Real Property

Question 1

Alienation of Property

Answer 1

Inter vivos:** **saleor gift

• Must be present intent to transfer (even if it is a future interest)
  
  • usually manifested by delivery of deed (mail, etc.)
    
    • sometimes by drafting and recording
    • physical delivery not always necessary​
      
      • recording deed creates presumption of delivery
    • delivery of deed creates presumption of present transfer, but parol evidence permitted
      
      • oral conditions on deed not enforceable
  • cannot retain right to recover

​​At death: devise (by will) or intestate succession

Question 2

Fee Simple

Answer 2

Largest possessory estate.

• capable of lasting forever
• inheritable
  
  • default
    
    • if language of transfer is ambiguous, assume the grantor is giving fee simple
      
      • language describing purpose of deed usually creates fee simple
    • “to grantee and his heirs” indicates fee simple, but “and his heirs” is not necessary

Question 3

Defeasible Fees

Answer 3

Capable of lasting forever, but may be terminated by occurrence of an event.

• fee simple determinable (grantee)
  
  • possibility of reverter (grantor)
• fee simple subject to condition subsequent (grantee)
  
  • right of entry (grantor)
• fee simple subject to executory interest (grantee)
  
  • executory interest (3rd party)

Question 4

Fee Simple Determinable

Answer 4

Fee simple to grantee but limited by durational language that gives grantor a possibility of reverter.

• “so long as”
• “while”
• “during”
• “until”

Grantor’s interest (possibility of reverter) vests automatically when the durational period ends.

Question 5

Fee Simple Subject to Condition Subsequent

Answer 5

Fee simple to grantee but limited by conditional language reserving a right of entry to grantor

• “but if”
• “provided”
• “on the condition that”

Grantor’s interest (right of entry) does not vest automatically but must be claimed/exercised.

** If ambiguous, courts usually fee simple interpret condition subsequent over fee simple determinable

Question 6

Fee Simple Subject to Executory Interest

Answer 6

Grantee receives a fee simple but conditional or durational language grants a 3rd party an executory interest that may divest the grantee upon a future event.

Question 7

Life Estate

Answer 7

A present estate limited by a life and followed by a future interest:

• created by words “for life” or other words indicating intent to create an estate ending with the death of the measuring life.
• transferable during the measuring life
• terminates when the measuring life dies

Question 8

Waste

Answer 8

Three kinds of waste:

• affirmative: caused by voluntary conduct that decreases the property value
• permissive: neglect that decreases the property value
• ameliorative: conduct that changes the property and **​increases **​the property value

May exist where more than one party has an interest:

• landlord/tenant
• co-tenants
• mortgagee lender/mortgagor borrower (both lien theory and title theory)

Question 9

Concurrent Estates

Answer 9

Ownership or possession by two or more persons concurrently.

1. tenancy in common
2. joint tenancy
3. tenancy by entirety

• each tenant has right to possess all of the property
  
  • ​may not bind eachother to boundary agreement
  • mineral rights according to interest
• third party rents split according to ownership interest
  • no split of profits derived by one tenant from the property
• right to reimbursement for necessary expenses (taxes, mortgage) through suit for **contribution. **
• no right to reimbursement for repairs, but may sue for partition
• duty of fair dealing - acquisition by one is acquisition by all

Question 10

Tenancy in Common

Answer 10

Default common tenancy; owners have separate but undivided interests in the property, but no right to survivorship

• freely transferable
• one tenant

Question 11

Joint Tenancy

Answer 11

Characterized by a right of survivorship. Grantor must make a clear expression of intent and include survivorship language. Four unities:

1. possession: tenants have equal right to posses the whole
2. interest: tenants have equal shares of the same type of interest
3. time: tenants received share at the same time
4. title: tenants received interests in the same instrument of title

** Any loss of unity turns severed interest into tenancy in common. Where 2+ joint tenants, remaining joint tenants are in joint tenancy with respect to eachother but the joint tenancy is a tenancy in common with the other, severed tenancy.

• fee conveyance
• mortgages: in lien theory jurisdictions (majority), mortgage does not sever
• leases: some jurisdictions hold that a lease severs, some hold that it temporarily suspends
• fiduciary duty and duty of fair dealingn (may contribute to mortgage/tax sale buyback)

Question 12

Tenancy by the Entirety

Answer 12

Joint tenancy between married spouses; interests cannot be alienated without consent.

