Real Property

Front 1

What is a Fee Simple Absolute

Back 1

largest estate recognized by law; it can be sold, divided, devised, or inherited and has an indefinite or potentially infinite duration

Front 2

What are Defeasible Fees?

Back 2

Fee simple estates (i.e., of uncertain or potentially infinite duration) that can be terminated upon the happening of a stated event.

Front 3

What is a Fee Simple Determinable (and Possibly of Reverter)

Back 3

Terminates upon the happening of a stated event and automatically reverts to the grantor (is a reversionary future interest)
Are transferable: inter vivos, descendible, and devisable

Front 4

What is the Correlative Future Interest in the Grantor for a Fee Simple Determinable?

Back 4

Whenever a grantor conveys a fee simple determinable he automatically retains a possibility of reverter, Possibility of Reverter - is a reversionary future interest. A possibility of reverter is transferable, descendible, and devisable.

Front 5

What is a Fee Simple Subject to Condition Subsequent?

Back 5

Is an estate where the grantor expressly reserves the right to terminate the estate upon the happening of a stated event; i.e., the estate does not automatically terminate - the grantor must take some action.
the right of reentry MUST be expressly reserved

Front 6

What is the Correlative Future Interest in the Grantor for a Fee Simple Subject to Condition Subsequent?

Back 6

Power of Termination/Right of Entry; The right to terminate, reserved by the grantor, is called a right of entry. It must be expressly reserved; in contrast with a possibility of reverter, it does not arise automatically.
(Until happening of named even and reentry by grantor)

Front 7

What si a Fee Simple Subject to an Executory Interest?

Back 7

If a fee simple estate terminates upon the happening of a stated event (because it is determinable or subject to a condition subsequent) and then passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate, the third party has an executory interest;

Front 8

What is a Fee Tail?

Back 8

An estate limited to lineal heirs; created by the words "to B and the heirs of his body."

Front 9

What is a Life Estate?

Back 9

A freehold estate where the duration is measured by the life or lives of one or more persons.
~ It may be created by operation of law (e.g. dower), or by conveyance.

Front 10

What is a Life Estate Pur Autre Vie?

Back 10

freehold estate the duration of which is measured by the life of someone other than the grantee

Front 11

What is the Doctrine of Waste?

Back 11

Life tenant is entitled to the ordinary uses and profits of the land, but cannot do anything that injures the interests of a remainderman or reversioner - future interest holders may sue for damages or to enjoin such acts.

Front 12

What is Affirmative (Voluntary) Waste?

Back 12

Voluntary waste (sometimes called affirmative waste) is any structural change made to the estate that intentionally or negligently causes harm to the estate or depletes its resources, unless this depletion is a continuation of a pre-existing use.

Front 13

Exploitation of natural resources by a Life Tenant is generally limited to what circumstances?
(3 circumstances)

Back 13

(i) Where it is necessary for repair or maintenance of the land;
(ii) where the land is suitable only for such use; or
(iii) where it is expressly or impliedly permitted by the grantor

Front 14

What is the Open Mines Doctrine?

Back 14

if mining was done on the land prior to the life estate, the life tenant can continue mining - but is limited to the mines already open.

Front 15

What is Permissive Waste?

Back 15

Permissive waste is failure to maintain the estate, both physically and financially. Rather than requiring some bad act on the part of the tenant, this requires a failure to make ordinary repairs, pay taxes, or pay interest on the mortgage. If the property is owned under a lease which places the burden of making physical repairs on the landlord, the tenant still has a duty to report the need for such repairs to the landlord.

Front 16

What is a Life Tenant obligated to do?
(4 things - physical and financial):

Back 16

(i) preserve the land and structures in a reasonable state of repair,
(ii) pay interest on mortgages (not principal);
(iii) pay ordinary taxes on the land;
(iv) pay special assessments for public improvements of short duration (improvements of long duration are apportioned between the life tenant and future interest holder).

Front 17

What is Ameliorative Waste?

Back 17

A change that benefits the property economically;
~ This waste was actionable at common law

Front 18

When may a Life Tenant (not leasehold tenant) alter or even demolish existing buildings?

Back 18

(i) the market value of the future interests are not diminished and either:
(ii) the remaindermen do not object; or
(iii) there is a substantial change in the neighborhood conditions that has deprived the property of usefulness or productivity in its current condition

Front 19

What is the rule on Ameliorative waste for Leasehold Tenants?

Back 19

leasehold tenants remain liable for ameliorative waste even if neighborhood conditions have changed and the market value of the premises was increased.

Front 20

What happens in the event of a Renunciation of a Life Estate?

Back 20

the future interest following the life estate is generally accelerated so that it becomes possessory immediately.

Front 21

What is a Future Interest?

Back 21

A future interest gives its holder the right or possibility of future possession of an estate; it is a present, legally protected right in property

Front 22

What is a Reversion?

Back 22

It is the Estate left in the Grantor who conveys less than she owns; it arises by operation of law and does not have to be expressly reserved.
A reversion is alienable, devisable, and inheritable.
~ Its holder can sue for waste and for tortious damage to the reversionary interest.

Front 23

What is Remainder?

Back 23

A future interest in a third person that can become possessory upon the natural expiration of the preceding estate;
~ A remainder is expressly created; it cannot divest a prior estate (rather it follows naturally), and cannot follow a time gap.

Front 24

What is an Indefeasibly Vested Remainder?

Back 24

An indefeasibly vested remainder is Created in an existing and ascertained person and is not subject to a condition precedent.
~ The Remaindeman has a right to immediate possession upon normal termination of the preceding estate.
~ An indefeasibly vested remainder is not subject to divestment or dimunition.

Front 25

What is a Vested Remainder Subject to Open?

Back 25

Created in a class of persons (e.g., children) that is certain to become possessory but is subject to diminution - by the birth of additional persons who will share in the remainder as a class.

Front 26

What is a Vested Remainder Subject to Total Divestment?

Back 26

It is a Vested Remainder Subject to a condition subsequent.

Front 27

What are the two types of Contingent Remainder?

Back 27

Contingent Remainders are those created in unborn or unascertained persons or subject to a condition precedent?

Front 28

What is a Condition Precedent in a remainder situation?

Back 28

A condition is precedent if it must be satisfied before the remainderman has a right to possession.

Front 29

Why is a remainder contingent for Unborn or Unascertained Persons?

Back 29

A remainder is contingent because until the remainder is ascertained, no one is ready to take possession if the preceding estate ends.

Front 30

What is the Rule of Destructibility of Contingent Remainders?

Back 30

At common law, a contingent remainder was destroyed if it failed to vest before the termination of the preceding freehold estate.

Front 31

What is the Rule in Shelley's Case?

Back 31

if the same instrument created a life estate and a remainder only in A's Heirs, the remainder was not recognized and A took the life estate and the remainder (and the remainder in the heirs was cut off).

Front 32

What is the Doctrine of Worthier Title?

Back 32

Almost the same as rule in Shelley's case, but: Grantor conveys Blackacre to B for life with remainder to Grantor's heirs; in this case the remainder to Grantor's heirs is cut off and you then have a reversion in fee back to the Grantor (or his heirs).

Front 33

What is the general definition of an Executory Interest?

Back 33

They are Future interests in third parties that either divest a transferee's preceding freehold estate ("shifting interests") or follow a gap in possession or cut short a grantee's preceding freehold estate ("springing interestes")

Front 34

Transferability of Remainders and Executory Interests

Back 34

Vested Remainders are: fully transferable, descendible, and devisable;
~ At CL, Contingent Remainders and Executory Interests were not transferable inter vivos, but most courts today hold that they are freely transferable. (check)

Front 35

What are Class Gifts?

Back 35

A "class" is a group of persons having a common characteristic (e.g., children, nephews).
~ The share of each member is determined by the number of persons in the class.
~ Vested Subject to Open: at least one member exists
~ Contingent: all group members are unascertained.

Front 36

What is the Rule of Convenience?

Back 36

in the absence of express contrary intent, a class closes (i.e., no one born after that time may share in the gift) when some member of the class can call for distribution of her share of the class gift.

Front 37

What is the definition of a Trust?

Back 37

A fiduciary relationship with respect to certain property (res) wherein the trustee holds legal title to the property subject to enforceable equitable rights in a beneficiary
~ Settlor must own the property at the time of the trust creation and must have had the intent to create the trust

Front 38

Charitable Trusts - How do the Rules differ from normal trusts? (3 ways)

Back 38

(i) must have indefinite beneficiaries
(ii) may be perpetual (RAP does not apply)
(iii) and the cy pres doctrine, which allows a court to select an alternative charity when the purpose of the the settlor becomes impractical or impossible, applies.

Front 39

What is the Rule Against Perpetuities?

Back 39

No interest in property is valid unless it must vest, if at all, not later than 21 years after some life in being ("measuring life") at the creation of the interest. IF there is any possibility the interest might vest more than 21 years after a life in being, the interest is void.

Front 40

What interests does the RAP apply to?
(6 things)

Back 40

1- Contingent Remainders
2- Executory Interests
3- Vested Remainders Subject to Open (Class gifts) - if a remainder interest is given to a class of persons, it is deemed vested only when the class is closed and all conditions precedent have been satisfied for all members (entire class gift is void if the interest of one member might possibly violate the rule).
4- Options to purchase land (in the future) contained in a deed instrument (not in a lease)
5- rights of first refusal (as in to purchase property)
6- Powers of appointment (ex. -

Front 41

When does an interest vest?
(2 instances)

Back 41

(i) When it becomes possessory, or
(ii) it is an indefeasibly vested remainder or a vested remainder subject to total divestment.

Front 42

What is the Effect of Violating the RAP?

Back 42

The Offensive Interest Stricken: Violation of the Rule destroys only the offending interest. The interests are then treated as if the void interest were never there. Exception is the rare case of "infectious invalidity" where the testator would probably have preferred the entire gift to fail.

Front 43

What is the Bad-as-to-One, Bad-as-to-All Rule?

Back 43

If the interest of any class member may vest too remotely, the whole class gift fails.
~ For the class gift to vest, the class must be closed and all conditions precedent satisfied for every member.

Front 44

What is the Rule Against Restraints on Alienation?

Back 44

Generally, any restriction on the transferability of a legal (as opposed to equitable) interest is void.

Front 45

What is a Disabiling restraint?

Back 45

It is a situation where attempted transfers of an interest in property are ineffective.

Front 46

What is a Forfeiture restraints?

Back 46

It is a situation where an attempted transfer forfeits the interest.

Front 47

What are promissory restraints?

Back 47

It is a situation where an attempted transfer breaches a covenant.

Front 48

What is the effect of a Disabling Restraint on Legal Interests?

Back 48

a disabling restraint on any type of legal interest (e.g., fee simple, life estate) is void.

Front 49

What is the effect of a Restraints (of Whatever Type) on a Fee Simple?

Back 49

All restraints (of whatever type) on fee simple interests are void, even if transferability is restricted for only a short time.

