Real Property Flashcards
What are the only three interest in property that a person can have?
- Estates = deals with possession
- Easement= deals with ownership
- Restrictive covenant: deals with prop. owner being able to restrict a TP’s use of the land
Fee Simple Estate
- infinite duration
- Cannot have any direct restraint on the holder’s transfer rights of the estate. Any attempt to restrain the transferability of the estate is void and will be ignored
Language used to create it:
“A and her Heirs”
“to A”
Fee Tail
used to keep prop in grantee’s family
“To A and the heirs of her body”
“To A and her bodily heirs”
Modern: presumed to create FSA
Ga: abolished Fee Tails
Life Estate
Only measured by Life (never time). Age is irrelevant.
“To A for life”= express grant of life estate
“To B & C upon the death of A” = implied life estate to A
“To A for the life of B” = pur autre vie life estate
Pur Autre Vie
Life Estate given to one person measured by the life of another party.
“To A for the life of B”
If the life tenant dies before measuring life the estate goes to estate of the life tenant until the measuring life dies.
If the measuring life dies before the life tenant, the life tenants interest terminates
“To A and on A’s death, to B” What kind of interest does A have?
An Implied grant of Life Estate
Transferring Life Estate
If the life tenant dies before the measuring life, the life estate passes to the estate of the life tenant and continues to exist until the measuring life dies.
Once the measuring life dies, the life tenant’s interest terminates.
Restrictions on Alienation in Life Estates
Modern rule allows provisions that terminate the life estate if the life tenant attempts to convey (transfer/sell) away the life estate.
Law of Waste
Life tenant maintains the estate (this expresses both the maximum and minimum that the life tenant can do on the land).
Categories of Waste
- Voluntary
- Permissive
- Ameliorative
Voluntary Waste
Definition: Any affirmative action beyond the right of maintenance that cause harm to the property.
- Tenant may continue the normal use of the land
- Any change of use is voluntary and life tenant may be held liable to any future interest.
- Open Mines Doctrine
Open Mines Doctrine
Occurs in voluntary waste
Depletion of natural resources = voluntary waste UNLESS consumption of those resources is within normal use.
Permissive Waste
Deals with a failure to maintain
To avoid liability tenant MUST:
- Make repairs: life tenant has obligation to make ordinary repairs not replacement. This is limited to the amt of rents/profits received from the prop. (If no rents/profits come from prop, then tenant is limited to the reasonable rental value of the prop if the tenant is using the land) ( If tenant is not using the prop, then tenant has no repair obligation).
- Pay Taxes: life tenant must past all taxes on prop (extends only to the ant of rents/profits received from the prop. If no rents/profits received then limited to reasonable rental value if the tenant is using the land)
- Pay Mortgage Debt: life tenant must pay interest on any mortgage indebtedness on the prop but is not required to make principle payments. (Limited to amt. of rents/profits received, if nothing is received then limited to reasonable rental value so long as the tenant is using the land)
Life Tenant fails to pay Taxes on the prop. what happens?
The holder of the future interest must be sure that the taxes are paid because a tax sale will eliminate the future interest.
The buyer at a tax sale takes the property free and clear of the future interest.
IN GA: if the life tenant fails to pay taxes then the life estate is forfeited.
Life Estate Insurance?
Life tenant does NOT have to insure the property but the life tenant does have an insurable interest
Ameliorative Waste
-Occurs when the life tenant alters the property substantially but the activity increases the value of the land
If changed conditions have made the proper relatively worthless, then the life tenant can alter the property without incurring liability to the holder of the future interest.
–Main words to consider: changed conditions and relatively worthless.
Seisin
Carried in ALL freehold estates (fee simple, fee tail, and life)
Holder of seisin = taxpayer
Property law basic interest = who owns the property so i can tax that person
Future Interest
Interest in the prop exists now (presently) but possession doesn’t take place till later (some point in the future)
Category of Future Interest
Future interest retained by Grantor
Future interest given to Grantee
Future Interest Retained by Grantor types
Reversion
Possibility of Reverter
Right of Entry
Future Interest Given to Grantee
Remainder
Executory Interest
Reversion
-Grantor
A reversion arises when the grantor conveys away less than the full durational estate. This is automatic, by operation of law.
Its vested
Not subject to Rule Against Perpetuities
IS freely transferable on death
IS transferable inter vivos
O conveys to A for life. A to B for life.
What are the estates?
A= life estate
B: life estate measured by B and A’s life
C: Reversion in FSA
O conveys to A for life. A to B for life. B dies before A
What are the estates?
