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289 Cards in this Set

  • Front
  • Back
What kind of language creates a Fee Simple Absolute?
“To A” or “To A and his heirs.”
Note that “and his heirs” is no longer necessary
What are the characteristics of a Fee Simple Absolute?
Absolute ownership of potentially infinite duration
And it is freely devisable, descendible, and alienable
Does the Fee Simple Absolute have an accompanying future interest?
No
What language creates a Fee Simple Determinable?
“To A for so long as...”
“To A during...”
“To A until...”
Clear Durational Language must be used
What happens if the stated condition in a Fee Simple Determinable is violated?
Automatic forfeiture
What are the characteristics of a Fee Simple Determinable?
Freely devisable, descendible, and alienable
However, always subject to the condition
Does the Fee Simple Determinable have an accompanying future interest?
Yes, the possibility of reverter in the grantor
What language creates a Fee Simple Subject to Condition Subsequent?
“To A, but if X event occurs, grantor reserves the right to reenter and retake”
Must use clear durational language AND carve out the right to re-enter
What are the characteristics of a Fee Simple Subject to Condition Subsequent?
No automatic termination of the estate, but cut short at the grantor's option if the stated condition occurs
What is the accompanying future interest of a Fee Simple Subject to Condition Subsequent?
Grantor's right of entry, otherwise known as the power of termination.
What language creates a Fee Simple Subject to Executory Limitation?
“To A, but if X event occurs, then to B”
What are the distinguishing characteristics of a Fee Simple Subject to Executory Limitation?
Just like fee simple determinable, but if condition is broken, estate is automatic forfeited in favor of someone OTHER than the grantor
What is the accompanying future interest of the Fee Simple Subject to Executory Limitation?
The shifting executory interest
Are absolute restraints on the alienation of defeasible fees allowed?
No, they are void
What language creates a Life Estate?
“To A for Life”
What characterizes a Life Estate?
It is an estate that is measured in explicit lifetime terms and never in terms of years.
What is the accompanying future interest in a Life Estate?
Grantor retains a reversion
A third party holds a remainder
What happens at the death of a life tenant?
The estate reverts back to the grantor or his heirs
What is a Life Estate Pur Autre Vie?
A life estate measured by the life of someone other than grantee's
What is the Waste Doctrine?
It is a rule that protects future interest holders
What is Voluntary or Affirmative Waste?
Actual, overt conduct that causes a drop in the estate's value.
How does the Waste Doctrine apply to natural resources?
Life tenant must not consume or exploit natural resources on the property
What are the exceptions to consuming natural resources under the Waste Doctrine?
Prior Use: Prior to the grant, the land was used for exploitation
Open Mines doctrine: use is limited to mines already open
Reasonable Repairs: Life tenant may consume natural resources for repairs and maintenance
Grant: the life tenant may exploit if granted that right
Exploitation: land is only suitable to exploit
What is Permissive Waste?
When land is allowed to fall into disrepair
Does a life tenant have an obligation to repair the property?
Life tenant must simply maintain premises in reasonably good repair
Does a life tenant have a duty to pay taxes?
(1) If there is income from the land, must pay all ordinary taxes on the land.
(2)If no income, then must pay only the premises' fair rental value
What is Ameliorative Waste?
When life tenant attempts to do something to enhance the value of the property.
Life tenant is not allowed to do this unless all future interest holders are known and consent
What estate does the possibility of reverter accompany?
The Fee Simple Determinable
What estate does the Right of Entry / Power of Termination accompany?
The Fee Simple Subject to Condition Subsequent
What is a reversion?
A future interest that arises in a grantor who transfers an estate of lesser quantum than she started with other than a fee simple determinable or a fee simple subject to condition subsequent.
What is a remainder?
A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created
What estate does the remainder always accompany?
A preceding estate of known fixed duration, usually a life estate or a term of years
Can a remainder ever follow a defeasible fee?
No. A remainder never cuts short or divests a prior transferee.
It will always “wait for its turn”
What are the three types of future interests in transferees?
(1) Vested Remainder
(2) Contingent Remainder
(3) Executory Interest
What are the three types of vested remainders?
(1) Indefeasibly vested remainder
(2) Vested Remainder Subject to Complete Defeasance (aka the vested remainder subject to total divestment)
(3) Vested Remainder Subject to Open
What are the general characteristics of a vested remainder?
A remainder is vested if it is both created in an ascertained person, and is not subject to any condition precedent.
Only remainders can be vested
What is the effect of holding an indefeasibly vested remainder?
A holder of this remainder is certain to acquire an estate in the future, with no conditions attached
What language creates an indefeasibly vested remainder?
“To A for life, remainder to B”
What happens if the holder of an indefeasibly vested remainder predeceases the preceding estate holder?
The future interest of the holder of the indefeasibly vested remainder passes by will or intestacy
What is the effect of holding a vested remainder subject to complete defeasance?
It means that a remainderman exists and his taking is not subject to any condition precedent, but his right to possession could be cut short because of a condition subsequent
What language creates a vested remainder subject to complete defeasance?
