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Michigan Bar Exam Outline

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REAL PROPERTY OUTLINE ESTATES AND FUTURE INTERESTS PRESENT ESTATESFreehold estates - gives possession under some legal title or right to hold o Fee simple absolute - "To A"
? Absolute ownership of potentially infinite duration
? Freely devisable, descendible, and fully alienable
? Any direct restraint on alienation is void (except right of first refusal)
? Conditions on use are permissible o Fee tail - "To A and the heirs of his body"
? Passes directly to grantee's lineal blood descendants
? MI - abolished and treated as a fee simple o Fee simple defeasible - fee simple + condition (not words of desire, hope, or intention)
? Types:
? Fee simple determinable - automatically ends when a certain condition occurs, giving the right of possession back to the transferor o "As long as," "while," "until," "during" o Transferor has "possibility of reverter" (30 year limit)
? MI - freely transferable
? Fee simple subject to a condition subsequent - may be terminated by the transferor when a certain condition occurs (default over FSD) o "Provided however," "but if," "on the condition" o Transferor has "right of entry" if expressly reserved (30 year limit)
? Must declare forfeiture within a reasonable period of time after the condition occurs
? Cannot be transferred inter vivos
? MI - freely transferable
? Fee simple subject to an executory limitation - followed by a future interest in another transferee o The future interest has an "executory interest" o Estate automatically ends upon the occurrence of the condition o Life estate - "O to the life of A"
? Measured by the lifetime of a particular person (or pur autre vie if another)
? Freely devisable, descendible, and fully alienable
? Restrictions on transfer are permissible
? Future interest:
? Grantor has "reversion"
? Grantee has a "remainder"
? Doctrine of waste - life tenant must not commit waste (merely maintain)
? Voluntary waste - any affirmative act that reduces the value of the property o Exceptions: (PURGE)
? Prior use - if prior use was to deplete natural resources, may continue as to already open sources

1 Real Property Reasonable repairs - may consume natural resources for reasonable repairs and maintenance
? Grant - may exploit if grantor grants right to do so
? Exploitation - if only suitable for exploitation Permissive waste - failure to take reasonable care to maintain o Duties:
? Reasonable repairs (excluding ordinary wear and tear), not replacement
? Pay all taxes on the property
? Pay all interest on any mortgage (holder of future interest pays principal)
? Life tenant does not have to insure the property Ameliorative waste - affirmative act that leads to a substantial increase in value o Exceptions:
? Life tenant is permitted to enhance property if all holders of future interest are known and consent
? If changed conditions have made the property relatively worthless, the life tenant can tear it down?FUTURE INTERESTSRemainders - a future interest in a transferee o Elements:
? Capable of becoming possessory immediately upon expiration of the prior estate
? Does not divest (cut short) any interest in a prior transferee (follows life estates) o Types:
? Indefeasibly vested remainder
? It is created in an ascertainable person
? No condition to taking
? Vested remainder subject to open (partial divestment)
??????Remainder is a group or class that may be enlarged in the future o Members who predecease the transferor are eliminated (lapse) o The class is closed when the testator dies and the class is entitled to distribution
??????At least one person must be vested o Ascertained or alive and identifiable; and, o No condition precedent that must be satisfied before they take
? Vested remainder subject to complete divestment (executory interest)
? Remainder is subject to being cut short due to a condition subsequent
? Contingent remainder - a remainder is contingent if:
? Grantee is not an ascertainable person; or
? A condition must be met before the remainder can become possessory
??????Executory interests - a future interest in a transferee that divests (cut short) another estate o Shifting - executory estate from one grantee to another grantee o Springing - executory estate from the grantor to a grantee
??????Rule against perpetuities - if there is any chance that an interest might vest (become possessory) outside of the life-in-being + 21 years, that interest is void o Applies to: contingent remainders, executory interests, vested remainder subject to open o Test:
? Identify the future interest
? Identify the condition precedent

2 Real Property Find the measuring life With absolute certainty, the interest not vest after the life-in-being + 21 years
? If yes, future interest is good
? If no, RAP kills the future interest Wait and see approach - whether the interest will actually vest with time period of RAP
? MBE - does not apply
? MI - applies within 90 years Perpetuity saving clause - ensures vesting will occur within the time period of the RAP Special circumstances:
? First refusal - reasonable options and rights of first refusal do not violate RAP
? Charities - gifts from one charity to another charity do not violate RAP
? Fertile octogenarians - anyone regardless of age is capable of having children
? Bad as to one, bad as to all - if one member of the class is voided, all are void?