A: life estate
B: nothing
O: reversion in FSA
Possibility of Reverter
-Grantor
When grantor conveys a FSD (fee simple determinable) the grantor automatically retains a Possibility of Reverter
only goes with a FSD
Its vested
Not subject to Rule Against Perpetuities
IS freely transferable on death
IS transferable inter vivos
Fee Simple Determinable
A fee simple estate with a condition imposed on the use of it
Lang: "so long as" "while" "during" "until"
Right of Entry (Reentry)
Grantor right
only goes with a Fee Simple Subject to a Condition Subsequent
A Fee Simple on Condition Subsequent terminates:
- title does NOT go back to Grantor automatically. Grantor must do something to retake the property. Title remains with grantee until grantor exercises the right of entry.
Its vested
Not subject to Rule Against Perpetuities
IS freely transferable on death
IS NOT transferable inter vivos
Fee Simple Condition Subsequent
Lang:
“provided however”
“but if”
“on condition that”
To create a FSCS, the lang must be followed by lang where the Grantor expressly reserves the right to reenter and take the prop.
Remainder
Future Interest in the Grantee
IS a future interest in a TP Grantee that comes naturally and immediately on the termination of the preceding estate.
NEVER EVER NEVER follows a FS
Vested Remainders
Grantee
Is vested if nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate.
Requirements:
- taker is ascertainable (known)
- there are no conditions imposed on the taking
Contingent Remainders
Grantee
Exists when there is a condition imposed upon the taker that must be satisfied before his interest in the property will become possessory
IF the condition is not satisfied then the prop reverts back to the original grantor by way of reversion who will hold the prop in FS subject to an executory interest and the new executory interest holds a springing executory interest.
examples of conditions: age contingencies, survivorship requirements
Class Gifts
Vested Remainder Subject to Open or Vested Remainder Subject to Partial Divestment
Rule: Where the remainder interest is conveyed to a group of unnamed person whose members are not fully known, the class remains open to allow for future person who qualify as class members by satisfying the class description.
Example: “to A and her children”–Its open to allow for the birth of future children
Class Gifts Timing for Vesting
Rule of Convenience: Class closes whenever any class member is entitled to distribution. This is a rule of construction and not a rule of law
Members of a class who predecease the testator are eliminated and their gift lapses .
Once the class is established the class remains open to accommodate new members who might later satisfy the class definition
Once testator dies, class closes and later people who come and satisfy the class lose out (unless they were in gestation before testator died)
Executory Interest
-Acts to cut short an estate that comes before it
If a grantee’s future interest is NOT a remainder then it must be an executory interest
Lang: “ . . .but if. . . then to . . .”
Look at punctuation: see if the contingency is made part of the first estate given to grantee or if it is made towards the second estate (IF its to the second estate then its an executory interest)
Defeasible Fees
- Fee Simple Determinable
- Fee Simple Subject to Condition Subsequent
- Fee Simple Subject to Executory Interest
Future Interest and Law of Waste
Holders of Executory Interests do not have standing to sue for waste
Holders of remainders do have standing to sue for waste.
Rule Against Perpetuities (RAP)
No interest will be valid unless it vest within 21 years after the death of the life who was alive at the moment the conveyance was made
ALWAYS applies to:
- Executory Interest
- Contingent Remainders
- Vested Remainders Subject to Open
Ask: Could this future interest possibly vest in the grantee outside of the rule? If yes, interest is void. (IF void, cross out that lang from the conveyance. It no longer matters)
When is the validity of interest under the RAP determined?
At the time the conveyance is made (the time the interest is created)
DO NOT wait to see what ACTUALLY happens
RAP and transfers made in wills
Apply the rule as of the testator’s death (or in other words, when the will takes effect)
RAP and transfers made by deed
Apply the rule at the time the deed takes effect
Uniform Statutory RAP
Codifies the CL rule but adds an alternative 90 year vesting period
Adopts a wait and see approach to determine if vesting occurs within 90 years
RAP in Georgia
Adopts a wait and see approach, courts will wait and see if the particular conveyance vests within the specified statutory period of 90 years.
If void when CL is applied, then apply this rule.
Use of Perpetuities Savings Clause
The lang is included in order to save a grant from violating the rule by making sure that vesting occurs within the time specified in the Rule.
Ex Lang: “during the lifetime of A or B or within 21 years after the death of survivor of A or B”
Right of First Refusal and RAP
Contingent interest in prop, like options or the right of first refusal, violate RAP IF they could possibly be exercised outside the time period in the rule.
If it violates the rule, the interest is void and that person gets nothing
Charity to Charity Exception
Exception to RAP
Both transferees must be charities for the exception to apply.
