Instructions:
Go to “Slide Show” on the upper menu bar and select “View Show”.
Use the down cursor key to move through the slides. Answers slide
in underneath the questions.
Note that if you hit ESCAPE in the middle of working through the
slides, you will have to start from the beginning and skip through to
where you left off.
There are 107 questions total.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q1: What is the bumper sticker for MIDKIFF?
For a use of the police power / a taking to be constitutional, it must
be rationally related to a conceivable public purpose.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q2: What is the bumper sticker for LORETTO?
A: A permanent physical occupation is a taking, period.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q3: What is the bumper sticker for HADACHECK?
A: Regulations without compensation are appropriate to prevent
common law nuisances.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q4: What is the bumper sticker for PENN COAL?
A: When a regulation goes too far, it will be considered a taking.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q5: What is the bumper sticker for LUCAS?
A: If a regulation reduces the economic value of land to zero, then it
is a taking.
Side note: If the background of common law had supported the
regulation (e.g. if the proposed use was a nuisance, the above does
not apply).
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q6: What is the bumper sticker for PENN CENTRAL?
A: When a reasonable investment backed expectation is infringed
upon, there may be a taking.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q7: What is the bumper sticker for NOLAN?
A: There must be an essential nexus between the public
purpose/goal of the exaction and what is being exacted.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q8: What is the bumper sticker for DOLAN?
A: There must be a rough proportionality between the cost of the
exaction upon the developer, and the cost of the developer’s action
on the public.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q9: What are the two questions to ask about a proposed government
taking through eminent domain?
A: Can government do it? (I.e. is it constitutional)
Must government pay? (Must they compensate the landowner).
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q10: PILGRIM COAL was a case cited by Justice Holmes in
the PENN COAL case. What “balancing test” did Holmes
refer to from Pilgrim Coal that could be used to decide if a
regulation had gone too far?
A: He referred to an “average reciprocity of advantage” – that either party subject
to the regulation would experience approximately equal benefit and detriment,
such that neither was significantly advantaged/disadvantaged as compared to the
other.
In Pilgrim Coal, a regulation required two mining companies to leave a wall
between their neighboring mines, that way if one mine flooded the other would
not. The average reciprocity of advantage was satisfied, both mines benefited
from the increased safety of their miners. The burden on each was also about
equal.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q11: In PENN CENTRAL, what did Justice’s Brennan and
Rehnquist focus their attention on in deciding if the regulation
amounted to a taking?
A: Justice Brennan focused on what was left – the owners had not
been deprived of all economic value, hence there was no taking.
Justice Rehnquist (dissenting) focused on what was taken – the air
rights to develop above Penn Central station and what the air rights
were worth, and whether the TDRs (Transferred Development
Rights) were adequate compensation.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q12: Did LORETTO focus on what was taken, or what was
left?
A: What was taken: two cubic feet of space on the roof.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q12: Did HADACHECK focus on what was taken, or what
was left?
A: Actually, because nuisance law was applied, it didn’t matter.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q13: Did PENN COAL focus on what was taken, or what was
left?
A: What was taken: the coal that the coal company was required to
leave un-mined so that there were support columns.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q14: Did LUCAS focus on what was taken, or what was left?
A: What was left: essentially nothing of any economic value.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q15: What “reasonable investment back expectations” did the
court set out to protect in:
•PENN COAL
•PENN CENTRAL
•LUCAS
A: In PENN COAL: the coal company expected to mine ALL of the
coal, not just some of it. Being forced to leave coal in the columns
interfered with that.
In PENN CENTRAL: Rehnquist wanted to protect the owner’s
investment expectation to be able to develop the property further.
In LUCAS: the expectation to build houses on the lot was
reasonable because it was not a common law nuisance.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q17: What principle is illustrated in PALAZZOLO v. RHODE
ISLAND?
A: The court found that because the restriction on land use (the land
was protected wetlands) left the plaintiff with $200,000 worth of
developable land, he had not been deprived of all economic value,
therefore there was no taking.
A person must be deprived of ALL economic value of their land in
order for the regulation to be a taking.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q18: What is an exaction?
