Real Property Flashcards
1
Q
Fee Simple Absolue
A
Largest estate
Can be sold, divided, devised, or inherited
Indefinite or potentially infinite duration
Presumed absent express contrary intent
2
Q
Defeasible Fees
A
Fee simple estate which is terminable
3
Q
Fee Simple Determinable
A
Terminates upon occurrence of stated event Automatic reversion (Possibility of Reverter) "for so long as"; "while"; "during"; or "until"
4
Q
Possibility of Reverter
A
Grantor automatically retains possibility of reverter
Transferable, descendible and devisable
5
Q
Fee Simple Subject to Condition Subsequent
A
Fee simple estate where grantor reserves the right to terminate upon occurrence of a stated event
“upon condition that”; “provided that”; “but if”; and “if it happens that”
6
Q
Right of Entry
A
Accompanies fee simple subject to condition subsequent
Must be expressly reserved
Does not arise automatically
Most say devisable and all say descendible
7
Q
Fee Simple Subject to an Executory Interest
A
Fee Simple terminates upon happening of STATED event
Void per public poilicy if penalizes marriage/encourages divorce
Purpose to support till marriage is ok
8
Q
Fee Tail
A
Estate where inheritability is limited to lineal heirs
Created by words “to A and the heirs of his body”
Most have abolished and will recognize fess simple
9
Q
Life Estate
A
Measured by the live of person or persons
Dower and curtesy can create-largely abandoned (AR still has)
10
Q
Life Estate Pur Autre Vie
A
Life measure by life other than grantee’s
Life estate when life tenant transfers interest
11
Q
Rights & Duties of Life Tenant
A
Entitled to ordinary uses
Cannot injury remaindermen’s interest
12
Q
Types of Waste
A
Affirmative/Voluntary
Permissive Waste
Ameliorative Waste
13
Q
Affirmative Waste of Natural Resourses
A
Generally no
Except when necessary for repair and maintenance; suitable only for such use; or expressly/implied permitted
Open Mines Doctrine: mining may continue if already open
14
Q
Permissive Waste
A
Tenant obligated to preserve land and structures in a reasonable state of repair; pay interests on mortgages; pay ordinary taxes; and pay special assessment for public improvements of short duration
Limited by extent of income or profits
15
Q
Ameliorative Waste
A
Change that benefits property economically
Actionable at common law, but now life tenant can alter or demolish buildings if: market value future interests not diminished and either, remaindermen do not object or substantial and permanent change in neighborhood conditions has deprived property reasonable productively or usefulness
16
Q
Types of Future Interest
A
Reversionary–Possibility of Reverter and Rights of Entry
Remainders
Executory Interests
17
Q
Reversion
A
Reversion is estate left in grantor who conveys less than they own–i.e. a life estate
Reversions are alienable, devisable, and inheritable
VESTED, i.e. not subject to Perpetuities Rule
18
Q
Remainders
A
Future interest in third person which becomes possessory on natural expiration of preceding estate
Must be expressly created
19
Q
Indefeasibly Vested Remainder
A
Vested remainder is one created in an existing ans ascertained person and not subject to condition precedent
Right to immediate possession upon normal termination
Indefeasibly vested remainder is a vested remainder that is not subject to divestment or diminution
20
Q
Vested Remainder Subject to Open
A
Created in a class Certain to become possessory but subject to diminution
21
Q
Vested Remainder Subject to Total Divestment
A
Vested Remainder Subject to Condition Subsequent
22
Q
Contingent Remainder
A
Contingent Remainders are created in unborn or unascertained persons subject to a condition precedent
23
Q
Subject to Condition Precedent
A
Condition precedent must be satisfied before remainderman has right to possession
24
Q
Destructibility of Contingent Remainders
A
At CL destroyed if failed to vest before termination of preceding freehold estate
Most states have abolished–converts to executory interest
25
Doctrine of Merger
one person acquires all present and future interest in land except contingent remainder under CL contingent remainder was destroyed
26
Rule in Shelley's Case
A.k.a--Rule Against Remainders in Grantee's Heirs
CL if same instrument created life estate and gave remainder to heirs remainder was not recognized and A took life estate and remainder
Abolished in Most States
27
Doctrine of Worthier Title
A.k.a. Rule Against Remainders in Grantor's Heirs
Remainder in grantor's heirs is invalid and becomes a reversion in the grantor
Treated as rule of construction--applies only to inter vivos transfers and only if heirs is used
