PROPERTY OUTLINE

1. Bundle of Rightsa. Right to possess or occupy (limitations: zoning, restrictive covenants, subdivision rules)b. Right to use as one sees fit (limitations: zoning, environmental regulations, can’t be a “nuisance”)c. Right to exclude (exceptions: fire, police, health, public accommodation legis)d. Right to alienate or transfer (limitations: lot-split ordinances, housing discrim statutes, estate and other

taxes)

ADVERSE POSSESSION 1. Concept

a. when prop is unowned, no one has incentive to protect it from exploitation b. people shouldn’t sleep on their rights – innocents may rely on appearance of unowned land.c. Pro-development – desire to privilege those who use their real estated. Efficiency – makes it easy to determine boundary disputes (on the other hand, could just look at title)

2. Title Immune to AP:a. Govt land (bureaucracy prevent govt from watching all their land)b. Torrens real estatec. Future interests – exception is if the future interest was created after the AP went into possession.

AP take the land as she finds it.d. Disability – if O is a minor, insane, imprisoned for less than life, or at war, the SOL is tolled. If

disability occurs after AP goes into possession, SOL is not tolled.3. Two requirements:

a. SOL must runb. Five elements

i. Actual possession – Look to nature of the land. This is what a reas owner would do w/ respect to this real estate (seasonal, geography). There can be constructive AP when there’s color of title and actual possession of a piece of it. (Monroe v. Rawlings)

ii. Open & notorious – form of constructive notice. iii. Exclusive : regarding the true owner. Courts may allow some use of land by third parties

(Nome 2000 – picking berries).iv. Hostile (4 possible approaches)

1. W/o the owner’s permission – no intent required.2. “Claim of right” meaning the AP must think she owns it “in good faith.” 3. Intentional wrong-doer. 4. Intent to claim as one’s own.

v. Continuous – Through SOL. Depends on nature of land. (Monroe v. Rawlings)1. Tacking – doesn’t matter if record owner changes, but if AP changes, the new AP

must be “in privity” w/ old AP, in order for their time to be “tacked” together. Privity is established by:

a. Will/ intestate succession, parent to childb. Intervivos – prop is transferred to 2nd AP (questionable if oral).

c. Test that can be used for all elements: did AP act toward the land as if he owned it?4. Defenses:

a. Going to court stops the running of the SOL.b. If the true owner grants AP permission to be there AND AP accepts it.c. Ejectment: person out of possession of real estate brings action against a person in possession,

claiming better right to title. 5. Offenses

a. Quiet title action: asks ct to declare that the person out of possession has no right to the land.b. Ouster: the wrongful dispossession of a rightful owner or tenant, forcing this party to bring a

lawsuit to regain possession.

Monroe v. Rawlings (84) “Wild land” case. MI hunters – ejectment v. quiet title action. Def bought tax deed (color of title) to whole area of land, and used a small piece of it (= constructive possession). Ct found that defs owned land – even though pl claimed defs never “improved land,” there was still actual possession: defs used land as a true owner would.

Nome 2000 v. Fagerstram (88) Hostility. Alaskan natives. O brings ejectment suit. Hostile here means only that AP occupied land owned by another w/o the owner’s permission – he acted toward the land as if he owned it.

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Joseph v. Whitcombe (hand-out) City island squatter. Ct holds that defs are trespassers. NY requires claim of right and defs knew house wasn’t theirs. Presumption of permission in sparsely populated state a presumption of AP in urban areas.

Mannillo v. Gorski (96) Def AP made additions over onto neighbor’s prop, but was not aware she was over the boundary – no intent. Hostility – no intent required. There is no presumption of notice w/ small encroachments – unfair to make O survey land that closely. So question here is whether there was actual knowledge. If not, defs are trespassers. If so, consideration should be paid for the conveyance of the tract to the encroacher.

Wright v. Wright (104) Father and son, tenants in common. Father dies and interest in prop goes to wife and other children. There can only be AP against a co-tenant if AP effects an ouster, retains exclusive possession after demand, or givces his cotenant express notice of AP (“bringing it home” or unequivocal hostile acts). Exclusive possession, payment of taxes or making improvements do not necessarily establish an ouster, but acts such as selling or leasing part of the premises do (even though other tenants may not know of the sale). Presumption exists that a cotenant in exclusive possession is not holding adversely to his cotenants, but for the common benefit. Co-tenants knew of hostile character of Aitchey’s possession here – AP wins.

TRANSFERRING PROPERTY1. Intervivos

a. Contract of sale – earnest money contractb. Deed – 30-60 days after earnest $ k, closing happens and a deed is transferred (must be in writing)c. Involuntary transfer:

i. If seller backs out before closing, ct can execute a deed or force the seller to write one.ii. Default on mtge, foreclosure sale.

iii. Condemnation/ eminent domain.iv. Jment lien – if lien is not paid, creditor can have an “execution sale” (sheriff sells realty).

Jment must be recorded in the county where land is located. v. Adverse possession.

2. Testamentary transfersa. Non-probate transfers

i. Concurrent estates1. Joint tenancy2. Tenancy by the entirety

ii. Payable on death bank acctsiii. Trusts

1. Settlor has legal title; trustee has equitable/ beneficial title.iv. Life insurance

b. Probate i. Wills

1. Law of state where real prop is located will govern validity of will re: realty; law of testator’s domicile at the time of death controls will’s disposition of personalty.

2. Revocation of Will a. Write a new one with a revocation clauseb. Physical destruction of will (dicey if other copies exist)c. Divorce or in some states, marriage revokes a pre-existing will

3. Forced share – in some states, a surviving spouse not in the will can elect to have a “forced share,” what they would have gotten if testator had died intestate.

ii. Intestate succession1. Heirs – someone who takes under intestate succession according to statute. Mostly

heirs get percentage interest in everything. State is ultimate heir is there are no others.

2. Consanguinity – same blood. Adoptees considered consanguine, not step-children.a. Lineal – descendants or ancestorsb. Collateral – siblings, aunts, cousins…

3. Affinity – related other than blood – in-laws.4. Per stirpes – a person who takes by representation ex. 2 children each get half of

the whole share left to their parent.5. Per capita – prop split equally.

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PRESENT ESTATES

1. Fee Simple Absolutea. To A = words of purchase: describe and identify the person(s) who take the estateb. And his heirs or “for life” = words of limitation: describe or limit the estate which is transferredc. Words of inheritance : describe the inheritable estate.

2. Fee Simple Defeasiblea. Subject to condition subsequent : estate becomes vulnerable to being terminated when event occurs.

i. Right of reentry/ power of termination – owner must enforce. O can sell this possibility.ii. Waiver – if O doesn’t try to enforce right of entry after a reas period of time, it can be waived.

A conversation by original owner approving new owner’s breaking condition can waive right, esp. if new owner relies on this statement.

iii. O has a right to rents from the time he tried to exercise his entry. b. Determinable estate : estate ends automatically upon the happening event, reverts back to grantor

i. Language used: “so long as,” “until,” “during the time that, and specifically providing for automatic termination upon the happening of the contingency and reverting in the grantor.

ii. Mesne profits – continued possession by former owner of a determinable fee after it has terminated gives the grantor a right to mesne profits (reasonable rental value of the land) for the period of wrongful possession. Owner of right of entry has no such right.

iii. CA Statute – FS determinable and possibilities of reverter are abolished. Estates that are FSD are deemed to be FS subject to a restriction in the form of a condition subsequent. Right of entry lasts for 30 years and then must be renewed.

c. Executory interest – future interest in a third partyd. Restrictive covenant : ambiguous words of condition creating a contractual obligation. Appropriate

remedy for breach is damages or injunction.3. Fee tail and predecessor fee simple conditional (little contemporary significance)

a. To A and the heirs of his body – grantor wanted land to come back to him/ successors if that line of descent ran out. Fee simple condition that A have heirs of the body. Bar the entail - English courts rebelled, and held that when A had an heir, he could alienate a fee simple.

i. Reversion in conveyor/ successors; remainder in a grantee other than the taker of the fee tailb. Most states render traditional fee tail obsolete

i. Most common approach: converts what would have been a fee tail into a fee simple in the first grantee name in the deed or will. Any remainder created to follow the fee tail is construed as an executory interest in fee simple to become possessory if the first taker dies w/o lineal descendants.

ii. Next most common approach: changes fee tail into a life estate in the first grantee named in the will or deed, with a remainder in FSA to the lineal descendants.

iii. Fee simple conditional4. Life Estate

a. For the life of the transferee by deed only. Right to use land, but not to exercise dominion over it. Owner must consider rights of future owners.

i. Sometimes To A for the life of another or pur autre vieii. Trust – separation of legal and equitable ownership. Trustee has legal title, assuming the

obligation to preserve and manage property, to distribute net income and ultimately pay over the trust as directed by the owner. Beneficiaries get equitable ownership.

