Real Property Flashcards
What are the four ways property can be transferred? Also, what are the two types of interests (time-wise) in property?
Sale, gift, devise, and intestate succession.
Present and future interests.
Who is a person who survives a decedent and takes through intestate succession? Through a will?
An heir takes through intestate succession. You have no heirs until you die. A beneficiary takes through a will.
What is the largest possessory estate? What makes it so? Is it inheritable?
The fee simple absolute because it is capable of lasting forever. The fee simple is inheritable upon the owner’s death by intestate succession or transferred during life through gift or sale.
How is a fee simple absolute created?
Generally, the easiest way is to use “and his/her heirs,” but the fee simple is the presumption when you simply have transfer language such as “to A.”
Basically, if it is ambiguous, it creates a fee simple.
What is created here? Who has what interests?
“to Anna, my hope and wish being that on her death, Anna will give the property to her son, Ben.”
This creates a fee simple absolute owned by Anna. Ben doesn’t own anything. Don’t be fooled by words of intent or purpose (precatory language).
T/F - With a fee simple absolute, there is a present interest and a future interest.
False. There is no future interest associated with a fee simple. This is capable of lasting forever.
What is a fee simple determinable? What language makes a fee simple determinable? What are the different interests in a fee simple determinable?
A FSD is that which is limited by specific durational language. Look for language such as “while,” “during,” and “until.”
The Grantee receives a fee simple determinable.
The Grantor reserves a “possibility of reverter”
T/F - The possibility of reverter activates automatically upon the expiration of a fee simple determinable.
True
What is a fee simple subject to a condition subsequent? What language makes it? What are the different interests?
A fee simple that is limited by specific conditional language. Look for language such as “but if,” “provided that,” and “on the condition that.”
The grantee receives a fee simple subject to a condition subsequent.
The grantor retains a right of reentry. This does not grant possession automatically! The grantor must take action and exercise a the right in order to take possession.
What is a fee simple subject to an executory interest? Who owns what interests?
This is a fee simple that will end upon the happening of an event and the future interest will vest in a third party (someone other than the grantor).
The grantee has a fee simple subject to an executory interest.
The third party has the executory interest
The grantor retains nothing because he has given away all present and future interest.
T/F - An executory interest is a present interest that will cut short (divest), or terminate, an earlier interest.
False. It is a future interest.
Explain what a life estate is. Whose life are we talking about? What are the different interests?
This is a present estate interest that is limited by a life? The measuring life can be the grantee or another person.
Example: “to A for B’s life.”
Grantee has the present interest, which is the life estate.
Grantor retains a reversion (vests automatically at the end).
T/F - The present interest in a life estate is transferable, but the life estate ends upon the same measuring life in the original transfer.
True.
T/F - The owner of a life estate interest who is also the measuring life can transfer the life estate by will and intestate succession.
False. If the owner of the life estate is the measuring life, then the life estate expires upon his/her death and they cannot grant it by will or intestate succession. It automatically goes back to the grantor.
If a grantor dies with a reversion interest or a possibility of reverter, what happens?
He can either pass that interest on through a will, or it will remain in his estate and it will pass through intestate succession.
What is a remainder interest? How is it created?
This is a future interest held by a third party in a life estate after the measuring life dies. This is where the grantor gives a life estate and the future interest (his reversion interest) to a third party.
The grantor retains nothing here!
When does “waste” come into play? What are the different types of waste?
This is when you have more than one party with an interest in the same piece of real property. The owner of the present interest has a duty not to commit waste and preserve the property. The three different types of waste are:
1) Affirmative waste - waste caused by voluntary conduct, which causes a decrease in property.
2) Permissive waste - waste caused by neglect toward the property, which causes a decrease in value.
3) Ameliorative waste - person with present interest changes the use of the property and actually increases the value of the property.
All in all, the property value must CHANGE.
T/F - Waste can occur between two co-tenants (one in possession and one not).
True.
T/F - Concurrent estates EACH have the right to use/possess the WHOLE property.
True
Exception - If the concurrent owners contract out of the basic rule.
Name the three kinds of current estates. Are all available in Texas?
Tenancy in Common
Joint Tenancy
Tenancy by the Entirety (doesn’t exist in Texas because Texas is a community property state)
What is the default concurrent estate interest? What makes it unique from the other two types of concurrent estates?
The tenancy in common is the default. There is NO RIGHT OF SURVIVORSHIP here.
T/F - Tenants in common have separate but undivided interests in the property.
True
What does it mean to have “no right of survivorship” in a co-tenancy?
This means that each co-tenant can transfer their interest in the property freely at death as well as during life.
What is the defining characteristic of a Joint Tenancy? How is it created?
The right of survivorship is the defining characteristic of a joint tenancy, whereby the surviving joint tenants automatically take the deceased tenant’s interest.