28
Executory Interest
Future interest in third parties either divest transferee's preceding freehold estate or follow a gap in possession or cut short a grantor's estate
Springing if divests grantor's estate
Shifting if divests transferee's preceding estate
Not subject to perpetuities
29
Transferring Remainders
Vested Remainders are fully transferrable
At CL: Contingent Remainders/Executory Interests were not transferable inter vivos
Today descendible and devisable provided survival is not condition
30
Class Gifts
children, nephews, grandkids, kids of the baby momma
| May be vested subject to open or contingent
31
Rule of Convenience: Class Gift Rule
Absence of express contrary intent class closes when some member of the class can call for distribution
32
Trusts
Trust is a fiduciary relationship wherein trustee holds legal title to property subject to enforceable equitable rights in a beneficiary
33
Application of Perpetuities to Trusts
Generally applicable to future interest of beneficiares; note charitable trust exception
34
Charitable Trust Requirements
Must have charitable purpose
Differ in three ways: must have indefinite beneficiaries; may be perpetual; and cy pres doctrine allows alternative charity if purpose becomes frustrated
35
Perpetuities
"No interest is valid unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest."
Interest is void if any possibility might vest beyond 21 years
Look for interest triggered at 25 bday
Only offending interest is striken
36
When Perpetuities Begins to Run
Will--runs from date of the testator's death
Deeds--date of delivery
Irrevocable Trust--date of creation
Revocable Trust--when it becomes irrevocable
37
Interest Exempt from Perpetuities
Except for vested remainders subject to open, does not apply to vested interests
Charity to Charity Exception
38
Common Pitfall Cases in Perpetuities
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Executory Interest following a defeasible fee
Age contingency beyond twenty one in an open class
Fertile Octegenarian (baby in the womb shit)
Unascertainable Widow or Widower
Options to purchase unless current lessee
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39
Bad as to One, Bad as to All
Too remote of a vesting, the whole class gift fails
Class must be closed and all conditions precedent must be satisfied for every member
Gift to Subclass Exception
Per Capital Gift Exception
40
Rule Against Restraints on Alienation
Any restriciton on transferability of legal interest in void
Three types to look for: disabling restraints, forfeiture restraints, and promissory restraints
All fee simple estate restraints are void unless limited time and reasonable purpose
41
Concurrent Estates
Tenancy in Common
Joint Tenants
Tenancy by the Entirety
42
Joint Tenants
Distinguished by right of survivorship
Created only if four unities--time, title, interest possession
All interests must be equal
Modern law requires clear expression of right of survivorship or presumed to be tenancy in common
43
Severance of Joint Tenancy
Voluntary or involuntary conveyance by joint tenant of undivided interest destroys joint tenancy--transferee takes as tenant in common
Judgment liens doe not sever joint tenancy
Mortgages do not sever a joint tenancy
44
Tenancy by Entirety
marital estate akin to joint tenancy
CL arises presumptively in any conveyance to a husband and wife
Death, divorce, mutual agreement or execution by joint creditor of both husband and wife can sever
Individual spouse cannot convey or encumber
45
Rights and Duties Co-Tenants
Each entitled to right to possess all portions of property but no right to exclusive possession
Cannot bring action until ouster
Most states right to retain profits own use, exclusive until ouster or contrary agreement
Must share net rents
46
Effect of Co-Tenant Encumberance
May not encumber interest of other co-tenant
| Mortgage can only foreclose on that tenant's interest
47
Co-Tenant Remedy of Partition
Any co-tenant has right to judicial partion either in-kind or by sale and division of the proceeds
48
Expenses for Preservation
Contribution Right
Co-Tenant paying more than pro rata share of necessary repairs entitled to contribution provided notification to other tenants
No right to cost of improvements unless partiion
Can be demanded for taxes or mortgage payments paid on entire property
49
Duty of Fair Dealing
Confidential relationship exists
50
Leasehold Interests
Estate in land which tenant has a present possessory interest in leased premises and the landlord has a future interest (reversion)
51
Types of Tenancy
Tenancy for Year (Fixed Period)
