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379 Cards in this Set
- Front
- Back
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What is property law divided into?
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1. Ownership
2. Rights in Land 3. Real property K 4. Real property mortgages 5. Titles |
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What topics are discussed in the Ownership section?
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1. Present Estates
2. Cotenancies 3. Future Interests 4. The law of landlord & tenant 5. Special problems |
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What are the present estates? re:ownership
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1. FSA
2. Defeasible fee simples 3. Life Estates |
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What is a fee simple absolute?
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1. It is absolute ownership of potentially infinite duration.
2. "To A" 3. Devisable, descendable, alienable 4. No future interest |
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What is a fee tail?
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"To A and the heirs of his body" - now abolished and treated as FSA
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What are the 3 different types of defeasible fees?
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1. Fee Simple Determinable
2. Fee Simple subject to Condition Subsequent 3. Fee Simple Subject to Executory Interest |
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What is a fee simple determinable?
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1. " To A for so long as..."
2. Durational language is a must 3. If stated condition is violated forfeiture is automatic 4. Freely DDA 5. Accompanying FI = possibility of reverter |
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What is a fee simple subject to condition subsequent?
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1. "To A, but if X event occurs, then grantor reserves the right to reenter"
2. Grantor must use clear durational language and must carve out right to reenter 3. Estate is not automatically terminated but it can be cut short at grantor's option if the stated condition occurs. 4. FI = Right of entry |
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What is a fee simple subject to executory interest?
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1. "To A, but if X event occurs, then to B"
2. Someone other than grantor takes 3. If condition is broken, forfeiture is automatic in favor of someone other than the grantor 4. FI = Shifting executory interest |
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What kind of words do not create a defeasible fee?
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Words of mere purpose, desire or hope
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what is the agonist potency order for α2 receptor and what is the mechanism?
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epi>norepi>>isoprenaline; adenylate cyclase inactivated, cAMP down
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What is a life estate?
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1. " To A for life"
2. Estate measured in explicit lifetime terms, never in term of years 3. Not Devisable or descendable, but alienable 4. Future interest= reversion in grantor or remainder in third party |
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What is a life estate pur autre vie?
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It is a life estate measured by the life of someone other than the grantee
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What are the general rules of a life estate?
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1. Life tenant is entitled to all ordinary uses & profits of the land
2. Life tenant cannot commit waste 3. LT is obligated to pay the ordinary, annual real estate taxes assessed against the property, to the extent that she receives actual or imputed income from the property |
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What are the different types of waste?
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1. Voluntary or affirmative waste
2. Permissive waste 3. Ameliorative waste |
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What is voluntary waste?
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Overt conduct that causes a decrease in nvalue.
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What is permissive waste?
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Includes maintenance & taxes. LT must maintain premises in reasonably good repair, and must pay ordinary taxes to the property's fair market value
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What is ameliorative waste?
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LT cannot act to enhance property's value
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Can a LT consume or exploit natural resources on the property?
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No - that would be voluntary/affirmative waste
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What are the exceptions that allow a LT to consume or exploit natural resources on the property?
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1. Prior use: If prior to the grant the land was used for exploitation ( Open Mines Doctrine: use mines already used, not new ones)
2. Reasonable repairs: may use natural resources for reasonable repairs and maintenance 3. Grant: LT may exploit resources if expressly granted the right to do so 4. Exploitation: Land is suitable only for exploitation |
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What are the 3 types of cotenancies?
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1. Tenancy in common
2. Joint Tenancy 3. Tenancy by the entirety |
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What is a tenancy in common?
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1. Each co tenant owns an individual part with the right to possess the whole
2. No right to survivorship 3. DDA 4. Presumption favors TIC |
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What happens in a TIC if an owner dies?
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There is no right to survivorhsip i.e. when he dies his share passes to his heirs by will or intestate succession
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What are the rights and duties of co-tenants?
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1. Possession
2. Rent 3. Adverse Possession 4. Carrying costs 5. Repairs 6. Improvements 7. Waste 8. Partition |
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What is possession? re: rights and duties of co-tenants
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All tenants have the right to possess the whole property ( no ouster)
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What is rent? re: rights and duties of co-tenants
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1. Co-tenant possession is not liable to others for rent
2. 3rd party rent is shared by % of ownership |
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What is adverse possession?re: rights and duties of co-tenants
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Co-tenants cannot acquire title via AP unless there is an ouster
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What is carrying costs?re: rights and duties of co-tenants
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Each co-tenant is responsible for their share of carrying costs (e.g taxes, mortgages) by % of ownership
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What is repair? re: rights and duties of co-tenants
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Each co-tenant enjoys right to contribution for reasonable and necessary repairs
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What is improvements? re: rights and duties of co-tenants
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No contribution for improvements, but at partition, entitled to credit equal to any increase( or decrease) in value caused by the efforts
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What is waste? re: rights and duties of co-tenants
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A co-tenant must not commit voluntary, permissive and ameliorative waste
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What is partition? re: rights and duties of co-tenants
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A joint tenant or equity cort can bring an action for partition but a private individual cannot
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What is a joint tenancy?
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1. Dual ownership w/ right to survivorship i.e when one of the owners dies, his share passes automatically to the surviving joint tenants
2. Alienable but NOT DD |
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How is a joint tenancy created?
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Joint tenants must take their interest with 4 unities:
1. Time: at the same time 2. Title: a. By the same instrument b, Must state the right to survivorship 3. Interest: with identical equal interests 4. Possession: with identical rights to possess the whole T-TIP |
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What are the two ways to a severe a joint tenancy?
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1. Sale
2. Partition |
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How does a sale severe the joint tenancy?
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1. A JT can sell or transfer his interest DURING his lifetime, w/ or w/o other JTs consent or knowledge
2. The sale severs the 4 unities => TIC between the new buyer and the JT ( their JT remains intact) |
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When does a sale sever a Joint Tenancy?
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At the time of entering the K - not at the closing ( Equitable Coversion)
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What is the consequence of severance of a Joint Tenancy at the time of K versus at closing?
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If a seller joint seller dies while property is in escrow , that means the other JT will not get right of survivorship
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What are the four ways of severing a Joint Tenancy through Partition?
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1. Voluntary agreement
2. Partition in Kind (i.e. judge decides how to split) 3. Forced sale ( sell and divide proceeds) 4. Joint tenant's death (terminates the interest to which creditor's lien is attached) |
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What are the 4 kinds of future interests in land?
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1. Reversions
2. Remainders (vested & contingent) 3. Executory Interests 4. Possibilities of reverter & powers of termination |
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What is the language used in reversions?
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" To A for X years"
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What is a reversion?
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It is an agreement such that one party (grantee) is given a possessory interest in property from another (grantor), under the understanding that the property will revert to the grantor at the expiration of the grantee's interest
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What is the language used in remainders?
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"To A for lif, then to B" or " To A for ten years, then to B"
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What is a remainder?
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It is a FI created in the grantee capable of becoming a possessor upon the expiration of a prior possessory estate created in the same conveyance in which the remainder was created
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What are the 2 qualities of a remainderman?
