Land Interests in Property Law
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Questions and Answers

What is a required condition for the exploitation of natural resources by a life tenant?

  • Existing mining rights must be transfered
  • The land must have been previously used for exploitation (correct)
  • The property must be vacant
  • The land must be permanently abandoned

Which doctrine allows a life tenant to continue mining existing resources?

  • Doctrine of Ameliorative Waste
  • Doctrine of Permissive Waste
  • Open Mines Doctrine (correct)
  • Doctrine of Future Interests

What constitutes permissive waste?

  • Failing to preserve the land or handle taxes (correct)
  • Changing the neighborhood significantly
  • Exploiting resources without prior usage
  • Making beneficial changes to the property

In what context is ameliorative waste allowed?

<p>When remaindermen provide consent or value is not impaired (D)</p> Signup and view all the answers

Which type of future interest is automatically created with a fee simple determinable?

<p>Possibility of reverter (C)</p> Signup and view all the answers

What is a characteristic of a vested remainder?

<p>Created in an ascertained person (D)</p> Signup and view all the answers

What distinguishes a shifting executory interest from a springing executory interest?

<p>Shifting divests a preceding estate, springing follows a gap (D)</p> Signup and view all the answers

Which type of future interest cannot follow a fee simple estate?

<p>Vested remainder (A)</p> Signup and view all the answers

What legal theory allows an owner to keep water from flowing onto their land without causing unnecessary damage to others' lands?

<p>Common enemy theory (D)</p> Signup and view all the answers

During the escrow period, what does the buyer hold in terms of property rights?

<p>Equitable title (C)</p> Signup and view all the answers

What occurs if the property is destroyed before closing without fault of the parties involved?

<p>Buyer bears the risk of loss (C)</p> Signup and view all the answers

What is required for a land sale contract to be enforceable?

<p>Written documentation (D)</p> Signup and view all the answers

What type of title is held by the seller until the closing is complete?

<p>Legal title (B)</p> Signup and view all the answers

Which of the following is not classified as a defect impacting marketable title?

<p>An easement known to the buyer (B)</p> Signup and view all the answers

What does the risk of loss relate to during the escrow period?

<p>Equitable title (D)</p> Signup and view all the answers

Under the Uniform Vendor and Purchaser Risk Act, who retains the risk of loss until the legal title is transferred?

<p>The seller (A)</p> Signup and view all the answers

What must a buyer do if they find the title unmarketable at the time of closing?

<p>Notify the seller and provide reasonable time to cure defects (A)</p> Signup and view all the answers

What happens if a buyer fails to notify the seller before the closing occurs?

<p>The implied covenant liability of the seller ends (D)</p> Signup and view all the answers

Which of the following deeds provides no warranties regarding title defects?

<p>Quitclaim deed (D)</p> Signup and view all the answers

What is one of the present covenants found in a general warranty deed?

<p>Covenant against encumbrances (A)</p> Signup and view all the answers

What is required for a valid conveyance by deed?

<p>Written document signed by grantor identifying parties and land (A)</p> Signup and view all the answers

Under which deed does the seller warrant that no title defects have occurred during their ownership?

<p>Special warranty deed (D)</p> Signup and view all the answers

What does the covenant of seisin assure the grantee?

<p>The grantor owns the title and possesses the estate conveyed (D)</p> Signup and view all the answers

If the land description in a deed is left blank, what is the consequence?

<p>The deed is void unless specified later (C)</p> Signup and view all the answers

What type of mortgage allows the mortgagee to obtain title until the mortgage is satisfied or foreclosed?

<p>Title theory (B)</p> Signup and view all the answers

In order of priority, which of the following is paid first from the proceeds of a foreclosure sale?

<p>Expenses of sale (D)</p> Signup and view all the answers

What is a Purchase Money Mortgage (PMM)?

<p>A loan enabling acquisition of the property or improvements (A)</p> Signup and view all the answers

What happens to junior interests when a property is foreclosed?

