Property
Scope of Easement
even though the utility company's planned use and the written easement are not exactly the same thing, the scope of the easement is the same. Changes in use are examined for reasonableness, as there is the assumption that the original parties contemplated the easement's present and future use.
New Construction
A builder or other commercial seller of a newly constructed residence gives a warranty of fitness or suitability to the buyer. When this warranty is not mandated by statute, the courts have implied such a warranty. The warranty covers material defects that could not have been uncovered by the buyer through a reasonable inspection prior to purchase. Replacing the doctrine of caveat emptor ("let the buyer beware"), a warranty of fitness or suitability (or a warranty of quality, workmanlike construction, performance, or habitability) is implied in almost all jurisdictions in a contract for the sale of a newly constructed residence. In some jurisdictions, the warranty extends to the repair or remodeling of an existing residence and even to related structures (such as a detached garage or a retaining wall).
mortgagee in possession
A mortgagee in possession assumes a duty to take reasonable care of the property, and she incurs liability as if she were the owner. Generally, a mortgagee is not entitled to take possession of the mortgaged property in a lien jurisdiction because title to the property remains in the mortgagor until the mortgage is foreclosed. However, when the mortgagor abandons the mortgaged property, the mortgagee may take possession of the property in order to protect its interest in the property, even though the mortgagor is not in default of its loan.
Duty to Repair: Residential Leases
A residential lease generally cannot place the duty to make repairs on the tenant, and a provision to that effect is void. This would certainly be true if the need for the repairs did not arise from the tenant's acts and the tenant promptly notified the landlord of the need for such repairs
Part Performance of real estate contract
Although a promise to transfer or receive any interest in real property is within the Statute of Frauds and therefore must be in writing and signed by the party against whom enforcement is sought, subsequent acts by either party that show the existence of the contract may make it enforceable. Most jurisdictions require two of the three following acts to establish sufficient part performance: (i) payment of all or part of the purchase price; (ii) possession by the purchaser; or (iii) substantial improvement of the property by the purchaser. Here, the investor has at least met requirements (i) and (iii) and, depending on the court's interpretation, possibly (ii). The oral agreement is therefore likely enforceable.
Liability of Members of Condo
Although each member of a condominium association owns the common areas of the condominium as a tenant-in-common with the other members, the member is only indirectly responsible for a tort judgment against the association. Payment of the tort judgment by the association is an expense of the association, and each member is liable for a share of the association's expenses.
A buyer and a seller entered into a written contract for the sale of residential property. The contract did not specifically impose a duty of marketable title on the seller. The buyer put a down payment into an escrow account after the parties signed the contract. One month before the parties were to close on the sale, the buyer learned that the seller's neighbor had an easement on the property. The seller assured the buyer that he was in negotiations with the neighbor to release the easement, and that the seller was confident that the neighbor would sign something to release it before closing. Unconvinced, the buyer brought suit to rescind the contract and to recover the down payment that he had placed in escrow.Is the buyer likely to succeed in his suit? A No, because the seller is not required to deliver marketable title until closing. B No, because the contract did not specifically impose a duty of marketable title on the seller. C Yes, because the easement renders the title unmarketable. D Yes, because the contract had not yet merged with the deed
Answer choice A is correct. Absent contrary language, an implied covenant of marketable title is part of a land sales contract, regardless of the type of deed created. Defects in title rendering title unmarketable include private encumbrance, such as an easement. However, unless otherwise agreed, the seller is not required to deliver marketable title until the closing. In this case, the buyer's suit is premature. Answer choice B is incorrect because the duty of marketable title is implied as part of a land sales contract unless the parties agree otherwise. Answer choice C is incorrect because, although the title is unmarketable, the buyer cannot rescind the contract unless the seller fails to deliver marketable title as of the closing, which has yet to occur. Answer choice D is incorrect because, although it is true that the contract and title had not yet merged (they will not merge until the deed is delivered), this would not give the buyer grounds to rescind the contract.
A man owned a residence in fee simple absolute. The man was an avid gardener, and had imported many valuable trees that he planted around the property. At his death, the man devised the residence to his daughter for her life, and upon her death to his son. Over the objection of the son, who wanted the residence inhabited only by family members, the daughter rented the residence to a friend for its fair market value. Although she received rental income significantly in excess of the amount of the mortgage, she refused to pay the mortgage and insisted that she would pay only the interest on the mortgage. Despite the son's urging, the daughter also refused to insure the property. The son thus paid for insurance on the property and the mortgage principal. Finally, without the son's knowledge or consent, the daughter cut down all the trees on the property.What is the son's best argument that he is entitled to damages from the daughter? A The daughter cut down the trees on the property. B The daughter refused to pay the mortgage. C The daughter refused to insure the property. D The daughter rented the property over the objection of the son.
Answer choice A is correct. The rights of a holder of any estate but a fee simple are limited by the doctrine of waste. In this case, the son, as the remainderman, may bring suit for damages based on the daughter's removal of valuable trees from the property under the doctrine of affirmative waste. Answer choice B is incorrect because, although a life tenant is responsible for the interest on a mortgage to the extent the property can produce income, the life tenant is not responsible for the mortgage principal. Answer choice C is incorrect because a life tenant is under no obligation to insure the property for the benefit of the remainderman. Answer choice D is incorrect because a life tenant has the right to lease, sell, or mortgage his interest in the property (i.e., right of alienation).
