Real Property Flashcards
what does “for the purpose of” do for estates?
Nothing
Fee Simple Absolute
Present Estate, Runs Forever
What estate is created unless language shows clear intent to create another estate?
Fee Simple Absolute is the presumed estate
Alienation (right to transfer) and Fee Simple Absolute
Cannot restrict alienation, if restricted condition is ignored
Conditions on Fee Simple Absolute
Are permitted
RIght of First Refusal on Fee Simple Absolute
Are Permitted
Life Estate
Present estate, Measured by life, not time
Life Estate and Alienation
Permitted to restrict right to transfer
How are life estates implied?
To A after Death of B, B has implied life estate
Life Estaet Pur Autre Vie
Measuring life is in someone else
Life Tenant’s main duty
Maintain the Estate, Normal use of land in present condition
How is a life tenant guilty of waste?
If he uses the land in a way thats less or more then the normal use of the land
Voluntary Waste
affirmative use beyond the right of maintenance causing harm to premises/ held liable to holder of future interest
Open Mines Doctrine
can deplete natural resources if they were being depleted before
Ameliorative Waste
Altering property but increasing value of it
Changed Conditions on Life Tenant Property
If changed conditions have made the property relatively worthless in it’s current use, the life tenant can tear it down without liability to the holder of the future interest
Permissive Waste
Failing to Maintain
To avoid Permissive Waste Life Tenant must
Repair, but not replace/ Pay taxes on property/ Pay interest on mortgage (duture interest holder pays principle)
Life Tenant Limitations on Liability
Limited to amount of income received from land or if personally using property, reasonable rental value of the land
Class Gifts
Not identifiable group of people
Once established class stays open for:
People who later meet definition
If members of class predecease testator
their gift lapses
Rule Of Convenience for Class Gifts
Class closes when anyone in the class is entitled to distribution, rule of construction not law, only if grantor did not state otherwise
When does a future interest exist?
It exist now but possession will not come until later, if ever
Future Interest Retained by Grantor
Reversion, Possibility of Reverter, RIght of Reentry
Future Interest given to Grantee
Remainder, Executory iInterest
Reversion
Interest kept by Grantor when Grantor gives less then duration estate grantor had/ NO RAP
Possibility of Reverter
Grantor gives fee simple determinable
Fee Simple Determinable
Key Words: So long as, until, while, during/ Ends automatically when condition happens
Right of Reentry (power of termination)
When grantor gives fee simple on a condition subsequent/ must have express language reserving right of reentry, ambiguous language will be read in a way that there is no forfeiture
Fee Simple Condition Subsequent
Title does not automatically go back to Grantor unless Grantor exercises right
Key Words: Provided However
Remiander
Possessory if at all upon natural expiration of estates before them/ Grantee interest
Vested Remainder
Nothing stands in the way of person becoming possessory on the expiration of estate before them, no condition needs to happen
Vested Remainder Subject to Open (Subject to Partial Divestment)
Class where members are not yet known and class remains open to all of future people who qualify as members of the class/ Subject to RAP
Contingent Remainder
Something has to happen or be known before remainder can become possessory/ Subject to RAP
- Condition must be satisfied before grantee can be certain (ex: age)
- Contingent one grantee being born (ex: To A’s children, A has no children at time_
- If can’t identify person by name, contingent on identifying person (ex: widow)
Executory Interest (Subject to total divestment, subject to executory limitation, subject to executory interest )
Cuts short estate before it (not on natural expiration)/ RAP
Shifting Executory Interest
Taking title from one grantee to another grantee
Springing Executory Interest
Taking title from grantor and giving it to grantee
Rule Against Perpetutities
No interest unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest
What is subject to Rule Against Perpetutities?