5. Leasehold Estate (nonfreehold estates)a. Chattels real – they are regarded as personal, not real, property.

FUTURE ESTATES (Condemnation, transfer, waste…) 1. Grantor’s interest

a. Possibility of reverter : what’s left in a grantor after transferring a fee simple determinablei. Some states limit the life of the possibility of reverter or the power of termination.

ii. Other states disregard any condition which has become nominal and is of no substantial benefit to those who favor the condition.

iii. CA legislation (1982): FS determinables and possibilities of reverter are abolished and now deemed to be a FS subject to a condition subsequent w/ a power of termination in grantor.

b. Right of entry / power of termination: what’s left in grantor after transfer of a fee on condition subsequent

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i. Right of entry is exercised most commonly by bringing an action for recovery pf possession. Other ways are: the grantor may give notice to the grantee, or by physical entry on the land.

ii. Exercise of the right to re-enter for breach of condition may be barred by waiver, election, or estoppel. Waiver/ election are the same; they need not be express and neither is subject to the writing req of the State of Frauds. Some courts hold that mere failure of owner to exercise the right of entry w/i a reas time after learning of the breach will bar the grantor from subsequently exercising the right. The owner of the defeasible estate is more likely to avoid forfeiture if he can show a substantial change in position in justifiable reliance on the failure of the owner of the right of entry to exercise his right w/i a reas time after learning of the breach.

1. Defense of estoppel may be available to the former owner of a defeasible estate if he substantially changes his position in reliance on a representation, express or implied, by the owner of the possibility of reverter that he does not intend to assert his rights after the terminating event has occurred.

2. when a breach of condition or terminating event occurs, some states may allow the owner of the defeasible estate to obtain equitable relief against forfeiture – mainly after a breach of condition, not if a fee simple determinable has expired naturally.

c. Reversion – any future interest created in a grantor that is not A or B. i. Most commonly, when a grantor who holds FSA conveys to someone else a lesser estate such as

a fee tail, life estate or a fixed term lease. A grantor with less than FSA can also retain a reversion – i.e. a leaseholder who sublets.

2. Third party interest – fee simple subject to an “executory limitation”a. Executory interest - a future interest created in someone other than a grantor that is not a remainder

i. remainder take effect in possession at the expiration of the preceding estates, while exec interets take effect in possession by divesting (cutting off prematurely) the preceding estate.

1. a “springing” exec interest diverts a posssessory estate in the conveyor or his/her successors

2. a “shifting” exec interests diverts a future estates.b. Remainder

i. Four rules: 1. Must be created at the same time and by the same doc that creates the prior estate(s)2. Must follow a life estate 3. Must not have the capacity to cut short the prior estate(s)4. Must be no built-in time gap btw the termination of the prior estate and the remainders’

taking of possessionii. Vested remainder (any remainder that is not contingent)

1. Indefeasibly vested remainders – remainders which are certain to become possessory, and also certain not to be prematurely cut off or cut down in size.

2. Remainders vested subject to complete defeasancea. Condition precedent v. condition subsequent?

i. if the conditional language comes in a later clause than the lge creating the remainder itself, it is most likely a condition subsequent

ii. if the conditional lge come before lge creating remainder, it will likely be a condition precedent

iii. when there is doubt, the courts prefer a vested construction3. Remainders vested subject to open (or partial defeasance)

iii. Contingent remainder 1. the taker of the remainder is unascertainable2. the remainder is subject to an unfulfilled condition precedent3. alternative contingent remainders – express condition for both possible takers,

reversion remains in grantor.4. Destructibility of contingent remainders: a continent remainder must vest on or before

the termination of the previous estate, if it does not, it is destroyed.a. contingent remainder can also be destroyed by failure to vest before an

artificial termination of the preceding estate such as by forfeiture or by mergerb. merger of the life estate with the reversion could destroy both of the

contingent remainders. Exception: where all interests were created simultaneously, the vested estate did not merge so as to destroy the contingent remainder. p.265

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c. Exception: destructibility rule is not applied where the contingent remainder was in the form of a beneficial interest under a trust.

d. Destructibility is different from failure of a contingent remaindere. some states have abolished destructibility

Wood v. Board of County Commissioners of Fremont County - courts don’t want land tied upPls contend that lge in the deed created a FS determinable or FS subject to a condition subsequent with a right of

reversion in them if the land ceased to be used as a hospital. Ct reasoned that conditions tending to destroy estates like conditions subsequent are not favored by law. Lge here is ambiguous and does not clearly state an intent of the grantors to retain a discretionary power to reenter the land if the land ceased to be used for the state purpose. Policy reason: deed was written 40 years ago, there was reasonable compliance with the condition, but now the land should be free.

In Re .88 Acres of Property Land donated to town on condition that it be used for a meeting house. The town had used the property for 70

years in an adverse manner. However, a public statute said that the recovery of lands must be commenced w/i 15 years of the cause of action accruing, except for lands given to a public use. Policy rule: the intention behind this rule was to not allow publicly-owned lands to go into private hands through AP. It should not prevent towns from adversely possessing property. Court held that the statute referred to the use made of the property by the legal owner, not the trespasser, so after the property reverted to the heirs, the property was no longer given to a public purpose by its legal owners. Tricky!!

3. Direct Restraints on Alienationa. Direct restraints are usually void

i. Disabling restraint – voidii. Forefeiture restraint FS determinable or subject to condition subseq: if A attempts to transfer

w/o O’s consent, A forfeits title. If limited in time or scope can sometimes be upheld. Forfeiture and promissory restraints on alienation of leasehold interests is valid.

iii. Promissory restraint – grantor seeks to create a contractual promise by grantee not to convey an interest. Void when not limited in time or scope.

b. Multiple ownersi. Action in partition physically breaks up land or forces sale.

ii. Cts rarely order a partition sale of future interest land.

4. Protection of Future Interestsa. Law of waste – restricts a possessor in her use if her possessory estate is limited. The holder of the future

estate may protect its value by limiting the diminution in value which the current owner may cause.i. Waste : unreasonable use of property by current owner which reduces value of a future estate

ii. voluntary waste : intentional acts which will decrease the value of the future estateiii. permissive waste : failure to act when law imposes duty to. Permitting the property to decrease

in value for want of those day-to-day repairs a reasonable person would make in maintenance.iv. Owner of a defeasible fee estate is chargeable for waste only if her conduct is unconscionable or

if a reasonable probability exists that the future interest will become a present ownerv. Remedy: damages, injunction and rarely, forfeiture of estate

Brokaw v. Fairchild (p.289) Law of waste. Pl has a life estate in a fancy house on 5th avenue. Pl wants to tear down house and build a building with apartments. Defendants/ remaindermen assert that the proposed demolition is waste because it would impair the value of the adjoining properties, and the building itself. Original owner clearly left plaintiff not just a plot with improvements on it, but also his residence.

The demolition would be an exercise of ownership and dominion. It would change the inheritance so that it could not be delivered to the remaindermen. Even though the apartment building could be more profitable to the remaindermen, they have a right to object. Demolition would be an act of waste. Plaintiff claims that the house had become valueless for the purpose of a residence property since it was isolated and surrounded by factories and railroads. Court found that this was a valid argument, but that the house was not isolated and that it was desirable as a residence.

Baker v. Weedon (p.296) Unproductive property. Owner to Anna for life, then to Anna’s issue, if any and if none, then to my grandchildren from 1st marriage. Feds pay 20 k to build a highway on land, money split btw present owner (Anna) and future interest owners (grandchildren since Anna had no issue). Anna wants to sell land but grandchildren do not.

Ct says: courts of equity have discretion to order partition. However, ct holds that some of the land should be sold and the interest off that money can be used to support Anna. Sale of all of the prop would impinge on the vested rights of the remaindermen. In what kind of case would the court order partition, accelerating the future interest? When the land is

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not producing enough income to pay taxes and maintain the prop. A second consideration is whether a sale is “necessary for the best interest of all the parties.”

Beach v. Beach (hand-out) No partition of non-concurrent interests 19 acres in rural CO; log home owned by daughter. Parents built an addition on the house in accordance with an oral agreement allowing parents to live there until death. To Mom for life, remainder to daughter. Mom then tries to sell her interest. A state statute says: actions for partition of private property may be maintained by any person having an interest in such prop.

