Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/454

Click to flip

454 Cards in this Set

  • Front
  • Back
What type of language will create a fee simple absolute?
"To A" or
"To A and his heirs"
What is the duration of a fee simple absolute?
Fee simple absolute creates absolute ownership or a potentially infinite duration.
What is the transferability of a fee simple absolute?
- Devisable
- Descendable
- Alienable
What future interest is created by a fee simple absolute?
None.
What type of language creates a feee tail?
"To A and the heirs of his body"
What is the duration of a fee tail?
A fee tail lasts only as long as there are lineal blood descendants of the grantee.
What is the transferability of a fee tail?
A fee tail passes automatically to grantee's lineal descendants
What type of future interest is created by a fee tail?
A reversion, if held by the grantor.

A remainder, if held by a third party
What are the three types of defeasible fees?
- Fee simple determinable

- Fee simple subject to condition subsequent

- Fee simple subject to an executory limitation
What type of language creates a fee simple determinable?
"To A so long as..."

"To A until..."

"To A while..."

(Language providing that upon the happening of a given event, the land is to revert to the grantor).
What is the duration of a fee simple determinable?
Potentially infinite, provided the specified event does not occur
What is the transferability of a fee simple determinable?
- Devisable
- Descendable
- Alienable
subject to the condition.
What type of future interest is created by a fee simple determinable?
Possibility of reverter (held by the grantor)
What type of language creates a fee simple subject to condition subsequent?
"To A, but if X event happens, grantor reserves the right to reenter and retake."
(Grantor must carve out right of reentry)
What is the duration of a fee simple subject to condition subsequent?
Potentially infinite, so long as the condition is not breached, and, thereafter, until the holder of the right of entry timely exercises the power of termination
What is the transferability of a fee simple subject to condition subsequent?
- Devisable
- Descendible
- Alienable
subject to condition
What future interest is created by a fee simple subject to condition subsequent?
Right of Entry/Power of Termination (held by grantor)
What language creates a fee simple subject to an executory limitation?
"To A, but if X event occurs, then to B."
What is the duration of a fee simple subject to an executory limitation?
Potentially infinite, so long as stated contingency does not occur.
What is the transferability of a fee simple subject to an executory limitation?
- Devisable
- Descendible
- Alienable
subject to condition
What future interest is created by a fee simple subject to an executory limitation?
Executory interest (held by third party)
What language creates a life estate?
"To A for life." or
"To A for the life of B."
What is the duration of a life estate?
It is measured by the life of the transferee or by some other life.
What is the transferability of a life estate
Alienable
Also devisable and descendible IF pur autre vie and measuring life is still alive
What future interest is created by a life estate?
Reversion, if held by grantor.

Remainder, if held by third party.
What does devisable mean?
Can pass by will
What does descendible mean?
Will pass by the statutes of intestacy if its holder dies intestate.
What does alienable mean?
Transferable inter vivos.
Can a person have heirs while alive?
No. A living person has only prospective heirs.
What is the current status of the fee tail?
Virtually abolished in the US today, including NY
What does the attempted creation of a fee tail create today?
A fee simple absolute
What is the fee simple determinable called in NY?
A "fee on limitation"
What is the result of violation of the stated condition with a fee simple determinable?
Forfeiture is automatic.
What is the Mick Jagger rule of property?
You may convey less than what you started with, but you can't convey more.
What is the neumonic device for remembering the pairing of present and future interests?
"Frank Sinatra Didn't Prefer Orville Redenbacher"

"Fee Simple Determinable Possibility of Reverter."
What is a fee simple subject to condition subsequent called in NY?
A "fee on condition"
What is the defining characteristic of the fee simple subject to condition subsequent?
It's my prerogativee as to whether I choose to terminate the estate.
What is the right of entry or power of termination called in NY?
The right of reaquisition.
What is the distinguishing characteristic of a fee simple subject to an executory limitation?
Like the fee simple determinable, but if condition is broken, estate is automatically forfeited in favor of someone other than grantor.
What are the important rules of construction with respect to the defeasible fees?
1) Words of mere desire, hope, intention, or expectation are insufficient to create a defeasible fee.

2) Absolute restraints on alienation are void.
What is an absolute restraint on alienation?
An absolute ban on the power to sell or transfer that is not linked to any reasonable, time-limited purpose.
How may a life estate never be measured?
In terms of years. Must be measured in explicit lifetime terms. If years are used, it creates a term of years - a leasehold interest and not the life estate.
What is a life estate pur autre vie?
A life estate measured by a life other than the grantee's
What is the distinguishing characteristic of the life estate?
The life tenant's entitlements are rooted in the doctrine of waste.
What are the general rules with respect to the life tenant and waste?
1) The life tenant is entitled to all ordinary uses and profits from the land.

2) The life tenant must not commit waste, meaning he must not do anything to hurt the future interest holders.
What are the three species of waste?
1) Voluntary or affirmative waste;

2) Permissive waste, or neglect;

3) Ameliorative waste
What is voluntary or affirmative waste?
Actual, overt conduct that causes a decrease in value.
What is the general rule with respect to voluntary waste and natural resources?
The life tenant must not consume or exploit natural resources on teh property (such as timber, oil, or minerals), unless one of four exceptions applies.
What are the exceptions to the general rule with respect to voluntary waste and natural resources?
"PURGE"
PU - Prior Use, meaning that life tenant may continue to exploir if, prior to the grant, the land was used for exploitation (unless otherwise agreed)

R - Reasonable repairs, meaning that hte life tenant may consume natural resources for reasoanble repairs and maintenance of the premises.

G - Grant, meaning the life tenant may exploit if expressly granted the right to do so,

E - Exploitation, meaning this land is suitable only for exploitation.
What is the prior use and open mines doctrine?
If mining was done on the land before the life estate began, the life tenant may continue to mine, but is limited to the mines already open. The life tenant must not open any new mines.
What is permissive waste or neglect?
Occurs when land is allowed to fall into disrepair or the life tenant fails to reasonably protect the land.
What is the life tenant's obligation to repair?
The life tenant must simply maintain the premises in reasonably good repair.
What is the life tenant's obligation to pay taxes?
The life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or proifts from teh land. If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of the premises' fair rental value.
What is the doctrine of ameliorative waste?
The life tenant must not engage in acts that will enhance the property's value unless all of the future interest holders are known and consent.
What are the future interests capable of creation in the grantor and what present interests do they accompany?
1) Possiblility of Reverter - only accompanies the fee simple determinable (FSDPOR)

2) Right of Entry or Power of Termination (or, in NY, right of reaquisition)- accompanies only the fee simple subject to condition subsequent (or, in NY, the fee on condition)

3) The reversion (the future interest that arises in a grantor who transfers an estate of lesser quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent)
What types of future interests are held by someone other than the grantor?
1) Vested remainder;
2) Contingent remainder; OR
3) Executory interest
What types of vested remainders are possible?
1) Indefeasibly vested reemainder;
2) Vested remainder subject to complete defeasance (also known as the vested remainder subject to total divestment); AND
3) Vested remainder subject to open
What types of executory interests are possible?
1) Shifting executory interest; AND
2) Springing executory interest
What are the tasks involved in assessing future interests in transferees?
1) First, must distinguish vested remainders (of which there are three kinds) from contingent remainders;

2) Second, must distinguish the three kinds of vested remainders from each other; AND

3) Third, must distinguish all remainders from executory interests.
What is a remainder?
A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.
What are the characteristics of remainderman?
Sociable (never travels alone), Patient, and Polite
1) Remainderman always accompanies a preceding estate of known fixed duration. That preceding estate is usually a life estate or a term of years.

2) Remainderman never follows a defeasible fee. He waits patiently for the preceding estate to run its natural course. (Remainderman CANNOT cut short or divest a prior transferee. If your present estate is a defeasible fee, your future interest is NOT a remainder. Instead, it will be executory interest if held by someone other than O)
When is a remainder vested?
A remainder is vested if it is BOTH created in an ascertained person and is not subject to any condition precedent.
When is a remainder contingent?
A remainder is contingent iff it is created in an unascertained person OR it is subject to a condition precedent, or both.
What is a future interest in a transferee that is subject to a condition precedent called in NY?
A "remainder subject to a condition precedent."
When is a condition a condition precedent?
When it appears BEFORE the language creating the remainder or is woven into the grant to remainderman. A condition precedent is a prerequisite.
When a remainder is contingent because of the existence of a condition precedent, what happens if the condition precedent is satisfied?
The contingent remainder is transformed automatically into an indefeasibly vested remainder.
What is the Rule of Destructibility of contingent remainders?
At common law, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended.
What is the current status of the Rule of Destructibility in the US?
It has been abolished, including in NY.
What happens today if a contingent remainder is still contingent at the time the preceding estate ends?
Grantor or his heirs hold the estate subject to the springing executory interest of hte party who had the contingent remainder and when the condition precedent is satisfied, that party takes.
What is the Rule in Shelley's Case?
It is a rule of law (not a rule of construction) and applies even in the face of contrary grantor intent. It holds that where grantor attempts to convey a life estate, with remainder to the life tenant's heirs, the present and future interests merge, giving the purported life tenant instead a fee simple absolute.
What is the current status of the Rule in Shelley's Case?
The Rule has been virtually abolished, including in NY.
What happens today if a Shelly's Case situation arises?
A has a life estate and A's as yet unknown heirs have a contingent remainder. O has a reversion becuase A could die without heirs.
What is the Doctrine of Worthier Title?
Also known as the rule against a remainder in grantor's heirs- it applies when O, who is alive, tries to create a future interest in his heirs. Where O attempts to convey "To A for life, then to O's heirs," the doctrine of worthier title prevents O's heirs from having a contingent remainder and instead gives O a reversion. But, it is a rule of construction and not a rule of law, so grantor's intent controls and if grantor clearly intends to create a contingent remainder in his heirs, than that intent is binding.
What is the current status of the doctrine of worthier title?
Still viable in most states today. BUT

