There are several different theories of property rights: They include: 1. Economic theory of property (Demsetz theory: communal property) 2. Natural rights theory 3. Locke theory 4. First in time theory 5. Utilitarian theory 6. Personality theory
Economic theory of property rights: 1. Bottom line: Common property leads to exploitation and private property forces people to think of the harm they are causing to their own land 2. Scarcity is explained by externalities and internalization a. Externality: costs that a user does not have to take into account when deciding how to use a resource b. Once the cost is internalized its no longer considered an externality c. High externalities can lead to a misuse of resources: i. Environmental harms ii. Negative social costs d. Internalizing externalities is process enabling person take into account externalities they would have ignored when deciding how to use a resource. e. Private property leads to internalization; but externalities can still exists 3. The theory is the belief that private ownership is better then communal ownership because when resources are commonly owned people will take as much as they can so that others won’t; this results in inefficient use of resources. 4. Transaction costs are used to create and execute transaction to solve the cost of externalities (like closing down a factory). Externalities relate to problem of common property because common property would be exploited as there is no benefit in upkeep, one person doesn’t bare all costs, the community does, and when property is private the loss directly effects the individual. 5. Externalities: Cost that a property user doesn’t have to take into account when deciding how to use his resources a. Ex. I own a factory and every day I operate it I earn $100, but it causes a $1000 loss collectively to my neighbors for pollution, noise etc. Overall it’s a 900 net loss. I will continue to operate my factory because I make $900 a day and don’t lose anything. The costs to my neighbors are externalities, I don’t have to take them into account; I never have to pay my neighbors back. My neighbor probably won’t approach me because it’s really a $10 loss for each individual neighbor if there are 100 neighbors. If my neighbors got together and made a group agreement to make me an offer between $100 and $1000 then we’d both be better off. I’d probably accept because I’d make $1000 a day instead of $100 a day b. If I own the all the surrounding land I won’t operate my factory because it will cost me $900 to do so, no externalities. c. We care about externalities because it’s the misuse of resources, environmental harms, the costs of excessive drilling and hunting outweighs the benefits and the future of our children and this planet. 6. Transactional Costs: The cost of getting neighbors together isn’t free, you need to investigate, fund raising costs, the cost of negotiating (legal fees). If the cost of the transaction is more than the benefit that the neighbors receive (more than $1000 Damage) neighbors won’t bother because cost of damage is less than transactional cost to stop damage. a. Private Property forces you to take all costs into account in deciding how to use your land
Private/Communal Property and Externalities (Demsetz economic theory) a. Private property: Forces you to consider costs of when using land, Encourages internalization and costs and benefits on users, Reduction in cost of negotiating; smaller number of owners, reduction in transaction cost and negotiating. b. Communal land: You don’t internalize things; Overhunt and over-drill bc gain all benefit with little costs, Transactions costs are high so its hard to internalize things, No thought about harm to future generations c. Tragedy of commons: Anytime you have common property each individual farmer acts in own best interest will tend to overuse the resource. All of them act together and negatively harm the whole of society. Demsetz says the best thing to do is have private property d. Externalities in privatization: Land that cant be privatized will still be overhunted (Ocean and air). Can be prevented by legislation, taxes, and regulations. e. Not all costs are internalized Natural Rights theory: 1. Property rights inherently and naturally acquired 2. Respect agreement among men that arose to protect natural property rights a. Critique: Government needs to regulate Labor Locke’s theory: 1. You own self; mix labor w/ something un-owned you own result (Creation) Utilitarian: 1. Property rights created by govt for societal happiness 2. Promote efficient use of resources: Maximize societal wealth by promoting use of resource a. Critique: efficiency is not the goal and equitable should be First in time: 1. First to acquire something is first to have justifiable ownership: Creation, capture, discovery Personality theory: 1. Property rights shape ones identity: a. People invest themselves and identity into their property. It makes us who we are. Nature of Property: 1. General: a. Property is relationship w/ people gives them right to include and exclude, resolves conflict over limited resources, and is a social institution that protects expectations. b. Bundle of sticks: Includes right to use, possess, exclude, and transfer i. Not every piece of property have all of these rights 2. Right to Exclude: Laws of conversion and trespass protect right to exclude a. Cases: i. Jacque case: 1. No damage on property; gave P $100,000 punitive 2. Even though no actual damage to land if person intentionally trespasses on land then entitled to punitive damages 3. Right to exclude needs to be protected by legal system, shouldn’t be in hands of people- nominal not enough to deter trespass ii. State v. Shack: 1. Exception to trespass rule: allows federal workers on private property to aid a third party living on property 2. Property rights are relative and to serve human value 3. Owner right to exclude sometimes less then others right iii. Difference between Jacques and Shack: In Shack he was using right to exclude to hinder aid to migrant workers; it had to do with access to the people on the private property. Jacques it was about trespass by Motor Home Company over his property. iv. Legal Limits and the Right to Exclude: anti-discrimination laws, rent control laws, legislature that protects home owner’s who have defaulted on their mortgage, public access rights to private beaches
Acquisition of property:
There are a few ways of acquiring property they are: 1. Discovery (First possession) 2. Capture (Firs possession) 3. Creation (First possession) 4. Find (Subsequent possession) 5. Gift (Subsequent Possession) 6. Adverse Possession (Subsequent possession)
Acquisition by Discovery: 1. Not much is undiscovered today, but the idea that property could be acquired by discovery has some modern implications and is still possible today. Acquisition by Capture: 1. Overview: a. Property rights typically claimed against person; judged against opposing party who is also claiming rights b. Cts legal terms like “possession &ownership” disguise policy goal. c. Be wear of empirical assumptions: i. Whenever rule says this rule will promote x or protect Y it is important to ask if really true, may not be. d. Consider whether rule should be created or a standard (flexible). e. Capture requires possession but there are three exceptions of custom, malicious interference, and constructive possession (ratione soli). 2. Rule of capture of Wild animals: a. Actual possession is required to gain property right in wild animal b. Hunter needs to physically capture animal to have rights to it a. Actual possession is defined as: i. Physical possession ii. Mortal Wounding iii. Trapping in nets b. Pursuit of animal “ferae naturae” gives no property right to hunter c. Pierson v. Post: Pursuit not enough need actual possession d. Benefits: “first in time arguments” i. Possession based on pursuit would lead to more disputes bc definition of pursuit would not be clear ii. Incentive to perform activity; capture on pursuit would deter people from actually possessing iii. Actual possession is more vigilance hunting and improve skills for a “Race to capture”- At this point hunting is a positive e. Rule vs. Standard: i. Rule: Clear cut answer: discourage litigation, more concrete 1. Easy to administer, no litigation, plan ahead 2. Can be strict and rigid ii. Standard: 1. More obtuse: Postpone ownership till decided on
3. Exceptions of rule of capture: (Possession) a. Custom: i. Limited application: Mostly use rule of capture ii. Five requirements to use custom to define possession: 1. Affects few people 2. Been around for long time 3. Only act of appropriate possibility 4. Necessary for survival of industry 5. Works well in practice iii. Ghen v. Rich: shooting whale gives possession as per custom iv. Problems: 1. Lessons push for technological advances in industry 2. Industry determines own rules- self-serving and may not be for greater good. b. Malicious interference: i. Person may not maliciously prevent another from capture but market competition is fair game. 1. Right to be free from interference that results in no one getting animal ii. Keeble case: Neighbor shoots off gun to scare away ducks so other guy can’t kill them. 1. Guy never had actual possession so no rule of capture 2. Guy compensated even though never possessed 3. Three issues: a. Legally used duck pond for trade b. Neighbors actions malicious c. Encourage duck capture 4. It is not productive and does not benefit society c. Constructive Possession: i. Ratione Soli ii. Owner of land owns all animals on it iii. Punishes disruptive behavior; not tangible possession but gives property owner right to the property on his land iv. If the fox is in your yard its yours 4. Fugitive resources: a. Extends rule of capture to fugitive resources because this like oil and water wander from place to place b. So if owner drills in his yard and oil from your yard flows under to his land then he is the owner. c. So if two people are pumping oil from a shared oil pool then pump fast, but the modern statue regulates how much oil you can have d. Down side: Prevents conservation and underground storage e. Bottoming rule is created: i. Must drill straight down, not at angle to get oil from someone else’s land- creates incentive to conserve, preserves peace, reduces litigation.
Acquisition by Creation:
1. General a. The Locke theory is based on this acquisition b. Keeping what you created encourages production c. Intellectual property: Patents, Copyrights, Trademarks d. Law of misappropriation: Unfair competition law that protects new ideas and tries to answer question of when imitation is permissible and when it will destroy incentive to create. e. Conversion: wrongful exercise of ownership rights over property f. Excision: Raw material pay and profiting off of someone else 2. Intellectual property: a. Cases reflect tension between desire to stimulate creation by awarding monopoly rights versus the desire to reduce costs and increase quality of goods through competition. b. We don’t want to copyright intellectual property because we want people to have the opportunity to improve on others ideas c. Harder to define intellectual property bc not physical; if one person uses another’s intellectual property doesn’t take away from property as a whole. 3. Patents: a. Granted for novel, useful, and non obvious products (machines, inventions) b. Exclusive right to create product for 20 years (non-renewable) c. Diamond case: Patented unnatural bacterium 4. Copyrights: Protect expression of ideas in books, music, and art a. Lasts 70 years after death of author or creator b. Subject to Right of others for fair use (Can use quotes in book review) c. Anything expressive inherent in creator 5. Trademarks: a. Words or symbols associated with a product b. Protects the mark and not the product (cheerios, coke) c. Last forever unless the name becomes part of vocabulary (Xerox) 6. Property in your person: a. Selling your kidney: i. Uniform Anatomical Gift Act: 1. It is unlawful to knowingly acquire receive or transfer any human organ for valuable consideration for use in human transplantation if transfer affects intestate commerce. a. Says can’t sell organs for transplant but leaves open door to sell for research and other stuff ii. Conversion and excision: 1. Conversion is the wrongful exercise of ownership rights over the personal property of another (tort law) 2. Excision is if you put all the work in on someone else’s property you get money from what you changed but you have to pay them for raw material. iii. People have right to make informed consent, right to exclude others from using tissue, and tight to transfer (limited; no money) 1. Argument for: Compensation, patient rights 2. Argument against: Human body market place, research restrained by competitive bidding, poor people could sell their body parts putting them at physical disadvantage.
7. Cases: a. International News Service v. Associated Press: (Allows for property rights)
Ct decides quasi property right in the news between 2 competitors news is like merchandise and it can be considered to have property rights. Its not saying current event property right, saying news is merchandise and INS actions constitutes unfair competition not copyright law. Policy concern is about profit to report news. i. (Locke’s Labor Theory- you have a right to own what you create
ii. Rule: Where a company has expended resources in creating news and info, the creator can exclude others from copying it until its commercial value as news has passed away: iii. It is not property between normal people but quais-property with competitors in the industry. b. Cheney Brothers v. Doris Silk: (Doesn’t allow for property rights)(Intellectual
property can’t be copyrighted) Doris was copying Cheney’s silk garment designs. Cheney had not patented or copyrighted its design so it could not sue. Copying is ok but pretending to be something else is not. Public Policy- Copying is a way of fostering competition and competition creates better products, lower costs
i. Rule: Unless the common law or patent/copyright statutes give protection from appropriation, a person’s property interest is limited to the chattels which embody his creation c. Smith v Chanel: (doesn’t allow for property rights) Chanel had a patented fragrance.
Smith copied. Chanel alleges that a competitor should not be allowed to take a “freeride” on the trademark owner’s widespread good will and reputation. Holding: Court said that Chanel should advertise publicly that it is the expensive one but encourages Smith to copy to increase competition because this increases quality. Original inventor is worse off but society is better off. i. (Utilitarian Theory: maximize societal wealth) d. Diamond v. Chakrabaty: you can’t patent natural organisms- BUT person here created a bacterium with markedly different characteristics from those found on the earth with significant utility. Product of nature can’t be patented (i.e. Mineral) but product of human ingenuity can. Patent Statute: “Whoever invents or discovers any new and useful process of matter…may obtain a patent…” i. Rule: Product of nature not patented. Product human ingenuity can patent e. White v. Samsung: Under CA law, publicity laws protect name, likeness, signature and voice for commercial purpose. White claims the ad violated her right to publicity cause the ad evokes images of her. The dissent says this is not the right place to expand that right it upsets a balanced program between right to competition against right to monopoly. It may seem unfair that someone else can profit from your efforts but that’s not an accident it’s the very nature of our intellectual property system that creates balance. The right to make a parody is protected. i. Rule: Creation of personal image is a property right f. MGM v. Grokster: MGM was suing the owners of Morpheus who used p2p network instead of one large source the company (who did not actually copyright material) is held liable for giving millions of third parties tools to copy copyrighted material. Court cites Sony case: some possible illegal uses but also legitimate uses and won’t bar the VCR entirely bc potential for illegal use. It’s dangerous to extend IP rights too far. i. Inducement Rule: if you distribute a device with the intent to foster a copyright infringement then you can be held liable for the subsequent infringement by third parties. If you market as software that allows you to download copyrighted material then you have induced third parties to partake in infringement
Moore v. Regents of Univ. of CA – Researchers removed Moore’s spleen and retained it for research. As a result of the research, Regents established a cell line from Moore’s cells and obtained a patent for it. Moore sues for conversion of his body parts. i. How to allocate ownership when one party contributes the raw materials and the other party does the creative work on it? 1. Medical researchers kept a patient’s tissue to develop a new cell line. Researchers profited without patient’s consent or knowledge. ii. Should medical researchers be allowed to take body parts? Did P make out a valid cause of action for conversion? Should people be allowed to sell? iii. Holding: Court found that the cells were so changed by the doctors that they had a separate existence and patient could not profit off of cell line. 1. Rule: A doctor has a duty to disclose the extent of his research and economic interests in a patient’s body parts. Human body parts are not property such that they may be converted iv. 3 reasons that there is no liability now 1. No case law on point 2. California statute limits Moore’s rights so what’s left over can’t be considered property for purposes of conversion. (Dissent – Gift Act allow individual to sell body parts, but not for transplants. Just bc limit right to dispose doesn’t mean what left is not necessary property) 3. Cell line can’t be his property because is legally and factually different (product of human ingenuity). Property right awarded for the innovation, not for the raw materials (compare to law of accession where there is compensation for the raw materials. v. 3 reasons not to extend liability 1. Fair balancing of policy considerations a. Patient’s right to autonomy v. threaten researchers w/ civil liability bc cells they do research on taken without consent b. Duty to disclose will not hinder scientific research c. Solve problem by having a consent form be attached 2. Problems better suited to legislative resolutions 3. Moore is protected by the DUTY TO DISCLOSE - duty to disclose adequately protects Moore and patients like him (vs. dissent – does not protect his interests adequately)
Acquisition By Find: 1. Supported by first in time theory- rights are judged sequentially- only the true owner has better rights then the finder 2. Finder ha good title against anyone but true owner and prior possessor 3. Policy: If all you needed to have was physical possession to have property there would be an unending incentive for people to steal things. 4. Court must distinguish between lost property and mislaid property 5. Finder has no right to mislaid property- it belongs to the owner: a. Mislaid property is when you put something down and forgot where you put it. If you put coat down on counter; the person who takes coat has no right to it; it was mislaid b. Finder holds property till original owner returns 6. Finder of lost property has right to it over anyone then person who lost it. a. Lost property is if you dropped your bracelet in the street b. No reason to believe true owner will return to claim it 7. If finder doesn’t own the land where the property is found the land owner prevails over finder if: a. Landowner has actual or constructive possession (Embedded in soil) b. Common law was that the finder of lost property had possession even if they are on private property, as long as they had permission to be there. It was finder’s keepers, loser’s weepers. 8. Today is different: Finding lost property: a. Trespasser: Will always lose b. Buried property: Land owner c. Absentee owner: finder over owner d. Abandoned: Finder 9. Armory v. Delamirie: P finds jewel, takes to D’s shop. D refuses to return: o Rule of Prior Possession: the original owner has first claim to it, then the first possessor has a better claim to it than a subsequent possessor. A finder has good title against everybody but the true owner or a prior possessor. Goes back to the idea of first in time. o Rule: Finders keeper’s loser’s weepers. If lost (no reason to believe the original owner will ever appear to reclaim it, then the finder keeps it If it was mislaid, the finder/property owner holds it in trust and acts as a safe keeper and must seek out the original owner or heirs 10. Hypo: Sweeper finds ring in chimney and takes it. Chimneysweeper drops ring on sidewalk. Bob finds it and takes it. Sweeper sues bob for ring. a. Rights are judged sequentially. Since sweeper is prior possessor he has a better claim to it then Bob. Only true owner beats out sweeper.
Acquisition By gift: 1. Elements of a gift: a. Intent i. Intended to give gift to donee b. Delivery: i. Traditional Rule: Actual physical delivery is required wherever possible. If physical delivery is not possible then symbolic delivery, constructive delivery. ii. Must feel the loss, an evidentiary function 1. Physical delivery 2. Constructive delivery: a. Give someone something that opens a place where gift is or turns gift on (like a car). It gives donee access to the property. 3. Symbolic delivery: a. Typically a written instrument b. Like giving the deed to a piece of land c. Too large of a gift 4. Gifts of bailee: a. Excuses delivery requirement; already in possession of the gift c. Acceptance: i. If it is valuable acceptance is presumed 2. Gift Inter-vivos a. Given during the life of another: while alive and healthy b. Irrevocable gift 3. Gift Causa Mortis: a. Gift in contemplation of and expectation of immediate approaching death; a substitute for a will. 2 requirements: i. Intention ii. Delivery b. If donor lives then the gift is revoked i. Helps prevent against fraud and ensures that giving the gift was really wanted c. Cts typically apply stricter version of gift requirements in “causa mortis” then in “inter vivos” i. See causa mortis gifts as undercutting the safeguards of the statute of wills. d. Requires higher standard of proof, clear and convincing evidence needed to uphold the gift 4. Promise to give a gift in future is usually unenforceable bc it does not have all elements of a gift.
