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158 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Present Interests in Property
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Fee Simple Absolute
Fee Tail Defeasable Fees Life Estates |
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Fee Simple Absolute
+ the Sinead O'Conner Rule |
(“To A” or “To A and his heirs”).
a. Distinguishing Characteristics: Absolute ownership of potentially infinite duration. Divisable (will), descendible (intestacy) and alienable. b. Future Interests: NONE. i. Sinead O’ Connor Rule: A living person has no heirs |
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Fee Tail
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(“To A and the heirs of his body”)
a. Distinguishing Characteristics: Virtually abolished in the US. Historically would pass to grantees lineal blood descendants. Today creates a fee simple absolute. |
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Defeasible Fees (kinds)
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Fee Simple Determinable
Fee Simple Subject to Condition Subsequent Fee Simple Subject to Executory Limitations |
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Fee Simple Determinable
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(“To A for so long as...” “To A during...” “To A until”).
Terminates upon the stated event and reverts automatically to the grantor. Termed a possibility of reverter. Key words: while, during, until, so long as. It is devisable, descendable and alienable (this applies to all defeasible fees)! Must be created by using clear durational language. |
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Fee Simple Subject to Condition Subsequent
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(“To A, but if X event occurs, grantor reserves the right to reenter and retake”).
i. How to Create: Grantor must use clear durational language and must carve out the right to reenter. Terminates upon the stated event if the grantor so elects (it is not automatic). The grantor's right is termed a right of reentry. Key words: on the condition that, provided that, but if. |
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Fee Simple Subject to Executory Limitations
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(“To A, but if X event occurs, then to B.”)
i. Distinguishing Characteristics: Just like a Fee Simple Determinable BUT if the condition is broken, the estate is automatically forfeited in favor of someone other than the grantor. SUBJECT TO THE RAP |
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Rules of Construction
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i. Words of mere hope, desire, or intention are INSUFFICIENT to create a defeasible b/c courts disfavor restrictions – so clear durational language MUST be used
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Absolute restraints on alienation (rule & result)
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No absolute bans on the power to sell or transfer that are not linked to any reasonable time limited purpose.
- Creates a fee simple absolute and the grantor has nothing. |
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The Life Estate
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An estate that MUST be measured in explicit life-time terms, and NEVER in years
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Pur Autre Vie
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a life estate measured by the life of someone other than the grantee
(“To A for the life of B,” “to Madonna for life” → sells to DL) |
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Furture Interests flowing from a Life Estate.
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iii. FI: in grantor reversion; in 3d party remainder
**Alienable inter vivos |
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Life Tenants Rights and Responsibilities.
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Rights: Right to transfer or lease, right to profits, right to normal ues.
Duties: to pay taxes and interest, to make normal repairs and maintenance, and avoid waste. ** Remaindermen must pay the principal on the mortgage and make extraordinary repairs. |
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Types of Waste
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Voluntary / Affirmative
Permissive Waste Ameliorative Waste. |
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Voluntary / Affirmative Waste
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actual, overt conduct that trashes the land; willful acts of destructiveness.
i. Natural Resources: LT cannot consume/exploit the natural resources on the land unless PURGE: 1. PU: prior use if land was used for exploitation before grant, can continue a. Open Mines Doctrine: if mining was done before grant, can continue but limited to mines already open 2. Reasonable Repairs: enable LT to consume natural resources to make reasonable repairs. 3. G: grant; LT expressly granted right to exploit 4. E: exploitation land is only useful for exploitation |
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Permissive Waste or Neglect
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occurs when land is allowed to fall into disrepair OR the LT fails to reasonably protect the land
i. Obligation to Repair: must simply maintain the premises in reasonably good repair. Maintenance is the benchmark. ii. Obligation to Pay Taxes: must pay all ordinary taxes on land, to the extent of income or profit from land. If none, LT must pay all ordinary taxes to the extent of the premises’ fair rental value. iii. Mortgage payments: LT pays the interest and the holder of the FI pays the principal. |
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Ameliorative Waste
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no acts that enhance the property’s value, unless all of the future interest holders are known and consent
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Future Interests in the Grantor
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a. Possibility of Reverter: only after the fee simple determinable
b. Right of Entry: only after the fee simple subject to condition subsequent c. Reversion: arises when grantor conveys an estate of lesser duration that he stated with, other than a FSD or a FSSCS. i. Left-over is the reversion. |
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Future Interests in Transferees
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Remainder: Vested or Contingent.
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Remainders (general definition)
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A future interest which becomes possessory upon the inevitable or natural termination of another estate of a prior grantee. Always created in the same instrument.
Always follows an estate of known, fixed duration (e.g., life estate or term of years). |
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Vested Remainder (general definition)
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if it is BOTH created in an ascertained person AND is not subject to a condition precedent. Three Types
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Indefeasibly Vested Remainder
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The holder is certain to acquire an estate in the future w/ no conditions attached.
1. Example → “To A for life, remainder to B.” A is alive. B is alive. A = life estate; B = indefeasibly vested remainder. 2. What if B Predeceases A? Passes by B’s will or intestate. |
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Vested Remainder Subject to Complete Defeasance / Total Divestment
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right to possession could be cut short b/c of a condition subsequent
a. Comma Rule: conditional language follows the language that, taken alone and set off by commas, creates a vested remainder condition subsequent. b. E.g., To A for life, remainder to B, if B lives until 25, otherwise to C. i. B has a vested remainder subject to complete defeasance; if he is under 25 when A dies, B takes. If B dies before he is 25, B’s heirs get nothing and C takes. If not C, then O has a reversion. |
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Vested Remainder Subject to Open
+ Womb Rule |
remainder vested in a group of takers, one of who is qualified to take possession, and each member’s share is subject to diminution until the class is closed.
a. Closed: determined when the class members can demand possession OR, if it is someone’s kids, when that person dies (and therefore can’t have more kids) i. Exception: the womb rule: a child of someone in the womb can take when the preceding estate ends. |
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Contingent Remainder
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created in an unascertained person OR is subject to a condition precedent.
i. Unascertained Person Examples → 1. “To A for life, then to B’s first child.” A is alive. B has no children yet. 2. “To A for life, then to B’s heirs.” A is alive. B is alive → A living person has no heirs. IOW while B is alive his heirs are unknown. 3. “To A for life, then to those children of B who survive A.” A is still alive. |
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Condition Precedent Definition:
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it appears b/4 the language creating the remainder. It is a PREREQUISITE.
