Barbri - Property

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Freehold estates:
i. All conveyances are presumed to be in fee simple absolute, unless there is a clear intent to the contrary

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fee simple absolute

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freehold estates:

i. Same as a fee simple absolute, but subject to a self-executing condition that, if it occurs, automatically destroys the estate (“so long as,” “during,” “until,” “while”)
ii. The grantor retains a possibility of reverter (fully alienable, devisable, inheritable) and if this interest is given to a third party, it becomes an executory interest
iii. Holder is not subject to the doctrine of waste (has the right to exploit the mineral resources of the land)

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fee simple determinible

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freehold estate:
i. Same as a fee simple absolute, but subject to a condition which, if it occurs, gives the grantor the option to reenter and retake the land (right of reentry) (“upon condition that,” “but if,” “provided however that”). Grantor must expressly reserve the right to reenter.
ii. Holder is not subject to the doctrine of waste (has the right to exploit the mineral resources of the land)

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fee simple condition subsequent

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freehold estate:

To Red Cross; provided, however, that if the premises shall ever cease to be used for charitable purposes, title shall pass to the American Heart Association”)
i. A fee simple estate that, upon the happening of a stated event, is automatically divested in favor of a third person rather than the grantor
ii. Rule against perpetuities applies

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fee simple subject to an executory interest

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freehold estate:

estate measured by the life or lives of one or more persons.

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life estate

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freehold estate:

1. A life tenant is entitled to any ordinary uses and profits of the land, but cannot do anything that injures the interests of a remainderman or reversioner. A remainderman only may sue for damages and/or to enjoin such acts

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life estate doctrine of waste

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freehold estate:

a. Any affirmative action beyond the right of maintenance that causes harm to the property. Exploitation of natural resources by a life tenant is generally limited to situations when: (i) necessary for repair or maintenance; (ii) the land is suitable only for such use; or (iii) it is expressly or impliedly permitted by the grantor. Open mines doctrine, if mining was done on the land prior to the life estate, the life tenant can continue mining, but is limited to the mines already open.

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life estate:

voluntary affirmative waste

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freehold estate:

a. When a life tenant fails to protect or preserve the land
b. Life tenant is obligated to:
i. Make ordinary reasonable repairs (not replacements)
ii. Pay interest on mortgages (not principal) and all ordinary taxes
iii. Pay special assessments for public improvements of short duration; and
iv. Pay ordinary taxes on the land.

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life estate:

permissive waste

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freehold estate:

a. An affirmative action that benefits the property economically (increase in value)
i. However, land tenant may alter or even demolish existing buildings if changed conditions have made the property relatively worthless (e.g., change from residential to 90% industrial)

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life estate:

amelioritive waste

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future interests:

Is a future interest in a third person that can become possessor on the natural expiration of a proceeding estate. Must be capable of naturally becoming possessory at the close of the preceding estate and cannot take effect prior to the close of the preceding estate

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remainders

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future interests:

Taker is born and ascertainable; and There is no condition precedent to the interest becoming possessory other than the close of the preceding estate

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vested remainder

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future interests:

1. When the taker is named and ascertainable and there is no condition precedent. Immediate possession upon normal termination of the proceeding estate.

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vested remainder: absolute vested remainder

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future interests:

1. When the taker is a class and at least one class member already exists, but more members of the class could come along to partially divest the interests of the other class members. Ex: To A’s children. C is child and living and future children.

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vested remainder: vested remainder subject to open

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future interests:

1. Vested remainder subject to condition subsequent. Example: “To A for life, remainder to B and his heirs, but if B dies before reaching 21, to C and his heirs.” If A dies, B can go into possession, but if he dies before 21 his interest is completely divested. A holds a life estate, B holds a vested remainder subject to complete divestment (or “subject to an executory interest”), and C holds an executory interest.

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vested remainder: vested remainder subject to complete divestement

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future interests:

a. Taker is either not born or not ascertainable or there is a condition precedent that must be satisfied before the estate can become possessory. Grantor retains a reversion.

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contingent remainder

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future interests:

Taker is born and ascertainable; and There is no condition precedent to the interest becoming possessory other than the close of the preceding estate

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vested remainder

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future interests:

1. When the taker is named and ascertainable and there is no condition precedent. Immediate possession upon normal termination of the proceeding estate.

