Real Property

Question 1

Adverse Possession - Rule

Answer 1

Adverse possession is possession which is:

1. open and notorious;
2. actual and exclusive;
3. hostile or adverse;
4. continuous;
5. for the statutory period.

Adverse possession does not grant the possessor marketable title - unless they get a judicial decree of title in a quiet title action, they cannot sell the property.

Question 2

Easement by Prescription - Rule

Answer 2

An easement by prescription is effectively an easement by adverse possession. An easement by prescription is acquired through a use that is:

1. open and notorious;
2. actual;
3. hostile or adverse;
4. continuous;
5. for the statutory period.

Question 3

Fee Simple - Defined

Answer 3

An interest in land that, being the broadest property interest allowed by law, endures until the current holder dies without heirs.

Question 4

Fee Simple Absolute - Defined

Answer 4

An interest in property that provides the present right to possess, use, and dispose of the land for an indefinite period of time.

Question 5

Fee Simple Determinable - Defined

Answer 5

An interest in property that is terminated automatically upon the occurrence or non-occurrence of an event or condition (possibility of reverter).

Question 6

Fee Simple Subject to a Condition Subsequent - Defined

Answer 6

An interest in property that can be terminated at the will of a future interest holder upon the occurrence or non-occurrence of an event or condition (right of reentry).

Question 7

Fee Simple Subject to an Executory Limitation - Defined

Answer 7

An interest in property that, on the happening of a stated event, is automatically divested in favor of a third person.

Question 8

Rule of Convenience - Rule

Answer 8

Absent a contrary intention in the instrument to include all members of a class whenever born, the class closes when some member of the class can call for distribution of their share.

Question 9

Tenancy in Common - Defined

Answer 9

Tenants in common own separate interests, and each may convey or devise his or her respective tenancy in common interests.

Tenants in common can come into ownership at different times, pursuant to different documents and in unequal shares.

Unless otherwise specifically stated, title in co-owners is presumed to be a tenancy in common.

Question 10

Joint Tenancy - Rule

Answer 10

A joint tenancy among individuals only arises if the tenancy meets what is known as the four unities of time, title, interest, and possession.

1. The unity of time requires the joint tenants to take their interests in property at the same time.
2. The unity of title requires the joint tenants to receive their interest in the property via the same document.
3. The unity of interest requires each joint tenant to have an equal share of ownership.
4. The unity of possession requires each joint tenant to have the right to possess the entire property.

Question 11

Liens and Mortgages with Joint Tenancy - Rule

Answer 11

The majority rule is that liens and mortgages do not sever a joint tenancy on creation of the lien or mortgage, so that if the mortgaging joint tenant dies, the surviving joint tenant gets the property free of the mortgage, and the lender has nothing, which is why lenders generally require all the joint tenants to sign the loan documents and mortgage instrument.

But in title theory states, a mortgage will sever a joint tenancy on execution, so that the mortgagee only holds the mortgage on a ½ tenancy in common interest, and if the mortgagor tenant dies, the mortgage survives on that one-half interest.

Question 12

Rights of Co-tenants to Receive Rents or Profits - Generally

Answer 12

Each co-tenant has a right to possess all of the property, but a co-tenant out of possession cannot bring a possessory action, or claim that a possessing co-tenant owes them rent, unless there has been an ouster (a wrongful exclusion from possession)—usually by one cotenant claiming a right of exclusive possession.

In most jurisdictions, a co-tenant in possession has the right to retain profits gained by his use of the property, and there is no need to share those profits with other cotenants or reimburse them for rent, absent a written agreement to the contrary, or if the profits are from uses that deplete the property’s value (such as mining).

However, a co-tenant out of possession has the right to their pro rata share in rents and profits from third parties in all circumstances.

Question 13

Co-tenant Repairs - Generally

Answer 13

A co-tenant who pays more than the pro rata share for necessary repairs is entitled to contribution from the other co-tenants in an action for accounting or partition. In addition, a majority of courts permit an independent action for contribution if the repairs are necessary and the repairing co-tenant first gives notice to the other co-tenants.

