Real Property: Bar Checklist

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Real Property: Bar Checklist

Present Estates

1)Introduction

a)What Language Creates the Estate?

b)Distinguishing Characteristics?

i)Devisable—pass by will

ii)Descendible—pass by intestacy

iii)Alienable—inter vivos transfer during holder’s lifetime

c)What Future Interests?

2)Fee Simple Absolute

a)Creation

i)“O to A”

ii)“O to A and his heirs” (no longer needed)

b)Distinguishing Characteristics

i)Absolute ownership

ii)Potentially infinite duration

iii)Freely devisable, descendible, and alienable

c)Future Interest

i)None

ii)O gave away everything he had

3)Fee Tail

a)Creation: “O to A and the heirs of his body”

b)Distinguishing Characteristics

i)Fee tail passes to grantee’s lineal blood descendants no matter what

ii)Abolished everywhere

iii)Becomes a fee simple absolute when one tries to convey a fee tail

c)Future Interest

i)None today; O gave away everything he had (because a fee tail is a FSA)

ii)Historically

(1)Grantor got a reversion

(2)Third party got a remainder

4)Defeasible Estates (Three Types)

a)Two Rules to Note:

i)Words of mere desire, hope, or intention are insufficient to create defeasible fee

(1)Courts disfavor restrictions on the free use of land

(2)Court will not find a defeasible fee unless clear durational language is used

ii)Absolute restraints on alienation are void (“O to A so long as she never attempts to sell” is void)

(1)Ban on the power to sell or transfer

(2)Not linked to any reasonable time-limited purpose (“. . . so long as she waits till 2003 when title will be clear” is valid because limited by time and reasonable)

b)Fee Simple Determinable

i)Creation

(1)Grantee must use clear durational language

(a)O to A so long as . . .

(b)O to A during . . .

(c)O to A until . . .

(2)If the stated condition is violated, forfeiture is automatic

ii)Distinguishing Characteristics

(1)Freely devisable, descendible, and alienable but

(2)ALWAYS subject to the condition

(3)Can’t convey more than what you have

iii)Future Interest

(1)Grantor has a possibility of reverter

(2)F S D P O R—Frank Sinatra Didn’t Prefer Orville Redenbacher

c)Fee Simple Subject to Condition Subsequent

i)Creation

(1)“O to A, but if X event occurs, grantor reserves the right to reenter and retake.”

(2)Clear durational languageand

(3)Must carve out the right to reenter

ii)Distinguishing Characteristics

(1)Not automatically terminated

(2)Grantor has the prerogative to terminate if the stated condition occurs

iii)Future Interests: Grantor has Right of Entry/Power of Termination

d)Fee Simple Subject to Executory Limitation

i)Creation: O to A, but if X event occurs, then to B.

ii)Distinguishing Characteristics

(1)Same as fee simple determinable

(2)If condition is broken, automatic forfeiture in favor of someone other than grantor (third party)

iii)Future Interests: Shifting executory interest

5)Life Estate

a)Shorthand Rules

i)Holder can transfer life estate but only a life estate

ii)Automatic transfer when the life tenant dies

iii)Taxes and water right fees run with the land

iv)Waste Rules

b)Creation

i)Explicit lifetime terms; Never in terms of years (“O to A for 4 years” is not a life estate)

(1)O to A for Life

(2)O to A for the life of B (life estate pur autre vie)

c)Distinguishing Characteristics

i)Life tenant is entitled to all ordinary uses and profits from the land

ii)Waste Doctrine: Life tenant cannot commit waste—anything harming the future interest holders

(1)Voluntary/Affirmative Waste

(a)Defined: Actual overt conduct causing a decrease in value (e.g., destruction of property)

(b)General Rule: Life tenant cannot consume or exploit natural resources on the property

(c)Exception: PURGE

(i)Prior Use—before the grant, land was used for exploitation (Open Mines Doctrine)

(ii)Reasonable Repairs—life tenant may consume natural resources for reasonable repairs and maintenance of the premises

(iii)Grant—Life tenant was expressly granted the right to exploit the land

(iv)Exploitation—land is suitable only for exploitation

(2)Permissive Waste/Neglect

(a)Land is allowed into disrepair or

(b)Life tenant fails to reasonable protect the land

(c)Life tenant must maintain the premises in reasonably good repair

(d)Must pay all ordinary taxes

(i)Income/profits on the land—pay taxes relative to the income/profit

(ii)No income/profit—pay taxes to the extent of premises fair rental value

(3)Ameliorative Waste

(a)Generally: Can’t do anything that will enhance the property’s value

(b)Exception: all of future interest holders are knownand they consent

d)Future Interests

i)Grantor gets a reversion

ii)Third party gets a remainder

Future Interests

1)Grantor’s Future Interests

a)Possibility of Reverter: Follows a Fee simple determinable ONLY

b)Right of Entry/Power of Termination: Follows a Fee Simple Subject to Condition Subsequent ONLY

c)Reversion (Leftovers): Follows Everything Else

2)Transferees: Future interest held by anyone other than the grantor is a remainder

a)Remainders: Either Vested or Contingent

i)Defined

(1)Future interest created in a grantee

(2)Capable of becoming possessory upon the expiration of a prior possessory estate

