Studydroid is shutting down on January 1st, 2019

Bookmark and Share

Front Back
The issue is whether A is entitled to a fee simple absolute or a lesser present possessory estate.
A present possessory estate is an interest that gives the holder the right to present possession. A fee simple absolute is the largest estate recognized by law. It can be sold, divided, devised, or inherited and has an indefinite duration. Today, a fee simple absolute is presumed in the absence of express contrary intent.
The issue is whether A's fee simple estate is subject to a defeasible fee
Defeasible fees are fee simple estates that can be terminated upon the happening of a stated event. There are three types.

The first type is a fee simple determinable, which terminates and automatically reverts to the grantor upon the happening of an event. It is created by durational language, such as "for so long as", "while", "during", or "until". A fee simple determinable can be conveyed, but the grantee takes subject to the estate being terminated by the specific event.

The second type of defeasible fee is the fee simple subject to condition subsequent. The grantor expressly reserves the right to terminate upon the happening of an event by using conditional words such as "upon condition that", "provided that", "but if", and "if it happens that". The right to terminate is reserved to the grantor and is called a right of entry.

The third type is called a fee simple subject to an executory interest. If a fee simple estate terminates upon the happening of a stated event and then passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate, the third party has an executory interest.
The issue is whether A's estate is a fee tail and whether it may be enforced as such
A fee tail is a present possessory estate where inheritability is limited to lineal heirs. It is created by the words "to A and the heirs of his body"

Most jurisdictions have abolished the fee tail and an attempt to create one results in a fee simple absolute.
The issue is whether A's estate is a life estate
A life estate is one measured by the life or lives of one or more persons. The usual measurement is the life of the grantee ("to A for life"). The life estate may be measured by a life other than the grantee's through a life estate pur autre vie ("to A for the life of B"). A life estate can also be defeasible ("to A for life so long as alcohol is not used on the premises").
The issue is whether A has complied with the duties of a life tenant
Under the doctrine of waste, a life tenant is entitled to any ordinary use of the land, but cannot do anything that injures the interests of a remainderman or reversioner. A future interest holder may sue for damages or to enjoin such acts.

There are three types of waste. Affirmative waste is actual overt conduct causing a drop in property value. The general rule is that the life tenant must not consume or exploit natural resources on the property unless an exception applies. There are four exceptions: 1. Prior use (prior to the grant, the land was used for exploitation) 2. Reasonable repairs (the tenant is consuming resources for repairs and maintenance 3. Grant: The life tenant was granted the right to exploit and 4. Exploitation: The land is suitable solely for exploitation.

The second type of waste is permissible waste, which is when the life tenant allows the land to fall into disrepair. A life tenant is obligated to: 1. preserve the land and structures in a reasonable state of repair 2. pay interest on mortgages (but not the principal) 3. pay ordinary taxes and 4. pay special assessments for public improvements of short duration. It should be noted that a life tenant is not required to insure the premises for the benefit of remaindermen and is not responsible for damages caused by a third-party tortfeasor.

The final type of waste is ameliorative waste. The life tenant must not engage in acts that will enhance the property's value, unless all future interest holders are known to the life tenant and consent to the addition. In NY, a life tenant can make reasonable improvements unless the remaindermen object. A life tenant may also make alter the property if a substantial and permanent change in the neighborhood has deprived the property in its current form of reasonable usefulness. For example, if a neighborhood changed from residential to industrial.
The issue is whether O has a reversion interest
A reversion interest occurs where the grantor conveys less than she owns. It is a type of future interest that gives its holder the right or possibility of future possession of an estate. It is a present, legally protected interest in property. For example, if O conveys to A for life, O has a reversion upon A's death. A reversion interest does not have to be expressly reserved. It is an alienable, devisable, and inheritable right. The holder can sue for waste and for tortious damage to the reversionary interest. It should be noted that all reversionary interests are vested and not subject to the rule of perpetuities.
The issue is whether X has a remainder interest
A remainder is a future interest in a third person that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate, and it cannot follow a time gap after the preceding estate. A remainder must be expressly created in the instrument creating the preceding possessory estate.

Since a remainder cannot cut short a preceding estate, it can never follow a fee simple estate.
The issue is whether X has a vested remainder interest
A vested remainder is one created in an existing and ascertained person and not subject to a condition precedent. There are three types.

The first is an indefeasibly vested remainder. It is a vested remainder not subject to divestment from a condition subsequent or diminuition from the expansion of the class.

The second is a vested remainder subject to open. It is a vested remainder created in a class of persons (for example "A's children) that is certain to become possessory, but is subject to diminution from, for example, the birth of additional persons who will share in the remainder as a class.

The third is a vested remainder subject to total divestment. It is possible that a person with an executory interest may take the property upon the occurrence of a condition subsequent. X is guaranteed to receive the estate but could possibly lose it upon the happening of an event.
The issue is whether X has a contingent remainder interest
A contingent remainder is created in unborn or unascertained persons or ascertained persons subject to a condition precedent.

