MBE Rapid Fire - Real Property

Fee simple absolute;

Defeasible estate;

fee simple determinable;

fee simple subject to condition subsequent; and

fee simple subject to executory limitation

Life estate;

Non-freehold estates (leasehold estate)

Pay property taxes & mortgage interest;

Make reasonable repairs;

Not commit waste; and

Pay insurance premiums (some jurisdictions)

Life tenant must keep property in the same condition as when she took ownership.
3 types:

Affirmative (“voluntary”) waste

Permissive waste

Ameliorative waste

A fee estate of potentially infinite duration that can be terminated upon the occurrence of a specified event

Fee simple determinable

Fee simple subject to condition subsequent

Fee simple subject to executory interest

Property interest that terminates automatically upon the happening of a named future event.

Created with specific durational language (“until,” “while,” “so long as”)

Possibility of reverter: automatically reverts back to the grantor if condition happens

Gives grantor power/right to terminate interest upon occurrence of a specific event.

Created with specific, conditional language: “on condition that,” “provided,” “if”

Fee simple subject to a condition subsequent is preferred over fee simple determinable (because there is no automatic forfeiture)

Covenant is preferred over a defeasible estate

An estate that is subject to a future interest by a third party, and upon occurrence of an event, the estate will automatically divest in favor of the third party.

Created with specific conditional language: “To A, but if A doesn’t finish law school, then to B and B’s heirs”

Reversion (O conveys life estate);

Possibility of reverter (O conveys fee simple determinable);

Right of entry

Power of termination:

Must be expressly retained by grantor in the conveyance

When the event happens the property does not automatically revert back to the grantor, the grantor must re-take the property

Descendable; devisable, not transferrable inter vivos (majority rule)

Possibility of reverter:

Automatically created whether or not grantor expressly reserves the right in conveyance

When the event happens the property automatically reverts to the grantor

Descendible, devisable, transferrable

Remainders that are either:

Created for an unknown beneficiary (“To A for life then to B’s heirs” if B has no children yet); or

Subject to a condition precedent (“To A for life then to B and her heirs if B passes the bar”)

Interest that is:

Created in an ascertainable grantee; and

Not subject to any condition precedent other than termination of the preceding estate

Types:

Indefeasibly vested

Vested remainder subject to total divestment

Vested remainder subject to open

Remainder

Vested

Contingent

Executory interest

Shifting

Springing

Grantee takes possession upon termination of prior estate, no conditions attached

Shifting: cuts short a third party’s interest (“To A and her heirs but if B passes the bar, then to B)

Springing: cuts short the grantor’s interest (“To A if she passes the bar”)

💡Memory tip:

ShifTing (divests third party)

SprinGing (divests grantor)

No right of survivorship;

Freely devisable, transferrable, alienable;

Right to possess the whole; and

Right to partition

Must have the Four Unities (“PITT”):

Unity of Possession: equal right of possession;

Unity of Interest: equal interest with co-tenants;

Unity of Title: same conveyance; and

Unity of Time: interests created at the same time

A joint tenancy creates a right of survivorship and a tenancy in common does not

Tenancy in common only requires unity of possession (not the 4 unities like a JT)

A joint tenancy between a married couple that has:

Right of survivorship

No right to partition

The joint tenancy remains intact between remaining joint tenants and the interest sold is held as a tenancy in common between all parties

Lien: JT is not severed

Title: JT is severed

Estate created & governed by a lease signed between the parties.

Types:

Tenancy for years;

Periodic tenancy;

Tenancy at will; and

Tenancy at sufferance

Pay rent;

Not commit waste (affirmative/voluntary, ameliorative, or permissive);

Not use the premises for an illegal purpose; and

Protect third party invitees from foreseeable dangers on the premises

Majority: Yes, should make good faith effort to rent to other tenants and can seek damages from tenant for losses.

Minority: No, landlord can seek damages for all unpaid rent

Landlords have a duty of reasonable care → can be liable for injuries:

In common areas & non-common areas if defect is hidden;

From existing defects that landlord knew of and failed to notify tenant about;

From negligent repairs made by landlord; and

From failure to make repairs required by housing code

Transfer of the entire lease to new tenant (assignee)

Assignee is in privity with landlord and liable for all rent owed to the landlord

If partial (tenant still has partial use of the property) or temporary: Yes, but tenant is entitled to compensation for dispossession from condemnation

If full condemndation: No

An easement appurtenant?

Easement in gross?

Yes, transferred automatically b/c attached to the dominant estate. Does not need to be explicitly stated in the transfer.

Not transferrable unless for commercial purpose

Expressly (signed in, writing);

Prescription;

Implication; or

Necessity

Easement implied by prior use.

