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201 Cards in this Set

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What are the rights of a co-tenant?
each co-tenant is entitled to possess and enjoy the whole
What is wrongful ouster?
When one co-tenant wronfully excludes another co-tenant from possesison of the whole or any part
Is a co-tenant with exclusive possession liable to others for rent?
No, unless there was wrongful ouster
Can a co-tenant lease all or part of the premises to a third party?
Yes, but the other co-tenants must be providecd with their fair share of the rental income
Can a co-tenant acquire title to the whole via adverse possessoin?
No, the hostility element is not met unless there is ouster.
Carrying costs in a co-tenancy
Each co-tenant is responsible for his or her fair share of carrying costs, eg. taxes, mortage payments, based on the undivided share that he holds
Who pays for repairs in a co-tenancy?
A repairing cotenant has a rt to contribution from other cotenants for reasonable and necessary repairs. Payer must notify others of repairs. Cotenants pay according to undivided share each holds
Who pays when a co-tenant makes improvements?
No right to contribution from other cotenants during the life of co-tenancy. At partition, improving cotenant entitled to credit for increase in value. IMprover also bears liability for any decrease in value caused by efforts
What if a co-tenant commits waste?
Other cotenants can bring action for waste during life of cotenancy.
How to partition co-tenancy?
Any tenant can bring action for partition. Follow SPAM rules.
What are the four leasehold/nonfreehold estates?
1. tenancy for years
2. periodic tenancy
3. tenancy at will
4. tenancy at sufferance
Tenancy for years
1. defined
2. notice needed to terminate
1. lease for fixed determined period of time, 1 day, 2 mths, 50 yrs
2. No notice needed to terminate
Requirement for term of years lease greater than one year
to be in writing, otherwise violates statute of frauds
Periodic tenancy
1. defined
2. notice or termination
1. lease continuing for successive or continuous intervals or until L or T give proper notice of termination
2. usually must be written, at least equal to length of period itself. If one year or over, must give 6 mths notice.
How is periodic tenancy created?
1. expressly by conveying to T from week to week or month to month, etc.
2. by implication
a. when land leased without mention of duration, but provision made for rent at set intervals
b. oral term of years in violation of teh statute of frauds creates an implied periodic tenancy measured by way rent is tendered
c. when a T who has wrongfully stayed on past the conclusion of the original lease continues to pay and L continues to accept.
In MA, what kind of leasehold is created when L and T agree orally on a term of years lease for more than one year?
It violates the statute of frauds and becomes a tenancy at will.
On MS, becomes an implied periodic tenancy.
In MA, what leasehold is created when T wrongfully stays on past the conclusion of the original lease and continues to pay and the L continues to accept payment?
Tenancy at will

On MS, implied periodic tenancy arises.
When does a periodic tenancy end?
1. at the conclusion of a natural lease period

