Real Property _ Ownership Flashcards
Fee Simple Absolute
Estates in Land
- 100% of ownership forever
- infinite duration
A gives B property -> FSA / absolute ownership
Life Estate
Estates in Land
- Rights and control for life
- Cannot commit waste
- “O to A for life”
- Note: Life Tenants can’t commit waste; they MUST pay interest and taxes on the property. They DO NOT have to pay the mortage (Remainderman pays mortgage)
LE creates a reversion back to grantor OR it can create a remainder.
“O to A for life” = Reversion to O after A dies
“O to A for life, then to B” = A: LE & B: remainder
Reversion
Estates in Land
Interest goes back to grantor
Interest & Taxes
Life Tenant; Estates in Land
Life Tenant MUST PAY INTEREST & TAXES
Life Estate: Who pays the mortgage?
“O to A for life, then to B”
Estates in Land
RemainderMAN!
Remainderman pays the PRINCIPAL of the mortgage;
Life Tenant pays TAXES and INTEREST of mortgage
Vested Remainder v. Contingent Remainder
Estates in Land
Vested Remainder: Automatic transfer
vs.
Contingent Remainder: Subject to an event (if it fails, goes back to grantor)
Example:
Vested Remainder:
o Jon conveys Greenacre to you for your life, then
to Bob
Contingent Remainder:
o Jon conveys Greenacre to you for your life, then
to Bob if he’s married.
So if Bob isn’t married, then it goes to Jon after “you” pass.
Vested Remainder Subject to Open/Partial
Divestmen
Estates in Land
- Refers to a class of people
- One must be alive
Example:
o Jon conveys Greenacre to you for your life, then to
Bob’s children
Vested Remainder Subject to Total
Divestment:
Estates in Land
- If a person’s interest can be wiped out
Example:
o Jon to you for your life, then to C, but if C has no
kid’s then to D
Fee Simple Determinable:
Estates in Land
- “so long as” or “as long as”
- can be terminated upon the happening of a stated event
- conditions that violate public policy are struck down (ie. penalizing marriage)
- invalid if restraint on alientation; BUT courts todal uphold validity of Rights of First Refusal
Example:
o Jon conveys Greenacre to you as long as you use it
as a museum
Fill this in for Fee Simple Absolute
Estates in Land
Fee Simple Absolute
EX: “To {Person}”
Infinite Duration
Fill this out for “FEE SIMPLE DETERMINABLE”
Estates in Land
Present Estate: Fee Simple Determinable
Example: “To David and his Heirs [‘for so long as’] / [while]/[during]/[until]*
(Need to use statements of DURATION not motive/purpose)
* Duration: As long as conditoin is met, then automaitcally goes back to grantor
* Grantor future interest: Possibility of Reverter = Reversion
* 3P Future Interest: Fee Simple Subject to Executory Interest
Possibility of Reverter:
Estates in Land
- AUTOMATICALLY reverts to grantor if
condition is not met
Fee Simple Subject to Condition Subsequent:
Estates in Land
- If a future event occurs, then grantor has
right of reentry - “but if”
Example:
o Jon conveys Greenacre to you but if the Jets ever
win the Superbowl Jon gets the property back
Right of Reentry:
Estates in Land
Grantor must act to get the land back (physically, it’s not an automatic event like reversion)
Fill this out for: Fee Simple Subject to Condition Subsequent
Estates in Land
Present Estate: Fee Simple Subject to Condition Subsequent
Example: “To David & heirs [so long as][but it][upon condition that][provided that]
*NOTE: conveyance that contains both DURATIONAL LANGUAGE and a POWER OF TERMINATOIN will likely be construed as created a FSSCS because forfeiture is OPTIONAL
Duration: Until happening of stated condition AND reentry by grantor
Grantor’s Future Interest: Right of ReEntry
3P Future Interest: Fee Simple Subject to Executory Interest
Fee Simple Subject to Executory Interest
Estates in Land
FSSEI is a fee simple estate that terminates upon the happening of a stated event and then passes to a 3P rather than reverting to grantor or giving the grantor a right to terminate; the 3P has an executory interest.
