Real Property

Question 1

Adverse Possession

Answer 1

1. Open and Notorious (if it would put a reasonable person on notice that it was occurring)
2. Actual and Exclusive (if only the possessor (or their agent or tenant) occupies and uses the property)
3. Hostile (lack of the owner’s permission or consent)
4. Continuous (constantly being used for the purpose and in the manner reasonably and normally intended)
5. For the statutory period

NO adverse possession against the govt, BUT govt can adverse possess your (private) property

Question 2

Fee Simple

Estates in Land

Answer 2

O to A
OR
O to A and his heirs

A disabling restraint on alienation—one that grants a fee simple but then bars transfer of the fee simple—is invalid and unenforceable.

Question 3

Life Estate

Estates in Land

Answer 3

A life estate is followed by either a reversion or a remainder. A life estate per autre vie only lasts as long as the life of the other.

life tenant is responsible for paying property taxes and the interest on mortgages, so long as there is either income from the land or to the extent of the land’s reasonable rental value

Question 4

Remainder

Answer 4

Contingent Remainder
the remainder must fulfill a condition
* “To John, if he attains the age of 21.”

Vested Remainder
no condition
* “To John and his heirs.”

ONLY FOLLOWS LIFE ESTATE

Question 5

Fee Simple Determinable

Estate in Lands

Answer 5

“to A so long as the property is used as a … (i.e. park),” and is followed automatically by a possibility of reverter in the grantor.

Reverter is a legal term that refers to the return of real property to the original owner after all interests in the property have terminated.

if not followed by an estate in the grantor, but instead is followed by an estate to a third party, the interest in the third party is an executory interest.

Question 6

Fee Simple Subject to Condition Subsequent

Answer 6

“to A, but if the property is no longer used as a … (i.e. park), then to O,” and is followed by a right of re-entry in the grantor—which must be affirmatively exercised.

if not followed by an estate in the grantor, but instead is followed by an estate to a third party, the interest in the third party is an executory interest.

Question 7

Merger

Answer 7

Under the doctrine of merger, if the same person acquires both the present and all future estates (such as a life estate and a remainder), they merge into fee title. But if the duration of the estates differ, there is no merger.

if A receives an easement over Whiteacre and then a life estate in Whiteacre, the life estate is of limited duration and cannot merge with the easement, which is of unlimited duration.

Question 8

Class Gifts (Rule of Convenience)

Answer 8

absent a contrary intention in the instrument to include all members of a class whenever born, the class closes when some member of the class can call for distribution of her share.

purpose is to provide certainty and avoid the rule against perpetuities

Question 9

Rule Against Perpetuities

Performance Test/MBE

Answer 9

Future interest must vest, if at all, within the lives in
being plus 21 years.

Applies ONLY to:
* Contingent remainders, executory Interests, class gifts, options and rights of first refusal, and powers of appointment

Validity of the interest is determined at the time the
interests are created
* Will – date of T’s death
* Revocable trusts – date the trust becomes irrevocable
* Irrevocable trusts – date created
* Deeds – Date the deed is delivered with intent to pass title

“To A and his heirs so long as the property is operated as a school, and then to B and his heirs.” Since the property could be operated as a school for 100 years, the property might not go to an heir of B until 100 years from now, and their parents might well not yet be born at the time of the gift. Thus, an indefinite fee simple determinable or fee simple subject to condition subsequent that divests one individual or line in favor of another individual or line other than the grantor’s estate likely violates the rule.

Question 10

Joint Tenancy

Concurrent Estates

Answer 10

Joint tenants must take their interest:
1. At the same TIME
2. By the same TITLE (in the same instrument),
3. IDENTICAL equal INTEREST, and
4. Identical right to POSSESS the whole.
and is there right of survivorship.

severance of joint tenant results in tenancy in common

Question 11

Tenancy in Common

Concurrent Estates

Answer 11

Unity of Possession (2 or more own with NO right of survivorship

Question 12

Severance of Joint Tenancy by Mortgage

Answer 12

MAJORITY—LIEN THEORY STATES
R: liens and mortgages do not sever a joint tenancy on creation of the lien or mortgage.
* joint tenants remain joint tenants
* If the mortgaging joint tenant dies, the surviving joint tenant gets the property free of the mortgage, and the lender has nothing, which is why lenders generally require all the joint tenants to sign the loan documents and mortgage instrument.

