-------------------------------- ADVERSE POSSESSION Background Points/Concepts: Read assigned material at least 2 times. Pay particular attention to the description of rules and notes and questions after a case. In the notes, editors say how to contextualize the cases. What facts or legal rules would have resulted in a different decision? Another court may have different policy concerns, how could other courts handle the same case? You can have possessory right, but not ownership rights… Possessory rights v. ownership rights A statute that defines something as a ppty interest will: Define property List exceptions Establish who has rights to the property Explains how it would be transferred Provides for termination Policy Questions: If you decide against an established rule/statute/documentation, what will happen to those who have already relied on it? ------ Right to exclude: fundamental ppty right. Jacque: Court held that Jacques could recover $100,000 in punitive damages for D trespassing on their land, even though there was no actual harm done to the land ($1 for nominal). Trespass to land is an injury, doesn’t matter whether or not there were physical damage. While an important right, you don’t always the right to exclude. Shack:
Background Points/Concepts: Read assigned material at least 2 times. Pay particular attention to the description of rules and notes and questions after a case. In the notes, editors say how to contextualize the cases. What facts or legal rules would have resulted in a different decision? Another court may have different policy concerns, how could other courts handle the same case?
You can have possessory right, but not ownership rights… Possessory rights v. ownership rights
A statute that defines something as a ppty interest will: Define property List exceptions Establish who has rights to the property Explains how it would be transferred Provides for termination
Policy Questions: If you decide against an established rule/statute/documentation, what will happen to those who have already relied on it? ------
Right to exclude: fundamental ppty right. Jacque: Court held that Jacques could recover $100,000 in punitive damages for D trespassing
on their land, even though there was no actual harm done to the land ($1 for nominal). Trespass to land is an injury, doesn’t matter whether or not there were physical
damage. While an important right, you don’t always the right to exclude. Shack: Court held that owner had no right to prevent NGO workers from coming on his ppty
to give aid to migrant workers. No trespass, workers were as if invisible, the possessory interest wasn’t invaded (because owner never had this right).
-----Adverse Possession => what happens when you don’t exercise your right to exclude. Theory of AP: AP may acquire title at such time as an action in ejectment by the record owner would be barred by s.o.l. *note modern trend is to shorten s.o.l.
AP Policy Justifications:
Economical: Great purpose is to automatically to quiet all titles which are openly and consistently asserted, to provide proof or meritorious titles, and correct errors in conveyancing. Psychological: association between man and his land (strengthens between AP and ppty, diminishes between O and ppty). - to protect title (title may be difficult to prove, protects those whose record title is deficient in some way)- to bar stale claims (lawsuit must be brought w/in s.o.l. )- to reward those who use the land productively- to honor expectations: person in possession becomes attached.
Property rule: ppty interest protected by ppty rule, the interest cannot be taken from its owner without the owner’s consent; all transfers are voluntary. Liability rule: ppty interest protected by liability rule, interest can be taken w/out the owner’s consent but only upon payment of judicially determined damages; transfers are forced (but compensated). AP doctrine protects (1) O’s interest w/ a ppty rule before s.o.l. runs; and (2) AP’s interests w/ a ppty rule after statute has run.
AP Elements Actual entry giving exclusive possession that is : S of L starts. The exact moment that
O has notice that somebody else claim’s their land (or should have known). By exclusive possession, AP must not share with O or with the public (but may act in concert with others to acquire title by adverse possession by tenants in common). - A deed is considered explicit notice to O that AP is claiming title.
Adverse to owner’s legal interest and under Claim of right (title) : AP has to show use is without permission. - Key issue = state of mind required of the AP: objective, good-faith, or aggressive standard? - objective = state of mind irrelevant. What matters is AP’s actions. AP must look like he is under a claim or right but doesn’t have to actually claim title (can say he will surrender to O once he appears). - good faith: bona fide belief that he has the title. - aggressive: aggressive mindset needed, mistaken belief won’t suffice. - Majority US and England = objective.
Open, notorious occupation : AP must occupy in a visible manner (appropriate to the condition, size, etc) that would constitute reasonable notice to O.
Note, if surface and other resources (i.e. minerals) are not owned by same person, possession of the surface does not carry possession of the mineral. Possession of the surface does not give a cause of action to the separate owner of the minerals until the minerals are disturbed (mined).
Continuous Use for statutory period : any time during statutory period, if owner inspects the ppty, it must be apparent that there is a trespasser. AP must make continuous use of ppty that an average owner would make.
- by Howard v. Kunto: seasonal use may satisfy continuous, if the ppty is normally used this way (summer occupancy in summer community).
- for any gaps when AP isn’t using ppty look at his intent (i.e. if he had an intention to return). The AP period will either continue or start anew. - Tacking of APs: successive APs must have privity, and all APs must meet all requirements. - Privity: voluntarily transfer through a recognized legal relationship (abandonment and violent takeover don’t count). Successive APs must have privity (defined by courts). American courts require privity. For English courts, privity is a non-issue.
* Implications of the magic moment (time of actual entry) that runs across the top part of the timeline (at that moment, see who owned it, what owner’s disabilities were or were not, and O’s interests, and forget everything else…) => disability will affect the s.o.l. that AP must meet; AP acquires O’s interests (e.g., if O had LE, AP gets LE). * re-entry by the owner must be open and hostile, and effective. * running of s.o.l. not only bars an action by the original O, but vests a new title in AP. Once acquired, this new title “relates back” to the date of the event that started the s.o.l. and the law acts as if AP were the owner from that date. * during s.o.l. AP has right to possession that is higher relative to the world except the rightful owner.
Owners: Once AP starts on O, it runs against O and all of O’s successors in interest. If A enters against O in 1990, and there is subsequent transfer to C, AP’s claim continues against C from 1990. successive ownerships are tacked on owner’s side (also need privity).
If O reenters the ppty open and notoriously for the purpose of regaining possession, interruption occurs, stops s.o.l.
- Objective test: interruption can occur without actual intent to oust AP. Same standard as AP claim of right. If O’s acts are ordinary acts of ownership and would give notice of claim to the average person = interruption. Presumption that use of land by O is exercising his right to use it, so when O uses land, presumptively asserts ownership.
Boundary Issues:
Van Walkenburgh v. Lutz: * Example of a statutory requirement for APCourt held that by statute, in absence of color of title (claim founded in written documentation): AP substantially enclosed or cultivated/improved X% of ppty => gets X% of ppty. (if founded on written document, if AP on X% => get whole). Encroachments:Mannillo v. Gorski “minor piece of land” in this case 15 inches, would have had to survey, not exceeding several feetClaim of Right:
Aggressive standard (Maine doctrine): if AP was under mistaken belief, and wouldn’t have been occupying or claiming the strip if she would have known otherwise => adversity is missing. No AP. objective standard (Connecticut doctrine): state of mind irrelevant. AP’s actions satisfy claim of right. Open and Notorious will be questionable. O can say didn’t know, too minor. Court held objective + with qualification: no presumption of notice of a minor encroachment along common boundary. Only “open and notorious” if O had actual knowledge. If they didn’t, O may have to let AP have disputed tract in exchange for payment. Policy: Alternative would have put too much of a burden on O. Boundary disputes may be solved by: Agreed boundaries: an oral agreement is enforceable if both accept the line for a long
period of time. Acquiescence: long acquiesce (may be shorter than s.o.l. ) - is evidence of an
agreement. Estoppel: N1 makes representations about (or engages in conduct that indicate) the
boundary line, and N2 then changes her position in reliance on the representations or conduct. N1 is estopped to deny the validity of his statements or acts. ○ Mistaken improver: ○ A makes improvements that is mistakenly on B’s land. B discovers before s.o.l. ○ Under common law, B had right to make A remove improvement. ○ Modern law: If in good faith, A may get equitable relief. A may have to pay
damages to B, B may get improvement by paying the value to A, or B may get option to do either pay A the value of the improvement or sell A the land at a fair market value.
Howard v. Kunto Continuous use: court held with beachfront ppty with community of “summer occupancy” => summer occupancy met continuous requirement (consistent with acting like the owner)
Tacking of ppty: This is in jurisdiction where it is already established: [deed][x] + tacking = [deed + x]Purchaser can tack the adverse use of its predecessor in interest to that of his own where the land was intended to be included in the deed between them, but was mistakenly omitted from the description. Tacking of APs: successive APs may tack on previous time, if there is privity (reasonable legal voluntary relationship between the APs). Note, relative rights, if B forces AP off ppty, while AP can’t win legal action against O, can over B. Extended to: when several successive purchasers receive record title to tract A under the mistaken belief that they were acquiring tract B, right next to it, and where possession of tract B is transferred to successive purchasers (APs) and occupied in a continuous manner (that meets AP elements) for more than s.o.l., then there is sufficient privity to permit tacking and establish AP as a matter of law. (basically allows “tacking” onto
nothing (deed describes none of the land in question, no original land to tack onto). Policy => strong public policy favoring early certainty as to the location of land ownership (which enters into a into a proper interpretation of privity).
Color of title: a claim founded on written instrument that, unknown to the claimant, is illegitimate. Automatically satisfies the “Adverse and under claim of right” element. - In jurisdictions with constructive AP => If under color of title, AP acquires part of the ppty covered by the defective writing, this results in constructive possession of all that the writing describes. - not required in most American jurisdictions. - small minority requires it for AP. Or give shorter s.o.l.
Disability: If Disability affects O’s legal status, at the time of entry => time extension
(1) O has until after s.o.l has run out, once disability is removed +”time” to claim right (2) Once disability is removed + “time” to claim right* Note, statute usually defines what constitutes disability. * A disability is irrelevant unless it existed at the time of actual entry. * Usually whichever is longer (in contrast to trend to decreasing s.o.l for regular APs) - O must be in a condition to be able to wave her “right to exclude” stick. - AP will want actual entry at a point that O’s legal status was fine, O will want entry at a time when she is incapacitated.
----Last points… Recording is not necessary to establish ownership, but recording protects you in some cases. For exp, if you have a trespasser, can call the sheriff show the record that you are the owner, get help. What this means to a purchaser? You must always go out and look at the land, if you don’t, the legal system will assume that you could or should have.
By virtue of allowing tacking with the condition of privity we allow the AP who had been on property for a while (but not till s.o.l.) the ability to sell the value of his time (what he has accumulated).
------------ESTATES
Present Interest
Words OftenUsed to Create
the Interest
Future Interest _
In Grantor In Third PersonFee simple
Absolute“to A”“to A and her heirs”
- -
Fee simple determinable
“so long as”“while”“during”
Possibility of reverter
-
“until”“unless”
Fee simplesubject to condition subsequent
“provided that”“on condition”“but if”“re-enter the ppty”
Right of entry for condition broken(or power of termination)
Fee simple absolute = absolute ownership, no limitations on inheritability, cannot be divested, will not end on the happening of any event. No future interest
---------------------------------------------------------Defeasible Fees: potential to endure forever---------------------------------------------------------
Fee simple determinable: limited grant, giving something limited from the beginning. Future interest in grantor: possibility of reverter Automatic Termination and Transfer: As soon as the condition or limitation occurs,
the defeasible fee is terminated, and the grantor becomes owner of the ppty. AP implication: s.o.l. starts as soon as the condition is broken. Created by: any words with a durational aspect, “while used for… ,” “during the…,”
“until it is no longer used for…,” “so long as ppty is used for…”* Be careful: words that state motive: “to X for school purposes” create a FSA not a FSD.
Fee simple subject to condition subsequent: full grant subject to a condition, giving something unlimited but with the possibility to take it all back later. Gives a fee simple that may be cut short or divested if the grantor acts to re-take the ppty when a stated condition happens. Future interest in grantor: right of entry (or power of termination) Contingent Termination and Transfer: when a stated condition happens, if the
grantor acts to re-take the ppty, then the defeasible fee is terminated, and the grantor becomes owner of the ppty.
AP implication: AP begins when the estate ends, so s.o.l. does not start until the grantor acts to re-take the ppty and is rebuffed.
Created by: words of express condition, provisional language: “but if not used for…,” “provided, however, that when the premises…,”
Fee simple subject to executory limitation: FSD and FSSCS all rolled into one, where future interest is held by a third party (another transferee). * Can be created either in possession or in remainder. Acts like a FSD but EI holder does monitoring.
Future interest in 3rd party: executory interest => divests or cuts short the proceeding interest, takes away something that has already been vested in somebody. Either divests or cuts short the interest of another transferee (shifting), or divests the grantor in the future (springing -- from a reversion).
Automatic Divestment/Transfer: As soon as the condition or limitation occurs, the proceeding interest is divested or terminated, and the executive interest holder becomes owner of the ppty (Same as FSD).
AP implication: s.o.l. starts as soon as the condition is broken (same as FSD). Created by: when mention of a 3rd party, words limiting the duration or words of
condition (both duration and provisional language).(This estate didn’t exist at common law -- grantor couldn’t plan for contingent events, p. 280)
------------------------------------------------------------------------------------------Life Estate: necessarily ends at death of the life tenant, may end sooner. ------------------------------------------------------------------------------------------ LE can be determinable, subject to condition subsequent, or subject to an executory
limitation. Future interest in grantor: reversion => created when grantor has not given away all
that he has: (1) when there is a LE and no remainder =>
O = reversion in a FSA(2) when there is a LE followed by a CR(s) =>
O = reversion in a FSS to EI Future interest in 3rd parties: remainder => a future interest in a grantee (third party)
that is capable of becoming a present possessory estate on the termination of a prior possessory estate. (If not possible for it to become possessory upon the termination, it is not a remainder.)
Condition precedent: if the condition element is incorporated into the gift, or if any condition must be met before the interest is given => creates a contingent remainder.
Condition subsequent => if after words giving a vested interest, a condition is added that divests it => creates a vested remainder in a FS subject to EI.
