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193 Cards in this Set

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Fee Simple Absolute
Runs forever and is fully alienable. Courts presume fee simple unless languages shows a clear intent to create another estate. Cannot put a direct restraint on alienation ("If Y tries to sell, then to X" - ignore this restraint)
Life Estate
Only measured by life. Can arise by implication ("to A and B after death of my wife") Wife has implied life estate. Measuring life can be anyone - doesn't have to be the life estate holder. You can put restrictions on alienation.
To A for the life of B
If A dies first, it goes to A's estate until B dies.
Waste
All life tenant can do is maintain the estate, and that means continuing the normal use of the land in its present condition. If they do more or less, they are guilty of waste
Voluntary Waste
any affirmative action beyond the right of maintenance causing harm to the premises (selling oil, coal, rock). Anything besides normal use of land.
Permissive Waste
Life tenant has failed to maintain. Three things tenant must do to avoid permissive waste:
1. Repair (ordinary repair, not replacemnet)
2. Taxes
3. Interest on any mortgage
*Life tenant doesn't have to insure property
Limitation on Life Tenant's liability
Limited to the amount of income received or reasonable rental value of the land.
Ameliorative Waste
Special type of voluntary waste where affirmative act increases value of property. Rule: If changed conditions have made property worthless in current use, life tenant can tear it down without liability.
Class Gifts
(unnamed persons - "A's Children")
*Members of a class who predecease the Testator are eliminated adn do not recover
*Once class is established it stays open to accommodate anyone who later fits in
*Rule of Convenience
Rule of Convenience
Class closes when any one of the class is entitled to a distribution. When testator dies, and there is a member enttitled to distribution, class closes.
5 Future Interests
1. Reversion
2. Possibility of Reverter
3. Right of Interest
*these three are retained by Grantor (when grantor transfers less than a fee simple)
4. Remainder
5. Executory Interest
*these are given to a grantee
Reversion
Interest kept by grantor when grantor gives less than the durational estate grantor had. "O to A for life". A has life estate. O has a reversion.
*reversions are not subject to RAP
*reversions can be transferred.
O to A for life: then A grants property to B for life.
*O has reversion
*B has life estate measured by both A and B's life
*A has a reversion for life
Possibility of Reverter
Whenever Grantor gives a fee simple determinable, grantor keeps POR (to A so long as no liquor is consumed on premises) Fee simple determinable ends right when condition happens. O gets POR.
Possibility of Reverter v. Reversion
Reversion - Grantor gives away less than a fee simple
POR - Grantor gives a fee simple with a condition.
Key phrases for Possiblity of Reverter
1. so long as
2. while
3. during
4. until
Right of Entry (Power of Termination
When Grantor gives a fee simple on a condition subsequent, Grantor keeps a right of entry. Title doesn't go back automatically. O has to go back and claim a right once condition is violated.
*distinguished from POR
Language
1. provided, however
Fee Simple Absolute
Runs forever and is fully alienable. Courts presume fee simple unless languages shows a clear intent to create another estate. Cannot put a direct restraint on alienation ("If Y tries to sell, then to X" - ignore this restraint)
Life Estate
Only measured by life. Can arise by implication ("to A and B after death of my wife") Wife has implied life estate. Measuring life can be anyone - doesn't have to be the life estate holder. You can put restrictions on alienation.
To A for the life of B
If A dies first, it goes to A's estate until B dies.
Waste
All life tenant can do is maintain the estate, and that means continuing the normal use of the land in its present condition. If they do more or less, they are guilty of waste
Voluntary Waste
any affirmative action beyond the right of maintenance causing harm to the premises (selling oil, coal, rock). Anything besides normal use of land.
Permissive Waste
Life tenant has failed to maintain. Three things tenant must do to avoid permissive waste:
1. Repair (ordinary repair, not replacemnet)
2. Taxes
3. Interest on any mortgage
*Life tenant doesn't have to insure property
Limitation on Life Tenant's liability
Limited to the amount of income received or reasonable rental value of the land.
