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BARBRI Real Property
Terms in this set (185)
An estate in land always involves
The right to possession.
Fee simple absolute
The maximum possible estate or right of ownership of real property. Runs forever and is freely alienable.
Creation of fee simple
Courts will presume a fee simple unless language shows a clear intent to create another estate.
Defeasible fee estates
These estates in land have the characteristics of the fee simple but might not last forever. However, the duration is not measured by (1) a lifetime, or (2) a specific date. These may terminate upon the happening of a
3 defeasible fee estates
1) fee simple determinable (durational words)
2) fee simple subject to condition subsequent (conditional words)
3) fee simple subject to executory limitation (no specific words, but passes to a third party)
Fee simple determinable (FSD)
automatically terminates on the happening of a stated event.
"for so long as," "while," "during," or "until"
gack to grantor
Fee simple subject to condition subsequent
does not end automatically--ends when a condition occurs.
"but if," "provided," "however," or "on condition that"
grantor (who must take steps to re-enter and reclaim the land)
Fee simple subject to executory limitation
ends automatically upon the happening of some condition
nothing in particular
NOT the grantor--someone else
An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.
How is a life estate created?
Express language (e.g. "to Sansa for life") or by implication "to Arya after the death of my daughter Sansa"
Creation of the life estate pur autre vie
The measuring life can be the life of someone other than the life tenant (e.g. "to A for the life of B"). If the life tenant dies before the measuring life, the life estate passes to the life tenant's estate until the measuring life dies
Rights and duties of life tenant
All life tenant can do is maintain the estate, and that means continuing the normal use of the land in its present condition
If the life tenant does more or less than merely maintain the estate, the life tenant is guilty of
3 types of waste
1) voluntary waste
2) permissive waste
3) ameliorative waste
Any affirmative action beyond the right of maintenance that causes harm to the premises. Any change of use is voluntary waste for which the life tenant may be liable to holder of future interest.
Open mines doctrine
Depletion of natural resources constitutes waste UNLESS consumption of such resources constitutes the normal use of the land (they were consumed before), as in the case of a life estate in a coal mine or a granite quarry (but crops ≠ waste)
Results from failure to take reasonable care to protect the estate. This is passive, not active.
Life tenant must do
to avoid permissive waste
keep property in repair but only ordinary repairs--not improvements or replacement
pay all taxes on the property
interest on mortgage on entire property:
pay any interest on any mortgage that encumbers the entire fee simple (future holder pays principal)
A special type of voluntary waste that occurs when the affirmative act alters the property substantially but increases the value of it
If changed conditions have made the property relatively useless in its current use, the life tenant can...
Tear it down without liability to the holder of the future interest
A present interest in land with a future right of possession. The interest exists now, but possession will not come until later, if at all
Classification of future interests
First ask "who holds the future interest?"
, then the only possible choices are:
2) possibility of reverter
3) right of entry
, then the only possible choices are:
2) executory interests
Future interests in the grantor--the reversion
The interest kept by the grantor when the grantor gives a grantee
than the durational estate the grantor had.
A reversion is never subject to RAP.
Even if the grantor gives a lesser present possessory estate, a reversion does not exist if the grantor has given away the full interest.
Future interests in the grantor--the
Whenever a grantor gives a fee simple determinable, the grantor keeps a
of reverter. That present possessory estate and future interest always go together.
Future interest in the grantor--right of entry
This interest is labeled the
right of entry OR the power of termination.
Both labels refer to the same future interest. Whenever a grantor gives a
fee simple subject to a condition subsequent
, the grantor keeps a right of entry. That present possessory estate and future interest always go together. This is NEVER subject to RAP.
To get a fee simple subject to condition subsequent on exam...
Grantor must expressly reserve a right of entry, and a failure to do so results in the condition being ignored
Nothing stands in the way of it becoming possessory on the natural expiration of the preceding estate. We have an ascertainable person and there is no express condition precedent.
Vested remainder subject to open
There is no condition to be satisfied before taking possession, but this remainder is conveyed to a
class of people.
There is at least one member who will take, but the size of his share is unknown because the class remains open and future persons may qualify as members of the class (e.g. future children).
