Property

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Four Unities of Joint Tenancy

(i) time (interests vested at the same time), (ii) title (interests acquired by the same instrument), (iii) interest (interests of the same type and duration), and (iv) possession (interests give identical rights to enjoyment). If these four unities are not present, a joint tenancy cannot be created at common law. Instead, a tenancy in common results.

Adverse Possession

1) Actual and exclusive 2) Open and notorious 3) Adverse (hostile/under claim of right) 4) Continuous throughout the statutory period In most (but not all) states, payment of property taxes is NOT required to establish title by adverse possession but is good evidence of a claim of right.

Three types of notice

1) Actual: what the purchaser actually knows 2) Record: notice the law imputes to the purchaser if a prior deed was properly recorded in the grantee's chain of title 3) Inquiry: notice of what the purchaser would have discovered by inquiring into the property (e.g. visiting it to determine who is occupying the land)

To be valid, a deed must:

1) be in writing 2) sufficiently describe the land 3) identify the grantor and grantee 4) evidence an intention to convey the land 5) be signed by the grantor

Tenancy In Common

A concurrent estate with no right of survivorship.

Which of the following parties cannot be protected as a bona fide purchaser of land?

A devisee of the land cannot be protected as a bona fide purchaser ("BFP") of land. Notice and race-notice recording acts protect BFPs from prior unrecorded conveyances of the same property. A BFP is a purchaser who takes land without notice of a prior instrument and pays valuable consideration. Donees, heirs, and devisees are not BFPs because they do not give value for their interests; i.e., they are not purchasers. A mortgagee of the land can be protected as a BFP of land. Mortgagees for value (but not those who receive a mortgage only as security for a preexisting debt) are treated as purchasers, either expressly by recording acts or by judicial classification. Thus, mortgagees for value who take without notice can be protected as BFPs. A purchaser from an heir to the land can be protected as a BFP of land. Donees, heirs, and devisees themselves are not purchasers and thus cannot be BFPs. However, one who buys land from such a party will be protected against a prior unrecorded conveyance from the record owner.

May a grantee be bound by a covenant that does not appear in his deed or chain of title?

A grantee may be bound by a covenant that does not appear in his deed or chain of title if there is a common scheme for development and the grantee had notice of the covenant. An equitable servitude is a covenant (i.e., a promise to do or not to do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against successors to the burdened land who have notice of the covenant. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, in the absence of a writing, negative equitable servitudes may be implied if (i) there is a common scheme for development (i.e., a plan existing at the time sales of the subdivision parcels began that all parcels be developed within the terms of the negative covenant), and (ii) the grantee had actual, record, or inquiry notice of the covenant. Except as explained above, a grantee may not be bound by a covenant that does not appear in his deed or chain of title even if the covenant touches and concerns the land. The burden of an equitable servitude will run to successors in interest if: (i) the covenanting parties intended that successors in interest be bound by the covenant; (ii) the successor in interest has notice of the covenant; and (iii) the covenant touches and concerns the land (i.e., it benefits the covenantor and her successor in their use and enjoyment of the burdened land). In the absence of a writing, however, the servitude will not be enforced unless there is a common scheme for development as explained above. A grantee may be bound by a covenant that does not appear in his deed or chain of title even if the deed contains a covenant against encumbrances. This is a covenant contained in a general warranty deed assuring that there are neither visible encumbrances (e.g., easements) nor invisible encumbrances (e.g., mortgages) against the title or interest conveyed. The presence of this covenant does not affect the ability of a successor in interest to the covenantee to enforce an equitable servitude. A grantee also may be bound by a covenant that does not appear in his deed or chain of title even if the deed is a quitclaim deed. This type of deed conveys whatever interest, if any, the grantor has in the property. It does not affect the ability of a successor in interest to the covenantee to enforce an equitable servitude.

When can a mortgagor exercise her statutory right of redemption?

A mortgagor can exercise her statutory right of redemption after the foreclosure sale. About half the states provide a statutory right to redeem for some fixed period after the foreclosure sale has occurred, usually six months or one year. The amount to be paid is the foreclosure sale price, rather than the amount of the original debt. This right extends to mortgagors and, in some states, to junior lienors. A mortgagor cannot exercise her statutory right of redemption before default, before the foreclosure sale or only during the foreclosure sale. In the states that provide it, the statutory right to redeem exists for a fixed period after the foreclosure sale. By contrast, all jurisdictions recognize the mortgagor's right of redemption in equity, which exists until the date of sale and is cut off by foreclosure. A mortgagor may purchase the land at the foreclosure sale, but a statutory right of redemption provides a grace period after foreclosure when the mortgagor may redeem the property.

If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, who owns the property?

A only owns the property. A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant's interest to another is inoperative as to joint tenancy property because when the co-tenant who is the testator dies (which is when the will becomes effective), her rights in the joint tenancy property are extinguished, and the will has no effect on them. Thus, upon B's death the property is freed from her concurrent interest, leaving A the sole owner and C with no interest in the property.

Bona Fide Purchaser

A purchaser who takes for valuable consideraation and without notice of a prior claim at the time of the conveyance.

A father executed a deed to his art gallery "to my daughter for her life, and on my daughter's death to her children; provided, however, that if my daughter stops painting, to my brother." The daughter has two children and is still painting. At the time of the grant, what is the best description of the interest of the daughter's two children?

A vested remainder subject to open and to total divestment. The daughter's two children have a vested remainder subject to open and subject to complete divestment. A remainder is a future interest created in a transferee that is capable of taking in possession on the natural termination of the preceding estate. A remainder is vested if the beneficiaries are ascertainable and their taking in possession is not subject to a condition precedent. A vested remainder created in a class of persons that is certain to take but is subject to diminution by reason of others becoming entitled to take is a vested remainder subject to open. Vested remainders may be subject to total divestment if possession is subject to being defeated by the happening of a condition subsequent. Here, the daughter's two children have a remainder because, on the expiration of the daughter's life estate, they will be entitled to possession of the property. The remainder is not subject to a condition precedent and the beneficiaries are in existence and ascertained, so the remainder is vested, not contingent. The remainder is subject to open because the daughter may have more children. Finally, the remainder is subject to total divestment because the daughter's children's right to possession is subject to being defeated by the daughter's ceasing to paint. (A) is wrong because the remainder is vested, not contingent; i.e., it is not subject to a condition precedent, and the beneficiaries are ascertainable. (C) is not the best answer because it is incomplete. The vested remainder here is also subject to total divestment. (D) is wrong because the children's interest does not divest the daughter's estate, which would indicate an executory interest. Rather, their interest is capable of taking in possession on the natural termination of the daughter's estate, and thus is a remainder.

To buy a house, an investor secured a $10,000 mortgage from a bank. The bank promptly and properly recorded its mortgage. Subsequently, the investor financed certain improvements to the house with a $2,000 mortgage on the land from a finance company. The finance company promptly and properly recorded its mortgage. Before the investor made a payment on either mortgage, the federal government announced that it would begin storing nuclear waste products in the area. The value of property, including the investor's house, plummeted. The investor did not pay either the bank or the finance company, and the bank brought a proper action to foreclose, notifying both the investor and the finance company. A buyer bought the house at the foreclosure sale for $6,000, which was its fair market value. There are no special statutes in the jurisdiction regarding deficiency judgments. What does the investor owe?

Absent any anti-deficiency statutes, the investor remains personally liable to pay for any shortfall arising from the foreclosure sale. Proceeds from the sale are used to satisfy the loan that was foreclosed first. Hence, all of the proceeds ($6,000) went to the bank. Thus, the investor must pay the balance still due the bank ($4,000) and the entire amount of the finance company's mortgage ($2,000), which is terminated by the foreclosure of the senior mortgage. (A) is wrong because foreclosure sales are not allotted proportionally between senior and junior interests. (C) is wrong because foreclosure does not extinguish the underlying debt. (D) is wrong because the finance company's mortgage does not remain on the land after foreclosure of the senior mortgage; hence, the investor is liable for that debt as well.

Contribution for joint tenants and tenants in common

Although a joint tenant or tenant in common may have a right to compel contribution from other co-tenants for the cost of necessary repairs, taxes, and payments due on mortgages, she does not have a right to compel contribution for the cost of improvements.

Equitable Servitude

An equitable servitude is a covenant (i.e., a promise to do or not to do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against assignees of the burdened land who have notice of the covenant. The burden of an equitable servitude will run to successors in interest if: 1. The covenanting parties intended that successors in interest be bound by the covenant; 2. The successor in interest has notice of the covenant (if she has given value); a. actual notice (direct knowledge of the covenants in the prior deeds); b. inquiry notice (the neighborhood appears to conform to common restrictions); c. or record notice (if the prior deeds are in the grantee's chain of title he will, under the recording acts, have constructive notice of their contents). 3. And the covenant touches and concerns the land (i.e., it benefits the covenantor and his successor in their use and enjoyment of the burdened land). Horizontal privity between the original covenanting parties and vertical privity between the covenantor and his successor in interest are not required. Horizontal privity is required to enforce the burden of a real covenant at law, but it is not required to enforce the burden of an equitable servitude. A common scheme for development is not required for the burden of a written equitable servitude to run to a subsequent purchaser. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, reciprocal negative servitudes may be implied absent a writing if there is a common scheme for the development of a subdivision and the grantee had actual, record, or inquiry notice of restrictions that do not appear in his deed. The common scheme exception applies only to negative covenants and equitable servitudes; affirmative covenants must be in writing.

Which of the following would render title to land unmarketable?

An existing violation of a zoning ordinance would render title to land unmarketable. Every land sale contract contains an implied covenant that the seller will provide marketable title at closing. Marketable title is title reasonably free from doubt, which a reasonably prudent buyer would accept. While it need not be perfect title, it must not present the buyer with an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title. The mere existence of a zoning ordinance does not constitute an encumbrance. However, title to land that currently violates a zoning ordinance would be considered unmarketable. A visible easement that benefits the property would not render title to land unmarketable. Most courts hold that a beneficial easement (e.g., a utility easement) that was visible or known to the buyer does not constitute an encumbrance. In contrast, an easement that reduces the value of the property or is unknown to the buyer constitutes an encumbrance that renders title unmarketable.

Shelter Rule

Anyone who takes from a BFP will be treated like a BFP (i.e., will prevail against any interest her transferor would have prevailed against). This rule exists to protect the BFP by preserving his ability to convey property. It applies even when his transferee had actual knowledge of a prior unrecorded interest or did not take for substantial pecuniary value (i.e., was a donee). However, a non-BFP who previously had title cannot acquire BFP status by selling the land to a BFP and then repurchasing it.

A landowner gratuitously conveyed his interest in land to a friend by quitclaim deed. The friend promptly and properly recorded her deed. Six months later, the landowner conveyed his interest in the same land to an investor for $50,000 by warranty deed, which was promptly and properly recorded. As between the friend and the investor, who has the superior right to title to the land?

Because the friend recorded prior to the subsequent conveyance, she has the superior right to title regardless of the type of recording statute. A conveyance that is recorded can never be divested by a subsequent conveyance through operation of the recording statutes. By recording, the grantee gives constructive (or "record") notice to everyone. Hence, proper recording prevents anyone from becoming a subsequent bona fide purchaser ("BFP"). Because the landowner's conveyance to the friend was recorded at the time of the landowner's conveyance to the investor, the investor cannot prevail. The investor will clearly lose under a pure race statute because the friend recorded first. The investor will also lose under notice and race-notice statutes because the conveyance to the friend was recorded at the time of the conveyance to the investor. The investor, therefore, had record notice and cannot claim the protection that these types of statutes provide for subsequent purchasers for value who take without notice. Thus, (A) is correct and (C) is incorrect. The fact that the friend is merely a donee rather than a BFP does not mean that her recording has no effect. It is only the subsequent taker who has to be a BFP rather than a donee to utilize the recording statute. The prior grantee, regardless of her status, protects her interest by recording because it prevents anyone from becoming a subsequent BFP. (B) is incorrect because, as noted above, the friend will prevail under any type of recording act, but not necessarily because she recorded prior to the investor's recording. If the jurisdiction has a notice statute, whether the friend recorded prior to the investor's recording is irrelevant. Rather, it is the fact that the friend recorded prior to the investor's purchase that gives the friend superior title in a notice jurisdiction, because the investor would have record notice of the conveyance and thus would not qualify as a BFP. (D) is incorrect because the quitclaim/warranty deed distinction does not affect who has title to the land; that status merely affects the parties' respective causes of action and ability to recover against the landowner.

A man owned a tract of land in fee simple. Fifteen years ago, he built a barn on five acres that he believed were part of his property. One year later, the man discovered that the five acres on which he had built his barn were not part of his property. The five acres actually belonged to the woman who owned the adjoining property. The year following the discovery that the five acres belonged to the woman next door, the woman died, leaving all of her property to her one-year-old daughter. The man has brought a quiet title action against the now 14-year-old daughter. The statutory period for adverse possession in this jurisdiction is 10 years. The man has not paid any additional property taxes to account for the five acres for any of the past fifteen years. Who will prevail?

Because the man was in continuous possession for the statutory period and has met all of the other requirements of adverse possession, he would be declared the owner of the five acres. To establish title by adverse possession, the possessor must show (i) an actual entry giving exclusive possession that is (ii) open and notorious, (iii) adverse (hostile), and (iv) continuous throughout the statutory period. Here, the man possessed the property by building a barn on it, something that is clearly visible to the public, so the possession was actual and open and notorious. The man did not share the barn with anyone, so the possession was exclusive. The man did not have the true owner's permission to build the barn, so the possession was hostile. And the possession was continuous for more than 10 years. (A) is incorrect because only a minority of states require the adverse possessor to pay property taxes. (B) is incorrect because the disability of the woman's successor in interest will not keep the statute from running. For a disability, such as status as a minor, to stop the clock, the disability must have been in existence on the day the adverse possession began. Here, the daughter was not yet alive when the adverse possession began. Thus, her status as a minor will not stop the running of the statute. (C) is incorrect because the man's state of mind is irrelevant under the majority view. Even if he had possessed the land knowing he was trespassing, he could still claim it by adverse possession.

