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MULTISTATE FLASH CARDS

REAL PROPERTY
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PROPERTY 1
Ownership

What are the three principal types of


concurrent ownership?

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1. Joint tenancy with right of survivorship;


2. Tenancy in common; and
3. Tenancy by the entirety.
PROPERTY 2
Ownership

What is a "joint tenancy"?

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Under the common law whereby the co-tenants own the
property with an undivided interest in the whole, with a right to
survivorship. The right to survivorship is the distinguishing
feature of a joint tenancy: It means that when one tenant
dies, his share automatically passes to his co-tenant(s)
instead of his heirs. Each co-tenant must own an equal
share. Each takes with the four unities of PITT:
(Possession; Interest; Time; Title).
Note: Modernly the words “with right of survivorship”
need to be added to create a JTWRS, otherwise it is a
tenancy in common.
PROPERTY 3
Ownership

At common law, what are the four


elements necessary to create a joint
tenancy?

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Commonly referred to as the "four unities," they
are:
1. Unity of Possession (all tenants hold an
equal, undivided interest in the whole,);
2. Unity of Interest (same duration);
3. Unity of Title (created by the same
instrument); and
4. Unity of Time (simultaneous vesting of
interests).
MNEMONIC: PITT
PROPERTY 4
Ownership

How can a JTWRS be severed?

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Any act disturbing one of the four unities (time, title,
possession, and interest) will sever the tenancy,
including SPAM:

1. Sale or transfer of an interest;


2. Partition (dividing disturbing property);
3. Adjudication of foreclosure or a lien; and
4 Mortgage (only where the jurisdiction follows the “title”
theory - the mortgage takes title in the property; not in
those which follow the “lien” theory - mortgage only has
a lien on the property, not title);
PROPERTY 5
Ownership

What is a "tenancy by the entirety"?

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It is a co-tenancy that:
1. Can only exist between husband and wife
(it is "marital");
2. Has a right of survivorship;
3. Cannot be destroyed by severance;
4. Requires the same "four unities" as a
joint tenancy: time, title,
possession, and interest.
NOTE: A tenancy by the entirety is recognized in
some, but not all, states.
PROPERTY 6
Ownership

In what ways can a "tenancy by entirety"


be terminated?

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A tenancy by the entirety can be severed
by any of four Ds: DDDD
1. Death;
2. Divorce;
3. Dual transfer by both H & W
4. Debtor in bankruptcy – either spouse
declares bankruptcy and trustee sells
tenancy to satisfy indebted spouse’s debt.
PROPERTY 7
Ownership

There are two principal differences


between a "joint tenancy" and a "tenancy
by the entirety." What are they?

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1. MARRIAGE: Tenancy by the entirety can only


exist between the husband and wife. Joint tenancy does
not require marriage.

2. SEVERANCE: Tenancy by the entirety cannot be


severed by either spouse unilaterally as long as husband
and wife are married.
PROPERTY 8
Ownership

What is a "tenancy in common"?

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It is a co-tenancy without a right to survivorship.
Unlike a joint tenancy, tenants in common can
obtain their interests in the property at different
times, from different instruments, and need not
have equal shares. The only "unity" recognized
in a tenancy in common is that of
possession - as long as the tenancy lasts each
tenant has a right to possess the entire property
equally even if he has an unequal share.

NOTE: Where either a joint tenancy or a tenancy by


the entirety fails to meet one of their requirements
(e.g., four unities not met; husband and wife
divorce), a tenancy in common results.
PROPERTY 9
Ownership

What is the division of ownership in a


"cooperative"?

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Normally, a corporation owns the entire
premises, and each unit therein is leased
to tenant-stockholders who own stock in
the corporation itself. If the cooperative is
financed, it is treated as a single entity,
covered by a single mortgage (or
mortgages). The tenant-stockholder's
"proprietary lease" is usually contingent on
his continued holding of his shares in the
corporation.
PROPERTY 10
Ownership

What is the division of ownership in a


"condominium"?

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Normally, the individual holds a fee simple


as to his own space, while owning an
undivided share of the "common areas"
(generally including lawns, walkways,
recreational facilities and the like).
PROPERTY 11
Ownership

What are the four leasehold estates?

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1. Tenancy/Estate for Years;


2. Periodic tenancy (a/k/a tenancy from
period-to-period);
3. Tenancy at Will; and
4. Tenancy at Sufferance.
MNEMONIC: WiSPY (Will; Sufferance;
Periodic; Years).
PROPERTY 12
Ownership

What is a "tenancy at will"?

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A tenancy which either landlord or tenant, or both, can
terminate any time without notice (at common law; most
states today require 30 days' notice on landlord only, not
tenant). It has no fixed duration.
CREATION: It can be expressly created, or it will be
implied by law if the lease does not provide for periodic
rent (which would make it a "periodic tenancy" or
"tenancy from period-to-period"), or the lease is invalid
(e.g., an oral lease for five years; the tenancy turns into a
periodic tenancy on payment of rent).
TERMINATION: Apart from landlord or tenant
terminating the tenancy, a tenancy at will can also be
terminated by operation of law; for instance, landlord's
selling the property, an attempt to assign by either party,
or the death of either will terminate the tenancy.
PROPERTY 13
Ownership

What is a "tenancy/estate for years"?

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It is a lease for a fixed period of time:


Beginning and ending dates must be fixed.
Most leases create a "tenancy/estate for
years."
PROPERTY 14
Ownership

What is a "tenancy from period-to-period"


(also known as a "periodic tenancy")?

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It is a tenancy which is renewed automatically at the end of each
"period" (e.g., week, month, quarter) unless either lessor or lessee
terminates it,
EXAMPLE: "To Ignatz Feeble from month-to-month," "To Clarence
Clapsaddle for $250/week."
CREATION: Express agreement; implication (where tenant pays rent
on, say, a weekly basis and nothing else is said about a lease,
there's a periodic tenancy from week-to-week); when a lease is
invalid (e.g., through noncompliance with the Statute of Frauds;
tenancy is originally a tenancy at will, but once rent is paid and
accepted, it becomes a periodic tenancy); or by operation of law
(where tenant "holds over" after estate for years and landlord
accepts rent).
TERMINATION: Requires notice of at least one rental period.
However if the period is one year or longer, only six months' notice is
required. Also, many statutes require thirty days' notice regardless of the
length of the rental period.
NOTE: A new lease isn't created at the beginning of every rent
period; the rights and duties of the original lease carry over.
PROPERTY 15
Ownership

What is a "tenancy at sufferance"?