Vested remainder: (1) ascertained person; (2) not subject to condition precedent (express condition attached to the remainder). o absolutely vested remainder = certain to acquireo vested remainder subject to open = more persons can become members of the class,
diluting the interest. o vested remainder in a FSS to EI
or vested remainder in a FSS to divestment (descriptive): vested remainder is subject to total divestment on the occurrence of a condition subsequent.- once divesting condition occurs, the vested remainder is lost.
Contingent remainder: (1) unascertained person; or (2) subject to a condition precedent* Heirs are always CRs. - Once a contingent remainder is vested, O’s reversion is eliminated.
* See LE Info
----Merging interests: Estate’s present interest + future interest = FSAExp: if A has a LE and B has a VR in a FSA => if A conveys LE to B, B gets a FSA. -------------------Remainders -----------------Vesting: If a future interest is contingent upon a condition, once that condition is met, it will change the state of the future interest by either vesting the interest or destroying it. To A for life, then to B if she has a child. O = reversion in a FSAB = CR Once B has a child, her CR is vested, she gets a FSA, and O’s reversion is eliminated.
If there is a class of unascertained people or a class of people who have met a precedent condition: e.g. “To A’s children - where none are bornA’s children = CRExp: “A’s children” where A has one child BB = vested remainder subject to open (Can’t say A’s children = VR subject to open because need to be ascertained)
Difference between VR and CR: * law has a preference for a vested remainder because it accelerates into possession whenever and however the preceding estate ends, even if there are subsequent possibilities (e.g. may be diluted, may give FSS to EI). A CR cannot become possessory as long as it remains contingent. (p. 277)Result: VRs establishes certainty as to who is to take ppty, CRs are uncertain -- leave uncertainty in succession. (p. 273)’
Exp: “A for life, then to B, but if B dies under 21 to C.” B = VR, so when A’s LE ends, gets the ppty even though under 21, but he has a FSS to EI (FSS to divestment) until he meets the condition (possibility of not meeting the condition subsequent still exists)Compare to: “to A for life, then to B if B reaches 21, and if B does not reach 21 to C” B = CR, B is not entitled to the ppty when A’s LE ends, we have to wait to see if he will meet the condition (meanwhile O holds it).
--------------Classifying future interests with LEs:
“if LT fails to make disposition (disinherit)… upon her death, shall pass to my children A and B.” A and B = VRs
Exercise of a power of appointment = a condition subsequent on the remainder (possibility of being disinherited acts as a condition subsequent). (footnote, p. 290). E.g.: Swanson vs. Swanson
When there is a LE followed by a CR => O = reversion in a FSS to EICR holder = EI in a FSA in relation to O’s reversion * if there are multiple CRs, then each holds an EI in relation to O’s reversion
Contingent remainder => contingent remainderIf the first interest created is a contingent remainder, the second future interest will also be a contingent remainder. * O = reversion in a FSS to EICR holders also have EIs
Vested remainder => executory interestIf the first interest created is a vested interest, and there is a condition subsequent with the ppty going to another upon its failure, then the second future interest will be a divesting executory interest. * first interest = VR in a FSS to EI * following interest = EI
--------Transferability: Transferability: depends on how much we consider interests to be ppty interest. If you have property interest, you have something that is valuable, and can serve as the basis for which creditors can give credit. Property interest => creditors can reach it. No property interest => creditors can’t reach it. If transferable => creditors can reach it!!
Transferability of future interests held in grantor: Reversion: Common Law/Modern Law: a reversion was transferable during life and
descendible/devisable at death. (p. 271)
Possibility of reverter/Right of entry: Common law: right of entry and possibility of reverter were not transferable during
life, but were inheritable upon grantor’s death. Modern rule: In most juris, possibility of reverter and the right of entry are transferable
during life. Minority rules: future interests are not transferable during life except to the holder of
the present interest; possibility of reverter is transferable, but the right of entry is not; attempt to transfer a right of entry destroys it. (p. 249)
Transferability of future interest held by grantees/third parties:
Vested Remainder: Common/modern law => transferable during life and at death. * Be careful of vested remainders in FSS to EI (i.e. vested remainders subject to divestment), they are passed along so long as the condition subsequent (divestment) did not occur prior to the termination of the LE. If the divestment did occur, the VR was destroyed, so nothing could be passed on (p. 290)
Contingent Remainders: Common law: Not transferable during life, but inheritable at death (if survivorship was
not required) (p. 278) Majority rule: CRs transferable during life. Note, obviously unascertained CRs are not transferable, as nobody is identified as the
holder.
Executory interests: Common/modern law => transferable during life.
* After being transferred, interests keep their original name!
--------AP and Estates:
AP of future interests: When a grantee is given a defeasible fee, she can adversely possess against the
condition. AP is easier with a FSD because clock starts ticking as soon as condition ends, the
grantor can lose his right (future interest) without even knowing the condition was broken.
But with FSSCS, clock doesn’t start ticking until grantor attempts to re-enter and is rebuffed.
AP and Life Estates: An AP can clear out a life tenant, but AP gets what life tenant had (estate for LT’s life).
--------------------------------------------Ambiguity in Conveyances -------------------------------------------- Grantor’s Intent:o Example: (Marenhholz, p. 242) o FSD vs. FSSCS: “this land to be used for school purposes only; otherwise to revert
to grantors herein” o Grantor’s intent - focus on granting clause: o The grant contains a limitation within the granting clause, suggest a limited grant
(both theoretically and linguistically), rather than a full grant subject to a condition, indicating a FSD. Additionally, the use of the word “revert” The word “revert” does not automatically create a possibility of reverter, but in combination with preceding
phase seems to indicate a mandatory return rather than a permissive return. The word “may” is not used...
o The grant was for an exclusive use (i.e. school purposes), and the grantor intended to have the land back if it were to be ceased to be used for that purpose => FSD.
Construction Rules (Preferences):o Under common law: Presumption for LE unless the intent to pass a fee simple was
clearly expressed (White, 223). o Policy: lord conveyed land to grantee for personal services rendered, grant was for
no longer than the life of the grantee.
o Preference for whole estate: Presumes to pass the largest estate the grantor owned, unless a contrary intention appears or is implied. (p. 223-224)
o Policy: force ppl to be really clear.
o FSD v. FSSCS => preference for FSSCS because forfeiture is optional and not automatic. (p. 252 (bottom footnote), notes)
o Preference for vested remainder over a contingent remainder. (p. 277)o Policy: VR accelerates into possession when LE ends, while CR cannot become
possessory until vested.
--------------------Conditions--------------------Restrictions on land use: Balance between a use restriction that is so extreme as to how the ppty is to be used
that nobody will buy it -- could potentially have same affect as absolute restraint on alienation (which is void).
A use restriction may be valid if imposed on a non-profit: a restriction such as “ppty is to be used for the use and benefit of the grantee... and if it fails to be used by the grantee or in the event of a sale or a transfer… the ppty will revert”
Validity of the habendum clause: court noted that while absolute restraint on alienation is void, in this case there was an OR between the habendum clause: “if the land is not used by the second party” or “in the event of sale of transfer by the second party” => the invalid restraint does not affect the condition on land use.
Validity of the condition on land use: the ppty “is restricted for the use and benefit” of the grantee => grantor simply meant to say that the ppty was given on the condition that the ppty be used for purposes for which the non-profit was formed.
It is arguable that the condition is not a restriction on land use but on who uses it, but if this was never allowed, ppty could not be conveyed to a school district for school purposes, or a city to be used for city purposes => which is inconsistent with precedent. Courts draw a sharp distinction between a restriction on land use and a restraint on alienation.
Policy => courts don’t want to hinder giving to non-profits, a grantor should be able to give to a school, city etc. with a condition. Otherwise, nobody would give to such organizations…
(Mountain Brew Lodge, p. 251) Some juris: If the use restriction is so limited that is unreasonably affects the
marketability of the land (effectively same as void on alienation), then it is void.
Covenants: A covenant is a promises made by the grantee to oblige by a certain condition. If it is breached, the grantor may sue for injunction or damages.
Forced Broken Condition -- Eminent Domain: When a defeasible fee is to be used for a specified use, eminent domain proceedings
prevent the specified use. Value of the eminent domain award = value of the land for any use
Figuring out the value of the interests upon forced termination: Majority rule: grantee takes the whole of the amount awarded by the proceedings.
Policy => eminent domain made it impossible to uphold the condition, so the violation is excused.
Alternative Rule: o Figure out respective values of the interests:
(1) Value of FSD figured first (value of land with restriction) => grantee(2) Difference of the full market value of ppty (with no restrictions) - value of FSD => holders of the possibility of reverter. (p. 264)* Additionally, the money received by grantee must be used under the conditions specified in the grant, or goes holders of poss. of reverter. o Policy => grantee shouldn’t be able to get the value of something that he has not lost
(vale of the unrestricted ppty) when the grantor never intended him to have it. o Note, this does not apply when the grantee forces the violation of the rule upon itself.
Exp, the grantee, City of Palm Springs, brought a condemnation action against the ppty, tried to get all of the award.
------Removing Conditions: On one hand want to allow use restrictions, but on the other hand want to be able to shut them off if they become too limiting. Need a way to shut down quirky conditions that lower market value of ppty.
Some juris, impose a s.o.l. for right of entry after a condition has been broken. The ability to inherit the right of entry may be limited.
Why would we want to impose a stature of limitations on a condition? Policy reasons = land is a commodity that can be bought and sold. A condition can decrease marketability.
Why would we not want to cut them short? Owner can care enough about the ppty to put in monitoring provisions.
Restraints on Alienation:-Policy Against: (p. 227) Restraints make ppty unmarketable - may prevent ppty from being put to its highest
and best use. Mortgage may not be able to be up on the land (check this) restraints discourage improvements on the land perpetuate the concentration of wealth making it impossible for the owner to sell ppty
and consume the proceeds (spread it to others) prevents owner’s creditor from reaching the ppty (a person could have the land, trick
ppl into thinking she can sell thought she really can’t - would hurt creditors).
Policy for: in this day and age creditors can reasonably check to see if there is restraint held on a land. Creditors have the means to protect themselves.
Types of Restraints on Alienation: (p. 227)Disabling restraint: takes away power of grantee to transfer his interest (any transfer is void) => NOT ALLOWED (courts do not like this)Forfeiture restraint: if grantee attempts to transfer, ppty is forfeited to another person. Promissory restraint: grantee promises not to transfer his interest. If such a restraint is valid, it is enforceable through contract law.
Restatement of Ppty approach: * Absolute restraint on a fee simple is void (majority rule). * Partial restraints on fee simple (limiting conveyance to certain ppl; time limit on the restraint) are valid if the restraint is found to be reasonable in purpose, effect, and duration.
Exps: Fee simple subject to a condition subsequent (involves right to entry)Forfeiture restraint => this restraint is okayTo E.W. & her heirs, but if anyone attempts to sell the ppty, my heirs shall have the right to re-enter and reclaim.
Fee simple subject to a condition subsequent (involves right to entry)Disabling restraint => not allowedTo E.W. and her heirs, but if anyone attempts to sell the ppty, such sale shall be void. A person having the land under this deed, could trick people into thinking that she can sell, but then won’t be able to, will hurt creditors. Courts do not like this.
Other void conditions:Conditions that are seen imposed due to spite or malice are usually void.
----------------------------------------------Removing Future Interests:----------------------------------------------Destructibility of CRs: Rule: A CR is destroyed if it does vest upon the termination of the LE whenever and however the estate ends. Policy => Furthered alienability. CRs made land less alienable, so were disliked. Note, if a child is born right after the LE ends, it is treated as being ascertained from the time of conception.
Exp: “To A for life, then to B and her heirs if B survives A.” A = LEB = CRO = reversion in a FSA (his reversion kicks in once LE ends but only if CR doesn’t vest, so it will be in a FSA -- nobody has any interests besides him). If A conveys his LE to O; the LE merges into the reversion (becomes FSA), so B’s CR is destroyed.
-----Rule Against Perpetuities
RAP destroys contingent interests that might vest too remotely.
RAP Affects these Contingent Interests: Vested Remainders subject to open => open class? Contingent Remainders => ascertained? Condition precedent? Executory Interest => what condition affects taking?
Things not affected by RAP: Future interests held by the grantor: reversion, possibility of reverter, right of entry Vested Remainders If BOTH possessory estate and future interest are charitable organizations (exception)
Must show a contingent interest is certain to vest or terminate no later than 21 years after the death of some person (validating life) alive at the creation of the interest (time of testator’s death or at the time of the conveyance).
Validating lives: Someone alive at the creation of the interest (ascertained) Someone who determines the vesting of the contingent interest =>
(ascertainment, condition precedent, or both): preceding life tenant taker(s) of the contingent interest anyone who can affect the identity of the takers (e.g. A in a gift to A’s children) anyone who can affect a condition precedent
DO NOT have to be people mentioned in the instrument, but must be people who can affect vesting of the interest.
* You can use a diff validating life for each contingent interest* The validating life can be the contingent interest holder
IMPOSSIBLE validating lives: An open class
Strategy for determining validity: Bracket out the gift First figure out future interests For any contingent interest, list the conditions that determine vesting Look at who affects the conditions:
(1) If unascertained => who can ascertain *always do first(2) If precedent condition => who can affect the condition
----------------------BE CAREFUL… ---------------------Gifts to Classes: VR subject to open: Under RAP, a class gift is not vested until the interests of all of the members have vested. If an afterborn (born after the creation of the interest) of the class may vest too remotely (after 21 years) => then the gift to the entire class is VOID. “Then living…” If the precedent condition to taking is that the person must be then living, then the only way this can be good is if: the takers are all ascertained people. Check this
Look at who is ascertained at the creation of the interest (time of testator’s death or at the time of the conveyance). If time of testator’s death =>T’s death (testator) will ascertain his children, so T’s children will be a closed class.
