Real Property Flashcards
An estate in land can be held ____ by several persons, all of whom have the right to enjoyment and possession of the land.
concurrently
There are three forms of concurrent ownership:
- The Joint Tenancy
- The Tenancy by the Entirety
- The Tenancy in Common
The Joint Tenancy
Two or more own with the right of survivorship
The Tenancy by the Entirety
A protected marital interest between spouses with the right of survivorship (recognized in 21 states)
The Tenancy in Common
Two or more own without the right of survivorship
A joint tenancy’s distinguishing feature is the ____
right of survivorship.
A joint tenant’s interest is alienable ____
inter vivos.
A joint tenant’s interest is neither ____
devisable nor descendible
Joint tenancy property doesn’t become part of the deceased joint tenant’s ____, and an executor or administrator has ____ in the property.
estate; no interest
A joint tenant’s attempt to dispose of the property by will is ____
void.
The common law requires four unities to form a joint tenancy:
T-TIP
- T: at the same time;
- T: by the same title (meaning, in the same deed, will, or other document of title);
- I: with identical, equal interests; and
- P: with rights to possess the whole
All interests in a joint tenancy must be ___ shares
equal
In a tenancy in common, by contrast, equal shares are
___, but are not ____
presumed; required
In addition to the four unities at CL, to create a joint tenancy the grantor must clearly express the ____
right of survivorship.
A conveyance to two or more persons, without more (language stating right of survivorship), is presumed to be a ____
tenancy in common.
The circumstances, a joint tenancy will be severed and a tenancy in common results
SAP
- Severance and Sale
- Severance and Partition
A voluntary conveyance by a joint tenant of their interest ____
destroys the joint tenancy.
-> The transferee takes as a tenant in common.
May a joint tenant transfer his interest secretly?
Yes! Don’t need consent
If we started with more than two joint tenants in the first place,
remember, the joint tenancy ____ as between the other, non-transferring joint tenants.
remains intact
Types of partition:
- By voluntary agreement
- By judicial action called partition in kind
- By judicial action called a forced sale
Judicial action called partition in kind
An action for a physical division of the property, if in the best interests of all parties
An allowable and peaceful way to end the JT relationship.
By voluntary agreement
When would a partition in kind work best?
When blackacre is “sprawling acreage”
By judicial action called a forced sale
An action when, in the best interests of all parties, the land is sold and the sale proceeds
are divided up proportionately.
When would a forced sale work
best?
Single building!
In most states, a mortgage is a ____ and does not sever a joint tenancy.
lien on title
In a lien theory state severance occurs only if the mortgage is ____.
foreclosed and the property is sold
The execution of a mortgage in title theory states, however, does ____
sever a joint tenancy
Under the Uniform Probate Code and modern statutes, when a beneficiary unlawfully and intentionally kills a joint tenant, any joint property is transformed into ____
a tenancy in common.
A tenancy by the entirety is a ____ akin to a joint tenancy.
marital estate
is a ____ can be created only between ____, who take as a fictitious “one person” with the right of survivorship.
married partners
In states that recognize the tenancy by the entirety, it arises _____ unless the language of the grant clearly indicates otherwise.
presumptively in any conveyance to married partners
The tenancy by the entirety is a ____ form of co-ownership.
very protected
Creditors of only one spouse ____ the tenancy by the entirety for satisfaction of the debt.
cannot touch
Under the tenancy by the entirety one spouse, acting alone, ____ the right of survivorship by unilaterally conveying to a third party.
cannot defeat
An individual spouse ____ tenancy by the entirety property and a deed or mortgage executed by only one spouse is ineffective.
cannot encumber
What severs a tenancy by the entirity
Only death, divorce, mutual agreement, or execution by a joint creditor of both the spouses can sever a tenancy by the entirety.
On divorce, the tenancy by the entirety becomes a ____
tenancy in common.
A tenancy in common is a concurrent estate with no ____
right of survivorship
Two key features of the tenancy in common:
- Each co-tenant owns an individual part, and each has a right to possess the whole
- Each interest is devisable, descendible, and alienable.
Each co-tenant has the right to possess ____ but has no right to ____ of any part
all portions of the property; exclusive possession
If one co-tenant wrongfully excludes another co-tenant from possession of the whole or any part, they’ve committed ____ (an actionable wrong).
ouster
In most states, a co-tenant in exclusive possession has the right to ____ from their use of the property; that is, they don’t need to share profits with other co-tenants absent ____.
retain profits; ouster or an agreement to the contrary
-> i.e., not rental payments due to co-tenant not in possession
A co-tenant who leases all or part of the premises to a third party must ____
account to their co-tenants, providing them their fair share of the rental income (by ownership %)
Co-tenants in exclusive possession must also share net profits gained from ____
exploitations of the land, such as mining.
Unless they’ve ousted the other co-tenant, the co-tenant in exclusive possession for the statutory adverse possession period ____ to the whole to the exclusion of the other co-tenant.
cannot acquire title
Responsibility of co-tenants for carrying costs
Each pays his fair share (based on individual share in the whole)
Carrying costs of co-tenants include
tax and mortgage interest payments
Repairing co-tenant enjoys right to contribution for any ____ made provided that the repairing co-tenant ____
-> Contribute fair share (by ownership %)
reasonable, necessary repairs; notified the others of the need for the repair
During the life of the co-tenancy, there is ____ to contribution for “improvements” made by one co-tenant.
no right
At partition if one co-tenat unilaterally improved the property the improver gets ____
credit equal to any value increased
-> but inverse is true = debt for any diminution in value
A co-tenant must not commit ____. ____, a co-tenant is permitted to bring an action for this against another co-tenant.
waste; During the life of the co-tenancy
Types of waste
- Voluntary waste
- Permissive waste
- Ameliorative waste is unilateral change that increases value
Voluntary waste is ____
willful destruction
Permissive waste is ____
neglect
Ameliorative waste is ____
unilateral change that increases value
A joint tenant or tenant in common has a right to bring an action for ____
partition.
Courts prefer ___ but will permit partition by sale when ____.
partition in kind; a fair and equitable physical division of the property cannot be made
In the case of a joint tenancy, a mortgagee or lienor runs the risk that the obligated co-tenant will ____, extinguishing the mortgagee’s or lienor’s interest.
die before foreclosure
A joint tenant or tenant in common may encumber ____ (for example, by mortgage or judgment lien), but may not encumber the interests of ____
her interest; other co-tenants.
Although generally the right to partition may be exercised at ____, restraints on partition by co tenants are valid, provided they are ____
any time; limited to a reasonable time.
A ____ relationship exists among co-tenants; for example, one co-tenant’s acquisition of an outstanding title or lien that may affect
the estate is deemed to be on behalf of other co-tenants
confidential
A leasehold is an estate in land, under which the tenant has a ____ interest in the leased premises and the landlord has a ____ interest.
present possessory; future (reversion)
Leasehold estates
- The tenancy for years
- The periodic tenancy
- The tenancy at will
- The tenancy at sufferance
The tenancy for years, also known as the estate for years or term of years, is for ____
a fixed, determined period of time (could be, for example, as short as one week or as long as 50 years).
Whenever you know the ____ from the start, you have a tenancy for years.
termination date
A tenancy for years ____
ends automatically at its termination date.
How much notice is needed to terminate a term of years?
None! = set at the outset
In most leases, the landlord reserves a right of ____, which allows them to terminate the lease if the tenant _____.
entry; breaches any of the lease’s covenants
In many jurisdictions, a landlord may, by statute, terminate the lease upon the tenant’s failure to ____ —even in the absence of a reserved right of entry.
pay the promised rent
A tenancy for years may also terminate if the tenant ____ the tenancy and the landlord ___
surrenders; accepts.
The same formalities required for creation of the leasehold (see below) are required for ____
surrender (for example, if the unexpired term exceeds one year, surrender must be in writing).
A term of years lease greater than ____ in writing to be enforceable.
one year
A periodic tenancy is a lease which ____.
continues for successive intervals (for example, month to month) until either the landlord or the tenant gives proper notice of termination
One of the hallmarks of the periodic tenancy is that it is ____
continuous until properly terminated.
The periodic tenancy can be created ____
expressly or by implication/operation of law
The periodic tenancy can also arise by implication, in any one of three ways
- Land is leased with no mention of duration, but provision is made for the payment of rent at set intervals.
- An oral term of years in violation of the Statute of Frauds creates an implied periodic tenancy, measured by the way rent is tendered
- In a residential lease, if a landlord elects to hold over a tenant who has wrongfully stayed on past the conclusion of the original lease, an implied periodic tenancy arises measured by the way rent is now tendered.
How is a periodic tenancy terminated?
Notice, usually written, must be given.
How much notice is needed to terminate a periodic tenancy?
At common law, notice must be at least equal to the length of the period itself, unless otherwise agreed.
-> Usually, the notice also must be timed to terminate the lease at the end of a period
- This applies for month to month, week to week, but special rule for year to year
To terminate a year to year periodic tenancy at CL you need to give ____ notice, and under the restatement ____ (bar exam follows restatement)
6 months, 1 month
By private agreement, the parties may ____ these common-law prescribed notice provisions for terminating a periodic tenancy.
lengthen or shorten
The Tenancy at will
This is a tenancy of no fixed period of duration–it’s terminable at the will of either the landlord or the tenant.
A tenancy at will must be created by ____.
an express agreement that the lease can be terminated at any time
Unless the parties expressly agree to a tenancy at will, the payment of regular rent will cause a court to treat the tenancy as an ____
implied periodic tenancy.
If the lease gives only the landlord the right to terminate, ____ of the tenant. However, if only the tenant has a right to terminate, a similar right will ____ of the landlord.
a similar right will be implied in favor; not be implied in favor
In theory, a tenancy at will can be terminated by ____. But today, in most states, ____ are required to terminate a tenancy at will. Alternatively, a tenancy at will can be terminated by operation of ____
either party at any time; notice and a reasonable time to quit (meaning, vacate)
law (for example, due to death or commission of waste).
A tenancy at sufferance is created when ____
a tenant wrongfully holds over, meaning they remain in possession past the expiration of the
lease.
-> In such cases, we give this wrongdoer a leasehold estate (the tenancy at sufferance) to permit the landlord to recover rent.
The tenancy at sufferance lasts only until ____.
the landlord either evicts the tenant or elects to hold the tenant to a new tenancy
No notice of termination is required for the ____
tenancy at sufferance
Where the LL holds a tenant at sufferance to a new periodic tenancy the length of the new tenancy generally depends on ____
the way the rent was computed under the lease that has ended.
-> If the rent was computed on a monthly basis, the election creates a month-to-month periodic tenancy.
-> If the rent was computed on a quarterly basis though payable monthly, a quarter-to-quarter periodic tenancy is created
-> and if computed on an annual
basis payable monthly, a year-to-year periodic tenancy is created.
