Ca12 Real Property

Front 1

What is a present possessory estate, and what are the five general present possessory estates in land?

Back 1

It's an interest that gives the holder the right to present possession. Types: (1) Fee simple absolute, (2) defeasible fees, (3) fee tail, (4) life estate, (5) tenants (i.e., estate for years, periodic estates, estates at will, tenancy at sufferance)

Front 2

What is a fee simple absolute? What can you do with it?

Back 2

The largest estate recognized by law. It can be sold, divided, devised, or inherited, and it has an indefinite or potentially infinite duration. A free simple is presumed in the absence of express contrary intent.

Front 3

What is a defeasible fee, and what are the three types of defeasible fees?

Back 3

It's a fee simple estate (i.e., of uncertain or potentially infinite duration) that can be terminated upon the happening of a stated event. Types: (1) fee simple determinable (and possibility of reverted), (2) fee simple subject to condition subsequent (and right of reentry), (3) fee simple subject to an executory interest.

Front 4

What is a fee simple determinable (and what is a possibility of reverter)? How do you create it?

Back 4

It automatically reverts to the grantor when some stated even happens (i.e., the estate automatically terminates). You create it with durational language (“for so long as”, “while”, “during”, or “until”). You can convey the fee simple determinable, but the grantee takes it subject to the estate's being terminated by the specified event. (Words like “for the purpose of” or “to be used for” just state intent, but they aren't limitations.) The possibility of the reverter is transferable, descendible, and devisable.

Front 5

What is a fee simple subject to condition subsequent (and right of reentry)? How do you create it?

Back 5

It's an estate in which the grantor reserves the right to terminate the estate upon the happening of some stated event. It doesn't automatically terminate like the fee simple determinable. You create it with conditional words like “upon condition that” or “provided that” “but if” “if it happens that.” The right of entry is almost always devisable and descendible, but some won't let you transfer it inter vivos.

Front 6

What happens if a grant contains language that looks like it's a fee simple determinable and a fee simple subject to condition subsequent?

Back 6

It will likely be construed as creating a fee simple subject to a condition subsequent because the forfeiture is option at grantor's election (i.e., it's not automatic) and because American policy disfavors forfeitures.

Front 7

What is a fee simple subject to an executory interest?

Back 7

If a fee simple estate terminates upon the happening of a stated event (whether it's a fee simple determinable or subject to condition subsequent) and then passes to a third party rather than reverting to the grantor, the third party has an executory interest. (“To A and his heirs for so long as liquor is not sold on the premises; in that even, to B”) B now has an executory interest.

Front 8

What is a fee tail?

Back 8

It's an estate where inheritability is limited to lineal heirs. It is created by the words “to A and the heirs of his body.” Most jurisdictions have abolished the fee tail, and an attempt to create one just results in a fee simple.

Front 9

What is a life estate and what are the two conventional types?

Back 9

It's one measured by the life or lives or one or more persons. (1) For life of grantee: this is the usual kind, it's measured by the life of the grantee (“to A for life”) (or “to B after the life of A”). (2) Life estate pur autre vie (life of another): measured by the life of someone other than the grantee (“to A for the life of B”). It is created when the life tenant conveys his life estate to another.

Front 10

What are the rights and duties of a life tenant of a life estate?

Back 10

The life tenant is entitled to any ordinary uses and profits of the land, but cannot do anything that injures the interests of a remainderman or reversioner. A future interest holder can sue for damages or to enjoin them.

Front 11

What are the types of waste that a life tenant can commit?

Back 11

(1) Affirmative (voluntary) waste (very limited exploitation of natural resources); (2) permissive waste (when life tenant fails to protect or preserve the land, which is part of a different card); (3) ameliorative waste (a change that actually benefits the property economically, which is on a different card).

Front 12

What are the four duties of a life estate tenant to protect or preserve the land (the permissive waste doctrine)?

Back 12

Permissive waste (one of three types of waste) occurs when a life tenant fails to protect or preserve the land. Obligations: (1) preserve land and structures in a reasonable state of repaid; (2) pay interest on mortgages (not principal); (3) pay ordinary taxes; (4) pay special assessments for public improvements of short duration. Not obliged to insure the property in the remaindermen's benefit or responsible for damages by a third party tortfeasor.

Front 13

What is ameliorative waste and when can the life estate tenant alter or demolish existing buildings (3)?

Back 13

It's one of the three types of waste, and it's when there's a change that benefits the property economically. It was actionable at common law, but now a life tenant may alter or even demolish existing buildings if: the (1) market value of the future interests is not diminished, AND EITHER (2) the remaindermen don't object, or (3) a substantial and permanent change in the neighborhood conditions (e.g., residential to 90% industrial) has deprived the property in its current form of reasonable productivity or usefulness.

Front 14

Can a life estate tenant renounce his interest? What happens?

Back 14

If a life tenant who receives the estate by will or intestacy renounces his interest, the future interest following the life estate is generally accelerated so that it becomes immediately possessory.

Front 15

What is a future interest, generally? What are the five topics that come up?

Back 15

Gives its holder the right or possibility of future possession of an estate. It is a present, legally protected right in the property. Topics: (1) reversionary interests (possibility of reverter and right of entry), (2) remainders, (3) executory interests, (4) transferability of remainders and executory interests, (5) class gifts.

Front 16

Are reversionary interests vested for the purpose of the rule against perpetuities?

Back 16

Yes

Front 17

What is a remainder interest?

Back 17

It's a future interest in a third person that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate, and it cannot follow a time gap after the preceding estate. It must be expressly created in the instrument (O conveys “to A for life, then to B and his heirs”; B has a remainder.

Front 18

What are the four types of remainder interests?

Back 18

Remember it's a future interest in a third person that can become possessory on the natural expiration of the preceding estate. Types: (1) indefeasibly vested remainder (created in an existing and ascertained person and not subject to a condition precedent); (2) vested remainder subject to open (in a class of persons that's certain to become possessory, but subject to diminution as more people join the class, as in children); (3) vested remainder subject to total divestment (it has a condition subsequent on it that might revoke the possessory interest); (4) contingent remainder (those created in unborn or unascertained persons, or subject to a condition precedent).

Front 19

If language is ambiguous, how will courts construe language that might give a contingent remainder, executory interest, or vested remainder?

Back 19

Because policy favors early vesting of estates, the preference is for a vested remainder.

Front 20

There are two types of contingent remainders, explain.

Back 20

(1) Subject to condition precedent (it must be satisfied before the remainderman has a right to possession); (2) unborn or unascertained persons (it's contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding estate ends)

Front 21

Discuss the modern rule if a contingent remainder fails to vest before the preceding estate terminates

Back 21

At common law, a contingent remainder was destroyed if it failed to vest before or upon the termination of the preceding estate (Ex: “to A for life, then to B if she reaches 21”, A dies before B is 21). In most states, this becomes an executory interest. The old rule was to destroy the remainder.

Front 22

What is the Rule in Shelley's Case?

Back 22

It a rule against remainders in grantee's heirs. At common law, if the same instrument created a life estate in A and gave the remainder only the A's heirs, then the remainder was ignored and A took the life estate and the remainder. Ex: O conveys “to A for life, then to B for life, then to the heirs of A.” The remainder was not to A's heirs, but to A. But this has been abolished in most states.

Front 23

What is the doctrine of worthier title?

Back 23

It's a rule against remainders in the grantor's heirs. A remainder in the grantor's heirs is invalid and becomes a reversion in the grantor. Ex: O grants “to A for life, then to the heirs of O.” A ends up with a life estate, and O has a reversion. It's just a rule of construction, so you can draft around it. It also only applies to inter vivos transfers and only if the word “heirs” is used.

Front 24

What is an executory interest and what are two types?

Back 24

They are future interests in third parties that either divest a transferee's preceding estate (shifting interests) or follow a gap in possession or cut short a grantor's estate (springing interests). They are not considered vested and thus are subject to the rule against perpetuities. Springing: Grant from O “to A and his heirs when A marries B” (divests the grantor's estate). Shifting: Grant from O “to A for life, then to B and his heirs; but if B predeceases A, then to C and his heirs” (divests transferee's preceding estate)

Front 25

Discuss the transferability of remainders and executory interests

Back 25

Vested remainders are fully transferable, descendible, and devisable. This is true of contingent remainders and executory interests. If a future interest is transferable, then it's subject to involuntary transfer.

Front 26

What are the two types of class gifts and how do courts decide when a class closes?

Back 26

It's a group of people having a common characteristic (children, nephews). It can be vested subject to open (where at least one group member exists) or contingent (where all group members are unascertained). A class closes when some member of the class can call for distribution (if any child is alive, for example).

