MBE Real Property

Which of the following is not an essential term of a land sale contract under the Statute of Frauds? A An identification of the parties to the contract. B A closing date. C A description of the property. D A price and manner of payment, if agreed upon.

A closing date is not an essential term of a land sale contract under the Statute of Frauds. The closing is when the parties tender performance of the contract, i.e., exchange the purchase price and deed. Matters incidental to the contract (e.g., furnishing of deeds, prorating of taxes, title insurance) can be determined by custom, and a closing date will be construed to be within a reasonable time. They need not appear in the writing nor even have been agreed upon. The essential terms of a land sale contract under the Statute of Frauds are: 1. A description of the property; 2. An identification of the parties to the contract; and 3. A price and manner of payment, if agreed upon. The Statute also requires the contract to be in writing and signed by the party to be charged.

A person whose interest in land gives him the right to use someone else's land independent of his ownership or possession of his own tract holds: A An easement appurtenant B An easement in gross C A license D A servient tenement

A person whose interest in land gives him the right to use someone else's land independent of his ownership or possession of his own tract holds an easement in gross. An easement gives the holder the right to use a tract of land but no right to possess it. The land burdened by the easement right is called the servient tenement. An easement appurtenant, by contrast, benefits its holder in his physical use or enjoyment of his own tract of land. The land benefitted by the easement is called the dominant tenement. Unlike an easement, a license is not an interest in land, but is merely a privilege to go upon another's land.

Which of the following statements regarding specific performance of a land sale contract is true? A Both the buyer and the seller generally are entitled to specific performance B If the seller cannot convey marketable title, the buyer may not obtain specific performance C Specific performance is available only to the buyer D Specific performance is available only to the seller

Both the buyer and the seller generally are entitled to specific performance of a land sale contract. A court of equity will order a seller to convey title if the buyer tenders the purchase price. The remedy at law, damages, is deemed inadequate because land is unique. Courts also generally will award specific performance for the seller if the buyer is in breach, although a few courts will do so only if the property is especially unique (e.g., not if a developer is selling a house in a large subdivision of similar houses). The seller's ability to recover in equity is sometimes explained as necessary for mutuality of remedy. In either case, specific performance is NOT available only to the seller or only to the buyer. If the seller cannot convey marketable title, the buyer MAY obtain specific performance of the land sale contract with an abatement of the purchase price in an amount reflecting the title defect.

In order to prevail over a prior grantee under a race-notice statute, when must a subsequent bona fide purchaser record? A Before the prior grantee records. B A bona fide purchaser will prevail over a prior grantee under a race-notice statute without recording. C Before she learns of the prior grant. D Before she takes possession of the property.

In order to prevail over a prior grantee under a race-notice statute, a subsequent bona fide purchaser ("BFP") must record before the prior grantee records. A race-notice statute is a recording act that alters the common law rule of "first in time, first in right" to protect a subsequent BFP ( i.e., one who gives valuable consideration and lacks notice of the prior conveyance). However, to obviate questions about the time of delivery and to induce parties to record promptly, race-notice statutes only protect BFPs who are first to record. A subsequent BFP need not record before she learns of the prior grant. The notice requirement of BFP status is measured from the time of the subsequent grantee's receiving her conveyance. Thus, a BFP who lacked notice at the time of the conveyance, then learned of the prior interest, and then recorded, can still prevail over a prior interest—provided the BFP records before the prior grantee records. A subsequent BFP under a race-notice statute need not record before she takes possession of the property. Rather, she must record before a prior grantee records. The date that the subsequent BFP takes possession is immaterial for purposes of prevailing over a prior grantee. A bona fide purchaser will NOT prevail over a prior grantee under a race-notice statute without recording. A race-notice statute contains the recording requirement discussed above. By contrast, under a notice statute, a subsequent BFP need not record in order to prevail over a prior grantee who failed to record. A notice statute requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance. This is not the case under a race-notice statute.

A homeowner lived next door to a vacant lot owned by another neighbor. From the time the homeowner purchased his own property, he told other people that he owned the vacant lot. The homeowner had an underground dog fence installed under the vacant lot without the neighbor's knowledge. The homeowner also mowed the vacant lot regularly in the summer. When he had landscaping services performed on his own property, the landscapers dug up vegetation beds, which extended three feet into the neighbor's lot. After the statutory period for bringing a trespass action had passed, the homeowner brought an action to quiet title, claiming ownership of the vacant lot. Which of the following additional facts, if true, would be most helpful to the homeowner's case? A One of the people that the homeowner often told about owning the vacant lot was the neighbor herself. B The neighbor occasionally saw the homeowner's dog on the vacant lot, but never demanded that the homeowner keep the dog in the homeowner's yard. C The vegetation beds continued to exist with the same dimensions, and were regularly maintained by the homeowner, for the entire statutory period. D When he told people that he owned the vacant lot, the homeowner believed that it was true.

Telling the neighbor about owning the lot would be most helpful to the homeowner. Establishing title by adverse possession requires the possessor to show (i) actual and exclusive possession that is (ii) open and notorious, (iii) adverse, and (iv) continuous for the statutory period. Mowing the vacant lot regularly would be an act consistent with open and notorious possession. That along with the homeowner's communication of hostility--which means simply that the homeowner is possessing without the neighbor's permission--ought to establish open and notorious adverse possession. (B) is incorrect. The placement of the underground dog fence without the neighbor's knowledge means that the possession of the property is not open and notorious. That the homeowner's dog occasionally went over into the vacant lot does not result in open and notorious possession by the homeowner. (C) is incorrect, because constructive possession of part of a tract of land is sufficient to obtain title to the whole only if there is reasonable proportion between the part actually possessed and the whole of the tract. Landscaping that crosses over a few feet into the vacant lot is not likely to rise to the level of possession of the whole. (D) is incorrect, because the state of mind of the homeowner is irrelevant in determining whether the possession is hostile. The only consideration is whether he was actually in possession without the true owner's permission.

A landowner embarked on an expedition into a remote jungle, leaving no means to communicate with him. Because property values suddenly began plummeting in the landowner's neighborhood, his son believed that it was imperative to sell his father's property before it became worthless. Having no way to speak to his father ahead of time, the son prepared a deed conveying the property to a buyer, but left the line for the buyer's name blank. He then signed his father's name on it as the grantor, and handed the deed to the buyer. The deed, however, did not include any language regarding the amount the father was to receive in exchange for the property. The buyer believed that the son was the owner of the property. When the father returned, he was happy that the property had been sold. If the buyer changed his mind and now wishes to have the conveyance set aside, which of the following would be his best argument? A The deed was not valid because the rapidly declining property values amounted to extreme duress. B The deed was not valid because the buyer was not identified in the writing. C The deed was not valid because the consideration for the deed was not contained in the writing. D The deed was not valid because the son signed it.

The buyer's best argument would be that the deed is void because the son signed it. A valid deed requires a writing containing a description of the land and parties, words of intent, and the grantor's signature. Here, the signature on the deed was forged. A defective deed may be voidable, which means that it would be set aside only if the property had not been conveyed to a bona fide purchaser, or it could be void, meaning that the deed would be set aside regardless of the property having passed to a bona fide purchaser. Deeds obtained by means of, among other things, duress, undue influence, or mistake are considered voidable. Deeds that were forged, never delivered, or obtained by fraud in the factum are void. Here, although the father seems to have ratified the conveyance and the buyer was a bona fide purchaser, the deed is void because the signature was forged. (A) is incorrect. A deed obtained by duress would be merely voidable, and in any case, the pressure caused by rapidly dropping values is not the duress that is contemplated by the common law rule. Duress for voidability purposes means pressure that is brought by an individual or entity in order to procure the deed. (B) is incorrect. Although a deed must identify the parties, courts will presume that the person taking delivery is authorized to fill in the name of the grantee. In the absence of the son's forgery--i.e., if the landowner had executed and handed the deed to the buyer--all the buyer would have had to do was fill in his name and the deed would be valid. (C) is incorrect because a recitation of the consideration for the conveyance is not required to make a deed valid.

