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233 Cards in this Set

  • Front
  • Back
The fee simple is distinguished by what features?
Absolute ownership of infinite duration, freely devisable, descendable, or alienable.
The attempt to create a fee tails now creates what?
Fee simple absolute.
The Sinead O' Connor Rule:
Living persons have no heirs.
Grantor must use what to create a defeasible fee?
Clear durational language.that implied automatic forfeiture on violation (e.g., so long as, until, etc.)
What are the characteristics of a defeasible fee?
Devisible, descendable, or alienable, but always subject to the condition,
What future interest accompanies a defeasible fee?
The possibility of revertor. (FSDPOR)
How is the fee simple subject to condition subsequent different than the fee simple determinable?
The fee simple subject to condition subsequent creates a right to reenter and retake, but no automatic termination, (My Perogative)
The power of termination is synonymous with what term?
The right of entry.
What distinguishes a fee simple subject to executory limitation from a fee simple subject to condition subsequent?
Execturory interests are held only by 3rd parties. The grantor or his heirs holds the right to entry on a fsscs.
What future interest accompanies a fee simple subject to exectuory limitation?
The shifting executory interest.
Courts favor or disfavor defeasible fees?
Disfavor, courts disfavor restrictions on the free use of land require clear duration language to find a defeasible fee. Mere hope or intent is not enough.
Abolsulte restrains are?
Abolsulte restrains are void (if not linked reasonable time and limited purpose).
What future interest accompanies a life estate?
In the grantor a reversion, in a 3rd party a remainder.
What is the name for an estate measured by the life of someone other than the life tenent?
Life estate pur autre vie.
What is a life tenent permitted to take from the land?
The life tenent is entitled to all ordinary uses and profits from the land, but cannot commit waste.
What are the 3 types of waste?
1. Affirmative/voluntary.
2. Permissive or neglect.
3. Ameliortive
Under what circumstances may a life tenent consume natural resources from the land?
Prior Use (prior to grant, may be continued)
Reasonable repairs and maintenance.
Grant (expressly given in transfer)
Exploitation (if the land is only suitable for that type of exploitation.
To what extent is a life tenent required to pay ordinary taxes on the land?
To the extent of income profits generated by the land or absent those to the extent of fair market value of the land.
Under what circumstances may a life tenant commit ameliorative waste?
When all future interest holders are known and consent.
What present possessory interest does the possibility of revertor follow?
The fee simple determinable. (return to grantor)
What future interest in the grantor accompanies a grant of less than full quantum?
The reversion, Except for fsd = possibility of revertor, fsscs = right of entry.
What is a remainder?
A future interest in a GRANTEE that becomes possessory unpon the prior estate created in the same insturment. The remainderman is socialable and patient.
What future interests cut short the previous estate?
The executory interest, the possibility of revertor, or the right of entry. The remainder and reversion wait for the prior interest to end.
When is a remainder contingent?
When it belongs to an unascertained person or is subject to condition precedent.
A condition precedent is created through what language?
Language that appears before or is woven into that which creates the remainder. (e.g., to A for 5 years, then, if B does X, to B.)
What did the Rule of Destructibility of Contingent Remainders do at common law?
The remainder was destroyed if still contingent upon the passing of the prior estate.
Under modern law, what result when a prior estate ends and a remainder's condition precedent has not yet been satisfied?
The grantor or his heirs take under a reversion subject to a springing execturoy interest.
What did the Rule in Shelley's Case say?
Where a grant was made to "A for life, then to his heirs" the interests were merged giving A a fee simple absolute, regardless of donor intent.
Under modern law, what result where O conveys "to A for life, then to A's heirs"
The Rule in Shelley's Case has been abolished. A has a life estate. A's heirs have a contingent remainder. O has a reversion.
What does the Doctrine of Worthier Title say and is it still applicable?