Newman v. Bost: after giving the keys to much of the furniture in the house to P, decedent pointed to the furniture and said to P that he was giving it all to her. In one of the pieces of furniture was a life insurance policy. Administrator of decedent’s estate sold all property in home and P sued for value of life insurance policy and value of other goods in the home. – Very formal i. Rule: Symbolic delivery of a gift is not effective. Constructive delivery is allowed only when it is impracticable to deliver actual possession ii. This court requires constructive delivery only if item incapable of manual delivery. Constructive delivery only ok if owner intended to give item as gift. Policy was possible to be given manually so not included. iii. She gets other furniture in room because constructive delivery is okay because furniture isn’t always capable of manual delivery Gruen v. Gruen: P’s father sent him letter giving him painting as gift for his birthday reserving a life estate for himself (meaning when died actual possession go to son, son has future interest). Father died stepmother refused to hand over painting claiming didn’t satisfy formalities of will and donor may not gift chattel while reserving life estate in self bc possession not delivered. – Accepts symbolic delivery i. Rule: A Party may give a future interest in chattels as a gift while reserving a life estate in him self. A gift with value presumed to be accepted. 1. Intent: Ct said Victor giving son gift of painting he gave ownership of painting to son on 21st bday. Son didn’t have possessory interest in painting had remainder. Father kept life estate and after died the remainder (possession of painting) goes to son. Father had life estate and son had remainder. 2. There was no physical delivery. The court found physical delivery wasn’t necessary because of practical reasons it wasn’t necessary. The court takes a more relaxed view of delivery, that I can be flexible and symbolic delivery is good. All you’re getting is the remainder so actual physical possession is not required. Hypos: i. O leaves ring on sink. A calls and tells her. O tells A she can have ring 1. Intent – O said A could have ring 2. Acceptance - A never gives ring back 3. Delivery – Only questionable factor but its enough she left ring on sink to constitute physical delivery a. Physical delivery not always needed to consist of physically handing gift from one person to another. ii. Can A get ring back if she gives it to O to hold onto until it fits? 1. Yes all three elements existed at one time. When she gave it to O to hold not rejecting the original gift or re-gifting the ring a. Returning property to the original owner does not destroy the original gift unless rejection or re-gift. iii. O promises to leave ring to A when she dies 1. Not a gift. Missing element of delivery and is known as a gift promise which can be revocable unless consideration is present 2. Need all three elements or no gift iv. Broken engagement. Who gets the ring? 1. Most states giver gets ring back based on theory that ring conditional gift based on getting married 2. NY says go to court and fight over who is at fault. Winner gets the ring
Acquisition by Adverse Possession: 1. Overview: a. Acquiring possession to real property through possession for SOL b. Must satisfy all five elements to get property automatically. However, if you want to sell the land in the end must “quiet title” and get a deed. c. Proving all elements results in: i. True owner not being able to sue to get property back ii. Adverse possessor gains title that dates back to first day they entered the property and is just as good as buying the land. 2. Elements of Adverse Possession: All 5 are required a. Actual possession b. Exclusive possession c. Open and notorious possession d. Adverse and under claim of right (hostile) e. Continuous for statutory period Actual Entry/ Exclusive possession Consistent with ordinary use of similar property (Howard) Open and notorious Caves (Marengo) Minor encroachments (Manillo) Adverse/Hostile/Under Claim of Right/Title Without owner’s permission Consider required intent (NY statute, Manillo) Continuous Seasonal use permitted (Howard) Tacking requires privity, i.e. reasonable connection between possessors (Howard) Boundary Disputes Doctrines of Agreed Boundaries, Acquiescence, Estoppel Innocent Improver (Manillo) Color of Title Claim pursuant to written instrument Constructive AP (except when true owner is in possession) Disabilities Owner must be disabled when cause of action accrues Disabilities cannot be tacked (i.e. extended S/L begins to run upon the termination of the disability existing when cause of action accrues)
3. Theories of property rights are: a. Sleeping theory: i. A slothful owner who sleeps on his rights and does not care enough to assert his ownership should be penalized. ii. Punishes the owner for sleeping on his rights b. Earning theory: i. People who use land productively and beneficially for a long time ought to be rewarded: Based on efficiency ii. After a long term possession the adverse possessor relies on that land: honor the expectation that comes with reliance c. Statute of limitation theory: i. Stability theory: Want to set a certain point to cutoff possibility of a law suit, can’t show up 200 years later claiming land. ii. Enables disputes and doubts about land titles to be cleared expeditiously by delivering title to person who occupied land as if they were true owner for a long period of time. iii. After a long time witnesses die, memories fade, documents lost iv. Bars certain claims and promotes certainty of title 4. Actual: a. Actual means possessor must actually physically take possession b. This element triggers the cause of action: Cause of action accrues at moment of physical possession and SOL beings to run c. Must use it in a way that the average owner would use it i. Farm land; then farm. House, then live in it. d. Some states define actual possession by statute (NY) requires adverse possessors occupying without color of title to prove they had “substantially enclosed” or “visually cultivated or improved property” e. Exception: i. If they possess land with color of title they will get the whole piece of land included in the deed even if they aren’t actually using all of it. 5. Exclusive: a. Hold land exclusive to true owner- can’t move in with actual owner b. Excluded the owner and the public: Doesn’t mean could only be one adverse possessor; group can adversely possess as concurrent owners c. Claimant act in a fashion reflecting dominion and control over land
6. Open and Notorious: a. Must be readily visible to any inspector of property b. Idea that true owner would/should know had he visited property c. Constitutes notice to owner that rights are being violated: d. Must be the type of occupation that a true owner would make e. Policy of sleeping on rights relates to possession being visible to common observer; true owner has to see and recognize possession of land so that he is actually sleeping on rights f. Small encroachments require original owner have actual knowledge i. If small encroachment like boundary dispute and not clear and self-evident some jurisdiction, like Mannillo, rule SOL doesn’t run until owner has actual knowledge of encroachment. g. Boundary disputes: doctrines courts use to fix boundary disputes i. Doctrine of agreed boundaries: 1. Uncertainty amongst neighbors as to true boundary line who orally agree and accept on line are enforceable ii. Doctrine of acquiescence: 1. Long acquiescence is evidence of an agreement between parties fixing the boundary dispute iii. Doctrine of estoppel: 1. When one neighbor makes representations about the location of a common boundary and other neighbor then changes position in reliance of that representation. iv. Doctrine of the Innocent Improver 1. If mistakenly improve property thinking yours; true owner may be compelled to sell land to you by court. 2. Policy: Strict AP is a zero sum game. Someone gets the property and other doesn’t. Innocent improver is a way of compromising and making both parties better off. h. Marengo Caves v. Ross: 46 yrs used for tourist attraction, 25 yrs before Ross got
land, 21 yrs after. Ct finds before owner of legal title deprived of land by other from Sol possession must be actual, visible, notorious, exclusive, and hostile to owner and continue for statutory period. Ct doesn’t answer whether actual but says cave owner physically possessing cave under land and other property owners land. He exercised dominion over it. Average true owner wouldn’t use bc wouldn’t know it was there. i. SOL starts when diligent owner discovers rights invaded. Open and notorious, where no actual notice you have to show it was so open and notorious that by inference the true owner would have known had he been diligent. ii. Holding: Ct finds cave operator does not gain title through AP bc the ownership was not notorious. No way for true owner to discover and determine trespassing on land.
7. Adverse and Under Claim of Right: a. Must occupy land without the consent of true owner b. Must have intention to remain on land c. Often called hostility but doesn’t mean it is malicious or ill willed d. Means adverse possessor has no permission to be there and claims the right to stay there e. Some courts require Intent and there are three theories on this intent: i. Good faith: subjective: Genuine good faith belief that own property and possessor who knows that property they are on is not there’s could not acquire property through adverse 1. Walling case: Need a good faith belief that the land is yours before you can acquire it by Adverse Possession ii. Aggressive trespass: subjective: Know the property is not your but intend to claim it anyway. Possessors who think property is their own can never acquire property through adverse possession if this theory is used. iii. State of mind irrelevant: Objective: Majority view: Don’t care what your state of mind is and focuses on 2 things instead: 1. Lack of permission 2. Whether acts and statements of occupier objectively appear to be claims of ownership (act like true owner) iv. Mannillo: Walkway encroach neighbors yard by 15 inches 1. Issue 1: Do you need to be hostile in order to acquire land by Adverse Possession? (NJ statute said you did) 2. Dissent: Rewarding people who go out and intentionally trespass and punish people who mistakenly build 3. At heart AP is about SOL and not about a persons state of mind when taking the land 4. By looking at intent you are encouraging false testimony of people saying yea the land was mine. 5. Court holds: Discard the aggressive trespasser requirement. If you meet all the other requirements of AP we will let you have the land. f. Disclaimer of ownership: i. If adverse possessor disclaims ownership in order to persuade true owner not to sue within the time of SOL then the possessor has stopped being adverse. g. Once you gain title by AP the land is yours. It’s just as good as buying the title from someone. Even If decide to be a nice guy and move the fence back still own the land. If move fence back before the 10-year SOL then true owner gets it back h. Hypo: i. Oliver lets Alice move into his extra apartment. After 21 years he asks her to leave because he is sick of her mooching. Alice claims adverse possession
1. No adverse possession bc had permission to live there 8. Continuous for statutory period: a. Limitations vary from statute to statue: Used to be twenty years now the modern trend is more of 6 to 11 years. b. Clock does not start running until true owner has or should have notice that someone else is on their land c. The owners cause of action to recover land accrues when adverse party enters land d. Adverse possessor must continuously (without interruption) occupy land during limitations period. e. Doesn’t mean AP must stay on land every moment of limitations period but must continuously use the way an average owner would f. Seasonal ownership can be considered continuous if that is the type of property a true owner would use it as. g. If possessor abandons property with no intent to return the continuity is destroyed. h. Tacking owners: i. Tacking follows on owner’s side. Once SOL has started to run the cause of action for ejectment goes with the owner ii. Tacking is adding u time between possessors to meet SOL iii. Tacking is allowable for adverse possession where there is privity between successive occupants 1. Privity is established by a deed (When first owner transfers to the second owner) 2. Privity means relationship between two parties that have a legal interest in same thing 3. Cts expand privity by claiming it can be established at anytime there is a reasonable connection between successive occupants that makes relationship one of more then trespass. iv. Ouster: If adverse possessor ousted by a third party, the third party can’t tack on ousters possession; because privity is lacking and the transfer was not voluntary. 1. Three views as to how to handle if ousted party returns: a. Least preferred: SOL begins all over again b. Continue with SOL and tack on ousters time c. Most popular: Ouster can tack his old possession onto his current possession but not the occupation of the third party.
Howard v. Kunto: first owner of the property built house on the property adjacent to the land
he actually owned, the guy who owned that land did likewise, as did the guy next to that guy (so three houses were improperly shifted over 1 lot). After swap of land with Moyer, Howard owns Kunto’s land so Kunto’s have only been in possession for 1 year. Howard has deed and wants them out but Kunto claims to own land through AP. Court has to decide if seasonal use constitutes under AP. Next issue is SL is 10 years but Kunto has only been there for 1. They hadn’t met the SL on their own so they want to add their year of occupancy to the Millers (their predecessors) to meet the SL requirement. The court says you need to possess the land in a way that’s average of an ordinary possessor of the land. You need to own it the same way average owners would use it an since its vacation property, occupancy of the summer months for a 10 year period in addition to improvements constitutes AP, you don’t have to be there every single day. Improvement of the land is mentioned because it helps sustain continuity when someone’s been improving the land, it awards the productive use and gives more notice to the true owner. If there are improvements the whole year the true owner will be given true notice. The next issue is tacking. Tacking: tack your time onto the predecessors’ time. In order to tack time together you need a relationship of privity. Privity just means 2 people have a legal interest in the same thing. Buyerseller, donor-donee. Normally the deed from seller to buyer would establish privity between the seller and the buyer. Privity goes back to early times. We didn’t want successive trespassers to lead to AP. We wanted something relating the parties. Privity: expands the relationship of privity to include any reasonable connection between successive occupants that raises their claim above the claim of trespasser.
Although Kunto’s don’t have a relationship of privity with the Millers, they are not trespassers. They came here thinking they own the land; they have color of title pursuant to a faulty deed. The court expands the relationship of privity to include and reasonable connection between successive occupants that raises their claim above the claim of a trespasser. The Kunto’s are allowed to tack their 1-year onto their predecessors and meet the privity requirement.
Traditional Requirement for Tacking Time: That tacking of adverse possession is permitted if the successive occupants are in privity. Privity occurs by contract of sale, gift, will or other inheritance, it is usually the deed running between the parties purporting to transfer the land possessed that traditionally furnished privity of estate which connects the possession of the successive occupants. Traditionally the deed had to omit the land in question. Court changes this by: They don’t require accurate description of the land in the deed because it would be difficult and expensive and unreasonable and not customary for every purchaser to get a survey to ascertain boundaries to see if they are accurately described in the deed. They don’t use the technical requirements of privity to allow tacking. The connection is reasonable without the technical requirements of privity here.
Rule: Tacking on successive possessions of property is permitted for purpose of establishing adverse possession if the successive owners are in privity Successive AP’s cannot tack their time together if there is no privity (reasonable connection between them)
Color of title/ Constructive Adverse Possession: 1. Claim based on a written instrument: invalid deed a. Ex: Someone gives you deed to land they don’t own 2. Possessor who has a defective deed or other writing that’s purpose is to deliver title to possessor, but possessor doesn’t know invalid 3. Under color of title most states rule adverse possessor is satisfied 4. Benefits: a. Shorter SOL b. Constructive adverse possession i. Still must meet all five elements of adverse possession ii. If you possess part of land, then you gain title to the entire land described in deed (live on 15 acres but entitled to all 30) iii. Actual possession of part of land that is described in deed will give you title to all land in faulty deed but not if true owner is still in possession of part. 5. Color of deed vs. true deed: true deed gets all land except the acres actually possessed by the adverse possessor 6. Exception to Color of Title: a. True Owners actual possession of a part of described land negates constructive possession and AP’s possession is limited to land actually possessed. Only if the true owner is in possession of part of the land then he has constructive possession of all of the land even over the AP. i. Ex. If O owns 100 acres, A enters and possess 40 acres under invalid deed for 100 Acres. A keep 40 acres and O would keep the 20% he was using and other 40% that wasn’t being used. b. If 2 lots owned by 2 separate people you have to have actual entry against each owner so each owner has notice you’re there.
NY Law AP handout:
Walling v. Przyblo: P and D own adjoining lots, both built homes on lots (P in1986, D in 1991). 1987 P bulldozed on D’s side including disputed lot, installed pipes, dog fence etc all prior to D’s arrival in 1991. 1992 P planted birdhouse in part of disputed territory, since then birdhouse remained in place. 2004 D had land surveyed finds out had title to disputed portion on land. Ct granted SJ to P to quiet title. P adverse possessor under misapprehension it was their land. o Holding: in the absence of an overt acknowledgement, our courts have recognized an AP’s claim of right or ownership will not be defeated by mere knowledge that another holds legal title. Court uses objective test here, says conduct prevails over knowledge. You look to conduct of AP and whether he’s done enough to give notice to true owner that he’s using the property.
NY legislature amended statute to require a reasonable basis for belief that the property belonged to the adverse possessor.
Disability Statutes: 1. SOL provides suspension if owner is disabled from bringing action 2. If disabled at time someone adversely begins to possess your property; ct gives you ten years from time after disability is removed to get property. 3. The disability must be at the time the cause of action accrues and the ten years begins to run the day it is removed 4. There are three disabilities: a. Insanity b. Minor c. Imprisonment 5. If owner disabled at time cause of action accrues, owner may bring suit for some specified period after the disability is over (Usually ten years) 6. Disability only matters if it exists at time the cause of action accrues 7. You cannot tack on disability: only one that matters is at time action accrues 8. It is either 10 years (if that is disability requirement) after the disability is removed, or 21 years (if that is SOL requirement) from when AP occurred, which ever is longer. 9. If the SOL is longer then extended disability statute used the regular SOL 10. Formula: a. Is true owner disabled? Yes b. Does disability exist at time AP moves in? Yes c. Would disability extension result in time shorter then typical SOL? No d. Result: Add 10 yrs to day disability removed to know when SOL will run for that piece of land 11. Examples: a. 15 yr old owns land- AP comes on- disability ends at 18, 10 years after that he is 28 years of age; But 21 years later he’ll be 36 years old. So he has until 36 years old to get AP off land b. O is 5 years old in 1980, AP moves in, in 1990 O becomes mentally disabled and in 2005 O dies. O’s heir no disability. How long to acquire AP? 2003; if O moves in, in 1990 he gains title in 2001; but true owner was 5 yrs old so in 1993 she would be 18 yrs old an has ten years after that to get title which would be in 2003; cant tack disabilities. c. O owns land in 1980 and is not disabled. A enters adversely in 1980. O dies in 1998 and O’s heir is 2 years old: Look if original owner has disability at time of adverse possession so A gets title in 2001; seems unfair since H minor but could have guardian act on behalf; only consider disability of original owner at time of AP. Disregard others. d. In 2000 O goes to jail for 2 years, then A enters adversely, when does A gain title through AP? Extended SL is 10 years from release; 2002+10=2012; Standard SL is 21 years; 2000+21=2021; So even though O disable when A entered property he wouldn’t use extended SOL; Check for disability day AP entered and Check SOL
Estates in Land
1. An estate is interest in land which: a. Is or may become possessory b. Measured by period of time even if indefinite 2. Freehold estates: a. Fee simple absolute b. Life estate 3. Defeasible estates a. Fee simple determinable b. Fee simple subject to condition subsequent c. Fee simple subject to executory limitation 4. Present and future Interest a. Present interest: i. Gives holder right to possess land right now b. Future Interest: i. Gives holder right to possess land in future c. Example: i. Before mother dies she left family farm to daughter until son graduates law school. 1. Daughter has present interest; son has future interest. 2. This is known as “vesting of interest”, future interest vested in son. 5. Functions of estates: a. Allows owner to control who will control land in future b. Allows owner to control how land will be used in future 6. Dead hand control: Allows people to have control over property after dead a. Cts and legislature attempt to deter be does not promote most efficient use of the land i. Ex: Dies and land goes from rural to city throughout time; land can’t adapt if still being controlled from beyond grave b. Two policies: i. Don’t want to tie up the land forever ii. Want to give people flexibility over how to use sensibly 7. Definitions for transferring land: a. Alienable: Can be sold b. Devisable: can be passed through will c. Descendible: Pass through intestacy when possessor dies w/o will d. Common law: Seisen: Possess land by freeholder (fee simple/ life)
Fee Simple Absolute: 1. Closest thing to having complete and unconditional ownership over land a. Fee- Interest in land b. Simple- Ownership of unlimited duration c. Absolute- No future interest can cut off the ownership 2. Duration of time is infinite: no future interest a. “To A and his heirs” b. To A in fee simple” c. “To A” 3. Transfer: When transferred new owner gets all same rights of original owner a. Alienable (sellable) b. Devisable (Passed through will) c. Descendible (Intestacy) d. No future Interest
Fee Simple Absolute Duration Creation Transfer Future Interest Notes Potentially Infinite “To A and his heirs” “To A in Fee Simple” “To A” Alienability Devisable Descendible None Don’t need “and his heirs” anymore but lawyers still use it.
Life Estate: 1. Interest in land that last for the life span of the holder 2. This is a possessory estate that expires on the death of a specified person 3. When a life estate is sold to a third party by the grantee the purchase receives an estate for a duration measured by seller’s life. a. If third party dies before seller, the estate goes to heirs of third party until seller dies, then it reverts back to O or O’s heirs. i. O to A for life. A sells to B. B dies then goes to B’s heirs’ until A dies, in which case reverts back to O. 4. Pur Autre Vie: a. Interest in land that last for the life span of a third party not grantee b. Usually endures for life of holder of the estate, but can be for life of someone else other then owner of life estate: called pur autre vie. 5. Duration: a. Continues for the length of the measuring life (terminates naturally) b. Lesser duration then a fee simple absolute 6. Terminology: a. “To A for life” b. To A for the life of B” (Pur autre vie) 7. Transfer: Continues only for length of measuring life a. Devisable (saleable) b. Descendible (Will) c. Alienable (intestacy) 8. Future Interest: Always followed by future Interest: a. Reversion: Future interest in grantor i. “O to A for life”- A life estate, O has reversion b. Remainder: Future interest in transferee (a third person) i. “O to A for life then to B”- A life estate, B remainder 9. Cts involvement: a. Cts presume fee simple absolute over life estates in ambiguous grants b. Courts may order sale of legal life estate and remainder together (forming a fee simple absolute) if sale is in best interest of all parties and consistent w/ grantors intent and necessary to prevent wastes
Life Estate Duration Creation Notes Continues for length of measuring life “To A for life” “To A for the life of B” Alienability Devisable Descendible Reversion in Grantor
“pur autre vie” – life estate measured by the life of another
Transfer Future Interest
Remainder in Third Party
Law Of Wastes: 1. Term used to describe actions of life tenant that permanently impair property value of interest of future interest holders. 2. Originally when right to property extended between two people land could not be changed and had to pass though in same condition it was received. But problem was that you couldn’t change your land to keep up with the times. 3. This law was created to prevent one owner from using property in a way that unreasonably interferes with expectation of other owners or future owners. 4. Law of wastes applied whenever two more persons have right to possess property at same time or consecutively: a. Same time: Joint tenants b. Consecutively: Life estate followed by future interest holder 5. Allows possessor to make changes as long as value remains same a. Greater interest in land; greater discretion in making decisions. i. 21 yr old given greater discretion the 75 yr old would get bc younger owner will have for longer time and more likely to internalize the costs and not exploit the land quickly. 6. If someone is wasting on land can sue for an injunction and punitive damages 7. There are two kinds to know: a. Affirmative wastes: Tenant acts affirmatively to damage land permanently- life tenant voluntarily commits waste i. Remove trees, store nuclear wastes b. Permissive: Life tenant fails to act reasonably to protect deterioration of land- permissive or involuntary waste occurs. i. Don’t repair leaking roof, don’t pay taxes on house 8. Hypos a. O to A for life then to B forever i. A has a life estate. B has a remainder in Fee Simple. b. O to A and his heirs (B) i. A has a fee simple. B has no interest until A dies. ii. A living person has no heirs! B is an heir apparent. iii. B’s creditors cannot reach the land iv. B cannot prevent A from selling land bc B has no interest yet.
v. If heir apparent land cant be touched by you/ or your creditors c. In 2002 O conveys “to A for life, remainder to B’s heirs”. B alive in 2002 dies without a will soon after, leaving C as heir. Then A dies. i. A has life estate, B nothing, B’s heirs remainder in fee simple. C can’t take it until A dies, when A dies C has fee simple absolute.
White v. Brown: Will states “I wish White to have home to live in and not be sold…my house is not to be sold”. White says fee simple, Brown says life estate. Generally, presumption is make conveyance, conveying everything owned. If own fee simple; convey fee simple, if own life estate; convey life estate. Ct finds fee simple; “ house can’t be sold” voided bc against public policy. In fee simple no restraint on alienation. Dissent thinks life estate remainder to 3rd party (nieces and nephews) or original grantor-if alive. o Rule: Unless a contrary intention appears by the terms of the will and its context, a will conveys a testator’s entire estate.
