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67 Cards in this Set
- Front
- Back
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What is the Title Theory of Mortgages?
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-Title is in the mortgagee until the mortgage has been satisfied or foreclosed
-Mortgagee is entitled to possession on demand at any time |
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What is the priority of payment between multiple creditors when a mortgage is foreclosed?
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-First to pay the interest that was foreclosed
-Then to pay creditors junior to the foreclosed loan -Then to pay the mortgagor -Senior mortgages are not paid -The Buyer in the foreclosure sale takes subject to the senior interest |
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How do Fixtures apply in the L/T context?
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-Absent agreement, T is deemed to lack the intent to permanently improve the property
-She ay remove annexed chattels as long as there is no damage to the property or chattel |
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What is Constructive Adverse Possession?
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-Claimant goes into actual possession of some portion of the property under the COLOR OF TITLE
-She is deemed in adverse possession of the entire property described in the instrument, even to portions that are not actually occupied |
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What is the effect of condemnation on a leasehold estate?
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-If the entire leasehold is taken by eminent domain, T's liability is extinguished
--The lessee is entitled to compensation -If the taking is temporary or partial, T is not discharged from the rent obligation, but is entitled to just compensation |
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What is an Easement by Necessity?
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-One where (i) the owner sells a portion of his tract and (ii) by this division deprives the Buyer's access to a public road or utility line
--The owner of the serivent estate would then have an easement by necessity |
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What is a Tenancy by the Entirety?
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-A special joint tenancy held by a husband and wife
-It carries the right of survivorship -It may only be terminated by death, divorce, mutual agreement, or execution by a joint creditor of both spouses |
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When is a deed Delivered?
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-Delivery refers to the Grantor's intention to make a deed presently effective even if possession is postponed
-Delivery may be satisfied by: --Manual delivery --Notarized acknowledgement --Recording --Anything else showing the Grantor's intent |
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When do Easement Appurtenants pass with the land?
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-Easement appurtenant passes with the transfer of the BENEFITTED LAND regardless of whether it is mentioned in the conveyance
-The BURDEN of the easement also passes automatically with the servient estate unless the new owner is a BFP with no actual or constructive notice |
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What effect does Disability have on a claim for Adverse Possession?
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-SOL does not begin to run if the true owner was under some disability when the cause of action first accrued
-Only the disability of the owner existing at the time the cause of action arose is considered |
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What is Inquiry Notice in the recording context?
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-BFPs are charged with whatever knowledge a reasonable inquiry would have revealed, even if she has not made one
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How does the SOF apply to land sale Ks?
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-SOF is generally applicable
-EXCEPTION: PART PERFORMANCE that unequivocally proves the existence of a K will remove the SOF requirement |
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How is an implied Easement by Necessity created?
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-When a Landowner sells a portion of his tract and by this division deprives one lot of access to a public road or utility line
-The owner of the servient parcel has the right to locate the Easement |
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What is an Easement Implied from Existing Use (Quasi-Easement)?
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-Easement may be implied if:
1. Prior to the division of a single tract 2. An APPARENT and CONTINUOUS use exists on the servient part 3. that is REASONABLY NECESSARY for the enjoyment of the dominant part; and 4. Parties INTENDED the use to continue after the division of the land |
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Who is considered a BFP under the recording acts?
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-Purchasers for value
-Mortgagees for value -Transferees from BFPs -Installment Purchasers to the extent of payments made |
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Who is NOT considered a BFP under the recording acts?
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-Donees, heirs, or devisees
-Judgment creditors |
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What is Marketable Title?
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-Every land sale K has an implied warranty that the Seller will provide marketable title
-It need not be Perfect Title, but must be reasonably free of questions that present an unreasonable risk of litigation -Examples of unmarketable title include -Defects in Record Chain of Title --Adverse Possession --Future Interests of Unborn/Unascertained persons --Encmbrances --Zoning restriction violations |
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What Remedies are available to a Buyer if the Seller fails to provide Marketable Title?
