Real Property

Question 1

What are the three common types of recording acts?

Answer 1

1) Notice: A purchaser for value without notice of prior interest prevails.
2) Race: A purchaser for value who records first prevails.
3) Race-notice: A purchaser for value without notice and records first prevails.

Question 2

Why is the following grant a fee simple absolute rather than a fee simple determinable?: Grantor conveys Blackacre “to B to be used for a horse farm.” B does not use Blackacre as a horse farm.

Answer 2

Grantor’s language merely indicates his desire, intent, or purpose for which the property should be used rather than imposing a condition that could limit the duration of the estate.

Question 3

What is a major difference between a vested remainder subject to open and a contingent remainder?

Answer 3

A vested remainder subject to open is transferred to a group rather than individual, and at least one member of the group is individually ascertainable and entitled to the remainder interest.

A contingent remainder is created in a grantee who is unascertainable.

Question 4

What kind of tenants have the right to unilaterally partition a piece of property?

Answer 4

A tenant in common or a joint tenant may unilaterally partition property.

(NOTE: A tenant by the entirety does not have this right.)

Question 5

What two possible components denote a contingent remainder?

Answer 5

The remainder is created in an unascertainable grantee,

OR

if it is subject to a condition precedent to the grantee’s taking.

Question 6

After a mortgaged property is sold at a foreclosure sale, in what order are the proceeds distributed to different stakeholders? (Identify at least four.)

Answer 6

1. Proceeds are used to pay any costs related to the sale.
2. The party who foreclosed on the property is paid, up to the amount outstanding on its mortgage interest.
3. If any money remains, any junior interests are paid in order of their priority.
4. If any money remains, the mortgagor is paid.

Question 7

Regarding the effect of a mortgage on a joint tenancy, what is the difference between a title theory jurisdiction and a lien theory jurisdiction, and which is the majority rule?

Answer 7

Lien theory states (the majority): no severance- the mortgage is only a lien on the property

Title theory states (the minority): severance- the joint tenancy is converted into a tenancy in common with respect to the mortgaging tenant

Question 8

What does it mean if a remainder is subject to a condition precedent?

Answer 8

The condition must first be met or satisfied for a remainderman to ever take possession.

Example: Carlos conveys his bakery ““to A for life, then to B if B eats cake every day for one year.”” B’s remainder is contingent because she must eat cake every day for one year before she can take possession.

Question 9

What are three corresponding future interests to these three defeasible fees:

1. fee simple determinable
2. fee simple subject to a condition subsequent
3. fee simple subject to an executory condition

Answer 9

1. Fee simple determinable: possibility of reverter (if holder is grantor) or executory interest (if holder is third party).
2. Fee simple subject to a condition subsequent: right of entry/right of reentry/power of termination (holder is grantor and must exercise right to terminate)
3. Fee simple subject to an executory condition: executory interest (holder is third party).

Question 10

What are two major exceptions to a tenant’s duty to pay rent?

Answer 10

1. Destruction of the premises not due to tenant’s fault, or
2. Material breach of the lease by the landlord (e.g., breach of the covenant of quiet enjoyment or the implied warranty of habitability)

Question 11

What are the two types of executory interests? How is each defined?

Answer 11

1. Shifting executory interest: divests the interest of the grantee by cutting short a prior estate created in the same conveyance. The estate “shifts” from one grantee to another on the happening of the condition.
2. Springing executory interest: divests the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor.

Question 12

A sublessee is not liable to the landlord for rent or any other covenants in the lease unless what happens?

Answer 12

If the sublessee expressly assumes the rent covenant (or any other covenants), then the sublessee becomes personally liable to the landlord.

Question 13

A tenant is considered a holdover tenant when he continues to occupy the premises without the landlord’s consent and after the expiration of the lease. What two remedies does a landlord have?

Answer 13

The landlord may evict, or the landlord may bind the holdover tenant to a new periodic tenancy.

Question 14

A conveyance by will by a joint tenant of his property interest has what effect?

Answer 14

NONE.

The property passes automatically to the remaining joint tenant(s) due to the right of survivorship.

Question 15

What is a mortgage?

Answer 15

A mortgage is a security device used to secure payment of a debt.

