REAL PROPERTY

1. REAL PROPERTY (It’s not personal)

2. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#1 Beth owns a corporate office park in Ohio. Her ownership rights include the right to sell or give away the property without restriction, as well as the right to commit waste, if she chooses. Beth’s ownership interest is • a. a fee simple absolute. • b. a leasehold estate. • c. a life estate. • d. the power of eminent domain.

3. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#1 ANSWER: A Fee simple owner can do anything they want to, subject to laws or ordinances affecting all other property owners. These would limit ability to commit waste, for instance, if dilapidated buildings were regulated.

4. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#2 With respect to Adam’s land, Bob has an easement, Carol has a profit, and Don has a license. A right to possess the land is owned by • a. Adam, Bob, and Carol only. • b. Adam and Don only. • c. Adam only. • d. Bob, Carol, and Don only.

5. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#2 ANSWER: C Nasty question, I agree: What would answer be if Ed had a lease on Adam’s land?

6. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#3 Regional Construction Company has a right to drive its trucks across Standard Business Corporation’s property, which is adjacent to Regional’s office. This right is • a. a leasehold estate. • b. a license. • c. an easement. • d. a profit.

7. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#3 ANSWER: C Roads, pipelines, power lines, utility installations, etc. are normally on easement estates.

8. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#4 Wood Products Corporation, which owns no land, has a right to cut trees from Natural Resource Company’s land. Wood’s right is • a. a leasehold estate. • b. a license. • c. an easement. • d. a profit.

9. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#4 ANSWER: D Profit is a right to enter and take something away from land. What about a hunting arrangement?

10. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#5 Investment Properties Corporation conveys an office building to Jay with a deed that makes the greatest number of warranties and provides the most extensive protection against defects of title. This deed is • a. a grant deed. • b. a quitclaim deed. • c. a special warranty deed. • d. a warranty deed.

11. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#5 ANSWER: D Deed warrants property to grantee as against all claims, whether arising from things that the grantor did or things that others in the chain of title before him did. …and Grantor does hereby bind itself to warrant and forever defend all and singular the Property unto Grantee against every person whomsoever, lawfully claiming or to claim the same or any part thereof.

12. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#6 • Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants only that Opal held good title during her ownership of the property. This deed is • a. a grant deed. • b. a quitclaim deed. • c. a special warranty deed. • d. a warranty deed.

13. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#6 ANSWER: C The special warranty deed adds a qualifier at the end of the warranty clause to limit the grantor’s liability: and Grantor does hereby bind itself to warrant and forever defend all and singular the Property unto Grantee against every person whomsoever, lawfully claiming or to claim the same or any part thereof, by through or under Grantor but not otherwise.

14. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#7 Manhattan Developers, Inc., pays Northeast Trust Company to release its claim to a strip of waterfront property. Northeast gives Manhattan a deed that conveys only whatever interest Northeast has in the strip. This deed is • a. a grant deed. • b. a quitclaim deed. • c. a special warranty deed. • d. a warranty deed.

15. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#7 ANSWER: B Actually not a conveyance of property, but a relase of any claim to property. Effect is to give the grantee whatever interest, if any, that the grantee may have.

16. Recording Statutes • Recording a deed (or any interest in real property) puts the public on notice of the new owner’s interest in the land and prevents the previous owner from fraudulently conveying the same interest to another buyer. • Race statute. • Pure notice statute. • Notice-race statute.

17. Will or Inheritance • Owner of real property dies, his property is transferred by: • Will (testate). • Without Will (intestate). • Title is transferred at the time state law so provides in its testate and intestate laws.

18. Adverse Possession • One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be: • Actual and exclusive. • Open, visible and notorious. • Continuous and peaceable. • Hostile and adverse.

19. Real Property & Environmental LawTRUE/FALSE QUESTION#3 Adverse possession has the same legal result as a tenancy at sufferance.

20. Real Property & Environmental LawTRUE/FALSE ANSWER#3 ANSWER: F No, it’s much stronger than that! First, what’s a tenant at sufferance? Adverse possession results in what’s called a “limitations” title which can be a fee simple.

21. Real Property & Environmental LawTRUE/FALSE QUESTION#4 Eminent domain refers to the ultimate right of an owner in fee simple absolute to transfer the property by will to whomever he or she wishes.

22. Real Property & Environmental LawTRUE/FALSE ANSWER#4 ANSWER: F Eminent domain is the right of the government to take property for public use

23. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#8 Bay City wants to acquire undeveloped land within the city limits to convert into a public park. Bay City brings a judicial proceeding to obtain title to the land. This is • a. adverse possession. • b. an easement. • c. constructive eviction. • d. the power of eminent domain.

24. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#8 ANSWER: D Where in the constitution does it say the City can do this?

25. Leasehold Estates • Anyone who rents housing to the public for commercial purposes subjects herself to various state and federal Landlord-Tenant laws. • Owner of the property is the LESSOR and Tenant is LESSEE; the contract is called the LEASE. The property interest is called a leasehold estate.

26. Real Property & Environmental LawTRUE/FALSE QUESTION#7 Contract doctrines do not apply to landlord-tenant relationships.

27. Real Property & Environmental LawTRUE/FALSE ANSWER#7 ANSWER: F Leases are heavily governed by contracts…

28. Tenancy Interests • Tenancy for Years. • Created by an express contract. • Property is leased for a specified period of time. • Periodic Tenancy. • Does not specify how long lease lasts. • But rent paid at certain intervals. • Tenancy at Will. • For as long as both agree. • Tenancy at Sufferance. • Wrongful possession without the right to possess.