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1. he is sociable, and always follows a preceding estate of known fixed duration (life estate or term of years)
2. he waits patiently for the preceding estate to run its natural course and never follows a defeasible fee |
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What is the future interest of the grantor when there is a remainder?
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O will always have a "reversion"
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What are the two types of remainders?
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1. vested
2. Contingent |
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What are the 3 types of vested remainders?
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1. Indefeasibly vested remainder
2. Vested remainder subject to complete defeasance 3. Vested remainder subject to open |
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What is the language of an indefeasibly vested remainder?
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"To A for life, then to B"
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What is an indefeasibly vested remainder?
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1. The holder of the remainder is certain to acquire an estate in the future, with NO STRINGS ATTACHED
2. So if A is alive, B has an indefeasibly vested remainder. At CL, if B dies before A, then B's heirs have a vested remainder |
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What is the language of a vested remainder subject to open?
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to A for life, remainder to B, provided, however, that if B dies under the age of 21, to C
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What is a vested remainder subject to open?
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It is a remainder that is subject to a condition SUBSEQUENT
1. so, C has a shifting executory interest and B has a vested remainder subject to complete defeasance (so B still takes if under 21 as it is not a prereq) |
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How can you determine if we have a condition precedent (makes it a contingent remaindent) from a condition subsequent (vest remainder subject to open)?
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If the conditional language " if B dies" is before the passing to B then it is a condition precedent - if after, then it is a condition subsequent
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What is the language for a vested remainder subject to open?
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To A for life, then to B's children
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What is a vested remainder subject to open?
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It is a remainder that is vested in a group of takers , at least one of whom is qualified to take possession
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When is a class open in a vested remainder?
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When it is possible for others to enter ( and B has children at the time of the grant)
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What is the effect of a vested remainder subject to open to the shares of the class members?
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Each class member's share is subject to partial diminution
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Why is the shares of class members in a vested remainder subject to open subject to partial diminution?
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because additional takers not yet ascertained can still qualify as class member
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What is the rule of convenience? re: vested remainders subject to open
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A class closes whenever any member can demand possession ( To A for life, then to B's children => class closes when either A or B dies)
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What is the womb rule? re: vested remainders subject to open
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Child in the womb at A's death who would be a member of the class if alive will share in the class ( To A for life, then to B's children)
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What is the language of a contingent remainder?
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To A for life then to B's first child or To A for life then if B graduates, to B
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What is a contingent remainder?
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A remainder that is either
1) created in an unascertained person OR 2) subject to a condition precedent OR 3) both |
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What is a condition precedent? re: contingent remainders
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If the conditional language is before the passing to B
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What does a contingent remainder accompany?
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A preceding estate of known fixed durtion , like a life estate or a term of years ( same as a vested remainder)
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What are the 3 doctrines for a contingent remainder?
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1. Rule of destructibility
2. Shelly's case 3. Doctrine of worthier title |
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What is the rule of destructibility?
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At CL a contingent remainder is destroyed if it is still contingent at the time the preceding estate ends (abolished)
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Since the rule of destructibility is abolished, what happens to a contigent remainder that is still contingent at the time the preceding estate ends?
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We will have a fee simple subject to a springing executory interest
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What is the Rule in Shelley's case?
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If we had language which stated: to A for life, then to A's heirs, under the Shelley's rule, we would have a merger of the two interests : To A . Making it a FSA.
(At CL) |
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Since the Rule in Shelley's case is abolished, what happens when we have two interests such as To A for life and then to A's heirs?
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1. Heirs have a contingent remainder, and if A does not have children, then the property reverts back to the grantor
2. Grantor's intent does not control because it is a rule of law, not construction |
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What is the Doctrine of worthier title?
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Applies when we have language that states: To A for life, then to O's (grantor's) heirs
=> O when alive, tries to create a future interest in his heirs |
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Is the doctrine of worthier title a rule of law or construction?
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It is a rule of construction => the grantor's intent control ( O has a reversion)
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What is the language for the two types of executory interests?
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1. Springing: To A, if and when he marries
2. Shifting: To A, but if he does not marry then to B |
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What is an executory interest?
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It is a future interest created in the transferee, which is not a remainder, and which takes effect by EITHER:
1) cutting short interest in ANOTHER person (SHIFTING) OR 2) cutting short interest in the GRANTOR & his heirs (SPRINGING) |
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What is a SHIFTING executory interest?
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1. Cuts short the interest of someone other than the grantor
2. Always follows a defeasible fee " To A, if and when he passes the bar exam, or to B" => here A has a fee simple subject to B's shifting executory interest |
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What is a SPRINGING executory interesr?
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1. Cuts short the grantor's interest
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What is a possibility of reverter?
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1. The future interest created with FSD
2. The grantor automatically get the real property back if the grantee violates the condition |
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What is power of termination or right of re-entry?
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1. The future interest created with a fee simple subject to condition subsequent
2. A granto has the right to reclaim the state if a condition is violated. |
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What five topics are covered in the law of landlord and tenants?
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1. Leasehold & nonfreehold estate
2. Tenant's duties 3. Landlord's duties 4. Assignment v. sublease 5. LL tort liability |
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What are the 4 types of leasehold estates?
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1. Tenancy for years
2. Periodic tenancy 3. Tenancy at will 4. Tenancy at sufferance |
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What is a tenancy for years?
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1. Lease for a fixed determined period of time ( To A from Jan 1 till July 1 )
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When does the SOF apply to a tenancy for years?
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It applies when the lease term is greater than one year ( thus, that lease must be in writing)
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Is notice required for termination of a tenancy for years?
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No. It simply terminates at the agreed upon date
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What is a periodic tenancy?
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It is a lease that continues for successive or coninuous intervals ( To A from month to month)
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Is notice required for termination of a periodic tenancy?
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Yes. Both LL and T have to give proper notice
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How is a periodic tenancy created?
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It is either:
1. Express 2. Implied |
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How is an express periodic tenancy created?
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It clearly states that the tenancy is from one period to the next.
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What are the 3 ways in which an implied periodic tenancy created?
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1. Land is leased w/ NO MENTION of duration, but there is a provision made for payment of rent at set intervals
2. An oral term of years is a violation of SOF, and creates an implied periodic tenancy 3. In a residential lease, if a LL elects to hold a T who has wrongfully stayed on past the conclusion of the lease, an implied tenancy arises, measured by the way the rent is now tendered |
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What kind of notice is required to terminate a periodic tenancy?
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1. Written notice is required
2. Amount of notice: atleast equal to the length of the period itself unless otherwise agreed 3. By private agreement, parties may lengthen or shorten the notice requirement |
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What is a tenancy at will?
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Tenancy with no fixed duration (" so long as the LL or T desires")
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To what is the importance of EXPRESSLY agreeing to a tenancy at will?
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Unless expressly agreed upon, courts will treat regular rent payments to mean a periodic tenancy
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When can a tenancy at will be terminated?
