Business Law - Chapter 49

___ property consists of land and everything permanently attached to it.


___ property includes airspace and subsurface rights, as well as rights to plants and vegetation.


Any limitations on either airspace rights or subsurface rights, called ____, normally must be indicated on the document that transfers title at the time of purchase.


When crops are sold by themselves they are considered ___ property.


Sale of crops is a sale of __ and is governed by the __.

goods, UCC

One who possesses the entire bundle of property rights is said to hold the property in ___, which is the most complete form of ownership.

fee simple

Traditionally, ownership interests in real property were referred to as ___.

estates in land

In a ___, the owner has the greatest aggregation of rights, privileges, and power possible.

fee simple absolute

In a fee simple absolute the owner can give the property away or dispose of the property by __ or by ___.

deed, will

A person who uses his or her property in a manner that unreasonably interferes with others' right to use or enjoy their own property can be liable for the tort of ___.


A ___ is an estate that lasts for the life of some specified individual.

life estate

A ____, or transfer of real property, "to A for his life", creates a life estate.


A life tenant has the right to use the land provided that he or she commits no ____ (injury to the land).


The owner of a life estate has the same rights as a fee simple owner except he or she must maintain the ___ of the property during his or her tenancy.


Persons who share ownership rights simultaneously in particular property (including real property and personal property) are said to have ____.

concurrent ownership

There are two principal types of concurrent ownership: ___ and ___.

tenancy in common, joint tenancy

The term ___ refers to a form of co-ownership in which each of two or more persons owns an undivided interest in the property.

tenancy in common

Under tenancy in common, if an owner dies his or her ownership passes to ___.

his or her heirs

In most states it is presumed that a co-tenancy is a ___ unless there is specific language indicating the intent to establish a joint tenancy.

tenancy in common

In a ___, each of two or more persons owns an undivided interest in the property, but a deceased owner's interest passes to the surviving owners.

joint tenancy

The ____ distinguishes a joint tenancy from a tenancy in common.

right of survivorship

Although a joint tenant can transfer her or his rights by sale or gift to another without the consent of the other joint tenants, doing so terminates the ___.

joint tenancy

The person who receives a transfer of property from a joint tenant becomes a ___.

tenant in common

A less common form of shared ownership of real property by husband and wife is ____.

tenancy by the entirety

____ differs from joint tenancy in that neither spouse may separately transfer his or her interest during his or her lifetime unless the other spouse consents.

tenancy by the entirety

A divorce, either spouse's death, or mutual agreement will terminate a ___.

tenancy by the entirety

After a divorce, ___ is divided equally in some states and according to the discretion of the court in other states.

community property

A ___ is created when a real property owner or lessor (landlord) agrees to convey the right to possess and use the property to a lessee (tenant) for a certain period of time.

leasehold estate

In every leasehold estate, the tenant has a ___ right to exclusive, though ___, possession.

qualified, temporary

A ___, also called a tenancy for years, is created by an express contract stating that the property is leased for a specified period of time, such as a month, a year, or a period of years.

fixed-term tenancy

If a fixed-term tenant dies during the period of the lease, the lease interest passes to the tenant's heirs as ___.

personal property

With a ___, the lease does not specify how long it is to last but does specify that rent is to be paid at certain intervals.

periodic tenancy

A ____ tenancy is automatically renewed for another rental period unless properly terminated.


With a ___, either party can terminate the tenancy without notice.

tenancy at will

The mere possession of land without right is called ___.

tenancy at sufferance

A ___ is not a true tenancy because it is created when a tenant wrongfully retains possession of property.

tenancy at sufferance

____ include easements, profits, and licenses.

nonpossessory interests

___ are basically interests in real property owned by others.

nonpossessory interests

An ___ is the right of a person to make limited use of another person's real property without taking anything from the property.


A ___ is the right to go onto land owned by another and take away some part of the land itself or some product of the land.


Easements and profits can be classified as either ___ or ___.

appurtenant, gross

An easement (or profit) ___ arises when the owner of one piece of land has a right to go onto (or remove something from) and adjacent piece of land owned by another.


The land that is benefited by an easement is called the ____, and the land that is burdened is called the ___.

dominant estate, servient estate

Because easements appurtenant are intended to benefit the land, they are ___ with the land when it is transferred,


In an easement or profit ___, the right to use or take things from another's land is given to one who does not own an adjacent tract of land.

in gross

Easements ___ are intended to benefit a particular person or business, not a particular piece of land, and cannot be transferred.

in gross

Most easements and profits are created by an ___ in a contract, deed, or will.

express grant

An easement or profit may arise by ___ when the circumstances surrounding the division of a parcel or property imply its creation.


A person who rents an apartment has an ___ in the private road leading up to it.

easement by necessity

An easement arises by ___ when one person exercises an easement, such as a right-of-way, on another person's land without the landowner's consent.


With an ___ the use must be apparent and continue for the length of time required by the applicable statute of limitations.

easement by prescription

Mere ___ will not extinguish an easement or profit unless it is accompanied by an overt act showing the intent to abandon.


In the context of real property, a ___ is the revocable right of a person to come onto another person's land.


A ticket to attend a movie at a theater or a concert is an example of a ___.


A real estate sales contract usually fixes a date for performance, or ___, that frequently is four to twelve weeks after the contract is signed.