1. Examples → a. “To A for life, then, if B graduates from college, to B.” A is alive. B is now in high school. i. Future Interest: O has a reversion. 1. BUT NOTE → If B graduates from college during A’s lifetime B’s contingent remainder becomes an indefeasibly vested remainder. |
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Destructibility of Contingent Remainders
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1. Historically: A Contingent Remainder was destroyed if it was still contingent at the time the preceding estate ended so O’s heirs would take in fee simple.
2. Today: The rule is abolished. So O or O’s heirs will hold the estate subject to B’s springing executory interest. Once the prerequisite is satisfied, B takes. |
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The Rule in Shelly's Case.
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Applies, “To A for life, then, on A’s death to A’s heirs.” A is alive.
Arises when the grantee receives a life estate and the grantee's heirs recieve a remainder. Heirs remainder is struck and the grantee gets both interests. Merger of the grantee's interest resuls in a fee simple. Does not apply if there is an intervening life estate. And this is NOT rule of construction so it will apply even in the face of contrary intent. |
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Doctrine of Wortier Title.
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Applies when O who is alive, tries to create a future interest in his heirs. (“To A for life, then to O’s heirs.”).
Prohibits remainders in the grantor's heirs with inter-vivos transfers. Transforms remainders into reversions for the grantor. DOES NOT APPLY TO WILLS. Modernly merely a rule of ocnstruction. Policy - to promote the free transfer of land. |
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Executory Interest
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A future interest in a transferee (third party), 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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Rule Against Perpetuities
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Voids a future intrest if there is any possiblility that the interest will vest more than 21 years after some life in being at the time of the creation of the interest.
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RAP Applies to
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Contingent Remainders, Executory Intersts, and certain Vested Remainders Subject to open.
NEVER APPLIES TO FUTURE INTERESTS CREATED IN THE GRANTOR. |
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Method for applying the RAP
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Step 1: Determine which future interests have been created.
b. Step 2: Identify the conditions precedent to the vesting of the suspect future interest. i. Key Question: What has to happen b/4 a future interest holder can take? c. Step 3: Find a measuring life → A person alive at the date of the conveyance, and whose life or death is relevant to the condition’s occurrence d. Step 4: i. Key Question → (ask) Will we know w/ certainty, w/in 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take? 1. If so → conveyance is good. 2. If not → violates the RAP. |
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RAP: Two Brightline Rules
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a. A gift to an open class that is conditioned on the members surviving beyond 21 VIOLATES the common law RAP. (“Bad as one, bad to all.”)
i. Rule: to be valid it must be shown that the condition precedent to every class member’s taking will occur w/in the perpetuities period, otherwise the entire class gift is VOID. ii. Example → “To A for life, then to such of A’s children as to live to attain the age of 30.” A has two children B and C. B is 35 and C is 40. A is alive, so the class is still open! 1. Result: B and C’s vested remainders subject to open are VOIDED. b. Many shifting executory interests violate the RAP. An executory interest w/ no limit on the time w/in which it must vest VIOLATES the RAP. i. 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.” 1. GRAMMATICAL DIFFERENCES / BEWARE! → “To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs.” Now once the offensive future interest (“to B and his heirs”) is stricken the conveyance is no longer grammatically sound. Therefore the entire conditional clause is stricken. |
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Charity to Charity Exception
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Charity-to-Charity Exception: A gift from one charity to another will not violate the RAP.
1. Example → “To the American Red Cross so long as the premises are used for Red Cross purposes, and if they cease to be so used then to the YMCA. a. ARC = a fee simple determinable b. YMCA = valid shifting executory interest. |
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Reformation of the RAP: Wait and See or Second Look Doctrine.
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The validity of any suspect future interest is determined on the basis of the facts as they now exist at the conclusion of our measuring life.
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Reformation of the RAP: Uniform Rule Against Perpetuities
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b. Uniform Statutory Rule Against Perpetuities: Codifies the common law RAP and, in addition, provides for an alternative 90 year vesting period. So it takes a wait and see approach in determmining whether an interest actually vests w/in 90 years.
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Both Reformations Embrace...
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i. The Cy Pres Doctrine: If a given disposition violates the rule a court may reform it in a way that most closely matches the grantor’s intent.