How do we define class members?
includes person's kids from all marriages as well as adopted and nonmarital children
presumptively includes those people who would take under the laws of descent and distribution if the person were to die intestate
issue and descendants:
refer to lineal offspring of the designated person
A gift to a group of persons having a common characteristic; the share of each member of the class is determined by the # of persons in that class
Distinguishing open from closed classes
A class is
if it is possible for more members to enter.
A class is
when it is not possible for more members to enter, meaning persons born thereafter are shut out.
When does a class close?
Rule of Convenience:
class closes at time distribution to class must be made; later-born class members excluded from taking as members of the class (except gestating members)
The womb rule
An exception to the rule of convenience. A child of B in gestation at A's death will share in a class gift to children.
Something has to happen or be known before the remainder can become possessory.
3 situations for contingent remainders
a remainder is contingent if a condition must be satisfied before the grantee can be certain of possession
grantee not in existence:
if at time of grant the grantee is not in existence, then that interest must be a contingent remainder. The grantee's interest is contingent on grantee being born.
identity of exact taker unknown:
if you can't identify, by name, the person who holds the remainder, then remainder is contingent until you can identify the taker
What is common to both vested and contingent remainders?
They will become possessory, if at all, only upon the natural expiration of the estates coming before them. Remainders never affect the estate that comes before them.
Vested remainder subject to divestment
The taker is identified but there is a condition subsequent.
Future interests in a grantee-executory interest
The executory interest operates to divest or cut short the estate that comes before it; it does not come into possession at the natural expiration of the earlier estate
If a future interest in a grantee is
not a reminder
, it must be...
An executory interest
if a future interest in a grantee
cuts short an earlier estate
, it must be...
An executory interest
May a holder of an executory interest sue a life tenant for waste?
If an executory interest operates by taking title from one grantee and giving it to another grantee, it is called...
If an executory interest operates by taking title from the grantor and giving it to a grantee, it is called...
The only future interests that RAP applies to are...
Contingent remainders, executory interests, and vested remainders subject to open
Rule Against Perpetuities
No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.
Are future interests in the grantor subject to RAP?
Class gifts and RAP
Subject to RAP. This is an all or nothing approach. If it is possible that a member of the class could vest outside of the LIB + 21 years time period, then all interests are void
Age contingency in open cases
Watch for facts where the class is open and the gift over is contingent on a class member surviving to an age beyond 21
A woman is conclusively presumed to be capable of bearing children, regardless of her age or medical condition
Charity to Charity Exception to RAP
RAP will not be applied to a gift/conveyance from one charity to another.
3 forms of co-ownership
1) tenancy in common
2) joint tenancy
3) tenancy by the entirety
Tenancy in common
unity of possession (meaning each co-tenant is entitled to possess the whole of the property)
right of survivorship?
right to partition?
conveyance specifies it is creating a joint tenancy; has *4 unities (time, title, interest, possession)
right of survivorship?
right to partition?
yes (by either agreement or court order--which is in kind or by sale)
Tenancy by the entirety
only for married couples--sometimes the default, sometimes no.
right of survivorship?
no; cannot unilaterally terminate--only divorce or death can do that
Incidents of co-ownership
Possession, money, condition
A person takes possession & use of a property belonging to another.
Possession must be:
Contribution and carrying costs
When one co-tenant spends money on the property, she may demand a contribution from the other co-tenants.
When does a co-tenant have a right to contribution?
It depends on the type of expenditure:
no (but $ spent here may be recouped on sale)
yes if necessary
Must one co-tenant account to another for her share of the profits?
No--don't have to.
4) depletion of natural resoureces
If one co-tenant leaves the property, does the co-tenant who remains in exclusive possession have to pay rent?
No, absent ouster, a co-tenant in exclusive possession doesn't owe rent
May one co-tenant recover rent if the other co-tenant leases all or part of the premises?
Yes. Must account to the other co-tenant.
May a co-tenant commit waste?
No. One co-tenant can bring an action for waste against another during the life of the co-tenancy.
Tenancy for years
(doesn't have to be years--just time). Must in in writing over 1 year.
A repeating lease interest in land for an indefinite period involving payment of rent at fixed intervals, such as week to week, month to month, or year to year.