“To A for life, remainder to B, provided, however, that if B dies under the age of 25, to C”
Where A is alive, and B is 20-years old.
Analyze this problem:
“To A for life, remainder to B, provided, however, that if B dies under the age of 25, to C.
Where A is alive, and B is 20-years old.”
A has a life estate
B has a vested remainder subject to complete defeasance
C has a shifting executory interest.
B will take even if A dies before B is 25. However, B must live past 25 for his estate to retain his interest.
Does the original grantor retain any future interest in a vested remainder subject to complete defeasance?
Yes, he retains a reversion
What is the Comma Rule?
A method of distinguishing between a vested remainder subject to condition subsequent, and a contingent remainder.
Vested Remainder Subject to Condition Subsequent: First is vested remainder language, then conditional language (condition subsequent)
Contingent Remainder: First, conditional language, then vested remainder language
What is a vested remainder subject to open?
Where there is a vested group of takers, at least one of whom is qualified to take.
However, each class member's share is subject to partial diminution because additional takers can still join in
What language creates a vested remainder subject to open?
“To A for life, then to B's children,” where A is alive, and B has two children
When is a class deemed open?
When others can still enter.
On the other hand, the class is deemed closed if maximum membership has been set so persons born thereafter are shut out
What is the Rule of Convenience?
The rule states that a class closes whenever any member can demand possession
What is the Womb Rule?
Prenatal, potential members of a class will be deemed part of it
What happens if a class member predeceases the measuring life?
The heirs of the class member take.
What is a contingent remainder?
If it is created in an unascertained person, or it is subject to a condition precedent, or both.
What language creates a contingent remainder?
“To A for life, then to B's first child,” where A is alive, and B has no children; OR
“To A for life, then to B's heirs” where A is alive and B is alive; OR
“To A for life, then, if B graduates from college, to B” where A is alive, and B is in high school
Do living people have heirs?
No, living people have no heirs
Does grantor have a reversion in a contingent remainder?
Yes
What happens to a contingent remainder if the condition precedent is satisfied during the original grantee's lifetime?
The contingent remainder transforms into an indefeasibly vested remainder
What is the Rule of Destructibility of Contingent Remainders?
A contingent remainder was destroyed if it was still contingent at the time the preceding estate ended.
Does the Rule of Destructibility still apply?
No, it has been abolished.
Now, grantor and heirs hold the estate subject to contingent remainderman's springing executory interest.
What is the Rule in Shelley's Case?
A rule that attached when grantor conveyed to “A for life, then on A's death, to A's heirs,” where A was alive.
In such a case, present and future interests would merge to give A a fee simple absolute.
It was a rule of law, so it controlled despite contrary grantor intent
What is the effect of the Rule in Shelley's Case now?
Abolished everywhere.
Now “to A for life, then on A's death, to A's heirs” means that A gets a life estate, and A's unknown heirs get a contingent remainder.
Grantor has a reversion since A could die without heirs
What is the Doctrine of Worthier Title?
A rule against a remainder in grantor's heirs. This rule is still viable.
If grantor seeks to create a contingent remainder in grantor's heirs, this remainder becomes void.
Original grantee gets a life estate, and grantor retains a reversion.
What is an executory interest?
A future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or his heirs (springing)
What is a shifting executory interest?
A future interest that always follows a defeasible fee and cuts short someone other than the grantor
What language creates a shifting executory interest?
“To A and her heirs, but if B returns from Canada sometime next year, to B and his heirs”
Here B has a shifting executory interest
What is a springing executory interest?
A future interest that always follows a defeasible fee and cuts short the grantor
What language creates a springing executory interest?
“To A, if and when he marries...,” and A is unmarried.
Grantor has a fee simple subject to A's springing executory interest.
So he has a fee simple which will be cut short upon A's marriage
What is the Rule Against Perpetuities?
Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life
Which future interests are subject to the Rule Against Perpetuities?
(1) Contingent Remainders
(2) Executory Interests
(3) Certain Vested Remainders Subject to Open
Which future interests are NOT subject to the Rule Against Perpetuities?
(1) Any future interests in the grantor
(2) Indefeasibly Vested Remainders
(3) Vested Remainders Subject to Complete Defeasance
What are the 4 steps to analyzing potential problems with the Rule Against Perpetuities?
(1) Determine which future interests have been created by the conveyance
(2) Identify conditions precedent to the vesting of the suspect future interest
(3) Find a measuring life
(4) Ask if one can know with certainty, within 21 years of the death of the measuring life, if the future interest holder can or cannot take.
If uncertain, then the future interest is void
What is the Fertile Octogenarian Rule?
Presumes that a person is fertile no matter what
What are two bright line rules of common law Rule Against Perpetuities?
(1) A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law Rule Against Perpetuities
(2) An executory interest with no time limit on the time within which it must vest violates the Rule Against Perpetuities
What happens if there is a grammatically unsound conveyance after striking a future interest due to a violation of the Rule Against Perpetuities?
The entire conditional clause is stricken.
EXCEPTION: Charity-to-Charity conveyances
What is the “Wait and See” or “Second Look” Doctrine?