ii. The reduction of any offensive age contingency to 21 years: So any offending age requirement is reduced to 21 years – so it complies w/ RAP. |
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Concurrent Estates
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Joint Tenancy
Tenancy in Common Tenancy by the Entirety |
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Joint Tenancy (Key Characteristics & Creation)
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2 or more own with the right of survivorship
i. A JT’s interest is alienable, but it is NOT devisable or descendible ii. Creation: 1. The 4 Unities: T-TIP JTs must take their interests a. T: at the same Time; T: by the same Title; with Identical, equal interests; and P: with identical rights to Possess the whole. i. Creation with a Straw: grantor sells to a straw, who sells back to the grantor as a JT with another so that the unities are met. 2. Grantor must clearly express the right of survivorship |
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Joint Tenancy - Severance
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(SPAM)
Sale Partition (And) Mortgage |
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Sale (JT)
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1. Sale: a JT can transfer or sell during his lifetime, even secretly
a. Effect: severs the JT WRT the seller’s interest and the buyer is a T in C with the remaining JTs. b. Entering into a K for sale is sufficient to sever the JT as to the K-ing party b/c of equitable conversion |
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Partition (JT)
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2. Partition: three variations
a. Voluntary Agreement b. Partition in Kind: a judicial action for physical division c. Forced Sale: a judicial action in which land is sold, if in all the parties’ best interests, and proceeds are divided up proportionately. |
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Mortgage (JT)
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3. Mortgage:
a. Minority Title Theory of Mortgages: execution of a mortgage or lien will sever the JT as to the now encumbered share b. Majority Lien Theory: execution of a mortgage will NOT sever the JT |
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Tenancy in Common (Definition and Features)
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2 or more own w/no right of survivorship
i. Features: 1. Each co-T owns an individual part, and each has a right to possess the whole 2. Each interest is descendible, devisable, and alienable. There are no survivorship rights. 3. The presumption favors the T in C. |
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Tenancy in Common
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2 or more own w/no right of survivorship
i. Features: 1. Each co-T owns an individual part, and each has a right to possess the whole 2. Each interest is descendible, devisable, and alienable. There are no survivorship rights. 3. The presumption favors the T in C. |
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Rights and Duties of Co-Tenants (7)
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Possession
Rent Carrying Costs Repairs Improvements Waste Partition |
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Possession / Ouster (definition)
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if one co-T wrongfully excludes another co-T from possession of the whole or any part, he has committed wrongful ouster.
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Rent (from co T /From 3d p.)
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2. Rent from Co-T in Exclusive Possession: absent ouster, a co-T in exclusive possession is not liable to the others for rent
3. Rent from 3d Parties: a co-T who leases all or part of the premises to a 3d party must account to his co-Ts. |
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Carrying Costs (general definition / concept)
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5. Carrying Costs: each co-T is responsible for his fair share (such as taxes or mortgage interest payments) based upon the undivided share that he holds.
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Repairs
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6. Repairs: a repairing co-T enjoys a right to contribution for reasonable and necessary repairs, provided that he has notified the other co-Ts of the need for repairs.
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Improvements
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7. Improvements: during the life of the co-T, there is no right to contribution for “improvements.”
a. At partition: i. Improving co-T is entitled to a credit equal to any increase in value caused by her efforts 1. OR, bears the full responsibility for any decrease in value caused by her efforts |
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Waste
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8. Waste: no co-T may commit waste of any kind, and another co-T can bring an action for waste during the life of the co-T.
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Partition
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9. Partition: by Voluntary Agreement, Partition in Kind, or a Forced Sale.
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Adverse Possession
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4. Adverse Possession: Unless he has ousted the other co-Ts, a co-T in exclusive possession for the statutory adverse period cannot acquire title to the exclusion of the others.
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Tenancy by the Entirety
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a protected marital interest b/t H and W with the right of survivorship
i. In states recognizing this: arises presumptively in any conveyance to H & W, unless clearly stated otherwise. ii. Can’t be touched by creditors of only one spouse iii. Unilateral conveyance cannot defeat the right of survivorship; the 3d party gets nothing. |
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Landlord Tenant Law
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Tenancy for Years
Periodic Tenancy Tenancy at Will Tenancy at Suffrance Tenants Duties Landlord's Duties |
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Tenancy for Years
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A lease for a fixed duration of time.
i. KEY: when you know the termination date from the start ii. No need for termination notice. iii. S/F: term of longer than 1 year must be in writing |
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Periodic Tenancy
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Lease that continues for successive or continuous intervals, until proper notice of termination is given by L or T.
i. Can be created expressly ii. Can be created by implication: 1. Land leased w/no mention of duration, but provision is made for payment of rent at set intervals. 2. Oral term of years that violates the S/F; period measured by the way rent is tendered. 3. Holdover: in a residential lease, if L elects to holdover a T who has wrongfully stayed on past the conclusion of the original lease; measure period by the way rent is now tendered. |
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Periodic Tenancy - Termination
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iii. Termination: notice, usually written, is required
1. Notice must be given within an amount of time that is at least equal to the length of the period itself, unless otherwise agreed a. Exception: if period is year-to-year or more: only 6 months. b. Time can be shortened or extended by K. 2. Must end at the conclusion of a natural lease period. |
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Tenancy at Will
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A tenancy for no fixed period of duration
i. Unless otherwise expressly agreed, payment of regular rent causes a court to treat it as an implied periodic tenancy ii. Termination: at any time by either party. Should make a reasonable demand to vacate. |
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Tenancy at Sufferance
( + LL options) |
created when T has wrongfully held over.
i. Lasts until L either evicts or elects to hold T over to a new term. |
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Tenant’s Duties (3)
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To 3rd Parties
To Repair To Pay Rent |
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To 3rd Parties
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i. To 3d Parties: must keep the premises in reasonably good repair
1. T liable for injuries sustained by 3d parties T invited, even if L has expressly promised to make all repairs, though then, T can get indemnification from L. |
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Tenant's Duty to Repair
Duty not to commit waste Duty to maintain the premsis |
ii. To Repair: T must maintain the premises and make ordinary repairs. T must not commit waste (voluntary, permissive, or ameliorative).
