Leasing Real Property
A landlord rented an apartment to a graduate student. When the graduate student arrived at the apartment on move-in day, she discovered that the previous tenant was still living there. The governing jurisdiction followed the majority approach (English Rule), to the duty to deliver possession.
Who has the burden of evicting the previous tenant from the apartment?
The landlord, because the landlord must deliver both legal and actual possession.
A homeowner sold his home to a first buyer. The first buyer paid value but did not record the deed. Five years later, the original homeowner sold the home to a second buyer, who paid value, took without notice of the prior transaction, and recorded his deed. Two years after that, the original homeowner sold the same home again to a third buyer, who paid value, took without actual notice of the prior transactions, and recorded his deed. The third buyer then gave the home to his son as a wedding present. The son had no notice of the prior transactions.
In a jurisdiction using a race-notice recording act, who owns title to the home?
The second buyer.
A mortgagor defaulted on the debt to her mortgagee by failing to make three consecutive mortgage payments. Attempting to avoid foreclosure, the mortgagor paid the three overdue payments, all attendant late fees, and the accrued interest, bringing the debt current. Despite this, the mortgagee informed the mortgagor that the entire outstanding balance of the mortgage was immediately due and payable.
What likely explains the mortgagee’s demand for immediate payment of the entire outstanding balance on the mortgage?
Acceleration Clause
Two neighboring landowners verbally agreed that one landowner would build a fence along a shared lot line, and the other landowner promised to maintain the fence.
If the landowners convey their entire estates to third parties, will the third party who buys the benefitting estate be able to enforce the original agreement as a real covenant?
No, because the agreement is not in writing.
A city zoning ordinance allows light manufacturing in commercial districts but prohibits uses that produce excessive noise or odors affecting neighboring properties. Starbucks operates a coffee roasting facility in a commercial zone with all required permits. Over time, its operations expand, producing strong odors and loud noise that interfere with Neighbor's ability to sleep and enjoy her home next door.
Neighbor sues Delta for private nuisance. What must Neighbor show to succeed on this claim?
Neighbor must show that Starbucks' conduct is unreasonable (gravity of harm > utility of conduct), and that it substantially interfered with the use and enjoyment of her land.
A landlord rented a condominium to a tenant for the period running from January 1 to June 1 of the same year. The lease called for monthly rent payments of $1,200. The lease also specified that the parties could terminate the lease, but only during the first month of the lease term.
What kind of leasehold estate does the tenant have?
A tenancy for years.
A seller entered into a contract to sell his property to a man. The man paid the purchase price for the property. Prior to the seller conveying the property to the man, the seller sold the property to a woman. The man visited the property and saw the woman moving into the house on the property. The seller then conveyed the property to the man. The man recorded his deed. Then the woman recorded her deed.
In a race jurisdiction, who prevails between the man and the woman? Why?
The man, because he recorded first.
A homeowner fell behind on his mortgage payments, and his mortgagee initiated foreclosure proceedings. The mortgagee auctioned the home for $200,000. At that time, the amount outstanding on the foreclosed mortgage was $75,000. However, the homeowner had used his home as security for two additional mortgages. The foreclosed mortgage was the second mortgage in order of priority. The first mortgage was for $100,000 and the third mortgage was for $150,000. All of the mortgagees were proper parties to the foreclosure proceeding.
How should the proceeds from the auction be distributed?
$75,000 to pay the balance on the foreclosed mortgage, and the remaining $125,000 toward the third mortgage.
Two cousins inherited a large plot of land from their aunt and agreed to subdivide it into equally sized plots (Plot A and Plot B). Plot A had a large vineyard on it. The owner of Plot B agreed to pay half the labor costs for maintaining the vineyard in exchange for half the profits from selling the wine. The deeds subdividing the cousins’ inheritance stated the promise regarding the vineyard, and further stated the cousins’ intent that the promise would bind their successors, heirs, and assigns forever. The cousin owner of Plot B subsequently sold his entire estate to a buyer, who refused to contribute to maintain the vineyard.