EX: FSDF & FSSCS + “to 3P”
Duration: As long as condition is met / happening of event, then to 3P
Grantor’s Future Interest: N/A
3P Future Interest: Executory Interest
RULE AGAINST PERPETUITIES
Estates in Land
Rule Against Perpetuities:
* Interest must vest within 21 years of the life in
being
Joint Tenancy
Concurrent Estates
Joint Tenancy:
* Right of Survivorship
* Trumps a will
* Conveyance SEVERS a Joint Tenancy to
a Tenancy in Common
Rule:
A joint tenancy creates a right of survivorship whereby the surviving party takes a
decedent’s interest in a piece of property. To create a joint tenancy, four unities must be
present: (1) time; (2) title; (3) interest; and (4) possession. Additionally, the instrument
conveying the joint tenancy must state the right of survivorship.
Name and Define each of the 4 unities in a joint tenancy (and also right of survivorship)
Concurrent Estates
Time
The interest must be created at the same time.
Title
The interest to the joint tenants must be conveyed in the same instrument.
Interest
The joint tenants must have the same kind of interest and the same amount of interest.
Possession
All joint tenants must have the same rights of possession.
NOTE: Joint tenants all have an equal right to possess the whole property; however, joint tenants may choose not to exercise that right.
Right of Survivorship
Finally, the instrument conveying title must state the right of survivorship.
Severance of Joint Tenancy
Concurrent Estates
A joint tenancy is severed when one of the four unities is disturbed.
A joint tenant can convey what he or she owns, not the entire estate.
A joint tenancy may be disturbed by one joint tenant executing a mortgage.
An inter vivos conveyance severs a joint
tenancy.
When a joint tenant conveys his or her interest to another individual, the individual takes the property as a tenant in common.
Severance of Joint Tenancy
Lien Theory (Majority) v Title Theory (Minority)
Concurrent Estates
In a lien theory jurisdiction, a mortgage does not sever a joint tenancy because the mortgage is viewed as a lien, rather than a title transfer.
In a title theory jurisdiction, a mortgage severs a joint tenancy because once the mortgage is executed, title passes from the mortgagor to the mortgagee despite title returning to the mortgagor when the mortgage is satisfied.
Severence of Joinder
Contract of Sale
Concurrent Estates
A contract of sale severs a joint tenancy on the date the contract is entered into because of the doctrine of equitable conversion.
Tenancy in Common
Concurrent Estates
NO Right of Survivorship
* no unities are required except possession,
* each co-tenant is entitled to possess the whole of the property, and
* there is no right of survivorship.
Tenancy by the Entirety
Concurrent Estates
- Joint Tenancy between married people
- 4 Unities + Unity of Marriage + Right of Survivorship
- No conveyance without consent
- Severed by divorce
RULE
* A tenancy by the entirety grants a right of survivorship, no right of partition, and cannot be severed by the unilateral act of one co-tenant.
* A tenancy by the entirety terminates by death, mutual agreement in writing, divorce, and execution by a joint creditor.
Actions Against Co-Tenants
List What Actions Can Be Taken
Concurrent Estates
- Partition
- Accounting
- Reimbursement & Contribution
Actions Against Co-Tenants
Partition:
Concurrent Estates
- Court divides property in two
- Granted unless not practical
RULE:
A co-tenant may seek partition to be relieved of the burden of co-ownership. In a partition action, the parties may agree to physically split the land (partition in kind) or sell the land and divide the profits (partition sale).
Actions Against Co-Tenants
Accounting
Concurrent Estates
- Each co-tenant has the right to possess the entire property, similar to other co-tenants.
- Co-tenants are not responsible for paying rent to each other.
- No need for accounting for personal use of the property.
- Accounting required if a co-tenant leases the property to a third party.
- A co-tenant can recover costs based on their percentage ownership of the property.
Contribution – Taxes & Mortgage
Concurrent Estates
- Co-tenant: May seek contribution
- Sole possessor: Only recover amount that
exceeds market value
Contribution – Rent:
Concurrent Estates
- Out of possession co-tenant may SHARE in RENT & PROFITS
- BUT not from a tenant in possession
- UNLESS they are damaging the property
Contribution – Repairs & Improvements:
Concurrent Estates
- No contribution for REPAIRS, unless necessary & requested
- No contribution for IMPROVEMENTS, unless increase rents/profits
Reimbursement & Contribution
Concurrent Estates
- A co-tenant does not have a right to reimbursement by other co-tenants, even when the repairs are necessary.
