Property

I.‘ ¡reehold estates

a.‘ ¡ee simple
i.‘ ¡ee simple absolute
1.‘ Most extensive estate and denotes maximum of ownership
2.‘ At common law phrase in a deed ³to B or the grantee and his heirs´
3.‘ Not required in modern times
ii.‘ ¡ee simple defeasible
1.‘ 3 types
1.‘ ¡ee simple determinable
1.‘ Created to continue until the happening or non happening of a
stated event
2.‘ Possibility of reverter - Automatic reversion to grantor if stated
event occurs
3.‘ %xample
1.‘ X owner in fee conveys Blackacre to A so long as the
property is used as a school
4.‘ Typical words
1.‘ So long as
2.‘ During
3.‘ Until
4.‘ While
2.‘ ¡ee simple subject to condition subsequent
1.‘ May be terminated upon happening or non happening of a stated
event
2.‘ %xample
1.‘ X owner in fee conveys Blackacre to A and his heirs but if
land is not used as a farm then X may reenter.
 ‘
ight of re-entry
3.‘ Typical words
1.‘ On condition that
2.‘ Subject to the condition that
3.‘ But if
3.‘ ¡ee simple subject to an executory interest
1.‘ Where upon the happening of a stated event ownership passes from
one grantee to another
2.‘ %xample
1.‘ X conveys Blackacre to A and his heirs as long as the land
as used a farm, if not used as a farm then to B. ˜hifting
executory interest
b.‘ ¡ee tail
i.‘ At common law ³to B and the heirs of his body´
ii.‘ Rarely
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 c.‘ gife estate
i.‘ Duration is measured by life or lives of one or more human beings
ii.‘ %xample
1.‘ To A for life
iii.‘ A life estate por autra vie
1.‘ Is measured by the life other than the grantee
iv.‘ ¡our types of waste for a life tenant
1.‘ Voluntary
1.‘ Injury to premises or land caused by affirmative act of tenant exploits
minerals or timber unless such prior use had been done beforehand
2.‘ %xceptions for life tenant to commit waste (PURG%
1.‘ PU ± prior use meaning that prior to the grant the land was already
subject to exploitation prior to the life estate
1.‘ Open mines doctrine
a.‘ If mining previously done may continue to mine but
is limited to already existing mines
2.‘ R ± Reasonable repair and maintenance meaning the tenant may
consume natural resources for these purposes.
3.‘ G ± granted meaning the life tenant may exploit if expressly given
the right
4.‘ % ± exploitation
1.‘ Meaning the land is suitable to exploit
2.‘ Ameliorative
1.‘ Change in physical characteristics by unauthorized act by tenant but
property value increases
2.‘ Can¶t do unless all future interest holders are known and consent
3.‘ Tenant is not liable for this type of waste
3.‘ Permissive
1.‘ Injury to land when tenant is under a duty to act, but fails to act or repair
1.‘ gife tenant must maintain the premises in reasonably good repair
2.‘ Pay all ordinary taxes to the extent of income or profits from the
land. If no income or profit the life tenant is required to pay all
ordinary taxes to the extent of the premises fair rental value.
4.‘ %quitable
1.‘ Injury to reversionary interest in land which is inconsistent by good
husbandry and doesn¶t constitute legal waste and is recognized only by
equity court
2.‘ Key phrase
1.‘ Without impeachment of waste
II.‘ ¡uture interests
a.‘ Reversion
i.‘ %state remaining in the grantor who has conveyed a lesser estate than that owned by the
grantor

