Short Questions

Question 1

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 1

Yes, if the occupier communicates hostility

If the occupier enters with the owner’s permission, her possession may become adverse only once she makes it clear to the owner that she is claiming hostilely. This can be done by explicit notification, by refusing to permit the true owner to come onto the land, or by other acts inconsistent with the original permission.

Question 2

Can you say the contents of a deed?

Answer 2

1. Words of intent
2. Identify the land
3. Identify the parties
4. Signature by the grantor

YOU DONT NEED: Consideration, that is on the contract, not in the deed

Question 3

Can you come with examples of who is NOT a BFP?

Answer 3

A donee of the land is BFP

A judgment creditor

One who took the land by specific bequest

Question 4

A grantee is found in possession of a deed, what does it mean?

Answer 4

It (presumably) means it has been delivered (the deed). The grantee’s possession of a properly executed deed raises a presumption of delivery

Question 5

A grantee is silent about the acceptance of a deed, what is presumed?

Answer 5

• Courts generally will presume that a grantee accepts a deed if the conveyance would benefit her.
• Courts also will presume that a grantee accepts a deed if she is a minor. In all states, acceptance is presumed if the grantee is an infant or an incompetent.

Question 6

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

Answer 6

Generally No.

BUT, if the buyer has done the 2/3 rule (at least two of (1) taken possession of land; (2) made substantial improvements to the land; and (3) paid the purchase price) then YES

Question 7

Do both seller and buyer are entitled to specific performance?

Answer 7

Yes. Seller must convey title and buyer must tenders the purchase price

Some courts will not enforce an specific performance remedy in favour of a seller that sells a house in a large subdivision of similar houses

Question 8

What are the essential terms of a land sale contract under SoF?

Answer 8

1. A description of the property;
2. An identification of the parties to the contract; and
3. A price and manner of payment, if agreed upon. The Statute also requires the contract to be in writing and signed by the party to be charged.

Question 9

Can you come up with examples for an unmarketable title?

Answer 9

1. Evidence that a prior grantor lacked capacity to convey the property
2. A significant variation in the description of property from one deed to the next
3. The defective execution of a prior deed in the chain of title

Many courts hold that an ancient lien or mortgage on the record will not render title unmarketable if the seller has proof of its satisfaction or the statute of limitations on the claim would have run under any possible circumstance, including tolling for disabilities.

Question 10

In general, what happens to a party who fails to tender performance on the closing date?

Answer 10

Has a reasonable time after the closing date to tender performance and avoid breach. (however he would have to pay incidental damages)

Courts would not presume that time WAS of the essence, unless the contract states so, the circumstances show that the parties intended that, and a parry prior to the closing date that time is of the essence.

If time is of the essence, a party who fails to tender performance on the closing date is in total breach and loses her right to enforce the contract .

Question 11

In a sale of land contract, when time is of the essence?

Answer 11

1. The contract states that time is of the essence;
2. The circumstances indicate that the parties intended that time is of the essence; or
3. One party notifies the other within a reasonable time before the closing date that time is of the essence.

Question 12

When Ximena assumes Yari mortgage, what does that mean to Ximena?

Answer 12

X becomes primarily liable to the Lender. Y will remain as a surety

Question 13

Yari has a note and mortgage. He transfers to Ximena the note but not the written assignment of the mortgage.

If there is no assignment, could the bank enforce the mortgage?

Answer 13

X is a debtor, but it is presumed that the mortgage will follow the note.

When a mortgagee transfers a promissory note without a written assignment of the mortgage, generally the mortgage follows the note. The mortgage automatically will follow the properly transferred note. No separate written assignment of the mortgage is necessary.

Question 14

When a junior mortgage can beat a senior mortgage?

Answer 14

When the senior mortgagee makes OPTIONAL advances after the existence of the junior debt.

When the mortgagor accepts an advance of funds from the senior mortgagee, the junior mortgage is given priority over the advance if the advance was optional.

Question 15

If a landlord’s breach of duty renders the premises unsuitable for occupancy, under the doctrine of constructive eviction, the tenant may:?

Answer 15

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

Question 16

What is the Rule in Dumpor’s Case?

Answer 16

If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers

Question 17

A covenant against assignment or sublease is an unreasonable restraint on alienation.?

A covenant against assignment prevents the tenant from subleasing her interest?

Answer 17

NO,

NO, Covenants against assignment or sublease are strictly construed against the landlord. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa.

