Property MC

"I give my house in the city to my son, but if he ever tries to sell it while he is alive, I want it taken away from him and given to my grandson." What interest does the son have?

- FSA - absolute restraint on alienation = void

When does an adverse possessor get possession of the entire parcel

Actual possession of a portion of a unitary tract of land is sufficient adverse possession as to give title to the whole of the tract of land after the statutory period, as long as there is a reasonable proportion between the portion actually possessed and the whole of the unitary tract, and the possessor has color of title to the whole tract. Color of title is a document that purports to give title, but for reasons not apparent from its face does not. Usually, the proportion will be held reasonable if possession of the portion was sufficient to put the owner or community on notice of the fact of possession.

How will the proceeds from a partition sale of property initially held by four joint tenants (A, B, C, and D) be divided if A sold her interest to E, and B died, leaving her property to F and G?

C and D get 3/8 each; E gets 1/4

Joint Tenancy: Lien Theory v. Title theory

Lien theory: mortgage by 1 JT does not sever JT. So if JT w mortgage dies, JT2 takes JT1's interest *free and clear of the lien* Title Theory: mortgage by 1 JT severs JT. When JT1 dies, his interest passes to his heir as TiC w/ JT 2 and heir takes subject to mortgage

Terminating Easement by Merger:

Merger only terminates an easement if both parcels are owned in same manner Ex: if owner of parcel 1 in FSA gets (servient tenement) parcel 2 as a life tenant, the easement is NOT terminated

L leases to T1. T1 assigns to T2. T2 subleases to T3. T3 doesn't pay taxes. Who can L go after?

T1: privity of contract T2: privity of estate (bc sublease didn't excuse him from PoE, but an assignment would) No T3: no PoC or PoE

Reasonable Use Doctrine

Under the reasonable use doctrine (followed by many eastern states), a landowner is limited to reasonable use of the underground water for beneficial purposes on the overlying land. "Reasonable" use is just about any use on the land that is not merely malicious or a waste of water. Thus, the use of water for gardening, filling a pool, and for the needs of tenants will constitute a reasonable use for beneficial purposes on the family's overlying land

Raising rent

When a tenant wrongfully holds over after the expiration of a lease, the landlord has two choices: either treat the tenant as a trespasser and sue for damages and possession or impose a new periodic tenancy on the hold-over tenant. If landlord notifies tenant they want to increase rent if they renew lease, tenant says nothing about renewing, but then STAYS, L can charge increased rent If no notice, can charge tenant who stays the old rent, not higher rent

Accretion

When a watercourse or body of water forms the boundary of a parcel of real property, accretion causes the legal boundary to change due to the slow and imperceptible deposit of soil. The slow erosion of the bank of a river or stream serving as a boundary results in the owner losing title to that area. Similarly, the slow deposit of soil belongs to the owner of the abutting land. Where accretion builds up in an irregular pattern over the lands of several adjacent property owners, courts determine title to it by (i) extending each owner's property line out into the water, or (ii) dividing up the newly formed land in proportion to the owners' interests in the adjoining lands. In contrast, avulsion is the sudden, perceptible change of a watercourse serving as a boundary. Avulsion does not change the legal boundaries, which remain where they were even if this results in a landowner who had river access finding himself landlocked. Similarly, the legal boundary line is not changed by the encroachment of the body of water. When property is encroached upon by a body of water (e.g., a lake enlarges), previously fixed boundary lines do not change and ownership rights are not affected. The boundary lines can be proven even if the land is completely under water.

Partition in kind

When co-tenants are squabbling and cannot come to any agreement, the remedy of partition terminates the co-tenancy and divides the common property.

An entrepreneur entered into a written lease-option to purchase an office building. The option to purchase the building could be exercised at any time during the five-year term of the lease by giving the building's owner a written 30-day notice of the intent to exercise the option. A few months later, the entrepreneur assigned his lease-option to a dentist looking for office space by written agreement. If the dentist fully performs under the lease, can the dentist exercise the option to purchase that was given to the entrepreneur?

Yes, because both the burden and benefit of the covenant to convey run with the land. - A covenant to convey touches and concerns both the leasehold and reversion, and therefore runs with those respective interests in the land. - nothing about the option in the facts that shows it to be personal

A landlord owns a six-unit strip mall. He offered to lease one of the units to a barista, who planned to open a gourmet coffee shop. Because the mall is located on a busy street, the barista insisted that the landlord install a metal fence around the outdoor seating area that would protect her customers. The landlord agreed to do so, and the barista signed a 10-year lease. A term in the lease stated, "The landlord agrees to maintain all structures on the property in good repair." Eight years later, the landlord sold the strip mall to a buyer. The buyer did not agree to perform any obligations under the leases. As instructed, the barista began paying rent to the buyer. The following year, the metal fence was in desperate need of repairs. Citing the lease terms, the barista asked the buyer to repair the fence, but the buyer continually refused to do so. The barista finally repaired the fence herself at a cost of $3,000 and then brought an appropriate lawsuit to recover the money.Absent any other facts, what is the barista likely to recover?

$3000 from either the landlord or the buyer, because she is in privity with both. The barista may recover the cost of the repairs from either the landlord or the buyer. A landlord's promise in a lease to maintain the property does not terminate because the property is sold. Although no longer in privity of estate, the original landlord and tenant remain in privity of contract, and the original landlord remains liable on the covenant unless there is a novation. A novation substitutes a new party for an original party to the contract. It requires the assent of all parties, and completely releases the original party. Because neither the barista nor the buyer has agreed to a novation, the landlord remains liable for the covenant because he and the barista remain in privity of contract even after the sale. Thus, the promise to repair can be enforced against the landlord. *When leased property is sold, the purchaser is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. A covenant runs with the land if the parties to the lease so intend and the covenant touches and concerns the land.* Generally, promises to do a physical act, such as maintain or repair the property, are considered to run with the land. Thus, the buyer is liable because he is in privity of estate with the barista and the covenant to repair runs with the land. Consequently, both the landlord and the buyer are potentially liable to the barista for the repairs.