3 ways to create a periodic tenancy
1) periodic tenancy by express agreement
2) periodic tenancy by implication
3) periodic tenancy by operation of law
Periodic tenancy by express agreement
The agreement must specifically state the period (month-to-month, year-to-year, etc.)
Periodic tenancy by implication
Where lease is silent as to its duration but a periodic tenancy can be implied by terms. If lease does not specify a fixed time or a defined period, then it is presumed to be a periodic tenancy measured by the
payment (e.g. month to month, if rent is paid monthly)
Periodic tenancy by operation of law
violating the SOF
the holdover case
where the tenant stays after expiration of the lease and the landlord accepts rent
Termination of the periodic tenancy
Termination occurs only by giving proper notice. Can be terminated either by LL or tenant w/ proper notice:
less than one year:
length of period, up to 6 months
proper termination date:
tenancy must end on the
last day of the period
Tenancy at will
Either party can terminate at any time without notice.
5 other ways it terminates:
1) death of either party
2) waste by the tenant
3) assignment by the tenant
4) transfer of title by landlord
5) lease by landlord to someone else
Tenancy at sufferance
Not a true tenancy. This is the bare possession of a holdover tenant. At the landlord's sole option, the landlord can either:
1) hold tenant as a
and sue to throw the tenant off the property and recover damages for the holdover;
new periodic tenancy
on the tenant (month-to-month for
, by the old rent period if under a year, yearly if more)
Pay rent and not commit waste.
If Tenant unjustifiably abandons the leasehold Landlord has two choices:
1) treat abandonment as offer to
and accept the offer by retaking the premise, thus ending tenant's liability as of that date
the premises on the tenant's account and hold the tenant liable for any deficiency (mitigation of damages)
Implied covenant of quiet enjoyment
LL makes implied promise he will not breach this covenant. This covenant
3 Ways to Breach Implied Covenant of Quiet Enjoyment
1) actual eviction
2) partial actual eviction (e.g. basement lease)
3) constructive eviction
Occurs when the tenant's use of the premises is substantially disturbed or interfered with by the landlord's actions or failure to act where there is a duty to act. The tenant is effectively forced to move out and terminate the lease without further liability for further rent.
4 things needed to establish constructive eviction
1) LL or his agents caused the injury
2) breach substantially and materially deprived the tenant of use and enjoyment of the premises
3) within a rsbl time, the tenant gave LL notice and reasonable time to respond/repair
4) after a reasonable time, tenant vacated the premises
Condition of the Premises (Landlord tenant)
Housing codes: require each dwelling meet certain minimum living standards, combat overcrowding, disease and low health and safety. Majority of states have adopted an
implied warranty of habitability
for residential tenancies
Available remedies for breach of implied warranty of habitability
1) tenant moves out and terminates lease
2) tenant makes repairs directly and offsets the costs from future rent obligations
3) tenant reduces or abates rent to an amount equal to FMV in light of the defects, or
4) tenant remains in possession, pays full rent, and seeks damages
Illegal eviction of a tenant that has exercised protected rights under the law. Typically if action is taken by LL within
, the LL is
to be retaliating and will have burden to prove a valid, non-retaliatory reason for his actions.
Assignment vs. sublease
transfer of all tenant's interest under a lease
transfer of part of the tenant's interest
Are non-assignment clauses enforceable in lease agreements?
Yes, but courts construe narrowly
What happens if a tenant violates a non-assignment or non-sublease clause?
The attempted transfer is
(not void) at the option of the LL
May a LL unreasonably refuse to consent to a proposed assignment?
consent may be withheld only for a commercially reasonable objection
Privity of contract vs. privity of estate
A lease involves both a contract and a property right (separate grounds for liability)
LL duties when LL transfers interest to new LL
Generally, the OG LL continues to be liable to OG tenant because of privity of contract. A successor LL may be liable to the OG tenant if there is either privity of contract or estate and the lease covenant runs with the land.
Tenant transfers less than her full interest under the lease.
Who can the LL recover rent from if OG tenant subleases?
Anyone he is in privity with--estate or contract
Who keeps the estate in the case of a sublease?
The subleasor keeps the estate (OG tenant). The estate is not transferred to the successor tenant.
An item of personal property that has been converted to real property by being permanently affixed to the realty.
If chattel is not incorporated into the structure, classification as a fixture will depend on objective intent of party who installed them. What factors to consider?