Contingent Remainders, Executory Interest, Vested Remainders subject to open, Options and Rights of First Refusals
Exception to Rule Against Perpetuties
Charity to Charity
Look Out for RAP Hypos
- Gift over to class following open class: Watch for facts where class is open and gift contingent on class member reaching a certain age, anyone is capable of having kids
- Unborn Spouse: where gift does not vest until widow/widower dies
Joint Tenancies
Right of Survivovrship, Right to Partition
Joint Tenancies and Texas
NONE right of survivorship doen by contract
Creation of Joint Tenancies
Time, Title, Interest, Possession
Joint Tenant/ Title
Joint Tenants must take by the same instrument
Joint Tenant/ Interest
All joint tenants must take the same kind and same amount of interest
Joint Tenant/ Time
All interest must have vested on same day
Joint Tenant/ Possession
All must have identical rights of possession
Joint Tenant Language
Must have clear language to created, failure results in Tenants in Common
“Joint Tenants”, “as joint tenants with right of survivorship” “in joint tenancy with right of survivorship”
Destruction of Joint Tenancy
- Conveyance by one of Joint Tenants
- Mortgage in Title Theory
- Contract of sale
- Creditors Sale
Conveyance by one of Joint Tenants
Destroys Joint Tenancy of sellers interest, buyer takes as tenant in common
- Lease is ok
Title Theory
Minority/ Title passes from mortgagor to mortgagee
- Mortgagee entitled to possession upon demand at any time, can take possession so long as mortgagor defaults
Lien Theory
Majority/ Lien attaches to title, title does not transfer
- Mortgage cannot take possession of the land before foreclosure unless mortgagee consents or abandons land
Joint Tenant and Contract of Sale
Severs when you contract to sell the land, not upon actual sale
Creditors Sale and Joint Tenancy
Judgement lien not enough, has to be actual judicial sale
Tenancies in Common
Default Tenancy (if Joint tenancy not properly created)
- Right to partition, No right to survivorship
- All tenants must have equal rights of possession
Tenancy by The Entirety
Created by Husband and Wife
Rights and Duties among co-tenants
Possession, Accountability, Contribution
Co-tenants and Possession
No Exclusive right of possession, right to possess all the property Consistent with other co-tenants right to possess
Co-tenants and Accountability
- Do not have to account for share of profits
- Will have to account if there is an agreement to share, lease of property to a third party, depletion of natural resources
Co-tenants and Ouster
Will have to account to co-tenant if keeping co-tenant off the property or claiming right of exclusive possession
Co-tenants and Contribution
Right of co-tenant to force others to pay for expenditure
- Available for mortgage (if everyone has signed), governmentally imposes obligations
- None for improvements or nonnessary repairs (can recoup in sale or partition)
Tenancy for Years
Any estate for a fixed period of time, no matter how short
- SOF: Any lease for over 1 year has to be in writing (1 year exact ok)
Periodic Tenancy
Ongoing, continuing, repetitive until one party gives valid notice
Ways to Create Periodic Tenancy
- Express agreement
- Implication (lease silent on duration)
- Operation of Law:
- Oral Lease violating statute of frauds, determined by period covered in rent check
- Holdover Tenant: Tenant gives rent after expiration of lease and landlord accepts it
Terminating a Periodic Tenancy
2 Requirements
- Proper Notice: week-week, month-month, year-6 months
- Effective day of termination: Last day of period only
Tenancy at Will
No period of duration, either party terminates at any time without notice
Terminating a Tenancy at Will
Death of either party, waste by tenant of any kind, assignment by tenant, transfer of title by landlord, lease by landlord to someone else
Tenancy at Sufferance
Holdover Tenant/ Landlords sole option (not T)
- Hold tenant as wrongdoing trespasser and sue to throw him off and recover damages for holdover
- Impose a new periodic tenancy
- Residential: always month to month, prior lease doesn’t matter
- Commercial: if old lease for year or more new lease is year to year
If less then year measured by rent period of old tenancy
- Can only imposes if reasonable holdover (1 hour probably not)
Raised Rent: only if landlord tells tenant of higher rent before expiration of lease
Tenant Duties
If Lease is silent: pay rent and no waste
If Lease says tenant must repair and maintain: Tenant must repair wear and tear unless wear and tear is specifically excluded
