Multistate
Bar Exam
Outlines
July
2012
Multistate Bar Exam Outline | July 2012
Table of Contents
Constitutional Law .....................................................................................Error! Bookmark not defined.
Contracts ....................................................................................................Error! Bookmark not defined.
Criminal Law .............................................................................................Error! Bookmark not defined.
Criminal Procedure ....................................................................................Error! Bookmark not defined.
Evidence .....................................................................................................Error! Bookmark not defined.
Property ....................................................................................................................................................... 3
Torts ...........................................................................................................Error! Bookmark not defined.
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Property
I.
©
Present Estates
a. Fee Simple Absolute
i. Language: “To A” or “To A and his heirs.”
1. Common law words “and his heirs” no longer necessary
ii. Distinguishable Characteristics: Absolute ownership of potentially infinite duration. Freely
devisable, descendible, and alienable.
iii. No accompanying future interest (living people have no heirs)
b. Fee Tail (usually not tested)
i. Language: “To A and heirs of his body.”
ii. Virtually abolished in the U.S., including New York
iii. Historically, fee tail would pass directly to A’s blood descendants no matter what. Today,
this is converted into a fee simple absolute.
iv. Future interests
1. O got reversion. Third party (other than O) would get remainder
c. Defeasible Fees
i. Fee Simple Determinable
1. Language: “To A for so long as…” or “To A until…” or “To A during…”
2. Grantor must use clear durational language.
3. If stated condition is violated, forfeiture is automatic.
4. Distinguishing characteristics: devisable, descendible, and alienable, but always
subject to condition.
5. Future interest: O gets possibility of reverter
a. Fee simple determinable possibility of reverter = FSDPOR
ii. Fee Simple Subject to Condition Subsequent
1. Language: “To A, but if X occurs, grantor reserves right to reenter and retake.”
2. Grantor must use clear durational language and carve out right to reenter.
3. Distinguishing characteristics: not automatically terminated, but can be cut short at
grantor’s option if the stated condition occurs.
4. Future interest: O gets right of entry (synonymous with power of termination)
iii. Fee Simple Subject to Executory Limitation
1. Language: to “A, but if X occurs, to B.”
2. Distinguishing characteristics: like a fee simple determinable, but automatic
forfeiture in favor of 3d party if condition is broken.
3. Future interest: 3d party gets shifting executory interest
iv. Note on defeasible fees:
1. Must be clear durational language – words of mere desire, hope, or intention are
insufficient to create a defeasible fee.
2. Absolute restraints on alienation (power to sell/transfer) are void.
d. The Life Estate
i. Language: “To A for life.” A has life estate and is called a “life tenant.”
ii. Definition: estate measured in explicit lifetime terms and never in terms of years.
iii. Future estate: If held by O, he has reversion. If held by 3d party, it has a remainder.
iv. Life Estate Pur Autre Vie: life estate measured by a life other than A’s.
1. Language: “To A for the life of B.”
2. O would have reversion – at the end of B’s life, It reverts back to O.
v. Distinguishing characteristics:
1. Possession: life tenant entitled to all ordinary uses and profits from the land
2. Life tenant must not commit waste by doing anything to harm future interest
holders. There are 3 types of waste:
a. Voluntary or affirmative waste: actual overt conduct harming value.
Remember general rule for consumption of natural resources. No waste if
[acronym -- PURGE]:
i. Prior Use was exploitation (limited to using open mines)
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b.
c.
Estate
Fee Simple Absolute
Fee Tail
ii. Reasonable repairs and maintenance of property
iii. Granted right to do so by grantor
iv. Exploitation (if land is only suitable to exploit)
Permissive waste or neglect: when land is allowed to fall into disrepair or
tenant fails to reasonably protect land or pay taxes
Ameliorative waste: tenant can’t enhance property value unless all future
interest holders are known and consent (sentimental value)
Language
“To A and his heirs”
“To A”
“To A and the heirs of
his body”
Defeasible Fees:
Fee Simple
Determinable
Fee simple subject to
condition subsequent
“To A so long as…”
“To A until…”
“To A while…”
“To A, but if X happens,
grantor reserves right to
reenter and retake.”
Fee simple subject to
an executory
limitation
Life Estate
“To A, but if X happens,
then to B”
“To A for Life.”
“To A for the life of B”
Duration
Absolute ownership,
potentially infinite
As long as there are
lineal descendants of
grantee
Potentially infinite, as
long as event doesn’t
happen.
