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586 Cards in this Set
- Front
- Back
- 3rd side (hint)
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KEY w/ Estates
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RIGHT of Possession - an estate always has one
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Fee Simple Absolute
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a
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Runs forever and is fully alienable
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b
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Courts presume a fee simple unless language shows a CLEAR intent otherwise
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c
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ALL restraints on alienation are void (ignore them), however a condition on the exercise of a fee simple is fine
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-
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Ex: O to A, but if A tries to sell it to B (void); but, O to A, but if A allows B on it to C (fine)
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d
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A right of first refusal is OKAY
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Life Estate
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NEVER measured by time, but always by life
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- Could be created by implication, don't need any "magic" words
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Forfeiture restrictions are OKAY - does not violate the rule against alienation
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Life Estate pur autre vie
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Measuring life is someone other than the life estate holder
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-
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If the life tenant dies before the measuring life dies, the life estate passes to the estate of the life tenant until the measuring life dies
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Rights and Duties of the Life Tenant
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General rule - all life tenant CAN do is maintain the estate - means continuing the normal use of the land in its present condition
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If they do MORE or LESS than maintain they are guilty of waste: voluntary; permissive; ameliorative
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Voluntary Waste
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a
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Def - Any affirmative action beyond the right of maintenance causing HARM to the premises (i.e. - cutting down shade trees; selling oil)
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b
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Can only continue the normal use, any change of use is voluntary waste and the life tenant is liable to the holder of the future interest
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c
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Sale of crops is NOT waste
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Open Mines Doctrine
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Depletion of natural resources is waste unless the normal use of the land was to deplete them
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Permissive Waste
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Def - failing to maintain (really talking about inaction)
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Must do 3 things to avoid permissive waste:
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1
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Repair - life tenant must keep the property in repair w/ ORDINARY repairs, and NOT replacement
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2
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Taxes - life tenant pays ALL the taxes - still the future interest must make sure they are paid or he loses his interest at a tax sale
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3
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Interest - life tenant is only responsible for the interest on a mortgage (future interest is responsible for the principal)
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Permissive Waste: Liability of Life tenant
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a
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Obligation is limited to the amt of income received from the land OR if the life tenant is personally using the property, the reasonable rental value of the land
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b
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No need to insure the property
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Ameliorative Waste
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Def - type of voluntary waste that occurs when the affirmative act alters the property substantially, but INCREASES the value of it
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Rule - if changed conditions have made the property relatively worthless in its current use, the life tenant can tear it down w/o liability to the holder of the future interest
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Class Gifts
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Def - gifts to a class of UNNAMED persons
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Rules:
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1
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Members of the class who predecease the testator are eliminated and do not recover; their gift LAPSES
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2
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Once the class is established, when the will is executed, the class stays open to accommodate those who later meet the definition of a class member
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3
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Rule of Convenience - class closes when any one of the class is entitled to a DISTRIBUTION
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- This rule does not apply if the grantor specifies otherwise
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FUTURE INTERESTS
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Future interests
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This means future possession. The interest exists NOW, but possession will not come until later, if at all
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Future Interests Retained by GRANTOR
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Def - grantor gives LESS than the full interest he held --> these are NEVER subject to RAP
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1
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Reversion
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2
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Possibility of Reverter
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3
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Right of Entry
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Future Interests Given a Grantee
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1
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Remainder
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2
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Executory interest
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Reversion
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Def - the interest kept by the grantor when he gives LESS than the durational estate the grantor had
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a
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There is a reversion as long as there is a chance it will return to the grantor - it is not certain to send it back to the grantor
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b
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NEVER subject to RAP
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c
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Can be transferred freely
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Possibility of Reverter
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Def - whenever grantor gives a fee simple determinable he keeps this
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a
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NEVER subject to RAP
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b
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Can be transferred freely
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Fee Simple Determinable
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Def - ends automatically when the condition happens
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Language to look for:
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1
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For so long as
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2
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Until
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3
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While
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4
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During
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Right of Entry (Power of Termination)
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Def - whenever grantor gives a fee simple on a condition subsequent he keeps this
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a
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Grantor MUST EXPRESSLY reserve a right of entry
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b
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NOT subject to RAP
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c
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CanNOT be transferred inter vivos in a conveyance - but a transfer by will or by intestacy is okay
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Fee Simple on a Condition Subsequent
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Def - title does not automatically go back to the grantor if the condition is violated, he must exercise the right of entry
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Language to look for:
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1
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Provided however (and gives a right to reenter and retake)
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2
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But if (and gives a right to reenter and retake)
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3
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On condition that (and gives a right to reenter and retake)
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+
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"for the purpose of" - NO effect on title <-- not sufficient
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CATEGORY 2: FUTURE INTERESTS GIVEN A GRANTEE
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Remainder
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Vested remainder - nothing stands in the way of its becoming possessory on the expiration of the estate that comes before it (we know who will take and there are no conditions to taking)
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Vested remainder subject to open - remainder interest is to a class whose members are not yet fully known - the class remains open to allow for future persons to qualify (aka vested remainder subject to partial divestment)
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Contingent remainder - something has to happen before the remainder can become possessory: (1) a condition; (2) grantee is not in existence; (3) identity of exact taker is unknown (A's widow)
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Executory Interest
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Operates to cut short the estate the comes before it; it does NOT come into possession at the natural expiration of the earlier estate
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If a future interest in a grantee is not a remainder - it MUST be an EI
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If a future interest in a grantee CUTS SHORT an earlier estate, it MUST be an EI
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Holder of EI can NOT sue life tenant for waste
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Springing EI
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take title from the grantor and give it another grantee
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Shifting EI
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take title from one grantee and give it to another grantee
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RULE AGAINST PERPETUITIES
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What estates does it apply to?
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1
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Contingent remainders
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2
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Executory interests
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3
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Vested remainders subject to open
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Rule
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If there is ANY chance than an interest might vest outside of a life-in-being + 21 years --> that interest is void. ("No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.")
