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149 Cards in this Set
- Front
- Back
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The Fee Simple Absolute
-How do you create it? |
"To A" or "To A and his heirs"
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The Fee Simple Absolute
-Distinguishing Characteristics |
This is absolute ownership of potentially infinite duration. It is freely devisable, descendable, and alienable
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The Fee Simple Absolute
-Accompanying future interest? |
None is created.
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The Fee Tail
-How is it created? -Distinguishing Characteristics -Accompanying Future Interest? |
Virtually never tested
-"To A and the heirs of his body" -Basically abolished in the US. Attempt to create would create a fee simple absolute. Historically it would pass directly to grantee's lineal blood descendants no matter what. -Accompanying future interest was created. In the grantor, called a reversion. In a third party, a remainder |
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The Defeasible Fees
-Fee Simple Determinable---How is it created? |
"To A for so long as..."
"To A during..." "To A until..." Grantor must use clear durational language If the stated condition is violated, forfeiture is automatic |
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The Defeasible Fees
-Fee Simple Determinable ---Distinguishing Characteristics |
The estate, like all of the defeasible fees is devisable, descendable, and alienable. BUT ALWAYS subject to condition.
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The Defeasible Fees
-Fee Simple Determinable ---Accompanying Future Interest |
Yes.
It is possibility of reverter in the grantor. |
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The Defeasible Fees
-Fee Simple Subject to Condition Subsequent ---How is it created? |
"To A, but if X event occurs, grantor reserves the right to reenter and retake.
-Here, grantor must use clear durational language AND carve out the right to reenter. |
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The Defeasible Fees
-Fee Simple Subject to Condition Subsequent ---Distinguishing Characteristics |
The estate does not automatically terminate, but it can be cut short at the grantor's option, if the stated condition occurred.
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The Defeasible Fees
-Fee Simple Subject to Condition Subsequent ---Accompanying Future Interest |
Right of entry, synonymously with power of termination
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The Defeasible Fees
-Fee Simple Subject to Executory Limitation ---How is it created? |
"To A, but if X event occurs, then to B."
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The Defeasible Fees
-Fee Simple Subject to Executory Limitation ---Distinguishing Characteristics |
This is just like a fee simple determinable, except, now, if the condition is broken, the estate is automatically forfeited in favor of someone other than grantor.
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The Defeasible Fees
-Fee Simple Subject to Executory Limitation ---Accompanying future interest |
Yes. Shifting executory interest.
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Rules of Construction
-Absolute restraints on alienation |
Absolute restraints of alienation are void!
Definition: An absolute ban on the power to sell or transfer, that is not linked to reasonable time limited purpose. |
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The Life Estate
-How is it created? |
"To A for life"
This is an estate that must be measured in explicit lifetime terms and NEVER in years |
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The Life Estate
-Terminology |
To A for life
-A has a life estate -A is the "life tenant" -O has a "reversion." At the end of A's life, the estate reverts back to O or O's heirs. |
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The life estate pur autre vie
-Definition |
A life estate measured by the life of another.
To A for the life of B |
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The life estate
-Distinguishing characteristics and the two basic rules |
The life tenant's entitlements are rooted in the important doctrine of waste.
Rule #1: the life tenant is entitled to: All ordinary uses and profits from the land Rule #2: The life tenant must not commit waste (hurt future interest holders). |
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Waste
-3 species of waste |
-Voluntary/Affirmative: Overt conduct that causes a drop in value.
-Permissive: Neglect. When land is allowed to fall into disrepair. Taxes: Life tenant must pay all ordinary taxes to the extent of income or profits from the land. If not profits, to the premises' fair rental value. -Ameliorative: The life tenant must not engage in acts that will enhance the property's value unless all future interests holders and known & consent. |
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Voluntary Waste and Natural Resources
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General rule: Life tenant must not consume or exploit natural resources of the property unless one of four exceptions apply:
PURGE Prior Use: Prior to the grant, the land was used for exploitation -Open mines doctrine: can continue to mine the open mines, but not open new ones Repairs: May consume natural resources for repairs and maintenance. Grant: May exploit if granted that right. Exploitation: This land is suitable only to exploit. |
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Future Interests
-Possibility of Reverter |
This is capable of creation in the grantor.
ONLY accompanies a fee simple determinable. |
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Future Interests
-Right of Entry/Power of Termination |
This is capable of creation in the grantor.
Only accompanies a fee simple subject to a condition subsequent |
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Future Interests
-The Reversion |
This is capable of creation in the grantor.
This interest arises in the grantor, when he conveys as estate of lessor quantum than he started with. |
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Future Interests
-3 types that are held by people other than the grantor |
Vested remainder: 3 species
-Indefeasibly vested remainder -Vested remainder subject to complete defeasance -Vested remainder subject to open Contingent Remainder Executory Remainder: Two Species -Shifting executory interest -Springing executory interest |
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What is a Remainder?
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A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.
-Usually accompanies a life estate or a term of years. |
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What is the Difference Between Vested Remainders and Contingent Remainders?
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Vested: If it is both created in an ascertained person and not subject to any condition precedent
Contingent: If it is created in an unascertained person or is subject to a condition precedent or both. |
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The Rule of Destructability of Contingent Remainders
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At common law, a contingent remainder was destroyed if it was still contingent at the time the preceeding estate ended.
