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142 Cards in this Set
- Front
- Back
- 3rd side (hint)
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FEE SIMPLE ABSOLUTE
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Creation: "To A or "To A and his Heirs"
Distinguishing Characteristics: Absolute ownership. Devisable, descendable, and alienable. Accompanying future interest: NO |
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FEE TAIL
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Abolished
Instead turns into Fee simple absolute |
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WHAT ARE THE DEFEASIBLE FEES?
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FEE SIMPLE DETERMINABLE
FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION |
RULES OF CONSTRUCTION:
(1) Words of mere HOPE/DESIRE/INTENTION are insufficient to create a defeasible fee. (2) Absolute Restraints on Alienation are VOID (must be linked to a reasonable time limited purpose) |
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Fee Simple Determinable (Defeasible Fee #1)
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Creation:
"To A for so long as..." "To A during..." "To A until..." Grantor must use clear durational language. HINT - FRANK SINATRA DOESN'T PREFER ORVILLE REDENBACHER (FSDPOR): fee simple determinable (ALWAYS COMES WITH) Possibility of Reverter If stated condition is violated, FORFEITURE IS AUTOMATIC Distinguishing Characteristics: -Devisable, Descendable & Alienable - BUT Always subject to the condition. Accompanying Future Interest? - Yes. The POSSIBILITY OF REVERTER in the GRANTOR |
Ex. O conveys Blackacre to X so long as it is never used for industrial purposes.
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Fee Simple Subject to Condition Subsequent (Defeasible Fee #2)
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Creation:
- "To A, but if X event occurs, grantor reserves right to reenter & retake" - Grantor must use clear durational language AND carve out the right to re-enter Distinguishing Characteristics: -NOT automatically terminated if condition occures, but could be cut short at GRANTOR'S OPTION Accompanying Future Interest? -YES - Right of Reentry/Power of Termination |
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Fee Simple Subject to Executory Limitations (Defeasible Fee #3)
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Creation:
- To A, but if X event occurs, THEN to B" Distinguishing Characteristics: -Same as Fee Simple Determinable, except AUTOMATIC FORFEITURE in favor of someone OTHER THAN GRANTOR. Accompanying Future Interest? -YES - Shifting executory interest |
Ex. "To Jenny, but if she becomes a massive slut, to B her ugly sister"
J has a fee simple subject to B's shifting executory interest. |
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THE LIFE ESTATE and LIFE ESTATE PUR AUTRE VIE - CREATION
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Life state must be measured in explicit lifetime terms, NEVER in terms of Years
Life estate pur autre vie = life estate measured by a life OTHER THAN THE GRANTOR's |
Life estate - "To A for Life"
Life estate pur autre vie - "To A for life of B" |
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LIFE ESTATE/LIFE ESTATE PUR AUTRE VIE - Characteristics/Accomp. Future Interest/Gen. Rules
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Characteristics:
-Holder of life estate = life tenant -Life Tenant's actions limited by DOCTRINE OF WASTE (see sep. card) Accompanying Future Interest: -YES - Reversion in O (if life estate); REMAINDER in 3rd party (if life estate pur autre vie) General Rules: (1) Life tenant is entitled to all ordinary uses and profits from the land (2) Life Tenant Must Not Commit Waste |
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VOLUNTARY AFFIRMATIVE WASTE (Life Estates, Waste #1) [Nat. Resources, Open Mines Doct.]
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Def: Overt Conduct Causing a Drop in Value
Vol. Waste and NATURAL RESOURCES General Rule: Life Tenant must not consume or exploit natural resources on the property - BUT 4 EXCEPTIONS APPLY (PURGE) 1. (PU) Prior Use - Prior to the grant, land was used to exploit (LT can continue unless otherwise agreed) 2. (R) Reasonable Repairs - LT may consume natural resources for reasonable repairs and maintenance. 3. (G) Grant. LT may exploit if expressly granted the right 4. (E) Exploitation: Land is suitable ONLY for exploitation |
OPEN MINES DOCTRINE -
If mining occurred before LT got estate, LT can continue to mine BUT limited to MINES ALREADY OPEN. |
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PERMISSIVE WASTE/NEGLECT
(Life Estates, Waste #2) [ob. to repair, taxes] |
Def: LT lets land fall into disrepair
Obligation to Repair - LT must SIMPLY MAINTAIN the premises in reasonably good repair (need do no more) Taxes: If income/profits from land - LT obligated to pay all ordinary taxes. If no income/profits - LT obligated to pay taxes to the extent of fair rental value. |
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AMELIORATIVE WASTE
(Life Estates, Waste #3) |
LT must not engage in acts that will ENHANCE the property's value UNLESS future interest holders:
(1) Are Known (2) and Consent |
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FUTURE INTERESTS CAPABLE OF CREATION IN THE GRANTOR
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(1) Possibility of Reverter - Accompanies ONLY the Fee Simple Determinable (FSDNPOR)
(2) Right of Entry/Power of Termination - Accompanies ONLY the Fee Simple Subject to Condition Subsequent (3) The Reversion - Future interest in grantor who transfers estate of lesser quantum than she started with (other than a fee simple determinable or a fee simple subject to cond. subsequent) Ex. O hold fee simple absolute, conveys it "To A for Life" - thus giving A a life estate, less than what O had. |
Note - 6 categories of future interests total - classified by whether they are retained by the grantor or transferee (3rd Party)
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FUTURE INTERESTS in TRANSFEREES & Def. of Remainders
(JUST LIST THREE - SEE OTHER CARDS FOR DESCRIPTIONS) |
(1) Vested Remainder
(1a) Indefeasibly Vested Remainder (1b) Vested Remainder Subject to Complete Defeasance (1c) Vested Remainder Subject to Open (2) Contingent Remainder (3) Executory Interest (3a) Shifting Exec. Interest (3b) Springing Exec. Interest |
REMAINDER = future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance.
Remainderman is: sociable (always accompanies an estate of known fixed duration - usually life estate or term of years); Patient & Polite (never cuts short or divests a prior transferee) |
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VESTED REMAINDERS v. CONTINGENT REMAINDERS
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Remainder is VESTED if:
(1) Created in an ascertained person; AND (2) not subject to any condition precedent. Note - condition precedent is one that appears BEFORE language creating the remainder. Ex - To A for life, then, if B graduates from College, to B. Remainder is CONTINGENT if: (1) created in an unascertained person, AND/OR (2) subject to a condition precedent |
Effect of Fulfillment of Condition Precedent for Contingent Remainders = TRANSFORMED into INDEFEASIBLY VESTED REMAINDER
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The Doctrine of Worthier Title
(Contingent Remainders) |
NOTE - RULE of CONSTRUCTION, not of law - so if grantor's intent clearly shows it is what is desired, thats ok.