In a suit to enforce the promise regarding the vineyard, which of the following remedies, if any, is available to the owner of Plot A?
Monetary damages and an injunction.
Would the following provision of a zoning ordinance be held constitutional under the standard in Village of Euclid v. Ambler Realty, and why?
Each house must be painted red, white, or blue.
No, it is not constitutional. There is no relationship between the color of a house and the public health, safety, welfare, or morals.
A landlord rented an apartment to a tenant for a term of one year. The tenant subleased the apartment to a friend for three months while the friend was traveling on business.
What legal relationship, if any, is there between the landlord and the friend?
The landlord and the friend have no legal relationship.
Seller contracts to convey Greenacre to Buyer. At closing, Buyer discovers that a local zoning ordinance prohibits using Greenacre for commercial purposes. Buyer intended to build a retail store on the property. To make matters worse, Buyer also notices that the ground is too rocky for excavation. Buyer refuses to close, arguing that the title is unmarketable because of the zoning ordinance, and further because of the rocky condition.
Upon which of these two arguments, if any, will the Buyer succeed? Why?
Neither argument; the title is not unmarketable because the property is not currently violating the zoning ordinance, and physical conditions do not make title unmarketable.
A tract of commercial property was encumbered by three separate mortgages, each of which was properly recorded. The first mortgage was senior to the second and third mortgages, and the second mortgage was senior to the third mortgage. The second mortgagee foreclosed on the property. Due to a series of oversights by the second mortgagee, the third mortgagee was not notified of the foreclosure proceedings. The property was sold at a public auction. The sale proceeds were insufficient to pay the entire debt owed to the second mortgagee.
Which mortgages, if any, will remain on the property after the foreclosure sale?
Both the first and third mortgages
Two brothers inherited a large plot of land and the family shoe manufacturing business. The brothers subdivided the land into two plots, A and B. Plot A was slightly larger than Plot B, so the brothers also agreed that whoever took the smaller Plot B would serve as CEO of the shoe manufacturing business. The deeds subdividing the land stated this restriction regarding company leadership and provided that the restriction would be binding on the heirs, successors, and assigns of the two brothers forever.
May the successors in interest to the owner of Plot B enforce the restriction against the successors in interest to the owner of Plot A? Why?
No, because the restriction does not touch and concern the land.
A city enacts a new zoning ordinance that prohibits auto repair shops in a residential district. Prior to this ordinance, a repair shop had operated continuously and lawfully for 20 years within this residential district.
What is the shop’s legal status?
The repair shop is a lawful nonconforming use and may continue to operate within the district.
A landlord rented office space to a lawyer for a lease term of two years. The lawyer decided to retire after one year and assigned her remaining leasehold estate to an accountant. The accountant stopped paying rent three months after he moved in.
From whom may the landlord recover the rent owed? How so?
From the accountant via privity of estate, and also from the lawyer via privity of contract.
A homeowner sold his home to his brother by a general warranty deed. Four years later, the brother sold the same home to a buyer by special warranty deed. Six months after the buyer moved in, the bank foreclosed on an outstanding past-due mortgage that was secured by the home, and evicted the buyer. The original homeowner had taken out the mortgage, which was still outstanding, and had fallen behind on the payments.
Whom, if anyone, may the buyer successfully sue for a breach of the covenant of quiet enjoyment?
The original homeowner only
A buyer borrowed money from a bank to purchase a house. At the loan closing, the buyer executed numerous documents, one of which appeared to be a deed conveying legal title of the property to a third party and not to the bank.
Which type of mortgage equivalent did the buyer’s purchase use?
Deed of Trust
A homeowner planted a summer vegetable garden in the same location at the back of his property every year for over 25 years. The garden was visible from an adjoining neighbor’s home during the three months that the homeowner used it each year. Unbeknownst to either the homeowner or his neighbor, half the garden was actually located on the neighbor’s land. In preparation for selling his home, the neighbor had a new survey done and discovered that half the garden was on his land.
