Real Property

Question 1

Novation

Answer 1

Substitution of a new contract for an old one where the original contract agrees to release the other party and substitute a new one

Question 2

Lapse

Answer 2

causes devises to fail if beneficiary predecease testator

Question 3

Ademption

Answer 3

Causes to fail if either:
1) extinction - specifically devised property not owned by testator or destroyed/fundamentally changed at death
2) Satisfaction - beneficiary received denied property during testator’s life

Question 4

Exoneration

Answer 4

Allows beneficiary of specifically devised real property to use estate estate to pay off any encumbrances
1) Execution of lien doctrine - available at common law for mortgages and liens

Question 5

Abatement

Answer 5

reduces devises that cannot be satisfied by assets remaining after testators debts are paid

Residuary devised abated first, followed by general and then specific devises

Question 6

Lien Theory

Answer 6

Lender receives security interest in property. Mortgagor retains title and possession unless lthey forecloses

Majority rule compared to title theory

Question 7

Title Theory

Answer 7

Lender receives legal title and mortgage retains rights of possession. Title reverts to mortgagee once the debt is paid

Question 8

Absolute Deed

Answer 8

Debtor gives deed to creditor with intent to secure a loan

Question 9

Deed of Trust

Answer 9

Debtor gives deed of trust to 3rd party trustee as collateral for debt, and creditor can instruct trustee to foreclose upon default

Question 10

Installment Land Contract

Answer 10

Debtor agrees to buy land through installment payments and gets immediate possession, but seller keeps legal title until paid in full

Question 11

Sale-Leaseback

Answer 11

Seller leases property from buyer immediately after sale and sellers rental payments function as repayment on loan

Question 12

Equitable Vendor’s Loan

Answer 12

seller finances buyer’s purchase with equitable vendors lien when seller transferers title to buyer but purchase price not fully paid

Question 13

Presumptive Delivery of a Deed

Answer 13

Presumed to be delivered when recorded; subject to a rebuttable redemption
1) recorded
2) physical delivery of deed
3) unconditioned delivery to agent
4) grantees possession of property/deed

Can be implied by conduct

Question 14

Real Covenants

Answer 14

Enforceable by money damages

Two types:
Burden:
1) writing
2) intend to run
3) touch and concern
4) horizontal and vertical privity
5) notice

Benefit:
1) writing
2) intent to run
3) touch and concern
4) Limited to vertical privity
5) no notice required

Question 15

Equitable Servitude

Answer 15

Enforceable by equitable relief
Express:
1) writing
2) intent to run
3) touch and concern
4) notice

Implied:
1) intent common scheme
2) restrictive servitude
3) notice

Question 16

Horizontal Privity

Answer 16

promising parties simultaneously transfer the land and create the covenant

Question 17

Vertical Privity

Answer 17

successors have an unbroken chain of ownership from the original parties

Question 18

Termination of a Covenant

Answer 18

1) abandonment - affirmative act, more than neglect or no use, that clear intent to relinquish covenant

Question 19

Common Scheme Restrictions

Answer 19

a private negative restriction can imply notice if the owner intend to impose a servitude on all lots
- does not arise to lots sold prior to implementation of a common scheme

Question 20

Assumption of Mortgage

Answer 20

Grantee expressly agrees to pay and became primary liable for debt

original debtor becomes secondarily liable for debt

upon default lender can collect unpaid original debt from original or grantee

Original debtor can recover any amount paid from grantee

Question 21

Subject to Mortgage

Answer 21

grantee does not agree to pay and is not personally liable for debt

original debtor remains personally liable for debt

upon default, the lender can collect from original debtor only

Question 22

Unmarketable Title

Answer 22

(1) future interst if furte-interest holder does not agree to transfer
2) private encumbrances
3) significant physical defect
4) title acquired by adverse possession and not quieted by judicial decree
5) zoning violations

Unmarketable means not free from reasonable risk of litigation that a

Free from unreasonable risks of litigation at time of closing

Question 23

Due-on-Sale Clause

Answer 23

Mortgage document can contain federally enforceable provision that allow full recovery of debtor debt when transfers w/o lenders consent

Question 24

Due-on-Sale Clause Exceptions

Answer 24

1) devise, descent, or transfer upon death
2) transfer to spoke or child
3) transfer to ex-spouse on divorce
4) transfer to borrower’s living trust
5) creation of subordinate lien without
6) granting leasehold interest of less than 3 years w/o options to purchase

Question 25

Mortgage

Answer 25

an interest in real property that serves as security for repayment of a debt or other obligation.