• four unities of joint tenancy plus marrital unity
• grantor must clearly indicate that it is a tenancy by the entirety
• no unilateral partition right

Question 13

Partition

Answer 13

In a partition action, the court divides the property into distinct portions according to interest plus value of repairs, improvements

• equitable remedy available to tenants in common and joint tenants
• unilateral right
• preference for physical partition of property, if possible
  • if not practical or not fair, then partition by sale
• **clear **agreements not to partition with **reasonable ** time limitations will be upheld

Question 14

Ouster

Answer 14

Where co-tenant in possession denies another tenant access to the property. Remedies are:

• injunction
• damages for value of use while tenant was unable to access

Ouster for a statutory period can constitute adverse possession.

Question 15

Executory Interest

Answer 15

Future interest in a thrid party that divests the the prior interest

• **springing **executory interest: divests the grantor
• **shifting **executory interest: divests prior grantee

Transferable (modern majority - not at common law).

Question 16

Remainder

Answer 16

Interest following a life estate (never follows a fee!). May be **vested, **vested subject to open (class gifts), or contingent.

Fully transferable, devisable, or descendable in most jurisdictions

• reachable by creditors, too

Question 17

Doctrine of Worthier Title

Answer 17

Creates a presumption of a reversion to the grantor and prevents remainders in grantor’s heirs.

Question 18

Rule in Shelley’s Case

Answer 18

Uses doctrine of merger to create a fee simple where there would otherwise be a remainder in grantee’s heirs.

Question 19

Rule Against Perpetuities

**more likely to be violated by inter vivos gifts**

**always violated by class condition of age beyond 21 years**

**always violated by interest following widow’s life estate**

**always violated by exec. interests following fee without time limit**

Answer 19

Future interests must vest or fail within 21 years of the end of the measuring life, which must be alive when interest is created (time of grant or death)

• where multiple future interests, only those in violation fail
• for class gift, void as to all if void as to one, except
  
  • transfers of specific dollar amounts to each class member
  • transfers to a subclass that vest a specific time
• future interests passing from one charity to another are not subject
• future interests in grantor not subject
• options to purchase real property by current leasehold tenants are not subject
• majority jurisdictions have statutory “wait and see” approach

Question 20

Tenancy

Answer 20

Mix of contract interest and property interest. Four kinds:

1. tenancy for years
2. periodic tenancy
3. tenancy at will
4. tenancy at sufference

Question 21

Tenancy for Years

Answer 21

An agreement by the landlord and tenant demonstrating intent to lease for a fixed and ascertainable amount of time.

• terminates automatically
  
  • no notice necessary (unless stated otherwise)
  • tenant may also surrender lease prior to termination
  • may also end if either party commits a material breach​
  • does not terminate automatically on death of landlord

Question 22

Periodic Tenancy

Answer 22

Arises out of express or implied intent to create an estate that is repetitive and ongoing.

• renews automatically at the end of each period until one party gives adequate notice of termination
  
  • notice before the start of the last term - notice is effective the last day of the period in which it is given]
    
    • except year to year: only 6 mos notice needed
  • does not terminate automatically on death of landlord

Question 23

Tenancy at Will

Answer 23

Arises out of an express or implied agreement (if not expressly created, converts to periodic tenancy on payment of rent)

• may be terminated by either party at any time for any reason
  
  • with or without notice (reasonably)
  • may agree to give only the tenant the right to terminate at will,
    
    • landlord cannott reserve exclusive right to terminate at will
  • tenancy terminates if either party dies
    
    • unless agree otherwise

Question 24

Tenancy at Sufference

Answer 24

Created when the tenant holds over after a lease has ended but there is no agreement between the landlord and tenant.

