Real Property Flashcards
1
Q
Fee simple absolute
A
The least restrictive present possessory interest.
“To A and her heirs” or “To A”
2
Q
Fee tail
A
“To A and the heirs of her body”
The fee tail is not used anymore. Any attempt to create a fee tail creates a fee simple absolute.
3
Q
Fee simple determinable
A
Fee simple which automatically comes to an end when a stated event occurs or fails to occur.
The grantor must use clear durational language such as “To A so long as” “To A until”
4
Q
A fee simple determinable endures until named event occurs, then it
A
Automatically reverts to grantor.
5
Q
Nemo Dat rule
A
A person cannot assign a greater interest than the interest which is possessed.
6
Q
Fee simple subject to condition subsequent
A
Grantor must use clear directional language and expressly reserve the right to re-enter, e.g. “To A but if…grantor shall have a right of entry.”
7
Q
Fee simple subject to executory limitation
A
Provides for the estate to pass to a third person upon the happenings of the stated event. Grantor must use clear durational language, e.g. “To A but if X occurs, then to B.”
The occurrence of the named event results in automatic termination, i.e. the estate will automatically pass to the third-party.
8
Q
Is “To A with the hope” or “To A with the expectation” a defeasible fee?
A
No. To have a defeasible fee, clear durational language is required.
9
Q
Life estate
A
Ownership must be measured in terms of lifetime.
“To A for life” “To A for B’s life”
Reverts to grantor unless assigned to third-party remainder.
10
Q
Rights and duties of life tenant
A
The life tenant is entitled to all ordinary uses and profits of the land.
Life tenets have a duty not to commit waste.
11
Q
Life Tenant and Affirmative Waste (voluntary waste)
A
Any structural change intentionally made to the estate that causes harm to the estate or deplete its resources.
A life tenant has a duty not to consume or exploit the natural resources on the land unless
-if, prior to the grant, the land was used for exploitation, then the life tenant can continue to exploit unless otherwise agreed. (The open mines doctrine permits continued excavation from any mine on the property that is already open but prohibits the opening of new mines.)
-consumption of natural resources is for reasonable repair and maintenance of the property
-Expressly authorized by the grantor OR
-Where land is only suitable for such use.
12
Q
Life tenant and permissive waste
A
Permissive waste is the failure to maintain the estate both physically and financially. It requires a failure to make ordinary repairs, pay taxes, or pay interest on the mortgage/encumbrances. Note that the life tenant must maintain the estate both physically and financially only to the extent of the income or profits derived from the land. If the life tenant is using the land herself with no rent, then the life tenant must maintain the estate financially and physically only to the extent of the reasonable rental value of the land. The life tenant has no duty to insure the land.
13
Q
What is the class closing rule for vested remainder subject open (to A for life, then to the children of B and their heirs).
A
A class closes under the common law rule of convenience when any member of the class can demand possession. However, under the womb rule, children of B in the womb at A’s death are considered members of the class and will share.
14
Q
A contingent remainder is
A
A future property interest that is created in an unascertained person or subject to a condition prescedent. Note: A living person cannot have heirs so a living person’s heirs are unascertained persons.
15
Q
What is a vested remainder?
A
Vested remainders are created in an ascertained person and not subject to any condition precedent.
16
Q
Sub classifications of vested remainders
A
- Indefeasibly vested remainder “To A for life, remainder to B”
- Vested remainder subject to complete defeasance (Either vested subject to being divested by operation of a condition subsequent or buy an inherent limitation of the estate in remainder) “To A for life, then to B for life, then to C and her heirs.”
- vested remainder subject to open “To A for life, then to the children of B and their heirs.”
17
Q
What is a condition subsequent property law
A
A condition that, if it occurs, it will bring the estate to an end. “To A for life, then to B; but if B should die under the age of 40, to C. 
18
Q
What is a Condition precedent in property law
A
A condition precedent is an actor event that must exist or her before the remainder vests
19
Q
What happens if a contingent remainder and land does not vest at or before termination of the preceding freehold estate
“to A for life, then if B marries C to B” and A dies before B marries C
A
At common law, a contingent remainder and land was destroyed if it did not vest at or before termination of the proceeding freehold estate.
Under modern law, distructability has been abolished. The result is that the grantor or the grantor’s heirs hold the estate subject to B’s springing executory interest. Once the condition president has been satisfied, e.g. B marries C, B will take the estate.
20
Q
Result of “To B for life, then to B’s heirs” and B is alive.
A
At common law, the rule in Shelly’s case converted the contingent remainder in B’s heirs into a vested remainder in B. After that, the doctrine of merger operated on the two successive freehold estates placed in the same purchaser and converted them into a single fee simple absolute in B.
Under modern law, the rule in Shelly’s case has been abolished. B=life estate. B’s heirs=contingent remainder, O=reversion.
21
Q
Result of “To B for life, then to O’s heirs” and O is still alive.
A
Under the doctrine of worthier title, if a grant for devised by oh well oh it’s alive creates a remainder in the heirs of the grantor, that remainder and owes errors is void.
B=life estate
O=reversion
22
Q
Executory interest
A
A future interest in a grantee that, in order to become possessory, must divest or cut short either the prior estate (“shifting”) or spring out of the grantor or her heirs (“springing”) at a future date.
23
Q
The rule against perpetuities
A
For a future interest to be valid, the interest must vest, if at all, within 21 years after some life in being at the instrument’s effective date, i.e. the measuring life.
Ask: Will we know for sure whether the interest will vest within 21 years after the measuring life?
