Real Property Flashcards
Present Possessory Estate: Fee Simple Absolute
Infinite present possession
“To A and his heirs” “To A”
Grantor has no future interest
Present Possessory Estate: Fee Simple Determinable
Limited present possession, and AUTOMATICALLY reverts back to grantor upon specified event
“To A and his heirs, until…”
Grantor has possibility of reverter (REVERTER ONLY FOR FEE SIMPLE DETERMINABLES)
Present Possessory Estate: Fee Simple Subject to a Condition Subsequent
Limited present possession until the happening of a named event. However, it will NOT AUTOMATICALLY revert to grantor - grantor must take an additional step
“To A and his heird, but if…”
Grantor has right of entry (ONLY IF HE EXERCISES IT)
Executory interest
Possibility of reverter only in grantor, not a third party. But if grantor puts it in a third party then that third party has an executory itnerest.
“To A and his heirs for so long as liquor is not sold, in that event, to B.”
Third party is executor interest and can reenter on the stated event, grantor cannot.
Subject to RAP (whereas possibility of reverter is not)
Life Estate
Estate measured by the life of one or more persons
“To A for life” or “To A for the life of B”
Grantor has reversion
Subject to the same rules as fee simple determinable, condition subsequent, exec interest
Rights and duties of a life tenant
Entitled to
(1) ordinary uses and profits of the land
CANNOT:
(1) injure interests of remainderman or reversioner
Types of life tenant waste
Affirmative Waste - Natural Resources
Permissive Waste
Ameliorative Waste
Affirmative Waste
Can exploit natural resources if
(1) necessary for repair and maintenance
(2) land suitable for such use
(3) permitted by grantor
Permissive Waste
Obligated to
(1) preserve land and structures
(2) pay interest on mortgates (not principal)
(3) pay ordinary taxes
(4) pay special assessments
Ameliorative Waste
Change that benefits property economically - can do it if
(1) market value of the future interests is not diminished, AND EITHER
(1) remaindermen do not object, OR
(2) substantial change in neighborhood conditions has deprived property in its current form
Future interests
Possibility of FUTURE possession, but it is a present, legally protected right in property.
Whats a reversion?
estate ends and no one else entitled to it because there is no other future interest (ex. To A for life.), grantor has a reversion.
NEVER subject to Rules Against Perpetuates
Reversion is alienable, inheritable, devisable
What is a remainder?
It’s the third party who has the estate after a life estate. There can be no gaps between grantee and remainder.
Remainders CAN NEVER follow a fee simple since fee simples are indefinite, and remainders cannot cut short the preceding estate
Four types of remainders
(1) Vested remainder
(2) Vested remainder subject to open
(3) Vested remainder subject to total divestment
(4) Contingent remainder
vested remainder
It’s an existing person - has immediate possession upon normal termination of preceding estate
No RAP
Vested remainder subject to open
Remainder created in a class of persons (children)
Subject to RAP as long as class stays open
Vested remainder subject to total divestment
remainder subject to a condition SUBSEQUENT
“to A for life, then B, but if B never marries then to C”
If the action in the future happens then it goes to C so B has a remainder subject to total divestment
No RAP
Contingent remainder
Created in unborn or unascertained persons, OR, it’s a remainder subject to a condition PRESCEDENT
“To A for life, then to B IF he marries C.”
Subject to RAP
Two types of executory interests
Shifting exec interest - shifts from transferee to executor interest (cuts short prior estate)
Springing exec interest - follows a gap (goes to transferee, then back to owner, then to exec interest after a gap in time)
Class Gifts - Rule of convenience
Class will close once a member of the class can call for a distribution
Rule Against Perpetuities
No interest in property valid unless it vests within 21 years after some life in being. Only effects violating circumstance - rest is OK
When does RAP period begin?
Will: Testator’s death
Irrevocable Trust: date it is created
Revocable Trust: date it becomes irrevocable
Rule Against Restraints on Alienation
Cannot restrain transferability of legal interest in property
Joint Tenancy
Each tenant has an undivided interest in the whole estate, and the surviving co-tenant has a right to the whole estate (right of survivorship).
Must have and take interest as to the same (EVERYTHING MUST BE EQUAL!)
(1) time
(2) title
(3) interest
(4) possession
How do you terminate a joint tenancy?
(1) Severance - convereted to tenancy in common (unless more than three - then only terminated as to that conveyor)
(2) conveyance by one joint tenant
(3) death of co-tenant
(4) voluntary/involuntary partition
Tenancy by the Entirety
Husband and wife each has an undivided interest in the whole estate and a right of survivorship.