The vailidity of any suspect future interest is determined on the basis of the facts as they presently exist, at the end of the measuring life.
Effectively eliminates the “what if” or “anything is possible” line of inquiry
What is the Uniform Statutory Rule Against Perpetuities (USRAP)?
It codifies the common law RAP and in addition, provides for a 90 year vesting period.
What is the Cy Pres Doctrine?
If a given disposition violates the RAP, a court may reform it in a way that most closely matches a grantor's intent while still complying with the RAP
For example, any offensive age contingency might be reduced to 21 years
What is a joint tenancy?
A tenancy where two or more own with a right to survivorship
What are the distinguishing characteristics of a joint tenancy?
(1) The right of survivorship: when one joint tenant dies, his share goes automatically to the surviving joint tenants;
(2) A joint tenant's interest is alienable, but not devisable or descendible
What is necessary to create a joint tenancy?
(1) Four unities: Time, Title, Identical interests, and Right to Possess the whole; and
(2) Grantor must clearly express the right of survivorship
Could a holder of a fee simple absolute grant to himself and another a joint tenancy?
Historically, not without the use of a strawman.
How can you sever a joint tenancy?
3 Ways: Sale, Partition, and Mortgage
Does a joint tenant need the other co-tenants' consent to sell or transfer her interest?
No.
What happens to a buyer of a joint tenant's interest?
The four unities are disrupted, so the buyer takes as a tenant in common.
At what point during a sale or transfer does a joint tenant sever the joint tenancy?
Under the doctrine of Equitable Conversion, upon the mere act of entering into the contract for sale or transfer.
In what ways can a joint tenant sever the tenancy by a partition?
(1) By a voluntary agreement;
(2) Partition in kind (court physically divides property);
(3) Forced sale and division of proceeds
In what ways can a joint tenant sever the tenancy by a mortgage?
Majority Rule: Joint tenant's execution of a mortgage on his interest does not sever the joint tenancy.
Minority Rule: One joint tenant's execution of a mortgage or lien on his share severs the joint tenancy as to that now encumbered share.
What is a tenancy by the entirety?
A marital interest between married partners with right of survivorship
How can a tenancy by the entirety be created?
Only between married partners, and the partners share a right of survivorship.
Presumptively created in any conveyance to married partners unless deemed otherwise
Can creditors reach the tenancy by the entirety?
Creditors of one spouse cannot touch the tenancy
Can a unilateral conveyance defeat the tenancy by the entirety?
No, neither tenant acting alone can defeat the right of survivorship
What is the tenancy in common?
Where two or more tenants own with no right of survivorship
What are the distinguishing characteristics of a tenancy in common?
(1) Each co-tenant owns an individual part and each has a right to possess the whole
(2) Each interest is devisable, descendible, and alienable
(3)No survivorship rights between tenants in common
(4) There is a presumption favoring the tenancy in common
Do co-tenants generally have a right to possess the whole?
Yes
How can a co-tenant commit a wrongful ouster of the other tenant?
By wrongful exclusion of the other co-tenant from possession of the whole or any part
Is a co-tenant in exclusive possession liable to the others for rent?
Not unless there is an ouster.
Must a co-tenant who leases all or part of the premises to a third party account to his co-tenants?
Yes, he must provide his co-tenants with a fair share of the rental income.
Can a co-tenant in exclusive possession for the statutory adverse possession period acquire title to the exclusion of others?
Absent an ouster, no, he cannot.
What are carrying costs?
Taxes and mortgage interest payments
How are co-tenants responsible for carrying costs?
They are responsible for their fair share of carrying costs based upon the undivided share that they hold
Is a repairing co-tenant entitled to a right to contribution?
Repairs have to be necessary, and as long as she provides notice to the other co-tenants of the need, she is entitled to contribution
Does a co-tenant enjoy a right to contribution for improvements?
No. But may be entitled to a credit equal to any increase in value caused by the improvement.
When can a co-tenant bring an action for waste against another co-tenant?
During the life of the co-tenancy
Which types of co-tenants have a right to bring an action for partition against the other co-tenants?
Joint tenants or tenants in common
What is a tenancy for years?
A lease for a fixed period of time
Is a notice of termination required to end a tenancy for years?
No, because the date of termination is known from the outset
What is a necessary requirement for a tenancy for years greater than 1 year to be enforceable?
Must be in writing
What is a periodic tenancy?
A lease which continues for successive intervals until Landlord or Tenant give proper notice of termination
In what kind of situations can an implied periodic tenancy arise?
(1) Land is leased with no mention of duration, but provision is made for the payment of rent at set intervals
(2) An oral term of years in violation of the Statute of Frauds creates an implied periodic tenancy measured by the way rent is tendered
(3) In a residential lease, if Landlord elects to holdover a Tenant who has wrongfully stayed on past the conclusion of the original lease, an implied periodic tenancy arises measured by the way rent is tendered.
How is a periodic tenancy terminated?
By providing notice, usually in writing
How far in advance must notice of termination be given in a periodic tenancy?