The right of survivorship MUST BE CLEARLY EXPRESSED through “survivorship language.”
What four unities must be in place to create a Joint Tenancy? What if one of the unities is destroyed during the Joint Tenancy?
1) Possession - every JT must have an equal right to possess the whole of the property.
2) Interest - JTs must have an EQUAL SHARE of the same type of interest.
3) Time - JTs must receive their interests at the same time.
4) Title - JTs must receive their interests in the same instrument of title.
If ANY of the unities are severed (destroyed), then the joint tenancy is terminated with regard to THAT interest and turns it into a tenancy in common.
What are the three ways a joint tenancy can be severed? What are the majority and minority views of each?
1) Inter vivos transfer - a gift of the JT interest during life destroys the right of survivorship.
2) Mortgages - can possibly sever a JT interest depending on which jurisdiction you are in. The majority of jurisdictions are LIEN STATES that treat the mortgage as a lien and does NOT destroy the JT. The minority of states are TITLE STATES where the mortgage does sever the JT.
3) Leases - whether a lease severs a JT depends on jurisdiction as well. The jurisdictions are split here (no majority or minority). Some say it severs the JT, while others treat the lease as a temporary suspension of the JT.
What is a Tenancy by the Entirety? Does this exist in Texas?
This is a joint tenancy between married couples. Marriage is considered the 5th element of the joint tenancy unities here. There is a right of survivorship here.
Because Texas is a community property state, we do not have Tenancy by the Entirety here.
What is “ouster,” and how can it be remedied?
Ouster is when a co-tenant in possession denies another co-tenant access to the property (changes the locks).
The ousted tenant can get an INJUNCTION granting access AND/OR recover DAMAGES for the value of the USE while the co-tenant was unable to access the property.
How is rent of co-owned property divided? Is anything subtracted?
Rent received from a third party’s possession of the property, minus operating expenses, are divided based on ownership interests of each co-tenant.
Operating Expenses - necessary charges, such as taxes or mortgage interest payments.
T/F - There is a right to reimbursement from co-tenants for necessary repairs and improvements to the land.
If false, what is the remedy?
False as to both.
The negatively affected co-tenant can seek a credit in a later partition action for his payments for necessary repairs and improvements to the land.
What can a co-tenant seek if they pay more than their fair share of operating expenses?
Contribution from the other co-tenants.
What is a Partition? Is there more than one type? Does the court prefer one over the other?
An equitable remedy available to all TICs and JTs (NOT tenants by the entirety). This is a unilateral right. The effect is that the court will divide the property into distinct parts.
Partition in kind - physical division of the property. This is preferred by the courts.
Partition by sale - if physical partition is NOT PRACTICAL or NOT FAIR TO ALL PARTIES, then the proceeds from the sale are divided among the co-tenants based on their OWNERSHIP INTERESTS.
Co-tenants can agree not to partition. What must be true about the agreement for it to be enforceable?
1) must be CLEAR, and
2) TIME limitation must be REASONABLE
What are the two types of executory interests? How are they different?
The SPRINGING EXECUTORY INTEREST divests the grantor.
The SHIFTING EXECUTORY INTEREST divests the grantee.
Remainders follow what kind of present possessory estate?
A life estate.
T/F - A remainder can be vested or contingent.
True
What makes a remainder interest vested?
It is given to an ASCERTAINED grantee (someone who can be identified); AND
The interest is NOT SUBJECT TO A CONDITION PRECEDENT (a condition that must be satisfied in order for the interest to vest).
What does it mean when a gift is vested subject to open?
This applies to class gifts where full class membership is unknown.
At least one person in the class must be vested (if no one is vested, then it is a contingent remainder). When all members of the class are identified, the class is closed.
What is the common law rule that prevents an interest that is vested subject to open from violating RAP? What does the rule say?
The Rule of Convenience says that if the grant doesn’t have an express closing date, the class gift closes when any member of the class becomes entitled to IMMEDIATE POSSESSION.
“to A for life, then to Ben’s children” - the Rule of Convenience closes this class (Ben’s children) at Ben’s death to avoid violating RAP.
What is the Doctrine of Worthier Title? Who owns the future interest here?
Prevents against remainders in Grantor’s heirs. Creates a presumption that the Grantor has a reversion.
“to A for life, then to my heirs” - The future interest is stricken, and Grantor retains a reversion interest.
What is the Rule in Shelley’s Case? What is the grantee receiving here?
Prevents against remainders in the grantee’s heirs. This uses the doctrine of merger to create a fee simple.
“to A for life, then to A’s heirs” - The interests are merged, and A receives a fee simple absolute.
RAP applies to what kind of interests?
Contingent remainders, executory interests, and vested remainders subject to open (if the class isn’t closed by the rule of convenience).