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The tenancy created when a tenant
wrongfully maintains possession of the
premises ("holds over") after the expiration
of the lease. The lessee is liable as a
trespasser; however, the lessor may, if he
chooses, hold the tenant to a new tenancy
merely by accepting rent (which creates a
tenancy from period-to period, continuing
until either lessor or lessee terminates it).
PROPERTY 16
Ownership

What is an "implied warranty of


habitability"?

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It is a covenant enlarging the duties of the
landlord under the residential leases in many
states; it requires that the premises be "livable."
The standard generally applied is embodied in
housing codes; where there is no housing code,
the Restatement of Property 2d suggests that
the test is whether the conditions make the
promises "unsafe or unhealthy" for the tenant.
NOTE: The covenant does not apply to
commercial leases.
NOTE: The implied warranty of habitability,
unlike the covenant of quiet enjoyment, does not
require that the tenant vacate the promises to
pursue a claim.
PROPERTY 17
Ownership

What is a "constructive eviction"?

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A constructive eviction arises when the tenant's
implied covenant of quiet enjoyment is breached.
In other words, if the landlord or his
representative makes the property uninhabitable,
by act or omission, the tenant may terminate the
lease and may perhaps seek damages.
TREND: The modern trend is to treat
nonperformance of a duty imposed by a
covenant in the lease, which results in making
the premises uninhabitable, as a constructive
eviction.
COMPARE: Actual eviction, in which the tenant
is dispossessed of all or most of the premises.
PROPERTY 18
Ownership

What notice is required to terminate a


tenancy from period-to-period?

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COMMON LAW: The amount of notice
required is the same as the period (i.e., if
the tenancy is week-to week a week's
notice is required; if it's month to month, a
month's notice is necessary). However, if
the period is a year or more, six months'
notice is required.
MODERN RULE: By statute, many states
require only thirty days' notice, regardless
of the period involved.
PROPERTY 19
Ownership

What is the "implied covenant of quiet


enjoyment"?

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It is a covenant; implied in every lease, which provides


that:
1. The tenant will not be ousted by any third party
with "paramount title" (superior title to the landlord); and
2. Landlord and his representatives will not interfere
with the tenant's use and enjoyment of the premises.
The tenant must leave the premises within a reasonable
time after the breach in order to preserve his claim,
otherwise it will be waived.
NOTE: This is not to be confused with the implied
warranty of habitability, which many states imply in
residential leases.
PROPERTY 20
Ownership

Constructive eviction normally requires an


act/omission by the landlord or his
representative, and no one else. There
are two principal exceptions to this. What
are they?

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1. Landlord has a duty to control common areas.
Thus, even if another tenant (and not the landlord
himself) creates an unendurable racket in common
areas, there's constructive eviction.
2. Landlord has a duty not to allow a nuisance.
Thus, renting to a crack dealer, who operates a crack
den on the premises, would make the landlord
accountable for the nuisance.
NOTE: Under the modern trend, if the landlord
covenants to be responsible for other tenant's conduct
(e.g., covenanting to evict noisy tenants), he'll be bound
to it. Also, some modern courts bind landlords when the
lease of the offending tenant allows eviction (e.g., if
offending tenant plays loud music all night and his lease
allows eviction for excessive noise, some states would
require the landlord to evict the offending tenant).
PROPERTY 21
Ownership

How much notice is necessary to terminate


an "estate for years"?

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None. Because an "estate for years"


requires a fixed beginning and ending
date, no notice to terminate is necessary.
PROPERTY 22
Ownership

Why is it important to distinguish between


"actual" and "constructive" eviction?

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Because of tenant's remedies.


ACTUAL EVICTION: If there has been an "actual
eviction" - tenant is dispossessed of most or all of the
leasehold - he can terminate the lease, refusing to pay
further rent. Most courts allow termination even if the
tenant remains on part of the leasehold.
CONSTRUCTIVE EVICTION: If the eviction is
"constructive" - landlord or his representative interferes
with the tenant's use and enjoyment of the premises - the
tenant can only terminate the lease if he abandons the
premises within a reasonable time. If he maintains
possession, he can only sue for damages.
PROPERTY 23
Ownership

What is an "assignment" of a lease?

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An assignment occurs when a tenant


transfers away the entire remainder of his
lease, in terms of both possession (the
entire premises), and duration. A sublease
is a transfer of less than the entire
remainder.
PROPERTY 24
Ownership

What is a "sublease"?

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It is tenant's transfer away of less than the entire estate left to him,
either in terms of possession (e.g., transferring half of the premises
for the rest of the lease term), or duration (e.g., transferring the
entire premises for a period shorter than the remainder of the lease).
COMPARE: An assignment, which occurs when a tenant transfers
away the entire remainder of his lease, in terms of both possession (the
entire premises), and duration.
SIGNIFICANCE OF DISTINCTION: A sublessee is not liable for
covenants running with the land; he can't sue or be sued by the
landlord. An assignee, on the other hand, is said to be in "privity of
estate" with the landlord, and so he can sue the landlord or be sued by
him.
NOTE: Even though a sublessee isn't liable under the lease to the
landlord, he can still be liable in tort for any damage he does to the
premier.
DISTINGUISHING ASSIGNMENTS AND SUBLEASES: See if the
tenant has anything left. If he does, it's a sublease; if not, it's an
assignment. Remember this by remembering that "sub" means
"less:' so the sublessee gets less than the entire remainder of the
lease.
PROPERTY 25
Ownership

How does the exercise of eminent domain


effect a lease?

