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67 Cards in this Set

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What is the doctrine of constructive adverse possession?
X enters property on color of title to 100 acres, but actually only possessed 85 acres.

If someone goes on property under a color of title to a larger tract, but actually only possesses a part of the larger unit, constructive adverse possession can give title to the rest of the property.

Two additional requirements:
1. amount possessed must bear reasonable relation to the whole
2. property must be undivided/unitary.
Does leasing land to someone else qualify for adverse possession purposes?
Can you adversely possess against co-tenants?
Yes, but you have to exclude them.
When does the adverse possession clock begin to tick against the holder of a future interest?
When their interest becomes possessory.
Can you get a life estate by adverse possession?
Yes, it's pur autre vie, to the life of the person who holds the life estate.
When does the adverse possession clock begin ticking on a fee simple determinable?
When the condition is broken.
When does the clock start to run on a fee simple on a condition subsequent?
It won't start to run until grantor exercises the right of entry.
What is the rule for disabilities (jail, insanity, being a minor) and adverse possession?
If the owner is under a disability at the time the adverse possession begins, the adverse possession clock does not start to run until O is free of the disability.

If disability arises while the adverse possession is going on, the clock keeps ticking.
O was a minor when the adverse possession began, and just before turning 18, the owner became insane.

Does adverse possession clock start ticking after he turns 18, even though he's insane?
Yes. There is no tacking of disabilities.
What do you want to remember about marketability of land acquired by adverse possession?
It's not marketable. It may be good title, but the court has to pronounce it good first.
What is needed to satisfy statute of frauds for property?
1. Description of property
2. Names of parties
3. Price
4. Signed by party who is being charged.
What is needed for the doctrine of partial performance (which satisfied statute of frauds)?
1. Oral contract must be certain and clear (no ambiguities) and
2. Acts of part performance must clearly prove up a contract.

This usually means that the claimant is in possession AND EITHER
a.) paying full purchase price (or close) OR
b.) erecting improvements.

Possession and another act can suffice.
Who has the risk of loss between the time of the contract signing and the closing?
The buyer: equitable conversion has taken place.
What must seller provide buyer, as per title?
1. Proof of title (abstract of copy of all deeds recorded in chain of title);
2. Title free of encumbrances (no easements, restrictive covenants, no mortgages, no options, etc., that are not mentioned in the contract).
3. Valid legal title on the day of closing.
What does an encumbrance on the title do?
It makes it unmarketable.
Is zoning an encumbrance?
No, unless the property is in violation of zoning ordinance.
Let's say a building encroaches a half inch over the neighbor's line. Does this make it unmarketable?
No, because it is minor and does not present a significant threat of litigation.
Is a mortgage on the property an encumbrance?
No, if it is to be satisfied out of the proceeds of the sale.
Is violation of housing or building codes an encumbrance?
What are the buyer's remedies if seller's title is unmarketable?
Buyer must notify seller and give seller reasonable time to cure, even if that postpones closing.

If the problem is not corrected, buyer has three remedies:
1. Rescission
2. Damages
3. Specific performance -- buyer takes what seller can give and price gets lowered to cover the defect.
What happens if the buyer goes to closing and accepts the deed without the problems being cured?
There is no recourse against the seller based on the contract (any actions must then be based on what is in the deed).
Is time of the essence in real estate contracts?
Generally, it's not, unless the contract says it is or the facts make it clear that it is.

If time is NOT of the essence, then performance must be tendered within a REASONABLE time after the date for closing set in the contract (2 months late is okay).

But, if the contract does have a time of the essence clause, and it is violated, the party who failed to perform on time can no longer enforce the contract.
What are the remedies for breach of sales contract?
1. Money damages -- the difference between the contract price and the value of the land on the day of the breach. (Buyer's deposit can be forfeited as liquidated damages so long as it is not more than 10% of the sales price).

2. Specific performance is always available to both buyer and seller.
What is the general rule as per land not fit for ordinary purposes and buyer wants to rescind? Exceptions?
Caveat emptor!