Where a living grantor attempts to create a contingent remainder in his "heirs", the remainder is rendered void and O receives a reversion (unless O clearly intended to create a contingent remainder). Most states maintain the Doctrine.
What is the strongest form of remainder?
The indefeasibly vested remainder.
What creates a vested remainder subject to complete defeasence/total divestment?
The vested remainder is subject to a condition subsequent that could cut off his interest.
What language is used to create a vested remainder subject to total divestment?
The conditional language must FOLLOW language that taken alone creates a vested remainder.
"To A for life, remainder to B, provided, however, that if B dies before the age of 25 to C." What result?
A has a life estate.
B has a vested remainder subject to complete defeasence.
C has a shifting executory interest.
O has a reversion in the event that when the condition is breached niether C nor his heirs exist.
What langauge is used to create a condition precedent?
The conditional language must preceed the language granting the remainder. The result is a contingent remainder.
"To A for life, and if B has reached the age of 25, to B." B is 20. What result? What result if A dies prior to B's turning 25?
A has a life estate.
B has a contingent remainder.
O has a reversion.
If A dies prior to B's turning 25, the estate reverts to B subject to B's springing executory interest.
What is a vested remainder subject to open?
A class gift in which at least one member is qualified to take, but whose interest is still subject to partial diminution.
Under the common law rule of convenience when is a class closed?
Whenever one member can demand possession.
What happens if the holder of a vested remainder subject to open dies before the class is closed.
Assuming survival is not a condition to take, their heirs take upon the closing of the class.
What is the difference between a shifting and springing executory interest?
A shifting executory interests cuts off someone other than the grantor, a springing executory interest cuts off the grantor.
What interests do the Rule Against Perpetuitites apply to?
Contingent remainders, executory interests, and some vested remainders subject to open.
To what will the RAP never apply to?
Interests held by O, indefeasibly vested remainders, and vested remainders subject to complete defeasence.
What 4 steps are used to evaluate RAP problems?
1. Determine what interests have been created.
2.Identify the conditions precedent to vesting.
3. Find a relevant measuring life.
4. Determine whether it is certain that within 21 years of the death of the measuring life we will know if the interest holder will take?
What happens when a conveyence is found to violate the RAP?
The offending part of the conveyence is struck.
Under what 2 circumstances is RAP garuanteed to be violated?
1. A class gift conditional on members surviving past the age of 21.
2. Any executory interest without a time limit on when it must vest.
"To A and his heirs, but if the land is not used for farming, then to B and his heirs." What result.
The RAP is violated and so the gift to B must be struck out. The remaining sentence is not grammatically sound and so the entire condition is striken. A has a fee simple absolute.
Under what circumstances can the RAP be avoided?
Charity-to-charity transfers.
What reforms to RAP have been implemented?
The "wait and see doctrine/second look" and the Uniform Statutory Rule Against Perpetuities.
What is the majority position with respect to RAP?
Must states have adopted the "wait and see doctrine" under which the validity of the future interest is evaluated at the end of the measuring life to see whether the interest has actually vested, Also most use the cy pres doctrine to reform the conveyence to conform as closely as possible to the grantor's intent without violating RAP (such as reducing contingent age to 21).
What does the Uniform Statutory Rule Against Perpetuities do?
Codifies the RAP and provides an alternate 90 year vesting period.
What are the 3 types of concurrent interestes?
The joint tenency.
Tenency in the entirety.
Tenency in common.
What are the distinguishing characteristics of a joint tenency?
All tenents hold identical interests and have a right of survivorship. It is alienable, but not descendable.
What must be present to form a joint tenency?
The grantor must explicitly state the right of survivorship. Also the 4 unities must be present. T-TIP
Time
Title
Identical Interest
Possession, right to possess the whole
What is the common way to create a joint tenency on land already held?
Through the use of a straw intermediary.
How can a joint tenency by severed?
SPAM.
Sale
Partition
and
Mortgage
What is the doctrine of equitable conversion and how does it apply to a joint tenency?
