Property Lecture[1]

Property Day 1 Different planes, Factual Plane, Legal Plane, Public Policy Plane Timeline Dispute, then go to atty, atty looks up rules, complaint/petition filed, complaint served, defendant hired atty, d writes and files answer/response Pierson v. Post -- Case is about “Trespass on the case” The act of unlawfully interfering with someone else’s property. People who are similarly situated should be treated the same. 8/27/03 Similarly situated people should be treated the same. Ratione Soli is about deterring people from trespassing. It gives the land owner constructive possession of anything on their property, thus giving them a property interest in things on their property. Constructive possession is a made up legal term for a public policy implication. Because people do not necessarily have occupancy of things on their property we give them constructive possession. What is property? You have a property interest if the court says you have one! 8/29/03 p.36 Note 1. O prevails v T because of Ratione Soli and because they both claim occupancy but first in time first in right. T prevails v T1 because of similar principles, it does not matter where the animal originally came from. Property rights are relative Sometimes the answer to a question will be it depends on which approach the jurisdiction follows. Note 2 – Animus Revertendei, if an animal comes back to the home on its own then it becomes domesticated and you have obtained property rights. This is good for pubic policy because people who domesticate animals use them for their livelihood. Sometimes even sell leftover stuff. The deer’s reaction is the hunter’s notice that it was domestic. Note 3 – If a wild animal has been captured, when can it become wild again. Becomes wild when it escapes and returns to its natural habitat. The fact that it is out of its natural habitat is notice to others. Once you have a property interest we go to greater lengths to protect it. 9/3/03 Note 4 – Does the govt. own the geese? The answer lies in the reason why you want to know. It owns them in so far as to protect them from being hunted out of season, but it does not own them in regard to being liable for damages. You get the lead time to profit, the lead time of being first. This law that the labor lead time is all you get does not work with Copyright, Patent or Trademark but that is an upper level course. The reason is that we are going to give you more of a lead time because you need more time to recoup your labor costs. Read Moore Case. 9/5/03 A man’s property is limited to the chattels which embody his invention. There is no common law patent protection Bundle of rights – 1. Possession 2. Exclusion 3. Use 4. Transfer READ: Armory, sweat the details of the note materials after Hannah v. Peel, brief each case within the case, what are the rules of law, what is the issue 9/8/03 Armory v. Delamirie – trover a cause of action which seeks money damages for conversion. Trover v. Replevin, Replevin is for return of the goods.  The defense says, it’s not your jewel.  Jus Tertii – the legal right of the third party True owner has title, chimney sweep has possession. We protect possession because otherwise we would have to expend a lot of wasteful energy to maintain paper-trail like receipts. We also want to encourage people to transfer possession. If one person finds something and then loses it and someone else finds it, the rule is that a prior possessor prevails over a subsequent possessor. Property rights are relative. If it is Real Property, Trespass is for money damages and Ejectment is for return of property. Thief cannot transfer good title. What about the jeweler, can he sell it if the owner gave it to the jeweler to fix. One is a voluntary bailment. The bailee/agent can transfer good title. 9/10/03 Is a finder more like a thief or a bailee. -- The courts are split on this issue. Limited purpose doctrine -- To the extent a true owner invites someone onto the property they are limited to the scope of the permission. Anything more is trespass. Land-owner’s expectations, higher expectations on private land than on public land. What is on my land is mine, don’t take it. Read McAvoy, read notes, and what is the common law scheme for deciding who ended up with found property that did not get back to the true owner. Lost v. abandoned v mislaid v tresure. Other axis is Private v. Public. Lost Public – Finder gets it (must come forward with find) Private – Owner gets it (deter trespass, expectation of privacy, get back to true owner) Pub/Pri – Finder gets it ( Mislaid Public – Finder gets it Private – Owner gets it Pub/Pri – Owner gets it Abandoned Public – Finder gets it Private – Owner gets it Pub/Pri – Finder gets it Treasure Public – Finder gets it Private – Owner gets it Public Policy – locate the true owner, reward honest finder, deter trespass, landowner’s expectations, put the item into use. 9/11/03  Misplaced – voluntarily and intentionally relinquish possession and intent to return and reclaim    Lost – Unintentionally relinquish possession Abandoned – Voluntary and intentionally relinquish possession and no intent to return and reclaim Treasure Trove – Common Law says it is money, coin, silver, bullion that was buried. Modern law is any item of value that is hidden. Owner intends to come back and get it. As a general rule we don’t recognize this classification any more, just fit the item into one of the other three categories. Finder has to come forward with the find in order to be awarded the true property. The bulk of American courts don’t recognize the agency rule, an agent acts for him/herself Modern trend, anything found gets turned into the police and if the true owner doesn’t come back the finder gets it. The landowner never knows what is going on. If the landowner knows it was found on his property and can prove that you were trespassing then he gets it. Cause of action, if its personal property and you want it back you sue for replevin. If it is real property you sue for ejectment. Earnings approach -- Adverse possessor must earn the land. We protect the expectations of the person living on the land and working on the land. We reward the possessor. Statute of Limitations approach – Punish the possessor. For adverse possession 1. Actual Entry 2. Exclusive Possession 3. Open and Notorious 4. Adverse/Hostile 5. Claim of Right 6. Continuous for the Statutory Period Open and Notorious if the true owner checks his property. In western states it is also required for the adverse possessor to pay the taxes. 1. Actual Entry a. Earnings – got to enter to put too productive use b. SofL – starts the statue of limitation 2. Exclusive Possession 3. 4. 5. 