Real Property

Question 1

Prsent Estates: Defeaseable Fees

Priority: High

Answer 1

Created when the grantor uses express conditional language to indicate that a conveyance will be terminated on the occurance or non-occurance of a condition or event.

Three Types:
1. Fee Simple Determinable: A fee simple conveyance that is conditioned on a determinable event or non-event with the grantor retaining the possibility of reverter. (so long as, during, while, the property shall revert)
2. Fee Simple Subject to Condition Subsequent: A fee simple conveyance that gives the grantor the right to re-entry if an event or non-event occurs.
3. Fee Simple Subject to Executory Interest: A fee simple conveyance that will transfer the property to a thrid party (not the grantor or his heirs) upon the occasion of an event or non-event.

Courts construe improperly languaged fees to the grantor’s intent and typically favor fee simple subject to condition subsequent if not clear.

Question 2

Future Estates: Reverter

Priority: High

Answer 2

A conveyance with the possibility of a reverter creates a future interest in the property for the grantor. If the specified condition occurs, the present interest in the property will automatically terminate and vest in the grantor. Reverter interests are vested immediately upon creation, and therefore are not subject to the Rule Against Perpetutites.

Question 3

Future Estates: Right of Re-entry

a.k.a - Right of Termination

Priority: High

Answer 3

A conveyance with the right to re-entry creates a future interest in the property for the grantor. If the specified condition occurs, the present interest may be terminated by the grantor, but only if he expressly excertises that right. Right of re-entry interests are vested immediately upon creation, and therefore are not subject to the Rule Against Perpetutites.

Question 4

Future Estates: Vested and Contingent Remainders

Priority: High

Answer 4

A vested remainder is a future interest in land that is given to an identifiable person with no conditions.

A contingent remainder is a future interest in land that is conditioned on the occurance or non-occurance of a specified event.

Remainder interests are devisable and pass to that person’s heirs. However, it can also be subject to survivorship in the conveyance. If unclear:
Majority: must survive the life tenant to be entitled to the interest.
Minority: must survive the testator to be entitled to the interest.

Question 5

Joint Tenancy: Severance

Priority: High

Answer 5

When one tenant unilaterally transfers his ownership interest in the real property, the joint tenancy is transformed into a tenants in common for the portion of the interest transfered and the remaining joint tenants.

A mortgage against one interest will attach to the whole property in a Joint Tenancy will:
* Lein Theory: Not sever
* Title Theory: Turn JT inot TIC

A lease by one of the joint tenants will sever the JT and create a TIC in most jurisdictions.

Question 6

Types of Leashold Interests

Priority: High

Answer 6

Tenancy for Years: lease lasts for a specified period of time and cannot be terminated by tenant without constructive eviction or other exception.

Periodic: lease lasts for an initial period and then automatically continues for additional equal periods until terminated by either landlord or tenant. May be implied if rent paid at specific periods, statute, or lease agreement is invalid. May be terminated at the end of every period with written notice of at least a full period in advance.

Tenancy at Will: lease continues until either party terminates it. Termination requires notice and a reasonable time to quit the premises.

Question 7

Constructive Eviction

Priority: High

Answer 7

A constructive eviction occurs when:
1. the landlord breached a duty to the tenant
2. the breach caused a loss of a substantial use and enjoyment of the premisis
3. tenant gave notice
4. landlord failed to remedy teh condition within a reasonable time
5. tenant vacated the premisis

A constructive eviction is a breach of the implied covenant of quiet enjoyment and a tenant may terminate the lease, avoid paying rent for the period of the constructive eviction, and seek damages.

• Residential: Landlord has a duty to repair & warn
• Commercial: Landlord has no duty to repair

Question 8

Landlord Duty: Mitigate Damages

Priority: High

Answer 8

Common Law: A landlord has no duty to mitigate his damages. May leave the property unleased and collect unpaid rent.

Majority: A landlord must undertake reasonable steps to mitigate damages, though those steps do not have to be successful or extensive. If re-leased, then can sue for difference and incidential damages.

• Can only ever recover past-due rent. Not future payments.

Question 9

Assignment of a Lease

Priority: High

Answer 9

A lease may be freely assigned for the remaineder of the lessor’s term unless the lease agreement states otherwise. Once the original tenant assigns all of thier rights to the assignee, the original tenant and the assignee remain liable for rent and all covenants that run with the land. The landlord remains liable to the assignee for any maintenance obligations.

Question 10

Termination of Leases: Surrender

Priority: High

Answer 10

A tenant that abandons a property must pay rent for the remainder of the lease term unless the landlord accepts a surrender and terminates the lease early. While a landlord’s acceptance of a surrender must be clear, it can be evidenced by other factors such as reletting at a higher price or substantially reconfiguring the property.

