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.
What is the trade fixture exception?
Under the trade fixture exception, an item that is attached to the property for use in the tenant’s trade or business is NOT a fixture UNLESS its removal would cause substantial damage to the property.
An item that is not a fixture may become one if it’s not removed before the end of the lease term.
Constructive Adverse Possession
If a person takes possession of a portion of land under color of title (invalid deed), the adverse possession extends to the entire portion of land described in the deed/title.
Adverse Possession: Title Acquired
An adverse possessor can only acquire title to the portion of land that he has met all the adverse possession elements (unless constructive adverse possession applies). An adverse possessor acquires the same title the original owner possessed, and is therefore subject to any applicable easements (unless the easement was terminated thorough prescription or other valid means).
The effect of zoning laws on title marketability:
Although zoning violations make title unmarketable, zoning restrictions do not.
Damages for Breach of Warranty of Marketable Title
*Measured by the reduced value of land (subtract the value of the property after the defect is discovered from its value before the defect existed).
*Courts are divided on whether damages are recoverable if the encumbrance is known or obvious (when actual, constructive, or inquiry notice exists).
Present Covenants
The present covenants are the covenants of:
(1) seisin (the grantor is the rightful owner);
(2) right to convey (the grantor has the right to make the grant); AND
(3) against encumbrances (there are no encumbrances against the title).
These present covenants can only be breached at the time of conveyance.
Enforcement of Present Covenants:
− Common Law → present covenants are NOT enforceable by remote grantees.
− Some States → will enforce the covenant against encumbrances if the remote grantee did not have notice of the encumbrance.
Future Covenants
1) Warranty – to defend against any third-party claims to title;
2) Quiet enjoyment – to not be bothered by a third-party’s claim to title; and
3) Further assurances – to do whatever is reasonable to perfect title.
Future covenants can be breached at any time upon the interference with the grantee’s possession of the property.
Estoppel by Deed
Under the doctrine of estoppel by deed, if a grantor conveys title to real property by deed before he owns the property, the title will automatically vest in the grantee as soon as the grantor acquires title to the property.
Owner by Adverse Possession vs. Subsequent Bona Fide Purchasers
Owners of property acquired through adverse possession are protected against recording statutes because they have no documents to record.
Courts have held that a bona fide purchaser of a later conveyance from the prior record title owner CANNOT defeat title acquired under adverse possession, even if the land was not occupied at the time of the conveyance.
Z oning Ordinances: Previous Non-Conforming Use
The doctrine of previous non-conforming use allows a landowner to continue to use his land in violation of a later enacted zoning law.
Insubstantial changes, such as reasonable alterations to repair the property, are PERMITTED.
Substantial changes, such as enlargement, alteration, or extension of a nonconforming use, are PROHIBITED.
Zoning ordinances: Variations
A variance is an exception to a zoning ordinance.
Two types of variances exist:
(i) a use variance; and
(ii) an area variance.
An application for a variance may be granted if:
(1) the property owner shows she will suffer hardship because of the ordinance; AND
(2) the variance will not damage or harm the public welfare.
FHA Exemptions:
The Act DOES NOT apply to:
(a) religious organizations;
(b) private clubs that limit occupancy to members;
(c) owner-occupied buildings with no more than four units occupied by persons living independently of each other; OR (d) single-family houses sold or rented by the owner without the use of an agent as long as the private landlord/owner doesn’t own more than three homes at the time.
Discriminatory Advertisements
EVEN IF THE PROPERTY IS EXEMPTED BY THE ACT , the Fair Housing Act prohibits the making, printing, and publishing of discriminatory advertisements that indicate a preference, limitation, or discrimination because of race, color, religion, sex, disability, familial status, or national origin.
The prohibition applies to: (1) publishers (such as newspapers and directories); and (2) persons/entities who place real estate advertisements in newspapers and on websites.
