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130 Cards in this Set

  • Front
  • Back
Identify the 3 Interests in Land
1. The Estate

2. The Easement

3. The Restrictive Covenant
FEE SIMPLE ABSOLUTE (FSA)
The FSA is potentially infinite in duration.

FSA must be fully ALIENABLE: No direct restraints on transfer of ownership of FSA. Any attempt to put a direct restrain on alienation is VOID -- which means you ignore the restriction.
MODERN Exception to Restraints on the Fee Simple Absolute (FSA)
The Modern exception upholds the validity of a RIGHT OF FIRST REFUSAL.
LIFE ESTATE
The life estate may be granted EXPRESSLY or may arise by IMPLICATION.

The life estate is never measured by time--only measured by life.

The MODERN rule ALLOWS a provision that terminates the life estate IF the life tenant attempts to convey away the life estate.
LIFE ESTATE PUR AUTRE VIE
(A life estate measured by the life of another).

Modern Rule: If the life tenant dies before the measuring life dies, the life estate passes to the estate of the deceased life tenant and continues in place until the measuring life dies.
WASTE
Life tenant MAINTAINS the estate--this expresses both the maximum and the minimum that the life tenant can do on the land.

Three types of waste:

1. Voluntary waste

2. Permissive waste

3. Ameliorative waste
VOLUNTARY WASTE
Voluntary waste is any AFFIRMATIVE action beyond the right of maintenance that causes harm to the premises.
PERMISSIVE WASTE
FAILURE TO MAINTAIN. Tenant must do 3 things to avoid liability for permissive waste:

1) REPAIRS -- Life tenant has an obligation to make ordinary repairs but not replacement.

2) TAXES -- The tenant must pay ALL taxes on the property.

3) MORTGAGE DEBT -- Life tenant must pay the interest on any mortgage indebtedness on the property but is not required to make any principal payments. The holder of the future interest generally must pay the principal.

4) INSURANCE -- Life tenant does NOT have to insure the property. However, the life tenant does have an insurance interest.
AMELIORATIVE WASTE
Ameliorative waste occurs when the life tenant alters the property substantially but life tenant's activity INCREASES the value of the land.

CAVEAT: If CHANGED CONDITIONS have made the property RELATIVELY WORTHLESS, then the life tenant can alter the property without incurring liability to the holder of the future interest.
Open Mines Doctrine (WASTE)
Depletion of natural resources constitutes waste UNLESS consumption of such resources constitutes the normal use of the land, as in the case of a life estate in a coal mine or granite quarry.
SEISIN
ALL freehold estates carry the concept of SEISIN. The holder of SEISIN = the taxpayer.
FUTURE INTERESTS
The INTEREST exists now but possession will not take place--if at all--until some time in the future.

Future interests retained by GRANTOR:
1. REVERSION
2. POSSIBILITY OF REVERTER
3. RIGHT OF RE-ENTRY

Future interests given to GRANTEE:
1. REMAINDER
2. EXECUTORY INTEREST
REVERSION
A reversion in the grantor arises whenever the grantor conveys away LESS than the FULL durational estate that the grantor had.

Ex: O to A for life. A later conveys the property to B.

A has a life estate.
O has a reversion.
POSSIBILITY OF REVERTER
Whenever the grantor conveys a fee simple determinable (FSD), the grantor automatically retains a possibility of reverter.

MAGIC WORDS:
--so long as
--while
--during
--until

The FSD will determine (or end) AUTOMATICALLY at the occurrence of some event.

Ex: O to A and his heirs for so long as no liquor is consumed on the premises.

A has a FSD.
RIGHT OF RE-ENTRY
(Power of Termination) Title does not go back to the grantor automatically when the condition is broken; grantor must do something to retake the property.

MAGIC WORDS:
--provided, however
--but if
--on condition that

Ex: O conveys Blackacre to A and her heirs; provided, however that if liquor is ever consumed on the premises then O or O's heirs shall have the right to re-enter and retake the premises.

Title then stays in A until the grantor O exercises his right of re-entry.
REMAINDER in Grantee
A remainder is a future interest in a third party grantee that comes NATURALLY and IMMEDIATELY on the termination of the preceding estate.

Remainders are either VESTED or CONTINGENT.
VESTED REMAINDER
A remainder is VESTED if nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate (i.e., the taker is ascertainable and no conditions to taking).
CONTINGENT REMAINDER
If there is a condition that the grantee must satisfy before his interest in the property will become possessory, he will have a contingent remainder.

Ex: O conveys Blackacre to A for life, then to B and his heirs if B survives A.

A: Life estate
B: Remainder in fee simple
O: Reversion

B has a contingent remainder.
CLASS GIFTS: Vested Remainder Subject to Open
Where the remainder interest is conveyed to a class of unnamed persons whose members are not yet fully known, the class remains open to allow for future persons who qualify as class members by satisfying the class description (i.e., the children of A).

Ex: O conveys Blackacre to A for life, then to A's children. At the time O makes this grant, A has three children: B, C, and D.

A has a life estate.
B, C, and D have a vested remainder subject to open. The vested remainder is subject to open to allow for the birth of future siblings.
CLASS GIFTS: Rule of Convenience
Under the rule of convenience, the class CLOSES for a CLASS GIFT whenever any class member is entitled to distribution. The rule of convenience is a rule of construction, not a rule of law.

Ex: O to A's Children by will. At the time the will is executed, A has two children: B and C. After the will is executed but before O dies, A has another child, D, and B dies. Then O dies. Two year later, A has another child, E.

