real property

Question 1

Freehold estate
Fee Simple Absolute (potentially last forever)

FSA must be fully __ which means there are no direct restraints on transfer of ownership of FSA

___ may be imposed on the excerise of a fee simple

rights of __ are valid form of restraint on alienation

creation- common law v majority change

Answer 1

alienable

conditions

rights of first refusal

common law: “to A and her heirs”
majority: “to A” presume a fee simple unless clear intent not to

Question 2

Fee tail- almost all states have eliminated or changed it

Answer 2

today language presumed to create a fee simple “to A and his bodily heirs”

Question 3

life estate- may be granted _ or may arise by _. ONLY MEASURE by __ NOT TIME

life estate put autre vie

life estates and restraints on alienation-

Answer 3

expressly or implication

LIFE

a life estate measured by the life of another- if life tenant dies before measuring life then estates passes to deceased’s estate until measuring life dies

allows a provision that terminates the life estate IF the life tenant attempts to convey away the life estate

Question 4

WASTE- life tenant maintains the estate

voluntary waste

permissive waste

ameliorative waste

Answer 4

any affirmative action beyond the right of maintenance that causes harm to the premises. Depletion of natural resources unless constitutes normal use of the land (open mines doctrine)

involves the failure to maintain. life tenant has obligation to make ordinary repairs but not replacements and is limited to the amount of rents and profits received from the land (if none, limited to reasonable rental value of land if the life tenant is using the land, if not then no repair obligation); taxes- must pay all taxes on the property and subject to same repair limitations (future interest holder has to make sure taxes are paid or else tax sale will eliminate the future interest and the buyer takes property free and clear of the future interest); mortgage debt- must pay interest on any mortgage indebtedness but not required to make principal payments the future interest holder pays principal payments (same limitations as repair); insurance- life tenant doesn’t have to have insurance but has an insurable interest

occurs when the life tenant alters the property substantially but actually increases the value of the land. if changed conditions have made the property relatively worthless then life tenant can alter w/o liability

Question 5

seisin

3 future interests in the grantor:

reversion

possibility of reverter

right of re-entry

transferability of future interests in the Grantor

Answer 5

holder of seisin is the taxpayer; NO GAPS in SEISIN

arises whenever the grantor conveys away less than the full durational estate that he has

FSD, grantor automatically has possibility of reverter; FSD ends automatically on the occurrence of the stated event (so long as, while, during, until)

title doesn’t go back automatically when the condition is broken; whenever FSCS grantor keeps right of reentry (provided however; but if; on condition that) followed by express language to reenter

all future interests of grantor are vested and not subject to rules against perpetuities; all freely transferable at death and intervivos (except no intervivos for right of re entry)

Question 6

2 future interests in grantee

remainders

• class gifts and vested remainders subject to open
• time for vesting of class gifts (rule of convenience)

executory interests

the defeasible fees are

future interests and the law of waste

Answer 6

remainders come naturally and immediately on the termination of the preceding estate, never affect the preceding estate

vested: nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate
contingent: a condition (such as survivorship clause) that the Grantee must satisfy before his interest will become possessory

a class gift is a gift to a group of unnamed persons who answer the class description. aka vested remainder subject to partial divestment

class closes for a class gift whenever any class member is entitled to distribution, members who predecease the testator are eliminated and gift lapses unless they were in gestation at time of testator’s death

operates to cut short the estate that comes before it. vested remainder subject to an executory interest is aka vested remainder subject to complete divestment or vested remainder subject to an executory limitation

FSD, FSCS, and FS subject to executory interest

holders of executory interests don’t have standing to sue for waste but remainders do

Question 7

rule against perpetuities

always applies to -(3)

perpetituties savings clause

rights of first refusal

charity to charity exception

class gifts

• age contingency beyond 21 in an open class
• fertile octogenarian rule

Answer 7

no interest will be valid unless it must vest if it is going to vest at all within 21 yrs after the death of some life in being who was alive at the moment of the conveyance was made
Will- testator’s death, Deed- the time deed takes effect

executory interests, contingent remainders, vested remainders subject to open

language is included to save a grant from violating the rule by making sure the vesting must occur within the time period

can violate the rule if they could possibly become exercisable outside the time period

both transferees must be charities

language used in the grant puts the age contingency beyond 21 the conveyance loses its link to a life in being

grantor might have another child regardless of age or medical condition. Bad as to one bad as to all

