Real Property

Question 1

Easement

Answer 1

An easement is a non-possessory right to use another person’s land for a specific purpose. Specific types of easements are listed on further cards.

There are several types of easements, including:

1. easement appurtenant (benefits an adjoining land),
2. easement in gross (benefits an individual or entity, regardless of property ownership),
3. affirmative easement (permits certain use), and
4. negative easement (prevents certain use).

Easements can be established expressly through granting or reservation, or implicitly through prescription, necessity, implication, or estoppel.

Question 2

Tenant’s Duties at Common Law
(Landlord-Tenant Law)

Answer 2

Common law= a tenant has a duty to pay rent and maintain the premises, which includes making ordinary repairs and avoiding waste, whether it be voluntary, permissive, or ameliorative.

If a tenant uses the premises for illegal purposes, the landlord may terminate the lease, seek damages, or obtain injunctive relief.

Additionally, if third parties invited by the tenant suffer injuries, the tenant is liable, even if the landlord promised to make repairs.

Question 3

Adverse Possession

Answer 3

A trespasser may acquire title to another’s property without compensation by possessing the property for a specified period in a manner conflicting with the true owner’s rights.

The trespasser’s possession must be (CHOAm):
1. Continuous for the statutory period,
2. Hostile to the true owner’s interest;
3. Open and notorious, and
4. Actual and exclusive.

DOES NOT apply to mineral rights, just surface rights.

Question 4

Land Sale Contract

Answer 4

A land sale contract must be in writing, signed by the parties to be bound, and articulate essential terms, such as the consideration to be paid and a description of the land, to be enforceable under the Statute of Frauds.

However, if the buyer takes possession and either (1) pays all or part of the purchase price or (2) makes substantial improvements, the contract is outside the Statute of Frauds.

Question 5

Equitable Conversion

Answer 5

Equitable conversion applies once a contract for the sale of property is signed, but before legal title is transferred during the closing.

The buyer is deemed the equitable owner of the property and the seller retains legal title as security for the payment of the purchase price.

This means that despite not yet holding legal title, the buyer generally assumes the risk of loss or damage to the property during this interim period.

The seller, though holding legal title, is essentially holding it in trust for the buyer until the transaction is finalized.

Question 6

Waste
(Landlord-tenant law)

Answer 6

A tenant is obligated to maintain the estate by making reasonable repairs and keeping the property in a reasonable state of repair. The tenant is prohibited from committing waste by acting in a way that would cause permanent damage to the property or significantly decrease its value.

Question 7

Voluntary Waste

Answer 7

A tenant takes affirmative action, resulting in damage to the property.

Depletion of natural resources is generally considered waste, except where it constitutes normal use of the land (open mines doctrine).

Question 8

Permissive Waste
(Landlord-Tenant)

Answer 8

A tenant fails to maintain the property.

The tenant is obligated to make ordinary repairs, but not replacements.

Their repair obligation is limited to the amount of rents and profits received from the land. If there are no rents and profits, the obligation is based on the reasonable rental value of the land, provided the life tenant is using it. If not in use and no income is derived, there’s no repair obligation.

Question 9

Ameliorative Waste
(Landlord-Tenant)

Answer 9

Tenant substantially alters the property but the activity actually increases its value.

If changed conditions have made the property relatively worthless, then the tenant can commit ameliorative waste without liability to the future interest holder.

Question 10

Joint Tenancy
(TTIP)

Answer 10

A joint tenancy is an estate in land held concurrently by two or more co-tenants. To form a joint tenancy the four unities must be present at the outset:

(1) TIME (interests must have vested at the same time),
(2) TITLE (grant to all joint tenants must be by the same instrument),
(3) INTEREST (all joint tenants must take the same kind and amount of interest), and
(4) POSSESSION (all joint tenants must have identical rights of possession.

The language of the conveyance must clearly reflect the grantor’s intent to create a joint tenancy. The modern rule will presume that a tenancy in common is created if there is any uncertainty.

The right of survivorship must be expressly stated, which means that the surviving joint tenants take automatically on the death of a joint tenant.

