Real Estate and Property

Real Estate and Property on the CP Exam

Real Estate and Property accounts for 7% of the CP exam. This area covers property ownership, transfers, mortgages, landlord-tenant law, and zoning. Paralegals in real estate practice prepare closing documents, conduct title searches, and review purchase agreements.

Types of Property Interests

• Fee simple absolute: The highest form of ownership. Complete rights to use, possess, and transfer. Inheritable and of infinite duration.
• Life estate: Ownership for the duration of someone's life. Life tenant must not commit waste (damage the property's value).
• Fee simple defeasible: Fee simple subject to a condition. Determinable (ends automatically) or subject to condition subsequent (grantor must exercise right of entry).
• Concurrent ownership: Joint tenancy (right of survivorship, four unities), tenancy in common (no right of survivorship), tenancy by the entirety (married couples).

Deeds and Transfer

• General warranty deed: Provides the most protection. Grantor warrants title against all defects, including those arising before the grantor's ownership.
• Special warranty deed: Grantor warrants only against defects arising during the grantor's ownership.
• Quitclaim deed: Conveys whatever interest the grantor has, if any. No warranties. Common in divorces and clearing title clouds.
• Requirements: Writing, identification of parties, legal description of property, grantor's signature, delivery, and acceptance.

Recording System

• Race statute: First to record wins, regardless of notice.
• Notice statute: A subsequent bona fide purchaser (BFP) without notice prevails over an unrecorded prior interest.
• Race-notice statute: A subsequent BFP without notice who records first prevails. Most common type.

Mortgages and Foreclosure

A mortgage is a security interest in real property. The borrower signs a promissory note (the debt) and a deed of trust or mortgage (the security). Upon default, the lender may foreclose through judicial or non-judicial proceedings depending on state law. The borrower may have a statutory right of redemption after foreclosure sale.

Landlord-Tenant Law

• Lease types: Term for years (fixed end date), periodic tenancy (auto-renewing), tenancy at will (no fixed duration), tenancy at sufferance (holdover).
• Landlord duties: Implied warranty of habitability (residential), duty to maintain common areas, duty not to interfere with tenant's quiet enjoyment.
• Tenant remedies: Repair and deduct, rent withholding, constructive eviction defense.

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