Front 50

What is a Joint Tenancy?

Back 50

It is a form of co-ownership where each joint tentant owns an undivided interest in the same estate.
~ A joint tenancy's distinguishing feature is the right of survivorship.

Front 51

How is a Joint Tenancy created?

Back 51

The common law requires four unities:
1- Time,
2- Title (same instrument),
3- Interest (same type and duration),
4- with the same right to Possession (identical rights of enjoyment).

Front 52

What is a Conveyance to two or more persons presumed to be?

Back 52

modern law requires a clear expression of a right of survivorship; otherwise a conveyance to two or more persons is presumed to be a tenancy in common.

Front 53

How is a Joint Tenancy destoyed?

Back 53

It is terminated by a conveyance inter vivos (severs joint tenancy, resulting in a Tenancy in Common);
~ a suit for partition destroys it;
~ a Lease does not effect a severance in Majority; K to convey severs in majority

Front 54

Do Judgment Liens cause a severance of a joint tenancy?

Back 54

~ If such a lien is acquired against a joint tenant, it does not sever the joint tenancy until it is actually sold at a foreclosure sale.
~ Usually when a plaintiff obtains a money judgment against a defendant, that judgment becomes a lien on the defendant's property in the county where the judgment is docketed.
~ The lien runs with the land, burdening it until the judgment is paid or the lien expires (usually 10 years).

Front 55

Do Mortgages cause a severance?

Back 55

In most states, a mortgage is a lien on title and does not sever a joint tenancy.
~ Severance occurs only if the mortgage is foreclosed and the property is sold.
~ In a minority of states that follow a title theory, (mortgage is regarded as a transfer of title), then this would sever the joint tenancy.

Front 56

Do Leases sever a Joint Tenancy?

Back 56

States are split as to whether one joint tenant's lease of her interest causes a severance.
~ Majority: a lease does not effectuate a severance of a joint tenancy.

Front 57

Does a Contract to Convey cause a severance?

Back 57

Severance results if one joint tenant contracts to convey her interest (despite the fact that no conveyance actually occurs - it is enforceable in equity), but the courts are split on whether an executory contract by all joint tenants works a severance.
~ A joint tenancy can be terminated by partition (voluntary or involuntary)

Front 58

Does Testamentary Disposition cause a severance?

Back 58

A will is ineffective to work a severance because at death the testator's interest vanishes.

Front 59

What is a Tenancy by the Entirety?

Back 59

A tenancy by the entirety is a marital estate akin to a joint tenancy.

Front 60

What severs a Tenancy by the Entirety?

Back 60

Only death, divorce, mutual agreement, or execution by a joint creditor of both the husband and wife can sever a tenancy by the entirety.
~ An individual spouse cannot convey or encumber tenancy by the entirety property.
~ A deed or mortgage executed by only one spouse is ineffective.

Front 61

What is a Tenancy in Common?

Back 61

A tenancy in common is a concurrent estate with no right of survivorship.
~ Tenants can hold different interests in the property, but each is entitled to possession of the whole.
~ Interests are: alienable (changed over to another's ownership), devisable (by will), and inheritable.
~ Only unity is the unity of Possession; no Right of Survivorship (would just go to heirs, not to other interestholder)

Front 62

What is the rule relating to Possession among co-tenants?

Back 62

Each co-tenant has the right to possess all portions of the property but has no right to exclusive possession of any part.
~ A co-tenant out of possession cannot bring a possessory action unless she is "ousted." (e.g., another co-tenant claims right to exclusive possession).

Front 63

What is the Rule re Rents and Profits by co-tenants.

Back 63

In most states, a co-tenant in possession has the right to retain profits from her own use of the property; i.e., she need not share profits with other co-tenants absent ouster or an agreement to the contrary.

Front 64

What is the Rule re contribution from co-tenants?

Back 64

A co-tenant who pays more than her pro rata share of necessary repairs is entitled to contribution from the other co-tenants, provided she has notified the other co-tenants of the need for repairs.
~ If there is a partition, then the court may make an equitable division of the proceeds and the court will consider the amount paid for repairs.

Front 65

What is the Duty of Fair Dealing among co-tenants?

Back 65

A confidential relationship exists among co-tenants; e.g., one co-tenant's acquisition of an outstanding title or lien that may affect the estate is deemed to be on behalf of other co-tenants.

Front 66

What is a Leasehold?

Back 66

A leasehold is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion); combines aspects of a conveyance and a contract, and it must satisfy the Statute of Frauds.

Front 67

What are the Statute of Frauds requirements for leaseholds?

Back 67

(i) the lease must describe the lessor and lessee,
(ii) the lease must describe the leased land,
(iii) it must state the term of the lease,
(iv) it must state the amount of the rent.

Front 68

What is a Tenancy for Years?

Back 68

A tenancy for years continues for a fixed period of time (e.g., A rents to B for two years); and ends automatically; usually created by written leases.

Front 69

What is a Periodic Tenancy?

Back 69

A periodic tenancy continues for successive periods (e.g., month-to-month) until terminated by proper notice by either party.
~ It is automatically renewed until proper notice of termination is given, usually one full period in advance.

Front 70

How may a periodic tenancy be created?
(3 ways)

Back 70

(i) Express Agreement (e.g., L leases to T from month-to-month)
(ii) Implication (e.g., L leases to T at a rent of $100 payable monthly); or
(iii) Operation of Law (e.g., T remains in possession after the lease expires, and L treats it as a periodic tenancy; or the lease is invalid, but T goes into possession).

Front 71

How is a Periodic Tenancy terminated?

Back 71

A periodic tenancy is automatically renewed until proper notice of termination is given.
~ Usually, the notice must be one full period in advance

Front 72

What is a Tenancy at Will?

Back 72

A tenancy at will is terminable at the will of either the landlord or the tenant; is a tenancy of no stated duration that lasts as long as both parties desire.

Front 73

How is a tenancy at will created?

Back 73

Generally, a tenancy at will must be created by express agreement that the lease can be terminated at any time.

Front 74

How is a tenancy at will terminated?

Back 74

A tenancy at will may be terminated without notice by any party with the power to do so, or it may be terminated by operation of law (e.g., for death, commission of waste, etc.)

Front 75

What is a Tenancy at Sufferance?

Back 75

A tenancy at sufferance arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy.

Front 76

How is a tenancy at sufferance terminated?

Back 76

A tenancy at sufferance lasts only until the landlord takes steps to evict the tenant. No notice of termination is required.

Front 77

What is The Hold-Over Doctrine?

Back 77

If a tenant continues in possession after his right to possession has ended

Front 78

What are the Options for a Landlord in a hold-over tenant situation?
(2 options)

Back 78

(i) evict him, or (ii) bind him to a new periodic tenancy.

Front 79

What is a Lease?

Back 79

A lease is a contract that governs the landlord-tenant relationship.

Front 80

How are covenants in a lease read?

Back 80

Covenants in the lease are generally independent; i.e., if one party breaches a covenant, the other party can recover damages but must still perform his promises and cannot terminate the landlord-tenant relationship.
~ The doctrines of actual and constructive eviction and the implied warranty of habitability are exceptions to the rule.
~ Also, many states have created a statutory exception allowing the landlord to terminate the lease for the nonpayment of rent.

Front 81

What is Voluntary (affirmative) waste by a tenant?

Back 81

Voluntary waste results when the tenant intentionally or negligently damages the premises or exploits minerals on property.

Front 82

What is Permissive waste by a tenant?

Back 82

Permissive waste occurs when the tenant fails to take reasonable steps to protect the premises from damage from the elements.
~ If the duty is shifted to the landlord (by lease or statute), the tenant has a duty to report deficiencies promptly.

Front 83

What is Ameliorative waste by a tenant?

Back 83

Ameliorative waste occurs when the tenant alters the leased property, thereby increasing its value.
~ Generally, the tenant is liable for the cost of restoration.
~ There is a modern exception to this rule, however, which permits a tenant to make this type of change if he is a long-term tenant and the change reflects changes in the neighborhood.

Front 84

If the tenant specifically covenants to make repairs, how does this duty compare to his duty implied by the law of waste?

Back 84

If the tenant specifically covenants to make repairs, his duty will be higher than the duty implied by the law of waste.
~ The tenant has a duty to repair even ordinary wear and tear unless expressly excluded, but has no duty to repair structural failures or damage from fire or other casualty unless expressly included.
~ A tenant with a duty to repair is liable under such a covenant for all other defects, including reconstruction if the premises are destroyed.

Front 85

What is the Landlord's right if the tenant uses premises for Illegal Purposes?

Back 85

If the tenant uses the premises for an illegal purpose, the landlord may terminate the lease or obtain damages and injunctive relief.
~ Occasional unlawful conduct by the tenant does not breach this duty.

Front 86

What may the landlord to fi the Tenant is on Premises but Fails to Pay Rent?

Back 86

Evict or Sue for Rent
~ Thus, if a tenant is on the premises and fails to pay rent, the landlord may bring suit for rent due or may evict the tenant under the state's unlawful detainer statute.

Front 87

If the Tenant Abandons the property/lease, what may landlord do?

Back 87

Do Nothing or Repossess.
If the tenant unjustifiably abandons the property the majority view is that the landlord has a duty to mitigate damages by seeking to relet the premises.
~ If the landlord repossesses and/or relets, the tenant's liability depends on whether the landlord has accepted the surrender.
~ If surrender is not found, the tenant is liable for the difference between the promised rent and the fair rental value of the property (in case of reletting, between the promised rent and the rent received from the reletting).
~ If surrender is found, the tenant is free from any rent liability accruing after abandonment.
~ Note that the landlord's resumption of possession for himself constitutes acceptance of surrender.

Front 88

What is the landlord's duty to repair?

Back 88

Subject to modification by the lease, a statute, or the implied warranty of habitability, the general rule is that a landlord has no duty to repair or maintain the premises.

Front 89

What is the Landlord's Duty to Deliver Possession of the Premises?

Back 89

Statutes in most states require the landlord to put the tenant in actual possession of the premises at the beginning of the leasehold term; i.e., the landlord is in breach if he has not evicted a hold-over tenant by the beginning of the lease term.

Front 90

What is the Implied Covenant of Quiet Enjoyment?

Back 90

Every lease has an implied covenant that neither the landlord nor a paramount title holder (e.g., a prior mortgage who forecloses) will interfere with the tenant's quiet enjoyment and possession of the premises.

Front 91

What is Actual Eviction (entire premises)?

Back 91

Actual eviction occurs when the landlord or a paramount title holder excludes the tenant from the entire leased premises.
~ Actual eviction terminates the tenant's obligation to pay rent.

Front 92

What is Partial Eviction?

Back 92

Partial eviction occurs when the tenant is physically excluded from only part of the leased premises.
~ Partial eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continutes in possession of the remainder.
~ Partial eviction by a third person with paramount title results in an apportionment of rent; i.e., the tenant is liable for the reasoonable rental value of the portion she continues to possess.

Front 93

What is Constructive Eviction?

