REAL PROPERTY

Question 1

FEE SIMPLE

Answer 1

In present estates, fee simple is the default estate. A fee simple is created when the grantor uses any of the following language:

1. "O to A"
2. "O to A and his/her heirs"
3. "O to A forever"

Question 2

DEFEASIBLE FEE

Answer 2

A defeasible fee is a conveyance in fee simple in which the grantor places express conditions on the conveyance (e.g., “O to A on the condition that . . .”).

A defeasible fee is capable of lasting forever, but may be terminated by the occurrence of an event.

A defeasible fee gives the grantee a present possessory interest in the property, but reserves a future interest in the property in the favor of the grantor or a third party. There are three main types of defeasible fees:

1. Fee Simple Determinable
2. Fee Simple Subject to Condition Subsequent
3. Fee Simple Subject to Executory Interest

Question 3

FEE SIMPLE DETERMINABLE

Answer 3

A fee simple determinable is a conditional conveyance in which the grantor retains a future interest as a possibility of reverter.

The possibility of reverter vests automatically when the condition fails (i.e., the grantor does not have to reclaim the property, the interest automatically vests back to him).

A fee simple determinable is created when the grantor uses durational language, such as: “while,” “during,” or “until.”

Question 4

FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT

Answer 4

A fee simple subject to condition subsequent is a conditional conveyance in which the grantor retains a future interest as a right of entry.

The right of entry does NOT vest automatically when the condition fails (i.e., the grantor must reclaim the property).

A fee simple subject to condition subsequent is created when the grantor uses conditional language, such as: “provided that,” or “on the condition that.”

Question 5

FEE SIMPLE SUBJECT TO EXECUTORY INTEREST

Answer 5

A fee simple subject to executory interest is a conditional conveyance in which a third party (not the grantor) is granted an executory interest in the property.

An executory interest is a future interest that divests (i.e., terminates) an earlier interest.

Question 6

LIFE ESTATE

Answer 6

A life estate is a present possessory estate that is limited by a person’s life (terminates when the measuring life dies). A life estate is created when the grantor uses the following language:

1. "O to A for A's life" (A is the measuring life - life estate terminates when A dies).
2. "O to A for B's life" (B is the measuring life - life estate terminates when B dies).

Question 7

TRANSFERABILITY OF A LIFE ESTATE

Answer 7

A life estate is transferable. The transferee’s interest in the property terminates upon the death of the measuring life.

Question 8

REVERSION

Answer 8

If possession of the land goes back to the grantor after a life estate terminates, then the grantor retains a reversion.

Question 9

VESTED AND CONTINGENT REMAINDERS

Answer 9

If possession of the land goes to a third party after a life estate terminates, then the third party takes a remainder.

A remainder can be vested or contingent: A vested remainder is a future interest that is both:

1. Given to an ascertained (i.e., readily identifiable) grantee; AND
2. NOT subject to a condition precedent (i.e., a condition that must be satisfied in order for the interest to vest).

If either of the two above elements fail, the remainder is contingent.

Question 10

TENANCY IN COMMON

Answer 10

A tenancy in common is the default estate created by a conveyance of real property to two or more people.

The grantor need NOT use any type of explicit language to create a tenancy in common (e.g., “O to A and B”). Each tenant in common has:

1. A separate but undivided interest in the property (i.e., the property does not have to be physically divided);
2. The right to possess and enjoy the entire property; AND
3. The right to transfer their interest in the property freely during their lifetime or at death (i.e., NO right of survivorship).

Question 11

JOINT TENANCY

Answer 11

A joint tenancy is a conveyance of real property to two or more people that is distinguished by a right of survivorship, whereby the surviving joint tenants automatically take the deceased tenant’s property interest. Thus, joint tenants cannot pass their property interest by will or intestate succession (at death, their property interest automatically passes to the other joint tenants).

Question 12

SEVERANCE OF THE JOINT TENANCY BY CONVEYANCE

Answer 12

If any of the four unities are severed, then the joint tenancy is terminated and the cotenants hold the property as tenants in common.

When a joint tenant conveys her interest to a third party, that party takes the property as a tenant in common (clearly destroys the time and title unities).

