TX Real Property

Question 1

How does TX treat the rules against perpetuities?

Answer 1

Texas has the cy pres appraoch - so if it violates the Rule, it will be reformed to fit with RAP. Applies to inter vivos instruments and wills.

Question 2

T/F: In Texas, a right of entry after a condition is broken is not transferable.

Answer 2

False. The right of entry after a condition is broken is transferable.

Question 3

Texas is a community property estate.

Answer 3

Better get married for life. Yes, this is the card.

Question 4

Does the TX joint tenancy have a right of survivorship?

Answer 4

No. The default concurrent ownership is a tenancy in common. A right of survivorship can be created by agreement and it must clearly indicate this.

Question 5

Does TX restrict the # of years for which a leasehold estate may be created?

Answer 5

Nope.

Question 6

How long does a TX tenancy at will last?

Answer 6

A TX tenancy at will lasts as long as both the landlord and tenant want. There is no required advance notice to terminate, but eviction requires 3 days’ written notice.

Question 7

What rights does a landlord have in regards to a hold-over tenant?

Answer 7

A landlord must give at least 3 days’ written notice to a hold-over tenant to get off the property before filing a forcible detainer suit, which would determine who is entitled to possess the property in a justice court.

Question 8

How can a landlord get attorneys’ fees for a detainer suit?

Answer 8

A detainer suit is an action used against a hold-over tenant and takes place in the justice court of the precient where the property is located to determine who is entitled to possess the property. It can be joined with actions for damages, waste, or rent related to tenancy.

To recover attorneys’ fees, landlord must give the hold-over tenant a written demand to vacate premises. It must state that if tenant does not vacate before 11th day after receipt of notice, landlord may recover fees if suit is filed. The demand must be set by registered or certified mail, return receipt requested, at least 10 days prior to filing suit.

Question 9

T/F: TX does not provide for collection of double rent for a willful holding over by a tenant.

Answer 9

True.

Question 10

T/F: A tenant in TX has the duty to keep the premises in good repair unless lease states otherwise.

Answer 10

True.

Question 11

If there is damage from an insured casualty loss (fire, smoke, hail, etc.), how long does the tenant have to repair?

Answer 11

If there is damage from an insured casualty loss, the period for repair on condition begins when the landlord receives the insurance proceeds.

Question 12

If the premises are totally untentable and casualty did not from tenant’s negligence, how can the lease be terminated?

Answer 12

Either the tenant or landlord can terminate the lease by giving written notice prior to the completion of repairs. Termination of the lease entitles tenant to a pro rata refund of rent from date tenant moves out and to a refund of any security deposit.

Question 13

If the premises are partially untentable and casualty did not from tenant’s negligence, how does this effect tenant’s rent?

Answer 13

Absent an express agreement in the lease, a county or district court may award tenant a reduction in rent to extent premises are unusable.

Question 14

When can a landlord deduct from a tenant’s security deposit?

Answer 14

A landlord can deduct from tenant’s security deposit any damages and charges (i) for which he is liable under the lease OR (ii) from tenant’s breach. May not retain for ordinary wear and tear.

Landlord must write description and itemized list of all deductions if tenant does not owe rent when terminated the lease or there is a controversy regarding the amount owed. *Residential landlords = 30 days, commercial landlords = 60 days.

Question 15

What are a commercial tenant’s remedies for an improper lockout?

Answer 15

May either recover possession of premises OR terminate the lease and recover from landlord the amount equal to sum of tenant’s actual damages, one month’s rent, or $500 (whichever is greater), reasonable attorney’s fees, and court costs

Question 16

T/F: A landlord’s right to change the locks of a commercial tenant’s rental unit for failure to timely pay rent is automatic, it is a right for a residential landlord only if it is expressly stated in the lease and tenant has not paid all or part of the rent.

Answer 16

True. Residential landlord also has to provide 3 days notice of when they likely will change the locks, how much rent is due, where to discuss rent issues, and tenant’s right to receive new key at any hour if rent is paid.

Question 17

What are the remedies for a residential tenant that has been improperly locked out?

