Property Law - Arkansas Distinctions

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Fee Tail

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In Arkansas, an attempt to create a fee tail creates instead a life estate with a remainder in fee simple absolute passing to the life tenant's issue (lineal descendants). Statute has been interpreted to mean that the life tenant's issue have a contingent remainder that becomes vested only upon surviving the life tenant.

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Rule in Shelley's Case

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Arkansas has abolished the Rule in Shelley's Case.

(Reminder: The rule was that you could not create a remainder interest in the grantee's heirs.)

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Doctrine of Worthier Title

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Arkansas has abolished the Doctrine of Worthier Title; thus, it is possible to create a remainder in grantor's heirs.

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Rule Against Perpetuities

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Arkansas follows the common law rule.

(Reminder: Grant will fail unless it must vest, if at all, within 21 years of a life in being at the time of the grant.)

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Creation of Joint Tenancy

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No strawman required - owner may convey to himself and to one or more persons as joint tenants with rights of survivorship.

Unless otherwise expressly stated, grants to two or more persons presumed to be as tenants in common.

Uncertain as to whether a mortgage by one party will sever a joint tenancy.

Words "tenants in the entirety" and "husband and wife" not necessary to create that estate. A conveyance to husband and wife will be construed as tenancy by the entirety.

Estate by the entirety is automatically dissolved upon rendition of a final divorce decree (unless court orders otherwise) and parties are treated as tenants in common.

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Unlawful Detainer

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Person is guilty of unlawful detainer if he:
(1) Willfully and without right holds over after termination of the lease term;
(2) Lawfully obtains possession of the premises and holds it willfully and unlawfully after written demand for surrender of possession by a person with the right to possession;
(3) Fails to pay rent when due, and after three days' written notice to quit and demand for possession by the person entitled thereto, refuses to give up possession;
(4) Fails to maintain the premises in a safe, healthy, or habitable condition; or
(5) Causes or permits the premises to become a common or public nuisance.

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Notice (Unlawful Detainer)

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Upon the filing of a complaint, the tenant is served with a "Notice of Intention to Issue Writ of Possession." If the tenant does not respond within five days (excluding Sundays and legal holidays) following service of summons, the complaint, and notice seeing the writ, the writ will issue. If the tenant files an objection within the five days, a hearing date is set.

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Trial (Unlawful Detainer)

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If there is a trial, the landlord may recover property and money damages. If the property is solely residential, the landlord receives an amount equal to the rental value for each month that the tenant has unlawfully detained the property. If the property is commercial, or mixed residential and commercial, the landlord recovers damages at three times the rental value per month for the time that the tenant has unlawfully detained the property.

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Double Rent Jeopardy

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If a tenant willfully holds over after termination of the term and thirty days from the written notice to vacate has expired, the tenant must pay double the yearly rent for the period of the hold-over. If the tenant gives written notice of intention to quit at a specified time and does not leave at that time, he must pay double the rent reserved during the time he continues in possession of the premises.

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Destruction of the Premises Without Fault (Landlord-Tenant Duties and Liabilities)

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Arkansas continues to follow the common law rule - if a leased building burns down, the tenant is not relieved from his liability under the lease unless the lease so provides.

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Duty to Pay Rent (Landlord-Tenant Duties and Liabilities)

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A tenant who fails to pay rent when due forfeits her right to continued occupancy. If, after 10 days' written notice to vacate, the tenant willfully refuses to leave, she is guilty of a misdemeanor.

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Rent Deposits (Landlord-Tenant Duties and Liabilities)

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A security deposit may not exceed two months' rent. This does not apply to persons who own a building with five or fewer dwelling units (unless they hire someone to collect rent or otherwise manage the property for a fee).

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Tenant Abandons (Landlord-Tenant Duties and Liabilities)

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In Arkansas, if a tenant vacates the premises prior to the expiration of the lease, the law is unclear whether the landlord must seek to mitigate the damages by attempting to relet the property.