Which of the following acts will terminate an easement?

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

Joint Tenancy

Each co-tenant owns an undivided share of the property, and the surviving co-tenant has the right to the whole estate (right of survivorship).

To acquire a prescriptive easement on property, the claimant's use does not need to be __________.

Exclusive. Exclusive use is not required in order to acquire a prescriptive easement. Acquiring a prescriptive easement is analogous to acquiring property by adverse possession, except that the use need not be exclusive (i.e., the user may share the use with the owner or other easement claimants). The use must be: 1. Open and notorious; 2. Adverse; and 3. Continuous and uninterrupted for the statutory period.

For purposes of determining title by adverse possession, when is tacking not available?

For purposes of determining title by adverse possession, tacking is not available when one adverse claimant ousts the other or the first claimant abandons and the next claimant goes into possession. Periods of adverse possession between two successive claimants may be tacked together to make up the full statutory period if there is privity of possession between the claimants. Privity is satisfied if the first adverse claimant purports to transfer the land to the next; i.e., the subsequent possessor takes by descent, by devise, or by deed purporting to convey title.

A General Warranty Deed

Gives the grantee six covenants of title: the right to seisin, the right to convey, a covenant against encumbrances, the covenant of quiet enjoyment, the covenant of further assurances, and a general warranty. Under the covenants of quiet enjoyment, warranty, and further assurances, the man promised that (i) the woman would not be disturbed in her possession of the tract; (ii) he would defend the woman's title against lawful claims; and (iii) he would perform whatever acts are necessary to perfect the woman's title.

Which of the following does not charge a purchaser of realty with inquiry notice?

His grantor's use of a quitclaim deed does not charge a purchaser of realty with inquiry notice. Inquiry notice means that a subsequent grantee is held to have knowledge of any facts that a reasonable inquiry would have revealed, even if he made no inquiry. A quitclaim deed releases whatever interest a grantor might have in the property and contains no covenants for title. Nonetheless, in the majority of states, grantees are not charged with inquiry notice from the mere fact that a quitclaim deed was used. The presence of a third party on the property charges a purchaser of realty with inquiry notice. A title search is not complete without an examination of the property. A purchaser is charged with knowledge of whatever an inspection of the property would have disclosed and with anything that would have been disclosed through an inquiry of the possessor. His deed's reference to an unrecorded instrument charges a purchaser of realty with inquiry notice. If a recorded instrument makes reference to an unrecorded transaction, the grantee is bound to inquire of the nature and character of the unrecorded transaction. The absence of his grantor's deed from the chain of title charges a purchaser of realty with inquiry notice. When a grantor's title documents are unrecorded, the grantee is required, at his peril, to insist on seeing the deed and requiring it to be recorded.

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

If an adverse possessor uses land in violation of a recorded real covenant for the limitations period, she takes title free of the real covenant. The nature of the title obtained through adverse possession depends on the occupier's activities on the land. If an adverse possessor uses the land in violation of a real covenant (i.e., a written promise to do or refrain from doing something on the land), she takes title free of the covenant EVEN IF she had knowledge of it. However, if she complies with the covenant for the statutory period, she takes title subject to the real covenant. In either case, if an adverse possessor uses land for the limitations period, she DOES take title to the land.

O conveys Blackacre to A on Monday. O conveys Blackacre to B on Tuesday. A records on Wednesday. B records on Thursday. If both parties paid valuable consideration for the land, and neither knew of the other's deed, who owns Blackacre?

If both parties paid valuable consideration for the land, and neither knew of the other's deed, B owns Blackacre under a notice statute. A notice statute is a recording act that alters the common law rule of "first in time, first in right" to protect a subsequent bona fide purchaser ("BFP")- i.e., one who pays valuable consideration and lacks notice of the prior conveyance. A notice statute requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance. While a prior grantee can prevent the existence of a subsequent BFP by recording, a BFP will be protected under a notice statute even if she does not record. Here, B prevails over A under a notice statute because B had no notice of the O-A conveyance at the time of her conveyance from O. B would not own Blackacre under a race or race-notice statute (and thus not under every recording act). Under a race statute, the first party to record wins, regardless of whether she has notice of a prior conveyance. Under a race-notice statute, a subsequent BFP prevails over a prior grantee only if she records before the prior grantee. Here, A prevails over B under these acts because B did not record first. Because B prevails over A under a notice statute, A does not own Blackacre under every recording act.

A landowner owned a large parcel of land in a rural area. He built his home on the northern half of the property, and developed a large orchard of fruit trees on the southern portion. A county road ran in front of the northern portion. To service his orchard, the landowner built a driveway directly from the county road across the northern portion of the property to the orchard. To provide electricity to his house, the landowner ran an overhead power line across the orchard property to hook up to the only available electric power pole located on the far southern side of the property. Subsequently, the landowner conveyed the northern parcel to his brother and the southern parcel to his daughter, who said that she did not mind having the power line on the property. Recently, the brother has begun parking his car on the driveway, thus blocking the daughter's access to the southern parcel. Finding no recorded document granting an easement for the power line, the daughter has decided to remove it. If the brother is successful in preventing the daughter from removing the power line, what is the likely reason?

If the brother is successful in preventing the daughter from removing the power lines, it will be because the brother's alternative access to power is much less convenient and would cost 100 times as much as the current arrangement. This helps to prove that there was an easement implied by operation of law ("quasi-easement"). An easement may be implied if, prior to the time the tract is divided, a use exists on the "servient part" that is reasonably necessary for the enjoyment of the "dominant part," and a court determines that the parties intended the use to continue after division of the property. To give rise to an easement, a use must be apparent and continuous at the time the tract is divided. In this case, the landowner used the servient part of his property (the southern parcel) to run an overhead power line to the dominant part of his property (the northern parcel). Overhead wires are clearly visible and would be readily discoverable on reasonable inspection. The lines are, therefore, apparent. The use must also be reasonably necessary. Whether a use is reasonably necessary depends on many factors, including the cost and difficulty of the alternatives. This use was reasonably necessary to the enjoyment of the dominant parcel because electricity is important to the enjoyment of the property, and the cost (100 times as much) and difficulty of the alternatives are excessive. Thus, the fact that the use of the southern parcel is reasonably necessary would bolster the brother's case. (A) is wrong because the daughter's actual knowledge is irrelevant. The daughter need not be aware of the use; it need only be shown that the use was apparent (see above). (C) is similarly wrong. Oral statements made to the grantor after the northern parcel had been conveyed have little effect. They show the daughter's knowledge, but as discussed above, that has little relevance with respect to an implied easement. (D) is wrong because the daughter's motive for removing the power line is also irrelevant. If no easement is established, the daughter may remove the lines for whatever reason she likes. If, however, the requirements for an implied easement are satisfied, the daughter may not remove the lines regardless of how good her reasons are.

Equitable Redemption

In contrast, equitable redemption is the right of a mortgagor to recover the land by paying the amount overdue on the mortgage, plus interest, at any time before the foreclosure sale. If the mortgagor has defaulted and the mortgage or note contained an acceleration clause, then the full balance of the mortgage must be paid in order to redeem in equity.

Inquiry Notice

Inquiry notice means that a subsequent grantee is held to have knowledge of any facts that a reasonable inquiry would have revealed, even if he made no inquiry.

If L leases property to T, and L subsequently assigns L's interest to L2, whom may T hold liable when X, a paramount title holder, ejects T?

L or L2 If L leases property to T, and L subsequently assigns L's interest to L2, T may hold L or L2 liable when X, a paramount title holder, ejects T. A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease. X's evicting T from the entire leased premises breaches the covenant of quiet enjoyment, which runs with the land. Thus, L and L2 are personally liable to T. L only is incorrect because L2, the assignee, is liable for all lease covenants that run with the land, and the covenant of quiet enjoyment runs with the land. L2 only is incorrect because L, the original landlord, also remains liable on all covenants in the original lease after assignment. Neither L nor L2 is incorrect because the original landlord (L) remains liable on all covenants in the original lease after assignment, and the assignee (L2) is liable for all lease covenants that run with the land, including the covenant of quiet enjoyment.

The hostility element of adverse possession requires that the possessor:

Lack the true owner's permission to be on the land. The hostility element of adverse possession requires that the possessor lack the true owner's permission to be on the land. It does not mean anger or animosity. Moreover, the state of mind of the adverse possessor is irrelevant-it does not matter whether the possessor believes he is on his own land, knows he is trespassing on someone else's land, or has no idea who owns the land. To establish title by adverse possession, the possessor must show: (i) An actual entry giving exclusive possession that is (ii) Open and notorious, (iii) Adverse (hostile), and (iv) Continuous throughout the statutory period.

Tenancy by the Entirety

Marital estate akin to a joint tenancy in that four unities (plus a fifth-marriage) are required for its creation, and the surviving spouse has the right of survivorship.

If the buyer of land determines that the seller's title is unmarketable, the buyer:

Must notify the seller and give a reasonable time to cure the defects. If the buyer of land determines that the seller's title is unmarketable, the buyer must notify the seller and give a reasonable time to cure the defects. Every land sale contract contains an implied covenant that the seller will provide marketable title at closing. Marketable title is title reasonably free from doubt, which a reasonably prudent buyer would accept. While it need not be perfect title, it must not present the buyer with an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title. If the buyer of land determines that the seller's title is unmarketable, the buyer may NOT sue for damages for breach as soon as the defect is discovered. As stated above, he must notify the seller and give her reasonable time to cure, even if this requires extending the closing date, and even if time is of the essence. If the seller fails to cure the defects, then the buyer may rescind the contract, sue for damages for breach, get specific performance with abatement of the purchase price, or (in some jurisdictions) require the seller to quiet title. Thus, it is not required that the buyer take title to the land "as is." The buyer may NOT sue on the implied covenant of marketable title after closing. This covenant applies at the contract stage of a land sale transaction, before the closing (i.e., exchange of purchase price and deed). The closing extinguishes the contract, which is said to merge with the deed. Then, absent fraud, the seller is no longer liable on this implied covenant; the buyer must rely on any assurances made in the deed.

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

No, X will not obtain title to the land. If during A's lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, X will not obtain title to the land, but X will acquire A's life estate. If a landowner does not commence an action to eject a would-be adverse possessor before the statute of limitations expires, she is barred from suing for ejectment, and title vests in the possessor. However, the statute of limitations does not run against the holder of a future interest (e.g., remainder, reversion) until her interest becomes possessory. The future interest holder has no right to possession until the prior present estate terminates, and thus no cause of action for ejectment accrues until that time. Here, X will acquire A's life estate by adverse possession (i.e., a life estate pur autre vie, measured by A's life), but not B's remainder, which remains nonpossessory while A is living. Thus, upon A's death, X's interest will terminate. This is true even though X satisfied the elements of adverse possession. To establish title by adverse possession, the occupier must show: (i) An actual entry giving exclusive possession that is (ii) Open and notorious, (iii) Adverse (hostile), and (iv) Continuous throughout the statutory period. Land subject to a future interest CAN be acquired by adverse possession; however, the statute will not begin to run as against the future interest holder until her interest becomes possessory, as explained above. This is true regardless of whether X had color of title (i.e., a document purporting to convey title).

A rancher entered into a contract to sell her land to a developer for $60,000. The contract provided that the rancher agreed to convey a good and marketable title to the developer 60 days from the date of the contract. At the time set for closing, the rancher tendered a deed in the form agreed to in the contract. The developer's examination of the record prior to the date of closing disclosed, however, that the owner of record was not the rancher, but a farmer. Further investigation by the developer revealed that, notwithstanding the state of the record, the rancher had been in what the developer concedes is adverse possession for 15 years. The period of time to acquire title by adverse possession in the jurisdiction is 10 years. The developer refuses to pay the purchase price or to take possession because of the "inability" of the rancher to transfer a marketable title. In an appropriate action by the rancher against the developer for specific performance, will the rancher prevail?

No, because the developer cannot be required to buy a lawsuit even if the probability is great that the developer would prevail against the farmer. The seller of land is obligated to deliver a title that is free from reasonable doubt either in fact or law. This does not require a perfect title, but rather one that is free from questions that might present an unreasonable risk of litigation. Title is marketable if a reasonably prudent buyer would accept it in the exercise of ordinary prudence. An inability to establish a record chain of title will generally render the title unmarketable. If the seller attempts to rely on adverse possession to show that defects have been cleared, courts traditionally do not favor such an argument, because proof of adverse possession normally rests on oral evidence, which might not be available to the buyer at a later time. Here, although the rancher may have acquired title by adverse possession, the developer should not be faced with the prospect of having to prove this in court in the future.

Twenty years ago, an uncle conveyed his real property to his niece and nephew as tenants in common. The niece and nephew were estranged, however, so only the niece moved onto the property. Last year, the nephew sued the niece for an accounting for the years that she had exclusive possession of the property. The statutory period for adverse possession in this jurisdiction is 15 years. Is the accounting likely to be granted?

No, because the nephew had the right to use the property but chose not to do so.

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

Notice statute. Under a notice statute, a later purchaser of land will prevail over an earlier grantee if she takes without actual or constructive (e.g., record) notice of the earlier grant. The above language is not a race-notice statute. An example of a race-notice statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded." Under a race-notice statute, a later purchaser will prevail over an earlier grantee only if she takes without actual or constructive (e.g., record) notice of the earlier grant and records before he does. The above language is not a pure race statute. An example of a pure race statute is: "Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded." Under a race statute, notice is irrelevant. The first party to record, regardless of the date of her conveyance, wins.

Fifty-one years ago, an owner conveyed land to a taker for "so long as the land is used solely for residential purposes; otherwise, the interest in land shall revert to the owner and his heirs." The taker used the land as her personal residence for 20 years, but 31 years ago, she began operating a children's day camp on the land. The owner knew of this operation, but he took no action. Two years ago, the aged taker decided to get out of the camp business. She closed her business and once again began to use the land solely as her personal residence. Also two years ago, the owner died, survived by his son and only heir. Now the son is laying claim to the conveyed land. The jurisdiction in which the land is located has a seven-year adverse possession statute and another statute that bars enforcement of possibilities of reverter 55 years after their creation. May the son validly claim title to the land?