Question 18

What happens if a tenant transfers her interest in violation of a covenant against assignments or subleases?

Answer 18

The transfer is effective.

If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages.

Question 19

Which of these are automatic, and which of these require the enforceability of the power of termination?

A fee simple subject to a condition subsequent

A fee simple subject to an executory interest

A fee simple subject to a possibility of reverter

Answer 19

A fee simple subject to a condition subsequent: Requires the exercise of power

A fee simple subject to an executory interest: Finish automatically in favor of a third party

A fee simple subject to a possibility of reverter: Finish automatically in favor of grantor

Question 20

Which of the following interest in property are subject to RAP?

• Contingent Remainders
• Reversions
• Possibilities of reverter
• Rights of reentry
• Executory Interest
• Class gifts (even if vested remainders)
• Right of first refusal
• Options

Answer 20

1. Contingent remainders,
2. Executory interests,
3. Options,
4. Rights of first refusal and
5. vested remainders subject to open
6. Powers of appintment

Question 21

Which of the following interest in property are NOT subject to RAP?

• Contingent Remainders
• Reversions
• Possibilities of reverter
• Rights of reentry
• Executory Interest
• Class gifts (even if vested remainders)
• Right of first refusal
• Options

Answer 21

RAP does not apply to future interests on the grantor:

• reversions,
• possibilities of reverter, and
• rights of entry

Question 22

Will a testamentary disposition by one joint tenant sever JT?

Answer 22

A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant’s interest to another is inoperative as to joint tenancy property because when the testator dies ( i.e., when the will becomes effective), his rights in the joint tenancy property are extinguished, and the will has no effect on them.

Only a suit for partition, a conveyance intervivos, an execution of a mortgage (titlte theory) would severe a JT

Question 23

How do you satisfy horizontal privity?

Answer 23

Look for parties to a real covenant who shared an independent interest in the land at the time they entered the covenant

Examples:

1. A Grantor and a Grantee
2. A tenant and a landlord
3. Dominant and servient owners of lands in an easement appurtenant

Question 24

In a residential subdivision, will a commercial builder be bound by a residential-use restriction that was omitted from his deed?

Answer 24

Yes, if the builder had inquiry notice of a common scheme for development

Yes, a commercial builder will be bound by the restriction if the builder had inquiry notice of a common scheme for development. An equitable servitude is a covenant (i.e., a promise to do or not do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against assignees of the burdened land who have notice of it. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, in the absence of a writing, reciprocal negative servitudes may be implied if: 1. There is a common scheme for development (i.e., a plan existing at the time sales of the subdivision parcels began that all parcels be developed within the terms of the negative covenant); and 2. The grantee had actual, record, or inquiry notice of the covenant. Thus, the builder may be bound without actual notice of restrictive covenants in the deeds to other lots.

Question 25

Anakin transfer to Luke his land in Tatooine, he executes the deed but retains it, and then it gives to Owen to give it to Luke after he dies. While alive Anaking also conveys the land to Obi-Wan who knew about the deed to luke.

Who owns the land in a Notice jurisdiction?

Answer 25

Obi-Wan.

The deed to luke was never effective because it never had the intention to transfer the land to Luke. There is a requirement of PRESENT INTENT in order for the conveyance to be effective

Question 26

Can you waive the implied warranty of habitability?

Answer 26

No, a tenant may not waive the implied warranty of habitability, because such a waiver is against public policy.

Thus, even if the tenant accepts the premises “as is” or covenants to repair, the landlord’s obligations under the implied warranty of habitability are usually held to be nonwaivable

Question 27

When is a deed void?

Answer 27

Deeds that were obtained by duress, undue influence, mistake forged, never delivered, or obtained by fraud in the factum are void.

Question 28

What do you need to finish an easement by estoppel?

Answer 28

(i) some conduct or assertion by the owner of the easement, (ii) a reasonable reliance by the owner of the servient tenement, coupled with (iii) a change of position

Question 29

A tenant agreed in writing to lease a retail site rom the owner. The term of the tenancy was two years, and rent was payable in monthly installments at the beginning of each month.

At the end of the second year, the tenant did not vacate the premises at the end of the term; instead, she sent a check for the next month’s rent to the owner.

The owner cashed the check and then informed the tenant that he was holding her to a new tenancy and a rent increase of 10%.

What is the status of the tenancy that the owner created?

Answer 29

A year-to-year tenancy for the original rent amount.