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Duty to Repair (Landlord-Tenant Duties and Liabilities)

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Absent a contrary provision in the lease, a landlord is not liable for the repair of a leased structure, i.e., there is no statute modifying the common law rule.

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Implied Warranty of Habitability (Landlord-Tenant Duties and Liabilities)

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There is no implied warranty of habitability in Arkansas.

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Express Grant of Easement

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Arkansas requires that all easements by express grant be evidenced by a signed writing.

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Easement by Necessity

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In Arkansas, absolute necessity is not required for an easement by necessity; reasonable necessity is sufficient. Also, the easement need not arise on the division of a single parcel. When land is situated so as to make it necessary to have a private road from the land to a public road or navigable waterway over another person's land, the county court may appoint "viewers." For viewers to be appointed, the landowner who wants the road must:
(1) Give the other owner 20 days' notice before applying to the court;
(2) Petition the court;
(3) Show a necessity for the private road;
(4) Show that the other owner refuses to allow the road; and
(5) Deposit enough money to pay the costs and expenses of the petition, notice, view, and survey. The viewers examine the proposed route. If they conclude that a private road is necessary and proper, they lay out the road in a manner that produces the lease inconvenience to those through whose land the road will pass. The viewers make a report to the court, describing the route of the road, the land through which it will pass, the owner, and the damages sustained by each owner. If the court then concludes that the road is necessary, it renders an order establishing the road as a private road not exceeding 30 feet in width.

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Running of Statute (Adverse Possession)

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In Arkansas, an action to recover land must be brought within seven years after accrual of the cause of action.

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Open and Notorious Possession (Adverse Possession)

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Unimproved and unenclosed land is deemed to be in possession of the person who pays taxes on the land if he has color of title to the land. To invoke the benefit of this statute, the person (and those under whom he claims) must have paid the taxes for at least seven successive years. Payment of taxes on wild and unimproved land for 15 consecutive years creates a presumption that the person so paying held color of title to the land prior to the first payment of taxes, and that all payments were made under color of title.

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Payment of Property Taxes and Color of Title (Adverse Possession)

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In addition to the other requirements for adverse possession, a person must have either:
(1) held color of title to the property for the seven-year period and have paid ad valorem taxes on the property; or
(2) held color of title to property contiguous to the property being claimed by adverse possession for the seven-year period and have paid ad valorem taxes on that contiguous property for the seven-year period.

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Establishing Color of Title to Property Claimed (Adverse Possession)

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Color of title to the claimed property (not the contiguous property) may be established by the adverse claimant paying the ad valorem taxes for at least seven years for unimproved and unenclosed land, or 15 years for wild and unimproved land, provided that the true owner has not also paid the taxes or made a good faith effort to pay the taxes, which were misapplied by the taxing authority.

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Possession Required When Adverse Possessor Exempt from Property Taxes (Adverse Possession)

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The requirements regarding payment of ad valorem taxes do not apply when the adverse possessor is exempt from payment of such taxes. For such a person to establish adverse possession, she must have:
(1) actual or constructive possession of the claimed property and held color of title to it for at least seven years; or
(2) actual or constructive possession of the claimed property and held color of title to the contiguous property for at least seven years.

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Effect of Disabilities (Adverse Possession)

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Arkansas recognizes two disabilities:
(1) Minority (under 18 years of age); and
(2) Lack of mental capacity.

Arkansas grants the owner seven years after the adverse possession began or three years after the disability is removed, whichever is longer, in which to bring suit.

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Risk of Loss (Land Sale Contracts)

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Arkansas has not adopted the Uniform Vendor and Purchaser Risk Act; thus, the risk of loss is on the buyer.

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Seller's Liability for Defects on Property - New Construction (Land Sale Contracts)

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There is an implied warranty by a vendor-builder that a house is constructed in good workmanlike manner and is fit for human habitation. Arkansas also extends this warrant for a reasonable period of time to subsequent buyers, provided:
(1) the defect is latent (not discoverable on reasonable inspection); and
(2) there has been no substantial change or alteration in the condition of teh building since the original sale from the builder.

