Term
| Present Possessory Estates - Fee Simple Absolute |
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Definition
largest estate recognized by law
it can be sold, divided, devised, or inherited, and has an indefinite and possibly infinite duration
today, a fee simple is presumed in the absence of express contrary intent |
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Term
| Present Possessory Estates - Defeasible Fees |
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Definition
fee simple estates (i.e., of uncertain or potentially infinite duration) that can be terminated upon the happening of a stated event
Fee Simple Determinable
Fee Simple Subject to a Condition Subsequent
Fee Simple Subject to an Executory Interest |
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Term
| Present Possessory Estates - Fee Simple Determinable |
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Definition
A fee simple determinable terminates upon the happening of a stated event and AUTOMATICALLY REVERTS to the grantor
It is created by durational language: "For so long as" "while" "during" "until"
FSD can be conveyed, but grantee takes subject to the estate's being terminated by the specified event
CORRELATIVE FUTURE INTEREST IN GRANTOR: Possibility of Reverter--automatically retained by the grantor. Possibility of reverter is transferable, descendable, and devisable. |
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Term
| Present Possessory Estates - Fee Simple Subject to a Condition Subsequent |
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Definition
A fee simple subject to a condition subsequent is an estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event
the estate does NOT automatically terminate; grantor must take some action
created by conditional words: "upon condition that" "but if" "provided that" "if it happens that"
CORRELATIVE FUTURE INTEREST IN GRANTOR: Right of Entry--it must be expressly reserved, does not arise automatically |
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Term
| Present Possessory Estates - Fee Simple Subject to an Executory Interest |
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Definition
If a fee simple estate terminates upon the happening of a stated event and then passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate, the third party has an executory interest
EXAMPLE: "To A and his heirs for so long as liquor is not sold on the premises; in that event, to B." B has an executory interest. |
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Term
| Present Possessory Estates - Fee Tail |
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Definition
the fee tail is an estate where inheritability is limited to linear heirs.
created by the language "To a and the heirs of his body." Most jurisdictions have abolished the fee tail, and attempts to create one result in a fee simple. |
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Term
| Present Possessory Estates - Life Estate |
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Definition
a life estate is one measure by the life or lives of one or more persons.
For Life of Grantee: "to A for life," "to B after the life of A"
Life Estate Pur Autre Vie: measured by a life other than the grantee's ("to A for the life of B") |
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Term
| Rights and Duties of Life Tenant - Doctrine of Waste |
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Definition
a life tenant is entitled to ordinary uses and profits of the land, but cannot do anything that injures the interests of a remainderman or reversioner
Affirmative Waste: natural resources--exploitation of natural resources by a life tenant is generally limited to situations when 1) necessary for repair or maintenance, 2) the land is suitable only for such use, or 3) it is expressly or impliedly permitted by the grantor. Under the open mines doctrine, life tenant may continue mining the land, but can only use the mines already open.
Permissive Waste: occurs when the life tenant fails to protect or preserve the land. A life tenant is obligated to: preserve land and structures in a reasonable state of repair, pay interest (not principal) on mortgages, pay ordinary taxes on land.
Ameliorative Waste: a change that benefits the property economically. Permissible if: -the market value of the future interests in not diminished, and EITHER
--the remaindermen do not object, or
--a substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity or usefulness |
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Term
| Future Interests - Reversionary Interests--Future Interests in Transferor |
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Definition
Possibility of Reverter - future interest corresponding to a fee simple determinable
Right of Entry - future interest corresponding to a fee simple subject to a condition subsequent
Reversion - the estate left in a grantor who conveys less than she owns (O conveys "to A for life"; O has a reversion). Does not have to be expressly reserved.
All reversionary interests are vested, and thus not subject to the Rule Against Perpetuities. |
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Term
| Future Interests - Remainders |
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Definition
a future interest in a third person that can become possessory on the natural expiration of the preceding estate
must be expressly created in the interest creating the preceding possessory estate
must immediately follow preceding estate--no time gap allowed
EXAMPLE: O conveys "to A for life, then to B and his heirs." B has a remainder. |
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Term
| Future Interests - Remainders - Indefeasibly Vested Remainder |
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Definition
a vested remainder is one created in an existing and ascertained person, and not subject to a condition precedent. The remainderman has a right to immediate possession upon normal termination of the estate.
an indefeasibly vested remainder is a vested remainder that is not subject to divestment or diminution |
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Term
| Future Interests - Remainders - Vested Remainder Subject to Open |
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Definition
a vested remainder created in a class of persons (e.g., "children") that is certain to become possessory, but is subject to diminution--by the birth of additional persons who will share in the remainder as a class.
EXAMPLE: O conveys "to A for life, then to the children of B." A and B are living, and B has one child, C. C has a vested remainder subject to open. |
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Term
| Future Interests - Remainders - Vested Remainder Subject to Total Divestment |
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Definition
a vested remainder subject to a condition subsequent
EXAMPLE: O conveys "to A for life, then to B and his heirs; but if B dies unmarried, then to C and his heirs." B has a vested remainder subject to complete divestment by C's executory interest. |
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Term
| Future Interests - Remainders - Contingent Remainder |
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Definition
| those created in unborn or unascertained persons, or subject to a condition precedent |
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Term
| Future Interests - Remainders - Contingent Remainder - Subject to a Condition Precedent |
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Definition
a condition is precedent if it must be satisfied before the remainderman hasa right to possession.
EXAMPLES:
1) O conveys "to A for life, then to B and his heirs if B marries C." B's remainder is contingent because he must marry C before he can take possession.
2) O conveys "to A for life, then to B and his heirs if B marries C, otherwise to D and his heirs." B and D have alternative contingent remainders. |
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Term
| Future Interests - Remainders - Contingent Remainder - Unborn or Unascertained Persons |
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Definition
a remainder created in unborn or unascertained persons is contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding estate ends.
EXAMPLE: O conveys "to A for life, then to the children of B." If B is childless at the time, remainder is contingent. |
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Term
| Future Interests - Remainders - Contingent Remainder - Destructibility of Contingent Remainders and Doctrine of Merger |
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Definition
MOST STATES HAVE ABOLISHED THIS...at common law, a contingent remainder was destroyed if it failed to vest before or upon the termination of the preceding freehold estate.
EXAMPLE: O conveys "to A for life, then to B if she reaches age 21." If A dies before B reaches age 21, B's remainder is destroyed.
NEW RULE: B's interest would be converted to an executory interest upon A's death because it will divest O's reversionary estate when B turns 21.
Doctrine of Merger: when one person acquires all of the present and future interests in land except a contingent remainder, under common law, contingent remainder is destroyed. |
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Term
| Future Interests - Remainders - Rule in Shelley's Case |
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Definition
ABOLISHED IN MOST STATES
if the same instrument created a life estate in A and gave the remainder only to A's heirs, the remainder was not recognized, and A took the life estate AND the remainder. |
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Term
| Future Interests - Remainders - Doctrine of Worthier Title |
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Definition
a remainder in grantor's heirs is invalid and becomes a reversion in the grantor.
EXAMPLE: O grants Blackacre "to A for life, then to the heirs of O." Under DOWT, A has a life estate, and O has a reversion. |
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Term
| Future Interests - Executory Interests |
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Definition
future interests in third parties that either:
-divest a transferee's preceding freehold estate (shifting interests) or
-follow a gap in possession or cut short a grantor's estate (springing interests)
EXAMPLES:
1) O "to A and his heirs when A marries B." A has a springing executory interest because it divests the grantor's estate.