When a tenant continues in possession after the termination of her right to possession, the landlord has two choices of action: He may treat the hold-over tenant as a trespasser and evict her under an unlawful detainer statute, or he may, in his sole discretion, bind the tenant to a new periodic tenancy, in which case the terms and conditions of the expired tenancy apply to the new tenancy. Unless a residential lease is involved, a year-to-year tenancy results from holding over if the original lease term was for a year or more. The new tenancy has the same terms as the original tenancy unless the landlord notified the tenant before termination of the original tenancy that occupancy after termination will be at an increased rent. Here, the original lease was a commercial lease for a two-year term, so the owner’s decision to hold the tenant to a new tenancy makes it a year-to-year tenancy. However, because the owner did not notify the tenant of the rent increase prior to the end of the term, the new tenancy is at the original amount of rent

Question 30

A property owner owned a tract of land that he leased to a baker for 27 years. The baker built a large bakery on the property. The baker then sold the bakery building to a buyer, assigning the lease with the property owner’s approval. The buyer has failed to make a rent payment for several months and has also failed to build the cafe that the baker had agreed to build in the original lease.

The landlord of the property has a cause of action against:

1. The buyer and the baker for both the rent and the cafe.
2. The buyer for the rent only, and the baker for the cafe only.

Answer 30

The buyer and the baker for both the rent and the cafe.

An assignment does not release the tenant from his contractual obligations to the landlord; thus, the baker is still liable for all of the lease provisions. Thus, (2) is incorrect. An assignee is in privity of estate with the landlord and is liable on all covenants in the lease that run with the land. His assumption of these duties is implied; it need not be expressed in the assignment. Covenants to pay money run with the land, as do covenants to perform physical acts on the property. Therefore, the buyer is liable for both the rent and the cafe even if it did not expressly assume performance of the covenants

Question 31

Land is owned by JT by two tenants. One of them mortgages his part in a title theory state. Then he dies leaving all his property to his daughter on its will.

What happens with the property?

Answer 31

The second tenant has title free and clear of the mortgage.

The key to answering this question is to know whether execution of the mortgage by the first partner caused a severance of the joint tenancy. If it did cause a severance, then the first partner’s one-half would not pass to the second under right of survivorship but instead would pass to the first’s estate, and thus would go to the daughter by will. Whether a mortgage creates a severance or not depends on whether the state follows the lien theory or the title theory of mortgages. Lien theory means no severance; title theory means severance. Because this is a lien theory state (majority rule on the MBE), there was no severance; thus, the joint tenancy remained intact.

When the first partner died, the property passed free and clear to the surviving joint tenant. The mortgage signed by the first partner did not sever the joint tenancy because this is a lien theory state. The mortgage can be held only against the property the first partner has; when the first partner died, the right of survivorship operated to end the first partner’s interest and automatically vested it in the survivor.

Question 32

Does a partial eviction releases the tenant from the duty of paying rent?

Answer 32

Depending on who does it:

1. If it is the landlord, the eviction terminates the obligation to pay rent even if its only partial (Breach of the covenant of quiet enjoyment)
2. If it is a third party with a paramount title, then the partial eviction would not terminate the obligation to pay rent, but would only reduce the amount of it

Question 33

T1 assigns to T2 the entirety of a lease agreement. Does a right of reentry from one Tenant to a Subtenant, creates an assignment or a sublease?

Answer 33

No, is still an assignment

The effect of the transfer is an assignment of the lease from T to T2. T transferred the remaining four years of the lease to T2, and by the slight majority view, T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment.

Question 34

If L leases property to T, and L subsequently assigns L’s interest to L2, whom may T hold liable when X, a paramount title holder, ejects T?

Answer 34

L and L2

If L leases property to T, and L subsequently assigns L’s interest to L2, T may hold L or L2 liable when X, a paramount title holder, ejects T. A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease. X’s evicting T from the entire leased premises breaches the covenant of quiet enjoyment, which runs with the land. Thus, L and L2 are personally liable to T.

Question 35

Can you assign a Tenancy at will?

Answer 35

NO, the attempted assignment of a Tenancy by Will is void and terminates the tenancy at will by operation of law. A tenancy at will is a leasehold estate that is terminable at the will of either the landlord or the tenant. Such a tenancy terminates by operation of law if: 1. Either party dies; 2. The tenant commits waste; 3. The tenant attempts to assign his tenancy; 4. The landlord transfers her interest in the property; or 5. The landlord executes a term lease to a third person.