--------Policy of RAP:Advantage to RAP is that it gives us immediate knowledge about transferability, etc. Force people to not make errors (drastic consequences -- e.g. a FSA is given instead of a FSD), RAP is not concerned with grantor’s intent, no interest in protecting those that aren’t clear.
Possible round-about to RAP: Since EIs are subject to RAP, but possibility of reverter and right of entry are not. Have grantor retain the interest, then transfer to a third party. Exp, grantor holds poss or reverter => transfers it to B => B holds a poss. of reverter.
(some juris. do not allow this…)
Saving clause: Can write in a clause that will terminate the instrument automatically at the time of a stated event. In a trust, the clause: “If not previously terminated, the trust shall terminate.... 21 years after the death of the survivor of A and A’s issue living at my death.” => provides for a termination w/in the bounds of RAP and prevents a violation of the rule: (A’s afterborn child who lives more than 21 years after the death of A and all A’s issue living at T’s death) Can use extraneous lives in a savings clause to get a trust to continue for an exceptionally long period of time. Exp: End the trust 21 years after the death of the survivor of twelve named babies born last month.
-------Alternative to RAP: Some juris have adopted the “wait and see test”
Cy pres = a construction test: If the words can be changed to make it valid in a way that one can be confident it is not violating the grantor’s intent, then can do so. Infer the grantor’s intent from the words. Exp, surely grantor didn’t expect for the Jees to have children in their 70s.
Probs with LE: Rule: Life tenant should not be able to use the property in a manner that unreasonably interferes with the expectations of the remaindermen. (p. 234)Expectations can be the ppty’s nature, character, improvements, or economic earnings. In some juris. only VRs can sue for waste, CRs cannot.
General notions: Land is unique (original English notion): grantor intended the remaindermen to
receive the identical thing granted. Value of the Land (prevailing American notion): Emphasis on value of the land, life
tenant can make substantial alterations of even destroy structures when conditions change, provided the value of the remainder is not diminished by these actions.
Competing Interests: value of the earnings obtainable during life tenant’s expected lifetime vs. the remainder’s interest to maximize the value of the property (the present value of the entire stream of future earnings obtainable from it).
Balancing Interests: Typically the greater A’s interest, the more freedom A has in using the ppty in question; the more tenuous B’s interest, the less protection given B.
Some courts may take into account the life expectancy of the life tenant: evaluate how long present interest is relative to the future interest.
Waste = conduct by the life tenant that permanently impairs the value of the land or the interest of the future interest holders. Generally, alterations to the land or changing the structures are fine as long as such change do not reduce the value of the remaindermen.
Policy => Designed to avoid uses of property that fail to maximize the property’s value. Remaindermen may be children, who do not have the legal capacity to negotiate their interests.
Types of Waste: affirmative waste = arising from voluntary injurious acts (generally injurious means
acts that substantially reduce the value of the ppty) Permissive waste = (negligence) arising from a failure to take reasonable care of the
pptyo failing to pay taxeso letting water pump fall into disrepair resulting in loss of lawn, shrubs, and trees
Things that LT has duty to do: Life tenant under no duty to insure buildings on the land. If the life tenant does insure and something happens to destroy the buildings, then life tenant is entitled to all proceeds of the insurance. (p. 237) o Policy basis => different legal effect of destroying the land vs. the buildings on the
land.
Waste is something you discuss, argue about, it is not set by a particular formula. You don’t learn rules of waste, but what needs to be argued to declare something as waste (e.g. permanent harm to ppty, diminishes future interests).
Exp: Life tenant’s desire to sell entire ppty that is increasing in value is waste, as it would cause great financial loss to the remaindermen. However, the two parties need to figure out a way to pledge the land to provide sufficient funds for the life tenant’s reasonable needs, or she is entitled to relief by way of sale of part of the burdened land sufficient to provide for her reasonable needs from interest from the investment of the sale proceeds. (Baker v. Weedon, p. 234). “Open mines” rule: If grantor opened mines, life tenant can continue to mine the land (but must do so reasonably), but life tenant cannot open mines to newly discovered minerals. Justification: grantor expected continuity of the mining of the minerals. Policy => way to reduce conflict between present and future interest holders. Incentive to provide natural resources. Life tenant doesn’t have the incentive to make a decision that is best for the long term, even if it is said she can pull out a “reasonable” amount this will likely result in litigation.
Probs with LEs: A legal LE is unsuited to a modern economy that considers land a form of income-producing wealth, ppty can swiftly appreciate in value under pressure for development and must be managed effectively. Exp, can’t create a legal LE in England.
Alternative to the LE: Trust: “to X in trust for A for life, remainder to O’s children.” X = trustee, has the power to sell, lease, mortgage, remove minerals, etc but must do so
prudently, and is accountable for mismanagement. Trustee hold the legal fee simple and owes a fiduciary duty to the life tenant and
remaindermen. Trustee is subject to orders of an equity court, which enforces his duties to
beneficiaries of the trust. A and O’s children have equitable interests A can be named trustee by O A trustee, unlike life tenant is required to insure the ppty and hold the proceeds in trust
for the life tenant and remaindermen if disaster strikes the ppty. Trustee is held liable to beneficiaries for amount lost by breach of his duty to prudently
invest. Transferability: If trustee sells the ppty, must invest the proceeds of the sale and pay
the resulting income to the life tenant. o But prob with trusts: lenders don’t like trusts.
------Defeasible life estate: Used to be common for a LE defeasible upon marriage. Exp, husband gives ppty to widow for life with a condition that she loses it if she remarries. Now-a-days not really enforceable: The condition disqualifies the ppty for a marital tax deduction, to qualify for the deduction, the surviving spouse must be entitled for all the income of the ppty for her entire life. Against common law rule against restraints on marriage or provisions that hinder it. If the provision has the purpose of discouraging marriage then it is void (e.g. “to A for life, but if A marries, then to B”). If seen to provide support until marriage, with no desire to hinder it, may be valid (e.g. “to A for life so long as A remains unmarried, then to B”).
Restraints on LE: Absolute disabling restraint is void, but a forfeiture restraint is valid (majority rule).
Valuation of a LE and remainder: Assume ppty is worth $10,000 and interest rate is 6%. To value the LE: (1) ascertain present value of the right to receive $600 annually (6% of $10,000) for the life tenant’s life expectancy.
(2) seek a sum that if invested for the life tenant’s life expectancy at 6% will yield $600 for the number of years of her expected life, and exhaust itself on final payment (ends up $0). Present value = value of the future amount less the amount of interest that is earned on it. Exp: Right to $1 a year from not at a 6% interest rate
Present value = 94 centsRight to $1 two years from now
Present value = 89 cents (worth 94 cents one year from now, then $1 two years from now).
Present value = An amount such that when the interest is compounded annually, for the period of the life expectancy, it will end up yielding the value of the ppty.
The asset value of the ppty is divided into the amount for the life estate and the amount for the remainder (based on life expectancy tables). Exp, if the life tenant is 70 years old, the LE is wroth 48% of the asset value, and the remainder is wroth 52%.
--------------CO-OWNERSHIP
Co-Ownership and Marital InterestsCo-ownership: two or more persons having concurrent rights of present or future possession. Policy for co-ownership:
Overall Policy: Pro Co-Ownership Policy: allows a greater number of Americans to own ppty. Con Co-Ownership Policy: causes more complications than single ownership.
Conveyance to 2 or more ppl: Common Law: preference for JTs over TICIf ambiguity in the conveyance to 2 or more ppl => JT assumed
Modern law: Opposite: preference for TIC over JTs. Usually statute provides that a conveyance to 2 or more ppl => creates TIC unless there is an explicit intent to create JT. o Some states require an express mention of right of survivorship to create a JT. o A few states: JT not available.
Conveyances to husband and wife: Common law: presumed TBE unless clear contrary intent Modern law: for those states with TBE, majority creates TBEo Minority rules: presume TIC or JT
Tenants in Common: separate but undivided interests in ppty. Concept: Each tenant owns an undivided share of the whole. Shares: presumption for equal shares, but TIC can hold unequal shares if intended. No right of survivorship. Transferability: interest of each is transferable during life and death. (p. 340)o Exp: A and B are TICs; A conveys his interest to C; B and C are TICs
Unity: o Possession: each must have the right to possession of the whole.
Creation: by conveyance, or when multiple ppl inherit from a decedent.
Termination: If prob can’t be solved by mutual agreement => any tenant can bring action for judicial partition. Court will either physically partition the ppty into separate parts or order the ppty sold and divide the proceeds. Partition: right to partition is a right to convey (class, 10/10)
o Restraints on partitioning similar to restraints on alienation, make be valid if appear to be legitimate, reasonable. With the burden on the person restraining the partition to show it is reasonable.
Policy: fair and equitable treatment of the interests of all cotenants (p. 368). Partition in kind: physical divide the ppty into separate parts. Partition by sale: sell ppty and divide the proceeds. General rule: Preference for Partition in kind (justification - land is unique, to force
somebody from their land is an extreme remedy). o If the physical partition results in unequal shares, a money award can be made from
one tenant to another to equalize the shares (owelty). (p. 361, note 11) Exception: Partition by sale if: (1) the physical attributes of the land are such that a
partition in kind would be impractical or inequitable; and (2) the interest of all the tenants would be better served by a sale. With burden on the party requesting a sale to show sale is in better serves parties’ interests [Delfino, p. 362]o No access to a right-of-way could make for impractical division. o All interest must be considered, not just the economic gain of one tenant [Delf. p.
365]o But when the focus is on economic best interest, partition by sale may be favored
because the “whole is worth more than the sum of its parts” (partition in kind results in smaller pieces of land whose total value doesn’t equal that of the whole
Joint tenants: joint tenants together are regarded as the single owner. Concepts: Each tenant owns the undivided whole of the ppty. Right of survivorship: when one joint tenant dies nothing passes to the surviving joint
tenant, (as he already owns it), the ppty simply continues in survivors, the deceased’s interest having terminated. No duration of time period required (i.e. if A dies right before B in car accident, then B dies too -- ppty goes to B’s heirs; but murder does not count)
Transferability: Each jt can convey her interest during life (right to sever JT and destroy right of survivorship). A jt’s interest cannot be transferred at death (because of the right of survivorship, at death no interest to pass on).
Because regarded as single owner -- interests must be equal in all respects: Unities: o Time: the interest of each jt must be acquired or vest at the same timeo Title: all jts must acquire title by the same instrument or by joint AP. A joint
tenancy can never be created by intestate succession or other act of law. o Interest: equal undivided shares and identical interests measured by duration.
- Common law: shares must be equal- Modern Take: equal shares, staring presumption, but upon partition, the shares can be based on the $ contributed by each jt
o Possession: each must have right to possession of the whole. Once joint tenancy is created, one jt can voluntarily give exclusive possession to the other jt.
Creation of JT: JT can be created by conveyance, or will, or by joint AP. Does not occur when ppty is
given through intestate succession. Common Law: The four unities need to exist for a JT to be created. Modern Take -- Grantor’s Intent: no requirement of four unities, a joint tenancy is
created by explicitly stating the desire to do so (may require express mention of right of survivorship).
At common law, for a sole owner to create a JT with somebody else, had to use a straw - to covey out and back (because violates the unity of time and title; A => A + B really a conveyance of a one-half interest to B from A, creating TIC.
Modern Take: some juris allow jt to do it herself by direct transfer, conveyance from sole owner to himself and others creates a JT.
Consequences of the right of survivorship: Because of right of survivorship, at death the jt’s interest is destroyed. No probate of the ppty (judicial supervision of the giving always the decedent’s ppty --
can be costly and can take a while) Creditors must act during jt’s life. During life can seize and sell jt’s interest in the
ppty, but at death, nothing exist for the creditor to reach. Exception: federal estate tax => at jt’s death, his share of the ppty (based on how much
$ he put in) is subject to taxes. Although for husband and wife, no taxes are actually paid under marital deduction.
Termination of JT: Common Law: JT is severed when any of the unities is broken => TICo But need to analyze in context, a juris could have common law with clean-up
methods. Exp: husband and wife have contract to divide proceeds of ppty; but then wife dies before they sell it. By CL takes all because no unity has been broken. But could say husband has survivorship rights, but since he entered contract to share half, when he sells 50% goes to wife’s estate (clean-up method).
Modern law: Evaluate (1) the intent of the parties. If a jt does something that looks like one of the old severances, was it her intention to sever? (e.g. could have used a known severance if that was her intention) (2) the consequences to others if there is a severance.
SEVERANCES:
Mutual agreement by jts to change into TIC Involuntary conveyance: creditors can seize and sell a jt’s interest Partition action: jt can bring partition action to the court (court acts as the strawman) A jt can unilaterally convert a JT into a TIC by conveying his interest to a 3rd party. Minority Rule: A may unilaterally sever a JT by conveying to her interest to herself.
Policy For (let ppl do it themselves w/out having to use a lawyer)o Some juris allow creation of jt by direct transfer => conveyance from sole owner to
himself and to others creates a JT. o Already allowed other “creative” methods to get around the rule against the same
person being grantor & grantee (e.g. strawman - 3rd party; one jt’s creation of a “declaration” to sever JT; trust to son w/ promise to get it back)
o If jts want to create an indestructible right of survivorship have other means: - create joint LE with CR in FSA to survivor- create TIC in FSS to EI; with survivor holding EI
** A juris (like CA) might allow self-conveyance as long as there is some notice. Policy Against: o NO notice (using a straw helps to create notice) o Reliance concern: will someone be retroactively affected? o Possible unfairness: A coveys to herself, but if B dies first, destroys the evidence
Common Law: if A, B, C and jts; A => D; B & C still jts as to each other; D = TIC for the 1/3rd. (can have one ppty with both JT and TIC -- picture each molecule of land as JT and TIC).