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It depends on how much of the leasehold the
government takes, and for how long.
1. Whole property, forever: Lease is extinguished.
(Tenant is entitled to compensation; see below.)
2. Whole property, temporary: Lease continues at full
rent. (Tenant gets money from government for value of
occupancy.)
3. Part of property, forever: Lease continues at full rent to
landlord, (Tenant will receive some compensation from
government.)
COMPENSATION: Tenant gets fair rental value of
unexpired term of the lease, less rent he would have paid
pursuant to the lease. Landlord gets everything else.
This means the tenant only gets paid if his lease was
less than the fair rental value for the rest of the lease,
Also, the tenant can recover for other damages, like
relocation costs.
PROPERTY 26
Ownership

What's the difference between


abandonment of a lease and its surrender?

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Abandonment is just what it sounds
like - tenant leaves the premises and stops
paying rent. The lease does not cease
due to abandonment.
A surrender, on the other hand, is a
formal conveyance, requiring a writing,
which does terminate the lease.
Furthermore, the landlord must
accept the surrender for it to be valid. (A
surrender may also operate by law, without
these requirements.)
PROPERTY 1
Rights in Land

What is the right to "lateral support"?

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It is the landowner's property right to have


his land be supported, in its natural
condition, by adjacent land. Thus,
adjoining landowners cannot excavate or
mine in such a way as to diminish support
for property in its natural state.
PROPERTY 2
Rights in Land

What is "riparian land"?

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Riparian land is:
1. A continuous tract of land;
2. Under one ownership;
3. Which touches upon a watercourse or
lake.
Ownership of riparian land entitles the owner to
reasonable use of the water, which is popular
today under the "riparian rights" theory of water
rights (as opposed to the "prior appropriations"
theory of water rights, followed in a minority of
states). Domestic use is favored over
commercial use.
PROPERTY 3
Rights in Land

What is the "natural flow" theory of riparian


rights?

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The "natural flow" theory holds that riparian land
owners may use the water but must leave it
substantially in its natural state; in other words,
no riparian land owner may interfere with the
"natural flow" of the water. The rights of all
riparian land owners are considered equal, and
no owner can alter the quantity or quality of the
water. Furthermore, the water can only be used
for riparian lands.
NOTE: This theory has been substantially
replaced by the "reasonable use" theory of
riparian rights, and the riparian rights theory itself
has a counterpart, the "prior appropriations"
doctrine of water rights.
PROPERTY 4
Rights in Land

How does the "reasonable use" theory of


riparian rights differ from the "natural flow"
theory?

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REASONABLE USE THEORY (most popular
today):
1. The riparian owner may use water as he
desires,
2. Without unreasonably interfering with the
water rights of other riparian landowners.
3. Water is usable on riparian and
non-riparian land.
4. For liability to attach, the claimant must
show unreasonable use and damages.
PROPERTY 5
Rights in Land

How does the "reasonable use" theory of


riparian rights differ from the "natural flow"
theory?

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"NATURAL FLOW" THEORY (older, common law
theory):
1. The riparian landowner must leave the water in its
natural state;
2. Cannot unreasonably diminish its quantity or
quality;
3. Water can only be used on riparian land.
4. For a claim to succeed, the claimant need only
show material alteration in the water's quantity or
quality; he needn't show damages.
NOTE: The riparian rights doctrine itself is recognized by
most states; a few states follow the "prior appropriations"
doctrine.
PROPERTY 6
Rights in Land

What is "trespass to land"?

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It is:
1. The intentional and substantial
Interference,
2. With a right of Possession in land,
3. By a tangible, Physical object.
MNEMONIC: PIP (Physical Interference
with Possession.
PROPERTY 7

Rights in Land

What's a "private nuisance"?

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It is conduct by defendant which creates an unreasonable,
substantial interference with plaintiff's use or enjoyment of property. It is
considered personal to the plaintiff.
NATURE OF CONDUCT REQUIRED: It must be either intentional and
unreasonable (unreasonability is determined by a balancing test) (the
most common type), or negligent, reckless, or unusually hazardous.
EXAMPLES: Loud noise, noxious odors.
DAMAGES RECOVERABLE; All harm resulting proximately from the
nuisance, both personal (including diseases caught from inhaling fumes,
for instance) and property.
INTEREST PROTECTED: Right to use and enjoy one's land.
NOTE: Plaintiff need not own the property affected, but he must be an
occupant of it (i.e., a tenant).
DISTINGUISH: PUBLIC NUISANCE: Look at the scope of the injury,
which is wider for public nuisance. A public nuisance affects the
community at large through an act or condition which unreasonably
interferes with the health, safety, or convenience of the general
public, e.g., blocking a public highway, operating a brothel.
PROPERTY 8
Rights in Land

What's the difference between a "trespass"


and a "private nuisance"?

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Physical invasion. Since trespass requires interference
with a landholder's exclusive possession, there must be
a physical invasion (e.g., building an overhang over
plaintiff's property, sending one's child onto plaintiff's
property after a request not to). On the other hand,
private nuisance is interference with plaintiff's use and
enjoyment of his land, regardless of physical invasion.
Thus, strong lights, excessive noise, or foul odors can
constitute private nuisance, but not trespass.
NOTE: The same conduct can constitute both a trespass
and a private nuisance, e.g., air pollution.
DISTINGUISH: PRIVATE NUISANCE AND INVERSE
CONDEMNATION. Look at the gravity of the intrusion.
Inverse condemnation = taking of property by an actual
interference with property rights, without actually entering
the property. Private nuisance mere interference.
PROPERTY 9
Rights in Land

Can one act constitute both a trespass and


private nuisance?

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Yes - it can tangibly, physically interfere


with the use of property (trespass), and it
can disturb the property owner's use and
enjoyment of his property (nuisance).
PROPERTY 10
Rights in Land

What is the balancing test used to


determine whether, in a private nuisance
suit, defendant's use of his property is
"unreasonable"?

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The burden on plaintiff's enjoyment and


use of his land vs. the utility and necessity
of defendant's use.
PROPERTY 11
Rights in Land

What's the appropriate remedy in a claim


of private nuisance?

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Plaintiff's choice: If he wants damages, he


can sue at law; if he wants an injunction,
he should sue in equity.
PROPERTY 12
Rights in Land

What is a "fixture"?

