Real Property Flashcards
What are 4 types of present possessory estates?
- Fee simple absolute;
-
Defeasible estate;
- fee simple determinable;
- fee simple subject to condition subsequent; and
- fee simple subject to executory limitation
- Life estate;
- Non-freehold estates (leasehold estate)
What are the duties/obligations of a life tenant?
- Pay property taxes & mortgage interest;
- Make reasonable repairs;
- Not commit waste; and
- Pay insurance premiums (some jurisdictions)
What is the doctrine of waste and the 3 types of waste?
Life tenant must keep property in the same condition as when she took ownership.
3 types:
- Affirmative (“voluntary”) waste
- Permissive waste
- Ameliorative waste
What are defeasible fees and what are the 3 types?
A fee estate of potentially infinite duration that can be terminated upon the occurrence of a specified event
- Fee simple determinable
- Fee simple subject to condition subsequent
- Fee simple subject to executory interest
What is a fee simple determinable?
What type of language creates it?
Property interest that terminates automatically upon the happening of a named future event.
Created with specific durational language (“until,” “while,” “so long as”)
What is the future interest in a fee simple determinable?
Possibility of reverter: automatically reverts back to the grantor if condition happens
What is a fee simple subject to a condition subsequent?
What type of language creates it?
Gives grantor power/right to terminate interest upon occurrence of a specific event.
Created with specific, conditional language: “on condition that,” “provided,” “if”
If language identifying the type of defeasible fee is ambiguous, then what is the default treatment?
- Fee simple subject to a condition subsequent is preferred over fee simple determinable (because there is no automatic forfeiture)
- Covenant is preferred over a defeasible estate
What is a fee simple subject to an executory interest?
What type of language creates it?
An estate that is subject to a future interest by a third party, and upon occurrence of an event, the estate will automatically divest in favor of the third party.
Created with specific conditional language: “To A, but if A doesn’t finish law school, then to B and B’s heirs”
What types of future interests can a grantor have?
- Reversion (O conveys life estate);
- Possibility of reverter (O conveys fee simple determinable);
- Right of entry
Differentiate between the power of termination and possibility of reverter
Power of termination:
- Must be expressly retained by grantor in the conveyance
- When the event happens the property does not automatically revert back to the grantor, the grantor must re-take the property
- Descendable; devisable, not transferrable inter vivos (majority rule)
Possibility of reverter:
- Automatically created whether or not grantor expressly reserves the right in conveyance
- When the event happens the property automatically reverts to the grantor
- Descendible, devisable, transferrable
Define
contingent remainders
Remainders that are either:
- Created for an unknown beneficiary (“To A for life then to B’s heirs” if B has no children yet); or
- Subject to a condition precedent (“To A for life then to B and her heirs if B passes the bar”)
What is a vested remainder and what are the 3 types?
Interest that is:
- Created in an ascertainable grantee; and
- Not subject to any condition precedent other than termination of the preceding estate
Types:
- Indefeasibly vested
- Vested remainder subject to total divestment
- Vested remainder subject to open
What types of future interests are retained by third parties?
-
Remainder
- Vested
- Contingent
-
Executory interest
- Shifting
- Springing
What is an indefeasibly vested remainder?
Grantee takes possession upon termination of prior estate, no conditions attached
Distinguish a shifting vs. springing executory interest
Shifting: cuts short a third party’s interest (“To A and her heirs but if B passes the bar, then to B)
Springing: cuts short the grantor’s interest (“To A if she passes the bar”)
💡Memory tip:
ShifTing (divests third party)
SprinGing (divests grantor)
What are the main qualities of a tenancy in common?
- No right of survivorship;
- Freely devisable, transferrable, alienable;
- Right to possess the whole; and
- Right to partition
How is a joint tenancy created?
Must have the Four Unities (“PITT”):
- Unity of Possession: equal right of possession;
- Unity of Interest: equal interest with co-tenants;
- Unity of Title: same conveyance; and
- Unity of Time: interests created at the same time
What are two key differences between joint tenancy and tenancy in common?
- A joint tenancy creates a right of survivorship and a tenancy in common does not
- Tenancy in common only requires unity of possession (not the 4 unities like a JT)
Define
tenancy by the entirety
A joint tenancy between a married couple that has:
- Right of survivorship
- No right to partition
What happens when a joint tenant transfers the interest?
The joint tenancy remains intact between remaining joint tenants and the interest sold is held as a tenancy in common between all parties
If one joint tenant mortgages their interest in land, what happens in a lien theory vs. a title theory state?
Lien: JT is not severed
Title: JT is severed
What is a leasehold (landlord/tenant) estate and what are the 4 types?
Estate created & governed by a lease signed between the parties.
Types:
- Tenancy for years;
- Periodic tenancy;
- Tenancy at will; and
- Tenancy at sufferance
What are the 4 basic duties of a tenant?