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Attestation and Acknowledgment (Wills)

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Although the statute appears to require that a deed be executed or acknowledged in the presence of two witnesses, deeds in Arkansas are customarily acknowledged before a notary public or other official authorized to take oaths. If a deed is so duly acknowledged, witnesses are unnecessary.

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Fraudulent Conveyances (Wills)

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Arkansas has adopted the Uniform Fraudulent Transfer Act [Ark. Code Ann. SS4-59-201 et seq.].

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Statutory Special Warranty Deed

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The words "grant, bargain, and sell" constitute an express covenant to the grantee, her heirs, and assigns:
(1) that the grantor has an indefeasible estate in fee simple, free from encumbrances incurred by the grantor; and
(2) for quiet enjoyment against the grantor, her heirs, and assigns, from the claims and demands of all other persons, unless expressly limited in the deed. The covenant of warranty against encumbrances doesn't cover taxes or assessments of an improvement district. The lien for such assessment or tax runs with the land and is assumed by the grantee, unless expressly provided otherwise.

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Estoppel by Deed and After-Acquired Title

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In addition to the equitable doctrine of estoppel by deed, Arkansas has enacted an after-acquired title statute, which provides that if a person purports to convey an interest in land that he does not have, his subsequent acquisition of the estate will result in the estate passing immediately to the grantee. The conveyance is as valid as if the estate had been owned by the grantor at the time of conveyance.

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Arkansas Recording Statute

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Although the Arkansas recording statute reads exactly like a notice statute, it has been consistently interpreted to be a race-notice statute.

(Reminder: Race-notice statute - To prevail, a buyer must buy without notice of prior conveyances AND record first.)

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Arkansas Recording Statute for Mortgages

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Arkansas has a different recording statute for mortgages. In Arkansas, an unrecorded mortgage is not effective against a subsequent purchaser, even if the subsequent purchaser has actual notice of the mortgage. Moreover, as between conflicting mortgages, the one filed first has priority.

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Transfer by Mortgagee - Transfer of Mortgage Without Note

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Arkansas law provides that a transfer of the mortgage without the accompanying note is a nullity and void.

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Foreclosure

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In a mortgage foreclosure, a sale of the mortgaged property must be ordered in all cases. In addition to judicial foreclosure sale, Arkansas grants a power of sale to mortgage companies, banks, and savings and loans. This is known as "statutory foreclosure." The statute expressly states that it does not create an implied right of redemption. The statute implies a power of sale in every properly recorded mortgage of property located in Arkansas. To exercise the power of sale:
(1) The mortgage must be recorded;
(2) There must be a default by the mortgagor in the performance of an obligation secured by the mortgage or with respect to a mortgage provision that authorizes sale upon default;
(3) The mortgagee must record a duly acknowledged notice of default and intention to sell;
(4) There must have been no action instituted to recover the debt; and
(5) At least 60 days must have elapsed since the recording of notice of default and intention to sell.

The notice must be mailed within 30 days of recording of the notice to: the mortgagor; a successor in interest to the mortgagor whose interest is of a record or of which the mortgagee has actual notice; junior lienholders; and any person requesting notice as provided by statute. The mortgagee must publish the notice in a newspaper once a week for four consecutive weeks prior to the sale date, with final publication being no more than 10 days before the sale. At the sale itself, no bid may be accepted that is less than two-thirds of the indebtedness due at the date of sale.

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Statutory Redemption

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Arkansas gives the mortgagor a right to redeem within one year from the date of the sale if the property was sold under a court order, i.e., if it was a judicial foreclosure. The mortgagor must pay the amount for which the property was sold, plus interest, and the cost of foreclosure and sale. The mortgagor may waive this right of redemption in the mortgage. This right to redeem does not apply to nonjudicial sales made under the power of sale (statutory foreclosure).

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Deficiency Judgments

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An action for a deficiency judgment may be brought within one year after the sale. Judgment is limited to the lesser of:
(1) the amount by which the indebtedness due at the date of sale, plus interest, costs, and fees, exceeds the amount for which the property was sold.