1) nature of article
2) manner in which it is attached to realty
3) the amount of damage caused by its removal
4) the adaptation of the item to the use of the realty
A nonpossessory interest in real property involving a right of use
2 types of easements
1) easement appurtenant
2) easement in gross
When the easement dterm-185irectly benefits the use and enjoyment of a specific piece of land
Always two pieces of land:
property that serves
Easement in gross
The easement does not benefit land. There is only a servient estate (e.g. utility easements--power lines, RR tracks)
How to create an easement:
- Grant it (in writing)
- Reserve it (when transferring land)
- Imply it (based on circumstances of land transfer)
- Prescription (use it for the statutory period)
Creating an express easement
Must comply w/ SOF and deed formalities. An express grant can be given or the reservation of an easement when land is sold to another can arise (easements under 1 year don't need to be in writing, but most are perpetual)
Creating an implied easement
implied easement by prior use:
we assumed parties intended the prior use to continue but didn't reduce it to writing
implied easement by necessity:
exists when property is landlocked
An implied easement by prior use exists if...
1) commonly owned land is severed into dominant and servient estates
2) during the time of common ownership, there was a use by the common owner and the previous use is apparent and continuous (discoverable), AND
3) its use is reasonably necessary for the continued enjoyment of the now dominant estate
To create an implied easement by necessity
1) common ownership of the land that was severed, AND
2) at time of severance, the dominant estate became landlocked and there is a
for access to a public road
Who chooses the location of the easement?
The owner of the servient estate so long as the location is a reasonable one
Easement by prescription
Arises like title by adverse possession but is only
How to create an easement by prescription?
open and notorious
or without owner permission
continuous and uninterrupted
use (seasonal okay)
prescriptive period of 20 years
Transferring the benefit of an easement
the benefit automatically goes with the dominant estate, whether or not it is mentioned in the conveyance--cannot be separately transferred.
Easement in gross:
benefits in gross that are
can always be transferred, but benefits of easements in gross that are
cannot be transferred
Who must make repairs to an easement?
The holder of the easement. There is granted permission to go on servient estate to make such repairs. Must also make reasonable restoration of servient estate if it's damaged during repairs to the easement.
6 possible situations where an easement ends for reasons outside the scope of the easement
1) unity of ownership or merger (dom + serv)
2) release of the easement
3) abandonment of the easement
4) termination by estoppel (1- representation of relinquishment by holder of dom estate + 2- change of position in reliance by holder of serv estate)
5) termination by prescription (owner of serv estate stops the use of easement and keeps it stopped for stat period)
6) end of necesity (e.g. road built on other end of landlocked estate)
A limited privilege of use--NOT a property interest. This is a contract right and revocable at the will of licensor (tickets are always licenses).
Irrevocable license (easement by estoppel)
If licensee invested substantial $ or labor in rsbl reliance on license's continuation, then it becomes irrevocable and can be enforced under estoppel principles. 2 important rules:
1) any time an easement is attempted but fails due to SOF, there is a license
2) if $ is spent on the property in furtherance of oral license, the license becomes irrevocable and is just as good as an easement, and can be enforced under estoppel principles
A profit gives the right to go onto land to take a natural resource away (e.g. timber, coal). Included in this is an implied easement to go on the land to get the resource.
A contractual promise regarding land (can be affirmative or negative)
Covenant vs. Equitable Servitude
Decide using the basis of the remedy the plaintiff seeks.
construe at law a
construe in equity as an
the person who owns the land that is being used by another person
enjoys benefit of the performance of the promise
For the burden of a real covenant to be enforceable against a successor promisor, there must be...
that it run with the land
of the covenant (actual, record, or inquiry) at the time an interest in the burdened land is acquired, AND
3) covenant must
touch and concern
the land (make it more valuable/useful) and affect parties as
Refers to the nexus between the original parties A & B. It requires that they be in succession of estate, meaning that they were in a:
2) landlord-tenant; or
3) mortgagor-mortgagee relationship.
Horizontal privity is hard to establish and is usually absent/the reason the burden won't run.