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Timing
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The validity of the grant is determined at the time of creation and it doesn't matter if the interest actually DOES vest within the time period for RAP
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Perpetuity Saving Clause
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Saves a grant from being voided by RAP by making sure vesting MUST occur within the time period of the rule
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Options and Rights of First Refusal
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DO violate RAP - if they could be exercised outside the time period
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Charity to Charity Exception
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RAP never violated if the gift over is from one charity to another charity
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Class Gifts
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Watch for facts where the class is open and the gift is contingent on a class member reaching a certain age
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ANYONE, regardless of age, can get knocked up and have a kid
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If RAP voids the gift to ANY member of the class then ALL members of the class lose EVEN THOSE who have already satisfied the condition
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The Unborn Spouse
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Watch for a gift following a widow or widower's LE, where the gift cannot vest until the widow/widower dies
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Ex) O to A for life, then to A's widow for life, then to A's children who are then living. At the time of A's grant - the woman who will turn out to be A's widow may not be born yet, so the vesting to A's descendents COULD come outside the time period. Does not make any difference whether A is married at the time of the grant.
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Remember - the grant must be written in such a way so that the vesting cannot occur until the widow/widower dies
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If the transfer is by WILL - look at the situation as of the time of T's death. If by DEED - look at situation at time of DEED.
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Concurrent Ownership
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Introduction
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There are 2 types of concurrent ownership:
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1
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Joint Tenancies
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2
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Tenancies in Common
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Joint Tenancy
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Two characteristics:
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1
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Right of Survivorship
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If there are four joint tenants, each tenant owns an undivided 1/4 interest in the property. If one of the tenants dies, then the other three tenants then own an undivided 1/3 interest…and so on. The surviving tenants take automatically…NOT by inheritance.
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2
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Right to Partition
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Any party can ask for a partition, but in so doing, lines are drawn and the tenant requesting the partition is no longer a tenant
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Creating a Joint Tenancy
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Requires the 4 unities of (TTIP):
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1
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Time (all interests must vest at the same time)
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2
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Title (the grant to all JTs must be by the same instrument)
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3
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Interest (all JTs must take the same kind and same amount)
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4
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Possession (all JTs must have identical rights of possession)
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Language needed to create a JT:
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Must clearly make intention known (in not clear, court will deem TIC)
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Necessary language for exam: "as joint tenants with right of survivorship" or "in joint tenancy with right of survivorship" NOT "To Michael and Persis jointly" or "To Michael and Persis as joint owners"
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Destruction of a Joint Tenancy
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2 ways to destroy a JT:
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1
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Partition (a voluntary destruction),
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2
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Severance (an involuntary destruction)
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Severance
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4 ways to sever a JT:
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1
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A conveyance by one of the JTs
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One JT's transfer of his interest creates a severance that severs just the sellers JT, turning it into a TIC in the buyer, with the other JTs continuing to hold their interests in the JT
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- Does NOT destroy it when the JTs act in concurrence
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2
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A mortgage in a title theory state
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Lien theory state - NO severance
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Title theory state - there IS severance
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Note: If no indication…assume lien theory state
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3
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A contract of sale
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Doctrine of Equitable Conversion means severance occurs when a K of sale is signed
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4
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A creditor's sale of the interest in the JT
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A creditor's judgment lien is NOT enough…there must be an actual judicial sale
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Tenancies-in-Common
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Two characteristics:
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1
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Right to Partition
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2
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NO right of Survivorship
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Notes:
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All tenants in common must have equal rights of possession
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TIC is the default tenancy
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Allocating Rights & Duties Between Co-Tenants
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1
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Possession - each co-tenant has the right to possess all the property consistent with the other co-tenants' right to also possess it all
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2
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Accountability - requirements that one co-tenant may have to account to another for a share of the profits the co-tenant received
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Getting an accounting means getting a share of the profits from a co-tenant
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General Rule - One co-tenant does NOT have to account to another co-tenant for a share of the profits
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Exceptions to the general rule:
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1
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Ouster of one co-tenant
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2
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Agreement to share
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3
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Lease of the property by co-tenant to a 3rd party
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4
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Depletion of Natural Resources
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3
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Contribution (a co-tenant MUST contribute $ to pay for necessary repairs, mortgage payments, and taxes…NOT improvements)
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Non-Freehold (Landlord / Tenant) Estates
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4 types of Non-Freehold Estates
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1
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Tenancy for Years
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2
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Periodic Tenancy
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3
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Tenancy at Will
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4
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Tenancy at Sufferance
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Tenancy for Years
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ANY estate measured by a fixed or specific period of time…no matter how short (does NOT have to be for years)
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Any tenancy for over one year must be in writing
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Periodic Tenancy
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Key word is repeating - an ongoing, continuing, repetitive estate, until one party gives valid notice (e.g. month-to-month, week-to-week, year-to-year)
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Three ways to create:
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1
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Express agreement
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2
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Implication (where lease is silent as to duration)
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Note: if lease does not specify how long it is to last, then it is presumed to be a periodic tenancy measured by the rent payment
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3
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Operation of Law
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2 situations:
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a.
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Oral lease violating the statute of frauds - acceptance of rent by LL creates a periodic tenancy by operation of law, even though the lease itself violates the SOF
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b.
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Hold-Over Tenant - if the tenant send the LL a check for another period's rent, and the LL accepts it, there is a new periodic tenancy by operation of law
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Termination of a Periodic Tenancy
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Occurs by giving proper notice
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2 requirements for proper notice:
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1
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Time (equal to the period UNLESS year-to-year…then 6 months notice required)
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2
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The right effective day of termination (must be the last day of the period)
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Tenancy at Will
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Either party can terminate at any time…without notice
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5 ways to terminate:
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1
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Death of either party
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2
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Waste by the tenant
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3
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Assignment by the tenant
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4
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Transfer of title by landlord
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5
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Lease by landlord to someone else
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Tenancy at Sufferance
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At the LL's option, he can either
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1
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Hold tenant as a wrongdoing trespasser and sue to throw tenant off the property and recover damages, OR
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2
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Impose a new periodic tenancy on tenant
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If the LL elects to impose a new periodic tenancy on tenant:
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1
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If residential - the new period will always be month-to-month
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2
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If commercial - the new period is determined as follows:
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a.