• terms of prior lease control
• terminates when
  
  • tenant voluntarily leaves,
  • landlord evicts tenant (formal legal process), or
  • landlord re-rents to tenant
    
    • if landlord accepts rent, periodic tenancy created
    • amount of rent due remains the same unless tenant was notified prior to end of prior lease

Question 25

Tenant’s Duties

Answer 25

• duty to pay rent
  
  • duty suspended in three circumstances:
    
    1. premises destroyed (but not by tenant)
    2. landlord completely, partially, or constructively evicts tenant
    3. landlord materially breaches
       
       • breach of implied covenant of quiet enjoyment
       • breach of implied warranty of habitability
• duty to avoid waste
  
  • ​duty not to commit affrimative or permissive waste
    
    • ​exception: normal wear and tear
    • must notify landlord of need for repairs
      
      • ​residential lease provision that puts repair duty on tentant is generally void
    • ​may commit ameliorative waste, usually with permission

Question 26

Implied Covenant of Quiet Enjoyment

Answer 26

In both residential and commercial leases, there is an implied covenant of quiet enjoyment that is breached where the landlord takes actions that make the premises wholly or substantially unsuitable for the their intended purpose, causing the tenant to be constructively evicted.

Question 27

Constructive Eviction

Answer 27

Elements:

1. premises are unsuitable for ther intended purpose (breach of ICQE)
2. tenant notifies landlord,
3. landlord does not correct the problem, and
4. the tenant vacates the premises after a reasonable time

Question 28

Implied Warranty of Habitability

Answer 28

The landlord has an implied obligation to maintan residential property such that it is suitable for such use and does not pose a threat to health or safety.

• tenant cannot waive
• failure to comply with housing code constitutes a breach
• if tenant has notified landlord and landlord has had **reasonable opportunity to fix **but has not, tenant may
  
  • refuse to pay rent,
  • rememdy the defect and offset rent by the cost, or
  • defend against eviction

Question 29

Landlord’s Duties

Answer 29

• duty to repair (where not tenant’s fault)
  
  • in a commercial lease only, may place duty on tenant
• duty to deliver possession
  
  • majority: must deliver actual (physical) possession
  • minority: only required to deliver legal possession
• duty to maintain conditions
  
  • must control common areas and nuisance-like behavior of other tenants
  • implied covenant of quiet enjoyment
  • implied warranty of habitability
• duty to mitigate damages if tenant abandons or must be evicted
  
  • majority: must make reasonable efforts to re-rent the property
    
    • entitled to difference between original rent and new
  • minority: does not need to mitigate damages (usually in commercial situtions)

Question 30

Lease Transfers

Answer 30

Tenant’s interest: by assignment or sublease

• Majority Rule: Transfers are presumable permitted; a landlord may deny permission to a transfer only for a commercially reasonable reason.
• Minority Rule: A landlord may deny transfer at his discretion, ever for no reason at all.

Landlord’s interest: landlord does not need tenant’s permission to transfer interest to a new party, but the new landlord is bound by the terms of the existing lease.

Question 31

Assignment

Answer 31

A complete transfer of a tenant’s remaining term.

• lanlord may demand rent from either the original tenant (privity of contract) or assignee (privity of estate)

Question 32

Sublease

Answer 32

A transfer of less than the entire remaining duration of the lease. Sublessee has no privity of estate with landlord

• landlord may only demand rent from original tenant;
• sublessee only has obligation to original tenant
• sublessee not bound by covenants in original lease
  
  • unless sublessee expressly assumes
• sublessee may enforce covenants by lessee, but not landlord

Question 33

Adverse Possession

Answer 33

Where unlawful possessor acquires title via continuous, open and notorious, hostile, and** exclusive** use of the property.

• continuous: must be for statutory period of time (20 years at common law)
  
  • seasonal use counts if consistent with type of property
  • period of use by one adverse possessor tacks to subsequent transferees
• open and notorious: a reasonable owner would be on notice
• hostile: cannot have permission
  
  • ​majority: no inquiry into adverse possessor’s state of mind
  • minority/good faith: ​adverse possession must be mistaken
  • minority/bad faith: adverse possession must be a
• title relates back to time of entry;
  
  • does not apply to future interests
  • does apply to subsurface rights
• statute is tolled if at time of entry true possessor is disabled by **insanity, infancy, **or imprisonment
• government property cannot be adversely possessed

Question 34

Dedication

Answer 34

Dedication is the appropriation of land by the owner for public use. Once land is dedicated, the owner no longer retains any rights that are inconsistent with the complete exercise and enjoyment of the dedicated use. Here, the owner’s recording of the plan is a dedication of the streets shown on the plan to public use, which means the owner gave up the rights at issue by virtue of the dedication.

Question 35

Profit a Predre

Answer 35

An easement right to enter another’s land for the purpose of removing its natural resources.