- Tenant can terminate the lease if premises are destroyed and tenant not at fault
Landlord Remedies if Tenant doesn’t pay rent
Landlord can sure for damages and sue to throw tenant out
Landlord Remedies if Tenant unjustifiably abandons leasehold
2 choices:
- Treat abandonment as offer to surrender, accept offer by retaking premises, ending tenants liability as of that date
- Rent premises and hold tenant liable for deficiency
Landlord Duties- When lease begins
- Given tenant actual possession when lease begins
- If can’t give actual possession landlord has breached
Landlord Duties- Implied Covenant of Habitability MBE
Must provide property that is reasonably suited for residential use
- If landlord breaches tenant can either move out and end lease or stay and sue for damages
Implied Covenant of Habitability in TEXAS
NO Implied Habitability
- Statutorily obligated that landlord repairs conditions that materially affect physical health or safety
Implied Warranty of Suitability in TEXAS
Commercial only, covers latent defects
Implied Covenant of Quite Enjoyment: In every lease, 3 ways to breach
- Total Eviction: terminated lease, ending tenants obligation to pay rent
- Partial Eviction:
- Landlord- Stay and pay no rent, doesn’t terminate lease
- Person other then landlord: Tenants rent is apportioned to reflect amount taken away
- Constructive Eviction: Where landlord fails to provide service landlord obligated to provide, premise uninhabitable
To not pay rent 3 requirements: Landlord has to do it, must be substantial interference with covenant of quite enjoyment, must be abandonment of premises within a reasonable time after breach
Assignment
Tenant transfers everything
- Doesn’t matter if its called something else if this is what its doing
Sublease
Tenant transfers, holding a portion back
- Doesn’t matter if its called something else if this is what its doing
TEXAS: Sublease and Assign
No right to assign or sublet unless landlord gives permission
MBE: Sublease and Assign
Tenants can assign or sublet unless lease says otherwise
Touch and concern the Land
If performance of covenant makes land more valuable or useful
Assignments/ Privity of Estate
between landlord and present tenant or tenant and assigned landlord
Assignments/ Privity of Contract
where there is agreement between parties or where assignee expressly assumes obligations under lease
Assigned Tenant
Will be liable for rent and covenants that touch and concern the land
Subleassor and Sublessee
Subleassor is deemed to have kept the estate
Sublessee is not liable to landlord (no privity of contract or privity of estate)
Non-assingment or nonsublease Clause
- Enforceable, Narrowly construed stating one does not prohibit against the other
If landlord gives permission, clause is waived for all time unless landlord states otherwise at time of giving permission
Landlord Tort Liability Generally
No duty to tenant or tenants inviteess
Exceptions to landlords no duty rule
latent defects, short tem lease of furnished dwelling, common areas under landlord control, negligent repair, public use exception
Landlord Liability with Latent Defects
duty to disclose (not repair) which landlord knows of or has reason to know of
Landlord Liability with Short Term Lease of Furnished Dwelling
Short term: 3 months or less
liable for defects even if landlord doesn’t know of has no reason to know of them
Landlord liability and Negligent Repair
Liable even if all due care was used
Landlord liability and Public Use
Landlord must know or should know of major defects, landlord must know or should know tenant will not fix defect, landlord must know or should know public will be using premises
TEXAS and landlord liability
Landlord has statutory duty to repair, landlord liable in tort if injured person is in the class of person protected by the statute
Tenants Tort Liability
Liable to third party invitees for negligent failure to correct dangerous conditions on the premises regardless of whether landlord may be contractually liable or not
Fixtures
If attached item becomes a fixture neither side can remove it
How to tell if it’s a fixture
Look to intent (or agreement, agreement controls)
Intent Factors and Fixtures
Degree of attachment, general custom, degree of harm to premises if removed, trade fixtures
- Tenants favored if it can be removed without substantial harm, no intent
- Chattel used for trade or business is not a fixture
- Washers and Dryers are not fixtures
When must chattel be removed?
