Real Property Flashcards
Adverse Possession
Possession for a specified statutory period in the requisite manner will establish the possessor’s title to the land. For possession to ripen into title, it must be -
- Actual and exclusive
- Not sharing possession with the true owner or the general public - Open and notorious
- Such USE as the usual owner would make of the land and sufficient to put the true owner or the community on NOTICE of the fact of possession - Adverse/Hostile, i.e., without the true owner’s PERMISSION
- Continuous for the statutory period
- Possession that the average owner would make of the property under the circumstances, e.g., if it’s a summer house, than every summer
Adverse possession and future interests
The event or condition giving right to the grantor’s right of entry does not trigger the SOL
- Does not begin to run until the right is ASSERTED by grantor
** Adverse possession by two or more people
Two or more people can work together to take title by adverse possession, and if they meet the requirements, they take as tenants in common.
Adverse possession of a parcel that is clearly divided up
Trespasser can only obtain title to that portion of the land that he actually possessed, unless he enters under a color of title, which could have given him title to all of the land even though he actually possessed only a part of it
Assuming a mortgage
Must be an EXPRESS ASSUMPTION, not merely “subject to.” Lender is considered a third-party beneficiary of the agreement, and hence may recover from the assuming GRANTEE, who is PRIMARILY liable, or the ORIGINAL mortgagor, who is SECONDARILY liable.
- Surety
- Taking subject to: grantee is not personally liable on the loan; original mortgagor remains personally liable
- Once a grantee has assumed a mortgage, any modification between the grantee and mortgagee discharges the original mortgagor of all liability
BFP
Someone who who takes for VALUE and without NOTICE
Covenants that run with the land
- Covenants to pay money run
- Covenants to perform physical acts on the property
** Delivery of a deed
A deed is not effective to transfer an interest in realty unless it has been delivered. Delivery refers to the grantor’s intent. There must be words or conduct showing the grantor intended that the deed have some present operative effect, that title pass immediately and irrevocably, even though the right of possession may be postponed.
- If the right of possession is to be postponed until the grantor’s death, the deed may be held “testamentary” and therefore VOID (unless executed with testamentary formalities)
- Most courts hold that if the grantor executes a deed and gives it to another with instructions to give it to the grantee upon the grantor’s death, the grantor’s intent was to presently convey a future interest to the grantee (either a remainder, with a life estate reserved in the grantor, or an executory interest), and so the gift is inter vivos, not testamentary.
Easement by necessity
Where the owner of a tract of land SELLS a part of the tract and by this division deprives one parcel of access to a PUBLIC ROAD or UTlLITY LINE, a right-of-way by absolute necessity is created by implied grant over the parcel with access to the public road.
** This is true regardless of whether the landlocked owner could obtain a right-of-way from another neighbor
** The owner of the SERVIENT parcel has the right to LOCATE the easement, provided the location is reasonably convenient
** Enforcement of a restrictive covenant
A restrictive covenant can be enforced at LAW for damages (as a real covenant running with the land) or in EQUITY for an injunction (equitable servitude). The requirements are different for each!
An enforceable equitable servitude requires that the covenanting parties intended the servitude to be enforceable against successors in interest, the successor in interest must have notice of the covenant, and the covenant must touch and concern the land. Here, the original parties clearly intended their successors to be bound because they stated in the agreement that it was enforceable by and against all assignees, heirs, and successors. The agreement was recorded. Thus, all successors would have constructive (record) notice of the covenant. For the benefit of a covenant to touch and concern the land, the promised performance must benefit the covenantee and their successors in their use and enjoyment of the benefited land. Here, the performance (not building a shed) benefited the man and his successors in their use and enjoyment of the land because they could enjoy their property without viewing sheds they consider unsightly. All requirements for an equitable servitude are met, and the main has a right to enjoin the neighbor’s daughter. (A) is incorrect because the question concerns enforcing an agreement between two parties; it does not involve a common development scheme. Thus, what the other neighbors do is irrelevant. (B) is incorrect. Horizontal privity is required for a burden of a real covenant to run at law to successors in interest. It would have been required had the man been seeking damages rather than an injunction. Horizontal privity requires that the original covenanting parties share some interest in the land independent of the covenant (e.g., grantor-grantee). Here, the parties to the agreement were merely neighbors and had no legal relationship; thus there was no horizontal privity. As noted above, the man may still enforce the agreement as an equitable servitude. (C) is incorrect. The fact that the daughter took the property as a gift prevents her from being a bona fide purchaser for value (“BFP”). A BFP takes free of a restrictive covenant if they had no notice of it. Here, the daughter is not a purchaser and she had record notice of the covenant. Thus, she would take subject to the restriction if it were enforceable against her. So the question is whether the restriction is enforceable against the neighbor’s successor in interest. The answer is yes. QUESTION ID: PNCBE020
Equitable servitude
An equitable servitude is a COVENANT that, regardless of whether it runs with the land at law, equity will enforce against the successors of the burdened land unless the successor is a BFP.
