Real Property

Question 1

Fee simple subject to a condition subsequent

Answer 1

Created when the grantor retains the power to terminate the grantee’s estate on the happening of a specified event. On the occurrence of this event, the grantee’s estate continues until the grantor exercises his power of termination (right of entry) by bringing suit or making reentry.

Question 2

Joint Tenancy

Answer 2

A joint tenancy is a concurrent estate in land with the right of survivorship: when one joint tenants dies, the surviving co-tenants take the property free of the deceased tenant’s interest.

At common law, four unities are required to create a joint tenancy: the interest must have vested at the same time, have been acquired by the same instrument (title), be of the same type and duration (interest), and give identical rights to possession. A joint tenancy is created by a clear expression of intent.

A joint tenant’s inter vivos conveyance of his undivided interest destroys the joint tenancy, and the transferee takes as a tenant in common.

A majority of states regard a mortgage as a lien on the title, which does not sever a joint tenancy; a minority of states regard a mortgage as a transfer of title, which severs a joint tenancy.

Question 3

Rights and duties of Joint Tenants

Answer 3

Each co-tenant has the right to possess and enjoy all portions of the property; an ouster occurs if one tenant wrongfully excludes another or claims a right to exclusive possession. An ousted co-tenant is entitled to his share of the fair rental value of the property for the time he was wrongfully deprived of possession.

A co-tenant who pays more than his pro rata share of the cost necessary repairs is entitled to contribution from the other co-tenant.

A co-tenant not in sole possession who pays the taxes can compel contribution from the other co-tenants; however, a co-tenant in sole possession is reimbursed only for the amount that exceeds the rental value of the property.

A co-tenant out of possession has a right to share in rents from third parties.

Question 4

Tenancy in Common

Answer 4

A tenancy in common is a concurrent estate with no right of survivorship; each owner’s interest is freely alienable and inheritable.

Question 5

Waste

Answer 5

A life tenant owes the future interest holder a duty not to commit waste on the premises, which includes the duty not to consume or exploit natural resources on the property.

Question 6

Real Covenant

Answer 6

A real covenant is a written promise to do or not do something on the land and runs with the land at law. For a burden to run with the land, (i) the original parties must have intended successors to be able to enforce the covenant, (ii) the successor must have notice under the relevant recording act, (iii) horizontal privity must exist between the original covenanting parties, (iv) vertical privity must exist between the successor and his predecessor, and (v) the covenant must touch and concern the land.

1. Intent: intent can be evidenced by language in the conveyance creating the covenant.
2. Notice: under modern recording statutes, a BFP who has no notice of the covenant and records takes free of the covenant. Notice may be actual, inquiry, or record.
3. Horizontal privity: horizontal privity requires that, at the time the promisor and promise entered into the covenant, they shared some interest in the land independent of the covenant.
4. Vertical privity: to be bound, the successor in interest must hold the entire durational interest held by the covenantor at the time of the covenant.
5. Touch and concern: a covenant touches and concerns land when it affects the legal relationship of the parties as landowners and not merely as members of the community at large.

A breach of real covenant generally is remedied by an award of money damages.

Question 7

Equitable Servitude

Answer 7

An equitable servitude is a covenant that equity will enforce against the assignees of the burdened land who have notice of it. An equitable servitude generally must be created in a writing that satisfies the Statute of Frauds. The usual remedy is an injunction against violation of the covenant.

For the burden to run, the covenanting parties (i) must have intended that the servitude be enforceable by and against assignees, (ii) the assignee must have notice of the covenant, and (iii) the covenant must touch and concern the property. If a covenant is silent as to who holds its benefit, any neighbor in the subdivision will be entitled to enforce the covenant if a general scheme or plan existed at the time he purchased his lot.

Question 8

Easement Appurtenant

Answer 8

An easement appurtenant is a right to use someone’s else land (servient parcel) for the benefit of the holder’s own tract of land (dominant parcel).

