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
Does a restrictive covenant require notice?
Yes, requires notice.
- If in a subdivision, common development scheme notice (inquiry notice).
Easement appurtenant
Passes automatically with the dominant tenement
- Benefit cannot be conveyed apart from the dominant tenement (unless being transferred to owner of the servient tenement to extinguish the easement)
Easement by Implication
Exception to SOF. An easement is implied if, prior to the time the property is divided -
- A use exists on the “servient part” that is reasonably necessary for the enjoyment of the “dominant part”
- The use must be CONTINUOUS and APPARENT at the time the property is divided
- Reasonable necessity is determined by many factors, including the cost and difficulty of alternatives, and whether the price paid reflects the expected continued use - The parties intended the use to continue after division of the property
Easement by necessity
Typically arise when a parcel is DIVIDED and
- There was an existing USE prior to the severance or
- Severance deprives one lot of access to a PUBLIC ROAD or UTILITY line
Easement by reservation
Arises when a grantor conveys title to land but reserves the right to continue to use the land for a special purpose
- Grantor cannot reserve easement for someone ELSE, only for himself
- Attempt to reserve for anyone else is void
Equitable conversion doctrine
Once an enforceable CONTRACT of sale is signed, the buyer is the EQUITABLE owner of the property, bears risk of loss if property damaged or destroyed.
- Destroyed without the fault before closing, risk of loss is on the buyer (liable for contract price, no refund of earnest money)
- Only applicable as against the seller and the buyer, does not affect the right of some 3d part, e.g., w/r/t attaching property held in the name of a debtor.
- Can be modified by statute
- Insurance proceeds must be credited to buyer of destroyed property
Equitable right to redemption
The equity of redemption gives the borrower the right to free the land of the mortgage by paying off the amount due, plus any accrued interest, at any time prior to the foreclosure sale.
- If the borrower has defaulted on a mortgage with an acceleration clause, he must pay the full balance in order to redeem
- Cannot be waived in the agreement establishing the security interest (“clogging the equity of redemption)” but CAN be waived later for consideration
Estoppel by Deed
When a grantor purports to convey property that he does not own, his SUBSEQUENT ACQUISITION OF TITLE to that property vests in the GRANTEE
- Majority: PERSONAL estoppel; inures to the grantee’s benefit only as against the GRANTOR, not subsequent BFP.
- If the grantor transfers his after-acquired title to BFP, BFP gets good title.
- Majority: original grantee’s recordation of the deed does NOT impart record notice to BFP
Exceptions to the holdover doctrine
LL cannot bind tenant to new tenancy if -
- Tenant remains in possession for only a few hours / leaves a few articles of personal property
- Delay is not the tenant’s fault
- E.g., severe illness
Executory interest
Grant to third party; AUTOMATICALLY forfeits to someone OTHER than the grantor
- Subject to RAP; will it vest or not vest, e.g., will the 3d party take or not take within 21 years of some life in being?
Exemptions from FHA
Single-family home rented by an owner who owns no more than three single-family homes
Scope of express easement
In writing. Limited to the language of the grant, e.g., location, dimensions, special use/limits.
- A basic change in the nature of the use is not allowed.
- Absent specific limitations, assumed that the parties intend that the easement meet both present and future REASONABLE NEEDS of the dominant tenement.
- Should be recorded. If it is, the buyer/buyer’s heirs will win. If no notice, BFP.
Extinguishing an easement
- CONTRACTUAL release: must be in writing! SOF
- ESTOPPEL: requires
1. Some conduct or assertion by the owner of the easement - Holder demonstrates by a PHYSICAL that she intends to permanently abandon the easement, e.g., building physical structure over easement
- MERE NONUSE, without more, will not constitute a manifestation of an intent never to make use of the easement again
2. Reasonable reliance by the owner of the servient tenement
3. Change of position
Failed attempt to create an easement
Is a license!
- E.g., orally granting an easement for more than one year…
Fair Housing Act
The Fair Housing Act prohibits ADVERTISEMENTS that indicate any preference, limitation, or discrimination based on race, color, religion, sex, disability, familial status, or national origin
- Applies even when the DWELLING ITSELF is otherwise EXEMPT from the other provisions of the Act
Fee simple determinable
To A, “for so long as…”
+ POSSIBILITY OF REVERTER (automatically goes back)
- Durational language
“for so long as,” “while,” “during” “until”
Fee simple subject to condition subsequent
To A, “provided that” + RIGHT OF RE-ENTRY (requires files an action for ejectment)
- “upon condition that,” “provided that,” “but if,” “if it happens that”
- RAP does NOT apply to right of re-entry
Finding information in a tract index v. grantor-grantee
If there is no tract index, recording in a grantor-grantee index still provides constructive notice
Fixture
Chattel that has been annexed to real property is converted from personalty to realty. Passes with ownership of the land rather than with a transfer of the personal property of an estate.