- However, in a majority of jurisdictions, contribution for necessary repairs can be compelled in an action for accounting or contribution.
- In a minority of
jurisdictions, a co-tenant has a right to recover contribution so long as the other co-tenant was notified of the need for repairs.
What are the Types of Leases / LL-T estates (4)
Landlord-Tenant
There are four landlord-tenant estates: (1) tenancy for years, (2) periodic tenancy, (3) tenancy at will, and (4) tenancy at sufferance.
Periodic Tenancy:
Landlord-Tenant
- (Start date) – (A period of time)
- Renews unless a termination date
- Notice required to terminate
- Created by (1) express agreement, (2) implication (lease doesn’t specify how long tenancy is to last, so it’s measure by when rent is paid), or (3) operation of law (oral lease violates the statute of frauds or a landlord accepts rent from a holdover tenant who then has a periodic tenancy for the period the rent covers
Termination of Periodic Tenancy
Landlord-Tenant
A periodic tenancy may be terminated by proper notice, which requires a sufficient amount of time equal to the period of the tenancy except for tenancies of year-to-year,
which require only six months’ notice. The termination is effective at the end of the period of the tenancy (e.g., if a monthly periodic tenancy started on January 7th, it
terminates on February 6th).
Tenancy for Years
Landlord-Tenant
- (Start date) – (An end date)
- NO notice required
RULE: A tenancy for years is a leasehold estate that specifies the beginning and ending date. (if it’s over 1 year, has to comply with SOF)
Tenancy at Will:
Landlord-Tenant
- Terminable at will
- Reasonable amount of time to terminate
RULE: To terminate the tenancy either party need only give the other notice of termination and a reasonable
time to vacate. A tenancy at will may also terminate by operation of law when (a) a party dies, (b) a tenant commits waste, (c) assignment by a tenant, (d) transfer of title by the landlord, or (e) the landlord leases the premises to a third party.
Tenancy at Sufferance:
Landlord-Tenant
- Holdover Tenant
- Terminates by leaving or eviction
RULE: A tenancy at sufferance is created when a tenant possesses property after the termination of a lease. When a tenant holds over, the landlord may (a) file an eviction
action and sue for trespass to recover damages, (b) impose a new periodic tenancy, or (c) where a landlord raises rent and gives notice of the increase in rent before the expiration of the lease, the landlord may demand payment of the higher rent amount if the tenant holds over.
Exception to Hold Over Doctrine
Landlord-Tenant
A court will not apply the hold over doctrine if the tenant remains in possession for only a few hours after termination or leaves a few articles of personal property, the delay is
not the tenant’s fault, or it is a seasonal lease.
Landlord Duties:
Landlord-Tenant
- Actual possession
- Duty for basic repairs
- Duty to Deliver Possession
- Duty Not to Disciminate
- Warranty of Habitability
- Warranty of Quiet Enjoyment
Implied Warranty of Habitability
Landlord-Tenant
Implied Warranty of Habitability: Exists in all residential property leases, requiring landlords to maintain premises suitable for human habitation.
Notice of Breach: Tenant must inform the landlord of a potential violation and allow reasonable time for repair before seeking remedies.
Remedies for Breach: Options include (1) moving out and ending the lease, (2) staying and suing for damages, or (3) making repairs and deducting costs from future rent.
Covenant of Quiet Enjoyment + How Can LL Breach this Covenant?
Landlord-Tenant
Every lease includes this, ensuring the landlord will not interfere with the tenant’s peaceful use of the premises.A landlord may breach via total eviction,* partial eviction, or constructive evictio *
Total Eviction: Occurs when the landlord physically removes the tenant from the premises.
Partial Eviction: Happens when the tenant is excluded from a part of the property. If caused by the landlord, the tenant may stay without paying rent. If caused by a third party with higher title, rent is reduced proportionally to the area lost.
Constructive Eviction: Occurs when the landlord substantially interferes with the tenant’s use and enjoyment of the property. The tenant’s duty to pay rent is waived if they give notice and leave within a reasonable time after a constructive eviction.