A condition is precedent if it must be satisfied before the remainderman has a right to possession. Ex: To A for life, then to B if B marries.

A remainder created in an unborn or unascertained person is contingent until the remainderman is ascertained because no one is ready to take possession if the preceding estate ends.

Historically, at common law, a contingent remainder was destroyed if it was still contingent at the time the preceding state ended.

Today, the destructibility rule has been abolished at common law and in NY.
-If X has still not met the contingency, then X has a springing executory interest that takes the reverted estate from O upon the happening of the contingency.

Also note that the merger doctrine applies. When one person acquires all of the present and future interests in land except a contingent remainder, under the common law the contingent remainder is destroyed. Example: O conveys to A for life, then to B's children. If, before B has any children, O purchases A's life estate, O will have a life estate pur autre vie and a reversion. These interests merge, and the contingent remainder in B's unborn children is destroyed.
The issue is whether Shelley's case applies
At common law, if the same instrument created a life estate in A and gave the remainder only to A's heirs, the remainder was not recognized, and A took the life estate and the remainder as a fee simple absolute.

This promotes alienability and ignores any possible grantor's intent.

Ex: "To A for life, then, on A's death, to A's heirs" would simply be restated as "To A"

This rule has largely been abolished and it is not the law in NY. Today, it would be interpreted as follows:
1. A has a life estate; 2. A's unknown heirs have a contingent remainder 3. O has a reversion if A dies without heirs 

The issue is whether a remainder in grantor's heirs is invalid and should become a reversion in grantor
Under the Doctrine of Worthier Title, a remainder in the grantor's heirs is invalid and becomes a reversion in the grantor. This applies only to inter vivos transfers (not wills) and only if the word "heirs" is used. It is a rule of construction and does not apply if the intent to create a remainder in heirs has been clearly manifested.

Example: O, while alive, conveys "to A for life, then to O's heirs"
1. A has a life estate
2. O has a reversion and O's heirs do not have a contingent remainder because a living person has no heirs
The issue is whether X has an executory interest
Executory interests are a future interest created in a third party which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or his heirs (springing).

A shifting executory interest follows a defeasible fee and cuts short someone's interest in the estate other than the grantor. For example: "To A, but if B goes to college, to B"

A springing executory interest follows a defeasible fee and cuts short the grantor or his heirs. Example "To A, if and when he marries" Once A marries, the estate will vest but if A never marries, O and O's heirs have a fee simple absolute.

The rule of perpetuities will not void an executory interest if we will know by the end of the measurable life + 21 years the outcome.
The issue is whether X is a member of the class entitled to the estate
A class is a group of persons having a common characteristic described in the conveyance. For example "To A's children". The share of each member is determined by the number of persons in the class. A class can be a vested remainder subject to open (at least one member exists) or it can be a contingent remainder (no one has been ascertained or born yet).

Under the rule of convenience, in the absence of express contrary intent, a class closes when some member of the class can call for distribution of her share of the class gift.

Example: To W for life, then to A's children. The estate will be divided among all children of A born prior to W's death. This includes heirs of children who may have predeceased W. Survival is unnecessary unless it is an express condition.
The issue is whether a trust exists
A trust is a fiduciary relationship with respect to specific property wherein the trustee holds legal title to the property subject to enforceable equitable rights in a beneficiary. The creator of the trust is the settlor, who must own the property at the time of trust creation and must have had the intent to create the trust.

All trusts of real property must be in writing. The rule against perpetuities applies to the equitable future interests of the beneficiaries in a private trust.
The issue is whether the rule against perpetuities precludes the conveyance
No interest in property is valid unless it vests no later than 21 years after a life in being at the creation of the interest. If there is any possibility that the interest might vest more than 21 years after a life in being, the interest is void.

An interest vests for the purposes of the rule when it becomes possessory or an indefeasibly vested remainder or a vested remainder subject to total divestment.

The RAP applies only to
1. contingent remainders
2. executory interests
3. vested remainders subject to open
4. options to purchase

Violation of RAP destroys only the offending interest and not the entire conveyance.

Common pitfalls
An executory interest following a defeasible fee is usually striken. Example: "To A for so long as no liquor is consumed on the premises, then to B" since A and A's heir could abide by the defeasible fee for generations.

Age contingency beyond age 21 in an open class because otherwise the court will not know if the outcome is achieved within 21 years of the life in being. "Bad as to one, bad as to all"

The fertile octogenarian
A woman is presumed to be able to bear children, regardless of age or medical condition. Some states, including NY, have enacted perpetuities reform statutes that raise a presumption that women over a certain age (NY: 55) cannot bear children.

Unborn widow or widower: Because a person's widow is not determined until his death, it may turn out to be someone who was not in being at the time of disposition"

Options and rights of first refusal must be limited to the RAP. No right of first refusal can extend beyond a life in being + 21 years.

