Real Property

Question 1

Possessory Estates

Answer 1

Fee Simple Absolute, Fee Simple Defeasible, Fee Tail, Life Estate (Make sure always going in order of conveyance to characterize interest)

Question 2

Fee Simple Absolute

Answer 2

Largest aggregation of property rights; owner controls use, possession and transfer of rights; infinite duration (except when escheats to state when no heirs); example: “O to A,” or “O to A and A’s heirs” (last part no longer needed).

Question 3

Fee Simple Defeasible

Answer 3

3 Types - Fee Simple Determinable, Fee Simple Subject to Condition Subsequent, Fee Simple Subject to Executory Limitation

Question 4

Fee Simple Determinable

Answer 4

Defeasible possessory freehold estate where grantee may lose it if a certain condition occurs, and property interest automatically goes back to grantor (possibility of reverter - future interest to grantor, may not transfer, devise, descend).

Question 5

Fee Simple Subject to Condition Subsequent

Answer 5

Defeasible possessory freehold estate where grantee may lose it if a certain condition occurs, but grantor must reserve the write in the written document to take back the property and must affirmatively act to terminate the estate, or expressly waive the termination (right of reentry / power of termination - future interest to grantor, may now transfer, devise, descend).

Question 6

Fee Simple Subject to Executory Limitation

Answer 6

Defeasible possessory freehold estate where grantee may lose it if a certain condition occurs, and interest automatically goes to third party; shifting if goes from grantee, and springing if goes from grantor; subject to RAP (executory interest - future interest similar to right of entry but in third party).

Question 7

Fee Tail

Answer 7

Possessory estate where conveyance of property interest must have specific language “to A and heirs of his body” and would go to direct lineal descendants as long as bloodline continues; after expiration, reversion or remainder; abolished in most states except DE, ME, MA, RI, so becomes fee simple if attempted in states that don’t follow.

Question 8

Life Estate

Answer 8

Smallest freehold estate (defeasible or indefeasible) measured by duration of human life of specified person (life tenant), and afterwards, there is a reversion or remainder (shifting/springing exec interest; may renounce and accelerate future interest). Transferable but not devisable/descendable.

Question 9

Life Estate Pur Autre Vie

Answer 9

Life estate measured by the duration of the life of a person other than the grantee; if grantee dies before third person, may devise/descend (modern law).

Question 10

Void Conditions

Answer 10

Conditions that put absolute restraints on alienation (transferability), penalizing marriage, encouraging divorce are void, and that portion is deleted from conveyance. Restraints on alienation must be limited in time.

Question 11

Waste (Life Estate and Leasehold Estate)

Answer 11

Affirmative, permissive, or ameliorative waste. Life or leasehold tenant has duty to prevent neglect or destructive use of property and may not make changes that affect vital/substantial portion of premises, characteristic appearance, or fundamental purpose.

Question 12

Affirmative Waste

Answer 12

Consumption of natural resources or voluntary, overt conduct that reduces value of property.

Question 13

Exception to Affirmative Waste / Consumption of Natural Resources

Answer 13

PURGE: 1) Prior Use shows it was used in that way; 2) it was done for Repairs or maintenance; 3) tenant was Granted the right to use the land in such a way, 4) the land is only used for Exploitation (open mines doctrine)

Question 14

Permissive Waste

Answer 14

Tenant may not commit negligence (permitting waste to occur) or failure to exercise reasonable care; tenant has obligation to make minor repairs, and pay interest, taxes, special assessments. (No obligation to insure and no liability for third party torts.)

Question 15

Ameliorative Waste

Answer 15

Tenant may not make changes to “improve” the property, unless in life estates, the future interest holder is identified and consents to the changes, or an external factor caused a permanent change in the neighborhood that deprived the property of productivity. (Modern Law - life tenant may ask for judicial sale of worthless property for proceeds to go in trust with income to life tenant.)

Question 16

Future Interest

Answer 16

Possibility of reverter, right of entry, reversion, remainder, executory interest. Does not entitle owner possession, but is present, legally protected right.

Question 17

Possibility of Reverter

Answer 17

Accompanies fee simple determinable estate, and should condition occur, grantor has the possibility of the estate reverting back to him automatically.