An investor owned an office building and an apartment building, which were connected to each other. There was no access to the second floor of the apartment building other than a common stairway located entirely within the office building. The investor conveyed the apartment building to a landlord. The landlord, her tenants, and their guests continued to use the common stairway. Subsequently, the investor conveyed the office building to an accounting firm. There was no mention of the stairway in the accounting firm's deed. Both the landlord's deed and the accounting firm's deed were properly recorded. A few years later, the stairway had become dilapidated. The landlord was concerned about the stairway's condition of disrepair, which she felt reduced the value of the apartment building and posed a risk of injury to her tenants and their guests using the stairs. The landlord approached the accounting firm about repairing the stairs, and even offered to pay for half the cost. The firm refused. After getting an estimate from a reputable construction company, the landlord told the accounting firm she was willing to pay the entire cost of fixing the stairs. The firm again refused. If the landlord files suit against the accounting firm, can she compel it to allow her to repair the stairs? A Yes, because the landlord has an easement, which implies the power to repair. B Yes, because the landlord may protect herself from the possibility of tort suits from her tenants and their guests. C No, because the landlord's interest in the stairs is only for the reasonable lifetime of the structure. D No, because the landlord has no right to enter the firm's property.

The landlord has a right to repair the stairs because she has an easement. An easement by implication is created by operation of law rather than by written instrument. It is an exception to the Statute of Frauds. An easement is implied if, prior to the time the property is divided, a use exists on the "servient part" that is reasonably necessary for the enjoyment of the "dominant part," and the parties intended the use to continue after division of the property. The use must be continuous and apparent at the time the property is divided. Reasonable necessity is determined by many factors, including the cost and difficulty of alternatives, and whether the price paid reflects the expected continued use. The use of the stairs was continuous, apparent, and reasonably necessary to the use of the apartment building when the investor conveyed it to the landlord. Although the facts do not give enough information to determine whether the accounting firm's purchase price reflected the continued use of the stairs, it seems clear that the alternatives would be very costly. Because there was no change in the use after the landlord bought the apartment building and the investor was still in possession of the office building, it appears that they intended the use to continue. Thus, the implied easement from existing use arose when the investor conveyed the apartment building to the landlord. The burden of that easement passes with the transfer of the servient tenement, the office building. The holder of an easement has a right, even a duty, to make repairs. Therefore, the landlord has a right to repair the stairs in the office building. (B) is wrong because no such right exists apart from the rights of an easement holder. Absent an easement, the landlord would not have any right to enter the accounting firm's property regardless of whether she would be subject to liability for injuries. (C) is wrong because easements are of perpetual duration, unless limited by the terms of a writing. Here there is no writing, so the landlord's easement is perpetual. (D) is wrong because, as explained above, the landlord has an easement implied from existing use. An easement gives the landlord the right to enter the acounting firm's property.

A landowner conveyed his land to his wife, son, and daughter "as joint tenants with right of survivorship." The daughter then conveyed her interest to a friend. The wife subsequently executed a will devising her interest to the daughter. Then the son mortgaged his interest to a lender, who promptly and properly recorded the mortgage. The wife died, then the daughter's friend died, leaving a will that bequeathed her entire estate to the daughter. The daughter and the son survived. If the jurisdiction follows the title theory, who owns what interest in the land? A The lender owns the fee simple. B The lender and the daughter own unequal shares as tenants in common. C The son and the daughter own unequal shares as tenants in common. D The son and the daughter own equal shares as joint tenants.

The lender and the daughter own unequal shares as tenants in common. Creation of a joint tenancy requires four unities: (i) time (interests must vest at the same time); (ii) title (interests must be acquired by the same instrument); (iii) interest (interests must be of the same type and duration); and (iv) possession (interests must give identical rights to enjoyment). When property is held in joint tenancy by three or more joint tenants, a conveyance by one of them destroys the joint tenancy only as to the conveyor's interest. The other joint tenants continue to hold in joint tenancy as between themselves, while the grantee holds her interest as a tenant in common with them, because she does not share the unities of time or title with the joint tenants (i.e., her interest vested at a different time and was acquired by a different instrument). Here, the wife, the son, and the daughter owned the property as joint tenants. When the daughter conveyed her interest to the friend, the joint tenancy was severed as to the daughter's interest. At that point, the wife and the son each held one-third interests as joint tenants because, as between themselves, the four unities were preserved. The friend did not share the unities of time or title with the wife and the son. Thus, the friend took a one-third interest as a tenant in common rather than as a joint tenant. Because this jurisdiction follows the title theory, the son's mortgage also severed the joint tenancy. The minority of states following the title theory regard a mortgage as an actual transfer of title to the property. Thus, a mortgage by one joint tenant transfers the legal title of the joint tenant to the mortgagee (the lender). This action destroys the unity of title and severs the joint tenancy. On the other hand, in a lien theory state (majority), a mortgage is considered a lien on title--one joint tenant's execution of a mortgage on his interest does not, by itself, sever a joint tenancy until default and foreclosure proceedings have been completed. Here, when the son executed the mortgage, title was transferred to the lender, severing the joint tenancy again. At that point, the wife, the lender, and the friend each held one-third interests as tenants in common because each interest was acquired at a different time and by a different title. An interest in a tenancy in common is freely alienable by inter vivos and testamentary transfer, is inheritable, and is subject to claims of the tenant's creditors. The only "unity" involved is possession: Each tenant is entitled to possession of the whole estate. Thus, when the wife died, her interest passed under her will to the daughter. Likewise, when the friend died, her interest passed to the daughter. Thus, the lender holds a one-third interest as a tenant in common with the daughter, who holds the remaining two-thirds interest. (A) is incorrect because the daughter also has an interest in the property (see above). When one joint tenant dies, the right of survivorship operates to free the property of her interest; the surviving joint tenants retain an undivided right in the property. Although a will is inoperative as to joint tenancy property because the decedent's rights in the property evaporate at the instant of death , a will may effectively dispose of an interest held in a tenancy in common, as discussed above. Here, although the wife executed her will while the property was still held in joint tenancy, a will is ambulatory (effective only at death), and at her death the wife held her interest as a tenant in common. Thus, it passed to the daughter under the will. (C) and (D) are incorrect because, as explained above, the son has no interest.

A landowner owned a large tract of land containing numerous coal mines. To finance the renovation of some of the buildings on the land, the landowner obtained a $50,000 mortgage from a bank. Shortly thereafter, the landowner conveyed the surface of the land to his sister and the mineral rights to a utility company. The bank recorded its mortgage the next day; the day after that, the utility company recorded its deed; the following day, the sister recorded her deed. None of the parties dealing with the landowner had any knowledge of the others at the time of their transactions. The jurisdiction in which the land is located has the following statute: "No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof whose conveyance is first recorded." If the sister brings an action to quiet title to the land, the most likely result would be: A The sister would have only a reversionary interest. B The bank's mortgage would be valid and superior simply because it was first in time. C The sister would be deemed the owner in fee simple absolute and subject only to the payment of the mortgage held by the bank. D The sister would have a fee simple interest subject to the mineral rights of the utility company and the mortgage held by the bank.

The sister's fee simple ownership of the land would be subject to the bank's mortgage interest and the utility company's mineral interest. Under a race-notice statute, which the jurisdiction in this question has, a subsequent bona fide purchaser (i.e., one who takes for value and without notice) is protected only if she records before the prior grantee. Notice is measured at the time of the conveyance, not at the time of recording. The rationale of this type of statute is that the best evidence of which interest was created first is to determine who recorded first. As an inducement to record promptly, race-notice statutes impose on the bona fide purchaser the additional requirement that she record first. Because the bank was the first to receive a conveyance, the bank could not be held to have knowledge of any other conveyance, and when the bank recorded its conveyance first, the bank won out over the sister and the utility company under the statute. The utility company owns the mineral interest in coal on the land because it recorded before the sister. (A) is incorrect because the sister has a present ownership interest in the land, but it is subject to the bank's mortgage and the utility company's mineral interest. (B) is incorrect because the jurisdiction has a race-notice statute. Thus, the bank's interest is superior only if it is first in time and without notice of all other interests. (C) is incorrect because, as discussed above, the sister does not have a fee simple absolute; the utility company owns the mineral interest.

