MBE Property

Purchase Money Mortgage (PMM)

A Fee Simple Subject to a Condition subsequent (FSSCS)

a type of defeasible fee that is created through specific conditional language—-e.g. “ but if, unless, provided that.” Upon the occurrence of the specified condition, the grantor or the grantor’s success in interest has the right to enter and terminate the FSSCS if this right was explicitly retained in the conveyance.

• BUT an FSSCS will not terminate until the grantor exercises this right—termination is not automatic.

Modification of a Senior Mortgage

A modification of a senior mortgage generally does not prejudices the junior mortgage,

• BUT if the modification materially prejudices the junior mortgage, then the senior mortgage subordinates its interest as to the modification but the original mortgage remains superior.

Elements of Real covenants - for burden to run (enforceable by money damages)

1. Writing

2. Intent to run

3. Touch and concern the land

4. Horizontal and vertical privity

5. Notice

Elements of Real covenants - for benefit to run (enforceable by money damages)

1. Writing

2. intent to run

3. Touch and concern

4. Limited vertical privity

5. No notice required

Easement Appurtenant

• Benefits easement holder’s land

• Automatically transfers when land is conveyed (easement by necessity)

Easement in gross

• Benefits easement holder personally

• Does not transfer when land is conveyed (e.g., prescriptive easement for utility line)

Rights and duties of co-tenants

Rights

• Possess and enjoy the entire property

• Receive proportionate shares of net profits from removal of natural resources

• Receive pro rata shares of rent from third parties

Duties

• Pay proportionate shares of expenses that may give rise to lien (e.g., mortgage, property tax)

• Contribute to repair or improvement costs, but only upon agreement

Right of Refusal - common law RAP

A right of first refusal is one type of future interest that is subejct to common law RAP UNLESS the right was granted in a lease to a current leasehold tenant.