Comparing TIC and JT: Common law: Both tenants in common and joint tenants have the same possessory
interest (rights to possession of the whole) Deviation: by tax law, a joint tenant can be said to have more due to survivorship right
and possibility of getting the whole. Differences: Right of survivorship => only by JT Unequal shares => by common law only TIC could have unequal shares, but now,
many juris have this as a starting presumption, but allow jts to have unequal shares according to their intent (e.g. their share is equal to their contribution). (p. 344)
Encumbrances: General background rule: If one joint tenant has an encumbrance on his interest, and later dies, the right of survivorship destroys this encumbrance.
Creditors Reach of JT: Mortgage: a security on ppty given to a lender for a debt owed. If the debtor fails to
pay, the lender can have the ppty held under the mortgage sold to pay the debt. o If a mortgaging jt becomes the surviving jt, he will have to give as much of the ppty
that will fulfill his debt (can end up being more than 50%) Mortgage as Lien Approach: If one jt gives a mortgage on his interest in the JT, this is
merely a “promise to pay,” and does not sever the unity of title and destroy the JT [Harms, p. 353]
o Additionally, if the mortgaged jt dies, the mortgage does not survive as a lien on the surviving tenant’s ppty (because ppty right of the mortgaged jt is terminated at his death). [Harms, p. 354]
Policy for this approach: creditors have the means to ensure that all jts sign onto the mortgage
o Another possibility: surviving joint tenant takes the ppty but w/ the encumbrance. Policy for this approach: this may protect “kind-hearted ppl” who may extend
credit in situations where big creditors won’t. Mortgage as Title Approach (common-law/minority rule): a mortgage is a conveyance
of a legal estate vesting title to the ppty in the mortgagee (lender), so a mortgage by one jt severs the JT. (p. 353)o Temp Title Approach: conveyance of the title is only temporary (title passes to the
mortgagee only for purposes of securing the debt); so when debt is paid, the JT is reinstated (p. 645.note 19; class 10/7/03)
Leasing of JT: Common law: after a lease, the tenants have diff interests (lessor = reversion in the
ppty; other jt = fee simple) so JT is severed. General rule: if one jt leases the ppty, and later dies, the lease expires. Same as the creditor rule, both creditors and lesseess are on notice to deal with both (or
all) owners of the ppty. Note, this could be handled in other area of law like contract law.
Joint Tenancy Bank Accounts: O deposits $5000 in a joint and survivor bank account with O and A as joint tenants.Depositor’s intent: What was O’s intention? “true JT bank account”: A gives one-half of the sum in the account + survivorship
right to the whole sum. “payable-on-death”: A has only survivorship rights. (not allowed in some juris because
basically a will). “convenience account”: A only has power to draw on the account to pay O’s bills and
has no survivorship rights. Agreement with the Bank: Bank agreement usually says O or A has the right to
withdrawal all money in account during their lives, with balance going to the survivor (from Bank’s perspective the bank is safe in paying all money on deposit to any jt or to the survivor -- has little risk).
But bank agreement usually not controlling, more important is the depositor’s intent. Majority rule: surviving jt takes the sum unless there is clear and convincing
evidence that a convenience account was intended, with the burden of proof on those challenging the jt.
Other juris: presumption of survivorship rights is conclusive -- prevents litigation. Present rights: o Majority rule: during the lifetime of the parties, presumption that each jt has a
share in the sum equal to its contribution (can be overcome with clear and convincing evidence of diff. intent).
If O deposits in all the $, and A withdraw $ w/out O’s permission, O can force A to return the amount withdrawn.
o Minority rule: during the lifetime of the parties, each jt has equal shares. Creditor’s Reach: Usually creditors can reach real assets = home + bank accounto A creditor is only entitled the amount of debt owed. o If A and B have joint savings account of $10,000, how much can A’s creditor’s
reach? o Possibilities: o A’s creditor can reach is A’s contribution to the account (Modern rule)o A’s creditor can reach half of the account (CL rule held in equal shares)o If it was B’s money and A only had convenience privileges, A’s creditor may not be
able to get anything. o If A only had survivorship rights, A’s creditor may get nothing during his life.
--------------Tenancy by the entirely: created only in husband and wife. Note: TBE not available in all juris. Same 4 unities of JT + Unity of marriage Right of survivorship.
Termination of TBE: Only divorce terminates a TBE (divorce breaks unity or marriage):
usually TBE => TIC Partitioning CANNOT be used to terminate TBE Both people have to agree to sell (neither husband of wife can act alone). One tenant
cannot defeat the right of survivorship of the other by conveying to a 3rd party. Have to convey together, have to bring action for a judicial partition together.
Creditors reach of TBE: Majority rule: the interest of a spouse in a TEB is not subject to the claims of his/her
individual creditors during the joint lives of the spouses (one spouse cannot assign his/her interest). [Endo, p. 386]○ Policy: creditors can protect themselves; protection of family -- when a family can
afford to own really ppty it becomes its most important asset, so long as the ppty remains whole during the joint lives of the spouses, it is available for the use and benefit of the entire family.
Alt rule: the creditor steps into the debted spouse’s shoes, the creditor has possessory right and right of survivorship.
Alt rule: the creditor gets the debtor’s right of survivorship (the other spouse retains exclusive use and possession of the ppty during his/her lifetime; though can’t convey, likely can’t rent or get mortgage) ○ 1500 Lincoln Ave used this rule (or the first alt. rule). Although the gov was the
“creditor.” H was found guilty of using the TBE ppty for drug use -- federal law required forfeiture of the ppty. (p. 396)
○ Policy: the court in 1500 Lincoln could have said could get H’s interest if W dies. But the issue of time delay and difficulty of establishing proof was imp.
Marital/Community Property: Also restricted to married people Form of holding ppty that restricts one persons ability to use outside of marriage Married ppl are encouraged to take as comm. Ppty over joint tenancy because there are
nice tax benefits. Juris may vary in their definition of marital ppty (e.g. only the furniture the spouses
used together vs. both spouse’ earnings throughout the marriage)
Concepts? Alimony: first connected to fault-based divorce and the concept that husbands should
continue to support their wives. Conditioned on fault.
Maintenance: support payments from the financially more able person. Enough women had enough earning capacity, there were cases were former wives would be paying maintenance to former husbands. Unusual, continue to be in the minority. ○ Sometimes husband goes first gets degree, than the wife goes second to get her
degree - continuing equity might be ordered. Conditioned on the economic disparity between the two parties.
Rehabilitative alimony: Concept is that the person who has the lower-income potential needs time to become adequately competitive in the job market. The partner who is already there (competitive in the market) pays to give the other person help to get up to speed.
Reimbursement alimony: means to compensate a supporting spouse who suffered a loss or reduction of support, incurred a lower standard of living, or deprived of better standard of living in the future due to his/her support. (e.g. spouse who contributed financially to spouse’s education can recover all financial costs including household expenses, educational costs, etc). (p. 407)
Equitable Distribution of Marital ppty: What is considered marital ppty subject to division? Educational degree NOT marital ppty (majority view): M.B.A. has no exchange value
on open market, terminates on death of holder, cannot be assigned, sold, transferred, conveyed, or pledged. [Graham, p. 403]○ Similar case decided reimbursement alimony was sufficient to repay spouse.
Educational degree IS marital ppty (minority view): interest in a profession or professional career potential is marital ppty which may be represented by direct or indirect contributions of the spouse, including financial contributions and nonfinancial contributions made by caring for the home and family. ○ Court rejected reimbursement alimony because it would be limited to money
contributed, without consideration for the incremental value in the asset because of its price appreciation.
○ Similar case: extent to which W’s career appreciated due to H’s efforts, this appreciation = marital ppty. H made direct, concrete contributions to W’s career, and cared for the family.
Court emphasized looking at the nature and extent of the contribution by the spouse seeking equitable distribution, rather than the nature of the career (thing being considered as marital ppty).
Critique: by treating professional degrees as marital ppty and valuing the degree in terms of the lifetime capacity of the spouse, counts the professional’s accumulations twice (spouse 1 gets cut; so does spouse 2, etc)
Prenups: okay as long as the agreement is fair and reasonable, and/or based upon full knowledge of each other’s ppty.
In CA: rule for 50-50 division for comm ppty.
Issues between Co-Owners: Background Rule: each cotenant has the right to possession of the whole.
Issue: When one cotenant is in possession of the whole does he owe the non-possessing cotenants rent? General Rule: In the absence of an agreement to pay rent, or an ouster of a cotenant, a
cotenant in possession is not liable to his cotenants for the value of his use and occupation of the ppty. [Spiller, p. 370]
Minority Rule: cotenant in exclusive possession must pay rent to cotenants out of possession even in the absence of ouster.
Issue: What constitutes ouster? Ouster is used to describe two fact situations:
(1) the beginning of the s.o.l. for AP and (2) the liability of an occupying cotenant for rent to other cotenants.
Both situations require different elements of proof to support a finding of ouster. o Juris don’t have to equate the two uses of ouster. o If you have assumption that cotenants can trust each other, needs to be very clear
when cotenant is trying to “oust you.”o If you think cotenants don’t really have a right to trust eachother, may require lower
level of ouster. For AP ouster: ouster is when occupying cotenant asserts a claim of absolute
ownership and denies the cotenancy relationship. o strength of the ouster is a concern if used as entering point for AP.
For Rent ouster: occupying cotenant refuses a demand of the other cotenants to be allowed into the use and enjoyment of the ppty. o Refusal of a letter demanding the occupying cotenant to vacate or pay rent is not
sufficient to show ouster (letter didn’t demand equal use and enjoyment). Neither is simply changing the locks on the ppty (no intention to exclude cotenants, no request for keys). [Spiller, p. 371]
Generally cotenants do not have fiduciary duties to each other (each tenant looks out for himself) (p. 372) o Courts may treat family members as having fiduciary with respect to each other =>
occupying cotenant may only be able to claim AP where his claim is so unequivocal and notorious it puts his cotenants on actual notice.
Issue: When a joint tenant leases to a third-party without the consent of the other cotenants, can the other joint tenant cancel the lease? General rule: No. The lease is valid. Each joint tenant may lease his share of the ppty. Remedies for the non leasing cotenant: Partition (but would terminate her right of survivorship) Ouster: the cotenant could enter, or try to enter into possession with the leasee. If the
leasee resists, there is an ouster and the cotenant could get from the leasee one-half the reasonable rental value of the leased land. (p. 379)
Accounting: cotenant can sue for an accounting of the rents received by him.
Accounting General rules and accounting (although may be adjusted in the name of fairness): (p. 380) Rents and profits: a cotenant who gets payment from third-parties he must account for
net rents, royalties, and other proceeds in excess of his share (e.g. if have 50% share in the ppty, must give other cotenant 50% of the rent)○ Absent ouster, the accounting is usually based on actual receipts, not fair market
value. Taxes, mortgage payments, and other carrying charges: a cotenant paying more than
his share of necessary carrying charges generally has a right to get contribution from the other cotenants, at lease up to the amount of the value of their share in the ppty. ○ In accounting can get a credit for the excess payments for the carrying charges. ○ Possible exception: If the tenant who paid the carrying charges has been in sole
possession of the ppty, and the value of the use and enjoyment which he has had equals or exceeds such payments, no right to contribution. (inconsistent with rule that cotenant in possession need not give other cotenants rent).
Repairs and improvements: generally, in the absence of an agreement, cotenant making or paying for repairs, or making improvements has no affirmative right to contribution from cotenants. ○ Can get credit for reasonable repairs in a partition or accounting action. ○ CANNOT get credit for cost of improvements in partition or accounting action. ○ However, the VALUE of the improvements is evaluated, usually improver has to pay
for the decreased value if the “improvements” diminish value (owes FMV loss to other tenants) but if increases the value, gets this benefit. (p. 381)
○ But generally the interest of the improver are protected if it doesn’t hurt the interests of other cotenants (e.g. if physically divided, improved portion can be awarded to improver if fair; if no physical partition, when the proceeds of the sale are divided, the improver gets awarded the added value (if any) from his improvement. Alternative remedy: where physical partition is possible but would hurt the
interest of the improver by awarding improvements to other cotenants, can have the cotenants pay owelty to the improver for the enhanced value of the ppty from the improvements.
Waste: Remember in US, generally something is not waste if it is an improves value of the ppty. One cotenant may claim waste against other cotenants (p. 380, note 15) A out of possession cotenant may sure a leasee for waste.
Keep in mind that the criteria for waste can be diff due to the relationships of the parties (e.g. lease is short term, may be waste if leasee doesn’t return ppty in the same condition).
When working through fact issues: (1) what are the characteristics of the type of ppty? (2) what is fair? (3) what were the intentions of the parties?
------------Landlord Tenant
The Lease Lease = conveyance + contract
○ Conveyance because it transfers a possessory interest in land○ Contract because it contains a number of promises (covenants)
Statue of Frauds requires any lease for more than 1 yr must be in writing. (p. 458)○ Most juris permit oral leases for less than 1 yr.
Stipulates an ongoing relationship between LL and T.
Types of Tenancies Term of years: estate that lasts for some fixed time period (no matter how short/long).
○ Some juris (like CA) limit the duration of years. ○ Termination: determined from the outset, no notice of termination necessary (p.
446) Periodic tenancy: lease for a fixed period that continues for additional period.
○ Will continue renewing until it terminates. ○ Termination: either LL or T gives notice of termination. (p. 446)
Common Law Notice Requirements (p. 446):▫ For yr to yr tenancy => ½ yrs notice▫ Any tenancy less than yr => notice = time period (but not to exceed 6 months)‾ Notice must terminate the tenancy on the final day of the period.
Modern Law -- many states have: ▫ shortened the length of notice ▫ allow termination of a month-to-month be any time following 30 days notice
For both Term of Years and Period Tenancy: ○ Death of LL or T has no effect on the lease (residential lease may end on death of T)○ Unilateral power to terminate may be put explicitly in the lease.