If there were originally two joint tenants, the conveyance converts the estate into a tenancy in common (i.e., the two tenants are now tenants in common with no right of survivorship).

If there were originally three or more joint tenants, the joint tenancy remains among the other joint tenants not involved in the conveyance while the third party is a tenant in common.

Question 13

SEVERANCE OF THE JOINT TENANCY BY MORTGAGE

Answer 13

When a joint tenant grants a mortgage interest in the joint tenancy to a creditor, the effect will depend on the jurisdiction:

1. In a lien theory jurisdiction (majority view), the mortgage is treated as a lien and does NOT terminate the joint tenancy.
2. In a title theory jurisdiction (minority view), the mortgage will terminate the joint tenancy, and the tenants will then hold the property as tenants in common.

Question 14

COTENANT DIVISION OF OPERATING EXPENSES AND RENT PAYMENTS

Answer 14

Operating expenses are divided based on the ownership interests of each cotenant. Operating expenses consist of necessary charges (e.g., taxes and mortgage payments). Rent payments received from a third party’s possession of the property, minus operating expenses, are divided based on the ownership interests of each cotenant.

Question 15

COTENANT DIVISION OF REPAIR COSTS AND IMPROVEMENT COSTS

Answer 15

Repair costs (even if the repairs are necessary) are NOT divided between the cotenants (i.e., there is no right for reimbursement for necessary repair costs). However, the cotenant who pays for the repairs can get credit for the repairs in a partition action. Improvement costs are NOT divided between the cotenants (i.e., there is no right for reimbursement for improvement costs).
However, the cotenant who pays for the improvements can get credit for the repairs in a partition action.

Question 16

OUSTER

Answer 16

Each cotenant (whether a joint tenant or tenant in common) has the right to possess and enjoy ALL of the property, regardless of ownership share. An ouster occurs if a cotenant denies another cotenant access to the property. If this occurs, the ousted tenant can:

1. Get an injunction granting access to the property; AND/OR
2. Recover damages for the value of the use while
   ousted.

Question 17

PARTITION IN KIND

Answer 17

A partition action is an equitable remedy that is available unilaterally to joint tenants and tenants in common. A partition in kind physically divides the property into distinct portions. Courts have a preference for physical divisions of property over forced sales.

Question 18

PARTITION BY SALE

Answer 18

A partition action is an equitable remedy that is available unilaterally to joint tenants and tenants in common. A partition by sale involves selling the property and dividing the proceeds from the sale among each cotenant based on their ownership interests. Courts will order a partition by sale if a partition in kind is:

1. NOT practicable; OR
2. NOT fair to all parties.

Question 19

TYPES OF LEASEHOLD INTEREST

Answer 19

The relationship between a landlord and a tenant can create four types of possessory estates (tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance). This relationship is generally governed by a contract (the “lease”), which contains the covenants of the parties. Generally, each party must perform his promises pursuant to the lease whether or not the other party performs his promises.

Question 20

TENANCY FOR YEARS

Answer 20

A tenancy for years is an interest that lasts for a fixed and ascertainable amount of time. If the term is longer than one year, then the agreement must be in writing because of the statute of frauds. A tenancy for years automatically terminates when the term expires.

Question 21

PERIODIC TENANCY

Answer 21

A periodic tenancy is a repetitive and ongoing interest that continues for a set period of time until it is terminated by proper notice from either party (e.g., month-to-month lease, year-to-year lease, etc.). The parties must intend to create a periodic tenancy. Intent can be express (e.g., a specific term in the signed lease agreement) or implied (e.g., ongoing payment of rent).

Question 22

TENANCY AT WILL

Answer 22

A tenancy at will continues until it is terminated by either party. It may be terminated at any time for any reason, and may be terminated without notice. The parties must intend to create a tenancy at will. Intent can be express (e.g., a specific term in the signed lease agreement gives either party or both parties the “right to terminate at will”) or implied (e.g., ongoing payment of rent at will). If the agreement gives only the landlord the right to terminate at will, the tenant also gets the right to terminate implicitly. If the agreement gives only the tenant the right to terminate at will, the landlord is not given the right to terminate at will.

