Rule Statements Flashcards
1
Q
What is a “bundle of rights”?
A
We have the right to:
1. Lease, sale, trade, gift, devise, descend
2. Use
3. Mortgage
4. Invite onto the property
5. Exclude
6. Distribute to others partial rights and/or access
2
Q
What is acquisition by capture?
A
Mere pursuit is insufficient to establish a title in a wild animal. Killing or capturing is necessary
3
Q
What are the elements for acquisition by gift?
A
- Intent
- Delivery
- Acceptance
4
Q
Under acquisition by gift, what is intent?
A
The donor must intend to give the irrevocable gift.
(No reservation for return - no backsies)
5
Q
Under acquisition by gift, what is delivery?
A
The donor must transfer possession to the donee with the manifested intention to make the gift
6
Q
Under acquisition by gift, what are the three types of delivery?
A
- Manual/actual delivery
- Constructive delivery
- Symbolic delivery
7
Q
Under acquisition by gift, what is manual/actual delivery?
A
Handing over the gift
8
Q
Under acquisition by gift, what is constructive delivery?
A
Hands over the keys to the car that is not present. Keys to the house (life estate)
9
Q
Under acquisition by gift, what is symbolic delivery?
A
Physically transfers an object that represents or symbolizes the gift such as deed to property or pink slip to auto
10
Q
Under acquisition by gift, what is acceptance?
A
Generally, specific rejection is required. (Acceptance is presumed)
Gifts can be rejected or disclaimed (think inheritance)
11
Q
What is adverse possession?
A
Allows a party to gain title to land upon which they were originally trespassing by meeting the requirements
12
Q
What are the elements of adverse possession?
A
“ROACH”
1. Running of the statute;
2. Open and notorious use;
3. Actual and exclusive possession of the land (excluding owner);
4. Continuous possession (based on normal use); and
5. Hostility (w/o permission);
Can be hostile w/o knowledge or intent
13
Q
Under adverse possession, what is running of the statute?
A
It is when the adverse possessor must remain in possession for a specific period of time, as set by the statute
14
Q
Under adverse possession, what is open and notorious?
A
Trespasser must “act like an owner” when occupying the property, and their actions must be obvious to any observer
15
Q
Under adverse possession, what is active and exclusive?
A
Active means actual possession trespasser is actively using the property the same way an owner would.
Exclusive means the trespasser does not share control of the property, and excludes others from possession acting as if they were the actual owner, exercising their right to exclude
16
Q
Under adverse possession, what is continuous?
A
Trespass must be uninterpreted for the entire duration of the running of the statute. “Seasonal exceptions may apply”; “typical use”
17
Q
Under adverse possession, what is hostile?
A
Hostile means the occupation of the property infringes on the rights of the true owner
18
Q
What is tacking?
A
Tacking is the legal doctrine in adverse possession that allows one adverse possessor to pass his/her time accrued onto a subsequent adverse possessor. This requires privity of estate or privity of contract
19
Q
What is privity of estate?
A
Privity of estate allows that if an adverse possessor shares property with a subsequent party on the land, that tacking can be applied.
20
Q
What is privity of contract?
A
Privity of contract allows that if an adverse possessor creates a contractual relationship related to the land, that the other party to the contract can tack their time onto the original adverse possessor
21
Q
What is the effect of disability on adverse possession?
A
The time period required to gain title by adverse possession is tolled when the true owner of the real property suffers from (1) infancy, (2) imprisonment, or (3) incapacity if that disability was present when the adverse possession began
22
Q
What are the four estates in land (feudal interests)?
A
- Fee Simple Absolute
- Fee Tail
- Defeasible Fees
- Life Estate
23
Q
What is a fee simple absolute?
A
A fee simple absolute is the complete ownership in land of potentially infinite duration. It is alienable, devisable, and descendible.
24
Q
What is a fee tail?
A
A conveyance that limits future conveyances to bloodline heirs (it cannot be sold)
“to A and the heirs of his body”
25
What is a reversion?
A future interest a grantor leaves himself after initially passing possessory interest in land to another for their life. This possessory interest reverts back to the grantor. (i.e., O to A for life. Creates reversion after A’s life)
26
What is a remainder?
When a person initially passes possessory interest in land to another for their life, and then leaves a remainder to someone else. Remainder means left over. (i.e., O to A for life, then to B. Remainder is left to B)
27
What is a life estate?