24
Q
What is the fertile octogenarian rule? (RAP)
A
This rule presumes that anyone even an octogenarian can parent a child, regardless of gender or health.
25
What is the unborn widow rule?
This rule presumed that a grantor could subsequently marry a person who is not a life in being at the time interest was created.
26
Slothful executor (RAP)
This rule presumed that the executor of the estate might not probate the will for many years after the testator’s death
27
Precocious toddler (RAP)
This rule presumes that it is possible for a toddler to have a child.
28
RAP affects
Contingent remainders, executory interest, vested remainder subject to open
29
Vested remainder subject to open
Vested in a class of persons, at least one of whom is qualified to take possession, but the shares of the class members are not yet fixed because more persons can subsequently become members of this class.
30
Are charities subject to the rule against perpetuities
It is OK for a charitable grant to be made in perpetuity. The rule against perpetuities does not apply to conveyances from one charity to another.
31
In order to mitigate the harshness of the rule against perpetuities, some states adopted the wait and see doctrine. What is the Wait and See Doctrine?
The general concept of wait and see is that a perpetuity violation should occur only if an interest actually fails to vest within the perpetuity. One must wait and see whether, in fact, the possibility turns out to be reality at the end of the measuring life.
32
Uniform statutory rule against perpetuities
Future interest satisfying the common law rule against perpetuities rules are valid. Any future interest that actually vests within 90 years is also valid. If the future interest fails to vest either within 21 years after the measuring life or within the 90 year period, the court may reform the interests in a manner that most closely conforms with the grantors intent and still complies with the rule against perpetuities.
33
Joint tenancy
Each tenant owns undivided share with the right of survivorship. Not devisable or descendinle because of the right of survivorship. A joint tenant’s interest, however, is transferable inter vivos.
34
What are the four unities required for a joint tenancy?
Time-The interest of each tenant has to vest at the same time.
Title- Each tenant musket title by the same instrument.
Interest-All interest in a joint tenancy must be equal shares. AND
Possession-Each tenant must have the right to possess the whole.
35
Straw man conveyance
At common law, O could not convey to herself and another as joint tenants because such a conveyance would violate the unity of time. The requirement, however, is easily satisfied by the use of a strawman conveyance. O conveys to T who immediately conveys back to O and the perspective joint tenant and the unities are thus preserved.
36
What happens if a joint tenancy is severed
The joint tenancy becomes a tenancy in common.
37
Will entering into a contract to sell sever a joint tenancy
Even the act of entering into a contract to sell will sever the joint tenancy as to the contracting joint tenant’s interest under the doctrine of equitable conversion.
38
Does the execution of a mortgage sever the joint tenancy
Under the lien theory of mortgages (majority view), A joint tenants execution of a mortgage does not sever the joint tenancy unless the mortgage is foreclosed upon.
Under the title theory of mortgages a joint tenant’s execution of a mortgage does sever the joint tenancy in regard to the encumbered share. The title theory of mortgages deems the tenancy terminated once the property is unilaterally mortgaged because it treats title as passing from the mortgagor to the mortgagee, thus severing the unity of title. The result is that the joint tenants become tenants in common, with the mortgagee the equitable owner of the undivided portion legally belonging to the mortgagor.
39
Does a lease sever the joint tenancy?
At Common law, a lease severs the joint tenancy. Under modern law a lease does not sever the joint tenancy.
40
Do forced sales sever the joint tenancy
Yes
41
What if one joint tenant murders another
Murder of one joint tenant by another joint tenant operates as a severance, converting the joint tenancy into tenancy in common. The murderer is thus not entitled to the victim’s share by right of survivorship.
42
Tenancy by the entirety
Husband and wife on undivided share with the right of survivorship
43
What does tenancy by the entirety require
Valid marriage, four unities (time title interest and possession), and right of survivorship. In states that recognize tenancy by the entirety, there’s a presumption that a conveyance to husband and wife creates a tenancy by the entirety unless it is clearly stated otherwise.
44
How can tenancy by the entirety the severed
Divorce, mutual written agreement between husband and wife (unilateral conveyance=no severance), execution by joint creditors (unilateral creditors= no severance).
45
Tenancy in common
Each tenant has undivided interest in the property with no right of survivorship.
46
Modern law presumes that a conveyance to two or more non-married person is a
Tenancy in common
47
What one unity is required for a tenancy in common
Possession. Each tenant must have an equal rate to possess the home.
48
What is required for a co tenant trying to obtain title through adverse possession
Ouster
49
If one cotenant has exclusive possession are the other co-tenants entitled to rent?
The other co- tenants are not entitled to rent unless there has been an ouster. And the ouster of a tenant does not entitle that tenant to rent.
50
 What is ouster?
Ouster is the wrongful exclusion of a cotenant
51
A cotenant has a right to contribution for any repairs she makes that are
Reasonable, necessary, and have been communicated to the other co-tenants.
52
Does a cotenant have a right to contribution for the cost of improvements
There is no right to contribution for the cost of improvements except upon partition of the cotenancy. When partition occurs, the improving cotenant is entitled to any increase in value caused by the improvements but will also be held liable for any decrease in value.
53
A cotenant must not commit what kind of waste
Affirmative waste, permissive waste, ameliorative waste
54
What is ameliorative waste
Ameliorative waste is an unauthorized improvement to the estate that changes these land’s physical character. (Ameliorative waste is prohibited unless all future interest holders consent.)
55
In an action for partition of a co tenancy, a court will require
An accounting between the tenants in common relating to the property.
