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152 Cards in this Set
- Front
- Back
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Real Estate Sales
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Real estate K’s are usually executor, meaning title is not transferred immediately upon signing the agreement because both parties must do certain things between contract and closing.
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Listing Broker
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agent who markets the property for sale
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Selling Broker
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agent who introduces the buyer to the property, shares in commission of Listing Broker, has duties to owner but is considered a sub-agent
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Listing Agreement
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A listing agreement is an employment contract between the listing broker and a seller (owner of house), and if the broker satisfies the obligations set forth in the listing, the seller pays the broker a commission
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Open Listing
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(least protective): broker must be the first to procure an offer from someone who matches the terms in the listing or includes terms acceptable to the seller Seller retains the right to sell the property herself or use a different broker without paying the open listing broker commission….
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Exclusive Agency Listing
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Exclusive agent earns a commission for the sale if she or any other broker secures a buyer. This permits only one broker to sell the property for a specified period of time, the the owner does not have to pay if sold herself
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Exclusive Right to Sell
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Owner must pay broker during the specified duration no matter who found the buyer
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Commission
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Commission is due when a broker brings in a buyer who is willing, ready, and able. Such a buyer is found when they make an offer at the specified price.
-Broker is entitled to commission if either buyer or seller defaults but can K around this -Minority: The sale must close however, the broker still gets it if the seller backs out and does not act in good faith |
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Fiduciary Duties of Brokers
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Brokers owe their principals a duty of loyalty and good faith and also a duty to disclose defects to a buyer that the buyer does not know about., thus actions cannot diverge from their clients interests or expectations. (Both buyer and seller brokers)
-MUST DISCLOSE MATERIAL DEFECTS THAT ARE KNOWN TO THE BROKER BUT NOT THE BUYER and some go as far as putting an affirmative duty to inspect the property for such defects |
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Misc. Duties of Brokers
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-Selling Brokers have duty to disclose any information shared with them by the buyer
-Duty to sell at the highest price possible -Sellers brokers are not in privity with buyers brokers and do not have to share commissions -Dual agency is allowed in some states, but it must be disclosed and agreed to by both parties (Mention if only one broker in the transaction) -Some states require disclosure anyway |
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Licari
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Licari: One of two co-brokers withheld that he had an offer to buy a house….bought it….turned around and sold it=BREACH OF FIDUCIARY DUTY. *Note: had a relationship of being co-brokers
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SOF
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To satisfy the Statute of Frauds a memorandum of sale must, at a minimum, be signed by the party to be bound, describe the real estate, and state a price.
-Some courts will imply a reasonable price if there is not one -ULTA only have to describe the method they will use to determine the price -“Fair market value is enforceable” -Some states must include all essential terms |
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Part Performance
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: Oral agreement will be specifically enforced notwithstanding the SOF if one of the parties to the agreement has partly performed.
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Evidentiary Theory of SOF
(Part Performance) |
Acts of the parties satisfy the evidentiary purpose of the SOF, thus if the acts are unequivocally referable to the contract of sale they constitute part performance
-Looks to see if all three are present to be clearly met: taking possession, paying all or part of the purchase price, or making improvements -usually payment or possession are key |
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Prevention of Injurious Reliance Theory
(Part Performance) |
if the P shows that he would suffer irrepairable injury if the K was not enforced then taking possession alone is sufficient
-originated in equity courts and does not apply to actions at law…damages |
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Estoppel (Exception to SOF)
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Oral agreement for the sale of land will be specifically enforce notwithstanding the SOF if one of the parties to the agreement would suffer unconscionable injury after one party has been induced by the other to change his position in reliance on the K
-Also allowed if one party would be unjustly enriched if relying on the SOF -Both defense at law and equity *Note: groups of emails have been thought to satisfy SOF, include essentials and some type of signature |
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Hickey
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Hickey: Sold house in reliance on an oral agreement and it would cost a lot to litigate or find a new house in such a short amount of time=estoppels IMPORTANT it was in contemplation and expected by the seller if not you get Walker v Ireton and no enforcement
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Marketible Title (Rule)
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It is an implied condition of a K for the sale of land that the seller must convey to the buyer a marketable title. If the seller is not able to convey marketable title the buyer is entitled to rescind the K.
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Marketable Title (Def.)
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Marketable title has been defined as a title that is free from reasonable doubt that would create a just apprehension of its validity in the mind of a reasonable person willing to pay fair value for the title if guided by competent legal advice.
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Waiver
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Marketable title is IMPLIED but can be WAVED or scoped pursuant to an express title covenant
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Encumberance
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every interest in the land which may subsist in third persons to the diminution of the value of the land but consistent with the passing of the fee by conveyance
1) pecuniary charge against the premises…mortgage 2) estates or interests in the property less than the fee…life estate 3) easements or servitudes on the land, such as rights of way |
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Unmarketable if...
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…the seller’s title is subject to any rights or interests in land held by third parties that either reduces the value or restricts the use of the land: mrtgages, easements, covenants, leases, tax liens…
…just because it is insured (unless it is in an express title covenant) …would subject purchaser to litigation (violation of ordinances) …doesn’t own the property conveying |
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Still marketable even if...