Strawman and horizontal privity
Strawman can be used to create horizontal privity between parties who weren't original
Vertical privity refers to the nexus between A and A-1. It simply requires some non-hostile nexus, such as contract, devise, or descent. This is much easier to establish, and will be absent only if A-1 acquired through adverse possession.
For the burden of a real covenant to run against a successor in interest, there must be both
Horizontal and vertical privity
For the benefit of a real covenant to run to a successor promisee...
that it run with the land
touch and concern
between party who subsequently acquires property subject to the covenant and the OG party from who they got the property.
For the benefit to run, the owner of ANY succeeding possessory estate can enforce the covenant--need not succeed the entire estate
A promise that equity will enforce against successors. Accompanied by injunctive relief.
Creation of equitable servitude
3) touch and concern
privity is NOT required to enforce an equitable servitude
For the burden of an equitable servitude to be enforceable against a successor promisor...
1) there must be intent it run with the land
2) notice of covenant at time interest int he burdened land is acquired, AND
3) touch and concern
For the benefit of an equitable servitude to run to a successor promisee...
1) intent that it run with land
2) touch and concern
no privity or notice required
Subdivisions--general or common scheme doctrine
1) intent to create a servitude on all the land in the subdivision (common building plan in map or deed)
2) defendant owner has notice of promise (which can be established in 3 ways--actual notice, record notice, or inquiry notice)
1. Possessor must show: actual entry giving rise to exclusive possession that is open and notorious, adverse/hostile, and continuous throughout the statutory period for an ejectment action. (HELUVA)
2. The statute does not begin to run if the owner is under a disability to sue (e.g., incapacity) when the possession begins.
(1) Continuous: uninterrupted for the statutory period
(2) Open and Notorious: visible occupation of land to afford the true owner notice, and used in the way an owner would
(3) Actual and Exclusive: actual physical entry onto the premises, using land exclusively, and
(4) Hostile: entry without the true owner's permission
Adverse Possession: 6 Requirements
1. Hostile: being on the property with no right to be there
2. Exclusive: must exclude others from possessing
3. Lasting: possession lasts for the statutory period (20 years)
4. Uninterrupted: kind of continuous use that an ordinary owner of property would make.
5. Visible: use and possession of the property is out in the open (open and notorious)
6. Actual: adverse possessor must ACTUALLY POSSESS the land to obtain the title.
Must owner know a trespasser is on his land for adverse possession purposes?
Constructive adverse possession
An exception to the requirement of
. "Color of title" means bad title--possessor is not a naked trespasser but holds a bad title. 2 additional requirements:
1) amount actually possessed must bear a reasonable relation to the whole
2) property must be unitary
Does leasing land to someone else count as possession for purposes of adverse possession?
Can one co-tenant adversely posses the property?
Only when the possessor excludes the other co-tenant(s) and the SOL runs
Tacking of Time for Owners & Possessors
Can tack periods of adverse possession, but periods must pass directly from one adverse possessor to another with no gaps.
Disability and limitations tolling
3 legal disabilities:
2) unsound mind
3) in jail
Tolling of SOL is required for these, but it is limited. If the owner is under a disability at time adverse possession begins, the clock doesn't run until owner is free of the disability. BUT, if the disability arises AFTER the adverse possession began, it's an
and it is ignored
2 steps to purchase land
1) contract of sale
2) deed at closing
Doctrine of part performance as SOF exception to land sales contracts
Most states require 2/3:
of the land by the purchaser
all or part of purchase price
Who bears the risk of loss?
Buyer, if it's before closing (if seller is not at fault).
Death of a party before closing
Rights set in K are preserved. If seller dies, buyer closes w/ seller's estate and the seller's interest becomes
If the buyer dies, seller closes w/ buyer's estate, but buyer's interest remains in
Good or clear title, reasonably free from the risk of litigation over possible defects. Every land sale contains an implied warranty of marketable title (not perfect).
To prove marketable title, seller must provide buyer w/ 3 things
1) proof of title (tangible evidence)
2) title free of encumbrances
3) valid legal title as of date of closing
What defects make title unmarketable?
1) defects in record chain of title (e.g. property description, deed not properly executed, prior grantor lacked capacity)
2) presence of encumbrances (no easements, restrictive covenants, mortgages, etc. not mentioned in K for buyer to take subject to)
3) title acquired by adverse possession (but can be cured w/ judgment of title in seller or w/ quitclaim deed from party against whom adverse possession occurred)
Does the presence of zoning ordinances make title unmarketable?