Front 27

What is a trust?

Back 27

It's a fiduciary relationship with respect to specific property (res) wherein the trustee holds legal title to the property subject to enforceable equitable rights in a beneficiary. The creator of a trust is the settlor, who must own the property at the time of trust creation and must have had the intent to create the trust.

Front 28

What are the ways that a trust can be created?

Back 28

By will (testamentary trust), inter vivos transfer of the trust res, or inter vivos declaration that the settlor is holding property in trust. All trusts of real property must be in writing. Note that a settlor may bequeath (by will) property to a trust created during his lifetime (i.e., he may “pour it over” into the trust).

Front 29

How do you form a charitable trust?

Back 29

It must have a charitable purpose. They are different from private trusts: (1) it must have indefinite beneficiaries, (2) it can be perpetual (i.e., the rule against perpetuities doesn't apply), and (3) the cy pres doctrine applies.

Front 30

What is the Cy Pres doctrine?

Back 30

It applies to charitable trusts. It allows a court to select an alternative charity when the purpose of the settlors becomes impracticable or impossible.

Front 31

State the rule against perpetuities

Back 31

No interest in property is valid unless it must vest, if at all, not later than 21 years after some life in being (“measuring life”) at the creation of the interest. If there is any possibility that the interest might vest more than 21 years after a life in being, the interest is void.

Front 32

What interests does the rule against perpetuities apply to?

Back 32

Contingent remainders, executory interests, vested remainders subject to open (class gifts), options to purchase (not attached to a leasehold), rights of first refusal, and powers of appointment.

Front 33

For the purposes of the rule against perpetuities, when does the perpetuities period begin to run?

Back 33

It depends on the instrument and the interest created: for interests granted by will, it runs from the date of the testator's death; for deeds, it is the date of delivery. The period runs on a irrevocable trust from the date it is created; it runs on a revocable trust from the date it becomes irrevocable.

Front 34

When does an interest vest for the purposes of the rule against perpetuities?

Back 34

When it becomes (1) possessor, or (2) an indefeasibly vested remainder or vested remainder subject to total divestment.

Front 35

What is a “life in being” for the purposes of the rule against perpetuities?

Back 35

Unless another measuring life is specified, the one connected with the vesting of the interest is used. Any lives can be measuring lives, but they have to be human and of reasonable number.

Front 36

What happens if you violate the rule against perpetuities?

Back 36

It destroys only the offending interest.

Front 37

Generally, an executory interest following a defeasible fee violates the rule against perpetuities. Explain.

Back 37

Ex: “to A for so long a no liquor is consumed on the premises, then to B” This is because B's executory interest could vest some time beyond the RAP. B's interest is stricken, and the grantor has a possibility of a reverter.

Front 38

Generally, an age contingency beyond age 21 in an open class violates the rule against perpetuities. Explain.

Back 38

Ex: “to A for life, then to those of A's children who attain the age of 25.” The remainder in A's children violates the rule.

Front 39

What is the fertile octogenarian doctrine?

Back 39

A woman is conclusively presumed to be capable of bearing children, regardless of her age or medical condition. Ex: “to A for life, then to A's children for life, then to A's grandchildren in fee.” The remainder to A's grandchildren is invalid despite the fact that A is 80 years old.

Front 40

An unborn widow or widower often violates the rule against perpetuities. Why?

Back 40

A person's widow or widower is not determined until his death, so it may turn out to be someone who was not in being at the time of disposition. Ex: O conveys “to A for life, then to A's widow for life, then to A's surviving issue in fee.” The gift to A's issue is invalid because A's widow might be a spouse who was not in being when the interest was created. But the remainder to A's children is valid because they would be determined at A's death.

Front 41

Option contracts and rights of first refusal sometimes violate the rule against perpetuities. Why?

Back 41

An option to purchase or right of first refusal that is structured so that it might be exercised later than the end of the perpetuities period if void. Example: O conveys Blackacre to A including a clause in the deed that states, “A, his heirs, and assigns promise that upon finding a ready, willing, and able buyer for Blackacre, Blackacre will be offered to O, his heirs, or assigns on the same terms.” This could be exercised well beyond a life in being plus 21 years, so it violates the rule.

Front 42

How have most states reformed the rule against perpetuities?

Back 42

They have “wait and see” statutes. If an interest actually vests or fails within the perpetuities period, it is good; if it does not, it is void. Some states have alternative vesting periods and so allow court reformation of invalid interests to carry out the donor's general intent.

Front 43

What is the rule against restraints on alienation and what are three types of restraints?

Back 43

Generally, any restriction on the transferability of a legal (as opposed to equitable) interest is void. Types: (1) disabling restraints, under which attempted transfers are ineffective; (2) forfeiture restraints, under which an attempted transfer forfeits the interest; and (3) promissory restraints, under which an attempted transfer breaches a covenant.

Front 44

What are the types of concurrent estates?

Back 44

(1) Joint tenancy, (2) tenancy by the entirety, and (3) tenancy in common.

Front 45

What is a joint tenancy's distinguishing feature?

Back 45

The right of survivorship. When one joint tenant dies, the property is freed from her concurrent interest (her survivors do not succeed to it).

Front 46

How do you create a joint tenancy (4)?

Back 46

The four unities: time, title, interest, and possession. They must take identical interests, at the same time, by the same instrument, and with the same right to possession. Modern law requires a clear expression of a right of survivorship, otherwise it's just presumed to be a tenancy in common.

Front 47

What is a severance of a joint tenancy, and what are some ways to sever it?

Back 47

Under some circumstances, the right of survivorship is severed and you're left with a tenancy in common. Methods: (1) inter vivos conveyance (a voluntary or involuntary conveyance, not including judgment liens, mortgages unless there's a foreclosure, or leases); (2) contracts to convey

Front 48

What is a tenancy by the entirety?

Back 48

It's a marital estate akin to a joint tenancy. In some common law jurisdictions, it arises presumptively in a conveyance to a husband and wife. Only death, divorce, mutual agreement, or execution by a joint creditor of bother the husband and wife can sever a tenancy by the entirety. An individual spouse cannot convey or encumber tenancy by the entirety property. A deed or mortgage executed by only one spouse is ineffective.

Front 49

What is a tenancy in common?

Back 49

It's a concurrent estate with no right of survivorship. Tenants can hold different interests in the property, but each is entitled to possession of the whole. Interests are alienable, devisable, and inheritable.

Front 50

What are the co-tenants rights and duties with regard to possession?

Back 50

Each co-tenant has the right to posses all portions of the property but has no right to exclusive possession of any part. A co-tenant out of possession cannot bring a possessory action unless she is “ousted” (e.g., another co-tenant claims right to exclusive possession).

Front 51

What are the co-tenants rights and duties with regard to rents and profits?

Back 51

In most states, a co-tenant in possession has the right to retain profits from her own user of the property. She must, however, share net rents from third parties and net profits gained from exploitations of the land, such as mining.

Front 52

What is the effect of one concurrent owner's encumbering the property?

Back 52

A joint tenant or tenant in common may encumber her interest, but may not encumber the interests of other co-tenants. The mortgagee can only foreclose on the co-tenant's interest. Not that in the case of a joint tenancy, a mortgagee or lienor runs the risk that the obligated co-tenant will die before foreclosure, thereby extinguishing the mortgagee's or lienor's interest.

Front 53

What is the remedy of partition for co-tenants?

Back 53

Any co-tenant has the right to judicial partition, either in kind (physical division of land among co-tenants) or by sale and division of the proceeds. Courts prefer partition in kind but will permit partition by sale when a fair and equitable physical division of the property cannot be made. Although generally this right may be exercised at any time, restraints on partition by co-tenants are valid, provided they are limited to a reasonable time.

Front 54

What are the rights of co-tenants to contribution (3)?

Back 54

(1) Repairs: a co-tenant who pays more than her pro rata share of necessary repairs is entitled to contribution from the other co-tenants if he notifies the other co-tenants of the need for repairs. (2) Improvements: no right of contribution unless there's a partition. (3) Taxes and mortgages: contribution can be demanded for taxes or mortgage payments paid on the entire property. However, reimbursement to a co-tenant in sole possession is limited to the extent that expenditures exceed the rental value of his use.

Front 55

What are the landlord's six exceptions to the traditional rule that he had no duty to make a premises safe?

Back 55

At common law, a landlord had no duty to make the premises safe. Today, there are six exceptions: concealed dangerous (latent) defects (if the landlord knows or should have known of a dangerous condition); (2) common areas (halls, elevators); (3) public use (known dangerous condition, public was admitted, fails to repair); (4) furnished short-term residences create liabilities for any defect; (5) negligent repairs; (6) covenants to repair. The landlord is also under a general duty of reasonable care, which is on another card.

