Real Property Distinctions

Question 1

Fee Simple Detreminable

Answer 1

Limited by specific durational language, terminates automatically.

Question 2

Possibility of Reverter

Answer 2

Interest remaining in grantor following a fee simple determinable.

Not subject to RAP.

Question 3

Fee Simple Subject to Condition Subsequent

Answer 3

Grantor reserves the right to terminate the estate with conditional language.

Requires re-entry.

Question 4

Right of reentry

Answer 4

Interest remaining in grantor following a fee simple subject to condition subsequent.

Not subject to RAP and transferable.

Question 5

fee simple subject to executory interest

Answer 5

Fee simple limited by durational or conditional language where the future interest is with a third party

Question 6

executory interest

Answer 6

interest held by the third party following a fee simple subject to executory interest

Question 7

Life tenant’s rights and duties

Answer 7

• right to possess
• right to collect rents/profits, lease or mortgage (must pay taxes on income or rental value of land)
• Duty not to commit waste

Question 8

Kinds of waste

Answer 8

1) Affirmative
2) Permissive
3) Ameliorative

Question 9

Ameliorative waste

Answer 9

A change in use of the property increases its value but changes its character. Permitted when a substantial and permanent change in the neighborhood makes it necessary in order to continue reasonable use of the property, so long as the property value is not diminished.

Question 10

Reversion

Answer 10

Future interest in grantor following a life estate.

Question 11

Remainder

Answer 11

Future interest in a third party following a life estate, subject to RAP.

Question 12

Vested remainder

Answer 12

Not subject to any conditions precedent PLUS an ascertainable grantee

Question 13

Vested subject to open

Answer 13

Vested in at least one member of the class, but the class is not closed.

Question 14

Rule of convenience

Answer 14

Closes the class when any class member is entitled to immediate possession.

Question 15

Shifting executory interest

Answer 15

Estate shifts from one grantee to another.

Question 16

Springing executory interest

Answer 16

Estate shifts from grantor to a third party upon the occurrence of an event.

Question 17

Rule Against Perpetuities

Answer 17

Future interests only valid if the must vest or fail by the end of a life in being plus 21 years.

Applies to:

• Contingent remainders
• Vested remainders subject to open
• Executory interests,
• Powers of appointment
• ROFR
• Options

Does not apply to charitable trusts.

Question 18

Joint Tenancy Unities

Answer 18

Four:

(1) Possession
(2) Interest (must be identical)
(3) Time
(4) Title

In TX, no automatic right of survivorship

Question 19

Rights and Duties of Co-Tenants

Answer 19

• Liable to other co-tenants for third-party rents

- Can collect contribution for operating expenses, but not for repairs or improvements

Question 20

Types of tenancies

Answer 20

1) Tenancy for years (any fixed period of time)
2) Periodic tenancy (may occur with a holdover tenant)
3) Tenancy at will
4) Tenancy at sufferance (holdover tenant)

Question 21

Termination of a Periodic Tenancy

Answer 21

For month-to-month, terminates on the later of the day given in the notice or one month after the notice.

For less than one month, terminates the day given in the notice or the day following the expiration period, whichever is later.

Question 22

Changing the locks

Answer 22

With a commercial lease, a written notice must be placed on the front door. For a residential lease, the right must be provided on the lease, and the landlord has to give the tenant the new key upon demand.

Question 23

Eviction Notice

Answer 23

Must provide at least 3 days notice.

Question 24

Security Deposit

Answer 24

Residential landlord must return the security deposit within 30 days after the tenant surrenders premises, less damages or charges.

Question 25

Anticipatory Breach

Answer 25

1) Maintain lease and sue for rent as it becomes due
2) Repossess, sue for present value of future rentals minus reasonable cash market value of property for the remainder of the term
3) Repossess, release the property, sue tenant for the difference
4) If lease permits, declare it forfeited and relieve tenant of liability for future lease

Question 26

Warranty of habitability

Answer 26

Residential. Premises must be fit for basic human habitation.

Question 27

Breach of the warranty of habitability

Answer 27

Tenant must notify landlord and give a reasonable time to repair, and tenant may refuse to pay rent and make reasonable repairs or seek damages.

In TX, the landlord must make a diligent effort to repair the condition if (1) tenant gives notice, (2) tenant is not delinquent when notice is given and (3) the condition materially affects the health and safety of an ordinary tenant

Question 28

Covenant of quiet enjoyment

Answer 28

Tenant has a right to quiet use and enjoyment of the premises without interference from landlord. Landlord has a duty to control other tenants’ nuisance in common areas.

Question 29

Kinds of Eviction

Answer 29

1) Actual
2) Partial
3) Constructive
4) Retaliatory

Question 30

Tort Liability of Landlord

Answer 30

Modern trend - general duty of reasonable care and liability for defects existing prior to tenant’s occupancy, failure to make required repairs and criminal activities of third parties who injure tenants.

Question 31

Attornment

Answer 31

Tenant’s acknowledgment of a new landlord. Usually arises in residential leases upon payment of rent to assignee, but formal acknowledgment may be required in commercial leases.

Question 32

Assignment Limitation in Texas

Answer 32

Tenant may not assign or sublet without the prior consent of landlord.