On the ___ day, the seller of real estate conveys the property to the buyer by delivering the deed to the buyer in exchange for payment of the purchase price.


Deposits toward a real estate purchase price normally are held in a special account, called an ___ account, until all of the conditions of sale have been met.


An ___ may be a title company, bank, or special company that acts as a neutral party in the sales transaction to facilitate the sale and exchange of documents.

escrow agent

A grantor (seller) of real estate is obligated to transfer ___, or good title, to the grantee (buyer).

marketable title

___ means that the grantor's ownership is free from encumbrances (except those disclosed by the grantor) and free of defects.

marketable title

If the buyer signs a purchase contract and then discovers that the seller does not have a ___, the buyer can withdraw from the contract.

marketable title

The most common way of ensuring title is through ___, which insures the buyer against loss from defects in title to real property.

title insurance

When financing the purchase of real property, almost all lenders require ___ to protect their interests in the collateral for the loan.

title insurance

The common law rule of ___ ("let the buyer beware") held that the seller of a home made no warranty as to its soundness or fitness (unless the contract or deed stated otherwise).

caveat emptor

Today most states imply a warranty- the ___- in the sale of new homes.

implied warranty of habitability

The seller of a new house warrants that it will be fit for ___ even if the deed or contract of sale does not include such a warranty.

human habitation

The New York appellate court found that the doctrine of ___ did not apply in the haunted house case and the court allowed the buyer to rescind the purchase contract and recover the down payment.

caveat emptor

Possession and title to land are passed from person to person by means of a ___- the instrument used to transfer real property.


Unlike a contract, a ___ does not have to be supported by legally sufficient consideration.


To be valid a deed must include the names of the ___ (the giver or seller) and the ___ (the donee or buyer).

grantor, grantee

To be valid, a deed must include words evidencing the ___.

intent to convey

If a deed does not specify the type of estate being transferred, it presumptively transfers the property in __.

fee simple absolute

To be valid, a deed must include a legally sufficient ___.

description of the land

___ is a system of measuring boundary lines by the distance between two points, often using physical features of the local geography.

metes and bounds

To be valid a deed must include the grantor's ___.


A ___ deed makes the greatest number of warranties and thus provides the most extensive protection against defects of title.


Warranty deeds include a number of ___, or promises, that the grantor makes to the grantee.


A covenant of ___ is a warranty that the buyer will not be disturbed in his or her possession of the land.

quiet enjoyment

Generally, the warranty deed makes the __ liable for all defects of title by the grantor and previous titleholders.


In contrast to a warranty deed, a ___ deed, which is also referred to as a limited warranty deed, warrants only that the grantor or seller held good title during his or her ownership of the property.

special warranty

If a ____ discloses all liens or other encumbrances, the seller will not be liable to the buyer if a third person subsequently interferes with the buyer's ownership.

special warranty deed

A ___ offers the least protection against defects in the title.

quietclaim deed

With a ____ deed, the grantor simply states, "I grant the property to you" or "I convey, or bargain and sell, the property to you".


Every state has a __ which allows deeds to be recorded in the county in which the property is located.

recording statute

A person who wrongfully possesses (by occupying or using) the real property of another may eventually acquire title to it through ___.

adverse possession

When one person possesses the real property of another for a certain statutory period of time (three to thirty years, depending on the state, with ten years being the most common) that person acquires title to the land by ___.

adverse possession

For property to be held adversely, possession must be ___, in addition to ___.

actual and exclusive, hostile and adverse

For property to be held adversely, possession must be ___ for the required period of time.

continuous and peaceable

The right known as ___ is sometimes referred to as the condemnation power of government to take land for public use.

eminent domain

If a land owner refuses an eminent domain government offer to buy the land, the government brings a judicial (____) proceeding to obtain title to the land.


When the government uses its power of eminent domain to acquire land owned by a private party, a ___ occurs.


Under the "____" of the Fifth Amendment to the U.S. Constitution, the government must pay "just condemnation" to the owner.

takings clause

____ occurs when a government simply takes private property from a landowner without paying any compensation, thereby forcing the landowner to sue the government for compensation.

inverse condemnation

A private restriction on the use of land is known as a __.

restrictive covenant

If a restrictive covenant is binding on the party who purchases the property originally and on subsequent purchasers as well, it is said to "___".

run with the land

A covenant running with the land must be ___ and subsequent purchasers must have reason to know about it.

in writing

The rules and regulations that collectively manage the development and use of land are known as ___.

zoning laws

When a property owner wants to use his or her land in a manner not permitted by zoning rules, he or she can request a ___, which allows an exception to the rules.


The property owner requesting a variance must demonstrate that the requested variance is necessary for ____.

reasonable development

If a landlord deprives a tenant of possession of the leased property or interferes with the tenant's use or enjoyment of it, an ___ occurs.


A ___ occurs when a landlord wrongfully performs or fails to perform any of the duties the lease requires, thereby making the tenant's further use and enjoyment of the property exceedingly difficult or impossible.

constructive eviction

When rent withholding is authorized under a statute, the tenant must usually put the amount withheld into an __.

escrow account

A tenant's transfer of his or her entire interest in leased property to a third person is an ___ of the lease.


The tenant's transfer of all or part of the premises for a period shorter than the lease term is a ___.


The same restrictions that apply to an ___ of a tenant's interest in leased property apply to a sublease.