56
The general rule is that disputes involving real property are governed by the law of
The state where the property is situated.
57
What is trespass?
Trespass is the invasion of land by tangible physical object. Trespass to land occurs either when the defendant intentionally enters plaintiff’s land without permission, the defendant remains on land without the right to be there, even if original entry was rightful, or the defendant places a tangible object on, or refuses to remove from, plaintiff’s land without permission.
58
Private nuisance
A substantial and unreasonable interference with a plaintiff’s use and enjoyment of her land. Defendant’s conduct must be negligent, abnormally dangerous, or intentional.
The defendant’s conduct is unreasonable if the harm to the plaintiff outweighs the utility of the defendant’s conduct or the harm caused to the plaintiff is greater than the plaintiff should be required to bear without compensation.
59
Lateral and subjacent support
If a neighbor’s excavation or excessive extraction of underground liquid deposits cause subsidence, the neighbor will be subject to liability in a tort action. The neighbor will also be strictly liable for damage to buildings on a landowner’s property if the land owner can show that the weight of the building did not contribute to the collapse of the land. If the land owner is not able to make that showing, the neighbor must be shown to have been negligent in order for the land owner to recover damages.
60
Riparian rights
Under the riparian principle, all landowners whose property is adjacent to a body of water have the right to make reasonable use of it. Therefore, a riparian owner will be liable to other riparian owners if her use of the water unreasonably interferes with other riparian owners use of the water
61
Prior appropriation
The general principle is that water rights are unconnected to land ownership and can be sold or mortgaged like other property. The water initially belongs to the state, but the first person to use a quantity of water from a water source for a beneficial use has the right to continue to use that quantity of water for that purpose. Subsequent users can use the remaining water for their own beneficial purposes provided that they do not infringe on the rights of previous users.
62
Percolating water/ground water
Percolating water is water that seeps or filters through the ground without any definite channel and not as part of the flow of any waterway. The owner of the property on the surface of the percolating water is entitled to make reasonable use of the percolating water but cannot commit waste.
63
Surface water and the common enemy doctrine
This doctrine holds that surface water, i.e. excess of rainwater, is a common enemy that damages property at random. Uphill property owners can take any steps to protect their land from the water, even if it causes damage to the property of others further down the hill. The downhill property owners are supposed to protect their own land, because water is a common enemy, and everyone has to provide their own protection. Today, most states have modified rules that require everyone to act reasonably under the circumstances in order to protect their own property and avoid unnecessary damage to the property of others.
64
Lease or leasehold estate
An interest in land whereby the owner grants another person the exclusive use of the land for a limited period of time, subject to certain terms and conditions, if any, set forth in the lease. The tenant has a present possessory interest in the land and the landlord has a future interest (reversion).
65
Tenancy for years, a.k.a. estate for years or term of years
This type of tenancy is for a fixed period of time and, because there is a fixed date for termination, no notice is required to end the arrangement at tenancy for years expires at the specified time.
66
Under the statute of frauds, when must a leasehold be in writing
A leasehold must be in writing if it is for longer than one year
67
Periodic tenancy
A periodic tenancy is a lease agreement which continues for successive periods until either party gives proper notice of termination. Notice is required to terminate.
68
How can a periodic tenancy be created?
A periodic tenancy can be created expressly, by written agreement, by implication, or by operation of law. A periodic tenancy is created by implication and there is no mention of duration but payment is required at specific intervals. Periodic tenancy is created by operation of law when there is an oral agreement for a leasehold that is longer than one year and a rental payment is made by the tenant and excepted by the landlord and when a tenant remains on the land after the expiration of the lease and submits a rental payment that is excepted by the landlord.
69
What is required for termination of a periodic tenancy?
To terminate a periodic tenancy the tenant must provide a reasonable period of notice. For leases shorter than a year, notice equal to the length of one period is required. For leases longer than one year, only six months notice is required. Notice must specify last day of your period as date for termination and not some intervening date. Note: these are default provisions that the parties may contract around.
70
Tenancy at will?
A tenancy at will is a leasehold with no stated duration that will endure only so long as both landlord and tenant desire.
71
Tenancy at will can be created by
Express agreement
Implication- A court may temporarily imply a tenancy at will when a tenant takes possession under an invalid oral lease. However, a rent payment by the tenant that is accepted by the landlord will convert the implied tenancy at will into an implied periodic tenancy.
72
What is required for termination of a tenancy at will?
Either party can terminate a tenancy at will at any time without advance notice, though generally modern statutes tend to require a notice period equal to one payment period.
73
Tenancy at sufferance, a.k.a. holdover tenancy
A tenancy at sufferance exist only when the tenant holds over at the end of a valid lease
74
How can a tenancy at sufferance be terminated?
A tenancy at sufferance last only until the landlord either evicts the tenant or elects to hold the tenant to a new tenancy
75
What are a tenant’s duties?
Duty to pay rent
Duty to repair
Duty to invited third parties
Tenant’s tort liability
76
Where the tenant breaches the duty to pay rent while still in possession of the land the landlord may
Evict the tenant through the eviction process OR
Continue tenancy and sue for back rent BUT
Self-help is prohibited
77
Where the tenant reaches the duty to pay rent while out of possession of the land, the landlord can
Accept the tenant surrender, leave the premises vacant and sue for back rent (minority of states), or relet the premises and sue the tenant for the deficiency (majority of states).
78
What may a landlord use a security deposit for?
A security deposit maybe used to cover damage to the property, cleaning, key replacement, and or back rent, but a landlord may not retain the security deposit beyond the damages actually incurred by the tenant’s breach.