Question 23

TENANCY AT SUFFERANCE

Answer 23

A tenancy at sufferance is created when the tenant refuses to vacate the premises after his lease has terminated. This situation creates a temporary tenancy, where the terms of the prior lease control, until:

1. The landlord evicts the tenant;
2. The landlord re-leases the property to the tenant; OR
3. The tenant voluntarily vacates.

Question 24

THE TENANT’S DUTY TO PAY RENT

Answer 24

The tenant has a contractual duty to pay rent to the landlord in exchange for his possessory interest in the landlord’s property. If the tenant fails to pay rent, the landlord may evict the tenant or sue the tenant for breach of contract. However, there are three main situations where the duty to pay rent is suspended:

1. The premises are destroyed (so long as the tenant did not cause the damage);
2. The landlord completely or partially evicts the tenant; OR
3. The landlord materially breaches on the lease.

Question 25

IMPLIED WARRANTY OF HABITABILITY

Answer 25

A warranty of habitability is implied in every residential lease (NOT commercial leases). The implied warranty of habitability requires landlords to maintain their property such that it is reasonably suitable for basic human needs (failure to comply with applicable housing codes constitutes a breach). The tenant cannot waive habitability protection. If the landlord breaches the implied warrant of habitability, the tenant may:

1. Vacate the premises and terminate the lease (the tenant is not required to vacate the premises);
2. Withhold or reduce the rent (if the tenant chooses to withhold rent, the tenant must first notify the landlord of the problem and give the landlord a reasonable opportunity to correct the problem);
3. Remedy the defect and offset the costs against the rent; OR
4. Defend against eviction.

Question 26

IMPLIED COVENANT OF QUIET ENJOYMENT

Answer 26

Every lease (commercial and residential) includes an implied covenant of quiet enjoyment.

This covenant is a promise by the
landlord not to interfere with the tenant’s possession of the leased
premises. It is breached only when the conduct of the landlord or
someone with superior title prevents the tenant from possessing the
leased premises

The implied covenant of quiet enjoyment is breached (tenant may withhold rent or seek damages) if the tenant is constructively evicted. A constructive eviction occurs if the:

1. Landlord caused the premises to be unsuitable for their intended purposes;
2. Tenant notified the landlord of the problem;
3. Landlord did not correct the problem; AND
4. Tenant vacates the premises after a reasonable amount of time passed.

Question 27

LEASE ASSIGNMENTS

Answer 27

An assignment is a complete transfer of the tenant’s entire remaining term under the lease. In an assignment, the landlord can collect rent from the assignee or the original tenant.

Question 28

SUBLEASES

Answer 28

A sublease is a transfer of less than the tenant’s entire remaining term under the lease. In a sublease, the landlord can only collect rent from the original tenant. The subtenant only has rent obligations to the original tenant.

Question 29

LEASE SURRENDER

Answer 29

A surrender terminates the lease agreement and ends the landlord-tenant relationship between both parties (releases both parties from their duties and obligations under the lease agreement). A surrender occurs when a tenant returns possession of the leased premises to the landlord before the expiration of the lease and the landlord consents.

Question 30

LEASE ABANDONMENT

Answer 30

An abandonment occurs when the tenant unilaterally returns possession of the leased premises before expiration of the lease WITHOUT the landlord’s consent. Here, the tenant will have to continue paying rent until the landlord is able to find a replacement tenant. If the tenant refuses to pay rent, the landlord is entitled to damages for the difference between the original rent and the rent received from the replacement tenant.

Question 31

LANDLORD’S DUTY TO MITIGATE

Answer 31

Under the majority rule, the landlord has a duty to mitigate damages if the tenant abandons the property early or is evicted by making reasonable efforts to re-rent the property to another tenant. The landlord is entitled to damages for the difference between the original rent and the rent received from the replacement tenant. Under the minority rule, the landlord does not have to mitigate damages.