-This has been abolished! O or O's heirs now hold the estate subject to B's springing executory interest. |
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The Rule in Shelley's Case
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At common law, this rule applied in ONE setting ONLY:
O conveys "to A for life, then, on A's death, to A's heirs." Historically, the present and future interests would merge into a fee simple absolute. This was a rule of law, and would apply in the face of contrary grantor intent. This has been abolished: -A has a life estate -A's heirs have a contingent remainder -O has a reversion (A could die w/o heirs) |
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The Doctrine of Worthier Title
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AKA: The rule against a remainder in grantor's heirs.
This is still viable in most states. Situation: To A for life, then to O's heirs" If no such doctrine: -A has life estate -O's heirs have a contingent remainder With the doctrine: -A has life estate -O has a reversion (O's heirs have nothing) This is to promote the free transfer of land. This is a rule of construction, NOT a rule of law. Grantor's intent is controlling. |
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Indefeasibly Vested Remainder
-Definition |
The holder of the remainder is certain to acquire an estate in the future with NO CONDITIONS ATTACHED.
To A for life, remainder to B. -A has life estate -B has indefeasibly vested remainder. If B predeceases A, B's future interest passes by will/intestacy |
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Vested Remainder Subject to Complete Defeasance
-Definition |
Remainderman's taking is not subject to any condition precedent. BUT his right to possession could be cut short because of a condition subsequent.
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Vested Remainder Subject to Open
-Definition |
Remainder is vested in a GROUP of takers, at least one of whom is qualified to take. BUT each class member's share is subject to partial diminution because additional takers can still join in.
-Class is either open or closed ---Open: others can still join ---Closed: Maximum membership has been set. The class closes whenever a member can demand possession. -Rule of Convenience: if there is a possibility of more takers, but the class members can demand possession, the future takers are out of luck (except for the womb rule)! |
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Executory Interests
-Definition |
Executory Interest is a future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) OR in the grantor or his heirs (Springing)
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Shifting Executory Interest
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It always follows a defeasible fee and cuts short someone other than the grantor.
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Springing Executory Interest
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This interest cuts short the grantor.
"To A, if and when he marries." A is unmarried. A has a springing executory interest O has a fee simple subject to A's springing executory interest |
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Rule Against Perpetuties
-General Rule |
Certain kinds of transfers are void if there is any possibility, however, remote, that the given interest may vest more than 21 years after the death of the measuring life.
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Rule Against Perpetuties
-What conveyances does the RAP apply to? |
3 types
-Executory interests -Contingent Remainders -Certain vested remainders subject to open Does NOT apply to: -Any future interest in the Grantor -To indefeasibly vested remainders -To vested remainders subject to complete defeasance |
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Rule Against Perpetuties
-Step 2 of RAP Application |
Identify the conditions precedent to the vesting of the suspect future interest.
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Rule Against Perpetuties
-Step 3 of RAP Application |
Identify the measuring life. Look for a person alive at the date of the conveyance and ask whether that person's life or death is relevant to the condition's occurrence
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Rule Against Perpetuties
-Step 4 of RAP Application |
Will we know, with certainty, within 21 years of the death of the measuring life, if our future interest holder(s) can or cannot take?
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Rule Against Perpetuties
-Bright Line Rule #1 |
A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP.
-If the conveyance is bad as to one, it is bad as to all. The entire class gift is void. Example: "To A for life, then to such of A's children as live to attain the age of 30." A has 2 children, B and C. A is alive. This class is open. |
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Rule Against Perpetuties
-Bright Line Rule #2 |
Many shifting executory interests violate the RAP. An executory interest with no limit on the time within it must vest violates the RAP.
Example: To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs. NOTE: Once the offensive clause is stricken this is a valid conveyance. |
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Rule Against Perpetuties
-Charity to Charity Exception |
A gift from one charity to another does not violate the RAP.
Example: To the Red Cross, so long as the premises are used for Red Cross purposes, and if they ceased to be so used, then to the YMCA. |
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RAP Reform
-"Wait and See" or "Second Look" Doctrine |
Under this majority reform effect the validity of any suspect future interest is determined on the basis of the facts as the now exist, at the end of the measuring life.
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RAP Reform
-Uniform Statutory Rule Against Perpetuities |
Codifies the common law RAP and, in addition, provides for an alternative 90 year vesting period.