NY has abolished it with respect to transfers taking effect after September 1, 1967.
What is the defining characteristic of the indefeasibly vested remainder?
The holder of this remainder is certain to acquire an estate in the future, with no conditions attached.
What are the requirements for an individual to have an indefeasibly vested remainder?
He must be born and there must be no strings attached to his interest once he gets it. (OK that there is a possibility he will outlive the life tenant b/c then the estate will simply pass by will or by intestacy to his heirs)
What is the vested remainder subject to complete defeasance (aka vested remainder subject to total divestment) called in NY?
A "remainder vested subject to complete defeasance."
What are the characteristics of a vested remainder subject to complete defeasance?
Remainderman exists and his taking is not subject to any condition precedent. However, his right to possession could be cut short because of a condition subsequent.
What does a condition precedent create?
A contingent remainder.
What does a condition subsequent create?
A vested remainder subject to complete defeasance.
How can you tell the difference between a condition precedent and a condition subsequent?
Apply the "comma rule." When conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance.
Is it possible for a person to die without heirs?
Yes.
What is the vested remainder subject to open?
Exists where a remainder is vested in a group of takers, at least one of whom is qualified to take possesion. But, each class member's share is subject to partial diminution because additional takers, not yet ascertained can still qualify as class members.
When is a class open?
If it is possible for others to enter.
When is a class closed?
When its maximum membership has been set so that persons born thereafter are shut out.
What is the rule for when a class closes and what does it hold?
The common law rule of convenience holds that the class closes whenever any member can demand possession.
Where the conveyance is: "To A for life, then to B's children," A is alive, and B has two children - C and D, when does the class close?
Either at B's death OR, according to the rule of convenience, at A's death, no matter that B is still alive. This is because that is when C and D can demand possession and once A dies, a child of B born or conceived thereafter will not share in the gift.
What is the exception to the rule of convenience?
The womb rule: A child of B in the womb at A's death will share with C and D.
In the previous example, what result at common law if C or D predeceases A?
Their share goes to their devisees or their heirs.

*Note - NY statutory result will be taken up in Wills.
What is an executory interest?
A future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person ("shifting") or int the grantor or his heirs ("springing").
What is a shifting executory interest?
It always follows a defeasible fee and cuts short someone other than the grantor.
What is a springing executory interest?
It cuts short O, the grantor.
How does NY treat executory interests?
NY has abolished the distinction between executory interests and contingent remainders. Instead, contingent remainders AND executory interests are called "remainders subject to a condition precedent."
What is the Rule Against Perpetuities (RAP)?
Certain kinds of future interests aree void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.
What is the four-step technique for assessing potential RAP problems?
1) Determine which future interests have been created by the conveyance.

2) Identify the conditions precedent to the vesting of the suspect future interest.

3)Find a measuring life.

4) Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take? If so, the conveyance is good. If not, the future interest is void.
To what types of future interests does the RAP potentially apply?
ONLY to:
1)Contingent remainders,
2)Executory interests, and
3)Certain vested remainders subject to open.
To what types of future interests does the RAP NOT apply?
1) Any future interest created in O, the grantor,
2) Indefeasibly vested remainders, or
3) Vested remainders subject to complete defeasance.
What are the bright line rules of common law RAP?
1) A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP

2) Many shifting executory interests violate the RAP. An exectory interest with no limit on the time within which it must vest violates the RAP.
What is the rule with respect to conditions precedent and classes?
To be valid, it must be shown that the condition precedent to every class member's taking will occur within the purpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class, the entire class gift is void. ("Bad as to one, bad as to all.")
What happens if, by striking a RAP violation from a purported conveyance, you render the conveyance no longer grammatically sound? E.g. "To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs."
Then the entire conditional clause is strken and, in the example, A would be left with a fee simple absolute and O with nothing.
What is the exception to the RAP?
The charity-to-charity exception. A gift from one charity to another does not violate the RAP.
What is the majority reform of the common law RAP?
The "wait and see" or "second look" doctrine.
What does the wait and see doctrine provide for?
The validity of any suspect future interest is determined on the basis of the facts as they now exist at the conclusion of our measuring life. Eliminates teh "what if" or "anything is possible" line of inquiry.
What is the Uniform Statutory Rule Against Perpetuities (USRAP)?
Codifies the common law RAP and, in addition, provides for an alternative 90-year vesting period.
What is the cy pres doctrine?
"As near as possible" If a given disposition violates the rule, a court may reform it in a way that most closely matches the grantor's intent, while still complying with the RAP.
What do both the wait and see and USRAP reforms embrace?
1) The cy pres doctrine and
2) The reduction of any offensive age contingency to 21 years.
What is the NY position on RAP?
NY applies the common law rule against perpetuities and has rejected wait and see and cy pres, except for charitable trusts and powers of appointment (see Trusts)
What is the fertile octogenarian rule?
Every living person is presumed to be capable of bearing a child regardless of age.
What points must be known about the NY Perpetuities Reform Statute?
1) Where an interest would be invalid because it is made to depend on any person's having to attain an age in excess of 21 years, the age contingency is reduced to 21 years.

2) The common law fertile octogenarian principle is modified. NY statute presumes that a woman over the age of 55 cannot have a child. The possibility that the person may havee a child by adoption or some other technology is disregarded.

3) The rule against suspension of the absolute power of alienation applies the common law RAP to restrictions on the power to sell or transfer. Thus, an interest is void if it suspends the power to sell or transfer for a period longer than lives in being plus 21 years.
What are the possible forms of concurrent ownership?
1) The joint tenancy
2) The tenancy by the entirety
3) The tenancy in common
What is the definition of a joint tenancy?
Two or more own with the right of survivorship.
What is the definition of a tenancy by the entirety?
A protected marital interest between H and W with the right of survivorship.
What is the definition of the tenancy in common?
Two or more own with no right of survivorship.
What does the right of survivorship mean?
When one tenant dies, his share passes automatically to the surviving tenant.
What are the distinguishing characteristics of the joint tenancy?
1) The right of survivorship and
2) A joint tenant's interest is alienable (can sell it or give it away during your lifetime), but is NOT devisable or descendable because of the right of survivorship.
What is required for the creation of a joint tenancy?
1) The four unities;
2) Grantor must clearly express the right of survivorship;
3) Use of a straw
What are the four unities?
T-TIP

T - at the same Time
T - by the same Title, meaning the same instrument
I - with Identical equal interests; and
P - with identical rights to Possess the whole.
What is required to create a joint tenancy in NY?
All above except the straw. NY has, by statute, dispensed with the need for a straw, meaning that a current holder of land may convey directly to himself and another as joint tenants.
How may a joint tenancy be severed?
SPAM

S - Sale,

PA - Partition, AND

M - Mortgage
What rules apply to sale of an interest in a joint tenancy by one of the joint tenants?
1) A joint tenant can sell or transfer her interest during her lifetime.

2)In equity, a joint tenant's mere act of entering into a contract for the sale of her share will sever the joint tenancy as to that contracting party's interest.
May a joint tenant sell or transfer her interest secretly?
Yes. Even without the other's knowledge or consent.
What is the effect of a sale by one joint tenant?
One joint tenant's sale severs the joint tenancy as to the seller's interest because it dusrupts the four unities.
What status does the buyer of an interest in a joint tenancy have?
He is a tenant in common.
What result if the joint tenancy existed between more than two joint tenants before the sale?
The joint tenancy remains intact as between the other, non-transferring joint tenants, and the buyer is a tenant in common with the remaining original joint tenants.
What is the doctrine of equitable conversion?
Provides that equity regards as done that which ought to be done.
What variations of partition exist?
1) By voluntary agreement (allowable, peaceful way to end the relationship)
2) Partition in kind (judicial action for physical division of the property, if in teh best interests of all parties)
3) Forced sale (judicial action, if in the best interests of all parties, where land is sold and sale proceeds divided up proportionately).
What is the majority rule with respect to mortgage and severance of joint tenancies?
Lien Theory of Mortgages:

A joint tenant's execution of a mortgage on his or her interest will NOT sever the joint tenancy.
What is the minority rule with respect to mortgage and severance of joint tenancies?
Title Theory of Mortgages:

A join tenant's execution of a mortgage or a lien on his share will sever the joint tenancy as to that now encumbered share.
What rule does NY follow with respect to mortgage and severance of joint tenancies?
Lien Theory of Mortgages

(Majority rule)
Does NY recognize the tenancy by the entirety?
Yes.
How is a tenancy by the entirety created?
Can only be created in H and W, who share the right of survivorship. In those states to recognize the tenancy by the entirety, it arises presumptively - in any conveyance to H and W, unless clearly stated otherwise.
What is the general rule with respect to creditors and the tenancy of the entirety?
Can't touch this --

Creditors of only one spouse cannot touch the tenancy.
What is the rule in NY with respect to creditors and the tenancy of the entirety?
One spouse may mortgage his interest and his creditors may enforce against that interest, but only as to the debtor spouse's share. And, the non-debtor spouse's rights, including the right of survivorship, must not be compromised.
What is the rule with respect to unilateral conveyance and the tenancy of the entirety?
Neither tenant, acting alone, can defeat the right of survivorship by a unilateral conveyance to a third party.
What are the features of hte tenancy in common?
1) Each co-tenant owns an individaul part and each has a right to possess the whole.