6. a. Earnings – Regulate access to land as true owner would to build up expectation b. SofL – To identify the adverse possessor Open and Notorious a. Earnings – To build the expectation that it is yours, if you are hiding it is not yours b. SofL – To give constructive notice to True Owner Adverse/Hostile (not subordinate), is it with the true owner’s permission a. Earnings – To build up expectation that it is yours b. SofL – Must be adverse so there is a cause of action Claim of Right (adverse possessor’s state of mind); Objective approach is where the state of mind does not matter; Subjective approach is broken into Good Faith possessor and Bad Faith possessor a. Earnings – Subjective approach; look at adverse possessors state of mind but the jurisdictions are split, the minority of jurisdictions take this approach and the majority of those jurisdictions use the good faith approach b. SofL – Objective approach means that only the actions count THIS IS THE MAJORITY APPROACH Continuous Possession (as a true owner) a. Earnings – To build up your expectation b. SofL – To adequately give constructive notice to the true owner STATUTE OF LIMITATIONS DOES NOT BEGIN UNTIL THEY ARE ALL FULFILLED READ Mannillo p 147 9/17/03 Adverse possession with color of title – If you meet the requirement for adverse possession you get title to the land. If you have bare adverse possession you get title to the amount of land that you actually possess. Under color of title you get title to land you actually possess and that you constructively possess. Color of title – someone gives you an invalid deed to land, you occupy the land and become an adverse possessor. Color of Title is -- Adverse possession under an invalid written instrument. Usually a deed. If you meet all of the requirements we then relate it back and give you title from the beginning of the statutory period. – RELATION BACK DOCTRINE To transfer property voluntarily it has to be in writing, signed by the party in charge and transfer to the new party. Q: What approach did the majority take in terms of the state of mind. p. 146 #1. Actual possession overrides constructive possession. If it is constructive v. constructive then it goes to first in time first in right. #2. A gets lot 1 only. Where there are multiple lots, the color of title doctrine applies only if (1) lots are contiguous and (2) owned by the same owner or owners. p. 152 Note 3 – Has a transferred title back by moving her fence? To transfer title to real property we must first look to the statue of frauds. Look at the 3 approaches to boundary disputes. But don’t sweat the details. Read Howard v. Kunto, Irac the courts opinion paragraph by paragraph and think of the different planes. 9/22/03 If it is a small encroachment along a boundary line then you can argue there is not constructive notice, or you can say it is taken care of under the laws of boundary dispute. Boundary disputes Agreed Boundaries – Expressed oral agreement not subject to statues of frauds Acquiescence – Implied agreement Estoppel – If one party makes a representation and the other party, based on their reliance, expends some money, then the other party is estopped from retracting representation. Courts will usually massage these rules to come up with a fair decision. When can adverse possessors tack (adding together successive periods of adverse possession). They can tact if they show privity. The concept of privity was implemented in order to limit the rights of squatters. Problems on 160 -1,2,3 Disabilities doctrine, what does that statue mean 9/24/03 In looking at Privity (the relationship between the adverse possessors) there are two approaches.  The American view (Earnings approach) says that there must be a reasonable connection between the two possessors, either a voluntary transfer or a meeting of the minds. Privity of possession or privity of conveyance.  English approach (Statute of limitations), no connection needed as long as there is no meaningful gap. p. 160 #1. A can eject B because he had possession so he has rights greater to all than true owner. First in time, First in right. Under American view no adverse possession because no voluntary transfer, no privity. Under English view we still do not give possession because we do not want to encourage this type of behavior (threats and violence). In next example, if A continues to act as the true owner then 10 years is the answer. The ALI says 10 years and 6 months to give better notice to true owner. He may come and eject B. But that really does not give him better notice. Side note: Interruption doctrine -- In order for true owner to interrupt adverse possession he must file a cause of action for ejectment. Possible to physically remove possessor and then true owner must take possession for some period of time. Best way is to file cause of action. Difference between an encroachment and an improvement. Encroachment is when part of your land goes over the line to their property, improvement is totally on their land, or majority portion on their land. Early common law you would lose either encroachment or improvement if you did not make it all the way to adverse possession. Modern trend, if it is bad faith then stick with common law, if it is in good faith then almost adverse possessor has the chance to take it off, if they can not they look at fairness. Encroachment -- possibly forced conveyance (pay for used land), possibly just give the land if it is small enough. Improvement – give the owner the option, sell the land or buy the improvement. #2. If you own something outright you own it Fee Simple Absolute. Statute of limitation is not restarted if the title changes hands after the adverse possession has begun. New title holder has duty to “walk the land.” A gets title in 1995 but is considered the owner since 1985. #3. B has possession in 1987 when statute of limitations starts. If B does not exercise rights to eject then A gets adverse possession of B’s rights. B only owns it for his life so A gets it for the life of B. When B dies the statute starts again running against C. Adverse possessor gets the quality of title of the possessor at the time adverse possession begins. DISABIILTY 1. “Qualifying” Disability 2. On the day AP begins 3. In the party who has the right to bring cause of action. Apply to disability problems. Look at gift problems. Look at notes before Newman. p. 161 1. (a) Tolled until 1999, then run the disability sol of 10 years. 2009. (b) O’s heir is irrelevant because it is about the day AP begins, so answer is same as (a). 2. No tolling of statute because no requirement of all 3 elements have not been met. 3. we don’t tack disabilities, they have to be qualifying on the day the ap begins. Age 18 in 89, so then add the disability sol which is 10 years so A gets it in 1999. ONLY APPLY THE DISABILITIES DOCTRINE IF IT ENDS UP IN A LONGER STATUTE OF LIMITATIONS. Can Not adversely possess against govt. land because usually you have permission to be on public land. Non-public govt land is said to be held in proprietary, this type of land can be adversely possessed according to some jurisdictions. Some jurisdictions permit adverse possession but run the statute for a much longer period. Because chattel is mobile it is hard to give the true owner constructive notice that it is gone or who has it. Discovery rule -- The statue of limitations starts to run either, if the owner does not diligently try to get it back, or if the owner does diligently look for it and is finished looking for it. p. 179 #1. To make an inter vivos gift we need to have intent, delivery, and acceptance. 1. Intent to give a present property interest. 2. Delivery can be actual delivery or constructive delivery (delivery of something that gives control of item) or symbolic delivery (delivery of something that symbolizes the item). If actual/physical delivery is possible then it is required. If it is not possible then there is no hierarchy between constructive or symbolic. 3. Acceptance, intent of the donee to take possession of the item. As long as the item is of value, acceptance is presumed. Issue at hand – when the donee is already in possession of the item at the time the gift is given, should the donee have to give it back to the donor and then get it back. Rule no. If the donee is already in possession of the item being gifted he does not have to deliver it to the donor to re-deliver it to the donee. We have intent, delivery, and acceptance, so we do have a gift. O can not get the gift back, gifts are irrevocable as a general rule. 3 functions of delivery, ritualistic function, clarify intent, protection from fraud. Writing intent on a piece of paper and delivering that is the classic symbolic delivery. A owns the ring because it was gifted to A. A gives possession to O but not title, O becomes a bailee. O dies and A still has title and gets it back. In this case there is no intent to give a present property interest, so there is no gift and it is not enforceable. Using traditional common law approach engagement ring does not need to be returned #2. Technically the check is not delivery because it is paid when the check is cashed, the donor can still stop payment. #3. The paper is symbolic, but physical delivery is required if possible. In the case of Newman v. Bost we have 4 items at question Causa Mortis Gift – Death Bed Gift. The only 2 differences is that if you make a Causa Mortis Gift you can revoke the gift if you recover and don’t die. Another difference is that if you already have possession then you do have to give it back for re-delivery. With a gift Causa Mortis courts are usually conservative, give only if intent and delivery is clear. 