2. after notice at least equal to length of period itself is given. If tenancy year to year or greater, 6 mths notice suffices.
L leased blackacre to T on January 1, 2003 for periodic month to month tenancy. T sends written notice of termination on May 15. When is T bound until?
June 30, 2003
1. one month notice reqd
2. ends at conclusoin of natural lease period
Tenancy at will
1. defined
2. how created
3. notice req'd
1. tenancy for no fixed period of duration
2. tenants must expressly agree, otherwise becomes tenancy of implied periodic tenancy
3. Can be terminated by either party at any time, although reasonable demand to vacate is typically reqd by statute.
Tenancy at sufferance
1. defined
2. when/how terminated
1. created when T wrongfully held over past expiration of lease. Must title this some leasehold estate so L can recover rent.
2. terminated when L evicts T or elects to hold T to a new tenancy.
What are a tenant's duties?
1. liability to third parties
2. duty to repair
3. duty to pay rent
4. give appropriate notice
What are a tenant's liabilities to third parties under tort law?
1. T must keep premises in reasonably good repair
2. T is liable for injuries sustained by 3rd parties T invited, even when L expressly promised to make all repairs.
**In MA, any 3rd party lawfully on premises injured by unsafe condition has cause of action against L, provided L had received written notice of the problem
What are a tenant's duties to repair when lease is silent on question?
1. Must maintain premises and make ordinary reprirs
2. Must not commit waste
3. must comply with law of fixtures
What are a tenant's duties under the law of fixtures?
A tenant may not remove a fixture no matter that she installed it. Fixtures pass with ownership of the land. A tenant commits voluntary waste when he removes a fixture. A fixture is a once movable chattel now attached to realty where there was intent to permanently imporve the realty. Intent is determined objectively
Examples of fixtures
Examples: (1) heating systems; (2) customized storm windows; (3) furnace; (4) certain lighting installations
How to determine whether an improvement is a fixture?
Fixture when:
1. express agreement between L and T
2. T showed objective intent to install a fixture. Objective intent found when removal causes substantial harm to premises.
What are a tenant's duties to repair when T expressly covenants in lease to maintain the property in good condition?
1. At common law, T was responsible to any loss to the property including loss attributable to force of nature.
2. Today, under maj. view, T may terminate lease if premises are destroyed w/out T's fault. Off the hook.
What can landlord do if T breaches duty to pay rent and remains on premises?
1. evict through courts and collect rent until tenant vacates
2. continue relationship and sue for rent due
NO SELF HELP
What happens if a landlord engages in self-help?
1. IN MA, liable for treble damages or three mths rent plus attys fees.
2. On MS, liable civilly and criminally.
3. eg change locks, forcibly remove T, remove T's possessions.
L's options when T breaches duty to pay rent but is not in possession?
SIR
1. Surrender- Treat abandonment as offer of surrender that L accepts
2. Ignore abandonment and hold T responsible for unpaid rent as if T still there. Only available in minority of states
3. Relet premises and hold
T liable for any deficiency
How does a tenant surrender?
Demonstrates by words or actions that she wishes to give up the leasehold.
- If unexpired term greater than one year, surrender must be in writing to satisfy statute of frauds.
Landlord's responsibilities when T doesn't finish lease?
Mitigation principle in majority of states requires L to try to relet.
What are a landlord's duties?
1. duty to deliver possession
2. implied covenant of quiet enjoyment
3. implied warranty of habitability
4. No retaliatory eviction
Duty of landlord to deliver possession
1. English rule (majority in US) requires L to put T in actual physcial possession. If holdover T is still in possession, L is in breach.
2. American rule (minority) only requires that L put T in legal possession with the legal rt to be there and L not liable for holdover T.
**Implied covenant of quiet enjoyment
1. defined
2. when applicable
1. T has right to quiet use and enjoyent of premises w/out interference from L
2. Applies to residential and commercial leases.
What breaches implied covenant of quiet enjoyment?
1. Actual wronful eviction
2. Constructive eviction
3. NOT acts of other tenants, except L can't permit nuisance on premise and must control common areas.
Breach of covenant of quiet enjoyment by constructive eviction
** Dido apt. floods (SING)
1. Substantial Interference: attributable to L's actions or failure to act
2. Notice: T must give L notice of problem and L must fail to respond meaningfully
3. Goodbye: T must vacate within a reasonable time after L fails to fix prob.
Implied warranty of habitability
1. standard
2. applicability
1. Premises must be fit for basic human habitation
2. applicable ONLY to residential leases
How to determine whether L violates implied warrantly of habitability?
1. look to local housing code or independent judicial conclusion
2. e.g., no heat in winter, no plumbing, no running water
What can T do when warranty of habitability is breached?
MRcubed
1. move out and terminate lease
2. repair and deduct cost of repairs.
3. reduce or withhold rent until court determines fair rental value. IN MA, use of escrow account not strictly reqd but court may order
4. Remain in possession, pay rent, and affirmatively seek money damages
What counts as retaliatory eviction?
L can't penalize T for reports to housing code violation by raising rent, ending lease, harassing T, taking other reprisals.
-MA presumes retaliation if eviction w/in 6 mths of T's complaint
How can T transfer interest in whole or in part?
1. assignment (in whole)
2. sublease (in part)
Can L prohibit T from assigning or subleasing without prior written approval?
Yes, but if not expressly reserved, L waives right to object to T's transfers.
T1 has 10 mths left in lease. T1 transfers all 10 mths to T2. Name privities and liabilities.