In order to finance the purchase of a property, the buyer received a loan and in return gave the lender a promissory note secured by a mortgage on the property. Subsequently, the buyer divided the property into two parcels, retaining one of the parcels and selling the other to a friend. The friend took the parcel subject to the mortgage. The buyer and the friend agreed that each would be liable for one-half of the outstanding mortgage. One year later the buyer disappeared. Since the buyer was no longer paying one-half of the mortgage obligation, the lender threatened to foreclose on the property. The friend paid off the outstanding balance of the loan. The applicable jurisdiction recognizes the lien theory of mortgages. Can the friend bring a foreclosure action against the buyer's parcel? Answer Choices :Yes, because the friend is subrogated to the lender's rights in the parcel. Yes, because the friend obtained ownership rights in his own parcel by purchase. No, because the friend does not have an ownership interest in the parcel since the jurisdiction adheres to the lien theory of mortgages. No, because the friend was not under a legal duty to pay the buyer's portion of the mortgage.
Answer choice A is correct. Since the friend paid the buyer's loan obligation in full in order to protect his own interest, the friend became subrogated to the lender's rights based not only on the personal obligation of the buyer, but also on the mortgage on the land itself. Answer choice B is incorrect because the way in which the friend acquired his interest in his own parcel is irrelevant to the issue of subrogation. Answer choice C is incorrect because, while the friend does not have an ownership interest in the buyer's parcel, the friend may nevertheless seek to foreclose on the mortgage on that parcel, which it holds through its right of subrogation. Answer choice D is incorrect because, although payment of another person's obligation that is secured by a mortgage, by a person who is under a legal duty to do so, can give rise to the right of subrogation, payment of such an obligation by a person in order to protect his property interest is also entitled to subrogation.
The owner of a vacation home in fee simple devised the vacation home as follows: "to my son for life, and then to my grandchildren, regardless of when born, who reach the age of 21." The owner was survived by his son and only one grandchild, a granddaughter, who was 25 years old.The jurisdiction continues to adhere to the common law Rule Against Perpetuities and applies the rule of convenience when applicable to save a property interest.Which of the following most accurately describes the future interests in the vacation home held by the owner's grandchildren? A The owner's granddaughter has a vested remainder subject to open; the owner's unborn grandchildren have remainders contingent upon reaching age 21. B Because the granddaughter has reached the age of 21, the rule of convenience closed the class; upon the death of the owner's son, the granddaughter alone would be entitled to the home. C Because the owner's granddaughter initially had a vested remainder in the home, the Rule Against Perpetuities does not apply to her interest; upon the death of the owner's son, the granddaughter alone would be entitled to the home. D Any future interests held by the owner's grandchildren are void under the Rule Against Perpetuities because of the "bad as to one, bad as to all" principle.
Answer choice A is correct. With regard to contingent remainders and vested remainders subject to open, the Rule Against Perpetuities (RAP) provides that they are valid only if they must vest or fail by the end of a life in being plus 21 years. Here, the granddaughter who had reached the age of 21 at the time of the owner's death has a vested remainder. This interest is a remainder because it is a future interest created in a grantee that is capable of becoming an estate that is presently possessory upon the natural expiration of a prior possessory estate (e.g., a life estate, estate for years) that was created in the same conveyance in which the remainder was created. It is vested because it is not subject to any conditions precedent (the granddaughter is 25 years old) and was created in an ascertainable grantee. This vested remainder is subject to open because the owner's son could have one or more children who could reach the age of 21 and thereby become entitled to a share of the home. Although they would not be lives in being for purposes of the RAP, their parent (i.e., the owner's son) is a life in being. As it will be known no later than 21 years after the death of the son whether the grandchildren's remainder interests will vest, their contingent remainder interests do not violate the RAP. Answer choice B is incorrect. The rule of convenience, which is a rule of interpretation, can operate to prevent the application of the Rule to a class transfer. Under this rule, membership in a class closes whenever any member of the class is entitled to immediate possession of a share of the class gift. Since the rule of convenience is a rule of interpretation, it does not apply when the grantor specifies that the class should remain open even though a member of the class is entitled to immediate possession of a share of the class gift. Here, the rule does not apply to close the class because the owner specifically indicated by including the language "regardless of when born" that he wanted all of his grandchildren, even those born after his death or the death of his son, to have an interest in the home. Answer choice C is incorrect. Although generally the RAP does not apply to vested remainders, it does apply to vested remainders subject to open. As discussed with regard to answer choice A, the granddaughter who is 25 years old has a vested remainder subject to open because the owner's unborn grandchildren could also be entitled to share in the ownership of the home. Answer choice D is incorrect. With respect to class gifts, if the RAP voids the gift to any member of the class, the gifts to all members of the class are also void. Here, however, the RAP does not void the devise to any of the owner's grandchildren as their interests will vest, if at all, by the end of a life in being (the son) plus 21 years.
A homeowner owned a one-story residence that was situated on a small lot located immediately outside of the boundary of a municipality. A business bought undeveloped property that included land adjacent to the residence, but within the boundary of the municipality. While the homeowner was away for the summer, the business, having secured all of the necessary building permits, began excavation on its property to build a five-story office building with an underground garage for tenant parking. The proposed structure complied with the zoning regulations of the municipality. Even though the business used reasonable care in excavating the land, the homeowner, upon her return, discovered serious damage to her residence that had been caused by the subsidence of her land as a consequence of the excavation. The subsidence would have occurred even if her lot had not been improved by the residence.The homeowner sued the business to compensate her for the damage to her residence. How should the court rule? A For the homeowner, because the business is strictly liable for any damage to the residence as it predated the excavation. B For the homeowner, because her land would have subsided even if her lot had not been improved by the residence. C For the business, because the excavation was performed with reasonable care. D For the business, because the business had secured the necessary building permits and complied with the zoning regulations.
