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Virginia MBE Real Property

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In the land contract stage, who bears the rish of loss? (between contract and closing)
-Buyer bears the risk unless contract says otherwise.
-This is because equitable conversion dictates that after the buyer signs the contract, B is the owner.
What are the two implied promises in every land contract?
1) Seller promises to provide marketable title (at closing).
2) Seller promises not to make any false statements of material fact.
What is the standard of marketable title?
A title free from reasonable doubt, meaning free from lawsuits AND the threat of litigation.
What are the three circumstances that will make title unmarketable?
1) Adverse possession. If even a portion of the title rests on AP, it is unmarketable. S must provide GOOD RECORD TITLE.
2) Encumbrances. Must be an unencumbered fee simple unless B has waived them.
3) Zoning violations. Title unmarketable if land violates a zoning ordinance.
Must a seller provide title unencumbered by a mortgage or other lien at the land contract stage?
Generally, no. A seller has the right to satisfy the mortgage/lien at closing.
Explain the seller's implied promise not to make any false statements of material fact in the land contract?
Majority rule: S is liable for failing to disclose latent material defects
GENERAL DISCLAIMERS WILL NOT SUFFICE!
Does the land contract contain an implied warranty of fitness and/or habitability?
GR: No. CL norm = caveat emptor.
EX: homebuilders owe the implied warranty of fitness and workmanlike construction.
What is the controlling document at the closing of a land sale?
The deed.
Generally, how does the deed pass legal title from S to B?
It must be lawfully executed and delivered.
What is required for lawful execution of a deed?
Must be in writing, signed by grantor (no consideration necessary), and contain a description of the land.
What standard must the description of the land in a land deed meet?
It must be an unambiguous description that provides a "good lead."