A mansion has been in a landowner's family homestead for 100 years. It is in a mixed use area of a city, which has also been zoned for apartment buildings. Many homes in the area have been torn down to build new apartment structures. The landowner wants to sell the mansion but does not want the house torn down or the land used for an apartment building.Which of the following will most successfully accomplish his objective?

- FSD to buyer so long as the land is used for single family residence - covenant running with the land would be ineffective, because it requires a dominant tenement to be benefitted. there is only 1 house here. Also if there is a signif cahnge in circumstance, covenant ineff - A negative easement is not the best option, because it serves only to prevent particular uses by an owner. Thus, it could not be used to prevent the owner from building an apartment building, and it would be difficult to draft a negative easement that required the new owner to maintain the house on the property - right of first refusal wont work, because it is an indefinite restraint on alienation

Time is of the Essence in Real Estate Contracts

- Generally, courts assume that time is not "of the essence" in real estate contracts. This means that the closing date stated in the contract is not absolutely binding in equity, and that a party, even though late in tendering her own performance, can still enforce the contract if she tenders *within a reasonable time after the date.* - Ex: A contracts to sell house to B June 28, but A doesn't own house yet. A buys house from C May. A finalizes everything, and can convey deed to house to B September 1. Answer? While there is no time of the essence, A has reas time to tender, BUT we can assume 3 months in unreasonable. So A cannot order specific performance

L leases to T. T assigns to A. L sells to B. A injured by electrical wiring issue only L knew of. Who can A sue?

- L only - not T. In a sublease, T = landlord of sublesse and can be sued by sublesee. Here, it was assignment - not B. B took w/o notice

What happens if a year to year residential tenant is sent notice of a new lease for 1 year renewal + increased rent, and the tenant responds by sending a check for the old rent?

- Locked into month to month at *increased rent* - failure to object to increased rent = acquiescence - does not matter if L caches check for old rent; still due the increased difference

O conveys a life estate to A, with a remainder to B. If during A's lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, will X obtain title to the land?

- No, but X will acquire A's life estate - If a landowner does not commence an action to eject a would-be adverse possessor before the statute of limitations expires, she is barred from suing for ejectment, and title vests in the possessor. However, the statute of limitations does not run against the holder of a future interest (e.g., remainder, reversion) until her interest becomes possessory. The future interest holder has no right to possession until the prior present estate terminates, and thus no cause of action for ejectment accrues until that time.

- If an easement is said to be surcharged, this means:

- The easement's legal scope was exceeded - he holder of an easement has the right to use another's land (i.e., the servient tenement), but has no right to possess the land. The scope of an easement is determined by the reasonable intent of the original parties, and when the scope has been specified, these specifics will govern. However, when an easement's scope has been set out only in general language, courts will interpret it to accommodate the holder's present and future reasonable needs. In either event, if the easement holder uses the easement in a way that exceeds its legal scope, the easement is surcharged. The servient landowner may enjoin the excess use and possibly sue for damages if the land has been harmed. However, the easement does NOT terminate by operation of law, nor does such use give the servient owner a power of termination.

T1 has a 3 year lease. If T1 "assigns to T2 for 3 years, with a right of re-entry if T2 breaches any covenant under the original lease," T1 and T2 have entered into a _______

- assignment - *courts have held an assignment for an entire lease term + a right of reentry for breach of covenants does NOT make a sublease*

For an easement by necessity to be created, the necessity must ___

- exist after common ownership, when the owner of land sells a part of it and deprives the part sold of access to the public road

Why must a junior mortgagee be named as a party to a senior mortgagee's foreclosure action?

- it has the right to pay off the senior mortgage to avoid being wiped out by foreclosure - it is *not true* that all liens are necessary parties. Only those with interests subordinate to that of the foreclosing party must be named in the foreclosure action. Failure to name a senior interest holder does not affect that party's interest.

Implied warranty of habitability: commercial v residential leases

- only applies to residential leases

B sells to S. S took subject to mortgage. Nobody pays mortgage. what is M remedy?

1) foreclose or 2) go after B for underlying debt

An easement will not make title unmarketable if

1) the easement was visible or known to the buyer prior to closing and 2) the easement enhanced the property value - true even if it will last on the property after transfer

Mortgage 1, 20k. M1 recorded. Mortgage 2 by creditor 2 15k and recorded. Debtor gets 15k advancement on M1, raising mortgage to 35k. Recorded. Foreclosure by creditor 2 = 18k. How much does each creditor get?

15k to M2, 3k to M1 (for the advancement) - note: debtor subject to 12k advancement deficiency. Buyer subject to 20k mortgage on property - where a landowner enters into a modification agreement with the senior mortgagee that makes the mortgage more burdensome, the junior mortgage will be given priority over the modification. In particular, if a junior mortgage is placed on the property and the senior lender later makes an optional advance while having notice of the junior lien, the advance will lose priority to the junior lien. (An optional advance is one that the senior lender is not contractually bound to make.)

Excavation

A landowner has a right to have his land supported in its natural state by adjoining land. If, however, the land has buildings on it, an excavating adjacent landowner is strictly liable for damage to the buildings caused by the excavation only if the excavation would have caused the land to subside even in its natural state (i.e., without buildings). Even if the land would not have subsided in its natural state, the excavating landowner is liable for the damages if she was negligent.

When a property has a mortgage, the life tenant must pay ___

A life tenant must pay interest on any encumbrance on the land to the extent of income or profits derived from the land, but she does not have to pay principal. The remaindermen must pay the principal to protect their interest in the property.