--The gift to A's children is a class gift.
--B's estate gets nothing. Members of a class who predecease the testator are eliminated.
--C and D take.
--E gets nothing because, under the rule of convenience, the class CLOSES when the testator dies.
EXECUTORY INTEREST
An executory interest operates to cut short the estate that comes before it.

Ex: O conveys Blackacre to A so long as the property is used for residential purposes; and if the property is ever used for other than residential purposes, then to B and heirs.

--A has a fee simple subject to an executory interest.
--B has an executory interest.
The RULE AGAINST PERPETUITIES (RAP)
NO interest will be valid unless it must vest--if it is going to vest at all--within 21 years after the death of some life in being who was alive at the moment the conveyance was made.

PUBLIC POLICY: To promote free transferability of land by preventing remote vesting. We want to make it easy to transfer title to Blackacre.

The RAP ALWAYS applies to executory interests and contingent remainders and vested remainders subject to open. If a future interest violates the RAP, it is VOIDED. So, cross out language of the conveyance that violates the rule.

Validity of an interest under the RAP is determined at the time the conveyance is made--at the time the interest is created. We do NOT wait and see what actually happens.
RAP: Transfer by Will or Deed
If the transfer is made by WILL, apply the RAP as of the time of Testator's DEATH--when the will takes effect.

If the transfer is made by DEED, apply the terms of the RAP as of the time the deed takes effect.

Uniform Statutory Rule Against Perpetuities: 90-year vesting period.
RAP: Right of First Refusal
Contingent interests in property, such as options and rights of first refusal, violate the RAP if they could possibly be exercised outside the time period of the rule.
RAP: Exceptions/Special Situations
Exceptions to the RAP include:

1) Charity-to-Charity gift

2) Age contingency 21 or less (over 21 violates RAP)

3) Fertile Octogenarian Rule -- which conclusively presumes that a woman might have another child regardless of her age or medical condition.
RULE: If the RAP operates to VOID the gift over to ANY member of the class because their interest might vest outside the time frame of the rule then ALL class members lose.
JOINT TENANCY (JT)
The 4 UNITIES must be persent at the outset in order to create a JT (T-TIP Test):

1. Unity of TIME. All JT interests must have vested at the same time.

2. Unity of TITLE. The grant to all JTs must be the same instrument (e.g., one deed).

3. Unity of INTEREST. All JTs must take the same kind and the same amount of interest.

4. Unity of POSSESSION. All JTs must have identical rights of possession.

General RULE: To create a JT, the language of conveyance must clearly reflect the grantor's INTENT to create a JT.

Under the Majority Rule today, certain magic words must be used:
--"as joint tenants, with right of survivorship" or "in joint tenancy with right of survivorship."

The JT carries a RIGHT OF SURVIVORSHIP. The surviving tenants take automatically on the death of a JT.
Joint Tenancy: Right of Partition
If any JT wants to be relieved of common ownership, he can do so by asking that the property be partitioned.

This can happen through voluntary agreement between the parties or if the parties cannot reach an agreement, by judicial action.
Joint Tenancy: Severance
Severance (involuntary termination of the JT) occurs whenever any one of the four unities is disturbed.

However, the JT cannot be severed by will (must be severed during your lifetime).
Joint Tenancy: Mortgage
MAJ RULE: In a LIEN theory state, there is no severance of the JT. This is because when a lien is executed, a lien attaches to the title, but title is not transferred.

MIN RULE: In a TITLE theory state there is a severance of the JT. This is because when a mortgage is executed, title passes from mortgagor to mortgagee, even though title goes back to the mortgagor when the mortgage is satisfied.
Creditor's Sale of Interest in Joint Tenancy
There is NO severance until the judicial sale actually takes place.
TENANCY IN COMMON (TIC)
NO unities are required EXCEPT one: Unity of POSSESSION, which means that each co-tenant is entitled to possess the whole of the property.

MODERN presumption is to favor the TIC. TIC is the DEFAULT tenancy. So, if a JT is not properly created, then it results in a TIC.

This estate is FREELY ALIENABLE (meaning, each co-tenant may do what they want with it, like sell their half, mortgage their half, give it away, etc.).

Any TIC can force a partition.

In a TIC, there is no right of survivorship.
TENANCY BY THE ENTIRETY (TBE)
Requires the four unities, PLUS the unity of MARRIAGE.

At CL, any grant of a concurrent estate to a Husband and Wife would give rise to a TBE provided the four unities were present.

NOTE: This is only tested on the MBE because CA is a CP jxn!!

TBE has a right of survivorship.

But, no right of partition.

Termination can be by:
1. Death
2. Mutual agreement in writing
3. Divorce
4. Execution by a joint creditor
CO-OWNERSHIP: Possession
Each co-tenant has the right to possess the whole of the property--consistent with the same right in every other co-tenant.
CO-OWNERSHIP: Accountability
ISSUE: Whether a co-tenant in possession has to SHARE PROFITS that this co-tenant has received from the land.

General RULE: One co-tenant does not have to account to the other co-tenant for his share of the profits, subject to 4 exceptions:

1. OUSTER. Accounting is required if one co-tenant is either keeping a co-tenant off the property, or claiming a right of exclusive possession.

2. AGREEMENT TO SHARE.

3. Lease of the property by a co-tenant to a THIRD PARTY.

4. DEPLETION OF NATURAL RESOURCES.
CO-OWNERSHIP: Contribution
Contribution concerns the right of one co-tenant to force the other co-tenant to pay their fair share of some expenditure made on the property.