Answer choice B is correct. A landowner has a right to lateral support from adjoining land. If the adjoining land has been improved (i.e., is not in its natural state), the excavating landowner is strictly liable for any damage caused by the excavation only if the land would have collapsed in its natural state (regardless of the improvement). Here, the business is strictly liable for the damage that has occurred to the homeowner's residence because the homeowner's land would have subsided even if the land was not improved with her residence. Answer choice A is incorrect. Although the business is strictly liable for the damage to the homeowner's residence, it is not because the residence predated the excavation, but because the homeowner's land would have subsided even if the land was not improved with her residence. Answer choice C is incorrect. When an improvement to property contributes to the collapse of the land as a result of excavation on adjoining property, the landowner of the improved property may recover only if the excavating landowner was negligent. However, when an improvement does not contribute to the collapse, the excavating landowner is strictly liable for the resulting damage to the improvement. Therefore, the fact that the business acted with reasonable care will not prevent the homeowner from recovering damages resulting from the excavation. Answer choice D is incorrect because compliance with building ordinances and zoning regulations does not absolve a property owner from a violation of a neighboring landowner's right to have her land supported.
A widow transferred land that she held in fee simple to her only heir, her nephew, for his life, to her nephew's wife for the wife's life if she survived him, and then to any of the nephew's children who reached the age of 21. The widow later died intestate. Shortly after the widow's death, her nephew and his wife had their first and only child, a daughter. Five years ago, immediately prior to dying, the nephew's wife transferred her interest in the land to her daughter. One year ago, when the daughter was 18 years old and possessed legal capacity to transfer real property, she sold any interest she then owned in the land to a speculator. Recently, the nephew died and left everything to his daughter by his will. The jurisdiction recognizes the majority rule regarding inter vivos transfers of contingent remainders and executory interests.Which of the following would be the daughter's best argument that she is entitled to current possession of the land? A The daughter was transferee of her mother's interest in the land. B The daughter took the nephew's interest in the land upon his death. C The daughter's contingent remainder in the land was not transferable inter vivos. D The daughter was the only child of the nephew and his wife.
Answer choice B is correct. At the time of the widow's death, the nephew held a life estate, his wife a contingent life estate, any children of the nephew a contingent remainder, and the widow's estate a reversionary interest. Because the widow died intestate, the reversionary interest passed to the widow's only heir, the nephew. Upon the nephew's death, his life estate terminated and the reversionary interest was transformed in the current possessory interest in the land (i.e., a fee simple subject to an executory interest). This fee simple estate passed by the terms of the nephew's will to the daughter. However, at the time of the daughter's sale of any interests in the land to the speculator, the daughter had only a contingent remainder, which, upon her father's death, became a springing executory interest. This interest is not a current possessory interest. It will become one, if at all, only when the daughter reaches age 21. Accordingly, the speculator does not have a current possessory interest. Answer choice A is incorrect because the nephew's wife held only a contingent life estate in the land. This interest, which was transferred by the nephew's wife to her daughter inter vivos, terminated upon the death of the nephew's wife, since she did not survive her husband. Answer choice C is incorrect because, in most states, a contingent remainder may be transferred inter vivos. Answer choice D is incorrect because the daughter's status as a child of the nephew and his wife is relevant only with respect to her rights to the contingent remainder/springing executory interest, which is not a current possessory interest.
A developer purchased a 60-acre parcel of wooded land and divided the parcel into 20 three-acre lots. The developer advertised the rustic character of the lots and the intent to sell the lots for development as single-family residences. This was in conformity with the zoning restrictions on the land, which required that the land be used for residential purposes and that the size of each lot not be less than two acres. Over a period of several years, the developer sold 15 of the lots. The deed for each of these lots contained the following provision: This deed is subject to the condition that the property may only be used for residential purposes and may not be subdivided but must be sold in its entirety. This condition shall be a covenant running with the land and shall be binding on all owners, their heirs, devisees, successors, and assignees. The deed for each lot was promptly and properly recorded. The developer, facing financial difficulty, sold the remaining five lots to a land speculator. The deeds to these lots did not contain the character and size provision that the developer had inserted into the other deeds, nor did the speculator have actual knowledge of the developer's advertising related to the character and size of the lots. The land speculator, acting in response to a zoning change that reduced the minimum permissible size of a lot to only one acre, has obtained governmental approval to divide each of the five remaining lots in thirds and is now offering the 15 lots for sale. An owner of one of the three-acre lots has brought suit against the speculator seeking an injunction to prevent him from selling the lots in less than three-acre parcels. Can the speculator successfully defend against this lawsuit? Answer Choices: Yes, because the speculator's deeds did not contain the character and size provision. Yes, because the speculator has obtained governmental approval to subdivide the lots. No, because the lots purchased by the speculator are subject to an implied servitude. No, because the speculator purchased the lots for commercial rather than residential purposes.
Answer choice C is correct. Each of the speculator's lots is subject to an implied reciprocal servitude. Although normally an equitable servitude must be in writing, the existence of a common scheme is evidenced by the developer's advertising and the insertion of the character and size provision into the deeds for the other 75% of lots. In addition, although the speculator had neither actual nor record notice of the size restrictions, the speculator had inquiry notice based on the uniformity in size of each of the other lots that had been sold. Answer choice A is incorrect because, as the name suggests, an implied reciprocal servitude does not require record notice, but is implied from the existence of a common scheme. Answer choice B is incorrect because obtaining governmental approval by complying with the applicable zoning ordinance does not protect an owner from also having to adhere to a private land use restriction. Answer choice D is incorrect because, although the speculator did not purchase the lots for the purpose of constructing a residence on each lot, the speculator did not use the property for nonresidential purposes.