Tenancy at Will: no fixed period, either party can terminate at any time. ○ If the lease says it can be terminated by one party, the other party is necessarily given
the right to terminate too, or it is not a tenancy at will A lease terminable by only one party is not a tenancy at will .
○ Termination: Common Law: T could just leave. Modern Law: notice requirements. But in some juris the notice the LL is required
to give is longer than the notice required for T.
○ Death terminates the lease. Ambiguity of leases => evaluate the intent of the parties.
○ “at an annual rent of $24,000 payable $2,000 per month on the first of each month” term of years or period tenancy (month to month)?
○ “starting on this date, the term will end when T wants to” LE (which can be cut short at T’s option) or tenancy at will?
Fair Housing Act Some juris go beyond FHA, some states rest at FHA. Only deals with residential housing
○ Can be complicated when building has both commercial and residential space Prohibits discrimination from all ppl involved in housing (brokers, housing financers,
realtors, salesmen, etc) Remedies = injunctive relief, damages (including punitive) Prevents discrimination of any person because of: race, color, religion, sex, familial
status (concern for families with children), national origin, or handicap. Handicap = established by evidence of a physical or mental impairment which
substantially limits one or more of the person’s major life activities, does not include current, illegal use of or addiction to a controlled substance. ▫ Handicap = alcoholism, person previously convicted of drug use, AIDS,
overweight person doctor describes dog to help walk and lose weight ▫ Must make reasonable accommodations, reasonable modifications for handicap.
○ If LL discriminates against all people with x, where x is a proxy to discriminate against one of the protected classes => violation of FHA.
○ Conduct that affects “whether someone will feel welcome or not” => discrimination Standard: whether ad or statement suggests to an ordinary reader [or listener] that
a particular class of ppl is preferred or not welcome for the housing. ▫ Intent of the person making the ad or statement may be relevant to determine the
message conveyed especially when dealing with isolated words (as opposed to a series of ads or an extended period of conduct). (p. 473)
Prevents public communication of discrimination○ NO printing, publishing, or advertising that indicates any preference, limitation, or
discrimination involving any of the protected classes of ppl. Exceptions to FHA:
○ Senior citizens for certain classifications. ○ Single-family home sold or rented by owner○ Dwellings with fewer than 4 units where owner lives in one of the units. ○ Exceptions may discriminate (i.e. if the undesired person actually comes to the door)
but may not publicly communicate this discrimination (can use professional assistance like attnys to do deals).
FHA is applicable throughout the tenants stay (i.e. does not cover just getting the apt) Ways for LLs to ensure not violating FHA
○ Follow the same protocol for all prospective tenants. ○ Can make legitimate decisions to avoid certain tenants.
e.g. legitimate to avoid noisy children, but not okay to say children = noise Violations of FHA
○ Realtor company uses only white models to advertise ppty. Can be violation when it is shown to be a long term practice. ▫ Targeted marketing may be allowed (e.g. realtor put in additional ads accessible
to whit purchasers about homes in predom. black neighborhoods, okay because wasn’t exclusive)
○ Race preferences to try to keep a diverse population (i.e. to prevent “white flight”) Violation because in effect gives or does not give apt based on race. ▫ Quote system may be allowed in particular situations (e.g. if housing complex
had history of discrimination, for a specific period of time, may have to give preference to ppl they discriminated against -- but can’t exceed a reasonable period)
Procedure of FHA Claim (p. 469)○ To make a prima facie case for discriminatory housing refusal plaintiff must show:
(1) member of a protected class(2) who applied for and was qualified to rent or purchase housing(3) and was rejected although the housing remained available* needs to show discriminatory effect, NOT discriminatory intentThis establishes a rebuttable presumption of discrimination.
○ Defendant can then explain his motivations (e.g. was for a rational and necessary business purpose). If D does not present evidence, P wins.
○ P can then show D’s reason for denying was a pretext for discrimination (pretexual). Court is skeptical of subjective rationales concerning denying housing. Objective
evidence best to show nondiscriminatory conduct. If P can show a pattern of conduct, can be successful at a lower threshold.
Example of NONdiscriminatory housing refusal: ○ D asked whether P had children and whether they were noisy, P denied housing. D
showed that she asked because there was an elderly couple in the duplex she did not want disturbed. D’s conduct toward testers corroborated this reason. [Soules, p. 473]
○ LL provides housing application is the 4 most common language in LA. Economic justification for identifying greatest percentage of possible tenants.
Example of Discriminatory housing refusal (p. 475):○ LL rents to single woman and then starts harassing her with demands for sexual
favors. ○ LL refused to rent to a heterosexual couple because they are unmarried.
Possible issues: ○ Common area - white supremacy group wants to use it. Arg for FHA -- can say
proxy to discriminate for religious belief. What can LL do? ▫ Foreclose speech: common area can’t be used for any religious events of any
description (means christmas parties are out, holiday parties are in). ▫ Encourage speech: inform tenants FHA requires me to behave in a way that
doesn’t discriminate against religious beliefs, you and everyone else are welcome to use the common area.
Delivery of Possession: Issue: what happens when new tenant comes to move in and previous tenant is still there? Absent an express covenant as to the delivery of possession in the lease: Under the English rule: in the absence of an express covenant, there is an implied one
which requires the landlord to put her in possession. LL has duty to make sure that the apartment is ready for T’s entry. But this doesn’t extend beyond the day her lease term begins. ○ If holdover tenant:
T is not bound by the rental agreement, she may terminate the lease. T’s remedy is against the LL. She can sue LL for damages ▫ T can keep lease, wait it out and not pay for rent for this period of non-
occupancy and collect appropriate damages.▫ Or terminate lease completely and collect damages.
Under the American rule: If no express covenant, LL has no duty to put T in actual possession, only in legal possession. ○ If there is a holdover tenant.
T is bound by the rental agreement (i.e. she can’t go elsewhere). T’s remedy is against the tenant that is holding over. She can sue holdover tenant
to recover possession and collect damages (for costs of period of non-occupancy). If there is was an express covenant as to the delivery of possession in the lease.
○ Then the landlord breached the contract, and she isn’t bound by it, and could go rent another place.
Note, a lease could have an express covenant that LL is not responsible for delivery of possession. Then, even under English Rule, wouldn’t be responsible. ○ express covenant would put tenant on notice, T would know risk but could bargain
for lower rent. English rule justifications:
○ More reasonable and proper to place the burden upon the landlord because he is in better position to know if tenant in possession intends to hold over.
○ Tenant would have to rely on landlord’s testimony… American rule justifications:
○ Tenant has options. Get the landlord to put it in writing that he will put her in possession.
○ Tenant has a greater incentive than the landlord to use the available remedies. A juris may have English rule for one type of lease class, and American rule for
another (would depend on how much the class needs protection). ○ Consequence of “protecting” tenants is possible loss of privacy (from LL having
more responsibility).
Subleasing Sublease: transaction where the tenant grants an interest in the leased ppty less than his
own (in duration) but retains a reversionary interest in the lease (right to possession reverts back to him).
Assignment: The tenant substitutes the assignee for himself, meaning he conveys his full interest in the leased ppty (remainder of its duration), and has no remaining interest or reversionary interest.
Common Law (still most common): completely based on the words in the lease, if the tenant transfers his estate for less than the remainder of the term (even a day less) => sublease ○ Only if specifically for the ENTIRE remainder of the term => assignment. ○ NO consideration of intention.
Modern Rule: Evaluates the intention of the conveyance in light of the circumstances. Sublease or Assignment? Iffy Areas:
○ If the original tenant (lessee) transfers all of his interest in some physical part of the premises => partial assignment.
○ If the leasee transfers his entire interest but retains the right to terminate the arrangement and re-take possession if the transferee breaches an obligation of the lease (leasee holds the power of termination or right of re-entry) => some juris. say sublease.
○ LL has lease with T1 to pay rent of $1000 a month, T1 assigns to T2 the remainder of the term, but rent of $600 a month. Could say sublet since T2 didn’t have notice Could say assignment (T2 could have checked records) By common Law = assignment Modern Carve-out: No assignment because T2 didn’t take all the conditions.
Privity of estate = legal relationship in the same piece of land○ The use of the words “assignment” and “sublet” can be factors ○ LL owns ppty and T has possessory rights.
Assignment TRANSFERS privity of estate (LL can REACH you) Sublease does NOT transfer privity of estate (LL can NOT reach you)
○ HOWEVER if T2 expressly binds herself to the primary lease T2 has privity of contract with LL, LL can REACH her.
Assignment does not affect privity of contract held between LL and assigning T. ○ LL <==> original T (share privity of contract and estate)○ T <==> T2 (assignment TRANSFERS privity of estate)○ LL <==> T2 (now share privity of estate)
At this point: LL can sue T for privity of contract that T will pay rent, and can sue T2 for privity of estate.
○ T2 <==> T3 (assignment TRANSFERS privity of estate)○ LL <==> T3 (now share privity of estate)
At this point: T1 has no connection to LL. LL can no longer get him for anything. ○ T3 <==> T4 (sublet NO transfer of privity of estate)○ LL <==> T3 (STILL share privity of estate)
Common Law: LL could only sue original T for privity of estate or privity of contract. Modern Rule: If it is a matter of rent, LL can collect from tenant any rent he defaulted
while still under privity of estate. Options to see if LL can REACH subsequent tenants:
○ * BEST: LL can always have every subsequent tenant sign a separate contract. Ensures privity of contract with each tenant.
○ T can get T2 to expressly bind to the primary lease Won’t relieve T of his liability, but will give T remedy against T2 if he defaults
(even if T2 transfers to somebody else). LL can go after T2 for the period he was in possession.
○ See if LL can be a third party beneficiary of the contract between T and T2. Effects of the primary lease terminating:
○ If the LL forfeits the lease because the original T breached an obligation LL is entitled to possession against any subleasses and assignees
○ But if the original T “surrenders” the lease (voluntarily gives up the primary lease) Rights of possession of subleasees and assignees are not affected. ▫ Though a subleassee then has privity of estate with the LL.
Collecting rent: General Rule: LL can sue for rent any person who is either in privity of contract or privity of estate.
CONSENT For a COMMERCIAL lease, what are the rights of a lessor (LL or T) to consent to a
lessee’s subsequent assignment? Approval clause = the lease provides that the leasee cannot make an assignment
without the consent of the lessor. ○ Possible exception:
Rule in Dumpor’s Case: If the LL consents to assignment, unless he reserves the right to prohibit future assignments, the approval clause is terminated. (p. 500)
Majority rule: When lease contains an approval clause the lessor may refuse to approve a proposed assignee for ANY reason (i.e. can be arbitrary, unreasonable, etc)○ Possible twist: some juris say that the lessor can refuse a proposed replacement, but
if the tenant then abandons the ppty, LL has to mitigate damages (ends up coming out a lot like the majority rule).
Minority rule: When a lease has an approval clause, notwithstanding any provisions to the contrary, the lessor can withhold consent only for a commercially reasonable objection to the assignment. [Kendall, p. 497]○ EXCEPTIONS:
A lease can explicitly prohibit any assignment of subleases. Parties can make their own explicit arrangements▫ Termination and recapture clause: T before assigning or subletting, had to
provide LL with written notice identifying the proposed leasee and specifying the terms, LL could then terminate lease with T and enter a new lease with proposed leasee, and did not need to share any profit from this termination and relet with T (p. 497)
Lease is based on a base rent + profit sharing => gives LL more control (more room to find an out). ▫ This is often done in situations we want to support (e.g. LL wants to encourage a
certain business, can use this arrangement to give support with the hope that it will pay off).
NOT commercially reasonable excuses: reasons based on personal taste, convenience, sensibility, or trying to get more rent. Not based on protecting the lessor’s interest in the preservation of the ppty and the performance of the covenants (ownership and operation).
Commercially viable reasons: financial stability, suitability of proposed use, legality of proposed use (e.g. legal conduct, zoning rules)○ “desire for good tenant mix” in shopping center, desire for “one lead tenant” to
preserve the image of the building as tenant’s international headquarters, belief proposed specialty restaurant would not succeed at the location” (p. 495).
Policy reasons for minority rule○ Policy against restraint on alienation○ Conveyances as contracts implies duty of good faith and fair dealing○ Commercial diff. than residential (parties have better resources, presumed equal
bargaining power). ○ Need for commercial space
Polices reasons for majority rule○ Parties could have negotiated for this provision○ Leasor should only have to look as far as the leasee for fulfillment of obligations
Starting Point: If the standard is high (LL can say no for a lot of reasons) you are saying to T that she bears the burden to contractually pull the standard down towards (“anybody will be okay”).
DEFAULT ISSUES: Situations: T doesn’t pay rent, fails an obligation, or holdsover (stays past lease) or
abandons => LL wants to re-take possession. REPOSSESION: Common Law: T may recover damages for wrongful eviction where the LL either had
no right to possession or where he used forcible means to remove T (or both). ○ LL can use self-help as long he doesn’t use more force than reasonably necessary.
Note, that “reasonably necessary” could be such a strict standard that self-help may not a practical alternative.
Alt Rule: LL can NEVER use self-help to dispossess a T who is in possession and has not abandoned or voluntarily surrendered the ppty. [Berg, p. 505]○ Some juris may apply this rule to both commercial and residential, our only just
residential. ○ Summary proceedings are only for recovering possession, rest of stuff must go
through regular process (e.g. recovering rent) If T has a defense (e.g. implied warranty of habitability, not all states let T bring
this during the summary proceeding). (p. 508)○ Policy concern for preventing violence
Speedy means are provided for removing a tenant peacefully through judicial process.
ABANDONMENT Common Law: LL under no duty to mitigate damages upon T’s abandonment. (can sit
with a vacant apt and allow damages (i.e. unpaid rent) to accumulate).
Alt Rule: LL seeking damages from a T who wrongfully abandoned has a duty to mitigate damages by making reasonable efforts to re-let the apartment. [Sommer, p. 509]○ LL bears the burden of showing he made reasonable efforts (in better position)
Exps: offered or showed apt to ppl, advertised it. By Sommer, LL must treat abandoned apt as any of his other vacant apts.