Front 56

In addition to the six exceptions to the traditional rule that a landlord has no duty to make a premises safe, the general modern to trend is to impose a duty of reasonable care. Explain.

Back 56

These courts will impose liability for injuries resulting from ordinary negligence committed to residential tenants if the landlord had notice of the defect and an opportunity to repair it. If the defect arises after the tenant takes possession, then he isn't liable. If the landlord has a statutory duty to repair (e.g., housing codes), he is liable for injuries from failure to repair or negligent repair.

Front 57

What is a fixture?

Back 57

It's a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty. A fixture passes with the ownership of the land. If someone who owned the chattel is attached so that its objective intention of the party who made the annexation was to make the item part of the realty. Intention is determined by (a) the nature of the article, (b) the manner of attachment, (c) the amount of damage that would be caused by its removal, (d) the adaptation of the item to the use of the realty.

Front 58

What if a tenant installs a fixture?

Back 58

An agreement between the parties is controlling. Without an agreement, the tenant is deemed to lack the intent required so he can remove it if it would not damage the premises of destroy the chattel. This applies to life tenants too.

Front 59

Are chattels annexed by a mortgagor's tenant within a mortgage lien? Why or why not?

Back 59

They are not except where the mortgage is made after the lease and the mortgagee is without notice of the tenant's rights. This is because the mortgagee has no greater rights than the mortgagor.

Front 60

Suppose a landowner has a mortgage and buys a chattel on a security agreement which he installs as a fixture. Then he defaults on both. What happens now?

Back 60

As between the seller and the mortgagee, the general rule is that the first to record his interest wins. However, under the UCC, a seller wins if the “fixture filing” is recorded within 20 days after the chattel is affixed to the land. The seller must compensate the mortgagee for damage or repair caused by removal.

Front 61

What are the types of nonpossessory interests in land?

Back 61

Easements, profits, covenants, and servitudes are nonpossessory interests in land; they create a right to use land possessed by someone else.

Front 62

What is an easement generally?

Back 62

It's a nonpossessory interest in land. The easement holder has the right to use another's tract of land for a special purpose (e.g., to lay pipe, to access a road or lake), but has no right to possess or enjoy the land.

Front 63

How long is an easement presumed to be?

Back 63

Of perpetual duration, unless the grant specifically limits the interest.

Front 64

What are the two general types of easements?

Back 64

Most easements are affirmative, which means the holder is entitled to make affirmative use of the servient tenement. There are also negative easements, which entitle the holder to compel the possessor of the servient tenement to refrain from engaging in an activity, and there are four types: (a) for light, (b) for air, (c) for lateral and subjacent support, and (b) for flow of an artificial stream. A negative easement is actually a restrictive covenant, but they use either team.

Front 65

What is an easement appurtenant?

Back 65

It benefits the holder in his physical use or enjoyment of another tract of land. It passes with the transfer of the benefited land, regardless of whether it was mentioned in the conveyance. The burden passes automatically too unless the new purchases has no actual or constructive notice of the easement.

Front 66

What is a dominant and what is a servient tenement?

Back 66

It applies only to easement appurtenants. There must be two tracts: a dominant tenement, which is an estate benefited by the easement; and a servient tenement, which is subject to the easement right.

Front 67

What is an easement in gross? When is it transferrable?

Back 67

The holder of an easement in gross acquires a right to use the servient tenement independent of his possession of another tract of land (i.e., the easement benefits the holder rather than another parcel). If the easement is for the holder's personal benefit, then it's not transferable, but it is if it's for economic or commercial interests (i.e., the right to erect billboards).

Front 68

Generally, what are the four ways to create an easement?

Back 68

(a) express grant, (b) express reservation, (c) implication, (d) prescription.

Front 69

How do you create an express easement grant?

Back 69

It must be in writing and signed by the holder of the servient tenement unless it's duration is brief enough to be outside the statute of frauds. It must comply with all the formal requisites of a deed.

Front 70

How do you create an easement by express reservation?

Back 70

It arises when a grantor conveys title to land but reserves the right to continue to use the tract for a special purpose. The majority view is that you cannot create one in a third party, it has to be in a grantor. Barbri seems to think this will be on the test.

Front 71

An easement can be created by implication in three ways, what are they generally?

Back 71

(1) Easement implied from existing use ("quasi easement"), (2) an easement implied without any existing use (for subdivision plats or profits a prendre), (3) easement by necessity.

Front 72

An easement implied from an existing use ("quasi easement") is one of the types of easement created by implication. There are four requirements. What are they?

Back 72

It can be implied if: (a) prior to the division of a single tract, (b) an apparent and continuous use exists on the servient part, © it is reasonably necessary for the enjoyment of the dominant part, and (4) the court determinates that the parties intended the use to continue after the land was divided.

Front 73

A subdivision plat is one of the types of easement created by implication. Explain how it works.

Back 73

When lots are sold in a subdivision with reference to a recorded plat or map that also shows streets leading to the lots, buyers of lots have implied easements to use the streets to access their lots.

Front 74

A profit a prendre is one of the types of easement created by implication. Explain how it works.

Back 74

The hodler of the profit has an implied easement to pass over the surface of the land and to use it as reasonably necessary to extract the product.

Front 75

An easement by necessity is one of the types of easement created by implication. Explain how it works.

Back 75

It arises when a landowner sells a portion of his tract and by this division deprives one lot of access to a public road or utility line. The owner of the servient parcel has the right to locate the easement.

Front 76

How do you acquire an easement by prescription?

Back 76

It's analogous to adverse possession: (1) open and notorious (discoverable upon inspection), (2) adverse (without owner's permission), (3) continuous and uninterrupted, and (4) for the statutory period. They cannot be acquired in public land.

Front 77

What is the scope of an easement?

Back 77

In the absence of specific limitations in the grant, courts assume that the easement was intended to meet both present and future needs of the dominant tenement. If, however, the dominant parcel is subdivided, the lot owners will not succeed to the easement if to do so would unreasonably overburden the servient estate.

Front 78

What is the remedy if the dominant tenement exceeds the scope of the easement?

Back 78

An injunction against the misuse. Misuse does not terminate the easement.

Front 79

What impact does an easement have on the servient tenement owner's use?

Back 79

The servient tenement owner can do whatever he wants as long as he doesn't interfere with usage of the easement.

Front 80

Who has to pay for repairs of the easement?

Back 80

If the easement holder is the sole user, he has the duty to make repairs. If not, then the court will apportion the costs.

Front 81

Generally, what are the six ways you can terminate easements?

Back 81

(1) Stated conditions, (2) unity of ownership (merger), (3) release, (4) abandonment, (5) estoppel, (6) prescription, (7) condemnation and destruction.

Front 82

How does an easement terminate by stated conditions?

Back 82

The grant may specify when or under what conditions the easement will terminate.

Front 83

How does an easement terminate by unity of ownership?

Back 83

If the same person acquires ownership of both the easement and the servient estate, then the dominant and servient estates merge and the easement is destroyed. Even if it separates later, the easement isn't automatically revived.

Front 84

How does an easement terminate by release?

Back 84

A deed of release from the owner of the easement to the owner of the servient tenement.

Front 85

How does an easement terminate by abandonment?

Back 85

When the holder demonstrates by some physical action (such as building a structure to block) an intent to permanently abandon the easement. Nonuse or an expression of a wish the abandon is insuffucient.

Front 86

How does an easement terminate by estoppel?

Back 86

Oral espressions of an intent to abandon do not terminate an easement unless committed to writing (release) or accompanied by action (abadnonment). But if the owner of the servient estate changes his position in reasonable reliance on the representations made or conduct of the owner of the easement, the easement terminates through estoppel.

Front 87

How does an easement terminate by prescription?

Back 87

An adverse, continuous interruption of the use for the prescriptive period (typically 20 years).

Front 88

How does an easement terminate by condemnation and destruction?

Back 88

Condemnation of the servient estate extinguishes all easements. Courts are split as to whether easement holders are entitled to compensation. Involuntary destruction of a structure in which there is an easement extinguishes the easement; voluntary destruction of such a structure does not.

Front 89

What is a license and how is it different from an easement?

Back 89

A license gives the holder the privilege to go upon the land of another. It is not an interest in land, unlilke an easement.

Front 90

What happens if there is a failed attempt to make an easement?

Back 90

You get a license

Front 91

When can a license become irrevocable (2 ways)?

Back 91

Estoppel: if a licensee invests substantial amounts of money or labor in reliance on the license, the licensor is estopped from revoking. License coupled with an interest: it's irrevocable for as long as the interest lasts. Example: vendee of a chattel may enter the seller's land to remove the chattel, and a future interest holder may enter and inspect for waste.

