Property

What is Property? (Prop)

The worst F***ing subject on the Bar :)

NOTE: This is a test card but it is also a correct answer from my perspective.

Describe Adverse Possession (Prop)

Title to land may be acquired without consent of the landowner by adverse possession if the following elements cane be established by the party seeking to claim title. (EAO uses HELUVA): Hostile (on land w/ no right to be there), Exclusive (excluding others), Lasting (or statutory period - 10 yrs in AZ, 20 at CL), Uninterrupted (kind of continued use the owner would make), Visible (used in a way to put others on notice) & Actual (by the claimant or proxy).

With Adverse Possession is there an instrument to record in order to protect the interest? (Prop)

No. Because of this, the recording statute will not apply and the common law rule of "first in time, first in right" controls.

How much of the property (horizontal) can be acquired by adverse possession? (Prop)

Adverse possessor acquires title only to the land actively possessed.

E.g., if the AP only uses 1-2 acres, that is what the AP would get.

Unless there is Constructive Adverse Possession.

Constructive Adverse Possession (Prop)

AP who enters land under color of title can acquire title to entire parcel described in the deed so long as the AP takes possession to a portion of the parcel.

How much of the sub-surface property rights can be acquired by AP? (vertical) (Prop)

AP acquires title to both the surface and sub-surface unless the sub-surface rights were transferred prior to the entry by the AP.

Note: this is based on the state of title at the time the AP takes possession.

Does an adverse posessor acquire future rights? (Prop)

AP acquires both thepresent and future rights, unless the future interest rights were transferred prior to the entry by the AP.

Ex: One year after AP enters land, the true owner conveys a future interest in the land to R. If the AP remains in possession for the statutory period R's futre interest terminates (as long as the interest was not divided up before AP, the Ad Possessor takes Fee Simple Absolute).

What effect do disabilities have on Adverse Possession? (Prop)

The statute of limitations does not begin to run if the true owner was under some disability to sue when the cause of action first accrued. Typical disabilities are minority (under 18 - also called infant), imprisonment, and insanity.

NOTE: If more than one disability, wait for last of disabilities to be remedied to "start clock"

True or False: Property owned by the government can be acquired by adverse possession? (Prop)

False. Property owned by the government (city, county, state, federal) cannot be acquired by AP.

What are the rights of the property owner (while the AP is in possession)? (Prop)

Before the statutory period ends, the true owner can bring an action in ejectment to remove the AP and a claim for damages. Onced the statutory period ends, the prior owner cannot assert a new new claim for ejectment and damages.

What are the rights of the adverse possessor? (Prop)

Before the statutory period ends, the AP can bring an action in ejectment and seek damages against anyone who enters/injures the property, but not against the owner.

(This makes sense - can't really sue the owner before title is acquired - the land belongs to the owner.)

What is required for land acquired for consideration? (Prop)

A Land Sale Contract

Note: Title to land can be acquired by gift, devise, or inheritance, in which case, a land sale contract is not required.

A land sale contract is subject to the Statute of Frauds. Explain what that means. (Prop)

Either party to the land sale contract may successfully assert the Statute of Frauds as a defense to enforcement of the contract unless a sufficient written memo exists which contains: i) identification of the land (a full legal description is not required); ii) identification of the parties; iii) words indicating a contract existed; iv) signature of party to be charged (claiming no K exists; v) price or terms of payment (if not an all cash sale).

What is the Part Performance exception to the Statute of Frauds? (Prop)

An oral agreement (or insufficient writing) to purchase land is enforceable if before closing (before the deed is delivered) the buyer does at oleast two of the following: i) take possession of the land; ii) pay a part of the purchase price; iii) make substantial improvements on the land.

What are the covenants of implied warranty? (Prop)

Every K contains an implied Warr that the seller will provide marketable title (i.e. the title is reasonably free from doubt) at closing. It need not be perfect title, but must be free of questions that present an unreas risk of litigation. Buyer must notify seller that title is not marketable and give her reas time to cure defects. If seller fails to cure, buyer may rescind, collect damages, obtain spec perf w/ abatement and seek an action to quiet title.

What are some defects that render title unmarketable? (Prop)

a) Title that has less than fee simple absolute; b) property that has buildings or other structures that are an encroachment; c) any mortgages,leases, easements unless they will be discharged at closing or otherwise benefit the property (benefit - look at easement - does it benefit property?); d) existing violations of zoning law, but not local housing code or other municipal ordinance.

When must the buyer assert breach of marketable title? (Prop)

Before the closing. After closing, the buyer must rely on any express covenant of title or other contract defenses like fraud or mistake.

Remember - after closing marketable title merges into the deed.

Time for Performance (Prop)

Courts presume that time is not “of the essence” in real estate contract. Thus, the closing date is not absolutely binding, and a party late in tendering her own performance can still enforce the contract if she tenders performance within a reasonable time.

How can Time be made "of the essence" in a land sale contract? (Prop)

a) use of those words in the contract; or b) notice is provided by one party to the other given within a reasonable time before closing; or (not in lecture but I found this & it makes sense) c) the circumstances indicate that was the parties' intent. Where time is of the essence, the party who fails to tender performance on the closing date is in breach and may not enforce the contract.

What happens when (after the parties enter a land sale contract), the party experiences some loss (fire, earthquake, flood, etc.) or one of the parties dies? (Prop)

The doctrine of equitable conversion determines the rights and obligations of the parties. Risk of Loss: Buyer must bear risk of loss for any damage or destruction (unless intentionally caused by Seller) suffered to property.

Who bears the Risk of Loss after the parties enter a land sale contract? (Prop)

Risk of Loss: Buyer must bear risk of loss for any damage or destruction (unless intentionally caused by Seller) suffered to property. The Seller can force the buyer to perform under the contract terms with no ofset or abatement of the purchase price.

NOTE: If Seller collects insurance proceeds to compensate for loss, the Seller must credit the Buyer by that amount

What happens in the event of the death of the Buyer or seller after the parties have entered a land sale contract? (Prop)

If the buyer dies during the land sale contract, the buyer's estate owes the duty to pay the purchase price (from buyer's personal property) and the buyer's real property devisees/heir will take title to the land.

If the seller dies during the land sale contract, the seller's estate can enforce the contract and the seller's personal property legatees/heirs will receive the purchase price money.

Discuss Covenants of Title. (Prop)

There are two types of deeds on the bar exam: the Quitclaim Deed (which contains no covenants of title) and the Full Warranty or General Warranty Deed (which contains six covenants of title.

