REAL PROPERTY 117. REAL PROPERTY Question 52 automobile accident. The landowner’s will left her entire estate to her friend. The nephew’s will A husband purchased a cabin with his separate left his entire estate to the humane society. Last property. The husband provided in his will that year, the brother died. The common law Rule the cabin be devised “to my sister-in-law for so Against Perpetuities is unmodified by statute in long as my wife is alive, remainder to my son.” the jurisdiction. There are no other applicable Shortly thereafter, the husband died. When the statutes. sister-in-law learned of her interest in the cabin, she decided to lease the property. She entered Who owns what interest in the land? into a valid written lease for a term of three years with a tenant, who agreed to pay $3,000 per (A) The niece and the humane society each year rent, with $1,500 due in advance every six own a one-half interest, subject to a life months. The tenant paid the first $1,500 and took estate in the brother’s wife. possession of the property. Two years later, one week after the tenant had paid the $1,500 due for (B) The niece owns the entire interest, subject the ensuing six-month period, the wife died. The to a life estate in the brother’s wife. son demanded that the tenant surrender posses- sion of the cabin, but the tenant refused. (C) The brother’s wife owns the entire interest. In an appropriate action for possession of the (D) The friend owns the entire interest. disputed property, the son will probably: Question 33 (A) Prevail, because his rights are superior to the tenant’s. A landowner conveyed his parcel of land “to my sister and her heirs so long as it is used for (B) Prevail, if he reimburses the tenant for the residential purposes, but if it is ever used for portion of the six months’ rent already paid other than residential purposes, then to the local to the sister-in-law that is attributable to the community center.” period after the tenant surrenders posses- sion. Five years later, the landowner died, devising all of his real estate to his friend and leaving his (C) Lose, because he did not wait to bring the daughter as his only heir. action until the period for which the tenant had already paid rent had elapsed. The following year, the landowner’s sister and the landowner’s daughter entered into a contract (D) Lose, because the tenant has the right to with a third party to sell the parcel to him in fee remain in possession for the last year of his simple for $100,000. After examining title, the lease as long as he pays the final $1,500. third party refused to perform under the contract because he believed the sister and the daughter Question 32 could not deliver good title. A landowner properly executed a warranty The jurisdiction follows the common law Rule deed conveying a parcel of land “to my brother Against Perpetuities and has a statute providing for life, then to his widow for her life, then to my that all future estates and interests are alienable, brother’s children.” At the time of the convey- descendible, and devisable in the same manner ance, the brother was unmarried. A few years as possessory estates and interests. later, he married and had two children, the landowner’s niece and nephew. Three years ago, If the sister and the daughter sue the third party the landowner and the nephew were killed in an for specific performance, their request will be: MPQ-106-Preview-real-prop-exam-rev--L.indd 117 7/23/2013 12:10:02 PM 118. EXAM REVIEW (A) Granted, because the sister owns the parcel Question 14 in fee simple. Two partners bought a commercial building (B) Granted, because the sister and the daughter from an owner. They paid cash for the building together own the parcel in fee simple. and took title as joint tenants with right of survivorship. Several years later, the first partner (C) Denied, because the local community executed a mortgage on the building to secure center has a valid interest in the parcel. a personal loan to a bank. The second partner had no knowledge of the mortgage to the bank. (D) Denied, because the friend has a valid The state in which the commercial building is interest in the parcel. located recognizes the lien theory of mortgages. The first partner died before paying off his loan. Question 80 He left all of his property by will to his daughter, his only heir. Ten years ago, four brothers inherited their father’s 360-acre farm as joint tenants with Who has title to the commercial building? right of survivorship. Three of the brothers immediately moved onto the property and began (A) The second partner has title free and clear farming the land. The fourth brother had no of the mortgage. interest in farming and stayed in the city. (B) An undivided one-half is held by the second Two years ago, a creditor sued and obtained partner free and clear of the mortgage, and a judgment lien on the first brother’s interest in the other one-half is held by the daughter, the farm. This interest was sold to a farmer at a subject to the mortgage. judicial sale in order to satisfy the lien. Last year, the second brother died, leaving a son as his only (C) An undivided one-half is held by the heir. The third brother continued farming the second partner and the other one-half by property. Now, the farmer who purchased the the daughter, with both halves subject to the first brother’s interest at the judicial sale wants to mortgage. start farming the land and seeks a court determi- nation of the parties’ respective interests in the (D) The second partner has title to the entire land. There is a seven-year statute for adverse property, with an undivided one-half being possession in the state. subject to the mortgage. The court should rule that: Question 74 (A) The farmer owns 90 acres, and the second A landlord entered into a written four-year brother’s son, the third brother, and the lease with a tenant for an apartment in the fourth brother own an