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-Buyer must notify Seller and give him reasonable time to cure
-If Seller fails to cure, Buyer's remedies include: --Recission --Specific Performance w/abatement --Quiet title suit -Once closing occurs, however, the K and the deed merge and Seller's liability on the impled contractual warranty ends |
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What are the Landlord's remedies against a hold-over T?
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-Landlord may evict or bind T to a new periodic tenancy
-Commercial Ts may be held to a new year-year tenancy if the original lease was 1+ yrs. -Residential Ts are generally only geld to a month-month tenancy |
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What are the terms of a holdover tenancy?
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-Generally the terms of the expired T govern the new one
-Exception: If L notifies T before the lease expires that occupancy after the termination will be at increased rent, T, by holding over is held to acquiesced to the new terms |
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Who is responsible for Repairs of an easement?
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-The easement holder
-If both parties use the easement, however, the costs will be apportioned between them |
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What is a Tenancy in Common?
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-Concurrent estate with no right of survivorship.
-Ts may hold different interests, but each is entitled to possession of the whole -Grants to multiple parties are presumed to take as Tenants in Common |
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What is Marketable Title?
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-Every land K contains an implied warranty that Seller will provide marketable title at closing
-It need not be Perfect Title, but must be free of questions that present an unreasonable risk of litigation |
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What could render Title Unmarketable?
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-Defects in the chain of title-adverse possession and future unascertained interests
-Encumbrances -Zoning Restrictions |
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What remedies are available if Seller delivers unmarketable title?
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-Buyer must notify Seller and give reasonable time to cure
-If Seller fails to cure, Buyer is entitled to: --Recission --Damages --Specific Performance w/abatement --Quiet title suit -However, if closing occurs, the K and the deed merge, and Seller's liability on the implied contract of marketability ends |
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What are the 3 types of Deeds and the covenants included therein?
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1. General Warranty
2. Special Warranty (in NY Bargain & Sale) 3. Quitclaim |
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What Covenants are included in the Special Warranty (Bargain & Sale) Deed?
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-"Grant" means Special Warranty Deed. Includes covenants for:
1. Encumbrances 2. Grantor has not previously conveyed the estate |
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Walk through the RAP analysis.
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1. Identify the Suspect Future Interest
2. What has to happen for the future interest to vest? 3. Locate a measuring life--this may be anyone named in the conveyance and determine whether that person's life is relevant to the condition's occurence 4. Will you know with certainty in 21 yrs. whether the suspect interest has vested? |
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What is the Rule of Convenience?
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-In the absence of contrary intent, a class closes whenever some member of the class may call for distribution of her share
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What is required for a subsequent BFP to have record notice?
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-A subsequent purchaser will be held to have record notice only if the deed in question is recorded in the CHAIN OF TITLE--in a manner that a searcher could reasonably find it.
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What are defenses to the enforcement of Equitable Servitudes?
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1. Unclean hands
2. Acquiescence 3. Estoppel--a reasonable person would believe that the servitude had been abandoned 4. Laches 5. Neighborhood transformation |
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Which parties are liable when a Grantor transfers subject to a mortgage?
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-Absent contrary agreement, Grantee takes subject to the mortgage
-Liability depends on whether the mortgage is assumed: 1. If the Grantee assumes the mortgage, he becomes primarily liable. The Grantor remains secondarily liable as a Surety -If there is no assumption, the Grantor is primarily and personally liable, but the Mortgagee may still foreclose if the loan defaults, thereby wiping out Grantee's investment |
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When may a landowner that has defaulted Redeem the property?
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-Redemption in Equity: allows redemption at any time prior to the foreclosure sale by paying the amount due. This is NON-WAIVABLE.
-Statutory Redemption: Some states permit redemption up to 6 mos. following the foreclosure sale |
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Is Seller liable for the conveying defective property?
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-Generally, contracts for sale and deeds of real prop. carry no implied warranty of quality or fitness for a particular use.
-Exception: Courts recognize a warranty of fitness for new houses built by Seller |
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What are the Common RAP violations?
