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 reverter | Right of Entry | |
Present Interest | Fee Simple Determinable | Fee Simple subject to condition subsequent |
Example | To 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 grantor | Estate automatically reverts to grantor upon occurrence of stated event | Estate does not revert automatically: grantor must exercise his right of entry |
Alienability | Transferable, descendible and devisable | Descendible 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 remainders | Rule in Shelley’s case | Doctrine of Worthier Title | |
Rule | Contingent remainders destroyed if not vested at time of termination of preceding estate | A 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 |
Example | To A for life, remainder to A’s children who reach 21 | To A for life then to A’s heirs | To A for life, then to my heirs at law |
Result | If A has no children who are at least 21 at time of her death, property reverts to grantor | A has a fee simple | A has a life estate, grantor has a reversion |
Modern Status | Abolished in Most jurisdictions | Abolished in most jurisdictions | Rule of construction only |
Modern Result | Property reverts to grantor, A’s children have a springing executory interest | A’s heirs have a contingent remainder | Grantor’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 interests | Example | Alienability | Subject to rule against perpetuities |
Indefeasibly vested remainder | To A for life then to B | Transferable, descendible and devisable | No |
Vested remainder subject to total divestment | To 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 devisable | No |
Vested Remainder subject to Open | To A for life, then to A’s children in equal shares | Transferable, descendible and devisable | Yes- as long as class remains open |
Contingent Remainder | To A for life, then to B if B marries C OR To A for life, then to A’s surviving children | Transferable in most states (not common law), descendible and devisable | Yes |
Shifting Executory Interest | To 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 devisable | Yes |
Springing Executory Interest | To A when and if he becomes a doctor OR To A for life, then two year’s after A’s death, B | Transferable in most states (not common law), descendible and devisable | Yes |
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
- 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 TENANCY | DEFINITION | CREATION | TERMINATION |
Joint Tenancy | Each 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 possess | Right 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 Entirety | Husband 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 Common | Each tenant has distinct, proportionate, undivided interest in property. No right of survivorship. | “To A and B”. 1 unity of possession required | Partition. |
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 | |||
---|---|---|---|
Type | Definition | Creation | Termination |
Tenancy for Years | Fixed period of time | “to T for 10 years” | Terminates at the end of the stated period w/o either party giving notice. |
Periodic Tenancy | Fixed 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 Will | No 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 Sufferance | T wrongfully holds over after termination of tenancy | T’s lease expires but T continues to occupy premises | When 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)