Defeasible estates: 1. Present interest in land that may end upon happening of an event in future a. Policy: Gives owner ability to determine how property will be used 2. Defeasible estates a. Fee simple determinable (automatic termination) b. Fee simple subject to condition subsequent (terminate w/ action) c. Fee simple subject to executory limitation (Future interest 3rd party) 3. Freehold estates can be made defeasible: a. To A as long as premises are used as ice cream parlor i. A has defeasible in fee simple b. To A for life, so long as premises used as ice cream parlor i. A has a defeasible life estate 4. Landlords often used defeasible lease holds to control use of apartments: a. To A for ten years as long as no pets in apartment 5. In case of ambiguous grants, courts prefer fee simple subject to condition subsequent over a fee simple determinable. a. Ex: Grant uses the words “so long as” and reserve right of re-entry b. Cts like Fee simple subject to condition subsequent better bc its closer to a fee simple and less likely to terminate. And don’t like automatic forfeitures and prefer people to take action to get land back 6. Defeasible fees and future interests: a. A defeasible fee is always followed by future interest i. Future interest in grantor- reverts back to original owner 1. “To A as long as used as sex shop” ii. Future interest in third person. 1. “To A as long as used as sex shop , then to B” Fee Simple Determinable: 1. Created when grantor intends to grant a fee simple only until a specified future event happens and uses language in grant that manifests that intent 2. Terminates automatically when the stated event occurs 3. Duration: a. Continue unless event occurs then automatically reverts to grantor 4. Indicators:
“To A so long as: “To A until” “To A while” To A during (which)” Indicative of grant for limited duration bc as soon as the event occurs right back to grantor (words indicate durational nature of estate) Transferable; but still subject to the condition a. Devisable b. Descendible c. Alienable Future Interest: a. Always called a: Possibility of reverter b. Retained interest always is grantor Examples: a. O to A so long as used for sex shop i. A has fee simple determinable ii. O has possibility of reverter 1. Revert can be explicit/implied in grant; always exists Notes: a. Abolished in California and Kentucky b. Adverse possession: Fee simple determinable has a possibility of reverted when action occurs so original owner automatically gets back the possession of land. So if he doesn’t come back on to land and grantee remains on land after the condition occurs then the SOL on AP begins to run. i. If it is ten years then eleven years after event occurs possessor who used to occupy under a fee simple determinable is now an adverse possessor in fee simple absolute.
Fee Simple Determinable Duration Creation
a. b. c. d. e.
Notes Continues unless and until the stated event occurs “So long as” “While” “During” “Until” Alienability Devisable Descendible Possibility of Reverter in Grantor
Magic words are time orientated and show durational nature of the estate Transferred land is still subject to the original condition
Transfer Future Interest
Fee simple subject to condition subsequent: 1. This is created when the words of the grant intend to convey a fee simple absolute but has attached a string to the grant so that if a specified event happens, the grantor may take action to get his fee simple absolute back 2. Conceptually grantor conveyed fee simple forever, but added (like an afterthought) a condition that will enable him to get it back if event occurs. a. Fee simple contingent on meeting a condition 3. It is not automatic like a fee simple determinable and the original owner must take action in order to get land back. a. Owner must affirmatively exercise power to get it back i. Originally: SOL does not run until condition breached and original owner attempted to get land back but was denied ii. Under modern law: If condition breached and original owner doesn’t do anything, could lose it through adverse possession iii. Equitable doctrine of laches: Undue delay in asserting right to reposes bars assertion later on: don’t wait 20 years to come back on the land and try to take it back. 4. Duration: a. Continues unless and until the condition is breached and the grantor exercises its right of re-entry and termination b. Actions needed; can’t merely proclaim intention to repossess i. Must file suit ii. Letter: Dependable- needed added facts 5. Transferable: But transfers subject to condition or event occurring a. Devisable b. Descendible c. Alienable 6. Terminology: Convey grantor entire estate coupled w/ condition to take back a. “To A but if” b. To A provided that” c. To A on the condition that” 7. FSSCS and Future Interest: a. Right of re-entry
b. Future interest is held by grantor; it gives him the right to terminate c. Always followed by right of entry to grantor whether explicit or implied in the grant d. Example: i. O to A on the condition that property used for sex shop, in the event it is not used to sell sex toys, O has right of re-entry 1. Present interest: A in FSSCS 2. Future interest: O as right of re-entry 8. Courts preference: a. Courts prefer a FSSCS over FSD due to a preference for optional forfeiture rather then automatic i. FSD can be harsh as owner relies on land
Fee Simple Subject to Condition Subsequent Duration Creation Transfer Future Interest
Notes Continues unless and until the condition is breached “On Condition that” “But if” “Provided That” Alienability Devisable Descendible Right of Entry/Right of Termination by Grantor
Transferred land is still subject to the original condition
Fee simple subject to subsequent condition (FSSCS): Fee simple contingent on some condition being met. If condition is breached property does not automatically revert to grantor, it is only transferred back to original grantor if he takes some action to exercise his rights. FSSCS is always followed by a Right of Entry in the original grantor. o Fred to Lucy on the condition that the property be used for residential purposes; in the event it is not so used, Fred shall have a right of entry. o Present Interest: Lucy has FSSCS, Future Interest: Fred has right to entry If condition is breached and original grantor does nothing about it the original grantor can lose his rights through adverse possession. All you have to do is file an action for ejectment and courts will impose a time limit for grantor to exercise right of entry or original grantor loses right through AP
SOL on right of entry doesn’t start running until grantor exercises right and is rebuffed, from that point on the cause of action arises
Fee Simple Subject to Executory Limitation: 1. Fee simple that terminates automatically upon the violation of a condition like a Fee simple determinable and passes onto a third party 2. If grantor uses words to create a fee simple determinable but gives the interest to a third party it is a FSSEL 3. If grantor uses words to create a FSSCS but gives the interest to a third party it is a FSSEL 4. Possession automatically goes to third party when condition or event occurs 5. Duration: a. Continues unless and until condition breached then automatically vest in third party 6. Terminology used: a. “To A but if X event occurs to B” b. “To A so long as X event occurs, if not to B” c. To A until X event occurs, then to B” 7. Transferable: Still subject to condition or event occurring a. Devisable b. Alienable c. Descendible 8. FSSEL and Future Interests: a. Executory Interest b. Future interest always in third party; called an executory interest c. There is always a future interest
o To Lucy, but if Blackacre is ever used as a factory, then to Mike o Lucy has FSSEL but if blackacre is used as a factory then to Mike who has an executory interest Present Interest is Lucy has FSSEL Future Interest is Mike has executor interest
Fee Simple Subject to Executory Limitation Duration Creation Transfer Future Interest Continues unless and until the condition is breached “To A, but if X event occurs, then to B” Alienability Devisable Descendible Executory Interest
Transferred land is still subject to the original condition
Extra notes on estates: 1. Statute of Limitations a. If you have a fee simple determinable, once the condition is breached the statute of limitations starts running immediately b. Only the title reverts back to the original owner. He still has to do something to get the possessor off his land c. If you have a FSSCS the statue of limitation does not run until the condition has been breached and the original owner has attempted to take his right of entry and has been rebuffed. d. Modern Law – Courts and statues have abolished the distinction between either estate. Now the statute of limitations starts to run once the condition has been breached in either case. 2. Transferability a. Common law – owner cannot sell his right of re-entry or reverter. Can only be passed on after death b. Modern Law - Some states allow possible of reverter to be sold inter vivo but not the right to reentry 3. Identifying Defeasible Fees a. Step 1: Identify the future interest holder i. Third party = Fee Simple Subject to Executory Limitation ii. Grantor = Fee Simple Determinable or Fee Simple Subject to Condition Subsequent. b. Step 2: If future interest holder is Grantor look for the magic words i. Time duration – Fee Simple Determinable ii. Conditioned – Fee Simple Subject to Condition Subsequent 4. Defeasible Fees and Adverse Possession a. Step 1: Determine type of estate b. Step 2: Determine when Statute of Limitations began to run i. Fee Simple Subject to Condition Subsequent 1. Common law – On the day the grantor exercised her right to enter
2. Modern Law – the day the breach occurred ii. Fee Simple Determinable 1. Common law – The day the breach occurred 2. Modern Law – The day the breach occurred c. Step 3: Determine if other Adverse Possession factors are met i. Actual ii. Open and Notorious iii. Exclusive iv. Hostile v. Continuous
1. Legal interest in property that is not possessory but is capable of becoming possessory in the future. 2. Possible reverter, right to re-enter, executory interest, reversion, remainder
The basics: a. Grantor: Either reversion, possibility of reverter, or right of re-entry b. Third Party: Remainder of an executory interest c. Future in interest in grantor: i. Reversion: Life estate or a term of years ii. Possibility of reverter: Fee Simple Determinable iii. Right of Re-entry: Fee Simple Subject to Condition Subsequent d. Future Interest in third party: i. Remainder: 1. Vested Remainder 2. Contingent Remainder
ii. Executory Interest: 1. Springing executory interest 2. Shifting Executory interest Hints: Life estateContingent remainderAlternative Contingent RemainderReversion Life estateVested Remainder subject to total Divestment Executory Interest
Future interest in the grantor: 1. Reversion a. Arises whenever O transfers less then his entire interest i. O to A for life ii. O to A for two years b. Reversion never follows a fee simple because when you give away a fee simple absolute you have nothing left in the estate c. A reversion doesn’t always become possessory: i. O to A for life, then to B if B survives A 1. B has remainder, or O has a reversion; depending on who dies first d. All reversions are devisable and can be passed through a will to another person 2. Possibility of reverter: a. Always follows a fee dimple determinable b. Conveys some quantity of estate that grantor originally has but conveys it with a determinable limitation attached and retains the right to future possession automatically if and when the determinable limitation occurs. i. O to town library as long as used for library 1. O has possibility of reverter 3. Right of Re-entry: a. Follows fee simple subject to condition subsequent b. Created when grantor retains power to cut short the conveyed estate for the specified reason before the natural termination Future Interest in Third Person (Grantee) 1. Remainder: a. A remainder in a future interest is a grantee that is capable of becoming possessory at natural termination of a prior estate i. Follows a life estate or term of years ii. Wait patiently for natural termination of estate holder
b. If there is a gap of time between when it becomes possessory and death of possessor then it is an executory interest, not a remainder c. Requirements: i. Held by grantee (a third party) ii. Capable of becoming possessory immediately upon death 1. No condition precedent iii. Possessory upon natural termination of prior estate holder 1. Natural termination: Death or expiration of lease 2. Never follow a defeasible fee bc those end unnaturally d. Estates in remainder: i. Remainder in fee simple: O to A for life, then to B ii. Remainder in life estate: O to A for life, then to B for life
Types of Remainders: 1. There are two types of remainders that become possessory upon natural termination of prior possessor of estate. Almost always follow life estate. a. Contingent Remainder: i. Unascertained person 1. To A for life then president in 2016 ii. Condition Precedent 1. To A for life, the if B graduates college, to B b. Vested Remainder: i. Indefeasibly vested Remainder 1. To A for life, then to B and his heirs ii. Vested Remainder subject to open (partial divestment) 1. To A for life, then to A’s children iii. Vested Remainder subject to complete Divestment 1. To A for life, then B and his heirs, but if B fired, to C” Vested or contingent: 1. Contingent future interest: a. Right of possession that depends upon the satisfactory resolution of come uncertainty or uncertainties 2. Vested future interest: a. Certain to become possessory at some time in the future Contingent remainder subject to condition precedent vs. Vested Remainder subject to complete divestment: Must recognize the difference 1. Condition Precedent: Comes before the grant or is woven into it 2. Subject to complete Divestment: Comes after grant; vested interest then vested condition
Alienability on contingent Interest: 1. If contingency is survival can’t pass by will or intestate succession 2. If results from unascertainable person, no owner to convey so it is not practicable to think alienable.
1. Remainder created in a third party that is: a. Owned by unascertainable person OR: b. Subject to condition precedent; i. Dependent upon satisfaction of some express condition precedent. Will not get remainder; event must happen to get it ii. To A if A shall become a judge iii. Death is not a condition precedent c. Anytime contingent remainder O will always have a reversion d. Courts prefer a vested remainder over a contingent remainder 2. Contingent Remainder in Unascertained person: a. A for life then to B’s children (B has no children) b. A for life, then president of 2016 c. No one alive has heirs or widows; 3. Contingent Remainder subject to Condition Precedent: a. Condition is after the grant Or Condition is woven into the grant b. Condition precedent must be expressed in grant: Hopes and wishes or death of estate holder does not constitute a condition precedent c. Always have to consider what happens if the condition does not occur d. Condition precedes the grant i. To A for life, then if B graduates to B: 1. No guarantee to occur; must happen before take estate 2. O has a reversion e. If condition is not satisfied: i. Common Law: 1. If contingent remainder subject to condition precedent has not vested by the time the life estate is over the property goes back to original grantor in fee simple a. Don’t fulfill condition by time A dies; you lose it ii. Modern Law:
1. If contingent remainder subject to condition precedent has not vested by the time life estate is over will revert back to original grantor and person who had contingent remainder has executory springing interest and once condition met property will spring to their possession. f. Future Interests: i. If first future interest is contingent remainder the second future interest will be a contingent remainder and O will have a reversion. (If condition is woven into or before the grant) ii. Contingent remainder: Alternative contingent remainder: O always always always has reversion g. Here is the Rule: i. If on a remainder the condition is before or woven into the granting language then it is a contingent remainder: 1. To A for life, then to B if he graduates, otherwise C” Vested Remainder: 1. A reminder that is in an ascertainable person 2. A remainder that is not subject to a condition precedent 3. Must necessarily become possessory whenever prior estate expires 4. There are three types: a. Indefeasibly vested remainder: i. Certain to become possessory to a particular person at some point in the future and may not be destroyed 1. To A for life, then to B and his heirs b. Vested Remainder subject to open: i. Remainder in a class of people that is certain to become possessory, because at least one member of the class is ascertainable, but it may be diluted by additional members in the future. So not all people in the group are known. ii. You know at least one person who is going to get property but more are possible. Like if A’s kids are getting everything and she has two kids, as long as she is still alive she can keep popping them out so group that inherits shit is still open. iii. It is always in a class or group of grantees at least one is always existing and identifiable and that one is entitled to possession as soon as preceding state expires iv. Class gifts: class is open for entry of new members 1. Kids of A who reach 21; A is still alive and she has one child who is already 21 years old. v. Example: 1. A for life then to A’s children: A has one child B a. A has life estate b. B has vested remainder subject to open in fee simple abslute vi. Vesting: 1. Class gifts vest when one member can be identified
2. Class turns to indefeasibly vested remainders when group closes or if use rule of convenience and one member becomes ascertainable. 3. Possible rules for closing of group: a. Fertile Octogenarian Rule: i. When person dies can’t have more kids b. Rule of convenience: “Immediately” i. Class closes as soon as it becomes possessory to one person
c. Vested Remainder subject to Total Divestment (Complete) i. Remainder that will become possessory unless some event occurs which will divert the remainder person of interest ii. The condition comes after the grant iii. If in remainder condition follows granting language, then the remainder is a vested remainder subject to total divestment 1. “To A for life, then to B. But if B shall fail school then C” iv. To A for life then to B, but if B becomes a lawyer to C 1. B has a vested remainder subject to complete divestment 2. C has an executory interest v. Future interest of a vested remainder subject to total divestment: 1. If future interest is vested remainder subject to divestment the second future interest is an executory interest and O will have no reversion. 2. Always followed by executory interest 3. Never a reversion vi. Rule to know: 1. If condition follows the granting language then it is a vested remainder subject to complete divestment vii. Examples: 1. To A for life, then to B and his heirs but if B doesn’t graduate then to C a. A: Life estate b. B: Vested remainder subject to divestment c. C: Executory Interest 2. O gives to A for life, the to B and heirs, but if C returns from Vietnam then to C and his heirs. a. A: Life estate b. B: VRSD
c. C: Executory interest d. If A dies before C reruns home B has fee simple subject to executory limitation 3. To A for life, then to B and heirs, but if B doesn’t survive A to C and heirs a. A: Life estate b. B: VRSD c. C: Executory interest
Executory Interests: 1. Future interest created in a third party that is not a remainder and that will cut short or divest another transferee’s possession or a vested future interest subject to divestment a. All are contingent b. Follows a: i. Fee simple subject to executory limitation or ii. Vested remainder subject to complete divestment 2. Two types of Executory interest: a. Shifting: i. From one grantee to other grantee in future time ii. Future interest in a grantee that divest from another grantee upon the occurrence of some condition iii. This interest cuts short the preceding estate prior to natural expiration 1. To A, but if B released from prison to B a. B has shifting executory interest that will divest A, another grantee but cutting short his FSSEL if an when he is released 2. To A for life then to B, but if B doesn’t survive A, then C a. C has a shifting executory interest that will divest B of her vested remainder subject to executory limitation is B doesn’t survive A. b. Springing: i. From grantor to grantee in future time ii. Springing executory interest is a future interest created in a grantee that divests the grantor at some future time after conveys iii. It springs out from grantor to grantee 1. A conveys property to first student to become a judge a. Future student has springing executory interest
2. A conveys blackacre to B for life, then to C if give B a proper funeral. a. C has a springing executory interest, not contingent remainder; funeral can’t happen till after B dies, so during the interval the possession will revert back to A. When C gives B proper funeral then possession will spring from A to C 3. O conveys to A when she marries a. A has a springing executory interest i. When married future interest divests b. O has a FSSEL
O conveys “to A for life, then to A’s children and their heirs, but if at A’s death he is not survived by any children, then to B and her heirs.” o Two years after the conveyance, twins C and D are born to A. What is the state of the title? o C dies during A’s lifetime. A is survived by B and D. Who gets Blackacre? A has life estate A’s children have contingetn remainder (unascertained persons) Once C and D born they have vested remainder subject to open (A may have more children) and subject to toal divestment (A needs to die with children surviving – only only becomes possessory if he has kids) and C and D have to survive A If A dies without children B gets property (B has shifting executory interest, shifts from A(3rd party) to B (another third party) If C dies during A’s lifetime, the property goes to D O has nothing To A for life, then one year later to B o A has life estate, B has springing executory interest, O has reversion during gap O conveys “to A for life, then to such of A’s children as survive him, but if none of A’s children survives him, to B and her heirs.” o At the time of the conveyance, A is alive and has two children, C and D. o What is the state of the title? A has life estate C and D have vested remainder subject to open (A may have more kids) B has alternative contingent remainder O has reversion
T devises $10,000 *or Blackacre+ “to my cousin Don Little, if and when he survives his wife.” o What does Don Little have? T has FSSEL (goes to 3rd party) Don has Sprining executory interest( (FI that follows FSSEL is executory and it divests original grantor soit’s springing) To A and her heirs, but if A doesn’t graduate, then to B and his heirs o A has FSSEL (terminates automatically upon violation of condition) o B has a shifting executory interest (if A doesn’t graduate, B’s executory interest divests A) To A and his heirs, but if A dies without issue surviving him, then to B and her heirs o A has FSSEL, B has shifting executory interest (divests A who is 3rd party)
Trusts: 1. Estate system allows grantors to control use and ownership over a few generation into future, giving owner different ways to manage estates but there are disadvantages: a. Knowing exactly who owns it in future can be difficult b. Hard to sell, don’t know who has interest; locks grantor in 2. Trusts solve problems: a. Beneficial ownership separate from legal ownership b. Trustee has legal title to blackacre and beneficial gets whatever income blackacre produces i. Trustee divides everything and allowed to change things as conditions change ii. Problem of land being inalienable bc don’t know who owner will be is resolved by trusts iii. More flexible because can now divide things up by percentages 3. Trustee has legal title to property and manages property pursuant to separate trust document and it gives trustee discretion to do whatever he wants with property, sell and reinvest or rebuild on property.. Trustee manages property and adjusts to changing conditions and beneficiaries still benefit from it.