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 ii.‘ %xample
1.‘ X owner in fee to B for life
b.‘ Possibility of reverter
i.‘ Interest retained by the grantor of determinable estate
c.‘ Right of reentry
i.‘ Created in grantor subject to a condition subsequent
d.‘ Remainders
i.‘ ¡uture interest created in a 3rd person which is intended to take effect after the natural
termination of the proceeding estate
ii.‘ Vested
1.‘ Remainder created in an ascertained and existing person that is not subject to any
condition precedent except the normal termination
2.‘ %xample
1.‘ A to B for life then to C and her heirs
1.‘ C¶s remainder is vested
3.‘ Three types
1.‘ Remainders absolutely vested
1.‘ gimited to ascertained without words of condition or subject to
divestment
2.‘ A to B for life then to C and her heirs
1.‘ C¶s remainder is absolutely vested
2.‘ Remainders vested subject to partial divestment
1.‘ Also known as remainder subject to open
2.‘ When remaindermen are in existence and is ascertained, but the
amount of her estate is subject to being diminished in favor of
other members of a class
3.‘ %xample
1.‘ A to B for life then to the children of B in fee. B is living
and has one child C.
a.‘ C has subject to open interest because of after born
children of B
3.‘ Remainders vested subject to complete divestment
1.‘ When remaindermen are ascertained and her interest is not subject
to a condition precedent, but her right to possession or enjoyment
is subject ot termination by reason of executory interest, power of
appointment
2.‘ %xample
1.‘ A conveys to B for life then to C and her heirs but if C dies
with no surviving children then to D
iii.‘ Contingent
1.‘ Any remainder created in ascertained person, but is subject to a condition
precedent or is created in an unborn or unascertained person
1.‘ %xample

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 1.‘ A to B for life remainder to C and his heirs if C marries before his
B¶s death
2.‘ A to B for life remainder to C for life if C survives X
iv.‘ Characteristics of remainders
1.‘ All are alienable or transferable, this was not the case at common law
2.‘ Vested remainder has a cause against prior estate holder for waste, but contingent
remaindermen do É

3.‘ Vested remaindermen can compel prior estate owner to pay taxes or interests of
encumberances, a contingent remaindermen can É

4.‘ Vested remainder subject to creditor demands, but contingent remainders are
É

e.‘ %xecutory interest
i.‘ A future contingent interest created in favor of a transferee in the form of a springing or
shifting use which upon the happening of stated event will be executed into a legal estate
and which cannot be construed as a remainder
ii.‘ Characteristics of %xecutory interests
1.‘ Always in favor in transferee who is other than the grantor
2.‘ Never is reversion, right of reentry, or reversion where ownership goes back to
the grantor
3.‘ Always contingent and can never become vested
iii.‘ Shifting
1.‘ Cut short or terminates a proceeding in favor of another grantee
2.‘ %xample
1.‘ A to B for life, but if B becomes bankrupt, then to C and his heirs
iv.‘ Springing
1.‘ Ownership passes from grantor to grantee then a lapse of time forces reversion
back to grantor then to 2nd grantee
2.‘ %xample
1.‘ A to B and his heirs but if B marries Z then one day later then to C.
v.‘ Difference in contingent remainder and executory interest
1.‘ CR cannot follow fee simple
III.‘ ¡uture interest problems
a.‘ Rule in Shelly¶s case
i.‘ At common law, if in a conveyance or will, a freehold estate usually a life estate if it is
given to person and in the same conveyance has a remainder limited to that person¶s heirs
then the grantee takes both the freehold estate and the remainder.
ii.‘ %xample
1.‘ X owner in fee conveys to B for life with remainder to B¶s heirs.
1.‘ The remainder to B¶s heirs is cutoff and B gets a fee simple absolute.
b.‘ Doctrine of Worthier Title
i.‘ Where grantor attempts to give remainder to grantor¶s heirs
ii.‘ %xample
1.‘ X to B for life then to X¶s heirs