Front 92

What is a profit?

Back 92

They entitle the holder of the benefit to take some resources (soil, timber, materials, fish) from the servient estate. Implied in every profit is a right to enter the property. All the same rules for creation and termination of easements applies. It can be also terminated if there is misuse of the profit (called a surcharge).

Front 93

Generally speaking, what is a real covenant

Back 93

It's a written promise, usually found in a deed, to do something on the land (e.g., maintain a fence) or a promise not to do something on the land (e.g., not build a multifamily dwelling). Real covenants run with land at law, which means that subsequent may enforce or be burdened by the covenants.

Front 94

What are the five requirements for a BURDEN to run with the land in the case of real covenants?

Back 94

(1) Intent (they must have intended that future owners be burdened); (2) notice (subsequent purchase must have actual, inquiry, or record notice); (3) horizontal privity (the two must have shared some interest in the land, such as grantor-grantee, landlord-tenant, mortgagee-mortgagor); (4) vertical privity (entire durational interest); (5) it must touch and concern the land.

Front 95

What are the three requirements for a BENEFIT to run with the land in the case of real covenants?

Back 95

(1) Intent (they must have intended that future owners be benefitted); (2) vertical privity (any succeeding possessory estate may enforce the benefit); (3) touch and concern. Note that horizontal privity isn't needed.

Front 96

What is the remedy for a breach of a real covenant?

Back 96

Money damages, collectible from the defendant's general assets. If an injunction is sought, the promise must be enforced as an equitable servitude.

Front 97

How do you terminate a real covenant (3)?

Back 97

Like all nonpossessory interests, a covenant can be terminated by: (1) a written release; (2) merger of the benefited and burdened estates, or (3) condemnation of the burdened property.

Front 98

What is an equitable servitude?

Back 98

It's a covenant that, regardless of whether it runs with the land at law, equity will enforce against the assignees of the burdened land who have notice of the covenant. The usual remedy is an injunction.

Front 99

What's the critical difference between an equitable servitude and a real covenant?

Back 99

The remedy sought. If money damages are sought, then you must use the real covenant analysis. If a party seeks an injunction, you must consider whether the requirements for enforcement as an equitable servitude have been met. A single promise can create both a real covenant and an equitable servitude.

Front 100

How do you create an equitable servitude?

Back 100

They are created by covenants contained in a writing that satisfies the statute of frauds. There's an important exception: negative equitable servitudes can be implied from a common scheme for development of a residential subdivision. Example: developer subdivides land, some parcels have the negative covenants, some don't, they are still binding if there was a common scheme of development and notice of the covenants.

Front 101

The “common scheme” in subdivisions is an exception to the rule that equitable servitudes have to be in writing. What are the three types of evidence you can point to?

Back 101

If, at the time that sales in the subdivision began, the developer had a plan that all parcels would be subject to the restriction. Three types of evidence: (1) recorded plat, (2) general pattern of restrictions, or (3) oral representations to early buyers.

Front 102

What are the three requirements for a BURDEN to run with the land in the case of equitable servitudes?

Back 102

A successor of the promisor will be bound if: (1) the covenanting parties intended that the servitude by enforceable by and against assignees, (2) the successor has actual, inquiry, or record notice, (3) the covenant touches and concerns the land. Not that there is no privity of estate required (horizontal or vertical).

Front 103

What are the two requirements for a BENEFIT to run with the land in the case of equitable servitudes?

Back 103

It's enforceable by the promisee's succesors if: (1) the original parties so intended and (2) the servitude touches and concerns the benefited property. Not that there is no privity of estate required (horizontal or vertical).

Front 104

What are five defenses to the enforcement of an equitable servitude?

Back 104

(1) Unclean hands (the person seeking enforcement is violating a similar restriction on his own land); (2) benefited party acquiesced in a violation of the servitude by one burdened party; (3) estoppel; (4) laches (failing to bring suit within a reasonable time); (5) neighborhood has changed so significantly that enforcement would be inequitable.

Front 105

How do courts treat common walls and common driveways?

Back 105

If its partly on the property of each of two adjoining landowners, they each belong to each other to the extent they rest on her land. They also imply mutual cross-easements of support, with the result that each party can use the wall or driveway and neither party can unilaterally destroy it.

Front 106

What are the requirements for adverse possession?

Back 106

Possessor must show: (1) an actual entry giving exclusive possession that is (2) open and notorious, (3) adverse (hostile), and (4) continuous throughout the statutory period.

Front 107

Will you stop the statutory period by filing a lawsuit in an adverse possession case?

Back 107

Nope. You have to pursue it all the way to judgment.

Front 108

What is an adverse possessor only occupies some of the parcel?

Back 108

Actual possession of the entire parcel claimed isn't necessary. If the adverse possessor actually occupies a reasonable portion of the parcel, and her occupation is under color of title to the entire parcel, then he is deemed to have constructively possessed the entire parcel.

Front 109

Can two or more people take title through adverse possession?

Back 109

Sort of. It has to be exclusive possession, but two people can exclusively possess it to take as tenants in common. Exclusive means that the possessor is not sharing with the true owner of the public.

Front 110

What is open and notorious possession under adverse possession?

Back 110

It's open and notorious when it is the kind of use the owner would make of the land. The adverse possessor's occupation must be sufficiently apparent to put the true owner on notice that a trespass is occuring.

Front 111

What is continuous possession under adverse possession?

Back 111

It must be continuous throughout the statutoryperiod. Intermittenet periods of occupancy aren't sufficient. However, constant use by the claimant isn't required as long as possession is of the type that the usual owner would make. The adverse possessor can also tack her own possession onto the periods of possession of her predecessors, but privity is required.

Front 112

What's the effect of the owner's disability in an adverse possession case?

Back 112

The statutory period doesn't start to run if the owner is under some kind of disability to sue (ex: minority, imprisonment, insanity).

Front 113

When does the adverse possession statutory period run against future interests?

Back 113

Not until it becomes possessory.

Front 114

What is the effect of adverse possession on any covenants found in the true owners' deed?

Back 114

If the adverse possessor uses the land in violation of a restrictive covenant in the owner's deed for the limitations period, she takes free of the restriction. If, however, the possessor's use complies with such a covenant, she takes title subject ot the restriction.

Front 115

Can you adversely possess government owned land?

Back 115

Nope.

Front 116

The statute of frauds applies to land sales contract, explain the requirements and an exception

Back 116

It must be in writing and signed by the party to be charged. The essential terms (parties, description of the land, price) must be written. Part performance (such as possession, substantial improvements, payment of purchase price) can take the contract out of the statute.

Front 117

State the doctrine of equitable conversion

Back 117

Once a land sales contract is signed, equity regards the buyer as the owner of the real property. The seller's interest (right to the proceeds of the sale) is considered personal property. The bare legal title that remains in the seller is considered to be held in trust for the buyer. The right to possession follows the bare legal title, however, and so the seller is entitled to possession until closing.

Front 118

Under the doctrine of equitable conversion, to whom does the risk of loss pass?

Back 118

If the property is destroyed (without fault of either party) before closing, the majority rule puts the risk on the buyer. Seller must credit any fire of casualty insurance proceeds out of the purchase price if buyer is required to pay. Some states have the Uniform Vendor and Purchaser Risk Act, which places the risk on the seller unless the buyer has title or possession at the time of loss.

Front 119

What happens to title under the equitable conversion doctrine if one of the parties dies before closing?

Back 119

Seller's interest passes as personal property, and the buyer's interest passes as real property. If the seller dies, bare legal title passes to his heirs, but they must give up title to the buyer at closing. If buyer dies, heirs can demand conveyance of the land at closing.

Front 120

What is the warranty of marketable title?

Back 120

Every land sales contract contains an implied warranty that the seller will provide marketable title. This means that the title will be reasonably free from doubt. The timing is at closing. It doesn't need to be perfect, but it must be free of questions that present an unreasonable risk of litigation.

Front 121

Is title held by adverse possession marketable?

Back 121

No for the MBE, but most states are holding the opposite.

Front 122

What are the types of defects that can render title unmarketable (3)?

Back 122

(1) Defects in the chain of title, (2) encumberances (mortgages, liens, restrictive covenants, easements, and significant encroachments), (3) an existing violation of a zoning restriction or ordinance

Front 123

When does the warranty of marketability apply?

Back 123

It applies only at the time of closing. So if the closing has already occurred and deed changes hands, the seller is no longer liable on the warranty of marketability. Seller is liable only for promises made in the deed. At closing, the contract and deed merge.

Front 124

What are the remedies if a title is not marketable?