MINORITY—TITLE THEORY STATES
R: mortgage will sever a joint tenancy on execution.
* former joint tenants now become tenants in common with each other.
* On death of mortgaging joint tenant, heirs take tenancy in common interest subject to the mortgage

Discuss state of the title under both the majority and
minority rules, unless the essay identifies which jurisdiction
applies

Question 13

Rights and Liabilities of Co-Tenants

no essay really

Answer 13

1. Each co-tenant has a right to possess all of the property, but a co-tenant out of possession cannot bring a possessory action, or claim that a possessing co-tenant owes them rent, unless the possessing co-tenant has caused an ouster of the co-tenant out of possession (a wrongful exclusion from possession)—usually by the possessing cotenant claiming a right of exclusive possession. As noted earlier, co-tenants cannot adversely possess against other co-tenants absent an ouster.
2. In most jurisdictions, a co-tenant in possession has the right to retain profits gained by her use of the property, and there is no need to share those profits with other cotenants or reimburse them for rent, absent a written agreement to the contrary, or if the profits are from uses that deplete the property’s value (such as mining).

Question 14

Right of Non-Occupying Co-Tenants

Answer 14

(3) Co-tenant out of possession has the right to pro
rata share in rents from 3rd parties and in profits from uses that deplete the property’s value
(4) Co-tenant in sole possession who pays for
necessary repairs has right to reimbursement (some states require giving of notice before repairs made)
(5) No reimbursement for improvements
(6) Co-tenant in sole possession who pays taxes and mortgages is only entitled to reimbursement in the amount that exceeds the rental value of the property

Question 15

Landlord/Tenant

Answer 15

(1) Type of Tenancy
(2) Type of Lease
* Term of Years = defined start and end date (notice required, often longer than 30 days)
* Periodic = including month to month, undefined end date/automatic renewal (30 day notice in writing for termination)
* Holdover = if the tenant stays beyond the term of the lease by consent of the landlord. (30 day notice in oral or written notice)

(3) Failure to Pay Rent
* If a tenant wrongfully terminates the lease and breaches their duty to pay rent, the landlord does have a duty to mitigate by attempting to reasonably re-let the premises.

(4) Defenses to Pay Rent
* The landlord’s failure to mitigate is a defense to the nonpayment of rent.
* Landlord’s Implied/Express Covenants
* Tenant’s Covenants

(5) Assignment
1. Whether the lease can be assigned
* Absent an express restriction in the lease, T is free to transfer their leasehold interest in whole or in part
2. whether the lease was assigned
* An assignment assigns the entire leasehold estate—it is a complete transfer of all the leased premises for the remaining term. However, absent a novation, both the assignee and assignor remain liable on the covenant to pay rent, because the assignor, having signed the original lease, is in privity of contract with the landlord, and the assignee, who is now in possession, is in privity of estate, unless the landlord and new tenant execute an assumption of the lease.

ORDER OF DISCUSSION:
1. Type pf tenancy (keep brief)
2. Type of Lease
2. Failure to Pay Rent?
3. Defenses to pay rent
4. Issues from Assignment

Question 16

Subleases

Answer 16

If the tenant retains any part of the premises or any of the remaining term, he has made a sublease, and not an assignment.

A sublessee is not liable to the landlord for rent, but if the rent is not paid to the landlord, the landlord can terminate the sublease and evict the sublessee.

Question 17

Duty to Pay Rent

Landlord/Tenant

Answer 17

landlord has the right to receive rent for the term

Term of Years
Failure to pay rent: tenant owes rent for the entire remaining term, less only what the landlord could reasonably have released the property for

Periodic Lease
Written notice of 30 days required; Failure to properly terminate a periodic tenancy results in the tenant owing rent for the additional period.

Question 17

Fixtures

Landlord/Tenant

MBE

Answer 17

A fixture is something affixed to the property such that removal would cause substantial damage to the property. A **tenant cannot generally remove a fixture, absent a written agreement to the contrary. **

However, if the fixture is a trade fixture—equipment used in the tenant’s trade or business—it can be removed without agreement.

Question 18

Duty to Deliver Possession

Landlord Implied Covenants

automatically runs when a lease is assigned/MBE

Answer 18

includes timely possession

Question 19

Implied Covenant of Quiet Enjoyment

Landlord Implied Covenant

automatically runs when a lease is assigned

Answer 19

The implied covenant of quiet enjoyment applies in all leases, and can be breached by actual or partial physical eviction, or by constructive eviction.

