Texas Real Property - Texas Bar 2016

Front 1

A fee simple absolute

Back 1

In Texas, conveyances that are ambiguous are considered fee simple by default.

This is the largest possible estate in land, denoting the aggregate of all possible rights: (1) unimpeded right to sell or convey all or part of property (2) unimpeded right to devise property 0 may last in perpetuity.

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Fee simple determinable (defeaseble estate)

Back 2

terminates automatically on the happening of named future event created with single clause, NO COMAS " for so long as, during, while, until, as long as, unless: created in one clause and with a limitation built into that clause

Front 3

A defeasible estate is an estate subject to a condition subsequent and may be cut short when?

Back 3

the estate is retaken by the grantor or a 3rd party on happening of named future event "provided, however, however if, but if, on condition that" doesn't include merely "contractual agreement or understanding"

Front 4

Fee simple subject to an executory interest is when?

Back 4

an estate that is automatically divested in favor of a 3rd person on the happening of a named event. (basically the same as an estate subject to condition subsequent, except it goes to 3rd party) followed by shifting executory interest - subject to rule against perpetuity.

Front 5

How long does a life estate last for?

Back 5

the duration of the life that the estate is measured against.

If the measuring life if a third party it's called a "life estate Pur Autre Vie"

In Texas, no particle form of words is necessar to create a life estate - "for life" or "until her death" is sufficient." If a will devising property to a surviving parent with children and there is even the slightest indication of the intention that the children shall not take jointly the surviving parent will get a life estate and the remainder will go to the children.

Front 6

an act that adversely affect a future interest is called what?

Back 6

"Waste"

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Affirmative (Voluntary) waste

Back 7

Decreases value of property - Is prohibited, but natural resources may be consumed: for repair and maintenance of property, with permission of grantor, under open mines doctrine.

Applies to both life tenants and tenants for years.

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Permissive waste

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Decreases value of property - Premises deteriorate through neglect, a failure to preserve the property, or a failure to reasonably protect the property. Tenant/Life Estate holder is required to make reasonable repairs, but need not spend more than the amount of income generated by the property. Also must pay any property taxes and mortgage interest associated with the property.

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Ameliorative waste

Back 9

Increases value of property by permanently altering property - a life tenant is now allowed if the market value of the remainderman's interest is not impaired and either it is permitted by the remainderman or a substantial and permanent change in the neighborhood has deprived the property of reasonable current value.

Front 10

Duty of the life tenant?

Back 10

To maintain the property in a reasonable state of repair.

Duty is limited to the extent of income derived or reasonable rental value of the land.

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What is a reversion?

Back 11

A reversion is a future interest in a life estate (or term of years) retained by the grantor when the grantor transfers less than a fee interest to the 3rd person, a reversion is transferable, devisable, and descendable.

NOT subject to RAP, fully transferable.

Front 12

What is a possibility of reverter?

Back 12

A future interest in the grantor that follows a determinable estate. The right of reverter is BOTH assignable and devisable in Texas.

Happens AUTOMATICALLY

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What is the right of entry?

Back 13

The right of entry is the power of termination in by the grantor (or heirs of). It is a future interest held by the grantor that follows an estate subject to a condition subsequent. In Texas, right of enter broken condition is fully alienable.

O has to attempt reentry. It is NOT AUTOMATIC!

Front 14

What is alienation in property law?

Back 14

In property law Alienation is the capacity for a piece of property or a property right to be sold or otherwise transferred from one party to another.

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What is a remainder?

Back 15

A remainder is a future interest created in a 3rd person which is intended to take after the natural termination of the preceding estate.

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What is a vested remainder?

Back 16

A vested remainder requires its takers be ascertained at the time that the remainder is created. A vested remainder also must fall in automatically at the natural termination of the previous estate, meaning there are no conditions precedent to taking. A vested remainder is transferable, descendible, and devisable.

Front 17

What is a remainder that is vested subject to open?

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A remainder that is vested subject to open, sometimes called vested subject to partial divestment, is a remainder that has been made to a class (ex. "children") AND has at least one member who is ascertainable and who has satisfied nay conditions precedent to vesting, buy may have other member join the class later.

