New York Bar Exam Real Property Revision Notes (COMPLETE)


New York Bar Exam Real Property Revision Notes (COMPLETE)

These New York Bar Exam Real Property Revision Notes (COMPLETE) were prepared by a foreign student who passed the NY Bar exam with a high mark. Enjoy! As the notes were copied and pasted directly from the original word document, some of the formatting may have been lost.

REAL PROPERTY

 

I ESTATES IN LAND

 

PRESENT POSSESSORY ESTATES

 

Interest that gives the holder the right of present possession

 

Fee Simple Absolute

  • Largest estate
  • Can be sold, devised, divided or inherited
  • Presumed in the absence of express contrary intent

 

Defeasible Fees

 

Fee simple estates that can be terminated upon happening of stated event (uncertain or infinite duration).

 

Fee Simple Determinable

 

  • Terminates upon happening of stated event and automatically reverts to grantor
  • Created by durational language (for so long as, while, during or until)
  • Can be conveyed
  • Statements or motive or purpose NOT determinable fee (for purpose of / to be used for)
  • Grantor automatically retains possibility of reverter
  • Future interest: Reverter is transferable, descendible and devisable

 

Fee Simple Subject to Condition Subsequent (right of entry)

 

  • Grantor reserves the right to terminate upon happening of stated event
  • Conditional words (provided, upon condition that, but if, but if it happens that)
  • Future interest: right to terminate is called “right of entry”- must be expressly reserved devisable and descendible.

 

Distinguishing factor: Forfeiture optional at grantor’s election, not automatic

 

Fee Simple Subject to an executory interest

 

  • Fee simple terminates upon the happening of stated event (1 of preceding 2)
  • Passes to third party rather than reverting to grantor or giving grantor right to terminate
  • Third Party has executory interest

 

Fee tail

 

  • Inheritability is limited to linear heirs
  • “To A and heirs of his body”
  • Abolished

 

Life Estate

 

  • Measured by life or lives of one or more persons
  • Usual measure- “life of grantee” (to A for life)
  • Life estate pur autre vie (life of another)- measured by life other than grantees (to A for life of B)

 

 

# Rights and duties of life tenant:

 

  • Entitled to ordinary use and profits of land
  • Cannot do anything that injures interests of remainderman or reversioner
  • Future interest holder may sue for damages

 

Affirmative Waste (Voluntary Waste)- Natural Resources

 

Exploitation of natural resources by life tenant is limited when:

 

  • Necessary for repair or maintenance of land
  • Land suitable only for such use
  • Expressly or impliedly permitted by grantor
  • Open Mines doctrine” is mining done on land before, tenant can continue mining but subject to mines already open

 

Permissive Waste

 

  • Occurs when life tenant fails to do something
  • Not responsible for damages by 3rd party tortfeasor

 

Life tenant obligated to:

 

  • Preserve the land and structures in reasonable state of repair
  • Pay interest on mortgages/ ordinary taxes on land

 

Ameliorative waste

 

Change that benefits property economically

FUTURE INTERESTS

 

  • Possibility or right of future possession
  • Present- legally protected right in property

 

1 Reversionary Interests- future interests in transferor (grantor)

 

# Possibilities of reverter and right of entry

 

Possibility of Reverter v. Right of Entry
 Possibility of reverterRight of Entry
Present InterestFee Simple DeterminableFee Simple subject to condition subsequent
ExampleTo A so long as alcohol is not consumed on the premises“to A on condition that if alcohol is used on premises, O shall have right to re-enter and retake premises
Rights of grantorEstate automatically reverts to grantor upon occurrence of stated eventEstate does not revert automatically: grantor must exercise his right of entry
AlienabilityTransferable, descendible and devisableDescendible and devisable

 

 

# Reversions

 

  • Reversion= estate left in grantor who conveys less than she owns
  • conveys to A for Life
  • has reversion

 

 

2 Remainders- Future interest in Third Party

 

  • Remainder= future interest in a third
  • can become possessory on natural expiration of preceding estate.
  • Cannot divest prior estate and cannot follow a time gap
  • Must be expressly created in preceding possessory estate
  • g. to “A for life then to B and his heirs”

 

# Indefeasibly Vested Remainder

 

  • Created in existing and ascertained person
  • Not subject to a condition precedent
  • Not subject to diminution or divestment
  • Remainderman has right to immediate possession upon normal termination of preceding estate

 

# Vested remainder subject to open

 

  • Created in a class of persons certain to become possessory “children”
  • Subject to diminution (more children may be born- expands class)
  • Remainderman “open ended”

 

# Vested remainder subject to total divestment

 

  • Vested remainder subject to conditions subsequent
  • conveys to A for life then to B and his heirs, but if B dies unmarried, then to C and his heirs

 

 

# Contingent remainder

 

  • 1 Created in unascertained or unborn persons
  • 2 Or subject to condition precedent

 

2 Subject to condition precedent

 

Condition that must be satisfied before remainderman has right to possession

 

O conveys to A for life then to B and his heirs if B marries C.