(3)Created in the same conveyance as the prior possessory estate

ii)Remainderman (Sociable, polite, and patient)

(1)Always accompanies a preceding estate of known, fixed duration (usually a life estate)

(2)Never follows a defeasible fee and cannot cut short or divest a prior transferee

(3)If present estate is defeasible estate, future interest is never a remainder

b)Vested Remainder

i)Defined

(1)Created in an ascertained person and

(2)Not subject to a condition precedent

ii)Indefeasibly vested Remainder

(1)No conditions or strings attached

(2)Remainderman is certain to acquire an estate in the future

(3)O to A for life, remainder to B. A is alive and B is alive. B is certain to get the remainder because no strings are attached. If B predeceases A, B’s heirs get the remainder.

iii)Subject to Complete Defeasance (Subject to Total Divestment)

(1)Remainderman exists

(2)No condition precedent BUT

(3)Condition subsequent

(4)Use the Comma Rule: O to A for life, remainder to B, provided, however, that if B dies under the age of 24, then to C. A is alive. B is 20 years old.

iv)Subject to Open

(1)Defined

(a)Remainder is vested in a group of takers

(b)At least one is qualified to take possession

(c)Each member’s share can be decreased because additional takers not yet ascertained can still qualify as class members

(d)O to A for life, then to B’s children. B has two kids, D and E. If B has another kid, D and E don’t get as much.

(2)Classes must be open or closed

(a)Open: possible for others to enter (see above example)

(b)Closed: when any member can demand possession (when A (life tenant) dies or when B dies)

(c)Exception: Womb Rule

c)Contingent

i)As yet unborn or unascertained person

(1)O to A for life, then to B’s first child. B has no children

(2)O to A for life, then to B’s heirs. B’s alive. B can’t have heirs until he’s dead

(3)O to A for life, then to those children of B who survive A.

ii)Subject to a condition precedent

(1)Prerequisite must occur before future interest attaches

(2)Appears before the language creating the remainder

(3)O to A for life, then, if B graduates college, to B; B is a freshman in college.

(4)O to A for life, and, if B has reached the age of 21, to B; B is 19.

iii)Rule of Destructibility of Contingent Remainders

(1)Common Law: contingent remainder destroyed if it was still contingent at the time the preceding estate ended

(2)Today: abolished; if condition not satisfied, O or O’s heirs hold the estate subject to the remainderman’s springing executory interest (gets it once condition satisfied)

iv)Rule in Shelley’s Case

(1)O to A for life, then, on A’s death, to A’s heirs. A is alive. (only fact pattern)

(2)Common Law

(a)Present and future interest would merge and A would have a FSA

(b)Applicable even in the face of a contrary grantor intent

(3)Today

(a)Abolished

(b)A has life estate

(c)Contingent remainders in the unknown heirs

(d)O has a reversion

v)Doctrine of Worthier Title (Rule Against a Remainder in Grantor’s Heirs)

(1)O to A for life, then to O’s heirs. O is alive

(2)Contingent remainder is void

(3)A has life estate; O has reversion

(4)Rationale: promote free transfer of land

(5)Rule of construction, so grantor’s intent controls

d)Executory Interest

i)Defined

(1)Future interest created in a transferee (third party)

(2)Not a remainder interest

(3)Takes effect by cutting short another person’s interest (shifting) or the grantor’s interest (springing)

ii)Shifting

(1)Always follows a defeasible fee

(2)Cuts short someone other than the grantor

(3)O to A and her heirs, but if B returns from Canada this year, to B and his heirs

iii)Springing

(1)Cuts short the grantor’s interest

(2)O to A, if an when A marries. A is unmarried. A has a springing executory interest.O has a FS subject to A’s springing executory interest.