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At any time
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Is notice required?
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Yes, a reasonable demand to vacate is required
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What is a tenancy at sufference?
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It is created when a T wrongfully holds over past the expiration of the lease
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For how long does a tenancy at sufference last?
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It lasts either until LL evicts T OR LL elects to hold tenant to a new term
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What are a T's 3 main duties?
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1. T's liability to 3rd parties
2. T's duty to repair 3. T's duty to pay rent |
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What is a Tenant's liability to 3rd parties?
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T is responsible for keeping the premises in reasonably good repair
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Is T responsible for injuries sustained by third parties on the premises? re:T's duties
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Yes. T is responsible for injuries sustained by 3rd parties that T invited, even if the LL has expressly promised to make repairs ( T make seek indemnification)
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What is a T's duty to repair when the lease is silent?
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T cannot commit waste
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What's T's duty to repair under the majority rule when premises are destroyed w/o T's fault?
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Under the majority rule, T may terminate the lease if the destruction is not his fault. (Under CL the loss went to the T- even for force of nature)
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What happens if a tenant breaches his duty to pay rent when he is in possession of the property?
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The LL can evict through the courts OR continue the LL/T relationship & sue for rent
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Can a LL engage in self help if T breaches his duty to pay rent?
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No (changing locks, using force to remove T etc)
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What three options does a LL have if a tenant breaches his duty to pay rent and he is not in possession of the property?
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1. Surrender
2. Ignore (minority rule) 3. Re-let (majority rule) |
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How can a LL treat an abondonment as a surrender?
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He could treat it as an implicit offer to surrender which he accepts
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What if the unexpired term is for more than a year and the T has abadoned the lease?
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Then the surrender must be in writing (express) to satisfy the SOF
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How should a LL ignore an abandonment?
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A LL holds the the T liable for unexpired rent
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How should a LL re-let the property after an abandonment?
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LL must TRY to re-let under the mitigation priniciple , and hold T liable for any deficiences
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What are the LL's duties?
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1. Duty to deliver possession
2. Duty to comply with implied covenants 3. No retaliatory eviction |
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What is a LL's duty to deliver possession under the English (majority) rule?
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LL must put T in actual and physical possession of the property
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What is a LL's duty to deliver possession under the American (minority) rule?
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LL must only provide legal possession ( so if start of T's lease there's another T, then L has breached his duty)
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What are the two implied covenants that a LL has a duty to comply with?
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1. Implied covenant of quiet enjoyment
2. Implied covenant of habitability |
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What is the covenant of quiet enjoyment?
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It is the righ to quiet use and enjoyment of the land without the LL's interference
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What kind of leases does the covenant of quiet enjoyment apply to?
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It applies to both residential and commercial leases
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How is the covenant of quiet enjoyment breached?
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1. Breach by actual wrongful eviction
2. Breach by constructive eviction |
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What is constructive eviction?
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1. Substantial interference attributable to LL's actions or failure to act
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What are a T's duties if there is substantial interference attributable to LL's actions or failure to act?
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1. Notice: T must give LL notice and LL must fail to act
2. Get out or vacate: tenant must vacate within a reasonable time after the LL fails to fix the problem |
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Is a LL liable for acts of other tenants?
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No
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Under what circumstances is a LL liable for acts of other tenants?
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1. Duty not to permit nuisances of others on the premises
2. Duty to control common areas |
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What is the implied covenant of habitability?
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That the premises must be fit for basic human habitation (bare living requirements must be met - failure to provide heat during winter etc)
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What kind of lease is an implied covenant of habitability apply to?
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Only to residential leases
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What are a tenant's entitlements when the Implied Covenant of Habitability is breached?
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1. Move out
2. Repair and deduct 3. Reduce rent ( must put it in escrow) 4. Remain in possession (pay rent and affirmatively seek money damages) |
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What is retaliatory eviction?
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Penalyzing a TT for lawfully reporting a housing code violation
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What is an assignment?
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When a tenant transfers his interest in whole
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What is a sublease?
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When a tenant transfers his interest in part
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Are tenants allowed to assign or sublease?
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Yes, unless prohibited in the lease
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Does the LL need prior written approval to prohibit a tenant from assigning or subleasing?
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No
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Once a LL consents to one transfer (assignment or sublease) he _________ the right to ___________ to future transfers, unless LL ______________ reserves that right.
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waives, object, expressly
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What are the relationships between LL, T1 and T2 in an assignment?
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1. LL and T1 are no longer in privity of estate
2. LL and T1 are in privity of K => .LL and T1 are secondarily liable to each other 3. LL and T2 are in privity of estate => LL is liable for all covenants of the original lease 4. LL and T2 are not in privity of K unless T2 expressly assumed all promises in the original lease |
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What are the relationships between LL, T1 and T2 in a sublease?
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1. T2 is responsible to T1 and vice versa
2. T2 and LL are not in privity of K or estate |
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What is a LL's tort liability?
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1. In tort, LL is under no duty make the premises safe - caveat lessee - tenant beware
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What are the exceptions to a LL's tort liability?
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1. Common areas
2. Latent defects rule 3. Assumption of repairs 4. Public use rule 5. Short term lease of furnished dwelling |
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What is the latent defects rule?
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LL must warn of hidden defects of which LL has knowledge or reason to know
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What is the assumption of repairs rule?
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A LL has no duty to repair, but if he does repair, then he liable for negligent repairs
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What is the public use rule?
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LL who leases public space and who should know , because of the nature of the defect and the length of the lease, that the T will not repair, is liable for any defects on the premises
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What is LL's duty in a short term lease of a furnished dwelling?
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LL is responsible for any defect that harms tenant that the T does not have time to fix
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What are the special problems in ownership of property?
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1. Rule against perpetuities
2. Alienability 3. Descendability 4. Devisability |
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What is RAP?
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A future interest is void if there is any possibility, however remote, that the interest will vest more than 21 years after the death of a measuring life
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What kind of interests does RAP apply to?
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1. Contingent remainders
2. Vested remainders subject to open 3. Executory interests |
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What kind of interests does RAP does not apply to?
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1. Indefeasibly vested remainders
2. Vested remainders subject to complete defeasance |
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What two rules should we remember regarding RAP?
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1. A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates RAP
2. Many shifting executory interests violates RAP - an executory interest w/ no limit on the time within which it must vest violate RAP |
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What is the 4 step analysis for RAP?
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1. Determine which future interest are created (contingent remainder, vested remainder subject to open, executory interest)
2. Identify the conditions precedent to the vesting of the suspect future interest 3. Find the measuring life 4. Ask: Will we know, with certainty, within 21 years of the death of our measuring life , if our future interest holders can or cannot take? |
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What is the charity to charity exception for RAP?
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A gift from one charity to another does not violate RAP
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What two doctrines are reforms of RAP?
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1. Wait and see doctrine
2. Uniform statutory RAP |
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What is the wait and see doctrine?
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It is the majority reform effort for RAP, and looks at the facts at the conclusion of the measuring life
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What is the uniform statutory RAP?