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 1.‘ X¶s heirs are cutoff what you have is a reversion to X
c.‘ Rule against perpetuities
i.‘ No interest is valid unless it vest or fails within 21 years after some life in being at the
creation of the interest
ii.‘ Only contingent interest, executory interest, powers of appointment, and options to
purchase land in the future that are not leases are under the rule
d.‘ Power of appointment
i.‘ General
1.‘ %quivalent to ownership
2.‘ Must be exercisable then it does not violate RAP
e.‘ Restraints on alienation
i.‘ Provisions that restrain grantee¶s power to grant property to other
ii.‘ Rule
1.‘ Any restraint on fee simple is invalid
2.‘ Restraints non freehold estates are allowed
iii.‘ Three types
1.‘ ¡orfeiture
2.‘ Promissory
3.‘ Disabling
iv.‘ %xtent
1.‘ Can be total or partial
2.‘ May only limit grantee for limited amount of time
3.‘ Restraints on persons are invalid
IV.‘ Concurrent estates
a.‘ Ownership by two or more persons at the same time
b.‘ Three types
i.‘ Joint Tenancy
1.‘ ¡orm of co ownership where everyone owns undivided interest in the whole estate
with rights of survivorship
2.‘ Creation by the 4 unities
1.‘ Time
2.‘ Title created under same instrument
3.‘ Possession means given identical rights of enjoyment
4.‘ Interest means same type and duration
3.‘ Are disfavored and must be clear indication of intent
4.‘ Termination/Severs (SPAM ± Sale, partition, and mortgage
1.‘ By an inter vivos conveyance
2.‘ Suit for partition
1.‘ By voluntary agreement
2.‘ Partition in kind ± a court action for physical division of Blackacre
if in best interest of all
3.‘ ¡orced sale ± a court action where Blackacre is sold and sale
proceeds divided evenly

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 4.‘ Majority Rule ± courts will sale and divide proceed whenever a
fair and equitable physical division of property is impossible
3.‘ Mortgages
1.‘ In title theory state where mortgage is transfer of title then severs
joint tenancy
2.‘ In lien theory state a mortgage is a lien and does not sever joint
tenancy
4.‘ Contract to convey
1.‘ %ven if no contract occurs it severs joint tenancy
ii.‘ Tenancy in the entirety
1.‘ Ownership by husband and wife and at common law are regarded as one legal
entity
1.‘ Also have right of survivorship
2.‘ Severance
1.‘ Both spouses had to join in conveyance
2.‘ Death by either spouse
3.‘ Divorce and the couple become tenants in common
4.‘ %xecution by joint creditor of both husband and wife
iii.‘ Tenancy in common
1.‘ Concurrent estate in which co tenants own an undivided distinct share of the
property
2.‘ %ach tenant can dispose of their portion
3.‘ The only unity is that of possession
4.‘ Terminate
1.‘ Merger when entire title vests in one person
2.‘ Partition
3.‘ Conveyance
4.‘ Ouster
iv.‘ Rights and duties of concurrent estates
1.‘ %ach tenant has right to possess
2.‘ Rents and profits
1.‘ A tenant has the right to retain profits gained by her use of the property
3.‘ Taxes
1.‘ A tenant who played all the taxes can get contribution by other co tenants
4.‘ Repairs
1.‘ A tenant has no right to contribution, but upon partition then the court may
make equitable provision of proceeds and court takes into account
improvements
V.‘ geases and non freehold estates
a.‘ gease
i.‘ Conveyance of property and constitutes a contract
ii.‘ Covered by statute of frauds and must contain the following
1.‘ Must identify lessor and lessee

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 2.‘ Description of land
3.‘ State term of the lease
4.‘ Amount of rent to be paid
b.‘ 4 leasehold estates
i.‘ Tenancy for years
1.‘ gease for a fixed period of time
ii.‘ Periodic tenancy
1.‘ gease that continues for successive intervals
iii.‘ Tenancy at will
1.‘ A tenancy with no fixed term parties must expressly agree or its likely a periodic
tenancy
iv.‘ Tenancy at sufferance
c.‘ Tenant and landlord duties
i.‘ Tenant
1.‘ Pay rent
2.‘ Destruction of premises
1.‘ Because of fire, flood, or storms does É
relieve the tenant from paying
rent
3.‘ Rent is extinguished by
1.‘ Release by the landlord
2.‘ Merger
3.‘ %xpiration of the lease
4.‘ %minent domain taking both leasehold and reversion
1.‘ Partial taking
1.‘ If partially taken leased land then tenant is not discharged
from paying rent
2.‘ %ntire taking
1.‘ If all leased land is condemned for entire lease period then
no need to pay rent
5.‘ ¡rustration of purpose
1.‘ Where main purpose of lease is frustrated by legal means such as
raccoon fur trading is now illegal
6.‘ Surrender
7.‘ Constructive eviction
1.‘ Material breach by landlord which violates tenants implied
covenant of quiet enjoyment
2.‘ %lements (SING
1.‘ Substantial interference
2.‘ Notice
3.‘ goodbye
4.‘ Duty to repair
1.‘ Must make ordinary repairs
5.‘ Duty to not commit waste