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…the title is subject to public ordinances or zoning (only violation makes it unmarketable)
…the property is in in violation of building code (hard to find and makes them guarantor of the quality of the property, but don’t forget subjecting to liability argument) …the property is not readily accessible or landlocked (only speaks to market value) -(Possible argument that it would require litigation to gain an easement) …there are visible easements not specified as accepted in the contract (if a buyer knows or reasonably should have known that an easement exists than he or she presumably agreed to accept title subject to the easement: powerlines, sewer pipes, roads, utilities) …utility easements |
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Lohmeyer:
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P rescinded and sued for money back in the contract for land…the court found for P because the title was unmarketable due to zoning violations….it was not the zoning itself, but the fact that it left P open to litigation as the zoning was violated
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Caveat Emptor (Duty to disclose defects JN 1 of 3)
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The seller has no duty to disclose defects in the property
-Exceptions for fiduciary relationships -Cannot actively mislead seller, however distinguish from mere puffery. -Guard against it through fraud -Still followed for most commercial transactions |
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New York JN (Duty to disclose defects JN 2 of 3)
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Where a condition which has been created by the seller, and is unlikely to be discovered by a prudent purchaser exercising due care, materially impairs the value of the contract nondisclosure constitutes a basis for rescission.
Stambovsky: Seller created a reputation of the house being haunted which the court considered to be necessary for disclosure and allowed rescission. |
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CA Rule (Duty to disclose defects JN 3 of 3)
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If seller knows facts materially affecting the value or desirability of the property that are not in the reach of a diligent buyer then there is a duty to disclose
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Tests for materiality
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1) An objective test of whether a reasonable person would attach importance to it in deciding to buy
2) A subjective test of whether the defect affects the value or desirability of the property to the buyer |
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Examples of Material defects-CA Rule
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-Normal examples: leaky roof, crumbling foundation, termite damage, sliding lot
-Some: zoning violations, building code violations, and other legal conditions affecting the use or enjoyment |
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CA rule caveats
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-CA you have to disclose noisy neighbors
-Several states enacted statutes to protect sellers from having to reveal certain things that stigmatize the property such as murder or former death from AIDS -Off site conditions have been held to have to be disclosed, such as hazardous waste -“as is” clause will be held up as long as the defects are easily discoverable and there is no fraud -Normal examples: leaky roof, crumbling foundation, termite damage, sliding lot -Some: zoning violations, building code violations, and other legal conditions affecting the use or enjoyment |
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Equitible Conversion
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From the date of K both buyer is viewed as owner from the date holding “equitable title” while the seller has a claim for money secured by the vendor’s lien on the land. Thus, the seller holds legal title as trustee for the buyer. Based on equitable conversion, if property is destroyed between signing the K and closing, the risk of loss is on the purchaser.
-this is JN’L -some refuse to apply equitable conversion and loss sticks with seller until legal title is conveyed -Mass.: on seller if the building was important to K and loss is substantial…otherwise either can enforce K -Some say risk is on whoever is in possession -If purchaser has risk and seller has insurance, the seller holds proceeds in trust -equitable conversion applies to inheritance and it makes sellers interest personal property to pass on. |
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Merger
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When a buyer accepts a deed all contractual obligation are deemed to have been ment, the the deed becomes the final act of the parties expressing the terms of their agreement.
-The buyer can no longer sue the seller on promises in the K of sale not contained in the deed, but must sue the seller on warranties contained in the deed. -if looking to survive must argue the agreement was independent or collateral -also does not protect against fraud or misrepresentations |
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Implied Warranty of Quality
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It is implied that the builder warrants that the house has been constructed in a workmanlike manner and is fit for human habitation. Thus, a builder may be held liable for damages caused by latent defects that manifest after the subsequent owners purchase and were not discoverable had a reasonable inspection been done.
-Limited by a reasonable time frame -P has burden to show that it was workman’s defects -Usually not implied where the seller is not a merchant of housing…builder, subdivider, commercial vendor -builder is least cost avoider and it is difficult to discover such defects |
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Lempke
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Bowing of roof that revealed defect was considered violation of implied warranty, did not have to be in privity with contractor to bring suit
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Deed (Essential Elements)
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In order for an instrument to be a conveyance it must identify the grantor and grantee, describe the land, and have the signature of the grantor. Often times an attestation or acknowledgement is required as well
-often some consideration is given to ensure BFPFV status for protection against recording act -A person whose name was forged prevails against everyone even BFPFV -Deed procured by fraud Grantor beats grantee but losed to BFPFV |
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General Warranty Deed
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warrants title against all defects in title whether they arose before or after the grantor took title. The general warranty deed contains six express warranties
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Covenants of General Warranty Deed
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Present: Seisin, right to convey, against encumbrances
Future: general warranty, of quiet enjoyment, further assurances |
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Present covenants
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: Broken at the time the deed is delivered, therefore does not run with land. However, if breached on delivery than has a cause of action which is not impliedly assigned in most states, however some impliedly assign it.
