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181 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is an "inter vivos gift"
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An inter vivos gift (a gift "between the living") is a gift in which a living donor makes an immediately effective donative transfer of an object of property to a living donee
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Inter Vivos = IV = Immediately Vests -- the gift is an immediately effective transfer
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Inter vivos Gift e.g.
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John's son graduates from school. In recognition of his son's accomplishments, John buys a car from his son, titles it in his son's name, and hands his son the keys to the car saying, "Congrats! This is yours."
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John has made an inter vivos gift of the car to his son.
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Inter vivos Gift e.g.
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On his daughter's BDAY, John hands his daughter a watch that he inherited from his mother, saying "Happy BDAY! I want you to have my mom's watch."
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John has made an inter vivos gift of the watch to his daughter.
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Inter vivos Gift e.g.
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Joh returns home from work with a vase of roses and hands them to his wife saying "I love you."
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John has made an inter vivos gift of the flowers to his wife
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Elements Needed to Establish an Inter Vivos Gift
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There are 3 elements needed to establish an Inter Vivos gift:
1 - Donative Intent 2 - Delivery 3 - Acceptance |
3 elements = Ivan Valky DIED After [he got his gift]
Inter Vivos = Donative Intent, Effective Delivery, Acceptance |
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Inter Vivos Gift
Donative Intent |
The donor must have the intent to make a present transfer of ownership of the property to the donee
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Inter Vivos Gift
Delivery |
The donor mut make an EFFECTIVE DELIVERY of the object of the gift to the donee.
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Inter Vivos Gift
Acceptance |
The donee must accept the object of the gift. Acceptance of a gift is usually presumed where the object of the gift is beneficial to the donee.
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Acceptance is preumed.
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The Necklace
In February, Mayer tells his daughter (who is a law student) "If you make an A in Property, I'll give you a diamond necklace." What has Mayer done? |
Issue: Did Mayer's statement create an effective inter vivos gift?
Rule: An inter vivos gift is a gift in which a living donor makes an immediate, effective donative transfer of a property interest. Rule: There are three elements necessary to establish an effective IV gift: (1) Donative Intent, (2) Delivery, and (3) Acceptance. Here, acceptance is presumed since a watch is a beneficial thing. Rule: For a valid inter vivos gift, Donative Intent must make a present transfer of ownership of the property to the donee. App: Here, Mayer merely transferred a potential future possessory interest in the necklace. His words however, did not create an immediate transfer of his possessory interest in the neckless to his daughter. Rule: For a valid inter vivos gift, the donor must make Effective Delivery of the object to the donee. App: Here, there was no delivery. Conc: Therefore, Mayer's did not effectively transfer an inter vivos gift because there was neither donative intent nor effective delivery. |
First, Mayer does not have the intent to make a present transfer of ownership (i.e., an immediately effective transfer at the time of his statement). Instead, Mayer's intent is to make a gift (possibly) to his daughter at a future date. Second, even assuming that Mayer already owns the necklace he plans to give his daughterWhen Mayer makes the statement to his daughter "If you make an A in Property, I'll give you a diamond necklace," this does not make an effective gift to his daughter.
At the time he makes the statement, Mayer has not made an effective gift to his daughter, as two critical elements of an inter vivos gift are unsatisfied. First, Mayer does not have the intent to make a present transfer of ownership (i.e., an immediately effective transfer at the time of his statement). Instead, Mayer's intent is to make a gift (possibly) to his daughter at a future date. Second, even assuming that Mayer already owns the necklace he plans to give his daughter, there has been no delivery of the necklace. |
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The Necklace, Part II
Mayer's daughter works fiendishly and manages to get an A in Property. Upon hearing the news, Mayer says "Great. There's a diamond necklace in my safe at home, and it's yours." Has Mayer made an effective gift of the necklace? |
The issue is whether Mayer's statement constitutes an effective inter vivos gift of the neckless.
Rule: An inter vivos gift is a present, immediate transfer of a property interest between two living persons. Rule: There are 3 requirements to create an effective inter vivos gift: (1) donative intent, (2) effective delivery, and (3) acceptance of the gift by the donee. Here, acceptance is presumed because the gift is of value. Rule1: For a valid inter vivos gift, the donor must have a 'donative intent' to make an immediate, present transfer of his possessory interest in the property to the donee. App1: Here, Mayer's statement likely demonstrates his intention to make an immediately effective gift, and even his believe that he may in fact have already transferred his possession by just saying those words to his daughter. Rule2: To consecrate a valid inter vivos gift, the donor must also make an effective deliver of the the object to the donee. App2: Here, whether Mayer has made a valid inter vivos gift will likely hinge on whether the delivery was sufficient to have been deemed effective. ....Go into Different methods of Delivery.... |
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In the law of gifts, the Intent & Delivery requirements are closely related.
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The Intent Requirement exists to confirm the donor's SUBJECTIVE INTENT to make a PRESENT TRANSFER of ownership.
In contrast, the Delivery requirement exists to assure that there is an ACT or ACTS that provide some OBJECTIVE MANIFESTATION of the donor's subjective intent -- i.e. some action that corroborates the donor's intent to make a presently effective gift. |
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Inter Vivos Gifts
Effective Delivery Methods of Delivery |
Symbolic, Actual, Constructive
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SAC - Gift my ball SAC
Symbolically, Actually, and Constructively. And I want Mrs. Newman to Gruen all over it... |
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Inter Vivos Gifts
Effective Delivery Symbolic Delivery |
Trad/CL Rule:
Symbolic delivery is insufficient. Modern Ruel: If the gift would be IMPRACTICAL or IMPOSSIBLE to physically deliver, something representing the gift must be delivered (usually a piece of paper) |
For Symbolic Delivery of Inter Vivos Gifts in JXNs that follow the Modern Rule, the most common examples include: photos of the item or written inventory of items being delivered.
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Inter Vivos Gifts
Effective Delivery Actual Delivery |
Rule: Generally, a donor must actually make a physical delivery of the gift for it to be valid.
A mere agreement for delivery is insufficient. |
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Inter Vivos Gifts
Effective Delivery Constructive Delivery |
Rule: If it would be impractical or impossible to physically transport the gift, the donor may deliver some item which GIVES ACCESS to and CONTROL OVER the item
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In JXNs that allow for Constructive Delivery of Inter Vivos gifts, the most common examples are keys to a safe deposit box, car, etc.
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Inter Vivos Gifts
Effective Delivery Constructive Delivery Newman v. Bost |
Construed delivery narrowly, holding that constructive delivery was permissible for a bureau (too heavy to move) but not to the life insurance policy inside the bureau
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This case is stupid. They hated on women.
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Inter Vivos Gifts
Effective Delivery Constructive Delivery Gruen v. Gruen |
The court construed a letter from father to son stating that father wanted to reserve life estate in a painting, with a remainder to his son, as effective constructive delivery of the painting EVEN THOUGH son never took physical delivery of the painting during his lifetime
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Inter Vivos Gifts
Donative Intent Berman's Rule |
The donor must evince a clear intent to make a gift. Such clear intent rebuts the LEGAL PRESUMPTION that people do not usually give things away.
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The Necklace, Part III
The importance of a separate delivery requirement can be seen by a different example, again involving Mayer, his daughter, and a diamond necklace. Suppose that Mayer's daughter didn't get that A in Property, and Mayer didn't give her the necklace. Angry about her father's decision, Mayer's daughter decides to sue him, and she conspires with her best friend Emily --- getting Emily to agree to testify that Mayer made the following statement in Emily's presence: "Great. There's a diamond necklace in my safe at home, and it's yours." If Mayer's daughter and Emily are believable witnesses, they may even be able to raise an inference in a juror's mind that Mayer in fact had the subjective intent necessary to make a valid gift of the necklace. If that inference alone were sufficient to give rise to a valid gift, Mayer could lose ownership of the necklace due to a fraudulent gift claim. |
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Inter Vivos Gift
Effective Delivery Policy |
Inter Vivos Gifts = Exceptions to the SOF
The delivery requirement exists in significant part to address the risk posed by fraudulent claims of gift. By requiring that Mayer make an effective delivery of the necklace, the law makes it less likely that Mayer might lose title to the necklace based upon fabricated claims that Mayer intended to made a gift of it. In this way, the delivery requirement serves an evidentiary function similar to that served by the Statute of Frauds. The donor's acts of delivery provide objective confirmation of the donor's subjective intent --- making us confident that the donor really did intend to make an immediately effective gift. |
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Inter Vivos Gift
Effective Delivery Symbolic Delivery - Policy |
A symbolic delivery occurs when the donor transfers to the donee something that is a "symbol" (or substitute) for the object of the gift.
Courts sometimes permit symbolic delivery where manual delivery is impossible or impractical. The best example of symbolic delivery is a deed to land. In feudal times, transfer of land occurred by livery of seisin --- in which the grantor and grantee physically went onto the land, and the grantor handed a stick or clod of dirt to the grantee and uttered appropriate words of conveyance. Today, a grantor transfers land by executing and delivering to the grantee a written deed of conveyance --- a process that typically takes place in the office of a lawyer, banker, or title insurer rather than on the land itself. Essentially, the deed is a "symbol" of ownership of the land, and the law treats the delivery of the deed as a delivery of title to the land itself. |
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The Briefcase
As David began a sales assistant job after college, David's father (Alan) said to him, "You need a briefcase in order to project the appropriate image." When David responded that he liked the one that Alan used, Alan said, "Fine, you can have it. I'll get a new one. The combination is the same as my birthday --- 3851." David said "Thanks, Dad." This conversation took place while David was visiting his father's home. At the time of this conversation, the briefcase was sitting on Alan's dining room table, 10 feet away. When he left to return to his apartment, David did not physically pick up the briefcase. Two days later, David returned to pick up the briefcase, but his father said "I've changed my mind. Here's $200 to go buy your own, but I'm keeping this one." If David sued to obtain possession of the briefcase, the court would most likely conclude that .... |
That there was no valid gift because Alan did not make an effective delivery.
The law of gifts typically requires manual delivery of the subject matter of the gift, unless manual delivery is impossible or impractical under the circumstances. Here, no such circumstances are present. The briefcase was right in the same room with Alan and David. There is no apparent reason that Alan could not have picked up the briefcase and physically handed it to his son. As he did not do so, the most likely result is that the alleged gift is invalid for lack of an effective delivery. |
Because the delivery requirement serves such an important evidentiary function (objective corroboration of donative intent), courts tend to require manual delivery --- whenever possible or practical --- in order to provide the best possible assurance or corroboration of the donor's intent.
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The Car
On the weekend of his daughter's 21st birthday, Mayer flew from his home on the East Coast to visit his daughter (at college in the western mountains) for the weekend. During the visit, Mayer hands her the keys to his 1982 Corvette and says "I know you've always loved my '82 'Vette. Well, Happy Birthday, it's yours. Here are all of the keys." At the time, the Corvette is sitting in a warehouse near Mayer's home (Mayer is a collector of vintage cars and keeps them in this warehouse). |
By delivering the keys, Mayer has made a valid gift of the car.
Although the law typically requires the donor to manually deliver the object of the gift, manual delivery would be very impractical under the circumstances. Mayer's delivery of the keys to the car --- which give his daughter the ability to exercise control over the car --- should be sufficient to constitute delivery of the car. |
It would also be possible, in this example, that Mayer could make an effective gift of the car by symbolic delivery --- by taking the title certificate for the car, signing that certificate as an assignor of the car, and delivering the title certificate to her as grantee.
"Title certification" statutes in all states provide that motor vehicles are to be registered with the state and covered by title certificates. Under these certification statutes, the title certificate is treated as being symbolic of ownership of the vehicle. As a result, if Mayer gives his daughter possession of the title certificate, properly assigned to her on the face of that certificate, this would be sufficient to allow her to exercise legal dominion and control over the car, and thus should be sufficient to constitute a valid symbolic delivery of the car. |
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Inter Vivos Gifts
Donor's Remorse Revocation of Gift |
Once the gift is made, the donor cannot change his/her mind and revoke the gift (unless the gift has been made expressly subject to such a condition and that condition is legally enforceable).