2) O "to A for life, then to B and his heirs; but if B precedeceases A, then to C and his heirs." C has a shifting executory interest, because it divests a transferee's preceding estate |
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Term
| Future Interests - Transferability of Remainders and Executory Interests |
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Definition
| today, most courts hold that remainders and executory interests are freely transferable. |
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Term
| Future Interests - Class Gifts |
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Definition
a class is a group of persons sharing a common characteristic (e.g., children, nephews).
share of each member is determined by the number of persons in the class
a class gift of a remainder may be vested subject to open (where at least one class member exists) or contingent (when all group members are unascertained) |
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Term
| Future Interests - Class Gifts - When the Class Closes |
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Definition
in the absence of express contrary intent, a class closes when some member of the class can call for distribution of her share of the class gift
EXAMPLE: T's will devises property to W for life, then to A's children. At the time will is executed, A has two children, B and C. A then has another child, D. T dies. A then has child E, then W dies. After W's death, A has another child, F. The class closed at W's death, because it was time to make the distribution, B, C, D, and E share the property, and F is excluded. |
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Term
| Future Interests - Class Gifts - Survival |
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Definition
| survival of a class member to closing is usually unnecessary to share in a future gift UNLESS it was made an express condition ("to A and his surviving children") |
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Term
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Definition
Application of RAP: RAP applies to the equitable future interests of the beneficiaries in a private trust just as it does to "legal" future interests.
Creation of a trust: a trust can be created by will or inter vivos transfer. Must be in writing if a trust of real property.
Charitable trusts: must have a charitable purpose. These differ from other trusts in three important ways:
1) charitable trust must have indefinite beneficiaries
2) may be perpetual (i.e., RAP doesn't apply)
3) cy pres doctrine, which allows a court to select an alternate charity when the purpose of the settlor becomes impossible or impracticable, applies. |
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Term
| Rule Against Perpetuities |
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Definition
No interest in property is valid unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.
Applies to contingent remainders, executory interests, vested remainders subject to open, options to purchase, rights of first refusal, and powers of appointment. |
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Term
| Rule Against Perpetuities - When Period Begins to Run |
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Definition
for interests created by will: runs from the date of the testator's death
for deeds: date of delivery
for irrevocable trusts: date of creation
for revocable trusts: date trust becomes irrevocable |
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Term
| Rule Against Perpetuities - "Must Vest" |
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Definition
an interest vests for RAP purposes when it becomes:
1) possessory, or
2) an indefeasibly vested remainder, or
3) a vested remainder subject to total divestment |
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Term
| Rule Against Perpetuities - "Lives in Being" |
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Definition
Unless other measuring lives are specified, one connected with the vesting of the of the interest will be used.
Any lives may be denominated measuring lives, provided they are human, and of reasonable number. |
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Term
| Rule Against Perpetuities - Interests Exempt from Rule |
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Definition
| Except for vested remainders subject to open, RAP does not apply to vested remainders. (other vested remainders, reversions, possibilities of reverter, and rights of entry are not subject to RAP) |
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Term
| Rule Against Perpetuities - Consequence of Violating Rule |
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Definition
| violation of RAP destroys ONLY the offending interest |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Executory Interest Following Defeasible Fee |
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Definition
generally, an executory interest that follows a defeasible fee violates RAP.
EXAMPLE: "to A for so long as no liquor is consumed on the premises, then to B." |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Age Contingency Beyond Age Twenty-One in Open Class |
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Definition
a gift to an open class contingent on members surviving beyond age 21 violates RAP
EXAMPLE: "To A for life, then to those of A's children who attain the age of 25." |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Fertile Octogenarian |
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Definition
a woman is conclusively presumed to be capable of bearing children, regardless of her age or medical condition
EXAMPLE: "To A for life, then to A's children for life, then to A's grandchildren in fee." Remainder in A's grandchildren is invalid, even though A is 80 years old. |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Unborn Widow or Widower |
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Definition
because a person's widow (or widower) is not determined until his death, it may turn out to be someone who was not in being at the time of the disposition
EXAMPLE: O conveys "to A for life, then to A's widow for life, then to A's surviving issue in fee." The gift to A's issue is invalid because A's widow might be a spouse who was not in being when the interest was created. |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Administrative Contingency |
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Definition
a gift conditioned on an administrative contingency (e.g., admission of a will to probate) violates RAP
EXAMPLE: a gift "to my issue surviving at the distribution of my estate" in invalid because the estate might be administered beyond the period of the Rule. |
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Term
| Rule Against Perpetuities - Rule in Operation - Common Pitfall Cases - Options and Rights of First Refusal |
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Definition
generally, an option to purchase or right of first refusal that is structured so that it might be exercised later than the end of he perpetuities period is void
EXAMPLE: When O conveys Blackacre to A, he includes a clause in the deed that states, "A, his heirs, and assigns promise that upon finding a ready, willing, and able buyer for Blackacre, Blackacre will be offered to O, his heirs, or assigns on the same terms." This violates the Rule. |
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Term
| Rule Against Perpetuities - Application to Class Gifts |
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Definition
"Bad-as-to-One, Bad-as-to-All" Rule: if the interest of any class member may vest too remotely, the whole class gift fails for the class gift to vest, class must be closed and all conditions precedent must be satisfied for every member.
Each gift to a subclass may be treated as a separate gift under the Rule.
Per Capita Gift Exception: a gift of a fixed amount to each member of a class is not treated as a class gift under the Rule |
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Term
| Rule Against Perpetuities - Statutory Reforms |
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Definition
most states modify the Rule, either with "wait and see" provisions or alternate vesting periods.
unless referred to in the question, these reforms are irrelevant for the MBE. |
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Term
| Rule Against Restraints on Alienation |
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Definition
| generally, any restriction on the transferability of a legal (as opposed to equitable) interest is void |
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Term
| Rule Against Restraints on Alienation - Types of Restraints |
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Definition
3 types:
1) disabling restraints, under which attempted transfers are invalid
2) forfeiture restraints, under which an attempted transfer forfeits the interest
3) promissory restraints, under which an attempted transfer breaches a covenant |
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Term
| Rule Against Restraints on Alienation - Restraints on a Fee Simple |
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Definition
all absolute restraints on a fee simple are void
may restrain a fee simple for a limited time and reasonable purpose
discriminatory restraints: judicial enforcement of restraints prohibiting the transfer or use of property to or by a person of a specified racial, religious, or ethnic group is discriminatory state action forbidden under 14th Amendment |
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Term
| Rule Against Restraints on Alienation - Restraints on a Life Estate |
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Definition
| forfeiture and promissory restraints on life estates are valid, but disabling restraints are void |
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Term
| Rule Against Restraints on Alienation - Other Valid Restraints on Alienation |
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Definition
These are valid restraints on alienation:
-forfeiture restraints on transferability of future interests
-reasonable restrictions in commercial transactions
-rights of first refusal
-restrictions on assignment and sublease of leaseholds |
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Term
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Definition
| an estate in land can be held concurrently by several persons, all of whom have the right to enjoyment and possession of the land |
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Term
| Concurrent Estates - Joint Tenancy |
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Definition
| a joint tenancy's distinguishing feature is the right of survivorship--when one joint tenant dies, the property is freed from her concurrent interest (her survivors do not succeed to it) |
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Term
| Concurrent Estates - Creation |
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Definition
Common law requires four unities--time, title, interest, possession
the interests of joint tenants must be equal in every way; they must take identical interests, at the same time, by the same instrument, with the same right to possession
thus, all interests in joint tenancy must be equal shares (if the are three JTs, then each has an undivided one-third interest) |
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Term
| Concurrent Estates - Severance |
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Definition
under certain circumstances, right of survivorship is severed, and a tenancy in common results
Inter Vivos Conveyance: a voluntary or involuntary conveyance by a joint tenant of her undivided interest destroys the joint tenancy. The transferee takes as a tenant in common. When there are more than two joint tenants, conveyance by one destroys the joint tenancy only to the extent of the conveyor's interest.