Back 93

If the landlord does something or, more often, fails to provide a service he has a legal duty to provide, that renders the property uninhabitable, the tenant may terminate the lease and seek damages.
~ The conditions must be the result of the landlord's actions (not a neighbor's or other third party's) and the tenant must vacate the premises within a reasonable time.

Front 94

What is the Implied Warranty of Habitability?

Back 94

Most jurisdictions imply a covenant of habitability into resedential leases. This warranty is nonwaivable.
~ The landlord's duty is tied to standards of local housing codes.

Front 95

What may the tenant do if the landlord breaches the Implied Warranty of Habitability?
(4 options)

Back 95

(i) terminate the lease;
(ii) make repairs and offset the cost against future rent;
(iii) abate the rent to an amount equal to the fair rental value in view of the defects; or
(iv) remain in possession, pay full rent, and sue for damages.

Front 96

What is Retalitory Eviction?

Back 96

In many states, a landlord may not terminate a lease or otherwise penalize a tenant in retaliation for the tenant's exercise of her legal rights, including reporting housing or building code violations. Many statutes presume a retalitory motive if the landlord acts within, for example, 90 to 180 days after the tenant exercises her rights. To overcome this presumption, the landlord must show a valid, nonretalitory reasons for his actions.

Front 97

What is an Assignment?

Back 97

A complete transfer of the entire remaining term is an assignment
~ If the tenant retains any party of the remaining term (other than a right to reenter upon breach), the transfer is a sublease.

Front 98

What are the Consequences of an Assignment?

Back 98

An assignee stands in the shoes of the original tenant in a direct relationship with the landlord;
~ i.e., the assignee and the landlord are in "privity of estate"; and each is liable to the other on all covenants in the lease that "run with the land."

Front 99

When does a covenant run with the land?

Back 99

A covenant runs with the land if the original parties to the lease so intend and if the covenant "touches and concerns" the land (i.e., benefits the landlord and burdens the tenant or vice versa) with respect to their interests in the property.

Front 100

To whom does an assignee owe rent?

Back 100

Since a covenant to pay rent runs with the land, the assignee owes rent directly to the landlord.

Front 101

After assignment, what are the obligations of the original tenant?

Back 101

After assignment, the original tenant is no longer in privity of estate with the landlord but remains liable on the original contractual obligation to pay rent (privity of contract).

Front 102

What is the relationship of the sublessee relationship with landlord?

Back 102

A sublesee is the tenant of the original lessee and usually pays rent to the original lessee, who then pays the landlord.
~ A sublessee is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease unless the sublessee expressly assumes the covenants.

Front 103

May the sublessee enforce covenants in the original lease?

Back 103

A sublessee cannot enforce any covenants made by the landlord in the main lease, except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord.

Front 104

How are Covenants Against Assignment or Sublease construed?

Back 104

Lease covenants restricting assignment and sublease are strictly construed against the landlord. (Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa).

Front 105

What are the Rights of Assignee of the landlord Against Tenants (attornment)?

Back 105

Once tenants are given reasonable notice of the assignment, they must recognize and pay rent to the new owner as their landlord. The benefit of all tenant covenants that touch and concern the land run with the landlord's estate to the new owner.

Front 106

What are the Liabilities of landlord's Assignee to Tenants?

Back 106

The burden of the landlord's covenants that touch and concern the land runs with the landlord's estate to the assignee; thus, the assignee is liable for the performance of those covenants.
~ The original landlord also remains liable on all of the covenants that he made in the lease.

Front 107

What results when there is a Condemnation of a Leaseholds?

Back 107

If the entire leasehold is taken by eminent domain, the tenant's liability for rent is extinguished because both the leasehold and reversion have merged in the condemnor and there is no longer a leasehold estate.
~ The lessee is entitled to compensation. However, if the taking is temporary or partial, the tenant is not discharged from the rent obligation, but is entitled to compensation (i.e., a share of the condemnation award) for the taking.

Front 108

What is the rule regarding a Landlord's Liability for a Concealed Dangerous Condition (Latent Defect)?

Back 108

If, at the time the lease is entered into, the landlord knows (or should know) of a dangerous condition that the tenant could not discover by reasonable inspection, the landlord must disclose it (not repair it).
~ Otherwise, the landlord will be liable for any injuries resulting from the condition.
~ If the tenant accepts the premises after disclosure, she assumes the risk for herself and others; the landlord is no longer liable.

Front 109

When will the Landlord will be liable for injuries to members of the public?
(3 elements)

Back 109

1) If he Knows (or should know) of a dangerous condition;
2) Has reason to believe the tenant may admit the public before repairing the condition; and
3) Fails to repair the condition.

Front 110

What is the Landlord's liability for repairs (after tenant takes possession)?

Back 110

Although the landlord is not liable for injuries from dangerous conditions arising after the tenant takes possession, if the landlord undertakes such repairs, he owes a duty of reasonable care.
The landlord also has a duty of reasonable care in maintaining common areas (e.g., halls, elevators).
~ If the landlord covenants to repair or has a statutory duty to repair (e.g., housing codes), he is liable for injuries resulting from failure to repair or negligent repair.

Front 111

What is the Landlord's liability for a Furnished Short-Term Residence?

Back 111

A landlord who rents a fully furnished premises for a short period (e.g., summer cottage) is under a stricter duty.
~ He is liable for injuries resulting from any defect whether or not he knew of the defect.

Front 112

What is the Modern trend for landlord liability?

Back 112

Many courts are now holding that a landlord owes a general duty of reasonable care toward residential tenants, and will be held liable for injuries resulting from ordinary negligence if he had notice of a defect and an opportunity to repair it.

Front 113

What is the definition of a fixture?

Back 113

A fixture is a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty. A fixture passes with the ownership of the land.
~ An item is a "fixture" if the objective intention of the party who made the annexation was to make the item part of the realty.

Front 114

In a Landlord-Tenant situation, what controls as to whether an item is a fixture?

Back 114

An agreement between the landlord and tenant is controlling on whether an annexed chattel is a fixture.
~ Absent an agreement, a tenant is deemed to lack the intent to permanently improve the property, and thus may remove his annexed chattels if removal would not damage the premises or destroy the chattel.

Front 115

How are Licensees or Trespassers/adverse possessors treated when it comes to annexations?

Back 115

Licensees are treated much like tenants, whereas trespassers normally lose their annexations. Thus, absent a statute, an adverse possessor or good faith trespasser cannot remove fixtures (e.g., house erroneously constructed on a parcel that possessor believed she owned).

Front 116

What is the general rule on Third-Party Liens on Land to which Chattel Affixed?

Back 116

Generally, the mortgagee has no greater rights than the mortgagor. Thus, chattels annexed by the mortgagor's tenant are generally not within the lien of the mortgagee except where the mortgage is made after the lease and the mortgagee is without notice of the tenant's rights.

Front 117

Where there is a Third-Party Lien on a Chattel Affixed to Land, who wins as between the seller of the chattel and the mortgagee?

Back 117

If the landowner defaults on both the chattel and mortgage payments, as between the seller and the mortgagee, the general rule is that the first to record his interest wins.
However, under the U.C.C., a seller wins if the "fixture filing" is recorded within 20 days after the chattel is affixed to the land.

Front 118

In general, what are Easements, profits, covenants, and servitudes?

Back 118

They are nonpossessory interests in land, creating a right to use land possessed by someone else.

Front 119

What is an easement, what does an easement allow an easement holder to do?

Back 119

An easement is the right or freedom to do something or the right to prevent someone else from doing something on the real property of another.
An easement holder has the right to use another's tract of land for a special purpose (e.g., to lay pipe, to acces a road or lake), but has no right to possess or enjoy that land.

Front 120

What does an affirmative easement allow the holder to do?

Back 120

the holder of an affirmative easemetn is entitled to make affirmative use of the servient tenement.

Front 121

What does a Negative Easement allow the holder to do?

Back 121

A negative easement entitles the privilgeholder to compel the possessor of the servient tenement to refrain from engaging in an activity on the servient estate (e.g., servient tenement holder prevented from building a structure in excess of three stories)

Front 122

What are the four areas a negative easement is usually confined to?

Back 122

(i) for light, (ii) for air, (iii) lateral and subjacent support, and (iv) for flow of an artificial stream.
~ negative easements really are restrictive covenants

Front 123

What is an Easement Appurtenant?

Back 123

For an easement to be appurtenant, there must be two tracts: the dominant tenement (i.e., the estate benefited by the easement), and the servient tenement (the estate subject to the easement right).
An easement is appurtenant when it benefits the holder in his physical use or enjoyment of another tract of land.

Front 124

How does an easement appurtenant pass?

Back 124

An easement appurtenant automatically passes with the transfer of the benefited land, regardless of whether it is mentioned in the conveyance (it is a part of the land);

Front 125

How does a burden of the easement pass on the servient estate, and what is the exception?

Back 125

The burden of the easement also passes automatically with the servient estate unless the new owner is a bona fide purchaser with no actual, constructive, or inquiry notice of the easement;

Front 126

What happens if a BFP takes without notice of the easement?

Back 126

The easement will be considered to terminate.

Front 127

What is an Easement in Gross?

Back 127

The holder of an easement in gross acquires a right to use the servient tenement independent of his ownership of another tract of land;
~ i.e., the easement benefits the holder rather than another parcel; there is no dominant tenement, and the easement passes entirely apart from any transfer of land.

Front 128

What is the rule as to the transferability of a personal easement?

Back 128

An easement in gross for the holder's personal pleasure (e.g., right to swim on another's pond) is not transferable.

Front 129

How about the transferability of an easement in gross that serves an economic or commercial interest?

Back 129

An easement in gross that serves an economic or commercial interest (e.g., right to erect billboards on Blackacre) is transferable.

Front 130

What are the basic methods of easement creation?

Back 130

express grant or reservation, implication,
and prescription.

Front 131

What are the requirement for an Easement by express grant?
2 requirements

Back 131

Any easement must be in writing and signed by the holder of the servient tenement unless its duration is brief enough (commonly one year or less) to be outside a particular state's Statute of Frauds' coverage.
~ A grant of easement must comply with all the formal requisites of a deed.

Front 132

What is an easement by express Reservation?

Back 132

An easement by reservation arises when a grantor conveys title to land, but reserves the right to continue to use the tract for a special purpose.
~ under the majority view, an easement can be reserved only for the grantor.
~ An attempt to reserve an easement for anyone else is void.

Front 133

Generally, what is an Easement by implication?

Back 133

Even when no document or agreement has created an express easement, an easement right may still be understood (or "implied") by a situation or circumstances.
An easement by implication is created by operation of law; it is an exception to the Statute of Frauds.

Front 134

What is an Easement Implied from Existing Use ("Quasi-Easement")?
(4 elements)

Back 134

a) there must be a Common ownership immediately prior to the division of a single tract
b) An apparent and continuous use exists on the "servient" part
c) That is reasonably necessary for the enjoyment of the "dominant" part, and
d) the court determines that the parties intended the use to continue after division of the land.

