Real Property Flashcards
Vested Remainder
A remainder that automatically becomes possessory upon the natural expiration of the preceding estate.
Limitations- Vested Remainders cannot:
a) Be subject to any condition precedent; or
b) Vest in an unknown or unascertained person.
3 Types of Vested Remainders:
1) Indefeasibly vested remainder- becomes possessory immediately upon termination of the prior estate (to A for life, then to B).
2) Vested remainder subject to total divestment- subject to some condition subsequent, such that the remainderman could be divested after taking possession (to A for life, remainder to B; but if B weds, to C).
3) Vested Remainder subject to open (class gift)- remainder vested in a described class of takers, at least one of whom is capable of taking possession (by virtue of being alive) (to A for life, remainder to children of B and their heirs”; B has one child, who has a vested remainder subject to open {because B may have more heirs}.
Open vs. Closed class- class stays open to allow for future members and closes when no new members can be created (life tenant dies).
Rule of Convenience- class closes whenever any member can call for distribution of her share.
Contingent Remainder
A remainder will be contingent if it is either:
a) Subject to a condition precedent, or
b) Created in favor of an unascertained or unborn person.
Subject to Condition Precedent- remainder’s taking is contingent on the occurrence of some event or condition.
-Once the event or condition occurs, the interest automatically becomes an indefeasibly vested remainder (to A for life, then to B and his heirs when B gets married…If B is unmarried at the time of the conveyance, A has a life estate, B has a contingent remainder (because marriage is a condition precedent), and grantor has a reversion in case B is not married when A dies; If B gets married he has an indefeasibly vested remainder).
Subject to unborn or unascertained persons- a remainder is contingent if it is created in favor of unborn or unascertained persons (to A for life, then to B’s heirs…If B has no children at the time of the conveyance, remainder is contingent because heirs of B cannot be ascertained until B dies).
Rule of Destructibility
At common law, a contingent remainder is destroyed if it remains contingent (the condition not satisfied) when the preceding estate ends (O grants to A for life, then to B once he goes to law school; A dies and B has not gone to law school…At common law, B gets nothing; at modern law, a reversion to grantor or grantor’s heirs until grantee satisfies the condition).
Merger (Shelley’s Rule)
Arises when a conveyance attempts to give a life estate to grantee with remainder to grantee’s heirs.
At common law, the two estates merge (“to A for life, then to A’s heirs”…and A is alive)
Common Law- remainder merges and A has a fee simple absolute.
Modern rule- A has a life estate and his heirs have contingent remainders; O has a reversion because A could die without heirs.
Doctrine of Worthier Title
Arises when grantor creates a life estate in another but creates a future interest in grantor’s heirs.
(O grants “to A for life, then to O’s heirs”)
Under the doctrine, the contingent remainder in O’s heirs is void; A instead has a life estate and O has a reversion.
Shifting Executory Interest
Always follows a defeasible fee.
Cuts short someone other than the Grantor
(to A, so long as the property is used for storage. But if used for any other purpose, to B)
-A has a fee simple subject to an executory interest
-B has a shifting executory interest- If A stops using the property for storage, A’s interest is cut short (not the grantor’s).
Springing Executory Interest
Cuts short the interest of the Grantor or his heirs.
(To A, if and when he gets married)
A has an executory interest
Grantee has a fee simple subject to an executory interest; If A gets married, possession springs from Grantor to A.
Analyzing a Conveyance subject to RAP
1) Determine the interest being granted;
2) Apply RAP to any interest for which RAP applies;
3) If conveyance violates RAP, stroke only the violating portion.
What remains = new conveyance
Tenancy in Common
An estate with multiple tenants in which each co-tenant owns a distinct, undivided interest and each has a right to possession of the whole estate.
Characteristics:
Freely Transferable- each interest is freely descendible, devisable, and alienable.
Co-tenants only share the right to possession.
No survivorship rights- a co-tenants interest can be transferred to heirs upon her death
Partition- a co-tenant can force partition at any time and take sole ownership of her share in the estate while the remaining parties hold their interests as tenants in common.
Modern law favors tenancy in common; it is the default concurrent estate.
Joint Tenancy
Creation- 4 conditions must concurrently exist when the tenants take their interests:
1) Time- JT’s must take their interest at the same time;
2) Title- JT’s must receive their conveyance through the same instrument;
3) Interest- JT’s must take equal and identical interests; and
4) Possession- JT’s must have equal possessory rights.