At least equal to the length of the period itself, unless otherwise agreed.
EXCEPTION: Year-to-year tenancies must provide 6 months' notice
When does a periodic tenancy end?
At the conclusion of a natural lease period
What is a tenancy at will?
A tenancy for no fixed period of duration
What happens if a tenancy at will is not expressly agreed upon?
Payment of regular rent will lead a court to treat it as an implied periodic tenancy
How can a tenancy at will be terminated?
By any party, at any time, however, reasonable demand to vacate is usually needed
What is a tenancy at sufferance?
A tenancy created when Tenant has wrongfully held over past the expiration of the lease.
How long does a tenancy at sufferance last?
Until the Landlord either
(1) Evicts the Tenant; or
(2) Elects to hold Tenant to a new tenancy
How is Tenant liable to third parties?
(1) Tenant is responsible for keeping premises in reasonably good repair
(2) Tenant is liable for injuries sustained by third parties Tenant invited, even if Landlord expressly promised to make all repairs.
What is the Tenant's duty to repair when the lease is silent on the matter?
The Tenant must maintain premises and make ordinary repairs
What is the Law of Fixtures?
Tenant's removal of a fixture is tantamount to voluntary waste.
Fixtures pass with ownership of the land
What's a fixture?
Chattel that by virtue of annexation to realty objectively shows an intent to permanently improve the realty
When can a Tenant remove a fixture?
(1) If an express agreement between Landlord and Tenant allows it; or
(2) If removal of a chattel Tenant installed would not substantially harm the premises
What were and are currently the consequences of a Tenant's expressly covenanted duty to repair in a lease?
(1) Historically, Tenant was liable for any losses to property including those due to forces of nature
(2) Presently, Tenant may terminate lease if the premises are destroyed without Tenant's fault
What are Landlord's options if Tenant breaches his duty to pay rent and is still in possession of premises?
(1) Court eviction; or
(2) Continue relationship and sue for rent due
What is a Landlord not allowed to do if Tenant breaches his duty to pay rent?
Self-help is prohibited
What are Landlord's options if the Tenant breaches his duty to pay rent and abandons the premises?
(1) Surrender
(2) Ignore
(3) Re-let
What does it mean when a Landlord surrenders?
Where Landlord treats Tenant's abandonment of premises as an implicit offer of surrender of the lease, which Landlord accepts
What is required if Tenant surrenders the lease and the unexpired term is greater than one year?
The surrender must be in writing
What are the consequences if Landlord re-lets premises after a Tenant's breach and abandonment?
Landlord can re-let premises on Tenant's behalf and hold him responsible for any deficiencies
Is Landlord obligated to attempt to re-let premises?
In the majority of states, yes.
What is Landlord's duty to deliver possession?
It is a majority rule requiring that Landlord put Tenant in actual physical possession of premises.
Minority Rule: Landlord only need provide Tenant with legal possession
What is the rule regarding Tenant's Implied Covenant of Quiet Enjoyment?
It applies both to commercial and residential leases.
Tenant has right to quiet use and enjoyment of the premises without interference from the Landlord
How does a Landlord breach the Implied Covenant of Quiet Enjoyment?
(1) Actual or Wrongful Eviction
(2) Constructive Eviction
(3) Sometimes for the acts of other Tenants
What are the elements of a Landlord's Constructive Eviction?
(1) Substantial interference: due to Landlord's actions or failure to act,
(2) Notice: Tenant must notify Landlord of the problem and Landlord must fail to respond meaningfully; and
(3) Goodbye: Tenant must vacate within a reasonable time after Landlord fails to fix the problem
Is Landlord liable for the acts of other Tenants?
Generally no.
EXCEPTIONS:
(1) Landlord must not permit a nuisance on site;
(2) Landlord must control common areas
What is the Implied Warranty of Habitability?
Warranty that premises are fit for basic human habitation.
Only applies to residential leases
Can a Landlord waive the Implied Warranty of Habitability?
No
What can the Tenant do if the Implied Warranty of Habitability is breached?
(1) Move out and terminate the lease
(2) Repair and deduct from future rent
(3) Reduce rent or withhold all rent until court determines fair rental value
(4) Remain in possession, pay rent, and then affirmatively seek money damages
What must Tenant do if he withholds rent due to Landlord's breach of the Implied Warranty of Habitability?
Must place the withheld rent into an escrow account to show good faith
What is the rule regarding Landlord's Retaliatory Eviction?
If Tenant lawfully reports Landlord for a housing code violation, Landlord is barred from penalizing the Tenant
EXAMPLES: Raising rent, ending lease, harassing Tenant, or taking other reprisals
Is Tenant allowed to assign or sublet?
Absent a prohibition in the lease, Tenant may freely do so
What is the effect of Landlord consenting to Tenant's assignment or sublease?
Landlord effectively waives right to object to future transfers by that Tenant unless Landlord expressly reserves that right
What is an assignment?
When a Tenant transfers all time remaining in a lease to an Assignee-Tenant
What is the nature of the relationship between the Landlord and an Assignee-Tenant?
They are in privity of estate.