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The Painting
On the birthday of his daughter Anne, Steve hosted Anne for dinner at his home. During dinner, Steve handed Anne a note saying "I want you to have the Monet." [A Monet painting, approximately 24" x 30 " in size, hangs on the wall in Steve's living room.] Anne said "Thanks, Dad." After dinner, Anne returned home. At all times, the painting remained on the wall in Steve's living room. Two weeks have now passed. |
Steve has probably failed to make a sufficient delivery of the painting.
Anne might argue that the delivery of the note should constitute a valid constructive or symbolic delivery of the painting. Traditionally, however, courts have held that constructive delivery will suffice only where actual physical delivery of the object of the gift is impossible or impracticable. Here, the painting was not so large that Steve could not have physically delivered it. Thus, Steve's failure to deliver the painting would mean that he has not yet made a valid gift of the painting. |
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Inter Vivos Gifts
Effective Delivery Delivery to a 3P (Escrow) |
An escrow arrangement can also be used in a gift transaction as well. In certain circumstances, delivery of a gift to a third person who acts as an agent for the donee will suffice to satisfy the delivery requirement, and will result in a valid gift --- at least in those circumstances where all of the elements of a valid gift are satisfied.
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The Bible
Jerry decided to give his favorite Bible to Alice (the daughter of his best friend Bob). Jerry was motivated to make the gift because Alice, who had spent many hours babysitting Jerry's children, was about to go off to college to study engineering. Jerry went over to Bob's house to give Alice the Bible, and was disappointed to learn that Alice had left for college earlier that day. Jerry handed the Bible to Bob and said, "Here, I want her to have this. Please hold it for her." |
Jerry has made a valid gift to Alice.
By physically delivering the Bible to Bob, accompanied by the statement "Here, I want her to have this. Please hold it for her," Jerry has effectively placed the Bible beyond his dominion and control. There is no indication that Jerry intends anything less than a presently effective gift to Alice. Under the circumstances, delivery of the Bible to her father on her behalf seems a perfectly acceptable surrogate for delivery to her. If there were any reason to think that Jerry could control Bob's future conduct --- such as by forcing Bob to return the Bible rather than hold it for Alice --- then we might be inclined to think that Jerry has not placed the Bible beyond his dominion and control (and thus that there would have been no delivery of the Bible). But the mere fact that Bob and Jerry are friends is not enough to justify such a conclusion. Bob will be treated as an agent of his daughter, and the gift will be treated as valid. |
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Inter Vivos Gift
Effective Delivery Policy |
Inter Vivos Gifts = Exceptions to the SOF
The delivery requirement exists in significant part to address the risk posed by fraudulent claims of gift. By requiring that Mayer make an effective delivery of the necklace, the law makes it less likely that Mayer might lose title to the necklace based upon fabricated claims that Mayer intended to made a gift of it. In this way, the delivery requirement serves an evidentiary function similar to that served by the Statute of Frauds. The donor's acts of delivery provide objective confirmation of the donor's subjective intent --- making us confident that the donor really did intend to make an immediately effective gift. |
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Inter Vivos Gift
Effective Delivery Symbolic Delivery - Policy |
A symbolic delivery occurs when the donor transfers to the donee something that is a "symbol" (or substitute) for the object of the gift.
Courts sometimes permit symbolic delivery where manual delivery is impossible or impractical. The best example of symbolic delivery is a deed to land. In feudal times, transfer of land occurred by livery of seisin --- in which the grantor and grantee physically went onto the land, and the grantor handed a stick or clod of dirt to the grantee and uttered appropriate words of conveyance. Today, a grantor transfers land by executing and delivering to the grantee a written deed of conveyance --- a process that typically takes place in the office of a lawyer, banker, or title insurer rather than on the land itself. Essentially, the deed is a "symbol" of ownership of the land, and the law treats the delivery of the deed as a delivery of title to the land itself. |
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The Briefcase
As David began a sales assistant job after college, David's father (Alan) said to him, "You need a briefcase in order to project the appropriate image." When David responded that he liked the one that Alan used, Alan said, "Fine, you can have it. I'll get a new one. The combination is the same as my birthday --- 3851." David said "Thanks, Dad." This conversation took place while David was visiting his father's home. At the time of this conversation, the briefcase was sitting on Alan's dining room table, 10 feet away. When he left to return to his apartment, David did not physically pick up the briefcase. Two days later, David returned to pick up the briefcase, but his father said "I've changed my mind. Here's $200 to go buy your own, but I'm keeping this one." If David sued to obtain possession of the briefcase, the court would most likely conclude that .... |
That there was no valid gift because Alan did not make an effective delivery.
The law of gifts typically requires manual delivery of the subject matter of the gift, unless manual delivery is impossible or impractical under the circumstances. Here, no such circumstances are present. The briefcase was right in the same room with Alan and David. There is no apparent reason that Alan could not have picked up the briefcase and physically handed it to his son. As he did not do so, the most likely result is that the alleged gift is invalid for lack of an effective delivery. |
Because the delivery requirement serves such an important evidentiary function (objective corroboration of donative intent), courts tend to require manual delivery --- whenever possible or practical --- in order to provide the best possible assurance or corroboration of the donor's intent.
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The Car
On the weekend of his daughter's 21st birthday, Mayer flew from his home on the East Coast to visit his daughter (at college in the western mountains) for the weekend. During the visit, Mayer hands her the keys to his 1982 Corvette and says "I know you've always loved my '82 'Vette. Well, Happy Birthday, it's yours. Here are all of the keys." At the time, the Corvette is sitting in a warehouse near Mayer's home (Mayer is a collector of vintage cars and keeps them in this warehouse). |
By delivering the keys, Mayer has made a valid gift of the car.
Although the law typically requires the donor to manually deliver the object of the gift, manual delivery would be very impractical under the circumstances. Mayer's delivery of the keys to the car --- which give his daughter the ability to exercise control over the car --- should be sufficient to constitute delivery of the car. |
It would also be possible, in this example, that Mayer could make an effective gift of the car by symbolic delivery --- by taking the title certificate for the car, signing that certificate as an assignor of the car, and delivering the title certificate to her as grantee.
"Title certification" statutes in all states provide that motor vehicles are to be registered with the state and covered by title certificates. Under these certification statutes, the title certificate is treated as being symbolic of ownership of the vehicle. As a result, if Mayer gives his daughter possession of the title certificate, properly assigned to her on the face of that certificate, this would be sufficient to allow her to exercise legal dominion and control over the car, and thus should be sufficient to constitute a valid symbolic delivery of the car. |
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Inter Vivos Gifts
Donor's Remorse Revocation of Gift |
Once the gift is made, the donor cannot change his/her mind and revoke the gift (unless the gift has been made expressly subject to such a condition and that condition is legally enforceable).
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The Painting
On the birthday of his daughter Anne, Steve hosted Anne for dinner at his home. During dinner, Steve handed Anne a note saying "I want you to have the Monet." [A Monet painting, approximately 24" x 30 " in size, hangs on the wall in Steve's living room.] Anne said "Thanks, Dad." After dinner, Anne returned home. At all times, the painting remained on the wall in Steve's living room. Two weeks have now passed. |
Steve has probably failed to make a sufficient delivery of the painting.
Anne might argue that the delivery of the note should constitute a valid constructive or symbolic delivery of the painting. Traditionally, however, courts have held that constructive delivery will suffice only where actual physical delivery of the object of the gift is impossible or impracticable. Here, the painting was not so large that Steve could not have physically delivered it. Thus, Steve's failure to deliver the painting would mean that he has not yet made a valid gift of the painting. |
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Inter Vivos Gifts
Effective Delivery Delivery to a 3P (Escrow) |
An escrow arrangement can also be used in a gift transaction as well. In certain circumstances, delivery of a gift to a third person who acts as an agent for the donee will suffice to satisfy the delivery requirement, and will result in a valid gift --- at least in those circumstances where all of the elements of a valid gift are satisfied.
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The Bible
Jerry decided to give his favorite Bible to Alice (the daughter of his best friend Bob). Jerry was motivated to make the gift because Alice, who had spent many hours babysitting Jerry's children, was about to go off to college to study engineering. Jerry went over to Bob's house to give Alice the Bible, and was disappointed to learn that Alice had left for college earlier that day. Jerry handed the Bible to Bob and said, "Here, I want her to have this. Please hold it for her." |
Jerry has made a valid gift to Alice.
By physically delivering the Bible to Bob, accompanied by the statement "Here, I want her to have this. Please hold it for her," Jerry has effectively placed the Bible beyond his dominion and control. There is no indication that Jerry intends anything less than a presently effective gift to Alice. Under the circumstances, delivery of the Bible to her father on her behalf seems a perfectly acceptable surrogate for delivery to her. If there were any reason to think that Jerry could control Bob's future conduct --- such as by forcing Bob to return the Bible rather than hold it for Alice --- then we might be inclined to think that Jerry has not placed the Bible beyond his dominion and control (and thus that there would have been no delivery of the Bible). But the mere fact that Bob and Jerry are friends is not enough to justify such a conclusion. Bob will be treated as an agent of his daughter, and the gift will be treated as valid. |
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The Necklace, Part III
Mayer hands his daughter a diamond necklace and says "Here, this is yours. And you can keep it forever as long as you get an A in Property." Regrettably for her, Mayer's daughter earns a B in Property. Mayer demands that his daughter return the necklace, but his daughter refuses. If Mayer sues his daughter to recover possession of the necklace, Mayer may very well lose his lawsuit. Based on what you learned earlier in this lesson, which reason best explains why? |
Oral Contracts are unenforceable.
With inter vivos gifts of personal property --- which tend to occur somewhat more informally --- such written expressions of intent are less common, and thus the risk of "donor's remorse" is more significant. As a result, courts tend not to enforce oral conditions upon inter vivos gifts, except in cases where the donee admits the existence of the condition or there is other compelling and reliable evidence of the oral condition. |
With gifts of land, of course, the donor/grantor can simply express the condition right on the face of the deed. For example, Mayer could execute and deliver to his daughter a deed of gift purporting to convey CALIacre "to my daughter, but if she does not make an A in Property, then her estate shall terminate and grantor may reclaim his former estate." In such a case, there would be no question about whether Mayer's intent was to make an absolute gift or a conditional gift --- his intention to make a conditional gift is expressed in writing, right on the face of the deed! Assuming that the deed is recorded (as is typically the case), any third party dealing with Mayer's daughter would thus be aware of the condition upon her estate.
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The Engagement Ring
Steve and Michelle became engaged in January and planned to be married in May. Upon their engagement, Steve gave Michelle a diamond engagement ring. In March, Michelle decided that she did not want to get married to Steve after all, and she called off the wedding. Steve asked Michelle to return the ring, but Michelle refused. When she refused, Steve filed suit against her to recover the ring. |
The gift of a diamond ring is widely and customarily understood to be symbolic of a commitment to marry.
Steve can recover the ring, as the gift was subject to an implied condition that Michelle would marry him. |
In rare situations, the circumstances surrounding a gift will provide compelling evidence that the donor's intent was conditional in nature --- even in the absence of any written statement of that condition.
The engagement ring provides one example of such an implied condition. The gift of a diamond ring is widely and customarily understood to be symbolic of a commitment to marry. Thus, we would expect that Steve's action of giving such a ring to Michelle in conjunction with their decision to marry would be consistent with an intent by Steve to condition Michelle's continued ownership of the ring upon their subsequent marriage. |
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The gift of a diamond ring is widely and customarily understood to be symbolic of a commitment to marry.
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Issue: The issue is whether Stan made an effective inter vivos gift during his lifetime to Alan.