The doctrine of equitable conversion provides that the act of entering a sale effectively severs the joint tenency even where the sale has not yet occured.
In addition to transferring to an outside party how may a joint tenent sever the relationship?
1. Through voluntary agreement.
2. By petitioning a court for partition in kind.
3. By petitioning a court for a forced sale with the revenues divided between the parties. This will only occur where it is in the best interest of all.
Under the title theory of mortgages what effect will a joint tenents placing his interest under mortgage or lien have?
It will sever the tenency. This is the minority of states.
Under the lein theory of mortgages what effect will a joint tenents placing his interest under mortgage or lien have?
The joint tenency will survive unless the interest is actually forclosed upon or sold. This is the majority viewpoint.
In states where tenency in the entirety exists, how is it created?
Any conveyence to a husband and wife with the right of survivorship is presumed to be a tenency in the entirety.
What is the major distinguishing factor of the tenency in the entirety?
Niether tenent can unilaterally destroy it. Creditors of a single spouse cannot take.
What are the distinguishing factors of the tenency in common?
Each co-tenent owns a seperate part, but has the right to possess the whole. The interest is fully alienable, devisable, and descendable. There are no survivorship rights.
What is a right of survivorship?
The surviving holder automatically takes the entire interest. There is no probate and the dying person's heirs take nothing.
May one co-tenent exclude another from part of the premises?
No, this is a wrongful outster.
When must a co-tenent pay rent to his co-tenents?
When he has rented the premises to a 3rd party each co-tenent is owed his share of the income. Absent a wrongful outster no co-tenent need pay rent for personal use of the property.
Can a co-tenent acquire the whole interest through adverse possession?
No, because without a wrongful ouster there is no hostility.
What are co-tenents responsibilities with respect to carrying costs?
Each co-tenent is responsible for a share proportionate to their ownership interest. Carrying costs include taxes and mortgage interest.
Do co-tenents have to contribute to repairs to the property?
Yes, assuming the paying co-tenent has told the others are the need for repair they have a right of contribution for reasonable and necessary repairs.
Is there a right of contribution for improvements under a co-tenency?
No, but credit or liability for the changes in value is debited directly to the improver in the event of a sale. The co-tenents may bring an action for ameliorative waste for improvements.
What are the 4 types of leasehold estates?
The tenency for years.
The periodic tenency.
The tenency at will.
The tenency at sufference.
Under what circumstances may a periodic tenency be implied?
1. Where no set duration is given, but provision is made for payment at intervals.
2. Where an oral agreement for a term of years has been made in violation of the statute of frauds measured by the way rent is tendered.
3. Where the L elects to holdover a T who has wrongfully stayed beyond their original lease.
How should notice be given to terminate a periodic tenency?
Notice should generally be written and at common law provided at least equal to the length of the period unless otherwise agreed. A year-to-year tenency need only give 6 months notice.
When must a periodic tenency end?
At the end of a natural lease period (e.g., not 30 days from when notice is given, but the period ending after the 30 days).
define a tenancy at will.
a tenancy of no fixed duration. unless party expressly agree otherwise the payment of rent at intervals will create a periodic tenancy
a tenancy at will can be terminated how?
by either party at any time
what is a tenancy at sufferance?
T wrongfully holds over after the expiration of their lease. last until L evicts or elects to hold T to a new tenancy
what are T's duties to 3rd parties under tort law?
1. keep premises in reasonably good repair
2. T is liable to invitees even where L promised to make repairs (but indemnify from L)
when the lease is silent what are T's duties to repair?
T must maintain the premises and perform ordinary repairs. T must not commit waste
what is a fixture?
a chattel that has been annexed to the reality in such a way as to objectively show intent to permanently improve the realty
can T remove a fixture that she installed?
no, if the necessary intent to permanently improve is evidence T cannot remove. to do so is to commit waste
when is a T installement a fixture?