(alienable but not devisable or descendible).
Tenancy by the Entirety (severance)
4 ways to sever, which creates a tenancy in common:
1) Death of one co-tenant;
2) Mutual agreement of the parties in writing;
3) Issuance of a divorce decree; and
4) Execution by a joint creditor (foreclosure).
Tenancy for Years
-Lasts for a fixed period of time;
-Requires a definitive beginning and end date;
-If duration is longer than one year, lease must be in writing;
-Terminates automatically at the end of the fixed period (no notice is required);
-Also referred to as an “estate for years,” “term for years,” or “fixed term tenancy.”
Periodic Tenancy
A leasehold that is continuous for successive intervals (weeks or months) until either party gives notice of termination.
Creation-
-Express agreement- conveyed to tenant for agreed interval
-Implication- a lease that does not specify duration, but provides for rent to be paid at set intervals
-Operation of Law- 2 situations:
1) Invalid lease- if tenant takes possession despite an invalid lease, periodic tenancy arises upon the landlord’s acceptance of payment (period of the tenancy is determined by the period the payment covers;
2) Holdover tenant- if landlord accepts rent from a holdover tenant, a periodic tenancy arises for the period the payment covers.
Termination- occurs when the tenant gives proper notice, which requires:
1) Sufficient time- tenant must give notice one full period in advance; year to year tenancies require 6 months notice;
2) Effective Date- effective date of termination must be at the end of the period of the tenancy.
(Parties can agree to modify these requirements).
Tenancy at Will
A tenancy with no fixed duration, terminable by either party at any time without notice.
Creation- express agreement
-Without an express agreement, courts will treat the release as an implied periodic tenancy.
Termination- by will or operation of law
-By will- either party can terminate the lease at any time without notice, but a reasonable demand to vacate the premises is usually required.
-By operation of law- occurs upon any of the following:
1) Death of either party;
2) Waste by the tenant;
3) Assignment by the tenant;
4) Transfer of title by the landlord; or
5) Lease by the landlord to a third party.
Landlord’s Remedies for Tenant Breach
If tenant breaches his leasehold duties, landlord’s options depend on whether tenant retains possession.
Tenant retains possession- landlord may:
a) File for notice of eviction; or
b) Continue the lease and sue for rent due.
Tenant abandons premises- landlord may
a) Surrender- treat the abandonment as tenant’s surrender and accept it, releasing the tenant from the lease; or
b) Ignore (minority rule)- hold tenant liable for unpaid rent; or
c) Re-let (majority rule)- lease premises to new tenants and hold the breaching tenant liable for any losses.
No self-help
Security Deposit
No retaliatory eviction
Implied Covenant of Quiet Enjoyment
A tenant has an implied right to quiet use and enjoyment of the premises, without interference from the landlord.
Actual Eviction- landlord wrongfully evicts or excludes tenant from property.
Constructive Eviction- landlord’s actions or inactions render the property uninhabitable.
Elements:
1) Substantial Interference- major and/or chronic problems;
2) Notice- tenant must inform the landlord and give him a reasonable opportunity to repair; landlord must fail to act meaningfully; and
3) Vacate- tenant must vacate within a reasonable period after the landlord fails to repair.
Implied Warranty of Habitability
Residential property must be fit for basic human dwelling
Characteristics:
-Not applicable to commercial leases;
-Absolute duty – cannot be modified by lease terms;
-Local code or case law specifies the standard for a breach;
(no heat in winter; no plumbing; no water, etc.).
Tenant’s remedies for landlord breach:
1) Move- vacate premises and terminate the lease;
2) Repair- make reasonable repairs and deduct the costs from future rent;
3) Reduce or withhold rent- until a court determines the fair rental value given the breach;
4) Remain- and seek money damages.
Landlord Tort Liability to Tenant
Landlord is liable for injuries involving:
1) Common Areas- duty of reasonable care (stairways, hallways);
2) Latent Defects- duty to disclose he should reasonably know of;
3) Assumption of Repairs- negligence standard (negligent repairs LL chooses to undertake);
4) Public Use- liable for known defects if he knows the property is for public use and tenant is unlikely to repair (concert hall, convention center);
Seasonal or short-term lease of a furnished dwelling- LL is liable for defects that cause harm to tenant.
Assignment
Entire leasehold transfers from tenant to assignee.