Three present covenants: Seisin, Right to Convey, and Encumberances; and three future covenants: Quiet Enjoyment, Warranty, and Further Assurances (see other flashcards for more details on each of these warranties)

What are the three present covenants of title? (Prop)

(1) covenant of seisin: the grantor covenants that she has the estate that she purports to convey. She must have both title and possession at the time of the grant; (2) covenant of right to convey: the grantor covenants that she has the authority to make the grant. Title alone will satisfy this covenant; (3) covenant against encumbrances: the grantor covenants against the existence of physical (i.e. encroachments) or title (i.e. mortgages) encumbrances

What are the three future covenenats of title? (Prop)

cov for quiet enjoyment: grantor covenants that the grantee will not be disturbed in possession by a 3d party’s lawful claim of title; (5) cov of warranty: the grantor agrees to defend against reas claims of title by a 3d party, and to compensate the grantee for any loss sustained by the claim of superior title. Quiet enjoyment & warranty generally considered identical cov.s of title; (6) cov of future assurances: the grantor promises to perform acts reas necessary to perfect title conveyed

Do present or future covenants of title run with the land? (Prop)

Present covenants do not run with the land so that only the grantee who receives the warranty deed can sue for breach of a present covenant.

The future covenants do run with the land so both the grantee who receives the warranty deed and his/her successor grantees can sue for any breach of any future covenant.

Security Interests? (Prop)

Property can be purchased for cash, or with the use of a loan. If the buyer must borrow money to purchase the property, the buyer will give a promissory note and a security interest in the property to the lender. According to the lecture, two types of security interests are tested: i) mortgages, & ii) a deed of trust.

What is a mortgage (mostly in eastern states)? (Prop)

A security interest given by the buyer/borrower to the lender. If the buyer/borrower fails to make payments on the promissory note when due, the lender can initiate a judicial foreclosure action on the mortgage OR a breach of contract action for default on the promissory note.

What is a deed of trust (generally western states)? (Prop)

A security interest given by the buyer to a 3d party (trustee) who acts for the benefit of the lender. If the buyer/borrower fails to make payments on the promissory note when due, the trustee can sell property for lender at a private (non-judicial) sale OR the lender can sue for breach of contract for default on the promissory note.

Under AZ Law what three options are available for both mortgage and deed of trust holders? (Prop)

AZ permits both mortgage and deed of trust holders to seek judicial foreclosure. So, AZ deed of trust holders can elect (1) a private sale (which most people choose b/c it is quicker and cleaner); or (2) a judicial foreclosure; or (3) a breach of contract suit on the promissory note.

What is Acceleration (or what is often called an acceleration clause)? (Prop)

If the promissory note/loan agreement permits, the lender can force the borrower to pay the entire balance of the loan if the borrower is late or defaults on any payments when due.

What is the AZ Law with respect to acceleration? (Prop)

A borrower can avoid acceleration by merely paying all overdue payments (plus costs and fees) if paid by 5pm (1) on the day before the private trustee sale; or (2) if a judicial foreclosure, the daythe judicial foreclosure actiion was filed.

What is Redemption? (Prop)

Once the borrower defaults, he/she has a limited right to cure the default by paying off the debt before the foreclosure sale occurs. This right is called the equity of reemption.

In some states (minority rule), the right to redeem is available for up to 6 months after the foreclosure sale. (This would not be tru for MBE unless facts provide it)

How does AZ Law treat redemption? (Prop)

Redemption is allowed for up to 6 months after the foreclosure sale, but only for judicial foreclosures. Redemption is allowed in AZ before, but not after a private foreclsoure sale of a deed trust.

Can a borrower waive his/her right to redeem? (Prop)

NO. Any provision in a mortgage, deed of trust or promissory note purporting to waive the borrower's right to redeem is void and unenforceable (against public policy). The purported waiver is called a clog on the equity of redemption.

What are the rights of the Senior Interest Holder (First Mortgagee or Holder of First Deed of Trust after a foreclosure sale? (Prop)

Senior secured interest holders prevail over all junior interests and the rights of the borrower (subject to borrower's rights to redemption)

If the proceeds of the foreclsoure sale are not sufficient to pay junior interests, their security interests are extinguished and they have no right to any of the sale proceeds. Note, however, a deficiency judgment for any unpaid balance may be imposed on the bborrower.

What is the AZ Law with respect to deficiency judgments? (Prop)

No deficiency judgments allowed after judicial foreclosure of a purchase-money mortgage of a 1-2 family home on 2.5 acres or less.

No deficiency judgments allowed after a private sale under any deed of trust (purchase money or not) of a 1-2 family home on 2.5 acres of less.

What sort of special protection does a Purchase-Money Mortgagee receive? (Prop)

Lender who loans money used to purchase the property and takes security interest (mortgage or deed of trust) in that same property will always be given first priority, even over prior security interest holders.

What is a Junior Security Interest Holder? (Prop)

A junior security interest holder is anyone who takes a security interest (except a purchase-money mortgagee) later in time than a prior security interest holder.

NOTE: A junior interest holder also has a right to foreclose if the borrower fails to pay on debt owed to the junior interest holder, but anyone who buys at foreclosure of junior interest will take property subject to the senior interest holder's rights.

What defenses can a junior interest holder raise? (Prop)

Redemption or Lack of Joinder

Like the debtor, a junior interest holder has the right to redeem (pay off debt owed to senior interest holders) to avoid being "wiped out" at foreclosure sale brought by senior interest holders.

All parties with ownership or security interests must be joined as parties to a foreclosure action. The security of any secured party not properly joined will not be affected by the foreclosure. (Lack of Joiner Defense)

What is the effect of Transfer (Assumption and Subject To) (Prop)

If the grantee assumes the mortgage debt, the grantee is personally liable (and the grantor/original borrower is secondarily liable).

If the grantee takes the property subject to the debt, then only the property itself is subject to the debt (but the grantor/original borrower remains personally liable).

What requirements must be satisfied for a written deed to be valid? (Prop)

To make a voluntary intervivos transfer of title to land, the transferring partyt must use a valid written deed. A written deed is valid if four requirements are met:

1) Identification of the Parties; 2) Identification of the Land (legal description preferred but not required); 3) Words of transfer of title (convey, give, sell, transfer, deed, etc.); 4) Signature of the Grantor

Under AZ law, there is one additional requirement for a written deed to be valid. What is it? (Prop)

Arizona requires the grantor's signature to be acknowledged/notarized.

What are the signature rules with respect to a written deed? (Prop)

If the grantor does not sign, an agent authorized by the grantor may sign instead so long as (1) the agent signs in the grantor's presence or (2) the agent's authority to sign for the grantor is in writing (power of attorney). ALso, if the grantor is a corporation, the deed must be executed by two officers and bear the corporation's seal.

How does Delivery impact the conveyance of a deed? (Prop)

A deed has no effect unless delivered. Delivery requires words or conduct by the grantor demonstrating the grantor's intent to make a present transfer of ownership of the property to the grantee.

Grantor physically gives deed to grantee: If the grantor actually gives a valid deed to the grantee, there is a presumption of valid delivery.

Explain the impact if the grantor physically gives the deed while making oral contrary or conditional statements? (Prop)

Oral contrary statements admissible to prove no intent to deliver: No delivery exists if the grantor gives the deed to grantee while orally stating the deed has no present effect to transfer ownership.