Back 124

Buyer must notify seller and give him reasonable time to cure. If seller fails to cure, buyer's remedies include rescission, damages, specific performance with abatement, and a quiet title suit.

Front 125

Is time of the essence in land sales contracts?

Back 125

It's presumed not to be "of the essence." The closing date is not absolutely binding, and a party late in tendering her own performance can still enforce the contract if she tenders within a reasonable time (e.g., two months) after the closing date. You can overcome the presumption: (1) the contract so states, (2) the circumstances indicate that was the parties' intent, or (3) one party gives the other notice that time of of the essence.

Front 126

When do the parties have to tender performance under a land sales contract?

Back 126

Buyer's obligation to pay and seller's obligation to convey are concurrent conditions. Thus, neither party can breach until the other tender's performance (even if the closing date passes).

Front 127

What are the remedies for breach of a sales contract?

Back 127

The nonbreaching party is entitled to damages (the difference between contract price and market value on date of breach, plus incidental costs) or, because land is unique, specific performance.

Front 128

What are the liquidated damages in most land sales contracts?

Back 128

The buyer usually deposits "earnest money" and they state that the money can be retained if there's a default. Courts will uphold this if it's reasonable in light of the seller's anticipated and actual damages.

Front 129

When does the seller of land have liability for a breach of warranty of fitness or quality?

Back 129

Only for a new construction.

Front 130

Do you have to be in privity with the builder to sue for negligence?

Back 130

Nope.

Front 131

What are the three circumstances by which a seller is liable for defects?

Back 131

(1) misrepresentation (knowingly or negligently made if the buyer relies and it materially affects value), (2) active concealment (e.g., wallpapering over damages), (3) failure to disclose: (a) if he knows or has reason to know, (b) it's not apparent, (c) defect is serious and would cause the buyer to reconsider.

Front 132

Can sellers disclaim liability for defects?

Back 132

A general disclaimer (property sold as is or with all defects) won't overcome liability for fraud, concealment, or failure to disclose. You can include a specific disclaimer (e.g., not liable for defects in the root).

Front 133

When do real estate brokers get a commission?

Back 133

The traditional rule is that they earned a commission when they produced a ready, willing, and able buyer. The modern trend is to award a commission only if it closes or if it fails to close due to the seller's fault.

Front 134

What does title insurance do?

Back 134

Insures that good record title of the property exists as of the policy's date and promises to defend the record title if litigated. It protects only the person who owns the policy and does not run with the land to subsequent buyers.

Front 135

Very generally, what does a deed do?

Back 135

Transfers title to an interest in real property

Front 136

What are the formalities for a deed

Back 136

It must be in writing, signed by the grantor, and reasonably identify the parties and the land. Most other formalities (seal, consideration, attestation, and acknowledgment) are unnecessary. A deed may validly convey real property by inter vivos gift so long as there is (1) donative intent, (2) delivery, and (3) acceptance.

Front 137

What is a void deed and what's the effect?

Back 137

Those that are forged, were never delivered, or were obtained by fraud in the factum (i.e., the grantor was deceived and did not realize that he was executing a deed). A void deed will be set aside by the court even if the property has passed to a bona fide purchaser.

Front 138

What's a voidable deed and what's the effect?

Back 138

Those executed by minors, incapacitated persons, and those obtained through fraud in the inducement, duress, undue influence, mistake, and breach of fiduciary duty. Voidable deeds will be set aside only if the property has not passed to a bona fide purchaser.

Front 139

What is a fraudulent conveyance in the context of real estate?

Back 139

Even when a deed complies with the required formalities, it can still be set aside by the grantor's creditors if it was made: (1) with actual intent to hinder, delay, or defraud any creditor of the grantor; or (2) without receiving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent or become insolvent because of the transfer. If the grantee took in good faith and paid reasonably equivalent value, however, the deed will not be set aside.

Front 140

How does the deed have to describe the property to be effective?

Back 140

It's good enough if it provides a good lead to the identity of the property (e.g., all of my land in Stockton). If it is too indefinite, the grantor will retain property (but reformation of the deed is a possible remedy).

Front 141

What happens if the deed describes property that goes to a right of way or a water boundary?

Back 141

It's presumed to pass to the center of it. So in a variable boundary line case, the slow and imperceptible change in the course of a river will change the bounder. Accetion (slow deposits of soild) belong to the abutting owner. An avulsion (sudden change) does not change ownership rights.

Front 142

When will a court grant an action to reform a deed?

Back 142

If it does not represent the parties' agreement because of: (1) mutual mistake, (2) scrivener's error, (3) unilateral mistake caused by misrepresentation or other inequitable conduct.

Front 143

State the rule about delivery and acceptance for deeds.

Back 143

A deed is not effective unless it has been delivered and accepted. Delivery refers to the grantor's intention to make a deed presently effective even if possession is postponed. Acceptance is required, but most states presume acceptance. Acceptance relates back to the date the deed was delivered into escrow.

Front 144

What are some ways to satisfy the delivery requirement of a deed?

Back 144

By manual delivery, notarized acknowledgement by the grantor, recording, or anything else showing the grantor's intent to deliver.

Front 145

What's the effect of delivery?

Back 145

Title passes. It cannot be canceled or taken back. So if you see a fact pattern where a grantee returns the deed to the grantor, it has no effect. Grantee must draw up a new deed and deliver it to the grantor.

Front 146

What if the grantor of a deed retains control?

Back 146

If the grantor retains control or interest (such as a right to revoke), then it indicates that there was a lack of intent to pass title. Example: grantor executes a deed, but does not deliver it during his lifetime, so no title passes.

Front 147

What if a grantor wants to deed property at death or what if he states conditions that aren't in the deed?

Back 147

If you execute and deliver a deed that provides that title won't pass until the grantor's death, it's valid. It creates a future interest in the grantee. If the deed is absolute but delivered with an oral condition, the condition is disregarded.

Front 148

What if a grantor delivers a deed to a third party with no conditions?

Back 148

If the grantor gives the deed to a third party with instructions to give it to the grantee, there is a valid delivery. If the grantor fails to give instructions, the validity of the delivery depends on whether the third party could be considered the grantor's agent. If so, there is no delivery.

Front 149

Explain the rules that govern transfers of deeds to third parties with conditions (commercial transactions) (3)

Back 149

A valid conditional delivery occurs when a grantor gives a deed to a third party with instructions to give it to the grantee when certain conditions occur. (1) Grantor can only revoke if (a) the condition hasn't occurred, and (b) there is no enforceable written contract to convey. (2) If grantee wrongfully acquires the deed from the escrow holder prior to a condition, title does not pass. (3) Title usually passes when the condition occurs, but courts can “relate back” when justice requires.

Front 150

How do you dedicate land for public use?

Back 150

You can transfer land to a public body by dedication. To be effective, a dedication must be accepted, which may be done by formal resolution, approval of map or plat, or actual assumption of maintenance or improvements.

Front 151

What are the three types of deeds used to convey property interests other than leaseholds?

Back 151

The (1) general warranty deed, the (2) special warranty deed, and (3) the quitclaim deed.

Front 152

What do they mean when they say “covenant for title”

Back 152

It's basically the promises in a deed, I think. The important thing is that it's different than a real covenant.

Front 153

What are the six usual covenants found in a general warranty deed?

Back 153

(1) Seisin: grantor covenants that she has the estate she purports to convey (must have both title and possession at the time of the grant). (2) Right to convey: covenants that she has authority to make grant. (3) Covenant against encumberances: covenants against the existence of physical or title encumberances; (4) Quiet enjoyment: grantee will not be disturbed by third party's lawful claim of title; (5) covenant of warranty: promises to defend against reasonable claims of title by a third party (basically identical to#5); (6) Further assurances: promises to perform acts reasonably necessary to perfect title conveyed.

Front 154

Under a general warranty deed, what happens if a successive owner finds out that one of the covenants for title have been breached?

Back 154

If there are successive conveyances by general warranty deed and the last grantee is evicted by lawful claim of title, he can sue anyone up the line. Some states allow him to recover to the extent of consideration received by a defendant-covenantor. Other states limit recovery to the lesser of what he paid or what the defendant-covenantor received.

Front 155

What is a statutory special warranty deed? [REVIEW]

Back 155

Use of the word “grant” in a deed creates by implication two limited assurances against acts of the grantor (not her predecessors): (1) the grantor has not conveyed the same estate or any interest therein to anyone other than the grantee; and (2) the estate is free from encumberances made by the grantor.

Front 156

What is a quitclaim deed?

Back 156

Releases whatever interest the grantor has. No covenants of title are included or implied.

Front 157

What is estoppel by deed?