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if the old expired tenancy was for less than a year, new tenancy is the same as the old tenancy
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b.
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if the old tenancy was for a year or more, the new tenancy is year-to-year
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-
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LL cannot impose a new tenancy on a holdover tenant if it is not reasonable
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Raised Rent Situation - if LL tells tenant before expiration of lease, and tenant holds over after expiration, LL can impose the new periodic tenancy on the tenant at the higher rent
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Duties of LL and Tenant
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Tenant's Duties
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If lease is SILENT, T must (1) pay rent and (2) not commit waste
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If lease says T must repair and maintain - T is liable for ALL damage to the ppty, regardless of cause (except where the LL caused damage). This includes ordinary wear and tear unless specifically excluded. So if the house is burned down by arson or lightening --> T must repair
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TEXAS ONLY - T can terminate the lease if premises are rendered totally untenable
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LL's Remedies
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If T fails to pay rent - LL can sue BOTH for damages and to throw T off ppty
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-
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If T unjustifiably abandons ppty - LL has 2 choices:
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1
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Treat abandonment as an offer of surrender of leasehold and accept the offer by retaking the premises; thus ending Ts liability as of that date
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2
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Re-rent the premises on T's account and hold T liable for any deficiency
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LL's Duties
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1
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To give T possession of the premises when lease begins
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2
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To deliver residential premises in a habitable condition. There is an implied warranty of habitability in RESIDENTIAL ppty. If LL breaches this warranty - T can (1) move out and end the lease or (2) stay and sue for damages
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TEXAS ONLY - NO implied warranty of habitability in Texas. There is a statutory rqmt that LLs repair conditions that materially affect the physical health or safety of an ordinary T. T can move out, stay and repair and deduct the cost, or sue LL. For commercial leases - there is an implied warranty of suitability covering latent defects
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3
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Implied covenant of quiet enjoyment - the LL can breach this by: (1) Total eviction (which ends the terminates the lease); (2) By partial eviction (which does not terminate the lease but DOES stop the T's obligation to pay rent. If partial eviction is by person NOT LL - T's rent is apportioned); or (3) by constructive eviction (this is where the LL fails to provide a service it is supposed to provide that is a substantial interference with the covenant of quiet enjoyment and the T abandons the ppty within a rzbl time)
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ASSIGNMENTS AND SUBLEASES
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Assignment
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Definition - Where T transfers EVERYTHING
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-
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LL sues T: To determine if successive Ts on a lease are liable to LL you have to see whether there is privity of estate (POE) or privity of K (POK)
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-
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T is liable to LL if there is either POE or POK
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POE = exists btw present LL and present T
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POK = exists where there is an agmt btw the parties or where the assignee "expressly assumes" the obligations under the lease
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In addition to rent - other covenants will run with the land IF they touch and concern the land --> if the performance of covenant makes the land more valuable or more useful - then it runs with the land
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-
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T sues LL: Can T sue the original LL when the LL sells to a successor?
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Rule - Original LL continues to be liable to T b/c of POK
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-
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Rule - Successor LL is also liable, provided lease covenant runs with the land AND there is either POK or POE
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Sublease
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Definition - Where T transfers a PORTION of the lease
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Rule - Sublessee is NOT liable to LL b/c no POE and no POK
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Texas
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TEXAS ONLY - There is NO right to assign or sublet UNLESS the LL gives PERMISSION
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Non-Assignment and Non-Sublease Clauses
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Valid and enforceable? YES, violation of such a clause makes the attempted transfer VOIDABLE at the option of the LL. If LL does nothing - nothing happens
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What is the effect of LL's giving permission for an assignment? The clause is WAIVED for ALL TIME, unless L states otherwise at the time of giving permission. Acceptance of rent by LL gives permission for a transfer.
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CONDEMNATION
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Partial taking
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Does not release T from obligation to pay full rent - BUT T gets an amount = to the rent that will have to be paid over the remainder of the lease for the ppty taken
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Full taking
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Extinguishes the lease and T is excused from paying rent. T shares in the condemnation award ONLY to the extent that the fair rental value of the lease exceeds the rent due under the lease
|
|
|
|
|
LL's TORT LIABILITY
|
|
|
General rule
|
|
NO duty of LL to T or to T's invitees for injuries on the premises during the life of lease
|
|
|
Exceptions
|
1
|
Latent defects - L is under a duty to disclose latent defects (defect which T does not know of and a rzbl person in Ts position would not discover) which L either knows or hrtk of
|
|
|
|
2
|
Short term lease of a furnished dwelling - L is liable for defects even if L neither knows nor has reason to know of them (3 months or less) (Ex: furn cottage)
|
|
|
|
3
|
Common areas under LL's control - If injury is in an area subject to LL's control then L is liable if L failed to use rzbl care (Hallways etc.)
|
|
|
|
4
|
Negligent repairs - LL is liable for injury resulting from LL's repair of a defect in the premises, even if LL used all due care in making the repair
|
|
|
|
|
TEXAS ONLY - b/c the LL has a statutory duty to repair - the LL can be liable in tort if the injured person is in the class of persons protected by the statute
|
|
|
|
5
|
Public use exception - L is liable for injury from defects in the premises if (1) LL must know or should know of major defects; (2) LL must know or should know that T will not fix the defect; and (3) LL must know or should know the public will be using the premises (think about a bar or club)
|
|
|
|
|
TENTANT'S TORT LIABILITY
|
|
|
General rule
|
|
T is ALWAYS liable to 3d party invitees for negligent failure to correct dangerous conditions on the premises, regardless of whether LL may be contractually liable or not (ex: when T calls LL to fix but LL never comes; LL liable too but so are u)
|
|
|
|
|
FIXTURES
|
|
|
Rule
|
|
If the attached item became a fixture - chattel CAN NOT be removed either by seller or tenant
|
|
|
To determine fixture
|
|
Look at whether the one doing the installing INTENDED that the item stay with the real ppty as a fixture?
|
|
|
If no agmt - look at
|
1
|
Degree of attachment
|
|
|
|
2
|
General custom with this item - is it the type of thing that sellers or tenants normally take when they leave?