Question 11

Termination of Joint Tenancy

Answer 11

A joint tenancy can be terminated by the acts of one co-tenant, such as conveyance inter vivos (while alive). This destroys the joint tenancy and creates a tenancy in common.

Mortgages depend on the jurisdiction:
(1) Majority rule = regarded as a lien on title.
(2) Minority rule = a transfer of title, destroys the unity of title and severs the joint tenancy.

Conveying an interest via a will does not destroy a joint tenancy.

Question 12

Partition (Joint Tenancy)

Answer 12

A joint tenant has the right to seek a partition to own a specific portion of the jointly held land outright, thereby terminating the joint tenancy.

Question 13

Ouster (Co-tenancy)

Answer 13

One co-tenant wrongfully excludes the other from the property.

Ousted cotenant is entitled to receive their share of fair rental value of property for time they were deprived of possession.

Question 14

Accounting to Co-Tenant

Answer 14

A co-tenant who pays more than their share for repairs is entitled to contribution from others in actions for accounting or partition.

Each co-tenant must pay their share of taxes and mortgage payments on the entire property.

A co-tenant in sole possession can only receive reimbursement for taxes that exceed the rental value.

A co-tenant out of possession has a right to share in rents from third parties.

Question 15

Severance (Joint Tenancy)

Answer 15

Involuntary termination of a joint tenancy due to a disturbance in any of the four unities.

Commonly results from a sale, mortgage, contract of sale, or creditor’s sale.

Mortgages:
(1) Majority = lien theory, no severance occurs
(2) Minority = title theory, title transfers, severance

Question 16

Leasehold Estate

Answer 16

A leasehold estate involves a tenant having a current possessory interest in the leased property while the landlord retains a future interest.

Question 17

Tenancy in Common

Answer 17

Tenancy in common requires only the unity of possession, allowing each co-tenant to possess the entire property.

Default tenancy: it is freely alienable, permits forced partition, and lacks survivorship rights.

Question 18

Tenancy by the Entirety

Answer 18

Tenancy by the entirety arises when the four unities (TTIP) and unity of MARRIAGE exist. Common law grants survivorship rights and prohibits unilateral termination.

Termination occurs upon death, written mutual agreement, divorce, or joint creditor execution.

Question 19

Tenancy for Years

Answer 19

A tenancy for years has a fixed period with definite beginning and ending dates.

Tenancies exceeding one year must be in writing to comply with the statute of frauds, while one-year tenancies may be oral.

No notice is needed for termination between landlord and tenant.

Question 20

Periodic Tenancy

Answer 20

A periodic tenancy repeats for a specified period until notice is given by either party.

It can arise from express agreement, implication, or operation of law, such as an oral lease violating the statute of frauds or a holdover tenant.

Termination requires proper notice, typically equal to the tenancy period. Year-to-year tenancies need six months’ notice. The notice must state the effective date and coincide with the tenancy period’s end.

Question 21

Tenancy at Will

Answer 21

A tenancy at will permits termination by either party at any time, requiring notice of termination and reasonable time to vacate.

Termination can also result from death of either party, tenant’s waste, tenant’s assignment, landlord’s title transfer, or landlord’s lease to a third party.

Question 22

Tenancy at Sufferance

Answer 22

A tenancy at sufferance arises when a tenant wrongfully holds over at end of a lease.

The landlord may sue for trespass, evict, or impose a new periodic tenancy.

A new tenancy’s duration is determined by rent payment periods, typically month-to-month for residential or year-to-year for commercial properties.

Question 23

Tenant’s Duties

Answer 23

The tenant owes the landlord:

A duty to pay rent and
A duty to maintain the premises.

Maintenance duty: ordinary repairs to prevent or rectify damage beyond normal wear and tear.

Modern view: when the tenant explicitly covenants to repair, the tenant could be liable for all types of damage, even ordinary wear and tear, unless the parties’ agreement expressly excludes this responsibility.

When a lease is silent on the tenant’s repair obligations, the tenant is typically only required to maintain the premises in a reasonably good state of repair and is not responsible for normal wear and tear.

Question 24

Landlord’s Remedies for Tenant’s Breach

Answer 24

When a tenant fails to pay rent or unjustifiably abandons the property, the landlord can pursue remedies:

Unpaid rent = the landlord may sue for damages, terminate the lease, and evict the tenant.