On the happening of the prohibited event (using the land for other than residential purposes), the taker's fee simple determinable automatically came to an end, and the owner was entitled to present possession. Not having claimed possession within the applicable seven-year period, and with the taker's possession being open, notorious, continuous, and adverse, any action by the owner or his heirs is now barred by adverse possession. Thus, (A) and (B) are incorrect. (D) is incorrect because a possibility of reverter becomes possessory automatically upon termination of the prior determinable estate. Unlike a right of entry, a grantor does not have to assert a possibility of reverter in order for a cause of action to arise.

Partial Actual Eviction

Partial actual eviction occurs when the tenant is excluded from only part of the leased premises. Partial eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder of the premises. Partial eviction by a paramount title holder results in an apportionment of rent; i.e., the tenant is liable for the reasonable rental value of the portion that he continues to possess. A paramount title holder's taking possession of an unused barn constitutes partial actual eviction. Thus, rent will be apportioned.

Continuous (AP element)

Possession the average owner would make of the property under the circumstances.

Statutory Redemption

Statutory redemption is the right of a mortgagor to recover the land after the foreclosure sale has occurred, usually by paying the foreclosure sale price. About half the states provide a statutory right to redeem for some fixed period after the foreclosure sale has occurred, usually six months or one year. The amount to be paid is generally the foreclosure sale price, rather than the amount of the original debt. This right extends to mortgagors and, in some states, to junior lienors.

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

Tenancy in Common. A conveyance from O "to O and A" does not satisfy the unities of time and title because O acquired his interest first by another instrument. Thus, the conveyance creates a tenancy in common rather than a joint tenancy.

A landlord entered into a 10-year lease of a building with an auctioneer, who planned to use the building itself for a storage area and the covered porch at the front of the building for auctions. A term in the auctioneer's lease stated, "Lessor agrees to maintain all structures on the property in good repair." Four years into the lease, the landlord sold the property to a buyer. The buyer did not agree to perform any obligations under the lease. As instructed, the auctioneer began paying rent to the buyer. In the fifth year of the lease, the porch roof began to leak. Citing the lease terms, the auctioneer asked the buyer to repair the roof. He continually refused to do so. The auctioneer finally repaired the roof herself at a cost of $2,000. The auctioneer then brought an appropriate lawsuit to recover the money. Absent any other facts, what is the auctioneer likely to recover?

The auctioneer may recover the cost of repair from either the landlord or the buyer. A landlord's promise in a lease to maintain the property does not terminate because the property is sold. Although no longer in privity of estate, the original landlord and tenant remain in privity of contract, and the original landlord remains liable on the covenant unless there is a novation. A novation substitutes a new party for an original party to the contract. It requires the assent of all parties and completely releases the original party. Because neither the auctioneer nor the buyer has agreed to a novation, the landlord remains liable for the covenant because he and the auctioneer remain in privity of contract even after the sale. Thus, the promise to repair can be enforced against the landlord. When leased property is sold, the purchaser may be liable for his predecessor's promises if the promise runs with the land. A covenant in a lease runs with the land if the parties to the lease so intend and the covenant touches and concerns the land. Generally, promises to do a physical act, such as maintain or repair the property, are considered to run with the land. Thus, the buyer is liable because he is in privity of estate with the auctioneer and the covenant to repair runs with the land. Consequently, both the landlord and the buyer are potentially liable to the auctioneer for the repairs. While it is true that the sale/assignment to the buyer did not sever the landlord's obligation to the auctioneer, as explained above, the landlord is not the only person who is liable to the auctioneer.

A landowner in fee simple signed a promissory note for $10,000 to a bank, and secured the note by a mortgage of her land to the bank. The mortgage was duly recorded. The landowner then sold the property to an attorney, who assumed and agreed to pay the mortgage to the bank on the land. The attorney did not make payments on the mortgage note to the bank. The bank, following appropriate statutory procedures, foreclosed the mortgage and gave notice to both the landowner and the attorney that it intended to sue for any deficiency. At the foreclosure sale, the property sold for $6,000. The bank now sues both the landowner and the attorney for $5,000, which is the remaining amount of the unpaid principal and interest on the note plus costs of foreclosure. Against which party will the bank be successful in obtaining a judgment?

The bank will be successful in obtaining a judgment against both the landowner and the attorney, although it may only collect once. When a grantee assumes the mortgage, the grantee expressly promises the grantor-mortgagor that he will pay the mortgage obligation as it becomes due. The mortgagee then becomes a third-party beneficiary of the grantee's promise to pay and can sue the grantee directly if the grantee fails to pay. After the assumption, the grantor-mortgagor becomes a surety who is secondarily liable to the mortgagee on the note if the grantee fails to pay. The landowner and the attorney are jointly liable, even though the attorney is primarily liable and the landowner is secondarily liable as a surety. Therefore, (A) and (B) are incorrect. (C) is incorrect. The bank is not required to choose between the landowner and the attorney and can obtain a judgment against both, although it may only collect once. Because the attorney assumed the mortgage obligation, the bank can sue the attorney, but it can also sue the landowner in the same action as a surety. The landowner and the attorney are jointly liable, even though the attorney is primarily liable and the landowner is secondarily liable as a surety.

An owner obtained a loan of $60,000 from a bank in exchange for a promissory note secured by a mortgage on his land, which the bank promptly and properly recorded. A few months later, the owner obtained another loan of $60,000 from a lender, in exchange for a promissory note secured by a mortgage on the land, which the lender promptly and properly recorded. Subsequently, the owner sold the land to a buyer for $150,000 and conveyed a warranty deed. The buyer expressly agreed with the owner to assume both mortgages, with the consent of the bank and the lender. A few years later, the bank loaned the buyer an additional $50,000 in exchange for an increase in the interest rate and principal amount of its mortgage on the land. At that time, the balance on the original loan from the bank was $50,000. Shortly thereafter, the buyer stopped making payments on both mortgages and disappeared. After proper notice to all appropriate parties, the bank instituted a foreclosure action on its mortgage, and purchased the property at the foreclosure sale. At that time the principal balance on the lender's mortgage loan was $50,000. After fees and expenses, the proceeds from the foreclosure sale totaled $80,000. Assuming that the jurisdiction permits deficiency judgments, which of the following statements is most accurate?

The bank's original mortgage has priority in the proceeds, followed by the lender's mortgage, and only the lender can proceed against the owner because the bank modified its mortgage after the owner had transferred to the buyer. Generally, the priority of a mortgage is determined by the time it was placed on the property, and the proceeds of a foreclosure sale will be used to pay off the mortgages in the order of their priority. However, if the landowner enters into a modification agreement with the senior mortgagee, raising its interest rate or otherwise making the agreement more burdensome, the junior mortgage will be given priority over the modification. Thus, if the first mortgage debt is larger because of the modification, the second mortgage gains priority over the increase in the debt. Here, the bank and the buyer modified the original mortgage by increasing the principal amount and the interest rate. This modification is not given priority over the lender's mortgage, and foreclosure proceeds will not be applied against it because the senior lender's mortgage was not fully satisfied from the proceeds. With regard to the deficiency, the owner is liable to the lender because when a grantee signs an assumption agreement, becoming primarily liable to the lender, the original mortgagor remains secondarily liable on the promissory note as a surety. Here, the buyer assumed the lender's mortgage and became primarily liable; however, the owner remained secondarily liable as surety and can be required to pay off the rest of the lender's mortgage loan. On the other hand, the owner will not be liable to pay off the balance of the bank's loan, because when a mortgagee and an assuming grantee subsequently modify the original obligation, the original mortgagor is completely discharged of liability. The owner had nothing to do with the modification agreed to by the bank and the buyer that increased the amount of the mortgage debt, and will not be even secondarily liable for that amount. (A) and (B) are incorrect because the bank is not entitled to the entire $80,000 in proceeds from the sale and because the owner is not liable to the bank for more than the original loan amount. (D) is incorrect because, as discussed above, the owner is secondarily liable to the lender for the $20,000 deficiency on its mortgage.

A landlord leased office space to a business owner for five years, ending on November 1, reserving a yearly rent of $24,000, payable monthly. On October 1 of the fifth year, the business owner notified the landlord that he was preparing to move, but would greatly appreciate if the landlord could extend the lease for a month or two. On October 10, the landlord wrote to the business owner that she thought they could reach a satisfactory arrangement, but did not hear back from the business owner. The business owner did not vacate the office until November 20. On November 30, the landlord received a check from the business owner in the amount of $1,333 for "November's rent" and a note that he had vacated the premises. If the landlord brings an action against the business owner for additional rent, how will the court rule?

The business owner is bound to a year-to-year tenancy, because he did not vacate the premises until November 20. The court will rule that the business owner is bound to a year-to-year tenancy because he is a hold-over tenant. When a tenant fails to vacate the premises after the termination of his right to possession, the landlord may: (i) treat the hold-over tenant as a trespasser and evict him; or (ii) bind the tenant to a new periodic tenancy. The terms and conditions of the expired tenancy apply to the new tenancy. At least in commercial leases, the new tenancy will be year-to-year if the original lease term was for one year or more. Here, the businessman was a tenant for years because his lease was for a five-year fixed period of time. A tenancy for years ends automatically on its termination date. Therefore, as of November 1, the business owner became a hold-over tenant and the landlord had a right to bind him to a new periodic tenancy. Because the original lease was for more than one year, the business owner may be held to a year-to-year tenancy, at the stipulated rent of $24,000 per year. (B) is incorrect because even though the rent is payable monthly, the majority view is that reservation of an annual rent results in a year-to-year periodic tenancy. Hence, his notice of termination on November 30 would not take effect until the end of the new tenancy. (C) is incorrect because the business owner's mere continuance in possession after November 1 gave the landlord the right to bind him to another year's term. This right was not affected by the fact that the business owner paid 20 days' worth of rent. Moreover, although a tenancy for years may terminate on surrender, surrender requires the landlord's acceptance, which is not evident here. (D) is incorrect because even if the court admits the October 10 letter, it merely indicates the landlord's willingness to consider an extension. Because the business owner did not respond and no agreement was reached by the parties, the letter is not enough to allow the business owner to avoid the additional tenancy.

On February 10, an owner took out a $10,000 mortgage on her land with a bank. On February 15, the owner conveyed the land for $50,000 to a buyer who was not aware of the mortgage. On February 17, the bank recorded its mortgage interest in the land. On February 21, the buyer recorded his deed to the land. Does the buyer hold the land subject to the bank's mortgage?

The buyer takes subject to the bank's mortgage in a race-notice jurisdiction because it was recorded first. All recording acts apply to mortgages as well as deeds. Thus, a subsequent purchaser of the property will take subject to a prior mortgage unless the recording act changes the result. A race-notice recording act would change this result only where a subsequent purchaser did not have notice of the mortgage at the time of purchase and recorded his deed before the mortgage was recorded. Here, the buyer did not have notice of the mortgage but he recorded after the bank; thus, he takes subject to the bank's interest. (C) is wrong because the buyer did not win the race to record, which is one of the two requirements for a subsequent purchaser to prevail in a race-notice jurisdiction. (B) is wrong because the buyer would not take the land subject to the bank's mortgage in a pure notice jurisdiction. Under a notice recording act, a subsequent bona fide purchaser with no actual or constructive notice prevails over a prior grantee or mortgagee who has not recorded at the time of the conveyance to the subsequent purchaser. (D) is not the best answer because it would only be true in a notice jurisdiction. The buyer would take subject to the mortgage in a pure race or race-notice jurisdiction because the mortgage was recorded before the buyer's deed (even though the buyer did not have notice of the mortgage when he bought the land).

A seller conveyed her residential city property to a buyer by a general warranty deed. On taking possession of the property, the buyer discovered that the garage of his neighbor encroached six inches onto his property. If the buyer wishes to compel the seller to assist him in a suit against the neighbor, which of the following covenants may he rely on to do so?

The buyer would rely on the covenants of warranty and further assurances to compel the seller to assist him in a suit against his encroaching neighbor. Under the covenant of warranty, the grantor agrees to defend, on behalf of the grantee, any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title. The covenant for further assurances is a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect. These covenants are "continuous" (run with the land) and require the grantor to assist the grantee in establishing title. The covenants of seisin and encumbrances do not require such assistance. A covenant of seisin is a covenant that the grantor has the estate or interest that she purports to convey. Both title and possession at the time of the grant are necessary to satisfy this covenant. The covenant against encumbrances is a covenant assuring that there are neither visible encumbrances (easements, profits, etc.) nor invisible encumbrances (mortgages, etc.) against the title or interest conveyed. While the seller may have violated these two covenants because of the garage encroachment, they do not provide the basis to compel her to assist the buyer in a title suit. Instead, the buyer merely has a cause of action against the seller for their breach. Therefore, (A), (C), and (D) are wrong.

A homeowner leased his home to a tenant for three years. The following year, the homeowner conveyed the house to a buyer, who never recorded her deed nor did anything with regard to the house. The tenant continued paying rent to the homeowner. Three months after the conveyance to the buyer, the homeowner conveyed the property to his cardiologist, who knew nothing of the prior conveyance to the buyer. The homeowner took the cardiologist's money and skipped town. The cardiologist told the tenant that he now owned the house and that all rents should be paid to him. The tenant complied. Six months later, the cardiologist went to his local bank for a loan. He offered to put up the property as security. The bank discovered that the cardiologist had never recorded his deed and that, just two weeks prior to his loan application, the buyer had recorded a deed to the house that bore an earlier date than the deed the cardiologist had shown the bank. Because of this cloud on the title, the bank refused the loan request. When the tenant discovered this, she quit paying rent to the cardiologist. The state has a recording statute that provides, "a conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded." If the cardiologist sues the tenant to compel the payment of rent, is the cardiologist likely to win?