-Assignee is in privity of estate with LL (the two are bound by all covenants that run with the land;
-Assignor remains in privity of contract with LL;
-Assignee owes rent directly to LL, but assignor may be held liable for unpaid rent.
Sublease
Partial leasehold transfers from sublessor to sublessee
-Sublessor is in privity of estate and contract with LL (relationship between tenant and LL remains unchanged);
-Sublessee is no liable to LL for rent and is not bound by any covenants unless expressly assumed.
Easement Appurtenant
Entitles a dominant estate owner to use a servient estate’s land.
Attaches to the dominant estate and passes automatically (even if not mentioned in conveyance).
Easement in Gross
Entitles an individual or entity (not a dominant landowner) to use the servient estate.
Does not attach to land; there is no dominant estate.
(right to place a billboard on another’s lot; right to run utility line across; right to fish in another’s pond)
Similar to a license, but irrevocable; may be terminated.
Affirmative Easement
Entitles its holder to make affirmative use of the servient estate.
Negative Easement
Entitles its holder to restrict the servient estate from otherwise permissible activities.
Scope of Easements
An easement’s scope is determined by the terms or conditions that created it. In interpreting an easement’s scope, courts will consider the reasonable intent of the original parties.
Expansion:
Easement holders cannot unilaterally expand the scope of their easement (through overuse or misuse)
Overuse or misuse does not terminate the easement.
Remedy for violation = injunction.
Duty to repair- Easement holder has a duty to make repairs if he is the sole user (if both use it, costs are apportioned).
Express Easement (Easement by Grant or Reservation)
Grant- an express grant of the easement.
Created by instrument (written agreement) in which the servient estate owner gives easement to owner of dominant estate.
Reservation- grantor conveys title to land but reserves the right to continue using the land for the designated purpose.
Grantor may only reserve an easement for himself (void if reserved for the benefit of another).
Requirements- express easements must be:
1) In writing; and
2) Signed by the servient estate owner.
Easement by Prescription
1) Continuous;
2) Open and notorious;
3) Actual; and
4) Hostile.
Easement by Implication
An easement legally implied based on prior use by a common grantor on land subsequently divided into multiple plots.
Requirements:
Easement exists prior to division of a single tract of land;
Common grantor’s use is continuous and apparent;
Use is reasonably necessary for enjoyment of the dominant tenement; and
Parties intended the use to continue after division of the land.
Exceptions:
Subdivision plot- lots in a subdivision are sold with reference to a map plan; and
Profit a pendre- holder of a profit a pendre has an implied easement to pass over the land’s surface as reasonably necessary to extract materials (wood, coal).
Easement by Necessity
An easement can arise if access to or from property is impossible without the easement.
Creation- Usually arises when a landowner sells a portion of her property and the resulting division deprives one lot owner of access to a public road or utility (the owner of the servient estate can choose a reasonable location for the easement).
Termination- expires automatically when the necessity ends.
Negative Easements
Entitles its holder to restrict the servient estate from engaging in otherwise permissible activities on his own land.
4 Categories:
Light;
Air;
Support;
Stream of water from an artificial flow.
Creation- can only be created by express grant (writing signed by the grantor).
(NOTE- Restrictive covenants are utilized more frequently than negative easements).
Termination of Easements
1) Estoppel- where servient owner reasonably relies on an easement holder’s conduct or representations indicating an intent to abandon the easement; non-use is insufficient;
2) Necessity Ends;
3) Destruction of servient tenement- unless from willful conduct of servient owner;
4) Release- easement holder can terminate by giving deed of release to servient owner;
5) Abandonment- physically demonstrates an intent to abandon it (mere words or non-use is insufficient);
6) Merger- 2 lands merge (re-dividing does not revive easement);
7) Prescription- owner adverse possesses.
8) Expiration- if easement was for set term and term ends.
License
A right to use another person’s land, which is revocable at the licensor’s will.
-license is a privilege, not an interest in land (distinguish from affirmative easement).
-Inalienable (any attempt revokes license).
(Oral grant of a permanent easement may result in a license since easement needs to be satisfied by SOF).
Profit
A non-possessory property interest entitling its holder to enter a servient estate to remove resources (minerals, timber, soil, fish, etc.)
All rules governing easements apply to profits (creation, transferability, and termination).
Extinguishment- may be extinguished through misuse or overuse of resources.