They are liable to each other for all of the convenants in the original lease that “run with the land”
Do Assignor-Tenant and Landlord remain in privity of estate after an assignment?
No
Are Landlord and Assignee-Tenant in privity of contract after the assignment?
No, not unless Assignee-Tenant assumed all promises in the original lease
Are Landlord and Assignor-Tenant in privity of contract after the assignment?
Yes, they remain in privity of contract, and are secondarily liable to each other.
What is a sublease?
Where Tenant transfers some time to a leasing Tenant
What is the relationship between a Landlord and a Sublessee-Tenant?
They are neither in privity of estate nor privity of contract
What is the Common Law standard of Caveat Lessee?
Let Tenant beware.
In tort, Landlord was under no duty to make the premises safe
What are the exceptions to the Common Law Caveat Lessee?
(1) Landlord must maintain all common areas
(2) Landlord must warn Tenant of hidden defects that Landlord knows or should have known about
(3) Landlord who volunteers to make repairs must complete them with reasonable care
(4) Landlord who leases public space and who should know, because of the nature of the defect and length of the lease, that Tenant will not repair, is liable for any defects on premises
(5) Landlord liable for any defect on site for short term lease of furnished dwellings
What is the definition of an easement?
A grant of a nonpossessory property interest that entitles its holder to some form of use or enjoyment of another's land, called the servient tenement
What is an affirmative easement?
An easement that grants a right to do something on the servient land
How are affirmative easements created?
(1) By Prescription
(2) By Implication
(3) By Necessity
(4) By Grant
How is an affirmative easement created by prescription?
By satisfying the elements of adverse possession:
(1) Continuous use for the given statutory period
(2) Open and notorious use
(3) Actual use; and
(4) Hostile use
How is an affirmative easement created by implication?
An easement will be implied on a transferee's behalf if:
(1) Previous use had been apparent, and
(2) Parties expected that the use would survive division because it is reasonably necessary to the dominant land's use and enjoyment
How is an affirmative easement created by necessity?
Easement of right of way will be implied by necessity if grantor conveys a portion of his land with no way out except over some part of grantor's remaining land
How is an affirmative easement created by grant?
In an express writing
How must an affirmative easement be granted in order to endure for more than one year?
In a writing that complies with the formal elements of a deed
What is a negative easement?
An easement that entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible
What are the recognized categories of negative easements?
Light, Air, Support, Streamwater from an artificial flow, and in some minor jurisdictions, scenic view
Is there an automatic right to a negative easement?
No, it must be created expressly
What is an easement appurtenant to land?
An easement that benefits its holder in his physical use or enjoyment of the property.
Always involves two pieces of property:
(1) A dominant tenement derives benefit
(2) Servient tenement bearing a burden
What is an easement held in gross?
An easement that confers upon its holder only some personal or pecuniary advantage that is not related to his use or enjoyment of his land.
Servient land is burdened, but no benefit is conferred to the dominant tenement
Is an easement appurtenant transferable?
Yes, it passes automatically with the dominant tenement, even if not mentioned in the conveyance
When is the only time an easement held in gross will be transferable?
If it is for a commercial purpose
How is the scope of an easement established?
By the terms of the grant, or the conditions that create it
Is a unilateral expansion of an easement allowed?
No
How is an easement terminated?
Estoppel, Necessity, Destruction, Condemnation, Release, Abandonment, Merger Doctrine, Prescription
How is an easement terminated by estoppel?
If a servient owner materially changes his position in reasonable reliance on the easement holder's assurances that the easement will not be enforced
How is an easement by necessity terminated?
As soon as the necessity ends.
But if it was created expressly by grant, then it won't end when the need ends
How is an easement terminated by destruction?
If the servient land is destroyed, other than through the willful conduct of the servient owner.
How is an easement terminated by condemnation?
If the servient tenement is condemned by eminent domain
Can an easement be terminated by a written release?
Yes, it must be given by the easement holder to the servient owner
How can an easement be terminated by abandonment?
The easement holder must demonstrate by physical action the intent to never use the easement again
What happens when title to the easement and title to the servient land vest in the same person?
The easement is extinguished by virtue of the Merger Doctrine
How can an easement be terminated by prescription?
The servient owner may extinguish the easement by interfering with it in accordance with elements of adverse possession:
Continous, open and notorious, actual, and hostile interference to the easement holder
What is a license?
It is a mere privilege to enter another's land for some delineated purpose
Are licenses subject to the Statute of Frauds?
No
Are licenses freely revocable?
Yes, unless estoppel applies
What is an oral easement equivalent to?
It violates the Statute of Frauds, thus it is equivalent to a freely revocable license
What do profits entitle its holder?
The right to enter the servient land and take from it the soil or some substance of the soil.
Profits share all the rules of easements
What is a covenant?
A promise to do or not to do something related to land
How is a covenant different from an easement?
The covenant does not grant a property interest, rather it is a contractual limitation in relation to the land
How do you differentiate between a covenant and an equitable servitude?
Depends on the remedy sought.
A covenant will seek money damages
An equitable servitude seeks an injunction
What is required for a covenant to be binding on its successors?