Constructive Eviction
* Landlord breaches a duty set out in the lease
* Breach substantially and materially deprives the tenant of use and enjoyment of premises
* Tenant gives notice and reasonable opportunity to cure, OR Landlord refuses to repair
* REMEDY = move out and terminate the lease if done timely, but is otherwise waived if there is no timely move-out.

Actual and partial eviction involve the landlord physically excluding the tenant from part or all of the premises

Question 20

Implied Warranty of Habitability

Landlord Implied Covenant

automatically runs when a lease is assigned

Answer 20

Applies only to residential leases

Property is reasonably suitable for human residence

Tenant gives notice and reasonable opportunity to cure, OR Landlord refuses to repair

REMEDY:
* move out and terminate lease,
* make repairs and deduct expenses from rent,
* Sue for damages,
* reduce rent in amount reduced by issue

Question 21

Tenant’s Implied Covenants

Answer 21

1. the tenant’s covenant to pay rent (the breach of which gives rise to the right to terminate the lease and to evict),
2. the tenant’s covenant to repair damage they cause, and
3. the tenant’s covenant not to commit waste.

Question 22

Express Covenant that Run with the Leae

Answer 22

Express when given specific lease language about either party’s obligations under the lease

Only relevant to Assignments

ONLY Two requirements for a lease covenant to run
1. Intent
2. Touch and Concern

Question 23

Breach of Express Covenant

Answer 23

TRADITIONAL RULE
express covenants in a lease are independent of each other, with the exception of the covenant to pay rent. Thus, if the landlord or tenant breaches an express covenant other than the covenant to pay rent, the breaching party may owe damages, but the non-breaching party is not excused from performance—particularly not from the duty to pay rent. But if the covenant to pay rent is breached, the landlord can evict the tenant or refuse to renew the lease even if the landlord has breached other express covenants

MODERN RULE
all the express covenants are dependent. If the breach of a landlord’s express covenant is a material breach, that may be grounds for the tenant to terminate the lease and claim damages; the tenant may not refuse to pay rent unless they terminate the lease and move out timely.

DISCUSS BOTH

Question 24

Enforcing Express Covenant

Answer 24

enforce the covenant by specific performance or injunction

P must show:
* intent
* notice (for burden to run)
* touch and concern

Question 25

Waste

Answer 25

Waste is an act by someone in rightful possession of property that does permanent injury to the land, harming the interest of someone entitled to future possession.

• VOLUNTARY = deliberate destructive acts
• PERMISSIVE = acts of omission or neglect
• AMELIORATIVE = acts that alter the property but result in an increase in value (e.g., turning a warehouse into a store, razing dilapidated buildings and constructing a new high-rise, or installing new plumbing)

Question 26

Easement

Answer 26

right to use land for a particular purpose, but no right to possession or enjoy that land.

(1) METHOD OF CREATION

EXPRESS
* direct grant of the easement, preferably with a deed

BY IMPLICATION
* if there was a prior use over a period of time amounting to consent.
* must be apparent and continuous at the time the tract is divided (so it only has to exist at the time the parcel is divided, not before), and it must be reasonably necessary to the enjoyment of the dominant parcel, considering factors such as cost and difficulty of the alternatives, and whether the price paid reflects continued use of the easement.

BY NECESSITY
* Where the two parcels were under common ownership at one time AND no prior use (no use prior to the necessity arising) AND the party asserting the easement owns landlocked property with no access to
a public road

BY PRESCRIPTION
* easement created by adverse possession, except requirement of exclusive possession

(2) TYPE

APPURTENANT (geographic)
* where the holder of one parcel—the dominant tenement—holds and is benefited by the easement burdening a different parcel over which it runs—the servient tenement.
* automatically transfers with the transfer of the dominant estate.

IN GROSS
* holder is not the owner of another parcel, but just has rights of access irrespective of their ownership of nearby or adjacent property
* does not transfer between successive owners of the easement unless it is for commercial purposes.

Both an easement appurtenant and in gross automatically run with the transfer of the servient estate, unless the servient estate is transferred to a bona fide purchaser without notice (including actual, constructive, or inquiry notice).

Easements are terminated either in writing, or orally plus an action of abandonment. However, the owner of the servient estate cannot unilaterally terminate an easement for overuse—she can only seek an injunction against the overuse.

