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51 Cards in this Set

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zoning
the state can enact statutes to reasonably control the use of land for protection of health, safety, morals, and welfare of its citizens. zoning power is based on the state's police power and is limited by DP and EP clauses of 14th and the "no taking without just compensation" of the 5th. cities and counties can exercise zoning power only if so authorized by a state enabling act.
risk of mortgagee in possession
most mortgagees don't want possession because of the risks of liability: duty to account for rents, duty to manage property prudently, potential tort liability, etc.
cooperatives (co-ops)
title to land and buildings is held by a corporation that leases individual apartments to its shareholders. because of their economic interdependence and because the individual owners are regarded as tenants, a direct restraint on the transfer of an individual interest is valid.
prior appropriation doctrine
individuals acquire rights by ACTUAL USE. appropriative rights are determined by priority of beneficial use. if there is a decrease in flow, priority is given in termes of appropriation. an appropriative right can be lost by adandonment.
denial of ALL economic value
is a taking (unless use was prohibited by nuisance or property law when owner acquired the property.)
redemption in equity
at any time prior to the foreclosure sale, the mortgagor may redeem the property by paying the amount due. if the note or mortgage contains an acceleratin clause, the full balance of the note or mortgage must be paid to redeem. this right can not be waived in the creation of the actual mortgage.
zoning terms
-nonconforming use (a use that exists at the time of a passage of a zoning act that does not conform to the statute ca NOT be eliminated at once.
-special use permit (must e obtained even though zoning is proper for the intended use; often required for hospitals, funural homes, drive-thrus, etc.).
-variance (a departure from the literal restrictions of a zoning ordinance granted by administrative action).
*zoning ordinances are generally invalid if they have no reasonable relation to public welfare, are too restrictive, discriminatory as to a particular parcel, beyond grant of authority, violate DP, or are racually descriminatory.
proceeds of sale
proceeds are applied first to the expenses of the sale, attorney's fees and court costs, then to pay the principal and interest on the foreclosed loan, then to pay off any other junoir interests in the order of their priority, finally to the mortgagor.
unconstitutional exactions
local governments often demand, in exchange for zoning approval of a new prokject, that the landowner give up some land for a public purpose, such as street widening. these demands are unconstitutional under 5th and 14th unless:
-government demands are RATIONALLY CONNECTED to an additional burden that the project will place oin public facilities or rights; and
-the dedication is reasonably related in nature and extent to the impact of the proposed development.
the title theory (mortgagee can habve possession ant any time)
legal title is in the mortgagee until the mortgage has been satisfied or foreclosed. mortgagee iis entitled to possession upon demand at any time.
condominiums
each owner owns the interior of his individual unit plus an undivided interest in the exterior and common areas. since condo ownership is treated as a fee ownership, the ordinary rules on restraint on alienation apply.
purchase money mortgages
a PMM is a mortgage given in exchange for funds used to purchase the property. they are either given to the seller as a part of the purchase price or to a 3d party lender. PMMs have priority over non-PMMs executed at about the same time even if the nonPMM was recorded first. as between 2 PMMs, a seller's mortgage has priority over a 3rd party's. if ther are 3 3rd party PMMs, priority is determined by chrinological order. usually, 2 PMMs have notice of the other's existence; thus, the recording act are no help in determining priority.
remedy
if a regulation constitutes a taking, the government will be required to either compensate the owner for the property or to terminate the regulation and pay the owner damages for the temporary taking.
ground water
(percolating water)
4 doctrines determine rights for water recovered in wells:
-absolute ownership doctrine (owner of overlying land can take all the water she wats for any purpose)
-reasonable use doctrine (take what you want as long as it doesnt harm other owners who have rights in the same water)
-correlative rights doctrine (owners of overlying land own the underground water basin as joint tenants; each is allowed reasonable use)
-appropriative rights doctrine (priority of use determines; not ownership of land).