IT NEED NOT BE PERFECT.
How can Seller satisfy the delivery requirement at closing?
By physical delivery, mail, agent, messenger, or by legal delivery.
What is the "legal standard" for delivery of the deed in a land contract?
Did grantor have the present intent to be legally bound. OK if no actual delivery.
How can recipient defeat delivery?
Express rejection only
Can a deed, absolute on its face, be transferred with an oral condition?
No. Oral condition drops out and delivery is deemed accomplished.
Is delivery by escrow permissible?
Yes
What are the three types of deed and how do they rate in preferable terms for the buyer?
1) Quitclaim - the worst
2) General warranty deed - the best
3) Statutory special warranty deed - the middle option
What convenants does the quitclaim deed include?
NONE! G'or is not even promising that he has title to convey. After closing, G'or is free and clear.
Does a quitclaim deed grantor implicitly promise to provide marketable title?
YES. Even he must provide marketable title at closing.
What covenants does the general warranty deed include?
Warrants against all defects in title, past and present. Generally all 6 of the following:
---Present convenants---
1) Covenant of seisin (G'or owns the estate)
2) Convenant of the right to convey (G'or has the power to make the conveyance--no temp restraints on power to convey)
3) Covenant against encumbrances (no servitudes or mortgages on the land)
---Future covenants---
4) Covenant for quiet enjoyment (G'ee will not be disturbed in possession by 3/p's lawful claim of title)
5) Covenant of warranty (G'or promises to defend G'ee if there are any lawful claims later asserted)
6) Covenant for further assurances (G'or promises to do whatever future acts are reas nec to perfect title if it's imperfect)
When does the statute of limitations begin to toll on breaches of the general warranty deed covenants?
1) for the present covenants (seisin, rt to convey, against encumbrances), from the instant of delivery
2) for the future covenants (quiet enjoyment, warranty, further assurances), from the date of that future breach
What covenants does the grantor make when he delivers a statutory special deed?
G'or makes 2 promises ONLY on behalf of himself:
1) G'or promises he hasn't conveyed the estate to anyone else, AND
2) G'or promises it's free from encumbrances made by G'or
On whose behalf does the statutory special deed grantor make convenants?
Only on his own behalf.
In the recording system, what are the two important high-level brightline rules?
1) In a NOTICE jurisdiction, if B is a BFP, B wins regardless of whether he records before S
2) In a RACE-NOTICE jurisdiction, if B is a BFP, B wins if he records properly BEFORE A
Who do recording statutes protect?
Only BFPs and mortgagees (creditors)
To qualify as a BONA FIDE PURCHASER under a recording statute, what must B show?
1) B purchased the land FOR VALUE, AND
2) B did so w/o notice that someone else got there first
What does it mean to have purchased land "for value"?
Only that "substantial pecuniary consideration" was remitted. It need not be FMV!
Can a B still be considered a BFP if he received blackacre without remitting consideration?
GR: no
EX: unless shleter rule applies, which will allow donee to receive the benfits of the donor
What types of notice may a buyer be charged with?
Actual (literal knowledge)
Inquiry (whatever an examination would reveal)
Record (if A's title was properly recorded in the chain of title)
What type of recording statute is the following: "A conveyance of an interestin land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded."
A NOTICE statute, meaning if when B takes blackacre, he is a BFP, he WINS! It doesn't matter that B did not record or that A did so first.
What type of recording statute is the following: "A conveyance of an interestin land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded."
RACE-NOTICE. To prevail B must (1) be a BFP and (2) win the race to record.
In what type of jurisdiction will A win if he records before B takes possession?
BOTH! If A RECORDS PROPERLY prior to B taking possession, B is on record notice, which defeats his status as a BFP.
To what does the "chain of title" refer?
It is the sequence of recorded documents capable of giving record notice to later takers.
-Most states, chain of title is established by searching the grantor-grantee index
What is the "shelter rule"?
It is the rule that states that one who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against.
T'ee takes shelter in T'or's status as a BFP.
What is a "wild deed" and what is its significance?
It is a deed that has a grantor unconnected to the chain of title.
A "wild deed" cannont give record notice of its existence.
What is "estoppel by deed"?
If a person conveys realty in which he has no interest, he is estopped from later denying the validity of that conveyance if he subsquently acquires the interest that he had previously transferred.
In other words, a person who fraudulently makes a transfer and later gets title cannot later deny the transfer's validity.
Generally, wihout its elements, what is a mortgage?
The conveyance of a security interest in land intended by the parties to be collateral for the repayment of a monetary obligation.
A mortage is a union of the two elements. What are they?
1) A debt, AND
2) A voluntary transfer of a security interest in debtor's land to secure that debt
What are the debtor and creditor in a mortgage setting referred to as?
Debtor = mortgagor
Creditor = mortgagee
Does a mortgage need to be in writing?
GR: Yes, to satisfy the SOF.
What else might the legal examiners refer to a legal mortgage as?
-mortgage-deed
-the note
-a security interest in land
-a deed of trust
-a sale lease-back
Example: O owns Blackacre. C'or lends O money. The parties understand that Blackacre is the collateral for the debt. However, instead of executing a note or mortgage deed, O hands C'or the deed to Blackacre that is absolute on its face. What has been cre
A: an equitable morgage
-Parole evidence is freely admissible to show the parties' free intent.
Once a mortgage has been created, what are the parties rights? (mortagee and mortgagor, that is)
Debtor-Mortgagor: title and the right to possession
Creditor-Mortgagee: a lien, the right to look to the realty if there is a default
Are the rights under a mortgage transferrable?
Yes, by all parties.
How are the creditor-mortgagee's interests in a mortgage transferred?
1) Endorsing the note and delivering it to transferee
2) executing a second document of assignement