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RAP Reform
-Cy Pres Doctrine |
Under the Cy Pres Doctrine, if a given disposition violates the RAP, a court may reform it in a way that mort closely matches the grantor's intent, while still complying with the RAP
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Concurrent Estates
-Three Types |
Joint Tenancy
Tenancy in Common Tenancy by the entirety |
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Concurrent Estates
-Joint Tenancy ---Definition |
2 or more own with the right of survivorship
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Concurrent Estates
-Tenancy by the entirety ---Definition |
A marital interest between married partners, with right of survivorship
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Concurrent Estates
-Tenancy in Common ---Definition |
2 or more own, with no right of survivorship
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Concurrent Estates
-Joint Tenancy ---Distinguishing Characteristics |
-Right of survivorship
-It is alienable. Not devisable or descendable. |
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Concurrent Estates
-Joint Tenancy ---Creation of a joint tenancy |
The 4 unities
(T-TIP) (1) Joint tenants must take their shares 1. By the same time 2. By the same title 3. Identical interests 4. Right to possess the whole (2) Grantor Must clearly express the right of survivorship (joint tenancies are disfavored so you have to be clear) (3) Use of a straw. -If a party owns land in fee absolute, but wishes to hold it in joint tenancy with another, he has to use a straw man. Step 1: A conveys to straw Step 2: Straw conveys back to A and B. This makes it possible to satisfy the 4 unities. |
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Concurrent Estates
-Joint Tenancy ---Severance of a joint tenancy |
SPAM: Sale, Partition and Mortgage
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Concurrent Estates
-Joint Tenancy ---Severance of a joint tenancy (SALE) |
Sale
-A joint tenant can sell or transfer her interest during her lifetime. -If joint tenant A sells to Buyer B, B becomes a tenant in common with remaining joint tenant(s). -If multiple remaining joint tenants, they remain joint tenants with respect to one another -In equity, Tenant's mere act of entering into a contract for the sale of her share will sever the joint tenancy as to the contracting party's interest. Equitable Conversion: "Equity regards as done that which ought to be done." |
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Concurrent Estates
-Joint Tenancy ---Severance of a joint tenancy (PARTITION) |
Three Variations:
-By voluntary agreement -Partition in kind: A court action for physical division of blackacre if in the best interests of all. (sprawling acreage) -Forced Sale: Court action if in best interests of all in which Blackacre is sold and the proceeds are distributed proportionally. |
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Concurrent Estates
-Joint Tenancy ---Severance of a joint tenancy (MORTGAGE) |
One tenants execution of a mortgage or a lien on his share will sever the joint tenancy as to that now encumbered share only in the minority of states that follow the title theory of mortgages.
The majority rule is the lien theory of mortgages, whereby joint tenant's execution of a mortgage on his interest will not sever the joint tenancy. |
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Concurrent Estates
-Tenancy by the entirety ---How is it created? |
Between married partners with right of survivorship.
-Arises presumptively in any conveyance to married unless state otherwise. |
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Concurrent Estates
-Tenancy by the entirety ---Protected form of ownership |
-Creditors of only one spouse can't touch this tenancy
-Neither tenant, acting alone, can defeat the right of survivorship by unilateral conveyance to 3rd party |
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Concurrent Estates
-Tenancy in common ---Features |
3 main features
-Each tenant owns an individual part and each has a right to possess the whole -Each interest is divisable, descendable and alienable. There are no survivorship rights between tenants in common. -The presumption favors: tenancy in common. |
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Concurrent Estates
-Rights and Duties of Co-tenants |
(1) Each tenant is entitled to possess the whole.
-If a co-tenant wrongfully excludes another from possession of any part, he has committed "wrongful ouster" (2) Absent ouster, a co-tenant is not due rent from the co-tenant in exclusive possession. (3) A co-tenant who leases all or part of the premises to a third party owes his co-tenants their fair share of the rental income. (4) Cannot acquire title to the exclusion of others (can't adversely possess title away w/o ouster) (5) Each tenant is entitled for his fair share of the carrying costs (taxes, mortgage interest). (6) A repairing co-tenant enjoys a right to contribution for reasonable and necessary repairs if he has told others of the need. (7) the is no right of contribution for Improvements during the life of the co-tenancy. But at sale is liable (or due a credit) for any diminution (or increase) in property value. (8) A co-tenant must not commit waste. Can bring a waste action during the life of the co-tenancy. (9) A joint tenant or tenant in common has a right to bring an action for partition (8) |
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Landlord/Tenant Law
-The four leaseholds (nonfreehold estate) |
(1) Tenancy for years (estate for years, term of years).
(2) The Periodic Tenancy (3) Tenancy at will (4) Tenancy at sufferance |
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Landlord/Tenant Law
-Tenancy for years |
Lease for a fixed period of time.
-No notice is needed to terminate -If greater than 1 year, needs to be writing. |
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Landlord/Tenant Law
-Periodic Tenancy |
Lease which continues for successive intervals until L or T give proper notice to terminate.
-Can be created expressly (month to month, year to year) -Can be created by implication. When lease does not mention duration, but provides for payment of rent at set intervals. -An oral term of years in violation of the statute of frauds creates an implied periodic tenancy measured by the way rent is tendered. -In a residential lease, if L elects to holdover a T who has wrongfully stayed on past the conclusion of his lease, an implied periodic tenancy arises. |
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Landlord/Tenant Law
-Periodic Tenancy ---How to terminate a periodic tenancy |
TESTED
Notice, usually written must be given. -At common law, at least equal to the length of the period itself, unless otherwise agreed. (Exception: year to year or longer: 6 months) -Parties may lengthen or shorten this notice period (freedom of contract) -BUT The periodic tenancy must end at the conclusion of a natural lease period. |
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Landlord/Tenant Law
-Tenancy at Will |
This is a tenancy for no fixed duration.