- Pay rent;
- Not commit waste (affirmative/voluntary, ameliorative, or permissive);
- Not use the premises for an illegal purpose; and
- Protect third party invitees from foreseeable dangers on the premises
If the tenant abandons the property, is the landlord required to mitigate damages?
Majority: Yes, should make good faith effort to rent to other tenants and can seek damages from tenant for losses.
Minority: No, landlord can seek damages for all unpaid rent
What are a landlord’s tort liabilities?
Landlords have a duty of reasonable care → can be liable for injuries:
- In common areas & non-common areas if defect is hidden;
- From existing defects that landlord knew of and failed to notify tenant about;
- From negligent repairs made by landlord; and
- From failure to make repairs required by housing code
What is an assignment and to whom is the assignee liable?
Transfer of the entire lease to new tenant (assignee)
Assignee is in privity with landlord and liable for all rent owed to the landlord
If the property is condemned, does the tenant need to continue making rent payments?
If partial (tenant still has partial use of the property) or temporary: Yes, but tenant is entitled to compensation for dispossession from condemnation
If full condemndation: No
Can you transfer:
- An easement appurtenant?
- Easement in gross?
- Yes, transferred automatically b/c attached to the dominant estate. Does not need to be explicitly stated in the transfer.
- Not transferrable unless for commercial purpose
What are 4 ways in which an easement can be created?
- Expressly (signed in, writing);
- Prescription;
- Implication; or
- Necessity
What is an easement by implication and how is it created?
Easement implied by prior use.
Exists when:
- Easement existed on a single tract of land that was subsequently severed into the servient and dominant estate;
- Prior use was continous and apparent;
- Parties intended the easement to continue; and
- Easement is reasonably necessary for enjoyment of dominant estate
When can an easement be implied without prior use?
- If lots are sold in a subdivision with a recorded plat or map
- If holder has a profit-à-prendre that makes it necessary to use the land to extract materials
What is an easement by necessity and how is it created?
Easement is absolutely necessary to access the property
Created if:
- Dominant and servient estates were once a single parcel under common ownership; and
- Severance of the parcel made the easement absolutely necessary
What happens if property is sold to bona fide purchaser without notice of the easement?
Easement is unenforceable against the BFP
8 ways to terminate an easement
- Destruction of servient estate;
- Release;
- Abandonment;
- Estoppel;
- Severance;
- Prescription;
- Merger;
- Expiration; or
- End of necessity
Differentiate between a license and an easement
Licenses:
- Freely revocable (unless detrimental reliance or coupled with interest)
- Privilege, not an interest in land
- Can be created without consideration or writing (no SOF requirement)
Easements:
- Last for specific period or indefinitely
- Interest in land
- Must satisfy SOF
Elements for an equitable servitude
- Writing: original agreement in writing;
- Intent: original parties must intend to bind successors;
- Touches and concerns the land;
- Notice: burdened party had actual, record, or inquiry notice (not required for benefit to run)
What is required for the benefit of a covenant to run with the land?
- Writing: original agreement in writing;
- Intent: parties intended benefit to run;
- Touches and concerns the land; and
- Successor is in vertical privity with original parties
⚠️ Horizontal privity is not required
What is required for the burden of a covenant to run with the land?
- Writing: original agreement in writing;
- Intent: parties intended to bind successors (courts are liberal in finding requisite intent);
- Touches and concerns the land;
- Horizontal and vertical privity; and
- Notice: successor had notice of the covenant when she took
Define
lateral support rights
Landowners have the right to lateral support from adjoining land
Define
subjacent support rights
Surface structures have the right to support from underneath the land.
Can arise if landowner allows another party mine, tunnel, or build an underground parking structure → party must ensure surface structures are adequately supported.
*Subjacent means “underground”
What is zoning and from where is the power derived?
Governmental regulation and control of land use.
Derived from the police powers.
When does a zoning regulation constitute a regulatory taking?
When it deprives the owner of ANY economically viable use
What types of zoning regulations are invalid/void?
- Discriminatory against suspect class (must show discriminatory purpose, not just effect);
- Not rationally related to the general public welfare;
- Unauthorized or in excess of authority; or
- Too restrictive
Define
mortgage
A security interest in real property between a borrower and lender that secures the performance of an obligation (typically repayment of a loan)
Define
equitable mortgage
Lender secures the mortgage by taking possession of all the original title documents of the property. Lender has the right to sell the property, foreclose, and appoint a receiver if the borrower doesn’t pay.
Who has the title and right to the property interest in a:
- Lien theory jurisdiction (majority)
- Title theory jurisdiction (minority)
- Lien: Mortgagor-borrower has title and right to possession. Mortgagee-lender has a lien on the interest.
- Title: Mortgagee-lender has title and right to possession
If a mortgagor transfers the property, who is liable upon default if the buyer:
- Assumes the mortgage?