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Rockafellor
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-Allowed for the implied assignment of a cause of action, but limited recovery to the amount paid for by the original grantee…GRANTOR IS NEVER MORE LIABLE THAN WHAT THEY SOLD THE PROPERTY FOR
-also held that they will not hold remote grantees subject to parol evidence as they relied on the docs |
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Covenant of Seisin
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The grantor warrants that he owns the estate that he purports to convey
a. Covers both the type of estate and the amount of land |
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Covenant of the right to convey
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the grantor warrants that he has the right to convey (similar to seisin)
a. Usually comes up in either trusts or land with restrictions on alienation |
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Covenant against encumbrances
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the grantor warrants that there are no encumbrances on the property: mortgages
b. Different from marketability of title in that a majority of courts will not find a zoning violation to violate this covenant…difficult to discover through inspection…leave it to K remedies |
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Visable/Known easements relative to covenant against encumbrances
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c. Visable/Known Easements
i. Those affecting title….usually included in the covenant…easements ii. Those affecting physical conditions of the property are not included 1. Visible and apparent public easementst are usually contemplated by the parties and bargained for 2. Visible and apparent private easements that diminish value constitute breach 3. Knowledge of encumbrance IS NOT sufficient to constitute breach 4. Can waive certain encumbrances |
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Frimberger, relative to covenant against encumbrances
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violation of wetlands not considered a breach
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Bianchi
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allowed for septic tank violation to be breach…was substantial and could tell from record-huge difference..usually building code violation
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Future covenants
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Grantor promises to do some future act, run with the land, thus if ABC, than A is liable to C on any of the future covenants in A is liable to C on any future covenants
-To run you have to convey something you can attach and to which it can run, therefore need to transfer either title or possession…did not do that in Rocakfellor |
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Covenant of General Warranty
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The grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain to superior title
a. Only picks up legal fees in losing litigation of the grantee b. Covers complete loss of title as well as an encuberance but is only breached when someone holding superior title actually or constructively evicts the grantee from the land i. Brown v Lober: P there received a reduce amount for his stake in mineral rights in his land after the buyer discovered that he did not have full rights…held that it was not a breach because did not get evicted or “Feel the weight of superior title” |
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Covenant of quiet enjoyment
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grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title
a. Identical to covenant of general warranty so look at rules governing it b. Case law has made the two identical |
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Covenant of further assurances
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grantor promises that he will excuse any other documents required to perfect the title conveyed
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Special Warranty Deed
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contains warranties only against the grantor’s own acts but not the acts of others
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Quitclaim Deed
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Contains no warranties of any kind
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Estoppel by deed
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If a grantor subsequently acquires title to land after already conveying it, she is estopped to deny that she did not have title at the time the deed passed to the grantee.
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Delivery
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In order for a deed to be effective it must be delivered with the intent that it be presently operative
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Physical Delivery
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Handing the deed over to the individual or third party escrow agent with words indicating the grantors intent to transfer the interest immediately
-However, words and actions on their own are usually sufficient -can deliver to third party escrow agent who will deliver when the transaction is complete |
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Non Physical Delivery
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-Dilevery means no more than an act that evinces an intent to be immediately bound by the transfer
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Conditional Delivery-3 JN, common law
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Common Law: There is no intent to be immediately bound and thus there is no delivery
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Conditional Delivery Sweeney
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: Delivery is good, but the condition is voided….handed over deed that was suppose to become operative only upon death, but could not have fulfilled the purpose if not meant to deliver, and further it would need to be delivered to a third person for effective conditional delivery….DEED CANNOT BE HELD IN ESCROW BY GRANTEE
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Chillemi...conditional delivery
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Delivery is good and the condition is enforced as long as the intent is clear…a war vet gave deed to wife intending it to be operative only if died…he returned and the wife recorded the deed after marital dispute…court upheld the condition and stated that grantees can hold deeds in excrow
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Rosencrantz (Revocable Delivery)
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Placed deed in bank in safe deposit box held in joint tenancy…said it was not valid until death…had name still on the envelope on the deed…held not delivered as it was retrievable by them at any time…did not set the deed free!
Vasquez: deed upheld because gave it to lawyer to deliver on death, but showed no intent to be able to retrieve it…. -The way around all this is revocable trust |
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Mortgages
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-To borrow money from a lender the borrower must give the lender a note and a mortgage.
-Promissory Note: creates personal liability for the debt -Mortgage: Secures payment of the note -Mortgagee=Lender -Mortgagor=Borrower, interest in the property is equity -Deficiency judgment: if foreclosing on the mortgage, mortgagee may seek a deficiency judgment in the difference between that the property is sold for. The difference is collectible out of the mortgagor’s assets -Usually cant challenge sale price of judicial sale unless shocks the conscience -May be able to challenge the price of a private sale -Anti-deficiency statute: Some states prohibit deficiency judgments if the mortgagor has used proceeds of the loan to purchase a residence -others prohibit when a particular type of foreclosure process is used; power of sale -some say difference between market value and principal instead of high bid and principal -First mortgage has right to be paid and then second mortgage |
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Recording System Analysis
Step 1 and 2 |
Step 1: Who has priority of title?
R: At common law, as between successive grantees, priority of title was determined by priority of conveyance, upholding the concept of “first in time is first in right.” Step 2: Is there a recording act that will protect this individual from enforcement of this interest? 3-JN’s |
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Notice JN R
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: In a notice JN a subsequent bona fide purchaser for value is protected against prior unrecorded interests
-protects subsequent purchaser against prior unrecorded instruments even if they too fail to record |
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Race JN R
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: As between multiple successors in interest, the individual who is able to record their interest first prevail, irrespective of any knowledge of others’ prior interests.