A: An exaction is a condition placed upon the development of land,
e.g. you may build X only if you agree to term Y.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q19: In the NOLLAN case the California Coastal Commission
(defendant) wanted the public to be able to see the beach from
the road, and the exaction asked of NOLLAN required
permanent physical access to the beach across NOLLAN’s
land. Why is this a problem?
A: There is no essential nexus between the public purpose/goal of
the exaction and what the exaction requires. The public having
physical access across NOLLAN’s land bears no relationship to the
public being able to see the beach from the road.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q20: Briefly describe how the Texas Open Beaches Act
functioned to gain permanent physical access to privately
owned beach property without a taking.
A: The Act used the background of common law. Because the public
had 10 years of uninterrupted physical access to the land, the owner
loses their right to exclude others.
In brief the Act says that from the mean high tide mark to the vegetation line is
open to the public. If the vegetation line is pushed back behind a beachfront house
and the house is more than 50% destroyed, it cannot be rebuilt.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q21: First English Evangelical v. County of Los Angeles
completed Justice Holmes’ statement in Penn Coal. What
statement, and what was the completion?
A: The statement completed was “when a regulation goes too far it
will be recognized as a taking”. The completion is “…and
government must pay.”
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q22: One group loves exactions and another group hates them.
Who are the groups and why do they feel that way?
A: Local governments love exactions; it’s like printing money. It is a
common means of funding public improvements.
Developers hate exactions. Exactions just add extra costs and
conditions to their development plans.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q23: The rule coming from the DOLAN case regarding
exactions was that there must be _________ ?
A: There must be a rough proportionality between what is required
by the exaction (in Dolan’s case, title to some of her land to build a
flood easement and a bike path) and what is permitted in return (in
Dolan’s case, she wanted to enlarge her store).
Note: The easiest way to think of rough proportionality is that the
government can’t ask for your entire garden in exchange for their
permission for you to build a mailbox. No rough proportionality.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q24: What is an inverse condemnation?
A: This is the flipside of a taking. It’s when an owner files suit to
institute a forced sale of the land.
An example is the CAUSBY case where a chicken farmer moved
for an inverse condemnation of his land because noise from a
nearby military airport stopped his chickens from producing eggs.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q25: What political undertones did Mixon reference with
regard to MIDKIFF?
A: That it seems odd that a Republican Judge like Sandra Day
O’Connor would appropve of legislation that took land from a few
powerful landowners and forced it’s sale to the regular folks. But
look at who really benefited from the sale…arguably it was the rich
landowners because they were able to sell all of their land free of
federal gains taxes.
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q26: Dolan v. City of Tigard’s requirement that regulations be
measured for “rough proportionality” is conceptually most
similar to:
A: Penn Coal v. Mahon’s distinction between regulations that
provide an average reciprocity of advantage and those that go “too
far” and require compensation.
[Fall 1999 Exam, Q1]
(c) Daragh Carter, UHLC 2002.
Eminent Domain / Regulatory Takings
Q27: A city adopts an ordinance that requires all houses in the “blue
district to be painted blue, all in the “red” district to be painted red and all
in the “green” district to be painted green. When challenged, the city
justified its ordinance as reducing danger to public health from diseasecarrying mosquitos. The single most pertinent case to cite to rebut the city’s
claim is:
A: Nollan v. California Coastal Commission.
Because there is no essential nexus between what the ordinance is asking for –
painting houses – and the purpose/goal of the ordinance – mosquito danger
control.
[Fall 1999 Exam, Q2]
(c) Daragh Carter, UHLC 2002.
Philosophical Sidebar
Q28: What does “rational maximizer of utility” mean?
A: Everyone is a rational maximizer of utility – we all try to get the
most out of our environment and interactions.
(c) Daragh Carter, UHLC 2002.
Philosophical Sidebar
Q29: Does the situation below pass Pareto-Superiority?

A: Yes, because some people are better off, one is unaffected, and
nobody is worse off.
(c) Daragh Carter, UHLC 2002.
Philosophical Sidebar
Q30: Does the situation below pass Pareto-Superiority?

A: No, because while the majority of people are better off, one is
worse off. A situation will fail Pareto-Superiority if A situation will
fail Pareto-Superiority if anyone is worse off than before.
(c) Daragh Carter, UHLC 2002.
Philosophical Sidebar
Q31: Does the situation below pass Kaldor-Hicks?