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 ii.‘ gandlord duties
1.‘ Duty to deliver possession
1.‘ Majority rule requires landlord to put tenant in physical possession of the
premises
2.‘ If holdover at start of lease landlord breaches and tenant receives damages
2.‘ Implied covenant of quiet enjoyment
3.‘ Implied warranty of habitability
1.‘ Is not waivable
2.‘ The premises must be fit for basic human habitation
3.‘ Standard judged by local housing code or independent judicial conclusion
4.‘ Tenant¶s entitlement upon breach MR3
1.‘ Mover
2.‘ Repair
3.‘ Reduce rent
4.‘ Remain in possession
VI.‘ ¡ixtures
a.‘ Defined
i.‘ Chattel that has become real property
ii.‘ Requirements
1.‘ Must be intention of annexer that the chattel become a fixture
1.‘ ‡ost importnt
2.‘ Considerations court¶s look to in determining intent
1.‘ Nature of article
2.‘ Manner of annexation
3.‘ Injury to the land
4.‘ Completeness with which chattel is integrated with use on the
property
5.‘ Relationship annexer has with the land such as are they invitee,
bailer, or tenant
2.‘ Chattel must be annexed to the realty either actually or constructively
3.‘ Chattel must be appropriated for which the land is used
b.‘ Trade fixtures
i.‘ Chattels annexed to the land for pecuniary gain during her tenancy
ii.‘ Generally removal
VII.‘ Non possessory interest
a.‘ Profits
i.‘ Defined
1.‘ Right of one person to go onto the land of another and extract or remove some
item from the property
b.‘ %asement
i.‘ Defined
1.‘ Right of one person to go onto the land of another and make limited use of the
property

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 ii.‘ Two types
1.‘ %asement appurtenant
1.‘ Defined
1.‘ Requires two tracts of land
2.‘ Parties
1.‘ Owner of dominant tenement
1.‘ He has right to enter on to servient tenant¶s estate
2.‘ Servient tenant
1.‘ Has land that is burdened by the easement
3.‘
uns with lnd
2.‘ %asement in gross
1.‘ Only have a servient tenement that is subject to easement
2.‘ %xample
1.‘ City puts in sewer or telephone lines
3.‘ ÷n run with the lnd
iii.‘ Two classes
1.‘ Affirmative
1.‘ %ntitles easement holder to make affirmative use of servient tenement
2.‘ Negative
1.‘ Prevents servient tenement of doing an act or making particular use of her
land
iv.‘ How created
1.‘ Comes under Statute of ¡rauds
2.‘ However easements by prescription and easements by implication
3.‘
v.‘ Types (PING
1.‘ %asement by prescription
1.‘ %lements
1.‘ Under claim of right that is hostile
2.‘ Open
3.‘ Notorious
4.‘ Continuous
5.‘ ¡or statutory period
2.‘ %asement by implication
1.‘ Implied from prior use; at time land is severed, use of one part existed
from which can be inferred that an easement permitting its continuation
was intended
3.‘ %asement by necessity
1.‘ Division of tract depriving one lot of means of access out
2.‘ %lements
1.‘ %xistence of a quasi easement at the time of conveience
2.‘ Apparent use
3.‘ Continuous use

