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113 Cards in this Set

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What is adverse possession?

Adverse possession (AP) permits a trespasser's possession to ripen into ownership through the passage of time. The AP's state of mind is irrelevant and the AP need not possess the land under a "claim of right". Thus, a mere squatter may come on to another's land and obtain title even though he has no claim of right and no subjective claim of ownership. NY no longer follows this rule. It requires the AP to have a “good faith” belief in ownership of the property.

Each jurisdiction has its own s/l after which time the actual owner's cause of action for ejectment will be barred if the trespasser can establish title by AP. What are these times under common law and Ny?
Common law is 20 years, NY is 10 years except AP against NY state land is 20 years, otherwise they will tell you.

There is a distinction between lands held by a sovereign in trust for the public and those lands held as a proprietor for purposes of resale or other disposition (a tax foreclosure). What is that distinction?

Land that is held as a proprietor by the government can’t be lost to an AP (e.g. streets, parks, forest preserves, streams, or canals).

Merely ordering the AP to get off the land does not interrupt his period of AP. What must the AP actually do?
The AP must actually acknowledge the owner or the owner must commence an ejectment action within the AP s/l.

AP frequently benefits a possessor who lacks title or has defective title. How does this occur? (4 reasons)

1. the deed was forged or never signed
2. it was improperly delivered
3. an intentional or mistaken encroachment onto a neighbor’s land
4. the delivered deed was lost and never recorded

T OR F: The title gained by the AP is the SAME interest held by the former owner of record (e.g. a life estate or a fee interest).
True.

What does the AP take property subjects of?
The AP takes the property subject to existing mortgages, easements, future interests, and/or covenants that burden the land.
What about in cases of an existing easement, covenant, or profit?
These may be extinguished by the AP's possession, but only if it was in fact hostile to those interests.

Title acquired together by 2 APs, even spouses, is held by who?
t/c

Because the acquisition of title by AP is not favored by the law, the EUNUCH elements must be established by clear and convincing evidence. What does EUNUCH stand for?

E - exclusive possession not shred by the owner.
U - the owner was under no disability (infancy or mental) when the AP began and when the owner first could have sued to eject the trespasser. If the disability exists when the AP begins, then the s/l is tolled until the disability is cured.
N - notorious and open possession, which would put the owner and her neighbors on notice that there was a trespasser on the land and that the owner has a cause of action for ejectment.
U - (New York only) Under a good faith claim of right. The owner was under no disability (infancy or mental) when the AP began and when the owner first could have sued to eject the trespasser. If the disability exists when the AP begins, then the s/l is tolled until the disability is cured.
C - continuous and uninterrupted actual possession.
H - hostile possession, which is hostile toward the owner's title, not necessarily hostile toward the owner.

Explain the E from EUNUCH further.
The AP alone must care for the disputed property as if it was his own. Note, however, that the AP will be credited with time his tenants or others who he put in possession occupied the land.


Explain the second U - (New York only) Under a good faith claim of right from EUNUCH further.

For all NY AP claims commenced on or after July 7, 2008, the AP must demonstrate that she took possession with an objective good faith belief that she owned the land. Thus, if the evidence produced at trial does no justify the AP's belief or the facts state that she knew the land did not belong to her, then she cannot establish AP. This claim of right showing is excused if the true owner's identity could not be ascertained in the land's chain of title.
Also, NY AP claims no longer may be based on de minimis non-structural encroachments (e.g. sheds, fences, birdhouses, or shrubs). NY provides that lawn mowing, planting shrubs, landscaping, and other acts of maintenance on another's land are now deemed permissive and not adverse.
If the NY AP began more than 10 years before 7/7/08 so that title vested before that date, then the new law cannot retroactively revoke that vested title since it would violate due process.

Explain the C - continuous and uninterrupted actual possession from EUNUCH further.

Seasonal use of a vacation property is sufficient as long as the use would put the true owner on notice of the AP's possession.
It is not necessary that the same person be in possession for the entire AP period. Tacking permits 1 AP to tack on the time of a previous AP provided there was privity of estate between the 2.
Under the doctrine of constructive possession, a possessor who has a written colorable title (a forged deed) to an entire parcel, but only occupies part of it, is regarded as being in possession of the whole parcel.
If an AP's claim is not based on a written instrument, then under the footprint doctrine, only that portion actually occupied is adversely possessed.