A life estate passes the possessory interest in land to another for their life, and then leaves a remainder to someone else or creates a reversion.
May lease or sell their interest, person leasing or buying the life estate must exercise the same responsibilities as a life tenant.
28
What are the responsibilities of life tenants?
Life tenants are liable for interest on mortgage (not principal), taxes, insurance, repairs, and maintenance. The must not commit waste
29
What are the three forms of waste?
1. Affirmative waste
2. Permissive waste
3. Ameliorative waste
30
What is affirmative waste?
When life tenants commit intentional damage to the land (i.e., cutting down trees or knocking structures down)
31
What is permissive waste?
When life tenants cause damage to the property by negligence (i.e., life tenant failed to repair roof causing water damage)
32
What is ameliorative waste?
When life tenants make a substantial change in the property even if it increases the value. (i.e., tore out a seasonal strawberry patch to build a parking lot leased to Walmart which made millions)
33
What is a life estate pur autre vie?
A life estate for the tenure of the life of another person
34
What is a defeasible estate?
Defeasible means that the estate can be terminated based on a condition set in the conveyance
35
Are defeasible fees alienable, descendable, and deviseable?
YES
36
What is alienation?
The legal right to convey property (sell, trade, give away . . .)
37
What are the three types of defeasible estates?
1. Fee simple determinable
2. Fee simple subject to a condition subsequent
3. Fee simple subject to an executory limitation
38
What is a fee simple determinable?
Type of defeasible fee created when an estate has been granted that may be indefinite but could be terminated upon the occurrence, or non-occurrence, of a specified event stated in the conveyance. If the specified event occurs, the estate will automatically revert back to the grantee under the "possibility of reverter". Uses durational language such as: "so long as," "during," and "while"
39
What is a possibility of reverter?
A future interest a grantor leaves to her/himself when a fee simple determinable is conveyed. This future interest is automatic and immediate
40
What is a fee simple subject to a condition subsequent?
The conveyance grants the property to another but sets a condition, that if the condition occurs, returns the property to the grantor through a right of re-entry which much be enforced. Uses conditional language such as: “but if,” “on the condition that,” and “unless”
41
What is the right of re-entry?
A remedy used in a fee simple subject to condition subsequent which gives the grantor a right of re-entry which must be enforced. (also called right of entry or power of termination)
The conveyance will set a condition, which if the condition occurs, the right of re-entry is allowed.
42
What is a fee simple subject to executory limitation?
This creates a defeasible much like a fee simple determinable, but there is no reversionary right in the grantor. Upon breach, this estate automatically passes to a third-party (executory interest). Uses conditional language such as: “but if,” “on the condition that,” and “unless.”
43
What are restraints on alienation?
Absolute restraints on alienation are void as a matter of law.
Partial restraints may be valid under the circumstances
44
What is a future interest?
A future interest is a presently owned interest in land in regard to which the right to possession is delayed until some time in the future
45
What are the six types of future interests?
1. Reversion
2. Possibility of Reverter
3. Right of Re-entry
4. Vested Remainder
5. Contingent Remainder
6. Executory Interest
46
What are the differences between the six future interests?
The first three, (reversion, possibility of reverter, and right of re-entry) are future interests in grantors.
The last three, (vested remainder, contingent remainder, and executory interest) are future interests in grantees
47
What are the three future interests that can only be created in the grantor?
These are considered reversionary interests.
Reversionary interests are always considered VESTED.
48
When does a remainder occur?
A remainder occurs after the natural expiration of the previous estate
49
What are the two types of remainders?
1. Vested remainder
2. Contingent remainder
50
What is a vested remainder?
A vested remainder is a remainder (1) in an ascertained person AND (2) there are no conditions to the taking by the remainderman
51
What is contingent remainder?
A contingent remainder occurs when (1) the beneficiary is unascertained, OR (2) there is a condition that must be met for the remainder interest to be conveyed
52
What is an executory interest?
An executory interest takes effect only if a previous estate was terminated. The holder of the executory interest divests the previous holder of the estate
53
What is a vested remainder subject to open?
A remainder is subject to open (or vested subject to partial divestment) if later-born children are entitled to share in the gift.
O conveys "to A for life, then to A's children who shall reach 21." A's oldest child, B is 17. B subsequently reaches 21.
54
What are the two things that can happen with an executory interest?
1. They can terminate a present interest holder's estate;
2. They can commence after the current estate's natural termination
55
What is a shifting executory interest?