No matter how the rent is computed, the maximum tenancy that can be created by the election to hold the tenant to another term is a ____ tenancy.
year-to-year
For a hold over tenant being held to new lease the various promises made by the landlord and
the tenant in ____ become part of the tenancy for the additional term.
the original lease
Holdover commercial tenants may be held to a new year-to-year periodic tenancy if the original lease term was for ____. While, technically, the length of the new tenancy is based on the way rent was computed (and could be quarterly or some other time frame), if the original term was less than one year, the new tenancy is typically a ____ tenancy.
one year or more; month-to-month
Holdover residential tenants, however, are generally held to a ____ tenancy, regardless of the original term.
new month-to-month
If the landlord notifies the tenant before the lease expires that occupancy after the termination will be at an increased rent, the tenant, by holding over, is held to have ____
acquiesced to the new terms (even if the tenant actually objected to the new terms).
Exceptions to the hold-over doctrine:
(1) the tenant remains in possession for
only a few hours after termination or leaves a few articles of personal property
(2) the delay is not the tenant’s fault
-> In such cases, the landlord cannot bind the
tenant to a new tenancy.
At common law, covenants (meaning promises) in the lease were ____; that is, if one party breached a covenant (such as the promise to pay rent or to repair the premises), the other party could recover damages for that breach but the landlord-tenant relationship
persisted and the lease endured.
By contrast, today, the landlord can terminate the lease for ____, and the tenant can terminate the lease when the landlord breaches ____
independent
nonpayment of rent; the covenant of quiet enjoyment or the implied warranty of habitability.
An option to purchase real property is a separate contract supported by consideration
that is a continuing offer to sell the land at a specified price. As long as the option is contained within the lease itself, the consideration for the lease ____
supports the option.
Because it is an interest in land, an option to purchase real property as part of a lease agreement must be evidenced by ____
a signed writing to satisfy the Statute of Frauds.
Absent a contrary provision, the option in a lease lasts ____. The method of exercise is determined by the agreement. Generally, the party granting the option may keep the consideration regardless of whether ____; the consideration is for the continuing offer, and not money for the purchase.
as long as the lease; the option is exercised
Although the Rule Against Perpetuities applies to options, there is an exception for ____.
options attached to leases
-> so an option to purchase in a lease is enforceable even if it would otherwise violate the Rule.
The usual remedy for enforcement of an option to purchase is ____, but damages are also available.
specific performance
A tenant has two primary duties:
(1) to repair, and (2) to pay rent
A tenant need only ____ the premises.
maintain
It’s important to distinguish between a ____ (which a tenant is obliged to make) and a repair occasioned by ____ (which a tenant is not obliged to make).
routine repair; ordinary wear and tear
A tenant’s duty to repair is linked to the doctrine of ____
waste.
A tenant cannot damage (meaning, commit ____ on) the leased premises.
waste (all three types)
If the duty to maintain the premises is shifted to the landlord (by lease or statute), the tenant has a duty to ____
report deficiencies promptly.
Generally, a tenant may not commit ameliorative waste but there is a modern exception to this rule which permits a tenant to _____
make this type of change if the tenant is a long-term tenant and the change reflects changes in the neighborhood.
At common law, historically (not the rule now!), a tenant was responsible for ____ to the property, including loss attributable to ____
any loss; force of nature, such as hurricanes, earthquakes, or lightning strikes
If a residential tenant covenants to repair, the landlord usually remains obligated to repair (except for damages caused by the tenant) under the _____
nonwaivable “implied warranty of habitability”
A nonresidential tenant’s covenant to repair is enforceable, and a landlord may be awarded damages for breach based on ____
the property’s condition when the lease terminates compared with its condition when the lease commenced.
In the absence of a specific reference to ordinary wear and tear, a covenant to repair usually ____ such repairs. However, repair covenants frequently ____ ordinary wear and tear.
includes; exclude
If a tenant remains on the premises and fails to pay rent, the landlord can ____
evict through the courts or continue the relationship and sue for rent due.
It’s important to remember that the landlord must not engage in ____
self-help, such as changing the locks, forcibly removing the tenant, or removing any of the tenant’s possessions.
-> Self-help is flatly outlawed and is punishable civilly and criminally.
Suppose that a tenant wrongfully vacates with time left on a term of years lease. What are the landlord’s options?
S I R
- Surrender: The landlord could choose to treat the tenant’s abandonment as an implicit offer of surrender, which the landlord accepts, thereby ending the lease
- Ignore the abandonment (meaning, do nothing) and hold the tenant responsible for the unpaid rent until the natural end of the lease, just as if the tenant were still there. (only MINORITY of states agree)
- Re-let the premises on the wrongdoer-tenant’s behalf, and hold the wrongdoer-tenant liable for any deficiency.
Under the majority rule where a TT wrongfully vacates, the landlord must at least try to ____
re-let.
Most states restrict the amount of security deposits to ____, require landlords to pay interest on security deposits, and allow ____ for a landlord’s improper refusal to return a security deposit.
one month’s rent; statutory or punitive damages
–> Clauses in leases that attempt to avoid these state laws are void.
The landlord is permitted to retain a security deposit for damages ____ to the premises.
actually suffered
If the entire leasehold is taken by eminent domain, the tenant’s liability for rent is ____ because both the leasehold and reversion have merged in the condemnor and there is no longer a leasehold estate. The lessee is entitled to ____. However, if the taking is ____, the tenant is not discharged from the rent obligation, but is entitled to ____ (that is, a share of
the condemnation award) for the taking.
extinguished; compensation
temporary or partial; compensation
If the tenant uses the premises for an ____ purpose, the landlord may terminate the lease or obtain damages and injunctive relief.
illegal
The majority rule requires that the landlord put the tenant in ____ of the premises at the beginning of the leasehold term.
If prior holdover T is still on sight = LL has ___ and new T gets ___
actual physical possession
breached; damages
THE IMPLIED COVENANT OF QUIET ENJOYMENT arises by implication in ____
every residential and commercial lease.
THE IMPLIED COVENANT OF QUIET ENJOYMENT provides that a tenant has a right ____
to quiet use and enjoyment of the premises, without interference from the landlord or a paramount title holder
Actual eviction occurs when the landlord, a paramount title holder, or a hold-over tenant excludes the tenant from ____.
the entire leased premises
Actual eviction terminates the tenant’s obligation to ____
pay rent.
Partial actual eviction occurs when the tenant is physically excluded from ____.
only part of the leased premises
Partial eviction by the landlord relieves the tenant of the obligation to pay rent for ____
the entire premises, even though the tenant continues in possession of the remainder.
Constructive eviction occurs when the landlord’s breach of duty renders the premises ____
unsuitable for occupancy
Elements of constructive eviction:
S I N G
- Substantial Interference
- Notice
- Goodbye
A tenant who has been constructively evicted may ____
terminate the lease and may also seek damages.
Is the landlord liable to a tenant for the wrongful acts of other tenants? As a general rule, ___.
But there are two exceptions:
no
- A landlord has a duty to abate a nuisance on site
- A landlord must control common areas
Most jurisdictions imply a covenant of habitability into ____ leases.
residential
THE IMPLIED WARRANTY OF HABITABILITY is not ___
waivable
The implied warranty of habitability provides that the premises must be fit for ____
basic human habitation
If the implied warranty of habitability is breached, the tenant’s options are
Move, Repair, Reduce, Remain
- Move out and terminate the lease
- Repair and deduct (allowable by statute in a growing number of jurisdictions; a tenant may make the reasonable repairs and deduct their cost from future rent)
- Reduce rent or withhold all rent until the court determines fair rental value (typically, the tenant must place withheld rent into an escrow account to show their good faith)
- Remain in possession, pay full rent, and affirmatively seek money damages
Remember the difference between the covenant of quiet enjoyment (where to plead constructive
eviction successfully the tenant must ____), and the implied warranty of habitability, where the tenant could but ____.
vacate; is not required to vacate
In many states, a landlord may not terminate a lease or otherwise penalize a tenant in retaliation for the tenant’s ____
exercise of their legal rights.
If a tenant lawfully reports a landlord for
housing code violations, the landlord is barred from penalizing the tenant by ____
raising rent, ending the lease, harassing the tenant, or taking any other reprisals.
Many statutes presume a ____ motive
if the landlord acts within, for example, 90 to 180 days after the tenant exercises their rights. To overcome the presumption, the landlord must show ____
retaliatory; a valid, nonretaliatory reason for their actions.
The Civil Rights Act bars ____ discrimination in the sale or rental of all property
racial or ethnic
The Fair Housing Act protects tenants and potential tenants from discrimination based on ___
race, color, religion, national origin, sex, or disability, as well as familial status (except in senior housing).
Except as relates to advertising, the Fair Housing Act does not apply to:
(1) owner-occupied buildings with four or fewer
units in which persons live independently of each other; and
(2) single-family homes sold or rented by an owner who owns no more than three single-family homes.
Under the Fair Housing Act, it is unlawful to take certain actions because of a person’s race, color, religion, sex, disability, familial status, or national origin, including:
- Refusing to negotiate, rent, or sell housing or make available a mortgage loan or other financial assistance;
- Providing different terms or conditions for the sale or rental of a dwelling or for a mortgage or other financial assistance; and
- Falsely representing that a dwelling is not available for inspection, sale, or rental.
It is also unlawful under the Fair Housing Act to ____ that indicates any preference or
limitation based on race, color, religion, sex, disability, familial status, or national origin.
This provision may be violated by ____ who makes a discriminatory advertisement (such as a landlord) as well as by the ____ that prints it.
-> The exemptions stated above do not apply in relation to advertising.
make, print, or publish any notice or advertisement
the person; newspaper or other publisher
When the Fair Housing Act applies, landlords must permit disabled tenants to make ____ to existing premises to accommodate their disabilities at the ____ expense. Landlords must also make reasonable accommodations in rules,
policies, and services when necessary to afford a disabled person an ____
reasonable modifications; tenants’ own
equal opportunity to use a dwelling.
In the absence of some prohibition in the lease, a tenant may ____ their interest in whole or in part.
freely transfer
In the lease, a landlord can prohibit a tenant from assigning or subletting without ____. However, once a landlord consents to one transfer by a tenant, the landlord waives the right to ____, unless the landlord expressly reserves the right (again) = known as the Rule in Dumpor’s Case.
the landlord’s prior written approval; object to future transfers by that tenant
A transfer will be considered a sublease, rather than an assignment, only when the original tenant reserves ____
time for herself
An assignee stands in the shoes of the ____ in a direct relationship with the landlord; that is, the assignee and the landlord are in “____,” and each is liable to the other on all covenants in the lease that “____.”
original tenant; privity of estate; run with the land
After assignment, the original tenant is no longer in ____ with the landlord, but their ____remains in effect and enforceable.
privity of estate; lease contract (privity of contract)
When there is an assignment what does it mean that the original tenant is in privity of contract
They are secondarily liability to each other
A covenant runs with the land if the original parties to the lease so___ and if the covenant “____” the land
intend
touches and concerns (that is, benefits the landlord and burdens the tenant (or vice versa) with respect to their interests in the property).