1. express agmt controls
2. T can remove chattels so long as removal does not cause substantial harm to the premises (otherwise shows intent to install fixture)
what result where T has covenanted to maintain property that is destroyed w/out T's fault?
CL- T responsible
Mod- T may terminate lease
when may a landlord use self-help to evict a tenant?
never
what result where T vacates premises w/ time remaining on the lease?
SIR
Surrender- L may accept T's surrender (if more than 1 yr need written)
Ignore- (min) T may ignore the abandonment and demand rent
Re-let-on T's behalf, holding him liable for any deficiency
Maj-req attempt to re-let as mitigation
what result where holdover T is in the premises at the beginning of new T's lease?
Maj. L has duty to put T in physical possession and is in breach.
what is the implied covenant of quiet enjoyment?
T has right to quiet use and enjoyment of premises w/out interference from L. covers both residential and commercial properties.
what constitutes a constructive evication?
SING
Substantial Interference (due to L's actions or failure to act)
Notice (T has notified and L has failed to act meaningfully)
Goodbye-T must vacate w/in reasonable time
what L duty does wrongful evication or constructive evication breach?
the covenant of quiet enjoyment
under what circumstnaces is L liable for the acts of other Ts?
1. must not permit a nuisance
2. L must control common areas
what is the implied warranty of inhabitability?
premises must be fit for basic human habitation. non-waivable. applies only to residential. local housing code may supply standard.
what remedies does T have for a breach of the implied warranty of inhabitability?
MR*3
Move-out and end lease
Repair and Deduct (if allowed in juris)
Reduce Rent (or withhold, place in escrow)
Remain in possession and seek money damages
when can T transfer his interest to another party?
in the absence of prohibition in the lease, T can transfer all (assignment) or part (sublease)of his interest
once L has agreed to one transfer of T's interest...
he waives the right to object to future transfers unless he expressly reserves that right
T assigns his entire interest to T2, T and T2 are what? T2 and L? L and T?
L and T2 are in privity of estate, but not K (liable for all covenants that run w/ the land)
L and T are in privity of K, but nof estate (secondarily liable to eachother). T and T2 are in privity of K.
T assigns to T2 who assigns to T3. T3 breaches covenants. Who owes who what?
L can proceed against T3 (privity of estate) or T (privity of K).
if T subleases to T2, what are the resulting privities?
L is in privity of K and estate to T. T1 and T are in privity of K.
What is the L's tort liability?
CL- caveat lessee. Exceptions:
CLAPS
1. common area
2. latent defects
3. assumption of repairs
4. public use rule
5. short term lease of furnished dwellings
what is the latent defect rule as it applies to L's tort liability?
L must warn T of hidden defects of which L has knowledge or reason to know.
does L have a duty to repair latent defects?
NO. Only to warn T.
when is L liable for failure to repair non-common areas of the property?
where L has assumed repairs there is a duty to complete w/ reasonable care
what is the public use rule?
T is liable for injuries where he leases public space w/ knowledge that due to the nature of the defect and the length of lease T will not repair.
What is the rule regarding defects to short term leased property?
L is liable for any defects that injure T.
definition of an easement
A grant of a nonpossessory interest that entitles the holder to a form of use of another's land.
what is a negative easement?
entitles the holder to prevent the servient tenament from doing something otherwise permissable
what types of negative easements are permissable?
LASS
light
air
support
streamwater (from artificial flow)
(min of states, including CA recognize scenic)
what is an easement appurtenant?
the easement benefits its holder in use of his property. must involve a dominent tenament and a servient tenament
what is an easement is gross?
allows holder some advantage not related to use of his land. only a servient tenament involved
how does an appurtenant easement transfer? an easement in gross?
easement appurtenant passes automatically with the dominent tenament regardless of mention in the conveyence.
an easement in gross is not transferrable unless for commercial purpose
does the burden of an easement appurtenant transfer with the servient estate?
yes, except for bona fide purchaser w/out notice
how can affirmative easements come into being?
