Real Property Essay Rules

Question 1

Merger - If a buyer permits the closing to occur, the contract is said to

Answer 1

Merge with the deed and, in the absence of fraud, the seller is no longer liable on the implied covenant of marketable title

And other promises in the K

Question 2

T/F Marketable title - There is an implied covenant in every land sale contract that at closing the seller will provide the buyer with a title that is marketable

Marketable title is title free from doubt (i.e. title that a reasonably prudent buyer would be willing to accept). It need not be a “perfect” title, but the title must be free from questions that might present an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title

Answer 2

True

Question 3

T/F There is an implied covenant in every land sale K that at closing the seller will provide the buyer with a title that is marketable

Answer 3

True

Question 4

T/F Marketable title is title free from doubt (i.e. title that a reasonably prudent buyer would be willing to accept)

Answer 4

True

Question 5

T/F Marketable title need not be a “perfect” title, but the title must be free from questions that might present an unreasonable risk of litigation

Generally, this means an encumbered fee simple with good record title

Answer 5

True

Question 6

Marketable title is title

Answer 6

Free from doubt (i.e. title that a reasonably prudent buyer is willing to accept)

Question 7

Title that is free from doubt is

Answer 7

Title that a reasonably prudent buyer would be willing to accept

It need not be a “perfect” title, but the title must be free from questions that might present an unreasonable risk of litigation

Generally, this means an unencumbered fee simple with good record title

Question 8

In VA, provisions which are collateral to the passage of title and not covered by the deed are ________ and ________

Answer 8

Not merged into the deed; survive execution

Question 9

Agreements are considered collateral to the sale if they are

Answer 9

1) Distinct agreements made in connection with the sale of property

2) If they do not affect the property

3) If they are not addressed in the deed, and

4) If they do not conflict with the deed

Question 10

A closing statement is NOT

Answer 10

A deed

Question 11

A mutual mistake is generally

Answer 11

A mistaken assumption shared by both parties

Question 12

A mutual mistake is generally a mistaken assumption shared by both parties

When both parties entering into a contract are mistaken about existing facts relating to the agreement, the contract may be voidable by the adversely affected party if:

Answer 12

1) The mistake concerns a basic assumption on which the contract is made

2) The mistake has a material effect on the agreed upon exchange; and

3) The party seeking avoidance did not assume the risk of the mistake

[Both parties agreed that they would each share the property taxes, but the closing statement failed to account for this. Since a closing statement allocates costs between the parties, the failure to correctly allocate property taxes concerns a basic assumption on which it was made, and has a material effect on the amounts owed. The party seeking avoidance - Brian - did not assume the risk of a msitake as to payment of taxes]

Question 13

Deed delivery - A deed is not effective to transfer an interest in real property unless it has been delivered

Delivery refers to the grantor’s intent; it is satisfied by words or conduct evidencing the grantor’s intention that the deed have some present operative effect, that is, that title pass immediately and irrevocably

If the grantor executes and delivers a deed but the deed is not recorded, title still passes

Answer 13

True

Question 14

A deed is not effective to transfer an interest in real property unless

Answer 14

It has been delivered

Question 15

Delivery (of deed) refers to

Answer 15

The grantor’s intent; it is satisfied by words or conduct evidencing the grantor’s intention that the deed have some present operative effect, that is, that title pass immediately and irrevocably (even though the right of possession may be postponed until some future time)

[Here, Brian paid the purchase price and accepted delivery of a properly executed warranty deed from Owen. Thus, the deed for Lot 2 was delivered. It does not matter that the deed was not recorded]

Question 16

Delivery of a deed is presumed if a deed is

Answer 16

Recorded

Question 17

[AA’s signature not needed for deed to be valid]

T/F Transfer of title by deed can be accomplished by a deed that satisfies various formalities required by statute

The SOF requires that a deed be in writing and identify the land and the parties

A deed must be signed by the grantor

The grantee’s signature is not necessary

Answer 17

True

[Here, a deed of gift Dr. Jones was in writing (as evidenced by the fact that it was read, signed, and mailed), identified the Danville property by name, and stated the names of the grantee (AA) and grantor (Dr. Jones)]