1) Bureau 2) Insurance Policy 3) Piano 4) Rest of the furniture Testamentary gift is made through a will. Bureau – He gave her the keys, he pointed to it, he named it, the intent is clear. He did constructive delivery by giving the keys to her. Acceptance we assume if the item is of value. Insurance Policy – How do we know that his intent to give the bureau meant all items within the bureau. It was capable of manual delivery but he didn’t do it. When someone is giving a gift of a receptacle there is always be a question of intent to give the contents of the receptacle. Courts generally award items in a receptacle only if they are expected to be in the receptacle. Rest of Furniture – Court gives her the furniture in her room because they say she has already taken possession of it as an inter vivos gift. Delivery is already complete. And intent is satisfied because he gestures to the furniture. She did not get other items in the house because there is no delivery, she got whatever the keys open up. Piano – The donor has to put it completely beyond his control and into the donee’s control. No delivery because there was no constructive or symbolic or actual delivery of the piano. p. 186 #2. He makes intent very clear, but still no delivery. Part 2 – If you combine the two sentences there is a gift because there is now delivery. If don’t combine the first sentence then we get back to the discussion about intent to give the insurance policy, he may not have known it was in there. #3. Common law says delivery of bureau is good, but since no delivery of policy then not a valid gift. Modern approach goes more with intent so may say it is a gift because it is silly to take out the insurance and give it to him, then give it back. #4. No gift because if the strong box is small then he could have actually delivered it, and since there is no actual delivery then no gift. If you are presently giving a future interest then symbolic delivery is enough. You can not take back the gift of the future interest once you give it. p.194 #1. Common law says no delivery because you must actually deliver it. Mail will probably work because the mail can act as your agent. 10/10/03 To Mr. Bailey for life, then to Mr. Gantos & his heirs. Finite estate , life estate to Mr. Bailey. Then future interest is a remainder to Mr. Gantos. He gets a Fee Simple Absolute interest. To Mr. Bailey and his heirs, as long as he never goes to a Man U. game. Fee simple defeasible. By default the grantor keeps the future interest. So it is either a FS determinable or FS subject to condition to subsequent. The magic words are “as long as” so it is a fee simply determinable If you have a will your stuff goes to your devisees, if you do not then it goes to your heirs. Possessory estate is a type of title interest which gives you the right to possess the property currently. A future interest is also a title interest which gives you possession when the possessory estate is extinguished. Most of this stuff will be on multiple choice. Words of Purchase (who takes it) and Words of Limitation (how long you have it) FSA – To A and his heirs. A takes it forever. We also need to look at the future interest and ask how long is the future interest. FS defeasibles – starts out looking like a FSA but it may last forever and it may end. First you have to ask who takes the future interest. If the grantor takes the future interest then it must be either a FSD or a FSSCS. If it is a 3 rd party who takes the future interest then it is a FSSEL. FS determinable – as long as. The possessory estate ends automatically upon the condition being met. The Grantor holds the “Possibility of Reverter” in fee simple absolute. FS subject to condition subsequent – but if, provided that. The possessory estate does not end until the grantor re-enters and re-claims the land. The Grantor holds the “Right of reentry” in fee simple absolute. FS subject to an executory limitation – 3rd party takes an executory interest in fee simple absolute. We don’t need to know the RULE AGAINST PERPETUITIES – Limit on how long the rules on a property can last. The future must vest, if at all, within the lives and beings at the time the interest is created plus 21 years. Modern trend is 90 years. If you draft in a way that violates the rule against perpetuities then we wipe the condition out from the start. If you say as long as no alcohol is consumed on the land, that condition could violate the rule of perpetuities so we wipe it out from the start and the interest is actually a FSA from the start. Fee tail is a series of life estates – typically goes to the oldest child and then to oldest child of the oldest child. Term of years – you have to know the end date on the start date. In finite estates we have reversions and remainders but there is no rule as to how long those interests are. We have to look at the wording of the conveyance. To Ms. Monken for life, then to Ms. Loesby and her heirs as long as she does not consume alcohol on her land, but if she does, to Mr. Swisher and his heirs. Ms. Loesby has a fee simple subject to an executory limitation. Mr. Swisher has a shifting executory interest. To Ms. Monken for life, then to Ms. Loesby and her heirs, but if Ms. Monken consumes alcohol on the land, then to Mr. Swisher and his heirs. Remainder is contingent unless 1) Born 2) Ascertainable 3) No expressed condition precedent in the same clause as the remainder or the prior clause Estates can end prematurely by forfeiture, renunciation, or merger. Forfeiture is when you commit a crime and the law ends your estate. Renunciation is when you end it yourself, and merger is when there is a transfer of interest to someone who also has an interest. Can you transfer an interest? Yes, except for 2 situations. Executory interest and contingent remainders can not be transferred. You can only merge if the vested interests are successive. There can be no vested interest in between to block it. To A for life, then to B and his heirs if B is alive when A’s life estate ends. If A renounces, then B’s contingent remainder vests because A’s estate has ended. To A for life, then to B and his heirs if B survives A. If A renounces, then the contingent remainder dissolves because A’s estate ended and the contingent remainder had not vested. O’s reversion would become possessory. Contingent remainders can never accelerate into possession. If there is a condition precedent in the subsequent clause, then it is a vested remainder subject to divestment, and following that is always a shifting executory interest in Fee Simple. To Mr. Bailey and his heirs if he gets married. If you have a condition precedent to the first and only grantee then you always have the same scenario. O holds a fee simple subject to an executory limitation and Mr. Bailey holds a springing executory interest in fee simple absolute. If you have a cond precedent in the same clause as what appears to be the remainder, but it is impossible