29. Real Property & Environmental LawTRUE/FALSE QUESTION#5 A periodic tenancy is created by an express contract under which property is leased for a specified period of time.

30. Real Property & Environmental LawTRUE/FALSE ANSWER#5 ANSWER: False No, what’s described here is a tenancy for years (even if it’s only months). You may think of a periodic tenancy as measured by the rent period, in a sense, since you are entitled to one rent period’s notice to leave.

31. Real Property & Environmental LawTRUE/FALSE QUESTION#6 A tenancy for years is created by a lease that does not specify how long it is to last but does specify that rent is to be paid at certain intervals.

32. Real Property & Environmental LawTRUE/FALSE ANSWER#6 ANSWER: False

33. Landlord-Tenant Relationships • Lease Agreement can be oral or written (oral may not be enforceable). Lease gives Tenant the temporary right to exclusively possess the property. • Sources of Law: • Common Law. • State and Local Statutes

34. Lease Agreement • Form of the Lease (required elements): • Must express intent to establish the lease. • Provide for transfer of possession to the Tenant. • Provide for the Landlord’s “reversionary” interest. • Describe the property. • Indicate length of the term, amount of rent, when and where rent paid. • Illegality.

35. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#9 Dora leases a house from Evan for a two-year term. To ensure the validity of their lease, it should include • a. a description of the premises. • b. a due date for the payment of the property taxes. • c. a requirement that Dora perform structural repairs to the house. • d. a requirement that Evan carry liability insurance.

36. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#9 ANSWER: A Only A is necessary to the validity of the lease; the other things are all very good ideas and examples of the many things that need to be addressed in a lease.

37. Rights and Duties • Trend in the law is to curtail, by contract and real estate law, the immense freedom that Landlords had in the past. • Possession. • Using the Premises. • Maintaining the Premises. • Rent.

38. Rights and Duties • Landlord has a duty to deliver legal right to possession. • Tenant’s right to exclusive possession is only subject to Landlord’s limited right to come unto the property. • Tenant has a “covenant of quiet enjoyment” by which Landlord promises Tenant’s peace and enjoyment of the property.

39. Real Property & Environmental LawTRUE/FALSE QUESTION#8 Under the covenant of quiet enjoyment, a landlord promises that a tenant will not be disturbed in the use of the premises.

40. Real Property & Environmental LawTRUE/FALSE ANSWER#8 ANSWER: True How might a landlord breach this covenant?

41. Rights and Duties • Eviction occurs when Landlord: • Deprives Tenant of possession of the leased property; or • Interferes with this use or enjoyment of the property to the extent that Tenant cannot use or enjoy. • Constructive eviction occurs when Landlord: • Breaches lease or covenant or quiet enjoyment; and • Makes it impossible for the Tenant to use and enjoy the property.

42. Rights and Duties • Residential property – More regulated: Landlord may be required to be responsible for higher level of maintenance (particular safety/security related items) and less flexibility to limit tenant remedies. • Commercial property – Less regulated: still allows parties to agree for the most part (implied warranty of commercial suitability).

43. Rent • Rent is Tenant’s payment to the Landlord for the Tenant’s occupancy or use of the Landlord’s real property. • Payment based on agreement, custom, state statute, waiver. • Security Deposits. • A deposit by Tenant which Landlord may retain for non-payment of rent or damage to premises.

44. Tenant’s Remedies • If Landlord breaches the warranty of habitability, depending on state law, Tenant may: • Withhold rent -- put in escrow. • Repair and Deduct -- notify, repair, and deduct repair from rent. • Cancel the Lease -- must be constructive eviction or breach of habitability. • Sue for Damages -- difference between what paid for and what received.

45. Real Property & Environmental LawTRUE/FALSE QUESTION#9 When a landlord sells leased premises to a third party, any existing leases terminate automatically.

46. Real Property & Environmental LawTRUE/FALSE ANSWER#9 ANSWER: False Leases usually* are encumbrances that remain in place when property is sold. It is said that the property is sold “subject to” the lease. The buyer simply becomes the landlord. *Depends on the contract, however!

47. Transferring Rights to Leased Property • Transferring Landlord's Interest. • Landlord may sell any and all of his rights in the real property. • New owner buys “subject to the lease,” if lease is recorded. • Transferring Tenant’s Interest. • Landlord’s consent may or may not be required by statute or the lease itself.

48. Transferring Rights • Transferring the Tenant’s Interest (cont’d) • Assignments: Tenant transfers his entire interest in the lease to a third person. Original Tenant is not released from liability under the lease. • Subleases: Tenant transfers all or part of his interest in the lease for a shorter period of time than the lease. Original Tenant is not relieved of liability under the lease.

49. Real Property & Environmental LawMULTIPLE-CHOICE QUESTION#11 Allen owns a duplex that he leases to Brad and Cora. Allen may sell • a. the duplex at any time. • b. the duplex, but only after the lease term expires and Brad and Cora have moved out. • c. the duplex, but only with Brad and Cora’s permission. • d. the lease, but not the duplex.

50. Real Property & Environmental LawMULTIPLE-CHOICE ANSWER#11 ANSWER: A He can sell the duplex “subject to” the lease. What rights do Brad and Cora have to dispose of the leasehold interests that they have?