Question 16

What durational language is often used with a fee simple determinable?

Answer 16

So long as

While

During

Until

Question 17

What estate requires clear language that the interest is measured in terms of a life, not a number of years?

Answer 17

A life estate is a present possessory estate that is limited in duration by a life. Upon the end of the measuring life, title reverts to the grantor or specified remainderman.

Question 18

What is the fifth unity unique to a tenancy by the entirety?

Answer 18

The fifth unity, unique to tenancies by the entirety, is the unity of person.

The 5 unities are:
Possession, interest, time, title, and person

Question 19

What is an ouster

Answer 19

Ouster occurs when a co-tenant refuses to allow another co-tenant access to the property. In this event, the ousted co-tenant may seek an injunction to gain access to the property and to recover the value of the use of the property for the time during which the co-tenant was denied access to the property.

Question 20

What happens to a fee simple determinable upon the happening of the stated condition?

Answer 20

It terminates automatically.

Question 21

Which covenant is a promise by the landlord not to interfere with the tenant’s possession of the leased premises? How is this breached?

Answer 21

The implied covenant of quiet enjoyment, which is implied in every lease.

This warranty is breached only when the conduct of the landlord or someone with superior title prevents the tenant from possessing the leased premises.

Question 22

What are the two types of mortgages?

Answer 22

1. Purchase money mortgage: A person takes out a loan for the purpose of purchasing property
2. Future advance mortgage: A line of credit used for home equity, construction, business, and commercial loans (“second mortgage”)

Question 23

A plaintiff must prove racial intent or purpose in order to establish a violation of the Fourteenth Amendment’s Equal Protection Clause. What must a plaintiff show to establish racial discrimination under the Fair Housing Act?

Answer 23

The plaintiff needs to show a disparate racial impact.

Question 24

What are the four types of landlord-tenant estates?

Answer 24

1. Tenancy for years
2. Periodic tenancy
3. Tenancy at will
4. Tenancy at sufferance

Question 25

What remedies does a tenant have when a landlord breaches the warranty of habitability?

Answer 25

If the premises are not habitable, then the tenant may choose to:

1. Refuse to pay rent
2. Remedy the defect and offset the cost against rent
3. Defend against eviction

Question 26

What is a constructive eviction?

Answer 26

A constructive eviction occurs when the landlord breaches a duty to the tenant, such as failing to make a repair, that substantially interferes with the tenant’s use and enjoyment of the leasehold (e.g., fails to provide heat or water).

Question 27

What is a wild deed?

Answer 27

A wild deed is a recorded deed that is not within the chain of title (i.e.,recorded and indexed, but not in the correct way to give subsequent purchasers notice).

Question 28

What is attornment and how does it happen?

Answer 28

Attornment is the tenant’s acknowledgement of a new landlord.

This can be accomplished (i) in writing, or (ii) by making rent payments to the new landlord.

Question 29

Groundwater is natural water that flows or lies under the surface and either percolates to the surface naturally or is tapped by a well. What are the four doctrines that govern groundwater rights?

Answer 29

1. Prior-appropriation
2. Correlative-rights
3. Reasonable-use
4. Common-law doctrine of absolute ownership

Question 30

What are the three requirements in a land sale contract to satisfy the Statute of Frauds?

Answer 30

It must be in writing, signed by the party to be charged, AND contain all essential terms (parties, description of property, price/payment info).

Question 31

What is an option contract?

Answer 31

In an option contract, one party acquires the right to purchase property, usually for a specific period of time, in exchange for consideration. (i.e., The buyer usually pays for the option.)

Question 32

How do the remedies available for breach of a real covenant differ from the remedies available for breach of an equitable servitude?

Answer 32

The remedy for breach of a real covenant is money damages, while the remedy for breach of an equitable servitude is an injunction.

Tip: When deciding whether to analyze facts under a real covenant analysis or an equitable servitude analysis, note what the party is seeking (damages or an injunction).

Question 33

What protections does a buyer have with an option contract?

Answer 33

During the time specified in the contract, the buyer is protected against revocation by the grantor and termination if the grantor of the option dies or becomes incapacitated.

Question 34

What are the requirements for adverse possession?

