Real Property Flashcards
1
Q
4 types of present estates
A
- fee simple determinable
- fee simple subj to condition subseq
- fee simple subj to exec interest
- life estate
2
Q
defeasible fee definition and types
A
X has a defeasible fee in the property because his interest may be terminated by the occurrence or non-occurrence of an event
- fee simple determinable
- fee simple subject to condition subsequent
- fee simple subject to executory interest
3
Q
fee simple determinable: lang to create + future interest
A
conveyance must use specific durational language and language suggesting the intention to retain a possibility of reverter
FS terminates automatically upon the happening of the stated condition.
Grantor has possibility of reverter; 3rd party has executory interest.
4
Q
Fee simple subj to a condition subsequent: lang to create + related future interest
A
defeasible present fee simple limited in duration by specific conditional language. conveyance must explicitly state that if the stated condition occurs, grantor can exercise right of re-entry
upon occurrence of stated condition, FSSCS terminates but ONLY if grantor affirmatively demonstrates intent to terminate by re-entering the property or bringing an action to recover possession of it.
not subj to RAP
5
Q
fee simple subj to executory interest + future interest
A
Future interest is executory interest. (automatically goes to someone other than grantor)
Subj to RAP
6
Q
life estate + future interest
A
if it goes back to grantor –> reversion
if it goes to third party –> remainder, can be vested subject to open OR contingent (which is subj to RAP)
7
Q
3 types of remainders
A
- vested
- vested subj to open
- contingent
8
Q
vested remainder
A
preferred type of remainder after life estate
Ascertainable grantee w no condition precedent
9
Q
vested subj to open remainder
A
Applies to class gifts.
Full class unknown but one or more member(s) is vested.
- subj to RAP
- Rule of Convenience: closes the class when any member is entitled to possess
10
Q
contingent remainder
A
Unascertainable grantee OR subj to condition precedent
- vests once condition precedent satisfied
- destructability: at CL destroyed if it failed to vest before/at the time the prior estate ended
most Jx’s: not destroyed + it converts to springing executory interest
11
Q
executory interest
A
future interest in 3P that’s not a remainder and generally cuts the prior estate short upon the occurrence of a specified condition
12
Q
4 things that apply Rule Against Perpetuities
A
Applies to
1. vested remaidners subj to open
2.contingent remainders
3. exec interests
4.powers of appointment
13
Q
Rule of Perpetuities
A
No interest in property is valid unless it must vest, if at all, within 21 yrs after some life in being at the creation of the interest.
Maj: Courts will “wait and see” if it actually vests within 90 yrs after its creation.
14
Q
3 types of concurrent estates
A
- tenancy in common
- joint tenancy
- tenancy by the entirety
15
Q
restraint on alienation
A
restriction on transferring property
always mention if FSD/FSSCS is mentioned
16
Q
rule on direct restraint on alienation
A
they’re disfavored + valid only if they’re deemed reasonable.
reasonableness measured by weighing utility of the restraint against the harm resulting from its enforcement
- If unreasonable –> rejected + property is alienable
- If reasonable –> any attempt to alienate property in violation of restraint is null and void
TOTAL restraint is always unreasonable bc freedom of alienation is a defining attribute of this type of estate
17
Q
tenancy in common
A
concurrent estate owned by 2 or more individs w equal rights to possess the property but no rights of survivorship
favored; presumed estate if not otherwise clear
18
Q
joint tenancy just definition
A
concurrent estate when 2 or more individs own property w right of survivorship: when 1 tenant dies, the other tenant(s) receive their share of the property
19
Q
how is joint tenancy created
A
Modern law reqs it be made w a clear expression of intent + survivorship lang
Also the 4 unities (PIIT). Created w
1. each joint tenant having equal right to Possess the property
2. w equal Interest
3. created in the same Instrument, and
4. at the same Time
20
Q
severance of joint tenancy
A
- inter vivos transfer –> joint tenancy severed and converted into TIC. if there’s more than 1 joint tenant left, the remaining tenants continue to be joint tenants themselves.