No. However, a violation of a zoning ordinance will do that.
Does the violation of a housing or building code make title unmarketable?
Remedies of buyer if title is unmarketable
Buyer must notify seller and give him rsbl time to cure defect (even if it postpones closing). If problem not corrected...
2) suit for damages
3) specific performance
General rule for timing in land sales contracts
Time is presumed not of the essence. Performance must be tendered within a rsbl time after date of closing (2 months late is usually rsbl).
Remedies available for breach of sales contract
2) liquidated damages (no more than 10% of sales price)
3) specific performance
Does a sale of land come with any warranties of quality or fitness when it comes to the physical condition of the property?
No, not for a seller of existing land and buildings (but must disclose serious defects he knows of which are not obvious to buyer, and cannot conceal defects).
For a seller of new construction, a majority of states include a
warranty of good workmanship
warranty of habitability
for a new home. These warranties only cover latent material defects.
the official document transferring ownership from seller to buyer. Must comply w/ SOF as well as having proper execution, delivery, and acceptance. Once that happens, the contract
into the deed and is destroyed, and all K provisions are lost unless included in deed (or K says they stay around)
A valid deed must have 5 things
2) ID grantor and grantee (no dead people)
3) description of property
4) conveyancing language
5) signature of grantor
no consideration needed for valid deed
Delivery of deed
Solely intent to pass title--doesn't always mean physical transfer.
raises presumption of delivery. Can use any parol evidence to show intent of grantor re: delivery.
Grantor hands over deed, but tries to condition delivery on an event (may be valid depending on facts)
Condition expressly written into deed
E.g. deed language is "to A but not until I die" with deed handed to grantee--this is valid delivery of a future interest.
Oral condition with delivery to grantee
If condition is made orally at delivery time, DISREGARD IT--not valid
Making delivery conditional on payment of purchase price
Valid provided that grantor makes delivery to a third party
with instructions to deliver to grantee when conditions are satisfied (oral okay too). Once deed is with escrow agent, grantor cannot get it back--no changing mind.
Acceptance of deed by grantee
Presumed unless explicitly rejected.
Covenants for title
1) if grantor makes no promise regarding title, grantee gets
Quit Claim Deed
; grantee gets whatever grantor owns and grantor promises nothing
2) If the grantor makes promises regarding title, they are covenants for title and deeds--known as
General Warranty Deeds
3 present covenants
covenant of seisin
warrants that grantor owns estate she claims to
covenant of right to convey
covenant against encumbrances
promises no servitudes or mortgages on the land besides those previously disclosed to buyer
3 future covenants
covenant of quiet enjoyment
promises grantee won't be disturbed by third party lawful claim of title
covenant of warranty
promises grantor will defend the grantee should there be a claim of title asserted by others
covenant for further assurances
promises grantor will perform whatever future acts rsbly necessary to perfect grantee's title if necessary
If covenant against encumbrances is breached the damages are:
1) cost of removing encumbrance from the land
2) diminished FMV if it cannot be removed
Estoppel by deed
Arises when a grantor conveys land the grantor does not own. If a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance. If grantor transfers title to a BFP after getting title, then OG grantee loses and cannot rely on this.
A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.
If, at the time B takes, he is a BFP, he wins. It won't matter that A may ultimately record first, before B does, or whether or not B ever records. In race notice land, the last BFP to enter wins.
Race notice statute
Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.
To prevail, B must 1) be a BFP, and 2) B must win the race to record.
Chain of title
A history of the ownership affecting title to a parcel of land.
The shelter rule
One who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against. Transferor "steps into the shoes" of the BFP
A recorded deed that is outside the chain of title and cannot be located through the grantor-grantee system of indexing. A wild deed is incapable of giving record notice of its existence.
The conveyance of a security interest in land, intended by the parties to be collateral for the repayment of the monetary obligation. Union of debt + voluntary transfer of a security interest in the debtor's land to secure the debt. Mortgage is given by debtor (mortgagor) to the creditor (mortgagee). If loan isn't paid in full, Sheriff sells it at a
Arises with the absolute deed and a separate promise of reconveyance.