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vested remainder: absolute vested remainder

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future interests:

1. When the taker is a class and at least one class member already exists, but more members of the class could come along to partially divest the interests of the other class members. Ex: To A’s children. C is child and living and future children.

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vested remainder: vested remainder subject to open

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future interests:

1. Vested remainder subject to condition subsequent. Example: “To A for life, remainder to B and his heirs, but if B dies before reaching 21, to C and his heirs.” If A dies, B can go into possession, but if he dies before 21 his interest is completely divested. A holds a life estate, B holds a vested remainder subject to complete divestment (or “subject to an executory interest”), and C holds an executory interest.

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vested remainder: vested remainder subject to complete divestement

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future interests:

a. Taker is either not born or not ascertainable or there is a condition precedent that must be satisfied before the estate can become possessory. Grantor retains a reversion.

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contingent remainder

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future interests:

a. If an instrument grants a life estate to A with a remainder to the heirs of A, the remainder is not recognized and A will take the life estate and the remainder

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remainders: rule in shelley's case

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future interests:

future interests in third parties that either divest a transferee’s preceding freehold estate, or follow a gap in possession or cut short a grantors estate.
Shifting Executory Interests (grantee to grantee) and Springing Exeecutory Interests (grantor to grantee)

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executory interestss

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rule against perpetuities:

(applies only to contingent remainders, vested remainders subject to partial or complete divestment, or executory interests)
a. No interest is valid unless it must vest, if at all, within a life in being at the creation of the instrument (any person alive and related to the event of vesting), plus 21 years

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rule against perpetuities

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rule against perpetuities:

i. The rule against perpetuities does not operate to invalidate an interest (even if it would otherwise violate the rule) if the original gift and the remainder/executory interest are made to charities

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charity to charity exception

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concurrent estates:

estate held by several persons, all of whom have the right to enjoyment and possession of the land, and a right of survivorship)
i. Four units must be present at the outset
1. Time (all interests must vest at the same time)
2. Title (grant to all joint tenants must be contained in the same instrument/deed)
3. Interest (each joint tenant must take the same kind of interest)
4. Possession (each must have identical rights to possession)

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joint tenancy

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concurrent estates:

partitioning (if one tenant wants out); Severance (when any of the four unites are disturbed during the lifetime of the severing tenant); Mortgage (foreclosed and proeprty sold)

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ways to destroy a joint tenancy

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concurrent estates:

i. Only requirement is unity of possession (tenants can hold different interests, but they each must be entitled to possession)
ii. Freely alienable (can be sold, partitioned, mortgaged, given away, inherited, etc.)
iii. No right of survivorship

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tenancy in common

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concurrent estates:

i. Marital estate akin to joint tenancy that, in a common law jurisdiction, arises presumptively in any conveyance to a husband and wife
ii. Can only be severed by death (other spouse gets total), divorce, mutual agreement, or execution by a joint creditor of both spouses

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tenancy by the entirty

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concurrent estates:

Possesion (right to possess all portions of hte property but no right to exclusive possession); Duty to Account (right to retain profits from her own use); contribution (expesnes for preservation of property - repairs, improvements, and waste)

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rights and duties of co tenants

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Landlord Tenant Law:

tenancy for any fixed period of time)
i. Any tenancy of years for over one year must be in writing (statute of frauds)
ii. Tenancy ends automatically at termination date and can be terminated w/o notice
1. However, when a tenant has signed a rental contract, this obligates her for the full amount of money required under the contract

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tenancy for years

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Landlord Tenant Law:

i. Continues for successive periods (e.g., month-to-month) until L or T terminated by proper notice by either party

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periodic tenancy

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landlord tenant law:

1. Express Agreement (e.g., month-to-month lease)
2. Implication (e.g., L leases to T at a rent of $100 payable monthly)
a. If a lease is silent as to duration, it is presumed to be a periodic tenancy measured by the relevant payment cycle
3. Operation of Law
a. T remains in possession after a lease expires, and L treats it as a periodic tenancy by accepting monthly or weekly payments; or
b. A two-year lease is invalid because it is oral, but T goes into possession and L accepts monthly or weekly payments

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periodic tenancies: creation

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landlord tenant law:

1. Automatically renewed until proper notice of termination is given
2. Notice must be given one full period in advance (e.g., one month’s notice for a month-to-month tenancy) and be timed to terminate at the end of a period (e.g., the usual month-to-month tenancy can end only on the 30th or 31st, not the 15th). Unless parties have otherwise agreed.
a. For a year-to-year lease, however, only six months’ notice is required.