SUBJECT TO RAP!

Front 18

What is vested remainder subject to total divestment?

Back 18

A vested remainder subject to total divestment is presently vested buy may terminate on the happening of a future event "O gives to A for life, remainder to B so long as property is used for beers" O has possibility of reverter.

Front 19

When will a remainder be contingent?

Back 19

A remainder will be contingent if the takers are unacertained or the interest is subject to a condition precedent and therefore does not fall in automatically on the natural termination of the previous estate.

A contingent remainder is subject to RAP.

Front 20

Rule of destructibility of contingent remainders

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1) if it fails to vest by natural termination of prior vested estate;

2) merger occurs;

3) holder of the present possessory estate surrenders interest prior to vesting

ABOLISHED IN TEXAS

A Contingent remainder that has not vested at termination of prior vested estate will become an executory interest, subject to RAP.

Front 21

What is an executory interest?

Back 21

An executory interest is a future interest in a 3rd person that cannot become possessory automatically at the natural termination of the previous estate because it cuts off the previous estate (shifting executory interest) or it does not become presently possessory until some time after the natural termination of the previous estate (springing excutory interest).

Shifting executory interests - from the grantee

Springing executory interest - from the grantor

Front 22

Rule Against Perpetuities

Back 22

Common law RAP specific future interest are valid only if they must vest or fail by the end of a life in being plus 21 years.

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RAP measuring life

Back 23

must be NAME or specific i.e. A or ), not "A's children" (even if those children exist, because it's an "open" class - i.e., more could be born).

Front 24

Tenancy in common requires only;

Back 24

Unity of possession, which means each tenant in common has the right to possess the whole of the property.

Front 25

Inter Vivos

Back 25

between the living, from one person to another

Front 26

What a tenant in common may transfer?

Back 26

A tenant in common may transfer interest inter vivos voluntarily, through conveyance, lease, mortgage, or other transfer; OR

involuntarily, through a foreclosure on a mortgage of the tenant's interest.

Front 27

What is joint tenancy?

Back 27

Joint tenancy is the right of survivorship. Remember PITT.

IN TEXAS the right to survivorship must be expressly stated, otherwisewhen a cotenant dies,his interest does not pass to the surviving cotenants, but rather passes by hiswill or through intestacy.

Front 28

Joint Tenancy and Mortgages

Back 28

Lien Theory - Does not sever Joint Tenancy TEXAS is a Lien theory state

Title Theory - Severs Joint Tenancy, as it is a transfer of title

Front 29

Tenancy of the Entirety in Texas

Back 29

Is not ACKNOWLEDGED in Texas, because Texas is a community-property state.

Front 30

The Statute of Frauds

Back 30

The SoF requires for transfer of interest in real property

1) signed writing by party to be charged

2) essential terms: property, parties, price, any conditions.

Front 31

What is the doctrine of part performance

Back 31

The doctrine of part performance may be used to enforce otherwise invalid oral contracts due to the SoF.

Texas requires 3 things (1) payment of all/part of the purchase price (2) possession; (3) Improvements made by purchaser

Front 32

What is a marketable title?

Back 32

Marketable title means title is free and clear from reasonable doubt as to matters of law and fact: (defects in chain of title, encumbrances, zoning).

In Texas, a title is not marketable if clouded by an outstanding contract, covenant, interest, lien, or mortgage sufficient form a basis of litigation)

Front 33

What doesn't count as "not reasonably free from doubt" for a marketable title?

Back 33

Encroachment does not if it's a slight unencumberance

Physical defects such as termites DO NOT render title unmarketable

Front 34

Duty to disclose

Back 34

A seller of residential home must disclose to buyer material defects known to seller - affecting health and safety. Applies to sellers, not to realtors in Texas.

Front 35

TexasDistinction: Termination of Month-to-Month Tenancy

Back 35

In Texas, a month-to-month tenancy endson whichever is the later of:
i) The day given in the termination notice; or
ii) One month after the day notice is given.

If the term is lessthan one month, the tenancy terminates on whichever is thelater of:

i) The day given in the termination notice; orii) The day following the expiration period.