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-Executory Interest following Defeasible Fee
-Age contingency beyond 21 in an open class -Fertile Octogenerian -Unborn Widow -Options and rights of first refusal |
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What is the Unborn Widow RAP scenario?
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-Because a widow is not determined until death, it may turn out to be someone who was not in being at the time of the disposition
-Example: --O conveys to A for life, then to A's widow for life, then to A's surviving issue --The gift to A's widow is invalid since A's widow might be a spouse who was not in being when her interest was created |
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What is the priority of distribution when a mortgagee has sold real prop. through a foreclosure sale?
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1. Foreclosing creditor
2. Creditors junior to the foreclosing creditor in order of priority 3. Residual to the landowner -All Senior creditors' interests remain on the land and the Buyer takes subject to them |
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How does an easement by necessity terminate?
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-Once the necessity ends
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How does the RAP apply to options?
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-Generally an option to purchase or right of first refusal that is structured to be exercised beyond the perpetutities period is void
-Exception: The RAP does not apply to options to purchase held by a current lessee |
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When will courts enforce Negative Equitable Servitudes?
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1. Common scheme for development; AND
2. Notice of the covenants--either actual, implied, or record |
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When would an easement not mentioned in a land sale contract not render title unmarketable?
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-Generally mortgages, liens, restrictive covenants, easements and SIGNIFICANT encroachments render title unmarketable
-Exception: A beneficial easement if visible or know to Buyer does not impair marketability |
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When can states regulate things that impact interstate commerce?
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1.Non-discriminatory
2. No undue burden--balance state interest against the burden on commerce |
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What are the types of Recording Statutes?
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1. Notice: Subsequent BFP always prevails, even if he has not yet recorded
2. Race: First Grantee to record prevails, even if he is not BFP 3. Race/Notice: First BFP that also records prevails |
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What future interests are exempt from RAP?
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-Charity to Charity exception
-Options to purchase held by a current tenant |
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How can a Grantee re-convey title to the original Grantor?
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-Only by drawing up a new deed and re-delivering
-Destruction or merely returning it to the Grantor are insufficient |
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Result of shareholder agreements to eliminate corporate formalities:
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- NO piercing the veil EVEN IF they fail to observe formalities
- likely possibility of beneficial tax treatment (S-Corp Status) |
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What is a Fee Simple Determinable (NY: Fee on Limitation)?
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-Example: "To A, so long as..."
-Duration: As long as condition is met, then AUTOMATICALLY to Grantor -Future Interest in Grantor: Possibility of Reverter |
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What is a Fee Simple Subject to Condition Subsequent (NY: Fee on Condition)?
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-Example: "To A, but if..."
-Duration: Until happening of named event AND re-entry by Grantor -Future Interest: Right of Entry |
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What is the CL Destruction of Contingent Remainders?
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-Rule: Contingent remainders are destroyed if not vested at the time of termination of the preceding estate
-Example: "To A for life, remainder in A's children who reach 21" -Result: If A has no children who are at least 21 at time of her death, property reverts to Grantor -Modern Result (NY Rule): --Property reverts to Grantor but --A's children have a springing executory interest |
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What is the CL Rule in Shelley's Case?
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-Rule: A remainder in a life-tenant Grantee's heirs is deemed to be in the life tenant herself
-Example: "To A for life, then to A's heirs" -Result: A has a fee simple absolute -Modern (NY) Result: A's heirs have a contingent remainder |
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What is the CL Doctrine of Worthier Title?
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-Rule: A remainder in Grantor's heirs is ineffective, so Grantor has a reversion
-Example: "To A for life, then to my heirs" -Result: A has a Life estate; Grantor has a reversion -Modern Result: Grantor's heirs have a contingent remainder |
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What are the types of Restraints on Alienation?
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1. Disabling: attempted transfers are ineffective
2. Forfeiture: attempts to transfer forfeit the interest 3. Promissory: attempted transfer breaches covenant |
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What types of restraints on alienation are valid?
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-Generally any restriction on the transferability of a legal interest is void.