Because a covenant to pay rent ____, the assignee owes rent directly to the landlord
runs with the land
If a tenant’s assignee fails to pay rent (or breaches another covenant), the landlord can sue the ____ because of privity of estate and, if the assignee cannot pay, can also sue the ____ because of privity of contract.
assignee; original tenant
If the assignee reassigns the leasehold interest, their____ with the landlord ends, and they have ____ for the subsequent assignee’s failure to pay rent.
privity of estate; no liability
A sublessee is the tenant of ____ and usually pays rent to them, who then pays the landlord
the original lessee
A sublease arises when T1, the original tenant, transfers ____ entire interest to T2.
less than her
A sublessee is not personally liable to the ____ for rent or for the performance of any of the covenants in the main lease unless the sublessee ____
landlord; expressly assumes the covenants.
If there’s a sublease, the relationship between L and T1 remains ____
fully intact
The sublease ____ terminates with the main lease.
automatically
A sublessee cannot enforce any covenants made by the landlord in ____, except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord.
the main lease
A valid covenant against assignment is considered waived if the landlord was ____
aware of the assignment and did not object
Lease covenants restricting assignment and sublease are strictly construed against
the ____.
landlord (Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa.)
If a tenant assigns or sublets in violation of a lease provision, the landlord usually may ___, but
the transfer is ___
terminate the lease or sue for damages; not void.
A landlord may assign the rents and reversion interest they own. This is usually done by deed when the landlord conveys a building to a
new owner. The tenants’ consent is ____
not required.
Where the landlord assigns there right, the original landlord and tenant remain in ____
privity of contract.
-> The original landlord also remains liable on all of the covenants they made in the lease.
Once tenants are given reasonable notice of the LL’s assignment, they must ____ the new owner as their landlord.
recognize and pay rent to
Caveat Lessee
Goes to LL’s Tort liability = The common law norm is: Let the tenant beware.
Thus, in tort, a landlord was under no duty to make the premises safe.
The benefit of all tenant covenants that touch and concern the land runs with the____ to the new owner.
landlord’s estate
Exceptions to caveat lessee
CLAPS:
- Common areas
- Latent defects
- Assumption of repairs
- Public use rule
- Short-term lease of furnished dwelling
A landlord has a duty of reasonable care in maintaining all ____
common areas (for example, hallways, stairwells, elevators).
A landlord must warn a tenant of ____.
-> Otherwise, the landlord will be liable for any injuries resulting.
hidden defects (meaning, a dangerous condition that the tenant couldn’t discover by reasonable inspection) of which the landlord has knowledge or reason to know
If the tenant accepts the premises after disclosure of latent defects, the tenant ____
assumes the risk; the landlord is no longer liable in tort.
The landlord’s obligation for latent defects in tort is a duty to ___, and not a duty to repair.
warn
While in tort a landlord is under no duty to make repairs, once repairs are undertaken, the landlord must ____
complete them with reasonable care.
what does this mean = if they are negligently done, then they are liable
A landlord who leases public space (for example, a convention hall or a museum), and who should know, because ____, that a tenant will not repair, is liable for any defects on the premises that cause injury to members of the public.
of the significant nature of the defect and the short length of the lease
A landlord who rents a fully furnished premises for a short period (for example, a summer cottage) is under a stricter duty. Such landlords are responsible for____ which proximately injures a tenant.
any defective condition (whether or not they knew of the defect)
Many courts now hold that a landlord owes a general duty of ___ toward residential tenants, and will be held liable for injuries in tort resulting from ____ if the landlord had notice of a defect and an opportunity to repair it.
reasonable care; ordinary negligence
A landlord generally is held to have notice of defects existing before the tenant took possession but is not liable in tort for defects arising ____ unless the landlord knew or should have known of them.
after the tenant takes possession
If the landlord has a statutory duty to repair (for example, housing codes), the landlord is liable in tort for injuries resulting from the landlord’s ____ in making repairs
failure to repair or negligence
Some courts hold landlords liable in tort for tenant injuries inflicted by the criminal conduct of third parties in cases where the landlord ____
failed to comply with housing code provisions dealing with security, maintain ordinary security measures, or provide advertised security
measures (for example, surveillance cameras).
A fixture is a chattel that has been so affixed to land that it has ____. A fixture passes with the ownership of the land and must ___.
ceased being personal property and has become part of the realty; stay put
How to tell that a given chattel is a fixture and must stay put: there are two ways to tell.
- First, when items are incorporated into the realty so that they lose their identity.
- Second, a chattel affixed to realty is a fixture when its removal would cause considerable damage to the premises.
-> Common examples here: plumbing, heating ducts, a furnace.
A common ownership case is one in which the person who brings the chattel to the land owns both the chattel and the land. That item is a fixture if the party who made the annexation objectively intended to ____. This intention is determined by: ___
make the item part of the realty
the nature of the article, the manner of attachment, the amount of damage that would be caused by its removal, and the adaptation of the item to the use of the realty.
In divided ownership cases, the chattel is owned and brought to the realty by someone other than the landowner (for example, by a
tenant, licensee, or trespasser). ____ the annexor’s intent to make the chattel a permanent part of the real estate.
Accession
Suppose that a tenant installs a chandelier onto the leased premises’ ceiling. How can you tell whether that tenant installation qualifies as a fixture, in which case it must stay put because fixtures pass with ownership of the land?
An agreement between the landlord and tenant is controlling on whether an annexed chattel is a fixture.
Absent an agreement, a tenant is deemed to lack the intent to permanently improve the property, and thus may ____
remove his annexed chattels if removal does not substantially damage the premises or destroy the chattel.
Annexed chattels must be removed by the end of the lease term (or within a reasonable time after the termination of an indefinite tenancy), and the tenant is responsible for ____
repairing any damage caused by the removal.
The same rules apply in the life tenant-remainderman context as in landlord-tenant situations, except that the life tenant’s representative may remove annexations within a reasonable time after ____
the life tenant’s death.
Licensees are treated much like tenants, whereas trespassers normally ____ annexations.
Some courts, however, allow a good faith trespasser recovery measured by ____
lose their = Thus, absent a statute, an adverse possessor or good faith trespasser cannot remove fixtures (for example, house erroneously constructed on a parcel that possessor believed she owned).
the value added to the land (not construction costs).
An easement is a grant of a ____ property interest that entitles its holder to some form of use or enjoyment of ____
nonpossessory; another’s land.
An easement is presumed to be of ____ duration unless the grant specifically limits the interest.
perpetual
TYPES OF EASEMENTS - grants
Affirmative and negative
An affirmative easement is the right to ____
go onto and do something on servient land (meaning, the land that is imposed upon by the easement).
The negative easement entitles its holder to ____
prevent the servient landowner from doing something that would otherwise be permissible.
Negative easements are generally recognized in only four
categories
Remember L A S S :
- Light
- Air
- Support
- Stream water from an artificial flow
+ A minority of states also allow a negative easement for scenic view.
Negative easements can only be created ___, by a writing signed by the ____.
expressly; grantor
-> There is no natural or automatic right to a negative easement.
TYPES OF EASEMENTS - rights
Appurtenant and in Gross
An easement is appurtenant when it ____.
benefits its holder in his physical use or enjoyment of his own land
How will you know when you’ve got an easement appurtenant?
Two parcels of land must be involved:
- a dominant tenement, which derives the benefit
- a servient tenement, which bears the burden
An easement is in gross if it ___
confers upon its holder only some personal or pecuniary advantage that is not related to their use or enjoyment of their land.
How will you know when you’ve got an easement in gross?
only one parcel is involved = Servient land is burdened. However, there is no benefited or dominant tenement (because the easement benefits the holder rather than another parcel).
The appurtenant easement passes automatically with transfers of the ____ tenement, regardless of whether it is even mentioned in the conveyance
dominant
The burden of the easement appurtenant also passes automatically with the servient estate, unless the new owner is ____
a bona fide purchaser without notice of the easement.
The benefit of an easement appurtenant cannot be conveyed apart from the ____
dominant tenement.
-> The only exception to that rule is a conveyance of the easement to the owner of the servient tenement to extinguish the easement.
An easement in gross is not transferable unless ____
it is for commercial purposes.
Basic methods of creating an easement
P I N G:
- Prescription
- Implication
- Necessity
- Grant
Any easement must be memorialized ___ and signed by the holder of the ____ tenement unless its duration is brief enough to be outside the coverage of a particular state’s Statute of Frauds (< 1 year).
in writing; servient
Easements by implication are created by operation of law; they’re an exception to the ____
Statute of Frauds
Easement Implied from Preexisting Use (also known as a “quasi-easement”) elements
- the previous (prior to division) use on the servient part was apparent and continuous AND
- the parties expected that the use would survive division because it is reasonably necessary to the dominant tenement’s
use and enjoyment
In two limited situations, easements may be implied without preexisting use.
- Subdivision Plat
- Profit à Prendre
When lots are sold in a subdivision with reference to a recorded plat or map that shows streets leading to the lots, buyers of the lots have implied easements to ____
use the streets to access their lots.
The holder of a profit à prendre has an implied easement to pass over the surface of the servient land and to use it as reasonably necessary to _____, as specified by the terms of the profit.
extract from the servient property its minerals or some product of the servient property (such as timber, fish, or game)
For easements by necessity the owner of the servient parcel has the right to ____
locate the easement.
An easement by necessity (another form of easement by implication) will be implied when
a landowner conveys a portion of her land with no way out except over some part of the grantor’s remaining land.
Elements to acquire a prescriptive easement
C O A H:
- C: Continuous and uninterrupted use for the given statute’s period
- O: Open and notorious use (that is, it’s discoverable upon inspection)
- A: Actual use that need not be exclusive
- H: Hostile use (meaning, use without the servient owner’s consent)
An easement by prescription is acquired by analogy to ___
adverse possession
____ defeats the acquisition of an easement by prescription because it makes it non-hostile.
Permission
Prescriptive easements cannot be acquired in ____
public land
An easement by ____ arises when a grantor conveys title to land but reserves the right to continue to use the tract for a special
purpose.
reservation
Under the majority view, an easement can be reserved only for the ____. An attempt to reserve an easement for anyone else is ____.
grantor; void
The scope of an easement is determined by the terms of the grant or the conditions that created it. If an easement is created but not specifically located on the servient tenement, an easement of sufficient width, height, and direction for the ___ will be implied.
intended use
If there are no specific limitations in the grant, courts assume that an easement was intended to meet both ____ of the dominant tenement (so, for example, an easement may widen to accommodate
new, wider cars). If, however, the dominant parcel is ____, the lot owners will not succeed to the easement if to do so would unreasonably overburden the servient estate.
present and future needs; subdivided
When confronted with an exam question involving overuse or misuse of an easement, remember that such use does not ____ the easement. The appropriate remedy for the servient owner is a ____ against the misuse.
terminate; injunction
The servient owner generally may use her land in any way she wishes so long as her conduct does not ____.