Rule: An inter vivos gift is a gift between two living people where the donor exhibits (1) donative intent (2) makes an Effective Delivery to the Donee such that there was an immediate transfer of possession, and (3) the Donee accepted the gift. Acceptance is implied because the watch is an item of value and was asked for by Alan. Application: Here, there was insufficient donative intent and effective delivery for Stan's statement to effectuate a valid inter vivos gift. App: "Consider it yours" provides some evidence that Stan had an intent to make an immediately effective gift of the watch. Nevertheless, Stan never physically delivered the watch to Alan --- and thus never took any action to corroborate that he really did intend to make an immediately effective gift of the watch to Alan. As a result, most courts would say that the alleged gift failed for lack of physical delivery of the watch. |
The problem of The Watch demonstrates again the two functions that a manual (physical) delivery requirement might serve. First, manual delivery serves to provide objective corroboration of the donor's intent to make an immediately effective inter vivos gift. If Stan had immediately delivered physical possession of the watch to Alan, it would have objectively corroborated Stan's statement in a fashion that would have left absolutely no doubt about Stan's donative intent.
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The Bicycle
Boris and Alex were conversing on the telephone when Boris said "I have to go, because I need to go buy a bike before the store closes." Alex said, "Don't do that. I have one sitting in my garage that I never use. You can have it. I'll put it on my back porch, and you can pick it up tomorrow on your way to work." Boris says, "Great." Alex puts the bike on the back porch as he said, and left for work the next morning. On his way to work, Boris picked it up and took it home. Upon returning home, Alex saw numerous people out riding bikes, and had second thoughts about giving the bike to Boris. Can Alex demand that Boris return the bike? |
No. Alex has made a valid and binding inter vivos gift of the bike.
Alex's statement "I have one sitting in my garage that I never use. You can have it. I'll put it on my back porch, and you can pick it up tomorrow on your way to work" reflects his intention to make a present gift of the bike. At the time, immediate physical delivery was impossible or impractical, as Boris and Alex were not in the same place. Thus, immediate completion of the gift was delayed only by time and circumstance --- not because Alex was reserving the right to change his mind. Alex made an act of delivery by placing the bike on his porch as he stated, and that delivery was completed when Boris picked up the bike the next morning as Alex had suggested. That resulted in a valid inter vivos gift, and Alex cannot revoke the gift. |
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The Toxic Waste Problem
Arthur owned a small farm, including four low-lying acres that were unsuitable for cultivation. For several years, Arthur used this four-acre area as a dump and has allowed his neighbors to do so as well. Last month, Arthur executed a deed purporting to convey the land to his son, Earl. Arthur recorded the deed and then mailed it to his son (who lived in another state) along with a note saying, "Congratulations on your new promotion. I want you to have the farm." Later that same day, Arthur learned that the state environmental enforcement agency had discovered significant quantities of toxic hazardous substances had been dumped on the land, and had ordered the owner to clean up the land at a cost of nearly $150,000. When it learned of the recorded deed to Earl, the environmental enforcement agency served Earl with notice of the order requiring the cleanup. [Assume that the state agency can legally compel the owner of the land to pay the cost of cleaning up the contamination.] Must Earl perform the cleanup? |
No. Even though the law presumes acceptance of gifts, it only does so when the gifts are of a beneficial nature. Here the gift is far from beneficial, it's a financial liability. Therefore, Earl may RENOUNCE or REJECT the gift.
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What is a Testamentary Gift?
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A Testamentary Gift is a gift of property that takes effect to pass ownership (and gas) to the donee ONLY UPON THE DEATH OF THE DONOR
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Easements Defined
What is an Easement? |
The Restatement Third of the Law of Property describes easements in this way:
"an easement creates a non-possessory right to enter and use land in the possession of another and obligates the possessor not to interfere with the uses authorized by the easement." § 1.2.1. |
Put more simply, A is given a right to enter onto B's land and B may not interfere with that right.
Easements are often spoken of as "the privilege to use the land of another in a particular manner and for a particular purpose. |
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Easements Defined
Difference between USE rights and POSSESSORY rights |
The easement holder does not have a possessory interest because they merely have the right to use the land ONLY FOR A LIMITED PURPOE.
The owner of the land maintains his right to use and possess his land SO LONG AS those uses do not UNREASONABLY INTERFERE with the rights of the easement holder. |
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Easements Defined
Affirmative v. Negative Easements Generally |
Aff. E's entitles the holder to enter and use another's land.
Negative E's give the holder the right to prever an owner of land from using that land in a certain way. |
Affirmative easements are WAY more common than negative easements
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Easements Defined
Appurtenant Easements & Easements in Gross Generally |
Easement Appurtenant involves 2 parcels of land: one that is benefited by the EAS and one that is burdened by it.
An easement in gross involves only one piece of land, the burdened piece. The benefit in an EIG inures to a PERSON rather that to PROPERTY |
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Easements Defined
Exclusive Easements & Non-Exclusive Easements Generally |
Non-exclusive easement is one in which the owner does not have the right to exclusive use.
Exclusive Easement = duh. |
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Easements Defined
Express v. Implied Easements Generally |
3 Types of Implied Easements:
1 - Prior existing use 2 - EAS by Necessity 3 - EAS by Prescription |
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Two things ALL easements have in common
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First, if there is an easement there is always a burdened parcel of land, the land over, under, or on which the easement runs. The burden attaches to the land and passes with it to future owners in all but a few exceptions.
The easement is an encumbrance on the burdened land which will raise marketability of title and deed warranty issues at the time the land is to be sold. Second, because the law is burdening an owner's land, it will do so only in circumstances where the owner expressly agrees or where the strict legal requirements for implying an easement are present. A person desiring an easement can never force a neighboring landowner to accept an easement solely because the former wants or needs it. |
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A and B are adjacent land owners. A has an express easement over a driveway on B's property that allows A access to a road adjoining B's property. While A is doing some renovations on her property, she parks her car on the driveway in order to keep it from being damaged. A's car is not blocking or seriously hindering B's use of the driveway. A's use of the easement in this way is permitted.
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A's easement gives her a right to use the driveway for a limited purpose - access to the road. It does not give her a broad possessory right to use the driveway for other purposes. She needs B's permission for this additional use.
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A has an express easement over a driveway on B's property that allows A access to a road adjoining B's property. Now it is B who is parking his car at the edge of the driveway. Is B acting within his rights assuming the car does not block or seriously hinder A's access?
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Yes. B has the "possessory" estate. His right to use the driveway is limited only by the requirement that he not unreasonably interfere with A's use of her easement.
The facts tell us that A still has access. If B had parked so as to block or seriously hinder A's access, his action would be wrongful to A. |
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Affirmative Easement
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An affirmative easement entitles its holder to come upon the land of another for a LIMIT PURPOSE.
1) right of presence 2) limited purpose |
The key aspect of this entitlement is the RIGHT OF PRESENCE - over a road, path, use of a pipe, etc -- ON ANOTHER's LAND.
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Negative Easement
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1) No right of presence
2) VETO rights 3) over a Burdened/ Servient Parcel A Negative Easement gives its holder NO RIGHT to be present on another's land. It gives its holder the right to prevent an owner of land from using her own land in a certain way that would otherwise be permitted. |
Negative easements are often characterized as "veto" rights in the sense that they allow one landowner to veto the plans of another if those plans violate the terms of the negative easement.
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Appurtenant Easements
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An easement appurtenant is one that burdens one parcel of land to benefit another parcel of land.
The parcel ON, OVER, or UNDER which the easement runs is called the Burdened or Servient Parcel. The parcel for whose benefit the easement is created is called the Benefited Parcel. |
An Easement Appurtenant ALWAYS has both a dominant & servient parcel.
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Creation of Negative Easements
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Almost ALWAYS express.
VERY rarely by Implication. Therefore, where negative easements exist it is almost always because the servient landowner or a predecessor of the servient landowner agreed to the creation of the negative easement. |
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Creation of Negative Easements
Is desire to create a NEASE enough? |
No matter how strong the desire of a landowner to gain a negative easement over the land of an adjoining landowner, that desire will not be enough.
The servient landowner must give his or her permission for a negative easement to be created. |
I'm too tired to think of a better question for this.
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Creation of Negative Easements
If i want to create a Negative Easement over Fahey's Sweater Closet, what must I do? Let's say I want to restrict her ability to pick out red sweaters. |
I am trying to restrict the certain uses of adjoining land (the sweater grove).
I have 2 choices: 1 - if Fahey is willing to sell, I can buy her sweater grove (i.e. the adjoining land) If I own the adjoining land then I can control its use 2 - If the owner of the adjoining land is willing to grant a NEGATIVE EASEMENT, I may purchase it through which Fahey will limit her own use of her own property. In either case, it takes 2 to tango. To create a Negative Easement: D(+) and S(-) |
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Types of Negative Easements
CL/Mod |
CL/UK Rule
Only recognized 4 types (LAWS) Modern Rule (CVS) All states also recognize [AREA] (1) Conservation (2) View (3) Solar |
UK - LAWS - Light, Air, Water, and Support.
English courts were generally hostile to the notion that one landowner could have a legal right to prevent another landowner from engaging in otherwise lawful uses of his land. |
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XYZ Corporation has just completed construction of a luxury apartment complex on Greenacre. In order to take maximum advantage of the land, XYZ constructed the building right up to the side boundaries of the property as illustrated in the sketch.
XYZ has just learned that the owner of Redacre, RST Ltd., is planning to build an office building on Redacre that will completely block light from the windows of the apartments on the side of the apartment building that adjoins Redacre. XYZ knows that the rental value of those apartments will plummet if the proposed office building is erected. |
XYZ may seek a commitment from RST, binding on RST and its successors not to build within a specified number of feet of the common boundary between their two properties. RST may agree on behalf of itself and its successors.
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This is the classic negative easement for light. Notice that there are two parties to the agreement and that there are two parcels of land. RST is agreeing to burden its land -- by committing not to build within the specified area. XYZ's land -- and investment -- is being benefited by RST's commitment.
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ABC Development Company purchased Blueacre and constructed a forty-story office building. The building covers most of Blueacre. The adjacent landowner has announced plans to build a building of equivalent size, and excavation will begin in a month. ABC's attorneys have advised the company that the adjacent landowner will be strictly liable if any damage occurs to ABC's building as a result of lack of support due to the excavation. Indicate whether you agree or disagree.
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Right. The common law does not render an adjoining excavator strictly liable for damage to adjacent property with structures. The proper standard in the case where, as here, a building stands on the collapsed property, is negligence.
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Why are negative easements rare to come across?
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First, a negative easement is never implied. It therefore can only exist if it is expressly agreed to by the servient landowner.
Second, the law recognizes only limited types of negative easements and therefore a negative easement, restricting a landowner's use of her own land, is not available to limit a wide variety of uses of land, even if both the dominant and servient landowners agree to the limitation. Although the negative easement is not available for this purpose, the law does allow landowners to reach private agreements restricting their land through the creation of real covenants and equitable servitudes. |
the law does allow landowners to reach private agreements restricting their land through the creation of real covenants and equitable servitudes.
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When the benefit of an easement flows to adjacent land, that easement is called ...
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an easement appurtenant
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When the benefit of an easement flows to an individual (corporate or human), without regard to that person's ownership of the land, it is called...
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an easement in gross
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Easement Appurtenant
Rule |
The easement appurtenant is any easement which benefits the holder in his PHYSICAL use or enjoyment of HIS property
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Easement Appurtenant
Example |
B (-) grants A (+) the right to cross B's property so that A may reach his own property
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B's property = servient (-)
A's property = dominant (+) |
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Easement Appurtenant
Transferability |
Benefit of the Easement runs with the land (even if the deed doesnt mention the easement).