Periodic Tenancies
Tenancies at Will
Tenancies at Sufferance
52
Tenancy for Year
This is for fixed period
Usually created through written leases
Automatically at its termination date
Breach by tenant provides landlord with right of entry, e.g. terminate lease & obtain possesion
53
Beach of Leasehold Agreement
Failure to pay rent
| Surrender--tenant surrenders and landlord accepts
54
Periodic Tenancies
Continues for successive periods
e.g. month to month
Upon proper notice either party may terminate
55
Creation: Periodic Tenancies
Express Agreement
Implication; or
Operation of Law
56
Tenancies at Will
Tenancy at will is terminable at will of either landlord or tenant
May be terminated at willy by giving notice and a reasonable time to terminate
Similar right will not be in favor of landlord
57
Tenancies at Sufferance
Tenancy at sufferance arises when tenant wrongfully remains in possession after the expiration of a lawful tenancy
Termination last only until landlord takes steps to evict the tenant
58
Hold-Over Doctrine
Applies when tenant continues possession after right to possession
Landlord may: evict; bind new periodic tenancy
Terms and conditions expired apply
Commercial tenants likely new year to year, or period term based on frequency of rent payment if less than year
Residential month to month
59
Hold-Over Exceptions
Remain only a few hours or leaves articles of personal property; delay is not the tenant's fault or seasonal lease
60
Leases
Contract governing landlord tenant relationship
CL: one breached, other could recover damages but still had to perform and could not terminate
Excpetions: Actual and Constructive Eviction Actions; Implied Warranty of Habitability
61
Types of Tenant Waste
Voluntary/Affirmative Waste--intent or negligence for damages & minerals
Permissive Waste-fails to take reasonable steps to protect premises from damages; liable for ordinary wear and tear
Ameliorative Waste-tenatn alters leased property and increased value; tenant liable for cost of restoration; exception if long term tenant and change reflects neighborhood
62
Destruction of Premises: Without Fault Landlord Tenant
CL: Neither party has duty to restore premises in absence of language but tenant must continue to pay
Most states now give tenant option to terminate lease
63
Tenant's Liability for Covenants to Repair
Landlord remains liable for repairs if in lease
Implied Warranty of Habitability
Nonresidential obligated to perform covenants; not liable to rebuild structural damage or casualty destruction unless expressly includes
64
Illegal Purposes Uses
Landlord may terminate lease or obtain damages and injunctive relief
65
Duty to Pay Rent
CL: Due at end of leasehold term
Statutes provide payable at some other time
Landlord not permitted to retain security deposit beyond damages suffered
66
Landlord Remedies
Tenant Fails to Pay Rent; Evict or Sue for Rent
CL: provided cause for damages but not eviction
Modern: provides right to evict ("unlawful detainer")
67
Tenant Abandons
Do Nothing or Reposses
Tenant Unjustifiably Abond the property--landlord duty to mitigate damages through releasing
Tenant liability depends on whether landlord accepted the surrender
68
Landlord Duties & Tenant Remedies
CL: Landlord had no duty to repair or maintain
Duty to Deliver Possession of Premises--actual
Quiet Enjoyment--implied covenant neither landlord nor paramount title holder will interfere with quiet enjoyment and possession of the premises
69
Actual Eviction
Occurs when landlord or hold over tenant excludes tenant from entire premises; terminates obligation to pay rent
70
Partial Eviction
Tenant is physically excluded from part of leased premies
By the Landlord: relieves tenant of obligation to pay rent entire premises
By a Third Party: apportionment of rent
71
Constructive Eviction
Premises Unsuitable for Occupancy
Tenant must prove: landlord breached duty; substantially and materially deprived tenant of her use and enjoyment of the premises; gave notice and reasonable time to repair; and tenant vacated lease
72
Implied Warranty of Habitability
Most jurisdictions imply covenant of habitability into residential leases
Nonwaivable
If breached, tenant may: terminate lease; make repairs and offset the cost w/future rent; abate rent; or remain pay in full and sue for damages
73
Retalitatory Eviction
Many states landlord may not termiante lease or otherwise penalize tenant in retaliation for exercise of legal rights
Presumed retaliatory motive if within 90 to 180 days
Must show valid, nonretalitary reasons for actions
74
Assignment
Complete transfer of tenants rights
75
Sublease
Tenant retains an interest