79
If the lease is silent regarding repairs, the tenant must
Keep the premises in reasonably good repair by making ordinary repairs and must not commit waste.
80
A tenant’s removal of fixtures
Whenever a tenant removes a fixture, the tenant has committed voluntary waste. In the absence of an agreement, the tenant may remove any fixtures she installed so long as the removal will not substantially damage the property.
81
Fixture?
Personal property that is attached to land or a building that is objectively regarded as an irremoval part of the real property. Any express agreement between the landlord and tenant will control whether or not the personal property is a fixture.
82
Express covenant to maintain
If the lease expressly covenants that the tenant must maintain the premises in good condition, the tenant will be held responsible for any loss or destruction. At common law the tenant is responsible for any loss or destruction regardless of fault, including loss is caused by the force of nature. Today, however, the tenant may terminate the lease if the premises are destroyed and the tenant is not at fault.
83
What duty does a tenant have to invited third parties
The tenant has a duty to keep the land in reasonably good condition so the tenant will be liable for injury to invited third parties even if the landlord expressly promised to make all repairs. The tenant, however, may seek indemnification against the landlord if the landlord expressly promised to make all repairs.
84
What are a landlord’s duties
Duty to deliver possession
Implied covenant of quiet enjoyment
Implied warranty of habitability
Landlord tort liability
85
Landlord’s duty to deliver possession
The majority of states require that the landlord put the tenant in actual, physical possession at the beginning of the lease. This requires the landlord to evict any holdover tenant prior to the start of a new lease.
A minority of states only require legal possession, not actual, physical possession.
86
Implied covenant of quiet enjoyment?
The implied covenant of quiet enjoyment is an implied warranty that the landlord will not unreasonably interfere with the tenant’s use and enjoyment of the premises. This warranty applies to both commercial and residential leases and can be breached by either an actual wrongful eviction or a constructive eviction.
87
To make a claim for a constructive eviction, there must be
Substantial interference caused by the landlord’s actions or failure to act, notice to the landlord, and the tenant must vacate the premises within a reasonable time after the landlord fails to remedy the problem.
88
Implied warranty of habitability?
Applies only to residential leases
If a landlord provides premises that are uninhabitable, the tenant’s duty to pay rent may be excused.
The standards for habitability may be provided either by the local housing standards or by the court.
89
Can the implied warranty of habitability be waived by a tenant?
No
90
Tenant’s remedies for breach of the implied warranty of habitability
Move out and terminate lease
Reduce rent or withhold rent
Repair and deduct the cost of repairs from the rent OR
Remain in possession and sue for damages
91
Retaliatory eviction
Retaliatory eviction occurs when a landlord evicts a tenant in response to a complaint from the tenant concerning a condition of the building. A tenant can use retaliatory eviction as both an affirmative defense against an eviction and as a cause of action against a landlord.
92
Landlord liability for acts of other tenants
A landlord is generally not liable for the acts of other tenants but there are two exceptions. The landlord must not permit nuisance on the premises, and the landlord must control all common areas.
93
Under the common law, did a landlord have the duty to protect the tenant or the tenant’s licensees and invitees?
The landlord had no duty except in the following situations:
The landlord must disclose latent defects in which the landlord knows or has a reason to know.
If the landlord voluntarily repairs latent defects she must use reasonable care.
The landlord must use reasonable care in maintaining common areas under the landlord’s control.
A landlord is liable for any defective condition when the landlord leases land for public use and the landlord knows or should know that the tenant makes public use of the land of the defect and that the tenant will not fix the defect due to the nature of the defect or the length of the lease.
For a short term lease, three months or less, of a furnished dwelling, the tenants are treated as invitees and the landlord is liable for defects even if the landlord neither knows nor should know of them.
94
Fair Housing Act
The fair housing act prohibits discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status in renting or advertising rental housing.
The law allows discrimination in two narrow exceptions:
-The owner of a single-family home made discriminate in either renting or advertising the rental of the home, as long as the owner does not own more than three such homes.
-The owner of a 1 to 4 unit building who lives in one of the units may discriminate in rental housing, but may not discriminate in advertising a housing rental.
95
Can a landlord prohibit the tenant from assigning or sub letting her interest without the landlord’s prior written consent?
The landlord can prohibit the tenant from assigning or sub letting her interest without the landlord’s prior written consent but once the landlord consents to one transfer by the tenant, the landlord waives the right to object to any future transfers unless the landlord expressly reserves the right to prohibit future transfers.
96
Assignment
The transfer by the lessee of her entire interest, i.e., tenant transfers entire remaining term of leasehold.
97
If the assignee to whom the tenant gave interest, fails to make rent payments, can the landlord recover against the tenant?
Yes. The landlord can recover against the tenant if the landlord cannot recover from the assignee because the tenant is still in privity of contract with the landlord.
98
Can a landlord sue the assignee if she fails to make rent payments?
Yes. Privity of estate gives landlord and assignee the right to sue each other, because both are liable for respective covenants that run with the land.
99
Covenants that run with the land
Generally both burden and benefit the land and include the duty to pay rent, the duty to repair, the duty not to remove fixtures, etc.
100
Sublease
A sublease occurs where the tenant transfers her rights and obligations to a sub tenant for a portion of the term of the lease. The tenant retains the interest in the remaining part of the leasehold that was not transferred.