NOTE: if note is endorsed and delivered, transferee could become a holder in due course, free of all personal defenses
To what defenses are holders in due course subject to?
Real defenses only!
MAD FIFI4
Material Alteration
Duress
Fraud in the factum
Infancy
Incapacity
Illegality
Insolvency
What criteria must be met for a transferee of a note to become a holder in due course?
1) Note must be negotiable and payable to named mortgagee
2) Orginal note must be indorsed by named mortgagee
3) Orginial note must be delivered to t'ee
4) T'ee must take the note in good faith without notice of illegality
5) T'ee must pay value
If a debtor-mortgagor sells his mortgaged property, does Buyer hold subject to the original mortgage?
Yes. Buyers take subject to all properly recorded liens.
If a debtor-mortgagor sells Blackacre to B, who is personally liable on the debt?
-IF B has "assumed the mortgage," both O and B are. B is primarily liable and O is secondarily liable.
-IF B has taken "subject to the mortgage," only O is personally liable but the lien remains and the mortgage can be foreclosed.
What happens if the debtor-mortgagee defaults on his loan and creditor-mortgagee institutes a proper judicial proceeding but the sale is for less than the amount owed on the note?
Mortgagee brings a personal action against debtor for a DEFICIENCY JUDGMENT.
What happens if the debtor-mortgagee defaults on his loan and creditor-mortgagee institutes a proper judicial proceeding and the sale is for more than the amount owed on the note?
Junior liens are paid off in order of priority with the remaining surplus to the debtor.
What is taken off the top in a foreclosure sale?
Attorney's fees, expenses of foreclosure, and and accrued interest on the First note
How are creditors satisfied after the foreclosure expenses are taken out?
In order of priority with each claimant satisfied IN FULL before subordinate lienholders take anything.
Junior lienholders unsatisfied by foreclosure can proceed for a DEFICIENCY JUDGMENT
After foreclosure, what happens to the following interests: senior interests, junior interests?
Senior interests are unaffected by foreclosure--subsequent buyers take subject to their interest.
Interests junior to mortgagee are terminated. (therefore junior lienholders are necessary parties to a foreclosure proceeding and must be joined)
Are buyers at a foreclosure personally liable to debtors whose interests are not extinguished by foreclosure?
No, but if not paid, senior lienholders can foreclose if the debt is not paid.
How are creditors' priorities determined?
GR: first in time, first in right
EX: purchase money mortgagees have "superpriority"
What is "equitable redemption"?
It is the universally recognized right of a debtor-mortgagor to redeem the land prior to foreclosure sale and free it of the mortgage.
When is the right to equitable redemption cut off?
As soon as a valid foreclosure has taken place.
BUT, debtor-mortgagor may still be able to redeem via statutory redemption.
How does a debtor-mortgagor exercise his right to equitable redemption?
By paying off missed payments + interest + costs. If the note/mortgage contains an acceleration clause, d-m'or must pay full balance + accrued interest + costs to redeem.
May a debtor-mortgagor waive the right to redeem in the mortgage itself?
No. That is known as "clogging the equity of redemption" and it's prohibited.
What is statory redemption and where is it recognized?
It gives the d-c'or the right to redeem for some fixed period of time after the foreclosure sale. (usually 6 mos to 1 yr)
Roughly 1/2 of states recognize statutory redemption.
If allowed, what must be paid to statutorily redeem after foreclosure?
The amount paid in a foreclosure sale.
What effect does statutory redemption have on the realty?
It nullifies the foreclosure sale and restores original owner to title.
What level of culpability must an adjacent landowner show to prevail in an action based on lateral support?
GR: excavator only liable if he acted negligently
EX: defendant-excavator strictly liable if plaintiff can show that P's improved land would have collapsed even if its natural state (unimproved). In other words, to be strictly liable, the burden is on P to show that his improvements did not contribute to the collapse.
What are the two major systems for determining allocated of water in water-courses (streams, rivers, lakes)?
1) Riparian doctrine
2) Prior appropriation doctrine
Explain the riparian doctrine and when liability will attach.
-Riparian doctrine says that water belongs to those bordering the water course, the riparians.
-Riparians share the right of reasonable use of water.
-One riparian will be liable only if his use unreasonably interferes with others' use
Explain the prior appropriation doctrine and when liability will attach.
-Water belongs initially to the state
How is the right to divert water acquired by an individual under the prior appropriation doctrine?
-Right to divert water can be acquired by an individual regardless of whether they are a riparian owner
-Rights are determined by priority of beneficial use
Under the prior appropriation doctrine (water rights), how is priority determined?
-Norm for allocation = first in time, first in right
-Owner can acquire rights to divert/use the water by simply being the first to do so
Who can use ground/percolating water?
Surface owner entitled to make reasonable use--cannot be wasteful
Who can use surface waters? (rain, melting snow, springs, etc.)
GR: Landowner can use/divert how he please to combat the flow of surface water, the "common enemy"
EX: Cannot cause unnecessary harm to others' land
What is trespass?
The invasion of land by tangible physical object
How can a landowner rid the land of a trespasser?
Bring an action for ejectment
What is a private nuissance?
Substantial and unreasonable interference with another's use and enjoyment of land
-does not require physical invasion
If odors or noise intrude on a landowner's land, what has been committed?
Private nuissance, which does not require physical invasion.
How does the court deal with a hypersensitive plaintiff or one with specialized use of his land?
Ignores the hypersensitivity and looks at it objectively
What is an implicit or regulatory taking?
-When the gov't passes a regulation that, although not intended to be a taking, has the same effect
What standard must regulations meet to be considered takings?
They muyst work a complete economic wipeout of someone's investment