A widower owned a residence in fee simple absolute. He contracted to sell it to a couple. The couple did not record the contract. The contract did not require either party to acquire or maintain casualty insurance on the premises, and neither party did so. After the parties entered into the contract, the widower continued to occupy the residence. A week before closing, the residence was completely destroyed by a fire caused by a lightning strike. On whom does the risk of loss fall? Answer Choices: The couple, because they failed to record the contract. The couple, because of the doctrine of equitable conversion. The widower, because he, as possessor of the residence, had a duty to insure it. The widower, because he retained possession of the residence.
Answer choice B is correct. Under the doctrine of equitable conversion, the couple became equitable owners of the property upon the execution of the contract of sale. As such, they bear the risk of loss. Answer choice A is incorrect because the determination of the party who bears the risk of loss does not turn on whether the contract is recorded. Answer choice C is incorrect because, unless the contract specifies otherwise, neither party has a duty to insure the property. Answer choice D is incorrect because, under the majority rule, the risk of loss is not determined by possession of the property.
The fee simple owner of land devised it to a private educational institution "for so long as the land herein conveyed is used for educational purposes; if the land is not so used, then to my daughter and her heirs." At the time of the owner's death, the owner's spouse was deceased and the owner's only two children, a son and a daughter, were alive. The owner devised all of his other real property interests to his son. The daughter died shortly after her father, devising her real property's interests to her only child, who was alive at the time of her death. Immediately after the owner's death, the institution constructed a classroom building on the land and has held classes in the building each year thereafter. Thirty years after the owner's death, the educational institution seeks to sell the land to a developer who intends to construct single-family homes on the land. Both the son and daughter's child, who are the owner's only living heirs, are alive. The applicable jurisdiction has adopted the following statute: "A nonvested property interest is invalid unless when the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive, or the interest either vests or terminates within 90 years after its creation." The applicable jurisdiction does not impose time limitations on the exercise of interests that follow a defeasible fee property interest. In order to convey marketable title to the developer, whom must the institution convince to agree to the transfer? Answer Choices: No one, because the institution owns the land in fee simple.T he daughter's child, because she holds an executory interest in the land. The son, because he holds a possibility of reverter in the land. The son and the daughter's child, because they are the owner's living heirs.
Answer choice B is correct. Upon the owner's death, the institution had a fee simple determinable subject to an executory interest in the land (also called a fee simple subject to an executory interest), and the daughter had an executory interest. Under the common law Rule Against Perpetuities the daughter's interest could, and in fact would, vest more than 21 years after her death. In such case, her interest would be stricken, the private educational institution would have a fee simple determinable, and the son, having been devised the owner's other real property interests, would hold a possibility of reverter in the land. However, the jurisdiction has adopted the "wait and see" approach to the Rule. Since the daughter's interest did vest within 90 years of its creation, it does not violate the jurisdiction's Rule. An executory interest may be devised, and the daughter devised her executory interest to her child. Since the condition imposed on the institution (i.e., use of the property for educational purposes) would be violated by the developer, the property would then automatically pass to the daughter's child. Consequently, the institution must secure her approval for the transfer in order to convey marketable title. For these reasons, answer choices A, C, and D are incorrect.
A man who had just purchased a new home was expecting his out-of-town cousin to come visit him for a few days. The cousin was arriving in the evening, while the man would still be at work, so the man told his cousin his address and that he would leave his door unlocked for him. The cousin took a taxi from the airport, and the taxi driver accidentally dropped the cousin off in front of the wrong house. The cousin opened the door of the incorrect house, which was also unlocked, and waited in the living room for the man to come home. A few minutes later, the owner of the house arrived and discovered the cousin sitting on his couch in his living room.If the owner sues the cousin for damages based upon trespass, will he succeed? A No, because the cousin believed that the home belonged to the man. B No, because the owner did not suffer any actual harm. C Yes, because the cousin intentionally entered the owner's home. D Yes, because the cousin unreasonably interfered with the owner's use of his property.
Answer choice C is correct. A trespass occurs when the defendant's intentional act causes a physical invasion of another's land. The defendant need only have the intent to enter the land, not the intent to commit a wrongful trespass. Here, the cousin intentionally entered the owner's house. Therefore, he is liable for trespass. Answer choice A is incorrect because the cousin is liable for trespass, even if he mistakenly believed that the owner's home was the man's home. Mistake of fact is not a defense. Answer choice B is incorrect because the cousin will still be liable for nominal damages due to his wrongful conduct, even if no actual harm occurred. Answer choice D is incorrect because it states the legal standard for a private nuisance, not trespass. Therefore, this answer choice is not determinative of the cousin's liability for trespass.
On April 15, a librarian purchased a vacation home from a seller for $200,000 cash. She placed the deed in a safety deposit box but did not immediately record it. On April 20, the seller sold the vacation home to an engineer, who had no knowledge of the prior sale, for $250,000 cash. On April 22, the librarian recorded her deed. The engineer, who had placed the deed in a drawer and forgotten about it, did not record the deed until June 1. The recording statute in the jurisdiction states: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law."In a subsequent action, who will prevail? A The librarian, because she was first to record the deed. B The librarian, because the engineer had constructive notice of her deed when he recorded his deed on June 1. C The engineer, because the librarian did not record her deed until after the engineer purchased the vacation home. D The engineer, because the paid value of his purchase was greater than that for the librarian.