• analyzed similarly to easements

Question 36

Implied Servitude***

Answer 36

• No notice necessary

Question 37

Easements

• 1. Was an easement created?*
• 2. What was the scope?*
• 3. Was it terminated*

Answer 37

Right held by dominant estate (or person) to make specific, limited use of servient estate.

• express easements
• easement by necessity
• easement by implication
• easement by prescription
• easement by estoppel

Question 38

License

(Oral Easement)

Answer 38

A license is an oral easement that is a mere privilege (a non-possessory right) to enter another’s land for some delineated purpose.

Question 39

Unjust Enrichment

Answer 39

A court will imply a contract to prevent unjust enrichment when

• the plaintiff has conferred a “measurable benefit” on the defendant,
• the plaintiff acted without gratuitous intent, and
• it would be unfair to let the defendant retain the benefit because either
  
  • the defendant had an opportunity to decline the benefit but knowingly accepted it, or
  • the plaintiff had a reasonable excuse for not giving the defendant such opportunity, usually because of an emergency

Plaintiff is usually entitled to restitution rather than specific performance.

Question 40

Reversion

Answer 40

Future interest (fee simple) in the grantor following a life estate

Question 41

Vested Remainder

Answer 41

Given to an ascertained grantee and not subject to a condition precedent.

• fully transferable, devisable, descendable

Question 42

Vested Remainder Subject to Open

Answer 42

With class gifts, where full class **membership is unknown **but at least one member is vested (conditions fulfilled and could receive immediately).

Rule of convenience: if no closing date, class closes when any member is entitled to immediate possession

• class includes any members in gestation at closing

Question 43

Contingent Remainder

Answer 43

Not vested​ because

• beneficiary is unknown, or
• beneficiary is subject to a condition precedent that has not yet occurred
  
  • ​e.g. “then to B if B survives A”

Modern trend: interest may typically be transfered, devised, or descended even prior to vesting.

Question 44

Life Tenant

Answer 44

• Possessor of a life estate.
• Rights:
  
  • possession
  • all rents and profits
    
    • ​exploit minerals if authorized or must to maintain
  • right to lease, sell or mortgage (for duration of life)
• Duties:
  
  • pay all ordinary taxes and interest on mortgage
    
    • if the property is not producing income, responsible for interest and taxes to the extent of reasonable rental value
  • avoidt waste (so far as property income allows)

Question 45

Remainderman

Answer 45

Holder of a remainder. During life estate, right to

• enter
• inspect
• seek injunction for waste
• ​Responsible for mortgage principle.

Question 46

Vested Remainder Subject to Complete

Answer 46

Vested remainder subject to condition subsequent.

• e.g. “on A’s death to B, but if B predeceases A, to C”

Question 47

Broker’s Duties

Answer 47

• Broker has fiduciary duties
  
  • usually agent of seller
  • most states prohibit dual agents
  • in some states, merely a transaction facilitator
• usually entitled to commission on procurement of ready, willing, and able buyer
  
  • rights vests when contract executed or conditions of contract are fulfilled
  • minority: if buyer defaults, no commission

Question 48

Statute of Frauds - Land Sale Essential Terms

Answer 48

• parties
• property description
• terms of price and payment

Question 49

Land Sale - Contract Stage

Answer 49

• liability only based on contract provisions
  
  • ​timing of closing not of the essense unles contract so states
    
    • ​but breaching party liable for incidental loss (tax, interest)
  • implied covenant of marketable title at closing
  • implied warrantly of fitness/suitabiity (new homes)
• statute of frauds applies (may be rescinded orally)
• specific performance available to both parties

Question 50

Land Sale - Deed Stage

Answer 50

1. deed stage
   
   • begins at closing
   • liability only on deed warranties
     
     • doctrine of merger: covenants under the contract are merged into the deed and cannot be enforced unless also in deed

Question 51

Implied Warranty of Suitability

(New Homes)

(​Land Sale - Contract Stage)

Answer 51

Seller asserts use of adequate materials and good workmanship

• covers latent defects (buyer has duty to inspect)
• ​runs to both initial purchaser and subsequent ones
• suit must be brought within reasonable time
  
  • ​time might begin to run before sale!
• may be disclaimed
  
  • ​”as-is” not specific enough​
• damages: usually cost of compliance
  
  • substantial defects might be remedied with difference between value as is and warrantied value

Question 52

Implied Covenant of Marketable Title

(Land Sale - Contract Stage)

Answer 52

Every land sale contract has an implied covenant of marketable title

• may contract otherwise
• defects:
  
  • unquieted adverse possession title
  • future interest holders have not agreed to the transfers
  • private encumberance (mortgage, covenant, easement)
  • zoning violations
  • significant physical defect or encroachment
  • lack of access to property
• remedies: rescision, price adjustment
  
  • Buyer must give time to cure

Question 53

Land Sale - Disclosure Duties

Answer 53

Majority: seller must disclose all known material physical defects to the buyer that are not readily known/observeable.