PING
perscription
implication
necessity
grant
what is an easement by grant?
an easement that has been expressly by granted. for longer than a year it must be in writing w/ formal elements of a deed.
when does an easement arise from implication?
1. the previous use was apparent
2. the parties expected the use to continue/would survive divsion of property;
3. because use is reasonably necessary to use and enjoyment of the dominent estate
when does an easement by necessity arise?
where division of land creates a landlocked estate w/no way out except over grantor's land
when does an easement by perscription arise?
through adverse possession
COAH
continuous use for statutory period
open and notorious
actual use
hostile (w/out consent)
how is the scope of an easement determined?
by the terms of the grant or the conditions that created it
can the dominent tenament unilaterally incease scope of easement in response to changing condition?
no, no unilateral expansion
how can easements be terminated?
END CRAMP
1. estoppel-material change in reliance on holder's assurances
2. necessity-expire when the necessity ends (unless reduced to express grant)
3. destrution-of the servient land
4. condemnation-of servient estate
5. release (written)
6. abandonment
7. merger doctrine
8. perscription
how is an easement terminated by abandonment?
easement holder must demonstrate intent never to use easement again thorugh physical action (not mere words)
what is the merger doctrine as applies to easements?
easement is extinguished when the title to easement and the title to the servient land are vested in the same person. later seperation of title does not revive the easement (but look for necessity)
what is a license?
the privilege to enter another's land for some deliniated purpose
do licenses need to be written?
no, they are not subject to the statute of frauds
how can a license be revoked?
they are freely revokable so long as not prevented by estoppel
neighbor orally tells another neighbor they can drive across their property. what result?
unenforcable oral easement. but creates a freely revokable license.
when will estoppel apply to prevent revocation of a license?
where licensess has invested substantive money or labor or both
what is a profit? what rules apply?
entitles the holder to enter servient land and remove something from it. same rule as easements.
what is the difference between a covenant and an easement?
a covenant is a contractual right, it is not a propety interest.
what is restrictive covenant?
a promise to refrain from doing something related to land.
what is an affirmative covenant?
a promise to do something related to the land.
how do you know a covenant from an equitable servitude?
covenant = money damages; servitude = equitable
what elements are necessary for a burden to run with the land?
WITHN
Writing
Intent (original parties)
Touch and Concern
Horizontal and Vertical Privity
Notice
what effect does foreclosure have on junior mortgage interests?
subordinated interests are terminated if given notice. if not given notice, junior interest may forclose the property.
easement holder does not record their interest prior to mortgage holder recording interest. what result?
in a race notice jurisdiction, the easement holder loses interest.
do covenants to pay home owner's fees run with the land?
no, there is no touch and concern because the promise must effect their relations as land owners and not community members
what type of privity is required for a burden to run with the land?
horiztonal and verticle.
how is horizontal privity established?
there must be a nexus between the original covenantors. they were in a succession of estate relationship: grantor/grantee, landlord/tenant, mortgagor/ee.
what is required to establih verticle privity?
original party and current landholder must have some non-hostile nexus (devisee, contract, etc.)
under what circumstances does verticle privity not exist?
adverse possession
for a burden to run with the land who must have notice of the covenant?
the person assuming the burden must have notice when taking land
what is required for a benefit to run with the land?
WITV
writing
intent
touch and concern
verticle privity
what types of covenants touch and concern the land?
covenants that effect the parties as landowners (length of lease)
what is an equitable servitude?
a promise that touches and concerns the land that equity will enforce against successors
what is required for an equitable servitude?
WITNES
Writing
intent
touch and concern
notice (burdened land had notice)
is privity required to enforce an equitable servitude?
no
when does an implied equitable servitude arise?
under the common scheme doctrine a reciprocal negative servitude will be implied where: 1) some lots contain a negative covenant 2) the subdivider had a general scheme of residential development including D's lot; and 3) D had notice of the promise contained in prior deeds
under the common scheme doctrine what constitutes notice to D?