Even if the interests violate RAP, the interest will be deemed valid because the interests are founded in two charitable organizations.
RAP and Class Gifts with Age Contingencies
Arises when the class is open and the gift/conveyance is conditioned upon class members reaching a certain age
RAP applies
–When the problem contains language that grants the prop with an age contingency that goes beyond 21, the conveyance loses its link to a life in being (thus its void)
RAP and Class Gifts with Fertile Octogenarian Rule
Fertile Octogenarian Rule: conclusively presumes that the individual might have another child (regardless of her age or medical condition)
RAP operates to void the gift to one class member, what happens to the rest of the class?
IF the RAP operates to void any gift over any class member because their interest might vest outside the time frame of the rule, then all members lose. The entire class gift is void even if there is a person who would satisfy the class definition.
Joint Tenancy: Creation?
Concurrent Estate in Land (Freehold)
Four unities must be met to create a Joint Tenancy
Four Unities: TTIP
1) Unity of Time: must vest at the same time
2) Unity of Title: must be conveyed by the same instrument
3) Unity of Interest: must take the same kind and same amt of interest
4) Unity of Possession: must have same (identical) rights of possession
Lang of conveyance must reflect Grantor’s INTENT to create Joint Tenancy (if lang is unclear- law presumes tenancy in common = created)
Lang:
“as joint tenants, with rights of survivorship”
“in joint tenancy with right of survivorship”
–Right of survivorship MUST be expressly stated
Joint Tenancy and Right of Survivorship
must be expressly stated in the lang creating the tenancy
Joint tenancy carries a right of survivorship
The surviving joint tenants automatically take the prop upon the death of a joint tenant
Right of Partition
Voluntary Termination of Joint Tenancy
If any joint tenant want to be relieved of common ownership, he can do so by asking for the prop to be partitioned.
Partitioning the prop= redrawing the lines of the prop and portioning out this person interest to the other joint tenants. This redrawing can be done voluntarily by agreement between the parties, or if no agreement can be meet then by judicial action
Severance
INvoluntary Termination of Joint Tenancy
Occurs when any one of the four unities is disturbed. Cannot be severed by will (must be done during the tenant’s lifetime)
Severance Types
Types:
–Sale: Can sever tenancy by conveying one’s interest to a TP. Other joint tenants remains in a joint tenancy with rights of survivorship.
–Mortgage: Majority Rule: In lien theory, there is no severance to joint tenancy when interest is mortgaged. Here, when mortgage attaches, a lien attaches to title, but the title is not transferred. Unites are not disturbed. (GA = lien theory state)
The minority rule: Title theory: there is a severance when the interest is mortgaged. When mortgage is executed, titles passes from mortgagor to mortgagee even though mortgage will transfer back. (Examiners must tell you to use this rule if they want you to)
–K of Sale: severance occurs when K was signed b/c of Doctrine of Equitable Conversion (closing date is irrelevant)
–Creditor’s Sale of Int. in Joint Tenancy: No severance until judicial sale actually takes place. If tenant dies before the creditor’s sale, then there is no severance. The joint tenancy remained intact and interest passes to joint tenants leaving creditor with no recourse.
Tenancy in Common
NO unities required except the Unity of Possession (each tenant is entitled to posses the whole of the property).
Presumption in favor of tenancy in common (this is the default tenancy).
Freely alienable- each co-tenant may do what he wants
Any tenant in common can force a partition
No rights of survivorship –when a co-tenant dies, his interest goes to his estate NOT the other co-tenants.
Tenancy by the Entirety
Four unities PLUS the unity of Marriage
A CL, any grant of a concurrent estate to a Husband/Wife gave a tenancy by the entirety if the four unties existed.
Right of Survivorship = yes
Right of Partition= No
Not severable by the unilateral act of one of the co-tenants
Termination only by:
-death
-mutual agreement in writing
-divorce (after decree, H/W hold estate as tenants in common)
-execution by a JOINT creditor
GA has abolished this tenancy
What possession rights do co tenants have?
Each co-tenant has the right to possess the whole of the property- consistent with the same right in every other co-tenant
Does a co-tenant in possession have to share profits that this co-tenant received from the land?
One co-tenant does not have to account to another co-tenant for his share of the profits however this is subject to
1) ouster: accounting is required if one co-tenatn is either keeping another co-tenant off the prop or claiming a right of exclusive possession
2) an agreement to share
3) lease of the property by a co-tenant to a TP
4) depletion of natural resources
Contribution
Concerns the right of one co-tenant to force the other co-tenants to pay their fair share of some expenditure made on the prop.
Depends on what type of expenditure was made on the prop.