Question 8

concurrent estates in land

joint tenancy: four unities must be present at the outset to create (TTIP)

the language of the conveyance must clearly reflect the grantor’s intent to create a joint tenancy - if unclear then presume tenancy in common - key language

joint survivorship

terminating joint tenancy

• partioning
• severance (sale, mortgage, contract of sale,, creditor;s sale of interest in joint tenancy)

WILL NEVER TERMINATES joint tenancy

Answer 8

time: must have vested at same time; title; must be made by same instrument; interest- same kind and same amount of interest; possession- have the same identical rights of possession

“as joint tenant with right of survivorship” or “in joint tenancy with right of survivorship”

surviving joint tenants take automatically on the death of a joint tenant

relieved of common ownership and owns his portion outright

sale- conveyance of the interest by deed
mortgage- majority: lien theory no severance minority: title theory= severance
contract of sale- severance on date K was signed
creditor’s sale- NO severance until judicial sale actually takes place

Question 9

tenancy in common

tenancy by the entirety

termination of tenancy by entirety

incidents of co-ownership

• possession
• accountability
• contribution

Answer 9

no unities required except unity of possession, which means each co-tenant is entitled to possess the whole of the property ; freely alienable; can force partition; NO Right of survivorship

four unities plus marriage; right of survivorship but no right to partition

death; mutual agreement in writing; divorce; execution by a joint creditor

possession- each has right to possess the whole of the property consistent w/ the same right in every other co-tenant

accountability- general rule don’t have to account to another for his share of the profits- except if: ouster- kept tenant off the property or claiming right of exclusive possession; agreement to share; lease of the property by a co-tenant to third party; depletion of natural resources

right to force the other to pay their fair share of some expenditure made on the property
improvements- no current right of contribution; may be recouped later during sale
repairs- contribution required for NECESSARY repairs
pay mortgage- contribution required for those that have signed
taxes- contribution is required towards all governmentally imposed obligations

Question 10

non-freehold estates 4 landlord tenant estates

estate/ tenancy for years

periodic tenancy and termination

tenancy at will

tenancy at sufferance- holdover tenant

raised rent- if LL gives notice of increase BEFORE the expiration of the lease, LL may demand payment of higher rent if tenant holds over

Answer 10

key phrase is specified time; must have definite start date and end sate; in writing if over 1 year, 1 year then oral; no notice required to terminate

key word is repeating; created expressly or implication if no specific end date; by operation of law- oral lease violate statute of frauds but LL accepts checks and holdover tenant
termination- either party has to give proper notice (enough time 1 yr- 6 mo notice and effective date- must be at the end of the period of tenancy)

either party can terminate at any time giving the other notice of termination and a reasonable time to vacate the premises
can be terminated by law: death of either party, waste by T, assignment by T, transfer of title by LL, lease by LL to third party

arises in only one situation, refers to the bare possession that a tenant has of the property when that tenant wrongfully holds over.
LL can: sue to evict, impose a new periodic tenancy (residential month to month; commercial year to year)

Question 11

duties of tenant

pay rent

maintain premises-lease is silent or includes covenant to repair

LL remedies

Answer 11

maintain premises-
silent: still subject to waste
covenant- liable for everything including ordinary wear and tear unless parties agreement expressly excludes this

fail to pay rent- LL sue for damages and terminate the lease
tenant unjustifiably abandons-
LL can treat abandonment as surrender and terminates the lease; T no further rent obligation
LL can relet premises and hold T liable for any deficiency

Question 12

duties of LL

deliver possess of the leased premises

condition of leased premise

• common law
• modern rule
• T remedies

implied covenant of quiet enjoyment

Answer 12

must deliver when lease begins, if LL does deliver actual possession, LL is in total breach

common- no duty to deliver premises in habitable condition
modern- implied warranty of fitness or habitability in residential properties
remedies- move out and end lease; stay and sue for damages

included in EVERY LEASE; LL breaches if:
total eviction
partial eviction- LL physically excludes T from only some portion of the leased property (T can stay for free), if third party excludes then reduce T’s rent
constructive eviction- LL fails to provide some service that he is obligate to provide and premise is uninhabitable
4 reqs: must be LL’s failure; substantial interference with T’s quiet enjoyment of property; give LL notice and reasonable time to repair; T abandons within reasonable time