AIR
actual notice
inquiry notice (the neighborhood conforms to the scheme)
record notice (publically recorded docs) (courts are split whether D is on record notice as to deeds trasnferred to others by a common grantor)
what defenses exist against enforcement of an equitable servitude?
changed conditions--so extensive that the entire area has changed
what is the definition of adverse possession
possession for a statutory period of time can ripen into title
what are the elements of adverse possession?
continuous uninterrupted possession for the given statutory period
open and notorious (type of use the usual owner would make)
actual (not symbolic)
hostile (no permission)
does subjective state of mind matter for adverse possession?
no, never
what is tacking?
one adverse possessor can tack his time onto a prior possessor where they were in privity (any non-hostile nexus)
how does disability effect adverse possession?
statute of limitations will not run if true owner is disabled at the time possession begins
what are the requirements for a valid land k under the statute of frauds?
must be in writing signed by the party it is being enforced against. must describe the land and state consideration.
what result where the quantity of land described in the land k does not equal the survey?
S can enforce specific performance for minor defect. B can enforce. Both are subject to pro rata abatement of price.
under what circumstances will an oral k for land be enforced?
The doctrine of part performance. B does 2 out of 3: takes possession, remits at least part payment, or makes valuable improvements.
who owns the land afte the signing of the k, but before closing?
under the doctrine of equitable conversion B owns the land immediately (so he bears risk of loss unless k says otherwise)
what implied promises exist in every land k?
1. marketable title
2. no false statements of material fact
what renders a title non-marketable?
1. even a part of title was obtained through adverse possession w/out good record title
2. existence of encumberances (servitudes, mortgages) unless B waives
3.zoning violations
what types of misstatements breach the implied promises in land k?
material lies or omissions
what result where property is sold "as is" or "with all faults"?
the disclaimed does not excuse S for liability from fraud or failure to disclose
does a land k contain an implied warranty of fitness or habitality?
no, except new homes purcahsed from builder
what document passes title in land k?
the deed
what must a deed do to validly pass title?
Lawfully Executed And Delivered
Lawful execution of deed (in writing, signed by grantor, unambigous description)
Delivery
does a deed need to recite consideration?
no
what result where deed contains incorrect description of land?
does not need to be perfect, but must be unambiguous. good enough if land indicated can be determined w/ research.
what is valid delivery for a deed?
action constituting present intent to be immediately bound by transfer of the deed (deed itself need not be physically trasnferred)
the recipient's express rejection of a deed...
defeats delivery
what result where a valid deed is trasnfered with an oral condition?
the transfer is valid and the oral consideration drops out.
what is the advantage of delivery of a deed via escrow?
title passes automatically upon satiffaction of conditions. can be passed even if grantor dies or becomes incompetant
what are the 3 types of deeds?
1. the quitclaim
2. the general warranty
3. the statutory special warranty deede
define a quitclaim deed?
contains no covenants including good title to land. however, because of implied marketability promise must deliver good title at closing. problems arising after closing do not effect grantor
what result where S transfers bad title at closing under a quitclaim deed?
in breach due to the implied promise of marketability
define the general warranty deed?
S warrants against all defects in title including those attributable to grantor's predecessors
what covenants are generally contained in a general warranty deed?
1. seisen-owns estate
2.right to convey
3.against encumberances
4.for quiet enjoyment (disruption by 3rd pty lawful claim)
5. of warranty-promise to defend title
6. for further assurances-perfect defects in title if they arise
what does the covenant of warranty require the grantor to do?
promise to defend the grantee against lawful claims from 3rd partys
what does the covenant for further assurances do?
grantor promises to do anything reasonably necessary to perfect title if it turns out to be imperfect
define the statutory special warranty deed?
by statute in many states. only of grantor's behalf:
1. promises that has not conveyed land to anyone else
2. land is free of encumberances made by grantor.
who wins in a notice jurisdiction?
the last bona fide purchaser wins regardless of recording order
who wins in a race-notice jurisdiction?
the bona fide purchaser who records first
what is a bona fide purchaser?
one who purchases for value (substantial pecuniary consideration) and wihtout notice that someone else got there first
what forms of notice is a buyer charged with?
