Professional Documents
Culture Documents
A life tenant may use the natural resources of the property for
homestay and farming but not for commercial profit unless the
land previously was used commercially
Existing mines or oil wells can be continued but no knew wells
can be opened during a life estate. The same rule applies to the
commercial removal of sand or gravel. If this rule is violated the
remedy for the person possessing the future estate is to sue for
tort of waste seeking money damages for the past waste and an
injunction for the future waste
A life tenant is obligated to pay:
1) The current real property taxes but not any amount that
exceeded the lands yearly rental value
2) Interest only on an existing mortgage
a. If these current assessments on the realty (taxes and
mortgage interest) are not paid and the future
interest is compelled to pay them then the future
interest can recover a money judgment against the
life tenant and the sheriff could sell the life tenants
interest to satisfy the money judgment
b. When a life tenant dies her estate may remove
fixtures that were attached to the realty by the life
tenant. Her estate may also harvest annual crops
that were planted by the life tenant. This is referred
to as the law of emblamence
Fee Simple
A fee simple is the most frequently conveyed realty interest.
At common law to create a fee simple the conveyance to the
grantee had to contain the phrase and his heirs or and his
heirs and assigns if these phrases were omitted only a life
estate was conveyed thus a transfer to X for forever or to X in
fee simple created only a life estate. Today this requirement has
been abolished by statute in 47 states.
There are 3 types of fee simple estates SAD:
o S- a fee SIMPLE subject to a condition subsequent (BOP)
A deed containing a fee simple subject to a condition
subsequent immediately conveys a fee interest but
restricts the future use of the land and also gives the
grantor (his heirs or assigns) a future interest called A
RIGHT OF ENTRY if the condition is violated
Upon a violation the grantor may terminated the grantees
fee interest and go in and BOP the current fee interest
with an ejectment claim
At common law the following 3 BOP words indicated the
existence of a fee simple subject to a condition
subsequent:
To X and his heirs
1) B- BUT if liquor is sold on black acre it reverts to G
or her heirs
2) O- ON condition that the land is used only for
religious purposes
3) P- PROVIDED the land is not used for commercial
purposes
OPE 1 question 3
T died and left a fee interest to his wife W but if W
remarried (a condition subsequent) then the land would
pass to D daughter. If W remarried Ws interest in the land
would end and W would have a right (a claim) for
ejectment to put W off the land
A BOP fee simple is distinguishable from a fee simple
subject to a condition precedent because the fee simple
subject to a condition precedent does not transfer a fee
simple interest to the grantee until the condition
precedent actually occurs
o Ex. O conveyed land to daughter D in a deed upon
the condition precedent the D passed the bar exam
otherwise to my son. D recorded the deed, who
owns black acre? O continues to own the land
subject to the condition precedent in the deed for Ds
ownership.
A-fee simple ABSOLUTE
o A transfer of a fee simple without any conditions imposed
on its future use. It creates no future interest (no
remainder interest, no reversionary interest, or no
executory interest) JGPs house.
D- fee simple DETERMINABLE (SUD)
This transfers a fee interest to the grantee but restricts the
future use of the land but violation of the restriction results
in automatic forfeiture and the fee reverts back to the
grantor. It creates a future interest called a possibility of
reverter. SUD language indicates such a fee interest.
Similar to fee simple subject to condition subsequent but
fee simple determinable is automatic forfeiture
A fee simple determinable requires the use of SUD language
so long as until or during the fee period the land is
used only for religious purposes
Any SUD or BOP language in a prior deed that has been
recorded in the propertys chain of title renders title to that
land unmarketable to any future grantee
Today language more specific than just BOP or SUD must be
used to create a forfeitable conditional fee because the law
does not favor forfeiture of title. Courts attempt to construe
the language as a covenant running with the land rather
than as a condition because breach of a covenant results
only in money damages or an injunction but not forfeiture of
title. NYAA 646
If the court finds a condition was created it will attempt to
construe that language as a condition subsequent (BOP)
Trusts***
Trusts can be set up during the creators life, which is called an
intervivos trust, or it cant be established at the creators death, which
is called a testamentary trust
In NY trust are subject to the rule against perpetuities RAP, but in 24
states perpetual or dynasty trust can be created which allow trust to
be continued for 100 plus years.