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 4.‘ Reasonable necessity where the grantee receives the dominant
tenement
4.‘ %asement by grant
1.‘ Writing signed by grantor
vi.‘ Ways to extinguish or terminate easement (%ND CRAMP
1.‘ %stoppels
2.‘ Necessity ±when the ends
3.‘ Destruction of servient tenement
1.‘ If easement is in a structure and an involuntary destruction then easement
is extinguished
4.‘ Condemnation or eminent domain
1.‘ Dominant tenement is entitled compensation
5.‘ Release ±given by easement holder to the servient tenant
6.‘ Abandonment
1.‘ Clear showing by dominant tenement intends to abandon and by nonuse
7.‘ Merger
1.‘ Where fee simple title to both servient and dominant tenement has title to
both
8.‘ Prescription
1.‘ Where servient tenement has used her land for prescription period in a
way inconsistent and adverse to the easement
c.‘ gicenses
i.‘ Defined
1.‘ Permits one person to come on to land of another without being viewed as a
trespasser
2.‘ „s not n interest in lnd nd is 
 ÷
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„
1.‘ If coupled with interest is irrevocable
3.‘ %xample
1.‘ Park car at shopping mall
2.‘ Spectator at sporting event
d.‘ Real Covenants
i.‘ Requirements (WITHN (writing, intent, touch and concern, horizontal and vertical
privity and notice
1.‘ Must be writing and complies with statute of frauds
2.‘ Intent of covenentor to run with the land
1.‘ Where covenanting party include assigns
3.‘ Must touch or concern the land
1.‘ %ither increase or decrease value of land
4.‘ Must be privity of estate between the parties
1.‘ One of contracting parties succeeds to interest in land of another
ii.‘ Way to enforce
1.‘ Breach of contract action
iii.‘ Ways to terminate

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 1.‘ Same as easements
e.‘ %quitable servitudes
i.‘ Definition
1.‘ Restriction on use of land enforceable in equity
ii.‘ Requirements
1.‘ Writing under Statute of ¡rauds
2.‘ Intention of parties
3.‘ Grantee must have actual or constructive notice
4.‘ Touch and concern
iii.‘ Methods of imposing or establishing
1.‘ Declaration of restriction
2.‘ All lot owners execute formal agreement themselves
iv.‘ ¯ifference from covennt running with lnd
1.‘ Privity of estte is not
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2.‘ What is the remedy?
v.‘ Terminate
1.‘ Same as easements
2.‘ Changed neighborhood conditions also works
1.‘ But zoning changes do not
VIII.‘ Rights incident to possession
a.‘ Adverse possession
i.‘ %lements
1.‘ Use must be adverse
1.‘ Without permission
2.‘ Actual and exclusive
3.‘ Hostile
4.‘ Open and notorious
1.‘ Not secret
5.‘ Continuous for statutory period without interruption
ii.‘ ¡requently tested areas
1.‘ gimitations of adverse possessor¶s claim
1.‘ Cannot acquire a larger estate than they claim
2.‘ Cannot claim title to less than a freehold estate
3.‘ Statutory period begins when cause of action accrues against adverse possessor
4.‘ Period may be tacked on from one possessor to the other as long as there is privity
between the two parties
1.‘ Privity passes by deed, descent, will, contract, mere permission, and oral
gift
b.‘ gateral and subjacent support
i.‘ Rule
1.‘ Right of landowner to have their land supported laterally or subjacent supports is
an absolute right. gateral support means land in its natural state without buildings
or artificial structure

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 2.‘ %xcavation scenarios
1.‘ Withdraw neighbors land with no artificial structures you will be
absolutely liable regardless of negligence
2.‘ If artificial structure on land
1.‘ %nglish rule ± minority recovery damages to artificial structure
damage to both land and artificial structure
2.‘ American rule ± damage caused the land and does not include
artificial
3.‘ Negligent excavation
1.‘ Defendant is liable for both land and artificial structure damage
c.‘ Water rights
i.‘ 3 classes
1.‘ gakes and streams on surface
1.‘ Riparian water rights
1.‘ All tracks which abuts or touches lakes or stream is Riparian
2.‘ Two rules
1.‘ Natural flow theory
a.‘ %ach proprietor has fundamental right remain
substantially in its natural state free from any
unreasonable from quantity or pollution
2.‘ Reasonable use theory
 ‘ %ach owner can make maximum use provided such
use doesn¶t unresonbly interfere with other

