Key Points from Question 1: (D)

1. 1. A landowner was estranged from his son and three small grandchildren. The landowner owned a valuable piece of property that he wanted to pass on to his grandchildren, without his son's involvement. The landowner conveyed the property to his own sister, "for life, remainder to all of my grandchildren who ever attain the age of 25." The grandchildren's interest can best be described as: (A) A contingent remainder. (B) A vested remainder. (C) An executory interest. (D) Nothing.

2. Key Points from Question 1: (D) • Under the Rule Against Perpetuities, an interest in property is not valid unless it will vest, if at all, not later than 21 years after a life in being at the creation of the interest. • The problem in this case is that there is an age contingency beyond age 21 in an open class. • The perpetuities period begins to run on the date the landowner conveyed the property to his sister. After that date, the landowner's son could have additional children, shortly after which the lives in being (the son and the three older grandchildren) might all die. • The additional children's interest would vest when they reach age 25, which is more than 21 years after lives in being.

3. 2. A rancher entered into a contract to sell her land to a developer for $60,000. The contract provided that the rancher agreed to convey a good and marketable title to the developer 60 days from the date of the contract. At the time set for closing, the rancher tendered a deed in the form agreed to in the contract. The developer's examination of the record prior to the date of closing disclosed, however, that the owner of record was not the rancher, but a farmer. Further investigation by the developer revealed that, notwithstanding the state of the record, the rancher had been in what the developer concedes is adverse possession for 15 years. The period of time to acquire title by adverse possession in the jurisdiction is 10 years. The developer refuses to pay the purchase price or to take possession because of the "inability" of the rancher to transfer a marketable title. In an appropriate action by the rancher against the developer for specific performance, the rancher will: Prevail, because she has obtained a "good and marketable title" by adverse possession. Prevail, because the rancher's action for specific performance is an action in rem even though the farmer is not a party. Not prevail, because the developer cannot be required to buy a lawsuit even if the probability is great that the developer would prevail against the farmer. Not prevail, because the rancher's failure to disclose her lack of record title constitutes fraud.

4. Key Points from Question 2: (C) • Title is marketable if a reasonably prudent buyer would accept it in the exercise of ordinary prudence. • This does not require a perfect title, but rather one that is free from questions that might present an unreasonable risk of litigation. • An inability to establish a record chain of title will generally render the title unmarketable. • Here, although the rancher may have acquired title by adverse possession, the developer should not be faced with the prospect of having to prove this in court in the future.

5. 3. An architectural historian bought a house, financing $150,000 of the purchase price with a loan from a bank, secured by a mortgage on the property. The bank recorded its mortgage. Ten years later, the historian borrowed $5,000 from a finance company, using the house as security. The finance company recorded its mortgage on the property. Five years later, the historian obtained a $40,000 mortgage from a savings and loan association to pay for an addition to the house. The savings and loan association did not record its mortgage. Subsequently, the historian lost her job and was unable to make payments on either the finance company or the savings and loan mortgages. The finance company filed foreclosure of its mortgage, and the house was sold to a buyer at the foreclosure sale. After acquiring the property at the sale, what is the buyer's obligation regarding the bank's and the savings and loan association's mortgages? The buyer takes the property subject to both mortgages. The buyer takes the property subject to neither mortgage. The buyer takes the property subject to the savings and loan association's mortgage, but not subject to the bank's mortgage. The buyer takes the property subject to the bank's mortgage, but not subject to the savings and loan association's mortgage.

6. Key Points from Question 3: (D) • A foreclosure sale wipes out all junior mortgages (those that came later in time than the mortgage that was foreclosed) but does not wipe out senior mortgages (those that came earlier). • Because the bank's mortgage preceded the finance company's, it is senior and is not wiped out. • The buyer takes subject to this mortgage.

7. 4. A brother and a sister leased a house from a landlord. During the term of the lease, the sister verbally invited a friend to share the house with her and her brother. The friend agreed to pay part of the rent to the landlord, who did not object to this arrangement, despite a provision in the lease that provided that "any assignment, subletting, or transfer of any rights under this lease without the express written consent of the landlord is strictly prohibited, null, and void." The brother objected to the friend's moving in. When the friend moved in, the brother brought an appropriate action against the landlord, the sister, and the friend for a declaratory judgment that the sister had no right to assign. The sister's defense was that she and the brother were tenants in common of a term for years, and that she had a right to assign a fractional interest in her undivided one-half interest. In this action, the brother will: Prevail, because a co-tenant has no right to assign all or any part of a leasehold without the consent of all interested parties. Prevail, because the lease provision prohibits assignment. Not prevail, because he is not the beneficiary of the nonassignment provision in the lease. Not prevail, because his claim amounts to a void restraint on alienation.

