Real Property

Question 1

Fee Simple Determinable (FSD)

Answer 1

• A FSD ends automatically if a specified condition occurs.
• The grantor retains a possibility of reverter, and the possessory interest will vest in the grantor automatically if a specified condition occurs.

Question 2

Fee Simple Subject to a Codition Subsequent (FSSCS)

Answer 2

In FSSCS, the grantor has the right to re-entry and take the property if a specified condition occurs.

Question 3

Restraints on Alienation

Answer 3

Absolute restrictions on alienation or transferability on fee simple estates are void and unenforceable.

Question 4

Joint Tenancy (Formation)

Answer 4

• A conveyance of real property to two or more persons creates a joint tenancy (JT) when:
  1. the four unities are present, and
  2. there is clear express intent to create a JT with a “right of survivorship.”
• The four unities are:
  1. Possession (tenants share an equal right to possess or use the property),
  2. Interest (all ownership interests are equal),
  3. unity of Time, and
  4. Title (all iterests were acquired by the same instrument),
• A right of survivorship means that when one joint tenant dies, his interest in the land is autnomatically transferred to the other joint tenant(s).

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Question 5

Joint Tenancy (Severance)

Answer 5

Conveyance
- When a joint tenant conveys her interest in a JT to a third-party, that party takes the property as a tenant in common.
- If there are only two joint tenants, the JT is severed.
- However, if there are more than two joint tenants, the JT remains, but only among the other joint tenants.

Mortgage
- When a joint tenant takes out a mortgage on her interest, in most states (lien theory jurisdictions), the JT is not severed.
- However, in a title theory jurisdiction, the mortgage will sever the JT, wherein it is converted to a tenancy in common.

Lease
- When a joint tenant leases the property, in most states, the JT is severed, wherein it is converted to a tenancy in common.

Question 6

Co-Tenant’s Entitlement to Rent

Answer 6

Rent from Co-Tenant
- A co-tenant cannot collect rents from another in-possession co-tenant, unless:
(a) otherwise agreed, or
(b) wrongfully ousted.

Rent from a Third-Party
- If an in-possession co-tenant rents the property to a third-party, the out-of-possession co-tenant is entitled to a fair share of the rent paid by the third-party.

Question 7

Co-Tenant’s Entitlement to Reimbursement

Answer 7

Repairs
- A co-tenant is entitled to reimbursement for the costs of necessary repairs that the co-tenant paid for unless there was an ouster.

Improvements
- A co-tenant who makes improvements to the property is not entitled to reimbursement, unless otherwise agreed.

Mortgage & Tax Payments
- All co-tenants are responsible for their proportionate share of mortgage or tax payments.
- However, an in-possession co-tenant cannot recover for such payments unless the payments exceed the rental value of the property.

Question 8

Ouster

Answer 8

An ouster occurs when a co-tenant excludes another co-tenant from possessing the the property.

Question 9

Landlord & Tenant Issues

Types of Leasehold Interests

Answer 9

A Tenancy for Years
- lasts for a fixed period of time, then automatically terminates after the fixed period.

A Periodic Tenancy
- lasts for an initial period, then automatically continues for additional equal periods.
- Termination requires written notice a full period in advance (if year-to-year tenancy, 6 months’ notice is required).

A Tenancy at Will
- continues until either party terminates it.

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Question 10

Landlord & Tenant Issues

Right to Terminate Tenancy for Breach of Covenant

Answer 10

A party may seek damages AND terminate the lease upon breach of a covenant between a landlord and tenant.

Question 11

Landlord & Tenant Issues

Tenant’s Duty to Pay Rent

Answer 11

• If a tenant remains on the property and does not pay rent, the landlord may:
  (a) initiate eviction proceedings, or
  (b) sue for damages.
• If the tenant abandons the property and does not pay rent, the landlord may be required to take reasonable steps to mitigate his losses.

Question 12

Landlord & Tenant Issues

Landlord Duty to Deliver Possession

Answer 12

In most states, the landlord is obligated to deliver both legal possession and actual possession of the leased premises. If there is a holdover tenant, must evict.

Question 13

Landlord & Tenant Issues

Implied Warranty of Habitability

Answer 13

• A warranty of habitability is implied in every residential lease, which requires the landlord to provide a place to live that is reasonably suitable for human needs.
• If the warranty is breached, the tenant may:
  (a) move out and terminate the lease,
  (b) withhold or reduce the rent,
  (c) repair the issue and deduct the cost from the rent, or
  (d) remain on the premises and sue for damages.

Question 14

Landlord & Tenant Issues

Constructive Eviction

Answer 14

• Every lease includes an implied covenant of quiet enjoyment.
• This covenant is breached if the tenant is constructively evicted.
• Constructive eviction occurs when:
  1. the landlord breached a duty to the tenant,
  2. the breach caused a loss of the substantial use and enjoyment of the premises,
  3. the tenant gave a notice and the landlord failed to remedy the condition within a reasonable time, and
  4. the tenant vacated the premises.
• If constructive eviction occurs, the tenant may terminate the lease and seek damages.
• Additionally, the tenant can avoid rent for the period constructively evicted.

Question 15

Landlord & Tenant Issues

Assignment of a Lease

Answer 15

• An assignment occurs when a tenant transfers ALL of his remaining interest in a lease to a third-party.
• The assignee is in privity of estate with the landlord and owes rent to the landlord.
• The assginor also remains liable to the landlord for any rent not paid by the assignee (privity of contract).

Question 16

Landlord & Tenant Issues

Subleases

Answer 16

• A sublease occurs when a tenant transfers only some of his remaining interest in a lease to a third-party.
• The sublessee is NOT liable to the landlord for rent because there is no privity of estate with the landlord.

