Real Property—Highly Tested MBE Topics, Charts, and a Checklist!
Real Property—Highly Tested MBE Topics, Charts, and a Checklist!
1. Contracts of Sale and Closing
- There is a two-step process in selling real estate: a contract of sale is signed and closing occurs.
- The contract of sale must be in writing, signed, and contain essential terms (unless the part performance exception applies). The contract of sale must satisfy the implied warranty of marketable title. After the contract is signed, under equitable conversion, the risk of loss shifts to the buyer.
-
- Closing is when the seller hands over the deed with intent to pass title. It is also the date where the implied warranty of marketable title must be satisfied.
- For a general warranty deed, there are six covenants that must be satisfied.
- A quitclaim deed contains no covenants.
- Closing is when the seller hands over the deed with intent to pass title. It is also the date where the implied warranty of marketable title must be satisfied.
-
-
- Once the deed is handed over, under the doctrine of merger, one can only sue on the deed, not the contract.
-
2. Recording Acts
- Common law: First-in-time, first-in-right. One does not need to record to have title.
- Notice act: a subsequent bona fide purchaser for value without notice can change the common law default rule and have superior title to someone who technically received the property before them.
- Race-notice act: a subsequent bona fide purchaser for value without notice who records first can take title to a superior interest.
- Notice can be (mnemonic = AIR): actual, inquiry, or record
- Pure race act: Protects subsequent purchasers who are first to record. (These are rare!) A pure race act will not mention notice in the statute.
3. Mortgages and Security Devices
- A mortgage indicates the existence of a debt. The mortgagor is the debtor. The mortgagee is usually a bank who lends money.
- Transfer by the mortgagor:
- If mortgagor gives away her interest “subject to” the mortgage, the original mortgagor is liable.
- If the new transferee “assumes” the interest, both the original mortgagor and the new transferee are liable.
- If there is a novation, then only the new transferee is liable.
- Theories:
- Title theory: title is transferred to the bank right away.
- Lien theory (majority): the mortgagee (the bank) only has a lien on the land.
- Foreclosure
- Equity right of redemption allows a debtor to redeem the property and get it back by paying everything due under the mortgage agreement prior to foreclosure.
- Statutory right of redemption (recognized by half the states): allows the debtor to get property back after the foreclosure sale by paying the full purchase price within a specified period of time (usually six months).
- Who gets paid first? The bank that forecloses and anyone “junior” to them. Any senior interests remain on the property.
4. Present Interests
- Fee simple absolute: Example: “To A” or “To A and her heirs.” A has the estate forever.
- Life estate: Example: “To A for life.” A life estate can be express or implied.
- Life tenants have to pay taxes, interest on the mortgage, and make repairs if they are using or making a profit off the land. They are only liable up to the amount of the benefit they are getting.
- Life tenants cannot commit waste—permissive or affirmative.
- Fee simple determinable: (FSD) Durational. Measured by time.
- Magic words of creation: mnemonic = FUWD (for so long as, until, while, during)
- This estate ends automatically upon happening of the condition.
- Example: “To A for so long as A is in college.” A has a FSD. O has a possibility of reverter.
- Fee simple subject to condition subsequent (FSSCS): Conditional. Measured by occurrence of an event.
- Magic words of creation: “right of entry” must be reserved for the owner. (Usually you will see “conditional” words too like “but, if, upon condition . . . .”)
- This estate ends when O enters.
- Example: “To A, but if A smokes, O reserves a right of entry.” A has a FSSCS. O has a right of entry.
- Fee simple subject to executory interest (FSSEI)
- You will see durational or conditional language, but it will go to person B instead of O.
- Example: “To A, but if A smokes, to B.” A has a FSSEI and B has the executory interest.
5. Future Interests
Future interests held by grantor:
- Right of entry: Goes with fee simple subject to condition subsequent only. Must be expressly reserved.
- Possibility of reverter: goes with a fee simple determinable only. (FSD + POR = <3)
- Reversion: goes with a life estate or any other time the grantor gives less than what he has.
Future interests held by grantee:
- Remainder: usually follows a life estate.
- A remainder is vested when the person is ascertained and it is certain to become possessory.
- It is contingent when the person is (mnemonic = UUU) unborn, unascertained, or if it uncertain to vest due to a condition.