Back 157

If the grantor purports to convey an estate in property that she does not own, her subsequent acquisition of the estate will automatically inure to the benefit of the grantee. It doesn't usually apply to quitclaim deeds.

Front 158

Is recording required to make a deed effective?

Back 158

No, it's only used to protect a grantee against a later bona fide purchaser for value.

Front 159

What do the recording acts protect against?

Back 159

Secret interests previously create

Front 160

What's the effect of recording, generally?

Back 160

It imposes constructive notice of the property conveyance to everyone, so there can be no subsequent BFPs

Front 161

What kinds of instruments can be recorded?

Back 161

Any instrument creating or affecting an interest in land can be recorded, provided it is acknowledged by the grantor before a notary public.

Front 162

What are the three types of recording acts in use in all the states, and what's one key commonality among them?

Back 162

They all put the burden on the subsequent taker to prove that he qualifies for their protection. (1) Notice statutes (the subsequent BFPs prevail over a grantee who failed to record) (2) race-notice statute (subsequent BFP is protected only if he takes without notice AND records before the prior grantee) (3) race statutes (whoever records first wins and notice is irrelevant, very few states have this)

Front 163

What is a BFP?

Back 163

A bona fide purchaser for value: a person who pays valuable consideration and has no notice (actual, constructive, or inquiry) of the prior instrument

Front 164

Who is protected by the recording acts? Give four examples of situations where this comes up.

Back 164

They have to be BFP. This means that donees, heirs, and devisees are not protected by they don't give value. (1) A purchase from a donee, heir, or devisee: a purchaser from a done, heir, or devisee of the record owner is protected against a prior unrecorded conveyance. (2) judgment creditors: most states hold that a judgment creditor isn't protected against a prior unrecorded conveyance. (3) shelter rule [review]. (4) purchasers under installment land contracts [review (page 58)].

Front 165

A BFP has to purchase without notice. What does that mean?

Back 165

That the purchaser has no actual, constructive (record), or inquiry notice of a prior conveyance at the time he paid consideration and received the interest.

Front 166

What is constructive notice under the recording acts?

Back 166

It means a subsequent purchase will be held to have record notice, but only if the deed is recorded "in the chain of title," which means that it is recorded in such a manner that a searcher could reasonably find it. It means that a wild deed doesn't count, nor do deeds that were recorded late.

Front 167

A BFP has to purchase without notice, and that includes "inquiry notice." What is "inquiry notice"?

Back 167

Sometimes a purchaser is required to make reasonable inquiries. He is charged with knowledge of whatever the inquiry would have revealed, even if in fact he made non. References in recorded interests to unrecorded transactions, unrecorded instruments in the chain of title, and possession unexplained by the record put a purchaser on inquiry notice.

Front 168

Does a quitclaim deed necessarily put a purchaser on inquiry notice?

Back 168

No

Front 169

A BFP has to pay valuable consideration to be protected by the recording statutes. What kind of consideration is required?

Back 169

A subsequent granted has to prove that he is a purchaser, not just a donee, to be protected. The consideration does not need to be adequate, but it must be of some pecuniary value (i.e., love and affection isn't enough).

Front 170

What are two ways to do a title search?

Back 170

In a tract index jurisdiction, the serach looks at the page indexed by block and or lot describing the property and any instruments affecting it. In a grantor and grantee index, the searcher establishes a chain of title by searching back in time in the grantee-grantor index.

Front 171

What are the legal effects of recordation?

Back 171

Gives prospective subsequent grantees constructive notice of the existence and content of recorded instruments. It raises a presumption of valid delivery and authenticity. It does not validate an invalid deed or protect against interests arising by operation of law (dower, title by adverse possesion)

Front 172

Discuss ademption in the context of a conveyance of real property by will

Back 172

If property is specificially devised or bequeathed in the testator's will, but the testator no longer owns it at the time of death, the gift fails. Ademption applies only to specific bequests, which can be satisfied only by the deliver of a particular item; it cannot be satisfied by money. A gift of land is always a specific devise.

Front 173

What is the exoneration doctrine in the context of conveyances of real property by will?

Back 173

At common law and in many states, the devisee of a specific property is entitled to have the land "exonerated" by the payment of liens and mortgages from the testator's residuary estate. There is, however, a growing trend toward abolition of the exoneration doctrine.

Front 174

How do the anti-lapse statutes work?

Back 174

A lapse occurs when the beneficiary of a gift in a will dies before the testator. Under common law, this would render the gift void. Almost all states have statutes to prevent the lapse and let it pass to the living decendents. Usually this only applies if the beneficiary is a descendant of the testator. It probably doesn't apply if the beneficiary was dead when the will was executed. You can draft a will around the anti-lapse statute.

Front 175

How does abatement work

Back 175

If the estate assets aren't sufficient to pay all claims against the estate and satisfy all devises and bequests, the gifts are abated (reduced). Unless stated in the will, estates abate in the following order: (1) property passing by intestacy, (2) residuary estate, (3) general legacies, (4) specific devises and bequests.

Front 176

What are the five common types of securities interests in real estate?

Back 176

(1) mortgage (debtor is mortgagor, lender is mortgagee and lender has to initiate a judicial foreclosure and auction by sheriff), (2) deed of trust (debtor is trustor, thir party is a trustee, and lender is beneficiary, trustee sells land to foreclose); (3) installment land contract (purchaser gets legal title only after full price paid); (4) absolute deed (basically treated like any other mortgage); (5) sale-leaseback (usually treated like a disguised mortgage)

Front 177

Do the note and mortgage have to transfer to the same person for it to be complete?

Back 177

Yes, any party to a mortgage or deed of trust can transfer their interest, but the note and the mortgage must pass to the same person for the transfer to be complete.

Front 178

What happens if there is a transfer of a mortgage without a note?

Back 178

In some states, the transfer of a mortgage automatically transfers the note as well, unless the mortgagee-transferor expressly reserves the rights to the note. In these states, the transferee of the mortgage can then file an equitable action and compel a transfer of the note as well. Other states hold that, because the note is the principal evidence of the debt, a transfer of the mortgage without the note is void.

Front 179

What if you transfer a note without transferring the mortgage?

Back 179

The note can be transferred without the mortgage, but the mortgage will automatically follow the properly transferred note, unless the mortgagee-transferor expressly reserves the rights to the mortgage. No separate written assignment of the mortgage is necessary.

Front 180

What are four requirements for transferring a note?

Back 180

It can be indorsed and delivered to the transferee, or by a separate document of assignment. If the indorsement and delivery method is used, the transferee becomes a holder in due course. To do so: (a) the note must be negotiable in form (payable "to bearer" or "to the order of" the named payee, with promise to pay a sum certain, and no other promises); (2) it must be indorsed and signed by the named payee; (3) it must be delivererd to the transferee; (4) the transferee must take the note in good faith (no notice that it is overdue, has been dishonored, is subject to any defense by the marker) and must pay value for it.

Front 181

What are the benefits of being a holder in due course?

Back 181

He takes the note free of any personal defenses of the maker (e.g., failure of consideration, fraud in the inducement, waiver, estoppel, and payment) but is still subject to real defenses (infancy, other incapacity, duress, illegality, fraud in the execution, forgery, discharge in insolvency, and any other insolvency)

Front 182

If the payor on the note doesn't get notice that a note has been transferred, what happens if he keeps paying the old holder?

Back 182

The mortgagor's payment to the original mortgagee is effective even if it isn't made to the one entitled to enforce the note. The new holder of the note needs to recover the payment from the original holder.

Front 183

What if a motgagor transfer the property that's subject to a mortgage? What is an assumption?

Back 183

The grantee of a mortgage property takes subject to the mortgage. If the grantee signs an assumption agreement, he becomes primarily liable to the lender, while the original mortgagor is secondarily liable as a surety. If no assumption agreement is signed, the grantee is not personally liable on the loan, and the original mortgagor remains primarily and personally liable.

Front 184

What is a due on sale clause?

Back 184

It appears in most modern mortgages. It allows the lender to demand full payment of the loan if the mortgagor transfers any interest in the property without the lender's consent

Front 185

What are some defenses to a mortgage?

Back 185

It's granted to secure an obligation, do defenses in an action on the underlying obligation (e.g., failure of consider, duress, mistake, fraud) are defenses against an action on the mortgage. A mortgagee's right to foreclose is precluded by a discharge of the mortgage--e.g., payment of the debt secured, merger of the legal and equitable interests, or the mortgagee's acceptance of a deed in lieue of foreclosure tendered by the mortgagor.

Front 186

Sometimes a mortgagee wants to take possession of the property before foreclosure. It depends on what lien theory the state follows. State the three.