NOTE: Look for phrases like "ban ALL development"
What is the remedy for a regulatory taking?
1) compensate the owner for the taking, OR
2) terminate the regulation and pay owner damages incurred while the reg was in effect
Define zoning.
Governments may enact statutes that reasonably control land use.
What is a variance?
It allows the receiver to operate lawfully but not in accordance with the zoning regs.
What must an applicant for a variance show?
1) Undue harship, AND
2) the variance won't work a detriment to the surrounding property values
May a once lawful, existing use now deemed nonconforming by a new zoning ordinance be eliminated?
Yes, but not all at once unless just compensation is paid.
What is an exaction?
Amenities that the government seeks in exchange for granting permission to build.
To pass constitutional scrutiny, what must exactions be?
Reasonably related in both nature and scope to the impact of the proposed development.
Types of freehold estates:

What estate is created from the following language?

“To A and his heirs.”

OR

“To A.”
Fee Simple Absolute – the default estate

Future interest: None. Living people have no hairs! (Sinead)

*The words “and his heirs” are no longer necessary
What estate is created from the following language?


“To A and the heirs of his body.”
Fee Tail

Future interest: reversion (if held by grantor); remainder (if held by third party)

**Outmoded. Prohibited in many states as an impermissible restraint on alienation.
What estate is created from the following language?



“To A so long as . . . (until . . . ) (while . . . )”
Fee Simple Determinable

Future interest: Possibility of reverter (held by grantor)

FSDOR (Sinatra)

**REMEMBER: words of motive do not create FSDORs! Only words of duration.
What estate is created from the following language?

“To A, but if X event happens, grantor reserves the right to reenter and take.”
Fee simple subject to condition subsequent

Future interest: Right of reentry synonymous with power of termination (held by grantor)—does not automatically terminate-grantor’s option.
What estate is created from the following language?


“To A, but if X event occurs, then to B.”
Fee simple subject to executory limitation

Future interest: executory interest (held by third party)

If someone has the interest, you would say, “X has a fee
simple subject to B’s executory interest.”
What estate is created from the following language?

1 - “To A for life.”

2 - “To A for the life of B.”
1 – Life estate

2 – Life estate pur autre vie (another’s life is the measuring life)

Future Interest: reversion (if held by grantor) or remainder (if held by third party)

*Life estates are generally indefeasible but it is possible to create a defeasible life estate
Which freehold estate is subject to the doctrine of waste?

What is the remedy for waste?
Life estate

A life tenant is entitled to ordinary uses and profits of the land but may not commit waste or any other injury to the interest of a remainderman or reversioner.

A reversioner (grantor or descendants) or remainderman (third party) may sue for damages or enjoin acts of waste.
Name the 3 types of waste
1 – Voluntary or affirmative waste
2 – Permissive waste or neglect
3 – Ameliorative waste
What is voluntary or affirmative waste?
Actual overt conduct that causes a decrease in value.
Includes willful acts of destruction and consumption of natural resources on the property.
When may a life tenant consume natural resources on the life estate?
GR: a life tenant must not consume or exploit natural resources on the property.

Exceptions—PURGE:
1) PU: prior use. If the land was used that way prior to the grant.
a. *Open mines doctrine
2) R: reasonable repairs. The life tenant may consume natural resources for reasonable repairs and maintenance of the property.
3) G: grant. If expressly granted the right to do so, the life tenant may do so.
4) E: exploitation. If the land is only suitable for exploitation.
What is the open mines doctrine?
If mining was done on the property prior to the beginning of the life estate, the life tenant may continue mining. BUT, the mining must be limited to those mines already open and may not open new mines.
What is permissive waste or neglect?
It occurs when the land is allowed to fall into disrepair, OR
The life tenant has failed to take adequate reasonable measures to reasonably protect the land.

Life tenant must simply maintain the premises.