Ifthe tenancy terminates on a day that does not correspond with the beginning orend of the rent period, then the tenant is liable for rent only up to thetermination date.

Front 36

TexasDistinction: Damage Resulting in Inhabitability

Back 36

Ifthe damage causes complete inhabitability and the tenant, his family, a guest, or an inviteedid not cause such damage, then Texas law allows either the landlord or tenantto terminate the lease by giving written notice to the other party beforerepairs are completed. The tenant may receive a pro rata refund of rent andlawful security deposit.

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Texas Distinction: Landlord’s Remedies

Back 37

InTexas, if the landlord provides proper written notice to the tenant about theillegality of withholding rent or a proposed repair, and the tenant withholdsrent or causes the repairs to be performed, then the landlord may recover onemonth’s rent, plus $500.

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Commercial Lockout

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Permissible for failure to pay rent

Written notice on front door where to get new key after paying back rent

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Residential Lockout

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Must be in expressively provided in lease.

Must provide written notice whee tenant can get a new key at ANY hour regardless of whether the back rent is paid.

Front 40

Wrongful Lockout by landlord

Back 40

The tenant may recover:
i) Possession of the property (or terminate thelease); and

ii)One month’s rent plus $1,000, actual damages,court costs, and attorney’s fees, less any delinquent rent or other monies owedto the landlord.

Front 41

Eviction of Tenant

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Landlord must give holdover tenant 3 days notice to vacate property.

Suit must be brought in precinct where property is located.

Landlord can recover attorney and court costs if proper notice is given.

Front 42

Commercial landlord Lien

Back 42

Acommercial landlord has a preference lien on the property of the tenant in thebuilding for rent that is due and for rent that is to become due during thecurrent 12-month period succeeding the date of the beginning of the rentalagreement or an anniversary of that date.

The lien is unenforceable if the rent is more than six months past due, unlessthe landlord files a lien statement with the county clerk in which the buildingis located.

Thelandlord may apply for a distress warrant if the tenant (i) owes rent, (ii) isabout to abandon the building, or (iii) is about to remove the tenant’sproperty from the building.

Front 43

Security Deposits

Back 43

Commercial - 60 days to return

Residential - 30 days to return

Thelandlord may deduct any damages or charges for which the tenant is liable underthe terms of the lease, or because the tenant breached the lease. The landlordmay not retain any of the deposit to cover normal wear and tear, and must itemizeand describe in writing all of the deductions. No itemized list is required,however, if the tenant owed rent when he surrendered possession and there is nocontroversy as to how much rent is owed.

Front 44

Texas Point of Law: Duty to Mitigate

Back 44

Can't be waived, burden to prove landlord failed is on the tenant. This is a Affirmative defense.

Front 45

Texas Distinction: Remedies for Anticipatory Breach

Back 45

Texascourts recognize four possible causes of action by a landlord against a tenantwho breaches a lease by abandoning the premises. The landlord may (i) maintainthe lease and sue for rent as it becomes due, (ii) treat the breach as ananticipatory repudiation, repossess, and sue for the present value of futurerentals reduced by the reasonable cash market value of the property for theremainder of the lease term, (iii) treat the breach as anticipatory, repossess,release the property, and sue the tenant for the difference between thecontractual rent and the amount received from the new tenant, or (iv) declarethe lease forfeited (if the lease so provides) and relieve the tenant ofliability for future rent.

Front 46

Texas Distinction: Warranty of Habitability

Back 46

In Texas, a landlord must provide a safe, decent, andsanitary dwelling, make repairs of any conditions that threaten the health orsafety of an ordinary tenant, and install a hot-water device, smoke detectors,and secure locks on all door and windows.

A landlord also must make a diligenteffort to repair a condition, if:

i) The tenant gives proper notice ofthe condition;

ii) The tenant is notdelinquent on his rent at thetime notice is given; and

iii) The condition materiallyaffects the health and safety of an ordinarytenant.

Ifthe landlord breaches, then the tenant may terminate the lease, remedy thedefect and offset the cost against the rent (repair and deduct), sue fordamages, or defend against eviction if the premises are not safe or habitable.