AIR
actual
inquiry (what exam of the land would show)
record (properly recorded deeds)
inquiry notice imposes what duty on a buyer?
the duty to inspect prior to trasnfer of title. also any unrecorded transactions referenced in recorded deed that would be revealed on reasonable follow-up
how do you determine whether the statute is notice v. race-notice?
"conyence is recorded" v. "conveyance first recorded"
O conveys to BFP A, who properly records. O then conveys to BFP B who records. What result?
A wins because his recording placed B on record-notice, defeating his BFP
what is a properly recorded deed recorded in>
a series of recorded documents called the chain of title, generally found in a title search of the grantor/grantee index
what is the shelter rule?
pty who takes from a BFP prevails against anyone the BFP would have prevailed against (even if pty is not a BFP) "steps into shoes of the BFP"
O conveys to A, who does not record. O conveys to B, a BFP, who records. B conveys to donee C, who knows of O-->A transaction. A v. C?
C wins under the shelter rule becasue she took from B who, as BFP who 1st recorded, would win in either notice or race-notice jurisdiction.
what is a wild deed?
a deed unconnected to the chain of title (due to a missing link). Does not give record notice and is not properly recorded.
what is estoppel by deed?
one who wrongfully conveys realty in which they do not have an interest cannot later deny the validity of the conveyance if they later acquire title
what is a mortgage?
a conveyance of a security interest in land used as collateral for a loan. requires a debt + a voluntary lien in debtor's land to secure the debt.
does a mortgage need to be in writing?
generally yes to satisfy the statute of frauds
what is an equitable mortgage?
situation in which O gives creditor the deed rather than executing a note on the understanding that deed is being held as collateral. parol evidence admiss to show this.
what result where mortgagee sells an equitable mortgage to a BFP?
the BFP has title to the land, but O may sue the mortgagee for fraud and the proceeds
how can a mortgagee transfer his interest?
1. by endorsing the note+ delivery; or
2. executing document of assignment
what is the transferee of an endorsed and delivered mortgage note called and what are his rights?
he is a "holder in due course" and take the note free of any personal defenses that could have been used against the original mortgagee
what are the personal defenses available against the original mortgagee, but not against a holder in due course?
persoanl defenses--lack of consideration, fraud in the inducement, unconscionability, waiver, and estoppel
what are the real defenses available against the original mortgagee or the holder in due course?
MAD FIFI*3
Material Alteration
Duress
Fraud in the factum (lie about the insturment)
Incapacity
Illegality
Infancy
Insolvancy
what criteria must a holder in due course meet?
1. note must be negotiable, payable to named mortgagee
2. original note is endorsed by the mortgagee
3. the orgininal note delivered to the transferee(not a copy)
4. trasnferee must take in good faith w/out notice of illegality
5. transferee must give value for the note (more than nominal)
what result where the mortgagor sells property and mortgage has been properly recorded?
the lien remains with the land (protected by the recording statutes)
how do recording statutes apply to mortgages?
the same as they do for deeds
in a notice jurisdiction, what result where mortgagee records after property is sold to BFP?
BFP takes free from the mortgage
who is liable where :B assumed the mortgage"?
both B and O are liable. B is primary and O is secondary.
who is liable where "B takes subject to the mortgage"?
B is not personally liable. O is liable. But if properly recorded the land could be foreclosed upon.
what result where the proceeds from foreclosure sale are less than outstanding debt on mortgage?
mortgagee brings a deficiency judgment against debtor
what result where proceeds from foresclosure sale are greater than outstanding debt?
junior liens are paid in order of priority. remaining surplus goes to debtor.
what is the heirarchy of payment in a foreclosure sale?