1. L and T2 are in privity of estate, liable to each other for all covenants in original lease that run w/land.
2. L and T1 are in privity of contract and secondarily liable to one another
3. L and T2 are only in privity of contract if T2 expressly assumed all promises in original lease.
Are L and sublessee ever in privity of estate or contract?
No. T2 and T1 are responsible to one another. T1 and L are in privity of estate and contract.
When is a landlord subject to tort liability?
Usually landlord not liable under common law rule of caveat lessee--L under no duty to keep premises safe. (exceptions CLAPS)
--MA has discarded caveat lessee for residential leaseholds. L is responsbilt for unsafe conditions of which L has written notice.
Exceptions to the caveat lessee rule
CLAPS
1. common areas must be maintained by landlord
2. Latent defects rule: L must warn T of hidden defects of which L has knowledge or reason to know
3. Assumption of repairs--once l volunteers to repair, liable for negligent repairs
4. Public use rule--L liable for defects in public space leased that T will not repair bc of nature of defect or length of lease.
5. Short term lease of furnished dwelling--L liable for defect that harms T
Servitudes (family of non-possessory property interests)
1. affirmative easements
2. Negative easements
3. Reason covenants
4. Equitable servitudes
5. Reciprocal negative servitudes
Affirmative easements
1. method of creation
2. parties bound
3. remedy
1. PING-prescription, implication, necessity, grant
2. Easement appurtenant transferred with dominant tenement. Easement in gross for commercial purposes is assignable
3. Injunction or damages
Negative easements
1. method of creation
2. Parties bound
3. remedy
1. Can be created only by writing signed by grantor (LASS-light, air, support, streamwater)
2. Easement appurtenant transferred with dominant tenement. Easement in gross for commercial purposes is assignable
3. injunction or damages
Real covenants
1. method of creation
2. parties bound
3. damages
1. writing signed by grantor
2. Burden runs if WITHN (writing, intent, touch and concern, horizontal and vertical privity, notice).
Benefit runs if WITV (writing, intent, touch and concern, and vertical privity)
3. damages
Equitable servitudes
1. method of creation
2. parties bound
3. damages
1. writing signed by grantor OR implied by General Scheme Doctrine
2. Successors bound if WITNes (writing, intent, touch and concern, notice)
3. injunction
Reciprocal negative servitudes (general scheme doctrine)
1. method of creation
2. parties bound
3. damages
1. residential restriction contained in prior deeds conveyed will bind subsequent grantee if common scheme and unrestricted lot holders had notice
2. Where common scheme, exists, subsequent purchasers with notice are bound
3. injunction
Easements
1. defined and examples
2. types
1. the grant of a non-possessory property interest that entitles its holder to some form of use or enjoyment of another's land, called the servient tenement. E.g. privilege to lay utilitiy lines, right of access.
2. affirmative and negative, appurtenant or in gross
Affirmative v. negative easements
Affirmative easements give the right to go onto and do something on servient land.
Negative easements entitle holder to prevent servient landowner from doing something that would otherwise be permissible. (LASS- light, air, support, streamwater, and scenic view in minority)
How are negative easements created?
Only expressly by writing signed by grantor. No automatic right to negative easements.
Appurtenant easements
1. how to identify
2. who does it bind?
1. - benefits holder in phyiscal use and enjoymt of property
- always 2 parcels of land involved. Dominant tenement derives benefit and servient bears burden.
2. Benefit passes automatically with dominant tenement. Burden passes automatically unless new owner is bona fide purchaser w/out notice of easement.
In gross easements
1. how to identify
2. who does it bind?
1. - confers upon holder only some personal or pecuniary advantage not connected with use/enjymt of land.
2. Does not transfer. Personal to holder. Except does transfer when for commercial purposes.
Examples of easements in gross
- rt to place billboard on servient land
- rt fo fish/swim in other's pond
- rt to lay power lines
How is an affirmative easement created?
PING
1. Prescription
2. Implication
3. Necessity
4. Grant
Requirements for creation of easement by grant
If more than one year, must be in writing that complies w/formal elements of deed, called deed of easement.
Requirements for creation of easement by implication
1. previous use was apparent and
2. parties expected that use would seurvive division bc reasonably necessary to the dominant's land's use and enjoyment
Requirements for creation of easement by necessity
When grantor conveys portion of land with no way out except over some part of grantor's remaining land. MA requires strict necessity.
Requirements for creation of easement by prescription
Satisfy elements of adverse possession (COAH)
1. continuous use for given statutory period
2. open and notorious use
3. actual use
4. hostil use (w/out servient owner's consent)
Can easement owner expand use of easement to new property?
No, unilateral expansion is not allowed.
How can an easement be terminated?
END CRAMP
1. Estoppel 2. Necessity
3. Destruction of servient land
4. condemnation of servient estate
5. Release by easement holder
6. Abandonment by easement holder
7. Merger doctrine
8. Prescription
Terminating an easement:
Estoppel
When servient owner materially changes position in reasonable reliance on the easement holder's assurances that easement will no longer be enforced.
Terminating an easement:
NEcessity
Easements created by necessity expire when necessity ends, unless created by express grant-then persists.
Terminating an easement:
Destruction of servient land
Destruction of servient land, other than through wilfull conduct of servient owner will terminate easement
Terminating an easement:
condemnation of servient estate
Condemnation of servient estate by eminent domain will terminate easement
terminating an easement:
Release