Question 32

REAL COVENANTS: BENEFIT RUN

Answer 32

A real covenant is a promise concerning the use of the land that runs to successors to the promise. The benefit of the covenant is the ability to enforce the covenant. In order for a benefit to run to successors, the following four elements must be present:

1. Writing. The covenant must be included in writing in the original conveyance.
2. Intent. The original parties must have intended for the covenant to run with the land.
3. Touch and Concern. The covenant must touch and concern the land (i.e., the benefit of the covenant must affect both the promisee and promisor as owners of the land - usually by increasing the value of the land).
4. Relaxed Vertical Privity. The successor need only take an interest that is carved out of the original party's estate [i.e., the successor can take less than the original party's entire interest in the property - e.g., the successor takes a life estate from a fee simple).

Question 33

REAL COVENANTS: BURDEN RUN

Answer 33

A real covenant is a promise concerning the use of the land that runs to successors to the promise. The burden of the covenant is being subject to it or bound by it. In order for a burden to run to successors, the following six elements must be present:

1. Writing. The covenant must be included in writing in the original conveyance.
2. Intent. The original parties must have intended for the covenant to run with the land.
3. Touch and Concern. The covenant must touch and concern the land (i.e., the benefit of the covenant must affect both the promisee and promisor as owners of the land - usually by increasing the value of the land).
4. Strict Vertical Privity. The successor must take the original party's entire interest.
5. Horizontal Privity. The instrument used in the conveyance of the property between the original parties must contain the estate and the covenant (e.g., the deed contains the covenant).
6. Notice. The new owner must have notice of the covenant. Notice may be either actual or constructive (i.e., record notice).

Question 34

EQUITABLE SERVITUDES

Answer 34

An equitable servitude operates like a real covenant with easier requirements. The main difference between a real covenant and an equitable servitude is in the remedy. The remedy for a breach of a real covenant is money damages while the remedy for a breach of an equitable servitude is injunctive relief. In order to bind a successor, the following four elements must be present:

1. Writing. The servitude must be included in writing in the original conveyance.
2. Intent. The original parties must have intended for the servitude to run with the land.
3. Touch and Concern. The servitude must touch and concern the land (i.e., the servitude must affect both the promisee and promisor as owners of the land - usually by increasing the value of the land).
4. Notice. The new owner must have notice of the servitude. Notice may be either actual, constructive (i.e., record notice), or inquiry.

Question 35

IMPLIED RECIPROCAL SERVITUDES

Answer 35

Implied reciprocal servitudes arise in planned subdivisions (implied from the common scheme). Most jurisdictions impose the following requirements to enforce an implied reciprocal servitude:

1. There must be intent to create a servitude on all plots (i.e., a common scheme);
2. The servitude must be negative (i.e., a promise to refrain from doing something); AND
3. The party against whom enforcement of the servitude is sought must have actual, constructive, or inquiry notice.

Question 36

EXPRESS EASEMENT

Answer 36

An easement is a right held by one person to use another’s land. An express easement can be created by grant or by reservation:

1. An express easement by grant arises when it is affirmatively created by the parties in a writing that satisfies the statue of frauds.
2. An express easement by reservation is created when a grantor conveys land but reserves an easement right in that land for his own use.

Question 37

IMPLIED EASEMENT BY IMPLICATION

Answer 37

An easement is a right held by one person to use another’s land. An implied easement by implication is created when:

1. A single tract of land is divided by a common owner and a piece of the land is conveyed to another;
2. Before the division, the common owner used the single tract of land as if there was an easement on it;
3. After the division, the common owner's use of the conveyed land must be continuous and apparent; AND
4. Such use must be reasonably necessary for the owner's use and enjoyment

Question 38

IMPLIED EASEMENT BY NECESSITY

Answer 38

An easement is a right held by one person to use another’s land. An implied easement by necessity is created when:

1. A single tract of land is divided by a common owner and a piece of the land is conveyed to another; AND
2. Necessity arose when the land was divided into two separate estates where one of the properties became virtually useless without the easement.

Question 39

IMPLIED EASEMENT BY PRESCRIPTION

Answer 39

An easement is a right held by one person to use another’s land. An implied easement by prescription is created when a landowner allows a trespasser to use his land continuously for the statutory period. The trespasser’s use must be:

1. Hostile (i.e., without permission from the owner of the land);
2. Open and notorious (i.e., not hidden); AND
3. Continuous for the statutory period.