76
Consequences of Assignment
Assignee stands in the shoes of original tenant, i.e. direct relationship with landlord--"privity of estate"
Each liable on all covenants in lease that "run w/land"
77
Covenants Running with the Land
"Touches and concerns"
| Benefits landlord and burdens the tenant or vice versa with respect to interest
78
Consequences of Sublease
Sublessee Not in Privity with Landlord
Sublessee is tenant of original lessee and usually pays rent to original lessee
Sublesse not personally liable to landlord for rent or for performance of any covenants in main lease unless sublessee expressly assumes the covenants
79
Landlord Remedies
Landlord may terminate main lease for nonpayment of rent or breach of covenant stats or power given by statute
80
Rights of Sublessee
Sublessee cannot enforce covenants made by landlord in main lease, except residential sublessee may be able to enforce implied warranty of habitability
81
Covenants Against Assignment or Sublease
Lease covenants restriction assignment and sublease strictly construed against the landlord
Waiver: aware of assignment and did not object
82
Assignments by Landlord
May assign rents and reversions
Usually done by deed
Tenants consent is not required
83
Liabilities of Assignee to Tenants
Burden of covenants which touch and concern runs with landlord's estate to assignee; assignee liable for performance of covenants
84
Concealed Dangerous Condition
Latent Defect
Landlor knows or should know of dangerous condition tenant could not discover by reasonable inspection, the landlord must disclose
Otherwise liable for any injuries resulting from condition
Tenant accepts after disclosure they assume risk for herself and others
85
Public Use: Landlord Liability
Landlord liable for injuries to members of public if at time of lease he knows or should know of a dangerous condition; has reason to believe tenant may admit public before repairing condition; and fails to repair condition
86
Furnished Short Term Residence
Landlord rents fully furnished premise for short period apply a heightened duty
Landlord liable for injuries resulting any defect whether know or not
87
Negligent Repairs by Landlord
Landlord has no duty to make repairs, landlord who attempts to repair is liable if injury results due to negligent repairs or provide deceptive appearance of safety
88
Modern Trend--General Duty of Reasonable Care
Many courts now hold that landlord owes general duty of reasonable care toward residential tenants and will be held liable for injuries resulting from ordinary negligence if notice and opportunity to repair
89
Defects After Tenant Possessess
Landlord not liable for defect arising after tenant takes possession unless knew or should have known
90
Legal Duty to Repari
Landlord has statutory duty to repair
91
Tenant's Liability
Tenant owes duty to third persons in accordance with Duties of Landowners from Torts
92
Fixture
Fixture is chattel affixed to land and become realty
Passes with ownership of the land
Note: Chattels Incorporated into Structure, e.g. keys
93
Common Ownership Cases
Person brings chattel to land owns both the chattel and land
Item is fixture if objective intention of party that made the annexation to make part of realty
Determined by : nature of the article; manner of attachment; amount of damage caused by removal; and adaptation of item to realty
94
Divided Ownership Cases
Accession describes annexor's intent to make chattels permanent part of real estate
Landlord Tenant: agreement controls; absent agreement presumed to lack intent to permanently improve; must be removed by end of lease term and tenant liable for repairs
95
Third Party Cases
Third Party Lien on Chattel Affixed to Land
Seller retains security interest in chattel and landowner mortgages land
Landowner defaults both chattel and mortgage payments, general rule, "first in time, first in right."; but note UCC Fixture Filing
96
Easement
Nonpossessory interest in land creating right to use land possessed by someone else
Presumed perpetual duration unless specific limitation
97
Types of Easements
Most easements are affirmative, holder entitled to make affirmative use of servient tenement
Negative easements entitle holder to compel possessor of servient tenement to refrain engaging activity on servient estate
98
Easement Appurtenant
Benefits holder in physical use or enjoyment of another tract of land
Must be two tracts: dominant tenement and servient tenement
Easement Appurtenant passes with transfer of benefited land regardless of whether mentioned in conveyance
99
Easement in Gross
