MBE PQ'S

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A man and a woman were neighbors whose small yards were separated only by a hedgerow consisting of small shrubs. After a discussion about building a one-foot-thick stone wall to separate the two properties, the neighbors agreed that the man would pay for the materials and construction of the wall, as the woman did not have the funds to do so. In return, they agreed that the wall would be built on the woman's property so as not to reduce the square footage of the man's yard. Years later, the woman sold her property in a valid transaction with a buyer. At the time of the sale, the woman told the buyer that the man had paid for and built the wall and that she had agreed to keep it there. However, there was no mention of the wall in the sales contract or the deed. After the buyer moved in, she spoke to the man about her desire to tear down the wall to open up the space and stated that she would pay for the destruction of the wall. The man objected to tearing down the wall. May the man prevent the buyer from tearing down the wall? A No, because the buyer validly purchased the land from the woman. B No, because the wall constituted an easement in gross. C Yes, because he has a separate security interest in the materials used to build the wall. D Yes, because the wall constituted an easement by implication.

A A fixture is tangible personal property (i.e., chattel) that is attached to real property in such a manner that it is treated as part of the realty and used for some larger component or function of the land (e.g., to separate adjoining properties). Fixtures are considered an integral part of the land to which they are attached. Consequently, a fixture automatically transfers with the land unless the conveying instrument (e.g., deed) provides otherwise. Here, the wall became part of the woman's land, which was then sold to the buyer. Since the wall is a fixture, it was included in the valid sale to the buyer. Therefore, the man cannot prevent the buyer from tearing down the wall. (C) is wrong -Once the materials were incorporated into the wall, they became an integral part of the property, and the man was not subject to any security interest in the materials

A mother owned a vacation cabin, but as she no longer visited it, she decided to convey the cabin to her daughter. The mother executed a valid, written deed, and she promptly and properly recorded it. The mother did not tell her daughter that she intended to give the cabin to the daughter because the mother wanted to surprise the daughter with this gift at an upcoming family reunion. Prior to the reunion, the daughter died suddenly. In her will, the daughter left her entire estate to her best friend. The mother, not wanting the cabin to go to someone who was not a family member, brought an action to set aside the conveyance to the best friend. Who will be likely to prevail in this action? A The best friend, because the mother recorded the deed conveying the cabin to her daughter. B The best friend, because the mother's intent was evidenced by a valid deed in writing. C The mother, because she did not deliver the deed to her daughter. D The mother, because the daughter did not accept the mother's gift.

A A transfer by deed is effective when the deed is delivered by the grantor and accepted by the grantee. Delivery is presumed when the deed has been recorded, and acceptance is presumed if the transfer benefits the grantee.

A homebuyer financed the purchase of her home with a loan from a bank, granting the bank a mortgage on the home to secure her loan obligation. The bank promptly recorded its mortgage interest. A few years later, the homebuyer borrowed money from a finance company to pay for a child's tuition expenses. The finance company took a mortgage on the home, which it promptly recorded. The homebuyer maintained payments to the finance company, but she defaulted on her bank loan. The bank initiated foreclosure proceedings against the homebuyer. The finance company did not receive notice of these proceedings. The home was sold at a judicial foreclosure sale to an investor who intended to rent out the home. Has the finance company's mortgage on the home been eliminated? A No, because the finance company did not receive notice of the foreclosure sale. B No, because the finance company's loan was not in default at the time of the foreclosure sale. C Yes, because the finance company's mortgage was a junior mortgage. D Yes, because the home has been sold at a judicial foreclosure sale.

A After the homebuyer defaulted on the bank loan, the bank sought a foreclosure conducted by a judicially supervised sale. Under this method of foreclosure, the foreclosing mortgagee (the bank): -must give notice to the holders of any junior interests in the property so that they can participate or send a representative—otherwise, the junior-interest holder's interest will remain after the sale; -may, but need not, join others who have an interest in the property (e.g., senior-mortgage holder) or are liable on the debt (e.g., guarantor) as proper, but not necessary, parties* Here, the bank's mortgage was first in time, so its mortgage is senior to the finance company's junior mortgage. As a result, the bank was required to give the finance company notice of the bank's judicial foreclosure sale. Since the bank failed to do so, the foreclosure sale did not eliminate the finance company's mortgage

A small company specializing in providing meditation retreats purchased a tract of land fronting a river in a rural residential area. As the residential area grew around the company's tract of land, the tract became cut off from the nearby public road. Hoping to avoid the expense of building a bridge across the river in order to access the next closest roadway, the company approached an owner of one residential plot separating the company's tract from the public road to request an easement. The owner, without requiring consideration, granted the company an easement by deed to a strip of land 30 feet wide across his property. The deed did not place any express limitations on the easement's use. The company built a narrow dirt road across the easement to accommodate the limited number of vehicles attending its occasional meditation retreats. A year later, the company began to offer outdoor yoga classes each night. This new service was wildly popular, resulting in increased daily traffic across the easement. On busy evenings, visitors also parked on the dirt road for the duration of their class. After a month of enduring the additional traffic, the owner erected a concrete barrier to prevent any use of the easement to access the company's tract. The company objected, and the owner brought an action to terminate the easement across his property. Should the court allow the owner to terminate the easement on these facts? A No, because the easement is not terminated by the company's expanded use of the dirt road. B No, because the owner, by blocking the dirt road, can no longer seek equitable relief. C Yes, because the company's current use of the dirt road greatly exceeds its initial use of the road. D Yes, because the granting of the easement was not supported by consideration and is thus freely revocable.

A An easement holder may increase the manner, frequency, or intensity of an easement's use so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

A man owned in fee simple Lots 1 and 2 in an urban subdivision. The lots were vacant and unproductive. They were held as a speculation that their value would increase. The land owner died and, by his duly probated will, devised the residue of his estate (of which Lots 1 and 2 were part) to his wife for life with remainder in fee simple to his sister. The man's executor distributed the estate under appropriate court order & notified the wife that future real estate taxes on Lots 1 and 2 were her responsibility to pay. The wife left the lots vacation and did not pay the real estate taxes due. To prevent a tax sale of the fee simple, the sister paid the taxes and demanded that the wife reimburse her for same. When the wife refused, the sister brought an appropriate action against the wife to recover the amount paid. In such action, what should the sister recover? A. Nothing, bc the wife never received any income from the lots B. Nothing bc the wife's sole possession gave the right to decide whether or not taxes should be paid C. The amount paid, bc a life tenant has the duty to pay current charges D. The present value of the interest that the amount paid would earn during the wife's lifetime

A The holder of a life estate (life tenant) has a duty to pay current charges on the land that become due during the life tenancy (e.g. property taxes, mortgage interest). But this duty is limited to the financial benefit that the life tenant receives from the property. however, theres no duty to pay these charges if the life tenant is not in possession of the property and does not receive rent or other income from the property

The owner of a wooded parcel of land conveyed the land "to [her accountant] and his heirs, provided that, if this parcel is developed, [the owner] and her heirs may reenter and retake the property." Subsequently, the owner transferred "all my interests in real property" to her friend. When the owner died, her will devised all her interests in real property to her coworker, with whom the owner had developed a longtime friendship. At the time of her death, the owner's only heir was her niece. One year after the owner's death, the accountant began construction of a house on the wooded parcel of land. Property taxes assessed against this parcel of land may be challenged only by the owner of the property who holds a current possessory interest in the land. Who has the right to challenge the property taxes assessed on the parcel of land? A The accountant. B The coworker. C The friend. D The niece.

A The owner conveyed the parcel of land to the accountant in fee simple subject to a condition subsequent because she used the phrase "provided that" in limiting the property interest transferred to him. She retained for herself and her heirs a right of reentry. Unlike the possibility of reverter, a right of reentry does not automatically trigger the transfer of ownership of the property to the holder of the right of reentry. This property interest gives its holder the right to compel the holder of the fee simple subject to a condition subsequent to transfer ownership and possession to the holder upon the breach of the condition. Until the holder of the right of reentry exercises that right, the holder of the fee simple subject to a condition subsequent retains the current possessory interest in the property. Consequently, the accountant, as the holder of the fee simple subject to a condition subsequent interest in the parcel, is the only person who may challenge the property taxes assessed against the parcel of land.

A restaurant owner purchased kitchen equipment from a supplier and gave the supplier an unsecured, nonnegotiable promissory note. Prior to the date on which payment of the note was required, the owner asked the supplier for an extension of time to pay the note. The supplier demanded in exchange that the owner execute a deed of trust with respect to the restaurant and the land on which it is situated to serve as security for payment of the note. When the owner refused this demand, the supplier threatened to falsely report health code violations by the owner to the local health department. Acting under duress, the owner executed the deed of trust, which the supplier promptly recorded. Shortly thereafter, the owner sold the restaurant to the restaurant's chef. The chef assumed the obligation to pay the promissory note. The cash amount paid by the chef to the owner was less than the fair market value of the restaurant because the cash payment reflected the assumed obligation. The note is now in default and the trustee has instituted foreclosure proceedings on the deed of trust. Can the chef assert the owner's defense of duress against the trustee? A No, because the cash amount paid by the chef reflected the assumption of the owner's obligation on the note. B No, because the supplier recorded the deed of trust prior to the sale of the restaurant to the chef. C Yes, because duress is a defense to the enforcement of a mortgage. D Yes, because the chef, by assuming the owner's obligation, is entitled to assert the owner's defenses.