1. Waste: goes w/fixtures, as removal is a form of voluntary waste; fixtures pass with ownership of land. a. Fixture: was once movable chattel that, by virtue of its annexation to the realty, objectively shows the intent to permanently improve the realty. b. Fixture determination: i. Express agreement controls OR, if no agreement, ii. T may remove a chattel she has installed as long as removal doesn’t cause substantial harm to the premises. If removal will cause such damage, then in objective terms, T has shown intent to install a fixture and thus, it must stay. 2. T’s Express Covenant to Maintain property in good condition: a. Historically: T responsible for all losses, including those caused by force of nature. b. NOW, majority: T may terminate lease if premises are destroyed w/o T’s fault. |
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Tenant's Duties - To Pay Rent (two situations)
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iii. To Pay Rent:
1. If T breaches and is in possession, L can evict thru the courts or continue the relationship and sue for rent due. If evict, L still entitled to rent from T until T, who is now at sufferance, vacates. a. NO self-help: no changing locks or forcibly removing T or his possessions. b. BUT, other covenants in the lease are independent of e/o, meaning that if one party breaches, the other can collect damages, but each must still perform (and pay rent). c. Covenant to pay rent runs with the land 2. If T breaches and is out of possession: SIR a. Surrender (a desire to leave the leasehold): L can treat T’s abandonment as an implicit offer to surrender, which L accepts. i. If unexpired term more than 1 year, surrender must be in writing b/c of the S/F b. Ignore: the abandonment and hold T liable for unpaid rent BUT, only ok in minority b/c of re-let option. c. Re-let: the premises on the wrongdoer T’s behalf and hold T liable for any deficiency i. Majority: L must try to re-let. |
2 situations
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Landlord's Duties (6)
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Duty to Deliver Possession
Implied Covenant of Quiet Enjoyment Implied Warranty of Habitability Retalitory Eviction Assignment LL tort Liability |
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Duty to Deliver Possession
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i. Duty to Deliver Possession:
1. Majority/English Rule L must put T in actual physical possession. If have holdover, L is in breach and new T is entitled to damages. 2. Minority/American Rule L must provide legal possession only |
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Implied Covenant of Quite Enjoyment:
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residential and commercial leases
1. Breach by actual wrongful eviction/exclusion 2. Breach by constructive eviction: SING a. Substantial Interference: attributable to L’s acts or failure to act b. Notice: from T to L, w/no meaningful response c. Goodbye: T must vacate w/in a reasonable time after L fails to fix the problem. 3. Breach by acts of other Ts? generally, no BUT a. L has a duty not to permit a nuisance on the premises b. L must control common areas |
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Implied Warranty of Habitability
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ONLY for residential leases and NON-waivable.
1. Standard: premises must be fit for basic human habitation; bear living requirements must be met. a. Appropriate standard may come from local housing code or independent judicial conclusion 2. T’s entitlement when L breaches: MR(3): Move, Repair, Reduce, Remain a. Move and terminate lease b. Repair and deduct cost of repair from rent c. Reduce rent, or w/hold rent and place it in escrow until court determines fair rental value. d. Remain in possession, pay rent, and affirmatively seek $ damages. |
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Retaliatory Eviction
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if T lawfully reports L for housing code violation L is barred from penalizing T by raising rent, evicting T, etc.
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Assignment & Sublease
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v. Assignment (get all of T’s remaining interest) and Sublease:
1. Prohibitions in original lease: ok to require L’s prior written approval BUT, once L consents to transfer by 1 T, L waives the right to object to future transfers by that T, unless L expressly reserves the right. 2. Assignment: a. L and T2 are in privity of estate and liable to e/o for all covenants that run with the land. (E.g., pay rent, repair, etc.) b. L and T2 NOT in privity of K, unless T2 expressly assumed performance of all promises in the original lease. c. L and T1: NOT in privity of estate, but in privity of K so L and T1 secondarily liable to e/o 3. Sublease: a. L and SL are in neither privity of K nor estate. Responsibility flows from T1 to T2 and vice versa. |
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LL Tort Liability
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vi. LL Tort Liability:
1. Caveat Lessee: let T beware; in tort, L has no duty to make the premises safe 2. Exceptions: CLAPS a. Common areas: must be maintained by L b. Latent defects rule: L must warn of hidden defects of which L has knowledge or reason to know; NOT a duty to repair. c. Assumption of repairs: must complete with reasonable care d. Public use rule: L who leases public space and should know, b/c of the nature of the defect and the length of the lease, that T won’t repair, is liable for any defects on the premises. e. Short term lease of furnished dwellings: L responsible for any defect that harms T. |
CLAPS
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Servitudes: Easements (general definition)
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a. Easements: the grant of a non-possessory property interest that entitles its holder to some form of use or enjoyment of another’s land, called the serveint tenement.