Holder of easement in gross acquires right to use servient tenement independent of possession of another tract, e.g. benefits holder not tract
Not transferable, unless serves economic or commercial interests (billboards)
100
Creation of Easement
Express grant or reservation, implication and prescription
Express Grant--must be memorialized in writing and signed by holder of servient easement unless duration is brief enough; must comply with all formal requisites of deed
Express Reservation--arises when grantor conveys tilte but reserves right to continue use of tract for special purposes
101
Implication Easement
Three Types: Existing Use; Implied without Existing Use; and Necessity
Existing Use--may be if prior to division, apparent and continuous use exists of servient, reasonably necessary for dominant, and intent
Without--Subdivision or Profit a Prendre (easement for mineral extractions
Prescription--Adversely possessed by open and continuous adverse use which was continuous and uninterrupted for a statutory period.
102
Termination of Easements
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Stated Conditions
Unity of Ownership/Merger
Release
Abandonment--physical action with intent to permanently abandon
Estoppel
Prescription
Necessity
Condemnation and Destruction
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103
Termination of Licenses
License is not an interest but a privilege, revocable at will
Inalienable by Licensee
104
Irrevocable Licenses
Estoppel or Licenses Coupled with an interest
105
Real Covenant
Burdens Land
| Written promise to do something on the land
106
Requirements for Burden to Run
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Intent--inferred from circumstances
Notice--actual, inquiry or record
Horizontal Privity
Vertical Privity
Touch and Concern--restrict holder of servient estate in using land
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107
Requirements or Benefits to Run
Three requirements: Intent, Vertical Privity, & Touch and Concern
108
Specific Situations Involving Real Covenants
Pay money and not to compete run with the land
109
Termination
Written Release; Merger; or Condemnation of Burdened Property
110
Equitable Servitudes
Regardless of whether runs with the land, equity will enforce against assignees of burdened land with notice of covenant
Injunction usually appropriate
111
Creation of Equitable Servitudes
Created by covenants contained in writing that satisfies Statute of Fraud
One Exception: Implied Common Scheme for Development
112
Common Scheme
Reciprocal negative servitudes will be implied if at time of sales developer had a plan that all parcels would be subject to restriction.
Evidenced by recorded plat, general pattern of restrictions or oral representations to early buyers
113
Requirements for Burden to Run
Successor bound if covenanting parties intended that servitude be enforceable by and against assignees; promisor has actual, inquiry, or record notice, and touches and conerns
114
Requirements for Benefit to Run
Benefit of Equitable Servitude runs with the Land and enforceable by promissee successors if intended and touches and concerns
115
Equitable Defenses to Enforcement: Equitable Servitude
Will not enforce if unclean hands; acquiesced; estoppel; laches; or neighborhood has changed
116
Termination of Equitable Servitudes
May be extinguished by written release from benefit holders; mergers; or condemnation of burdened property
117
Party Walls and Common Driveways
Each owner owns to extent rests on land; will imply mutual cross easements of support
Each has right to use and cannot destroy
118
Creation of Wall and Common Driveway
Statute of Frauds for Creation of Party Wall or Common Driveway
Can also arise from implication or prescription
119
Adverse Possession
Title may be acquired by adverse possession; must show actual entry giving exclusive possession, which is open and notorious, adverse/hostile; and continuous throughout statutory period
Co-Tenants must oust other co-tenants
120
Continuous Possession
Intermittent periods are not sufficient
121
Disability Effect on Adverse Possesion
Does not begin to run if true owner was under some disability to sue when cause of action first accrued
122
Conveyancing
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Land Sale Contract
Deeds
Delivery and Acceptance
Covenants for Title and Estoppel by Deed
Recording
Conveyance by Will
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123
Land Sale Contract
Precede Transfers
| Statute of Frauds Applies
124
Doctrine of Equitable Conversion
Once sgined, equity regards buyer as owner of real property
Seller's Interest: considered personal property