|
|
|
|
3
|
Degree of harm to the premises on removal
|
|
|
|
4
|
Trade fixtures, which are chattels used in trade or business, are NOT fixtures (always remove)
|
|
|
Washer/dryer
|
|
NEVER fixtures
|
|
|
When can you remove chattel?
|
|
If T can remove the chattel - it must be removed BEFORE the end of the lease
|
|
|
|
|
If Owner removes chattel - it must be removed BEFORE CLOSING
|
|
|
EASEMENTS
|
|
|
|
|
Definition of Easement
|
|
A non-possessory interest in land involving a right of USE <-- use is the key
|
|
|
Types of Easements
|
1
|
Easement appurtenant - when the easement directly benefits the use and enjoyment of a SPECIFIC piece of land
|
|
|
|
|
- Will be 2 pieces of property: (1) servient estate, the burdened property; and (2) dominant estate, the benefited property
|
|
|
|
2
|
Easement in gross - There is no dominant estate (ex: utility easement)
|
|
|
|
There is no implied easement for light or air
|
|
|
|
Ways to create an easement
|
1
|
Express easement
|
|
|
|
2
|
Easement by Implication
|
|
|
|
3
|
Easement by prescription
|
|
|
Express easement
|
a
|
Either the express grant or a reservation of an easement when land is sold to another
|
|
|
|
b
|
- MUST comply with the statutes of frauds** and with all deed formalities - MUST be in writing, signed by the holder of the servient estate and executed like a deed (UNLESS the easement is for 1 year or less)
|
|
|
Easement by implication
|
1
|
Previous use by a common owner, and that use is:
|
|
|
|
a
|
Continuous
|
|
|
|
b
|
Apparent
|
|
|
|
c
|
Reasonably necessary
|
|
|
|
2
|
Absolute right of access - the property is landlocked --> No other way off the property
|
|
|
|
|
- Owner of the servient estate can choose the location of the easement, so long as it is a rznble one
|
|
|
Easement by Prescription
|
|
Similar to adverse possession, requirements:
|
|
|
|
1
|
Use must be adverse to the owner (NO right to use) --> an oral grant of permission will destroy this type of easement
|
|
|
|
2
|
Use must be continuous and uninterrupted for the statutory period
|
|
|
|
|
- Seasonal use may be okay if appropriate circumstances
|
|
|
|
|
- Time is 20 years, but in TEXAS it is 10 years
|
|
|
|
3
|
Use must be either visible and notorious, or with the owner's knowledge
|
|
|
|
4
|
Use must be w/out permission
|
|
|
Transfer of the Easement Benefit
|
1
|
Easement appurtenant - goes automatically with the dominant estate, whether mentioned or not in the conveyance, and cannot be transferred separately from the dominant estate
|
|
|
|
2
|
Easement in gross - if commercial, can always be transferred; if personal, can NOT be transferred
|
|
|
|
|
- TEXAS --> cannot transfer an easement in gross, unless the language of the easement says so, except for conservation easements
|
|
|
Transfer of the Easement Burden
|
|
ALWAYS binding on the subsequent holders of servient estates, even if the easement is not in the deed, providing the subsequent holder had NOTICE of the easement
|
|
|
Use of Easements
|
|
Terms of the easement control, but if the easement is silent:
|
|
|
|
1
|
It is presumed that the easement is PERPETUAL
|
|
|
|
2
|
The use presumed is that of rznble development of the dominant estate --> the kind of use that would have been contemplated by the parties WHEN the easement was created
|
|
|
|
-
|
Use to benefit property not the dominant estate is excessive use
|
|
|
Repair of Easements**
|
a
|
Holder MUST keep the easement in repair and can always go to the servient estate to repair it, even if that right is not specifically provided
|
|
|
|
b
|
Holder must make rznble restoration of servient estate after repairs
|
|
|
|
c
|
Servient estate has NO obligation to make repairs
|
|
|
Termination of Easement
|
1
|
Unity of ownership or merger --> when both the dominant and servient estate come together in the same owner - NEVER revives
|
|
|
|
2
|
Valid release - must comply with SoF and all deed formalities
|
|
|
|
3
|
Abandonment - INTENT to abandon must be manifested by taking some PHYSICAL ACT on the property itself that show the intent to abandon
|
|
|
|
|
- Mere non-use is NOT abandonment, must take action to abandon
|
|
|
|
4
|
Estoppel - 2 elements:
|
|
|
|
|
a) a representation of relinquishment by the holder of the dominant estate
|
|
|
|
|
b) change of position in RELIANCE by the holder of the servient estate
|
|
|
|
5
|
Prescription - owner of the servient estate must stop the use and keep it stopped for the statutory period
|
|
|
|
6
|
End of Necessity - once the necessity that created the easement by necessity ends, so does the easement
|
|
|
License*
|
|
Def - limited privilege of use and NOT a property interest - it is only a K right and is revocable at the will of the licensor
|
|
|
|
|
- The licensor may have to pay K damages for wrongful revocation, but there are no property rights
|
|
|
Tickets
|
-
|
Tickets are always licenses
|
|
|
|
-
|
They give no in rem rights, ONLY K rights
|
|
|
|
-
|
Can always be revoked, but K damages may be imposed
|
|
|
Irrevocable License Easement by Estoppel
|
|
Def - License plus money spent on property furthering the license
|
|
|
|
1
|
Anytime an easement is attempted but fails due to the SoF, there is a license
|
|
|
|
2
|
If money is spent on the property in furtherance of that oral license, the license becomes irrevocable and is just as good as an easement, and can be enforced under principles of estoppel
|
|
|
Profits
|
|
Def - gives the right to go onto land and take a natural resource away
|
|
|
|
-
|
Along with a profit goes an implied easement to go on to the land to get the resource and take it away
|
|
|
|
-
|
Use easement rules
|
|
|
RESTRICTIVE COVENANTS
|
|
|
|
|
Restrictive Covenants
|
|
Def - gives the right to restrict someone else's use of their land, 2 types
|
|
|
|
1
|
Covenants running with the land at law - if P wants money damages
|
|
|
|
2
|
Equitable servitude (Negative easement) - if P wants an injunction
|
|
|
Covenant at law: Requirements
|
1
|
Intent that it run with the land
|
|
|
|
2
|
Notice to the person against whom enforcement is sought
|
|
|
|
3
|
The covenant must touch and concern the land (must make it more valuable or useful) i.e. - covenant not to compete touches and concerns the land
|
|
|
|
4
|
Privity - conveyance of the property from one party to another --> See below to figure out what privity is required
|
|
|
Covenant at law: Types of Privity
|
1
|
Horizontal privity - ALWAYS refers to the original parties to the covenant
|
|
|
|
-
|
For horizontal privity you must have a conveyance of the property between the original parties
|
|
|
|
2
|
Vertical privity - refers to those who subsequently obtain the property subject to the covenant (called the successor in interest) and the original party from whom they got the property
|
|
|
|
-
|
The successor in interest MUST take the FULL estate of the one up the line
|
|
|
Covenant at law: Process for privity
|
1
|
Find the successor in interest
|
|
|
|
2a
|
If the successor in interest is the D, then someone is trying to have the BURDEN of the covenant run to that successor
|
|
|
|
2b
|
If the successor in interest is the P, then that person is trying to have the BENEFIT of the covenant run to them
|
|
|
Covenant at law: Burden running to a successor?
