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Smith and Roberson’s Business Law

Richard A. Mann, Barry S. Roberts

Chapter 49

Transfer and Control of Real Property - all with Video Answers

Educators


Chapter Questions

Problem 1

Arthur was the father of Bridgette, Clay, and Dana and the owner of Redacre, Blackacre, and Greenacre.
Arthur made and executed a warranty deed conveying Redacre to Bridgette. The deed provided that " this deed shall become effective only on the death of the grantor." Arthur retained possession of the deed and died, leaving the deed in his safe deposit box.
Arthur made and executed a warranty deed conveying Blackacre to Clay. This deed also provided that "this deed shall become effective only on the death of the grantor." Arthur delivered the deed to Clay. After Arthur died, Clay recorded the deed.
Arthur made and executed a warranty deed conveying Greenacre to Dana. Arthur delivered the deed to Lesley with specific instructions to deliver the deed to Dana on Arthur's death. Lesley duly delivered the deed to Dana when Arthur died.
a. What is the interest of Bridgette in Redacre, if any?
b. What is the interest of Clay in Blackacre, if any?
c. What is the interest of Dana in Greenacre, if any?

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04:07

Problem 2

Arkin, the owner of Redacre, executed a real estate mortgage to the Shawnee Bank and Trust Company for $$\$ 100,000$$. After the mortgage was executed and recorded, Arkin constructed a dwelling on the premises and planted a corn crop. After Arkin defaulted in the payment of the mortgage debt, the bank proceeded to foreclose the mortgage. At the time of the foreclosure sale, the corn crop was mature and unharvested. Arkin contends that the mortgage should not apply to (a) the dwelling and (b) the corn crop. Explain whether Arkin is correct.

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator

Problem 3

Robert and Stanley held legal title of record to adjacent tracts of land, each consisting of a number of five acres. Stanley fenced his five acres in 1992, placing his east fence fifteen feet onto Robert's property. Thereafter, he was in possession of this fifteen-foot strip of land and kept it fenced and cultivated continuously until he sold his tract of land to Nathan on March 1, 1997. Nathan took possession under deed from Stanley and continued possession and cultivation of the fifteen-foot strip that was on Robert's land until May 27,2017 , when Robert, having on several occasions strenuously objected to Nathan's possession, brought suit against Nathan for trespass. Explain whether Nathan has gained title by adverse possession.

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05:52

Problem 4

Marcia executed a mortgage on Blackacre to secure her indebtedness to Ajax Savings and Loan Association in the amount of $$\$ 125,000$$. Later, Marcia sold Blackacre to Morton. The deed contained the following provision: "This deed is subject to the mortgage executed by the Grantor herein to Ajax Savings and Loan Association."
The sale price of Blackacre to Morton was $$\$ 150,000$$. Morton paid $$\$ 25,000$$ in cash, deducting the $$\$ 125,000$$ mortgage debt from the purchase price. Upon default in the payment of the mortgage debt, Ajax brings an action against Marcia and Morton to recover a judgment for the amount of the mortgage debt and to foreclose the mortgage. Can Ajax recover from Marcia and Morton? Explain.

Charles Carter
Charles Carter
Numerade Educator

Problem 5

On January 1, 2017, Davis and Hershey owned Blackacre as tenants in common. On July 1,2017, Davis made a written contract to sell Blackacre to Grigg for $$\$ 250,000$$. Pursuant to this contract, Grigg paid Davis $$\$ 250,000$$ on August 1, 2017, and Davis executed and delivered to Grigg a warranty deed to Blackacre. On February 1, 2018, Hershey quitclaimed his interest in Blackacre to Davis. Grigg brings an action against Davis for breach of warranty of title. What judgment?

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Problem 6

Barker operated a retail bakery, Davidson a drugstore, Farrell a food store, Gibson a gift shop, and Harper a hardware store in adjoining locations along one side of a single suburban village block. As the population grew, the business section developed at the other end of the village, and the establishments of Barker, Davidson, Farrell, Gibson, and Harper were surrounded for at least a mile in each direction solely by residences. The village adopted a typical zoning ordinance, the provisions of which declared the area including the five stores to be a "residential district for single-family dwellings." Thereafter, Barker tore down the frame building that housed the bakery and began to construct a modern brick bakery. Davidson found her business increasing to such an extent that she began to build an addition that would extend the drug-store to the rear alley. Farrell's building was destroyed by fire, and he started to reconstruct it with the intention of restoring it to its former condition. Gibson changed the gift shop into a sporting goods store and after six months of operation decided to go back into the gift shop business. Harper sold his hardware store to Hempstead. The village building commissioner brings an action under the zoning ordinance to enjoin the construction work of Barker, Davidson, and Farrell and to enjoin the carrying on of any business by Gibson and Hempstead. Assume the ordinance is valid. What result?