- mortgages in title theory states (minority). but not in lien theory (maj), tho foreclosure will sever
21
Q
tenancy by entirety
A
joint tenancy between spouses. they must be married at time of creation
22
Q
5 rights & obligations of concurrent estates
A
- possession and use
- third party rent
- necc property related expenses
- improvements and repairs
- partition
23
Q
concurrent estate: possession and use
A
equal right to possess ALL of the property, absent agreement
24
Q
concurrent estate: third party rent
A
right to pro rata share of net rent from a 3rd party
25
concurrent estate: necessary property related expenses
equal obligation to pay; can get reimbursed for paying excess
includes taxes, mortgage interest
26
partition definition + 2 types
equitable remedy to divide property
1. partition in kind: physically into lots proportionate to ownership interest (preferred by courts)
2. partiion by sale: if in kind not feasible. can force a sale + proceeds divided proportional to ownership interest
27
how to request partition
1. voluntary (by agreement of ALL cotenants): TIC, joint, entirety
2. involuntary (request of 1 cotenant): TIC + joint, but NOT entirety
28
Fair Housing Act
Prohibits discrimination in the sale, rental, and financing of dwellings. Prohibits ads w discriminatory preferences.
Ex: refusing to rent or sell, providing different terms
29
FHA protected classes + unprotected
race, color, religion, national origin, sex, disability, familial status
but NOT
1. single-fam housing sold/rented w/o broker
2. owner-occupied buildings of 4 or fewer living units
3. religious orgs, priv clubs
30
FHA proof standard
Must show disparate racial IMPACT, not intent or purpose
31
conflict of laws rule + exceptions
Law applied by the forum court should be determined by the conflict-of-laws rule that would be applied by the courts of the state where the property is located (the situs).
EXC
- instrument / will designates applicable law
- spouses acquire property during marriage (their domicile determines whether property is marital or separate)
- collateral issues
32
4 types of tenancies
1. tenancy for years
2. periodic tenancy
3. tenancy at will
4. tenancy at sufferance
33
tenancy for years; creation + termination
leasehold created by express agreement, measured by a fixed amt of time
lease of more than a year subj to SoF
termination automatic upon expiration of term. may also occur before expiration if tenant surrenders the leasehold + landlord accepts the surrender
34
periodic tenancy
repetitive, ongoing leasehold measured by set periods that automatically renew + has no predetermiend expiration date
can be created by express / implied agreement or operation of law (ex: following tenancy at sufferance). writing not required
notice of termination must be given by either party BEFORE start of intended last period
35
tenancy at will; creation + termination
lease of no fixed period of time, created only when both parties expressly agree.
may be terminated by either party at any time, w/o notice
36
tenancy at sufferance; creation + termination
occurs when tenant wrongfully holds over + remains on premises past their lease expiration.
lasts until eviction or conversion into periodic tenancy. landlord may recover property w/o notice to tenant
37
duties of tenant
1. pay rent, unless exception applies (e.g. destruction of premises, material breach by L)
2. avoid waste.
3. make reasonable repairs. residential T may be req'd to notify L of necessary repairs
38
what if T fails to pay rent? abandonment?
L may sue for rent as it becomes due but NOT future rent under the lease.
if no excuse for failure to pay, L may
- sue for damages or
- terminate lease, evict T
39
abandonment + L's duty to mitigate
L can accept T's abandonment of property as T's surrender. but if L doesn't accept surrender, T is still liable to pay rent
If T fails to pay rent, L has duty to mitigate damages by reasonably attempting to re-rent the premises if T abandons
40
what does NOT count as tenancy at sufferance
not holdover if
1. T stays a few extra hrs
2. leaves a few articles of property behind, or
3. circumstances out of T's control prevent them leaving
41
L's possible actions after holdover T
L may sue for eviction OR bind T to a new tenancy
accepting rent creates a periodic tenancy w terms of the prior lease. but in a residential lease, new tenancy can't be implied for more than month to month
42
landlord's 5 duties
1. deliver possession
2. duty to repair (residential)
3. implied warranty of habitability (residential only, esp multi-fam units)
4. covenant of quiet enjoyment
5. security deposit
43
duty to repair + remedy
Landlord Duty
Residential leases only.
L must repair damages not caused by tenant.
T's remedy for breach may be under implied warranty of habitability
44
duty to deliver possession
Landlord Duty
L must deliever actual possession of premises to tenants
45
Implied warranty of habitability
Landlord Duty
Residential only
L must maintain the property such that it's reasonably suited for residence.
If L fails, T must put L on notice 1st and then may:
1. stay + deduct rent until repair occurs
2. stay, pay for repairs, and deduct cost from rent, OR
3. terminate + move out
46
covenant of quiet enjoyment
Landlord Duty
Both residential and commercial
Implied right not to have possession or enjoyment of property disrupted by L. L has duty to take action against other tenants' nuisance like behavior AND to control common aras.
47
constructive eviction
T's duty to pay rent may be excused under thry of constructive eviction.