The Rule Against Perpetuities:
1. No interest is good unless it must vest, if at all, not later then twenty-one years after some life in being at the creation of the interest a. No interest is good unless it must vest [and close] if at all no later then 21 years [and 9 months] after the death of some life in being at the creating of the interest i. 9 months take account of unborn children in gestation b. Not concerned with possession but only with vesting. c. Doesn’t need to become possessory in 21 years d. Policy: Prevents person from controlling land too long after death 2. Vesting a. Eliminates uncertainty about ownership that persists too long b. If interest is certain to vest or certain not to vest w/in permitted period it is good. c. But if there is any possibility, no matter how unlikely, that vesting could occur after expiration of permitted periods the interest is void. d. If you can come up with two different scenarios one in which an interest vests and one in which it fails to vest then it fails the RAP and the interest is void. 3. Interest is good under rule if it will certainly vest or fail to vest a. Within 21 years from its creation b. During life of some person alive during its creation c. Upon death of some person alive during creation d. Within 21 years after death of some person alive during creation i. So must identify person, living on effective date of grant, whose life can serve as measuring life for interest in question. 4. Rule applies to: a. Contingent remainders (All) b. Executory interests
c. Vested remainders subject to open 5. Does not apply: a. Future interest in grantor i. Reversion, right of re-entry, possibility of reverter b. Vested remainder subject to complete divestment c. Indefeasibly vested remainder 6. The day of the effectiveness of the instrument a. Will – the day the person dies b. Transfer – the day of the transfer c. Day of the closing d. Day of selling item and getting receipt e. Trust – the day the trust become irrevocable
7. At being when interest is created: a. Validating life b. Something to do with the grant c. If no validating life void if not certain to vest w/in 21 years i. TO A until NY falls into the sea then to B 1. Step 1: A has FSSEL; B has a shifting Executory interest 2. Step 2: Condition is NY must fall into sea 3. Step 3: Either A or B can be validating lives 4. Step 4: We have no idea if condition will be satisfied because it’s a natural event. It may never even happen. 5. Step 5: Strike offending clause – remove “then to B” a. A ends up having a FSD based on “until” b. O has a possibility of reverter c. Not subject to RAP 8. Class of people as validating life: a. It is possible to use a class of people as the measuring validity life, but every possible member of class must be alive on effective date of grant b. Class must be closed at grant to be validating life c. Class vested must close: identified, condition precedent, all w/in 21 yr 9. If it will not vest it ends up as: a. A fee simple determinable with an executory interest is called a FSSEL. If it will not vest then term scratched out and it turns into a fee simple determinable, w/ grantor possessing a possibility of reversion b. A fee simple subject to condition subsequent with an executory interest leaves us with a fee simple absolute. No future interest 10. Steps for Rules against perpetuities: a. Classify Future interest: i. Determine which future interest was created ii. RAP only applies to: 1. Contingent remainders
2. Executory interests 3. Vested Remainders subject to open iii. Rap does not apply to: 1. Future interest in grantor 2. Indefeasibly vested remainders 3. Vested remainders subject to divestment b. Identify condition precedent to vesting of the future interest i. What has to happen before future interest can vest c. Identify validating life: i. Alive and relevant person at time of conveyance ii. Doesn’t have to be named specifically, but must impact iii. Can be a class of people but class must be closed d. Will we know for certain that w/in 21 years of the end of a validating life if the interest will vest or fail to vest? i. Yes: Does not violate RAP ii. No: Violates RAP, strike the clause 11. When does a future interest vest? a. Contingent remainders and executory interest: i. Vests when condition precedent is satisfied b. Class gifts subject to open: i. When the class closes (Octogenarian or convenience) ii. All conditions are precedent for each member’s interest to be satisfied. 12. Hints and examples: a. Gift to open class conditioned on members surviving to age 21 years or older violates the RAP i. To A for life, then A’s children as live to attain the age of 30. [A is alive and has two children B and C. B is 35 and C is 40] 1. Gift to open class since A is still alive a. Step 1: A has a life estate. A’s children have vested remainder subject to open. b. Step 2: Condition is A has to die and each kid has to turn 30 within RAP period. c. Existing kids already reached the RAP but A could have more kid d. Step 3: A, B and C can all be validating lives e. Step 4: A could have another child, D, next year and she dies during childbirth. b. Executory interest with no time limit violates the RAP i. To A and his heirs so long as the land is used for school purposes, then to B and his heirs 1. A has a FSSEL. B has a shifting executory interest 2. Condition: land is used for school purposes 3. A or B can be validating lives 4. No, because the land could be used for school purposes for 100s of years before its violated.
5. Strike interest “then to B and his heirs”. A is left w/ Fee Simple Determinable. O possibility of reverter. ii. TO A and his heirs, but if the land ceases to be used for school purposes, to b and his heirs. 1. A has a FSSEL. B a shifting executory interest 2. Same idea but strike “but if the land ceases to be used for school purposes, to B and heirs” now fee simple 13. Exception: a. Does not apply to charities
14. Approaches: a. Wait and see approach: Actual i. See if violates after length of perpetuities period ii. If it vests its valid b. Uniform statutory rule against perpetuities: Uniform i. Flat 90-year permissible vesting period. If after 90 years of creation it is still not vested it is void c. Saving statutes i. Used to save transfers that unintentionally violate the Rule Against Perpetuities by shortening the time period so it fits within the 21- year limit. ii. Need some evidence of mistake or confusion. iii. Policy: Lessens the harshness of the RAP rule. d. Perpetual trusts: i. Way to get around RAP ii. Put property in trust forever; trustee has power to sell
Symphony Space, Inc. v Pergola: Broadwest had both commercial and theater building in Manhattan, wanted to sell it to the not for profit symphony in order to get a break on taxes (the symphony then leased the rest of the building other than the theater back to Broadwest)—Broadwest sold Symphony to them for less than $12,000. Broadwest paid $10 in consideration to keep open the option to re-purchase entire building, so long as closing would occur in the given years specified. Broadwest wants it back and Symphony claims option to repurchase is void under RAP o Rule: There is no exception to the RAP for commercial option agreements o NY Saving Statute: saves grants that unintentionally violate the rule against perpetuities so it shortens the time limit or consider ignoring a condition or does something to reform it so it does not violate it. In practice if the grant is
contingent on a specified time period we assume the grantor wanted it to occurs during the perpetuity period and reduce it to 21 years
1. Classify the interest. Only certain interest subject to the rule. Applies to : o Executory Interests o contingent remainders o Vested Remainders Subject to Open (Class Gifts) It does not apply to: o future interest created in the grantor (reversion, right to re-entry possibility of reverter) o indefeasibly vested remainders o vested remainders subject to divestment. To A for life then A’s children. A is alive and has no children. : A has life estate, A’s children have a contingent remainder (not ascertained). Contingent remained is subject to rule. 2. Identify Condition Precedent to Vesting What conditions need to be met for the future interest to vest o Contingent remainder (A’s kids) to be vested remainder A has to have kids and die Someone alive at time grant became effective and whose life is relevant to vesting o So anyone named in grant or someone not named in grant and in some way related 4.Determine if interest will vest or fail within 21 years of the date of the death of the validating life o Will we know for certain if the condition will be met within 21 years of A’s death. o Yes, when A dies we will know if dies with children (take estate) or not (reverts to O) o Because conveyance is going to vest or fail within 21 years we know it is valid. If you can think of one situation where it will fail to vest the interest is invalid: strike it o If it violated it would be read as To A for life, and property would revert to O 5. If an interest is not certain to vest or fail, strike it from the grant. Examples: O conveys to A for life, then to B if B attains the age of 30. B is now 2 years old. 1. Classify Interest: A has life estate, B has a Contingent remainder 2. What is the Condition? Condition is B has to attain age of 30 3. Who are the Validating lives? The validating lives are A or B (both relevant and both alive) 4. Will we know for certain if interest will vest within 21 years of A or B’s life? Yes, at the moment B dies we will know for certain whether or not he reached the age of 30. In 21 years of B’s death we will know whether B attained the age of 30. : So valid
If we use A as the validating life because 21 years after A’s life, B is only 23 so because we can’t be sure whether interest will vest or fail to vest it’s void. You only need 1 life, A or B both invalid O, a property teacher, declares that she holds in trust $1000 “for all members of my present property class who are admitted to the bar” rd a. Classify Interest: O has FSSEL (created it in self to 3 party-student who passes bar exam) Class members have springing executory interest if they satisfy condition divest original grantor (O) b. Identify Condition: admission to the bar c. Find validating Life: O and the Closed Class d. Certain to Vest in 21 years? Yes, as soon as you die we will know whether it vested or failed to vest (whether you were admitted to the bar or not) 4. “To A for life, then to A’s children who reach 25.” A has a child, B, who is 26. a. Classify interests: A life estate, B has vested remainder subject to open (RAP applies) b. Identify condition precedent: class has to close so identify all members and see if reach 25 c. Find validating life: A or B d. Will it vest within perpetuities period? Yes, the interest is certain to vest at A’s death, B is 26 and the class will close so all members will be identified (only B) and B has satisfied the condition of identifying all members and reaching the age of 25.
Co-Ownership and Marital Interests:
Types of Concurrent Estates: When the same interest in property is owned by more then one person at the same time there is a concurrent ownership 1. Tenancy in Common 2. Joint Tenancy 3. Tenancy by the Entirety Tenancy in Common: Modern default position: Unless a grant indicates a contrary intention, default rule is it’s a tenancy in common, which results from a grant of two or more persons, must specifically state other wise if not. Property acquired by multiple heirs through intestate succession is taken as tenants in common. Tenants in common own separate but undivided interest in the whole of property, . 1. Nature of tenancy in common: a. Possession: both own part but equal rights to use whole b. Ownership: Need not be equal in ownership c. Separate but undivided interest in the same property d. Transferable: alienated, devised, or inherited i. Pass in will, statute, or sell but never more then owned e. Reachable by creditors as its freely transferable i. Free transferability so creditors can take it away f. No survivorship rights i. If A and B are tenants in common and A dies his share goes to heirs, not to B. Joint Tenancy:
Joint tenants own undivided share in same interest in either real or personal property, but surviving joint tenant owns entire estate. Right of survivorship sets it apart from tenancy in common, upon death of one joint tenant the share held by remaining joint tenants increases proportionately. May only be created by inter vivos conveyance or a will. 1. Theory: A joint tenancy is not subject to probate (judicial procedure to transfer decedents property) and creditors of joint tenant must seize and sell debtor’s joint tenancy interest during life because his interest gone at death. 2. Four Unities of joint tenancy: Derived principle that interest of joint tenants must be equal in every respect. At common law joint tenancy not created w/o all four but many states relaxed rule to permit creation where there is clear intention that it’s wanted. All joint tenants must take their interest: a. Time: At the same time b. Title: Under the same instrument: deed, will, decree c. Interest type: With the same equal interests; same size and duration d. Possession: With the same right to possession of entire property 3. Transferable: Alienable but not devisable or descendible a. Can’t be inherited at moment of death transfer to other tenants b. Selling it destroys unities and changes it to tenancy in common i. Transfers create different time and title so destroys right of survivorship 4. Creation of Joint tenancy: Must express intent to create: (not favored) a. To A and B as joint tenants b. Some specific: To A and B as joint tenants w/ right of survivorship c. “Jointly”- problematic, “Joined together”- tenants in common 5. Severance of a joint tenancy: Destroy at anytime usually by conveyance and tenants in common results a. Conveyance: convey interest to third party or other joint tenancy i. Transfer to a strawman/self to self transfer as long as recorded ii. Sell your interest iii. Create fee simples iv. Put property in trust b. Partition: If nobody can decide how to use the land you can go to court and have them petition the land. They will do one of two things: i. Partition in Sale – Ct force sale of entire property and proceeds divided based on the parties percentage of ownership 1. Once its sold the requirements are destroyed (time, title, etc) so it automatically becomes a tenancy in common ii. Partition in Kind – Court physically divides land up among parties based on the percentage owned. Cts won’t order if: 1. Physical partition not in best interest of all parties 2. Physical partition is impossible iii. Agreement not to partition: Enforceable if clearly manifests parties intent not to partition and duration is limited to reasonable period of time.
c. Mortgage: Lien theory or title theory of mortgages i. Title theory: severed joint tenancy ii. Lien theory: Mortgage by one joint tenant doesn’t sever d. Lease: Most don’t regard joint tenancy as severed by lease and most of the time lease doesn’t survive death of leasing joint tenant. e. Agreement: Severed by agreement if intention clearly manifested f. Operation of law: automatically severs i. Criminal homicide: one kills the other; tenants in common ii. Simultaneous death; division into separate shares- but whoever survived longest (even if seconds) gets property 6. Riddle v Harmon a. Wife has joint tenancy doesn’t want land to go to husband. Transfers land to her self to destroy the four unities. Court says this is ok. 1. Could also use a strawman – transfer title to a third party who then transfers it back to you b. Rule: Self to self transaction to sever joint tenancy permitable c. Secret Severance i. Issue over whether the other party in the joint tenancy should be notified of your severance ii. Not requiring notice can lead to fraud in some situations. However it can be avoided by 1. Requiring the document to be notarized 7. Swartzburgh v Sampson a. Husband and Wife own property as joint tenants. Husband sells land to boxing promoter without wife’s consent. b. Issue: Can one joint tenant enter into a lease for their portion of the jointly owner premises without the consent of the other party? Yes c. Don’t have to worry about third party gaining land through adverse possession bc they are considered a tenant and not adverse to you. d. Leasing party only gets the portion of ownership that the party had. Once husband died all the property went to the wife regardless of the rights given to the boxing promoter. 8. Contribution: if you’re co-tenant or co-owner and have paid more than your share you have a right to contribution. a. Real Estate Taxes b. Necessary Repairs i. Problem, fix it but no contribution because necessary ii. Tenant can demand an accounting iii. When property sold if you saved receipts you can be reimburse c. Improvements i. No Contribution, but if in partition your improvements added to value of property then you can get money back for that, if it was a detriment to property then you bear all responsibility for Examples:
O conveys Blackacre to A, B and C and Joint Tenants. A conveys his interest to D. B dies intestate , leaving H as his heir. What is the State of the Title? o If writing is express fine, some states require “with Right to Survivorship” o A conveys interest to D destroys Joint tenancy. D is tenant in Common o B and C still have joint tenancy, they are not affected o B dies, C get’s his share. Heirs nothing. There is right to survivorship here. o C now owns 2/3 and D owns 1/3 so they are now tenants in common because interest must be equal for joint tenancy and it isn’t, this destroys unities and makes tenants in common. T devises BlackAcre to A and B for their joint lives, remainder to the survivor. o What interests are created by this devise? A and B have joint life estates and future interest is alternative contingent remainder (unascertained-A or B) : T reversion. T devises BlackAcre to A and B as joint tenants with Rights of Survivorship o What interets are created by this devise? A and B have joint tenancy in fee simple A and B share until one of them dies survivor fee simple Tenancy by the Entireties: 1. Form of joint ownership available only to husband and wives; each tenant by entirety has right of survivorship- this exists only in a few states. 2. Requirements: a. Time: Grant given at same time b. Title: Grant has same interest c. Type” Equal percentage share and same estate type d. Possession: Right to possess the property as whole e. Marriage: tenants are husband and wife 3. No severance: May not be severed; unless divorce. Neither tenant alone can destroy tenancy by entirety. Neither tenant may obtain partition nor can either spouse alone convey estate. It is indestructible as long as married. a. Can not be unilaterally transferred 4. Tenancy by the entirety not recognized in community property states: a. Community property: (Not really concurrent tenancy) It’s a form of married property. The term is used to describe the property derived from either spouse during marriage. It’s created together 5. Creation: a. Minority of states recognizing tenancy by entirety presumes (unless rebutted) ambiguous grant to husband/wife creates a tenancy in common. b. Another minority recognizing tenancy by entirety (unless rebutted) ambiguous grant to husband/wife joint tenancy if want survivorship c. Words are not enough: Need to be married and have other 4 unities i. Titles not automatically transformed when get married d. In cases where intent is ambiguous courts look at intent of parties 6. Creditors: Creditors of one spouse can not reach property of tenancy by entirety (Sawada v. Endo).
a. Reachable by creditors under common law i. Taking property did not sever the survivorship ii. Modern law makes it unreachable
Marital Interests: 1. Some states recognize Tenancy by the Entirety there are 2 different systems a. Common Law – Any property earned during the marriage is yours b. Community property – Any property earned during the marriage is known as community property 2. Cant enforce marital property K’s between husbands and wives that violate public policy a. Ex: If promise care for me when I’m sick you will get this property. b. A pre-existing duty already exists the husband will take care of wife and vice-versa 3. Common law system: a. Femmes Sole: Single woman; power to use, possess and dispose of own property b. Femme Covert: Married woman; husband and wife are one. c. Husband uber alles: Husbands right to posess, use, or convey all wife’s property except clothes and jewelery for duration of marriage. d. Wife no legal control over property but entitled to support, if divorced husband had to pay alimony. She also had right to survivorship. e. On death of husband wife had right of dower: Right to life estate in one third of each and every possessory freehold estate the husband had at anytime in marriage that is capable of inheritance by children born in marriage. i. Couldn’t be destroyed by selling it. If you bought property from husband when he died would all go to her and only way to terminate it would be to get a divorce 4. Creditors and Marital property
a. Married Women’s Property Act: the interest of a husband or wife in an estate by the entireties is not subject to the claims of his or her own individual creditors during the joint lives of the spouses. b. General: Protection of family is put above any innocent parties i. If car accident with a husband and he cant pay cant touch the land held by him and his wife. ii. Federal government has an exception and can reach property regardless of estate type. d. Sawada v Endo i. Rule: Creditor’s of one spouse cannot reach property that is held jointly as property in the Entirety (Majority) ii. Policy for protecting the property from outside creditors iii. Based on Married Woman’s Property Act that equalized the rights of husband/wife: neither party alienate the property 1. If you cant freely sell the property it can’t be taken by creditors either. 2. Joint creditors can be reached if in both names.
5. Severance by divorce: a. Equitable Distribution. Court looks at all property couple owns and finds a way to divide it based on equitable principle. b. Court looks at: i. Length of Marriage ii. Earning capacity if spouses iii. Child Care iv. Who paid for education c. Commnity Property: 50/50. No Tenancy by Entirety. Premised on notion that marriage is equal partnership and each spouse owns half of marital property and possessions and upon divorce each gets half. d. What is considered marital property is different by state i. Some only property got during marriage ii. Some s All property owned my either party ever iii. Some only property earned on wages during the marriage 1. Community property: Property is divided 50/50 e. Elkus v Elkus i. Wife was singer. Husband took care of kids while she sang. He wants money for this when they divorce ii. Court defines marital property as anything gained during the partnership that is of value. (Expansive view of property) iii. Doesn’t have to fit norms of property to be marital property iv. Take liberal view constituting marital property v. graham f. Education/Career as Marital Property
i. In Re marriage of Graham: professional degree (MBA) is not marital property because the degree does not fit the typical requirements for property 1. Cant be assigned, sold, or transferred 2. No exchange value 3. Terminates on death/ not transferable 4. Created though hard work ii. Court says its ok you cant get money for your spouses professional degrees because we will take it into consideration when granting alimony or when we divide the assets iii. Mahoney case – Also said degree was not marital property but you can get reimbursed for the money that went towards his education 6. Community Property a. All property earned by the couple or bought with the earnings, during marriage is held as community property regardless of the nominal title unless the couples agree otherwise a. Separate property is i. Property acquired by gift or inheritance ii. Property owned by a spouse prior to marriage b. Characteristics i. No right of survivorship 1. Can do whatever they want with their half ii. Transfer – neither spouse can transfer property without the consent of the other party 1. Cant sell property without others consent iii. Managements – spouse with title or possession of property manages as fiduciary 1. Has to manage it with the benefit of everyone in mind. Cant due whatever they want iv. Creditors: Creditors of managing spouse can reach whatever property spouse is entitled to manage.
Example H married to W, saves $5000 and opens a savings acount in his name only. H takes the $5000 and buys a lot , taking title in H and W and Joint Tenants. H then dies, devising all his separate and community property to his son, S. Who Owns the Lot? $5000 is community property, it was earned during the marriage Husband putting $ into account in his name only still community property, nothing chnages because one spouse can’t change the status of community property without the consent of the other spouse. When husband uses money to buy lot by joint tenants nothing changes, still community property with no right of survivorship
When H dies, his half goes to S, Wife gets her half. Now son and wife can’t own community property, they are not married so they becomes tenants in common
7. Domestic Partners and Marital Property a. Express and implied contracts are sometimes used to award property to domestic partners upon death or divorce b. They get no benefit of property law: States differ on recognition: a. NY wont enforce implied K’s b. Illinois wont enforce express or implied at all c. Hawaii allows same sex as reciprocal partners that gives them some rights d. Vermont allows same sex partners in unions e. Most states abolished common law marriage c. ALI Principles (American law institute) adopts common law marriage approach. Domestic partners must share a primary residence and a life together as a couple. d. Policy: Peoples actions are enough to establish a marriage (live together, share a residence, other couple things) i. Upon divorce, property divided like marital property. ii. Upon death property distributed according to intestate statute Leaseholds: The law of Landlord and Tenant 1. An exclusive right of possesion of real property for a specific period of time which is granted: a. In exchange for payment of rent, and is b. Subject to the terms and conditions of the lease 2. Forms of leasehold estates: (Duration) a. Term of years i. For any single fixed period of time b. Periodic Tenancy i. Fixed perios of time that automatically rened for the same period unless either party has given adequate advance notice of termination. The month to month is most prevalent. c. Tenancy at Will i. May be terminated at any moment by either party d. Tenancy at sufferance i. Tenants “hold over” remain in possession after their right to do has expired. 3. Characterizing Leaseholds: a. Part conveyances and part contract b. LL must deliver legal right to possession to tenant at beginning of term. A few states hold LL must actually deliver physical possesion. 4. Determining the Type of lease granted: a. Contract/intent approach: What did parties intend b. Property/ formalistic approach: Best to fit lease into one of four types
c. Determining is important because it dictates what rights and obligations party has. 5. Contract/Conveyane a. Parties may argue whether a particular document creates what, and e main characteristic of the lease is that you are transferring possession b. But a license or easement is only the right to use the property c. With a lease the landlord doesn’t have right to come in and use your bathroom, but an easement to use a landlords private road doesn’t stop him from being able to use it as well d. Leases are a combination contract/conveyance that contain property elements. Historically courts looked at conveyance side, but over time now viewed in light of K’s which are flexible to suit parties needs, property is not.