A The owner of an interest in real property may give that interest to a lender (mortgagee) to secure a debt—usually through a mortgage or a deed of trust.* The debtor (mortgagor) can freely transfer the mortgaged property to a buyer unless the lender and the debtor had agreed otherwise. After the transfer, the mortgage remains attached to the property and the debtor remains personally liable for the mortgage debt. But the buyer's obligations depend on whether he/she: took subject to the mortgage - in which case the buyer does not agree to pay and is not personally liablefor the debt or assumed the mortgage - in which case the buyer expressly agrees to pay and becomes primarily liable for the debt, while the debtor becomes secondarily liable as a surety. A buyer who assumed a mortgage as part of the purchase price may not raise defenses—e.g., duress, statute of limitations, lack of legal capacity—that the debtor could have raised to avoid the mortgage obligation. Otherwise, the buyer would be unjustly enriched.

A couple entered into a contract to purchase a house from the owner. The couple did not record the contract of sale. Prior to the execution of the contract, the owner had incurred a debt to a creditor. Subsequent to the execution of the contract, the creditor obtained a judgment against the owner. Unaware of the contract of sale, the creditor recorded her judgment in the land records for the county in which the house was located, thereby giving the creditor a lien against property owned by the owner in the county. After the owner deeded the house to the couple and they recorded the deed, the creditor sought to execute the lien and levy on the house. The couple filed an action to enjoin the creditor from executing the lien. 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 will likely prevail? A The couple, because the doctrine of equitable conversion protected their interest in the house from the judgment creditor. B The couple, because they were protected by the recording act as purchasers for value of the house. C The creditor, because she had reduced her claim to judgment. D The creditor, because she recorded her judgment prior to the couple's recording of their deed and without notice of their purchase of the house.

A Under the doctrine of equitable conversion, a buyer receives equitable title to real property upon entering a land-sale contract. In contrast, the seller retains legal title and acquires the equitable right to receive the purchase price upon closing. As a result, a judgment obtained against the seller after the execution of the land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.

A widow held a life estate in a house and several acres of land in a semirural area. She lived in the house and harvested berries from the numerous wild berry bushes on her property each June. The widow personally consumed the berries or gave them away to family and friends, but she did not sell them to third parties. One day at the end of May, just as the berries were ripening enough to be harvested, the widow died. In her will, the widow left her personal property to her children, but the land reverted to a distant relative who was the remainderman. The widow's children sought to enter the land to harvest the berries, but the remainderman objected, claiming that he had sole right to the berries. Do the widow's children have the right to return and harvest the berries? A No, because the berries grew wild. B No, because the widow did not sell the berries to third parties. C Yes, because the berries were the widow's personal property. D Yes, because the widow would have been able to harvest them had she survived.

A Wild, uncultivated crops (i.e., fructus naturales) are considered part of the real property on which they grow, so they pass automatically with the land. Crops that are purposely planted and cultivated (i.e., fructus industriales) are considered the landowner's personal property and, similarly, are generally conveyed with the land. However, the prior owner has the right to reenter to remove these crops if they were: harvested and therefore severed from the land ripe (i.e., mature) and therefore deemed constructively severed from the land (in some courts) or planted by a tenant with a lease of uncertain duration or an adverse possessor under a claim of right.*

Pursuant to a written lease, the owner of a warehouse leased the premises to a manufacturer for a term of one year at a total rent of $60,000. The lease called for the rent to be paid in monthly installments of $5,000 at the beginning of each month. The lease contained no provisions regarding termination or extension. The manufacturer promptly made the required rental payment each month. At the end of the lease term, the owner did not provide notice to the manufacturer of the termination of the lease. The manufacturer tendered a rental payment of $5,000 for the following month to the owner, which the owner refused to accept. In the absence of an applicable statute, how much advance notice must the owner give the manufacturer before seeking to evict the manufacturer? A None, because the manufacturer is a tenant at sufferance. B A reasonable time, because the manufacturer is a tenant at will. C A month, because the manufacturer, by tendering a rental payment, has created a periodic tenancy. D Six months, because the manufacturer, by tendering a rental payment, has created a tenancy for years.

A under the written lease, they had a tenancy for years. but that ended at the end of the 12 month mark, and the manufacturer remained on the premises after the lease expired (so he is now a tenant at sufferance). the landlord is NOT req'd to give the tenant at sufferance notice to vacate the premises before taking steps to recover possession of the property.

A developer and a commercial real estate investment group own adjoining lots near a city's downtown. the developer decided to raze the existing building on its lot and erect an office building of greater height. the developer received all governmental approvals required to pursue the project & no statute or ordinance applies (other than those dealing with various approvals for zoning, building, etc). When the building was completed, the investment group discovered that the substantial shadow cast by the developer's new building diminished its ability to lease apps, substantially lowered the rent it could charge, & greatly reduced the apt complex's overall occupancy rate. Assume that these facts are proved in an appropriate action the investment group instituted against the developer for all & any relief available. Which of the following is the most appropriate comment concerning the lawsuit? A. Judgment should be for the developer, because the investment group has no cause of action B. The investment group is entitled to a mandatory injunction requiring the developer to restore conditions to those existing with the prior building insofar as the shadow is concerned C. The court should award damages for losses suffered to the date of trial and leave open recovery of future damages D. The court should award permanent damages, in lieu of an injunction, equal to the present value of all rents lost & loss on rents for the reasonable life of the apt complex

A A landowner can only restrict another's lawful use of their own land by obtaining a negative easement (i.e. restrictive covenant). & negative easements can only be created by express written agreement.

A limited partnership purchased land with a loan from a bank. Neither the individual partners nor the limited partnership was personally obligated to repay the loan. As security for the loan, the limited partnership granted the bank a mortgage on the land. Subsequently, the limited partnership sold the land to a buyer. The buyer did not enter into an agreement with respect to the limited partnership's loan. After the sale, the limited partnership defaulted on the loan. The applicable jurisdiction follows the lien theory of mortgages. Can the bank foreclose on the land owned by the buyer? A No, because no one was personally obligated to repay the loan. B No, because the buyer did not agree to assume the limited partnership's loan. C Yes, because the applicable jurisdiction follows the lien theory of mortgages. D Yes, because the buyer took the land subject to the mortgage.

A mortgage is an interest in land that a debtor (mortgagor) gives to a lender (mortgagee) as security for a debt. The debtor can freely transfer mortgaged land to a grantee unless the mortgage states otherwise. After the conveyance, the mortgage remains attached to the property and the debtor remains personally liable for the debt secured by the mortgage. But the grantee's obligations depend on whether the grantee: took subject to the mortgage (presumed) - in which case the grantee does not agree to pay and is not personally liable for the debt or assumed the mortgage - in which case the grantee expressly agrees to pay and becomes primarily liable for the debt, and the debtor becomes secondarily liable as a surety. In either instance, the lender can foreclose on the mortgage if the debtor defaults on the loan (Choice B). However, the grantee will only be liable for any deficiency resulting from a foreclosure sale if the grantee assumed the mortgage. Here, the partnership gave the bank a mortgage to secure the partnership's obligation to repay the loan. That obligation remained even after the partnership sold the land to the buyer (Choice A). The buyer did not agree to assume the mortgage, so the buyer took subject to the loan. Nevertheless, the bank can still foreclose on the land owned by the buyer because the partnership defaulted on the loan.

A developer obtained a loan from a bank to construct an apartment building. The loan was evidenced by a note and secured by a mortgage on the apartment building. After making the required installment payments on the note to the bank for several years, the developer defaulted on the loan. The bank elected not to foreclose on the mortgage. Instead, the bank sued the developer personally for the unpaid balance of the note because the note contained an accelerationclause that made the entire unpaid balance due upon default. The court rendered a judgment in the bank's favor. The bank promptly and properly filed the judgment creating a lien, pursuant to the applicable state law, on any real property then owned or acquired by the developer over the next 10 years. Later, the developer secured a loan from a private investor to purchase a small strip mall. This loan was also evidenced by a note and secured by a mortgage on the mall. Once again, after making the required installment payments on the note to the private investor for several years, the developer defaulted on this note. The private investor filed an action to foreclose on the mortgage she held on the strip mall. The bank was made a party to this action and sought to enforce its judgment lien against the mall. The court recognized the rights of both the private investor and the bank in the mall, and ordered the sale of the mall. The proceeds from the sale, after the costs associated with the sale were paid, were more than sufficient to satisfy the developer's outstanding obligation to the private investor or the judgment obtained by the bank, but not both. Who has a priority right to the net sale proceeds? A The bank, because a judgment lien has priority over a mortgage. B The bank, because its judgment lien arose before the mortgage on the mall. C The private investor, because she initiated the foreclosure on the mall. D The private investor, because the funds from her loan were used to purchase the mall.