Transactions that may not result in severance:
-Judgment Liens: only severs when sold at a foreclosure sale
-Mortgages: only severs if foreclosed on
-Leases: states are split
Contract to Convey: K by one JT to convey interest severs, but states are split on whether an executory K by all JTs works to sever
Testamentary Disposition Has No Effect: at death, testator's interest vanishes
Effect of One JT Murdering Another: states are split (!!!) |
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Term
| Concurrent Estates - Tenancy by the Entirety |
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Definition
| marital estate akin to joint tenancy |
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Term
| Concurrent Estates - Tenancy in Common |
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Definition
concurrent estate with no right of survivorship
tenants can hold different interests in the estate, but each is entitled to possession of the whole
interests are alienable, devisable, and inheritable |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Possession |
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Definition
| each co-tenant has the right to possess all portions of the property, but has no right to exclusive possession |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Rents and Profits |
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Definition
most states: a co-tenant in possession can retain profits from her own use of the property
must share rents and net profits gained from exploitations of land (e.g., mining) |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Effect of One Concurrent Owner's Encumbering the Property |
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Definition
| may encumber the property, but may not encumber other concurrent tenant's interests (e.g., a mortgage is only good against the tenant getting the mortgage) |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Remedy of Partition |
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Definition
any co-tenant has the right to judicial partition, either in kind (physical division of land) or by sale and division of the proceeds
courts prefer division in kind |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Expenses for Preservation of Property--Contribution |
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Definition
Repairs: a co-tenant who pays more than her pro rata share of necessary repairs is entitled to contribution from the other co-tenants, provided she has notified the others of the need for repairs
Improvements: no right of contribution for the cost of improvements unless there is partition
Taxes and Mortgages: contribution can be demanded for taxes or mortgage payments paid on the entire property |
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Term
| Concurrent Estates - Rights and Duties of Co-Tenants - Duty of Fair Dealing |
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Definition
| a confidential relationship exists among co-tenants, e.g., one co-tenant's acquisition of an outstanding title or lien that may affect the estate is deemed to be on behalf of other co-tenants |
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Term
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Definition
| an estate in land under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion) |
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Term
| Leasehold - Tenancies for Years |
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Definition
| continues for a fixed period of time (e.g., L rents to T for two years) |
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Term
| Leasehold - Tenancies for Years - Creation |
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Definition
| usually created by written leases--writing required by Statute of Frauds if lease is for more than one year |
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Term
| Leasehold - Tenancies for Years - Termination |
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Definition
ends automatically at its termination date
breach of covenant: most leases reserve to the landlord a right of entry, whereby lease can be terminated if the tenant breaches
-failure to pay rent
surrender: if tenant surrenders the lease and landlord accepts, tenancy for years is terminated |
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Term
| Leasehold - Periodic Tenancies |
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Definition
| continues for successive periods (e.g., month to month) until terminated by proper notice by either party |
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Term
| Leasehold - Periodic Tenancies - Creation |
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Definition
created by:
-express agreement (L leases to T from month to month)
-implication (L leases to T at a rent of $1000 payable monthly)
-operation of law (T remains in possession after lease expires, and L treats it as a periodic tenancy; or, lease is invalid, but T goes into possession) |
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Term
| Leasehold - Periodic Tenancies - Termination |
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Definition
periodic tenancy is automatically renewed until proper notice given
generally, notice must be one full period in advance |
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Term
| Leasehold - Tenancies at Will |
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Definition
| terminable at the will either of the landlord or the tenant |
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Term
| Leasehold - Tenancies at Will - Creation |
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Definition
| generally, must be created by an express agreement that the lease can be terminated at any time. Absent such an agreement, periodic rent payments will lead court to treat it as a periodic tenancy |
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Term
| Leasehold - Tenancies at Will - Termination |
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Definition
| may be terminated without notice by any party with the power to do so, or may be terminated by operation of law (death, commission of waste, etc.) |
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Term
| Leasehold - Tenancies at Sufferance - Creation |
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Definition
| arises when a tenant wrongfully remains in possession after the termination of a lawful tenancy |
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Term
| Leasehold - Tenancies at Sufferance - Termination |
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Definition
| lasts only until landlord takes steps to evict the tenant. No notice of termination required. |
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Term
| Leasehold - The Hold-Over Doctrine |
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Definition
if a tenant continues in possession after his right to possession has ended, landlord may 1) evict him, or 2) bind him to a new periodic tenancy. Generally, terms of the expired tenancy govern the new one.
if landlord notifies the tenant before lease expires that occupancy after the termination will be at increased rent, the tenant, by holding over, is held to have acquiesced to the new terms |
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Term
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Definition
K that governs the landlord-tenant relationship
covenants in lease are usually independent (breach of a covenant can lead to damages, but does not release other party from performing) |
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Term
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Definition
a tenant cannot damage (commit waste on) the leased premises
destruction of premises without fault: if destruction of property is not the fault of landlord or tenant, no waste is involved. most states give tenant right to terminate lease in this situation. |
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Term
| Tenant's Duty to Repair - Types of Waste |
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Definition
3 types:
1) voluntary (affirmative) waste: results when the tenant intentionally or negligently damages the premises or exploits minerals on the property
2) permissive waste: when the tenant fails to take reasonable steps to protect the premises from damage from the elements
3) ameliorative waste: when the tenant's alteration increases the value of the property
tenant's liability for covenants to repair: for residential tenant, landlord usually remains obligated to repair; for non-residential tenant, covenant to repair is more enforceable. |
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Term
| Tenant's Duty to Not Use Premises for Illegal Purpose |
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Definition
| if tenant uses premises for an illegal purpose, landlord has right to terminate the lease |
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Term
| Tenant's Duty to Pay Rent |
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Definition
leases usually contain provision making rent payable at a specific time ("monthly in advance")
deposits: landlord not permitted to retain a security deposit beyond the damages actually suffered
termination of rent liability (surrender): if a tenant effectively conveys leasehold interest back to the landlord, tenant's duty to pay rent ends |
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Term
| Tenant's Duties - Landlord's Remedies |
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Definition
tenant on premises by fails to pay rent: evict or sue for rent
tenant abandons: do nothing or repossess (majority view is that the landlord must mitigate by seeking to relet the premises) |
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Term
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Definition
| generally, no duty to repair or maintain the premises |
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Term
| Landlord Duties - Duty to Deliver Possession of Premises |
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Definition
| L must put T in actual possession of the premises at the beginning of the leasehold term |
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Term
| Landlord Duties - Quiet Enjoyment |
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Definition
every lease has an implied covenant that neither the landlord nor a paramount title holder (e.g., a prior mortgagee who forecloses) will interfere with tenant's quiet enjoyment and possession of the premises. May be breached in following ways:
actual eviction: occurs when landlord excludes the tenant from the entire leased premises. Terminates tenant's obligation to pay rent.