Abandonment = the landlord can either accept the tenant’s abandonment and terminate the lease, freeing the tenant from rent obligations, or re-let the premises, holding the tenant liable for any deficiency.

Question 25

Landlord’s Duties

Answer 25

Landlords have several duties:

(1) Deliver possession of the leased premises at the start of the lease. Failure to do so can constitute a total breach of lease.

(2) Uphold the implied warranty of habitability for residential properties. Ensure the premises are fit for residential use, which includes an obligation to conduct necessary repairs unless otherwise stipulated in the lease or local laws. If landlord fails to meet this duty, such as by not providing essential services or failing to make necessary repairs that render the property uninhabitable, tenants can vacate and end the lease or remain and sue for damages.

(3) Uphold the implied covenant of quiet enjoyment. Tenants should be able to use and enjoy the property without substantial interference. Breaches of this covenant can be:
(a) total eviction (excluding the tenant from the entire premises),
(b) partial eviction (excluding the tenant from a portion of the premises), or
(c) constructive eviction (where the landlord’s actions or failure to act substantially interfere with the tenant’s use and enjoyment of the property, not necessarily rendering the property uninhabitable).
If a tenant experiences constructive eviction, they may vacate, end the lease, and possibly sue for damages.

Question 26

Implied Warranty of Habitability

Answer 26

Modern law = implied covenant of habitability in residential leases if not allocated. This unwaivable warranty links the lessor’s duty to local housing codes, assessing if conditions are suitable for human residence.

If breached, the lessee can
(1) vacate and terminate the lease,
(2) repair and offset costs against future rent,
(3) reduce rent to fair rental value considering defects, or
(4) stay in possession, pay full rent, and sue for damages.

Under common law, lessees were responsible for repairs.

Question 27

Implied Covenant of Quiet Enjoyment

Answer 27

The lessor or a paramount titleholder will not disrupt the lessee’s quiet use and enjoyment of the premises. Breaches may involve actual, partial, or constructive eviction.

Question 28

Constructive Eviction

Answer 28

Arises when the landlord’s action or inaction makes the property uninhabitable, and the lessee vacates within a reasonable time.

To claim constructive eviction, the tenant must
(1) identify the landlord’s service failure,
(2) show substantial interference with quiet enjoyment,
(3) provide notice and reasonable repair time to the landlord, and
(4) vacate within a reasonable time.

Question 29

Fixtures

Answer 29

Fixtures become part of the property and cannot be removed by sellers or tenants.

Determining if an item is a fixture depends on intent, which is assessed by
(1) degree of attachment,
(2) general custom,
(3) harm to premises upon removal, and
(4) trade fixtures’ exemption from fixture classification, allowing removal.

If not a fixture, the tenant must remove the item before vacating at the lease’s end.

Question 30

Easement Appurtenant

Answer 30

An easement is a non-possessory interest in land granting the right to use land.

An easement appurtenant directly benefits an adjoining parcel of land’s use and enjoyment.

The burdened property is the servient estate, while the benefited property is the dominant estate.

Question 31

Easement in Gross

Answer 31

Granted to one parcel of land, regardless of land ownership. The land is called the “servient estate”.

Question 32

Express Easement

Answer 32

An explicit grant or reservation of an easement when land is sold.

It must be:
(1) in writing,
(2) signed by the grantor (typically the owner of the servient estate), and
(3) meet all the formalities of a deed to comply with the Statute of Frauds.

An oral agreement purporting to create an easement is typically treated as a license, which is revocable and does not confer a property interest.

Question 33

Implied Easement

Answer 33

Informal easement, arises out of factual circumstances.

Not subject to Statute of Frauds, not subject to recording statutes (unless subsequent purchaser had notice of easement)

Four kinds:
1. Necessity
2. Implication (prior use)
3. Prescription
4. Estoppel

Question 34

Easement by Prescription
(CHO - elements)

Answer 34

An easement by prescription is like acquiring title through adverse possession. It requires the following elements:

(1) the use is CONTINUOUS and uninterrupted for a specified statutory period
(2) the use is HOSTILE, meaning it occurs without the true owner’s permission or consent; and
(3) the use is OPEN, notorious, or sufficiently apparent to put the true owner on notice that the property is being used as if an easement exists.

