Multistate Bar Exam - Property

Front 1

Natural Flow Theory

Back 1

A landowner cannot alter the rate or manner of natural flow of surface waters where such actions would injure others above or below him.

Front 2

Riparian Doctrine

Back 2

Owners of land bordering watercourses have riparian rights to the water; their rights depend on the theory (natural flow or reasonable use) followed by the jurisdiction.

Front 3

Prior Appropriation Doctrine

Back 3

Landowners may acquire the right to divert and use water even though their property might not abut a watercourse.

Front 4

Common Enemy Theory

Back 4

Surface water is a common enemy and any owner can change its course to get rid of it.

Front 5

Remainder

Back 5

A future interest created in a transferee that is capable of taking in possession on the natural termination of the preceding estate.

Front 6

Vested Remainder

Back 6

A remainder is vested if the beneficiaries are ascertainable and their taking in possession is not subject to a condition precedent.

Front 7

Vested Remainder Subject to Open

Back 7

A vested remainder created in a class of persons that is certain to take but is subject to diminution by reason of others becoming entitled to take.

Front 8

Vested Remainder Subject to Total Divestment

Back 8

Vested remainders may be subject to total divestment if possession is subject to being defeated by the happening of a condition subsequent.

Front 9

Covenant of the Right to Convey

Back 9

A promise that the grantor has the power and authority to make the grant. This covenant is breached, if at all, at the time of conveyance if the grantor is not the owner of the interest he purports to convey.

Front 10

Adverse Possession

Back 10

1. Actual entry

2. Exclusive possession

3. Open and notorious

4. Adverse and under a claim of right (hostile)

5. Continuous for the statutory period

Front 11

Tacking

Back 11

Separate periods of adverse possession may be "tacked" together to make up the full statutory period with the result that the final adverse possessor gets title, provided there is privity between the successive adverse holders.

Front 12

Privity

Back 12

There is privity if the subsequent possessor takes by descent, devise, or deed purporting to convey title.

Front 13

Shelter Rule

Back 13

A person who takes from a bona fide purchaser will prevail against any interest that the transferor bona fide purchaser would have prevailed against.

Front 14

Easement by Necessity

Back 14

Arises when the owner of a tract of land sells a part of the 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, provided the location is reasonably convenient.

Front 15

Easement by Prescription

Back 15

1. Actual use

2. Open and notorious

3. Adverse

4. Continuous and uninterrupted for the statutory period

Front 16

Implied Covenant of Marketable Title

Back 16

This covenant is implied into every land sale contract, requiring that at closing the seller will provide the buyer with marketable title (i.e., title reasonably free from doubt). Generally, this means an unencumbered fee simple with good record title.

Front 17

Rule Against Perpetuities

Back 17

No interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at the creation of the interest. Only contingent remainders, executory interests, and vested remainders subject to open are subject to the Rule Against Perpetuities.

Front 18

Easement by Express Grant

Back 18

Created by a writing signed by the grantor. If validly created, an easement is presumed to be of perpetual duration.

Front 19

Extinguishing an Easement by Prescription

Back 19

The owner of the servient tenement must so interfere with the easement as to create a cause of action in favor of the easement holder. The interference must be open, notorious, continuous, and nonpermissive for the prescriptive period.

Front 20

Terminating an Easement by Abandonment

Back 20

The nonuse must rise to the level of abandonment, which requires physical action by the easement holder that manifests an intention to permanently abandon (e.g. construction of a structure on the easement holder's property that would make it impossible to use the easement).

Front 21

Restraints on Alienation of Interests in Fee Simple

Back 21

Direct restraints on alienation of a fee simple are void.

Front 22

Responsibilities of a Life Tenant for Taxes

Back 22

Life tenants, including life tenants pur autre vie, are responsible for paying taxes on the property.

Front 23

Responsibilities of a Life Tenant for Mortgages

Back 23

Life tenants, including life tenants pur autre vie, must pay the interest on the mortgage, but not the principle.

Front 24

Fee Simple Determinable

Back 24

An estate that automatically terminates on the happening of a stated condition and goes back to the grantor.

Front 25

Possibility of Reverter

Back 25

The interest that is left in a grantor who conveys in fee simple determinable. This interest is freely transferable, devisable, and descendible.

Front 26

Landlord's Liability for Latent Defects

Back 26

A landlord is not liable for latent defects unless the landlord knew or had reason to know of the defects.

EXCEPTION: landlords will be liable for latent defects (even if they neither knew or should have known) if the lease is for a short term and the property is furnished.