The cardiologist will likely win. When the cardiologist bought the property from the homeowner, he was a bona fide purchaser who gave value and who had no notice of the earlier sale to the buyer. Not only did the cardiologist not have actual notice of the earlier sale, he did not have constructive notice either because the buyer did not record before the cardiologist bought. The recording statute in the jurisdiction is a notice statute. In a jurisdiction with a notice recording statute, a subsequent purchaser who gives value and takes without notice wins over the earlier grantee. If the facts had shown a jurisdiction with a race-notice recording act, the cardiologist would have been in trouble. With race-notice, the cardiologist would not only have to take without notice, he would have to be the first to record. Because the facts do not show that the cardiologist recorded at all, he would lose. But because this is a notice act jurisdiction, the fact that the buyer finally recorded before the cardiologist is irrelevant. (A) is incorrect. Simply because a tenant pays rent to someone who the tenant thinks owns the property does not create an estoppel requiring the tenant to continue paying rent to that person. The cardiologist will win, but not for this reason. (C) is incorrect because it is not necessary for a grantee to record a deed to give the grantee legal title to the property. Recordation is necessary only to protect against subsequent purchasers from the same grantor. Unrecorded deeds are perfectly valid as long as the recording act does not dictate otherwise. (D) is incorrect. The cardiologist did in fact have good title to the property because, as a bona fide purchaser, he was protected by the notice recording act.

A landowner included in his will a provision giving "all of my property, both real and personal, wherever situated, to my widow for life, and after her death to any of our children who may survive her." What is the gift to the children?

The children have a contingent remainder. A remainder is a future interest created in a transferee that is capable of taking in present possession on the natural termination of the preceding estate created in the same disposition. Note that, as a rule of thumb, remainders always follow life estates. A remainder will be classified as contingent if its taking is subject to a condition precedent, or it is created in favor of unborn or unascertained persons. Here, the interest in the children follows a life estate and is a remainder because it is capable of taking in possession on the natural termination of the preceding estate. It is subject to the condition precedent of surviving the landowner's widow and, additionally, is in favor of unascertained persons (the children who survive the landowner's widow will not be ascertained until her death). Thus, the interest is a contingent remainder. (B) is incorrect because a vested remainder can be created in and held only by ascertained persons in being, and cannot be subject to a condition precedent. As discussed above, the will provision clearly does not satisfy these requirements because the takers are not ascertained and their interest is subject to a condition of survival. (C) is incorrect because a shifting executory interest is one that divests the interest of another transferee; i.e., it cuts short a prior estate created by the same conveyance. The gift to the children does not divest the interest of the widow; she retains a life estate in the property. The children's interest takes in possession only on the natural termination of the widow's estate (i.e., at her death). (D) is incorrect because the interest does not violate the Rule Against Perpetuities. The children's interest will vest, if at all, not later than 21 years after the lives in being. The landowner's widow and the children themselves are lives in being. There is no unborn widow problem because the instrument takes effect on the landowner's death and the gift is to his own widow. She must be in being at his death. Likewise, his children would be in being at his death. Thus, the vesting will be within the period of the Rule.

A developer owned an office building subject to a first mortgage with a creditor in the amount of $1 million. Subsequently, the developer borrowed $100,000 from a bank secured by a second mortgage on the building to help pay the first mortgage and other expenses of the building. The developer's financial condition worsened, and he was unable to make the required payments on the first mortgage to the creditor. The developer approached the creditor and offered to give her a deed to the building in satisfaction of all of his obligations to the creditor. The developer delivered to the creditor a quitclaim deed to the building, which recited as consideration the release of the developer from all liability on the mortgage to the creditor. The deed was duly recorded. Shortly thereafter, the office market greatly improved, and the building was worth $1.5 million. The developer then brought an action against the creditor, claiming that the deed was an equitable mortgage, and the bank served notice on the creditor that it was preparing to foreclose its mortgage on the building. Against which parties will the creditor prevail?

The creditor will be successful against the developer only. The developer initiated an agreement with the creditor to convey the property to the creditor in satisfaction of the developer's obligation to the creditor. The deed was meant to convey absolute title to the creditor, and was not intended to be another form of the mortgage that already existed. Therefore, the developer has no further interest in the property. (B) is incorrect. The creditor will not prevail over the bank. The conveyance from the developer to the creditor discharged the first mortgage on the property because the conveyance was in satisfaction of the mortgage obligation. The first mortgage, however, was never foreclosed and therefore did not wipe out the second mortgage. When the first mortgage was discharged by the conveyance, the second mortgage became a first mortgage and is still a valid encumbrance on the property. (C) and (D) are incorrect because the creditor will prevail against the developer but not against the bank.

To satisfy a debt owed to a creditor, a son executed and delivered to the creditor a warranty deed to a large tract of undeveloped land. The creditor promptly recorded the deed. Shortly thereafter, she built a house on the property and has lived there ever since. The son never actually owned the land. It belonged to his father, but the father had promised to leave the property to the son. Later, the father died and his will devised the property to the son. Pressed for money, the son then sold the land to an investor by warranty deed, which the investor promptly recorded. Although the investor paid full value for the property, he purchased it strictly for investment and never visited the site. He therefore did not realize that the creditor was living there, and knew nothing of the son's earlier deed to the creditor. The jurisdiction in which the land is located has the following statute: "A conveyance of an estate in land (other than a lease for less than one year) shall not be valid against any subsequent purchaser for value without notice thereof unless the conveyance is recorded." Which of the following is the most likely outcome of a quiet title action brought by the creditor against the investor?

The creditor will prevail in a suit to quiet title because the investor had notice of the creditor's interest in the property and, thus, is not a bona fide purchaser for value. When a grantor purports to convey property that he does not own, his subsequent acquisition of title to that property vests in the grantee under the doctrine of estoppel by deed. Most courts, however, hold that this is personal estoppel, which means that title inures to the grantee's benefit only as against the grantor, not a subsequent bona fide purchaser. If the grantor transfers his after-acquired title to an innocent purchaser for value, the bona fide purchaser gets good title. There is a split of authority as to whether the original grantee's recordation of the deed imparts sufficient notice to prevent a subsequent purchaser from being a bona fide purchaser, but the majority view is that it does not because it is not in his chain of title. Thus, it is not the fact that the creditor recorded that prevents the investor from being a bona fide purchaser. The fact that the creditor built a home and was living on the property gave the investor constructive notice of her interest. A title search is not complete without an examination of possession. If the possession is unexplained by the record, the subsequent purchaser is charged with knowledge of whatever an inspection of the property would have disclosed and anything that would have been disclosed by inquiring of the possessor. Therefore, the investor is charged with knowledge of the creditor's possession and with what the creditor would have told him about her possession; i.e., that the property was conveyed to her by the son prior to his conveyance to the investor. Consequently, the investor does not qualify as a bona fide purchaser, and (C) is an incorrect choice. (A) is incorrect because, although the son is estopped to deny that he acquired title for the benefit of the creditor, he could have conveyed valid title to a subsequent purchaser for value who had no notice of the creditor's interest. Therefore, it is not exactly correct to say that the son had no title to convey. (D) is incorrect because the investor will not prevail. It is true that under the recording acts the creditor's deed was not in the chain of title, but the investor still does not qualify as a bona fide purchaser. The investor is on inquiry notice arising from the creditor's possession of the property.

A seller owned a large parcel of land. The western half was undeveloped, and the eastern half contained a grove of apple trees. The seller gave a buyer a deed conveying "the western half of the parcel from the western boundary to the grove of apple trees, comprising 220 acres." It was subsequently determined by survey that the land conveyed to the buyer was in fact 229 acres. In a dispute between the seller and the buyer as to the mistake, which of the following is most accurate?

The deed is valid and the buyer owns 229 acres. When there is a mistake or inconsistency in the description of property in the deed, one of the rules of construction is that the physical description takes precedence over the quantity description unless there are grounds for reformation of the deed. Reformation is an equitable action in which the court rewrites the deed to make it conform to the intention of the parties. It is granted when the deed does not express the agreement of the parties due to mutual mistake or a scrivener's error, and may also be granted when there is a unilateral mistake if misrepresentation is involved. Here, the facts indicate that the seller and the buyer were bargaining for a specific physical location ("the western half of the parcel from the western boundary to the grove of apple trees") and not for a specific number of acres. Thus, there appear to be no grounds for reformation. A conflict in description does not invalidate a deed, so (A) and (B) are incorrect. While parol evidence may be admissible to ascertain the parties' intent, the absence of parol evidence will not invalidate the deed as long as rules of construction may be applied to resolve any inconsistency. (C) is incorrect because, as discussed above, physical descriptions prevail over quantity.

A landowner conveyed her parcel of land to "my brother and my sister jointly, with right of survivorship." Shortly thereafter, the brother was in an automobile accident. The driver of the other vehicle sued the brother on a theory of negligence, and obtained a judgment in the amount of $250,000. Because the brother did not have insurance or enough cash to satisfy the judgment, the driver levied on the brother's interest in the land. What interest will the driver most likely take?

The driver will get an undivided one-half interest in the land regardless of the status of the brother and the sister's title. A joint tenancy is a concurrent estate with a right of survivorship, while a tenancy in common does not have a right of survivorship. At common law, the conveyance here would qualify as a joint tenancy because the unities of time, title, interest, and possession are present in the conveyance. Although under modern law a joint tenancy must be created with specific language or else it will be presumed to be a tenancy in common, the conveyance here still would probably qualify as a joint tenancy, even though it did not use the words "joint tenancy," because it contained the "right of survivorship" language. However, regardless of whether the estate is characterized as a joint tenancy or a tenancy in common, one tenant's interest may be transferred without the consent of the other tenant, and a creditor may levy on the interest. In most jurisdictions, a lien against one joint tenant's interest does not sever the joint tenancy until the lien holder proceeds to enforce it by foreclosure. At that point, the purchaser at the foreclosure sale will hold the property as a tenant in common with the other tenant, but will still have an undivided one-half interest in the property unless and until he brings an action to partition the estate.

A vintner divided his vineyard into two parcels, drawing the boundaries so that the single well that had irrigated the entire vineyard fell on the border of the two properties. The vintner then conveyed the eastern parcel to his friend by a deed that contained the following covenant: "If the well located on the boundary of the eastern and western parcels continues to be used for irrigation purposes and becomes in need of repair or replacement, the grantee, his heirs, and assigns and the grantor, his heirs, and assigns each promise to pay one-half of the cost of such repair or replacement. This covenant shall run with the land." The deed from the vintner to the friend was not recorded, and the vintner did not record a copy of the deed with the records for the western parcel. The friend later sold the eastern parcel to a farmer. The farmer's deed did not contain the covenant about the well. After 15 years of use by the owners of both the eastern and western parcels, the well began to fail. The farmer took it upon himself to have the well repaired at a cost of $30,000. About two weeks later, the farmer discovered the deed from the vintner to the friend in some old files. By this time, the western parcel had passed to the vintner's son by inheritance and again to the son's daughter by inheritance from the now-deceased son. The daughter knew nothing of the covenant concerning the well. The farmer presented the daughter with the bill for the well repair with a copy of the vintner/friend deed and a note that said he expected to be reimbursed for $15,000. The daughter refuses to pay, and the farmer sues. The jurisdiction has a 10-year statute of limitations for acquiring property by adverse possession, and the following recording statute: "Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded." For whom is the court most likely to rule?

The farmer, because the covenant runs with the land. The farmer will most likely prevail in his suit for one-half the cost of the well repairs because the covenant runs with the land. When a covenant runs with the land, subsequent owners of the land may enforce or be burdened by the covenant. If all of the requirements for the burden to run are met, the successor in interest to the burdened estate will be bound by the arrangement as effectively as if he had himself expressly agreed to be bound. To be bound: (i) the parties must have intended that the covenant run with the land; (ii) the original parties must have been in horizontal privity; (iii) the succeeding party must be in vertical privity with the original promisor; (iv) the covenant must touch and concern the land; and (v) generally, the burdened party must have actual or constructive notice of the covenant. Here, the intent is shown by the express language of the covenant, which says that it is intended to run with the land. Even without that language, the use of the words "heirs" and "assigns" would show the intent for the covenant to run. The original parties were in horizontal privity because at the time the vintner entered into the covenant, he and the friend shared an interest in the land independent of the covenant—as grantor and grantee. The daughter is in vertical privity with the vintner because she holds the entire interest in the western parcel held by the vintner. The covenant touches and concerns the land because promises to pay money to be used in a way connected with the land are held to touch and concern the property. Because the daughter was unaware of the covenant, the required notice seems to be missing. While it is generally true that the owner of the burdened land must have notice, it should be remembered that the requirement is a function of the recording statute. (At common law, the covenant was enforceable in an action for damages regardless of notice; this was changed by the recording statutes.) However, because the daughter is a donee (an heir) and not a bona fide purchaser, she is not protected by the recording statute and thus is subject to the covenant even without notice. For that reason, (A) is wrong. (B) is wrong because the farmer's possession does not satisfy several of the requirements for adverse possession. Because the farmer had a legal right to use the well, his use was not adverse or hostile to the rights of the vintner's son and the son's daughter, but was rather permissive. The farmer's possession also fails the exclusivity requirement because the facts state that the well was used to irrigate both parcels for most of the statutory period. (D) is wrong because the farmer's status as a bona fide purchaser has no effect on his ability to enforce the covenant. A successor in interest to the original promisee may enforce the covenant (enjoy the benefit) if there was intent and vertical privity, and the covenant touches and concerns the land. Notice is not required for the benefit to run. Thus, because the above requirements are met here, the farmer may enforce the covenant regardless of his status as a bona fide purchaser. Had the farmer taken the property as a donee, the above analysis would be the same.

Which correctly states the order of priority for allocating mortgage foreclosure sale proceeds, from first to last?

The foreclosing party, any junior lienors in the order of their priority, and then the mortgagor. The order of priority for allocating mortgage foreclosure sale proceeds is as follows, from first to last: 1. Expenses of the sale, including attorneys' fees, and court costs; 2. The principal and accrued interest on the foreclosing party's loan; 3. Any junior lienors in the order of their priority; and then 4. The mortgagor. In many cases, no surplus remains after the principal debt is paid off. Senior lienors receive none of the proceeds. Because a senior lien remains on the property (i.e., may itself be foreclosed in the future), a senior lienor is not entitled to any of the money from the sale, even if there is a surplus.