2) Each interest is descendable, devisible, and alienable. There are no survivorship rights between tenants in common.

3) The presumption favors the tenancy in common.
What is wrongful ouster?
When one co-tenant wrongfully excludes another co-tenant from possession of the whole or any part.
What is the rule with respect to rent from a co-tenant in exclusive possession?
Absent ouster, a co-tenant in exclusive possession is not liable to others for rent
What is the rule with respect to rent from third parties?
A co-tenant who leases all or part of hte premises to a third party must account to his co-tenants providing them their fair share of hte rental income (prportionally).
May a co-tenant in exclusive possession acquire title to the whole through adverse possession?
Unless he has ousted the other co-tenants, one co-tenant in exclusive possession for the statutory adverse possession period cannot acquire title to the exclusion of the others becuase the hostility element of adverse possession is absent. There is no hostility if there is no ouster.
May a co-tenant in exclusive possession acquire title to the whole through adverse possession in NY?
Recent Court of Appeals decision has held that a cotenant may acquire full title by adverse possession if he's in exclusive possession for twenty continuous years. NY has advanced a theory of implied ouster.
What carrying costs are co-tenants responsible for?
Each co-tenant is responsbile for his fair share of carrying costs (such as taxes and mortgage interest payments) based upon the undivided share that he holds.
What is the rule with resepct to repairing co-tenants?
The repairing co-tenant enjoys a right to contribution for necessary repairs, provided that she has notified the others of the need for the repairs. The contribution is proportionally based on each co-tenant's share of the property.
What are the rules with respect to improvements by co-tenants?
1) During the life of the co-tenancy, there is no right to contribution for "improvements."
2) At partition, the improving co-tenant is entitled to a credit, equal to any increase in value caused by her efforts.
3) At partition, the so-called "improver" bears full liability for any decrease in value caused by her efforts.
What are the rules with respect to waste?
1) A co-tenant must not commit waste.
2)A co-tenant can bring an action for waste during the life of the co-tenancy.
What is the rule of partition?
A joint tenant or tenant in common has a right to bring an action for partition.
What are the types of leasehold or nonfreehold estates?
1) The tenancy for years (aka Estate for years or Term of years)
2) The periodic tenancy
3)The tenancy at will
4) The tenancy at sufferance
What are the distinguishing features of a tenancy for years?
1) A lease for a fixed, determined period of time (if you know the termination date from the start, its a tenancy of years)
2) Because a term of years states from the outset when it will terminate, no notice is needed to terminate,
3) A term of years greater than one year must be in writing to be enforceable because of hte statute of frauds.
What is a periodic tenancy?
A lease which continues for successive intervals until landlord or tenant give proper notice and terminate.
How can a periodic tenancy be created?
1) Expressly (i.e., "To T from month to month OR year to year OR week to week.")
2) By implication
How may a periodic tenancy arise by implication?
One of three ways:
1) Land is leased with no mention of duration, but provision is made for the payment of rent at set intervals;
2) An oral term of years in violation of the statute of frauds creates an implied periodic tenancy, measured by the way rent is tendered.
3) The holdover: In a residential lease, if L elects to holdover a T who has wrongfully stayed on past the conclusion of the original lease, an implied periodic tenancy arises, measured by the way rent is now tendered.
What is the rule with respect to holdover tenants in NY?
In NY, the landlord who elects to holdover a tenant creates an implied month-to-month periodic tenancy, unless otherwise agreed.
How can a periodic tenancy be terminated?
Notice - usually written - must be given.
How much notice is required?
At common law, at least equal to the length of the period itself, unless otherwise agreed.
What is the excpetion to the general notice rule?
If the tenancy is from year to year or greater, only six months notice is required.
What other limitations apply to the general notice rule?
1) By private agreement, the parties may lengthen or shorten the common law prescribed notice provisions
2) The periodic tenancy must end at the conclusion of a natural lease period.
What is the tenancy at will?
A tenancy for no fixed period of duration.
How is a tenancy at will formed?
The parties must expressly agree to a tenancy at will. Otherwise, the payment of regular rent will cause a court to treat the tenancy as an implied periodic tenancy.
How may a tenancy at will be terminated?
The tenancy at will may be terminated by either party at any time; however, a reasonable demand to vacate is typically required.
How may a tenancy at will be terminated by a landlord in NY?
In NY, the landlord terminating a tenancy at will must give a minimum of 30 days written notice of termination.
How is the tenancy at sufferance created?
It is created when T has wrongfully held over, past the expiration of the lease. We give this wrongdoer a leasehold estate - the tenancy at sufferance - to permit L to recover rent.
How long does a tenancy at sufferance last?
Only until L either evicts T or elects to hold T to a new term.
What is the rule with respect to holdover tenants in NY?
In NY, the landlord's acceptance of rent subsequent to the expiration of the term wll create an implied month-to-month periodic tenancy, unless otherwise agreed.
What is T's liability to third parties?
1) T is responsible for keeping the premises in reasonably good repair.

2) T is liable for injuries sustained by third parties T invited, even where L has expressly promised to make all repairs. (Of course, T may seek indemnification from L, but vis-a-vis the plaintiff, T is liable)
What is T's duty to repair whwen the lease is silent?
1) The standard is maintenance, meaning T must maintain the premises and make ordinary repairs

2) T must not commit waste

3) T is subject to the law of fixtures.
What types of waste must T not commit?
1) Voluntary
2) Permissive
3) Ameliorative
With what doctrine is the law of fixtures often intertwined?
The waste doctrine
What is the result of a tenant removing a fixture?
He has committed voluntary waste.
What is a fixture?
A once movable chattel that, by virtue of its annexation to realty OBJECTIVELY shows the intent to permanently improve the realty.
What are common examples of fixtures?
1) Heating systems
2) Custom made storm windows
3) Certain lighting installations.
By what rule is T governed with respect to fixtures?
T must not remove a fixture, no matter that she installed it.
How can you tell when a tenant installation qualifies as a fixture?
1) Express agreement controls - agreement between L and T on the issue is binding

2) In the absence of agreement, T may remove a chattel that she has installed so long as removal doesn't cause substantial harm to the premises. If remomval will cause substantial damage, then in objective judgment, T has shown the intent to install a fixture and the fixure must stay put.
What is T's duty to repair when T has expressly covenanted in hte lease to maintain the property in good condition for the duration of the lease?
1) At common law, historically, T was responsible for any loss to the property, including loss attributable to force of nature.
2) Today, the majority view is that T may terminate the lease if the premises are destroyed without T's fault.
What is the rule in NY with respect to destruction of property subject to a leasehold?
In NY, absent tenant's express undertaking to restore the premises in the event of their destruction, if the premises are destroyed through no fault of tenant, tenant may quit the premises and surrender possession without any further duty to pay rent.
What are the landlord's options if T breaches his duty to pay rent and is in possession of the premises?
L's only options are to:
1) evict through the courts or
2) continue the relationship and sue for rent due.
If L moves to evict, she is nonetheless entitled to rent from teh tenant until the tenant, who is now a tenant at sufferance, vacates.
What may L not do in case of T's breach of duty to pay rent?
L must not engage in self help, such as changing the locks, forcibly removing the tenant, or removing any of hte tenant's possessions.
What is the remedy where L engages in self-help in NY?
Treble damages.
What are L's options where T breaches the duty to pay rent but is out of possession?
SIR
S - L can choose to treat T's abandonment as an implicit offer of Surrender, which L accepts

I - L may Ignore the abandonment and hold T responsible for the unpaid rent, just as if T were still there. *This option is available only in a minority of states.