May parties to a mortgage transfer their interests?
Yes. The mortgage automatically follows a properly transferred note.
Transfer by creditor-mortgagee
Can transfer her interest by:
1) endorsing the note and delivering to transferee, OR
2) executing a separate document of assignment
Transfer by debtor-mortgagor
When mortgagor transfers title to the property, the grantee automatically takes the property subject to the mortgage. However, the
grantee will not be personally liable on the mortgage unless the grantee specifically assumes the mortgage.
The mortgage must still be paid or the mortgagee will foreclose. The grantee is subject to losing the property in a foreclosure sale.
A legal procedure by which a mortgagee causes the judicial sale of the secured real estate to pay a defaulted loan. To do so, mortgagee must foreclose by proper judicial proceeding. The land is sold and proceeds go to satisfying the debt.
What if the proceeds at a foreclosure sale are less than the amount owed on the mortgage?
The mortgagee can bring a personal action against the debtor for a
Debtor's right of redemption
Debtor or guarantor may redeem the property by paying the amount due (amount in arrears (plus interest)) unless the mortgage includes an
, which means the debtor must pay off the entire balance of the mortgage in order to redeem. The right of redemption cannot be waived in the initial mortgage, but can be waived later w/ sufficient consideration. Today, 1/2 of states have a
statutory right of redemption
which allows mortgagors to redeem property for some fixed period of time after the foreclosure sale has occurred (typically 6 months to 1 year)
General rule is that where there are multiple mortgages on a single property, priority is allocated based on the rule of
first in time, first in right
Changes in senior mortgages
If the mortgagor does anything to increase a senior mortgage (e.g., borrows more money or increases interest rate), then that senior mortgage loses its priority over junior mortgages--BUT only to the extent of the change.
Foreclosure elimination of all junior interests
This is true, but does not eliminate senior interests.
Senior interests just continue in place which means buyer takes subject to senior interests. Holders of junior interests have the right to pay off any mortgage being foreclosed on in order to keep their junior interests from being eliminated. Thus junior interests are a necessary party to any foreclosure proceeding. If they are not a party, then the interests are not eliminated by the foreclosure.
Dodd-Frank Act as a defense for mortgagor
Requires lender to determine mortgagor's ability to repay before making a loan, so a violation can be used as a defense in foreclosure actions.
Loan modification request
Mortgagee must make good faith consideration of a mortgagor's request for a loan modification--cannot foreclose while request still pending.
Installment land contract
A contract for the sale of real estate financed by the seller whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though legal title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or land contract.
Rights to watercourses
where landowner has right to a reasonable amount of water bordering land as *riparian owners (who are only liable when they unreasonably interfere with another's use of the water)
prior appropriation doctrine
where rights are allocated based on a
first in time, first in right rule
, meaning the first person who diverts and uses water from a watercourse has the right (any beneficial use of the water will create the right)
Landowner has right to reasonable use of groundwater--use must not be wasteful.
Surface water rights
Surface water comes from rain, springs, or melting snow--water that hasn't reached a watercourse or basin. Under the
common enemy rule
, a landowner may make changes on her land to combat the flow of surface water. PSA: many courts modify this to prevent harm to another's land.
Right of lateral support
A landowner has a right to
support from the sides
. This arises in cases where adjacent landowners excavate their lands and the adjoining land caves in. Such an adjacent landowner is strictly liable if P can show the improvements on P's land (e.g. building a house) didn't contribute to the land's collapse. If the improvements on P's lot DID contribute, then adjacent landowner is only liable if her excavation was
Right of subjacent support
Right of an owner of real property to have the surface of his or her land supported by the underlying strata of the earth. Where someone else owns, leases, or has an easement in the areas of land below the surface, the right is to support of the land in the condition it was in at the time of the conveyance of the right to subjacent areas.
The government may use a hierarchy of uses of land beginning with a single-family home as the highest use, to two-family home, then apartments, then malls, then factories. Under this system,
land zoned for a particular use can be used for that use or ANY higher use.
Land may be used only for the purpose for which it is zoned
A gov't may require a developer to obtain a permit before building. If the gov't imposes conditions on the permit, those conditions must be
reasonably related in nature and scope
to the impact of the proposed development. If not, then the conditions are
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