1) Building a house (improvements to it): No right of contribution but may be recouped later at the sale time or on partitioning the prop.
2) Repairs: Yes but only for necessary repairs
3) Paying mortgage: Yes, contribution is required for nay mortgage on the prop that has been signed by all co-tenants
4) Taxes: Yes, contribution is required towards all govt imposed obligations
Non Freehold Estates
Landlord Tenant Estates
Four types:
- Estate for Years (Tenancy for Years)
- Periodic Tenancy
- Tenancy at Will
- Tenancy at Sufferance
Estate for Years
AKA Tenancy for Years
Any estate measured by a fixed period of time =tenancy in years, no matter how short the duration.
Key= specified time (doesn’t have to be in years)
–Must specify two dates (the beg and the end date)
For any tenancy for years over 1 year, it must be in writing (satisfy SoF). A 1 year tenancy may be oral.
Notice is not required between landlord/tenant to terminate
Tenancy for Years in Ga
Presumed to exist if the lease period is 5 years or more. Anything less than 5 ears is presumed to be a usufruct
Usufruct
the right to enjoy the use and advantages of another’s property short of the destruction or waste of its substance
Periodic Tenancy
Key = repeating
This estate keeps going until one party gives notice
Created by
1) Express agreement
2) Implication; if the lease does not specify how long the tenancy is to last, then it is presumed to be the periodic tenancy measured by the rent payment (ex. month to month tenancy is created if rent is to be paid monthly)
3) Operation of Law: oral leases that violate SoF
4) Operation of Law; Holdover Tenants
Termination:
by giving proper notice–to be valid, must satisfy:
1) enough time given: an amount of time equal to the length of the period of the tenancy except in the case of year to year which generally only requires 6 mo. notice.
2) effective date: to be valid, effective date must be at he end of the period of the tenancy
Holdover Tenants
a tenant is one who was on the property under a valid lease agreement but the lease has expired and the tenant nonetheless remains on the property
When the landlord accepts a rent check form a holdover tenant, a periodic tenancy has been created by operation of law for the period specified in the rent check.
Tenancy at Will
Either party can terminate at any time by one party giving the other notice of the termination and a reasonable time to vacate the premises
Termination by operation of law:
1) death of either party
2) waste by tenant
3) assignment by tenant
4) transfer of title by landlord
5) leases by landlord to TP
GA LAW: Recognizes a tenancy at will but imposes a notice requirement. Landlord must give 60 days notice, tenant must hive 30 days notice.
Tenancy at Sufferance
Holdover tenants
Arises in ONE situation: tenants has bare possession of the prop (no interest) that arose when tenant wrongfully held on to the prop.
Landlord has two options:
1) Sue to evict on trespass and recover damages (In Ga, Landlord must continue to provide utilities until eviction =complete)
2) Impose New Periodic Tenancy: (if reasonable under the circumstances): Measured
- -if less than a year, measure it by rent payment
- -if residential prop, it will be month-to month’
- -if commercial, year to year
Raised Rent
If the landlord give tenant notice of the increase in rent before the expiration of the lease then the landlord may properly demand payment of the higher rent amount IF THE TENANT IS A HOLD OVER TENANT
Tenant Duties
1) Duty to pay rent
2) Duty to Maintain Property: CL duty not to commit waste, if lease includes tenant’s covenant to repair the tenant is liable for everything even ordinary wear/tear (unless parties state otherwise)
**Note: tenant is not responsible for premises that are destroyed through no fault of the tenant’s. Tenant has no duty to rebuild the structure even if there is a covenant for repairs.
Landlord Remedies for Tenant Failing to Pay Rent
Landlord can sue for damages and terminate the lease thus evicting the tenant.
GA follows this but allows a 7 day grace period for the tenant to pay rent.
–At CL, landlord was only able to collect amt. in arrears & termination was not available
Landlord Remedies for Tenant Unjustifiably Abandoning the Prop.
1) Landlord accepts offer of abandonment and treats it as an offer for surrender of the leasehold. Landlord accepts by retaking the prop, terminating the lease. Tenant has no further rent obligations.
2) Landlord relets premises, holding tenant liable or deficiency. Landlord must make a reasonable effort to relet the prop in order to mitigate tenant’s damages. IF the rent that the landlord gets is less than what the defaulting tenant had originally promised to pay, then original tenant will be liable for deficiency in payments.
Duties of Landlord
1) Duty to deliver possession of leased premises–if landlord cannot deliver actual possession, landlord is in breach of else
2) Implied Warranty of Habitability: applies only to residential property. Obligates the landlord to provide and maintain the leased premises that are reasonable suited for residential use (fit for basic human habitation)
3) implied covenant of quiet enjoyment: implied promise not to interfere with tenant’s quiet enjoyment of the leased premises (included in every lease)
Retaliatory Eviction
If tenant lawfully reports landlord for housing code violation and thus breaching the implied warranty for habitability, the landlord is barred from penalizing tenant.
