Real Estate & Property

Many states limit leases to a maximum term such as __ or __ years.

50 or 99

______________ possession occurs when an owner fails to eject a trespasser for a period of time longer than the statute of limitations in the state in which property is located.

Adverse A claim of adverse possession could arise when a party erects a fence across a portion of a neighboring property without permission, and the owner fails to eject the trespasser before statute of limitations expires.

This type of easements grants owner of the dominant estate the right to do something which would otherwise not be permitted. Example - water company's easement permitting it to install and maintain water line under land of a homeowner.

Affirmative easement

What does ALTA stand for?

American Land Title Association

What do ALTA surveys adhere to for min standard requirements?

American land title association and national society of professional surveyors ALTA surveys are based on info in the title commitments (the survey and commitment should complete each other)

This type of easement benefits a particular parcel of land. Example - owner of East Parcel may grant this easement permitting the owner or tenant of the adjoining West Parcel the right to drive across a private road located on East Parcel.

Appurtenant

What are some types of surveys?

Boundary surveys (depicting property lines and other basic info) Topographical surveys (depicting elevations of property and can be useful for planning construction) As-built surveys (depicting improvements constructed on real property and are often used during or following construction) ALTA (most comprehensive and used in connection with purchase of commercial or high value residential)

_____________ _________ comprise the regulations adopted by city or county that require buildings and improvements to be constructed to certain electrical, plumbing, fire and safety, and other standards.

Building codes

______________ _________ are authorizations granted to owners and/or builders upon submission and review of building plans meeting the requirements of building codes. These allow the building to be constructed or altered in accordance with the approved plans.

Building permits

A ________ of _____________ is the record of all the deeds and other instruments that conveyed an interest in a property from one prior owner to another prior owner and, ultimately, to the current owner.

Chain of title

This type of multiple party ownership (for real and personal property) provides that property acquired during marriage, with certain exceptions, is owned in equal shares by each spouse.

Community property A small number of states have adopted statutes establishing community property form of ownership for married couples rather than adhering to the common law form of tenancy by the entirety.

Plans adopted by local governments that provide guidance for the development and growth of the community.

Comprehensive or Master Plan If both a comprehensive plan and a zoning ordinance are adopted by local government, the zoning ordinance usually must be in accordance with the comprehensive plan.

Inverse _____________________ occurs when a government takes or damages private property without paying compensation. In such situation, owner may sue gov in order to be compensated.

Condemnation Example- gov builds a dam that causes periodic flooding on farmer's field so it can no longer be used for agriculture.

____________________ _____ ________, or approvals with similar names, are authorizations permitting use of the property within a zoning district for a purpose for which certain conditions are required. For example, gas stations may be permitted within a residential district when they meet requirements for traffic flow, fences between station and neighboring homes, and lighting in parking areas.

Conditional Use Permit

________________ eviction occurs when a landlord's action or failure to act substantially interferes with a tenant's right to enjoy the premises or constitutes a breach of the warranty of habitability.

Constructive Ex: intentional failure to provide utilities or repair physical conditions that render property uninhabitable and causes tenant to quit property.

Established when a corporation owns a multi-unit residential building. Each resident purchases shares in the corp and obtains possession of unit through a lease of such unit from the corp. Common areas are governed and maintained by agreement among shareholders.

Cooperatives

This type of easement arises when an owner grants the public the right to use property for roadway or other purposes and often occurs when a real estate developer is subdividing property. An acceptance is the action taken by the applicable governmental agency when it agrees to receive the benefit of this type of easement and to maintain the roadway.

Dedication

The _________ estate benefits from an easement and the _________ estate is burdened by the easement. In the example of a gross easement, the owner of East Parcel holds the servient estate while the electric company holds the dominant estate.

Dominant; servient

________________ ____________ is the power of governments or other authorized entities to take private property for a public use or a public purpose.

