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

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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

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)