Real Property - Ownership & Rights in Land Flashcards
Rule Against Perpetuities (RAP)
“no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest”
- Contingent Remainders/Class Gift
- Options to Purchase (Fee Options)
- Powers of Appointment
- Executory Interests
- Rights of First Refusal
License
Revocable personal privilege to enter servient tenement of licensor w/o liability for trespass.
Easements in Gross
- No dominant tenement
2. Do not run w/ land
Easements Appurtenant
- 2 parcels – Benefitted- dominant, Burdened- servient
2. Do run w/ land
Easement Creation
- Expressly in writing- grantor to grantee
- Necessity- landlocked, but allow judge to decide
- Implication- reflect practices & customs of property
- Prescription- adversely possessed (no exclusivity)
Easement Termination
- Written release
- End of necessity
- Abandonment – Requires intent & physical act
- Merger – unity of ownership
- Government body acquires servient estate through exercise of eminent domain power
Covenant
A K in which covenantor makes a promise to covenantee to do or not do some action tied to the use of land. A covenant running w/ the land, imposes duties or restrictions upon the use of that land regardless of owner. Plaintiff seeks $ damages. Ct of Law.
Restraint on Alienation
A restriction prohibiting the recipient from selling or
otherwise transferring his interest in property. Such restraints are void as against public policy of
allowing landowners to freely dispose of their property.
Valid Restrictions on Alienation
- Prohibition against partition of property for a limited time
-Rt of 1st refusal - A sells property to B, A may require that if B later decides to sell the property, she must 1st give A the opportunity to buy it back.
General Rule: any direct restraint on a fee simple is invalid (only estates less than fees may be subject to restraints upon their alienation) (words of inheritance create fee simple)
Joint Tenancy
Concurrent Estate
1. 4 unities – time, title, interest, possession
2. Has rt of survivorship – estate passes to survivor
Traditional required language: “to A & B as joint tenants & not as tenants in common, w/ full rt of survivorship”
Tenants by the Entirities
Concurrent Estate
- Reserved for husband & wife
- 5th unity - person
Tenancy In Common
Unity of Possession Only - each tenant has a rt to the whole of the property. No rt of survivorship. TiC may transfer her interest inter vivos voluntarily through a conveyance, lease, mortgage, or other transfer of present possessory or future property interest; or involuntarily through foreclosure on a mortgage of tenant’s interest or an execution of a judgment creditor’s lien on tenant’s interest in the property.
Joint Tenancy Becomes Tenancy in Common
Severance:
- Conveyance Inter Vivos
- Death of one of two remaining JTs
- Mortgage under title theory
- Final partition action
Fee Simple Absolute
Largest possible estate in land. Unimpeded right to:
1) sell or convey all or part of the property
2) devise property (may last in perpetuity)
Fee Simple Determinable
Estate that terminates automatically on the happening of a named future event. Described using words: for so long as, during, while, until, as long as, or unless. Is created in 1 clause and w/ a limitation built into that 1 clause.
Ownership of a fee interest, even a defeasible fee, includes the rt to exploit the mineral resources of the land (life estate would be subject to doctrine of waste).
Estate Subject to a Condition Subsequent
May be cut short if the estate is retaken by grantor or a 3rd party on the happening of a named future event. Described using words: provided, however, however if, but if, on condition that, or in the event that. Is created in 2 separate clauses and w/ a condition stated in the 2nd clause.
Fee Simple Subject to an Executory Interest
Estate that is automatically divested in favor of a 3rd person on the happening of a named event. Followed by a shifting executory interest. Subject to RAP.
Life Estate
Lasts for the duration of grantee’s life. Possessor has right to possess, use and enjoy property but can’t do anything that adversely affects future interests that follow - such acts are called “waste”.
Voluntary waste - prohibited
Ameliorative waste - allowed under modern law.
Life tenant has duty to maintain property in a reasonable state of repair, ordinary wear and tear excepted. Duty limited to extent of income derived or, if she personally occupies premises, to the extent of the reasonable rental value of the land.
Voluntary Waste
Prohibited, but natural resources may be consumed: for the repair and maintenance of the property; w/ permission of grantor or under open mines doctrine. Applies to both life tenants and tenants for years.
Ameliorative Waste
When act of life tenant increases value of premises by permanently altering them. Can do under modern law if market value of remainderman’s interest isn’t impaired and is either permitted by the remainderman or a substantial and permanent change in the neighborhood has deprived the property of a reasonable current value.
Reversion
Future Interest. Retained by grantor when grantor transfers less than a fee interest to a 3rd person. Majority Rule: transferable, devisable, descendible, and not subject to the Rule Against Perpetuities.
Possibility of Reverter
Future Interest. Grantor that follows a determinable estate.