-Exceptions: 1. Forfeiture and promissory restraints on life estates 2. Reasonable restrictions in commercial transactions 3. Rights of first refusal 4. Restrictions on assignment and sublease |
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What are the 4 Unities required to create a Joint Tenancy?
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1. Identical interests
2. From the same instrument 3. At the same time 4. With an equal right to possess |
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What is an Affirmative Easement?
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-Definition: the right to do something on another's land
-Methods of Creation: PING --Prescription: as by Adverse Possession; COAH --Implication: at the time land was severed, a use of one part existed from which it may be inferred that an easement permitting its continuation was intended --Necessity: division of an existing tract deprives one lot of means of access out --Grant: signed writing -Parties bound: --Easement appurtentent is transferred automatically with the dominant tenement --Easement in gross for commercial purposes is assignable -Remedies: injunction or damages |
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What is a Negative Easement?
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-Definition: prevents landowner from doing something that would ordinarily be permissible
-Categories: LASS --Light --Air --Support --Streamwater -Creation: signed writing by Grantor -Remedy: Injunction or damages |
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What is a Real Covenant?
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-Definition: a contractual promise to use one's land in a particular manner
-Creation: signed writing by Grantor -Parties Bound: --Burden of promise runs to successors WITHVN: ---Writing ---Intent of original parties ---Touch & Concern ---Horizontal privity: nexus between the original promising parties ---Vertical privity ---Notice --Benefit runs to successors WITV: ---All the above, except Horizontal privity and Notice |
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What is an Equitable Servitude?
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-Definition: Promise to use (or not use) land in a particular manner
-Creation: Signed writing, unless implied by a common scheme -Parties bound: Successors bound if WITN: --Writing --Intent of original parties --Touch/concern --Notice -Remedy: INJUNCTION only |
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What is a Negative Reciprocal Servitude?
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-Definition: agreement to refrain from using land in a particular manner
-Creation: --In a subdivision , residential restriction contained in prior deeds conveyed by common Grantor will bind subsequent Grantees whose deeds do not contain the restriction if: ---At the start of the subdivision, Grantor had a common scheme; AND ---Unrestricted lot holders had notice -Parties Bound: where common scheme exists, subsequent purchasers with notice are bound -Remedy: INJUNCTION |
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How does Abandonment terminate an Easement?
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-Easement is extinguished when its holder demonstrates by PHYSICAL ACTION an intent to PERMANENTLY abandon the easement
-Merely expressing a wish to abandon is insufficient |
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Where is the proper boundary when a deed lists a watercourse boundary?
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-Presumptively 1/2 on each side of the waterway
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When is possession considered "Actual" for an Adverse Possession claim?
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-the kind of use the true owner would make of the parcel, so as to give notice of the trespass and the extent of the adverse possessor's claim
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What is the implied lease term when T holds over?
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-Residential: new monthly periodic tenancy
-Commercial: --Original lease 1- yrs: monthly periodic tenancy --Original lease 1+ yrs.: yearly periodic tenancy |
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What priority is given to Purchase Money Mortgages?
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-Subsequent PMMs have priority over PRIOR PMMs, even if the former were recorded first
-Any subsequent lien or mortgage may defeat PMM priority via the recording acts -Seller's PMM has priority over a 3d party's |
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Which Restraints on Alienation are valid?
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1. Fee Simple: Only for a limited time and reasonable purpose
2. Life Estates: promissory and forfeiture restraints 3. Future Interests: forfeiture restraints 4. Commercial Transactions: reasonable restrictions 5. Rights of Refusal 6. Leaseholds: restrictions on assignment and sublease |
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What are Seller's Liabilities for defective property?
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-Generally Ks of sale and deeds of real prop. carry no implied warranties of quality or fitness for a purpose.
-Seller will nonetheless b liable for: 1. Warranty of fitness or quality in the sale of new house by builder 2. Negligence of original builder--even if there is no privity w/subsequent vendees 3. Misrepresentation 4. Active Concealment 5. Failure to disclose |
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When are Disclaimers effective in land sale Ks?
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-General disclaimers are insufficient
-Specific disclaimers that identify the types of defects are likely to be upheld |