Explain the H - hostile possession, which is hostile toward the owner's title, not necessarily hostile toward the owner from EUNUCH further.

Hostility is presumed if the other EUNUCH elements are satisfied unless the competing parties are family memebers.
Hostility exists if the possessor openly occupies the land without OPA.
What does OPA from the H in EUNUCH stand for?

O - offering to buy the land from O
P - asking O's permission to use the land or
A - acknowledging to anyone that title is in O

Any kind of possession undertaken with an owner's possession will defeat what?
AP. A hostile possession does not begin to run until such permission has been repudiated and the possession assumes open hostility against the owner. (e.g. a concurrent tenant (j/t, t/e, t/c), a life estate, or a tenant under a lease)

Once the AP satisfies ENUCH for the statutory period, title vests by operation of law. The title is no longer dependent on what?
This title is no longer dependent upon continued EUNUCH and title cannot be lost by abandonment or OPA.

Where an AP's trespass was not intentional, the Court may do what?
May balance the equities and relevant hardship to both parties and order money damages where it would be inequitable to require removal of the encroachment. The Court, in its equitable discretion may award money damages in the amount of the difference in P's land value before the encroachment and the value after. In NY, where the unintended encroachment of an exterior wall is 6 inches or less, the affected landowner has 1 year from the completion of the wall to sue for injunction. Thereafter, only money damages may be sought.

What is an easement?

An easement is a right to use another's property for a specific purpose. (e.g. to gain access to a public road or body of water). An easement is considered a unique real property interest that may be protected by an injunction.

Easements consist of what?
Easements consist of both a "dominant estate", which is the land benefitted and a "servient estate" which is the land burdened by the easement and over which the easement runs.

Most easements are affirmative easements. What are affirmative easements?
Those which grant a privilege for someone to affirmatively use another's land for a specific purpose.

How is an easement distinguished from a license?
An easement is distinguishable form a license which is a personal non-assignable use revocable at the grantor’s whim

Negative Easements which prevent the servient estate from using her land in a particular way are limited to LAWS. Define LAWS.

L - light
US Courts have rejected the English doctrine of "ancient lights".
A - air
W - water use
S – support

If there exists a negative restriction on the use of property and it does not involve LAWS, then it’s what?
Then it is more properly categorized as a covenant and not as an easement. (CRL)

An affirmative easement may be created only by PIGS. (disjunctive) What does PIGS stand for?

P - easement by prescription, which is similar to adverse possession, but it only requires use of part of another's property for the statutory period without the owner's permission. But, NY requires a "good faith" objective belief in the right to use another's land.
I - easement by implication, which is an easement implied from a prior common owner's apparent preexisting use of the dominant and servient estates. It is where the common owner made an open, apparent, permanent, and reasonably necessary use of one part of her land for the benefit of another part. (aka a quasi easement). The common owner dividing the land and selling one part, she impliedly created an easement over the parcel she retained for the benefit of the owner of the other part. NYAA pg. 650-651. The elements for an implied easement are CRAB. (conjunctive)
G - an easement by grant created in a signed writing compared to a license, which is oral permission to use the servient estate, but which is not enforceable because of the statute of frauds.
S - an easement by strict necessity where a common owner subdivided the land leaving one parcel land locked without any motor vehicle access to a public way.

Under the I from PIGS what does CRAB stand for? Explain its purpose.

C - both the dominant and servient estates were formed by a common owner who then subdivided the land.
R - the implied easement is "reasonably necessary" for the use and enjoyment of the dominant estate.
A - the easement was apparent from a reasonable inspection of the land.
B - the former use by the common owner subordinated one part of the land for the benefit of another part.
CRAB raises an inference that the parties intended an easement under the CRAB circumstances.
An easement is distinguished from a lease which gives a tenant both use and possession of the landlord’s realty for the prescribed lease period.

What is a “profit”?
A "profit" is an easement that allows the holder of the profit to sever and to remove something from the land. For example, the right to go on to another's land to hunt, to fish, or to remove sand, oil, or minerals. Profits are subject to S/F. If a contract calls for the seller to first sever the minerals from the land, then it is considered a sale of goods contract governed by UCC 2.

If an easement doesn’t exist because it wasn’t created by PIGS, then the use is deemed what?
To be a mere license.