o o

? Right of survivorship - the surviving JT takes automatically upon death of a JT
? Must be expressly stated
? Right to partition - lines are drawn and the party is no longer a JT by:
? Agreement of the parties; or
? Courts can draw the line or sell if lines can't be drawn o Created by 4 unities: (TTIP)
? Time - all interests must have vested at the same time
? Title - the grant to all JTs must be by the same instrument
? Interest - all JTs must take the same kind and same amount of interest
? Possession - all must have equal rights of possession o Destruction:
? Partition - voluntary destruction
? Severance - involuntary destruction occurs when one of the unities is disturbed
? 4 ways: o A conveyance by a JT creates a TIC as to that JT o A mortgage in a title theory state
? Lien theory (default) = no severance (MI)
? Mortgage is extinguished as to other JTs
? Title theory = severance o A signed contract of sale o A creditor's sale
? Tenancy in common: (default) o Elements:
? No right of survivorship
? Right to partition o Created by 1 unity:
? Possession - all tenants in common must have equal rights of possession
??????Joint tenancy with indestructible survivorship (only in MI) o If a JT is created, the right of survivorship is indestructible
??????Tenancy by entirety - when property is deeded to husband and wife o Elements:
? Right of survivorship 3

Real PropertyNo right to partition RIGHTS AND DUTIES AMONG CO-TENANTSRights and duties: o Possession - no co-tenant has the right to exclusive possession o Accountability - one co-tenant need not account to another for share of the profits/rent
? Exceptions:
? Ouster - one co-tenant is either keeping a co-tenant off the property or claiming a right of exclusive possession
? Agreement to share
? Lease of the property by one co-tenant to a 3rd party
? Depletion of natural resources o Contribution - a co-tenant has the right to force other co-tenants to pay their share for:
? Necessary repairs (not improvements)
? Any mortgage on property (signed by all co-tenants)
? Taxes or any government imposed obligation LEASING REAL PROPERTYNon-freehold estates - gives only possession, not title o Term for years - "O to A for [#] years"
? Measured by a specified period of time, no matter how short
? Reversion or remainder
? Subject to the SOF if over 1 year (must be in writing and signed) o Periodic tenancy - an ongoing, repetitive estate, until one party gives valid notice
? Creation:
? Express agreement - clearly stated
? Implication - if the lease is silent, it is presumed and measured by when the payment of rent occurs
? Operation of law: o Oral lease violating the SOF o Holdover - tenant stays lease expires and landlord accepts rent
? MI - a holdover lease stops after 1 year
? Notice of termination:
? Time must be equal to the full period in advance o If year to year, 6 months notice o MI - if tenancy is year to year, 1 year notice o MI - if rent period is less than 3 months, notice is that of the rent period
? The right effective day of termination is the last day of the period o MI - notice is not void if it states a different day o Tenancy at will - both the landlord and tenant have the right to terminate at any time
? Notice of termination:
? Either party can terminate at any time without notice
? MI - 1 month notice o If tenant fails to pay rent, landlord may terminate by providing 7 day notice in writing
? Other ways to terminate:
? Death of either party
? Waste by the tenant
? Assignment by the tenant 4

Real Property


? Transfer of title by the landlord
? Lease by the landlord to someone else Tenancy at sufferance - when a tenant wrongfully remains in possession (more than a few hours) after the date of termination
? Landlord options:
? Treat tenant as a trespasser and evict him o MI - self help is not available, use the judicial process
? Renew tenancy o For residential property, the new period is month to month o For commercial property:
? If expired tenancy was for a year or more, new tenancy is year to year
? If expired tenancy was for less than a year, new tenancy is the same as that of the expired tenancy DUTIES OF LANDLORD AND TENANT?Tenant's duties: o Pay rent o Not commit waste o If lease states covenant to repair:
? Residential lease - tenant is liable for all property damage caused by the tenant
? Commercial lease - tenant's covenant to repair is enforceable by landlord
? Exception - tenant is not usually required to rebuild structural damage due to forces outside of his control, unless the covenant expressly states otherwise
? Tenant may terminate lease if the premises are destroyed without tenant's fault
? MI - tenant may terminate if the premises is unfit for occupancy, unless expressly stated otherwise Landlord's remedies: o If tenant fails to pay rent, landlord can:
? Sue for damages;
? Evict; or
? Deduct the unpaid rent from the tenant's security deposit o If tenant unjustifiably abandons the lease, landlord can:
? Re-rent the premises and hold tenant liable for any deficiency; or
? Treat abandonment as an offer of surrender and accept by retaking the premises Landlord's duties: o Give tenant possession of the premises when the lease begins o Deliver residential premises in a habitable condition
? Implied warranty of habitability - in a residential property, landlord must provide property that is reasonably suited for residential use
? If breached, tenant may: o Terminate lease; o Make repairs and offset the cost of future rent; o Pay only the fair market value; or o Stay, pay full rent, and sue for damages
? Implied covenant of quiet enjoyment - landlord makes an implied promise that he will not breach by:
? Total eviction - terminates lease and ends tenant's obligation to pay
? Partial eviction - does not end lease and tenant can stay without paying