• material: substantially affect the value of the residence, impact health/safety, or affect desirability
• remedies: rescision, damages

** some states only impose on commercial sellers

*** failure to disclose may also be grounds for liability in fraudulent concealment or misrepresentation

• “as is” language not enough to protect seller

Question 54

Equitable Conversion

Answer 54

Between contract and closing, equitable title passes to buyer.

• seller has duty of upkeep of property
• seller has legal title and right to possess
• buyer has authority to grant easements
• buyer has risk of loss
  
  • unless due to seller’s intentional or negligent acts
  • minority - Uniform Vendor and Purchaser Risk Act keeps with seller
  • ​if seller has casualty insurance, usually must credit it against price
• in case of death. for purposes of distribution
  
  • ​seller’s interesit treated as personal property
  • buyer’s interest treated as real property

Question 55

Mortgage

Answer 55

A document that conveys to the lender (mortgagee) an interest in real property as security for the performance of an act, either by the mortgagor or another.

• majority - lien theory: mortgagee is treated as holding a lien
• minority - title theory: mortgagee holds title until mortgagor satisfies debt

Subject to recordings act

** mortgagor does not have not sign the promissory note that the mortgage secures

Question 56

Deed of Trust

(Land)

Answer 56

Mortgage alternative. Borrower converys title to 3rd party who will deliver title to him on payment of note, or sell the land on default.

Question 57

Installment Land Contract

Answer 57

Seller retains title until buyer makes final payment.

• common law: seller keeps all payments and retake possession if buyer defaults
• some states treat as mortgage: seller must foreclose
• some states require buyer to have equitable right of redemption
• some states require restitution to buyer if seller retakes possession on default

Question 58

Disguised Mortgage - Conditional Sale and Repurchase

Answer 58

Real property sold then leased back to seller, usually for long period of time with option to repurchase

• might be treated as a security interest
• factors:
  
  • equivalency of lease payment
  • fair market retail value
  • likelihood of exercise of right to repurchase

Question 59

Transfer of Mortgaged Property

Answer 59

Mortgagor generally remains personally liable on transfer

• secondarily liable if transferee assumes the mortgage
  
  • ​if transferee’s obligation is modified by lender, original mortgagee is released; discharged from personal liability
  • mortgagee is discharged if lender impairs mortgage
    
    • ​some jurisdictions: personal liability diminished in proportion to value impaired
• ​​May include a “due on sale”/due on encumberance clause
  
  • full amount due on transfer, or lender may permit transferee to assume (usually with an “assumption fee”
  • not federally enforceable for residential properties in some types of devise/descent transfers

Question 60

Foreclosure

Answer 60

At default,

• mortgagee must give notice
• prior to sale, mortgagor can redeem property and gain title
• all states permits judicially supervised public sale
  
  • half: private sale ok if mortgage had power of sale clause
  • proceeds applied:
    
    1. costs of sale
    2. balance and interest of foreclosed obligation
    3. junior interests
    4. debtor
• terminates junior interests in property

Question 61

Future Advance Mortgage

Answer 61

Mortgage to secure a line of credit.

• if payment required, FAM has priority over all payments even with notice of subsequent mortgagees
• if payment is optional, FAM only has priority over payments made before notice of subsequent mortgageee
• modern trend: all future advances have priority over subsequent mortgages

Question 62

Marshalling of Assets

Answer 62

A court may compel the holder of a senior mortgage on one property and other properties may require that holder to first foreclose other properties over which it has the sole security interest, in order to protect the junior creditors on a property.

Inverse order rule: if there are junior interests on multiple properties that the mortgagee has priority in, he must foreclose in order of recency of the interests.