An easement that benefits the dominant estate is called what?
An appurtenant easement and it runs with the land whenever the land is conveyed away.

An easement that does not benefit land, but personally benefits the easement holder is what?
An easement in gross.

At c/l, easements could not be assigned, but what is different today?
Today they are freely assignable if they are commercial in nature.

An appurtenant easement may only be used to serve the dominant estate. Thus, what?
That easement cannot be assigned to a stranger and it cannot be expanded by the dominant owner for the use of nearby lands.

What happens if the dominant estate is subdivided?
If the dominant estate is subdivided, then it cannot unreasonably increase the burden on the servient estate beyond the burden originally contemplated or beyond a reasonable use.

A subsequent purchaser of a servient estate takes over what?
The realty subject to any easements over the land of which there was CIA notice.

An easement, profit, or covenant running with the land (CRL) may extinguished by "A CRAM". What does A CRAM stand for?

A - abandonment that clearly indicates an intent to surrender the easement, but mere nonuse alone is not an abandonment.
C - condemnation by eminent domain of the servient estate.
R - a writing that releases the easement signed by the dominant estate.
A - adverse possession of the servient estate, but only if it was in a hostile manner preventing the easement's use.
M - merger by common ownership of all (100%) of the dominant and servient estates because one cannot have an easement, covenant, or profit over her own property.

There are 2 general categories of restrictive covenants, what are they?

1. a personal covenant between the 2 parties, which is enforceable by either party based on privity of contract and
2. covenants that run with the land (CRL), which are binding and enforceable by subsequent owners even though the subsequent owners were not contracting parties to the original covenant.

CRLs are annexed to the land and cannot be separated from the land when it is sold or transferred. Thus, what?
The CRL is binding on all subsequent owners and it likewise benefits or burdens successive owners.

The law favors free and unencumbered use of real property. Thus, covenants restricting the use of land are what?
Strictly (narrowly) construed and will be enforced only if they are established by clear and convincing evidence.

A subsequent purchaser of the land is bound by a CRL provided that there was what?
That there was CIA notice of its existence

The elements for a CRL are PINTS. (conjunctive) What does PINTS stand for?

P - Privity of estate, which historically traces the land of the plaintiff and defendant back to the common owner who imposed the CRL. This is referred to as vertical privity.
I - Intent by the original contracting parties that the CRL attached to the land and run to all future owners. (e.g. A good indication of this is where the original CRL stated that "the grantee, his heirs, and assigns would be restricted".)
N - CIA notice of the CRL. A subsequent purchaser of the land is bound by the CRL provided there was CIA notice of its existence.
T - The CRL must touch and concern the land (e.g. both the burden and benefit of enforcing the covenant must relate to the land). Most AFFIRMATIVE COVENANTS are not binding on subsequent grantees because of this "touch and concern" factor. In NY, an affirmative covenant that runs in perpetuity will not be enforced.
S - the statute of frauds, which is easily satisfied by the deed poll doctrine, which provides that if the original covenant was in a document signed by either the grantor or the grantee, the statute of frauds is satisfied.

CRLs can be either "real covenants" (PINTS) or "equitable servitudes", which do not require privity of estate going back to a common owner. What needs to occur in order to enforce an equitable servitude?
Only TINS has to be satisfied, which is PINTS w/o the P (privity of estate). But, when seeking enforcement of an equitable servitude, a plaintiff cannot recover money damages and can only seek an injunction.

If a covenant does not fall within 1 of 4 CANS classes, then it does not run with the land. What does CANS stand for?

C - a covenant imposed by a common owner upon part of her land conveyed away for the benefit and protection of the land that she retained. Subsequent owners can enforce this type of covenant because the PINTS elements are satisfied.
A - a covenant entered into between 2 adjoining owners for the mutual benefit and protection of both lands. Since there is no privity of estate tracing the land back to a common owner who imposed the restriction, then this restriction can only be enforced as an equitable servitude by way of an injunction, but money damages cannot be obtained.
N - a grantor's restrictive covenant on land conveyed away imposed for the benefit of neighboring lands, which can be enforced by the neighbors as 3rd party beneficiaries despite the absence of privity of estate between the grantor and the neighbors.
S - (NY exam!!) A covenant imposed to carry out a common scheme or plan for the benefit of future owners in a housing development. (i.e. that each lot in the development would contain only a single family home). Such a covenant is originally recorded in the chain of title to all lots within the development for their mutual benefit and protection.
PINTS can come in CANS.