Both the burden and the benefit must run together
What are the requirements for the burden on a covenant to run with the parcel to a successor?
(1) Original promise between neighbors must be in writing
(2) Original parties must have intended that covenant run
(3)Promise must affect parties' legal relations as landowners and not simply as members of a community at large
(4) There must be both horizontal and vertical privity
(5) Transferee of burdened land must have had notice of the promise when she took
What is horizontal privity and how is it established for purposes of establishing a binding burden on a successive transferee?
It is the nexus between the originally promising parties of the covenant.
It requires that they be in succession of estate.
i.e. must establish grantor/grantee, landlord/tenant, or mortgagor/mortgagee relationship
What is vertical privity and how is it established for purposes of establishing a binding burden on a successive transferee?
It is the nexus between the original burdened party, and the transferee.
It requires some non-hostile nexus such as contract, devise, or descent
What are the requirements for the benefit on a covenant to run with the parcel to a successor?
(1) Original promise from burdened party to benefiting party must have been in writing
(2) Original parties intended that benefit would run
(3) The promise affects the parties as landowners
(4) Vertical privity: some non-hostile nexus b/n original owner of benefiting land and transferee
What is an equitable servitude?
A promise that equity will enforce against successors.
It is accompanied by injunctive relief
What is required for an equitable servitude to bind a successor?
(1) Original promise was in writing
(2) Original parties intended that promise would be enforceable by and against assignees
(3) Promise affects the parties as landowners
(4) Assignees of the burdened land had notice of the promise
When is a property buyer enjoined from using land in some way due to an implied equitable servitude?
It usually involves someone who owns multiple lots and sells them.
A buyer will be enjoined from using land in some way if:
(1) When sales began, original seller had a general scheme of residential development which included defendant's lot, and (2) Defendant lotholder had notice of the promise contained in the prior deeds
What are the forms of notice that can be imputed to a defendant lotholder in an implied equitable servitude case?
Actual Notice: Defendant had literal knowledge of the promises in the prior deeds
Inquiry Notice: Form of constructive notice. There is notice if the rest of the neighborhood conforms to the common restriction
Record Notice: Form of constructive notice sometimes imputed to buyers on the basis of publicly recorded documents
What are the two differing views on Record Notice?
(1) Subsequent buyer is on record notice of the contents of prior deeds transferred to others by a common grantor
(2) New York Rule: Subsequent buyer does not have record notice of the contents of those prior deeds transferred to others by the common grantor
What is an equitable defense against the enforcement of an equitable servitude?
A party can allege the circumstances have changed.
However, changes must be so pervasive that the entire area or subdivision has changed.
Insufficient to show piecemeal or limited changes
What is the general rule of adverse possession?
Possession for a statutorily prescribed period of time can, if certain elements are met, ripen into title
What are the requirements for someone to take title through adverse possession?
(1) Continuous, uninterrupted possession for statutory period
(2) Open and Notorious
(3) Actual
(4) Hostile
Does an adverse possessor's state of mind matter?
MBE: No
How does tacking work in the context of adverse possession?
One adverse possessor may tack on to this time with the time of a predecessor as long as there is privity between the parties.
EXCEPTION: If there is an ouster
What happens if the true owner is afflicted by a disability at the start of the adverse possession?
The statute of limitations does not run
What are the two primary steps to the land conveyance process?
Step 1: The land contract, which endures until
Step 2: The closing, where the deed becomes the operative instrument
What are the basic requirements of a land contract?
(1) Land contract must be in writing signed by the party to be bound
(2) Must describe land and must state some consideration
What can the buyer do if the amount of land recited in a land contract is more than the actual size of the parcel?
Buyer can request specific performance with a pro rata reduction in purchase price
What is the Doctrine of Part Performance?
It is a Statute of Frauds exception.
If two out of three are met, buyer can force specific performance:
(1) Buyer takes possession (2) Buyer pays all or part of the price; and/or
(3) Buyer makes substantial improvements
Who bears the risk of loss when a land contract is signed?
MBE: Under the Doctrine of Equitable Conversion, buyer bears risk of loss unless contract states otherwise.
New York: as long as it's not buyer's fault, risk of loss remains with seller until buyer has title or takes possession
What are the implied promises in every land contract?
(1) Seller promises to provide marketable title at closing
(2) Seller is liable for failing to disclose latent material defects
What makes a title marketable?
When the title is free from reasonable doubt
What can make a title unmarketable?
(1) Adverse Possession
(2) Encumbrances: servitudes and mortgages render title unmarketable unless buyer has waived them
(3) Zoning Violations
What kind of seller acts are not excused by a general disclaimer of liability?
Fraud or Failure to Disclose
Does the land contract contain implied warranties of fitness or habitability?
No. However, implied warranty of fitness and workmanlike construction apply to the sale of a new home by a builder-vendor
What is the controlling document at the closing?
The deed
What are the requirements to pass legal title?
(1) Lawful Execution of a Deed
(2) Delivery of Deed
(3) Covenants for Title and one of three types of deeds
What is the standard for the lawful execution of a deed?