- COMMERCIAL: trade fixtures doctrine; a commercial tenant can remove all trade fixtures prior to the expiration of a lease.
- RESIDENTIAL: intent of the annexor determines whether the chattel becomes a fixture
1. The relationship between the annexor and the premises - INTENT of the annexor (tenant) when they ATTACHED…stay or go
2. The DEGREE of annexation, i.e., how much DAMAGE would be caused to the real property if the chattel is removed - This is about PHYSICAL damage, not damages to the value of the interest
- More damage, more likely to be a fixture.
3. The NATURE and USE of the chattel (family heirloom v. toilet)
Fraudulent Conveyance
Even when a deed complies with all the formalities, it may be set aside by the grantor’s CREDITORS if it was made
- With actual intent to hinder, delay, or defraud any creditor
- Without receiving reasonably equivalent value, and the debtor was insolvent or became insolvent because of the transfer
Grants “for the purpose of,” “to be used for”
Merely expressions of motive
Holdover commercial tenant’s periodic tenancy
The new tenancy will be YEAR-to-YEAR if the original lease term was for one year or more. CANNOT EXCEED ONE YEAR due to SOF.
If a grant is void due to RAP, how will the courts proceed?
Courts will simply read the conveyance without the violating language.
“If” in deed
Ambiguous, could be FSSCS, FSD
- Avoid forfeiture of estates, presumption in favor of FSSCS
Is a covenant to maintain an easement still valid if the easement is abandoned?
Yes, it is a separate covenant
Is a Judgement Lienor a BFP?
A majority of courts hold that a judgment lienor is not protected by a recording statute.
- Not a BFP because he did not pay contemporaneous value for the judgment
- Judgment attaches only to property “owned” by the debtor, and not to property previously conveyed away, even if that conveyance was not recorded
- Paid out last in the event of a foreclosure
Joint Tenancy
A concurrent estate in land in which each co-tenant has an UNDIVIDED right in the property and a right of SURVIVORSHIP
- There must be an EXPRESS creation of such tenancy
- On the bar “Joint Tenants” (don’t need to say right of survivorship)
- There is a presumption of tenancy in common unless the conveyance is to a husband and wife in a state that recognizes tenancy by the entirety
- Creation requires four unities
1. TIME (interests must vest at the same time)
2. TITLE (interests must be acquired by the same instrument)
3. INTEREST (interests must be of the same type and duration)
4. POSSESSION (interests must give identical rights to enjoyment)
Terminated (and converted into TIC by)
- Conveyance by one JT
- Murder by JT of the other
- Simultaneous Deaths
- Partition (voluntary / involuntary)
Length of easements
Easements are of perpetual duration, unless limited by the terms of a writing.
Liability after sublease v. assignment
After an assignment, the original tenant is still liable for the contractual obligations with the landlord (privity of contract).
- The ASSIGNEE stands in the shoes of the original tenant in a direct relationship with the landlord
- Each is liable to the other on all covenants in the lease that RUN WITH THE LAND - Original tenant and assignee are JOINTLY AND SEVERABLY LIABLE for rent
A SUBLESEE is not personally liable to the landlord for rent or for the performance of any other covenants made by the original lessee in the main lease (unless the covenants are EXPRESSLY assumed)
- The sublessee does not hold the tenant’s full estate (no privity of estate).
License
Mere permission to enter the land of another
- IRREVOCABLE license: requires the holder to have a PRIVILEGE, in reliance on which she has invested substantial MONEYS or LABOR
Lien Theory v. Title Theory
Majority: mortgage = lien on title; mortgage of the property by one joint tenant does not, by itself, sever a joint tenancy until default and foreclosure proceedings have been completed.
Title theory: mortgage = transfer of title to the property, rather than mere lien; mortgage by a joint tenant transfers the legal title of the joint tenant to the mortgagee (the money lender).