1. attys fees and foreclosure expenses
2. forclosing pty
3. all junior liens in order of priorty
4. surplus to debtor
what effect does foreclosure have on junior interests? on senior interests?
junior interests arre terminated w/ the foreclosure so long as they are joined to the action as necessary ptys. Senior interests (or non-joined jrs) are not effected and stay w/ the land.
what result where 2nd priority creditor forecloses on the property and B purchases it?
B takes subject to senior interest, but is not personally liable for the debt. due to possibility of foreclosure, however, B is likely to want to pay off mortgage.
how is priority determined for mortgagees?
Mortgage must be recorded to establish priority. 1st in time, 1st in right rule applies.
what is the purchase money mortgage? what special right does it have?
a mortgage securing a loan used to acquire the encumbered land (even if made for a class of land purchases, rather than the specific property in question). this mortgage always gets first priority
what does the principle of equitable redemption say>
the debtor may redeem the land at any point up to the foreclosure sale, but this right disappears upon valid sale
what is an acceleration clause?
a clause requiring full payment of mortgage upon default. to redeem mortgagor must pay balance + accrued interest + costs
can a mortgagor waive the right to redemption?
no, this is called clogging
what is statutory redemption?
statute giving debtor right to redeem for a period after the foreclosure sale. typically requires payment of foreclosure sale price, rather than original debt. nullifies the foreclosure sale. in 1/2 of states.
in most states with a statutory redemption period who has the right of possession during the period?
the mortgagor
what does the lateral support rule say?
if P's improved land caves in due to D's excavation of adjacent land, D is only liable for negligence unless P can show that his land would have collapsed even if not improved (then strict liabilityy)
what does the riparian doctrine state and what does it apply to?
it applies to watercourses (streams, rivers, lakes). the water belongs to the land bordering the watercourse. they share the right of reasonable use.
when is a riparian liable to other riparians?
for unreasonable interference with the other's use
what is the rule regarding ownership of water?
originally water belongs to the state, but individuals may acquire the right to divert it, even if not a riparian. rights are determined by priorty of beneficial use (1st in time, 1st in right). any productive use is beneficial for these purposes
what is groundwater? what rights does a surface land owner have to it?
water below the surface of the earth that is not confined to a known channel. surface owner is entitled to make reasonable use, but not to be wasteful.
what are surface waters? what rules apply?
waters coming from rain or snow that has not yet reached a natural watercourse. under the common enemy rule, landowners may make any changes to their land to combat the flow of surface water (but many courts prohibit chages that create unncessary harm to other's land).
what is tresspass?
invasion of the land by tangible physical object. remove through action for ejectment.
what are possessor's land right?
the right to be free from tresspass and nuisance.
what is a private nuisance?
a substantial and unreasonable interference w/ another's use and enjoyment of their land (includes odors and noise)
what is the rule regarding hypersensitive Ps and nuisance?
no special treatment for hypersensitive Ps
what is eminent domain?
the government's 5th amendment power to take private property for public use in exchange for just compensation.
what is a implicit or regulatory taking:/
government regulation that has the effect of rendering property useless (wipes out investment)
what is the remedy for a regulatory taking?
the government must either compensate the owner or terminate the regulation and pay damages
what is zoning?
the state may enact statutes that reasonably control land use pursuant to its police powers
what is the principle of varience in zoning?
the proponent who wants an exception must show:
1. undue hardship; and
2. that the varience won't decrease neighboring property values
how are variance actions determined?
by administrative proceeding usually by zoning board
what result where a once lawful use of property is now deemed unconforming?
the use cannot be eleminated all at once unless just compensation is paid.
what is an exaction?
amenities sought by the government in return for building permission
when is an exaction valid?
it must be reasonably related in nature and scope to the impact of the proposed development. exactions are presumptively constitutionally suspect.