Written release by easement holder to servient owner
Terminating an easement:
Abandonment
Estate holder must demonstrate by physical action the intent never to use the easement again, eg erecting a structure that precludes reaching the servient partial. (mere nonuse or words won't temrinate by abandonmetn)
Terminating an easement:
Merger
easement extinguished when title to easement and title to servient land become vested in same person, even if later separation of title
Termination of easement:
Prescription
Servient owner interferes with easement in accordance with elements of adverse possiession (COAH)
License
1. defined
2. how created
3. how ended
1. mere privilege to enter another's land for some delineated purpose
2. writing not needed to create license
3. Freely revocable at will of licensor unless estoppel applies
Examples of freely revocable licenses
-tickets
-oral easements that violate statute of frauds
When does estoppel bar free revocation of license?
When licensee has invested substantial money, labor or both in reasonable reliance on license's continuation.
Profit
1. defined
2. rules and reqs
1. Profit entitles holder to enter servient land and take the soil or some substance from soil, eg. minerals, timber, oil.
2. shares all rules of covenants
Covenants
1. Defined
2. types
1. Promise to do or not do something related to land.
2. affirmative and negative (restrictive), run w/land or not
Covenants v. easements
Easements are grant of property interest. Covenants are contractual limitation or promise regarding land.
Covenants v. equitable servitudes
In covenants questions, damages is relief.
In equitable servitudes questions, injunction is relief.
First ask: when does the burden of a covenant run with the land?
WITHN:
1. writing-original promise must be in writing
2. Intent-original parties must have intented it to run
3. Touch and concern the land-promise must affect parties' legal relationships as landowners (not home association fees)
4. Horizontal and vertical privity
5. Notice-succeeding owner must have notice of promise when takes
Horizontal privity
1. when relevant?
1. Relevant to quesiton whether burden of covenants runs with land.
-
Horizontal privity
1. defined
2. reqs
1. Nexus between the originally promising parties
2. Requires succession of estate, meaning in grantor-grantee, landlord-tenant, mortgagor-mortgagee relationship
Vertical privity
1. when relevant?
Relevant to question whether burden and benefit of covenant runs with land.
Vertical privity
1. defined
2. reqs
1. Nexus between owner and purchaser of property with covenant.
2. requires non-hostile lexus such as contract, devise, discent. Doesn't apply to adverse possession
When does the benefit of a covenant run with the land?
WITV
1. Writing
2. Intent
3. Touch and concern
4. vertical privity (NOT horizontal privity)
Equitable servitudes
1. defined
2. reqs to bind successors
3. relief
4. types
1. Promise that equity will enforce against successors. 2. WITNES
Writing, Intent, Touch and concern, Notice (NOT Privity)
3. Injunctive relief
4. Equitable servitude/Implied equitable servitude or reciprocal negative servitude
Implied equitable servitude
Reciprocal negative servitude
Common Scheme Doctrine
Court will imply rec.neg. if:
1. subdivider had general scheme of residential devlpmt which included d's lot when sales began and
2. d had notice of promise contained in prior deeds (AIR)
MA and common scheme doctrine
MA doesn't recognize this.
Types of notice that satisfy the notice requirement for creation of reciprocal negaitve covenant
AIR
1. Actual notice, literal knowledge of promises in prior deeds
2. Inquiry notice meaning can see neighborhood conforms to common restrict
3. Record notice meaning in publicly recorded docs
Record notice court split under the requirements for reciprocal negative covenant
Some say notice reqmt satisfied by publicly recorded deeds. Other courts say not satisfied.
-MA holds record notice is valid form of notice but doesn't recognize common scheme doctrine so won't hold d liable to covenant not in his deed.
Equitable defenses to enforcement of equitable servitude
Changed circumstances release from terms of equitable servitude. Must be pervasive change in entire area, not just pockets.
Requirements for adverse possession
COAH
1. continuous
2. open and notorious
3. actual
4. hostile (no consent from owner)
Continuous requirement of adverse possession on MS and in MA
- Means uninterrupted possession for given statutory period
- In MA, statutory period is 20 years and MA strictly construes the continuous requirement. even 3 week break in 20 year period breaks adverse possession.
What is the open and notorious requirement for adverse possession?
sort of possession that usual owner would make under the circumstances
Does the possessors state of mind matter in an adverse possession claim?
No, doesn't matter whether possessor knew that she was encroaching on land of another.
Tacking in adverse possession claims
One adverse possessor may tack onto the predeccessor possessor's time so long as there is privity (non-hostile nexus such as blook, contract, deed or will, NOT ouster)
Can one adversely possess the property of a disabled individual?
The statute of limitations won't run against tru owner afflicted with disability at the inception of teh adverse possession. Disabilities include insanity, infancy, imprisonment.
Two step process in every conveyance of real estate
1. Land contract, endures until closing
2. Closing, where deed becomes operative document
Standard for valid land contract
1. must be in writing and signed by party to be bound.
2. must describe land
3. must state some consideration
What happens when land recited in land contract is more than the actual size of parcel?
Specific performance with a pro rata reduction in purchase price.
When does an oral contract for the sale of land become valid.
Equity gives specific performance when 2/3 of following met:
1. B takes possession
2. B remits all/part purchase price
3. B makes substantial improvements
In a contract for land, who takes the risk of loss?
Risk that land is destroyed between signing of land contract and deed is held by buyer unless contract says otherwise.