partial eviction: occurs when tenant is physically excluded from only part of the leased premises. Partial eviction by landlord relives tenant of obligation to rent for the entire premises, even though the tenant continues in possession of the remainder. Partial eviction by a third party results in apportionment of rent
constructive eviction: if landlord does something to make the property uninhabitable, tenant may terminate leas and seek damages |
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Term
| Landlord Duties - Implied Warranty of Habitability |
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Definition
nonwaivable implied covenant, tied to standards of local housing codes
in event of breach, tenant may:
1) terminate lease
2) make repairs and offset cost against future rent
3) abate the rent to an amount equal to fair rental value in view of defects
4) remain in possession, pay full rent, and sue for damages |
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Term
| Landlord Duties - Retaliatory Eviction |
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Definition
| landlord may not terminate a lease or otherwise penalize a tenant in retaliation of tenant's exercising her legal rights, including reporting housing code violations |
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Term
| Landlord Duties - Discrimination |
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Definition
| tenants and potential tenants are protected by the Civil Rights Act of 1866, barring racial or ethnic discrimination, and the Fair Housing Act, which bars discrimination based on ethnicity, religion, national origin, gender, and disability |
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Term
| Assignments and Subleases |
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Definition
Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest
assignment: transfer of the entire remaining term
sublease: tenant retains any part of the remaining term |
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Term
| Assignments and Subleases - Consequences of Assignment |
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Definition
assignee stands in the shoes of the original tenant in a direct relationship with the landlord (they are in privity of estate), each is liable to the other on all covenants in the lease that run with the land
covenants that run with the land: if original parties to the lease so intend, and if the covenant "touches and concerns" the land
rent covenants: a covenant to pay rent runs with the land, so the assignee owes rent directly to the landlord |
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Term
| Assignments and Subleases - Consequences of Sublease |
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Definition
| sublessee is the tenant of the original lessee, and usually pays rent to the original lessee (who then pays the landlord); sublessee not personally libale to landlord for rent or performance of any covenant in main lease unless sublessee expressly assumes the covenants |
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Term
| Assignments and Subleases - Covenants Against Assignment or Sublease |
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Definition
lease covenants restricting assignment and sublease are strictly construed against the landlord
waiver: a valid covenant against assignment is considered waived if the landlord was aware of the assignment and did not object
transfer in violation of lease: if a tenant assigns or sublets in violation of a lease provision, transfer is not void; landlord may terminate lease or sue for damages |
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Term
| Assignments and Subleases - Assignments by Landlords |
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Definition
landlord may assign the rents and reversion interest he owns; tenant's consent not required
rights of assignee against tenants--attornment: once tenants are given reasonable notice of assignment, they must recognize and pay rent to new owner
liabilities of assignee to tenants: assignee is liable for performance of all covenants that touch and concern the land; original landlord also remains liable |
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Term
| Condemnation of Leaseholds |
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Definition
if entire leasehold is taken by eminent domain, tenant's liability for rent is extinguished
if taking is temporary or partial, tenant not discharged from rent obligation, but entitled to compensation for the taking |
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Term
| Tort Liability of Landlord and Tenant - Landlord's Liability |
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Definition
6 exceptions to "no duty to make premises safe" (also, modern trend is: general duty of reasonable care)
1) concealed dangerous condition: landlord must disclose (not repair)
2) common areas: duty of reasonable care in maintaining
3) public use: L liable to members of public if, at time of lease, he
--knows or should know of a dangerous condition
--has reason to believe the tenant may admit pubic before repair
--fails to repair the condition
4) furnished short-term residence (e.g., summer cottage): liable for injuries from any defect, known or unknown
5) negligent repairs by L: liable if injury results
6) L contracts to repair: liable for any injuries resulting from failure to repair or negligent repair |
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Term
| Tort Liability of Landlord and Tenant - Tenant's Liability |
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Definition
| duty of care owed by a tenant to third persons is governed by tort law |
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Term
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Definition
a fixture is a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty. passes with ownership of land.
includes both things incorporated into the realty which lose their identity (bricks, concrete) and things which remain identifiable but whose removal would cause considerable damages (plumbing) |
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Term
| Fixtures - Common Ownership Cases |
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Definition
one in which the person who brings the chattel to the land owns both the chattel and the land (installing a furnace in your own home)
chattel is a fixture if the objective intention of the party who made the annexation was to make the item part of the realty
intent determined by 1) nature of the article, 2) manner of attachment, 3) amount of damage removal would cause, and 4) adaptation of the item to the realty
constructive annexation: article of personal property so uniquely adapted to the real estate that it makes no sense to separate it (keys to doors, custom curtain rods). may be considered fixture even if not annexed to property |
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Term
| Fixtures - Divided Ownership Cases |
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Definition
when chattel is owned and brought to the realty by someone other than landowner (e.g., tenant)
landlord-tenant: agreement will control. absent agreement, tenant is deemed to lack the intent to permanently improve property, and thus may remove his annexed chattels (so long as removal will not damages property); must remove chattels by end of lease term
life tenant-remainderman: same rules as landlord-tenant; LT must remove chattels before end of tenancy
licensee/trespasser-landowner: licensees treated much like tenants; trespassers normally lose their chattels |
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Term
| Fixtures - Third-Party Cases |
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Definition
third-party lien on land to which chattel affixed: mortgagee hs no greater rights than mortgagor; thus, chattels generally do not fall within lien of the mortgage
third-party lien on chattel affixed to land: general rule is that whoever records interest in chattel wins |
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Term
| Nonpossessory Interests - Types |
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Definition
| Easements, profits, covenants, servitudes--all create a right to use land possessed by someone else |
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Term
| Nonpossessory Interests - Easements |
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Definition
an easement holder has the right to use another's land for a special purpose (access a road, put pipe in ground)
presumed to be of perpetual duration unless specifically limited in the grant |
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Term
| Nonpossessory Interests - Easements - Types of Easements |
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Definition
most are affirmative; negative easements (right to compel possessor of land to refrain from engaging in an activity) are limited to negative easements 1) for light; 2) for air; 3) for lateral and adjacent support 4) for flow of an artificial stream
easement appurtenant: benefits the holder in his physical use or enjoyment of another tract of land. There must therefore be two tracts: dominant tenement (estate benefitted by the easement) and servient tenement (estate subject to the easement right). An easement appurtenant passes with the transfer of the dominant land regardless of whether it is mentioned in the conveyance. Burden passes with transfer of the servient tenement unless new owner is a bona fide purchaser with no actual or constructive notice of the easement.
easement in gross: holder of an easement in gross acquires the right to use the servient tenement independent of his possession of another tract of land, i.e., it benefits the holder, not the other tract. Easement in gross for the holder's personal pleasure (e.g., right to swim in the pond on Blackacre) is not transferable, but one for economic/business purposes (right to put up billboards on Blackacre) is transferable. |
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Term
| Nonpossessory Interests - Easements - Creation |
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Definition
express grant: in writing, signed by the holder of the servient tenement (unless duration is brief enough that it does not fall under the Statute of Frauds)
express reservation: arises when a grantor conveys title to land, but reserves the right to use the tract for a special purpose (must be grantor reserving for himself, not for a third party)
prescription (akin to adverse possession): use must be 1) open and notorious; 2) adverse; 3) continuous and uninterrupted; 4) for the statutory period
implication: created by operation of law; exception to the Statute of Frauds; 3 types
--easement implied from existing use ("quasi-easement"): if 1) prior to the division of a single tract, 2) an apparent and continuous use exists on the "servient" part 3) that is reasonably necessary for the enjoyment of the dominant part, and 4) court determines that the parties intended the use to continue after division of land
--easement implied without any existing use (in two limited instances):
----subdivision plat: you can use subdivision's streets to get to your house
----profit a prendre: implied easement to pass over surface of land and use it as reasonably necessary to extract product
--easement by necessity: arises when a landowner sells a portion of his tract and by this division deprives one lot of access to a public road or utility line |
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Term
| Nonpossessory Interests - Easements - Scope of Easements |
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Definition
absent specific limitations, courts will assume the easement was intended to meet both present and future needs of dominant tenement
servient owner generally may use land in any way that does not interfere with performance of the easement
easement holder has duty to repair easment if he is sole user; if both use, court will apportion costs |
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Term
| Nonpossessory Interests - Easements - Termination |
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Definition
easement may be terminated in following ways:
-stated conditions: expressed in the original grant
-unity of ownership: if same person acquires ownership of both dominant and servient estate, estates merge and the easement is destroyed
-release: easement may be terminated by a deed of release from owner of the dominant estate to owner of the servient estate
-abandonment: when holder demonstrates by physical action an intent to permanently abandon the easement (e.g., building a structure blocking easement)
-estoppel: if owner of servient estate changes his position in reasonable reliance on the representations or conduct of the owner of the dominant estate
-prescription: must be an adverse, continuous interruption of the use for the prescriptive period (usually 20 years)
-necessity: easements by necessity expire when the necessity does
-condemnation and destruction: condemnation of servient estate extinguishes all easements |
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Term
| Nonpossessory Interests - Easements - Compare with Licenses |
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Definition
licenses are not an interest in land; merely a privilege, revocable at the will of the licensor
irrevocable licenses: occur in two situations
1) estoppel: if a licensee invests substantial amounts of money or labor in reliance on the license, licensor is estopped to revoke
2) license couple with an interest: irrevocable as long as the interest lasts (e.g., vendee of a chattel may enter seller's land to remove the chattel) |
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Term
| Nonpossessory Interests - Profits |
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Definition
entitle the holder of the benefit to take some resource (timber, fish) from the servient estate
all rules governing creation, termination, alienation are same as for easements
may also be terminated through surcharge (misuse that overly burdens the servient estate) |
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Term
| Nonpossessory Interests - Real Covenants |
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Definition
normally found in deeds
a written promise to do something on the land or a promise not to do something on the land |
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Term
| Nonpossessory Interests - Real Covenants - Requirements for Burden to Run |
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Definition
if the following requirements are met, any successor in interest to the burdened estate will be bound by the covenant as if she herself had agreed to it:
-intent: parties must have intended that successors in interest to the covenantor be bound