Life estate
“For life” + REMAINDER
Liquidated Damages
When a sales contract provides that a seller may retain the buyer’s EARNEST MONEY as LIQUIDATED DAMAGES, courts routinely uphold the seller’s RETENTION of the money upon breach if the amount appears REASONABLE in light of the seller’s anticipated and actual damages.
- Generally, up to 10% of the sales price without inquiry into reasonableness
- Actual damages are irrelevant
LL’s Options for Holdover Tenant
When a tenant fails to vacate the premises, the landlord may 1) evict or 2) bind the tenant to a new periodic tenancy.
-The terms and conditions of the expired tenancy apply to the new tenancy.
Merger
In a land sale, the CONTRACT MERGES into the DEED, and the terms of the contract are meaningless.
- Regardless of what the contract says, it is the deed that controls.
- Covenants from the contract do not carry over to the deed, e.g., implied covenant of marketability
Conflicting descriptions of land in deed
PHYSICAL description takes precedent over the QUANTITY
Notice in foreclosure proceedings
If proper notice to junior encumbrancers is not given, their interest stays on the property
Obligations of the parties after a land sale contract has been executed
Once there is a land sale agreement, the rights of the parties are set in stone.
- If buyer dies, estate can demand specific performance
- If seller dies, seller’s estate can demand that buyer specifically perform
Ouster
- If one co-tenant wrongfully ousts another co-tenant from possession of the whole or any part of the premises, the ousted co-tenant is entitled to receive her SHARE of the FAIR RENTAL VALUE of the property for the time she was wrongfully deprived of possession
- Share of rents/profits determined by share of ownership of the property
Periodic Tenancy
Tenancy for some fixed period that continues for succeeding periods, until either party gives notice of termination
- Notice must be given at least equal to the length of time of the period (unless year-to-year, then either 6 months or 1 month)
Prescriptive easement
Analogous to acquiring property by adverse possession; however, the use NEED NOT BE EXCLUSIVE.
- Continuous
- Open and Notorious
- Adverse
- Hostile
Profit
Non-possessory interest in land that allows the profit-holder to enter onto the servient tenement to remove MINERAL, SOIL, TIMBER, ANIMALS, SUBSTANCE
- It has a value apart from the land itself and is ALIENABLE
- Profit appurtenant CANNOT be transferred independent of the dominant estate
- Profit in gross CAN be transferred independent of dominant estate
- Terminated: abandonment, misuse, etc.
Exclusive: when an owner grants the sole right to take a resource from her land, the grantee takes an exclusive profit and is solely entitled to the resources, even to the exclusion of the owner of the servient estate.
Nonexclusive: the owner of the servient estate may grant similar rights to others or take the resources herself.
* Either way, it is interest in property for which the company is entitled to compensation in any condemnation proceeding.
Purchase money mortgage
A PMM is a mortgage typically given to a third-party lender, who is lending the funds to allow the buyer to PURCHASE the property.
- A PMM, whether recorded or not, has PRIORITY over PRIOR mortgages, liens, and other claims against the mortgagor.
- Priority is subject to being defeated by SUBSEQUENT mortgages or liens by operation of the recording acts.
RAP
An interest must vest, if at all, not later than 21 years after the lives in being
- At the DEATH of the life in being, will the interest vest/not vest within 21 years? E.g., life in being have children at the time of his death? A wife? Named beneficiaries? A next taker in line? Does his death impact the existence of the next taker?
- Vest ≠ come into possession within the perpetuities period; the only requirement is that their interests vest within the period.
Recording a lien
In most states you have to file or record a lien for it to be enforceable. Not the same thing as recording for statute.
Remainder
A remainder is a FUTURE interest created in a transferee that is capable of taking in POSSESSION on the NATURAL termination of the preceding estate created in the same disposition.
- Remainders always follow LIFE ESTATES.