Oral conditional statements not admissible to prove no intent to deliver: If a ddeed is unconditional on its face, extrinsic (parol) evidence is not admissible to prove the grantor intended the delivery to be efffective only upon the happening of some later event or condition.

What is the effect if the grantor keeps the deed? (Prop)

If the grantor keeps the deed, the presumption is that no delivery has occurred.

What is the effect if the Grantor and Grantee have Joint Control of the Deed? (Prop)

This is not tested often and cases are split. AN example of a situation like this would be when the grantor executes a deed to grantee and then puts the deed into a jointly owned or controlled container like a safe or safe deposit box.

Recording Acts (Prop)

Note: in answer RA = Recording Acts; R'ing = Recording; G-or=Grantor; G-ee = Grantee

If 2 parties w/ valid & properly delivered deeds both claim a competing interest in the same land, the applicable r'ing statute determines which claimant will prevail. RAs generally protect all BFPs from secret interests previously created & provide a mechanism for earlier G-ees to give notice thru recordation. R'ing is not essential to validity of a deed b/t a G-or and G-ee, but can be essential to protect G-ee against a BFP. Proper r'ing gives const notice of conveyance to everyone.

What are the three types of recording statutes? (Prop)

1) Notice Statute

2) Race Statute

3) Race-Notice Statute

NOTE: Arizona has a Notice type statute

What is a Notice Statute? (Prop)

"Every unrecorded conveyance is void as against any subsequent purchaser for value without notice." Under a notice statute, a subsequent BFP (person who pays value and has no notice of the prior instrument) prevails over a prior grantee who failed to record. The key is that the subsequent purchaser had no constructive notice at the time of the conveyance. Under a notice statute, a subsequent BFP is protected regardless of whether she records at all. Arizona has a notice statute.

What is a Race Statute? (Prop)

"Every unrecorded conveyance is void as against any subsequent purchaser for value who records first." Under a pure race statute, whoever records first wins. Notice is irrelevant. Very few states have such statutes.

What is a Race-Notice Statute? (Prop)

"Every unrecorded conveyance is void as against any subsequent purchaser for value without notice who records first." Under a race-notice statute, a subsequent bona fide purchaser is protected only if she takes without notice and records before the prior grantee.

What parties are protected by recording statutes? (Prop)

Only bona fide purchasers are protected from the claims of a prior transferee under notice and race-notice statutes. To be a bona fide purchaser, a person must be a purchaser, without notice (actual, constructive or inquiry) and pay valuable consideration.

Is a purchaser a subsequent party who "paid value" for the property? Explain (Prop)

Yes - anyone who pays value of any kind (money, property, services, or even a promise to pay inthe future, or cancellation of an existing debt)

All statutes protect purchasers. Mortgagees for value are purchasers. Donees, heirs and devisees are not protected because they do not give value. A purchaser under a land installment contract is protected only to the extent of the payments made.

Is a mortgagee a subsequent party who "paid value" for the property? Explain (Prop)

Yes - but only if the mortgagee (lender) gives a loan to the property owner in the exchange at the same time as receipt of the mortgage. No payment of value exists if the loan already existed (i.e., a pre-existing debt) before the mortgage was given to the lender.

Is a judgment creditor a subsequent party who "paid value" for the property? Explain (Prop)

Majority Rule: No - because merely obtaining a judgment is not payment of value under the majority rule.

Minority Rule & Arizona: Judgment creditors are protected under Arizona law the same as any other "purchaser."

Note: If the judgment creditor exchanges his judgment for the property it is considered payment for value.

Are heirs/devisees/donees considered subsequent parties who "paid value" for the property? Explain (Prop)

No. Those who obtain property by gift have not paid value and will not prevail against prior unrecorded conveyances.

What are Actual, Inquiry, and Constructive Notice? (Prop)

Actual notice: requires evidence the purchaser in fact knew (read, was told, etc.) the prior claim exists. Reason to know is not sufficient for actual notice.

Inquiry notice: requires evidence the purchaser would have discovered the prior claim if they had made a reasonable inspection of the property and made reasonable inquiries based on known info.

Constructive notice: requires evidence in the public records ("grantor-grantee" index) of prior clam that a reas search would have revealed

What is an Easement? (Prop)

An easement is a non-possessory interest in land which gives the holder (owner of the dominant land) the right to use the land of another (the owner of the servient land).

An easement holder has the right to use another’s tract of land for a special purpose, but has no other right to possess or enjoy that land. An easement is assumed to be of perpetual duration unless the grant specifically limits the interest.

What is an Appurtenant Easement? (Prop)

An easement is appurtenant if it is intended to benefit land owned by the easement holder. There must be two tracts: the dominant tenement (benefitted tenement) and the servient tenement (tenement subject to the easement). An easement appurtenant passes with the benefitted land regardless of whether is it mentioned in the conveyance. The burden also passes automatically with servient tenement unless new owner is a BFP w/ no actual or constructive notice of the easement.

What is an "In gross" Easement? (Prop)

The holder of an easement "in gross" acquires a right to use the servient tenement independent of her possession of another tract of land. An easement in gross for the holder’s personal pleasure is not transferrable, but one that serves an economic or commercial interest is transferrable.

What are the three ways Easements are Created? (Prop)

An easement can be created by: (1) express instrument; (2) implication; or (3) prescription.

How is an Express Easement Created? (Prop)

An easement is a non-possessory interest in land and subject to the statute of frauds. To create an express easement, a writing describing the location (which part of the land - general descriptionOK), scope (type of use), and duration (forever or some shorter time) and must be signed by the burdened (servient) landowner.

How is an Easement Implied by Necessity Created? (Prop)

An easement will be created by necessity if two requirements are met (COSN):

(1) Common Ownership - the dominant and servient land were previously owned by the same party; (2) Strict Necessity - dominant land is landlocked such that there is no other land access to the outside world)

In Arizona, the courts have recognized an easement by necessity when necessary to provide “reasonable access” to property.

Note: If the necessity later disappears, so does the easement by necessity.

How is an Easement by Grant or Reservation Created? (Prop)

CORNPU - three elements

(1) Common Ownership - same as implied by necessity - dominant and servient land were previously owned by the same party; (2) Reasonable Necessity - easement makes access to outside world, water, etc. much more convenient than without it; (3) Prior Use - continuous and visible use by common owner before parcel divided.

How is a Prescriptive Easement Created? (hint - think adverse possession) (Prop)

A prescriptive easement requires to use to be: (1) open and notorious (visible use, no underground rights); (2) continuous and uninterrupted; (3) hostile or adverse (without the owner’s permission); and (4) continuous - for the statutory period which is 10 years in Arizona (20 yrs @ common law).

What are the rights of an Easement Holder? (Prop)

(1) Use - the easement holder has a right to make a reas use of the easement

(2) Repair - the easement holder has the right and the obligation to repair the easement if injured or damaged

(3) Transfer - appurtenant easement - cannot be transferred unless transferred w/ the conveyance of the dominant estate; in gross easements can transferred without conveyance of any other property (b/c in gross easements have no dominant land) so long as transfer of easement is for a commercial purpose.