R - L may Re-let the premises on the wrongdoer tenant's behalf, and hold him or her liable for any deficiency. *This is the majority rule and a mitigation principle.
What is surrender?
T demonstrates by words or actions that she wishes to give up the leasehold.
What additional rules apply to surrender?
If the unexpired term is greater than one year, surrender must be in writing to satisfy the statute of frauds.
What is the rule in NY with respect to mitigation of damages by L?
Generally, NY does not require L to mitigate damages when tenant abandons the premises.
What are L's duties?
1) Duty to deliver possession
2) The implied covenant of quiet enjoyment
3) The implied warranty of habitability
What is the majority rule with respect to L's duty to deliver possession?
The majority (or English or Anglo-Saxon) rule requires that L put T in actual physical possession of the premises. Thus, if at the start of T's lease a prior holdover T is still in possession, L is in breach and the new T is entiteld to damages.
What is the minority rule with respect to L's duty to deliver possession?
The American rule, which is the tiny minority view, does not require that L put T in actual physical possession. The American rule requires only that L give T legal possession.
What is the implied covenant of quiet enjoyment and to what types of leases does it apply?
T has a right to quiet use and enjoyment of the premises without interference from L. Applies to both residential and commercial leases.
How may L breach the implied covenant of quiet enjoyment?
1) By actual wrongful eviction;

2) By constructive eviction.
When does actual wrongful eviction occur?
When L wrongfully evicts T or excludes T from the premises.
What are the elements of constructive eviction?
SING

SI - Substantial Interference attributable to L's actions or failure to act. (*On exam, look for a chronic problem - doesn't have to be permanent, but has to be chronic)

N - T must give L Notice of the problem and L must fail to respond meaningfully.

G - Goodbye or Get out. T must vacate within a reasonable time after L fails to correct the problem. (Can't let tenant have it both ways)
Is the landlord liable for the acts of other tenants?
The general rule is no, but there are two exceptions:
1)L has a duty not to permit a nuisance on the premises (e.g. rent apartment above you to Riverdance)
2) L must control common areas.
What is the standard for the implied warranty of habiltability and to what types of leases does it apply?
The standard is that the premises must be fit for basic, human habitation, meaning bare living requirements must be met. The appropriate standard may be supplied by local housing code or independent judicial conclusion. The warranty applies only to residential leases.
May the implied warranty of habiltability be waived?
No. Any attempt to disclaim is invalid.
What sorts of problems will trigger a breach of the implied warranty of habitability?
1) Failure to provide heat in winter
2) Lack of plumbing
3) Lack of running water
What are T's entitlements when the implied warranty of habitability is breached?
MR^3

M - Move out and terminate the lease

R - Repair and deduct, allowable by statute in a growing number of jurisdictions - T may make the reasonable repairs and deduct their cost from future rent.

R - Reduce rent or withhold all rent until the court determines fair rental value. Typically, T must place withheld rent into an escrow account to show her good faith.

R - Remain in possession, pay rent and affirmatively seek money damages.
What is the key analytical distinction between the implied covenant of quiet enjoyment and the implied warranty of habitability?
To plead constructive eviction successfully, T has to get out. But under implied warranty of habitability, T does not have to move out.
What is the rule of retaliatory eviction?
If T lawfully reports L for housing code violations, L is barred from penalizing T by, for example, raising the rent, ending the lease, harassing T, or taking any other retaliatory measures.
What is the rule with respect to assignments and subleases?
In the absence of some prohibition in the lease, a T may freely assign or sublet.
What is the difference between an assignment and a sublease?
Where T transfers his interest in whole, he accomplishes an assignment; where he transfers his interest in part, he accomplishes a sublease.
What types of restrictions on assigning and subletting may be applied?
In the lease, L can prohibit T from assigning or subletting without L's prior written approval.
However, once L conssents to one transfer by T, L waives the right to object to future transfers by that T, unless L expressly reserves the right.
What is the rule with respect to subletting and assignment in NY?
In NY, unless the lease provides otherwise, a residential T may not assign without L's written consent. L can unreasonably withhold consent to assign, and T's sole remedy is to seek release from the lease. By contrast, in NY, a T in a residential building having four or more units has the right to sublease subject to L's written consent. Consent to sublease cannot be unreasonably withhled. Unreasonably withheld consent is deemed consent.
Where T1 assigns his interest to T2, what is the relationship between L and T2?
They are in privity of estate, but they are NOT in privity of contract, unless T2 expressly assumed all promises in the original lease.
What does it mean to be in privity of estate?
L and T2 are liable to each other for all of the covenants in the original lease that "run with the land."
What are common examples of covenants in the lease which run with the land?
Promise to
1) pay rent, or
2) paint the premises,
3) repair
*Most of the promises, if not all of the promises in the orignal lease will run with the land.
What is the relationship between L and T1 after T1 assigns his lease to T2?
L and T1 are no longer in privity of estate, but remain in privity of contract.
What does it mean that L and T1 remain in privity of contract, but not in privity of estate?
They are secondarily liable to each other.
What is the relationship between L and a sublessee?
L and a sublessee are neither in privity of estate nor in privity of contract, meaning they share no nexus. So, if all you have is a sublease, T2 is responsible to T1 and vice versa.
What is the general rule with respect to L's tort liability?
The common law of caveat lessee is let tenant beware, meaning that in tort, L was under no duty to make the premises safe.
What are the most important exceptions to the common law rule?
CLAPS
C - Common areas: L must maintain all common areas like hallways and stairwells

L - Latent defects rule: L must warn T of hidden defects of which L has knowledge or reason to know. *NOte - only duty to warn, not a duty to make accompanying repairs.

A - Assumption of repairs: while under no duty to make repairs, once undertaken, L must complete them with reasonable care. If L, as a volunteer, makes the repairs negligently, L is liable.

P - Public use rule: L who leases public space (such as a convention hall or museum) and who should know, because of hte nature of the defect and the length of hte lease, that T will not repair is liable for any defects on the premises

S - Short term lease of furnished dwelling: L is responsible for any defective condition which proximately injures T.
What does the term servitudes mean?
It's a generic term, referring to a family of non-possessory property interests.
How can an affirmative easement be created?
PING

1) P - Prescritpion (use that is continuous, open and notorious, actual, under a claim of right that is hostile for request statutory period)

2) I - Implication (implied from prior use; at time land is severed, a use of one part existed from which it can be inferred that an easement permitting its continuation was intended).

3) N - Necessity (division of a deprives one lot of means of access out)

4) G - Grant (writing signed by grantor)
What parties are bound by an affirmative easement?
An easement appurtenant is transferred automatically with the dominant tenement.

An easement in gross for commercial purposes is assignable.
What is the remedy for violation of an affirmative easement?
Injunction or damages.
What types of things are the subject of negative easements?
LASS
1) L - Light
2) A - Air
3) S - Support and
4) S - Streamwater
How can a negative easement be created?
Only by writing signed by the grantor.
What is the remedy for violation of a negative easement?
Injunction or damages
How may a real covenant be created?
By a writing signed by grantor.
To what parties will the burdene of the promise of a real covenant run?
Successor of burdend lot if WITHN requirements are satisfied:

1) W - Writing,
2) I - Intent,
3) T - Touch and concern,
4) H - Horizontal and vertical privity, and
5) N - Notice
To what parties will the benefit of a promise run?
Successor of benefitied lot if WITV requirements are satisfied:
1) W - Writing,
2) I - Intent,
3) T - Touch and concern, and
4) V - Vertical privity
What is the remedy for violation of a real covenant?
Damages.
How can an equitable servitude be created?
By a writing signed by grantor (unless implied by General Scheme Doctrine)
When will successors be bound by an equitable servitude?
When WITN satisfied:

1) W - Writing,
2) I - Intent,
3) T - Touch and concern,and
4) N - Notice
(privity not required)
What is the remedy where an equitable servitude is violated?
Injunction
How are reciprocal negative servitudes created under the majority rule?
Majority Rule:
In a subdivision, residential restriction contained in prior deeds conveyed by a common grantor will bind subsequent grantees whose deeds do NOT contain the restriction IF: at the start of subdividing, 1) grantor had common scheme and 2) unrestricted lot holders had notice.
What is the minority rule with respect to reciprocal negative servitudes?
Under the minority rule, subsequent grantees will not be bound unless their lots are expressly restricted in writing.
Who is bound by a reciprocal negative servitude?
Where a common scheme exists, subsequent purchasers with notice are bound.
What is the remedy for violation of a reciprocal negative servitude?
Injunction.
What is an easement?
The grant of a nonpossessory property interest that entitles its holder to some form of use or enjoyment of another's land, called teh servient tenament.
What are common examples of easements?
1) The privilege to lay utility lines on another's land;
2) The easement giving its holder the right of access across a tract of land.
Are most easements affirmative or negative?
Affirmative.
What is an affirmative easement?
The right to go onto and do something on servient land.
What is a negative easement?
It entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible.
What categories of negative easements are generally recognized?
LASS - Light, Air, Support, Stream water from an artificial flow.
What additional category is recognized in a minority of states?
Scenic view.
Can there ever be a natural or automatic right to a negative easement?
No. Can ONLY be created expressly by writing signed by grantor.
What is an easement appurtenant?
An easement that benefits its holder in his physical use or enjoyment of his property.
How will you konw when you've got an easement appurtenant?
"It takes two." Two parcels of land must be involved in order for there to be an easement appurtenant: 1) the dominant tenement, which derives the benefit, and 2) the servient tenement, which bears the burden.
What is an easement in gross?
An easement that confers upon its holder only some personal or pecuniary advantage that is not related to his use or enjoyment of his land. Here, servient land is burdened, but there is no benefited or dominant tenement.
What are common examples of an easement in gross?
1) The right to place a billboard on another's lot;
2) The right to swim in another's pond;
3) The utility company's right to lay power lines on another's land.
Why is it important to distinguish between appurtenant easements and easements in gross?
Because of the transferability of the easements.
What is the transferability of the appurtenant easement?
It passes automatically with teh dominant tenement, regardless of whether it is even mentioned in the conveyance.
When does the burden of an easement appurtenant on the servient land pass?
It also passes automatically with the servient estate, UNLESS teh new owner is a bona fide purchaser without notice of the easement.
What is the transferability of an easement in gross?
It is not transferable unless it is for commercial purposes.
What are the requirements for the creation of an easement by grant?
An easement to endure for more than one year must be in a writing that complies with the formal elements of a deed because of hte statute of frauds.
What is the writing to evidence the easement called?
A deed of easement.
When may the creation of an easement be implied?
Court may imply an easement where the holder of two lots has split and sold one if:
1) The previous use had been apparent and
2) The parties expected that the use would survive division because it is reasonably necessary to the dominant land's use and enjoyment.
When will an easement be implied by necessity?
The landlocked setting: An easement of right of way will be implied by necessity if the grantor conveys a portion of his land with no way out except over some part of grantor's remaining land.
How is an easement by prescription created?
By satisfying the elements of adverse possession: COAH:

1) C - Continuous use for the given statutory period;
2) O - Open and notorious use;
3) A - Actual use; and
4) H - Hostile use, meaning without the servient owner's consent. *Note: permission defeats the acquisition of an easement by prescription.
What is the appropriate statutory period for an easement by prescription in NY?
10 years.
What determines the scope of an easement?
The terms of the grant or the conditions that created it.
Is unilateral expansion of the use of an easement permitted?
No.
How may an easement be terminated?
END CRAMP
1) E - Estoppel
2) N - Necessity
3) D - Destruction of servient land, other than through the willful conduct of the servient owner
4) C - Condemnation of the servient estate by eminent domain
5) R- Release, meaning a written relase, given by the easement holder to the servient owner
6) A - Abandonment
7) M - Merger doctrine (or unity of ownership)
8) P - Prescription.
When is an easement terminated by estoppel?
When the servient owner materially changes his position in reasonable reliance on the easement holder's assurances that the easement will no longer be enforced.
What is the rule with respect to termination of an easement by necessity?
Easements created by necessity expire as soon as the necessity ends. However, if the easement, attributable to necessity, was nonetheless created by express grant, it does not end automatically once the necessity ends.
What is the rule with respect to termination of an easement by abandonment?
The easement holder must demonstrate by physical action the intent to never use the easement again.
*Note: mere nonuse, or mere words, are insufficient to terminate by abandonment.
What is the merger doctrine?
The easement is extinguished when title to the easement and title to the servient land become vested in the same person.
If the owner of the merged land later sells the parcel over which she once enjoyed a right of way, is the easement reinstated?
Not automatically. To create it, the owner of the dominant tenement would have to start from scratch.
What is the rule of termination of an easement by prescription?
The servient owner may extinguish the easement by interfering with it in accordance with the elements of adverse possession.
What is a license?
A mere privilege to enter another's land for some delineated purpose.
Are licenses subject to the statute of frauds?
No. You do not need a writing to create a license.
How may a license be terminated?
Licenses are freely revocable at the will of the licensor, unless estoppel applies to bar revocation.
What is the classic license case?
Tickets and neighbors talking by the fence (i.e., one neighbor purports to orally grant another neighbor an easement across his property, but oral easements violate the statute of frauds and are thus unenforceable; the grant instead creates a freely revocable license).
When will estoppel apply to bar revocation of a license?
Only when the licensee has invested substantial money or labor or both in reasonable reliance on the license's continuation.
What is a profit?
The profit entitles its holder to enter the servient land and take from it: the soil or some substance of the soil, such as minerals, timber, oil. (E.g., Moses can extract minerals from land of Mt. Sinai because he's a profit)
What rules apply to profits?
All of the rules of easements.
What is a covenant?
The covenant is a promise to do or not do something related to land.
What is the difference between a covenant and an easement?
A covenant is UNLIKE the easement because it is not the grant of a property interest, but rather a contractual limitation or promise regarding land.
What typse of covenants are possible?
Negative (restrictive) or affirmative
What is a restrictive (negative) covenant?
A promise to refrain from doing somethign related to land. E.g. I promise not to build for commercial purposes on my land.
What is an afirmative covenant?
The affirmative covenant is a promise to do something related to land. E.g., I promise to maintain our common fence.
How can you tell whether to construe a given promise as a covenant or as an equitable servitude?
On the basis of the remedy that your P seeks. If P seeks money damages, you must construe as a covenant. If P seeks an injunction, you must construe as an equitable servitude.
Where both the burdened parcel and the benefitted parcel have been transferred to subsequent owners, how can you tell if the covenant between the original owners is capable of binding the successors?
1) First, ask whether the burden of the promise runs from the original owner to the successive owner (A - A1) *Note: always analyze the burden side first b/c it is harder for the burden to run than for the benefit to run.
2) Then, ask whether the benefit of the promise runs from the original promissee to hsi successor (B - B1)? (This is really asking whether B has standing to make the claim).
How can you tell if the burden runs?
WITHN
1) W - Writing (original promise in writing)
2) I - Intent (original parties intended that the covenant would run)
3) T - Touch and concern the land
4) H - Horizontal and vertical privity (both needed for burden to run)
5) N - Notice (A-1 must have had some notice of the promise when he took)
How do courts construe the intent requirement?
Courts are generous in finding the requisite intent.
How can you tell if a promise "touches and concerns the land"
The promise must affect the parties' legal relations AS LANDOWNERS, and not simply as members of the community at large.
What types of covenants do touch and concern the land?
Covenants to pay money to be used in connection with the land (such as homeowners' association fees) and covenants not to compete.
What is horizontal privity?
The nexus between the original promising parties (A and B)
What is required to demonstrate horizontal privity?
That A and B be in succession of estate, meaning that they were in a grantor/grantee or landlord/tenant or mortgagor/mortgagee relationship.
*Note: this is difficult to establsih, and thus horizontal privity is difficult to establish - its absence is the reason why many burdens won't run. It's unusual for covenanting parties, at time the promise was extracted, to have existed in one of the three types of relationships with one another. So, on exam, 9 times out of 10, the answer to the question is that the covenant will not run because of the absence of horizontal privity.
What is vertical privity?
Refers to the nexus between A and A-1. It simply requires some non-hostile nexus, such as contract, devise, or descent.
When will vertical privity be absent?
The only time that it will be absent is if A-1 acquired her interest through adverse possession.
How do you determine whether the benefit of A's promise to B rus from B to B-1?
WITV
1) W - Writing (original promise was in writing)
2) I - Intent (original parties intended that benefit would run)
3) T - Touch and Concern (promise affects parties as landowners)
4) Vertical Privity (some non-hostile nexus between B and B-1)
*Note: Horizontal privity is not required for benefit to run, which is why it's easier for the benefit side to run than for the burden side to run.
What is an equitable servitude?
A promise that equity will enforce against successors.
What is the remedy for violation of an equitable servitude?
Injunctive relief.
How can you create an equitable servitude that will bind successors?
WITNES

1) W - Writing (generally, but not always, original promise was in writing)
2) I - Intent (original parties intended that promise would be enforceable by and against assignees)
3) T - Touch and Concern (promise affects parties as land-owners)
4) Notice - Assicness of the burdened land had notice of the promise.
*Note: Privity is NOT required to bind successors.
What is the common scheme doctrine?
The court will imply a reciprocal negative servitude (just means an implied equitable servitude) to hold the unrestricted lot holder to a restrictive covenant if two elements are met:
1) When the sales began, the subdivider (A) had a general scheme of residential development which included D's lot; and
2) The defendant lotholder (B) had notice of hte promise contained in the prior deeds.
What forms of notice are potentially imputed to defendant?
AIR
1) A - Actual notice
2) I - Inquiry notice
3) R - Record notice
What is required to show actual notice?
D had literal knowledge of the promises in the prior deeds?
What is required to show inquiry notice?
The neighborhood seems to conform to common restrictions. Sometimes referred to as "the lay of the land."
What is record notice?
The form of notice sometimes imputed to buyers on the basis of the publicly recorded documents.
What is the rule with respect to record notice?
The courts are split.

Some course take the view that a subsequent buyer is on record notice of the contents of prior deeds transferred to others by a common grantor.