3 elements:
1. L subst interferes w T's use + enjoyment of the land
2. T gives notice of the problem + reasonable time for the L to repair, but L doesn't AND
3. T vacates in a reasonable amt of time
48
security deposit
Landlord Duty
Some states set a max amt. Some states allow a larger deposit from Ts w pets.
49
L/T tort liability for negligence
CL: L resp for injuries occurring as result of hidden defect
ML: L has duty of reasoanble care + may be liab for fialing to make repairs
50
assignment vs sublease + liability
assignment is complete transfer of the tenant's remaining lease term to a third party.
- T1 loses privity of estate. Not liable for rent + covenants that run w the land anymore, but assignee is.
sublease is a partial transfer.
- T1 maintains both privities of contract and estate. Liable, but assignee is NOT
51
rules re: assigning / subletting
Both L and T can assign their interest w/o the other's consent.
Prohibition clauses: lease clauses that prohibit assignment / sublease.
- If a lease prohibits T from assigning / subletting, L may terminate the lease for breach of one of its covenants. But if L accepts payment from the new tenant, L waives enforcement of the prohibition clause.
- some clauses req L's consent for assignment/sublease. L can only do so on commercially reasonable grounds
52
how to form land sale K
1. real estate broker: typically a seller's agent. but may be a buyer's agent or a dual agent
2. SoF --> K must be in writing unless an exception applies
- part/full performance
- detrimental reliance
- admission
53
3 considerations to performance of land sale K
1. marketable title
2. time of the essence
3. disclosure of defects
54
marketable title
implied covenant that title is free from defects that create an unreasonable risk of litigation. S has until CLOSING to deliver title. if delivered w/o, B can sue
55
what defects make title unmarketable?
1. future interest (if holder hasn't agreed to transfer)
2. encumbrance (mortgage, covenant, option, easement)
3. violation of zoning ordinance
4. significant physical defect
5. title held by AP but not yet quieted
56
merger doctrine
Under this doctrine, any obligations in the land-sale K merge into the deed and are extinguished at closing, aka enforceable only if in the deed
57
remedies if defects remain at closing
Available BEFORE deed delivered. Otherwise terms merge w/ deed.
1. rescission w restitution: recovery of costs + payments
2. suing for breach. damages: (loss of bargain = FMV at time of breach -- K price)
liquidated dmgs: amt designated in K.
- S can retain B's deposit if B breaches, if amt is no more than 10% of purcahse price. S must suffer actual loss
3. specific performance w abatement of purchase price, if applicable
58
time is of the essence
Not presumed. Must be stated in K.
Otherwise parties only need to perform within reasonable time. But late performance can trigger incidental dmgs
59
disclosure of defects
Maj reqs residential S to disclose material defects that
1. subst affect value of residence
2. impact health / safety of resident, or
3. affect desirability of residence to B, that can't be reasonably discovered by the B
60
equitable conversion
Converts the S' interest to personal property (right to collect payment) once K is signed, giving B the real property interest (equitable title).
Once K is formed + can be specifically enforced, places the risk of loss on buyer (maj view) if the property is destroyed before closing.
Min view: Uniform Vendor & Purchaser Risk Act. S retains risk until B takes possession / title is transferred
61
options vs rights of first refusal
Both subj to SoF
1. option: 1 party acquires the right to purchase property in exchange for consideration
2. right of first refusal: pre-emptive right that gives holder the opp to acquire property before its transfer to another (must comply w SoF AND have reasonable terms)
62
adverse possession
Open and notorious: visible + apparent use the same way as true owner would
Continuous for statutory period: uninterrupted use, can tack if successive possession in privity
Exclusive: not shared w true owner, can share w another AP
Actual possession (i.e. phys presence); possession of entire parcel may not be required
Nonpermissive / Hostile: w/o permission + inconsistent w true owner's rights
63
adverse possession SoL
For continuous requirement, SoL will not run against at rue owner afflicted w a disability at the inception of the adverse possession until disability is removed.
Insanity, infancy, imprisonment
64
deed content requirements
Must be in writing
1. Named parties
2. words of transfer
3. description of property
4. grantor's sig
Does not need
1. consideration
2. to be recorded
65
deed delivery requirements
1. Present intent to transfer the property
2. Acceptance by the grantee (presumed)
Transfer to agent is not treated as delivery unless
1. the agent is indpndt +
2. grantor can't revoke the deed
66
Recording Act
Applies to nearly all interests in land. Will not protect against AP.
RULE: If a prior conveyance / interest ISN'T recorded, a subsequent purchaser may be protected under a recording statute.
67
Bona Fide Purchaser
Subsequent purchaser for value who takes without notice (actual, constructive, inquiry) at TIME OF PURCHASE may be protected by a recording act.