unconstitutional takings and exactions
a zoning ordinance may so reduce the value of real property that it equals a taking under the 5th ad 14th. if so, the local government must pay damages to landowner equal to the value reduction. if the ordinance regulates activity that would be considered a nuisance under common law principles, it will not be a taking even if it leaces the land with no economic value.
surface waters
a landowner can use surface water (rainfall, seepage, etc.) within her boundaries for any purpose. Questions usually concern liability for changing natural flow by dikes, drains, etc. liability depends on which theory the state follows.
right to excluse - remedies of possessor
possessor of real property has right to exclude others. remedies for invasions include actions for:
-trespass (land invaded by tangible physical object
-private nuisance (invaded by intangibles like odor and noise)
-continuing trespass (repeatedly invaded by trespasser)
-ejectment or unlawful detainer (to remove a trespasser or tenant. can be joined with demand for money damages.)
requirements to be a holder in due course of a note
-note must be negotiable in form (payable to bearer or to the order ot he named payee with a promise to pay a certain amount, and no other promises)
-original note must be endorsed and signed by the named payee
-must be delivered to transferee
transferee must take in good faith and pay for value(no notice that it's overdue, dishonored, subject to a defense by the maker)
denial of NEARLY ALL economic value
if property is left with very little economic value, use a balancing test : social goals of the regulation; diminished value of property; owner's reasonable expectations for use of the property.
3 surface water theories:
naural flor, common enemy, reasonable use
-natural flow (civil law) theory (owners can't alter natural drainage patterns. reasonable changes may be allowed.)
-common enemy theory (owner can take any protective measures to get rid of the water (like dikes). but don't unneccessarily damage other's land.)
-reasonable use theory (balance the utility of the use against the gravity of the harm.
*these apply to redirecting surface water. you can CAPTURE as much as you want (in barrels, etc.)owners have no cause unless the diversionw as malicious.
modification of priority
generally, priority AMONG MORTGAGES follows the chronological order in which they were placed on the property. This may be changed by:
-operation of a recording statute if a prior mortgagee fails to record,
-a subordination agreement between senior and a junior mortgagees,
-a purchase money mortgage,
-modification of a senior mortgage (junior has priority over modification),
-granting of optional future advances by a mortgagee with notice of a junior lien (junior lien has priority over advances).
due on sale clauses
due on sale clauses appear in most modern mortgages. allows lender to demand full payment if mortgagor transfers any interest in the property without the lender's consent.
possession before foreclosure
when a mortgagor defaults on his debt, the mortgagee can foreclose on the mortgage. he may also WISH to take possession of property or receive the property's rents before foreclosure. look at theory of title.
methods of transferring the note
can be transferred by:
-endorsing it and delivering to transferee
-in a separate document of assignment.
only holders woh get note by endorsement and delivery are holders in due course.
restitution
while granting forfeiture, the vendor must refund the purchaser any amount by which his payments have exceeded the vendor's damage.
statutory redemption
about half the states allow mortgagor to redeem the property for some fixed period (6 months) AFTER THE FORECLOSURE SALE has occurred.
priorities of a mortgage
a mortgage's priority is usually determined by the time it was placed on the property. foreclosure destroys all interests junior to the mortgage being foreclosed, but does not affect senior interests.
the intermediate theory
legal title is in the mortgagor until default,and upon default it goes to the mortgagee. mortgagee can demand possession when a default occurs. practically, this acts like the title theory.)
mortgagor consent and abandonment
the mortgagee can take possession if the mortgagor gives consent or if the mortgagor abandons the property.
receiverships
most mortgagees attempt to intercept the rents before foreclosure by getting a receiver appointed by the court to manage the property. courts will appoint receivers for rental properties upon a showing that:
-waste is occurring
-the value of the property is inadequate to secure the debt
-the mortgagor is insolvent.
benefits of holder in due course status
he takes note free of personal defenses of maker but is still subject to real defenses. remember that if possession of note has been transferred by the original mortgagee, no payments made to him will count. holder of note can still demand payment, even if mortgagor had no notice of the transfer.
