Real Property Flashcards
The life-tenant is responsible for
ordinary expenses and taxes relating to the property during their lifetime, and cannot commit waste (causing the property to decrease in value).
RAP & Future Interests
Reverter and Right of Re-entry interests are NOT subject to the Common Law Rule Against Perpetuities because such interests are immediately vested upon their creation. Additionally, such interests are NOT subject to the Uniform Statutory Rule Against Perpetuities.
Joint Tenancy: Transfer of Ownership
– When one joint tenant unilaterally transfers his ownership interest in the property, the joint tenancy is severed. Tenants then hold the property as tenants in common.
− If there are more than two joint tenants, the joint tenancy remains, but only among the other joint tenants.
Joint Tenancy: Mortgage
If a joint tenant takes out a mortgage on her interest:
− Title Theory Jurisdiction → severs joint tenancy
− Lien Theory Jurisdiction → does not sever
Joint Tenancy: Lease by One Joint Tenant
When one joint tenant leases the property, the lease’s effect on the joint tenancy will depend on the jurisdiction.
Majority/Common Law: lease by one joint tenant severs the joint tenancy.
Other states: lease does not sever the joint tenancy.
Some courts = middle ground approach: the joint tenancy is severed only if the leasing joint tenant dies before the end of the lease term; otherwise the leasing joint tenant owns the whole property by right of survivorship if he survives the other tenants.
Co-tenant Entitlement: Rent from a Third-Party
If an in-possession co-tenant rents the property to a third-party, the out-of-possession co-tenant is entitled to his fair share of the rent paid by the third-party.
Co-tenant Entitlement: Reimbursement for Repairs
A co-tenant is entitled to reimbursement for the costs of necessary repairs that the co-tenant paid for, UNLESS there has been a wrongful ouster.
The amount of reimbursement is determined by the percentage share each co-tenant owns in the property (i.e. if a co-tenant owns a 50% share then the co-tenant is obligated to pay 50% of the repair costs).
Co-tenant Entitlement: Reimbursement for Improvements
A co-tenant who makes improvements to the property is NOT entitled to reimbursement from the other co-tenant(s), UNLESS there is a separate agreement to the contrary.
At the end of the co-tenancy (i.e. a partition or sale of the property), the improving co-tenant bears all the downside risk of the improvements, but also has all of the upside gain. Thus, if the property appreciated because of the improvements, only the improving co-tenant is entitled to that increase in value.
Termination of Periodic Tenancy
A periodic tenancy can only be terminated
(1) at the end of a natural lease period, AND
(2) requires written notice at least a full period in advance.*
- For example, a periodic month-to-month tenancy requires a one-month notice of termination.
*An exception exists for a periodic year-to-year tenancy, in that only 6-months’ notice is required.
Termination of a Tenancy for Years
The lease automatically terminates after the fixed period.
Normally, a tenant CANNOT terminate a lease prior to the end of the term, unless constructive eviction or another exception applies.
Termination of a Tenancy at Will
In most states termination of a tenancy at will requires giving: (1) notice of termination; AND (2) a reasonable time to quit the premises. In a minority of states, termination does not require notice to the tenant.
Hold-Over Tenant
- If a tenant holds-over (remains in possession after the lease ends), the landlord may:
a) Initiate eviction proceedings; OR
b) Hold the tenant over. - When a hold-over occurs, an implied month-to-month tenancy is created with identical terms to the original lease.
- If tenant is informed of a higher rent before the end of the lease, the higher rent applies.
- Duration:
- Modern View → month-to-month tenancy is created.
- Common Law → term is equal to original tenancy period.
Landlord Duty to Repair?
Residential Leases → Landlord HAS a duty to
(1) repair common areas, and
(2) warn of latent defects that create a risk of serious harm that the landlord knows of (or should know of).
Commercial Leases → Landlord has NO duty to repair (unless specified in the lease agreement).
Landlord’s Consent for Assignment
→ If the lease requires landlord’s consent, consent MUST be obtained.
*Landlord waives the right to enforce a provision prohibiting assignment if he accepts rent from the assignee.
→ If a lease is silent on the Standard of Consent:
* Most States: landlord may withhold consent for any reason.
* Some States: landlord MUST have a reasonable basis for withholding consent.
- Examples of a reasonable basis: the inability to fulfill terms of the lease, financial irresponsibility or instability,
When is an item a fixture?
Whether an item is a fixture is determined by the objective intent of the party who attached the item. An item is typically deemed a fixture, if a reasonable person would conclude that the item was intended by the installer to be a permanent attachment to the real property.
To determine whether the item is a fixture, courts consider: (1) the nature of the item; (2) the manner in which it is attached; (3) the damage that would result if the item were removed; and (4) the extent to which the item is adapted to the property (i.e. an installed custom window). The more the item is incorporated into the premises, the more likely the court will find the item to be a fixture.