Front 135

What are the two types of Easements Implied without Any Existing Use?

Back 135

a) Subdivision Plat
b) Profit a Prendre

Front 136

What is the rule as relates to subdivision plats?

Back 136

Where lots are sold in a subdivision with reference to a recorded plat or map that also shows streets leading to the lots, buyers of the lots have implied easements to use the streets to access their lots.

Front 137

What is the rule as relating to a Profit a Prendre?

Back 137

The holder of the profit a prende has an implied easement to pass over the surface of the land and to use it as reasonably necessary to extract the product.

Front 138

What is an Easement by Necessity?

Back 138

An easement by necessity arises when a landowner sells a portion of his tract and by this division deprives one lot access to a public road.
An easement by necessity Requires:
(i) Common ownership of the dominant and servient estates at some time in the past; and
(ii) Strict necessity for the easement exists (as in no other means to get to a public highway);
~ the easement lasts only as long as the necessity does.
~ The owner of the servient parcel has the right to locate the easement.

Front 139

What is an Easement by Prescription?

Back 139

Acquiring an easement by prescription is analogous to acquiring property by adverse possession.
To acquire a prescriptive easement, the use must be:
(i) Open and notorious (i.e., discoverable upon inspection);
(ii) Adverse (without the owner's permission); and
(iii) Continuous and uninterrupted;
(iv) for the statutory period.
~ unlike in Adverse Possession, exclusivity is not required.

Front 140

What is an Easement by estoppel?

Back 140

It is a situation where detrimental reliance creates the easement;
if a licensee invests substantial amounts of money or labor in reliance on a license, the licensor is estopped to revoke.
~ The license becomes an easement by estoppel, which lasts until the holder receives sufficient benefit to reimburse him for his expenditures.

Front 141

Generally, what is the scope of an easement?

Back 141

In the absence of specific limitations in the grant, courts assume the easement was intended to meet both present and future needs of the dominant tenement (e.g., easement may widen to accomodate new, wider cars).
~ If, however, the dominant parcel is subdivided, the lot owners will not succeed to the easement if to do so would unreasonably overburden the servient estate.

Front 142

What are the ways an easement is Terminated?
(8 ways)

Back 142

(1) Stated Conditions;
(2) Unity of Ownership (Merger);
(3) Release
(4) Abandonment
(5) Estoppel
(6) Prescription
(7) Necessity
(8) Condemnation and Destruction

Front 143

What is termination by Unity of Ownership (Merger)?

Back 143

If the same person acquires ownership of both the easement and the servient estate, the dominant and servient estates merge and the easement is destroyed.

Front 144

What is Termination by Release?

Back 144

An easement (including an easement in gross, which is otherwise inalienable) can be terminated by a deed of release from the owner of the easement to the owner of the servient tenement.

Front 145

What is Termination by Abandonment?

Back 145

An easement is extinguished when its holder demonstrates by physical action (e.g., building a structure that blocks access to easement on adjoining lot) an intent to permanently abandon the easement.

Front 146

What is Termination by Estoppel?

Back 146

Oral expressions of an intent to abandon do not terminate an easement unless in writing (release) or accompanied by action (abandonment).
~ But if the owner of the servient estate changes his position in reasonable reliance on the representations made or conduct by the owner of the easement, the easement terminates through estoppel.

Front 147

What is Termination by Prescription?

Back 147

To terminate an easement by prescription there must be an adverse, continuous interruption of the use for the prescription period (usually 20 years).

Front 148

How is an Easement by Necessity terminated?

Back 148

Easements created by necessity expire as soon as the necessity ends.

Front 149

How is an easement Terminated by Condemnation and Destruction?

Back 149

Condemnation of the servient estate extinguishes all easements.
~ Courts are split as to whether easement holders are entitled to compensation.
~ Involuntary destruction of a structure in which there is an easement extinguishes the easement; voluntary destruction does not.

Front 150

Compare Licenses to Easements

Back 150

Licenses privilege their holders to go upon the land of another. But unlike an easement, a license is not an interest in land; it is merely a privilege, revocable at the will of the licensor.
~ A license is personal to the owner, and thus inalienable.
~ Any attempt to transfer results in revocation by operation of law.

Front 151

A license becomes irrevocable in the following circumstances (2 ways):

Back 151

Estoppel and
License coupled with an interest

Front 152

How is an easement by estoppel created?

Back 152

If a licensee invests substantial amounts of money or labor in reliance on the license, the licensor is estopped to revoke.
~ The license becomes an easement by estoppel, which lasts until the holder receives sufficient benefit to reimburse him for his expenditures.

Front 153

How long does a License coupled with an interest last?

Back 153

A license coupled with an interest is irrevocable as long as the interest lasts.
~ For example, the vendee of a chattel may enter the seller's land to remove the chattel, and a future interest holder may enter and inspect the land for waste.

Front 154

What is a Profit?

Back 154

A Profit entitles the holder of the benefit to take some resources (soil, timber, materials, fish, etc.) from the servient estate.

Front 155

What is implied in every profit?

Back 155

Implied in every profit is an easement entitling the benefit holder to enter the servient estate to remove the resources.
~ All of the rules governing creation, alienation, and termination of easements are applicable to profits. In addition, a profit may also be extinguished through surcharge (misuse that overly burdens the servient estate).

Front 156

What are Coventants Running with the Land at Law (Real Covenants)?

Back 156

A real covenant, normally found in a deed, is a written promise to do something on the land (e.g. maintain a fence) or a promise not to do something on the land (e.g., not build a multi-family dwelling).

Front 157

What do real covenants do (in terms of the land), and what does this mean?

Back 157

Real covenants run with the land at law, which means that subsequent owners may enforce or be burdened by the covenants.
~ A writing is always required.

Front 158

What are the Requirement for a BURDEN to Run?

Back 158

T.I.N. + Privities
1. Intent
2. Notice
3. Horizontal Privity
4. Vertical Privity
5. Touch and Concern

Front 159

What is "intent", in terms of a real covenant?

Back 159

The covenanting parties must have intended that successors in interest to the covenantor be bound by the terms of the covenant.
~ This intent may be inferred from circumstances surrounding the creation of the covenant, but is usually found in the language of the conveyance itself.

Front 160

What is "notice", in relation to a real covenant?

Back 160

Under modern recording acts, to be bound by a covenant, a subsequent purchaser for value must have had actual, inquiry, or constructive (record) notice of the arrangement at the time of purchase.
~ only BFPs are protected; Someone who does not give value may be bound by a covenant at law (not equity) even if he has no actual or constructive notice of the covenant

Front 161

What is Horizontal Privity in terms of a real covenant?

Back 161

At the time the promisor entered into the covenant with the promisee, the two must have shared some interest in the land independent of the covenant (e.g., grantor-grantee, landlord-tenant, mortgagee-mortgagor).
~ The covenant must accompany a conveyance in land.
~ Horizontal privity concerns only the original parties

Front 162

What is Vertical Privity in terms of a real covenant?

Back 162

To be bound, the successor in interest to the covenanting party must hold the entire durational interest held by the covenantor at the time she made the covenant

Front 163

What does Touch and Concern mean in terms of a real covenant?
(two types of covenants)

Back 163

Negative covenants: touch and concern the land if they restrict the holder of the servient estate in his use of that parcel of land. [example]
Affirmative covenants: touch and concern the land if they require the holder of the servient estate to do something, which increases his obligations in connnection with his enjoyment of the land. [ex., maintain a fence]

Front 164

What are the Requirement for Benefit to Run in a Real Covenant?

Back 164

1. Intent
2. Vertical Privity
3. Touch and Concern
If the preceding three requirements are met, the promisee's (i.e., the one who is gaining the benefit from the promise) successor in interest may enforce the covenant (enjoy the benefit)

Front 165

What is Vertical Privity in terms of the running of the benefit?

Back 165

The benefits of a covenant run to the assignees of the original estate or of any lesser estate; i.e., any succeeding possessory estate may enforce the benefit.

Front 166

Touch and Concern - what does it mean in terms of the running of a benefit?

Back 166

The benefit of a covenant touches and concerns the land if the promised performance benefits the covenantee (the party benefiting from the promise) and her successors in their use and enjoyment of the benefited land.

Front 167

What is the remedy for breach of a real covenant?

Back 167

A breach of a real covenant is remedied by an award of money damages, collectible from the defendant's general assets.
~ If an injunction is sought, the promise must be enforced as an equitable servitude rather than a real covenant.

Front 168

How are real covenants Terminated?
(at least 3 ways)

Back 168

As with all other nonpossessory interests, a covenant may be terminated by
(i) a written release,
(ii) the merger of benefited and burdened estates, or
(iii) the condemnation of the burdened property.

Front 169

What are Equitable Servitudes?

Back 169

An equitable servitude is a covenant that, regardless of whether it runs with the land at law, equity will enforce against the assignees of the burdened land who have notice of the covenant.
~ The usual remedy is an injunction.

Front 170

How are equitable servitudes created?

Back 170

Generally, as with real covenants, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds.

Front 171

What is the exception to an equitable servitude being in a writing that satisfies the Statute of Frauds?

Back 171

Negative equitable servitudes may be implied from a common scheme for development of a residential subdivision.
~ Thus, if a developer subdivides land, and some deeds contain negative covenants while others do not, the negative covenants will be binding on all parcels provided there was a common scheme of development and notice of the covenants.

Front 172

When will negative equitable servitudes be implied?

Back 172

Reciprocal negative servitudes will be implied only if, at the time that sales in the subdivision began, the developer had a plan that all parcels would be subject to the restriction. The scheme scheme may be evidenced by:
(i) a recorded plat;
(ii) a general pattern of restrictions, or
(iii) oral representations to early buyers.

Front 173

To be bound by a covenant not in her deed in a subdivision setting, what must a grantee have had?

Back 173

A grantee must have had notice of the covenants in the deeds of others in the subdivision.
~ Notice may be actual (direct knowledge of the covenants), inquiry (neighborhood appears to conform to common restrictions), or record (prior deed with covenant in grantee's chain of title).

Front 174

What are the Requirement for a Burden to Run in equitable servitude situation?

Back 174

A successor of the promisor will be bound by the covenant if:
1. Intent: the covenanting parties intended that the servitude be enforceable by and against assignees;
2. Notice- the successor of the promisor has actual, inquiry, or, record notice of the servitude; and
3. Touch and Concern- The covenant touches and concerns the land (i.e., it restricts the holder of the servient estate in his use of that parcel.

Front 175

What are the Requirements for a Benefit to Run in equitable servitude situation?

Back 175

The benefit of an equitable servitude runs with the land, and thus, is enforceable by the promisee's successors if:
1. Intent - the original parties so intended, and
2. Touch and Concern - the servitude touches and concerns the benefited property.

[In contrast to real covenants, which require vertical and horizontal privity of estate for burdens to run, and vertical privity for benefits to run, no privity of estate is required for an equitable servitude to be enforceable by and against assignees.]