A developer owned a large urban property, which she subdivided into 10 lots. The developer conveyed Lot 1 to an architect by a deed that contained a restriction banning commercial use of the property. The developer subsequently conveyed Lots 2 through 7 to six separate purchasers. Each of the deeds to these purchasers also contained the restriction on commercial use. The architect left Lot 1 undeveloped, but the purchasers of Lots 2 through 7 all used their lots for commercial purposes. The developer subsequently conveyed Lot 8 to a florist. The florist's deed contained the restriction banning commercial use of the lot, but he decided that he wished to use Lot 8 commercially. The developer retains ownership of Lots 9 and 10. The florist wants to bring suit to establish his rights to use Lot 8 for commercial purposes. Which of the following best describes the parties the florist should join in his lawsuit?

All landowners in the subdivision. - Under the implied reciprocal servitude theory, an implied reciprocal servitude attaches to the grantor's retained land at the moment she deeds a lot with the restriction. Thus, all of the other landowners in the subdivision could potentially enforce the covenant as an equitable servitude against the florist. All parties would probably fail in an attempt to enforce the servitude, but the florist should join them now to avoid multiple litigation. (Note that had the other landowners tried to enforce the equitable servitude against the florist, they would all have been subject to the equitable defense of acquiescence, which provides that if a benefited party acquiesces in a violation of the servitude by one burdened party, he may be deemed to have abandoned the servitude as to other burdened parties. In addition, the other commercial users are subject to the defense of unclean hands. It is important to remember that these are defenses and do not terminate the servitude; therefore, it would be best for the florist to join all possible complainants in a suit to have the servitude declared extinguished.)

A landlord who owned a strip mall entered into a written five-year lease of one of the units with a discount retail perfumery. The lease provided for a monthly rent of $1,000, payable on or before the first day of each month. The perfumery dutifully paid its rent on time for two years and three months. At that time, with the oral permission of the landlord, the perfumery transferred its interest in the remainder of the lease to a dry cleaner in writing, and added a clause requiring the dry cleaner to get permission from the perfumery for any subsequent assignments. The dry cleaner promptly paid rent to the landlord for 14 months, and then asked the landlord to approve a transfer of its interest in the lease to a video rental store. The landlord gave her oral assent. To obtain the perfumery's approval of the transfer to the video store, the dry cleaner wrote a letter to the perfumery, promising that if any problems arose and anyone tried to go after the perfumery for money, the dry cleaner would "make it good." After the perfumery sent a letter back to the dry cleaner agreeing to the transfer, the dry cleaner executed a written transfer of its interest to the video store. The video store promptly paid rent for three months. Having failed to make any profits, the video store ceased paying any rent to the landlord and cannot be located. The landlord has been unable to find anyone interested in the unit. Given that any judgment against the video store would be worthless, from whom can the landlord collect the unpaid rent owed on the lease?

Either the perfumery or the dry cleaner. - Privity of contract with perfumery. And L was the third party beneficiary of the drycleaner, perfumery, and video store agreement, so can sue DC Because the covenant to pay rent touches and concerns, and hence runs with the tenant's leasehold estate, an assignee owes the rent directly to the landlord. If the assignee reassigns the leasehold interest, his privity of estate with the landlord ends, and he generally is not liable for the subsequent assignee's failure to pay rent in the absence of a specific promise to the landlord. However, even if the assignee made no promise to the landlord but did promise the original tenant that he would pay all future rent, the landlord may sue the assignee as a third-party beneficiary of the promise to the original tenant. Here, while the dry cleaner made no promise to the landlord, the dry cleaner did make a promise to the perfumery regarding the obligation that the perfumery owed to the landlord. Thus, the landlord can sue either the perfumery or the dry cleaner for the unpaid rent.

Total v. Partial Actual Eviction

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. This covenant is breached by the tenant's total or partial actual eviction from the leased premises. 1) Total actual eviction occurs when the *landlord or a paramount title holder* excludes the tenant from the entire leased premises. This *terminates the tenant's obligation to pay rent.* 2) Partial actual eviction occurs when the tenant is excluded from only part of the leased premises. *Partial eviction* by the *landlord* relieves the tenant of the *obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder of the premises.* 3)Partial eviction by a *paramount title holder* results in an *apportionment of rent;* i.e., the tenant is liable for the reasonable rental value of the portion that he continues to possess. ex: A paramount title holder's taking possession of an unused barn constitutes partial actual eviction. Thus, rent will be apportioned. ex: landlord or a paramount title holder obtains a judgment in an ejectment action against the tenant, the total actual eviction terminates the tenant's obligation to pay rent

What must an adverse possessor do to sell title?

For an adverse possessor to sell title, they must FIRST bring suit to quiet title If they do not, then they are not giving away marketable title and buyer need not buy the land

Length of a holdover tenancy

Holdover residential tenant gets locked into a month-to-month Holdover commercial tenant gets locked into a year-to-year

Ouster

If one co-tenant wrongfully ousts another co-tenant from possession of the *whole or any part* of the premises, the ousted co-tenant is entitled to receive *her share of the fair rental value* of the property for the time she was wrongfully deprived of possession. - Ex: A brother and a sister each hold an undivided one-half interest in a tract of land. By the terms of their agreement, each has the right to possess all portions of the property and neither has the right to exclusive possession of any part. The brother wrongfully ousts the sister from the property. What can the sister recover in an action against the brother? - One-half of the fair rental value of the property for the time excluded.

How to terminate a tenancy by the entirety

It can be terminated only by: (i) the death of either spouse (leaving the surviving spouse as sole owner of the property); (ii) divorce (leaving the parties as tenants in common with no right of survivorship in most states); (iii) mutual agreement; or (iv) execution by a joint creditor of both spouses. Mere separation of the spouses (as opposed to a divorce) or execution by a creditor of one spouse does not terminate a tenancy by the entirety

Lien v Title Theory of JT

Lien Theory: a mortgage of the property by one joint tenant does not, by itself, sever a joint tenancy until default and foreclosure proceedings have been completed If JT dies before foreclosure, surviving JT takes free of mortgagee interest title theory state, a mortgage is considered to be an actual transfer of title to the property, rather than just a lien on the property. Thus, a mortgage by a joint tenant transfers the legal title of the joint tenant to the mortgagee (the money lender). This action destroys the unity of title and thus severs the joint tenancy.