- Executory interest: when B does not have a remainder, he probably has an executory interest!
- Shifting: When B takes it from the grantee or a third party. These are the most common.
- Springing: when B divests O of his interest.
6. Concurrent Estates
Three types
- Joint tenancy
- Creation: (mnemonic = TTIP) time, title, interest, possession
- What is special about it: a right of survivorship.
-
- How to unilaterally sever it: (mnemonic = GSAM) give it away, sign a contract of sale, actual judicial sale by a creditor, granting a mortgage in a title theory state.
-
- One cannot give it away by will!
- Tenancy in common
- Creation: possession only is needed.
- What is special about it: It is devisable and inheritable, meaning that one can convey a tenancy in common via will or inheritance. There is no right of survivorship.
- Tenancy by the entirety is similar to joint tenancy except one can only sever it by death, divorce, mutual agreement, or a mutual creditor of both executing on his interest.
7. Landlord and Tenant
- Types of holdings: term for years, at will, holdover tenancies, or periodic tenancies.
- The tenant must pay rent and not commit waste.
- There is an implied warranty of habitability for residential property where the landlord warrants to keep property in habitable condition.
- A landlord can constructively evict a tenant if there is something that renders the premises unusable, the landlord fails to act after being notified, and the tenant leaves.
- Assignment vs. subletting
- Assignment: When tenant (assignor) assigns all of his interest to the new assignee. The initial tenant is liable under privity of contract. The new tenant is liable under privity of estate.
- Sublease: When the tenant (sublessor) rents his land to the sublessee but has some interest left over. The initial tenant is liable under privity of contract and estate. The sublessee is not liable.
8. Rights in Land—Covenants, Easements, Licenses
- Real covenants: When you want money damages, you sue for this. You need PINT:
- Privity: For the burden to run, you need horizontal and vertical privity. For the benefit to run, you only need vertical privity.
- Intent for the covenant to run.
- Notice
- Touch and concern
- Equitable servitudes: When you want an injunction, sue for this. You need everything above except privity.
- Easements
- Creation
- Express: signed writing
- Creation
-
-
- Implied by preexisting use: common apparent use by a landowner who subdivided land.
-
-
-
- Implied by necessity: land is landlocked.
-
-
-
- Prescription: similar to adverse possession except “exclusive” element is missing.
-
-
- Use: reasonable development is OK.
- Termination: merger, release (signed writing), abandonment (act + intent), estoppel, prescription, end of necessity (for easement by necessity)
9. Fixtures
- A fixture passes with real property.
- Look at intent to make the item a fixture—mnemonic = DAMN: damage removal would cause, adaptation of item to realty, manner in which it is attached, and nature of the item.
10. Adverse Possession
- Requirements: mnemonic = CHANGE (continuous, hostile, actual possession, open and notorious, goes on for statutory period—20 years, exclusive).
- Tacking is permitted.
- If the true owner has a disability (mnemonic = JIM: jail, mental illness, minor) at the time the adverse possessor enters, then the time period is tolled until the disability is lifted.
Go to the next topic, Torts—Highly Tested MBE Topics, Charts, and a Checklist!
Seeking MBE Assistance?
Seeking MBE Assistance?
- 📘 MBE Guide: Equip yourself with our FREE expert-crafted bar exam and MBE guides.
- Free Bar Exam Resource Center: Discover top resources, articles, and free webinars led by renowned bar exam professionals.
Top Resources as Vouched by our Students:
- MBE One-Sheets: One of our most highly acclaimed bar exam supplements!
- Bar Exam Outlines: Our comprehensive and condensed bar exam outlines present key information in an organized, easy-to-digest layout.
- MBE Private Tutoring: Opt for personalized, effective strategies.
- On Demand Bar Exam Course: Comprehensive bar exam preparation.
- Bar Exam Crash Course and Mini Outlines: Acclaimed and effective for a quick refresher.
- MBE Mastery Class, Real MBE Questions, and MBE Guide: Elevate your MBE preparation with these high-quality MBE supplements!
🔥 NEW! Check out our Repeat Taker Bar Exam Course and get introduced to our unmatched platinum Guarantee Pass Program.
Leave a Reply
Want to join the discussion?Feel free to contribute!