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56 Cards in this Set

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Freehold Estates: Fee simple absolute

-Future interest
"To A" or "To A and his heirs"

D, D, A

No future interest.
Freehold Estates: Fee tail
"To A and the heirs of his body"

(Note that this was virtually abolished in US and is virtually never tested. Attempted creation of fee tail INSTEAD creates fee simple absolute)
Freehold Estates: Fee simple determinable

-NY variant?
-Future interest
-A defeasible fee-

In NY, “A fee on limitation.”

"To A so long as/until/while"

A, D, D subject to condition

Possibilty of Reverter (held by grantor) - think FSDPOR
Freehold Estates: Fee simple subject to condition subsequent

-NY Variant?
-Future interest
-Defeasible fee-

In NY, “A fee on condition.”

“To A, but if X event happens, grantor reserves right to reenter and retake.”

A, D, D subject to condition

Right of entry/power of termination (held by grantor); in NY, “right of reaquisition.”
Freehold Estates: Fee simple subject to executory limitation

-Future interest
“To A, but if X event occurs, then to B.”

A, D, D, subject to condition

Executory interest (3d party; springing or shifting)
Freehold Estates: Life estate

-Future interest
“To A for life.”
“To A for the life of B.”

A, D, D so long as alive or pur autre vie life is alive

Reversion (if held by grantor); Remainder (if held by 3d party)
Responsiblities of life estate holder
(1) entitled to all ordinary uses and profits from the land, but

(2)cannot commit waste
-Voluntary or affirmative waste: Actual overt conduct that causes decrease in value; no consumption or exploitation EXCEPT P.U.R.G.E. (Prior use; reasonable repairs; grant; exploitation)
-Permissive waste, or neglect: Tenant must pay all ordinary taxes on land and profits from it.
-Ameliorative waste: Life tenant cannot engage in acts enhancing property’s value unless all future interests are known and consent. BUT, in NY, life tenant may make REASONABLE improvements absent objections
Types of Future Interests in the Grantor
1. Possibility of Reverter. Only in fee simple determinable.
2. Right of Entry, known also as “power of termination”: only accompanies fee simple subject to condition subsequent. Think Bobby Brown, “It’s my prerogative.”
3. Reversion—future interest that arises in grantor who transfers estate of less than she started with.
Types of Future interests in Transferees
Vested Remainder: if (1) created in ascertained person and (2) not subject to any condition precedent; Types: indefeasibly vested, vested remainder subject to complete defeasance; vested remainder subject to open; NOTE: If your present estate is defeasible fee, the future interest is NOT a remainder but an executory interest.

Contingent Remainder; (In NY called “remainder subject to condition precedent.) Contingent either b/c created in as yet unborn or unascertained persons, or b/c subject to condition precedent which is like prerequisite.

Executory interest (shifting or springing); in NY Called “remainders subject to condition precedent.”
Former Rules on Contingent Remainders
Historically, they were despised, so doctrines grew up limiting them.

E.g. “destructibility rule” at common law said that B’s contingent remainder would be destroyed if B hadn’t yet attained the specified age in the will. Now abolished.

Rule in Shelley’s Case
(present and future interests merge, giving A fee simple when O conveys “To A for life, then on A’s death, to A’s heirs.” Today this has been abolished, so when O conveys “To A for life, then to A’s heirs” we get life estate for A, and A’s as yet unknown heirs have contingent remainder, and O has reversion

Doctrine of Worthier Title (still around in places, but abolished in NY after 1967)—O tries to create future interest in his own heirs while giving A life estate.
Approach to interest in transferees
1. Distinguish vested from contingent remainders
2. Distinguish 3 kinds of vested remainders from each other;
3. Distinguish all remainders from executory interests.
Rule against perpetuities
Certain future interests void if any possibilty that it may est more than 21 years after death of a measuring life

1. Determine future interests; RAP applies only to contingent remainders, executory interests, and certain vested remainders subject to open.

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

3. Find a measuring life—person alive at date of conveyance; Is that person’s death relevant to condition’s occurrence?

4. Will we know, with certainty, within 21 years of death of measuring life, if the future interest holder/s can or cannot take?

If so, conveyance good. If not, future interest void.

Watch for:
-Gift to open class conditioned on members surviving to age beyond 21
-Executory interest w/ no limit on time
-BUT Charity-to-charity exception: will not violate RAP
RAP Reform (two possiblities)
Wait and see” or “second look” doctrine. Looks at facts as they now exist at conclusion of measuring life—not “anything is possible” inquiry.

Uniform Statutory Rule Against Perpetuities.