undivided interest in landlord’s apartment house. The tenant’s lease, 270 acres. and all leases in the apartment house, prohibited the playing of musical instruments between 10 (B) The farmer owns 90 acres, and the third p.m. and 8 a.m. The lease required the tenant brother and the fourth brother each own 135 to pay the rent on a monthly basis. Two years acres. into the lease, the tenant assigned the lease to a nurse with the landlord’s permission. The nurse (C) The farmer owns 90 acres, and the third then assigned the lease to his brother with the brother owns 270 acres. landlord’s permission. The brother went into possession. A neighboring tenant in the same (D) The farmer owns 90 acres, and the third apartment house insisted upon playing a trumpet brother and the fourth brother own an in a loud manner between 2 a.m. and 4 a.m. undivided interest in 270 acres. The brother complained to the landlord without MPQ-106-Preview-real-prop-exam-rev--L.indd 118 7/23/2013 12:10:03 PM REAL PROPERTY 119. success. Unable to sleep each night, the brother If the buyer seeks an injunction prohibiting abandoned his apartment after occupying it for the telephone company from undertaking the two months. planned excavation, the trial court should rule for: If the landlord sues the nurse for the rent due during the period after the nurse’s brother left, (A) The telephone company, because the the nurse’s best defense would be: benefits of installing the new cables outweigh the harm done to the buyer. (A) A breach of the landlord’s covenant of quiet enjoyment. (B) The telephone company, because owner- ship of the easement permits it to make the (B) Estoppel, because the landlord consented to excavation. a further assignment. (C) The buyer, because the telephone company (C) Lack of privity of estate. concealed the existence of the underground (D) Constructive eviction. easement from the buyer when it acquired the overhead easement from him. Question 92 (D) The buyer, because the deed by which he Thirty years ago, a telephone company purchased his property made no mention of purchased an easement from an owner to install, the easement, and he had no actual knowl- inspect, repair, replace, and maintain under- edge of it. ground transmission cables within a speci- fied portion of the owner’s property. The deed Question 47 granting the easement was validly recorded, and the telephone company shortly thereafter laid An owner of 40 acres of mountain land sold underground long distance lines traversing the the western 20 acres to a buyer. Because no owner’s land beneath the area described in the access to any public road existed on the western easement deed. side of the property, the deed conveying title to the buyer included an easement for ingress Fifteen years later, the owner sold a 50-acre and egress that ran along the southern border of portion of his land to a buyer. This portion the owner’s land. This deed was duly recorded. included part of the easement granted to About the same time that this sale took place, the telephone company. The buyer erected a the county extended the public road so that it residence on the purchased land and planted 49 abutted on the buyer’s 20 acres. The buyer then acres of walnut trees. He granted an easement to built a cabin on the property. the telephone company to string aerial telephone wires. The underground easement was never Later, the owner and the buyer both sold their disclosed. 20 acres to the owner’s cousin. The cousin then sold the 20 acres acquired from the buyer to his Last year, the telephone company informed lawyer and sold the other 20 acres to a doctor. the buyer that it would have to excavate under- All deeds involved in the various conveyances ground cables and replace them with new ones. of the 20-acre parcels were validly recorded. This was the first the buyer knew of the cables Neither the cousin-lawyer deed nor the cousin- lying under his land. The cables, lying within doctor deed made any mention of easements or the easement, are directly beneath a row of black rights-of-way. In fact, no use was ever made of walnut trees running the length of the buyer’s the easement. property. Black walnuts have become extremely valuable, and the buyer estimates that their value A few years later, the lawyer sold his 20 acres is approximately $400,000. to a development company that wished to build a MPQ-106-Preview-real-prop-exam-rev--L.indd 119 7/23/2013 12:10:03 PM 120. EXAM REVIEW hunting lodge on the property. The development (B) Prevail, because the owner’s tearing down company now wants to construct a road across of the house and nonuse of the sewer line the doctor’s property in the manner contem- for several years constituted an abandon- plated in the deed from the original owner to the ment of the easement. buyer. (C) Not prevail, because the original sewer line What is the strongest argument as to why the was a license which ripened into an implied development company should not be permitted easement. to construct the road? (D) Not prevail, because the use was within (A) Any easement that might have existed was the scope of the prescriptive easement extinguished by abandonment because of acquired. nonuse. Question 9 (B) Any easement that once existed was termi- nated by merger. A developer prepared and recorded a subdivi- sion plan, calling for 100 home sites on half-acre (C) The county’s subsequent expansion of the lots. There were five different approved plans public road removed the necessity of using from which a purchaser could choose the design the easement across the eastern parcel. of the home to be built on his lot. Each deed, which referred to the recorded plan, stated that (D) Neither the cousin-doctor deed nor the “no residence shall be erected on any lot that has cousin-lawyer deed made any mention of not been approved by the homeowners’ associa- the easement. tion.” Question 48 A lawyer purchased a lot and built a home Twenty-five years