May the homeowner continue to garden on his neighbor’s land? Why?
A city zoning ordinance limits use in a residential district to single-family homes. An owner of a lot that is unusually narrow applies for a variance to build a duplex, arguing that strict compliance would leave the lot unusable for any economically viable residential structure. The zoning board denies the variance, finding that the lot can still support a single-family home, even if less profitable.
The owner sues, claiming the denial was improper. Will the owner succeed on this claim?
No, the variance will be denied because this economic disadvantage alone does not establish unnecessary hardship.
A landlord rented a house to a tenant for a term of two years. One year into the lease, the tenant left the house and stopped paying rent. The governing jurisdiction follows the modern trend regarding a landlord’s remedies after a tenant abandons the premises.
What two courses of action must the landlord take?
The landlord can either terminate the tenant's lease, or use reasonable diligence to mitigate damages and sue the tenant for the balance
A homeowner sold his home to a first buyer. The first buyer paid value and recorded her deed six months after the sale. In the meantime, four months after the first sale, the original homeowner sold the same home to a second buyer, who also paid value and recorded his deed immediately. The second buyer took without notice of the earlier sale to the first buyer. The second buyer gave the home to his son. Before he accepted the gift, the son visited the home and learned of the prior sale to the first buyer. Nevertheless, the son accepted the gift.
In a jurisdiction using a notice recording act, who owns title to the home?
The son, because the shelter rule means the son takes the second buyer’s status as a bona fide purchaser for value without notice.
Charlie has a recorded judgment lien against Owen for $50,000. Owen now purchases a home from Sarah for $180,000, giving Sarah $20,000 in cash and a promissory note for $160,000, secured by a recorded mortgage on the home. Assume that the judgment lien attaches to the home at the time of purchase. Six months later, Owen defaults on the loan, and Sarah forecloses. Xavier buys the home at the sale for $180,000. Who gets the sale proceeds, what is the state of title? Why?
Sarah gets $160,000, Charlie gets $20,000, and Xavier takes the title free and clear.
A homeowner had an easement to use an asphalt driveway running from his garage across his eastern neighbor’s property to the public road. At the time the homeowner purchased the home, the homeowner’s parcel was landlocked, and the driveway was the only way the homeowner could access the public road. The homeowner and his neighbor entered into a contract requiring the homeowner to maintain the driveway in exchange for being able to cross onto his neighbor’s property. The contract does not specify the easement’s duration. Over the past twenty years, the homeowner has been in failing health and has rarely left his home. The homeowner has failed to maintain the asphalt driveway, which has crumbled in three places to a degree that it is no longer passable by most vehicles. In the meantime, development in the area has resulted in a new highway adjacent to the land of the homeowner’s western neighbor. The western neighbor agreed to permit the homeowner to construct a gravel road across his land to access the new highway. However, the western neighbor insists that the homeowner bear the $50,000 in costs to construct it.
Does the homeowner still have an easement over his eastern neighbor’s property? Why?
No, because the homeowner abandoned the easemen
A county zoning ordinance requires all homes in a coastal district to be set back at least 75 feet from the shoreline to protect against erosion and preserve scenic views. A landowner owns a narrow beachfront lot that, due to its shape and topography, cannot accommodate any reasonably sized home within the 75-foot setback. The land is otherwise zoned for single-family residential use.
The landowner applies for a variance, arguing that strict application of the setback requirement leaves the property with no economically viable use. Assume that the variance would be the minimum variance affording relief to the landowner. Should the Zoning Board grant the variance? Why?
The Zoning Board should grant the variance because (1) there is unique physical characteristics, (2) there is no possibility for a reasonable use of the property to be in strict conformity with the restriction, (3) the unnecessary hardship was not created by the landowner, and (4) the variance will not affect the essential character of the neighborhood, nor impair the use of adjacent properties.