real property Flashcards
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
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
Fee tail- almost all states have eliminated or changed it
today language presumed to create a fee simple “to A and his bodily heirs”
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-
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
WASTE- life tenant maintains the estate
voluntary waste
permissive waste
ameliorative waste
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
seisin
3 future interests in the grantor:
reversion
possibility of reverter
right of re-entry
transferability of future interests in the Grantor
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)
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
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
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
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
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
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
tenancy in common
tenancy by the entirety
termination of tenancy by entirety
incidents of co-ownership
- possession
- accountability
- contribution
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
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
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)
duties of tenant
pay rent
maintain premises-lease is silent or includes covenant to repair
LL remedies
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
duties of LL
deliver possess of the leased premises
condition of leased premise
- common law
- modern rule
- T remedies
implied covenant of quiet enjoyment
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
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
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
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
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
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
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
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-
- degree of attachment
- general custom
- degree of harm to premises on removal- can remove without substantial harm then generally not a fixture
- 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
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
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)
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
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
licenses
irrevocable licenses
profits
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:
- if easement fails then a license is created
- 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
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
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
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)
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
adverse possession 6 reqs:
H E L U V A
2 exceptions to requirement of actual possession
- doctrine of constructive adverse possession
- 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
hostile exclusive lasting (typically 20 yrs) uninterrupted visible (open and notorious) actual: adverse possessor must actually possess the land to obtain title
- 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)
- 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
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
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
- proof of title
- title free of encumbrances
- 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-
- recission
- damages
- 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:
- 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)
- 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
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
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
- grantor makes delivery of deed to a third party in escrow;
- grantor instructs esxcrow agent to deliver deed to grantee when condition is complete and
- once the grantor delivers the deed to the escrow agent the grantor cannot get deed back
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
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
conveyancing by will
ademption
exoneration
lapse and anti lapse statutes
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
ownership of property interests in trust
rule
creation of trust
trustees
rule against perpetuities
charitable trusts
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
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
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)
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
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
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
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
rights of support
lateral suppor- support from the side
subjacent support- surface from the bottom
water rights
- rivers and lakes
- underground water
- surface water
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