A purchase-money mortgage (PMM) is a mortgage granted to (1) the seller of real property or (2) a third-party lender to the extent that the loan proceeds are used to acquire title to the real property.* A PMM has superpriorityover all other liens that arose before the PMM—regardless of whether the PMM or those liens were recorded. Here, the private investor has a PMM because she loaned the developer the funds to purchase the strip mall. And though the bank's judgment lien arose before the private investor's mortgage on the mall, this does not defeat the PMM's superpriority (Choices A & B). Therefore, the private investor has a priority right to the net sale proceeds. *A PMM can also arise when loan proceeds are used to construct improvements on the real property if the mortgage is given as part of the same transaction in which title is acquired.

A buyer and seller entered into a contract for the sale of a business, including the building in which the business was conducted and the land on which the building was situated. In the contract, the seller agreed to convey marketable title subject to any restrictions of record, such as easements and covenants, and all applicable zoning laws and ordinances. Before closing, the buyer learned that the operation of the business violated the zoning laws but nevertheless was confident that it could obtain a variance for the operation of the business at that location. When it came time to close the sale, the seller refused to transfer title to the building and land to the buyer. If the buyer sues for specific performance of the contract, will the buyer be likely to prevail? A No, because the contract specifically provides that the property is being sold subject to the zoning ordinances. B No, because the covenant of marketable title has been violated. C Yes, because the buyer is confident that it can obtain a variance for the operation of the business at that location. D Yes, because the seller refused to transfer title to the buyer.

All contracts for the sale of land have an implied warranty that the seller will convey marketable title to the buyer upon closing unless otherwise stated. To be marketable, title must be reasonably free from doubt and under no threat of litigation, such that a reasonable person would accept and pay for it. If the seller cannot convey marketable title (e.g., due to a zoning violation), the buyer can rescind the contract and refuse to close. The buyer can also choose to accept the land with the defect and enforce the contract—as the buyer seeks to do here (Choice B). If the seller refuses to perform, then the buyer can: rescind the contract and seek restitution seek specific performance with an abatement of the purchase price* or sue for damages.

In exchange for $1,000, the owner of a ranch granted a potential buyer a 90-day option to purchase the ranch for $10 million. The next day, the owner was stricken with an illness that has left her unable to manage her own affairs. As a consequence, a guardian for the owner's property was appointed. Prior to the end of the option period, the potential buyer proposed to the guardian that he would purchase the ranch immediately for $9.5 million. The guardian rejected this offer. On the 90th day, the potential buyer mailed his intent to exercise the option, which the guardian received the following day. The guardian has refused to sell the ranch to the potential buyer. In an action brought by the potential buyer to compel the guardian to sell the ranch, if the court rules for the guardian, what is the likely reason? A The option terminated at the time that the owner became incapacitated. B The option was revoked by the potential buyer's counteroffer. C The potential buyer failed to record the option. D The potential buyer failed to timely exercise the option.

An option contract for the purchase of real property is formed when one party (the option holder) receives the exclusive right to purchase the property (i.e., "exercise the option") during a specified time period in exchange for consideration. Under an option contract: the grantor cannot revoke the option during the specified time period the option does not terminate upon the death or incapacity of the grantor (Choice A) and the option holder can make a "counteroffer" without losing the right to exercise the option (Choice B). The option holder must exercise the option pursuant to the terms of the contract. However, the mailbox rule—which treats the acceptance of an offer as valid when mailed—does not apply to option contracts. Instead, the grantor must receive the option holder's decision to exercise the option within the time period specified in the contract. Otherwise, the option holder loses the option and any consideration that was paid. since the note arrived the day after the option period ended, the potential buyer lost his chance to timely exercise his option.

A rancher subdivided a portion of his ranch that had recently been annexed by the city into 30 two-acre lots. At the time the ranch was annexed, the city's building code prohibited a single-family residence of more than two stories. The rancher filed a subdivision plan that restricted the use of each lot to one single-family residence but placed no other restrictions on the lots. The rancher then sold one lot to a speculator. The speculator's deed restricted the lot to residential use only, but it did not restrict the residence to two stories. Immediately thereafter, the housing market in the area plummeted, and the rancher was unable to sell any of the remaining lots for almost three years. The city, acting in response to consumer demand, modified its building code to permit three-story single-family residences. During the next two-year period, the rancher sold 28 of the remaining 29 lots. Since the rancher did not want any of the residences built on the lots to be as high as his own three-story residence located on the ranch, he included a two-story height restriction in all 28 deeds. None of the owners of those 28 lots violated the two-story height restriction. The rancher notified the speculator of the two-story height restriction by letter, but the speculator did not respond. Subsequently, the speculator sold his lot to a couple. The couple's deed contained the single-family residence restriction but made no mention of the two-story height limitation. The rancher, upon learning of the couple's plans to construct a three-story family residence, has filed suit on his own behalf and on behalf of the owners of the 28 lots seeking an injunction to prevent the couple from building a three-story family residence. For whom is the court likely to rule? A The couple, because the city building code has priority over a private restrictive covenant. B The couple, because the two-story height restriction was not contained in their deed, the speculator's deed, or the subdivision plan. C The rancher, because he made the speculator aware of the height restriction before the speculator sold his lot to the couple. D The rancher, because the common scheme of the two-story height restriction was readily apparent to the couple.

B 1. When an injunction is sought to enforce a covenant, it's called an equitable servitude. 2. An equitable servtitude can also be implied from a common scheme if 3 elements are met: (1) Intent to create common scheme (2) Restrictive servitude - the intended servitude is a promise not to do something on land (3) notice - the person to be bound by the servitude had actual, record or inquiry notice of the servitude BUT it will not be enforced against lots sold before the common scheme arose

The owner of a house in a suburban neighborhood converted a driveway from rock to asphalt. The owner's neighbor did not have a driveway but instead parked on the street that ran in front of both of their homes. When asked by the neighbor, the owner told the neighbor that she could also use the driveway to access her house. For 11 years, the neighbor used the driveway on occasion when engaged in tasks such as bringing furniture and appliances into her house, or on days when it was raining heavily. Throughout these years, only the owner maintained the driveway. Recently, the owner sold his house to a couple. The owner informed the couple about the neighbor's use of the driveway when they first looked at the house, but neither the contract of sale nor the deed made reference to it. When the neighbor used the driveway on the first rainy day after the couple moved in, the couple told her that she could no longer use the driveway. The neighbor sued the couple, seeking a judgment that she has a right to use the driveway. In the applicable jurisdiction, the term for the creation of a prescriptive easement is 10 years. Who is likely to succeed? A The couple, because a license, as a property interest, must be in writing. B The couple, because the neighbor's license to use the driveway has been revoked. C The neighbor, because her use of the driveway created a prescriptive easement. D The neighbor, because the couple had notice of her driveway use before buying the house.

B A license is a nonpossessory right to enter and use someone else's land for a specific purpose. A license is freely revocable unless the licensee detrimentally relied on the license (e.g., paid money to use or maintain the license) OR the license was coupled with an interest in the property (e.g., a remainderman's license to enter and inspect property). A license can be revoked by the licensor at any time, but it terminates automatically upon (1) the death of the licensor or licensee or (2) the conveyance of the licensed property.

An owner conveyed one of his properties to "my son for life, remainder to my daughter." The son lived on the property without paying any rent, although the property could have been rented for $4,000 a month. The property was assessed annual property taxes of $10,000. The son did not pay the taxes on the property. Not wanting to have a lien on the property or otherwise have it foreclosed upon, the daughter paid the annual property taxes. The fair market value of the life estate was 10 percent of the fair market value of the property held in fee simple absolute. How much can the daughter recover from the son for the tax payments? A $10,000, because life tenants are responsible for paying annual taxes assessed on the property in their entirety. B $10,000, because the taxes did not exceed the reasonable rental value of the property. C $1,000, the amount of taxes owed based on the proportion of the fair market value of the life estate to the fair market value of the property held in fee simple absolute. D Nothing, because the property taxes are the responsibility of the holder of the remainder interest.

B A life tenant has the obligation to pay ordinary taxes on the real property, but only to the extent that the life tenant receives a financial benefit from the property. When the life tenant occupies the land, the financial benefit is measured by its fair rental value.