There is no right of contribution for the cost of improvements.

Each co-tenant has a duty to pay his share of taxes and payments due on mortgages on the property. A co-tenant who is not in possession but pays these expenses is entitled to contribution from the other co-tenants, but a co-tenant in sole possession who pays the taxes and mortgage is only entitled to reimbursement in the amount that exceeds the fair rental value of the property.

Question 14

Ouster - Defined

Answer 14

Ouster occurs when one concurrent owner bars or removes another concurrent owner from actual possession of property.

The party who is ousted can bring an action for a share of the fair market rental otherwise attributable to the concurrently owned property.

Question 15

Periodic Tenancy - Rule

Answer 15

A periodic lease has an indefinite term; however, the term is broken into successive and equal periods of time. The term automatically renews for successive periods unless one party gives the other notice of its decision to terminate.

Under common law, the amount of notice that one party must give to the other to terminate a periodic tenancy is measured by the period itself.

Question 16

Term of Years - Rule

Answer 16

A lease for a term of years has a term for a fixed period of time, and ends at a certain date set out in the lease. It is not necessary for a party to the lease to give the other notice of its intent to terminate the lease. Instead, the lease simply terminates at the end of the period.

The lease does not actually have to last for a year or more - what matters is that the duration and termination point are definite.

Question 17

Sublease - Defined

Answer 17

A sublease is a transfer of the tenant’s exclusive right to possession of the premises for less than the entire duration of the term. Under a sublease, the tenant becomes the subtenant’s landlord.

A sublessee is not liable to the landlord for rent, but if the rent is not paid to the landlord, the landlord can terminate the sublease.

Question 18

Assignment - Defined

Answer 18

To constitute an assignment, the tenant must transfer exclusive possession of the lease property for the entire remaining term to the transferee. The original tenant remains liable to the landlord under privity of contract.

Question 19

Landlord’s Implied in Law Covenants - Rule

Answer 19

Under every lease agreement, landlord:

1. must deliver possession of the lease property
2. provide and adhere to a covenant of quiet enjoyment and non-disturbance
3. provide and adhere to an implied warranty of habitability

Question 20

Implied Warranty of Habitability - Rule

Answer 20

Present in every lease agreement is the implied warranty of habitability - a warranty by the landlord that the property is reasonably suitable for human residence.

Question 21

Implied Covenant of Quiet Enjoyment - Rule

Answer 21

The implied covenant of quiet enjoyment can be breached by actual or partial physical eviction, or by constructive eviction.

Question 22

Actual or Partial Eviction - Rule

Answer 22

Actual and partial eviction involve the landlord physically excluding the tenant from part or all of the premises.

Question 23

Constructive Eviction - Rule

Answer 23

Constructive eviction requires that the landlord breach a duty set out in the lease, and that the breach substantially and materially deprived the tenant of use and enjoyment of premises.

The remedy for a constructive eviction is to move out if done timely, but is otherwise waived if there is no timely move-out.

Question 24

Breach of Implied Warranty of Habitability - Rule

Answer 24

If the warranty of habitability is breached, the tenant can, at their option:

1. move out and terminate the lease, or
2. make repairs and offset the cost against their rent or
3. seek damages against the landlord.

Whenever there is a residential lease and some difficulties with the property, consider both quiet enjoyment and habitability.

Question 25

Tenant’s Implied in Law Covenants - Rule

Answer 25

There are three significant tenant’s implied in law covenants:

1. The tenant’s covenant to pay rent (the breach of which gives rise to the right to terminate the lease and to evict),
2. The tenant’s covenant to repair damage they cause, and
3. The tenant’s covenant not to commit waste.

Question 26

Covenants That Run With the Land - Generally

Answer 26

In a lease, covenants run with the land, meaning that they are binding on successor landlords and tenants, if:

1. there is intent (the lease applies to “successors and assigns”), and
2. the covenant touches and concerns the land—it affects the value of the lease to either party in some way.