Reforms to RAP
Some states have modified RAP

"Wait and see" statutes determine an interest's validity upon the termination of the preceding life estate - if the interest actually vests or fails within the perpetuities period it is valid. if it does not, it is void.

Other statutes provide alternative vesting periods. Uniform Statutory Rule Against Perpetuities applies 90 year vesting period.

Cy pres doctrine: If a given disposition violates the rule, a court may reform it in a way that most closely matches grantor's intent while still complying with RAP
-Ex: reducing an age contingency to 21

NY Perpetuities Reform Statute: Applies the common law
1. Rejects wait and see
2. Rejects cy pres doctrine
3. Where an interest is invalid because of an age contingency, the court reduces it to 21 years
The issue is whether a restraint on alienation is void
Generally, any restriction on the transferability of a legal interest is void. There are three types of alienation.

The first are disabling restraints, where attempted transfers are ineffective. The second are forfeiture restraints, where an attempted transfer forfeits the interest in property. The third are promissory restraints, under which an attempted transfer breaches a covenant.

All absolute restraints on fee simple estates are void. A grantee may freely transfer the property. However, restraints for a limited time and reasonable purpose are likely to be upheld.

Valid restraints on alienation include: 1. forfeiture restraints on transferability of future interests 2. reasonable restrictions in commercial transactions 3. rights of first refusal and 4. restrictions on assignments and subleases
The issue is whether a joint tenancy exists
A joint tenancy is a type of concurrent estate, which is property held concurrently by several persons, all of whom have the right to enjoyment and possession of the land. A joint tenancy's distinguishing feature is the right of survivorship. When one joint tenant dies, the property is freed from her concurrent interest (and her survivors do not succeed to it).

In order to create a joint tenancy, there must be four unities - time, title, interest, and possession - that make the joint tenants equal in every way. The tenants must have identical interests, take title at the same time, by the same instrument, and with the same right of possession.

A joint tenancy (and the right of survivorship) can be severed under a few circumstances. An inter vivos conveyance by a joint tenant of her undivided interest destroys the joint tenancy. The transferee takes as a tenant in common. When there are more than two joint tenants, conveyance only destroys the joint tenancy to the extent of the conveying interest. Severance may also occur upon agreement of the joint tenants, murder of one co-tenant by another, or simultaneous death of co-tenants. Joint tenancy can be terminated by judicial partition voluntarily or involuntarily.
The issue is whether a tenancy by the entirety exists
A tenancy by the entirety is a marital estate akin to joint tenancy. The husband and wife have an undivided interest in the whole estate and a right of survivorship.

Some states presume tenancy by the entirety in any joint conveyance to husband and wife where the four unities are present.

The right of survivorship may be severed by death, divorce, mutual agreement, or execution by a joint creditor. Tenancy by the entirety cannot be terminated by involuntary partition.
The issue is whether a tenancy in common exists
A tenancy in common is a concurrent estate with no right of survivorship. Tenants can hold different interests in the property but each is entitled to possession of the whole. Interests are alienable, devisable, and inheritable. The court assumes that multiple grantees hold the land as tenants in common, rather than as joint tenants.

Tenancy in common may be terminated by partition.
The issue is whether X followed the rights and duties of a co-tenant in a concurrent estate
Possession: Each co-tenant has the right to possess all portions of the property but has no right of exclusive possession of any part. A co-tenant out of possession cannot bring a possessory action unless she is ousted (another co-tenant has claimed exclusive right to possession).

Rents and profits: A co-tenant in possession has the right to retain profits from her own use of the profits, absent ouster or a contrary agreement. However, a co-tenant must share net rents from third parties and net profits from exploitations of the land, such as mining.

Encumbering the property: A joint tenant or tenant in common may encumber her interest (by mortgage or judgment lien) but may not encumber the interests of other co-tenants. For a tenant in common, the mortgage can foreclose only on the mortgaging co-tenant's interest. For a joint tenant, a mortgage does not sever the joint tenancy, but a foreclosure sale will. In a joint tenancy, a mortgagee or lienor runs the risk that the obligated co-tenant will die before foreclosure, extinguishing the mortgagee's or lienor's interest.

Partition: Any co-tenant has a right to judicial partition either in kind (physical division) or by sale and division of the proceeds.

Expenses and contribution
Repairs: A co-tenant who pays more than her pro rata share for necessary repairs is entitled to contribution from the other co-tenants, provided she notified them of the need for repairs
Improvements: There is no right of contribution for costs of improvement. At partition, the co-tenant may recover the added value to the property OR must pay for the loss if the improvement lowers property value
Taxes and mortgage: Contribution can be demanded for taxes or mortgage payments. Reimbursement to a co-tenant in sole possession is limited to the extent that expenditures exceed the rental value of her use
The issue is whether a tenancy for years exists

A tenancy for years is one type of leasehold, which is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).
A tenancy for years continues for a fixed period of time. Under the Statute of Frauds, a writing is required if the lease is for more than a year. Since a tenancy for years ends automatically upon its termination date, no notice is required.