What is the Rule Against Perpetuities? What happens when an interest violates RAP? Is there an exception?
Must be certain that an interest will vest (or not vest) within 21 years (plus 9 months gestation) of a life in being.
If an interest violates RAP, the transfer is still valid, but the violating interest is stricken from the transfer.
Two Exceptions:
1) Transfer of a specific dollar amount to each class member
2) Transfer to a subclass that vests at a specific time (ex: “to the children of B, and upon the death of each, to that child’s issue.”
What happens when RAP makes an interest owned by a class member void?
If the gift is bad as to one, then the gift is bad as to all. The entire gift is invalid.
Remember that the Rule of Convenience can save the day!
What two common exceptions to RAP?
1) RAP does not apply to a gift from one charity to another charity (note that both parties have to be charities).
2) RAP does not apply to an option held be a current tenant to purchase a fee interest in a leasehold property.
What is the “wait and see approach?”
Courts will wait and see if an interest violates RAP within the perpetuities period.
T/F - A lease creates both a contract interest and a property interest. Thus, a landlord-tenant relationship is a mix of contract law and property law.
True.
What are the four types of estates that can govern a landlord-tenant relationship? How is each created, and how is each terminated?
1) Tenancy (Term) for Years - Created by agreement demonstrating intent to create a tenancy to last for a fixed and ascertainable amount of time. MUST BE IN WRITING IF FOR MORE THAN ONE YEAR (SoF). Terminates automatically upon the expiration of the term (no notice required). Also terminates if the tenant surrenders the lease or either party commits a material breach (failure to pay rent).
2) Periodic Tenancy - This is an estate that is REPETETIVE and ONGOING for a set period of time (month to month / week to week). Created by either express or implied intent (writing / payment of rent). Terminates after notice has been given BEFORE the last term. Terminates at the end of the last term.
3) Tenancy at Will - Can be created by either implication or an express agreement. Either party can terminate for any reason at any time without notice. If the agreement only gives Landlord the right to terminate at will, then the tenant also gets the right. If only given to the Tenant, Landlord is NOT given the right. If either party dies, the lease is terminated.
4) Tenancy at Sufferance - Created when a tenant holds over after the lease has ended. This is created by action instead of agreement. Termination occurs in one of three ways: 1) tenant voluntarily leaves; 2) landlord evicts the tenant; or 3) landlord re-rents to the tenant. The tenancy at sufferance is governed by the terms of the prior-existing lease.
A tenant has basic duties. What are they? Can either be suspended? If so, why?
A tenant has two basic duties:
1) Pay Rent, and
2) Avoid Waste
The duty to pay rent can be suspended (1) if premises are destroyed (NOT by fault of the tenant); (2) if the landlord completely or partially evicts the tenant; or (3) if the landlord materially breaches the lease.
Can withhold payment of rent if Implied Covenant of Quiet Enjoyment OR the Implied Warranty of habitability is breached.
Under the Implied Covenant of Quiet Enjoyment, when can a tenant withhold payment of rent?
ICQE - Tenant can withhold rent when the landlord takes actions that make the premises wholly or substantially UNSUITABLE for their intended purposes such that the tenant is CONSTRUCTIVELY EVICTED.
Constructive Eviction has four elements:
1) Premises are unusable for their intended purpose (breach of ICQE);
2) Tenant NOTIFIES the landlord of the problem;
3) Landlord does not correct the problem, AND
4) Tenant VACATES the premises AFTER a REASONABLE amount of time has passed.
Be on the lookout on the Bar Exam for tenants vacating too early under a breach of ICQE.
Under the Implied Warranty of Habitability, when can a tenant withhold payment of rent? Does this apply to commercial tenants too? Can this be waived?
The IWH only applies to residential tenants ONLY. When the Landlord has failed to maintain the property such that the tenant’s health and safety are violated, the tenant may:
1) Refuse to pay rent;
2) Remedy the defect and offset costs against the rent; OR
3) Use the evidence as a defense against eviction.
The IWH CANNOT BE WAIVED.
If a Tenant chooses to withhold rent, he must:
1) Notify the landlord of the problem; and
2) Give the Landlord a REASONABLE OPPORTUNITY to correct the problem.
NOTE: Unlike withholding rent under the Implied Covenant of Quiet Enjoyment, IWH does not require the tenant to vacate the premises.
T/F - The duty to avoid waste must be expressed in a lease.
False. The duty is implied.
What types of waste does a tenant have a duty not to commit?
Tenant has a duty to not commit affirmative (voluntary) waste or permissive (neglect) waste.
HOWEVER, a tenant may make changes to the property that increases the property’s value (ameliorative waste), but most Landlords usually require permission before a tenant can do so. This can be prohibited by a provision in the lease.