Ameliorative Waste
Special type of voluntary waste where affirmative act increases value of property. Rule: If changed conditions have made property worthless in current use, life tenant can tear it down without liability.
Class Gifts
(unnamed persons - "A's Children")
*Members of a class who predecease the Testator are eliminated adn do not recover
*Once class is established it stays open to accommodate anyone who later fits in
*Rule of Convenience
Rule of Convenience
Class closes when any one of the class is entitled to a distribution. When testator dies, and there is a member enttitled to distribution, class closes.
5 Future Interests
1. Reversion
2. Possibility of Reverter
3. Right of Interest
*these three are retained by Grantor (when grantor transfers less than a fee simple)
4. Remainder
5. Executory Interest
*these are given to a grantee
Reversion
Interest kept by grantor when grantor gives less than the durational estate grantor had. "O to A for life". A has life estate. O has a reversion.
*reversions are not subject to RAP
*reversions can be transferred.
O to A for life: then A grants property to B for life.
*O has reversion
*B has life estate measured by both A and B's life
*A has a reversion for life
Possibility of Reverter
Whenever Grantor gives a fee simple determinable, grantor keeps POR (to A so long as no liquor is consumed on premises) Fee simple determinable ends right when condition happens. O gets POR.
Possibility of Reverter v. Reversion
Reversion - Grantor gives away less than a fee simple
POR - Grantor gives a fee simple with a condition.
Language for Right of Entry
1. provided, however
2. but if
3. on condition that
Right of Entry, generally
Grantor cannot transfer it inter vivos
* never subject to RAP
* "for the purpose of" - this language has no effect of title. Fee simple absolute.
Remainder
Vested or Contingent. They will become possessory, if at all, only upon the natural expiration of the estates coming before them. They NEVER effect the estates that come before them
Vested Remainder
Nothing stands in the way of its becoming possessory on the expiration of the estate that comes before it (no conditions)
Vested Remainder Subject to Open
Where the remainder is to a class whose members are not fully known, class stays open
*also called vested remainder subject to partial divestment
Contingent Remainder
Something has to happen or be known before possessory
1. Condition must be satisfied
2. Grantee not in existence
3. Identity of exact taker is unknown (cannot name)
Executory Interest
Operates to cut short the estate that comes before it; If a future interest granted is not a remainder, it MUST be an executory interest
Example of Executory Interest
"O to A for life, then to B and his heirs; but if at B's death B is not survived by issue, then to C and her heirs."
B - vested remainder subject to executory interest
C - executory interest
Executory Interest and Waste
Holder of EI cannot sue life tenant for waste.
Look at Punctuation
"O to A for life, then to B, BUT if . . ."
*B has contingent remainder
"O to A for life, then IF . . to B
*B has executory interest
Shifting EI
Operates by taking title from one grantee and giving to another grantee
Springing EI
Takes title from grantor and gives to grantee
Rule Against Perpetuities (Generally)
No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creatioin of the interest
*if there is any chance that an interest might vest outside of a life-in-being plus 21 years, that interest is void
Estates RAP applies to
1. Contingent Remainders
2. Executory Interests
3. Vested Remainders Subject to Open
Hypo Question for RAP
Could everyone alive at the time of the grant die, and 21 years pass, before the interest might vest? If so, it's void.
O to A and her heirs; provided, however, that if the premises shalle ver cease to be used for residential purposes, then B ahas the right to reenter and retake the premises
A - Fee simple subject to an executory interest (Fee simple that might be cut short)
B - Executory interest
*Violates RAP, so A just has a fee simple and O has nothing. B's interest is void.
Options and Rights of First Refusals
Violate RAP if they could be exercised outside the time period.
Charity to Charity
RAP never violated if gift over is from one charity to another. BOTH GRANTEES must be charities.
RAP and Class Gifts
1. Age contingency in open class. Watch for facts where class is open and gift is contingent on class member reaching a certain age.
2. Unborn Spouse - watch for a gift over following a widow or widower's life estate, wehre the gift cannot vest until widow dies.
