real property Flashcards
Fee Simple preferred
the law disfavors defeasible estates and will interpret ambiguous language as expressing only the grantor’s purpose in making the grant, which has no legal effect, rather than a binding restriction on the grantee’s usage of the property.
What happens when a conveyance does not expressly reference a right of entry?
Courts may not construe a fee simple subject to a condition subsequent as implying a right of entry if none is expressly invoked in the instrument of conveyance. In such a case, courts may find that the grant conveys no future interest and the grantee will be deemed to have essentially received a fee simple absolute.
Fee Simple Determinable
If the condition specified in the conveyance should occur, then the fee simple will end automatically, and the property will return, or revert, to the grantor.
The grantor’s interest in a potential reversion is a future interest called a possibility of reverter.
To spot a fee simple determinable on the bar exam, look for words of time or duration, such as until, while, so long as, or during.
Fee Simple Subject to a Condition Subsequent
right of entry
conditional language but if, on condition that, unless
presumption in favor of fee simple subject to condition subsequent
in the case of an ambiguous conveyance, there is a presumption in favor of the fee simple subject condition subsequent over a fee simple determinable.
Life Estate
An estate of a duration measured by the life of some named person.
Followed by a remainder (in the grantee) or a reversion (in the grantor)
Life tenant (Duty to avoid Permissive Waste)
- requires the life tenant to take reasonable steps to maintain the premises but no duty to make extraordinary repairs or improvements
- requires life tenant to pay taxes on the property up to the amount of income that can be derived from the land
- responsible for interest on debt secured by mortgage (principle to remainderman)
Life tenant duty to avoid voluntary waste
must not alter property in ways that materially decrease its value
life tenant duty to avoid ameliorative waste
must not alter the property in ways that change its character, even if those changes increase the property’s value
vested remainder
A vested remainder is one that passes to (1): an identifiable, living remote grantee when the preceding life estate ends, (2): with no preconditions to the transfer.
contingent remainder
A contingent remainder is a remainder that’s held by (1): an unknown or unborn remote grantee, or (2): a remainder that vests in a remote grantee only if a condition precedent occurs.
executory interest
a future interest based on some condition precedent that may vest in a remote grantee in a manner that cuts off a previous estate before its natural end.
alienability of future interests
future interests are generally devisable, descendible and transferrable.
tenancy in common
shared property ownership
no requirement of equal interest
regardless of each cotenant’s stake, each is entitled to possess the whole property
none can exclude the other
preference for tenancy in common
A tenancy in common is the default estate created by a conveyance or bequest of real property to two or more people, unless: (a): there is express language stating that the parties have a survivorship right creating a joint tenancy; or (b): if the conveyance of real property is stated as husband and wife creating a tenancy by the entirety.
Joint tenancy creation
A conveyance of real property to two or more persons creates a joint tenancy when (1): a clear express intent to create a joint tenancy is expressed in the instrument of conveyance or transfer; and (2): the four unities of time, title, interest and possession are present
Joint tenancy 4 unities
time,
* The unity of time requires that the joint tenants’ interests must vest simultaneously.
title,
* The unity of title requires that the joint tenants must derive their ownership from the same deed or other instrument
interest, and
* The unity of interest requires that the joint tenants must hold the property in equal shares
possession…
* And the unity of possession requires that each joint tenant must have the right to use the entire property.
Joint Tenancy Inference
In many states clear language is required.
But courts sometimes will infer a joint tenancy from words like “share and share alike.”
Effect of Severance
The severed interest becomes held as a tenancy in common, while the remaining interests continue in a joint tenancy as before.
Severance by sale
Sale of a joint tenant’s interest severs the interest because the unities of time and title have been disturbed.
Equitable Conversion destroys unity of title at point of sales k, before closing.
Effect of lease on lessor’s joint tenancy interest (Common Law/minority of jds)
Severance
Effect of Lease on Lessor’s joint tenancy interest (minority)
Other states hold that such a
lease does not sever the joint tenancy.
Some courts follow a
middle ground approach: the joint tenancy is severed only if
the leasing joint tenant dies before the end of the lease term;
What happens to the lessee in jds where a lease does not sever the joint tenancy if a leasing joint tenant dies before the end of a lease
Lease is terminated as non-leasing joint tenants now own leasing joint tenants share by ros.
Effect of Mortgage on a lease
Lien theory states: No severance
Title theory states: Severance
What is Partition?
a judicial proceeding in which one or more cotenants seek to end the cotenancy and divide the property among themselves individually
What kind of partition is preferred
Partition in Kind (dividing the properly physically) is preferred to partition by sale.
When is partition by sale preferred?
When partition in kind isn’t possible
property is a house
physical division would leave part of the property unusable
physical division would substantially reduce the property’s value or utility.
When is an out of possession cotenant entitled to rent from an in-possession cotenant?
when there has been an agreement of this kind; or
the in-possession co-tenant has been wrongfully ousted.
When is a cotenant entitled to reimbursement for repairs?