In a residential subdivision, will a commercial builder be bound by a residential-use restriction that was omitted from his deed? A No, because there is no written restrictive covenant in the deed to the builder's lot B Yes, if the builder had inquiry notice of a common scheme for development C Yes, if the builder is in horizontal privity with the developer D No, unless the builder had actual notice of restrictive covenants in the deeds to other lots

Yes, a commercial builder will be bound by the restriction if the builder had inquiry notice of a common scheme for development. An equitable servitude is a covenant (i.e., a promise to do or not do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against assignees of the burdened land who have notice of it. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, in the absence of a writing, reciprocal negative servitudes may be implied if: 1. There is a common scheme for development (i.e., a plan existing at the time sales of the subdivision parcels began that all parcels be developed within the terms of the negative covenant); and 2. The grantee had actual, record, or inquiry notice of the covenant. Thus, the builder may be bound without actual notice of restrictive covenants in the deeds to other lots. In a residential subdivision, the builder would be on inquiry notice of a common scheme for development if the neighborhood appeared to conform to common restrictions. Thus, the builder would be bound by the residential-use restriction. Even though there is no written restrictive covenant in the deed to the builder's lot, the restriction may be enforced as a reciprocal negative servitude, discussed above. To be bound by the restriction, the builder need NOT be in horizontal privity with the developer. Horizontal privity requires that the original parties to a real covenant shared some interest in the land independent of the covenant at the time they entered it (e.g., as grantor and grantee). Horizontal privity is required to enforce the burden of a real covenant at law, but it is not required to enforce the burden of an equitable servitude.

A deed generally must contain which of the following in order to be valid? A The grantor's acknowledgment. B The grantor's words of intent. C The grantee's signature. D The metes and bounds of the land.

A deed generally must contain the grantor's words of intent in order to be valid. A deed must demonstrate that the grantor intends to transfer realty (e.g., by using the word "grant"). However, no particular technical phrasing is necessary. A deed generally need not contain the grantor's acknowledgment in order to be valid. Before a deed can be recorded under most recording statutes, it must be acknowledged by the grantor before a notary public. However, the grantor's signature, without an acknowledgement, is sufficient for the deed itself to be valid. A deed generally need not contain the metes and bounds of the land in order to be valid. While a deed must identify the land, a metes-and-bounds description is only one of many ways property may be described. A description is sufficient if it provides enough information to identify the property in question (e.g., a street address, or a reference to a lot in a recorded subdivision plat). A deed generally need not contain the grantee's signature in order to be valid. Even if the deed contains covenants on the grantee's part, her acceptance of the deed is sufficient to make those covenants enforceable.

When may a mortgagor redeem her land in equity? A Before the foreclosure sale. B Only during the foreclosure sale. C After the foreclosure sale. D At any time, unless waived in the mortgage itself.

A mortgagor may redeem her land in equity before the foreclosure sale. At any time prior to the foreclosure sale—i.e., this right does not exist only during the foreclosure sale—the mortgagor has the right to redeem the land or free it of the mortgage by paying off the amount due, plus interest. If the mortgage or note contained an acceleration clause, which permits the mortgagee to declare the full balance due in the event of default, the full balance must be paid in order to redeem. A mortgagor may not redeem her land in equity after the foreclosure sale. However, about half the states provide a statutory right to redeem—distinct from the equitable right discussed above—for some fixed period after the foreclosure sale has occurred (e.g., six months or one year). While a mortgagor may redeem her land in equity at any time before the foreclosure sale, this right cannot be waived in the mortgage itself. Doing so is known as "clogging the equity of redemption" and is prohibited. However, the right can be waived later, for consideration.

For which type of security interest in land does the debtor transfer title to a third party acting on behalf of the lender? A Deed of trust B Installment land contract C Absolute deed D Equitable mortgage

A deed of trust is a security interest in land by which the debtor (i.e., the trustor) transfers title to the land to a third party (i.e., the trustee), such as the lender's lawyer or a title insurance company, acting on behalf of the lender (i.e., the beneficiary). In the event of default, the lender instructs the trustee to foreclose the deed of trust by selling the property. An equitable mortgage exists if a court concludes that a grantor transferred an absolute deed to serve as security for an obligation. If the court so determines, the grantee must foreclose by judicial action, as with any other mortgage. The court will consider: (i) The existence of a debt or promise of payment by the grantor; (ii) The grantee's promise to return the land if the debt is paid; (iii) Whether the amount advanced to the grantor was much lower than the value of the property; (iv) The degree of the grantor's financial distress; and (v) The parties' prior negotiations. An installment land contract is a security interest in land in which the debtor (i.e., the buyer) contracts with the seller to pay for the land in regular installments until the full contract price has been paid, plus interest. Only then will the seller transfer legal title to the buyer. The contract may contain a forfeiture clause providing that the seller may cancel the contract upon default, retain all money paid, and retake possession of the land.

A fee simple subject to an executory interest is an estate that: A Continues after the happening of a stated event until the grantor exercises her power of termination B Continues after the happening of a stated event until the third party exercises his power of termination C Automatically divests in favor of a third party on the happening of a stated event D Automatically terminates on the happening of a stated event and reverts to the grantor

A fee simple subject to an executory interest is an estate that automatically divests in favor of a third party (rather than the grantor) on the happening of a stated event. It is created by the same language used to create a fee simple determinable (e.g., "for so long as," "while," "during," or "until") or a fee simple subject to a condition subsequent ( e.g., "upon condition that," "provided that," "but if," or "if it happens that"), but rather than automatically reverting to the grantor on the happening of a stated event (fee simple determinable) or continuing after the happening of a stated event until the grantor exercises her power of termination (fee simple subject to a condition subsequent), it automatically divests in favor of a third party on the happening of a stated event. A fee simple subject to an executory interest is not an estate that continues after the happening of a stated event until the third party exercises his power of termination. An estate that continues on the happening of a stated event until the grantor exercises her power of termination (right of entry) is a fee simple subject to a condition subsequent. A right of entry can be created only in favor of the grantor and her heirs. If a similar interest is created in favor of a third party, it is called an executory interest. However, unlike a right of entry, the third party need not "exercise" his executory interest; on the happening of the stated event, the estate automatically divests in his favor. The common law did not recognize a future interest created in a third party that would vest in possession only upon the discretionary exercise of a right or power by the third party. A fee simple subject to an executory interest is not an estate that automatically terminates on the happening of a stated event and reverts to the grantor. As explained above, such an estate is a fee simple determinable. A fee simple subject to an executory interest is not an estate that continues after the happening of a stated event until the grantor exercises her power of termination. As explained above, such an estate is a fee simple subject to a condition subsequent.

A grantor who conveys a fee simple determinable retains: A A right of entry B A reversion C No interest D A possibility of reverter

A grantor who conveys a fee simple determinable retains a possibility of reverter. A conveyance from "O to A for so long as/while/during/until [event]" creates a fee simple determinable in A and a possibility of reverter in O. A right of entry is the future interest retained by a grantor who conveys a fee simple subject to a condition subsequent. A conveyance from "O to A upon condition that/provided that/but if/if it happens that [event], then O or her heirs may enter and terminate the estate" creates a fee simple subject to a condition subsequent in A and a right of entry in O. A reversion is the future interest retained by a grantor who conveys a lesser estate than the grantor owns. Where O has a fee simple, a conveyance from "O to A for life" creates a life estate in A and a reversion in O.

Which of the following is NOT a nonpossessory interest in land? A Easement B Real covenant C License D Profit

A license is not a nonpossessory interest in land. A license is merely a privilege to go upon another's land; it is not an interest in land. An easement is a nonpossessory interest in land. The holder of an easement has the right to use another's land, but has no right to possess and enjoy the land. A profit is a nonpossessory interest in land. The holder of a profit has the right to go upon another's land and take the soil or a substance of the soil (e.g., minerals, timber), but has no right to possess and enjoy the land. A real covenant is a nonpossessory interest in land. A real covenant is a written promise to use or not to use land in a certain manner, and does not confer a right to possess the land on the covenantee.