Front 176

How are equitable servitudes Terminated?
(3 ways)

Back 176

Like other nonpossessory interests, an equitable servitude may be extinguished by:
(i) Written release from the benefit holders;
(ii) merger of the benefited and burdened estates,
(iii) condemnation of the burdened property.

Front 177

Generally, What is Adverse Possession?

Back 177

Title by adverse possession results from the operation of the statute of limitations for trespass. If an owner does not, within the statutory period, take action to eject a possessor who claims adversely to the owner, the title vests in the possessor.

Front 178

What are the elements of adverse possession?
(5 elements)

Back 178

(R.O.A.C.H.)
1. Running of the Statute
2. Open and Notorious Possession
3. Actual and Exclusive Possession
4. Continuous possession
5. Hostile

Front 179

When is possession Open and Notorious?

Back 179

Possession is open and notorious when it is the kind of use the owner would make of the land.
The adverse possessor's ocupation must be sufficiently apparent to put the true owner on notice that a trespass is occuring.

Front 180

What is Actual and Exclusive Possession?

Back 180

An adverse possessor will gain title only to land she actually occupies.
~ "Exclusive" means that the possessor is not sharing with the true owner or the public. Two or more people may obtain title by adverse possession; they take title as tenants in common.

Front 181

What is meant by Continuous possession?

Back 181

An adverse claimant's possession must be continuous throughout the statutory period.
~ Intermittent periods of occupancy are not sufficient. However, constant use by the claimant is not required as long as possession is of a type that the usual owner would make.
~ Also, there need not be continuous possession by the same person; an adverse possessor can tack her own possession onto the periods of adverse possession of her predecessors, but privity is required.

Front 182

What is the Hostility requirement in an adverse possession situation?

Back 182

The hostility requirement is satisfied if the possessor enters without the owner's permission.
~ The adverse possessor's state of mind is irrelevant

Front 183

If an adverse possessor uses the land in violation of a restrictive covenant in the owner's deed, what result?

Back 183

If an adverse possessor uses the land in violation of a restrictive covenant in the owner's deed for the limitations period, she takes free of the restriction.
~ If, however, the possessor's use complies with such a covenant, she takes title subject to the restriction.

Front 184

What are the Equitable Defenses to Enforcement of an equitable servitude?
(5)

Back 184

a. The persons seeking enforcement is violating a similar restriction on his own land (unclean hands);
b. A benefited party acquiesced in a violation of the servitude by one burdened party;
c. A benefited party acted in such a way that a reasonable pesron would believe the covenant was abandoned (estoppel);
d. The benefited party fails to bring suit against the violator within a reasonable time (laches); or
e. The neighborhood has changed so significantly that enforcement would be inequitable.

Front 185

What are the Statute of Frauds requirements for a Land Sale Contract (generally)?

Back 185

A contract must be in writing and contain the signature of the party to be charged and the essential terms (e.g., parties, description of land, price).

i - identify of the parties (grantor, grantee)
ii- sufficient description of the land conveyed; is adequate if it provides a good lead as to the indetity of the property to be conveyed.
iii- the purchase price
iv- promises on both sides
v- signed by the party to be charged (usually the grantor).
Parole evidence can be used to supplement a written description or clear up an ambiguity
patent ambiguity - on the face; parole evidence can be used.
latent ambiguity - not on face; parole evidence can be used

Front 186

What can take a land sale contract out of the Statute of Frauds?

Back 186

Part performance (e.g., possession, substantial improvements, payment of purchase price) can take a contract out of the statute.

Front 187

What are the Specific contract requirements to a land sale contract?
(5 items)

Back 187

A contract must be in writing and contain the signature of the party to be charged and the essential terms (e.g., parties, description of land, price).
Part performance (e.g., possession, substantial improvements, payment of purchase price) can take a contract out of the statute.

i - identify of the parties (grantor, grantee)
ii- sufficient description of the land conveyed; is adequate if it provides a good lead as to the identity of the property to be conveyed.
iii- the purchase price
iv- promises on both sides
v- signed by the party to be charged (usually the grantor).
Parole evidence can be used to supplement a written description or clear up an ambiguity

Front 188

What is the Doctrine of Equitable Conversion?

Back 188

Once a contract is signed, equity regards the buyer as the owner of the real property;
The seller's interest (the right to the proceeds of sale) is considered personal property;
~ The bare legal title that remains in the seller is considered to be held in trust for the buyer.
~ The right to possession follows the bare legal title, however; thus, the seller is entitled to possession until closing.

Front 189

Who does the risk of loss fall on before closing?

Back 189

If property is destroyed (without fault of either party) before closing, the majority rule places the risk on the buyer.
~ Even though the risk of loss is on the buyer, if the property is damaged or destroyed, the seller must credit any fire or casualty insurance proceeds he receives against the purchase price the buyer is required to pay

Front 190

Under the Doctrine of Equitable Conversion, what happens regarding Passage of Title of the property on Death of a party?

Back 190

Under the doctrine of equitable conversion, if a party to a land sale contract dies before the contract is completed, the seller's interest passes as personal property and the buyer's interest passes as real property.
~ Thus, if the seller dies, bare legal title passes to his heirs or devisees, but they must give up title to the buyer at closing.
~ If the buyer dies, his heirs or devisees can demand conveyance of the land at closing.

Front 191

What is Marketable Title?

Back 191

Every contract contains an implied warranty that the seller will provide marketable title (title reasonably free from doubt) at closing.
~ It need not be perfect title, but must be free of questions that present an unreasonable risk of litigation.

Front 192

Do Defects in Record Chain of Title render title unmarketable?

Back 192

Title may be unmarketable because of a defect in the chain of title (e.g., variation in land description in deeds, defectively executed deed, evidence that a prior grantor lacked capacity to convey).

Front 193

Do Future Interests Held by Unborn or Unascertained Parties render title unmarketable?

Back 193

While most states consider all types of future interests transferable, when a holder of a future interest is unborn or unascertained it is impossible to convey marketable title.

Front 194

Do Encumbrances render title unmarketable?

Back 194

Generally, mortgages, liens, restrictive covenants, easements, and significant encroachments render title unmarketable.
~ A beneficial easement, however, if visible or known to the buyer, does not impair the marketability of title.
~ Remember that a seller has the right to satisfy a mortgage or lien at closing, with the proceeds of the sale.
~ Thus, the buyer cannot claim title is unmarketable because it is subject to a mortgage prior to closing, if the closing will result in marketable title.

Front 195

Do Zoning restrictions render title unmarketable?

Back 195

Zoning restrictions do not affect marketability, but an existing violation of a zoning ordinance does render title unmarketable.

Front 196

When is the Time of Marketability?

Back 196

If the seller has agreed to furnish title at the date of closing, the buyer cannot rescind prior to that date on grounds that the seller's title is not marketable.
~ Note that in an Installment Land Contract, the seller need not provide marketable title until the buyer has made his last payment.

Front 197

When does liability end for the implied warranty of marketability?

Back 197

After Closing- once the closing occurs and the deed changes hands, the seller in no longer liable on this contractual warranty;
~ the seller is then liable only for promises made in the deed. i.e., it ends with the changing hands of the deed (contract and deed merge).

Front 198

What is the Remedy if Title is Not Marketable?

Back 198

The buyer must notify the seller that his title is unmarketable and give him reasonable time to cure the defects.
~ If the seller fails to cure the defects, the buyer's remedies include rescission, damages, specific performance with abatement, and a quiet title suit.
~ But if closing occurs, the contract and deed merge, and the seller's liability on the implied contractual warranty ends.

Front 199

What is the general rule on Time of Performance in real estate contracts?

Back 199

Courts presume time is not "of the essence" in real estate contracts.
~ Thus, the closing date not absolutely binding, and a party late in tendering her owne performance can perform can still enforce if she tenders within a reasonable time (e.g., two months) after the closing date.

Front 200

What is a party's Liability if time is of the essence?

Back 200

If time is of the essence, a party who fails to tender performance on the closing date is in breach and may not enforce the contract.
~ Even if time is not of the essence, a party who is late in tendering performance is liable for incidental losses.

Front 201

In terms of Tender of Performance, what type of conditions are the buyer's and seller's obligations?

Back 201

The buyer's obligation to pay and the seller's obligation to convey are concurrent conditions.
~ Thus, neither party is in breach until the other tenders performance (even if the closing date passes)
~ If neither party tenders performance, the closing date is extended until one of them does so.

Front 202

What Remedies are available for Breach of a Sales Contract?

Back 202

The nonbreaching party is entitled to damages
(difference between the contract price and market value on date of the breach, plus incidental costs) or, because land is unique, specific performance
~ Note that if the buyer wishes to proceed despite unmarketable title, she can usually get specific performance with an abatement of the purchase price.

Front 203

What is a Seller's Liability for Defective Property?

Back 203

Contracts of sale and deeds of real property carry no implied warranty of quality or fitness for purpose.
~ However, a majority of courts now recognize a warranty of fitness or quality in the sale of a new house.

Front 204

For Sale of Existing Land and Buildings - what may the seller be liable for?

Back 204

The seller of existing buildings (not new construction) may be liable to the purchaser for defects such as a leaky roof, flooding basement, or termite infestation, on any of several different theories:
1) Misrepresentation (fraud)
2) Active Concealment
3) Failure to Disclose

Front 205

When, for the sale of existing land and buildings, will the seller be liabile for defects based on misrepresentation?
(rule)

Back 205

The seller is liable for defects about which he knowingly or negligently made a false statement of fact to the buyer if the buyer relied on the statement and it materially affected the value of the property.

Front 206

When, for the sale of existing land and buildings, will the seller be liabile for defects based on Active Concealment (rule)?

Back 206

The seller will be liable for defects, even without making any statements, if he took steps to conceal the defects (e.g., wallpapering over water damage).

Front 207

When, for the sale of existing land and buildings, will the seller be liabile for defects based on a Failure to Disclose? (rule - 3 elements)

Back 207

Most states hold a seller liable for failure to disclose defects if:
(i) he knows or has reason to know of the defect;
(ii) the defect is not apparent, and the seller knows the buyer is unlikely to discover it upon ordinary inspection; and
(iii) the defect is serious and would probably cause the buyer to reconsider the purchase if known.
~ Factors include whether the property is a personal residence, whether the defect is dangerous, and whether the seller created the defect or made a failed attempt to repair it.

Front 208

Is a general disclaimer sufficient to overcome a seller's liability for fraud, concealment, or (in the states that recognize it) failure to disclose.

Back 208

No
~ If the disclaimer identifies specific types of defects (e.g., "seller is not liable for any defects in the roof"), it will likely be upheld.

Front 209

What do Deeds do?

Back 209

Deeds transfer title to an interest in real property.

Front 210

What are the Formalities for a deed?
(3 things)

Back 210

(i) it must be in writing,
(ii) signed by the grantor, and
(iii) reasonably identify the parties and land (good lead)

Front 211

Is parol evidence admissible to resolve conflicts related to a land description in a deed?

