PROPERTY MBE

Fee Simple Absolute

100% of ownership forever.

Life Estate

Rights and control for life.

Cannot commit waste.

“O to A for life.”

Reversion

Interest goes back to grantor.

Interest & Taxes

Life tenant must pay.

Remainder

Interest after a life estate.

"then to."

Vested Remainder

Automatic transfer.

Contingent Remainder

Subject to an event.

Vested Remainder Subject to Open/Partial Divestment

Refers to a class of people.

One must be alive.

Vested Remainder Subject to Total Divestment

If a person's interest can be wiped out.

Fee Simple Determinable

"so long as" or "as long as."

Possibility of Reverter

AUTOMATICALLY reverts to grantor if condition is not met.

Fee Simple Subject to Condition Subsequent

If a future event occurs, then grantor has right of reentry.

“but if.”

Right of Reentry

Grantor must act to get the land back.

Rule Against Perpetuities

Interest must vest within 21 years of the life in being.

Joint Tenancy

Right of Survivorship.

Trumps a will.

Conveyance SEVERS a Joint Tenancy to a Tenancy in Common.

Tenancy in Common

NO Right of Survivorship.

Tenancy by the Entirety

Joint Tenancy between married people.

Right of Survivorship.

No conveyance without consent.

Severed by divorce.

Partition

Court divides property in two.

Granted unless not practical.

Contribution - Taxes & Mortgage

Co-tenant may seek contribution.

Sole possessor can only recover amount that exceeds market value.

Contribution - Rent

Out of possession co-tenant may share in rent & profits.

But not from a tenant in possession.

Unless they are damaging the property.

Contribution - Repairs & Improvements

No contribution for repairs, unless necessary & requested.

No contribution for improvements, unless increase rents/profits.

Periodic Tenancy

(Start date) - (A period of time).

Renews unless a termination date.

Notice required to terminate.

Tenancy for Years

(Start date) - (An end date).

NO notice required.

Tenancy at Will

Terminable at will.

Reasonable amount of time to terminate.

Tenancy at Sufferance

Holdover Tenant.

Terminates by leaving or eviction.

Landlord Duties

Actual possession.

Duty for basic repairs.

Warranty of Habitability.

Warranty of Quiet Enjoyment.

Tenant Duties

Duty to Pay Rent.

Cannot commit waste.

Assignment

Assign the rest of the lease term.

New tenant primarily liable.

Original tenant secondarily liable unless novation.

Sublease

Give away a portion of lease.

Original tenant liable unless novation.

Covenant Against Assignment or Sublease

STRICTLY CONSTRUED.

Fair Housing Act

Federal law prohibits discrimination in sale/rental.

Race, color, religion, sex, disability, family status, pregnancy.

Fixtures

Chattel affixed to property.

Removal would cause damage.

CONFLICT OF LAWS—General Rule

Generally, law of the state where property is located will apply.

• Exceptions:

  • Choice of law clause.

  • Collateral issues use local law.

Easement

The right to use someone else's land.

Creation of an Easement

Writing.

By Prescription.

By Implication.

By Necessity.

An easement can be positive or negative.

EASEMENT—Time

Will last FOREVER, unless terminated.

Easements are terminated by

Agreement.

Time.

Merger.

Abandonment.  Non-use is not enough for abandonment.

Covenants

Promise for a promise.

Always created by writing.

Generally last forever.

A Covenant "runs with the land" if

Writing.

Intent.

Notice.

Privity.

Touch & Concerns the land.

Equitable Servitude

Looks like a Restrictive Covenant.

Seek equitable relief: Injunction.

Implied Reciprocal Servitude

Common Scheme & Notice.

License

Right to enter.

Freely revocable by grantor.

UNLESS coupled with an interest.

Profit

Right to enter the land & take something off the land.

Taking

Government taking private property for "public use."

Requires "just compensation."

Water Rights

Reasonable use of water.

Reasonable amount of water.

Reasonable means to alter flow of rain/snow.

Crops

Generally, go with the property.

Natural: "real property."

Man-made: "personal property."

Adjoining Undeveloped Property

Strict Liability for damage.

Adjoining Developed Property

Strict Liability if damage would have happened anyway. Or else negligence.

Digging on Adjoining Land

Negligence for damage.

Private Nuisance

Unreasonable interference with use & enjoyment.

Reasonable person standard.

Public Nuisance

Affects public at large.

Private plaintiff must prove special damages.

COMMON INTEREST OWNED COMMUNITY

Lot owners must pay dues to an association.

Property Owners Association

Owners required to belong to association & pay dues.

Condominium

Created by statute.

Must file a declaration & plat.

Condominium Owners

Pay taxes, insurance, mortgage for their unit.

Own common areas as tenants in common.

Cannot separate ownership of unit & common areas.