|
|
MUST have BOTH horizontal and vertical privity
|
|
|
|
|
Ex: A owns 2 lots, sells 1 to B. B then sells to C <-- there is both kinds of privity here
|
|
|
Covenant at law: Benefit running to a successor?
|
|
Need ONLY vertical privity
|
|
|
|
|
|
|
|
|
|
|
|
|
Covenant at law: both parties are successors?
|
|
Will need both horizontal and vertical, but you CANNOT have that, so they are unenforceable at law
|
|
|
Equitable Servitude: Requirements
|
1
|
Intent that the restriction be enforceable by successors in interest
|
|
|
|
2
|
Notice to the subsequent purchaser
|
|
|
|
3
|
The restriction must touch and concern the land
|
|
|
|
-
|
Do NOT need privity
|
|
|
Equitable Servitude in subdivisions
|
|
Also called Reciprocal Negative Servitudes, Need:
|
|
|
|
1
|
Intent to create a servitude on ALL the land in the subdivision (may be found in the common building plan)
|
|
|
|
2
|
Notice
|
|
|
|
a
|
Actual notice
|
|
|
|
b
|
Record notice where the restriction is in the DIRECT chain of title
|
|
|
|
c
|
Inquiry notice - held to know anything a rznble inquiry might have revealed
|
|
|
Likely Follow up Question - City Park
|
|
If a recorded subdivision plan has land marked as city parkland and if that can be construed as a dedication of the land to the city for a park, then the city can enforce it
|
|
|
Equitable Servitude: Defenses to Enforcement
|
1
|
Unclean hands defense - P did the same thing
|
|
|
|
2
|
Acquiescence - let someone else do the same thing
|
|
|
|
3
|
Laches - too late
|
|
|
|
4
|
Estoppel - P said earlier that he did not mind
|
|
|
Termination of Restrictive Covenants
|
|
Can always be done by release or unity of ownership, but look for termination by changed conditions
|
|
|
|
|
All or nothing - cannot void a restriction based on changed conditions in the area, UNLESS ALL lots in the subdivision are affected
|
|
|
ADVERSE POSSESSION
|
|
|
|
|
Elements for Adverse Possession
|
|
Question - when does X's being on the land constitute adverse possession, so that title is obtained, and when it is merely a trespass?
|
|
|
|
H
|
Hostility - being on the property with no right to be there
|
|
|
|
E
|
Exclusivity - X must be excluding others from possessing the property
|
|
|
|
L
|
Lasting - 20 years, unless told otherwise
|
|
|
|
U
|
Uninterrupted - the kind of continuous use an owner would make
|
|
|
|
V
|
Visible - out in the open
|
|
|
|
A
|
Actual - must actually possess, unless you have constructive adverse possession or lease the land you don't own
|
|
|
2 things NOT required
|
1
|
Owner does not have to know that X is on the land
|
|
|
|
2
|
X does not need to think he owns (has a claim of right) the property
|
|
|
AP: Lasting in Texas
|
1
|
Possessor is under a color of title and has only narrow specified defects in title = 3 years (very hard to satisfy)
|
|
|
|
2
|
Possessor is there under a color of title and pays all taxes = 5 years
|
|
|
|
3
|
Possessor is just in bare possession of property with no color of title = 10 years, but possession is limited to 160 acres, unless fenced
|
|
|
|
4
|
Possessor paid the taxes for the entire period, was on the property under a color of title, and true owner was under a disability = 25 years
|
|
|
Constructive Adverse Possession
|
|
If X goes on property under a color of title (bad title) to a larger tract, but only actually possesses a PART of the larger unit, constructive AP can give title to the rest of the property if:
|
|
|
|
1
|
The amt actually possessed bears a rznble relation to the whole AND
|
|
|
|
2
|
The property must be UNITARY - a seamless whole
|
|
|
Leasing and Adverse Possession
|
-
|
Leasing qualifies as possessing it for AP purposes
|
|
|
|
-
|
When you lease land you don't own you are running the period for AP
|
|
|
Adverse Possession against Concurrent Owners
|
a
|
Can occur only when the possessor EXCLUDES the other co-tenants from possession and the statute runs
|
|
|
|
b
|
Exclusion is what starts the clock, not the absence of the other co-tenant
|
|
|
Future Interests and AP
|
1
|
Life estate plus future interest - clock does not start to run against the holder of a future interest, until the interest becomes posessory (life tenant dies)
|
|
|
|
|
- Adverse possessor can only possess what the owner had
|
|
|
|
2
|
Fee simple determinable - the happening of the condition starts the clock running
|
|
|
|
3
|
Fee simple on a condition subsequent - clock won't start until the grantor exercises the right of entry
|
|
|
AP: Tacking
|
-
|
Can tack periods of adverse possession, but they must pass DIRECTLY from one adverse possessor to another (NO GAPS)
|
|
|
|
-
|
Can also tack periods of true ownership
|
|
|
AP: Disability
|
|
Being a minor, being insane or being in jail
|
|
|
|
a
|
if the owner is under a disability AT the TIME the AP begins, the AP clock does not start ticking until O is free of that disability
|
|
|
|
b
|
If the disability arises after the AP begins, it's an intervening disability, and is ignored
|
|
|
|
c
|
NO tacking of disabilities
|
|
|
|
-
|
TEXAS - maximum tolling is 25 years for a disability
|
|
|
AP: Other
|
-
|
NO AP against governmental land
|
|
|
|
-
|
Titles acquired by AP are NOT marketable - title may be good, but you have to have the court declare that it is marketable
|
|
|
CONVEYANCING
|
|
|
|
|
Introduction
|
|
Conveyancing is a two-step process:
|
|
|
|
1
|
Contract of sale,
|
|
|
|
2
|
Deed (at closing)
|
|
|
Contract of Sale
|
|
Contract is governed by all regular contract rules, plus these 4:
|
|
|
|
1
|
Statute of Frauds
|
|
|
|
-
|
Any signed writing will do, provided it includes:
|
|
|
|
a.