Ct reasons: statute only authorizes partition of present, not future interests – Non-concurrent interests are not partitionable. The practical result of allowing partition where physical division is impossible due to a lack of concurrent interests, is that one party can force the other to liquidate her property interests. As a result, a party’s right to enjoy her interest is destroyed and her only remedy for the lost interest is an inadequate dollar amount. Ct holds: It might be easier to sell the land because no one would buy it seeing that the daughter owns the surrounding prop, so daughter could just buy it. However, the court decides not to get involved, lets them work it out themselves.

Some courts will order a sale of non-concurrent interests if statute authorizes it using present and future values.

CONCURRENT ESTATES 1. Marital estates

a. Curtesy (common-law): Life estate in surviving husband. Must have had issue by H born alive. All lands of which W was seized at any time during marriage (unless released). H must elect between W’s will and curtesy only if will intends such election.

b. Dower (common-law): Life estate in surviving wife. 1/3 of lands of which H was seized at any time during marriage (unless released). “Inchoate dower” until “assigned” by court after H’s death.

c. Election against will (modern statute): Fee simple in survivor of real and personal property owned at death or conveyed by gift in fraud of marital rights. 1/2 of estate or 1/3 if there are lineal descendants of decedent. Survivor must forgo all benefits under decedent’s will in order to claim.

d. Augmentation of estate – causing all property (both real and personal) to be put together, and then spouse takes share of that. Can work for or against spouse.

e. Fraud on marital rights – gifts w/o both H + W’s signatures, not transactions at fair market value. 2. Joint tenancy : To A and B, not as tenants in common, but as joint tenants with right of survivorship.

a. Four unities : (Formalistic approach, not intent) unities of time, title, interest and possession. Interests of joint tenants must arise at the same time and by the same instrument. They must acquire identical interests and share a common right of possession and enjoyment. Lack of any of these unities results in a T/C.

b. Severance – if one joint tenant conveys his interest to a 3rd party, the latter acquires an interest as tenant in common w/ the remaining joint tenant(s), who if more than one, continue as J/T. The right of survivorship is destroyed btw the old tenant(s) and the new. The interest of any joint tenant is freely alienable inter vivos.

c. Undivided right to possession can be partitioned either voluntary or any joint tenant or tenant in common has a right to partition when he can enforce by judicial proceeding – leading to a partition in kind or partition of the proceeds.

d. Partition in kind or by sale – court may deny partition when inequitable. Moreover, the transferor of land in J/T may use language restraining partition. If a reasonable restraint, courts will uphold. i.e. condominium.

3. Tenancy by the entirety : To H + W. Or to H + W as tenants by the entirety.a. a concurrent estate that can only exist btw husband and wife. Similar to J/T with 4 unities and right

of survivorship. Different from J/T in that it is not severable. Each person has an undivided 1/2 interest.

b. Prop can only be transferred with consent of both H + W.c. Divorce – estate converted into either a J/T or a T/C

4. Tenancy in common : To A and B. a. No right of survivorship and only unity of possession is required. A tenant in common is the owner

of an undivided fractional part of the whole – every tenant has right to possess entirety of land. Most states have a preference for a tenancy in common unless the intention of the grantor to create a J/T and not a tenancy in common is clearly expressed. “To A and B” creates a T/C.

Crowther v. Mower (p.318) Recording the deed = needed for severance? Decedent’s husband v. decedent’s son. Nellie sent a quit claim deed to son for 1/2 interest & told him to record deed after she died. Pl husband claims transfer is invalid because son didn’t record it till after death.

Ct. says: you don’t need to record a severance for it to be valid. Most people do record land transfers in order to protect it from 3rd parties. Nellie tried to have it both ways. She didn’t want son to record the deed because if husband

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died first, she wanted to keep J/T so that she would get his land. If she died first, then she can claim that J/T was severed when she transferred the land to her son and since the right of survivorship is destroyed, her son gets the land.

CA statute: Severance by deed or written instrument occurs bya) delivering a deed/ conveying landb) duly acknowledged/ notorized written instrumentc) you can record up to 7 days after death when a person is dying, if the act of severance

takes place not earlier than 3 days before deathBoth have to be recorded in CA, but you don’t have to let the other party know. However, of course the other party will know since you have to record it before death. This prevents parties from having it both ways a la Crowther v. Mower.

Patience v. CA (told to us in class) Joint tenant becomes terminally ill and delivers a deed about 2 weeks before he dies. However, the deed is taken to the Recorder’s office and stamped an hour after the joint tenant actually dies. Court holds that J/T was not severed.

Phillips v. Nyhus (p.322) Does the act of entering into a contract to sell J/T property sever the J/T? No. Business partners acquire land as J/T and then enter into an earnest money contract to sell the land. Contract was signed by sellers and purchaser. Before closing the deal, Phillips dies.

Formalistic approach: no violation of unity of interest – interests of both joint tenants changed in the same wayIntent approach: What were the instructions before closing? Write a check to each of us? Or write a check to us

for the total which we are going to deposit in a J/T bank account.Ct finds no severance. No evidence on the record indicating that they intended to sever the J/T.

Albro v. Allen (p.326) Non-severable joint tenancy. 2 kinds of J/T – one characterized by four unities: interest, title, time and possession. Each joint tenant shares in

possession of the entire estate and is entitled to an undivided share of the whole. Right of survivorship may be destroyed by severance – either by conveyance by either party, or by levy and sale. Remaining joint tenant and the grantee become tenants in common.

2nd J/T is the “to A + B for their lives, remainder to survivor” = non-severable J/T in some states, similar to tenancy by the entirety but alienable on one party’s decision. A co-tenant can transfer his interest in the J/T, he won’t destroy the cotenant’s contingent remainder, however, upon the death of either of the orig. cotenants, the other cotenant, or the person to whom she has transferred her contingent remainder, takes the whole estate.

Porter v. Porter (p.331) Whether the J/T with the right of survivorship was destroyed by a divorce. Not necessarily – interest is not tied to marriage. Divorce automatically severs a tenancy in the entirety.

The mere temporary division of property held by joint tenants without an intention to partition will not destroy the unity of possession and amount to a severance of the joint tenancy. Majority rule: no presumption of severance on divorce. Minority: presumption of severance when divorce decree contemplates a permanent dissolution.

Brant v. Hargrove (p.336) Can a mortgage severe J/T? Not where both parties sign – parties have no intention to give away property. If a unilateral action, severance occurs at the foreclosure sale.

“Lien theory” – unity of interest not violated. Can be a double-edged sword for the lender if the mortgaging joint tenant is the first to die – interest all goes to other joint tenant. But pro-lender result if non-borrower dies – interest all goes to borrower and lender s have a lien on the whole thing.

“Title theory” – lenders have a legal title (title and right to immediate possession) and unity of interest is broken. Borrower then only has equitable title, although non-borrowing joint tenant still retains legal and equitable title.

Non-formalistic intent approach: did party intend to sell the property?

Esteves v Esteves (p. 355) One family house owned by tenancy in common btw parents and son. Son moved out and then tried to collect rent. Court found that there was no ouster, and therefore, no entitlement to rent.

1. Accounting - on a sale of commonly owned property, owner who has paid less than his pro-rate ashare of operation and maintenance expenses must pay out his share. (doesn’t matter if one is out-tenant and the other an in-tenant)

2. Contribution –all tenants in common have right to occupy all of the prop. If one chooses not to do so, he doesn’t have the right to charge rent to the others. You can get contribution for 1/2 of taxes or mtge.

3. Partition – on a final accounting following sale, tenant who has been in sole possession who demands contribution towards operating and maintenance costs, must then allow a corresponding credit for the value of his sole occupancy of the premises. One who seeks equity must do equity.

Carr v. Deking (p. 358) Son and father own farm as tenants in common. Father enters into a lease with George – 1/3 of crops paid as rent. Son protests, wants cash rent. When one co-tenant signs al ease, does it bind the other tenant? Court

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finds that co-tenant can’t eject leasee but can opt in to the lease OR he can seek partition. If the non-signing tenant received any benefits from the lease – he consented.

Massey v. Prothero (p. 363) Siblings inherited land in probate. One sibling failed to pay prop taxes, Leiws bought the prop at a tax sale. Other sibling tries to reinstate interest by paying part of the taxes. Court holds that Lewis was acting as siblings’ agent when he bought the land. They’re blood relatives who received their interest from the same intrument.

If a 3rd party had bought the land, the co-tenancy ceases to exist.