Dr. Jones signed the deed of gift which is all that is required; the signature of the grantee, AA, was not necessary

Thus, the deed satisfied the requisite formalities]

Question 18

T/F Delivery of deed

A deed is not effective to transfer an interest in realty unless it has been delivered

Delivery refers to the grantor’s intent; it is satisfied by words or conduct evidencing the grantor’s intention that the deed have some present operative effect, meaning that title should pass immediately and irrevocably, even though the right of possession may be postponed until some future time

Acceptance of a deed is presumed if the conveyance is beneficial to the grantee

In any event, delivery is presumed if a deed is recorded

Answer 18

True

Question 19

Transfer of title by deed can be accomplished by a deed that satisfies

Answer 19

Various formalities required by statute

Question 20

SOF requires that a deed be

Answer 20

In writing and identify the land and the parties

Question 21

A deed must be signed by

Answer 21

The grantor

Question 22

The grantee’s signature in a deed is

Answer 22

Not necessary

Question 23

Acceptance of a deed is presumed if

Answer 23

The conveyance is beneficial to the grantee

Question 24

Acceptance of a deed is presumed if ________, or ________

Answer 24

Conveyance is beneficial; deed is recorded

Question 25

If the grantor executes and delivers a deed but the deed is not recorded,

Answer 25

Title still passes

Question 26

In VA, when a deed contains the words "with English covenants of title," this is deemed to include the covenants of ________, ________, ________, and ________, as well as that

Answer 26

Right to convey, for quiet enjoyment, against encumbrances, and for further assurance; the grantor has done no act to encumber the property

Question 27

Once closing occurs, remedies must be pursued

Answer 27

Under the deed

Question 28

The covenant of the right to convey is breached ________ if ________

Answer 28

At the time of conveyance; the grantor is not the owner of the interest she purports to convey

Question 29

The covenant for quiet enjoyment is breached when ________

Answer 29

The grantee is disturbed in her possession or enjoyment of the property by a third party's lawful claim of title

Question 30

Zoning ordinances ________ a claim to title or disturbance by a paramount title holder

Answer 30

Are not

Question 31

The covenant against encumbrances is breached, if ever, ________

Answer 31

At time of conveyance the property is encumbered

Question 32

T/F Encumbrances can be visible and physical (e.g., an easement) or invisible and an encumbrance on title (e.g., mortgage or a lien)

Answer 32

True

Question 33

The covenant for further assurances is a promise to

Answer 33

Perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect

Question 34

Unlike the covenant of right to convey and against encumbrances, the covenant for quiet enjoyment and further assurances are not breached until

Answer 34

A third party interferes with the **possession** of the grantee or her successors

Question 35

A **disturbance of the covenantee's possession** is not required as a prerequisite to recovery for breach of covenants of ________, ________, or ________

Answer 35

Seisin, right to convey, or against encumbrances

Question 36

While any disturbance of possession suffices to constitute a breach, a disturbance entails, for example,

Answer 36

The covenantee **not being able to obtain complete possession** or having to **pay off an adverse, paramount claim** in order to obtain possession

Question 37

T/F A **nonbreaching** party may seek specific performance if a legal remedy is inadequate Specific performance is always available for land sale Ks bc land is considered to be unique

Answer 37

True [Seller has breached the k themselves and therefore, specific performance will not be available as a remedy]

Question 38

A **nonbreaching** party may seek specific performance if

Answer 38

A legal remedy is inadequate

Question 39

Specific performance is ________ available for land sale contracts because land is considered to be

Answer 39

Always; unique

Question 40

If a seller breaches the contract themselves, ________ will not be available as a remedy

Answer 40

Specific performance

Question 41

If buyer determines that seller's title is unmarketable, they must

Answer 41

Notify the seller and **give reasonable time to cure the defects**

Question 42

Remedy if title **not marketable** - If the seller fails to cure the defects, the buyer may