B’s remainder contingent- must marry C before can take possession

 

1 unascertained or unborn persons

 

The remainder is contingent because until remainderman is ascertained no one is ready to take possession when preceding estate ends

O conveys to A for life, then to children of B. If B is childless at the time, remainder is contingent.

 

Destructibility of contingent remainders

 

  • Contingent remainder destroyed if it failed to vest before upon the termination of preceding freehold estate.
  • conveys to A for life, then to B if she reaches 21. If A dies before B reaches 21, B’s remainder is destroyed.

 

  • Most states have abolished destructibility rule

 

Related Doctrine of Merger

 

Clarify

 

# Rule in Shelley’s Case

 

  • Rule against remainders in grantees heirs
  • At common law, if same instrument created life estate in A and gave remainder only to A’s heirs- the remainder wasn’t recognised and A took life estate and remainder.
  • Abolished in most states

 

# Doctrine of worthier title

 

  • Rule against remainders in Grantor’s Heirs
  • Reversion in grantor
  • grants Blackacre to A for life, then to the heirs of O- A has life estate and O has reversion
  • Applies only in inter vivos transfers (O cannot have heirs until dies)
  • Word “heirs” must be used
  • Rule of construction

 

Common Law Rules
 Destructibility of contingent remaindersRule in Shelley’s caseDoctrine of Worthier Title
RuleContingent remainders destroyed if not vested at time of termination of preceding estateA remainder in a life of tenant-grantee’s heirs is deemed to be in the life of tenant herself.A remainder in grantor’s heirs is ineffective so grantor has reversion
ExampleTo A for life, remainder to A’s children who reach 21To A for life then to A’s heirsTo A for life, then to my heirs at law
ResultIf A has no children who are at least 21 at time of her death, property reverts to grantorA has a fee simpleA has a life estate, grantor has a reversion
Modern StatusAbolished in Most jurisdictionsAbolished in most jurisdictionsRule of construction only
Modern ResultProperty reverts to grantor, A’s children have a springing executory interestA’s heirs have a contingent remainderGrantor’s heirs have a contingent remainder

 

 

3 Executory Interests

 

  • Future interests in third parties
  • Either divest transferee’s preceding freehold estate (“shifting interest”) OR
  • Follow a gap in possession or cut short grantor’s estate (“springing interests”)

 

  • Grant from O to A and his heirs when A marries B- A has springing executory interest because it divests grantor’s estate
  • Grant from O to A for life, then to B and his heirs, but if B predeceases A, then to C and his heirs- C has shifting executory interest- divests transferees preceding estate.

 

 

*If a third party’s interest does not follow the natural termination of the preceding estate, must be an executory interest, remainder cannot follow a fee simple estate.

 

# transferability of remainders/executory interests

 

# class gifts

 

  • “class” group of persons having a common characteristic (children).
  • Share of each member determined by number of persons in class.
  • Class gift of a remainder may be vested subject to open (at least one group member exists) or contingent (all group members unascertained)

 

Rule of convenience- when class closes

 

  • Under rule of convenience, in the absence of contrary intent, a class closes when some member of the class can call for distribution of her share of the class gift

Survival

 

FUTURE INTERESTS IN TRANSFEREES
Future interestsExampleAlienabilitySubject to rule against perpetuities
Indefeasibly vested remainderTo A for life then to BTransferable, descendible and devisableNo
Vested remainder subject to total divestmentTo A for life, and on A’s death, to B but if B predeceases A, then to C (B has a vested remainder subject to total divestment)Transferable, descendible and devisableNo
Vested Remainder subject to OpenTo A for life, then to A’s children in equal sharesTransferable, descendible and devisableYes- as long as class remains open
Contingent RemainderTo A for life, then to B if B marries C  OR To A for life, then to A’s surviving childrenTransferable in most states (not common law), descendible and devisableYes
Shifting Executory InterestTo A for life, remainder to Band her heirs, but if B predeceases A, then to C and his heirs (C has shifting executory interest)Transferable in most states (not common law), descendible and devisableYes
Springing Executory InterestTo A when and if he becomes a doctor  OR To A for life, then two year’s after A’s death, BTransferable in most states (not common law), descendible and devisableYes

 

 

 

 

 

4 Trusts

 