A: Yes. If the “winner’s” gain is sufficient such that the winner
could compensate the “loser” adequately, that passes Kaldor-Hicks.
We don’t actually care whether the loser is compensated or not,
because that does not affect the efficiency of the transaction.
(c) Daragh Carter, UHLC 2002.
Philosophical Sidebar
Q32: What is a cost externality?
A: A cost that occurs in a transaction that is not figured into the
market cost of something. For example, the cost of pollution from
refineries is an external cost that is not figured into the cost of
gasoline.
(c) Daragh Carter, UHLC 2002.
Zoning
Q33: What was said of zoning at the district court level in
AMBLER v. EUCLID?
A: The district court found that zoning was unconstitutional. The
court felt that no legitimate public purpose was served by zoning,
and that it functioned to cause economic segregation (keep the poor
away from the rich).
Zoning flunked the “Can government do it” test as far as the district
court was concerned.
(c) Daragh Carter, UHLC 2002.
Zoning
Q34: What was said of zoning at the Supreme Court level in
AMBLER v. EUCLID?
A: The supreme court felt that zoning was constitutional; it
advanced the public interest by restricting certain types of land use,
thus providing sunshine and fresh air.
(c) Daragh Carter, UHLC 2002.
Zoning
Q35: What was the test for constitutionality of zoning as
applied by the Supreme court in AMBLER?
A: The supreme court looked to see if there was a substantial
relation between zoning and the public health, safety, morals or
general welfare.
(c) Daragh Carter, UHLC 2002.
Zoning
Q36: Which member of the supreme court was apparently
asleep at the switch for AMBLER and why?
A: Possibly Justice Holmes who had decided Penn Coal (with its
average reciprocity of advantage) just 4 years earlier.
Mixon says that Holmes must have been sleeping in the corner for
Ambler, though it’s possible that if he had been awake he might just
have said “Oh well, zoning is ok, everyone it affects everyone about
the same”.
(c) Daragh Carter, UHLC 2002.
Zoning
Q37: The supreme court’s decision in AMBLER is arguably an
example of what?
A: Issue framing. On one hand it can be argued that zoning is
targeted at maintaining the public health, safety, morals and general
welfare. Alternatively it’s purpose is to segregate the poor apartment
dwellers from the rich single family home owners.
(c) Daragh Carter, UHLC 2002.
Zoning
Q38: Euclidean zoning is said to be cumulative. What does
this mean?
A: It means that higher uses (for example residential housing) is
permitted in lower use zones (for example an industrially zoned
area), but not vice-versa.
(c) Daragh Carter, UHLC 2002.
Zoning
Q39: The SZEA (Standard Zoning Enabling Act) was enacted
in 1922. It enables local government to___________?
A: enact zoning ordinances in accordance with a comprehensive
plan.
(c) Daragh Carter, UHLC 2002.
Zoning
Q40: What are the steps involved in adopting a zoning
ordinance?
A: 1. Appoint a zoning commission.
2. The commission draws up a zoning plan and map regulations to
designated districts
3. The commission listen to the community and get their feedback.
4. The mayor/city council hear the commission recommendations,
then hear from the citizens, then vote on the ordinances.
(c) Daragh Carter, UHLC 2002.
Zoning
Q41: The Zoning Commission is a party involved in zoning.
What is their function?
A: The zoning commission draws up the initial proposed zoning
ordinance and then remains in some capacity to oversee proposed
amendments to the zoning ordinance.
(c) Daragh Carter, UHLC 2002.
Zoning
Q42: The Board of Adjustment is a party involved in zoning.
What is their function?
A: The Board of Adjustment hears the cases of individual
landowners wishing to use their land for a purpose not approved by
the zoning ordinance. The Board has the power to grant variances: a
variances is an approval of a non-conforming use.
(c) Daragh Carter, UHLC 2002.
Zoning
Q43: What is a special exception, and who grants it?
A: Granted by the Board of Adjustment. A special exception is a
land use that is conforming to the zoning ordinance, but which
needs special oversight to avoid possible problems down the line.
Example: Placement of a school might need a special exception –
don’t want to put the school next to a freeway where the kids might
be endangered.
(c) Daragh Carter, UHLC 2002.