Reimbursement?
--Building a house? NO
--Fixing the barn (repairs)? YES
--Paying the mortgage? YES
--Paying the taxes? YES
LL-TENANT ESTATES (Non-Freehold Estates)
The FOUR Landlord-Tenant Estates are:

1. Estate for Years (or Tenancy for Years)

2. Periodic Tenancy

3. Tenancy at Will

4. Tenancy at Sufferance
Tenancy for Years
Key phrase is "specified time."

Must specify two dates: a definite beginning and ending date.

The estate is measured by a FIXED period of time--no matter how short.

BUT, also remember that the Statute of Frauds (SOF) requires that any tenancy for years for over 1 year be in writing.

KEY ELEMENT: NO NOTICE is required between landlord and tenant to terminate a tenancy for years.
Periodic Tenancy
Key phrase is "repeating."

The estate rolls on and on--until one party gives proper notice.

CREATION:

a. By express agreement

b. By implication: No agreement to duration

c. By operation of law:
1. Oral lease that violates SOF
2. Holdover tenant

A periodic tenancy MUST BE TERMINATED BY GIVING PROPER NOTICE.
Periodic Tenancy: Holdover Tenant
When a LL accepts a rent check from a holdover tenant, a periodic tenancy is created by operation of law for the period specified in the rent check.
Tenancy at Will
Either party can terminate this tenancy at any time, without notice.

Termination by operation of law:
--death of either party
--waste by the tenant
--assignment by the tenant
--transfer of title by LL
--Lease by the LL to 3rd party
Tenancy at Sufferance: The Holdover Tenant
This type of tenancy refers to the bare POSSESSION that a tenant has of the property when the tenant wrongfully holds over.

LL's options:

1. Sue to evict (sue in trespass and to recover damages for the holdover).

2. Impose a new periodic tenancy.

RAISED RENT: If the LL gives the T notice of the increase in rent BEFORE the expiration of the lease, then the LL may properly demand payment of the higher rent amount if the tenant holds over.
DUTIES OF THE TENANT
1. DUTY TO PAY RENT

2. DUTY TO MAINTAIN PREMISES

If the lease is silent, the T is still subject to the CL duty not to commit waste.

If the lease includes a covenant to repair, an express covenant makes the tenant the absolute insurer of the property. The MAJORITY view is that once the tenant covenants to repair, he is liable for EVERYTHING--including ordinary wear and tear. BUT, if the premises are destroyed without the tenant's fault, the tenant will be under no duty to rebuild the structure.
LL Remedies: Tenant fails to pay rent
AT CL, the LL could sue for damages; however, the LL was allowed to collect ONLY the amount that was due and payable and the LL could NOT terminate the lease.

MODERNLY, however, ALL states allow the LL to sue for damages AND terminate the lease, thereby evicting the tenant from the property.
LL Remedies: Tenant Unjustifiably Abandons
LL may elect to treat the abandonment as the tenant's offer of surrender of the leasehold, which the LL accepts by retaking the premises and thereby terminating the lease. Tenant has no further rent obligation.

OR the LL can RELET the premises, holding the T liable for any deficiency. At CL, there was no duty to MITIGATE tenant's damages. However MODERNLY, the LL must make a reasonable effort to relet the property in order to mitigate the tenant's damages.

Tenant will be liable for any DEFICIENCY/DIFFERENCE.
DUTIES OF THE LANDLORD
1. DUTY TO DELIVER POSSESSION OF THE LEASED PREMISES

2. IMPLIED WARRANTY OF HABITABILITY

At CL, there was NO DUTY to deliver the leased premises in habitable condition. Today, there exists an implied warranty of habitability, but ONLY FOR RESIDENTIAL PROPERTIES.

3. IMPLIED COVENANT OF QUIET ENJOYMENT
Tenant's Remedies for Breach of Implied Warranty of Habitability
1) Tenant can move out AND end the lease (w/ no further lease obligation). OR

2) Tenant can stay on the property AND sue for damages.

3) A growing number of states also allow the T to make reasonable repairs and deduct this cost from future rent payments ("repair and deduct")
Implied Covenant of Quiet Enjoyment
Every lease includes the LL's implied promise not to interfere with the tenant's QUIET ENJOYMENT of the leased premises.

This implied promise is included in EVERY lease--residential, commercial, or otherwise.

The LL may breach this implied promise in 3 ways:

1) TOTAL EVICTION
2) PARTIAL EVICTION
3) CONSTRUCTIVE EVICTION
TOTAL EVICTION
Physically excluding the tenant from the premises (e.g., changing the locks). Lease is then over.
PARTIAL EVICTION
Partial eviction occurs where the LL physically excludes the tenant from only some portion of the leased property.

Ex: LL comes to the property and changes the lock to the basement, saying he needs to store some stuff there. What can the tenant do? Stay on what's left in the lease AND stay for free! But, be careful if the partial eviction is by a 3rd party (if so, the rent is proportionally reduced to reflect the amount taken).
CONSTRUCTIVE EVICTION
A constructive breach occurs where the LL fails to provide some service that the LL is obligated to provide AND that failure makes the property UNINHABITABLE.

3 requirements:

1. It must be the LL's failure to provide some service, not some 3rd party's failure.

2. There must be a SUBSTANTIAL interference with the tenant's quiet enjoyment of the property (e.g., LOTS of cockroaches, not just one).

3. Tenant must abandon the premises within a REASONABLE TIME after the breach.
ASSIGNMENTS and SUBLEASES
Remember: Property law favors the free transferability of interests in land.

ASSIGNMENT: transfer of ALL of the lease.

SUBLEASE: transfer of PART of the lease.
ASSIGNMENT: Liability of Successive Assignments for Payment of Rent
A tenant is liable to the LL for rent if there is EITHER privity of estate or privity of contract.