Question 36

What happens when a condemnation action PARTIALLY made on a property leased by a Tenant. Does the Tenant have a cause for a breach of contract action?

Answer 36

In partial condemnation cases, the landlord-tenant relationship continues, as does the tenant’s obligation to pay the entire rent for the remaining period of the lease. The tenant is, however, entitled to share in the condemnation award to the extent that the condemnation affected the tenant’s rights under the lease

Question 37

What does it mean when an easment is Surcharged?

What are the effects?

Answer 37

The easement’s legal scope was exceeded, and the servient landowner can enjoin the excess use and sue for damages.

The scope of an easement is determined by the reasonable intent of the original parties, and when the scope has been specified, these specifics will govern. However, when an easement’s scope has been set out only in general language, courts will interpret it to accommodate the holder’s present and future reasonable needs. In either event, if the easement holder uses the easement in a way that exceeds its legal scope, the easement is surcharged. The servient landowner may enjoin the excess use and possibly sue for damages if the land has been harmed. However, the easement does NOT terminate by operation of law, nor does such use give the servient owner a power of termination.

Question 38

Can you terminate an easement by solely not using it?

Answer 38

Nonuse of the easement for the statutory period will not terminate an easement.

An easement can be extinguished by the easement holder’s physical act of abandonment (e.g., erection of a permanent structure over the easement).

Question 39

A small plot of land is located within a bigger one. There are two available roads to access the small plot that are equally convenient, who chooses when the easement by necessity is created?

Answer 39

The holder of the servient estate, has the right to choose the location of an easement by necessity.

An easement by necessity arises when the owner of a tract of land sells a part of the tract and by this division deprives one lot of access to a public road or utility line. The owner of the servient parcel has the right to locate the easement, provided the location is reasonably convenient.

Question 40

A covenant to always energy from the same provider in relation to a house, is a covenant that touches and concerns the land?

Answer 40

No

A covenant touches and concerns the land when it makes the land itself more useful or valuable to the benefited party. Here, an agreement to purchase electrical power only from a specified source probably does not touch and concern the land. (

Question 41

Gustavo buys a house in Pacoli. Pacoli is a common scheme of development that included in all his first deeds of sale that the houses needed to be white. A neighbor of Gustavo, bought the house from a landowner that did not included in the covenant included in the original deed from the real estate company to the landowner.

Gustavo sues the neighbor. Would he win? does he has standing?

Answer 41

Yes, he will win because the Neighbor had constructive notice of the covenant and he has standing under the mutual right of endorsement

When a subdivision is created with similar covenants in all deeds, there is a mutual right of endorsement (each lot owner can enforce against every other lot owner) if two things are satisfied: (i) a common scheme for development existed at the time that sales of parcels in the subdivision began; and (ii) there was notice of the existence of the covenant to the party sued. Here, there was a common scheme evidenced by the recorded plan, and the fact that the covenant was in the neighbor’s chain of title gave her constructive notice of the restriction. Therefore, not only does the covenant apply to the neighbor’s land, but Gustavo (or any other lot owner) can enforce it as a reciprocal negative servitude.

Question 42

If the seller does not have title but only an adverse possession claim. Is the sale good?

Answer 42

No, The seller of land is obligated to deliver a title that is free from reasonable doubt either in fact or law.

This does not require a perfect title, but rather one that is free from questions that might present an unreasonable risk of litigation. Title is marketable if a reasonably prudent buyer would accept it in the exercise of ordinary prudence. An inability to establish a record chain of title will generally render the title unmarketable. If the seller attempts to rely on adverse possession to show that defects have been cleared, courts traditionally do not favor such an argument, because proof of adverse possession normally rests on oral evidence, which might not be available to the buyer at a later time.

Question 43

If there is no mention of a servitude by the seller, but the servitude is obvious, there is a defect on the marketable title?

Answer 43

No, if the easement is visible

Easements are generally considered encumbrances that render title unmarketable; so if an easement is not provided for in the contract, it usually renders the seller’s title unmarketable. There is an exception, however. A majority of courts have held that a beneficial easement that was visible or known to the buyer does not constitute an encumbrance.

Question 44

Sale of land: Before the closing, the buyer notice that there was a tiny tiny mistake on the location of the property that made the land subject to a violation of a zoning ordinance.

Does this create an unmarketable title?