|
A description of the property,
|
|
|
|
b.
|
The names of the parties,
|
|
|
|
c.
|
The price
|
|
|
|
|
|
|
|
|
|
Exception to SOF: Part Performance
|
|
|
|
-
|
An oral contract will suffice IF:
|
|
|
|
a.
|
The oral contract is certain and clear, and
|
|
|
|
b.
|
The acts of part performance must clearly prove up a contract
|
|
|
|
|
Note: Look for a claimant with possession AND (1) paying full purchase price (or close to it), OR (2) erecting improvements
|
|
|
|
|
|
|
|
|
2
|
Legal Effect of the Contract Between Time of Signing K and Closing
|
|
|
|
|
Four issues:
|
|
|
|
a.
|
Risk of loss - after signing the K of sale, risk of loss is on the buyer UNLESS the seller is at fault
|
|
|
|
|
Note: Texas rule - risk of loss is on the person with possession at the time of loss
|
|
|
|
|
|
|
|
|
b.
|
Death of a Party Before Closing - does NOT effect the terms of the K
|
|
|
|
|
|
|
|
|
c.
|
Marketable Title - every land sale K has implied warranty of marketable title (this is not perfect title)
|
|
|
|
-
|
Seller must give the buyer 3 things:
|
|
|
|
i
|
Proof of title
|
|
|
|
ii
|
Title free of encumbrances
|
|
|
|
iii
|
Valid legal title on the day of closing
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
-
|
The existence of a valid option to purchase is an encumbrance making it unmarketable
|
|
|
|
-
|
Zoning is NOT an encumbrance UNLESS the property is in violation of the ordinance
|
|
|
|
-
|
Violation of a housing or building code is NOT an encumbrance
|
|
|
|
-
|
A mortgage on the property is NOT an encumbrance if the mortgage is to be satisfied out of the proceeds of the sale
|
|
|
|
|
|
|
|
|
|
Remedies of buyer if seller's title is unmarketable:
|
|
|
|
|
Buyer must first give notice to seller and a rzble time to cure…if seller does not cure, then buyer has the following 3 remedies:
|
|
|
|
i
|
Rescission
|
|
|
|
ii
|
Damages
|
|
|
|
iii
|
Specific performance
|
|
|
|
|
|
|
|
|
|
Note: If Buyer goes to closing and accepts the deed without the problems being cured, then no recourse against the seller based on the K
|
|
|
|
|
|
|
|
|
d.
|
Time of Performance
|
|
|
|
-
|
Presumption - time is NOT of the essence and the closing may be extended for a rzbl time (2 months is rzbl)
|
|
|
|
-
|
Note: If the K provides that time is of the essence, then the party who fails to perform on time may not enforce the K
|
|
|
Remedies for Breach of Sales Contract
|
1
|
Damages
|
|
|
|
-
|
measure is the difference between K price and value of the land at time of breach
|
|
|
|
-
|
Buyer's deposit can be forfeited as liquidated damages as long as it is not more than 10% of sales price
|
|
|
|
|
|
|
|
|
2
|
Specific Performance
|
|
|
|
-
|
always available to both seller and buyer
|
|
|
Defects on the Property
|
|
General Rule - buyer cannot recover
|
|
|
|
|
2 exceptions:
|
|
|
|
1
|
Seller must disclose serious defects that seller knows of and are not obvious to buyer
|
|
|
|
2
|
There is an implied warranty of fitness or merchantability for new homes sold by a builder-seller
|
|
|
Deed
|
|
Rule - once the deed is accepted, the contract for sale merges into the deed and is destroyed
|
|
|
|
|
|
|
|
|
|
2 requirements for passage of legal title from seller to buyer:
|
|
|
|
1
|
Execution
|
|
|
|
2
|
Delivery
|
|
|
Execution of Deed
|
-
|
Deed MUST be signed by the seller
|
|
|
|
-
|
Description of the land need NOT be very specific (must be able to identify the property) (a minor discrepancy is okay if land can still be identified)
|
|
|
|
-
|
A land description by metes and bounds ALWAYS controls over any other form of description
|
|
|
Delivery of Deed
|
-
|
Does NOT always mean physical transfer…intent is what matters
|
|
|
|
-
|
Recording of the deed raises a presumption of delivery
|
|
|
|
-
|
Once delivery occurs, title passes, and later returning deed to grantor or destroying deed has NO effect
|
|
|
|
-
|
Any evidence may be used to show seller's intent to deliver deed
|
|
|
|
-
|
If grantor dies and still has possession of deed, there is a presumption of NO delivery
|
|
|
|
|
|
|
|
|
|
Conditional Delivery
|
|
|
|
1
|
Condition is in Deed
|
|
|
|
-
|
If deed says it will not become effective until death of grantor, this is a valid delivery of a future interest
|
|
|
|
|
|
|
|
|
2
|
Oral Condition
|
|
|
|
-
|
If the condition is made orally at the time of delivery of the deed, disregard the oral condition
|
|
|
|
|
|
|
|
|
3
|
Making delivery conditional on grantee paying purchase price
|
|
|
|
-
|
This is valid IF grantor makes delivery to a 3rd party in escrow with instructions to deliver deed to grantee when condition is satisfied (oral instructions okay)
|
|
|
|
-
|
Once deed is given to escrow agent, grantor cannot get the deed back
|
|
|
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-
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Acceptance of deed by grantee is presumed (unless grantee rejects)
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-
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No consideration is needed for a deed (unlike the K of sale)
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Covenants for Title
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Quitclaim deed - seller makes no promises regarding title and buyer gets whatever seller owns
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There are six types of covenants a seller may make and the deeds that go with these covenants are called general warranty deeds
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The 6 covenants are placed into two categories:
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1
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Present covenants
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a.