Answer 17

Recover possession of the premises OR terminate the lease and recover from the landlord one month’s rent + $1000, actual damages, reasonable attorneys’ fees, and court costs

Question 18

T/F: If a tenant abandons the premises in violation of a lease, landlord must mitigate damages.

Answer 18

True. This is the majority rule. The duty cannot be waived in the lease.

Question 19

Can a landlord remove a fixture from a leased premises?

Answer 19

Not in Texas. A landlord can only remove a fixture from a leased premises if the removal is for a bona fide repair or replacement. Otherwise, landlord is liable for a civil penalty of one month’s rent + $1,000. Tenant can also seek actual damages, attorneys’ fees, and court costs.

Question 20

How is an easement in gross treated in TX?

Answer 20

An easement in gross is when there is only a servient estate. See utility easements.

In TX, it is not assignable or transferable unless there is an express assignment provision in the instrument creating the easement. But statutory conservation easements are easements in gross and assignable.

Question 21

T/F: The level of necessity required for an implied easement depends on whether it is an implied grant or an implied reservation.

Answer 21

True. An implied grant has reasonable necessity, whereas an implied reservation had strict necessity.

Question 22

How does TX apply the easement by necessity standard?

Answer 22

TX applies the easement of necessity standard to implied roadway easements and uses the existing use standard to less cumbersome implied easements.

Question 23

How much time is needed for a prescriptive easement in TX?

Answer 23

10 years

Question 24

Describe how an easement created by express grant must be in TX

Answer 24

An easement created by express grant must be described with such certainty that a surveyor can go on the land and locate the easement from the description. If description inadequate or non-existent, no easement.

Question 25

How are equitable servitudes described in TX?

Answer 25

These are called restrictive covenants or negative easements.

Question 26

T/F: In Texas, the filing of a suit to recover property terminates the adverse possession.

Answer 26

True. But if the lawsuit is abandoned or not prosecuted to a judgment, then possession can continue.

Question 27

TX has four different limitations statutes regarding adverse possession - 3-year, 5-year, 10-year, and 25-year.

Answer 27

3-year: holds under title or color of title (hard af to prove)

5-year: someone uses and enjoys property, pays, taxes, and claims under a duly registered deed

10-year: uses or enjoys land, generally limited to 160 acres but if property enclosed only to the enclosed property. If possession is held under a duly registered deed, possession relates to the deed.

25-year: good faith and under a deed or something that conveyed the property and has been recorded

Question 28

If the mineral estate is severed from the surface estate, how does someone adversely possess both?

Answer 28

A person must adversely possess the surface estate and have actual possession of the minerals below (drilling and production of oil and gas).

Question 29

How does open and notorious possession work for large tracts of land (rural)?

Answer 29

Allow livestock to graze on the land and show that they constructed a sturdy enclosure demonstrating that the land is intentionally enclosed.

Question 30

How can a person adversely possess land after being given permissive entry?

Answer 30

Person must establish:

(i) former permissive relationship is over/rejected
(ii) repudiation and adverse claim have been communicated to person who gave permission, and
(iii) continued for prescribed years after that date (typically 10)

Question 31

Is paying property taxes a requirement for establishing adverse possession?

Answer 31

Only for adverse possession for 5 year-statute of limitations.

Question 32

How does TX treat adverse possession and disabilities?

Answer 32

In TX, the 3, 5, and 10-year adverse possession statutes don’t begin when a title holder of record has a certain disability either (i) at time property vests or (ii) at time adverse possession starts.

These disabilities are: under age of 18, serving in military during war-time, or unsound mind. Maximum 25 years.

Question 33

What is land that cannot be adversely possessed?

Answer 33

State or its political divisions can recover land even if the private record owner has donated or dedicated the property for public use.

Question 34

When can creditors force a sale of a homestead for what kind of debts? (8)

Answer 34

1. purchase money
2. taxes due on the homestead
3. improvements to homestead
4. owelty of partition
5. refinance of previously permitted debts
6. home equity loan
7. reverse mortgage; and
8. liens on manufactured homes that were refinanced and converted into real property liens
   * If not one of these, deed of trust is void.

Question 35

T/F: The homestead exemption does not apply against the person to who the purchase money is due.