Which of the following parties would be entitled to prevail against a prior transferee under "notice" and "race-notice" statutes? A A donee of the land B A judgment creditor C A mortgagee for value D One who took the land by specific bequest

A mortgagee for value would be entitled to prevail against a prior transferee under "notice" and "race-notice" statutes. Notice and race-notice recording acts protect bona fide purchasers ("BFPs") from prior unrecorded conveyances of the same property. A BFP is a purchaser who takes land without notice of a prior instrument and pays valuable consideration. Donees, heirs, and devisees are not BFPs because they do not give value for their interests; i.e., they are not purchasers. Thus, a donee of the land and one who took the land by specific bequest would not be entitled to protection under the recording acts. In contrast, mortgagees for value ( i.e., those who loan substantial money in return for a mortgage on the land) are treated as "purchasers," either expressly by the recording act or by judicial classification. A judgment creditor would not be entitled to prevail against a prior transferee under "notice" and "race-notice" statutes. In nearly all states, a plaintiff who obtains a money judgment can obtain, by statute, a judgment lien on the defendant's real estate. The majority of cases hold that the judgment lienor is not protected either because (i) he is not a BFP because he did not pay value for the judgment, or (ii) the judgment attaches only to property "owned" by the defendant, and not to property the defendant has previously conveyed away, even if that conveyance was not recorded.

A recording act that provides: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded," is a: A race statute B race-notice statute C statute of frauds D notice statute

A recording act that provides: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded," is a notice statute. Under a notice statute, a later purchaser of land will prevail over an earlier grantee if she takes without actual or constructive (e.g., record) notice of the earlier grant. The above language is not a race-notice statute. An example of a race-notice statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded." Under a race-notice statute, a later purchaser will prevail over an earlier grantee only if she takes without actual or constructive (e.g., record) notice of the earlier grant and records before he does. The above language is not a pure race statute. An example of a pure race statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded." Under a race statute, notice is irrelevant. The first party to record, regardless of the date of her conveyance, wins. The Statute of Frauds is not a recording act. Every conveyance of an interest in land with a duration long enough to bring into play a particular state's Statute of Frauds (typically one year) must be evidenced by a writing, signed by the party to be charged.

Which of the following acts will NOT sever a joint tenancy? A Inter vivos conveyance by one joint tenant. B Testamentary disposition by one joint tenant. C In a title theory state, the execution of a mortgage by one joint tenant. D Suit for partition by one joint tenant.

A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant's interest to another is inoperative as to joint tenancy property because when the testator dies ( i.e., when the will becomes effective), his rights in the joint tenancy property are extinguished, and the will has no effect on them. A suit for partition by one joint tenant will sever a joint tenancy. The court will either divide the tract into parcels (partition in kind) or sell the property and divide the proceeds among the joint tenants in accordance with their ownership interests (partition by sale). An inter vivos conveyance by one joint tenant will sever a joint tenancy. The transferee takes the interest as a tenant in common and not as a joint tenant. In a title theory state, the execution of a mortgage by one joint tenant will sever a joint tenancy. In states following the lien theory, a mortgage is regarded as a lien on title, and one joint tenant's execution of a mortgage on her interest does not by itself cause a severance. But in states following the title theory, a mortgage is regarded as a transfer of title, and the transfer destroys the unity of title and severs the joint tenancy.

Which of the following acts will terminate an easement? A Condemnation of the servient estate. B Use of the easement beyond its legal scope. C Nonuse of the easement for the statutory period. D Voluntary destruction of the servient estate.

Condemnation of the servient estate will terminate an easement. The easement holder may be entitled to compensation for the value lost. Use of the easement beyond its legal scope will not terminate an easement. Instead, the easement is surcharged, and the servient owner may sue to enjoin the use. Nonuse of the easement for the statutory period will not terminate an easement. An easement can be extinguished by the easement holder's physical act of abandonment (e.g., erection of a permanent structure over the easement). However, mere nonuse, even for a long period of time, is insufficient to constitute an abandonment of the easement. To terminate the easement, the nonuse must be combined with other evidence of intent to abandon it. Voluntary destruction of the servient estate (e.g., tearing down a building to erect a new one) will not terminate an easement. On the other hand, involuntary destruction of the servient estate (e.g., by fire or flood) will extinguish the easement.

Which of the following interests in property are subject to the Rule Against Perpetuities? A Contingent remainders, executory interests, and vested remainders subject to open B Reversions, options, and class gifts C Executory interests, rights of entry, and powers of appointment D Contingent remainders, possibilities of reverter, and rights of first refusal

Contingent remainders, executory interests, and vested remainders subject to open are subject to the Rule Against Perpetuities. The Rule Against Perpetuities provides that certain interests in property are void if there is any possibility, however remote, that they may vest more than 21 years after some life in being at the creation of the interest. The Rule applies to the following interests in property: (i) contingent remainders; (ii) executory interests; (iii) class gifts (even if vested remainders); (iv) options and rights of first refusal; and (v) powers of appointment. Future interests in the grantor (i.e., reversions, possibilities of reverter, and rights of entry) are not subject to the Rule Against Perpetuities. Thus, contingent remainder, possibilities of reverter, and rights of first refusal is incorrect because it includes possibilities of reverter. Executory interests, rights of entry, and powers of appointment is incorrect because it includes rights of entry. Reversions, options, and class gifts is incorrect because it includes reversions.

What does it mean for a grantee to assume a mortgage? A The grantee becomes a surety for the original mortgagor. B The grantee becomes primarily liable to the lender. C The grantee institutes foreclosure proceedings. D The grantee takes out an additional mortgage on the property.

For a grantee to assume a mortgage means the grantee becomes primarily liable to the lender. When a mortgagor conveys mortgaged property, the grantee takes the land subject to the mortgage. A grantee who signs an assumption agreement promises to pay the mortgage loan, thus becoming personally and primarily liable to the lender. The original mortgagor becomes secondarily liable as a surety. Assumption of a mortgage does not mean the grantee becomes a surety for the original mortgagor. The assuming grantee becomes primarily liable to the lender, and the original mortgagor becomes secondarily liable as a surety. Assumption of a mortgage does not mean the grantee institutes foreclosure proceedings. Foreclosure is a process that terminates the mortgagor's interest in the property. Generally, the property is sold in a foreclosure sale to satisfy the mortgage debt. The grantee who assumes a mortgage promises to pay the mortgage loan; thus, if the grantee defaults, foreclosure proceedings may be brought against him. Assumption of a mortgage does not mean the grantee takes out an additional mortgage on the property. As explained above, a grantee who signs an assumption agreement promises to pay the original mortgage loan, thus becoming primarily liable to the lender.

Which of the following is NOT required for the benefit of a real covenant to run to successors in interest? A There is horizontal privity between the original covenanting parties. B There is vertical privity between the covenantee and her successor in interest. C The covenant touches and concerns the land. D The covenanting parties intended that successors in interest be benefitted by the covenant.

Horizontal privity between the original covenanting parties is not required for the benefit of a real covenant to run to successors in interest. A real covenant is a written promise to do or not to do something on the land. The benefit of the covenant will run to successors in interest if: 1. The covenanting parties intended that successors in interest bebenefitted by the covenant; 2. There is vertical privity between the covenantee and her successor n interest; and 3. The covenant touches and concerns the land (i.e., it benefits the covenantee and her successor in their use and enjoyment of the benefited land). For the burden of a real covenant to run to successors in interest, vertical privity requires that the successor in interest to the covenanting party hold the entire durational interest held by the covenantor at the time he made the covenant. On the other hand, vertical privity for the running of the benefit is satisfied when the successor in interest holds any possessory estate, even a lesser estate.