What are the rights of the Servient Holder? (Prop)

Enjoin Excessive or Unreasonable Use

Excessive or unreasonable use byt easement holder will not terminate easement, but servient owner can get injunction to enjoin the excessive use. For example, the servient owner can enjoin the dominant owner from using easement to benefit property outside of dominant land.

What Acts of an Easement Holder can terminate an easement? (Prop)

1) Merger

2) Abandonment

3) Release

Note: these are addressed in greater detail on other cards

How is an easement terminated by Merger? (Prop)

If the same person acquires ownership of both the easement and the servient estate, the dominant and servient estates merge and the easement is destroyed. Even though there may be later separation, the easement will not automatically be revived

How is an easement terminated by Abandonment? (Prop)

A long period of nonuse (many years) of the easement plus evidence the easement holder had the intent to abandon (e.g., holder blocked driveway, railroad tore up tracks).

Note: nonuse is not enough - the intent to abandon is key and both must exist

How is an easement terminated by Release? (Prop)

An easement will terminate if the parties enter into an agreement (signed writing if easement is for one year or longer is required to satisfy statute of frauds) whereby the easement holder releases (conveys) his/her easement right to the servient property owner.

What are three ways that the acts of others - servient party or 3rd parties - can terminate an easement? (Prop)

1) Prescription

2) Estoppel

3) Sale to a Bona Fide Purchaser

Note: these are addressed in greater detail on other cards

How is an easement termined by Prescription? (Prop)

To terminate an easement by prescription there must be an adverse, continuous interruption of the use for the prescriptive period which is in 10 years in Arizona.

How is an easement terminated by Estoppel? (Prop)

Note: In answer E = Easement

If the E holder orally or by conduct leads servient holder to reas believe the E holder is releasing E, then the E is terminated. Oral expressions of - or conduct that suggests - an intent to abandon do not terminate an E unless committed to writing (release) or accompanied by action (abandonment). But if the owner of the servient estate changes his position in reas reliance on the representations made or conduct by the owner of the E, the E terminates through estoppel

How is an easement terminated by Sale to Bona Fide Purchaser? (Prop)

If the servient land is conveyed to a purchaser who has no notice of the easement, the easement will terminate. (Possible but unlikely because most easements are visible so a purchaser would be charged inquiry notice of most easements)

What is a Profit in the context of land use? (Prop)

Profits entitle the holder of the benefit to take resources (water, oil, gold, etc.) from the servient estate. Implied in every profit is an easement entitling the benefit holder to enter the servient estate to remove the resources. All of the rules regarding creation, alienation and termination of easements also apply to profits. A profit may be extinguished by surcharge (misuse that overly burdens the servient estate).

What is a License? (Prop)

Licenses are a personal property right that allows their holders to go upon the land of another. It can be oral or written. Unlike an easement, a license is not an interest in land; it is merely a privilege, revocable at the will of the licensor - at any time. A license is personal to the licensee and thus, inalienable. Any attempt to transfer a license results in revocation by operation of law.

What are the exceptions toa license being revocable at will? (Prop)

Note: In answer L=License

1) Estoppel - If a license holder invests substantial money or labor in reas reliance on the license, the license will be irrevocable for a reasonable time.

2) Coupled with an Interest - A L is "coupled with an interest" if the L holder has rightful interest to remove or inspect personal property located on land of the licensor. The L will be irrev as long as "interest" lasts. (ex. A buys B's car. Auto located in B's driveway. A has right to enter B's land for reas time suffic to get car.

In general terms, what do covenants and servitudes give the holder? (Prop)

Covenants and servitudes give the holder the right to impose restrictions on how a landowner may use his/her own property.

How does one determine the label for a covenant, equitable servitude, or implied reciprocal servitude? (Prop)

One must examine whether the restriction on the use the plaintiff is seeking to impose is (1) in writing in the defendant's deed or chain of title and (2) what remedy (damages or injunct relief) the plaintiff is seeking,

Covenants: a writing is req'd & remedy for breach is damages

Equit Serv: writing required & remedy for breach is injunctive.

Implied Recip Serv: No writing req'd; remedy is injunctive

For covenants and servitudes, must the benefit or burden or both run? (Prop)

To determine what req'ments must be met, you must identify who is suing whom. 4 possibilities - see page 22 in the lecture notes for this; the text refers to a diagram that uses four parties so it will not make much sense on this card. Be aware of this step when evaluating what must run with the land.

For Covenants, if the benefit or burden must run, there are four requirements. What are they? (Prop)

Note: In answer C=Covenant; D=Defendant

(PINT) a) Privity (horizontal priv of est req'd for burden to run - no priv req'd for benefit to run); b) Intent: C must have been intended to run w/ land. Words like heirs & assigns or similar req'd at CL - today most states infer it if C T&Cs land c) Notice: D must have notice (act, inq, const) of the C; d) Touch & concern the land: benefit and/or burd of C must T&C land. For dom land, C must incr use & enjoyment. For serv land, C must decr use & enjoyment of land.

How are covenants terminated? (Prop)

Merger: like easements, a covenant will terminate if both dominant and servient land later owned by same party; Release: like easements, a benefited party can (with a signed writing) release burdened party from covenant;

A court will enforce an equitable servitude if what three requirments are met? (Prop)

If benefitted party is seeking injunction to force burdened party to comply w/ terms of covenant, a court will enforce the terms of the covenant as an equitable serv if: a) Touch and Concern (same as covenants on seo card); b) Intent (same as covenants on separate card); c) Notice (same as covenants above)

Note: no horizontal or vertical privity req'd to enforce an equitable servitude

What are the two requirements for an implied reciprocal servitude? (Prop)

Note: in answer Cov=covenant; D=defendant; IRS-implied reciprocal serv; Dev=developer

If there is no written cov in D's deed of chain of title to D's land, but two other elements are present, a court will enforce the terms of the cov as an IRS a) Common Scheme: party seeking enforcement of serv must show building Dev (party who originally owned all lots) intended all parcels in development to be dev'ed in accord. w/ common plan. Dev's intent can be proven by a recorded platte or Dev's oral or written statements to buyers; b) Notice (same as Cov's on other card)

How are Servitudes terminated? (Prop)

a) Merger (same as easements and covenants); b) Laches, waiver, unclean hands: Equitable servitudes and implied recip servitudes are equitable concepts so all equitable defenses apply, including laches (prejudicial delay by plaintiff) and unclean hands (subst inequitable conduct by plaintiff); c) Change in neighborhood: if uses in neighborhood covered by development plan have changed so much since plan created that it makes no sense to continue to enforce, ct will not enforce common scheme

What are Support Rights? (Prop)

Note: in answer P=plaintiff; D=defendant

A landowner is entitled tolateral and subjacent support. If excavation or other activities by an adjoining landowner cause P's land to subside, to recover P must prove: Strict Liab: if P's land was unimproved or would have subsided despite weight of improvement on P's land, D is strictly liable for damages caused by subsidence; Negligence: if no subsidence would have occurred but for the weight of P's improvements, then P must prove D's negligence caused subsidence.