Potentially infinite, as
long as condition isn’t
breached, and then, until
holder of right of entry
exercises termination.
Potentially infinite, as
long as contingency
doesn’t occur.
Measured by life of
transferee or someone
else (pur autre vie)
Transferability
Devisible, descendible,
alienable
Passes authomatically to
grantee’s lineal
descendants.
Devisible, descendible,
alienable, subject to
condition.
Devisible, descendible,
alienable, subject to
condition.
Future Interest
None.
Devisible, descendible,
alienable, subject to
condition.
Devisible, descendible,
alienable, if pur autre vie
and measuring life still
alive.
Executory interest (held
by 3d party)
Reversion (if held by O)
Remainder (if held by 3d
party)
Possibility of reverter
(held by O)
Right of entry/power of
termination (held by O)
Reversion (if held by O)
Remainder (if held by 3d
party)
II. Future Interests (6 categories)
a. Future Interests in Grantor
i. Possibility of Reverter: accompanies the fee simple determinable
ii. Right of Entry (power of termination): accompanies the fee simple subject to condition
subsequent
iii. Reversion: What is left over to grantor who transfers estate of a lesser quantum than he
started with, other than a fee simple determinable or a fee simple subject to condition
subsequent.
b. Future Interests in Transferee
i. Vested remainder
1. Remainder = future interest created in grantee who is capable of becoming
possessory upon expiration of prior estate created in same conveyance.
2. Remaindermen both accompany preceding estate of fixed duration and wait
patiently for preceding estate to run its course.
3. Remainder is vested if it is both:
a. created in an ascertained person; and
b. is not subject to any condition precedent.
4. 3 Kinds of Vested Remainders
a. Indefeasibly vested remainder: no strings attached to future estate
i. Language: “To A for life, remainder to B.”
ii. B’s future interest passes by will or intestate
b. Vested remainder subject to complete defeasance (total divestment)
i. Taking not subject to any condition precedent, but it may be cut
short by a condition subsequent
ii. Comma Rule: conditional language in a transfer follows language
that, taken alone and set off by commas, would create a vested
remainder.
iii. Language: “To A for life, remainder to B, provided however, that if
B dies under the age of 25, to C.”
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c.
Vested Remainder Subject to Open: remainder is vested in a group of takers,
at least one of whom is qualified to take possession.
i. Each member may be diluted because additional takers, not yet
ascertained, may join the class.
ii. Language: “To A for life, then to B’s children.”
iii. The class can be open (possibility of new members) or closed
(when any member can demand possession).
1. Exception: womb rule (children in womb take)
iv. Rule against perpetuities applies
ii. Contingent remainder [Rule Against Perpetuities Applies]
1. Background
a. Remainder is contingent if it is either:
i. created in an unascertained person; or
1.
Example: grantee is not yet born; heirs are unknown; don’t know which
children will survive, etc.
ii. is subject to any condition precedent
1.
Example: to A for life, then, if B graduates from college, to B. If B
graduates from college during A’s life, B has indefeasibly vested
remainder
b.
Rule of Destructibility of Contingent Remainders
i. At common law, contingent remainder was destroyed if it was still
contingent at the time the preceding estate ended.
ii. Today, this rule has been abolished. Thus, the remaindermen
would have a springing executory interest.
c. Rule of Shelley’s Case
i. Would apply only if written “To A for life, then on A’s death, to A’s
heirs.” A is alive.
ii. Historically, the present and future interests would merge, giving A
fee simple absolute. This applied regardless of contrary grantor
intent.
iii. Today, rule has been abolished.
d. Doctrine of Worthier Title
i. Applies when O, who is alive, tries to create a future interest in his
heirs. “To A for life, then to O’s heirs.”
ii. Contingent remainder in O’s heirs is void. Thus, A has life estate,
and O has reversion. This is a rule of construction, so intent
controls.
iii. Executory interests [Rule Against Perpetuities Applies]
1. Definition: future interest in transferee which is not a remainder and which takes
effect by either cutting short interest in another person (“shifting”) or in the grantor
or his errors (“springing”).
2. Shifting executory interest: follows a defeasible fee and cuts short someone other
than the grantor.
a. Language: “To A and her heirs, but if B returns, then to B.” B has shifting
executory interest. A has fee simple subject to B’s shifting executory
interest.
3. Springing executory interest: cuts short O’s interest
a. Language: “To A, if and when he marries.” A has springing executory
interest. O has fee simple subject to A’s springing executory interest.