for the condition to occur during the prec finite estate – Gap Scenario. O will take a reversion in fee simple subject to executory limitation and the 3 rd party takes a springing executory interest in fee simple absolute. We can also cut short finite estates. If this is the case we need to consider, if the finite estate ends naturally, who takes the future interest, and if the finite estate is cut short, then who takes the future interest. If the cutting short language is the determinable then it goes to the 3 rd party in either event. If the cutting short language is “but if” then the 3 rd party takes it only if the condition happens. Destructibility of contingent remainder doctrine: If the remainder does not vest during the preceding finite estate then it is wiped out. The modern trend is to abolish this doctrine. Rules intended to try to clean up the state of the title: Rule in Shelly’s case – If you see a remainder in the heirs of the party who holds the life estate, you give the remainder to the life tenant and then check for merger. The Doctrine of worthier title: Where you see a conveyance which purports to give the future interest to the heirs of the grantor, it applies to remainders or executory interests, give the interest to the grantor. Then restate the title. Rule in Purefoy’s case: States that the court does not buy the argument that some contingent remainders should not be subject to the destructibility of contingent remainder doctrine. Rule of convenience: As soon as any one member of the class is entitled to possession, the class closes. WILD AMIMALS FINDERS ADVERSE POSSESSION (FINAL!!!) POSSESSORY ESTATES AND FUTURE INTERESTS (half of multiple choice on final) CONCURRENT ESTATES LANDLORD TENANT Concurrent estates – situations where two or more persons have concurrent rights of present or future possession. If problems arise the co-tenants can partition. Partition by Sale – Sell land and split money Partition in Kind – Divide up land and keep 3 major co-tenancies 1. Joint-Tenancy 2. Tenancy in Common 3. Marital Co-Tenancy  Tenancy by the entirety  Community property Marital Co-Tenancy There are 8 states that recognize community property, the other states are separate property states. Pre-marriage if you earn some money it is your separate property, this is the same rule in every state. After marriage it depends on the state. Separate Property states say that marriage does not affect property rights. In Community Property states, the stuff you have before your marriage is your own property. But, you start with the presumption that all property acquired during the marriage is community property. And all property acquired before the marriage and any gifts/inheritances/devises during the marriage are separate property. What you have left, is earnings (property acquired as a result of labor) acquired by either spouse during the marriage is community property. This property is a co-tenancy, it is owned by both spouses. The earnings are characterized based upon the domicile of the earner. IE, if married in non-community property state but move to California, then all earnings when living in CA are community. The starting rule for community property is that one spouse can not unilaterally transfer community property. You can transmutate separate property into community property if you make it clear that you want the property to be community property. But if you want to convert community property into separate property, you need the permission of both owners. Non-Community property states don’t get involved until divorce or death. In these states upon death or divorce the state steps in and divides up the property. In the noncommunity property states they divided all the property, including the property acquired before the marriage. In reality the difference is when does the spousal protection kick in. In separate property state, typically each party gets 1/3 of the all the other person’s property. Joint Tenancy has a right of survivorship, typically your property passes to your heirs. Upon death with a joint tenancy the right of the deceased is extinguished and the property avoids probate. One who owns property in joint tenancy owns it by the share and by the whole. Automatically recalculate the shares upon death of one of the tenants. When there is only one owner left it is no longer concurrent property, it is their property. What happens if both tenants die simultaneously? Then we transmutate it to Tenancy in Common and give half to each. If you are a tenant in Common, you have the right to possession of the whole, you also own a share. The main difference b/w Joint Tenancy and Tenancy in Common is the right of survivorship. Tenancy in common is inheritable and devisable. What if someone transfers property property: From O to Pete and Lulu. Now since we have multiple parties taking/owing the property at the same time so it must be one of the concurrent estates. The common law favored joint tenancy as long as the four unities were satisfied. If you didn’t meet the four unities you would get a tenancy in common. The modern trend says that we think the typical individual should have tenancy in common unless it is clear to be otherwise. Four Unities – 1) Time – the interest of each of the join tenants has to be acquired at the same time 2) Title – all joint tenants must acquire title by the same instrument 3) Interest – they all must have equal shares and interests 4) Possession – each must have a right to possess the whole If you want to opt out of the tenancy in common the language must be clear, usually stating “not as tenants in common.” Sometimes just saying in Joint Tenancy is not enough because some courts say that Tenancy in Common is a form of Joint Tenancy. The best language is “as Joint Tenants with right of survivorship and not as tenants in common.” Suppose Cupp owned a house by himself and then drew up a deed from Cupp to Cupp and Lulu? In this case even under common law there would be a Tenancy in common because the four unities are not met. Time and title are not met. Cupp had his right long before Lulu. In common law, to create that join tenancy, he would have to give it to a straw dude and then have the straw dude give it to Cupp and Lulu. This is the two to transfer rule, because originally it was giving a clod of dirt to someone and you can not give it to yourself. What about Cupp to Cupp and Lulu as joint tenants and not as tenants in common. The older modern trend would say this is still tenants in common because we still do not have the four unities. The newer modern trend is getting rid of the concept of the four unities and getting rid of the two to transfer rule. Now what if it is to Pete and Gerri we introduce marriage. This introduces the fifth unity, and common law says if five unities are met then you have tenancy by the entirety. The modern trend in some jurisdictions is to abolish tenancy by the entirety and in other jurisdictions they recognize it but they subject it to the intent approach, and others keep it as default if the 5 unities are satisfied. 