Answer choice C is correct. All states have enacted recording acts, which establish priorities among conflicting claims to real property interests and promote certainty of title. These recording acts may be notice, race, or race-notice statutes. The statute in this case is a notice statute. In a notice jurisdiction, a purchaser need only purchase without notice of the prior interest to prevail. If a subsequent purchaser purchases a property which a prior grantee failed to record, and the subsequent purchaser had no notice of the prior interest, the subsequent purchaser prevails over the prior interest regardless of who recorded the deed first. Because the engineer did not have actual, inquiry, or constructive notice of the librarian's interest when he purchased the property, his claim will prevail over the librarian's, even though he recorded his deed later in time. Answer choice A is incorrect because in a notice jurisdiction, it is irrelevant who recorded the deed first, as long as the subsequent purchaser had no notice of the prior interest at the time of the sale (e.g., as long as the prior interest was not recorded before the sale). Answer choice B is incorrect because it is not relevant whether the engineer had constructive notice of the librarian's deed at the time of recording. Because the engineer did not have notice when he purchased the property, he would prevail. Answer choice D is incorrect because it is not relevant that the engineer "paid value" in an amount greater than the librarian.
A mother made a gift of unimproved real property to her son. The son promptly and properly recorded the deed, but did not inspect the property nor otherwise make use of it by building structures or making other improvements. The son, however, did pay the real estate taxes imposed on the property. Subsequently, the mother, forgetting about her conveyance of the property, sold it at its fair market value. The buyer promptly and properly recorded the deed. The buyer, who was not aware of the son's ownership of the property, began to construct a house on the property. Upon learning about the buyer's construction activities, the son, unaware of his mother's transaction with the buyer, brought an appropriate legal action to halt the buyer's activities and declare title to the property. Will the buyer be successful in defending against the son's lawsuit? Yes, because the recording act does not protect a donee of real property. Yes, because the son did not make productive use of the real property. No, because the son recorded his deed before his mother made the subsequent conveyance to the buyer. No, because the son paid the real estate taxes on the property.
Answer choice C is correct. Regardless of the type of recording act that governs, the grantee of real property is protected from a subsequent purchaser's claims of ownership to the property by recording his deed prior to the subsequent conveyance. Answer choice A is incorrect because, although the recording act does not protect a subsequent grantee who is a donee from an unrecorded deed, it does protect any grantee, including a donee, who records his deed prior to the subsequent conveyance. Answer choice B is incorrect because there is no requirement that the owner of real property make productive use of the property. Answer choice D is incorrect because the son's payment of the real estate taxes on the property is irrelevant to a priority dispute between the son and a subsequent purchaser.
An individual acquired a newly constructed house with a purchase money mortgage. Although the deed was recorded, through an oversight by the mortgagee, the mortgage was not. Several years later, the individual sold the house at its fair market value to a couple who obtained a purchase money mortgage through another mortgagee. Both the deed and the mortgage were recorded. Neither the couple nor the second mortgagee was aware of the prior mortgage. Shortly thereafter, the couple was killed in an accident, survived by their two young children. The couple did not leave a will. Under the law of intestate succession, the young children are the rightful heirs of their parents. The children's financial guardian, having been contacted by both mortgagees, has filed an appropriate action to determine ownership of the house. The jurisdiction is a lien state with regard to mortgages. In addition, the applicable recording act reads, "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law." Who is entitled to priority with respect to the house? Answer Choices: First mortgagee, second mortgagee, children Second mortgagee, first mortgagee, children Second mortgagee, children, first mortgagee First mortgagee, children, second mortgagee
Answer choice C is correct. The recording statute is a notice statute. Since the second mortgage was given by the mortgagee without notice as to the first mortgage, it has priority over the first mortgage. A purchase money mortgagee is treated as having paid value for purposes of the recording act. In addition, since the second mortgage was given by the couple before their deaths, the children's claims to the property as heirs of their parents are junior to the second mortgage. The recording act would not be helpful to the children's claim because the second mortgage was recorded before their interests arose and because as heirs they are not purchasers for value protected by the act. With regard to the first mortgage, while the children as heirs are not protected by the act, they are protected under the shelter rule because their parents were entitled to priority over the first mortgage by virtue of acquiring the property without notice of that mortgage. For all these reasons, answer choices A, B, and D are incorrect.
The owner of a chain of retail stores built a warehouse that was financed by a loan from a bank. In exchange for the loan, the bank took a mortgage on the warehouse. Several years later, a thief broke into the warehouse by cutting a hole in the roof. The owner hired a contractor to repair the roof but, due to the contractor's shoddy work, the roof leaks whenever it rains, making a large portion of the warehouse unusable. Due to a contraction in the owner's business, the remaining usable space of the warehouse is sufficient for the owner's needs, but the unusable space impairs the bank's security interest. Learning of the condition of the warehouse, the bank requested that the owner repair the warehouse roof. The owner refused. The bank brought an action to compel the owner to properly repair the roof. The mortgage provides that it was made with recourse to the personal liability of the owner. Neither the mortgage nor the deed contains a covenant requiring the owner to maintain or repair the premises. The owner is not in default with respect to the mortgage payments. The jurisdiction follows a lien theory with regard to ownership of a mortgage and does not have an anti-deficiency statute. Will the bank succeed? Answer Choices: No, because the owner is not liable for waste. No, because the owner is not in default with respect to the required mortgage payments. Yes, because the mortgaged property is not residential. Yes, because the condition of the roof impairs the bank's security interest.