III. Rule Against Perpetuities
a. Rule: some future interests are void if there is any possibility, however remote, that the interest may
vest more than 21 years after the death of a measuring life.
b. 4-Step Technique
i. Determine which future interests have been created.
1. Applies only to contingent remainders, executory interests, and vested remainders
subject to open.
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ii. Identify the conditions precedent to the vesting (what has to happen)
iii. Find a measuring life (person who’s life or death is relevant to condition)
iv. Ask whether we’ll know, with certainty, within 21 years of measure life’s death, if future
interest holder(s) can or cannot take. If not, it’s void.
c. 2 Bright Line Rules for Common Law RAP
i. A gift to an open class that is conditioned on the members surviving to an age beyond 21
violates the common law RAP.
1. If it’s bad as to one, it’s bad as to all. Every member’s taking has to be within the
perpetuities period.
ii. Many shifting executory interests violate the RAP. Executory interests with no time limit on
the time within which it must vest violates the RAP.
1. Charity-to-charity exception: a gift from one charity to another doesn’t violate the
RAP for public policy purposes.
d. Reform of the Rule Against Perpetuities
i. The “Wait and See” or “Second Look” doctrine: validity of suspect future interest is
determined on the basis of the facts as they exist at the death of measuring life.
1. Eliminates the “what if” and “anything is possible” inquiry.
ii. Uniform Statutory Rule Against Perpetuities: codifies the Common Law RAP and provides for
alternative 90-year vesting period.
iii. Both of these embrace:
1. The cy pres doctrine (“as near as possible”). Court may reform violating disposition
in a way that most closely matches grantor’s intent while still complying with the
RAP.
2. The reduction of any offensive age contingency to 21 years.
IV. Concurrent Estates
a. Joint Tenancy
i. Definition: 2 or more own with the right of survivorship. When 1 joint tenant dies, his share
passes automatically to surviving joint tenants.
ii. Joint tenant’s interest is alienable, but not devisable (can’t leave by will) or descendible
(doesn’t pass intestate).
iii. Creation: requires the 4 unities plus explicit recitation
1. The 4 Unities (acronym - T-TIP)
a. Same Time
b. Same Title (same instrument)
c. With Identical equal interests
d. With identical rights to Possess the whole
2. Grantor must clearly express the right to survivorship (joint tenancies are
disfavored b/c they avoid probate).
iv. Use of straw: to add a joint tenant, the grantor must use straw who conveys it back to them
with the right of survivorship, in order to satisfy the 4 unities.
v. Severance of a Joint Tenancy (acronym - SPAM)
1. Severance and Sale: joint tenant can sell or transfer interest during his lifetime. Can
do so secretly. This severs the joint tenancy as to the seller’s interest because it
disrupts the 4 unities. Other tenants’ shares remain intact
a. In equity, a joint tenant’s entering into a contract for the sale of her share
will sever the tenancy as to that share b/c of the doctrine of equitable
conversion.
2. Severance and Partition
a. Voluntary agreement
b. Partition in kind (court divides property according to best interests)
c. Forced sale (court orders sale if in best interests of all)
3. Severance and Mortgage
a. Minority of States: one joint tenant’s execution of mortgage or lien on his
share will sever joint tenancy for that share
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b.
b.
c.
Majority of States follow lien theory of mortgages, whereby a joint tenant’s
execution of mortgage doesn’t sever interest.
Tenancy by the Entirety
i. Definition: protected marital interest b/t husband and wife with right of survivorship
ii. Created automatically for any conveyance to husband and wife unless stated
iii. Protected: 1 spouse’s creditors cannot touch the tenancy.
iv. No unilateral conveyance: neither tenant can defeat right of survivorship by unilaterally
conveying to a 3d party.
Tenancy in Common
i. Definition: 2 or more own with NO right of survivorship
ii. Each co-tenant owns an individual part and has right to possess the whole.
iii. East interest is descendible, devisable, and alienable.
iv. Presumption favors tenancy in common.
v. Rights and Duties of Co-Tenants
1. Possession: each co-tenant is entitled to the whole. Excluding one tenant is unlawful
ouster. Absent ouster, co-tenants not liable for rent to each other.
2. Rent from 3d parties: each co-tenant gets fair share of income
3. Cannot adversely possess against each other (it’s not hostile)
4. Carrying Costs: each cotenant responsible for fair share (taxes, mortgage)
5. Repairs: a cotenant has right to contribution from others (pro rata) for necessary
repairs as long as the others are told of the need for repairs
6. Improvements: no right to contribution for improvements. But, cotenant entitled to
credit for increase in value caused by her efforts.