Term of Years: 1. Duration: A known fixed period a. To T for 2 years beginning January 2009 2. Notice of termination: None required: a. True even if start and end dates aren’t explicitly stated b. Lease is good for one year from date lease is signed c. Can also terminate by not paying rent on breaching conditions Periodic Tenancy: 1. Duration: a. Leasehold for a recurring period of time such as month to month or year to year. 2. Notice of termination: a. Required b. If tenancy is year to year: i. Common law: 6 months notice ii. Modern law: shorter time period (single month) c. If tenancy less then a year: i. Equal to period but not to exceed 6 months d. Lease must always terminate on last day of period e. Notice of termination must be fair to both parties f. Modern statutes can change length of notice period for month to month allows 30 days notice regardless of whether last day is the end of the month. (Doesn’t need to be first or last day of month)
g. Fixing period of periodic tenancies created by law: i. Year to year if rent for numerous years ii. Measured by rent calculation: 1,000 per month- monthly iii. Period measured by when rent is actually paid Tenancy at Will: 1. Duration: a. No fixed duration so long as both parties desire 2. Termination: a. Varies according to jurisdiction: i. Common law: terminable by either w/o notice ii. Modern: requires some period of notice b. Lease terminates upon death of either party c. Bilateral either party may terminate at any time 3. Determinable tenancy: If only one party has right to terminate when please Tenancy at Sufferance: 1. Tenant remains in possession after legal right to do so has expired 2. Lasts until LL exercises one of these options in reasonable time: a. Eviction and recovery of damages for lost possession b. Binding the tenant to new term
On October 1st, L leases Whiteacre “to T for one year, beginning October 1.” On the following September 30, T moves out without giving L any notice. What are L’s rights? This is for a term of years, no notice of termination required, we know in advance when it’s over, Land Lord has not rights because lease was terminated properly 1. What if the Lease was “to T from year to year beginning October 1”? This year to year periodic tenancy. 6 months notice, would have to be by March 30 2. What if the lease had been for no fixed term “at annual rental of $24,000 payable $2,000 per month on the first of each month.” Could be year to year because it says “annual” Could also be month to month because you’re paying each month o Could be interpreted either way, just know it is not a term of years because there is no fixed term. Probably not a tenancy at will because there are time intervals given. 3. What Kind of notice would be needed? a. Year to Year: 6 months notice b. Month to Month: one month notice ending at the end of the period (not mid-month) T, a month to month tenant, notified L on November 16, 2001, that she would vacate as of Novembe 30, 2001. T subsequently vacated on that date and paid no further rent to L. L, after some reasonbale efforts finally re-let the premises beginning April 1, 2002. L sues T for unpaid rent for the months of December 2001 and January through March 2002. What result? If notice given November 16, termination effective December 30 (Don’t always assume month to th th month starts on the first) If it started the 16 the term date would go to 16 Tenant is liable until termination is effective then he is released from his obligations. LL can’t get money for the remaining period just bc he wasn’t able to find new tenant
Garner v. Gerrish: D rents land from LL, lease states D option of termination at date of his choice. Donovan died in 1981, P took over as executor and wants to kick D out. P contends lease creates a tenancy at will since length of lease was indefinite (terminable by either party at will), and D contend lease, by language, created a determinable life tenancy (life estate up until an event happens). Ct takes intent based approach to see what parties meant. Finds it looks like they wanted to create determinable life tenancy. I. Agreement called itself lease but doesn’t fit neatly into any four- closest to. II. Lease creates LL/Tenant relation and poses certain rights and duties on parties a. termination of rights b.assignability c. Mitigation: eases are now looked at like contracts d. Statute of Frauds: certain agreements exempt, others never
Crechale&Polles v. Smith: P entered 5 year lease with Smith. As end of lease found out new building intended to move not imediately available. D notified P he wanted to hold over on month to month basis. P refused told D to vacate at end of lease term. D held over. P accepted payment for the first month over and now wants to bind him to a full lease term. o Rule: once a LL elects to either treat a hold over as a trespasser or to hold him to a new term, he may not change his mind. i. The general rule for hold over tenants is if T remains in possession past the term of lease you become trespasser (Tenancy at Sufferance) and LL options: 1. Evict Tenant as trespasser 2. Accept tenant and create a new year to year tenancy ii. Court says by letter P sent to D he treated him as trespasser, follow through and evict him. By cashing check for a months payment accept him as a month to month tenant and D is not liable for the other 10 months.
Discrimination against Tenants: 1. Common law gave unlimited freedom to property owner to decide whom he wished to sell or lease his property to. Currently that freedom is regulated by federal, state, and local statutes that prohibit discrimination in the sale or rental of real property on the basis of race, sex, ethnicity, national origin, age, religion, and under some states and local laws sexual orientation. 2. 42 USC 1982: The 1866 Civil Rights Act a. Prohibits private discrimination on the basis of race or ethnicity with respect to sales or rentals of real property. Violators are subject to injunction and liable for damages. b. During reconstruction of 1866 Civil Rights act was enacted providing “All citizens of US have same right as enjoyed by white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property. This provision is now codified at 42 USC 1982. Intent was to place newly anticipated blacks on the same footings as white with respect to property rights. In Jones case it was ruled the provision applied to private conduct as well as state action and congress had power under the 13th amendment to regulate this private behavior. 3. Fair Housing Act: a. Title VII of the 1968 civil rights act is the fair housing act, 42 USC 3601- 3619; In its original form it prohibited private discrimination in the sale or rental of housing based on race, color, religion, or national origin, It has been amended to forbid discrimination against people
with handicaps, people with children (not senior citizen homes), and on the basis of sex. b. Handicap defined: i. Includes a physical or mental impairment that “substantially limits at least one major life activity” but specifically excludes drug addiction or cross-dressing. Not as broad as that under the Americans with Disabilities Act of 1991. c. Several exemptions of discrimination ban: i. Sale or lease by owner of single family dwelling: Person who does not own more than three single family residences may discriminate otherwise forbidden grounds in the sale or lease of single family residences so long as he neither uses a broker nor advertises in manner revealing his discriminatory intent ii. Owner-occupied rental housing of four units or less: “Mrs. Murphy Boarding house”- small owner occupied rental housing. Permits a landlord to discriminate on otherwise forbidden grounds in rental so long as LL is an owner and occupant of house or apartment building and it consists of four units or less. However such a person may not advertise in manner that reveals discriminatory intent.
d. In the form of sections what does FHA state: i. 3404(a): Unlawful to refuse to rent or sell a dwelling to any person because of race color, religion, sex, family status, or family origin. (Limits to dwelling, not commercial LL) ii. 3604(c): Unlawful to indicate discriminatory preference in a notice or advertisement. (Policy is of social/psychological damage to society if allowed to clearly say “no blacks allowed) iii. 3604 (f): Unlawful to discriminate against a handicap 1. Not just discrimination but must also make certain accommodations for handicap person including modifying the dwelling or rules of the dwelling. iv. Exemptions: 3603(b): 1. A single family dwelling sold or rented by owner can discriminate in selling own home if owner: a. Does not own more then 3 dwellings b. Does not use a broker c. Does not advertise discrimination (3603)(b)(1) 2. Units w/in a four family home if owner lives in one unit a. Allowed to discriminate against (3603)(b)(2) 3. Senior Housing may discriminate families w/ kids a. Allows for retirement housing (3607) e. Remedies:
i. Violators subject to injunction, compensatory, and punitive damages, Jurisdiction over FHA is vested in federal courts. 4. 42 USC 1982 The 1866 Civil Rights act vs. The Fair Housing Act a. The fair housing act forbids discrimination on more grounds, but it only applies to residential housing and admits of some exemptions. The 42 USC 1982 applies to all types of property but only forbids private racial or ethnic discrimination, and has no exemption to the transaction that it applies. 5. Proof of forbidden Discrimination: a. Under either act a presumptive case of forbidden discrimination is made out if the LL’s or seller’s practices produce a forbidden discriminatory effect. Burden shifts to LL or Seller to prove he was, in fact, motivated by forbidden grounds. Mostly a matter of offering convincing alternative reasons for rejection and benign explanations for the discriminatory effect. If a forbidden ground is even one of many motivations prohibited discrimination is proven. 6. State and Local Laws: Variety of state/ local laws address discrimination in sale/rental of real property. Most apply to residential property. Grounds of discrimination vary, almost all forbid discrimination on base of race, ethnicity, or national origin; most include religion and sex; some add age, marital status, having children, or physical handicap to forbidden categories, few include sexual orientation. Statutes differ widely in their enforcement mechanisms and available remedies. 7. Key notes to remember: a. Under FHA you can discriminate if you are living in one of the units just can’t advertise it (policy: personal freedom) b. Racial motivation under Civil Rights Act can be proven by sending testers to try and rent house. If black family equal to white family gets denied that is evidence of discrimination c. At one point Germans were considered a race and discrimination against them was covered under the Civil Rights Act d. Can’t reserve spots in building to promote negotiation it violated FHA because you must be color blind; race cannot be considered e. Craig’s list not liable for others posting discriminatory ads f. States have additional laws that can go beyond FHA but never lower 8. Other forms of discrimination under the FHA: a. Family Status: i. Designed to protect people with multiple children 1. Ex: No more then 3 children: Can’t do this ii. You can refuse to rent to family with 3 kids if accommadable iii. Rule is based on size of dwelling an size of family; if they can fit in dwelling them you can’t discriminate against them b. Handicap: i. Examples include: Blind, Deaf, Wheelchair, Aids 1. Does not include addiction to drugs
ii. What constitutes discrimination against Handicaps? 1. Can not advertise “no handicap here” and iii. LL affirmative duty to make dwelling more accessible to them 1. Can not refuse to install wheelchair ramp at expense of tenant if they will pay for it, it is a reasonable request iv. Can discriminate against people w/ threatening behavior but must try and make some accommodation for them: 1. Talking to themselves or Manic depressive c. Profession: i. In most states you can discriminate based on profession 1. Not rent to celebrity if don’t want paparazzi in building 2. Not rent to lawyers, likely to sue and pick fights a. NY has statute against this, can’t discriminate based on profession in this state. 9. Not covered under FHA: a. Marital Status: Generally not protected under the FHA as party of family status i. Ex: Refuse to rent to unmarried tenant with no kids is okay ii. But if unmarried with 6 children it would be against the law not to rent to them if the dwelling has enough room and this is covered under FHA because technically they are a family, b. Sexual Orientation: i. Not protected under the FHA, though some states have rules forbidding this: Under FHA okay to refuse to rent to lesbians
Example Mrs. Murphy has an apartment to rent in her home. She places the following ad “ Furnished basement apartment in private white home”. A black couple applies and is rejected because of race. 1. Are there any violations of §1982 or §3604? Under FHA 3604 she can discriminate because it’s a private home, but she has violated 3603(b)(1) for advertising a discriminatory preference She has violated 1982 and would be guilty of discrimination 2. What if ad didn’t say “white home” She wouldn’t violate FHA because private home and it would be violation of civil rights act but hard to prove. You’d have to get black and white couple with similar financial statistics and see if they both get denied. 3. What if it said “to persons speaking only German or Swedish”? Doesn’t violate civil rights, that’s limited to racial discrimination. Violates FHA 3604(c) can’t discriminate in an advertisement based on national origin 4. What if she discriminates against Germans? Civil rights act considered Germans to be a race at the time and can’t be discriminated against 5. Does exclusion of black models from real estate ads violate FHA? If you find a sustained pattern, maybe yes. One single ad probably not 6. Owner of an apartment complex reserves a certain number of units for white applicants to guard against “white flight” and maintains integrated housing conditions, does this violate FHA?
Under FHA it’s a violation, you have to be color blind and can’t take that into consideration
Subleases and Assignments: 1. Critical issue to decide whether given transfer of a leasehold is an assignment or a sublease a. LL and Tenant have two types of privity i. Privity: is having the same interest in something 1. Privity of Contract: Parties to any written agreement 2. Privity of Estate: Shared interest in same land b. If LL sells right to ownership during term of lease i. New LL steps into shoes of old LL ii. Tenant still uses property according to original agreement c. A tenant can transfer his right to possession to other party by: i. Assignment: entire interest in land ii. Sublease: Less then entire interest in land (has reversion) 2. Assignment: a. Tenant transfers entire interest into someone else b. Privity: i. T1 assigns entire property to T21. LL and T2 do not have privity of K bc never signed ii. LL and T2 do have privity of estate 1. T1 transferred entire interest in property to T2 2. LL could sue T2 for unpaid rent directly bc privity c. Assignment of a leasehold makes assignee in privity of estate w/ LL:
i. Meaning that the assignee and landlord are liable to each other for performance of the lease, obligations that “run” with the leasehold estate- carry over from one estate holder to the next. d. An assignment of the LL’s reversion places the assignee and the tenant in privity of estate. Assignment, by itself, doesn’t destroy privity of K; i. Meaning K duties created by lease continue to be personal obligations of original parties to lease even after assignment 3. Sublease: a. Occurs when lessee transfers anything less than his entire interest in the leasehold, thereby retaining a reversion. i. Ex: Transfer land to other party for 6 months of 12 month term b. In contrast, doesn’t create privity of estate between LL and subtenant i. The subtenant is liable only to the tenant for the sublease obligations and the subtenant has no claim against the landlord for failure to perform his lease obligations. ii. There is generally no privity of K bc only tenant and subtenant have a contractual relationship c. Privity: i. T1 subleases to T2: 1. LL and T1 have privity K and privity of estate 2. T1 and T2 have privity K and privity of estate 3. LL and T2 have nothing a. LL could not sue T2 directly. LL would have to sue T1 and T1 would then have to sue T2 4. Distinguishing between an assignment and a sublease: a. Courts use two methods to determine whether any given transfer is a sublease or an assignment: i. Formulistic and common law approach: Examining the substance of the transaction to determine if the tenant has transferred his entire interest in the leasehold 1. Entire interest: assignment 2. Less then entire interest: Sublease ii. Intent approach (modern) Examine intentions of the parties b. Party’s intentions: Problem is parties often don’t appreciate legal significance of the two modes- assignment and sublease- so lack any real intention. Some cts rely on words the parties use to characterize the transfer, but words insignificant if parties don’t understand legal consequences. If they appreciate legal significance substance will probably support intentions, making reliance on labels unnecessary. Intent is difficult to know so must look at what is transferred.
Ernst v. Conditt: P leased to Rogers for a term of 1 year, 7 days. Rogers operated go kart track. Rogers negotiates to sell business to Condit and renegotiates lease. Changes term to 2 years, and permitted to “sublet” premise to Conditt on the condition Rogers remain personally liable for performance of lease terms. After Conditt took possession he quit paying rent and remained in possession. Ernst sues Conditt for rent owed. Ernst says
agreement between Conditt and Rogers is assignment; making Conditt liable to Ernst. Conditt contends it’s a sublet and he has to sue Rogers. Court identifies 2 rules: 1. Common Law/Formalistic Approach: looks at what interest was transferred i. Entire interest= assignment ii. Less than entire interest=sublet 2. Modern Rule/Intent Based Approach: Looks to intent of parties when they made the transfer. The problem with this approach is parties probably had no idea what the difference was when they wrote the agreement, so they look at what was transferred. Either way you get same result as under formalistic approach. Also difficult to prove what their intent was. Court declares it’s an assignment. Rogers retained no interest, he transferred it all to Conditt. Rule: In determining whether an assignment or a sub-leasing has occurred the court looks to the intentions of the parties Example 1. LL lease to T for 3 years. T “subleases and assigns” to T1 for 1 year. Neither pays rent. What are LL’s rights? Under formalistic approach T transfers less than his whole interest Under Intent Approach T intended to transfer less than his whole interest LL can sue T1 but not T2 because no privity. T1 can then in turn sue T2
Tenant and Landlords Rights and Duties and Remedies: 1. Tenants obligations are defined by lease, absence express lease provision law presumes existence of certain duties. Nature of duties is hybrid- estate and K. 2. Land Lords obligations are either implied or imposed by operation of law. These and other obligations can be imposed by agreement in the lease. 3. Variety of remedies available to landlord to deal with tenant’s default under the lease. Some are the product of a lease provision, others a re provided by statute, and others are old common law remedies. 4. Commercial: Office space and industrial space a. If primary use of property is to be apartments then it is residential b. If primary use is business oriented then it is commercial Tenants Rights in Subletting or assignment: 1. Unless lease expressly limits/prohibits assignment/sublease, a tenant is free to transfer leasehold in either method. Most leases do contain restrictions. 2. Lease agreements can either: a. Explicitly Permit b. Be silent: i. Courts typically construe it in favor of allowing transfer 1. Policy: Law favors free alienability of property c. Permitted with Land Lords Consent d. Explicitly Prohibit:
i. If lease prohibits (unlike fee simple) because LL has ongoing interest and we want to protect that interest ii. Rules Against Perpetuities doesn’t apply to leasehold estates because it only applies to future interest and leases are present iii. Policy: Want to respect LL rights bc he will get land back one day so he should have the right to do what he wants with it. 3. Examples: a. L leases blackacre to T under a lease prohibiting “Any assignment by T,” T is free to sublease. If L leases to T under a lease that prohibits “Any sublease by T,” T is free to assign the leasehold- Express restrictions only apply to voluntary inter vivos transfer. b. L lease Blackacre ti T, under a lease prohibiting “any transfer, whether by assignment or sublease.” If T dies, devising the unexpired leasehold to his daughter, D, the covenant has no effect. The result is the same if T dies intestate and D takes the leasehold intestate by succession. When express restrictions apply the LL may still consent to transfer. 4. Extra notes to be aware of: a. If you transfer 50 feet of a 100 feet unit i. Some cts say it is a sublease other say its partial assignment 1. Partial assignment is a better choice ii. Only way to get rid of duty of privity is to explicitly state in the lease K iii. Some cts say just because word “sublet” is in lease doesn’t mean its automatically a sublease (Ernst) 5. Limits on Landlord power to deny Consent: a. Common law permitted a landlord to deny consent to a transfer for any reason, or for no reason at all. b. Modern/Minority rule is with commercial property: that you need a commercially reasonable objection to assignment, if not must consent c. Anti-discrimination laws: i. Anti discrimination statutes limit landlord ability to reject prospective tenants, including assignees/sublessees. d. Implied obligation of reasonableness: i. Some states imply obligation act reasonably when deny consent, endorsed restatement of property; 15.2, and by statutes, Obligation typically limited to commercial leases only. ii. Policy behind this is that a lease is a conveyance and unreasonable restraints on alienability of property should not be promoted; LL reasonable so that it is fair to both sides. iii. A lease is a contract: Inherent in all contracts in the need for good faith and fair dealing; making rejection reasonable iv. Leases are not as personal as they once were. v. Factors considered commercially reasonable are: 1. Financial responsibility of post transferee 2. If you can’t pay rent LL doesn’t have to accept 3. Suitability for use of property
4. Legality of proposed property use 5. Alterations of premises 6. Nature of act vi. Commercially unreasonable factors: 1. Personal taste 2. Convenience or sensibility 3. To charge higher rent (most important) vii. Court policy: 1. LL has enough protection 2. Could put a s stricter clause in lease (sole discretion) or say that K terminates if proposal of assignment
Kendall v. Ernest Pestana: Pestana: increase rent in exchange consent to assign lease. Issue: when consent to assign lease is required can consent be withheld unreasonably? ii. Minority Rule (court adopts): in commercial property the landlord can’t withhold consent arbitrarily, consent can only be withheld if the lessor has a commercially reasonable objection to the assignment. LL is obligated to give consent if commercially reasonable. Dual Nature Logic: behind this is unreasonable restraints of alienability on property should not be promoted and LL has to be reasonable to be fair on both sides. A lease is a K and inherent in all K’s is good faith and fair dealings. Discretion
Self Help Eviction: 1. Occurs when tenant abandons property and LL comes in to take it back a. Common law had two factors: i. LL must be legally entitled to possession 1. T breaches lease or holdover ii. Re-entry must be peaceful 1. T can recover damages of wrongful eviction where LL has no right to possession or when LL’s means of removal are forcible or both. b. Modern trend: i. Self help is never available ii. Landlord must use summary proceedings to get property back c. Substantial amount of states allow self help” i. LL’s don’t know what constitutes peaceful re-entry 2. At common law a LL was entitled to reasonable force to oust the tenant himself, but today jurisdictions are split 3 ways: a. Absolutely forbids self-help. In these states a tenant may recover personal and property damages if ousted non-judicially by LL. In these jurisdictions leases that give LL right to use self-help upon tenant default and termination are void. b. Reasonable forceful self help: At opposite end some states permit LL to use reasonable force to oust the tenant
c. Peaceable Self Help: The common law rule in many jurisdictions limits self help to peaceful ousters, involving a commercial lease that explicitly permitted LL to exercise self-help upon tenant default. However, some jurisdictions define force so broadly that practically no ouster will be considered peaceful, making these states virtually indistinguishable in practice from those that prohibit self-help. 3. Courts reject common law rule: a. Potential for breach of peace is inherent in any situation where LL tries to remove tenant by his own means
Landlords options if tenant abandons premises: 1. If tenant abandons the leasehold premises in the midst of valid lease term tenant is regarded as having offered to surrender the lease. 2. Traditionally the Landlord had three options: a. Accept the offered surrender and terminate the lease b. Reject the surrender by leaving the premises untouched thus preserving the landlord’ s entitlement to rent as it comes due for remainder of term c. Retake possession and re-let the premises for the benefit of tenant 3. Today these options have been broken down; some prohibit option b (at least for residential leases) thus forcing the LL into option a or c. in order to discharge a duty to mitigate damages. 4. Options explained: a. Termination: i. Basically accepting offer to surrender ii. Incentive: Good move if market would let LL get more money for the apartment now iii. If LL elects to terminate lease after tenant abandonment tenant is treated as having surrendered the lease. Tenants obligations cease at moment of termination and surrender, not moment of abandonment. If LL elects to terminate, termination becomes exclusive remedy. The tenants liability for unpaid rent accrues
to the moment of termination plus damages created by abandonment. b. Re-let while holding tenant liable for deficiency i. LL does his best to re-rent but if market value is low or he can’t get as much rent, then he can re-let for less then original tenant was paying then sue original tenant for the difference. c. Do nothing and collect rent as it comes due (but see Sommer v. Kridel) i. Modern rule moves away from this and imposes duty to mitigate ii. However at common law and some states (NY) this is still acceptable iii. LL cant enter into premises but he does not have to look for a replacement tenant either iv. Can sue at the end of each month for rent or let it build up and sue for the total at end of the lease d. Contract damages for anticipatory breach i. Allows tenant to get around having to wait and sue month to month LL can calculate the entire terms lease and sue in advance; only if statute allows. So if tenant abandons now, Landlord sues for all rent left on term,
Land Lords Obligations: Duty To Mitigate if tenant abandons: 1. Most states hold that a LL is not free to nothing after tenant abandonment, but held to a duty to mitigate damages caused by the tenants abandonment. 2. Traditional rule: LL has no duty to mitigate because once you sell the lease the property is out of your hands for that time period and you have no obligation to control it. a. Based on the property law that equates lease with transfer of property interest in the owner’s estate. 3. Modern rule: Landlord has a duty to mitigate damages where he seeks to recover rent due from a defaulting tenant. LL must use reasonable diligence to re-let the premises and the burden of proof is on the LL because he is in a better position to demonstrate he used reasonable diligence. a. Leases should be treated like all other K’s and be forced to apply concepts of fairness, fair dealing, and equality. 4. Courts adopted modern rule that LL has to mitigate because it would be unfair to let a LL sit by and watch damages accrue when he can prevent this by making an effort to re-let and it prevents LL from abusing situation. 5. Reasonable effort to re-let: a. Each case is fact based b. Courts look at:
i. Whether LL personably or through agency: 1. Showed apartment to any prospective tenants 2. Advertised in paper c. T can rebut evidence by showing that he offered a suitable tenant who was rejected d. If LL has other vacant apartments besides one tenant abandoned, LL duty to mitigate consist of making reasonable efforts to re-let apartment. Treat apartment as if it was any other in his vacant stock. 6. NY State Law: No duty to mitigate damages
Sommer v. Kridel: Kridel leased apartment for 2 year term. He paid first months rent but before possession he informed Kridel no longer afford lease. Sommer never responded. Sommer failed to make efforts to re-let apartment Common Law: LL is under no duty to mitigate damages caused by a defaulting tenant. Modern Trend: LL has a duty to mitigate damages where he seeks to recover rent due from a defaulting tenant. LL must use reasonable diligence to re-let the premises and the burden of proof is on LL because he is in a better position to demonstrate. Court adopts modern rule that a LL has a duty to mitigate. It would be unfair to let an LL sit by and watch damages accrue can prevent by making an effort to re-let. Reasonable effort to re-let: Each case is fact based, court should look at whether LL personally or through agency, offered or showed apartment to any prospective tenants, advertised in paper, etc. T can rebut evidence by showing he proffered suitable T who was rejected NY law: No duty to mitigate damages
Constructive eviction and Quit Enjoyment: 1. Covenant of Quiet Enjoyment: a. Every tenant has the right to quiet enjoyment of the leased premises. b. A tenant’s right to no interference with lawful possession of premises is explicit or implied in every lease. c. Landlord has a duty to refrain from wrongful actual or constructive eviction of the tenant. d. In early common law it meant: i. No one could physically oust you for no reason e. Modern law: i. Landlord will not do anything or fail to do something that will prevent you from being able to use the property f. Breach by Landlord requires: i. Affirmative acts by LL ii. Fail to provide something essential that LL had duty to provide iii. That substantially interferes with the tenants use and beneficial enjoyment of the premises g. Sources of the landlord duties can be found in i. The lease ii. Statutes iii. Common Law h. Landlord has duty to act if:
Short term furnished lease has to be habitable and good repair Latent defect the landlord knows about must be disclosed Landlord has duty to maintain common areas If LL undertakes to make repairs they can’t be done negligently In some cases LL has duty to stop immoral conduct or other nuisances on property. i. Tenant can’t claim breach of quiet enjoyment for: i. Noisy Neighbors (unless specific provision in lease) ii. Criminal activity if LL takes reasonable measures iii. Office protestors or actions by third parties 2. Tenants Remedies for breach of Quiet Enjoyment: a. Vacate based on Constructive Eviction: i. If you can prove it lease is terminated and you do not have to pay additional rent. Prevents some obstacles but presents risk that courts may not agree. b. Action for declaratory judgment: i. Seek an injunction from the ct and once its granted the tenant can leave without risk ii. Don’t vacate and let court decide if bad enough for constructive eviction then you can leave without the risk (more expensive and more useful for commercial tenants) c. Remain in possession and sue for damages: i. Continue paying rent and at same time file lawsuit seeking damages. Problem is must stay in possession 3. Constructive eviction: a. Tenant must prove: i. Landlord breached the covenant of quiet enjoyment ii. Tenant vacated in a reasonable period of time 1. Reasonable depends on circumstances of case (Reste) b. If landlord substantially interferes with the tenants use and enjoyment of the leased property, so much so that the intended purposes of the tenants occupation is frustrate a constructive eviction has occurred. c. Eviction is constructive, rather than actual, because the tenant has not been physically ousted; instead the utility of physical possession has been virtually destroyed. d. The tenant may terminate the lease; move out, and thereafter will be excused from any further lease obligations. e. Landlords wrongful action: the landlord must act wrongfully, not a third party, If the alleged wrongful act is the landlord’s failure to act then the landlord must be under a duty to act.