<p>They are destroyed (D)</p> Signup and view all the answers

What triggers the acceleration clause in a mortgage or note?

<p>A specified event requiring early repayment (D)</p> Signup and view all the answers

What is a fee simple absolute?

<p>The largest possible estate in land with indefinite duration. (D)</p> Signup and view all the answers

Which of the following describes a fee simple determinable?

<p>An estate that automatically reverts back to the grantor if a condition occurs. (B)</p> Signup and view all the answers

What distinguishes a fee simple subject to condition subsequent from other estate types?

<p>The grantor must take action to enforce the termination. (B)</p> Signup and view all the answers

Which statement about life estates is correct?

<p>They are measured by the life of the grantee or another person. (C)</p> Signup and view all the answers

What is voluntary waste in the context of property interests?

<p>An intentional act that decreases the value of the property. (D)</p> Signup and view all the answers

What is the role of a remainderman in a life estate?

<p>To inherit the property upon the death of the life tenant. (B)</p> Signup and view all the answers

What is a life estate pur autre vie?

<p>An estate measured by the life of someone other than the grantee. (B)</p> Signup and view all the answers

What do unreasonable restraints on alienation refer to?

<p>Provisions restricting the sale or transfer of property indefinitely. (C)</p> Signup and view all the answers

What is the status of a deed made to a deceased person?

<p>It is void regardless of the grantee's status. (A)</p> Signup and view all the answers

Which of the following recording statutes protects subsequent bona-fide purchasers?

<p>Race statute. (A)</p> Signup and view all the answers

What is the purpose of a mortgage?

<p>To secure the performance of the obligation of debt repayment. (C)</p> Signup and view all the answers

What does the shelter rule imply?

<p>A grantee from a BFP can prevail against claims of previous conveyances. (D)</p> Signup and view all the answers

What is the meaning of bona-fide purchaser (BFP)?

<p>An individual who pays fair value without notice of previous claims. (D)</p> Signup and view all the answers

What does the equitable right of redemption allow a mortgagor to do?

<p>Pay off the debt or bring the mortgage current before foreclosure. (D)</p> Signup and view all the answers

Which action can a mortgagee take if a mortgagor defaults on a loan?

<p>Foreclosure by sale of the property. (D)</p> Signup and view all the answers

What effect does the cancelation of a deed have on title?

<p>It does not affect the title until a new deed is delivered. (A)</p> Signup and view all the answers

Flashcards

Fee Simple Absolute

The largest possible estate in land, lasting indefinitely.

Fee Simple Determinable

An estate that ends automatically when a stated condition occurs, returning to the grantor.

Fee Simple Subject to Condition Subsequent

An estate that may end if a stated condition happens, but grantor must take action to enforce termination.

Fee Simple Subject to Executory Interest

An estate that automatically transfers to a third party upon a condition.

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Life Estate

An estate that lasts for the lifetime of the grantee.

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Life Tenant Duties

Maintain the property, pay interest on a mortgage, and pay ordinary taxes.

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Waste (regarding property)

A life tenant damaging the property to detriment of future interest holders.

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Restraint on Alienation

Restrictions on the ability to transfer ownership of property, usually deemed invalid unless reasonable.

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Exploitation of Natural Resources

Limited by a prior land use, repair/maintenance necessity, express/implied grant, suitability for exploitation.

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Open Mines Doctrine

Allows existing mining to continue; new mines may be blocked by remainderman.

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Permissive Waste

Failure to maintain land; paying taxes and interest issues.

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Ameliorative Waste

Changes benefiting property; CL prohibited; Modern: allowed if no FMV drop and remaindermen consent/neighborhood changes.

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Possibility of Reverter

Automatic right of grantor if Fee Simple Determinable (FSD) is created

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Right of Reentry

Must be explicitly stated for Fee Simple Subject to Condition Subsequent (FSSCS).