Even if a developer's covenants were never recorded and thus a subsequent buyer had no constructive notice (no CIA), courts have held what?
That an existing common plan or scheme in a development puts subsequent purchasers on inquiry notice as to any existing restrictive covenants.

If there is any conflict between a CRL and the existing zoning law, what will be enforced?
The stricter restriction will be enforced.

How and when can the restrictive covenant in a housing development be enforced?
The restrictive covenant in a housing development can also be enforced by earlier buyers against the developer and against subsequent buyers of those lots on the basis of an "implied reciprocal servitude". (e.g. Implied in law is that the developer who originally sold the first parcel with the restrictions would impose similar restrictions on all parcels subsequently sold in that project.) Likewise, if the developer agreed to set aside 10 acres to build a school or a park, but then subsequently attempted to sell the 10 acres to a commercial establishment (McDonalds), then the owners in that development could seek an injunction based on an implied reciprocal servitude.

Equity will not enforce (no injunction) a CRL where? (3 things)

(a) enforcement would be worthless (e.g. where the neighborhood has substantially changed) and the court will use the LIE comparative hardship test to balance the equities and whether granting the injunction would do more harm than good,
(b) the plaintiff unreasonably delayed inn seeking to enforce the servitude (laches) or
(c) enforcement would violate public policy. (i.e. Equity would not enforce a restrictive covenant limiting a land's use to a single family home where the government sought to establish a community residence for intellectually challenged people.)

CRLs are not limited by the Rule Against Perpetuities (CROUP). What does this mean?
Thus, they run with the land indefinitely.

Where a buyer has notice that a private community homeowner's association provides facilities (swimming pool) and services for the benefit of the community, then what arises?
There arises an implied in fact contract imposing a duty to pay on each homeowner.

Zoning laws exist under the state's police power. What do zoning permits allow?
Zoning permit municipalities to restrict development to require a minimum area to build and to limit the use to which property can be used in order to promote safety, health, and general welfare of the community.

Under NY’s constitution, local governments have the power to enact local zoning laws except where?
Where the state legislature has preempted such laws.

Rights in the land held by 3rd parties such as easements, CRLs, mortgages, or judgments render title to that land unmarketable although an existing violation of the zoning law may render title unmarketable in MBE, but not in NY. However, what does render the title unmarketable?
Existing zoning code limitations on the use of the land, or a change in the zoning law after the buyer signs the contract, but before the deed is delivered does not render title unmarketable.

Even though a landowner complies with existing zoning laws, she may nevertheless be enjoined in her use of her land by what?
By the tort of nuisance or 2. violating an existing CRL or a condition in her deed restricting the land's use. (BOP or SUD)

If a landowner faces "unreasonable hardships" because of existing zoning laws, then what occurs?
Then a "variance" of the zoning laws can be requested asking permission to use the property in a manner that conflicts with a zoning law

There are 2 types of variances, what are they?

1. a use variance, but it requires the landowner to show
(a) the zoning law imposes an undue financial hardship on the owner so that the entire land as zoned cannot yield a reasonable economic return under the existing zoning law
(b) the applicant's problems are due to the unique circumstances of the property (e.g. other neighboring property does not share the same characteristics as the applicant's property) and
(c) granting the variance will not substantially alter the character of the neighborhood. (e.g. it would not be detrimental to adjoining owners).
2. an area variance does not seek to change the use of the property, but generally seeks to decrease the area required by the zoning law.

The zoning board balances the benefits for the homeowner against the detriment to the neighborhood by considering ACESS. What does ACESS stand for?

A - alternatives for accomplishing the landowner's goal without a variance
C - would the variance alter the character of the neighborhood (e.g. would it have an adverse affect on neighboring properties)
E - would it adversely affect the environment
S - was it self-created (i.e. did the owner subdivide the property creating the area problem or did she buy with notice of the problem). A person who acquires property is presumed to know the zoning law. Thus, any resulting hardship is deemed self-created.
S - is the variance substantial or insubstantial.

In a CPLR Article 78 special proceeding (4 months s/l usually), but in zoning matters it is only how long? Why?
30 days to bring the special proceeding. Courts give great deference to ZBA’s decision because of the board’s expertise and knowledge of local matters. Thus, if the zoning board's decision is rational and is not arbitrary and capricious, then the courts will not disturb the ZBA's decision.