Answer 34

Possession must be Continuous, Actual, Open and Notorious, Hostile, and Exclusive for the statutory period.

Mnemonic: ANOCHE (““last night”” in Spanish)

(Note: Government-owned land cannot be adversely possessed.)

Question 35

Explain the two doctrines that govern the rights that a land owner has to take or use water from a watercourse that flows through or adjacent to the owner’s land?

Answer 35

Reasonable-use: Favored in the eastern U.S. and allows the owner to make any reasonable use of the water. Water rights cannot be sold or transferred separately.

Prior-appropriation: Favored in the western U.S. and states that water rights are determined by priority of beneficial use (first in time, first in right). Water rights can be sold or transferred separately.

Question 36

For a deed to be effective, what must the grantor and grantee do?

Answer 36

In general a deed transfers title only when

1. The grantor INTENDS to convey an interest,
2. The grantor DELIVERS a deed to the grantee, AND
3. The grantee ACCEPTS the deed.

Tip: When comparing and contrasting questions about delivery, always look to facts indicating the grantor’s INTENT.

Question 37

What is an actual eviction?

Answer 37

An actual eviction, as opposed to a constructive eviction, occurs when the landlord removes the tenant from the premises. This total eviction terminates the lease and ends the tenant’s obligation to pay rent.

Question 38

A covenant running with the land means that subsequent owners may be burdened by or may have to enforce the covenant. What are the 6 requirements for a burden to run with the land?

Answer 38

1. Writing to satisfy Statute of Frauds (exception implied reciprocal servitude)
2. Intent
3. Notice
4. Horizontal Privity
5. Vertical Privity
6. Touch and Concern

Question 39

Name four real property instruments that must comply with the Statute of Frauds (aside from a land sales contract).

Answer 39

1. Promise to create an interest in real property
2. Assignment of a right to purchase
3. Option contract
4. Promise to give a mortgage or other lien security

Question 40

Restrictions on the transferability of property (restraints on alienation) are generally prohibited. However, what two restraints on alienation can be valid on a life estate?

Answer 40

A forfeiture restraint (property forfeited if interest owner attempts to transfer) and a promissory restraint (promise by interest holder not to transfer) can be valid on a life estate.

Question 41

If a buyer is purchasing property using an installment land contract, when does she obtain legal title?

Answer 41

Buyer obtains legal title upon final payment under the installment payment plan.

Question 42

What terms must a valid deed contain?

Answer 42

(i) Identities of the grantor and the grantee,
(ii) Words of transfer,
(iii) Description of the property interest being transferred, and
(iv) Grantor’s signature.

Question 43

What is a novation?

Answer 43

A novation is an agreement by the landlord to release the original tenant from liability after an assignment or sublease.

Note: Absent a novation, the original tenant remains liable to the landlord for the entire duration of the lease.

Question 44

When analyzing facts concerning a party’s liability for changing the flow of surface water, what three theories should you consider?

Answer 44

1. Common Enemy
2. Natural Flow
3. Reasonable Use

Question 45

What are the six covenants of title that a grantor guarantees with a general warranty deed?

Answer 45

SIX Covenants of a General Warranty Deed

Present covenants:

1) Covenant of seisin,
2) Covenant of the right to convey
3) Covenant against encumbrances

Future covenants:

4) Covenant of quiet enjoyment
5) Covenant of warranty
6) Covenant of further assurances

Question 46

If one co-tenant rents out the property, how must profits be split among all co-tenants?

Answer 46

A co-tenant must account to other co-tenants for rent received from third parties, and rent is divided based on ownership interest of each tenant.

Question 47

What is a landowner’s liability if he excavates on his land and causes the adjacent, undeveloped land to collapse or subside?

Answer 47

The excavating land owner is strictly liable.

Question 48

In a lien theory state (which is the majority), a mortgage interest is treated as a lien that does not affect a joint tenancy until foreclosure. What does a mortgage do to a joint tenancy in a title theory state?

Answer 48

In a title theory state, the joint tenancy is severed upon the granting of the mortgage, and the interest is converted into a tenancy in common.

Question 49

A landlord’s failure to comply with applicable housing code requirements constitutes a breach of which warranty?