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periodic tenancies: termination

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landlord tenant law:

tenancy with no fixed duration)
i. Creation
1. Must be created by an express agreement that the lease can be terminated at any time
a. However, a reasonable demand to vacate is typically required.
2. If the lease gives only the landlord the right to terminate, a similar right will be implied in favor of the tenant.
a. However, if only the tenant has the right to terminate, a similar right will not be implied in favor of the landlord.
ii. Termination
1. May be terminated without notice by any party with the power to do so

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tenancy at will

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landlord tenant law:

i. Creation
1. Arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy
ii. Termination
1. Landlord can evict the tenant; or
2. Landlord can elect to hold the tenant to another reasonable term

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tenancy at sufference

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landlord duties to tenant:

no general duty to repair or maintain the premises

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landlord duties

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landlord duties to tenant:

(right to possession and actual possession)
1. If landlord fails to do so, he is in breach and tenant can sue for breach of contract

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deliver possession of hte proeprty to the tenant

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landlord duties to tenants:

Deliver residential property in a habitable condition (not a duty at common law)
1. If landlord breaches this duty, tenant can:
a. Move out and terminate the lease (no further rent obligation);
b. Stay and sue for damages

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implied warranty of habitability

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landlord tueis to tenants:

i. When the landlord or a paramount title holder excludes the tenant from the entire leased premises (i.e., obvious direct physical interference or harassment)
ii. Tenant can terminate lease and be relieved of future rent obligations

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actual/total eviction

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landlord duties to tenants:

i. When the landlord does something (or fails to provide a service he has a legal duty to provide) that renders the property uninhabitable (i.e., tons of cockroaches infest the house, etc.)
ii. Tenant may terminate the lease and seek damages if the condition is the result of the landlord’s actions and the tenant vacates the premises within a reasonable time

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constructive eviction

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landlord duties to tenants:

i. Exceptions: Nuisance on the premises and the landlord must control common areas.

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landlord is not liable for acts of other tenants

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transfers:

i. Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest, in whole or in part

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transfers by tenant

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transfers:
1. Transfer of one’s entire remaining interest in the property
a. Tenant can retain a right to reenter upon breach, though
2. An assignee stands in the shoes of the original tenant in a direct relationship with the landlord (i.e., the assignee and the landlord are in privity of estate), and each is liable to the other on all covenants in the lease that “run with the land.”
3. After assignment, the original tenant is no longer in privity of estate with the landlord, but remains liable on the original contractual obligation to pay rent (through privity of contract).

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transfer by tenant:

assignment

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transfers:

2. A sublessee is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease unless the sublessee expressly assumes the covenants
a. A sublessee is the tenant of the original lessee and usually pays rent to the original lessee, who then pays the landlord.
3. A sublessee cannot enforce any covenants made by the landlord in the main lease, except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord
4. Original tenant is still liable to the landlord through privity of contract

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transfer by tenant: sublease

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transfers:
1. Are enforceable, but strictly construed against the landlord (thus, a covenant prohibiting assignment does not prohibit subleasing and vice versa)
2. If a tenant tries to assign or sublease and there is a covenant against it, the transfer is not void, but the landlord may sue for damages or terminate the lease.

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transfers by tenant:

covenants against assignment or sublease

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transfers:

(when original landlord sells the property to another) (tenant’s consent is not required)
i. Original landlord is still liable to the original tenant through privity of contract
ii. Rights of Assignee Against Tenants: once tenants are given reasonable notice of the assignment, they must recognize and pay rent to the new owner as their landlord.
iii. Liabilities of Assignee to Tenants: The burden of the landlord’s covenants that touch and concern the land runs with the landlord’s estate to the assignee, thus, the assignee is liable for the performance of those covenants. The original landlord also remains liable on all of the covenants he made in the lease.