PRIVITY OF ESTATE exists only between the present landlord and the present tenant.

PRIVITY OF CONTRACT exists only where there is an agreement between the LL and the particular tenant from whom the LL seeks to recover the rent.
ASSIGNEE'S liability on other covenants
The covenant (promise) to pay RENT always runs with the land and therefore is enforceable based on either privity of estate or privity of contract.

As to other covenants contained in the lease, the general rule is that a covenant will RUN with the land if it TOUCHES and CONCERNS the land.

If performance of a covenant makes the land MORE VALUABLE or MORE USEFUL, then the covenant touches and concerns the land.
Liability of SUCCESSIVE landlords on the lease
ORIGINAL LL continues to be liable to original tenant because of privity of contract.

SUCCESSOR LLs may be liable to original tenant if there is either privity of contract or privity of estate and the lease covenant runs with the land.
SUBLEASE: Liability for Rent
LL can recover rent from anyone with whom he is in privity (either privity of estate or privity of contract).

In the case of a sublease, the SUBLESSOR keeps the estate; the estate is not transferred to the sublessee.

SO, there is no privity of estate between the LL and the second tenant.

AND there is no privity of contract between the LL and the second tenant...

SO the original lessor (tenant one) continues to be liable for the rent.
NON-ASSIGNMENT CLAUSES
It is a clause in the lease that says the tenant may not assign or sublet without the express permission of the landlord.

They are fully enforceable. But, courts will strictly construe such clauses. Violation of the clause merely makes the attempted transfer voidable at the OPTION of the LL.
Effect of LL's Consent to Assignment
General RULE regarding WAIVER of non-assignment/non-sublease clause: Permission given once means that a non-assignment/non-sublease clause is WAIVED ALTOGETHER--unless the LL states otherwise at the time of giving permission.
CONDEMNATION of the leasehold interest
PARTIAL CONDEMNATION:
--A partial taking by eminent domain does not release the tenant from the obligation to pay full rent. However, you will get to share in the condemnation award.

COMPLETE taking of the leasehold property:
--You do NOT have to pay rent.
--You will share in the condemnation award, but ONLY to the extent that the fair rental value of the property exceeds the amount of rent due under the lease.
Tort Liability of Landlord
General CL RULE: NO duty imposed on the LL.

FIVE EXCEPTIONS:

1. LATENT DEFECTS

2. SHORT TERM LEASE of furnished dwelling

3. COMMON AREAS (aka "common passageways under LL's control)

4. NEGLIGENT REPAIRS undertaken by LL

5. PUBLIC USE EXCEPTION.
Tort Liability of Landlord: LATENT DEFECTS
General RULE: Landlord is under a duty to disclose latent defects which the landlord either knows or reason to know of (he "knew or should've known").

The LL must disclose the defect but is under no duty to repair.
Tort Liability of Landlord: SHORT TERM FURNISHED DWELLING
The rental of a furnished dwelling for a short term makes the LL liable for defects, even if the LL neither knows nor has reason to know of such defects.
Tort Liability of Landlord: COMMON AREAS
LL will be liable if the LL failed to exercise reasonable care (based on a negligence standard).
Tort Liability of Landlord: PUBLIC USE EXCEPTION
3 REQUIREMENTS TO INVOKE THE PUBLIC USE EXCEPTION:

1. The LL knew or should've known of MAJOR DEFECTS.

2. The LL knew or should've known the tenant would not fix the defect.

3. The LL knew or should've known that the public will be using the premises.
Tenant's Tort Liability
General RULE: Tenant is ALWAYS liable to a third party invitee for negligent failure to correct dangerous conditions on the leased premises, regardless of whether the landlord may be held liable as well.
FIXTURES
General RULE: Fixtures become part of the real property.

Fixtures cannot be removed by sellers or tenants. Key issue is whether an item of personal property is treated as a fixture or not.

The analysis turns on a question of INTENT: Did the person installing INTEND that the item remain with the real property as a fixture?

EXPRESS INTENT: If there is an agreement between the parties, the agreement will control.

If NO AGREEMENT, you have to determine intent by the FOUR FACTORS.
FIXTURES: Four Factors of Determining Intent
1) DEGREE OF ATTACHMENT

2) GENERAL CUSTOM

3) DEGREE OF HARM TO PREMISES ON REMOVAL

4) TRADE FIXTURES -- Trade fixtures are NOT considered fixtures and can ALWAYS be removed.
EASEMENT
An easement is a NON-POSSESSORY interest in land involving a RIGHT to USE the land.

1st step is to CLASSIFY the easement:

--easement appurtenant
--easements in gross

2nd step is to specify METHOD OF CREATION
Easement Appurtenant
Any time the easement DIRECTLY BENEFITS the USE and enjoyment of a SPECIFIC PARCEL of land, it is classified as an easement appurtenant.

The BURDENED PROPERTY is the SERVIENT ESTATE.

The BENEFITED PROPERTY is the DOMINANT ESTATE.
Easement in Gross
An easement in gross occurs where there is NO DOMINANT estate because there is only ONE PARCEL of land involved, which is the property BURDENED by the easement--or the servient estate.
Easement Creation: EXPRESS EASEMENT
Express easement arises from:

a) express grant of an easement to someone else;

b) express reservation of an easement when the land is sold to another person.

An EXPRESS easement must:

1) be in WRITING;
2) be signed by the holder of the servient estate; and
3) satisfy all the deed formalities.