"To T for as long as L or T desires." -Unless parties are explicit about agreeing to a tenancy at will, court will treat this as an implied periodic tenancy. -Tenancy can be terminated at any time by either party, but reasonable demand to vacate is usually needed. |
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Landlord/Tenant Law
-Tenancy at Suffererance |
Created when T has wrongfully held over past the expiration of the lease. We give this wrongdoer a leasehold estate to permit L to collect rent
-Tenancy at sufferance last only until L either evicts T or decides to hold T to a new tenancy |
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Tenant's 3 Duties
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1) T's liability to third parties
2) T's duty to repair 3) T's duty to pay rent |
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Tenant's Duties
-T's Liability to 3rd parties |
-T is responsible for keeping the premises in reasonably good repair.
-T is liable for injuries sustained by 3rd parties T invited, even where L promised to make all repairs (T may be able to seek indemnification though) |
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Tenant's Duties
-T's duties to repair when the lease is silent |
Standard: T must maintain the premises and make ordinary repairs.
-T must not commit waste |
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Tenant's Duties
-The law of fixtures |
When a tenant removes a fixture, she commits voluntary waste.
Fixture = once movable chattel that, by virtue of its annexation to realty, objectively shows the intent to permanently improve the realty. (Heating systems, furnace, certain lighting installations, custom storm windows) T MUST NOT REMOVE FIXTURES, NO MATTER THAT SHE INSTALLED THEM. -To determine whether something is fixture: (1) agreement on point is binding; (2) T may remove a fixture that she has installed provided removal won't cause substantial harm to premises. -If removal will cause substantial harm, then in objective judgment, T has shown the intent to install a fixture. Fixture stays put! |
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Tenant's Duties
-T's duty to repair when T has expressly covenanted in the lease to maintain the property in good condition for the duration of the lease |
A common law, historically: T was liable for any loss to the property. Including loss due to force of nature.
-Modern majority view: T may terminate the lease when the premises are destroyed. |
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Tenant's Duties
-T's duty to pay rent (T is possession) |
If T breaches this duty and is in possession of the premises L has two options:
(1) Evict through the courts (still entitled to rent from the now tenant in sufferance) (2) Continue the relationship and sue for rent. L MUST NOT engage in self-help, such as changing the locks, forceably removing tenant, or removing tenant's possessions. Punishable criminally or civilly. |
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Tenant's Duties
-T's duty to pay rent (T is NOT in possession) |
If wrongfully vacates with time left on a term of years.
SIR -Surrender: If L shows by words or conduct that he wants to give up the lease. (If the unexpired term is more than 1 year, must be in writing to satisfy S.o.F.) -Ignore: Ignore the abandonment and hold T responsible for the unpaid rent, just as if T were still there (this is only an option in a minority of states) -Re-let: Re-let the premises on the wrongdoer tenants behalf, and hold him liable for any deficiency. (Majority rule is that landlord must at least try to re-let the premises b/c of mitigation principle) |
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Landlord's Duties
-Duty to deliver possession |
Majority Rule: L is required to put T is physical possession of the premises. Thus if at the start of T's lease a prior holdover is still in possession, L has breached and the new T gets damages. (English Rule)
Minority Rule: L is required to put T in legal possession. If there is a holdover, it's T's problem. |
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Landlord Duties
-Implied covenant of quiet enjoyment |
TESTED
T has a right to quiet enjoyment and use of premises without interference from L. -Applies to both residential and commercial leases Possible Breaches: -Actual wrongful eviction (or excluding T from premises) -Constructive Eviction (SING) (i) Substantial Interference due to L's actions or failures (ii) Notice: T must give L notice of the problem. L must fail to act meaningfully. (iii) Goodbye: T must vacate the premises within a reasonable time after L fails to fix problem. NOTE: Landlord is generally not liable for the acts of other tenants. -Exceptions: (1) L must not permit a nuisance on site; (2) L must control common areas. |
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Landlord Duties
-Implied warranty of habitability |
Applies only to residential leases.
-This is non-waivable Standard: The premises must be fit for basic human dwelling. Fair living needs are met. -This may be supplied by building codes or case law. (typically: no heat in winter, no plumbing, no running water) |
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Landlord Duties
-Implied warranty of habitability ---Tenant's entitlement when the implied warranty of habitability is breached |
MR3
-Move out: end the lease -Repair and Deduct: allowable by statute in a growing number of states. -Reduce Rent: or withhold all rent until the court determines fair rental value. Typically T must place withheld rent into escrow to show good faith. -Remain in possession, pay rent, and affirmatively seek money damages. |
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Landlord Duties
-Implied warranty of habitability ---Retaliatory Eviction |
If T lawfully reports L for housing code violations, L is barred from penalizing T, by, for example raising rent, ending the lease, harassing T, or taking other reprisals
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Assignment v. Sublease
-Generally |
Absent an express restriction in the lease, a tenant may freely transfer her leasehold interest, in whole or in part.
-A complete transfer of the remaining term = Assignment -If the tenant retains any part of the remaining term (other than the right to reenter upon breach) the transfer is a sublease. |
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Assignment v. Sublease
-Consequences of Assignment |
An assignee stands in the shoes of the original tenant in a direct relationship with the landlord. The assignee and the landlord are in "privity of estate" and each is liable to the other on all covenants that "run with the land"
-Covenants that run with the land: if the parties so intend and if the covenant "touches and concerns" the land. (benefits the landlord and burdens the tenant (and vice versa) with respect to their interest in the land) -Rent covenants: Because a covenant to pay rent runs with the land, the assignee owes rent directly to landlord. ---After assignment, the original tenant is no longer in privity of estate with the landlord, but remains liable on the original contractual obligation to pay rent (privity of contract). |
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Assignment v. Sublease
-Consequences of sublease |
A sublessee is not in privity with landlord: A sublessee is a tenant of the original tenant and usually pays him rent. A sublessee is not liable to the landlord for rent or any of the original covenants in the main lease unless he expressly assumes them.