Answer 49

The implied warranty of habitability, which applies to residential leases and is nonwaivable.

Question 50

What is a major difference between a vested remainder subject to complete divestment and a contingent remainder?

Answer 50

A vested remainder subject to complete divestment is subject to a condition subsequent that can completely divest the remainder interest (trigger words: but if).

A contingent remainder is subject to a condition precedent to grantee’s taking.

Question 51

A purchase-money mortgage (PMM) is often used by buyers who don’t have enough money for a traditional down-payment or who cannot get a large enough bank mortgage. The PMM funds must be used to purchase the property and are given either to the seller as part of the purchase price or to a third party lender.

In the event that a mortgagor-borrower defaults, who has priority if there is a seller PMM and third party lender PMMs?

Answer 51

A seller’s PMM has priority over a third-party’s PMM.

Priority of third party PMMs against each other are determined chronologically (subject to applicable exceptions).

Question 52

What are the three types of waste that both a tenant of a life estate and a tenant in a leasehold must avoid?

Answer 52

(i) Voluntary waste (affirmative, substantial change);
(ii) Permissive waste (deterioration through neglect, failure to preserve, or failure to reasonably protect); and
(iii) Ameliorative waste (voluntary waste that does not diminish the value of the property).

Question 53

What are the four exceptions to the Statute of Frauds writing requirement?

Answer 53

1. Partial performance
2. Full performance
3. Detrimental reliance
4. Admission

Question 54

What was the common law Rule Against Perpetuities (RAP) designed to do?

Answer 54

RAP was designed to prevent interests from being created in the too distant future.

Tip: RAP is concerned with contingent interests that may remain contingent beyond the lives in being, plus 21 years. In other words, RAP settles the time within which a contingent remainder must vest in order to be valid. An interest is too remote if it depends upon a contingency, which could possibly happen after the specified period of lives in being, plus 21 years.

Question 55

As between an assignee and a sublessee, who is in privity of estate with the landlord and thus liable to the landlord for rent and other covenants in the lease?

Answer 55

An assignee is in privity of estate with the landlord, and thus he is liable to the landlord for the rent and any other covenants in the lease that run with the lease.

However, if the assignee reassigns the leasehold to a subsequent tenant, then the privity of estate with the landlord ends and the initial assignee is no longer liable to the landlord based on privity of estate.

Question 56

What is a life estate pur autre vie?

Answer 56

A life estate measured by the life of a third party is called a “life estate pur autre vie.”

Question 57

What are the prerequisites for creating an easement by necessity?

Answer 57

The dominant and servient estates must have been under common ownership in the past, and the necessity arose when the property was severed (which rendered the dominant property virtually useless without the benefit of an easement across the servient estate).

Question 58

A tenant is considered a holdover tenant when he continues to occupy the premises without the landlord’s consent and after the expiration of the lease. What two remedies does a landlord have?

Answer 58

The landlord may evict, or the landlord may bind the holdover tenant to a new periodic tenancy.

Question 59

What is a right of reentry and who retains this right?

Answer 59

A right of reentry is a future interest retained by the grantor after a fee simple subject to a condition subsequent is granted.

Question 60

In most states, there is a presumption that a conveyance to two or more persons creates what kind of tenancy?

Answer 60

Tenancy in common (which requires only the unity of possession).

Question 61

What are the four types of landlord-tenant estates?

Answer 61

1. Tenancy for years
2. Periodic tenancy
3. Tenancy at will
4. Tenancy at sufferance

Question 62

What future interest is held by the grantor who grants a life estate but does not convey the remaining future interest to a third party?

Answer 62

A reversion (or “reverter”)

A reversion is fully transferable inter vivos, devisable by will, and descendible by inheritance. Reversions are not subject to the Rule Against Perpetuities.

Question 63

A plaintiff must prove racial intent or purpose in order to establish a violation of the Fourteenth Amendment’s Equal Protection Clause. What must a plaintiff show to establish racial discrimination under the Fair Housing Act?

Answer 63

The plaintiff needs to show a disparate racial impact.

Question 64

Who bears the risk of loss if real property is destroyed between execution of a land-sale contract and closing?