Trust Litigation
Most frequently trust litigation arises when a beneficiary
attempts to TIP a NY trust:
LANDLORD TENANT
When realty is leased to a tenant it is treated as the equivalent
of a sale of the property for the term of the lease. At common
law the tenant was obligated to pay rent for the entire lease term
even if the premises were destroyed or the tenant died. Today
this harsh remedy is altered statutorily allowing a tenant to
cancel the lease. A NY residential tenant can always assert a
breach of the covenant of habitability if the residential building is
destroyed (in class question 25 do at home)
Statute of Frauds SMARTFLYS
A lease for a term of longer then 1 year must be in writing signed
by the party to be charged or by her agent whos authority to
sign must be in a signed writing (usually it is placed in a power of
attorney) (See agency lecture 40)
3 different types of tenancy leases:
o 1) Tenancy for years, at least the lease fixes the start
and end of the lease period. This lease starts on march
18, 2014 and expires March 17, 2018. No notice of
termination is necessary to terminate a tenancy for years
because the lease fixes the termination date. This differs
o
o
o
o
Waiver
o A landlords acceptance of rent with knowledge of a tenants
violation of a lease term constitutes a waiver of the tenants
default. Ex. The landlords acceptance of a late payment of rent
or when a landlord did no consent to tenants assignment but
accepted rent payments from the assignee
Federal Fair Housing Act
o This act prohibits discrimination in the sale rental or zoning of
residential housing on the basis of race religion, color, sex,
handicap, family status (mother), or national origin, or people
with disabilities
o Some owned or occupied buildings with no more than 4
residential units are exempt, notices for sale or for rental
indicating this discrimination are unlawful
Express terms in a lease.
o If a lease gives the tenant an option to renew the lease by a
stated date then in multistate this condition must be strictly
construed and a day or week late is too late.
o However, NY allows an equitable renewal but only if the tenant is
in possession even though the tenant is late in exercising the
option provided the tenant has made substantial improvements
on the leasehold with the intent to renew the delay was brief and
the landlord was not prejudiced by the late renewal. NYAA 666
o A lease can expressly provide
1) To limit the tenants use of the premises to a stated purpose
only. It is a material breach for a tenant to use leasehold
other than the stated purpose.
2) To require the tenant to obtain insurance [ex. Fire, liability,
or insurance from terrorist attack]
3) Provide for rent acceleration (an acceleration clause) if
there is a material breach of the lease. Here the landlord
can demand 100% of the future lease payments remaining
in the lease. It is enforceable and it is not considered
unconscionable or punitive especially in commercial leases
where was represented by an Attorney.
a. However, by invoking the acceleration clause cannot
also terminate the lease demand that the tenant
surrender possession for the balance of a lease term.
4) Allowing the prevailing landlord to recover reasonable
attorneys fees if the tenant breaches the lease but the
landlord must substantially (totally). (90% was not
prevailing)
a. In a NY residential lease there is an implied in right
reciprocal law in attorneys fees if the tenant prevails
5) Allowing a tenant a specified time (10 or 20 days) from the
landlords service of the notice of breach for the tenant to
cure the breach.
a. Ex. A tenant performing alterations without the
landlords prior consent. Changing the use of the
leasehold or creating a nuisance such as smells from
a restaurant. If the cure period expires and the court
subsequently finds that the tenant was in material
breach of the lease then the court is powerless to
reinstate the lease of the tenant failed to cure the
violation during the cure period. The tenant by law
becomes a holdover tenant at the expiration of the
cure period.
b. The NY tenants remedy is to commence a declaratory
judgment action in the Supreme Court and move for a
TRO to stay the cure period. This stay preserves the
cure period allowing a tenant to litigate the landlords
claim without forfeiture of the lease provided the
application for the Yellowstone stay was made before
the cure period expired and the tenant can show it
has the ability to cure the breach.
c. However, the following have been found non-curable
breaches:
i. 1) Nonpayment of rent;
ii. 2) Failure to maintain insurance; or,
iii. 3) An assignment or sublet that violates the
lease
6) New York City resident leases the tenant does not have to
move for a stay because the law gives the tenant an
automatic 10-day notice to cure before giving an order of
eviction after the court finds a breach.