Answer 42

Rescind, sue for damages, or get specific performance The seller, however, cannot sue successfully for damages or specific performance [Here, purchaser brought the issue to Seller around the end of December and asked for a cure int he form of a release by Travis. Seller did not secure the release within the next two weeks leading up to the closing, or agree to Purchaser's condition at closing Since Seller failed to provide marketable title at closing after a reasonable time to cure a notified defect, they cannot then successfully sue for specific performance of the K]

Question 43

Breach of "Present Condition" Provision The K between Seller and Purchaser also contained a provision that Seller would convey to Purchaser the house "in its present condition" [Purchaser may argue that the fact that a person entered the house and ripped out the plumbing breached this provision, since the house was no longer in the condition it was at the signing of the k at the time of closing

Answer 43

True

Question 44

A **buyer's typical remedy** for breach of the sales contract

Answer 44

Damages measured by the differences between the contract price and the market value of the land on the date of the breach [As such, Purchaser was within their rights to ask Seller to deduct $12,500 from the purchase price due to the missing plumbing, since this was the amount it would cost Purchaser to replace the plumbing and bring the house back to the condition it was at the time of the K] [Seller could also replace the plumbing themselves and preserve the original K price]

Question 45

Sales contracts usually require a buyer to deposit ________ and provide that if the buyer defaults in performance,

Answer 45

"Earnest money"; the seller may **retain this money as liquidated damages** [Seller breached the k by failing to provide marketable title and the house in the condition it was at the time of the K] [Since Purchase has not defaulted, Seller cannot keep Purchaser's deposit] [Seller's wrongdoing here may also further mean that the awarding of specific performance is unlikely]

Question 46

To be enforceable, a land contract must be

Answer 46

Memorialized in a writing that is signed by the party to be charged

Question 47

SOF for a land sale K requires that the writing contain all essential terms of the contract such as

Answer 47

1) Description of the property 2) Identification of the parties, and 3) Price and manner of payment

Question 48

Part performance (land)

Answer 48

1) Possession, 2) Improvements, 3) Payment [Purchaser's repairs to the greenhouse (in reliance on the K) were also made with Seller's knowledge and consent, so it would result in hardship and fraud upon Purchaser if the contract were not specifically enforced and Seller were allowed to unjustly benefit from these improvements]

Question 49

T/F Purchaser's repairs to the greenhouse (in reliance on the K) were also made with Seller's knowledge and consent, so it would result in hardship and fraud upon Purchaser if the K were not specifically enforced and the Seller were allowed to unjustly benefit from these improvements [Thus, it is likely that Purchaser will prevail in their counterclaim for specific performance of the Greenhouse Tract]

Answer 49

True

Question 50

Title to real property may be acquired by

Answer 50

Adverse possession (15 years)

Question 51

Adverse possession

Answer 51

1) An actual entry giving exclusive possession that is 2) Open and notorious 3) Adverse (hostile), and 4) Continuous

Question 52

Joint tenancy is a form of

Answer 52

Concurrent ownership between two or more co-tenants

Question 53

Joint tenancy distinguishing feature

Answer 53

Right of survivorship which means, when one co-tenant dies, the property is freed from their interest and the survivor retains an undivided right in the property

Question 54

In VA, the right of survivorship must be

Answer 54

Expressly specified. Without it, the grant is of a tenancy in common

Question 55

T/F Life estate is an estate that is not terminable at any fixed or computable period of time, but cannot last longer than the life or lives of one or more persons. The usual life estate is measured by the life of the grantee The usual life estate is measured by the life of the grantee

Answer 55

True

Question 56

Life estate

Answer 56

Estate that is **not terminable at any fixed or computable period of time**, but cannot last longer than the life or lives of one or more persons. The usual life estate is measured by the life of the grantee

Question 57

The usual life estate is measured by

Answer 57

The life of the grantee

Question 58

T/F Remainder is **a future interest created in a transferee** that is capable of taking in present possession and enjoyment upon the natural termination of the preceding estates created in the same disposition Remainders always follow life estates An indefeasibly vested remainder is one that can be created and held only by an ascertained person; must be certain to become possessory on termination of the prior estates; must not be subject to being defeated or divested; and must not be subject to being diminished in size