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It codifies the common law RAP and makes it 90 years instead of 21
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Which possessory rights are alienable?
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1. FSA
2. Defeasible fees 3. Life estates 4. Tenancy in common 5. Joint Tenancy |
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Which possessory rights are descendable?
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1. FSA
2. Defeasible fees 3. Tenancy in common ( life estates and JT are not descendable) |
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Which possessory rights are devisable?
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1. FSA
2. Defeasible fee simple 3. Tenancy in common ( Life estates and JT are not devisable) |
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What topics are covered in rights in land?
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1. Covenants at law and equity
2. Easements, profits & licenses 3. Other interests in land 4. Takings |
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What are the covenants at law?
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There are two types:
1. Restrictive covenants 2. Affirmative covenants |
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What are restrictive/negative covenants?
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Promises to refrain from doing something to land.
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When/how are restrictive covenants enforced?
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When the right is in the chain of title.
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What are affirmative covenants?
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Promise to do something related to the land.
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What is the difference between a covenant and an equitable servitude?
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The remedy - if it 's money damages =>covenant. If it's injunction => equitable servitude
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What do you need for the burden of a covenant to run?
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1. Writing
2. Intent 3. Touch & concern the land 4. Notice 5. Horizontal privity 6. Vertical privity |
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What kind of writing is required for covenants & equitable servitudes to run?
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The original promise must be in writing
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What intent is required for covenats and equitable servitudes to run?
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The original parties must intend that the covenant or ES to run
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What does touch and concern mean?
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The promise must affect the parties legal relations as land owners. i.e. the covenant or ES must relate to the direct use and enjoyment of the land.
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What kind of notice is required for covenants and ES to run?
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Subsequent owners must have had actual, inquiry, or constructive notice
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What is horizontal privity for the covenants or ES to run?
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There is “horizontal Privity” between A and B if the promise between was made in connection with a conveyance of the land
(a) e.g. grantor-grantee, landlord-tenant, or mortgagor-mortgagee relationship (b) Very hard to prove because A and B need to have this relationship like A sells property to B |
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What is veritical privity for the covenants or ES to run?
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1. There is “vertical Privity” when the successor succeeded to the other’s entire interest
2. Vertical Privity is easy to have. |
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When may vertical privity be absent?
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A common scenario when it may be absent is when the property interest is acquired through adverse possession
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What is needed for the benefit of a covenant to run?
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(1) Writing
(2) Intent (3) Touch and concern the land (4) Vertical Privity: Horizontal Privity is not required |
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What is an equitable servitude?
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It is a promise that equity will enforce against the successors with injunctive relief
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What do you need for the burden and benefit of an equitable servitude to run?
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(1) Writing: Original promise is in writing
(2) Intent: Parties intended promise would bind successors (3) Touch and concern the land: Promise affects parties as landowners (4) Notice: Successors of burdened land had notice of the promise (5) Horizontal and vertical privities are not required; applies to whomever is occupying the land |
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What is the Implied equitable servitude or general scheme doctrine?
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A court will imply an equitable servitude if a builder or developer has a common scheme or plan for the subdivision, thus enforcing a restriction on the successors.
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What kind of notice does D lot holder have under the general scheme doctrine?
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1. Actual
2. Constructive |
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What is actual notice?
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Literal knowledge
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What kind of constructive notices cab D lot holder have under the general scheme doctrine?
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1. Inquiry
2. Record |
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What is inquiry notice?
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Neighborhood conforms to the common restriction (Constructive)
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What is record notice?
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On the basis of publicly recoded documents (Constructive)
(i) Some courts say: D has record notice of all those other deeds (ii) Better view: D does not have record notice and does not have to look up all the other deeds (a) Less burden on D and title searcher |
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What equitable defense does D lot holder have under a general scheme doctrine?
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(3) Equitable defenses: Changed conditions. The changes must be pervasive, not mere pockets of limited change
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What is an easement?
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Grant of a non-possessory property interest entitles holder some form of use or enjoyment of another’s land, called the Servient Tenement.
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What kind of easements can you have?
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Can be affirmative (right to go onto and do something on Servient land) or negative.
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What are negative easements?
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Holder of easement can prevent Servient landowner from doing something (1-light; 2-air; 3-support, 4- stream-water from artificial flow, 5- scenic view in a minority of states)
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How are negative easements created?
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Negative easements must be created expressly in a writing signed by grantor.
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What is an easement appurtenant?
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Benefits its holder in his physical use or enjoyment of his property.
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How many parcels are involved in an easement appurtenant?
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2 parcels involved (Dominant Tenement (derives benefit) and Servient Tenement (bears burden)
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What is an easement in gross?
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Holder gets a personal or pecuniary advantage that is not related to his use or enjoyment of his land (Only Servient Tenement)
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How is the transferability in an easement appurtenant?
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Benefit transfers automatically with the dominant tenement. Burden also passes automatically with the Servient estate unless it was a Bona Fide Purchaser without knowledge.
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How is the transferability in an easement in gross?
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Not transferable unless for commercial purposes.
Examples: right to place billboard on another’s lot; right to swim or fish in another’s pod; utility poles and power lines on another’s land. |
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How are easements created? (PING)
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1. Prescription
2. Implication 3. Necessity 4. Grant |
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How is an easement formed w/ a prescription?
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An easement may be acquired by satisfying the elements of adverse possession (Continuous Actual Open Notorious Exclusive Hostile)
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How is an easement formed by implication/continuous use?
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: Court will imply an easement if (1) previous use was apparent; and (2) parties expected that the use would survive division because it is reasonably necessary to the dominant lands use and enjoyment.
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How is an easement formed by necessity?
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(landlocked setting) if grantor conveys a portion of land with no way out
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How is an easement formed by a grant?
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An easement to endure for more than one year must be in writing (statute of Frauds). The writing is called a deed of easement.
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How is the scope of an easement determined?
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Determined by the terms of grant or the conditions that determined it.
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Is unilateral expansion allowed with easements?
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No. e.g. A grants B an easement to use A's private road to get to B's parcel, Land 1. If B purchases the adjacent Land 2. B cannot expand the use of the easement to benefit Land 2 unilaterally.
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How is an easement terminated? END CRAMP
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(1) Estoppel:
(2) Necessity: (3) Destruction: (4) Condemnation: (5) Release: (6) Abandonment: (7) Merger: (8) Prescription: |
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How is an easement terminated by an estoppel?
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Servient owner materially changes his position in reasonable reliance on the easement holder’s assurances that the easement will no longer be enforced
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How is an easement terminated by necessity?
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Easement created by necessity expires as soon as the necessity expires (unless created by express grant)
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How is an easement terminated by destruction?
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Destruction of Servient land, other than through willful conduct by Servient owner, terminates the easement.
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How does an easement terminate with a condemnation?
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Condemnation of Servient land through eminent domain
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How does an easement terminate with a release?
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Written release, given by easement holder
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How does an easement terminate with an abadonment?