8. Key Points from Question 4: (C) • The landlord, as the beneficiary of the nonassignment clause, could have taken positive action to avoid the transfer, but by accepting rent from the friend, he waived his right to avoid the transfer. • The brother has no such right to contest the transfer because he was not the beneficiary of the nonassignment clause. • Nonassignment clauses in leases are valid. they are not considered to be void restraints on alienation.

9. 5. A seller entered into a contract to sell his land to a buyer for $100,000, with the closing to take place in 30 days. The following week, the seller died in an automobile accident. His will left his personal property to his son and his real property to his sister. At closing, who is entitled to the proceeds of the sale? Neither the son nor the sister, because death, an eventuality for which the parties could have provided, terminates the agreement if they did not so provide. Neither the son nor the sister, because title was rendered unmarketable by the seller's death. The son. The sister.

10. Key Points from Question 5: (C) • Under the doctrine of equitable conversion, a deceased seller's interest generally passes as personal property. • If the seller dies, "bare" legal title passes to the takers of his real property, but they must give up the title to the buyer when the contract closes. • When the purchase price is paid, the money passes as personal property to those who take the seller's personal property (unless the seller specifically devises the land in question to a devisee). • Thus, the son, as the personal property devisee, is entitled to the proceeds of the sale.

11. 6. A brother and a sister owned real property as joint tenants with the right of survivorship. The sister executed a mortgage on the property with a bank to secure a loan. Subsequently, but before the indebtedness was paid to the bank, the sister died intestate with her daughter as her only heir at law. The jurisdiction in which the property is located recognizes the title theory of mortgages. In an appropriate action, the court should determine that title to the property is vested: (A) In the brother, with the entire interest subject to the mortgage. In the brother, free and clear of the mortgage. One-half in the brother free of the mortgage, and one-half in the daughter subject to the mortgage. One-half in the brother and one-half in the daughter, with both subject to the mortgage.

12. Key Points from Question 6: (C) • Because the jurisdiction in which the property is located recognizes the title theory of mortgages, execution of the mortgage on the property effected a severance of the joint tenancy, by passing a title interest from the sister to the bank. • Following severance of the joint tenancy, the brother and the sister held title as tenants in common, with no right of survivorship. • The interest of a tenant in common passes by succession. • When the sister died, the brother could not take the property by right of survivorship because of the severance of the joint tenancy.

13. 7. A brother and a sister inherited their childhood home from their father, taking title as tenants in common. The brother moved into the home, while the sister returned to her residence in a distant city. Although there was no discussion between the brother and the sister concerning their common ownership, the brother paid all taxes, insurance, and other carrying charges on the home. He paid no rent or other compensation to the sister, nor did the sister request any such payment. Thirty years later, a series of disputes arose between the brother and sister concerning their respective rights to the home. The jurisdiction where the land is located recognizes the usual common law types of co-tenancies, and has an ordinary 20-year adverse possession statute. If the brother brings an action against the sister to quiet title to the home in himself, the decision should be for: The brother, because he has acquired title by adverse possession. The brother, because the acts of the parties indicate the sister's intention to renounce her right to the inheritance. The sister, because there is no evidence that the brother has performed sufficient acts to constitute her ouster. The sister, because one co-tenant cannot acquire title by adverse possession against another.

14. Key Points from Question 7: (C) • Actual possession of property held in concurrent ownership by one concurrent owner for the statutory adverse possession period will not be sufficient to give that possessor title to the whole estate to the exclusion of his co-tenant, unless there has been an ouster. • The brother occupied the home under unity of possession with the sister, thus, his possession is not adverse to that of the sister.

15. 8. A developer entered into a written contract to buy a parcel of land from a farmer at a price of $160,000. At the time the contract was entered into, the developer gave the farmer $10,000 earnest money. The closing date was set for April 29. On April 17, the developer's attorney conducted a title search, during which the attorney discovered that the farmer's distant cousin had a legitimate claim to a one-tenth undivided interest in the land. On April 26, the developer paid the cousin $10,000, and the cousin gave the developer a quitclaim deed, surrendering any and all interest the cousin had in the land. The developer informed the farmer of the situation. On April 29, the developer appeared at the title company's office and tendered a certified check to the closing officer, but the farmer never appeared at the closing. The developer asked the closing officer to place the certified check in escrow and promptly sued the farmer for specific performance. Will the developer prevail in his specific performance action? Yes, if the certified check is for $150,000. Yes, if the certified check is for $140,000. No, because the developer should have informed the farmer of the title defect to allow the farmer to obtain marketable title, but the farmer must return the developer's earnest money. No, because the developer has become a co-tenant of the farmer and an action for partition rather than specific performance is appropriate.