Reste v. Cooper: Cooper leased basement of commercial office building and used for business meetings and training of sales personnel. Whenever it rained basement flooded due to fault driveway surfacing. After 1 year new lease was
i. ii. iii. iv. v.
negotiated for 5 year term. Cooper was promised flooding would be remedied. Driveway was resurface but flooding continued. After Donigan (agent who helped her) died, her complaints about the flooding were ignored. She vacated the premises and Reste sued for balance of lease. Reste contends Cooper’s abandonment was unjustified because flooding wasn’t permanent and also because Cooper inspected premises and accepted them in their condition at that time. Cooper claims constructive eviction from breach of quiet enjoyment. Reste says even if it was constructive eviction Cooper waived it by remaining there for unreasonable amount of time. Ruled under circumstances vacation was within a reasonable time and delay was not sufficient to establish waiver of construction eviction. Judgment for Cooper. Hypos: 1.) Other Tenants making too much noise: General rule: Noise created by a third part is not the problem of the LL unless an explicit provision in the lease says he is responsible Modern Rule: If LL has authority to quiet other tenants then he has an obligation to do it 2.) Cigarette smoke from other tenants coming into your apartment Modern trend is to find that this does breach quiet enjoyment but still a risky claim 3.) Criminal activity around apartments As long as the LL is taking reasonable security precautions it is enough. 4.) Protests on property General: Quiet enjoyment does not apply to third parties. Even though LL might have the power to remove them he doesn’t necessarily have the duty to do it.
Illegal Lease Doctrine: 1. A tenant under an illegal lease is a tenant at sufferance and LL is entitled to the reasonable market value of the premises, given their condition. 2. Illegal lease doctrine: K is illegal in violation of statute prohibition is void. a. Leases that violated statutory code is an illegal K and unenforceable i. Ex. LL leases apartment that violates building code 3. If apt is not up to code the tenant can argue that since ease was made in violation of statutory provision it would be unenforceable. 4. Used in situations when Tenant stops paying rent and LL sues. a. Tenant counters with claim that lease is illegal and I don’t have to pay 5. If Tenant stays in the apartment anyway LL is only entitled to rent equivalent to reasonable market a. LL is entitled to fair market value: If apt w/ all defects worth $20 a month LL entitled to that. 6. Things that don’t make lease illegal: a. Violations that develop after making of the lease b. Minor technical violations c. Violations where LL has no actual or constructive notice 7. A lease of premises that LL knows is inhabitable and in violation of local housing codes at inception of lease is illegal unenforceable lease and result is that the tenant is a tenant in sufferance LL may only recover “reasonable”
rental value of premises. By contrast a lease property that degenerates during term is valid but in breach of implied warranty of habitability. Implied Warranty of Habitability: 1. In residential leases landlord is required to deliver and maintain throughout period of tenancy safe and habitable premises 2. The common law: a. LL has no implied obligation to warrant that property is suitable for the intended purpose of the tenant so long as the tenant “has a reasonable opportunity to examine the property and judge for himself the qualities.” Under this traditional view a LL has such an obligation only if expressly makes such a warranty; otherwise “the rule of caveat emptor applies”- This rule has since partially broken down 3. Modern Trend: a. The relationship between LL’s and tenants have evolved to point where more courts find LL has some duty to maintain the premisesLL’s are better equipped to monitor and maintain their property b. Minority view: Imply into residential lease a warranty of habitability c. The majority: Warranty not implied by the existing of housing codes: “legislature creates rights and duties nonexistent under the common law… no implied warranty of habitability exists”: Restatement phrases this emerging duty as a warranty of suitability for residential use (5.1) d. Under either label it is really an implied in law obligation of the LL to provide premises that are fit for human inhabitation, both at inception of lease and continuing throughout the term of lease. 4. Warranty of habitability consists of 2 separate obligations: a. An implied warranty of habitability that properly refers to the warranty implied at inception of the lease b. Implied continuing duty of repair. 5. Landlord obligations: a. Required in residential leases to deliver and maintain throughout the period of tenancy a safe and habitable premises b. Breach occurs when: i. LL- notice and fails to correct w/in a reasonable time ii. Premises are uninhabitable in the eyes of a reasonable person 6. Tenant must show: a. He notified LL of deficiency or defect not known to LL and allowed reasonable time for correction b. Premises are uninhabitable in eyes of reasonable person i. Eyes of reasonable tenant not just a tenant so things like a pool and fitness center are not covered by warranty. 7. Rationale: a. Implied warranties of quality and fitness are a commonplace feature of K law, leases are K’s so should be a feature of landlord tenant law b. Urban tenants lack the skills necessary to repair uninhabitable premises and judgment necessary to detect such premises
c. d. 8. a.
b. c. d.
Implied warrant of habitability is necessary to redress the unequal bargaining power of rich landlords and poor tenants Implied warranty will encourage compliance with housing codes Waiver by tenant: Courts uniformly hold that tenant may not waive the landlord’s obligation to provide habitable premises. Some cts hold that implied warranty of habitability may not be waived under any circumstances. Restatement 5.6 permits waiver of landlords obligations only to extent such waiver is neither unconscionable or against public policy. Remedies: Remain in possession and withhold the rent i. Problems: If you withhold and ct finds you were wrong you now owe damages as well ii. A complete defense based on tenants failure to pay rent not a defense if tenant is holdover and LL seeking to evict. Terminate lease and leave then sue for reimbursement and damages i. Relocation costs plus excess of replacement rental Repair and Deduct: i. Use reasonable amount of to make repairs sufficient to bring premises into habitable condition Remain in possession, pay rent, and sue for reimbursement in the form of a rent abatement or deduction and damage for discomfort
a. b. c.
d. e. a. b. c.
Damages available: Value as warranted: Tenant entitled to difference between value of premises as warranted (habitable) and the value of the premises as is (uninhabitable): stated rent reduced to actual value Value as-is: Entitled to difference between stated rent and actual fair value of premises in uninhabitable condition. Proportionate reduction: Tenants rent obligation reduced to percentage of stated rent. Fair market value of premises as warranted (habitable), computes value as is (uninhabitable), compute percentage relationship of actual value to warranted and apply to percentage of stated rent. Restatement 11.1 In circumstances involving willful, wanton, and fraudulent conduct on the part of the LL a tenant may be entitled to punitive damage as well Also available are extra damages for annoyance and discomfort Limitations: Generally limited to residential leases, but few cases apply to smallscale commercial T. Measure is standard set by local housing code. Landlord is not in breach until he has been notified of the uninhabitable condition and given reasonable opportunity to correct Minor violations does not trigger landlord implied duty to repair
a. b. c. a. b.
14. a. b.
Benefits: Do not have to vacate the premises- stay and withhold rent Don’t have to prove the LL had a duty because its implied in warranty More generous assessment of damages available Retaliatory eviction doctrine: Landlord may not evict a tenant, even if entitled to, if landlord seeks to evict tenant in retaliation for the tenants reporting of housing code Tenant has burden of proving but in some states retaliatory motive presumed if LL terminated lease, raises rent, or decreases service w/in certain time period after the tenant complained; LL has burden Wastes: Voluntary Waste: arises from affirmative action. Occurs when a T actively changes the property’s use or condition, usually in a way that substantially decreases the property’s value Permissive Waste: (Involuntary) results from inaction. T fails to prevent some harm to the property. i. Common Law: T had duty to make repair) ii. Modern Rule: T doesn’t have to make repairs, LL in a better position to make them. It is now harder to show T responsible for permissive waste
Chicago Board of Realtors v. City of Chicago: True goal of rent control ordinance was to promote public health, safety and welfare but the effect was LL’s not allocating resources to improving housing and made rents higher and tenant screening more scrutinized. Middle class benefitted. Poorer tenants, LL’s and banks suffered. Rule: A rent control ordinance which makes minor reallocations of rights between landlords and tenants is reasonably related to a legitimate public goal
Record Statutes: 1. Facilitates certainty in title and land transfers: a. Ex: Buy land I go to recording office and see if seller owns the land. If he does I’m confident in buying it and once I purchase am protected 2. A public official in each county, often called the county recorder, maintains a record of transactions affecting real estate located in the county, but that record is only as complete as what is presented to the recorder for filing. 3. Any instrument affecting realty may be filed and recorded so long as it meets the formal requirements for recording. a. Basically any real estate document should be recorded 4. Policy reasons behind it: a. Provides some insurance that land will be yours b. Makes it easier and more efficient to transfer property between people c. Preservation of important documents 5. Common law: a. Absent any recording statute the first in time argument will prevail b. Prior in time, prior in effect
i. If I sell property to A then sell same property to B, A has better title to it because A had it first. 6. The most common instruments recorded are: a. Judgment liens b. Tax liens c. Installment sale contracts d. Leases 7. Specific requirements include: a. Description of property b. Name of grantor and grantee c. Signature of grantor d. Notarization e. Transfer tax 8. Failure to record: a. Deed is valid without recording but a unrecorded deed will lose out to a recorded deed if both deeds are from same grantor to same property b. Between two innocent parties the one who could have avoided the injury at least cost will be penalized i. If I bought land and didn’t file deed and someone else bought same land and filed deed I lose because I had opportunity to record and am least cost avoider; easy for me to just record it. c. Not recording is only a problem if third party wants to buy d. Example: i. O to A A doesn’t record deed ii. O to B B records deed 1. Between O and A; A prevails 2. Between A and B; B prevails Types of Recording statues: 1. Race statute: a. Party who records deed first wins b. Subsequent purchaser for value prevails if he wins the race to record, regardless of whether he had notice of prior transfer c. Benefit is very efficient d. Downside leads to unfair results e. Not often used: only 2 states i. O to A not recorded ii. O to B recorded with knowledge of A’s prior purchase 1. B prevails he recorded first 2. Notice Statute: a. Look at whether second purchaser had notice of prior transaction b. Subsequent purchaser of value prevails if no prior notice of prior unrecorded instrument regardless of which party first to record c. Doesn’t matter who records take interest without any notice of prior interest you win i. O to A: Not recorded
ii. O to B: No prior notice and not recorded 1. B prevails if he had no notice 3. Race Notice statute: (New York has this statute) a. Look at who recorded first and what notice they had b. Subsequent purchase for value protected if he is without notice or prior unrecorded instrument and he wins the race to record c. Bonafide purchaser wins by recording first and having no prior notice i. O to A: Not recorded ii. O to B: Not recorded and no notice iii. A then records followed by B recording 1. A wins: B had not notice but A won the race to record 4. Florida Notice Statute: a. No conveyance, transfer, or mortgage of real property or of any interest therein, nor any lease for a term one year or longer shall be good and effectual in law or equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to the law. i. Conveyance, transfer or mortgages of real property covered ii. Creditors and subsequent purchases are protected iii. Have to prove that you purchased and without notice 5. California Race Notice Statute: a. Every conveyance of real property or an estate for years therein other than a lease for a term shorter then a year, is void against any subsequent purchaser or mortgager of same property in good faith and for valuable consideration, whose conveyance is first recorded i. Everything real property is covered ii. Subsequent mortgagee or purchaser in good faith protected iii. Prove valuable consideration, first recordation, and good faith Bonafide Purchaser: “Subsequent Purchaser of value” 1. Person protected by the recording statute: under all 3 recording acts bonafide purchaser is protected against all prior unrecorded interests. 2. Bonafide purchaser is one who gives valuable consideration to purchase the property and is without notice of a prior unrecorded conveyance. 3. Requirements of bonafide purchaser: a. Subsequent purchaser b. Purchase in good faith c. Without any prior notice d. Spent valuable consideration purchasing an interest in real property i. Necessary to spend substantial amount of money on property 4. Notice and race notice recording intended to protect the Bonafide purchaser 5. Donee does not receive protection bc not given value: gift or inheritance
Race acts protect bonafide purchasers only to extent that they recorded first 7. Three types of notice: a. Actual notice: You actually know before closing prior unrecorded existing interest, evidence beyond record to prove actual notice b. Record Notice: An instrument validly recorded so you are presumed to have knowledge of any interest in the land. It is a constructive notice c. Inquiry notice: Subsequent purchaser has an obligation to make reasonable inquiries and is charged with knowledge of what those reasonable inquiries would reveal. i. Suspicious facts put you on inquiry notice: duty to follow up ii. Party in possession gives notice of any interest that they might have. Buyer is on inquiry notice, cant claim no notice 8. What can buyer do to protect against all these undocumented interests? a. Seller reps: Reps seller makes; promises good title b. Seller Indemnity: if breach rep indemnify buyer for loss c. Tenant estoppel – T must give LL an estoppel certifying what and how long lease is. Cant sign and say differently d. Subordination and non-disturbance agreements – tenant agrees to give up interests to purchaser, new purchaser agrees not to kick T out- LL sells building to someone else but new LL agree not to kick T out
Harper v Paradise: Two deeds exist. Woman w/ second deed records first claims bonafide purchaser and protected against earlier deed. Court says No: second deed referenced first deed and should have put you on inquiry notice. Should have made reasonable efforts to find out what original deed said. Takeaway: If reasonable reason to investigate and choose not to you still on constructive notice of anything that would turn up. Have to at least make reasonable attempt to find out what situation is. Waldorff vs. Insurance: Waldroff wins even though they recorded their interest after the bank. Court says Bank should have had constructive notice that someone else had an interest in the land based on the fact that people were living in the apartment even though it may have been illegally. Takeaway: Before you purchase property you need to inspect it because you are responsible for any interest that would be revealed through a proper investigation Physical possession, easement, etc
The Law of Servitudes: 1. Land can be controlled in several ways: 2. Private contractual interests run with the land and bind successive owners 3. There are three major types: a. Easements b. Real covenants c. Equitable Servitudes 4. Non private agreements:
a. Nuisance: Judicial remedy for unreasonable use of land when one person uses property in a way that interferes with another’s use of property. i. Implied agreements exist between neighbors that they use their property in a way that will interfere with each other b. Zoning: Legislative method of regulating land use i. Deals with things that aren’t horrible but that you don’t want on your block ii. Residential zones, commercial zones, industrial zones iii. Allows for more broad regulating by land creating residential, industrial, and commercial zones iv. Keeps zones separated and grouped together 5. Profit: a. A profit is the right to take a natural resource or crop from the land of another. Typical profits include right to take minerals, timber, fish, game, or crops. Common law cts preferred to construe profits as in gross rather than appurtenant, because in their origin many profits were vested in the landless. b. It makes economic sense to treat profits as in gross because the right conferred has substantial economic value by itself and thus is more efficiently utilized if it is easily transferable by itself, rather than as an adjunct to some unrelated property c. Profits are freely assignable 6. Licenses: Simply permission to enter the licensors land. (Dinner guests, workers, shoppers all have licenses). They may be oral or written and are revocable at any time unless the licensor makes the license irrevocable, either expressly or by conduct. a. Ex: A tells neighbor F may leave his canoe on A’s beach. F has license to do so, but A may revoke license whenever he wishes.