The easement holder has the duty to make repairs to the easement if she is the____; but if both the easement holder and the servient owner are users, the court will ____ the repair costs.
interfere with the easement
sole user; apportion
Eight ways to terminate an easement
END CRAMP:
- Estoppel
- Necessity
- Destruction
- Condemnation
- Release
- Abandonment
- Merger
- Prescription
An oral expression of an intent to abandon an easement won’t terminate an easement unless it’s also ____.
But if the servient owner materially changes their position in reasonable reliance on the easement holder’s assurances or representations (such as that the easement will no longer be enforced), the easement terminates
through ____
committed to writing (a release) or accompanied by action (abandonment).
estoppel.
Easements created by necessity expire as soon as ____, unless the easement was ____.
the necessity ends; reduced to an express grant
Destruction of the servient land, other than through the ____, will terminate the easement.
willful conduct of the servient owner
Condemnation of the servient estate by ____ will terminate the easement.
governmental eminent domain power
-> Note: Courts are split as to whether easement holders are entitled to compensation.
A release given by the easement holder to the servient land owner will terminate the easement, this release must be ___.
In writing
What must an easement holder show to terminate an easement by abandonment?
They must show by physical action an intent to never use the easement again.
Mere nonuse, or mere words (such as expressing a wish to abandon), are
____ to terminate by abandonment
insufficient
–> though oral expressions combined with a long period of nonuse may be sufficient.
An easement is extinguished when title to the easement and title to the servient land become vested in ____
the same person (because a person doesn’t need an easement over their own land).
-> Those estates merge and the easement is destroyed.
After merger of a dominant/servient estate they are separated again the easement is ____ reinstated.
not automatically
A servient owner may extinguish the easement by interfering with it in accordance with the elements of adverse possession, referred to as:
by prescription
Elements of terminating an easement by prescription
C O A H:
- C: Continuous interference
- O: Open and notorious
- A: Actual
- H: Hostile to the easement holder
Courts will treat a wall erected partly on the property of each of two adjoining landowners as belonging to ____. Courts will also imply mutual cross-easements
of support, with the result that ____
each owner to the extent it rests upon their land.
each party can use the wall or driveway and neither party can unilaterally destroy it.
A written agreement is required by the Statute of Frauds for the express creation of a party wall or common driveway agreement, but an ____ can arise from detrimental reliance on a parol agreement. Party walls and common driveways can also result from ____
“irrevocable license”
implication or prescription.
If party wall or common driveway owners agree to be mutually responsible for maintaining the wall or driveway, the burdens and benefits of those promises run to ____
the successive owners of each parcel
The license is a ____
mere privilege to enter another’s land for some delineated purpose.
Unlike an easement, a license is not an interest in land; it’s merely a privilege, revocable ____
at the will of the licensor.
License is personal to the licensee and, thus, ___. An attempt to transfer a license results in ____
inalienable; revocation by operation of law.
A writing is ____ to create a license.
not needed
A failed attempt to create an easement results in a ____
license.
Licenses are ____, at the will of the licensor, unless ____ applies to bar revocation.
freely revocable; estoppel
The classic license cases
- The ticket cases (freely revocable license)
- Neighbours talking by the fence (beware of seemingly oral easements = license_
When will estoppel apply to bar revocation of a license?
Only when the licensee has invested substantial money or labor or both in reasonable reliance on the license’s continuation.
When a licensee detrimentally relies on a license it becomes an
____, which lasts until the holder receives ____
easement by estoppel; sufficient benefit to reimburse him for his expenditures.
A license coupled with an interest is irrevocable as long as the ____
interest lasts.
E.g., the buyer of a chattel may enter the seller’s land to remove the chattel, or a future interest holder may enter and inspect the land for waste.
The profit entitles its holder to enter the servient land and____
take from it some resources, for example, the soil, some substance of the soil (such as minerals, timber, or oil), or some product of the property (such as fish or game).
All of the rules governing creation, alienation, and termination of easements are applicable to profits. In addition, a profit may be extinguished through ____
surcharge (misuse that overly burdens the servient estate).
The covenant is a written promise to ___
do or not do something related to land.
A covenant is unlike the easement because it is not the grant of a
___. Instead, it is a ____ or promise regarding land
property interest; contractual limitation
Type of covenants
Negative and Affirmative
A restrictive covenant is a promise to ____
refrain from doing something related to land.
The affirmative covenant is a promise to ____
do something related to land.
Covenant vs. Equitable Servitude - How will you know which analysis to apply?
- If the plaintiff wants money damages = you must construe the promise as a covenant.
- If the plaintiff wants an injunction = you must construe the promise as an equitable servitude.
In covenant parlance, one tract is ____ by the promise and another is ____.
burdened; benefited (need to be analyzed separately for determining if the convenant can be enforced)
If the following requirements are met, any successor in interest to the burdened estate will be bound by the covenant as if they themselves had expressly agreed to it:
Remember W I T H N:
- Writing: Original promise (between A and B) must have been in writing
- Intent: The original covenanting parties (A and B) must have intended that the covenant would run (Courts are generous in finding the requisite intent)
- Touch and concern: The promise must affect the parties’ legal relations as landowners and not simply as members of the community at large.
- Horizontal and vertical privity
- Notice
Restrictive covenants touch and concern the land if they ____.
Affirmative covenants touch and concern the land if they require the holder of the servient estate to do something that ____.
restrict the burdened parcel owner in her use of that parcel of land
increases her obligations in connection with the land
Covenants to pay money to be used in connection with the land (such as homeowners’ association fees) and covenants not to compete ___ touch and concern the land.
do
Both ____ privity are required for the burden to run.
horizontal and vertical
Horizontal privity refers to the nexus between the ____
original promising parties (A and B).
Horizontal privity requires that they be in succession of estate, meaning that they were in a ____ relationship when the covenant was created.
In other words, at the time the promisor
entered into the covenant with the promisee, the two must have shared ___ in the land independent of the covenant.
grantor-grantee or landlord-tenant or mortgagor-mortgagee
some interest
___ privity is difficult to establish. Its absence is the reason why many ___ will not run.
Horizontal; burdens
Vertical privity refers to the nexus between _____.
the successor in interest (A-1) and the originally covenanting party (A)
Vertical privity simply requires some ____.
non-hostile nexus, such as contract, devise, or descent
The only time vertical privity will be absent is when ____
the successor acquired her interest through adverse possession.
The successor of the burdened estate must have had ___ of the promise when she took.
notice (actual, inquiry, or record notice of the covenant)
Elements for the benefit of a covenant to run
Remember W I T V
- Writing: original promise (between A and B) must have been in writing.
- Intent: the originally covenanting parties (A and B) must have intended that the benefit would run
- Touch and concern: the promised performance benefits the promisee and her successors in their use and enjoyment of the benefited land.
- Vertical privity: non-hostile nexus between the original promisee (B) and the successor in interest (B-1)
Horizontal privity is not required for the ____ to run
benefit
Where horizontal privity is lacking, the promisee B’s successor (B-1) can enforce the covenant against the ____, but not against the ___
original promisor (A); promisor’s successor (A-1)
Generally, promises to pay money to be used in connection with the land (for example, homeowners’ association fees) and covenants not to compete ___
run with the land.
Racially restrictive covenants are ____
unenforceable.
A covenant may be terminated by:
(1) a written release,
(2) the merger of the benefited and burdened estates, or
(3) the condemnation of the burdened property
An equitable servitude is a promise that equity will enforce against successors of the burdened land regardless of whether ____, unless the successor is a bona fide purchaser (meaning, a subsequent purchaser for value without notice of the
covenant).
it runs with the land at law
Elements to create an equitable servitude that will bind successors:
Remember W I T N E S:
- Writing: Generally, but not always, the original promise was in writing
(the common scheme doctrine, discussed below, is an exception to this requirement)
- Intent: The original parties intended that the promise would be enforceable by and against successors
- Touch and concern: The promise affects the parties as landowners
- Notice: Subsequent purchasers of land burdened by the covenant had actual, inquiry, or record notice of the covenant when they acquired the land.
–> Note: This rule is part of the law of equitable servitudes, and exists apart from the recording acts, so notice is required to bind a subsequent purchaser regardless of whether they seek the protection of a recording act.
- ES, for equitable servitudes
In most states, successors of burdened land who are not purchasers (such as donees) are bound by the covenant whether or not ____.
they had notice
In contrast to real covenants, which require vertical and horizontal privity of estate for burdens to run, and vertical privity for benefits to run, _____ is required for an equitable servitude to be enforceable by and against assignees.
no privity of estate
The Implied Equitable Servitude is essentially an exception to the general requirement that ____
the original promise be in writing
Under the common scheme doctrine, the court will imply a ____ to hold the unrestricted lot holder to the promise.
reciprocal negative servitude
–> Thus, if a developer subdivides land, and some deeds contain restrictive covenants while others do not, the restrictive covenants will be binding on all parcels provided there was a common scheme of development and notice of the covenants.
Elements of the general or common scheme doctrine:
1 - When the sales began, the subdivider (A) had a general scheme of residential development which included the defendant’s lot (the scheme may be evidenced by: a recorded plat, a general pattern of restrictions, or oral representations to early buyers); and
2 - The defendant lot-holder (B) had notice of the promise contained in those prior deeds when it took.
Forms of Notice for the Elements of the Common Scheme Doctrine
- Actual notice, meaning the defendant had literal knowledge of the promises contained in the prior deeds
- Inquiry notice, meaning the neighborhood seems to conform to the common restriction (it’s the “the lay of the land”)
- Record notice, meaning the form of notice sometimes imputed to buyers on the basis of the publicly recorded documents (so, there’s a prior deed with the covenant in grantee’s chain of title)
If the Common scheme arises after some lots are sold, no implied servitude can arise with respect to the lots ____
already sold without express covenants.
–> Example: if Lots 1 through 5 are sold without a restrictive covenant and the deeds to Lots 6 through 50 contain one, the covenant cannot be enforced as a servitude against the owners of Lots 1 through 5.
A court will not enforce an equitable servitude if:
- The neighborhood conditions have changed so significantly that enforcement would be inequitable.