Chattel must be removed before end of lease or before closing, stays if not done even if could have been removed before
Easements
nonpossessory interest in land involving a right of use
Easement Appurtenant
directly benefits use and enjoyment of specific land
Easement Appurtenant/ Burdened Property
Servient Estate
Easement Appurtenant/ Benefited Property
Dominant Property
Creation of Easement
- Express Agreement
- Easements by Implication
- Easements by Prescription
Creation of Easement: Express Agreement
- Grant to someone or Reserve when land sold
- Must comply with statute of frauds or deed formalities
- In writing, signed by holder of servient estate, executed like a deed
- Easements of less then a year can be oral
Creation of Easements: Easements by Implication
- Landlocked property, servient estate owner can choose location if reasonable
- Previous use by common owner
- None for light and air (unless by express_
Creation of Easements: Easement by Prescription
Like adverse possession (MBE 20/TEXAS 10)
- Must be adverse to the owner, use must be continuous and uninterrupted for the statutory period, visible and notorious, without owners permission
- Seasonal use is ok if appropriate under the circumstances
- Can use with the common owner (doesn’t have to be exclusive like adverse possession)
Transfer of Easement Appurtenant/ Benefit
Goes automatically with dominant estate, never need to be mentioned in deed again, runs with land
Transfer of Easement Appurtenant/ Burden
Binding on subsequent holder of servient estate if they had notice, even if not in deed
Transfers of Easement In Gross Commercial MBE
Can always be transferred
Transfers of Easement In Gross Personal MBE
Cannot be transferred
Transfers of Easement TEXAS
Can never be transferred unless language of easement says so.
- Exceptions: Conservation Easements (protect land in natural state, historical structures )
Use of Easements (silent presumptions)
- Perpetual (last forever unless stated otherwise)
- Use presumed is that of reasonable development of dominant estate
- Use reasonably contemplated by the parties when easement was created
- Can only be used to benefit dominant estate, not other property
- Excessive use: Remedy is to enjoin use, not terminate easement
Repair of Easement
- Holder of easement obligated to make necessary repairs (unless easement says otherwise)
- Holder of easement can always go on servient estate to repair easement, even if not stated in grant
Termination of Easement
- Unity of Ownership/Merger
- Valid Release
- Abandonment
- Termination by Estoppel
- Termination by Prescription
- End of Necessity
Termination of Easement and unity of ownership/merger
Both dominant and servient estates come together in same owner, must own in the same manner
- Once terminated it never revives unless created again
Termination of Easement and Valid Release
complies with Statute of Frauds or Deed formalities
Termination of Easement and Abandonment
Intent to abandon must be manifested, some physical act that would show intent to abandoned
- Telling someone is not enough, Nonuse no matter how long is not enough
Termination of Easement by Estoppel
2 elements:
- Must be a representation of relinquishment by holder of dominant estate
- Change of position in reliance by holder of the servient estate
Termination of Easement by Prescription
Owner of servient estate stops the use of easement, must keep it stopped for statutory period
Termination of Easement and End of Necessity
If necessity that created easement ceases to exist
Licenses
Limited privilege of use, not property interest
- Revocable at will of Licensor (may have to pay contract damages if wrongful)
Ex: Tickets
Irrevocable Licenses (Easement by Estoppel)
License plus money spent on property furthering the license, then just as good as easement, enforced under principles of estoppel
Profit Easement
Right to go onto land and take a natural resource away
Restrictive Covenants
Right to restrict someone elses use of their land
- Covenant at law or Equitable Servitude?