What are the three main types of water rights? (Prop)

Note: AZ and few other western states abide by Prior Appropriation which was not covered in the lecture

1) Riparian water rights

2) Percolating water rights

3) Surface water rights

Note: these are all addressed individually on separate cards

Riparian Water Rights (Prop)

Under the riparian doctrine, the water belongs to those who own the land bordering the watercourse. Riparian rights attach to all contiguous tracts held by the same owner as long as one abuts the water. Riparian owners can only use water in connection to the riparian parcel. Riparian owners may use all required water for domestic purposes and make a reasonable use of water for non-domestic purposes.

Percolating (groundwater) Water Rights (Prop)

The owner of the land can use a reasonable amount for all purposes.

Surface Water Rights (Prop)

Surface water is undesirable. Under thee traditional majority view, the common enemy rule allows an owner to take any protective measures to get rid of the water. There has traditionally been no liability for water damage caused to neighbors.

NOTE: In a growing trend, many jurisdictions prohibit the discharge which would result in unnecessary damage to other’s lands.

What is a What is a Tenancy for Years and how is it created? (Prop)

A tenancy for years results when lease agreement has expressly stated fixed begininning date & fixed ending date. It could be for a duration of several years, but does not have to be - - could be one month lease, one week lease, or even one day lease. The lease term is the fixed term stated in the lease.

A tenancy for yrs terminates automatically on express ending date...no prior notice to terminate by LL or T req'd.

NOTE: A lease for over one year is subject to the statute of frauds.

Periodic Tenancy (Prop)

Note: in answer PT=Periodic Tenancy

A PT only had a fixed beginning date but no fixed ending date. Common example is a month-to-month tenancy. A PT can be created either expressly or by implication. Express: An oral (if one year or less) or written lease expressly stating that tenancy begins on fixed date & continues w/ no definite ending date. Implied: a PT is also created when a tenant holds over w/ LL's consent. New PT created which will be same length as prior term lease - not to exceed one year.

How are all hold over tenancies treated in Arizona? (Prop)

In Arizona, all holdover tenancies (unless a week-to-week room rental) are month-to-month period leases.

What is the term, how is a periodic tenancy terminated, and how much notice required?

Term: determined just like a term of years - whatever term the lease provides

Terminated? A periodic tenancy is only terminated by giving of proper notice

How much notice must be given? Notice must be given in advance as measured by the length of one period - not to exceed 6 months.

EX: LL & T enter into month-to-month PT. LL or T must give at least one month advance notice to terminate.

EX: LL & T enter into year-to-year PT. LL or T must give at least 6 months notice to terminate

What are some key distinctiomn under Arizona Law for periodic tenancies? (Prop)

For resiential (ARLTA) leases: only 10 days advance notice is req'd to terminate a week-to-week PT, but one month advance notice is req'd for a month-to-month lease.

For non-residential leases: only one week advance notice req'd to terminate a week-to-week PT, but 10 days notice req'd to terminate a month-to-month lease.

If notice is given for a Periodic Tenancy, when will the lease terminate? (Prop)

Proper advance notice will terminate lease only at the end of a period. Notice given in the middle pof a period will not termoinate a lease in the middle of a subsequent period, but will be effective to terminate the lease at the end of the subsequent period.

EX: LL & T enter month-to-month periodic lease beginning 6/1. On 9/1, T gives 1-month notice to terminate.Lease terminates on 9/30. If instead T gave one month notice on 9/15, lease terminates on 10/31.

What is a Tenancy at Will (TW) and how is one created? (Prop)

A TW is lease w/ no defined term. Created 3 ways: 1) by express agreement parties could state lease will last only so long as both parties desire. 2) by creation of invalid lease - if lease invalid, either party can term. at any time; 3) LL sells rented prop. to new O who allows old T to stay - T can stay until either T or new O want to term. T's possession or create new lease. The term is as long as both parties want - no fixed ending date. Can term. whenever either party gives notice to term.

What is the Tenant's defense of to rent obligation of Failure to Deliver Possession? (Prop)

LL has duty to deliver full possession of entire lease premises to T at beginning of lease & T has complete defense to rent oblig. if LL fails to do so.

EX: LL & T enter 1-year apt lease. When T attempts to move in, T discovers X (prev T) still living in apt. T has no oblig to pay rent to LL b/c LL failed to deliver possession to T. (LL has duty to remove prior T)

What is Constructive Eviction? (Prop)

Every lease (residential, commercial, industrial, etc.) contains an implied covenant of quiet enjoyment. If LL breaches this covenant, the T may assert the breach as a defense to payment of rent. If breach is material, the T can claim constructive eviction and avoid any future rent obligation.

What three things must a tenant show to assert a constructive eviction has occurred? (Prop)

Note: in answer U&E=use and enjoyment; E=enjoyment

1) a subst interference w/ T's U&E of premises; (lengthy disruptions in utility svcs - no heat in winter, lack of water or electricity) or other serious health safety or E of leasehold defects.; 2) caused by LL; interference w/ U&E must result from something LL did or was resp for (loud noises from other Ts in bldg could be LL's resp if he fails to enforce anti-noise provisions in lease. 3) T moved out w/in reas time. (A T's failure to vacate negates claim that interference suff'ly subst

What is the Implied Warranty of Habitability? (Prop)

By statute or case law, every residential lease contains an impliued warranty that premises will be fit for human habitation. If due to viol of local housing code, the T may (after notice to LL & reas time to cure):

a) move out & term. the lease; or b) remain in possession but hold or reduce future rent payments until viol cured; or c) remain and seek damages (for past rent paid and any property damages); or d) repair the viol(s) & deduct cost from next month's rent.

What are key Arizona Disctinctions with respect to the Implied Warranty of Habitability? (Prop)

a) Damages include both property and personal injury, including mental distress;

b) For resid leases, maximum deduction from next month's rent is greater of $300 or 1/2 of next month's rent

c) For resid leases, the LL has 5 days to cure housing code viol.s affecting health or safety; 10 days to cure other lease oblig breaches

What is Surrender in the context of Landlord Tenant law? (Prop)

If the T offers to convey the leasehold back to the LL, and the LL accepts, the lease terminates and the T has no obligation to pay any future rent owed for balance of lease term.

NOTE: If more than one year remains on balance of lease surrendered, the surrender agreement is subject to the statute of frauds - need a signed writing.

What is Abandonment in the context of Landlord Tenant law? (Prop)

If the T offers to convey leasehold back to LL & LL refuses, the T's moving out is not a defense to future rent owed. But, the LL has a duty to mitigae damages and can only seek damages based on the difference b/t the rent owed & the new rent paid at fair market value (what the re[placement T pays) plus any reas re-renting expenses.

