RP - Missed MBE Questions

Question 1

Purchase Money Mortgages: Priority

Answer 1

PMM arise when a seller of property receives a mortgage as part of the purchase price or when a third party lends money to the buyer for the purchase of property and takes a mortgage in return.

Seller’s PMM generally takes priority over third party’s. However, PMM are subject to later liens by virtue of recording acts.

Where a mortgage is modified by agreement between the parties, any increase in the debt will be subject to a junior lien, even if the original mortgage had priority.

Question 2

If an occupier initially has the true owner’s permission to enter the land, may she acquire title to the land by adverse possession?

Answer 2

Yes, if the occupier subsequently communicates hostility

Question 3

Covenant of Warranty

Answer 3

Future covenant for title.

Grantor agrees to defend grantee’s title from any third party’s lawful or reasonable claims of title and to compensate grantee for any related loss.

Question 4

What must a deed generally contain in order to be valid?

Answer 4

Identification of the land

The grantor’s words of intent (“grant”)

Grantor’s signature

Question 5

A recording act provides “Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.” is a:

Answer 5

Notice Statute

Recording provides constructive notice

If it said “unless the conveyance is first recorded” it would be a race-notice statute

Question 6

May a buyer obtain specific performance of an oral land sale contract?

Answer 6

Yes, if the buyer has done 2 of the following:

1. Taken possession of the land
2. Made substantial improvements to the land
3. Paid all or part of the purchase price

Question 7

When a seller of land dies before the contract closes:

Answer 7

Successors to the land must give up legal title at closing

Under doctrine of equitable conversion, the buyer of land is considered to own the property once the contract is signed. They already have equitable title, successors are merely handing over legal title.

Question 8

Which of the following would not make title to land unmarketable?

Answer 8

The existence of a mortgage on which the SoL has run.

(Things that would: Evidence that a prior grantor lacked capacity to convey the property, a significant variation in the description of property from one deed to the next, the defective execution of a prior deed in the chain of title, or any other defect that subjects buyer to unreasonable risk of litigation)

Question 9

Theories that allow mortgagee to take possession of the mortgaged property upon the mortgagor’s default:

Answer 9

1. Title Theory - Legal title is i nthe morgagee until the mortgage has been satisfied or foreclosed, thus the mortgagee is entitled to possession upon demand at any time
2. Intermediate Theory - Legal title transfers from mortgagor to mortgagee on default

(contrast with Lien Theory: Mortgagee is deemed to hold a security interest in the land and the mortgagor is considered the owner until foreclosure)

Question 10

Under the doctrine of constructive eviction, if a landlord’s breach renders the premises unsuitable for occupancy, the tenant may:

Answer 10

Vacate the premises, terminate the lease, and sue for damages

Question 11

Which interests in property are subject to RAP?

Answer 11

Contingent remainders, executory interests, and vested remainders subject to open

Question 12

When will a real covenant run to successors?

Answer 12

Burden of a real covenant will run to successors in interest if:

1. Covenanting parties intended that successors in interest be bound by the covenant;
2. The successor in interest has notice of the covenant;
3. The covenant touches and concerns the land

Benefit of a real covenant will run to successors in interest if:

1. The covenanting parties intended that successors in interest benefited by the covenant
2. There is vertical privity between the covenantee and successor in interest
3. Covenant touches and concerns the land

Question 13

Under the doctrine of constructive eviction, if the landlord’s breach of duty renders the premises unsuitable for occupancy, the tenant may:

Answer 13

Vacate the premises, terminate the lease, and sue for damages

Question 14

Who is liable to T if L1 assigns his interests in a property to L2, then a superior title holder evicts T?

Answer 14

Both L1 and L2 are liable for performance of all covenants made by the original landlord in the lease, provided those covenants run with the land.

Ouster violates covenant of quiet enjoyment.

Question 15

Surcharged

Answer 15

Describes when an easement’s legal scope was exceeded

Question 16

Easement Implied by Operation of Law (Quasi-easement)

Answer 16

An easement may be implied if, prior to the time the tract is divided, a use exists on the “servient part” that is reasonably necessary for the enjoyment of the “dominant part” and a court determines that the parties intended the use to continue after division of the property

Question 17

Easement Types

Answer 17

First, express easements require a writing under the SoF

1. Easement by Necessity - Created when the owner of land sells part of it and deprives the part sold of access to a public road
2. Easement by Prescription - cannot be permissive
3. Easement Appurtenant - An easement to facilitate the use and enjoyment of the dominant estate. Passes with transfers of land, regardless of whether the easement is mentioned in the conveyance.

Question 18

Doctrine of Reciprocal Negative Servitudes

Answer 18

Binds all the parcels in a subdivision to an implied negative covenant or equitable servitude when some deeds in a subdivision contain negative covenants but some do not. 2 Requirements:

1. A common scheme for development
2. Notice of the covenants (actual, record, or inquiry)

Question 19

If buyer of land determines that seller’s title is unmarketable:

Answer 19

Every land sale contract contains an implied covenant that the seller will provide marketable title.

Buyer must give seller a reasonable time to cure (even if this requires extending the closing date and even if time is of the essence).

If the seller fails to cure, buyer may rescind the contract, sue for damages for breach, get specific performance with abatement of the purchase price, or require seller to quiet title.

Question 20

Doctrine of Equitable Conversion

Answer 20

States that the buyer holds equitable title in the real property as of the date the contract is signed.

Applicable as against buyer and seller, but does not affect the right of third parties.

Question 21

When may consecutive adverse possessors tack their time?

Answer 21

When there is privity between them

Question 22

If an adverse possessor uses land in violation of a recorded real covenant for the limitations period, she;

Answer 22

Takes title free of the real covenant, even if she had knowledge of it

Question 23

Must a junior mortgagee be named as a party to a senior mortgagee’s foreclosure action?

Answer 23

Yes, because it has the right to pay off the senior mortgage to avoid being wiped out by foreclosure

Foreclosure destroys interests (e.g., liens, mortgages, leases, easements) junior to the mortgage being foreclosed.

Failure to join the junior mortgagee results in the preservation of its interest despite foreclosure in sale.

In contrast, those with interests senior to that of the foreclosing party are not necessary parties because their interests are not affected by foreclosure. The buyer at the sale takes subject to senior interests, which remain tied to the land

Question 24

The Statutory Right of Redemption

Answer 24

The right of the mortgagor to recover the land after the foreclosure sale has occurred, usually by paying the foreclosure sale price.

About half of states provide a statutory right to redeem for some fixed period after the foreclosure sale has occurred–usually six months to a year.

Contrast with equitable redemption, which is the right of the mortgagor to recover the land by paying the amount overdue on the mortgage, plus interest, at any time before the foreclosure sale. (or the full balance if the mortgagor has defaulted and the note contained an acceleration clause)

Question 25

Order of priority for foreclosure sale proceeds:

Answer 25

1. Expenses of the sale, including attorney’s fees
2. The principal and accrued interest on the foreclosing party’s loan
3. Any junior lienors in the order of their priority
4. The mortgagor

Senior liens remain on the property, so senior lienors not entitled to any proceeds of the sale

Question 26

Who is not protected by notice and race-notice acts?

Answer 26

Donees, heirs, and devisees.

Notice and race-acts protect BFPs. These groups did not purchase the land and are therefore not protected.

Question 27

Does a grantor’s use of a quitclaim deed provide purchaser with inquiry notice?

Answer 27

No