Delfino v. Vealencis (p.368) 3 co-tenants, 1 want partition in kind. 2 brothers wants partition by sale, they think sister’s garbage biz on land depresses sale value of adjoining prop. Ct: partition by sale is inappropriate – person opposing partition by sale is stronger: there’s a (rural) presumption in favor of partition in kind. Before ordering partition by sale, it has to be in the “best interest of the parties” and if physical attributes of land make it impractical or inequitable to split it up.

Coraccio v. Lowell (p.374) H + W own a home as tenants by the entirety. W/o W’s knowledge or consent, H mortgages the house. W brings an action against H and bank to have the loan declared a nullity. If we were in a pure tenants by entirety juris, nothing happened. Court in MA holds that there is a valid mtge although unilateral. However, H can only convey his interest which is only the right of survivorship, not the right of possession. If H dies before W, bank gets 0.

Lakatos v. Estate of Billotti (p. 378) One should not profit from one’s wrong. Uniform Probate Code: when A kills joint tenant, s/he severs the estate. Presumption that killer pre-deceases victim and all prop passes through victim’s estate.

SEPARATE PROPERTY (v. community property)ii. prop owned before marriage

iii. prop received as a gift, during marriage (will, intestate succession)iv. income/ rents from separate prop

Presumption that prop acquired during marriage is community (i.e income). Presumption in general towards community property. “Commingling” = when separate and community prop are intermingled. “Transmutation” = spouses’ conversion of separate into community property or vice versa (either by contractual agreement or gift).

1. Wills: in community prop states, surviving spouse has no right to elect against the will, no forced share2. Intestate succession: surviving wife gets all of community property and an intestate share of other prop3. Divorce: 1/2 and 1/2 on community prop, separate goes with owning spouse. Court s will often look at all the

prop to make an equitable division – carte blanche. 4. Control during marriage: joint control over community prop/ indu control over separate prop. With

community-owned personal prop either spouse can deal w/ 3rd parties and bind the other spouse5. Rights of creditors: in a common law state with no community prop, a creditor can only collect in the owing

spouse’s name. In a community prop state, if debt is created for a family purpose, creditor can reach spouse’s separate and all of the comm. prop. If it’s not a comm. purpose, creditor can only reach 1/2 community prop and separate prop.

LANDLORD AND TENANT

1. Modern lease: entails paying rent on an installment basis. Ldld has right to rents and reversion. Tenant has a rental obligation and a right to possess.

a. Types: i. Estate for years / fixed-term tenancy – terminates by expiration, surrender, release

(conveyance by ldld to tenant of ldld’s interest), or by condemnation.ii. Periodic tenancy –indefinite period/ must be terminated in writing.

iii. Tenancy at will – created by agreement btw parties, lasts as long as agreement does. No formal notice of term required.

iv. Tenancy at sufferance – created by one entering into possession rightfully and retaining possession wrongfully until ldld demands possession or elects to have a dift tenancy. This kind of tenancy prevents AP unless ldld elects to treat T as a trespasser.

b. Identifie d byi. Intention expressed by parties regarding duration/ terminability of tenancy

ii. Agreement by parties concerning periodic payment of rentiii. Acts of parties such as tenant’s taking possession of land w/ consent of owner.iv. Reqs?

- Rent is not required – leasehold need not be supported by consideration, it lies in grant. But unless expressly indicated, cts will find an implied obligation.

- Leasehold arises not on execution of lease, but on taking of possession.

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c. L&T Duties i. I.W.O.H. – residential leases (Hilder)

ii. Implied covenant of quiet enjoyment – Majority rule: implied in every lease. - Ldld will not personally or by agent wrongfully interfere w/ tenant’s possession- No 3rd person w/ a better right of possession than T will disturb T’s possession.- Duty “to give” possession/ have premises open for possession at start of term- Violated by: partial actual eviction or constructive eviction ( in later case, T must

leave premise immediately to claim benefit) (Barash)- Minority rule : requires that ldld deliver only the legal title to possession. Going to

ct to eject a holdover is new tenant’s responsibility.iii. No implied covenant to operate - tenant has no duty to occupy the premises nor use them

for any particular activity unless expressly stated (Woolworth)iv. No implied covenant that premises are suitable for their intended purposes (Service Oil)v. Implied duty to repair? Limited for T: “wind + water – tight” (Hadrian). T has duty not to

commit or permit waste. 2. Remedies for breach of duties

a. Cts are often unwilling to excuse perf of tenant’s duties when there is a breach of ldld’s duty = doctrine of independent covenants

b. Damages i. Diff btw contract rent and fair value of premises

ii. Diff btw value of premises if they had been as warranted and the actual value of premisesiii. Percentage reduction in rent

c. Termination d. Rent withholding e. Repair and deduct

3. Residential lease: tenants cannot waive their rights. Rent= monthly payments.4. Commercial lease: whatever parties agree to, cts will enforce. Rent= percentage of revenues and fixed rent.

a. “Triple net lease” – where ldld has no obligations except the right to collect the rent. T may agree to repair or replace both structural and non-structural elements of the premises, pay taxes and ins.

i. Lge must be specific. If ambiguous, cts look to length of lease, amount of rent, intent of parties… (Hadrian v., Schwartz)

b. “ground lease” – person who wants to build on it leases itc. Tenant fixtures : chattlel affixed to the real estate in a perm way becomes part of it. In a silent lease,

L gets to keep improvements/ structures that T builds except for “trade fixtures.” T can remove these as long as he doesn’t damage structure/ or repairs.

5. Security Depositsa. Sec deposits cover damages to premises and back rent.

i. Accting for the deposit : Ldld forfeits sec dep if he doesn’t provide in writing an acting for the deposit w/i 30 days after vacation (Garcia v. Thong).

ii. Penalty – if ldld wrongfully withholds sec dep he may be liable for 2x amt.b. Tenant has right to impose ordinary wear-and-tear.c. CA: at most 2 months rent and 1st month rent.d. Interest : most states requires interest paid on sec dep.e. Inspection : T has rt to walk thru premises w/ ldld no earlier than 2 wks before end of leasef. Transfer : L1 and L2 are jointly and severally liable on residential sec deposits. If commercial lease,

deposit does not touch and concern the land unless L uses it.6. Transfer - Both ldld’s and tenant’s interests are alienable.

a. Assignments i. Transfer of the entire remaining time of the term.

ii. Normally assignee makes payments to ldld and bonus value payments to tenant. “Bonus value” – when right to possess exceeds the rental obligation.

iii. Privity : Assignee is in privity of estate w/ ldld but not privity of contract (Tenant remains in privity of k w/ ldld). Assignee is liable for and gets benefit of the vast majority of lease provisions, but tenant remains liable for all lease promises. Ldld has 2 deep pockets to turn to – jointly and severally liable.

iv. Landlord’s options - Majority: Lessor may arbitrarily refuse to approve proposed assignee/ sublessee,

including to recapture bonus value as long as no-transfer provisions in lease are suitably specific.

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a. Strong minority rule: commercially reas objections to assignment are required (Kendall v. Pestana): financial solvency of assignee, suitability of the use of prop, nature of the occupancy.

- Reliability – ldld can assess reliability of assigneeb. Sublettings

i. Privity - subleasee has no privity w/ ldld in this case.ii. Req to create a subletting:

- Reversion before lease ends (ACS – just 2 days before lease ended)- Minority position includes: right of entry retained

c. Running Covenants – because assignee comes into privity of estate w/ ldld, she become liable to perform covenants of lease that “run with the land.” Original tenant’s continuing obligations under privity of contract are secondary. If assignee defaults in performing a running covenant, the ldld can compel original tenant to perform but tenant then has a cause of action for reimburs from assignee.

i. Personal promises – do not run w/ lease unless T2 agrees to assume all the provisions of the master least (“assumption”).

ii. Touch and Concern – promises that touch and concern lease run with it- If promise made either ldld or t’s interest more valuable- If promise is “intimately bound up w/ the lease”- If the avg reas assignee believes that he was bound by the promise (best test)

d. Forfeiture restraint – this is valid on a leasehold if for a short period of time. 7. Termination

a. Required elements:i. Writing – must be written notice

ii. Specifically directed to tenant or ldldiii. Signed by person giving noticeiv. Clear evidence of intentv. Effective date must be specified (at least 30 days notice)

vi. End of the rental period vii. Must be received by party outside of the notice period (Davidson v. Kenny)

b. If tenant holds over landlord cani. Treat him as a trespasser

ii. Raise rentiii. Do nothing – new periodic tenancy is then created

c. Abandonment and surrender – ldld can…i. Accept abandonment as surrender – everyone is off the hook. No damages.