A fee simple owner of a restaurant provided in his will that the property should go on his death "in fee simple to my friend, but if during my friend's lifetime my son has children and those children are alive when my friend dies, then to said living children." When the owner died, the friend took over the restaurant. If the son has children and one or more of them are alive when the friend dies, who will take title to the restaurant at that time?

The interest given to the son's children does not violate the Rule Against Perpetuities because the interest will vest, if at all, within 21 years after the life of the friend. Pursuant to the Rule Against Perpetuities, no interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at the creation of the interest. In the case of a will, the perpetuities period begins to run on the date of the testator's death, and measuring lives used to show the validity of an interest must be in existence at that time. Here, the interest given to any of the son's children who are born during the friend's lifetime and who survive the friend must vest, if at all, on the death of the friend (who is a life in being at the time of the owner's death). Thus, this interest will vest, if it does vest, within 21 years after the friend's life, and is therefore not in violation of the Rule Against Perpetuities. (A) is therefore incorrect; if one or more of the son's children is alive at the time of the friend's death, the friend's heirs will get nothing because their fee simple will be divested. (B) incorrectly characterizes the interest of the son's children as a possibility of reverter. A possibility of reverter is the future interest left in a grantor who conveys a fee simple determinable estate. Although under different circumstances the son's children could acquire a possibility of reverter as heirs of the grantor (the owner), their interest in this case was conveyed directly to them in the owner's will. (C) is incorrect because the interest of the son's children is not vested. Their interest is a shifting executory interest rather than a remainder because it divests the fee simple estate of the friend and his heirs. The friend has a fee simple subject to an executory interest because the estate will remain with his heirs if none of the son's children are alive when the friend dies. The friend's death while the son's children are alive divests the interest of the friend's heirs; it is therefore a shifting executory interest rather than a remainder.

A landowner owned a large tract of land, which he divided into two parcels. The northern parcel abutted a public highway. The shortest route from the southern parcel to the highway was over a private road that crossed the northern parcel. The other route was over a single-lane dirt and gravel path that wound for over four miles through the woods. The landowner sold the southern parcel to a developer, including an express easement in the private road across the northern parcel. The landowner knew of the developer's plans to open an inn on the property. The developer built the inn but never opened it to the public. Fifteen years later, the developer sold the southern parcel to an investor, who planned to open the inn to the public. The developer had never properly recorded her deed to the land, but the investor promptly recorded her deed, which made no mention of a right to cross the northern parcel via the private road. About a week after the investor took possession of the southern parcel, she learned of the provision in the developer's deed to the land. However, the landowner refuses to grant the investor permission to use the road across his property to reach the highway. Does the investor have a right to cross the northern parcel?

The investor has an easement to cross the northern parcel even if the developer never exercised her right to use the easement. The original easement granted to the developer was an easement appurtenant, the benefit of which passes with a transfer of the benefited land. An easement is deemed appurtenant when the right of special use benefits the easement holder in her physical use or enjoyment of another tract of land. The land subject to the easement is the servient tenement, while the land having the benefit of the easement is the dominant tenement. The benefit of an easement appurtenant passes with transfers of the benefited land, regardless of whether the easement is mentioned in the conveyance. All who possess or subsequently succeed to title to the dominant tenement are entitled to the benefit of the easement. The easement granted to the developer was an easement appurtenant because the right to use the private road across the northern parcel (the servient tenement) benefited the developer in her use and enjoyment of the southern parcel (the dominant tenement) by providing her with the most convenient access to the public highway. Thus, when the developer sold the benefited land to the investor, the benefit of the easement also passed to the investor as an incident of possession of the southern parcel. (A) is incorrect because, as explained above, this benefit passed to the investor despite the fact that the deed to the investor made no mention of the easement. The failure to record does not affect the validity of the easement. Recordation is not essential to the validity of a deed, but only serves to protect the interests of a grantee against subsequent purchasers. Here, the dispute is between the original grantor and the successor of the original easement holder. The purpose of most recording statutes is to provide notice to a burdened party. The person who granted the easement is in no need of notice. The only relevance of recording in this situation is with respect to the servient tenement, the northern parcel. The grant of easement should be recorded on the northern parcel, or bona fide purchasers from the landowner will take free of it. However, no such purchasers are involved in this question. (B) is incorrect because the investor's use of the easement would not be a change in its use. This choice goes to the scope of the easement. The key for determining the scope is the reasonable intent of the original parties, including the reasonable present and future needs of the dominant tenement. Here, because the landowner knew of the developer's plans to open an inn, he knew that she and her guests would use the road across the northern parcel. The investor's use of the easement would be the same-her use and that of her guests. This is not a change in intended use sufficient to allow the landowner to legally prevent the investor's use of the easement. (C) is incorrect because nonuse does not extinguish an easement. Abandonment, which does terminate an easement, requires a physical act by the easement holder that manifests an intent to permanently abandon the easement (e.g., erecting a building that blocks access to an easement of way). Because there is no indication of such an act by the developer, the easement continues to benefit the southern parcel even if the developer never used it.

A retiree purchased a rustic cabin on a small plot of land near the center of a landowner's large parcel of land. The deed to the land, which the landowner delivered to the retiree for fair consideration, did not specifically grant an easement over the landowner's property to reach the public highway bordering her land. There were two means of access to the cabin from the public roads: a driveway from the county road on the south, and a private road from the highway on the east. The landowner told the retiree that he could use the private road from the highway. Twice during his first two years at the cabin, the retiree took the driveway from the county road instead; at all other times he used the private road. At the end of his second year at the cabin, the retiree began reading tarot cards to supplement his retirement income. He had a steady stream of clients coming to his home at all hours of the day and night. Most of the clients came in on the driveway from the county road, which ran close to the landowner's home. The landowner objected, and told the retiree that neither he nor his clients had any right to use that driveway and that they must use the private road from the highway. The retiree refused, and he and his clients continued to use the driveway from the county road for three years. Finally, the landowner began blocking off the driveway from the county road. The retiree brought suit to enjoin this practice. The prescriptive period in this jurisdiction is five years. Who will most likely prevail?

The landowner will prevail in a suit because she, as the holder of the servient estate, has the right to choose the location of an easement by necessity. An easement by necessity arises when the owner of a tract of land sells a part of the tract and by this division deprives one lot of access to a public road or utility line. The owner of the servient parcel has the right to locate the easement, provided the location is reasonably convenient. The landowner has chosen the private road from the highway; thus, the retiree has no right to use the driveway from the county road. Both (A) and (C) are incorrect because the retiree has no easement by necessity in the driveway. As stated above, the owner of the servient parcel (the landowner) has located the easement in the private road; thus, no easement in the driveway exists. When the owner of an easement uses it in a way that exceeds its legal scope (i.e., the easement is surcharged), the servient landowner may enjoin the excess use and possibly collect damages. If the easement by necessity had been located in the driveway, the excess use from the tarot business could have been the basis for the court's ruling in the landowner's favor. However, as stated above, the easement is in the private road from the highway. (D) is incorrect because the retiree's use has not been continuous for the five-year period. To acquire an easement by prescription, the use must be: (i) open and notorious, (ii) adverse, and (iii) continuous and uninterrupted for the statutory period. Continuous adverse use does not mean constant use. Periodic acts that put the owner on notice of the claimed easement fulfill the requirement. In this case, however, two uses in the first two years would not be sufficient to put the landowner on notice that the retiree intended to claim an easement in the driveway. Therefore, the retiree has not acquired a prescriptive easement in the driveway from the county road.

A farmer conveyed a 60-acre parcel of land to a rancher. A private gravel road ran through the center of the parcel. The southern half consisted of arable land, which the farmer, and later the rancher, used for farming. The northern half was undeveloped woodland. The rancher never used the northern half for timbering or for anything else. On very rare occasions, the rancher would take a walk in the woods, but outside of those occasions she never set foot on the northern half. Fifteen years after the farmer conveyed the parcel to the rancher, a landowner appeared, claiming ownership of the northern half of the parcel. Unbeknownst to either the farmer or the rancher, the landowner's name had been forged on the deed purporting to convey the parcel to the farmer, and the landowner was, in fact, the true owner of the property at that time. The state in which the parcel is located has a 10-year statutory adverse possession period. The landowner admits that the rancher now has title to the southern half of the parcel by adverse possession. In an action to quiet title, who will prevail as to the northern half of the parcel?

The landowner will prevail in an action to quiet title to the northern half of the parcel because the rancher did not actually occupy the northern half. An adverse possessor will gain title only to the land she actually occupies. Actual possession is the kind of use the true owner would make of the parcel and is designed to give the owner notice of the trespass and the extent of the adverse possessor's claim. The gravel road divides the parcel into two distinct lots, and the rancher's use of the northern half was not sufficient to put the landowner on notice of her trespass. (B) is wrong for two reasons: (i) The rancher has color of title. Color of title merely means possession of a document purporting to convey title. (ii) Color of title is not usually necessary to gain title by adverse possession. In most jurisdictions, the possessor need not believe she has a right to possession; she can be a trespasser. (C) is wrong because the rancher's possession and use of the southern half was not sufficient to constitute constructive possession of the northern half. Possession of a portion of a unitary tract is sufficient adverse possession of the whole if there is a reasonable proportion between the part actually possessed and the whole, and if the possessor has color of title. The rancher has color of title, but she only occupied one-half of the parcel. Moreover, the parcel consists of two lots separated by a road, so it is unlikely that it constitutes a unitary tract. In any case, the rancher's possession of the southern half was not sufficient to put the landowner on notice of possession of the northern half. (D) is wrong because, regardless of whether the farmer acted in good faith, he did not have any title to convey to the rancher. As noted above, color of title is not usually necessary for adverse possession, which is the only theory under which the rancher could have title to the northern half.

A landowner possessed a 40-acre tract of land. He had inherited 30 acres and had possessed the other 10 acres for longer than the statutory period necessary to acquire title by adverse possession from a rancher. The landowner entered into a land sale contract promising to convey the 40 acres to a developer. The contract provided that the landowner would convey marketable title. The developer paid the landowner the purchase price and accepted a deed from him. The developer promptly recorded the deed. The rancher, having learned of the sale, brought a successful action against the developer to quiet title. The developer realized for the first time that there were no covenants for title in his deed. The developer brings an action against the landowner. What is the most likely outcome of the suit?

The landowner will win because the terms of the deed, not of the contract, control his liability. There is an implied covenant in every land sale contract that at closing the seller will provide the buyer with a title that is "marketable." Marketable title is title reasonably free from doubt, i.e., title that a reasonably prudent buyer would be willing to accept. It need not be a "perfect" title, but the title must be free from questions that might present an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title. Generally, a title acquired by adverse possession is not considered marketable because the purchaser might be later forced to defend in court the facts that gave rise to the adverse possession against the record owner. Here, the marketability requirement did not have to be implied, it was an express term of the contract. Under the doctrine of merger, the contract merges into the deed, and the terms of the contract are meaningless. Even though the contract specified a "good and marketable title," it is the deed that controls, and the deed contained no covenants of title. A deed does not incorporate the title terms of a contract. Thus, (A) is wrong. (B) is wrong; it is not supported by the facts. (D) is wrong because the developer's negligence is irrelevant.

A landowner and her neighbor owned adjoining parcels of land. The landowner's property was situated to the west of the neighbor's property. A highway ran along the east of the neighbor's property. Twelve years ago, the landowner asked the neighbor if it would be all right for the landowner to use an eight-foot strip along the northern part of the neighbor's land to access the highway. The only other way for the landowner to get to the highway was to use a one-lane unpaved road that meandered through the woods for two miles. The neighbor agreed, and the landowner used the strip of land regularly to access the highway. The statutory period for adverse possession in this jurisdiction is 10 years. What is the landowner's interest in the neighbor's eight-foot strip of land?

The landowner's interest in the neighbor's eight-foot strip of land is not an easement. In effect, the landowner only has a "license" (i.e., a revocable privilege) to use the land. The answer is best reached by the process of elimination. Because an easement is an interest in land, the Statute of Frauds applies. Here, the agreement between the landowner and the neighbor was not in writing; thus, the Statute of Frauds requirements for the creation of an express easement were not met. Therefore, (A) is incorrect. (B) is incorrect because an easement by necessity is created when the owner of land sells a part of it and deprives the part sold of access to the public road. Here, the facts do not indicate that the landowner's and the neighbor's parcels were once part of a common tract, and the landowner has an alternate, albeit inconvenient, way to access the highway-the one-lane road. Thus, the landowner does not have an easement by necessity. (C) is incorrect because the landowner's use of the land was permissive. To acquire a prescriptive easement, the use must be open and notorious, adverse, and continuous and uninterrupted for the statutory period. Although the landowner used the strip for the requisite 10-year period, she does not meet the adverse requirement necessary to obtain a prescriptive easement.

A landlord owned a prestigious downtown office building. A law firm leased the entire building from the landlord for a term of 20 years. The lease included a provision that taxes on the building would be paid by "the lessee, his successors, and assigns." The law firm occupied the building and paid the rent and taxes for eight years. At the end of the eight-year period, the law firm assigned the balance of the lease to an accounting firm and vacated the premises. The assignment was written, but there was no provision concerning the accounting firm's assumption of the duties under the lease. The accounting firm occupied the building and paid the rent and taxes for five years. At the end of the five-year period, the accounting firm subleased the building for five years to an investment company and vacated the premises. The sublease was written, but there was no provision concerning the investment company's assumption of the duties under the lease. The investment company now occupies the building and has paid the rent but not the taxes. The landlord has sued all three (i.e., the law firm, the accounting firm, and the investment company) for failure to pay the taxes. The landlord should prevail against whom?