Zoning
Q44: What is a zoning amendment, and who grants it?
A: Granted only by the zoning commission. This is literally what it
says it is, a change to the zoning ordinance/laws.
(c) Daragh Carter, UHLC 2002.
Zoning
Q45: What is a special use permit, and who grants it?
A: Granted by the city council. Provides permission to make special
use of a property.
(c) Daragh Carter, UHLC 2002.
Zoning
Q46: What is spot zoning?
A: A departure from the comprehensive plan which singles out a
particular tract of land for special treatment, typically to benefit the
individual landowner/developer without regard for the interests of
the surrounding community.
(c) Daragh Carter, UHLC 2002.
Zoning
Q47: The legislative/adjudicative question. Which parties are
supposed to behave in which manner?
A: The Board of Adjustment is supposed to behave in a purely
adjudicative manner and deal only with the case before them rather
than trying to work to shape law/policy.
The city council is supposed to perform a legislative function is
shaping zoning law rather than behaving adjudicatively to serve the
interests of one/a small number of persons.
(c) Daragh Carter, UHLC 2002.
Zoning
Q48: A special use permit is granted by city council. Is this a
legislative or adjudicative function?
A: Debatable! Mixon says it is kind of both.
(c) Daragh Carter, UHLC 2002.
Zoning
Q49: What is the substantive due process requirement for
zoning?
A: The zoning must be rationally related to the conceivable public
purpose of furthering public health, safety, morals and general
welfare through the comprehensive plan upon which it is based.
(c) Daragh Carter, UHLC 2002.
Zoning
Q50: What is Planned Unit Development?
A: A provision in a zoning ordinance which anticipates future nonconforming uses in a way such that when they do come up, they are
automatically accommodated by the zoning ordinance and approved
(so there is no need for a zoning amendment).
(c) Daragh Carter, UHLC 2002.
Zoning
Q51: What problems are inherent with small-scale rezoning by
popular procedures (I.e. a vote)?
A: Voter turnout is usually poor, and a small number of neighbors
can have veto power.
(c) Daragh Carter, UHLC 2002.
Zoning
Q52: What happens when a property that is being put to a nonconforming use changes hands?
A: Usually the right to the non-conforming use runs with the land,
so it may be continued after the land is sold.
(c) Daragh Carter, UHLC 2002.
Zoning
Q53: In cases of destruction or abandonment of a piece of land
that is being put to a non-conforming use, what happens?
A: Usually the right to the non-conforming use terminates.
(c) Daragh Carter, UHLC 2002.
Zoning
Q54: What is the function of the vested rights doctrine in
zoning?
A: If a property owner is caught mid-stream as they are developing
a piece of property for what has become a non-conforming use due
to a change in the zoning laws, they may be able to continue with
the proposed use, subject to how much has been invested already.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q55: An exclusive listing agreement versus an open
agreement. What’s the difference,which do brokers prefer, and
why?
A: Under an exclusive agreement, the broker gets commission
whether they are the direct cause of the sale or not (they prefer this,
it guarantees them $s). Under an open agreement, the broker gets
commission only if they caused the sale.
Exclusive agreement also works to homeowners advantage: broker
will get out there and peddle their property to get their commission
asap.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q56: What is the function of an earnest money contract?
A: The potential buyer signs the EMK and puts down the money to
show that they are serious about their offer. If they try to back out
after the seller accepts the offer, the seller keeps the earnest money.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q57: How many policies does a title insurance company write,
to whom, and why?
A: Two. One to the buyer so they are assured that the seller is the
rightful owner entitled to sell them the property. One to the
mortgagee (bank) so the bank is assured that in the event of a
foreclosure because of default, there are no title issue in the way of
foreclosing.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q58: The Part Performance Doctrine is an exception to the
Statute of Frauds, and provides that under what circumstances
may an oral contract for the sale of land be enforced?
A: When:
1. The buyer has taken possession.
2. Some or all of the purchase price has been paid.
3. The buyer has made improvements to the property.
(Comparable to unjust enrichment/restitution in contract law – part
performance doctrine prevent seller from being unjustly
enriched because there is no written K).
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q59: Estoppel is another doctrine that might provide some
relief from the statute of frauds requirement that a sale of land
be in writing. What is required for estoppel?