Eminent domain Examples: City could take private property to use as a public park or school A city could use its eminent domain to take property within a blighted area and sell it to a private party constructing a privately-owned, mixed-use development which will benefit the public. *fifth amendment prohibits taking of private property without just compensation *property may be real or personal (ships for war, vehicles on temp basis

An ________________ against title is an interest in real property held by a third party. For example, an easement granted to a utility company or a declaration of covenants, conditions, and restrictions would fall under this title review.

Encumbrance

__________________ are additions to the title policy which provide supplemental coverage not contained in the standard policy. For instance, a purchaser who plans to use the property to build a factory may request this title review ensuring that property is zoned for industrial use.

Endorsement

Many basic concepts in property law originated in feudal ___________, with kings granting estates and other rights to reward favored subjects or to inspire allegiance. (Bridgerton)

Europe (hundreds of years ago) Common law regarding real property grew as an attempt to limit or modify these feudal traditions.

An _____________ is any item which the title company will exclude from coverage it provides under the title policy. These could include encroachments, encumbrances, clouds on title, liens mortgages, Uniform Commercial Code financing statement, litigation involving the property, and other instruments or interests affecting the rights of the property owner.

Exception

The most common freehold estate in use today is the _____ ______________ absolute estate. This estate contains all the rights that can possibly relate to land or the bundle of rights.

Fee Simple May be conveyed to a third-party grantee or inherited by heir of owner. No ascertainable termination date- unknown when owner will convey property to another party or die, leaving an inheritance.

The fee ______ estate and the _____ estate could also be created as a defeasible estate.

Fee; life fee tail is essentially same as fee simple absolute but it could only be inherited by grantee's descendants, also known as issue. If grantee died without descendents, estate would rever to grantor. Could be further limited to specific issue, such as grantee and wife or male heirs only (these limitations could be used in feudal times to ensure real property and wealth remained in hands of favored families, ensuring future support of grantor in wars or politics. Not permitted in most jurisdictions and is rarely seen today.

____________________ is a process by which the lien holder forces the sale of real property. The proceeds of the sale are then used to pay principal of, and interest and fees due on, the loan.

Foreclosure

From as far back as feudal times, parties receiving an ownership interest in real property held what is known as a ___________ estate. Such possession is referred to as a seisin. These types of estates are alienable, meaning they can be sold or inherited.

Freehold They have an indefinite duration.

This type of easement benefits a particular party. Example - Owner of East Parcel may grant this type of easement to the electric provider permitting such company to erect electric poles across East Parcel.

Gross Easement (Easement in Gross)

An _________ easement arises when a court determines that an easement is implied by a conveyance although it was not explicitly stated. (Owner of Private Drive Acres sells a portion of their property to a third party but fails to include an easement granting new owner easement to drive on an existing driveway that runs from new parcel over Private Drive Acres to reach public roadway, a court may find such an easement was _____________).

Implied (or easement by implication)

If the borrower defaults on the loan, the lender must engage in a court proceeding to extinguish the borrower's interest in the property and exercise lender's rights under the mortgage. This process is known as _____________ foreclosure.

Judicial Once court authorizes sale of the property, the sheriff or other appointed party conducts the sale, and proceeds are paid on the outstanding balance of secured loan.

Legal descriptions generally fall within two categories. What are they?

Map/plat, or metes and bounds

Title to a particular piece of real property is said to be marketable if the current owner has a valid estate in the property which they may convey to a purchaser with no claim by a third party to ownership of such property. This is known as what?

Marketability of Title

This type of easement prohibits owner of the servient estate from engaging in activities they would otherwise be permitted to do. Example - when owner of East Parcel grants owner of West Parcel an easement providing that no trees will be planted on or improvements erected within a 10-foot strip of land along western boundary line of East Parcel.

Negativ easement

________________ estates are estates of possession but not ownership or seisin. Also known as leasehold estates or, more commonly, leases.

Nonfreehold

__________________ proceedings occur when there is a dispute among co-owners as to whether the property is to be conveyed or held.