○ T bears cost of the reasonable expenses (and may have to pay diff in rent) Though if T abandons in an upswing, LL should just accept abandonment, just in
case T tries to incur upswing profit (though would be very difficult)○ T can rebut the evidence by showing that he offered suitable tenants that were
rejected. ○ All based on the facts…
Exps: ▫ LL does not need to accept to anything less that fair maker value▫ Demand for much higher rent, must be based on objective reason (i.e. dependent
on the market, can’t be just trying to make it harder). ▫ LL must continue to mitigate (T will eventually bear the cost)
○ Based on idea that lease is a contract - means good faith, fairness, equity. ○ Consequences of NO mitigation:
LL may not collect owed rent accrued after the abandonment (lease effectively terminated)▫ Or, LL may recover the diff between the agreed rent and the amount of loss he
could reasonably have avoided. (p. 518) Surrender: If T offers to give up tenancy (surrender) and LL accepts T’s offer, T is
no longer liable for future rent (though still liable for money already owed). Issue: what constitutes acceptance of the surrender?
○ Explicit agreement: if Statute of Frauds complied (in writing) => no ambiguity○ Could be silence (no action..)○ If LL enters the apt (can be seen as accepting abandonment)
LL must make it clear she is ONLY entering▫ Note, LL can be used for harassment if entry not reasonable (for the tenant, for
the ppty, etc)○ Usually turns on whether the INTENT of the LL is to retake possession, without
regard to whether T has any notice that he has the burden of paying for reasonable reletting efforts. (p. 517)
CONSENT & ABANDONMENT: (1) Common Law (NOT used anywhere): LL no duty to mitigate and no duty to
accept substitute tenants. ○ Tenant real loser here.
(2) LL has no duty to mitigate damages; LL has duty to accept substitute tenant (must be reasonable commercial objection). ○ T has full responsibility to find a substitute for herself. LL only need to entertain her
possibilities. ○ This says LL was not the wrongdoer here, all the flow through costs of breaking the
contract should be borne by T. T should have to clean up the mess.
(3) LL has a duty to mitigate; LL has no duty to accept substitute tenant (arbitrary refusal okay). ○ LL largely bears the responsibilities. ○ LL has to help find a substitute tenant. All depends on whether LL was reasonable
in looking. End result, LL can’t complain of the substitute tenant (picked himself). (4) LL has duty to mitigate; LL has duty to accept substitute tenant (must be
reasonable commercial objection). ○ Shared responsibility of damages created by tenant. ○ If LL must accept substitute tenant, if T doesn’t go out and mitigate their own
damages, then the court won’t want to hear that LL didn’t mitigate. Possible to use diff rules depending on why T leaves.. (e.g. presumption that LL has
duty to mitigate, unless [some exception]…)
LL’S REMEDIES: Rent and damages: LL has right to sue for back rent and damages for breach of the
lease obligation. If T is in possession => LL can terminate lease and recover possession. ○ + the present value of the of the diff between unpaid rent and reasonable rent value
of the ppty for the remainder of the lease (in some juris). Security devices:
○ Security deposits (possible provisions: limit, must be placed in trust, LL must submit itemized list of deductions, penalties for abusing this) Some LLs collect “security deposits” as other things (e.g. advance rent, liquidated
damages). ○ Rent acceleration: upon T’s default, all rent for the term is due and payable.
But LL can’t usually take possession as well (double-dipping). ▫ Unless, the lease specifically provides LL may terminate and hold T liable for
future rent.
CONDITIONS Common Law: T took premises “as is.” Covenant of Quiet Enjoyment: for commercial leases, res or both??? Modern rule: If express covenant of quiet enjoyment (either express or implied) is
breached by LL => T has remedies. Covenant of QE: use and enjoyment of the ppty. LL is responsible for anyone under his legal right breaching this covenant of QE (i.e.
can be another tenant)○ constructive eviction : ppty is substantially unsuitable for the purpose for which it
was leased, or seriously interferes with the beneficial enjoyment of the ppty. lease terminates, can leave no liability for future rent, and may be able to recover
damages for losses while in possession and losses resulting from higher rent in equivalent replacement place. ▫ Justification: It is so bad, it AS IF the tenant had been evicted…
T’s right to constructive eviction is waived if not exercised in a reasonable time (depends on circumstances, some leeway considered difficult to leave)
Substantial breach occurs when premises is Condition does not need to be permanent as in constant, but can regularly occur
○ Lesser breach: an interference with use and enjoyment (like excessive noise) T can’t just stop paying rent, must give LL a chance to fix the problem. T may stay in possession and sue for damages equal to the value of the ppty with
and without the breach (p. 531)○ “Partial breach”
Some juris allow for practical constructive eviction (withholding of part of the rent if only part of the ppty is unsuitable for use).
For diff types of lease => flowthrough of QE can be diff.
Illegal Lease: Defect had to have existed at the time of the lease. Substantial probs (minor technical violations don’t count) LL had to know or should have known (i.e. constructive notice) TT has to pay the rent and sue the LL in damages (have to sue independently).
Implied warranty of Habitability: This DOES NOT override Covenant of QE or Illegal lease, NOT in all juris, and even
in juris that have it may not apply to all residential leases (e.g. single-family homes might be excluded), and also likely not applied to commercial leases.
For any residential lease (oral or written), there is an implied warranty that LL will deliver and maintain throughout the lease, premises that are safe, clean and fit for human habitation. (p. 537)○ CANNOT be waived by any written provision in the lease○ Applies to all tenancies for a specific period, or at will.○ Covers all latent and patent (visible) defects in the ESSENTIAL facilities of the
premises Any facilities vital to the use of premises for residential purposes. A tenant’s actual knowledge of a defect in the essential facilities cannot be said to
have assumed the risk. ▫ Also covers facilities in common area that affect the health and safety of tenants
(e.g. stairways) To determine whether there has been a breach of IWH can look to:
○ Usually determined by whether reasonable person thinks it is inhabitable. ○ Relevant local or municipal housing codes
A substantial violation => prima facie evidence of a breach. ▫ But minor violations alone that don’t affect the health or safety of the tenant
don’t constitute a breach. ○ Minimum housing standards○ * Inquire whether the claimed defect has an impact on the health of safety of T.
Procedure for claim of IWH breach: ○ T must show gave LL notice. ○ T does not have to leave○ Possible Available Remedies: ○ Affirmative Action: For T who has remained in possession and paid rent
=> Compensatory damages: amount will depend on the nature and extent of the breach.
○ Defense: T can remain in possession and withhold future rent (burden on LL to bring suit for back rent and possession): T must show in her defense to a summary eviction action: ▫ LL had notice of the previously unknown defect and failed in a reasonable time
to repair it. ‾ If T fixes on own, can deduct the expense from future rent.
▫ The defect, affecting habitability, existed during the time rent was withheld. ▫ The amount of rent LL eventually gets will depend on the nature and extent of
the breach. ○ Termination: T can leave and sue for damages. (constructive eviction)
Calculating Damages: ○ Differences in how to calculate the amount of the breach:
FMV as warranted - FMV as defected (premises up to code v. defective) [Hilder]▫ But FMV difficult to determine, also can be said the rent = FMV.
Formula: (what would anyone pay for this dump)▫ Agreed rent - FMV as defective ‾ primary purpose is to stop LLs from charging a lot for the defects.
FMV as warranted - “agreed” rent○ Note, FMV is difficult measure because it incorporates more than condition of the
premises. ○ Calculations will largely depend on your PRIMARY PURPOSE. ○ May get damages for T’s discomfort and annoyance. ○ In all cases, special and consequential damages should be awarded
Punitive damages may be available for (but rare). Juris may have diff. variations of remedies. If extended to commercial leases, the standard would likely be unfit for carrying out
business. Implied Warranty of Suitability. Note, juris implementing IWH would require transition rules (timelines put on
legislation to put policy in place, time for LLs to respond, etc).
Retaliatory Actions by LL: Common approach: rebuttable presumption of retaliatory purpose if the LL seeks to
evict, increase rent, or decrease services within some given period (e.g. 90-180 days) after a good-faith complaint or action by T for condition of premises. After period, T bears burden of showing retaliatory purpose.
Exp: cov. of QE: ○ In juris where LL is responsible for quieting other tenants, and T keeps complaining
of this the she has a legitimate reason.○ But if the juris doesn’t’ place the responsibility on the LL, then T is not right in
constantly bringing it to the LL (no legitimate reason).
From a t’s advocacy group how have we burdened the LL?
Delivery of possession LL must be reasonable in accepting substitutions
○ Reasonably accepting offers/substitutions comes into everything (e.g., mitigation damages)
○ How you define reasonability puts a burden on LL to keep reviewing. When t abandons - L may have to use judicial process When t defaults - LL may have to mitigate damages LL’s responsibility to maintain premises
Tenant advocates may have to pick and choose which areas they want to fight for. E.g., may want to decide that not allowing LL to use self-help is most important.
-------------------SERVITUDES
Easements Affirmative Convenant Negative CovenantInterets in land Contracts attached to land
○ Affirmative Easements: Servient owner gives the right to enter and do something on his land.
○ Negative Easements: forbids one landowner from doing something on his pppty that might harm his neghbor. These are RARE.
* Appurtenant to land (preferred)Easement in gross
○ affirmative promise (a promise to do something)○ negative promise (a promise not do something)
Created by: WritingEstoppelPresciptionImplicatoin by Prior UseImplication by Necessity
Created by writing only Created by writing or by implication in certain circumstances (i.e. subdivisions)
RUNS to all sucessors of the land because it goes on forever…
Running of Burden: HP and VP required
Running of Benefit
Running of Burden: No privity required
Running of Benefit:
VP required
Intent NoticeT&C
Remedy: Damages
May require VP (but not in most states)
Intent NoticeT&C
Remedy: Injuction
Requirements: ○ Negative convenats are like easements for successive
purposes (low burden) A promise not to do something runs to ALL
subsequent owners and possessors of the of the burdened and benefitted ppty.
○ Affirmative convenants (heavier burden)▫ VP required for benefit to run (limits those who
are burdened…)▫ Burden runs if reasonable to successors‾ BURDEN runs to APs‾ The BURDEN runs to life tenants (but liability
is limited to the value of the LE). ‾ Lessees must perfoom only the convenants
that are more reasonably performed by the lessee than the LL.
○ Notice○ Intent○ Presumed valid, will cut if off if it violates public
policy (replaces T&C).
The law of Servitudes: Servitudes: land use restrictions that controls their particular piece of ppty. Historical creation: olden days communal land, in modern times of individual ppty,
need to define rights of way, interdependent land us. REMEMBER => legal system and society has preference for UNencumbered ppty.
Restrictions affect marketability. Generally involves two or more pieces of ppty with the purpose of INCREASE total
value of all ppty involved (usually neighbors or subdivisions) Usually one parcel is burdened for the benefit of another parcel. 5 general restrictions or promises:
○ (1) Easement: A is given the right to enter upon B’s ppty. ○ (2) Profit: A is given the right to enter upon B’s land remove something attached to
the land.○ (3) RC or ES: A is given the right to enforce a restriction on the use of B’s ppty. ○ (4) RC or ES: A is given the right to require B to perform some act on B’s land.
○ (5) RC or ES: A is given the right to require B to pay $ for the upkeep of specified facilities.
EASEMENTS: An INTEREST in land Arises from a grant giving one the right to enter someone’s land. Focus on: creation and termination.
○ Affirmative Easements: Servient owner gives the right to enter and do something on his land.
○ Negative Easements: forbids one landowner from doing something on his ppty that might harm his neighbor. These are RARE.
ALL easements are either appurtenant to other land or in gross. ○ Appurtenant to land: dominant tenement is given a right that BENEFITS the use and
enjoyment of HIS OWN ppty. DT is given the right due to him being the owner of a certain ppty, it is in regards to landownership.
○ Easement in gross: does NOT give easement owner a right that benefits the use and enjoyment of his land, merely gives the right to use the servient land. Does not regard land ownership.
○ If ambiguous whether an easement is appurtenant or in gross => preference for easement appurtenant. E.g. “for the watering of livestock owned by sellers” Court said appurtenant to the neighboring tract (benefit belongs to the owner of
the neighboring tract -- whoever that may be) Because of intent: parties usually intend that the easement will benefit a ppty. Total value of land is increased: increase value of the dominant land presumably
more than it decreases the value of the servient land (assumes equal bargaining power and that the two will negotiate a fair price). ▫ Easement in gross does not increase the value of any land (decreases servient
land, and the benefit is not in regards to any land).
Easement is NOT revocable. Distinguish from license.
○ License = oral or written permission by owner to allow licensee to come onto land to do some act that would otherwise be a trespass (e.g. dinner guests, plumber, customer at an establishment).
○ License = Revocable○ Can look a t lot like an easement in gross (e.g. apt house owner gives B the sole and
exclusive right to install and maintain laundry machines in the building). If license, not binding to subsequent owner, but if easement it is. Courts will usually say license since don’t like easements in gross.
○ Exceptions: Irrevocable licenses If combined with an interest in land (e.g. A has right to take timber from ppty) =>
kind of like easement by necessity. Can be irrevocable due to estoppel (see below).
Distinguish from profit:
○ A profit a prendre is the right to take something off another person’s ppty that is part of the land (e.g. minerals, fish, etc). When a profit is granted, an easement to go on the land remove the thing is implied. Same rules of easements usually apply to profits.
CREATION of easements: (1) By express agreement (in writing): If conveying an interest in land, has to be in writing (statute of frauds). Gives proof of the agreement If in writing, can be created to:
○ endue for a certain amount of time (a person’s life, period of years, etc). ○ could be a determinable interest (e.g. have it for “so long as…”)○ Could spell out who is responsible for damages/repair and consequential damages
(e.g. figure out who is going to maintain the road the expenses that go with it). If ambiguous whether grantor intended an easement of fee simple.