A: A promise (oral K for sale of land)
A reliance on that promise
A detriment as a result of that reliance.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q60: If a property is subject to a lien or deed restrictions, is it
by definition not marketable?
A: Not necessarily. A property may be subject to restrictions and
still have marketable title provided none of those restrictions
have been violated.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q61: When is title not marketable?
A: When it exposes the title holder to the threat of litigation.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q62: What is a quiet title action?
A: A quiet title action is when an adverse possessor bring suit
against the original possessor of land hoping to legally secure
title away from them (probably by a default judgment).
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q63: The M&Ms case is an example of the requirement of
what?
A: Tender. Both parties should tender what was bargained for at the
time of closing. Failure to tender what was agreed upon may be
a breach and subject to damages.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q64: What does the dead cow case illustrate?
A: That you must tender what you contracted for. In the dead cow
case the buyer would say “I didn’t tender for a dead cow, I
tendered for a live cow.”
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q65: Under pure equitable conversion, if a property burns
down between the signing of the earnest money contract and
closing, is the loss on the seller or the buyer? What provision
changes this?
A: The loss would be on the buyer. The UVPRA – Uniform Vendor
Purchase Risk Act mitigates this though, and dictates that the
risk is on the seller until title or possession passes. The seller’s
insurance benefit would convey to the buyer.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q66: If a house seller knowingly misrepresents a defect and
that misrepresentation is relied on to the buyer’s detriment,
what can the buyer do ?
A: The buyer can rescind the contract or sue for damages.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q67: What does the parole evidence rule say?
A: The parole evidence rule says that if you bring forth evidence
that’s contrary to the K, that evidence is incompetent to effect
the K all the same.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q68: The Doctrine of Merger is the property equivalent of the
parole evidence rule. What does the doctrine of merger say?
A: All prior oral and written agreements are trashed and treated as
being preliminary negotiations once the agreement is put into a
final writing. In the case of a house sale, this would be when the
deed is signed and title conveyed.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q69: An implied warranty of quality/habitability with a new
home is good for home many years? Why is it not knocked out
by the doctrine of merger?
A: Good for 10 years. It’s not knocked out by the doctrine of merger
because the warranty takes effect simultaneous to
closing/transfer of title.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q70: Jeremy Bentham said that “common law is dog law”.
What did he mean, and how does this apply to implied
warranty of quality?
A: What he meant was that common law operates such that we wait
until it does something wrong, then we rub it’s nose in it. This
applies to implied warranties because the courts said “We don’t
care what the law was before, we’re finding an implied warranty
of quality from now on.”
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q71: Courts see a privity problem between builders and
subsequent purchasers of new homes. What’s their solution to
this?
A: Simple. They just said that we don’t need privity after all.
Mixon’s thought is that it’s easier just to not find a privity
problem.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q72: What warranties are included with a quitclaim deed?
A: None. All a quitclaim deed says is “Here, whatever title I have I
give to you. I promise nothing.”
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q73: What warranties are included with a special warranty
deed?
A: Only the grantor’s acts are warranted. A SWD says “Here, I did
not mess up this title, but I make no promises as to anyone else.”
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q74: What warranties are included with a general warranty
deed?
A: A general warranty deed guarantees against any defects arising at
any point in the chain of title. A GWD says “Here, there are
absolutely no problems with this title.”
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q75: The covenant of seisin comes with a GWD. What does it
promise?
A: That by the deed the grantee will become the property owner. An
action for breach of covenant of seisin must be brought within
10 years of the property conveyance.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q76: The covenant against encumbrances comes with a GWD.
What does it promise?
A: That there are no outstanding undisclosed liens, violated
restrictions, etc.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q77: The covenant of quiet enjoyment comes with a GWD.
What does it promise?
A: That nobody with superior title will come along and assert a
claim to the property. This is a future covenant and lasts for the
grantee’s lifetime.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q78: What is the golden rule for a forged deed?
A: A forged deed is NEVER enforced.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q79: What is a transfer of chose in action?
A: A deed may act as an assignment of a a chose in action, for
example for breach of the covenant of seisin.
(An assignment is a transfer of a right of action in contract law)
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q80: Briefly explain the deed poll rule.