Answer choice D is correct. A mortgagor has a duty not to commit waste with respect to the mortgaged property when such waste impairs the mortgagee's security interest in that property. Answer choice A is incorrect because, even if the mortgagor is not bound by the terms of the mortgage to maintain or repair the mortgaged property, the mortgagor has a duty not to commit waste, at least to the extent that it impairs the mortgagee's security interest in the property. Answer choice B is incorrect because the mortgagor's duty not to commit waste is independent of the mortgagor's specific contractual obligations. Answer choice C is incorrect because the mortgagor's duty not to commit waste is not confined to residential mortgages.
The owner of a parcel of land constructed a house on the land and created a paved driveway from the house to a public road that ran along the western boundary of his property. Shortly thereafter, the adjacent parcel of land to the north of the owner's parcel was sold. Although this parcel had direct access to the public road, the buyer entered into an agreement to purchase an easement from his neighbor, the owner, for a small fee. This agreement was promptly and properly recorded. Under its terms, the buyer obtained the right to use the owner's driveway to access the road from his property.Twenty years later, the owner's daughter holds title to the owner's parcel, which she inherited from the owner. Last year, the buyer sold his parcel to a friend, who is the owner of the adjacent parcel of undeveloped land to the buyer's north. This third parcel has direct access to the public road. The friend plans to tear down the house constructed by the buyer and build new home on the third parcel of land. The friend told the daughter of his plans and mentioned that he planned to continue using her driveway to access his new residence. She objected and has told him that she will construct a barrier on her land to prevent him from doing so, even though the burden on her property from the use of her driveway would not be increased.If the friend brings suit seeking to prevent the daughter from blocking access to her driveway, who should prevail? A The friend, because his proposed use of the daughter's driveway will not increase the burden on her property. B The friend, because the easement was recorded. C The daughter, because the friend's plan to tear down the house on what was the buyer's property terminates the easement. D The daughter, because the easement was appurtenant.
Answer choice D is correct. Easements are presumed to be appurtenant (i.e., tied to the land) unless there are clear facts to the contrary. The benefits of an easement must correspond directly to the use and enjoyment of the possessor of the dominant estate. Here, the easement granted by the owner to the buyer of the adjoining parcel was appurtenant rather than in gross. It was granted to the buyer as the owner of the adjoining parcel for the buyer to use the owner's driveway to access the public road from his property. Consequently, although the easement could be transferred by the buyer to his friend, it is confined to the use of the buyer's parcel. The friend is attempting to expand the dominant estate to include a third parcel that was not owned by the buyer at the time that the easement was created. The friend cannot compel the daughter to accept this expansion of the dominant estate to which the easement is subject. Answer choice A is incorrect. A change in the scope of an existing easement is tested under a reasonableness standard in light of the purpose of the easement, when the change does not conflict with the terms of the easement. Here, although the friend is proposing to use the easement for the same purpose, access to one house, and that use will not increase the burden on the servient estate, the easement was granted for the use of the parcel owned by the buyer. The dominant estate did not include the adjoining third parcel owned by the friend. Consequently, the friend cannot expand the dominant estate to include that parcel. Answer choice B is incorrect because the recording of the easement has no effect on the ability of the friend to enforce the easement against the daughter. As she took ownership of the servient estate by devise rather than purchase, she would not be protected by the recording act. Answer choice C is incorrect. Although an easement can be terminated by the destruction of the related structure, this typically involves the destruction by natural forces of a structure on the servient estate to which the easement provided access. Here, the destruction of the house on the dominant estate by the friend does not terminate the reason for the easement (i.e., providing access to the public road).
A buyer purchased a residence and financed the purchase with a loan of $500,000 from a bank. As a condition of the loan, the buyer granted the bank a mortgage on the residence. Through an oversight by one of its employees, the bank failed to record the mortgage. Subsequently, the buyer, who ran a business, borrowed $75,000 from her uncle to enable the buyer to meet the financial needs of the business. Several months later, when the buyer had not repaid her uncle, the uncle demanded and the buyer granted the uncle a mortgage on the buyer's residence after telling the uncle about the bank's mortgage. The uncle promptly and properly recorded the mortgage.The recording act of the applicable jurisdiction provides, "No conveyance or mortgage of real property shall be good against subsequent purchasers for value unless the same be first recorded according to law."Which of the following is the bank's best argument that its mortgage has priority over the uncle's mortgage? A The uncle had notice of the bank's mortgage before obtaining his mortgage. B The bank's mortgage is a purchase-money mortgage. C The value of the bank's mortgage is greater than the uncle's mortgage. D The bank obtained its mortgage from the buyer before the uncle obtained his mortgage.
Answer choice D is correct. Mortgagees are considered to have "paid value" and are protected by the recording acts, unless the mortgage is not given simultaneously with a loan (such as when the mortgage is given after the loan is created). Unless the recording act governs the priority of real property interests, the common law rule of "first in time, first in right" applies. Here, the applicable recording act is a race type recording act. Although the uncle did record his mortgage first, he is not considered to have "paid value" for his mortgage because he had made the loan to the buyer several months before he obtained the mortgage. Consequently, because the uncle is not a person who is protected by the recording act, the bank's mortgage has priority over the uncle's mortgage under the common law "first in time, first in right" rule. Answer choice A is incorrect because, as the applicable recording act is a race type act, the uncle's knowledge of the bank's mortgage on the residence at the time he obtained his mortgage on the same property is of no consequence. Answer choice B is incorrect. A purchase-money mortgage is a mortgage granted to (i) the seller of real property or (ii) a third-party lender, to the extent that the loan proceeds are used to acquire title to the real property or construct improvements on the real property if the mortgage is given as part of the same transaction in which title is acquired. A purchase-money mortgage has priority over mortgages and liens created by or that arose against the purchaser-mortgagor prior to the purchaser mortgagor's acquisition of the property, whether or not recorded. Here, because the uncle's mortgage arose after the bank's mortgage, this special rule does not apply. Answer choice C is incorrect because the value of a mortgage does not determine its priority with regard to other mortgages.
