Real Property Flashcards
Zoning: Nonconforming Use Rule
A nonconforming use is a use permitted by zoning ordinances to continue, notwithstanding the fact that similar uses are not generally permitted in the area. They are justified on the basis that they are necessary to promote fairness and to promote the investment-backed expectation of property owners.
A nonconforming use may not be expanded or rebuilt after substantial destruction, but insubstantial charges are permitted. Therefore, owners may make reasonable alterations to repair their facilities so that they are practicable for their purposes.
Future-Advance Mortgage Rule
A future advance mortgage is executed at the present time, but funds are not accessed until a future date. This is usually used to finance construction when the funds are needed.
A future-advance loan is obligatory if the lender has a duty to advance the funds. The loan is optional if the lender does not have a duty to advance funds but has discretion whether to make future advances.
Priority Rule (Future advance mortgages and liens)
Where distribuments are obligatory, a secured party’s previously perfected security interest in collateral and all future advances have priority over a lienholder whose interest attaches after the initial security interest was perfected.
if future advances are optional, and if the mortgagee has notice that a subsequent lienor has acquired an interest, then the advance loses its priority.
Majority – the mortgagee has notice only when it has actual notice of the lien
Minority – the mortgagee would be charged with constructive notice of the lien if the lien has been properly recorded
Is LL or T responsible for maintaining the premises (habitability)
At common law, a LL was under no duty to keep the leased premises safe or perform any upkeep or maintenance on the property. Thus, T who leased P and remained in possession of the P had the duty to maintain the property under all circumstances. Under Modern law, LL are responsible for maintaining residential properties (minority view extends this to commercial spaces too).
Constructive eviction
A tenant is constructively evicted when the premises fail to conform to the tenants express needs. The tenant must also give the LL adequate notice of the problems and vacate the premises.
Damages for termination of a lease
When a lease is terminated prior to an agreed upon end-date, the non-breaching party has the duty to mitigate damages.
LLs (Tenancy in Years) have to mitigate damages by placing an ad to lease the property to another T to try to re-lease property.
Easements (Notice)
Constructive notice comes from information that is on the public land records, inquiry notice arises from facts discernible through visual inspection of the premises or the applicable recorded instruments.
Shelter Doctrine
Under the shelter doctrine, when a BFP acquires title free of prior encumbrances, he can convey that title to a subsequent purchaser free of that encumbrance. To ensure that the BFP has an unlimited rt to alienate his land in the future, the shelter rule applies even when the subsequent purchaser has actual notice of the prior, unrecorded encumbrance.
Covenant against encumbrances
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Under common law, the covenant against encumbrances is a present covenant and is breached if there is an encumbrance at the time of conveyance of title.