NOTE: Easements of less than 1 yr do not have to be in writing.
Easement Creation: IMPLIED EASEMENT
Implied easements arise in 2 situations:

1) Previous use by common grantor:

There must be a previous use by a common owner and this previous use must be: (a) apparent; (b) continuous; and (c) reasonably necessary.

2) Absolute right of access rule:

If a person is landlocked, they have an absolute right to an easement, but the owner of the servient estate may choose the location as long as it is a reasonable choice)
Easement Creation: EASEMENT BY PRESCRIPTION
Easements by prescription are like title by adverse possession. There are FOUR requirements:

1) Use must be ADVERSE to the true owner;

2) Use must be CONTINUOUS and UNINTERRUPTED and must last for the specified statutory period (20 yrs at CL; be careful for seasonal use--OK);

3) Use is visible and notorious or made with the owner's knowledge; and

4) Use is without the owner's permission AND remember--Oral permission is enough to destroy the hostility needed to establish a prescriptive easement.
Transfer of the Easement Appurtenant
All who subsequently succeed to title to the dominant estate become entitled to the benefit of the easement appurtenant.
Transfer of Easements in Gross
COMMERCIAL easements in gross can ALWAYS be transferred.

PERSONAL easements in gross CANNOT be transferred.
Transfer of the Servient Estate--Burden on the Easement
Easements are always binding on subsequent holders of servient estates--even if the easement is NOT specifically mentioned in the deed of conveyance--provided the subsequent holder had NOTICE of the easement.
Ways a successor in interest may be put on NOTICE of an EASEMENT
1) ACTUAL knowledge or notice;

2) CONSTRUCTIVE notice -- which arises from the fact that the document creating the easement is duly recorded in the buyer's direct chain of title.

3) INQUIRY notice -- which is notice arising from the buyer's physical inspection of the land and the visible appearance of the easement on the land--OR--the notice that arises from the buyer's inspection of the public records contained in the buyer's direct chain of title.
Scope of the EASEMENT
The specific terms of an easement control on questions of use.

Where an easement is SILENT, there are TWO PRESUMPTIONS:

1) Unless otherwise specified, an easement is presumed to be perpetual in duration.

2) The use presumed is that of REASONABLE DEVELOPMENT of the dominant estate.

REASONABLE DEVELOPMENT is that development which would likely have been contemplated by the parties at the time the easement was granted.

REMEDY for excessive use: ENJOIN the use but do not terminate the easement.
REPAIRS of the EASEMENT
General RULES:

--The holder of the benefit of the easement is responsible for making any necessary repairs.

--The holder of the easement can always go on the servient estate to repair.

--The holder of the easement must make reasonable restoration of the servient estate after making repairs to the easement.

--Unless the easement says otherwise, the holder of the servient estate has no repair obligation.
Termination of an Easement
An easement may end by reason of its own terms.

1. DOCTRINE OF MERGER (whenever the dominant and the servient estates come together in the same owner, the easement is automatically terminated).

2. DEED OF RELEASE (must be in writing and satisfy SOF)

3. ABANDONMENT BY ACTION (Mere non-use does NOT constitute abandonment, but you can abandon through action).

4. TERMINATION BY ESTOPPEL (requires a representation of relinquishment by the holder and the holder of the servient estate must make a change in her position in reliance on that representation).

5. TERMINATION BY PRESCRIPTION (The owner of the servient estate must stop the use of the easement AND must keep it stopped for the period of time required by the applicable statute of limitations).
EASEMENTS for View or Sunlight
There are NO implied easements for view or sunlight.
LICENSE
A license is a limited privilege to USE the land in the possession of the licensor. A license is not a property interest; it is a CONTRACT right.

A license can ALWAYS be revoked at will by the licensor.

TICKETS are always licenses (no property right).

If an easement is attempted but fails due to the statute of frauds, a LICENSE is created.
PROFITS
A profit gives the right to go onto the land of another and take away a natural resource.

Along with the profit goes the IMPLIED EASEMENT to go onto the land to remove the natural resource.
RESTRICTIVE COVENANT
A restrictive covenant gives the holder of the interest the right to RESTRICT some third party in the USE of his or her land.

Restrictive covenants are either:

a) COVENANTS (promises) running with the land; and

b) EQUITABLE SERVITUDES.

BOTH involve a WRITTEN PROMISE that imposes restriction on the use of land. The only DIFFERENCE is the theory used to enforce the terms of the restriction.
Distinguish a COVENANT from an EQUITABLE SERVITUDE
If the Plaintiff wants MONEY damages, the restriction is called a covenant at law (legal remedy).

If the Plaintiff wants AN INJUNCTION, the restriction is called an equitable servitude (court in equity).
4 Requirements to Enforce a RESTRICTIVE COVENANT
1) INTENT -- The parties must intend that the restriction run with the land.

2) NOTICE -- The person must have either actual, constructive or inquiry notice.

3) TOUCH AND CONCERN -- (RULE) If the performance of the covenant makes that land more valuable or more useful, the covenant touches and concerns the land. NOTE: covenants not to compete DO touch and concern the land.

4) PRIVITY -- Horizontal and Vertical.
Determining PRIVITY in a RESTRICTIVE COVENANT
BURDEN: Successor-in-Interest is the DEFENDANT--requires both:

a) VERTICAL PRIVITY -- refers to those who subsequently obtain the property subject to the covenant. They must take the FULL ESTATE.

b) HORIZONTAL PRIVITY -- refers to the original parties to the peromise. They must share some interest in the land independent of the covenant. To establish horizontal privity, there must be a conveyance of the property between the original properties.

BENEFIT: Successor-in-Interest is PLAINTIFF:

a) VERTICAL PRIVITY -- On the benefit side, the general rule is that the holder of any succeeding possessory estate may enforce the benefit of the promise as a covenant at law.