iprin¶s use
2.‘ Prior appropriation
1.‘ Rights are determined by priority of beneficial use. The norm for
allocation is first in time first in right.
2.‘ Any beneficial use including for agriculture is sufficient to create
and appropriation right.
2.‘ Underground or percolating waters
1.‘ Subject to control of surface owner
2.‘ If surface owner makes unreasonable use then neighbor may have a suit
3.‘ Surface waters
1.‘ Common enemy rule
2.‘ gandowner has unlimited discretion in dealing with surface water
d.‘ Crops
i.‘ Two types
1.‘ ¡ructus naturalis
1.‘ Trees, shrubs, grasses considered natural parts of land
2.‘ Pass with conveyance of land
2.‘ ¡ructus industrialies
1.‘ ¡rom man¶s planting
2.‘ Crops are called emblements

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 3.‘ Viewed as personal property
e.‘ Possessor¶s rights
i.‘ Private nuisance
1.‘ Substantial and unreasonable interference with another¶s use or enjoyment of their
land.
ii.‘ Trespass
1.‘ Invasion of land by tangible physical object
2.‘ To remove a trespasser is action of ejectment
IX.‘ Conveyance
a.‘ statute of frauds
i.‘ significant memorandum
ii.‘ Requirements
1.‘ Must identify parties
2.‘ Description of land
1.‘ Sufficient if provides a good lead of property sought to be conveyed
2.‘ Parole evidence may clear up ambiguity
1.‘ Patent ambiguity ± on the face
2.‘ gatent ambiguity ± not apparent on deed
3.‘ Purchase price
4.‘ Promises on both sides
5.‘ Signed by party to be charged
b.‘ Substantial part performance
i.‘ Person can enforce oral promise to convey land where
1.‘ Purchaser pays seller part or all of purchase price nd
1.‘ Buyer takes possession or
2.‘ Makes substantial improvements
c.‘ Delivery for valid conveyance
i.‘ Requirements
1.‘ The grantor¶s subjective intent by words or conduct
d.‘ %quitable conversion
i.‘ Defined
1.‘ Treats interests in land as if it has already been converted to personal property
ii.‘ %xample
1.‘ Seller and buyer enter into contract to buy Blackacre for 100,000 dollars and enter
into contract. %nter into agreement on September 1st and closing on November
1st. The time between this time periods. The seller is equitable owner of the
balance of the purchase and the buyer is owner of property.
isk of loss is on the
buyer
2.‘ If vendor/owner dies the buyer can still enforce the contract.
3.‘ If buyer dies the right to receive land goes to her heirs duty to pay price goes to
executor.
e.‘ Marketable title

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 i.‘ Implied duty on owner to send marketable title to the buyer failure allows buyer to
rescind contract. Deed supersedes the contract.
ii.‘ Only required on date of closing and purchaser cannot rescind until date of closing.
iii.‘ Common defects
1.‘ Addition of restrictive covenants
2.‘ Outstanding mortgages
3.‘ %ncumbrance vendor cannot remove
4.‘ %asement on appreciable part of the property
5.‘ Variation in names of grantors and grantees
6.‘ Outstanding reverter rights
7.‘ Dower interest
iv.‘ Boundary line agreements
1.‘ Oral agreement between adjoining land owners is valid and enforceable and
doesn¶t come under statute of frauds
v.‘ Covenants in deeds respecting title (damage must be shown for breach
1.‘ 3 present tense breached if void when title is delivered
1.‘ Covenant of seisin
1.‘ Guarantee that grantor owns along with right to convey
2.‘ Covenant right to convey
 ‘

3.‘ Covenant against encumbrances
 ‘ 3 future tense breached after deed is delivered thus run with the lnd
1.‘ Covenant for quiet enjoyment
1.‘ Defend grantee against lawful claims of grantor or 3rd parties
2.‘ Covenant of general warranty
1.‘
 
