Real Property

Question 1

requirements of a valid deed and types of deeds:
-contact of sale:

Answer 1

-Before a deed is delivered, the contract of sale is signed.
-Under equitable conversion, as soon as the contract is signed (but before closing), the buyer’s interest is real property (the land he contracted to buy) and the seller’s interest is personal property (money he will get from the sale).
-Thus, the risk of loss remains on the buyer under equitable conversion, even if the seller remains in possession
and control of the land

Question 2

validity of the deed

Answer 2

-To be valid, a deed must identify the buyer and the seller, describe the land, contain words denoting a present intent to convey, and be signed by the grantor.
-It must also be delivered. (Delivery is a question of intent to pass title presently)

Question 3

covenants in the deed: (two kinds):
-quitclaim

Answer 3

-Quitclaim deed: The grantor gives NO covenants (promises nothing) and the grantee gets whatever the grantor has.
-The grantee takes the land subject to a defect in the title, an
undisclosed easement, or other problem, and has no recourse

Question 4

warranty deed

Answer 4

-The grantor gives six covenants—three present covenants and three future covenants. The MEE tends to test present covenants rather than future covenants.
-The present covenants include (mnemonic=PRESENT):
(1) the right to convey, the covenant of seisen (both of
these essentially meaning that the seller guarantees he owns the land he is selling), and
(2) the covenant against encumbrances (“no encumbrances”—i.e., there are no existing easements, liens,
or encumbrances that are not stated in the deed).

Question 5

future covenants

Answer 5

-Future covenants include (mnemonic=FEW):
(1) further assurances, (2) quiet enjoyment, and (3) warranty.
-Under common law, remote grantees can sue only under future (not present) covenants.
—However, note in your answer that some jurisdictions do not follow the common law rule

Question 6

merger

Answer 6

-on the closing date, the contract for sale merges into the deed, so at that point, the buyer can only sue on the deed

Question 7

breach of implied warranty of fitness and habitability

Answer 7

-A builder of new homes impliedly warrants to the buyer that the home is habitable and fit for its intended purposes.
—This warranty applies to defects that are discovered within a reasonable time and are due to the builder’s negligence or failure to do work in a workmanlike manner

Question 8

common law first-in-time first-in-right principle and recording acts’ effect on that principle:
-common law rule

Answer 8

-Under common law, a grantor can convey only those rights
that the grantor had at the time of the conveyance.
-Thus, common law follows the first-in-time first-in-right
principle.
-All states have recording statutes that change the results of the common law principle

Question 9

three kinds of recording statutes:
(1) notice statutes

Answer 9

-Notice statutes protect subsequent bona fide purchasers for value who take without notice of the earlier transaction.
(Eg. “A conveyance of interest in land is not valid against any
subsequent purchaser for value without notice unless it is recorded”)

Question 10

race-notice statutes

Answer 10

-protect subsequent bona fide purchasers for value who take without notice AND are the first to record.
(Eg. “No conveyance of an interest in land is valid against any
subsequent purchaser for value without notice unless it is first recorded.”)

Question 11

pure race statutes

Answer 11

-protect subsequent purchasers who are first to record. (These are rare!)

Question 12

what is notice? (3 types: AIR)

Answer 12

(1) Actual notice: the grantee actually knows about the conveyance.
(2) Inquiry notice: examination of the land or reference in an instrument would lead a reasonable person to inquire.
(3) Record notice: The interest is recorded in the chain of title. Deeds that are recorded too late or too early are wild deeds. Wild deeds do NOT give notice.

Question 13

who is liable on a mortgage when title to the property is transferred

Answer 13

-general rule: A mortgagor (homeowner) can transfer title to the property.
—However, the mortgage will remain on the property and the mortgagor is still personally liable on the note.
-Generally, a new transferee who takes the land “subject to” the mortgage is NOT personally liable.
—-However, if the transferee “assumes” the mortgage, he is personally liable along with the original mortgagor.
(Some jurisdictions say that if the transferee pays the mortgage payments, he impliedly assumes the mortgage.)
*This view is brought up on the MEE, but it is considered the wrong answer on the MBE.)

