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An owner sold a parcel of real estate to a buyer with the stipulation that the buyer was not allowed to sell alcohol from the prem- ises. The buyer sold the property 10 years later to a buyer who converted the build- ing into a convenience store that sold beer. Should the owner or owner’s heirs claim a right of re-entry, what would be the basis for the lawsuit?

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Question & Answer

Review the question and all answer choices

A

Violation of a covenant

A covenant is a contractual promise that runs with the land and is enforceable through an injunction or damages, not through forfeiture of title — the question specifies that the owner seeks a 'right of re-entry,' which is a remedy for a condition subsequent, not a covenant violation, making this classification legally incorrect.

B

Violation of a condition subsequent

Correct Answer
C

Violation of a condition precedent

A condition precedent is a condition that must be satisfied BEFORE a property right vests or a contract becomes effective — it precedes the transfer, not follows it; since the property was already conveyed and the restriction applied to future use after the sale, this is a post-conveyance condition, not a pre-conveyance one.

D

Violation of the statute of frauds

The Statute of Frauds requires certain contracts, including real estate contracts, to be in writing to be enforceable — it governs the form of the agreement, not the nature of a property condition or the grantor's right to reclaim property upon a use violation, making it entirely inapplicable to the legal basis for a right of re-entry lawsuit.

Why is this correct?

A fee simple subject to a condition subsequent is created when a grantor conveys property with a restriction and retains a 'right of re-entry' (also called a 'power of termination'), which must be actively exercised if the condition is violated — the estate does not automatically terminate. The original deed's prohibition on selling alcohol is a classic condition subsequent, and when the subsequent buyer violated it by selling beer, the original owner or heirs did not automatically regain title; they must file a lawsuit to exercise their right of re-entry. California courts, applying common law property principles codified in California Civil Code sections governing defeasible fees, would recognize this as a condition subsequent based on the language of the original conveyance and the grantor's retained right of re-entry.

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