Partition in kind occurs when the court divides the property into what it determines to be parcels of equal value and grants each co-owner a parcel. If the court determines it is not possible to divide property equitably, it can order a forced sale of the property and distribute the proceeds of the sale among the co-owners.

A _______________ easement arises through the use of real property of another as an easement without the permission of the servient estate owner throughout the applicable required period of time. The same elements which must be met for a finding of adverse possession must be met for this type of easement. If owner of West Acres openly uses a driveway crossing East Acres without the owner's permission for the prescribed period of time, and otherwise meets the requirements for adverse possession in that state, a court could find that the West Acres is benefited by a _________ easement across East Acres for such purpose.

Prescriptive (or easement by prescription)

A _________ ________ action occurs when there is a dispute as to which party is the owner of a property.

Quiet title In a quiet title action, plaintiff requests court declare they have title to the property and that no other party holds an interest in the property. May happen when there is a cloud on title, meaning there is an error in a deed in the chain of title, or there is a claim of adverse possession.

In either foreclosure sale process, the borrower has the right to pay the full balance of the loan and all collection costs to do what:?

Redeem property and avoid sale Some states allow certain borrowers such as right of redemption for a prescribed period of time after the sale as well.

A ______________ is a simple interest of a third party in a life estate.

Remainer Ex. If grantor conveyed life estate to "my daughter Mary, with the remainder to my son John," John would have a remainder interest in real property during Mary's lifetime. Following Mary's death, John would have a fee simple absolute estate in the property.

_____________________are the conditions set forth in a title commitment which must be met in order for the title company to issue the policy.

Requirements Any requirement not satisfied prior to closing will result in title company refusing to issue policy, or more commonly, the requirement becoming an exception to the policy. For instance, if seller fails to remove a mechanic's lien recorded against property, it will become an exception to the purchaser's and lender's policies.

____________________ is the interest in real property retained by grantor of a life estate.

Reversion If grantor conveyed life estate to aunt Mary, grantor would have reversionary interest in property during Mary's lifetime. Following Mary's death, grantor would hold a fee simple absolute estate in the property.

______________ rights are held by owners of property located adjacent to streams, and _____________ rights are held by owners of property located adjacent to lakes.

Riparian; littoral Rights of both types of owners are the same and may be referred to in general as riparian. In western states, these rights are based on a system of prior appropriation (water rights established by priority of claimed based on purpose of use). In eastern states, these rights were historically governed by natural flow doctrine (downstream owner is entitled to natural flow of water passing by property, with result that upstream owners were prohibited from altering flow). This theory has been replaced by reasonable use doctrine, holding that downstream owners' rights are subject to reasonable use of water by upstream owners.

_________________ are burdens on the ownership of real property which exist for the benefit of a party other than the owner. These are said to run with the land (continue to be enforceable against property after it has been conveyed to another owner).

Servitude it is a limitation on the use of the property by the owner, while also being an interest in such property possessed by another party (easements, licenses and profits).

The elements for adverse possession in most states are:

Statute of limitations Open and notorious (property must be possessed in a open way that would be obvious to an owner of record who pays reasonable attention to the owner's property) Hostile and Under Claim of Right (possession must be without the permission of the record owner, and the possessor must be under the belief that they have a right to possess property) Exclusive (claimant must possess property exclusively just as they would if they were owner of record) Continuous and Uninterrupted (possession must be continuous for the intended use of property for period of time required by statute of limitations) Upon completion of required period of possession and satisfaction of other requirements for adverse possession claim, claimant can file a quiet title action requesting court determine they are the owner of the disputed property or holder of prescriptive easement.

______________ ground water refers to water in a defined underground channel.

Streaming (or percolating) - subsurface/ground water

Additionally, some states permit adverse possession claimants to count any time their predecessor owner possessed claimed property toward the required period of possession. This process is called ____________.

Tacking

What type of ownership helps married couples be viewed as one entity so that a creditor may not be able to foreclose on property owned in this manner?