Co-Op

Corporation owns building & leases units to shareholders.

One mortgage on WHOLE PROPERTY.

Tenant pays share of fee for taxes & mortgage.

Forming a Common Interest Owned Community

Declaration.

Association.

Board.

Developer.

Developer

Developer gives power to Association.

Association has 2 years for 2/3 vote to terminate Developer.

Developer cannot change declaration (unless stated).

Board

Acts on behalf of Association to manage the community.

Rules in Community

Must be “reasonably related to further a legitimate purpose” of the Association.

Powers of the Community

Levy assessments & fees.

Manage/improve common areas.

Create rules.

Impose fines.

Conduct reasonable inspections.

Revoke privileges.

Litigate as the Association.

Duties of the Community

Treat members fairly.

Ordinary care in managing property/finances.

Reasonable access to information.

Community—Burden

BURDEN on members to prove breach by Association.

Duties of Board Members

Act in good faith.

Standard of Care: an ordinary director of a common interest owned community.

Board members not jointly/severally liable.

Purchase Money Mortgage

Money used to purchase the property.

Always gets priority.

Redemption

Paying off debt to prevent foreclosure.

Equitable Right of Redemption

Time from NOTICE to SALE.

Never Waived.

Statutory Redemption

Period of time AFTER foreclosure sale.

Lien Theory

Bank only has a LIEN.

Owner holds TITLE.

Owner can sell.

Title Theory

Bank holds TITLE.

Owner only has equitable interest.

Owner cannot sell.

Joint—Lien Theory

Mortgage does not sever.

Joint—Title Theory

Mortgage SERVERS into tenancy in common.

Assume the Mortgage

New buyer takes over payment.

Original owner secondarily liable unless novation.

Subject to the Mortgage

Original owner liable for payment.

BUT bank CAN foreclose on new owner.

Deed in Lieu of Foreclosure

Sign deed to bank & skip foreclosure proceedings.

Mortgages Taken AFTER

Are wiped out.

Must be given notice.

Joined to suit.

Mortgages Taken BEFORE

Stay.

Buyer takes Subject to.

Deficiency Judgment

Collect the remaining money not recovered by foreclosure sale.

Installment Land Contract

No title until all payments made.

Seller can take back after default. 

Conveying Title

Involves two separate documents:

• Real Estate Contract.

• Deed Statute of Frauds:

  • Contracts MUST be in writing, or

  • Part Performance.

A contract can be removed from SOF by Part Performance with 2 out of 3:

• Payment.

• Possession.

• Valuable Improvements.

K REMOVED FROM SOF BY PART PERFORMANCE

2 out of 3:

• Payment.

• Possession.

• Valuable Improvements.

Real Estate Contract Terms

Price.

Parties.

Description.

Conditions.

Signed by party to be charged.

Equitable Conversion

Transfer of equitable title.

Risk of loss shifts to the buyer.

Legal Title

Seller does not need ___ on day of signing.

Marketable Title

Implied covenant to convey title free of encumbrances.

Time

NOT of the essence, unless stated.

Merger

At closing, the CONTRACT ____ into the DEED.

Can no longer sue under the contract.

Seller’s Duty to Disclose

Material defects that CANNOT be seen by the buyer.

DEEDS

Transfers legal title on day of closing.

Present Warranties

Seisin.

Right to Convey.

Covenant against Encumbrances.

• Tip: If Present Warranties are breached, they are breached on the day of closing.

Future Warranties

Quiet Enjoyment.

Warranty.

Further Assurances.

• Tip: Future Warranties last forever.

General Warranty Deed

Promise for all 6 warranties since property was developed/created.

Special Warranty Deed

Promise for all 6 warranties since seller had title.

Quitclaim Deed

No promises regarding title.

FORMALITIES OF CLOSING

Writing:

To satisfy Statute of Frauds.

Delivery of Deed:

Intent of the seller to give up control.

Acceptance of Deed:

Presumed unless rejected.

Merger:

At closing the Contract & Deed MERGE.

Description of the Property:

Must be “reasonably definitive.”

ADVERSE POSSESSION

Acquire legal title if:

• Continuous.

• Actual.

• Open and Notorious.

• Hostile.

• Exclusive Tacking:

  • Intentional transfer from one person to another.

Drafting Documents

Non-attorney can draft documents.

BUT not give legal advice.

Equal Dignity Rule

Agent may sign deed on behalf of grantor.

Need permission in writing.

Exceptions:

• Officer of Corporation with authority.

• Signing agent.

• No writing – Grantor is estopped if he tried to induce reliance.

Notice Statute

Key words: “subsequent purchaser for value without notice.”

Last Bona Fide Purchaser prevails.

Bona Fide Purchaser

Pay for property.

Take property without notice.