Real Property Flashcards
Adverse Possession
Adverse possession allows someone in possession of land owned by another to acquire title if possession is actual, hostile, open and and notorious, exclusive, and continuous for the statutory period. Adverse possession does not convey marketable title, but allows for an action to quiet title.
Mnemonic - “NACHO” (notorious, actual, continuous, hostile, open)
Tacking
One adverse possessor may tack his time with the time of another adverse possessory to meet the required statutory period if the two adverse possessors are in privity.
Merger Doctrine
The contract for a conveyance of an interest in real property typically governs the agreement until the time of closing, at which time the deed becomes the operative document under the merger doctrine.
Valid Land Sale Contract
Contract law governs a contract for the sale of an interest in land, and the Statute of Frauds applies. The contract must be in writing, name the parties, signed by the party to be charged, sufficiently describe the land, and identify the purchase price and manner of payment.
Part Performance Exception to SOF
In the absence of a signed writing, part performance may sufficiently demonstrate the existence of a land sale contract. Part performance includes possession of the land by the purchaser, substantial improvements, and payment for some or all of the purchase price. Typically at least two of the three must be present.
Marketable Title
There is an implied promise in every land sale contract that the seller conveys marketable title at the time of closing. Marketable title is title free from defects, regardless of the deed contemplated in the contract.
Notes - title need not be perfect, just free from unreasonable risks of litigation and seller has reasonable time to cure
Triggers - outstanding mortgage or lien (seller has until escrow to pay off), easement that reduces full enjoyment of the property, use restrictions (i.e., real covenants)
Equitable Conversion
The doctrine of equitable conversion provides that once the contract is signed, the buyer is deemed the owner even though closing has not yet occurred. If the property is destroyed prior to closing through no fault of either party, the buyer bears the loss.
Remedies for Breach of Land Sale Contract
Damages: Typically calculated as the difference between the market price and the contract price.
Specific Performance: Specific performance is a permanent injunction where the court orders a party to perform on the contract as promised. Specific performance is usually preferred because land is unique.
Mortgage
A mortgage is a financing arrangement that conveys a security interest in land for the repayment of a monetary obligation.
Foreclosure
Foreclosure is a process by which the mortgagee may reach the land in satisfaction of the debt if the mortgagor defaults on the loan. A mortgagee must foreclose by proper judicial proceeding.
Priority of Mortgages
A purchase money mortgage (PPM) is a mortgage given to secure a loan that enables the debtor to purchase the original property. A PPM has priority over other mortgages.
Deficiency Judgment
A deficiency judgment occurs when the property is worth less than the amount owed on the outstanding loan(s). A lender can due the debtor personally for the remaining balance if there was a judicial foreclosure and the loan was not a PPM.
Conveyance by Deed
A deed is a document that serves to pass legal title from the grantor to the grantee. A deed must meet the same requirements as a land sale contract with the exception of consideration. There must be a present intent to transfer the interest and valid delivery.
General Warranty Deed
A general warranty deed warrants against all defects in title and contains six covenants of title (three present, three future).
Seisin - grantor warrants that he owns the estate he purports to own
Right to Convey - grantor warrants he has the power to make the conveyance
Covenant Against Encumbrances - grantor promises there are no mortgages, liens, easements, or use restrictions on the land other than those previously disclosed
Warranty of Title - grantor promises to defend lawful claims to the property asserted by others
Quiet Enjoyment - grantor promises grantee won’t be disturbed by third-party claims
Further Assurances - grantor will correct any future problems and do what is reasonably necessary to perfect the title conveyed
Quitclaim Deed
A quitclaim deed conveys whatever interest the grantor actually has in the property but warrants no covenants of title.
Special Warranty Deed
A special warranty deed covenants against title defects the grantor themselves created rather than all defects by prior owners.
Breach of Warranty Against Encumbrances
If an encumbrance is found to exist after the sale, damages are equal to the difference in value of the property due to the encumbrance.
Recording Acts
Recording acts function to provide a purchaser of land with a way to determine if he is getting good title to the property. Absent a recording statute, the common law rule of “first in time, first in right” applies.
Race Statutes
Under a race statute, the first to record title wins.
Notice Statutes
Under a notice statute, a subsequent bona fide purchaser (BFP) prevails over a grantee that failed to record first.
Race-Notice Statute
Under a race-notice statute, a subsequent BFP that records first prevails over a grantee that failed to record first.
Example - “no conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice, who shall first record.
Actual Notice
Actual notice occurs when a person has actual subjective knowledge.
Inquiry Notice
Inquiry notice occurs when a person is in possession of facts that would lead a reasonable person to make further inquiry.
(e.g., seeing a building or road physically present)
Constructive Notice
Constructive notice (aka, record notice) occurs when the prior interest was properly recorded in the chain of title.
Wild Deeds
A wild deed is one that is recorded but not in a way that a reasonable search of the grantee-grantor index would disclose. Wild deeds do not provide constructive notice.
Estoppel by Deed
If one purports to convey an interest in property that he does not own, but subsequently obtains an interest in, the interest will be automatically transferred to the grantee.