A life tenant must pay all ordinary taxes on the land to the extent of income or profits from the land. If there are no profits/rents, the LT is req’d to pay taxes to the extent of fair rental value.
What is ameliorative waste?
An LT must engage in acts to enhance the value of the property unless: all of the future interest holders are (1) known, and (2) consent.

We honor sentimental value.
What estates do the following interests accompany?
1) The possibility of reverter
2) The right of reentry (power of termination)
3) The reversion
1) Fee simple determinable only (Sinatra)
2) Fee simple subject to condition subsequent only
3) ANY TIME a grantor transfers an estate less than he started with (other than FSD and FS subj to cond subsequent)
Name the types of interests held by others than the grantor.
1) Vested remainder
a. indefeasibly vested remainder
b. vested remainder subject to complete defeasance (subject to total divestment)
c. vested remainder subject to open
2) Contingent remainder
3) Executory interest


NOTE: remainders cannot cut short the previous estate but executory interests do cut short the previous estate. A remainder can never follow a fee simple.
When is a remainder vested and when is it contingent?
1) Vested if: (i) created in an ascertainable person, AND (ii) not subject to any condition precedent
2) Contingent if: (i) created in an unascertainable person, OR (ii) subject to a condition precedent

NOTE: A remainder is created in a grantee capable of becoming possessory at the expiration of the prior possessory estate.
(a) Usually comes with the life estate
(b) Never follows a defeasible fee
What is the “Rule of Destructibility” and when does it apply?
Historically (CL), a contingent remainder would be destroyed if it was still contingent when the preceding estate ended.

Modern law has abolished the rule. Now, the estate would revert to grantor subject to tranferree’s springing executory interest.
Describe the “Rule in Shelley’s Case.”
Historically, in the case of “to A for life, and on his death, to his heirs,” the interests would merge creating a fee simple absolute (even in the face of contrary grantor intent).

TODAY, virtually abolished. So, in the above transfer, A would have a life estate, his yet unknown heirs would have a contingent remainder, and O would have a reversion (since A could die without heirs).
Describe the Doctrine of Worthier Title.
If, “To A for life, then to O’s heirs,” the Doctrine of Worthier Title would apply is O did not have heirs at the time of the transfer voiding the contingent remainder and giving O a reversion.

It would promote the free transfer of land. But, it’s a rule of construction, so if grantor’s intent would control.
Name and distinguish the three vested remainders.
1) Indefeasibly vested remainder
a. Holder will acquire estate w/ no strings
2) Vested remainder subject to complete defeasance
a. Holder takes NOT subject to any cond precedent but it could be cut short (defeased) by a condition subsequent
3) Vested remainder subject to open
a. Remainder vested in a group of takers w/ at least one qualified to take possession but potentially subject to diminution by not yet ascertainable class members.
What is the “comma rule,” and how/when does it apply?
Distinguishes between a condition precedent (creates a contingent remainder) and a condition subsequent (creates a remainder subject to complete defeasance).


If the cond’l language appears before the remainder-creating language → condition precedent w/ contingent remainder.

If cond’l language is set off by commas and appears after the remainder-creating language → condition subsequent w/ vested remainder subject ot complete defeasance.
What is an executory interest called when it is created in a third party?

What is an exec interest called when created in the grantor or his heirs?
Third person = shifting executory interest
Grantor/heirs = springing executory interest


Note: executory interests follow defeasible fees and cut someone other than grantor short.
What is the Rule Against Perpetuities?
Common law RAP states: no interest in property is valid unless it must vest, if at all, not later than 21 years from some life in being (measuring life) at the creation of the interest.

If there is any possibility that an interest might vest more than 21 years after a life in being → it is void.