Deed must be in writing and signed by grantor.
Does the deed need to recite consideration to be valid?
No
How detailed does the description of the land in the deed have to be?
Just has to be unambiguous and have a good lead
What is the standard for a valid delivery of deed?
The test is solely for present intent.
What matters is whether grantor had the present intent to be immediately bound irrespective of whether or not the deed itself was literally handed over.
Is the physical transfer of the deed instrument required to satisfy the delivery of deed?
No
What happens if the deed is rejected by the grantee?
This defeats the delivery of deed
What is the effect of transferring a deed, absolute on its face, to a grantee along with an oral condition?
The oral condition drops out.
Is delivery by escrow permissible?
Yes
What are the three types of deeds?
(1) Quitclaim Deed
(2) General Warranty Deed
(3) Statutory Special Warranty Deed (New York: Bargain and Sale Deed)
What does the quitclaim deed guarantee?
Nothing. It makes no promises
What covenants does the General Warranty Deed contain?
(1) Covenant of Seisin
(2) Covenant of Right to Convey
(3) Covenant Against Encumbrances
(4) Covenant for Quiet Enjoyment
(5) Covenant of Warranty
(6) Covenant for Further Assurances
Which are the present covenants?
(1) Covenant of Seisin
(2) Covenant of Right to Convey
(3) Covenant Against Encumbrances
What does the General Warranty Deed promise?
Warrants against all defects in title
Which are the future covenants?
(1) Covenant for Quiet Enjoyment
(2) Covenant of Warranty
(3) Covenant for Further Assurances
What does the Covenant of Seisin guarantee?
That grantor owns this estate he now claims to convey
What does the Covenant of Right to Convey guarantee?
That grantor has the power to make the transfer.
i.e. Grantor is under no temporary restraints on alienation, and no disability
What does the Covenant Against Encumbrances guarantee?
That there are no servitudes or liens on the land
What does the Covenant for Quiet Enjoyment guarantee?
The grantee won't be disturbed in possession by a third party's lawful claim for title
What does the Covenant of Warranty guarantee?
Grantor promises to defend grantee should there be lawful claims of title brought by others
What does the Covenant for Further Assurances promise?
Grantor promises to do whatever is reasonably necessary in the future to perfect the title if it later turns out to be imperfect
What are the two promises contained in a Statutory Special Warranty Deed?
(New York's Bargain and Sale Deed)
Only two promises that grantor makes on behalf of himself:
(1) He has not conveyed land to anyone other than grantee; and
(2) That land is free from encumbrances by the grantor
What are the two brightline rules regarding the Recording System?
(1) If a bona fide purchaser is in NOTICE jurisdiction, purchaser wins regardless of whether or not she records before another purchaser
(2) If a bona fide purchaser is in a RACE-NOTICE jurisdiction, purchaser wins if she records properly before any other purchaser
Who is a Bona Fide Purchaser?
(1) A purchaser who purchases land for value (any consideration counts); and
(2) Without notice that someone else bought it before
Why are donees doomed under Recording Statutes?
Because recording statutes don't protect donees, heirs, or devisees unless the shelter rule applies.
What types of notice exist?
(1) Actual
(2) Inquiry: Purchaser is deemed to be on inquiry notice of whatever an examination of the land would show
(3) Record: there is record notice if at the time a purchaser takes, a prior purchaser's deed was properly recorded within the chain of title
The Notice Statute
“A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded”
Last bona fide purchaser to enter wins
The Race-Notice Statute
“Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.”
Buyer to prevail must be a bona fide purchaser and win the race to record
What is the effect of the Chain of Title?
Recording properly within the chain of title gives record notice to subsequent takers
What is the Shelter Rule?
One who takes from a bona fide purchaser will prevail against any entity that the transferor or bona fide purchasor would have prevailed against
What is a Wild Deed?
If a deed, entered on the records has a grantor unconnected to the chain of title, the deed is a wild deed, and it is incapable of giving record notice of its existence
What is the rule of Estoppel by Deed?
If one conveys realty in which he has no interest, he is estopped from denying the validity of the conveyance if he later acquires the interest he had earlier transferred
What is a mortgage?
A conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a monetary obligation
What does a mortgage require?
(1) A debt
(2) A voluntary transfer of a security interest I ndebtor's land to secure the debt
What is an Equitable Mortgage?
A mortgage where land is the collateral, but instead of executing a note or mortgage deed, mortgagor hands mortgagee a deed t othe land that is absolute on its face
Is parol evidence admissible to show the intent of the parties in regards to an Equitable Mortgage?
Yes
What is the effect of an Equitable Mortgagee/Creditor selling land to a bona fide purchaser?
Then the bona fide purchaser owns the land
Who has title and right to possession prior to a mortgage foreclosure?
The debtor-mortgagor
What does the creditor-mortgagee have on the collateral property before a foreclosure?
A lien, the right to look to the land if there's a default
Can parties to a mortgage transfer their interests?
Yes
How can a Creditor-Mortgagee transfer his interest?