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assignments by landlord

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condemnation:

a. If the entire leasehold is taken by the government through eminent domain, the tenant’s liability for rent is extinguished and the lesee is entitled to compensation (fair rental value minus the amount of rent still due under the lease) b. If the taking is temporary or partial, the tenant is not discharged from the rent obligation, but is entitled to compensation for the taking (equal to the amount of total rent that would have been paid for the portion taken under the lease)

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condemnation

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tort liabilty of landlord and tenant:

i. At common law, a landlord had no duty to make the premises safe.

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landlord liability

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tort liability of landlord and tenant:

i. If, at the time the lease is entered into, the landlord knows (or should know) of a dangerous condition that the tenant could not discover by reasonable inspection, the landlord must disclose it (not repair it).

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landlord liability: exceptions - latent defects

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tortl iaibility of landlord and tenant:

i. A landlord who rents a fully furnished premises for a short period of three months or less (e.g., a summer cottage) is liable for injuries resulting from any defect whether or not he knew of it.

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landlord liability: exceptoins - furnished short term residence

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tort liability of landlord and tenant:

i. A landlord is liable for injuries sustained in passageways under his dominion and control if he failed to exercise reasonable care.

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landlord liability exceptions:

common passageways

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tort liability of landlord and tenant:

i. A landlord will be held liable for injuries resulting from ordinary negligence in undertaking repairs (because his attempt at repair created the deceptive appearance of safety)

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landlord liability exceptions:

negligent repairs

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tort liability of landlord and tenant:

i. A landlord is liable for injuries to members of the public if, at the time of the lease, he:
1. Knows (or should know) of a dangerous condition;
2. Has reason to believe the tenant may admit the public before repairing the condition; and
3. Fails to repair the condition

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landlord liability exceptions:

public use exception

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tort liability of landlord and tenant:

i. A tenant can be liable to invitees (the public) for negligent failure to correct dangerous conditions on the leased premises, regardless of whether there is also landlord liability

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tenants tort liability

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fixtures:

(a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty)
a. When items are incorporated into the realty so that they lose their identity (e.g., bricks, concrete), or when items are identifiable but removal would cause considerable damage (i.e., plumbing, heating ducts), they become irremovable fixtures that pass with the ownership of the land

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fixtures

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easemetns:

1. An easement that benefits the holder (dominant estate) in his physical use or enjoyment of another tract of land (servient estate)
2. The benefit of the easement passes with the transfer of the benefited land (dominant estate), regardless of whether it is mentioned in the deed/conveyance.
3. Burden of the easement passes automatically with the servient estate unless the new owner is a bona fide purchaser (who took without actual, constructive, or inquiry notice of the easement)

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easement appourtenant

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easements:

1. Where the holder acquires a right to use the servient estate independent of his possession of another tact of land (i.e., the easement benefits the holder rather than another parcel of land)
a. An easement for the holder’s personal pleasure (e.g., right to swim in another’s pond) is not transferable
b. An easement that serves an economic or commercial interest (e.g., a right to erect billboards on another’s land) is transferable

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easement in gross

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easements:

1. Either expressly granting an easement to a third party or expressly reserving an easement for yourself only in a sale
2. Must be in writing and signed by the holder of the servient estate and must satisfy all deed formalities (conveyancing, recording, etc.)
a. Exception: An easement for a year or less does not require a writing

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creasetion express

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easements:

adverse possession

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creation - by prescription

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easement:

(only allowed where both the burdened and the benefited parcels were held by a common owner)
1. Easement Implied from Existing Use (Quasi-Easement)
a. Prior to the division of a single tract;
b. An apparent (open and obvious) and continuous use exists on the “servient” part;
c. That is reasonably necessary for the enjoyment of the “dominant” part; and
d. The court determines that the parties intended the use to continue after division of the land

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creation - by implication

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easments:

Absolute Right of Access Rule) (only allowed where both the burdened and the benefited parcels were held by a common owner)
1. When a landowner sells a portion of his property and this division deprives one lot with access to a public road (landowner becomes landlocked), the lot owner can have an easement
a. The owner of the servient parcel has the right to locate the easement, as long as it is reasonable
2. There are no easements by necessity for access to sunlight or air

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creation - by necessity

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easement:

once terminated, it cannot be reinstated without going through the creation procedure again)

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termination of esaement

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easement:

1. Where the dominant and servient estates come together under the same owner (unity of ownership/merger)

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termination - merger

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easement:

ii. Written Release (where the easement holder unilaterally gives up the right to use the easement)
iii. Abandonment
1. If the holder of the dominant estate takes affirmative physical action to show an intent to abandon (e.g., build a wall around it).
a. Mere non-use of the easement is not sufficient
iv. Destruction of the Servient Estate: ends easement.