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Covenant of seisin (seller has title and possession and can convey both)
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b.
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Covenant of right to convey (seller has title and possession and can convey both)
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c.
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Covenant against encumbrances (no easements, restrictive covenants, liens, etc)
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Note: buyer can sue immediately on these covenants, but they do NOT run with the land
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2
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Future Covenants
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a.
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Covenant for quiet enjoyment (seller will protect buyer from anyone who later claims title)
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b.
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Covenant of warranty (seller will protect buyer from anyone who later claims title)
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c.
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Covenant of further assurance (seller promises to do whatever necessary to pass valid title)
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Note: Not breached immediately, but DOES run with the land and can be enforced by any subsequent purchaser
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Damages for Breach of Covenant
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Rule - if there is a breach of warranty, damages are limited to purchase price received by warrantor, plus incidental damages
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-
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Don't fall for an answer that would give plaintiff full recovery
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Estoppel by Deed
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-
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If A deeds property to B that A does not own, and then A does later acquire title, then B will get title because A gave an implied covenant that title would be transferred to B
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-
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BUT, if A transfers to a BFP after getting title, then the original grantee loses and cannot rely on estoppel by deed
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-
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Texas - estoppel by deed is called "after-acquired title"
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Deed to a Dead Person
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Rule - a deed to a dead person is invalid, although enforcement of the contract of sale can still be had by either the seller or the buyer's estate, and a new deed is made to the buyer's estate
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RECORDING OF INTERESTS
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Introduction
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-
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At common law, first in time, first in right
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-
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Recording acts also protect subsequent mortgages
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-
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Recording acts do NOT protect judgment creditors
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-
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Recording a deed is not necessary to make it valid, it is only done to give notice
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-
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In Texas, a deed can be recorded if:
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1
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The signature is notarized, or
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2
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the deed is signed by the grantor and at least 2 witnesses
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Types of Recording Acts
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1
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Notice acts
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2
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Race-Notice acts
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3
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Pure Race acts
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Notice Acts
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-
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Protect subsequent purchasers who are BFPs…those who give value without notice of the earlier transaction
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-
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Recording is irrelevant
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-
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Texas follows this Act
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-
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If the words "without notice" or "in good faith appear without the words "first recorded" or "recorded first," then it is a notice act
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Race-Notice Acts
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Protect subsequent purchasers who are BFPs AND are first to record
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-
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If the words "first recorded" or "recorded first" appear along with "without notice" or "in good faith," then it is a race-notice act
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Pure Race Acts
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Whoever records first wins
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-
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Notice is irrelevant
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-
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If the words "without notice" or "in good faith do not appear, then it is a pure race act
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"for value"
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2 situations
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1
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Bargain Basement Sale - where a subsequent purchaser pays an absurdly low price
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-
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Anything paid out-of-pocket is enough to be considered value
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-
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Exception - $1.00 is NOT enough
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2
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An heir, donee or devisee - these persons are not BFP's b/c they give no value
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Exception:
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Shelter Rule - anyone (even heirs, donees, and devisees) can shelter under the rights of a BFP
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"Without Notice"
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Three types of notice:
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1
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Actual Notice - if subsequent purchaser actually knew about prior unrecorded conveyance, that person loses
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2
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Record Notice - constructive notice that arises from the record…must be recorded in the chain of title
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-
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searcher of records NOT responsible for locating anything recorded before getting title or after transferring title (wild deeds)
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3
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Inquiry Notice - two situations:
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a.
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If a reading of the deeds discloses an unrecorded transaction, the subsequent purchaser must check it out
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b.
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Where subsequent purchaser fails to go out and examine the land and an examination would have shown someone on the land under a prior unrecorded right
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-
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Subsequent purchaser must make inquiry of unexplained possessions or uses
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SECURITY INTERESTS = #1 TOPIC ON BAR
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Definition
|
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A device used to secure a loan on real ppty
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3 Kinds of SI
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1
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Mortgage - given by a debtor (mortgagor) to a creditor (mortgagee). Sheriff sells the land at a court-ordered foreclosure sale if mortgage isn't paid
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-
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There are 2 situations where we treat the instrument as a mortgage
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a
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Absolute deed - with a separate promise of reconveyance situation
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b
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Sale/leaseback with option to re-purchase
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2
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Deed of Trust - given by debtor to a 3d party trustee who holds it until the loan is paid off
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-
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If the loan isn't paid - then trustee may EITHER get the court to order a sale OR the trustee may sell ppty on trustee's own at a public auction
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3
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Installment Land K - debtor signs a K promising to make pmt and seller keeps title until loan is paid off (called a K for Deed in Texas)
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Consequences of having a mortgage OR deed of trust
|
1
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Equity of redemption - at any time up to the fc sale - debtor can redeem the ppty.