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Assignment v. Sublease
-Consequences of sublease ---Landlord's remedies |
Landlord may terminate the main lease for nonpayment of rent or breach of any other covenant.
-Sublease terminates with the main lease -Some states allow a landlord who is owed rent to assert a lien on personal property on the premises (applies to sublessee's property as well). |
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Assignment v. Sublease
-Consequences of sublease ---Rights of sublessee |
A sublessee cannot enforce any covenants made by the landlord in the main lease, except a residential sublessee may be able to enforce the implied warranty of habitability against the landlord.
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Assignment v. Sublease
-Covenants against assignment or sublease |
Lease covenants restricting assignment/sublease are strictly construed against the landlord.
-Waiver: A valid covenant is considered waived if the landlord knew of the assignment and did not object. -Transfer in violation of the lease: If tenant assigns the lease in violation of a contract provision, the transfer is not void. Landlord may usually terminate the lease and sue for damages. |
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Landlord's Tort Liability
-Historical Common law rule |
Caveat Lessee: Let the tenant beware.
-In tort, L was under NO duty to make the premises safe for the tenant |
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Landlord's Tort Liability
-Exceptions to Caveat Lessee |
CLAPS
-Common Areas:L must maintain common areas (hallways/stairwells) -Latent Defects: L must warn T of hidden defects that L knows about or should know about (Duty to warn, not repair) -Assumption of Repairs: L who voluntarily makes repairs must complete them with reasonable care. -Public Use: L who leases public space (museum/convention hall) and who should now because of the nature of the defect (serious) and the length of lease (Short) that T will not repair, is liable for defects -Short Term lease of furnished dwelling: L is liable for any defect on site which harms T. |
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Easements
-Definition |
The grant of a nonpossessory property interest that entitles its holder to some form of use or enjoyment of another's land (the servient tenement).
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Easements
-Negative Easements |
A negative easement entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible.
4 recognized types (LASS) -Light -Air -Support -Stream water from an artificial flow Minority: Negative easement for scenic view. Can ONLY be created expressly by writing signed by the grantor. There is NO natural or automatic right to a negative easement. |
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Easements
-Easements appurtenant v. in gross |
Appurtenant
-2 parcels are involved. When it benefits the dominant landowner in the physical use/enjoyment of HIS land. In Gross -Only 1 parcel involved (the servient tenement). It confers the right to some personal/pecuniary advantage that is not related to the use or enjoyment of his land. |
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Easements
-Transferability |
-Easements appurtenant pass automatically with the dominant tenement, regardless of whether it is even mentioned in the conveyance
-Also passes automatically with the servient tenement UNLESS the new owner is a bona fide purchaser without notice. -Easement in gross is NOT transferable unless it is for commercial purposes. |
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Easements
-Creation of an affirmative easement |
PING
-Prescription: An easement may be acquired by satisfying the elements of adverse possession. (COAH) -Implication: Easement implied from apparent use. Must be (1) apparent; and (2) the parties expected that the use would survive division b/c it is reasonably necessary to the dominant land's use/enjoyment -Necessity: Landlocked setting. An easement of right of way will be implied by necessity if grantor conveys a portion of his land with no way out except over part of grantor's remaining land -Grant: Easement to endure for more than 1 year must be in writing that complies with formal elements of a deed (deed of easement) |
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Easements
-Termination of an Easement |
END CRAMP
-Estoppel: Servient owner changes his position in reasonable reliance on the easement holder's assurances that the easement won't be enforced. -Necessity: Easements created by necessity expire as soon as the need ends. -Destruction of the servient land, other than through the willful conduct of the servient owner ends the easement. -Condemnation of Servient estate by eminent domain ends the easement -Release in writing given by the easement holder to the servient owner. -Abandonment: Physical action demonstrating the intent to never use the easement again -Merger: when title to easement and title to the servient land become vested in the same person -Prescription: the servient owner may extinguish the easement by interfering with it in accordance with elements of adverse possession. (COAH) |
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The License
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A mere privilege to enter another's land for some delineated purpose
-Not subject to the statute of frauds -Freely revocable, at the will of the licensor, unless estoppel applies to bar revocation (licensee has invested substantial money, labor in reasonable reliance on the license's continuation). -Example: Tickets |
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The Profit
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The profit entitles its holder to enter the servient land and take from it the soil, or some substance of the soil (mineral timber oil).
-The profit shares all the rules of easements. |
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The Covenant
-Definition |
The covenant is a promise to do or not do something related to land. It is unlike the easement because it is not the grant of a property interest, but rather a contract regarding land.
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Covenants
-Affirmative v. Restrictive |
Restrictive: Promise to not do something related land (I promise not to build for commercial purposes)
Affirmative: Promise to do something related to land (I promise to paint the common fence) |
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Covenants
-Covenants v. Equitable Servitudes |
How do you know if something is a covenant or an equitable servitude?