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Easement holder demonstrates by physical action the intent never to use easement again (mere nonuse or mere words not enough). Must have Physical Action
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How does an easement terminate with a merger?
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When unity of ownership. Servient and Dominant land become vested in same person
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How does an easement terminate with a prescription?
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Servient owner interferes with easement under adverse possession
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What are profits?
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1. Profit entitles its holder to enter the Servient land and take from it the soil or some substance of the soil, such as minerals or timber or oil.
2. Profits follow the rules of easements |
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What is a license?
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Mere privilege to enter another’s land for some delineated purpose.
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Do you need a writing for a license?
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No - it is not under the SOF
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A license is freely __________ unless there is ____________
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Revocable, Detrimental Reliance
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If you don't have an easement then what would you have?
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A license!
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What are the 3 common license scenarios?
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(1) Ticket Holders: Ticket creates freely revocable licenses
(2) Neighbors talking by the fence (oral easement that violates statute of frauds is not an easement, it creates a freely revocable license) (3) Estoppel: Detrimental reliance bars license’s revocability! Look for substantial money or labor or both in reasonable reliance in expectation that the license would continue. |
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What other interests in land exist besides rights in land?
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1. Fixtures
2. Scope & extent of real property 3. Nuisance 4. Eminent Domain |
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What is a fixture?
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Once movable chattel that, by virtue of its annexation to realty, objectively shows the intent to permanently improve the realty
Examples: Heating systems, furnace, custom made storm windows, lighting |
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Can a tenant remove a fixture? Why?
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No, even if he installed it. If he does remove a fixture he would be commiting voluntary waste.
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How do you tell if an installation qualifies as a fixture?
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(1) Express Agreement Controls
(2) In absence of an agreement, Tenant can remove a chattel if Tenant can do so without causing substantial harm to the premises. (3) If removal will cause substantial harm, then in objective judgment if Tenant has shown the intent to install a fixture, then the fixture must stay put. |
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What rights are covered in the scope and extent of real property?
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1. Rights in superjacent, adjacent & subjacent space
2. Rights in common resources of light, air, streams & bodies of water |
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What are the rights in a superjacent space?
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Land possessor has right over the air space above his parcel
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What are the rights in an adjacent space?
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(a) 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
(b) If Plaintiff can show that even if there were no buildings, that the land would have collapsed because of adjacent landowner’s actions, the excavating landowner is strictly liable |
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What are the rights in a subjacent space?
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Land possessor has right to his ground space
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What are a possessor's rights in general?
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The possessor of land has the right to be free from trespass and nuisance.
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What is trespass?
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Invasion of land by tangible physical object.
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How can you remove a trespasser?
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You bring an action for ejectment
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What are the 4 water rights?
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1. Riparian doctrine
2. Prior appropriation doctrine 3. Ground water/percolating water 4. Surface water |
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What is the riparian doctrine?
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Water belongs to those who own the land bordering the water course.
(i) Those people are known as Riparians, and share the right of reasonable use of the water. (ii) One riparian will be liable if his use unreasonably interferes with other’s use. |
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What is the prior appropriation doctrine?
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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.
(i) Rights are determined by priority of beneficial use. First in Time, First in Right. |
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What are the rights of ground/percolating water?
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Surface owner entitled to make reasonable use of ground water; however, the use must not be wasteful
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What are the rights of surface water?
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Rain, springs, or melting snow that hasn’t yet reached its natural basin.
(i) Common Enemy Rule: A landowner can change drainage to combat surface water. Many courts have modified the Common Enemy Rule to prohibit unnecessary harm to other’s land. |
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What is nuisance?
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a) Substantial and unreasonable interference with another’s use and enjoyment of land.
E.g. high-rise creating shadow for a building is not unreasonable interference, strong odor is. |
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There is no nuisance if the problem is the result of Plaintiff’s ___________or ____________.
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hysensitivity or specialized use
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What is eminent domain?
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The power given to state by 5th amendment to take a private property for public use with just compensation
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What type of taking occurs in an eminent domain?
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Taking is either a physical invasion or a regulation that eliminates all viable economic use
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What remedies does an owner have when the state practices its right of eminent domain?
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Remedy is compensating owner for the taking or terminate the regulation and pay owner for damages that occurred while the regulation was in effect
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What issues arise in government takings and aspects of zoning?
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1. Variance
2. Non-conforming use 3. Unconstitutional exactions |
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What is a taking?
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Government may enact statutes to reasonably control land use.
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What happens if there is a variance?
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To deviate from zoning, the party must show undue hardship and that the variance will not be detrimental to surrounding property values.
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What happens when there is non-conforming use?
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A once lawful existing use now deemed nonconforming by a new zoning ordinance cannot be eliminated all at once unless just compensation is paid. Otherwise, it could be deemed an unconstitutional taking.
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What is an exaction?
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Amenities the government seeks in exchange for granting permission to build.
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Why is an exaction inherently suspect?
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It's tantamount to government extortion
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How do exactions pass consitutional scrutiny?
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The exactions must be reasonably related in both nature and scope to the impact of the proposed development.
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What issues are covered in real property Ks?
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1. Relationships
2. Creation & construction 3. Performance 4. Interests before conveyance 5. Relationships after conveyance |
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What are the two kinds of K that are formed in conveyance of real property? re: relationships
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1. K to buy and sell land by conveyance of realty
2. Installment K or Land K |
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What are the elements of a valid K to buy and sell land?
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The land contract:
1. Must be in writing, 2. Signed by the party to be bound; 3. Must describe the land, and 4. Must state some consideration. |
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What is the remedy when the amount of land recited in the land contract is more than the actual size of the parcel?
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The remedy is specific performance with a pro rata reduction in purchase price.
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What is an installment or Land K?
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An agreement under which:
1. the seller agrees to sell an interest in property 2. to the purchaser and 3. the purchaser agrees to pay the purchase price 4. in 5 or more subsequent payments 5. exclusive of the down payment, if any, and 6. the seller retains title to the property 7. as security for the purchaser's obligation under the agreement. |
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What issues arise under creation and construction of real property Ks?
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1. SOF
2. Essential terms 3. Implied conditions & terms |
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How is SOF satisfied in real property Ks?
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1. Land Contract requires writing signed by the party to be bound and must describe land and state some consideration.
2. Statute of Frauds can also be satisfied by part performance: Need 2 of 3 (possession, purchase, improvements) |
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What are the essential terms in a real property K?
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1. The parties
2. The property 3. The purchase price 4. Signatures 5. Legal purpose 6. Competent parties 7. Meeting of the minds 8. Consideration |
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How do you identify parties in a real property K?
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The full name of the parties must be on the contract
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How do you identify the property in a real property K?
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At least the address, but preferably the legal description must be on the contract
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How do you identify the purchase price in a real property K?
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The sales price or an appraisal to be completed at a future date must be on the contract
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What kind of signatures must be on a real property K?
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Must be signed voluntarily by both parties
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What happens if the real property K calls for an illegal action/purpose?
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It is void
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Who are not competent parties for a real property K?