Front 47

Texas Distinction: Retaliatory Eviction

Back 47

UnderTexas law, a landlord may not retaliate against a tenant because the tenantestablishes, attempts to establish, or participates in a tenant organization

Front 48

Texas Distinction: Duty to Provide Copy of Lease

Back 48

Must provide a copy within 3 business days. Until tenant(s) get a copy landlord can only enforce the tenant(s) duty to pay rent. Non-receipt of lease doesn't invalidate lease.

Front 49

Texas Distinction: Prior Approval Required to Sublet

Back 49

InTexas, a tenant may not assign or sublet the leasehold to another personwithout the prior consent of the landlord.

Front 50

Texas Distinction: Terminating Adverse Possession

Back 50

In Texas, adverse possession is terminated when the ownerfiles a lawsuit to recover possession of his land.

Front 51

Texas Distinction: Adverse Possession

Back 51

InTexas, possession must be continuous and uninterrupted for 25 years. A claimant must show adverse possession by (i)openly exercising dominion over the property or (ii) asserting ownership undera recorded instrument for the required period.

There are some exceptions to this 25-year period, includingthree-, five-, and ten-year statutes of limitations periods for bringing suitto recover land that has been adversely possessed.

Front 52

Texas Distinction: Adverse Possession - 10 Years

Back 52

160 acres or less and the claimant has peaceably and adverselypossessed the land and cultivated crops or otherwise enjoyed the real property.

A claimant must demonstrate (i) possession of the land, (ii) cultivation, use, orenjoyment thereof, (iii) an adverse or hostile claim, (iv) an inclusivedominion over the property and appropriation of it for his own use and benefit,(v) for the statutory period

Front 53

Texas Distinction: Adverse Possession - 5 Years

Back 53

There is a five-year statute of limitations for filing asuit to recover possession when the claimant:

i) Has cultivated, used, or enjoyed the property;

ii) Has paid taxes; and

iii) Isclaiming rights to the property under a deed, unless the deed is forged orexecuted under a forged power of attorney.

Front 54

Texas Distinction: Adverse Possession - 3 Years

Back 54

Aperson must bring an action to recover real property held by another inpeaceable and adverse possession when there is title or color of title thatseems irregular or may have been improperly recorded during a three-yearstatute of limitations period.

Front 55

Texas Distinction: Adverse Possession -Public Land

Back 55

Has to be abandoned first. Just a delay in use, does not equate abandonment, nor does misuse of the public land. Only part of the public land needs to be used to constitute all of the land being used.

Front 56

TexasPoint of Law: Adverse Possession - Disability of the Owner

Back 56

Theadverse possession statutes of three, five, and ten years do not begin to runif the owner of the property is disabled either at the time that the adversepossession commences or at the time that the property vests.

Front 57

Texas Distinction: Seller’s Disclosure of Property Condition

Back 57

Aseller of residential real property comprising not more than one dwelling unitlocated in Texas must give the purchaser of the property a written Seller’s Disclosureof Property Condition. The disclosure must be completed to the best of seller’sbelief and knowledge as of the date the notice is completed and must be signedby the seller. If the information required by the notice is unknown to theseller, the seller must indicate that fact on the notice. The notice must bedelivered to the purchaser on or before the effective date of the contractbinding the purchaser to purchase the property. If a contract is enteredwithout the seller providing the required notice, the purchaser may terminatethe contract for any reason within seven days after receiving the notice.

Front 58

Texas Point of Law: Uniform Vendor and Purchaser Risk Act

Back 58

Texasadopted the Uniform Vendor and Purchaser Risk Act to ensure that anyreal-property contract made within the state is interpreted to include anagreement that the parties have certain rights and duties prescribed by statuteunless expressly stated otherwise. If the property is destroyed oruninhabitable before title or possession passes, then the seller may notenforce the contract and the purchaser may recover any portion of the contractprice paid. If title has passed, the purchaser may not recover any monies paidand must pay the contract price.