When (+) transfers his ownership of the land, the benefit of the easement will transfer with the land to the new owner. It will not stay with the old owner. |
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EAS APP Example:
B's land abuts a large lake stocked with fish. A's land also abuts the lake but does not easily allow boat access onto it. At A's request, B deeds "to A, his heirs and assigns" an easement of access to the lake over B's land. |
This is an easement appurtenant to B's land. B's land is the burdened/servient parcel; A's land is the benefited/dominant parcel
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Because this is an easement appurtenant, when A sells his property, the new owner will have the benefit of the easement because he now owns the dominant estate. A will lose the benefit because he no longer owns the dominant estate.
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Easements in Gross
Rule |
The easement in gross gives the holder ONLY a benefit of U/E over the Servient parcel. The holder DOES NOT own the adjacent parcel.
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Think: Sewage = GROSS
The classic example of easements in gross are those held by utility companies. The electric company, the gas company, the oil company, the phone company, and the cable company hold easements in gross to run lines or pipes over or under the property of their customers and others. These companies do not own adjacent land. They hold the easement for their commercial benefit. |
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Easements in Gross may exist in Non-commercial contexts as well.
If B were to grant an easement to his friend C, who lived across town, allowing C to park on & travel across B's property to gain access to the lake, C's easement would be personal to him. |
C would have an easement in gross.
B's parcel is the servient parcel. There is no dominant parcel. |
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Easements
Distinguishing Easements Appurtenant from Easements in Gross |
Where not obvious what type of easement was created, the starting point of your analysis is to FOCUS ON THE INTENTION OF THE PARTIES AT THE CREATION OF THE EASEMENT.
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Easements
Distinguishing Easements E.g. The grantee of the easement holder is an adjacent landowner... |
Creates an EAP if the intended benefit was intended to flow to an adjacent owner BC she is the owner.
EIG if the benefit of the easement is intended to flow to her personally (even though she owns the adjacent land). |
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Easements
Classification of Rule |
Maj/RST Rule:
Presumption that the easement is appurtenant, so the question will be whether the parties intended an easement in gross instead. |
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Easements
Classification of Clear Intent of Parties |
Language of the easement
e.g. deed might expressly state EIG or "held personally by the grantee" |
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Easements
Classification of UNCLEAR Intent of Parties |
1) Useful/Valuable (> U/V = EAPP)
2) Circumstances surrounding creation of the easement (e.g., when the easement is given "to A, my neighbor.") |
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Easements
Classification of Effect of Subsequent Events on Classification of Easements |
Subsequent events do not change the characterization of the easement as EAPP or EIG.
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e.g. Suppose that B gives his friend C an easement of access across B's land to reach the lake. At the time the EAS is created, C does not own any land near B's property. 2 years later, C buys a parcel adjoining B's property. C retains his easement over B's property as an EIG. It is NOT TRANSFORMED into an EAPP.
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A & B purchase Parcel 1 and build a restaurant. The restaurant is not visible from a nearby busy street. A & B seek and receive from C, the owner of Parcel 2, an easement allowing A & B to post a directional sign to their restaurant.
Two years later, A & B sold "all their right, title and interest in Parcel 1" to D. They then purchased a restaurant a few miles away. D reopened the restaurant on parcel 1. A & B change the sign on Parcel 2 to direct patrons to their new restaurant. D wants to replace the sign with one directing customers to his restaurant. Who holds the benefit of the easement AND THUS has the right to use of the sign? |
Issue: Who has the right to the Easement is determined by what type of EAS was granted by C to A&B.
R: An easement is the grant of an irrevocable, non-possessory property interest that entitles its holder to some form of use or enjoyment of another's land. R2: There are 2 types of easements: easements in gross and those which are appurtenant to the land. R3: An easement in gross gives the holder only a personal or commercial benefit that is not related to his use or enjoyment of the property. R4: An EAPP to the land is any easement which benefits the holder in his PHYSICAL Use or Enjoyment of his property. This seems the better answer. Not only does D have the presumption favoring appurtenant easements going for him, it also seems to be the case that the original purpose of the easement was to enhance a use on Parcel 1. As the owner of Parcel 1, D should hold the benefit of the easement and thus have the right to its use. Of course, this conclusion would be strengthened by finding in the original grant words to suggest the intention to create an appurtenant easement, such as "to A & B, their heirs and assigns." |
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D owns P1 on 6th Ave. and runs her hat business from that location. She leases property on 5th ave. as a warehouse for her hats. Immediately adjacent to P1 is P2, owned by T, Inc., which runs from 5th to 6th Ave. A large office building is on P2 and a central hallway runs through that building btw 5th & 6th.
In order to bring hats directly from the warehouse to the shop, D wants the right to pass through T's building to travel between the store and the warehouse, so that she and her employees will not have to walk around the city block. T grants D an easement for this purpose. For two years D's employees pass through T's building numerous times each day. After two years, D sells Parcel 1 to V and moves to Parcel 3 on the other side of Parcel 2. D wants to know whether she continues to have the right to use the easement. Indicate the fact listed below that undermines that right. |
The presumption favoring easements appurtenant.
The presumption actually works against D's interest since it would leave the benefit of the easement with the owner of Parcel 1 and D no longer owns Parcel 1. The other three facts are grounded on the seeming understanding of the two parties involved in the original grant of the easement that it was being granted for a unique and individualized commercial need of D due to the physical distance between the original shop and the warehouse, a distance that continues between the new shop and the warehouse. The fact that V is not claiming the right to use the "pass through" suggests it may have been V's understanding as well that the benefit of the easement was not appurtenant to the land he was buying. |
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A and B are neighbors. B does not want her children to walk along Route 4 to get to the park. She asks for and receives from A an easement allowing B's children to cross A's backyard to Shaker Lane. B later sells her lot to C. A does not care for C's children and wants to bar them from passing across her land. She has been advised that she cannot do this because the mere fact that B owned the neighboring land means that the easement was appurtenant. Do you agree with the advice?
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No.
The reason it is appropriate to conclude that the advice given to A was wrong is that it was based in the assumption that the mere fact that B was an adjacent landowner created an easement appurtenant. Although it is the case that an easement in gross follows from the conclusion that the benefited party is not an adjacent landowner, the opposite is not the case. It is entirely possible to create an easement in gross in a person who owns adjoining land. The key feature of an easement in gross is that it is personal to the person to whom it is given. Here there is a strong suggestion that A meant the easement to be personal to B and her children, and not to benefit successive owners of B's property. While appurtenant easements are presumed, the personal relationship and the familial nature of this easement might well be enough to characterize it as personal even though it is given because C is a neighboring landowner. A court would closely examine the intention of the parties before reflexively concluding that an easement appurtenant was created. |
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Recording Systems
CL Rule |
CL Rule is FITFIR
No JXN adheres to this any longer Recording Statutes are ALWAYS exceptions to the CL rule |
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Recording Systems
Policy |
Incentivizes people to:
1 - RECORD 2 - Buy Insurance |
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Recording Systems
Who's perspective should you take when reading the Rec. Stat.? |
O-->A, then O-->B
Put your B hat on |
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Recording Systems
Race JXN Rule |
Rule: When 2 persons hold competing claims to an interest in real property, the FIRST person to officially RECORD his interest prevails.
Knowledge means nothing -- B wins over A if B records first |
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Recording Systems
Race JXN Policy |
By ignoring knowledge of the parties, Race statutes incentivize:
1 - RECORD 2 - Diligent Title searching (by B & S) |
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Recording Systems
Pure Notice JXN Rule |
Rule: In a pure notice jxn, a subsequent bonafide purchaser who does not have NOTICE (A,I,R) of a prior unrecorded transfer, prevails IMMEDIATELY over the prior purchaser who has failed to record.
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This is true even if the subsequent purchaser has failed to record BECAUSE the subsequent purchaser WITHOUT notice prevails IMMEDIATELY upon closing.
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Recording Systems
Pure Notice JXN Requirements |
1 - B must be a BFP
2 - B must not have had any notice (if notice, then A wins) |
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Recording Systems
Write out an example Recording Statute in a Pure Notice JXN |
"No conveyance is valid against a subsequent BFP who has no notice of the conveyance, unless the conveyance is recorded."
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Recording Systems
R/N JXN [NY] Rule |
A R/N JXN protects only those subsequent BFPs who lack notice and who RECORD before the prior purchaser
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Recording Systems
R/N JXN [NY] Policy |
Supposed virtues of a R/N JXN, as opposed to notice, are:
1 - encourages RECORDING 2 - Eliminates disputes over which of the conveyances was delivered first |
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Recording Systems
What is the NY Recording Statute? |
§291-a:
Every such conveyance not so recorded is void as against any person who subsequently purchases or acquired the same real property in good faith AND for valuable consideration |
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Recording Systems
R/N JXN Requirements |
B must prove he is
1 - he was the subsequent purchaser 2 - First to record |
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Recording Systems
Analysis |
1 - Must be good guy & record first
2 - there is always a winner and a loser, dont stop the analysis with the loser! (if O to A is invalid, A will sue O for deed covenant) 3 - If A had Recorded at som time after O to A, then C would have to determine inf B had KNOWLEDGE of the transfer from O to A |
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Recording Systems
Types of Indexes |
Majority - Grantor/Grantee Index
Minority - Tract Index |
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Recording Systems
Types of Indexes Grantor/Grantee - Types |
Separate indexes are kept for grantors and grantees.
Grantor index records instruments ALPHABETICALLY & CHRONOLOGICALLY under the GOR's surname Grantee Index records instruments under the GEE's surname |
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Recording Systems
Types of Indexes Grantor/Grantee - Search |
Prospective buyer starts with grantee index, traces back to the root of title, then reverses search and goes forward through the grantor index
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Recording Systems
Types of Indexes Tract Index |
Organized by parcel of land and ALL documents pertaining to that parcel are indexed together.
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Recording Systems
BERMAN POLICY QUOTE ON RECORDING STATUTES |
"Equity protects the person who could not protect themselves, therefore the Recording Statute is not available to those who had the opportunity to protect themselves.
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Recording Systems
Shelter Rule |
Grantee taking from a Grantor protected by recording statute is ALSO PROTECTED by the same.
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Recording Systems
Shelter Rule Policy |
Shelter Rule protects C from actions of the losing party (B), and without it B would never be able to sell.
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Recording Systems
Shelter Rule What if B never recorded but B to C, and A is suing C? |
CL - FITFIR
In Race - first to record in R/N - first to record & notice In Notice - the issue becomes did B have notice -- if B did not have notice, B prevailed IMMEDIATELY upon his closing and thus may benefit from use of the Shelter Rule. |
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Suppose that Unger is selling Parcel 2 to Xavier. When Unger sold to Sheila he expressly reserved an easement over the path to Penny Lane. He did so because he was an avid biker who wanted access to Penny Lane and quiet streets that connected to Penny Lane. Without that access, Unger would be required to bike on Route 70, which he believed would be quite dangerous. The deed of Parcel 3 to Sheila does not contain any express language that would indicate whether Unger and Sheila intended this easement to be appurtenant or in gross. Xavier is an avid in-line skater and wants to know if he will have continued use of the easement over Parcel 3 if he buys Parcel 2. In a short paragraph identify the best arguments for why the easement should be considered appurtenant to ownership of Parcel 2.
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The first thing that suggests that the easement is appurtenant is the presumption favoring appurtenant easements. In the absence of an indication that the parties intended the easement to be personal to Unger, it would be considered appurtenant to Unger's land. Secondly, because safe access off of land is important to any landowner, it can be assumed that Unger and Sheila would have intended that the access provided by the path would be nearly as valuable to future landowners as it was to Unger. The fact that Xavier intends to use the path for skating rather than biking does not change the burden for Sheila since Sheila would have anticipated a recreational use by an individual to access Penny Lane when she originally consented to giving the easement.
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The distinction between easements appurtenant and easements in gross focuses on the use to which the easement is being put.