How do you terminate a tenancy by the entirety?
(1) Death
(2) divorce
(3) mutual agreement
(4) joint creditor
NO involuntary partition
Tenancy in Common
Each tenant has a distinct, proportionate, undivided interest in the property - NO RIGHT OF SURVIVORSHIP
How do you terminate a tenancy in common?
Partition
Rights and duties of cotenants
(1) possession
(2) No need to share profits of own making unless agreement otherwise. MUST share profits if rents from third parties or exploitations of land/mining.
(3) Not encumber other’s interest (mortgate example - mortgage only applies to your interest, not others)
(4) Partition
Transactions that won’t destroy joint tenancy
(1) mortgage
(2) Judgment liens
(3) Leases - although states are split
Cotenants responsibilities with expenses
(1) Repairs - can be reimbursed for NECESSARY reparis
(2) Improvements - no right of contribution
(3) Taxes and mortgages - if paid on entire property UNLESS co-tenant in sole possession, then only entitled to expenses that exceed rental value of her use
Tenancy for Years
Tenant has present possessory interest and landlord has a future interest (reversion)
Ends automatically at termination date (or surrender, failure to pay rent)
Periodic Tenancy
Tenancy continues for successive periods. Created by
(1) express agreement (agree month to month)
(2) implication (Lease only payable monthly - silent on time frame)
(3) Operation of law (tenancy in years ends and tenat keeps leasing)
AUTOMATICALLY RENEWS until notice
Tenancy at Will
Termiable at will of either landlord/tenant - must be created by written agreement. Give notice and reasonable time to quit
Tenancy in Sufferance
Tenant WRONGFULLY remains in possession - tenant can stay until landlord evicts tenant
Hold Over Doctrine
If tenant continues in possession after his right has ended, landlord may:
(1) Evict
(2) Bind to new periodic tenancy
(3) If commercial - hold to year to year if previous lease was year or more
(4) If residential - month to month
DOESN’T APPLY IF (1) seasonal lease, (2) severe illness, (3) hold for only a few more hours, (4) landlord gives notice that he doesn’t want it to continue
What can landlord do if tenant on premises and fails to pay rent
Evict or sue for rent
What can landlord do if tenant abandons?
Do nothing or repossess
Landlord dutes to tenant
(1) Deliver premises on starting of lease
(2) Quiet enjoyment
Partial Eviction by landlord
Tenant released from paying rent, even if tenant continues in possession of the remainder
Partial Eviction by third person
Tenant liable for the reasonable rental value of the portion she possess
Constructive Eviction
Landlord’s breach of duty renders premises unsuitable for occupancy, tenant must prove
(1) landlord breached duty
(2) breach material to tenant’s enjoyment
(3) Tenant gave landlord notice and time to repair
(4) Tenant vacated premises
Implied Warranty of Habitability
ONLY RESIDENTIAL TENANTS - NONWAIVABLE - landlord duties tied to local housing codes. At breach tenant may:
(1) Terminate lease
(2) Make repairs and offset cost against future rent
(3) Abate the rent
(4) remain in possession, pay full rent, sue for damages
Can a tenant freely transfer leasehold interest?
YES - unless express restriction
Complete transfer is an assignment
If tenant retains any part then it’s a sublease
Consequences of lease assignment
Assignee and landlord are in “privity of estate” - each responsible for all convents that run with the land (touches and concerns)
How does assignment impact rent payments between transferor and assignee?
Assignee owes rent directly to landlord
Transferor no longer in privity of estate with landlord
Transferor remains obligated on original contractual obligation to pay rent (privity of contract)
How does subless impact rent payments between original lessee and sublessee?
Sub pays original lessee rent, who pays to landlord
Sub not personally liable to landlord
Sub cannot enforce main agreement (except warranties of habitability)
Does assignment or sublease make lease void?
NO, but landlord may terminate lease or sue
Condemnation of leases
If entire lease taken - rent extinguished and lessee is entitled to compensation
If partial lease is taken - not discharged from rent but lessee is entitled to compensation for the taking
Landlord’s tort obligation
Modern trend is will be held liable for injuries resulting from ordinary negligence if he had notice of a defect and an opportunity to inspect it
Fixture
chattel that is affixed to land and has ceased being personal property but is now part of the real property
How to determine whether an item is a fixture
Look at
(1) nature of the article
(2) manner of attachment
(3) amount of damage it would cause removing it
Are annexed chattels from lessee fixtures?