Easements: 1. Background: a. A right to use another’s land. The right may be appurtenant to land ownership or purely personal. Personal rights to take things from another’s land are called profits. Negative easements (the right to prevent another person from using their own land in a certain way) do exist but only in limited circumstances. Easements may be created by grant, estoppel, implied from prior use, implied by necessity, and prescription. 2. Distinguish from fee simple, profit, and license:
a. An easement is an interest in land that entitles the holder to use land owned and possessed by another person. It is not a free hold estate. An easement almost always gives its owner the right to exclusive possession of one’s own land. In rare circumstances an easement may give its owner the right to prevent another person form using their land in a certain way. A profit is an implied easement it is a right to server and take something from the land (lumber or fish) and a license is a revocable right to use or enter property of another (a dinner guest is licensed to be in your house for party but it is temporary) b. If the interest conveyed is a limited areas for a limited purpose, especially if there are no defined boundaries, an easement is likely the intention not a fee simple. 3. Define: a. Easements are irrevocable interest in real property that entitles the owner to use or control property owned by another. b. Since it is real property easements usually need to be in writing to satisfy the statute of frauds c. Once you have the written easement it must be recorded so the interest is protected. 4. Classifying Easements: a. There are two ways to classify easements: i. Affirmative of negative ii. Appurtenant or in gross b. This will result in there being four types of basic easements: i. Affirmative appurtenant ii. Negative appurtenant iii. Affirmative in gross iv. Negative in gross
5. Easement Appurtenant: a. Two pieces of land: one benefit/ one burden its easement appurtenant b. Benefits the owner in the use of his own land and the right attaches to the land itself not the person c. When cts can’t distinguish appurtenant or gross; usually appurtenant d. Involve two pieces of land: i. Dominant estate: Benefited estate ii. Servient estate: Burdened estate e. Definition of appurtenant:
i. Something that belongs or is appertained to another thing. f. This is one that benefits the owner of another parcel of land. The benefited parcel is called dominant estate and burdened parcel is the servient estate. An easement appurtenant passes with dominant estate whenever dominant estate is transferred to new owner. Unless purchaser protected by recording act and easement was not recorded. Easement right incidental to, or appurtenant to, the dominant estate. g. Exampes: i. R owns blackacre, G owns whiteacre, adjacent parcel. G grants easement across whiteacre from blackacre for passage to and from beach. Easement benefits whoever possesses blackacre and therefore appurtenant to blackacre. If R sells blackacre to D, easement passes and D may also enjoy easement. ii. B lets A swim in B’s pool: 1. A has benefit (Dominant), B has burden (Servient) 2. Benefit attached to A’s land and not to person 3. If A sells house to C, C also has right to swim in B’s pool 6. Easement in Gross: a. Involves only one piece of land a personal relationship i. Land is a servient estate (burdened estate) there is no dominant estate because the right attaches to the person and not the land b. Benefits owner personally and not in capacity as land owner c. An easement that is assigned to deliver a personal benefit rather than a benefit to a landowner is an easement in gross. Easements in gross are not attached to, or appurtenant to, the parcel of land, they create a personal right to use servient estate d. Presumption when vague between appurtenant/gross: its appurtenant e. Example: i. O, owner of blackacre, grants to PC right to string electrical transmission cables over portion of blackacre. PC does not own any property benefited by grant so easement is in gross ii. B lets A swim in pool because he likes him 1. If A sells house to C; C can’t use pool but A can always come back for a dip 7. Affirmative Easement: a. Permits a person to use the servient estate in a specified manner b. Grants other personally or a property owner to enter/use other’s land c. Overwhelming majority of easements are affirmative. d. Example: i. A’s right to use a pathway on B’s property is affirmative 8. Negative Easement: a. The right to restrict another’s use of their own land
b. Confers only the right to prevent specified uses of the servient estate; it confers no right to use the servient estate c. Example: i. A’s right to prevent B from building structure on B’s property that blocks A’s windows. ii. J, owner of hillside, grants D, owner of Laurel, the right to prevent diversion of the flow from the irrigation ditch that crosses hillside on its way to Laurel. This is a negative easement appurtenant. Laurel, the dominant estate, has no right to use hillside, the servient estate but does have a right to prevent hillside from being used in a way that would divert the flow of water in the irrigation ditch. d. Common law recognized four negative easements all appurtenant: light, air, subjacent or lateral support, and continuing flow of artificial streams, By these easements owner of servient estate could not block off his neighbors light or air or excavate to undermine neighbors structure or surface ground or stop or divert irrigation ditches. Modern courts analogized there four by permitting negative easements for view and solar collection. e. It is sometimes said that negative easements are always appurtenant, although frequently are, may also be in gross. 9. Creation of Easements: a. Easements may be created by: i. Express Grant: 1. I give right to cross my property to get to public road 2. Has to satisfy statute of frauds and be in writing 3. Should record easement with county office ii. Estoppel (though usually called irrevocable license) 1. Land used in particular way for significant amount of time in a way that becomes relied on 2. Improve land at considerable expense and relied on iii. Implication (two different ways) 1. Prior Use 2. Necessity iv. Prescription 1. Similar to adverse possession 10. Creation: Easement by Estoppel: (Irrevocable license) a. General understanding: i. A regular license can become irrevocable (an easement) if the licensee changes its position in reasonable reliance on statements or silence of licensor. At that point it may become unfair to revoke license 1. Change in position: $ on constructing improvements ii. Estoppel is based on common law so guidelines differ from state to state and some don’t even recognize it
iii. Easement to estoppel is exception to statute of frauds- fair to grant easement even though not in writing Assignment: i. Licenses are generally not assignable but rule is not invariable. Licenses are assignable if parties intend and if a license becomes irrevocable thorough operation of equitable estoppel, thus becoming an easement appurtenant. License or Easement in gross? i. The difference is that an easement may not be revoked and continues to bind successors to the servient estate that had notice of it, while licenses are revocable and binds only the licensor so long as it remains alive. ii. Same ex may be construed as license or easement in gross. If A’s act was construed as easement in gross in F, easement could continue to inure to Fred benefit if A sold his beach to W after telling W about F’s right. Not so if it is a license. iii. Courts prefer to construe ambiguous cases as creating a license, bc easements in gross are often difficult to eliminate and depress the land values and make it less alienable. Irrevocable licenses: Three different ways: i. Intention: License is irrevocable is licensor expressly makes it ii. Equitable estoppel: iii. License coupled with an interest Equitable Estoppel: i. If a licensor grants a license on which the licensee reasonably relies to make substantial improvements of property, equity requires that the licensor be estopped from revoking license. ii. Durations: License made irrevocable through equitable estoppel continues to exist until the reasonable expectations of the parties satisfied, Where valuable improvements made this may be at least as long as useful life of improvements, some cts hinted that may last forever (“as long as nature calls for it”). iii. Easement compared: Easement of indefinite duration can continue forever, An irrevocable license may last for short period (one that expires when value of improvements recouped), but irrevocable license may be as long as easement iv. Irrevocable license is similar in its essentials to an easement. It’s Irrevocable to prevent licensor from fraud upon licensee. v. Minority view rejects equitable estoppel to oral license. Rationale is irrevocable license is distinguishable form easement and statute of frauds ought to apply to can creation of irrevocable oral licenses. “The right is essentially an easement and should be subject to written grant” Holbrook v. Taylor: i. Permitted Taylor to use roadway across his property in order for Taylor to reach own property. W/ H’s knowledge and w/o
objection T used the access road to construct substantial single-family residence, H later blocked the road with a steel cable strung across it. Held: H was equitably estopped from revoking license g. Policy arguments: i. In favor of irrevocability based on estoppel is unfair for licensor to stand by and watch licensee expend money and effort in reliance of license then rescind it. ii. Against it is that estoppel penalizes the “good neighbor” who fails to say no until improvements completed. Land owner who freely givers permission is the one who bears cost of irrevocable license on land, so licensee should pay licensor cost of irrevocable license h. License “coupled with an interest” 1. When a license is tied together with some other legally recognized interest the license is irrevocable until other interest is vindicated. 2. Ex: A agrees to purchase from B a truckload of fertilizer payment made after delivered and spread on A’s field. By K A has granted license to P to enter land and it is couple with P’s interest in performance of K, so may not be revoked until P had reasonable opportunity to perform. 11. Creation: Easements by Grant: a. Most easements are created expressly by deed by other grant. An easement is an interest in land and its creation is subject to statute of frauds that requires it be in writing signed by grantor. i. Grant: Easement that is in favor of the purchaser to allow them to use easement ii. By reservation: Convey land and in the same deed purport to “reserve” an easement in favor of the grantor or third party 1. Modern is in favor of grantor but not in favor of third party
12. Creation: Easements by Implication: a. Selling property and Easements i. When selling property an easement can be implied in two ways 1. Implied Grant 2. Implied Reservation ii. Implied Grant– Easement that is implied in favor of the purchaser to allow them to use the easement 1. Rationale: Seller must have intended for the buyer to continue to use the easement. Doesn’t make sense that a
person would sell their land and destroy their easement in the process. 2. Easier to claim then an Implied Reservation iii. Implied Reservation – Easement that is implied in favor of the seller that allows them to continue to use their easement. 1. Courts hesitant to find Implied Reservations for sellers 2. Rationale: If grantor wanted to make reservation would have put it in deed since they wrote the deed 3. Policy: If deed is silent on an easement and the court implies one it could potentially contradict the deed. b. Easements may be implied in law under two circumstances: i. Implied prior use: Where property has been divided by a common owner and prior to the division on portion of the property has been used in an easement-like fashion for the benefit of another part of the property ii. Necessity: Where property divided by a common owner in such a manner that an easement for access is necessary c. Elements needed for implied easement if parties intended to create: i. Claimant is conveyor or conveyee (harder for grantor because he should have done it) ii. Terms of conveyance iii. Whether any consideration was given for it (knock money off price to allow continued use of easement) iv. Extent of necessity (Are other sewage lines available) v. Prior use of lands (Line has been there for many years) vi. Extend of knowledge of easement; known or should have been
d. Easement implied from proper use: Easement by Implication i. Problem is to identify when parties to a conveyance intend to create an easement without explicitly saying so, elements and principle factors to establish easement from prior use are: 1. Common owner: Prior to division the quasi-servient estate and quasi-dominants estate owned by same 2. Reasonable necessity: the prior use is reasonably necessary for the owner of the dominant estate to use and enjoy her property
a. Doesn’t need to be strict can be implied if not allowing easement would cause great expense or inconvenience b. Greater showing for necessity in implied reservation then implied grant. c. Remains as long as its expensive/inconvenient to not use the easement or other factors change 3. Continual use: Must be continuous and not sporadic; not constant but easement embodied in some permanent physical alteration 4. Intended continuation: Parties must intend, at time of division to continue the prior use 5. Existing use: Prior use must be existing at time of division a requirement implied by element of intended continuation a. Existing use of one parcel to benefit another 6. Apparent: Prior use must be apparent which does not necessarily mean visible; it could be detected or inferred from reasonable inspection of premises. a. Purchaser is on inquiry notice b. Without this would be bonafide purchaser and protected by the recording act Van Sandt v. Royster: Bailey owned lots 4, 19 and 20, at the time the city built a public sewer on her block and a drain ran through her 3 lots. She conveyed lots respectively to Gray, Van Sandt and Royster. 2 of the homes drains were connected to the drain under VS’s home. 1936 VS discovers flood in basement and upon investigation discovers sewer drain. VS sued to stop Royster and Gray form using sewer line. Judgment entered for R&G and VS appealed claiming no easement created bc no indication on his deed, and even if there is one he’s not bound by it bc he’s a bonafide purchaser (subsequent purchaser, for valuable consideration with no notice). No notice easement was there, it wasn’t recorded. R&G say they have easement(right to use sewer) bc when Bailey owned there was quasi easement (point of easement is one piece of land benefits other party- so if benefitting yourself its quasi). When Bailey sold lot 4 (dominant estate) she forgot to record easement but travels with sale of lot. Court implies easement from prior use, when grantor sells servient estates it’s implied they meant for easement to pass e. Easements implied from Necessity: Easement by implication i. Only when a common owner divides property in such a way that one of the resulting parcels is left without access to a public roadway. An easement for right of way between landlocked parcel and public road across other owners parcel is then implied, either because parties must have intended this result or because economically efficient and socially beneficial to create easement for access. ii. Requirements for easement by necessity are much harder to prove then those for substantial use.
1. Have to show no alternative except using easement 2. Only permitted for right away Common owner: Can be created only over property owned by the person who also owned the landlocked parcel and who divided the property to create the access problem. In cases of multiple divisions an easement by necessity is created at the moment a parcel is landlocked and the easement burdens the last parcel split off by common owner (the parcel that completed the landlock). Necessity at severance: Not prior use: 1. Necessity must exist at moment the property divided 2. No prior use needed to establish easement by necessity 3. The necessity of access is present at the moment the parcel is landlocked though the practical need may lay dormant for years. Termination: 1. Terminates upon termination of necessity Othen v. Rosier: 1. Seller sells part of his property but forgets to put easement in deed allowing him to cross the sold property and access the main road 2. Seller argues for Implied Easement through Necessity or Implied Easement through Prescription: ct says No 3. Focuses on the element of necessity at the time of severance: at the time the land was sold guy also owned land on the other side that he could have crossed to get off the property. Therefore necessity did not exist at time of sale
To create easement by necessity you need: o Original unity of ownership of dominant and servient estate o Easement is necessary not for convenience (no necessity existed at time of severance (original owner wasn’t land locked) o Necessity existed at time of severance of the 2 estates Once necessity is terminated easement is terminated.
13. Creation: Easement by Prescription: a. Allows you to get an easement through an adverse possession theory b. Easements are not possessory interests so an easement can not be acquired by adverse possession, but adverse use is for a sufficient time period can ripen into an easement by prescription, c. Elements of prescriptive use that are needed: i. Adverse under a claim or right ii. Open and notorious iii. Continuous iv. Prescriptive period
v. Actual Use 1. Note that exclusive use is not effectively required d. Actual Use: i. Has to an affirmative use, cannot gain a negative easement 1. Ex: Fat that I never blocked by neighbors view does not mean that I can’t build a shed and block it now. e. Prescriptive period: i. Same as limitations period applicable for adverse possession so if jurisdiction 20 yrs limit then adverse use must continue for 20 years in order to become easement by prescription f. Adverse under a claim of right: i. Use of another’s land must be adverse not with permission 1. Majority: Need express consent or hostile/adverse. 2. Owners silence on matter still amounts to adverse 3. Objective test: whether a neutral observer would think use is under claim of right and not permissive 4. Subjective test: adverse user to prove she had good faith belief that she had right to use land. g. Open and Notorious: i. Adverse use must be conducted in way that is discovered by any reasonable inspection. Not carries out in secret or concealed; provides landowner with inquiry notice. h. Continuous use: i. Adverse user continually asserts claim of right by making whatever use consistent w/ nature of the claimed easement, even if use is periodic. Does not mean they use it constantly. i. Prevention of easements: i. To prevent prescriptive easements from being acquired you must effectively interrupt use prior to end of statutory period. 1. Must stop action- attempting to stop not enough a. Build fence people stop walking on lawn but they climb over it and walk anyway0 building fence is not enough; fact that they are still walking on lawn only increase arg for adverse possession. 2. Can also explicitly grant permission: People no longer adverse 14. Easements Benefits: a. General i. Easements don’t disappear because original grantor moves, dies, or sells the property. ii. Main benefit of easements is that they stay with the land regardless of who owns it b. Validity of Easements c. If Recorded – subsequent purchaser can use the easement d. Not Recorded – Subsequent purchaser can use the easement as long as he is a bonafide purchaser
15. Transfer of Easements: a. Transferability depends on type of easement b. Easement Appurtenant: i. By nature they are transferable; they are part of title to the freely transferable dominant state. ii. Assignment: Benefit and burden pass automatically to assignees 1. Unless purchase has no notice (bonafide purchaser) c. Easement in Gross: i. Commercial easements in gross are assignable ii. Noncommercial easement in gross are not assignable unless the parties intend to permit assignment. iii. Recreational easements in gross cannot be assigned 1. Easements for recreation (hunting, fishing, swimming) are more personal in nature 16. Division of Easements: a. Different rules of division apply to appurtenant then to gross but both have same objective; to prevent an unintended increase in the burden of the servient estate. b. Appurtenant easement: i. Division: 1. General rule is that a dominant estate may be divided and that each part of the divided estate is entitled to enjoy the easement. 2. Subject to limit that the resulting increased burden on servient estate must be within the original contemplation of the parties. 3. Courts consider whether division of dominant estate is: a. A normal development, b. If it were foreseeable c. Burden on servient is substantially increased.
c. Gross Easement division: i. Exclusive easement in gross to one person: 1. Person has right to divide unless contrary to intention of original parties or places an unreasonable burden on servient estate. ii. Exclusive easements in multiple persons: The “one-stock” rule: 1. If a profit of easement in gross is exclusive and vested in two or more people the traditional rule is that division
is permitted but the easement of profit must be used as single unit. Joint users may divide their easement but that entire use must be conducted as single unit to prevent undue exploitation of resources by one user at expense of fellow users. iii. The “no increased burden rule”- One stock rule dominates but some courts in favor of division is burden on the servient estate is not increased beyond what originally contemplated. iv. Example Miller v. Lutheran: 1. Frank and Rufus miller jointly owned right to fish, boat, and bathe in lake Naomi. When Rufus’s estate began to grant separate licenses to third parties for these purposes frank sough to enjoin the licensees from using lake, partly on the ground that Rufus’s estate lacked any legal authority to subdivide the rights by granting separate licenses. Ct rules that boating, bathing, and fishing easement in gross held jointly by miller brothers could not be divided. 17. Termination of Easements: a. Easements are extinguished in several ways” i. Merger: Owner of dominant estate becomes owner of servient estate extinguished because only in land owned by someone else; if owner then divides estate it is terminated unless easement is re-granted. ii. Release: Express release that terminated the easement un writing and usually recorded at clerk’s office iii. Abandonment: Action more then non-use that shows intent to abandon; must be clear/unequivocal intent to abandon iv. Prescription: Servient landowner prevents dominant landowner from suing easement for the statute of limitations so he wrongfully loses right to prescription easement, v. End of necessity: Necessity for easement no longer exists vi. Condemnation: Govt takes land through eminent domain vii. Destruction: Servient estate is destroyed viii. Recording act: Bonafide purchaser comes along and easement has not been properly recorded so you can lose it.
Abandonment Presault’s v. US: i. an easement is terminated by abandonment when nonuse is coupled with an act manifesting the easement or a purpose inconsistent with its future existence. ii. RR has easement on Presault’s land but RR is abandoned so easement is dormant. (a) Rails to Trails Act: Government act mandated that abandoned railroads were to be used as hiking trails, but now tons of people are trespassing on their land everyday and wander off trail onto their property.
iii. Court faces three issues: 1. Did RR own land? 2. If RR has easements, were they limited to RR use? 3. If nature trail qualified within scope of easement, was the easement abandoned? iv. Court Rules: it is an easement because RR must have taken the smallest form estate it needed, the scope of this easement does not stretch as far to a hiking trail because it it inconsistent with the original grant v. Could easement be transformed from RR to public trail? a. court found its not within scope of easement b. terms are consistent with the grant if they are reasonably foreseeable at the time of the grant a public hiking trail was not vi. Dissent: a public use was reasonably foreseeable, so it should be within scope of easement vii. easement has been abandoned
18. Negative Easements: a. General i. Need to be granted ii. Cant be gained through prescription iii. Courts don’t like to expand on negative easements 1. Would rather treat them as restrictive covenants iv. English – 4 recognized negative easements – “LAWS” 1. Light – cant build in a way that blocks light 2. Air 3. Water from artificial stream 4. Support – Cant build in a way that would compromise the support of the property and cause it to collapse v. American – Additionally recognized 1. View – Cant block the view of something 2. Solar – Cant block solar panels 3. Conservation – Cant build on protected land a. Protects against Adverse Possession. Especially useful for big open tracts of land where its hard to tell if people are on it.