The law firm and the accounting firm are liable. After an assignment, the original tenant is no longer in privity of estate with the landlord. However, a tenant may still be held liable on its original contractual obligations to the landlord on privity of contract grounds. Here, the law firm is liable because it made the original deal with the landlord, which included the obligation to pay taxes on the building. The law firm remains in privity of contract with the landlord throughout the term of the lease unless it is otherwise discharged. In an assignment, the assignee stands in the shoes of the original tenant in a direct relationship with the landlord. Each is liable to the other on all covenants in the lease that run with the land, which would include the obligation of the lessee to pay taxes on the property. Here, the accounting firm is liable because as an assignee it is in privity of estate with the landlord. The accounting firm remains in privity of estate until it assigns to someone else. The sublease to the investment company is not an assignment. A sublessee is not personally liable to the landlord for rent or for the performance of any other covenants made by the original lessee in the main lease (unless the covenants are expressly assumed) because the sublessee does not hold the tenant's full estate in the land (so no privity of estate). Here, the investment company is not liable because, as a nonassuming sublessee, it is not in privity of contract or estate with the landlord. Therefore, (B) is the correct choice, and (A), (C), and (D) are wrong.

A developer prepared and recorded a subdivision plan, calling for 100 home sites on half-acre lots. There were five different approved plans from which a purchaser could choose the design of the home to be built on his lot. Each deed, which referred to the recorded plan, stated that "no residence shall be erected on any lot that has not been approved by the homeowners' association." A lawyer purchased a lot and built a home based on one of the approved designs. However, many of the lots were purchased by investors who wanted to hold the lots for investment purposes. Two years after the lots went on the market, one such investor sold her lot to an architect by a deed that did not contain any reference to the recorded plan nor the obligation regarding approval by the homeowners' association. In fact, because very few residences had been built in the subdivision since the lots were first available for purchase, no homeowners' association meetings had been held in two years. The architect began building a very modernistic house on her one-half acre. When the lawyer noticed the house being built, he brought an action to enjoin the construction. For which party will the court rule?

The lawyer will likely prevail. When a subdivision is created with similar covenants in all deeds, there is a mutual right of endorsement (each lot owner can enforce against every other lot owner) if two things are satisfied: (i) a common scheme for development existed at the time that sales of parcels in the subdivision began; and (ii) there was notice of the existence of the covenant to the party sued. Here, there was a common scheme evidenced by the recorded plan, and the fact that the covenant was in the architect's chain of title gave her constructive notice of the restriction. Therefore, not only does the covenant apply to the architect's land, but the lawyer (or any other lot owner) can enforce it as a reciprocal negative servitude.

Two landowners owned adjacent lots A and B. Both lots were located in State Red, which has a 20-year adverse possession statute. Thirty years ago, the lot A owner married and left State Red to reside in State Blue. The lot A owner did not return to view the property during her period of residence in State Blue. One year after the lot A owner left, the lot B owner built a driveway on his land. The driveway extended three feet over onto lot A. The lot B owner mistakenly believed that this three-foot strip of land was his property. The lot B owner regularly used the driveway and was continuing to use it when the lot A owner, having been widowed, recently returned to State Red. The lot A owner discovered the encroachment on her return. What are the lot A owner's rights against the lot B owner?

The lot A owner has no action against the lot B owner, because the lot B owner's title to the three-foot strip has been established by adverse possession. The lot B owner had exclusive, continuous possession of the three-foot strip for the requisite statutory period. This possession was open and notorious; it was also hostile (adverse). Though the lot B owner was mistaken as to the ownership of the three-foot strip, possession under claim of right is still hostile and adverse possession. The lot B owner has held adversely because his actions appear to the community to be a claim of ownership and he is not holding with permission of the owner. Thus, (D) is incorrect. (C) is incorrect because the open and notorious nature of the lot B owner's possession was sufficient to put the true owner on notice that a possession adverse to her title had been taken. (B) is an incorrect statement of the law; there is no such presumption.

A man and a woman lived together for many years but never got married. Although the state in which they reside does not recognize common law marriage, it has statutes that prohibit discrimination on the basis of marital status. The man and the woman purchased a large property, taking title as joint tenants. Subsequently, the woman accumulated a $20,000 debt. She was too embarrassed to tell the man. She went to a bank and took out a loan to pay the debt and secured the loan with a mortgage on the property. The bank was willing to accept the woman's signature alone, and the man never learned about the mortgage. Two years later, the woman died without having paid off the mortgage. She left no will, and her only heir at law is her sister. The state in which the property is located is a "lien theory" mortgage state. Who has title to the property?

The man takes sole title to the property under his right of survivorship. A joint tenancy carries the right of survivorship. Thus, when one joint tenant dies, the property is freed of her interest and the surviving joint tenant holds the entire property. Therefore, the man owns the property. (B) is wrong because the bank has no interest. Most states, like the one in this question, regard a mortgage as a lien on title. In these states, a mortgage of the property by one joint tenant does not, by itself, sever a joint tenancy until default and foreclosure proceedings have been completed. The bank's rights were lost when the woman died prior to foreclosure. When the woman died, her interest in the property evaporated, and with it the bank's security interest. On the other hand, in a title theory state, a mortgage is considered to be an actual transfer of title to the property, rather than just a lien on the property. Thus, a mortgage by a joint tenant transfers the legal title of the joint tenant to the mortgagee (the money lender). This action destroys the unity of title and thus severs the joint tenancy. (C) is wrong because the sister has no interest in the property. Surviving joint tenants, rather than heirs at law, succeed to a deceased joint tenant's interest. Even if the woman had left a will naming the sister as devisee of the property, the joint tenancy between the man and the woman would not have been terminated. A will is a testamentary conveyance (effective only at death) and hence is inoperative as to joint tenancy property, because at the instant of death the decedent's rights in the property evaporate. (D) is wrong because, as discussed above, only the man has title to the property.

Twenty-five years ago, a man purchased a vacant tract of land from a woman. Unbeknownst to the man, the woman did not own the land. Someone else owned the land in fee simple. Shortly after the purchase, the man built a house on the northwest quarter of the tract, leaving the rest of the tract vacant. Recently, the actual owner of the tract died, still without knowledge that the man had built a house on the northwest corner of the tract. The actual owner's will left all of his property to his son. The relevant statutory period for adverse possession is 20 years. If the man brings suit to quiet title to the tract he had purchased 25 years ago, how should the court decide?

The man would be declared the owner of the tract on the basis of constructive adverse possession. To establish title by adverse possession, the possessor must show (i) an actual entry giving exclusive possession that is (ii) open and notorious, (iii) adverse (hostile), and (iv) continuous throughout the statutory period. Here, the man actually possessed at least a quarter of the property because he built a house on it. The man used the house alone, so his possession was exclusive. A house is plainly visible, so the possession was open and notorious. The man built the house without the true owner's permission, so the possession was hostile. And the possession was continuous for 25 years, longer than the statutory period. Actual possession of a portion of a unitary tract of land is sufficient adverse possession as to give title to the whole of the tract of land after the statutory period, as long as there is a reasonable proportion between the portion actually possessed and the whole of the unitary tract, and the possessor has color of title to the whole tract. Color of title is a document that purports to give title, but for reasons not apparent from its face does not. Usually, the proportion will be held reasonable if possession of the portion was sufficient to put the owner or community on notice of the fact of possession. Here, the man had color of title to the entire tract because he purportedly purchased it from the woman. His house took up a significant portion of the property, such that the owner or community would have been on notice of the man's possession of the tract. Thus, (C) is incorrect. (B) is incorrect because a transfer in ownership does not interrupt the statutory period for adverse possession. (D) is incorrect because only a minority of states require the adverse possessor to pay taxes on the property.

A developer owned a 30-acre tract of farmland. As required by law, the developer filed a plat with the county planning board, but did not record it. The plat divided the parcel into 87 one-third-acre residential lots. A one-acre strip on the eastern edge of the parcel that abutted a busy highway was set aside for commercial development. The plat restricted each lot to a single residence and banned all "nonconforming detracting structures or appurtenances," including "free-standing flagpoles more than six feet in height, television antennas and receiving equipment of excessive size and obtrusiveness, and windmills." The restrictive clause was put into the deeds of all the residential lots in the subdivision, except for the deeds to lots 23, 24, and 25. This oversight was due to an error by the developer's secretary. All the other lots had deeds stating that the restriction applied "to the grantee and his or her heirs and assigns." A homeowner purchased lot 24 and duly recorded her deed in the office of the county recorder of deeds. The developer's salesperson had orally informed the homeowner of the general restrictions applicable to lots in the subdivision. A year later, a sports bar purchased the one-acre commercial strip and installed a large satellite dish. Two years later, the homeowner sold her property to a buyer. The homeowner never mentioned any of the restrictions to the buyer. The buyer put a satellite dish on top of his house. His dish was not as large as the bar's dish, but it was obviously bigger than any of his neighbors' modest antennas. The owners of 15 lots in the subdivision sue the buyer, demanding that he remove the dish. If the court finds for the buyer, what is the likely reason?

The most likely reason to find for the buyer is that the court is not charging him with record notice of deeds to other lots given by the developer. When a developer subdivides land into several parcels and some of the deeds contain negative covenants but some do not, negative covenants or equitable servitudes binding all the parcels in the subdivision may be implied under the doctrine of "reciprocal negative servitudes." Two requirements must be met before reciprocal negative servitudes will be implied: (i) a common scheme for development, and (ii) notice of the covenants. a. actual notice, b. record notice, or c. inquiry notice. Here, the buyer has not been given actual notice, and the antenna restriction is not so obvious that the appearance of the neighborhood would provide the buyer with inquiry notice. Finally, the buyer has no record of the restriction in his chain of title to establish record notice. If the buyer had been the first purchaser of the lot, some courts might require him to read all deeds given by a common grantor, but the better view does not require such a search. In any case, the buyer's grantor here is the homeowner, and the restriction was not contained in her deed; the buyer thus does not have record notice of it and is not bound.

A developer subdivided a 25-acre tract of land into 100 quarter-acre lots. On each lot she built a two-unit townhouse. The deeds to each of the purchasers contained a covenant that "the grantee, his heirs and assigns" would use the property only for single-family use. All deeds were promptly and properly recorded. Subsequently, the zoning laws were amended to allow multifamily use within the subdivision. Six months later, a social worker offered to purchase an original owner's unit that was for sale. The social worker informed the owner that she planned to operate a halfway house out of the unit, an activity in conformity with the applicable zoning regulations. Therefore, the owner did not include the single-family restriction in the deed to the social worker. If a neighbor, who purchased his lot from the developer, seeks to enjoin the operation of the halfway house, will he succeed?

The neighbor will succeed in enjoining the operation of the halfway house because the social worker had notice of the restrictive covenant. A covenant runs with the land to a subsequent purchaser with notice of the covenant if it touches and concerns the land and is intended to run. Notice may be actual or constructive. Here, the social worker was on record notice of the covenant because the original owner's deed was recorded. Restricting land to single-family use touches and concerns the land, and it is evident that the developer and the original owners, including the neighbor, intended it to run with the land by use of the language "grantee, his heirs and assigns." The social worker thus will be bound even though her deed did not refer to the covenant. Thus, (A) is incorrect. (B) is incorrect because compliance with zoning regulations does not excuse noncompliance with an enforceable covenant; both must be complied with. (D) is incorrect because the neighbor can prevail without needing to show a servitude implied from a common scheme, which comes into play when a developer subdivides land into several parcels and some of the deeds contain negative covenants and some do not. Here, the covenant relating to single-family use was in all of the original deeds and, as discussed above, it runs with the land. A covenant that runs with the land may be enforced as an equitable servitude if the assignees of the burdened land have notice of the covenant; the usual remedy is an injunction. Here, the social worker had record notice of the covenant and it runs with the land, so the neighbor can enforce the covenant as an equitable servitude without resort to implying a reciprocal negative servitude.

To secure a loan of $100,000 from a bank, the owner in fee simple of a parcel of land conveyed a deed of trust for the land to the bank. The deed of trust contained a "power of sale" clause, permitted by the jurisdiction, which allowed the bank to sell the property in the event of default without the necessity of a judicial foreclosure action. After several years, the owner defaulted on his loan payments to the bank. The bank informed the owner that it was exercising its power of sale. After appropriate notices, the bank conducted a public sale of the land. The bank was the sole bidder and obtained the property for $80,000, which was $10,000 less than the outstanding balance on the loan plus the expenses of the sale. One month later, the owner notified the bank that he wanted to pay off the loan and extinguish the deed of trust, and was prepared to tender $80,000 to do so. The bank insisted that the owner must tender $90,000 to pay off the loan. If a court in the jurisdiction will require the bank to accept only $80,000 under the circumstances above, what is the likely reason?

The owner was exercising a statutory power rather than an equitable power. If the owner can compel the bank to accept his offer, it will be because he has a statutory power to redeem the property after the foreclosure sale has occurred. In all states, the equity of redemption provides the borrower with an equitable right, at any time prior to the foreclosure sale, to redeem the land or free it of the mortgage or lien by paying off the amount due or, if an acceleration clause applies, the full balance due. Only about half the states, however, give the borrower a statutory right to redeem for some fixed period after the foreclosure sale has occurred; the amount to be paid is generally the foreclosure sale price, rather than the amount of the original debt. Thus, if the owner can redeem the land for $80,000, it will be based on the jurisdiction's statutory power of redemption. (A) is wrong because the deed of trust is a security interest (similar to a mortgage) to which the revocation rules for trusts do not apply. The deed of trust was created in part to allow the lender to foreclose on the property without going through a judicial foreclosure proceeding. (B) is wrong because, in states that permit a nonjudicial sale with deeds of trust containing a power of sale, the lender may bid at the sale, and in many cases the lender is the sole bidder. (D) is wrong because the prohibition against "clogging the equity of redemption" refers to the rule that a borrower's right to redeem his own mortgage cannot be waived in the instrument itself. Here, there is nothing to indicate that the owner's deed of trust prohibited him from redeeming the property prior to foreclosure. However, it is only through a statutory right of redemption that the owner would be able to redeem the property for $80,000 after the foreclosure sale had occurred.