NO, unless agreement existed. Annexed chattels must be removed by end of lease term
What are the nonpossessory interests in land?
Easements
Profits
Covenants
Servitudes
Easement
Right to use another’s land for a special purpose - assumed to be of PERPETUAL duration unless stated otherwise
Easement Appurtenant
Benefits holder in his physical use or enjoyment of another tract of land. There must be a dominant tenement and the servient tenement.
Passes with BENEFITED land REGARDLESS IF IN DEED, unless bona fide purchase of servient estate had no notice of easement
Easement in Gross
Acquire right to use servient tenement independent of possession of another tract of land (ex. swim in my pool)Not transferrable unless commercial
Ways to create an easement
Express grant or reservation (writing)
Implication (no writing)
Prescription (no writing)
Easement by Express Grant of Easement requirement (writing required unless under one year)
(1) Writing (unless its under one year)
(2) signed by grantor
(3) identifies parties
(4) identifies land
Easement by Express Reservation (writing required)
Grantor conveys title of land to someone else but reserves the right to continue to use the tract for a special purpose. GRANTOR CANNOT RESERVE IT FOR ANYONE BUT HIMSELF!
Easement by Implication (no writing required)
Created by operation of law and an exception to statute of frauds
(1) Easement implied from existing use
(2) Easement implied without any existing use
(3) Easement by necessity
Easement implied from existing use (no writing required)
(1) Prior to division of tract
(2) Apparent and continuous use exists on the “servient” part
(3) Reasonably necessary for enjoyment of “dominant” part
(4) Parties intended the use to continue after division of land
Easement implied without any existing use (no writing required)
Subdivision plat - buyers have implied easements to use the streets to access their lots IF THERE WAS A RECORDED PLAT OR MAP REFERENCED AT SALE
Easement by Necessity (no writing required)
Sale deprives another of utility or access
Easement by Prescription (no writing required)
Adverse possession, must show
(1) open and notorious
(2) Adverse
(3) Continuous and uninterrupted
(4) Statutory period
Misuse of easement
DOES NOT TERMINATE easement - get an injunction
Split costs except if only one party using the easement
How to terminate an easement
(1) Stated conditions satisfied
(2) Merger (same person gets servient and dominant)
(3) Release
(4) Abandoned (WITH INTENTION TO ABANDON - NOT MERELY NONUSE)
(5) Estoppel
(6) Prescription
(7) Necessity ends
(8) Condemnation/destruction
Easement vs. License
Failed easement results in a license. Licenses are revocable at will by licensor Cannot transfer
When does a license break the general rule that they are revocable and become irrevocable?
(1) Estoppel
(2) License coupled with an interest
Profits definition
Right to take resources from another’s land. All easement rules govern. Can also be extinguished by surcharge (misuse that burden servient estate). WRITING REQUIRED
Covenant
A WRITTEN promise to do something on land or promise not to do something on the land. Usually in the deeds and run with the lands if requirements met. WRITING IS ALWAYS REQUIRED.
When will a covenant run with the burdened estate?
(1) intent to be bound
(2) notice of covenant
(3) Horizontal privity (original parties shared interest together)
(4) Vertical privity
(5) Touch and concern the land
When will a covenant run with the benefited estate?
(1) Intent
(2) Vertical privity
(3) touches and concerns land
Termination of Covenant
(1) Release
(2) Merger
(3) Condemnation of burdened property
Equitable Servitude
A type of covenant that runs with the land, and equity will enforce against assigness who have notice of the covenant.
Difference between equitable servitude and covenant?
Look at remedy sought
Money damages - Real covenant
Injunction - equitable servitude
REquirements for equitable servitude burden to run (successor of promisor)
(1) Intended
(2) notice
(3) touches and concerns
Requirements for equitable servitude benefit to run (successor of promisee)
(1) Intended
(2) Touches and concerns
Adverse possession elements
Possessor must show
(1) actual entry
(2) exclusive possession
(3) open and notorious
(4) adverse
(5) Continuous
Disability for Adverse possession purposes
SOL does not begin to run if true owner was under some disability when the cause of action first accrued
Conveying Land Elements - Land Sale Contract Requirements
Contract must state
(1) Parties
(2) Price
(3) Description of Land
(4) Must have marketable title
What happens after a contract for sale of land is signed?
(1) Buyer regarded as owner of real property
(2) Seller interest considered personal property
(3) Title remains with seller in trust for buyer
Risk of loss of property - who bears?