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If it is intended to benefit adjoining or neighboring land, it is an easement appurtenant.
If it is intended to provide an economic or personal benefit to an individual, it is an easement in gross. |
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What is a gift?
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A gift is a transfer in property in which the transferor (or donor) receives no compensation OTHER THAN LEGAL CONSIDERATION from the transferee (or donee) in exchange for the transfer.
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Gifts
What is a testamentary gift? |
A Testamentary gift is a gift of property that takes effect to pass the ownership to the donee ONLY upon the death of the donor.
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THE MORE IT LOOKS LIKE A WILL, THE MORE STRICT THE COURTS WILL BE
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Does every property have a True Owner?
True or False? |
True. This is an exact quote from Berman.
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Manillo (TO) v. Gorski (AP)
Whether an entry and continuance of possession under mistaken belief that AP is the “true owner” satisfy the “hostility” requirement? So the issues were: -"hostile" element (nature of intent) -open & notorious (notice) What are the rules? |
Maine/Minority: Requires a knowing, wrongful taking
-Active/Aggressive Trespasser; bad guy -punishes the AP who is mistaken in good faith -Punishes the SLEEPY owner BC PRODUCTIVE USE OF PROPERTY Connecticut/Majority Rule: Any unlawful entry is "hostile" since it is without right. Even the good faith mistaken possessor can claim "adverse possession" (this is the requisite hostility) |
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Adverse Possession
Hostility/Intent Rules |
A. No intent - State of Mind doesn’t matter
1. Connecticut/Majority Rule -Any unlawful entry is “hostile” since it is without right. -Even the good faith mistaken possessor can claim “adverse” possession (requisite hostility) B. Intent Matters 2. Maine/Minority Rule = Active Trespassar/Bad guy -requires a knowing wrongful taking 3. Good Faith/Mistaken Belief: NY Rule [NY RPAPL 501(3)] Must have an honest claim COLOR of TITLE will pretty much satisfy this. |
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The Farm
JoAnn Smith, a successful businesswoman, executes a will that provides "It is my will that my farm, CALIacre, shall go to my son Steve in fee simple." JoAnn is 51 years of age and in excellent health at the time she executes the will. Does Steve have possession of the farm? |
A testamentary gift only takes effect at the moment of the death of the testator/testatrix. While JoAnn is still alive, the will has not yet "spoken" and thus Steve has no interest in CALIacre. As long as JoAnn is alive, the will has no legal significance as far as the ownership of JoAnn's property is concerned.
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Gifts
Gifts Causa Mortis Definition |
Special type of gift recognized by CL that literally means a gift "in case of death", and which can be made ONLY BY PERSONS IN CONTEMPLATION OF THEIR IMMINENT DEATH
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Gifts
Gifts Causa Mortis Rule |
If a donor makes a valid Causa Mortis Gift, the gift is IMMEDIATELY effective to transfer ownership of the object of the gift to the donee.
HWR, if the Donor recovers, the donor may RECLAIM ownership of the gift. While Donor is alive, she may REVOKE the gift as well. |
In other words, the donee immediately becomes the owner of the subject matter of the gift, even while the donor is still alive. If the donor then proceeds to die from the peril that placed the donor in expectation of imminent death, the gift becomes absolute.
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Gifts
Gifts Causa Mortis Policy |
Donative Intent - the law presumes that it is conditional given the circumstances of IMPENDING DOOM and thus allows for the gift to be REVOCABLE.
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Thus, a causa mortis gift is conditional in nature --- it is effective to transfer ownership to the donee during the donor's life, but that ownership is subject to a condition subsequent (i.e., subject to ownership being divested from the donee if, in the future, the donor either chooses to revoke the gift or recovers from the circumstances that placed the donor in peril of imminent death).
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Gifts
Gifts Causa Mortis Elements of a Valid Causa Mortis Gift |
Nominally the same elements as for a valid IV gift:
(1) Intent of the donor to make an present transfer of property IN CONTEMPLATION OF IMMINENT DEATH, SUBJECT TO TERMINATION IF THE DONOR RECOVERS (2) a sufficient act of delivery by the donor (3) acceptance by the donee |
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Greta's Bible and Her Dying Wish
For example, consider Greta's dying wish for David to have her Bible. Suppose that Greta calls David to her bedside, hands him the Bible, and says "Here. I'm about to die. I want you to have this." David takes the Bible and says "Thank you." Which, if any, of the necessary elements of a causa mortis gift have been satisfied? |
Greta's statement indicates her subjective intent to make a gift in contemplation of her imminent death. Under the circumstances, it is unlikely that she would be making the gift, but for her expectation that she will be dying imminently. Thus, it is likely that she intends to make an immediately effective causa mortis gift.
Further, Greta's act of physically handing the book to David constitutes an act of delivery that objectively corroborates her subjective intent. Finally, David's conduct and statement indicate his acceptance of the gift. As a result, David is now the owner of the Bible. If Greta dies from her illness, David's ownership becomes unconditional and absolute. But if Greta unexpectedly recovers, she can recover possession of the Bible. |
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Greta's Bible and Her Dying Wish (Continued)
Now suppose the exact same facts, but now, when Greta calls David to her bedside, she hands him the Bible and says "Here, I want you to have this." [Notice that this time, she does not preface her statement by saying "I'm about to die."] David takes the Bible and says "Thank you." |
Greta does not have to preface her statement of intent by saying "I'm about to die." Her expectation of imminent death is implied from the surrounding circumstances, as she is gravely ill and in fact does not expect to live much longer.
Her statement reflects her intent to make a present gift of ownership to David. The circumstances give rise to an inference that her intent is for the gift to be a causa mortis gift. She has made a sufficient manual delivery, and David has accepted the gift. |
In other circumstances, this would have been an ordinary Inter Vivos Gift
HWR, Here it's gift Causa Mortis. Even though Greta didnt say that she was giving the Bible away BC she was close to death, the court would infer this |
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Greta's Bible and Her Dying Wish, Pt. II
Now suppose that Greta calls David to her bedside and says, "After I'm gone, my Bible is yours." David says "Thanks." The Bible remains on Greta's bedside table, where she continues reading it during her final hours. When Greta dies, David picks up the Bible and takes it home with him. Has Greta made a valid causa mortis gift of the Bible? |
No.
Rule: to make an effective causa mortis gift, the donor must, in contemplation of imminent death, (1) intend to make an immediate, present transfer of property, (2) delivery to the donee, and (3) the donee must accept delivery of the gift (presumed). App: Here, Greta's statement "After I'm gone, my Bible is yours" does not indicate that Greta intended to make a present gift of the Bible (i.e. a gift that would take effect at the time of her statement). This statement suggests that she intended to make a gift that would take effect only at her death (a Testamentary gift). App2: Likewise, there is no act of delivery that objectively corroborated her intention to make a causa mortis gift. Great did not PHYSICALLY hand over the Bible, but retained possession during her remaining hours. While she remained alive, the Bible was still within her dominion and control. Conc: Therefore, Greta did not make a valid Causa Mortis Gift. |
By requiring evidence that the donor intended to make the gift presently effective during the donor's life, the law draws a distinction between causa mortis and testamentary gifts --- and thereby discourages reliance upon causa mortis gifts as a method of estate planning. In this way, the law hopes to limit the causa mortis gift to those situations where careful estate planning would be impossible or not justified due to the expense involved.
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Harry and the Bus
One day, Harry and his co-worker Sylvia are walking to lunch. While waiting to cross Pine Street, Harry says "Hey Sylvia, if I get run over in traffic, you can have my new laptop. " Sylvia, looking at Harry bemusedly, says "Gee, Harry, thanks a lot. And why are you so morbid today?" One minute later, after the "Walk" sign comes on, Harry begins crossing the street and is killed when a bus turns right against the light and runs over him. Has Harry made a valid inter vivos gift? |
Issue: the issue is whether Harry's statement to Sylvia created a valid inter vivos gift.
Rule: To make a valid causa mortis gift, the donor, in anticipation of immediate death must (1) intend an immediate, present transfer, (2) delivery the gift to the donee in such a way as to relinquish control of the gift, and (3) the donee must accept. App: None of the elements of a valid gift causa mortis are present here. At the time of his statement, Harry was not in actual contemplation of being killed one minute later, as he had no reason to expect a bus to turn against the light and kill him. Likewise, Harry has not taken steps to deliver possession of the computer to Sylvia. Finally, even though the law normally presumes acceptance of a beneficial gift, the circumstances surrounding the conversation would tend to indicate that Sylvia did not believe Harry actually intended to make a gift to her, and thus her comment does not manifest acceptance. |
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The Bracelet
In November, on her daughter's birthday, Sandra was injured in an automobile accident while she was in route to a party for her daughter. Sandra suffered severe internal injuries and was taken to the hospital, where medical personnel advised her that she would not survive her injuries and would likely die within several hours. When her daughter arrived at the hospital, Sandra called her daughter to her bedside and handed her a package, saying "Happy Birthday. I hope it will remind you of me after I'm gone." Tearfully, Sandra's daughter opened the package and discovered a diamond bracelet, which she began wearing immediately. Miraculously, Sandra survived her injuries. Can Sandra recover possession of the bracelet from her daughter? |
No. Under the given facts, you are correct to conclude that Sandra intended to make an unconditional inter vivos gift, not a causa mortis gift.
It is true that Sandra expected to die imminently at the time she made the gift to her daughter. But the fact that she made the gift at a time when she expected to die shortly does not mean that she had the intent to make a causa mortis gift, unless the circumstances suggest that her imminent death was the motivation for the gift. Here, this was a birthday gift, and the circumstances suggest that Sandra likely would have made the gift to her daughter even if she had not suffered the accident. When one person gives another a birthday gift, the donor typically intends to make an unconditional, irrevocable inter vivos gift to the donee in recognition of the donee's birthday. Based upon her statement, Sandra intended to give her daughter the bracelet as a birthday gift, and likely would have made the gift to her daughter even if she had not suffered the accident. There is no indication that Sandra intended to condition the gift in the event she recovered from her injuries, or intended to retain any right to revoke the gift. |
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Important Distinction BTW Inter Vivos Gift of a Future Interest from a Testamentary Gift
The Painting Suppose that Victor owns a valuable painting (Gruen v. Gruen) and wants to give his son the future right to possession of the painting. Victor could simply provide, in his will, that the painting will go to Victor's son upon Victor's death. [This would be an testamentary declaration.] But during Victor's life, his son will have no property interest in the painting at all. If Victor sells the painting during his life, or if a creditor attached and sold the painting to satisfy a judgment against Victor, then the painting would not be part of Victor's estate at his death, and the will would have no effect to make a testamentary gift of the painting to Victor's son. Likewise, during his remaining life, Victor could revoke his will and provide for a different testamentary disposition of the painting --- and his son could do nothing about it, because a will does not "speak" until the death of the donor. |
Alternatively, Victor could make a PRESENT GIFT to his son OF A FUTURE INTEREST in the painting, retaining present possession of the painting for himself during his lifetime.
During Victor's remaining life, his son would have no right to possession of the painting. But he would have a property right --- the right to possession of the painting after his father's death --- that belongs to him even during the father's life. |
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Suppose the facts of Gruen:
If Victor's son doesn't really have the right to possession of the painting until Victor's death, how is that really any good for him? What does he really have? |
Victor has a property right (the right to future possession after his fathers death).
-transferrable & has an interest in what happens to the painting (THUS, if his dad sells it, he gets a CUT) |
Thus, by creating an inter vivos gift of a future interest, Victor could effectively bestow on his son a present economic benefit while preserving for himself the right to enjoy possession of the painting for his remaining life.
