Studicata handout Flashcards
Four unities of joint tenancy
Possession
Interest
Title
Time
Fee Simple Determinable Language
While
During
Until
SO long as
Severance of Joint tenancy
When a joint tenant conveys her interest to a third party, that party takes the property as a tenant in common (clearly destroys the time and title unities).
When a joint tenant grants a mortgage interest in the joint tenancy to a creditor, the effect will depend on the jurisdiction:
(a)
In a lien theory jurisdiction (majority view), the mortgage is treated as a lien and does NOT terminate the joint tenancy.
(b) In a title theory jurisdiction (minority view), the mortgage will terminate the joint tenancy, and the tenants will then hold the property as tenants in common.
When a joint tenant grants a mortgage interest in the joint tenancy to a creditor, the effect will depend on the jurisdiction:
(a)
In a lien theory jurisdiction (majority view), the mortgage is treated as a lien and does NOT terminate the joint tenancy.
(b) In a title theory jurisdiction (minority view), the mortgage will terminate the joint tenancy, and the tenants will then hold the property as tenants in common.
Concurrent Estates:
Obligations of co-tenants
Operating expenses (divided upon ownership interests)
Rent Payments (divided upon ownership interests) (can subtract operating expenses)
Repair Costs are NOT divided between covenants; however, can get credit in a partition action
Improvement costs are NOT divided b/w co-tenants, however, can get credit in a partition action
What are operating expenses divided upon?
ownership interests
What are operating expenses
Taxes, mortgage payment, necessary charges
DOES NOT INCLUDE REPAIRS EVEN IF NECESSARY NO RIGHT OF REIMBURSEMENT
What are operating expenses
Taxes, mortgage payment, necessary charges
DOES NOT INCLUDE REPAIRS EVEN IF NECESSARY
What is a partition?
an equitable remedy action to divide property
What are the two types of partition actions:
- Partition in kind
- Partition by sale
What is a partition in kind
It physically divides the property into distinct portions, court PREFER this
What is a partition by sale
you sell the property and divide proceeds based on ownership interests
A partition by sale will only be ordered by the courts IF
Partition in kind is not practicable
or it is unfair to all parties
A partition by sale will only be ordered by the courts IF
Partition is kind is not practicable
or it is unfair to all parties
An ______ occurs if a co-tenant denies another co-tenant access to property
ouster
can seek injunctive relief or damages
Four kinds of leasehold interest
Tenancy for Years
Periodic Tenancy
Tenancy at Will
Tenancy at Sufferance
What is a tenancy for years?
one that lasts for a fixed and ascertainable amount of time, it AUTOMATICALLLY TERMINATES
What is a periodic tenancy
a repetitive and ongoing tenancy that continues for a set period of time UNTIL is terminated by proper notice from either party
can be express or implied, but must intend to create
Proper notice = before start of last term
Tenancy at will?
Can be terminated for any reason at any time without notice
Parties must INTEND to create this.
Can be express or implied
Express:
If K gives LL right to terminate; tenant also gets power
If K gives Tenant right to terminate only; LL does not get that power
What is tenancy at sufferance?
AKA Holdover tenancy
If a tenant refuses to vacate the premises once the term has ended; this creates a temporary tenancy where the terms of the prior lease control until:
- LL evicts T
- LL re-leases property to T
- T voluntarily vacates
Three main situations where the duty to pay rent is suspended:
- premises are destroyed (as long as the tenant did not cause damages)
- The LL partially evicts the tenant OR
- The LL materially breaches on the lease (violates implied warranty of habitability)
A ________ is implied in every residential lease
warranty of habitability
What is the warranty of habitability
reasonably suitable for basic human needs
If the LL breaches the implied warranty of habitability the tenant may:
- Vacate the premises and terminate the lease
- Withhold or reduce rent (must first notify LL and give LL reasonable opportunity to correct)
- Remedy the defect and offset the costs against the rent
OR
- Defend against eviction
What is the implied covenant of quiet enjoyment?