Back 186

(1) Lien theory (most states) (the mortgagee is considered the holder of a security interest only, and the mortgagor is the owner of the land until foreclosure--mortgagee cannot have possession before foreclosure); (2) title theory (legal title is in the mortgagee until foreclosure, and mortgagee is entitled to possession upon demand at any time); (3) intermediate (legal title is in mortgagor until default, then title shifts to mortgagee. Mortgagee can then demand possession).

Front 187

Can the mortgagee take possession if the mortgagor gives permission? What's another kind of implied permission?

Back 187

Yes, and he can also take possession if the mortgagor abandons the property.

Front 188

What duties and risks does a mortgagee take if he takes possession before foreclosure?

Back 188

(1) Duty to account for rents, (2) duty to manage the property in a prudent manner, (3) potential tort liabilityfor those injured on the property. Because of this, more mortgagees do not want to take possession.

Front 189

If a mortgagee attempts to install a receiver for a rental property, when will courts usually do it?

Back 189

Most mortgagees attempt to intercept the rents before foreclosure by getting a receiver appointed by the court to manage the property. Courts will generally appoint a receiver for rental property upon showing that: (1) waste is occurring, (2) the value of the property is inadequate to secure the debt, (3) the mortgagor is insolvent.

Front 190

There are two types of redemption in the context of foreclosure. What are they?

Back 190

(1) Redemption in equity: at any time prior to the foreclosure sale, the mortgagor may redeem the property by paying the amount due. If the note or mortgage contains an acceleration clause, the full balance of the note or mortgage must be paid. The right cannot be waived in the mortgage. (2) Statutory redemption: half of the states allow mortgagors to redeem the property for some fixed period (six months) after the foreclosure sale has occurred.

Front 191

How are mortgagee priorities determined? How does foreclosure affect other mortgagees?

Back 191

Generally, by the time that the mortgages were placed on the property. Foreclosure does not destroy any interest senior to the interest being foreclosed. It generally destroys all junior interests, but failure to include a junior interest holder in a foreclosure action results in preservation of that party's interest.

Front 192

How can mortgagees modify their priorities?

Back 192

It's usually determined by chronology, but it can be changed by: (1) operation of a recording statute if the other mortgagee's are late; (2) purchase money mortgages can take priority; (3) subordination agreements between senior and junior mortgagees; (4) motification of a senior mortgage (junior mortgage has priority over the modification); (5) granting of optional future advances by a mortgagee with notice of the junior mortgagee

Front 193

Do purchase money mortgages defeat senior mortgages that are not purchase money in priority?

Back 193

Yep.

Front 194

How are proceeds of a foreclosure sale distributed?

Back 194

First to the expenses of the sale, attorneys' fee, and court costs; then to the principal and accrued interest on the foreclosed loan; next to any other junior interests in the order of their priority; and finally to the mortgagor.

Front 195

Most installment land sales contracts say the vendor will forefeit on default, but courts have a few theories to avoid this result. What are they (5)?

Back 195

(1) Equity of redemption (gives the contract purchaser a grace period to pay the accelerated full balance of the contract and keep the land after default); (2) restitution (require the vendor to refund any amount by which his payments exceed the vendor's damages); (3) treat as a mortgage (requiring a judicial foreclosure); (4) waiver (when vendor accepts latepayments, it constitutes a waiver of the right to strict performance); (5) election of remedies (vendor must choose only one remedy (damages or specific performance) and forgo all others.

Front 196

What are a land owner's rights to lateral and subjacent support?

Back 196

(1) Lateral support: ownership of land includes the right to have the land supported in its natural state by adjoining land, (a) support of land in natural state: owner is strictly liable if excavation causes adjacent land to subside; (b) strictly liable for damage to land and buildings caused by excavation if the land would have collapsed in its natural state; otherwise only for negligence. (2) Subjacent support: [review]

Front 197

What are the two major systems for determining allocation of water in watercourse?

Back 197

(1) Riparian doctrine (water bleongs to those who own the land bordering the water course, and the rights attach to all contiguous tracts held by the same owner as long as one abuts the water); (2) prior appropriation doctrine (individuals acquire rights by actual use and are determined by priority of benecial use and the right can be lost by abandonment)

Front 198

What are the two theories under riparian rights to water and what's the difference between natural vs. artificial use?

Back 198

(1) Natural flow theory (a riparian owner's use resulting in substantial or material diminution of the water's quantity, quality, or velocity is enjoinable); (2) reasonable use theory [more common] (one owner's use is not enjoinable unless it substantially interferes with the use of other riparian owners, test for reasonableness is to balance the utility of the owner's use with the gravity of the harm. Under either theory, natural uses (consumption or gardening) prevail over artifical uses (irrigation, manufacturing).

Front 199

Very generally, there are three different types of water systems so there are two different sets of laws

Back 199

(1) Laws for watercourses (such as streams, rivers, and lakes). (2) laws and doctrines for groundwater (percolating water and/or that you can extract from wells), (3) surface water (water without a channel that passes over land such as rainfall, seepage, etc)

Front 200

What are the four different doctrines that determine rights in diffuse underground water recovered through wells?

Back 200

(a) absolute ownership doctrine (12 easter states, owner can take all the water he wants, for any purpose, including export), (b) reasonable use doctrine (25 states, like absolute but exporting is allowed only if it does not harm other owners), (c) correlative rights (California, owners own the underground water basis as joint tenants and each is allowed a reasonable amount), (d) appropriative rights (western states, priority of use is determinative).

Front 201

What are the three different doctrines that determine rights in surface water?

Back 201

A landowner can use surface water (water without a channel that passes over land such as rainfall, seepage, etc) within her boundaries for any purpose he wants. Questions about surface water concern liability for changing natural flows by dikes, drains, etc. Three theories: (1) natural flow (owners can't change the natural drainage patterns, but reasonable changes are allowed), (2) common enemy doctrine (an owner can take any protective measure to get rid of water so long as they don't unnecessarily damage other lands), (3) reasonable use theory (balance the utility of the use against the gravity of the harm.

Front 202

What rights do you have in airspace above your parcel of land?

Back 202

It's not exclusive, but you are entitled to freedom from excessive noise.

Front 203

What remedies does a possessor of land have to exclude others?

Back 203

(1) trespass (land invaded by tangible physical object), (2) private nuisance (land invaded by intangibles such as odors or noise), (3) continuin trespass (land repeatedly invaded by trespasser), and (4) ejectment or unlawful detainer (to remove a trespasser or tenant, it can be joined with a demand for money damages).

Front 204

How is a cooperative usually structured?

Back 204

Title to the land and buildings is held by a corporation that leases individual apartments to its shareholders. Because of their economic interdependence and because the individual owners are regarded as tenants, a direct restraint on the alienation of an individual interest is valid.

Front 205

When people own a condominium, what do they own?

Back 205

Each owner owns the interior of his individual unit plus an undivided interest in the exterior and common areas. Unit ownership is treated as fee ownership, so ordinary rules against restraints on alienation apply.

Front 206

Where does a state get its zoning power and what are some limits?

Back 206

The state can enact statutes to reasonably control the use of land for the protection of the health, safety, morals, and welfare of its citizens. Zoning power is based on the state's police power and is limited by the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the "no taking without just compensation" clause of the Fifth Amendment. Cities and county can exercise zoning power only if authorized by a state enabling act.

Front 207

Under zoning doctrines, what is a nonconforming use?

Back 207

A use that exists at the time of passage of a zoning act that does not conform to the statute cannot be eliminated at once.

Front 208

Under zoning doctrines, what is a special use permit?

Back 208

It must be obtained even though the zoning is proper for the intended use. It is often required for hospotals, funderal homes, drive-in businesses, etc..

Front 209

Under zoning doctrines, what is a variance?

Back 209

It's a departure from the literal restrictions of a zoning ordinance granted by administrative action.

Front 210

When are zoning ordinances generally invalid?

Back 210

If they have no reasonable relation to public welfare, are too restrictive, are discriminatory as to a particular parcel, are beyond the grant of authority, violate due process, or are racially discriminatory.

Front 211

Discuss the two possible analyses when someone complains that a zoning ordinance is an unconstitutional taking?

Back 211

(1) Denial of all economic value: if ALL economic use of the land is deprived, then this is a taking. (2) If the regulation leaves the property with very little economic value, then the court will balance the social goals for the regulation, the diminution in value of the property, and the owner's reasonable expectations for use of the property.

Front 212

What is an unconstitutional exaction?

Back 212

Sometimes a local government demands that landowner give up some land for a public purpose in exchange for a zoning approval. These demands are unconstitutional unless the government proves: (1) they are rationally connected to the additional burden the project will place on public facilities (essential nexus) and (2) the dedication is reasonably related in nature and extent to the impact of the propose development (rough proportionality).