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Easements - Affirmative v. Negative
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i. Affirmative v. Negative
1. Affirmative: give you the right to go onto and do something on the serveint land 2. Negative: entitles its holder to prevent the serveint landowner from doing something that would otherwise be permissible. Recognized in LASS: a. Prevent someone from blocking access to Light, Air, Support, Stream water from artificial flow (and in CA: scenic view obstructions). b. Can ONLY be created expressly, in writing, and signed by grantor. |
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Easements - Appurtenant or In Gross
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ii. Appurtenant or In Gross:
1. Appurtenant: benefits the holder in the physical use or enjoyment of his property. a. Involves 2 parcels: the dominant (benefit deriving) and serveint (bears the burden) tenements 2. In Gross: confers upon its holder only some personal or pecuniary advantage that is not related to the use and enjoyment of his land. Only have serveint land. |
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Tbe Transferability of Easements (in gross and appurtenant)
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iii. Transferability of Easements:
1. Appurtenant: passes automatically w/the dominant tenement, regardless of whether it’s mentioned in the conveyance. a. BUT, WRT the serveint estate, the easement passes automatically unless the new owner is a BFP w/o notice of the easement 2. In Gross: not transferable unless it is for commercial purposes. |
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Servitudes - Creation of an Affirmative Easements
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PING
1. Prescription: COAH (continuous, open and notorious; actual, hostile) 2. Implication/Implied from Existing Use: implied if (1) common grantor (2) the use has been apparent and (3) the parties expected that the use would survive division b/c it is reasonably necessary to the dominant land’s use and enjoyment. 3. Necessity: landlocked setting. No way out except for grantor’s remaining land. 4. Grant: if to extend beyond a year, must be in writing; “deed of easement” – this is a legal interest in land real property. |
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Servitudes - Scope of the Easement
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v. Scope of Easement: determined by the terms of the grant or the conditions creating it
1. No unilateral expansion of the scope |
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Servitudes - Termination of Easement
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vi. Termination of Easement: END CRAMP
1. Estoppel: serveint owner materially changes his position in reasonable reliance on the easement holder’s assurance that the easement will no longer be enforced. 2. Necessity: if created by necessity, expires as soon as necessity ends unless it was nonetheless created by express grant. 3. Destruction (of serveint land): other than thru the willful conduct of the owner 4. Condemnation of the serveint estate by eminent domain. 5. Release: written and given by the easement holder to the serveint owner 6. Abandonment: demonstration of physical action showing intent to never use the easement again. Mere nonuse or words are insufficient to terminate by abandonment 7. Merger: title to the easement and to the serveint land is vested in the same person. Later separation of title does NOT lead to automatic reinstatement of the easement 8. Prescription: serveint owner interferes w/the easement in accord with the elements of adverse possession COAH |
END CRAMP
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License
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i. DEF: a mere privilege to enter on another’s land for some delineated purpose.
ii. Informal: not subject to the S/F and are freely revocable, at the will of the licensor, unless estoppel applies to bar revocation 1. Estoppel bars revocation only when the licensee has invested substantial $, labor, or both in reasonable reliance on the license’s continuation. iii. Classic Cases: 1. The ticket case: a ticket is a freely revocable license. 2. Neighbors talking by the fence: an oral easement is unenforceable b/c of the S/F and therefore, it creates a freely revocable license. |
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The Profit
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c. The Profit
i. DEF: entitles its holder to enter the serveint land and take from it the soil or some substance of the soil, such as minerals, timber or oil. ii. ALL the rules of easements apply |
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The Covenant (definition) - Affirmative v. Negative / Restrictive
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i. DEF: a promise to do or not to do something related to land.
2. Negative/Restrictive Covenants: a promise to refrain from doing something related to land. Much broader restrictive device than the negative easement 3. Affirmative: a promise to do something related to land. |
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The Covenant - Distinguish Easement
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1. Distinguish easement: unlike the easement, it is not a grant of a property interest, but rather a contractual limitation or a promise re land.
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The Covenant - Distinguish Equitable Servitudes
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4. Distinguish Equitable Servitude: based on relief sought: damages [covenant] v. equitable [servitude].
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The Covenant: Binding Successors / Covenants Running w/ the Land.
FIRST Q - DOES THE BURDEN RUN? |
2. Does the Burden Run: analyze first WITHN
a. Writing: original promise b/t A and B in writing b. Intent: intent of the original parties that the covenant run with the land c. Touch and concern: the promise affects the parties’ legal relations as land owners, and not simply as a member of the community at large. i. Includes: covenant to pay homeowner’s association fees and covenants not to compete d. Horizontal and Vertical Privity: i. Horizontal: relationship b/t original parties Must be in succession of estate, such as grantor/grantee, LL/T, mortgagor/mortgagee. E.g., A purchased from B. ii. Vertical: relationship b/t one of the original parties to the promise and his successors no nonhostile nexus, such as K, devise, or descent, BUT NOT adverse possession e. Notice: successor must have had notice of the burden when he took |
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The Covenant: Binding Successors / Covenants Running w/ the Land.
FIRST Q - DOES THE BENEFIT RUN? |
3. Does the Benefit Run? Does the successor of the benefited promise have standing to enforce the promise? WITV
a. Writing: WRT the original promise b. Intent: to have the benefit run c. Touch and concern: the promise effects the parties as landowners d. Vertical Privity: a non-hostile nexus b/t the benefit holder and his successor |
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Equitable Servitudes (Definition)
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i. DEF: a promise that equity will enforce against successors. It is accompanied by injunctive relief.
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Equitable Servitudes - Creation
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ii. Creation of an ES that Binds Successors: WITNES
1. Writing: generally, but not always, the original promise is in writing 2. Intent: that the promise would be enforceable by and against successors 3. Touch and concern 4. Notice: successors of the burdened land had notice of the promise 5. ES: equitable servitudes NO privity requirement. |
WITNES
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The Implied Equitable Servitude
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iii. The Implied Equitable Servitude: The General or Common Scheme Doctrine
1. Enforcement of a negative reciprocal servitude to hold an unrestricted landowner to a restrictive covenant requires: a. When the sales began, the subdivider had a general scheme of residential development that includes the lot in question AND b. The Δ lotholder had notice of the promise in the prior deeds i. Notice imputed via: AIR Actual, inquiry, or record notice 1. Record notice: a split in the jurisdictions: a. Subsequent buyer on record notice of the contents of all of the prior deeds transferred by the common grantor OR b. Subsequent buyer NOT on record notice of the content of those prior deeds transferred to others by the common grantor. |
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Equitable Servitudes - Equitable Defenses to Enforcement
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iv. Equitable Defenses to Enforcement of ES:
1. Changed conditions: must show that the changes are so pervasive that the entire character of the area has changed; the entire essential composition has changed. |
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Adverse Possession (Elements)
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i. COAH
ii. Possessor’s subjective state of mind irrelevant: doesn’t matter that he thought in good faith he was the owner or that he knew he wasn’t the owner. |
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Adverse Possession - Tacking
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i. One adverse possessor may tack onto his time with the land his predecessor’s time, so long as there is privity, which is satisfied by a nonhostile nexus, such as blood, K, or deed. Privity liberally construed. NOT allowed to tack if there has been ouster.