Rule Against Perpetuities

1)Rule

a)Future interest is void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life

2)Approach

a)What interest has been created?

i)Applies only to

(1)Contingent remainders

(2)Executory interests

(3)Some vested remainders subject to open

ii)Does not apply to

(1)Grantor Future interests (Possibility of Reverter; Right of Entry; Reversion)

(2)Any indefeasibly vested fee

(3)Any vested subject to defeasance

b)Identify the conditions precedent to the vesting

c)Find a measuring life (relevant life)

d)Is the interest certain to vest within 21 years of the death of the measuring life? If yes or no, void

3)MBE Shorthand Rule

a)Last person mentioned by proper name, and all prior parties, take

b)Next subsequent person, not mentioned by proper name, takes

c)All additional parties lose and property reverts back to the grantor or grantor’s heirs

4)Bright Line Rules

a)Gifts to an open class conditioned on the members surviving beyond 21 years violates the RAP (bad as to one, bad as to all). Entire class gift is void

b)Executory interest with no time limit is void under RAP

c)Exception: Charity to Charity does not violate RAP

5)Reform Rules

a)Wait and See: Determine the facts as they now exist at conclusion of measuring life

b)90 Year Rule

c)Both: Cy pres applies (as near as possible)—if given disposition violates the RAP, court may reform in a way that most closely matches grantor’s intent while still complying with the rule

d)Both: court will reduce any offensive age contingency to 21 years of age

Concurrent Estates

1)Joint Tenancy

a)Rules

i)Two or more own the estate

ii)Both with right of survivorship: where one joint tenant dies, share passes automatically to surviving joint tenants

iii)Can transfer during lifetime but not devisable or descendible (because the right of survivorship)

b)Creation

i)The Four Unities (T-TIP and the Right of Survivorship)

(1)Time

(2)Title

(3)Interests

(4)Possess the Whole

(5)Grantor must expressly state “the right of survivorship”

ii)Straw Man: Convey to a fake party and have that party convey a joint tenancy back

c)Severance SPAM

i)Sale

(1)Joint tenant can sell or transfer her interest during her lifetime

(a)Buyer becomes a tenant in common because 4 unities are lacking

(b)Joint tenancy remain in tact as to the non-transferring joint tenants

(2)Joint Tenant Enters into Contract with Another for Sale

(a)Severs the joint tenancy

(b)At the time the contract is entered into

(c)Equitable conversion

ii)Partition

(1)By voluntary Agreement: Allowable, peaceful way to end relationship

(2)Partition in Kind

(a)Judicial action

(b)Physical division of property

(c)Must be in the best interests of all parties

(3)Forced Sale

(a)Judicial action

(b)Land is sold

(c)Sale proceeds are divided proportionally

(d)Must be in the best interests of all parties

iii)Mortgage

(1)Minority Title Theory of Mortgages: Execution of a mortgage or lien severs the joint tenancy as to the encumbered share

(2)Majority Lien Theory: Mortgage does not sever the joint tenancy

2)Tenancy by the Entirety

a)Rules

i)Protected marital interest between husband and wife

ii)Right of survivorship

b)Creation

i)Husband and wife become fictitious one person

ii)Right of survivorship

iii)Presumed in any conveyance to a husband and wife unless otherwise clearly stated

c)Co-Ownership Rights

i)Creditors of one spouse can’t touch the tenancy

ii)Unilateral conveyance to a third party cannot defeat the right of survivorship

3)Tenancy in Common

a)Defined

i)2 or more person with

ii)No right of survivorship

b)Three Features

i)Each co-tenant owns an individual part

ii)Each has a right to possess the whole

iii)Each interest is descendible, devisable, and alienable

iv)No survivorship rights

v)Presumption favors tenancy in common

4)Rights and Duties of Co-Tenants

a)Possession

i)Each co-tenant is entitled to possess and enjoy the whole

ii)Wrongful exclusion of another co-tenant is a wrongful ouster

b)Rent from Co-Tenant in Exclusive Possession

i)No ouster

ii)Co-tenant in exclusive possession

iii)Not liable to the other co-tenants for rent

c)Rent from third parties

i)Co-tenant who leases all or part of the premises to third party

ii)Must account to co-tenants with the fair share of rental income

d)Adverse possession

i)General Rule: Adverse possession does not apply to gain the interest of the other co-tenants

ii)Exception: ouster

e)Carrying costs

i)Each co-tenant is liable for fair share of carrying costs

(1)Taxes

(2)Mortgage interest payment

ii)All based upon undivided share that he holds

f)Repairs

i)Repairing co-tenant has the right to contribution for necessary repairs

ii)Must notify the others of the need for the repairs

g)Improvements

i)No right to contribution for improvements

ii)At partition, co-tenant is entitled to a credit equal to any increase in value caused by her efforts

iii)“Improver” bears full liability for any decrease in value caused by her efforts

h)Waste

i)Co-tenant must not commit waste

ii)Co-tenant can bring an action for waste during the life of the co-tenancy (voluntary, permissive, and ameliorative)

iii)Liable on the whole thing

i)Partition (See C.ii Above for Partition Rules): Joint tenant and tenant in common has right to bring action for partition