Question 17

Real Covenants

Answer 17

• Real covenants are a landowner’s promise to do or not to do something on the land.
• The remedy is damages.
• To enforce the benefit of a covenant, there must be:
  1. a Writing,
  2. Intent of the original parties that the covenant will bind successors,
  3. the covenant must Touch and concern the land (makes the land more useful or valuable), and
  4. Vertical privity between succeeding parties (exists when the successor holds the entire interest held by the predecessor).
• To enforce the burden of a covenant, all of the above requirements must be met, plus there must be:
  1. Horizontal privity between the original parties (the two parties shared some interest in the land), and
  2. the new owner must have Notice of the covenant.

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Question 18

Equitable Servitudes

Answer 18

An equitable servitude is similar to a real covenant and the requirements are the same, except that there are no privity requirements and remedy is in equity, rather than monetary damages.

Question 19

Easement

Answer 19

• An easement is a non-possessory interest in the use of the land of another.
• An easement in gross benefits a specific owner’s use of the land and DOES NOT attach to the land. It DOES NOT pass to subsequent landowners.
• An easement appurtenant benefits any owner’s use of the land and attaches to the land. It passes to subsequent landowners so long as the new owner has notice.

Question 20

Easement Creation

Answer 20

• An Easement by Grant is an express agreement by the grantor in writing.
• An Easement by Prescription is created when the possessor’s use of the land is
  1. open and notorious,
  2. continuous for the statutory period, and
  3. hostile (without the landowner’s consent).
• An Easement by Implication is established when:
  1. a single tract of land is divided by a common owner, and
  2. a pre-existing use by the grantor is established prior to the division.
• An Easement by Necessity is created when a landowner sells a portion of his land and the remaining portion is deprived of access to a public road.

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Question 21

Termination of an Easement

Answer 21

Typically, an easement is perpetual. However, it may be terminated by:
1. prescription,
2. involuntary destruction of the servient estate,
3. termination of the necessity,
4. estoppel,
5. condemnation of the servient estate (a government taking),
6. abandonment,
7. merger, and
8. written relase.

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Question 22

Adverse Possession

Answer 22

Adverse possession allows a possessor of the land of another to acquire title to that land, if the possession is:
1. open and notorious,
2. continuous for the statutory period,
3. hostile (without the true owner’s consent),
4. exclusive, and
5. actual (possess the property as the true owner would).

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Question 23

Requirements for a Valid Land Sale Contract

Answer 23

• A valid land sale K must satisfy the SOF.
• The K must:
  1. be in a writing,
  2. describe the property,
  3. identify the parties,
  4. contain the purchase price, and
  5. be signed by the party to be bound.

Question 24

Warranty of Marketable Title

Answer 24

• A seller of a land has a duty to convey marketable title to a buyer at the closing.
• Title is unmarketable when it contains:
  (a) defects in the record chain of title, or
  (b) encumbrance, such as mortgages, easements, and zoning violations.

Question 25

Deed Requirements

Answer 25

A valid deed must:
1. be in a writing,
2. describe the property,
3. identify the grantor and grantee,
4. indicate the grantor’s intent (by words such as grant, convey, give transfer), and
5. be signed by the grantor.

Question 26

General Warranty Deed

Answer 26

• A General Warranty Deed contains six covenants of title:
  1. seisin (the grantor is the rightful owner),
  2. right to convey,
  3. covenant against encumbrances,
  4. warranty (to defend against any third-party claims to title),
  5. quiet enjoyment, and
  6. further assurances (to do whatever is reasonable to perfect title).
• (1) through (3) are present covenants and can only be breached at the time of conveyance.
• (4) through (6) are future covenants and can only be breached at any time.

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Question 27

Special Warranty Deed

Answer 27

A Special Warranty Deed warrants that:
1. the seller has not previously conveyed the property, and
2. there are no encumbrances against the title made by the seller.

Question 28

Quitclaim Deed

Answer 28

A Quitclaim Deed is an “as-is” deed and contains NO warranties or covenants.

Question 29

Bona Fide Purchaser (BFP)

Answer 29

A BFP is a person who:
1. takes real property without notice of a prior conveyance, and
2. pays valuable consideration.

Question 30

Notice

Answer 30

• Notice may be actual, record, or on inquiry.
• A person is on inquiry notice of information that would be revealed upon a reasonable inspection of the land.

Question 31

Recording Statutes

Answer 31

Three types of recording statutes exist to protect those who record their interests in land.
* In a notice statute jurisdiction, a subsequent BFP will prevail over a prior grantee that failed to record. (BFP’s recording is not necessary).
* In a race-notice statute jurisdiction, a subsequent BFP will prevail only if he records before the prior grantee.
* In a race statute jurisdiction, whomever records first prevails.

Question 32

Foreclosure

Answer 32

• Foreclosure destroys (extinguishes) all junior mortgages. All senior (prior recorded) mortgages are not affected.
• Proceeds from a foreclosure sale are used to pay off debts in the following order:
  1. attorney fees and expenses of the sale,
  2. debts owed to mortgagee (the lender), and
  3. the mortgagor (the debtor).
• A mortgagee may seek a deficiency judgment against the mortgagor if the proceeds of the foreclosure sale are insufficient to satisfy the mortgage.

Question 33

Nuisance

Answer 33

• A public nuisance is:
  1. an unreasonable interference,
  2. with the health, safety, or property rights,
  3. of the community (a considerable number of people).
• To recover damages, the injured party must show actual damages.
• A private nuisance is:
  1. a substantial and unreasonable interference,
  2. with a person’s use or enjoyment of her property (must be offensive to a reasonable person).
• P will be entitled to damages or an injunction.
• The primary defenses to the tort of nuisance are:
  1. Coming to the nuisance, and
  2. Statutory Compliance.