Will transfer ownership from a grantee to a third party. They “cut off” the grantee’s interest in the property.
O to A for life, but if A remarries, the property goes to B.
(This creates a shifting executory interest for B because otherwise the property would be A's)
56
What is a springing executory interest?
Will transfer ownership from the grantor to a third party. They “cut off
the grantor’s own interest in the property. O to A for life, and then to B if she is at least 20 years old (This creates a springing executory interest for B because otherwise the property would be O’s)
57
What is the Rule Against Perpetuities (RAP)?
No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.
This only applies to contingent remainders because, if it is a vested interest at the time of the creation of the interest, there is no need to wait to consider.
58
Under RAP, what interests are affected?
1. Contingent remainders
2. Executory interests
3. Class gifts
59
When does the RAP period begin to run?
At the creation of the interest.
1. Inter-vivos gift; right away
2. Testamentary gift; when the grantor dies
60
What are alternatives to RAP?
1. Wait and See (wait until grantor dies, and see if it violates RAP
2. Uniform Statutory RAP (90 years from the creation of the interest)
61
What interests are not subject to RAP?
Reversionary interests are NOT subject to RAP because they are considered vested immediately
62
What are destructibility of contingent remainders?
A remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate
O to A for life then to B, if B is 21
(B dies before reaching 21 at A's death; contingent remainder dies, O has a reversion)
63
What is the rule in shelley's case?
Occurs when in a single instrument/conveyance, the grantor grants a life estate in another, and then grants the remainder to that person's heirs
O to A for life and then to A's heirs becomes O to A in fee simple
64
What is the doctrine of worthier title?
When there is an inter-vivos conveyance of land to a person, and then a remainder in O's heirs. The remainder simply returns to O as a reversion
O to A for life then to O's heirs becomes O to A for life
65
What is a doctrine of merger?
Merger occurs when two estates become held by the same person creating a fee simple
O to A for life, remainder to B and her heirs; if A conveys her life estate to B, the remainder merges giving B a fee simple
66
What are the three types of tenancies?
1. Joint tenancy
2. Tenancy in common
3. Tenancy by entirety
67
What is a joint tenancy?
A joint tenancy with right of survivorship (JTROS) is created when two or more parties take title in joint tenancy by satisfying the “four unities” (time, title, interest, and possession)
68
What happens to a joint tenancy when one or more unities are violated?
Any later violation of these can change the interest into what is called a tenancy in common (TIC)
69
What occurs when a party in a joint tenancy conveys their interest?
Either party that conveys all of their interest in any way converts the JT into a TIC
However, partial conveyances do not destroy the entire JT, just the part conveyed
This can be done without notice to the other joint tenants
70
Can a joint tenancy be devised or descended?
No joint tenant can devise their portion of the joint tenancy because the micro-second that they died, the property goes to the other joint tenant, so there is nothing to give in a will
71
What is a tenancy in common?
Tenants in common have equal right to both possession and use of the whole property. They are owners of land and have separate but undivided interests in the property. Each individual’s interest is alienable, devisable, and descendable (A,D,D)
72
How can a tenancy in common end?
Through partition or merger
73
Under tenancy in common, what is a partition?
A legal separation of the party's interest. Can be by sale, or in kind
74
What is partition by sale?
The property is sold and the proceeds from the sale is split between the parties
75
What is a partition by kind?
The property line is split in proportion to what the parties own
76
Under tenancy in common, what is merger?
Merger occurs when one party gains all of the other parties' interest and the property becomes a fee simple
77
What are tenants in common responsible for?
The taxes, costs, maintenance, and repairs relative to their fractional interest
78
What is ouster?
Ouster occurs when an occupying co-tenant restricts access of another co-tenant
If ouster is complete, the ousting co-tenant still owes rents and profits to the other TIC
(A co-tenant in possession isn't liable to a co-tenant not in possession for rent unless there has been an ouster)
79
What is a tenancy by the entirety?
A joint tenancy for married couples. This has to have the four unities + marriage. (TTIP + M). Effectively the same as a JT but cannot be severed by conveyance by one party alone. Divorce converts this to a TIC.