- Four kinds of remainders
1. Contingent
2. Vested
3. Subject to open
4. Subject to total divestment
Remainder Subject to Open
Remainder created in a class of persons that is CERTAIN to take but is subject to DIMINUTION by reason of others becoming entitled to take (joining the class of persons)
Remainder Subject to total divestment
Possession is subject to being DEFEATED by the happening of a condition SUBSEQUENT
Remedy for improper use of an easement
If a court were to find that there is an unreasonably excessive use of the easement, the proper remedy would be to enter an ORDER conforming use of the easement to a proper scope
- Does not extinguish the easement
Remedy for overuse / misuse of an easement
Does not terminate the easement
- Injunction against the misuse
Requirements for a valid deed
- Writing
- Signed by GRANTOR
- Signature cannot be forged
- If joint owner attempts to forge signatures of other owners, valid as to his signature, but void as to the others. Operates as a severance. - UNAMBIGUOUS DESCRIPTION of the land (conveyance may fail for lack of definiteness)
- Absolutely cannot be left blank - ID of the PARTIES by name/description
- If space for grantee is BLANK, courts will presume that the person taking delivery is authorized to fill in the name of the grantee - Words of INTENT to transfer (e.g., grant)
- DELIVERY & ACCEPTANCE by grantee to complete conveyance
- Transfer can be delayed in the deed (i.e., transfers at the time of my death), “only if the grantee survives the grantor” indicates that the grantor does not intend to part with anything until death
Requirements for valid land sale contract
For the purpose of SOF, need essential terms of the contract, i.e.,
- DESCRIPTION of the property
- ID of the parties to the contract
- PRICE
- SIGNATURE of the party to be charged
Residential holdover tenant
Periodic MONTH TO MONTH tenancy
Restraints on alienation
Generally, any restriction on the transferability of a legal interest is void
- Does not apply to equitable interests, e.g., spendthrift clauses
Right of First Refusal
Options to purchase land
- Not a restraint on alienation, just giving someone the option to buy it first
- RAP: Options and rights of first refusal are not subject to the Rule Against Perpetuities when connected to leaseholds, held by ascertainable people. However, will be subject to RAP, e.g., if held by unascertainable people.
- Most courts do not bar an option from being separated from the leasehold interest if that is the parties’ intent. The tenant may transfer the leasehold interest while retaining the option to purchase, or vice versa.
Rights of easement holder
Right to USE the servient tenement for a SPECIAL PURPOSE (e.g., laying utility lines, or for ingress and egress) but no right to possess and enjoy the land.
Rights of life tenant
A life tenant is entitled to all ORDINARY uses and profits of the land, but he cannot lawfully do any act that would INJURE the INTERESTS of the REMAINDERMAN.
- Life tenant cannot mortgage the land without consent of remainderman
- To protect his interests, remainderman may make MORTGAGE payments; will be entitled to reimbursement of those payments
- Life tenant is obligated to preserve the land and structures in a reasonable state of repair
Rights to redemption
- Statutory
- Equitable
Seller’s disclosure of property defects
Usually, if the buyer has time to inspect the property before tendering the purchase price, the seller has NO duty to disclose defects.
- If the seller is DELIBERATELY concealing defects,
may be liable. Had the buyer known, would have refused to buy/demanded they be fixed.
Selling interest in a joint tenancy
When you sell, JT is terminated, results in TENANCY IN COMMON
- Selling does NOT require the knowledge/consent of other party
- Acceptance usually “relates back” to the date of delivery of the deed in escrow, but ACCEPTANCE of the deed AFTER the grantor’s DEATH does not relate back to defeat the right of survivorship for remaining joint tenant
Shifting executory interest
Cuts short a prior estate created by the SAME conveyance.
Someone dies during escrow
- The PURCHASER’s interest is REAL property
- The SELLER’s interest (the right to PROCEEDS) is personal property
Statutory Right of Redemption
Right to repurchase home AFTER foreclosure sale within statutorily specified time.
- Pay foreclosure sale price
- Full amount owed to lender + fees
- NOT just the borrower; JUNIOR encumbrances have equitable right to redemption!
- Recognized in about half the states
Surface water
A landowner can capture as much surface water as he wishes
- Can be diverted to any purpose on or off the land
- No cause of action unless diversion was malicious
Tenancy at Sufferance
Tenant wrongfully holds over after termination of the tenancy
- Terminates when LL evicts or decides to hold them for another term
Tenancy at Will
Tenancy of no stated duration that lasts as long as both parties desire
- Terminates after one party displays an intention that the tenancy should come to an end, or by operation of law (e.g., death of party, attempt to transfer interest)
Tenancy by the Entirety
Each SPOUSE has an undivided interest in the whole and a right of survivorship.
“To A and B” (when A and B are married)
- Some states presume JT to spouses as TBE
Terminated by
- Death
- Divorce
- Mutual agreement
- Execution by a joint creditor
* CANNOT be terminated by voluntary partition!
Tenancy for Years
Fixed, determined period of time
- Look for termination date
Terminates: at the end of the stated period, without either party giving notice
Tenancy in common
Each tenant has a distinct, proportionate, undivided interest in the property
- No right of survivorship
- The only “unity” involved is possession; each tenant is entitled to possession of the whole estate.