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A fixture is a chattel which has been annexed (attached)
to land in such a way as to be regarded as real property.
As such, it passes with ownership of the land (barring an
agreement otherwise). Its requirements are:
1. Annexation to realty (e.g., heating system
installed = fixture). Note that if an item cannot be
removed without damaging the property, it's a fixture;
2. Appropriate to the use of the realty to which it is
connected (the more appropriate, the more likely it's a
fixture);
3. Intent to make a permanent accession, viewed
objectively. Look for any agreement, oral or written; also,
annexor's estate in land (owner is more likely to intend a
permanent accession than a mere lessee).
MNEMONIC: ARIA (Annexed to Realty; Intended;
Appropriate)
PROPERTY 13
Rights in Land

Under the modern (American) rule, what


single factor tends to determine whether
something is a fixture or not?

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Annexor's intention, viewed objectively. Factors like


annexor's estate in the land, and any agreement
concerning the status of the object should be examined
(a tenant is less likely to intend a permanent annexation
than an owner; furthermore, an agreement, oral or
written, concerning the status of the item will control).
However, an item incapable of removal without
damaging the property (i.e., a heating system), is a
fixture incapable of severance.
OLD ENGLISH DEFINITION: A fixture was anything
attached to realty by screw, bolt, nail, or mortar, except
chattels used in the annexor's trade or business, which
did not become fixtures regardless of their annexation.
PROPERTY 14
Rights in Land

What is an "easement"?

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It is a non-possessory interest in land, such that one has


the right to use another's land. Thus, look for easements
whenever someone has the right to enter someone else's
land; if the right is a restriction on someone else's use,
it's more likely that there's a covenant or equitable
servitude issue (although in very limited circumstances,
an easement can be a restriction on use; such
easements are called "negative easements"). Closely
related to an easement is a right called a "profit." Profits
are generally lumped under the "easement" definition,
because for most practical purposes they are treated the
same way; however, strictly speaking, a "profit" is the
right to enter another's land and remove something from
it (e.g., minerals, water, wood), rather than the right to
use another's land (most commonly through a
right-of-way).
PROPERTY 15
Rights in Land

What are the five ways in which


easements may be created?

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1. Reservation
2. Implication
3. Prescription
4. Expressly (Will, Deed, Grant or
Reservation)
5. Necessity
MNEMONIC: RIPEN
PROPERTY 16
Rights in Land

There are two general classifications of


easements. What are they?

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1. Vast majority of easements are affirmative
easements: One is allowed to use the "servient estate."
Remember: I CAN USE YOURS.
2. Negative easements: One can restrict the use of
another piece of land, the "servient estate." Remember,
YOU CAN'T USE YOURS. Negative easements are very
rare, and generally limited to four traditional types:
easements for air, light, subjacent or lateral support, or
flow of an artificial stream. Keep in mind that negative
easements cannot be created by prescription; that is, just
having access to air, light, and the rest, for the
prescriptive period, doesn't create an easement.
NOTE: Negative easements are very limited because
such restrictions can be classified as equitable
servitudes, so there's no reason to expand the scope of
negative easements.
PROPERTY 17
Rights in Land

What is an "easement appurtenant"?

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An "easement appurtenant" is an easement
granted to an individual only in his status as
possessor of a certain piece of land. The
easement is useful to the individual only
because he possesses that particular piece of
land. The parcel of land possessed by the
individual who holds the easement is known as
the "dominant tenement/estate"; the piece of
land "burdened" by the easement is known as
the "servient tenement/estate". You can easily
recognize an easement appurtenant, as
opposed to an easement in gross, because an
easement appurtenant must involve at least two
pieces of land; an easement in gross involves
only one, the "burdened" or servient estate.
PROPERTY 18
Rights in Land

What is an "easement in gross"?

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An "easement in gross" benefits an individual or
business, as opposed to the owner of a specific
piece of land. The most common type of
easement in gross is that of public utilities. (The
opposite number, an "easement appurtenant,"
benefits a specific piece of land). An easement in
gross is distinguished from an easement
appurtenant in that it involves only one piece of
land, a servient estate; an easement
appurtenant must involve at least two pieces of
land, a dominant and servient estate.
PROPERTY 19
Rights in Land

Are most easements considered


"easements appurtenant” or "easements in
gross"?

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Most easements are characterized as


appurtenant easements - an easement
that is specific to a piece of land (e.g.,
rights-of-way).
PROPERTY 20
Rights in Land

Why does it matter whether an easement


is characterized as an "easement
appurtenant" or an "easement in gross"?

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Conveyancing. An easement appurtenant is
considered part of the dominant estate; when the
ownership of the estate is transferred, the
easement is, too, either explicitly or implicitly.An
easement in gross, on the other hand, cannot be
conveyed unless the grantor of the easement
expressly permits it. This is the traditional rule.
However, according to modern courts,
commercial easements in gross (those granted
for business reasons) are freely alienable barring
an expressed intent otherwise.
Note that, however, conveying the servient
tenement automatically conveys the easement,
either express or implied.
PROPERTY 21
Rights in Land

REMEMBERING "DOMINANT" AND


"SERVIENT" TENEMENTS.

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A "dominant tenement/estate" is a parcel of land
possessed by an individual who enjoys an "easement
appurtenant" over a "servient estate" (the land burdened
by the easement). The most common kind of easement
appurtenant is a right-of-way.
For this image, you have to know that "serviette" is an
English word for table napkin.
Mental picture: Imagine a vast field, stretching across the
horizon. The left half is entirely covered with dominos
(the "dominant estate"). The right half is covered with
billowy yellow "serviettes" (the "servient estate").
Imagine a raised path, like St. Louis' Gateway to the
West, rising over the napkins, in gleaming steel. An
endless procession of cats is walking from the "domino"
side, over the pathway, purring (Purr: appurtenant).
PROPERTY 22
Rights in Land

What are the requirements for an implied


easement?

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1. The two pieces of land must have been
under common ownership before severance;
2. Use of one part of the land by another part
must have been apparent;
3. And continuous;
4. The use must be reasonably necessary
for enjoyment of dominant estate.
MNEMONIC: COCAiNE: (Common Ownership;
Continuous; Apparent; Necessary)
PROPERTY 23
Rights in Land

What are the requirements of a


"prescriptive easement" (also known as an
"easement by prescription")?