80
Term of Years
Is a leasehold that runs for a fixed period of time with a specific defined end date, not necessarily by years. Some statutes require it but at common law, no notice to terminate is required since it automatically expires
81
Periodic Tenancy
Lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination. The required notice for termination is the length of one period, but many states impose a limit such as one month (6 month notice for 1 year or more tenancy)
82
Tenancy at Will
A tenancy of no fixed period that endures so long as both landlord and tenant desire. At common law, no specific notice period to terminate is required by modernly, notice is required based on the time between rental payments. In terms of enforcement, the court will find periodic tenancy when a tenancy at will tenant has been making such payment by term
83
Tenancy at Sufferance
A tenancy arising when a person who has been in lawful possession of property wrongfully remains as a holdover after his or her interest as expired. Common law gives a landlord two options: (1) eviction and sue for damage; or (2) consent (implied or express) to the creation of a new tenancy
84
Holdover Tenant / Tenancy at sufferance
A tenant who is rightfully in possession but wrongfully remains after termination of the lease is a holdover tenant. Generally Landlord has 2 options: (1) evict and sue for damage; or (2) create a new tenancy
85
Sublease
Occurs when an existing tenant (lessee) turns over possession of a rented property without the sublessee being added to the lease agreement. Subleases do not transfer the lessee’s entire interest. Subleases do not relieve the original lessee of his obligations in terms of rental payments or care for the unit. Landlord and tenant retain both privity of estate and privity of contract
86
Assignment of lease
Occurs when a lessee transfers to another all of interest that they held in the possessory interest in the rented property. The landlord and original tenant maintain privity of contract and landlord and new tenant have privity of estate
87
Fixtures
A fixture is a once movable chattel that by virtue of its attachment to realty, objectively shows the intent to permanently improve the realty. Fixtures pass with the ownership of land and removing it is voluntary waste
88
Constructive Eviction
Occurs when the leased property, due to defects that are subject to the landlord’s duties, render a property uninhabitable for its leased purpose. The tenant may leave the premises and is not required to pay further rents, and the lease is effectively void
Constructive eviction requires: (1) wrongful act or failure to act by the landlord; (2) substantial interference with the tenant’s use and enjoyment of the property; and (3) tenant vacates the premises
89
Implied Covenant of Quiet Enjoyment
Every landlord makes the promise that Tenant has a right to quiet use and enjoyment of the premises without interference from landlord. Breach requires (1) wrongful act or failure to act by landlord; (2) substantial interference with the tenants use of enjoyment of the property; (3) notice and opportunity to cure; and (4) tenant vacates the premises
90
Implied warranty of habitability
A landlord is required to deliver and maintain through the lease, premises that are safe, clean and fit for human habitation. Covers all latent and patent defects in the essential facilities of the residential unit. A tenant cannot assume the risk by acknowledging a defect, nor can implied warranty of habitability be waived by a covenant in the lease.
When the landlord breaches, (1) tenant remain and withhold rent, (2) repair defects and deduct the cost from rent payments, (3) seek rent already paid, and (4) seek punitive damages in appropriate cases.
To bring a claim for breach, the tenant must give the landlord the opportunity to cure
91
Novation
When an entirely new rental contract is written that relieves the original lessee of any liability, and places all the rules and obligations on the new tenant
92
AIR Notice
Whether subsequent buyer had notice of previous conveyance is central to determination if the subsequent buyer is a BFP. There are three kinds of notice to consider
93
Actual Notice
There is evidence that the subsequent purchaser knew of a defect in the chain of title. (i.e., the subsequent purchaser discussed title issues with seller or other party and purchased the property anyway)
94
Record Notice
There is a recorded deed or other record that can be found with a record search (i.e., subsequent buyer goes to the county recorder’s office (or hires someone to check) and sees that the party listed as current owner isn’t the one selling you the property)
95
Inquiry Notice
The subsequent buyer should have reasonably known of a defect in title based on fact that would cause a reasonable person to make inquiry into the possible existence of an interest in real property (i.e., subsequent buyer drives to a lot that they intend to purchase to build a house and see a house already being built on the lot)
96
Tacking
Tacking is the legal doctrine in adverse possession that allows one adverse possessor to pass his/her time accrued onto a subsequent adverse possessor. This requires privity of estate or contract.
97
Statute of Frauds for Land
If the contract is for the sale of land, it is required in writing
98
Marketable title
Seller must be able to deliver marketable title, meaning they have the right to convey the property as stated in the contract. This is implied in every land sale contract
99
Duty to Disclose Defects
The seller has a duty to disclose all patent (seeable) defects in the property and all latent (not seen) defects the owner is aware about. Buyer can rescind contract, even after change in possession, if known defect was not disclosed. Failure to disclose = fraud.