-notice: subsequent purchaser for value must have had actual, inquiry, or or record notice of the arrangement at time of purchase
-horizontal privity: the parties entering the covenant must have shared some interest in the land independent of covenant (e.g., landlord-tenant)
-vertical privity: successor in interest must hold the entire durational interest held by the covenantor at the time he made the covenant
-touch and concern: covenant must touch and concern the land (benefit the dominant, burden the servient) |
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Term
| Nonpossessory Interests - Real Covenants - Requirements for Benefit to Run |
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Definition
3 requirements:
-intent: parties must have intended that successors in interest to the covenantee be able to enforce the covenant
-vertical privity: benefits of a covenant run to the assignees of the original estate or any lesser estate (any succeeding possessory estate may enforce the benefits)
-touch and concern
no horizontal privity necessary |
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Term
| Nonpossessory Interests - Real Covenants - Remedy |
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Definition
breach of a real covenant is remedied by an award of money damages
if an injunction is sought, must be enforced as an equitable servitude rather than a real covenant |
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Term
| Nonpossessory Interests - Real Covenants - Termination |
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Definition
as with all nonpossessory interests, may be terminated by
1) written release
2) merger of estates
3) condemnation of burdened property |
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Term
| Nonpossessory Interests - Equitable Servitudes |
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Definition
a convenant that, regardless of whether it runs with the land, will be enforced against the assignees of the burdened land who have notice of the covenant
usual remedy is an injunction |
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Term
| Nonpossessory Interests - Equitable Servitudes - Creation |
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Definition
generally, as with real covenants, equitable servitudes are created by covenants contained in a writing satisfying the Statute of Frauds
exception: negative equitable servitudes may be implied from a common scheme for development of a residential subdivision
-common scheme--may be evidenced by:
1) recorded plat
2) general pattern of restrictions
3) oral representations to early buyers
notice: to be bound by a negative equitable servitude not in the deed, a grantee must have had notice of the of the covenant (either actual, inquiry, or record) |
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Term
| Nonpossessory Interests - Equitable Servitudes - Requirements for Burden to Run |
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Definition
a successor of the promisor is bound if:
1) parties intended that the servitude be enforceable by and against assignees
2) successor of the promisor has actual, inquiry, or record notice
3) covenant touches and concerns the land |
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Term
| Nonpossessory Interests - Equitable Servitudes - Requirements for Benefit to Run |
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Definition
a successor of the promisee may enforce the equitable servitude if:
1) parties intended that the servitude be enforceable by and against assignees
2) covenant touches and concerns the benefitted property |
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Term
| Nonpossessory Interests - Equitable Servitudes - Equitable Defenses to Enforcement |
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Definition
court will not enforce an equitable servitude if:
1) unclean hands: person seeking enforcement is violating a similar restriction on his own land
2) acquiescence: benefitted party acquiesced in a violation of the servitude by a burdened party
3) estoppel: benefitted party acted in such a way that a reasonable person would believe the servitude was abandoned
4) laches: benefitted party failed to bring suit within a reasonable time
5) the neighborhood has changed so significantly that enforcement would be inequitable |
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Term
| Nonpossessory Interests - Equitable Servitudes - Termination |
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Definition
as with all nonpossessory interests, may be terminated by
1) written release
2) merger of estates
3) condemnation of burdened property |
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Term
| Nonpossessory Interests - Party Walls and Common Driveways |
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Definition
| functionally, these situations create mutual cross-easements of support |
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Term
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Definition
title by adverse possession results from the operation of the statute of limitations for trespass. If an owner does not, within the statutory period, tak action to eject a possessor who claims adversely to the owner, the title vests in the possessor.
running of statute: statute of limitations begins to run when true owner can first bring suit. Filing suit does not stop period from running, however--must be pursued to judgment. |
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Term
| Adverse Possession - Requirements |
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Definition
to establish title by adverse possession, possessor must show:
1) actual entry giving exclusive possession that is
2) open and notorious,
3) adverse (hostile), and
4) continuous throughout the statutory period
actual and exclusive possession: must actually occupy the land, and must not share land with true owner or the public
open and notorious: satisfied when use is of the kind an owner would make of the land; must be sufficiently apparent to put the true owner on notice that a trespass is occurring
hostile: satisfied if the possessor enters without the owner's permission
continuous: intermittent periods of occupancy are not sufficient, but constant use is unnecessary if use is of the kind usual owner would make (ex: summer cottage). Need not be continuous by same person--can tack onto previous possessors if privity exists between them |
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Term
| Adverse Possession - Disability |
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Definition
| statute of limitations does not begin to run if true owner was under some disability to sue (minority, imprisonment, insanity) when cause of action first accrued |
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Term
| Adverse Possession - Future Interests |
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Definition
| statute of limitations does not run against a holder of a future interest until the interest becomes possessory |
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Term
| Adverse Possession - Effect of Covenants in True Owner's Deed |
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Definition
if adverse possessor uses the land in violation of a restrictive covenant, she takes free of the restriction
if adverse possessor uses the land in a way compliant with a restrictive covenant, she takes title subject to the restriction |
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Term
| Adverse Possession - Land that Cannot be Adversely Possessed |
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Definition
| title to government-owned land and land registered under a Torrens system cannot be acquired by adverse possession |
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Term
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Definition
Ks of sale precede most transfers of land
Statute of Frauds applicable |
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Term
| Land Sale Contracts - Doctrine of Equitable Conversion |
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Definition
once a K is signed, equity regards the buyer as the owner of the real property. Seller's interest (right to proceeds of sale) is considered personal property.
Risk of Loss: majority rule places risk on buyer
Passage of Title on Death: under doctrine of equitable conversion, if a party to a land sale K dies before the K is completed, seller's interest passes as personal property and buyer's interest passes as real property |
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Term
| Land Sale Contracts - Marketable Title |
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Definition
every K contains an implied warranty of marketable title
need not be perfect, but must be free of questions that present an unreasonable risk of litigation |
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Term
| Land Sale Contracts - Marketable Title - Defects in Record Chain of Title |
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Definition
title may be unmarketable because of a defect in chain of title
-adverse possession
-future interests held by unborn or unascertained persons |
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Term
| Land Sale Contracts - Marketable Title - Encumbrances |
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Definition
| generally, mortgages, liens, restrictive covenants, easements, and significant encroachments render title unmarketable |
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Term
| Land Sale Contracts - Marketable Title - Zoning Restrictions |
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Definition
| zoning restrictions do not affect marketability, but an existing violation of a zoning ordinance does render title unmarketable |
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Term
| Land Sale Contracts - Marketable Title - Time of Marketability |
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Definition
| if seller has agreed to furnish title at closing, buyer cannot rescind prior to that date on grounds that seller's title is unmarketable |
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Term
| Land Sale Contracts - Marketable Title - Remedy if Title Not Marketable |
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Definition
buyer must notify seller that his title is unmarketable and give reasonable time to cure the defects
upon failure to cure, remedies include rescission, damages, specific performance with abatement, and a quiet title suit
if closing occurs, the K and deed merge, and seller's liability on the implied K warranty ends |
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Term
| Land Sale Contracts - Time of Performance |
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Definition
courts presume time is not "of the essence"
thus, a party late in tendering her own performance can still enforce the K if she tenders within a reasonable time (e.g., 2 months) after the closing date
time is of the essence when:
1) K so states
2) circumstances indicate this was the parties' intent
3) one party gives the other notice that time is of the essence
if time is of the essence, a party who fails to tender performance on the closing date is in breach and may not enforce the K. |
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Term
| Land Sale Contracts - Tender of Performance |
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Definition
buyers obligation to pay and seller's obligation to convey are concurrent conditions
party's performance is excused if other party has repudiated the K or it is impossible |
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Term
| Land Sale Contracts - Remedies for Breach of Sale Contract |
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Definition
nonbreaching party is entitled to damages (difference between K price and market value on day of breach) or specific performance
liquidated damages: if buyer defaults in performance after depositing "earnest money," seller may retain this money as liquidated damages (as long as it is a reasonable amount) |
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Term
| Land Sale Contracts - Seller's Liabilities for Defective Property - Warranty of Fitness or Quality--New Construction Only |
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Definition
| Ks of sale and deeds of real property carry no implied warranty of quality or fitness for purpose, but majority of courts do recognize these--only in a sale of a NEW house by builder |
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Term
| Land Sale Contracts - Seller's Liabilities for Defective Property - Negligence of Builder |
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Definition
| person may sue builder for negligence in performing a building K |
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Term
| Land Sale Contracts - Seller's Liabilities for Defective Property - Sale of Existing Land and Buildings--Liability for Defects |
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Definition
seller of existing buildings may be liable to purchaser for defects such as a leaky roof, flooding basement, or termite infestation
may be liable under:
-misrepresentation
-active concealment
-failure to disclose |
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Term
| Land Sale Contracts - Seller's Liabilities for Defective Property - Disclaimers of Liability |
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Definition
a general disclaimer ("property sold as is") is NOT sufficient to overcome seller's liability for fraud, concealment, or failure to disclose
specific disclaimers ("seller not liable for any defects in the roof") likely upheld |
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Term
| Land Sale Contracts - Real Estate Brokers |
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Definition
| brokers are agents of the seller, but should disclose material information about the property if they have actual knowledge |
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Term
| Land Sale Contracts - Title Insurance |
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Definition
| title insurance policy insures that a good record title of the property exists as of the policy's date and promises to defend the record title if litigated |
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Term
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Definition
| Deeds transfer title to a interest in real property. |
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Term
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Definition
a deed must be in writing, be signed by the grantor, and reasonably identify the parties and land. most other formalities generally unnecessary.