Answer 44

Yes, even if it is small, there is a violation of a zoning ordinance

There is an implied covenant in every land sale contract that at closing the seller will provide the buyer with title that is marketable. It need not be perfect title, but it must be free from questions that might present an unreasonable risk of litigation. Because the placement of the seller’s house violated the zoning ordinance, the buyer could be subject to suit.

Question 45

A seller conveyed her residential city property to a buyer by a general warranty deed. On taking possession of the property, the buyer discovered that the garage of his neighbor encroached six inches onto his property.

If the buyer wishes to compel the seller to assist him in a suit against the neighbor, which of the following covenants may he rely on to do so?

1. Warranty and further assurances.
2. Encumbrances and further assurances.

Answer 45

Warranty and further assurances.

The buyer would rely on the covenants of warranty and further assurances to compel the seller to assist him in a suit against his encroaching neighbor. Under the covenant of warranty, the grantor agrees to defend, on behalf of the grantee, any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title. The covenant for further assurances is a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect. These covenants are “continuous” (run with the land) and require the grantor to assist the grantee in establishing title. The covenants of seisin and encumbrances do not require such assistance. A covenant of seisin is a covenant that the grantor has the estate or interest that she purports to convey. Both title and possession at the time of the grant are necessary to satisfy this covenant. The covenant against encumbrances is a covenant assuring that there are neither visible encumbrances (easements, profits, etc.) nor invisible encumbrances (mortgages, etc.) against the title or interest conveyed. While the seller may have violated these two covenants because of the garage encroachment, they do not provide the basis to compel her to assist the buyer in a title suit. Instead, the buyer merely has a cause of action against the seller for their breach. Therefore 2 is wrong

Question 46

When tacking is available and when is not

Answer 46

Periods of adverse possession between two successive claimants may be tacked together to make up the full statutory period if there is privity of possession between the claimants. Privity is satisfied if the first adverse claimant purports to transfer the land to the next; i.e., the subsequent possessor takes by descent, by devise, or by deed purporting to convey title.

Tacking is not available when one adverse claimant ousts the other or the first claimant abandons and the next claimant goes into possession

Question 47

O conveys a life estate to A, with a remainder to B.

If during A’s lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, will X obtain title to the land?

Answer 47

No, X will not obtain title to the land. He will just obtain A’s life state

If during A’s lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, X will not obtain title to the land, but X will acquire A’s life estate. If a landowner does not commence an action to eject a would-be adverse possessor before the statute of limitations expires, she is barred from suing for ejectment, and title vests in the possessor. However, the statute of limitations does not run against the holder of a future interest (e.g., remainder, reversion) until her interest becomes possessory. The future interest holder has no right to possession until the prior present estate terminates, and thus no cause of action for ejectment accrues until that time. Here, X will acquire A’s life estate by adverse possession (i.e., a life estate pur autre vie, measured by A’s life), but not B’s remainder, which remains nonpossessory while A is living. Thus, upon A’s death, X’s interest will terminate.This is true even though X satisfied the elements of adverse possession. To establish title by adverse possession, the occupier must show:(i) An actual entry giving exclusive possession that is (ii) Open and notorious, (iii) Adverse (hostile), and (iv) Continuous throughout the statutory period.Land subject to a future interest CAN be acquired by adverse possession; however, the statute will not begin to run as against the future interest holder until her interest becomes possessory, as explained above. This is true regardless of whether X had color of title (i.e., a document purporting to convey title).

Question 48

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

1. Does not take title
2. Takes title subject to the real covenant
3. Takes title free of the real covenant
4. Takes title free of the real covenant unless she had knowledge of it

Answer 48

Takes title free of the real covenant

There is no vertical privity

If an adverse possessor uses land in violation of a recorded real covenant for the limitations period, she takes title free of the real covenant. The nature of the title obtained through adverse possession depends on the occupier’s activities on the land. If an adverse possessor uses the land in violation of a real covenant (i.e., a written promise to do or refrain from doing something on the land), she takes title free of the covenant EVEN IF she had knowledge of it. However, if she complies with the covenant for the statutory period, she takes title subject to the real covenant. In either case, if an adverse possessor uses land for the limitations period, she DOES take title to the land.

Question 49

What is Color of Title?

Answer 49

Something that an adverse possessor could have

Color of title is a document that purports to give title, but for reasons not apparent from its face does not.