Back 211

~ parol evidence is generally admissible to resolve patent and latent ambiguities if the description gives a good lead, but may not be admissible if the description is inadequate.

Front 212

What will the result be for void and voidable Defective Deeds?

Back 212

A void deed will be set aside by the court even if the property has passed to a bona fide purchaser, but a voidable deed will be set aside only if the property has not passed to a bona fide purchaser (if it has not passed to a bfp, it will be set aside).

Front 213

What are types of Void deeds?

Back 213

Void deeds: include those that are forged, were never delivered, or were obtained by fraud in the factum (i.e., the grantor was deceived and did not realize that she was executing a deed).

Front 214

What are types of Voidable deeds?

Back 214

Voidable deeds include those executed by minors or incapacitated persons, and those obtained through fraud in the inducement, duress, undue influence, mistake, and breach of fiduciary duty.

Front 215

Even when a deed complies with required formalities, it may be set aside by the grantor's creditors in what situations?
(2 instances):

Back 215

(i) if it was made with actual intent to hinder, delay, or defraud any creditor of the grantor; or
(ii) if it was made without receving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent or became insolvent as a result of the transfer.
~ However, the deed will not be set aside as against any grantee who took in good faith and paid reasonably equivalent value.

Front 216

What is required in the Description of Land Conveyed?

Back 216

A description is sufficient if it provides a good lead to the indentity of the property (e.g., "all my land in Stockton").
~ If it is too indefinite, the grantor retains title (but reformation of the deed is a possible remedy).
~ Parol evidence is generally admissible to resolve patent or latent ambiguities if the description gives a good lead, but may not be admissible where the description is inadequate.

Front 217

What are the Rules of Construction, in terms of priority given for inconsistent or conflicting descriptions of land?

Back 217

(i) natural monuments (e.g., oak tree), (ii) artificial monuments (e.g., stakes, buildings), (iii) courses (e.g., angles), (iv) distances (e.g., feet, yards), (v) name (e.g., Blackacre), and (vi) quantity (e.g., 300 acres).

Front 218

For Boundary Cases, presumptively, title to land passes where?

Back 218

to the center of a right-of-way or water boundary. This presumption can be rebutted by language in the deed.
In variable boundary line cases (i.e., water boundary) the slow and imperceptible change in the course of a river or stream operates to change the legal boundary;

Front 219

When will a deed be reformed?

Back 219

A deed will be reformed if it does not represent the parties' agreement because of:
(i) mutual mistake;
(ii) scrivener's error;
(iii) a unilateral mistake caused by misrepresentation or other inequitable conduct.

Front 220

What is the general rule re DELIVERY AND ACCEPTANCE?

Back 220

A deed is not effective unless it has been delivered and accepted.
~ a deed to a dead person is void and conveys no title. The fact that the grantor was unaware of the grantee's death is irrelevant. Title remains in the grantor.

Front 221

In General, what does delivery refer to?

Back 221

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 acknowledgment by the grantor, or anything else showing the grantor's intent to deliver.

Front 222

When is parol evidence available in terms of delivery?

Back 222

Parol evidence is admissible on the issue of intent to deliver, but not to show delivery was conditional; (if a deed is absolute on its face but delivered with an oral condition, the condition is disregarded and the delivery is absolute.

Front 223

Retention of and Interest by a Grantor or Conditional Delivery indicates what?

Back 223

Retention of control or interest by the grantor (e.g., right to revoke) indicates a lack of intent to pass title.
~ Thus, if a grantor executes a deed but does not deliver it during his lifetime, no title passes.
~ Failure to record a delivered deed does not affect the passage of title even if the parties believe that the deed is ineffective until recording.

Front 224

IS A delivered deed that provides that title will not pass until the grantor's death valid?

Back 224

A properly executed and delivered deed that provides that title will not pass until the grantor's death is valid and creates a future interest in the Grantee.

Front 225

What is the result of an Oral Condition Not Contained in a Deed?

Back 225

If a deed is absolute on its face but delivered with an oral condition, the condition is disregarded and the delivery is absolute. (no parol evidence).

Front 226

Where a Grantor Gives a Deed to Third Party, is conditional delivery permissible?

Back 226

Yes

Front 227

What is the result of a Transfer to a Third-party with No Conditions?

Back 227

If the grantor gives a deed to a third party with instructions to give it to the grantee, there is a valid delivery.
~ If the grantor fails to give instructions, the validity of the delivery depends on whether the third party could be considered the grantor's agent
~ If he is the grantor's agent, there is no delivery.

Front 228

Is a Transfer to a Third Party with Conditions in a Commercial Transaction valid?

Back 228

Yes,
A valid conditional delivery occurs when a grantor gives a deed to a third party with instructions to give it to the grantee when certain conditions occur (e.g., if grantee pays purchase price before a certain date).
~ Parol evidence is admissible here to show that delivery is conditional.
(Rember that the rule is contra where the grantor gives the deed directly to grantee; see supra).

Front 229

In Commercial transaction with conditions, when can the Grantor recover a deed?

Back 229

A grantor can revoke only if:
(i) the condition has not yet occurred; and
(ii) there is no enforceable written contract to convey.

Front 230

What is the result of a Breach of Escrow Conditions?

Back 230

If a grantee wrongfully acquires the deed from the escrow holder prior to performance of the condition, title does not pass and the grantee cannot give good title to a subsequent purchaser.

Front 231

What is the "Relation Back" Doctrine?

Back 231

Title usually passes when the condition occurs, but if justice requires it (e.g., grantor dies or becomes incompetent), and there is an enforceable contract to convey, title may "relate back" to the time when the grantor gave the deed to the third party.
~ Rights of intervening BFPs are protected.

Front 232

Can the Grantor revoke a donative Transfer to a Third-party with Conditions?

Back 232

When a grantor gives a deed to a third party to give to a donee when a condition occurs, the main issue is whether the grantor can revoke the deed before the condition occurs.
~ Where the condition is not the grantor's death, delivery is irrevocable and creates a springing executory interest in the donee.
~ Where the condition is the grantor's death, most courts follow the same reasoning but some hold deeds revocable unless there is an enforceable contract to convey (i.e., same as true escrow cases, above).

Front 233

How does Dedication take place?

Back 233

An offer may be made by written or oral statement, submission of a map or plat showing the dedication, or opening the land for public use.
~ To be effective, a dedication must be accepted, which may be done by formal resolution, approval of map or plat, or actual assumption of maintenance or improvements.

Front 234

What are the Convenants in a General Warranty Deed?
(6 of them)

Back 234

1. Seisin
2. Right to Convey
3. Against Encumbrances
4. Quiet Enjoyment
5. Warranty (Covenant of)
6. Further Assurances

Front 235

What is the Covenant of Seisin?

Back 235

The grantor covenants that she has the estate she purports to convey.
~ She must have both title and possession at the time of the grant.

Front 236

What is the Covenant of Right to Convey?

Back 236

The grantor covenants that she has the authority to make the grant.
~ Title alone will satisfy this covenant.
~ Seisin and Right to Convey - are the guaranty that the Grantor owns the estate.

Front 237

What is the Covenant Against Encumbrances?

Back 237

The grantor covenants against the exsistence of physical (e.g., encroachments) or title (e.g., mortgages) encumbrances (already existing).

Front 238

What is true of the first three covenants?

Back 238

These first 3 do not run with the land (are breached, if at all, at the time of conveyance); the last three do run with the land and could be enforced by remote grantees.

Front 239

What is the Covenant of Quiet Enjoyment?

Back 239

The grantor covenants that the grantee will not be disturbed by a third-party's lawful claim of title.

Front 240

What is the Covenant of Warranty?

Back 240

The grantor agrees to defend against reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title.
~ the covenant for quiet enjoyment and the covenant of warranty are generally considered to be identical covenants for title.

Front 241

What is the Covenant for Further Assurances?

Back 241

The grantor promises to perform acts reasonably necessary to perfect title conveyed.
(This covenant is not one of the usual covenants, but is frequently given).

Front 242

If there are successive conveyances by general warranty deed and the last grantee is evicted by lawful claim of title, what result?

Back 242

he may sue anyone up the line.
~ Some states allow him to recover to the extent of consideration received by a defendant-covenantor. Other states limit recovery to the lesser of what he paid or what the defendant-covenantor received.

Front 243

What does a Statutory Special Warranty Deed include?

Back 243

In many states, use of the word "grant" in a deed creates by implication two limited assurances against acts of the grantor (not her predecessors):
(i) that the grantor has not conveyed the same estate or any interest therein to anyone other than the grantee; and
(ii) that the estate is free from encumbrances made by the grantor.

Front 244

What does a Quitclaim Deed do?

Back 244

A quitclaim deed releases whatever interest the grantor has. No covenants of title are included or implied.

Front 245

What is Estoppel by Deed?

Back 245

If the grantor purports to convey an estate she does not then own, her subsequent acquisition of the estate will inure to the benefit of the grantee.
~ This doctrine applies where the conveyance was by warranty deed, or where the deed purported to convey a particular estate.
~ It is not usually applicable to quitclaim deeds.

Front 246

What are the Rights of Subsequent Purchasers in an estoppel by deed situation (as against BFP)?

Back 246

Most courts hold that title inures to the benefit of the grantee only as against the grantor. Thus, if the grantor transfers her after-acquired title to a BFP for value, the BFP will prevail over the original grantee.

Front 247

What are the Remedies of the Grantee in an estoppel by deed situation?

Back 247

The original grantee can accept title or sue for damages for breach of covenant.

Front 248

At common law, if a grantor conveyed the same property twice - who prevailed?

Back 248

the grantee first in time generally prevailed

Front 249

In general, what do Recording Acts do?

Back 249

Recording acts generally protect all bona fide purchasers from secret interests previously created and provide a mechanism for "earlier" grantees to give notice through recordation. These statutes require a grantee to record his deed to put subsequent purchasers on notice of his interest.
Proper recordation gives construcive notice of the first conveyance to everyone, so there can be no subsequent BFPs.

Front 250

Under Recording Acts, who is the burden on to prove that he qualifies for protection?

Back 250

There are three major types, but under all three, the burden is on the subsequent taker to prove that he qualifies for protection under the statute.

Front 251

What is hallmark of a Notice recording act?

Back 251

The key is that the subsequent purchaser had no actual or constructive notice at the time of the conveyance
~ a subsequent BFP (person who pays value without notice of the prior instrument) prevails over a prior grantee who failed to record.

Front 252

What is a Race-Notice Recording Statute?

Back 252

Under a race-notice statute, a subsequent BFP is protected only if she takes without notice and records first (before the prior grantee).

Front 253

What is a Race Recording Statute?

Back 253

Under a pure race statute, whoever records first wins. Notice is irrelevant.

Front 254

Who is Protected by a Recording Act?

Back 254

Only BFPs are protected from the claims of a prior transferee under "notice" and "race-notice" statutes.
~ To be a BFP, a person must be a purchaser, without notice (actual, constructive, or inquiry), and pay valuable consideration.