A: A polled deed is “smooth on top” because it does not have the
grantee’s seal, only the grantors. It used to be that a deed carried
both seals, and the scrivener would use a serrated knife to cut
the deed in two, such that the two halves could be matched
along the serrations to prove authenticity.
Over time deeds came to only have the grantor’s seal. The deed poll
rule says that once a grantee accepts a polled deed they are
bound by its terms, and can’t use their seal not being on the deed
as a means to avoid the contract.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q81: Briefly explain the doctrine of ratification.
A: Occurs when a later act acknowledging a previously invalid
agreement gives in validity.
Demonstrated in GARRETT v. WHITE: Mrs. Garrett signed an agreement that
was invalid because both she and her husband should have signed it. It was
given later validity however when she made another signature after her
husband was dead (so she was the only available signatory), thus her later
signature ratified the previously invalid agreement.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q82: Briefly explain the doctrine of after acquired title.
A: If a conveyance is out of order, I.e. a grantor conveys to a grantee
before they themselves have title, when the grantor does in fact
acquire title, the title “shoots through” to the grantee instead of
resting with the grantor.
Example:
1998: O owns Blackacre. A conveys Blackacre to B.
1999: O conveys Blackacre to A. Title “shoots through” to B instead
of resting with A.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q83: Explain the difference between conveyance with
exception and conveyance with reservation.
A: Conveyance with exception: The grantor retains the excepted
portion of the property before conveying the rest.
Conveyance with reservation: The grantor conveys the entire
property, then the grantee re-conveys the reserved portion back
to the grantor.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q84: Further explanation of reservation/exception:
A: Using a pepperoni pizza as an analogy:
Reservation: The grantor hands the slice of pizza to the grantee. The grantee then
hands back the pieces of pepperoni.
Exception: The grantor removes all the pieces of pepperoni from the pizza, then
hands the slice to the grantee.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q85: Why do we have the requirement of delivery in gift
giving?
A: To protect people from their rash promises. The requirement of
delivery adds an extra “layer of protection” for people such that
they are shielded from any rash promises they make.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q86: When a donor leaves a deed with a 3rd party, what does a
court usually use to decide a contest between the donor’s heirs
and the person to whom the donor intended to gift the
property?
A: The court will typically settle the dispute as to who should
prevail based upon whether the 3rd party has conveyed the deed
to the donee or not.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q87: How does the requirement of delivery function to protect
an out-of-state grantor in a commercial transaction?
A: An out-of-state grantor can sign a title and mail it to the escrow
agent to hold until the grantee makes payment. The signed title
will not be given effect until the grantee tenders payment, thus
the out-of-state grantor is protected from title passing to the
grantee before payment is made.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q88: An EMK contains a conditional clause that the buyer is
obliged to purchase only subject to securing funding. If this
clause is omitted, what effect?
A: The buyer is obliged to purchase the property for cash.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q89: What is a vendor’s lien, and why do mortgage companies
insist that grantor’s transfer the vendor’s lien to them?
A: All unpaid seller’s of land are entitled to a vendor’s lien.
Mortgage companies want a grantor to transfer the vendor’s lien
to them because once the grantor conveys title and receives the
purchase price, they are out of the transaction, and without an
assignment to the mortgage company, the vendor’s lien would
leave with them.
It is an extra layer of protection for the mortgage company.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q90: Equity of redemption belongs to whom? What is it?
A: It belongs to the grantee. It allows the grantee a second chance to
make good (I.e. to redeem) on missed payments on a property.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q91: Strict foreclosure belongs to whom? What is it?
A: Strict foreclosure belongs to the mortgagee. It allows the equity
judge to set a date by which the mortgagee must be paid the
outstanding amount by the mortgagor, otherwise they lose their
opportunity to redeem and the mortgagee may foreclose.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q92: What is a deficiency judgment?
A: A deficiency judgment is entered against a mortgagor who has
defaulted on their loan, the property has been foreclosed upon,
and there is a deficiency (I.e. the property sold for less than the
loan amount).
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q93: A deficiency judgment can be turned into something
much more unpleasant. What?
A: A creditor may take a deficiency judgment to the county clerk
and have an abstract judgment taken out against the debtor.