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Problem 7

Alda and Mattingly are residents of phase I of the Chimney Hills subdivision. The lots owned by Alda and Mattingly are subject to the following restrictive covenant: "Lots shall be for single-family residence purposes only." Alda intends to convert her carport into a beauty shop, and Mattingly brings suit against Alda to enjoin her from doing so. Alda argues that the covenant restricts only the type of building that can be constructed, not the incidental use to which residential structures are put. Will Alda be able to operate a beauty shop on the property? Why or why not?

Rashmi Sinha
Rashmi Sinha
Numerade Educator

Problem 8

The city of Boston sought to condemn land in fee simple for use in constructing an entrance to an underground terminal for a subway. The owners of the land contend that no more than surface and subsurface easements are necessary for the terminal entrance and seek to retain air rights above thirty-six feet. The city argues that any building utilizing this airspace would require structural supports that would interfere with the city's plan for the terminal. The city concedes that the properties around the condemned property could be assembled and structures could be designed to span over the condemned property, in which case the air rights would be quite valuable. Can the city condemn the property? Explain.

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Problem 9

In May 2007, Fred Parramore executed four deeds, each conveying a life estate in his land to him and his wife and a remainder interest in one-fourth of his land to each of his four children: Alney, Eudell, Bernice, and Iris. Although Fred executed and acknowledged the four deeds as part of his plan to distribute his estate at his death, he did not deliver them to his children at this time. Instead, he placed the deeds with his will in a safe deposit box and instructed the children to pick up their deeds upon his death. Fred later conveyed Alney's deed to Alney, thereby vesting Alney's interest in that parcel, but Eudell's, Bernice's, and Iris's deeds were never handed over to them during Fred's lifetime. Fred, however, acted as if the land were beyond his control and on one occasion told a prospective buyer that the land had already been deeded away. When Fred died in November 2017, Alney brought this action, claiming that the deeds to Eudell, Bernice, and Iris were ineffective because they had never been handed over during Fred's lifetime. Accordingly, Alney argued, the remaining land should pass in equal shares to each of the four children under the residuary clause of Fred's will. Who will prevail? Why?

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Problem 10

The Gerwitz family resides on a piece of land known as Lot $\#24$ of the Belleville tract, which they acquired by deed in 1998. Shortly thereafter, the Gerwitzes began to use the adjacent vacant Lot $\#25$. At various times, they planted grass seed, flowers, and shrubs on the land and used it for picnics and cook-outs. In 2017, Gelsomin acquired Lot $\#25$ and constructed a foundation on it so that he could place a house there. The Gerwitzes then brought this action to stop him, claiming title to Lot $\#25$ by adverse possession. Discuss whether the Gerwitzes have obtained title by adverse possession.

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Problem 11

Leo owned a one-story, one-family dwelling in a single-family residential zoning district in Detroit. He attempted to sell the house with its adjoining lot for $$\$ 138,500$$. Houses in the neighborhood generally sold for $$\$ 120,000$$ to $$\$ 125,000$$. Immediately to the west of Leo's property was a gasoline service station. In addition, Leo's property was located on a corner frequented with heavy traffic. Having received no offers from residential use buyers during the period of over a year that the property was listed and offered for sale, Leo applied to the board of zoning appeals for a variance to permit the use of the property as a dental and medical clinic and to use the side yard for off-street parking. The variance would be subject to certain conditions, including the preservation of the building's exterior as that of a one-family dwelling. Puritan-Greenfield Improvement Association, a nonprofit corporation, filed a complaint against Leo's variance request. Discuss whether the variance should be granted.