- The person seeking enforcement is violating a similar restriction on his own land (unclean hands);
- A benefited party acquiesced in a violation of the servitude by a burdened party;
- A benefited party acted in such a way that a reasonable person would believe the covenant was abandoned or waived
(estoppel); or - The benefited party fails to bring suit against the violator within a reasonable time (laches).
The changed circumstances exception to the enforcement of an implied equitable servitude alleged by the party seeking release from the terms of an equitable servitude must be ____
so pervasive that the entire area or subdivision has changed.
-> What’s never good enough here is piecemeal change or mere pockets of limited change
Like other nonpossessory interests, an equitable servitude may be extinguished by:
(1) written release from the benefit holders,
(2) merger of the benefited and burdened estates, or
(3) condemnation of the burdened property.
Title by adverse possession results from the operation of the statute of limitations for ___
ejectment
Elements of adverse possession
Remember C O A H
- Continuous
- Open and notorious
- Actual and exclusive
- Hostile
An adverse claimant’s possession must be ____ throughout the statutory period.
continuous;
Intermittent periods of occupancy are not sufficient for AP. However, constant use by the claimant is not required as long as possession is of a type that ____
the usual owner would make.
There need not be continuous possession by the same person; an adverse possessor can ____ her own possession onto the periods of adverse possession of her predecessors in certain circumstances
tack
When is possession open and notorious?
The adverse possessor’s occupation must be sufficiently apparent to put the true owner on notice that a trespass is occurring.
What does actual possession mean?
An adverse possessor will gain title only to the part of the land they actually occupy. (with exception under color title for all)
If an adverse possessor enters under color of title (meaning by invalid deed), she is deemed to be in constructive possession of ____ that the deed describes, as long as she ___
all the land; is in actual possession of a reasonable portion of that land.
Exclusive possession means that the possessor is ____.
not sharing with the true owner or the public
Two or more people acting together could succeed in obtaining title by adverse possession; they would take title as ____
tenants in common.
The hostility requirement is satisfied if the possessor enters ____.
without the owner’s permission
Note that the adverse possessor’s state of mind is ____
irrelevant
-> It doesn’t matter whether the possessor actually thought that they were on their own land or knew that they were encroaching on another’s land.
When possession starts permissively (for example, by lease), possession does not become adverse until the possessor ____
makes clear to the true owner the fact that they are claiming “hostilely.”
A co-tenant must oust ___ or make an ____ to create adverse possession.
others; explicit declaration that they’re claiming exclusive dominion
Where a grantor stays in possession of land after their conveyance, they’re presumed to be there ____ of the grantee.
Likewise, if a tenant remains in possession after the expiration of the
lease, they’re presumed to have ____ of the landlord.
with permission; permission
-> and thus doesn’t satisfy hostility element of AP
When someone assumes possession with what they mistakenly believe is valid title, the possession is ____
hostile and adverse.
The statute of limitations begins to run when the true owner can first ____. Filing a suit will not stop the period from running, however; the suit must be ___
bring suit; pursued to judgment.
Most states ____ the adverse possessor to pay taxes on the property, but consider such payment good evidence of a claim of right for AP.
do not require
One adverse possessor may tack on to his time with the land his predecessor’s time, so long as there is ____
privity between the possessors.
Privity for AP is satisfied by ____. By contrast, privity is absent when the possessor acquires possession by ___ his predecessor in possession.
any non-hostile nexus, such as a contract, deed, or will; ousting
The statute of limitations for AP will not run against a true owner who is afflicted by a disability at the ___ of the adverse possession
inception
Only the disability of the ____ the cause of action arose is considered for AP exception.
owner existing at the time -> if someone with disability received after SOL started running, doesn’t matter
The statute of limitations does not run against a holder of a future interest until the interest becomes ____
possessory.
The event or condition giving rise to a grantor’s right of entry does not trigger the statute of limitations for purposes of adverse possession. The statute does not
begin to run until the right is ____ because, until that time, the grantee’s continued possession of the land is proper.
asserted by the grantor
If an adverse possessor uses the land in violation of a restrictive covenant in the owner’s deed for the statute of limitations period, they take ____. If, however, the possessor’s use complies with such a covenant, they take title ____.
free of the restriction
Title to government-owned land and land registered under a Torrens system (in place in a small minority of states, whereby title is established with a governmental authority that issues title certificates to owners) cannot be acquired by ____
adverse possession.
Every conveyance of real estate consists of a two-step process:
Step I: The land contract, which conveys equitable title.
-> The land contract endures until step II.
Step II: The closing, where the deed passes legal title and becomes our operative document.
The land contract, which conveys ___ title.
equitable
The closing is where the deed passes ____ title and becomes our operative document.
legal
The ____ date is generally set in the land contract
closing
Before the closing, ___ rules apply; after closing, we’re strictly in the realm of ___ law
Contracts; Real Property
If there are going to be problems in the sale of land, they generally arise during the period between the signing of the contract and the closing date. This is sometimes called the ____ period.
escrow
The land contract is the same as any other in terms of what is required to ____
make it enforceable (offer, an acceptance, and consideration + The contract must comply with the Statute of Frauds and there must not be any defenses to enforcement.)
Because the real estate contract involves an interest in land, the ____ requires a writing signed by _____—in other words, signed by the party currently
being sued.
Statute of Frauds; the party against whom enforcement is sought
In addition to that signature, to satisfy the SOF, the
land contract must:
- Identify the parties
- Describe the property, and
- Include the price (the consideration) or a means of determining the price (such as the fair market value as determined by an appraisal)
–> These terms must be definite enough for a court to enforce the contract
If a land contract overstates the size of a parcel what is the remedy?
Specific performance with a pro-rata reduction in price
Exception to the SOF for land contracts
the doctrine of part performance (specific performance remedy)
Part performance is an equitable doctrine allowing a buyer to enforce an oral real estate contract by specific performance if:
- The oral contract is certain and clear, and
- The acts of partial performance clearly prove the existence of a contract (two of possession, payment of purchase price or a significant portion of the purchase price, substantial improvements)
Under the doctrine of equitable conversion, once the land contract is signed, equity regards the ____ as the owner of the real property.
buyer
The right to possession rests with the party who holds ____ title. Thus, seller is entitled to possession until ____.
legal; closing
Remember that the contract conveys equitable title to the buyer. One important result flows from this:
DESTRUCTION
If between contract and closing, Blackacre (the property) is destroyed through no fault of either party, who bears the risk of loss?
The Buyer!
Even though the risk of loss is on the buyer after the land contract is executed, if the property is damaged or destroyed, the seller must ____ against the purchase price the buyer is required to pay.
credit any fire or casualty insurance proceeds they receive
What happens if one of the parties meets an unexpected end after the contract but before the closing?
The interests of the departed party pass to their estate.
Because the buyer is deemed to own the property from the moment the contract is signed, a deceased buyer’s interest passes as ____ to their estate.
real property
A deceased seller’s interest, the right to the purchase price, passes to their estate as ____. The contract remains enforceable, with the deceased party’s estate taking the decedent’s place in the transaction.
personal property
TWO PROMISES IMPLIED IN EVERY LAND SALE CONTRACT
- Seller Will Provide Marketable Title
- Seller Will Not Make False Statements of Material Fact
Marketable title is title ____
reasonably free from doubt and the threat of litigation.
The common defects that render title unmarketable are:
- Defects in record chain of title (most often, adverse possession)
- Encumbrances (mortgages, liens, easements, restrictive covenants)
- Zoning violations
If even a portion of the title rests on adverse possession, it is ____
unmarketable.
Unless a suit has been brought to ____, title acquired by adverse possession does not appear in the record.
quiet title
Generally, mortgages, liens, restrictive covenants, easements, options to purchase, and ____ encroachments render title unmarketable unless ____
significant; the buyer has waived them.
If an encroachment is ____, the encroachment won’t render title unmarketable.
very slight (a matter of inches) and doesn’t inconvenience the owner of the encroached-on parcel
An encroachment of a ____ likely will render title unmarketable
foot or more
An easement that is ____ to the buyer does not impair the marketability of title.
beneficial, visible, or known
-> Purchasers are generally presumed to have contracted to accept the land subject to visible (obvious) easements.
A seller has the right to satisfy a mortgage or lien at ____ with the proceeds of the sale.
closing
–> Thus, prior to closing, the buyer cannot claim that title is unmarketable because it is subject to a mortgage if the closing will result in that mortgage’s discharge.
Zoning restrictions do not affect marketability, but an ____ of a zoning ordinance does render title unmarketable.
existing violation
When a holder of a future interest is _____, it is impossible to convey marketable title. Courts will not appoint a guardian ad litem to represent them for the purposes of conveying land.
unborn or unascertained
Title must be marketable on ____. The seller has up until that time to clear up whatever defect is making the title unmarketable.
the day of closing
In an installment land contract, the seller need not provide
marketable title until ____
the buyer has made his last payment.
Once the closing occurs and the deed changes hands
the seller is ____ on this implied covenant of marketable title.The seller is then liable only for express promises made in the deed.
no longer liable; in the deed.
The buyer must ____ the seller that title is unmarketable and give the seller _____
notify; reasonable time to cure the defects.
If the seller fails to cure the defects in the marketable title, the buyer’s remedies include _____.
rescission, damages,
specific performance with abatement, and a quiet title suit
A ____deed does not in
any way affect the implied covenant to provide marketable title.
quitclaim
The second implied promise in all land contracts is that the seller will not make any _____
false statements of material fact
The seller may be liable to the purchaser after ____ for defects, if they ____ that the buyer relied on, actively ____ or failed to ____
the closing
knowingly made a false statement of material fact; concealed a defect; disclose known defects in the property.
To be liable for failure to disclose under the implied covenant in a land contract:
- The seller must know or have reason to know of the defect;
- The seller must realize that the buyer is unlikely to discover the defect; and
- The defect must be serious enough that the buyer would probably reconsider the purchase.
Factors increasing the likelihood that liability will be imposed in these cases include :
whether the property is a personal residence, whether the defect is dangerous, and whether the seller created the defect or made a failed attempt to repair it.
Can the seller avoid liability for fraud or failure to disclose by
including in the contract a disclaimer? (general vs. specific disclaimers)
General disclaimers = NO GOOD
If the disclaimer identifies specific types of defects = likely be upheld
The land contract contains no implied warranties of fitness or habitability. ____ is the common law norm.
Caveat emptor
Most courts recognize a warranty of fitness or quality in the sale of _____
a new home by the builder.
A person may sue a builder for ____ in performing a building contract. Some courts permit the ultimate buyer to sue the builder despite ____
negligence; lack of privity.