Answer 58

True

Question 59

Remainder

Answer 59

**A future interest created in a transferee** that is capable of taking in present possession and enjoyment upon the natural termination of the preceding estates created in the same disposition

Question 60

Remainders always follow

Answer 60

Life estates

Question 61

Indefeasibly vested remainder

Answer 61

One that can be created and held only by an ascertained person; must be certain to become possessory on termination of the prior estates; must not be subject to being defeated or divested; and must not be subject to being diminished in size

Question 62

An indefeasibly vested remainder is ________, ________, ________

Answer 62

Transferable, descendible, and devisable

Question 63

FSD

Answer 63

Estate that **automatically terminates** on the happening of a stated event and goes back to the grantor

Question 64

FSD is created by

Answer 64

The use of **durational language** such as "for so long as," "while," "during," or "until"

Question 65

Possibility of reverter

Answer 65

The interest that is left in a grantor who conveys an estate in FSD is a possibility of reverter. This future interest arises automatically in the grantor as a consequence of their conveying a FSD

Question 66

Deed of trust

Answer 66

In the deed of trust typically used in VA, legal title to the property is conveyed to a trustee and the debtor retains the equitable right to repay the indebtedness secured by the trust and obtain the property upon full payment. The deed of trust expressly provides for an out-of-court sale by the trustee subject to certain statutory safeguards [Here, five years ago, Lucas gave Roscoe a deed of trust conveying all of his right, title, and interest in Tract 4. At that time, Lucas's interest in the property was a remainder. However, as discussed above, his interest has since ripened into full possession after John and Ken's deaths Roscoe has the right to sell the property 30 days from today due to Lucas's default However, Lucas also has the equitable right to repay the indebtedness prior to the sale Thus, Lucas's indebtedness to Roscoe, then Copper Creek will obtain the land free of any interests If Lucas does not sell Tract 4 prior to Roscoe's foreclosure sale, then the buyer at the sale will acquire Tract 4 and Lucas will no longer have any interest in the property]

Question 67

Easement

Answer 67

An easement holder has the right to use another's tract of land for a special purpose (e.g., to access a road), but has no right to possess that land

Question 68

An easement is appurtenant when it

Answer 68

Benefits the holder in her physical use or enjoyment of another tract

Question 69

For an easement to be appurtenant, there must be two tracts:

Answer 69

The dominant tenement (the estate benefitted by the easement, and the servient tenement (the estate subject to the easement right)

Question 70

An express easement may be created by

Answer 70

A valid conveyance that complies with the formal requisites of a deed

Question 71

An easement is presumed to be of perpetual duration unless

Answer 71

The grantor limits the interest

Question 72

If the grantor executes and delivers the deed, but fails to record it,

Answer 72

Title still passes

Question 73

Consideration is not required to

Answer 73

Make a deed valid

Question 74

Under the race-notice statute, a subsequent bona fide purchaser prevails over the prior grantee who failed to record if

Answer 74

The subsequent purchaser had no actual or constructive notice at the time of the conveyance, and the subsequent grantee records first

Question 75

BFP

Answer 75

1) Purchaser 2) Without notice 3) Valuable consideration

Question 76

A general warranty deed is one in which the grantor

Answer 76

Covenants against title defects created by **himself and all prior titleholders**

Question 77

There are ________ "English covenants" contained in the general warranty deed

Answer 77

6

Question 78

The words "with English covenants of title" in the granting part of a deed are deemed to be an expression by the grantor of these covenants

Answer 78

1) Covenant of seisin 2) Covenant of right to convey 3) Covenant against encumbrances 4) Covenant of quiet enjoyment 5) Covenant of warranty 6) Covenant for further assurances

Question 79

A license to use real property may be granted ________, and is ________

Answer 79

Orally; freely revocable

Question 80

A license to real property may be granted orally, and is freely revocable. It will defeat a claim of title by adverse possession because the possession was not

Answer 80

Adverse or hostile to the rights of the owner

Question 81

Where all the requirements of adverse possession are met except that the possessor actually had the owner's possession to possess & use the real property, the possessor is presumed to have

Answer 81

A revocable license

Question 82

Where members of a condo association have misused common areas of the property, in violation of association rules and to the detriment of other members, who has standing to sue?