A corporate officer purchased land with the aid of a loan at a favorable interest rate from the corporation. The officer granted the corporation a mortgage as security for the loan, and the corporation promptly recorded the mortgage instrument. The officer also signed a note promising to repay the loan over a period of 10 years. The note contained a due-on-sale clause that required, at the corporation's option, payment of the full outstanding amount of the loan if the officer sold the land without first obtaining the corporation's written consent. After making timely payments on the loan for three years, the officer sold the land to a buyer who was unrelated to the officer without obtaining the corporation's consent. The deed given by the officer acknowledged that the land was being transferred subject to the mortgage. After payment of the purchase price to the officer, the buyer promptly recorded his deed. Subsequently, neither the officer nor the buyer made any payments on the loan to the corporation. The corporation, in order to avoid lengthy foreclosure procedures, has sued the buyer for the full outstanding amount of the loan obligation. Is the buyer liable for the full outstanding amount of the loan? A No, because the corporation has not foreclosed on its mortgage. B No, because the buyer purchased the land subject to the mortgage. C Yes, because the corporation promptly recorded its mortgage. D Yes, because of the due-on-sale clause in the note.

B A mortgage is an interest in real property given to a lender (mortgagee) to secure a debt. The debtor (mortgagor) can freely transfer mortgaged property to a grantee unless the mortgage states otherwise. After the transfer, the mortgage remains attached to the property and the debtor remains personally liable for the mortgage debt. But the grantee's obligations depend on whether the grantee either: took subject to the mortgage - in which case the grantee does not agree to pay and is not personally liable for the debt or assumed the mortgage - in which case the grantee expressly agrees to pay and becomes personally liable for the debt, while the debtor becomes secondarily liable as a surety.

An accountant owned a small farmhouse and land that he planned to pass on to his two children, a son and a daughter. The accountant was contacted by a longtime family friend who said that she had retired and was looking for a place to live. In order to help the friend, the accountant made an inter vivos conveyance of the farmhouse and land "to the friend for her life, and then to my heirs; but if none of my heirs survive the friend, then to my lawyer." Two years later, the accountant died, leaving the son and the daughter as his only heirs. Recently, the daughter died, but the friend is still living. The jurisdiction does not apply the Rule in Shelley's Case or the doctrine of worthier title. Which of the following best describes the son's current property interest in the land? A A contingent remainder. B A vested remainder subject to complete divestment. C A vested remainder subject to open. D No interest in the land.

B A remainder is a future interest in real property that is capable of becoming possessory upon the expiration of a life estate or term of years. Remainders are either: vested - not subject to any condition precedent AND held by an identifiable living person (e.g., "then to my son and daughter") or contingent - subject to some condition precedent (other than the natural termination of the prior estate) OR held by an unknown or unborn person (e.g., "then to my heirs, but only if they survive my friend"). A vested remainder is subject to complete divestment if the occurrence of a subsequent condition will eliminate the remainder interest (e.g., "then to my heirs; but if none survive my friend, then to my lawyer"). Here, the accountant conveyed a life estate to the friend and a remainder to his heirs. The remainder was contingent while the accountant was alive because his heirs were unknown. But it vested once the accountant died and his heirs (the son and the daughter) became known (Choice A). That vested remainder, however, is subject to complete divestment if neither survives the friend. As a result, the son holds a vested remainder subject to complete divestment.

A man owned a 25-acre tract of land. He conveyed 20 of the 25 acres to a developer by warranty deed and continues to live on the 5-acre portion he retained. The deed to the 20-acre tract was promptly recorded and contained the following provision: "It is a condition of this deed that all owners, and their heirs and assigns, of any portion of the 20-acre tract shall use the land for single-family residences only." The applicable zoning ordinance allows for single and multi-family homes in this area. The developer fully developed the tract into a residential subdivision consisting of 20 lots with a single-family home on each lot. The lots were subsequently sold and the deed to each lot referenced the quoted provision. A woman who owned one of the lots on the perimeter of the subdivision has decided to build an addition to her house, which would contain an apartment she intends to rent to students of a nearby college. An individual who lives in an adjacent residential neighborhood opposes the woman's addition because he does not want rowdy college students nearby. Can the individual prevent the woman from building the apartment? A No, because the zoning ordinance allows for multi-family homes as well as single-family homes. B No, because the individual does not have the right to enforce the restriction. C Yes, because the original parties intended for the rights and duties to run with the land. D Yes, because the restriction is valid under the common-law Rule Against Perpetuities.

B An equitable servitude is enforceable if its (1) in writing (2) intends to run with the land (3)touches & concerns the land and (4) notice is provided. Therefore, the express equitable servitude in the deed between the man and the developer (original parties) restricting the use of the 20-acre tract is enforceable. However, it can only be enforced by the original parties or their successors in interest. Since the individual's property is adjacent to the subdivision—not part of the 20-acre tract—he is not a successor in interest. As a result, he does not have the right to enforce the restriction.

A man owned a building. He executed a deed conveying the building to a local church "for the purpose of using the building to further religious education." Six years later, the man died, leaving his niece as his sole heir. The man's duly probated will left his entire estate to a friend. Eighteen months later, the local church, having never made use of the building, conveyed all of its interest in the building to an investor for valuable consideration. The investor has filed an action to quiet title against the friend and the niece. The investor has also joined a state official who argues that a valid charitable trust was created and that the attorney general of the state should be permitted to enforce the charitable trust. In whom should the court find proper title is vested? A The friend. B The investor. C The niece. D The state official.

B Fee simple absolute (FSA) is absolute ownership of property for a potentially infinite duration and has no future interest. Like an FSA, a defeasible fee is ownership of potentially infinite duration. But unlike an FSA, a defeasible fee can be terminated by the occurrence of a stated event. Defeasible fees are limited by specific durational or conditional language (e.g., "so long as," "but if"). However, language that limits only the purpose of the transfer (e.g., "for the purpose of") creates an FSA. Here, the man's deed to the local church did not include conditional or durational language. Instead, he conveyed the building "for the purpose of using the building to further religious education." This conveyance created an FSA—not a defeasible fee. As a result, the church had absolute ownership of the building, and the man had no interest in the building to devise to the friend (Choice A). Since the church later conveyed all of its interest in the building to the investor, the court should find that proper title is vested in the investor.

A man owned a tract of land that he divided into two parcels, each of which was adjacent to a stone retaining wall. The man sold both parcels. In the deeds that conveyed the parcels, the purchasers each agreed that "the owners, their heirs, and their assigns will maintain a retaining wall made of stone between the properties." They further agreed that they "will share equally any expenses associated with the retaining wall." The deeds were properly recorded. Subsequently, each of the parcels was sold several times, and none of the owners properly maintained the retaining wall. Fifteen years ago, the owners of the two parcels made the joint decision to dismantle the wall. Two years ago, one of the parcels was sold, and the new owner decided to rebuild the retaining wall. The new owner asked the other owner to pay half of the expenses to rebuild the wall, and the other owner refused. The new owner paid to erect the retaining wall and then brought suit against the other owner to collect half the expenses. Can the new owner successfully bring suit against the other owner for half of the expenses? A No, because the covenant was effectively terminated by a change in circumstances. B No, because the previous owners decided to dismantle the retaining wall. C Yes, because the covenant ran with the land. D Yes, because the deed created an equitable servitude.

B The owners have effectively abandoned the covenant (we see non-use plus intent to abandon - i.e. dismantling the wall)

A fitness company entered into a 10-year lease with the landlord of a gym facility. The lease required the fitness company to maintain the gym equipment in proper, working condition and to upgrade or replace any of the equipment as required by the safety guidelines for gymnasiums issued by a national organization of gymnasiums. In addition, the lease specified that all of the fitness company's clients must sign a valid waiver releasing the current landlord from liability for any injury arising from their improper use of the gym equipment. One year into the lease, the landlord transferred the remaining term of the fitness company's lease to a large fitness conglomerate. The transfer occurred without the fitness company's consent. The fitness company paid rent to the conglomerate, but the company stopped making its clients sign the liability waiver because the conglomerate did not require any of its gym members to sign one. The conglomerate has brought an action against the fitness company to enforce this covenant in the lease. Who will likely prevail? A The conglomerate, because the fitness company had required its clients to sign the waiver in the past. B The conglomerate, because the liability-waiver requirement touches and concerns the land. C The fitness company, because the conglomerate does not require liability waivers from its gym members. D The fitness company, because it did not consent to the assignment of the lease to the conglomerate.

B Unless the lease states otherwise, a landlord may assign his/her rights under the lease to a third party (i.e., assignee-landlord) without the tenant's consent. The assignee-landlord can then enforce covenants (i.e., promises) in the lease that run with the land.* A covenant runs with the land when: the original parties intended to bind successors in interest (e.g., assignee-landlord) the covenant touches and concerns the land—i.e., affects the land's use or value and the assignee-landlord is in privity of estate with the tenant—i.e., a mutual or successive relationship in the same property interest. Even if the intent to bind successors in interest is not explicitly stated in the lease, it is generally presumed when the covenant touches and concerns the land.

A landowner died and left a piece of land to his three sons as joint tenants with the right of survivorship. The youngest son sold his interest in the property to the oldest son. The oldest son then died and left all of his real property interests to his daughter. The youngest son later died. Following the youngest son's death, the middle son gave his interest in the property to a nephew. The applicable jurisdiction continues to follow the common law with regard to joint tenancy. Who owns the property? A The daughter and the nephew each own a one-half interest in the property as tenants in common. B The daughter and the nephew hold the property as tenants in common, with the daughter owning a one-third interest and the nephew a two-thirds interest. C The daughter and the nephew hold the property as tenants in common, with the daughter owning a two-thirds interest and the nephew a one-third interest. D The nephew owns the property outright.