deed may validly convey real property by inter vivos gift so long as following requirements are met:
1) donative intent
2) delivery
3) acceptance |
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Term
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Definition
voidable deed (created by a minor, fraud in the inducement) will be set aside only if property has not passed to a bone fide purchaser
void deed (forged, never delivered, obtained by fraud in the factum) will be set aside even if purchased by a bona fide purchaser |
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Term
| Deeds - Fraudulent Conveyances |
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Definition
even when a deed complies with the required formalities, may be set aside if it was made:
-with actual intent to hinder, delay, or defraud any creditor or the grantor, or
-without receiving a reasonably equivalent value in exchange for the transfer, and the debtor was insolvent or became insolvent as a result of the transfer |
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Term
| Deeds - Description of Land Conveyed |
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Definition
sufficient if it provides a good lead to the identity of the property
parol evidence generally admissible to resolve patent or latent ambiguities, but may not be inadmissible where the description is inadequate |
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Term
| Deeds - Description of Land Conveyed - Rules of Construction |
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Definition
where descriptions are inconsistent or conflicting, these methods of description are given the following order of priority:
1) natural monuments (e.g., oak tree)
2) artificial monuments (e.g., buildings, stakes)
3) courses (e.g., angles)
4) distances (e.g., feet, yards)
5) name (e.g., Blackacre)
6) quantity (e.g., 300 acres) |
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Term
| Deeds - Description of Land Conveyed - Boundary Cases |
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Definition
presumptively, title to land passes to the center of a right-of-way or water boundary. can be rebutted by language in the deed.
in variable boundary cases (i.e., water boundary):
-accretion: slow deposit of soil on land belongs to the abutting owner
avulsion: sudden change of water course does not change ownership rights |
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Term
| Deeds - Description of Land Conveyed - Reformation of Deeds |
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Definition
a deed will be reformed if it does not represent the parties' agreement because of:
1) mutual mistake
2) scrivener's error
3) a unilateral mistake caused by misrepresentation or other inequitable conduct |
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Term
| Deeds - Delivery and Acceptance |
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Definition
| a deed is not effective unless it has been delivered and accepted |
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Term
| Deeds - Delivery and Acceptance - Delivery in General |
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Definition
delivery refers to grantor's intention to make deed presently effective even if possession is postponed.
may be satisfied by manual delivery, notarized acknowledgment by the grantor, recording, or anything else showing grantor's intent to deliver
parol evidence admissible to show intent to deliver |
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Term
| Deeds - Delivery and Acceptance - Retention of Interest by Grantor or Conditional Delivery |
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Definition
retention of control or interest by the grantor (e.g., right to revoke) indicates a lack of intent to pass title
express condition of grantor's death in a properly executed and delivered deed is valid and creates a future interest in the grantee
if a deed is absolute on its face but delivered with an oral condition, condition is ignored and the delivery is absolute |
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Term
| Deeds - Delivery and Acceptance - Where Grantor Gives Deed to Third Party |
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Definition
here, conditional delivery is permissible
transfer to 3rd party with no conditions: if grantor gives deed to a 3rd party with instructions to give it to the grantee, there is valid delivery. if no instructions, validity of delivery depends on whether the 3rd party could be considered the grantor's agent. if so, there is no delivery.
transfer to 3rd party with conditions (commercial transaction): valid conditional delivery occurs when a grantor gives a deed to a 3rd party with instructions to give it to the grantee when certain conditions occur (e.g., grantee pays purchase price before a certain date)
--grantor can only revoke if 1) condition has not yet occurred, 2) there is no enforceable written K to convey
--breach of escrow conditions: if grantee wrongfully acquires deed prior to performance of the condition, title does not pass
--title usually passes when condition occurs, but if justice requires it and there is an enforceable K to convey, title may "relate back" to the time when grantor gave the deed to the 3rd party. BFPs are protected.
transfer to 3rd party with conditions (donative transaction): main issue is whether grantor can revoke the deed before the condition occurs. where the condition is not the grantor's death, delivery is irrevocable. where it is, most courts follow same reasoning. |
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Term
| Deeds - Delivery and Acceptance - Acceptance |
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Definition
most states presume acceptance
relates back to the date deed was delivered into escrow |
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Term
| Deeds - Delivery and Acceptance - Dedication |
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Definition
land may be transferred to a public body by dedication.
to be effective, dedication must be accepted by formal resolution, approval of map or plat, or actual assumption of maintenance or improvements |
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Term
| Convenants for Title and Estoppel by Deed |
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Definition
three types of deeds used to convey property interests other than leaseholds:
-general warranty deed
-special warranty deed
-quitclaim deed
difference is the scope of title assurance |
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Term
| Convenants for Title and Estoppel by Deed - Covenants in General Warranty Deed - Usual Covenants |
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Definition
the usual covenants for title contained in a general warranty deed are:
-covenant of seisin: grantor covenants she has the estate she purports to convey--must have both title and possession
-covenant of right to convey: grantor covenants she has the authority to make the grant (title alone sufficient)
-covenant against encumbrances: grantor covenants against existence of physical or title encumbrances
-covenant for quiet enjoyment: grantor covenants that grantee will not be disturbed in possession by a 3rd party's lawful claim of title
-covenant of warranty: grantor agrees to defend against reasonable claims of title by a third party and to compensate grantee for any loss sustained by claim of superior title
-covenant for further assurances: grantor promises to perform acts reasonably necessary to perfect title conveyed |
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Term
| Convenants for Title and Estoppel by Deed - Covenants in General Warranty Deed - Breach of Covenants |
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Definition
seisin, right to convey, and against encumbrances: breached, if at all, at the time of conveyance
quiet enjoyment, warranty, and further assurances: breached only upon disturbance of grantee's possession |
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Term
| Convenants for Title and Estoppel by Deed - Covenants in General Warranty Deed - Damages and Remote Grantees |
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Definition
| if there are successive conveyances by general warranty and the last grantee is evicted by lawful claim of title, he may sue ANYONE up the line |
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Term
| Convenants for Title and Estoppel by Deed - Statutory Special Warranty Deed |
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Definition
in many states, use of the word "grant" in a deed creates by implication two limited assurances:
1) that the grantor has not conveyed the same estate or any interest therein to anyone other than the grantee
2) that the estate is free from encumbrances made by the grantor |
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Term
| Convenants for Title and Estoppel by Deed - Quitclaim Deeds |
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Definition
| releases whatever interest the grantor has |
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Term
| Convenants for Title and Estoppel by Deed - Estoppel by Deed |
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Definition
if grantor purports to convey an estate in property that she does not then own, her subsequent acquisition of the estate will automatically inure to the benefit of the grantee
exception: grantee only has rights against the grantor. if grantor transfers her after-acquired title to a BFP, BFP will prevail |
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Term
| Recording - Recording Acts in General |
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Definition
recording acts generally protect all BFPs from secret interests previously created and provide a mechanism for "earlier" grantees to give notice through recordation
recording is not essential to validity of a deed, but can be essential to protect the grantee against a BFP
proper recordation gives constructive notice of the conveyance, so there can be no more BFPs |
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Term
| Recording - Types of Recording Acts |
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Definition
notice statutes
race-notice statutes
race statutes |
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Term
| Recording - Types of Recording Acts - Notice Statutes |
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Definition
under a notice statute, a subsequent BFP prevails over a prior grantee who failed to record
key: subsequent purchaser had no actual or constructive notice at the time of the conveyance.