Applies when: Grantor (O) is alive, and tries to create future interest in his heirs. Ex. - O (alive) to A for life, then to O's Heirs EFFECT: If it applies - Contingent Remainder in O's heirs void, A has life estate and O has reversion If it DOES NOT apply: A has life estate and O's Heirs have Contingent Remainder |
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THREE KINDS OF VESTED REMAINDERS
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(1) INDEFEASIBLY VESTED REMAINDER:
- Holder is CERTAIN to acquire an estate in the future with NO CONDITIONS attached. - Ex. To A for Life, remainder to B. (A&B alive). If B dies before A, B's future interest passes by will/intestacy. (2) Vested Remainder Subject to Complete Defeasance - Remaindermans interst MIGHT be cut short by Condition subsequent - Ex. To A for life, remainder to B, but (provided, etc) if B dies before 25, to C. (note CS is after comma) If B is under 25 at A's death, he still takes - but must live to 25, otherwise B's heirs get shit and C takes. (note, if condition precedent, then you have a contingent remainder) (3) Vested Remainder Subject to Open - Remainder is vested in a GROUP of takers, at least ONE of whom is QUALIFIED TO TAKE. However, each class member's share subject to diminution through additional takers qualifying. - Ex. To A for life, then to B's kids (B has 2, C&D) -- Once A OR B dies, class is closed. If C or D predeceases A, share goes to devisees/heirs. RULE OF CONVENIENCE - Class is CLOSED when ANY member can demand possession. WOMB RULE - Exception to above, if child in womb at time class closes - he too can take. |
(ONLY remainders can be vested)
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EXECUTORY INTERESTS (v. REMAINDERS)
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Exec. Interest:
- Future interest created in a TRANSFEREE (3rd Party) which is not a remainder and takes effect by CUTTING SHORT some interest in another person ("shifting"), or in the grantor and his heirs ("springing") |
SHIFTING EXEC. INTEREST:
-Always follows a DEFEASIBLE FEE and CUTS SHORT someone OTHER THAN GRANTOR. (ex. To A and her heirs, but if B stops being a douche, to B and his heirs) SPRINGING EXEC INTEREST - Same as above but CUTS SHORT GRANTOR. Ex. To A, if and when he marries. |
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THE CL RULE AGAINST PERPETUITIES
(Generally & 2 BRIGHT LINE RULES) |
The Rule:
Certain kinds of future interests are void if there is ANY possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life. |
TWO BRIGHT LINE RULES:
(1) Gift to an OPEN CLASS that is conditioned on the members SURVIVING TO AN AGE BEYOND 21 - Violates CL RAP. - "BAD AS TO ONE, BAD AS TO AL" - entire class gift is VOID. ex. To A for life, then to such of A's children that reach the age of 30 (A & 2 kids alive) (2) MANY SHIFTING EXEC. INTERESTS VIOLATE RAP. Exec. Int. w/ NO LIMIT ON TIME WITHIN WHICH IT MUST VEST VIOLATES RAP Ex. "To A and his heirs so long as the land is used for farm purposes, and if it is not, to B and his heirs." Result: Future int. is void, A has fee simple determinable, O has possibility of reverter. BUT NOTE DIFF between above and: "To A and his heirs, BUT if land ceases to be used for farm purposes, to B and his heirs" - HERE CONVEYANCE IS NO LONGER GRAMATICALLY SOUND - ENTIRE CONDITIONAL CLAUSE IS STRICKEN - A HAS FEE SIMPLE ABSOLUTE, O HAS NOTHING! |
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4 STEP APPROACH TO CL RAP PROBLEMS
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1. Determine which future interests have been created by the conveyance.
- RAP applies ONLY to Contingent Remainders; Exec. Interests; and some vested remainders subject to open. - RAP DOES NOT apply to: any future interest in O; indefeasibly vested remainders; or vested remainders subject to complete defeasance. 2. Identify the CONDITIONS PRECEDENT to the vesting of hte suspect future interest (i.e., What must happen before the future interest holder can take?) 3. Find a Measuring Life - Look for person ALIVE AT DATE OF CONVEYANCE and ask whether their life or death is RELEVANT TO CONDITION'S OCCURRENCE 4. Ask: Will we know, with certainty, within 21 years of the death of the measuring life, if our future interest holders can or cannot take? |
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RAP REFORM - "Wait and See/Second Look Doctrine" / USRAP / CY PRES
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1. Wait and See/2nd Look Doctrine
- (Maj. Reform Effort) - Validity of any suspect future interest is determined on the basis of the facts as they now exist AT THE END OF THE MEASURING LIFE (eliminates the anything is possible line of reasoning) 2. Uniform Stat. RAP - Codifies CL RAP & provides for alternative 90 year vesting period AND Cy Pres. 3. CY PRES Doctrine - ("as near as possible") - If given disposition violates RAP, court can reform in a way that "most closely matches the grantor's intent while still complying with the RAP." |
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What are the Three Forms of Concurrent Ownership?
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(1) Joint Tenancy
(2) Tenancy by the Entirety (3) Tenancy in Common |
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JOINT TENANCY - Definition, Characteristics, and Creation
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Defined:
- 2 or more own with the RIGHT OF SURVIVORSHIP Dist. Characteristics: 1. The right of survivorship - when one JT dies, his share goes automatically to the surviving JT. 2. JT's interest IS ALIENABLE, but NOT devisable or descendable. |
Creation of a Joint Tenancy: (2-3 Steps)
(1) Must have the 4 UNITIES. JT's must take their interests: (1) At the Same TIME (2) By the same TITLE (3) w/ IDENTICAL INTERESTS (4) w/ right to POSSESS THE WHOLE (2) Grantor must CLEARLY EXPRESS RIGHT OF SURVIVORSHIP (3) Must use a STRAW if one prospective JT currently owns in another estate. |
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JOINT TENANCY- SEVERANCE
What are the 3 types of severance and what are their characteristics? |
SEVERANCE BY SALE:
- A JT can sell or transfer her interest during her lifetime (even secretly). - Disrupts the 4 unities, and buyer becomes Tenant in Common - If more than 2 JT's originally, other JT's remain intact. - In EQUITY, a JT's mere act of entering into a contract for sale will SEVER the JT as to the contracting party's interest. ("equity regards as done that which out to be done." SEVERANCE BY PARTITION 3 Types (1) By Voluntary Agreement - A peaceful way to end the relationship (2) Partition in Kind - Court action for PHYSICAL division of blackacre. (3) Partition by SALE - May only be done if in BEST INTERESTS OF ALL, blackacre sold and proceeds divided proportionally. SEVERANCE BY MORTGAGE - Maj. Rule (lien theory) - Mortgages DO NOT sever the JT - Min. Rule (title Theory) - Mortgage will sever the JT as to the now encumbered share. |
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TENANCY BY THE ENTIRETY
Creation & Characteristics |
Creation:
- ONLY in the HUSBAND AND WIFE w/ RIGHT OF SURVIVORSHIP - Arises PRESUMPTIVELY in any conveyance to H&W unless stated otherwise. Characteristics - VERY protected form of co-owneship - Creditors of only ONE spouse cannot touch this tenancy -Neither tenant, acting ALONE, can defeat the right of survivorship by unilateral conveyance to a 3rd party. |
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TENANCY IN COMMON
3 MAJOR FEATURES |
(1) Each co-tenant owns and INDIVIDUAL PART and each has a right to the whole.
(2) Each interest is descendable, devisable, and alienable. There are no survivorship rights. (3) Presumption favors tenancy in common. |
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RIGHTS AND DUTIES OF CO-TENANTS: Possession
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Each co-tenant has right to possess the whole (so can't draw dividing line through the house)
If one co tenant wrongfully excludes other from possession of whole or any part - WRONGFUL OUSTER |
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RIGHTS AND DUTIES OF CO-TENANTS: RENT
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Rent from Co-Tenant in Exclusive Possession: Absent ouster, a co-tenant in exclusive possession is NOT liable to the other for rent.
RENT FROM 3RD PARTIES: A co-tenant who leases part or all of the premises to a 3rd party MUST ACCOUNT TO HIS CO-TENANTS - giving them their fare share of the rental income. |
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RIGHTS AND DUTIES OF CO-TENANTS: ADVERSE POSSESSION
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Unless there is OUSTER, a co-tenant in exclusive possession CAN NOT acquire title to the exclusion of others through adverse possession. NO HOSTILITY ELEMENT.
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TENANTS IN COMMON: CARRYING COSTS
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Each co-tenant is responsible for his FAIR SHARE of carrying costs (taxes, mortgage interest payment, etc) based on his INDIVIDUAL SHARE.