Courts presume that time is not “____” in real estate contracts. Thus, the closing date isn’t _____, and a party late in tendering their own performance can still enforce the contract if they ____ after the closing date.
of the essence; absolutely binding; tender within a reasonable time (for example, two months)
Time is of the essence in a land contract if
(1) the contract so states,
(2) the circumstances indicate that was the parties’ intent, or
(3) one party gives the other notice that time is of the essence.
If time is of the essence, a party who fails to tender performance on the closing date is ____. Even if time is not of the essence, a party who is late in tendering performance is liable for ____
in breach and may not enforce the contract
incidental losses.
The buyer’s obligation to pay and the seller’s obligation to convey are ____ conditions
concurrent
-> so, neither party is in breach until the other tenders performance (even if the closing date passes);
-> If neither party tenders performance, the closing date is extended until one of them does so.
A party to a land contract is excused from performing if the other party has ____ or it is ____ for the other party to perform, such as when unmarketable title can’t be cured.
repudiated the contract; impossible
The non-breaching party in a land contract is entitled to damages measured by the difference between ____ or, because land is unique, ____.
contract price and market value on the date of breach, plus incidental costs; specific performance
If the buyer wishes to proceed despite unmarketable title, they can usually get specific performance with ____
an abatement of the purchase
price.
Sales contracts usually require the buyer to deposit “____” with the seller and provide that if the buyer defaults in performance, the seller may retain this money as liquidated damages.
Courts routinely uphold the seller’s retention of earnest money if the amount appears to ____
earnest money; be reasonable in light of the seller’s anticipated and actual damages.
Real estate brokers are the seller’s agents but should disclose material information about the property if they ____
have actual knowledge of it
Traditionally, agents earned their commissions when they
produced a buyer who was ready, willing, and able to purchase the property = Therefore, the commission was owed regardless of ____.
The growing trend, however, is to award the commission only if the sale ____ or if it fails to close because of the fault of the ____.
whether the deal actually closed
actually closes; seller
Under an exclusive listing agreement with a real estate broker, the ____ is consideration for the broker’s commission
broker’s best efforts to sell the property -> “Best efforts” includes expenditure of time, effort, or money.
If the property is sold by the seller or another agent
during an exclusive listing period, the seller ____ to pay a commission.
still may have
A ____ policy insures that a good record title of the property exists as of the policy’s date and promises to defend the record title if litigated.
title insurance
Re title insurance
An owner’s policy protects only ____ (usually either the owner of the property and their successors to the property by operation of law, such as heirs or devisees, or the mortgage lender) and does not run with the land to subsequent purchasers. A lender’s policy follows ____.
the person who owns the policy; any assignment of the
mortgage loan
If the buyer permits the closing to occur, the contract is said to ____ with the deed (it disappears) and, in the absence of ____, the seller
is no longer liable on the promises in the contract, only those in the deed.
merge; fraud
To pass legal title from grantor to grantee the deed must be
“LEAD”: Lawfully Executed And Delivered
Executing a valid deed requires the following:
- A writing signed by the grantor
- An unambiguous description of the land
- Identification of the parties by name or description
- Words of intent to transfer, such as “grant”
+ The deed need not recite consideration, nor must consideration pass to make a deed valid (that’s in the land the contract)
The description of land in the deed need not be perfect, but it must be ____ and at least provide a ____
unambiguous; good “lead.”
If the description of the land is insufficient to provide a good lead, title isn’t transferred. The grantor retains title.
If a description is ambiguous, rather than vague or inadequate, ____ is permitted to clear up the ambiguity.
outside (parol) evidence
If a deed is delivered with the name of the grantee left blank, the court presumes ____
If, however, the ____ is left blank, the deed is void unless the grantee was explicitly given authority to fill in the description.
the person taking delivery has authority to fill in the name of the grantee
land description
A deed isn’t effective to transfer an interest in realty unless it has been ____.
delivered
Delivery turns on ____ that title pass immediately, even if possession is postponed. Acceptance is ____.
the grantor’s intent; presumed
The delivery requirement could be satisfied when the grantor physically or manually transfers the deed to the grantee. It’s permissible here to use ____
the mail or agent or messenger.
The standard for delivery is a legal standard and is a test solely of present intent. Ask:
did the grantor have the present intent to part with legal control
Acceptance of the deed is presumed, but if a grantee ____ the deed, the deed is ineffective to pass title
expressly rejects
If the grantor retains possession of the deed, it’s presumed that ____
it hasn’t been delivered
Conversely, if the grantee has possession of the deed, ___ is presumed
delivery
Delivery is presumed if the deed is:
- Handed to the grantee,
- Acknowledged by the grantor in front of a notary, or
- Recorded
All types of evidence, including the grantor’s conduct or statements before or after the alleged delivery, are admissible to prove ____.
Outside evidence is not permitted to show that an unconditional deed given directly to a grantee was ____.
the grantor’s intent to pass title
subject to a condition
A deed containing a written condition is ____ when delivered.
If the condition is the grantor’s death, the deed creates a ____ in the grantee.
generally valid
future interest (an executory interest)
A delivery to a third party with _____ is considered valid delivery.
instructions to deliver the deed to the intended grantee.
Whether a delivery to a third party without instructions is a valid delivery often hinges on
whether ____.
that third party is an agent of the grantor or the grantee = a delivery to the grantor’s lawyer is probably not delivery, while delivery to the grantee’s lawyer probably is.
Grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deed be delivered to the grantee once ____
certain conditions are met.
If anescrow agent is given written instructions, the grantor is ____. But, if the grantor gives the escrow agent oral instructions, the grantor may ____ while it’s still in the agent’s hands, unless there is a written contract of sale
bound by the delivery to the agent; change the instructions and recall the deed
If the grantor gives a deed to a third party with instructions to
turn it over to the named donee only when certain conditions occur, is there a valid delivery or can the grantor change her
mind and demand the deed back before the conditions occur?
It depends on the condition. If the condition is something other than ____ the grantor may retrieve it. If that is the condition, the grantor cannot get the deed back because they intended to presently convey a future interest
the grantor’s death (Although a condition that the grantee survive the grantor seems like the same thing as a condition of the grantor’s death, it isn’t)
There are three (+1) types of deeds used to convey property interests other than leaseholds
- The general warranty deed, 2. The special warranty deed, and
- The quitclaim deed
+4. Statutory Special Warranty Deed
-> The difference among these deeds is the scope of title assurance
Which covenants does a quitclaim deed contain?
It conveys only what the grantor has at the time of the conveyance.
Grantor isn’t even promising that he has title to convey.
This is the worst deed a buyer could hope for.
The General Warranty Deed
Warrants against all defects in title, including those attributable to grantor’s predecessors.
The general warranty deed typically contains all six of the following covenants
The three present covenants:
1. The covenant of seisin:
2. The covenant of the right to convey:
3. The covenant against encumbrances
The three future covenants:
4. The covenant for quiet enjoyment
5. The covenant of warranty
6. The covenant for further assurances
Present covenants means that the covenant is breached, if ever, at the time ____
the deed is delivered.
For real estate contracts,
remember that a purchaser is generally presumed to have contracted to accept the land subject to ____ (and therefore such easements do not impair marketability). For deeds, however, remember that most jurisdictions hold that the covenant against encumbrances is breached even if ____
visible easements; the grantee knew of the encumbrance (whether or not it is visible).
Covenant of seisin
Grantor owns this estate
Covenant of right to convey
They have the power to transfer
Covenant against encumbrances
no servitudes or liens on the land
A future covenant is not breached, if ever, until ____
the grantee is disturbed in possession (SOL runs at that time)
The covenant for quiet enjoyment
Grantor promises that grantee
will not be disturbed in possession by a third party’s lawful claim of title.
The covenant of warranty
Grantor promises to defend against reasonable claims of title by a third party and to compensate the grantee for any loss sustained by the claim of superior title.
The covenant for further assurances
Grantor promises to do whatever is needed to perfect grantee’s title if it later turns out to be imperfect.
The Special Warranty Deed
This deed contains the same covenants as the general warranty deed, but here the grantor makes those promises only on behalf of himself.
Statutory Special Warranty Deed - what is it
Many states have statutes that provide for what type of deed is conveyed by the use of the word “grant” in a conveyance without a designation of the type of deed.
Statutory Special Warranty Deed - assurances
These statutes provide for a deed that creates by implication two limited assurances against acts of the grantor (not her predecessors): (1) that the grantor has not
conveyed the same estate or any interest therein to anyone. other than the grantee and
(2) that the estate is free from encumbrances made by the grantor.
Present covenants can’t be enforced by ___ grantees, but future covenants run with the grantee’s estate. If there are successive conveyances by general warranty deed and the last grantee is evicted by lawful claim of title, he may sue ____
remote; anyone up the line
–> Some
states allow him to recover to the extent of consideration received by
a defendant-covenantor. Other states limit recovery to the lesser of what he paid or what the defendant-covenantor received.
A void deed will be set aside by the court even if the property has passed to a bona fide purchaser, but a voidable deed will be set aside only if ____
the property has not passed to a bona fide purchaser.
Void deeds include those that are ____
forged, were never delivered, were issued to a nonexistent grantee, or were obtained by fraud in the factum (that is, the grantor was deceived and did not realize that she was executing a deed).
Voidable deeds include those executed by ____, and those obtained through ____
minors or incapacitated persons; fraud in the inducement, duress, undue influence, mistake, and breach of fiduciary duty.
In a situation in which a joint owner attempts to convey property by forging the signature(s) of the other
owner(s): Such a conveyance would be valid as to the
interest of the owner whose ____ but void as to the
____.
signature is genuine; other owner(s)
-> Thus, if one joint tenant executes a deed for the
entire property with his own signature and the forged signature of the other joint tenant, the conveyance works a severance; the buyer would hold as a tenant in common with the joint tenant whose signature was forged.
Even when a deed complies with the required formalities, it may be set aside by the grantor’s CREDITORS if it was made
(1) with actual intent to hinder, delay, or defraud any creditor of the grantor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer, and the debtor was insolvent or became insolvent as a result
of the transfer.
–> However, the deed will not be set aside as against any grantee who took in good faith and paid reasonably equivalent value.
Most real estate closings require more than the exchange of a deed. They are complex events involving the signing of numerous documents and sometimes last-minute negotiations. These documents include:
- Closing Disclosure
- Notification of Defects
- Environmental Report
Residential mortgage lenders must provide a closing disclosure to mortgagors at least ____ prior to closing.
3 business days
The residential closing disclosure to mortgagors includes:
(1) principal, interest, and payment amounts (including taxes and insurance);
(2) closing costs;
(3) potential surprises to mortgagors (for example, future changes in interest rates or balloon payments); and
(4) cash required to close.
Notification of Defects
A seller of residential property must provide a form to the buyer at closing, notifying the buyer of any physical defects of which the seller is aware.