Unlike adverse possession, the use need NOT be exclusive (e.g., a public easement).

Question 40

TERMINATION OF AN EASEMENT

Answer 40

An easement may be terminated by any of the following:

1. Release. An easement is terminated if the holder expressly releases it. The release must be in writing and satisfy the statute of frauds.
2. Merger. An easement is terminated if the holder acquires fee title to the underlying estate - the easement merges into the title.
3. Abandonment. An easement is terminated if the holder demonstrates an intent to never use the easement again through physical action (i.e., requires more than non-use or statements).
4. Prescription. An easement is terminated if the holder fails to protect against trespassers for the statutory period.
5. Sale to a Bona Fide Purchaser. An easement may be terminated if the landowner sells the property.
6. Estoppel. An easement is terminated if the landowner reasonably relies to his detriment on the easement holder's assurance that the easement will no longer be used.
7. End of Necessity. An easement by necessity terminates if it is no longer necessary.

Question 41

PROFITS AND LICENSES

Answer 41

The following two interests are NOT easements:

1. A profit is a right to enter another's land to remove a specific natural resource.
2. A license is a revocable permission to use another's land (e.g., a ticket to a music concert).

Question 42

FIXTURES

Answer 42

A fixture is tangible personal property (i.e., chattel) that is attached to real property in such a manner that it is treated as part of the real property when determining its ownership. Generally, a chattel is considered a fixture if the owner of real property intends for the chattel to become a fixture by attaching it to the real property. Such intent is judged by applying an objective, reasonable person standard that examines such factors as:

1. The importance of the chattel to the real property;
2. Whether the chattel was specially designed for use on the real property; AND
3. The amount of damage that removal of the chattel would cause to the real property.

Question 43

STRUCTURES BUILT ON REAL PROPERTY

Answer 43

Structures built on real property (e.g., walls) and materials incorporated into a structure (e.g., bricks used in making a wall) become part of the real property. The owner of the real property is generally also the owner of any structures on the real property (including the materials incorporated into the structures).

Question 44

LAND SALE CONTRACT REQUIREMENTS

Answer 44

A valid contract for the sale of land must satisfy the statute of frauds. Generally, the contract must be in writing, signed by the party to be charged, and contain all essential terms (e.g., parties, property description, price).
However, promissory estoppel operates as a valid exception where a party reasonably and foreseeably relied on the land sale contract to his detriment and would suffer hardship if the contract is not enforced. Also, partial performance by either the seller or buyer is treated as a valid exception to the writing requirement in many jurisdictions if any two of the following three are met:

1. Possession by the purchaser;
2. Payment of all or part of the purchase price; OR
3. Improvements to the land made by the purchaser.

Question 45

DEED MERGER

Answer 45

Covenants under the land sale contract are merged into the deed and cannot be enforced unless the covenant is also in the deed. Prior to closing, any liability must be based on a provision in the land sale contract. After closing, any liability must be based on a deed warranty.

Question 46

IMPLIED COVENANT OF MARKETABLE TITLE

Answer 46

In every land sale contract, the seller has a duty to convey marketable title to the buyer at closing.
Marketable title is title that is free from an unreasonable risk of litigation. If there is a defect in title rendering title unmarketable, it must be fixed or cured before closing (at which point the contract and deed merge and the deed controls). If the seller cannot deliver marketable title at closing, the buyer can rescind the contract without penalty.

Question 47

DEFECTS IN TITLE THAT RENDER TITLE UNMARKETABLE

Answer 47

Defects in title that render title unmarketable include:

1. Title acquired by adverse possession that has not yet been quieted (i.e., supported by a judicial decree).
2. Future interest holders that have not agreed to the transfer;
3. Private encumbrances (e.g., mortgage, covenant, option, or easement);
4. Violation of a zoning ordinance; OR
5. Significant physical defect (encroachment on the land that is incurable).