- Minority: L re-entering premises after offer of surrender = acceptance of offer, unless L indicates in writing that he is re-entering for T’s benefit and holding tenant to the lease.

ii. Keep lease in effect – hold tenant to it and sue for accrued rent. Ldld assumes no duty to mitigate and premises belong to T. Ldld must be careful not to look like he’s accepting offer of surrender.

- Put into a lease an acceleration clause reduced to present value- Anticipatory repudiation : by leaving premises and not paying rent, T is signaling

that is never going to perform. Result is same as accel clause.iii. Opt to mitigate – T is liable for damages, but lease is no longer in effect. Ldld bears burden

as to whether he made a reas attempt to mitigate. Some juris impose duty to mitigate. Penalty for not mitigating when there’s a duty to:

- Subtract from k rent what a reas attempt to mitigate would have yielded- Or can’t recover from T at all.

d. Vacating tenan t: cts focus on pre-vacation period (damages calculation) or post-vacation period (in this case, cts only award bonus value and add-on’s)

e. Tenant stops paying rent/ unlawful detainer action : ldld if there has not been a violation of iwoh, then jment of eviction. If there IS a violation of iwoh, ct will give tenant reas time to make up arrearages and order ldld to make repairs or ct will not make tenant pay rent until ldld makes repairs or ct will collect rent until place is up to code.

Receivorship statute – tenants get together and file a civil action. If ldld doesn’t make repairs, ct will appoint a 3rd party to take over management.

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Friend v. Gem (p. 397) Lease (right to possess) v. license/ easement (right to use). Def was discount chain (as a licensor or ldld?) and entered into an arrangment with smaller retailer (lesser? Licensee?) EE of pl slips on puddle and falls. If Def was a licensor, std of care is lower. If it’s a lease, ldld owes a negligent std of care. What cuts against this being a lease?

no fixed space space is moveable at def’s request def’s EEs go into pl’s space to check the cash register (larger biz has some control over their premises) contract says “license”

Ct says this only evinces intent, but doesn’t bar it from being a lease. Purpose of agreement here was to grant pl dominion over a definite space not to render a service but to sell its own merchandise.

David Properties v. Selk (p.407) Ct. concludes that mo-to-mo tenancy was created. Silence was deemed acceptance of ldld’s offer. Old man was a periodic tenant because after end of lease, he did not respond to ldld’s letter establishing rent. Ldld had multiple options when pl continued to live on prop after termi of lease:

1. treated pl as a trespasser and sued for damages (reas rental value and “special” damages) or maintained an action for immediate possession.

2. waived the wrong and treated pl as a tenant, demanding increased rent

Adrian v. Rabinowitz (p.415) Majority: implied covenant of quiet enjoyment is deemed to be in every lease and ldld must deliver actual physical possession, not just right to possess. Ldld has access to information about out-standing tenant and is in a better position to prevent that tenant from holding over.

1. Ldld has obligation to deliver possession 2. once delivered, ldld has an obligation not to interfere w/ tenant’s possession and to make sure that no third

person who has a better right to possession than the tenant will disturb his possession

Mercury Investment v. Woolworth (p. 421) Big commercial tenant – drafted the lease, holds the bargaining power. Whether a tenant in a retail lease must operate the premises or can they just pay rent and leave the place vacant. Implied covenant to operate? Nope, in the absence of a contractual duty to operate, T doesn’t have that duty, nor the duty to use the premises for a particular activity.

Damages would be too speculative. Ldld won’t know the kind of traffic the anchor tenant would have drawn. Express covenants to operate are rare. If there was, some cts would grant injunctive relief on the theory that damages are incalculable and supervision would be difficult. In this case, the store could purchase injunction from ldld.

Service Oil v. White (p. 429) Suitability covenant. Seller knew about ordinance requiring gas pumps to be 10 ft off the street. In a commercial lease, whether there is an implied covenant that the premises are suitable for their intended purpose – usually NO. T usually takes full risk as to fitness of the premises – no implied warranty of suitability. Caveat emptor.

Ct holds that there was fraud/ concealment here, so tenant wins anyway. Failure to disclose alone does not make fraud – the condition must also not readily be able to be discovered. Tenant could’ve gotten out of lease, but he stayed in and def paid damages ($ to move pumps and maybe punitives).

Hadian v. Schwartz (p. 438) Covanent for Repairs. Attempt by ldld to transfer incidents of ownership to tenant for term of lease (net lease) – earthquake retrofitting. In a commercial lease, is there an implied duty on the part of the ldld to make repairs? Reas wear and tear is accepted. Tenant has no duty to repair but also can’t act wrongfully to create voluntary waste or permissive waste. “wind + water – tight” = tenant’s limited duty of repair. Act of God? Tenant is still on the hook for the lease, even though bldg is gone (unless you were on an upper floor, for example, or lease clause releases you). In this case, lease would have had to say “tenant liable for retrofitting, regardless of cost” in order to make this an actual net lease. Ct looked at intent of parties:

1. do repairs exceed the total value of the lease?2. length of lease – only 3 yrs total3. relationship of benefit to lessee v. reversion4. structural or non-structural5. does T have to cease operations during repairs6. did parties contemplate this situation = intent

Barash v. PA Terminal (p. 447) Implied covenant of quiet enjoyment. Tenant’s obligation to pay rent is dependent on ldld’s compliance with ICQE. Ldld’s can protect themselves against independent covenant by using specific lge: ldld can terminate contract/ lease whenever tenant breaches any of lease’s provisions (contract law). Partial actual eviction violates the implied covenant. Tenant can 1) terminate lease and sue for damages or 2) stay in premises and stop paying all rent until partial actual eviction ends. “Constructive eviction” – tenant must leave premises promptly in order to claim this.

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In Barash, high-rise in NY, ldld turns off a/c at night. Absence of fresh air a violation of the implied covenant? Ct holds that this is constructive eviction, but tenant didn’t leave promptly. If there was an express clause to provide fresh air, this promise is independent from the obligation to pay rent.

Hilder v. St. Peter (453) Implied warranty of habitability. Hilder moves in, nothing works. She didn’t leave so there’s no constructive eviction. 14 months later, she left. Ct held that the state of disrepair reduced the value of the leasehold and thus constituted a breach of the implied warrant of habitability, awarding damages- reimbursement of all rent paid.

Jack Spring (462) When can you assert a violation of the i.w.o.h Every state has summary proceedings (to get rid of a tenant in unlawful detainer) to avoid self-help repossession by ldlds.

Garcia v. Thong (480) Security Deposit. Pl sues def for damages but never sends the required letter to pl explaining why he’s not getting his sec deposit back. Ct: Owner forfeits rights to hold deposit if he fails to send written notice – he also forfeits the right to assert an independent action against tenant.

ACS (521) Long-term grocery store lease; ldld is a trust. ACS has labor difficulties and is going out of business. ACS assigns lease to a grocery-wholesaler and then asks consent of ldld. Ldld won’t consent, so ACS drops assignment and subleases to wholesaler. Subleasing was probably allowed under the lease in case grocery wanted to incorporate a small biz (Starbucks). Maybe ct should have been less formalistic, and looked to intent.

Kendall v. Pestana Ct won’t let ldld deny consent to assign due to bonus value. Ct reads in “which consent should not be unreasonably withheld” – minority approach.

Abbott v. Bob’s U-Drive (593) Ldld suspects that Pl is avoiding rent by renting cars to public owned by Continental. Ct: there is an implied meaning that any burden that “touches and concerns” the lease will transfer to Continental. Since the dispute is about rent, it definitely touches and concerns the lease.

Chesapeake – Bldg burns down. Chesapeake agreed to maintain the casualty ins, but hadn’t so L sues them. Ct held that promise did not touch and concern the land because it was for L’s personal benefit.

Textile Factory example - T5 failed to pay rent and is broke so L sues T4 for rent. Once T4 transfers and assigns, all he’s liable for is the rent that accrued on his watch. If T4 has “assumed” he would have acquired privity of contract (liable for every promise in the lease). Assumption goes backward and forward – liable for whole term of lease.

Gerber v. Pecht (605) Original T assigns to T2 who assigns to T3. T3 “assumes”/ agrees to be bound by all the terms of the lease. Ct holds T liable for T3’s failure to pay rent. T2 is only liable for rent that occurred on his watch – no privity of contract w/ ldld.