B so originally the 3 sons each had a 1/3rd interest in the property as JT w right of survivorship. when the youngest sold his interest in the property, he destroyed the unity of title and unity of interest - two of the four unities. So, the middle and oldest owned 2/3rd of the property as JT w right of survivorship. and the oldest also had a 1/3rd interest as a tenant in common. A joint tenancy is not devisable because it passes automatically to the remaining joint tenants, but a tenancy in common is devisable. So when the oldest son died, the daughter received his 1/3 tenancy-in-common interest and the middle son received his 1/3 joint-tenancy interest (thereby owning a 2/3 interest). The middle son later gave his property to the nephew, so the daughter owns a 1/3 interest and the nephew owns a 2/3 interest in the property as tenants in common

A widower owned a house in fee simple absolute. His daughter is his only child. The daughter also has one child, the widower's grandson. The grandson and his wife had just had their first child when the widower executed a will in which the house was devised to his daughter for her life and the remainder to his grandson's children. The widower left the rest of his estate to a charity. After the widower's death, his grandson had a second child and the widower's daughter died shortly thereafter. A year later, the grandson had a third child. The widower's grandson recently died, survived by all three of his children. The jurisdiction follows the common-law Rule Against Perpetuities as well as the Rule of Convenience. Who now owns the house? A The first child. B The first child and the second child. C The first child, the second child, and the third child. D The charity named in the will.

B {quick sum: rule of convenience is a class closing mechanism that is triggered once any member of the class is entitled to immediate possession- so when the daughter died, the class closed} A gift is a voluntary transfer of property without consideration (e.g., a devise). A class gift is created when the gift recipients (i.e., donees) are unspecified but can be identified in the future. Because a class gift is a contingent future interest, the Rule Against Perpetuities (RAP) renders the gift void unless the interest must vest or fail within 21 years after the end of a relevant life in being when the interest was created. Here, the widower devised a life estate to his daughter and a remainder to his grandson's children. Since at the time of the widower's death the grandson had a child, the child had a vested remainder subject to open and any afterborn children held a contingent remainder. Each of these future interests is subject to RAP, but neither interest violates RAP because the grandson is a relevant life in being—on his death, it would be known whether the grandson had other children. However, the Rule of Convenience, which the jurisdiction has adopted, closes class membership once any member of the class is entitled to immediate possession of a share in the class gift. Here, that occurred when the widower's daughter died and the remainder interest in the grandson's children became a present interest. Only the first child and the second child were born* before the class closed upon the daughter's death, so only they own the house (Choices A & C).

A farmer had two children, a daughter and a son. The farmer was diagnosed with a terminal illness by his doctor. Upon arriving home immediately after receiving the news, the farmer wrote the following: "I, [farmer], now transfer my farm at [address] to [the son]." The farmer, who owned the farm in fee simple absolute, then signed and dated the document. The farmer took the document to his neighbor, told her that the document belonged to his son, and asked her to give it to his son when the farmer died. The neighbor complied with the farmer's directions. Shortly after the farmer's death, a will was found among his personal papers. The farmer had executed the will in compliance with all of the required formalities after his wife's death 11 years prior to his own. This will devised the farm to the farmer's daughter. The son and the daughter, who were the farmer's only heirs, learned of the document and the will, and each claimed ownership of the farm outright. The farmer's personal representative admitted the will to probate then filed an appropriate action to determine ownership of the farm. Who is entitled to ownership of the farm? A The daughter, because the document was neither delivered to nor accepted by the son prior to the owner's death. B The daughter, because the will was executed before the document. C The son, because the document took effect before the will. D The son, because the document was executed after the will.

C A deed is a legal instrument that transfers an interest in real property from the owner (grantor) to another (grantee). To be valid, the deed must be signed by the grantor, identify the parties, contain words of transfer, and identify the land with reasonable certainty—as the farmer's document does here. A property interest may then be transferred by delivering the deed to the grantee, and acceptance is presumed if the transfer is beneficial to the grantee. A grantor can deliver the deed to the grantee through an independent third party. But if the third party's transfer to the grantee is conditioned on the grantor's death, then the grantor's delivery of the deed to the third party must evidence the intent to make a present gift to be effective. the "i now grant the land" indicated his present intent. so the grant of the deed took affect before the will

A buyer entered into a written contract to purchase real property from its owner. The buyer asked that the owner convey the property to the buyer and her brother as tenants in common. The owner noted that the buyer's brother would need to attend the closing to sign the necessary paperwork. Because the brother lived in another state and could not attend the closing, the buyer brought her roommate to the closing instead. The roommate pretended to be the buyer's brother and signed all the necessary paperwork with the brother's name. The buyer paid the full purchase price, and the deed granting the buyer and her brother half interests as cotenants was recorded on the same day. Unbeknownst to any of the parties, the evening before the closing, the buyer's brother had died in a car accident. The brother's valid probated will devised all of his property to his wife. The brother's wife has brought an action against the buyer, who has taken sole possession of the property, and the original owner to quiet legal title to an undivided one-half interest in the property. Who should the court find has legal title to the real property, and in what proportions? A The original owner. B The buyer. C One-half in the buyer and one-half in the original owner. D One-half in the buyer and one-half in the brother's wife.

C A deed that names a nonexistent grantee is void as to that nonexistent grantee. So if a nonexistent grantee was conveyed an interest in a tenancy in common, then the grantor would retain the nonexistent cotenant's interest and have a tenancy in common with the other cotenant(s) named in the deed.

The sole, unmarried owner of a residence died. She had validly devised the residence to her long-term companion with whom she had lived for over 20 years. The residence was devised to the companion "for life or until she vacates the premises, and then to my nephew." Several years after the owner's death, the nephew transferred by quitclaim deed "any interest I have" in the residence to a creditor in satisfaction of a debt that the nephew had incurred. The deceased owner's companion continues to live in the residence. Which of the following most accurately describes the creditor's interest in the residence? A The creditor has a vested remainder in the residence. B The creditor has an executory interest in the residence. C The creditor has both a vested remainder and an executory interest in the residence. D The creditor has a mere expectancy with regard to the residence until the companion dies or vacates the premises.

C A defeasible life estate is a present possessory interest that terminates upon the end of the measuring life or the happening of a stated event. If title passes to someone other than the grantor when the present interest terminates, then the estate is followed by a remainder and an executory interest.

A widower owned a parcel of land. At his death, ownership of the parcel of land was transferred by his will to his three adult children as joint tenants with the right of survivorship. Several years later, the youngest child sold his interest in the parcel to an investor. Recently, the oldest child died, devising all of her real property to her daughter. Who currently owns the parcel of land? A The investor and the middle child of the widower each own a one-half interest in the land as joint tenants with the right of survivorship. B The investor and the middle child of the widower each own a one-half interest in the land as tenants in common. C The investor owns a one-third interest and the middle child of the widower owns a two-thirds interest in the land as tenants in common. D The investor, the daughter of the oldest child, and the middle child of the widower each own a one-third interest in the land as tenants in common.

C A joint tenancy is a type of concurrent estate in which two or more persons own an undivided and equal interest in property with the right of survivorship. The right of survivorship means that a joint tenant's interest disappears upon death and the remaining joint tenants' interests automatically expand proportionally to absorb it. As a result, a joint tenant cannot devise his/her interest at death. In contrast, a joint tenant's interest can be transferred during life, but the conveyance will sever the joint tenancy and convert it into a tenancy in common—i.e., a concurrent estate where two or more persons hold separate but undivided property interests with no right of survivorship. If two or more joint tenants remain after the transfer, then a tenancy in common will exist between the severing tenant and the remaining joint tenants, who will retain a joint tenancy with respect to each other.

A businessman mortgaged his residence as security for a bank loan, the proceeds of which were used in his business. The bank duly recorded the mortgage. Subsequently, the businessman obtained a second loan for his business, this time from a private investor. The businessman again pledged his residence as security for this second loan. The promissory note executed by the businessman provided that the sole remedy for the private investor upon default of the loan obligation was foreclosure on the mortgage. Several years later, the businessman failed to make timely payments to the private investor and defaulted on that loan. Can the private investor foreclose on the mortgage of the residence? A No, because a mortgage is unenforceable if the borrower is not personally liable on the loan for which the mortgage serves as security. B No, because the businessman has not defaulted on the senior bank loan. C Yes, because the mortgage secured repayment of the loan and the loan was in default. D Yes, because the private investor's mortgage, as the more recent mortgage, has priority over the bank's mortgage on the residence.