O to A for life, then to A's widow for life, then to A's children who are then living
A: Life Estate
A's Widow: Contingent Remainder (will vest when A dies and we know who the widow is)
A's children then living: RAP voids it. At time of grant, A's widow may not have been born yet. AND there is a condition on the children; they must be alive when widow dies.
O to A for life, then to A's widow for life, then to A's children
Doesn't violate RAP cause the interest will vest when each child is born (vested remainder subject to open).
Vesting
Not possession; When nothing is in the way of the person getting possession. No condition keeping them from getting possession.
Transfer by Will
Look at situation as of time of testator's death. Differnet than deed (effective date is date of creation)
Joint Tenancies
1. Right of survivorship (doesn't go to deceased's heirs)
2. Right to partition (one tenant can ask that that the property is partitioned, and get his share)
Creation of Joint Tenancies
1. Time
2. Title
3. Interest
4. Possession
Time
all interests must have vested at the same time
Title
It must be the same instrument
Interest
All must take the same kind and same amount of interest
Possession
All must have identical rights of possession
Language Needed for Joint Tenancies
Must clearly make intention know. Court will construe to make tenancy in common. (To . . . "jointly" - not good enough)
*must say "as joint tenants with right of survivorship" or "in joint tenancy, with right of survivorship"
Destruction of Joint Tenancy
1. Partition
2. Severance - occers whenever any one of the four unities is disturbed (involuntary destruction)
Severance - Look for:
1. A conveyance by one joint tenant. Buyer has tenancy in common.
2. Mortgage in title theory state. Lien theory (lien attaches to the title) Title theory (title transfers w/ mortgage - KS)
3. Existence of Contract of Sale. Severance occurs when contract is signed (doctrine of equitable conversion)
4. Creditor's sale of interest in Joint Tenancy (no severance til actual judicial sale)
Tenancies-In-Common
1. Right to Partition
2. No right of survivorship
*all tenants in common must have equal rights of possession
Rights and Duties of Co-Tenants
1. Possession: each tenant has right to possess all property
2. Accountability: one tenant does not have to share his profits
3. Contribution: right of one-cotenant to force others to pay their share
Exceptions to Accountability
Must share profits when:
1. Ouster: keeping co-tenant off property or claiming a right of exclusive possession
2. Agreement to share
3. Lease by co-tenant to 3rd party.
4. Depletion of natural resources.
When to co-tenant have to contribute?
1. No contribution for improvements.
2. Must contribute for necessary repairs.
3. Must contribute to mortgage payment if they sign
4. Must contribute to taxes
Non-Freehold Estates
1. Tenancy for years
2. Periodic Tenancy
3. Tenancy at will
4. Tenancy at sufferance
Tenancy for Years
Specified Time (DOESN'T have to be in years)
*Statute of Frauds - any tenancy for years over one year must be in writing.
Periodic Tenancy
ongoing, repetitive estate until one party gives valid notice (month to month)
Created by: express agreement, implication or operation of law
Periodic Tenancy by Implication
Lease is silent as to duration. Measured by rent payment
Periodic Tenancy by Operation of Law
1. Oral Lease violating statute of frauds.
2. Hold-Over case (tenant stays after expiration of lease and landlord accepts rent)
Termination of Periodic Tenancy
Give notice
1. Must give enough time for notice to be effective
2. Must give right effective day of termination.** can be only on the last day of a period.
Tenancy at Will
Either party can terminate anytime, without notice. Other ways to terminate:
1. Death of either party
2. Waste by tenant
3. Assignment by tenant
4. Transfer of title by landlord
5. Lease by landlord
Tenancy at Sufferance
Bare possession of a holdover Tenant. At landlords sole option, he can
1. Hold T as wrongdoing trespasser and sue
2. Impose new periodic tenancy on T.
L imposes new periodic tenancy
Residential - month-to-month
Commercial - more than year (year to year); less than year (rent period)
*if L tells T of higher rent before experation of lease, and T holds over, L can impose the new periodic tenany with the higher rent.