Question 50

Man purchased a vacant tract of land from a woman. Unbeknownst to the man, the woman did not own the land. Someone else owned the land in fee simple. Shortly after the purchase, the man built a house on the northwest quarter of the tract, leaving the rest of the tract vacant. Recently, the actual owner of the tract died, still without knowledge that the man had built a house on the northwest corner of the tract. The actual owner’s will left all of his property to his son. The relevant statutory period for adverse possession is 20 years. Can he obtain a quiet title on the whole tract after 25 years??

Answer 50

Yes, he would obtain the whole property

The man used the house alone, so his possession was exclusive. A house is plainly visible, so the possession was open and notorious. The man built the house without the true owner’s permission, so the possession was hostile. And the possession was continuous for 25 years, longer than the statutory period. Actual possession of a portion of a unitary tract of land is sufficient adverse possession as to give title to the whole of the tract of land after the statutory period, as long as there is a reasonable proportion between the portion actually possessed and the whole of the unitary tract, and the possessor has color of title to the whole tract. Color of title is a document that purports to give title, but for reasons not apparent from its face does not. Usually, the proportion will be held reasonable if possession of the portion was sufficient to put the owner or community on notice of the fact of possession. Here, the man had color of title to the entire tract because he purportedly purchased it from the woman. His house took up a significant portion of the property, such that the owner or community would have been on notice of the man’s possession of the tract.

Question 51

Adverse posession case: There is a minor owning the property. What is the rule regarding the toll of the statutory period?

Answer 51

For a disability, such as status as a minor, to stop the clock, the disability must have been in existence on the day the adverse possession began.

Question 52

Should you include a junior mortgagee on a foreclosure action?

Answer 52

Yes it is a necessary party, because the outcome will affect his interests

Yes, a junior mortgagee must be named as a party to a senior mortgagee’s foreclosure action 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. Thus, if a senior mortgage is in default, a junior mortgagee has the right to pay it off (i.e., redeem it) to avoid being wiped out by its foreclosure. Failure to join the junior mortgagee results in the preservation of its interest despite foreclosure and 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 on the land.

Question 53

When can you exercise the right of a statutory redemption?

Answer 53

After the foreclosure sale (Since you need to pay the sale price, before you would not know how much was the sale).

A mortgagor cannot exercise her statutory right of redemption before default, before the foreclosure sale or only during the foreclosure sale. In the states that provide it, the statutory right to redeem exists for a fixed period after the foreclosure sale. By contrast, all jurisdictions recognize the mortgagor’s right of redemption in equity, which exists until the date of sale and is cut off by foreclosure. A mortgagor may purchase the land at the foreclosure sale, but a statutory right of redemption provides a grace period after foreclosure when the mortgagor may redeem the property.

Question 54

What would be the order in which sale proceeds would be allocated between mortgagees?

Answer 54

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

In many cases, no surplus remains after the principal debt is paid off. Senior lienors receive none of the proceeds.

Note: if you included a senior lender he would be fist, that’s why you should never include him

Question 55

Bancolombia gave loan to X. X give mortgage to Bancolombia.

Then X obtain another loan with Finandina

Then X sold its house assuming both mortgages to Y

Y modified B loan to increase the capital and the interest rate.

Y defaults. Who would be liable to who?

Answer 55

X would only be liable to F

Y would be liable to B and F

Rule: X is liable to F and B because when a grantee signs an assumption agreement, becoming primarily liable to the lender, the original mortgagor (X) remains secondarily liable on the promissory note as a surety.

However, an exception exist: When a mortgagee and an assuming grantee subsequently modify the original obligation, the original mortgagor is completely discharged of liability. X had nothing to do with the modification agreed to by the bank and Y that increased the amount of the mortgage debt, and will not be even secondarily liable for that amount

Question 56

T1 and L have a lease agreement where the T has to pay taxes on the property. T1 assigns his lease to T2.

Later T2 sublease the lease to T3, and in the sublease agreement he does not include the covenant of paying taxes.

The property is on default because of taxes. Who is liable to L? All Ts?

Answer 56

Just T1 and T2. T3 is not.