C A mortgage is a lien on real property used to secure repayment of a debt. A lender (mortgagee) may generally foreclose on a mortgage if the debtor (mortgagor) defaults on the mortgage loan. A foreclosure terminates any interest in the foreclosed property that is junior (lower in priority) to the interest being foreclosed but does not affect any senior interest (higher in priority). When no recording act is provided (as seen here), the "first in time, first in right" rule is used to prioritize interests. Here, the businessman mortgaged his residence to the bank and then to the private investor. Since the bank's mortgage was first in time, it is senior to the private investor's mortgage (Choice D). But this does not preclude the private investor from foreclosing on his junior mortgage (Choice B). The private investor's mortgage secured repayment of his loan to the businessman and the loan was in default, so the private investor can foreclose on the mortgaged residence. However, the bank's senior mortgage will remain attached to the property.

A childless widow died. By the terms of her will, she left her residence to her favorite niece for life and then to such of her niece's children who reach the age of 21. At the time of the widow's death, the niece had two children, a son who was 25 and a daughter who was 13. Before her death, the niece had a second daughter. At the time of the niece's death, her son was 40, her older daughter was 28, and her younger daughter was 15. The applicable jurisdiction continues to follow the common-law Rule Against Perpetuities. Immediately before the niece's death, who held a vested remainder in the residence? A None of the children, due to the "bad as to one, bad as to all" rule. B Only the son. C The son and the older daughter. D All three children.

C A remainder is a future interest that is capable of becoming possessory upon the expiration of a life estate or term of years. Remainders are either: vested - not subject to any condition precedent AND held by an identifiable living person or contingent - subject to a condition precedent (e.g., reaching 21 years of age) OR held by an unknown or unborn person. A remainder may be given as a class gift to persons as members of a group (e.g., children, siblings, heirs) whose number, identity, and share of the interest are determined in the future. If at least one but not all members of the class receive a vested remainder at the time of the conveyance, then that vested remainder is subject to open. Additional members can be added once they satisfy the condition precedent. But absent a closing date, the rule of convenience closes the class once any member becomes entitled to immediate possession of the property. Here, the widow gave a remainder as a class gift to the niece's children. Only the son had a vested remainder at the time of the widow's death (because he was already 21). However, the class remained subject to open until the niece's death, when the class members would be entitled to immediate possession of the residence. Only the son and the older daughter (not the younger daughter) had reached the age of 21 by that time, so only they held a vested remainder in the residence

The owner of a commercial building leased the premises at fair rental value to a civic organization for a 25-year term. The lease contained a reasonable right-of-first-refusal provision granting the organization a right to purchase the building if the owner found a buyer who was ready, willing, and able to purchase the building at a price agreed to by the owner and the buyer. Fifteen years into the lease, the owner was approached by a friend who was ready, willing, and able to purchase the building. Because of the friendship, the owner agreed to a purchase price that was below the market price. The owner notified the civic organization of the proposed sale, and the organization invoked its right of first refusal. However, the owner refused to sell the building to the organization for less than its fair market value. The applicable jurisdiction has retained the common law with respect to the Rule Against Perpetuities. May the civic organization compel the owner to sell the building to the organization at the price agreed upon by the owner and the friend? A No, because the organization's right of first refusal violates the Rule Against Perpetuities. B No, because the organization's right of first refusal constitutes an encumbrance on marketable title. C Yes, because the right of first refusal was reasonable. D Yes, because the right of first refusal was a valid covenant running with the land.

C A restraint on alienation is a provision that restricts the transferability of real property. unreasonable restraints are disfavored bc public policy encourages the free transfer of property rights. however, a partial restraint - one that is limited and for a reasonable purpose - is generally valid. A right of first refusal is a partial, promissory restraint on alienation that gives its holder a preemptive right to acquire property prior to its transfer to another party. This right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another. If so, the right of first refusal is valid and enforceable by an injunction. As a result, the organization can compel the owner to sell the building to the organization at the below-market price.

A purse maker sought to market her line of "smart" purses that were compatible with a new handheld device. As part of her plans, the purse maker sought to purchase a brick-and-mortar store from which to sell her purses. The purse maker found a suitable store and entered into a contract with the owner of the store. The contract was in writing, signed by both parties, and stated the essential terms, including a closing date in 30 days. Due to the purse maker's plan to sell her purses in advance of the release of the new handheld device, the contract stated that the closing date could not be delayed. One week before the closing date, the purse maker discovered that the store was in violation of a zoning ordinance that mandated an updated version of the current fire sprinkler system. The owner promised that he would promptly update the fire sprinkler system and that, although it would not be finished by the closing date, it would be done in time for the grand opening of the store. In addition, the owner promised to provide a warranty deed upon closing to shield the purse maker from any potential liability stemming from the outdated fire sprinkler system. On the day of closing, the purse maker refused to close the land-sale deal. In an action by the owner for specific performance against the purse maker, who will likely prevail? A The owner, because the fire sprinkler system would be updated in accordance with the zoning ordinance before the store's grand opening. B The owner, because the warranty deed would protect the purse maker from liability for the zoning-ordinance violation. C The purse maker, because the owner did not provide marketable title to her on the closing date as stated in the land-sale contract. D The purse maker, because the warranty deed would not protect her from liability for the zoning-ordinance violation.

C Absent contrary language, real estate contracts contain an implied covenant of marketable title, which obligates the seller to deliver marketable title (i.e., title free from defects) on the date of closing. However, strict adherence to the closing date is not required in equity unless time is of the essence. Time is of the essence when: the contract specifically states that "time is of the essence" circumstances indicate that it was the parties' intention to strictly adhere to the closing date or one party gives the other party notice that time is of the essence within a reasonable time prior to closing. If time is of the essence and the seller cannot deliver marketable title on the date of closing, then the seller is in breach and the buyer can rescind the contract.* This is true even if the seller can correct the issue within a reasonable time after closing.

The owner of a restaurant decided to pursue a different line of work, so he conveyed the restaurant to an up-and-coming chef. The owner executed a valid, written deed to the chef, who did not record the deed. The chef was talented, but he did not understand how to run a business, so his restaurant failed within a few months. A culinary school, in search of a new location to hold its cooking classes, purchased the restaurant from the chef. The chef executed a valid, written deed to the culinary school, and the culinary school promptly recorded the deed. After the sale, but before the culinary school had a chance to occupy the restaurant space, the original owner noticed that the restaurant was vacant. The owner then sold the space to a fast-food chain, and the fast-food chain promptly recordedthe deed. The owner did not tell the fast-food chain of his earlier conveyance of the restaurant to the chef, and the fast-food chain otherwise lacked actual knowledge of this conveyance. Subsequently, the chef recorded the deed from the owner conveying the restaurant to him. When the fast-food chain attempted to take possession of the restaurant, it discovered that the culinary school had moved into the restaurant. The fast-food chain has filed an appropriate action to quiet title against the owner, the chef, and the culinary school. The jurisdiction in which the restaurant is located applies a race-notice recording statute. Who will likely prevail? A The chef. B The culinary school. C The fast-food chain. D The owner.

C Most jurisdictions follow the grantor-grantee recording index (default rule), where recorded documents are organized by names of parties to a conveyance.* A recorded deed that is not found within this chain of title is called a "wild deed" and fails to give constructive notice to subsequent purchasers—as seen with the culinary school's deed (see image above). Here, the culinary school's deed from the chef was recorded before the fast-food chain's deed from the owner. But the culinary school's deed is a "wild deed" because the chef's deed from the owner was recorded after the fast-food chain purchased the restaurant. Therefore, the fast-food chain also lacked constructive notice because a search of the recording index by the owner's name would indicate that he could transfer title to the fast-food chain. And since the fast-food chain (a BFP) recorded before the chef, it will likely prevail Sum: A recorded deed that falls outside the chain of title is a "wild deed" that fails to give constructive notice to subsequent purchasers.

A grandmother had lived in her family's mansion for her entire life, but she decided to sell the property and move into a smaller home. Desiring to keep the mansion in her family, the grandmother sold the mansion to her grandson at a below-market price. The grandmother included a right-of-first-refusal clause in the valid, written deed to her grandson, which the grandson signed. The clause stated that, in the event the grandson, his heirs, devisees, or assigns attempted to sell the property to a non-family member, the grandmother, her heirs, devisees, or assigns would have the opportunity to purchase the property before the transfer. One year after the grandson purchased the property, he was approached by a buyer who offered him twice the price he had paid his grandmother. The grandson readily accepted and immediately sold the mansion to the buyer. The grandmother subsequently read about the sale in the local newspaper and brought an action against the buyer to enforce her right of first refusal. The jurisdiction adheres to the common-law Rule Against Perpetuities. Which of the following doctrines will help determine whether the grandmother will be able to enforce the right-of-first-refusal clause? A The doctrine of worthier title. B The parol evidence rule. C The Rule Against Perpetuities. D The statute of frauds.

