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88 Cards in this Set

  • Front
  • Back
I. General Terms
A. Security Interest
Interest in personal property or fixtures which secures payment or performance of an obligation
I. General Terms
B. Fixtures
Personal property permanently attached to real estate
I. General Terms
C. Collateral
Property subject to a security interest
I. General Terms
D. Debtor
Party owing money or an obligation secured by the security interest
I. General Terms
E. Secured Party
Person who holds (owns) security interest - usually promissory note (holder of notes has security interest)
I. General Terms
F. Financing Statement
Notice of security interest filed with a government office
I. General Terms
G. Lien
1. Right to sell property on default
2. Examples: mortgage, some judgments and security

artisan's lien: won't give back car at auto shop if you don't pay
II. Types of Collateral Governed Under Article 9 of UCC
A. Goods
Things tangible and moveable, or fixtures
II. Types of Collateral Governed Under Article 9 of UCC
B. Quasi Tangibles
Paper (instruments) which in themselves evidence a right (e.g., negotiable instruments

Ex. stock certificates --> transfer ownership rights
II. Types of Collateral Governed Under Article 9 of UCC
C. Intangibles
Property with no aspect of physical existence
1. Accounts receivable "putting on bill" at County Store
2. Goodwill of business right to use name
II. Types of Collateral Governed Under Article 9 of UCC
D. Art. 9 - When Inapplicable
Article 9 regulating security intrests does not apply to real estate OR to perfection (file application w/ title) of security interests in motor vehicles
III. Creating a Security Interest by Attachment - Three Requirements
A. Written security agreement (or possession of the collateral)
1. With language transferring a security interest in collateral
2. Signed by debtor (enforced against debtor)
3. Containing a description of collateral (attachment makes enforceable between me and you (specific))
4. EXCEPTION: no writing required if the secured party takes possession of the collateral
B. The secured party gives value (past or present consideration)(so want perfect)
C. Debtor has rights in the collateral (usually own it or have right to use other's stuff)(can't give brother's computer unless given right)
IV. Perfecting a Security Interest
A. Perfection Defined
Perfection is the process to make the security interest enforeceable against third parties (parties other than the secured party and the debtor) who take a later interest in the collateral
IV. Perfecting a Security Interest
B. Three ways to perfect a security interest
1. By possession
a. Common law pledge - ex. take friends iPod (attahced and perfected)
b. Pawn shop
2. By attachment of security interest - if the holder has a purchase, money, security, interest (PMSI) in consumer goods (for non-business use, ex. refrigerator for house), other than motor vehicles and fixtures

Loan money or secure credit used to buy collateral
V. Financing Statements - Public Notice of Security Interest
A. Contents
B. When required
Required mehtod of perfecting if no possession of collateral and the security interest is not a PMSI in consumer goods
C. Where to file
Generally, the Secretary of State's office
IV. Perfecting a Security Interest
A. Contents
1. Names and address of the debtor
2. Name and address of the secured party
3. Description of collateral (type of collateral enough - puts public on notice)
VI. Floating Liens - A Security Agreement In:
A. Proceeds
1. Whatever is received by the debtor in exchange for transferred collateral
2. Example: the debtor is granting the lender a security interest in proceeds. Rural banker and hog farmer exchange beans for hog feed, now have a security interest in hog feed.