Davidson v. Kenny (540) Termination. Pl owns small bldg and finds out def (mo-to-mo T) is trashing the place. Def sends notice that lease will end on Sept 30, but letter doesn’t arrive until Sept 6. Def doesn’t vacate until December. Ct says lease never terminated. Notice is construed strictly against L because of potential for double damages (if T holds over, he becomes a trespasser). Minority rule: late letter becomes effective for the next month/ period automatically.

Sommer v. Kridel (571) Duty to mitigate – majority rule in residential laws, about half states apply this to commercial leases.

EASEMENTS Non-possessory interest in real estate. They give rights of “use” and run with the land.

1. Basics a. Easement in Gross : when no land can be identified that the easement benefits, serves the holder

personally. Ex. Oil pipelines.i. Commercial ones are transferable but personal ones are not (ex. Fishing rights).

b. Profits : right to remove substance from land (minerals, timber) – usu accompanied by easement rts.c. Appurtenant – easements are usu. moored to an estate but it doesn’t have to abut the easement.d. Duration – “easement for years” (fixed period) or “easement for life” or “perpetual easement”

2. Creation – expressly created, must be in writinga. Deed : “together w/ an easement for roadway purposes over adjoining land.b. Reservation : “reserving, however, an easement for roadway purposes over adjoining land.”

i. Cts are suspicious of this, esp impt to spell out easement rights in this case

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ii. Servient easement must be sufficiently described (Berg v. Ting)c. Created by implication

i. Implied by “prior use” = quasi-easement. It requires:1. Ld had to have been initially in common ownership2. Quasi-easement must have existed prior to split3. Had to be apparent before the split (did parties intend it?) (Campbell)4. Must be “reasonably necessary” 5. Some courts also require that it be continuous/ intended to be permanent

d. Implied by necessity i. Requirements:

1. Unity of title2. That dominant estate has been severed from serviant tract3. Reas necessity must have exist at the time of severance (basis o which to infer

intent to preserve access)4. Only lasts as long as the necessity lasts5. Strict necessity (land-locked) v. reas necessity (make “effective use”)6. Public policy

a. Pro-developmentb. Pro-conservation or if easement is granted, party should pay

e. Created by prescription or adverse use i. Requirements:

1. Hostile/ non-permissive use – O’s protest strengthens AP’s claim2. Open and notorious 3. Continuous (depends on nature of easement)

a. Interrupted by i. lack of privity btw APs

ii. permission offered and acceptediii. Filing suitiv. Putting a fence across easement (unless torn down)

4. NOT relevant: exclusivity, color of titleii. “Pre-scription” – lost grant theory means there’s an assumption that there was once an

easement grant/ pre-existing writing if there is an easementiii. Presumption : w/ rural land that is not fenced in, usage by 3rd parties is presumed to be

permissive. (Hester v.Sawyer) If urban land, usage is presumed to be adverse.f. Scope of Easements

i. Surcharge – when holder’s use of easement exceeds the terms of the orig grant and interferes unreas with the owner’s rightful use of his land.

ii. Violation of purpose of the easement1. Look first to language of easement, then to circumstances surrounding the

conveyance, including parties’ conduct both prior and subseq to grantiii. Quantity – overall burden cannot be increased.

1. “No glom-on rule” – the extension of an easement to additional land is misuse (Brown v. Voss).

2. Exclusivity - Non-exclusive easements can only be divided by landowner. RR easement are exclusive usually (power of eminent domain). May write express terms allowing holder to expand burden for an extra fee.

iv. “Rule of reason” –when there’s ambiguity in the lge, parties foresee reas evolutionary change both in the use of the dominant estate and in technology). (Cameron v. Barton)

1. Prescriptive use can be expanded both physically and technologically if reasonable and moderate (Glenn v. Poole).

v. Moved – easements can’t be moved either by owner of servient or dominant estate. Minority rule is Lewis v. Young = owner of servient estate may move under certain conditions.

3. Termination a. Deed of release – must be writtenb. Quitclaim deed to the owner of the servient parcel – conveys all interest back to ownerc. Merger – when single owner takes title of both dominant and servient parcels, easement disappearsd. Mortgage foreclosure – wipes out all claims, including easements, to deliver title clean to new Pe. Condemnation – destroys easements by wiping slate clean, but easement holder gets a share of the

valuation award. Two methods of valuation:

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i. Reduction in value of dominant parcel w/o easementii. Increase in value of servient parcel w/o easement

f. Tax sale – wipes out all claims, unless dominant owner has paid taxes on her easement, then it’s exempt from tax sale

g. Implied by necessity and necessary condition endsh. Easement for years – contains its own termination pointi. Abandonment - if you abandon the use of a permanent easement, the servient owner gets it.

i. Oral abandonment + non-use does NOT show intent to abandon but physical blockage of easement (putting up barrier) DOES show intent to abandon

ii. Estoppel – if servient owner acts in detrimental reliance on abandonmentiii. AP SOL – after this has run, ct will say easement has been destroyed by prescription.

4. Statute of Frauds : To lower the bar of the Statute of Frauds and prove an easementa. Estoppel reliance theory of part performance – if beneficiary of that servitude, in justifiable reliance

on its existence, has so changed position that injustice can only be avoided by recognizing servitude.b. Evidentiary theory of part performance – requires payment, possession, and improvement. (Berg v.

Ting)5. Licenses – privilege (not right) to use land.

a. Revocable at any timeb. Not transferable c. No specific location (~floating easements)d. Can be made orally

Milbrook (717) License or easement? O conveys something to Hunt: a 75 year lease to a small piece of land and the right to hunt foxes on the rest of the land. O then sells to Smith, who wants a nature preserve. Tiebreaker for the court: lease was for 75 years, and typically, licenses are not limited to a definite period. Other factors that make an easement:

1. substantial consideration paid2. usually moored to a lease, “appurtenant” to the estate. 3. holder is allowed to make improvements/ repairs or to exercise control

Ricebaugh v. Krause License turned easement. Neighbor asks to install pipes to drain land. 50 yrs later ct holds that it is a perpetual easement or “irrevocable easement.” By installing/ maintaining pipes in reliance on this license, it was transformed into an easement. Ct could have also called it estoppel to revoke a license – but at some point this would end, like when the pipes wear out, you can’t replace them.

Berg v. Ting (730) Driveway easement over def’s land (floating easement). They bought w/o knowing this – title co screwed up and didn’t communicate the easement. Ct says the easement violates the Statute of Fraud because there’s no accurate description of where easement goes. A floating easement renders title unmarketable although you can negotiate to pin it down ex-post.

Evidentiary part performance theory – if party who wants to enforce k can show sufficient part performance, bar of Statute of Fraud goes away and they are allowed to prove that k existed (1. payment 2. possession 3. improvement). In this case, all these have is payment/ consideration so court says: no easement exists.

Campbell (739) Common owner of motel and restaurant sells them separately. After motel takes title he discovers that his septic tank is serving the restaurant. Probably reas to restaurant’s enjoyment. Is it apparent? There was no actual notice, but could have been constructive notice (although ct decides no). One is on constructive notice if its in the grant or a reas inspection of premises would yield notice. Apparent at the time of the split or at the time of the intervening BFP?

Otero v. Pacheco (743) Def builds two homes and conveys one away. Sewage begins to back up in new home and they realize that def’s sewage line connects to theirs. Ct finds an implied reservation. There was constructive notice because a reas inspection would’ve disclosed this fact.

Hurlocker v. Medina (747) By necessity. Original developer divides land, but when split-off happened there was no strict necessity because of prior road (that was subsequently closed). But necessity was created when 2 lots were, later on, again under common ownership. Ct says: easement should be granted. The unity of title req does not require the dominant and servient estates be severed from a previously undivided parcel.

Hester v. Sawyers (755) By prescription. 2 lg tracts of land, one owner commonly used roadway easement. Orig owner only enclosed 3 sides of property w/ a fence and current owner adds the fourth side in 1922. This forces def to change direction in road so it goes slightly south of orig easement – def uses this new road for 10 yrs.

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Ct determines that Def has an easement by prescription. The 2nd road was more adverse, the prior road was permissive. Presumption – w/ rural land, unless it’s fully fenced, presumption is that 3rd party usage is permissive.

Shanks v. Floom (760) Driveway easement. 1924 – neighbors split cost to build driveway half on each side of their land. Permissive or an easement? Ct: presumption is of adverse use. Since it wasn’t rebutted, both sides have an easement for driveway purposes. Cameron v. Barton (774) Express easement – evolving use. Appurtenant easement – dominant tenament changed from slaughterhouse to a highway garage. Goes from horse-drawn carts to trucks. Pl claims that since the terms of the orig grant are not known, use of the passageway must be restricted to how it’s previously been used. This is valid if it were an easement by prescription but this is an easement by deed. Lge says “right of passway” w/o fixing any limitations so court interprets easement as one that may be used as necessary for the reas occupation and enjoyment of the dominant estate.