-protects subsequent purchaser only if they record first. |
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Race/Notice JN R
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: A subsequent purchaser can prevail against prior unrecorded instruments if she is without notice of the prior instrument and records before the prior instrument is unrecorded
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Zimmer Rule
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In a Race/Notice JN the statute protects the subsequent purchaser who first records his own conveyance if all prior conveyances in his chain of title are also recorded
-Chain of Title: Recorded sequence of transaction by which title has passed from a sovereign to the present claimant or the period of time in which records must be searched and the docs that must be examined during this time period |
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Messersmith
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in RN JN held that could not be considered BFPFV if receiving from someone who did not have a proper acknowledgement (Bad deed, but it was recorded)
-majority if the defect is patent than the deed does not give constructive notice, but if it is latent does |
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BFPFV
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Bona Fide Purchaser for Value (BFPFV): A subsequent purchaser who parts with valuable consideration that lacks notice of any interest that a third party holds in the land
-Did they have notice when parting with value -Pre existing debt does not equate to parting with value Note: Notice is measured when the deed is delivered |
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Actual Notice
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The individual has actual knowledge of the prior interest
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Constructive Notice (Record Notice)
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Knowledge of the prior interest is imparted on the individual by law notwithstanding any actual knowledge of its existence…
1. Record Notice: notice of any prior interest that would be revealed by an appropriate search of the public records affecting land title a. Charged with such notice even if not conducting a title search |
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Luthi
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Subsiquent purchaser sought protection from a prior interest through the use of the recording act…it was held that this individual did not have constructive notice from a recorded “Mother Hubbard Clause” which conveyed all interest within a specified county…”Mother Hubbard’s” were held to be good between the parties and actual notice of them but not constructive
-even if filed wrong will still be held to constructive notice -Recorder will not be held liable for negligence of a misfile but a lawyer may be for not filing |
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Guillette
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If purchasing from a common grantor in a development that seems to be single family housing puts you have constructive/inquiry? notice to check on all the conveyances in that area…
(ONLY SOME JN’S FOLLOW GUILLETTE |
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Wild Deed
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Board of Ed. v Hughes: Deed with implied authority becomes operative when they put their name on it… a recorded conveyance from remote grantee to subsequent purchaser does not serve as notice unless the deed from the original grantor was recorded…individual subsequently made his deed operative by signing it after a purchaser from a remote grantee recorded conveyance, but was able to claim BFPFV because the original grantor’s conveyance was not recorded
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Special Circumstances...
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See outline
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Inquiry Notice
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: If a purchaser has actual notice of facts that would cause a reasonable person to inquire further, he is deemed to know the additional facts that the inquiry would uncover whether he inquired or not.
-Possession: Courts have held that if a person other than the grantor is in possession of the property, than the purchaser is obligated to inquire into the possessor’s rights constituting inquiry notice. -Waldroff: Even though the individual bought an apartment complex he was still held to have inquiry notice that one of the units was sold and not leased (majority) -however can rely on record, so if lease is recorded but there is an unrecorded interest than the court will say BFPFV to the unrecorded interest -look closely at things that may not constitute possession that due…liken to open and notorious for AP -Also look to use of the land for inquiry notice analysis….look at farming -Grose: Weird exception, Grose purchased land from Ryberg and used it to farm….however, did not use it in a way inconsistent with the owners rights and therefore did not put them on notice as to the possibility of a prior unrecorded instrument…(Don’t take this exception too seriously) -Ask, is it inconsistent with the record title |
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Harper v Paradise
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A deed granting fee simple in 1928 referenced a deed in 1922 that only gave LE with a remainder. Those receiving the fee simple based on the 1928 deed should have been on notice of the remainder given in 1922, and thus cannot be BFPFV, there therefore
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Shelter Rule
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An individual who takes from a BFPFV protected by the recording act has the same rights as his grantor
-This was invoked as without it the recording act would be meaningless as the land to the grantor would become valueless -“Can seek protection under” |
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Extra
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-By statute does not usually protect donees or divisees
-Most courts require more than a nominal value to be considered a BFPFV and must part with a substantial amount -Creditors who have established a lien by attachment or judgment are protected by recording statutes -some require that you have to enforce or foreclose on the lien to receive protection -Some JN’s will not recognize an individual who receives title via quitclaim deed as BFPFV -Bona Fide Creditor for Value is treated the same as BFPFV -impute notice in special relationship…agent/seller |
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Title Insurance
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-Guarantees that the insurance company has searched the public records and insures against any defects in the public records, unless such defects are specifically excepted in the policy coverage
-generally excludes govet regulations, unless enforcement or violation is recorded in the record -excludes unrecorded easements, implied easements, easements under prescription, and claims of persons not shown in the public record -excludes defects that would be revealed by survey or inspection Mortgagee’s Policy: Insures the mortgage lender and not the owner Homeowner’Policy: Insures the homeowner |
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Easement
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-a nonpossessory right to use land in the possession of another
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Affirmative Easement
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authorizes the holder to do a particular act on the servient land
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Negative Easement
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entitle the owner to prevent a particular act on the servient land
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Easement Appurtenant
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benefits the easement holder in using the dominant land
-seen as attached to the dominant land not to any particular owner of that land -exists only when there is both a dominant and servient land -usually transferable and run with the land Ex: access easement |
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Easement in Gross
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benefits the easement owner personally rather than in connection with the use of the land that that person owns.
-attached to the holder and not the land -involves only servient land Ex: utility easement Note: To determine whether an easement is appurtenant or in gross must look at intent. -If the easement contributes to the use or enjoyment of a particular parcel it will be looked at as appurtenant -If intent cannot be determined than courts will default to appurtenant |
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Creation of easement by grant
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When grantor grants an easement to another person
-Subject to the same SOF requirements (See above) |
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Creation of easement by reservation
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When grantor conveys land to another but reserves a new servitude that did not exist before as an independent interest
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Reservation in a third person
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Reservation in a third person?