Tenancy by the entirety No longer permitted in some jurisdictions, including those adhering to the community property form of ownership. As a result, tenancy by entirety does not provide the same type of protection from creditors it used to.

A power of _______________, also known as the right of reentry, arises when an estate is conveyed subject to a condition subsequent.

Termination If Main Street Church conveys an estate "to General Retain, Inc., but if the property is used for the sale of alcohol, grantor may reenter and terminate the estate," Main street Church holds the power of termination and right of reentry. If property is subsequently used for the sale of alcohol, grantor may elect to take ownership and possession.

What does the statute of frauds require for a lease term in excess of one year?

That it be in writing.

What are some common easements?

Those permitting utility companies the right to install lines,k pipes, or other hardware in or under land of owner Those granting one property owner the right to drive across the driveway of a neighbor.

Commonly used for vacation property and may be in the form of a lease or interest ownership in a particular unit for a certain time period.

Time share owners may also hold a remainder interest for the rest of the year shared with other co-owners and concurrent ownership of common areas.

A ___________ ___________ provides a complete history of the property, including all instruments recorded against the property such as deeds, mortgages, releases of mortgages, and easements.

Title abstract

A _________ ______________ is a written assurance of a title company that it will issue a title policy to a proposed insured upon the satisfaction of specified requirements and conditions and subject to specified exceptions.

Title commitment

What is the purpose of a title review?

To determine whether or not the seller has the right to convey marketable title to the purchaser or whether the borrower can provide a lender with a valid lien against the real property.

T/F Real property owners can sell or burden all or a portion of their air rights.

True For example, they may agree to refrain from constructing a building in their airspace that would block sunlight from neighboring property owner, or may sell right to construct a portion of a neighboring building within the airspace over their existing building.

A _____________ is an exception made to permit an owner to use their property in a manner which is not normally permitted in a zoning district. This occurs when the use or area requirements in a zoning ordinance create a hardship for a property owner due to the specific nature of their property. An example would be an oddly shaped lot which make adhering to building set back lines a hardship or physically impossible.

Variance

_______________ deeds are the deed or deeds that previously convey real property to the current owner.

Vesting

What is the most typical method of transferring freehold/nonfreehold estate in real property or other interest such as easement?

Voluntary sale or lease Property can also be transferred to a devisee or beneficiary by will, to an heir pursuant to intestate statutes upon the death of a property owner, to a grantee by gift, or to a government or other organization through a dedication. Instruments for processes include purchase contracts, deeds, easements, plats, and leases.

______________ districts are the areas into which the jurisdiction is divided under the zoning ordinance for purposes of establishing the uses permitted within such areas and the regulations affecting the property within that district.

Zoning

A ____________ ______ is the drawing of the various zoning districts of a city or county adopted by the governing body of that jurisdiction.

Zoning Map

A ____________ __________ or code is the legislation adopted by the local government which adopts the zoning map and establishes the restrictions and requirements for zoning in that jurisdiction.

Zoning ordinance

The _______________ _______________ doctrine permits owners to take any necessary steps to remove water or prevent it from entering their land.

common enemy

Any present freehold estate may be held by more than one owner. Those owners' interests are referred to as _______________.

concurrent (may types)

Under a _____ __ ________, the borrower grants ownership of the real property to a trustee who holds the property on behalf of the lender.

deed of trust As with mortgage, lender is required to release the deed of trust upon full payment of loan. Upon default of loan, trustee may foreclose on property directl, without engaging in litigation required for judicial sale (non-judicial foreclosure or power of sale). Trustee must follow sale provisions on deed of trust and applicable state statutes.