Question 48

WAIVER OF THE IMPLIED COVENANT OF MARKETABLE TITLE

Answer 48

The land sale purchaser may choose to waive the requirement that the seller deliver marketable title at closing.
However, a seller CANNOT cancel a land sale contract for failure to deliver marketable title if the buyer chooses to waive the requirement.

Question 49

NEW CONSTRUCTION IMPLIED WARRANTIES

Answer 49

The implied warranty of fitness or suitability applies to defects in new construction. It protects against latent defects (i.e., defects that are not discoverable from a reasonable inspection) and warrants that the new construction is safe and fit for human habitation. In most jurisdictions, both the initial purchaser and subsequent purchasers may recover damages. In other jurisdictions, only the initial purchaser can enforce this warranty.

Question 50

DUTY TO DISCLOSE PROPERTY DEFECTS

Answer 50

Most jurisdictions impose a duty on the seller to disclose material defects to the buyer. Material defects are defects that substantially impact the:

1. Value of the property;
2. Desirability of the property; OR
3. Health and safety of its occupants.

Question 51

EQUITABLE CONVERSION AND RISK OF LOSS

Answer 51

In the majority of jurisdictions, the purchaser holds equitable title during the period between the execution of the contract and the closing and delivery of the deed. During this period, the purchaser is responsible for any damages to the property while the seller, as holder of legal title, has the right to possess the property. In a minority of jurisdictions, the risk of loss is on the seller until closing and delivery of the deed.

Question 52

THE MORTGAGE AND THE NOTE

Answer 52

A mortgage is a security device used to secure repayment of a debt. The note is the borrower’s promise to repay the debt or loan. The mortgage is the device that provides security to the note by allowing the lender to force a foreclosure sale to recover the outstanding debt if the borrower defaults on the loan.

Question 53

PURCHASE-MONEY MORTGAGE

Answer 53

A purchase-money mortgage is a mortgage where the borrower takes out a loan for the purpose of purchasing property.

Question 54

FUTURE-ADVANCE MORTGAGE

Answer 54

A future-advance mortgage is a line of credit used for home equity, construction, business, and commercial loans (often called a “second mortgage”).

Question 55

DEED OF TRUST

Answer 55

A deed of trust is an alternative used instead of a mortgage as a security device. A deed of trust operates like a mortgage, but involves three parties:

1. The borrower;
2. The lender; AND
3. A third-party trustee who holds title of the property until the loan is paid off.

Question 56

INSTALLMENT LAND CONTRACT

Answer 56

An installment land contract is an alternative used instead of a mortgage as a security device. The seller finances the purchase in an installment land contract retaining title until the buyer makes the final payment on the installment plan.

Question 57

ABSOLUTE DEED

Answer 57

An absolute deed is an alternative used instead of a mortgage as a security device. It is an instrument used by the borrower to transfer the deed to the property instead of conveying a security interest in exchange for a loan.

Question 58

MORTGAGE TRANSFER BY THE BORROWER

Answer 58

The borrower may transfer the property by deed (i.e., selling), will, or intestate succession. The borrower remains personally liable after the transfer unless the lender releases the borrower from his obligation or the lender modifies the transferee’s obligation. If the transferee assumes the mortgage, the transferee is primarily liable upon default while the original borrower is secondarily liable. If the transferee takes title subject to the mortgage, the transferee is not personally liable upon default while the original borrower remains liable (this is the default/presumed option).

Question 59

ACCELERATION CLAUSES

Answer 59

A due-on-sale clause allows the lender to demand immediate full payment from the borrower upon transfer of the property. A due- on-encumbrance clause allows the lender to demand accelerated payments from the borrower when the borrower obtains a second mortgage or otherwise encumbers the property.