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

The proceeds from a partition sale of property initially held by four joint tenants (A, B, C, and D), after A sold her interest to E, and B died, leaving her property to F and G, would be divided as follows: C and D get 3/8 each; E gets 1/4. The distinguishing feature of a joint tenancy is the right of survivorship. When property is held by three or more joint tenants, one joint tenant's conveyance destroys the joint tenancy only as to that interest. The remaining joint tenants continue to hold in joint tenancy as between themselves, and the grantee holds his interest as a tenant in common with them. When A sold her interest to E, that 1/4 interest was severed and thus converted into a tenancy in common, which E continues to hold. Thus, E gets A's 1/4 share. When one joint tenant dies, the property is freed from her interest, and the survivors retain an undivided right in the property. Since B's interest was extinguished on her death, B's devisees do not take B's interest; the surviving joint tenants hold free of it. This leaves C and D as joint tenants with right of survivorship, together owning a 3/4 interest in the land. A joint tenancy is terminated by a suit for partition. When the partition sale was ordered, this joint tenancy was converted into a tenancy in common, and split equally between C and D. Thus, C and D each will receive 3/8 of the partition proceeds.

Two partners bought a commercial building from an owner. They paid cash for the building and took title as joint tenants with right of survivorship. Several years later, the first partner executed a mortgage on the building to secure a personal loan to a bank. The second partner had no knowledge of the mortgage to the bank. The state in which the commercial building is located recognizes the lien theory of mortgages. The first partner died before paying off his loan. He left all of his property by will to his daughter, his only heir. Who has title to the commercial building?

The second partner has title free and clear of the mortgage. When the partners bought the property, they took title as joint tenants with right of survivorship. If the joint tenancy continued until the first partner's death, then the property would pass immediately on death to the second partner. Because the second partner did not sign the mortgage, she would not be subject to it, regardless of whether she knew about it. The key to answering this question is to know whether execution of the mortgage by the first partner caused a severance of the joint tenancy. If it did cause a severance, then the first partner's one-half would not pass to the second under right of survivorship but instead would pass to the first's estate, and thus would go to the daughter by will. Whether a mortgage creates a severance or not depends on whether the state follows the lien theory or the title theory of mortgages. Lien theory means no severance; title theory means severance. Because this is a lien theory state (majority rule on the MBE), there was no severance; thus, the joint tenancy remained intact. On the first partner's death, the joint tenancy ended and the first partner's interest instantly passed to the second partner. The first partner's estate got nothing; hence, the daughter could get nothing.

A buyer purchased a parcel of land from a seller for $500,000. The buyer financed the purchase by obtaining a loan from the seller for $300,000 in exchange for a mortgage on the land. The seller promptly and properly recorded his mortgage. Shortly thereafter, the buyer gave a mortgage on the land to a creditor to satisfy a preexisting debt of $100,000 owed to the creditor. The creditor also promptly and properly recorded its mortgage. Within a year, the buyer stopped making payments on both mortgages, and the seller brought an action to foreclose on his mortgage. The creditor was not included as a party to the foreclosure action. The seller purchased the property at a public foreclosure sale in satisfaction of the loan. The creditor subsequently discovered the sale and informed the seller that it was not valid. Who has title to the land?

The seller has title to the land, but he must redeem the creditor's mortgage to avoid foreclosure. As a general rule, the priority of a mortgage is determined by the time it was placed on the property. When a mortgage is foreclosed, the purchaser at the sale will take title as it existed when the mortgage was placed on the property. Thus, foreclosure will terminate interests junior to the mortgage being foreclosed but will not affect senior interests. However, if a lien senior to that of a mortgagee is in default, the junior mortgagee has the right to pay it off (i.e., redeem it) to avoid being wiped out by its foreclosure. Thus, those persons with interests subordinate to those of the foreclosing party are necessary parties to the foreclosure action. Failure to include a necessary party results in the preservation of that party's interest despite foreclosure and sale. Hence, the seller's failure to include the creditor as a party to the foreclosure action preserved the creditor's mortgage on the property. To avoid the creditor's foreclosing (because the buyer was in default of the creditor's mortgage as well), the seller will need to pay off the creditor's mortgage. (A) is wrong because it is irrelevant. While a purchase money mortgage ("PMM"), given when the mortgagor buys the property, is considered to have priority over non-PMM mortgages executed at about the same time, even if the other mortgages are recorded first, that rule is not applicable here because the facts indicate that the seller's PMM was executed and recorded before the creditor's mortgage came into existence. (B) is wrong because the creditor was not included as a party to the foreclosure action. Thus, as discussed above, its interest is not extinguished by the seller's foreclosure action. (D) is wrong because the failure to include the creditor in the foreclosure action does not invalidate the action, it just preserves the creditor's junior mortgage on the property.

On April 15, a seller entered into a valid written agreement to sell her home to a buyer for $175,000. The provisions of the agreement provided that closing would be at the buyer's attorney's office on May 15, and that the seller would deliver to the buyer marketable title, free and clear of all encumbrances. On the date of closing, the seller offered to the buyer the deed to the house, but the buyer refused to go ahead with the purchase because his attorney told him that a contractor who had done work on the house had recorded a lis pendens on May 1 against the property regarding a $10,000 contract dispute he had with the seller. The seller indicated that she was unaware of the lien, but that she was willing to go ahead with the sale and set aside funds from the purchase price to cover the contractor's claim until the dispute was resolved. The buyer still refused to proceed, stating that the seller had breached the contract. If the seller brings an action against the buyer for specific performance, what is the probable result?

The seller will likely prevail because she is entitled to clear the encumbrance with the proceeds of the sale. In a contract for the sale of real property, the seller of the land is entitled to use the proceeds of the sale to clear title if she can ensure that the purchaser will be protected. The seller's offer to escrow the funds in this case should act as such guarantee.

A seller owned a two-acre tract of land, on which he built a single-family residence. The seller entered into a contract to sell the land to a buyer for $200,000. One week before closing, the buyer had a survey of the property conducted. It revealed that a portion of the seller's house was 5.98 feet from the sideline. The applicable zoning ordinance requires a six-foot sideline setback. The buyer refused to go ahead with the purchase of the land on the ground that the seller's title was not marketable. If the seller brings suit against the buyer for specific performance, will he prevail?

The seller will not prevail because his title was unmarketable. There is an implied covenant in every land sale contract that at closing the seller will provide the buyer with title that is marketable. It need not be perfect title, but it must be free from questions that might present an unreasonable risk of litigation. Because the placement of the seller's house violated the zoning ordinance, the buyer could be subject to suit. (A) is incorrect because the location of the house violates the ordinance, and the local government has the power to enforce the ordinance strictly. (B) is incorrect for the same reason. It is probably unlikely that the local government would insist on the strict enforcement of the zoning ordinance, but it has the power to do so, which makes title unmarketable, barring specific enforcement of the contract. As a practical matter, if the parties are acting in good faith, this problem would probably be dealt with by the seller applying to the zoning authority, usually a city or county zoning board, for a zoning variance. The board would probably grant a permanent variance, allowing this particular piece of property to violate the six-foot rule by a fraction of an inch. Once that variance is granted, title would be marketable because the property would no longer violate any zoning rules applicable to the property. This solution would take some time, but the parties could push the closing date back in order to make time. So, even though the de minimis nature of the setback violation would probably allow for a solution to the problem, it would not give the seller a right to specific performance. (C) is an incorrect statement of law. Building the house too close to the sideline did not breach a contract; it violated an ordinance.

A buyer entered into a written contract with a seller to purchase his commercial property for $100,000. The contract did not specify the quality of title to be conveyed, and made no mention of easements or reservations. The closing was set for November 25, three months from the signing of the contract. Shortly thereafter, the buyer obtained a survey of the property, which revealed that the city had an easement for the public sidewalk that ran in front of the store. Because this actually enhanced the value of the property, the buyer did not mention it to the seller. Subsequently, the buyer found a better location for her business. On November 1, the buyer notified the seller that she no longer intended to purchase the property. The seller told her that he intended to hold her to her contract. At closing, the buyer refused to tender the purchase price, claiming that the seller's title is unmarketable and citing the sidewalk easement as proof of that fact. In a suit for specific performance, will the seller likely prevail?

The seller will prevail in his suit for specific performance because the easement was visible, the buyer was aware of it at the time she entered into the contract (i.e., she knew a public sidewalk ran in front of the store), and the easement enhanced the value of the property. There is an implied covenant in every land sale contract that, at closing, the seller will provide the buyer with marketable title. Marketable title is title reasonably free from doubt, which generally means free from encumbrances and with good record title. Easements are generally considered encumbrances that render title unmarketable; so if an easement is not provided for in the contract, it usually renders the seller's title unmarketable. There is an exception, however. A majority of courts have held that a beneficial easement that was visible or known to the buyer does not constitute an encumbrance. In this case, the sidewalk was visible, known to the buyer, and beneficial to the property. Thus, the sidewalk easement does not impair the marketability of the seller's title. Therefore, the buyer's excuse for her nonperformance is not valid, and because land is involved, the seller can get specific performance of the contract for purchase of the property.

A mother was in a nursing home and asked her attorney to draft a deed that would give her farm to her son. The attorney drew up the deed, had the mother properly execute it, and thereafter properly recorded the deed. The attorney then told the son what she had done. The son immediately went to the nursing home and told the mother that he did not want the farm so she should take back the deed. A week later, the mother returned home to the farm. Shortly thereafter, the son died without a will, leaving his wife as his only heir. The mother has brought an action against the wife to quiet her title to the farm. If the mother is successful in this action, what is the likely reason?

The son never effectively accepted delivery of the deed. If the mother prevails, it will be because the son never effectively accepted delivery. A deed is not effective to transfer an interest in realty unless it has been delivered, and there must be acceptance by the grantee to complete the conveyance. (D) is the best answer because even though most states presume acceptance, the presumption is rebutted when the grantee expressly refuses to accept the conveyance. (A) is wrong because there is no such thing as a "constructive reconveyance" of land. (B) may look good at first, but it is a minority rule. In most states, acceptance is presumed if the conveyance is beneficial to the grantee, regardless of whether the grantee has knowledge of the conveyance. (C) is wrong because neither the son nor the wife is guilty of any wrongdoing and there is no ground to impose a constructive trust.

A landowner validly conveyed a small office building to the Green Party "as long as they use it for operating quarters until the next presidential election." After the next presidential election, which was in three years, the building would go to a private organization that monitors and prepares comprehensive listings of gas prices throughout the country. A year after the conveyance, the landowner died, validly devising all of her property to her son. Although this jurisdiction is a common law jurisdiction with respect to all real property considerations, the state's probate laws provide that future interests or estates in real property may be passed by will or descent in the same manner as present or possessory interests. Last week, the Green Party and the gas monitoring organization joined together to sell the office building in fee simple absolute to a developer. The son filed suit to prevent the sale of the property to the developer. In this action, who should prevail?

The son, because he did not sign the contract of sale. The son may enjoin the sale because he has an interest in the property. A fee simple determinable is an estate that automatically terminates on the happening of a stated event. The Green Party's interest in the office building is a fee simple determinable because it lasts as long as the Party is using the building for operating quarters. However, the grant does not provide for the contingency of the Green Party ceasing to use the building as operating quarters before the next presidential election. This gap would be filled by a possibility of reverter retained by the landowner. Because the landowner passed that interest to her son in her will, there can be no contract to sell the property without his signature. Note: Although the gas monitoring organization appears to have an indefeasibly vested remainder (i.e., it is created in an ascertained company, is certain to become possessory, and is not subject to being defeated, divested, or diminished in size), its interest is not capable of taking on the natural termination of the preceding estate and so is characterized as a springing executory interest. (A) is wrong because the son also has an interest in the land. (B) is wrong because the interest in the office building will pass to the gas monitoring organization, if at all, within 21 years. (C) is wrong because the Green Party is not prohibited from transferring any interest; it could pass a defeasible fee.

A landlord leased an apartment to a tenant for five years. The lease provided that the landlord will: (i) keep the apartment building at a comfortable temperature 24 hours per day, and (ii) have the carpets cleaned once a year. Two years later, the landlord began turning off the air conditioning at 10 p.m. The tenant's apartment became hot and stuffy, and she demanded that the landlord honor the covenant. The landlord refused. The following month, the pipes burst in the tenant's only bathroom, rendering it unusable. The resultant flooding soiled some of the carpeting, which had not been cleaned in the past 12 months. The tenant reported the problems to the landlord, who did not return the tenant's phone calls. Which of the following are valid reasons for the tenant to terminate the lease?

The tenant will be successful in terminating the lease because the landlord breached the implied warranty of habitability by failing to fix the bathroom pipes. The general rule at common law was that the landlord was not liable to the tenant for damages caused by the landlord's failure to maintain the premises during the period of the leasehold. Today, however, a majority of jurisdictions, usually by statute, provide for an implied warranty of habitability for residential tenancies. In the absence of a local housing code, the standard applied is whether the conditions are reasonably suitable for human residence. If the landlord breaches the implied warranty, the tenant may: (i) terminate the lease, (ii) make repairs and offset their cost against future rent, (iii) abate rent, or (iv) seek damages. Here, a court is likely to consider the lack of a functioning bathroom as making the premises unsuitable for human residence, allowing the tenant to terminate the lease. (A) is therefore incorrect. (C) would be a stronger answer if the tenant had vacated the premises within a reasonable time. The doctrine of constructive eviction provides that where a landlord does an act or fails to perform some service that he has a legal duty to provide, and thereby makes the property uninhabitable, the tenant may terminate the lease and seek damages. However, a tenant cannot claim a constructive eviction unless: (i) the injurious acts were caused by the landlord, (ii) the premises are uninhabitable, and (iii) the tenant vacates the premises within a reasonable time. Here, the landlord's failing to keep the apartment building at a comfortable temperature 24 hours per day meets conditions (i) and perhaps (ii), but the tenant remains in possession. Therefore, the tenant cannot claim constructive eviction and (C) is incorrect. (D) is incorrect for the same reason.