ago, a property owner based on one of the approved designs. However, placed a large sewer line (to service a single- many of the lots were purchased by investors family house he built on the property) across who wanted to hold the lots for investment a neighbor’s property without the neighbor’s purposes. Two years after the lots went on the permission. Four years ago, the owner tore down market, one such investor sold her lot to an the house in preparation for the construction of a architect by a deed that did not contain any larger house on the land, and made an agreement reference to the recorded plan nor the obligation with municipal authorities to take an easement regarding approval by the homeowners’ associa- across the neighbor’s property and install a tion. In fact, because very few residences had new sewer line to service the house. After a been built in the subdivision since the lots were long delay, the municipal authorities failed to first available for purchase, no homeowners’ perform their agreement, and the owner finally association meetings had been held in two years. constructed the house last year using the existing sewer line. The state has a 20-year statute for The architect began building a very modern- acquiring property interests by adverse use. istic house on her one-half acre. When the lawyer noticed the house being built, he brought If the neighbor attempts to enjoin the use of an action to enjoin the construction. the sewer line to service the new house, she will: The probable result of this action will be in (A) Prevail, because the agreement with the favor of: municipal authorities estopped the owner from using the existing line to service the (A) The architect, because her deed contained new house. no restrictive covenants. MPQ-106-Preview-real-prop-exam-rev--L.indd 120 7/23/2013 12:10:03 PM REAL PROPERTY 121. (B) The architect, because any restrictive Question 61 covenant in her deed can only be enforced by the opposite party to the covenant or that A homeowner leased his home to a tenant for person’s successor in title. three years. The following year, the homeowner conveyed the house to a buyer, who never (C) The lawyer, because the recorded subdivi- recorded her deed nor did anything with regard sion plan, taken with the fact that all lots to the house. The tenant continued paying were similarly restricted and the architect rent to the homeowner. Three months after had notice of this, gave him the right to the conveyance to the buyer, the homeowner enforce the covenant on her property. conveyed the property to his proctologist, who knew nothing of the prior conveyance to the (D) The lawyer, because his deed contained the buyer. The homeowner took the proctologist’s restrictive covenant. money and skipped town. The proctologist told the tenant he now owned the house and Question 85 that all rents should be paid to him. The tenant complied. A seller entered into a written land sale contract with a buyer on May 20, whereby the Six months later, the proctologist went to his seller agreed to sell a home to the buyer for local bank for a loan. He offered to put up the $60,000. The closing date was set at August 1. property as security. The bank discovered that The buyer put up $6,000 as earnest money, as the proctologist had never recorded his deed and provided by the contract. The contract stated that, just two weeks prior to his loan application, that if the buyer failed to perform by tendering the buyer had recorded a deed to the house that the balance due on the house on August 1, the bore an earlier date than the deed the proctolo- $6,000 could be treated as liquidated damages gist had shown the bank. Because of this cloud “at the option of the seller.” on the title, the bank refused the loan request. When the tenant discovered this, she quit paying On July 21, the week before the closing, the rent to the proctologist. The state has a recording house burned to the ground because of a freak statute that provides, “a conveyance of an lightning strike during a thunderstorm. When interest in land, other than a lease for less than August 1 arrived, the buyer refused to tender one year, shall not be valid against any subse- $54,000 to the seller. The buyer asked the seller quent purchaser for value, without notice thereof, for the refund of his earnest money because the unless the conveyance is recorded.” house had been destroyed. The seller refused and filed suit, asking for specific performance. If the proctologist sues the tenant to compel The buyer countersued, demanding refund of the the payment of rent, the proctologist will likely: $6,000 earnest money. (A) Win, because the tenant is estopped from How should the court rule on the suits? denying a landlord-tenant relationship with the proctologist, since she had paid rent for (A) The court will order specific performance many months. by the buyer. (B) Win, because the proctologist was a bona (B) The court will order the seller to return the fide purchaser when he bought the property $6,000 to the buyer because of frustration from the homeowner. of purpose of the contract. (C) Lose, because the proctologist failed to (C) The court will award the seller $6,000 as record his deed to the property. liquidated damages. (D) Lose, because the proctologist did not (D) The court will award neither party the relief have good title to the property and cannot sought because of mutual mistake. demand rent from tenants in possession. MPQ-106-Preview-real-prop-exam-rev--L.indd 121 7/23/2013 12:10:03 PM 122. EXAM REVIEW Question 91 transfer the title just as well as the other form. The accountant purchased the form and filled in A mother had her lawyer prepare and execute the blanks with the appropriate information she two notarized deeds: one conveying a 640-acre copied from her old deed. The doctor did not farm to her daughter and the other conveying a hire a lawyer to represent him in the purchase of 590-acre