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TENANTS IN COMMON: REPAIRS
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Co-tenant has a RIGHT TO CONTRIBUTION for REASONABLE AND NECESSARY REPAIRS
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TENANTS IN COMMON: IMPROVEMENTS
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NO RIGHT to contribution for improvements, HOWEVER:
At PARTITION improving co-tenant is entitled to CREDIT equal to an increase in value caused by his efforts, but also FULLY LIABLE FOR ANY DROP IN VALUE due to his efforts. |
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TENANTS IN COMMON: WASTE
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Co Tenants CANNOT commit waste.
Co-tenants CAN BRING AN ACTION DURING THE LIFE OF THE CO-TENANCY. Remember: voluntary, permissive, ameliorative. |
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TENANTS IN COMMON: PARTITION
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Tenant in common (and joint tenant) has right to bring an action for partition.
Remember: (1) vol. agreement; (2) partition in kind, (3) forced sale. |
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Landlord/Tenant Law:
What are the 4 Leasehold (nonfreehold) Estates? |
(1) Tenancy for Years
(2) Periodic Tenancy (3) Tenancy at Will (4) Tenancy at Sufferance |
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TENANCY FOR YEARS
(aka Estate for Years or Term of Years) |
Lease for a fixed period of time (ie, you know the termination date from the start)
NO NOTICE necessary to terminate (b/c you know from the start when it ends) SOF- TERM OF YEARS GREATER THAN 1 YEAR MUST BE IN WRITING TO BE ENFORCEABLE |
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THE PERIODIC TENANCY -
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Lease continues for SUCCESSIVE INTERVALS until L or T gives PROPER NOTICE to terminate.
Creation: (1) By express grant - "to T from month to month" (2) BY IMPLICATION - (3 Ways) (i) Land is leased with no mention of duration, but provision is made for PAYMENT OF RENT IN SET INTERVALS. (ii) An oral term of years in violation of the SOF creates an implied periodic tenancy (measured by way rent is paid). (iii) By Holdover - IN a residential lease, if L elects to hold over a T who has wrongfully stayed on past the conclusion of the original lease. TERMINATION - NOTICE (usually written) must be given. HOW MUCH NOTICE? - At CL - at least equal to length of period, unless otherwise agreed, BUT, IF YEAR-YEAR OR LONGER - AT LEAST 6 MONTHS NOTICE |
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TENANCY AT WILL
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Tenancy for NO FIXED DURATION (ex. "To T for as long as T desires."
Creation: Unless parties EXPRESSLY AGREE to tenancy at will, the payment of REGULAR RENT will cause court to treat it as an implied periodic tenancy. TERMINATION: By EITHER PARTY at ANY TIME - however - a reasonable demand to vacate is normally required from the L. |
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TENANCY AT SUFFERANCE
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Where T has WRONGFULLY HELD OVER past the expiration of the lease.
Rationale: To allow L to recover rent. Termination: Lasts only until L either: (1) evicts T, or (2) elects to hold T to a new tenancy. |
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TENANTS DUTIES: T'S LIABILITY TO 3rd PARTIES
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(Matter of Tort Law)
T is responsible for keeping the premises in REASONABLY GOOD REPAIR. T is liable for injuries sustained by 3rd parties that T INVITED, EVEN IF L promised to make all repairs. |
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TENANTS DUTIES: T'S DUTY TO REPAIR WHEN LEASE IS SILENT
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RULES:
(1) T must MAINTAIN the premises and make ORDINARY repairs. (2) T must not commit waste (3) LAW OF FIXTURES WALKS WITH WASTE - When a tenant removes a fixture he commits voluntary waste - T must not REMOVE fixtures EVEN IF T INSTALLED THEM - fixtures pass with OWNERSHIP of the land. (see side 3) |
Definition of FIXTURE: A once movable chattel that, by virtue of its annexation to realty: OBJECTIVELY SHOWS the intent to permanently improve the realty.
(Ex. - Heating system, storm windows, furnace, some lighting) - Fixtures pass w/ ownership of the land HOW TO TELL WHETHER TENANT INSTALLATION = FIXTURE (1) Express agreement controls. (2) If no agreement, T may remove a chattel that she has installed so long as REMOVAL DOESN'T CAUSE SUBSTANTIAL HARM TO THE PREMISES - If removal will cause substantial damage, then in objective terms T has shown: the intent to install a FIXTURE. |
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TENANT'S DUTIES: T'S DUTY TO REPAIR WHEN T HAS EXPRESSLY COVENANTED IN THE LEASE TO MAINTAIN THE PROPERTY IN GOOD CONDITION
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Historically at CL: T was liable for any loss to the property, including from force of nature.
Modern (majority and VA) View - T may terminate the lease if the premises are destroyed without T's fault. |
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TENANT'S DUTIES: T'S DUTY TO PAY RENT - WHERE T BREACHES BUT IS IN POSSESSION OF THE PREMISES
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Landlords Only opitons:
(1) Evict through the courts, OR (i) entitled to rent until tenant (now at sufferance) vacates (2) Continue the relationship and sue for rent due. SELF HELP - L CANNOT engage in self-help (changing locks, etc) CIVILLY AND CRIMINALLY LIABLE |
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TENANTS DUTIES: T'S DUTY TO PAY RENT - WHERE T BREACHES AND IS OUT OF POSSESSION
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(SIR)
(i) Surrender: L treats T's abandonment as an implicit offer of surrender. (ia) - surrender = T shows by words or actions that she wants to give up the lease. (ii) Ignore the abandonment and hold T responsible for unpaid rent (minority of states allow this) (iii) Re-let the premises on the wrongdoer tenant's behalf, and hold him liable for any deficiency. MAJORITY VIEW - L must at least TRY to re-let (mitigation) |
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LANDLORD'S DUTIES
NAME ALL 4 |
(1) Duty to deliver possession
(2) Implied Covenant of Quiet Enjoyment (3) Implied Warranty of Habitability (4) Retaliatory Eviction |
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LANDLORDS DUTIES:
DUTY TO DELIVER POSSESSION |
English/VA/Maj. RULE -
L must put T in ACTUAL PHYSICAL POSSESSION of the premises. Thus if at the start of T's lease period there is a holdover - L HAS BREACHED, and the new T gets DAMAGES |
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LANDLORDS DUTIES:
THE IMPLIED COVENANT OF QUIET ENJOYMENT |
Rule:
T has a right to QUIET USE AND ENJOYMENT OF THE PREMISES Application: Applies to BOTH residential and commercial properties. HOW BREACHED: (1) Actual wrongful eviction *(2) CONSTRUCTIVE EVICTION (see next card) |
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LANDLORD'S DUTIES
ELEMENTS OF CONSTRUCTIVE EVICTION |
(SING)
(1) SUBSTANTIAL INTERFERENCE due to L's actions or a failure to act (can be a chronic, intermittent problem) (2) NOTICE - T must give L notice of the problem and L must fail to fix it. (3) GOODBYE/VACATE - T MUST vacate within a reasonable time after L fails to fix the problem. |
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LANDLORDS DUTIES:
LIABILITY FOR ACTS OF OTHER TENANTS |
General Rule: NOT LIABLE
Exceptions: (1) L must not permit a NUISANCE on the premises. (2) L must control common areas. |
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LANDLORDS DUTIES:
THE IMPLIED WARRANTY OF HABITABILITY |
Rule:
The premises must be FIT FOR BASIC HUMAN DWELLING (ie, bare living req's must be met) - can be supplied by housing code or court's conclusion Application: Applies only to RESIDENTIAL leases. EFFECT: T may: (1) MOVE OUT (2) REPAIR AND DEDUCT 3) REDUCE RENT (4) REMAIN, PAY RENT, SEEK MONEY DAMAGES |
Examples of problems triggering breach: no heat in winter, no plumbing, no running water.