Example: L leases Blackacre to T from 1/1/07 - 7/1/07. Since this is a lease for a fixed period of time with a known termination date, there is no need to provide notice upon termination of tenancy.

The landlord reserves a right of entry, which allows him to terminate the lease if the tenant breaches any of the lease's covenants.

A tenancy for years may also terminate if the tenant surrenders the tenancy and the landlord accepts. If the surrender occurs with more than one year of the unexpired term remaining, the surrender must be in writing.
The issue is whether a periodic tenancy exists
A periodic tenancy is one type of leasehold, which is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).

A periodic tenancy continues for successive periods, such as month to month, until terminated by proper notice by either party.

The periodic tenancy can be created by
1. Express agreement
2. Implication (L leases to T at $1K payable monthly). Note that an oral term of years that violates the statute of frauds will become an implied periodic tenancy.
3. Operation of law: T remains in possession after the lease expires, and L treats it as a periodic tenancy

A periodic tenancy is automatically renewed until proper notice of termination is given. Notice must be one full period in advance and timed to terminate the lease at the end of a period. Example: If on a month to month lease carrying over at the end of the month and I give notice on January 15th, I must wait until February 28th to terminate.

For a year to year lease, 6 months notice is required.
The issue is whether a tenancy at will exists
A tenancy at will is one type of leasehold, which is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).

A tenancy at will is terminable at the will of either the landlord or the tenant.

In the absence of an express agreement, the payment of regular rent will cause a court to treat a tenancy at will as an implied periodic tenancy.

Though the tenancy at will may be terminated by either party at any time, a reasonable demand to vacate is usually needed.
-In NY, the landlord terminating a tenancy at will must give a minimum of 30 days written notice.
The issue is whether a tenancy at sufferance exists
A tenancy at sufferance is one type of leasehold, which is an estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion).

A tenancy at sufferance arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy. The tenancy lasts only until landlord either evicts tenant or elects to hold tenant to a new tenancy. No notice of termination is required. Generally, the terms and conditions of the expired tenancy govern the new one. Nonresidential tenants may be held to a year to year tenancy if the original lease was for a year or more. Residential tenants are generally held to a month to month tenancy, regardless of the original terms. If the landlord notifies the tenant before the lease expires that occupancy after the termination will be at increased rent, the tenant, by holding over, is held to have acquiesced to the new terms.

In NY, landlord's acceptance of rent subsequent to the expiration of the term will create an implied month to month tenancy, unless otherwise agreed

Note: The landlord cannot bind the tenant to a new tenancy in the following scenarios:
1. the tenant remains in possession for only a few hours after termination or leaves a few articles of personal property
2. the delay is not the tenant's fault (severe illness)
3. seasonal lease
The issue is whether the tenant acted within his duties
First, a tenant is liable to third parties under tort law. The tenant is responsible for keeping the premises in reasonably good repair. In addition, the tenant is liable for injuries sustained by third parties that the tenant invited, even where the landlord expressly promised to make all repairs.

Where the lease is silent, the tenant's duty to repair is one of maintaining the premises and making ordinary repairs. The tenant must not commit waste. There are three kinds of waste: (1) voluntary waste where the tenant intentionally or negligently damages the premises; (2) permissive waste where the tenant fails to take reasonable steps to protect the premises from damages he ordinarily had a duty to repair; and (3) ameliorative waste where the tenant alters the leased property. The tenant is also liable for voluntary waste if he removes a fixture. A fixture is movable chattel that, by virtue of its attachment to realty, objectively shows the intent to permanently improve the realty. Since fixtures pass with the ownership of land, the tenant must not remove any fixtures, even if she installed them. In the absence of an express agreement regarding the fixture, look to whether removing chattel that tenant has installed would cause substantial harm to the premises.

Where the tenant has expressly covenanted in the lease to maintain the property in good condition for the duration of the lease, the outcome differs based on historical common law and today. Historically, the tenant was liable for any loss to the property, including loss due to force of nature. Today, the majority view is that the tenant may terminate the lease if the premises are destroyed without the tenant's fault. In NY, if the premises are destroyed through no fault of the tenant, he may quit the premises and surrender possession without any further duty to pay rent.

If the tenant breaches the duty to pay rent and is in possession of the premises, the landlord's options are to evict or continue the relationship and sue for rent due. The landlord must not engage in self help, including changing the locks, forcibly removing tenant, or removing tenant's possessions. In NY, where a landlord has engaged in self help, the tenant is entitled to treble damages.