TX: right of reverter is both assignable and devisable
Right of entry (power of termination)
Future Interest. Held by grantor that follows an estate subject to a condition subsequent.
TX: right of entry after a condition subsequent has been broken if fully alienable/transferable
Remainder
Future Interest. Created in 3rd party, intended to take after natural termination of preceding estate.
Vested Remainder
Requires takers be ascertainable or ascertained at time remainder created. Must fall in automatically at natural termination of previous estate ie. no conditions precedent to taking. Is transferable, descendible, and devisable. Not subject to RAP.
Remainder Vested Subject to Open/Vested Subject to Partial Divestment
Remainder made to a class (my children) and has at least 1 ascertainable member and has satisfied any conditions precedent to vesting, but may have other members join the class later. Subject to RAP.
Vested Remainder Subject to Total Divestment
Is presently vested but may be terminated on the happening of a future event.
Contingent Remainder
If takers are unascertainable or the interest is subject to a condition precedent, and therefore doesn’t fall in automatically on natural termination of previous estate. Subject to RAP.
Common Law Rule of Destructibility of Contingent Remainders
Contingent remainder in real property can be destroyed by:
1) if it fails to vest by the natural termination of the prior vested estate
2) if merger occurs
3) if holder of present possessory estate surrenders her interest before contingent remainder vests.
TX: has abolished Rule, if contingent remainder has not vested at natural termination of prior vested estate, contingent remainder will become an executory interest, subject to RAP
Executory Interest
Future Interest in a 3rd person that can’t become possessory automatically at natural termination of previous estate because it cuts off previous estate (shifting); or it doesn’t become presently possessory until some time after natural termination of previous estate (springing)
Future Interests
In Grantor: Possibility of Reverter, Right to Entry, Springing Executory Interest, Reversion
In 3rd Party: Shifting Executory Interest, Contingent (subject to RAP) or Vested Remainder
Difference b/w JT & TiC in TX (Title Theory State vs. Lien Theory State)
Title Theory: execution of a mortgage by 1 JT causes legal interest to transfer to mortgagee.
Lien Theory: Mortgagee only receives a lien on property, therefore no severance b/c unities intact.
Absent agreement conferring right of survivorship, death of any party to a multiple-party account has no effect on beneficial ownership of account other than to transfer rights of decedent as part of his estate. Survivorship agreement will not be inferred from mere fact account is a joint account. B/c no right of survivorship , JTs aren’t recognized in TX. Instead, holders share as TiC.
Title Theory State
When the execution of a mortgage causes the legal interest to be transferred to the mortgagee. Right to rents and profits.
Lien Theory State
On execution of a mortgage, mortgagee receives only a lien on the property.
Statute of Frauds for Sale of Real Property
Requires:
1) writing
2) signed by the party to be charged
3) include essential terms: description of the property, description of the parties, price, and any conditions of price or payment if agreed on
- Doctrine of part performance may be used to enforce an otherwise invalid oral K for sale, provided acts unequivocally prove existence of K (TX requires showing payment, taking possession, and valuable improvements made by purchaser).
Marketable Title
Title free and clear from reasonable doubt on matters of law or fact, such that a prudent man, advised of facts and legal significance, would willingly accept.
TX: no marketable if clouded by any outstanding K, covenant, interest, lien, or mortgage sufficient to form basis of litigation, or if exposes holder to a reasonable probability of litigation w/ the least chance of defeat.
Title Not Reasonably Free from Doubt if has which defects?`
1) Defects in chain of title: adverse possession, defective execution of a deed, or significant variation of description of land from 1 deed to the next
2) Encumbrances: a right or interest that another person has in real property that diminishes the value of the property but is consistent w/ the conveyance of a fee interest in the property (mortgages, liens, easements, covenants, servitudes)
3) Encroachments: significant = unmarketable; slight (ex: boundary overlap of only several inches) not unmarketable if owner says she will not rely on encroachment as a basis for suit
4) Zoning Violation (Zoning Restrictions DO NOT make unmarketable)
5) Physical Defects: do not make unmarketable
Equitable Conversion
Purchaser becomes equitable owner of title of home at time of execution of binding K
Passage of Property at Death
If seller dies after execution of K for sale, but before closing, legal title passes to his heirs and devisees. They much honor sales agreement, and purchase $ passes as personalty.
If buyer dies after execution of K for sale, but before closing, party that takes decedent’s realty may demand a closing and exoneration of liens from personal estate of decedent.
Merger
Modern Trend: Merger doesn’t apply to matters that’re collateral to or not mentioned in deed.
Traditional: covenants in K for sale merge into deed at closing.
General Warranty Deed
Seller warrants that no title defects have occurred during her ownership. Warrants there are no defects in chain of title from which she derived title.
Special Warranty Deed
Seller warrants no title defects have occurred during his ownership. Doesn’t warrant that there are no defects in chain of title from which he derived.