Question 18

Right of Entry

Answer 18

Accompanies fee simple subject to condition subsequent, and grantor retains the right of entry or right of termination of the estate and may exercise the right if a certain condition occurs.

Question 19

Reversion

Answer 19

Vested future interest in grantor arising by operation of law when previous estate ends and there is no remainder interest, so it goes back to grantor automatically.

Question 20

Executory Interest

Answer 20

Accompanies fee simple subject to executory interest, and if a certain condition occurs, a third party “cuts short” the previous holder’s interest and gets the estate. It may be SHIFTING if the third party is getting it from a grantee, or SPRINGING if the third party is getting it from the grantor.

Question 21

Remainder

Answer 21

VESTED (indefeasibly, or subject to divestment, or subject to open), or CONTINGENT; exists in life estates and when estate comes to natural end; cannot divest or cut short preceding estate.

Question 22

Vested Remainder

Answer 22

Indefeasibly Vested - certain to become possessory because 1) created in an ascertainable person AND 2) not subject to condition precedent (only natural termination of prior estate.

Vested Subject to Total Divestment - certain to become possessory UNLESS condition subsequent occurs; limitation exists that could divest estate.

Vested Subject to Open - conveyance to class that has at least one ascertainable member, but remains open because more members may still be added (which reduces estate size per member).

Question 23

Contingent Remainder

Answer 23

Contingent - future possession not certain; either person not ascertained, or condition precedent exists.

Alternative Contingent - two contingent remaindermen, or one contingent and one reversion; if condition not met, goes to another remainderman

Question 24

Merger

Answer 24

If possessory / vested life estate and the next vested estate in fee simple come into the hands of the same person, they merge into one vested fee simple estate.

Question 25

Rule Against Perpetuities (RAP)

Answer 25

An interest is void if there is a possibility it may not vest more than 21 years after a life in being at the creation of the interest. Applies to contingent remainders (example: unborn widow), executory interests, and vested remainders subject to open. If violates RAP, interest stricken from conveyance.

Question 26

Concurrent Estates

Answer 26

4 Types of Concurrent Estates
Joint Tenancy (JT)
Tenancy In Common (TIC)
Tenancy By The Entirety (TBE)

Two or more parties owning, using, and possessing property at the same time. Each tenant is entitled to use and possession of the whole. In most jurisdictions, not required to share profits from use (unless ouster or agreement), but must share pro-rata in mortgage, tax, assessments, and have right to contribution for repairs (not improvements).

Ouster - wrongful dispossession of rightful co-tenant; ousted tenant is entitled to share of fair rental value and may bring lawsuit to regain possession.

Partition - JT and TIC has right to judicial partition “in kind” (dividing into parcels, preferred) or “by sale and division of proceeds” (according to interest modified by improvement, repair, taxes, etc.).

Question 27

Joint Tenancy

Answer 27

All JTs have rights to survivorship, and interests are not devisable/descendable, but may be transferred during life. All regarded as single owner. JT must be clearly expressed in writing, or will default to TIC.

4 unities must be met:

1) Time (acquired/vested at same time),
2) Title (acquired by the same instrument),
3) Interest (equal undivided shares, identical duration),
4) Possession (right to possess the whole). Severing one of the unities severs JT (i.e. conveyance of interest).

Mortgages
Each JT may mortgage own interest; if passes away, others not responsible for mortgage and bank loses out.

Lien v. Title Theory (Mortgages)
Lien (majority) - lender holds security interest and owner is owner until foreclosure (CA); mortgage does not sever JT.
Title (minority) - lender has title and is entitled to possession on demand any time after default; mortgage severs JT.

Question 28

Tenancy in Common

Answer 28

No right to survivorship, interests transferable, devisable, descendable. Like JT, each entitled to use/possession of the whole and may mortgage interest. Most common form of ownership.

Question 29

Tenancy by the Entirety

Answer 29

Same 4 unities as JT, but may only be created between husband and wife (not recog in CP states). Spouse may not convey/mortgage interest. Only severed by death, divorce, mutual agreement, or joint creditor.