Covenants
A promise to do or refrain from doing something related to land.
A contractual limitation or promise regarding land.
(Covenants are not property interests)
Real Covenants
a covenant concerning real property
-Runs with the land at law – subsequent owners may be burdened by the covenant or may enforce it.
Affirmative Covenant- a promise to do something related to land;
Restrictive Covenant- a promise to refrain from doing something related to land.
Termination- can occur by:
A) Written release;
B) Merger of benefitted and burdened estates; or
C) Condemnation of burdened property.
Requirements for Burdens of Covenant to Run with Land
A successor in interest to the burdened estate will be bound by a covenant if the following conditions are satisfied:
1) Writing- original covenant was in writing;
2) Intent- parties intended to bind successors in interest (look to language of the covenant; courts are liberal in construing requisite intent);
3) Touches and Concerns the Land- covenant must affect parties’ legal relations as landowners (very low standard) (homeowner’s fees satisfies this condition);
4) Horizontal and Vertical Privity- must exist between interested parties Horizontal Privity- relationship between the covenanting parties (grantor/grantee, LL/tenant) Vertical Privity- relationship between covenanting parties and their successors in interest (contract, devise, descent)
5) Notice- successor in interest had notice of the covenant when she took her interest.
Equitable Servitudes
A covenant enforced in equity against successors through injunctive relief (injunction is the remedy)
-A covenant that will be enforced against successors of the burdened land who have notice of the covenant.
-Privity is not required to bind successors.
Creation- requirements:
Writing;
Intent- original parties must intend to bind successors;
Touches and concerns the land; and
Notice (only for burdened land, not required for benefit to run).
Reciprocal Negative Servitudes
Lot owners in residential subdivisions may enforce restrictions on the use of property against other subdivision lot owners (may be implied from a common development scheme of a residential subdivision).
Created through implication if:
General/common scheme- when sales began, the developer had a general scheme for all parcels of the subdivision, including the subject lot. Common scheme may be evidenced through a) recorded plat; b) general pattern of restrictions; and/or c) oral representations to early buyers; OR
Notice- Owner of the subject lot had notice of the covenants in the deeds of other subdivision lots (Actual, Inquiry, and Record Notice).
Implied Promises in Land sale Contracts
Every land sale contract contains two implied promises:
Promise to provide marketable title
-Promise that title is free from risk of litigation.
-Defects rendering title unmarketable:
a) Acquired by adverse possession.
b) Encumbered by interests (servitude, mortgage, future interest) but seller has right to satisfy outstanding mortgages or liens with sale proceeds) or
c) Zoning ordinance violations existing at sale
Promise to disclose and make no material false statements
-Seller must not materially misrepresent facts or make false statements concerning the property;
-Seller must disclose latent material defects;
-Seller cannot limit liability through disclaimers;
-If a new property, seller/builder is subject to an implied warranty of fitness/quality in construction.
Remedy for Breach
Buyer must notify seller before closing and give reasonable time for seller to cure defects.
If seller fails to cure, buyer can rescind, file for damages, demand specific performance, or file suit to quiet title.
If buyer fails to notify seller before closing, contract merges with the deed and seller is not liable. Deeds
A deed passes legal title from seller to buyer.
Deed
Requirements- to be effective, a deed must be:
Lawfully executed- deed must be signed by grantor and must reasonably identify the parties and the land; and
Delivered- requires intent to be bound by the conveyance.
-Title passes upon effective delivery; cannot be rescinded.
-Present intent controls; physical transfer not required.
-Acceptance- grantee must accept the deed; acceptance is usually presumed upon valid delivery.
-Rejection by grantee = ineffective delivery.
General Warranty Deed & Covenants for Title
3 Present Covenants (only breached at the time of delivery):
1) Seisin- grantor covenants that he is the rightful owner (has title, possession) and that deed covers described land;
2) Right to Convey- grantor has right to convey; and
3) Against encumbrances- (no servitudes, mortgages).
3 Future Covenants (only breached after delivery):
1) Quiet Enjoyment- not disturbed by third party’s claim of lawful title;
2) Warranty- grantor will defend against lawful claims of title by others; and
3) Further assurances- grantor promises to perform future acts reasonably necessary to perfect the title conveyed.
Mortgages
A security interest in land that serves as collateral for the repayment of a loan.
-Must be in writing.