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An easement by prescription requires use of
another's property that is similar to adverse
possession:
1. Actual;
2. Open and notorious;
3. Continuous (during statutory period; at
common law, 20 years);
5. Exclusive; (not as a member of the general
public does not mean owner is excluded);
and
5. Hostile and adverse (non-permissive).
PROPERTY 24
Rights in Land

An easement by prescription - the right to


use land under certain conditions - has a
counterpart in the ownership of land. What
is it?

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Adverse possession. The requirements for the


two are the same, requiring actual, open and
notorious, continuous, and adverse use
(prescriptive easement), or possession (adverse
possession), for the statutory period (at common
law, 20 years). Note that it's the exclusively that
distinguishes the two - for an easement by
prescription, the owner need not be excluded, it's
just that the use cannot be as a member of the
general public; for adverse possession, the
adverse possessor must treat the land as his
own.
PROPERTY 25
Rights in Land

What are the seven general ways an


easement can be terminated?

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There are 7 ways to extinguish an easement: SURE NAP:

S– Stated condition

U– Unity of ownership

R– Release

E– Estoppel

N– Necessity

A– Abandonment

P– Prescription
PROPERTY 26
Rights in Land

What is a "profit"?

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It is an affirmative, non-possessory interest in
land, permitting the holder to take something
from another's land (typically minerals, water,
gravel, game, fish, or wood). It is considered a
property right protected by the Due Process
Clause, so that if the servient estate is taken by
eminent domain, the profit holder will be entitled
to compensation. Unlike an easement, if a
surcharge occurs, i.e., excessive use, a profit is
terminated, whereas an easement is not. The
appropriate remedy is an injunction and/or
money damages.
PROPERTY 27
Rights in Land

What's the difference between an


"easement" and a "profit"?

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An easement allows the holder to use another's
land; a profit, on the other hand, gives one the
right to take something from the land. However,
profits are the same as easements for the
purpose of creation (except there cannot be an
implied profit or a profit by necessity),
alienability, and termination. They are both
considered property rights protected by the Due
Process Clause, so that if the servient estate is
taken by eminent domain, the profit or easement
holder will be entitled to compensation.
PROPERTY 28
Rights in Land

What is a "license"?

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It is a personal privilege to enter upon the
licensor's land. It is not considered an interest in
land (thus, it need not be in writing), and it is
normally revocable. In two principal situations,
however, licenses are irrevocable:
1. LICENSE COUPLED WITH INTEREST-.
One's license is based on owning personal
property, on the land of another, and the license
is incidental to owning the personal property;
2. "EXECUTED" LICENSE: The licensee has
detrimentally relied on the grant of a license by
investing in the property such that termination of
the license would be inequitable.
PROPERTY 29
Rights in Land

What's the difference between an


"easement" and a "license"?

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It's not always easy to tell, except that a
license is considered transitory, a personal
interest, generally revocable, and need not
be in writing, whereas an easement is an
interest in land, must comply with the
Statute of Frauds, and is generally
irrevocable. Furthermore, a license is not
alienable (unless the grantor specifically
provides otherwise); an easement is,
under certain circumstances. The key,
normally, is the intent of the parties.
PROPERTY 30
Rights in Land

What are the eight ways in which a license


may be extinguished?

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1. Express notice by the licensor;
2. Sale, lease or mortgage of the land by the
licensor;
3. Action of trespass against the licensee;
4. Death or insanity of either party;
5. Attempted assignment by the licensee;
6. Obstruction by the licensor;
7. Expiration of the time period set for the
license; and
8. Abandonment by the licensee.
MNEMONIC: DAN TOAST (Death; Assignment;
Notice; Trespass; Obstruction; Abandonment;
Sale; Time)
PROPERTY 31
Rights in Land

What is a "covenant running with the


land"?

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31

A "covenant running with the land", or a


"real covenant", as it is sometimes called,
is a promise related to land which is
enforceable by subsequent holders of the
land. In other words, the rights and duties
of the covenant "run with" the land, not the
parties.
PROPERTY 32
Rights in Land

What are the requirements of a covenant


running with the land?

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32

In terms of its creation, it must comply with the Statute of Frauds (i.e.,
it must be in writing). Beyond that, you have to look at the burden and
the benefit separately. They both require that:
1. The parties must have intended that the agreement would run with
the land;
2. The agreement must "touch and concern" the land;
3. There must be privity of estate between the parties (the degree of
which is different, depending on whether a benefit or a burden is
involved).
However, the burden, and not the benefit, has one additional
requirement.
4. Notice (the prospective buyer of the burdened land must have
notice, before buying, of the burden (notice can be actual,
constructive, or inquiry)).
MNEMONIC: SPIN CAT (Statute of Frauds; Privity; Intended; Notice;
Concern And Touch)
PROPERTY 33
Rights in Land

Under what circumstances does a


covenant "touch and concern" the land?

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It depends on whether you're talking about the benefit or


the burden. For a burden to "touch and concern" the
land, the covenant must reduce the land's use or value to
the burdened property owner. For the benefit to "touch
and concern" the land, it must improve the use or value
of the benefited land.
NOTE: If a burden or a benefit does not touch and
concern the land, it is called "in gross."
SIGNIFICANCE: A burden or benefit must "touch and
concern" the land in order to run with the land. However,
they're treated differently if their opposite number is "in
gross"; a benefit will run if the burden is "In gross:' but
the burden won't run if the benefit is "in gross."
PROPERTY 34
Rights in Land

COVENANTS, EQUITABLE
SERVITUDES, AND IMPLIED
RECIPROCAL SERVITUDES: HOW
THEY FIT TOGETHER.

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34
Whenever you're talking about these concepts, what
you're trying to determine is whether someone can be
bound to a property oriented agreement that he didn't
personally enter (or whether he can take advantage of
such an agreement). The strictest one of the three is a
"real" covenant, since it requires a writing, intent, "touch
and concern:' notice, and privity of estate. If the privity
requirement is missing, and/or the remedy sought is an
injunction instead of damages, then you're looking at an
equitable servitude problem. It requires a writing, intent,
"touch and concern," and notice. Thus, the big difference
between an equitable servitude and a real covenant is
that no privity is required for an equitable servitude (so,
for instance, it could be enforced against an adverse
possessor).
PROPERTY 35
Rights in Land

COVENANTS, EQUITABLE
SERVITUDES, AND IMPLIED
RECIPROCAL SERVITUDES: HOW
THEY FIT TOGETHER.