101
Relationships under a sublease
The relationship between the landlord and the original tenant remains the same. The tenant is liable for all covenants in the lease and the tenant can also enforce the landlord’s covenants. The sublease creates a new landlord tenant relationship between the lessee and sublessee so the sublessee is responsible to the lessee and vice versa. Sublessee has no legal relationship with the landlord and is not personally liable to her for rent. The only possible exception to this rule is the implied warranty of habitability for residential leases.
102
What is an easement
A grant of a non-possessory interest in land that entitles a person to use the land possessed by another
103
What are the two types of easements
Affirmative easement, negative easement
104
Affirmative easement
The owner of an affirmative easement has the right to go onto the land of another and do some act on the land.
105
How can affirmative easements be created?
By express grant, by implication, by necessity, by prescription.
106
An affirmative easement by express grant
An easement by grant is a deed allowing the grantee use of the property. Unless it is for less than one year it must be in writing. Also, it must be signed by the grantor, manifest intent to create an easement, describe the land, and identify the parties.
107
An affirmative easement created by implication
An easement by implication is not agreed-upon expressly but may be inferred by a court from existing use when the two properties were once a single track of land and later divided, there is apparent and continuous use on servient land, the parties intended that they use continue, and it is reasonably necessary to use and enjoy the dominant land.
108
Affirmative easement by necessity?
An easement by necessity is implied when an owner sells a portion of her estate and the result of the sale is a landlocked parcel of land. Requirements= Previous united ownership, absolute necessity, and necessity existed at the time of severance of the property.
109
Affirmative easement by prescription
Continuous and uninterrupted used for statutory.
Hostile (adverse)
Open and notorious
110
Negative easement
A negative easement gives easement holder the right to prevent servant owner from using her land in some way that would otherwise be permitted.
111
Common law negative easements
Light, air, subjacent or lateral support, stream water from an artificial flow.
112
Creation of negative easement
Negative easements can only be created expressly by writing signed by the grantor
113
What are the two forms of easements
Appurtenant and In Gross
114
Appurtenant easement
If an easement benefits its owner in the use and enjoyment of her land, it is alpurtenant to that land. An appurtenant Easement requires two pieces of land: the land benefited and the land burdened.
115
Easement in gross
If an easement does not benefit its owner in the use and enjoyment of her land but merely gives her the right to use the servant land, the easement is in gross. Easements in gross confer upon its owner a personal or pecuniary benefit not related to the use or enjoyment of her own land.
116
Transfer of easement appurtenant
An easement appurtenant passes automatically with the dominant tenement.
And easement appurtenant also passes automatically with the servient tenement unless the new owner is a bona fide purchaser without notice of the easement.
117
Transfer of easement in gross
Easements and gross are not transferable unless the easement is for a commercial purpose.
118
How can an easement be terminated?
Stated conditions, merger, release, abandonment by physical act of holder, estoppel, necessity, condemnation of servient tenement by eminent domain, distruction of servient tenement, or prescription.
119
Will expanded use terminate an easement
Expanded use will not terminate an easement
120
What is a license?
A License is the mere privilege to use another land for a specific purpose, e.g. tickets
121
Creation of a license
A license is not subject to the statute of frauds and therefore can be created orally or by writing. An oral grant to enter land is a license not an easement by express grant.
122
When is a license revocable?
A license is generally revocable at any time at the will of the licensor. There are two exceptions:
Estoppel-where a licensee has invested substantial expenditures or labor or both and reliance on the license continuation.
A license coupled with an interest is one that gives the licensee the right to remove chattels of the licensee which are on the license or land. A license coupled with interest cannot be revoked as long as the interest exist.
123
Profit
A profit is the right to enter the servient estate to remove minerals, timber, oil, etc. Profits are governed by the same rules of easements.
124
Covenant
A covenant is a contractual limitation related to land. Distinguish from an easement, which is a grant of a property interest. A covenant is enforced by bringing an action for damages. If a plaintiff seeks an injunction, it is an equitable servitude and not a covenant.
125
Do covenants require a writing?
Yes
126
Types of covenants
A negative or restrictive covenant is a promise not to do something related to the land. E.g. A promises not to errect a slaughterhouse for the benefit of O’s adjacent property.
A positive or affirmative covenant is a promise to do some thing related to the land.
127
A covenant runs with the land when it is
Capable of binding successors
128
In order for the burden of the covenant to run with the land, the following elements must be satisfied:
- Writing required
- The original parties must have intended the covenant to run with the land
- The covenant must touch and concern the land
- There must be horizontal and vertical pretty
- The successor must have notice (actual, imputed, record, inquiry) of the covenant at the time the successor acquired the interest
129
Horizontal privity
Horizontal privity is a nexus between the original parties. This means that the parties are successors in interest, e.g. grantor/grantee, landlord/tenant or mortgage or/mortgagee.
130
What is vertical privity
Vertical property is a nexus between the original party and the successor. Vertical privity requires a non-hostile connection between the original party and the successor, i.e. no adverse possession.
131
In order for the benefit of the covenant to run with the land, the following elements must be satisfied:
- Writing required
- The original parties must have intended the covenant to run with the land
- The covenant must touching concern the land
- There must be vertical privity
132
Equitable servitude
An equitable servitude is a promise concerning the land that binds the original parties and their successors. The difference between an equitable servitude and a covenant is the basis for release: a plaintiff enforcing an equitable servitude will seek an inJunction not damages.
133
Is a writing required for equitable servitude
A writing is generally required. The exception is an implied equitable servitude.