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Mentally impaired persons and minors cannot enter into a contract
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How does a real property K reflect a meetings of the mind?
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Each side must be clear and agree as to the essential details, rights, and obligations of the contract.
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What kind of consideration do we have in real property Ks?
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Consideration is something of value bargained for in exchange of the real estate. Money is the most common form of consideration, but other consideration of value, such as other property in exchange, or a promise to perform is also satisfactory.
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What are the implied conditions or terms in real property Ks?
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1. Time for performance
2. Title |
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What is the time for performance of a real property K?
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If no time for performance is specified in contract reasonable time is allowed
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What kind of titles are required in a real property K?
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Marketable or merchantable title at closing
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What are the burdens related to title defects of a real property?
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(1) Sellers of residential real property have a duty to disclose any facts materially affecting the value or desirability of the property that are known or should be known with diligent observation.
(2) The seller is not liable for latent defects in property which he did not know about and had no reason to believe existed |
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What issues arise with performance of a real propert K?
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1. Fitness & suitability of premises
2. Marketable title 3. Risk of loss |
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What do we need to know regarding fitness and suitability of premises in a land K?
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No implied warranty of habitability or fitness in the land contract (exception: Sale of a new home by a builder-vendor)
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When is real propert unmarketable?
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if vendor owns less than a transferable contract; (try to convey more than you own) or property is burdened.
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What are the 3 circumstances that will render a title unmarketable at closing?
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1. Adverse possession (even the smallest portion)
2. Encumbrances 3. Zoning violations |
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What is the standard that deems property marketable?
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1. Title is free from reasonable doubt, lawsuits and the threat of litigation.
2. The property does not have to be perfect, just no apprehension of its validity in the minds of a reasonable, prudent and intelligent person. e.g. Marketable record of title; has records to back it up |
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When must the seller provide marketable title?
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At closing
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Who bears the risk of loss in a land K?
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Buyer bears risk of loss as soon as the contract is signed unless the contract says otherwise
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What interests exist before conveyance of real property?
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1. Equitable conversions
2. Earnest money deposits |
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What is an equitable conversions in conveyance of real property?
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A purchaser of real property becomes the equitable owner of title to the property at the time he signs a contract binding him to purchase the land at a later date. The seller retains legal title of the property until the date of conveyance
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What is the role of an earnest money deposit in the conveyance of real property?
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an earnest money deposit from the buyer(s) customarily accompanies an offer to buy real estate. The amount can be a small fraction of the total price
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Is an earnest money deposit required before conveyance of real property?
|
No
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Does earnest money make a land K binding?
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No.b) Simply putting down the earnest money does not mean that the binding contract has been entered into. If the contract is binding and the buyer does not fulfill its obligations under the contract, the earnest money is forfeited
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What relationships arise after conveyance of real property?
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1. Condition of premises
2. Title issues |
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How should the condition of premises be?
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According to its description the K
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What if there is a disclaimer of liability regarding the condition of the premises, such as " as is"?
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The disclaimer will not excuse seller from liability from fraud or failure to disclose.
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How does a seller resolve title problems when conveying land?
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1. Seller has until the date set for closing to get title marketable
2. If seller doesn’t have marketable title at date of closing: (1) Buyer may rescind contract and ask for damages |
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What damages can a buyer seek if the seller cannot provide marketable title at closing?
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1. Difference between the market price and the contract price
2. Refund of mortgage payments and deposits |
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What is specific performance in land Ks?
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Equitable remedy when money damages are insufficient. In land Ks, if the buyer is unable to close then he will lose his deposit
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What issues are covered in real property mortgages?
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1. Types of security devices
2. Security relationships 3. Transfers by mortgagor 4. Transfers by mortgagee 5. Discharge & defenses 6. Foreclosure |
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What are the different types of security devices?
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1.Mortgages
2. Land Ks as security devices or deeds 3. Absolute deeds as security or equity mortgage |
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What are mortgages?
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a) Mortgages or a deed of trust is the conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a monetary obligation
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__________ is the mortgagor and _____________ is the mortgagee
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Debtor, Creditor
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What are the various names for a legal mortgage?
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The note, the mortgage deed, a security interest in land, the deed of trust, a sale leaseback
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How is a land K used as a security device or deed?
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The Security Deed gives the Lender a "security interest" in property or real estate, providing the Lender the opportunity to seize the property in the event of default by the Borrower
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What happens when a court decides that the deed was given for security purposes?
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The court will treat the deed as an "equitable" mortgage
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How are absolute deeds used as security devices?
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Instead of executing a legal mortgage, mortgagor gives the creditor the deed to the land he is mortgaging.
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___________ is freely admissible to show parties true intent. re: absolute deeds as security or equitable mortgages
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Parol evidence
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What if the creditor sells the property whose deed was used as a security mortgage?
|
If the creditor sells the property to a third party, third party prevails if he is a Bona Fide Purchaser.
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What remedy does a debtor have if the creditor sells his property to a 3rd party when that property was only given as a security mortgage through an aboslute deed?
|
Debtor’s only option is to sue the creditor for fraud.
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What affects security relationships?
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1. Necessity
2. Nature of obligation 3. Title, lien & intermediate theories 4. Rights & duties prior to foreclosure 5. Rights to redeem & clogging equity of redemption (equitable redemption, clogging equity of redemption, statutory redemption) |
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How does neccesity affect security relationships?
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If a person is not able to get things of necessity such as renting a house, he can purchase the house with a mortgage
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When does the nature of the obligation affect security relationships?
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When a mortgage involves the transfer of an interest in land as security for a loan or other obligation.
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What is the title theory of mortgage?
|
(Minority rule): Title to the security interest rests with the mortgagee
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What is the lien theory of mortage?
|
(Majority): The legal title remains with the mortgagor unless there is foreclosure
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What is the intermediate theory of mortgage?
|
The legal title remains with the mortgagor until there is a default on the mortgage whereupon the title theory applies
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Give an example to explain the affect on relationship due to the various title theories
|
: Paul, John, and George are joint tenants. Suppose now that Paul mortgages his interest in the joint tenancy. Will this sever the joint tenancy as to Paul's interest?
(1) Yes, in the minority of states that follow the title theory of mortgages (2) No, in the majority of states follow the lien theory of mortgages, whereby a joint tenant's execution of a mortgage on his interest will not sever the joint tenancy |
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What are the rights and duties prior to foreclosure?
|
1. Once a mortgage has been created, until foreclosure, debtor mortgagor has title and the right to possession
2. Creditor mortgagee has a lien. That is a right to look to the land if there is a default 3. All parties have the right to transfer their interest in the mortgage (1) The creditor mortgagee can transfer his interest by endorsing the note and delivering it to transferee or (2) By executing a separate document of assignment |
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When do we have equitable redemption? re: security relationships
|
At any time prior to the foreclosure sale, the debtor has the right to redeem the land and free it from the mortgage
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When is the right to equitable redemption cut off? re: security relationships
|
Once a valid foreclosure has taken place, the right to equitable redemption is cut off.