Question 35

Transfer of Benefit of Easement

Answer 35

The benefit of an easement appurtenant automatically transfers with the dominant estate, regardless of whether the easement is mentioned in the deed of conveyance.

The easement appurtenant cannot be separately transferred from the dominant estate.

Question 36

Transfer of Servient Estate

Answer 36

Easements are binding on subsequent servient estate holders, even if not mentioned in the deed of conveyance, as long as the holder had notice of the easement.

Notice can be through
(1) actual knowledge or notice,
(2) constructive notice from the easement-creating document being recorded in the buyer’s direct chain of title, or
(3) inquiry notice arising from a physical inspection of the land, visible appearance of the easement, or inspection of public records in the direct chain of title.

Question 37

Scope of Use of Easement

Answer 37

The specific terms of the easement dictate its use. Unless otherwise stated, an easement is presumed to be perpetual. Reasonable development of the dominant estate is permitted, reflecting the development most likely contemplated by the parties when the easement was granted. The remedy for excessive use is to enjoin such use.

Question 38

Termination of Easement

Answer 38

An easement terminates through:
(1) merger,
(2) deed of release,
(3) abandonment (requiring the dominant estate holder to take physical action demonstrating intent to abandon),
(4) termination by estoppel,
(5) prescription, or
(6) end of necessity.

Question 39

Covenant Running with the Land: Benefit

Answer 39

The benefit of a covenant will run with the land and apply to successors in interest if:
(1) the original parties intended it,
(2) the covenant is in writing,
(3) there is vertical privity, and
(4) the covenant touches and concerns the benefited property.

Question 40

Covenant Running with the Land: Burden

Answer 40

The burden of a covenant runs with the land and is enforceable against a successor in interest of the burdened property only if:
(1) the original parties intended it;
(2) the successor had actual or constructive notice of the covenant when acquiring the property;
(3) there is horizontal and vertical privity; and
(4) the covenant touches and concerns the burdened property.

Question 41

Mortgage

Answer 41

A mortgage is a security interest in real estate, typically securing a loan repayment promise. If the loan is not paid when due, the mortgagee can take title to the real estate or sell it and use the proceeds to pay off the debt in a foreclosure sale.

Question 42

General Warranty Deed

Answer 42

The grantor makes covenants against title defects created by themselves and all prior titleholders.

It usually includes three present covenants and three future covenants:

Present covenants
(1) Encumbrances = no visible or invisible encumbrances on the title.
(2) Seisin = legal possession of the land.
(3) Right to Convey = sell/give the land

Future covenants
(4) Quiet Enjoyment = grantee can occupy the land without issues.
(5) Warranty = obligates the grantor to defend the title against any claims and compensate the grantee for any loss from a superior title.
(6) Further Assurances = grantor will fix future title problems

Question 43

Creation of an Easement (PING & CHOAm)

Answer 43

Prescription (similar to Adverse Possession)
CHOAm elements: Continuous use, Hostile to owner’s interest, Open & notorious, Actual use

Implication (implied by pre-existing use)

Necessity (only way to access land or outside world)

Grant (write it out in a deed)

Question 44

Marketable Title (Real Estate Contracts)

Answer 44

Seller must convey marketable title. If the contract is silent as to quality of the title, the obligation is implied in the contract.

After closing, the deed embodies the deal, rather than the contract. The contract is enforceable in the gap between signing and delivery of the deed.

Question 45

Mortgages - Overall

Answer 45

A Mortgage is a security interest in real property held by a lender as a security for a debt. It is a transfer of an interest in land from the owner of land to the mortgage lender. The interest will be returned when the terms of the mortgage are satisfied.

The debtor and mortgagor can be different people.

Question 46

Mortgages - Note vs. Mortgage

Answer 46

A note is a borrower’s promise to repay the debt.

The mortgage is the security device that secures repayment of the debt. The lender can force a foreclosure sale to recover outstanding debt if the borrower defaults on the loan.

Question 47

Mortgages - Purchase-Money Mortgage

Answer 47

In a purchase-money mortgage, the borrower takes out money for the purpose of buying property.