prevents LL from taking action that makes the premises wholly or substantially unsuitable for their intended purposes resulting in constructive eviction of the tenant
If the implied covenant of quiet enjoyment is breached the tenant may _________ if _________
withhold rent or seek damages
if
the tenant is constructively evicted
A constructive Eviction occurs if :
- LL caused the premises to be unsuitable for their intended purposes
- Tenant notified LL of problem
- LL did not correct problem
AND
- Tenant vacates the premises after a reasonable amount of time has passed
An assignment is ______
a complete transfer of the tenant’s entire remaining term under the lease
In an assignment, the LL can collect rent from the:
1.
2.
Assignee (b/c there is privity of estate)
Original tenant (b/c there is privity of contract)
What is a sublease?
A sublease is a transfer of less than the tenant’s entire remaining term under the lease.
In a sublease, the landlord may only collect rent from _______.
The ______ ONLY has rent obligations to the original tenant.
the original tenant
subleasee
A _______ terminates the lease agreement and end the landlord-tenant relationship between both parties
surrender
A surrender occurs when:
- A tenant returns possession of the leased premises to the landlord before the expiration of the lease
AND - The landlord consents
An _______ occurs when the tenant unilaterally returns possession of the lease premises before the lease expires WITHOUT the landlord’s consent
abandonment
In an abandonment, will the tenant have to keep paying rent?
Yes, until the landlord finds a new tenant
Duty to mitigate
Majority:
Minority:
Majority: the LL has a duty to mitigate damages if the tenant abandons the property early or is evicted by making reasonable efforts to re-rent the property to another tenant.
Minority: LL does not have to mitigate damages (more common in commercial leases)
Is the LL entitled to damages for the difference b/w the original tenant’s rent and the replacement tenant’s rent under the duty to mitigate?
Yes
what is a real covenant?
a promise concerning the use of land that runs to successors
typically requires the holder to do or refrain from doing something
benefit of the covenant is ____
the ability to enforce the covenant
burden of the covenant is ___
being subject to or bound by covenant
for a benefit to run to successors there must be:
(hint: 4 elements)
writing
intent for the covenant to run with the land
touch and concern the land
relaxed vertical privity – successor may take less than the original parties entire interest in the property
for the burden to run to successors there must be:
(hint: 6 elements)
writing
intent for the covenant to run with the land
touch and concern the land
strict vertical privity – successor must take original parties entire interest
horizontal privity – instrument used in the conveyance of the property between original parties must contain the estate and the covenant
notice – may be actual or constructive (record);
or inquiry
remedy for breach of equitable servitude?
injunctive relief
remedy for breach of a covenant?
money damages
To bind a successor to an equitable servitude:
(hint: 4 elements)
writing
intent
touch and concern
notice: actual, constructive (record), or inquiry
NO PRIVITY REQUIREMENT
How to tell if its a covenant or equitable servitude?
Look to relief sought:
if money damages, then covenant
if injunctive relief, equitable servitude
What is an implied reciprocal servitude?
Arises in planned subdivisions
Implied by the common scheme, a writing is not required
What is needed to enforce an implied reciprocal servitude:
(3 requirements) (INN)
- intent to create servitude on ALL plots
- must be NEGATIVE (refrain from doing something)
- the party against whom the servitude is sought must have NOTICE (can be actual, inquiry, or constructive)
What is an easement?
right held by one person to use another’s land
Two ways to establish an express easement
by grant – in a writing that satisfies SOF
by reservation – when grantor conveys land but reserves an easement right in land for their own use
what are all the types of easements
PINE
express easements
easement by implication
easement by necessity
easement by prescription
How is an easement by implication created
- single tract of land divided by common owner
- before division the owner used the single tract of land as if there was an easement
- after division, the common owner’s use of the conveyed land must be continuous and apparent
- use must be reasonably necessary for use and enjoyment
easement by necessity is created when _____ and ______
there is a single tract of land divided by a common owner
necessity arose when the land was divided where one is virtually useless without the easement
(often arises with respect to road access)
easement by prescription are established
- hostile
- open and notorious
- continuous for statutory period
How can you terminate an easement:
Release
Merger
Abandonment
Prescription
Sale to a bona fide purchaser
Estoppel
End of necessity
How do you terminate an easement by release
an element is terminated if the holder expressly release it. Must be in writing and satisfy SOF
How do you terminate an easement by merger?