Can the delivery of a will be revoked?

No - A brother and a sister held record title to a home as joint tenants with right of survivorship. The brother moved out of the home shortly after conveying his interest in the home to his friend by quitclaim deed. The friend did not record his deed. Several years later, the sister died, leaving her adopted daughter as her sole heir. Shortly after the sister died, the brother asked his friend to return his deed and give up his interest in the home. The friend agreed and returned the deed, which the brother destroyed. Who has title to the home? - Answer: friend and daughter as co-tenants (TIC) - Brother transfer made it a TIC. - Because delivery of a deed cannot be canceled, the friend's return and subsequent destruction of his deed has no effect.

Can a TIC or co-tenant demand contribution for improvements?

No -Although a joint tenant or tenant in common may have a right to compel contribution from other co-tenants for the cost of necessary repairs, taxes, and payments due on mortgages, she does not have a right to compel contribution for the cost of improvements.

A landowner validly conveyed a parcel of land to a veterinarian "for so long as the property is used as a veterinary practice, but if the property is used for any other purpose, it is to go to the American Cancer Society." Two years later, the landowner died, validly devising all of his property to his friend. The landowner's only heir is his daughter. Although this jurisdiction is a common law jurisdiction with respect to all real property considerations, the state's probate laws provide that future interests or estates in real property may be passed by will or descent in the same manner as present or possessory interests. Last month, the veterinarian approached the daughter and asked her to join with him to sell the parcel of land, which he had been using as an animal shelter, in fee simple absolute to a developer. The veterinarian and the daughter entered into a contract of sale with the developer. However, after consultation with an attorney, the veterinarian decided against the sale. The developer sued the daughter and the veterinarian for specific performance. Will the requested relief likely be granted?

No, because the friend did not join in the contract of sale. - Vet has FSD subject to friend POR - Charity and daughter had no interest

A landowner executed a will, devising a parcel of land "to my sister for life, then to my brother for life, then to my nieces and nephews." When the landowner died, he was survived by the sister and the brother's son. The sister and the brother's son contracted to sell the land to a buyer for $225,000. At the time set for closing, the sister and the brother's son tendered a quitclaim deed to the buyer, who refused to complete the sale. The sister and the brother's son bring suit against the buyer for specific performance. The jurisdiction in which the land is located does not follow the Doctrine of Worthier Title. Will specific performance likely be granted?

No, because title is unmarketable. - Here, the sister has a life estate, and the brother's son has a vested remainder subject to open because there may be other nieces and nephews born during the sister's life who become entitled to share in the remainder. Life estates and vested remainders are freely transferable, which means that the sister and the brother's son together can transfer the land to a purchaser, but the title is not marketable. It may turn out that the sister has a child, who is entitled to share in the remainder, but who did not join in the conveyance to the buyer. Because the child would not be bound by the conveyance, he would own an interest in the land. Thus, although the interests are considered alienable, the sister and the brother's son cannot convey good title because there are outstanding interests in the unborn nieces and nephews.

A seller put her house and lot on the market for $200,000. After receiving several offers within $5,000 of her asking price, the seller entered into a contract to sell the house and lot to a buyer for $200,000. The contract provided that the buyer put up $4,000 in earnest money, which the seller could treat as liquidated damages unless: The seller fails to tender marketable title to the buyer by the agreed-upon closing date, the seller commits a material breach of this contract, or the buyer dies prior to the closing date, in which case the earnest money shall be reimbursed to the buyer's estate. The contract was signed on July 24, and the closing date was set for September 12. On August 5, the buyer was seriously injured in an accident. On September 10, the buyer was released from the hospital in a wheelchair. He determined that a ranch-style house would make his life much more bearable, but the seller's home was two stories. The buyer asked the seller to cancel the contract and to refund the $4,000 earnest money. The seller refused. The buyer did not appear on the closing date. On September 16, the seller contracted to sell the home to a purchaser for $198,000. The closing occurred as planned on October 20. The buyer files suit against the seller, praying for a refund of the $4,000 earnest money. How much is the buyer likely to recover?

Nothing, because at the time the contract was entered into, $4,000 represented a reasonable estimate of damages in the event of breach. - When a sales contract provides that a seller may retain the buyer's earnest money as liquidated damages, courts routinely uphold the seller's retention of the money upon breach if the amount appears reasonable in light of the seller's anticipated and actual damages. Many courts uphold retention of earnest money of up to 10% of the sales price without inquiry into its reasonableness. In this case, the earnest money represented 2% of the purchase price. Given the fact that the seller had received other offers within $5,000 of the price offered by the buyer, $4,000 would be a reasonable estimate of damages if the seller were forced to accept another offer. - buyer had no justificatin to not perform

Fixtures: commercial v residential lease

Residential pieces of property: It is a fixture if removing the chattel will cause substantial damage to the property. If substantial damage, there infers intent for it to remain indefinitely, and therefore tenant cannot remove Commercial pieces of property: trade fixtures doctrine - a commercial tenant can remove all trade fixtures prior to lease expiring. Exception: cannot remove structural additions to the real property (ascessions. Ex: balcony, deck, loft, beam)

Scope of an Easement

Scope of an easement is determined by terms of the grant or the conditions that created it. 1) Ex: A grants B an easement to use A's private road (#1) to get to and from B's parcel, Black (#2). B has an easement appurtenant to B's dominant land. A's parcel is servient. -- Subsequently, B purchases the adjacent Green, with its small marina. May B unilaterally expand the use of the easement to benefit Green? NO, unilateral expansion is NOT allowed.