Answer 64

In most states, the buyer bears the risk of loss (regardless of whether the buyer takes possession of the property), except when the loss is due to seller’s intentional or negligent actions (then seller bears risk).

Question 65

What happens when a casualty occurs during the time between execution of a land-sale contract and closing, and the seller is carrying insurance?

Answer 65

Any insurance proceeds the seller receives must be credited against the buyer’s purchase price.

Question 66

When reading a question involving future interests, when are you safe from having to consider the Rule Against Perpetuities (RAP)?

Answer 66

RAP is not an issue when analyzing future interests that revert to the grantor (i.e., reversion, possibility of reverter, right of reentry).

Question 67

For a constructive eviction claim to be effective (i.e., tenant no longer has to pay rent), what TWO things must a tenant do if the residential rental property is uninhabitable?

Answer 67

1. Give notice and adequate time for the landlord to correct the problems, AND
2. Vacate the property within a reasonable amount of time

Question 68

What are the three common types of concurrent estates? What unities are required for each?

Answer 68

1. Tenancy in common: Unity of possession
2. Joint tenancy: Unities of possession, interest, time, and title (““PITT””)
3. Tenancy by the entirety: Unities of person, possession, interest, time, and title

Question 69

How is the scope of an easement determined?

Answer 69

The scope of an express easement is defined in the first instance by its terms. If the terms are ambiguous, courts look to the intent of the parties.

The scope of an easement by necessity is determined by the extent of the necessity.

The scope of an easement by implication is determined by the existing quasi-easement.

The scope of an easement by prescription is limited to the nature and extent of the adverse use.

Question 70

What kind of tenants have the right to unilaterally partition a piece of property?

Answer 70

A tenant in common or a joint tenant may unilaterally partition property.

(NOTE: A tenant by the entirety does not have this right.)

Question 71

Regarding a landlord’s tort liability, the modern trend is to hold them to a general duty of reasonable care. This means that a landlord may be liable for what three things?

Answer 71

A landlord may be liable for:

1. Existing defects prior to the tenant’s occupation of the premises
2. Failure to make repairs required by a housing code
3. At times, the criminal activity of third persons who injure tenants

Question 72

What is the difference between a sublease and an assignment?

Answer 72

An assignment is a complete transfer of a tenant’s remaining lease term; a transfer of less than that is a sublease.

Tip: If the tenant retains a reversionary interest in the leasehold, then the transfer is a sublease.

Question 73

By what point in time must a seller deliver marketable title?

Answer 73

Seller is not required to deliver marketable title until closing (as sellers often use the proceeds of the sale to satisfy any prior mortgages or liens).

For installment contracts, not until delivery.

Question 74

What future interest is retained by a grantor when a fee simple determinable is conveyed?

Answer 74

A possibility of reverter is a future interest retained by a grantor when a fee simple determinable is conveyed.

Question 75

What happens when an attempt to create an easement fails due to the Statute of Frauds?

Answer 75

A license results when there is a failed attempt to create an easement.

Example: Grantee receives a license when grantor orally conveys an easement for more than one year.

Question 76

What is a retaliatory eviction?

Answer 76

A retaliatory eviction is the unlawful eviction of a residential tenant by a landlord in response to the tenant complaining, in good faith and with reasonable cause, about a housing, building, or safety code violations.

Question 77

What are two major exceptions to a tenant’s duty to pay rent?

Answer 77

1. Destruction of the premises not due to tenant’s fault, or
2. Material breach of the lease by the landlord (e.g., breach of the covenant of quiet enjoyment or the implied warranty of habitability)

Question 78

What are the two types of mortgages?

Answer 78

1. Purchase money mortgage: A person takes out a loan for the purpose of purchasing property
2. Future advance mortgage: A line of credit used for home equity, construction, business, and commercial loans (“second mortgage”)

Question 79

What is marketable title?

Answer 79

Marketable title is title free from defects (such as undisclosed easements, future interests) regardless of the type of deed.

Essentially, it is title that is free from an unreasonable risk of litigation.

Question 80

What future interest, held by a third party, is not a remainder, and generally cuts short the prior interest upon the occurrence of a specified condition?

Answer 80

An executory interest