Horizontal privity exists between: A A party burdened under a real covenant and any party seeking to enforce the covenant B An original party to a real covenant and her successor in interest C Parties to a real covenant who shared an independent interest in the land at the time they entered the covenant D The original parties to a real covenant, regardless of their relationship

Horizontal privity exists between parties to a real covenant who shared an independent interest in the land at the time they entered the covenant. A real covenant is a written promise to do or not do something on the land. The burden of the covenant will run with the land if: 1. The covenanting parties intended that successors in interest be bound by the covenant; 2. The successor in interest has notice of the covenant; 3. There is horizontal privity between the original covenanting parties; 4. There is vertical privity between the covenantor and her successor in interest; and 5. The covenant touches and concerns the land. Horizontal privity requires that the original covenanting parties shared some interest in the land independent of the covenant at the time they entered the covenant (e.g., as grantor and grantee). Thus, it does NOT exist between the original parties to a real covenant absent such a relationship, nor does it exist generally between a party burdened under a real covenant and any party seeking to enforce the covenant. In contrast with horizontal privity, vertical privity refers to the relationship between an original party to a real covenant and her successor in interest. For the burden of a covenant to run, this element is satisfied if the successor holds the entire durational interest held by the covenantor at the time she made the covenant.

Which of the following statements is correct regarding covenants against assignment or sublease? A If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers. B If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is void. C A covenant against assignment or sublease is an unreasonable restraint on alienation. D A covenant against assignment prevents the tenant from subleasing her interest.

If a landlord consents to one transfer that violates a covenant against assignment or sublease, he waives his right to avoid future transfers. This is the Rule in Dumpor's Case. The landlord may reserve the right to avoid future transfers, but such reservation must take place at the time of granting consent. A covenant against assignment or sublease is NOT an unreasonable restraint on alienation. All jurisdictions permit and enforce such covenants. A covenant against assignment does NOT prevent the tenant from subleasing her interest. Covenants against assignment or sublease are strictly construed against the landlord. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa. If a tenant transfers her interest in violation of a covenant against assignment or sublease, the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages.

If a landlord's breach of duty renders the premises unsuitable for occupancy, the tenant may: A Sue for breach only if the lease contained an express covenant for quiet enjoyment B Remain in possession of the premises, continue to pay rent, and sue for damages C Remain in possession of the premises and refuse to pay rent until the interference ceases D Vacate the premises, terminate the lease, and sue for damages

If a landlord's breach of duty renders the premises unsuitable for occupancy, the tenant may vacate the premises, terminate the lease, and sue for damages. Under the doctrine of constructive eviction, if the landlord's breach (i.e., doing an act or failing to provide some service that he has a legal duty to provide) makes the premises untenantable, the tenant may terminate the lease and also may seek damages if the following conditions are met: (i) The breach must be by the landlord or by persons acting for him. (ii) The breach must substantially and materially deprive the tenant of her use and enjoyment of the premises (e.g., flooding, absence of heat in winter). (iii) The tenant must give the landlord notice and a reasonable time to repair. (iv) The tenant must vacate the premises within a reasonable time. Because a tenant cannot claim a constructive eviction unless and until she vacates the premises, her remedies do not include remaining in possession of the premises and refusing to pay rent until the interference ceases or continuing to pay rent and suing for damages. The tenant is not limited to suing for breach only if the lease contained an express covenant for quiet enjoyment. Every lease contains an implied covenant that neither the landlord nor someone with paramount title will interfere with the tenant's quiet enjoyment and possession of the premises. If a landlord does so, the tenant has the remedies discussed above.

To acquire a prescriptive easement on property, the claimant's use must be: A Under color of title B In good faith and with the owner's permission C Exclusive, open and notorious, and adverse for the statutory period D Open and notorious, adverse, and continuous for the statutory period

To acquire a prescriptive easement on property, the claimant's use must be open and notorious, adverse, and continuous for the statutory period. Acquiring an easement by prescription is analogous to acquiring title to property by adverse possession, except that the use need NOT be exclusive (i.e., the user may share the use with the owner or other easement claimants). There is no requirement that the use be in good faith, and adverse use means the user does NOT have the owner's permission. Moreover, the claimant's use need not be under color of title. Color of title is a document that purports to give title, but for reasons not apparent from its face, does not. Under certain circumstances, color of title may be needed to establish adverse possession, but it is not required to acquire a prescriptive easement.

A landowner granted to his adjoining neighbor an easement in a driveway that crosses the southwest corner of the landowner's property. The easement was not recorded. A statute of the jurisdiction in which the landowner's and neighbor's properties are located provides: "No unrecorded interest in real property shall be good against subsequent purchasers for value without notice unless the conveyance is recorded." In which of the following cases has the neighbor's easement been terminated? A The neighbor constructs her own driveway and ceases to use the one across the landowner's property. B The landowner sells his property to a purchaser for value who is unaware of the easement. C The neighbor begins to hold pottery classes in her home, resulting in increased traffic over the driveway. D The neighbor tells the landowner that she will no longer be using the driveway, and the landowner thereafter builds a garage over the driveway.

If the neighbor tells the landowner that she will no longer be using the driveway, and the landowner thereafter builds a garage over the driveway, the easement has been terminated by estoppel. Although an oral release is ineffective because it does not comply with the Statute of Frauds, it may become effective by estoppel. For an easement to be extinguished by estoppel, there must be (i) some conduct or assertion by the owner of the easement, (ii) a reasonable reliance by the owner of the servient tenement, coupled with (iii) a change of position. Here, even though the neighbor's release of the easement was oral, the landowner changed his position in reliance on that release in building the garage over the driveway. Thus, the easement has been terminated. (A) is incorrect because mere nonuse of an easement will not result in its extinguishment. An easement can be extinguished where the holder demonstrates by a physical action that she intends to permanently abandon the easement. However, nonuse of the easement, without more, will not constitute a manifestation of an intent never to make use of the easement again. (B) is incorrect because, just as the benefit of an easement appurtenant passes with a transfer of the benefited land (regardless of whether the easement is mentioned in the conveyance), so also does the burden of an easement appurtenant pass with the servient land when transferred. Note that a subsequent purchaser without actual or constructive notice of an easement may take free of the easement by virtue of the recording act. In this case, however, the notice statute will not aid a purchaser. The mere existence of the driveway across the landowner's property to the neighbor's property puts any purchaser on inquiry notice of an easement. Thus, even if the landowner's property is sold to a purchaser for value who is unaware of the easement, the burden of the driveway easement passes with the transfer of the servient land. (C) is incorrect because, if a court were to find that there is now an unreasonably excessive use of the easement, the proper remedy would be to enter an order conforming use of the easement to a proper scope. Excessive use would not, however, result in the extinguishing of the easement.

In general, a party who fails to tender performance on the closing date: A Is excused from performance B Has no liability for even incidental damages C Is in total breach and loses her right to enforce the contract D Has a reasonable time after the closing date to tender performance

In general, a party who fails to tender performance on the closing date has a reasonable time after the closing date to tender performance and avoid breach. Generally, the time of performance stated in a land sale contract is not absolutely binding. A party, even though late in tendering her own performance, can still enforce the contract if she tenders within a reasonable time after the stated date. Courts presume that time is not of the essence. However, this presumption may be overcome if: (i) The contract states that time is of the essence; (ii) The circumstances indicate that the parties intended that time is of the essence; or (iii) One party notifies the other within a reasonable time before the closing date that time is of the essence. If time is of the essence, a party who fails to tender performance on the closing date is in total breach and loses her right to enforce the contract . However, even if time is not of the essence, a party who is late in tendering performance is NOT excused from performance absent repudiation or impossibility, and will be liable for incidental damages (e.g., additional mortgage interest or taxes).

In most states, the reservation of an annual rent, payable monthly, in a lease with no set termination date creates a: A Tenancy at will B Tenancy for years C Year-to-year periodic tenancy D Month-to-month periodic tenancy

In most states, the reservation of an annual rent, payable monthly, in a lease with no set termination date creates a year-to-year periodic tenancy . A periodic tenancy is a tenancy that continues from period to period until terminated by proper notice by either the landlord or the tenant. It may be created by implication if a lease with no set termination date provides for the payment of periodic rent. The majority view is that a lease at an annual rent, payable monthly, creates a periodic tenancy from year to year, and not a month-to-month periodic tenancy. A tenancy at will is a tenancy that continues only until the landlord or the tenant gives notice and time to quit. Although a tenancy at will can arise when a lease has no set termination date, a provision requiring annual rent payments will convert it to a periodic tenancy. A tenancy for years is a tenancy that continues for a fixed period of time and then ends automatically on its termination date. A lease with no stated duration is not a tenancy for years.