VI. Floating Liens - A Security Agreement In:
B. Future Advances
1. Loans (advances) to be made by a secured party in the future, that is some time after the promissory note is signed (collateral is security for line of credit)
2. Example: this S.A. Covers: --> *Lien floats to covere new advance
VI. Floating Liens - A Security Agreement In:
C. After acquired property
1. Property of a type similiar to the collateral acquired by the debtor after the execution (signing) of the security agreement
2. Example: inventory --> loan money to finance inventory --> you know it will be sold
VII. Priorities
A. Buyer of goods in the ordinary course of business
B. Purchase Money Security Interest
C. Secondhand purchaser of consumer goods
D. First to Perfect or Become Lien Creditor
E. First to attach if no one perfected
VII. Priorities
A. Buyer of goods in the ordinary course of business
Takes free of security interests in seller's inventory
VII. Priorities
B. Purchase Money Security Interest
A non-inventory PMSI if perfected within ten days of attachment has first priority - priority date relates back to time of attachments to receive priority over other perfected secured parties
VII. Priorities
C. Secondhand purchaser of consumer goods
Takes free of security interest perfected by attachment

Garage sale rule
VII. Priorities
D. First to Perfect or Become Lien Creditor
1. Perfection of a security interest in any of the three ways - possession, attachment, or filing
2. Lien Creditor
a. Someone with judgement and execution (posting notice) lien
b. Trustee in bankruptcy
VIII. Rights and Duties of Parties Upon Default
A. Ignore the security interest
B. Repossession
C. Repossession Sale
D. Retaining Collateral
VIII. Rights and Duties of Parties Upon Default
A. Ignore the security interest
A secured party may obtain a judgement based upon the underlying obligation rather than enforcing teh security interest
VIII. Rights and Duties of Parties Upon Default
B. Repossession
1. A secured party may take possession of collateral convered by a security agreement
2. No breech of peace is allowed when repossesing collateral
3. Example
VIII. Rights and Duties of Parties Upon Default
C. Repossession Sale
Secured parties may dispose of collateral and apply the proceeds to the obligation
VIII. Rights and Duties of Parties Upon Default
D. Retaining Collateral
A secured party may sometimes keep the collateral as satisfaction (payment in full) of the obligation
IX. Effect of Disposition of Collateral at a Repossession Sale
A. Transfer of Good Title
B. Order of distribution of proceeds
IX. Effect of Disposition of Collateral at a Repossession Sale
A. Transfer of Good Title
A purchaser at a valid repossession sale takes title free of ownership claims of the debtor and the secured party
IX. Effect of Disposition of Collateral at a Repossession Sale
B. Order of distribution of proceeds
1. Expenses of the repossession sale (possessing, holding and preparing collateral for sale, including attorney fees)
2. Satisfaction of debt of 1st lien holder (perfected within 10 days)
3. Subordinate (lower priority) security interest holders (who gave written notification)(2nd lien, then 3rd lien, etc.)
4. Debtor is entitled to any surplus. (Usually a debtor is responsible for a deficiency)
X. Termination
When the debt is paid or other obligation satisfied, the secured party files a termination statement in the office where the original financing statement was filed.
I. Process of Sale of Land
A. Marketing and listing agreements
1. A listing agreement is an agreement with a realtor to be the seller's agent for the purpose of selling the property
2. Exclusing Listings: seller of real esate gives realtor teh exclusive right to sell the property. What if:
a. Seller finds buyer: agent still gets full comission
b. Seller changes minda after buyer found: agent still gets comission may want to enter in contract --> condition subsequent
I. Process of Sale of Land
B. Two types of contracts
1. Cash on Closing
2. Installment land contract
I. Process of Sale of Land
B. Two types of contracts
1. Cash on Closing
Purchase price is paid in full at closing; title is transferred immediately
I. Process of Sale of Land
B. Two types of contracts
2. Installment Land Contract
Also called contract for deed. Seller finances and retains title and deed until consideration is paid in full. (Favors seller) --> legal in MO
II. Deeds
A. Parties
1. Grantor: transfers interest in land
2. Grantee: receives interest in land
II. Deeds
B. Types
1. Warranty Deed - title is guaranteed by grantor
2. Quitclaim Deed - title is not guaranteed (not saying they have something)
II. Deeds
C. Requirements
1. Written deed transferring described property, signed, notarized and delivered
III. Types of Ownership Interests
A. Fee Simple Absolute
Entire ownership of the land
III. Types of Ownership Interests
B. Fee Simple Defeasible
1. Entire ownership, subject toa condition (subsequent)
2. Example: Client gave land to school district as long as it is used for school purposes. He got land back when they abandoned the school.