Surrender of the lease
If the tenant abandons a leasehold prior to its expiration
date L has 3 options:
1) In NY (minority view) do nothing and sue the tenant for
the unpaid rent under the lease because there is no duty
to mitigate a tenants damages.
a. In MBE a landlord has a duty to mitigate damages
especially for residential tenants. NYAA 658.
2) Accept the tenants surrender and then lease the premises
for the landlords benefit thereby releasing the tenant
from further rent liability.
a. The Landlord will do this where rents have increased
and a landlord can make more money on a new
lease.
3) Release the benefits of the tenants lease and sue for the
difference but only if the lease expressly gives the
landlord this authority
When a written lease has longer than 1 year remaining then
to validly surrender it there must exist a signed writing
signed by the party to be charged with breach of the
release agreement. NYAA 669
1) An exception to this rules is where there is a surrender by a
operation of law arising from the activates of the landlord which
are inconsistent with a continuation of the existing tenancy.
a. Ex. In a written lease L leased a store to T for 4000 a month
for 2 years T paid rent for 8 months then left. L immediately
leased it to X for 3000 a month. Can L sue T for the different
in the 2 rents? No, there existed a surrender by operation of
law when L leased it to X who took possession and control
this created a new L&T relationship inconsistent with a
continuation of Ts original lease
b. If the lease expressly allowed the landlord to re-let the apt
there is no surrender of law and T would have been liable for
the 2 rents.
c. .If T defaulted in paying the rent and refused to vacate. L
sued the tenant and obtained a warrant of eviction and T
Once a mortgage and note are executed then the mortgagee (the
lender) is free to assign (sell) both instruments together. The mortgage
always follows the note when it is assigned an assignment of just the
mortgage without an assignment of the note is a nullity such an
assignee lacks standing (CPLR 3211 a3) to commence a foreclosure
action. A mortgage is merely security for a debt and it cannot exist
independently of the note
A deed based on a forgery is void it is a nonevent in the eyes of the
law. No statute of limitations
A mortgage based on a forged deed is likewise invalid. Many properties
also put second and 3rd mortgages on the property but these
subsequent mortgages are .and if the 1st is foreclosed the 2nd and
third are extinguished
A subsequent alteration in the terms of the first mortgage must be in a
signed writing. If the alteration merely gives the borrower more time to
pay then the subsequent subordinate mortgages are subsequently filed
money judgment liens cannot complain since they are not prejudiced
by the change. However, if the modification increase the interest rate
or amount of the loan then the subsequent liens or mortgages will be
prejudice and will not be bound by such a change and will not have
priority over the earlier mortgages to the extent of the earlier
modifications
The majority position is that mortgages cannot be prepaid unless the
instrument expressly allows prepayment NYAA 681. NY statutorily
exempts residential mortgages and automatically allows prepayment
of residential mortgages
The execution of a mortgage conveys no title but merely creates a lien
on the realty to secure repayment of the mortgage debt. A minority of
jurisdictions recognizes a title mortgagee as compared to a lien
mortgage in which title to the property passes to the bank (mortgagee)
solely as security for the debt. Thus is one joint tenant with the right of
survivorship mortgaged his interest in a title mortgage jurisdiction it
would convert the joint tenancy into a tenancy in common
extinguishing the right of survivorship
If mortgage real estate is transferred by sale, gift, or decedents estate
then it passes title to that grantee subject to the existing mortgage
that grantee does not become personally liable for the payment of that
debt if the mortgage is foreclosed but the original mortgager who
signed the note always remains liable if the debt is not fully paid.
o Under new federal and state laws bona fide residential tenants
whose rent is fair and not substantially below market value are
protected from eviction by the foreclosure purchaser as long as
the rent continues to be paid.