A testator who was estranged from her immediate family properly executed a will. Under the terms of the will, the testator devised various items of personal property to her daughter. The terms of the will left the remainder of the testator's estate to an unrelated friend who was living at that time. At the time of the testator's death, the friend had died intestate, but the friend's wife and their only child, a son, were alive. The testator was unmarried at the time of her death, survived solely by her only child, a daughter. The applicable jurisdiction has the following two statutes: If a devisee related by blood to the testator in any degree of kinship is dead at the time of execution of the will, fails to survive the testator, or is treated as if the devisee predeceased the testator, the issue of the deceased devisee who survive the testator take in place of the deceased devisee. When a decedent dies without a will or possesses property that is not devised under the terms of the decedent's will, and the decedent is survived by a spouse and any child, the spouse shall share the decedent's property equally with the children. If the decedent is not survived by a spouse but is survived by any child, each surviving child shall share equally the decedent's property. The testator died owning her residence in fee simple absolute. Who is entitled to her residence? Answer Choices: Both the friend's wife and son, under the intestacy statute. The friend's son only, under the anti-lapse statute. The testator's daughter, because the testator's will did not specifically devise the residence to anyone. The testator's daughter, under the intestacy statute.
Answer choice D is correct. The testator, through the residuary clause of her will, left her residence to her friend. However, this devise lapsed because the friend predeceased the testator. The anti-lapse statute provided does not save this devise because it only applies to a devise to a person who is related by blood to the testator, which the friend is not. Because the testator's residence does not pass by the terms of her will, it passes in accord with the intestacy statute. Under this statute, because the testator was not married at the time of her death, her only child, a daughter, is entitled to the testator's property that does not pass under the terms of her will, which includes the testator's residence. Answer choice A is incorrect because, while the friend's wife and son are entitled to share equally whatever property the friend died owning, the friend had no property rights in the testator's property at the time his death, only a mere expectancy that lapsed upon his death. While an anti-lapse statute can operate to "save" a devise, the terms of this anti-lapse statute do not protect a gift to an unrelated devisee. Answer choice B is incorrect. The anti-lapse statute does not apply to this situation, and even if it did, the friend's wife and son would share the gift under intestate succession. Answer choice C is incorrect because the residuary clause of the will would have been effective to pass the residence to the testator's friend if it had not lapsed.
A brother and sister owned real property as tenants-in-common. The brother, just before departing on an extended trip into a wilderness area where he planned to be out of communication with the outside world, was approached by a potential buyer of the property. The brother flippantly told the potential buyer that, if the potential buyer could convince the sister to sell the property, she had the brother's permission to sell his interest in the property as well as her own. In fact, the brother recalled that he and his sister had discussed selling the property only once before, and both had been opposed to doing so. There had been no discussion at that time of one acting as an agent for the other. When the potential buyer contacted the sister about selling the property, she readily agreed. When told of her brother's statement, she executed a deed conveying the real property to the buyer. She signed both her own name and her brother's name to the deed, appending a note that she was acting as her brother's agent. Upon returning from his trip, the brother learned of the deed. He initiated an action to set aside the transfer of his interest in the real property.How should the court rule on this action? A For the buyer, because the sister had apparent authority to act on behalf of her brother based on his statement to the buyer. B For the buyer, because a tenant-in-common can transfer the interest of another tenant-in-common in the same property. C For the brother, because authority to act cannot be created orally. D For the brother, because of the equal dignities rule.
Answer choice D is correct. Under the "equal dignities" rule, when the act performed by an agent on behalf of the principal is required by law to be in writing, the agent's authority must also be established in writing. Consequently, when an agent signs a deed, the agent's authority must also generally be in writing. Since the sister did not possess written authority to transfer her brother's interest in the real property, the brother can set aside the transfer of his interest in the real property. Answer choice A is incorrect. A person whose only act is signing a specific deed at the grantor's request may do so without written authorization. However, because the brother never asked the sister to sign his name to the deed, this exception to the "equal dignities" rule does not apply. Therefore, since the sister's authority was not in writing, the brother could set aside the transfer of his interest in the real property. Answer choice B is incorrect because a co-tenant in a tenancy in common can convey only his own interest in jointly owned property. A deed executed by a co-tenant that purports to be a conveyance of the entire jointly owned property has the effect of conveying only that co-tenant's interest. Answer choice C is incorrect because oral statements can generally create authority to act on behalf of another as the other's agent. However, under the "equal dignities" rule, the brother could set aside the transfer of his interest in the real property because the sister's authority was not in writing.
A man whose terminally ill aunt had promised to devise an undeveloped parcel of land to him sold the parcel to a friend. The friend purchased the property based on the nephew's false assertion that he owned the parcel; the friend was unaware of the aunt's ownership of the parcel. The friend did not perform a title search and did not record the deed, which was a general warranty deed. Subsequently, the aunt died. As promised, she devised the parcel to her nephew. The personal representative of the estate executed and recorded a deed transferring title to the parcel to the nephew. After the aunt's death, no one paid the property taxes on the parcel. Eventually, the state seized the parcel and sold it through a tax sale. Before expiration of the redemption period that is statutorily permitted to the owner of the real property, the friend learned of the sale of the parcel for delinquent taxes. Claiming ownership of the parcel, the friend sought to pay the delinquent taxes and other costs and fees associated with the sale and thereby redeem the parcel. The buyer of the parcel at the tax sale, who had no prior knowledge of the friend's claim with respect to the parcel, objected. In an action to determine ownership of the parcel, if the court finds for the friend, what is the likely reason? Answer Choices: The friend was record owner of the parcel. The friend purchased the parcel for value and without notice. Under the doctrine of equitable conversion, the friend is the owner of the parcel .Title to the parcel vested in the friend upon the nephew's acquisition of the parcel.