Covenant at law
When you want Money Damages
4 requirements for Covenant to Run With Land
1. Intent that it will run with land
2. Notice to the person again whom enforcement is sought
3. Covenants must touch and concern land
4. Privity
- Horizontal Privity: Original Parties to Covenant
- Vertical Privity: Those who subsequently obtain the property subject to the covenant and the original party from whom they got the property (take full estate)
Privity Needed to make Burden of covenant run with land
Horizontal and Vertical
- Usually Successor in Interest is Defendant
( Doesn’t apply to me)
Privity needed to make Benefit of covenant run with land
Vertical only
- Usually Successor in interest is Plaintiff
( wants to enforce covenant)
Equitable Servitude
When you want and Injunction
3 Requirements to enforce
1. Intent that restriction be enforceable by successors in interest
2. Notice to subsequent purchaser
3. Restriction must touch and concern the land
Subdivisions Covenants
Any lot owner has right to enforce
Requirements-
1. Intent to create a servitude on all the land (building plan)
2. Notice
- Actual Notice
- Record Notice: Restriction is in chain of title (records at court house)
- Inquiry Notice: Held to know anything a reasonable inquire might have revealed
Record Notice
Restriction is in chain of title (records at court house)
Inquiry Notice
Held to know anything a reasonable inquire might have revealed
Unclean Hands / Equitable Defenses to Enforcement
Plaintiff Did same thing
Acquiescence / Equitable Defenses to Enforcement
Plaintiff let neighbor on the other side do same thing
Latched /Equitable Defenses to Enforcement
Plaintiff sat by and only complained when project was finished
Estoppel / Equitable Defenses to Enforcement
Plaintiff said she did not mind before Defendant did it
Termination of Neighborhood Covenants
- By release or by unity
- Changed conditions: All or nothing, all lots must be effected to void
Adverse Possession
HELUVA Hostile Exclusive Lasting (statuary period) Uninterrupted Visible Actual Possession
Adverse Possession - Hostile
Being on property with no right to be there
Adverse Possession - Exclusive
Must be excluding other from possessing Property
Adverse Possession- Statutory Period MBE
20 years
Adverse Possession- Statutory Period Texas: Color of title with narrow specified defects
3 years
Adverse Possession- Statutory Period Texas: Trespasser
10 years, limited to 160 acres unless a larger area is fenced in
Adverse Possession- Statutory Period Texas: Color of title, paid taxes, true owner has disability
25 years
Adverse Possession- Uninterrupted
Continuous use an ordinary owner would make
- In the winter, famers wouldn’t farm
Adverse Possession- Visible
Out in the open, open and notorious
Adverse Possession - Actual
Actually posses land (exception for leasing and constructive Possession)
Constructive Adverse Possession
if someone goes onto property under a color of title to a larger tract but only actually possess a portion of the larger until, you can constructively adverse possess title to rest of property
- Property must be unitary
Adverse Possession against Concurrent Owners
Possessor excludes other co-tenants from possession and the statute runs, absence doesn’t start clock, exclusion
Adverse Possession and Life Estate plus future interest
Clock does not start to run against holder of future interest until life tenant dies
- if you Adverse Possess life estate clock starts over when they die
Adverse Possession and Fee Simple Determinable
Happening of conditions starts clock
Adverse Possession and Condition Subsequent
Won’t start until grantor exercises right
Tacking
You can tack but periods must pass directly from one adverse possessor to another, no gaps
- Can tack periods of true ownership
Disabilities and Adverse Possession, Texas
Being a minor, being in armed forces at time of war
- Max Tolling: 25 years
Disabilities and Adverse Possession MBE
Being a minor, Being in jail, Being insane
Disability and Adverse Possession
If owner under disability clock doesn’t start until it’s lifted
- If disability arises after AP, doesn’t count it’s intervening
- No tacking of disabilities
Conveyancing
- Contract of Sale
2. Deed (closing)
Contract of Sale and Statute of Frauds
any contract of sale of an interest in property must be in writing and signed by the party to be charged (who is sued)
Contract of Sale writing must contain
Description of property, name of the parties, the price
Oral Contracts for Sale of Land