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termination of easement

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easement:

v. Termination by Estoppel
1. A representation by the holder of the dominant estate that he intends to relinquish the easement; AND
2. The holder of the servient estate makes a change in her position in reliance on that representation (e.g., builds something over the easement)
vi. Termination by Prescription
1. When the owner of the servient estate prevents use of the easement for the statutory time period
vii. Termination of Easements Created by Necessity
1. Once the reason for the implied easement ceases to exist (necessity doesn’t exist anymore), the easement automatically terminates. Created by expressed grant it does not end automatically once the necessity ends.

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termination of easement

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Licenses:

a. A licensee is a person who has been invited upon the property of the landowner and whose privilege (license) to remain there may be revoked at any time, without previous notice (can always be revoked at the will of the licensor)
i. If a licensee’s license is revoked, he must vacate the premises immediately

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licenses

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licenses:

a. Gives the right to go onto the land of another and take away a natural resource (e.g., timber, coal)
b. Easement rules apply to profit situations (are subject to the Statute of Frauds and compensation for takings via eminent domain)

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profits

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restrictive covenants:


a. Applies when trying to restrict someone else’s use of their property and seeking money damages in a court of law (legal remedy).
4 reuirements: Intent, Notice, Covnenat touches and conerns land, privity

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restrictive covenants

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equitable servitude:

a. Applies when trying to get an injunction in order to enforce the burden of a covenant/promise (equitable remedy).

Three requirements: intent, notice, and covenant touches and concerns land

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equitable servitude

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equitable servitude:

i. Unclean Hands (plaintiff has made the same improper use of her property)
ii. Acquiescence (plaintiff let other neighboring land owners do the same things on their lots)
iii. Laches (plaintiff sat by while D built and then only complained after it was completed)
iv. Estoppel (plaintiff represented that she had no problems with defendant’s plans to build and then changed her mind after completion)

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defenses to equitable servitude

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a. Allows each lot owner in a subdivision to enforce a restriction on use against every other lot owner in the subdivision (e.g., use is limited to single family residences)
b. Requirements for Enforcement:
i. Intent to impose the restriction (servitude) on every lot in the subdivision
1. I.E., Through a common building plan, the fact that most of the deeds contain the restriction, pattern of development on the lots, etc.
ii. Notice: defendant lot holder had notice of the promise contained in the prior deeds
1. Actual, Constructive, or Inquiry

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implied recipricoal servitude

Front 72

termination of covenants:

a. Deed of Release
b. Where the benefited and burdened lands come together under the same owner (unity of ownership/merger)
c. Changed Conditions
i. Can void/terminate a restriction only if all of the lots in the subdivision are affected

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termination of covenants and servitudes

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adverse possession:

continious; open and notorious; actual; exclusive; hostile

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adverse possession

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i. If a true owner is suffering from infancy (is a minor), incarceration, or insanity at the time adverse possession begins, the statutory period will not start to run until the true owner is free of the disability

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adverse possession tacking

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adverse possession:

i. Time Periods
1. One adverse possessor may tack on to his time with the land his predecessor’s time, so long as there is privity.
2. Tacking is not allowed when there has been an ouster.
d. There can be no adverse possession claimed against government-owned land

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adverse posssession: tacking

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conveyancing:

1. A contract for the sale of land must:
a. Be in writing;
b. Include a description of the property transferred;
c. Include the parties involved and the price; and
d. Signed by the party to be bound.

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land sale contracts: statute of frauds

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conveyancing:

a. If after a contract is signed, but before closing, something destroys the property (e.g., fire), the risk is allocated to the buyer, even if the seller remains in possession/control of the property
i. Exception: If the seller caused the destruction, then the seller is responsible for the loss

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land sale contract: risk of loss

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conveyancing:

1. Seller must deliver, upon closing, proof of valid legal title (tangible evidence of title) that a reasonably prudent buyer would accept
2. Title free from reasonable doubt
3. In order for title to be marketable, it must be free of encumbrances (e.g., easements, restrictive covenants, mortgages, private restrictions) other than those that have already been disclosed to the buyer
4. Unmarketable if the property violates a zoning ordinance.