Who has standing to challenge a variance or a change in the zoning law?
When a variance is denied, the party seeking the variance has standing to challenge the denial.

Generally, when a variance is granted, what must the unhappy neighbor show?
An unhappy neighbor must show an injury different from the rest of the public at large.

A property owner is presumed to have standing when?
If the property is in close proximity to the affected land.

A frequent zoning challenge by neighboring landowners arises when?
When the zoning law is amended and singles out favorably a small area of land for a different use than all of the other surrounding lands. This is referred to as "SPOT ZONING" and usually is held to be arbitrary and illegal.

What is a nonconforming use of land?
A nonconforming use is land that lawfully existed when the zoning law was first enacted. It gives the owner a right to continue that use notwithstanding the contrary zoning law.
A nonconforming use cannot be expanded without a variance. If it is substantially destroyed, then it cannot be rebuilt without a variance.
What is deemed an abandonment of the nonconforming use?

If a preexisting use is discontinued for a long period of time,then it is deemed an abandonment of the nonconforming use.

When can nonconforming uses be eliminated?
Nonconforming uses can be eliminated by the zoning laws by an amortization process giving the landowner a reasonable time to recoup the original investment and then requiring the land to conform to the zoning laws.

A private property owner in close proximity to land that is violating the zoning law can commence a proceeding seeking what?
An injunction as well as to recover damages.


What does eminent domain prevent?

Eminent Domain prevents the government from forcing a person alone to bear a public burden which in fairness should be born by the public at large.

The US Constitution (5th Amendment) and every state constitution has a "taking clause". What does this allow?
It allows a government agency to "take" private property for a "public purpose" provided just compensation is paid to those having an interest in the realty.

The government is given broad discretion and the judiciary in extremely narrow scope of judicial review in defining what is a "public use". Define “public use”.
"Public use" does not literally mean use by the public, but instead is a taking for an overall public purpose and all of the land taken does not have to suffer from blight. "Public purpose" permits a taking to revitalize an economically distressed neighborhood as well as a taking for economic development of the land by private developers.

T or F: The federal government can even condemn state property.
True.

What violates the taking clause?
It violates the taking clause for a municipality to require a landowner to use part of her property for public use as a condition to obtaining a building permit, a zoning variance, or for a housing project subdivision unless the government can show a nexus with a legitimate governmental interest, which is roughly proportional to the impact that the landowner's request will have on government services or government property.

NY gives certain entities absolute immunity from zoning regulations, what are they?

(a) the federal government
(b) the state government or
(c) public schools and parks

A compensable taking arises when it is 1 of 2 things, which are what?

1. an actual physical taking or possessing property for a public purpose (i.e. (a) building a courthouse or expanding a road onto private property, (b) a state law permitting all cable TV companies to install its cable on private land or (c) the permanent flooding (or seasonally, every spring) of O's land caused by the government's construction of a dam. Likewise seasonal flooding for 6 years was held to be a taking.) or
2. a regulatory taking where a government regulation permanently or for a prolong period of time (10 years) restricts ALL use of the land leaving all of it "economically idol". For example, a wetland restriction prohibiting any building within 400 feet of land where all of the properties fell within 400 feet.

What about a temporary ban on all building permits?
A temporary ban on all building permits for 3 year was not a "taking" when it was imposed to give local governments sufficient time to create a comprehensive plan.

How is a “regulatory taking” distinguished?
A "regulatory taking" is distinguished from government regulation of land such a zoning, rent control, or landmark preservation of property, which is valid and not a "taking" as long as the landowner is able to obtain a "reasonable financial return" for the affected property.



What is a fixture?

A fixture is chattel, which has been annexed to real property and thus becomes part of the realty. If a chattel becomes a fixture, it passes with the realty. Whenever the realty is conveyed by deed, by intestacy, under a will, by adverse possession, mortgage foreclosure, or where the real property was taken by eminent domain, the person who formally owned the chattel before he was annexed to the realty loses title to that property and it passes to the new owner of the realty.
Any personal property essential to the functional utility of a fixture likewise cannot be removed. (i.e. a garage door opener or a hose and the attachments to a central vacuum system).

Whether a chattel becomes a fixture is determined by TIP. (conjunctive) What does TIP stand for?