Answer 35

True.

Question 36

Is homestead property liable for the satisfaction of real property ad valorem taxes?

Answer 36

Yes. Certain federal tax liens are also included as permissible encumbrances.

*Lien still valid to a third-party who finances a loan to discharge the lien.

Question 37

T/F: Texas homesteads have always been subject to forced sale for loans made in connection with improvement to the property.

Answer 37

True.

Question 38

What is owelty of partition?

Answer 38

It is the $ paid by one of two co-owners to the other when an equal partition of the property cannot be made. If subject to a court order or written agreement, co-owners obligated to satisfy it.

Question 39

T/F: Homestead property remains subject to forced sale when a valid homestead lien is refinanced.

Answer 39

True.

Question 40

What is a home equity loan?

Answer 40

It is not a line of credit, but a loan.

Question 41

What is a reverse mortgage?

Answer 41

This is an extension of credit that is secured by a lien on homestead property. Advances are made to a borrower based on the equity in a borrower’s homestead.

Question 42

When is the sale of a homestead deemed a loan, instead of a sale?

Answer 42

This is when the homestead is sold at a fixed price that is below the appraised fair market value at time of sale + buyer leases property to the seller for more than the fair rental value of the property.

Any deed from this is void and no lien attaches to the homestead property.

Question 43

How is a homestead terminated by death?

Answer 43

If a person dies without a surviving spouse or minor children, the right of homestead will cease.

Question 44

Does divorce destroy a homestead?

Answer 44

Divorce does not destroy a homestead if one of the parties to the divorce continues to maintain it as a homestead.

Question 45

How is a homestead terminated by abandonment?

Answer 45

Rights in a homestead can be terminated by abandonment of the homestead. Anyone asserting abandonment has burden of proving it by competent evidence.

To abandon a homestead: must have a present, definite, and permanent intent to cease to use the property for homestead purposes.

Question 46

What is a homestead?

Answer 46

A homestead in TX is a place of residence or business which is secured against the rights of creditors. It is a property right in the nature of an estate in land.

It can be claimed by a single adult or family.

Question 47

How is a residence or business designated as a homestead?

Answer 47

A person must intend to dedicate the property as a homestead and take overt acts of preparation and occupation to indicate notice of dedication as one (see actual use).

Question 48

What is the doctrine of part performance in TX?

Answer 48

Part performance is an exception to the Statute of Frauds. Unlike common which requires 2 or 3, TX requires all 3:

• possession of land by the purchaser
• paying all or part of the purchase price
• erecting improvements

Question 49

How does TX view title acquired by adverse possession?

Answer 49

Generally, not marketable or merchantable. But the title can be perfected into record title by either: (i) proper releases and deeds from all adverse claimants or (b) judgment quieting title from a court.

Question 50

When is a liquidated damages provision valid?

Answer 50

This provision is valid if (i) amount provided is a reasonable estimate of the probable loss that would be caused by breach and (ii) loss caused would be difficult or impossible to determinate accurately.

Seller can’t complain but a vendee can.

Question 51

T/F: A real estate broker cannot recover a real estate commission unless the promise or agreement for payment is in writing and signed by the party to be charged.

Answer 51

True and no exceptions.

Question 52

In TX, there is lien protection for mechanics, artisans, and materialmen who have a direct contractual relationship with the owner of the property being improved or repaired. If someone has provided services, what do they need to be entitled to a constitutional lien?

Answer 52

Generally, the following:

(i) debtor owns the building or article
(ii) materialman was in privity of contract with debtor

(iii) materialman made or repaired building or article by: (a) supplying goods and constructing all or part of it
(b) suppyling goods and repairing it
(c) supplying unique goods manufactured to debtor’s request, or
(d) furnishing off-the-shelf general inventory goods with intent that they be incorporated

(iv) materialman supplied those goods to debtor; and
(v) goods were incorporated into building or article

Question 53

T/F: Constitutional lien is ineffective against subsequent bona fide good faith purchasers for value without notice.

Answer 53

True.

Question 54

T/F: A constitutional lien and a statutory mechanic’s lien can be enforced against a homestead.