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How can a debtor exercise equitable redemption after the right to it has been cut off? re: security relationships
|
To exercise the right to equitable redemption, the debtor must pay off the missed payment, plus interest and costs
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What is an acceleration clause?
|
An acceleration clause permits the mortgagee to declare the full balance due in the event of default. If the mortgage contains an acceleration clause, the full balance, plus interests and costs, must be paid to redeem.
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Can a debtor or a mortgagor clog equity of redemption?
|
No. They may not waive the right to redeem in the mortgage itself
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What is statutory redemption?
|
Gives the debtor-mortgagor a statutory right to redeem from some fixed period after the foreclose sale.
(1) During the statutory redemption period, the mortgagor will have the right to possession of Blackacre (2) Amount to be paid is the foreclosure sale price |
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What issues do we discuss re: transfers by mortgagor?
|
1. Distinguishing “subject to” and “assuming”
2. Rights and obligations of transferor 3. Application of subrogation and Suretyship principles 4. Due-on-sale clause |
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|
What does it mean to "assume" a mortgage?
|
If Buyer assumes the mortgage, both Owner and Buyer are personally liable when default happens. Buyer is primarily liable, and Owner remains secondarily liable.
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What does it mean to be "subject to" a mortgage?
|
(1) If Buyer takes land “subject to the mortgage”, Buyer assumes no personal liability and only loses land if default happens. Only Owner is personally liable
(2) If recorded, the mortgage remains on the land, and thus if Owner does not pay, the mortgage may be foreclosed |
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What are the rights and obligations of a transferor?
|
The mortgage automatically follows a properly transferred note or a proper assignment
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What is subrogation?
|
Usually applies to mortgagee’s insurance. Insurers have the right to recover money they pay out under a claim where the loss has been caused by a third party, who is usually the mortgagor who did not pay back.
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What is suretyship?
|
1. Surety is the person who guarantees the mortgagee that the mortgagor will pay back.
2.If the mortgagor fails to pay, mortgagee can look to surety for payments |
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What is a due on sale clause?
|
Mortgages employ due-on-sale and due-on-encumbrance clauses to prevent the transfer of mortgages. It means that all loans in a mortgage has to be paid once there is a transfer of mortgage
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What are the issues relating to transfers by the mortgagee?
|
1. How a creditor-mortgagee can transfer his interest
2. Holders in due course 3. Recording statutes |
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How does a creditor-mortgagee transfer his interest?
|
1. The Creditor-Mortgagee can transfer his interest by endorsing note and delivering it to transferee or by executing a separate document of assignment
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Who is a holder in due course? re: transfers bby mortgagee
|
Buyer will be a Holder in Due Course (HDC)
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What are the elements required to be a HDC?
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(1) Note must be negotiable, e.g. made payable to the named mortgagee
(2) Original note must be endorsed, signed by the named mortgagee (3) The original note, not photocopies, must be delivered to the transferee (4) The transferee must take the note in good faith without notice of any illegality (5) The transferee must pay value for the note |
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Do race statutes apply to mortgages and deeds?
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Yes
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What does it mean for the buyer when a mortgage is recorded?
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Mortgages have to be recorded. If it is recorded, a buyer of land is on record notice.
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What are the real discharges and defenses for real property mortgages? MDF Ix4
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HDC is subject to the real defenses that the maker may raise
1. Material Alterations 2. Duress 3. Fraud in the Factum (e.g. lies about the instrument) 4. Incapacity 5. Illegality 6. Infancy 7. Insolvency |
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HDC can take the note free of any ____________ that could have been raised against the original mortgagee
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Personal Defenses
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What are the different personal defenses?
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1. Fraud in the inducement,
2. unconscionability, 3. waiver, 4. estoppel, 5. lack of consideration, etc. |
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HDC may __________ regardless of any such personal defenses
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Foreclose
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How do you foreclose a mortgage?
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The mortgage must foreclose by proper judicial proceeding. At foreclosure, the land is sold- sale proceeds go to satisfying the debt.
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What happens if the proceeds from the foreclosure of a mortgage are less than the amount owed by the debtor?
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Mortgagee can bring a deficiency action against debtor
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What happens if the proceeds from the foreclosure of a mortgage are more than the amount owed by the debtor?
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1. Junior liens (creditors with lesser priority) are paid off in their priority- any remaining surplus goes back to debtor.
2. Senior liens remain on the property. |
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What are the 2 steps for distributing the money from a foreclosure?
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1. First, you must take off the top:
(1) Attorneys’ Fees; (2) Expenses of Foreclosure; (3) Any accrued interest on 1st Bank’s mortgage. 2. Next, the sales proceeds are then used to pay off the mortgages in the order of their priority. (1) *Each claimant is entitled to satisfaction in full before a subordinated lien holder may take. |
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What are the effects of a foreclosure?
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Foreclosure will terminate junior interests to the mortgage being foreclosed but will not affect senior interests.
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How are junior lien holders paid in a foreclosure?
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Junior lien holders will be paid in descending order with the proceeds from the sale
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What happens to junior lien holders in a foreclosure when a senior lien has been claimed?
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Once foreclosure of a superior claim has occurred, with the proceeds distributed appropriately, junior lien holders can no longer look to Blackacre for satisfaction.
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Who are the necessary parties in a foreclosure?
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Those with interests subordinate to the foreclosing party are the necessary party
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What happens if a necessary party is not joined in a foreclosure?
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. If a necessary party is not joined, his mortgage will remain fixed to the land. (Debtor must be joined to get a deficiency judgment).
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How does a foreclosure effect senior interests?
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Foreclosure does not affect any interest senior to the mortgage being foreclosed.
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The buyer at the foreclosure sale takes subject to ________
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Senior interests
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Is buyer of a foreclosed mortgage personally liable to the senior debts?
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No
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What happens if the senior debt is not paid after the foreclosure sale?
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Even though a buyer is not personally liable, when a senior mortgage is not paid, senior creditor will foreclose.
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What issues are discussed regarding the TITLE to land?
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1. Adverse Possession
2. Conveyancing by deed 3. Conveyancing by will 4. Priorities & recording |
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What is adverse possession?
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The process of acquiring the title of other’s property without compensation
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What are the elements of AP? COAH
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1. Continuous: Uninterrupted for given statutory period
2. Open and Notorious: Sort of possession that usual owner would make under the circumstances 3. Actual: Entry cannot be hypothetical or symbolic 4. Hostile: Possessor does not have true owner’s permission to be there. Possessor’s state of mind is irrelevant. |
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What is tacking?
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1. One adverse possessor may tack on his time to a predecessor’s time, so long as there is Privity (e.g. blood, contract, deed, or will).
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No tacking allowed if there is an ___________
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Ouster
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What happens if the true owner of a land that is being AP is disabled?
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Statute of limitations will not run against a true owner who is afflicted by a disability at the inception of Adverse Possession. (e.g. insanity, infancy, imprisonment)
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What are the 3 types of deeds?
