Real Property Flashcards
Property:
Land Sale Contract
A land sale contract must be in writing, signed by the party to be bound, and contain all essential terms. Prior to closing, the buyer can recover under the land sale contract.
Equitable Conversion
Under equitable conversion, buyer holds equitable title and seller holds legal title during the period between execution of the land sale contract and closing. The risk of loss remains on buyer under equitable conversion.
Deed
At closing, the land sale contract merges with the deed. A deed transfers legal title from seller to buyer. To be valid, the deed must be in writing, identify the parties, describe the land, and be delivered to the grantee. Delivery is a question of intent to pass title.
Quitclaim Deed
A quitclaim deed does not protect against any defects in title, nor does it provide that grantor actually has title.
Warranty Deed
A warranty deed protects all defects in title attributable to the grantor and grantor’s predecessors. There are six covenants in the warranty deed –– three present and three future. The present covenants are breached at the time of conveyance and the future covenants are breached on the day of closing.
Present Covenants
The present covenants include: covenant of seisin providing that grantor has title to the property; right to convey providing that grantor can sell the property; and covenant against encumbrances providing that there are no existing encumbrances (liens, easements, etc) on the land. Remote grantees cannot sue under present covenants.
Future Covenants
The future covenants include: covenant of quiet enjoyment providing that grantee will not be disturbed by future claims; covenant of warranty providing that grantor will defend against any claims brought; and covenant of further assurances providing that grantor will remedy any defects in title.
Implied Warranty of Fitness and Habitability
The implied warranty of fitness and habitability protects purchasers of new construction from latent defects and warrants that the new construction is safe and fit for human habitation at the time of sale.
Bona Fide Purchaser
A bona fide purchaser (BFP) is a purchaser who purchases in good faith for a valuable consideration without notice of any defect in title.
Shelter Rule
Under the shelter rule, a person who is transferred property from a BFP has the same recording protections as the BFP.
Common Law Principle
Under the CL, if a grantor transfers the same property to multiple grantees, the first grantee to receive the deed acquires rightful title. The CL follows a “first in time, first in right” principle.
Race Statute
Under a race statute, the first grantee to record will acquire title.
Notice Statute
Under a notice statute, a BFP acquires title if the purchase is made without notice of a prior conveyance.
Race-Notice
Under a race-notice statute, a BFP acquires title if the purchase is made without notice of a prior conveyance and the subsequent purchaser records first.
Actual Notice
Actual notice occurs when the grantee has actual knowledge of the conveyance.
Inquiry Notice
Inquiry notice occurs when a reasonable investigation would reveal existence of prior claims.
Record Notice
Record notice occurs when the prior interest is recorded in the chain of title. If the deed is recorded too late or too early, it is a wild deed that will not provide notice.
Assumption of Mortgage
If the transferee assumes the mortgage, the transferee is primarily liable to the mortgagee upon default and the transferor-mortgagor is secondarily liable. If all parties execute a novation, the mortgagor will not be liable and transferee will assume all duties.
Subject to Mortgage
If the transferee takes the property subject to the mortgage, the transferee is not liable to the mortgagee upon default. The transferor-mortgagor remains personally liable.
Tenancy for Years
A tenancy for years binds the parties for a specified period of time. It terminates automatically at the specified time without a need for notice.
Periodic Tenancy
A periodic tenancy exists for a fixed period of time that continues for that period until valid notice is given to terminate.
Assignment
An assignment is a complete transfer of the tenant’s entire remaining term under the lease. The landlord can collect rent from assignee under privity of estate and assignor under privity of contract.
Sublease
A sublease is a transfer of less than the tenant’s entire remaining term under the lease. The landlord can only collect rent from the original tenant under privity of contract and estate. The new tenant has rent obligations to the original tenant.
Tenant Duties
A tenant has a contractual duty to pay rent and refrain from committing waste. If tenant fails to pay rent, landlord can sue for damages or treat it as a surrender.
Fair Housing Act
The Fair Housing Act is a federal law that prevents discrimination in the sale, rental, or financing of any property based on race, national origin, color, sex, disability, religion, and familial status.
Easement
An easement is a grant of an interest in land that entitles a person to use land possessed by another. An easement continues for indefinite duration unless it is terminated. [PING]
Termination by Release
An easement may be terminated if the holder expressly releases it. The release must be satisfied in writing and comply with SOF.
Termination by Merger
An easement is terminated if the holder acquires title to the underlying estate such that the easement merges into the title.
Termination by Abandonment
An easement is terminated if the holder demonstrates an intent to never use the easement again through physical action.
Termination by Estoppel
An easement is terminated if the landowner reasonably relies to their detriment on the easement holder’s assurances that the easement will no longer be used.
Joint Tenancy
A joint tenancy is a concurrent estate where two or more people have an undivided interest in the property with the right of survivorship. Four unities must be present: time, title, interest, and possession.
Tenancy in Common
A tenancy in common is a concurrent estate where two or more people have an undivided interest where there is no right of survivorship. Each co-tenant has the right to possess the whole and right to bring an action for partition.
Lien Theory
In a lien theory jurisdiction, the mortgagee only has a lien on the property and the purchaser has legal title in the property.
Title Theory
In a title theory jurisdiction, the mortgagee has legal title in the property and the purchaser has equitable title.
Adverse Possession
Adverse possession allows a trespasser in unlawful possession of land to acquire title to that land. The trespassers use must be continuous for the statutory period, open and notorious, actual and exclusive, and hostile.
Tacking
An adverse possessor can tack on the time of possession of a prior adverse possessor to meet the statutory period requirement if the adverse possessors are in privity with one another.