7. Waste: must not commit waste (voluntary, permissive, or ameliorative)
8. Partition: each cotenant has right to bring action for partition
V. Landlord Tenant Law
a. 4 Leasehold Estates
i. Tenancy for Years: lease for a fixed period of time (doesn’t have to be years)
1. No notice needed to terminate, since it states termination date from outset
2. Term greater than 1 year must be in writing to be enforceable
ii. Periodic Tenancy: continues for successive intervals until LL or T give proper notice
1. Express Creation: LL can convey to T a month-to-month tenancy
2. Implied Creation:
a. Land is leased with no duration but provision is made for periodic
payments at set intervals
b. Oral term of years in violation of statute frauds creates implied periodic
tenancy, measured by way rent is tendered
c. Holdover: in a residential lease tenant staying beyond conclusion of original
lease creates implied periodic.
3. Termination: requires notice (usually written) at least equal to period itself unless
otherwise agreed. If tenancy is year-to-year, 6 months is required.
a. Must end at the end of a natural lease period.
iii. Tenancy at Will: tenancy of no fixed duration
1. Payment of regular rent will convert this into an implied periodic tenancy
2. Tenancy may be terminated at any time; reasonable demand to vacate is usually
required.
iv. Tenancy at Sufferance: created when tenant has wrongfully held over
1. Allows LL to recover rent for the hold over period.
2. Lasts until LL evicts tenant or agrees to new tenancy
b. Tenant’s Duties
i. Tenant’s Liability to 3d Parties (matter of tort law)
1. Tenant responsible for keeping premises in reasonably good repair.
2. Tenant liable for injuries sustained by 3d parties invited by tenant, even when LL
promised to make all repairs.
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c.
d.
©
ii. Tenant’s Duty to Repair
1. Tenant must maintain premises and make ordinary repairs.
2. Tenant must not commit waste (voluntary – harmful acts; permissive – neglect;
ameliorative – alterations that increase value)
3. Law of Fixtures: when tenant removes fixture, it is voluntary waste
a. Fixture is once moveable chattel that, by its annexation to realty, it
objectively shows the intent to permanently improve the realty.
i. If removal will cause damage, this is objective evidence of intent to
install a fixture.
b. Tenant must not remove a fixture, no matter if she installed it.
c. Fixtures pass with ownership of the land.
4. Duty to repair when tenant has expressly covenanted in the lease to maintain
property in good condition for duration of the least:
a. At common law, tenant was responsible for any loss to the property
b. Today, tenant may terminate if premises are destroyed through no fault of
the tenant.
iii. Tenant’s Duty to Pay Rent
1. If tenant doesn’t pay while in possession
a. If tenant doesn’t pay, LL’s only option are to evict through the court or
continue relationship and sue for unpaid rent.
b. LL may not engage in self-help
2. If tenant doesn’t pay but is not in possession [acronym - SIR]
a. Surrender: LL could treat tenant’s abandonment as tacit offer of surrender,
which LL accepts.
i. If unexpired term is > 1 year, surrender must be in writing
b. Ignore the abandonment and hold tenant responsible for unpaid rent, just
as if tenant were still there (minority rule)
c. Re-let premises on tenant’s behalf, and hold him liable for deficiency
i. Majority: LL must at least try to re-let in order to mitigate
Landlord’s Duties
i. Duty to deliver possession
1. Majority: LL must put tenant in physical possession of the premises.
2. American rule (minority): LL must only grant tenant legal right to possession
ii. Implied Covenant of Quiet Enjoyment
1. Applies to both residential and commercial leases.
2. Tenant has right to quiet use and enjoyment of premises without interference from
the LL.
3. Breach by actual eviction: when LL unlawfully excludes tenant from premises
4. Breach by constructive eviction [acronym - SING]
a. Substantial Interference: chronic problem due to LL’s act/inaction. Note:
LL responsible for preventing nuisance by other tenants.
b. Notice: tenant must notify LL
c. Goodbye: tenant must vacate w/in reasonable timeframe after LL fails to fix
defect.
iii. Implied Warranty of Habitability
1. Applies to only residential leases.
2. Parties cannot waive.
3. Premises must be fit for human habitation according to local housing code or an
independent court conclusion.