Easement may be created expressly, through a writing that satisfies the Statute of Frauds. Recordation is not essential to the validity of a deed as between the grantor and the grantee. An easement is presumed to be perpetual unless the grant specifically limits the interest.

An express perpetual easement may be terminated by unity of ownership, written release, abandonment, estoppel, or prescription.

When a servient parcel is transferred, its new owner takes it subject to the easement unless she is a bona fide purchaser (BFP). There are three ways the person who acquires the servient land might have notice of the easement: (i) actual knowledge, (ii) record notice, and (iii) notice from the visible appearance of the easement.

Question 9

Easement in Gross

Answer 9

An easement holder has the right to use a tract of land, but has no right to possess the land.

An easement in gross is created when the easement holder acquires that right independent of his ownership or possession of another tract of land. An easement by reservation arises when a landowner conveys land but reserves the right to continue to use the tract after conveyance.

When a servient parcel is transferred, its new owner takes it subject to the easement unless he is a BFP with no notice of the easement.

Question 10

Periodic Tenancy

Answer 10

A periodic tenancy will be implied if the lease has not set termination date but provides for periodic payments of rent. A periodic tenancy is automatically renewed from period to period until proper notice of termination is given by either party. The tenancy must end at the end of a “natural” lease period. Notice must be given a full period in advance. The notice must be in writing and delivered to the other party.

Question 11

Tenancy for Years

Answer 11

A tenancy for years is for a fixed period of time.

In most states, the Statute of Frauds requires that a lease for more than one year be evidenced in a signed writing. A tenancy for years ends automatically on its termination date, without either party giving notice, but may terminate prematurely when the tenant exercises a remedy for the landlord’s breach.

If a tenant unjustifiably abandons the property, the landlord may do nothing or repossess the property. Traditionally, the landlord may let the premises lie idle and collect rent from the abandoning tenant. The majority view requires the landlord to make reasonable efforts to mitigate his damages by reletting to a new tenant; failure to do so will reduce his recovery.

Question 12

Covenant of Quiet Enjoyment – Constructive Eviction

Answer 12

Implied in every lease is a covenant that neither the landlord nor someone with paramount title will interfere with the tenant’s quiet enjoyment of the premises. If a landlord’s act or failure to provide a service he has a legal duty to provide renders the property uninhabitable, the tenant may terminate the lease and seek damages.

A tenant can claim constructive eviction only if: (i) the landlord causes the injury, (ii) the breach substantially and materially deprives the tenant of his use and enjoyment of the premises, (iii) the tenant gives the landlord notice and a reasonable time to repair, and then (iv) the tenant vacates within a reasonable time.

A landlord has no common law duty to repair – the duty must be provided for in the lease or required by statute or by implied warranty of habitability.

Question 13

Implied Warranty of Habitability

Answer 13

The majority of states have adopted the implied warranty of habitability for residential tenancies. The standard usually is the local housing code, or if none, whether the conditions are reasonably suitable for human residence.

When a landlord breaches the warranty of habitability, courts have allowed tenants to (i) move out and terminate the lease, (ii) make repairs directly and offset the cost against future rent obligations, (iii) reduce or abate rent to an amount equal to the fair rental value in view of the defects, or (iv) remain in possession, pay full rent, and seek damages.

Question 14

Assignment and Sublease

Answer 14

Absent an express restriction in the lease, a tenant may freely transfer his interest.

A complete transfer of the entire remaining term is an assignment. A transfer of less than the entire remaining term is a sublease.

Covenants not to assign or sublease are strictly construed against the landlord, so a covenant prohibiting assignments does not prohibit subleasing, and vice versa.

A sublessee is not in privity of contract or privity of estate with the landlord because it does not hold the original tenant’s full estate.

Nearly all states have enacted an unlawful detainer statute, which permits the landlord to evict a defaulting tenant or his sublessee. In some states, a commercial landlord who does not receive rent when due can assert a lien on the personal property found on the leased premises.