Regarding the delivery and acceptance of a deed, which of the following will courts generally NOT presume? A A grantee accepts a deed if the conveyance would benefit her. B A grantee's return of a deed is a reconveyance to the grantor. C A grantee accepts a deed if she is a minor. D A grantee's possession of a deed means it has been delivered.

Regarding the delivery and acceptance of a deed, courts will not presume that a grantee's return of a deed is a reconveyance to the grantor. A deed will not transfer an interest in land unless it has been delivered by the grantor and accepted by the grantee. Title passes to the grantee upon effective delivery, and returning the deed to the grantor has no effect. To effect a reconveyance, the grantee must execute and deliver a new deed. Courts generally will presume that a grantee's possession of a deed means it has been delivered. Unless the grantor clearly expressed his intent that title pass to the grantee without physical delivery, the grantor's continued possession of the deed raises a presumption of nondelivery. Conversely, the grantee's possession of a properly executed deed raises a presumption of delivery. Regarding acceptance of a deed, courts generally will presume that a grantee accepts a deed if the conveyance would benefit her. In most states, acceptance is presumed if the conveyance is beneficial to the grantee, regardless of whether the grantee knows of it. In other states, acceptance is presumed only where the grantee knows of the grant and fails to reject it. Courts also will presume that a grantee accepts a deed if she is a minor. In all states, acceptance is presumed if the grantee is an infant or an incompetent.

A landowner died, validly devising her land "to my son for life, then to my brother and sister in fee simple." Without obtaining the brother and sister's consent, the son borrowed $20,000 from a bank, secured by a mortgage on the land, to make improvements to the land. Five years later, the son died. The brother and sister took possession of the land, but failed to make any mortgage payments. If the bank sues to recover the delinquent payments, the court should render judgment for: A The bank, because a life tenant is obligated to make repairs. B The bank, because the remaindermen are obligated to pay the principal of a debt. C The brother and sister, because the son committed ameliorative waste. D The brother and sister, because the mortgage does not encumber the fee simple.

The court should render judgment for the brother and sister because the mortgage does not encumber the fee simple. A life tenant is entitled to all the ordinary uses and profits of the land, which includes encumbering his own interest, but he cannot lawfully do any act that would injure the interests of the remaindermen. Permissive waste occurs when the life tenant allows the land to fall into disrepair or fails to take reasonable measures to protect the land. Although a life tenant is obligated to pay interest on any encumbrances of the fee simple estate to the extent of the income or profits from the land (or in their absence to the extent of the reasonable rental value of the land), he is liable for both principal and interest payments if the encumbrance is on the life estate alone. Here, because the son did not obtain the consent or joinder of the remainderman when he mortgaged the land, the mortgage attaches only to the life estate. Thus, the remaindermen (the brother and sister) are not liable for the mortgage payments. (A) is incorrect because the son made improvements rather than repairs to the land. Although a life tenant is obligated to preserve the land and structures in a reasonable state of repair, to the extent of the income or profits from the land (or in their absence to the extent of the reasonable rental value of the land), he is under no obligation to make permanent improvements on the land. (B) is incorrect because remaindermen are obligated to pay the principal of a debt only if the debt encumbers the entire fee simple estate. Here, only the life estate is encumbered. (C) is incorrect because ameliorative waste, which occurs when the use of the property is substantially changed but the change increases the value of the property, may have been an appropriate cause of action for the brother and sister to bring against the son for the improvements, but it does not affect the bank's rights.

Which of the following is a future covenant for title? A Covenant of warranty B Covenant against encumbrances C Covenant of seisin D Covenant of right to convey

The covenant of warranty is a future covenant for title. A general warranty deed contains covenants for title through which the grantor warrants against title defects created by herself and prior titleholders. The usual covenants for title include present covenants, which can be breached only at the time of conveyance; and future covenants, which can be breached only upon eviction (i.e., interference with the possession of the grantee or her successors by someone with better title). Through the covenant of warranty, the grantor agrees to defend the grantee's title from any third party's lawful or reasonable claims of title and to compensate the grantee for any related loss. Because this covenant cannot be breached until a third party interferes with possession, it is a future covenant. The covenant of seisin is a present covenant for title. Through it, the grantor warrants that she has the estate or interest she purports to convey (i.e., both title and possession) at the time of the grant. The covenant against encumbrances is a present covenant for title. Through it, the grantor warrants that there are no encumbrances (e.g., easements, profits, or mortgages) against the title or interest conveyed. The covenant of right to convey is a present covenant for title. Through it, the grantor warrants that she has the power and authority to make the grant (i.e., she has title or is the titleholder's authorized agent).

A testator executed a will, devising his land "to my son and my daughter, share and share alike." Shortly thereafter, the daughter died intestate, leaving a child as her only heir. The next year, the testator and his son were involved in a car accident. The testator died immediately. The son died six days later, leaving a will that bequeathed his entire estate to his wife. The jurisdiction has the following statute: "If a devisee, including a devisee of a class gift, who is a grandparent or a lineal descendant of a grandparent of the testator is dead at the time of execution of the will or fails to survive the testator, the issue of such deceased devisee shall take the deceased's share under the will." Who owns the land? A The daughter's child owns all of the land in fee simple. B The son's wife owns all of the land in fee simple. C The daughter's child and the son's wife each own an undivided one-half interest in the land. D The daughter's child and the son's wife each own one-half of the land.

The daughter's child and the son's wife each own an undivided one-half interest in the land. At common law, if a will beneficiary died before the testator, the gift to the beneficiary was void. However, this jurisdiction has an anti-lapse statute, which saves the gift for the predeceasing beneficiary's descendants if the beneficiary herself is a descendant of the testator. Here, when the daughter died, her one-half interest in the land passed to her child under the anti-lapse statute. When the son died, his one-half interest in the land, to which he was entitled on the father's death when the father's will took effect, passed through the son's estate (not the anti-lapse statute) to his wife. Moreover, a conveyance to two or more persons is presumed to create a tenancy in common rather than a joint tenancy unless an intention to create a right of survivorship is clearly expressed. Each co-tenant has the right to possess all portions of the property; no co-tenant has the right to exclusive possession of any part. Therefore, the daughter's child and the son's wife each own an undivided one-half interest in the land as tenants in common. (A) and (B) are wrong because neither the child nor the wife owns all of the land in fee simple. (D) is wrong because the child and the wife each own an undivided one-half interest, which is a one-half interest as to the entire tract, as opposed to one-half of the land, which would be all interest in a one-half part of the tract.

Which of the following would not make title to land unmarketable? A Evidence that a prior grantor lacked capacity to convey the property B A significant variation in the description of property from one deed to the next C The existence of a mortgage on which the statute of limitations has run D The defective execution of a prior deed in the chain of title

The existence of a mortgage on which the statute of limitations has run would not make title to land unmarketable. Every land sale contract contains an implied covenant that the seller will provide marketable title at closing. While it need not be perfect title, it must not present the buyer with an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title. Title may be unmarketable because of a defect in the chain of title. Examples include a significant variation in the description of the land from one deed to the next, the defective execution of a prior deed in the chain of title that thus fails to meet the requirements for recordation, and evidence that a prior grantor lacked capacity to convey the property. Many courts hold that an ancient lien or mortgage on the record will not render title unmarketable if the seller has proof of its satisfaction or the statute of limitations on the claim would have run under any possible circumstance, including tolling for disabilities.

A landowner owned a tract known as Section 35. He subdivided Section 35, and sold a lot to a neighbor. The warranty deed that conveyed the property included the following language: COVENANTS *** Purchaser shall have a privilege to hunt and fish on all lands owned by Seller in Section 35. *** These covenants shall run with the land. Years later, the landowner sold the remaining land in Section 35 to a builder. Shortly thereafter, the neighbor died, leaving the lot to her granddaughter. The builder posted "no trespassing" signs on his land. The granddaughter brought an action for declaratory judgment against the builder to enforce the granddaughter's ability to hunt and fish on the builder's land. What would be the likely result? A The granddaughter will win, because the warranty deed granted her an easement. B The granddaughter will win, because the warranty deed granted her an irrevocable license. C The granddaughter will win, because the warranty deed granted her a profit. D The builder will win, because the warranty deed granted a revocable license.