- Both the BENEFIT and BURDEN of the servitude must run with the land.
For the BURDEN to run
- The covenanting parties must have INTEND that the servitude be enforceable by and against assignees
- Common scheme - Covenant must touch and concern the land
- The party to be bound must have had actual, constructive, or inquiry NOTICE
For the BENEFIT to run
- Intended by the original parties
- Covenant must touch and concern the land
* Privity is not required
Equitable servitude v. Real Covenant
*** DEPENDS ON REMEDY SOUGHT
Money = real covenant
Injunction = equitable servitude
Real covenants require vertical and horizontal privity of estate to run
No privity of estate is required for an equitable servitude to run
What are the covenants of title in a general warranty deed?
“See Every Claim Quiet For Good”
A general warranty deed gives the grantee six covenants of title.
PRESENT COVENANTS: Majority, do not run with land; breached at time of CLOSING/CONVEYANCE. Can only be enforced by BUYER. Minority, a remote grantee can sue on the covenant against encumbrances unless the grantee had notice of the encumbrance.
1. seisin (grantor owns land)
2. conveyance (grantor lacks title, i.e., ownership of the estate conveyed, at the time of the grant)
3. against encumbrances (no servitudes/liens on land)
- Neither visible nor invisible
FUTURE COVENANTS: run with the land; can be enforced by BUYER and SUBSEQUENT occupiers of land.
4. quiet enjoyment (not disturbed in possession; grantee is evicted by a third party with PARAMOUNT title, i.e., title or ownership of the estate conveyed that is superior to the grantor’s title)
5. further assurances (perform whatever acts necessary to perfect title)
6. general warranty (defend title against lawful claims)
Implied Covenant of Quiet Enjoyment
A tenant has a right to quiet use and enjoyment of the premises without interference from the LL or a paramount title holder.
- Actual eviction: terminates obligation to pay rent
- Partial eviction: physically excluded from part of the premises. Relieves obligation to pay rent for the entire premises.
- Constructive eviction: LL’s breach of duty renders premises unsuitable for occupancy. May terminate lease and seek damages.
1. Substantial interference
2. Notice
3. Tenant vacates
Implied covenants in land sale contracts
Seller will 1) provide marketable title and 2) will not make false statements of material fact.
Implied Warranty of Fitness/Quality
Only applies when BUILDER of the home is also the SELLER of the NEW home.
Implied Warranty of Habitability
** RESIDENTIAL, Non-waivable
Premises must be fit for basic human habitation. Bare living requirements.
- Need not vacate!
In a deed that warrantees against encumbrances, can there nonetheless be one at closing?
Yes. In a contract for the sale of real property, the seller of the land is entitled to use the PROCEEDS of the sale to CLEAR title if she can ensure that the purchaser will be PROTECTED
Marketable title
Marketable title is title reasonably free from doubt, i.e., title that a reasonably prudent buyer would be willing to accept.
- Need not be a “perfect” title, but must be free from unreasonable risk of litigation over the TITLE to the land (not all litigation!)
- The buyer is not required to “buy a lawsuit,” even if his ultimate success on the merits of such a suit seems likely!
- A title acquired by adverse possession is not considered marketable because the purchaser might be later forced to defend adverse possession in court
- Must file suit to quiet title before you sell. If you win, the judge will stamp your deed, marketable title
- Easement that reduces the value of the property usually unmarketable
- Must argue at CLOSING, not later!
Negative Equitable Servitude
When a developer subdivides land into several parcels and some of the deeds contain negative covenants but some do not, negative equitable servitudes binding all the parcels in the subdivision may be implied if
- There exists a common scheme for development
- The grantee has notice of the covenant
- Actual notice (direct knowledge of the covenants in the prior deeds)
- Inquiry notice (the neighborhood appears to conform to common restrictions)
- Record notice (if the prior deeds are in the grantee’s chain of title he will, under the recording acts, have constructive notice of their contents)
** Non-conforming use
A cumulative zoning ordinance creates a hierarchy of uses of land, and land that is zoned for a particular use may be used for the stated purpose or for any higher use.
- A residential use is higher than a nonresidential use.
- Here, the building was in an area originally zoned for nonresidential use. The daughter and her parents used the property for a business and their residence. This was appropriate under the cumulative zoning ordinance as the family’s uses met or exceeded the zoned use. Later, the area was rezoned for single-family residential use, which is a higher use than the shoe store. However, a use that exists at the time of passage of a zoning ordinance and that does not conform cannot be eliminated at once.
