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VA Bar Exam: Real Property

Terms in this set (93)

Can the holder of a future interest enter and inspect the property for waste?
Yes, he has a licence coupled with an interest that makes it irrevocable
For private nuisance, what is a substantial and unreasonable interference?
1) Substantial: Offensive, inconvenient, or annoying to an average person in the community
2) Unreasonable: Injury caused outweighs the utility
When is part performance an exception to the Statute of Frauds?
If all or part of the purchase price is paid, and there is either:
(1) possession by the purchaser, or
(2) substantial improvement of the property
What is an easement?
The right held by one person to make specific, limited use of land owned by another
Five types of present interests in land
1) Fee simple
2) Fee simple determinable: Reversion is automatic when condition is violated
3) Fee simple subject to a condition subsequent: Reversion is not automatic, but requires reenrry by grantor
4) Fee simple subject to an executory interest: Upon violation of condition, property goes to third party
5) Life estate
Five types of future interests
1) Possibility of reverter: Automatic reversion
2) Right of reentry: Not automatic reversion
3) Executory interest: Third party interest
4) Reversion: Grantor's future interest after life estate
5) Remainder: Third party's future interest after life estate
Properties of all present and future interests in land
1) Transferable
2) Devisable
3) Descendable
What is a life estate?
An interest in using and possessing land, but only as long as she lives
Must a life tenant pay principal on mortgage?
No, but obligated to pay interest
Must a life tenant pay property taxes?
Yes, but only to the extent property can produce income
Three types of concurrent estates
1) Tenancy in common
2) Joint tenancy
3) Tenancy by the entirety (limited to marriage)
Tenancy in common
Each co-tenant holds an undivided interest with unrestricted rights to possess the whole property
Joint tenancy
Each co-tenant holds an equal interest in the property, with a right to suvivorship. Look for the four unities:
1) Interest: equal shares
2) Possession: equal right to posses
3) Time: Received interest at same time
4) Title: Received interest in the same title document
Right to survivorship
The surviving tenant takes free of any liens
How do you sever a joint tenancy?
1) Any inter vivos transfer
2) Leases (sometimes)
3) Mortgages (in title states)
Tenancy by the entireties
1) Only created in marriage
2) One spouse may not encumber or alienate his interest without the other spouse's consent
3) May not partition without each other's consent
Duties of co-tenants
1) No duty to pay rent
2) Third-party rents are divided up proportionally
3) Operating expenses are divided up proportionally, except in cases of exclusive possession by one tenant
4) No right of reimbursement for necessary repairs (but can get that amount credited during partition)
5) No right of reimbursement for improvements
Vested remainder subject to open
Vested remainder in a class gift when we know some of the people in the class, but full membership is unknown
Rule of convenience
When it's unclear what the grantor intended and it's possible that the grantor wanted the gift to divest and the class to close upon his death, then that's how the gift will be construed
Rule Against Perpetuities
No interest is good unless it must vest, if at all, not later than 21 years after a life in being at the creation of the interest
Exceptions to the class gift rule
1) Money gifts and gifts that provide a specific sum to each class member
2) Property interest passes from one charity to another charity
3) An option contract held by a current tenant to purchase a fee interest in the rental premises
Class gift rule
If a transfer of a future interest is made to a class and RAP voids a transfer as to any member, the transfer is void as to all members, even a vested member
Virginia's Uniform Statutory Rule Against Perpetuities
A nonvested property interest is invalid unless:
1) When the interest is created, it is certain to vest or terminate no later than 21 years after the death of a life in being; or
2) The interest either vests or terminates within 90 years after its creation
Four types of tenancies
1) Tenancy for a term: Must be a clear set term
2) Periodic tenancy: Defined by period by which rent is to be paid (ex. month to month)
3) Tenancy at will: Can end at any time
4) Tenancy at sufferance: Tenants stay beyond lease term; landlord can evict or hold over tenant
What notice is required to terminate a periodic tenancy?
One full period of notice is required and is only effective the last day of the following period
What is the maximum period of a holdover tenancy?
1 year
When is the tenant excused from paying rent?
1) Premises are destroyed
2) Landlord completely or partially evicts tenant
3) Landlord substantially breaches his obligations by violating either the implied covenant of quiet enjoyment or the implied warranty of habitability
Implied covenant of quiet enjoyment
Landlord must make premises substantially usable for their intended purposes, otherwise tenant is constructively evicted
What is required to constructive eviction?
1) All or almost all the premises were unable
2) Tenant has to inform the landlord of the problems and landlord does not make repairs
3) Tenant has to leave premises within a reasonable period of time
Implied warranty of habitability
A non-waivable obligation to meet the housing code and other basic requirements of decent conditions for residential households
* Only applies to multi-family residential buildings
When is the landlord responsible for third-party actions that intrude upon the tenant?