A _______________ estate is a fee simple estate subject to a condition wherein the estate can be terminated upon the occurrence of certain events.

defeasible The fee simple determinable, fee simple subject to condition subsequent, and fee simple subject to executory limitation are methods of creating such a defeasible estate determinable - conveyance is made "as long as" or "until such time as" Ex: grant of conservation deed to gov agency "as long as" property is used for conservation purposes. Will automatically revert back to grantor if violated subject to condition subsequent - reversion to the grantor is subject to such party's election rather than automatic subject to executory limitation - property is transferred to third party rather than reverting to grantor in event of violation

Any instruments recorded during a gap will be added as _____________ to the policy.

exceptions A title company may also require seller to execute a gap indemnification covering the title company for any such recordings.

An ________________ interest is held by the third party named in a deed conveying a fee simple estate subject to an _________________ limitation.

executory Ex: Grant of conservation deed to gov agency "as long as" property is used for conservation, otherwise to National Wildlife Federation, In such case, National Wildlife Federation would have an executory interest.

Most easements are ___________ easements in that they are created by written instruments such as an easement agreement or a right-of-way dedication.

express

A pro _______ policy sets forth all the information and exceptions that will be contained in the final policy upon satisfaction of all requirements and closing on the transaction, with blanks for the recording information for all documents to be recorded in connection with the deal such as the mortgage. These policies contain the form of the title policy and all endorsements issued.

forma

In transactions involving commercial property or high value residential property, the proposed insured often requests a pro ______ title policy following the review of the title commitment. This shows the proposed insured what the final policy will look like, assuming all requirements are satisfied and no new instruments are recorded during the gap.

forma will include the forms of endorsements requested by insured. Common endorsements include zoning endorsements, comprehensive endorsements, and leasehold owner's endorsement issued for tenants wishing to insure leasehold interest in property.

A ____ is the period of time between the date when a title search is last run or updated and the date a title policy is issued.

gap

When buying or selling real property in states where oil, gas and mineral deposits are common (no severed from property above or beneath), it is important to examine what?

how the rights of the owner or lessee of such rights may affect the rights of the owner of the surface.

A __________ ___________________ is a written narrative which identifies real property and is used in documents such as title commitments and policies, deeds, mortgages, and other instruments affecting real property

legal description

A ________ is not an interest in property but is a right to enter into the land of another in a manner which would otherwise be a trespass. Example - owner of Forest Hills may grant a license permitting their neighbor to hike through the woods located on their property. These can be revoked at any time by grantor and terminate with death of holder or by sale of property by grantor. However, these cannot be transferred to another party.

license

What are some examples of limitations imposed on property rights?

local building code enforcement terminating occupancy because property has fallen into disrepair (condemned) zoning regulations disallowing an owner to lease property to multiple families in a single-family residential zoning district Owner's right to mortgage being limited to state statutes governing type of mortgage lien (mortgage form vs. deed of trust form that contain provisions that favor lender more) Zoning regulations may require parcels of real property in a particular zoning district to be larger than a specified size (could result in struggle to sell property if buyer is not permitted to build upon lot) Use of property in residential neighborhoods for commercial purposes may be prohibited by city zoning regulations. In addition, some statutes and local regulations govern the use of property for the sale or consumption of alcohol or tobacco products. In case of fire, earthquake, or other crisis, an owner's right to eject trespassers would not permit them to prevent emergency workers from entering onto their property to perform life-saving work.

Borrower is referred to a _________________, while a lender is referred to as the ___________________.

mortgagor; mortgagee

A court may determine that an easement is necessary in certain circumstances involving the conveyance of real property (in cases where a property owner has no access to public roadway. This is referred to as easement by _______________.

necessity

A __________________ use arises when a property is developed before a zoning ordinance is adopted and the property is used in a manner not permitted in the adopted zoning district. Such use is typically grandfathered and therefore permitted for as long as the building exists and is used consistently.

nonconforming

A title __________ contains the written conclusions of a licensed attorney as to the marketability of title of the subject property based on the information set forth in the title abstract of such property.

opinion

The _________ tenancy has a fixed term, but that term is automatically renewed unless steps are taken to terminate it.

periodic Can be created by implication when parties have made no formal agreement.