11/3/03 Non-Marriage Common law, joint tenancy is the default as long as the 4 unities were met, and its key characteristic is the right of survivorship. Modern Trend general rule goes with Intent and you need expressed intent in the instrument along with the 4 unities. The modern trend modern trend says you need just the intent and not need all 4 unities. Either party can unilaterally transfer his share. If one parties share is transferred, we have broken the 4 unities so it turns into tenancy in common. Any party can unilaterally demand partition. Common law, if you did not meet the 4 unities you would get it. In the modern trend tenancy in common is the default unless there is an expressed intent in the written instrument. Either party can unilaterally transfer his share. The transfer has no effect upon the type of tenancy. The new party steps into new shoes. Any party can unilaterally demand partition. Marriage Common law says tenancy by the entirety is the default if you meet the 5 unities (marriage is the 5th). It is more like joint tenancy because it has a right of survivorship. To get tenancy by the entirety you have to have a transfer to two people, who are married. Modern trend is based on intent, not unities. Either party can not unilaterally transfer his share. Both people are treated as one and both need to agree. Can not unilaterally demand partition unless seeking divorce. Not until the divorce will the property be partitioned. In community property states, Common law says that property acquired by either spouse as a result of labor, not a conveyance, is community property. There is no tenancy by the entirety in community property states. Either party can not unilaterally transfer his share. Both people are treated as one and both need to agree. We will not discuss the partition aspect. If one dies, he can devise his share to anyone. In a scenario where there are multiple joint tenants and one party transfers, the new person gets his share as tenant in common but the others are still joint tenants. What if Wendel’s mom conveys Malibuacres to Pete, Gerri and their daughter Carolyn. Gerri and Pete have tenancy by the entirety with respect to 2/3 and joint tenant with respect to the 1/3. But if Pete dies then Gerri gets 2/3 and since the shares are no longer equal, it goes to tenancy in common. Don’t worry about this example because some jurisdictions allow joint tenants to have unequal shares. p.342 #1. Common law that would be joint tenancy as default, modern trend that would be tenancy in common as default. Under common law, B and C remain as joint tenants and D is a tenant in common. When B dies, C takes 2/3 as tenant in common with D and his 1/3. Under modern trend they all hold tenants in common, they always hold 1/3 interest, can be willed, transferred, or devised. #3. Can’t be a tenancy by the entirety because the 5 unities were not met. Common law says they would be joint tenants, modern trend says the default is tenants in common but their intent may be to have the right of survivorship so they may get joint tenancy. Under both scenarios they can transfer and partition. Where the joint tenant severs the joint tenancy by transferring an interest to himself or to another party, it has to be recorded before the other party dies. Common law we do not have to worry about the two to transfer rule with tenants in common, because we do not care about the 4 unities. Common law says you have to use a two to transfer rule with tenancy by the entirety because we need 5 unities. Harms v. Sprague Lender loans money but wants to get money back. Borrower signs promissory note, but that is not enough. Lender also wants collateral, if can not pay back, lender has a right to sell the collateral and take money out of the proceeds. In this case John is a joint tenant and mortgages his interest in property. Does this sever the joint tenancy? Early common law, you would convey the property to the lender, who then got title, until loan is paid off. To lender and his heirs as long as I still owe him money. In that fashion the 4 unities will have been broken so the joint tenancy will have been broken. This will turn the share into a tenancy in common. The common law theory is also known as the title theory. Under the title theory a mortgage would sever the joint tenancy. The modern trend takes the lien theory, it says that you don’t give title to the lender, you just give them a lien (a right to sue in the event the loan is not paid off). The modern trend is based on intent and the average person does not think of a mortgage as severing a joint tenancy. With respect to these lesser property interest transfers, the modern trend makes it harder to sever the joint tenancy. The modern trend also makes it harder to create the joint tenancy, need intent and the 4 unities. How much can you transfer? Nemo Dat – you can’t transfer what you don’t own. Joint tenant owns the whole thing and owns half. When transferring we concentrate on the half. If the bank forecloses it can only sell half. If the other co-tenant dies first, John gets right of survivorship and owns the whole thing, lender forecloses on the whole property and can sell the whole thing. Likewise, if John dies first, his interest is gone and the lender gets nothing. Real modern trend says that the intent of the party who took the mortgage intended the lien to stay on his interest, in this approach when the tenant with mortgage dies, his interest along with mortgage passes on to the joint tenant. Some jurisdictions take modern trend for the issue of whether the joint tenancy is severed by mortgage, and common law on the issue of whether the mortgage is transferred upon death. 11/7/03 If you see language with quotation marks around it, then stop and analyze it. If there are no quotes assume it is fact. p.356 #2. First, does A have the right to unilaterally transfer his right to possession? Yes he does. What is the effect of leasing his interest? Under common law the 4 unities are broken and it becomes tenancy in common. Modern trend we focus on intent. A does not intend to sever joint tenancy so the joint tenancy remains intact. There are actually a few jurisdictions that turn it into a tenancy in common during the term of the lease, but turn it back to joint tenancy after it reverts back to A (but we are not going to go there in this class). Under common law approach D takes the title with B continuing to have right to possession until lease expires. Modern trend keeps it as a joint tenancy, but now we have to ask from this point what to do when A dies. Common law approach from here says that B takes A’s interest and C is out. Modern trend from the death says that B takes A’s interest but C still has right to possession until lease expires. JOINT TENANCY BANK ACCOUNTS Wendel has $1,000 in bank and puts Lulu on the account. The bank gives them a card that says P & L as Joint Tenants with Right of Survivorship. Some jurisdictions recognize this as true joint tenancy account and other do not. 1. Payable on Death Account – Pretty much a substitute for a will, says that when Pete dies he wants it to go to Lulu. Inter Vivos – None; At Death -- All 2. Agency/Convenience Account – Lulu becomes Wendel’s agent, she can use the money only for the benefit of the principal. Inter Vivos – None; At Death -- None 3. Joint Tenancy Account – True joint tenancy. Inter Vivos – 50/100; At Death – All Common Law says that payment on death accounts were illegal because it is trying to avoid probate. Modern Trend says that we allow these types of accounts. Agency Account is trouble because an agency relationship ends at death or incapacitation. The courts will now assume a true joint tenancy account and will look at evidence to see if it should be different based on intent. To cut down on litigation the modern trend has come up with some rebutable assumptions. These assumptions can be refuted with clear evidence. The heightened standard is designed to deter litigation. Inter Vivos the parties own in proportion to their contribution. And at time of death, we presume a right of survivorship. This doctrine is limited to the joint tenancy bank account. They don’t look at intent with respect to other types, like tenancy by the entirety. p.358 #1. This becomes an agency account based on intent, the property goes into probate upon his death. Two kinds of partition: Partition in Kind – Physically split up the land. Partition in Sale – Sell the land and split