Loan goes into default, mortgage holder may foreclose on property and use proceeds to satisfy outstanding debt

Question 26

“Wild” Deed

Answer 26

Deed that is not found within the chain of title - fails constructive notice to subsequent purchasers

Question 27

Seller’s Duty to Disclose

Answer 27

Majority: must disclose known material defect the buyer could not reasonably discover (Commercial)

Residencial - Exception - “as is” clause

Minority - no duty to disclose unless otherwise provided

Question 28

Defeasance Clause

Answer 28

requires creditor to give debtor legal title to property and release mortgage lien once all payments are made

Question 28

Due-On-Encumbrance Clause

Answer 28

allows creditors to accelerate mortgage if debtor obtains a second mortgage or otherwise encumbers property

Question 29

Acceleration Clause

Answer 29

allows creditor to demand entire loan due and payable if debtor defaults

Question 30

Joint Tenancy with Right of Survivorship

Answer 30

Right of survivorship joint tenants interest disappear upon death and remaining joint tenants automatically expand proportionally to absorb it

if unities destroyed then the tenancy in common is created

Possession - equal right to possesses entire
Interest - equal interest for each
Time - right created at the same time
Title - property intent record in same instrument

Question 31

Doctrine of Equitable Conversion

Answer 31

Buyer receives equitable title to real property upon entering a land-sale contract
- judgment obtained after land-sale contract is not enforceable against the real property

Question 32

Deed

Answer 32

to be valid required
1) written and signed by grantor
2) identifies grantor and grantee by name or description
3) identifies land by a reasonable certainty
4) includes words of transfer (“convey”, “transfer”, “grant”, or “Sell”)

Question 33

Right to Subjacent Support

Answer 33

Arise when owner of land grants right to mine mineral rights to 3rd party under surface of land

Owner may be:
1) strictliy liable to surface owner for any failure to support the land and any buildings that exists prior to grant OR liable for negligent for any damages to improvement built after mineral rights were converyed

Question 34

Nonexistent Grantee

Answer 34

a deed with a nonexistent grantee is void as to rights to that grantee

grantor retains the nonexistent cotenants interest in tenancy in common with other cotenants

Question 35

Severance of Joint Tenancy

Answer 35

Title Theory - mortgage constitutes transfer
Lease Theory - split, some state hold leases sever and transfers title

Question 36

Adverse Possession

Answer 36

1) Open and Notorious - apparent or visible to a reasonable owner
2) Continuous - uninterrupted for statutory period
3) exclusive - not shared with the owner
4) actual - physical presence on the land
5) Nonpermissive - hostile and adverse to the owner

Doctrines Tacking - allowed when parties have privity between two successive possessor; take by non-hostile means - descent devise, contract, deed

Question 37

Risk of Loss

Answer 37

Majority - equitable conversion - risk buyer during executory period (period between real estate contract and closing_

Minority - Uniform Vendor and Purchaser Risk Act - remains with seller until buyer takes possession of or receives legal title

Question 38

Rules Against Perpetuities

Answer 38

1) Does grantee have a contingent future interest
- includes contingent remainder, vested remainder, executory interest, option, power of appointment, right of first refusal
2) must vested event occur within 21 years after creation of interest
3) could interest vest - 21 years after validating life ends

Question 39

Lien Priority on Real Property

Answer 39

1) purchase-money mortgage
2) first recorded lien
3) all other recorded liens
4) unrecorded liens

Question 40

Fair Housing Act

Answer 40

Prohibits discriminatory actions based on race, color, religion, sex, handicap, national origin, or familicidal status

Exceptions:
1) religious organizations
2) private class incidental provide lodging
3) familial status for senior housing
4) owner of less than 3 single-family dwellings