EXAMPLE: O conveys to A on January 1. A does not record. O conveys to B on January 15 for valuable consideration. B prevails over A. It is irrelevant whether A recorded after January 15 and before B recorded, because B had no notice at the time he took. |
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Term
| Recording - Types of Recording Acts - Race-Notice Statutes |
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Definition
under a race-notice statute, a subsequent BFP is protected only if she takes without notice AND records before the prior grantee.
EXAMPLE: O conveys to A on January 1. A does not record. O conveys to B on January 15 for valuable consideration. B has no notice of the conveyance to A. A records on January 18. B records on January 20. A prevails over B because A recorded first. |
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Term
| Recording - Types of Recording Acts - Race Statutes |
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Definition
under a pure race statute, whoever records first wins. notice is irrelevant.
very few states have pure race statutes |
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Term
| Recording - Who a Recording Act Protects |
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Definition
only bona fide purchasers are protected from the claims of a prior transferee under "notice" and "race-notice" statutes
to be a BFP, a person must be a purchaser, without notice (actual, constructive, or inquiry), and pay valuable consideration |
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Term
| Recording - Who a Recording Act Protects - Purchasers |
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Definition
donees, heirs, and devisees are not protected because they do not give value
purchaser from donee, heir, or devisee of the record owner is protected against prior unrecorded conveyances of the record owner
Shelter Rule: a person who takes FROM a BFP will prevail against any interest the transferor-BFP would have prevailed against
purchaser under installment land K: protected only to the extent of payment made |
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Term
| Recording - Who a Recording Act Protects - "Without Notice" |
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Definition
actual notice: includes knowledge obtained from any source (newspaper, word of mouth)
record notice (chain of title): a subsequent purchaser will be held to have record notice only if the deed in question is recorded "in the chain of title"--meaning it is recorded in such a way that a searcher could reasonably find it
--"wild deeds": recorded deed not connected to chain of title; does not impart constructive notie because a subsequent purchaser could not feasibly find it
EXAMPLE: O conveys to A. A does not record. A conveys to B. B records. O conveys to C. C does not have notice of B's claim.
deeds recorded late: a deed recorded after grantor is shown by record to have parted with title through another (subsequent) instrument is not constructive notice
deeds recorded before grantor obtained title: courts are split as to who prevails
deed in chain referring to instrument outside chain: may impart constructive notice of the instrument referred to--even if that instrument is unrecorded or not in the chain of title
restrictive covenants: courts are split |
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Term
| Recording - Who a Recording Act Protects - Valuable Consideration |
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Definition
consideration need not be adequate, but it must be of SOME pecuniary value (i.e., love and affection not valuable consideration)
purchaser is protected by a recording statute only from the time consideration is paid |
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Term
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Definition
tract index jurisdiction: searcher looks at the page indexed by block and/or lot describing the property and any instruments affecting it
grantor and grantee index jurisdiction: searcher establishes chain of title by searching back in time in the grantor-grantee index, then searching forward in time to see if any grantor conveyed an interest to someone outside of the backward chain |
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Term
| Recording - Effect of Recordation |
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Definition
gives prospective subsequent grantees constructive notice of the existence and content of recorded instruments
raises a presumption of valid delivery and authenticity
recorder's mistakes: if instrument is improperly indexed, it is still considered recorded, but a subsequent purchaser has a cause of action against the recorder's office
effect of recording unacknowledged instrument: does NOT give constructive notice |
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Term
| Conveyance by Will - Ademption |
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Definition
| if property is specifically devised or bequeathed in the testator's will, but the testator no longer owns it at the time of death, the gift fails |
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Term
| Conveyance by Will - Ademption - Land Under Executory Contract |
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Definition
| most states do not apply the ademption doctrine to the proceeds of a K for sale of land that was executory at the time of testator's death--i.e., the devisee gets the proceeds in place of the land |
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Term
| Conveyance by Will - Ademption - Other Proceeds Not Subject to Ademption |
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Definition
when property is damaged or destroyed, but the insurance proceeds have not yet been paid, ademption does not usually apply
ademption also does not usually apply to property condemned by the government where the taking was before death but the condemnation award was paid after death |
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Term
| Conveyance by Will - Ademption - Lapse and Anti-Lapse Statutes |
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Definition
| lapse occurs when the beneficiary of a gift in a will dies before the testator. under common law, that gift was void. nearly all states, however, now have statutes that prevent lapse by permitting the gift to pass to the predeceasing beneficiary's living descendants under certain circumstances. |
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Term
| Conveyance by Will - Ademption - Abatement |
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Definition
if the estate assets are not sufficient to pay all claims against the estate and satisfy all devises and bequests, the gifts are abated (reduced). Estates in most states abate in the following order:
1) property passing by intestacy
2) residuary estate
3) general legacies
4) specific devises and bequests |
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Term
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Definition
generally, conveyance of land includes all crops growing on it
Exceptions:
1) crops already harvested
2) crops planted by a tenant during the period of tenancy |
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Term
| Security Interests in Real Estate - Types |
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Definition
-Mortgage: debtor/notemaker is the mortgagor, lender the mortgagee. On default, the lender can realize on the mortgaged real estate only by having a judicial foreclosure sale conducted by the sheriff.
-Deed of Trust: debtor/notemaker is the trustor; he gives a deed of trust to a third-party trustee who is usually closely connected to the lender (beneficiary). On default, the lender instructs the trustee to foreclose the deed of trust by sale.
-Installment Land Contract: an installment purchaser obtains legal title only when the full K price has been paid off. Forfeiture clauses, allowing the vendor upon default to cancel the K, retake possession, and retain all money paid, are common.
-Absolute Deed: if given for security purposes, can be treated by the court as an "equitable" mortgage, and they are treated like a mortgage (i.e., creditor must foreclose by judicial action).