Front 255

Are Judgment Creditors protected by recording statutes?

Back 255

The majority hold that such a judgment creditor is not protected by the recording statute against a prior unrecorded conveyance by the defendant.

Front 256

Are those who Purchase from an Heir protected?

Back 256

A purchaser from an heir or devisee of the record owner is protected against prior unrecorded conveyances of the record owner (now deceased).

Front 257

What is the Shelter Rule?

Back 257

A person who takes from a BFP will prevail against any interest the transferor-BFP would have prevailed against.
~ This is true even if the transferee had actual notice of a prior unrecorded conveyance.
~ This rule does not, however, help a transferee who previously held title; she cannot "ship through" a BFP to get good title.

Front 258

What does "Without Notice" mean?

Back 258

"Without notice" means the purchaser had no actual, constructive (record), or inquiry notice of a prior conveyance at the time she paid consideration and received the interest.
~ it does not matter if she learns of an adverse claim after the conveyance but before recording

Front 259

What is Actual Notice?

Back 259

Actual notice includes knowledge obtained from any source (e.g., newspaper, word-of-mouth).

Front 260

What is Record Notice?

Back 260

A subsequent purchaser is charged with notice of only those conveyances that are recorded and apear in the chain of title.

Front 261

What are (Extremely) "Wild Deeds"?

Back 261

A "wild deed" is a recorded deed that is not connected to the chain of title. It does not impart constructive notice because a subsequent purchaser could not feasibly find it.

Front 262

Do Deeds Recorded Before the Grantor Obtains Title impart notice?

Back 262

There is a split of authority on whether a recorded deed, received from a grantor who had no title when conveyed but who afterwards obtains title, imparts constructive notice to subsequent purchasers. Most courts say it does not, and a BFP will win on the grounds that the deed is not in his chain of title. The minority view protects the prior grantee over the BFP on an estoppel by deed theory.

Front 263

What is Inquiry Notice?

Back 263

Under certain circumstances, a purchaser is required to make reasonable inquiries. He is charged with knowledge of whatever the inquiry would have revealed, even if in fact he made none.
~ References in recorded instruments to unrecorded transactions, unrecorded instruments in the chain of title (e.g., grantor's title documents are not recorded), and possesion unexplained by the record put a purchaser on inquiry notice. The mere fact that a quitclaim deed was used does not charge the purchaser with inquiry notice.

Front 264

What is the rule re consideration and whether the the purchaser is protected?

Back 264

A purchaser is protected by a recording statute only from the time consideration is paid. Thus, even if the deed was delivered and recorded before the consideration was paid, a purchaser will not prevail over deeds recorded subsequently but before the consideration was paid

Front 265

What is the Effect of Recordation?

Back 265

Recordation gives prospective subsequent grantees constructive notice of the existence and content of recorded instruments. It also raises a presumption of valid delivery and authenticity.
~ However, it does not validate an invalid deed or protect against interests arising by operation of law (e.g., dower, title by adverse possession); to this extent, BFPs are still in jeopardy.

Front 266

What is Ademption?

Back 266

If property is specifically devised or bequeathed in the testator's will, but the testator no longer owns it at the time of death, the gift fails.
Ademption applies only to specific bequests, which can be satisfied only by the delivery of a particular item; they cannot be satisfied by money.
~ A gift of land is always a specific devise.
~ If the testator specifically devises property and then sells or gives away a part of that property, only that portion is adeemed; the remainder passes to the devisee.

Front 267

With Land Under an Executory Contract what is the rule as it relates to ademption?

Back 267

Most state statutes do not apply the ademption doctrine (gift fails) to the proceeds of a contract for sale of land that was executory at the time of the testator's death; i.e., the devisee gets the proceeds in place of the land.
~ These statutes take precedence over the equitable conversion doctrine.

Front 268

When property is damaged or destroyed before the testator's death but the casualty insurance proceeds are not paid until after the testator's death, does the ademption doctrine apply?

Back 268

Ademption does not usually apply.
~ The beneficiary of the specific bequest takes the insurance proceeds.
~ Similarly, ademption usually does not apply to property condemned by the government where the taking was before the death but the condenmantion award was paid after death.

Front 269

What is Exoneration?

Back 269

At common law and in most states, the devisee of specific property is entitled to have the land "exonerated" by the payment of liens and mortgages from the testator's residuary estate. There is a growing trend toward abolition of the exoneration doctrine.

Front 270

What are Lapse and anti-lapse statutes?

Back 270

A lapse occurs when the beneficiary of a gift in a will dies before the testator
~ Under the common law, if a lapse occurred, the gift was void.
~ However, nearly all states now have anti-lapse statutes that prevent lapse by permitting the gift to pass to the predeceasing beneficiary's living descendants under certain circumstances.

Front 271

How are descendants treated, in terms of the anti-lapse statutes?

Back 271

The anti-lapse statute does not save the gift for the predeceasing beneficiary's estate; rather it substitutes the beneficiary's descendants for the beneficiary. Thus, property will never pass under the anti-lapse statute to a predeceasing beneficiary's spouse.

Front 272

Does the conveyance of land includes crops growing on it?

Back 272

Generally, the conveyance of land includes crops growing on it.
However, exceptions exist for:
(i) crops that have already been harvested or severed from the land;
(ii) crops planted by a tenant during the term of the tenancy.
~ For title to crops to remain in a tenant, the tenancy must have been of uncertain duration and have terminated without fault on the part of the tenant.

Front 273

Who are the parties to a mortgage, what is it?

Back 273

The debtor/notemaker is the mortgagor. The lender is the mortgagee.
A mortgage is the pledging of a property to a lender as a security for a mortgage loan. While a mortgage in itself is not a debt, it is evidence of a debt. It is a transfer of an interest in land, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
~ restated: it is a security interest in land; note is evidence of the debt, the mortgage is security for the debt.

Front 274

What is a Deed of Trust?

Back 274

The deed of trust is a deed by the borrower to a trustee for the purposes of securing a debt.
~ In most states, it also merely creates a lien on the title and not a title transfer, regardless of its terms. It differs from a mortgage in that, in many states, it can be foreclosed by a non-judicial sale held by the trustee.[5] It is also possible to foreclose a deed of trust through a judicial proceeding.
~ The debtor/notemaker is the trustor. He gives a deed of trust to third-party (trustee), who is usually closely connected to the lender (the beneficiary). On default, the lender instructs the trustee to foreclose the deed of trust by sale.

Front 275

What is an Installment Land Contract?

Back 275

In an installment land contract, an installment purchaser obtains legal title only when the full contract price has been paid of. Forfeiture clauses, allowing the vendor upon default to cancel the contract, retake possession, and retain all money paid, are common.

Front 276

What is an Absolute Deed and what is the result if given for security purposes?

Back 276

An absolute deed, if given for security purposes, can be treated by the court as an "equitable" mortgage to be treated as any other mortgage (i.e., a creditor must foreclose by judicial action).

Front 277

What is a Sale-Leaseback?

Back 277

A landowner may sell her property for cash and then lease it back from the purchaser for a long period of time. Like an absolute deed, this may be treated as a disguised mortgage.

Front 278

What are the two Methods of Transferring a Note evidencing a mortgage?

Back 278

The note may be transferred either by endorsing it and delivering it to the transferee, or by a separate document of assignment.

Front 279

Which method of note transfer allows one to be a holder in due course?

Back 279

~ Only if the endorsement and delivery method is used can transferee become a holder in due course.

Front 280

What requirements are necessary To be a holder in due course on the note?
(3 requirements)

Back 280

a) The note must be negotiable in form (payable to "bearer" or "to the order of" the named payee, with a promise to pay a sum certain, and no other promises).
b) The original note must be delivered to the transferee.
c) The transferee must take the note in good faith (no notice that it is overdue, has been dishonored, is subject to any defense by the maker) and must pay value for it.

Front 281

What are the Benefits of being a Holder in Due Course?

Back 281

A holder in due course takes the note free of any personal defenses of the maker (e.g., failure of consideration, fraud in the inducement, waiver, estoppel, and payment), but is still subject to real defenses (e.g., infancy, other incapacity, duress, illegality, fraud in the execution, forgery, discharge in insolvency, and any other insolvency).

Front 282

On a Transfer by a Mortgagor, what result for grantee as it relates to the mortgage?

Back 282

A grantee of mortgaged property takes subject to the mortgage.

Front 283

What does it mean for the grantee to signs an assumption agreement?

Back 283

If the grantee signs an assumption agreeement, he becomes primarily liable to the lender, while the original mortgagor is secondarily liable as a surety.

Front 284

What is a Due-on-Sale Clause?

Back 284

Due-on-Sale clauses, which appear in most modern mortgages, allow the lender to demand full payment of the loan if the mortgagor transfers any interest in the property without the lender's consent.

Front 285

What is The Lien Theory of title?

Back 285

According to the lien theory, the mortgagee is considered the holder of a security interest only and the mortgagor is deemed the owner of the land until foreclosure.
~ The mortgagee may not have possession before foreclosure.

Front 286

What is the Title Theory?

Back 286

Under the title theory, legal title is in the mortgagee until the mortgage has been satisfied or foreclosed, and the mortgagee is entitled to possession upon demand at any time.

Front 287

When will courts appoint Receiverships?

Back 287

Most mortgagees attempt to intercept the rents before foreclosure by getting a receiver appointed by the court to manage the property.
~ Courts will generally appoint receivers for rental property upon showing: (i) that waste is occuring; (ii) that the value of the property is inadequate to secure the debt; and (iii) that the mortgagor is insolvent.

Front 288

What is Redemption in Equity?

Back 288

At any time prior to the foreclosure sale, the mortgagor may redeem the property by paying the amount due.
~ If the note or mortgage contains an acceleration clause, the full balance of the note or mortgage must be paid to redeem.
~ This right cannot be waived in the mortgage itself.

Front 289

What is Statutory Redemption?

Back 289

About half the states allow the mortgagor to redeem the property for some fixed period (e.g., six months) after the foreclosure sale has occurred.

Front 290

How is a mortgagee's priority determined?

Back 290

A mortgage's priority is usually determined by the time it was placed on the property.
~ Foreclosure destroys all interests junior to the mortgage being foreclosed, but does not affect any senior interests.

Front 291

How may the Priority among mortgagees be modified?

Back 291

Generally, priority among mortgages follows the chronological order in which they were placed on the property.
~ This priority may, however, be changed by:
(i) the operation of the recording statute if a prior mortgagee fails to record;
(ii) a subordination agreement between a senior and junior mortgagee;
(iii) a purchase money mortgage;
(iv) the modification of a senior mortgage (junior mortgage has priority over the modification); or
(v) the granting of optional future advances by a mortgagee with notice of a junior lien (junior has priority over advances).

Front 292

What is a Purchase Money Mortgage?