farm to her son. The mother produced the house. the deed to the daughter, who told her mother to keep the deed just in case the daughter The doctor accepted the deed from the misplaced it. The mother held on to the deed. accountant and gave her $125,000. Soon after The next day, the mother went to her lawyer’s the doctor moved into the house, it was discov- office to have the deeds recorded, but she forgot ered that the homeowner’s title was not good. the daughter’s deed at home. The mother gave The true owner now demands that the doctor the lawyer the son’s deed and promised to bring vacate. Title is judicially determined to be with the daughter’s deed in the next day. Later that the true owner, and the doctor is forced out. afternoon, the lawyer recorded the son’s deed. That night, the mother suffered a stroke and Does the doctor have any action against the died in her sleep. The daughter’s deed was never homeowner or the accountant based on any recorded but was found in the mother’s home covenant for title? after her death. In her will, the mother left all (A) Yes, the doctor can sue both and can of her property to her daughter, her son, and the recover $125,000. local animal shelter, in three equal shares. Aside from her modest home and some small bank (B) Yes, the doctor can sue the homeowner, but accounts, the mother had no appreciable estate. not the accountant, and can recover his full $125,000. If the animal shelter challenges the deeds to the farms on grounds of lack of proper delivery, (C) Yes, the doctor can sue the homeowner, but it will: not the accountant, and can recover only $86,000. (A) Win on both farms. (D) No, the doctor can sue neither the (B) Lose on both farms. homeowner nor the accountant. (C) Win on the 640-acre farm but lose on the Question 67 590-acre farm. A landowner in fee simple signed a promis- (D) Win on the 590-acre farm but lose on the sory note for $10,000 to a bank, and secured the 640-acre farm. note by a mortgage of her land to the bank. The Question 24 mortgage was duly recorded. The landowner then sold the property to an attorney, who A homeowner agreed to sell his home to an assumed and agreed to pay the mortgage to the accountant. He gave the accountant a general bank on the land. The attorney did not make warranty deed and the accountant gave him payments on the mortgage note to the bank. The $86,000, his asking price. The deed was bank, following appropriate statutory proce- recorded. A few years later, the accountant sold dures, foreclosed the mortgage and gave notice the property to a doctor, who paid her $125,000 to both the landowner and the attorney that it for the property. To save on attorney’s fees, intended to sue for any deficiency. At the foreclo- the accountant went to her local office supply sure sale, the property sold for $6,000. The bank store to purchase a general warranty deed now sues both the landowner and the attorney form. The store was out of those forms, but the for $5,000, which is the remaining amount of clerk suggested that she use the form labeled the unpaid principal and interest on the note plus “Quitclaim Deed,” asserting that it would costs of foreclosure. MPQ-106-Preview-real-prop-exam-rev--L.indd 122 7/23/2013 12:10:03 PM REAL PROPERTY 123. The bank will be successful in obtaining a Question 2 judgment against: For several years, a landowner supplied water (A) Only the landowner. to the factory located on his land from a pump located on that same land. The pump drew water (B) Only the attorney. from a nearby creek, which provided plenty of water for all the factory’s needs. Subsequently, (C) Either the landowner or the attorney. a developer purchased property abutting the northern boundary of the landowner’s land and constructed a large apartment building (D) Both the landowner and the attorney. upstream from the creek, which also ran through her property. The building’s water supply was Question 68 pumped from the creek. Once the developer’s building was fully occupied by tenants, there A developer owned an office building remained insufficient water to meet the needs of subject to a first mortgage with a creditor in the the factory. amount of $1 million. Subsequently, the devel- oper borrowed $100,000 from a bank secured If the jurisdiction follows the prior appropria- by a second mortgage on the building to help tion theory of water rights, when the landowner pay the first mortgage and other expenses of sues to stop the developer’s use of the water, the the building. The developer’s financial condi- result will be: tion worsened, and he was unable to make the required payments on the first mortgage to the (A) The developer wins, because prior appro- creditor. The developer approached the creditor priation always protects upstream owners. and offered to give her a deed to the building in satisfaction of all of his obligations to the (B) The developer wins, because of the excep- creditor. The developer delivered to the creditor tion for domestic uses. a quitclaim deed to the building, which recited as consideration the release of the developer (C) The landowner wins, because he was the from all liability on the mortgage to the creditor. first to use water from the stream as a The deed was duly recorded. riparian owner. Shortly thereafter, the office market greatly (D) The landowner wins, because he first made improved, and the building was worth $1.5 beneficial use of the water. million. The developer then brought an action against the creditor, claiming that the deed was an equitable mortgage, and the bank served notice on the creditor that it was preparing to foreclose its mortgage on the building. In appropriate actions, the creditor will prevail against: (A) The developer only. (B) The bank only. (C) Both the developer and the bank. (D) Neither the developer nor the bank. MPQ-106-Preview-real-prop-exam-rev--L.indd 123 7/23/2013 12:10:03 PM
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