An easement is terminated if the holder acquires fee title to the underlying estate - the easement merges into the title
How do you terminate an easement by abandonment?
An easement is terminated If the holder demonstrates an intent to never use the easement again through physical action (requires more then non-use statements)
How do you terminate an easement by prescription?
an easement is terminated if it is blocked for the statutory period
How do you terminate an easement by estoppel
An easement is terminated if the landowner reasonably relies to his detriment on the easement holder’s assurance that the easement will no longer be used
How do you terminate an easement by end of necessity
AN easement by necessity lasts as long as the easement is necessary - if no longer necessary, the easement terminates
The following two interests are NOT easements:
Profit: a profit is a right to enter another’s land to remove a specific natural resource
License: a revocable permission to use another’s land (ticket to a concert)
What are fixtures?
tangible personal property that is attached to real property in such a manner that it is treated as part of the real property when determining its ownership.
when are chattels considered a fixture?
if the owner of real property intends for the chattel to become a fixture by attaching it to the real property. Uses objective reasonable person standard that examines:
- Importance of chattel to real property
- Whether the chattel was specially designed for use on the real property; AND
- The amount of damages that removal of the chattel would cause two the real property
Land Sale contract requirements
- Must satisfy SOF
OR - Partial performance 2/3
Possession
Payment
Improvements to land
OR
Exception: Promissory Estoppel
Covenants under the land sale contract are _______ into the deed and ___________ be enforced unless the covenant is also in the deed.
merged
CANNOT
Merger breaks the land sale contract down into two stages:
- Contract stage: prior to closing any liability must be based on a provision in the land sale contract
- Deed Stage. After closing any liability must be based on a deed warranty
What is marketable title?
title that is free from an unreasonable risk of litigation
Defects that render the title unmarketable:
- Title acquire by adverse possession that has not yet been quieted (i.e supported by judicial decree)
- Future interest holders that have not agreed to the transfer
- Private encumbrances (mortgage, covenant, option, or easement)
- Violation of a zoning ordinance
OR
- Significant physical defect (encroachment on the land that is incurable)
In every land sale, the seller has a duty to convey _________ at ________
marketable title to the buyer
closing
If there is a defect in title rendering title unmarketable, it must be _________ before _______
If seller cannot deliver marketable title at closing, the buyer can _____
fixed or cured
closing
rescind
If the buyer waives marketable title, a seller ___________
cannot cancel for failure to deliver marketable titile
What is the implied warranty of fitness or suitability?
Applies to defects in new construction; it protects against latent defects (latent; not discoverable from reasonable inspection) and warrants that the new construction is safe and fit for humans.
Implied warranty of fitness or suitability: in most jurisdictions both the _________ and ______ may recover damages. In other jurisdictions, only the _____ can enforce this warranty.
initial purchaser and subsequent purchaser
initial purchaser
Most jurisdiction impose a duty on the seller to disclose material defects to the buyer.
Material defects substantially impact the:
1.
2.
3.
- Value of the property
- Desirability of the property
- Health and safety of its occupants
Do general disclaimers (as is) satisfy the seller’s duty to disclose defects?
NO
In majority of jurisdictions the purchaser holds ____ title during the period between the execution of the contract and the closing and delivery of the deed.
During this period:
1.
2.
equitable
- The purchaser is responsible for any damages to the property
AND - The seller, as holder of legal title, has the right to possess the property
A minority of jurisdictions follow the ___________. This places the risk of loss on the seller until closing and the delivery of the deed.
Uniform Vendor and Purchaser risk act.
What is a mortgage?
a security device used to secure repayment of a debt.