Before closing - buyer (but seller must credit insurance proceeds he receives)
What is a seller or buyer dies before closing?
Seller dies - legal title passes to his heirs and give up to buyer at closing
buyer dies - heirs can demand conveyance of land at closing
Marketable title definition (implied covenant of marketability)
Doesn’t mean perfect title - just enough that there is not an unreasonable risk of litigation
This theory only exists before closing - after closing remedy is against express promises in deed
What makes a title unmarketable?
(1) Defects in record chain
(2) Encumberances (but if seller can satisfy mortgage or lien at closing then it isn’t unmarketable)
(3) Violation of zoning ordinance
REMEMBER: Seller has till time of closing to make title marketable
Is time of the essence in contract sales of property?
NO, unless stated in contract, parties intent, or notice that time is of the essence
Remedies for breach of sale of land
(1) Damages (Contract price - market value + incidentials)
(2) And if land is unique - specific performance
Seller liable for what in a contract sale of land
(1) fraud
(2) active concealment
(3) failure to disclose (knows or has reason to know and not apparent and defect is serious)
But specific disclaimers allowed, general disclaimers are not
Deed formalities
Transfers title to an interest in real property.
(1) writing
(2) signed by grantor
(3) reasonably identifies parties and land
(4) delivered (intention to make deed presently effective)
(5) accepted
Defective deeds
Void - fraud, forged, never delivered
Voidable - minors, incapacitated persons
Desription of Land in deeds
If land description too indefinite, grantor retains title but court may step in and reform. Rules of construction apply in following order:
(1) natural monuments
(2) artificial monuments
(3) courses
(4) distances
(5) name
(6) quantity
Boundary case issues with land rights
(1) Title to land goes to center of water boundary
(2) Slow and imperceptible change changes legal boundary
(3) Accretion (slow deposit of soil) belongs to owner
(4) Avulsion (sudden change in water course) does not change ownership rights
When will court always reform a deed?
(1) mutual mistake
(2) Scrivener’s error
(3) unilateral mistake caused by mispresentation
Transfer of deed
Grantor must intend to make a deed presently effective even if possession is postponed
Trasnfer of deed for commercial transaction (escrow)
Valid conditional delivery when grantor gives it to third party to hold until condition occurs.
Covenants for title (title assurances) - three types
(1) general warranty deed
(2) special warranty deed
(3) quitclaim deed
Covenants for title vs. Real covenants
Totally different - real covenants are written promises to do or not do something, they have nothing to do with title.
What are the covenants in a general warranty deed?
(1) Seisin (grantor has title and possession at time of grant)
(2) Right to convey (title alone satisifies this)
(3) No encumberances
(4) Quiet enjoyment
(5) Warranty (grantor will defend against superior claims)
(6) Further assurances (grantor will perfect title conveyed)
Special warranty deed assurances
(1) grantor has not conveyed to anyone else
(2) estate is free of encumbrances
Quitclaim deed
Releases whatever interest grantor has - no covenants of title are included
Recording Rule
If grantor conveyed same proprety to more than one person, first to record prevails, except depending on the jurisdiction you’re in
(1) Notice
(2) Race Notice
Notice Jurisdiction
Subsequent BFP prevails over prior grantee who failed to record. Subsequent BFP can have no constructive or actual notice of prior sale at time of conveyance.
REMEMBER - protected regardless of whether subsequent BFP records or not.
“Any conveyance of an interest in land, shall not be valid against any subsequent purchase of value, without notice, unless the conveyance is recorded.”
Race Notice Jurisdiction
Subsequent BFP protected only if she takes without notice AND records before prior grantee
Race Jurisdiction
Whoever records first wins - notice is irrelevant
Who do notice and race notice jurisdictions apply to?
BFPs - purchaser, without notice, pays valuable consideration
Without notice only applies at the time of conveyance - doesn’t matter what they learned after conveyance but before recording
Mortgage
Lender can realize mortgaged real estate by having a judicial foreclosure sale conducted by the sheriff
Deed of Trust
Debtor is trustor and gives deed to a third party trustee. Third party trustee closely connected with lender/beneficiary
Installment land contract
Purchaser obtains legal title only when full contract price paid off
Therefore, only receives interest in estate to the extent that they paid value if they are not sheltered by BFP rule.. Court can divide up many ways.
Can mortgagee transfer mortgage?