Front 59

TexasPoint of Law: Purchaser Protection

Back 59

Texashas reformed the law regarding contracts for deeds to protect purchasers ofreal property that is to be used as a residence. Most notably, the seller mustgive the defaulting purchaser a prescribed statutory notice before enforcing aforfeiture of the purchaser’s interest. If the purchaser defaults after paying40% or more of the amount due, or the equivalent of 48 monthly payments, thenthe seller is granted the power to sell, through a trustee designated by theseller, the purchaser’s interest in the property. The seller may not enforcethe remedy of rescission or of forfeiture and acceleration.

Front 60

TexasDistinction: NonjudicialForeclosure

Back 60

The non-judicial foreclosureprocess is used if a power-of-sale clause exists in a mortgage or deed of trustauthorizing the sale of the property to pay off any default loan balance. Theloaner must provide the debtor with written notice by certified mail statingthat the debtor is in default and has at least 20 days to cure the defaultbefore notice of sale will be given. After the 20 days pass, notice of the salemust be filed with the county clerk, posted on the courthousedoor of each county in which the property is located and designating the countyin which the property will be sold, and served on the debtor by certified mailat least 21 days before the sale date.

Anon-judicial foreclosure sale must be a public sale at auction held between 10a.m. and 4 p.m. on the first Monday of the month. The sale must be held at thecounty courthouse in the county in which the land is located. If the propertyis located in more than one county, then the sale may be held at the courthousein any county in which the property is located. The commissioner’s court mustdesignate an area at the courthouse where the non-judicial foreclosure sale isto take place. The sale must be held at the designated area.

Strict compliance with the statutory requirements is necessary for avalid non-judicial foreclosure sale.Thepurchaser of the real property at a non-judicial foreclosure sale takes theproperty “as is” without any express or implied warranties.

Front 61

TexasDistinction: Foreclosure-Deficiency Judgment

Back 61

Ifthe price of the real property sold at a foreclosure sale does not cover theunpaid balance of the debt, then any action brought to recover such deficiencymust be brought within two years of the sale. The court may determine the fairmarket value of the property as of the date of the foreclosure sale. The amountthat may be recovered is the difference between the debt and the judiciallydetermined fair market value of the property

Front 62

TexasDistinction:Judicial Foreclosure:

Back 62

Thejudicial foreclosure process involves filing a lawsuit to obtain a court orderto foreclose upon the property. The judicial process is used if nopower-of-sale clause is present in the mortgage or deed of trust. After thecourt declares a foreclosure, the real property will be auctioned off. Upondefault, any secured creditor may judicially foreclose on the property or sueon the underlying debt.

Front 63

TexasDistinction:Foreclosure -Redemption:

Back 63

Homeowners may end theforeclosure process by paying off the debt before the foreclosure sale begins.This process is known as an “equity of redemption.”

The seller must notify a purchaser who is in default of their right to cure thedebt and allow the purchaser at least 60 days to do so.

There is, however, no after-sale right of redemption in Texas.

Front 64

TexasDistinction:Deed in Lieu of Foreclosure:

Back 64

Homeownersmay convey the property back to the lender in exchange for canceling anyoutstanding debt. The lender must consent to the process.

Front 65

Texas Distinction: Strips and Gores Doctrine

Back 65

Thedoctrine states that when a deed conveys land abutting a street, publichighway, or railroad right-of-way, title to the center of the street, publichighway, or railroad right-of-way also passes by the deed, unless the grantorexplicitly reserves with plain and specific language in the deed a fee in thenarrow strip of land adjoining the conveyed land.

Thestrips and gores doctrine does not apply if the grantor owns land abutting bothsides of the strip. In addition, the doctrine does not apply if the strip islarger and more valuable than the conveyed tract.

Front 66

TexasDistinction: Correction Instruments

Back 66

Nonmaterial correction: Anyone have knowledge and sent to all original parties or successors in intersest.

Material corrections: Original Party or successor in interest (heirs, etc).

Recordedin each county in which the original instrument of conveyance that is beingcorrected is recorded.

Front 67

TexasDistinction: Recording Requirements

Back 67

In Texas, an instrument conveying real property may nonerecorded unless it is signed and acknowledged or sworn to by the grantor:

i) In the presence of two or more crediblesubscribing witnesses; or

ii) Before and certified by an officer authorized totake acknowledgements or oaths.

Front 68

Texas Point of Law: Notice Jurisdiction

Back 68

Pure Notice Jurisdiction.