 
3.‘ Covenant for further assurances
1.‘ Not used much
vi.‘ Types of deeds
1.‘ General warranty
1.‘ Usual covenants includes 1st 5 covenants
2.‘ Special warranty
1.‘ Statutory with fewer assurances
3.‘ Quit claim
1.‘ No assurances
f.‘ %stoppels by deed/recording statutes
i.‘ Recording statutes
1.‘ Race
2.‘ Notice
1.‘ Subsequent B¡P prevails whether or not he or she records first
3.‘ Race notice
1.‘ Subsequent B¡P who records first without notice prevails
X.‘ Mortgages

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a.‘ Parties
i.‘ Mortgagee ± bank
ii.‘ Mortgagor ± person with mortgage
b.‘ Rules
i.‘ Mortgages must be recorded
1.‘ A B¡P can take without recordation of the mortgage
ii.‘ Mortgage must be in writing satisfying Statute of ¡rauds
iii.‘ Transfer
1.‘ Creditor-Mortgagee
1.‘ Two ways
1.‘ %ndorsing note and delivering it to the transferee
1.‘ The transferee in this situation is eligible to become a
holder in due course, which means he takes the not e free of
personal defenses that could be raised by previous
mortgagee, but is still subject to real defenses.
2.‘ Personal defenses
a.‘ gack of consideration
b.‘ ¡raud in the inducement
c.‘ Unconscionability
d.‘ Waiver
e.‘ %stoppel
3.‘ Real defenses (MAD ¡I¡I4
a.‘ Mistake
b.‘ Alteration
c.‘ Duress
d.‘ ¡raud in the factum
e.‘ Incapacity
f.‘ Illegality
g.‘ Infancy
h.‘ Insolvency
2.‘ %xecuting a separate document of assignment
3.‘ Holder in due course
1.‘ Value
2.‘ Good faith
3.‘ Without notice
4.‘ Delivery
a.‘ Photocopy unacceptable
2.‘ Party ±Mortgagor
1.‘ Assumed the mortgage
1.‘ 1st and 2nd party are personally liable
2.‘ 2nd purchaser is primarily liable
3.‘ 1st owner is secondarily liable
2.‘ Subject to the mortgage

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 1.‘ 1st party is personally liable
2.‘ 2nd party assumes no personal liability
3.‘ If the mortgage is recorded it sticks with land and 1st party¶s failure
to pay may get the property foreclosed on
c.‘ ¡oreclosure
i.‘ Proceeds form sale
1.‘ More than amount owed
1.‘ Goes to junior liens then back to debtor
2.‘ gess than amount owed
1.‘ Mortgagee brings deficiency action against debtor
d.‘ Clogging right of redemption ± to prevent a mortgagee form inserting terms in the mortgage
instrument limiting or restricting the mortgagor¶ right of redemption
i.‘ %.g. a provision limiting redemption to the mortgagor himself as distinct from his heirs.
e.‘ %quity of redemption
i.‘ Mortgagor defaults but before foreclosure the mortgagor is allowed to pay off mortgaged
debt before foreclosure.
ii.‘ After foreclosure sale, most states permit mortgagor 6 months to a year to repay debt. In
this situation the mortgagor is entitled to redemption for value from land or proceeds
from foreclosure sale.
f.‘ Prepayment penalty clause ± is enforceable under the rationale that a lender will lose anticipated
interest in the event that the mortgage principal is prepaid before the due date
XI.‘ Assignments and Subleases
a.‘ Assignments
i.‘ Definition ± an assignment arises where a lessee transfers the entire leasehold balance to
an assignee
1.‘ The assignee is then in privity of estate
2.‘ While the assignor remains in privity of contract
ii.‘ Rule in Dumpor¶s case ± majority ± a lessor¶s consent to one assignment dispenses with
the need to obtain the lessor¶s consent to future assignments in the absence of a lease
term to the contract
iii.‘ Minority ± if a condition against assignment is expressly made binding upon the lessee
and his assigns the provision operates to create successive conditions and may be
imposed upon assignees.
b.‘ Subleases

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