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Gifts of Future Interests
What are the requirements? And, what is the estate classification of the interest(s)? |
Donative Intent to make a present, immediate transfer of ownership of the FUTURE RIGHT TO POSSESSION of the object
Creates a Life Estate with the donor and a FSA with the donee. |
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The Television
Steve purchased a television set to give to his daughter Ellen for her birthday. On Ellen's birthday, Ellen called him from college and said "Dad, I'm sorry, but I won't be able to get home tonight --- my flight's been cancelled and there are no other flights tonight." Steve said, "I'm sorry, honey. I was looking forward to seeing you. I hope you've had a nice day. I bought you a new TV for your room. Shall I ship it to you?" Ellen responded "Oh, don't bother. Go ahead and put it in my room. I'll be home next weekend, and I'll get it then. Thanks, Dad." After they finished their conversation, Steve took the TV out of the box, placed it in Ellen's room, and connected it. |
Steve has made a valid inter vivos gift of a present possessory interest in the TV.
The circumstances of the gift --- Steve planned to give it to his daughter in person as a birthday gift when she came home from school --- do not suggest that Steve is intending to retain any dominion and control over the TV after Ellen's birthday. He intended to give Ellen the present right of possession, and did not intend to retain that for himself. Because she could not return home on her birthday because of the cancelled flight, immediate manual delivery of TV into Ellen's hands was impossible. Steve's conduct --- placing the TV in her room, as she directed --- is sufficient under the circumstances to objectively manifest his intent to make a present possessory gift of the TV, and constitutes a valid delivery under the circumstances. Further, Steve's intent to make a present possessory gift is confirmed by his offer to ship the TV to her at school. Ellen's statement manifests her acceptance of the gift. Ellen now owns the TV set, and Steve has no interest in the TV set. |
Good Q! I liked this one.
"Because she could not return home on her birthday because of the cancelled flight, immediate manual delivery of TV into Ellen's hands was impossible." |
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The Painting, Part II
While home alone with his son, Victor says to his son, "I want you to have my Klimt painting, but I want to keep it for the rest of my life." Victor's son says, "Thanks, Dad." The Klimt is hanging on the wall throughout this conversation, and remains there. Does Victor's son have a future interest in the painting? |
No. Victor has failed to make an effective delivery.
There must be some objective manifestation of Victor's intent to give his son a FUTURE POSSESSORY INTEREST in the painting. Here, there is no evidence of V's intent other than his oral statement, which is insufficient by itself. |
The delivery requirement cannot be excused (protects against fraud and bonus claims!!!).
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The Painting, Part III
On his son's graduation, Victor gives his son a letter, prepared by Victor's lawyer and signed by Victor, saying "My Klimt is yours, but I intend to keep possession of it for the rest of my life. It is my intention by this letter to give you a future interest in the painting." His son reads the letter and says "Thanks, Dad." At the time, Victor and his son were standing next to the painting, but Victor did not touch the painting, which remains on the wall in his living room for the rest of Victor's life. Did Victor make a valid gift of a future interest to his son? |
Issue: The issue is whether V's letter satisfies symbolic delivery of a future interest in the painting to his son.
Requiring Victor to manually deliver possession of the painting is impractical and pointless, given that Victor intends to retain the present right to possession during the rest of his life. Such an act --- handing the painting to his son, only to have the son hand it right back --- would be purely symbolic, and Victor's letter serves as an equally reliable symbol of Victor's intent. Thus, Victor's delivery of the letter constitutes a sufficient symbolic delivery of the future right to possession of the painting. See, e.g., Gruen v. Gruen, 496 N.E.2d 869 (N.Y. 1986). |
GREAT SYNOPSIS OF GRUEN!!!!!
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The Farm, Part I
David owns a farm in fee simple absolute. He executes and delivers to Terri a deed that purports to convey the farm "to my daughter Terri, subject to my continued possession for my natural life." David lives on the farm for the rest of his life. When David dies, Terri's brother Bob, unaware of David's earlier deed to Terri, attempts to exercise possession over the farm, based upon the provisions of David's will, which devised all of his assets to Bob. Terri claims that she is now the outright owner of the farm. Assume that the jurisdiction does not have a statute authorizing the use of testamentary deeds. Who now owns the farm? |
Terri. The deed validly granted an inter vivos gift of a remainder interest in the farm.
The deed, by its terms, conveyed full ownership of the farm to Terri, subject only to David's retained possessory rights for his life (a life estate in David). All requirements --- intent to create an inter vivos gift of a future interest, delivery, and acceptance --- are satisfied here. As a result, the deed conveyed to Terri an inter vivos gift of a remainder interest in the farm. The fact that the jurisdiction does not authorize the use of testamentary deeds is irrelevant, as David's deed was not testamentary in nature. |
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The Farm, Part II
David owns a farm in fee simple absolute. He executes a deed that purports to convey the farm to his daughter, Terri, in fee simple absolute. The deed, by its terms, does not reserve any interest in David. He then writes a note that says "By this deed, I've given the farm to Terri. But I'm keeping possession of the farm for the rest of my life so that I have a place to live. Once I die, Terri should record the deed and take possession of the farm." David attached the note to the deed and placed it in his safe deposit box. David lives on the farm for the rest of his life. When David dies, Terri and her brother, Bob, discover the deed and the note in his safe deposit box. David left no valid will. Terri claims that she is now the outright owner of the farm, while Bob argues that they have inherited it (as Terri and Bob are David's legal heirs). [Assume that the jurisdiction does not have a statute authorizing the use of testamentary deeds.] Who is correct? |
Bob > Terry.
David failed to make a sufficient delivery. The language of the deed might have purported to convey a testamentary interest because even though he didnt reserve any possession for himself, he never transferred possession either. Nor was there any delivery. By placing the deed in his safety deposit box, the deed was still within the dominion and control of David. Thus, even if the court was relatively confident about David's intention based upon the note, it is doubtful that the court would find sufficient delivery where the grantor had not delivered the deed to the grantee or to an escrow agent on behalf of the grantee. The fact that Terri did not know of the gift would not negate acceptance, which the law presumes where the object of the gift is beneficial. |
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The Summer Home
Arianna owned a summer home in the mountains. In her declining years, she began making plans for disposing of her assets among her family members. She decided to give the summer home to her son, Bart, who was doing missionary work in Papua New Guinea. She executed a deed to the home purporting to give the home to Bart, had the deed acknowledged, and recorded it. She then tried to call Bart to inform him of the gift, but he was on a three-week trip to a remote and extremely impoverished region of the country and could not be reached. She thus left a message informing Bart of what she had done. One month later, Arianna died, without ever having heard from or spoken with Bart. Her will devised all of her real estate to her daughter, Jean. Jean takes possession of the summer home. Six months later, Bart returns from Papua New Guinea. Can he recover possession of the home from Jean? |
Yes. A court will almost certainly conclude that Arianna made a valid gift of the home to Bart. Her intent to make an immediately effective gift is reflected by her execution and recording of a deed to the home, and her message to Bart informing him of this action.
Although it is true that Arianna did not mail or otherwise physically deliver the deed to Bart, doing so would have been impracticable under the circumstances. Under the circumstances, a court will likely treat Arianna's attempt to notify Bart and her recording of the deed as a sufficient constructive or symbolic delivery of the land. [Indeed, under many recording statutes, the recording of a deed raises a presumption that it was delivered.] |
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The Suicide Note
Last year, Dan's wife divorced him, and Dan was devastated because his children sided with his wife when the divorce turned bitter. As a result, Dan became depressed and he eventually decided to kill himself. He wrote a letter to his nephew, in which he explained why he had decided to end his life. The letter finished "I'm sorry, but this is the best way. I want you to have all of my assets. I couldn't bear for them to go to my kids, given how they've abandoned me." Dan then called his nephew on the phone and said "Come by my house. I've got something for you. The front door is open --- let yourself in." Dan then went to his garage, got in his car, and started it, and went to sleep --- dying shortly afterward from carbon monoxide inhalation. Dan's nephew arrives at the home, calls the police, and discovers the suicide note. After Dan is declared dead, Dan's nephew argues that the note constitutes a valid gift of all of Dan's assets. Dan's children, who will inherit his estate in equal portions, disagree. Does the note constitute a valid gift of all of Dan's assets? |
Probably Not.
One could argue that under the circumstances, it is impossible or impracticable for Dan to manually deliver all of his assets to his nephew, such that his suicide note and phone call should be treated as a valid constructive delivery of all of his assets, in anticipation of his imminent death. However, it is doubtful that Dan intended to make an immediately effective gift of his assets to his nephew. It is more likely that he intended for the gift to be testamentary in character --- i.e., for the gift to take effect at his death, as he expected to be dead before his nephew discovered the note. Further, even after writing the note and calling his nephew, Dan still had dominion and control over his assets. He could have changed his mind and not killed himself and could have then torn up the note. Thus, a court might conclude that he had failed to sufficiently deliver his assets to his nephew. Finally, the court might be disinclined to enforce suicide notes as causa mortis gifts, out of fear that this might encourage others to attempt to dispose of their assets in anticipation of death without making valid wills. |
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What type of estate is a Lease?
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Non-Freehold Estate
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Under English land law, the owners of certain "higher" estates (fee simples, fee tails, and life estates) had seisin, a term that roughly correlates to the modern conception of "title to property." The three estates in which the holder had seisin are known as freehold estates.
In feudal England, the position of a freeholder (owner of a freehold estate) had a higher status than a tenant who owned a leasehold. |
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Jorge's Will
Jorge died, survived by his wife and daughter. His last will and testament included the following devise: To my beloved wife and daughter, all my real property. When Jorge died, three of his assets were: 1. A farm which Jorge, as landlord, had leased to a tenant in exchange for annual rents. Six years remain until the lease is to expire. 2. The family residence, which Jorge owned in fee simple. 3. A vacation home at the beach, which Jorge, as tenant, leased from the owner of the house. Jorge prepaid all the rents under this lease, and three years remain before it will expire. Which of these assets go to Jorge's wife and daughter under the will, assuming the jurisdiction will apply traditional rules for classifying assets? |
You got it right. The farm remains real property even though Jorge has leased it to a tenant. Only the tenant's interest in the transaction is viewed as personal property. And of course the family residence is real property. On the other hand, the vacation home lease is historically considered personal property, so this doesn't go to Jorge's wife and daughter.
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What are the types of estates in land?
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4 types of estates in land:
*the fee simple *the fee tail *the life exchange; and *the leasehold |
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How are estates in land distinguished?
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The estates are distinguished from each other by the DURATION of the the OWNER"S RIGHT TO POSSESSION
FSA = inheritable, devisable, transferable IV, & can potentially last forever LE = measured by some person's life |
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Leasehold Estates
Types |
Duration of a T's right to possession under a lease depends upon the type of LH she has.
4 types of LH estates: 1 - Term of years 2 - Periodic Tenancy 3 - Tenancy @ Will 4 - Tenancy @ Sufferance |
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Leasehold Estates
Term of Years (Estate for years) |
Duration:
A lease for a fixed, determined period of time (1 day to <99 yrs) that provides a termination date from the start. Xferability: Duh. Termination: AUTOMATIC! Because the TofY tells us when the LeaseHold will end, NO NOTICE is necessary to Terminate. ***Can be made terminable upon condition or event. Death: Does not affect duration SOF: If the TofY is >1 Year, it must be in writing to satisfy the SOF. |
FAT
Fixed term Automatic Termination (no notice necessary). |
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Leasehold Estates
Periodic Tenancy (Periodic Estate) |
Creation:
"To T from month to month" or "To T from year to year" or "To T from week to week." Duration: Continues Automatically from one period to the next Xfer: Yes Termination: Express or Implied NOTICE If Implied, 3 rules -- CL/NY Rule: TOP (<6mon), Mod Rule: 1 mon NY RPR: 30days Death: Death does NOT affect duration |
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Leasehold Estates
Tenancy @ Will (Estate @ Will) |
Creation
"To T for as long LL or T desires" Duration: No fixed period. Anarchy. Transferability: T may not Xfer (LL may) Terminability: CL - by either party @ any time Statute: 30d notice in NY; 1 mo. out of NY Death: Terminates (of either LL or T) |
"To T for as long as LL or T desires."