4. Tenant’s rights: [acronym - MR3]
a. Move out and terminate lease
b. Repair and deduct
c. Reduce rent (put in escrow to show good faith)
d. Remain and sue for money damages
Assignment versus Sublease: tenant may do either absent prohibition in lease
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e.
i. Assignment: tenant transferring interest in whole
1. LL and assignee are in privity of estate but not privity of contract.
2. Original lessee and LL remain in privity of contract
3. Assignee accepts all rights and responsibilities
4. Contractual terms (e.g., % sales) doesn’t run with land and lessee retains it
5. Terms that touch and concern the land (e.g., option to buy) run with it.
ii. Sublease: tenant transferring interest in part
1. LL and sublessee are neither in privity of estate nor privity of contract.
LL’s Tort Liability
i. At common law, caveat lessee applied – LL had no duty to make premises safe.
ii. There are 5 exceptions [acronym - CLAPS]
1. Common areas: LL must maintain hallways and stairwells
2. Latent Defects: LL must inform tenant of known hidden defects
3. Assumption of Repairs: LL who volunteers and undertakes repairs must complete
them with reasonable care
4. Public Use Rule: LL who rents public space (convention hall, museum), is
responsible because of nature of defect and length of lease
5. Short term lease of furnished dwelling
VI. Servitudes
a. Easements
i. Definition: Grant of nonpossessory interest that entitles holder to use or enjoyment of
another’s land (the servient tenement). Can be affirmative or negative.
ii. Negative Easement: entitles holder to prevent servient landowner from doing something.
1. Generally recognized in 4 categories [acronym - LASS]: Light; Air; Support; Stream
water from artificial flow (irrigation). (minority of states allow negative easement
for scenic views)
2. Can only be created expressly by writing signed by grantor.
iii. Affirmative Easements
1. Appurtenant Easement: when it benefits holder in his physical use or enjoyment of
his property. It takes 2 parcels of property (one dominant; one servient).
a. These attach to the dominant tenement itself, even if not menti0ned in deed
b. Burden of easement passes with servient estate unless new owner is a bona
fide purchase without notice.
2. Easement in Gross: when only servient land is burdened (e.g., right to swim)
a. Not transferable unless it is for commercial purposes.
3. Creation [acronym - PING]
a. Prescription: may be acquired through adverse possession
b. Implication: may be implied if previous use was apparent and the parties
expected use would survive division because it’s reasonably necessary to
dominant land’s use and quiet enjoyment
c. Necessity: when grantor conveys part of land with no access except over
part of remaining land (landlocked situation)
d. Grant: must be in writing if for > than a year (deed of easement)
4. Scope: set by terms of grant or the conditions that created it. Unilateral expansion is
not allowed.
5. Termination: [acronym - END CRAMP]
a. Estoppel: if servient owner materially changes position in reasonable
reliance on easement holder’s assurance that it won’t be enforced.
b. Necessity: expire as soon as necessity ends, unless created by an express
grant.
c. Destruction of the servient land other than through willful conduct of the
servient owner
d. Condemnation by eminent domain
e. Release: written release by easement holder to servient owner
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f.
g.
b.
c.
h.
License
i. Definition: privilege to enter someone’s land for some delineated purpose
ii. Not subject to statute of frauds, so don’t need to be in writing.
iii. Freely revocable, unless estoppel applies to bar revocation
1. Estoppel applies to bar revocation only when licensee invested substantial money
or labor or both in reasonable reliance on license’s continuation.
iv. Easements that violate statute of frauds are converted to licenses.
The Profit
i. Entitles holder to enter servient land and take soil or substances from the soil
1.
d.
e.
©
Abandonment: easement holder must take physical action (e.g., building a
fence)
Merger: when dominant landowner buys servient land. Easement not
automatically revived upon sale of servient land.
Prescription through elements of adverse possession.
Examples: oil, timber, minerals
ii. All rules of easements apply.