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35
An implied reciprocal servitude is just a special
"subcategory" of equitable servitudes that only
comes up in building restrictions in subdivisions.
If the developer had a common plan for the
subdivision from the beginning (i.e., a building
restriction), he assured earlier grantees that later
grantees would face the same restriction (e.g.,
no commercial buildings), and there's notice of
the restriction to later prospective buyers, they're
bound to the restriction. Look for implied
reciprocal servitudes only in these
circumstances: a building restriction in a
subdivision.
PROPERTY 36
Rights in Land

What is "horizontal privity"?

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It concerns the relationship between the original
promisor and promisee in a covenant. It is
required for both benefit and burden to run, in
most states. Most states maintain that
"Grantor/Grantee Privity" - the covenant
accompanies conveyance of the burdened
land - provides sufficient "horizontal privity" to
justify that the covenant "run with" the land. (In
other words, the promisor and promisee cannot
be "strangers to each other's title," i.e., merely
neighbors.)
PROPERTY 37
Rights in Land

What is "vertical privity"?

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It concerns the relationship between each of the
original covenanting parties and their successors
in interest. For the burden in a covenant to run
from a promisor to his successors, "vertical
privity" requires that the entire estate (e.g.,
assignment of lease from a tenant, sale by a fee
owner, but not sublease or life estate) be
conveyed. For the benefit to run, the
requirements are less strict: "vertical privity" will
exist as long as the successor acquires a legal
interest in the land and takes possession (e.g., a
life estate from a fee owner does quality).
PROPERTY 38
Rights in Land

What is an "equitable servitude"?

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38
An equitable servitude is a promise by the holder of a piece of land
to conduct a stated activity on or make a stated use of his property
(or a promise not to do so), which is binding on his successors. An
equitable servitude starts out as a mere promise by the land holder;
however, if the promise satisfies the Statute of Frauds (i.e., it's in
writing), and it meets three requirements - "touch and concern,"
intent, and notice - it will be binding on successors to the promisor
(the one whose land is burdened by the promise). It is considered
an interest in land.
NOTE: Like a real covenant, equitable servitudes only become an
issue when you're looking at successors in interest to the original
covenanting parties. The original parties are bound to the
agreement under regular contract law.
NOTE: An equitable servitude is very similar to a real covenant, but
its requirements are less stringent; it doesn't require privity. Also,
the remedy is different; breach of an equitable servitude results in an
injunction or specific performance, since those are equitable
remedies. Breach of a real covenant results in liability at law, namely
damages.
PROPERTY 39
Rights in Land

What are the requirements for an equitable


servitude to bind subsequent purchasers?

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1. Notice, whether actual, constructive/record or


inquiry/implied;
2. Intent that it binds subsequent purchasers (can be express
["and his successors"], but is more often implied from surrounding
circumstances);
3. Benefit and burden both must "touch and concern" the land
(i.e., neither can be "in gross").
4. Statute of Frauds must be satisfied.
NOTE: To be created, but not to run, an equitable servitude requires a
writing complying with the Statute of Frauds. To run, only notice is
required. Note that if there's no writing at all and the problem
involves a building restriction in a subdivision, the restriction may be
enforceable as an implied reciprocal servitude, since that doesn't
require a writing.
MNEMONIC: TINS (Touch, Intent, Notice, Statute of Frauds).
PROPERTY 40
Rights in Land

There are three types of notice that satisfy


the "notice" requirement of an equitable
servitude. What are they?

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40
1. Constructive or record
notice - covenant appears in grantee's
"chain of title;"
2. Inquiry/Implied notice - physical
appearance of neighborhood suggests
common plan or restriction;
3. Actual notice - knowledge of
covenant in current or prior deeds with
same restrictions.
Mnemonic: CIA
PROPERTY 1
Real Property Contract

In order to be valid, what elements must


appear in a contract for the sale of land?

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As a threshold matter, remember that since a land sale contract is a
contract, it must meet all of the typical contract requirements (e.g.,
mutuality, consideration), and since it's for an interest in land, it must
comply with the Statute of Frauds (i.e., it must be in writing, unless it fits
an exception like part performance). As to content, it must contain
"essential terms,"including:
1. Names of parties (grantor and grantee);
2. Price;
3. Terms and conditions (e.g., price, financing, and manner of
payment [if agreed upon]);
4. Description of land;
5. Signature (of the "party to be charged” viz. the party against
whom the contract is sought to be enforced).
MNEMONIC: Peter Piper Took Some Drugs (Parties; Price; Terms;
Signatures; Description)
N.B.: Remember that a conveyance only requires a valid deed and
delivery; however, a land sale contract is almost always used when
the conveyance involves a sale (rather than a gift) of real property.
PROPERTY 2
Real Property Contract

Must a written contract for the sale of land


(or an interest therein) be signed by both
parties to the sale?

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No. The Statute of Frauds is satisfied by a
written memorandum signed by only the
party to be charged (that is, the party
against whom the contract is sought to be
enforced).
NOTE: A deed, on the other hand, need
only be signed by the grantor. The grantee
is bound by the terms of the deed through
acceptance of the deed and all of the
terms of the land sale contract are merged
into the deed.
PROPERTY 3
Real Property Contract

"Partial performance" removes a contract


from the Statute of Frauds - i.e., if a
contract is partially performed, it need not
be in writing to be enforceable. What
kinds of things constitute "partial
performance:' where the contract involves
the sale of land?
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3

Although the requirements vary from state to state, as a general rule


partial performance requires that the grantee possess the property as
well as either making payment for the property or making
improvements to it.
NOTE: Most courts also require proof of "unequivocal referability,"
viz. party seeking to enforce the contract must prove that the actions
undertaken were clearly in response to an oral contract and not
explainable otherwise.
NOTE: Cases seeking specific performance of an oral land sale
contract are normally brought by the buyer, not the seller. However,
if the buyer partially performs the contract, most modern courts
would allow a seller to enforce the land sale contract, on grounds
that a seller ought to be entitled to the same recovery as a buyer
(this is known as "mutuality of remedies"). (Note that the seller's
performance, in the form of executing a dead in the grantee's favor,
wouldn't by itself constitute "part performance" necessary to enforce
an oral land sale contract.) Older cases didn't allow the seller to
enforce an oral land sale contract due to partial performance.
PROPERTY 4
Real Property Contract

In order to be valid, what elements must


appear in a written deed?