Question 14

novation

Answer 14

-A novation occurs if the initial mortgagor, the new transferee, and the mortgagee all agree that the mortgagor is no longer liable and the transferee assumes all of the mortgagor’s duties

Question 15

leases and rights and duties under the lease:
-term for years lease

Answer 15

• a term for years lease specifies both a beginning date and an end date

Question 16

periodic tenancy

Answer 16

-A periodic tenancy has no fixed end date (e.g., month-to-month lease = periodic tenancy).
-It simply repeats until one party gives valid notice to the other.
-It can be created by (i) an express agreement, (ii) implication (where the lease contains no end date), or (iii) operation of law (e.g., an oral lease that violates the Statute of Frauds because the term is more than one year).
-Valid notice (i.e., notice equal to the rent payment term) is required to terminate a periodic tenancy

Question 17

assignment

Answer 17

-if the lease does not prohibit an assignment or sublease, a tenant can assign or sublease her interest in the lease

Question 18

eviction vs. the implied warranty of habitability

Answer 18

-A tenant can sue for constructive eviction (commercial
or residential) IF the tenant can prove that the landlord breached a duty to the tenant (e.g., the duty to repair) and this breach caused a loss of substantial use and enjoyment of the premises, and the tenant vacated the premises within a reasonable time after giving the landlord adequate notice.
*This is different than the implied warranty of habitability which is breached ONLY in a residential lease if the premises are
uninhabitable
—If this occurs, the tenant has several remedies including vacating the premises, suing for damages, offsetting damages, etc.

Question 19

duties of a tenant

Answer 19

-The tenant must pay rent.
-If the tenant does not pay rent but has abandoned the property, the landlord can sue the tenant for damages or treat it as a surrender (the latter excuses future rent obligations).

Question 20

duty to mitigate

Answer 20

-Under common law, the landlord has NO duty to mitigate damages.
-Many states have abandoned this approach and require that the landlord make a reasonable effort to mitigate damages
(eg. by attempting to re-rent the premises if the tenant leaves).

Question 21

The Fair Housing Act

Answer 21

-This act disallows discrimination in housing sales or rentals on the basis of race, color, religion, sex, familial status, or national origin (but not occupation).
-This does NOT apply if the owner occupies one of the units in a multiple-unit dwelling containing no more than four units occupied by persons “living independently of each other.”
—However, an owner may not place a discriminatory advertisement.
—If such advertisement is made, the owner and publisher will have violated the act.

Question 22

easement creation and termination:
-creation

Answer 22

easements can be created expressly, impliedly (by prior use or necessity), or by prescription.

Question 23

termination of easements

Answer 23

-Easements may be terminated in a variety of ways:
—by their express terms, written release, merger of the dominant and servient tenements, prescription, estoppel,
condemnation, or abandonment.
—For abandonment, mere nonuse of the easement is NOT sufficient to abandon it: There must be an act of abandonment.

Question 24

how to create and severe a joint tenancy:
-creation

Answer 24

-A joint tenancy requires the four unities (mnemonic=TTIP):
—time, title, interest, and possession.
-Most states also require using the language “joint tenancy” and adding an express reference to “survivorship” or “survivors” to create a joint tenancy.

Question 25

severance of a joint tenancy

Answer 25

-a joint tenancy can be severed in one of four ways (mnemonic=G SAM):
-by Giving it away during life, by Signing a contract for sale, by an Actual judicial sale by a judgment lien creditor, or by
granting a Mortgage in a title theory state.

Question 26

requirements for adverse possession

Answer 26

-Requirements for adverse possession include possession that’s (mnemonic=CHANGE):
(1) continuous, (2) hostile and under a claim of right, (3) actual, (4) open and notorious, (5) goes on for the statutory period, and (6) exclusive.
-One only acquires title to the area one actually possesses (unless there is color of title, a unitary tract, and possession of an amount that is reasonable in relation to the whole—in which case, the adverse possessor can acquire the whole tract)

Question 27

tracking

Answer 27

-in some circumstances, an adverse possessor may tack on the time that a prior adverse possessor had possessed the land to his own time to reach the statutory period.

Question 28

failure to record an interest acquired by adverse possession

Answer 28

-the adverse possessor will prevail over a subsequent bona fide purchaser who complies with the recording act because there is no document that the interest holder could record