Real Covenants
i. Definition: A contractual limitation or promise to do or refrain from doing something related
to land.
ii. Restrictive Covenants: promise to refrain from doing something
iii. If remedy sought is $$, the promise is a covenant. If remedy is injunction, it is an equitable
servitude.
iv. Covenant will run with the land when it is capable of binding successors.
v. Analyze the party that is being burdened first. Elements necessary for burden to run:
1. Writing: original promise between A & B must be in writing
2. Intent: A & B must have intended for burden to run
3. Touch and Concern the Land: promise must have affected the parties’ legal relations
as land owners – not simply as community members
a. Includes covenants to pay money and covenants not to compete
4. Horizontal and vertical privity: both are needed for burden to run
a. Both need to be in succession of estate, meaning that there was a
grantor/grantee, LL/tenant, or mortgager/mortgagee relationship
b. Thus, no adverse possession.
vi. Second, analyze the party that is being benefited (e.g., does party have standing):
1. Writing: original promise between A & B must be in writing
2. Intent: A & B must have intended for burden to run
3. Touch and Concern the Land: promise must have affected the parties’ legal relations
as land owners – not simply as community members
4. Vertical Privity: no horizontal privity is required
Equitable Servitudes
i. Definition: promise that equity will enforce against successors. Accompanied by injunctive
relief.
ii. Creation: [acronym - WITNES]
1. Writing: original promise between A & B must be in writing
2. Intent: A & B intended for burden to be enforced by and against successors
3. Touch and Concern the Land: promise must have affected the parties’ legal relations
as land owners – not simply as community members
4. Notice: assignees of burdened land must have notice of promise. Note that privity is
not required to bind successors.
iii. Implied equitable servitude: the general or common scheme doctrine. 2 Elements:
1. When sales began, subdivider had general scheme of residential development that
included the lot in question that contained no covenant.
2. The lotholder had notice of the promise contained in the prior deeds.
a. Actual notice: Defendant had literal knowledge of promises
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b.
Inquiry notice: neighborhood conforms to common restriction (and thus
Defendant should have known lay of the land)
c. Record notice: publicly recorded documents contained notice
iv. Equitable Defenses to enforcement of equitable servitudes:
1. Changed Conditions: so pervasive that the entire area or subdivision has changed.
Limited or piecemeal changes are never enough.
VII. Adverse Possession
a. Definition: possession for a statutorily prescribed period of time can ripen into title if elements are
met [acronym - COAH]:
i. Continuous: uninterrupted
ii. Open and Notorious
iii. Actual: can’t be symbolic
iv. Hostile: without owner consent
b. Possessor’s subjective state of mind or knowledge of 3d party’s title is irrelevant.
c. Tacking: one adverse possessor may tack his predecessor’s time onto his as long as there is privity (a
non-hostile nexus such as blood, contract, deed, or will).
i. Taking not allowed when there is outster by the rightful owner.
d. Disabilities: statute of limitations will not run against true owner who is disabled at inception of
adverse possession. Common disabilities are insanity, infancy, imprisonment.
VIII.
Purchase and Sale of Real Estate
a. Land contract: endures until closing
i. Statute of frauds
1. Land in contract must:
a. Be in writing signed by party to be bound
b. Include a description of the land and consideration
i. if actual amount is less than the contracted amount, Plaintiff is
entitled to specific performance with pro rata reduction in price
2. Doctrine of Part Performance: equity will decree specific performance on oral
contract if any two of the following are satisfied:
a. Buyer takes physical possession of the land
b. Buyer pays all or part of the purchase price
c. Buyer makes substantial improvements on the land
ii. Risk of loss
1. In equity, once contract is signed, the buyer is the owner of the land and bears the
risk of loss to the property.
iii. Implied Promises in land contracts
1. Seller promises to provide marketable title at closing (free from reasonable doubt of
present and threat of future lawsuits). 3 common scenarios:
a. Adverse possession: even if portion of the title rests on adverse possession,
it is unmarketable.
b. Encumbrances: title w/o servitudes or mortgages unless B waives
i. Seller can satisfy outstanding mortgage or lien at closing
c. Zoning: land may not violate zoning ordinance
2. Seller promises to not make any false statements of material fact
a. Seller must disclose latent material defects
b. “As is” disclaimer doesn’t excuse seller from liability
iv. Land contract contains no implied warranties of fitness or habitability (caveat emptor)
except for sales of new homes by builder-vendor.
b. Closing: deed becomes operative document
i. Lawfully executed and delivered Deed must pass legal title from seller to buyer
1. Lawful execution
a. Must be in writing and signed by grantor.
b. No consideration required
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Multistate Bar Exam Outline | July 2012
c.
c.
Description of land need not be perfect – just unambiguous and provide
good enough lead to enable research as to exact property)
2. Delivery requirement
a. Grantor can physically/manually transfer deed to grantee (mail OK)
b. Physical delivery not required – it’s a legal standard that asks whether
grantor had the present intent to be bound.
c. Recipient’s express rejection of deed defeats delivery.
d. If deed is delivered accompanied by an oral condition, condition drops out.
e. Delivery by escrow is OK. Once conditions met, title passes.
ii. Covenants for title and three types of deeds:
1. Quitclaim deed: contains no covenants.
a. Grantor doesn’t even promise he had title to convey.
b. Grantor did implicitly promise in land contract to provide marketable title.