Ok if part performance has occurred. Contract must be clear and certain
- Acts of part performance must clearly prove up contract
Ex: Claimant in possession and paying full purchase price
Risk of Loss and Contract for Sale MBE
Title in buyer for all practical purposes once contract is signed
- Only applies if seller is not at fault for damage or destruction
Risk of Loss and Contract for Sale Texas
Risk of loss is on person in possession
Death of seller before closing
No effect
Seller dies, seller estate closes and sellers interest is personal property
Death of buyer before closing
No Effect
Buyer dies, buyer estate closes and buyers interest is real property
Marketable Title
Implied in every land sale contract, seller give to buyer at closing
- Not perfect, reasonable person would accept, no risk of litigation
- Minor defects are ok (inch vs. foot)
3 things: Proof of title, title free of encumbrances, valid legal title day of closing
Marketable Title- Proof of Title
abstract or copy of all deeds recorded in chain of title
Marketable Title- Free of Encumbrances
Nothing that is not mentioned in contract
- No easements, restrictive covenants, options to purchase, mortgages
- Zoning: only if it’s in volition of zoning ordinance, housing/building codes ok
- Mortgage/Fines/Taxes: If they are to be paid off from proceeds of sale its ok
Marketable Title- Valide legal title day of closing
if day before it’s ok, seller has until day of closing
Remedies for Buyer for Unmarketable Title
- Buyer must notify seller of title defects, seller has reasonable time to cure even if it postpones closing
- If Buyer accepts deed without curing problems no recourse for contract, would have to sue under deed
Not Corrected: 3 remedies
1. Recession
2. Damages
3. Specific Performance: Take what seller can give and price gets lowered to reflect
Time of Performance in Land Sale Contract
Time is not of the essence unless specified
- If not of essence- performance must be tendered within a reasonable time after the date for closing set in contract (2 months ok)
- If time is of the essence: party who breached cannot enforce contract
Remedies for Breach of Sales Contract
- Specific Performance: available to buyer and seller
- Damages: Difference between contract price and value of land on day of breach
- Liquidated Damages: buyers deposit can be forfeited as long as its not more then 10% of sales price
Defects on Property
Usually buyer stuck with property (Caveat emptor)
Exceptions:
- Seller must disclose serious defects seller knows or and are not obvious to buyer
- Cannot conceal defects
- Implied warranty of Fitness/Merchantability for new homes sold by a builder-seller
Deed
Once contract accepted merges with deed and contract is destroyed. All contract provisions lost unless they are included in deed or contracted to survive
- No consideration needed for deed (unlike sale of land)
- Acceptance of deed is presumed unless facts show otherwise
To pass legal title from seller to buyer
2 requirements: Execution and Delivery of Deed
Passing Legal Title - Execution
- Deeds subject to Statute of Frauds, seller must sign
- Description of land doesn’t need to be specific but you have to be able to identify
- If not then deed is void for vagueness and nothing transfers
- Minor discrepancy is fine if property can still be located
Order of controlling descriptions in deed
Metes and bounds, Natural Monuments, Artificial Monuments, Course Measurements prevail over distance measurements, general descriptions such as name or quantity
Passing Legal Title- Delivery of Deed
Question of intent to pass title, not physical delivery
- Presumption: Recording deed raises presumption of delivery
- To show intent of grantor can use parol evidence (statements, conduct)
Conditional Delivery when Condition is in Deed
Valid delivery of futre interest
Conditional Delivery, Oral Condition
Condition ignored
Conditional Delivery, Conditioned on paying purchase price
valid if party delivers to third party in escrow with instructions (oral ok) to deliver to grantee when condition is satisfied
- Grantor can’t get deed back from escrow
Quit Claim Deed
Grantee gets whatever grantor owns, grantor promises nothing
General Warranty Deed
Grantor makes promises (6 traditional)
Present: Covenants of siesin, covenants of the right to convey, covenants against encumbrances
Future: Covenants for quite enjoyment, covenant of warranty, Covenants of further assurance
Present Covenants Grantor makes in general Warranty Deed