Brown v. Voss (768) No glom-on rule. Neighbor invests 11 k into building a house on 2 properties he purchased before Neighbor refuses to let him continue to use his easement (that was just for one of the properties). Problem is you can’t glom extra land onto a tenament and use the easement to service the additional track. Ct acknowledges black-letter rule but still tries to do equity by saying neighbor was estopped from asserting the rule since he waited so long.

Fristoe v. Drapeau (777) Implied easement changing use. Dominant owner wants to build a house, but servient owner argues that change in use of dominant estate is a surcharge on the easement. Ct must consider actual uses beings made at time of severance and uses intended when two parties were severed.

Glenn v. Poole (778) Prescriptive easement expands use. Pl objects to widening of roadway-easement where it hits the highway (“apron”). Ct says some expansion of use both physically and technologically is permissible and foreseeable.

Pasadena v. CA (782) Non-exclusive easement. 5-ft pipeline easement. Landowner grants two waterworks companies easement right to same space. Ct said this is not an exclusive easement. Test is that 2nd easement does not interfere w/ primary grantee.

Lewis v. Young (789) Relocation of easement by landowner. Can a landowner relocate a right of way w/o the easement holder’s consent? Yes, in the absence of demonstrated intent otherwise and consonant w/ beneficial use and development of his prop, so long as he bears the expense of the relocation and so long as the change does not frustrate the parties’ intent or object in creating the right of way, does not increase the burden on the easement holder, and does not significantly lessen the utility of the right of way. In this case, precise location of easement was not spelled out (floating easement that was located) – if it it was spelled out, cts will be more reluctant to permit relocation at request of landowner.

Glosemeyer v. U.S. (803) Rails to trails. Were RR easements extinguished before being turned into trails? Conveying one’s interest in land is clear evid of intent of abandonment, esp when it’s for a contrary purpose. Ct says hiking/ biking is a form of transport but too remote to be considered for RR purpose. Railbanking is unlikely. Ct concludes that fed statute works as a taking.

SALE AND TRANSFER OF LAND

1. Earnest money contract – deposit money paid up fronta. Executory period of 1-3 mo. until there’s a closing

i. Title quality - ensure that title is marketable or “free from reas doubt = default position1. Parties can contract though that title be other than marketable

ii. Financing – arrange for financingiii. Investigate propertyiv. Title approval – title ins. generates preliminary title report which guarantees title in FSA

“subject to the following: encumbrances, mtges, easements…”b. Buyer sends preliminary title report to Seller to get title defects fixed

i. Title ins may charge an additional premium to get rid of exception for defectsii. States w/o title ins will get lawyers to examine title – “abstracts”

iii. Other states have real estate lawyers examine title and send their assessment to buyeriv. Torrens system (rare)

c. Closing i. Seller will deliver a “grant deed” to Buyer

ii. Deed must be in writing except for a lease of 1 year or less.

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1. Essential elements of deed: parties’ names, description of land, evidence of intent to convey, grantor’s signature and delivery. Same reqs as for an earnest $ contract.

2. As btw parties, you don’t need notarization. To be good in the eyes of the world, deed must be recorded and signatures notarized.

3. No consideration required for a deed. 2. Mortgages

a. Conventional loansi. Adjustable Rate Mtge loan v. fixed rate loan

b. Insured loans – FHA, Dept of Veteran Affairs, GNMA- secondary mkt

3. Statute of Frauds a. Contract for sale of land must be in writing

i. Exception: leases for a year or lessii. Minimum elements k’s must contain

1. Parties’ names2. ID of land

a. By reference to a U.S. survey or an official subdivisionb. By metes and bounds

3. Signature of party against whom it’s being enforced – cts are lenient here ex. emails okb. Part Performance- allows Statute of Frauds bar to come down so that parties can prove their k. Acts of

part perf must have “unequivocal” reference to the land, although cts do relax this req. The following theories can be mixed by the ct:

i. Evidentiary theory – must have some of the following1. payment of part or all of the purchase price2. possession 3. improvements

ii. Estoppel Reliance – party who is proposing k has relied to his detriment substantially (Roundy)4. Escrow

a. Used in CA – law does not require it but it’s custom.i. In other parts of the country, realtor/ mtge lender/ title ins. Co. handles this

b. Acts as intermediary, handles closing servicesc. If seller dies in the interim, w/ Escrow there is still a valid deal.

5. Marketability – free from reasonable doubt. Implied in all conveyances.a. Merger – at closing, objections to marketability “merge” with the deed. Post-closing buyer’s defense is

title ins and warranties.b. Waiver –parties can agree to waive marketabilityc. Problems :

i. Break in chain of title 1. There could be a missing deed, one conveyance never got recorded.2. Adverse possession – if so a quiet title action must be brought3. Bad title – forgery somewhere in the chain

ii. Encumbrances – Any claim by 3rd party on real estate unless they’re the type that the party has agreed to ex.“encumbrances that don’t materially affect value of the prop for use as a residence”

1. Mortgages – lender can foreclose on land if not paid2. Easements – right to use3. Judgment liens – unsecured claim reduced to a jment that becomes a lien on land4. Restrictive covenants – (CC&R’s) Ability of 3rd parties to limit how owner uses estate.

Current violation of this renders title unmarketable. Otherwise, you don’t lose title, but other party can bring an injunction.

5. Zoning ordinances – claim by govt to restrict use of real estate. Mere existence of these ids not deemed enough to render prop unmarketable until there’s a current violation. Violation of bldg codes doesn’t affect marketability.

6. Leases7. Defeasible fees – you can lose title by some use of the land. Renders title unmarketable8. Unpaid property taxes

iii. Miscellaneous - Encroachment – renders title unmarketabled. Buyer’s remedies

i. Restitution – earnest $ back and compensation for expenditures made in direct reliance on the k.1. Minority rule: if seller has in good faith breached and can’t convey land (bad title) the

only remedy available is restitution.

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ii. Damages – (not a good option) earnest $ and “loss of bargain.” Requires a lot of evid.iii. Specific Performance – (equitable remedy) “every piece of property is unique.” This option only

works if prop has not already been sold to a BFP.e. Seller’s remedies

i. Earnest $ as liquidated damages if it’s expressly in lieu of other damages, but it can’t be penalty.ii. Damages – (not a good option) because seller has to convince jury he pulled a fast one.

iii. S.P. – Contract price. 6. Mortgages

a. Purchase $ mtge – proceeds of mtge are used to buy real estate. b. Statutory redemption

i. Clogging the Equity of Redemption – invalid. When lender reduces interest rate buyer agrees upfront to waive/ limit right to foreclosure.

ii. Redemption period – 40% of states allow a period of post-foreclosure when debtor has right to pay purchase whatever they paid during foreclosure sale (3-6 months, maybe a year).

c. Promissory note – every mtge requires one. This alone is just a plain loan.d. Acceleration – if borrower defaults, lender can force a balloon.e. Foreclosure

i. Judicial foreclosure ii. Power of sale foreclosure (non-judicial). Power of sale clause must be in contract.

iii. If this doesn’t cover debt, bank will seek a deficiency jment that allows them to go after other assets – borrower is personally liable (not allowed in CA for purchase $ mtges). A right to get a deficiency jment must be by judicial foreclosure.

iv. Less $ - foreclosure routinely yields less than market value – you can’t inspect the property.f. Law of Priorities – 1st lender gets priority

i. If junior mtge forecloses, it gives P a title with senior mtge still attached to land. P takes over mtge and pays them directly.

7. Warrantya. Warranty – 5-6 covenants that protect buyers

i. Present covenants - cause of action on these is triggered on the day deed is delivered (SOL). These are only valid with respect to the original grantee.