In MA, the party in possession of property prior to closing bears the risk of loss.
In equity, what flows from the signing of the land contract?
Buyer is owner of land subject to condition that pay purchase price at closing. Apply equitable conversion that regards as done that which ought to be done.
What does seller promise in every land contract?
1. to provide marketable title at the closing
2. not to make any false statements of material fact
What is marketable title?
title free from reasonable doubt (lawsiuts and threat of litigation)
What circumstances will render title unmarketable?
1. adverse possession of even a portion of the land
2. encumbrances such as servitudes or mortgages, unless waived by buyer
3. Zoning violations
It title considered unmarketable when property is subject to outstanding mortgage at time of closing?
Title is marketable so long as parties understand that closing will result in mortgage being satisfied.
When is the seller of land held accountable for false statements of material fact in the majority of states?
When the seller fails to disclose latent material defects (material lies and ommissions)--Even when contract contains general disclaimer of liability--seller won't be excused for fraud or failing to disclose.
What implied warranties of fitness or habitability is a seller of land liable for?
Generally none under caveat emptor- let the buyer beware. Only held liable under implied warranty of fitness and workmanlike construction in the sale of a newhome by a builder-vendor.
What document controls at the closing of a sale of land?
Deed--it passes legal title from seller to buyer.
How does a deed effectively pass legal title from the seller to the buyer?
Lawfully executed and delivered.
When is a deed lawfully executed?
1. Must be in writing, signed by grantor
2. On MS, must not recite consideration. In MA, must recite consideration.
3. On MS, must include unambiguous desciption and good lead on land. In MA, property must only be "adequately described."
When is a deed lawfully delivered?
- Rule that grantor must physically or manually transfer land to grantee.
- Permissible to use mail, agent, messenter, escrow.
- Effective delivery so long as grantor had present intent to be immediately bound in transfer, whether or not deed itself is literally handed over.
- In MA, recording a lawsful deed properly is conclusive evidence of delivery.
What happens when grantee expressly rejects a deed?
This defeats delivery and deed is not effective.
What happens when a deed is transferred to grantee along with an oral condition?
Why?
1. Oral condition drops out and is void. Deed survives.
2. Bc allowing oral conditions brings potential problems of fraud.
What is delivery of a deed by escrow?
Escrow agent has instructions that deed be delivered once certain conditions are met, then title passes automatically to grantee.
In MA, what does recording a lawful deed properly signify?
Conclusive evidence of delivery.
Three types of deeds
1. on MS
2. in MA
1. quitclaim, general warranty deed, statutory special warranty deed
2. release, quitclaim (different than on MS), general warranty deed
What is:
quitclaim deed on MS
release deed in MA
Deed containing no covenants, not even promising that title to convey. But grantor does promise in land contract to provide marketable title at closing. Seller is off hook if problems manifest after closing.
(shaggy deed-wasn't me!)
What is a general warranty deed?
Deed that warrants against all defects in title, including those attributable to grantor's predecessors.
- Contains six covenants
(mother theresa deed)
Covenants typically contained in a general warranty deed
1. covenant of seisin
2. covenant of rt to convey
3. cov against encumbrances
4. cov for quiet enjyment
5. cov for further assurances
Present covenants (breached at time deed delivered) in a general warranty deed
1. seisin: promises owns estate now conveying
2. right to convey: promises has power to convey
3. against encumbrances: prmises that no servitudes or mortages on land
Future covenants (breached when grantee is disturbed in possession) in a general warranty deed
1. cov for quiet enjoyment- promise that grantee wont be disturbed in possession by a third party's lawful claim of title
2. cov or warranty: promise to defend grantee should there be any lawful claims of title by others
3. cov for future assurances- promise to do future acts reasonably necessary to perfect title if later turns out imperfect
When do statutes of limitations run in breach or:
1. present covenant in general quitclaim deed
2. future covenant in general quitclaim deed
1. at the instant of delivery
2. date of breach (when grantee disturbed in possession)
Statutory special warranty deed
(called quitclaim in MA)
Grantor makes two promises on behalf of self:
1. promises that hasn't conveyed estate to anyone other than grantee
2. promises that estate is free from encumbrances made by grantor
What recording statute does MA have?
Notice jurisdiction
Who do recording acts protect?
1. bona fide purchasers
2. mortagees/creditors
Requirements for bona fide purchaser
(relevant in recording statute questions)
1. must purchase property for substantial pecuniary consideration (even if cheaper than mkt value)
2. must NOT have notice that someone else other than grantor owns property
Who gets property in a notice jurisdiction when when O sells A property and then sells B same property and B is bona fide purchaser?
B gets property, whether or not records first
Who gets property in a race-notice jurisdiction when when O sells A property and then sells B same property and B is bona fide purchaser?
B gets property only if recorded before A.
Who is not protected by recording statutes?
Devisees, donees, heirs are not protected by recording statutes unless the shelter rule applies.
What forms of notice satisfy the notice requirement to be a bona fide purchaser?
Purchaser can't have notice that property owned by someone other than grantor:
(AIR)
1. Actual
2. Inquiry (when exam of land would reveal- eg that someone else in possession of premises)
3. Record--when deed properly recorded within chain of title
What kind of statute:

A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.
Notice statute (as in MA)

--Latest purchaser must only be bona fide purchaser to take title
What kind of statute:
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.
Race-notice statute

--To prevail, latest purchaser must be both bona fide purchaser and first to record
How can purchaser ensure that he keeps title even if grantor sells property again to another?
Record title immediately and properly.
How are deeds properly recorded?
1. recorded within chain of title, referring to that sequenc eof recorded docs capable of giving record notice to later takers.
What is used to conduct a title search on chain of title?
grantor-grantee index
What are the three chain of title problems?
1. Shelter rule
2. Problem of the wild deed
3. Estoppel by deed
Shelter rule
One who takes from bfp will prevail against any entity that bfp would have prevailed against.
When are heirs, devisees, donees covered by recording statutes?
Only when covered by the shelter rule--when take from bfp--then prevail against any entity that bfp would have prevailed against.
Wild deed
When a deed entered on the records (e.g. A to B) has a grantor unconnected to the chain of title (e.g. no record of how A got title), the deed is a wild deed. It is incapable of giving record notic eof its existence and is not recognized by the recording system.
Estoppel by deed
One who conveys realty in which he has no interest is estopped from denying the validity of the conveyance if he subsequenty acquires the interest he had previously transferred.
What is a mortgage?
Defined as conveyance of security interest in land, intended by parties to be collateral for the repayment of a monetary obligation
Elements of a mortgage
1. debt
2. voluntary transfer of a security interest in a debtor's land to secure debt.
Other names for:
1. debtor
2. creditor
1. mortgagor
2. mortgagee
1. What is legal mortgage
2. other names for legal mortgage
1. mortgage in writing to satisfy statute of frauds
2. note, security interest in land, mortgage deed, deed of trust, sale leaseback
Types of mortgage
1. legal mortgage- in writing to satisfy statute of frauds
2. equitable mortgage- when actual deed given as collateral for debt
What happens when creditor in equitable mortgage sells deed?
Parole evidence is freely admissible to show the parties' true intent.
Who gets property when creditor in equitable mortgage sells deed?
Buyer of deed gets property. Debtor can proceed against creditor for fraud and to recover sales proceeds.
What are parties rights in a mortgage?
1. debtor/mortgagor had title and right to possession
2. creditor/mortgagee has a lien-rt to look to land in case of default
Can parties to mortgage transfer their interests?
Yes--mortgage automatically follows a properly transferred note.
How does a creditor-mortgagee transfer his interest?
1. endorsing the note and delivering to transferee, OR
2. executing a separate document of assignment
Holder in due course
Transferee of interest of creditor-mortgagee is eligible to become a holder in due course--meaning that he takes note free of any personal defenses that could have been raised against the original mortgagee.
From what defenses is a holder in due course protected and not protected from?
- Protected from personal defenses including lack of consideration, fraud in the inducement, unconscionability, waiver, estoppel.
Not protected by real defenses (MAD FIFIIII)
What are the real defenses that can prevent a holder in due course from foreclosing on a mortgage?
MADFIFIIII
1. Material alteration
2. Duress
3. Fraud in the INducement
4. Incapacity
5. Illegality
6. Infancy
7. Insolvency
How is a transferee of a mortgage eligible to be a holder in due course?
1. note must be negotiable, made payable to named mortgagee
2. original note must be signed by named mortgagee
3. original note must be delivered to transferee (no photocopy)
4. transferee must take note in good faith without notice of illegality
5. transferee must pay value for note (can't be nominal)
A buyer purchases a mortgaged property without actual notice of mortgage. What result?
Buyer holds property subject to mortgage so long as mortgage was recorded. Same notice requirements and recording statutes apply as to deeds.
Who is liable on debt when debtor-mortgagor sells property and buyer "assumed the mortgage"?
If buyer "assumes the mortgage", both buyer and sellor are personally liable. Seller secondarily liable adn buyer primarily liable
Who is liable on debt when debtor-mortgagor sells property and buyer takes "subject to the mortgage"?
Buyer has no personal liability. Seller is personally liable. Yet, if recorded, the mortgage remains on the land and the mortgage may be foreclosed if the seller doesn't pay.
How does mortgagee-creditor look to the land for satisfaction of debt?
Foreclose by proper judicial proceeding, land sold and sale proceeds go toward satsifying debt.