C Rights of first refusal are generally subject to the Rule Against Perpetuities, so this contingent future interest is void if it there is any possibility that it could vest more than 21 years after some relevant life in being at the creation of the interest. Answer A is wrong bc the doctrine of worthier title is triggered when a grantor conveys property inter vivos to another and, in the same instrument, conveys a future interest to the grantor's heirs (not seen here). When this occurs, the future interest is rendered void and the grantor is deemed to hold a reversion. However, this doctrine has been abolished in most states.

A year ago, a man and a woman inherited adjacent parcels of land upon the death of a relative. Parcel One, the man's parcel, was landlocked. The woman granted the man an easement in writing over her parcel, Parcel Two, so that he could build a road to access the sole public road that ran beside Parcel Two. The easement was not recorded. Six months ago, the man, having never set foot on Parcel One, sold it to the woman. Shortly thereafter, the woman sold Parcel One to a buyer who knew about the easement the woman had granted the man even though no access road across Parcel Two had been built. After selling Parcel One, the woman gave Parcel Two to her daughter. The buyer of Parcel One now seeks to construct a road across Parcel Two to access the public road, but the daughter has refused to allow the buyer to do so. Does the buyer have a right to construct a road across Parcel Two to reach the public road? A No, because the man's easement was not recorded. B No, because the man's easement was extinguished upon the woman's acquisition of Parcel One. C Yes, because the buyer possesses an easement by necessity. D Yes, because the buyer had knowledge of the man's easement before purchasing Parcel One.

C The first easement terminated when the dominant estate merged into the servant estate. However, Parcel A is landlocked and useless without an easement (easement by necessity). An easement by necessity is created when theres (1) necessity, (2) common ownership, and (3) severance.

A widow executed a will in which she left her house to her son and the remainder of her estate to her daughter. The house was subject to a purchase-money mortgage at the time of the widow's death, the unpaid portion of which was nearly equal to the value of the residuary estate. The son now demands that the personal representative of the estate use the residuary estate to pay off the mortgage. The will contains a general provision for the payment of all the testator's debts, but not a specific provision authorizing the payment of the outstanding balance of the mortgage. The jurisdiction follows the common law. Should the personal representative accede to the son's demand? A No, because the doctrine of satisfaction does not apply to a specific devise. B No, because the mortgage is a purchase-money mortgage. C Yes, because the son has a right to the exoneration of the mortgage. D Yes, because the will contains a general provision for the payment of the testator's debts.

C Under the common-law exoneration-of-liens doctrine, the recipient of a specific devise of real property can use the remaining assets in the testator's estate to pay off any encumbrances on that property.

A private investor purchased a 50-unit apartment building and took up residence in one of the apartments. The purchase was enabled by a nonrecourse loan obtained by the investor from a bank. As security for the loan, the bank took a mortgage in the apartment building. The mortgage contained an acceleration clause that provided that, in the event that the apartment building was transferred, the full amount of the outstanding obligation would be, at the election of the bank, due and payable unless prior permission of the bank was obtained. Several years later, the investor, having timely made all required loan payments, sold the apartment building to a real estateinvestment firm. The firm assumed personal liability for the loan. The bank, upon learning of the transfer, demanded that the firm pay the full amount of the outstanding loan obligation. When the firm refused, the bank brought a foreclosure action to collect the full amount of the outstanding loan obligation. Is the bank likely to succeed? A No, because the loan obtained by the private investor was without recourse. B No, because the mortgaged property was residential. C Yes, because the "due on sale" clause is enforceable. D Yes, because the real estate investment firm assumed personal liability for the loan.

C a due-on-sale clause allows a lender to demand full payment of the remaining mortgage debt if the debtor (mortgagor) transfers the mortgaged property without the lender's consent. If the mortgage is not paid, then the lender can initiate foreclosure proceedings to recover any remaining debt. D is wrong bc while its true that the firm assumed liability for the loan, its not why the bank would succeed. The bank can foreclose on the building because the mortgage is in default, regardless of whether the firm assumed the mortgage (i.e., personally liable) or took the property subject to the mortgage (i.e., not personally liable).

A buyer entered into a contract to purchase a 20-year-old residence from its current owner and occupant. Among the terms of the contract was a warranty that the residence was free from termite infestation and damage and a requirement that the seller obtain a termite inspection and provide the buyer with a report of the inspection. The seller timely complied with this requirement. In the report, the inspector indicated that no evidence of termites was found but noted that there were certain areas of the house that the inspector was unable to access due to existing structures, such as interior walls and ceilings. At closing, the seller provided the buyer with a deed that the buyer promptly and properly recorded. A few weeks later, the buyer, in the process of remodeling the residence, uncovered live termites and extensive damage in the wooden beams that supported the walls and floor of the house. The seller had not been aware of the presence of the termites in the house or the damage that they had done to its structure. If the buyer sues the seller for breach of the warranty relating to termites, who will likely prevail? A The buyer, because the seller breached the warranty of fitness or suitability. B The buyer, because the termites and their damage to the residence were not discoverable through a reasonable pre-sale inspection. C The seller, because promises in the contract merged into the deed. D The seller, because the seller complied with the terms of the contractual warranty.

C the merger doctrine stands for the proposition that the contract for the conveyance of property merges into the deed of conveyance; therefore, any guarantees made in the contract that are not reflected in the deed are extinguished when the deed is conveyed to the buyer of the property. Here, the land-sale contract contained a warranty that the residence was free from termite infestation and damage. It also required that the seller obtain and provide the buyer with a termite-inspection report. But since there is no indication that these obligations were included in the deed, they can no longer be enforced. Therefore, the seller is likely to prevail.

An investor purchased undeveloped land with the aid of a loan from a bank. The loan, which was evidenced by a note, was secured by a mortgage on the property. The note contained a "due on sale" clause. Subsequently, the investor sold the land to a developer. The bank agreed to waive the "due on sale" clause if the developer assumed the mortgage, which the developer did. The following year, the developer failed to make timely payments on the note, resulting in a default. The developer filed for bankruptcy, and his personal liability for the note was completely discharged. The bank has brought an action against the investor based on the default of the note. Is the bank likely to prevail? A No, because the bank waived the "due on sale" clause. B No, because the developer assumed the mortgage. C Yes, because the developer is no longer liable on the note. D Yes, because the investor is liable on the note.

D A "due on sale" clause allows a lender to demand full payment of any remaining mortgage debt if the debtor transfers the mortgaged property without the lender's written consent. If this clause is waived, the debtor remains liable on the note—even after transferring the mortgaged property—until the debtor is released by the lender.

A farmer owned a farm in joint tenancy with her brother. The farmer lived on the farm, while her brother lived upstate in a major metropolitan area. The farmer and her brother had taken ownership of the farm pursuant to their father's will upon his death. Several years later, the farmer took out a loan from a local lending institution in order to build a new barn on the farm. The farmer executed a promissory note in favor of the lender and granted the lender a mortgage on her interest in the farm. After the barn was constructed, the farmer defaulted on the loan and died shortly thereafter. The jurisdiction adheres to the title theory of mortgages. Can the lender enforce its mortgage by foreclosing on the farm? A No, because the brother became the sole owner of the farm upon the farmer's death. B No, because the farmer's death terminated the mortgage. C Yes, because the farmer had completed construction of the barn before her death. D Yes, because the farmer owned a one-half interest in the farm at her death.

D A joint tenant may grant a mortgage on his/her joint-tenancy interest without the other joint tenant's consent. In a lien-theory jurisdiction (majority rule), the mortgage does not sever the joint tenancy—but it does in a title-theory jurisdiction.

A limited partnership purchased a parcel of land that it intended to develop for commercial purposes. The limited partnership borrowed half the purchase price from a bank and paid the remainder from its own funds. The loan from the bank was secured by a mortgage on the land. The loan document stated that the bank agreed to look solely to the real property for satisfaction of the loan. The limited partnership made several payments on this nonrecourse loan and then, shifting its focus to the development of another parcel of land, defaulted on the loan despite having the ability to make the required payments on the loan. Can the bank foreclose on its mortgage? A No, because a mortgage is unenforceable unless there is personal liability on the obligation for which the mortgage serves as security. B No, because, despite the language in the loan document, the bank is required to first sue the limited partnership as the limited partnership has the ability to make the required loan payments. C Yes, because the loan proceeds were used to purchase the parcel of land. D Yes, because the mortgage secured repayment of the loan and the loan was in default.

D A mortgage is an interest in real property that secures the repayment of a debt or other obligation. This allows the mortgagee to foreclose on that property upon default to satisfy the outstanding debt.

A married couple bought a house to use as a residence. Their bank loan was secured by a mortgage on the house. The following year, the couple granted a second mortgage to a savings and loan association in exchange for a loan. The proceeds from this loan were used in the couple's business. Several years later, the couple defaulted on both loans. The couple offered their interest in the house to the bank by deed in lieu of foreclosure and the bank accepted; the bank did not reserve the right to foreclose. What effect does this transaction have on the savings and loan association's mortgage? A As an interest with priority over the bank's mortgage, the savings and loan association's mortgage is unaffected. B As a junior interest to the bank's mortgage, the savings and loan association's mortgage is completely eliminated. C The savings and loan association cannot foreclose on its mortgage, but must look to the personal liability of the couple, now that the bank owns the house. D The house remains subject to the savings and loan association's mortgage.