RAP does not apply to any interests created in the grantor. Therefore, reversion, possibility of reverter, and rights of entry are safe from RAP application.
What is USRAP?
Uniform Statutory Rule Against Perpetuities (USTRAP). It provides a statutory alternative to the CL RAP and takes a wait and see approach. Under USRAP, an interest will be invalidated if it does not actually vest more than 90 years after its creation.
What is cy pres?
It is an alternative to the CL RAP (“as near as possible”). The doctrine allows a court to reform a transfer that violates the RAP by complying with RAP while most closely matching grantor’s intent.
What interests are exempt from RAP consideration?
1) Any interest created in grantor, incl. reversion, poss of reverter, and rts of entry
2) Charity to charity gifts
a. Therefore, if “to Red Cross, but if ceases to be used for Y, then to YMCA” does not violate RAP.
3) GR: options that could be exercised later than the perpetuities period is void BUT RAP doesn’t apply to options granted to current tenants.
4-step RAP analysis application
1) Classify the future interest
a. only applies to contingent remainders, executory interests, and certain vested remainders subject to open
2) Id the conditions precedent to vesting
a. what has to happen before a future interest holder can take
3) Find a measuring life
a. someone alive at the time of the conveyance whose life or death is relevant to the conveyance
4) Will we know with certainty w/i 21 yrs of the death of our measuring life if our future interest holder(s) can or cannot take? (is there any chance at all that the condition precedent could or could not occur more than 21 yrs after the death of a measuring life?)
NOTE: remember the fertile octogenarian rule! An 80 yr old could theoretically still have a baby
2 bright-line rules for RAP application
1) A gift to an open class conditioned on the members surviving to an age beyond 21 violates the common law RAP and is void
2) An executory interest with no time limit w/i which it must vest violates CL RAP
RAP examples
“To A and his heirs so long as the land is used for farming.”
-Does not violate RAP bc the interest is created in grantor

“To A and his heirs so long as the land is used for farming, and if the land ceases to be so used, to B and his heirs.”
-So, strike the offensive RAP clause and get the above example.

“To A and his heirs, but if the land ceases to be used for farming purposes, to B and his heirs.”
-If the offensive clause is stricken, the sentence is no longer grammatically sound, so A has a fee simple absolute
Joint tenancy
 2 or more own
 w/ the right of survivorship
 Alienable but not deviseable or descendable
 JTs are disfavored so MUST have the 4 unities and state “with the right of survivorship”
 Must be created by the 4 unities – T-TIP (JTs must take interests)
o at the same TIME
o by the same TITLE (same instrument)
o w/ identical INTERESTS, &
o identical rights to POSSESS the whole
Severance of a Joint Tenancy
 SPAM severs (Sale, Partition, And Mortgage)
 A JT can sell/transfer but it severs the JT so that the buyer is a TIC and the others are JTs
o Equitable conversion

Can be severed and portioned by the following:
-Voluntary agreement
-Partition in kind (judicial action—if in the best interest of all parties)
-Forced sale (judicial—land sold and divided up proportionately)
Tenants by the entirety
 Only between spouses
 VERY PROTECTED
o Creditors of only one spouse can’t touch
o Neither tenant can unilaterally convey
Tenancy in Common
 Each co-tenant owns an individual part
 Ea co-t has the right to possess the whole
 No right of survivorship
 Ea interest is descendable, deviseable, and alienable
What are the rights of tenants in common?
1) Right to possess and enjoy the whole
a. If one TIC wrongfully excludes another, he has committed wrongful ouster
2) TICs are not liable for rents to each other
3) TICS are entitled to their fair share of rents from third parties
4) One co-t cannot acquire title through adverse possession except through ouster
5) Liable to each other for carrying costs and reasonable repairs
6) Not liable for improvements (except that at partition, entitled to a credit or diminution for any “improvements)
7) Co-tenants must not commit waste
What are the 4 leasehold estates?
1) Tenancy for years (term of years)
a. lease for a fixed period of time
b. when you know the termination date at the beginning
c. > 1 yr must be in writing
2) Periodic tenancy
a. Continues for successive intervals until L or T gives proper notice
b. Can be created expressly; OR
c. By implication
i. if no duration stated but payment at set intervals
ii. oral term of yrs in violation of SOF
iii. Holdover: measured by the way rent is tenured
d. NEED written notice (at least equal to one period) to terminate
e. Must end at the conclusion of a natural lease period
3) Tenancy at will
a. unless expressly states at-will, treat as a periodic tenancy
4) Tenancy at sufferance
a. when T wrongfully holds over
Tenant’s duties
1) T’s liability to third parties
a. must keep in reasonably good repair
b. liable for injuries to 3p even where L promised to make all repairs
2) T’s duty to repair
a. T must maintain premises and make ordinary repairs
b. Must not commit waste
c. FIXTURES PASS w/ OWNERSHIP
3) T’s duty to pay rent
Describe the law of fixtures and how to determine what qualifies as a fixture.
GR: fixtures pass with ownership