Answer 54

Somewhat true, but only if there is a written contract for the work and materials to be supplied is signed by all owners prior to the beginning of work.

Question 55

For which of the following debts may a creditor NOT force a sale of a homestead?

A - Taxes due on the homestead.

B - Improvements to the homestead.

C - The refinance of previously permitted debts.

D - Gambling debts.

Answer 55

Texas Homestead laws provide special protections to land and its improvements. Creditors can force a sale for the debts of: purchase money; taxes due on the homestead; improvements to the homestead; owelty of partition; refinance of previously permitted debts; home equity loan; and reverse mortgage. Creditors cannot force a sale for common debts, such as gambling debts.

Question 56

When should the affidavit of lien, necessary for perfecting a mechanic’s lien on non-residential projects, be filed?

Answer 56

A perfected statutory mechanic’s lien is effective as of the date when visible construction or delivery of materials begin.

To perfect the lien, the lien-holder must file a signed affidavit of lien with the clerk of the county in which the property is located no later than the 15th day of the fourth calendar month after the day on which the indebtedness accrues. To finish perfecting the lien, a notice of claim must also be filed no later than the 15th day of the second and third months following each month in which all or part of the claimant’s labor was performed or material was delivered.

Question 57

T/F: Notice of a claim must be given no later than the 15th day of the second and third months following each month in which labor was performed or material was delivered.

Answer 57

Mostly true. This effects commercial, public works and temporary projects but there is no second notice requirement for residential projects.

Question 58

The lien affidavit is the actual document claiming a lien on an owner’s property. What must be in the affidavit?

Answer 58

a sworn statement of the amount of the claim;

name and last known address of the owner or reputed owner;

general statement of work done and materials furnished by the claimant and, for a claimant other than an original contractor, a statement of each month in which the work was done and materials furnished for which payment is requested;

name and last known address of the person who is meant to pay;

the name and last known address of the original contractor;

a description of the property sought to be charged with the lien;

claimant’s name and mailing address; and

for a claimant other than an original contractor, a statement identifying the date each notice of the claim was sent to the owner and the method by which the notice was sent.

*not required to set forth individual items of work done or material furnished or specially fabricated.

Question 59

A quitclaim deed in Texas places a grantee on:

Answer 59

inquiry notice of any defects that exist in the chain of title. Inquiry notice means a grantee is held to know anything that a reasonable investigation might have revealed. Subsequent purchasers are on notice of anything mentioned in a deed in the chain of title.

Question 60

To determine if recording will protect earlier purchasers against subsequent purchasers, one must look to Texas’ recording act, which is a:

Answer 60

notice act.

Notice acts protect subsequent grantees who are bona fide purchasers (BFPs). Recording is irrelevant except as it might give notice.

Question 61

What must a deed have to be valid in TX?

Answer 61

For the deed to be valid, it must be in writing, contain the property description, include conveyancing language, and be signed by the grantor. It is effective from the date of delivery if the deed does not specify an effective date.

Question 62

Landlord must comply with detailed statutory provisions concerning security devices in residential housing. What does this entail?

Answer 62

Landlord must repair or replace a security device on request or notification by the tenant that the device is inoperable or in need of repair or replacement. A landlord may require payment by the tenant for such repairs or replacement if it is necessitated by misuse or damage by the tenant.

(e.g. window latches damaged, fire alarm)

Question 63

Tenant decides he doesn’t like how a shower was repaired in his apartment so he makes his own alterations, but it leads to a plumbing problem.

What are the landlord’s rights?

Answer 63

Tenant committed waste on the property by making the unauthorized alterations, which damaged the plumbing. Waste constitutes an injury to the reversionary interests of the landlord. Landlord can bring a cause of action for waste against the tenant and could receive a judgment for the amount of damages caused to the property.

Question 64

If the lease does not terminate on condemnation, what is the effect for the tenant?

Answer 64

Tenant must continue to pay rent and must seek a portion of the condemnation award for compensation. The tenant is entitled to share in the award to the extent that he has been damaged by such condemnation.

Question 65

T/F: A quitclaim deed prevents the grantee under that instrument from taking title in good faith.

Answer 65

True. That grantee cannot be a BFP!