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land sale contract: marketable title

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conveyancing:

5. Unmarketable for failing to disclose latent material defects. This is to say that seller is responsible for his material lies and material omissions.
6. Title which is subject to an unreasonably burdensome risk of litigation is not marketable, even if the purchaser would most likely prevail in the litigation (court will not require a buyer to “purchase a lawsuit” by ordering specific performance)
7. The land contract contains no implied warrantees of fitness or habitability. the common law norm is Caveat Emptor “buyer beware”.
a. Exception: the implied warranty of fitness and workmanlike construction applies to the sale of a new home by a builder vendor.

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land sale contract - marketable title

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conveyancing:

1. Execution of Deed: (in writing signed by seller and describe land with sufficiency)
2. Delivery of Deed (intent to pass and acceptance)

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Deed Formalities

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Conveyancing:

1. Grantor makes no promises regarding title and grantee receives whatever interest the grantor has

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quitclaim deed

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conveyancing:

i. Grantor promises that she owns the estate she purports to convey (both title and possession)

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general warranty: present covenant of seisen

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conveyances:

i. Grantor promises that she has the authority to make a grant (that she has title). No temporary restraints on grantors power to sell.

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general warranty: present covenant of the rigth to convey

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conveyances:

i. Grantor promises there are no encumbrances on the land other than those previously disclosed to the buyer

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generaly warranty: present covenant against encumbrances

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conveyances:

The future covenants are breached only upon actual disturbance of the grantee’s possession. They run with the land and are enforceable by all subsequent remote grantees who are in privity of estate (i.e., who succeeded to the same interest in the land as was held by the covenanting grantor)

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three future covenants

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conveyances:

i. Grantor promises that the grantee will not be disturbed in possession by a third party’s lawful claim of title

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future covenant of quiet enjuoyment

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conveyances:

i. Grantor promises to defend against reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title

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future covenant of warranty

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conveyances:

i. Grantor promises to perform acts reasonably necessary to perfect the title if later found to be imperfect.

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future covenant of further assurances

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conveyances:

1. In many states, use of the word “grant” in a deed creates by implication two limited assurances against acts of the grantor (Two promises that grantor makes only on behalf of himself):
a. Grantor promises that the grantor has not conveyed the same estate to anyone other than the grantee; and
b. That the estate is free from encumbrances made by the grantor

Back 89

special warranty deed

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recording:

purchaser for value: without notice (actual, record, inquiry)

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BFP

Front 91

recording:

1. A subsequent bona fide purchaser (person who pays full value and has no actual, constructive, or inquiry notice of the prior instrument) prevails over a prior grantee who failed to record before the BFP took (even if the prior grantee records before the BFP gets around to recording)

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notice statute

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recording:
1. Whoever records first will keep the property (do not have to be a good faith purchaser, but must be the first to record)

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race statute

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recording:

1. A subsequent bona fide purchaser who took without notice prevails over a prior grantee only if he records before the prior grantee (BFP takes without notice and records first)

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race notice statute

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Security Interests in RP:

A mortgage is a conveyance of a security interest in land, intended by the parties to be for security of a debt.
1. Two Elements
a. Debt
b. Voluntary Transfer of a lien in debtors land to secure the debt.
2. Legal Mortgage: evidenced by a written instrument.
3. Equitable Mortgage (must be foreclosed on like a mortgage and receives all of the protections of a mortgage)
a. When a loan is given with a promise to reconvey the property back to the debtor once the debt is paid (deed given to secure the loan)

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mortgage

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security interests in RP:

1. Given by the debtor to a third party trustee, who holds the deed of trust until the loan is paid in full
2. If the loan is not paid, the trustee can:
a. Obtain a court order for a foreclosure sale of the property; or
b. Sell the property himself at a public auction

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deed of trust

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security interests in RP:

1. The mortgagee (lender) can always freely transfer the note and the mortgage will always follow the note it secures
2. Holder in Due Course Rule: take the note free from any personal defenses that could have been raised against the original mortgagee.
a. To be treated as a holder in due course:
i. The note must be negotiable
1. Payable to the named mortgagee
ii. The original note must be endorsed by the named mortgagee
iii. The original note must be delivered to the transferee/purchasing bank
iv. The transferee/purchasing bank must take the note in good faith and w/o notice of any illegality
v. Transferee must pay value for it (amount more then nominal)

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when mortgage (lender) makes a transfer

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i. The mortgagee must foreclose by proper judicial proceeding.
ii. At foreclosure the land is sold and proceeds go to satisfy the debt. If the mortgage is foreclosed on but it doesn’t result in enough money to pay off the mortgage, the creditor (mortgagee) can sue the borrower/debtor personally for the balance due

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foreclosure of a mortgage

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Wipes out all junior interests (mortgages, leases, easements, etc. that came after the one being foreclosed on), but does not wipe out senior interests (mortgages, leases, easements, etc. that came before the one being foreclosed on)
1. At the foreclosure sale, the buyer will take the property subject to the senior interests that continue in place (subject to the risk that if they aren’t paid, the senior interests will foreclose)

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foreclosure of a mortgage:

effects of foreclosure on various interests

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iv. Priority of Payment of the Proceeds from a Foreclosure Sale
1. Costs of foreclosure (attorney, trustee, etc.)
2. The mortgage being foreclosed on
3. Junior interests that are a party to the foreclosure sale (in their order of priority)
4. Anything left goes to the land owner (mortgagor)
v. Priorities
1. As a creditor, you must record. Until you properly record your mortgage you have no priority.
2. Once recorded, priority is determined by the norm of “first in time first in right”.
3. **The purchase money mortgage: a mortgage given to secure a loan that enables the debtor to acquire the encumbered land. He has first priority as to the parcel he financed.
4. Subordination Agreements: Are permissible. A senior creditor may agree to subordinate its priority to a junior creditor

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foreclosure of a mortgage

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(applies to property that borders a lake or stream)
1. Owner may use all the water needed for domestic purposes
2. Owner is limited to reasonable use for non-domestic purposes (i.e., commercial or industrial uses)

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water rights: riparian rights

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(water belongs to the state but can gain individual right to use)
1. The first person who makes a beneficial use of water from a lake or stream has the right to continue this use against those who come later, as long as the use continues
2. Priority of Beneficial Use: first in time, first in writing.

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water rights: prior appropriation

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b. Underground Water (percolating water or well water)
i. Landowner is entitled to make reasonable use of ground water, but the landowner must use it on the property and not export it elsewhere
c. Surface Water (runoff or flood water) (two competing approaches)
i. Common Enemy Approach
1. Landowner can do anything he wants with the floodwater, whether reasonable or not

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water rights

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a. Trespass: invasion of land by tangible physical object.
i. Remove Trespassor: bring an action for injectment.
b. Private Nuisance: substantial and unreasonable interference with another’s use and enjoyment of land.
i. Does not require tangible physical invasion, odors and noise can give rise to a nuisance but not a trespass.

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possessors rights

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a. Rule: Governments Fifth Amendment power, to take private property for public use in exchange for just compensation.
i. Explicit Takings: acts of governmental condemnation. Example: the government condemns your land to make way for a public highway.
ii. Implicity Takings: a governmental regulation that, although not intended to be a taking, has the same effect.
b. Remedy for a Regulatory taking:
i. Government must either compensate the owner for the taking, or
ii. Terminate the regulation and pay the owner for damages that occurred while it was in effect.

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eminent domain

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a. Pursuant to police powers, government may enact statutes to reasonably control land use.
i. The Variance: The principal means to achieve flexibility in zoning.
1. Proponent of variance must show:
a. Undue Hardship
b. In Fairness to her neighbors variance won’t work detriment to surround property values.

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zoning

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ii. The Nonconforming Use: a once lawful, existing use now deemed nonconforming by a new zoning ordinance. It cannot be eliminated all at once, unless just compensation is paid. Otherwise, it could be deemed an unconstitutional taking.
iii. Unconstitutional Exactions: Exactions are those amenities that government seeks in exchange for granting permission to build. Must be reasonably related to both in nature and scope to the impact of the proposed development.

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zoning