What qualifies as a fixture?
 Express agreement controls
 In absence of agreement, T may remove a chattel she installed so long as removal will not cause a substantial harm to the premises
o If it would objectively cause substantial harm → it is a fixture and stays put
What happens if T breaches his duty to pay rent and is in possession of the premises?
L has two options:
1) Evict
2) Continue relationship and sue for rent

NOTE: Landlord must not engage in self-help (may not change locks or forcibly remove) (will be civilly liable if he does)
What happens if T breaches his duty to pay rent and is NOT in possession of the premises?
L has 3 options (SIR):
1) Surrender
a. through words or actions, T demonstrates the intent to surrender the leasehold
b. *If unexpired term > 1 yr, must be in writing to satisfy SOF
2) Ignore the abandonment and hold responsible
a. *only avail in minority of jurisdictions
3) Re-let
a. Majority rule: L must try to re-let
What are the landlord’s duties?
1) Duty to deliver possession
a. ENGLISH RULE (maj): requires L put T in actual possession
b. AMERICAN RULE (min): requires legal possession only—no duty to remove holdovers – outmoded minority rule
2) Implied covenant of quiet use and enjoyment
a. Residential and commercial
3) Implied warranty of habitability
a. Residential only
Describe the implied covenant of quite use and enjoyment.
 ROL: T has rt to use and enjoy w/o interference by L
 Applies in the residential and commercial setting
 2 breaches
o Actual wrongful eviction
o Constructive eviction (SING)
 Substantial interference
• chronic problems rise to the level of SI
• need not be permanent
 Notice
• T must give notice
• L must fail to respond
 Goodbye
• T must leave w/i reasonable time after L fails to fix problem
Is L liable for the acts of other tenants?
GR: no

2 exceptions:
1) L as a duty not to permit a nuisance on the premises
2) L must control all common areas
Describe the implied warranty of habitability.
1) GR: premises must be fit for basic human habitation
 Approp std may be local housing code or independent judicial conclusion
 e.g., lack of heat in winter, plumbing, etc.
2) Applies only to residential leases
3) It is non-waiveable
What are T’s entitlements when the implied warranty of habitability is breached?
MR3 (move, repair & deduct, reduce rent, remain in possession)

M: move and terminate lease
R: reasonably repair and deduct from rent
R: reduce rent or withhold all rent until judicial determination (might be escrowed)
R: remain in possession and seek money damages

NOTE: if T reports L for housing code violation, L may not engage in retaliatory eviction (penalizing T)
Explain the difference between an assignment and a sublease, including liability and privity.
GR: in absence of some prohibition, T may freely transfer his interest in whole (assignment) or part (sublease)

Assignment:
 L and T1 remain in privity of contract
 L and T2 remain are in privity of estate
 L & T2 liable to each other for all promises that run with the land

Sublease
 L and sublessee are in neither privity of estate or contract
 T2 liable to T1 and vice-versa; T1 & L
Does L have tort liability?
GR: common law of caveat lessee; L under no duty to make the premises safe

5 important exceptions (CLAPS):
1) Common areas
a. L must maintain all common areas, incl. hallways and stairwells
2) Latent defects
a. L must warn T of hidden defect of which L knows or has reason to know
b. NOT A DUTY TO REPAIR
3) Assumption of repairs
a. L under no duty to repair, but once undertaken must complete w/ reasonable care
4) Public use rule
a. L liable for defects in public spaces (convention halls, museums, etc.)
b. Where due to the short length of lease and nature of the defect L should know that T will not repair, L LIABLE
5) Short term lease of furnished dwelling
a. L responsible for any defect that harms T
What is an easement and what types are there?
DEF: the grant of a nonpossessory property interest that entitles its holder to use/enjoy another’s land (the servient tenement)


Can be affirmative (rt to go onto and do something) or negative (preventing the servient landowner from doing something otherwise permissible)
What are the categories of permissible negative easements?
LASS:

Light
Air
Support
Stream water from and artificial flow

Minority 5th cat: scenic view
What is the difference between an easement appurtenant and an easement held in gross?
 Appurtenant
o When it benefits its holder in physical use or enjoyment of his property
o Remember, it takes two:
 a dominant tenenment that derives the benefit
 a servient tenement that suffers the burden
 In gross
o confers some pecuniary or personal advantage on its holder NOT related to his use of the land
o here, servient land is burdened but there is no benefited dominant land
o e.g., rt to place a billboard, rt to fish/swim, rt to place power lines
When is an easement transferable?
1) Appurtenant: passes with land automatically regardless of whether it’s even mentioned in the conveyance
a. EXCEPTION: unless servient purchaser is a BFP w/o notice of the easement
2) Gross: not transferable unless for commercial purposes
How is an affirmative easement created?
Prescription – by adverse possession (COAH)
Implication – implied from existing use (sale w/o mention)
Necessity – landlocked setting
Grant – remember SOF for > 1 yr
How is an easement terminated?
(END CRAMP)

Estoppel – servient owner materially changes hi position in reasonable reliance on easement holder’s assurance that the easement will no longer be used
Necessity – if attributable to necessity → ends when nec ends
Destruction of servient land

Condemnation of servient estate by eminent domain
Release – written release by easement holder
Abandonment by physical action (mere nonuse/words insuff)
Merger doctrine – when easement holder acquires possession to dominant tenenmant
Prescription – when dom ten adversely possesses
What is a license?
Def: a mere privilege to enter another’s land for some delineated purpose

-It is freely revocable unless estoppel bars revocation (if licensee has invested substantial money or labor)
-SOF does not apply
What the Profit?
 Entitles its owner to enter servient land and take something from it (e.g., soil, or something in soil)
o timber, minerals, oil
 The profit shares the same rules as the easement holder
What is a covenant?
Def: it is a promise to/not to do something related to land
 Distinguish from easement: It is a contract NOT a grant of property interest
 Can be affirmative (promise to maintain common fence) or negative (promise not to build for comm purp)
How can you tell the difference between a covenant and an equitable servitude?
 If it is an action in equity → equitable servitude
 If an action for money damages → covenant
When will the covenant run with the land?
A: when the burden and the benefit both run.

Analysis:
1) Does the burden run? (remember WITHN must all be met) (A to A-1)
a. Writing
b. Intent
c. Touch and concern of the land
i. e.g., HOA fees touch the land, promises not to compete do not
d. Horizontal and vertical privity
i. Horizontal privity means that there was a nexus between the originally promising parties
1. They must have been in succession of estate – grantor-grantee, landlord-t
2. VERY HARD to est
ii. Vertical privity only requires some non-hostile nexus (e.g., not adverse possession)
e. Notice of the promise
2) Does the benefit run? (WITV) (B to B-1)
a. Writing
b. Intent
c. Touch and concern
d. Vertical privity
Will an equitable servitude bind successors?
You must have the following:

 Writing
 Intent
 Touch and conern
 Notice

PRIVITY IS NOT REQUIRED FOR AN ES TO BIND!
How is an implied equitable servitude created?

What are defenses to its enforcement?
You must have 2 elements of the general/common scheme.
1) When sales began, the subdivider had a common scheme or purpose for land, including D’s lot; AND
2) The D lot-holder had notice (actual, inquiry, or record notice)


Defenses:
Changed circumstances so pervasive that the entire area has changed
Never good enough: mere pockets of change
What are the elements of adverse possession?
Continuous & uninterrupted for the given statutory period
Open and notorious – the sort that the normal owner would use
Actual physical entry
Hostile

-ALL elements looked at from an objective standard – subjective intent does not matter
-Tacking allowed so long as there is some non-hostile nexus btw APs
-Defense: disability at the inception of the AP
What are the two steps to every land conveyance?
1) The land contract, which endures until step 2
2) The closing, where the deed becomes the operative document
What is the standard when looking at the land contract for SOF purposes?
 It must be in writing,
 Signed by the party to be bound,
 Must describe the land, AND
 Must state some consideration
What is the one exception to the land contract SOF reqts?
The Doctrine of Part Performance. If two of the following three are satisfied, then equity will demand specific performance for an oral k. (2 of 3)

1) B takes possession of the land
2) Be remits all or part of the purchase price
3) B makes substantial improvements to the premises
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Deck Info

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