Both of these are “cy pres” doctrines, meaning “as near as possible.” Ct can reform disposition in way that most closely matches grantor’s intent while still complying w/ RAP.

Both reduce any offensive age contingency to 21 years.
New York Perpetuities Reform Statute
NY applies common law RAP and has rejected wait and see and cy pres except for charitable trusts and powers of appointment.

-Where interest would be invalid b/c made to depend on any person’s having attained age in excess of 21 years, age contingency is reduced to 21 years
-NY statute presumes that woman over age 55 cannot have child. Adoption is disregarded.
-NY “suspension rule”—rule against suspension of the absolute power of alienation. Applies common law RAP to restrictions on right to sell or transfer. An interest is void if it suspends the power to sell or transfer for a period longer than lives in being or 21 years.
CONCURRENT ESTATES: Three forms of concurrent ownership
1. Joint tenancy: 2 or more own w/right of survivorship.
2. Tenancy in the entirety: Protected marital interest b/t H and W with right of survivorship.
3. Tenancy in Common: 2 or more own w/no right of survivorship

Distinguishing characteristics:
1. right of survivorship.
2. alienable interest. Not, however, devisable or descendable.

Creation of a Joint Tenancy
1. Four unities (“T-TIP”): Joint tenants must take their interests in Time (by same time); Title; Identical equal interests; Possess whole.
2. Grantor must clearly express right of survivorship.
3. Use of straw man generally necessary for creation; in NY, abolished need for straw.
CONCURRENT ESTATES: Severance of Joint Tenancy
(“SPAM”: sale, partition, and mortgage)

1. Severance and Sale: Joint tenant can sell interest during lifetime, even if secretly; Sale OR contract for sale disrupts unities, making buyer tenant in common, but joint tenancy remains intact as between non-transferring joint tenants.
2. Severance and Partition: Three kinds: by voluntary agreement; partition in kind (judicial action); forced sale (also judicial action).
3. Severance and mortgage: one joint tenant’s execution of mortgate or lien on his or her share will sever joint tenancy as to that now encumbered share ONLY in minority of states to follow “title” theory of mortgage. Majority of states (incl. NY) follow lien theory, so no sever
CONCURRENT ESTATES: Tenancy by the entirety
● How to create: can only be created in H and W who take as fictitious person with the right of survivorship. In states that have it, it arises presumptively in any conveyance to H and W unless clearly stated otherwise.
● Severance: only death, divorce, mutual agreement, or execution by a joint creditor of both H and W can sever.
● NY: one spouse may mortgage his interest and his creditors may enforce against that interest, but only as to debtor spouse’s share. Non-debtor spouse’s rights, such as survivorship, may not be compromised.
● Three features:
1. each co-tenant owns individual part, and each has right to possess the whole
2. Each interest is descendable, devisable, and alienable. No survivorship rights b/t tenants in common.
3. Presumption favors tenancy in common.
CONCUREENT ESTATES: Rights and duties of co-tenants
● Possession: each co-tenant has right to possess all portions of property but no right to exclusive possession of any part.
● Rents and profits: co-tenant in possession has right to retain profits from her own use of property—i.e. need not share profits with other co-tenants. But must share net rents from 3d parties and net profits gained from exploitations of land.
● Adverse possession: co-tenant can’t acquire title to whole through adverse possession if one co-tenant is away for a long time. Unless ouster has occurred.
● Repairs: Repairing co-tenant enjoys right to contribution for necessary repairs, provided she has notified the others. Right of contribution is apportioned by share of ownership.
● Improvements: During life of co-tenancy, no right of contribution for “improvements.” But at partition, improving co-tenant is entitled to credit for any FMV increase in property; also bears liability for decrease in FMV.
● Waste: co-tenant may not commit waste.
● Partition: joint tenant or tenant in common can bring action for partition.
-Tenancy for years: Whenever you know termination date from start; NO notice
-Periodic tenancy: continues for successive intervals until L or T give proper notice of temrination; NOTICE is one period PLUS...
-Tenancy at will: terminated by either party at any time, but reasonable demand to vacate is typically required. In NY, L must give min 30 days written notice of termination
Tenancy at suffrance: T has wrongfully held over past expiration of lease; In NY, L’s acceptance of rent after expiration of term will create implied month-to-month periodic tenancy, unless otherwise agreed.
Tenant's Duties
Liability to 3d parties:
T’s duty to repair: no waste, maintenance, can't take fixtures (even if own)
T’s duty to pay rent: If breach and T is in possession, L can only evict through courts; No self-help; NY entitles T to treble damages in event of self help.
Landlord's Remedies (If T breaches duty but is out of possession)
Surrender: L can choose to treat T’s abandonment as implicit offer of surrender of leasehold which L accepts.