Others take the better view that the subsequent buyer does NOT have record notice of hte contents of those prior deeds transferred to others by the common grantor.
What is the rule in NY with respect to record notice?
NY takes the latter, better view. In NY, the subsequent buyer is NOT on record notice of the contents of the prior deeds transferred to others by the common grantor. This view imposes less of a burden on the D and the D's title.
What equitable defenses are available to enforcement of an equitable servitude?
Changed conditions: The changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the entire area or subdivision has changed.
What will never suffice to establish changed conditions?
Merely limited or piecemeal change is never adequate to terminate under the rubric of changed conditions.
What is adverse possession?
Possession, for a statutorily prescribed period of time can, if certain elements are met, ripen into title.
What are the elements of adverse possession?
COAH
1) C - Continuous use, meaning uninterrupted for the given statutory period.
2) O - Open and notorious use, meaning the sort of possession that the usual owner would make under the circumstances.
3) A - Actual use, meaning the entry cannot be hypothetical or fictitious.
4) H - Hostile, meaning the possessor does not have the true owner's consent to be there.
What is the possessor's requisite state of mind?
The possessor's subjective state of mind is irrelevant.
What is the rule with respect to tacking?
One adverse possessor may tack onto his time with the land his predecessor's time, so long as there is privity.
How is privity satisfied?
By any non-hostile nexus, such as blood, K, deed, will. Privity is liberally construed.
When is tacking not allowed?
When there has been an ouster.
What is the statutory period for adverse possession in NY?
10 years.
Against whom will the statute of limitations for adverse possession not run?
Against a true owner who is afflicted by a disability at the inception of the adverse possession.
What counts as a disability?
1) Insanity
2) Infancy
3) Imprisonment.
May an owner claim the benefit of a disability if it arises after the adverse psossession has already begun?
No.
What is involved in the process of conveying real estate?
Step I - The land contract, which endures until Step II.

Step II - The closing, where the deed becomes our operative document.
What are the requirements of the land contract?
The land contract must:
1) be in writing,
2) be signed by your D (party against whom enforcement is sought)
3) Describe the land, and
4) State some consideration.
What is the remedy when one party enteres into a contract to purchase land and the contract recites that the size of the parcel of land is larger than it in fact is, as revealed by a subsequent survey?
The remedy is specific performance with a pro rata reduction in purchase price.
What is the exception to the statute of frauds as applied to land contracts?
The doctrine of part performance.
What is required to qualify for the exception?
If, on your facts, you havae two of the following three, the doctrine of part performance is satisfied and equity will decree specific performance of an oral contract for the sale of land:
1) B takes phyiscal possession of the land;
2) B pays all or part of the purchase price and/or
3) B makes substantial improvements to the land.
How do you allocate the risk of loss in a land contract situation?
Apply the doctrine of equitable conversion (equity regards as done that which ought to be done), such that in equity, once the contract is signed, B is the owner of the land, subject to the condition that he pay the purchase price at closing.
So, who bears the risk of loss if the land is destroyed through no fault of either party in the interim between contract and closing?
Buyer, unless the K says otherwise.
In NY, who bears the risk of loss if the land is destroyed through no fault of either party in the interim between contract and closing?
In NY, so long as buyer is without fault, the risk of loss remains with seller until buyer has title or takes possession.
What implied promises exist in every land contract?
1) Seller promoises to provide marketable title at the closing.
2) Seller promises not to make any false statements of material fact.
What is the standard for marketable title?
Marketable title is title free from reasonable doubt, meaning free from lawsuits and the threat of litigation.
What circumstances will render title unmarketable?
1) Adverse possession
2) Encumbrances
3) Zoning violations
What is the rule with respect to adverse possession and marketable title?
If even a PORTION of the title rests on adverse possession, it is unmarketable. Seller must be able to provide good record title.
What is the rule with respect to encumbrances and marketable title?
Marketable title means an unencumbered fee simple. Thus, servitudes and mortgages render title unmarketable, unless the buyer has waived them.
When must seller satisfy an outstanding mortgage or lien on a closing in order for title to be marketable?
Seller has the right to satisfy an outstanding mortgage or lien at the closing, with the proceeds of the sale. Thus, buyer cannot claim title is unmarketable because it is subject to a mortgage prior to closing, so long as the parties understand that the closing will result in the mortgage being satisfied or discharged.
What is the rule with respect to zoning violations and marketable title?
Title is unmarketable if the property violates a zoning ordinance. So, the mere existence of zoning ordinances is of no legal consequence - only if your property violates a zoning ordinance.
What is the rule with respect to false statements of material fact in the majority of states?
The majority of states now also hold sellers liable for failing to disclose latent, material defects.
What is the effect of a disclaimer such as "property sold as is," or "with all faults." in a land contract?
Disclaimer will not excuse seller from liability for fraud or failure to disclose.
What is the rule with respect to disclosure in NY?
The Property Condition Disclosure Act requires sellers of 1-4 family residential dwellings to give the prospective buyer a completed statutory disclosure form before the contract is even signed.
What is the rule with respect to implied warranties of fitness or habitability in land contracts?
The land contract contains no implied warranties of fitness or habitability. The common law norm is caveat emptor.
What is the exception to the common law caveat emptor rule?
The implied warranty of fitness and workmanlike construction applies to the sale of a new home by a builder-vendor.
Upon closing, what is the controlling document?
The deed.
How does the deed pass legal title from the seller to the buyer?
LEAD

1) L - Lawfully
2) E - Executed
A- And
3) D - Delivered
What is the standard for lawful execution of a deed?
The deed must be in writing, signed by the grantor.
What is the rule with respect to deeds and consideration?
The deed need not recite consideration, nor must consideration pass to make a deed valid.
What is the requirement with respect to the description of the land in the deed?
The description of the land does not have to be perfect. The standard requires only an unambiguous description and a good lead.
What does it mean to provide a good lead?
Means we can research and then discern what description in deed means.
What is the standard for delivery?
The standard for delivery is a legal standard, and is a test solely of PRESENT INTENT.
Must ask: Did the grantor have the PRESENT INTENT to be IMMEDIATELY BOUND, irrespective of whether or not the deed itself has been literally handed over.
How COULD the delivery requirement be satisfied?
It COULD be satisfied when grantor physically or manually transfers the deed to the grantee. It is permissible to use the mail, an agent, or a messenger. However, delivery does not necessarily require actual, physical transfer of the instrument itself.
What is the effect of recipient's rejection?
Recipient's express rejection of the deed defeats delivery.
What effect do oral conditions have on deeds?
If a deed, absolute on its face, is transferred to grantee with an oral condition, the oral condition drops out. It is not provable and delivery is deemed accomplished.
What is the rule with respect to delivery by escrow?
Delivery by escrow is permissible. Grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deed be delivered to grantee once certain conditions are met. Once the conditions are met, title passes automatically to grantee.
What is the advantage of escrow?
If grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met, title will still pass from escrow agent to grantee once the conditions are met.
What are the three types of deed?
1) The quitclaim
2) The general warranty deed
3) The statutory special warranty deed.
What is a quitclaim deed?
The worst deed buyer could hope for. It contains no covenants. Grantor does not even promise that he has title to convey.
What is the exception to the lack of covenants associated with the quitclaim deed?
The grantor implicitly promised in the land contract to provide marketable title at the closing. This will hem in the otherwise wholesale abdication of responsibility associated with the quitclaim deed.
What is the general warranty deed?
The best deed a buyer could hope for. The general warranty deed warrants against all defects in title, including those attributable to grantor's predecessors.
What covenants does the warranty deed typically contain?
1) The covenant of seisin
2) The covenant of right to convey
3)The covenant against encumbrances
4) The covenant for quiet enjoyment
5)The covenant of warranty
6) The covenant for further assurances
What are present covenants?
Covenants that are breached, if ever, at the time the deed is delivered.
When does the statute of limitations for breach of present covenant begin to run?
From the instant of delivery.
Which covenants contained in a general warranty deed are present covenants?
1) The covenant of seisin
2) The covenant of right to convey
3) The covenant against encumbrances
What are future covenants?
A future covenant is not breached, if ever, until grantee is disturbed in possession.
When does the statute of limitations for breach of a future covenant begin to run?
The future date on which the covenant is breached.
What covenants contained in a general warranty deed are future covenants?
1) The covenant for quiet enjoyment
2)The covenant of warranty
3) The covenant for further assurances.
What is the covenant of seisin?
Grantor warrants that he owns the estate he now claims to convey
**What is the covenant of right to convey?