Statutory Special Warranty Deeds
(TX has adopted) Expressly state which covenants are implied in a conveyance.
TX: unless conveyance expressly provides otherwise, use of “grant” or “convey” in a conveyance implies grantor & his heirs covenants only that:
1) prior to execution, grantor hasn’t conveyed estate, or any interest in estate, to a person other than grantee; &
2) at time of execution of conveyance, estate is free from encumbrances.
Quitclaim Deed
Seller makes no warranties. Grantor conveying whatever interest she may have.
TX: may still contain warranties but conveys no more than the interest of grantor, rather than property
Future Covenants
May be broken after time of conveyance. Run w/ the land.
1) Quiet Enjoyment - grantor warrants grantee will not be disturbed by superior claim
2) Warranty - grantor guarantees she’ll assist in defending title against lawful claims & will compensate grantee for losses sustained by assertion of superior title (virtually identical to quiet enjoyment)
3) Further Assurances - grantor promises to take whatever steps may be required to perfect defects of title (TX: generally subsumed in covenants for quiet enjoyment & warranty)
Remedies for Breach of Covenant by Grantor
- monetary recovery generally capped at amount grantor/D received for property (plus interest)
- breach of seisin, rt to convey, general warranty, & quiet enjoyment, grantee may recover full purchase price (if conveyance voided) or a % (if portion of conveyance voided)
- breach of covenant against encumbrances, damages measured by cost of removing defect, if removal possible, or diminution of value in property, if can’t be removed
- in some jurisdictions, atty’s fees may also be recovered for breach of future covenants if grantee loses property to lawful superior claim
- some states (including TX) permit grantee to recover damages from a remote grantor to extent consideration received by remote grantor from his immediate grantee, even if remote grantee paid her immediate grantor less for property
Requirements for Effective Transfer of Real Property Deed
- Donative Intent
- Delivery (physical act or mere words)
- Acceptance
Presumptive Delivery if:
1) deed found later in grantee’s possession
2) deed properly executed and recorded, or
3) deed contains attestation clause attesting to delivery
Recording
Recordation of deed no required to validate transfer of title.
TX: deed may be recorded if it has been acknowledged or sworn to w/ a person authorized by law to do so. Deed may also be recorded if signed & acknowledged or sworn to by grantor in presence of 2 or more credible W’s
Common Law: Property awarded to person who took property 1st in time. Applies if person who took later fails to qualify under relevant recording statute.
Race Recording Statute
Person who records 1st wins
Notice Recording Statute
To Prevail, Claimant must:
1) take later than another claiming ownership
2) BFP for value
3) take property w/o actual, constructive, or inquiry notice
Race-Notice Recording Statute
To Prevail, Claimant must:
1) take later than another claiming ownership
2) BFP for value
3) take property w/o actual, constructive, or inquiry notice, and
4) record 1st
Constructive or Record Notice
Exists if the other person’s deed is recorded in the proper place in the record books
Inquiry Notice
Exists if appearance of property is such that claimant should have asked more questions about title to property
Easement
An interest in land. SoF generally requires a writing to create an easement.
Easement Implied by Prior Use Requirements
Affirmative Easement
1) severance of title to land held in common ownership
2) existing, apparent, & continuous use when severance occurs (quasi-easement); &
3) parties intended use to continue after division of land since use is reasonable necessity for enjoyment of dominant part at time of severance
Easement by Prescription (Necessity) Requirements
Affirmative Easement
Proof of the use of property is:
1) open
2) notorious
3) actual
4) continuous (TX = 10 yrs)
5) hostile
6) exclusive
For Covenant to Run w/ the Land Requirements
1) writing
2) intent
3) privity
4) touch & concern
5) notice
Equitable Servitude (Restrictive Covenant)
Ct may enforce if: plaintiff can establish at law all elements for a covenant that runs w/ the land but plaintiff seeks equitable relief; or plaintiff can’t establish at law all the elements but can demonstrate relaxed requirements of equitable servitude. Plaintiff seeking to enjoin non-conforming use. Ct of Equity (as opposed to Ct of Law)
Implied Reciprocal Servitude
If the owner of 2 or more lots, so situated as to bear the relation, sells 1 w/ restrictions of benefit to the land retained, servitude becomes mutual, & owner of lot/lots retained can’t do anything forbidden to owner of lot sold.
Differences b/w Covenants & Equitable Servitudes
Covenant: Plaintiff seeks $ damages, breach of K, Ct of Law
Equitable Servitude: Plaintiff seeks to enjoin non-conforming use, Ct of Equity
Profit-a-Prendre
Similar to an easement, non-possessory interest in land. Holder of profit entitled to enter upon servient tenement & take the substance of the land subject to the privilege. Can be appurtenant or in gross. (a profit is an interest in land vs. a license isn’t)