Question 63

Personal Liability of Mortgagor

Answer 63

In most jurisdictions, mortgagor is also personally liable on the note.

• may bring an action against personal liability before foreclosing
• in some jurisdictions, may also pursue personal liability after foreclosure if sale is not sufficient
  
  • usually not if sale was private

Question 64

Mortgage Subrogation

Answer 64

Equitable remedy whereby a person who completely discharges a mortgage obligation of another becomes the owner of the mortgage.

• often granted where subrogee was under legal duty to pay off or does so to protect own interests

Question 65

Mortgage Merger

Answer 65

Where mortgagee and mortgagor’s interests are both acquired by the same 3rd party, they merge into a fee simple.

• 3d R: no merger for mortgages

Question 66

Options Contracts

Answer 66

• consideration paid; grantor cannot revoke
  
  • does not terminate on death of grantor
• counteroffers do not constitute rejection
• must exercise option pursuant to terms
  
  • mailbox rule does not apply - must be recieved within specified period
• RAP does not apply to current tenant’s option
  
  • ​minority: doesn’t apply to options in commercial contracts

​** is an encumberance on marketable title

Question 67

Recording Act - Notice Statutes

Answer 67

Purchaser who purchases without notice of prior interest will prevail. Look for statutory language:

• “in good faith”
• “without notice”

Question 68

Recording Act - Race Statutes

Answer 68

Purchaser who records first prevails. (Minority of jurisdictions)

Question 69

Recording Acts - Race-Notice Statutes

Answer 69

Subsequent purchaser will prevail only if lacks notice of prior interest and records first.

Question 70

Recording Acts

Answer 70

Establish priorities among conflicting interests (all types) in property

• only protects those who paid value for interest
  
  • mortgagees: “paid value” unless mortgage was acquired after loan was given
  • judgment creditors: only protected against subsequent claims
    
    • purchaser at judicial sale is protected against all claims
  • donees/heirs/devisees: not protected against prior claims
    
    • unless receiving from bona fide purchaser - then sheltered by BFP’s status

Question 71

Estoppel by Deed

Answer 71

Where a grantor conveys land by warranty deed prior to actually owning it, estopped from later denying validity of deed.

• when grantor does acquire title, automatically transfers to grantee
• subsequent purchasers from grantor can still acquire title in race-notice jurisdictions
  
  • even a recorded deed prior to date of actual title will not put subsequent purchasers on notice

Question 72

General Warranty Deed

Answer 72

**Present covenants **(only enforceable by initial purchaser)

1. seisen: grantor owns the land
2. right to convey: grantor has right to transfer
3. against encumberances: no undisclosed encumberances

**Future covenants **(run with the land)

1. quiet enjoyment: protection against subsequent title claims
   
   • ​​only liable if the title claims are valid
2. warranty: protection against subsequent encroachment
3. further assurances: assurance to pass title if later deemed invalid
   
   • ​​(some jurisdictions)

Question 73

Fixtures

Answer 73

Tangible personal property incorporated into real property

• once incorporated, not subject to separate security interest
  
  • PMSI has 20 days after good becomes fixture to record to maintain priority
• presumed to remain with property on sale
• reasonable person standard
  
  • importance to the property/custom design
  • damage by removal
    *

Question 74

Express Easement

Answer 74

Created in writing compliant with statute of frauds

• even express easements noted on deed are lost by merger of the underlying properties
• even express easements that are not recorded on deed are unenforceable against bona fide purchaser without notice

Question 75

Easement by Necessity

Answer 75

Created where property is virtually useless (landlocked) without benefit of easement

• both properties must have once been under common ownership
• necessity must have arisen at time the properties were severed
• no need of showing of prior use/quasi easment at the time!
  
  • contrast with easement by implication

Question 76

Easement by Implication

Answer 76

Where an an earlier owner had easement. Prior use must have been:

• continuous
• open and obvious
• reasonably necessary for dominant’s estate’s use and enjoyment

Quasi-use: where both estates had the same owner at the time of the prior use

recorded plat: owner purchased lot in a subdivision and the subdivision map indicated that roads would exist

Question 77

Easement by Prescription

Answer 77

Similar to adverse possession. Use must have been:

• continuous
• actual
• open
• hostile
• for statutory period (20 years at common law)
• need not** **be exclusive

Scope limited by nature and extent of use.