16. Key Points from Question 8: (B) • If the vendor of land cannot give marketable title but the purchaser wishes to proceed with the transaction, the purchaser can usually obtain specific performance with an abatement of the purchase price in an amount representing the title defect. • The title defect (cousin’s claim) was cured by the developer at a cost of $10,000. Thus, an abatement will be applied to the purchase price. • The certified check for $140,000 represents the purchase price ($160,000) less the earnest money already paid ($10,000) less the abatement to obtain marketable title ($10,000).

17. 9. An unmarried couple purchased a condominium as tenants in common. Subsequently, the man and the woman made an oral agreement that, on the death of either of them, the survivor would own the entire condominium, and, as a result, they decided they did not need wills. Two years later, the man and the woman were involved in the same automobile accident. The man was killed immediately. The woman died one week later. Both died intestate. The man's sole heir is his brother. The woman's sole heir is her mother. The brother claimed one-half of the condominium, and the mother claimed all of it. The jurisdiction has no applicable statute except for the Statute of Frauds, and it does not recognize common law marriages. In an appropriate action by the mother, claiming the entire ownership of the condominium, the court will find The mother owns the entire interest, because the man and the woman did not make wills in reliance upon their oral agreement. The mother owns the entire interest, because she is entitled to reformation of the deed to reflect the oral agreement. The brother and the mother each own an undivided one-half interest, because the man and the woman each died as the result of the same accident. The brother and the mother each own an undivided one-half interest, because the Statute of Frauds applies.

18. Key Points from Question 9: (D) • The Statute of Frauds requires that any transfer of an interest in land be in writing. • The right of survivorship the man and the woman tried to create by their oral agreement is an interest in land. As such, it must be in writing to be enforceable. • Furthermore, to create a joint tenancy with right of survivorship, the unities of time, title, interest, and possession must be present; i.e., a tenancy in common cannot be converted to a joint tenancy by agreement. • Therefore, the man and the woman remained tenants in common at their deaths, with each undivided one-half interest passing through their respective estates.

19. 10. In compliance with a federal statute requiring buildings to be made accessible to persons with disabilities, a lawyer installed wheelchair ramps at both entrances to his office building located on a parcel of land that he had owned for many years. One year later, the lawyer entered into a contract with an accountant to sell the parcel of land, including the office building. After having the property surveyed, the accountant notified the lawyer that she was not going to complete the sale because the wheelchair ramp on the south side of the building extended over the property line and into the adjoining tract of land, making the title unmarketable. The lawyer insisted that the accountant proceed with the sale, and brought an action to compel her performance. If the court were to find that title is marketable, it will be because: The wheelchair ramp is required by federal law. The lawyer currently owns the adjoining tract of land and acquired it and the office building land as part of a larger parcel. The wheelchair ramp extends only 10 inches over the property line. The contract between the lawyer and the accountant requires the lawyer to convey only a quitclaim deed.

20. Key Points from Question 10: (B) • The court could find the title marketable by finding that an implied easement for the benefit of the office building land was created from the existing use when that parcel of land was severed from the adjoining tract of land by the sale. • Under the circumstances in (B), a court will be able to avoid the encroachment problem by implying an easement from the existing use (a quasi-easement). • If a use exists on the "servient" part of the tract that is reasonably necessary for the enjoyment of the "dominant" part, and a court determines that the parties intended the use to continue after division of the property, an easement will be implied.

21. 11. Fifteen years ago, a homeowner executed his will, devising his home "to my surviving widow for life, remainder to such of my children as shall live to attain the age of 30 years; but if any child dies under the age of 30 years survived by a child or children, such child or children shall take and receive the share which his, her, or their parent would have received had such parent lived to attain the age of 30 years." At the date of writing his will, the homeowner was married to an actress, and they had two adult daughters. The actress died ten years ago, and the homeowner married a dancer two years later. At his death last year, the homeowner was survived by the dancer and three children, the two daughters from his marriage to the actress, and a son. The son, who is six years old, was the homeowner's child by the dancer. The jurisdiction recognizes the common law Rule Against Perpetuities unmodified by statute. The result of the application of the Rule is: The remainder to the children and to the grandchildren is void, because the homeowner could have subsequently married a person who was unborn at the time he executed his will. The remainder to the children is valid, but the substitutionary gift to the grandchildren is void, because the homeowner could have subsequently married a person who was unborn at the time he executed his will. The gift in remainder to the daughters or their children is valid, but the gift to the son or his children is void. The remainder to the children and the substitutionary gift to the grandchildren are valid.