Shelter Doctrine
One who takes from a bona fide purchaser (BFP) will stand in the shoes of the BFP and is protected by the grantor’s BFP status.
Note - this is meant to protect people who did not take for consideration
Fee Simple Absolute
A fee simple absolute is the largest estate and can last forever.
Fee Simple Determinable
A fee simple determinable automatically terminates at the occurrence of a specified event. If the specified event occurs, the property automatically reverts back to the grantor.
Grantor’s future interest = possibility of reverter
Created with words of duration like “so long as,” “during,” “while,” “until,” or “unless”
Fee Simple Subject to Condition Subsequent
A fee simple subject to condition subsequent has the potential to terminate an estate at the occurrence of a stated event, but the termination is not automatic.
Grantor’s future interest = right of reentry
Created with words that carve out a right of reentry in the grantor like “but if,” “provided that,” or “upon the condition that”
Fee Simple Subject to Executory Interest
A fee simple subject to executory interest automatically terminates a proceeding estate at the occurrence of a stated event, but the estate passes to a third person rather than reverting to the grantor.
Third party’s future interest = executory interest
Life Estate
A life estate is an interest that is measured by the life of a person. A life estate may be conveyed, but the interest is still limited by the measuring life.
Reversion
A reversion is created when the holder of an estate transfers less than the entire estate.
Remainder
A remainder is a future interest that can only become possessory upon the expiration of a prior possessory estate created by the same instrument. A remainder never follows a defeasible fee (FSD, FSSCS, FFSEI). A vested remainder is one created in an ascertained person not subject to a condition subsequent. A contingent remainder is one created in an un-ascertained person or subject to a condition subsequent.
Executory Interest
An executory interest is an interest in a future grantee and follows a FSSEI. A shifting executory interest cuts short a proceeding estate of another grantee. A springing executory interest “springs” from the grantor’s reversionary interest.
Rule Against Perpetuities
The Rule Against Perpetuities (RAP) invalidates any interest in property if there is a chance the interest may vest more than 21 years after a measuring life in being at the creation of the interest. RAP applies to contingent remainders, executory interests, and vested remainders subject to open (i.e., class gifts).
Joint Tenancy
A joint tenancy exists when two or more people hold an undivided interest in property with the right of survivorship. A joint tenancy requires four unities: time, title, interest, and possession.
Mnemonic - TTIP
Severance of a Joint Tenancy
Unilateral action by one joint tenant may sever the joint tenancy.
Tenancy in Common
A tenancy in common is a concurrent estate where two or more co-tenants hold property with no right of survivorship. Co-tenants can hold different interests in the property, but each is entitled to possession of the whole. Interests are alienable, devisable, and descendable.
Tenancy by the Entirety
A tenancy by the entirety is a joint tenancy held by a married couple with the right of survivorship. It is only severable by divorce, mutual agreement, or a creditor of both spouses, and neither spouse can unilaterally convey or encumber their interest.
Co-Tenant Repairs
Co-tenants have no right to reimbursement for improvements but can see contribution for necessary repairs.
Co-Tenant Payment of Taxes/Mortgage
Co-tenants are responsible for their proportionate share of the taxes and mortgage payments. When a co-tenant has made payments on behalf of the property for taxes or mortgage payments that are in excess of his pro rata share, he may seek contribution from the other co-tenants.
Payments Received by Co-Tenants
Co-tenants must share net rents received from third parties or net profits received from the exploitation of land.
Ouster
A tenant in common or joint tenant who is denied access to the property has been subjected to ouster. The co-tenant who caused the ouster must account to the ousted tenant for the fair rental value of the premises and the ousted tenant may bring an action to regain possession.
Partition
A partition action allows the court to divide property if in the best interest of all parties, either by physical partition or a sale of the property.
Tenancy for Years
A tenancy for years refers to a lease for a fixed period of time. A writing is required for leases longer than one year to comply with the SOF. No notice is required to terminate because a term of years automatically terminates at the end of the lease period.
Periodic Tenancy
A periodic tenancy continues automatically from one period to another until one party terminates by proper notice. A writing is not required to create a periodic tenancy as it can be created by implication (e.g., payment of rent at certain intervals), but written notice is required to terminate a periodic tenancy. At common law, this requires notice of a full period, except in year-to-year tenancies which only require a 6-month notice.
Tenancy at Sufferance
A tenancy at sufferance occurs when a tenant wrongfully remains in the property after their lease has expired. The landlord may evict the tenant or enter into a periodic tenancy.
Tenancy at Will
A tenancy at will is a tenancy with no fixed lease period and can be terminated at any time. A tenancy at will is either created by agreement or implication when there is no time period identified for paying rent.
Tenant’s Duties
A tenant’s duties include paying rent and avoiding waste.
Landlord’s Duties
A landlord’s duties include delivering possession and making repairs.
Duty to Pay Rent
A tenant has a duty to pay rent in the amount agreed to and in a timely manner.