1) In common areas
2) Nuisance-like behavior created by another tenant
Landlord's tort liabilities
Landlords are responsible for:
1) Injuries caused to tenants in non-common areas from latent defects not warned about
2) Injuries caused when they voluntarily agree to do repairs and do them badly
3) Injuries caused in common areas
When may a landlord deny permission to assign/sublet?
Only for a commercially reasonable reason
Requirements of adverse possession
Possession is
1) Actual
2) Hostile
3) Open and notorious
4) Exclusive
5) Continuous for statutory period (15 years in VA)
What are the two main exceptions to the Statute of Frauds for land sale contracts?
1) Part performance
2) Detrimental reliance
Implied duties of a land sale contract
1) Implied duty of good faith
2) Implied duty to provide marketable title
Implied duty to provide marketable title
Seller must prove or warrant that he has good title to the property. Seller implies that there are no:
1) Undisclosed liens
2) Undisclosed debts or mortgages
3) Undisclosed encumbrances
4) Zoning violations (risk of litigation)
* Title is unmarketable when a reasonable person would not purchase it
Under equitable conversion, can judgment liens against the seller during the interim period levy against the real property?
No, equitable title lies in the buyer
Purchase-money mortgage
A secured interest taken in return for financing the secured property
Equity of redemption
Right to buy back property before actual foreclosure date
Statutory redemption
A statutory right of borrower to buy back property after foreclosure sale
If a lender transfers a note without mortgage, who is the borrower obligated to?
The original lender only, unless borrower is notified
Which mortgages take priority?
Senior over junior, except purchase money mortgages always come first
Does a buyer at a foreclosure sale take property subject to any liens?
1) Only liens that are senior to the foreclosing party
2) But if any interests are not made party to the foreclosure, their interests are safeguarded
Who takes first priority to readily-removable fixtures?
Purchase money mortgage holder
Who takes priority to fixtures that cannot be readily removed?
Senior mortgage holder over the junior
How do effect a valid transfer of title?
Delivery of deed and acceptance
Contents of a deed
1) Must identify the parties and include grantor's signature
2) Must describe property
3) Some language of transfer
Who do the recording statutes protect?
Subsequent purchasers of real property for value
Shelter Rule for bona fide purchasers
Grantee is sheltered by the good faith purchaser (seller) and has good title, even if grantee knew of prior conveyance in a notice or race-notice jurisdiction
Estoppel by deed doctrine
A grantor who does not yet own land is estopped from arguing that he failed to deliver a valid deed to a grantee on that basis
Concept of merger
When the deed is delivered, the land sale contract is merged into the deed, and the buyer can only sue on the deed
Three types of deeds
1) General warranty: Most comprehensive
2) Special warranty: Only warrants that there are no defects in title while grantor owned property
3) Quitclaim: No warranties
Implied warranties in a deed: Present covenants
Subsequent buyer cannot sue original grantor on these warranties (do not run with the land):
1) Covenant of seisen: Deed conveys legally described land in deed
2) Covenant of the right to convey
3) Covenant against encumbrances: No encumbrances that have not been disclosed
* Entitled to money damages only
Implied warranties in a deed: Future covenants
Subsequent buyer can sue original grantor on these:
1) Covenant of quiet enjoyment: Promises to defend against future challenges to grantee's title
2) Covenant of warranty: Promises to protect & defend against future assertions of encroachments or encumbrances
3) Covenant of future assurances: Promise to take necessary action to pass valid title if it is later determined that grantor failed to do so
* Entitled to injunctive relief only
After-acquired title
When a person purports to transfer real property he doesn't own and then becomes owner, title to that property automatically vests in the transferee
When someone trespasses and puts fixtures on your property, can you keep the fixtures?
Under the modern rule, trespassers in goods faith can remove fixtures but only if it does not cause substantial damage
Doctrine of ademption
If testator transfers away property before death, the gift is invalid
Doctrine of lapsing
If the will gives property to a beneficiary who predeceased the testor, the gift lapses (fails) and returns to testator's estate
Anti-lapsing statutes
If gift is to a close relative, gift is presumed to be not just to that person, but also that person's heirs
Doctrine of exoneration
An heir is entitled to have encumbrances upon real estate paid by the estate's personal property, unless will directs otherwise
Restraints on alienation
1) Absolute restraints: Void
2) Partial restraints: Sometimes upheld if reasonable duration and purpose
3) Use restrictions: Generally upheld
Do express easements have to be in writing?