Question 27

Waste - Defined

Answer 27

An act by someone in rightful possession of property that does permanent injury to the land, harming the interest of someone entitled to future possession.

Waste can be voluntary, permissive, or ameliorative.

Question 28

Voluntary Waste - Defined

Answer 28

These are deliberate destructive acts.

In addition to an injunction, the remedies include damages measured either by the diminution in value of the property both before and after the injury, or by the cost of repairs.

Question 29

Permissive Waste - Defined

Answer 29

These are acts of omission or neglect.

The only real remedy is damages measured either by the diminution in value of the property both before and after the injury, or by the cost of repairs. An injunction usually is unavailable because it would require affirmative acts.

Question 30

Ameliorative Waste - Defined

Answer 30

These are acts that alter the property but result in an increase in value (e.g., turning a warehouse into a store).

The only damages that may be recoverable are the costs of restoring the property to its previous condition. An injunction depends on the facts of a case, so a short-term tenant might be enjoined from making substantial changes, but a long-term tenant might not be so enjoined.

Question 31

Easement - Defined

Answer 31

An easement is the right to enter onto and use land for a particular purpose, such as travel over it, and thus for ingress (entrance) and egress (exit).

A license results from a failed attempt to create an express easement, and is terminable at will.

Question 32

Profit - Defined

Answer 32

A profit is the right to take specific things, such as timber, from the land.

Question 33

Express Easement - Defined

Answer 33

An express easement is a direct grant of the easement, preferably with a deed, since the Statute of Frauds requires easements, which are an interest in land, to be evidenced by a writing by the grantor—the party to be charged.

Question 34

Easement by Reservation - Defined

Answer 34

In an easement by reservation, the Grantor reserves an easement as part of the conveyance of the property to another person.

Question 35

Easement by Implication - Defined

Answer 35

An easement by implication arises if there was a prior use over a period of time amounting to consent.

For a use to give rise to an easement by implication, it must be:

1. apparent and continuous at the time the tract is divided (so it only has to exist once the parcel is divided, not before), and
2. it must be reasonably necessary to the enjoyment of the dominant parcel, considering factors such as cost and difficulty of the alternatives, and whether the price paid reflects continued use of the easement.

Question 36

Easement by Necessity - Defined

Answer 36

An easement by necessity arises where there was no prior use, and the party asserting the easement owns landlocked property and the two parcels were originally part of the same ownership at one time.

Question 37

Easement Appurtenant - Defined

Answer 37

An easement appurtenant is one where the holder of one parcel—the dominant tenement—holds the easement burdening a different parcel—the servient tenement.

An easement appurtenant automatically runs with the transfer of the servient estate, unless the servient estate is transferred to a bona fide purchaser without notice.

Question 38

Easement in Gross - Defined

Answer 38

An easement in gross, is one where the holder is not the owner of another parcel, but just has rights of access irrespective of their ownership of nearby or adjacent property.

An easement in gross automatically runs with the transfer of the servient estate, unless the servient estate is transferred to a bona fide purchaser without notice, but an easement in gross does not transfer between owners of the easement unless it is for commercial purposes.

Question 39

Termination of a License - Rule

Answer 39

A license is generally revocable at will, but a license can be irrevocable if the licensee invests substantial amounts of money or labor in reliance on the license. In that case, the license becomes the equivalent of an easement.

Question 40

Termination of Easements - Rule

Answer 40

Easements are terminated either in writing or orally plus an action of abandonment. The failure of an express easement may result in a license, which is ordinarily revocable at any time.

Question 41

Real Covenants - Defined

Answer 41

Real covenants are those promises, obligations or burdens that may be enforced against persons who take the promisor’s estate or interest in the leased premises.

Question 42

Equitable Servitudes - Defined

Answer 42

Equitable servitudes are rights to require another landowner to refrain from doing something so that the restriction burdens the estate of one landowner for the benefit of the estate to which the right attaches and which is owned by another landowner.