Lease is silent
1. Pay rent
2. Not commit waste
Lease to Repair and Maintain
Tenant is liable for all damage to property (even ordinary wear and tear unless specifically excluded) Exception: tenant can terminate lease if premises destroyed w/out tenant's fault
Landlord Remedies
L can sue for damages and throw T out if failure to pay rent.
*If tenant just abandons lease, either treat as offer of surrender and T's liability ceases or mitigate T's damages (rerent and hold liable for difference)
Landlord Duties
1. Give T possession
2. Deliver residential premies in a habitual condition
3. Implied covenant of quiet enjoyment
Habitable Condition
Implied in lease. If breach, Tenant has two options
1. Move out and end lease
2. Stay and sue for damages
Breach of quiet enjoyment
1. Total eviction of tenant
2. Partial eviction (changes lock on basement door): T doesn't have to pay rent until L give all prop back. If partial eviction by someone else, rent is apportioned
3. Constructive Eviction: L fails to provide a service L is supposed to provide
For Tenant to be Excused of Constructive Conviction
1. Landlord has to do it.
2. Substantial interferance
3. Abandonment of premises w/in reasonable time
Two ways to transfer
1. Assignment: tenant transfers everything left in lease
2. Sublease: tenant transfers a portion of lease period, holding some time back.
Assignment where Landlord sues Tenant
A lease is both a conveyance and a contract. Look for privity of estate and privity of contract
*Tenant is liable if either one exists.
Privity of Estate
Between present landlord and present tenant
Privity of Contract
Agreement between parties or assignee expressly assumes the obligations under the lease
Landlord leased to T1. Later, T1 assigned to T2. Later, T2 assigned to T3
*After T1 assigned to T2, L sues T1 for rent. L wins cause T1 has privity of Contract.
*Against T2 before assign. to T3. L wins cause privity of estate.
*Against T2 after assign to T3. T2 wins cause no privity
Other covenants besides rent
Run with the land if they touch and concern the land
*touch and concern - makes land more valuable or useful
Tenant sues Landlord
Same rules if landlord transfers. Sucessor landlord is liable if there is privity of contract or estate
Sublesee liablity
no liablity. no privity
Non-Assignment and Non-Sublease Clause
Valid and enforceable even though a restraint on alientaion. Makes transfer voidable at option of L.
If L gives permission (even once) waives the clause for all time, unless L states otherwise at time of giving permission.
*acceptance of rent from assignee is permission
Eminent Domain
State takes property uner a lease by its power of condemnation
Tenant's Responsibility with Eminant Domain
Partial Taking: T has to pay full rent. (they will share in condemnation award)
Full Taking: extinguishes lease and is excused of paying rent. Shares in award if fair rental value exceeds rent due.
Landlord tort liability
Common law: no duty
Five Exceptions:
1. Latent Defects
2. Short term lease of furnished dwelling (even if L has no knowledge)
3. Common areas under landlords control
4. Negligent Repairs
5. Public Use exception
Latent Defect
Tenant doesn't know about it and reasonable person wouldn't. Landlord has duty to disclose if he knows or has reason to know.
Public Use exception
1. L must know or should know of major defects
2. Must or should know T won't fix the defect
3. Must or should know public will be using the premesis.
Tenant's Tort Liablity
T's liablity to 3rd parties:
T is always liable to 3rd person invitees for negligent failure to correct dangerous conditions on the premises, regardess of wherther L may be contractually liable or not
KANSAS - 4 things you cannot hae in lease.
1. Cannot waive statutory rights or remedys
2. No confessions of judgment
3. Cannot have agreements to pay atty fees
4. No exculpatory or indemnity clauses.
*Courts can refuse to enforce any lease provision that is unconscionable.
Fixture fact situations
1. Landowner has installed appliance on property, then contracts to sell property but doesn't mention appliance. Can seller keep it
2. Tenant has installed same chattel. Can tenant detach and take at end of the lease
*answer to both: if it has become a fixture, it cannot be removed.