○ Presumption may be that the grantor conveyed the largest interest he could convey, unless expressly contrary.
○ If grant of limited use or for a limited purpose; or of a identified space without clear marked boundaries or for ppty less than FMV => easement.
○ Often when the land is called a “right-of-way” the court finds an easement was granted. (e.g. “right-of-way for a steam railroad”). But be aware, could go the other way, one case decided fee simple based on grantor’s intent.
(2) Certain Exceptions to getting the agreement in writing (though once recognized should record it right away so it known that the land is encumbered - a GFP that has no notice of the restriction may not be held to it). * Burden is on the person coming to the court who doesn’t have the writing. Default rule: Easement will go on forever (exception is easement by necessity which
terminates when no longer necessary). Default rule for details: obligation of ST, not to hinder EO’s use, EO’s obligation to
maintain this thing (if EO is exclusively using it). ○ Could make different provisions if it was in writing.
(a) ESTOPPEL: SO’s representation (actions or omission) cause DT to reasonably rely on the representation that it will be okay for him to proceed to make significant improvement in the ppty. SO is estopped from claiming it had to be in writing. ○ Exp: A stands back and watches B build a road, then when it gets too costly for B to
take it out, tells him he can’t have it. ○ Under some juris, easement by estoppel and license made irrevocable by estoppel are
the SAME (easement by estoppel), in other juris they are DISTINCT. ○ Irrevocable due to estoppel: when the licensee has used his permission to enter and
built improvements or made substantial expenditures on either the licensor’s ppty or the licensee’s land, relying on the license. DISTINCT (majority rule): juris can say it continues only so long as the nature of
the license calls for it. Exp, if made necessary because of the house, so if the house burns down, the license is gone. ▫ Rationale: license does have an ending point
SAME: rationale, to prevent intentional destruction of the improvements that were made (e.g. to keep SO from burning the house down).
Exp: O gives neighbor A permission to enter O’s land and erect a tile drain to protect A’s ppty from water damage. A does so at a substantial expense to himself, O is not estopped to deny permission.
○ SO usually not awarded any damages (reason: could see what was going on). (b) PRESCRIPTION (form of AP but involves USE not possession): EO has
continuously done something “openly and notoriously,” without permission of the owner for the s.o.l. (requirements not necessarily the same as for AP). ○ Preventable by same means too: can prevent it from being acquired by effectively
interrupting or stopping the adverse use. (p. 813)○ Revocable by same means: You can acquire the right back through preventing their
use of the easement under the same conditions (openly, continuously, etc). ○ Possibility for tacking, but would have to show previous adverse possession was in
the same place and within the same lines as right of way claimed (p. 809)○ Clearly a person can’t claim adversely to himself, so prescriptive period can’t begin
while dominant and servient parcels have UNITY of ownership. (p. 809)○ In most juris: possible for user to acquire prescriptive easement even though the
easement is also used by the SO (note, diff than what “exclusivity” means in the AP possession context). (p. 814) “exclusive” requirement is minority rule.
○ Rationale: if SO didn’t notice, not a big deal to him, but a big deal for EO who got used to being able to use it (though weak arg if s.o.l. is really short).
○ Distinction between prescriptive easements and AP: Two neighbors with garages A and B; space inbetween belongs to B, but A uses it
to store his garbage cans. ▫ Prescriptive easement - the right acquired is the ability to go onto B’s ppty for
specific purposes (garbage related activity). ▫ With AP: A has the entire strip of land, could use it however he wants. ‾ Plus: with Encroachment exception for AP: possible payment from A to B
for strip. ○ Public prescriptive easements : can be obtained by long continuous use by the public
under a claim of right. SO must be put on notice, by the kind and extent of use, that an adverse right is being claimed by the public, not individuals Though most courts say no public prescriptive easement for public access to
beaches (most courts presume this is with permission). ▫ Though some courts allow through alternative approach: “ancient uses” theory.▫ Another option -- public trust by statute: private land impressed with public
trust (“came w/out the stick to that was the right to exclude the water line”) CA has abolished these except for land w/in 1000 yds of the ocean. ▫ Even in eligible places, landowner can show use is with permission by posting a
sign or RECORDING a notice in the public records (p. 815). (c) EASEMENTS BY IMPLICATION: servient and dominant estates had to at one
time being an UNDIVIDED piece of ppty -- i.e. result from a SUBDIVISION. Implied from prior use: SO has notice that his land is encumbered.
○ Implied on the basis of an apparent and continuous (or permanent) USE of a portion of the tract that EXISTED when the tract was divided (often a quasi-easement).
○ Easement is imposed to protect the probable expectations of the grantor and the grantee that the EXISTING USE will CONTINUE after the transfer. (P. 802)
○ Factors to consider: whether claimant is grantor or grantee, terms of the conveyance, the consideration given, the extent of the necessity of the easement, whether reciprocal benefits result to both parties, manner in which the land was previously used, the extent to which parties knew or should have known of the manner of prior use. (p. 800)
○ The extent to which the parties knew/should have known: Assumed to know and to intend the continuance of reasonably necessary uses that
are apparent upon a reasonable inspection. (p. 800)○ Some juris say strict necessity is required for implied easements in favor of the
grantor (higher threshold) (p. 799). Policy: grantor had opportunity to protect himself, could have put it in the
conveyance. ○ Issue of notice/equity: if SO had notice before he bought the ppty, such that he paid
a lower price for it and then tried to claim DT couldn’t use it, not fair. ○ Examples:
Exp: B bays a back subdivision with a driveway from the front subdivision - has right to use driveway.
Exp: B buys ppty from A with a hidden sewage drain that runs from A’s ppty over his ppty. Court said this could have been found by reasonable inspection. [Van Sandt]
Implication by necessity: The claimed easement is NECESSARY to the enjoyment of the DT’s ppty and the necessity EXISTED when the dominant parcel was divided from the servient parcel (i.e. landlocked ppty). (higher standard than by prior use)○ Implication by necessity can only arise from an implied grant or implied reservation.
(p. 806) Doesn’t follow that showing current ppty is landlocked by ppty of another means
that claimant has an easement by necessity with regard to ownership. Must have privity of ownership . ▫ Must show that there was UNITY of ownership of the alleged dominant and
servient ppty, because no one can have way of necessity over the lands of a stranger. (p. 807)
○ Must be a necessity, not a mere convenience (p. 806) Juris have variation on “necessity,” some require:▫ “strict necessity” [Othen]‾ extreme exp: surface way of necessity not implied if ppty has access by
water. (p. 810)▫ if only other access is inadequate, difficult, or costly.
○ Exp: A creates a subdivision of his ppty, sells backlot to B which is landlocked. ○ If an easement by necessity claim is denied, leaving ppty landlocked, claimant can:
Work it out with the SO (i.e. negotiate and pay for it) Ask state for a legislative/administrative hearing (nor all juris have this)
▫ For this method, doesn’t matter how landlocking occurred: does not require previous prior common ownership of dominant and servient estates. ‾ SO of this condemned easement by necessity receives compensation (diff in
showing how landlocking occurred?)▫ The gov condemns the situation, enforces a solution. ▫ P will have to pay a sum of money (set by gov) to pay $ to the neighbor he has
to trespass on. All neighbors are evaluated to see where pathway will be least intrusive.
○ Termination: easement by necessity only lasts as long as necessary (p. 810) If landlocked ppty, and DT gets another way out, the easement by necessity
terminates. Same for implied by prior use? I don’t think so… but don’t know
SCOPE OF EASEMENTS: Extension to other ppty: Courts will look at intent of the parties Surcharging = putting excessive burden on an servient tenement. Details can be in WRITING to limit the scope (e.g. use of roadway but only for family
vehicles) Default Rule for DETAILS: If the “new” use was reasonably foreseeable change that
effectuates the SAME purpose as the original easement w/out surcharging it, is okay. ○ Policy Issues: If you want to provide incentive for ppl to get things in writing will
want to either keep scope for both same, or keep written scope narrower than non-written in order to encourage to have things in writing by giving protection of the narrowest scope.
Try to pull apart SCOPE and SURCHARGE: ○ Can be ambiguity between the differences.
When it concerns existing easement => usually surcharge▫ Exp: increase in the amount of traffic on the road
When it concerns something you couldn’t do before => scope▫ Exp: road used for ppl and cattle now want to use for cars.
Example of WRITTEN DETAILS: With an express easement, an easement appurtenant to one parcel of land cannot be
extended to another parcel (whether distant or adjacent) owned by the DT. (p. 836) ANY extension, even if NO increase in burden is a misuse. However, for a SO seeking injunctive relief (land of equity), since there must be
substantial injury to the injunctive seeker, a misuse that caused NO actual damage => no injunction. ▫ Alternative: DT is prohibited from using the easement until he can separate the
uses for the benefit of the appurtenant ppty from the others (p. 837)‾ Rationale: misuse = trespass (remember Jacques v. Steenberg homes…)
○ Alt rule: only if you increase the burden => then it is a misuse. ○ Another approach: figure out the value of the extension:
SO has option to destroy the easement by buying out DT DT has option to preserve easement + extend by paying more to SO
Example of DEFAULT RULE DETAILS:
The scope of an easement may adjust due to changing times to serve its original purpose, so long as the change is consistent with the grant.
An easement for railroad uses cannot be extended to use for a public recreational trial. [Presault, 849]▫ Nature of the usage is clearly different. Trains are limited in location, number
and frequency. Note, in this case the deed was ambiguous as to whether it was granting a fee
simple or an easement. If the state had a fee simple, the only the plaintiffs would have been able to stop the creation of the recreational trial would be to say it interferes with the use of their land (a nuisance).
Extension of use for a PRESCRIPTIVE easement: ○ Prescriptive easement is NOT as broad in scope as easement by grant, implication, or
necessity. The uses are not confined to the actual uses made during the prescriptive period, but the new uses must be consistent with the GENERAL kind of use by for which the easement was created and must be uses that the SO would REASONALY EXPECT to lose by failing to interrupt the adverse use. Exp: prescriptive easement for ppl and horses cannot be used by cars. (p. 843)
Change in Location:○ General rule: the location of an easement, once fixed, may not be changed by the SO
without permission by the DO. Restatement: grants SO the right to change the location of the easement, at his
own expense, if interfere with the DO’s use (enjoyment, increase burdens, interfere with the purpose, etc).
Change in utilities: ○ Exp: private easement right of way does not usually permit easement owner to
install aboveground or underground utilities to the easement. (p. 842)
TERMINATION METHODS: By Writing: The easement with determinable language, you can explicitly cay that it
will shut off at a certain time. Scope breach: Can define the reasonable representation that was made to the person
coming on to your land, implied certain uses, but not others. Buyout: SO goes to the DT and buys the ppty, easement disappears. Easement by Implication => Merger (can buy the whole land)
○ Remember once subdivided again doesn’t start automatically, must be created again. Abandonment: An easement is not abandoned simply because EO doesn’t use it, but
rather occurs when the EO conclusively does acts that either show a present intent to abandon the easement or a purpose inconsistent with the use for which the easement exists. (p. 851)○ General rule: can’t be ambiguous on the intent to abandon. ○ Easement for railroad use, EO (gov) shut down the line, removed tracks, didn’t move
to re-instate the line or replace the tracks. Prescriptive Easement: by prescription -- openly and continuously prevent DT from
using the easement. Easement by Necessity => Terminates when the necessity ends.
If dominant tenement and servient tenement come into the same ownership => easement is terminated. If will not automatically be revived if the tracts are divided again. A new easement by implication will only arise if the circumstances at that time call for it. (just for ease by implication or all kinds? Or maybe only one where it is relevant?) (p. 802)
Easement by estoppel: ended the same was it was created. If EO says he isn’t going to use the easement anymore, and the ST reasonably relies on this to change their ppty. Not the same thing as saying they abandoned it, ST just showing she reasonably relied on the EO’s move. Unfair bargaining.
Policy Considerations If you are worried about burdens to subsequent owner could do either or both:
○ Creation doctrine: Threshold for creating an easement is HIGH ○ Termination doctrine: have a way to cut easements off after too long.
Exp: Any easement not created in writing, can be petitioned to the court that it violates public policy (e.g. a new road was put in, DT doesn’t need to use my road anymore).
○ By common law: pressure was exerted on the creation end. Stating point/default: obligation of SO, not to hinder DT’s use, DT’s obligation to
maintain this thing (if DT is exclusively using it). ○ When easement is not in writing => more burdens are on the DT.
But if you put in writing have room to have different starting points: ○ Exp: SO has to maintain easement and can’t inconvenience the DT.
Negative Easements: A negative easement is the right of the DT to stop the ST from doing something on his
land. (diff than regular easement which is a right to go on somebody else’s land). CANNOT be created by prescription (Gilberts, p. 319) Originally, there were four types: the right to stop your neighbor from:
○ (1) blocking your windows○ (2) interfering with air flowing to your land in a defined channel○ (3) removing the support of your build (e.g. removing a supporting wall)○ (4) interfering with the flow of water in an artificial stream.
Original Negative Easements have to do with blocking air, light, water… Some modern recognized ones (express easement of unobstructed view; solar easement
preventing a person from blocking a solar collector). Most noteworthy new Neg. Easement: conservation easement : an owner of ppty can give a public body or a private
charitable org. a conservation easement, preventing the SO from building on the land except as specified in the grant. ○ Because of doubts of neg easements in gross -- most all states have statutes allowing
these easements. ○ Purpose is to preserve scenic and historic areas and open space. ○ Conservation easements also continue forever, and are transferable. ○ Conservation easements don’t have to be tied to the land, they can be in gross.
Judges didn’t like negative easements -- risks to purchasers for getting ppty subject to undiscoverable burdens. How can purchasers protect themselves from something they can’t see? ○ Note, this could be solved by recordation.