If the tenant breaches the duty to pay rent but is not in possession of the property, the landlord's options are to accept the tenant's surrender, ignore the tenant's abandonment and continue to hold T responsible for rent, or re-let the premises and sue the former tenant for damages.
The issue is whether the landlord acted within his duties
Absent a lease, a statute, and the implied warranty of habitability, a landlord has no duty to repair or maintain the premises.

The majority (English) rule is that a landlord is required to put the tenant in actual physical possession of the premises. If at the start of the tenant's lease a prior holdover tenant is still in possession, the landlord has breached and the new tenant gets damages.

The minority (American) rule is that the landlord does not have to provide physical possession to the tenant. The landlord need only provide legal possession and the holdover tenant is the new tenant's problem.

The landlord also is bound by the implied covenant of quiet enjoyment. This applies to both residential and commercial leases. The tenant has a right to quiet use and enjoyment of the premises without interference from the landlord. Breach may occur by wrongful or constructive eviction. Constructive eviction occurs where there is substantial interference by regularly recurring problems that the landlord has created or ignored. Once the tenant notifies the landlord of the problem, the landlord must respond meaningfully. Otherwise, the tenant is allowed to vacate within a reasonable time. It should be noted that the landlord is not liable for the acts of other tenants, unless these acts occur in an area normally controlled by the landlord or the acts are a nuisance.

The landlord also has an implied warranty of habitability that is not waivable. This warranty applies to residential leases and the landlord must provide premises fit for basic human habitation. Look to local housing code and caselaw for the definition of basic human habitation but common examples are no heat and no running water. In the event of a breach, the tenant may: (1) terminate the lease; (2) make repairs and offset the cost against future rent; (3) reduce the rent or withhold until the court determines fair rental value (and hold rent in an escrow account to show good faith); or (4) remain in possession and pay rent and seek money damages.

The landlord must not engage in retaliatory eviction for a tenant's lawful reporting of housing code violations. This includes raising the rent, ending a lease, harassment, or other reprisals.

At common law, a landlord has no duty to make the premises safe. Today, there are six exceptions to the rule. First, if, at the time the lease was entered into, the landlord knows or should know of a dangerous condition that the tenant could not discover by reasonable inspection, the landlord must disclose (but need not repair) it. Otherwise, the landlord is liable for any injuries resulting. If the tenant accepts the premises after disclosure, she assumes the risk for herself and others and the landlord is not liable.

Second, the landlord has a duty of reasonable care in maintaining common areas.

Third, a landlord is liable for injuries to members of the public if, at the time of the lease, he knows or should know of a dangerous condition, has reason to believe the tenant may admit the public before repairing the condition, and fails to repair the condition.

Fourth, a landlord who rents a fully furnished premises for a short period is under a stricter duty and is liable for injuries resulting from any defect whether known or unknown.

Fifth, a landlord who actually attempts to make repairs is liable if an injury results because the repairs are done negligently or give a deceptive appearance of safety.

Finally, a landlord is liable for injuries resulting from his failure to repair or negligent repair if he covenants to repair.

Many courts are now holding that a landlord owes a general duty of reasonable care towards residential tenants and is liable for injuries resulting from ordinary negligence if he had notice of a defect and an opportunity to repair it.
The issue is the rights of a tenant, an assignee, and landlord in an assignment
Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest, in whole or in part.

A complete transfer of the entire remaining term is called an assignment.

An assignee stands in the shoes of the original tenant in a direct relationship with the landlord. The assignee and the landlord are in privity of estate and each is liable to the other on all covenants in the lease that run with the land.

A covenant runs with the land if the original parties to the lease so intend and if the covenant touches and concerns the land.

Because a covenant to pay rent runs with the land, the assignee owes rent directly to the landlord.

After assignment, the original tenant is no longer in privity of estate with the landlord but remains liable on the original contractual obligation to pay rent (privity of contract). If the assignee reassigns the leasehold interest, his privity of estate ends, and he has no liability for the subsequent assignee's failure to pay rent.
The issue is the rights of a tenant, a sublessee, and a landlord in a sublease
Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest, in whole or in part. If the tenant retains any part of the remaining term of the lease (other than a right to reenter upon breach), the transfer is a sublease.

A sublessee is the tenant of the original lessee and usually pays rent to the original lessee, who then pays the landlord. A sublessee is not personally liable to the landlord for rent or for performance of any of the covenants of the main lease unless the sublessee expressly assumes the covenants.

The landlord may seek the following remedies. First, the landlord may terminate the main lease for nonpayment of rent or breach of other covenants. The sublease automatically terminates with the main lease. Also, many states allow a landlord who does not receive rent to assert a lien on personal property found on the premises (both of the sublessee and the original tenant).
The issue is whether a nonpossessory interest exists
A nonpossessory interest in the land is a right to use land possessed by someone else. It exists where there is an easement, profit, covenant, or servitude upon the land.
The issue is whether an easement exists upon the land
An easement holder has the right to use another's land for a special purpose but has no right to possess or enjoy that land.