**Most tested.
Grantor promises that he has the power to make this conveyance. In other words, there are no temporary restraints on grantor's power to sell.
What is the covenant against encumbrances?
Grantor promises that there are no servitudes ro mortgages on the land.
What is the covenant for quiet enjoyment?
Grantor promises that grantee will not be disturbed in possession by a third party's lawful claim of title (really communicating to grantee that he hasn't conveyed to multiple grantees).
What is the covenant of warranty?
Grantor promises to defend grantee should there be any lawful claims of title asserted by others.
What is the covenant for further assurances?
Grantor promises to perform whatever future acts are reasonably necessary to perfect grantee's title if it later turns out to be imperfect (more of an administrative/ministerial type of promise)
What is the statutory special warranty deed?
It exists by statutes in many states, and contains two promises that grantor makes ONLY on behalf of himself. Grantor makes NO repressentations on behalf of his predecessors in interest.
What promises are contained in the statutory special warranty deed?
1) Grantor promises that he hasn't conveyed this estate to anyone other than grantee; and
2) Grantor promises that the estate is free from encumbrances made by the grantor.
What is the special warranty deed called in NY?
A bargain and sale deed.
Where you have a double-dealing grantor (conveys to A, then conveys same parcel to B and skips town), what bright line rules apply to determine who gets title between A and B?
1) If B is a bona fide purchaser, and we are in a NOTICE jurisdiction, B wins, regardless of whether or not she records before A does.
2) If B is a bona fide purchaser and we are in a RACE-NOTICE jurisdiction, B wins IF she records properly before A does.
What type of jurisdiction is NY?
NY is a race-notice jurisdiction.
Who are recording acts intended to protect?
1) Bona fide purchasers and
2) Mortgagees
What is a bona fide purchaser?
A bona fide purchaser is one who:
1) purchases Blackacre FOR VALUE; and
2) without notice that someone else got there first.
In order to be a bona fide purchaser for value, must buyer pay fair market value?
No. As long as B remits substantial pecuniary consideration, he qualifies as a purchaser for value, even if the amount paid is substantially less than fair market value.
What types of persons are not protected by the recording statutes?
1) Donees
2) Heirs
3) Devisees
*Unless the shelter rule applies.
What types of notice may a buyer potentially be charged with?
AIR
1) A - Actual
2) I - Inquiry
3) R - Record
What is actual notice?
Prior to B's closing, B gets literal knowledge of A's existence.
What is inquiry notice?
A form of constructive notice, meaning that whether he bothers to look or not, B is charged with inquiry notice of whatever an examination of the land would reveal. Inquiry notice is telling us that the buyer of real estate has a duty to inspect the premises.
What is B on inquiry notice of, whether he looks or not?
The buyerr of real estate has a duty to inspect premises before transfer of title, to see, for example, whether anyone else is in possession. If another is in possession, inquiry notice of that fact, regardless of whether buyer actually bothered to inspect or not.
What is grantee on inquiry notice of if a recorded instrument makes reference to an unrecorded transaction?
Whatever a reasonable follow-up would have revealed.
What is record notice?
Another form of constructive notice. B is on record notice of A's deed if at the time B takes, A's deed was properly recorded within the chain of title.
What kind of statute is the following and what are its implications?
"A conveyance of interest in land shall not be valid against any subsequent purchaser for value without notice thereof, unless the conveyance is recorded."
Notice statute

If, at the time B takes, he is a BFP, he wins. It won't matter that A may ultimately record first, before B does. It won't matter, in the A vs. B contest, that B never records.
What type of statute is the following and what are its implications?

"Any conveyance of an interest in land shall not be valid agaisnt any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded."
Race notice statute (NY system)

To prevail. B must 1) Be a BFP, and 2) win the race to record.
What is the effect of A's proper recordation before B takes?
It places subsequent buyers on record notice, thereby defeating their status as BFPs
What is necessary to give record notice to subsequent takers?
To give record notice to subsequent takers, the deed must be recorded properly, within the chain of title, which refers to that sequence of recorded documents capable of giving record notice to subsequent takers.
How is the chain of title established?
In most states, the chain of title is established through a title search of the grantor/grantee index.
What are three discrete chain of title problems?
1) The Shelter Rule
2) The Problem of the Wild Deed
3)Estoppel by Deed
What is the shelter rule?
One who takes from a BFP will prevail agaisnt any entity that the transferor or BFP would have prevailed against. In other words, the transferee takes shelter in the status of her transferor, and thereby "steps into the shoes" of the BFP even thouhg she otherwise fails to meet the requirements of BFP status.
O conveys to A, who does not record. Later, O conveys to B, a BFP, who records. B then conveys to C, who is a mre donee or who has actual knowledge of the O to A transfer. In the contest f A vs. C, who prevails?
C wins, in both a notice and race-notice state, because of the shelter rule. C steps into the shoes of B, who was a BFP who recorded first. e
What is the rule of the wild deed?
If a deed, entered on the records, has a grantor unconnected to the chain of title, the deed is a wild deed. It is incapable of giving record notice of its existence.
O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed. O then sells Blackacre to C. Assume that C has no actual or inquiry knowledge of the O-to-A or A-to-B conveyance. C records. O skps town. In the contest of B vs. C, who prevails?
C wins, in both a notice and race-notice state.
C wins in a notice state because at the time C takes she is a BFP.
C wins in a race-notice state because she is a BFP who has won the race to record.
What is the rule of estoppel by deed?
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires the interest that he had previously transferred.
In 1950, O owns Blackacre. He is thinking about selling it to X, but for now decides against it. In 1950, X, who does not own Blackacre, sells it anyway, to A. A records. In 1960, O finally sells Blackacre to X. X records in 1960. In 1970, X, a double dealer, sells Blackacre to B. B records. As between X and A, who owned Blackacre from 1960-1960?
A did, because of the rule of estoppel by deed.
Who owns Blackacre in 1970?
B, as long as he is a BFP.

B wins in a notice system because he is a BFP.
B wins in a race-notice system because he is a BFP who wins the race to record. This is because A's 1950 recording is a nullity. A recorded too early. B's title searcher would not find A's deed because one is entitled to assume that no one sells land until they first own it. Thus, B's title searcher would not discover X's 1950 pre-ownership transfer to A. (Like another variation on the wild-deed theme)
What is a mortgage?
A mortgage is the conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a monetary obligation.
What elements are required for a mortgage?
1) A debt; and
2) A voluntary transfer of a security interest in debtor's land to secure the debt.
Who is the mortgagor and who is the mortgagee?
The debtor is the mortgagor.

The creditor is the mortgagee.
What are the requirements for a legal mortgage?
A legal mortgage typically must be in writing to satisfy the Statute of Frauds.
What terms may be used to refer to a legal mortgage?
1) the mortgage deed
2) the note
3) a security interest in land
4) a deed of trust
5) a sale-lease-back
What is an equitable mortgage?
Where a creditor (C) lends a sum of money to the owner of land (O) and the parties understand that the land is the collateral for the debt. But, instead of executing a note or mortgage deed, O hands C a deed to the land that is absolute on its face.
What may be used to establish the parties true intent in an equitable mortgage situation?
Parole evidence is admissible.
What happens if C proceeds to sell the land to a bona fide purchaser, X?
X owns the land. O's only recourse is to proceed against C for fraud and to recover the proceeds of the sale.
Once a mortgage has been created, what are the parties' rights?
Unless and until foreclosure, the debtor-mortgagor has title and the right to possession.

Creditor-mortgagee has a lien, meaning the right to look to the land if there is a default.
What is the rule with transfer of interests involving mortgages?
All parties to a mortgage can transfer their interests. The mortgage automatially follows a properly transferred note.
How may the creditor-mortgagee transfer his interest?
By:
1) Endorsing the note and delivering it to the transferee, or
2) Executing a separate document of assignment.
How can a transferree be eligible to become a holder in due course
If the note is endorsed and delivered.
What does it mean to be a holder in due course?
Means that transferee takes the note free of any personal defenses that could have been raised against the original mortgagee.
What are some personal defenses?
Include:
1) Lack of consideration
2) Fraud in the inducement
3) Unconscionability
4) Waiver
5) Estoppel
What is the implication of being a holder in due course?
The holder in due course may foreclose the mortgage despite the presence of any such personal defenses.
However, the holder in due course is still subject to "real" defenses that the maker might raise.
What are the real defenses?
MAD FIFI^4