-On the basis of remedy: If plaintiff is seeking money damages construe as a covenant. If injunction, equitable servitude. |
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Covenants
-When can a covenant be binding on successors? (when can it run with the land?) |
Two questions must be resolved:
(1) Does the BURDEN of A's promise to B run from A to A1. -WITHN Writing: Original promise in writing Intent: Original parties intended promise to run with land Touch and Concern Land: promise must affect the parties's legal relations as landowners Horizontal and Vertical privity: Horizontal = nexus between original parties (A&B) was grantor-grantee, landlord-tenant, mortgagor-mortgagee. Vertical = Nexus between A and A1. Non-hostile nexus such as contract, devise, descent. Not adverse possession. Notice: A1 had notice when she took. (2) Does the benefit of the promise run from B to B1? WITV Writing: Promise between A&B is in writing Intent: A&B intended promise to run Touch/Concern: Promise affects parties as landowners Vertical Privity: Non-hostile nexus between B and B1. Horizontal privity is NOT required. |
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Equitable Servitudes
-Definition |
The equitable servitude is a promise that equity will enforce against against successors. Accompanied by injunctive relief.
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Equitable Servitudes
-To create an equitable servitude that will bind successors |
WITNES
Writing: Original promise was in writing Intent: Parties must have intended that promise would bind successors Touch and Concern: Promise affects parties as landowners Notice: Successors of the burdened land had notice. PRIVITY IS NOT REQUIRED |
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Equitable Servitudes
-Implied Equitable Servitude |
The general or common scheme doctrine (usually dealing with a large lot being sold into subdivisions)
Two Elements (1) When the sales began the subdivider (A) had a general scheme of residential development which included B's lot (2) B had notice of this scheme that was embodied in the other sold deeds. -3 forms of notice (AIR): (i) Actual notice (ii) Inquiry notice - The lay of the land (iii) Record Notice - information in publicly recorded documents is imputed. |
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Equitable Servitudes
-Equitable defenses |
Changed Conditions
-The changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the entire area has changed. |
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Adverse Possession
-Elements |
Possession for a statutorily prescribed period of time can ripen into title.
Elements COAH: Continuous: Uninterrupted for the statutory period (15 years in VA) Open and notorious: The sort of possession the usual owner would make under the circumstances Actual: The entry must be literal Hostile: The possessor must not have the owner's consent to be there. Possessor's subjective state is NOT relevant |
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Adverse Possession
-Tacking |
One adverse possessor may tack on to his time with the land his predecessor's time, so long as there is privity which is satisfied by any nonhostile nexus.
-Tacking is not allowed when there has been ouster. |
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Adverse Possession
-Disabilities |
The statute of limitations will not run against a true owner who is afflicted by a disability (insanity, infancy, imprisonment) at the start of the adverse possession.
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Land Conveyances
-2 step process |
Every conveyance of real estate consists of a two step process
1. The land contract, which endures until step 2 2. The closing, where the deed becomes the operative document |
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Land Conveyances
-Step 1: The land contract and the S.o.F. |
-S.o.F.: Must be in writing and signed by the party that is being bound (the defendant). Must describe the land and state some consideration.
-When the amount of land recited in the contract is more than the actual size of the parcel: Specific performance with a pro rata reduction in price. -1 Exception to S.o.F.: PART PERFORMANCE. 2 of the following 3 and the doctrine is satisfied excusing the lack of a written instrument: (i) B takes possession; (ii) B pays all or part of the price; (iii) B makes substantial performance. |
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Land Conveyances
-The land contract and Risk of loss |
Doctrine of equitable conversion: Equity regards as done that which ought to be done.
-Once contract is signed, purchaser owns the land. -If in the interim between contract and closing, Blackacre is destroyed through no fault of either party, B bears the risk of loss unless K says otherwise. |
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Land Conveyances
-2 implied promises in every land contract |
1. Seller promises to provide marketable title at the closing.
-Marketable = title free from reasonable doubt. Free from lawsuit and threat of litigation. -3 circumstances render title unmarketable (i) Adverse possession: If part of the title rests on adverse possession, it is unmarketable (ii) Encumbrances: Must be unencumbered fee simple. Servitudes/mortgages render title unmarketable unless buyer has waived them. (iii) Zoning violations: if blackacre violates a zoning regulation (2) Seller promises not to make any false statements of material fact -Majority rule is that material omissions are no good either. Seller is liable for failing to disclose latent material defects. |
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Land Conveyances
-The Closing ---Lawful execution of the deed |
LEAD
Lawful execution and delivery -Lawful execution Standard: Must be in writing signed by the grantor. -The deed must have an unambiguous description of the land |
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Land Conveyances
-The Closing ---Delivery |
LEAD
Lawful execution and delivery Delivery (i) manual tranfers of the deed (mail, agent, or messenger) (ii) Test: Did the grantor have the present intent to be bound irrespective of whether the deed was handed over. (iii) Rejection of deed defeats delivery (iv) If deed is transferred with an oral condition, condition drops out and delivery is completed. (v) Delivery by escrow is ok. |
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Three Types of Deed
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(1) The quitclaim: No covenants, not even promising that he has title to convey. (Except for implicit promise to provide marketable title at closing, but any problems post closing are buyer's problem)
(2) General warranty deed: warrants against all defects in title, including those due to grantor's predecessors (3) Statutory special warranty deed: Provided for by statute in many states. 2 promises made only on behalf of grantor: (i) Promise that grantor has not conveyed blackacre to another; (ii) Blackacre is free from encumbrances made by the grantor. |
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General Warranty Deed
-6 Covenants |
(1) Covenant of Seisin: Grantor promises he owns the estate
(2) Covenant of right to convey: Grantor has the power to make this transfer (no temporary restraints on alienation) (3) Covenant against encumbrances: There are no servitudes or liens on Blackacre. (4) Covenant for quiet enjoyment: Grantee won't be disturbed in possession by a third party's lawful claim of title (5) Covenant of Warranty: Grantor promises to defend grantee against lawful title claims brought by others. (6) Grantor will do whatever is needed in the future to perfect title. |
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The Recording System
-2 bright line rules |
The Model:
O conveys Blackacre to A. Later, O conveys Blackacre to B. O skips town. Who gets Blackacre: A or B? 2 Bright line rules: (1) If B is a bona fide purchaser, and we are in a notice jurisdiction, B wins, regardless of whether or not she records before A does. (2) If B is a bona fide purchaser and we are in a race-notice jurisdiction, B wins if she properly records before A does. |
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The Recording System
-Bona Fide Purchaser |
A bona fide purchaser is one who (1) purchases Blackacre for value and (2) does not have notice that someone else got there first.