Question 13

assignments and subleases

definitions

privity of contract and privity of estate

assignment: liability of successive assignees for payment of rent
assignment: assignee’s liability on other lease covenants

liability of successive landlords on the lease obligations

sublease

nonassignment clause

Answer 13

assignments- transfers all
sublease- transfer part

privity of contract- a lease is contract btw parties
privity of estate- conveyance of an estate, an interest in land

T is liable to the LL for rent if either privity of contract or estate - so prior T and present T liable

covenant will run with land if it touches and concerns the land (makes the land more valuable or more useful) then enforceable against the successive assignees based on privity of estate; enforceable also through privity of K

original LL liable b/c of privity of K; successive LL liable if either privity of K or privity of estate and the lease obligation runs with the land

LL can recover rent from either new or old T; but old T liable for lease covenants b/c no privity of K or estate with new T

valid and fully enforceable. once waived then waived permanently

Question 14

condemnation - when state takes the property under a lease through eminent domain

partial- rent; T’s share of condemnation award

complete- rent; T’s share of condemnation award

Answer 14

T still has to pay rent; get an amount equal to the rent that was to be paid over the remainder of the lease for that portion of the property that was condemned

extinguishes the lease and don’t have to pay rent; will share in award only to the extent that fair rental value exceeds the amount of rent due under the lease

Question 15

tort liability of LL and T

general rule- no LL duty for injuries sustained on the premises during the period of the lease

5 exceptions
Latent defects
short term lease of a furnished dwelling
common areas under LL control
negligent repairs undertaken by LL

public use exception

T’s tort liability

Answer 15

LL has duty to disclose latent defects that he either knows or has reason to know

3 months or less; rental of furnished dwelling makes LL liable for defects even ones he doesn’t know or doesn’t have reason to know

LL liable for injuries if he failed to exercise reasonable care

voluntarily undertaking to make the earlier repairs as creating the deceptive appearance of safety

3 reqs: LL must know or should know of major defects; LL must know T will not fix the defect; LL must know the public will be using the premises

T is always liable to third party invitee for negligent failure to correct dangerous conditions

Question 16

fixtures

general rule: fixtures become part of the property and cannot be removed

personal property turns on intent; if no agreement the four factors are __

if not a fixture, when can the item be removed
tenant-
seller-

Answer 16

1. degree of attachment
2. general custom
3. degree of harm to premises on removal- can remove without substantial harm then generally not a fixture
4. trade fixtures (chattels or items of personal property used in a trade or business) are not fixtures and therefore can always be removed

T- must be removed before T vacates
S- must remove the item before closing or lose the chattel

Question 17

easement- non-possessory interest in land involving a right to use the land

appurtenant

in gross

creation:

• express
• implied
• by prescription

transfer of easement

• transfer of the benefit
• transfer of the servient estate- burden of easement

Answer 17

directly benefits the use and enjoyment of a specific parcel of land; servant estate and dominant estate

no dominant estate only one parcel of land that is burdened (i.e. utility easement)

express: must be in a writing by the holder of the servant estate and satisfy all the deed formalities (yr or less no writing)

implied: 2 situations
1. by previous use by a common grantor- previous use must have been APPARENT CONTINUOUS AND REASONABLY NECESSARY
2. absolute right of access rule- landlocked

prescription:
HOSTILE
CONTINUOUS AND UNINTERRUPTED (20 yrs)
VISIBLE AND NOTORIOUS or with owner’s knowledge

benefit-
appurtenant: transferred automatically along with the dominant estate (even if not mentioned in deed); cannot be transferred separately from dominant estate
in gross- if commercial then can always be transferred if personal then cannot

burden-
always binding on subsequent holder of servient estate (even if not mentioned) provided the subsequent holder had notice of the easement (actual, constructive or inquiry)

Question 18

scope of easement

repair of easement

termination of easement

• unity of ownership-
• deed of release
• abandonment
• termination by estoppel
• by prescription
• created by necessity