What is a fixture?
Look at intent of person installing. Look at 4 facts
1. Degree of attachment
2. General custom with the item (what usually happens)3. Degree of harm to premises upon removal (tenants are favored)
4. Trade fixtures (used in trade or business; these aren't fixtures - can be removed)
When is fixture removed?
Tenant must detach before end of lease
Owner must remove before closing.
Easement Appurtenant
Easement directly benefits the use and enjoyment of a specific.
Servient and dominent estate
Easement in gross
Where the is no dominant estate. Ex: utility easement.
Creation of Easement
1. Express - express grant of easement to someone else, or reservation of easement when land is sold.
2.Easement by Implication - previous use by common owner that is continuous, apparent, & reasonably necessary. OR implied by necessity.
3. Easement by Prescription
Express Easement
Interest in land and must comply with statute of frauds and with all deed formalities.
Easement by Prescription
Four Requirements:
1. Use is adverse (trespass)
2. Use is continuous and uninterupted for statutory period. (seasonal use is ok if reasonable). Common law period - 20 years (KS - 15)
3. Use is either visible and notorious or w/ owner's knowledge.
4. Use is w/o owner's permission.
Transfer of Easements (benefit)
Appurtenant: goes automatically w/ dominant estate. Cannot be transferred separately form dominant estate.
In Gross: If commercial, can always be transferred. If personal, cannot be transferred
Transferring Burden of Easement
Easements are always binding on subsequent holders of servient estates, provided they had notice.
Use of Easements
1. Terms of easement control
2. If silent, then:
*presumed that easement is perpetual (never ends)
*use presumed is that of reasonable development of dominant estate(what would likely have been contemplated by parties at time easement was created)
Repair of Easements
Holder of easement must repair and can always go on servient estate to do so.
*Must make reasonable restoration of the surface.
*must make necessary repairs; servient estate has no obligation of repair
Termination of Easements
Six situations:
1.Unity of ownership (Merger)
2.Valid release (must comply with statute of frauds)
3.Abandonment by physical act (more than nonuse)
4.Termination by estoppel
5.Termination by prescription - owner of servient must stop use and keep it stopped for statutory period
6. End of necessity
Termination by estoppel
1. representation of relinquishment
2. Reliance by holder of servient estate.
Licenses
Limited privilegee to use land in possession of licensor. Not a property interest; contract right; revocable at will of licensor.
Tickets
Always licenses. Can sue for breach of contract
Irrevocable license
(easement by estoppel)
License plus money spent on proerty furthering the license. Any easement attempted and fails cause of statute of frauds (its oral), its a license. If $ is then spent, it's irrevocable.
Profits
gives teh right to go onto land and take a natural resource. implied easement to enter the land.
Restrictive Covenants
Gives the right to restrict someone else's use of their land.
1. Covenants at law (when enforcing at law). Plaintiff wants money damages
2. Equitable servitude (when enforcing in equity). Plaintiff wants injunction
Requirements to enforce covenant at law
1. Intent that it run with the land.
2. Notice to person whom enfocement is sought
3. Covenant must touch and concern the land (includes covenants not to compete)
4. Privity: conveyance of the property from one party to another
Horizontal privity
always refers to the original parties to the covenant.
*must have conveyance of the property between original parties.
Vertical Privity
refers to those who subequently attain the property suject to the ovenant and the original perty from whom they got the property.
What privity is needed?
Find successor in interest
1. If defendant, then someone is wanting the burden of cov. to run to that successor: NEED horizontal and vertical privity for BURDEN to run
2. If plaintff, then that person is trying to have benefit of cov. run to them. - only need vertical privity for BENEFIT to run
Enforcement of Equitable Servitude
Don't need privity. You have to have:
1. Intent that restriction be enforceable
2. Notice to subsequent purchaser
3. Must touch and concern land
Mutual Rights of Enforcement in Subdivision
(Reciprocal Negative Servitudes)
Two requirements:
1. Intent to create a servitude on all the land in the subdivision (found in common building plan; all single family homes with deeds restricting use, etc.)