“Tentacles” then shoot out and attach themselves to the debtor’s
property as liens. An abstract judgment lasts for 10 years, in TX,
renewable for another 10 at the mortgagee option. Even if the
loan ages out by statute of limitations, the IRS will seek 30% of
the loan amount as 1099 miscellaneous income.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q94: If a property is sold “subject to” a mortgage, who is
liable for a deficiency in the event of a foreclosure? Who
would get a surplus?
A: In the event of a deficiency, the grantor is liable because “subject
to” does not include a promise on the part of the grantee to
assume the debt. In the event of a foreclosure and surplus, the
grantee would get the surplus.
The grantor is liable for the deficiency because of the Foley’s rule –
you can’t escape owing a debt just by selling the subject of the
debt.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q95: If a property is sold “subject to, with assumption of” a
mortgage, who is liable for a deficiency in the event of a
foreclosure? Who would get a surplus?
A: In the event of a deficiency, the grantee is primarily liable and
the grantor is secondarily liable. This is because “assumption of”
is a promise on the part of the grantee to pay the debt.
In the event of a surplus, the grantee would receive the surplus $s.
(c) Daragh Carter, UHLC 2002.
The Land Transaction
Q96: Under an installment land contract, if the grantor had
mortgaged the property unbeknownst to the poor folks making
the installment payments, and the grantor defaults on the
mortgage, if the mortgage company forecloses, what happens
to the poor folks’ interest in the property?
A: Any interest the poor folks have in the property is extinguished.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q97: Mixon described Texas’ recording system as a carrot and
stick (I.e. reward and punishment) system. Explain.
A: An instrument properly recorded serves as notice to all persons
that the instrument exists (the carrot).
If a deed is not recorded however, it is void as to all subsequent
purchasers (the stick).
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q98: How does a race statute function?
A: Between successive purchasers of the same piece of land, the
first one to properly record will prevail.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q99: How does a notice statute function?
A: If a subsequent purchaser had notice of a prior unrecorded
instrument, the subsequent purchaser will not prevail over the
prior grantee.
Note that occupancy of the land may serve as notice in some
instances.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q100: How does a race-notice statute function?
A: A subsequent purchaser of land is protected against prior
unrecorded instruments only when:
(i) The subsequent purchaser had no notice of the prior instrument
(ii) The subsequent purchaser records before the prior instrument is
recorded.
In plain English, under a race notice statute the subsequent purchaser will prevail
if they didn’t know about the other instrument and they win the race to
record.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q101: If a subsequent grantee receives land as a gift, who will
prevail, the prior or subsequent grantee?
A: The prior grantee will prevail, because if the subsequent grantee
received the land as a gift (I.e. at no cost to themselves), they
will suffer no economic injury if the prior grantee prevails.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q102: What basic rule does an equity court follow in deciding
on an ownership dispute?
A: The equity court will follow the decision of the law court,
provided the decision of the law court would not be unjust.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q103:
 O owns a cow.
V, a villain, steals the cow.
P, a purchaser, pays full value
Who prevails in law/equity court?
A: The law court will say that O prevails because O has title. The
equity court will follow this decision because there is no
difference in “fault” or culpability between O and P.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q104:
 O owns a cow.
V, a villain, borrows the cow to use in a bait-and-switch operation at his
used cow lot. Promises not to sell it, but does.
P, a purchaser, pays full value
Who prevails in law/equity court?
A: In this case the equity court would find for P because of O and P,
O is slightly more guilty for going along with the bait and
switch.
The property analog to this is when the escrow agent wrongly
conveys to a grantee before payment is received in a
commercial land transaction.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q105: If V, a villain is able to secure title away from O by
fraud, the equity court would find this unjust and would return
title to O by way of Equity of _________ ?
A: Equity of Recission.
(c) Daragh Carter, UHLC 2002.
Title Assurance
Q106: If V, a villain is able to secure title away from O by
fraud, and then V conveys to P, in order for P to prevail over O
in an equity court, P would have to be a bona fide purchaser
for value. What is required to be a BFP?
A: 1. The purchaser must have title
2. The purchase must have been made in good faith
3. The purchaser must not have had notice
4. The purchaser must have paid value.
(c) Daragh Carter, UHLC 2002.
You’re done,
aren’t you, comma,
question mark.
(c) Daragh Carter, UHLC 2002.