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LANDLORDS DUTIES
RETALIATORY EVICTION |
If T lawfully reports L for housing code violations, L is barred from penalizing T by: raising, rent, ending lease, harassment, etc.
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THE ASSIGNMENT v. SUBLEASE
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Assignment: T transfers his interest IN WHOLE
Sublease: T transfers his interest in part Limitations: In ABSENCE of prohibition in the lease, T may assign or sublet. IF L consents to one transfer by T, L WAIVES THE RIGHT TO OBJECT TO FUTURE TRANSFERS BY THAT T UNLESS HE EXPRESSLY RESERVES THE RIGHT |
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THE ASSIGNMENT: PRIVITY RULES
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PRIVITY OF ESTATE
L and T2 are in PRIVITY OF ESTATE - Liable to each other for all covenants in the original lease that RUN WITH THE LAND Ex. Promise to pay rent, to paint, to repair, etc. PRIVITY OF K L and T2 are NOT in PRIVITY OF K, unless T2 assumes all promises in the original lease. L and T1 ARE IN PRIVITY OF K - thus T1 IS SECONDARILY LIABLE TO L |
Note hype where there is T1, T2, T3 - and T3 fucks up - T2 is completely off the hook here.(UNLESS he expressly assumed all promises in the original lease.
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THE SUBLEASE: PRIVITY RULES
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L and Sublessee are NEITHER IN PRIVITY OF K OR PRIVITY OF ESTATE
T1 responsible to S1 and vice versa. |
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LANDLORDS TORT LIABILITY:
CL RULE AND 5 EXCEPTIONS |
CL NORM:
Caveat Lessee - let the tenant beware. In TORT no duty to make premises safe. EXCEPTIONS (5 most imp) CLAPS (1) COMMON AREAS: L must maintain common areas & stairwells. (2) LATENT DEFECTS RULE: L must WARN T of HIDDEN DEFECTS about which L has knowledge or reason to know. (note - simply a duty to warn NOT a duty to repair) (3) ASSUMPTION OF REPAIRS: L who voluntarily makes repairs must complete them w/ reasonable care. (4) PUBLIC USE RULE: L who leases public space (e.g., convention center) and who should know because of the NATURE OF THE PROBLEM and the LENGTH OF THE LEASE, that T will not repair, IS LIABLE FOR ANY DEFECTS ON THE PREMISES. (5) SHORT TERM LEASE OF FURNISHED DWELLING L is liable for any defect. |
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EASEMENT - DEFINITION
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DEFINED:
The GRANT of a NONPOSSESSORY PROPERTY INTEREST that entitles its holder to some form of use or enjoyment of ANOTHER'S land - which is called the SERVIENT TENAMENT |
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AFFIRMATIVE EASEMENTS V. NEGATIVE EASEMENTS
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Affirmative Easements -
Most are affirmative: gives holder the RIGHT TO DO SOMETHING ON SERVIENT LAND NEGATIVE EASEMENTS: - MAY ONLY BE CREATED EXPRESSLY,BY A WRITING SIGNED BY THE GRANTOR - Generally recognized in only 4 areas: (1) LIGHT (2) AIR (free flow of) (3) SUPPORT (4) STREAMWATER FROM AN ARTIFICIAL FLOW |
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EASEMENT APPURTENANT
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Definition:
Benefits the holder in his physical use or enjoyment of HIS PROPERTY. TEST: Must be 2 PARCELS OF LAND (1) DOMINANT TENEMENT must DERIVE A BENEFIT from the (2) SERVIENT TENAMENT, which bears a burden NOTE - Easement's appurtenant are where the Holders LAND itself BENEFITS from the easement. |
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EASEMENT IN GROSS
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Definition:
Easement that benefits the holder only in some PERSONAL/PECUNIARY way that is NOT RELATED to his enjoyment of HIS LAND. Ex. - Billboards, right to fish in another's pond, right to lay power lines. - HERE ONLY 1 PARCEL IS INVOLVED AND IT IS THE SERVIENT PARCEL |
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TRANSFERABILITY OF EASEMENTS
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EASEMENT APPURTENANT-
Passes AUTOMATICALLY with the dominant tenement, REGARDLESS OF WHETHER IT IS EVEN MENTIONED IN THE CONVEYANCE. - NOTE - BURDEN of the easement appurtenant also passes automatically unless buyers is a BFP WITHOUT NOTICE EASEMENT IN GROSS: NOT transferable, UNLESS FOR COMMERCIAL PURPOSES |
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CREATION OF AFFIRMATIVE EASEMENT
List the 4 ways |
(PING)
Prescription Implication Necessity Grant |
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CREATION OF AFFIRMATIVE EASEMENT BY GRANT
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GRANT:
An easement to endure for MORE THAN ONE YEAR must be in WRITING that complies w/ formal elements of a deed. |
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CREATION OF AN AFFIRMATIVE EASEMENT BY IMPLICATION
(aka easement implied from existing use |
Fact Pattern: Originally one owner - sells half to someone else.
RULE: Previous use must have been: (1) APPARENT, and (2) the parties expected that it would SURVIVE DIVISION, b/c, (3) it is REASONABLY NECESSARY to the DOMINANT lands USE & ENJOYMENT |
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CREATION OF AN AFFIRMATIVE EASEMENT BY NECESSITY
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LANDLOCKED SETTING FACT PATTERN
Rule: Easement right of way will be implied by necessity if grantor conveys a portion of his land with no way out except over some part of his remaining land. |
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CREATION OF AN AFFIRMATIVE EASEMENT BY PRESCRIPTION
(aka Adverse Possession) |
VA - STATUTORY PERIOD IS 20 YEARS
(COAH) (1) CONTINUOUS use for statutory period. (2) OPEN and notories (3) ACTUAL use (4) HOSTILE use (w/o consent) |
Note - permission of owner at any time during this period defeats the acquisition of an easement by prescripiton.
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SCOPE OF AN EASEMENT
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Scope determined by:
TERMS OF GRANT, or CONDITIONS THAT CREATED IT Ex. A gives B easement to use A's private road to get to B's parcel. B then buys neighboring Greenacre w/ small marina. B CANNOT UNILATERALLY EXPAND EASEMENT TO BENEFIT GREENACRE |
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TERMINATION OF AN EASEMENT - Name the 8 Ways
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1 - Estoppel
2 - Necessity 3 - Destruction of serv. land 4 - Condemnation of serv. estate 5 - Release 6 - Abandonment 7 - Merger Doctrine (unity of ownership) 8 - Prescription |
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TERMINATION OF AN EASEMENT BY ESTOPPEL
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Servient owner MATERIALLY CHANGES his or her position in REASONABLE RELIANCE on the easement holder's ASSURANCE THAT THE EASEMENT WILL NOT BE ENFORCED
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Ex. A tells B I won't need to use easement to get across your back yard anymore, B then builds high wall and swimming pool. A is estopped from claiming easement.
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TERMINATION OF AN EASEMENT BY NECESSITY
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RULE:
Easements CREATED BY NECESSITY expire AUTOMATICALLY WHEN THE NEED ENDS, UNLESS (exception) the parties REDUCED IT TO WRITING (grant) even though motivated by necessity. |
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TERMINATION OF AN EASEMENT BY DESTRUCTION OF SERV. LAND
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Destruction of servient land OTHER THAN THROUGH WILLFUL CONDUCT OF THE SERVIENT OWNER will end the easement.
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TERMINATION OF AN EASEMENT BY CONDEMNATION
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If servient estate condemned through EMINENT DOMAIN proceedings, easement is terminated.