transfer by mortgagee of note without mortgage
the note can be transferred without the mortgage. mortgage will automatically follow unless mortgagee expressly reserves right to mortgage. no separate written assignment of mortgage is necessary.
water rights concening watercourses (streams, rivers, lakes)
there are 2 major systems for determining allocation of water in watercoursed:
-the riparian doctrine
-the prior application doctrine
election of remedies
the vendor must choose only one remedy (damages or specific performance)and forego all others.
transfer by mortgagee - grantee takes subject to mortgage
if grantee signs an assumpton agreement, he is primarily liable to the lender, and original mortgagor is secondarily liable as a surety. if no assumption agreement is signed, the grantee is not personally liable, and original mortgagor is personally and primarily liable. but if transferee doesn't pay, the loan can be foreclosed and he will lose his interest.
once a grantee has assumed a mortgage, any modification between original mortgagor and grantee will discharge original mortgagor from all liability.
the lien theory of title (mortgagee can not have possession before foreclosure)
the mortgagee is the holder of a security interest only. mortgagor is owner until foreclosure; the mortgagee can not take possession before foreclosure.
theories of title
mortgagee may have right ot take possession before foresclosure, depending on which theory of title the state follows. most follow title or lien theory. 3 theories ane title, lien, and intermediate.
right to lateral support
ownership of land includes right to have the land supported in its NATURAL STATE by adjoining land. a landowner is STRICTLY LIABLE if his excavation caused adjacent land to subside. an adjacent landowner is STRICTLY LIABLE for damage to buildings caused by excavation ONLY IF it's shown that the land would have collapsed in its natural state. otherwise, he's only liable for damage if his excavation was done negligently.
right to subjacent support
an underground occupant of land (a mining company, etc.) must support the surfacce and buildings existing on the date the subjacent estate was created. liability for subsequently constructed buildings requires negligence.
right in airspace
the right to airspace above a parcel is not exclusive, but owner is entitled to freedom from excessive noise.
rights incidental to ownership of land
(natural rights)
an owner of real property has the exclusive right to use and possess the urface, airspace and soil of the property.
treat as a mortgage
this requires a foreclosure sale because contract is treated as a mortgage.
waiver
a vendor's pattern of accepting late payments constitutes a waiver of the right to strict performance. to reinstate, the vendor must send the purchaser a notice of his intention to reinstate strict performance and must allow a reasonable time for the purchaser to make up any late payments.
riparian doctrine
the water belongs to those whoown the land bordering the watercourse. riparian rights attach to all contiguous tracts of land held by the same owner as long as one abuts the water. riparian owners can use water only in connection with the riparian parcel.
equity of redemption
contract purchaser has a grace period to pay the accelerated full balance of the contract and keep the land after defualt.
installment land contracts
most installment contracts provide for forfeiture rather than foreclosure, but courts use the following theories to avoid that harsh result:
-equity of redemption
-restitution
-treat as a mortgage
-waiver
-election of remedies.
natural flow theory of the riparian doctrine
a riparian owner's use resulting in substantial or material dimunution of the water's quantity, quality, or velocity my be enjoined.
deficiancy judgments
where the proceeds are insufficient to satisfy the mortgage debt, the mortgagee retains a personal cause of action against the mortgagor for the deficiency.
reasonable use theory of the riparian doctrine
(most common)all riparians share the right of reasonable use of the water. one's use is not enjoinable unless it substantially interferes with other's uses. to determine reasonable use, courts balance the utility of the owner's use against the gravaity of the harm. 6 helpful factors are: alteration of flow, purpose and extent of use, pollution, destination of water taken.
natural versus artificial use for purposes of riparian doctrine
natural uses (human uses - consumption, gardening) prevail over artificial uses (irrigation, manufacturing).
foreclosure
almost all states require foreclosure by sale, and the property is sold to satisfy the whole debt or part of it. all states allow sheriff's sales; some allow nonjudicial sales under a power of sale (usually for deeds of trust) foreclosure sales are usually conducted at an auction, and the lender is permitted to bid at the sale.