NO IMPLIED EASEMENTS FOR VIEW OR SUNLIGHT

Answer 18

presumed to be perpetual, used only to benefit the dominant estate if excessive use enjoin it but doesn’t terminate easement

dominant estate is responsible for making any necessary repairs to the easement; servient generally has no repair obligation

unity: merger; come together so easement terminated

to be a valid release must be in writing and comply all deed formalities

intent to abandon must be manifested by the dominant taking some physical action that would show intent. NON USE ISNT ENOUGH

a representation of relinquishment of the easement by dominant AND servient must make a change in his position in reliance on that representation

servient estate must stop the use of the easement and must keep it stopped for the period of time applicable (i.e. 20 yrs)

once the necessity ceases to exist the implied easement will automatically terminate

Question 19

licenses

irrevocable licenses

profits

Answer 19

a contract right involving a limited privilege to use land in the possession of the licensor (always revokable at will of licensor); tickets are licenses

2 rules:

1. if easement fails then a license is created
2. if money is spent on the property in furtherance of an oral license then that license becomes irrevocable and can be enforced

gives the right to go onto the land of another and take away a natural resource, includes implied easement to go onto the land to remove the natural resource

Question 20

restrictive covenants and equitable servitudes

restrictive covenant- gives the holder of the interest the right to restrict some third party in the use of his land

suing for damages then covenant at law
injunction= equitable servitude

4 requirement to enforce restrictive covenant

• intent
• notice
• touch and concern the land
• privity (bürden and benefit)

4 requirements to enforce the burden of a covenant at law: successor in interest is D and P must establish

3 requirements to enforce the benefit of a covenant at law: successor in interest is P and P must establish

equitable servitudes 3 req for injunction to enforce the burden of the promise

equitable servitudes 2 req for injunction to enforce the benefit of the promise

Answer 20

intent- must intend that restriction run with the land

notice- actual, constructive, inquiry

touch and concern= makes the land more valuable or more useful (i.e. covenant not to compete)

burden- successor in interest is D requires both:
vertical- successors must take the entire estate AND
horizontal- original parties to the promise, must be a conveyance of the property between the original parties

benefit- successor in interest is P- only vertical privity required

intent, notice, touch and concern, and horizontal and vertical privity

intent, touch and concern, vertical privity

intent, touch and concern and notice

intent and touch and concern

Question 21

enforcement of subdivision restrictions

requirements to establish a mutual right of enforcement

distinguish dedication from the law of covenants- for purposes of govt enforcement of use of restrictions

defenses to enforcement of covenant as an equitable servitude

• unclean hands
• acquisence
• laches
• estoppel

termination of covenants and servitudes (3 ways)

Answer 21

requirements:
intent to impose a servitude on ALL land in subdivision and NOTICE

unclean hands- P has made same use of her property

acquiescense- P let other neighboring landowners do the same thing on their lots

laches: P sat by while D built office building only to complain after completion
estoppel: P represented she had no problem with D’s proposed plan use of the land

deed of release
merger- unity of ownership
changed conditions- if all lots in the entire subdivision are affected the use restriction will be eliminated

Question 22

adverse possession 6 reqs:
H E L U V A

2 exceptions to requirement of actual possession

1. doctrine of constructive adverse possession
2. leased land

adverse possession against concurrent owners

adverse possession and future interests

• life tenant and remainder man
• FSD
• FSCS

tacking

disabilities- 3 I’s at the time the period of adverse possession begins, then the clock for adverse possession will not start to run until he is free of the disability

title acquired by adverse possession is not marketable to make it market must be court action to quiet title

Answer 22

hostile
exclusive
lasting (typically 20 yrs)
uninterrupted
visible (open and notorious)
actual: adverse possessor must actually possess the land to obtain title

1. expands the kernel of actual possession out to the full extent of the color of title under which the adverse possessor makes his claim of right to the property (must b unitary and must bear reasonable relation btw actually possessed and the whole)
2. leasing property constitutes possession

no adverse possession against co tenant unless he excludes the other and statutory period runs