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1. Grantor's signature;
2. Parties;
3. Description of property;
4. Interest conveyed (e.g., fee, lease);
5. Intent to transfer;
6. Acknowledgements (for recording
purposes only, not necessary to bind the
parties).
MNEMONIC: PIG AID (Parties; Interest; Grantor
signature; Acknowledgements; Intent;
Description)
PROPERTY 5
Real Property Contract

What remedies are appropriate for breach


of a land sale contract?

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Whether the breach is by buyer or seller, the possible remedies are: 1.


Rescission (rescind the contract; if the seller breaches, the buyer is
entitled to return of a down payment or deposit).
2. Damages for contract breach (buyer's damages = market
price at closing less contract price; seller's damages = contract price
less market price at closing; if difference is zero or negative,
wronged party gets nominal (e.g., $1) damages);
3. Specific performance (since land is unique, the wronged
party can seek, the equitable remedy of enforcement of the contract;
however, equitable defenses apply. e.g., if enforcement would cause
undue hardship on the wrongdoer, the contract won't be enforced). If the
contract can't be enforced - e.g., there's an easement across property
that the seller can't remove - the buyer can seek enforcement with an
abatement (reduction in contract price) to reflect the defect.
PROPERTY 6
Real Property Contract

What is "marketable title"?

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It is title which, viewed objectively, is free from reasonable doubt, and
which the reasonable buyer would accept without fear of
litigation.
SIGNIFICANCE: The conveyance of marketable title is an implied
covenant in land sale contracts; it is implied unless the contract
expressly provides for something other than marketable title (e.g.,
title insurable by a title insurance company). Note, however, that
even when marketable title is implied in a land sale contract, the
terms of the deed will control once the deed is conveyed, under the
doctrine of merger. This is a very easy item to test. Thus, for
instance, if a quitclaim deed is conveyed, there will be no obligation
to provide marketable title (since a quitclaim deed is free of express
or implied covenants).
REMEDIES FOR UNMARKETABLE TITLE: Buyer may rescind the
contract (and recover any money already paid), damages for breach of
con-tract (market value minus contract price, unless the seller acts in
good faith (i.e., doesn't intentionally breach the contract), in which case
halt the states limit the buyer to out of pocket expenses), or
specific performance of the contract with an abatement (reduction) of
the contract price due to the defect.
PROPERTY 7
Real Property Contract

What is a "bona fide purchaser"?

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It is a:
1. Subsequent purchaser;
2. Who pays value;
3. Without notice of any prior
conveyance;
4. and is of good faith.
PROPERTY 1
Titles

What are the elements necessary to


acquire title by adverse possession?

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Possession must be:
1. Hostile;
2. Exclusive;
3. Lasting for the statutory period (at
common law, 20 years);
4. Uninterrupted for the period;
5. Visible;
6. Actual.
MNEMONIC: HELUVA
PROPERTY 2
Titles

What is a "general warranty deed"?

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It is a deed which usually contains all six basic


covenants of title SEC FEW: Seisin,
Encumbrances; right to Convey; Further
assurances; Enjoyment; and Warranty of title
There are three "present" covenants in a general warranty deed with full
covenants. Under the covenant of seisin, the grantor warrants ownership of
the estate that she purports to convey and that she can deliver the right to
possession. The covenant of the right to convey usually overlaps with the
covenant of seisin. The grantor warrants that she has authority to convey the
estate, either because she holds title or because she is authorized as an agent of
the owner. Finally, by the covenant against encumbrances, the grantor war-
rants that the title is free of encumbrances both visible (easements, restrictive
covenants) and invisible (mortgages, liens).

There are two principal "future" covenants in the general warranty deed with
full covenants. Under the covenant of quiet enjoyment, the grantor promises
that the grantee will not be disturbed in her enjoyment of the property by
anyone with a lawful claim. Alternatively, in some jurisdictions, this identical
assurance is given through the covenant of warranty under which the grantor
promises to defend grantee against lawful claims to title and to redress any loss
incurred. Finally, the grantor provides a covenant of further assurances. Here,
the grantor promises to execute any necessary documents to perfect title.
PROPERTY 3
Titles

What are the three major types of


recording statutes?

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They are:
1. Race;
2. Notice; and
3. Race/Notice.

Note: Pure "race" recording statutes are


very rare; most states have one of the
other two types.
PROPERTY 4
Titles

What is a "notice" recording statute?

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It provides that no subsequent bona fide
purchaser is bound by an unrecorded prior
conveyance. Thus, if a property is
conveyed to two different individuals,
neither of whom records his conveyance,
the second purchaser will have title from
the moment the property is conveyed to
him.
COMPARE: Unlike a "race-notice" statute,
which does not protect a bona fide
purchaser until he records.
PROPERTY 5
Titles

What is a "race notice" recording statute?

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It provides that no subsequent bona fide
purchaser is bound by a prior conveyance
as long as he records first. Thus, the bona
fide purchaser's priority is not established
at the time of his conveyance, only when
and if he is the first to record.
COMPARE: Under a pure "notice" statute,
the subsequent bona fide purchaser is
protected from the moment of the
conveyance.
PROPERTY 6
Titles

What is a "race" recording statute?

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It provides that the first instrument to be


recorded has priority, regardless of notice,
good faith, or any other considerations.
Very few jurisdictions have pure race
statutes today, due to the potential for
inequity.
PROPERTY 7
Titles

What's the main difference between a


"race-notice" and a pure "race" recording
statute?

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Race-notice statutes require a bona fide


purchaser. A good faith subsequent
purchaser, who pays value, without notice
of any prior conveyance. Pure race
statutes do not require a bona fide
purchaser - so priority is determined,
literally, by who wins the "race" to the
recorder's office.
PROPERTY 8
Titles

What is the intent of the recording


statutes?