Tenant Remedies for Breach of Implied Warranty of Inhabitability
1) Tenant can move out and end the lease with no further lease obligations
2) Tenant can stay on the property can sue for damages.
3) Some states allow for tenant to make reasonable repairs and deduct the costs from rent
GA: Landlord has no duty to repair unless tenant’s interest is usufruct–then if landlord fails to make necessary repairs within a reasonable time the tenant may make the repairs and deduct the cost from rent
Ways a landlord breaches implied covenant of quiet enjoyment?
1) Total eviction: direct/physical invasion by landlord against tenant that breaches the quiet enjoyment.
2) Partial Eviction: 2 types
- -Landlord physically excludes the tenant from only some portion of the leased property. Remedy for this: Stay on the remaining property FOR FREE!!!
- -can also occur where some TP, who holds paramount title, retakes the prop and physically excludes the tenant from that portion of the leased premises. Remedy: IF there is partial eviction by a TP (not landlord) then the rent is proportionally reduced to reflect the amt. taken
3) Constructive Eviction: landlord fails to provide some service that the landlord was obligated to provide AND that failure makes the prop uninhabitable.
- -Four Requirements:
a) must be Landlord’s failure to provide some service NOT TP
b) must be substantial interference with quiet enjoyment
c) tenant must give landlord notice and reasonable time to repair
d) tenant must abandon within a reasonable time
Assignment
Transfers all interests in the land
Involves a lease containing privity of K between the parties to the lease agreement and contains a conveyance creating privity in estate between the parties. This provides separate independent grounds for liability.
Sublease
Transfers only a part of an interest in prop
GA; Tenant cannot transfer the usufruct without first obtaining landlord consent.
Involves a lease containing privity of K between the parties to the lease agreement and contains a conveyance creating privity in estate between the parties. This provides separate independent grounds for liability.
Assignment: Liability of Successive Assignees for Payment of Rent
A tenant is liable to the landlord for rent if there is either privity of K OR privity of estate.
Privity of Estate
Exists between ONLY the present landlord and the present tenant
Privity of K
Exists ONLY where there is an agreement between Landlord and the particular tenant from whom the landlord seeks to recover rent.
Generally, in the absence of an express contractual agreement (express assumption), there is no privity of K between Landlord and the later tenants.
Covenant to Pay Rent
Runs with the land and is enforceable based on either privity of K or privity of estate
Other covenant found in lease agreements
General rule = covenant will run with the land if it touches and concerns the land
Touch and Concern= if performance of the covenant makes the land MORE VALUABLE or MORE USEFUL.
Liability of Successive Landlords on the Lease: Tenant Sues Original Landlord
Orignal landlord continues to be liable to the original tenant under privity of K
Successor landlords may be liable to original tenant IF there is either privity of K or privity of estate AND the lease covenant runs with the land
Subtenant’s Liability for Rent
Landlord can recover rent from anyone with whom he is in privity (either K or estate)
In case of a sublease, the sublessor keeps the estate (the estate is NOT transferred to the Sublessee).
–Privity of Estate between Landlord and Sublessee usually won’t work because the estate is never transferred to sublessee therefore the sublessee cannot be the present tenant
Generally, the sublessee will NOT be liable to the Landlord on any of the lease covenants (due to lack of privity) but the sublessor remains liable to the landlord.
Non-Assignment/Sublease Clauses
A clause in the lease that says the tenant may not assign or sublet without the express permission of the landlord
Validity of the Non-Assignment/Sublease Clause
Cts construe it as valid and fully enforceable but will strictly construe it
Violation of a Non-Assignment/Sublease Clause
makes the attempted transfer voidable at the option of the landlord
Waiver of Non-Assignment/Sublease Clause
Permission given once means that a non assignment/sublease clause is waived altogether unless the landlord states otherwise at the time of giving permission (at the time he consents to the transfer)
Cts are quick to find waiver
Eminent Domain: Partial Condemnation
A partial taking by eminent domain does NOT release the tenant form obligation to pay full rent
The tenant will get an amount equal to the rent that was to be paid over the remainder of the lease term for that portion of the property that was condemned
Eminent Domain: Complete Condemnation
Complete taking extinguishes the lease and the tenant is excused from paying any further rent
The tenant will share in the condemnation award only to the extent that the fair rental value of the property exceeds the amount of rent due under the lease