1. Seller must disclose serious defects that the seller KNOWS OF and that are not obvious to buyer. (seller cannot conceal!)
2. There is an implied warranty of fitness or merchantability for new homes sold by a builder-seller.
What happens once a deed is accepted?
The contract merges into the deed and is destroyed, and all contract provisions (e.g., implied warranty of merchantable title) are lost UNLESS included in the title OR contract specifies that they survive.
What is required for passage of legal title from seller to buyer?
1. Deed (like the contract itself) is subject to the statute of frauds. Seller must sign the deed.
2. Description of the land must be specific enough to identify the property. By the way, a land description by metes and bounds always controls over any other description.
What is needed for delivery of a deed?
It doesn't always mean visible transfer. The legal question is solely a question of intent to pass title. If facts show intent to pass title, the mere safeguarding of the paper by grantor does not mean lack of delivery.

Recording a deed raises presumption of delivery, even if grantee never sees the deed and knows nothing about it.

In showing intent of grantor re. delivery, can use any parole evidence.

If grantor dies and still has deed, there is a rebuttable presumption of no delivery.
What interests: "Sarge to Arnold," but with a verbal representation that "of course this won't become effective until you marry my daughter Maria"?
Sarge: Nothing
Arnold: fee simple
Is consideration needed for a deed?
What is a Quit Claim deed?
Grantee gets whatever grantor owns and grantor promises nothing.
What is in a general warranty deed?
1. Present covenants
a. Covenant of seisin/covenant of the right to convey: seller has title and possession and can validly convey both
b. Covenant against encumbrances: no easements, no restrictive covenants, no liens, etc.
2. Future covenants (runs with the land and can be enforced by all subsequent purchasers):
a. Covenant for quiet enjoyment and covenant of warranty: seller will protect buyer against anyone who later shows up and claims title;
b. Covenant of future assurance: the "mop up" covenant. If seller forgot to do something to pass valid title, Seller will do whatever necessary.
If there is a breach of warranty, what are the damages?
Damages are limited to purchase price RECEIVED BY WARRANTOR, plus incidental damages.
What is estoppel by deed?
If A deeds property to B that A does not own, and then later A does acquire title, then B will get title because grantor gave an implied covenant that title would be transferred to grantee.

BUT, if grantor transfers to a BFP after getting title, then the original grantee LOSES.
What happens if a deed is given to a dead person?
It's invalid, although the dead person's estate may force the sale.
Do recording acts protect mortgagees?
Do recording acts protect subsequent judgment creditors?
Henry sold Puritan Farms to Asa, who did not record. It is a notice statute. Lindsey, a judgment creditor of Henry, later filed a lien against Henry's property.

Who wins?
Asa. Recording acts do not protect judgment creditors.
T sold Blackacre to W for $50,000; W did not record.

Then T sold Blackacre to P for $50,000. Patrick knew nothing of earlier sale. Patrick didn't record either.

Then W recorded. Then P recorded.

In a notice statute state, who wins?
What about a race-notice statute?

Is a subsequent purchaser who buys the estate for an absurdly low price a BFP?
Yes. If it's in the absence of an explicit claim of fraud, any consideration that is out of pocket is enough to be value.

It doesn't matter if it's not market price. Though one dollar is not enough.
Are heirs, donees or devisees BFPs?
NO!!!! And they cannot defeat the claim of someone who has a prior conveyance!!!
What is the Shelter Rule?
If a BFP takes it, and then the people who buy from him are not BFPs (they knew about the original transaction, etc.), they are "sheltered" by the BFP.
What are the three types of notice, for recording statute purposes?
1. Actual notice
2. Record notice, IN THE CHAIN OF TITLE (if it's recorded outside the chain of title, does not count);
3. Inquiry notice
a. Where a reading of the deeds on record discloses an unrecorded transaction, subsequent purchaser has to check it out.
b. Where subsequent purchaser fails to go out and examine the land and an examination would have shown someone under a prior unrecorded right, then they have notice. [remember the horse manure case]
What if grantor owes money to grantee and gives the grantee a deed that is absolute on its face. Separately the grantee promises to give the land back when the debt is paid. There is no mention of the word 'mortgage' anywhere, and the deed is absolute.