A tenancy at will is a tenancy which has no stated duration and which may be terminated at any time by either party. |
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Leasehold Estates
Tenancy @ Sufferance (Estate @ Sufferance) |
Duration:
Short-lived: Lasts only until LL either evicts or elects to hold T to a new Term Creation: Created when T has wrongfully held over past the expiration of the lease. T is a holdover. This leasehold is a mechanism to allow the LL to collect rent from the holdover. c. TS is short-lived; lasts only until L either evicts T or elects to hold T to a new term. |
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Leasehold Estates
Periodic Tenancy Notice Rules |
If not expressly provided for in the lease, courts may imply a notice requirement on the lessee.
3 Rules NY/CL Rule: Time of Period, not to exceed 6 months. Outside of NY: 1 month NY RPR: 30 days. |
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Lease of Condominium
Lucy, a friend from college days, asks you to go skiing with her in Colorado in January. She has acquired the right to use and possess a great furnished condominium where you can "ski in" and "ski out. " It's unit 403 on the fourth floor of a five-story building. You plan to be there with Lucy for 10 days. Does Lucy own an estate in land? |
Yes.
If Lucy has the right to possess the condominium--not just a right of occupancy--then she definitely has an estate in land. It doesn't matter that it's a condominium property, or that it's on the fourth floor, and we don't have to inquire as to the length of her right to possession |
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Lease of Condominium
Lucy, a friend from college days, asks you to go skiing with her in Colorado in January. She has acquired the right to use and possess a great furnished condominium where you can "ski in" and "ski out. " It's unit 403 on the fourth floor of a five-story building. You plan to be there with Lucy for 10 days. Do you think that Lucy must pay rent for this condominium? |
Maybe.
We don't know whether she's paying anything. Most tenants have to pay rent, but maybe she doesn't have to. If she doesn't pay rent she's lucky of course. Maybe she won a contest, or maybe the condominium owner is a friend or relative who has given her a great gift. |
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LL/T
How is a Sublease created? |
A SUBLEASE is created when the T under an existing lease transfers her right to possession under a new lease to T2.
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LL/T
LL's Rights |
LL has 2 possessory rights:
Reversionary Right: -LL has a Future Possessory Interest Re-entry: -LL may reenter the premises after the LH has (1) expired, or (2) been terminated |
R or R
Reversion or Reentry |
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LL/T
Landlord's Obligations to Tenant |
A landlord's day is MIRED with responsibilities to his tenants.
MAINTAIN -Maintain & Repair premises to the degree specified by the lease/CL/statute IMPLIED warranty of habitability REPAIR -Maintain & Repair premises to the degree specified by the lease/CL/statute warrant quiet ENJOYMENT -Implied covenant of quiet enjoyment -w/o interference from the LL ***Applies to both residential and commercial leases*** DELIVER possession -LL must put T in actual physical possession of the premises. -If prior holdover is still there at start of T's lease, LL is liable. |
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LL/T
LL's Remedies for breach by Tenant |
"Pay the rent or you're DEAD."
withhold DEPOSIT EVICT -Recover possession through judicial process (can't use self-help) ACCELERATION clause -Sue for Back Rent: -Subject to CL duty to mitigate by JXN DAMAGES for holdover -If T stays past end of lease, LL can treat T as a holdover |
Landlord's Remedies for Breach by Tenant
Pay the rent or you're DEAD. withhold DEPOSIT EVICTION ACCELERATION clause DAMAGES for holdover |
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LL/T
Tenant's Remedies for Breach by LL |
If landlord breaches, Tenant can hit the ROAD.
RESCIND the lease agreement -Vacate OFFSET rent payment after repair ABATE -withhold rent until landlord fixes problem (must place in escrow) DAMAGES ordered by court -T can SUE for Damages |
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LL/T
Tenant's Obligations to LL |
"WE R UP to date with rent payments."
abstain from committing WASTE refrain from interfering with quiet ENJOYMENT of other tenants pay RENT USE premises for legal activities only fulfill PROMISES made in Lease |
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LL/T
Tenant's Rights |
Exclusive Possession
Present Possessory Interest [Implied] Habitable Premises |
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Lease/Property Analysis
"David Called The Police Last Time Around" |
"David Called The Police Last Time Around"
*Define *Creation *Type of Lease *Party Duties *Landlord Remedies *Tenants Remedies *Assignments/Subleases |
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What are the Deed Requirements?
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You can't transfer property unless the deed is on the WILD SIDE!
in WRITING must show INTENT to transfer an interest LAND conveyed is described must be DELIVERED SIGNED by the party to be charged IDENTIFIES the parties |
WRITING INTENT LAND DELIVERED SIGNED IDENTIFIES parties |
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LL/T
Delivery of Possession |
There are 2 types of possession: Legal & Actual
Implied Legal Delivery of Possession on the Commencement Day of the lease. Actual Possession (if not express) UK/Majority Rule: Implied Duty to Deliver Legal & Actual Possession -T would have to sue LL for actual Possession & not the holdover/trespasser US/Minority Rule: Implied Duty to Deliver ONLY Legal Possession -T would have to sue holdover/trespasser NY RPL §223-a: Implies delivery of actual possession IF NOT CONTRACTED OUT -Follows UK Rule as the default in absence of a K provision Minority View – American Rule: recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor against wrongdoers or to put tenant in actual possession |
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LL/T
Delivery of Possession |
1 - Under a JXN following the UK rule:
LL has an implied duty to deliver both legal and actual possession on the day of commencement. 2 - Under a JXN following the US rule: -LL has an implied Duty to Deliver ONLY legal possession, not actual possession. 3 - Under JXN following the NY rule: a - Is there a provision in the Lease re: Actual Possession? -If NO, LL has a default implied duty to delivery both LEGAL & ACTUAL possession b-If YES, LL has a duty to deliver Legal Possession AND lease provision re: actual possession must be followed |
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LL/T
Subleases and Assignments Privities |
Subleases and Assignments
Privity of estate and privity of contract exists between the Lessor and the Lessee at the time the lease is created. Privity is important because a landlord can only sue a tenant with whom he is in privity with (either privity of estate or contract). |
Analysis:
Must track the privity from the original lease then determine if it is an assignment or sublease. |
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LL/T
Subleases and Assignments P/E Defined |
-Privity of Estate is mutual (e.g., lease of land) or successive (e.g., selling of land) interest in property.
Can only exist btw One Present Possessor & One Future Holder of Interest |
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LL/T
Subleases and Assignments P/K Defined |
-Privity of Contract exists between parties in a contract with each other (such as Landlord/Tenant)
CAN ONLY BE SEVERED BY FULL PERFORMANCE OR RELEASE |
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LL/T
Assignments |
1. T1 transfers her POSSESSORY RIGHT to all or part of the premises for the FULL balance of the remaining lease term.
-must be Delivered & Accepted 2. Assignor retains P/K with LL -unless released, still liable for covenants in lease (even if LL allows the assignment) 3. LL is in P/E with Assignee -Assignee has PRIMARY duty to perform the covenants in the lease btw LL/T1 4. Surety Relationship Formed with Assignor (surety) / Assignee (Principal) 5. Does NOT sever P/K a. Assumption by T2 or release by LL required to sever P/K b. Assumption & Release are INDEPENDENT (1) Assumption + Release = No P/K btw LL/T1 (2) Assumption w/o Release = YES P/K btw LL/T1 In an assignment, the Landlord and T1 are in privity of contract while the LL and T2 are in privity of estate 1. Landlord can sue T1 or T2 in an assignment 2. T1 is only off the hook in an assignment if there has been a novation (an agreement in which the Landlord would release the original tenant from all obligations set forth in the lease) 3. Privity of Estate is destroyed in an assignment 4. T2 is liable to the LL for all of the covenants that run with the land because in an assignment T2 is in Privity of Estate. 5. T1 remains liable for the rent and the other covenants in the lease because there is Privity of Contract between the landlord and the original tenant. |
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LL/T
Delivery of Possession |
There are 2 types of possession: Legal & Actual
Implied Legal Delivery of Possession on the Commencement Day of the lease. Actual Possession (if not express) UK/Majority Rule: Implied Duty to Deliver Legal & Actual Possession -T would have to sue LL for actual Possession & not the holdover/trespasser US/Minority Rule: Implied Duty to Deliver ONLY Legal Possession -T would have to sue holdover/trespasser NY RPL §223-a: Implies delivery of actual possession IF NOT CONTRACTED OUT -Follows UK Rule as the default in absence of a K provision Minority View – American Rule: recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor against wrongdoers or to put tenant in actual possession |
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LL/T
Delivery of Possession |
1 - Under a JXN following the UK rule:
LL has an implied duty to deliver both legal and actual possession on the day of commencement. 2 - Under a JXN following the US rule: -LL has an implied Duty to Deliver ONLY legal possession, not actual possession. 3 - Under JXN following the NY rule: a - Is there a provision in the Lease re: Actual Possession? -If NO, LL has a default implied duty to delivery both LEGAL & ACTUAL possession b-If YES, LL has a duty to deliver Legal Possession AND lease provision re: actual possession must be followed |
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LL/T
Subleases and Assignments Privities |
Subleases and Assignments
Privity of estate and privity of contract exists between the Lessor and the Lessee at the time the lease is created. Privity is important because a landlord can only sue a tenant with whom he is in privity with (either privity of estate or contract). |
Analysis:
Must track the privity from the original lease then determine if it is an assignment or sublease. |
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LL/T
Delivery of Possession |
There are 2 types of possession: Legal & Actual
Implied Legal Delivery of Possession on the Commencement Day of the lease. Actual Possession (if not express) UK/Majority Rule: Implied Duty to Deliver Legal & Actual Possession -T would have to sue LL for actual Possession & not the holdover/trespasser US/Minority Rule: Implied Duty to Deliver ONLY Legal Possession -T would have to sue holdover/trespasser NY RPL §223-a: Implies delivery of actual possession IF NOT CONTRACTED OUT -Follows UK Rule as the default in absence of a K provision Minority View – American Rule: recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor against wrongdoers or to put tenant in actual possession |
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LL/T
Subleases and Assignments P/E Defined |
-Privity of Estate is mutual (e.g., lease of land) or successive (e.g., selling of land) interest in property.
Can only exist btw One Present Possessor & One Future Holder of Interest |
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LL/T
Delivery of Possession |
1 - Under a JXN following the UK rule:
LL has an implied duty to deliver both legal and actual possession on the day of commencement. 2 - Under a JXN following the US rule: -LL has an implied Duty to Deliver ONLY legal possession, not actual possession. 3 - Under JXN following the NY rule: a - Is there a provision in the Lease re: Actual Possession? -If NO, LL has a default implied duty to delivery both LEGAL & ACTUAL possession b-If YES, LL has a duty to deliver Legal Possession AND lease provision re: actual possession must be followed |
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LL/T
Subleases and Assignments P/K Defined |
-Privity of Contract exists between parties in a contract with each other (such as Landlord/Tenant)
CAN ONLY BE SEVERED BY FULL PERFORMANCE OR RELEASE |
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LL/T
Subleases and Assignments Privities |
Subleases and Assignments
Privity of estate and privity of contract exists between the Lessor and the Lessee at the time the lease is created. Privity is important because a landlord can only sue a tenant with whom he is in privity with (either privity of estate or contract). |
Analysis:
Must track the privity from the original lease then determine if it is an assignment or sublease. |
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LL/T
Subleases and Assignments P/E Defined |
-Privity of Estate is mutual (e.g., lease of land) or successive (e.g., selling of land) interest in property.