(1) Endorsing the note and delivering it to transferee;
(2) By executing a separate document of assignment
What happens to the transferee if a Creditor-Mortgagee transfers his interest by endorsing and delivering a note?
The transferee is eligible to become a holder in due course
What are the requirements for a transferee to become a holder in due course?
(1) Note must be negotiable in form
(2) Original note must be endorsed and signed by the named mortgagee
(3) Original note must be delivered to transferee (no copies)
(4) Transferee must take note in good faith, without notice of any illegality
(5) Transferee must pay value for the note, meaning some amount that is more than nominal
What are the benefits enjoyed by a holder in due course?
He can foreclose the mortgage and takes the note free of any personal defenses of the maker such as:
Failure of consideration, fraud in the inducement, waiver, unconscionability, estoppel, and payment
What defenses is a holder in due course still subject to?
Real defenses:
Infancy, other incapacity, duress, illegality, fraud in the execution, forgery, discharge in insolvency, and any other insolvency
What happens if a Debtor-Mortgagor sells the land?
The lien remains on the land so long as the mortgage instrument was recorded properly
Who is personally liable on the debt if Debtor-Mortgagor sells the land to a buyer?
If buyer has assumed the mortgage, both are personally liable.
If buyer takes “subject to mortgage” only the original mortgagor is personally liable.
What is the foreclosure procedure that must be taken to satisfy debts?
(1) Mortgage must foreclose by proper judicial action
(2) Fund distribution begins with attorney's fees, expenses of the foreclosure, any accrued interest on the first mortgage
(3) Claimants are entitled to satisfaction in full before a subordinated lienholder may take
What if the sale proceeds of a foreclosure are not enough to satisfy a debt?
Creditor/Mortgagee may bring a deficiency action against the Debtor/Mortgagor
What happens if after the sale proceeds of a foreclosure, there is a surplus?
Junior liens are paid off in order of priority. Any remaining surplus is then given back to the debtor
What happens to junior and senior interests to a mortgage upon foreclosure?
The foreclosure effectively terminates junior interests to the mortgage being foreclosed, but does not affect senior interests.
Which parties must necessarily be joined in a foreclosure action?
(1) Those with interests subordinate to those of the foreclosing party
(2) Debtor-Mortgagor
What is necessary to establish priority of interest as to a creditor?
The mortgage must be properly recorded
How is priority determined among lienholders?
First in time, first in right
What is a purchase-money mortgage?
A mortgage given to secure a loan that enables the debtor to acquire the encumbered land
What kind of priority does a purchase-money mortgagee have?
Superpriority as to the parcel that is financed
Are subordination agreements among mortgage creditors allowed?
Yes
Are Redemptions in Equity generally allowed?
Yes. At any time prior to the foreclosure sale, debtor has the right to redeem the land and free it of the mortgage.
Can debtor waive the right to redeem in the mortgage?
No
If a land is improved by buildings and an adjacent landowner's excavation causes improved land to cave in, when is the excavator liable?
Only if he is negligent
When is the only time an excavator will be held strictly liable for damage to a neighboring improved land?
If plaintiff, owner of improved adjacent lands, can prove that land would have collapsed even in its natural state.
Under the Riparian Doctrine, who owns the water from a watercourse?
Those who own land bordering the watercourse
How much water can riparians use from a watercourse?
Only a reasonable amount, and one riparian's use cannot interfere with another's
Under the Prior Appropriation Doctrine, who owns water at first, and who can acquired later?
State owns first.
Water can later be acquired by an individual by priority of beneficial use.
It is irrelevant if the individual is a riparian
How much ground water can the surface land owner use?
Only a reasonable amount. Must not be wasteful
What are Landowner's rights in regards to surface waters from rain, springs, or melting snow?
May change course to combat its flow, but there's a duty to prevent unnecessary harm to others' land
What is a possessor's right against trespass?
The right to be free of an invasion of land by tangible physical objects
What is a possessor's right against private nuisance?
The right to be free from substantial and unreasonable public interference with one's use and enjoyment of land.
Does private nuisance law protect a possessor's hypersensitive use of the land?
No
What is the doctrine of eminent domain?
It means the government has a right to take private property for public use in exchange for just compensation
What is an explicit taking under eminent domain?
An act of governmental condemnation
What is an implicit or regulatory taking under eminent domain?
Governmental regulation that has the effect of a taking
What are two remedies against an implicit or regulatory taking?
(1) Compensation to the owner; or
(2) Termination of the regulation
What are the government's zoning powers?
They may reasonably control land use
What is variance?
A departure from the literal restrictions of a zoning ordinance that is granted by administrative action
How is variance obtained?
Proponent must show:
(1) Undue hardship; and (2) Variance won't work detriment to surrounding property values
What is non-conforming use?
A use that exists at the time of passage of a zoning act that does not conform to the statute.
The use cannot be eliminated at once unless owner is compensated.
What are unconstitutional exactions?
Amenities that a government seeks in exchange for granting permission to build
How must exactions be constructed in order to be deemed constitutional?
They must be reasonably related in nature and scope to the impact of the proposed development.