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TERMINATION OF AN EASEMENT BY RELEASE
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A WRITTEN release given by the EASEMENT HOLDER to the SERVIENT OWNER terminates the easement.
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TERMINATION OF AN EASEMENT BY ABANDONMENT
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Rule:
Easement HOLDER must take a PHYSICAL ACTION showing the intent to never use the easement again Mere non-use and Mere Word are not sufficient |
Example - Easement holder erects a structure on her land that prevents her from ever again reaching B's land
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TERMINATION OF AN EASEMENT BY MERGER (unity of ownership)
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If title to the easement and the servient land become vested in ONE PERSON, easement is terminated.
NOTE - EASEMENT DOES NOT REVIVE IF TITLE LATER SEPARATED. |
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TERMINATION OF AN EASEMENT BY PRESCRIPTION (adverse possession)
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COAH -
Continuous Interference Open and Notorious Actual Use Hostile to the EASEMENT HOLDER |
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THE LICENSE
Definition and Characteristics |
Definition:
A MERE PRIVILEGE TO ENTER ANOTHER'S LAND FOR SOME DELINEATED PURPOSE Characteristics: (1) NOT subject to SOF (2) FREELY REVOCABLE, UNLESS (2a) Estoppel applies - and licensee has invested SUBSTANTIAL money/labor in REASONABLE reliance on license's continuation. Note - ORAL EASEMENT = FREELY REVOCABLE LICENSE Classic Fact Patterns: Tickets (to show, etc) - Freely revocable licenses Neighbors talking by the fence. |
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THE PROFIT
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SHARES ALL RULES OF EASEMENTS (e.g., SOF)
PROFIT entitles its holder to enter servient and take from it: soil or some substance of the soil (minerals, timber, oil, etc) |
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THE COVENANT - Definition, covenants v. equitable servitudes, vocab, major questions
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Definition:
Covenant is a promise to do or not do something RELATED to land. It is a CONTRACTUAL limitation or promise regarding land. Can be NEGATIVE (restrictive) or AFFIRMATIVE. Covenants v. Equitable Servitudes: Theory - Not a grant of property interest but instead a contractual limitation/promise. TEST - If REMEDY is injunction - servitude If REMEDY is damages - covenant Vocab - One tract is BURDENED, other tract is BENEFITED |
Major Questions:
(1) When will covenant run with the land. (2) When is it capable of binding successors? |
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COVENANTS: DETERMINING WHETHER THE BURDEN RUNS WITH THE LAND
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(note - always do this step first - harder for burdens to run than benefits)
ELEMENTS FOR BURDEN TO RUN W/ THE LAND ("WITHIN") (1) WRITING: Original promise between A & B is in writing. (2) INTENT: Original parties intended for the covenant to run. (2a) Generously construed (3) TOUCH AND CONCERN THE LAND: Promise must affect the parties' legal relations as LANDOWNERS, not simply as members of the community as a whole. (4) HORIZONTAL & VERTICAL PRIVITY: BOTH necessary for the burden to run. Horizontal privity = nexus between the original two parties - HARD to establish For Horizontal privity must be in SUCCESSION OF ESTATE, meaning they were in a Grantor-Grantee, Landlord-Tenant, or Mortgagor Mortgagee relationship. Vertical Privity - Nexus between A and A1. Simply requires a NON-HOSTILE nexus. (so anything but adverse possession is ok) (5) NOTICE - A1 must have had NOTICE of the promise when she took. |
NOTE - covenants to pay money to be used in connection w/ land (e.g., homeowner's association fees) and covenants not to compete DO TOUCH AND CONCERN THE LAND
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COVENANTS: DOES THE BENEFIT OF A'S PROMISE TO B RUN FROM B TO B1?
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(aka - does B have standing to make this claim)
("WITV") (1) WRITING - Original promise was in writing. (2) INTENT - Original parties intended that benefit would run. (3) Touch and Concern - Promise affects the parties as landowners (4) VERTICAL PRIVITY - (horizontal privity is not necessary) |
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EQUITABLE SERVITUDES
Definition Creation |
Definition:
The equitable servitude is a promise that EQUITY will enforce against successors. The remedy is injunctive relief. CREATION OF ES THAT WILL BIND SUCCESSORS: ("witnes") (1) WRITING - Original promise (generally) must be in writing (2) INTENT - Parties intended that their promise would BIND SUCCESSORS. (3) TOUCH AND CONCERN (4) NOTICE (3 Kinds) |
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EQUITABLE SERVITUDE - THREE FORMS OF NOTICE IMPUTED ON D
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(1) Actual Notice
(2) Inquiry Notice - Neighborhood conforms to the common restriction (3) Record Notice - Notice if in publicly recorded docs. Court Split Here - Better View - record notice not imputed based on deeds transferred to other by the common grantor. |
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THE IMPLIED EQUITABLE SERVITUDE -
(GENERAL OR COMMON SCHEME DOCTRINE & RECIPROCAL NEGATIVE SERVITUDES) |
ELEMENTS:
(1) When sales began subdivider had a GENERAL SCHEME OF RESIDENTIAL DEVELOPMENT WHICH INCLUDED D'S LOT & (2) D lotholder had NOTICE of the promise contained in PRIOR DEEDS. |
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EQUITABLE DEFENSES TO ENFORCEMENT OF AN EQUITABLE SERVITUDE
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CHANGED CONDITIONS -
Party seeking release form terms of an equitable servitude must show that hte changed conditions are SO PERVASIVE THAT THE ENTIRE AREA HAS CHANGED. Mere pockets of limited change is not good enough. |
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ADVERSE POSSESSION
Elements |
COAH
Continuous and uninterrupted for the statutory period. Open and notorious - the type of possession that the usual owner would make under the circumstances. Actual - Entry must be Literal Hostile - Possessor does not have Owners consent to be there. POSSESSORS SUBJECTIVE STATE OF MIND IS IRRELEVANT |
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STATUTORY PERIOD FOR ADVERSE POSSESSION TO RIPEN INTO TITLE FOR REAL PROPERTY
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15 YEARS
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STATUORY PERIOD FOR ADVERSE POSSESSION OF AN EASEMENT
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20 YEARS
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ADVERSE POSSESSION - TACKING
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One adverse possessor may TACK on his time to that of a predecessor adverse possessors time IF:
(1) There is PRIVITY, which is satisfied by (2) any non-hostile nexus (blood, contract, deed, will) Tacking is NOT allowed when there has been OUSTER. |
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ADVERSE POSSESSION - DISABILITIES
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SOL will NOT RUN against a true owner who is affected by a disability at THE START OF THE ADVERSE POSSESSION.