1) MA - Material Alteration
2) D - Duress
3) FIF- Fraud in the Factum (a lie about the instrument)
4) I - Incapacity
5) I - Illegality
6) I - Infancy
7) I - Insolvency
What criteria must be met in order to be a holder in due course?
1) The note must be negotiable, made payable to the named mortgagee;
2) The original must be endorcsed, signed by the named mortgagee;
3) The original note must be delivered to the transferee. A photocopy is unacceptable;
4) The transferee must take the note in good faith without notice of any illegality; and
5)the transferee must pay value for the note, meaning some amount that is more than nominal.
If O, the debtor-mortgagor, sells the land which is now mortgaged, what is the result?
The lien remains on the land, so long as the mortgage instrument has been properly recorded.
What is the rule with respect to recording statutes and mortgages?
All recording statutes apply to mortgages as well as deeds. Thus, a subsequent buyer takes subject to a properly recorded lien.
What is the effect of the type of recording statute (i.e. Notice or Race-notice) the jurisdiction has on the protection of the mortgagee?
None. In a notice state, the buyer takes subject to the lien because the buyer is on record notice of the lien at the time buyer takes.
In a race-notice state, the buyer takes subject to the lien because buyer is on record notice and the bank wone the race to record.
What if the bank does not record its mortgage until after the sale of hte mortgaged property to one who had no knowledge of the lien, but before the buyer records? Then does the buyer take subject to the mortgage?
The outcome depends on what type of recording statute has been enacted.
In a race-notice jurisdiction, buyer loses because he lost the race to record.
In a notice jurisdiction, buyer wins so long as he was a BFP when he took. It doesn't matter that uyer loses the race to record. In a notice state, a subsequent BFP prevails over a prior grantee or mortgagee who has not yet recorded properly at the time the BFP takes.
Who is personally liable on the debt if O, the debtor-mortgagor, sells the mortgaged land to B?
If B has "assumed the mortgage," both O and B are personally liable. B is primarily liable nad O remainds secondarily liable.
If B takes "subject to the mortgage," B assumes no personal liability on the debt. Only O is personally liable. BUT, if recorded, the mortgage remains on the land. Thus, if O does not pay, the mortgage may be foreclosed.
Assuming that the morgagee-creditor must look to the land for satisfaction, how must he or she proceed?
The mortgagee must foreclose by proper judicial proceeding. At foreclosure, the land is sold. The sale proceeds go to satisfying the debt.
What happens if the proceeds from the sale of the mortgaged land are less than the amount owed?
The mortgagee can bring a personal action against the debtor for a deficiency judgment.
What if there is a surplus?
Junior liens are paid off in order of their priority and any remaining surplus goes to the debtor.
When a foreclosure sale occurs, what comes out of the proceeds off the top?
Attorney's fees, expenses of the foreclosure, and any accrued interest on the foreclosing mortgagee's mortgage.
What is the rule with respect to sale proceeds and multiple mortgagees?
The sale proceeds, after the off the top deductions are made, are used to pay off the mortgages in the order of their priority. Each claimant is entitled to satisfaction IN FULL BEFORE a subordinated lienholder may take. Any lienholder who is not satisfied in full should be able to proceed for a deficiency judgment.
What is the effect of foreclosure on various interests?
Foreclosure will terminate interests junior to the mortgage being foreclosed but will not affect senior interests. This means that junior lienholders will be paid in descending order with the proceeds from the sale, assuming funds are leftover after full satisfaction of superior claims. Junior lienholders should be able to proceed for a deficiency judgment. But, once foreclosure of a superior claim has occurred with the proceeds distributed appropriately, junior lienholders can no longer look to the land for satisfaction.
Who are necessary parties to the foreclosure action?
Those with interests subordinate to those of the foreclosing party and the debtor-mortgagor.
What is the result of failure to include a necessary party?
Failure to include a necessary party results in the preservation of that party's claim, despite the foreclosure and sale. Thus, if a necessary party is not joined, his mortgage will remain on the land.
What happens to interests senior to the mortgage being foreclosed?
Foreclosure does not affect any interest senior to the mortgage being foreclosed. The buyer at the sale takes subject to such interest. This means that buyer is NOT personally liable on that senior debt, but, as a practical matter, if the senior mortgage is not paid, sooner or later, the senior creditor will foreclose against the land.
How is the priority of creditors determined?
First, you must record. Until you have properly recorded your mortgage, you have NO priority.

Once recorded, priority is determined by the norm of first in time, first in right.
What is a purchase money mortgage?
A mortgage given to secure a loan that enables the debtor to acquire the encumbered land.
Where a security interest is granted in all of O's real estate holdings, "whether now owned or hereafter acquired" what is this clause called?
An after-acquired collateral clause. They are permissible and commonplace.
As between a purchase money mortagee who enables a debtor to buy a parcel of land, and a prior creditor who had an after-acquired collateral clause purporting to give it first priority in any of the debtor's subsequently purchased real estate, who has priority with respect to the land acquired from the proceeds of the purchase money mortgagee's loan?
The purchase money mortgagee.
What is a subordination agreement and is it permissible?
Subordination agreements are permissible, meaning that by private agreement, a senior creditor may agree to subordinate his priority to a junior creditor.
What is equitable redemption and when is it recognized?
Universally recognized up to the date of sale. At any time prior to teh foreclosure sale, the debtor has the right to redeem the land and free it of the mortgage.
When is the right to equitable redemption cut off?
Once a valid foreclosure has taken place.
How is the right of equitable redemption exercised?
By paying off the missed payments plus interests and costs.
What if the mortgage or note contained an acceleration clause?
An acceleration clause permits the mortgagee to declare the full balance due in the event of default. If te mortgage contains an acceleration clause, the full balance plus accrued interest plus costs must be paid to redeem.
May a debtor/mortgagor waive the right to redeem in the mortgage itself?
No. This is known as clogging the equity of redemption and it is prohibited.
What is statutory redemption?
Recognized in one-half the states, statutory redemption gives the debtor-mortgagor a statutory right to redeem for soem fixed period AFTER the foreclosure sale has occurred (typically six months to one year). Where recognized, statutory redemption applies ONLY AFTER foreclosure has occurred.
What amount must be paid where exercising a statutory right to redemption?
Usually the foreclosure sale price, rather than the amount of the original debt.
Where a state recognizes statutory redemption, what rights does the mortgagor have during the statutory period?
The right to possession of the land during the statutory period.
What is the effect when the mortgagor redeems?
The effect is to nullify the foreclosure sale. The redeeming owner is restored to title.
Is there a right to statutory redemption in NY?
No.
What type of liability is an excavator subject to where his excavation causes land to cave in?
If land is improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, the excavator will be liable only if he acted negligently.
Strict liability does not attach to the excavator's actions unless P shows that, because of D's actions, P's improved land would have collapsed, even in its natural state.
What are the two major systems for determining the allocation of water in watercourses, such as streams, rivers, and lakes?
1) The riparian doctrine
2) The prior appropriation doctrine.
What is the riparian doctrine?
The water belongs to those who own the land bordering the water course.
What are the people who own the land bordering a water course called and what rights do they have?
They are known as riparians and they share the right of reasoanble use of the water.
When is one riparian liable to another?
One riparian will be liable if his or her use unreasonably interferes with others' use.
What is the prior appropriation doctrine?
The water belongs initially to the state, but the right to divert it and use it can be acquired by an individual, regardless of whether or not he happens to be a riparian owner.
How are rights determined under the prior appropriation doctrine?
Rights are determined by priority of beneficial use.
What is the norm for allocation?
First in tiem, first in right. Thus, a person can acquire the right to divert and use water from a watercourse merely by being the first to do so. Any productive or beneficial use of the water, incuding use for agriculture, is sufficient to create the appropriation right.
What is groundwater?
Also known as percolating water, it is water beneath the surface of the earth that is not confined to a known channel.
What are the rights associated with groundwater?
The surface owner is entitled to make reasonable use of groundwater. However, the use must NOT be wasteful.
What are surface waters and what is the rule with respect to them?
Surface waters are those which come from rain, springs, or melting snow, and which have not yet reached a natural watercourse or basin.
The common enemy rule applies. Surface water is considered a common enemy; a nemesis.
What does the common enemy rule imply?
A landowner may change drainage or make any other changes/improvements on his land to combat the flow of surface water. Many courts have modified the common enemy rule to prohibit unnecessary harm to others' land.
What rights does a possessor of land have?
The right to be free from trespass and nuisance.
What is trespass?
The invasion of land by a tangible, physical object.
How do you remove a trespasser?
Bring an action for ejectment.
What is private nuisance?
The substantial and unreasonable interference with another's use and enjoyment of land.
What types of things can constitute nuisance?
Unlike trespass, nuisance does NOT require tangible, physical invasion. Thus, odors and noise could give rise to a nuissance, but not a trespass.
When will nuisance not be found?
No nuisance if the problem is the result of P's supersensitivity or specialized use.
What is eminent domain?
The government's 5th Amendment power to take private property for public use in exchange for just compensation.
What are explicit takings?
Acts of governmental condemnation.
What are implicit or regulatory takings?
A governmental regulation that, although not intended to be a taking, has the same effect.
What must P show to demonstrate that a regulatory taking has occurred?
The regulationi has worked an economic wipe-out of your investment.
What is the remedy for a regulatory taking?
Government must either:
1) Compensate the owner for the taking, or
2) Terminate the regulation and pay the owner for damages that occurred while the regulation was in effect.
What is zoning?
Pursuant to its police powers, the government may enact statutes to reasonably control land use.
What is the variance?
The principle means to achieve flexibility in zoning.
What must the proponent of a variance show?
1) Undue hardship; and
2) That the variance won't work detriment to surrounding property values.
How is the variance granted or denied?
By administrative action, typically in the form of a zoning board.
What is the nonconforming use?
A once lawful, existing use now deemed nonconforming by a new zoning ordinance.
May a nonconforming use be eliminated?
It cannot be eliminated all at once unless just compensation is paid. Otherwise, it could be deemed an unconstitutional taking.
What is an exaction?
Exactions are those amenities that government seeks in exchange for granting permission to build.
What are the requirements for an exaction to be constitutional?
Exactions are inherently suspect and can be viewed as governmental extortion. To pass constitutional scrutiny, these exactions must be reasonably related both in nature and scope, to the impact of the proposed development. Otherwise, they are unconstitutional