The Texas recording statute explicitly protects creditors without notice of priorconveyances.

Front 69

TexasDistinction: Restraints on Alienation

Back 69

Althoughunreasonable restraint on alienation is void and unenforceable, it does notrender the entire deed void

Front 70

Texas Distinction: Transferability of Easements in Gross

Back 70

Only statutoryconservation easementsin gross and are assignable

Front 71

Texas Distinction: Prescription Period

Back 71

10 years

Front 72

TexasDistinction: Discriminatory Provisions

Back 72

InTexas, if a restriction that affects real property, or a provision in a deedthat conveys real property or an interest in real property, whether express orincorporated by reference, prohibits the use by or the sale, lease, or transferto a person because of race, color, religion, or national origin, then theprovision or restriction is void

Front 73

TexasDistinction: Water Rights Adjudication Act

Back 73

Prior to 1895 Riparian rights. If can trace title back to 1823-1895. After that Water Rights Adjudication Act.

Texaslandowner claiming a right to use the water to file a sworn statement,participate in an evidentiary hearing, and obtain a certificate of adjudication. Narrow exceptions for domestic and livestock use - timely file claim with with the Texas Commission on EnvironmentalQuality or right is considered abandoned.

Requirements for either;

1) land must be adjacent to natural body of water - not man made

2) water must be normal flow - Not flood, not man-altered

Front 74

TexasDistinction: Groundwater

Back 74

- Absolute control of landowner

- liablefor subsidence of another’s land

- useis subject to environmental regulations

- Wellsmust be controlled to prevent injury of others

Groundwaterownership entitles the landowner to drill for and produce the groundwater belowthe surface of real property, without causing waste or malicious drainage ofother property or negligently causing subsidence. However, ownership does notentitle a landowner to the right to capture a specific amount of groundwaterbelow the surface of that landowner’s land and does not affect the existence ofcommon-law defenses or other defenses to liability under the rule of capture

Front 75

TEXAS HOMESTEAD

Back 75

Rural - 200 family, 100 single adult

Urban - 10 acres (an urban homestead is on located within city limits, served by a municipal police and fire departments and have at least 3 of the following:electric,natural gas, sewer, storm sewer, or water services)

Homestead can be more than one lot, but can not be 'mixed'.

Personal property can be a homestead if ATTACHED to the land.

Business Homestead - Fine as long as contiguous, if rural and not contiguous it can not be more than 10 acres and must be if it is necessary for the enjoyment of the homestead more than just bringing in money and supporting the family.

Front 76

Legal effect of Homestead

Back 76

Prevents creditors from forcing the sale of the homestead, unless the money was used on the home in some way.

Front 77

Mechanic's/Materialman's Liens

Back 77

Priority over other liens

1) affidavit with county clerk 15th day of 4th month (3rd for residential) after debt incurs - Sworn statement of amount of claim; name & address of owner, original contractor, and claimant; statement of work performed and material furnished; and legally sufficient description of property to be charged with the lien.

2) Notice given by registered or certified mail to owner of property NLT 5 days after filing of affidavit.

*If subcontractor written notice is 15th day of 2nd month after labor /material delivered. In non residential project a second notice will be given to owner & original contractor NLT 15th day of the 3rd month.

REMEDIES: Subcontract may receive payment from Owner who may withhold from contractor. Court cost and reasonable attorney fees are available.

Required Retainage:

Property owner MUST retain during the progress and 30 days after 10% contract price of work or value of work measured based on remaining work or reasonable value of work completed.

Front 78

Vendor'sLien

Back 78

Breach of a real estate contract may give rise to a lien infavor of a vendor. An equitable lien may be imposed for the benefit of a vendorwho passed legal title to the vendee but did not receive the entire purchaseprice. In Texas, the vendor’s lien may be expressly reserved in the deed.If the buyer defaults, the vendor may foreclose theequitable lien and sue for the balance of monies owed, rescind the contract andtake possession of the property, or sue to recover title and possession. Wherea vendor has expressly reserved a lien in the deed, the vendor retains legaltitle and may sue the buyer for the amounts owed under the real estatecontract.