Yes
Non-express easements
Easement by (PINE):
1) Prescription: 20 years in VA
2) Implication from prior use
3) Necessity
4) Estoppel
Easement by implication from prior use
1) Larger estate is divided up
2) Prior to division, a prior continuous use that is reasonably necessary for the enjoyment of the land
3) Use must have been apparent & obvious at time of division
4) Use must continue after division
Easement by estoppel
1) Owner gives permission to cross land
2) Person crossing land invests or relies to his detriment that permission will never be revoked
When does a subsequent purchaser take subject to an implied easement?
If he had inquiry notice
Can a subdivision extend the number of parcels that benefit from an easement appurtenant?
Yes, but the overall burden cannot be something more than reasonably foreseeable at time of grant
For an easement by necessity, what happens when the necessity ends?
The easement also ends
Duty to maintain easements
Owner has the duty unless otherwise agreed upon
Must the owner and others contribute to repairs of an easement?
Depends on the reasonableness of the repair. Must give them adequate notification and a reasonable opportunity to participate in decisions regarding repairs. Repairs must be performed adequately, properly, and at a reasonable price
Real covenants vs. equitable servitudes
Equitable servitudes have only injunctive relief; for real covenants the only relief is damages
Requirements for a real covenant
1) Must be express and in writing
2) Expression of intent that covenant will run with land
3) Horizontal privity: Larger estate was divided up
4) Vertical privity: Applies only to subsequent owners of the exact same estate in land
5) Notice to subsequent purchaser
6) Must "touch and concern" the land
What kind of notice is needed for a real covenant to bind a subsequent purchaser?
Record notice
What does it mean to "touch and concern" the land?
Covenant does not touch and concern land if it is unreasonable, irrational, oppressive, anticompetitive, or restrains alienability too much
Requirements for equitable servitudes
1) Generally express and in writing
2) Intent to run with the land
3) Some substantial connection b/w successor and the original bound covenant party
4) Notice (inquiry notice may be sufficient)
5) Touch and concern the land
Can a third party ever enforce an equitable servitude?
Yes, if it was originally intended for the benefit of a third party (e.g., a neighboring church)
Requirements for an implied reciprocal servitude
1) Common scheme development
2) Promise intended to run with the land
3) Must touch and concern the land
4) Must be reciprocal (burden & benefit each parcel)
5) Must be a negative restriction
6) Must be actual, record, or inquiry notice
Two ways to terminate an equitable servitude
1) Abandonment
2) Changed circumstances: makes it impossible to enforce
Equitable defenses to an equitable servitude
1) Estoppel: detrimental reliance
2) Unclean hands: you also violated the restriction
3) Laches: took too long to enforce and caused prejudice
Two approaches to water rights
1) Reasonable use: can only make a use that it does not unreasonably interfere with another party's domestic use
2) Prior appropriation: first party to make beneficial use owns the flow to that extent
Lateral support rights and liability
1) Strict liability: Neighbor's buildings did not contribute to subsidence
2) Negligence: Neighbor's buildings did contribute to subsidence
Subjacent support rights and liability
1) Strict liability: For structures in place before mining rights were transferred
2) Negligence: For structures built after the mining rights were transferred
When does a regulatory taking require just compensation?
When it so reduces the value of the property that it is basically worthless
Can only the owner of the property to bring a public nuisance action?
No, as long as that person can show they have a special injury that is distinct from the public as a whole
Actions to gain title or possession in land
1) Unlawful detainer: Litigates possession, not title, in land (landlord attempts to evict a tenant)
2) Partition: Co-tenant must have the right to immediate possession to maintain action for involuntary partition
3) Ejectment: Brought by anyone with a right to re-enter land, where rent is in arrears or a condition of the terms of tenancy have been breached
4) Bill to quiet title: Equitable proceeding to establish ownership of real estate when ownership is in question
5) Declaratory judgment: Judgment of a court in a civil case, declaring the rights of parties to a dispute
Are deeds of trust considered to have "paid value" for protection of the recording act?
Yes, unless it was not given simultaneously with the loan
Does modification of a senior mortgage subordinate it to a junior mortgage?
No, but only if the modification does make the mortgage more burdensome and prejudice the interests of the junior mortgage holder?
Warranty of suitability
Implied in a land sale contract for the purchase of a newly constructed residence; cannot be disclaimed
Can you sever a joint tenancy by oral agreement alone?
No, must be in writing under the Statute of Frauds
When a mortgagor defaults, can the mortgagee elect to pursue its rights against his personal assets without first seeking to foreclose?
Yes
Is a holder of a judgment lien protected by the recording act?
No, he is not considered a purchaser for value
Which purchase money mortgage generally has priority?
A seller-financed one, over a third-party one
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