-Common Law: Can only reserve an easement in a grantor -CA/Modern/Willard: Can reserve easement in a third party…reserved parking lot for church purposes…want to abide by grantor’s intent -check out language if it says “subject to an easement” than reservation CAREFUL: Exception: an exception is a provision in a deed that excludes from the grant some preexisting servitude on the land…easement CANNOT be excepted in a third party |
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Implied by prior existing use
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As an operation of law, an easement may be implied based on prior existing use if at the time of severance title to land was held by a common owner, there was an existing, apparent, and continuous use, and a reasonable necessity for such a use.
MAIN RATIONAL FOR IMPLYING THIS EASEMENT: it is a demonstrations of the parties’ intent -problem for hidden easements such as sewer pipes…however courts duck this with efficiency -if dominant and servient come back together, the easement is destroyed and if severed start the analysis over again -Exempt from SOF |
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Common Owner
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a. Must be at least two parcels
b. One must be held by the original owner and one by a third party |
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Existing Apparent and Continuous Use
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a. Must be so apparent and continuous that the parties intended it to continue-not sporadic
b. Since one cannot have an easement in their own land, this type of use existing before severance is termed to be a quasi easement c. Now the standard is what can be determined through reasonable inspection, does not have to be readily visible |
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Van Sandt
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: Sewer line that was used and existed beforehand began flooding a house with sewage…despite being underground was held to be apparent because there were fixtures that had to be connected and they could have found out
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Reasonable Necessity
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a. Must be convenient or beneficial to the use and enjoyment of the dominant tenement but does not need to be absolutely necessary
b. Look t see if the owner would have to spend substantial money or labor in order to provide a substitute c. If reserving it in the grantor, courts look for a higher standard of necessity because it is against the language of the deed (strict)… |
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Easement by necessity
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As an operation of law, an easement may be implied by necessity if at the time of severance it is held by a common owner and the use of the land became necessary to the enjoyment of the claiments parcel.
-usually involve access to landlocked parcels courts have failed to extend it to utilities -servient owner is permitted to select the location of the easement, as long as it is reasonable -Only endures so long as it is necessary…as soon as it ends the easement is terminated -Policy: Productive us of land/alienability, no land locking….Presumed intent…presumed that grantor is presumed to convey everything that is necessary to for the grantee to make beneficial use of the land -Can expressly K not not to have an easement…court must decide if this is valid 1) Common Owner (See Above) |
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Strict Necessity
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-Strict Necessity is required…there is no other way to enjoy the land without the implied easement
-Navigable water precludes strict necessity -MUST exist at time of severance…Othen: couldn’t prove that strict necessity existed in 1896 because everyone dead…strict necessity not met -Few JN’s use reasonable necessity standard -originally utilities not considered a necessity but luxury…however now they may be…now is it necessary to have an easement to get them, wireless everything! |
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Easement by Prescription
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: As an operation of law an easement may be implied by prescription if actually and exclusive use of the property is open and notorious, adverse with a claim of right, and continuous for the statutory period.
-negative easement cannot be attained through prescription -Policy: highest and best use, punishing the individual sleeping on their rights -Public Prescriptive Easements…same rules, but the private owner must be put on notice |
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Actual and Exclusive
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a. Jurisdictional Split on “Exclusive”
i. Othen: If it is used by the owner or others it is presumed to be permissive and not exclusive ii. Majority: Exclusivity does not require that ONLY the claimant made use of the property but that the claimant right to use the land does not depend on the like right of others” iii. Othen: Do not need precision only as to the general outlines consistent with use |
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Open and NOtorious
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a. Sufficiently visible and apparent that a diligent owner who was present on the land at the time would be able to discover it
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3) Adverse with a claim of right
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a. See AP…same JN’l split
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Continuous for the Statutory Period
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-continuous use does not have to be constant use…The use only needs to be as frequent as it is appropriate for the land
-seasonal use may be appropriate for rural land -10 and 20 years is usually the time period… -Continuous is based on owner interrupting use…even if incidental like a fallen tree |
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License
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an oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass
-A license is revocable where an easement is not |
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Easement by Estoppel
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If a licensee has received oral consent to use the property and expends substantial money or labor in reasonable reliance on the license and the licensor should reasonably expect such reliance, the licensor is stopped to revoke it.
-only subsists as long as necessary to allow the licensee to recover the value of her investment -Policies are fairness/justice and the productive use of land Note: a second situation where a license may become irrevocable is when the license is coupled with an interest. -Determined from the possessory right of chattel on the land… |
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Easement by Estoppel Elements
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1) License…can be express or implied
2) Reliance by Licensee -Look for improvement in either the dominant or servient tenement…courts are unclear if it matters….definitely if they improved the other persons land -Also, look for reasonableness…courts find it more reasonable if there is a special relationship or if the intent is clear -restatement says either can be improved 3) Licensor knows or should know or reasonably expect the reliance to occur |
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Holbrook
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: Used a road way to build house, used it after, made improvements to both tenemants….held that it the license was irrevocable.
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Assignability of easements
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The assignability of an easement is dependent on its classification as either appurtenant or in gross. (SEE ABOVE)
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Appurtenant-Benefit
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such an easement is deemed attach to a dominant parcel of land, thus any transfer of the dominant parcel of land automatically transfers the benefit of the easement, unless there is a contrary agreement.