Risk of Loss: buyer if without fault
Passage of Title on Death: Seller's interest passes as personal property and buyer's interest passes as real property
125
Marketable Title
Implied covenant that seller will provided marketable title at closing
Defects in Chain of Title render unmarketable
Title acquired by adverse possession is unmarketable
126
Encumberances
Mortgages, liens, restrictive covenants, easements, and significant encroachments render title unmarketable
Easement that is beneficial, visible or known to buyer does not impair marketability
127
Zoning Restrictions
Do not affect marketability
128
Time of Marketability
Seller agreed to furnish title date of closing, buyer cannot rescind prior to date on grounds title is not marketable
129
Remedies of Unmarketability
Buyer must notify seller
Seller has reasonable time to cure
Failure to cure: rescission, damages, specific performance with abatement, and quiet title suit
130
Time of Performance
Time of Essences--must be fulfilled by that date
131
Tender of Performance
Obligated to pay and convey are concurrent conditions
| Excused if repudiated contract or impossible for party to perform
132
Remedies for Breach of Sales Contract
Nonbreaching party entitled to damages for land--specific performance
All land is unique
Buyer will likely get abatement for breach
133
Earnest Money
A form of liquidated damages
| Court will uphold
134
Seller's Liabilities for Defective property
Warrant of Fitness/Quality--New Construction Only
| Negligence Builder
135
Sale of Existing Land and Buildings--Liability for Defects
Theories:
Misrepresentation (Fraud)--knowingly or negligently made a false statement of fact to buyer if buyer relied on statement and materially affect the value of the property
Active Concealment--seller liable for defects even without making any statements if took steps to conceal the defects
Failure to Disclose--Most states hold seller liable for failure to disclose defects, they know or have reaso to know, defect is not apparent, and seller knows unlikely to discover upon ordinary inspection; and defect is serious and would probably cause buyer to reconsider purchase if known
136
Disclaimers of Liability
General disclaimer in sales contract not sufficient to overcome seller's liability for fraud, concealment, or failure to disclose
If identifies specific type of defects will likely be upheld
137
Title Insurance
Owner's Policy--protects person who owns policy
| Lender's Policy--follows assignment of mortgage loan
138
Deeds Formalities
Must be in writing, signed by the grantor, and reasonably identify the parties and land
May be validly conveyed by inter vivos gift so long as donative intent, delivery, and acceptance
139
Defective Deeds
Void deed will be set aside even if passed to BFP
| Voidable deed will be set aside only if property not passed to BFP
140
Fraudulent Conveyances
Even if deed complies with required formalities, may be set aside if made with actual intent to hinder, delay or defraud any creditor of the grantor, or without receiving a reasonably equivalent value in exchange for transfer and debtor was insolvent or insolvent as result of transfer
141
Description of Land Conveyed
Description is sufficient if provides good lead to identified property
Parol Evidence generally admissible to resolve patent or latent ambiguities
Rules of Construction: hierarchy from natural monuments, artificial monuments, courses, distances, name, and quantity
142
Deed Reformation
Deed will be reformed if does not represent agreement because of mutual mistake, scrivener's error, unilateral mistake caused by misrepresentation or other inequitable conduct
143
Delivery and Acceptance
Deed not effective unless it has been delivered and accepted
Generally: refers to grantor's intent to make deed presently effective even if possession postponed; parol evidence may be used
Retention of Interest: indicates lack of intent to pass title; dies but does not delivery no title passes; failure to record does not affect passage of title
144
Delivery with Instruction to Third Party
Grantor gives deed to third party with instructions there is a valid delivery
Grantor gives deed to third party without instructions validity depends on whether third party could be grantor's agent, if so no delivery
145
Transfer to Third Party with Conditions
Valid conditional delivery occurs when grantor gives deed to third party with instructions to give grantee
Parol Evidence is Admissible to show delivery is conditional
Grantor may revoke if condition not yet occurred and no enforceable written contract to coney