Question 60

FORECLOSURE

Answer 60

A foreclosure is a forced sale of an asset where the proceeds of the sale are used to pay off the debt. If the proceeds are not enough to cover the debt, the lender may seek a deficiency judgment against the borrower. If there are excess proceeds, the money will be used to satisfy other creditor

Question 61

CREDITOR PRIORITY AFTER FORECLOSURE

Answer 61

If there are excess proceeds after a foreclosure sale, the money will be used to satisfy other creditors. Generally, interests acquired before the interest that is being foreclosed (senior interests) survive the foreclosure while interests acquired after the interest that is being foreclosed (junior interests) are extinguished by the foreclosure. All surviving debts must be satisfied in chronological order starting with the oldest and moving down, unless any of the following exceptions apply:

1. Purchase-Money Mortgages. A purchase-money mortgage has priority over all other mortgages, even those earlier in time, that arose prior to the borrower's acquisition of the property.
2. Unrecorded Senior Mortgages. A junior mortgage that is properly recorded may take priority over an unrecorded senior mortgage.
3. Subordination Agreements. A senior lender can agree to subordinate its interest to a junior interest.
4. Mortgage Modifications. A senior lender and borrower can agree to modify the mortgage. If the modification is more burdensome on the borrower, the senior lender subordinates its interest. However, only the modification subordinates (the original mortgage remains senior).

Question 62

ADVERSE POSSESSION

Answer 62

Adverse possession allows a trespasser in unlawful possession of land owned by another to acquire title to that land if their possession is:

1. Continuous for the statutory period (seasonal or infrequent use will suffice if the use is consistent with the type of property being possessed).
2. Open and notorious (the adverse possessor must use the property as if they were a true owner - their possession cannot be hidden from the true owner);
3. Exclusive (the adverse possessor cannot share possession of the land with the true owner); AND
4. Hostile (the adverse possessor cannot have the true owner's consent to possess or use the property).

Question 63

ADVERSE POSSESSION STATUTORY PERIOD ISSUES: TACKING AND DISABILITIES

Answer 63

Tacking. An adverse possessor can tack on the time of possession of a prior adverse possessor to meet the statutory period requirement if the adverse possessors are in privity with one another (i.e., the transfer of land was voluntarily agreed upon).

Disabilities. The statutory period will not run against a true owner who had a disability (e.g., insanity, imprisonment, etc.) at the time the adverse possession begun.

Question 64

DEED REQUIREMENTS

Answer 64

A valid deed must:

1. Satisfy the statute of frauds;
2. Identify the parties and describe the property;
3. Be delivered (a deed is delivered when the grantor demonstrates a present intent to transfer the property to the grantee or his agent - physical transfer of a deed is not required); AND
4. Be accepted (acceptance is generally presumed)

Question 65

DELIVERY AND ACCEPTANCE OF A DEED

Answer 65

A valid deed must be delivered and accepted. A deed is delivered when the grantor demonstrates a present intent to transfer the property (physical transfer of a deed is not required - present intent can be demonstrated orally). A deed is NOT delivered if the delivery is revocable (e.g., “I will transfer you this property in 3 weeks, unless I change my mind before then”). A grantor can make a valid delivery to an agent (e.g., a grantor can deliver a deed to his attorney with clear instructions to deliver it to the grantee). Acceptance is generally presumed provided that the transfer is for value.

Question 66

GENERAL WARRANTY, SPECIAL WARRANTY, AND QUITCLAIM DEEDS

Answer 66

After closing, the land sale contract merges into the deed. Subsequently, any liability must arise out of the deed rather than the contract. There are three kinds of deeds:

1. General Warranty Deed. General warranty deeds provide the greatest amount of title protection. The grantor warrants title against all defects, even if the grantor did not cause the defects.
2. Special Warranty Deed. Special warranty deeds provide less title protection than general warranty deeds. The grantor warrants titles against defects caused by the grantor.
3. Quitclaim Deed. Quitclaim deeds provide the least amount of title protection. The grantor makes no warranties as to the health of the title.

Question 67

PRESENT COVENANTS IMPLIED IN GENERAL AND SPECIAL WARRANTY DEEDS

Answer 67

There are three present covenants implied in general and special warranty deeds:

1. Covenant of Seisin. Warrants that the deed describes the land in question and that the grantor is the rightful owner.
2. Covenant of the Right to Convey. Warrants that the grantor has the right to convey the property.
3. Covenant Against Encumbrances. Warrants that there are no undisclosed encumbrances on the property that could limit its value.