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-
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Normally all debtor has to pay is the amount in arrears, BUT if a mortgage has an acceleration clause - debtor has to pay off ENTIRE balance
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-
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Right of redemption can't be waived in the mortgage or DOT - BUT it can be done later if separate consideration given . (An attempt to waive the right of redemption in the SI is known as "clogging the equity of redemption" and is prohibited
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2
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Foreclosure must be by public auction sale
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3
|
If there are multiple mortgages, priorities are first in time, first in right
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-
|
Mortgage priorities may be changed by K
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-
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Purchase money mortgages are given priority over other mortgages executed at the same time, even if the other mortgage recorded first
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-
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Sellers with PMM win over Banks with PMM
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|
-
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If the owner does anything to increase a senior mortgage - then that mortgage LOSES its priority over junior ones BUT only to the extent of the change
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4
|
Foreclosure wipes out all junior interests (including easements or leases) but does NOT wipe out senior interests.
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|
-
|
Protections to holders of junior interests - they have the right to pay off any mortgage being foreclosed in order to keep their junior interests from being wiped out, and thus they are necessary parties to any fc, and if they are NOT made a party to a fc - then their interests are NOT wiped out by it
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-
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Senior interests do NOT get paid off when a later mortgage is fc; they keep right on going. Purchaser at fc sale takes ppty subject to senior interests
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5
|
Use proceeds of fc sale in this order
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a
|
Pay the cost of the fc, including expenses and attorney fees
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|
b
|
Pay the mortgage that was fc, including accrued interest
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c
|
Pay off junior interests, in order
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|
d
|
Anything left goes to mortgagor
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|
6
|
If mortgage is fc and there is not enough money to pay off the mortgage - let mortgagee SUE debtor for balance due
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|
|
TEXAS ONLY --> deficiency jmts are ltd to the difference btw the debt and the FMV of the ppty. On MBE - deficiency jmt are limited to the difference btw the debt and sales price.
|
|
|
Consequences of having an Installment Land K
|
-
|
Look for a forfeiture clause --> if debtor misses a pmt, seller can cancel the K, keep all the money paid to date, and get the ppty back
|
|
|
|
-
|
TEXAS ONLY --> In 2001, several statutory protections were added for buyers
|
|
|
|
1
|
Sellers have to give buyers detailed notice of a prospective forfeiture
|
|
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|
2
|
Buyers have a statutory 60 day period to cure the default
|
|
|
Transfers of SI
|
1
|
Mortgagor can transfer TITLE to ppty and mortgage just tags along and transferee takes SUBJECT to the mortgage
|
|
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|
-
|
Mortgagor continues to be personally liable on the note
|
|
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|
-
|
Unless grantee specifically assumes mortgage, grantee is NOT personally liable on it BUT mortgage still has to be paid or mortgagee will foreclose
|
|
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|
-
|
After mortgagor transfers title to one who "assumes" the mortgage - mortgagor continues to be personally liable on the note as a surety.
|
|
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|
2
|
Mortgagee can freely transfer the note and the mortgage tags along with the note
|
|
|
|
-
|
HDC - A holder in due course is NOT bound by pmts to an old mortgage, not even if the mortgagor knew NOTHING of the transfer
|
|
|
|
-
|
Due on sale clauses (if mortgagor transfers without the mortgagee's consent, the FULL AMOUNT of the loan is immediately due and payable) ARE enforceable
|
|
|
Fixture Filing
|
|
If a fixture filing is NOT made within 20 days of attachment - then the SI in the chattel is subordinate to the earlier mortgage on the real ppty
|
|
|
|
|
SPECIAL RIGHTS
|
|
|
Right of Support
|
1
|
Lateral support - support from the sides. A landowner has the right to land supported by the adjoining landowners, and strict liability results if land is not supported. Adjacent landowner is strictly liable for support of adjacent LAND and IMPROVEMENTS if land would have collapsed anyways - even WITHOUT those buildings on it
|
|
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|
2
|
Subjacent support - support of the surface from the bottom. Strict liability results if surface is not supported.
|
|
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|
-
|
Situation arises when holder of mineral rights removes the minerals and the surface collapses
|
|
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|
-
|
Rule: Holder of mineral right is strictly liable for failure to support the surface of the land
|
|
|
|
-
|
Watch out: Buildings built AFTER mineral rights were severed from surface rights get NO strict liability protection
|
|
|
|
-
|
Watch out: If excavator was negligent --> P can sue under ordinary tort principles
|
|
|
Water Rights
|
|
Rivers and Lakes
|
|
|
|
-
|
Riparian rights - Refers to those whose property borders on a lake or stream. The owner can use all the water needed for DOMESTIC purposes. If NON-DOMESTIC, the owner is limited to rzbl use.
|
|
|
|
-
|
Prior appropriation - first in time takes - ANYONE who makes beneficial use of water has the right to continue to use it, and that right is protected from those who come later, as long as use continues
|
|
|
|
|
Water Under the Ground
|
|
|
|
-
|
A landowner is entitled to rzbl use. Landowner must use it on the ppty and not export it elsewhere.
|
|
|
|
-
|
TEXAS - you can take all the water you want from a well on your ppty, even if you wind up taking all the water from your neighbor's well at the same time (just can't do it maliciously and can't waste the water)
|
|
|
|
|
Surface Water
|
|
|
|
-
|
Natural Flow Approach - courts allow rzbl steps to deal with flood water. Drainage pipes or ditches to divert the flood water are okay. (TX follows this)
|
|
|
|
-
|
Common Enemy Approach - you can do anything with floodwater, rzbl or not
|
|
|
|
|
TEXAS HOMESTEAD RULES
|
|
|
Who can get one?
|
|
Any family
|
|
|
|
|
Any single adult
|
|
|
How?
|
1
|
Intend to have it your HS and
|
|
|
|
2
|
Actually occupy it OR take such acts of preparation that the court can conclude you were about to occupy it
|
|
|
Rural HS
|
-
|
200 acres --> family
|
|
|
|
-
|
100 acres --> single person
|
|
|
|
-
|
Acres do NOT have to be contiguous, but ALL have to be used as HS
|
|
|
Urban HS
|
-
|
Residential OR business
|
|
|
|
-
|
Can be a single lot or lots adding up to no more than 10 acres
|
|
|
|
-
|
If more than one lot --> MUST be contiguous
|
|
|
Debts that can force a sale of HS ppty
|
1
|
Taxes
|
|
|
|
2
|
Loan tied to ppty - those having to do with buying, financing, or improving the ppty, or with equity in the ppty
|