Ignore abandonment: L can ignore abandonment and hold T responsible for unpaid rent.

Re-let premises, and hold T liable for any deficiency. Majority rule: L must at least try to re-let to cut losses.

NY: does not require L to mitigate damages when T abandons premises (counter to majority rule).
Landlord's Duties: (3)
-Duty to deliver ACTUAL possession

-Implied Covenant of Quiet Enjoyment: T has right to quiet use and enjoyment of premises; applies to both commercial and residential leases.

-Implied Warranty of Habitability: premises must be fit for basic human habitation. Standard supplied by local housing code or independent judicial conclusion...applies only to residential leases; non-waivable
Landlord's Duties: Implied Covenant of Quiet Enjoyment
Breach by actual wrongful eviction: occurs when L wrongfully evicts T or excludes T from premises.

Breach by constructive eviction: Elements are these (“SING”):
1)Substantial Interference: chronic problem attributable to L’s actions or failure to act.
2)Notice. T must give L notice and L must fail to respond meaningfully.
3)Get out: T must vacate w/in reasonable time after L fails to fix problem. T cannot have it both ways.

Landlord generally not liable for acts of other tenants. BUT L has duties:
1)Not to permit nuisance on premises.
2)To keep up common areas.
Landlord's Duties: Implied Warranty of Habitability
Examples of problems: failure to provide heat in winter; lack of running water.

T’s entitlements when this is breached: move, repair and deduct from rent (available in growing jurisdictions), reduce rent (or withhold all until court determines fair rental value), remain in possession (while paying rent and affirmatively seek money damages).

Retaliatory eviction: If T lawfully reports L for housing code violations, L is barred from penalizing T by raising rent or ending lease.
In absence of prohibition in the lease, T may freely transfer interest in whole (assignment) or in part (sublease).
● In lease L can prohibit T from doing both without L’s prior written consent. But once L consents to one transfer by T, L waives right to object to future transfers by that T.
● NY assignment: 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 lease.
● NY sublease: T in residential building of four or more units has right to sublease subject to L’s written consent, which cannot be unreasonably withheld.
● “privity of estate”: what you are when you are liable to each other for all covenants in original lease that “run with the land.” L and T2 are in privity of estate when T1 assigns lease to T2.
● “privity of contract”: L and T1, T1 and T2, but not L and T2 are in privity of contract. Means L and T1 are secondarily liable to each other for problems w/T2.
● common law “caveat lesseee.” In tort L under no duty to make premises safe.
● Exceptions to this (tenant “CLAPS” when hears this):
oCommon areas: L must maintain all common areas, e.g. hallways, stairs.
oLatent defects rule: L must warn T of hidden defects.
oAssumption of repairs. Once undertaken, L must complete them w/ reasonable care.
oPublic use rule: L who leases public space, and who should know b/c of nature of the defect and length of lease that T won’t repair, is liable.
oShort term lease of furnished dwelling.
Servitudes: Easements generally
-Affirmative (more common) and Negative (L.A.S.S., only by grantor's writing)
-start w/P.I.N.G., terminate with E.N.D.C.R.A.M.P.
-appurtenant or in gross )commercial interest, assignable)
-appurtenant easements pass automatically with dominant tenement
-Remedy: injunction OR damages
Servitudes: License
-kinda a short-term Revocable easement
-Examples: ticket or oral easement leading to freely revocable license
Servitudes: Profit
-entitles holder to enter servient land and take the soil or some substance from the soil
-shares rules of easements
Servitudes: Covenant
Contractual limitation or promise regarding your use of the land
-Negative or affirmative
-burdened tract and benefited tract
-Burden runs via W.I.T.H.N.; benefit via W.I.T.V. (do burden first in analysis)
-Remedy: DAMAGES only; it's a concept of LAW
Servitudes: Running of a covenant
-Burden via W.I.T.H.N.; benefit via W.I.T.V.

-Horizontal privity is nexus between orig. promising parties; requires succession of estate (landlord/T, grantor/grantee, mortagor/gee); HARD!