• life tenant: clock doesn’t start until the interest becomes possessory
• FSD: the happening of the condition starts the clock running for purposes of adverse possession
• FSCS: clock doesn’t start until grantor exercises right of entry

can tack together SUCCESSIVE periods of adverse possession and can take SUCCESSIVE periods of true ownership

Infancy, incarceration and insanity

Question 23

conveyancing (contract & actual conveyance)

contract of sale and the escrow period:

• statute of frauds
• doctrine of part performance
• risk of loss
• death of party BEFORE close of escrow

marketable title

• 3 requirements to satisfy implied covenant
• if buyer determines title not marketable
• buyer remedies

time of performance

remedies for breach of K for sale of real property

defects on the property as of the date of closing

Answer 23

contract must be in writing and signed by the one who is sued. K must include: description of the property, names of the parties, and price

exception to SOF requires: oral K be clear and certain AND acts of partial performance must clearly prove up the existence of a K

risk of loss: buyer bears the loss

death: if either dies equity still orders specific performance. death doesn’t affect the rights of the parties as set out in the K

marketable title- every land sale K contains implied covenant that the seller will deliver marketable title to buyer at close of escrow

1. proof of title
2. title free of encumbrances
3. valid legal title as of date of closing

B must notify S of any defect in title and give S reasonable time to cure defect (even post pone day of closing)

remedies-

1. recission
2. damages
3. specific performance
   * if accepts deed without cure then no recourse*

K will specify the closing date, time is not of the essence in land sale K unless:
K says otherwise OR the facts make clear that the parties on time is in total breach and therefore cannot enforce the K

remedies:

1. damages measured generally by the difference btw the K price and the value of the property as of the date of breach (liquidation clause valid so long as amount is reasonable not to exceed 10% of K price)
2. specific performance- available for both B and S

defects-

• duty to disclose buyer serious defects in the property the seller knows of and which are not obvious to the buyer
• implied warrant of fitness for residential
• caveat emptor NO RECOVERY in all other situations

Question 24

deed formalities (once the deed has accepted at closing the K is extinguished)

2 requirements for deed to pass title

execution

delivery

conditional delivery

• delivery of future interest
• oral conditions
• delivery conditioned on grantee’s payment of purchase price

delivery must be accepted- acceptance will be implied and consideration is not required

Answer 24

execution:

• SOF must be satisfied
• deed must describe the land with sufficient accuracy in order to pass title. if cannot identify the property then deed is void for vagueness; parol evidence may be used; a land description by metes and bounds will control over description by acreage or another more general description

delivery: grantor intent to pass title; no physical transfer is required; if grantor dies and the deed is still in grantor’s possession there is a presumption of no delivery which may be rebutted by the grantee

future interest: valid if deed is transferred to A and reads “to A but not until I die”

oral- puerility rule says to ignore the condition and consider complete

payment of purchase price: generally valid

1. grantor makes delivery of deed to a third party in escrow;
2. grantor instructs esxcrow agent to deliver deed to grantee when condition is complete and
3. once the grantor delivers the deed to the escrow agent the grantor cannot get deed back

Question 25

covenants of title -any promises regarding title

quitclaim deeds

3 present covenants

3 future covenants

breach of a covenant of title

estoppel by deed doctrine

Answer 25

grantor makes no promises regarding title

present: if breached if at all is moment conveyance is made; personal to grantee and don’t run with the land - covenant of seisin and right to convey and covenant against encumbrances
future: not breached immediately and runs with the land - covenant of warranty and covenant of quiet enjoyment and covent of further assurances (mop-up covenant)

breach P’s damages will be limited to the amount of purchase price received by the warrantor plus incidental damages

estoppel- grantee can sue to compel the transfer of title from the grantor, yet subsequent sale to BFP will cut off the rights of an earlier grantee and such right to rely on estoppel

Question 26

conveyancing by will

ademption

exoneration

lapse and anti lapse statutes

Answer 26

ademption- will purports to devise a specific parcel of land but testator doesn’t own the land at time of her death the gift is adeemed, will not be replace by other property.

exoneration- devisee will take the property subject to the mortgage (no longer exonerated)

lapse- if beneficiary died before the testator the gift lapsed, but now anti lapse statute allow the gift to pass to certain relatives of the predeceasing beneficiary