2. Notice: three ways
*actual notice
*record notice (coming out of records at courthouse; chain of title)
*inquiry notice (reasonable person standard)
Defenses to Equitable Servitude
1. Unclean Hands (you did it)
2. Acquiesence (you let your neighbor do it)
3. Latches (you watched me build it)
4. Estoppel (you said you didn't mind
Termination by Changed Conditions
All or nothing. You cannot void a restriction because of changed conditions in th area unless all lots in the subdivision are affected.
Adverse Possession
When does X's being on the land constitute adverse possession, so that title is obtained, and when is it merely a trespass?
6 Requirements to get Adverse Possession
(HELUVA)
1. Hostile (being on property with no right to be)
2. Exclusive (excluding others for possessing property).
3. Lasting (statutory period)
4. Uninterupted (continuous, ordinary)
5. Visible (out in the open)
6. Actual (must actually possess the land to get title)
Don't need these things for Adverse Possession
*Owner doesn't have to know X is on the land
*X doesn't have to think X owns the property. (NO need for claim of right)
Constructive Adverse Possession (exception to "Actual" requirement)
Color of title (bad title). X thinks he possesses 100 acres, but title says 85 acres.
Two additional requirements:
1. must actually possess the larger portion (must bear a reasonable relation to he whole).
2. Property must be unitary (not split up)
Other Adverse Possession Rules
1. Leasing land to someone else qualifies
2. Adverse possession against concurrent owners. Only when possessor excludes the other co-tenants from possession and the statue runs.
No adverse possession against governmental land
Future Interest Situations with Adverse Possession
1. Life Estate plus future interest: clock starts for FI when life tenant dies.
2. Fee Simple Determinable: happening of condition starts clock
3. Fee simple on a condition subsequent: clock starts when grantor exercises the right of entry
Tacking
Can tack periods of adverse possession, but period must pass directly from one adverse possessor to another.
*also can tack periods of true ownership
Disability
Being a minor, being insane or being in jail.
*If owner is under disability at the time the adverse possession begins, the adverse possession clock doesn't start to run until O is free of disability.
*Intervening disability doesn't stop clock
Statute of Frauds and contract of sale
Contracts of Sale must be in writing and signed by the one that is sued. Must have:
1. Description of property
2. Names of parties
3. Price
Doctrine of Part Performance
Exception to statue of frauds
Two Requirements:
1. The oral contract must be certain and clear
2. The acts of part performance must clearly prove up a contract
(Look for claimant in possession and paying FULL purchase price OR erecting improvements.)
Legal Effects between time of signing of contact and closing
1. Risk of Loss
2. Death of a Party
3. Marketable Title
4. Time of performance
Risk of Loss
Nobody's fault; but nobody's insured. BUYER LOSES. Once signed, equitable conversion takes place (buyer has title). This is true even if seller has remained in possession and control.
Death of a Party Before Closing
Equitable conversion preserves teh rights as set in the contract, and death of a party before closing does not affect them. If seller dies, buyer goes to closing with seller's estate. Sellers interest is personal property. If buyer dies, buyer's estate pays the money and gets title.
Marketable Title
Implied warranty that at closing, seller will give buyer marketable title. Minor defects don't count if they don't present a significant threat of litigation (e.g. house is half inch over neighbor's line)
Seller must give buyer 3 things for marketable title
1. Proof of Title (copy of all deeds recorded in chain of title)
2. Title free of encumbances (no easements, restrictive covenants, etc that are not mentioned in contract)
3. Valid Legal title on the day of closing (if beer finds out the day before that seller doesn't have title, he cannot rescind yet)
Buyer Remedies for Unmarketable Title
Notify seller and give seller time to cure. If seller doesn't cure, remedies are:
1. Rescission (rescind K)
2. Sue for Damages
3. Specific Performance (takes what seller can give and price gets lowered)
Time of Performance
General Rule: Time is not of teh essence unless in K. Must just perform withing a reasonable time (two months late is OK). Violation of Time is of the essence clause is a total breach
Remedies for Breach of Sales COntract
1. Damages: difference between K price and value of land on date of breach. Buyer's deposit can be forfeited as liquidated as long as not 10% or more of sales price.