Answer 82

Only the association itself

Question 83

A unit owners' association shall have standing to sue in its own name for

Answer 83

Any claims related to the common areas of the property

Question 84

Only a condominium unit association, not ________, has standing to sue for ________

Answer 84

An individual owner; misuse of common areas

Question 85

The SOL for an action to recover personal property that has been adversely possessed is

Answer 85

5 years

Question 86

Is tacking permitted for an action to recover **personal property** that has been adversely possessed?

Answer 86

Yes

Question 87

While the statutory period for adverse possession of real property is ______ years, the statutory period for adverse possession of personal property is _______ years

Answer 87

15; 5

Question 88

Where a possessor is **in possession with the oral permission** of the record owner, he has

Answer 88

A revocable license

Question 89

A mortgage assumption clause is not

Answer 89

A suretyship promise

Question 90

Under the SOF, certain agreements such as a promise creating an interest in land (including mortgages and other security liens) must be evidence by

Answer 90

A writing signed by the party sought to be bound

Question 91

Suretyship promise

Answer 91

A promise to answer for the debt or default of another

Question 92

A suretyship promise must be evidenced by

Answer 92

A writing

Question 93

A suretyship promise must be ________, and not

Answer 93

Collateral; a primary promise to pay

Question 94

If a mortgagor sells a property and conveys a deed, the grantee takes

Answer 94

Subject to the mortgage, which remains on the land

Question 95

If the grantee **assumes** a mortgage (meaning they promise to pay the mortgage loan), they

Answer 95

Become primarily liable to the lender, while the original mortgagor becomes secondarily liable as a surety

Question 96

An assumption makes the grantee

Answer 96

Primarily liable to the lender; the original mortgagor becomes the surety

Question 97

By assuming the mortgage, the grantee is not answering for the debt of the original mortgagor but rather, they are making

Answer 97

A primary promise to pay

Question 98

A grantee who accepts a deed becomes

Answer 98

Contractually bound by its provisions, and becomes liable to perform any promise or undertaking imposed by the deed on the grantee, including a promise to assume an existing mortgage

Question 99

Parol evidence rule

Answer 99

Generally, where the parties to a contract express their agreement in a writing with the intent that it embody the final expression of their bargain, the writing is an integration. Any other expressions, written or oral, made prior to or contemporaneous with the writing are inadmissible to vary the terms of the writing

Question 100

Parol evidence may be admissible if the alleged parole evidences goes to

Answer 100

The agreement's validity (for example, the agreement was never formed or there was a condition precedent to its effectiveness or to an obligation collateral to the written agreement (meaning, related to the subject matter but not part of the primary promise)) [Conflicts]

Question 101

Unilateral mistake

Answer 101

If only one of the parties is mistaken about facts relating to the agreement, the mistake will not prevent formation of a contract. However, if the nonmistaken party knew or had reason to know of the mistake by the other party, the contract is voidable by the mistaken party. As with mutual mistake, for the contract to be voidable, the mistake must have a material effect on the agreed-upon exchange and the mistaken party must not have borne the risk of the mistake

Question 102

Generally, the presence of a lien renders title unmarketable unless

Answer 102

The buyer waives it

Question 103

In the absence of contractual stipulation to the contrary, if title is not marketable, the seller cannot

Answer 103

Sue successfully for damages or specific performance

Question 104

Doctrine of equitable conversion

Answer 104

Once a K is signed and each party is entitled to specific performance, equity regards the purchaser as the owner of the real property

Question 105

Risk of loss

Answer 105

If the property is destroyed without fault of either party before the date set for closing, because the buyer is deemed the owner of the property, the risk of loss is on the buyer. Thus the buyer must pay the contract price, unless the contract provides otherwise

Question 106

If acts done by a party in reliance on the contract would result in hardship to such an extent that it would be fraud on that party were the contract not specifically enforced, the other party may be

Answer 106

Estopped from asserting the SOF as a defense

Question 107

A ________ or ________ has a right to judicial partition, either ________ or ________

Answer 107

Joint tenant; tenant in common; in kind (physical division of property); or by sale and division of the proceeds

Question 108

What type of partition is favored?