Front 27

Landlord's Remedies for a Tenant's Wrongful Holdover

Back 27

1. Treat the tenant as a trespasser and sue for damages and possession; or

2. Impose a new periodic tenancy for the same period and rent as the old tenancy (note: if the landlord has told the tenant of future higher rent before the expiration of the old lease, the higher rent is imposed for the new periodic tenancy).

Front 28

License

Back 28

A privilege to enter onto another's property. A license may be revoked at any time merely by a manifestation of the licensor's intent to end it.

Front 29

Extinguishing an Easement by Merger

Back 29

A merger will extinguish an easement when the duration of the servient estate is equal to or longer than the duration of the dominant estate. E.g.: A owns a life estate in Blackacre and an easement in Whiteacre. A purchases Whiteacre in fee simple. The easement is extinguished.

Front 30

Doctrine of Changed Neighborhood Conditions

Back 30

Restrictive covenants on all lots in a subdivision can be voided if changed conditions have made the property unusable for the specified use, and this means that the entire subdivision must have changed so significantly that enforcement of the restriction would be inequitable.

Front 31

Implied Right to Use Proceeds to Clear Title

Back 31

A seller may use the proceeds paid by the buyer at closing to pay off the mortgages, and thus deliver clear title to buyer. As long as the amount due from the buyer is enough to pay off the outstanding notes, the seller has an implied right to do this, and the existence of notes under these circumstances does not breach the contract sale.

Front 32

Trade Fixtures

Back 32

Absent an agreement to the contrary, equipment installed for the purpose of trade by a tenant, even if it would otherwise constitute a fixture, is generally removable if it is not an integral part of the premises and the tenant pays for any damages caused by the removal.

Front 33

Effect of Foreclosure Sale on Mortgages

Back 33

A foreclosure sale wipes out all junior mortgages (those that came later in time than the mortgage that was foreclosed), but does not affect senior mortgages (those that came earlier).

Front 34

Transferee Takes Subject to Mortgage

Back 34

The third party cannot be sued on the underlying debt, but the mortgage follows the property and and if the transferee does not make payments, the mortgagee may foreclose on the property. The mortgagor, the buyer, remains liable on the mortgage after the transfer and can be sued on the debt.

Front 35

Transferee Assumes the Mortgage

Back 35

A grantee who signs an assumption agreement promises to pay the mortgage loan, thus becoming personally and primarily liable to the lender. The original mortgagor becomes secondarily liable as a surety, and the property may be foreclosed upon.

Front 36

Effects of Transfer of Nonnegotiable Note

Back 36

If the original mortgagee transfers possession of a nonnegotiable note without giving notice of the transfer to the mortgagor, the mortgagor's payment to the original mortgagee is effective even though it is not made to the person entitled to enforce the instrument.

Front 37

Covenants Accompanying a General Warranty Deed

Back 37

1. Future Covenant for Quiet Enjoyment

2. Future Covenant of Warranty

3. Future Covenant for Further Assurances

4. Present Covenant of Seisin

5. Present Covenant of Right to Convey

6. Present Covenant Against Encumberances

Front 38

Fee Simple Subject to Executory Interest

Back 38

An estate that, on the happening of a stated event, is automatically divested in favor of a third person.

Front 39

Reasonable Use Doctrine

Back 39

A landowner is limited to reasonable use of waters for beneficial purposes. A reasonable use is just about any use on the land that is not merely malicious or a waste of water.

Front 40

Equitable Mortgage

Back 40

Where a deed is given for security purposes. A court will imply an equitable mortgage based on:

1. existence of a debt or promise of payment by deed's grantor;

2. grantee's promise to return land when debt is paid;

3. amount advanced is much lower than value of property;

4. degree of grantor's financial distress;

5. parties' prior negotiations.

Front 41

Proceeds of Foreclosure

Back 41

The proceeds are used to first pay the expenses of the sale, attorney's fees, and court costs; then to pay the principal and accrued interest on the loan that was foreclosed; then to pay off junior interests. Any remaining proceeds are returned to the mortgagor.

Front 42

Statute of Frauds for Land Sale Contracts

Back 42

A land sale contract is unenforceable unless it is in writing and signed by the party to be charged. The writing must contain all essential terms of the contract, which are:

1. a description of the property

2. identification of the parties to the contract

3. the price and manner of payment

4. the signature of the party to be charged

Front 43

Leasehold Exception to the Rule Against Perpetuities

Back 43

Long-term option contracts (i.e. longer than 21 years) do not violate the Rule Against Perpetuities when the option-holder is the current lessee.

Front 44

Reciprocal Negative Servitudes

Back 44

A negative covenant or equitable servitude implied into a deed where a developer subdivides land into several parcels and some of the deeds contain negative covenants but some do not. In order to imply reciprocal negative servitudes, there must be a common scheme for development, and record/actual/inquiry notice of the covenants.