Question 78

Easement by Estoppel

Answer 78

Where servient estate’s permission creates good faith, reasonable, detrimental reliance.

Question 79

Non-Posessory Land Uses

Answer 79

• easements
• licenses
• profits
• water rights
• emblements

Question 80

Termination of Easements

Answer 80

Release: express writing compliant with statute of frauds

Merger: if estates are acquired in fee by one owner

Abandonment: affirmative action to abandon easement

• mere words and/or inaction not enough
  
  • unless detrimental reliance

Prescription: holder fails to protect for statutory period

Sale: to bona fide purchaser without notice

Question 81

Covenants Running with the Land

Answer 81

May be enforced on subsequent owners where:

• writing compliant with statute of frauds
  
  • exception: implied reciprocal servitudes
• intent (look for circumstances or explicit language)
• touch & concern: benefit or burden affects promisee and promisor as landowners, not merely individuals
  
  • ​courts reluctant to find for this prong
  • covenant to maintain insurance will usually be upheld
  • modern: presume valid unless conflict with public policy, unreasonable restraint on alienation, or unconscionable
• notice (under recording act): actual or constructive
• privity:
  
  • ​horizontal privity (shared property interest) at time of original covenant required for burden to run
  • vertical privity:
    
    • burden runs where successor holds entire interest in servient estate held by original
    • benefit runs where successor holds at least some portion

Question 82

Equitable Servitude

Answer 82

Land covenants enforced at equity

1. must be intent for both the benefit and burden to run to successors in interest
2. touches and concerns the land
3. actual, record, or inquiry notice

No need to show privity, but limited to damages in equity

*** contrast with real covenant where money damages can be due - ​may enforce a promise under both theories

Question 83

Implied Reciprocal Servitudes

Answer 83

1. intent to create servitude on all plots in subdivision
2. servitude must be negative (promise to refrain)
3. actual, record, or inquiry notice

Changed circumstances: defense that it no longer makes sense to enforce due to drastic changes in the surrounding area

• change in zoning

Question 84

Equitable Vendor’s Lien

Answer 84

Where the seller of real estate finances part of the purchase price

• does not constitute a PMSI - not a secured interest
  
  • does not have priority over recorded mortgages or other recorded liens

Question 85

Redemption

Answer 85

Equitable right of redemption: after foreclosure and prior to sale, mortgagor can pay the full purchase price and interest to gain title to the property.

• mortgagee measures that clog the right of redemptio will often not be upheld by courts

Statutory redemption: some jurisdictions provide by statute additional time after sale where mortgagor can redeem the property.

Question 86

Amortization

Answer 86

A means used to terminate a property use that was permissably in existence at the time of the zoning change, but is not permitted under the new zoning.

Question 87

How is adverse possession obtained?

Answer 87

Adverse possession involves acquiring title to property due to one’s open and notorious use of the land and actual and continuous possession of the land without the owner’s permission for the statutory period. Note: The statute of limitations does not run against a future interest holder until his interest becomes possessory.

Question 88

What is an equitable conversion (in the context of property transfers)?

Answer 88

An equitable conversion occurs when parties sign a contract for the sale of land. Upon signing the contract, the parties’ interests switch in that the buyer gains a real estate interest and the seller gains a personal property interest.

Question 89

What is the warranty of marketable title?

Answer 89

An implied warranty contained in a contract for the sale of land guarantees that the seller will provide title that is reasonably free from doubt at closing. Defects in the chain of title can destroy marketable title, as can encumbrances like mortgages, easements, covenants, or encroachments on the land. Note: Zoning restrictions do not make title unmarketable.

Question 90

If title is not marketable at closing, what can the buyer do?

Answer 90

The buyer must give reasonable time for the seller to cure, but if title is still not marketable, the buyer can:

• Rescind the contract
• Demand specific performance with abatement of the sale price
• Sue for damages
• Quiet title

Question 91

The warranty of fitness applies to what type of properties?

Answer 91

The warranty of fitness or quality only applies to new constructions.

Question 92

Describe a seller’s liability for defects in relation to the sale of land and existing buildings:

Answer 92

The seller is liable for any undiscovered defects that diminish the value of the property that were the result of fraud, active concealment, or failure to disclose.

Question 93

What disclosures must a seller of land make?

Answer 93

A seller must disclose any serious defect that he knows about or has reason to know about that is not readily apparent to the buyer.