There are two components to a mortgage:
- The note. The not is the borrower’s promise to repay the debt or loan
- the mortgage. The mortgage is the device that provides security to the note by allowing the lender to force a foreclosure sale to recover the outstanding debt if the borrower defaults on the loan
Two main types of mortgages
- Purchase money mortgage. A purchase-money mortgage is mortgage where the borrower takes out a loan for the purpose of purchasing property
- Future- advance mortgage: a line of credit used for home equity, construction, business, and commercial loans (aka second mortgage)
There are 3 main alternatives used instead of mortgages as security devices:
- Deed of trust:
- Installment Land Contract
- Absolute Deed
Who does the deed of trust involve?
operates like a mortgage, but involves three parties:
a. the borrower
b. the lender
AND
c. a 3rd party trustee who holds title of property unit l the loan is paid off
What is an installment land contract?
The seller finances the purchase in an installment land contract retaining title unit l the buyer makes the final payment on the installment plan
What is an absolute deed
an instrument used by the borrower to transfer the deed to the property instead of conveying a security interest in exchange for a loan
The borrower remain personally liable after the transfer unless:
- the lender relates the borrower form his obligation OR
- The lender modifies the transferees obloigations
The borrower may transfer the property by :
Deed; Will; intestate succession
If transferee ASSUMES the mortgage, the ___ is primarily liable ____ and the ______ is ___________
transferee
default
original borrower
secondarily liable
If the transferee takes the title SUBJECT to the mortgage, the _____is ______ upon default while _____________
transferee
NOT personally liable
the original borrower remains liable
[this is the default]
Acceleration Clauses
Due on Sale
Due on Encumbrance
Due on Sale Clauses
Allow the lender to demand immediate payment upon transfer
Due on Encumbrance
Allows the lender to demand accelerated payments from the borrower if the borrower obtains a 2nd mortgage or otherwise encumbers property
Foreclosure
Forced sale of an asset where the proceeds of the sale are used to pay off the debt
What happens to excess proceeds in a foreclosure sale?
Satisfies other creditors in order of priority,
then to owner
What happens when the proceeds are insufficient to cover the foreclosing parties debt
the lender may seek a deficiency judgement
Which interests survive a foreclosure action?
Senior interests (interests acquired before the interest being foreclosed)
Junior interest are _____ by a foreclosure
extinguished
First in Time Rule
all surviving debts must be satisfied in chronological order starting with the oldest and moving down
UNLESS:
Purchase Money Mortgage
Unrecorded Senior Mortgage
Subordination Agreements
Mortgage Modifications
Purchase Money Mortgages
have priority over all other mortgages, even those arising prior to the borrower’s acquisition of the property
Unrecorded Senior Mortgages
A junior mortgage that is properly recoded may take priority over an unrecorded senior mortgage
Subordination Agreements
A senior lender can agree to subordinate its interest to a junior lender
Mortgage Modifications
A senior lender and a borrower can agree to modify the mortgage.
If the modification is burdensome on the borrower, the senior lender subordinates its interest.
Only the modification subordinates
Adverse Possession requires
CHANGE
Continuous for the statutory period
Hostile
Actual
Open and [N]otorious
Exclusive
Adverse Possession: Continuous
Seasonal or Infrequent use may suffice if its consistent with the type of property being possessed
Tacking (Adverse Possession)
An adverse possessor can tack on the time of possession of a prior adverse possessor to meet the statutorily period requirement if the adverse possessors are in privity with one another
What is the effect of a disability with respect to adverse possession?
Disability = insanity, imprisonment, minor
A statutory period will not run against a true owner who has a disability at the time the adverse possession will run.
Time tolls until disability is cured.