134
In order for the burden of an equitable servitude to run, the following elements must be satisfied:
- The general rule is that the equitable servitude must be in writing (exception: Implied equitable servitude)
- The original parties must have attended the promise to run with the land
- The equitable servitude must touch and concern the land
- The successor must have notice of the promise at the time the successor acquired the interest
- Neither horizontal nor vertical privity is required for the burden of an equitable servitude to run
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The benefit of an equitable servitude will run with the land at the following requirements are satisfied:
- writing
- Intent of original parties
- Touch and concern the land
- No notice required
- no privity required
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Implied equitable servitude
A reciprocal negative servitude can be implied from a developer’s actions where a developer develops a number of lots of land with a common scheme apparent from the development but one lot is sold without the equitable servitude in the deed.
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Implied equitable servitude elements
Common scheme existed before the sale AND
| The defendant must have had notice. Either actual, inquiry, and in some jxs record.
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Defense to equitable servitude
Change in surrounding area warrants alterations to the property. Change may affect the entire area around the property in question. Mere instances of limited change are not sufficient for the defense of change conditions to apply.
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Adverse possession
Adverse possession allows a person to obtain title of the land she has taken possession of for the statutorily prescribed period of time.
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Elements of adverse possession
Exclusive
Continuous for statutory period
Hostile
Open and notorious
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Tacking for adverse possession
Tacking permits a claimant to tack on her time in adverse possession with a predecessor adverse possessor’s time if there is privity between the two adverse possessors.
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The statute of limitations will not run against the owner if at the time the cause of action arose the owner was disabled. Disabilities include
Incapacity, infancy, imprisonment
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Can a subsequent conveyance from the prior record title owner defeat title acquired by adverse possession
Title acquired by adverse possession cannot be defeated by a subsequent conveyance from the prior record title owner even if the land is vacant at the time the buyer purchases the land.
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Formalities of land sale contract
- Writing required unless park performance by two of three
- Describe the land
- Identify the parties
- Specify price or state some other consideration AND
- Signed by the party to be bound
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Implied promises by seller and a land sale contract
Deliver marketable title at closing
No false statements of material fact
No failure to disclose latent material defects
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When is title unmarketable
Title is unmarketable if any part of the land is subject to adverse possession, encumbrances, such a servitude or a mortgage, or there are zoning violations.
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Do land contracts contain implied warranties of fitness or habitability?
The land contract contains no implied warranties of fitness or habitability.
Exception: the implied warranty of fitness and workmanlike construction will apply to the sale of a new home by vendor who also built the home.
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Portable conversion
Equitable conversion is a doctrine of the law of real property under which a purchasor of real property becomes the applicable owner of title to the property at the time she signs a contract binding her to purchase the land at a later date. Buyer gains a real property interest and seller has a personal property interest.
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Damages or distraction after equitable conversion
The majority view is that the risk is on the buyer. The buyer bears the risk of loss unless the contract expressly provides otherwise.
The minority view is at the risk is on the seller. And the seller unless the buyer has title or possession when a loss occurs.
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What happens at closing?
The deed becomes the operative contract. The deed transfers legal title to some interest in property from the seller to the buyer.
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In order for a deed to be valid, it must be
In writing, identify the parties, describe the property, and be signed by the grantor.
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A deed is not effective to transfer until it has been
Delivered by the grantor
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What does delivery of a deed require
Actual delivery: grantor physically or manually delivers the deed instrument to the grantee. Mail or use of an agent is sufficient.
Implied delivery: the grantor has the present intent, through words or actions, to make the deed operative and to pass an interest immediately to the grantee. Physical delivery of the deed is not required.
For delivery to be effective, the grantor must relinquish absolute and unconditional control of the property (handed to grantee, acknowledged by grantor before notary, recorded).
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What if a deed is absolute on its face but accompanied with oral conditions?
The court will ignore the oral conditions and consider the delivery absolute.
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What is delivery of deed by escrow?
The grantor delivers the deed to a third-party escrow agent with instructions to deliver the deed to the grantee when the conditions set forth by the grantor are satisfied. The title will pass from escrow to the grantee as soon as the conditions are satisfied.
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What are the requirements for a deed
Lawful execution of the deed, delivery of the deed, acceptance by grantee.
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Can one sue on title matters in the contract of sale after the deed is delivered and accepted?
The doctrine of merger provides that one can no longer see you on title matters in the contract of sale after the deed is delivered and accepted.
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Void deed
A void deed will be set aside even if the property has passed to a bona fide purchaser.
Forged, deed never delivered, fraud in factum.
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Voidable deed
Avoidable diva only be set aside if the property has not passed to a bona fide purchaser.
Lack of capacity, infancy, duress, breach of a fiduciary duty, Undue influence, mistake, fraud in inducement.
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What if a conveyance was made with the actual intent to hinder, delay, or defraud a creditor of the grantor or the grantor did not receive reasonably equivalent value in exchange
The creditors can set aside the conveyance.
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Types of deeds
Quitclaim deed, general warranty deed, special warranty deed
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Quitclaim deed?
Contain no covenants or promises by the grantor.
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A general warranty deed
General warranty deed contains six covenants that warrant against all defects in title. The three present covenants that are breached at the time of delivery include the covenant of seisinthe covenant of right to convey, and the covenant against encumbrances. The three future covenants that are breached if the grantee is disturbed while in possession include the covenant for quiet enjoyment the covenant of warranty and the covenant for further assurances.
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Covenant of seisin
The grantor warrants that she owns the property or interest she is now conveying. The measure of damages for breach is the return of all or portion of the purchase price.
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Covenant of right to convey
The grantor warrants that she has a right to convey the property.