Tenant Duties:
Landlord-Tenant
- Duty to Pay Rent
- Not use the premises for an illegal purpose
- Cannot commit waste
- Maintain the premises
Tenant Duties - WASTE (3)
Landlord-Tenant
A tenant has a duty to not commit waste. Waste can be permissive or voluntary.
Voluntary Waste: Occurs when a tenant intentionally or negligently damages the property, reducing its value.
Permissive Waste: Happens when a tenant fails to reasonably protect the property.
Ameliorative Waste: Involves a tenant making alterations that increase the property’s value. The tenant is usually liable for restoration costs, but long-term tenants may not be liable if changes reflect neighborhood evolution
Tenant Duties - Maintain Premises
Landlord-Tenant
- Under common law, the tenant must not commit waste if the lease is silent on maintenance.
- In modern majority law, if the property is destroyed without the tenant’s fault, they may terminate the lease.
- If a lease includes a tenant’s covenant to repair, the tenant is liable for all repairs, including ordinary wear and tear, unless otherwise stated.
- Tenants are not responsible for rebuilding a destroyed structure if they are not at fault, even if the lease has a repair covenant.
Landlord’s Remedies for Tenant’s Breach
- Failure to Pay Rent
Landlord-Tenant
Common Law: Landlord could sue for damages but only collect the amount in arrears (money owed); lease termination was not allowed.
Modern Majority: Landlord can sue for damages and also has the right to terminate the lease
Landlord’s Remedies for Tenant’s Breach
- Tenant Unjustifiably Abandons
Landlord-Tenant
If Tenant Unjustifiably Abandons:
(a) Landlord may accept abandonment, retake the premises, and terminate the lease, releasing the tenant from further rent obligations.
(b) Landlord may relet the premises and hold the abandoning tenant liable for any rental deficiency.
Under Common Law:
If landlord relets, there’s no duty to mitigate damages; landlord could leave property vacant and hold tenant responsible for rent.
Under Modern Majority:
Landlord has a duty to mitigate and must make reasonable efforts to re-let the property to mitigate the tenant’s damages
Assignment
Landlord-Tenant / Assignment & Sublease
- Assign the rest of the lease term
- New tenant primarily liable
- Original tenant secondarily liable unless novation
Sublease
Landlord-Tenant / Assignment & Sublease
- Give away a portion of lease
- Original tenant liable unless novation
Covenants Against Assignment or Sublease
Landlord-Tenant / Assignment & Sublease
- Strictly Construed
Clauses barring or restricting assignment or sublease are fully enforceable; however, such covenants are strictly construed against the landlord. If a tenant assigns or subleases in violation of the covenant, the transfer is not void; however, the landlord may terminate the lease and sue for damages.
Assignment/Sublease Waiver
Landlord-Tenant / Assignment & Sublease
Waiver of Covenant Against Assignment or Sublease:
Occurs when a landlord, aware of an assignment or sublease, does not object.
Effect of Waiver:
* The landlord waives the covenant for future transfers as well.
* However, the landlord can retain the right for future instances by expressly reserving it.
Fair Housing Act:
Landlord-Tenant
- Federal law prohibits discrimination in sale/ rental
- Race, color, religion, sex, disability, family status, pregnancy
FIXTURES
Landlord-Tenant
- Chattel affixed to property
- Removal would cause damage
Definition of a Fixture: A chattel that becomes part of real property due to its attachment to land. A fixture is transferred with the land’s ownership.
Tenant’s Right to Remove Chattels:
Without a specific agreement, a tenant can remove annexed chattels if it doesn’t substantially harm the premises or destroy the chattel.
Factors for Court Consideration in Absence of Agreement:
* Degree of Attachment: The more effort to attach an item, the more likely it is considered a fixture.
* General Custom: Courts look at whether such chattels are typically taken by sellers or tenants when leaving.
* Degree of Harm from Detachment: If removal causes no substantial damage, it suggests no intent for the item to be a fixture.
* Trade Fixture: These are used in a trade or business and can generally be removed.
CONFLICT OF LAWS
General Rule + Exceptions
General Rule:
* Generally, law of the state where property is located will apply
Exceptions:
* Choice of law clause
* Collateral issues use local law