-Doesn't matter if they got a good deal. If they purchased for substantial pecuniary consideration, it's fine. -If B is an heir or donee or devisee he loses if it is a recording statute question. |
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The Recording System
-Bona Fide Purchaser ---Notice |
AIR
Actual Inquiry: Not recognized in VA. Buyer has duty to inspect premises and is charged with knowing whatever an inspection of the premises would yield. Record: B is on record notice of A's deed if at the time B takes, A's deed was recorded properly. |
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The Recording System
-The Notice Statute |
"A conveyance of an interest in land shall not be valid against any subsequent purchaser for value without notice thereof, whose conveyance is first recorded."
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The Recording System
-The Race Notice Statute |
"Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance in first recorded."
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The Recording System
-Record Notice |
A subsequent pruchaser will be held to have record notice only if the deed in question is recorded "in the chain of title," which means that it is recorded in a manner that a searcher could reasonably find it.
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The Recording System
-The Shelter Rule |
One who takes as a BFP will prevail against any entity that the transferor/BFP would have prevailed against. The transferee takes shelter in the status of her transferor, even if she fails to satisfy the requirements of BFP status herself.
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The Recording System
-The Wild Deed Problem |
O sells Blackacre to A, who does not record. Then A sells Blackacre to B. B records the A to B deed.
-The A to B deed is a "wild deed" because it's not connected to the chain of title. The RULE: The wild deed is incapable of giving record notice to anyone! The recording is a nullity. |
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The Recording System
-Estoppel by deed |
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he later acquires the previously transferred interest.
-NOTE: A party who is duped into purchasing realty from a party with not title cannot validly record. The recording is a nullity. |
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Mortgages
-How does one create a mortgage |
Mortgage is the conveyance of an interest in land as collateral for the repayment of a debt.
Union of two elements: (1) A debt (2) A voluntary lien in debtor's land to secure the debt. |
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Mortgages
-Mortgages and the S.o.F. |
The mortgage typically must be in writing to satisfy the statute of frauds.
This is the legal mortgage. -A legal mortgage is evidenced by a writing or a "sale lease-back" or "deed of trust" or "note" |
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Mortgages
-The equitable mortgage |
If the debtor gives the creditor the deed that is absolute on its face, but both parties understand that this is intended to be collateral, an equitable mortgage is effected.
-As between debtor and creditor parol evidence is freely admissible. -If Creditor sells the property to a third party, the third party owns the land. Debtor can merely sue for fraud and the sale proceeds. |
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Mortgages
-Once there is a mortgage, what are the parties rights? |
Mortgagor: unless and until foreclosure, debtor-mortgagor has title and the right to possess.
Mortgagee: Creditor-mortgagee has a lien. |
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Mortgages
-Transfers |
All parties to a mortgage can transfer their interests
Creditor can transfer his interest by: (i) Endorsing the the note and delivering it to transferee; or (ii) Executing a separate document of assignment. If the note is indorsed and delivered, the transferee is eligible to become: a holder in due course. This means that he takes the note free of any personal defenses that could have been raised against the original creditor. |
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Mortgages
-Transfers and Personal defenses |
A holder in due course takes free of any personal defenses, which include:
(i) Lack of consideration (ii) fraud in the inducement (iii) Unconscionability (iv) Waiver (v) Estoppel |
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Mortgages
-Transfers and real defenses |
A holder in due course is still subject to "real" defenses: MAD FIFI(4)
(i) Material Alteration (ii) Duress (iii) Fraud in the factum (iv) incapacity (v) illegality (vi) infancy (vii) Insolvency |
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Mortgages
-Holder in due course status |
To be a holder in due course of the note, the following criteria must be met:
(1) the note must be negotiable, made payable to the named mortgagee; (2) The original note must indorsed, signed by the named mortgagee; (3) The original note must be delivered to the transferee (photocopy is unacceptable); (4) The transferee must take the note in good faith without notice of any irregularity; AND (5) the transferee must pay value for the note, meaning some amount that is more than nominal |
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Mortgages
-Who is personally liable on the debt if the debtor sells the land? |
If Buyer has assumed the mortgage:
-Both debtor-seller and buyer are personally liable. Buyer is primarily liable and debtor-seller is secondarily liable. If Buyer takes "subject to the mortgage" -Buyer assumes no personal liability. Only O is personally liable. -BUT if recorded, the mortgage sticks with the land. If O doesn't pay, the mortgage can be foreclosed |
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Mortgages
-Foreclosure |
A mortgagee must foreclose by proper judicial action. At foreclosure, the land is sold and sale proceeds go to satisfy the debt.