Landlord/Tenant Law

1)Tenancy for Years

a)Lease for fixed, determined period of time (e.g., one day, one week, one month, 50 years)

b)Termination date is known from the start

c)No notice necessary

d)Term of Years greater than one yearmust be in writing (oral = implied periodic tenancy)

2)Periodic Tenancy

a)Creation

i)Lease for successive intervals until landlord or tenant gives proper notice of termination

ii)Can be created expressly (e.g., week to week, month to month, year to year)

iii)Implied Periodic Tenancy

(1)No mention of duration but provision is made for payment of rent at set intervals

(2)Oral term of years violates statute of frauds and creates an implied periodic tenancy

iv)Holdover

(1)Residential Lease

(2)Landlord elects to holdover a tenant

(3)Tenant wrongfully staying past the conclusion of original lease

(4)Implied periodic tenancy determined by the way rent is now tendered

b)Termination

i)Notice, usually written

ii)At least equal to the length of the period itself unless otherwise agreed

iii)Year to year implied periodic tenancy requires 6 months notice

3)Tenancy at Will

a)Lease for no fixed period of duration

b)Unless otherwise expressly agreed, the payment of regular rent will cause a court to call the leasehold an implied periodic tenancy

c)Tenancy at will may be terminated by either party at any time unless a reasonable demand to quit the premises is typically required

4)Tenancy at Sufferance

a)Tenant wrongfully held over past the expiration of the lease

b)LL gets rent

c)Lasts until LL evicts T or elects to hold T to a new term (then implied periodic tenancy created determined by the manner of payment now tendered)

5)Tenant’s Duties

a)Liability to Third Parties

i)T must keep premises in reasonably good repair

ii)T liable for injuries to third party invitees even if LL expressly promises to make all repairs

b)Duty to Repair

i)Where Lease is Silent

(1)General Rule: T required to keep premises in good repair

(2)T cannot commit waste

(a)Voluntary (destruction)

(b)Permissive Waste (neglect)

(c)Ameliorative Waste (alteration that increase the value)

(3)Fixtures

(a)Affixation to the realty that objectively shows intent to become part of the realty

(b)Examples: heating systems, furnace; customized storm windows; lighting

(c)Removal of a fixture is voluntary waste

(d)T cannot remove even if T installed the fixture

(e)Fixture passes with ownership (goes to LL)

(f)Express agreement controls whether it’s a fixture

(g)Absent agreement, T may remove if removal does not cause substantial harm to the premises

ii)Where T expressly Covenants to Maintain Property in Good Condition During the Lease Term

(1)Common Law: T responsible for any loss to the property including forces of nature

(2)Today: T may terminate the lease if premises destroyed without the fault of T

c)Duty to Pay Rent

i)No Rent and Possession

(1)LL can evict or continue relationship and sue for rent (always gets action for rent even if LL evicts)

(2)LL CANNOT ENGAGE IN SELF HELP

(a)Can’t change locks

(b)Can’t forcibly remove tenant

(c)Can’t remove tenant’s property

ii)No Rent and No Possession (T abandons) SIR

(1)Surrender

(a)Word/action by T that T gives up the leasehold

(b)Abandonment = implicit offer of surrender which LL accepts

(c)If un-expired lease is for more than a year, must be in writing

(2)Ignore

(a)Minority Rule

(b)Ignore the abandonment

(c)Hold T responsible for unpaid rent as if he were still there

(3)Re-let

(a)Re-let premises

(b)Hold T responsible

(c)LL must make reasonable efforts to re-let (mitigation)

6)Landlord’s Duties

a)Duty to Deliver Possession

i)Actual physical possession

ii)If prior holdover is still in possession LL breaches

b)Implied Covenant of Quiet Enjoyment

i)Residential and commercial leases

ii)T has right to quiet use and enjoyment of premises without interference from LL

iii)Wrongful eviction is a breach

iv)Constructive eviction is a breach (SING)

(1)Substantial Interference: LL’s action or failure to act create a “chronic problem”

(2)Notice: T gives LL notice of the problem and LL failed to reasonably respond

(3)Goodbye: T gets the fuck out within a reasonable time after LL fails to correct the problem

v)General Rule: LL is not liable for acts of other tenants

vi)Exceptions:

(1)LL has a duty not to permit a nuisance on the premises

(2)LL must control common areas

c)Implied Warranty of Habitability

i)Residential lease only

ii)Non-waivable

iii)Standard: Premises must be fit for basic human habitation; bare living requirements must be met