up the money. Either party can unilaterally seek partition. If they do, the starting point is partition in kind (because we do not want to kick people out of their home). There are two exceptions – (1) impossible or impractical to physically split; (2) the interests of all parties collectively are better promoted by sale. The partition by kind is much harder to do, more chance for error in splitting up the land with determining what part of the land is better and so forth. The modern trend is favoring partition in sale. Does exclusive possession by one co-tenant impose a duty to pay rent? Generally no, absent ouster. You own the whole thing so you are just exercising you rights as a co-tenant. Small minority says yes. What constitutes an ouster? Ouster is important for reasons of adverse possession and for reasons of rent. In terms of adverse possession the courts make it very hard to adversely possess because you already have permission. Some courts go so far as to require actual notice. Some courts will imply AP if the party in possession acts inconsistently with the co-tenancy. For duty to pay rent common law says you are ouster if co-tenant out of possession physically attempts to enter and is denied. The modern trend for ouster is if the co-tenant out of possession sends letter saying, “vacate % or pay rent.” Common law is basically demanding self help from two parties that don’t get along before we give them legal recourse. Class on Monday in room G at 12:30 Read Garner, Grechin, p.456-460 (skim), skip 460-477. 11/14/03 If building an improvement on land owned by joint tenants the general rule is that the person who wants to build it pays for it. An action seeking contribution is when one tenant sues the other for some of the expenses. Can seek contribution for Improvements, Repairs, or Carrying Costs (Taxes, Mortgage, etc.). As a general rule one co-tenant has a right to seek contribution for carrying costs unless the co-tenant has exclusive possession. Generally can not seek contribution for an improvement. Is a repair more like an improvement or carrying cost. As a general rule a party who makes repair is not entitled to contribution. Courts do not want to get involved because it is a fine line between what is a necessary repair and when it becomes an improvement. In general treat it like an improvement. If one party builds a boxing ring on the land the other party can get his share of the profit. If one party generates income by using the land, every other co-tenant has a right to bring an action for accounting and seek his fair share of the profit (income minus expenses). Last resort is to partition. If you partition in kind the ideal thing to do is to give the improvement to the party who made it, if it does not compromise the interest of the other co-tenants. If it is impossible to give all of the improvement to the party who did it, the other tenants would have to pay owelty (based on the added value to their property) to the tenant who made the improvement. If you partition in sale, you calculate the added value that was received at sale, the added value is given to the improver. Improvers improve at there own risk, if there is added value they get it all, if there is no added value then you are out of luck. Does a joint tenant have a right to lease his interest in the land? Yes. Does the lease sever the joint tenancy? Modern trend is the intent based approach and does not sever the joint tenancy, common law says the transfer of the right of possession breaks the 4 unities and turns it into a tenancy in common. What can Mrs. do? 3 Things, Partition, Accounting, Ousted. She can seek a partition. She can seek an action for accounting to receive her share of the net profit from the lease. If the lease was for $10,000 she gets half. If the fair market value was $15,000 it does not matter, she only is entitled to half of the actual rent. What she can do is try to get ousted, then the ouster will be forced to pay her share of the fair market value. If the lessee gets sued for ouster and is forced to pay a share of the Fair Market Value, can he credit that amount to his rent? This hinges on the intent. If Mr. S had the intent to only lease his half interest, then the lessee ousts Mrs. S, he is responsible for paying both because he never thought he was getting Mrs. S’s portion, so if he ousts her he needs to pay her. If Mr. S had the intent of leasing the whole land, the lessee has the right to entire possession so if he has to pay ouster fees, he can deduct that amount from rent paid under the lease. 11/17/03 4 types of leases STATUTE of FRAUDS says – leases for more than one year must be in writing. If they are not in writing they are void. If the person does take possession with permission on the first day they become a Tenancy at Will. If they enter into a routine of paying rent on a given period then they can, based on conduct, impliedly enter into a periodic tenancy. Modern trend says you only need one payment. Pure common law jurisdiction may keep you as a tenant at will. Common law dealt with leases as more of a property thing. Conveying the property. This approach tends to favor the landlord more. Modern Trend treats leases as contracts issues, this tends to favor the tenant. ESSENCE OF THE TENANCY Term of Years – You have to know the last day on the first day; A single fixed period; Sometimes courts say that the landlord holds a reversion. Periodic – Fixed period that will automatically repeat for successive periods until the landlord or tenant gives proper notice to terminate. Tenancy at Will (Common Law Default) – No fixed period. As long as party enters with permission and stays. Can terminated by either party at any time. Tenancy at Sufferance (Holdover) – Arises if a tenant holds over after one of the other three has been properly terminated. Landlord has two options in dealing with holdover tenant: (1) treat him like a trespasser and evict and sue for damages; (2) consent and view the holdover as an offer to enter into a new lease. First thing to do if you see a landlord/tenant relationship is to classify the tenancy. DOES DEATH EFFECT THE TENANCY TOY – Death or sale does not effect the lease. Landlord’s duty is to provide possession, and the tenant’s duty is to pay rent. Periodic – Death does not affect tenancy. TAW – Death of either party ends the relationship. Sale of the property also terminates the tenancy. Holdover – Doesn’t factor in. HOW TO TERMINATE (ASSUMING IT IS NOT DETERMINABLE) TOY – Both parties know the first and last days, so no notice is required on needed. Periodic – Common Law -- The notice to terminate has to be at least equal to the fixed periodic period, but in no event to exceed 6 months. The notice also has to make clear that the lease is to end on the last day of a fixed period. Modern Trend says you only need to give at least 30 days notice, still to end on the last day of a period (except month to month which can end on any day with 30 days notice.) TAW – Common Law -- Terminate with no notice by either party. Some states have said 30 days notice. Other modern trend jurisdictions create a periodic based on the rent payments. The common law trend is a very small minority and almost not worth mentioning. p.446 #1. a. No notice required so no rights. b. Here common law says needs to give at least 6 months notice to end on the last day of the fixed period. Modern trend says you need at least 30 days notice to end on the last day of period. c. Common Law says it is tenancy at will (not really important), modern trend says it is periodic tenancy either month to month because it is payable each month, or year to year because it is computed each year. If it is residential courts favor month to month, agricultural courts favor year to year. If