Exists when:

Easement existed on a single tract of land that was subsequently severed into the servient and dominant estate;

Prior use was continous and apparent;

Parties intended the easement to continue; and

Easement is reasonably necessary for enjoyment of dominant estate

If lots are sold in a subdivision with a recorded plat or map

If holder has a profit-à-prendre that makes it necessary to use the land to extract materials

Easement is absolutely necessary to access the property

Created if:

Dominant and servient estates were once a single parcel under common ownership; and

Severance of the parcel made the easement absolutely necessary

Easement is unenforceable against the BFP

Destruction of servient estate;

Release;

Abandonment;

Estoppel;

Severance;

Prescription;

Merger;

Expiration; or

End of necessity

Licenses:

Freely revocable (unless detrimental reliance or coupled with interest)

Privilege, not an interest in land

Can be created without consideration or writing (no SOF requirement)

Easements:

Last for specific period or indefinitely

Interest in land

Must satisfy SOF

Writing: original agreement in writing;

Intent: original parties must intend to bind successors;

Touches and concerns the land;

Notice: burdened party had actual, record, or inquiry notice (not required for benefit to run)

Writing: original agreement in writing;

Intent: parties intended benefit to run;

Touches and concerns the land; and

Successor is in vertical privity with original parties

⚠️ Horizontal privity is not required

Writing: original agreement in writing;

Intent: parties intended to bind successors (courts are liberal in finding requisite intent);

Touches and concerns the land;

Horizontal and vertical privity; and

Notice: successor had notice of the covenant when she took

Landowners have the right to lateral support from adjoining land

Surface structures have the right to support from underneath the land.

Can arise if landowner allows another party mine, tunnel, or build an underground parking structure → party must ensure surface structures are adequately supported.

*Subjacent means "underground"

Governmental regulation and control of land use.

Derived from the police powers.

When it deprives the owner of ANY economically viable use

See Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978)

Discriminatory against suspect class (must show discriminatory purpose, not just effect);

Not rationally related to the general public welfare;

Unauthorized or in excess of authority; or

Too restrictive

A security interest in real property between a borrower and lender that secures the performance of an obligation (typically repayment of a loan)

Lender secures the mortgage by taking possession of all the original title documents of the property. Lender has the right to sell the property, foreclose, and appoint a receiver if the borrower doesn't pay.

Lien: Mortgagor-borrower has title and right to possession. Mortgagee-lender has a lien on the interest.

Title: Mortgagee-lender has title and right to possession

If the buyer/transferee "assumes" the mortgage:

Buyer/transferee is primarily liable for the loan

Mortgagor is secondarily liable unless released by transferee

If buyer/transferee takes "subject to" the mortgage:

Mortgagor is primarily liable

Buyer/transferee incurs no liability to repay the loan

When the borrower fails to make timely payments, the lender can foreclose on the property and use the proceeds to satisfy the debt owed

After default, at any time prior to the foreclosure sale, a debtor can redeem title to the property by paying the full debt amount

Note that this question refers to equitable rights of redemption, which are far more common than statutory rights of redemption, and more likely to be tested. For more info:* Right of Redemption

Requires the borrower to pay the full amount owed upon default

More info: Acceleration Clause

Judical

​​Sale is supervised by the court

Nonjudicial ("power of sale")

Property is sold without court supervision

​​Common in deed of trust states

Mortgage/deed of trust must contain a "power-of-sale" clause

Strict

Lender seeks court order for borrower to pay within a specified time frame. If borrower cannot pay, lender takes title to the property

Minority method

Debts incurred by the foreclosure (attorney's fees, etc); then

Senior mortgages; then

Junior mortgages

Generally, follow the "first in time, first in right" rule, unless an exception applies

Purchase money mortgage: Priority over all liens, regardless of when they were recorded

Recorded mortgages have priority over unrecorded mortgages;

Non-guaranteed advances from future-advance mortgages;

Subordination by senior mortgagee to subsequent interest;

Modification; and

After-acquired property

Junior interests are extinguished

Buyer buys the property subject to the senior interests

Holder of a senior security interest must proceed:

First, against property without junior security interests;

Second, against property that has whichever junior interest was more recently created; and

Lastly, against property that has whichever junior interest was more remotely created

Trespasser's possession is:

Continuous for duration of statutory period;

Open and notorious;

Actual;

Hostile; and

Exclusive

In writing;

Signed by the parties to be bound;

Contain essential terms of the deal (description of the land, consideration to be paid, etc)

Encumberances;

Covenants

Easements

Mortgages

Liens

Title acquired by adverse possession;

​Zoning violations;

Incurable and undisclosed physical defects; and

Future interests that have not consented to transfer

Notify the seller before the closing date and give them a reasonable time to cure defects

If seller doesn't cure, buyer can seek specific performance, damages, and an action to quiet title

⚠️ If buyer doesn't notify seller beforehand, deed controls b/c of the merger doctrine and seller is not liable

Once the deed is transferred/conveyed to the buyer, the contract merges with the deed and the deed controls, not the contract.

⭐️ This means that whatever obligations the seller had under the contract are not enforceable unless they are also contained in the deed.

Helps determine who bears the risk of loss. Holds that once the buyer signs K to purchase land at a later date, but before closing:

Buyer has equitable title; and

Seller has legal title

Holder of the equitable title (the buyer), regardless of whether buyer took possession yet

Buyer will not bear the risk of loss if loss is attributable to the intentional or negligent acts of the seller

In writing and signed by grantor;

Describe the parties and the land;

Delivered (i.e. seller must have present intent to transfer the interest)

Contains 6 present and future covenants of title that cover the property's entire history

Present:

Seisin;

Right to convey; and

Against encumbrances

Future:

Quiet enjoyment;

Warranty; and

Further assurances

Contains the same covenants of title as a general warranty deed, but only for the period of the seller's ownership of the land → does not contain any warranties for what happened before the grantor took ownership

Buyer who:

Purchases property for value;

Without notice of any prior claims

Actual;

Record (also called constructive notice); and

Inquiry

Subsequent bona fide purchaser who lacks notice of an earlier interest will prevail

First BFP to properly record