Front 45

Present Covenants

Back 45

A covenant which can be breached only at the time of conveyance.

Front 46

Future Covenants

Back 46

A covenant which can be breached only upon eviction (i.e., interference with the possession of the grantee or her successors by someone with better title).

Front 47

Covenant of Warranty

Back 47

The grantor agrees to defend the grantee's title from any third party's lawful or reasonable claims of title and to compensate the grantee for any related loss.

Front 48

Covenant of Seisin

Back 48

The grantor warrants that she has the estate or interest she purports to convey (i.e., both title and possession) at the time of the grant.

Front 49

Covenant Against Encumbrances

Back 49

The grantor warrants that there are no encumbrances (e.g., easements, profits, or mortgages) against the title or interest conveyed.

Front 50

Covenant of Right to Convey

Back 50

The grantor warrants that she has the power and authority to make the grant (i.e., she has title or is the titleholder's authorized agent).

Front 51

Bona Fide Purchaser

Back 51

A purchaser who takes land without notice of a prior instrument and pays valuable consideration.

NOTE: donees, heirs, and devisees can never be BFPs because they do not give value for their interests.

Front 52

Notice Recording Statute

Back 52

A later purchaser of land will prevail over an earlier grantee if she takes without actual or constructive (e.g. record) notice of the earlier grant.

E.g. "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded."

Front 53

Race-Notice Recording Statute

Back 53

A later purchaser will prevail over an earlier grantee only if she takes without actual or constructive (e.g., record) notice of the earlier grant and records before he does.

E.g. "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded."

Front 54

Pure Race Recording Statute

Back 54

The first party to record, regardless of the date of her conveyance, wins.

E.g. "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded."

Front 55

When will an oral contract for the sale of land be enforced in equity?

Back 55

If the buyer has performed at least two of the following acts:

1. Taken possession of the land;

2. Made substantial improvements to the land;

3. Paid all or part of the purchase price.

Front 56

The Doctrine of Equitable Conversion

Back 56

The buyer of land is considered to own (i.e., hold equitable title to) the real property once the contract is signed. The seller is entitled to the proceeds of sale.

Front 57

Time is Not of the Essence

Back 57

The time of performance stated in a land sale contract is not absolutely binding. A party, even though late in tendering her own performance, can still enforce the contract if she tenders within a reasonable time after the stated date.

Front 58

When can the presumption that time is not of the essence be overcome?

Back 58

1. The contract states that time is of the essence;

2. Circumstances indicate that the parties intend that time is of the essence;

3. One party notifies the other within a reasonable time before closing that time is of the essence.

Front 59

Deed of Trust

Back 59

A security interest in land by which the debtor (i.e., the trustor) transfers title to the land to a third party (i.e., the trustee) acting on behalf of the lender (i.e., the beneficiary). In the event of default, the lender instructs the trustee to foreclose the deed of trust by selling the property.

Front 60

What happens when a mortgagee transfers a promissory note without a written assignment of the mortgage?

Back 60

The mortgage follows the note. While it is possible to transfer the note without the mortgage, the mortgage automatically will follow the properly transferred note; no separate written assignment of the mortgage is necessary.

Front 61

Assignment of a Mortgage

Back 61

A mortgagee who transfers her interest usually does so by indorsing the note and executing a separate assignment of the mortgage.

Front 62

Title Theory

Back 62

Legal title is in the mortgagee until the mortgage has been satisfied or foreclosed. Thus, the mortgagee is entitled to possession upon demand at any time, which means the mortgagee can take possession as soon as the mortgagor defaults.

Front 63

Intermediate Theory

Back 63

Title transfers from the mortgagor to the mortgagee on default, allowing the mortgagee to take possession as soon as the mortgagor defaults.

Front 64

Lien Theory

Back 64

The mortgagee is deemed to hold a security interest in the land and the mortgagor is considered the owner of the land until foreclosure. Thus, the mortgagee may not take possession of the land before foreclosure.

Front 65

Redemption

Back 65

At any time prior to the foreclosure sale, the mortgagor has the right to redeem the land or free it of the mortgage by paying off the amount due, plus interest. If the mortgage contained an acceleration clause, the full balance must be paid in order to redeem.

Front 66

Statutory Right to Redeem

Back 66

A statutory right to redeem a foreclosed mortgage for some fixed period after the foreclosure sale has occurred (e.g., six months or one year).

