Learning Outcomes
After reading this article, you will be able to identify which state's law governs disputes involving real property, explain the general rule of the law of the situs, recognize key exceptions, and determine how courts enforce judgments affecting real property. You will be equipped to answer MBE questions on conflicts of law principles as they apply to ownership and disputes over real property.
MBE Syllabus
For MBE, you are required to understand how conflicts of law rules determine which state's law applies in disputes involving real property. This article covers:
- The general rule that the law of the situs governs ownership and disputes about real property.
- Exceptions to the situs rule, including contractual choice of law and certain family law matters.
- The enforceability of judgments affecting real property across state lines.
- The impact of the Full Faith and Credit Clause on real property judgments.
- How these rules interact with other property doctrines tested on the MBE.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
-
In a dispute over title to land located in State X, which state's law will a court in State Y generally apply?
- State Y
- State X
- The state where the parties reside
- The state where the contract was signed
-
Which of the following is an exception to the general rule that the law of the situs governs real property disputes?
- Divorce proceedings dividing marital property
- Disputes over tangible personal property
- Adverse possession claims
- Boundary disputes between states
-
A court in State A issues a judgment affecting title to land in State B. What is the likely effect of this judgment in State B?
- It is automatically enforceable in State B
- It has no effect in State B
- It is enforceable only if State B gives full faith and credit
- It is enforceable only if the parties agree
Introduction
Disputes involving ownership or rights in real property often raise the question of which state's law applies when the property, the parties, or the litigation are connected to more than one state. The MBE tests your knowledge of the conflicts of law rules that govern these situations, especially the principle that the law of the situs—where the property is located—controls most real property disputes.
The General Rule: Law of the Situs
The foundational rule is that the law of the situs (the state where the real property is located) governs all substantive issues concerning title, ownership, transfer, and rights in real property. This applies regardless of where the litigation is brought or where the parties reside.
Key Term: Law of the Situs
The principle that the law of the state where the real property is located governs all substantive issues relating to that property.
Scope of the Situs Rule
The law of the situs applies to:
- Questions of title and ownership
- Validity and effect of conveyances, mortgages, and leases
- Adverse possession and prescription
- Easements, covenants, and servitudes
- Rights of co-owners and partition
- Recording acts and priorities
Worked Example 1.1
A resident of State A executes a deed in State A, transferring land located in State B to a buyer who also lives in State A. Later, a dispute arises over whether the deed was validly delivered. Which state's law determines the validity of the transfer?
Answer: State B's law applies, because the land is located in State B. The law of the situs governs all substantive issues regarding real property, including validity of conveyances.
Exceptions to the Situs Rule
While the situs rule is broad, there are important exceptions:
1. Contractual Choice of Law
If the parties to a contract concerning real property (such as a sale or mortgage) expressly choose the law of a particular state to govern their contract, courts may honor that choice for contract interpretation and enforcement—except where it would affect title or interests in land located elsewhere. However, the law of the situs still controls issues of title, validity of conveyance, and recording.
2. Marital Property and Divorce
Courts may apply their own state's law to divide marital property in divorce, even if the property is located in another state. However, the law of the situs still controls questions of title and third-party rights.
3. Trusts and Wills
The law of the situs governs the validity of trusts and testamentary dispositions of real property, but courts may apply the law of the decedent's domicile to interpret wills unless it would affect title to land in another state.
4. Federal Law Preemption
In rare cases, federal law may preempt state law regarding real property, such as in federal land disputes or bankruptcy.
Worked Example 1.2
A couple divorces in State X. Their only real property is a house in State Y. The divorce court in State X awards the house to one spouse. What law governs the effect of this order on title to the house?
Answer: State Y's law governs title to the house, because it is located in State Y. The divorce decree may be recognized, but the law of the situs controls title and recording.
Enforceability of Judgments Affecting Real Property
1. In Rem and Quasi In Rem Jurisdiction
A court generally cannot issue a judgment affecting title to real property located in another state unless it has in rem or quasi in rem jurisdiction over the property. A court in State A cannot directly affect title to land in State B.
Key Term: In Rem Jurisdiction
The court's power to adjudicate rights in property located within its territorial boundaries.Key Term: Quasi In Rem Jurisdiction
The court's power to determine the rights of specific parties in property located within its boundaries, even if the dispute is not about title.
2. Full Faith and Credit Clause
The Full Faith and Credit Clause requires states to recognize and enforce the judgments of other states' courts. However, judgments affecting title to real property are only entitled to full faith and credit if the court rendering the judgment had jurisdiction over the property (i.e., the property was located in that state).
Key Term: Full Faith and Credit Clause
The constitutional requirement that each state recognize the public acts, records, and judicial proceedings of every other state, subject to jurisdictional limits.
Worked Example 1.3
A court in State A quiets title to land located in State B. The losing party refuses to relinquish possession in State B. Can the winner use the State A judgment to force transfer of title in State B?
Answer: No. State B is not required to recognize the State A judgment affecting land in State B, because State A lacked jurisdiction over the property. Only a State B court can issue a judgment directly affecting title to land in State B.
Exam Warning
On the MBE, if a court in one state issues a judgment affecting land in another state, the judgment is not binding on title to that land unless the court had in rem or quasi in rem jurisdiction. Do not assume that full faith and credit always applies to real property judgments.
Revision Tip
Remember: For MBE purposes, always start with the law of the situs for any real property dispute, unless a clear exception applies.
Key Point Checklist
This article has covered the following key knowledge points:
- The law of the situs governs most substantive issues in real property disputes.
- Exceptions include contractual choice of law (for contract interpretation), divorce property division, and federal preemption.
- Courts cannot issue judgments directly affecting title to land outside their state.
- The Full Faith and Credit Clause does not require recognition of judgments affecting out-of-state land unless the court had jurisdiction over the property.
- In rem and quasi in rem jurisdiction are required for judgments affecting real property.
Key Terms and Concepts
- Law of the Situs
- In Rem Jurisdiction
- Quasi In Rem Jurisdiction
- Full Faith and Credit Clause