1. Seisin – I own land, no break in title2. Right to convey – almost irrelevant promise, it means if an agent, he has been granted

to power to convey3. Covenant against encrumbrances – tracks marketability encumbrances (3rd party claims

on the land, easements, mtges, liens, leases, CC&R’s…)ii. Future covenants – triggered only when there is an eviction (constructive or actual). These run

with the land – future owners can sue original grantor on future covenants. 1. Warranty and quiet enjoyment – they track 1,2 and 32. Further assurances – promise by grantor to execute such further doc s as may be

necessary to perfect the grantor’s title.iii. Eviction = when paramount title holder…

1. Obtains a decree giving him possession (SP, ejectment)2. Orders grantee off land threatens litigation3. When grantee buys the paramount title in order to avoid eviction (must be right)4. When grantee surrenders her claim to paramount title holder and moves off land5. When grantee is sued by paramount title holder and settles, left w/ only part of ld

iv. Limit on Recovery – grantee under a deed’s covenants of title cannot get more than consideration received by the grantor plus interest

v. Estoppel by deed – party is estopped from keeping rights that he has already conveyed even if he receives the rights post-conveyance.

b. Grant deed – limited warranty. i. Only warrants that seller didn’t do anything to screw up the title.

ii. Contains only present covenants. c. Quitclaim deed – no warranties, buyer beware.

i. Minority: providing a quitclaim deed is an implied rejection of the implied covenant of marketability.

8. Recording Acts – required to make deeds valid against 3rd parties.a. Prior taker always wins if he records before 2nd taker takes.b. BFP : must pay value and take without notice of prior takers

i. BFP can be purchaser, lesser, easement grantee, mortgagee, option holder, jment lien holder

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ii. Notice = 1. Actual: if you know about the other party (mere rumor is not enough)2. Constructive: if A recorded before B takes3. Possession: if A is in possession, B is on constructive notice

a. In minority of states, possession can only be actual notice. In this case, you may be in possession only part of the year, recording is better

b. Deemed to know about AP : AP’s can’t record. If it’s open and notorious as required, it’ll put parties on notice, but it may be seasonal use which still satisfies open and notor req. Law says even if AP acquired poss, then goes abroad for years, it’s still constructive notice.

c. Easements by prescription : deemed to be on noticed. Easements by implication : physical apparency at time of split which must be

relevant to 3rd partiesiii. Pay value = flexible standard btw 0 and market value.

1. Suppose it’s a promissory note? Maybe note. If any $ is paid down, it’s good.2. If it’s a negotiable note (w/ no $ down) it’s “paying value. If it’s non-negotiable, no.

c. When does a subsequent taker of a conveyance prevail against a prior unrecorded conveyance?i. Race for the registry states (LA – French civil code)

ii. Notice-race states: subsequent taker must always be a BFP and record before another taker. This does not protect donees.

iii. Pure notice – protects subsequent purchasers, allowing them to rely on the record title as it exists at the time of their purchase.

d. Mechanics’ liens : anyone who supplies material/ labor incorporated into real estate can recover money they are owed if the owner/ builder doesn’t pay them. They can file liens on prop usually have about 1 year to foreclose or lose their lien. Claimaint is given some time after completion of work to file the claim in the public records. Once filed, it relates back to date the work commenced. One who purchases btw those two dates can’t be certain of taking free of such liens.

i. 50% of states: homeowner’s payment to gen contractor is payment to the subs, so subs don’t have a claim against the owner. Other 1/2 of states hold that subs can claim payment from owner if general contractor doesn’t pay them. Buyer needs to make sure title ins. does not “except” out liens that don’t appear on record.

e. Mortgages i. First mortgagor can lose priority if a second mortgagor is a BFP and records prior to him.

ii. Antecedent debt – unless E2 gives present value for the mtge, he doesn’t “pay value” under the Recording Act except if mortgagee gave MR an extension in years to pay.

1. Same goes for judgment liens unless a BFP purchaser then buys the jment lien at an execution sale (paying present value). But if JL records before this pt, it doesn’t benefit from the Recording Act.

9. Certificate of Titlea. Torrens - dying out because of long delay to get title.

i. Indu landowners must bring their land under Torrens system by bringing a registration action.ii. Torrens certificate of title is meaningful – if you lose it, you pay ~$500 to replace.

iii. To buy Torrens prop, buyer must have deed from owner and certificate of title.iv. Immune to AP.

b. Title insurance – can be for owner or lenderi. Won’t insure against defects owner makes himself (ex. Lien)

ii. Typically mtgee’s policy is paid for by lender, insuring their lien priority.iii. Covered risks: 3rd parties own interest in your title, forgeries, unrecorded leases, easements,

construction liens, deductible if boundary-line encroachment, pay atty fees if you’re sued or they’ll cure defect themselves, etc.

Roundy v. Waner – Estoppel reliance. Parents w/ bad credit convey by deed a house to daughter and son-in-law who then own legal title. Real owners/ equitable title still belongs to parents. Personal falling out and parents ask ct to remove daughter’s name off title. They counter-claim that they have real title – there was an oral k to deliver to them real title if they promised to pay off mtge and make improvements. Ct finds estoppel reliance: they sold their house to move closer to parents in reliance on the oral agreement to transfer full title to them.

Burns v. McCormick Unequivocal reference. Pls cut a deal w/ an old man to take care of him in exchange for inheriting his house. They sold their house, moved 200 mi away. He died soon after and oral k was contested. Ct said that shouldn’t get

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house because it violates the statute of frauds and there are not sufficient acts of part performance – evidentiary theory used. Selling their own house and moving 200 mi does not unequivocally refer to the sale of land.

Laba v. Carey (878) Sometimes k’s say buyer agrees to take an insurable title (lesser std) not marketable one. Sometimes an earnest $ k will say that at closing, conveyor will give a quitclaim deed, not a warranty deed, but this does not negate the promise of marketable title. Problem: sidewalks in neighborhood violate a restrictive covenant by city. But city said to seller when he built the sidewalk in front of his prop, that they would waive objections. Buyer’s remorse – even though title ins. Co agrees to insure that there’s no present violation of restrictive covenant. Seller sues for SP and wins.

Chase Federal v. Schreiber (931) Elderly woman flattered by young man and grants her estate to him in consideration of “love and affection.” After she dies, executor sues to get land back. Ct holds that you can have a deed w/o consideration.

Brown v. Lober (995) Def conveys by warranty deed land w/ mineral rights to pl. Pl then sells minerals to coal co. who examines title and discovers they only own 1/3 interest in coal. Brown brings cause of action against def for violation of the covenant of seisin but he can’t recover because SOL has run.

RESTRICTIVE COVENANTS

I. Regulated in three waysa. Law of nuisance – O can’t use land to unreasonably interfere w/ neighbor’s use of landb. Law of Zoning by local govtsc. Law of Restrictive Covenants

II. Developer of subdivisionsa. Records CC&R’s before any lot is conveyed out. Anyone in subdivision is then on constructive notice.b. Continuing Owner’s Assc can levy fees to support themselves. If O doesn’t pay, it’s a lien on their prop.c. Common plan – physical configuration of subdivision puts people on constructive notice of restrictions

on other deeds. Test is apparency.III. Condominium – vertical subdivision

a. Before units are sold, they record by-laws:i. Right to levy assessment for capital improvements or maintenance

ii. Right to levy fees for Owner’s Assc.IV. Informal restrictions

a. Two neighbors execute bilateral agreement. Cts only require notice of this in subseq owners in order to be bound by restrictions.

V. Use v. Building restrictions a. If language is ambiguous, cts look to con law (no racial restrictions), state statutes or local ordinances,

federal statutes or public policyVI. Termination

a. Expiration date (usually 20-25 years)b. Generally default rule is that you need unanimity for renewal for CC&R’s or amendments.c. Cts may impose a uniformity req – can’t benefit some owners over others. d. Changed circumstances (are changes so substantial that they have changed the residential character of the

neighborhood) v. Abandonment (easier to show that just one indu covenant has been destroyed)e. Eminent domain f. With a tax foreclosure, covenants remain.g. Inadvertently – when 2 properties come under common ownership – can’t have covenant on your own ld.

Groninger (683) Developer of subdivision sells model home at the end. Until then, it’s used as a meeting point. Restrictions in deed are ambiguous: “structure is to be used for residential purposes.” Is this a “building” restriction or a “use” restriction? “Only single-family homes can be built” or “Bldgs can only be used for single-family purposes.” Ct. says it’s a building restriction, so no restriction on use for business purposes.

Metzner (684) Use restricted for “residential purposes only.” Neighbors sue for daycare being run next door. Ct said this violates covenant.

Dufrane (700) Def violated restrictions by building a detached garage. Neighbor put def on notice from day 1. Ct may bar particular pl w/o invalidating restriction for which pl seeks relief

1) unclean hands – one who seeks equitable relief must come into court w/o having violated2) Wavier or acquiescence – if you allow your neighbor to consistently violate a covenant

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3) Laches (equitable SOL) – unreasonable delay in notifying 4) Estoppel – if pl has done something to affirmatively mislead def.

Although neighbors had built sheds in yard as well, ct said this did not destroy resid character of neighb.

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