T - the type of chattel that generally becomes part of the realty. (i.e. a hot water heater, storm windows, shutters, or an awning).
I - the intent of the person installing the chattel as to whether it is to become fixture or subsequently be removed. Thus, if the land and chattel had a common owner, there is a presumption it was intended as a fixture.
P - the parties' relationship (i.e. landlord and tenant or life tenant remainderment)

What are “trade fixtures”?
"Trade fixtures" are any chattel attached by a commercial tenant. Even though annexed to the realty, trade fixtures are presumed to be removable by the tenant. Thus, if the lease terminates or the landlord sells the realty, or the mortgage on the realty is foreclosed, then trade fixtures nevertheless can be removed by the commercial tenant.
What is the 3 things that cause “however” to occur under “trade fixtures”?

1. they must be removed prior to the termination of the leasehold. Otherwise, the fixtures revert to the landlord.
2. any damage done in removing the fixtures must be repaired by the tenant. or
3. they cannot be removed if removal would cause substantial damage to the leasehold.

What can a creditor do under UCC Article 9?
Under UCC Article 9, a creditor having a perfected security interest in fixtures may remove the fixtures even if it would cause substantial damage provided the secured party posts a bond to ensure the damage is repaired.


When is land entitled to lateral support?

Land is entitled to lateral support from neighboring land when the neighboring land is excavated thereby weakening the lateral support to a neighbor's land.

What happens under lateral support if the collapsed land contains any artificial structure?
If the collapsed land contained any artificial structure (a building or home) that increased the pressure on the land and that land would not have collapsed except for the extra weight of the artificial structure, then the damaged land is required to prove negligence in the excavation. However, absolute strict liability is imposed in MBE if the adjoining land in its natural state would've collapsed because of the excavation.

What happens in NY once the excavation exceeds 10 feet?
In NY, as soon as the excavation exceeds 10 feet, then New York imposes strict liability regardless of whether in its natural state the land would've collapsed (or in NYC, 5 feet below curb level).


What are water rights?

A landowner's use of a flowing waterway (a brook, a river, or a stream) must be "reasonable". An upstream owner can reasonably use the water supply even if it decreases the supply of the downstream owners. Most courts interpret "reasonable use" as giving each land on the stream or river some benefit of the water requiring the water’s use to be apportioned among all the owners.

(NY and a majority of the states) Under this reasonable use theory, courts look at SPUD to determine reasonableness. What does SPUD stand for?

S - the size of the waterway
P - the purpose for using the water and the resulting harm to others from that use
U - how much water is being used by the landowner and
D - the duration of that use.

What about commercial use and water rights?
Commercial use is generally not reasonable if it deprives surrounding residential lands of the water. Thus, where a new manufacturing plant drill for water, cutting off the water supply to nearby homes, this use was not reasonable. However, if the commercial use had exited for 8 years, and a drought caused the water shortage, then the use was not found to be unreasonable.

What are riparian rights and what do they do?
Riparian rights give a landowner who is contiguous to a defined waterway having tides (an ocean or the Great Lakes), then the owner has title down to the high tide water mark and then has an easement below the high water mark to gain access to the water way and to reasonably use the water. (i.e. to launch a boat, to dredge, or to reasonably use the water regardless of who owns the water)

Where does title of the land go out to if the land is located on an internal stream or pond?
Then title to that land goes underwater out to the middle of that waterway.

What are diffuse surface waters?
Diffuse surface waters are those waters from rain, melting snow, or underground springs that surface, but do not form part of a defined waterway.

There are 3 theories for such diffuse surface waters, what are they?

1. the civil law theory (aka the natural flow theory), which imposes strict liability on a landowner who alters the natural drainage flow causing damage to a neighbor's property. Each landowner is subject to an easement of flowing surface waters.
2. the common enemy doctrine, which is just the opposite of civil law. It treats surface waters as an enemy allowing the landowner to do anything to prevent the water from entering the land. (15 states)
3. the reasonable use theory (majority, NY and NJ and CT) allowing the landowner to reasonably alter the flow of surface waters IN GOOD FAITH in order to reasonably use her land unless the alteration unreasonably interferes with a neighbor's property. NY follows the reasonable use theory, but a NY landowner cannot channel those waters onto neighboring property by artificial means such as pipes or ditches, but adding pavement to the property does not constitute an artificial means of diverting the water. NY imposes strict liability for damage done to neighboring properties if drains, ditches, or pipes were used or where the water was stored on the property and then discharged all at once.