Most states statutorily prohibit forcible entry and prevent a landlord from using self-help to remove a tenant. Some states bar the landlord from more subtle methods of regaining possession, such as changing the locks.

Question 15

Mortgages

Answer 15

A mortgage is a security interest in real estate; upon default, the mortgagee can take title to the real estate or have It sold and use the proceeds to pay the debt.

A single joint tenant can encumber joint tenancy property.

Question 16

Deed of Trust

Answer 16

A deed of trust is a security interest in real estate, in which the debtor gives a deed of trust to a third party trustee and in the event of default, the lender instructs the trustee to foreclose the deed of trust by sale. (The sale may be either judicial or nonjudicial, under a “power of sale” clause that authorizes the trustee to advertise, give appropriate notices, and conduct the sale personally).

Question 17

Deficiency

Answer 17

If the proceeds of a foreclosure sale are insufficient to satisfy the debt under a deed of trust, the beneficiary may sue the debtor for the deficiency.

Question 18

Titles

Answer 18

A deed must be in writing, be signed by the grantor, and reasonably identify the parties and the land. Delivery refers to the grantor’s intention to make a deed presently effective even if possession is postponed; physical transfer of the deed is not necessary. Recording a deed raises a presumption of delivery but is not essential.

When a deed expressly provides that title will not pass until the grantor’s death, it creates a present possessory life estate in the grantor and a future estate in the grantee.

Question 19

Adverse possession

Answer 19

To acquire property by adverse possession, the possessor must show (i) an actual entry giving exclusive possession that is (ii) open and notorious, (iii) hostile, and (iv) continuous throughout the statutory period of 10 years.

1. Actual: gives the true owner notice of a trespass. Generally, an adverse possessor gains title only to the land he actually occupies. Actual possession of a portion of land gives title to the whole tract if (i) there is a reasonable proportion between the portion actually possessed and the tract, and (ii) the possessor has color of title to the whole tract.
   a. Color or title is a document that purports to give title but for reasons not apparent from its face does not. A properly executed deed that was improperly delivered provides color or title.
2. Open and notorious: when it is a use the owner would make of the land. The occupation must be sufficiently apparent to put the true owner on notice of a trespass.
3. Hostile - adverse: the adverse possessor must enter the land without the owner’s permission. Permissive possession can become hostile if the possessor clearly indicates he is now claiming the land “hostilely.”
4. Continuous

Question 20

Recording Act

Answer 20

Notice: under a notice recording statute, priority is given to subsequent bona fide purchasers who took property without notice. Notice may be actual, constructive, or inquiry.

Race: priority goes to the first to record.

Under the race-notice act, a prior grantee will prevail unless a subsequent purchaser or beneficiary both (i) is a BFP, and (ii) records before the prior grantee records. To be a BFP under the recording statutes, the purchaser must give value and not have actual, record, or inquiry notice.

Question 21

General Warranty Deed

Answer 21

A general warranty deed typically contains six covenants for title: three present covenants ((i) of seisin, (ii) of right to convey, and (iii) against encumbrances) and three future covenants ((i) for quiet enjoyment, (ii) of warranty, and (iii) for further assurances). The future covenants are not breached until a third party interferes with the possession of the grantee or his successors.

1. Of seisin: grantor has the estate he purports to convey
2. Of right to convey: grantor has authority to make grant
3. Against encumbrances: assures that there are neither visible (easements) nor invisible (mortgages) encumbrances against the title or interest conveyed. The grantor breaches this present covenant if the property is encumbered when it is conveyed. Most jurisdiction hold the grantor liable for breach of covenant even if the grantee knew of the encumbrances.
4. For quiet enjoyment: assures that the grantee will not be disturbed in his possession or enjoyment of the property by a third party’s lawful claim or title.
5. Of warranty: assures that the grantor will defend the grantee against any lawful claims of title by third party and compensate the grantee for any loss sustained thereby.
6. For further assurances: is a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turn out to be imperfect.