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Executory Interest

Future interest in a third-party; can cut short another estate

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Vested Remainder Subject to Open

Remainder to a group whose members might grow.

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Common Enemy Theory of Water Rights

Landowners have the right to divert water flowing across their land, without liability for damages to others' land, as long as no unnecessary harm is done.

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Reasonable User Theory

Landowners can use water, but their use must balance the benefit of their use against the potential harm to others.

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Impounding Surface Water

Landowners can capture and use surface water on or off their land, so long as they do it without malicious intent.

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Land Sale Process

A series of steps: contract, escrow, closing, and deed transfer for selling land.

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Land Sale Contract (LSK)

A contract to buy or sell land, required to be in writing except for certain exceptions. It must be signed by the party and detail the land and the price.

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Equitable Conversion

During the escrow period, the buyer effectively owns the land, while the seller still holds legal title, with risks shifting to the buyer's equitable ownership.

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Marketable Title

Clean ownership; land free from legal issues at transfer time.

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Marketable Title Defects

Flaws impairing the property's title, like unclear ownership history, liens, restrictive covenants, or easements.

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Waivable Buyer's Defense

A buyer's right to reject a property if the title is unmarketable, which the buyer can choose to waive.

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LSK Enforcement

The process of enforcing a land sale contract (LSK).

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Marketable Title

A property's title is free of defects that could cause legal troubles for the buyer.

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General Warranty Deed

Warranty that the seller and all previous owners had clear title, promising to resolve title issues.

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Special Warranty Deed

Seller's warranty only covers title defects from their ownership.

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Quitclaim Deed

A deed with no warranty, transferring whatever interest the seller might have.

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Merger (Closing)

Land sale contract merges with the deed at closing, changing the legal basis for claiming defects.

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Present Covenants

Covenants in a deed that are breached at the time of transfer, not affecting subsequent owners.

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Lien Theory

Mortgagee (lender) only holds a security interest in the property until foreclosure.

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Title Theory

Mortgagee (lender) gets title to the property until the mortgage is paid or foreclosed, and is entitled to possession.

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Priority of Sale Proceeds

Sale proceeds are first used to pay expenses, then principal & interest, then junior interests in order of recording, and lastly the mortgagor (if any left).

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Purchase Money Mortgage (PMM)

A loan used to buy or improve a property, having priority over other non-PMMs.

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Deficiency Judgment

A personal judgment against a borrower if the foreclosure sale doesn't cover the full amount owed.

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Bona Fide Purchaser (BFP)

A person who purchases property in good faith, without knowledge of any prior claim to that property, and pays valuable consideration.

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Recording Statutes

Laws requiring the public recording of property transactions to protect buyers from undisclosed prior interests.

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Equitable Right of Redemption

Mortgagor's right to pay off a mortgage debt before foreclosure.

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Foreclosure by Sale

Legal process where a mortgage lender sells a property to recover a loan default.

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Shelter Rule

A grantee from a BFP is protected from earlier interests, even if the grantee has notice of them.

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Mortgage

A loan secured by real property; a promise to repay a loan with land as collateral.

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Statutory Right of Redemption

A right, in some jurisdictions, for a homeowner to reclaim property after foreclosure, within a set time period.

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Acceptance of Deed

Presumed if the conveyance is beneficial to the grantee. A deed to a deceased person is usually void.