Breach of Escrow Conditions
Relation Back Doctrine
146
Acceptance
Required in order to complete conveyance
Mostly presumed
Relates back to date deed delivered into escrow
147
Dedication
Transfer to public land
148
Covenants for Title and Estoppel by Deed
Three Types
General Warranty Deed
Special Warranty Deed
Quitclaim Deed
149
Covenants in General Warranty Deed
Covenants of Seisin--title and possession
Covenant of Right to Convey--authority to make grant
Covenant Against Encumbrances
Covenant of Warranty
Covenant for Further Assurances
150
Breach of Covenants
Three are breached at time of conveyance--Seisin Right to Convey, Against Encumbrances)
Three breached at time of disturbance of grantee's possesion--Quiet enjoyment, warranty, and further assurances
151
Damages and Remote Grantees
May sue anyone up the line
152
Quitclaim Deed
whatever interest grantor has
153
Statutory Special Warranty Deed
Grant creates by implication two limited assurances against acts of grantor:
grantor has not conveyed same estate or interest therein to anyone other than grantee and estate free from encumbrances made by grantor
154
Estoppel by Deed
Grantor conveys estate shown they do not own subsequent acquisition of estate will automatically inure benefit of grantee
Applies if warranty deed or deed purported to convey a particular estate
155
Recording
CL: grantor conveyed property twice grantee first in time generally prevailed
Recording Act--generally protects all BFPs from secret interests
Proper recording gives constructive notice of first conveyance to everyone so there can be no subsequent BFPs
156
Types of Recording Acts
Three Major Types
Notice Statutes--Subsequent BFP prevails over a prior grantee who failed to record; cannot have actual or constructive notice at time of conveyance
Race Notice Statutes--subsequent BFP protected only if takes without notice and records before prior grantee
Race Statutes--Whoever records first wins
157
Who is protected by Recording Acts
Only BFPs are protected from claims of prior transferee under notice and race notice statutes
BFP--purchaser for value without notice and pay valuable consideration
158
Shelter Rule
Transfer from BFP
| Person who takes from BFP will prevail against any claim a BFP would prevail against
159
Purchaser Under Installment Land Contract
Most states, purchaser under installment land contract protected only to extent of payment made
May recover share of property as tenant in common equal to proportion of payments made; lien extent amount paid; or entire property subject to lien on property to extent balance still owed
160
Without Notice
Means purchaser had not actual constructive or inquiry notice
161
Actual notice
Knowledge
162
Record Notice
Chain of title needs to be recorded in manner such that searcher could reasonably find it
Wild Deed--recorded but not connected to chain of title
Deeds Recorded Late--recorded after grantor shown to have parted title through another; not constructive notice
163
Inquiry Notice
Charged with knowledge of whatever inquiry would have revealed
164
Title Search
Tract Index--page indexed by block and/or lot describing the property and any instruments effecting
Grantor and Grantee Index--search by grantee grantor index
165
Effect of Recordation
Raises presumption of valid delivery and authenticity
166
Conveyance by Will & Related Concepts
Ademption--testator no longer owns gift fails; Specific Bequests Only
Exoneration--CL entitled to have land exonerated by payment of liens and mortgages from testator's residuary estate
Lapse and Anti Lapse--beneficiary dies before testator, gift void; anti-lapse prevents this result
Abatement--residuary back up to specific devises
167
Crops
conveyance generally includes
168
Security Interest in Real Estate
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Five Types
Mortgage
Deed of Trust
Installment Land Contract
Absolute Deed
Sale Leaseback
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169
Mortgage
Debtor/notemaker is morgagor; lender is morgagee
| Default lender can realize on mortgaged real estate by having judicial foreclosure sale
170
Deed of Trust
Debtor/notemaker is the trustor
Provides deed of trust to third party trustee
Default trustee forecloses on deed of trust by sale
171
Installment Land Contract
Obtains legal title only when full contract price been paid
| Forfeiture Clauses are common
172
Absolute Deed
Given for security purposes, can be treated as equitable mortgage
173
Sale leaseback
Landowner sells property for cash and lease it back from purchaser for long period of time
174
Transfers by Mortgagee and Mortgagor