D A mortgagor (debtor) may convey all interest in the mortgaged property to the mortgagee (lender) in lieu of foreclosure so long as both parties agree. This "deed in lieu of foreclosure" allows the mortgagee to take immediate possession of the property without the formalities of a foreclosure sale. However, the mortgagee takes the property along with any junior interests attached to the property—e.g., the savings and loan association's second mortgage. And if the mortgagee accepts a deed in lieu of foreclosure without reserving the right to foreclose (as seen here), then its mortgage is extinguished. As a result, the house remains subject only to the savings and loan association's mortgage.

A worker took a temporary job of unknown duration in a distant state. The worker entered into a written agreement to rent a room in that state on a weekly basis, with the weekly period to start on Sunday & a weekly rent of $350, reflecting a per-day rental rate of $50, to be paid at the end of the week on Saturday. The worker occupied the room & paid the rent for several months before learning on a Tuesday that his job would be finished the following day. That same Tuesday evening, the worker gave an oral notice of termination to the landlord. There is no applicable statute. Assuming that the landlord is unable to find someone else to rent the room, how much rent is the worker obligated to pay? A. $150 bc the worker's notice would terminate the lease immediately B. $350 bc the workers notice would terminate the lease at the end of the current period, on Saturday C. $500 bc the worker's notice would terminate the lease seven days after notice was provided, on the following Tuesday. D. $700 bc the worker's notice would terminate the lease at the end of the next full period, on the following Saturday

D A periodic tenancy lasts for a set period of time & then automatically renews at the end of each period (e.g. on a weekly basis). Either party can terminate this tenancy at the end of a full period by giving the other party notice before that period begins. Meaning that the notice given during the current period is effective to terminate the tenancy on the last day of the following period.

An owner of land devised the land to a specific university "for the purpose of conducting field research for the improvement of agricultural products & for no other purpose." The owner devised all of her other real property interests to her granddaughter. The owner's only heir was her son. Later, the university decided to build a science classroom on the land even though using the land for the enumerated purpose was still practicable. The owner's granddaughter, asserting ownership of the land, sought to evict the university from the land. There is no applicable statute, and the common law RAP is unmodified in the jdx. If the court rules in favor of the university, what's the most likely reason? A. The cy pres doctrine applies to the university's current use of the land B. The granddaughter's executory interest in the land is void under the RAP C. The owner's son, not the granddaughter, is the proper P to seek eviction D. The university owns the land in fee simple absolute bc the devise did not include conditional or durational language

D Defeasible fees are limited by specific durational or conditional language. language that limits only the purpose of the transfer creates a FSA. here, theres no durational language - so the university owns the land in FSA

A speculator and the original owner of a condominium unit entered into a contract for the sale of the unit. The contract, which contained no reference to the marketability of the title, called for the owner to transfer the unit to the speculator by quitclaim deed, which the owner did on the date called for in the contract. A year later, the speculator entered into a contract to sell the unit to a third party at a price significantly higher than the price paid by the speculator for the unit. The contract specifically required the speculator to provide the third party with title to the unit free from all defects. Upon investigation, the third party discovered that the unit was subject to a restrictive covenant that rendered the title to the unit unmarketable and that the restrictive covenant had existed at the time that the speculator had purchased the unit. The third party refused to complete the transaction. The speculator subsequently sued the original owner of the condominium unit for breach of contract. For whom is the court likely to rule? A The speculator, because a covenant of marketable title was implied in the contract. B The speculator, because of the warranty against encumbrances. C The original owner, because the condominium unit was transferred by a quitclaim deed. D The original owner, because of the merger doctrine.

D Note that an implied covenant of marketable title is part of every land-sale k, regardless of the type of deed created. Under the doctrine of merger, any obligations contained in the land-sale k merge into the deed & are extinguished at closing. as a result, these obligations are enforceable only if they're contained in the deed. Here, the covenant of marketable title was implied in the land-sale contract between the speculator and the original owner. But this covenant was extinguished when it merged into the deed upon closing, so the court will likely rule for the original owner (Choice A). This is true even if the speculator had sued under the deed as opposed to the land-sale contract. That is because the condominium unit was transferred to the speculator by a quitclaim deed, which contains no guarantees as to the state of title.

Anticipating the death of his mother and needing money, the only child of a terminally ill widow represented himself as owner of the widow's residence to a couple. The couple paid the son $200,000 for the residence. Although the couple did not immediately move into the residence, they promptly recorded the warranty deed they received from the son in the land records for the county in which the residence was located. The couple was unaware of the mother's ownership of the residence, which was also reflected in those same land records. One week after the land sale, the mother died. Upon her death, the residence passed by the terms of the mother's will to her son. The son, claiming ownership of the residence, has moved into it. The son has offered to return the $200,000 to the couple and pay for any expenses they have incurred with regard to this matter. The recording act of the applicable jurisdiction 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." Of the following, which provides the best argument for the couple that they hold title to the residence? A The son's rights to the residence have been lost through ademption. B The couple's ownership of the residence is protected by the recording act. C The son's ownership of the residence vests automatically in the couple under the Shelter Rule. D The residence belongs to the couple by application of the "estoppel by deed" doctrine.

D Under the doctrine of estoppel by deed, a grantor who conveys an interest in land by warranty deed before owning it is estopped from later denying the effectiveness of that deed.

The owner of land donated it to a charity by quitclaim deed. The charity did not record the deed. The following month, the owner sold the same land by warranty deed to a woman who paid valuable consideration and did not know about the prior gift of the land to the charity. The woman promptly and properly recorded her warranty deed. A month later, the charity recorded its quitclaim deed. The following year, the woman gave the property to her son by quitclaim deed. Although the land had remained undeveloped at all relevant times, the son discovered the possible conflict with the charity's claim after the conveyance. The son then recorded his deed. The recording act of the jurisdiction provides: "No unrecorded conveyance or mortgage of real property shall be good against subsequent purchasers for value without notice who shall first record." Who owns the land? A The charity, because the charity recorded its deed before the son recorded his deed. B The charity, because the son was not a purchaser for value. C The son, because the charity was not a purchaser for value. D The son, because the woman's purchase and recording of her deed gave the son superior rights to the land

D this is a race-notice statute. In a race-notice jurisdiction, a purchaser who lacks notice of an earlier property interest (BFP) and records first will prevail. under the shelter rule, a person who receives a property interest from a BFP is entitled to the same protection under the recording act as a BFP

An adult college student entered into a written, one-year lease of a condominium unit owned by a professor who was taking a one-year sabbatical in France. The lease, which began on September 1, called for a yearly rent of $12,000 to be paid in monthly installments of $1,000. The student lived in the unit for four months and paid $1,000 in rent to the professor each of those months. The student moved out of the unit on December 31 and stopped paying rent thereafter. Before moving out, the student transferred all of his rights under the lease for the remaining eight months to an employee of the college. Nothing in the lease prohibited the student from making this transfer. The employee moved into the unit on January 1. She lived there for five months and, each month, mailed $1,000 to the professor. She otherwise had no contact with the professor. At the end of May, the employee moved out and made no further rental payments. Despite making a good-faith effort, the professor was unable to rent the unit for the remaining three months of the lease. Under the terms of the lease, the student is liable to the professor for any unpaid rent. However, upon his return in September, the professor sued the employee for $3,000 in unpaid rent. Is the employee liable to the professor for the unpaid rent? A No, because the employee did not enter into a lease agreement with the professor. B No, because the student remained liable for the rent under the terms of the lease. C Yes, because the employee was the person who vacated the condominium unit. D Yes, because the employee was in privity of estate with the professor.

D this was an assignment, not a sublease. so the landlord can collect from either the tenant or the subsequent tenant

After inheriting a substantial amount of money, a man purchased a large estate in the mountains adjacent to a ski resort, intending to operate the estate as a seasonal rental property used exclusively to generate rental income. The man purchased the estate with cash. Unable to properly manage his wealth, he was impoverished a few months later. The man procured a mortgage on the estate from a credit union, and the mortgage was properly executed and recorded. In light of a struggling economy, credit union executives were confident that the man would default on the loan and wanted to ensure that the estate was properly maintained in anticipation of a subsequent sale. The credit union therefore sought to obtain a court order confirming its right to possession of the estate in order to make repairs and prevent further deterioration of the property. Can the credit union take possession of the estate? A No, in a lien-theory state, unless the mortgage included an acceleration clause. B No, in a title-theory state, absent default by the mortgagor. C Yes, in a lien-theory state, because the mortgagee is considered the owner of the land during the term of the mortgage. D Yes, in a title-theory state, until the mortgage has been fully satisfied.

D 1. Lien theory: the lender only has a security interest in the land (Mortgagor retains title and possession unless the lender forecloses) 2. Title theory: the lender has a legal title to the land, until the mortgage is fully satisfied


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