Answer 108

Partition in kind (physical division of property)

Question 109

Partition in kind

Answer 109

Physical division of property

Question 110

T/F After a judge decides partition by forced sale is appropriate and a co-tenant wants to keep the property, the court is authorized to establish a FMV for the property and permit the owner to purchase the interest of the other owner[s]

Answer 110

True

Question 111

Although partition in kind is generally preferred, partition by sale and division of proceeds is permitted when

Answer 111

A fair and equitable physical division of the property cannot be made

Question 112

T/F In divorce cases, the courts hold that, where the parties cannot reach an agreement regarding the disposition of their marital property, it is proper for the trial court to order the partition by sale of such property

Answer 112

True

Question 113

In VA, property held by the entirety is liable for the joint debts of both spouses, but the property is immune from

Answer 113

The claims of creditors against either spouse alone

Question 114

An effort on the part of one spouse, acting alone, to create a lien against entirety property creates

Answer 114

No lien at all

Question 115

Upon divorce, property held in tenancy by the entirety becomes

Answer 115

A tenancy in common

Question 116

After-acquired title

Answer 116

A codification of the equitable doctrine of estoppel by deed, operates to prevent the grantor from denying that title has actually passed to the grantee

Question 117

Proceeds are distributed

Answer 117

In order of priority

Question 118

If proceeds are insufficient to satisfy the mortgage debt, the mortgagee retains

Answer 118

A personal cause of action against the mortgagor for this deficiency

Question 119

T/F Where a grantor conveys land by deed describing it as bounded by a road or street, the fee of which is vested in the grantor, he implies that such way exists and that the grantee acquires benefit of it

Answer 119

True

Question 120

Title presumed to extend to center of right-of-way

Answer 120

If land is described as being bounded by a street, highway, or other right-of-way, or if the land conveyed is otherwise described but actually is bounded by such, there is a rebuttal presumption that the title of the grantee extends to the center of the right-of-way (assuming that the grantor owns to the center)

Question 121

Ordinarily, an oral agreement to sell real estate would not be enforceable because

Answer 121

It would violate the SOF

Question 122

Breach of contract damages

Answer 122

Purchase price - market price

Question 123

T/F The law does not contemplate dividing a home in half because that would be impractical

Answer 123

True

Question 124

T/F A tenant in common or joint tenant "who places improvements upon common property at his own expense is entitled to compensation in the event of partition

Answer 124

True

Question 125

With a general warranty deed, the grantor covenants

Answer 125

Against title defects that either he or his predecessors created

Question 126

The English Covenants of Title include

Answer 126

1) Seisin [absent] 2) Right to convey 3) Quiet enjoyment 4) Further assurances 5) No encumbrances

Question 127

A general warranty deed is one in which the grantor covenants against

Answer 127

Title defects created by himself and all prior titleholders

Question 128

Covenant of seisin

Answer 128

Owns Blackacre

Question 129

Covenant of right to convey

Answer 129

Power to transfer

Question 130

Covenant against encumbrances

Answer 130

No servitudes (easements, profits, etc.)

Question 131

Covenant for quiet enjoyment

Answer 131

Grantee will not be disturbed in possession or enjoyment of property by a third party's lawful claim of title

Question 132

Covenant of warranty

Answer 132

Grantor promises to defend against reasonable claims of title by third party and compensate for any loss

Question 133

Covenant for further assurances

Answer 133

Grantor will perform whatever acts are reasonably necessary to perfect title if it later turns out to be imperfect

Question 134

A general warranty deed and the English Covenants of Title guarantee against defects ________, not ________

Answer 134

In title; defects in the condition of the property

Question 135

An action for ejectment generally must be brought within

Answer 135

15 years of the accrual of the right to bring this action

Question 136

A lease of real property for any period of time is considered

Answer 136

Personal property