A tenant is entitled to reimbursement for the costs of the necessary repairs that he paid for in an amount proportional to the co-tenant’s ownership interest UNLESS there has been a wrongful ouster
What is the responsibility for mortgage payments among co-tenants?
Co-tenants are each responsible for his or her share of mortgage payments in proportion to their ownership interests on the property and an overpaying cotenant may recover such overpayment in a contribution action.
Does a cotenant require consent of other tenants before making improvements to the property?
o Generally, any cotenant may improve the property without the others’ consent.
o A co-tenant who makes improvements is not entitled to reimbursement unless there is an agreement to the contrary.
o At the end of the cotenancy, the improving cotenant bears all the downside risk of the improvements, but also has all of the upside gain.
Tenant’s duties
- A tenant has the duty to
o pay rent;
o to avoid waste; and
o to not abandon the premises by leaving and ceasing to pay rent before the lease ends.
Abandonment
Abandonment occurs if the tenant (1): without legal justification; (2): vacates the premises; (3): with no intention to return; and (4): stops paying rent.
Landlord’s duties
A landlord’s duties include delivering the premises; honoring the implied warranty of quiet enjoyment; and honoring the implied warranty of habitability.
Delivery (most jds require both)
A landlord has a duty to deliver to the tenant (1): actual; or (2): legal possession at the beginning of any lease term.
legal possession
exclusive legal right to possess the property.
actual possession
property is free from any holdover tenants or other wrongful occupiers when the lease begins.
Quiet Enjoyment
Every lease includes an implied covenant of quiet enjoyment which prevents a landlord from interfering with a tenant’s quiet enjoyment and possession of the property.
How does a ll interfere with a tenant’s quiet enjoyment?
By constructively evicting him
Elements and effect of Constructive Eviction
(1): Landlord breached a duty owed to the tenant
(2): That breach substantially interfered with tenant’s right to quiet enjoyment of the premises;
(3): Tenant gave landlord notice of the breach and an opportunity to cure
(4): landlord failed to cure in a reasonable time; and
(5): tenant vacated the premises
Tenant may terminate the lease
Landlord’s remedies upon abandonment
- Acceptance of surrender
- re-lease the premises and recover the difference in rent
- allow the premises to remain vacant and sue the tenant for rent as it becomes due (subject to a duty to mitigate).
What constitutes acceptance of Surrender
Requires more than merely taking the keys back
Express agreement
Re-leasing the premises at same or higher rental rate
substantially reconfiguring the premises so as to change their character
What is the implied warranty of habitability
A warranty of habitability is implied in every residential
lease. The implied warranty of habitability requires that the
landlord provide a place to live (apartment, home) that is
habitable. A property is deemed habitable if it’s reasonably
suitable for human needs (the local housing or public safety
code must be considered for specifics).
What are a tenant’s remedies upon a breach of the implied warranty of habitability?
repair and deduct
stay and sue
withhold or reduce rent
move out and terminate the lease.
does condemnation breach warranty of quiet enjoyment?
No
effect of condemnation of entire property
termination of lease
effect of partial condemnation
lease continues, tenant must pay rent subject to a possible abatement to reflect the diminished value of the property
Assignment
Tenant assigns entire leasehold interest to an assignee
Relationship between assignor and landlord
privity of contract unless landlord agrees to a novation substituting assignor for assignee.
Parties liable to each other for all covenants in the lease.
relationship between landlord and assignee
privity of estate
parties liable to one another for all covenants that run with the land
covenants run with the land if (1): the original parties intend it to do so; and (2): touches or concerns the land (duty to pay rent)
back rent as between assignor and assignee
Assignee is primarily responsible
Assignor is secondarily responsible absent novation.
Sublease
prime tenant leases the premises to a new tenant, or subtenant and retains part of the leasehold interest
relationship between landlord and sublessee/subtenant
none
relationship between prime tenant/subtenant
privity of contract on sublease
liable to each other for all covenants in the sublease but not the prime lease
relationship between landlord and tenant/sublessor/prime tenant
privity of contract on the prime lease
privity of estate
restrictions on assignment and sublease
tenant may freely assign or sublease absent agreement to the contrary.
leases requiring landlord’s consent to assign or sublease (majority rule)
no duty for the landlord to act reasonably in rejecting an assignment or sublease unless there’s an agreement to the contrary
leases requiring landlord’s consent to assign/sublease
duty to act reasonably in rejecting assignment/sublease imposed
Easement in gross
benefits specific owner rather than another parcel of land
doesn’t pass to subsequent landowners under the common law
Easement Appurtenant
benefits another parcel and that parcel’s owner
passes to subsequent landowners so long as the new owner has notice
dominant tenement
tract benefiting from easement
servient tenement
tract burdened by easement
Types of easements
- express grant
- necessity
- implied by prior use
- prescription
easement by express grant
must be in a writing signed by the grantor
must identify the land and the parties involved
must indicate the grantor’s intent to convey the easement.
easement by express reservation
grantor conveys land
retains easement for himself
prescriptive easement
possessor’s use of the land is (1): open and notorious; (2): hostile (without permission); (3): continuous for (4): the statutory period
No need for exclusive use.
easement implied by prior use
tract of land divided by a common owner
pre-existing use by the grantor that benefits the land prior to the division
relatively continuous use
(intermittent use sufficient)
use is reasonably necessary for owner’s use and enjoyment of dominant tenement (measured by money or labor required to substitute for the easement)
easement by necessity
tract of land divided by a common owner.
use of one tract necessary for ingress and egress onto the other from public roadway.