Back 292

A purchase money mortgage ("PMM") is a mortgage given in exchange for funds used to purchase the property.
~ PMMs are given either to the seller as part of the purchase price or to a third-party lender.

Front 293

What is the status of the priority of PMMs as opposed to non-PMMs?

Back 293

~ PMMs have priority over non-PMMs executed at about the same time even if the non-PMM was recorded first.
~ As between two PMMs, a seller's mortgage has priority over a third-party's.
~ If there are two third-party PMMs, priority is determined by chronological order. Usually two PMMs have notice of the other's existence; thus, the recording acts are of no use in determining priority.

Front 294

How are the Proceeds of a foreclosure sale distributed?

Back 294

Proceeds are applied first to the expenses of the sale, attorneys' fees, and court costs; then to pay the principal and accrued interest on the foreclosed loan; next to pay off any junior interests in the order of their priority; and finally to the mortgagor.

Front 295

What is the result of a Deficiency Judgment?

Back 295

Where the proceeds are insufficient to satisfy the mortgage debt, the mortgagee retains a personal cause of action against the mortgagor for the deficiency.

Front 296

In Installment Land Contracts, how do courts avoid the harsh result that calls for forfeiture rather than foreclosure as the vendor's remedy for default?
(4 main ways)

Back 296

1. Equity of Redemption -
Several states give the contract purchaser a grace period to pay the accelerated full balance of the contrat and keep the land after default.

2. Restitution
A number of decisions, while granting forfeiture, have required the vendor to refund to the purchaser any amount by which his payments exceed the vendor's damages.

3. Treat as a Mortgage -
thus requiring a judicial foreclosure sale.

4. Waiver -
a vendor's pattern of accepting late payments constitutes a waiver of the right of strict performance.

5. Election of Remedies - The vendor must choose only one remedy (damages or specific performance) and forgo all others.

Front 297

What is the general rule as to Rights Incidental To Ownership Of Land (Natural Rights)?

Back 297

An owner of real property has the exclusive right to use and possess the surface, the airspace, and the soil of the property.

Front 298

What is the right to Lateral Support of land?

Back 298

Ownership of land includes the right to have the land supported in its natural state by adjoining land.

Front 299

What is the rule on Support of Land in its Natural State?

Back 299

A landowner is strictly liable if his excavation causes adjacent land to subside (i.e., slip or cave-in)

Front 300

What is the rule on Support of Land with Buildings?

Back 300

An adjacent landowner is strictly liable for damage to buildings caused by excavation only if it is shown that the land would have collapsed in its natural state. Otherwise, he is liable for such damage only if his excavation was done negligently.

Front 301

What is the rule for Subjacent Support of existing buildings and buildings built after the subjacent estate was created?

Back 301

An underground occupant of land (e.g., a mining company) must support the surface and buildings existing on the date the subjacent estate was created. Liability for subsequently erected buildings requires negligence.

Front 302

What are the two major systems for determining allocation of water in watercourses?

Back 302

the riparian doctrine and the prior appropriation doctrine.

Front 303

What is the Riparian Doctrine?

Back 303

Under this doctrine, the water belongs to those who own the land bordering the watercourse.
~ Riparian rights attach to all contiguous tracts held by the same owner as long as one abuts the water.
~ Riparian owners can use water only in connection with the riparian parcel.

Front 304

What is the Natural Flow Theory

Back 304

Under this theory, a riparian owner's use resulting in substantial or material diminution of the water's quantity, quality, or velocity is enjoinable.
~ Each of the riparian owners have the right to have the lake or stream remain substantially in its natural state (why it's called the natural flow theory); each riparian can use natural or artificial use, so long as quantity and quality are not affected.

Front 305

What is the Reasonable Use Theory?

Back 305

Under this theory, which is the most common, all riparians share the right of "reasonable use" of the water (i.e., one owner's use is not enjoinable unless it substantially interferes with the use of other riparian owners).
~ In determining "reasonable" use, courts balance the utility of the owner's use against the gravity of the harm.
~ Six factors are helpful in making this determination: alteration of flow; purpose of use; pollution; extent of use; destination of water taken; and miscellaneous conduct that may give rise to litigation.

Front 306

Natural vs. Artificial Use - which one prevails?

Back 306

Under either theory, natural uses (human uses, such as consumption, gardening) prevail over artificial uses (irrigation, manufacturing).

Front 307

What is the Prior Appropriation Doctrine?

Back 307

Under this doctrine, individuals acquire rights by actual use.
~ Appropriative rights are determined by priority of beneficial use.
~ If there is a decrease in flow, priority is accorded in terms of time of appropriation.
~ An appropriative right can be lost by abandonment.
~ used in Western states.
~ First in time, first in right - no equality of rights, no reasonable use.

Front 308

What is the Absolute Ownership Doctrine, applied to ground water?

Back 308

The owner of overlying land can take all the water she wishes, for any purpose, including export. (Common Law doctrine). This doctrine is followed by about 12 eastern states.

Front 309

What is the Reasonable Use Doctrine, applied to ground water?

Back 309

It is like absolute ownership, but exporting is allowed only if it does not harm other owners in the same acquifer; the surface owner has to make reasonable use of the water. About 25 states follow this doctrine.

Front 310

What is the Correlative Rights Doctrine, applied to ground water?

Back 310

In California, owners of overlying land own the underground water basin as joint tenants, and each is allowed a reasonable amount for his own use.

Front 311

What is the Appropriative Rights Doctrine, as applied to ground water?

Back 311

Priority of use (not ownership of overlying land) is determinative.
~ This doctrine is followed in some western states.

Front 312

What is the general rule on Surface Water?

Back 312

A landowner can use surface water (water without a channel that passes over land, such as rainfall, seepage, etc.) within her boundaries for any purpose she desires. Questions on surface water usually concern liability for changing natural flow by dikes, drains, etc.

Front 313

What is the Natural Flow (Civil Law) Theory, as applied to surface water?

Back 313

Under this theory, owners cannot alter natural drainage patterns. This rule has been "softened" in most states to allow "reasonable changes."
~ followed by half of the states

Front 314

What is the Common Enemy Theory, as applied to surface waters?

Back 314

an owner can take any protective measures to get rid of the water (e.g., dikes). The rule has been modified by many courts to prohibit unnecessary damage to others' lands.
~ followed by most of the other states

Front 315

What is the Reasonable Use Theory, as applied to surface waters?

Back 315

This theory, the growing trend, Involves balancing the utility of the use against the gravity of the harm.

Front 316

What is the general rule relating to Rights in Airspace?

Back 316

The right to airspace above a parcel is not exclusive, but the owner is entitled to freedom from excessive noise.

Front 317

What is Fructis Naturales?

Back 317

trees, grasses, etc. are viewed as being part of the land; they pass with a conveyance of land;

Front 318

What is Fructis Industrales?

Back 318

come from man's industry (crops); they are called emblements (are usually annual crops, but can be perennial), are real property, until they are severed from the land, then they are viewed as being personal property.

Front 319

What is the rule re a tenant's right to remove?

Back 319

A tenants right to remove crops ends with the termination of the property interest; if the crops are already severed, they belong to the tenant, if not severed, they belong to the landlord

Front 320

What is the rule on Tenancy at Wills for the removal of crops?

Back 320

for a reasonable time after termination of the term, the tenant may sever crops and remove (crops would have to have been planted before notice of termination).

Front 321

What is a Cooperative?

Back 321

In a cooperative, title to the land and buildings is held by a corporation that leases individual apartments to its shareholders.
~ Because of their economic interdependence and because the individual owners are regarded as tenants, a direct restraint on the alienation of an individual interest is valid.

Front 322

What is a condominium?

Back 322

In a condominium, each owner owns the interior of his individual unit plus an undivided interest in the exterior and common areas.
~ Since condominium unit ownership is treated as fee ownership, the ordinary rules against restraints on alienation apply.

Front 323

What is the state's zoning power based on; what is it limited by?

Back 323

~ The zoning power is based on the state's police power and is limited by the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the "no taking without just compensation" clause of the Fifth Amendment.
~ The state may enact statutes to reasonably control the use of land for the protection of the health, safety, morals, and welfare of its citizens.

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What is a Nonconforming Use?

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A use that exists at the time of passage of a zoning act that does not conform to the statute cannot be eliminated at once.

Front 325

What is a Special Use Permit?

Back 325

A special use permit is one that must be obtained even though the zoning is proper for the intended use.
~ It is often required for hospitals, funeral homes, drive-in businesses, etc.

Front 326

What is a variance?

Back 326

A variance is a departure from the literal restrictions of a zoning ordinance granted by administrative action.

Front 327

What is the Standard for determining whether a variance must be granted?

Back 327

(i) it is unreasonable economically to use the land only for its zoned purpose;
(ii) Unique circumstances of the property owner, not shared by general neighborhood conditions, make the zoning unreasonable;
(iii) the essential character of the neighborhood will not change if the variance is granted.

Front 328

What is Euclidean Zoning?

Back 328

a city is separated into regions that are zoned into use districts, typically residential, commercial, or industrial.

Front 329

What are Unconstitutional Takings and Exactions?

Back 329

A zoning ordinance may so reduce the value of real property that it constitutes a taking under the Fifth and Fourteenth Amendments.
~ If the ordinance constitutes a taking, the local government must pay damages to the landowner equal to the value reduction.
~ If the ordinance regulates ativity that would be considered a nuisance under common law principles, it will not be a taking even if it leaves the land with no economic value.

Front 330

What is the result of a Denial of All Economic Value to property?

Back 330

A regulation that deprives the owner of all economic use of his land constitutes a taking (unless the use was prohibited by nuisance or property law when the owner acquired the property).

Front 331

What is the result of a Denial of Nearly All Economic Value of land?

Back 331

If a regulation leaves property with very little economic value, to determine if there was a taking the court will balance:
(i) the social goals of the regulation,
(ii) the diminution in value of the property, and
(iii) the owner's reasonable expectations for use of the property.

Front 332

What is an Exaction?

Back 332

Local governments often demand, in exchange for zoning approval for a new project, that the landowner give up some land for a public purpose, such as street widening.

Front 333

What is the test for when an exaction be unconstitutional?

Back 333

such demands are unconstitutional under the Fifth and Fourteenth Amendments unless the government proves:
(i) the government demands are rationally connected to an additional burden the project will place on public facilities or rights; and
(ii) the dedication is reasonably related in nature and extent to the impact of the proposed development.

Front 334

What is the Remedy for a taking?

Back 334

If a regulation constitutes a taking, the government will be required either to compensate the owner for the property or terminate the regulation and pay the owner damages for the temporary taking.

Front 335

What is the definition of Tresspass to Land?

Back 335

the (i) substantial interference (ii) with a right to possession in land, (iii) by a tangible, physical object;
(Act of physical invasion of P's real property, Intent to bring about physical invasion, Causation).

Front 336

What is Private Nuisance?

Back 336

Conduct by D that creates an unreasonable, substantial interference with P's use or enjoyment of property.
~ it is caused by deliberate, negligent, or hazardous conduct.