T1 remained in privity of contract with the landlord until the end of the lease

After an assignment, the original tenant is no longer in privity of estate with the landlord. However, a tenant may still be held liable on its original contractual obligations to the landlord on privity of contract grounds. Here, the T1 is liable because it made the original deal with the landlord, which included the obligation to pay taxes on the building. The T1 remains in privity of contract with the landlord throughout the term of the lease unless it is otherwise discharged. In an assignment, the assignee stands in the shoes of the original tenant in a direct relationship with the landlord. Each is liable to the other on all covenants in the lease that run with the land, which would include the obligation of the lessee to pay taxes on the property. Here, the T2 is liable because as an assignee it is in privity of estate with the landlord. The T2 remains in privity of estate until it assigns to someone else. The sublease to the T3 is not an assignment. A sublessee is not personally liable to the landlord for rent or for the performance of any other covenants made by the original lessee in the main lease (unless the covenants are expressly assumed) because the sublessee does not hold the tenant’s full estate in the land (so no privity of estate). Here, the investment company is not liable because, as a nonassuming sublessee, it is not in privity of contract or estate with the landlord.

Question 57

A woman purchased a tract of land from a man by warranty deed. Unbeknownst to the woman, the man was not the actual owner of the tract. The woman built a home on the tract and moved into it. Two years later, the actual owner learned of the man’s transaction with the woman and prevented the woman from entering the tract from that point forward. This led to a costly court battle. When the woman notified the man and told him that she thought it was his duty to straighten this out, he ignored her.

The woman would succeed in a suit for damages against the man for breach of which covenants of title?

Answer 57

he woman would succeed in a suit for damages against the man for breach of the covenants of seisin, right to convey, quiet enjoyment, warranty, and further assurances, but not on the covenant against encumbrances. A general warranty deed gives the grantee six covenants of title: the right to seisin, the right to convey, a covenant against encumbrances, the covenant of quiet enjoyment, the covenant of further assurances, and a general warranty. Under the covenants of quiet enjoyment, warranty, and further assurances, the man promised that (i) the woman would not be disturbed in her possession of the tract; (ii) he would defend the woman’s title against lawful claims; and (iii) he would perform whatever acts are necessary to perfect the woman’s title. Because the man neither owned the tract of land nor was acting as the actual owner’s agent, he breached the covenants of seisin and right to convey at the time of the conveyance to the woman. When the actual owner prevented the woman from re-entering the property, this interfered with the woman’s quiet enjoyment, and the man’s refusal to “straighten this out” was a breach of the covenant of further assurances.

Question 58

A recording act that 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 58

notice statute

Question 59

O conveys Blackacre to A on Monday. O conveys Blackacre to B on Tuesday. A records on Wednesday. B records on Thursday.

If both parties paid valuable consideration for the land, and neither knew of the other’s deed, who owns Blackacre?

1. Race:
2. Notice:
3. Race-Notice:

Answer 59

Race: A because he recorded first

Notice: B because he is the latest BFP

Race-Notice: A because even if B was the las BFP, A is also one, so the first to record wins

If both parties paid valuable consideration for the land, and neither knew of the other’s deed, B owns Blackacre under a notice statute. A notice statute is a recording act that alters the common law rule of “first in time, first in right” to protect a subsequent bona fide purchaser (“BFP”)— i.e., one who pays valuable consideration and lacks notice of the prior conveyance. A notice statute requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance. While a prior grantee can prevent the existence of a subsequent BFP by recording, a BFP will be protected under a notice statute even if she does not record. Here, B prevails over A under a notice statute because B had no notice of the O-A conveyance at the time of her conveyance from O.

Question 60

A mother was in a nursing home and asked her attorney to draft a deed that would give her farm to her son. The attorney drew up the deed, had the mother properly execute it, and thereafter properly recorded the deed. The attorney then told the son what she had done. The son immediately went to the nursing home and told the mother that he did not want the farm so she should take back the deed.

Was the conveyance effective?

Answer 60

No, the son never effectively accepted delivery of the deed. The son never effectively accepted delivery. A deed is not effective to transfer an interest in realty unless it has been delivered, and there must be acceptance by the grantee to complete the conveyance.

Question 61

Who is senior between:

1. A PMSI not registered in June 1st
2. A mortgage registered in September 4th

On a jurisdiction with notice statute?

Answer 61

The PMSI wons

A PMM, whether recorded or not, has priority over mortgages, liens, and other claims against the mortgagor that arise prior to the mortgagor’s acquisition of title. However, PMM priority is subject to being defeated by subsequent mortgages or liens by operation of the recording acts.

The creditor’s mortgage has priority over the bank’s PMM under the jurisdiction’s notice statute because the creditor had no notice of the bank’s interest at the time of the loan.

Question 62

What type of recording statute is this?