Easement termination
estoppel
termination of necessity
involuntary destruction
condemnation
written release
abandonment (through physical actions)
merger
prescription
Restrictive covenant
an agreement to use or limit the use of one tract of land for the benefit of another tract.
Enforceability of restrictive covenants by successors in interest
a restrictive covenant is enforceable by and against the original parties’ successors if:
(1): the covenant is in writing
(2): intent for covenant to run with land
(3): covenant touches and concerns the land; and
(4): owner of servient tenement takes with notice.
Restrictive covenants and RAP
Restrictive covenants are not subject to the rap.
area variance
exemption from a zoning law which involves physical requirements
use variance
exemption from a zoning law allowing an otherwise prohibited use
Under what circumstances will a variance be granted?
to the extent that it’s consistent with the public interest; or
necessary to prevent undue hardship to the property owner.
Under what circumstances will a variance be granted?
to the extent that it’s consistent with the public interest; or
necessary to prevent undue hardship to the property owner.
nonconforming use
existing use prohibited by a new zoning law
limitation on continuing, nonconforming use
govt may not immediately eliminate nonconforming use.
May instead
- allow continued use in current form but disallow substantial expansion or significant changes
- allow amortization; reasonable fading out of nonconforming use
RAP
No interest in property is valid unless it must vest or forever fail to vest within 21 years after the end of some life in being when the interest is created
RAP and interests retained by the grantor
doesn’t apply
Wait and See Rule
preserves an interest that would otherwise violate the rule either
until it vests; or
the perpetuities period expires
Cy Pres (RAP)
a rule violating RAP will be rewritten to comply with the rule while capturing grantor’s intent as closely as possible.
fixture
an item of personal property that (1): has been annexed to real property; (2): with the intent to make a permanent part of the property
Deed requirements
1): be in writing; (2): be signed by the grantor; (3): identify an existing grantor and grantee; (4): describe the property; and (5): Indicate the grantors present intent to convey the land.
oral conditions added to written deed with no conditions
invalid; delivery will be deemed to occur
requests to delay recording ineffective to defeat grantor’s present intent to convey the land.
Delivery
Grantor gives up control of the deed with intent to make immediate transfer
Delivery to Third Party
effective as delivery so long as grantor relinquishes right to control deed.
delivery conditioned on death
Death escrow allowed so long as deed transmitted to third party and grantor retains no right to retrieve it;
not effective if handed directly to grantee.
deed poll
deed signed by grantor but not grantee;
grantee who accepts is deemed to accept conditions and restrictions on the deed.
general warranty deed
contains the three present covenants and three future covenants of title
special warranty deed
warrants that the seller, himself during his period of ownership (1): has not previously conveyed the property; and (2): there are no encumbrances against the title made by the seller
quitclaim
contains no covenants; as-is deed leaving buyer no right to sue grantor for encumbrances or defects in title
Present covenants
seisin
right to convey
covenant against encumbrances
statute of limitations runs on date of conveyance
future covenants
quiet enjoyment
warranty
further assurances
statute of limitations runs on date of eviction
Seisin
grantor owns the property that deed purports to convey
right to convey
grantor has legal authority to transfer property
functionally identical to seisin
covenant against encumbrances
No encumbrances on the property except those identified in the deed
covenant against encumbrances and open and visible encumbrances
some courts hold that open and visible encumbrances don’t breach this covenant bc parties have factored those encumbrances into their bargain
Covenant of Quiet Enjoyment
no one with superior title will interfere with grantee’s possession and enjoyment of property
covenant of warranty
grantor will defend and indemnify grantee against claims by anyone with superior title
functionally identical to quiet enjoyment
further assurances
grantor will take steps reasonably necessary to perfect grantee’s title
executing appropriate documents
Actual Interference required for breach of future covenants
A future covenant is breached only if someone with superior title actually interferes with the grantee’s possession or enjoyment by asserting a valid claim to any part of the property.
potential claims not asserted don’t breach
no obligation of grantor to defend against invalid or frivolous claims
first in time rule
priority of competing interests in real estate was resolved in favor of the interest that arose first
bona fide purchaser for value
someone who purchases a property interest
for value; and
without actual, constructive or inquiry notice of a prior interest
inquiry notice
aware of facts that would lead a reasonable person to investigate a prior interest.
some courts have held that a quitclaim deed provides inquiry notice because the lack of title covenants makes it suspicious.