Question 11

Easements

Priority: High

Answer 11

An easement is a non-possessory interest in the use of another’s land. An easement may be created by:
1. express grant
2. prescription
3. implication
4. necessity

Types
* In Gross: benefit for a specific owner that does not run with the land.
* Appurtenant: benefit runs with the land so long as new owners have notice (actual, constructive, or inquiry)

Question 12

Easements: Express Grant

Priority: High

Answer 12

An easement created by express grant must be a writing signed by teh grantor that satisfies the staute of frauds, identifies the land and parties involved, and indicates the grantor’s intent to convey an easement.

Question 13

Eastements: Easement by Prescription

Priority: High

Answer 13

An easement by prescription is created when another uses the land in an open and notorious way, without permission of the land owner, continuously for the statutory period of time.

Question 14

Easements: Easement by Implication

Priority: High

Answer 14

When a single tract of land is divided by a common owner, the new owner of one of the divisions has an implied easement in any pre-existing use of the other tract(s) so long as that use is continuous (at least intermittent), apparent, and reasonably necessary for the owner’s use and enjoyment of his land.

Question 15

Easements: Easement by Necessity

Priority: High

Answer 15

When a piece of land is subdivided an easement by necessity is created to access that land if no other ingress or egress is avaliable.

Question 16

Easements: Termination

Priority: High

Answer 16

An easement is terminated by:
1. estopple
2. termination of the necessity
3. involuntary destruction of the servient estate
4. condemnation of the servient estate
5. written release
6. abandonment
7. merger
8. prescription

Question 17

Fixtures

Priority: High

Answer 17

A fixture is personal property affixed to the land or building that is regarded as an irremovable part of the property. A fixture is treated as real property and is conveyed with the property unless otherwise agreed. When determining if something is a fixture, the courts will look at the objective intent, including:
1. nature of the item
2. manner in which it was attached
3. damage that would be cause by removal
4. extent to which the item was adapted to the property

Trade fixtures (items used for a tenant’s business) are generally not considered fixtures unless removal would cause substantial damage or is not removed before the end of the lease term.

Question 18

Adverse Posession

Priority: High

Answer 18

A non-owner may obtain title to a property when the possession of that property is:
1. continuous for the statutory period (usually 10 years)
2. open and notorious, such that the land owner should have been on notice)
3. exclusive
4. actual (posessing the way an owner would)
5. without consent of the owner

• The title acquired is no greater than the title of the owner.

Question 19

Home Builder’s Implied Warranty

Priority: High

Answer 19

The purchaser of a new home has a warrant against latent defects and that the home will be safe and fit for human habitation at the time of the sale. A breach of this warranty allows a buyer to recover for damages to defects discovered within a reasonable amount of time due to defective construction or construction that deviate from industry norms.

• Latent Defect = a defect that could not have been discovered through reasonable inspection.
• Some courts require privity of contract, while others will extend the warranty to other purchasers in the same vulnerable position.

Question 20

Types of Deeds

Priority: High

Answer 20

General Warranty Deed: Most complete deed with six covenants of title:
1. grantor is the rightful owner
2. grantor has the right to convey
3. there are no encumberances in the title
4. grantor will defend grantee against third party claims to title
5. grantee will not be bothered by a thrid party’s lawful claim to title
6. grantor will do whatever is reasonable to perfect the title if problems arrise

Special Warrant Deed: Only warrants that the seller has not breached the covenants of title during his period of ownership. No warranty about previous ownership.

Quitclaim Deed: No covenants or promises to the buyer.

Question 21

Chain of Title

Priority: High

Answer 21

Transfers are organized into two indexes: names of grantors and names of grantees. Each land convenayce should be recorded into each index for easy searching. Some states have a thrid index for property. Any conveyance recorded in an index puts all future purchasers on notice for any encumberances or leins on the property. Conveyances that are not recorded in an index are considered “wild” and no notice is presumed.

Question 22

Bona Fide Purchaser

Priority: High

Answer 22

A BFP is someone who:
1. takes real property without notice of a prior conveyance
2. pays valuable consideration

Someone who purchases from a BFP, but is not a BFP themselves, recieves the same benefits as a BFP under the shelter rule.

• Gifts are not BFP, but subsequent purchasers of gift recipients can be.

Question 23

Future Advanced Mortgage

Construction Mortgage

Priority: High

Answer 23

A mortgage that provides for future payments under the original loan, usually for construction. The future payments may be obligatory, which puts the loan the same as a purchase-money mortgage in priority. If the future payments are discretionary, then each payment must be evaluated on its intended purpose to determine its level of priority.