As a result of a personal injury lawsuit, a victim obtained a judgment against a tortfeasor for $100,000. The tortfeasor, who had few assets, did not pay the judgment. On April 1 of the following year, the tortfeasor inherited a parcel of land from her uncle. On May 1, the tortfeasor entered into a contract with a buyer to sell the land for $120,000. The contract was not recorded. The buyer immediately applied to a bank for a loan of $100,000. The bank approved the buyer's loan, and on May 15, a closing was held. The tortfeasor deeded the land to the buyer, and the buyer executed a mortgage for $100,000 to the bank. Due to an error by the title company, the deed from the tortfeasor to the buyer was not recorded, although the mortgage to the bank was recorded. Neither the buyer nor the bank had any knowledge of the victim's judgment. On May 20, the victim recorded his judgment in the county recorder's office where the land was located. At that time, he had no knowledge of the buyer's or the bank's rights. When he learned about them, he immediately brought a proceeding to foreclose his judgment lien, naming the tortfeasor, the buyer, and the bank as parties. The jurisdiction has a typical grantor/grantee recording index, and has enacted the following statute: "Any judgment properly filed in the county recorder's office shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered. No conveyance or mortgage of real property shall be good against subsequent bona fide purchasers for value and without notice unless the same be recorded according to law." As between the victim and the bank, which party's interest in the land will be given priority?

The bank, because the victim is not protected by the recording statute. - The victim will not likely prevail against the bank because a majority of courts hold that the judgment lienor is not protected by the recording statute. If the statute here, which is a notice statute, were applicable to protect the victim, he would have priority over the bank because his judgment lien was recorded before the buyer's deed was recorded. Under this view, the bank's mortgage would have been considered "wild" and would be deemed unrecorded because the preceding conveyance, the buyer's deed, was actually unrecorded. A searcher in the public records would therefore have been unable to find the mortgage. Hence, if the statute were applicable to protect the victim, he would have priority over the bank. However, most courts reason that either (i) a judgment creditor is not a bona fide purchaser because he did not pay contemporaneous value for the judgment, or (ii) the judgment attaches only to property "owned" by the debtor, and not to property previously conveyed away, even if that conveyance was not recorded. Under the statute in the present question, a judgment does not attach until it is recorded. Here, the victim's judgment did not attach to the land until after the bank obtained a mortgage on it, and the recording statute does not change that result. The failure of the buyer to record, and the resultant treatment of the bank as unrecorded, is irrelevant. Thus, the bank's mortgage is superior to the victim's lien.

A buyer entered into a contract with a seller to purchase the seller's farm. The contract of sale referred to the farm as containing 250 acres. The agreed-on price was $1 million. Before the date on which escrow was to close, the buyer learned from a surveyor he had hired that the farm actually contained 248 acres. On the date the sale was to close, the buyer instructed the escrow agent to release all but $8,000 of the purchase money because he was not getting what he bargained for. The seller refused to proceed with the sale. The buyer brings an action for specific performance and also seeks an $8,000 reduction of the agreed-upon contract price. What will be the probable outcome of the litigation?

The buyer will win, if the court finds that the $8,000 reduction in price is a fair reflection of the title defect. - When a buyer has a remedy of specific performance in a land sale contract, a court of equity will order a seller to convey the title if the buyer tenders the purchase price. If the seller cannot provide marketable title under the terms of the contract, but the buyer wishes to proceed with the transaction, the buyer can usually get specific performance with an abatement of the purchase price in an amount reflecting the title defect. A defect as to the quantity of land conveyed is usually corrected by a pro rata abatement of the price.

A seller entered into a written contract to sell her land to a buyer for $200,000. Before the closing date, the buyer received the title search report, which indicated that a rancher conveyed the land to a farmer by quitclaim deed 25 years ago and that a landowner conveyed the land to the seller by warranty deed 13 years ago. The buyer notified the seller that the records did not indicate how the land was conveyed to the landowner (the seller's immediate transferor), and that the buyer was concerned about this. The seller replied that she had no knowledge of the matter but would look into it. At the date and time appointed for closing, the seller informed the buyer that she could not locate the landowner or obtain any information as to the conveyance of the land to him. On hearing this, the buyer refused to tender the purchase money, and told the seller that he was rescinding the contract. The seller sued the buyer for specific performance. Which party is more likely to prevail?

The buyer, because the seller cannot supply marketable title. -If the buyer determines, prior to closing, that the seller's title is unmarketable, he must notify the seller and allow a reasonable time to cure the defect. If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can rescind, sue for damages caused by breach, or obtain specific performance with an abatement of the purchase price. Here, the title search report fails to indicate how title to the land left the farmer and was conveyed to the landowner. This in turn indicates that some records are missing from the report. The fact that records are missing would create in a reasonably prudent buyer a doubt as to the probability of being subjected to a lawsuit by, e.g., the farmer or someone else who might claim rightful title to the land on the basis of the landowner's conveyance to the seller being fraudulent or otherwise invalid. Consequently, the seller's title to the land was unmarketable. It is the seller's inability to make good her title by the closing date that permits the buyer to rescind the contract and prevents the seller from being able to specifically enforce the contract. It is true that, as (C) states, there is a gap in the title. However, this gap does not by itself render title unmarketable. Rather, it is the seller's inability to establish a record chain of title or otherwise satisfactorily explain the gap by the closing date, after being notified of it, that renders title unmarketable.

A doctor and a lawyer owned adjoining parcels of land. Ten years ago, the doctor installed a swimming pool on her land. The doctor obtained the lawyer's oral consent to run plumbing from the pool across part of the lawyer's land. Last year, the lawyer sold his land to a buyer. The buyer wants to plant a garden on the land under which the doctor's plumbing runs, and wants to eject the doctor and quiet title. The statute of limitations for ejectment is seven years. With respect to the land under which the plumbing was laid what, if anything, has the doctor acquired?