This is time-limited: any problems post-closing are not the responsibility of
the seller.
2. General warranty deed: warrants against all defects in title
a. Present covenants: S/L begins running when deed is delivered
i. Covenant of seisin: promise that grantee owns estate
ii. Covenant of right to convey: grantee has power to sell
iii. Covenant against encumbrances: no servitudes/mortgages
b. Future covenants: S/L begins when grantee’s possession disturbed
i. Covenant for quiet enjoyment: grantee won’t be disturbed by a 3d
party’s lawful claim of title
ii. Covenant of warranty: promise to defend grantee should there be
lawful claims by others
iii. Covenant for further assurances: promise to do whatever
necessary to perfect grantee’s title (e.g., resign in black)
3. Statutory Special Warranty Deed: contains two promises that grantor makes only on
behalf of himself. Grantor promises:
a. he hasn’t conveyed to anyone other than grantee
b. the estate is free from encumbrances made by grantor
The Recording System
i. Fact patterns will be concerned with the double-dealer.
ii. Two bright line rules:
1. If B is bona fide purchaser and we’re in notice jurisdiction, B wins regardless of
whether he records before A.
2. If B is bona fide purchaser and we’re in race-notice jurisdiction, B wins only if he
properly recorded before A does.
iii. Recording system only protects bona fide purchasers and mortgagees.
1. One who purchases land for value; and
2. Without notice that someone else bought it first.
iv. Notice a buyer may be charged with [AIR]:
1. Actual: if B had actual notice before the sale
2. Inquiry: if B’s proper inspection would have revealed issue.
a. If recorded instrument references unrecorded transaction, grantee is on
inquiry notice of whatever reasonable follow up would reveal.
3. Record: if A’s deed was properly within chain of title when B takes
v. Notice Statute:
1. Second buyer wins if he is a bona fide purchaser and A has not recorded.
2.
Example: “A conveyance of an interest in land shall not be valid against any subsequent purchaser for
value, without notice thereof, unless the conveyance is recorded.”
vi. Race-Notice Statute:
1. First buyer will win if he records before the second buyer
2.
Example: “Any conveyance of an interest in land shall not be valid against any subsequent purchaser for
value, without notice thereof, whose conveyance is first recorded.
vii. Chain of Title Problems:
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1.
2.
3.
Shelter Rule: one who takes from a bona fide purchaser will prevail against any
entity that transferor or BFP would have prevailed against. Transferee “takes
shelter” in the status of the transferor, and steps into shoes of the BFP even though
not himself a BFP.
Wild Deed Problem: If a deed entered on the records has a grantor unconnected to
the chain of title, it is incapable of giving record notice of its existence.
Estoppel by Deed: One who conveys realty in which he has no interest is estopped
from denying its validity if he later acquires what he transferred.
IX. Mortgages
a. Definition: security interest in land intended by the parties to be collateral for repayment of a debt.
It is the union of debt and voluntary transfer of security interest.
i. Debtor = mortgagor; creditor = mortgagee
ii. Legal mortgage: must be in writing to satisfy Statute of Frauds.
iii. Equitable Mortgage: when debtor gives creditor a deed to satisfy a debt. Parole evidence is
admissible to show the parties’ true intent.
b. After mortgage is created, the debtor has title and right to possession. The creditor has a lien.
i. Creditor can transfer interest by 1) endorsing note and delivering it to transferee; or 2)
executing a separate document of assignment.
1. Transferee is a holder in due course. He takes the note free of any personal defenses
that could have been raised against the original mortgagee, such as lack of
consideration, fraud, unconscionability, waiver, estoppel. He may foreclose the
mortgage despite presence of personal defense.