Equitable mortgages.
o An equitable mortgage is a transaction that has the intent but
not the form of a mortgage that equity nonetheless will treat as a
mortgage
o In an effort to circumvent the mortgagors right of the equity of
redemption as well as to avoid the time and expense of a judicial
foreclosure sale, lenders and sellers of real property who
ordinarily would take back a mortgage have created mortgage
substitutes in an attempt to clog or prevent the equity of
redemption in the event of a default.
o To prevent this clogging a deed or k of sale executed to secure a
loan will be treated as a mortgage, which must first be foreclosed
o D was desperate to borrow 50k, D went to N a wealthy neighbor
to borrow money, N proposed one of the following arrangements
to secure the loan:
1)
D would execute a 50k note and simultaneously give N an
option to buy Ds property for a substantially reduced price if
D defaulted. Equity would treat this arrangement as an
equitable mortgage requiring N to foreclose in order to wipe
out Ds equity of redemption.
2)
D gives N a deed to the property to immediately record, or
hold in escrow, if D defaults in payment of the loan. This is
referred to as an equitable mortgage security deed. It is
called a deed in trust when the deed is held in escrow by a 3rd
person.
a. Generally these deeds make no mention of the debt or
of the proposed retransfer back to D when the debt is
fully paid. Equity treats these deeds as mortgages
which must be foreclosed to extinguished Ds equity of
redemption
3)
A third type of equitable mortgage arises when B buyer
finances a purchase price S seller by entering into an
installment sales k permitting B to take possession of the
property while paying off the total purchase price. Execute
deed only when purchase price is paid in full. T
a. The installment sale k generally contain a forfeiture
clause in the event of Bs default which terminates the
contract and allows S to retain all prior payments as
rent or as liquidated damages.
Concurrent Estates
o A concurrent estate exist when 2 or more persons hold a
simultaneous present or future interest in the same piece of
property (not just real property)
o There are 3 types of this plural interest:
o 1) Tenancy in common,
o 2) Joint tenancy; and
o 3) Tenancy by the entirety
o Each cotenant has an indivisible right to possess the entire
parcel even though each owns only a fractional interest. No one
owns any particular portion of the property
o A joint tenant or tenant in common may sell, mortgage, or lease
his undivided right of possession but may not unilaterally sell,
mortgage, or lease the entire parcel or any specific portion of it
to the exclusion of the other cotenants
o Cotenants who obtain their interest from the same document are
fiduciaries of one another thus a cotenant who acquires superior
title to the property at a tax or mortgage foreclosure sale holds
titles for the benefit of the other cotenants provided they
consider their pro rata share of the purchase price
Tenancy in common
Arises where multiple parties concurrently own realty with no
right of survivorship. When one TC dies her interest in the
property passes through her estates and not to the surviving TCs
Joint tenancies
Like TC, JTS each hold an undivided possessory interest but they
also enjoy a right of survivorship. Upon the death of one JT the
decedents interest in the property passes to the surviving JTS
rather than through the decedents estate
Rule: at common law there was a presumption that when
property passed to 2 or more persons who were not married it
passed to joint tenants. Today in every state there is a statutory
presumption that absent specific survivorship language property
passing to 2 or more unmarried persons by sale gift, intestacy, or
will passes to tenants in common.
To create a JT (or TE) 4 unities must exist. PITT:
o P- unity of POSESSION. Each cotenant has an undivided
to possess the entire property
o I- Unity of INTEREST. Each cotenant must have the same
percentage of interest as to the quality and quantity of title
o T- Unity of TIME
o T- Unity of TITLE
Real Property ks
o Caveat emptor or buyer beware requires a buyer to take care
and diligently inquire into the structural and environmental
condition of the property and neighborhood before entering the
real property k
o The caveat emptor doctrine precludes a claim for rescission by
the purchaser for structural or other defects that were:
1) Open and obvious,
2) Discoverable by reasonable inspection of either the
premises or public records and the purchaser has an
unimpeded opportunity to inspect and;
3) Not concealed or hidden by the silent seller
o A seller who makes misrepresentations or fraudulently conceals
defects may not rely on caveat emptor
o An as is clause expressly states that the buyer inspected the
quality fitness and value of the property before signing the k and
that B has not relied on any representations by S. An as is clause
will shield S from a claim of fraudulent misrepresentation but will
not protect S from a claim for fraudulent concealment.