- Grantee can sue immediately
Covenants of Siesin/ Covenants of the Right to Convey: Represent promise of seller that seller has title and possession and can validly convey both
Covenants against Encumbrances: Grantor promises no easements, restrictive covenants, liens etc
Future Covenants Grantor makes in general warranty deed
- Not breached until grantee is disturbed in possession
Covenants for Quiet Enjoyment and Covenant of Warranty: Promise of seller that seller will protect buyer against anyone who later shows up and claims title
Covenants of Further Assurance: If seller forgets to do something to pass title, seller promises to do whatever’s necessary
Damages for breach of covenant
Limited to purchase price reseived by warrantor
Estoppel by Deed/ After-Acquired Title
If you deed property you don’t own but later get title to property, have to give proper title to person you sold it to
- Implied covenant that title would transfer to grantee
Deed to a Dead person
is invalid but can still be enforced by seller or buyers estate if new deed is made out
Recording of Interest- Common Law
First in time, First in right
Recording of Interest. Who it protects and who it doesn’t
Protects subsequent mortgagees, does not protect judgment creditors or judgement liens
Texas Recording Interest
Deed can only be recorded it it’s signed by grantor and signature is notarized or
If deed is signed by grantor and at least two witnesses
Texas Recording Interest Act
Notice
Notice Act
Protect subsequent grantees who are Bona Fide Purchasers those who give value and who take without notice of the earlier transaction
- Recording irrelevant except might give notice
Race-Notice Act
Protects subsequent grantees who are bona fide purchasers for value who take without notice and are first to record
Race Act
Notice is irrelevant, whoever records first wins, no need to be BFP
Bona Fide Purchaser
Takes for value without notice
- Value: Can be low price as long as no fraud, anything out of pocket (except $1)
- One who is heir, donee or devisee cannot be BFP, will be defeated by prior convey
Bona Fide Purchaser Shelter Rule
ANYONE can take shelter under rights of Bona Fide Purchaser
- You take from BFP you can get shelter from them
Actual Conveyance and Shelter Ryle
Even if you knew about prior conveyance, shelter rule will protect you if you take from a Bona Fide Purchaser
Record Notice and Deeds
Not enough to be recorded, needs to be in chain of title
- Title Search/ If deeds recorded outside chain of title (late/early) won’t give notice
Inquiry Notice and Deeds
Reading of deed discloses unrecorded transaction or fault
- to go out to land and if you would have examined land would have shown someone on land under unrecorded claim of right
Mortgage
Given by debtor )mortgagor) to creditor (mortgagee)
Default in Mortgage
Sheriff sells land at court-ordered foreclosure in default
Absolute Deed/ Equitable Mortgage
Separate Promise of re conveyance
Sale/Lease back with option to repurchase
Treated like a mortgage must be foreclosed on like mortgage
Deed of Trust
Given by debtor to third party trustee, holds it until paid off
- If not paid: trusee either goes to court to order sale or trustee may sell at trustess own private auction
Installment Land Contract (texas: called contract for deed)
Debtor signs contract promising to make payment and seller keeps title until loan paid off
Equity of Redemption
before foreclosure sale debtor can redeem
- Pay amount owed plus interest, unless mortgage has acceleration clause - Cannot be waived in mortgage/deed (Clogging), prohibited - Can be waived later for separate consideration
Clogging
Cannot waive equity of redemption in deed, can be waived later for separate consideration
Foreclosure has to take place at
Public Auction Sale
Mortgage Priorities
First in time, first in right (unless recording statute)
- Exceptions: Changed by contract, Purchase money mortgages (first), PMM Seller over third party lender
- If senior interest does anything in increased, lose priority to that extent
Mortgage Priorities Texas
Additional
Mechanics/Materialmens lien: protects workers and suppliers
- Related back to commencement of construction, not date of recording
- Priority over mortgages if perfected by:
-Filing with county clerk where property is located no later than 15 day of 4 calendar month after debt of indebtness,
- Affidavit must list amount of claim, names and addresses of relevant people, general statement of work done and materials furnished,