-Vertical Privity: non-hostile nexus (contract, devise, descent); NOT adverse possession
Servitudes: Equitable Servitudes generally
-Promise that equity will enforce against successors
-Created via - no privity
-"Implied equitable servitude"; "general servitude" or "general/common scheme doctrine -- requires common original scheme at subdivision, and notice of the promise (A.I.R.)
-NY: subsequent buyer does NOT have record notice of prior deeds from common grantor
-defense against general scheme doctrine -- changed conditions BUT must be pervasive
Adverse Possession
Possession ripens into title after prescribed period
-Poessessor's subjective state of mind irrelevant
-Tacking okay (if non-hostile privity and no ouster)
-S.O.L. does NOT run if true owner inflicted with disability (insanity, infancy, imprisonment) at commencement of possession
Land conveyancing: Steps (2)
-Land contract (short-lived)
-Closing; deed becomes operative
Land conveyancing: Land Contract generally
-includes (1)writing signed by enforcee (2) description of land (3) state some consideration
-meet S. of F. (unless part performance)
-re: loss, generally equity kicks in and K's signing puts loss on buyer; NY seller retains until title or possession changes hands
-implied promises of marketable title, no false statements of material fact, but NO implied warranty of fitness (EXCEPT new home by builder)
NY: 1-4 family res. dwelling requires disclosure form under Property Condition Disclosure Act
Land conveyancing: Closing
Deed passes legal title
-requires L.E.A.D.
-no consideration required
-some description of land
-physical transfer OR present intent under the law; rejection defeats delivery; oral conditions void; escrow okay
-Remedy for breach of sales contract: Nonbreaching party entitled to damages, or b/c land is unique, specific performance.
Land conveyancing: Conditions for title and three types of deed
Note—called “covenants for title” but have nothing to do w/ real covenants

-Quitclaim: Grantor just releases whatever interest he has; no covenants.
-General Warranty deed: warrants against all defects in title even those due to grantor’s predecessors (6 covenants)
-Statutory special warranty deed (NY: “bargain and sale deed”)2 promises grantor makes on behalf of only himself: He hasn’t conveyed estate to anyone else; estate is free from encumbrances made by grantor
-Estoppel by Deed (not major one): if grantor purports to convey an estate in property that she doesn’t then own but later acquires, the grantee will get it
Land conveyancing: covenants of a general warranty deed
Present covenants (S/L starts at delivery)
1. Covenant of seisen: Grantor promises he owns estate he now claims to convey.
2. Covenant of right to convey: Grantor promises he has power to make this conveyance.
3. Covenant against encumbrances: grantor promises there are no servitudes or mortgages on the land.
Remedy: if there are successive conveyances by warranty deed, and last grantee is evicted by lawful claim of title, he may sue anyone up the line.

Future covenants: Not breached until grantee is disturbed in possession. So S/L for breach of these doesn’t run until that further date.
4. Covenant for quiet enjoyment: Grantor promises grantee will not be disturbed in possession by 3d party’s lawful claim of title.
5. Covenant of warranty: Grantor promises to defend grantee should there be any lawful claims of title.
6. Covenant for further assurances: Grantor promises to perform whatever future acts are reasonably necessary to perfect grantor’s title if it later turns out to be imperfect.
Recording System: two rules
Basically can't be BFP if deed is recorded to another owner or otherwise evidence of ownership, therefore would NEVER receive title

If BFP in NOTICE jur., that BFP wins, regardless of whether he records first

If BFP in RACE-NOTICE jur., BFP wins if records before A
Recording System: BFP
-purchases real property for value (even if minimal)
-has no notice of someone's prior claim (A.I.R.)
Servitudes: Types (5)
-Equitable Servitudes
Recording system: Those who benefit from BFP
o Mortgagees for value;
o NOT donees, heirs, and devisees b/c they didn’t give value.
o Usually NOT judgment creditors (meaning, creditors like insurance companies who have obtained judgment that they get lien on the property): majority of states don’t protect, theory being that the creditor isn’t offering consideration at the time his lien is created.
o Purchaser from heir of record owner: this person is protected against prior unrecorded conveyances of the record owner (now deceased).
o Transferees from BFP (people the BFP then transfers to)—see shelter rule below.
Recording System: Chain of title problems
(1) The Shelter Rule: person who takes from a BFP will prevail against any interest the transferor-BFP would have prevailed against; even if transferee had actual notice of a prior unrecorded conveyance
(2) Wild Deed: Deed is incapable of giving record notice of its existence, which means that subsequent BFP will win in either jurisdiction if records.
(3) Estoppel by Deed: If O sells land he doesn’t yet own to X, and X goes ahead and sells this to A who records, when X finally does own the land and sells to B, who records, B will win. In notice system b/c he is BFP, and in race-notice b/c he was BFP and won race to record. This is b/c one is entitled to assume that no one sells land until they first own it.
Mortgages: definition
Def'n: Conveyance of a security interest in land, intended by parties to be collateral for repayment of monetary obligation
Mortgages: creation
Union of...
-Voluntary transfer of debtor's land to secure it

NOTE: generally must be in writing for S. of F.; is also "equitable mortgage"
Mortgages: rights
Mortgagor: title and the right to possession

Mortgagee: a lien meaning right to look to the land if default
Mortgages: transferability
All parties can transfer their interest; mortgage automatically follows a properly transferred note.