22. Key Points from Question 11: (D) • The homeowner's will created a life estate in the dancer, contingent remainders in the class consisting of the homeowner's children (contingent upon their attaining age 30), and contingent remainders in the class consisting of any children of the homeowner's children (contingent on their surviving their parent, and the parent dying before attaining age 30). • A will speaks at death, no matter when it was executed. Here, the homeowner's will became an effective conveyance only when he died last year. • The grandchildren (i.e., the children of the daughters or the son) do not themselves have to survive to any particular age to take their gifts. • Because there are two future interests in the question, each must be analyzed separately under the Rule Against Perpetuities.

23. 12. A farmer executed and delivered to a developer a quitclaim deed purporting to convey to the developer all of the right, title, and interest of the farmer in his land. The developer accepted the deed and placed it in his safe deposit box. Four years later, the farmer, who was indebted to his cousin in the amount of $35,000, executed and delivered to the cousin a warranty deed purporting to convey the land in exchange for a full release of the debt. The cousin immediately recorded her deed. The following month, the developer recorded his deed to the land and notified the cousin that he claimed title. There is no evidence of occupancy of the land, and the jurisdiction where the land is situated has a recording statute that requires good faith and value as elements of the junior claimant's priority. Which of the following best describes the conflicting claims of the developer and the cousin? The developer cannot succeed, because the quitclaim deed through which he claims prevents him from being bona fide (in good faith). The outcome will turn on the view taken as to whether the cousin paid value within the meaning of the statute requiring this element. The outcome will turn on whether the developer paid value (a fact not given). The developer's failure to record until four years after the conveyance estops him from asserting title against the cousin.

24. Key Points from Question 12: (B) • The cousin's recordation prior to the developer's will protect the cousin's right to the land only if she took the deed in good faith and for value. • Here, the farmer apparently gave the deed to the cousin in exchange for a release from the antecedent debt. • If the jurisdiction in question considers this "value," the cousin will benefit from the recording act because she is a subsequent bona fide purchaser for value, the very person the recording acts seek to protect.

25. 13. A landowner gave his lawyer a power of attorney containing a provision that specifically authorized the lawyer to sell and convey any part or all of the landowner's real property. The lawyer conveyed part of the landowner's land to a developer by deed in the customary form containing covenants of title. The developer sues the landowner for breach of a covenant. The outcome of the developer's suit will be governed by whether: Deeds without covenants are effective to convey realty. The jurisdiction views the covenants as personal or running with the land. The developer is a bona fide purchaser. The power to "sell and convey" is construed to include the power to execute the usual form of deed used to convey realty.

26. Key Points from Question 13: (D) • The outcome of the developer's suit will be governed by whether the power to "sell and convey" is construed to include the power to execute the usual form of deed used to convey realty. • If the lawyer lacked the authority to include covenants for title, the landowner will probably not be bound by those covenants. • Covenants for title are not like real covenants; they are not characterized as personal or running with the land. Covenants for title are either present or future.

27. 14. A developer contracted to buy a parcel of land from a landowner, with deed to be delivered and money paid on August 1. The developer planned to build a high-rise building on the land. The developer had visually inspected the land, but did not take any special notice of the fact that a stream flowed up to the eastern property line of the land and reappeared just beyond the western property line. In fact, there was a conduit under the surface of the land through which the waters of the stream were diverted. On July 28, one of the developer's friends mentioned the existence of the conduit to the developer. When the landowner tendered a deed to the land on August 1, the developer refused to accept it, stating that she would not have tried to buy the land if she had known about the conduit. The landowner files suit, demanding performance by the developer or damages for breach. Who should prevail? The landowner, because the developer had ample opportunity to discover the existence of the conduit before she agreed to buy the land. The landowner, because the purpose for which the developer intended to use the land is irrelevant. The developer, because the landowner had a duty to provide a marketable title. The developer, because of the doctrine of frustration of purpose.

28. Key Points from Question 14: (A) • The law will not protect a party in the developer's situation who failed to protect herself. • The landowner, in the absence of a fiduciary relationship with the developer or of any affirmative representations that the landowner knows or discovers to have been false, has no duty to disclose the existence of the conduit except (in some jurisdictions) if he knows that the developer is laboring under a misapprehension as to a basic assumption and the act of nondisclosure is made in bad faith. • It does not appear that the landowner acted in bad faith, particularly because the landowner permit­ted an inspection and the developer had ample opportunity to discover the truth.