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Covenant against encumbrances
Grantor warrants that there are no encumbrances on the property, including mortgages, liens, easements, covenants, etc.
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Covenant for quiet enjoyment
Grantor warrants that grantee will not be disturbed in possession and enjoyment of the property by third-party’s lawful assertion of superior title.
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Covenant of warranty
Grantor warrants that she will defend against lawful claims and that the grantor will compensate for any loss that grantee may sustain by assertion of superior title.
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Covenant for further assurances
Grantor promises that she will execute any other documents required and do anything else reasonably necessary to perfect title
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Special warranty deed
A special warranty deed only contains two promises by the grantor. The grantor has not conveyed the same esstate to another and the estate is free from encumbrances created by the grantor.
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The recording system protects whom
Bona fide purchasers and mortgagees.
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Notice jurisdiction
A subsequent purchase or for value without notice of the prior interest will prevail regardless of who recorded first
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Race notice jx
A subsequent purchase or for value without notice it records first will prevail
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Race jurisdiction
How many exists and two states. The first person to record prevails.
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Are donees, devisees, and heirs protected by the recording statutes
No. Unless of a BFP.
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For a date to be properly recorded, the deed must be
Record it in a way that would allow it to be discovered through reasonable search.
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The shelter rule
Any person who takes from a bona fide purchaser will prevail over any interest over which the bona fide purchaser would have prevailed, even where bona fide purchaser grantee had actual knowledge of the prior and recorded interest, or if bona fide purchaser’s grantee is a donee, devisee, or an heir. The policy behind the shelter rule is to give the BFP the value of her bargain.
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Wild deed
A wild deed is defined as a recorded deed that is not in the chain of title because of a previously unrecorded deed. A wild deed does not provide record notice to later purchasers of the property because subsequent bona fide purchasers cannot reasonably be expected to locate the deed while investigating the chain of title to the property.
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Estoppel by deed
A legal doctrine under which a first party, who purports to sell real property at the first party does not actually phone to a second party, must actually convey that property to the second party if the first party later requires title to that property. If O conveys property she doesn’t own to A by deed, but O later requires title to that land, then title immediately passes to A.
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Title insurance
An agreement to indemnify against loss arising from a defect in title to real property that is normally issued to the buyer of the property by the title company that conducts the title search. Such insurance is usually not required unless expressly set forth in the purchase and sale contract and basically provides for recovery in the case of breach of the warranty deed.
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Ademption by extinction
Ademption by extinction occurs when the testator has devised a specifically described piece of real property but the piece of property is no longer owned by the testator at her death.
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Is the beneficiary of a land transfer by will entitled to have any liens on the property paid off from the residuary estate?
At common law, a beneficiary was entitled to have any liens on the property paid off from the residuary estate. Modernly, the beneficiary takes subject to the liens.
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If the beneficiary dies before the testator dies then they get a real property to the predeceased beneficiary
Lapses Unless there is an anti-lapse statute. If there is an anti-lapse statute that is applicable, and the gift of real property will not lapse in the lineal descendants of the beneficiary take the gift.
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Real estate brokers and agents duty to disclose.
As agents, real estate brokers have a duty to disclose material information that they have actual knowledge of.
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Listing broker
The broker who obtains the listing from the seller and is responsible for assisting in the sale of the property. As the seller’s agent, a listing broker owes a fiduciary duty to the seller. The listing broker receives a commission from the sale of the property upon closing. If the sale fails to close due to the seller’s actions the listing broker may still earn a commission.
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Selling broker
Buyers agent. A selling broker primary relationship is with the buyer as they are responsible for showing the buyer properties that the buyer might be interested in purchasing. At common law selling brokers also owed a fiduciary duty to the seller. It is only since the early 1990s that states pass statute law to create buyers agency.
The selling broker is compensated with a portion of the listing broker’s commission.
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Mortgage
A mortgage conveys a security interest in the land intended by the parties to serve as collateral for repayment of a debt.
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Mortgagee
Creditor. Has a lien.
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What is a lien
A lein is a relationship between a debt and property that serves as collateral. If the debtor fails to pay the debt, the secured creditor can forclose the lien, force a sale of the collateral and have the proceeds of the sale applied to payment of the debt.
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Mortgagor
Debtor. Has title and the right to possession until foreclosure.
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What is required to create a legal mortgage
Writing, material information (parties and description of land).
Recording is not required but a creditor must properly record to have priority.
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Can parties to a mortgage transfer their interest?
All parties to a mortgage can freely transfer their interest.
193
Methods of transfer of mortgage by mortgagee
Endorsement of note and delivery to transferee or execution of separate document of assignment
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What is a holder and due course
A holder in due course is a person who takes a negotiable instrument, such as a promissory note, for value without knowledge of any apparent defect in the instrument nor any notice of dishonor. Status as a holder in due course is an affirmative defense against all personal defenses the debtor may have against the original creditor/mortgagee. In other words a holder in due course does not become responsible for the original creditors alleged misdeeds in the original credit transaction.
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What defenses are valid even against a holder in due course
Incapacity, illegality, infancy, insolvency, material alteration, duress, fraud in factum.
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What defenses are not valid against a hold her and do course
The personal defenses of lack of consideration, fraud in inducement, unconscionability, waiver, estoppel.
197
Buyer takes subject to a properly recorded mortgage
Owner is personally liable. Buyer is not personally liable but the property is subject to foreclosure.
198
Buyer expressly assumes mortgage
The buyer is primarily liable. The owner will be secondarily liable.