-If the sale proceeds are not enough to satisfy the debt, mortgagee may bring a deficiency action against the debtor. -If the sale yields a surplus, junior liens are paid due to priority with remaining surplus to the debtor. NOTE: Attorney's fees, expenses of foreclosure, and any accrued interest on the superior mortgage comes off the top. |
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Mortgages
-Effect of foreclosure on various interests |
Foreclosure will terminate interests junior to the mortgage being foreclosed but will not affect senior interests. (Once a superior claim has been foreclosed on, junior lien holders cannot look to Blackacre for satisfaction).
-Foreclosure does not effect senior interests. A buyer at a foreclosure sale takes the land subject to that interest. If the debt is not paid, senior creditor can foreclose |
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Mortgages
-Priorities |
-As a creditor you must record! Until you record your mortgage properly, you have no priority.
-Once recorded, priority is determined by the norm of first in time, first in right. -Purchase Money Mortgage: A lender that has a mortgage in a debt used to purchase the land securing the debt has a super-priority. A purchase money mortgagee has priority over those holding an interest through an after-acquired collateral clause. -Subordination agreement are permissible. |
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Mortgages
-Redemption |
Equitable redemption is universally recognized up to the date of sale.
-Once a valid foreclosure sale has taken place, the right to equitable redemption is gone -In order to exercise this right, debtor must pay missed payments, interest and costs. If there is an acceleration clause, must pay off total amount due. -Right to redeem is not waivable. This is called "clogging the equity of redemption" |
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Mortgages
-Statutory redemption |
Recognized in half of states.
-Gives the debtor-mortgagor a statutory right to redeem for some period after the foreclosure sale (typically 6 months/year). -NOT IN VIRGINIA -The amount to be paid in typically the foreclosure sale price, rather than the amount of the original debt. -In most state, mortgagor will have the right to possess Blackacre during the statutory period. -When a mortgagor redeems the effect is to nullify the foreclosure sale. |
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Lateral Support
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If land is improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, the excavator will be liable only if negligent.
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Water rights
-The Riparian Doctrine |
The water belongs to those who own the land bordering the watercourse.
-These people are known as riparians and they share the right to reasonable use of the water. -One riparian will be liable if his use unreasonably interferes with other's uses. |
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Water Rights
-The Prior Appropriation Doctrine |
Water belongs initially to the state, but the rights to divert it and use it can be acquired by an individual regardless of whether or not he happens to be a riparian owner.
-Rights are determined by priority of beneficial use: First in time, first in right. -Any productive or beneficial use of the water is sufficient to create the appropriation right (e.g. agriculture). |
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Water Rights
-Groundwater |
Groundwater = water beneath the surface that in not confined to a known channel
-Surface owner is entitled to make reasonable use of ground water, but use may NOT be wasteful |
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Water Rights
-Surface Waters |
Those which come from rain, springs or melting snow, and which have no yet reached a natural watercourse or basin.
The Common Enemy rule: A landowner may change drainage or make any other changes/improvements on his land to combat the flow of surface water. Many courts have modified the common enemy rule to prohibit unnecessary harm to others' land. |
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Possessor's Rights
-Trespass |
The possessor of land has the right to be free from trespass.
Trespass = invasion of land by physical object. -To remove trespasser, bring an ejectment action |
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Possessor's Rights
-Private Nuisance |
A possessor of land has the right be free from nuisance.
Nuisance = The substantial and unreasonable interference with the use and enjoyment of land. -No physical trespass required: odors/noise are enough. -NOTE: A hypersensitive plaintiff is out of luck. |
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Eminent Domain
-Definition |
Government's 5th Amendment power to take private property for public use in exchange for just compensation.
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Eminent Domain
-Explicit v. Implicit/Regulatory Takings |
Explicit: Acts of governmental condemnation.
Implicit: A governmental regulation that, although not intended to be a taking, has the same effect. -Remedy: government must either: Compensate the owner OR terminate the regulation and pay owner for damages that occurred while it was in effect. |
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Zoning
-Definition |
Pursuant to police powers, government may enact statutes to reasonably control land use.
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Zoning
-Variance |
The party asking for the variance must show (1) undue hardship and (2) variance will not decrease neighboring property values.
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Zoning
-Nonconforming Use |
A once lawful, existing use now deemed nonconforming by a new zoning ordinance. It cannot be eliminated all at once unless just compensation is paid. Otherwise might be a unconstitutional taking.
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Zoning
-Unconstitutional Exactions |
Defined: Exaction are those amenities government seeks in exchange for granting permission to build.
In order to pass constitutional scrutiny the exactions must be reasonably related in nature and scope to impact of the proposed development. |