Answer choice D is correct. When a person who attempts to transfer real property that he does not own subsequently becomes owner of that property, the after-acquired title doctrine provides that title to the property automatically vests in the transferee. Answer choice A is incorrect because, while the nephew did record his deed, the friend did not. Consequently, the nephew, not the friend, was owner of record of the parcel. Answer choice B is incorrect because although the friend presumably did not have actual knowledge that the aunt owned the parcel, the friend was on constructive notice that the nephew did not own the property. Moreover, even assuming the friend's status was that of a good faith purchaser, this status is irrelevant in ascertaining the friend's rights in relationship to the subsequent buyer. Answer choice C is incorrect because the doctrine of equitable conversion, which treats a buyer as the equitable owner of property during the period between execution of the contract and delivery of the deed, is irrelevant.
Equitable servitudes
Equitable servitudes (suing for injuction) are agreements about land use that are enforced at equity by injunction. The requirements for enforcement of an equitable servitude are not as stringent as those for enforcement of a real covenant. a. Requirements For a servitude to be enforced at equity, it meet the following requirements: i) It must be in writing; ii) There must be intent for the restriction to be enforceable by and against successors; iii) The servitude must touch and concern the land; and iv) If the person against whom the servitude is to be enforced is a purchaser, he must have notice (whether actual, record, or inquiry notice) of the servitude. Regarding the need for a writing (item i, above), there is an exception for an implied reciprocal servitude (see b. Implied reciprocal servitudes, below). The requirement of notice (item iv, above), which is based on the principle that the acquisition of legal title by an innocent purchaser defeats a prior equitable claim, is independent of the effect of the recording act on the enforcement of an equitable servitude. EXAM NOTE: When a party has established the existence of a real covenant entitling him to money damages, remember that the promise may also be enforced as an equitable servitude entitling the party to equitable relief. However, since an equitable servitude does not require privity, the reverse is not necessarily tru
Duty to Trespassers
Land possessors owe no duty to undiscovered trespassers, nor do they have a duty to inspect their property for evidence of trespassers. When a land possessor should reasonably know that trespassers are consistently entering his land (e.g., frequent trespassers using a footpath to cut across the corner of the property), the land possessor owes a duty to the anticipated trespasser, regardless of the land possessor's actual knowledge of the trespasser's presence. Here, the owner suspected that people had been using his land as a shortcut, so he owed suspected trespassers a duty to warn them of the dangerous well, even if he had not seen them in that part of his property. He would therefore be liable for the child's injury resulting from his failure to post a warning about the well.
Restrictions of a common-interest ownership community
Restrictions contained in the recorded declaration of a common-interest ownership community are enforceable unless illegal, unconstitutional, or against public policy unlike rules adopted by a condominium board, the restrictions contained in a recorded declaration are not subject to a reasonableness requirement.
Land sales contract
Statute of Frauds, a land sales contract must (i) be in writing, (ii) be signed by the party to be charged, and (iii) contain all of the essential terms (i.e., parties, property description, terms of price and payment).
doctrine of equitable conversion,
Under the doctrine of equitable conversion, equitable title to real property passes to the buyer upon entering the contract, even though the seller retains legal title. Most jurisdictions place the risk of a loss that occurs after the contract has been entered into on the buyer. Here, the damage to the lodge occurred after the risk of loss had already passed to the buyer (i.e., after execution of the contract), so the buyer bears the risk.
doctrine of retaliatory eviction
Under the doctrine of retaliatory eviction, a landlord may not evict a residential tenant as retaliation for the tenant's reporting a housing code violation to the appropriate authorities or for refusing to pay rent when the landlord breaches the warranty of habitability.
anti-lapse statutes
Traditional anti-lapse statutes prevent gifts from lapsing only when those gifts were given to a family member within a certain statutory degree. Although the question does not detail the anti-lapse statute itself, traditional statutes apply only to family. Accordingly, the gift to the neighbor would lapse, so the home would go back to the homeowner's residuary estate.
after-acquired title doctrine
Under the "estoppel by deed" doctrine, a grantor who conveys an interest in land by warranty deed before actually owning it is estopped from later denying the effectiveness of her deed. Consequently, when the grantor does acquire ownership of the land, the after-acquired title is transferred automatically to the prior grantee. However, under the majority rule, a subsequent purchaser from the same grantor who takes without notice can obtain good title—despite the doctrine of estoppel by deed—in a notice or race-notice jurisdiction. The purchaser is generally required to search the grantee index for a grantor's name only as far back as the date on which the grantor's name appears as a grantee (i.e., the date on which the grantor acquired the property). That date is the earliest date that a grantor's name must be searched on the grantor index for a conveyance by the grantor. The recording of a transfer made by the grantor before that date is not treated as giving the purchaser constructive notice of the transfer.
cy pres,
Under the doctrine of cy pres, a court may make changes to a conveyance in order to come "as near as possible" to the intent of the transferor. While the doctrine of cy pres is most often applied by a court in the context of a charitable gift, it may also be applied to achieve the intent of a grantor or testator by avoiding the effect of the Rule Against Perpetuities.