What if proceeds from foreclosure sale of mortaged property are less than teh amt owed to creditor?
Mortgagee-creditor brings personal action against debtor for a deficiency judgment.
What if proceeds from foreclosure sale of mortaged property are more than teh amt owed to creditor?
1. ATty's fees, expenses of foreclosure, and accrued interest paid first
2. Senior loans are paid off
3. Junior liens are paid off in order of priority.
4. remaining surplus goes bakc to buyer.
Once senior lien forecloses, what happens to junior liens?
Junior liens are paid from leftover funds after senior liens are satisfied. After foreclosure, junior liens can proceed for deficiency judgment if not satisfied but can no longer look to land for satisfaction.
Once a junior lien forecloses, what happens to senior liens?
The senior lien will continue to exist on teh property in the hands of the foreclosure sale buyer. The foreclosure sale buyer is not personally liable to the mortgagee-creditor, but the mortgagee-creditor can foreclose on teh property so the foreclosure sale buyer should pay up the lien to protect his property.
How is priority of mortgagee-creditors determined?
1. Only has priority when records mortgage
2. Priority is determined by first in time, first in right priority
purchase money mortgage
mortgage given to secure a loan that enables the debtor to acquire the encumbered land
What is the benefit of being a purchase money mortgagee?
Gets first priority to the parcel he financed, no matter what. Called purchase money mortgagee's "superpriority."
Subordination agreements between creditors
Permissible private agreements where senior creditor agree to subordinate priority to junior creditor
After-acquired collateral clause
permissible clause by mortgagee taking security interest in all of X's real estate holdings (does not override superpriority of purchase money mortgagees)
equitable redemption
debtor has rt to redeem land and free it of mortgage any time prior to the foreclosure sale.
Acceleration clause
Permits mortgagee to declare full balance due in event of default.
Can a debtor/mortgagor waive the right to redeem in the mortgage itself?
No, this is called clogging the equity of redemption. It is prohibited.
Statutory redemption in MA
Recognized for fixed one year period.
Statutory redemption
right for debtor-mortgagor to redeem for some fixed period after foreclosure sale occurred. Redeem by paying the foreclosure sale price rather than the amt of the original debt
- Mortgagor has right to possession during statutory period.
What is the effect of redemption by mortgagor?
1. nullify foreclosure sale
2. redeeming owner is restored to title
Lateral support in property law
- Excavator liable when excavation causes adjacent landower's property to cave in. Applies when landowner had just improved property.
- Excavator liable only when acted negligently
- Excavator strictly liable only when plaintiff can show that improved land woudl have collapsed even before improvements
--Generally negligence applies
Riparian doctrine
-Water belongs to those who own the land bordering the water course.
- Riparians are liable if unreasonably interferes with others' use
Prior appropriation doctrine re water rights
Water belongs intitially to state, but rt to divert and use it can be acquired by riparian or non-riparian individual. Rts determined by priority of benefitical use. First in time, first in right. Any productive or beneficial use such as agriculture is sufficient to create appropriation right.
Property owner's rt to groundwater
Surface owner entitled to make reasonable use of groundwater so long as not wasteful
Common enemy doctrine re surface waters
Landowner may change drainage to combat flow of drainwater , but can't cause unnecessary harm to another's land
Trespass v. nuisance
-Trespass is invasion of land by tangible physical object (action for ejectment)
- Nuisance is a substantial an dunreasonable interference iwth another's use and enjoyment of land but does not need be tangible, physical.
What are defenses to nuisance?
1. hypersensitive plaintiff
2. only nuisance bc of plaintiff's specialized use of property
Eminent domain
5th am power to take private property for public use in exchange for just compensation
Zoning
gov uses police powers to enact statutes to reasonably control land use
Reqs for variance
1. undue hardship
2. variance won't work detriment to surrounding property values
Unconstitutional exactions
Exactions are amenities that gov seeks in exchange for granting permission to build. Unconstitutional if not reasonably related both in nature and scope to impact of proposed development.
When does article 2A of the UCC apply?
to lease of goods (movable at time of id in contract and fixtures)
When sale of goods on credit
This is when so called lessee will be come owner or has option to purchase and no right to terminate obligation to pay during lease term