III. Types of Ownership Interests
C. Partial Interests
1. Easements: right to suse a portion of real estate without owning it.
a. Example: utility, roadway
2. Profits: right to enter land and remove something from it.
a. Example: mineral rights easement, must agree not to explore to get rid of
3. Licenses: revocable, temporary right to use real estate
a. Example: may be breech of contract but have right to revoke
III. Types of Ownership Interests
D. Life Estate (Life Tenancy)
1. Right to exclusive possession of real estate based on the life of a specified person
2. Example: Disabled child received life estate in house because set up for them
III. Types of Ownership Interests
E. Future Interest (Reversionary Interest)
F. Tenancies
1. An ownership interest in land which becomes tangible i the future
2. Example: After death, reverts back to grantor
IV. Assuring Good Title
A. Abstract of Title and Title Opinion
B. Title Insurance
A. Abstract of Title and Title Opinion
1. Summary of all transactions pertaining to the land since title came from the government
2. Title opinion: lawyer's opinion on title of the title after examining abstract
B. Title Insurance
1. Insurance company guarantees good title
2. Check exclusions carefully
V. Real Estate Financing
A. Parties
1. Mortgagor: assigns a mortgage (borrower)
2. Mortgagee: receives and holds a mortgage (lender)
B. History
1. Title Theory: Title and possession in Mortgagee-bank gets property (PAST)
2. Lien Theory: Title and possession in Mortgagor-bank sells property (PRESENT)
VI. Chronology of Mortgage
A. Selection of Financing Vehicle
B. Types of Financing Instruments
1. Mortgage - a lien on real estate where the mortgagee personally exercises foreclosure rights (Never in MO)
2. Deed of Trust - a lien on real estate where a third party, the trustee exercises foreclosure rights (Always)
3. Requirements for a valid mortgage: Signed, notarized, delivered writing, just as with deeds
C. Open-end Mortgage (line of credit)
Mortgage secures future advances
D. Second Mortgage
1. Lower in priority and usually later in time than the first
2. May also have third or fourth mortgage, etc.
VII. Types of Clauses in Mortgages
A. Acceleration
Allows declaration that entire balance is due if there is a default
VII. Types of Clauses in Mortgages
B. Due on Sale
Allows acceleration if interest in land is sold
VII. Types of Clauses in Mortgages
C. Power of Sale
Allows private foreclsure (non-judicial, without court)
VII. Types of Clauses in Mortgages
D. Points
Loan origination fees where one point equals one percent of the loan amount
VII. Types of Clauses in Mortgages
E. Prepayment Privileges
Allows early payment without penalty
VIII. Default
A. Creditor's Rights
1. Acceleration - must be in promissory note (always is)
2. Private or Judicial Foreclosure
3. Deficiency Judgment - allows to collect deficiency
VIII. Default
B. Debtor's Rights
1. Equity of Redemption - right to repurchase (pay off) th ereal estate prior to foreclosure (by paying the entire balance due to the mortgagee)
2. Statutory Redemption - right to repurchase after foreclosure.
a. Example: some states you have 1 year, MO if it is a tax sale
b. Right is very limited in Missouri. (give notice, post bond for damages to mortgagee, only if mortgagee bought at foreclosure)
3. Statutory Notice of Foreclosure Sale
IX. Priorities of Mortgages/Deeds
A. Race Statute
B. Notice Statute
C. Notice-Race
IX. Priorities of Mortgages/Deeds
A. Race Statute
1. First to record a mortgage or deed wins
a. Race to the courthouse
b. Record with the Recorder of Deeds for county. or city of St. Louis
IX. Priorities of Mortgages/Deeds
B. Notice Statute
1. One who has notice of another's interest prior to receiving an interest in the land cannot defeat the other's interest
2. Recording is one way to prove notice
IX. Priorities of Mortgages/Deeds
C. Notice-Race
1. First to record without notice of another's interest wins
2. Missouri
(Usually same result as Notice Statute)
I. Types of Tenancies
A. Tenancy for Years
B. Periodic Tenancy
C. Tenancy at Will
D. Tenancy at Sufferance
E. Missouri Rule
I. Types of Tenancies
A. Tenancy for Years
A tenancy for any specific period of time, even less than one year
I. Types of Tenancies
B. Periodic Tenancy
A tenancy for automatically renewable successive periods of time, such as month to month
I. Types of Tenancies
C. Tenancy at Will
A tenancy with no specific time frame - terminable by either party at any time
I. Types of Tenancies
D. Tenancy at Sufferance
Wrongful possession of land by a tenant - wrongful initial possession or a wrongful holding over aftera lease term
(Lease is up and you stay)
I. Types of Tenancies
E. Missouri Rule
A periodic tenancy, tenancy at will, tenancy at sufferance, or an oral lease are all converted to month to month unless the lease is for agricultural land, then they are converted to year to year