An easement is presumed to be of perpetual duration unless the grant specifically limits the interest.

An easement can be affirmative or negative. An affirmative easement means the holder is entitled to make affirmative use of the servient tenement.

Negative easements entitle the holder to compel the possessor of the servient tenement to refrain from engaging in an activity on the servient estate. There are four types of negative easements: (1) for light; (2) for air; (3) for lateral and subjacent support; and (4) for flow of an artificial stream.
The issue is whether performance must be met by closing of title
In real estate contracts, time is not of the essence unless the parties expressly or impliedly state that as a condition. A closing date is not absolutely binding and a party late in tendering her own performance can still enforce the contract if she tenders within a reasonable time of the closing date.

The buyer's obligation to pay and the seller's obligation to convey are concurrent conditions. Thus, neither party is in breach until the other performs. If neither performs, the closing date is extended until one of them does so.

A party need not tender performance if the other party has repudiated the contract or it is impossible (incurable unmarketable title) for the other party to perform.
The issue is what X is entitled to from breach of sales contract
The nonbreaching party is entitled to damages (difference between contract price and market value on date of breach, plus incidental costs) or, because land is unique, specific performance. If the buyer wishes to proceed despite unmarketable title, she can get specific performance with abatement of the purchase price.

Sales contracts requiring the buyer to deposit earnest money with the seller are valid as liquidated damages so long as the seller's retention of the earnest money upon breach is reasonable in light of the seller's anticipated and actual damages.
The issue is whether a mortgage exists
A mortgage is any conveyance of land intended by the parties at the time of the making to be security for the payment of money or the doing of some prescribed act. The debt itself is usually represented by a promissory note (a promise to pay). In NY, the mortgagee (creditor) has no title but only a lien upon the land. Title and the right of possession remain in the mortgagor (debtor).

To be enforceable, a mortgage must be in writing and signed by the mortgagor or by an agent acting pursuant to written authority.
The issue is whether an equitable mortgage exists
An equitable mortgage exists where a landowner needing to raise money gives a creditor an absolute deed to Blackacre with the understanding that Blackacre is collateral for the debt.

If the court concludes, by clear and convincing evidence, that the deed was really given for security purposes, they will treat it as an equitable mortgage and require that the creditor foreclose it by judicial action, like any other mortgage.

1. The existence of a debt or promise of payment by the deed's grantor
2. The grantee's promise to return the land if the debt is paid
3. The fact that the amount advanced to the grantor/debtor was much lower than the value of that property
4. The degree of the grantor's financial distress
5. The parties' prior negotiations
The issue is the extent of the obligations securable by a mortgage
Any existing monetary obligation capable of being reduced to a money equivalent may be secured by a mortgage. This includes (1) preexisting debt and (2) debts of one other than the mortgagor (debtor). If the sum being secured is not recited in the mortgage or in a separate instrument, remedies of the mortgagee are limited to that property listed in the mortgage.

Mortgages may also secure future advances.
The issue is whether a property interest less than fee simple may be mortgaged
Any transferable interest in real property may be mortgaged. This includes a fee simple, life estate, interest of one spouse in a tenancy by the entirety, or tenancy for a term of years.
The issue is whether usury is a valid defense against actions for both principal and interest of a mortgage
In NY, usury serves as a defense against actions both for principal and for interest if the mortgagor is not a corporation. The mortgagor may seek, without tender of principal or interest, affirmative relief to have the mortgage removed as a cloud on title. Where a bank or association is a usurious lender, only interest is forfeited (not principal). This relief is personal to the borrower and may not be sought by heirs, devisees, or representatives of the borrower's estate.
The issue is whether competency of the borrower affects the mortgage
A mortgage is valid despite the minority of the mortgagors if the mortgagors are husband and wife entering into a transaction involving real property to be used as their home
The issue is the rights of the mortgagor and mortgagee to the land
The mortgagee merely has a lien. It is not automatically entitled to possession, although it may take possession until the debt is paid if she has the express or implied consent of the mortgagor. The mortgagee may be subject to accounting by the mortgagor.

The mortgagor has, until foreclosure, title and right to possession. The mortgagor may not commit waste or in any way impair the value of the property securing the mortgage.
The issue is whether a mortgage was appropriately transferred
Notice of the mortgage is necessary to bind a recording purchaser of property. The mortgagee must record or risk losing her lien if an assignee of property records.

Transfers of a mortgage and note may be effected by delivery. Because a mortgage is collateral to the debt it secures, the mortgage always follows the debt. An assignee of the mortgagee takes subject to existing equities in favor of the mortgagor, unless the mortgage secures a negotiable instrument that has been assigned to a holder in due course. Until the mortgagor receives notice of the assignment, it is appropriate to pay the mortgagee rather than the assignee.