The granddaughter will win because she has a profit. A profit is a nonpossessory interest in land, allowing the grantee to enter on the land and remove resources of the land, in this case, fish and game. Moreover, the profit can be conveyed from the original grantee to a third party, as it was here from the neighbor to her granddaughter. A profit can be terminated in one of several ways, such as by abandonment or misuse, but the facts here do not indicate that termination has occurred. (D) is incorrect. Although the warranty deed used the word "privilege" to describe the interest that was being conveyed, the additional use of the words "covenant" and "shall run with the land" evidences an intent on the part of the original landowner to create more than a bare license to hunt and fish. Otherwise, such a license would have been revocable at the will of the landowner, and would have been extinguished once the neighbor conveyed her lot to her granddaughter. (A) is not as good an answer as (C). Although easements and profits are similar, an easement is an interest allowing the holder to use the land, while a profit specifically allows the holder to remove resources. An easement would not have included the right to hunt and fish on the builder's land. (B) is incorrect, because an irrevocable license requires the holder to have a privilege, in reliance on which she has invested substantial moneys or labor. That is not the situation under these facts.

An uncle executed a warranty deed granting a parcel of land to his nephew. The uncle placed the deed in his bedroom closet and told his friend to get the deed and give it to the nephew if the nephew survived the uncle. Several years later, the uncle conveyed the land by quitclaim deed to a purchaser for $20,000. The uncle told the purchaser about the earlier deed to the nephew, and he told the purchaser that he planned to tear it up, but the uncle never did so. The purchaser properly recorded her deed. The uncle died the following year, leaving the nephew as his sole surviving heir. The friend thereupon delivered the uncle's deed to the nephew, which was the first time the nephew knew of the deed. A statute of the jurisdiction in which the land is located provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice whose conveyance is first recorded according to law." The deed from the uncle to the purchaser was: A Effective as a conveyance of title when delivered. B Effective on recordation, to cut off the nephew's interest in the property. C Ineffective as against the nephew, because the purchaser knew of the deed from the uncle to the nephew when she became a grantee. D Ineffective as against the nephew, because the purchaser took by quitclaim deed and thus stands in the shoes of the uncle.

The purchaser's deed was effective to convey title from the uncle to the purchaser immediately on delivery. A quitclaim deed transfers whatever right, title, or interest in the property the grantor has. Thus, when the purchaser took by quitclaim deed, she acquired the uncle's interest in the land. Because the deed from the uncle to the nephew was never validly delivered, the conveyance is ineffective and the uncle was the sole owner of the property. If a grantor executes a deed but fails to deliver it during his lifetime, no conveyance of title has occurred. "Delivery" refers to the grantor's intent; it is satisfied by words or conduct showing that the grantor intended that the deed have a present operative effect--i.e., that title pass immediately and irrevocably, even though the right of possessing the land may be postponed until some future time. To make an effective delivery, the grantor must relinquish control. Here, the uncle clearly did not intend to relinquish the land because he executed the deed but retained it, and merely told his friend to deliver it at his death to his nephew, provided that the nephew was still alive. Thus, because the uncle did not intend to relinquish control of the land until his death, there was no valid delivery of the deed. Note that the deed did not convey a future interest to the nephew. To convey a future interest (i.e., a present interest in the property, but where possession is postponed until some future time), there must also be a present intent to convey an interest. Here, the uncle showed no intent to presently convey an interest because he retained the deed. Generally, in cases where the grantor has retained the deed, the condition that title will not pass until the grantor's death must be contained in the language of the deed itself for a future interest to be conveyed. Therefore, the purchaser took full title to the land. (B) is wrong because recordation of the purchaser's deed is irrelevant. The nephew never had an interest that could be cut off (see above). Thus, the purchaser prevails because she acquired valid title from the uncle, rather than because of any priority in recording. Had the purchaser not recorded her deed, she would still have prevailed. (C) is wrong because it is irrelevant that the purchaser knew of the earlier deed to the nephew. The earlier deed to the nephew was not a valid conveyance of the property because there was no delivery. Because no interest passed to the nephew, the purchaser's notice of the deed is meaningless. (D) is wrong because the fact that the conveyance was by quitclaim deed is not important; the purchaser is the full owner of the land. This choice implies that the purchaser's quitclaim deed is somehow ineffective against the nephew's warranty deed, but the fact that the purchaser took by quitclaim does not in any way lessen her interest in the land. A quitclaim deed effectively conveys all interest in the property the grantor has. In this case, the uncle had a fee simple absolute, and so that is what passed to the purchaser under the deed. The nephew's warranty deed was never delivered and thus it was worthless.

A grantor executed and delivered a deed to his son conveying his land as follows: "To my son for life, but if my son dies survived by his spouse and children, then to my son's spouse for life, with the remainder in fee simple to my son's children." A year later, the son died survived by his spouse and two offspring, a girl and a boy. The boy died intestate two days after the son, leaving one child as his only heir. The common law Rule Against Perpetuities is unmodified in the jurisdiction. What are the respective interests of the spouse, the girl, and the child in the land? A The spouse has a life estate, the girl has an absolutely vested remainder, and the child has nothing. B The spouse has fee simple ownership of the land, and the girl and the child have nothing. C The spouse has a life estate, and the girl and the child have absolutely vested remainders. D The spouse has a life estate, and the girl has a vested remainder subject to open.

The spouse has a life estate, the girl has an absolutely vested remainder, and the child, by intestate succession, will inherit the boy's absolutely vested remainder. The remainder to the son's children was vested subject to open upon the birth of his first child. Because the son cannot have any more children after his death, all members of the class are ascertained at that time and the remainder becomes indefeasibly vested. Because the grant was to the son's "children" rather than "issue" or "descendants," there is no unborn child problem. (A) is wrong because the boy's vested remainder is inheritable by the child. (B) is wrong because the spouse has only a life estate--not a fee simple absolute--and the girl and the child have absolutely vested remainders. (D) is wrong because the class gift in the limitation "with the remainder in fee simple to my son's children" closes on the son's death; no children thereafter can be born to him, which precludes the remainder's being "subject to open."

Under which theory can the mortgagee take possession of the mortgaged property upon the mortgagor's default? A The title theory only B Either the lien theory or the intermediate theory C The lien theory only D Either the title theory or the intermediate theory

Under either the title theory or the intermediate theory, the mortgagee may take possession of the mortgaged property upon the mortgagor's default. Under the title theory, followed in a minority of states, legal title is in the mortgagee until the mortgage has been satisfied or foreclosed. Thus, the mortgagee is entitled to possession upon demand at any time, which means the mortgagee can take possession as soon as the mortgagor defaults. The same is true in the few states that follow the intermediate theory, under which legal title transfers from the mortgagor to the mortgagee on default. Under the lien theory, followed in a majority of the states, the mortgagee is deemed to hold a security interest in the land and the mortgagor is considered the owner until foreclosure. Thus, the mortgagee may not take possession of the land before foreclosure.

Which of the following is NOT required for the burden of an equitable servitude to run to successors in interest? A The covenant touches and concerns the land. B The successor in interest has notice of the covenant if she has given value. C The covenanting parties intended that successors in interest be bound by the covenant. D There is vertical privity between the covenantor and his successor in interest.

Vertical privity between the covenantor and his successor in interest is not required for the burden of an equitable servitude to run to successors in interest. An equitable servitude is a covenant (i.e., a promise to do or not to do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against assignees of the burdened land who have notice of the covenant. The burden of an equitable servitude will run to successors in interest if: 1. The covenanting parties intended that successors in interest be bound by the covenant; 2. The successor in interest has notice of the covenant (if she has given value); and 3. The covenant touches and concerns the land (i.e., it benefits the covenantor and his successor in their use and enjoyment of the burdened land). Horizontal privity between the original covenanting parties and vertical privity between the covenantor and his successor in interest are not required.

Which of the following generally occurs when a mortgagee transfers a promissory note without a written assignment of the mortgage? A The mortgagee retains the rights to the mortgage. B The mortgage is separated from the obligation on the note. C The mortgage follows the note. D The mortgage is extinguished.