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To protect subsequent purchasers of interests in
land from earlier claimants of whom they are
unaware. Instead of going by the common law
rule "First in time, first in right," recording acts
sometimes void deeds of earlier grantees in
favor in later ones.
NOTE: Recording acts - at least the two most
common types, notice and race-notice - protect
only "bona fide" purchasers and encumbrances
(that is, those who pay value and take without
notice of prior conveyances, in good faith).
PROPERTY 1
Real Property Mortgages

What is a "mortgage?"

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1
It is an:
1. interest in land;
2. created by a written instrument;
3. which provides security;
4. for the payment of a debt or the
performance of a duty.
PROPERTY 2
Real Property Mortgages

How do you "redeem" a mortgage?

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2

You pay it off, including interest. This can


be done any time prior to a foreclosure
sale; it's known as an "equitable
redemption." “Statutory redemption”
occurs after foreclosure.
PROPERTY 3
Real Property Mortgages

What typically determines a mortgage's


"priority?"

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When it was placed on the property,


barring any recording problems or
agreements by the mortgagee which
subordinate the mortgage.
PROPERTY 4
Real Property Mortgages

What's the difference between "junior


interests" and "senior interests" in terms of
priority?

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Junior interests are encumbrances that
came about after the mortgage being
foreclosed; senior interests came about
before. When a mortgage is foreclosed,
junior interests are destroyed, and senior
interests are preserved (i.e., the buyer at
the foreclosure sale will have to satisfy the
senior interests at some point, or they can
foreclose. However, the senior interests
can only be satisfied by sale of the
property; the buyer isn't personally liable).
PROPERTY 5
Real Property Mortgages

What is a "purchase money mortgage"?

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It is a mortgage whereby the seller himself


does the financing. The buyer pays the
seller a down payment, receives the deed,
and gives the seller a mortgage to cover
the remainder of the purchase price.
NOTE: The typical mortgage is a "third
party mortgage," where a third party,
typically a bank, does the financing.
PROPERTY 6
Real Property Mortgages

What's the difference between a "purchase


money mortgage" and an "installment land
contract"?

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6

In a purchase money mortgage, the buyer


receives the deed to the property at the outset; in
an installment land contract, the buyer receives
the deed only after he's paid off all or most of the
purchase price. In terms of practical
ramifications, a purchase money mortgage must
be formally foreclosed in the event of default; an
installment land contract, on the other hand,
does not require judicial proceedings and in a
default it is forfeited. Obviously, a purchase
money mortgage is better for the buyer, and an
installment sales contract is better for the seller.
PROPERTY 7
Real Property Mortgages

What is the difference between transfer of


property “subject to” the mortgage and
“assumption” of the mortgage?

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If the owner/mortgagor sells the property to a third party and conveys a deed
(and assuming the mortgage was properly recorded), the grantee will take the
property subject to the mortgage. This means that the grantee has no
personal liability on the debt, but if the debtor fails to maintain payments
on the obligation, the property is subject to foreclosure by the mortgagee.

Alternatively, the grantee may agree to assume the mortgage. This means
that the grantee is now primarily liable on the obligation. The original mortgagor
will remain secondarily liable following an assumption, unless the parties agree
to a novation.
PROPERTY 1
Future Interests

What are the “non-freehold estates”?

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Those possessory interests we would call
leases:
1. Estate for years;
2. Tenancies from period-to-period (or
“periodic tenancies”);
3. Tenancies at will; and
4. Tenancies at sufferance.
PROPERTY 2
Future Interests

There are three types of “freehold” estates.


What are they?

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1. Fee Simple
2. Fee Tail
3. Life Estate
MNEMONIC: STALE (Simple; Tail; Life Estate)
SIGNIFICANCE: Non-freehold estates are terms
of years or leasehold estates. Holders and
non-freehold estates are not “seised” of the
land - they do not hold legal title - which
comes into play, for example, with the
destructibility of contingent remainders.
PROPERTY 3
Future Interests

Historically, what were the “magic words”


necessary to convey an estate in fee
simple absolute?

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“And his heirs.” Thus, a conveyance “to Ishmael
and his heirs” was required to give Ishmael’s
heirs ANY interest at all in the property.
NOTE: “to Ishmael,” which is all that would be
required to convey a fee simple estate today,
would, historically, only have given Ishmael a life
estate in the property, with a reversion in the
grantor/transferor. NO OTHER WORDING was
permissible - not even “to Ishmael in fee
simple!”
N.B.: The “magic words” were ONLY necessary
in INTER VIVOS transfers (conveyances) - at
common law, a BEQUEST “to Ishmael” WOULD
create a fee simple absolute!
PROPERTY 4
Future Interests

What is a future interest?

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4

It is the interest “left over” when a grantor


conveys away less than his entire estate
(e.g., life estate, fee tail, non-freehold
estate). The future interest is not presently
possessory but MAY become so.
PROPERTY 5
Future Interests

What are the five types of future interests


recognized by American law?

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5

1. Vested, and Contingent remainders;


2. Executory interests;
3. Reversion;
4. Possibility of Reverter; and
5. Right of Re-Entry/Power of Termination.
PROPERTY 6
Future Interests

What is the Rule Against Perpetuities?

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The Rule Against Perpetuities states, in
principal, that no interest is good unless it must
vest, if at all, not later than 21 years after one or
more lives in being at the creation of the interest.
Thus, if an interest is capable of vesting more
than 21 years after a life in being, it is void. The
Rule applies to both real and personal property,
and to the legal and equitable interests in them.
It does NOT apply to any interest in grantor -
reversions, possibilities of reverter, and powers
of termination; nor does it apply to vested
interests, like vested remainders, nor fee simple
estates. It applies only to contingent
remainders, executory interests, and powers of
appointment.
PROPERTY 7
Future Interests

To what general types of future interests


does the Rule Against Perpetuities apply?

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Contingent remainders and executory interests
are the most common ones - in other words,
interests that are vested. Note that options to
purchase land which are not connected to leases
for years, and powers of appointment, are also
subject to the Rule Against Perpetuities.
NOTE: Future interests in the grantor (reversion,
possibility of reverter and power of termination)
are not subject to the Rule (i.e., they can vest
“remotely”) - nor are vested remainders in
grantees.

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