YES - note and mortgage must pass to same person. Note can transfer without the mortgage but mortgage follows automatically UNLESS mortgagee-transferor reserves right to mortgage.
Elements to transfer a mortgage by mortgagee and make transferee a HOLDER IN DUE COURSE
(1) Must be in negotiable form
(2) original note indorsed and signed by named payee
(3) delivered to transferee
(4) transferee takes in good faith AND pay value
Benefits of holder in due course
Takes note free of personal defenses (fraud, waiver, payment) of maker, but still subject to real defenses (infancy, incapacity, duress)
Transfer by Mortgagor
If assumption agreement signed: grantee becomes primarily liable and original mortgagor secondarily liable as surety (original mortgagor released if grantee
If NO assumption agreement signed OR transferee takes “subject to” the mortgage: grantee not personally liable and original mortgagor remains primarily liable.
Any modification after grantee takes mortgage releases original mortgagor of liability.
How does mortgagee take possession if mortgagor fails to pay?
Lien theory - mortgagee considered holder of a security interest only and therefore cannot have possession until after foreclosure
Title theory - legal title in mortgagee and can take possession at any time
Intermediate theory - legal title in mortgagor until default, and then in mortgagee. mortgagee may demand possession when default occurs (little difference between title and intermeidate theory)
Redemption before foreclosure
Anytime before foreclosure, mortgagor may redeem the property by paying the amount due. Some states allow for statutory redemption (6 months after foreclosure sale has occured)
Purchase Money Mortgage
Mortgage given in exchange for funds used to purchase the property.
PMMs have priority over mortgages, liens, and other claims that arise PRIOR to mortgagor’s acquisition of title
Priority of interests during foreclosure
Priority among mortgages generally determined by chronological order due to recording requirements, but it can be changed if
(1) failing to record
(2) subordination agreements
(3) PMM
(4) modification of senior mortgage
(5) Subrogation
(3) Two PMMs - Seller’s mortgage has priority over third party’s mortgage
Proceeds of sale - priority of who gets funds
(1) expenses of sale, atty’s fees, court costs
(2) principal and accrued interest on foreclosed loan
(3) junior interests in order of priority
(4) mortgagor
Water courses - Riparian Doctrine - Reasonable Use Theory
Water belongs to those who own the land bordering the watercourse
Follows reasonable use doctrine - riparians share the right of reasonable use. Look at alteration of flow, pollution, purpose of use, extent of use, destination of water taken to determine if unreasonable
Riparian Doctrine - Natural vs. artifical use theory
Natural uses prevail over artifical uses
Riparian Doctrine - Prior Appropriation Doctrine
Individuals acquire rights by actual use
Groundwater doctrines
Absolute ownership - can take all the water you want
Reasonable Use - like absolute, but exporting cannot harm other owners who have same rights
Appropriative rights - Priority of use (not ownership) is determinative
Restatement Approach - can pump unless it harms neighbors or exceeds share
Surface waters
Anyone can grab it - just know the theories below
natural flow theory - cannot alter natural drainage patterns
common enemy theory - can take any protective measure to get rid of water
Reasonable use theory - balance utility of use against gravity of harm
Rights in airspace
Not exclusive, but entitled to freedom of excess noise
Zoning restrictions
Can enact to protect health, morals, safety, welfare of citizens.
CANNOT enact if no reasonable relationship to these elements above, too restrictive, discriminatory
Zoning - Noncomforing use
Passage of a zoning where actor does not conform does not have to eliminate at once - amortization is the gradual elimination of such use
Zoning - Special use permit
Need permit for proper intended use
Zoning - Variance
Departure from zoning ordiance
What happens to the itnerests in a foreclosure
foreclosure wipes out all junior mortgages (those that came after the foreclosing party), but does not wipe out senior mortgages.
Shelter Rule
once BFP enters, subsequent transferees get protection regardless of their notice.
Bonafide Purchaser
(1) purchaser
(2) without notice
(3) pays valuable consideration
First in time notice for conveyance
Common law theory - whoever got conveyance first wins regardless of notice or recordation. This is the default rule if the subsequent purchaser is NOT a BFP
Equitable Conversion
Once contract to sell is signed, purchaser is considered owner of REAL PROPERTY, seller’s right in proceeds considered PERSONAL PROPERTY
Tract index
reveal all recorded deeds - even wild deeds where there are gaps
Grantor-grantee index system
Only records interested granted by the first owner and down the line - so if first owner never recorded then you’d never find the subsequent conveyancs and not have record notice.