2. Specific Performance
2.
Defects on the Property
Can buyer recover? No. No implied warranties for suitability or fitness. Exceptions:
1. Seller must disclose serious defects that seller knows of and are not obvious to buyer.
2. There is an implied warranty of fitness or merchantability for sale of a new home by builder-seller.
Deed
Once deed accepted at closing, contract disappears.
Lose implied warranty of marketable title and all other provisions unless included in deed
Requirements to Pass Title in Deed
1. Execution
2. Delivery
Execution of Deed
Signed by Seller.
Description of Property (not specific; just to ID property) Sufficient description even if it's a minor discrepancy in area of land.
Delivery of Deed
Did the grantor have the intent to pass title? Even if the passage of the paper isn't there, it can still be valid delivery
*recording a deed raises a presumption of delivery.*If grantor dies and still has the deed in possession, there is a presumption of no delivery.
Conditional Delivery
Grantor hands over deed, but tries to condition delivery on some event.
Three Situations of Conditional Delivery
1. Condition is in the deed: deed says not til death of grantor (this is valid delivery of future interest)
2. Oral Condition: if made at time of delivery, disregard oral condition
3. making delivery conditional on grantee paying the purchase price
Condition of grantee paying purchase price
Valid provided grantor makes delivery to a third party in escrow, with instructions to deliver to grantee when the condition is satisfied (oral instructions are OK)
QuitClaim
No promises Grantee gets whatever grantor owns and grantor promises nothing.
Six Covenants for Title in General Warranty Deed
*Present Covenants: these you can sue on immediately and do not run with the land
1 & 2 covenant of seisen and covenant of right to convey 3 Covenant against encumbrances
*Future Covenants (not breached immediately but only later, when grantee is distrued in possession. runs with land)
4 & 5 covenant for quiet enjoyment and covenant of warranty
6 covenant of further assurance
Damages for Breach of Warranty
Limited to purchase price received by warrantor plus incidental damages.
Estoppel by Deed
A deeds prop to B that A doesn't own, and then A later acquiress title, B gets title.
*but, if grantor transfers to a bona fide purchaser after getting title, then the original grantee loses and cannot rely on estoppel by deed.
Deed to Dead Person
A deed to a dead person is invalid, although enforcement of the contract of sale can still be had by either teh seller or the buyer's estate, and a new deed is made to the buyer's estate.
Classic Recording Situation
O to A; later on, O to B, same farm. Who owns?
*Common Law: A - first in time, first in right
*Today, look at recording statutes. May give title to B if requirements of statute are met.
*Judgment creditors are not protected by recording acts
How does Recording Work?
Take to Rg. of deeds. Clerk files copy of deed in book and recordes volume and page. Put in grantor index and grantee index.
Notice Acts
protects subsequent grantees who are bona fide purchasers, those who give value and who take without notice of the earlier transaction. Recording is irrelevant
Race Notice Acts
Two part test:
1. Must be Bona Fide Purchaser; and
2. First to record
Pure Race Act
Notice is irrelevant. First to record, wins.
Language for Recording Acts
1. "without notice" or "in good faith" - it is either notice act or race notice act. THEN . .
2. "first recorded" or "recorded first", then race notice. If not, it is notice act.
3. If none of this, then pure race act
Bona Fide Purchaser
1. Purchase for Value
2. Without Notice
Purchase for Value (BFP)
*Any consideration that is out of pocket; even if extremely low. ($1 not enough)
*B gets property as O's heir - cannot be a BFP
***Shelter Rule Exception: anyone can shelter under rights of BFP (anyone who takes prop from BFP gets rights of BFP) Example: pg. 82 handout
Without Notice (BFP)
Three kinds of notice can defeat B:
1. Actual Notice
2.