Question 30

Leasehold Estates

Answer 30

Non-freehold estates in which a tenant has present possessory interest, and the landlord has future reversion interest. May be either conveyance or contract, and those lasting for more than one year need to be in writing to satisfy the Statute of Frauds.

4 Types of Leasehold Estates (Y, P, W, S)
Tenancy for a Term of Years
Periodic Tenancy
Tenancy at Will
Tenancy at Sufferance

Question 31

Tenancy for Term of Years

Answer 31

Fixed term of years, created by a writing and ends automatically at the end of the period; may surrender in writing, or terminable upon condition (if fee simple determinable/subject to condition subsequent).

Question 32

Periodic Tenancy

Answer 32

Fixed period, can be created expressly, impliedly, or by operation of law (if lease invalid or tenant holdover); automatically renews and continues for succeeding periods; terminable by written notice delivered in advance (equal to period of tenancy not to exceed 6 months in advance).

Question 33

Tenancy at Will

Answer 33

No fixed period, and no writing needed; terminable if notice given within reasonable time (common law required no notice); if lease gives landlord right to terminate, tenant’s right is implied, but not vice versa.

Termination by operation of law if either dies, tenant attempts to assign, tenant commits waste, landlord transfers interest, or landlord executes a term lease to a third person.

Question 34

Tenancy at Sufferance

Answer 34

Tenant wrongfully remains in possession at termination of lease (holdover); ends at landlord’s successful eviction of tenant.

Landlord may expressly or impliedly consent to holdover, at which point, tenancy becomes periodic (not at sufferance) with same terms and tenant is liable for rent.

Question 35

Tenant Duties / Landlord Remedies

Answer 35

1) Refrain from committing WASTE
2) Not use for ILLEGAL purposes
3) Pay RENT
4) Not ABANDON early

Waste not allowed - affirmative (voluntary/intentional/exploitative), permissive (duty to make ordinary repairs to keep in same condition), ameliorative (must return to normal; liable for cost of restoration; modern law, if value increased, done by L/T tenant, and reflects neighborhood changes, then OK). Tenant can terminate lease if no-fault destruction to premises.

Must not be used for illegal purpose - landlord may terminate lease and recover damages; occasional unlawful conduct is not a breach.

Must pay rent - rent accrues all at once at the end of a term; security deposit may be retained to extent of damages, and if eviction, last month’s rent. If tenant fails to pay rent, landlord may evict or sue for rent (and in some states lien property left there).

If tenant breaches lease and abandons early - landlord may accept surrender (do nothing), or repossess and sue for damages (unpaid rent minus FRV). Landlord must mitigate damages by attempting to relet premises (in common law was not required).

Anticipatory breach - landlord may recover PV of unpaid rent for balance of term exceeding rental loss that could be reasonably avoided if lease expresses or mitigation attempted.

Question 36

Landlord Duties / Tenant Remedies

Answer 36

Delivery of possession, quiet enjoyment, implied warranty of habitability. T may terminate lease and sue for damages. If no-fault destruction, T not liable and can terminate lease.

Question 37

Landlord Limitations

Answer 37

Self-Help - not allowed at all (at common law, could if legally entitled to possession and means of reentry peaceable).

Retaliatory Eviction

Discrimination

Question 38

Covenant of Quiet Enjoyment (Breach = Constructive Eviction)

Answer 38

Implied covenant that tenant is entitled to right of possession, occupancy, and beneficial use of all of the leased premises (no express language needed).

Breach may result in constructive eviction; T must show:

1) LL breached covenant,
2) Breach is substantial and materially deprived T of use/enjoyment of premises,
3) T must give LL notice and reasonable time to repair, and
4) T must leave premises within a reasonable time.

Question 39

Actual v. Constructive v. Partial Eviction

Answer 39

Actual - tenant is deprived of occupancy, terminating the obligation to pay rent.

Constructive - LL did not intend to oust tenant, but acts in a way that deprives tenant of beneficial enjoyment, or conditions are unsuitable for occupancy.

Partial - tenant is physically excluded from part of the leased premises (need not be substantial); T relieved of whole rental obligation; if done by third party, T liable for apportioned rental value of part in possession.