If there’s an express easement, no need to discuss the rest of the 3
If there’s no express easment, then discuss the 3 (implication, necessity, and prescription)

Question 27

Profit

Answer 27

right to take specific things, such as timber, from the land.

Question 28

License

Answer 28

The failure of an express easement because it is oral (not in writing) may result in a license.

A license is generally revocable at will, but a license is irrevocable only if the licensee invests substantial amounts of money or labor in reliance on the license—in that case, the owner is estopped to revoke the license, which becomes the equivalent of an easement.

Question 29

Covenants

Does the covenant run with the land?

Answer 29

For the Burden of Covenant to run against burdened owner who must perform the covenant: (ALL present)
* Writing
* An intent
* Notice – Actual, Constructive, or Inquiry
* Horizontal Privity
* Vertical Privity
* Touch and Concern the land

For the Benefit of Covenant to run in favor of benefited owner (other than an owner who originally covenanted):
* Writing
* Intent
* Vertical Privity
* Touch and Concern the land

• binding promises regarding the use of the land

Question 30

Equitable Servitude

Answer 30

For burden to run, servitude must be in writing, and only need to show that the burdened party has:
* Notice
* Intent
* Touch and Concern the land

For benefit to run, servitude must be in writing, and only need to show that the benefited party has:
* Intent
* Touch and Concern

Question 31

Deed/Conveyance

Answer 31

To be a valid conveynace, a deed must be:
1. Executed
2. Delivered (by recordation or delivery to grantee or grantee’s agent)
3. Accepted

deed must contain words of intent, such as “grant” or “convey,” it must adequately describe the property, by address, or metes and bounds, or tract and parcel number, or something similar, and any oral conditions are generally not enforced.

However, in a small minority of states, an oral condition, other than the grantor’s death, will be enforced.

A deed does not require consideration to be valid

Question 32

Quitclaim Deed

Answer 32

conveys only what the seller has, but does not affect the implied warranty of marketable title in a real estate contract

Question 33

Marketable Title

Buyer’s defense to specific performance/suit for breach against buyer

Answer 33

Marketable title is title reasonably free from doubt—title that a reasonably prudent buyer would be willing to accept.

Marketable title need only be delivered at closing, not before.

Title is not marketable if there is an undisclosed encumbrance or a condition that gives rise to a threat of litigation.

Examples include zoning violations, but not zoning restrictions and generally not building code violations.

title by adverse possession is NOT marketable title

Question 34

Warranty Deed

CA - Grant Deed

Answer 34

Present Covenants (breached at time of
conveyance)
(1) Seisin (title and possession)
(2) Right to convey
(3) Against encumbrances (other than those recorded prior and appearing on the preliminary title report)

Future Covenants (breach at the time of the claim
against the title, if any)
(1) Quiet Enjoyment (grantee will not be disturbed in possession by a lawful claim of title)
(2) Warranty (grantor agrees to defend grantee’s title and compensate the grantee for loss as a result of an undisclosed superior title)
(3) Further Assurances (to perform whatever further acts are necessary to perfect title in the grantee)

contains 6 covenants

Question 35

Race Statute

Recording Statutes

Recording statutes protect BFPs, including lenders who take
a security interest, but not recipients of gifts, and they do
not apply to or protect judgment creditors

Answer 35

Whoever records first wins

no requirement that prevailing party be a bona fide purchaser

Question 36

Notice Statute

Recording Statutes

Recording statutes protect BFPs, including lenders who take a security interest, but not recipients of gifts, and they do not apply to or protect judgment creditors

Answer 36

a** subsequent BFP** (a person who** gives adequate consideration**) who has no actual, constructive [record], or inquiry notice of the prior instrument prevails over a prior grantee who failed to record

a BFP has no actual, constructive [record], or inquiry notice of the prior instrument, so statutes that refer to a BFP are at a minimum notice statutes.

Question 37

Race-Notice Statute

Recording Statute

Recording statutes protect BFPs, including lenders who take a security interest, but not recipients of gifts, and they do not apply to or protect judgment creditors

Answer 37

a subsequent BFP who has no notice who also records before the prior grantee prevails over a prior grantee who failed to record.

So in a race-notice jurisdiction, a subsequent grantee who has notice cannot prevail just by recording first.

Subsequent purchasers who take property, but have actual or inquiry notice, take subject to the prior unrecorded interest under both the notice and race-notice statutes.