5 Real Property If partially evicted by one with better title than the landlord, tenant's rent is apportioned by the amount taken
? Constructive eviction - where landlord fails to provide a service making the premise uninhabitable, tenant may terminate lease and sue o Elements:
? Landlord breached a duty to the tenant
? Substantial interference with the covenant of quiet enjoyment
? Tenant gave landlord notice and reasonable time to repair
? Tenant must have abandoned the premises within a reasonable time after the breach MI - property must comply with applicable health and safety laws
? If breached, tenant may withhold rent until the repairs are done oASSIGNMENTS AND SUBLEASES?

Assignment - when tenant transfers all of the lease period o Grounds of liability:
? Liability on the conveyance - privity of estate based on possession
? Exists between the present landlord and present tenant in possession
? Liability on the contract - privity of contract based on agreement
? Exists where there is an agreement between parties Sublease - when tenant transfers a portion of the lease period o Subleasee is not liable to landlord because sublessor is deemed to have kept the estate
? No privity of contract estate between landlord and present tenant in possession EMINENT DOMAINEminent domain - when the state takes property under a lease by its power of condemnation o Partial taking - does not release tenant from obligation to pay full rent
? Tenant gets an amount of the condemnation award equal to the rent that would have to be paid over the remainder of the lease for the property taken o Full taking - lease is terminated and tenant is excused from paying rent
? Tenant shares in the condemnation award, but only to the extent that the fair rental value of the lease exceeds the rent due under the lease LANDLORD'S TORT LIABILITYRule - no duty by landlord to tenant or his invitees for injuries on the premises during the lease o Exceptions: (CARPULS)
? Common areas under landlord's control - landlord has a duty of reasonable care in maintaining common areas
? Negligent repairs - landlord is liable for injuries resulting from landlord's repair of a defect, even if landlord used due care in the repair
? Public use exception - landlord is liable for injury from defects if:
? Landlord knows or should know of a major defect;
? Landlord knows or should know the tenant will not fix the defect; and
? Landlord knows or should know the public will be using the premises
? Latent defects - landlord is under a duty to disclose defects if:
? The landlord either knows or has reason to know of the defect;
? Tenant does not know of the defect; and

6 Real Property? A reasonable person in the tenant's position would not discover it Short term lease of a furnished dwelling - landlord is liable for defects even if landlord neither knew nor had reason to know of them
? "Short term" - 3 months or less TENANT'S TORT LIABILITYRule - tenant is liable to invitees for negligent failure to correct dangerous conditions o May be able to sue landlord if contractually liable FIXTURESFixtures - cannot be removed by either seller or tenant o Look to intent o Agreements control o Tenant must remove chattels before the termination of the tenancy o Factors:
? Degree of attachment - the more that has to be done to attach it to the property, the more likely the intent was that it stay
? General custom - whether it is the type of thing that sellers or tenants normally take when they leave
? Degree of harm - tenants are favored if tenant can remove the item without substantial damage to the premises
? Trade fixtures - chattels used in a trade or business that are not fixtures and can always be removed (only applies to landlord-tenant relationships) EASEMENTS

??????Easement - a non-possessory interest in land involving a right of use o Types:
? Easement appurtenant - when the easement directly benefits the use and enjoyment of a specific piece of land
??????Servient estate - the burdened property
??????Dominant estate - the benefited property
? Easement in gross - where there is no dominant estate, only a servient estate
??????The holder of the easement acquires a right of special use in the servient estate (power lines, railroad tracks) o Creation:
? Express easement - voluntarily created by the servient owner
? Must be created in writing and satisfy the statute of frauds: o Identify the parties o Describe the dominant/servient land o Describe exact location of the easement o State the purposes for which the easement is used
? Easement by implication: (PUCCAN)
? An easement may be implied if: o Prior use by a common owner; o Continuous; o Apparent; and o Reasonably necessary
? Easement by necessity - lack of reasonably practical access to estate
? Prescriptive easements - rewards people using a particular parcel for a particular use: (similar to adverse possession) 7

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