Transfer "subject to the mortgage" makes the property the primary source of payment for the debt. The original mortgagor is still liable on the bond and is only released from his suretyship if the mortgagee and transferee modify the mortgage obligation. The transferee taking subject to a mortgage is liable on the property but not personally liable for a default.

If the transferee assumes the mortgage, the transferee becomes the primary obligor and the original mortgagor is liable only secondarily. Assumption of a mortgage requires that the party assuming the mortgage execute and acknowledge (1) a writing stating that she assumes and agrees to pay the mortgage debt and stating the amount of the debt (2) a deed reciting the assumption of debt and the amount of the debt. Assumption does not relieve the mortgagor of his obligation on the bond but any change to the agreement between the mortgagee and the transferee completely discharges the mortgagor. A transferee who assumes the mortgage is subject to foreclosure on the property and also personally liable.
The issue is whether foreclosure was valid
A foreclosure action is an action brought by a mortgagee upon any default on payment of the debt that the mortgage secures. Nonpayment of principal or interest can effect an acceleration of debt so that the entire principal becomes due. In a foreclosure based on nonpayment, the mortgagee's oral waiver of the right to accelerate the debt and foreclose the mortgage is enforceable. A foreclosure is prohibited if (1) the mortgage was secured to pay for legal fees in a matrimonial action (2) it is on the mortgagor's primary residence and (3) the mortgagor remains the titleholder.

Every person whose interest is claimed to be subordinate to the plaintiff's mortgage lien is a necessary party to a foreclosure action. Persons with an interest superior to that of the foreclosing mortgagee are not permitted to be joined as defendants. The effect of omitting a necessary party is to preserve his interest despite foreclosure and sale.

The purchaser at a foreclosure sale acquires a title clear of any claim of the parties to the foreclosure action.

If sale proceeds are less than the judgment in the foreclosure action, the mortgagee can ask the court for a deficiency judgment within 90 days of sale.
The issue is whether a deed is valid
Deeds transfer title to an interest in real property.

A deed must be (1) in writing (2) signed by the grantor and (3) reasonably identify the parties and land

A void deed will be set aside by the court even if the property has passed to a bona fide purchaser. However, a voidable deed will be set aside only if the property has not passed to a bona fide purchaser.

Void deeds:
1. Forged
2. Never delivered
3. Obtained by fraud in the factum (the grantor was deceived and did not realized she was executing a deed)

Voidable deeds include
1. Executed by minors or incapacitated persons
2. Obtained through fraud in the inducement
3. Duress
4. Undue influence
5. Mistake
6. Breach of fiduciary duty

Even where a deed complies with the required formalities, it may be set aside by the grantor's creditors if it was made (1) with actual intent to hinder, delay, or defraud any creditor of the grantor or (2) without receiving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent or becoming insolvent as a result of the transfer

A description of the land is sufficient if it provides a good lead to the identity of the property. If it is too indefinite, the grantor retains title (but the deed may be reformed). Parol evidence is generally admissible to resolve patent or latent ambiguities if the description gives a good lead but not where the description is inadequate.
The issue is whether a deed was validly delivered and accepted
A deed is not effective unless it has been delivered and accepted. Delivery refers to the grantor's intention to make a deed presently effective even if possession is postponed. Delivery may be satisfied by manual delivery, notarized acknowledgement by the grantor, recording, or anything else showing the grantor's intent to delivery. Parol evidence is admissible on the intent to deliver but not to show that delivery was conditional.

Title passes upon delivery. It cannot be canceled or taken back. Thus, if a fact pattern has the grantee returning a deed to the grantor, this has no effect; it is not a cancellation or a reconveyance. To return title to the grantor, the grantee must draw up a new deed and deliver it to the grantor.

Retention of control or interest by the grantor (such as a right to revoke) indicates a lack of intent to pass title. However, a properly executed and delivered deed that provides that title will not pass until the grantor's death is valid and creates a future interest in the grantee. Oral conditions are disregarded if a deed is delivered and absolute on its face.

Acceptance by the grantee is required in order to complete a conveyance. States presume acceptance.

Dedication: Land may be transferred to a public body by dedication. An offer may be made by written or oral statement, submission of a map or plat showing the dedication, or opening the land for public use. To be effective, a dedication must be accepted, which may be done by formal resolution, approval of map or plat, or assumption of maintenance or improvements.
The issue is whether a general warranty deed exists
This warrants against all defects in title, including those due to grantor's predecessors

The usual covenants include:
1. Covenant of seisen: The grantor covenants that she has the estate she purports to convey. She must have both title and possession at the time of the grant. (breached only at the time of conveyance)
2. Covenant of right to convey: The grantor covenants that she has the authority to make the grant. Title alone will satisfy this covenant. (breached only at the time of conveyance)
3. Covenant against encumbrances: The grantor convenants against the existence of physical (encroachments) or title (mortgage) encumbrances. (breached only at the time of conveyance)
4. Covenant for quiet enjoyment: The grantor covenants that the grantee will not be disturbed in possession by a third party's lawful claim of title (breached only upon disturbance of the grantee's possession)
5. Covenant of warranty: The grantor agrees to defend against reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title (breached only upon disturbance of the grantee's possession)
6. Covenant for further assurances: The grantor promises to perform acts reasonably necessary to perfect title conveyed (breached only upon disturbance of the grantee's possession)
The issue is whether a statutory special warranty deed exists
Known as the bargain and sale deed in NY. This deed contains two promises that the grantor makes only on behalf of himself and makes no representations on behalf of his predecessors in interest.