Note and mortgage must pass to same person
175
Transfers by Mortgage Without Note
Mortgage automatically transfers note as well, unless mortgagee-transferor expressly reserves rights to note
Transferee can file equitable action and compel transfer of note as well
176
Transfer of note Without Mortgage
Note can be transferred without mortgage but mortgage will automatically follow properly transferred note
No separate written assignment is necessary
177
Methods of Transferring the Note
Negotiable in Form;
Indorsed and Signed by named payee;
Delivered;
Transferee takes note in good faith and pays value for it
178
Transfer by Mortgagor--Grantee Takes Subject to Mortgage
Assumption--transferee becomes primarily liable, while original mortgagor is seconarily liable as surety
Mortgagee may sue either grantee or original morgagor on debt
Unsigned agreement original liable and grantee not personally liable
179
Due on Sale Clauses
Appear in most modern mortgages
| Demand full payment if mortgagor transfers any interest in property without consent
180
Possession Before Foreclosure
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Theories of Title--right to take possession before foreclosure depending on theory; three types:
Lien
Title
Intermediate
Most states use n
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181
Lien Theory of Title
Mortgagee is considered holder of security interest only and mortgagor deemed owner of land until foreclosure
Mortgagee may not have possession before foreclosure
182
Title Theory
Legal title is in the mortgagee until mortgage has been satisfied or foreclosed and morgagee is entitled to possession upon demand at any time
183
Intermediate Theory
Legal title in mortgagor until default and upon default legal title is in the mortgagee
Little practical difference between theory and title
184
Foreclosure
Almost all states allow
Sale to satisfy debt in whole or part
States allow judicial sale, some allow nonjudicial sale under power of sale
185
Redemption
Redemption in Equity--any time prior to foreclosure sale mortgagor may redeem property by paying amount due; if acceleration clause full balance note must be paid to redeem
Statutory Redemption--Half of states allow mortgagor to redeem property for some fixed period after foreclosure sale
186
Priorities
"First in time, first in right"--general rule
Modification--operation of recording statute if prior mortgagee fails to record; subordination agreement between senior and junior; purchase money mortgage; modification of senior mortgage; or granting optional future advances
Purchase Money Mortgages--Mortgage given in exchange for funds used to purchase property; given either as part of purchase price or third party lender and have priority over mortgages, liens, and other claims that arise prior to mortgagor's acquisition of title
187
Installment Land Contracts
Provided for forfeiture rather than foreclosure
Courts will use following theories to avoid harsh result:
Equity of Redemption
Restitution
Treat as Mortgage
Waiver
Election of Remedies
188
Rights Incident to Ownership of Land
Natural Rights and Minerals
Generally owner has exclusive right to use and possess surface, airspace, and soil
Rights to Lateral and Subjacent Support of Land--right to have land supported in natural state; landowner strict liable if excavation causes or negligent
189
Water Rights: Riparian Doctrines
Natural Flow Theory--action which results in substantial or material diminution is enjoinable
Reasonable Use Theory--Most common and everyone entitled to reasonable use
Natural prevails over artificial
190
Rights to Exclude
Trespass
Private Nuisance
Continuing Trespass
Ejectment or Unlawful Detainer
191
Cooperative and Condos
Cooperative--corporation leases individual apartments to its shareholders
Condos--owns interior of unit plus undivided interest in exterior and common areas
192
Zoning
may enact for health, safety, morals, and welfares
Nonconforming use--amortization effect
Special Use--must be obtained even though zoning proper for intended uses
Variance--departure from literal restrictions granted by administrative action
193
Unconstitutional Takings and Exactions
Zoning ordinance may reduce value of real property that constitutes taking under Fifth and Fourteenth Amendment
Denial of All Economic Use--taking
Denial of Nearly All Economic Use--Balancing test; look at social goals, diminution in value, and whether substantially interferes with distinct, investment backed expectations
194
Unconstitutional Exactions
Must be rationally connected to project and reasonably relate to nature and extent of impact (rough proportionality)