-Mortgagor = debtor/borrower/landowner.
-Mortgagee = creditor.
Equitable mortgage- debtor gives creditor a deed to his land as collateral for the debt (instead of executing a mortgage).
Acceleration Clauses- terms in loan agreements that require mortgagor to pay off full loan immediately if certain conditions are met (mortgagor misses too many payments).
Foreclosure and Multiple Creditors
Priority of Creditors- creditors must record their interests (recorded interests take priority in the order recorded).
Purchase Money Mortgages (PMM)- superior to all interests (creditors can agree to subordinate priority to a junior creditor).
Junior Interests- terminated by foreclosure of a superior claim.
-Foreclosure terminates all junior interests; junior interest holders cannot look to the land to satisfy debts (junior interest holders can seek a deficiency judgment against debtor, ensuring that debtor remains liable for the balance on the junior mortgage.
-Junior interests are necessary parties and must be included in a senior foreclosure action (otherwise, the junior mortgage will remain on the land).
Senior Interests- unaffected by junior interest foreclosures.
-Buyer of foreclosed property takes it subject to senior interests (buyer is not liable for senior debt, but the senior mortgage remains on the land).
Lateral and Subjacent Support
Lateral Support- Ownership of land includes the right to have land supported in its natural state by adjoining land; landowners can be liable for excavations that cause damage to adjacent land.
P can bring claims under two types of liability:
1) Negligence- If adjacent landowner’s excavation causes damage to developed land, excavating owner is only liable if he acted negligently; or
2) Strict Liability- P must show his land would have collapsed
Water Rights in Watercourses
Land bordering watercourses (natural or artificial bodies of water, {lakes and rivers}) is governed by either:
Riparian doctrine- water belongs to those who own land bordering the watercourse. 2 theories:
1) Reasonable Use Theory (majority)- riparian owners share rights to reasonable use and are liable to other owners if their use unreasonably interferes with the other owner’s use (balance utility of use vs. gravity of harm).
2) Natural Flow Theory (minority)- riparian owners may be enjoined for any use resulting in a substantial or material reduction in other’s water quantity or quality.
(Natural uses prevail over artificial uses under both theories).
Prior appropriation doctrine- water rights are originally acquired by actual use.
-Priority of beneficial (productive use) use determines rights to water.
Water Rights in Groundwater and Surface Water
Groundwater- water beneath the surface not confined to a known channel (water in wells)
Surface owner is entitled to make reasonable use of groundwater, but must not be wasteful.
Surface water- water from rain, springs, or other runoff that has not yet reached a natural watercourse.
-Landowners can generally use surface water as they please, but may be liable for interrupting its flow.
-Liability depends on which theory applies:
1) Natural Flow Theory- owners cannot unreasonably alter natural drainage;
2) Common Enemy Theory- owners can do anything to change drainage or combat flow unless it causes unnecessary damage to other’s land; or
3) Reasonable Use Theory- utility of use is balanced against the gravity of harm from that use.
Government Zoning Power
Pursuant to its police powers, government may enact statutes to reasonably control land use (cities and counties must be authorized to do so under an enabling act.
-Zoning ordinances must be reasonably related to the public welfare, not too restrictive, and not racially discriminatory.
Variances- landowners can get government permission to be exempt or vary from literal restrictions of a zoning ordinance. To qualify for a variance, a landowner must show:
1) Undue hardship; and
2) Variance will not be contrary to public welfare.
Nonconforming Use- a once lawful existing use for property, now deemed nonconforming under new zoning laws.
-Government cannot eliminate a use all at once (zone out) unless just compensation is paid.
-Government may provide the landowner with amortization, whereby government will make payments to the landowner over a set period of time until the landowner recoups the value of the nonconforming use.
Special Use Permit
Certain property uses require a special use permit even where zoning generally allows the type of use (hospitals and drive-thrus in commercial zoning districts).
Exactions
Condition for government approval of a new development.
-Condition is usually a payment or gift of property to government to offset the development’s demands on public services.
(Due to population increase from a new housing development, government will have to install new bus stops and traffic lights in surrounding areas – government can seek some exaction (payment) from developer.
Requirements (exactions are unconstitutional unless they satisfy the following:
1) Nexus- there must be a rational relationship (nexus) between the exaction sought by the government and the burden on public facilities; and
2) Proportionality- exaction must reasonably relate, in nature and scope, to the impact of the development.