Ex. Insanity, infancy, imprisonment |
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THE TWO STEP PROCESS FOR LAND CONVEYANCE
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(1) THE LAND CONTRACT - endures till step 2
(2) THE CLOSING - deed becomes operative document |
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THE LAND CONTRACT AND THE STATUTE OF FRAUDS - the standard
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STANDARD:
The land K must be in WRITING and SIGNED BY THE PARTY TO BE BOUND. Must DESCRIBE THE LAND AND STATE SOME CONSIDERATION. |
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THE LAND CONTRACT AND THE STATUTE OF FRAUDS -
Where amount of land recited in K is more than actual size of parcel |
P gets SPECIFIC PERFORMANCE with a PRO RATA REDUCTION IN PURCHASE PRICE
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THE LAND CONTRACT AND THE STATUTE OF FRAUDS:
THE DOCTRINE OF PART PERFORMANCE (THE ONE EXCEPTION TO THE SOF) |
THE DOCTRINE OF PART PERFORMANCE
If you have TWO of the THREE - equity will decree specific performance of an oral contract. (1) B TAKES POSSESSION (2) B pays ALL or PART of the purchase price (3) B makes SUBSTANTIAL IMPROVEMENTS |
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THE LAND CONTRACT AND THE RISK OF LOSS
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Apply the doctrine of EQUITABLE CONVERSION
Equitable conversion = equity regards as done that which ought to be done Thus in EQUITY, once the K is signed - B OWNS THE LAND (subject to condition that he pays the purchase price at closing) Thus if land DESTROYED in between contract and closing B BEARS THE BURDEN OF RISK (unless B and S agreed otherwise. |
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**IMPLIED PROMISES IN LAND CONTRACTS (2)
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(1) SELLER PROMISES TO PROVIDE MARKETABLE TITLE AT THE CLOSING
(1a) The Standard: Title free from REASONABLE DOUBT (meaning free from lawsuits or the threat of litigation) (1b) 3 Circs that make title UNMARKETABLE: (i) Adverse Pos (even in part) (ii) Encumbrances Ex. servitudes or leans unless buyer has waived them, but note - seller has right to satisfy outstanding mortgage or lien at closing w/ the proceeds of the sale. (iii) Zoning Violations |
(2) SELLER PROMISES NOT TO MAKE ANY FALSE STATEMENTS OF MATERIAL FACT
Maj. Rule - S liable for failure to disclose latent material defects (material lies and omissions) Silence is no longer golden. GENERAL DISCLAIMER OF LIABILITY WILL NOT EXCUSE FRAUD OR FAILURE TO DISCLOSE |
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Land Contracts and the Warranties of Fitness/Habitability
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CL NORM: CAVEAT EMPTOR
Land contract contains NO IMPLIED WARRANTIES OF FITNESS OR HABITABILITY EXCEPTION - Implied warranty of fitness and workmanlike construction applies to the sale of a new home by a builder vendor. |
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THE CLOSING
Controlling Document? General Req's? |
Controlling document is now THE DEED.
In order to pass legal title from seller to buyer the deed must: ("LEAD"): LAWFUL EXECUTION AND DELIVERY |
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LAWFUL EXECUTION OF A DEED
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The Standard:
(1) The Deed must be in writing signed by the GRANTOR - need not state consideration - consideration need not pass to make deed valid (2) UNAMBIGUOUS description of the land (in the deed) So doesn't need to be perfect - if you can figure it out with reasonable research it's ok) (3) Deed must be DELIVERED: Delivery requirement satisfied when grantor PHYSICALLY OR MANUALLY TRANSFERS THE DEED TO GRANTEE. - Can use Mail, an agent, messenger, ESCROW, but - Delivery DOES NOT ALWAYS require actual physical transfer of the instrument TEST IS PRESENT INTENT - Did grantor the present intent to be immediately bound, irrespective of whether or not the deed itself was literally handed over. HOWEVER - EXPRESS REJECTION OF THE DEED BY RECIPIENT DEFEATS DELIVERY |
Note - advantage of ESCROW - if grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met - title will still pass
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DEED ABSOLUTE ON ITS FACE TRANSFERRED TO GRANTEE W/ ORAL CONDITION: WHAT EFFECT?
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ORAL CONDITION DROPS OUT - IT IS NOT PROVABLE - AND DELIVERY IS COMPLETE
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LIST THE THREE TYPES OF DEEDS
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(1) THE QUITCLAIM
(2) THE GENERAL WARRANTY DEED (3) THE STATUTORY SPECIAL WARRANTY DEED |
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THE QUITCLAIM
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WORST DEED EVER
Contains NO COVENANTS. Grantor isn't even promising that he has title to convey. BUT - seller does IMPLICITLY PROMISE marketable title AT CLOSING - but this is a shortlived promise that dies at the end of closing. |
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THE GENERAL WARRANTY DEED AND ITS COVENANTS
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BEST DEED EVER
Warrants against ALL DEFECTS IN TITLE, including those attribution to GRANTOR'S PREDECESSORS Generally contains 6 COVENANTS (3 present, 3 future) (1) Covenant of SEISIN - Grantor promises that he owns estate he's conveying (present cov) (2) Covenant of RIGHT TO CONVEY - Grantor promises that he has the power to make the transfer (no temp. restraints or disabilities) (pres. cov) (3) Covenant against ENCUMBRANCES: Grantor promises that there are no servitudes or liens on the land. (pres. cov) (4) The covenant for QUIET ENJOYMENT - Grantor promises that grantee won't be disturbed in possession by a 3RD PARTY'S LAWFUL CLAIM OF TITLE (future cov) (5) Covenant of WARRANTY: Grantor promises to DEFEND GRANTEE shold there be any lawful claim of title asserted by 3rd party (future cov) (6) Covenant of FURTHER ASSURANCES - Grantor promises to do whatever future acts are reasonably necessary to PERFECT THE TITLE if it later turns out to be imperfect. |
NOTE-
PRESENT COVENANTS - Breached, if at all, at TIME OF DELIVERY FUTURE COVENANTS - Breached, if at all, at time GRANTOR IS DISTURBED IN POSSESSION. Thus SOL doesn't begin to run until this disturbance in possession |
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THE STATUTORY SPECIAL WARRANTY DEED AND ITS COVENANTS
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Provided for by statute in many states - Deed contains two promises that GRANTOR MAKES ONLY ON BEHALF OF HIMSELF (not his predecessors in interest)
(1) Grantor promises that he hasn't CONVEYED LAND TO ANYONE BUT GRANTEE (2) Grantor promises that LAND IS FREE FROM ENCUMBRANCES MADE BY GRANTOR |
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THE RECORDING SYSTEM
General Model question? Two Bright Line Rules? |
Model: The double dealer. O conveys blackacre to A, later conveys same blackacre to B, then runs away - battle between A and B.
TWO BRIGHTLINE RULES: *(1) If B is a BFP, and we are in a NOTICE (VA) jurisdiction, B WINS (regardless of whether or not he records before A does) (2) If B is a BFP and we are in a RACE-NOTICE JURISDICTION, B wins IF HE RECORDS PROPERLY BEFORE A DOES |
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BONA FIDE PURCHASER -
Elements |
BFP =
(1) BUYS Blackacre for VALUE, and (2) WITHOUT NOTICE that someone else got there first. VALUE = substantial pecuniary consideration (can be less fmv) |
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WHO DO RECORDING ACTS EXIST TO PROTECT?
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ONLY the BFP and MORTAGEES (creditors)
So usually (unless shelter rule applies) people who get blackacre through will/intestancy ARE NOT PROTECTED |
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THREE FORMS OF NOTICE THAT A BUYER MAY BE CHARGED WITH (2 in VA)
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AIR
ACTUAL INQUIRY - (NOT IN VA) Whether B looks or not, on notice of WHATEVER AN EXAM OF HTE LAND WOULD SHOW & if recorded instrument makes reference to a unrecorded transaction, B is on inquiry notice of whatever a reasonable follow-up might show. Theory - Buyer has duty to inspect before transfer to see, for example whether anyone else is in possession. RECORD NOTICE - B is on RECORD NOTICE of at the time B takes, A's deed was PROPERLY RECORDED |
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THE TWO RECORDING STATUTES
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THE NOTICE STATUTE (VA) -
Conveyance of interest in land shall not be valid against any subsequent purchaser for value, w/o notice thereof, unless the conveyance is RECORDED. - Thus if B is a BFP at the time he takes, HE WINS - doesn't matter that A might actually record first, or that B never records RACE NOTICE STATUTE - To win here B must be (1) A BFP, and (2) RECORD FIRST |
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HOW TO PROPERLY RECORD
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To give record notice to subsequent takers, deed must be Recorded properly WITHIN THE CHAIN OF TITLE, which refers to the sequence of recorded docs CAPABLE OF GIVING RECORD NOTICE TO LATER TAKERS. (most states - established through a title search of the grantor-grantee index)
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CHAIN OF TITLE PROBLEM #1
THE SHELTER RULE |
Rule - anyone who takes from a BFP will prevail against those who the BFP would have prevailed against!