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Adverse Possession - Future Interests
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d. Future Interests: The SOL does not run against the holder of a future interest until that interest b/cms possessory
i. POV: Runs on the happening of the event ii. Right of Entry: Runs when grantor asserts his right. 1. But must act w/in a reasonable time to avoid laches. |
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Adverse Possession - Governement Owned Land
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e. Government Owned Land: cannot be adversely possessed
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Adverse Possession - Covenant's in the True Owner's Deed
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f. Effect of Covenants in the True Owner’s Deed: If violates – then takes free of the covenant, generally; If complied – takes subject to it.
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Land Conveyance (general definition)
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The Purchase and Sale of Real Estate
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Land Conveyance - Two Step Process
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i. Land sale K, which endures until step II
ii. The closing, where the deed becomes the operative document. |
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Land Coveyance - The Land Sale K: (4) Topics
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Statute of Frauds
Risk of Loss Two Implied Promises in Every Land K No Implied Warranties of Habitability |
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Land Sale Contract - Statute of Frauds
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i. S/F: must be in writing, signed by the person to be bound. Must describe the land and state some consideration.
1. If amount recited is more than the actual size of the parcel: court will order SP w/a pro rata reduction in the purchase price, commensurate w/the acreage deficiency. 2. Exception: Part Performance equity will decree SP for an oral land sale K if 2 of the following 3 are shown: a. Payment: B remits all or part of the purchase price b. Possession by B and/or c. Improvement: by B |
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Land Sale Contract - Risk of Loss
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ii. Risk of Loss: based on equitable conversion principle equity regards as done that which ought to be done.
1. Once K signed, B is the owner, subject to the condition he pays the purchase price 2. Destruction: if, in the interim b/t K and closing, the land is destroyed thru no fault of either party, B bears the risk of loss unless the K says otherwise. |
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Land Sale K - Two Implied Promises in Every Land Sale K:
First Promise |
1. S promises to provide marketable title at closing
a. I.e., title free from reasonable doubt/lawsuits and threats of litigation b. Title unmarketable if: i. Adverse Possession: S must first quiet title. ii. Encumbrances: no mortgages or servitudes, unless waived by B. 1. BUT, S has a right to satisfy outstanding liens and mortgages at the closing, with the proceeds of the sale iii. Zoning Ordinance Violations iv. Encroachment |
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Land Sale K - Two Implied Promises in Every Land Sale K:
Second Promise |
2. S promises not to make any false statements of material fact
a. Majority: S also liable for failure to disclose latent material defects b. Disclaimer in K: “Property sold as is” or “With all Faults” i. Does NOT excuse S from fraud or failure to disclose |
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Land Sale K - No Implied Warranties of Habitability
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iv. NO implied warranties of habitability
1. Exception: implied warranty of fitness and workmanlike construction applies to a sale of a new home by a builder-vendor. |
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The Closing (2 Key Elements)
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Passing Title
and the 3 Types of Deeds |
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The Closing - general info
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controlling document is now the deed, which passes legal title from S to B
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The Closing - Passing Title
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need LEAD Lawful execution and delivery
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LEAD
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The Closing - Passing Title: Lawful Execution
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1. Lawful execution: must be in writing, signed by grantor; no need for consideration or a reference to it.
a. Description of land: no need for perfection. Just needs to be unambiguous |
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The Closing - Passing Title: Delivery
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2. Delivery: can be satisfied when grantor physically or manually transfers the deed to the grantee, including transfer by mail, thru an agent or a messenger
a. BUT: can be satisfied by present intent did the grantor have the present intent to be immediately bound, irrespective of whether the deed has been literally handed over? b. Recipient’s express rejection defeats delivery c. If deed is absolute on its face and is transferred with an oral condition, the oral condition drops out; not provable and delivery deemed accomplished. d. By escrow: permissible. Once conditions are met, title passes automatically to grantee. |
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The Closing - The 3 Types of Deeds
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Quitclaim
General Warranty Deed Statutory Special Warranty Deed |
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Quitclaim Deed
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1. Quitclaim: no covenants
a. No promise that grantor has title to convey BUT, there is an implicit promise to have marketable title at closing |
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General Warranty Deed (general definition)
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2. General Warranty Deed: warrants against ALL defects in title, including those attributable to grantor’s predecessors.
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General Warranty Deed: Present Covenants
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a. Present Covenants: breached, if ever, at the time the deed is delivered; instant of delivery makes the S of L begin to run.
i. Covenant of Seisen: grantor promises he owns the estate he now claims to convey ii. Covenant of right to convey: no restraints on grantor’s right to sell iii. Covenant against encumbrance: no servitudes or mortgages on the land |
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General Warranty Deed: Future Covenants
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b. Future Covenants: breach, if ever, when grantee is disturbed in possession
i. Covenant for Quiet Enjoyment: grantee won’t be disturbed in possession by a 3d party’s lawful claim of title. ii. Covenant of Warranty: promise to defend grantee if there are any lawful claims of title asserted by others. iii. Covenant for further assurances: promise to do whatever future acts are reasonably necessary to perfect title |
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Stautory Special Warranty Deed
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3. Statutory Special Warranty Deed: promises made by grantor only on his own behalf
a. Promise that the grantor hasn’t conveyed to anyone other than the grantee b. Promise that the estate is free from encumbrances made by the grantor. |
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The Recording System
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Protects BFP and Mortagagees
DOES NOT APPLY TO A/P b/c not a conveyance |
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The Recording System: Bona Fide Purchaser
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b. BFP: a purchaser who
i. Purchases property for value AND 1. Value: as long as B remits substantial pecuniary consideration, he is a B for value 2. Donees, heirs, and devisees are NOT protected, unless the shelter rule applies ii. Without notice that someone else got there first. |
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BFP - Types of Notice
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1. AIR: actual, inquiry, or record notice
a. Inquiry: B is on notice for whatever a reasonable inquiry would have revealed. i. B has duty to inspect the land before transfer of title 1. If someone else in possession, B is on inquiry notice b. If recorded instrument makes reference to an unrecorded transaction, grantee on notice of whatever a reasonable follow up would have revealed c. Record: on notice of deeds properly recorded w/in the chain of title. |
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Recording Statutes (3 Types)
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Notice
Race-Notice Race |
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Recording Statues - Notice
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i. Notice: “...unless the conveyance is recorded.”