First, the grantor assures that he has not conveyed the same estate or any interest therein to anyone other than the grantee. Second, the grantor promises that the estate is free from encumbrances made by the grantor.
The issue is whether a quitclaim deed exists
A quitclaim deed releases whatever interest the grantor has. There are no covenants of title, express or implied.
The issue is whether estoppel by deed has occurred
If the grantor purports to convey an estate in property that she does not own, her subsequent acquisition of the estate will automatically inure to the benefit of the grantee. This does not apply to quitclaim deeds.

Subsequent purchasers: Title inures only to the benefit of the grantee as against the grantor. If the grantor transfers her after-acquired title to a bona fide purchaser for value, the BFP will prevail over the original grantee.

The original grantee can accept title or sue for damages for breach of covenant.
The issue is whether grantee is protected by a recording act
A common law, if a grantor conveyed the same property twice, the grantee first in time generally prevailed. The recording acts change that outcome.

Recording acts protect bona fide purchasers from secret interests previously created and provide a mechanism for earlier grantees to give notice through recordation. These statutes require a grantee to record his deed to put subsequent purchasers on notice of his interest. Recording is not essential to the validity of the deed between the grantor and grantee, but can be essential to protect the grantee against a bona fide purchaser. Proper recordation gives constructive notice of the first conveyance to everyone so there can be no subsequent BFPs.

Notice statutes
-A subsequent BFP (person who pays value and has no notice of the prior instrument) prevails over a prior grantee who fails to record. The subsequent purchaser must not have actual or constructive notice at the time of conveyance.

Race notice statutes
A subsequent BFP is protected only if she takes without notice and records before the prior grantee.

Race statute
Whoever records first wins. Notice is irrelevant.
The issue is whether a security interest in real property exists
The first type is a mortgage. The debtor is a mortgagor and the lender is a mortgagee. On default, the lender can realize on the mortgaged real estate only by having a judicial foreclosure sale conducted by the sheriff.

The second is a deed of trust. The debtor is the trustor and he gives a deed of trust to a trustee, who acts for the lender (beneficiary). On default, the lender instructs the trustee to foreclose the deed of trust by sale.

The third is an installment land contract. An installment purchaser obtains legal title only when the full contract price has been paid off. Forfeiture clauses, allowing the vendor upon default to cancel the contract, retake possession, and retain all money paid, are common.

The fourth is an absolute deed, which can be treated by the court as an equitable mortgage.

The final type is a sale-leaseback. A landowner may sell her property for cash and then lease it back from the purchaser for a long time. This may be treated as a disguised mortgage.
The issue is the rights incidental to ownership of land (natural rights)
An owner of real property has the exclusive right to use and possess the surface, the airspace, and the soil of the property.

Right to lateral and subjacent support
-The right to have the land supported in its natural state by adjoining land
-A landowner is strictly liable if his excavation causes adjacent land to subside (cave in) or buildings collapse if this would have occurred in the land's natural state. Otherwise, he is negligent.

Water rights

Watercourses (rivers and lakes)
-Riparian doctrine: The water belongs to those who own the land bordering the watercourse. A riparian's use resulting in substantial or material diminuition of the water is enjoinable. Natural uses prevail over artificial uses.
-Prior appropriation doctrine: Individuals acquire rights by actual use. Priority is given in terms of time of appropriation. A right can be lost by abandonment.

-Absolute ownership: The owner of overlying land can take all the water she wishes for any purpose
-Reasonable use: The owner of overlying land can take all the water but may only export if it does not harm other owners of the same aquifer
-Correlative rights: In CA, owners of overlying land own the underground water basin as joint tenants and are allowed reasonable use
-Appropriative rights: Priority of use is determinative

Surface water
A landowner can use surface water within her boundaries for whatever purpose she desires.
-Natural flow theory: Owners cannot alter natural drainage patterns
-Common enemy theory: An owner can take any protective measures to get rid of the water that does not unnecessarily damage others' land
-Reasonable use theory: Balances the utility of the use against the gravity of the harm

Rights in airspace
The right to airspace above a parcel is not exclusive but the owner is entitled to freedom from excessive noise.

Right to exclude
-Private nuisance
-Continuing trespass
-Ejectment or unlawful detainer
x of y cards Next >|