  • Trust is fiduciary duty with respect to specific property (res)
  • Trustee holds legal title to property subject to enforceable equitable rights in a beneficiary
  • Creator of trust= settlor – must own the property at the time of trust creation + intent to create trust
  • RAP applies to equitable future interests of beneficiaries in private trust
  • Trust can be created by will, inter vivos transfer of trust res or intervivos declaration that settlor is holding property in trust
  • All trusts of real property must be in writing
  • Settlor may bequeath (by will) property to trust created during his lifetime (“pour it over into trust”)

 

5 RULE AGAINST PERPETUITIES

 

  • Interest in property must vest no later than 21 years after some life in being (“measuring life”) at the creation of interest
  • If any possibility that interest may vest more than 21 years after a life in being- interest void

 

Applies to:

  • Contingent remainders
  • Executory interests
  • Vested remainders subject to open
  • Options to purchase
  • Right of first refusal
  • Powers of appointment

 

Interest vests when it becomes:

  • Possessory
  • Indefeasibly vested remainder
  • Vested remainder subject to total divestment

 

[come back to this]

 

 

CONCURRENT ESTATES

 

Held by several persons

All have a right of enjoyment and possession of land

 

1 Joint tenancy

 

Right of survivorship

 

# Creation

 

  • 4 unities requires
  • PITTA

 

  • Possession (same right to possession)
  • Interest (identical interest)
  • Title (same instrument)
  • Time (same time)
  • Apple

 

  • There must be clear expression of survivorship, otherwise it is presumed to be a tenancy in common

 

# Severance

 

Inter vivos conveyance

 

  • Destroys joint tenancy
  • Transferee takes as tenant in common

 

  1. Tenancy by entirety

 

Marital estate akin to joint tenancy

Can be severed only by:

 

  • Divorce
  • Mutual agreement
  • Execution by joint creditor of both husband and wife

 

Individual spouse cannot convey or encumber tenancy by the entirety property.

 

3 Tenancy in common

 

Concurrent estate with no right of survivorship

Tenants can hold different interests in property but each entitled to possession of whole

Interests are alienable, devisable and inheritable

 

4 Rights and Duties of co-tenants

 

# Possession

 

  • Each co-tenant has right to possess all portions of property
  • No right to exclusive possession of any part
  • Co-tenant cannot bring possessory actions unless “ousted

 

# Rents and profits

 

  • Must share net rents from third parties & net profits gained from exploitation of land (mining)

 

# One concurrent owner encumbers property

 

  • Joint tenant or tenant in common may encumber her interest but not that of other co-tenants

 

# Remedy of partition

 

  • Co-tenant has right to judicial partition
  • In kind (division of land among co-tenants)
  • Sale & division of proceeds

 

 

# Expenses for preservation of property – Contribution

 

Repairs

 

  • Co-tenant who pays more than her pro rata share of necessary repairs is entitled to contribution (notify)

 

Improvements

 

  • No right to contribution

 

 

CONCURRENT OWNERSHIP
TYPE OF TENANCYDEFINITIONCREATIONTERMINATION
Joint TenancyEach tenant has an undivided interest in whole estate, and surviving co-tenant has a right to whole estate. Right of survivorship“To A and B as joint tenants with right of survivorship” (without survivorship language, maybe construed as tenancy in common) Four Unities must be present (PITTA) Joint tenants must take with: 1 Identical interests2 from the same instrument3 at the same time4 with an equal right to possessRight to survivorship may be severed and estate converted to tenancy in common by: conveyance by one joint tenant, agreement of joint tenants, murder of one co-tenant by another or simultaneous death of co-tenants.  Joint tenancy can be terminated by partition
Tenancy by EntiretyHusband and wife each has an undivided interest in the whole estate and right of survivorship“TO H and W”.Right of survivorship may be severed by death, divorce, mutual agreement or by execution of joint creditor.
Tenancy in CommonEach tenant has distinct, proportionate, undivided interest in property. No right of survivorship.“To A and B”. 1 unity of possession requiredPartition.

 

II LANDLORD AND TENANT

 

NATURE OF LEASEHOLD

 

  • Leasehold= estate in land
  • Tenant has present possessory interest in leased premises
  • Landlord has future interest- reversion

 

1 TENANCY FOR YEARS

 

  • Continues for a fixed period of time (2 years)

 

# Creation

 

  • Written lease
  • SOF- writing required for lease of more than 1 year

 

# Termination

 

  • Ends automatically at termination date

 

Breach of covenants

 

L reserves right of entry- allows him to terminate lease if T breaches any of lease’s covenants

 

  • Failure to Pay rent
  • Surrender- T surrenders and L accepts (if unexpired term more than 1 years- writing required) same requirements as for creation

 

2 PERIODIC TENANCIES

 

Continues for successive periods (month to month) until terminated by proper notice by either party.