2. Real Defenses [acronym - MAD FIFI4]:
a. Material Alteration
b. Duress
c. Fraud in the Factum (told he was signing something else)
d. Incapacity
e. Illegality
f. Infancy
g. Insolvency
3. To be holder in due course, the note must be made payable to the named mortgagee,
original note must be endorsed and signed by mortgagee, original note must be
delivered to the transferee (no copies), transferee must take it in good faith without
notice of illegality, and transferee must pay value for the note.
ii. Recording Statutes Protect Mortgagee-Creditors
1. If debtor sells land, the lien remains on it so long as the mortgage instrument has
been properly recorded. Later buyers take subject to properly recorded lien
(because they are on record notice)
iii. If land is sold, the 2d buyer becomes primarily liable, and 1 st buyer is secondarily liable for
the mortgage. But, if 2d buyer takes “subject to the mortgage,” he assumes no liability
(through the mortgage can be foreclosed if 1st buyer can’t pay debt).
c. Foreclosure
i. Mortgagee must foreclose via proper judicial proceeding. Sale proceeds satisfy debt.
1. If proceeds are less than amt owed, creditor may bring deficiency action.
2. If proceeds are more, the surplus goes to the debtor (minus attorney’s fees,
expenses from foreclosure, and interest due on the mortgage).
ii. Effect of foreclosure on various interests
1. Terminates interests junior to the mortgage being foreclosed, but doesn’t affect
senior interests. Once superior foreclosure has occurred, junior lienholders can’t
look to land for satisfaction.
2. Those with interests subordinate to the foreclosing party and the debtor-mortgager
are necessary parties and must be joined.
a. Failure to include necessary party preserves that party’s claim – mortgage
remains on the land.
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3.
Foreclosure doesn’t affect any interest senior to the mortgage being foreclosed. This
means that the buyer at foreclosure isn’t personally liable on senior debt, but the
senior lienholder may foreclose on the land. Thus, foreclosure sale buyer has strong
incentive to pay off the lien to avoid future foreclosure (and take it out of the sale
price).
iii. Priorities
1. Creditors must recorded (until they record, they don’t have priority)
2. Once recorded, priority is determined by first in time, first in right.
3. Purchase money mortgage: mortgage given to secure a loan that enables debtor to
acquire the encumbered land. This type of mortgage has “superpriority.”
d. Redemption
i. Equitable redemption is universally recognized up to the date of the foreclosure sale. Up to
the date of sale, the debtor has the right to redeem, freeing the mortgage.
1. Once foreclosure has happened, the right to equitable redemption is gone.
2. Accomplished by paying the missed payments + interest + costs
3. Acceleration clauses are common, requiring the full balance to be paid
4. Debtor may not waive right to redeem in the mortgage (called “clogging equity of
redemption”)
ii. Statutory Redemption
1. Gives debtor the right to redeem for a period after the foreclosure sale has occurred
(6 months to a year). The amount paid is usually the foreclosure sale price rather
than the amount of the original debt.
X. Miscellaneous Issues
a. Lateral Support
i. If land is improved by buildings and adjacent landowner’s excavation causes land to cave in,
the excavator is only liable if he acted negligently.
ii. For strict liability to apply, landowner must show that improvements didn’t contribute to the
collapse.
b. Water Rights
i. Riparian Doctrine
1. Water belongs to those who own the land bordering the water course.
2. Riparians get reasonable use of water, but are liable for unreasonably interfering
with others’ use of the water
ii. Prior Appropriation Doctrine
1. Water initially belongs to the state, but the right to divert it and use it can be
acquired by an individual regardless of riparian status.
2. Rights are determined by priority of beneficial use (e.g., agriculture). First in time,
first in right generally is the norm.
iii. Groundwater: surface owner is entitled to make reasonable use that is not wasteful.
iv. Surface waters: landowner may change drainage as long as it doesn’t damage others
c. Possessor’s Rights: possessors have the right to be free from trespass and nuisance
i. Trespass: invasion of land by tangible physical object.
1. To remove, possessor brings an action for ejectment.
ii. Private nuisance: substantial and unreasonable interference with another’s enjoyment of
land. Includes odors and noise.
1. Defendant not liable for hypersensitive Plaintiffs.
d. Eminent Domain
i. Government’s 5th Amendment power to take private property for public use in exchange for
just compensation.
ii. May be through explicit taking or regulation that wipes out an investment.
e. Zoning
i. Pursuant to police powers, government may enact statutes to reasonably control land use.
ii. Variances are used to achieve flexibility. Proponent must show:
1. Undue hardship
2. That variance won’t cause detriment to neighboring property values.
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iii. Nonconforming uses: once lawful uses that are deemed nonconforming cannot be eliminated
all at once, unless just compensation is paid.
iv. Exactions (amenities a government seeks in exchange for zoning permit) are
unconstitutional if they are not reasonably related in nature and scope to the impact of the
proposed development.
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