1. “a 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.”

Answer 62

A Notice statute

The recording statute in the jurisdiction is a notice statute. In a jurisdiction with a notice recording statute, a subsequent purchaser who gives value and takes without notice wins over the earlier grantee.

Question 63

On February 10, an owner took out a $10,000 mortgage on her land with a bank. On February 15, the owner conveyed the land for $50,000 to a buyer who was not aware of the mortgage. On February 17, the bank recorded its mortgage interest in the land. On February 21, the buyer recorded his deed to the land.

Does the buyer hold the land subject to the bank’s mortgage?

1. Outcome in Notice Jurisdiction
2. Outcome in Race-Notice Jurisdiction
3. Outcome in Race Jurisdiction

Answer 63

1. No, because the buyer was a bona fide purchaser for value who bought the land before the bank recorded its mortgage.
2. Yes, the buyer takes subject to the bank’s mortgage in a race-notice jurisdiction because it was recorded first. All recording acts apply to mortgages as well as deeds. Thus, a subsequent purchaser of the property will take subject to a prior mortgage unless the recording act changes the result. A race-notice recording act would change this result only where a subsequent purchaser did not have notice of the mortgage at the time of purchase and recorded his deed before the mortgage was recorded. Here, the buyer did not have notice of the mortgage but he recorded after the bank; thus, he takes subject to the bank’s interest.
3. Yes, because the bank recorded first

Question 64

Mortgages for value. Is a BFP?

Answer 64

Yes, Mortgages for value without notice, are treated as “Purchasers” under recording statutes

Question 65

Marketable title dispute: A piece of land have a right-of-way that is not part of the title. The seller has possessed the land in a way that would destroy the easement, but there is no evidence of that beyond the oral statement by the seller.

Buyer discovers before closing that the land he intends to purchase have a right-of-way.

Can the seller prevail if he refuses to tender the sale price?

Answer 65

Yes

Marketable title includes that there is no litigation concerning the title. A buyer may reasonably accept as marketable title a piece of land with an easement if the seller can show proof of adverse possession that is available for the buyer in the future.

Here there is only an oral statement, and therefore no buyer would accept this title as marketable

Question 66

Is there an obligation to carry insurance on the sale of land contracts?

Answer 66

No, the particularity is that the insurance could be provided by both parties, but there is no obligation to obtain it

[In some cases the buyer of a destroyed property would be able to abate the sale price from the insurance received by the seller]

Question 67

Lease agreement written, in the middle of the contract term the parties agree orally to sale the property. The rent payments would now be considered payments of a price by intallments.

Tenant refurbish the building and also holds it in posession.

Closing date arrives and the Landlord doesnt convey the building, Tenant sue.

What would be the outcome?

Answer 67

While the doctrine of past performance would allow the T to prove the existence of a sale contract (he possesses building, he refurbished it, and he paid part of the price) he would not be able to prove that since all those elements are consistent as well with a tenant under a lease agreement, there was no action that showed the presence of an oral contract beyond the lease agreement

Question 68

Bernardo buys a house from Amarillo Inc. for 100K Bernardo dies before the closing. Under his will he assigns all his real property to Xiomara and all his personal property to Yesenia.

Amarillo doesn’t convey the land the day of the closing, what are the rights of Xiomara?

Answer 68

Xiomara can demand conveyance of the property and compel Yesenia to pay the purchase price.

Xiomara can compel a specific performance and he is entitled to exoneration out of the personal property estate, this he can compel Yesenia, as a taker of Bernardo’s personal property interests to pay the purchase price out of her share of the estate.

Question 69

Commercial tenant installed equipment on the premises for his business. A bank forecloses on the building owned by the Landlord. No notice to the T was given about the existence of the mortgage and he only learned about it when he was removed from premises

The Commercial tenant began to remove the equipment from the premises, but the bank filed an injunction to stop him from doing that.

What is the outcome

Answer 69

The court would deny the injunction because the tenant did not intend for the equipment to stay. She is entitled to remove it when the lease terminates provided she repairs any damage.

Remember, the fixtures to be fixtures need to be installed with the intention to be part of the building making them part of the real property.

The lack of notice about the mortgage is immaterial

Question 70

What is the appropriate remedy for two CoTenants that cannot agree on the use of the land (Allowing hunting on the property case)

Answer 70

Depending on the situation the court would separate the land physically between the tenants, or it will divide the proceeds of a sale between them