- Freely alienable by inter vivos and testamentary transfer, is inheritable
- Subject to claims of the tenant’s creditors.
“Time is of the essence”
Time will be considered of the essence only if (any of)
- The CONTRACT so states
- The CIRCUMSTANCES indicate it was the parties’ intention
- Rapidly fluctuating prices
- Need for the money to close another critical transaction - One party gives the other NOTICE that he desires to make time of the essence
Time of performance of covenants in a contract for the sale of land - Installment Contract
The seller’s obligation is to furnish marketable title occurs when the buyer has made his FINAL PAYMENT
- Buyer CANNOT withhold payments or seek other remedies on grounds that the seller’s title is unmarketable prior to the date of promised delivery
Time of performance of covenants in a contract for the sale of land
Absent a provision to the contrary, a contract for the sale of land contains an implied promise by the seller that she will deliver to the buyer a marketable title at the time of CLOSING.
- CLOSING DATE stated in the contract is NOT ABSOLUTELY BINDING in equity; must perform within reasonable time (one to two months is usually considered reasonable)
- If the buyer determines, PRIOR to closing, that the seller’s title is unmarketable, he must NOTIFY the seller and allow a REASONABLE TIME to cure the defect.
- If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can RESCIND, sue for DAMAGES caused by the breach, or obtain SPECIFIC PERFORMANCE with an abatement of the purchase price.
- Cannot rescind prior to closing on grounds that the seller’s title is unmarketable.
Title insurance policy
A title insurance policy insures that a good record title of the property exists as of the policy’s date and agrees to defend the record title if litigated.
- Title insurance can be taken out by either the owner of the property or the mortgage lender.
- An OWNER’s policy protects only the person who owns the policy (usually either the property owner or the mortgage lender) and does not run with the land to subsequent purchasers
- A LENDER’s policy follows any assignment of the mortgage loan
- The policy ENDS when the mortgage loan is PAID OFF
To which interests does RAP not apply?
Grantor’s interests -
- Reversions
- Possibilities of reverter
- Rights of entry
- Options to purchase held by the CURRENT lessee
Types of Tenancies
- Joint tenancy
- Tenancy by the entirety
- Tenancy in Common
Valid delivery
To be valid, a deed must be “delivered,” which means that the grantor must have taken SOME ACTION (not necessarily a manual handing over of the deed) with the INTENT that it operate to pass title immediately
- RECORDING a deed that has been acknowledged before a NOTARY is such an action and is presumed to carry with it the requisite intent, and even without knowledge of grantee
- If the grantor INTENDS the recording of the document to be the final act in vesting title in the grantee, then such recording constitutes delivery
- Lack of PHYSICAL delivery raises a rebuttable presumption of no delivery
Validity of zoning ordinances
Generally invalid if they have no reasonable relation to public welfare, are too restrictive, are discriminatory as to a particular parcel, are beyond the grant of authority, violate due process, or are racially discriminatory
Void v. Voidable Deed
VOIDABLE: defective deed will be set aside only if the property is NOT conveyed to a BFP
- Duress (pressure that is brought by an individual or entity in order to procure the deed)
- Undue influence
- Mistake
- Minor
- Lacking capacity
- Fraud in the inducement
- Breach of fiduciary duty
VOID: deed would be set aside regardless of the property having passed to a BFP.
- Forged (cannot be cured by ratification)
- Never delivered
- Obtained by fraud in the factum
- Dead or non-existent grantee
Waste
- Voluntary
- Permissive
- Ameliorative waste: the use of the property is substantially changed but the change increases the value of the property
What can junior lien-holder do before foreclosure sale takes place?
- May pay off the senior mortgage to preserve its own interest in the land, take over as senior mortgagee. Companies loathe foreclosures.
When might a right of first refusal violate RAP?
If they are not personal to the holder, i.e., extended to holder’s heirs and assigns
“Wild” document
A mortgage/deed is “wild” and therefore unrecorded if the preceding conveyance was unrecorded.
- Would a searcher in the public records be able to find the deed / mortgage?
Zoning variance v. restrictive covenant
Both must be complied with, and neither provides any excuse for violating the other
- Thus, a variance from the government regulation does not prevent enforcement of the private covenant
- The only time a zoning regulation might prevent enforcement of such a covenant is where enforcement would result in a zoning violation