Real Property K
To be enforceable any k defecting an interest in real property
must be in a writing signed by the party to be charged with its
breach or by an authorized agent of that party whose authority
must be expressed in a signed writing
A k may consist of several memoranda which may not all be
signed and which separately may not contain all the essential
terms but when taken together they comprise an enforceable k.
Explicating corporation by reference is not necessary,
Part performance in an oral real property k is an exception to the
statute of frauds to excuse a writing courts will consider 3 types
of PIP performance by the purchaser which much unequivocally
prefer to an agreement to the transfer of realty
o P- buyer PAID the purchase price, in whole, or part
o I- IMPROVEMENTS
o P- taking POSESSION
In NY it is almost impossible to achieve pip part performance
sufficient to take the real property contract out of the statute of
frauds.
Equitable conversion
When a real property k is signed the equity will be specifically
enforced. Equity immediately treats the buyer as the title holder
and converts the sellers interest into personal party this effect
the partys interest in 3 ways
o 1) If the MBE buyer or seller dies, equitable conversion
affects a bequest of real property passing in a will.
Ex. all my realty to X and all my personal property
to Y- if the seller dies the proceeds of the sale pass
to Y under Ss will as personal property. And if the
buyer dies prior to closing then the buyers interest
passes to X under Bs will as realty
Equity treats as done what is meant to be done
In NY if a testator enters a k to sell real property the
k is not revoked in the prior Ts will. Such real
property passes under the will to the named
beneficiary subject tot eh execratory k.
o 2) If the MBE sellers judgment creditor files a judgment in
the county where the seller owns realty after the seller sold
Deeds
A deed is a written instrument signed and delivered by a grantor
to convey title to real property
The signature of the grantor of any real property interest must be
acknowledged by a notary in order to be recorded by a county
clerk. An acknowledgment is not necessary to transfer title and
its absence does not affect the grantees interest as to the
grantor but the inability or failure to record can affect the
grantees interest as to a third person
An instrument recorded without any acknowledgement or with a
defective acknowledgment is not sufficient to give constructive
notice of its contents to a subsequent bona fide purchaser
A forged deed is void and conveys no title. Unlike other fraud
based cases of action a claim against a forged deed is not
subject to a statute of limitations defense
There can be no bona fide purchaser of a forged deed and any
new interest subsequently created are void
Delivery
For valid delivery of a deed the grantor must intend to pass title
immediately by the deed and the grantor must give up dominion
and control of the deed. A deed not properly delivered is a nullity
even if it is recorded by the grantee
If the deed is a gift the AID gift elements must be established:
o ACCEPTANCE by done
o I- INTENT to make immediate gift
o D- Proper DELIVERY of a signed & acknowledged deed
When the grantor intends to surrender title immediately upon
delivery. The law will recognize an escrow delivery to an agent
delivery to the donee. If the escrow agent is the donors agent
then delivery is not complete until the deed is actually delivered
to the done. Thus, if the donor dies, becomes incapacitated or
changes her mind before delivery to the donee then agents
authority to deliver is revoked by agency law. However, if escrow
delivery is to an independent contractor, or the clerk of the
A corrective deed
o The customary record is for the grantor to execute and deliver
to the grantee a new corrective deed in the form originally
intended. The sellers refusal to issue a corrective deed
breaches the covenant of further assurances if such a
covenant was granted in the first deed.
o If a grantee is omitted on a deed or the extent of his interest
is misstated, all grantees otherwise adversely affected by a
new corrective deed must join in its execution
Quick claim deed
o A quick claim deed is the simplest of all deeds. The grantor
covenants only to convey whatever interest he may have. He
simply states that he is quitting any claim to the land. These are
often by adverse possessors to tack there years together to
satisfy the statutory time requirement.