The last BFP to take w/out notice wins. |
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Recoding Statutes - Race-Notice
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ii. Race-Notice: “...whose conveyance is first recorded.”
The first BFP to record wins. |
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Chain of Title Issues - The Shelter Rules
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1. The Shelter Rule: one who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against. The transferee “takes shelter” in the BFP/transferor’s status, even if he wouldn’t qualify as a BFP himself (b/c he is a donee or b/c he has notice of a previous conveyance).
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Chain of Title Issues - Wild Deeds
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2. The Problem of the Wild Deed:
a. O sells to A, who does NOT record. A sells to B, who records. A to B deed NOT in chain of title b/c it is missing a grantor, the O to A link. This is the wild deed. b. RULE: if a deed entered in the record (A-B) has a grantor unconnected to the chain of title (O-A), the deed is a wild deed and it is incapable of giving record notice of its existence. i. Thus, if O conveys to C, who records, C doesn’t have notice of the O to A or A to B deeds, so in B v. C, C wins in a notice and race notice. B should have insisted before closing that the O to A deed be recorded. |
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Chain of Title Issues - Estoppel by Deed
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3. Estoppel by Deed: one who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires the interest that he previously transferred.
a. NOTE: a BFP wins against a transferee who purchased from someone who hasn’t gotten title yet, even if that person recorded, b/c they recorded too early and aren’t in the chain of title. |
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Mortgages - Definition
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a. DEF: debt secured by real property. Must be in writing to satisfy the SOF.
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Equitable Mortgage
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iii. Equitable Mortgage: debtor conveys a deed to the land that is absolute on its face
1. As b/t debtor and creditor, parol evidence freely admissible to show parties’ true intent as to whether D was actually transferring ownership to C. 2. If C convey to a BFP, X X owns the property; D can proceed against C for fraud or to recover proceeds of the sale. |
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Parties Rights Upon Creation of a Mortgage - Unless and Until Foreclosure
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i. Unless and until foreclosure:
1. Mortgagor has title and right to possession 2. Mortgagee has a lien (the right to look to the land if there is a default) |
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(Mortgages) Who has the right to transfer interests
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All parties have the right to transfer their interests
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Creditor / Mortgagee Transfers (First Option)
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First - Endorsing the note and delivering it to transferee OR
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Mortgagee Transfers - Holder in Due Course
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i. To be a Holder in Due Course:
1. Note must be negotiable (made payable to named mortgagee) AND 2. The original note must be endorsed, signed by the named mortgagee AND 3. Original note must be delivered to the transferee. NO copies AND 4. Transferee must take the note in good faith, w/o notice of any illegality AND 5. Transferee must pay value for the note (more than a nominal amount) ii. Transferee: a holder in due course takes the note free of any personal defenses that could have been raised against the original mortgagee; the sort of defenses that you may anticipate in a breach of K dispute (e.g., lack of consideration, fraud in the inducement, unconscionability, waiver, estoppel, etc.) |
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Effect of a Holder in Due Course
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Effect: holder in due course can foreclose despite the presence of such personal defenses.
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Holder in Due Course - Defenses
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2. BUT, subject to real defenses MAD FIFI(4)
a. Material Alteration, Duress, Fraud In the Factum (i.e., a lie about the instrument), Incapacity, Illegality, Infancy, Insolvency |
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The other way that a creditor / mortgagee can transfer its interest
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By executing a separate document of assignment.
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Recording Statutes (in relation to Mortgagees, generally
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Recording Statues Apply to Protect Mortgagees
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Affect of Recording Statutes on Mortgages if the land is sold.
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i. If mortgagor sells land, which is now mortgaged, lien remains on the land, so long as the mortgage instrument is properly recorded, in either a notice or a race-notice jurisdiction.
1. If mortgage isn’t recorded, whether a subsequent BFP holds subject to the mortgage depends on whether it is a notice or race-notice jurisdiction. |
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If the mortgagor sells land, who is personally liable on the debt?
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1. If B “assumes the mortgage” both mortgagor and B are personally liable. B primarily liable and O secondarily liable.
2. If B takes “subject to the mortgage” B assumes no personal liability; only mortgagor personally liable. BUT, if recorded, the mortgage remains on the land, so if mortgagor doesn’t pay, mortgagee can foreclose. a. Mortgagee has the option of foreclosure or suing the original mortgagor |
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Mortgages - Foreclosure
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i. Mortgagee must foreclose by proper judicial proceeding: land is sold and proceeds go to satisfying the debt. Attorney’s fees and costs of foreclosure come off the top.
ii. Proceeds less than the amount owed: mortgagee can bring personal action against mortgagor for deficiency judgment. iii. If there is a surplus after sale: Junior liens paid off in order of priority, and anything remaining goes back to the debtor. |
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Mortgage - Forecloure: Order of Payments
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iv. Debt Payment: sale proceeds pay off mortgagee in order of priority
1. Each mortgagee entitled to payment in full before a subordinate lien-holder may take. |
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Mortgage - Effect of Foreclosure on Various Interests
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1. Terminates interests junior to the mortgage being foreclosed but will NOT affect senior interest.