you have an expressed clause fixing a period then that will usually be binding. #2. Where an invalid notice is given, should it be deemed valid at the earliest possible time it would have been, or is it just completely invalid. Common law, if you don’t give valid notice then it is completely invalid, modern trend makes it valid the first possible date that it could be valid. Common law approach says that a tenancy at will is terminable at will by either party, so once you are characterized as a tenancy at will then all the characteristics of the tenancy at will are taken by you. Under the modern trend you they go by intent, so you can almost create any tenancy you wish. p.450 #1. Common Law says tenancy at will at the option of both parties. Modern trend makes this an invalid lease because it makes the tenant a slave. The modern trend is pro tenant, and under the unequal bargaining power doctrine, if the lease seems like it is too protenant then the courts will say that we don’t think this was bargained for freely. Holdover tenant – The landowner has two options, treat as trespasser and evict, or enter into a new lease. The holdover tenant is making an offer to enter into a new lease. If they do enter a new lease, how do we determine the term and the rent? As far as term, majority courts focus on the original term, but in no event more than one year. Typically the holdover tenancy creates a periodic tenancy, regardless if the first term was periodic or fixed. In fixing the term the minority will focus on rent, then there is a split on if it is how the rent is paid or computed. The rest of the conditions are the same as the original lease, rent is generally included in this. The modern trend says if the tenant’s holdover is minimal and for exigent circumstances beyond the tenant’s control, then it is not even a holdover. 11/21/03 Landlord basically gives possession and the tenant pays rent. There are two types of possession, legal and actual. Does a landlord have a duty to give legal possession? Yes. That is typically called the covenant of quiet enjoyment. No one will have a superior right to possession for the whole term. If Wendel leases the property to Bailey and then Bailey never takes possession, and Wendel leases the property to Chanin, then the lease to Chanin is invalid because he has given his right to possession to Bailey already so he can not give it to anyone else. If an adverse possessor leases the property to someone, then the lease is valid. If the true owner comes back and evicts then the leasee can sue the adverse possessor for breach of the covenant of quiet enjoyment. Even if the leasee finds out that the person he got the lease from is an AP, he lease is still valid until he actually gets ousted by the true owner. Does the landlord also have a duty to give actual possession? If there is a duty to provide actual duty, it is only for the first day of the lease. After the first day they are trespassers and the person with right to possession must take care of it. On the first day the landlord no longer has a right to possession, the tenant does. So the tenant should have to evict the holdover. As a society we want to minimize the risks of holdover tenants. We can never totally eliminate the risk of holdovers, so we want to minimize the cost of dealing with it. Who is in a better position to deal with it? The landlord, it is their business and they may deal with it over and over. And they can spread the costs across a larger pool. The English rule put the duty on the landlord. Landlord has the duty to provide legal possession and actual possession. The American rule puts the duty on the tenant, the landlord only has to give legal possession. What about a tenant transferring his right to possession (lease) to a new tenant? A general rule is an interest in a lease is a property right and people have a free transfer of property rights. A landlord can sue a tenant on two grounds. (1) Privity of contract. If you are parties to an agreement (the lease) then there is privity of contract. If the subtenant agrees to assume all the responsibilities of the original lease then the Landlord becomes a 3 rd party beneficiary to that new agreement and the landlord now has privity of contract with the first tenant and the subtenant. (2) Privity of estate. Relationship between the landlord and whoever has legal right to possession on the last day of the lease. A sublease generally effects privity of estate but not privity of contract. If the new tenant takes all of the lease then it is called an assignment. This effects privity of estate. If the new tenant does not take all of the lease then it is called a sub-lease. The key for privity of estate is who has the right to possession on the last day of the lease. As a landlord you can sue anyone that you are in privity of contract or privity of estate with. L to T and then T to T1 as an assignment. L is in privity of contract with T and privity of estate with T1. T is only in privity of contract with T and T1, not in privity of estate with anyone. Only there is an expressed clause saying that T1 takes all responsibility of the original lease then is L in privity of contract with T1. What if you transfer all but call it a sublease? Typically a sublease does not transfer privity of estate. Common law goes based on how much was transferred. Modern trend goes based on intent and the best teller of intent in what they wrote. Most courts may pay lip service to the modern trend but they usually apply the common law. For Monday, do problems 2A and 2B. Then go to Kendal and Bird v. Wiley and the next case. Duty of possession: American rule – Tenant has burden as default, can contract to shift the burden. English rule – Landlord has burden and can not shift burden to tenant in residential situations. Generally for commercial leases we allow the landlord to contract out. For sublease, to create a 3 rd party beneficiary agreement the subtenant has to expressly assume one or more terms of the original lease. p.489 2a. Initially L can only sue T because he has privity of estate and contract with T. Under the new fact patter L can sue both because he now has privity of contract with T1. 2b. That is a standard approval clause. Does consenting to a new lease release the original tenant? No, that does not constitute novation. There must be clear novation to release the original tenant and break the privity of contract. Tenant who want to transfer their interest to a subtenant. As a general rule tenants can freely transfer their interest. If L doesn’t like that they can put in an approval clause. Common law construes an approval clause narrowly. If the approval clause says need approval for assignment, then T can sublease without approval under common law. Does a landlord have to act in a commercially reasonable manner in withholding consent in relation to an approval clause? Common law says landlord can do what he wants. Modern trend says landlord has to act in a reasonable manner. For residential the courts assume it is more personal and as a general rule the common law rule controls for residential property. Landlord can arbitrarily withhold consent. What constitutes commercially reasonably grounds? 