Question 94

What is a deed?

Answer 94

A deed is a document that transfers title. A deed must:

1. Be in writing
2. Contain the signature of the grantor
3. Reasonably identify the parties and the land

Note: A deed is not effective until it is delivered.

Question 95

What is the effect of delivering a deed?

Answer 95

The intent of the grantor, as opposed to physical possession of the deed, ultimately controls. Title passes once a grantor delivers a deed with the intent that the recipient retain title. Note: Once a deed has been delivered, giving the deed back would do nothing to impact the passage of title.

Question 96

What covenants come with a general warranty deed?

Answer 96

• Seisen
• Right to convey
• Against encumbrances
• Quiet enjoyment
• Warranty
• Further assurances

Question 97

What is the covenant of seisen?

Answer 97

The covenant of seisen guarantees that the grantor has title to and possession of the estate he conveys to the grantee at the time of the conveyance.

Question 98

What is the covenant of the right to convey?

Answer 98

The right to convey warrants that the grantor has the authority to make the conveyance to the grantee. Note: The grantor need only have title of the land for purposes of this covenant.

Question 99

What is the covenant against encumbrances?

Answer 99

The covenant against encumbrances is a guarantee that there are no physical encumbrances to the estate or encumbrances to the title of the estate.

Question 100

What is the covenant of quiet enjoyment / covenant of warranty?

Answer 100

The covenant of quiet enjoyment and covenant of warranty are identical. Both gaurantee that the grantee will not be disturbed by a third party’s claim to title. If the grantee’s possession is disturbed by a third party, the grantor warrants that he will defend the suit.

Question 101

What is the covenant for further assurances?

Answer 101

The covenant for further assurances gaurantees that the grantor will take reasonable action to perfect title.

Question 102

What is estoppel by deed?

Answer 102

Estoppel by deed involves the conveyance of an estate, by warranty deed, that the grantor does not yet own; however, when the grantor does acquire the estate, estoppel by deed serves to convey the property to the grantee.

Question 103

What is the purpose of recording acts?

Answer 103

Recording acts protect bona fide purchasers who do not have knowledge of prior unrecorded deeds from the claims of a prior grantee under that deed.

Question 104

What is the effect of recording an interest in a jurisdiction with a race-notice statute?

Answer 104

A bona fide purchaser (BFP) who records trumps someone with an earlier interest, where the BFP had no notice of the prior interest, provided that the person with the earlier interest also failed to record.

Question 105

Who is a bona fide purchaser?

Answer 105

A purchaser who does not have notice of prior interests at the time of the conveyance and who pays valuable consideration is a bona fide purchaser. Note: Recording statutes protect a BFP’s interest.

Question 106

What is the shelter rule?

Answer 106

A person who takes interest in land from a BFP will prevail against any competing claim over which the BFP would have prevailed, regardless of notice.

Question 107

What is the effect of a deed of trust?

Answer 107

A debtor gives a deed of trust to a third party who holds it so that in the event of foreclosure, the lender can instruct the trustee to sell.

Question 108

What is the lien theory of property ownership?

Answer 108

Jurisdictions following the lien theory of property ownership consider the mortgagor to be the owner and mortgagee to merely hold a security interest in the property.

Question 109

What is the title theory of property ownership?

Answer 109

Jurisdictions that follow the title theory of property ownership consider a mortgage to transfer title to the mortgagee.

Question 110

At what date must the seller provide the buyer with marketable title?

Answer 110

The seller must provide the buyer with marketable title at the date of closing. In installment land contracts, the seller must provide the buyer with marketable title at the date when delivery is to occur. Until such date, the buyer cannot seek rescission or withhold payment unless it is impossible for the seller to cure any defects.

Question 111

What is the effect of the grantor’s attempt to retain an interest in the property conveyed?

Answer 111

• If there is no delivery, title does not pass
• If there is delivery and no recording, title passes at that moment
• If there is delivery and the deed states that title will not pass until the grantor’s death, it creates a future estate in the grantee and life estate in the grantor

Question 112

What is a statutory special warranty deed and what covenants does it come with?

Answer 112

A statutory special warranty deed is a deed where state law mandates that the grantor provide assurances that:

1. The estate was not previously conveyed to another third party
2. The estate is free from encumbrances attributable to the grantor