 

# Creation

 

Express Agreement

 

  • L lease to T month to month

 

Implication

 

  • L lease to T of $1000 payable monthly

 

Operation of Law

 

  • T remain in possession after lease expires & L treats it as periodic tenancy

 

# Termination

 

  • Automatically renewed until proper notice of termination is given
  • Year to year lease 6 moth notice required
  • One month’s notice for month to month lease required

 

3 TENANCIES AT WILL

 

Terminable either at the will of T or L

 

# Creation

 

  • Express agreement that lease can be terminated at any time
  • I L has right to terminate same right implied to T
  • If T has right to terminate, same right not implied to L

 

# Termination

 

  • Notice and reasonable time to quit
  • Operation of law (death, commission of waste)

4 TENANCIES AT SUFFERANCE

# Creation

 

  • T wrongfully remains in possession after expiration of lawful tenancy

 

# Termination

 

  • Until L takes steps to evict T
  • No notice of termination required

5 HOLD-OVER DOCTRINE

 

T continues in possession after his right to possession has ended, L may:

 

  • Evict him or
  • Bind him to new periodic tenancy
  • Commercial T may be held to new year to year lease if original terms was for 1 year or more

OR

  • periodic term based on frequency of payments
  • Residential T held to month to month tenancy regardless of original term
LEASEHOLD ESTATES
TypeDefinitionCreationTermination
Tenancy for YearsFixed period of time“to T for 10 years”Terminates at the end of the stated period w/o either party giving notice.
Periodic TenancyFixed period that continues for succeeding periods until either party gives notice of termination“To T from month to month” or “to T with rent payable ont he first day of every month”Notice from one party at least equal to the length of time period (full month for month to month) Exception: 6 month required for year to year tenancy
Tenancy at WillNo stated duration that lasts as long as both parties desire“to T for and during the pleasure of L” OR“To T for as many years as T desires” (only T may terminate)After one party displays an intention that tenancy should come to an end. Also by operation of law (death)
Tenancy at SufferanceT wrongfully holds over after termination of tenancyT’s lease expires but T continues to occupy premisesWhen L evicts T or elects to hold T to another term.

 

LEASES

 

Contract- governs T and L relationship

Covenants in lease generally independent (one party breaches- other recover damages- but must still perform her promise & cannot terminate L-T relationship)

 

TENANT DUTIES & LANDLORD REMEDIES

 

1 Duty to Repair (doctrine of waste)

 

T cannot damage (commit waste) on leased premises.

 

Types of waste

 

Voluntary Affirmative waste

 

  • T intentionally/negligently damages premises or exploits minerals on property

 

Permissive Waste

 

  • T fails to take reasonable steps to protect premises from damage from elements.
  • T liable for ordinary repairs

 

Ameliorative Waste

 

  • Improvements- increase value
  • T liable for cost of restoration

---

Destruction of premises w/o fault

 

  • No waste

---

T’s Liability for Covenant to Repair

 

If residential T covenants to repair L obligated to repair under “implied warranty of habitability”

Non-residential Ts covenant to repair- enforceable

---

 

3 Duty to Pay rent

 

4 Landlord remedies

 

T on premises but fails to pay rent- evict or sue

 

  • Bring suit for rent due
  • Evict T

 

T abandons- do nothing or repossess

L has duty to mitigate damages by seeking to relet the premises

If surrender not found- T liable for rent promised and fair rental value

If relet, difference b/w promised rent and rent received from re-letting

If surrender- T is free from any rent liability after abandonment.

 

LANDLORD DUTIES AND TENANT REMEDIES

 

L= no duty to repair or maintain premises

 

1 Duty to Deliver possession of premises

 

Put T in actual possession of premises

 

2 Quiet Enjoyment

 

Covenant may be breached:

 

Actual eviction

 

  • L/paramount title holder/hold-over tenant excludes T from entire leased premises
  • Actual eviction

 

Partial Eviction

 

  • T excluded from part of leased premises
  • Partial eviction by L reliefs T for paying rent for entire premises
  • PE by 3rd person with paramount title= apportionment of rent

 

Constructive Eviction

 

  • L does sth (or fails to provide) that renders property uninhabitable T may terminate lease and seek damages
  • Must be result of L’s action
  • T must vacate premises

 

3 Implied Warranty of Habitability

Covenant implied into residential leases

Non-waivable

L’s duty tied to standard local housing codes

If breach, T may:

 

  • Terminate lease
  • Make repairs and offset cost against future rent
  • Abate the rent to an amount equal to fair rental value in view of defects
  • Remain in possession, pay full rent and sue for damages

 

*Only applies to residential Ts not commercial

4 Retaliatory Eviction

L may not terminate lease for whistle blowing (reporting housing or building code violations)