What is the Arizona Law if a Tenant Abandons the leasehold without notice? (Prop)

If (w/o notice to LL) the T is absent for at least 7 days & the rent is delinquent for at least 10 days, & there is no other evidence the T will return to the dwelling (other than T's pers prop left on premises), LL is permitted to seize and (10 days after attempting to notify T) sell any pers prop T left behind.

What happens if the lease premises are damaged or destroyed - through no fault of either LL or T? (Prop)

T may be able to term the lease and avoid liab for future rent.

AZ Law: T may terminate lease only if damage/destruction substantially impairs enjoyment of leased residence.

a) T leases part of bldg: If T only leased a part of a dam'd/dest'd bldg (one store in shopping ctr), T permitted to term. lease & has no oblig to pay future rent.

b) T leases entire bldg: If T leased entire bldg that was dam'd/dest'd, T cannot term. lease & is not excused from rental oblig.

What other general defenses can a T assert in a LL/T situation? (Prop)

A lease is a contract and T may assert any applicable contract defenses (e.g., impossibility, frustration of purpose, etc.) to T's rental oblig.s.

AZ LAW: Both LL & T can term. lease if other commits any material breach of the lease (Note - Maj Rule only permits LL to term. if T commits material breach) Also note that under AZ Law, a LL (after filing a complaint & posting bond) can seize & sell the T's pers prop located in leased premises to make up for unpaid rent.

Is a Landlord permitted to use force to regain possession from the tenant? (Prop)

No - the LL is not permitted to use force to regain possession from the T, even if the T's lease expired or the T is in breach of the lease. The LL must bring a judicial action for unlawful detainer to regain possession.

AZ LAW: In resid leases, the LL must seek a forcible entry and detainer (FED) action to remove a T. An FED action for possession may be brought by the LL if rent is 5 days delinquent after LL gives T a written notice to "quit or pay rent."

What is the Arizona Law for Forcible Entry and Detainer Action? (Prop)

AZ LAW: In resid leases, the LL must seek a forcible entry and detainer (FED) action to remove a T. An FED action for possession may be brought by the LL if rent is 5 days delinquent after LL gives T a written notice to "quit or pay rent."

If a non-resid AZ lease, once the T is 5 days late on rent or has violated a lease provision, the LL can use self-help (LL can "re-enter and take possession") or can seek an FED action.

What is Retaliatory Eviction (RE)? (Prop)

It is a T defense to unlawful detainer. If the LL evicted the T in retaliatiion for the T's good faith report of housing code violations, the LL's suit to evict T will be dismissed.

AZ Law: RE is presumed if LL raises rent, reduces services, or terminates tenancy w/in 6 months of a T report of housing code viol to gov't, compaint to LL about breach of any LL obligations, T joining a T's org, or T complaint to gov't about wage-price law violations.

What is the Arizona Law regarding Security Deposits? (Prop)

For resid leases, security deposits cannot exceed one & a half month's rent. After the tenancy terminates, LL must either (1) refund the security deposit or (2) provide T w/in 14 business days of termination w/ an itemized list of deductions. Failure to timely provide the itemized list gives the T a claim for treble damages (3 times the security deposit amount).

What is the Arizona Law for Attorney's Fees? (Prop)

A residential lease provision providing for atorney's fees must be reciprocal. In an action to seek a forcible entry and detainer, the prevailing party is always entitled to attorney's fees, regardless of contrary or absent provision in the lease.

What are Fixtures? (Prop)

A fixture is a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty. A fixture passes with ownership of the land.

Who is entitled to the fixtures at the end of the lease? (Prop)

Absent an agreement by LL & T to the contrary, T may remove fixtures (i.e. T's attached personal property) as long as removal (1) causes no substantial damage; (2) is removed before the lease ends; and (3) as long as any damage caused by the removal is minor.

NOTE: There is a lengthy comparison on pg 31 of thelecture notes to land sale contracts & the intent of owner controlling. It is too long to fit on a card so I note it here in case you think it is worth reviewing.

What is the Effect of Transfer by the Landlord? (Prop)

After a sale of leased prop, new O takes subj to any existing leases (short of finding that new O purch'd w/o act., inq., or const. notice of the tenancy) & will be entitled to all future rent (all rent due & payable as of date of transfer & beyond). New O will be liab to perform all covenants in lease that he/she either expressly assumes or that run w/ lease. Prior O/LL will remain liab to T for any promises made in lease, & to T's assignees for any promises that run w/ lease

What is the Effect of Transfer by Tenant (tested more often than transfer by LL)? (Prop)

Note: in answer cov(s)=covenant(s)

Liabilities & rights of original T and T's transferees depend on whether T assigned or subleased.

Assignment occurs if T transfers entire balance of lease term to transferee.

A Sublease is any T transferee who receives less than entire balance of term. Sub-L is not in priv of K or estate w/ LL so subleasee has no liab to LL for rent or any other cov(s) in lease. Subleasee is in priv of K (& estate) w/ subleasing T & owes that T duty to pay rent & any other obligs in Sub-L ag.

What is the Effect of Assignment? (Prop)

An assignee is in privity of estate w/ the LL & so will be liab to LL for rent & all other lease covenants that run w/ the lease. NOTE: for all other lease promises other than promise to pay rent, must do a covenant running w/ the land analysis (Touch & Concern, Intent, Notice) to determie if an assignee of T or new LL will be nefited or bound by the other lease covenants (to repair, pay taxes, make improvements, etc.)

What are an Assignee's Defenses? (Prop)

Note: in answer cov(s)=covenant(s)

Assignee can avoid oblig of orig lease covs by (1) assigning rest of lease to another T (or back to original T); or (2) successfully showing that cov does not run (impossible w/ rent, but may be possible to prove other covs do not touch & concern property or perhaps assignee had no notice.)

NOTE: remember that original T remains liab to original LL for all lease covs b/c they are in priv of K. If assignee fails to pay (absent a novation b/t LL & T to release T), orig T is sec'ily liab.

Summarize the Effect of Transfer (Prop)

Original T & original LL will remain liab for covenants in the lease until expressly released.

Assignees of T (& subseq LLs) will be liab for (or have benefit of) promise to pay rent & any other promises in lease that run w/ lease until they assign (sell) to another transferee.

Subleases of T will not be liab to LL for promise to pay rent or any other lease promises

What is the Effect of no-transfer clauses? (Prop)

Courts will enforce "no assignment" or "no sublease" clauses as written. Courts disfavor them so they are strictly construed. If clause only says "no assignment" then T can still sublet. If it only says "no sublease" then T can still assign.

What if the lease requires the landlord's consent before a transfer by the tenant? (Prop)

If the lease requires the LL's consent before a transfer by T, the majority rule allows the LL to withhold consent to assignment or sublease for any reason, so long as not violative of constitutional right (i.e., LL cannot withhold consent based on race, nat'l origin, gender, religion of applicant)

Minority/AZ Rule: If lease allows for T to transfer possession only w/ LL's consent, LL's refusal to consent must be reasonable

What is the effect of the landlord's failure to assert a no-transfer clause? (Prop)

According to the rule in Dumpor's case, if the LL fails to object (accepts rent from new T), the LL has waived the no-transfer clause protection. Once waived, it is forever waived unless expressly reserved (e.g., LL says "I will allow this assignment but only this one time.")