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Study Notes

Land Interests

  • Present Possessory Estates: Someone has the right to land now, possibly with future rights for others.
    • Fee Simple Absolute: Largest possible estate, indefinite duration.
    • Fee Simple Determinable: Automatically terminates after a specified time; grantor has a possibility of reverter.
    • Fee Simple Subject to Condition Subsequent: Can terminate after a named event; grantor has a right of reentry.
    • Fee Simple Subject to Executory Interest: Automatically transfers to a third party upon the happening of a named event.
    • Life Estate: Lasts for the duration of a grantee's life.
    • Life Estate Pur Autre Vie: Measured by the life of another person.
  • Waste: Wrongful damage to property by someone with a life estate.
    • Voluntary Waste: Intentional damage.
    • Permissive Waste: Failure to maintain property.
    • Ameliorative Waste: Improvements that increase value, but remaindermen object.
  • Future Interests: Rights in property that may arise in the future.
    • Possibility of Reverter: Automatically reverts to the grantor if a condition happens with a Fee Simple Determinable.
    • Right of Reentry: Allows the grantor to retake possession if a condition happens with a Fee Simple Subject to Condition Subsequent.
    • Reversion: Created when the grantor transfers less than a fee simple interest.
    • Executory Interest: Interest in a third party that cuts short a prior estate.
      • Shifting executory interest: Divests a preceding estate.
      • Springing executory interest: Follows a gap or cuts short a grantor's estate.
    • Remainder: Future interest that is created in a third party and takes effect after a prior estate concludes.
      • Vested Remainder: Created in a known person, and not subject to any condition precedent.
        • Subject to Open: Partial divestment to additional persons.
        • Subject to Total Divestment: Vested interest subject to a condition subsequent.
      • Contingent Remainder: Created in someone who can't be determined yet, or subject to a condition precedent.
  • Rule Against Perpetuities: Limits the time that a future interest can vest, to prevent property from being tied up indefinitely.
  • Concurrent Estates and Interests: Multiple people holding rights in a piece of property at the same time.
    • Joint Tenancy: Undivided interest in land with right of survivorship; requires four unities (time, title, interest, possession).
    • Tenancy in Common: Undivided interest in land without right of survivorship; requires only unity of possession.
    • Tenancy by the Entirety: Joint tenancy for married couples, often with difficult severance options.

Other Land Interests

  • Community Property: Property acquired during marriage is typically owned equally.
  • HOAs (Homeowner Associations) / CIDs (Common Interest Developments) / Co-ops (Cooperatives): Shared ownership/governance for property within a development.
  • Adverse Possession: Acquiring title to property by openly and notoriously possessing it for a statutory period, under certain conditions.
    • Actual: Physical occupancy of the land.
    • Open and Notorious: Possession visible to the world.
    • Hostile: Without permission of the true owner.
    • Continuous: Continuous possession for the statutory period.
  • Easements: Non-possessory right to use another's land.
    • Easement Appurtenant: Attached to a specific piece of land (dominant estate) that benefits another piece of land (servient estate).
    • Easement in Gross: Benefits a specific person or entity, not tied to a specific piece of land.
  • Profits à prendre: Right to take resources from another's land.
  • Licenses: Temporary or revocable permission to use another's land, not an interest in the land itself.
  • Real Covenants: Promises regarding use of land; enforceable by subsequent owners if they meet certain conditions.
  • Equitable Servitudes: Similar to real covenants but enforceable in equity; often imposed in subdivisions.
  • Lateral Support: Right of support from adjacent land; protects the stability of land and structures.
  • Subjacent Support: Right of support from below the land; protects against damage from mining or similar activities.
  • Water Rights: Rights to use water that flows across or is on a piece of land; determined by riparian or prior appropriation doctrine.
  • Surface water: water on the surface of the land.
  • Navigable watercourses: Rivers, lakes, or streams used for navigation.
  • Land Sale Contracts: Legal agreement to buy and sell land, with transfers handled later. "Equitable conversion" applies.

Conveyancing

  • Deeds: Required written instrument conveying ownership interests in land.
  • Land Sale Processes: Process generally includes negotiation/contract → escrow period → closing → transfer of property and payment.
  • Marketable Title: Clear and free title to property for purchaser. Buyer can terminate if title is not marketable.

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Description

Explore the complexities of present possessory estates and waste in property law. This quiz covers various types of fee simple estates, life estates, and the implications of waste. Test your understanding of the rights and responsibilities associated with land ownership.

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