What is it?
An equitable mortgage, and will be treated by the courts as a mortgage.
What if M sells his farm to X but leases it back, with an option to repurchase at the end of the lease? The lease payments are what you'd expect a mortgage to be, and the repurchase price is nominal.

What is that?
Courts treat this like a mortgage, too.
If a deed of trust is given to a third party until the loan is paid off, and the loan isn't paid, what can the trustee do?
Can either go to court for a judicial sale, or can sell it on his own.
What is equity of redemption?
At any time up to the foreclosure sale, debtor can redeem the property. If the mortgage has an acceleration clause, debtor has to pay off the entire balance.
WHat if the right of redemption was waived in the mortgage or deed of trust?
It can't be, at the time of the original mortgage. It can be later on, though.

An attempt to waive the right of redemption is known as clogging the equity of redemption and is prohibited.
Is equity of redemption the same thing as the statutory right of redemption?
No! The latter is a statutory device allowing mortgagors to get the property back AFTER the foreclosure sale.
Can foreclosure sales be private?
NO! They MUST be by public auction.
If there are multiple mortgages, which takes priority?
Usually it's first in time, first in right; but if some mortgages aren't recorded, you follow the recording statutes.
Let's say O gives a mortgage to Bank A.

Then he gives a mortgage to Bank B.

Then he increases the mortgage to Bank A.

Who has priority?
Bank A has priority for the amount of the first mortgage; then B's mortgage; then A's second amount.
Which mortgages get wiped out by a foreclosure?
JUNIOR mortgages.
Are junior mortgagees necessary parties?
Yes, because they have the right to pay off any mortgage being foreclosed in order to keep their interests from being wiped out.

If they are not brought in, their interests are not wiped out.
What if an easement or lease is junior to the senior mortgage that is being foreclosed on?
They get wiped out too.
Let's say there's a forfeiture clause that says if debtor misses a payment, seller can cancel the contract, keep all the money and get the property back.

If O sells his property to B, and there's a mortgage on the property that B assumes, is O still liable on the note?

Unless grantee specifically assumes the mortgage, grantee is not PERSONALLY liable on it, but the mortgage still has to be paid or it'll be foreclosed.
What if the person assuming the mortgage changes its terms?
Then, and only then, will the original mortgagor be discharged from liability.
Let's say O gives a Mortgage to Bank A. Bank A transfers the mortgage to Bank B but doesn't tell O.

O pays Bank A, then Bank B asks O for the money. Is Bank B bound by the payment O made to Bank A?
No. A holder in due course is not bound by payments to an old mortgagee, even if he didn't know of the transfer.
Due On Sale Clauses: "If mortgagor transfers without the mortgagee's consent, teh full amount of the loan is immediately due."

How long do you have under Article 9 to make a fixture filing?
20 days.
What are the two ways in which land must be supported in its present state?
1. Lateral support. Strict liability if your neighbors mess up your land (through excavation, etc.). They are also strictly liable for damage to improvements IF the weight of the improvements didn't cause the collapse -- the land would have collapsed anyway.
2. Subjacent support. Holder of mineral rights is strictly liable for failure to support the surface of the land, as well as any improvements EXISTING WHEN MINERAL RIGHTS WERE SEVERED FROM FEE SIMPLE.
What if excavator was negligent?
Can sue under negligence, even for later-built improvements.
What are riparian rights?
Refers to those whose property borders on a lake or a stream.
What's the riparian rights rule?
Owners can use all the water they need for domestic purposes.

For non-domestic, has to be reasonable use.
Prior appropriation (some states out West). How does this work?
First in time takes.
What are rights to percolating water?
Landowner is entitled to reasonable use.
What is the rule for surface water?
Two competing approaches:
1. Natural flow: you can use reasonable steps to deal with flood water.
2. Common enemy: you can do ANYTHING with floodwater, reasonable or not.