68
Shelter Rule
Anyone, donee or not, who takes title from a BFP is protected by that status
69
3 types of deeds + remedies for breach
1. general warranty: 6 implied covenants; protects against defects arising at ANY time
- present covs: seisin, right to convey, against encumbrances
- future covs: quiet enjoyment, warranty, further assurances
2. special warranty: 6 implied covenants; protects against defects ONLY IF they arose during the time grantor had title
3. quitclaim: there are no guarantees or covenants of title
Remedy for breach depends upon whether breach of present or future covenant
70
conveyance by will
RP can pass by a specific devise or residuary clause. If a person dies w/o a valid will, their property passes by intestacy. If a person dies w/o heirs, their property escheats to the state.
71
ademption
a specific devise fails if the testator doesn't own the property at the time of his death
72
lapse
when the beneficiary dies before the testator
all states have anti-lapse statutes (prevents a gift from lapsing if the gift is amde to an immediate relative of the testator)
73
conveyance by trust
A valid private trust reqs
1. intent to make a trust
2. valid purpose
3. res, and
4. identifiable beneficiaries
Can be created during life (inter vivos) or upon death (testamentary); charitable trusts
74
deed: restraints on alienation
restraints on legal interests are generally void as against public policy but permissible if the restraint is limited in time + purpose
75
mortgage; mortgagor; mortgagee
an interest in RP given to secure a debt.
mortgagor: borrower
mortgagee: lender/holder of the security interest
76
4 mortgage alternatives
1. deed of trust
2. installment land K
3. absolute deed
4. conditional sale + repurchase
77
deed of trust
Mortgage Alternative
Borrower delivers note to 3rd party trustee as security for payment to lender
78
Installment Land K
Mortgage Alternative
S retains title until B makes the final payment
79
Absolute Deed
Mortgage Alternative
Deed free of all liens + encumbrances. If an obligation is created prior to or contemporaneously w the deed transfer, the grantor may prove that the transfer is a disguised mortgage.
Enforceable UNLESS competing equities (BFP) take precedence
80
Conditional sale + repurchase
Mortgage Alternative
Can create a disguised mortgage, depending on the terms
81
Transfer of Mortgage by Mortgagor
Will not release obligation w/o a release or modification by the lender. Consider due-on-sale/encumbrance clause (mortgagor but not grantee laible)
1. Transferee who ASSUMES (expressly agrees to pay) = primarily liable. Mortgagor secondarily liable
2. Transferee who TAKES SUBJECT TO mortgage is not liable. (Assumed if deed is silent)
In either case, lender can foreclose if debtor defaults!
82
Transfer of Mortgage by Mortgagee
Doesn't affect liability of mortgagor
83
Lien vs Title vs Intermed Theory States
1. Lien: Lender receives security interest in property. Mortgagor retains title & possession unless lender forecloses.
2. Title: Lender receives legal title & mortgagor retains right of possession. Title reverts to mortgagor once debt is paid.
3. Intermed: Mortgagor retains title & possession until default, then full title passes to lender without foreclosure.
84
Equity of Redemption vs Statutory Right of Redemption
BEFORE foreclosure, right to pay debt w interest to avoid foreclosure
Some states also recognize a statutory right of redemption that permits a mortgagor to reclaim the property AFTER a foreclosure sale
85
foreclosure
Sale after material default and notice; sue the borrower on the note or foreclose the mortgage.
Nonrecourse loan: borrower is not personally liable
86
Judicially Supervised Foreclosure Sales + Notice to Junior Interest Holders
For a judicially supervised foreclosure sale, the foreclosing mortgagee must give notice to the junior interest holders AND make them parties, in order to eliminate those interests.
Otherwise the jr interest holder’s interest remains after the sale
Any others who have an interest in the property (senior holder) or are liable on the debt (guarantor) may be joined as proper but unnecessary parties.
87
Priorities in Foreclosure
foreclosure destroys junior interests; “first in time, first in right” with exceptions
PMM prioritized over liens that arose BEFORE it, recorded or not
88
Foreclosure Alternatives
1. Equitable Redemption
2. Deed in lieu of foreclosure: allows the mortgagee to take immediate possession of the property without the formalities of a foreclosure sale. Any junior interests remain attached to the property, and the mortgagee's interest is extinguished unless it was reserve
3. Renegotiating debt
89
Discharge of Foreclosure
1. prepayment: presumption in favor of permitting mortgagor's prepayment
2. merger: when a mortgagee’s interest and the mortgagor’s interest are acquired by the same person, courts treat the mortgage as having merged into fee ownership