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1. Quitclaim deed
2. General warranty deed 3. Statutory special warranty deed |
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What is a quit claim deed?
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1. Contains no covenants.
2. But in the land contract, grantor does contain implied promises (1) Marketable title and (2) Promise not to make any false statements of material facts) at the time of closing |
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What is a general warranty deed?
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Warrants against all defects in title including those attributable to grantor’s predecessors
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What covenants are present in a general warranty deed?
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1. Present covenants
2. Future covenants |
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What is a present covenant?
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A covenant in which the SOL runs at the instant of delivery
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What are the present covenants in a general warranty deed?
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(a) Covenant of seisin (grantor promises he owns estate);
(b) Covenant of right to convey (grantor promises he has power to convey); (c) Covenant against encumbrances (grantor promises that there are no servitudes or liens). |
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What is a future covenant?
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A covenant where the SOL runs when future covenant is breached
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What are the future covenants in a general warranty deed?
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1. Covenant for quite enjoyment
2. Covenant of warranty 3. Covenant for further assurances |
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What is a covenant for quiet enjoyment?
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Grantor promises grantee will not be disturbed in possession by a third party’s lawful claim of title
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What is a covenant of warranty?
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Grantor promises to defend grantee should there be any lawful claims of title asserted by others
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What is a covenant for further assurances?
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Grantor promises to do whatever future acts are reasonably necessary to perfect the title, if it later turns out to be imperfect.
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What is a statutory special warranty deed?
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Grantor makes no representations on behalf of his predecessors in interest.
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What two promises by the grantor are contained a statutory special warranty deed?
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Contains two promises that grantor makes only on behalf of himself:
(1) Promises that he hasn’t conveyed to anyone other than the grantee; and (2) Covenant against Encumbrances. |
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What happens when there is conveyancing by deed?
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Conveyancing by deed passes title from a grantor to a grantee that is lawfully executed and delivered.
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What are the elements of valid conveyance by deed?
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1. Necessity for theh grantee
2. Lawful execution 3. Delivery 4. Land description and boundaries |
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How do you lawfully execute a deed for conveyance?
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1. Writing,
2. signed by grantor (need not recite consideration), 3. with description of the land |
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How do you properly deliver a deed?
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Delivery requirement could be satisfied when Grantor physically or manually transfers the deed to the grantee.
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What is the legal standard for a proper delivery of a deed?
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Standard for delivery is the legal standard and is a test solely of present intent. Did grantor have the present intent to be immediately bound, irrespective of whether or not the deed itself has been literally handed over?
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What is the effect of a rejection of the deed?
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Recipient’s express rejection of the deed defeats delivery.
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What is the effect of oral conditions in a deed?
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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 indeed accomplished. (e.g. “Blackacre is yours only if u survive me”)
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How is a deed delivered through an escrow?
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1. When there is an instruction that makes escrow agent deliver to grantee when the conditions are met.
2. Once conditions are met, title passes automatically to the grantee. |
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How should the land be described in a deed?
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: The description of the land does not have to be perfect. The law requires only an unambiguous description and a good lead.
For example, “All of Johnny’s land.” is good enough but “some of Johnny’s land.” Is not enough |
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Can a grantee bequethe real property to a grantee?
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Yes
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When does conveyance by will fail?
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1. Ademption
2. Exoneration 3. Lapse |
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What is ademption?
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(1) A bequest is adeemed or fails when the specifically bequeathed property is not owned by the testator at death
(2) There is inadequate identification of grantees in the deed. |
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What is exoneration?
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It is not favored by the courts
(1) Paying off the debt on real property left under the will out of the residuary estate. (2) Generally allowed for exoneration of real property only when expressly called for by the testator. |
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What is lapse? re: failure to convey by will
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Where the legatee does not survive the testator or dies before the legacy is payable.
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What issues are raised in priorities and recordings of mortgages?
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1. Purpose of recording
2. Chain of title 3. Transfers by corporations or agents 4. Priorities in mortgages |
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What is the purpose of recordings?
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Recording acts exist to protect Bona Fide Purchasers and Mortgagees (Creditors)
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Who is a BFP? re: recording
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Purchases for value and without notice.
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Are donees, devises, and heirs BFP for the purposes of recording?
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No. Donees, devisees, and heirs are not protected unless the shelter rule applies.
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What are the elements of a BFP? re:recording
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1. Value
2. Notice |
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What type of value does a BFP need to give?
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All that is required is a substantial pecuniary consideration; paying half of fair market value satisfies
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What types of notice should the BFP not have?
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1. Actual Notice: Literal knowledge of existence
2. Inquiry Notice: Buyer has inquiry notice of whatever an examination of the land would show. Buyer has a duty to inspect. If another is in possession, buyer has inquiry notice. Also, if a recorded instrument makes reference to another transaction, buyer is on notice of whatever a reasonable follow up would show. 2. Record Notice: Depends on the Recording Statutes |
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What are the different recording statutes?
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1. Notice Statute
2. Race notice statute |
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What is a notice statute?
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(a) A conveyance of land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.
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How does a BFP prevail in a notice statute jx?
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To prevail, the buyer just has to be the first Bona Fide Purchaser, even if he never recorded.
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What is a race notice statute?
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Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded
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How does a BFP prevail in a race notice jx?
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To prevail, the Buyer must be a Bona Fide Purchaser and win the race to record
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What is a chain of title?
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Sequence of record capable of giving notice to later takers.
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To give record notice to subsequent takers, the deed must be recorded properly within the __________
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Chain of title
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How is the chain of title established?
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In most states, the chain of title is established through a title search of the Grantor-Grantee Index.
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What are the 3 specific problems relating to the chain of title?
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1. Shelter Rule
2. Wild deed 3. Estoppel by deed |
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What is the shelter rule?
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One who takes from a Bona Fide Purchaser will prevail against any entity that the transferor-Bona Fide Purchaser would have prevailed against. If the Bona Fide Purchaser did not have notice, but his transferee did, the transferee “takes shelter” in the status of the Bona Fide Purchaser, even though the transferee is not a Bona Fide Purchaser.
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What is a wild deed?
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A deed, entered on the records, which has a grantor unconnected to the chain of title, incapable of being recorded (nullity). The Bona Fide Purchaser will win in both notice and the race-notice.
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What is estoppel by deed?
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One who conveys realty in which he has no interest is Estopped from denying the validity of the conveyance if he subsequently acquires that interest he had previously transferred.
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An officer of any corporation is ___________ to have the power and authority to transfer the real property of the corporation.
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Presumed
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What are the priorities in mortgages?
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Creditors must record. Until a creditor properly records, he has no priority. 1st in time, 1st in right.
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What is Purchase Money Mortgage?
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(1) Mortgage given to secure a loan that enables the debtor to actually buy that specific now encumbered land
(2) Has super-priority over the parcel of land that the mortgage has a security interest in. |
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What is a subordination?
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Subordination agreements are permissible. By private agreement, a senior creditor may agree to subordinate its priority to a junior creditor.
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