So if B BFP buys and then sells OR GIVES to C - C can also prevail against A. NOTE - THIS PROTECTS B BFP's ABILITY TO FREELY TRANSFER HIS LAND - BUT THIS IS ALSO THE WAY IN WHICH DONEES CAN GET PROTECTION |
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***CHAIN OF TITLE PROBLEM #2
THE WILD DEED |
THE PROBLEM: O sells to A, who does not record. Then A sells to B, B records the A-B deed.
Note - A-B deed though recorded, is NOT CONNECTED TO THE CHAIN OF TITLE - and is a WILD DEED. THE RULE OF THE WILD DEED: WILD DEED IS INCAPABLE OF GIVING RECORD NOTICE OF ITS EXISTENCE. EFFECT - If O sells to anyone else AFTER A - that person will ALWAYS WIN because A's recording is a nullity (for race notice) and next guy will be BFP |
Example: O sells to A, who does not record,
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CHAIN OF TITLE PROBLEM #3
ESTOPPEL BY DEED |
RULE: One who conveys realty in which HE HAS NO INTEREST is ESTOPPED from denying the validity of that conveyance if he LATER ACQUIRES THE PREVIOUSLY TRANSFERRED INTEREST
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Ex. O owns blackacre in 1950, X (without title) sells blackacre to A. A records. In 1960, O sells blackacre to X, X records. In 1970 X then sells blackacre to B, B records.
From 1960 - 1969: A OWNS BLACKACRE due to estoppel by deed. From 1970 on - B OWNS BLACKACRE AS LONG AS HE IS A BFP the 1950 recording was a NULLITY - recorded too early, thus B's TITLE SEARCHER WOULD NOT FIND A's DEED. |
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MORTGAGES:
CREATION VOCAB |
Creation:
Mortgage is the conveyance of a SECURITY INTEREST IN LAND, intended by parties to be collateral. TWO ELEMENTS: The union of (1) a DEBT, and (2) a VOLUNTARY LIEN in debtor's land to secure the debt. VOCAB DEBTOR = MORTAGOR CREDITOR = MORTAGEE |
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MORTGAGES:
LEGAL v. EQUITABLE MORTGAGE (SOF) |
LEGAL MORTGAGE -
Mortgage typically must BE IN WRITING to satisfy the SOF. This is a legal mortgage. EQUITABLE MORTGAGE: Instead of executing writing mortgagor HANDS MORTGAGEE THE DEED TO BLACKACRE (must be absolute on its face) Between O and Creditor - PAROL EVIDENCE IS FREELY ADMISSIBLE TO SHOW THE PARTIES' TRUE INTENT What if Creditor takes deed and sells Blackacre to BFP G? G OWNS BLACKACRE - O's only recourse is to sue creditor for fraud and the sale proceeds. |
Legal Mortgage ALSO KNOWN AS - "note, "mortgage deed" "security interest in land" "deed of trust" "sale-lease back"
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PARTIES RIGHTS ONCE MORTGAGE CREATED
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(Unless and until foreclosure)
Debtor-mortgagor has: TITLE AND THE RIGHT TO POSSESS Creditor-Mortgagee has: A LIEN |
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TRANSFER OF INTERESTS IN MORTGAGE BY CREDITOR MORTGAGEE
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Overall Rule:
ALL PARTIES TO A MORTGAGE CAN TRANSFER THEIR INTEREST. The mortgage automatically follows a PROPERLY TRANSFERRED NOTE Creditor Mortgagee can Transfer By: (1) ENDORSING THE NOTE AND DELIVERING IT TO TRASFEREE (note - Transferee eligible to become a holder in due course here) or (2) EXECUTING A SEPARATE DOCUMENT OF ASSIGNMENT |
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HOLDER IN DUE COURSE
Definition Effect Req'd Elements |
HOLDERS IN DUE CORSE (HIDC) take the note FREE OF ANY PERSONAL DEFENSES THAT COULD HAVE BEEN RAISED AGAINST THE MORTGAGEE
(this is a good thing, remember HIDCs are CREDITORS, and thus can foreclose despite any personal defense.) HOWEVER, HIDC still subject to REAL DEFENSES that the maker might raise. |
ELEMENTS FOR A VALID HIDC
HIDC ELEMENTS: (1) Note must be NEGOTIABLE, made payable to the named mortgagee. (2) the Original note must be INDORSED, signed by named mortgagee, (3) original note must be DELIVERED to the transferee (photocopy is NOT ok) (4) Transferee must take the not IN GOOD FAITH without NOTICE of any ILLEGALITY, and (5) The transferee must pay VALUE for the note (more than nominal.) |
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PERSONAL DEFENSES (HIDC NOT SUBJECT TO)
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(1) Lack of Consideration
(2) Fraud in the Inducement (3) Unconscionability (4) Waiver (5) Estoppel |
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REAL DEFENSES (HIDC STILL SUBECT TO)
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(MAD FIFI4)
MATERIAL ALTERATION DURESS FRAUD IN THE FACTUM (lie about the instrument) INCAPACITY ILLEGALITY INFANCY INSOLVENCY |
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TRANSFER OF MORTGAGE INTEREST YB DEBTOR-MORTGAGOR
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(remember - all parties to a mortgage can transfer their interests)
If O, mortagor-debtor, sells blackacre, THE LIEN REMAINS ON THE LAND SO LONG AS THE MORTGAGE WAS PROPERLY RECORDED Ex. On Jan 10 M takes out Mortgage on BA w/ FB. FB promptly and properly records on Jan 10. On Jan 15, M sells BA to Z. Z has no actual notice of the lien, and promptly and properly records. Z HOLDS SUBJECT TO FB'S MORTGAGE. (note - doesn't matter which recording statute juris we're in - Buyer has RECORD NOTICE) A LATER BUYER TAKES SUBJECT TO A PROPERLY RECORDED LIEN IN A NOTICE STATE - A SUBSEQUENT BFP PREVAILS OVER A PRIOR GRANTEE OR MORTGAGEE WHO HAS NOT YET RECORDED PROPERLY AT THE TIME THE BFP TAKES |
Remember - recording statute meant to protect creditor-mortgagees
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Personal Liability when Debtor-Mortgagor Sells Blackacre to B
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IF B HAS "ASSUMED MORTGAGE"
Both O and B are PERSONALLY LIABLE. B is primarily liable, O is secondarily liable. IF B "TAKES SUBJECT TO THE MORTGAGE" B NOT personally liable, ONLY O. **HOWEVER - MORTGAGE STICKS w/ THE LAND - so if O doesn't pay here, mortgage may be foreclosed. |
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FORECLOSURE:
How accomplished (generally) |
Mortgagee must foreclose by PROPER JUDICIAL ACTION.
At foreclosure land is sold, proceeds go to satisfy the debt. |
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IF FORECLOSURE PROCEEDS LESS THAN AMOUNT OWED?
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MORTGAGEE BRINGS A DEFICIENCY ACTION AGAINST THE DEBTOR.
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IF FORECLOSURE PROCEEDS MORE THAN AMOUNT OWED?
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JUNIOR LIENS PAID IN ORDER OF PRIORITY --> REMAINING SURPLUS GOES TO DEBTOR.