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Appurtenant-Benefit
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): any transfer of servient land usually transfers the burden of the easement
-Does not apply if the transferee qualifies for protection under the recording act -OR if the owner of the dominant agrees to release the easement -limited by the needs of the dominant tenement |
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In Gross- Benefit
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Originallhy): such easements were not transferrable as they had the potential to unfairly increase the burden on servient land
(Modern, Miller v. Lutheran Conference and Camp Association): Commercial easements (used primarily for economic benefit and not personal satisfaction) in gross are freely transferable while noncommercial easements in gross may not be -recreational easements such as fishing, boating, and camping are usually not assignable -HOWEVER, all easements in gross are transferrable if it is intended by the parties…see if they intended it to be transferable (Language, to heirs and assigns is evidence) -If restricting look for the easement to be “personal and beyond the original contemplation of the parties) |
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Divisibility Generally
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Generally, an easement in gross is divisible when the creating instrument indicates or when the easement is exclusive: the easement owner has the sole right to engage in activity the easement permists
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Miller(One Stock Rule)
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One Stock Rule” that such an easement can be divisible as long as it is used jointly meaning that one person can veto the other’s decisions (rarely used)
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Restatement 3rd
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says, easement in gross is divisible unless it is against the intent of the parties or increases the burden on the servient tenement
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Scope of Easement
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The scope of an easement may be adjusted in the face of changing times to serve the original purpose so long as the change is consistent with the terms of the original grant
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Presault
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Could it be contemplated at the time that the easement was created that such a use would reasonably serve the purpose of the grant?...using an easement granted for rails was not foreseeable for trails…nature is completely different, commercepeople
LOOK at the MANNER, FREQUENCY, and INTENSITY of USE |
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Further analysis
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-change over time to take advantage of developments in technology and development of the dominant estate are permissible; what is abnormal at one time may become normal later
-Subdivision of original parcel is usually acceptable, absent evidence that it interferes with the rights of the servient owner -powerlines above or below ground are usually not consider foreseeable -The location of an easement once fixed by the parties, cannot be changed by the servient owner without permission of the dominant owner-Majority -Rest. 3rd Servient owner can change the location at his expense if the change does not significantly lessen the utility of the easement, increase the burdens on the use of enjoyment, or frustrate the purpose the easement was created for…ask about |
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Prescriptive easement Scope
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PRESCRPTIVE EASEMENT: the uses made of a prescriptive easement must be consistent with the general kind of use by which the easement was created and with what the servient owner might reasonably expect to lose by failing to interrupt the adverse use
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Brown v Voss
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An easement appurtenant to one parcel may not be extended by the owner of the dominant estate to other parcels owned by him, whether adjoining distinct tracts to which the easement is not appurtenant. Such an extension constitutes misuse of the easement and is considered a trespass.(Cannot use the easement to benefit any other land besides the dominant parcel)
-HOWEVER, courts are given broad discretionary power to fashion relief in such situations -Brown court looked at extension and saw that in adding a lot, but still keeping the same single family home, just on a bigger lot that: -that P’s were reasonable in development of their land -there was no damage to D in use of there easement -no increase in volume of travel to the easement -no increase in burden to the servient estate -D’s sat back and let them do 11K in improvements -there would be considerable hardship to P’s if being prevented in using -$1 in damages |
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Termination of Easements
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Release: May release the easement in writing subject to SOF
Expiration: If duration of the easement is limited in some way it can be ended through expiration. -Defeasible easement can occur with the easement ending at the occurrence of some event Merger of Dominant and Servient Tenement: An easement ends by merger if the easement owner later becomes the owner of the servient estate Estoppel: If the servient owner reasonably relies upon a statement or representation of the easement owner Abandonment: In order to establishment the abandonment of an easement there must be acts by the dominant tenement manifesting either a relinquishment of the easement, or a purpose inconsistent with its future existence Presault: Removed tracks from an easement from railroad…left on only cross ties, and never looked to restore service…held abandoned -May end on a statutory non use for a period of time Condemnation: If the government exercises its eminent domain power to take title to a fee interest in the servient estate for a purpose that is inconsistent with continued existence of the easement Prescription: If the servient owner wrongfully and physicall prevents the easement from being used for the prescriptive period the easement is terminated |
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Negative Easements
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the right of the dominant owner to stop the servient owner from doing something on the servient land
Currently, only certain types of negative easements are recognized in the US. The right to stop your neighbor from: |
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Negative easements, Listed
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1) Blocking your windows
2) Interfering with air flowing to your land in a defined channel 3) Removing the support of your building 4) Interfering with the flow of water in an artificial stream 5) Obstructing your view to the SF Bay 6) Blocking a Solar Collector -Instead such agreements are treated as equitable servitudes (see below) -Conservation easements are perpetual, transferable and in gross and are meant to preserve scenic and historic areas and open space |
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Covenants
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A promise in land can be enforced as a real covenant or an equitable servitude. This enforcement is dependent on whether the benefit/burden of the covenant can pass to successors in interest…
BURDEN=Promissor’s duty to perform BENEFIT=Promisee’s right to enforce the promise |
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Elements
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Look at chart
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Form
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The covenant must be in writing.
-Covenant is an interest in land and thus is subject to the SOF -Note: Subdivision exception -Oral Covenants can be enforced if it is subject to one of the SOF exceptions (See above) |
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Intent
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The original parties must intend that the covenant bind the promisor’s successors
-First look to language of the covenant, words such as assigns or successor’s usually evidence this -Next look at the nature of the restriction, situation of the parties and other circumstances -a covenant to protect view makes no sense if it does not bind successors |
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Touch and Concern
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The burden of the covenant must touch and concern the land.