The growth was curbed -- now new negative easements were recognized. No need for growth of negative easements because negative restrictions on ppty can be
treated as equitable servitudes. But if ambiguous may want to go for negative easement because like any other
easement it lasts forever. ○ Neg easement: DT has right to stop ST from obstructing his view. ○ Neg covenant: don’t obstruct my view○ Affirm. Covenant: trim your trees (so won’t obstruct view).
CONVENANTS: Arises from a promise respecting the use of ppty by one owner to another. Don’t have the right to enter, you stay on your own ppty. A CONTRACT running with the land Real covenants (enforceable at law) Equitable servitudes (enforceable in equity) Often the promise relating to the USE of land…
Real covenants: A promise respecting the use of land that runs with the land at law (enforceable at law, stricter than equitable servitudes) CREATION of real covenants are created ONLY by a WRITTEN instrument, signed
by the covenator (interest in land w/in meaning of Statute of Frauds). ○ If the deed creates a promise by the grantee (a real covenant), but signed by the
grantor only, the promise is enforceable against the grantee, since the grantee accepted the deed.
Remedy = $$ damages (maybe give person looking to enforce the covenant more pull -- bargaining power since has potential to reach all person’s assets).
An interest in land + contractual promise = covenant○ Easement + contractual promise = covenant
Because remember an easement is an interest in land. Exp: someone can come onto land to rescue wildlife but has promises in how they
will conduct the rescue. Two types:
○ affirmative promise (a promise to do something)○ negative promise (a promise not do something)
Focus on: whether or not the covenant will run with the land. Original parties to a conveyance share privity of contract. The owner of the benefited
ppty can sue the owner of the burdened ppty owner under the law of contracts. But with subsequent owners, we need to evaluate whether the covenants RUNS (only
an issue when either one of the parties involved is not an original party to the covenant).
Two considerations: ○ Does the benefit run? ○ Does the burden run? (more difficult)
Two different types of privity of estate (relationship between grantor-grantee): ○ Privity of Estate: allows enforcement of covenants to run to successors because the
convents in created in connection with the transfer of some other interest in land. (note, an easement is considered an interest in land, that is why they run automatically). (same meaning of privity required for tacking APs).
○ Horizontal Privity = privity of estate between original covenanting parties Grounds the contract into an interest in the land (i.e. creates a legal contractual
relationship between two people in relation to land). Shows the intent of the parties was to stick the covenant with the land (not just
personal to themselves). How it is done: ▫ A & B both convey their ppty to a straw, X. ▫ X conveys A’s ppty back to A by a deed containing a promise by grantee A for
the benefit of B’s lot. ▫ X conveys B’s ppty back to B by a deed containing a promise by grantee B for
the benefit of A’s lot. Types of HP:▫ Landlord/tenant ▫ Grantor/grantee▫ Subdividor => gives out lots▫ Grantor A gives an easement to B
○ Vertical Privity = privity of estate between one of the covenanting parties and a successor in interest. Ensure that the party suing got the estate from either the original promisee or promisor. Doesn’t regard the land itself, but the interest in the land. VP = when the successor gets the same interest (grantor has substituted for
himself) NO VP = successor gets a lessor estate (grantor has retained enough to sue) ▫ e.g. if B has FSA and conveys a FSD, no VP▫ e.g. if B is a tenant conveys a sublet, no VP (would have to an assignment)
Be aware that VP is diff for LL/tenant (VP between T1 and T2 does not destroy the relationship between T1 and LL, but in other relationships, exp if A => B, and B => C, nothing more would exist between A and B.
Common law: VP could not exist with AP because AP takes a new title by law. HP and VP usually not an issue with subdivisions.
○ Subdividor who imposes the restrictions in a deed has HP with original promisor, the other lot owners, are all in VP with the subdividor so they succeed to the benefits and burdens on the covenant.
Other cases can get complicated. Traditional Rule (1st Restatement):
○ Covenant RUNS with an ESTATE in land (title). ○ VP always required between successors (both burden and benefit)○ HP is ONLY required for the BURDEN to run.
HP not required for the BENEFIT to run because not against public policy for the benefit to run since it helps rather than hinders alienability of ppty (p. 890)
○ Intent between the parties (can be wording like “I bind my successors in interest”)
○ A covenant does not run if the successor has no NOTICE ○ Touch and concern -- our creation threshold
Policy: If it lasts forever, want to make sure that it is grounded to the land. Want to prevent encumbered land.
Alt Rule: ○ HP not required for the burden or the benefit to run.
Equitable servitudes: enforceable in equity. Remedy = injunction (stopping from doing something) or enforcement (making you do
it). ○ The plaintiff can always sell the injunction to the defendant (P is allowed to make his
own determination of appropriate damages). ○ In many stats, law and equity have merged, and a court in a equitable action can give
damages instead. Focus on: creation, termination, and whether it will run. An equitable servitude is a covenants that RUNS to successive owners or possessor
regardless in equity regardless of its enforceability at law. Unlike a real covenant which attaches to an estate in land, an equitable servitude
attaches to the land itself (like an easement). Requirements (p. 867):
○ NO HP required○ NO VP for burden to run○ VP may be required for benefit to run (depends on juris)
VP required extension: Corporate ppty owner’s association (has not succeeded to the ownership of the benefited ppty) but acts as an agent or representative of all of the subdivision’s ppty owners. [Neponsit, p. 882]
Juris may allow third-party beneficiary of the promise to sue (w/out VP) - ▫ Zamiarski
Juris may require 3rd party beneficiary to show VP between 3rd party and original party to the covenant. ▫ Subdivision neighbors (3rd party) can sue on subdivision restrictions because
they received their titles from one of the original promisees. ○ Intent to run. ○ Notice (actual or constructive)○ Touch and Concern -- creation threshold
Can run in equity against successor who give no consideration (donees, heirs, will beneficiaries, etc) -- be AWARE that the Recordation System only protects good-faith subsequent purchasers, not donees.
CREATION of equitable servitudes can be created by: ○ Written instrument○ May be implied in equity under certain limited circumstances.
(1) O’s plan with restrictions is in the direct chain of title. [constructive notice] CA-Rule (ES must be created by a written instrument identifying the burdened lost, it will not be implied from existence of restrictions on other lots. Eg -- recorded subdivision map that contains restrictions on the ppty).
(2) O’s plan is located in other prior conveyances out. [constructive notice]Before any other transactions took place, there was a restriction, that all retained land is restricted. (First deed out). (3) O’ had no recorded plan. [inquiry notice] O gave out prior lots with restrictions but did not put restrictions on retained lots. If the purchaser looked at the prior conveyances, he would have been able to infer the plan through seeing a pattern. With the notice from viewing the neighborhood, clearly indicating that the residences were built in strict accordance with a general plan, he was put to inquiry, and if inquired would have found of record the reason for such general conformation (p. 873).
“This court says be suspicious when you have a common grantor and you are purchasing a lot as to bear some relationship with burdened lots. The relationship being that they (the other lots) would bear harmed by things you do on your lot, then you have to guess the plan and be right. “
Touch and Concern for Covenants: At Common Law, touch and concern make something invalid right at the get-go (like
RAP) Later approach: wait and see (let things to until we need to cut them off) Case by case basis
○ Is it tied to your ownership of land? Or personal? ○ Must “touch and concern” to a substantial degree○ Must exercise direct influence on the occupation of the ppty or the use and
enjoyment of the ppty [Caullet, p. 889]. Things that are NOT LIKED:
○ REMEMBER -- we don’t like BURDENS○ Overall if burden is not greater than benefit => no T&C○ Affirmative burdens disfavored (not necessarily invalid, but burden for justifying
is greater) ○ Affirmative burdens to pay $$ really disfavored.
But if it can be tied to ownership (e.g. have to pay sports club fee because you have access to since you are a member of the public, have access since you are an owner => OK)
$4 to maintain common roads => the benefit is tied to the interest in land, tied to the right of using the common land. Doesn’t far from benefit and burden attaching to the specific ppty since the benefits and burdens are in relation to their ownership. Like the person is out there paving the roads and maintaining them. [Neponsit]
○ If benefit in gross, burden will not run. Strong policy against hindering the marketability of one ppty (burden) when there
is no corresponding enhancement to surrounding land. [Caullet, p. 890] If the benefit is attached to the ppty, the fact that the burden is in gross (i.e.
personal) doesn’t preclude covenant from running. ▫ Public policy okay with benefits keeping going.
But if the burden is placed upon the land, and the benefit is personal to a party and does not extend to his land, the burden is generally not held to run.
○ Violates strong policy objections, disfavored: e.g. marketability, unconscionable (born of spite, malice, etc).
MARKETABILITY (most important): ○ If you can show affirmative burden enhances marketability => can T&C○ With affirmative obligations to pay $$ => if all places similarly burdened, everything
becomes real expensive. Example NO T&C:
○ Developer reserves the right to be the party to build or construct the original dwelling on the ppty (personal benefit to developer only) [Caullet, p. 888]
○ Developer had provision that it would supply water to each lot, each lot owner had to pay an annual fee. 30 yrs later, successor to original buyer, SP, dug his own well. No T&C, SP no longer needs water, SP’s refusal doesn’t hinder developer’s ability to get water to others, covenant had no limit in time. Developer could have protected himself. Could have figured out costs with water
system and gotten full costs up front.
3rd Restatement Rule (focus on equity -- no distinction between real covenants and equitable servitudes): Remedies: anything that is appropriate. Requirements:
○ NO HP (unless you want money damages (biggest threat to a person)○ Issue of VP is replaced with looking at how burdensome the covenant is, if not
burdensome, anyone should be able to do it. ○ Intent○ Notice○ Negative covenants are like easements for successive purposes (low burden)
A promise not to do something runs to ALL subsequent owners and possessors of the of the burdened and benefited ppty.
○ Affirmative covenants (heavier burden)▫ VP required for benefit to run (limits those who are burdened…)▫ VP extended to reasonable ppl for the burden to run. ▫ The BURDEN runs to APs▫ The BURDEN runs to life tenants (but liability is limited to the value of the LE). ▫ Lessees must perform only the covenants that are more reasonably performed by
the lessee than the LL. ○ Presume valid at creation (freedom of contract between parties to negotiate freely).
But to see if it should run to successors, we will cut it off if it violates public policy (replaces T&C) Out CUT-OFF threshold. Factors to consider (has to offset the freedom of contract we want ppl to have)▫ Presumption that it is valid is starting point…
Arbitrary, spiteful or capricious Unreasonably burdens a constitutional right Imposes an unreasonable restrain on alienation, trade, or competition unconscionable
We are SOMEWHERE IN-BETWEEN Common law and 3rd Restatement (be aware of CL distinctions and Restatement view…)
If A<==> B (held by contract)Since contract not in title, if B wanted to get out, could possibly use a straw -- then B is a successor in interest, not n original party member. (would depend on juris if this is allowed).
Controlling land use by restrictive covenants: Construction rules for determining whether to enforce restrictive covenant:
○ (1) If ambiguous or unclear, in FAVOR of the free enjoyment of the ppty and against restrictions.
○ (2) No restrictions on use and enjoyment of the land will be construed by implication
○ (3) Have to interpret the covenant reasonably, but strictly (no illogical, unnatural or strained construction)
○ (4) give words in the restrictive covenant their ordinary and intended meaning. If challenged, look to what the purpose of the covenant was…
○ Group home case Restricted covenant at issue = “single-family” It was ambiguous, so court must resolve any ambiguity in the restrictive covenant
in FAVOR of a conclusion that “family” encompasses a broader group then just related individuals or traditional nuclear family.
The members of the group home acted as a “single-family,” fit the definition of a “single-family” by zoning laws.
Strong public policy to find small group homes as “family” (discrimination) Claimants said group home was violating covenant’s residential restriction because
it was increasing traffic. The court said the issue of traffic was irrelevant to determining whether the use of
the house as a group home violated the covenant because the covenant was not directed at controlling traffic or parking it was to regulate the structural appearance and use of the homes (e.g. restricts signs and billboards, trash and weeds, trailers and campers parked in yards).
Complaint was irrelevant as to whether the home is used for single-family residential purposes.
Touch and Concern:
Restrictions on the use of someone’s ppty, generally touchesa nd concerns the lband.
Affirmative obligations to pay money YES T&C:
○ Neoponsit, 879: Must at least “touch” and “concern” the land in a substantial degree. Does the burden upon an interst in land, increase the value of the same interest or
related land?
For full enjoment in common by the defendant and other ppty owners, the roads and public places must be maintained.
The fee for the maintenance attached to the land that enjoys the benefit. ○ Sports club adjacent to the condominium, owner of one of the units didn’t want to
pay $ to belong to the sports club since she was not sportsmided. T&C beacause the owners had the right to enjoy the sports facilities.
NO T &C: ○ Developer had provision that it would supply water to each lot, each lot owner had to
pay an annual fee. 30 yrs later, successor to original buyer, SP, dug his own well. No T&C, SP no longer needs water, SP’s refusal doesn’t hinder developer’s ability to get water to others, covenant had no limit in time. Developer could have protected himself. Could have figured out costs with water
system and gotten full costs up front.
Benefit in Gross: ○ Developer reserves the right to be the party to build or construct the original
dwelling on the ppty (personal benefit to developer only) [Caullet, p. 888]
![INDEX [] · 2005-10-25 · 5 Bryant, John F, 27 Bryant, Levi Clinton, Sr, 109 Bryant, Lillie S, 101 Bryant, Linster, 101 Bryant, Litha L, 109 Bryant, Louisa M, 111 Bryant, Mary, 101](https://static.documents.pub/doc/80x56/5f4498e1f4a6be5e1a48d4d2/index-2005-10-25-5-bryant-john-f-27-bryant-levi-clinton-sr-109-bryant.jpg)