29. 15. A carpenter purchased an old house, planning to slowly fix it up. He financed the purchase by taking out a mortgage on the property with a bank, which recorded the mortgage. The carpenter purchased some custom-made windows from a retail dealer. The modern windows were easily removable from the window frames to make cleaning them easier. The carpenter had lacked sufficient funds to pay the $10,000 the dealer wanted for a complete set of new windows, so the dealer had agreed to sell the windows to the carpenter on an installment payment plan, with the windows as security. The carpenter installed the windows himself and stored the old windows in the basement of the house. The carpenter made three payments to the bank on the $30,000 mortgage, and he made two payments to the dealer on the windows. The carpenter then lost his job and ceased making payments to the bank and the dealer. The carpenter has departed to parts unknown and the dealer wishes to remove the windows from the house. The bank objects and the matter winds up in court. How should the court rule on the dealer's request to remove the windows? The dealer may remove the windows, because the old windows are available for the bank to restore the house to its original condition. The dealer may remove the windows, because the windows are designed to be removable. The dealer may not remove the windows, because regardless of their form, windows are an integral part of the house. The dealer may not remove the windows, because the bank's lien is senior to the dealer's.

30. Key Points from Question 15: (D) • Under the concept of fixtures, a chattel that has been annexed to real property is converted from personalty to realty. • As an accessory to the real property, it is subject to any mortgage on the real property. • In all common ownership cases (i.e., those in which the person who brings the chattel onto the land owns both the chattel and the realty), whether an item that is not incorporated into a structure is a "fixture" (i.e., part of the realty) depends upon the objective intention of the party who made the "annexation." • This intention is determined by considering: (i) the nature of the article, (ii) the manner in which it is attached to the realty, (iii) the amount of damage that would be caused by its removal, and (iv) the adaptation of the item to the use of the realty. • Thus, in view of factors (i) and (iv) above, and considering the carpenter's fee simple ownership and long-term plans for the house, they should be deemed fixtures.

31. 16. At a time when a homeowner held title to a subdivision lot in fee simple, the developer executed a warranty deed conveying the same lot to a purchaser. The deed was promptly and duly recorded. Subsequently, the homeowner conveyed the lot to the developer by a warranty deed that was promptly and duly recorded. Later, the developer conveyed the lot to an investor by a warranty deed, which was promptly and duly recorded. The investor paid the fair market value of the lot and had no knowledge of any claim of the purchaser. In an appropriate action, the investor and the purchaser contest title to the lot. In this action, judgment should be for: The purchaser, because the purchaser's deed is senior to the investor's. The investor, because the investor paid value without notice of the purchaser's claim. The purchaser or the investor, depending on whether a subsequent grantee is bound, at common law, by the doctrine of estoppel by deed. The purchaser or the investor, depending on whether the purchaser's deed is deemed recorded in the investor's chain of title.

32. Key Points from Question 16: (D) • There is a split of authority as to whether a recorded deed, obtained from a grantor who had no title at that time, but who afterwards obtains title, is constructive notice to a subsequent purchaser from the same grantor. • The answer to this question turns on whether the deed from the developer to the purchaser constitutes constructive notice to the investor. • Thus, judgment could be for either the purchaser or the investor.

33. 17. For valuable consideration, the owner of a parcel of land signed and gave to her neighbor a duly executed instrument, which provided that the owner retained the right to sell the property during her lifetime, but at her death, or if she earlier decided to sell, the property would be offered to her neighbor at $500 per acre. The neighbor had to exercise this right, if at all, within 60 days of receipt of said offer to sell. The neighbor recorded the instrument. The instrument was not valid as a will. Is the neighbor's right under the instrument valid? Yes, because the instrument is recorded. Yes, because the neighbor's right to purchase will vest or fail within the period prescribed by the Rule Against Perpetuities. No, because the neighbor's right to purchase is a restraint on the owner's power to make a testamentary disposition. No, because the neighbor's right to purchase is an unreasonable restraint on alienation.

34. Key Points from Question 17: (B) • The neighbor's right to purchase is a preemptive option, which is subject to the Rule Against Perpetuities. • If the option could be exercised more than 21 years after some life in being at its creation, it is void. • The neighbor's right to purchase will vest or fail within 21 years after the owner's death. Thus, the Rule's provisions are satisfied. • Recordation is not essential to the validity of the instrument, as between the grantor and grantee.