Remedies for Abandonment
If a tenant abandons the premises, the landlord may accept the surrender and terminate the lease or sue for rent as it becomes due. A landlord has a duty to mitigate damages by advertising the vacant property as he would any other vacant stock but is not required to accept an unsuitable replacement tenant.
Constructive Eviction
A constructive eviction occurs when the landlord has breached the implied covenant of quiet enjoyment and substantially interferes with the tenant’s use of enjoyment of the premises by their actions or failure to resolve a problem. The premises must be either virtually uninhabitable for their intended use because of substantial interference. The tenant must give the landlord notice and an opportunity to remedy the problem before actually vacating the premises.
Implied Warranty of Habitability
The implied warranty of habitability applies to residential leases and requires the landlord provide a place to live that is suitable for human habitation. When the premises are not habitable, the tenant may terminate the lease and move out, make repairs and deduct the cost from their rent, or remain on the premises and sue for damages.
Voluntary Waste
Voluntary waste occurs when a tenant engages in conduct that causes a decrease in value to the premises.
Permissive Waste
Permissive waste occurs when the tenant neglects the property.
Ameliorative Waste
Ameliorative waste occurs when the tenant makes improvements to the land that actually increase the value. The tenant must restore the premises to its original condition.
Fixtures
Fixtures are items that were once moveable chattel but have been attached to the land in such a way that they are considered part of the real estate. Factors for determining whether something is a fixture include the method of attachment, ease of removal, intention, agreement, and particular suitability for the premises.
Assignments
An assignment is a transfer of the entire interest remaining in a lease. The new tenant and the original tenant are both liable for the rent.
Sublease
A sublease is a transfer of less than the entire interest remaining in the lease. The new tenant is not liable for rent, only the original tenant.
Easement
An easement is the right to use the land of another. An easement can be created by express grant, implication, necessity, or prescription. Affirmative easements entitle the owner of the easement to do something on another’s land. A negative easement prevents the landowner from doing something on his own land.
Easement Appurtenant
An easement appurtenant benefits a particular parcel of land and benefits successive owners of the land.
Easement in Gross
An easement in gross benefits a particular person and is not tied to a piece of land.
Express Easement
An easement is created by express agreement when it is contained in a valid, signed writing, which details the conveyance of the right to the dominant estate.
Easement by Implication
An easement by implication is created when a single tract of land is divided and the previous owner of both parcels established use. The easement must be reasonably necessary to the dominant land’s use and enjoyment of the property.
Easement by Necessity
An easement by necessity is created when a single owner subdivides their property and access to the property requires the use of the easement. Unlike an easement by implication, prior use is not required.
Easement by Estoppel
An easement by estoppel can occur when the servient parcel allows use such that it is reasonable the user will change his position in reliance on the belief that permission will not be revoked.
Real Covenants
Real covenants are written promises between two parties about how land is to be used and may benefit or burden the land.
In order for a burden to run with the land and bind successors, there must be a writing, intent, touch and concern, horizontal and vertical privity, and notice.
In order for a benefit to run with the land, there must be a writing, intent, touch and concern, and vertical privity. No horizontal privity or notice is required.
Will I Tackle Colton? No, Petty.
Horizontal Privity
Horizontal privity refers to the privity between the original parties.
Vertical Privity
Vertical privity refers to the original party and their successor in interest. For a burden to run, the successor must have taken the entire interest. For a benefit to run, the successor must take only a portion of the estate (relaxed vertical privity).
Equitable Servitudes
Equitable servitudes are restrictions on how land may be used, enforced by an injunction. An equitable servitude will run with the land if there is a writing, intent, touch and concern, and notice (notice only required for burden, not benefit).
Implied Reciprocal Servitude
An implied reciprocal servitude applies when there is a general or common scheme intended by the original owner and the purchaser has notice of the scheme. No writing is required.
Riparian Rights
Riparian rights concern rights to water that abut property. Under the reasonable use theory, each riparian owner may use as much as he reasonably needs. Under the prior appropriation doctrine, an owner must obtain a permit, and priority is determined by the permit date.
Right to Lateral and Subjacent Support
Every landowner is entitled to receive necessary physical support from adjacent soil (lateral support) and underlying soil (subjacent support). The right to lateral support is absolute, and a landowner will be found strictly liable for excavation that causes adjacent land to subside under its own weight. If the land has been improved (i.e., buildings), an adjoining landowner is liable for its excavation only if the landowner can prove negligence.
Zoning
Zoning laws enforce land usage based upon city planning, where land is assigned a residential, commercial, or industrial use. Zoning regulations must be reasonable and have a substantial relation to the protection of the health, safety, morality, and welfare of citizens.
Variance
A property owner can seek a variance (i.e., waiver) from a zoning regulation if he can show undue hardship and the variance will not be contrary to public safety.
Nonconforming Use
Use of a property that was allowed under previous zoning regulations but is not longer permitted under new zoning laws. A nonconforming use permits a landowner to continue his use despite the new regulations. The previous use must be legal, there must be no break in continuous use, and the use cannot be substantially increased.