Deed Requirements
Satisfy the statute of frauds
Identify the parties
Describe the property sufficiently
Delivered and accepted
Deed: Acceptance
Generally presumed provided that the transfer is for value
A deed is delivered when __________
the grantor demonstrates a present intent to transfer the property
A deed is NOT delivered if ______
the delivery is revokable
(ex. I will transfer you this property in three weeks, unless I change my mind before then)
General Warranty Deed
warrants title against all defects, even if the grantor did not cause them
Special Warranty Deed
warrants title against all defects caused by the grantor
Quitclaim Deed
makes no warranties as to the health of title
Six implied covenants to deeds
Seisin
Right to convey
Against Encumbrances
Quiet Enjoyment
Warranty
Further Assurances
What are the pReSeNt implied covenants of a deed?
Right to Covey
Seisin
No (Against) Encumbrances
What are the FEWture implied covenants of a deed?
Further assurances
quiet Enjoyment
Warranty
Covenant of Seisin
Warrants that the deed describes the land in question and that the grantor is the rightful owner
Covenant of the Right to Convey
Warrants that the grantor has the right to convey the property
Covenant Against Encumbrances
Warrants that there are no undisclosed encumbrances on the property that could limit its value
Covenant of Quiet Enjoyment
Grantor promises to defend against future challenges to the grantee’s title to the property
Covenant of Warranty
Grantor promises to defend against future developments that extend into the grantee’s property boundary
Covenant of Further Assurances
Grantor promises to do what is reasonably necessary to cure future problems with title
A purchaser has Actual Notice when:
they have personal knowledge of a prior interest
A purchaser is on Constructive Notice when
the prior interest is recorded properly
wild deeds do not put subsequent purchasers on constructive notices
Race Statutes
The first to record acquires title, regardless of notice
Notice Statutes
Subsequent purchases acquires title if the purchase is made WITHOUT notice of prior conveyance
Notice can be ___, ____, ____
Actual
Constructive (record)
Inquiry
Race-Notice Statutes
A subsequent purchaser acquires title if:
- conveyance is made without notice of prior conveyance AND
- subsequent purchaser records first
Under the common law, if a grantor transfers the same piece of property to multiple grantees, __________________________________
the first grantee to receive the deed acquires rightful title
What is a wild deed
One that is not in the chain of title / not recorded properly
Shelter Rule
A person who is transferred by a BFP has the same recording statute protections as the BFP
takes shelter in the status of BFP transferor
A person who is transferred by a ____ has the same _____ as the _____
bona fide purchaser
recording statute protections
bona fide purchaser
who is a bona fide purchases
a person who pays valuable consideration for property without notice of a prior interest
NOT heirs, devisees, or donees
is it a fixture? look at the following factors
Damage that removal would cause
Adaptation of item to realty
Manner in which its attached
Nature of the item
[DAMN]
Law of the ___ controls
situs (place where the property is located)
Cy Pres Doctrine:
When a gift to a charity fails, ______
the court may reform it to match the donors intention.
there must be:
property or money given for a charitable purpose;
it must be impossible, impracticable, or illegal to carry out the purpose; AND
the settlor must have manifested a general intent to devote the property to a charitable purpose
Most jurisdictions prohibit a landlord from terminating a lease when:
- the LL is in the business of renting residential property
- The tenant has complied with their lease obligations
AND - The landlord is retaliating against the tenant for exercising a legal right in good faith with reasonable cause
A covenant of warranty is
the seller’s promise to protect the buyer against claims of superior title brought by another party
Recording acts are used to determine:
priority among competing property interests
In a notice jurisdiction: a bona fide purchaser has ____ over an earlier property interest if the BFP took ______ notice
priority
without
3 types of notice
Actual: a buyer has direct knowledge of prior interests in land
Record: a document showing a prior interest is properly recorded in the land record and appear in the buyer’s chain of title
Inquiry: a buyer knows, or should know, of circumstances that would prompt a reasonable person to investigate (visible use of property, reference to unrecorded transaction in recorded instrument)
What is seisin
a present covenant that promises that the grantor owns interest being conveyed
What are the present covenants of title
Seisin
Right to convey
Against encumbrances
Notice acts protect only
subsequent purchasers for value who lack notice of prior interests in land