Front 67

Waiver of the Right to Redemption

Back 67

The right to redeem land in equity cannot be waived in the mortgage itself. Doing so is known as "clogging the equity of redemption" and is prohibited.

Note: the right can be waived later, for consideration.

Front 68

Effect of Optional Advances on Priority Among Mortgages

Back 68

If a junior mortgage is placed on the property and the senior mortgagee later makes an "optional" advance (i.e., one it was not contractually bound to make) while having notice of the junior mortgage, the advance will lose priority to the junior mortgage.

Front 69

Periodic Tenancy

Back 69

A periodic tenancy is a tenancy that continues from period to period until terminated by proper notice by either the landlord or the tenant. It may be created by implication if a lease with no set termination date provides for the payment of periodic rent.

Front 70

Tenancy at Will

Back 70

A tenancy that continues only until the landlord or the tenant gives notice and time to quit. A tenancy at will can arise when a lease has no set termination date, but a provision requiring annual or monthly rent payments will convert it to a periodic tenancy.

Front 71

Tenancy for Years

Back 71

A tenancy that continues for a fixed period of time and then ends automatically on its termination date.

Front 72

Constructive Eviction

Back 72

If the landlord's breach makes the premises untenantable, the tenant may terminate the lease and also make seek damages if the following conditions are met:

1. breach was by landlord or his agents;

2. breach substantially and materially deprived tenant of her use and enjoyment of the premises;

3. tenant gave landlord notice and a reasonable time to repair; and

4. tenant vacates the premises within a reasonable time.

Front 73

Rule in Dumpor's Case

Back 73

If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers.

NOTE: the landlord may reserve the right to avoid future transfers, but this reservation must happen at the time of granting consent.

Front 74

Fixture

Back 74

A chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty.

Front 75

When may a tenant remove a chattel that the tenant affixed to the leased premises?

Back 75

If removal occurs before termination of the lease and leaves no damage to the premises (or any damage done by removing them is repaired by the tenant).

Front 76

Right of Entry

Back 76

A future interest retained by grantor who conveys a fee simple subject to a condition subsequent.

Front 77

Reversion

Back 77

A future interest retained by a grantor who conveys a lesser estate than the grantor owns.

E.g. where O has a fee simple, a conveyance from "O to A for life" creates a life estate in A and a reversion in O.

Front 78

Horizontal Privity

Back 78

Exists between parties to a real covenant who shared an independent interest in the land at the time they entered the covenant.

Front 79

When does the burden of a covenant run with the land?

Back 79

1. Original parties intended it to run;

2. Successor in interest has notice of it;

3. Horizontal privity between original parties;

4. Vertical privity between covenantor and successor in interest; and

5. Covenant touches and concerns the land.

Front 80

Vertical Privity

Back 80

The relationship between an original party to a real covenant and her successor in interest.

Front 81

When does the burden of an equitable servitude run to successors in interest?

Back 81

1. Original parties intended it to run;

2. Successor in interest has notice of it (if she has given value); and

3. Covenant touches and concerns the land.

Front 82

When does the benefit of a covenant run to successors in interest?

Back 82

1. Original parties intended it to run;

2. Vertical privity between covenantee and successor in interest; and

3. Covenant touches and concerns the land.

Front 83

Profit

Back 83

A nonpossessory interest in land entitling the holder to go upon another's land and take the soil or a substance of the soil (e.g. minerals, timber), but giving no right to possess and enjoy the land.

Front 84

Real Covenant

Back 84

A written promise to use or not to use the land in a certain manner.

Front 85

Easement in Gross

Back 85

A person whose interest in land gives him the right to use someone else's land independent of his ownership or possession of his own tract holds an easement in gross.

Front 86

Easement Appurtenant

Back 86

An easement which benefits its holder in his physical use or enjoyment of his own tract of land.

Front 87

Easement by Implication

Back 87

An easement is implied if, prior to the time the property is divided, a use exists on the servient part that is reasonably necessary for the enjoyment of the dominant party, and the parties intended the use to continue after division of the property. The use must be continuous and apparent at the time of division.

Front 88

Extinguishing an Easement by Estoppel

Back 88

To extinguish an easement by estoppel, there must be:

1. some conduct or assertion by the owner of the easement;

2. reasonable reliance by the owner of the servient tenement; and

3. a change in position.

Front 89

Permissive Waste

Back 89

When the land is allowed to fall into disrepair, or when reasonable action is not taken to protect the land.

Front 90

Creation of a Joint Tenancy

Back 90

Required for unities:

1. time (interests must vest at the same time);

2. title (interests must be acquired by the same instrument);

3. interest (interests must be of the same type and duration); and

4. possession (interests must give identical rights to enjoyment)