An environmentalist divided her 25-acre property into 100 quarter-acre residential lots. At the time the environmentalist sold her lots, there was a recycling center about one mile from the western boundary of the development. She included in the deed of all 100 grantees the following provision: "Grantee covenants for herself and her heirs and assigns that all aluminum cans, glass bottles, and grass clippings of Grantee and her heirs and assigns shall be recycled. This covenant runs with the land and shall remain in effect as long as there is a recycling center within five statute miles of the development." A buyer purchased a lot in the development. Her deed, which contained the recycling clause, was duly recorded. Two years later, the buyer decided to give the property to her niece as a gift. The niece's deed to the property contained the recycling covenant, and she too recorded her deed. Shortly after the niece took possession of the house, the recycling center moved its location to a new site about four and a half miles from the development. When the niece put the house up for sale, she said nothing to prospective buyers about recycling. The house was purchased by a veteran who had lost the use of his legs. The veteran's deed did not contain the recycling clause, and he hired a local disposal service to carry away his garbage and a landscaper to maintain the yard. The landscaper bagged the grass clippings and they were removed by the disposal service, which put all the trash and clippings in a landfill. When the veteran's neighbors informed him of his duty to recycle, he told them that he knew nothing of the covenant and that it would be difficult for a person in his physical condition to haul cans, bottles, and clippings to the recycling center. Unfazed, the neighbors filed suit to require the veteran to comply with the covenant or pay damages. The veteran's best defense is which of the following?

The veteran's best defense is that the covenant does not clearly "touch and concern" the land. While recycling may benefit the community at large, "touch and concern" involves the relationship between landowners at law. Recycling by the veteran does not directly benefit the other landowners in the use and enjoyment of their land. Thus, (B) is correct. (A) is wrong because even though the veteran's deed does not contain the covenant, he has record notice because the restriction is in his chain of title. (C) is wrong because servitudes implied from a common scheme apply only to negative covenants, and the recycling requirement is an affirmative covenant. Thus, this defense does not go to the point. (D) is wrong because it goes only to issues in equity. The suit includes a claim for damages at law. In any case, balancing of hardships is not generally applied in such cases (although some courts might elect to do so).

A man and a woman purchased a parcel of land, taking title as joint tenants. Two years later, they married and had a son. Several years after that, the man and woman divorced. After the divorce, the woman and her son continued to occupy the land, although title remained in the names of both the man and the woman. The man moved out of the state and conveyed all of his title and interest in the land by deed to the son. Shortly thereafter, the man was killed in an automobile collision. The man died intestate.

The woman and her son have title to the land as tenants in common. The man and the woman took title to the land as joint tenants. An inter vivos conveyance by one joint tenant of his undivided interest severs the joint tenancy, so that the transferee takes the interest as a tenant in common and not as a joint tenant. Here, there was an inter vivos conveyance by the man to the son of all of the man's interest in the property held in joint tenancy with the woman. This conveyance destroyed the joint tenancy, so that the son takes his interest in the property as a tenant in common with the woman, rather than as a joint tenant.

A man had rented a woman's home from her for seven years. When the time came to sign a new lease, the woman decided that because the man had always been a quiet tenant, she would continue to charge him only $350 per month rent instead of the $500 to $550 she could probably get otherwise. The new lease was for a period of five years, and by its terms, the man was specifically prohibited from assigning the lease without the woman's specific written consent. About a year later, the man got married and moved into his new wife's home. Instead of giving up his lease, the man sublet the property to a friend for $500 a month. The man did not get the woman's permission to sublease the property. If the woman brings an action to either eject the friend from the premises or to recover damages from the man for subletting the premises without her consent, what is the most likely result?

The woman will most likely have no cause of action for either ejectment or damages. There are two ways for a tenant to transfer the right to possession under a lease: assignment (transferring the entire period of time remaining under the lease) and sublease (transferring only a portion of the time remaining under the lease). Restraints on alienation are traditionally strictly construed. Thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa. Hence, this prohibition against assignment would not be read to include a prohibition against subleasing. Therefore, the woman would have no cause of action against the man.

A woman purchased a tract of land from a man by warranty deed. Unbeknownst to the woman, the man was not the actual owner of the tract. The woman built a home on the tract and moved into it. Two years later, the actual owner learned of the man's transaction with the woman and prevented the woman from entering the tract from that point forward. This led to a costly court battle. When the woman notified the man and told him that she thought it was his duty to straighten this out, he ignored her. The statute of limitations for actions on deed covenants is fours years. The woman would succeed in a suit for damages against the man for breach of which of the following covenants of title?

The woman would succeed in a suit for damages against the man for breach of the covenants of seisin, right to convey, quiet enjoyment, warranty, and further assurances, but not on the covenant against encumbrances. A general warranty deed gives the grantee six covenants of title: the right to seisin, the right to convey, a covenant against encumbrances, the covenant of quiet enjoyment, the covenant of further assurances, and a general warranty. Under the covenants of quiet enjoyment, warranty, and further assurances, the man promised that (i) the woman would not be disturbed in her possession of the tract; (ii) he would defend the woman's title against lawful claims; and (iii) he would perform whatever acts are necessary to perfect the woman's title. Because the man neither owned the tract of land nor was acting as the actual owner's agent, he breached the covenants of seisin and right to convey at the time of the conveyance to the woman. When the actual owner prevented the woman from re-entering the property, this interfered with the woman's quiet enjoyment, and the man's refusal to "straighten this out" was a breach of the covenant of further assurances. Thus, (C) is the correct answer. Hence, (A) is incorrect because quiet enjoyment was not the only covenant breached. There is nothing in the facts to suggest the property is encumbered; thus, the man did not breach the covenant against encumbrances, and (B) is therefore incorrect. (D) is incorrect because seisin and right to convey were not the only covenants that the man breached.

What acts by one joint tenant will sever a joint tenancy?

Three ways: Suit for partition, inter vivos conveyance by one joint tenant, execution of a mortgage by one joint tenant in a title theory state). Then, the transferee takes the interest as a tenant in common and not as a joint tenant. Thus, if B had successfully conveyed her interest to C by deed, A and C would own the property as tenants in common but not as joint tenants. Alternatively, if A and B had owned the property as tenants in common, B's will would have effectively conveyed her interest to C, so that A and C would own the property as tenants in common. Furthermore, C only would be incorrect in any event because B can convey no greater interest than the one-half interest she owns.

Which of the following transfers creates a sublease from T to T2?

Two years into a four-year tenancy for years, T "assigns my entire interest to T2 for one year" The label given by the parties does not determine whether a transfer is an assignment or a sublease. Rather, a complete transfer of a tenant's entire remaining lease term is an assignment, and a transfer retaining any part thereof is a sublease.

If a landlord's breach of duty renders the premises unsuitable for occupancy, under the doctrine of constructive eviction, the tenant may:

Vacate the premises, terminate the lease, and sue for damages. Under the doctrine of constructive eviction, if the landlord's breach (i.e., doing an act or failing to provide some service that he has a legal duty to provide) makes the premises untenantable, the tenant may terminate the lease and also may seek damages if the following conditions are met: 1. The breach must be by the landlord or by persons acting for him. 2. The breach must substantially and materially deprive the tenant of her use and enjoyment of the premises (e.g., flooding, absence of heat in winter). 3. The tenant must give the landlord notice and a reasonable time to repair. 4. The tenant must vacate the premises within a reasonable time.

Actual and Exclusive possession (AP element)

When it is such as the usual owner would make of the land and is sufficient to put the true owner on notice of the fact of possession.

Adverse/Hostile (AP element)

When it is without the owner's consent. it does NOT matter whether the possessor believes he is on his own land or knows he is trespassing on someone else's land. Any time someone enters possession with an invalid deed, the possession is hostile because they are claiming rights superior to those of the true owner (even if the owner is the one who conveys the invalid deed).

Total Actual Eviction

When the landlord or a paramount title holder excludes the tenant from the entire leased premises.

A landowner and her neighbor owned adjoining tracts of land. No public road abutted the neighbor's land, so the landowner granted the neighbor an express easement over the north 25 feet of the landowner's land. However, the following month the county extended the public road to the neighbor's land, and he ceased using the easement for ingress and egress. Twenty years later, the neighbor conveyed the easement to his friend, who owned the land adjoining the other side of the landowner. The following year, the neighbor conveyed his land to the landowner. None of the parties has used the easement since the public road was extended. The jurisdiction has a 15-year statute of limitations for acquiring property interests by adverse possession. At what point was the easement extinguished?

When the neighbor conveyed his land to the landowner. The easement was extinguished when the neighbor conveyed his land to the landowner. An easement is extinguished when the easement is conveyed to the owner of the servient tenement. For an easement to exist, the ownership of the easement and the servient tenement must be in different persons. (By definition, an easement is the right to use the land of another for a special purpose.) If ownership of the two property interests comes together in one person, the easement is extinguished. Thus, (D) is wrong. (A) is wrong because, although an attempt to convey an easement appurtenant apart from the dominant tenement is ineffective, it does not extinguish the easement. The easement continues despite the attempted conveyance and will pass with the ownership of the dominant tenement. (B) is wrong because mere nonuse does not extinguish an easement. An easement may be extinguished by abandonment, but to constitute abandonment sufficient to extinguish an easement, the easement holder must demonstrate by physical action an intent to permanently abandon the easement. Nonuse of the easement is not enough to show the intent never to make use of the easement again.

In a residential subdivision, will a commercial builder be bound by a residential-use restriction that was omitted from his deed?

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

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

Yes, a junior mortgagee must be named as a party to a senior mortgagee's foreclosure action because it has the right to pay off the senior mortgage to avoid being wiped out by foreclosure. Foreclosure destroys interests ( e.g., liens, mortgages, leases, easements) junior to the mortgage being foreclosed. Thus, if a senior mortgage is in default, a junior mortgagee has the right to pay it off (i.e., redeem it) to avoid being wiped out by its foreclosure. Failure to join the junior mortgagee results in the preservation of its interest despite foreclosure and sale. In contrast, those with interests senior to that of the foreclosing party are not necessary parties because their interests are not affected by foreclosure. The buyer at the sale takes subject to senior interests, which remain on the land. As explained above, NOT all those with liens on the property are necessary parties to a foreclosure action. Only those with interests subordinate to that of the foreclosing party must be named in the foreclosure action. Failure to name a senior interest holder does not affect that party's interest. Because foreclosure extinguishes interests junior to the mortgage being foreclosed, as explained above, junior mortgagees are necessary parties to a senior mortgagee's foreclosure action. Foreclosure DOES affect interests junior to the mortgage being foreclosed. As explained above, junior mortgages are extinguished by foreclosure so long as they are joined in the action.

Is a long period of nonuse sufficient to terminate an easement?

Yes, a long period of nonuse is sufficient to terminate an easement if it is accompanied by other evidence of intent to abandon the easement (e.g., the easement holder erects a permanent structure blocking off the easement). However, a long period of nonuse on its own, even if it continues for the statutory period, is insufficient to constitute abandonment. An easement MAY be terminated by prescription. However, this is not accomplished through the easement holder's nonuse. Rather, one must interfere with the easement through long continued possession and enjoyment of the servient estate in a way that would indicate to the public that no easement right existed. This is analogous to a landowner losing title to land by adverse possession. Generally, the release of an easement interest must satisfy the Statute of Frauds. However, a release is only one way to terminate an easement. A release from the owner of the easement interest to the owner of the servient tenement is effectively a conveyance and must satisfy the formalities required to create an easement. By contrast, an easement may be abandoned if the holder manifests an intent never to use the easement again, evidenced by either physical acts or oral expressions of a desire to abandon accompanied by a long period of nonuse.

A landowner leased 150 acres of farmland to a produce company for 15 years. The produce company used the land for crops along with several other contiguous acres that it owned or leased. About four years into the lease, the state condemned a portion of the leased property because it intended to build a highway. As a result, too little property remained for the produce company to profitably farm, although there still existed the farmhouse on the property, which was being used by one of its foremen. The produce company gave the landowner 30 days' written notice that it considered the lease to have been terminated because of the condemnation. In a suit for breach of contract, is the landowner likely to win?

Yes, because the condemnation did not affect the produce company's obligation to pay the full rental price, although it is entitled to share in the condemnation award. The landowner probably will win in a breach of contract suit. In partial condemnation cases, the landlord-tenant relationship continues, as does the tenant's obligation to pay the entire rent for the remaining period of the lease. The tenant is, however, entitled to share in the condemnation award to the extent that the condemnation affected the tenant's rights under the lease. Therefore, (B) and (C) are incorrect. (A) is not correct because the law of landlord and tenant traditionally refuses to recognize frustration of purpose as grounds for termination of a lease.

A landlord leased a house to a tenant for five years. Under the terms of the lease, the tenant was to pay a fixed monthly rent plus all taxes and reasonable maintenance charges for the upkeep of the house. Three years into the lease, the tenant assigned her lease to a friend by written agreement. Although the tenant properly set forth the terms concerning the rent and maintenance charges, she failed to properly state that the friend was liable to pay the taxes on the residence during the period of the lease. A year later, the landlord received notice that a tax lien would be placed on the residence unless the taxes were immediately paid. The landlord paid the taxes and brought suit against the tenant's friend for the amount. The suit extremely upset the friend, who abandoned the residence. Can the landlord successfully bring a suit against the tenant for this breach of the lease?

Yes, because the tenant's assignment to the friend did not terminate the tenant's obligations. The landlord can sue the tenant for breach because the tenant's assignment to the friend did not terminate the tenant's obligations. An assignee is in privity of estate with the landlord and is liable for all covenants that run with the land, including the covenant to pay rent. The original tenant (assignor) remains in privity of contract with the landlord and is liable for the rent reserved in the lease if the assignee abandons the property. Therefore, the tenant is liable to the landlord for the remaining rent.

Three forms of concurrent ownership in land:

joint tenancy with right of survivorship, tenancy in common, and tenancy by the entirety

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

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

If a tenant transfers her interest in violation of a covenant against assignment or sublease...

the transfer is NOT void. However, the landlord usually may terminate the lease under the lease terms or a statute or sue for damages.

If a landlord consents to one transfer that violates a covenant against assignment or sublease, he...

waives his right to avoid future transfers. The landlord may reserve the right to avoid future transfers, but such reservation must take place at the time of granting consent.

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