Restatement of Torts treats surface waters under what rules?
Under the rules for the tort of nuisance (e.g. interfering with the flow of surface waters is permissible unless it unreasonably interferes with a neighbor's use and enjoyment of her land).

If there is an interstate water dispute, there are 3 remedies to resolve it, what are they?

1. a congressional act apportioning the water’s use under congress’s commerce clause power,
2. allocation of the water by the US Supreme Court which has exclusive original subject matter jurisdiction on lawsuits between states, but certiorari must first be granted, or
3. interstate compacts between the conflicting states subject to the Constitution’s compact clause.


What is a mortgage?

A mortgage is security for a loan and most frequently the mortgage is placed on the borrower's property, but it can be placed on a 3rd person's property to secure the loan of the borrower.

When a buyer of realty finances the purchase price, 2 separate documents are executed by the buyer. What are these documents?

1. a note promising repayment of the loan and
2. a mortgage to secure the repayment of the loan. The mortgage is then recorded by the bank in the chain of title to the realty.

When is and how is a mortgage on future construction given?
A mortgage on new construction frequently is given for "future advances" (progress payments) where the bank does not immediately turn the full amount of the loan, but spreads the payments out as the building expresses. If the advances by the bank are mandatory for the full amount of the loan, then the bank has priority over all subsequent interests in the realty. However, if the advances are optional with the lender, then the bank has priority in the realty only to the extent the advances were made before receiving actual notice that subsequent liens or mortgages have attached to the realty.

What happens once the mortgage and note have been executed?
Once the mortgage and note have been executed, then the mortgagee (the bank/lender) is free to assign (to sell) both instruments together.

What does the mortgage always follow?
The mortgage always follows the note when it is assigned and similar in concept to an option to buy in a lease, where the option cannot be assigned without also assigning the entire lease, the mortgage and the note cannot be separated and must be assigned together. Thus, a plaintiff in a foreclosure action has standing to sue, but only if it holds both the mortgage and the note. Otherwise, the mortgagor (debtor) who is in default can move to dismiss the foreclosure action under CPLR 3211(a)(3).

The mortgage instrument is merely security for the mortgage debt and it can’t exist independent of the note. When the mortgagor defaults in paying the note, then the mortgagee may either do what 1 of 2 things which are what?

1. sue the mortgagor personally in a law action for a money judgment for the full amount of the note (rarely done). Once this remedy is commenced, it must be fully exhausted before the lender can commence the foreclosure action. However, the money judgment obtained can’t be enforced against the mortgaged real property. or
2. sue in equity on the mortgage (a mortgage foreclosure action) where the court will grant a foreclosure judgment and appoint a referee to sell the realty at a foreclosure sale and then use the sale proceeds to pay off the note.

Can a mortgage simultaneously pursue both remedies?
No, a mortgagee cannot simultaneously pursue both remedies. In about half of the states, a nonjudicial foreclosure is allowed, which is much cheaper and quicker than NY's judicial foreclosure requirement (no lawyers, no court fees and service is by mail and the foreclosure sale does not require court intervention) because in these states, the deed is placed in trust (no court intervention) to sell the realty in the event of a default.

Do MBE borrowers and NY commercial borrowers have a right to prepay the mortgage?
All MBE borrowers and NY commercial borrowers have no right to prepay the mortgage prior to its expiration date unless the mortgage instrument expressly allows prepayment.

What about any NY residential borrower and the issue of having to prepay the mortgage?
A NY residential borrower who owns and resides in the residence is entitled by law to prepay the mortgage, but if prepaid during the first 12 months of the mortgage, the bank can impose a prepayment penalty.

What interest can be mortgaged?
Any interest in real property can be mortgaged (e.g. a life estate, a future estate, a tenant’s lease, or a fee interest in realty).

How do foreclosures work in NY Commercial properties?
In a foreclosure of NY COMMERCIAL property, the mortgagee can move for the appointment of a LIAR receiver to preserve the property during the foreclosure proceedings (go back and review provisional remedies).

What does the execution of a mortgage by the borrower convey?
The execution of a mortgage by the borrower conveys no title. It merely creates a lien on the realty to secure the repayment of the loan.