Question 38

Mortgage

MBE

Answer 38

• It is the conveyance of a security interest in land,
  intended by the parties to be collateral. Debtor =
  Mortgagor, Creditor = Mortgagee
• It’s a debt and a voluntary lien in debtor’s land to
  secure the debt
• Typically has to be in writing to satisfy the Statute of
  Frauds
• A purchase money mortgage takes priority over an unrecorded prior lien, including an unsecured vendor’s lien, which is created when the seller takes back a promissory note as part of the purchase price.

FORECLOSURE
When a mortgage is recorded, and later foreclosed, the mortgagee gets the title that existed as of the date of recording. But, pursuant to operation of the recording statutes, in a notice or race-notice jurisdiction, if the mortgagee has actual, constructive, or inquiry notice of a prior, unrecorded interest, they are not protected, and when they foreclose, they will take title subject to the prior unrecorded interest.

Question 39

Deed of Trust

Answer 39

A deed of trust (D/T) is like a mortgage. A D/T is also a security interest in property and can be recorded.

Question 40

Foreclosure of Deed of Trust

Non-Judicial Foreclosure

Answer 40

• Trustee posts and records a Notice of Default and Election to Sell
• Trustor then has 90 days to bring the defaulted amount current
• After 90 days the Trustee may post and publish a Notice of Trustee’s Sale
• For 21 days the beneficiary can demand payment in full on the note
• At the end of 21 days the trustee can sell the note to the highest bidder at public auction (often in goes to the lender who bids the note)

Question 41

Deficiency Judgment

Mortgage or Deed of Trust

Answer 41

• Occurs when the amount owed on the note secured by the mortgage or D/T is greater than the current value of the property securing the debt.
• A mortgagee or beneficiary under a D/T can obtain a deficiency judgment for money against the borrower only if the property securing the mortgage or D/T is not a single family home or up to a 4 single family residence and the mortgage or beneficiary uses judicial foreclosure
• Non-judicial foreclosure of a D/T carries an antideficiency provision that prohibits the awarding of a deficiency judgment

Question 42

Lateral Support

Damage to Adjacent Property from EXCAVATION

MBE

Answer 42

A landowner is strictly liable if his excavation causes adjacent land in its natural state to subside, but he is only strictly liable if his excavation causes adjacent land with improvements to subside if the land would have subsided in its natural state. Otherwise, the landowner is only liable if his excavation was done negligently.

Question 43

Subjacent Support

Damage to Property from SUBSURFACE MINING or TUNNELING

Answer 43

If a grantor conveys the right to have minerals taken from beneath the surface or the right to tunnel subsurface, and the land or existing buildings collapses, the grantee is strictly liable. But, if subsequently built buildings collapse, the grantee is only liable if they were negligent in their tunneling or mining

Question 44

Riparian Doctrine

Water Rights - Eastern States

Answer 44

• Under the riparian doctrine, the water belongs not to the public or the government, but to those who own the land bordering on the watercourse.
• All riparian owners may take water for all reasonable
  uses that do not unreasonably interfere with the uses of the other riparian owners

Question 45

Prior Appropriation Doctrine

Water Rights - Western States

Answer 45

Under the prior appropriation doctrine, the water belongs to the state, but the right to divert and use it can be acquired by an individual whether or not he is a riparian owner. Initially, these rights are determined by priority of beneficial use (priority in time—water is allocated to the first person to take water for a beneficial use); if there is a decrease in water flow and availability, the junior in time appropriators suffer first and lose their rights.

Question 46

Diffusion of Surface Water

MBE

Answer 46

Rule of reasonable use: an owner may make
reasonable use of his or her land, even though this
alters the flow of diffused water in a manner that
harms others.

Owner can either impound or, if reasonable, repel and
divert water

All surface water not confined in lakes, rivers, streams or other confined watercourses is diffused surface water—whether from snow melt, flooding, springs, other sources, if it gathers om temporary ponds or puddles.

Question 47

Groundwater

Answer 47

Two types:
* Underground streams: water flowing in a defined channel underground
* Percolating groundwater: percolates up through permeable subsurface layers

Four types of rules:
* Reasonable use approach—water may be used only on the overlying land; for uses reasonably related to the natural use of the land;
* Modified reasonable use—reasonableness based on balancing equities and hardships among all users;
* Correlative rights—all owners of land over a common pool have equal extraction rights; and
* Permit system based on prior appropriation.