Creditor-mortgagee can transfer interest by:
-Endorsing note and delivering it to transferee; OR
-Executing separate document of assignment.
Mortgages: rights of holder in due course
If note properly transfered (endorsed, delivered)transferee is eligible, i.e., takes the note free of personal defenses (lack of consideration, fraud in inducement, unconscionability, waiver, and estoppel) but still liable for real defenses (material alteration, duress, fraud in the factum (meaning lie about the instrument), incapacity, illegality, infancy, insolvency (remember with “MAD FIFI”)
Mortgages: path to becoming holder in due course
a) note must be negotiable, made payable to named mortagee;
b) the original note must be endorsed, signed by named mortgagee;
c) Original note must be delivered to transferee (photocopy unacceptable);
d) Transferee must take note in good faith, without notice of illegality;
e) Transferee must pay value for the note, meaning some amt. more than nominal.
Mortgages: transfer of encumbered property
-Note: recording statutes apply to mortgages as well as deeds, so mortgagee has obligation to record. If buyer buys without checking the record, even if he doesn’t know about a mortgage, he takes subject to it if the mortgagee has recorded, regardless of which jurisdiction he’s in.
-Liability: If the debtor-mortgagor O sells Blackacre to B, normally he takes merely subject to the mortgage, meaning that B assumes no personal liability on the debt—only O is personally liable. BUT mortgage is still on the land, so if O does not pay, mortgage may be foreclosed. If, however, B has expressly “assumed the mortgage” in the agreement, both O and B are personally liable, with B primarily liable and O secondarily liable.
Mortgage: foreclosure defintion, costs
when mortgagee satisfies the debt by having the land sold in a judicial proceeding (usually by auction, and lender is permitted to bid at the sale).
-If sale price < amount owed: mortgagee can bring personal action against debtor for deficiency judgment.
-If sale price > amount owed: “junior liens” (creditors w/ lesser priority) are paid off in order of priority, and any remaining surplus goes to debtor. Each claimant is entitled to satisfaction in full before subordinated lienholder may take. The ones who lose out can proceed for deficiency judgment.

Note that attorney’s fees, then any expenses of the foreclosure, then any accrued interest on foreclosing mortgagee’s mortgage are paid off top.

Deficiency Judgment: if proceeds from foreclosure are insufficient to satisfy the mortgage debt, mortgagee retains personal cuase of action against mortgagor for the deficiency.
Mortgage: Effect of foreclosure on various interests
-Interests junior to the mortgage being foreclosed: foreclosure will terminate these interests, meaning that these lienholders will be paid in descending order with the proceeds from the sale and junior lienholders who don’t get paid b/c not enough money left over can proceed w/ deficiency judgment. These lienholders with interests subordinate to those of the foreclosing party are necessary parties (and if not joined, their mortgage will remain on the land).
-Interests senior to the mortgage being foreclosed: buyer at the sale takes subject to this interest—in other words, while buyer is NOT personally liable on the senior debt, as a practical matter if the senior mortgage is not paid, sooner or later the senior creditor will foreclose against the land.
Until you record properly, you have no priority. The order of priority may be changed by operation of the recording statute if prior mortgagee fails to record.
-Once recorded, priority is determined by first in time, first in right.
-Purchase money mortgage: mortgage given to secure loan that enables debtor to acquire the encumbered land. This has priority as to the parcel it financed.
Mortgage: redemption
o Redemption in equity: (universally recognized up to date of sale—then cut off). Any time prior to the foreclosure sale, debtor had right to redeem the land and free it of the mortgage. This right it not waivable If mortgage contains acceleration clause (meaning that mortgagee can declare the full balance due in the event of default), the full balance plus interest plus costs must be paid to redeem.
o Statutory redemption (NOT recognized in NY): recognized in 1/2 states, it gives debtor-mortgagor statutory right to redeem for some fixed period after foreclosure sale has occurred (typically 6 months to 1 year). The amount is usually the foreclosure sale price rather than the amount of debt. The effect is to nullify the sale.
Mortgages: Installment Land Contracts:
Installment purchaser obtains legal title only when the full K price has been paid off. Forfeit clauses, allowing the vendor upon default to cancel the K, retake possession, and retain all money paid, are common. While this is more common than use of foreclosure some courts give contract purchaser equity of redemption, or make vendor refund any amount by which purchaser’s payments exceed vendor’s damages.