When a mortgagee transfers a promissory note without a written assignment of the mortgage, generally the mortgage follows the note. A mortgage is a security interest in real estate that secures an obligation, usually a promise to repay a loan, which is represented by a promissory note. The debtor (i.e., the mortgagor) gives the mortgage and the note to the lender (i.e., the mortgagee). The mortgagee who transfers her interest usually does so by indorsing the note and executing a separate assignment of the mortgage. While it is possible to transfer the note without the mortgage, the mortgage automatically will follow the properly transferred note. No separate written assignment of the mortgage is necessary. The mortgagee does NOT retain the rights to the mortgage when she transfers the note without a written assignment of the mortgage unless she expressly reserves the rights, which there would rarely be any reason for her to do. Generally, the mortgage follows the note; the mortgage is NOT separated from the obligation on the note, and the mortgage is NOT extinguished.

Which of the following is true when a seller of land dies before the contract closes? A The contract is voidable by the seller's estate. B The successors to the seller's personal property must give up equitable title at closing. C The contract is voided by the seller's death. D The successors to the seller's real property must give up legal title at closing.

When a seller of land dies before the contract closes, the successors to the seller's real property must give up legal title at closing. Under the doctrine of equitable conversion, the buyer of land is considered to own (i.e., hold equitable title to) the real property once the contract is signed. The seller is entitled to the proceeds of sale. Equity regards the seller as holding bare legal title in trust for the buyer as security for the debt owed. When a party to the contract dies before closing, her interest passes accordingly. The deceased seller's personal property takers are thus entitled to the sale proceeds on closing but must surrender legal title at that time. The successors to the seller's personal property do NOT give up equitable title at closing when a seller of land dies before the contract closes. As stated above, under the doctrine of equitable conversion, the buyer obtains equitable title to the land upon the signing of the contract. If the seller dies before closing, the bare legal title she held passes to the takers of her real property, who must surrender it to the buyer at closing (when both legal and equitable titles merge in the buyer). The takers of the seller's personal property succeed only to the proceeds of the sale, not the title to the real property. When a seller of land dies before the contract closes, the contract is NOT voidable by the seller's estate. It can be enforced against the takers of her real property when closing occurs. Furthermore, the contract is NOT voided by the seller's death. As is explained above, the doctrine of equitable conversion affects the passage of title when a party to a land sale contract dies before the closing. On closing, the seller's estate must surrender legal title to the buyer, and the estate is entitled to the proceeds of the sale.

As between two mortgages, what is the effect on the junior mortgage when the mortgagor accepts an advance of funds from the senior mortgagee? A The junior mortgage is given priority over the entire senior mortgage if the advance was optional B The junior mortgage is given priority over the advance if the advance was optional C The junior mortgage is given priority over the advance if the senior mortgagee was contractually obligated to make it D The junior mortgage is given priority over the entire senior mortgage if the senior mortgagee was contractually obligated to make it

When the mortgagor accepts an advance of funds from the senior mortgagee, the junior mortgage is given priority over the advance if the advance was optional. Priority among mortgages on the same real estate is normally determined by chronology: The earliest (i.e., senior) mortgage is first in priority, the next (i.e., junior) mortgage is second, and so on. Generally, if the mortgage obligates the mortgagee to make further advances of funds after the mortgage is executed, such advances will have the same priority as the original mortgage. However, if a junior mortgage is placed on the property and the senior mortgagee later makes an "optional" advance (i.e., one it was not contractually bound to make) while having notice of the junior mortgage, the advance will lose priority to the junior mortgage. Numerous states have reversed this rule by statute, but it remains the majority view. Thus, the junior mortgage is NOT given priority over the advance if the senior mortgagee was contractually obligated to make it. Furthermore, an advance would not jeopardize the priority of the entire senior mortgage itself; thus, the junior mortgage is NOT given priority over the entire senior mortgage, regardless of whether the advance was optional or the senior mortgagee was contractually obligated to make it.

May a buyer obtain specific performance of an oral land sale contract? A Yes, provided the buyer has paid most of the purchase price B No, because an oral contract does not satisfy the Statute of Frauds C Yes, if the buyer has taken possession of and made substantial improvements to the land D No, because the buyer's remedy is damages

Yes, a buyer may obtain specific performance of an oral land sale contract if the buyer has taken possession of and made substantial improvements to the land. While land sale contracts must be memorialized in writing and signed by the party to be charged to be enforceable under the Statute of Frauds, courts in most states will enforce an oral contract in equity under the doctrine of part performance if the buyer has performed at least two of the following acts: 1. Taken possession of the land; 2. Made substantial improvements to the land; and/or 3. Paid all or part of the purchase price. Some courts will accept as part performance additional acts showing the buyer's detrimental reliance. A buyer might not obtain specific performance of an oral land sale contract even if the buyer has paid most of the purchase price. As explained above, most jurisdictions require at least two acts of part performance. For an oral land sale contract, the buyer's remedy is NOT damages. Only specific performance is available in equity under the doctrine of part performance. Although an oral contract does not satisfy the Statute of Frauds, a court may award specific performance if the buyer shows sufficient acts of part performance. Two theories support this remedy: (i) the buyer's acts unequivocally evidence an oral contract; and (ii) the buyer's detrimental reliance estops the seller from asserting the Statute of Frauds as a defense.

May a tenant remove a chattel that the tenant affixed to the leased premises? A No, because chattels affixed to the leased premises become the property of the landlord B Yes, if removal occurs before termination of the lease and leaves no damage to the premises C No, unless the landlord and tenant expressly agreed that the chattel would be considered a fixture D Yes, because chattels affixed to the leased premises remain the property of the tenant

Yes, absent an agreement to the contrary, a tenant may remove a chattel that the tenant affixed to the leased premises if removal occurs before termination of the lease and leaves no damage to the premises. A fixture is a chattel that has been so affixed to the realty that it has ceased being personal property and has become part of the realty. At early common law, chattels affixed to the leased premises became the property of the landlord and thus could not be removed from the premises by the tenant. Today, a tenant may remove annexed chattels before the termination of the tenancy if doing so causes no damage to the premises (or any damage done by removing them is repaired by the tenant). Chattels affixed to the leased premises do NOT always remain the property of the tenant. Chattels the tenant affixes to leased premises may become the landlord's property (i.e., fixtures) under certain circumstances, such as where the tenant fails to remove the chattels before the end of the lease term, removal of the chattels will substantially damage the premises, or the landlord and tenant agreed that the chattels were intended to become fixtures. A tenant may NOT remove an affixed chattel if the landlord and tenant expressly agreed that the chattel would be considered a fixture. An agreement between the landlord and tenant is controlling as to whether the chattel annexed to the premises was intended to become a fixture. Thus, if the landlord and tenant agree that an annexation is not a fixture, the tenant will be permitted to remove it before the end of the lease term. However, if the landlord and tenant agree that an annexation is a fixture, it becomes the landlord's property.

If an occupier initially has the true owner's permission to enter the land, may she acquire title to the land by adverse possession? A Yes, unless the occupier believes she is on her own land B No, because the statute of limitations will not begin to run C No, because an adverse possessor must lack the true owner's permission to be on the land D Yes, if the occupier communicates hostility

Yes, an occupier who initially has the true owner's permission to enter the land may acquire title to the land by adverse possession if the occupier communicates hostility and satisfies the other elements of adverse possession. To establish title by adverse possession, the occupier must show: (i) An actual entry giving exclusive possession that is (ii) Open and notorious, (iii) Adverse (hostile), and (iv) Continuous throughout the statutory period. If the occupier enters with the owner's permission, her possession may become adverse only once she makes it clear to the owner that she is claiming hostilely. This can be done by explicit notification, by refusing to permit the true owner to come onto the land, or by other acts inconsistent with the original permission. The occupier's state of mind is irrelevant to adverse possession, which means that it does not matter whether the occupier believes she is on her own land, knows she is trespassing on someone else's land, or has no idea who owns the land. While it is true that an adverse possessor must lack the true owner's permission to be on the land, a subsequent communication of hostility may cause initially permissive possession to become adverse, as explained above. The statute of limitations WILL begin to run if an occupier who initially had the true owner's permission to enter the land communicates hostility, as explained above.