Question 33

Statute of Frauds Exception

Answer 33

• Part performance - buyer takes possession of the land, buyer remits all or part of the purchase price and/or buyer makes substantial improvements (requires at least two)
• Full performance
• Detrimental reliance
• Admission

Question 34

Implied warranty of fitness

Answer 34

Only for new homes - requires disclosure of known material physical defects not readily observable/known to buyer.

Implied warranty of good and workmanlike construction cannot be disclaimed.

Implied warranty of habitability waived if buyer has knowledge of latent defects

Question 35

Liquidated Damages

Answer 35

LDs of no more than 10% have been found to be reasonable.

Question 36

Uniform Vendor and Purchaser Risk Act

Answer 36

• If property is destroyed or uninhabitable before tile or possession passes, the seller cannot enforce the contract and the buyer can recover any portion of the price paid.
• If title had passed, buyer must pay the contract price.

Question 37

Adverse Possession

Answer 37

1) Continuous/uninterrupted for statute of limitations
2) Actual (open and notorious)
3) Hostile
4) Exclusive

Question 38

Statute of limitations for adverse possession

Answer 38

25 years, except:

• 10 years if 160 acres or less and the claimant has cultivated crops or otherwise enjoyed the property
• 5 years if claimant has paid taxes, is claiming under deed, and has cultivated, used or enjoyed the property
• 3 years if tile or color of title seems irregular or was improperly recorded

Question 39

Valid deed requirements

Answer 39

1) identified parties
2) grantor’s signature
3) words of transfer
4) reasonably definite property description (extrinsic evidence admissible)

Question 40

Strips and gores doctrine

Answer 40

When the deed conveys land abutting a street, public highway, or railroad right-of-way, title to the center of the street or public highway, or railroad right-of-way passes by the deed.

Question 41

Recording requirements

Answer 41

1) Signed by grantor
2) in the presence of two or more subscribing witnesses or before and certified by an officer authorized to take acknowledgments or oaths

Question 42

Priority against subsequent purchasers for value

Answer 42

Pure notice in TX

Question 43

Kinds of notice

Answer 43

1) Actual
2) Inquiry (reasonable investigation)
3) Constructive (properly recorded in chain of title)

Question 44

Types of deeds

Answer 44

1) General warranty
2) Special warranty
3) Quitclaim

Question 45

Warranties in General Warranty Deed

Answer 45

Present covenants:

1) Seisin - grantor owns land as described in deed
2) Right to convey
3) Against encumbrances - no undeclared encumbrance

Future covenants:

1) Quiet enjoyment
2) Warranty - Grantor to defend against third party’s claim
3) Further assurances - Grantor to do whatever future acts reasonably necessary to pass title perfectly

Question 46

Texas protection of residences in mortgages

Answer 46

When the buyer of land to be used as a residence is in default after paying at least 40% of the amount due, or the equivalent of 48 monthly payments, seller may sell the buyer’s interest but may not enforce rescission or forfeiture and acceleration.

Question 47

Methods of foreclosure

Answer 47

1) Judicially supervised sale;
2) Private sale
3) Strict foreclosure
4) Nonjudicial foreclosure if a power-of-sale clause exists

Question 48

Statute of limitations for deficiency judgment

Answer 48

Action to recover deficiency must be brought within 2 years

Question 49

Kinds of easements

Answer 49

1) Express
2) Implied by necessity
3) Implied by implication
4) Prescription (adverse possession, 10 years)
5) Estoppel

Question 50

Transfer of easement

Answer 50

• Easement appurtenant - benefit transfers automatically with dominant estate
• Easement in gross - personal and not transferable unless expressly provided for in the instrument.

Question 51

Termination of easements

Answer 51

1) Release in writing
2) Merger into title
3) Severance
4) Abandonment
5) Destruction/condemnation

Question 52

Covenants running with the land

Answer 52

1) Writing
2) Intent
3) Touch/concern
4) Notice (for the burden to run)
5) Privity (horizontal for the burden to run and vertical)

Question 53

Equitable Servitudes

Answer 53

Intent for restriction to be enforceable by and against successors

• Touch/concern (no privity required)
• Notice (actual, constructive or inquiry)

Question 54

Water rights

Answer 54

In Texas, prior appropriation, but landowner owns groundwater.

Question 55

Lateral support rights

Answer 55

Undeveloped - strictly liable to adjoining land.
Improvements - Strictly liable only if adjoining land would have collapsed in its undeveloped state, otherwise negligence-based.

Question 56

Subjacent Support

Answer 56

Owner of the mineral rights is strictly liable to support the land and any buildings that were there there at the time of conveyance.

Question 57

Texas homestead

Answer 57

Rural - no more than 200 acres for a family, 100 for an individual

Urban - Not more than 10 acres and property in city limits and served by municipality (fire, police, three utilities)

Question 58

Nonjudicial foreclosure

Answer 58

For residential property, a notice of default must be served by certified mail and provide at least 20 days to cure the default before notice of sale will be given.

• After the 20 days’ notice, notice of the sale must be filed with the county clerk, posted on the courthouse door, and served on the debtor by certified mail at least 21 days before the sale date.
• Equity of redemption - The seller must notify a purchaser who is in default their right to cure the debt and allow the purchaser at least 60 days to do so.