A minority of jurisdictions (less than 10 including CT) recognize a title mortgage as contrasted with a lien mortgage where title to the property passes to the mortgagee, but solely as security for the debt. Thus, if a joint tenant mortgaged his interest in a title mortgage jurisdiction, it would do what?
Convert the joint tenancy into a t/c and extinguish the right of survivorship even though the lender had no right to possess the property.

What does a title mortgage do?
A title mortgage has the same affect as an absolute conveyance and a subsequent satisfaction of the mortgage will not revive the joint tenancy. Thus, the 2 owners own as tenants in common.

What happens is mortgaged real property is transferred?
If mortgaged real property is transferred (it's sold, it's given away (a gift), or the mortgagor dies and the property passes into his estate), then it impliedly passes the realty SUBJECT TO the existing mortgage. The grantee taking title to that realty who does not expressly "assume" the mortgage debt, is not personally liable for its repayment or for any deficiency judgment if the mortgage is foreclosed. However, the original mortgagor who assigned the note remains personally liable if the note is not paid.

What happens if the mortgaged property is passed by will or intestacy?
In a minority of jurisdictions, if the mortgaged property passes by will or intestacy, then the beneficiary receiving the property has the right to "equitable exoneration" and can compel the decedent's estate to pay off the mortgage. Today, most states (NY), unless the will clearly and expressly provides otherwise, the party inheriting the realty, takes it subject to the mortgage and is not entitled to "equitable exoneration".

What happens to the grantee of an MBE deed in that contains a mortgage assumption clause?
The grantee of an MBE deed containing a mortgage assumption clause becomes personally and primarily liable even though the grantee did not sign the deed. In both NY and MBE, the original mortgagor who signed the original mortgage and note remains personally liable for its repayment as a surety by operation of law.

A NY grantee is not personally liable for an assumed mortgage unless the seller's deed fully informed the buyer of TIPS. What does TIPS stand for?

T - time remaining on the mortgage
I - interest rate of the mortgage
P - the principal amount of the debt still owed
S - must be signed by the grantee

Mortgaged realty is freely transferrable, but what happens if the mortgage contains a “due on sale” clause?
If the mortgage contains a "due on sale" clause, then it gives the lender the option to call in the loan if all or any part of the realty is sold without the lender's prior written consent.

What are the 5 Rules on NY home foreclosures?

1. When the summons is served, proof of service (even in-hand personal delivery) must be filed within 20 days. CPLR 3408.
2. As a condition precedent to commencing a home mortgage foreclosure, the bank must give a 90 day notice to the borrower to cure the default, which must be mailed registered or certified mail and also by 1st class mail. It must contain a list of at least 5 counseling agencies within the borrower's community.
3. When foreclosure process is served (summons and complaint), it must contain on colored paper (a) that payment of monthly mortgage payments will not stop the foreclosure and (b) a warning about foreclosure rescue scams.
4. A mandatory settlement conference within 60 days from when the affidavit of service was filed. The court will not entertain a summary judgment motion by the bank without the settlement conference.
5. The bank's attorney must file an affirmation that she has communicated with a named bank official, the date of the conversation, and that she was informed that the bank's documents have been personally reviewed, are accurate, and the bank officer vouches for the accuracy of the notarizations. The NY must then affirm to the best of her knowledge based on her inspection of the documents that they are complete and accurate.


What is a mortgage default?

A mortgage default for nonpayment can be cured simply by tendering the unpaid arrears plus interest at any time before the mortgage debt is formally accelerated by the bank declaring the entire balance due because of the mortgage default.

Even after the mortgage debt is accelerated, the mortgagor always has the right under what doctrine?
The doctrine of EQUITY OF REDEMPTION which is the borrower's right to pay off the mortgage amount before the referee's hammer falls at the foreclosure option.
This payment by the borrower will discharge the debt and require the mortgagee to issue a satisfaction of mortgage to be recorded in the chain of title.
This payment saves the mortgagor’s equity in the realty.

What happens in NY with the right to redeem?
In NY, the right to redeem is extinguished once the foreclosure sale is final and the referee's hammer falls at the foreclosure sale. However, in 33 states, the legislatures have enacted a statutory right of redemption allowing the debtor to redeem the property after the foreclosure sale (anywhere from 3 to 18 months). BY PAYING THE AMOUNT THAT WAS PAID AT THE FORECLOSURE SALE.