Real Property Law Flashcards

Texas Property Code § 13.001 establishes which type of recording act?

Answer: A race-notice statute, where a bona fide purchaser without notice must also record first to prevail

Texas follows a race-notice recording system: an unrecorded instrument is void as to a subsequent purchaser for value without notice who records first.

Under the shelter rule in Texas:

Answer: A grantee from a bona fide purchaser takes free of prior unrecorded interests even if the grantee had actual notice

The shelter rule allows a grantee to take the same protected status as their grantor BFP, even if the grantee personally had actual notice of an unrecorded prior interest.

A fee simple determinable is distinguished from a fee simple subject to condition subsequent in that:

Answer: In a fee simple determinable, the estate ends automatically upon the limiting event, while a fee simple subject to condition subsequent requires the grantor to exercise a right of entry

A fee simple determinable ends automatically (grantor retains a possibility of reverter), while a fee simple subject to condition subsequent requires the grantor's affirmative exercise of a right of entry to reclaim the property.

Under the common-law Rule Against Perpetuities, an interest is void if it might not vest within:

Answer: A life in being at the creation of the interest plus 21 years

The RAP requires all future interests to vest, if at all, within a life in being at the creation of the interest plus 21 years; any interest that might vest outside this window is void ab initio.

Which of the following future interests is held by a third party rather than the grantor?

Answer: Remainder

A remainder is a future interest created in a third party that becomes possessory upon the natural expiration of a prior estate; reversions, possibilities of reverter, and rights of entry are all retained by the grantor.

A vested remainder subject to open is best described as:

Answer: A class remainder where at least one member is ascertained but the class may expand to include additional members

A vested remainder subject to open is held by a class — such as 'children' — where at least one member is ascertained and vested, but the class remains open for additional members who may later qualify.

Marketable title, which a seller is generally required to deliver at closing, means title that is:

Answer: Free from reasonable doubt about its validity, such that a reasonable buyer would accept it without objection

Marketable title is title reasonably free from doubt or defects that a reasonable, prudent buyer would object to; it does not require absolute perfection or judicial confirmation.