Can only exist btw One Present Possessor & One Future Holder of Interest |
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LL/T
Assignments |
1. T1 transfers her POSSESSORY RIGHT to all or part of the premises for the FULL balance of the remaining lease term.
-must be Delivered & Accepted 2. Assignor retains P/K with LL -unless released, still liable for covenants in lease (even if LL allows the assignment) 3. LL is in P/E with Assignee -Assignee has PRIMARY duty to perform the covenants in the lease btw LL/T1 4. Surety Relationship Formed with Assignor (surety) / Assignee (Principal) 5. Does NOT sever P/K a. Assumption by T2 or release by LL required to sever P/K b. Assumption & Release are INDEPENDENT (1) Assumption + Release = No P/K btw LL/T1 (2) Assumption w/o Release = YES P/K btw LL/T1 In an assignment, the Landlord and T1 are in privity of contract while the LL and T2 are in privity of estate 1. Landlord can sue T1 or T2 in an assignment 2. T1 is only off the hook in an assignment if there has been a novation (an agreement in which the Landlord would release the original tenant from all obligations set forth in the lease) 3. Privity of Estate is destroyed in an assignment 4. T2 is liable to the LL for all of the covenants that run with the land because in an assignment T2 is in Privity of Estate. 5. T1 remains liable for the rent and the other covenants in the lease because there is Privity of Contract between the landlord and the original tenant. |
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LL/T
Subleases and Assignments P/K Defined |
-Privity of Contract exists between parties in a contract with each other (such as Landlord/Tenant)
CAN ONLY BE SEVERED BY FULL PERFORMANCE OR RELEASE |
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LL/T
Assignments |
1. T1 transfers her POSSESSORY RIGHT to all or part of the premises for the FULL balance of the remaining lease term.
-must be Delivered & Accepted 2. Assignor retains P/K with LL -unless released, still liable for covenants in lease (even if LL allows the assignment) 3. LL is in P/E with Assignee -Assignee has PRIMARY duty to perform the covenants in the lease btw LL/T1 4. Surety Relationship Formed with Assignor (surety) / Assignee (Principal) 5. Does NOT sever P/K a. Assumption by T2 or release by LL required to sever P/K b. Assumption & Release are INDEPENDENT (1) Assumption + Release = No P/K btw LL/T1 (2) Assumption w/o Release = YES P/K btw LL/T1 In an assignment, the Landlord and T1 are in privity of contract while the LL and T2 are in privity of estate 1. Landlord can sue T1 or T2 in an assignment 2. T1 is only off the hook in an assignment if there has been a novation (an agreement in which the Landlord would release the original tenant from all obligations set forth in the lease) 3. Privity of Estate is destroyed in an assignment 4. T2 is liable to the LL for all of the covenants that run with the land because in an assignment T2 is in Privity of Estate. 5. T1 remains liable for the rent and the other covenants in the lease because there is Privity of Contract between the landlord and the original tenant. |
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LL/T
Delivery of Possession |
There are 2 types of possession: Legal & Actual
Implied Legal Delivery of Possession on the Commencement Day of the lease. Actual Possession (if not express) UK/Majority Rule: Implied Duty to Deliver Legal & Actual Possession -T would have to sue LL for actual Possession & not the holdover/trespasser US/Minority Rule: Implied Duty to Deliver ONLY Legal Possession -T would have to sue holdover/trespasser NY RPL §223-a: Implies delivery of actual possession IF NOT CONTRACTED OUT -Follows UK Rule as the default in absence of a K provision Minority View – American Rule: recognizes the lessee’s legal right to possession, but implies no such duty upon the lessor against wrongdoers or to put tenant in actual possession |
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LL/T
Delivery of Possession |
1 - Under a JXN following the UK rule:
LL has an implied duty to deliver both legal and actual possession on the day of commencement. 2 - Under a JXN following the US rule: -LL has an implied Duty to Deliver ONLY legal possession, not actual possession. 3 - Under JXN following the NY rule: a - Is there a provision in the Lease re: Actual Possession? -If NO, LL has a default implied duty to delivery both LEGAL & ACTUAL possession b-If YES, LL has a duty to deliver Legal Possession AND lease provision re: actual possession must be followed |
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LL/T
Subleases and Assignments Privities |
Subleases and Assignments
Privity of estate and privity of contract exists between the Lessor and the Lessee at the time the lease is created. Privity is important because a landlord can only sue a tenant with whom he is in privity with (either privity of estate or contract). |
Analysis:
Must track the privity from the original lease then determine if it is an assignment or sublease. |
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LL/T
Subleases and Assignments P/E Defined |
-Privity of Estate is mutual (e.g., lease of land) or successive (e.g., selling of land) interest in property.
Can only exist btw One Present Possessor & One Future Holder of Interest |
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LL/T
Subleases and Assignments P/K Defined |
-Privity of Contract exists between parties in a contract with each other (such as Landlord/Tenant)
CAN ONLY BE SEVERED BY FULL PERFORMANCE OR RELEASE |
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LL/T
Assignments |
1. T1 transfers her POSSESSORY RIGHT to all or part of the premises for the FULL balance of the remaining lease term.
-must be Delivered & Accepted 2. Assignor retains P/K with LL -unless released, still liable for covenants in lease (even if LL allows the assignment) 3. LL is in P/E with Assignee -Assignee has PRIMARY duty to perform the covenants in the lease btw LL/T1 4. Surety Relationship Formed with Assignor (surety) / Assignee (Principal) 5. Does NOT sever P/K a. Assumption by T2 or release by LL required to sever P/K b. Assumption & Release are INDEPENDENT (1) Assumption + Release = No P/K btw LL/T1 (2) Assumption w/o Release = YES P/K btw LL/T1 In an assignment, the Landlord and T1 are in privity of contract while the LL and T2 are in privity of estate 1. Landlord can sue T1 or T2 in an assignment 2. T1 is only off the hook in an assignment if there has been a novation (an agreement in which the Landlord would release the original tenant from all obligations set forth in the lease) 3. Privity of Estate is destroyed in an assignment 4. T2 is liable to the LL for all of the covenants that run with the land because in an assignment T2 is in Privity of Estate. 5. T1 remains liable for the rent and the other covenants in the lease because there is Privity of Contract between the landlord and the original tenant. |
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Sublease
Definition & Rules |
A sublease forms when T1 (prime tenant) transfers the right of possession to all OR part of the premises for a time LESS than the full time remaining on the prime lease.
T1 retains a Future Interest - reversionary rights - in the property CL Rule: Absent an express prohibition to transfer in the lease, the CL allowed for the unfettered alienability of property. Formalistic JXN: -Sublease is created when the Xfer is for anything less than the balance of the prime lease INTENT Jxn: -Court may find that the parties intended to create an assignment |
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Sublease/Assignment Analysis
Write it out. |
Is it a Sublease or Assignment?
1. In a JXN that followed the CL, a lease without a transfer provision would allow for the T to freely sublet/assign his property so 2. In a Formalistic JXN, a sublease is created with the the transfer is for less than the original (prime lease), leaving T1 with a future possessory interesest in the property. 3. In an INTENT JXN, a court may find that although there remained a 1-day reversion right for T1, that the parties had intended to create an assignment rather than a sublease. IF AN ASSIGNMENT: Does the Lease allow for T to XFER? If Yes, Can LL WITHHOLD CONSENT? -need to do a MAJ/MIN SPLIT on LL CONSENT!!! 1.Under CL/Maj – a landlord can withhold consent for sublease or assignment for any reason. 2.Minority and Restatements – was LL's refusal commercially reasonable? 3. What is a reasonable reason to refuse a sublease or assignment? a.Economic reasons b.Financial stability of the assigned c.Proposed use of the premises IF THE LEASE IS SILENT 1. No implied covenant against unless the lease indicates the LL's special reliance on the T. In such a case, to Xfer would be akin to breaching the contract. (e.g. Rent = % of revenue) |
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Sublease/Assignment
Covenants AGAINST Transfer |
1. Restrictions on Transfer are enforceable
2. No Assignment DNE No Sublease. 3. Dumpor's Rule: -When LL consents to any 1 ASSN, they are presumed to have accepted to all subsequent assignments **Not applicable to subleases. NY RPL §226 - NO ASSN w/o written consent of LL (Residential Leases!) -Can be unreasonably w/h |
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Sublease/Assignment
LL's Consent to Transfer |
1.Under CL/Maj – a landlord can withhold consent for sublease or assignment for any reason
2.Minority and Restatements – must apply a reasonableness standard to deny an assignment or sublease 3. What is a reasonable reason to refuse a sublease or assignment? a.Economic reasons b.Financial stability of the assigned c.Proposed use of the premises |
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Sublease/Assignment
LEASE SILENT on T's ability to transfer... Is there an implied covenant against transfer? |
No implied covenant against unless the lease indicates the LL's SPECIAL RELIANCE on the T. In such a case, to Xfer would be akin to breaching the contract.
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Rowe v. A&P: No implied covenant against Xfer
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Sublease/Assignment
LL's Consent to Transfer 5 types of K's |
1. Lease is Silent
-Special Reliance analysis 2. T may not assign OR T may not assign w/o LL consent -Majority v. Kendall analysis 3. T may NOT assign w/o LL's consent and LL's consent SHALL be reasonable (OR won't be unreasonable) -ALWAYS FOLLOW THE K (this is Kendall) 4. T may NOT assign w/o LL's consent and LL's consent MAY be unreasonable -Maj/RST v. Kendall 5. Commercial Lease A commercial lease provides for assignment ONLY with the prior consent of the LL. Such consent may be withheld ONLY where the LL has a COMMERCIALLY REASONABLE objection to the assignee or proposed use. |
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Sublease/Assignment
LL's Consent to Transfer 3 Rules -- KNOW THEM! |
1. Majority Rule:
-CAN refuse, even if arbitrary 2. Minority Rule: -Must be commercially reasonable when NO provision exists in the K R3P: CANNOT unreasonably w/h consent UNLESS lease provision gives LL that right. |
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LL/T
Tenant Default/Abandonment LL Reentry |
CL/Minority:
LL may use Self-Help to retake the leased premises from a T in possession WITHOUT incurring liability for wrongful eviction if: 1 - Lease has a reentry clause, AND 2 - Means of reentry are Peaceable OTHERWISE, Only lawful means to dispossess a T who has not ABANDONED/SURRENDERED is to use JUDICIAL PROCESS Modern/Majority Rule: LL must always resort to Judicial Process |
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LL/T
When may T seek remedy for a wrongful eviction? |
Under the CL rule, a T who is evicted by his LL may recover damages for wrongful eviction where LL:
1 - had no right to possession; and/or 2 - LL used non-peaceable means to remove T |
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LL/T
How may a Tenant Terminate? |
Requires: OFFER + ACCEPTANCE!
Offer: 1. Express offer -agreement to surrender 2. Implied offer -by abandonment or surrender -implied if NO INTENT TO RETURN Acceptance: 1. Express -written agreement where LL accepts T's offer to surrender 2. Implied -are T's actions inconsistent (or repugnant to) the original lease? |
NEED TO CHECK ON THIS...IS THIS CORRECT?
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LL/T
Tenant Default/Abandonment LL Remedies when a tenant Abandons Possession |
When a tenant wrongfully abandons the premises and renounces the lease, in the absence of statutes or lease provisions to the contrary, the landlord may:
(a) Landlord can do nothing and sue for rent at is comes due -no mitigation required (b) Landlord can accept the surrender & relet the premises -This terminates the lease and lets the T off the hook (c) Landlord can retake possession on behalf of the tenant for the purposes of mitigating damages -This is not the LL accepting surrender, T is still liable -LL may relet & T must pay the difference -LL can only sue T for the differential btw the original K rate and the new rent being received |
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LL/T
Tenant's Surrender |
T's surrender Terminates the lease PROVIDED the LL accepts T's offer
-abandonment = implied offer of surrender -T no longer liable for future rent but is still liable for accrued rent or past breaches of other covenants |
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