Real Property Flashcards
Joint Tenancy
A joint tenancy exists when two or more individuals own property with the right of survivorship, meaning when one tenant dies the other tenant(s) receive their share of the property. Modern law calls for a clear expression of intent along with survivorship language. The joint tenancy must be created with each joint tenant having an equal right to possess the property, with each interest equal to the others, at the same time, and in the same instrument. These requirements are referred to as the four unities.
Joint Tenancy - Severance
Although an interest in a joint tenancy cannot be devised, joint tenants can convey all or part of their individual interests during their lifetimes to a third party, thereby severing the joint tenancy. Once a joint tenancy is transferred in this matter, the right of survivorship to that interest is destroyed and it is converted into a tenancy in common, meaning that each co-tenant has an undivided interest in the property and can possess the whole. A conveyance by only one of more than two joint tenants does not destroy the joint tenancy between the remaining joint tenants.
Valid Deed
To transfer a real property interest, the grantor must demonstrate the intent to make a present transfer of the interest and the grantee must accept the interest. In addition, pursuant to the Statute of Frauds, the transfer of a real property interest must be evidenced by a writing. Valid deeds abide by the Statute of Frauds and include all the necessary terms such as the grantor’s signature, named grantee, words of transfer, and a description of property. Consideration is not required.
Delivery and Recording of Deed
The grantor must, at the time of the transfer, intend to make a present transfer of a property interest to the grantee. Typically, this intent is manifested by delivery of the deed. Delivery may be completed by physically handing or mailing the deed to the grantee or the grantee’s agent. Recording a deed is not required, but can be used to create a presumption of delivery. Intent can also be implied from the words and conduct of the grantor, such as when the grantor drafts and records a deed.
Co-tenancy - Rent and Profits
If there is no agreement to the contrary, each co-tenant has the right to possess the whole property and is not required to pay rent to the other co-tenants for the value of her own use of the property, even when the other co-tenants do not make use of the property. Similarly, a co-tenant is generally not required to share profits earned from the use of the property, such as from a business conducted on the property. However, a co-tenant must account to other co-tenants for rent received from third parties. Third-party rents are divided up based on the ownership interest of each tenant.
Co-tenancy - Repairs
A co-tenant does not have a right to be reimbursed by other co-tenants for repairs made to the property, even when those repairs are necessary. That being said, the majority view is that contribution for necessary repairs can be compelled through an action for accounting or partition. In some jurisdictions, a co-tenant may maintain a separate action for contribution as long as the other co-tenants have been notified of the need for the repairs.
Periodic Tenancy
A periodic tenancy is a repetitive, ongoing estate measured by a set period of time (e.g., a month-to-month lease) but with no predetermined termination date. A periodic tenancy can be created by express agreement, implication (e.g., the failure of an express agreement to mention a termination date), or operation of law. A periodic tenancy automatically renews at the end of each period until one party gives a valid termination notice. The Statute of Frauds does not apply to a periodic tenancy because its nature is that it is for a non-fixed term.
Periodic Tenancy - Termination
Since a periodic tenancy automatically renews, written notice is required to terminate. Notice of termination must be given before the beginning of the intended last period of the periodic tenancy. A notice of termination is generally effective only as of the last day of the period (e.g., the end of the month for a month-to-month tenancy that began on the first day of the month).
Tenancy - Duty to Pay Rent/Abandonment
A tenant has a duty to pay rent. If the tenant fails to pay rent, then the landlord can sue both for damages and to remove the tenant from the property. An agreement to pay rent on or by a certain date is a material term of a lease and, thus, late payment of rent is considered a material breach of the lease. Thus, a landlord may bring an action for damages. At common law, if the tenant unjustifiably abandoned the leasehold, then the landlord could treat the abandonment as an offer of surrender and could accept by retaking the premises. Alternatively, the landlord may re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency.
Tenancy - Implied Warranty of Habitability
There is an implied warranty of habitability to most residential leases, particularly when the dwelling is multi-family. The landlord must maintain the property such that it is reasonably suited for residential use. The landlord’s failure to comply with applicable housing code requirements constitutes a breach of this warranty, particularly with regard to violations that substantially threaten the tenant’s health and safety. This warranty generally cannot be waived by the tenant, either by express language in the lease or by taking possession of the property with knowledge of the conditions. If the premises are not habitable, then the tenant may choose to (i) refuse to pay rent, (ii) remedy the defect and offset the cost against the rent, or (iii) defend against eviction. Generally, before the tenant can withhold the rent or remedy the defect, she must first notify the landlord of the problem and give him a reasonable opportunity to correct the problem.
Tenancy - Constructive Eviction
If the landlord substantially interferes with the tenant’s use and enjoyment of the leasehold by breaching a duty to the tenant (e.g., fails to provide heat or water), then the tenant’s obligation to pay rent is excused due to constructive eviction only if the tenant gives notice and vacates the property within a reasonable amount of time.
Tenancy - Implied Warranty of Quiet Enjoyment
Every lease (both commercial and residential) contains an implied covenant of quiet enjoyment, which is breached when the landlord disrupts the possession of the tenant. Any actions by the landlord that breach this covenant amount to an actual or constructive eviction of the tenant.
Tenancy - Breach of Covenants
The landlord/tenant relationship is generally governed by a contract, called the “lease,” and contains the covenants of the parties. The promises are generally independent of each other. In other words, each party must perform his promises regardless of whether or not the other party performs his promise.
Tenancy - Failure to Mitigate
The majority rule today requires a landlord to mitigate damages by making an effort to re-rent the premises. When a leasehold is abandoned, the landlord can re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency.
Mortgage - Title Theory
The minority of states are title theory jurisdictions. In a title theory jurisdiction, the mortgage severs the title and the tenancy between the joint tenants and creditor is converted into a tenant in common. The mortgagee becomes the equitable owner of the undivided portion that legally belongs to the mortgagor.
Mortgage - Lien Theory
The majority of states are lien theory jurisdictions. In a lien theory jurisdiction the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale.