2 main things for a landlord to check, credit and references (type of business legality). As a modern trend rule you can only reject the subtenant if you could reject them in the first place. Can you contract around the default duty to act with reasonableness? Yes, because it is only in commercial leases you can arguably contract out of it. If a T breaches the lease what are the landlord’s options? If the tenant is in possession can the L take retake possession? In common law the landlord’s duty to perform is deemed independent of the tenant’s duty to perform. In common law if T breached, L’s only action was to sue for damages. L doesn’t like this so L makes a right of re-entry clause. If T breaches then L has right of re-entry. Common law rule is L only has a right to sue for damages unless there is an expressed right of re-entry clause in the lease. This is because unless there is a clause common law says the tenant still has legal right of possession. T can breach by either violating one of the terms of the lease, or T can remain after the lease is up and become a holdover tenant. If T remains and becomes a holdover tenant, the L automatically gets legal right of possession so does not need a right of re-entry clause. Once you have the legal right to possession can you use self help to take the actual? Commercial – Common law says yes, as long as no more force than necessary is used. The modern trend to the common law approach says you also can only use self-help as long as it is peaceable. The courts are defining peaceable so narrowly that as a practical matter this pretty much means you can not use self-help because how often is the tenant going to leave completely in peace. Some courts say that the mere potential for violence is considered a wrongful eviction and the tenant has a right to sue for wrongful eviction theen. Modern trend says no self help, you must go through the courts and get a summary eviction. Most courts have said this rule can not be contracted out of because this is more about safety of the community. Residential – We go based on the modern trend approach because someone can get hurt or shot. Can not contract out of this provision. 11/26/2003 Alternative is where the tenant breaches and abandons possession. If tenant needs to go somewhere else the first option of the tenant is to call the landlord and ask if he can give it back to the landlord. This is called surrender of right to landlord. The landlord has two options, (1) accept, this will terminate the lease and release all of obligations. (2) if the landlord rejects, then the tenant may look into other options. If the tenant does not say anything but just leaves, then this is considered an implied surrendering of rights. The landlord has the same options plus the 3 rd option of re-letting for the tenants benefit. This is called mitigating damages. The risk here is that the courts may see your mitigating as re-letting for your own benefit and then that is an implied acceptance and it will release the tenant. If the landlord re-lets for more than the first tenants term or if the landlord goes in and makes improvements then these are considered doing things for the landlord’s benefit. Common law says the landlord has the option of mitigating, modern trend says the landlord must mitigate. They view the abandonment as making the landlord a defacto agent for the tenant. If the landlords actions were deemed in excess of acting as an agent then it can be construed as for the landlord’s benefit. Modern trend says landlord has a duty to mitigate and must act in good faith. Must treat that unit as any other unit in his stock. Must advertise for it and show it like any other unit. If the good faith is questioned, the landlord has the burden of proof to show he has used good faith. If the landlord did not exercise good faith, there are two options either (1) lose your right to sue, (2) get limited damages, the difference between what you tenant owed you and what you should have gotten if you used good faith. On the commercial side the duty to mitigate does not apply as strongly. Assuming the modern trend applies to both commercial and residential, should you be allowed to contract out of the duty. Greater chance to contract out on the commercial side than the residential side. If the landlord violates the lease (not providing quiet right to enjoyment), then the tenant can leave. Covenant of quiet enjoyment says the tenant is entitled to quiet enjoyment from the start to the end of the lease. The covenant does not apply to trespassers it pretty much applies to the landlord or people acting on behalf of the landlord or people who claim a right superior to the landlord. The most egregious act in violation of the covenant would be if the landlord actually evicted the tenant. What about constructive eviction? What constitutes constructive eviction? (1) Show that it is the Landlord’s fault. You have to show that the L had a duty. Expressed duty will show up in the lease. Implied duties are (1) Short term furnished must be kept habitable, (2) L must disclose latent defects that the L should know about on the first day, (3) maintain common areas, (4) must undertake carefully any promised repairs, (5) must abstain from fraudulent misrepresentations, (6) abate immoral conduct on the property or nuisances p.530. (2) You have to show that the resulting condition seriously interferes with use of the premises or render the premises substantial unsuitable for the purposes for which they were leased p.526. (3) You have to give notice to the landlord to give him a reasonable opportunity to cure. (4) You have to actually leave in a timely manner. Does this doctrine apply at common law to both commercial and residential? Yes. This does not provide must support for the tenant because it could only be used as a shield if the landlord tries to sue the tenant for rent due. If on the first day of the lease, there is a substantial housing code violation that the landlord should know about, which renders the premises unsafe, it is an illegal lease. If the tenant actually takes possession in this case, the tenant becomes a tenant at will and the tenant is liable only for the rent that the market would require for that unit in that condition. Implied Warranty of Habitability – The tenant’s duty to pay rent is dependant on the landlords duty to provide and maintain habitable premises. What is a habitable premises? Some jurisdiction say up to a reasonable person, some jurisdictions say use the heath and safety violation. Modern trend says that landlord is required to fix broken windows, and provide heat etc. To use the implied warranty of habitability tenant must still give notice for the landlord to fix, and then does not have to vacate, they can fix themselves and deduct from lease. They can stay put and sue for damages (pain, suffering, punitive). If a landlord has a tenant who keeps calling for things to be fixed what then? Doctrine of retaliatory eviction – If a landlord tries to terminate a tenancy, raise rent, or decrease services within 6 months of a tenant invoking rights or implied warranty, that is deemed retaliatory and can not be done. The implied warranty of habitability does not apply to commercial at this point. Some jurisdictions do not recognize the implied warranty of habitability for residential either, and in some jurisdictions certain people do not get the warranty, like leases on single homes. REVIEW Adverse possession requires actual entry which gives rise to possession which is exclusive, adverse, open and notorious, under a claim of right and continuous for the statutory period. $12,000 a year, payable $1,000 a month. First look for an expressed term, if the parties express their intent as to the term then that is it. If there is no expression of term then look for the how the rent is computed. Commercial or Agricultural will go with longer term, Residential goes with the shorter term. Community property devised upon death will then turn into tenancy in common. 4 Approach to AP of chattel. Pure SOL approach Classic AP approach Discovery Rule approach – As long as the true owner is making diligent effort to find the property, the SOL does not run. New York Rule – The SOL does not run until the TO asks for return of the item and the party in possession refuses to return it.