Bar Exam MBE Real Property Review

Success on the MBE Real Property section requires more than memorizing definitions; it demands a precise understanding of how legal doctrines interact in complex, multi-issue fact patterns. This heavily tested subject examines your ability to apply centuries-old common law principles and modern statutory modifications to resolve disputes over land ownership, use, and finance. Mastering this topic is crucial for a strong MBE score, as it consistently represents a significant portion of the exam.

Foundational Estates in Land and Future Interests

Your analysis of any property question must begin by identifying the estate in land created. This term refers to the degree, quantity, nature, and extent of interest a person holds in real property. The fee simple absolute is the most complete ownership interest, but the MBE loves to test defeasible fees—estates that can be terminated upon the occurrence of a stated event. A fee simple determinable automatically expires upon the happening of the stated event (e.g., "to A, so long as the land is used for a school"), with the possibility of reverter immediately vesting in the grantor. A fee simple subject to condition subsequent does not end automatically; the grantor must re-enter and retake the property to terminate it.

Following the present estate, you must identify any future interests—rights to possess property that are capable of becoming possessory in the future. Key future interests retained by grantors are the reversion (what is left when a smaller estate is granted), possibility of reverter (following a determinable fee), and right of entry (following a fee simple subject to condition subsequent). Future interests created in third parties include remainders and executory interests. A vested remainder is given to an ascertained person and is not subject to any condition precedent other than the natural termination of the prior estate. A contingent remainder is given to an unascertained person or is subject to a condition precedent. The Rule Against Perpetuities (RAP) is the exam's perennial favorite. The common law rule states: "No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest." For the MBE, apply the classic "what if" test at the moment the interest is created. If there is any possibility, however remote, that the interest will vest outside the perpetuities period, it is void. Many jurisdictions have enacted wait-and-see statutes or the Uniform Statutory Rule Against Perpetuities, but the MBE primarily tests the common law rule.

Concurrent Ownership, Landlord-Tenant, and Easements

When property is owned by more than one person at the same time, you must determine the type of concurrent ownership. The default is a tenancy in common, where each tenant holds an undivided fractional share with no right of survivorship. A joint tenancy features the right of survivorship and requires the "four unities": time, title, interest, and possession. Severance, often by a unilateral act like one joint tenant selling their interest, destroys the joint tenancy as to that share. A tenancy by the entirety is available only to married couples and features a strong right of survivorship that cannot be severed by one spouse alone.

The landlord-tenant relationship is governed by a mix of common law and widespread statutory reforms. Know the differences between the tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance. The implied warranty of habitability is critical: it applies to residential leases, cannot be waived, and if breached, the tenant may repair-and-deduct, withhold rent, or use it as a defense in an eviction action. For a commercial lease, the doctrine of constructive eviction applies instead—if the landlord's wrongful act substantially interferes with the tenant's use and enjoyment, and the tenant vacates within a reasonable time, the tenant's obligations are terminated.

An easement is a non-possessory right to use another's land. An easement appurtenant benefits a particular parcel of land (the dominant tenement) and runs with the land, transferring automatically. An easement in gross benefits an individual or entity personally. Creation can occur by express grant, implication (based on prior use or necessity), prescription (open, notorious, continuous, and adverse use for the statutory period), or estoppel. Termination can occur by release, merger, abandonment, or, for easements by necessity, when the necessity ends. A license is a mere personal, revocable permission to enter land and is not an interest in property.

Covenants, Recording Acts, and Mortgages

Real covenants and equitable servitudes are promises concerning land use that "run with the land" to bind successors. For a covenant to run at law, it must meet stringent requirements: writing (Statute of Frauds), intent for it to run, touch and concern the land (affects the use, value, or enjoyment of the property), and horizontal and vertical privity. Equitable servitudes are enforced in equity (injunctions) and have slightly relaxed requirements, often lacking strict privity but requiring notice. The key difference for the MBE: courts use the "touch and concern" test rigorously for real covenants (damages) but may be more flexible for equitable servitudes (injunctions) to enforce a common scheme of development.

Recording acts protect bona fide purchasers for value and provide a system for determining priority of interests. In a notice jurisdiction, a subsequent BFP who takes without notice of a prior unrecorded interest wins. In a race-notice jurisdiction, a subsequent BFP who takes without notice and records first wins. A "pure race" statute (rare) awards the property to whoever records first, regardless of notice. Always analyze notice: actual, record (found in the chain of title), or inquiry (facts that would lead a reasonable person to investigate).

In mortgages, understand the title, lien, and intermediate theories. The acceleration clause, due-on-sale clause, and the borrower's right of redemption are key. The equity of redemption is the right to pay the debt and reclaim the property before foreclosure. After a foreclosure sale, some states allow a statutory right of redemption for a set period. If a foreclosure sale yields surplus proceeds, they go to the mortgagor; if it yields a deficiency, the lender may seek a deficiency judgment unless barred by statute.

Common Pitfalls

1. Misapplying the Rule Against Perpetuities: The most common error is applying the rule at the wrong time or to the wrong interests. Remember, the test is applied at the creation of the interest. Furthermore, RAP does not apply to vested interests, reversions, possibilities of reverter, rights of entry, or resulting trusts. It applies to contingent remainders, executory interests, and options to purchase in gross.
2. Confusing Easement Types and Termination: Do not confuse an easement appurtenant with an easement in gross, as this changes who can enforce it. Further, do not assume excessive non-use alone constitutes abandonment; there must be clear affirmative conduct showing intent to relinquish the right, or circumstances causing the easement to become impossible to use.
3. Mixing Up Covenant Requirements: A covenant will fail to run at law if you cannot establish horizontal privity (like a landlord-tenant or grantor-grantee relationship at creation) and vertical privity (a succession of estate between the original and current parties). For equitable servitudes, the focus is on notice and intent within a common scheme, not formal privity. Applying the wrong set of requirements is a frequent trap.
4. Overcomplicating Recording Act Analysis: Step back and apply the statute methodically. First, identify the jurisdiction type (notice or race-notice). Second, determine if the subsequent party is a purchaser for value (not a donee). Third, assess if they had any form of notice before acquiring their interest. In a race-notice state, finally check who recorded first. Missing the "before acquisition" timing for notice is a classic mistake.

Summary

• Estates & Future Interests: Systematically identify the present possessory estate (e.g., fee simple determinable) and any accompanying future interests, applying the Rule Against Perpetuities to any contingent future interest.
• Concurrent & Leasehold Estates: Distinguish tenancies by the presence or absence of a right of survivorship and the required unities. In landlord-tenant law, apply the implied warranty of habitability to residential leases and constructive eviction to commercial contexts.
• Easements vs. Covenants: An easement is a right to use land; a covenant is a promise concerning how land is used. Know the creation methods for easements and the strict "touch and concern" and privity requirements for covenants running at law.
• Recording Acts: For priority disputes, classify the jurisdiction and determine if a subsequent purchaser qualifies for protection by being a BFP without notice who complies with the recording rule (in a race-notice state).
• Mortgage Fundamentals: The mortgagor holds the equity of redemption before foreclosure. Understand the lender's remedies and the consequences of a foreclosure sale, including potential deficiency judgments.