Question 27

ownership of property interests in trust

rule

creation of trust

trustees

rule against perpetuities

charitable trusts

Answer 27

rule: express private trust in writing to transfer real property to a trustee

trust can be created inter vivos or by a will at death

trustee: hold legal title to real property must act in accordance with the settlor’s written instruction and subject to strict fiduciary duty and if trustee dies court can appoint a substitute

trust is subject to the rule

charitable; don’t have named individuals as beneficiary; cy pres

Question 28

recording

common law- first in time first in right

mechanics of recording

notice

race

race notice

BFP

transferee is heir donee or devisee then not BFP but can use shelter rule exception

recording statutes generally protect subsequent mortgagees not judgment creditors

Answer 28

mechanics: court clerk files a copy of the deed in a book and clerk will then index this info in grantor and grantee index

notice- sole inquiry is notice. BFP who takes without notice wins; “without notice” or “in good faith”

race- notice irrelevant whoever records first wins

race-notice: protects subsequent grantees who are BFP who takes without notice and records first “w/o notice” “in good faith” AND “recorded first” “first recorded”

BFP- purchase for value= any consideration that is out of pocket is enough to be considered value (includes bargain basement sale) & notice (actual, record or inquiry)

Question 29

security interests

mortgage

deed of trust

land sale K

mortgages and deed of trust

• debtor’s right of redemption
• foreclosure by public auction sale
• priorities on payment of multiple mortgages

foreclosure eliminates all junior interests NOT SENIOR INTERESTS

payment of the proceeds from a foreclosure sale

anti-deficiency statutes- allow creditor to sue debtor personally for the balance due on the note

land sale K- forfeiture clause (miss payment seller can cancel K, keep all the monies paid to date and retake the property ) is enforced but seller is limited to this remedy only

Answer 29

mortgage- given by debtor to the creditor, i.e. equitable mortgage and sale leaseback with option to repurchase

deed of trust given by debtor to a third party trustee who holds the deed until the loan is paid

land sale K -arrangement where debtor signs K promising to make payments to the seller/lender but the seller keeps title to the property until loan is paid in full

debtor’s right of redemption: can redeem property up until the moment of foreclosure

priorities: generally first in time first in right unless recording statute
change by K: a senior mortgage may agree to subordinate to a junior mortgage
ppm is taken out to buy the property and receives priority over other mortgages even if executed earlier
change in senior mortgage- mortgagor does anything to increase senior mortgage then senior mortgage loses its priority over junior mortgages but ONLY to the extent of the modification

payment:

• pay the costs of the foreclosure
• pay off the mortgage that was foreclosed on
• pay off junior interests- in order of priority
• pay any remaining balance to the borrower/mortgagor

Question 30

transfer of security interests in real property

mortgagor’s transfer of the property

mortgagee’s transfer of note

due on sale clause

security interest in fixtures

Answer 30

mortgagor transfer: grantee automatically takes the property subject to the mortgage, not personally liable unless grantee specifically assumed the mortgage

mortgagee transfer: he can freely transfer the note and the mortgage will always follow the note it secures

due on sale clauses says that if mortgagor transfers the property with mortgaee’s consent entire balance of the loan becomes immediately due and payable are enforceable

seller of a fixture who provides a purchase money security interest in the chattel must make a UCC article 9 fixture filing within 20 days after installment (then may remove fixture w/o regard to priority of earlier mortgage) if not then interest in chattel will be subordinate to earlier mortgage on the property

Question 31

rights of support

lateral suppor- support from the side

subjacent support- surface from the bottom

water rights

• rivers and lakes
• underground water
• surface water

Answer 31

lateral: strict liability; for improvements only strictly liable if the land would have collapsed anyway without weight of improvements
subjacent: strict liablility

rivers and lakes

• majority (Riparian rights): property borders a lake or stream may use all the water needed for domestic purposes and reasonable use for commercial or industrial use
• minority-priority in time determines all right; first to make beneficial use of water has that right protected against later people

underground water- landowner is entitled to make reasonable use of ground water and must use it on the property and NOT EXPORT

surface water: no majority rule

• natural flow: landowner required not to make any changes to flow of the flood water as it rushes across the surface of the land (use reasonable means to deal with surface water)
• common enemy: landowner can do anything he wants reasonable or not