Question 68

FUTURE COVENANTS IMPLIED IN GENERAL AND SPECIAL WARRANTY DEEDS

Answer 68

There are three future covenants implied in general and special warranty deeds:

1. Covenant of Quiet Enjoyment. Grantor promises to defend against future challenges to the grantee's title to the property.
2. Covenant of Warranty. Grantor promises to defend against future developments that extend into the grantee's property boundary.
3. Covenant of Further Assurances. Grantor promises to do what is reasonably necessary to cure future problems with title.

Question 69

COMPETING CLAIMS TO TITLE AND THE RECORDING STATUTES

Answer 69

Under the common law, if a grantor transfers the same piece of property to multiple grantees, the first grantee to receive the deed acquires rightful title. In the absence of a recording statute, the common law rule controls.
However, there are three types of recording statues that have been adopted by the states to resolve competing claims to title:

1. Race Statutes. The first grantee to record acquires title, regardless of notice.
2. Notice Statutes. A subsequent purchaser acquires title if the purchase is made without notice of a prior unrecorded conveyance.
3. Race-Notice Statutes. A subsequent purchaser acquires title if the purchase is made without notice of a prior unrecorded conveyance and the subsequent purchaser records first.

Question 70

ACTUAL, CONSTRUCTIVE, AND INQUIRY NOTICE OF THE SUBSEQUENT PURCHASER

Answer 70

There are three types of notice:

1. Actual Notice. A subsequent purchaser has actual notice when he has personal knowledge of a prior interest.
2. Constructive Notice. A subsequent purchaser is on constructive notice when the prior interest is recorded (i.e., validly recording a deed by publicly registering it automatically puts the entire public on notice).
3. Inquiry Notice. A subsequent purchaser has inquiry notice when a reasonable investigation would have revealed the existence of prior claims (e.g., someone is clearly living on the property in question).

Question 71

WILD DEEDS

Answer 71

If a deed is not recorded properly, it is considered a wild deed. A wild deed does NOT put subsequent purchasers on constructive notice.

Question 72

THE SHELTER RULE

Answer 72

A person who is transferred property from a bona fide purchaser (BFP) has the same recording statute protections as the BFP (i.e., the transferee “takes shelter” in the status of the BFP transferor). A BFP is a person who pays valuable consideration (i.e., not an heir, devisee, or donee) for real property without notice of a prior interest.

Question 73

Constructive Eviction

Answer 73

A constructive eviction occurs if the:

1. Landlord caused the premises to be unsuitable for their intended purposes;
2. Tenant notified the landlord of the problem;
3. Landlord did not correct the problem; AND
4. Tenant vacates the premises after a reasonable amount of time passed.

Question 74

Duty to repair (residential premises)

Answer 74

Under the common law, there was no implied duty on the part of the
landlord to repair leased premises. However, the majority of
jurisdictions today enforce an implied duty upon the landlord to
repair under a residential lease, even when the lease attempts to place
the burden on the tenant, except for damages caused by the tenant.
Failure to make these repairs may constitute a constructive eviction
or violate the implied warranty of habitability

Question 75

Duty to repair (commercial premises)

Answer 75

In contrast, courts are reluctant to imply a landlord’s duty to repair in
commercial leases because the implied warranty of habitability does not apply in commercial leases. Therefore, absent some statutory or
contractual obligation, a landlord only has a duty to make a repair if
(i) the repair is so substantial that it would not ordinarily fall within
the tenant’s common law repair duty, or (ii) the value of the repair
would primarily inure to the landlord’s reversionary interest.

Question 76

4 UNITIES FOR CREATING JOINT TENANCY

Answer 76

To create a joint tenancy, the grantor must clearly express his intent to create a joint tenancy by using survivorship language (e.g., “as joint tenants with a right of survivorship”). Additionally, the “four unities” must be in place to create a joint tenancy:

1. Possession. Each joint tenant must have an equal right to posses and enjoy the whole property (also required for tenants in common).
2. Interest. Each joint tenant must have an equal share of the same type of interest (e.g., two joint tenants each have a 50% share in fee simple).
3. Time. Joint tenants must receive their property interests at the same time.
4. Title. Joint tenants must receive their property interest in the same instrument of title.