The doctor has acquired neither title by adverse possession nor a prescriptive easement. - Here, although the doctor's use and possession of the lawyer's land was actual, exclusive, open, notorious, and continuous throughout the seven-year statutory period, the doctor used the land with the lawyer's consent, and there are no facts to indicate that the doctor in any way manifested an intention to claim the land as her own. Therefore, the "hostile" requirement is not met

A landowner owned a large parcel of land that he divided into two equal parcels. Thirty years ago, the landowner deeded the eastern parcel to a purchaser by warranty deed, including an easement over the south 25 feet of the western parcel for access to the navigable river that ran along the westerly boundary of the western parcel. The landowner acknowledged the deed and easement, and the purchaser recorded the document. The recording officer maintains an alphabetical grantor-grantee index, but no tract index. The purchaser made no use of the easement until five years ago, one year after her neighbor had purchased the western parcel from the landowner. The neighbor had paid at least market value for the western parcel and was not aware of the purchaser's easement. The neighbor objected to the purchaser's use of the easement shortly after she began using it, but the purchaser paid no attention. The neighbor sues the purchaser to quiet his title and to restrain the purchaser from using the easement over the western parcel. The purchaser has reasonable access to a public highway on the easterly boundary of the eastern parcel. If the purchaser is successful, what is the likely reason?

The easement is a legal interest in the neighbor's chain of title even though there is no tract index. - Easement appurtenant. Burden passes unless BFP for value w/o notice. Here he had record notice - The absence of a tract index does not require a purchaser to inquire about the riparian rights of abutting landowners.

Statutory redemption is the right of a mortgagor to recover the land after the foreclosure sale has occurred, usually by paying __________.

The foreclosure sale price

An entrepreneur opened a specialized business on her land. After using up most of her capital to purchase inventory, however, the entrepreneur needed more funds and asked her friend for a $30,000 loan, to be secured by the business's inventory. The friend declined the loan. A desperate entrepreneur then told the friend she would convey the land, which had a fair market value of $100,000, to him if he would give her the loan at the current market rate of interest. The friend agreed, and the entrepreneur conveyed the land to the friend the next day. At that time, the friend gave the entrepreneur $30,000 in cash, and the parties orally agreed that the entrepreneur would pay the friend back at the rate of $1,000 per month, and that after the loan was paid in full, the friend would reconvey the land to the entrepreneur. The friend immediately recorded his deed to the land. The entrepreneur made three $1,000 payments to the friend and then paid no more. She continued to live on the land but, being very much in debt, could not repay the loan. The friend, meanwhile, had received an offer to buy the land for $100,000. Which of the following most accurately states the friend's right to sell the property?

The friend may sell the land only after formally foreclosing on the property. - If a deed is given for security purposes rather than as an outright transfer of the property, it will be treated as an "equitable" mortgage and the creditor will be required to foreclose it by judicial action like any other mortgage. In determining whether an absolute deed is really a mortgage, the court considers the following factors: (i) the existence of a debt or promise of payment by the deed's grantor; (ii) the grantee's promise to return the land if the debt is paid; (iii) the fact that the amount advanced to the grantor/debtor was much lower than the value of the property; (iv) the degree of the grantor's financial distress; and (v) the parties' prior negotiations. Here, the entrepreneur owed the friend a debt; the friend promised to return the property if the debt was paid; the amount advanced ($30,000) was much lower than the value of the property ($100,000); the entrepreneur was in great financial distress; and the parties' negotiations reveal that this transaction was intended as security for the loan. Thus, the friend must bring a judicial foreclosure proceeding before he can sell the land.

A landowner's will left his ranch to a rancher, his heirs, and assigns, so long as the property was used exclusively for ranch purposes, then to the landowner's grandson. The remainder of the landowner's property passed through the residuary clause of his will to the grandson. Seven years after the landowner's death, the rancher began strip mining operations on the ranch. The grandson brought an action to quiet title to the ranch against the rancher, and the rancher counterclaimed on the same theory. Who should prevail?

The grandson, pursuant to the residuary clause. - RAP violation would get rid of the executory interest. However, it would still be a FSD with the landowner having a POR. Since he took the residuary clause, Grandson took the POR.

A property owner owned a tract of commercial property that he conveyed in joint tenancy to his twin sons as a birthday present. Unfortunately, a few years after the conveyance, the property owner and his sons had a serious falling out over how to run the family business. The property owner no longer wished the sons to control valuable commercial property, and so he demanded that they return the deed with which he conveyed the property to them. The sons returned the deed, and the property owner destroyed it. A few months later, one of the twins learned that he was seriously ill and not likely to live much longer. He executed a quitclaim deed conveying "any interest I have in the commercial property conveyed to me and my brother from my father" to his daughter. The twin who conveyed the property subsequently died. Who owns the property?

The living twin and the deceased twin's daughter as tenants in common. - A conveyance of a co-tenant's interest in joint tenancy property severs the joint tenancy, and that interest is subsequently held as a tenancy in common with the other co-tenants

A landowner conveyed land to her niece for life, then to her friend and his heirs. The friend died before the niece, survived by the friend's heir. The friend left a will devising his interest in the land to his neighbor.At the death of the niece, who is entitled to possession of the land?

The neighbor is entitled to possession because the friend had a vested remainder. The language "and his heirs" does nothing; it is just another way to phrase a grant of a fee simple absolute. Thus, the gift to the "friend and his heirs" gave the friend an indefeasibly vested remainder in fee simple. Vested remainders are devisable by will. Thus, the friend had the power to devise his interest to his neighbor, which he did. Therefore, the neighbor takes the land after the niece's death.