- Generally, the nonconforming use may continue indefinitely, but any change in the use must comply with the zoning ordinance. Because the shoe store existed at the time of the rezoning, the daughter may continue to operate the shoe store as a nonconforming use.
Notice jurisdiction
Last BFP or mortgagee for value wins.
- Don’t record…lose!
- A subsequent bona fide purchaser prevails over a prior grantee who fails to record
- Did the subsequent purchaser have actual or constructive notice at the time of the CONVEYANCE?…Not at the time of recording
Quitclaim deed
No covenants
- Has no impact on covenants in contract
Race jurisdiction
Requires the word FIRST. First to record wins.
Race-notice jurisdiction
FIRST to record + Without NOTICE
- Who recorded first without notice? Winner
- A subsequent BFP is protected only if she records before the prior grantee
- Notice is measured at the time of the CONVEYANCE, not at the time of recording
- Policy: induces BFPs to record promptly
Requirements for a benefit to run from a restrictive covenant
* Unlike burden, does not not require horizontal privity
- Writing
- Intent
- Touch and concern
- Vertical privity
Seasonal adverse possession
Okay
** Shelter Doctrine
A person who takes from a BFP will prevail against any interest that the transferor-BFP would have prevailed against.
- If you take from a BFP, you step into their shoes!
EVEN IF THEY HAVE ACTUAL KNOWLEDGE!
Special warranty deed
Warrants only against anything that occurred during their PHYSICAL OWNERSHIP.
- Doesn’t guarantee against any defects in clear title that existed before they took possession of the property
Tolling adverse possession
At beginning of period, true owner is underage, incompetent, incarcerated
Vested remainder
Beneficiaries are ASCERTAINABLE and their taking in possession is NOT subject to a CONDITION PRECEDENT
- Freely DEVISABLE/alienable
** Warranties of quality and fitness in a deed
(A) is correct. Although the common law held that contracts of sale and deeds of real property carry no implied warranties of quality or fitness for the purpose intended, most courts now find an implied warranty of fitness or quality extends to the sale of any new house by the builder. The warranty implied is that the new house is designed and constructed in a reasonably workmanlike manner and suitable for human habitation. Some courts go further and extend the warranty to a subsequent purchaser. Here, there was a defect in the design or construction of the house by the builder, and the most likely reason the woman would succeed here is that the court recognizes that the builder’s warranty of fitness or quality applies to her, a subsequent purchaser. (B) is incorrect. Whether the woman got the benefit of her bargain in her contract with the buyer would have no impact on whether she could recover from the builder. The woman’s contract was with the buyer, not the builder. The only way the buyer, who was not in privity with the builder, could recover from him would be if the implied warranty given to the buyer is extended to the woman. (C) is incorrect. The builder’s statement to “get it fixed” does not clearly indicate that he would pay for the repairs. It could just as easily be seen as a statement that it was her problem and her responsibility. (D) is incorrect. The covenant for further assurances in a warranty deed is a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect. The defect in the foundation did not make title imperfect; title to the property was good. The covenant for further assurances does not apply.
What if there is no recording statute?
Priority is given to the grantee who was FIRST IN TIME
When can a life tenant alter buildings?
A life tenant can SUBSTANTIALLY ALTER or even demolish existing BUILDINGS if
1. The market value of the future interests is not diminished AND
1A. Remainderman does not OBJECT, or
1B. A SUBSTANTIAL and PERMANENT change in the NEIGHBORHOOD conditions has deprived the property in its current form of reasonable productivity or usefulness.
When does a covenant run with the land?
A covenant runs with the land to a subsequent purchaser with NOTICE of the covenant if it 1) touches and concerns the land and 2) is intended to run (e.g., by use of the language like “grantee, his heirs and assigns”)
When will partial possession of a tract allow possession of the whole tract?
Constructive possession of PART of a tract of land is sufficient to obtain title to the WHOLE only if there is REASONABLE proportion between the part actually possessed and the whole of the tract.
- E.g., landscaping that crosses over a few feet into the vacant lot is not likely to rise to the level of possession of the whole
When will the successor in interest to a burdened estate be bound by a restrictive covenant?
To be bound -
- The parties must have INTENDED that the covenant run with the land
- The ORIGINAL parties must have been in HORIZONTAL privity (at the time the promisor entered into the covenant with the promisee, the two shared some interest in the land independent of the covenant, e.g., grantor-grantee)
- SUCCEEDING party must be in VERTICAL privity with the original promisor (successor in interest to the covenanting party holds the entire interest that was held by the covenantor at the time she made the covenant)
- The covenant must TOUCH AND CONCERN the land
- Burdened party must have actual or constructive NOTICE of the covenant (if BFP)
Amount of rent for holdover tenant
If PRIOR to the lease expiring the tenant received notification of the rent increase, the tenant pays the NEW amount.