Question 41

Seller to Refuses to Perform

Answer 41

Buyer can:
1) rescind the contract and seek restitution
2) seek specific performance OR
3) sue for damages

Question 42

Condemnation

Answer 42

Government take land for public use

Tenant rights depend on type
1) Partial - only part property taken - must continue pay rent but entitle to compensation for taken portion OR
2) Complete - entire lease taken - dissolves the tenant of rent and entitled to compensation for taking

Question 43

Fee Simple Determinable

Answer 43

Ownership that lasts forever but can be cut short
1) possible of reverted - return to grantor
2) executory interest - automatically passes to third party

Uses durational language - so long as, durational, until; not subject to rules against perpetuities

Question 44

Express Easements

Answer 44

Arises when it is affirmatively created by the parties in a writing that satisfies requirements for a deed
1) By grant - owner of the servient estate grants another person an easement in the servient estate
2) By reservation - give property but keeps an easement for himself

Question 45

Easement by Necessity

Answer 45

Generally created only when property is virtually useless without the benefit of an easement across neighboring
1) both dominant and servient estate must have been under common ownership in the past

Question 46

Easement by Prior Use

Answer 46

if owner of two parcels of land previously used on parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known and reasonably necessary to the dominant land’s use and enjoyment

Question 47

Easement by Prescription

Answer 47

an requires that the use be continuous, actual, open, and hostile for a specific period;

Hostile typically met when nonpermissive

Question 48

Easement by Estoppel

Answer 48

good faith, reasonable, detrimental reliance on permission by a servient estate holder to make a limited use of her property can create an easement by estoppel if necessary to prevent injustice

Question 49

Covenant of Marketable Title

Answer 49

Implied in every land sales contract - not required until delivery ; any undisclosed private encumbrance renters the title unmarketable - buyer may rescind the contract and recover payments, sue for breach of contract, or bring action for specific performance with an abatement of the purchase price (price adjustment to compensate buyer for the defect)

If encumbrance is less than the purchase price, at closing the seller can apply the proceeds from the sale of the property to pay off the balance of the mortgage and remove the encumbrance

Question 50

Rule of Convenience

Answer 50

Rule of interpretation - does not apply when the grantor specifies that the class should remain open even though a member of the class is entitled to immediate possession of a share of class of gift; “language includes “regardless of when born”;

Question 51

License

Answer 51

A non-possessory right to enter another’s land for some delineated purpose; licenses are freely revocable by the owner

Question 52

Easement Appurtenant

Answer 52

Non-possessory right to enter another’s land for the benefit of the holder as owner of real property

Question 53

Easement in Gross

Answer 53

non-possessory right to enter another’s land for the holder personally; not linked to the holder’s possession of land - not freely revocable

Question 54

Profit

Answer 54

a non-possessory right to enter another’s land and remove specific natural resources

Question 55

Merge of Easements

Answer 55

Easements are terminated when the servient estate mergers with the easement; cannot be revived when the owner subsequently splits up the property and must be expressed

Question 56

Anti-Lapse Statute

Answer 56

can operate to prevent the devise that lapses due to predecease from lapsing

Question 57

Powers of Common-Interest Community

Answer 57

1) levy assessments and charge fees
2) manage, acquire, and improve common property
3) adopt rules governing use of property
4) litigate in its own name
5) enforce governing documents and rules
6) amend declaration creating community

Question 58

Sport Zoning

Answer 58

a rezoning that affects a small number of parcels of land, most typically a single parcel, in a manner that is inconsistent with the zoning of the neighboring land (and the comprehensive plan where one exists) and that usually benefits the owner of the parcel to the detriment of the neighboring land is impermissible

Question 59

Conflict-of-Laws Rule Real Property

Answer 59

General Rule: cases involving real property, law applies by forum court should be determined by conflict-of-laws rule that would be applied by state where property is located

Exceptions:
1) document specifies application of specific jurisdiction’s law
2) Issues regarding effect of marriage on interest in land
3) Collateral issues (such as fraud in transfer)
4) Issues regarding mortgage note
5) Foreclosure-related issues that do not affect interest in land