Front 213

What's the remedy if a zoning or exaction constitutes a taking?

Back 213

The government is required to compensate the owner for the property or terminate the regulation and pay the owner damages for the temporary taking.

Front 214

Generally, what is a leasehold?

Back 214

It's an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).

Front 215

What are the types of leaseholds?

Back 215

(1) Tenancy for years (a lease that continues for a fixed period of time); (2) periodic tenancies (it continues for successive periods (e.g., month to month) until terminated by proper noticed by either party); (3) tenancies at will (terminable at the will of either the landlord or the tenant); (4) tenancies at sufferance (when the tenant wrongfully remains in possession).

Front 216

How do you create and terminate a tenancy for years?

Back 216

It's a tenancy that continues for a fixed period. You create them in a written lease, and the statute of frauds applies if it's for more than a year. It ends automatically at the end of the date. Landlords usually reserve a right of entry if the tenant breaches any of the lease's covenants and lots of states give the landlord the right to terminate. The tenant can terminate if he surrenders, but if there is more than a year left, then the surrender needs to be in writing.

Front 217

How do you create and terminate a periodic tenancy?

Back 217

It's one that continues for successive periods until terminated. It can be created by: (a) express agreement, (b) implication (leases at a rent of $1,000 per month), (c) operation of law (T remains in possession after the lease expires, and L treats it as a periodic tenancy; or the lease is invalid but T goes into possession). It's automatically renewed until a proper notice of termination is given.

Front 218

How do you create an terminate a tenancy at will?

Back 218

It's terminable at the will of either the landloard or tenant. It has to be created by express agreement that it can be terminated at any time, otherwise the court will treat it as a periodic tenancy (esp. if it gives the landlord a unilateral right to terminate). It can be terminated without notice by any party with the power to do so or by operation of law (death, committing waste, etc)

Front 219

What do you create and terminate a tenancy at sufferance?

Back 219

It arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy. It lasts only until the landloard takes steps to evict the tenant. No notice of termination is required.

Front 220

What is the hold over doctrine?

Back 220

If the tenant continues in possession after his right to possession has ended, the landloard may: (1) evict him, or (2) bind him to a new periodic tenancy. The same terms and conditions usually apply. Commercial tenants can be held to a new year-to-year tenancy if the original lease term was for more than a year. Residential tenants are usually held to a month to month.

Front 221

What are some exceptions to the hold over doctrine?

Back 221

Watch for situations where: (1) the tenant remains in possession for only a few hours after termination or leaves a few articles of personal property, (2) the delay is not the tenant's fault, or (3) it is a seasonal lease. In these cases, the landlord cannot bind the tenant to a new tenancy.

Front 222

What is a lease (as opposed to a leasehold)?

Back 222

It's a contract the governs the landlord-tenant relationship. Covenants in the lease are generally independent (i.e., if one party breaches a covenant, the other party can recover damages but must still perform his promises and cannot terminate the landlord-tenant relatioship). The doctrines of actual and constructive eviction and the implied warranty of habitability are exceptions to the rule. Many states have created a statutory exception allowing the landlord to terminate the lease for the nonpayment of rent.

Front 223

What are the tenant's three general duties?

Back 223

(1) Duty to repair (doctrine of waste) (tenant cannot damage (waste) the leased premises-it's a lot like waste in a life tenant); (2) duty to not use premises for illegal purposes (occasional unlawful conduct doesn't apply); (3) duty to pay rent. All of these have their own detail cards.

Front 224

What are the three types of waste under the doctrine of waste for leaseholds?

Back 224

A tenant cannot damage the leased premises. Types: (1) voluntary (affirmative) waste (when the tenant intentionally or negligently damages the premises); (2) permissive waste (tenant fails to take reasonable steps to prevent damage from the elements); (3) ameliorative wase (alterations, even those that increase value, with an exception for long-term tenants if the change reflects a change in the neighborhood)

Front 225

What if there's a covenant in a lease that obligates the tenant to repair?

Back 225

The landlord remains obligated to repair (except for those caused by the tenant) under the nonwaivable "implied warranty of habitability." Nonresidential tenants covenant is enforceable.

Front 226

What are the tenant's duties to pay rent?

Back 226

Traditionally, rent was due at the end of a leasehold. Leases today usually include a provision that makes it due at some other time, and most states have statutes providing that if the leasehold terminates before the time originally agreed upon, the tenant must pay a proportionate amount of the agreed rent

Front 227

When can the landlord retain security deposits?

Back 227

The landlord is not permitted to retain a security deposit beyond the damages actually suffered. If a rent deposit is denominated a bonus, the landlord can retain it after the tenant is evicted.

Front 228

What are the landlord's remedies if a tenant fails to pay rent?

Back 228

The nonbreaching party has the right to terminate by bringing an unlawful detainer action or suing for rent. The only issue in an unlawful detainer proceeding is whether the tenant has the right to possession; the tenant cannot raise counterclaims.

Front 229

What are the landlord's remedies if the tenant abandons?

Back 229

If the tenant unjustifiably abandons the property, the landlord has a duty to mitigate daamtes by seeking to rent the property. If the landlord repossesses or relets, the tenant's liability depends on whether the landlord has accepted the surrender. If not, then the tenant is liable for the difference between promised rent and fair rental value. If so, then tenant is free from any rent liability.

Front 230

What are the landlord's duties?

Back 230

(1) duty to deliver possession, (2) quiet enjoyment, (3) the implied warranty of habitability, (4) no relaliatory evictions, (5) no discrimination

Front 231

What is the landlord's duty to deliver possession of the premises?

Back 231

Most states require the landlord to put the tenant in actual possession of the premises at the beginning of the leasehold term. Landlord breaches if he doesn't evict a hold over tenant first.

Front 232

What is the landlord's duty to not interfere with the tenant's right to quiet enjoyment?

Back 232

Every lease has an implied covenant that neither the landlord nor a paramount title holder (e.g., a prior mortgagee who forecloses) will interfere with the tenant's quiet enjoyment and possession of the premises.

Front 233

What are three ways that the landlord can breach a covenant of quiet enjoyment?

Back 233

(1) Actual eviction (when the landlord, paramount title holder, or hold-over tenant, excludes the tenant from the entire premises); (2) partial eviction (When the tenant is physically excluded from only part, it relieves the tenant of the obligation to pay rent for the entire premises); (3) constructive eviction: anything that renders the property uninhabitable (tenant must vacate the premises w/in a reasonable time)

Front 234

What is the landlord's duty not to commit a retaliatory eviction?

Back 234

A landlord may not terminate a lease or otherwise penalize a tenant in retaliation for the tenant's exercise of her legal rights, including reporting housing or building codes. Most states presume a retalitatory motive if the landlord acts within 90 or 180 days after the tenant exercise of his rights.

Front 235

What is the landlord's duty not to discriminate?

Back 235

Tenants and potential tenants are protected by the Civil Rights Act of 1966, which bars racial or ethnic discrimination, and the Fair Housing Act, which bars discrimination based on ethnicity, religion, national origina, gender, disability, and against families with children.

Front 236

What is an assignment and what is a sublease, and when can the tenant do it?

Back 236

A complete transfer for an entire term is an assignment. If the tenant retains any part of the term (other than a right to reenter on breach), the transfer is a sublease. The tenant can freely do it unless there's an express restriction in the lease.

Front 237

What are the consequences of a lease assignment?

Back 237

An assignee stands in the shoes of the original tenant in a direct relationship with the landlord (i.e., the assignee and the landlord are in privity). They are liable to each other for any covenants that run with the land. They run with the land if the original parties to the lease intended that and if the covenant "touches and concerns" the land. The tenant has to pay rent to the landlord. The original tenant remains liable under the original contract obligations.

Front 238

What is the consequence of a sublease?

Back 238

Usually they pay the rent to the original lessee, who then pays the landlord. The sublessee cannot enforce any covenants made by the landlord in the main lease, except that a residential sublessee may be able to enforce the implied warrant of habitability against the landlord.

Front 239

What if there is a covenant against an assignment or sublease in the lease agreement?

Back 239

They are strictly construed against the landlord. It's waived if the landlord is aware of an asssignment and doesn't object. If the tenant assigns or sublets in violation of the lease provision, the transfer isn't void, but the landlord can terminate the lease and sue for damages.

Front 240

What happens if a leasehold is condemned?

Back 240

If the entire leasehold is taken by eminent domain, the tenant's liability for rent is extinguished because both the leasehold and reversion have merged in the condemnor and there is no londer a leasehold estate. If the taking is temporary or partial, the tenant still has to pay rent but is entitled to compensation (a share of the condemnation award) for the taking.