P-M mortgages have priority over later-acquired Future Advance mortgages (“second mortgages” used for construction or home improvements).

Question 48

Mortgages - Transfers of Encumbered Property

Answer 48

After a transfer of property encumbered by mortgage, the borrower remains liable on the mortgage unless the lender releases the borrower from his obligation.

If transferee takes title “subject to mortgage” = not personally liable on default.

If transferee “assumes mortgage” = primarily liable, then original borrower is secondarily liable upon default.
(Minority rule: if transferee makes payments on mortgage for original borrower, transferee assumes mortgage)

Question 49

Mortgages - Foreclosure

Answer 49

A foreclosure is a forced sale of property encumbered by a mortgage, starting when the borrower defaults on the mortgage. The proceeds go towards satisfying the mortgage debt.

Question 50

Requirements for a Valid Deed

Answer 50

In order to be a valid deed, the following four requirements must be met:

1. Written & Signed by Grantor
2. Identifies grantee & grantor
3. Identifies land (with reasonable certainty)
4. Include words of transfer

Question 51

Doctrine of Merger

Answer 51

All obligations contained within a land-sale contract merge into the deed once the deed is delivered to and accepted by the buyer. Any obligations contained within the land-sale contract can be enforced thereafter only if they are incorporated into the deed.*

*Obligations that are collateral to and independent of the conveyance are usually not subject to the doctrine of merger. (e.g., the seller’s obligation to remove his/her personal property prior to closing)

Question 52

Time is Of the Essence
(Land Sale Contract)

Answer 52

Time is of the essence when:

1. the contract specifically states that “time is of the essence”
2. circumstances indicate that it was the parties’ intention to strictly adhere to the closing date or
   3.one party gives the other party notice that time is of the essence within a reasonable time prior to closing.

If time is of the essence and the seller cannot deliver marketable title on the date of closing, then THE SELLER IS IN BREACH and the buyer can rescind the contract.

Question 53

Mortgages - Lien theory vs Title theory
(Joint Tenancy)

Answer 53

Lien theory = majority rule. A lien on a mortgaged property does not sever a joint tenancy.

Title theory = minority rule. A lien on a mortgaged property does sever a joint tenancy.

Question 54

Mortgages - Subject to vs. Assume

Answer 54

When an owner transfers land with a mortgage on it, the buyer can take in one of two ways:

1. Subject to: buyer does NOT agree to pay the loan and is NOT liable for debt.
2. Assumes: buyer DOES agree to pay the loan and IS liable for debt.

Question 55

Real Estate Contracts - Statute of Frauds

Answer 55

SOF requires:
1. Writing - physical/electronic document, reasonable basis to assume contract was formed.
2. Signature - mark by party to be charged
3. ESSENTIAL TERMS - identity of the parties, words of intent (buy/sell), property description, sales price.

Modify contract - has to be in writing

Rescind contract - can be oral.

Question 56

Fee Simple Determinable

Answer 56

A fee simple determinable is limited by specific durational language (e.g., “so long as” “until”).

It terminates automatically upon the happening of the stated condition.

The grantor retains a possibility of reverter.

Question 57

Fee Simple Subject to Condition Subsequent

Answer 57

A fee simple subject to condition subsequent is limited in duration by specific conditional language (“provided that” “but if”).

Upon occurrence of the stated condition, the present fee simple will terminate only if the grantor affirmatively demonstrates an intent to terminate.

The grantor must explicitly retain the right to terminate the fee simple subject to condition subsequent in the conveyance.

Question 58

Fee Simple Absolute

Answer 58

FSA is not limited

Question 59

Unmarketable title

Answer 59

Five things can make title unmarketable:
1. Adverse possession
2. Encumbrances
3. Covenants
4. Zoning Violations
5. Easements

Question 60

Equitable Servitude

Answer 60

A covenant to do/refrain from something on land, enforceable in equity against promising parties and their successors in interest. Elements:

1. Writing - write it down
2. Intent to Run - intend promises to apply to successors
3. Touch & Concern - use, enjoyment, and occupation of both dominant and servient estates
4. Notice - actual, constructive, and inquiry