Question 43

When Will a Burdening Covenant Run with the Land? - Elements

Answer 43

For a burden on the servient estate to run with the land, the following five factors must be present:

1. An intent to create the interest that is the subject of the covenant;
2. Notice of the covenant or interest created by the covenant (actual, constructive, or inquiry);
3. Horizontal privity—the covenant was set forth in the granting instrument between the original parties;
4. Vertical privity—the successor holds the entire estate held by the original covenantor; and
5. Touch and concern—the effect of the interest created by the covenant is to make the land more useful or valuable to the benefited party.

Question 44

When Will a Benefitting Covenant Run with the Land? - Elements

Answer 44

For a benefit for the dominant estate to run with the land, the following three factors must be present:

1. An intent to create the interest that is the subject of the covenant;
2. Vertical privity—the successor holds the entire estate held by the original covenantor; and
3. Touch and concern—the effect of the interest created by the covenant is to make the land more useful or valuable to the benefited party.

Question 45

Enforcing an Equitable Servitude Against Successors - Elements

Answer 45

To enforce an equitable servitude by injunction or specific performance, plaintiff must show that that the benefit and burden run with the land:

1. For the burden to run against successors, you must only show intent, notice, and touch and concern.
2. For the benefit to run, you must only show intent and touch and concern.

Question 46

Present and Future Warranties - Defined

Answer 46

A warranty deed contains three present warranties:

1. Seisin - Grantor warrants that he has seisin
2. Right to Convey - Grantor warrants his authority to convey
3. No Encumbrances - Grantor warrants that there are no encumbrances on the property, other than those specifically listed in the deed.

and three future warranties:

4. Defense Against Claims - Grantor will defend the grantee’s title from someone alleging a superior interest.
5. Quiet Enjoyment - The grantor promises that the grantee will be undisturbed in title.
6. Further Assurances - The grantor promises to sign whatever documents might be necessary to correct a title problem that is a violation of the present warranties.

Question 47

Recording Statutes - Generally

Answer 47

A race statute simply provides that whoever records first prevails as the holder of the title.

A notice statute provides that a subsequent bona fide purchaser who has no actual, constructive, or inquiry notice of the prior instrument prevails over a prior grantee who failed to record.

A race-notice statute provides that a subsequent bona fide purchaser who also records before the prior grantee prevails over a prior grantee who failed to record. So in a race-notice jurisdiction, a subsequent grantee who has notice cannot prevail just by recording first.

Subsequent purchasers who take property, but have actual or inquiry notice, take subject to the prior unrecorded interest under both the notice and race-notice statutes.

Question 48

Foreclosure - Failure to Notify Junior Mortgages

Answer 48

Failure to give notice of the foreclosure to interested parties who hold junior interests will result in the foreclosure being ineffective as to those interests, and the purchaser at the foreclosure sale will purchase subject to those interests.

Question 49

Foreclosure - Equitable Right of Redemption

Answer 49

A foreclosed-out mortgagor has an equitable right of redemption—a right to buy back the property—by bringing the mortgage current or paying it off within the statutory period set forth—often one year.

Question 50

Deed of Trust - Defined

Answer 50

A deed of trust is a security interest in property, like a mortgage, and can be recorded. The parties to a deed of trust are the beneficiary (the lender), the trustor (the borrower), and the trustee (usually a disinterested third party such as a title company).

A deed of trust allows non-judicial foreclosure.

Question 51

Lateral and Subjacent Support - Generally

Answer 51

Landowners have a right to:

1. lateral support, so that excavation on adjacent land does not cause collapse or subsidence of their land, and
2. subjacent support so that tunneling underneath their land does not cause subsidence.

Question 52

Lateral and Subjacent Support - Liability

Answer 52

A landowner is strictly liable if his excavation causes adjacent land in its natural state to subside, or if the excavation causes adjacent land with improvements to subside, provided that the land would have subsided in its natural state. Otherwise, the landowner is only liable if his excavation was done negligently.

If a grantor conveys the right to have minerals taken from beneath the surface, and the land or existing buildings collapses, the grantee is strictly liable. But, if subsequently built buildings collapse, the grantee is only liable if they were negligent.