100
equitable conversion/risk of loss
Upon signing the land sale contract, the buyer is considered to have equitable title. This is so that the seller cannot damage or reduce the value of the land during the contract period. Under common law, because buyer has equitable title under the contract, the buyer assumes the risk of loss. If the house burns down during the contract period, the buyer is on the hook for the loss; however, sales contract usually include seller must maintain insurance
101
Stigma Statutes
(1) Death in the house, (2) murder in the house, (3) suicide in the house, haunted house, (4) witchcraft in the house, (5) infamous crime, and (6) off-site conditions that can affect value (landfill, concrete, plant/dairy)
102
What are a party’s options when the other party breaches the Sale Contract
If a sale contract is breached by the buyer, the seller may (1) keep the deposit/earnest money plus costs, (2) other damages; and (3) specific performance
If the seller breaches, then the buyer can: (1) get deposit back; (2) seek other damages; and (3) specific performance. The nonbreaching party generally has the option to choose one specific remedy
103
Race jurisdiction
As between successive purchasers of the same parcel of land, the person who records first wins
104
notice jurisdiction
The subsequent bona fide purchaser has priority even though that person fails to record
105
race-notice jurisdiction
Subsequent purchaser is protected against prior unrecorded instruments only if the subsequent purchaser (1) is without notice of the prior instrument; and (2) records before the prior instrument is recorded
106
quitclaim deed
Have no warranties. It only conveys whatever the seller has
107
general warranty deed
Contains the most protections for buyer warranting title against defects in title, whether they arose before or after the grantor took title. Includes 3 covenants that are in effect at the time of conveyance and 3 warranties that continue if a problem occurs after the sale
108
six covenants in a general warranty deed
(1) Covenant of seisin; (2) covenant of right to convey; (3) covenant against encumbrances; (4) covenant of general warranty; (5) covenant of quiet enjoyment; and (6) covenant of further assurances
109
covenant seisin
The grantor warrants that he/she owns the entire estate that they are selling
110
covenant of right to convey
The seller has a right to convey
111
covenant against encumbrances
There are no encumbrances on the property that will pass to the buyer
112
covenant of quiet enjoyment
The buyer will not be disturbed in their ownership by a party with superior title
113
covenant of warranty
The seller will defend the buyer against lawful claims related to title, and will compensate the buyer for any loss related to someone asserting superior title
114
covenant of further assurances
The seller promises that he will execute any other documents required to perfect title
115
statutory special warranty deed
Guarantees against acts by the seller, but not predecessors in title
116
Shelter Rule
A subsequent buyer form a BFP is protected from title defects prior to the purchase of the BFP. So, and party buying from a BFP is protected from defects in title even if the subsequent purchaser knew about the defect
117
wild deed
A wild deed is one that is not properly recorded and out of the chain of title
118
mortgage
A security interest in property created to secure repayment of the purchase money loan; effectively, the bank secures its loan by the land itself
119
Title theory
Provides that the lender holds legal title to the property and the owner holds an equitable interest subject to repayment; upon full repayment, legal title passes to the owners who paid the mortgage
120
Lien theory
The borrower holds legal title to the property, and the lender holds a lien to the property that is exercisable upon default by borrower
121
equitable mortgage
Any lending instrument attached to real property is subject to the protections of a mortgage
122
foreclosure
The process by which a lender retakes the property held by a borrower and ejects the borrower. The seller then auctions the property, but often the borrower is the only participant and retakes the land at a low price which disallows the borrower to gain any equity in the process.
123
Judicial foreclosure
Most commonly, where the foreclosure process and sale is part of a civil process supervised by the Court. The lender sues the buyer for the loan value outstanding plus costs, and the judgment is for the judicial auction of the property
124
Non-judicial foreclosure
The foreclosure process can be completed outside of Court; sometimes called a “power of sale” foreclosure
125
Acceleration
Upon default, the mortgage documents usually has an acceleration clause which states upon default, the entire loan comes due immediately
126
equitable redemption
Allows a borrowers to reclaim their mortgage by paying the full amount owed on their mortgage before the foreclosure is finalized, usually at the auction sale. The borrower must pay the full amount owed on the mortgage, including interest and fees
127
statutory redemption
Some states allow that the default (and now foreclosed) borrower has a period of time, usually six months, to buy back the property at the auction bid price