o If a contract makes no mention as to the type of deed to be
delivered at the closing. Then only a quick claim deed need be
tendered
o A k to give only a quick claim deed is supported by consideration
even though the seller in fact has no interest in the realty. If the
seller later requires an interest note that the doctrines of deed by
estoppel and after acquired title do not apply where the deed is
only a quick claim
Special warranty deed, which NY calls a bargain in sale deed
o This covenants only that the grantor has not encumbered the
marketability during his ownership period
General covenant and warranty deed
o In MBE it is usually a warranty deed or full warranty deed. On
MBE its going to be warranty or quick claim
Recording Statutes
o Once an instrument affecting an interest in real property has
been signed, the signatures have been acknowledge by a notary,
and the document delivered the grantee should immediately
record in the count clerk recording office to put the world on
notice of that interest. This protects the grantee where the
grantor subsequently attempts to convey away the same
property
o Recording the instrument provides constructive notice and warns
the subsequent person of the grantees existing interest in the
realty. In the interest in the realty is recorded any subsequent
interest takes subject to that earlier recorded interest
o Recording the deed is not required for the deed to be affected
between the two parties but if the grantee fails to record the
interest the grantee may lose it to a subsequent bona fide
purchaser for value.
o In order to qualify as a bfp and to prevail over a prior recording
interest the subsequent purchaser must: 1) act in good faith in
awarding her interest; 2) pay some new consideration; and 3)
take without notice of the prior interest
o Only subsequent purchasers and mortgagees can rely upon the
recording act. Subsequent judgment creditor who record their
judgments as a lien on real property and pay no new
consideration on their interest. Are not protected and do not
prevail over purchases for value. A judgment creditor is not a
bona fide purchaser
o S conveyed black acre to B. but B neglected to record the deed.
Subsequently J recovered a judgment against S and filed a lien
against black acre even though J was the first to retort. J does not
prevail over Bs unrecorded interest because J is not a bona fide
purchaser who gave value.
o Once recorded a judgment will however, prevail over a
subsequently created interest in the realty because the new
grantee will be charged with constructive notice of the prior
recorded judgment and thus not qualify as a bona fide purchaser
o J records a judgment against P. 8 months later P purchases real
property by taking out a 90k mortgage from B bank. When title
closes on black acre that has priority? The answer is B the bank.
If a judgment is recorded in a county where the debtor owns no
real property and the debtor subsequently acquires titles in that
county then the recorded judgment automatically attaches to it.
If however, the debtor financed the purchase with a purchase
money mortgage then the purchase money mortgage prevails
over the prior recorded judgment even though the mortgagee
Zoning laws exist under the states police power. Zoning permits
municipalities to restrict development density, impose minimum
areas required to build a home, and restrict the use of land to a
particular use (residential, commercial, or industrial)
Zoning seeks to promote safety health and the general welfare
of the community
Rights in the land held by third parties such as easements, CRLs,
mortgages, or judgments render title to that property
unmarketable. An existing violation of a zoning law renders title
unmarketable MBE. However, existing zoning laws limiting the
use of the plans or a change in the zoning law after the k was
signed does not render title unmarketable.
Even though a landowner complies with existing zoning laws she
may never the less be enjoined in her use of the land by:
o 1) The tort of nuisance; or
o 2) Violation of an existing covenant running with the land;
or
o 3) A condition restriction the lands use (BOP or SUD).
If a landowner faces UNREASONABLE HARDSHIPS because of
existing zoning laws then a variance can be requested from the
zoning board of appeals to use the property in a manner that
conflicts with the zoning law. There are 2 types of variances:
o 1) Use variance (to build a gas station or fast food
restaurant on land zoned residential) requires a land owner
to show:
A) The zoning law imposes an undue financial
hardship on the owner so that the entire parcel as
zoned cannot yield a reasonable economic return by
complying with the zoning law.
B) The applicants problems are due to the unique
circumstances of the property and neighboring
properties do not share the same characteristics.
C) Granting the use variance will not substantially
alter the character of the neighborhood to the
detriment of the owners NYAA 696
The zoning board balances the detriment of the
landowner against the detriment to neighborhood
and whether that land as zoned can return a
reasonable economic return for the investment
o 2) An area variance does not seek to change the use of the
property but seeks to decrease the area required by the
zoning law or allowing a structure to be built closer to a
neighbors boundary or higher than the zoning law allows.
Here the court considers ACESS
o
o
o