Actual Notice
If subsequent purchaser knew, he loses. Shelter Rule Exception: those who take from BFP can know of a subsequent sale.
Record Notice
a constructive notice that arises from the record. Not enough that the deed was recorded at courthouse in order to give subsequent purchaser notice of it, it must be recorded in the chain of title
Title Searching
1. Construct a chain of title by going to grantee inded
2. See if chain is strong enough
*did grantor place any encumbrances on property
*did grantor transfer property to anyone else before passing to the next link.
Inquiry Notice
Reading of deeds on record discloses unrecorde transaction, the BFP has to take notice and find out about it.
Where subsequent purchaser fails to go out and examine the land and an examination would have shown someone on land under a prior unrecorded right. Sub. purchser must make inquiry of unexplained possessions or uses.
Security Interest
1. Mortgage
2. Deed of Trust
3. Installment Land Contract
Mortgage
Given by debtor to creditor. Sherriff sells teh land at a court-ordered foreclosure sale if mortgage isn't paid
Two others are treated like a morgage
*Absolute deed with separate promise of reconveyance situation
*Sale/Leaseback with option to repurchase
Deed of Trust
Given by debtor to a third party trustee who holds it until the loan is paid off. If loan isn't paid, then trustee may either get teh court to order a sale OR sell property on their own at public auction
Installment Land Contract
Debtor signs a contract promising to make payments and seller keeps title until loan is paid off
Equity of Redemption
At any time up to the foreclosure sale, debtor can purchse the property. Normally all debtor needs to pay is the amount in arrears; if mortgage has an acceleration clause, debtor must pay entire balance.
Foreclosure
Must be by public auction sale.
Multiple mortgages
Priorities are first in time, first in right unless recording act changes that.
*If a mortgage was not recorded or recorded late, use recording act.
Mortgage Priorities
1. Can be cahnges by contract
2. Purchase money mortgages take priority
3.
Junior/Senior Interests
Foreclosures wipe out all junior interests (those that come later in time, but do not wipe out senior interests (those that came earlier)
Installment Land Contract
Look for a forfeiture clause that provides that if debtor misses a payment, seller can cancel the contract, keep all the money paid to date and get the property back.
Transfers of Security Interest
Morgagor can transfer title to teh property and mortgage just tags along,a dn transferee takes subject to the mortgage. Mortgagor continues to be personally liable on the note. Unless grantee specifically assumes mortgage, grantee is not personally liable on it, but mortgage still hs to be paid or mortgagee will foreclose
Mortgagee transfers
Morgagee can freely transfer the note, and the mortgage tags along with the note.
*Exception: Holder in Due Course
Holder in Due Course
Not bound by payments to an old mortgagee, not even if mortgagor know nothing of the transfer.
Due on Sale Clause
If mortgagor transfers w/out mortgagee's consent, the full amount of the loan is immediately due and payable. These are enforceable
Fixture Filing
If a fixture filing is not made as required by UCC Article 9, witin 20 days of attachment then the security interest in the chattel is subordinate to the earlier mortgage on the real property.
Right of Support
Support from the sides (lateral support)
Support from the bottom
(subjacent)
Support from the sides.
A landowner has the right to land supported by the adjoining landowners, and strict liability result if land is not supported.
*adjacent landowner is also strictly liable for damage to improvements if the weight of the imporvements didn't cause the collapse
Support from the bottom
Strict liability results if surface is not supported. Situation arises when holder of mineral rights removes minerals and the surface subsides. Holder of mineral rights is strictly liable for failure to support the surface of the land.
Rivers and Lakes
Riparien Rights - refers to those whose property borders on a lake or a stream.
*owner can use all the water needed for domestic purposes
*If non-domestic use, owner is limited to reasonable use
Water under the Ground
A land owner is entitled to reasonable use of ground water
Surface Water
Two competing approaches
1. Natual Flow Approach: courts allow reasonable steps to deal with flood water. On exam, drainage pipes or ditches to divert the flood water, it's ok if reasonable.
2. Common Enemy Approach - you can do whatever you want with flood water.