WRONG Flashcards
A vested remainder subject to total divestment arises when
the remainderman is in existence and ascertained and his interest is not subject to any condition precedent, but his right to possession and enjoyment is subject to being defeated by the happening of a condition subsequent.
Can a life tenant be prohibited from committing waste?
Yes, always.
Life tenants are obligated to make which payments on a mortgage on the land?
Only the interest.
Does a life tenant have to pay principal?
A life tenant must pay interest on any encumbrance on the land to the extent of income or profits derived from the land, but she does not have to pay principal. The remaindermen must pay the principal to protect their interest in the property.
A shifting executory interest is
a future interest that divests the interest of another transferee. A conveyance from “O to A for life, then to B; but if B predeceases A, to C” creates a life estate in A, a vested remainder subject to total divestment in B (see below), and a shifting executory interest in C, because C’s interest would divest the interest of B (another transferee).
A grantor who conveys a lesser estate than the grantor owns retains __________.
A Reversion
In the case of a will, the perpetuities period begins to run on the date:
The testator dies.
The validity of interests under the Rule Against Perpetuities is determined at the time the interests are created. The interests in a will are created when the will becomes effective, which is on the testator’s death. Thus, the perpetuities period does not begin to run on the date the will is executed or admitted to probate.
A grantor who conveys a fee simple determinable retains __________.
A possibility of reverter.
are reversions subject to the rule against perpetuities?
No.
The Rule applies to the following interests in property:
(i) contingent remainders,
(ii) executory interests,
(iii) class gifts (even if vested remainders),
(iv) options and rights of first refusal, and
(v) powers of appointment.
How is a fee simple subject to condition subsequent created?
When the grantor retains the power to terminate the grantee’s estate upon the happening of a specified event.
How long does grantee’s estate continue with a fee simple subject to condition subsequent?
With an FSSCS, grantee’s estate continues until the grantor exercises his right of entry/power of termination by suing or making reentry.
The following words usually are held to create conditions subsequent:
“upon condition that”
“provided that”
“but if”
“if it happens that”
When does a fee simple determinable terminate?
A fee simple determinable automatically terminates upon the happening of a specified event and revers to grantor
What kind of language usually creates a FSD?
durational, adverbial language like
“for so long as”
“while”
“during”
“until”
How do future interests pass?
Future interests pass at death by will or inheritance unless subject to an express of implied contingency of survival.
In the case of a deed, the perpetuities period begins to run on the date:
the deed is delivered with the intent to pass title
When a mortgagee transfers a promissory note, for the transferee to become a holder in due course:
- The note must be negotiable in form—i.e., the note must be payable to bearer or to the order of the named payee and must contain a promise to pay a fixed amount of money (although it MAY provide for an adjustable interest rate) and no other promises (although it MAY contain an acceleration clause and an attorneys’ fee clause);
- The named payee must indorse (i.e., sign) the original note—NOT a copy thereof;
- The original note must be delivered to the transferee; and
- The transferee must pay value for the note and take the note in good faith, without notice that the note is overdue or has been dishonored, or that the maker has any defense to the duty to pay it.
What are due-on-sale clauses?
Due-on-sale clauses are valid restraints on alienation and allow a lender to accelerate the debt. They benefit the lender by affording protection against a sale to a poor credit risk or a person likely to commit waste, and they also allow the lender to raise the interest rate when the property is sold.
“Power of sale” provisions generally apply to what type of security interest in land?
deeds of trust
What is a deed of trust?
A deed of trust is a security interest in land by which the debtor (i.e., the trustor) transfers title to the land to a third party (i.e., the trustee), such as the lender’s lawyer or a title insurance company, acting on behalf of the lender (i.e., the beneficiary).
If a real covenant is more restrictive than a zoning ordinance, __________.
the covenant controls.
If, on the other hand, the zoning ordinance were more restrictive than the covenant, then the ordinance would control. In other words, the more restrictive of the two controls.
What is a covenant?
A covenant is a promise to do or not do something on the land.
Does a restrictive covenant that limits development on the land render title unmarketable?
No, if the buyer waives title defects in the land sale contract.
In a real estate sales contract, the Statute of Frauds typically requires
(i) the identity of the parties,
(ii) the identity of the subject matter,
(iii) consideration (absent a donative transfer), and
(iv) the signature of the party to be charged, namely the seller.
A grandfather conveyed a parcel of land “to my granddaughter and her heirs, but should my granddaughter or her successors attempt to convey the property, then to my grandson and his heirs.”
How is the grandson’s interest in the property best described during his lifetime?
No interest.
For the burden of a real covenant to run to a successor in interest, the successor must be in __________ with the covenantor.
vertical privity
Which of the following will preclude the mortgagee’s right to foreclose upon the mortgagor’s default?
the mortgagee’s acceptance of a deed in lieu of foreclosure
If an adverse possessor uses land in compliance with a recorded real covenant for the limitations period, he:
takes title subject to the real covenant.
The order of priority for allocating mortgage foreclosure sale proceeds is as follows, from first to last:
- Expenses of the sale, including attorneys’ fees, and court costs;
- The principal and accrued interest on the foreclosing party’s loan;
- Any junior lienors in the order of their priority; and then
- The mortgagor. In many cases, no surplus remains after the principal debt is paid off.