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HOW FUNDS DISTRIBUTED AFTER FORECLOSURE SALE
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1ST - ATTORNEY'S FEES, FORECLOSURE EXPENSES, ANY ACCRUED INTEREST IN FIRST PRIORITY LIEN
2ND - PAY OF MORTGAGES IN ORDER OF PRIORITY - EACH MUST BE PAID IN FULL BEFORE SUBORDINATE LIEN-HOLDER CAN TAKE (but remember availability of deficiency judgments) |
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EFFECT OF FORECLOSURE ON INTERESTS JUNIOR TO THE MORTGAGE BEING FORECLOSED
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INTERESTS JUNIOR TO MORTGAGE BEING FORECLOSED
Foreclosure terminates the interests junior to the mortgage being foreclosed, but DOES NOT EFFECT senior interests. - Junior lienholders can seek a deficiency judgment, BUT CAN NO LONGER LOOK TO BLACKACRE FOR SATISFACTION Those with interests subordinate to those of the foreclosing party are: NECESSARY PARTIES TO THE FORECLOSURE ACTION SAME IS TRUE FOR THE DEBTOR-MORTGAGOR **FAILURE TO INCLUDE A NECESSARY PARTY RESULTS IN THE PRESERVATION OF THAT PARTY'S CLAIM, DESPITE FORECLOSURE AND SALE. Thus if necessary party not joined, their mortgage remains on the land. |
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EFFECT OF FORECLOSURE ON INTERESTS SENIOR TO THE MORTGAGE BEING FORECLOSED
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Foreclosure DOES NOT affect any interest senior to the mortgagee being foreclosed.
Thus BUYER AT FORECLOSURE SALE TAKES SUBJECT TO THESE INTERESTS. Thus while BUYER IS NOT PERSONALLY LIABLE for senior debt, senior creditor's can foreclose on the land Practical tip - when buying house with senior claims still existing - subtract from purchase price the amount of that claim. |
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PRIORITIES
General Rule Exception After Acquired Collateral Clause Subordination |
GENERAL RULE:
(1) As a creditor you MUST RECORD (2) Once recorded, FIRST IN TIME FIRST IN RIGHT RULE GENERALLY APPLIES EXCEPTION: PURCHASE MONEY MORTGAGEE HAS PRIORITY OVER LESS SPECIFIC MORTGAGEES This will come up in an after Acquired Collateral Clause Ex. C1 lends O 200K, taking an interest in "all O's real estate holdings, WHETHER NOW OWNED OR HEREAFTER ACQUIRED." Later, PM Mortgagee gives X loan to buy blackacre, taking an interest in blackacre as collateral. O then defaults on all obligations. --> C2 HAS PRIORITY OVER C1 WITH REGARD TO BLACKACRE |
Subordination Agreements -
Senior creditor agrees to subordinate its priority to a junior creditor. These are OK. |
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REDEMPTION IN EQUITY
Rule Timeline How Accomplished Acceleration Clause Waiver |
RULE OF EQUITABLE REDEMPTION:
At any time prior to the foreclosure sale, DEBTOR CAN TRY TO REDEEM THE LAND. Timeline: Once valid foreclosure takes place, RIGHT IS GONE How Accomplished: By paying of MISSED PAYMENTS + INTEREST + FORECLOSURE COSTS If mortgage or note contains ACCELERATION CLAUSE - must pay FULL BALANCE + accrued interest + costs |
Waiver - Debtor/mortgagor CANNOT WAIVE THE RIGHT TO REDEEM IN THE MORTGAGE ITSELF
(Called "CLOGGING THE EQUITY OF REDEMPTION") - prohibited as against public policy. |
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STATUTORY REDEMPTION
(NOT IN VA) |
Recognized in 50% of states - not VA
Debtor-mortgagor has a statutory right to redeem for a fixed period (6 months-1 yr) AFTER the foreclosure sale has occurred & The amount paid is usually the FORECLOSURE SALE PRICE - rather than the amount of the original debt. Usually, mortgagor-debtor has right to POSSESS the PROPERTY during the statutory period. When Mortgagor redeems effect is to NULLIFY THE FORECLOSURE SALE. |
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LATERAL SUPPORT
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If land improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, the excavator WILL BE LIABLE ONLY IF NEGLIGENT, however,
STRICT LIABILITY will attach to excavator's action if P shows that the improvements on his land DID NOT CONTRIBUTE TO THE COLLAPSE |
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WATER RIGHTS - RIPARIAN DOCTRINE
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Water belongs to those who own the land BORDERING THE WATER'S COURSE
These are RIPARIANS, who share the right of REASONABLE USE OF THE WATER Thus One riparian liable to another if his use UNREASONABLY INTERFERES with the other's use. |
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WATER RIGHTS - PRIOR APPROPRIATION DOCTRINE
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Water belongs INITIALLY to the STATE, but right to divert it and use it can be acquired by an INDIVIDUAL regardless of whether he happens to be a riparian owner.
Rights are determined by Priorit yof beneficial use (FIRST IN TIME FIRST IN RIGHT). ANY productive/beneficial use, including for AGRICULTURE, is sufficient to create the appropriation right. |
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GROUNDWATER
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Groundwater (percolating water) ='s Water beneath the surface of the earth that is NOT CONFINED to a known channel.
Surface owner entitled to REASONABLE USE OF GROUND WATER. However, use cannot be WASTEFUL. |
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SURFACE WATERS & THE COMMON ENEMY RULE
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Surface waters = those that come from rain, springs or melting snow, and which have not yet reached a natural watercourse or basin.
THE COMMON ENEMY RULE (Surface water is a BAD thing)- A landowner may change drainage or make any other changes/improvements on his land to combat the flow of surface water (modified by courts to prevent unnecessary harm to other's land) |
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POSSESSOR OF LAND'S RIGHTS (2)
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RIGHT TO BE FREE FROM TRESPASS
Trespass = Invasion of land by TANGIBLE, PHYSICAL OBJECT. Possessor must bring an EJECTMENT ACTION to remove RIGHT TO BE FREE FROM NUISANCE Private Nuisance = Substantial and unreasonable interference w/ another's use and enjoyment of land. NOTE - NO TANGIBLE PHYSICAL INVASION NEEDED (odors/noise ok) Hypersensitive P will not recover for nuisance |
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EMINENT DOMAIN
General Definition |
Govt's 5th AMENDMENT power to take private property for public use in exchange for just compensation.
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EMINENT DOMAIN
Explicit Takings |
Acts of Government condemnation
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EMINENT DOMAIN
IMPLICIT/REGULATORY TAKINGS |
GOVERNMENT REGULATION THAT, ALTHOUGH NOT INTENDED TO BE A TAKING, HAS THE SAME EFFECT.
RULE: Must work a ECONOMIC WIPEOUT of your investment. REMEDY: Gov't must either: (1) compensate owner, or (2) terminate the regulation & pay owner for damages that occurred while it was in effect. |
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ZONING
Definition |
Pursuant to its police powers, government may enact statutes to REASONABLY CONTROL LAND USE
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ZONING
The VARIANCE |
Variance is principal means of achieving flexibility in zoning.
Proponent must show: (1) UNDUE HARDSHIP (2) VARIANCE WILL NOT DECREASE THE NEIGHBORING PROPERTY VALUE Variance is granted or denied by ADMINISTRATIVE ACTION |
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ZONING
The NONCONFORMING USE |
Once lawful, existing use no deemed non-conforming by new zoning ordinance. Cannot be eliminated all at once unless just compensation paid. Otherwise it would be an unconstitutional taking.
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ZONING
UNCONSTITUTIONAL EXACTIONS |
Exactions = Amenities gov't seeks in exchange for granting permission to build.
MUST BE REASONABLY RELATED BOTH IN NATURE AND IN SCOPE TO THE IMPACT OF THE PROPOSED DEVELOPMENT> |
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