What is a Present Possessory Estate? (Prop)

A present possessory estate gives the holder the right to present ownership.

Fee Simple Absolute (Prop)

A fee simple absolute is the largest estate recognized by law. It can be sold, divided, devised or inherited and has an indefinite or potentially indefinite duration. Today, a fee simple is presumed if a conveyance is unqualified.

Ex: "A to B"

Fee Simple Determinable (Prop)

A fee simple determinable terminates upon the happening of a stated event and automatically reverts to the grantor. It is created by durational language such as “for so long as, “ “while,” “during,” or “until.” A fee simple determinable may be conveyed but the grantee takes subject to the estate’s being terminated by the specified event. The possibility of reverter retained by the grantor is a reversionary future interest and is transferable, descendible and devisable.

Fee Simple Subject to a Condition Subsequent (Prop)

A fee simple subject to a condition subsequent is an estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event. The estate is created by conditional words such as “upon condition that,” “provided that,” “but if,” and “if it happens.” The right of entry must be expressly retained by the grantor and some courts hold that it is not transferrable inter vivos, but most courts hold that it is devisable and all states agree that they are descendible

What happens if there is a failure to expressly reserve the Right of Entry in a Fee Simple Subject to a COndition Subsequent? (Prop)

Unlike the possibility of reverter that is automatically included in every fee simple determinable, the right of entry must be expressly stated. If not, the conditional language in the conveyance is interpreted as a covenant and will not create a fee simple subject to a condition subsequent.

Fee Simple Subject to Executory Interest (Prop)

Note: in answer term.s=terminates

If a fee simple estate term.s upon happening of certain event & then passes to 3d party rather than reverting to grantor or giving grantor a right to terminate, 3d party has executory interest. Can be created using durational or conditional language. Ex: O conveys land "to A on condition that (or so long as) liquor is not served on premises w/in next 20 yrs, & if it is, then to C." If A serves liquor w/in next 20 yrs, A's fee interest will automatically term. & title will pass to C.

Life Estate (Prop)

A present possessory interest that lasts as long as the measuring life. The measuring life can be the life of the grantee ("to A for life") or the life of another life ("to A for the life of B"). The holder of a life estate cannot transfer a greater interest (more possessory time) than they possess and, unlike fee interest holders, are subject to the duty to avoid waste.

What happens if an individual/grantee with a life estate attempts to transfer a greater interest? (Prop)

Assume O conveys "to A for life, remainder to B," A then gives a 10 year lease to T, then A dies before end of 10 year lease. B does not have to honor T's lease for the remainder of the 10 year lease because A could not transfer to T any more than what A owned. A's life estate and the interests in the property of all A's transferees terminated at A's death.

Explain the duty a holder of life estate has to avoid wate. (Prop)

All tenants (life, term of years, periodic, etc) have a duty to avoid waste. Waste occurs when the property interest of the future interest holder (remainder holder or reversion interest of landlord) is injured due to acts or omissions of the tenant.

What are the three types of Waste? (Prop)

1) Affirmative Waste

2) Permissive Waste

3) Ameliorative Waste

What is Affirmative Waste? (Prop)

Affirmative or voluntary waste is the exploitation of natural resources by a life tenant and is limited to situations when: (1) it is necessary to the repair and maintenance of the land; (2) the land is suitable only for such use; (3) it is expressly or impliedly permitted by the grantor. Under the open mines doctrine, if mining was done on the land prior to the life estate, the life tenant can continue mining but is limited to the mines already open.

What is Permissive Waste? (Prop)

Permissive waste occurs when life tenant fails to protect or preserve the land. A life tenant is obligated to: (1) preserve the land and structures in a reas state of repair; (2) pay interest on mortgages (not principal); (3) pay ordinary taxes on the land; (4) pay special assessments for public improvements of short duration. A life tenant is not obligated to insure premises for the benefit of the remaindermen and is not responsible for damages caused by a third-party tortfeasor.

What is Ameliorative Waste? (Prop)

Ameliorative waste is a change that benefits the property economically. A life tenant may alter or demolish existing buildings if: (1) the market value of the future interests is not diminished; and either (2) the remaindermen do not object; or (3) a substantial and permanent change in the neighborhood conditions deprives the property in its current form of reasonable productivity or usefulness.

What is the remedy for waste?

The future interest holder is entitled to injunctiove relief to stop the waste or damages (if a vested future interest holder).

What is a Future Interest? (Prop)

A future interest gives its holder the right or possibility of future possession in an estate. It is a present legally-protected right in property. There are 5 types of future interests. Three are created in the grantor (possibility of reverter, right of entry, & reversion) and two are only created in partiues other than the grantor (executory interest and remainder).

What is Possibility of Reverter? (Prop)

A future interest created in the grantor following a fee simple determinable.

NOTE: Need not be expressly mentioned in the conveyance. It is always implied when a grantor conveys a fee simple determinable. It is a reversionary future interest - it is transferable, descendible and devisable.

What is Right of entry (or re-entry)? (Prop)

The right of entry follows a fee simple subject to a condition subsequent and must be expressly retained by the grantor (expressly mentioned in the conveyance). Some courts hold that it is not transferrable inter vivos, but most courts hold that it is devisable and all states agree that they are descendible.

What is a Reversion? (Prop)

A future interest created in the grantor following a life estate or lease. It arises by operation of law. It does not have to be expressly reserved. A reversion is alienable, devisable and inheritable. Its holder can sue for waste and for tortious damage to the reversionary interest. All reversionary interests are vested and thus not subject to the Rule Against Perpetuities.

What is an Executory Interest? (Prop)

A future interest created in a third party (not the grantor) that follows a fee - it cannot follow a life estate.

What is a Remainder? (Prop)

A future interest created in a third party (not the grantor) that follows a life estate if created in the same instrument as the life estate.

Ex: O conveys "to A for A's life, then to X." A has a life estate & X has a remainder.

Ex: O conveys land "to A for A's life." The next day, O conveys "all his interest in the land to X" in a 2nd deed. X doies not have a remainder - instead X has O's reversion (in fee simple absolute).

What is a Contingent Remainder? (Prop)

A remainder is contingent if either (1) the remainder holder is unascertainable (e.g., not alive at time of conveyance), or (2) there is an express condition precedent that must occur before the remainder holder is entitled to possession.

What is an example of a Contingent Remainder? (Prop)

O conveys land "to A for A's life, then to A's oldest surviving child." Even if A has children at time of conveyance, there is no way to ascertain which of them might survive A and which of them will be the oldest surviving child. Moreover, there is an express condition precedent to any child taking the reaminder - he or she must survive A. Thus, a contingent remainder exists in whichever of A's children that is the eldest survivor at A's death.