-Courts have held that it is impossible to state an absolute test to determine what covenants touch and concern the land |
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English JN
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Covenants that compel the covanenter to submit to some restriction on the use of their property touch and concern the land while covenants that require an affirmative act, even on one’s own land do not. (Payment of money)
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Modern-Legal effects Test
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Covenants that substantially alter the legal rights which would otherwise flow from ownership of the land touch and concern the land.
-Neponsit held that a covenant to pay to maintain common areas touched and concerned the land and effected the homeowners association right to enjoy the land connected to it ….this payment is a burden that should be charged to the land that benefits from it -Look for conferring benefits to the land owner…court held covenant to pay sports club touched and concerned the land |
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Good and Wholesome Test
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These covenants have been described as those that “deal with the land” and are “good and wholesome.”
-Compare to classics: duties to pay rent, duties to repair, non industrial building, single family housing…Neponsit: the assessment covenant in common interest communities -Traditionally negative covenants are always held to touch and concern the land -Why you wouldn’t want an affirmative duty to touch and concern 1) required judicial supervision 2) may impose large personal liability 3) negative covenants limits the individuals loss to only the investment in land itself 4) unlimited payment mirrors feudal service or perpetual rent |
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Caulett
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: Clause to restrict owner to have to hire the seller to build on the property was not held to touch and concern the land…such a cause is clearly personal and does not enhance or otherwise affect the use or value of any retained lands…also ambiguous
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Rest. 3
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supersedes the touch and concern requirement with a default rule that a covenant is valid unless it is unconstitutional or against public policy
1) Servitude that is arbitrary spiteful or capricious 2) A servitude that unreasonably burdens a fundamental constitutional right 3) A servitude that imposes an unreasonable restrain on alienation 4) A servitude that imposes an unreasonable restraint on trade or competition 5) A servitude that is unconscionable |
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Horizontal privity-American
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JN- finds horizontal privity when a covenant is created in a transaction involving the conveyance of an interest in land between covenanting parties
a. Recognized as existing in grantor-grantee relationship b. Original sub-divider is in POE with original promisor c. Mutual interests parties are included in this JN |
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English/Mutual Interests JN
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Horizontal privity exists between the promisor and promise who hold mutual interests in the same land
a. landlord tenant relationship b. easement holder and the underlying fee simple c. normal grantor/grantee relationship does not suffice as it is considered successive |
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vertical privity
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There must be privity of estate between one of the covenanting parties and the successor in interest
-The covenant is enforceable by and against remote parties only if those parties have succeeded to the original parties’s estate in question -fee simplefee simple |
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Notice
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The successor must have notice of the covenant
(Look at notice requirements for Recording Act analysis) -A divisee, heir, or other doneed is bound by a prior covenant even without notice as they are not a BFPFV under the recording act |
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Verticality of Estate
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the promise is enforceable by a person who succeds to the original promisee’s estate or to a lesser interest carved out of it
-fee simplefee simple or fee simpleLE |
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Vertical Succession
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Possession
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3rd Party beneficiary
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Standing to bring suit (Third Party Beneficiary Theory): If not succeeding to any land, but still looking to bring suit look to:
1) “Substance over form” that establishes privity of estate between the P and D, if the property owners association was reciprocally benefited and burdened by the covenant- Neponsit 2) If there is evidence that the plaintiffs were intended beneficiaries of the covenant, they may enforce it regardless of a lack of vertical privity |
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Real Covenant
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A real covenant is a promise concerning the use of the land that benefits and burdens the original parties to the promise and also their successors. It is enforceable at law in an action for damages. In order to be actionable the benefit must pass to the individual who is seeking the action and the burden must pass to the party against who the action is being sought.
-The promissor’s successors in title are bound to perform the promise and the promisee’s successors in title are able to enforce the promise in an action to recover compensatory damages. -Allows for a promise to be enforced against a successive owner -burden and benefit run with ESTATES in land…important in vertical privity -thus a burden of a real covenant is not enforceable at law against an adverse possessor because an adverse possessor does not succeed to the original owner’s estate but takes a new title by operation of law -The method of conveyance is not relevant |
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Equitable Servitude
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equity, injunction (negative easement), affirmative obligation
An equitable servitude is a promise concerning the use of land that benefits and burdens the original parties to the promise and their successors and is enforceable in equity. |
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Implied Reciprocal Servitude
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Form-Addition to Burden or Benefit
a. See RCBN OR b. If there is a one sided promise between a grantor and grantee, and no writing in regards to a reciprocal promise, courts will imply a reciprocal servitude if a common owner and common plan exist before any single lot is conveyed. (Sanborn) -Common Plan: where a developer manifests a common plan to impose uniform restrictions on a subdivision, most courts will find implied equitable servitudes even without a writing -uniformity is not required in the plan a. Every lot in the plan is both burdened and benefited by the restrictions b. Sanborn: a little over half of the deeds conveyed had the express condition…all lots were SFH c. Guilette: Reciprocity is not implied it is existent d. Not everyone will abide by this |
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Zoning
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The exercise of police power-the power of government to protect health, safety, welfare, and morals.
Euclid- Held that zoning laws did not deprive individuals of due process, and made zoning ordinances valid. However, zoning was not challenged as a whole, but left individual ordinaces up to challenge if they were arbitrary and unreasonable….did not prevent industrialization, but instead looked to guide it. Standard Act: enabled states to zone …zones had to be in line with a comprehensive plan. |
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Nonconforming Use
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a use of land that lawfully existed before the zoning ordinance was enacted, but that does not comply with the ordinance.
