture of all installments and retaking of title if buyer defaults.
Mortgage theories
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)
Mortgage related waste
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.
Right to redeem
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.
Transfer by mortgagor
Subject to mortgage: mortgagor may foreclose on property but transferee is not personally liable.
Assumes the mortgage: Transferee personally liable
Acceleration clause (mortgage)
Entire debt becomes due upon happening of an event (usually default, encumbrance, or sale). Generally upheld.
Foreclosure
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
Marshaling assets
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.
Adverse possession
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
Transfer by deed
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
Types of deed
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
Covenants of title
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
Ademption
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.
Exoneration (property)
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.
Race statute
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….”
Notice statute
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.”
Race-notice statute
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.
Shelter rule
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.