What is a vested remainder? (Prop)

A remainder is vested if conveyed to an ascertained person & not subject to any express condition precedent.

Ex: O conveys land "to A for life, then to B. B has a vested remainder because B is an ascertained person & there are no express condition precedent to taking his interest.

NOTE: if a reaminder is vested, death of remainder holder prior to end of life estate does not terminate remainder. At death, remainder interest becomes part of estate of remainder holder.

What is a Vested Remainder Subject to Open (Class)? (Prop)

This is a vested remainder created in a class of persons but is subject to diminution by the birth of additional persons who will share in the remainder as a class.

What is the Doctrine of Merger? (Prop)

When one person acquires all of the present and future interests in land except a contingent remainder, under the common law, the contingent remainder is destroyed. If a life estate and the next vested interest were created in the same instrument, there is no merger.

Rule Against Perpetuities (RAP) - the Rule itself? (Prop)

No interest in property is valid unless it must vest if at all not later than 21 years after some life in being at the creation of the interest. If there is any possibility that an interest may vest more than 21 years after some life in being the interest is void.

AZ Law: Arizona has a "wait and see" RAP that provides that a nonvested property interest is invalid unless within 500 years after the interest is created it vests or terminates.

To what does the Rule Against Perpetuities Apply? (Prop)

The rule applies to (COVERP) i) Contingent remainders, ii) Options to purchase (not attached to a leasehold), iii) Vested remainders subject to open, iv) Executory interests, v) Rights of first refusal and vi) Powers of appointment.

What interests are not subject to RAP? (Prop)

Present interests (all fee interests and all life estates or tenancies), and the two future interests created in the grantor (reversions and rights of entry), and all vested remainders are not subject to RAP.

What are Common Trigger Words for RAP? (Prop)

Future interests given entities having perpetual life (e.g., corporations, charities, etc.), or to persons who may not come into existence until everyone else named in the conveyance has died (e.g., widows, widowers, heirs, assigns, devisees, and grandchildren) will often violate RAP.

What is a Restraint on Alientation? (Prop)

A restraint on alienation is a clause in the conveyance that restricts the grantee's ability to freely transfer the land. There are two basic types: 1) Total restraints on alienation; and 2) Partial restraints on alienation.

Total Restraints on Alienation (Prop)

A complete bar on a fee simple absolute owner's ability to transfer the land is void. A complete bar on a less than fee simple absolute owner's (e.g., life estate, future interest or leasehold tenant) ability to transfer is valid.

Partial Restraints on Alienation (Prop)

A partial restraint is valid if reasonable. A partial restraint is reasonable if effective for a limited time and for a reasonable purpose.

What are the Three Types of Concurrent Estates? (Prop)

1) Joint Tenancy with right of survivorship

2) Tenancy in Common

3) Tenancy by the Entireties

Joint Tenancy with Right of Survivorship (Prop)

Note: in answer JT= Joint Tenancy or Joint Tenant(s)

A JT is a form of conc. ownership of land w/ a right of survivorship; when one JT dies, the property is freed from her conc. ownership. To create a JT requires the four unities (T-TIP): (1) time; (2) title; (3) interest; and (4) possession. Each CoT’s interest must be equal in every way. They must be identical interests, created at the same time, by same instrument with same right of possession. All interests in a JT must be equal shares. In AZ, to create a JT the word survivorship must be used

What is the key feature of a Joint Tenancy and what is its effect? (Prop)

If a joint tenant (JT) dies, their interest passes automatically to the surviving JT(s)s. Decreased JT's will or other testamentary instruments will have no effect on joint tenancy property

Severance of Joint Tenancy (Prop)

If a joint tenancy is severed, the severed interest becomes a tenancy in common. A will, contract of sale, or lease executed by a joint tenant will not sever the joint tenancy. A conveyance, murder (one joint tenant kills the other), and (in some jurisdictions) a mortgage will sever the joint tenancy.

How does a mortgage sever a joint tenancy (assuming it occurs in a jurisdiction that allows mortgages to sever joitn tenancies)? (Prop)

Amortgage given by a joint tenant will sever the joint tenancy in a title theory jurisdiction (minority rule) but not in a lien theory jurisdiction (majority rule). Assume the lien theory on the MBE unless the question idicates it is a title theory jurisdiction.

AZ Law: Arizona is a Lien Theory state.

Check out this example of severance of a joint tenancy (Prop)

Assume A & B own property in a JT w/ rt of survivorship. A gets a loan from Bank and gives Bank a mortgage on the property. Who owns the property?

In a title theory state, A and B own as tenants in common.

In a lien theory state, A and B own as joint tenants with right of survivorship.

Assume A dies w/o paying off loan. What happens to Bank's mortgage? Does Bank still have a mortgage on property? Yes, in a title lien state, but only on A's 1/2 T in C interest. No in a lien theory state.

Tenancy in Common (Prop)

A tenancy in common is a form of concurrent ownership with no right of survivorship. Tenants can hold different interests in the property, but each is entitled to possession of the whole. Interests are alienable, devisable and inheritable. Multiple grantees are presumed to take as tenants in common and not joint tenants. Only unity of interest required is unity of possession - all Ts in C must have equal right of possession.

Tenancy by the Entireties (Prop)

A tenancy by the entirety is a marital estate akin to a jt tenancy. In CL jurisdictions, it presumptively (minority rule) arises b/t a husband & wife. Only death, divorce, mutual agreement or execution by a jt creditor of both the husband & wife can sever a tenancy by the entirety. An individual spouse cannot convey or encumber tenancy by the entirety property. A deed or mortgage executed by only one spouse is ineffective.

AZ Law: AZ does not recognize tenancy by the entireties.

What are the Rights and Liabilities of Cotenants (joint tenants & tenants in common)? (Prop)

a) Possession: all cotenants have equal rights to possess the entire property.

b) Profits, Rents, & Minerals: A cotenant may keep any profits earned from their own efforts running a business on the property (absent ouster), but mujst share any rents received or revenue from minerals or other natural resources taken from land that reduce its value.

c) Expenses: There are two areas for this - Mortgage, repairs and taxes; AND Improvements.

See other flashcards for more detail on the expenses

In the context of the liability to cotenants for expenses, discuss what obligation a cotentant has for Mortgage, Repairs and Taxes. (Prop)

Each cotenant must pay their share of mortgage payments, necessary repairs and taxes owed on the property. Any cotenant who pays more than their fair share can compel contribution from the non-paying cotenant(s) in a partition action (to force a split or sale of the property) or in an independent action for an accounting.

In the context of the liability to cotenants for expenses, discuss what obligation a cotentant has for Improvements. (Prop)

A cotenat has no obligation to help pay for improvements or unnecessary repairs. However, the improving tenant who pays all or more than their share of the cost of the improvement may seek reimbursement for any increase in value in a partition action.

Property

Law 777 with Sutton at Arizona State University - Tempe

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