A ___________ use is a use for which a property is permitted by right, without conditions. Ex - a single-family home would typically be a ____________ use in a residential district.

permitted

A _______________ commission, or similarly titled authority, is an entity established by local government and charged with enforcing the planning and zoning regulations of that jurisdiction.

planning

A title ______ is a database which contains all the recorded real property records of the county served by the title ______ as well as other related documents such as probate, divorce, and tax records.

plant

The absolute ownership rule with respect to ground water holds that an overlying owner owns the water below the surface of their land absolutely. This rule only applies where water is what?

plentiful

A ________ is an easement permitting the holder to both enter upon the property of the servient estate and remove something from the property, such as timber. Permitting another party to enter upon your land to hunt or fish would also be this type of easement. May benefit certain tract of land, in which case it would run with the land, or a particular person, in which case it could be revoked by grantor or would terminate upon grantee's death.

profit

A life estate granted for the life of another, also known as a life estate ___ _______ ___, is held by the grantee during the lifetime of the other named party.

pur autre vie Ex. A nephew may be granted a life estate during the life of his special needs uncle to ensure uncle has a home and guardian during his lifetime. When uncle dies, estate would revert to grantor and nephew would no longer have rights to property. Trusts are usually used instead of official life estates to accomplish similar results.

A landlord's duty to provide tenant with right to enjoy premises without interference is also referred to as the right of _________ ______________.

quiet enjoyment

The ________________ use rule permits owners to control the flow of surface waters in a manner which does not unreasonably interfere with neighboring properties.

reasonable

A title __________ or letter ________ is a statement issued by a title company as to basic facts concerning real property, such as the name of the current owner, the legal description of the property, and a list of the encumbrances affecting the property.

report A title report is not a commitment to issue a title policy or a full title abstract.

An easement by ______________ occurs when an owner conveys property to another party and reserves or retains an easement for themselves or another (owner may convey portion of property to buyer but reserves right to walk across conveyed property to access adjoining lake.

reservation

Negative covenants are also referred to as what?

restrictions Grantee of property burdened by covenants is held to have agreed to abide by the covenants by its acceptance of the conveyance of the property.

An interest in property is said to ________ when it is transferred back to original grantor (or heirs if deceased).

revert

The possibility of ____________ is the interest retained by the grantor in a fee simple determinable estate. Example of grantor conveying conservation to gov - this would hold the possibility of ____________ in the estate owned by such agency.

reverter

The rights to possess, lease, mortgage, convey, use and enjoy, and exclude others are all contained within the bundles of _________ or metaphorically referred to as bundle of sticks.

rights Although an owner may have any or all of these rights with respect to their real property, this does not mean they have absolute control over such property. Because of this, it can be said that an owner does not own real property as much as they possess certain rights in the real property.

The natural ___________ rule relating to surface waters holds that each owner has the right to have water flow away from the owner's land and onto neighboring lands naturally, as well as the duty to allow the water to flow naturally onto owner's land from neighboring lands.

servitude (relating to surface waters)

What does a title insurance policy insure?

status of title as of the date and time deed or mortgage is recorded. Subsequent title defects are not covered, and coverage is not transferred to subsequent owners or lenders. If title is ever questioned, title company is required to defend the title covered under the policy, and if it is found invalid, the title company must pay value of property up to policy limit.

A tenancy at _____________ is not really a tenancy. Rather, it is the status of a tenant that has held over after the expiration of its tenancy against a landlord which has not yet acted to evict.

sufferance

Surface property owners have the right to ________ from the soil beneath the property and neighboring properties.

support Neighboring real property owners sometimes enter agreements to provide support for each other's property, such as when large buildings are erected in close proximity.

Along with the title work, a __________ is one of the most essential elements of a due diligence review for real property.

suvey

If title defects or encumbrances that should have been disclosed by title company are discovered after title policy is issued, who is liable for any damages to the insured resulting from such items?

title company