a. If not enough to pay junior lienholders, they can seek a deficiency judgment BUT, once foreclosure of a superior claim has occurred, with the proceeds distributed appropriately, junior lienholders can NOT look to land for satisfaction. b. Those who have subordinate interests and the debtor - mortgagor are necessary parties to the litigation i. Failure to include: preserves the party’s claim despite foreclosure and sale, meaning the mortgage remains on the land. 2. NO affect on any superior interest. Buyer at the sale takes subject to that interest a. Buyer at the sale should estimate fair market value and deduct from his bidding price the amount owed to the senior interest holder; should then pay off the senior holder. |
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Mortgage - Priorities
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1. Creditors must record to have priority
2. Priority determined based on first in time to record. |
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Mortgage - Exception to the Priority Rules
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a. Exception Purchase Money Mortgage: a mortgage given to secure a loan that enables the debtor to acquire the encumbered land
i. If mortgagee records properly, he has first priority as to the parcel he financed. The purchase money mortgagee has superpriority. ii. If there is an after-acquired collateral clause (i.e., loan is secured by items acquired after the loan was issued) in a previous mortgage: the purchase money mortgagee will still take priority over the initial mortgagee. |
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Mortgages - SNDAs
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3. Subordination agreements are permissible: by private agreement, a senior creditor may agree to subordinate its priority to a junior creditor.
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Mortgages - Redemption
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1. In Equity: universally recognized until the date of sale. Until that time, mortgagor has the right to redeem the land and free it of the mortgage.
a. Requirements: pay off the debt, plus interest and costs before the time of sale |
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Mortgage - Redemption: Accelleration Clause
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2. Acceleration Clause: full balance, plus interest and costs, must be paid to redeem
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Mortgage - Redeption: Waiver
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3. Waiver: mortgagor can NOT waive the right to redeem in the mortgage itself.
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Mortgage - Statutory Redemption
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4. Statutory Redemption:
a. DEF: gives the debtor a statutory right to redeem for some fixed period after the foreclosure sale has occurred (~ 6 months) i. Applies only after the sale b. Price: foreclosure sale price; NOT the original debt amount. c. Usually, mortgagor has right to possession of the land during the statutory period, after the sale. d. Effect of redemption: nullification of the foreclosure sale. Title is restored to the redeeming owner |
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Lateral Support
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a. RULE: WRT improved land, if an adjacent landowner’s excavation causes the improved land to cave in, the excavator is liable only if he acted negligently.
i. Strict Liability: only attaches if Π shows that his improved land would have collapsed even in its natural state b/c of Δ’s actions |
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Water Rights (3)
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Streams, Rivers, and Lakes
Groudwater / Percolating Water Surface Waters |
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Streams, Rivers and Lakes
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i. Riparian Doctrine: the water belongs to those who own the land bordering the watercourse. These people are riparians, who share the right of reasonable use
1. Only liable if use unreasonably interferes w/others’ use ii. Prior Appropriation Doctrine: if the water belongs initially to the state, the right to divert it can be acquired by an individual, regardless of whether he is a riparian owner 1. Rights determined by priority of beneficial use; the norm: first in time 2. Any productive use the of the water is sufficient to create the appropriation right (including use for agriculture). |
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Groundwater/Percolating Water (Def. and Rule)
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water beneath the earth’s surface that is not confined to a known channel
i. Surface owner entitled to make reasonable use of ground water. NO wasteful use. |
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Surface Waters (Def. and Rule)
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those which come from rain, springs, or melting snow, and which have not yet reached a natural watercourse or basin
i. Common Enemy Rule: surface water is a common enemy and a landowner may change the drainage or make any other changes/improvements on his land to combat its flow. 1. Sometimes, courts modify the rule to prohibit unnecessary harm to others’ land |
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Possessor's Rights (2)
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a. Right to be free from trespass or nuisance.
i. Trespass: the invasion of land by some tangible, physical object. Removal thru ejectment ii. Private Nuisance: substantial and unreasonable interference with another’s use and enjoyment of land. 1. Hypersensitive Plaintiff: no nuisance if the problem is a result of plaintiff’s hypersensitivity or specialized use of the land. |
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Eminent Domain (Definition)
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government’s 5th AM power to take property for public use in exchange for just compensation
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Eminent Domain - Forms
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b. Forms:
i. Explicit Taking: an act of government condemnation 1. If partial condemnation and it impacts a LL/T relationship: the relationship continues, as does T’s obligation to pay for the remaining lease period BUT, T is entitled to share in the condemnation award to the extent the condemnation affected T’s rights under the lease. ii. Implicit or Regulatory Takings: a government regulation that although not a taking, has the same effect. Causes an economic wipeout. 1. Remedy: either just compensation or termination of the regulation coupled w/payment to owner of damages that occurred while the regulation was in effect |
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Zoning (definition)
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pursuant to its police powers, the state may enact statutes to reasonably control land use
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Zoning (Variance)
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the principle means of achieving flexibility in zoning. Proponent:
i. Must show undue hardship AND ii. Must show that the variance won’t work detriment/diminution in value to surrounding property owners iii. Granted or denied by administrative action of a zoning board |
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Zoining (Non conforming use)
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c. Nonconforming Use: a once lawful, existing use now deemed nonconforming by a new zoning ordinance.
i. RULE: use can’t be eliminated all at once w/o just compensation |
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Zoning (Unconstitutional Exactions)
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d. Unconstitutional Exactions: exactions are those amenities that government seeks in exchange for granting you permission to build.
i. RULE: inherently suspect b/c of concern re government extortion. 1. Must be: reasonably related, in both nature and scope, to the impact of the proposed development. If not, unconstitutional. |
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