-> A seller who fails to disclose a known defect that must be disclosed in this form will be liable for the defect after closing.
Environmental Report
An owner of real property must generally pay to cure any environmental damage to the property, even if the damage occurred before the owner
owned the property.
As a result, buyers of commercial real estate often ask sellers to guarantee that the property complies with
environmental laws.
Sellers want to avoid making these environmental guarantees, and the parties must ultimately negotiate an environmental report, to be signed by both parties at closing, that identifies ____
which environmental guarantees the seller makes.
In addition to sales, real estate may be conveyed by gift or will. A deed may validly convey real property by inter vivos gift so long as there is
(1) donative intent, (2) delivery, and (3) acceptance.
If property is specifically devised or bequeathed in the testator’s will, but the testator no longer owns it at the time of death, the gift ___
fails
Ademption applies only to ____, which can be satisfied only by the delivery of a particular item, not by money. A gift of land is always a ____
specific bequests; specific devise.
If the testator specifically devises property and then sells or gives away a part of that property, only that portion is ____; the remainder_____
adeemed; passes to the devisee.
By statute, the ademption doctrine does not apply to the proceeds of a contract for sale of land that was ____ at the time of the testator’s death (that is, the devisee gets the proceeds in place of the land). These statutes take precedence over the equitable conversion doctrine.
executory
When property is damaged or destroyed before the testator’s death but the casualty insurance proceeds are not paid until after the testator’s
death, ____ does not usually apply. The ____ takes the insurance proceeds.
ademption; beneficiary of the
specific bequest
Similarly, ademption usually does not apply to property condemned by the government where the taking was ____ but the condemnation award was paid ____.
before death; after death
In addition, ademption does not apply when the contract is
entered into by the representative of an ____
incompetent testator.
At common law and in some states, the devisee of specific property is entitled to have the land “____” by the payment of liens and mortgages from the testator’s ____.
However, a majority of states have statutorily abolished the exoneration doctrine, requiring the will to ____
exonerated; residuary estate.
expressly provide for payoff.
A lapse occurs when the beneficiary of a gift in a will ___
dies before the testator.
Under the common law, if a lapse occurred, the gift was ___. However, nearly all states now have statutes that prevent lapse by permitting the gift to ____
void; pass to the predeceasing beneficiary’s living descendants under certain circumstances (Others apply to any relative, and still others apply to any beneficiary at all)
Many of the anti-lapse statutes apply only when the named beneficiary is a descendant of ___. Others apply if the beneficiary is more ____related, such as a descendant of the testator’s grandparent. Others apply to any ____, and still others apply to any ____ at all.
the testator; remotely; relative; beneficiary
The anti-lapse statute does not save the gift for the predeceasing beneficiary’s estate; rather, it substitutes the beneficiary’s descendants for the beneficiary. Thus, property will never pass under the anti-lapse statute to a predeceasing beneficiary’s
____
spouse.
If a class member within the coverage of an anti-lapse statute predeceases the testator leaving surviving issue, the statute will apply and ____ will take the deceased class member’s share of the gift.
the issue (descendants or offspring of a deceased class member)
The anti-lapse statute does not apply if there is a ____.
contrary will provision (for example, the gift is contingent on the beneficiary’s surviving the testator.)
If the estate assets are not sufficient to pay all claims against the estate and satisfy all devises and bequests, the gifts are abated (that is, reduced). Absent a contrary will provision, estates in most
states abate in the following order:
(1) property passing by intestacy,
(2) the residuary estate,
(3) general legacies, and
(4) specific devises
and bequests.
To the extent that a will disposes of real property, its validity and effect are determined by the law of the state where ____. With respect to dispositions of personal property, the law of the ____ controls the validity and effect of the will.
the property is located; testator’s domicile at the time of their death
Practically any kind of instrument ____ can be recorded, including deeds, mortgages, contracts to convey, or judgments affecting title to property.
affecting an interest in land
A subsequent BFP is not protected by the recording acts against interests that arise by ____
operation of law
In a race jurisdiction, B wins, if
he records properly before A does
In a notice jurisdiction, B wins if he was ____
a BFP when he took, regardless of whether he records before A does. In a notice state, the last BFP to take wins.
Types of recording statutes
Race, Notice, Race-Notice
In a race-notice jurisdiction, B wins if B
he is a BFP and he records properly before A does.
In both a notice and race-notice state, to prevail in a recording system question B must demonstrate that when he took he was a ___
BFP.
To be a bona fide purchaser, a grantee must:
- Be a purchaser (or a mortgage lender), not one who received the property by gift, will, or inheritance
- Pay valuable consideration
- Take without notice (actual, constructive, or inquiry) of the prior conveyance
The recording statutes protect _____. ____ are not protected because they don’t give value (unless the shelter rule applies).
purchasers; Donees, heirs, and
devisees
Two Routine Value Questions in recording issues
- The bargain basement sale (doesn’t need to be the FMV = doesn’t matter if he got a good deal)
- The case of the doomed donee: recording statutes do not protect donees, heirs, or devisees unless the shelter rule applies.
The notice element for BFP includes
actual, constructive (record), or inquiry notice
If another is in possession, B is charged with ____ of
that fact, regardless of whether B actually bothered to inspect or not.
inquiry notice
Inquiry notice also means that if a recorded instrument makes reference to ____, grantee is on inquiry notice
of whatever a reasonable follow-up would have revealed.
an unrecorded transaction
B is on record notice of A’s deed if, at the time B takes, A’s deed was properly recorded within the ____
chain of title.
Although no one has a legal duty to perform a title
search, a subsequent purchaser will be charged with the notice that such a search would provide, whether or not
____
she actually searches.
This is language of what type of recording statute: “A conveyance of an estate in land shall not be valid against a subsequent purchaser for value unless the conveyance is first recorded.”
Race Statute
This is language of what type of recording statute: “less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”
Notice Statute
This is language of what type of recording statute: “Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent
purchaser for value, without notice thereof, whose conveyance is first recorded.”
Race-Notice Statute
The subsequent purchaser under a notice statute prevails
even if they don’t ____.
record
In determining who is a BFP for purposes of protection of
the recording statutes, remember that the purchaser must be without notice at the time of ____
conveyance (It does not matter if she learns of an adverse claim after the conveyance but
before recording)
BFP—The Shelter Rule
Anyone who takes from a BFP will prevail against any interest the BFP would have prevailed against
–> This is true even if the grantee had actual notice of a prior unrecorded conveyance.
A “wild deed” is a deed that
is recorded but that isn’t connected to the chain
of title.
____ doesn’t impart constructive notice because a subsequent purchaser could not feasibly find it.
A wild deed
Estoppel by Deed rule
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires the title that he had previously
purported to transfer
Exception to estoppel by deed
If the dirty double dealer sells to another BFP after they actually get title = the later BFP will generally win (but analyze based on recording statute in the state)
A deed recorded ___ the grantor parts with title through a subsequent deed is not constructive notice in most states
after
Courts are split on whether deeds to adjacent lots or lots in a subdivision, executed by the same grantor and containing restrictions and easements involving the subject lot, are within the chain of title of the subject lot. The better view is that they ___
are not.
A plaintiff who obtains a money judgment can place a ____ on the defendant’s real property by filing the judgment in the appropriate
county office.
judgment lien
Unlike mortgage lenders, who are the same as any other BFP, judgment creditors and lienors ____ protected by the recording acts.
aren’t usually
In a mortgage the borrower is called the ____, and the lender is the ____.
mortgagor; mortgagee
The mortgage transaction involves two documents
the promissory note (personal obligation) and the mortgage (if the mortgagor quits paying, the land can be sold to pay the mortgage)
If the mortgagor quits paying,
in addition to foreclosure, the mortgagee has the option to sue the mortgagor ____ for payment of the note.
personally
It is possible for the debtor/notemaker and mortgagor to be _____
different people (for example, if a mother agrees to place a mortgage on her house to secure a loan given to her daughter).
There are two primary ways to mortgage Blackacre
the purchase money mortgage and the non-purchase-money mortgage.
The purchase-money mortgage is
an extension of value by a lender who takes as collateral a security interest in the very real estate that its loan enables the debtor to acquire
The mortgage typically must be in ____
writing to satisfy the Statute of Frauds.
Both the mortgagee or the mortgagor ____ transfer their interests
may
The creditor-mortgagee can transfer her interest by:
- Indorsing the note and delivering it to the transferee, or
- Executing a separate document of assignment
A mortgagee can freely transfer the note, and the mortgage ____ a properly transferred note.
automatically follows
When a mortgagor transfers the property, the buyer ____
either assumes the mortgage or takes the property subject to the mortgage
If a grantee ____ the mortgage, they’re agreeing
to be personally liable on the mortgage note. If they take the property ____ to the mortgage, they are not agreeing to personal liability; the mortgagee’s only recourse is foreclosure (they cannot maintain a suit against the grantee).
assumes; subject
If the grantee signs an assumption agreement, they become
primarily liable to the lender, while the original mortgagor is secondarily liable as a surety.
–> However, the mortgagee may opt to sue either the grantee or the original mortgagor on the debt
When transferring land subject to a mortgage if no assumption agreement is signed, the grantee is not personally liable on the loan, and the original mortgagor ____
remains primarily and personally liable.
Once a grantee has assumed a mortgage, any modification of the obligation by the grantee and mortgagee _____
discharges the original mortgagor of all liability.
Due-on-sale clauses, which appear in most modern mortgages, allow the lender to demand full payment of the loan if the mortgagor ____
transfers any interest in the property without the lender’s consent.
Generally, when a mortgagor transfers title to the property, the grantee _____
automatically takes the property subject to the mortgage.
For grantees the mortgage remains on the land as long as ____
the mortgage instrument was properly recorded (recording statutes protect mortgagees!)
The mortgagee must foreclose by _____. At foreclosure, the land is sold. The sale proceeds go to satisfying the debt.
proper judicial proceeding
The mortgagor may tender to the mortgagee a deed in lieu of foreclosure, which permits the mortgagee to take immediate possession without a foreclosure sale.
Since the deed in lieu of foreclosure is not an actual foreclosure, it doesn’t operate to terminate _____
any junior liens
that may be present on the mortgaged real estate.
What if the proceeds from the sale of Blackacre are less than the amount owed?
1 - First pay out attorney’s fees and foreclosure expenses
2 - Order of mortgages including accrued interest in order of priority (each claimant is entitled to satisfaction IN FULL before any junior creditor may take)
3 - Junior liens are paid off in order of their priority.
4 - Any remaining surplus goes to the debtor.