II. Leases
A. Temporary Exclusive Possession (not purchase)(landlord can't move in with you)
B. Covenants in Lease
1. Dependent Covenants - breach is material, non-breaching party is relased from the lease
2. Independent Covenants - breach is immaterial, non-breaching party is bound to the lease (more minor)
C. Conditions - Ex. no pets, no more than 3 unrelated --> breech leads to forefeiture
D. Remedies
III. Possession (4 Areas of Concern)
A. Landlord Must Give Possession
1. English Rule: Actual Possession
2. American Rule: Legal right to Possession
B. Landlord Must Prevent Interference
C. Landlord Has a Reversionary Interest
A future interest in the property in which the right of possession is returned to the landlord at the end of the lease
D. Eviction - removal of tenant by landlord
IV. Eviction
A. Actual eviction
Actual eviction occurs by eviction notice of legal action
IV. Eviction
A. Actual eviction
B. Constructive eviction - three step process
C. Retailiatory eviction
D. Causes of eviction
IV. Eviction
B. Constructive Eviction - three step process
1. Defect in premises cause substantial interference with ability to live there
2. Tenant notifies landlord who fails to remedy the defect
3. Tenant leaves the premises
IV. Eviction
C. Retailiatory eviction
1. Defined: an eviction as a response to a complaint to a housing authority
IV. Eviction
D. Causes of eviction
1. Non payment of rent
2. Waste (damaging property) or prohibited alterations
3. Unlawful use (housing one too many people) or nuisance (loud stereo all night)
4. Example
V. Duty to Repair
A. Landlord's Duties
1. Common Law - no duty of landlord to repair
2. Modern Rule - Missouri
a. Housing Codes - require landlords to meet certain standards
b. Implied Warranty of Habitability - requires residential landlord to keep the property fit for human habitation (occumpancy), that is the property must be free of defects which endanger life, health or safety
c. Duty to keep common areas safe
d. Contractual Duties - landlord may fix all major issues
V. Duty to Repair
B. Landlord's Liability for Injuries
1. Common Areas - landlord may be liable for maintenance in common areas
2. High Crime Areas - may be liability for inadequate security if reasonable foreseable
VI. Tenant's Obligation to Repair
A. Commercial
Entire obligation to repair often allocated to tenant
VI. Tenant's Obligation to Repair
B. Residential
1. Tenant's duty reduced by housing codes and the implied warranty of habitability
2. Tenant may contract to make certain repairs and is also responsible for intentional or negligent actions which damage the property
VI. Tenant's Obligation to Repair
C. Areas in Tenant's Control
1. Must be kept safe for invited guests
2. Example: guest gets hurt on swing you said to get on, may be liable
VII. Lease Clauses as to Payment
A. Rent
A dependent covenant
VII. Lease Clauses as to Payment
B. Late Charges
A type of liqudated damages - agree to damages in advance of breach
VII. Lease Clauses as to Payment
C. Deposits
Secure against non-payment of rent and against waste or damages
VII. Lease Clauses as to Payment
D. Taxes and Insurance
Usually landlord pays, but in commercial leases or leases with options to buy, the tenant frequently pays all or part of these expenses
VIII. Assignment and Sublease
A. Types
1. Assignment - transfer by tenant of all first tenant's rights to second tenant (assignor to assignee)
2. Sublease - transfer of part of tenant's rights to second tenant (sublessor or sublessee)
B. Missouri Rule
No sublease or assignment of a lease of less than two years duration without written approval of the landlord
C. Release
Agreement to release by landlord necessary to release first tenant from liability where sublease or assignment
IX. Termination
A. Notice to Quit
1. Month to Month
a. Notice must be given before the first day of the month to terminate the lease at the end of the month
b. Example: must give full calendar month notice
2. Year to Year - notice must be given 60 days prior to end of the lease year to terminate the lease at the end of the year
IX. Termination
B. Holding Over after Lease Term
1. With landlord's approval, the lease reverts to month to month (in city not agriculture)
2. Without approval of the landlord, the tenant is responsible for double rent
X. Remedies
A. Summary Procedures
B. Landlord's Lien
C. Duty to Mitigate
X. Remedies
A. Summary Procedures
Allow a landlord to evict tenant quicker by providing for an quicker trial date and fewer defenses
X. Remedies
B. Landlord's Lien
1. Allows a landlord to keep tenant's property as security for non-payment of rent or damages to the real estate
2. No landlord's lien in Missouri except for on crops
X. Remedies
C. Duty to Mitigate
1. Duty to lessen, tenant's damages, usually by seeking a new tenant
2. No duty of a landlord in Missouri to mitigate unless the landlord keeps the security deposit (Always Done)