2) NO horizontal privity is required to enforce the benefit of a restrictive covenant.
EQUITABLE SERVITUDES: 3 Requirements to Obtain an INJUNCTION to Enforce the Burden of the Promise
1) INTENT that the restriction be enforceable by successors-in-interest;

2) The restriction must TOUCH and CONCERN the land;

3) NOTICE to the subsequent purchaser (actual, constructive, or inquiry).

NO PRIVITY of any kind is required to enforce the promise in equity as an equitable servitude.
EQUITABLE SERVITUDES: Requirements to Establish a Mutual Right of Enforcement
1. An INTENT to impose a SERVITUDE (a restriction on use) on ALL land in the subdivision;

2. NOTICE (actual, constructive, or inquiry);

DEFENSES:

1. Unclean hands
2. Acquiescence
3. Laches
4. Estoppel
Termination of Covenants and Servitudes: CHANGED CIRCUMSTANCES
General RULE: If all the lots in an entire subdivision are affected, then the use restriction will be eliminated.
ADVERSE POSSESSION
Six Requirements: H-E-L-U-V-A

1. HOSTILE (X is on the land with no right to be there)

2. EXCLUSIVE (X must be excluding others from possessing the property)

3. LASTING (The possession must last for the statutory period; CL is 20 yrs)

4. UNINTERRUPTED USE (continuous use that an ordinary owner would make)

5. VISIBLE (open + notorious)

6. ACTUAL [POSSESSION] (X must actually possess the land to obtain title.

--The true owner DOES NOT have to know what's going on.

--The adverse possessor (X) DOES NOT have to think he owns it (GF/bad faith is irrelevant).
Constructive ADVERSE POSSESSION
The Doctrine of Constructive Adverse Possession expands the kernel of actual possession out to the full extent of the color of title under which the adverse possessor makes his claim of right to the property.

LIMITATIONS:

1) the amount of land actually possessed must bear a REASONABLE relation to the whole.

2) the property must be UNITARY, which means that the land is a seamless whole (i.e., no highway splitting it in two).

LEASED LAND constitutes possession for purposes of Adverse Possession.
ADVERSE POSSESSION and Future Interests
The adverse possession clock does NOT start to run against the holder of a future interest until that interest becomes POSSESSORY.

In the case of a FEE SIMPLE DETERMINABLE (FSD), the happening of the condition starts the clock running for purposes of AP.

An adverse possessor can TACK together successive periods of AP in order to satisfy the statutory period. BUT, there must be NO GAPS in possession.
ADVERSE POSSESSION: Disabilities
The 3 "I's":

1. INFANCY
2. INCARCERATION
3. INSANITY

General RULE: If a true owner is suffering from any of these three disabilities at the time the period of AP begins, the clock for AP will NOT start to run until the true owner is free of the disability.

NOTE: an intervening disability doe snot stop the clock.

NOTE: no tacking of disabilities (e.g., infant becomes mentally insane just before turning 18).
AP: Gov't Land
No AP against government land!
AP: Marketable Title?
Title acquired by AP is not marketable.

To get marketable title, there must be a court action to QUIET TITLE.
CONVEYANCING: Requirements under the Statute of Frauds
Any contract for the sale of any interest in real property must be in WRITING and SIGNED by the one who is sued.

This signed writing must include:

1. A description of the property;

2. Names of the parties; and

3. The PRICE to be paid.

EXCEPTION: Doctrine of Part Performance.
CONVEYANCING: Requirements under the Statute of Frauds -- EXCEPTION
DOCTRINE OF PART PERFORMANCE

TWO requirements must be satisfied to rely on this exception:

1) The oral contract must be certain and clear; and

2) The acts of partial performance must clearly PROVE UP the existence of a contract.

How do you PROVE UP the existence of a K?
--buyer paid full (or close to full) purchase price;
--buyer built improvements on the property; or
--look to see if the buyer took possession and then took further action that clearly indicates the existence of a K.
RISK OF LOSS: Doctrine of Equitable Conversion
At CL, after a real property K has been executed, the BUYER bears the risk of loss because of the doctrine of equitable conversion.

Therefore, once a K is signed, equity treats the property as BUYER land, and therefore, the BUYER bears the risk of loss.

NOTE: this rule only applies if the seller is NOT at fault.
DEATH of a party before closing
What happens if the SELLER dies before closing?

--Buyer will close the sale with the seller's estate; Buyer will deliver the purchase price to the seller's estate, meaning that they get the money.
--the seller's interest is in PERSONAL PROPERTY

What happens if the BUYER dies before closing?

--Seller will close the sale with the buyer's estate. Seller will deliver title to the property to the buyer's estate.
--Buyer's interest is in REAL PROPERTY.
MARKETABLE TITLE
Every land sale contract contains an IMPLIED WARRANTY that the seller will deliver MARKETABLE TITLE to the buyer at close of escrow.

Marketable title is title that a reasonably prudent buyer would accept, which means that MINOR defects do not matter (e.g., land is 6" off; not 6 feet)

To satisfy this warranty the seller must provide buyer with 3 things:

1) Proof of Title

2) Title Free of Encumbrances (e.g., no easements, no restrictive covenants, no mortgages, no options, etc.)

3) Valid Legal Title on Day of Closing.
What if Buyer determines that Seller's title is NOT MARKETABLE?
General RULE: Buyer must NOTIFY the seller of any defect in title AND allow the seller to CURE the defect--even if that means postponing the day of closing.