An owner of a parcel of land instructed his lawyer to draw up an instrument deeding the land to his friend's "nieces." The owner acknowledged the deed before a notary and signed it. As directed by the owner, the lawyer recorded the deed and then returned it to the owner. The owner put the deed in the drawer of his desk, intending to present it to the friend's nieces when they came to visit him next month. The following week, however, the owner died, leaving his daughter as his sole heir at law. The daughter discovered the deed to the land in the owner's desk. She filed an appropriate action to quiet title in the land, naming the friend's only two nieces as defendants. The only evidence presented at the trial was the deed itself, the evidence of recordation, and the lawyer's testimony regarding the owner's intent. Who should the court rule owns the land?

The nieces, because recordation of a notarized deed is prima facie evidence of delivery. - To be valid, a deed must be "delivered," which means that the grantor must have taken some action (not necessarily a manual handing over of the deed) with the intent that it operate to pass title immediately. Recording a deed that has been acknowledged before a notary is such an action and is presumed to carry with it the requisite intent. Even without the knowledge of the grantee, delivery to the recorder's office will satisfy the delivery requirement. If the grantor intends the recording of the document to be the final act in vesting title in the grantee, then such recording constitutes delivery.

A seller entered into a written contract to sell a tract of land to a buyer. The buyer was to pay $1,500 per month for five years, at which time the seller would deliver a warranty deed. The contract was silent as to the quality of title to be conveyed. After making 12 payments, the buyer discovered that a neighbor had an easement of way over the land, which was not discussed at the time the seller and buyer entered into the contract. The neighbor had not used the easement over the previous year because she had been out of the country. On the basis of the easement, the buyer wishes to cancel the contract. Which party is more likely to prevail?

The seller, because the buyer has no basis on which to rescind the contract. - no breach of covenant of marketable title: If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can rescind, sue for damages caused by the breach, or obtain specific performance with an abatement of the purchase price. However, the buyer cannot rescind prior to closing on grounds that the seller's title is unmarketable. Where an installment land contract is used, the seller's obligation is to furnish marketable title when delivery is to occur, e.g., when the buyer has made his final payment. Thus, a buyer cannot withhold payments or seek other remedies on grounds that the seller's title is unmarketable prior to the date of promised delivery. Here, there is a valid easement on the property (see below), but the seller has four years in which to cure this defect. Thus, the buyer cannot yet rescind on grounds that title is unmarketable. - no breach of covenant against encumbrances: The covenant against encumbrances is a covenant contained in a general warranty deed which assures that there are neither visible encumbrances (e.g., easements) nor invisible encumbrances (e.g., mortgages) against the title or interest conveyed. This covenant is breached, if at all, at the time of conveyance. Here, the deed has not yet been delivered, and thus this covenant has not yet been breached.

Shortly before their wedding, a man and a woman bought a tract of land, taking title in both names. They had intended to build a summer cottage there, but many years after their marriage the land was still a vacant lot. The man decided that their introverted son would have more confidence if he were a landowner; thus, the man drew up a deed conveying a one-quarter interest in the land to him. Not wanting to show favoritism, two weeks later the man drew up a deed conveying a one-quarter interest in the same land to their daughter. Who owns the land?

The son has a one-quarter interest, the daughter has a one-quarter interest, and the woman has a one-half interest. - There is a presumption that the man and woman are tenants in common. For a joint tenancy to exist, there must be an express creation of such tenancy; thus, there is a presumption of tenancy in common unless the conveyance is to a husband and wife in a state that recognizes tenancy by the entirety. Here, the man and woman were not married when they took title to the land. Each tenant in common has an undivided interest, which may be conveyed by inter vivos transfer. The man started with an undivided one-half interest, one-half of which he conveyed to his son and the other half of which he conveyed to his daughter.

Adverse Possession and SOL running against future interests

The statute of limitations that determines the time period for adverse possession does not run against the holder of a future interest (e.g., a remainder) until that interest becomes possessory, because the holder of the future interest has no right to possession (and thus no cause of action against a wrongful possessor) until the prior present estate terminates. - i.e. if it ran 8 years against current interest, then thecurrent interest holder died, then ran 4 years against the future (now current) interest holder, and SOL for AP is 10 years, the AP LOSES because it ran only 4 years against the current holder.

A landlord leased residential property to a tenant. The written lease was for a period of one year, with the monthly rent of $1,000 payable on or before the first of each month. The termination date set out in the lease was October 1. On August 10 of the first year of her tenancy, the tenant received a letter from the landlord along with a new lease form. The lease was for a period to terminate on October 1 of the following year, and the rent stated in the new lease was $1,200 per month. Both the rent increase and the notice given were in full compliance with relevant state statutes. An accompanying letter, signed by the landlord, asked the tenant to sign the lease on the line marked "tenant." On September 15, the tenant sent the lease back to the landlord unsigned. On September 20, the tenant sent a letter to the landlord by certified mail. The landlord signed the return receipt, which the post office duly sent to the tenant. Enclosed with the tenant's letter was a check for $1,000 for "next month's rent." The landlord deposited the check into his bank account. With the landlord's acquiescence, the tenant remained in possession after October 1. Which of the following statements is most accurate?

The tenant has a month-to-month tenancy at $1,200 monthly rent. - month to month because its a residential lease - While the terms and conditions of the expired tenancy generally apply to the new tenancy, if the landlord notifies the tenant before termination that occupancy after the termination date will be at an increased rent, the tenant will be held to have acquiesced to the new terms if she does not surrender. This is so even if the tenant objects to the increased rent, as long as the rent increase is reasonable. - *failure to respond to rent increase = acquiescence in rent increase*

An uncle validly executed and notarized a deed conveying his beach house to his nephew, and then validly recorded the deed. When the nephew, who was experiencing financial difficulties, learned of the recordation of the deed, he immediately told his uncle that he did not want the beach house and could not accept such an expensive gift anyway. Later, the nephew filed for bankruptcy and the trustee in bankruptcy asserted an ownership interest in the beach house on behalf of the debtor's estate. The bankruptcy court ruled that the property belonged to the uncle and not to the nephew, and thus was not part of the debtor's estate subject to distribution. Which of the following is the strongest reason in support of the bankruptcy court's ruling?