So called lessor is actually seller and secured party and this is governed by article 9.

Not governed by Article 2A, even if called a lease.

When doubtful--make protective filing under Art. 9 to get priority status.
Apply lease law OR Article 9 secured credit law
1. Does lessee have right to terminate lease and return goods at any time?
- if yes, then lease

2. If lesee will become owner or has option to purchase OR goods have no remaining value at end of lease
AND no right to terminate lease and return goods at any time,
this is a sale of goods on credit (secured transaction) governed by art. 9
when must lease be in writing?
when total payments are 1000 or more
MA: title or lien theory
Title theory

A mortgage deed passes legal title to the real property of the mortgagee

Mortgagor has equity of redemption, right to have title reinvested in him when performs obligations secured on the mortgage

Mortgagor is real owner for purposes of taxation, attachment, conveyance
Effect of mortgage in mass on joint tenancy
severs it because ma follows title theory of mortgages
Requirements for creating mortgage
1. must be in writing
2. contain name of grantor/mortgagor and signature
3. words of grant or conveyance
4. property description sufficient to identify mortgaged premises
5. must be delivered
effect of future advance clause in mortgage on priority of that mortgagee
priority relates back to time mortgage executed, not to time when money actually advanced
duties of mortgagor
1. not commit waste
2. pay taxes, assessments, etc
3. insure building against fire
Types of mortgages in ma
1. mortgage
2. equitable mortgage
(a) when reqs of mortgage not satisfied but enforced as mortgage bc of intent to create mortgage
3. construction mortgage
(a) specified dollar amounts to be loaned over future period as consturction progresses
4. open ended mortgage
(a) dragnet clause
name of redemption rights of mortgagors before and after foreclosure
1. before foreclosure
- equity of redemption

2. 1yr after foreclosure
- statutory right of redemption
Rights of mortgagor and mortgagee before and after default
BEFORE DEFAULT
1. Mortgagor
(a) right to possess and use
(b) right to collect rents

2. Mortgagee
(a) damages for injuries permanently affecting value of land

AFTER DEFAULT
1. mortgagor
(a) posession, rents, and profits UNLESS mortgagee takes possessoin

2. mortgagee
(a) right to take possession openly and peacably
(b) can foreclose
(c) can collect rents and profits if in possession