Buyer's REMEDIES:
--RECISSION
--DAMAGES
--SPECIFIC PERFORMANCE (coupled with a reduction in the purchase price that reflects the defect in title).
TIME of performance in land sale contracts.
Time is NOT of the essence in land sale contracts UNLESS:

1) the contract SAYS OTHERWISE; or

2) the facts make clear that the parties intended that time is of the essence.

Failure to perform if the K has a "time of the essence" clause results in TOTAL BREACH.
REMEDIES for breach of K for sale of REAL PROPERTY
DAMAGES:

--The measure of damages is generally going to be the difference between the K price and the value of the property as of the date of breach.

-- A LIQUIDATED DAMAGES clause will be enforced so long as the amount is REASONABLE, which means that it should not exceed 10% of the K price.

SPECIFIC PERFORMANCE is available to both the BUYER because land is UNIQUE (and the SELLER can even get SP too, despite the fact that money is NOT unique).
DEFECTS on the property at date of closing
At CL, the rule was one of CAVEAT EMPTOR (buyer beware!)--Buyer cannot recover from seller because he has a duty to inspect.

CL EXCEPTION: While the Seller has no duty to disclose any defects to the Buyer, the Seller cannot ACTIVELY CONCEAL such defects.

MODERN TREND is to impose a duty to disclose to a prospective buyer SERIOUS DEFECTS in the property that the seller knows of and which are not obvious to the buyer. This is the MAJORITY RULE in cases involving real property.

The MAJORITY RULE is also that there is an IMPLIED WARRANTY OF FITNESS (or merchantability) that applies only to the sale of new residential housing by a BUILDER-SELLER. Caveat emptor still applies to all other situations, such as the sale of commercial property, agricultural land, etc.
2 Requirements for a Deed to Pass
1. EXECUTION:

--Deed is subject to the SOF, and therefore must be in writing and signed by the SELLER (but not the buyer)

--the deed must DESCRIBE THE LAND with sufficient accuracy (otherwise it will be void for vagueness)

2. DELIVERY:

--The legal test for delivery is solely a question of whether the Grantor had the necessary INTENT to pass title. NO PHYSICAL TRANSFER is required.

--Recording a deed raises a presumption of delivery, even if the Grantee knows nothing about the deed.

--Delivery of a deed is only valid if the deed is ACCEPTED. Acceptance will be implied unless the facts show otherwise. Consideration is not required in order for a deed to be valid.
PRESENT and FUTURE COVENANTS
PRESENT:

1. Covenant of Seisin
2. Covenant of Right to Convey
3. Covenant Against Encumbrances

FUTURE:

1. Covenant of Quiet Enjoyment
2. Covenant of Warranty
3. Covenant of Further Assurances--The "Mop-Up" Covenant

BREACH of a Covenant of Title:
Where there is a breach of warranty, plaintiff's damages will be limited to the amount of purchase price received by the warrantor plus any incidental damages.
Subsequent Sale to a Bona Fide Purchaser for Value (BFP)
Sale to a BFP will cut off the rights of an earlier grantee and therefore will cut off that Grantee's right to rely on the Estoppel by Deed Doctrine (which gives the Grantor an implied covenant that the title will be conveyed to the Grantee).
CONVEYANCING BY WILL
1. ADEMPTION: If the will purports to devise a specific parcel of land, but testator does not own the land at the time of her death, the gift is adeemed (it fails).

2. EXONERATION: If the devised property is subject to a mortgage or other lien, that lien must be exonerated from the testator's estate. The devisee is then entitled to have the lien paid off by the testator's estate, and he then receives the property free of the lien.
The growing trend is to abolish this doctrine.

3. LAPSE and ANTI-LAPSE STATUTES:

At CL, if the beneficiary died before the testator, the gift LAPSED, and therefore was VOID.

MODERNLY, the majority of states have adopted anti-lapse statutes to prevent lapse by allowing the gift to pass to certain relatives of the predeceasing beneficiary.

ON THE MBE: If they don't give you a statute, then you apply the CL and treat the gift as lapsed.
Types of RECORDING STATUTES
There are 3 types of RECORDING STATUES:

1. NOTICE STATUTE

2. RACE STATUTE

3. RACE-NOTICE STATUTE
RECORDING STATUTE: Notice Statute
A notice statute protects subsequent Grantees who are BFPs who take without notice of the earlier transaction.

CL Rule: "First in time, first in right."

TIP: in a Notice statute, look for the words "without notice" or "in good faith", BUT DOES NOT HAVE the words "recorded first" or "first recorded."
RECORDING STATUTE: Race Statute
In a pure race jurisdiction, NOTICE IS IRRELEVANT.

Whoever RECORDS FIRST keeps the property.

The subsequent purchaser does NOT have to be a BFP.

TIP: If the quoted language does not include the word NOTICE or the words "good faith" then it is a pure race statute.
RECORDING STATUTE: Race-Notice Statute
A Race-Notice act involves a 2-part test:

A race-notice statute protects all subsequent Grantees who are BFPs who:

1) take WITHOUT NOTICE; and

2) are the FIRST to RECORD.

TIP: in a Race-Notice statute, look for the words "without notice" or "in good faith", then look for the words "recorded first" or "first recorded."
Bona Fide Purchaser (BFP)
A BFP is a bona fide purchaser for value who takes wthout notice.

Unless there is an explicit claim of fraud, any consideration that is OUT OF POCKET is enough to be considered VALUE.

If a subsequent purchaser has actual notice of a prior unrecorded conveyance, then the subsequent purchaser is NOT A BFP.

One who purports to take property as an heir, devisee, or donee cannot be a BFP (because they have not given anything out-of-pocket).