-Sale-Leaseback: landowner may sell her property for cash and then lease it back from purchaser for a long period of time. Like absolute deed, this ma be treated as a disguised mortgage. |
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Term
| Transfers by Mortgagee - Transfer of Mortgage Without Note |
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Definition
| some states hold that transfer of the mortgage automatically transfers the note as well |
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Term
| Transfers by Mortgagee - Transfer of Note Without Mortgage |
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Definition
the note can be transferred without the mortgage, but the mortgage will automatically follow the properly transferred note unless the mortgagee-transferor expressly reserves the right to the mortgage
note may be transferred either by indorsing it and delivering it to transferee, or by a separate document. Only if the indorsement and delivery method is used can te trasferee become a holder in due course
to be an HDC, following requirements must be met:
1) note must be negotiable in form
2) original note must be indorsed and signed by the named payee
3) original note must be delivered to the transferee
4) transferee must take the note in good faith (no notice it is overdue, has been dishonored, is subject to any defense by the maker) and must pay value for it
benefits of being an HDC: an HDC takes the note free of any personal defenses of the maker (e.g., failure of consideration, waiver, estoppel) but is still subject to real defenses (e.g., infancy, forgery) |
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Term
| Transfers by Mortgagor - Grantee Takes Subject to Mortgage |
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Definition
a grantee of mortgaged property takes subject to the mortgage
assumption: if grantee signs an assumption agreement, he becomes primarily liable to the lender, while the original mortgagor becomes secondarily liable as a surety. If no assumption agreement, no personal liability; however, if grantee does not pay, loan may be foreclosed, wiping out grantee's investment.
due-on-sale clauses: these appear in most modern mortgages, allowing the lender to demand full payment of the loan if the mortgagor transfers any interest in the property without the lender's consent |
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Term
| Defenses and Discharge of the Mortgage |
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Definition
because a mortgage is granted to secure an obligation, defenses in an action on the underlying obligation (e.g., failure of consideration, duress, mistake, fraud) are defenses against an action on the mortgage
mortgagee's right to foreclose is precluded by discharge of the mortgage |
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Term
| Possession before Foreclosure |
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Definition
| when a mortgagor defaults on his debt, mortgagee can foreclose on the mortgage; a mortgagee may wish to take possession of the property or begin receiving the rents from a property BEFORE foreclosure |
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Term
| Possession before Foreclosure - Theories of Title |
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Definition
lien theory: under this theory, mortgagee is considered the holder of a security interest only and mortgagor is deemed the owner of the land until foreclosure; the mortgagee may NOT have possession before foreclosure
title theory: under this theory, legal title is in the mortgagee until the mortgage has been satisfied or foreclosed; the mortgagee is entitled to possession upon demand at any time
intermediate theory: under this theory, legal title is in the mortgagor until default, and upon default, legal title is in the mortgagee; mortgagee may demand possession when a default occurs |
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Term
| Possession before Foreclosure - Mortgagor Consent and Abandonment |
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Definition
| mortgagee may take possession if the mortgagor gives consent to do so, or if the mortgagor abandons the property |
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Term
| Possession before Foreclosure - Risks of Mortgagee in Possession |
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Definition
most mortgagees do not wish to take possession because of the risks of liability
these risks involve the duty to account for rents, duty to manage the property in a prudent manner, and potential tort liability for those injured on the property |
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Term
| Possession before Foreclosure - Receiverships |
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Definition
most mortgagees attempt to intercept the rents before foreclosure by getting a receiver appointed by the court to manage the property
courts will generally appoint receivers for rental property upon showing that
1) waste is occurring
2) value of the property is inadequate to secure the debt, and
3) mortgagor is insolvent |
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Term
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Definition
almost all states require foreclosure by sale, under which the property is sold to satisfy the debt in whole or in part
usually conducted by auction, and the lender is allowed to bid |
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Term
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Definition
redemption in equity: at any time prior to the foreclosure sale, mortgagor may redeem the property by paying the amount due
statutory redemption: about half the states allow mortgagor to redeem the property for some fixed period (e.g., six months) after the foreclosure sale has occurred |
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Term
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Definition
mortgage's priority is usually determined by the time it was placed on the property
modification of priority: priority may be changed by: 1) operation of the recording statute if a prior mortgagee fails to record; 2) a subordination agreement between a senior and a junior mortgagee; 3) a purchase money mortgage; 4) modification of a senior mortgage (junior mortgage has priority over modification); 5) granting of optional future advances
purchase money mortgage: mortgage given in exchange or funds used to purchase the property; PMMs have priority over prior non-PMMs, but subsequent mortgages or liens may defeat PMSS priority by operation of the recording acts |
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Term
| Foreclosure - Proceeds of Sale |
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Definition
| proceeds applied first to expenses of the sale, attorney's fees, and court costs; then to the principal and accrued interest on the foreclosed loan; net to any other junior interests in the order of their priority; and finally to the mortgagor. |
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Term
| Foreclosure - Deficiency Judgments |
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Definition
| if proceeds are insufficient to satisfy the mortgage debt, mortgagee retains a personal cause of action against the mortgagor for the deficiency |
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Term
| Water Rights - Watercourses (Streams, Rivers, Lakes) - Riparian Doctrine |
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Definition
under this doctrine, water belongs to those who own the land bordering the watercourse
natural flow theory: riparian owner's use resulting in substantial diminution of the water's quantity, quality, or velocity is enjoinable
reasonable use theory: all riparians share the right of reasonable use of the water. 6 factors for determining reasonableness:
-alteration of flow
-purpose of use
-pollution
-extent of use
-destination of water taken
-miscellaneous conduct that may give rise to litigation
natural vs. artificial use: under either of the above theories, natural uses (human uses--consumption, gardening) prevail over artificial uses (irrigation, manufacturing) |
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Term
| Water Rights - Watercourses (Streams, Rivers, Lakes) - Prior Appropriation Doctrine |
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Definition
| under this doctrine, individuals acquire rights by actual use. Appropriative rights are determined by priority of beneficial use. If there is a decrease in flow, priority is accorded in terms of time of appropriation |
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Term
| Water Rights - Groundwater (Percolating Water) |
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Definition
absolute ownership doctrine: owner of overlying land can take all the water she wants for any purpose
reasonable use doctrine: like absolute ownership, except exporting the water is allowed only if it does not harm other owners who have rights in the same aquifer
correlative rights doctrine: owners of overlying land own the underground water basin as joint tenants, and each is allowed a reasonable amount for his own use
appropriative rights doctrine: priority of use (not ownership of land) is determinative |
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Term
| Water Rights - Surface Waters |
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Definition
landowner can use rainfall, seepage, etc., within her boundaries in whatever way she sees fit. Liability for changing natural flow by dikes, drains, etc. depends on below theories.
natural flow theory: owners cannot alter natural drainage patterns (some states allow "reasonable changes")
common enemy theory: an owner can take any protective measures to get rid of the water (e.g., dikes)
reasonable use theory: involves balancing the utility of use against the gravity of the harm |
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Term
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Definition
| right to airspace above a parcel is not exclusive, but the owner is entitled to freedom from excessive noise |
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Term
| Right to Exclude--Remedies of Possessor |
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Definition
remedies include:
-trespass (tangible physical object)
-private nuisance (intangibles, such as odor or noise)
-continuing trespass (land repeatedly invaded by trespasser)
-ejectment or unlawful detainer (removes a trespasser or tenant; can be joined with a demand for money damages) |
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Term
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Definition
| title to land and buildings is held by a corporation which leases apartments to individuals |
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Term
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Definition
| each owner owns interior of his individual unit plus an undivided interest in the exterior and common areas |
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Term
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Definition
state may enact statutes to reasonably control use of land for the protection of the health, safety, morals, and welfare of the citizenry. based on state's police power; limited by 14th Amendment's Due Process and Equal Protection Clauses, and the "no taking without just compensation" clause of the 5th Amendment
nonconforming use: a use that exists at the time of passage of a zoning ordinance that does not conform to the statute cannot be eliminated at once
special use permit: must be obtained even tho the zoning is proper for the intended use. (often required for hospitals, funeral homes, etc.)
variance: a departure from the literal restrictions of a zoning ordinance granted by administrative action |
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Term
| Zoning - Unconstitutional Takings and Exactions |
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Definition
denial of ALL economic value: constitutes a taking
denial of NEARLY ALL economic value: balancing test, weighing social goals of the regulation vs. the diminution in value of the property vs. the owner's reasonable expectations for use of the property
unconstitutional exactions demand that a landowner give up some land for public purpose (like street widening). these are unconstitutional unless the government proves:
1) government damens are rationally connected to an additional burden the project will place on public facilities (essential nexus)
2) the dedication is reasonably related in nature and extent to the impact of the proposed development (rough proportionality)
remedy: if a regulation constitutes a taking, government will be required either to compensate the owner for the property or terminate the regulation and pay owner temporary damages for the temporary taking |
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