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Buyer impliedly assumes mortgage
In some jurisdictions, a buyer who did not expressly assume a mortgage may be deemed to have impliedly assumed it where the buyer paid the seller only the difference between what the house was worth and the outstanding balance on the mortgage obligation. In that case the buyer is liable and the owner is secondarily liable.
200
 Forclosure
A legal proceeding to terminate a mortgagor’s interest in property, instituted by the mortgagee either to gain title to the property or to force sale in order to satisfy the unpaid debt secured by the mortgage.
201
What if the sale proceeds of a mortgaged property are less than the loan
The mortgagor is personally liable if the proceeds of the sale do not satisfy the debt and the mortgagee can bring an action against the debtor to recover the deficiency.
202
Does a mortgagee have a right to take possession of collateral property before foreclosure?
Depends on the theory of mortgages in the jurisdiction. In lien theory jurisdictions know. In title theory jurisdictions yes.
203
If a foreclosure sale results in a surplus, the surplus is distributed by the following order:
Expenses of sale, attorneys fees and court costs
Accrued interest on foreclosed mortgage
Junior lienholders
Mortgagor
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Effect of foreclosure on junior lien holders
Junior lienholders are necessary parties who must be joined to the action
205
Effect of forclosure on senior lienholders
Lien holders that are senior to the foreclosed mortgage are not effected by the foreclosure sale. The buyer of the foreclosure property takes the property subject to these interests. This means that the senior lienholders may foreclose on the property if the senior debt is not repaid.
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What happens if there is more than one lien against the property?
Each lein will have a priority. A lien with priority higher than another is referred to as the senior or prior lein and the other is referred to as the subordinate or junior lein.
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Priority of a lien determined?
Most states recognize some kind of priority for purchase money mortgage.
Then a secured creditor who is first to record the mortgage has priority over all subsequently recorded mortgages.
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Subordination agreement in the context of foreclosure?
A subordination agreement is a legal document used to make the claim of one party Junior to a claim in favor of another. Subordination agreements are permissible.
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Equitable subrogation
Equitable subrogation is a doctrine whereby one who pays off the mortgage obligation of another is treated as the beneficial owner of that original obligation. The doctrine of equitable subrogation, which is based upon principles of equity and objective fairness, is often employed to preserve the priority rights of a first lienholder. Under this rule, when the proceeds from one mortgagee loan are utilized to satisfy the outstanding obligations under an earlier mortgage, equitable subrogation afford such second mortgagee the right to be substituted into the position of the earlier mortgagee and afforded priority over subsequent leins and creditors to the extent it satisfied the earlier debt.
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Equity of redemption, a.k.a. common law right of redemption
At common law, while the foreclosure is in progress, the mortgage debtor has the right to redeem the property from the mortgagee by paying the full amount past due under the mortgage including interest and attorney fees. That common law right is terminated as of the time of the foreclosure sale.
211
What is a mortgage acceleration clause
A mortgage acceleration clause is a common provision of a mortgage or note providing a holder with the right to demand that the full outstanding balance is immediately due in the event of default.
212
A clog on equity redemption
Is a provision in a mortgage agreement to prevent redemption by payment of debt or performance of the operation for which the security was given. Such a provision is void.
213
Statutory right of redemption
In a minority of states, the debtor also has a statutory right to redeem the collateral from the buyer after the foreclosure sale. Statutory right to redeem range in length from about six months to three years, with one year being the most common period. The debtor maintains the right to possess the property during the statutory period And, if the debtor redeems, the foreclosure sale is undone and the debtor regains title to the property.
214
Installment land contract
The buyer will only obtain legal title to the property after all installment payments are made, i.e., full contract price is paid.
215
Equitable mortgage (absolute deed)
The deposit of title deeds, by the owner of an estate, with a person from whom he has borrowed money, with an accompanying agreement to execute a regular mortgage, or buy the mere deposit, without even any verbal agreement respecting a regular security.
Parol evidence is admissible to demonstrate the intent of the parties.
Bona fide purchasers prevail.
216
Sale-leaseback
Owner sells property for cash and then leases it back from the buyer. This may be treated as a mortgage.
217
Eminent domain, a.k.a. the takings clause
The government may take private property for public use if it provides just compensation. (Federal=5th amend, state=14th amend)
218
Types of taking
Possessory taking
Total regulatory taking= No reasonable economically viable use of entire property
Partial taking if the taking does not pass the pen central balancing test
219
Penn Central balancing test
Well there is no set formula for determining when justice and fairness require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons, the Supreme Court has set forth the following balancing test to be applied to the particular circumstances of each case: nature of government action, level of diminution in value of the owner property, and property owner’s reasonable investment backed expectations.
220
Zoning ordinances
Zoning ordinances are laws restricting the use of land and are valid exercises of the state’s police power.
221
What is zoning destroys economic value of land
Regulatory taking
222
What happens when a new zoning ordinance makes a once lawful use non-conforming?
Existing non-conforming uses need not cease immediately.
223
Is zoning variance will be granted if the proponent demonstrates
Undue hardship and the public will not suffer a substantial detriment from the variance, i.e. the value of the neighboring properties will not decrease as a result of granting the variance. 
224
Exactions
Exactions are concessions requiring the developer or landowner to pay for or provide public facilities or amenities as a condition to a municipality’s approval of a development permit. Exactions are unconstitutional under the fifth and 14th amendments unless the municipality proves that an exaction’s purpose has an essential nexus to the type of harm that the development will cause and there is rough proportionality between the exaction and the development’s projected cost.