- If NOT notified, continue paying what they have always paid.
Are life estates alienable?
Life estates generally are ALIENABLE. The transferee merely takes the same interest as the life tenant and anyone taking the interest would have only a life estate PUR AUTRE VIE.
Benefits and uses of an easement compared to a other interests
An easement would allow the grantee to use the land only for the PURPOSES provided for in the easement, and the grantor could limit the purposes to whatever he wants
- A lease grants the lessee the exclusive right to possess the premises, and broad rights to use them in any manner, unless specifically restricted.
- Covenants usually are made in conjunction with a lease, deed, or other instrument; they promise some act or forbearance with respect to property and are generally not used to grant rights for access to property
Can a recording be the final step in vesting title in a grantee?
If the GRANTOR INTENDS the recording of the deed to be the final act in vesting title in the grantee, then such recording creates a presumption of delivery even where the grantee did not know of the recordation.
Can creditors reach future interests?
Any future interest that is transferrable is subject to involuntary transfer, i.e., reachable by creditors
Charitable exception to RAP
Has to go from CHARITY to CHARITY
Condition subsequent v. condition precedent
- Condition subsequent –> vested remainder subject to total divestment
- Condition precedent –> contingent remainder
Where language is ambiguous, preference is vested remainder subject to divestment rather than contingent remainders or executory interests
Constructive annexation
An article of PERSONAL PROPERTY (an “ACCESSION”) becomes an INTEGRAL part of the property, even though it is NOT PHYSICALLY ANNEXED to the property
- Analogous to a fixture becomes an integral part of the realty
- Was the accession created as an integral part of the realty? Significantly contribute to an important aspect of the realty?
Contigent remainder
Taking is -
- Subject to a CONDITION PRECEDENT
- Created in favor of unborn/ UNASCERTAINED persons
Conveyance that contains both durational language and power of termination
Likely be construed as FSSCS, because the forfeiture is optional rather than automatic
- Policy disfavors forfeiture estates
Conveying interest in joint tenancy via will
A will is inoperative as to joint tenancy property because the decedent’s rights in the property evaporate at the instant of death
- A will is AMBULATORY (effective only at death)..
- If the the testator executed her will while the property was still held in joint tenancy, but then it becomes a tenancy in common before her death, will pass as a tenancy in common
Terminated by: partition
Course of dealing for land sale contracts
Generally NOT APPLICABLE!
- “Course of dealing” (i.e., a sequence of previous conduct between the parties that may be regarded as establishing a common basis of their understanding) may be used to explain or supplement the terms of a written contract under the UCC
- If there is a WRITTEN agreement, the terms may be explained or supplemented by showing a course of dealing between the developer and the investor
Covenants to convey
E.g., option to purchase
- A covenant to convey touches and concerns both the leasehold and reversion, and therefore RUNS with those respective interests in the land
…unless it’s shown to be a PERSONAL covenant
Cross-easement
If common easement owners agree to be MUTUALLY responsible, the burdens and benefits of these covenants will run to successive owners of each parcel
- Each promise touches and concerns the adjoining parcel
Deed given for security purposes
If a deed is given for security purposes rather than as an outright transfer of the property, it will be treated as an “equitable” mortgage and the creditor will be required to foreclose it by judicial action like any other mortgage.
- In determining whether an absolute deed is really a mortgage, the court considers the following factors:
1. The existence of a debt or promise of payment by the deed’s grantor
2. The grantee’s promise to return the land if the debt is paid
3. The fact that the amount advanced to the grantor/debtor was much lower than the value of the property
4. The degree of the grantor’s financial distress
5. The parties’ prior negotiations
Destruction of Deed
The destruction of the a deed has no effect if it has already been delivered
- To “un-do” the deed, would have to reconvey by new deed back
Do future interests pass at death?
I.e., by will or inheritance; yes, unless subject to an express or implied contingency of survival
- E.g., “to my SURVIVING children”
Doctrine of Part Performance
State the general rule first and then discuss…Exception to SOF for land sales; may be used to enforce an otherwise invalid ORAL LAND SALE agreement, provided that the acts of part performance UNEQUIVOCALLY prove the existence of the contract / OWNERSHIP
- E.g., paying same rent, making cosmetic changes that a tenant would. Indicates rent…NOT OWN!
- Generally requires TWO of the following
1. Possession
2. Improvements
3. Full or partial payment of the purchase price - A few states will grant specific performance of a contract despite the absence of a writing if there has been payment of the purchase price