There was never an effective acceptance of delivery of the deed by the nephew. - If the grantor intends the recording of the deed to be the final act in vesting title in the grantee, then such recording creates a presumption of delivery even where the grantee did not know of the recordation. Further, in that case knowledge or consent by grantee is not required for the delivery to be accepted. BUT that did not happen here; uncle intended delivery to be the in person handing of deed - Had the nephew accepted the gift (completing the conveyance) and later changed his mind, the nephew would have had to execute a new deed to convey the property back to the uncle.

Merger of Contract and Deed

Under the doctrine of merger, the contract merges into the deed, and the terms of the contract are meaningless. Even though the contract specified a "good and marketable title," it is the deed that controls, and the deed contained no covenants of title. A deed does not incorporate the title terms of a contract.

An investor owned a 100-acre parcel that contained several natural asphalt lakes. A construction company was erecting highways for the state in the vicinity of the investor's land and needed a supply of asphalt. The investor executed a document that, in return for a payment of $1 per barrel, gave the company the right to enter on the land and take asphalt in whatever quantities the company desired. The investor reserved the right to remove asphalt herself and to grant this right to others. Last year, the state commenced an action in eminent domain to take the investor's land for a public park. Is the construction company entitled to compensation?

Yes, because the company has a nonexclusive profit, which is a property right for which it is entitled to compensation. - . Like an easement, a profit is a nonpossessory interest in land. The holder of the profit is entitled to enter on the servient tenement and take the soil or the substance of the soil (e.g., minerals, timber, oil, or game). When an owner grants the sole right to take a resource from her land, the grantee takes an exclusive profit and is solely entitled to the resources, even to the exclusion of the owner of the servient estate. By contrast, when a profit is nonexclusive, the owner of the servient estate may grant similar rights to others or take the resources herself. Although here the profit is nonexclusive, it is nevertheless an interest in property for which the company is entitled to compensation in any condemnation proceeding.

A landowner owned a large tract of land in an area zoned for medium residential use. Permitted uses in this zone are single-family dwellings, condominium and townhouse developments, and moderate density apartment complexes. The landowner subdivided her land into 10 lots and conveyed each lot by a deed restricting the land to single-family use. All deeds were duly recorded and all lots were developed as single-family homes. The owner of lot 1 died and his property passed by will to his niece. Some time later, the owner of lot 3 sold his property to a buyer by a deed that did not contain the covenant limiting use to single-family dwellings. The buyer subsequently sold lot 3 to her friend, and did not include the covenant in the deed. Both deeds were duly recorded. A storm destroyed the friend's home, and in its place he began to build a three-unit townhouse. May the niece sue to enforce the covenant against the friend to prevent him from building the townhouse on lot 3?

Yes, because the friend's townhouse would alter the landowner's common scheme. - For successors of the original promisee and promisor to enforce an equitable servitude, both the benefit and burden of the servitude must run with the land. For the burden to run and thus bind the successor of the promisor (the friend): (i) the covenanting parties must have intended that the servitude be enforceable by and against assignees; (ii) the covenant must touch and concern the land; and (iii) the party to be bound must have had actual, constructive (record), or inquiry notice. The common scheme (all 10 lots were developed as single-family homes) is evidence that the original parties intended that the restriction be enforceable by assignees. The covenant touches and concerns the friend's property because it restricts him in his use of the property. The friend had constructive and inquiry notice because the restriction is in his chain of title. Therefore, the burden of the servitude runs with the land. The next issue is whether the benefit of the servitude runs with the niece's land. For a benefit to run, it must be so intended by the original parties and the covenant must touch and concern the land. As noted above, intent may be inferred from the common scheme. The benefit touches and concerns the niece's land because it benefits her in her use and enjoyment of the lot. Thus, the niece may enforce the covenant.

Can a TIC or co-tenant mortgage their interest?

Yes, so long as its only their interest

A landowner owned a tract of land in fee simple with no encumbrances. In January, the landowner properly executed a deed conveying an undivided two-thirds interest in the land to a husband and wife as joint tenants with right of survivorship. In February, the landowner properly executed a deed conveying an undivided one-third interest in the land to the wife's nephew, who was 14 years old at the time. No actual consideration was paid for the deeds.The landowner handed the two deeds to the wife and told her to give the appropriate deed to her nephew. The wife promptly and properly recorded the deed to her husband and herself, but she put the deed to her nephew in a desk drawer and did not record it.A few days later, the wife is killed in a car accident. Who has what interest in the land?

husband 2/3, nephew 1/3 - The fact that the nephew is a minor and his deed was not recorded does not defeat the conveyance. A minor may hold title to real property. Recordation is not essential to the validity of a deed as between the grantor and grantee; however, a grantee who fails to record may lose his interest to a subsequent bona fide purchaser. Delivery of the deed is required for a valid transfer, but "delivery" means words or actions that show the grantor intended title to pass immediately and irrevocably. When the grantor here gave the deeds to the wife, he clearly intended to pass title to his land.

Judgment Liens and Recording statutes

most courts reason that either (i) a judgment creditor is not a bona fide purchaser because he did not pay contemporaneous value for the judgment, or (ii) the judgment attaches only to property "owned" by the debtor, and not to property previously conveyed away, even if that conveyance was not recorded.

If an adverse possessor uses land in violation of a recorded real covenant for the limitations period, she:

takes title free of the covenant even if she had knowledge of it

At common law, a conveyance of property from O "to O and A as joint tenants with right of survivorship" creates a _____

tenancy in common - no TTIP