- Takes subject to the mortgage?
If the buyer/transferee “assumes” the mortgage:
- Buyer/transferee is primarily liable for the loan
- Mortgagor is secondarily liable unless released by transferee
If buyer/transferee takes “subject to” the mortgage:
- Mortgagor is primarily liable
- Buyer/transferee incurs no liability to repay the loan
What is foreclosure?
When the borrower fails to make timely payments, the lender can foreclose on the property and use the proceeds to satisfy the debt owed
Define
right of redemption
After default, at any time prior to the foreclosure sale, a debtor can redeem title to the property by paying the full debt amount
More info: Right of Redemption
What is an acceleration clause?
Requires the borrower to pay the full amount owed upon default
More info: Acceleration Clause
What are the 3 types of foreclosure?
Judical
- Sale is supervised by the court
Nonjudicial (“power of sale”)
- Property is sold without court supervision
- Common in deed of trust states
- Mortgage/deed of trust must contain a “power-of-sale” clause
Strict
- Lender seeks court order for borrower to pay within a specified time frame. If borrower cannot pay, lender takes title to the property
- Minority method
In a foreclosure sale, who gets priority for the proceeds?
- Debts incurred by the foreclosure (attorney’s fees, etc); then
- Senior mortgages; then
- Junior mortgages
How do you determine what interests take priority (i.e. which is senior and junior) in a foreclosure sale?
Generally, follow the “first in time, first in right” rule, unless an exception applies
What are the exceptions to the “first in time, first in right” rule?
- Purchase money mortgage: Priority over all liens, regardless of when they were recorded
- Recorded mortgages have priority over unrecorded mortgages;
- Non-guaranteed advances from future-advance mortgages;
- Subordination by senior mortgagee to subsequent interest;
- Modification; and
- After-acquired property
How are interests affected by a foreclosure sale?
- Junior interests are extinguished
- Buyer buys the property subject to the senior interests
What is the Doctrine of Marshaling Assets?
Holder of a senior security interest must proceed:
- First, against property without junior security interests;
- Second, against property that has whichever junior interest was more recently created; and
- Lastly, against property that has whichever junior interest was more remotely created
Elements of adverse possession
Trespasser’s possession is:
- Continuous for duration of statutory period;
- Open and notorious;
- Actual;
- Hostile; and
- Exclusive
Requirements for a land sale contract to satisfy the SOF
- In writing;
- Signed by the parties to be bound;
- Contain essential terms of the deal (description of the land, consideration to be paid, etc)
What defects render a title unmarketable?
-
Encumberances;
- Covenants
- Easements
- Mortgages
- Liens
- Title acquired by adverse possession;
- Zoning violations;
- Incurable and undisclosed physical defects; and
- Future interests that have not consented to transfer
What can the buyer do if they discover the title is unmarketable?
Notify the seller before the closing date and give them a reasonable time to cure defects
If seller doesn’t cure, buyer can seek specific performance, damages, and an action to quiet title
⚠️ If buyer doesn’t notify seller beforehand, deed controls b/c of the merger doctrine and seller is not liable
What’s the doctrine of merger and its effect?
Once the deed is transferred/conveyed to the buyer, the contract merges with the deed and the deed controls, not the contract.
⭐️ This means that whatever obligations the seller had under the contract are not enforceable unless they are also contained in the deed.
What is the doctrine of equitable conversion?
Helps determine who bears the risk of loss. Holds that once the buyer signs K to purchase land at a later date, but before closing:
- Buyer has equitable title; and
- Seller has legal title
Under the doctrine of equitable conversion, who bears the risk of loss if the property is destroyed prior to closing?
Holder of the equitable title (the buyer), regardless of whether buyer took possession yet
What’s the exception to the doctrine of equitable conversion?
Buyer will not bear the risk of loss if loss is attributable to the intentional or negligent acts of the seller
What is required for a deed to be effective?
- In writing and signed by grantor;
- Describe the parties and the land;
- Delivered (i.e. seller must have present intent to transfer the interest)
Define
general warranty deed
Contains 6 present and future covenants of title that cover the property’s entire history
Present:
- Seisin;
- Right to convey; and
- Against encumbrances
Future:
- Quiet enjoyment;
- Warranty; and
- Further assurances
Define
special warranty deed
Contains the same covenants of title as a general warranty deed, but only for the period of the seller’s ownership of the land → does not contain any warranties for what happened before the grantor took ownership
Define
bona fide purchaser for value (BFP)
Buyer who:
- Purchases property for value;
- Without notice of any prior claims
What are the 3 types of notice?
- Actual;
- Record (also called constructive notice); and
- Inquiry
Who prevails in a notice jurisdiction?
Subsequent bona fide purchaser who lacks notice of an earlier interest will prevail
Who prevails in a race-notice jurisdiction?
First BFP to properly record