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04:57

Problem 12

The Glendale Church purchased a twenty-one-acre parcel of land in a canyon along the banks of Mill Creek in Angeles National Forest. The church used the twelve flat acres next to the stream to operate a campground for disabled children. This area had a number of improved buildings located on it. In July, a forest fire destroyed all ground cover upstream from the church's campground, and a subsequent flood destroyed all the buildings. In response, the county of Los Angeles enacted an interim ordinance that temporarily prohibited the church from constructing new buildings. Is the church entitled to compensation for a temporary taking of its property? Why or why not?

Charles Carter
Charles Carter
Numerade Educator
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Problem 13

Robert V. Gross owned certain land on which he proposed to construct an eighty-three-unit apartment house. The land, however, was subject to a restriction imposed by a deed to a predecessor in title that provided that no part of the premises could be used for business purposes other than raising, growing, and selling live bait; selling fishing tackle; and selling sporting goods. Explain whether the restriction prohibits the construction and operation of an apartment house.

James Kiss
James Kiss
Numerade Educator
01:33

Problem 14

For seven years, Desford Potts had owned a six-acre tract of land within the corporate limits of the city of Franklin. The tract contained a livestock barn in which Potts stored lumber and other building materials. Bricks were also stored in stacks four or five feet high outside and behind the barn. Franklin passed a zoning ordinance by virtue of which Potts's lot was classified as residential property. Soon afterward, Potts moved some saw logs onto his back lot, and the city complained that Potts's use of his property for storage of building materials was a "nonconforming use." Potts then brought an action to enjoin interference by the city of Franklin. Explain whether Potts will prevail.

Jennifer Stoner
Jennifer Stoner
Numerade Educator
01:33

Problem 15

Sam and Eleanor Gaito purchased a home from Howard Frank Auman, Jr., in the spring of 2014. Auman had completed the construction of the house in November 2009. In the interim, three different parties had lived in the house for brief periods, but Auman had retained ownership. The last tenants, the Ashleys, experienced difficulties with the home's air conditioning system. Repairs were attempted, but no effort was made to change the capacity of the air conditioning unit. When the Gaitos moved into the house in June 2014, they too had problems with the air conditioning. The system created only a ten-degree difference between the outside and inside temperatures. The Gaitos complained to Auman on a number of occasions, but extensive repairs failed to correct the cooling problem. In May 2017, the Gaitos brought an action against Auman, alleging that the purchase price of the home included central air conditioning and that Auman had breached the implied warranty of habitability. At trial, an expert in the field of heating and air conditioning testified that a four-ton air conditioning system, rather than the three-and-onehalf-ton system originally installed, was appropriate for the Gaitos' house. The jury returned a verdict in favor of the Gaitos in the amount of $$\$ 3,655$$, and the court of appeals affirmed. What result?

Jennifer Stoner
Jennifer Stoner
Numerade Educator

Problem 16

In 1972, South Carolina enacted a Coastal Zone Management Act requiring any person using land in a "critical area" to obtain a permit for any uses other than those to which the critical area was devoted when the Act went into effect on September 28, 1977. In 1986, Lucas paid $$\$ 975,000$$ for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to develop a residential subdivision known as "Beachwood East." Because no portion of those lots was included in a "critical area" at that time,
Lucas was not required to obtain a permit. In 1988 , however, South Carolina enacted the Beachfront Management Act, which established a "baseline" for the landward-most points of erosion and in effect barred the erection of any permanent habitable structures on his two parcels. Lucas filed suit in state court, claiming that the new statute violated his Fifth and Fourteenth Amendment rights by taking property without compensation. Explain.

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Problem 17

Barba $\&$ Barba Construction, Inc., constructed a multilevel addition to a single-family house in Glenview, Illinois. Before the addition, the residence consisted of approximately 2,300 square feet. After the addition, the house consisted of approximately 3,200 square feet. More than eleven years later, John W. VonHoldt purchased the house. Shortly after taking occupancy, VonHoldt noticed a deflection of the wood flooring at the partition wall separating the master bedroom from an adjoining bathroom. This deflection created a depression in the floor plane. VonHoldt maintained that due to the thickness of the carpet, the depression was nearly concealed. An investigation revealed that the addition had not been constructed in accordance with the architectural plans approved by the Village of Glenview or the Glenview Building Code. This variance resulted in excessive stress on the floor joists and inadequate support for a portion of the roof and ceiling, causing a greater-thanexpected floor deflection. VonHoldt brought a lawsuit against Barba $\&$ Barba for breach of an implied warranty of habitability. Explain who should prevail.

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