EXCEPTION: Anyone (even heirs, donees or devisees) can shelter under the rights of a BFP.
Recording Statutes: Judgment Creditors
Judgment creditors are usually not protected by the recording statutes.
Role of Inquiry Notice in a Title Search
1st RULE: Where a reading of the deeds on record discloses an unrecorded transaction, then the subsequent purchaser has to make inquiry in order to take without notice and qualify as a BFP.

2nd RULE: To qualify as a BFP without INQUIRY notice, the subsequent purchaser must make a physical inspection of the property--and must investigate any unexplained possessions or any unexplained uses of the property.
MORTGAGE
A mortgage is given by the Debtor (MORTGAGOR) to the Creditor (MORTGAGEE).

If the loan is not paid in full, the sheriff sells the land at a court-ordered foreclosure sale.

NOTE: an absolute deed with separate promise of re-conveyance is an equitable mortgage. A sale leaseback with option to repurchase is also an equitable mortgage.
Mortgages: Debtor's Right of Redemption
At any time--right up until the moment of the foreclosure sale--the Debtor can redeem the property by paying the amount that is due and payable--the amount in ARREARS--(plus interest)--UNLESS the mortgage includes an "acceleration clause."

If the mortgage includes an ACCELERATION CLAUSE, the Debtor must pay off the ENTIRE BALANCE of the mortgage in order to redeem the property.
Priorities on Payment of Multiple Mortgages
Where there are multiple mortgages on a single property, PRIORITY is allocated based on the common law rule of "first in time, first in right" UNLESS that order is changed by the terms of the applicable recording statute.

Therefore, if a mortgage was not recorded--or was recorded too late--you may have to apply the terms of the applicable recording statute to determine how to allocate priorities among multiple mortgages.

A SENIOR mortgage may agree to subordinate to a JUNIOR mortgage (a mortgage that comes later in time).

A Purchase Money Mortgage (PPM) receives priority over any other mortgages executed at about the same time--even if the other mortgages are recorded first.
Foreclosure and Junior Mortgages
Foreclosure wipes out ALL junior interests (those interests that came later)--BUT foreclosure does not wipe out senior interests (those interest that came earlier in time from the mortgagor who is bringing the foreclosure action). Senior interests just continue in place; the buyer will take the property subject to the senior interest.
Payment of Proceeds from a Foreclosure Sale
IN ORDER:

1. Pay the cost of the foreclosure (to the trustee, the lawyer, etc.)

2. Pay off the mortgage that was foreclosed upon.

3. Pay off the junior interests--in order of priority.

4. Pay any remaining balance to mortgagor/homeowner/borrower.

If the foreclosure sale DOES NOT raise sufficient funds to pay off the mortgage, the creditor can sue the mortgagor/debtor personally for the balance due.
Forfeiture Clause
In a forfeiture clause, if a debtor misses a payment, the seller can cancel the K, keep all the monies paid to date, and retake the property.

Forfeiture clauses are ENFORCEABLE; however, if the seller elects to enforce the forfeiture clause, the seller is limited to that remedy and cannot obtain any other damages.
Mortgagor's Transfer of the Property
Whenever the Grantor transfers title to the property, the Grantee AUTOMATICALLY takes the property SUBJECT TO the mortgage.

Remember--the mortgage still has to be paid or the mortgagee will foreclose on the property. But the grantee will not be personally liable on the mortgage unless the grantee specifically ASSUMES the mortgage.

A mortgagee can freely TRANSFER the loan/note and the mortgage will always follow the note it secures.
Due-on-sale clauses
A due-on-sale clause says that if the Mortgagor transfers the property without the Mortgagee's consent, the BALANCE of the loan becomes immediately due and payable.

These clauses are ENFORCEABLE.
Security Interest in Fixtures
A seller of a fixture who provides a purchase money security interest in the chattel must make a UCC Article 9 fixture filing within 20 days after attachment (installation). IF they do so, they may remove the fixture.
LATERAL SUPPORT of a property
A landowner has the right to have her land supported by adjoining landowners and strict liability results if the land is not supported.

EX: In a case where improvements to a landowner's land causes something to collapse on the neighbor's land, a landowner is strictly liable for improvements ONLY IF the land would have collapsed anyway, even without the weight of the improvements (even if the land would have collapsed anyway, even without any structures on it).
SUBJACENT SUPPORT of a property
Surface owners have the right to have their land supported from the bottom and strict liability will result if the land is not supported.

This right extends to the land AND to those improvements that were existing on the land as of the date the mineral rights were severed from the fee simple.
RIVERS & LAKES: Riparian Rights (MAJ)
RIPARIAN refers to those whose property borders on a lake or stream.

General RULE--DOMESTIC USE: A riparian owner may use all the water needed for domestic purposes.

General RULE--NON-DOMESTIC USE: Riparian owners are limited to a REASONABLE use for non-domestic purposes.
RIVERS & LAKES: Prior Appropriation (minority view)
The first person who makes beneficial use of water from a lake or stream has that right protected against those who come later, so long as the use continues.

"First in time takes!"
Underground Water (percolating water or well water)
Landowner is entitled to REASONABLE use of groundwater, although the landowner must use it on the property and NOT export it elsewhere.
SURFACE WATER
NO MAJORITY RULE! -- two competing approaches:

NATURAL FLOW APPROACH: requires a landowner NOT to make any changes at all in the flow of the flooodwater as it rushes across the surface of the land (modern courts allow a landowner to take REASONABLE means to deal with surface waters).

COMMON ENEMY APPROACH: Landowner can do ANYTHING he wants with floodwater--whether reasonable or not.