-One nonconforming use cannot be changed into another nonconforming use -Nonconforming use is lost via abandonment or substantial non-use for the statutory period of time -survives change of ownership -may expand to meet natural changes as long as ipact does not increase |
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Amortization
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Gives the owner of a nonconforming use a fixed period of time to operate the use and when the period ends, the right to continue the use ends. In order to be upheld such amortization clauses must be reasonable.
-Factors looked at to determine reasonableness: -nature of the use in question -the amount invested in it -the number of improvements -the public detriment caused by the use -the character of the surrounding neighborhood -the amount of time needed to eliminate the use PA Northwestern Distributors: 90 days to amortize a porn shop where it was the individual’s means of income was not enough |
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Vested Rights
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a proposed non conforming use may be protected from zoning if sufficient commitments have been made
-look at plans drawn, permits obtained, the site prepared, construction begun -estoppel is sometimes looked at as well |
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Takings
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Under the fifth amendment to the constitution it states that private property shall not be taken for public use without just compensation.
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Eminent Domain
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The power of the governmentt to force transfers of property from owners to itself
Condemnation: If the government wishes to condemn private property for public use it must comply with procedures designed to assure owners due process of law.- Conemnation hearing -after the condemnation hearing the government must pay the compensation awarded plus interest |
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Public Use
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The government may not condemn land for private purposes and can only do it constitutionally for a public use.
Kelo: The supreme court in Kelo stated that a public use can be defined as a public purpose, or anything that is of advantage or benefit to the public. -The court did not comment on transferring land from what private to the owner, and may be hesitant to do so. -Some look at the ends….are the ends sufficiently public? -Kelo looked at this and gave the legislature broad latitude in determining what public needs justify the use of the takings power -Some look at the means….are the means necessary to accomplish the goal that the government is seeking….only should be used when |
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Just Compensation
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the payment of market value
-does not take into consideration surplus value (selling in the aggregate) -subjective value -autonomy |
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Regulatory Takings
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Under its police power, as held by the Supreme Court in Euclid, legislatures can constitutionally adopt regulations limiting land use. Such a power is necessary for cities and societies to progress. However, as put by Justice Holmes if a “regulation goes too far it will be considered a taking.”
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Loretto
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IF GOVERNMENT ACTION IS SEEN TO WORK A PERMANENT PHYSICAL OCCUPATION THEN IT WILL BE CONSIDERED A TAKING
-The court held that requiring a building owner to allow a cable company to place its boxes on its building was considered a taking. -Court emphasized the requirement of allowing a third party to come in and invade property….contrasting with building regulations that are an affirmative duty on the owner…lose control over timing, extent, and nature of the invasion -not that the court distinguishes between permanent physical occupation and temporary invasion…temporary invasion such as demonstration at a shopping center or small flooding |
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Lucas
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: IF A REGULATION ELIMINATS ALL ECONOMICALLY BENEFICIAL OR PRODUCTINVE USE OF LAND IT WILL BE CONSIDERED A TAKING UNLESS IT IS JUSTIFIED UNDER THE BACKGROUND PRINCIPALS OF PROPERTY OR NUISANCE LAW
-The court held that a law restricting all development of beach front property eliminated all economic benefit and was a Per Se taking. The court then held remanded the case to determine whether it would be justified under background principals of South Carolina law. -Justified under what the owner expected his rights to be when acquiring the property -look at State nuisance law: the degree of harm to public lands and resources posed by the activities, their suitability to the lands and resources, the social value of the claimant’s activities, and their suitability to the locality in question, and the ease with which the harm could be avoided. -Conceptual Severance is generally rejected in determining if an entire economically beneficial use is eliminated |
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Penn Central
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If a regulation does not fit within one of the per se taking rules as put forth in Loretto or Lucas, the court will look to the balancing test as put forth in Penn Central to determine whether a taking has occurred. (Supreme court held that a regulation to keep the historical preservation of the building was not a taking despite hindering it from sky scraper development)
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Character of the gornmental action
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-If it is more like a physical invasion like Loretto it is more likely considered a taking
-Reasonably related to the public health safety or welfare…. -benefit conferring…more likely a taking -harm preventing…less likely a taking; Hadacek: held that a regulation of preventing the operation of a brick factory was not considered a taking because it was harm/nuisance prevention “public bad” -Penn Coal: found the character not public but private…one house affected…took knowing about the regulation and Penn Coal can give notice. |
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Economic Impact of the Regulation on the claimant
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-Penn Central: Little economic impact because they were able to get money from the train station…In addition they had transferable development rights per the statute and thus was able to mitigate any economic burden by selling those TDRs
-Look at the property in its entirety…deny conceptual severance -Reasonable Return on the land -Penn Coal: majority held that a regulation taking away the right to mine mineral supports was a taking….the economic impact was high when dividing the land into two estates...completely wiped out mineral estate which was recognized by Pennsylvania law…support estate -“Reciprocity of Advantage” where the advantages conferred on the property make up for the burdens of the regulation |
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Extent to which the regulation interfered with direct investment backed expectations
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Penn Central: Bought the property to run train station, not a skyscraper
-The buyer who purchases land who purchases land already devoted to a legally permitted use already has a reasonable investment backed expectation that such a use will continue -Look for primary use |