+ More senior interests to the foreclosed mortgage are unaffected
The default rule is that the priority of a mortgage depends on ____
when it was placed on the property
After a foreclosure sale all interests ___ to that one remain on the property, and all interests ___ to that one are extinguished.
senior; junior
Junior lienholders will be paid in ____ order with the proceeds from the sale, assuming funds are left over after full satisfaction of superior claims
descending
Junior lienholders whose interest in the mortgage are extinguished but weren’t fully paid out should be able to proceed for a ____. But once foreclosure of a superior
claim has occurred, with the proceeds distributed appropriately, junior lienholders can no longer ____
deficiency judgment; look to Blackacre for satisfaction.
Who are the necessary parties to the foreclosure action?
all junior lien holders + debtor
Failure to include a necessary party in a foreclosure proceeding results in ____ of that party’s claim, despite the foreclosure and sale.
the preservation
-> Thus, if a necessary party is not joined, their mortgage will remain on the land.
Foreclosure does not affect any interest senior to the mortgage being foreclosed. The buyer at the sale takes subject to such interest.
BUT Is the buyer personally liable on the senior debt?
No = but the property could be foreclosed on
As a creditor, you must ___ to get priority in foreclosure
record
Exception to first in time first in right rule for mortgages
Purchase money mortgage is a first (super) priority parcel (even if not first in time as long as they record properly)
By private agreement, a senior creditor may agree to ____. These Subordination agreements are ____
subordinate its priority to a junior creditor; permissible.
Equitable redemption is universally recognized up to the date of ___
sale.
Redemption in Equity
At any time prior to the foreclosure sale the debtor has the right to redeem the land by freeing it of the mortgage
How is the right of equitable redemption exercised when the note does not contain an acceleration clause?
Making the missed payment + accrued interest + costs
How is the right of equitable redemption exercised when the note does contain an acceleration clause?
Need to pay entire amount + accrued interest + costs to exercise right
A debtor-mortgagor cannot waive right to redeem in the mortgage itself on ____
THE FRONT END = no clogging the equity of redemption
Many states give the mortgagor a ____ to redeem for some fixed period after the foreclosure sale has occurred
statutory right
For the statutory right of redemption the amount to be paid is usually the _____
foreclosure sale price, rather than the amount of the original debt.
Mortgage Alternatives
- Deed of Trust
- Absolute Deed
- Installment Land Contract
- Equitable Vendor’s Lien
Sale leasback (A landowner may sell her property for cash and then lease it back from the purchaser for a long period of time). Like an absolute deed, this may be treated as a ____
disguised mortgage.
Deed of Trust
Some states call a security interest in land a deed of trust rather than a mortgage. The debtor/notemaker is the trustor. The trustor gives a deed of trust to a third-party trustee, who is usually closely
connected to the lender (the beneficiary). On default, the lender instructs the trustee to foreclose the deed of trust by sale.
An absolute deed, if given for security purposes, can be treated by the court as an ____ to be treated as any other
mortgage (that is, creditor must foreclose by judicial action).
“equitable” mortgage
An installment purchaser obtains legal title only when ____. Forfeiture clauses, allowing the vendor upon default to cancel the contract, retake possession, and retain all money paid, are common and ____ enforceable.
the full contract price has been paid off; generally
Equitable Vendor’s Lien
This lien does not result from an agreement but rather arises by implication of law when a seller transfers title to the buyer, and the purchase price or a portion thereof remains unpaid.
The zoning power is based on
the state’s police power and is limited by _____
the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the “no taking without just compensation” clause of the Fifth Amendment
Cities and counties can exercise zoning power only if _____
so authorized by a state enabling act
Zoning ordinances are generally invalid if ____
they have no reasonable relation to public welfare, are too restrictive, are discriminatory as to a particular parcel, are beyond the grant of authority, violate due process, or are racially discriminatory.
Variance
Permission to depart from zoning restriction (principal means to achieve flexibility in zoning)
What must a proponent of a
variance show?
undue hardship + no diminution to neighbouring property values
–> Usually, a variance will not be granted if the hardship has been created by the applicant themselves.
Previously allowed use that violates new zoning ordinance cannot eliminate all at once unless ____
just compensation paid
A nonconforming use cannot be ____ in ways that constitute a substantial change, but ____ changes are permitted.
Owners can make ____ to repair their premises and make them practicable for their purposes.
extended or intensified; insubstantial
–> If there is any doubt as to whether a change is substantial or insubstantial, the doubt is resolved against allowing the change.
reasonable changes
There are two types of zoning ordinances:
cumulative and noncumulative.
A cumulative zoning ordinance creates a ____
hierarchy of uses of land
Under a cumulative zoning ordinance, land that is zoned for a particular use may be used for
the stated purpose and anything higher
Hierarchy of zoning in cumulative ordinance system
a single-family home the highest use, followed for example by a two-family home (which is a lesser use), and then an apartment building (an even lesser use), and then a strip mall (even lesser), and then a factory (even lesser).
Under a noncumulative zoning ordinance, land may be used ____
only for the purpose for which it is zoned.
A ___ permit is one that must be obtained even though the zoning is proper for the intended use. It is often required for ___
special use; hospitals,
funeral homes, drive-in businesses, and so on.
In a condominium, each owner owns the ____ plus an undivided interest in the ____.
interior of their individual
unit; exterior and common elements
condominium unit ownership is treated as ____
fee ownership
The owner of each condominium is a member of the ____. The members vote to elect a ____, which manages the property.
homeowners’ association (HOA); board
What does the HOA oversee?
- the common elements
- enforce/run the governing rules
Each condominium unit owner must pay:
- regular (for example,
monthly) dues to the HOA to manage common elements - if monthly fees are not enough = one time fees can be due (special assessment)
In a ____, title to the land and buildings is held by a corporation that leases individual apartments to its shareholders.
cooperative
A cooperative because of
their economic interdependence and because the individual owners
are regarded as tenants, a direct restraint on the alienation of an individual interest is ____
valid.
An owner of real property has the exclusive right to use and possess the
surface, the airspace, and the soil of the property.
Ownership of land includes the right to have the land supported in its ____ by adjoining land.
natural state
A landowner is ____ if their excavation causes adjacent land in its natural state to subside (meaning, slip or cave in).
strictly liable
If land is improved by buildings and an adjacent landowner’s excavation causes that improved land to cave in, the excavator will be liable
only if ____. However, strict liability will apply to the defendant excavator’s actions if the plaintiff shows that, because of the defendant’s
actions, the plaintiff’s improved land would ____
negligent; have collapsed even in its natural state.
An underground occupant of land (for example, a mining company) must support the ____. Liability for subsequently erected buildings requires ___
surface and buildings existing on the date the subjacent estate was created; negligence.
For water rights different rules apply to ____
watercourses, groundwater, and surface
waters.
There are two major systems for determining allocation of water in watercourses: ____. A boundary line also can be affected by ____
the riparian doctrine and the prior appropriation doctrine; accretion or avulsion.
Riparian doctrine
the water belongs to those who own the land bordering the watercourse.
Riparian rights attach to ____ as long as one of the tracts abuts the water. Riparian owners can use water only in connection with the ___
all contiguous tracts held by the same owner; riparian parcel.
Natural Flow Theory (re: Riparian doctrine)
Under this theory, a riparian owner’s use is enjoinable if it results in substantial or material diminution of the water’s quantity, quality, or velocity.
Reasonable Use Theory (re: Riparian doctrine)
Under this theory, which is the most common, all riparians share the right of “reasonable use” of the water (that is, one owner’s use is not enjoinable unless it substantially interferes with the use of other riparian owners).
In determining “reasonable” use of Riparian rights, courts balance the utility of the owner’s use against the gravity of the harm. Six factors are helpful in making this determination:
alteration of flow, purpose of use, pollution, extent of use, destination of water taken, and miscellaneous conduct that may give rise to litigation.
Natural vs. Artificial Use (re: Riparian doctrine)
Under either theory, natural uses (human uses, for example, consumption, gardening) prevail over artificial uses (for example
irrigation, manufacturing).
Prior Appropriation Doctrine
The water initially belongs to the state, but the right to divert it and use it can be acquired by an individual through their actual use, regardless of whether or not they happen to be a riparian owner.
Appropriative rights are determined by priority of ____
beneficial use (The norm for allocation is first in time, first in right.)
Note that an appropriative right can be lost by abandonment.
Groundwater is water beneath the surface of the earth that isn’t confined to a known channel. Four doctrines determine rights in groundwater (+ one more)
- Absolute Ownership Doctrine
- Reasonable Use Doctrine
- Correlative Rights Doctrine
- Appropriative Rights Doctrine
- Restatement Approach
Absolute Ownership Doctrine
The owner of overlying land can take all the water they wish, for any purpose, including export.
Reasonable Use Doctrine
It is like absolute ownership,
but exporting is allowed only if it does not harm other owners who have rights in the same aquifer.
Correlative Rights Doctrine
Owners of overlying land own the underground water basin as joint tenants, and each is allowed a reasonable amount for his own use
Appropriative Rights Doctrine
Priority of use (not ownership of overlying land) is determinative.
Restatement Approach to ground water
A surface owner may pump groundwater unless it (1) unreasonably harms neighboring landowners, (2) exceeds the pumper’s reasonable share, or (3) directly and substantially affects surface waters and unreasonably harms surface water users.
Surface water is water ___
without a channel that passes over land, such as water coming from rain, springs, or melting snow, which has not yet reached a natural watercourse or basin.
A landowner can use surface water within their boundaries for ____
any purpose they desire
Questions on surface water usually concern liability for changing natural flow by dikes, drains, and so on. Liability depends on which theory the state follows, theories include:
- Natural Flow Theory
- Common Enemy Theory
- Reasonable Use Theory
Natural Flow Theory of surface water
owners cannot alter natural drainage patterns. This rule has been “softened” in most states to allow “reasonable changes.”
Common Enemy Theory of surface water
an owner can take any
protective measures to get rid of the water or combat its flow (for example, dikes or drainage changes). The rule has been modified by many courts to prohibit unnecessary damage to others’ lands.
Reasonable Use Theory of surface water
involves balancing the utility of the use against the gravity of the harm.
The above theories apply to redirecting surface water. A landowner can ____ as much surface water as they wish.
capture
Owners below have no cause of action for diversion of surface water unless the diversion was ____
malicious.
The right to airspace above a parcel is not exclusive, but the owner is entitled to ____
freedom from excessive noise.
The possessor of real property has the right to exclude others. Their remedies for invasions include actions for:
- Trespass
- Private nuisance
c. Continuing trespass ;
and
d. Ejectment or unlawful detainer + This action can be joined with a demand for money damages.
Trespass
Land invaded by tangible physical object
Private nuisance
land invaded by intangibles such as odors or noise
Continuing trespass
Land repeatedly invaded by trespasser
Ejectment or unlawful detainer
to remove a trespasser or tenant.
+ This action can be joined with a demand for money damages.