Question 40

Implied Warranty of Habitability

Answer 40

Local housing code standards applied for reasonable suitability of human residence; cannot be waived.

If breached, tenant may 1) move out or terminate lease, 2) repair and offset rent (limited amount), 3) reduce rent to the fair rental value, or 4) seek damages.

Question 41

Landlord Limitations

Answer 41

Self-Help - not allowed at all (at common law, could if legally entitled to possession and means of reentry peaceable).

Retaliatory Eviction - landlord may not retaliate against tenant exercising legal rights by terminating lease, refusing to renew, raising rent, reducing services (anything done within 90-180 days, landlord must show valid reason for actions).

Discrimination - Fair Housing Act prohibits discrimination when selecting tenants (disparate treatment - actual / impact); Civil Rights Act gives all US citizens the same rights. Landlord must provide reasonable accommodations to disabled persons.

Question 42

Assignment v. Sublease

Answer 42

Assignment - assignee stands in shoes of original tenant and is in privity of estate and contract with landlord; each is liable for covenants that “run with the land” (same benefits/burdens intended in the original lease).

Sublease - sublessee is a tenant of original tenant and is not in privity of contract or estate to landlord / not personally liable; not obligated by covenants.

Landlord may assign interest unless express restriction by anchor tenant, but may still be liable; if T is given reasonable evidence of assignment, must pay rent to new owner.

Question 43

Landlord Tort Liability - Reasonable Care

Answer 43

Increasingly, jurisdictions are holding landlords liable for a general duty of reasonable care and liable for injury arising from ordinary negligence - the duty arises if the landlord had notice of the condition and the opportunity to repair. Reasonable care includes: defects prior to possession, duty to repair, and security.

Defects prior to possession - if there are defects prior to possession, LL is held to have notice, but is not liable for those arising after possession, unless there is evidence he knew or should have known.

Duty to repair - if LL has statutory duty to repair according to the housing code and fails to repair, he is liable for injuries to tenants and guests.

Security - if LL fails to maintain ordinary security measures according to the housing code, or advertises extraordinary measures but fails to provide them, he is liable for third party criminal actions.

Question 44

Landlord Tort Liability - Exceptions to No Duty To Make Safe

Answer 44

In Common Law, there was no duty to the landlord to make safe, but today there are 6 exceptions. (CCPFN)

1) Concealed dangerous condition - LL knows / should know dangerous conditions that T could discover upon reasonable inspection, has duty to disclose or is liable for injury; if T accepts, assumes risk
2) Common areas - LL has duty to exercise reasonable care in halls, walkways, elevators, and other common areas under his control, and is liable for injury from dangerous conditions that could reasonably be discovered and made safe.
3) Public use - LL is liable for injury to public if at time of lease 1) knows or should know of dangerous condition, 2) has reason to believe T may admit public before repair, even if promise to repair, AND 3) fails to repair.
4) Furnished short-term residence - in many jurisdictions, LL is liable if premises are defective and cause injury to tenant when furnished residence is leased for a short-term or immediate occupancy.
5) Negligent repairs / covenant to repair - if LL assumes duty to repair but does not do so, or does so negligently (which may give an appearance of safety), liable for injuries to T and guests.

Question 45

Adverse Possession

Answer 45

If one comes onto land adversely and satisfies certain requirements, he may have rights to title and ownership of the land.

1) Running of Statute - Statute of limitations period must pass (diff in each jurisdiction).
2) Actual Entry - Physical use
3) Exclusive Possession - Not sharing with true owner (if two adverse possessors working together gain title as TIC)
4) Open and Notorious - Adverse possessor makes it visible that they are using the property, and it is sufficiently apparent to put owner on notice.
5) Hostile (Adverse) - Without permission of true owner (intent or mistake not relevant)
6) Continuous - Degree of occupancy the average owner would have; intermittent is not sufficient; tacking permitted through privity (descent, devise, deed, oral conveyance), but not if ouster.

Other Notes:

Property Taxes - payment of property taxes is not required in all jurisdictions (CA does), but it is good evidence of claim of right.

Disability - if true owner has disability, statute of limitations does not begin to run, and if disability occurs later, it is stopped (includes minority, insanity, imprisonment).