- Affidavit must give legal description of property to be liened,
- Copy of affidavit must be sent by certified or registered mail to owner within 5 days of filing
Junior Interests
Wiped out by foreclosure
- junior parties necessary parties to foreclosure
- have right to pay off mortgage to keep interest from being wiped out
- If not included interest is not wiped out
Senior Interests
run with land, purchaser takes subject to senior
Foreclosure Proceeds Order
- Cost of foreclosure (attorney fees and expenses)
- Mortgage that’s foreclosed on plus accrued interest
- Junior interest in order
- Mortgagor
- If not enough money made at sale, mortgage can sue debtor for balance due
- Difference between Debt and Sale Price
- TEXAS: Difference between debt and fair market value of property
If not enough money made at foreclosure sale what can mortgagee sue debtor for on MBE
Difference between debt and sale price
If not enough money made at foreclosure sale what can mortgagee sue debtor for on Texas
Difference between debt and fair market value of property
Texas Consequences of Installment Land Contract
Clauses enforced
- Seller cancels contract, keeps money, gets property back
TEXAS: Sellers have to give buyers detailed notice of prospective forfeiture and buyers have statutory 30 day period to cure default
MBE Consequences of Installment Land Contract
Clauses enforced
- Seller cancels contract, keeps money, gets property back
Due on Sale Clause
If mortgagor transfers without mortgagees consent, full amount due
Transfers of Security Interest (Mortgage)
Each party can transfer
- Mortgage goes along when mortgagor transfers
- Mortgagee can transfer note
Mortgagor Liability on Mortgage if Transferred
- Mortgagor is always personally liable, transferee is only if specifically assumes it
- If transferee assumes it they become primarily reliable, mortgagor becomes secondary liable
- Any modification between mortgagee and grantee discharges original mortgagor
Fixture Filing
Must be made as required within 20 days of attachment
- If filed, can be moved without regard to any earlier mortgagor or other security interest in property
Lateral Support
Support from Sides (adjoining landowners)
- Strict Liability for land and damage to improvements if weight of improvements didn’t cause the collapse (land would collapses anyway)
Subjacent Support
Support of surface from bottom (usually mineral rights)
- Strict Liability for land and improvements existing when mineral rights were severed
- Buildings after mineral rights were severed are not strict liability
- If excavator negligent Plaintiff can sue under tort principles
Riperian Water Rights
(majority) : Those whose property border on a lake/steam
- Owner can use all water needed for domestic purposes
- If use nondomestic: limited to reasonable use, act reasonably toward other owners downstream or on lake (can’t impair quality or quantity)
Prior Appropriation
(minority) : First in time takes
- First who makes beneficial use of water has right to use it and protect it from those who later come
Texas Water Rights Lakes/ Streams
Permit Regulatory System: Prior appropriation main factor and pervious use before now law can be continued
Under Ground Water
Percolating water, well water, ground water
Landowner is entitle to reasonable use of ground water
- use on own property only no export
Texas Under Ground Water Rights
English Rule of Capture, Take water from your well even if its neighbors
Limits: Can’t do it maliciously, Can’t waste the water, Can’t cause subsidence of neighbors land because of withdraw of water
Surface Water Rights Texas
Natural Flow, Reasonable steps to deal with flood water
Surface Water (runoff, flood) Natural Flow
Reasonable steps to deal with flood water
Surface Water (runoff, flood) Common Enemy
Can do Anything, reasonable or not
Texas Homestead Rural
200 acres family/ 100 acres single person
- Acres do not have to be contiguous
Texas Homestead Urban
Single lot of lots adding up to no more than 10 acres
- Must be contiguous
Debts that can force sale of Homestead
- Unpaid taxes on the property
- Loans tied to the property/ financing buying or improving
Texas Homestead Encumbrance by Husband and Wife
If owned by husband and wife neither can sell or encumber homestead without the signature of the other
Texas Homestead
business/ residence secured against claims of creditors
- Intent to have it be homestead, either occupy it or take such acts of preparation that court can conclude you were about to occupy it