Easement Review: The Test: Easement Test Determine whether an easement has been created Classify the possible easement Determine if it can be transferred Determine whether it has been terminated Determine whether it exceeds its original scope
1. Determine whether easement has been created by: a. Grant b. Estoppel (Holbrook) i. Irrevocable if licensee expends money or constructs improvements in reasonable reliance on statement of licensor c. Implication from prior use (Van Sandt) i. common grantor ii. Prior use iii. apparent (provide inquiry notice) iv. reasonable necessity d. Implication from Necessity (Othen) i. common grantor (subdivided or sold to diff parties) ii. strict necessity (not convenience) iii. necessity existed at time of severance iv. terminates when necessity terminates e. Prescription (Othen, Miller) i. actual use, (no negative easement) ii. open and notorious (provides inquiry notice) iii. continuous for statutory period (like AP) iv. adverse/hostile/claim of right=without consent 1. exclusivity: owners use may defeat adversity (Othen) 2. Classify the claimed or established Easement a. Affirmative or Negative b. Appurtenant or in Gross 3. Determine whether Easement can be transferred a. Appurtenant i. An easement created to benefit another tract of land, the use of easement being incident to the ownership of that other tract b. In Gross i. An easement benefitting particular person and not a particular piece of land. Beneficiary need not own land adjoining servient 4. Determine whether or not the easement has terminated a. Abandonment: more than nonuse, physical act and intent (Presault) 5. Has Easement exceeded its original scope? a. Scope may be adjusted if change is consistent with the terms of the original grant (reasonably foreseeable) (Presault) Covenants: 1. A covenant is a promise regarding land that runs to successive owners of the promisors land. 2. Covenants are promises to use or not to use ones own land in a certain way. As between the original parties enforcement issues are purely contractual but when certain elements are present such promises may be enforced by or against successors in interest to the burdened or benefited states in land. When damages are sought for enforcement of a covenant by or against a
4. 5. 6. 7.
successor in interest the covenant is called a real covenant; when an injunction is sought for enforcement of a covenant by or against the successor in interest the covenants is called an equitable servitude. Unlike easements benefit and burden can be attached to same piece of land a. Example: O promises to pay dues to maintain a neighborhood pool i. Burden = promise to pay attached to O’s land ii. Benefit = right to use pool attached to O’s land Goal of covenants is to run with the land a. Want to make sure all future owners will pay dues and get to use pool Covenants are contractual promise that do not automatically run with the land unless certain requirements are met If a party can not get damages for a breached covenant they can resort to equitable servitude providing they meet the requirements Types of covenants: a. Restrictive/ affirmative: i. Restrictive Covenant: 1. A promise to refrain from doing something that is related to your land a. “I promise not to build for commercial purposes on my own land” ii. Affirmative Covenant: 1. A promise to do something related to your land a. “I promise to maintain our common fence” b. Real/equitable: i. Real Covenant: A covenant that can be enforceable at law 1. Elements are stricter put plaintiff can sue for damages a. Ex: Money damages ii. Equitable Covenant: A covenant that is enforceable in equity 1. Elements are less strict but P can only sue for an injunction or specific performance a. Ex: Injunction
Real Covenants: 1. A real covenant is a promise about land usage that runs with an estate in land, meaning that it binds or benefits subsequent owners of the estate. A real covenant may be affirmative or negative. a. Affirmative: A promise to use land in a specified fashion is affirmative b. A promise not to use land in a specified fashion is negative i. Both are enforceable 2. A promise about land usage burdens some land and normally benefits other land
3. It is enforceable at law meaning you can receive money damages if violated 4. Elements of a real covenant: a. Writing: i. Needs to be in writing 1. It can not be created by implication or prescription ii. Deed signed only by grantor suffices to creat a real covenant on the part of the grantee because the grantee is held to have made the deed his from accepting it. b. Intent to bind successive owners: The original parties must have intended the burden (or benefit, or both) to run i. Cts look first to covenant itself: Almost always this is satisfied by an explicit statement in the covenant that it binds “successors, heirs, and assigns.” Or an implicit statement “I promise that my heirs and assignees will also mend this fence.” ii. If covenant silent on this cts examine all surrounding circumstances to decide if parties intended to create a running covenant. c. Touch and Concern: i. Promise must effect legal relations as owners of particular parcel, not members of the public. 1. Negative covenants always touch and concern the land 2. Affirmative covenants to pay dues in connection with maintaining land always touch and concern the land ii. The substance of the promise must touch and concern the burdened land, and in most states, the benefited land as well. It is commonly said of real covenants that if the benefit is in gross, the burden will not run
d. Privity: i. Parties must have a shared legal interest in the same thing ii. Privity is a shared interest in land; 2 types of privity iii. Horizontal: 1. Required for burden 2. Horizontal privity is required for successive owners ot have a burden, but not required to have a benefit 3. Horizontal privity is found if at the time original parties enter into the agreement
4. Original promising parties shared interest in land other then covenant 5. Examples include: landlord and tenant, mortgagee and mortgagor, or holders of mutual easements. 6. There are different views on the type of relationship that is acceptable: a. Older cases in England: Only landlord and tenant b. Mutual interest in the burdened estate: Any mutual interest on property that exists at time covenant is created is sufficient. Could include a pre-existing easement or profit, possessory and future interest in same land and tenant/landlord. c. Conveyances or instantaneous privity: Promise was contained in conveyance is what created horizontal privity. On this view any connection of interest between two original K parties will do whether or not that interest was mutual or existent prior to creation of covenant. i. Most common interest that suffices to create horizontal privity is a conveyance 7. Individual state statutes can alter the requirements of horizontal privity of estate.
iv. Vertical Privity: 1. Successor to promisor’s interest in land a. For burden to run an identical estate is required b. For benefit to run an identical or lesser estate is required i. Ex: LL to T: T gets benefit but not burden 2. Exists when successor acquired burdened or benefited estate in land held by original party to covenant
3. Harder to establish for burden of a covenant than it is for benefit of that covenant. 4. Burden of a covenant: To establish vertical privity to enforce the burden of a covenant against a successor, it is necessary to prove that the successor acquired the exact same land owned by original contracting party. If something less then the original promisor’s estate is conveyed then the burden does not run. 5. Required for benefit: The benefit of a covenant will run to a successor of some interest in the benefited estate. Just about any interest will do. 6. Typically never a problem unless the party gained property through adverse possession: a. Party is not considered a successor, breaks the chain of title and creates a new one 7. Privity between Promisor and assignee
Burden A<------------------------------B Burden & Benefit Burden & Benefit
1. A and B have Horizontal Privity (relationship between original promising parties). They have to share interest in the land other than the covenant 2. Horizontal Privity is for Burden 3. A sells land to X (Vertical Privity) this is a chain of succession. The only time there is a problem is if X gains the land through AP because then it’s a new interest in the land so no privity. 4. For Burden of Covenant to run (Pay dues for pool) the assignee (X) has to have the same exact estate as what A had. 5. For Benefit to run assignee can have same estate or less. X can get benefit of covenant (pool) even if there’s lesser estate than A.
Examples O, owner of 2 acre parcel, divides that parcel and conveys 1 acre to A, keeping the other acre for herself. The deed, properly recorded, includes mutual covenants by A, on behalf of herself, her heirs and her assigns, and O, her heirs and assigns, that the conveyed and the retained parcel will be used for residential purposes only. (a) B takes A’s parcel by adverse possession. B later opens a restaurant. O brings action against B for breach of the covenant.
1. It’s Burden of covenant because we’re looking at what he can’t do on his land 2. O needs to prove that covenant runs with land, that it attached to land and burdens all future owners 3. To prove it attaches to land you need writing and intent to bind future owners (horizontal) 4. There is a relationship between O and A beside the covenant (Deed) so O and A are in grantor/grantee relationship and have horizontal privity. 5. There is no vertical privity because B is an adverse possessor. For burden to run you have to have identical estates so AP or any lesser interest kills vertical privity because not exactly same interest. 6. We have writing, it touches and concerns, it shows future intent, there was horizontal privity but no vertical privity because A and B don’t have identical estate. (b) O leases her parcel to C for 5 years. A opens Nursery school on her parcel. C brings action against A for damages for breaching the covenant. Does benefit of the covenant run at law in favor of C, a lessee of the original promise? 1. We are looking for Benefit here because C is trying to enforce benefit of covenant (residential), and A has breached by opening a school. 2. There’s a writing, future intent, touch and concern and vertical privity but not necessarily horizontal but for benefit to run you don’t need horizontal privity. For benefit you don’t need identical estate, it can be lesser so O and C have vertical privity (lease is lesser estate) 3. In both cases these are restrictive covenants. 4. It treats negative or restrictive covenant are treated as easement that runs with the land, for burden and benefit of restrictive covenant. * Affirmative covenant has stricter rules
Benefit of Covenant for residential housing is benefit of only having residential housing. The burden is not being able to build. If you can’t meet requirements for real covenant get to court and try and get equitable servitude.
Equitable Servitudes (covenants): 1. A covenant about land use that will be enforced in equity (by an injunction) against a successor to the burdened estate who acquired it with notice of the covenants. 2. Equitable covenant need not meet all criteria of real covenant to be enforced. 3. Covenants are more commonly enforced as equitable than as real because they are easier to enforce by or against successors and most people prefer enforcement of a covenant by injunction rather than damages for breach.
4. Modern American courts have merged equity and real covenants allowing you to get injunctions or damages from the same court 5. They originally existed back in English times as a way to get a remedy when you couldn’t show that a real covenant existed. 6. Instead of privity being required you can show notice: a. This means equitable enforcement won’t be enforced against a bonafide purchaser 7. Difference between real covenants and equitable servitudes: Both promise to do something or not to do something to your land: a. Remedy: i. A real covenant is enforceable at law by money damages. ii. An equitable servitude is enforceable in equity by injunction b. No privity needed: i. Neither horizontal not vertical privity is needed for either the benefit or burden of an equitable servitude to run to successors c. Creation: i. Equitable servitudes may be created by implication in many jurisdiction ii. Real covenants can only be created expressly in writing 8. Elements: a. Writing i. Signed by promisor ii. Unless implied from general plan b. Intent to bind successors: i. Essentially same as for real covenants. If parties expressly or impliedly intended for covenant to run to benefit of burden successors equitable servitude created by covenant will run c. Touch and Concern the land: i. Promise must effect legal relations as owners of particular parcel, not members of the public ii. Meaning is same for equitable servitudes and real covenants d. Notice: i. Actual ii. Record iii. Inquiry e. Standing: i. Third party beneficiary/ privity (Neoponsit) 9. Notice: a. Actual: Actual knowledge of servitude is actual notice. Can happen by design (seller tells buyer) or by accident (otherwise ignorant buyer mentions and neighbor reveals copy of unrecorded servitude) b. Record Notice: If servitude is anywhere in chain of title (the series of records that trace ownership) the buyer has constructive notice of the servitude, Buyers charged with knowledge of contents c. Inquiry notice:
i. Some rule that a purchaser should inquire about the existence of servitudes if neighborhood exhibits a common character. 10. Identify Benefited land: a. Courts identify benefitted land by: i. Ascertaining intentions of parties ii. Determine if land intended benefit actually received a benefit 11. Third restatement of servitudes: a. Created as an ideal way to treat servitudes i. Treats all servitudes the same way – does not make a distinction between covenants and easements ii. Not adopted by many states b. Elements i. Writing/Implication/General Plan/Estoppel/Prescription/Necessity ii. Intent to bind Successors iii. Valid unless illegal, unconstitutional, or against public policy iv. Restrictive covenants run with the land (negative easement) v. Notice c. The third restatement alternative to vertical privity i. Negative covenants: (5.2) treats negative covenants like easements, imposing the burdens of such promises on all subsequent owners or possessors of the burdened estate, and extending the benefits of such promises to all subsequent owners or possessors of the benefited estate. ii. Affirmative covenants: Creates seprate rules for affirmative promises for lessees, holders of life estates, and adverse possessors, d. The third restatement alternative to touch and concern: i. Discards touch and concern and asserts that function of touch and concern can be fully performed by doctrine governing termination of servitudes. ii. Servitude is valid unless it is illegal or unconstitutional or violates public policy. Included but not limited to: 1. Arbitrary, spiteful, capricious 2. Unreasonably burden fundamental constitutional right 3. Impose an unreasonable restraint on alienation 4. Impose an unreasonable restraint on trade/competition 5. Unconscionable 12. Reciprocal negative Easement: a. An Implied restriction on the use of a land: It isn’t in writing b. Way to bind someone to a covenant even if its not specifically in deed c. Common Development Scheme: Many states permit negative equitable servitudes (promise to refrain using land in a fashion) to be created by implication when common scheme resident development i. By implication from common development scheme: Many states imply a negative equitable servitude where a real estate developer
sells lots in subdivisions on promise all lots burdened w/ same restriction (single family unit) and later fails to carry through ii. Common Scheme of development: Development must be of uniform character and recognizable by purchaser, Otherwise no basis for concluding that purchaser relying on reciprocal covenants burdening use in order produce development of uniform character. 1. 4 factors in determining existence of common scheme: a. Advertisements mentioning reciprocal covenants b. Use of map showing entire development as a sales aid in conjunction with sales of burdened lots c. Represent to buyer that all lots similarly burdened d. Sale of number of lots w/ common restrictions. 2. If developer conveys land w/o use covenants before common scheme begins no reciprocal covenant implied; 3. Courts imply reciprocal covenants only when substance of covenant is negative- limiting use of property rather than requiring positive act on owner of burdened land. iii. No implied covenants: Some jurisdictions reject creation by implication. In Cali if use restrictions recorded they do not burden lots un-described unless deed specifically refers to record restriction. 1. No real guidelines exist so t often comes down to what the court considers reasonable inquiry notice. a. Problem: Pets in an apartment: what is enough to constitute reasonable inquiry pets behind closed doors b. No time limit for these agreements so you can end up locking land up for long periods of time iv. Law is split on implying servitudes on a general plan. a. Reliance interest of purchaser who didn’t see restriction in deed b. Reliance interest of early purchasers who bought bc restriction. 2. Sanborn Case a. Covenant for Residential only use of property not in the specific deed for the particular lot b. Court says it’s a Negative Reciprocal Easement c. Inquiry Notice – Should have had it when looked at all the properties in the neighborhood and saw none were using land for commercial purposes 13. Interpretation of covenants: a. Courts try to implement the intention of the parties in creating the covenant, but the very terms used are often ambiguous. b. Building restriction: Covenants may restrict certain uses of they may restrict construction of certain types of building. i. “Structures erected… to residential purposes”.. Limit nature of structure not what was going on inside… office looks like house
c. Residential purposes: Many covenants limit use to residential purposes. The content of this term is not self-evident bc people commonly use residences for variety of purposes i. Some states rule any commercial or money making enterprise no matter how domestic is not residential ii. Other states rule bed and breakfast, day care for 5 children, and dog training consistent with residential use covenant d. Group homes: Most courts conclude that group homes for handicapped, juvenile delinquents, or other groups do not constitute a violation of residential covenants because people do in fact live there. e. Hill v Damien i. P sues argues that community home for AIDS patients violates single family use covenant ii. Court looks at scope of covenant and weighs public policy concerns iii. Is a group home a residence? 1. Yes not operated for profit iv. Policy: Want to deinstitutionalize the disabled v. Are four unrelated men a family? 1. Court says covenant doesn’t define family so look to a the Local zoning ordinances which say it would be ok 2. Policy: Group homes help disabled: don’t stop that
14. Termination of covenants: a. Expiration: i. Covenant may have a defined life span. b. Release: i. If all holders of benefit of covenant expressly release the covenant is extinguished c. Abandonment:
d. e. f. g. h. i. j.
i. Widespread violation of covenant without enforcement. If sufficiently numerous an n act to enforce may be seen as abandoned. Either test: how average person would conclude or if covenants purpose is so frustrated that enforcement seriously impair value of burdened lots w/o benefit Merger: i. If same person acquires title to burden land and benefited land Estoppel: i. Party seeking to enforce covenant made knowingly false representations to D and D relied on misrepresentation Prescription: i. Prevent from suing on statute of limitations so wrongfully loses right to covenant Condemnation: i. Govt takes land through eminent domain Recording act: i. Bonafide purchaser comes along and easement has not been properly recorded so you can lose it. Consent: i. All parties consent to terminate Changed Condition: i. A covenant will no longer be enforced in equity if conditions have so radically and thoroughly changed within the area affected by a covenant (usually a subdivision) that the covenant can no longer achieve its purpose. ii. Nature and character of surrounding are has so changed that it would now be inequitable to enforce the servitude. To succeed with this claim it is necessary to establish that extrinsic changes in neighborhood have been so pervasive that all of benefited lots have lost the benefit of covenant at issue. iii. Restatement 7.10 1. Covenant may be modified when a change has taken place that makes it impossible as a practical matter to accomplish the original purpose of the covenant. 2. Compensation for harm may be awarded
Modification: Covenant will not be modified even if the value of the restricted parcel is reduced, if original purpose has not been thwarted, & covenant remains of substantial value to the other homeowners. (Western Land) Holdouts: restrictive covenants will be enforced by injunction unless unconscionable or oppressive. (Rick v. West)
Original Use Restrictions: Valid unless arbitrary, burdens substantially outweigh benefits for all parties, or violate public policy. (Nahrstadt, Rst.§3.1) Later Adopted Use Restrictions: Reasonableness. Nahrstadt Business Judgment Rule: Considers whether board exercised its discretion in good faith, upon reasonable investigation Equitable Servitude Case:
Tulk v. Moxahy: English Chancery Court (Court of equity) said even if you can’t prove real covenant they try to find a way to enforce promise. Tulk owns land and sells to Elm with covenant not to build on land. Elm then sells to Moxhay who has knowledge about covenant but deed doesn’t contain any restrictions that prevent him from building so he asserts right to build on property and Tulk sues for injunction. Can T sue M for enforcement of covenant? o Court says injunction ok bc M pai lower price for burdened land and could resell for higher price and M had notice, he knew about restrictive covenant. Court enforces equity even though not enforceable under real covenant. o T is suing M for benefit, trying to enforce the burden against M. T benefits from not allowing M to build and M is bound by promise to not build. To enforce Burden of Real Covenant you need: 1. Writing (original deed between Tulk and Elm) 2. Intent to bind successive owners (“heirs, assignees”) 3. Touch and Concern (Restrictive covenants always touch and concern) 4. Vertical Privity (they have identical estates 5. Horizontal Privity (Elm purchased land from Tulk-relationship in addition to covenant – grantor/grantee relationship Burden and Benefit: Prove benefit of covenant runs to you so you have right to enforce covenant and prove burden of covenant runs against person you’re suing to show bound by covenant Now you can argue both equitable servitude and real covenant in the same case because third Restatement basically made them the same thing.
Reciprocal Negative Easements Case:
Sanborn v McLean: i. Negative easement for residential purposes only. Deed conveying land to D’s did not contain restrictions. ii. Reciprocal Negative Easement: an implied restriction on the use of your land. It arises in situations where a common developer laying out a
suburban area, developer sells to A with residential restriction to BENEFIT A’s property. So all other lots owned the development area are restricted by the reciprocal negative easement. It can be implied from the nature of the general plan of the development. iii. An equitable servitude can be implied on a lot, even when the servitude is not created by a written instrument, if there is a scheme for development of a residential subdivision and the purchaser of the lot has notice of it. iv. D’s wanted to build a gas station on their lot in residential area and gas station would fall under the category of nuisance and go against the residential scheme. v. D had INQUIRY NOTICE that there were residential only easements. Court says by looking at other houses you’d see no one else using for commercial purposes. vi. It is a negative easement because many of the homes around this property have negative easements. a. came from a general plan or scheme i. developer planned on imposing identical restriction on everyone vii. The law on whether an implied equitable servitude can arise from a general plan is split and varies by jurisdiction a. you should be entitled to rely on you deed (reliance interest of purchaser) but on the other hand, you can’t be willfully blind (look at entire neighborhood and wonder why you’re first to build commercially). You can’t forget the reliance interest of the rest of the neighborhood.
Creation of Covenants and the Restatement I. Real Covenants=writing required, can only be created by writing of original grantor II. Equitable Servitude= can be implied form a general plan or common scheme 1. Reciprocal Negative Easement= implied equitable servitude III. Restatement= easements and covenants can be created through writing, common scheme, prior use, necessity, prescription and estoppel.
Neoponsit v. Emigrant Bank: i. Common interest community case. Neposot creates community and
includes in deed they covenant they will pay annual charge not to exceed $4 to maintain roads, parks etc. Deed explicitly contains covenant that evidences intent of grantor and grantee. Bank argues they aren’t bound by
covenant because it doesn’t meet requirements for real covenant or equitable servitude (writing, intent, touch and concern and privity) Touch and concern and privity are issue here. Bank says no privity because Home owners association doesn’t own any land in the community, just a rd corporation set up to collect dues and maintain property, they’re a 3 party to covenant. Association isn’t original promisor but not completely rd unrelated 3 party. Court decides Association can sue because they are authorized agent of property. It’s settled today home owners associations have standing to sue. Bank claims covenant isn’t enforceable because there’s no touch and concern.
ii. Test Court uses: the covenant must affect the parties as owners of particular parcels of land and not merely as members of the community, such as taxpayers or owners of the land. If it affects my rights as a landowner, then it touches and concerns the land. Rule: An affirmative covenant to pay money for improvements or maintenance done in connection with, but not upon the land which is subject to the burden of the covenant does touch and concern the land, and a HOA, as the agents of the actual owners of the property, can rightfully enforce the covenant.
Touch and Concern
i. Common Law Test: The covenant must affect the parties as owners of particular parcels of land and not merely as members of the community (Neoponsit) Restrictive Covenants always touch and concern Affirmative Covenants to pay money to be used in connection with maintaining land always touch and concern. ii. Restatement §3.1: a. A servitude is valid unless it is illegal, unconstitutional or violates public policy b. Servitudes that violate public policy are: 1. arbitrary, capricious or spiteful 2. unreasonably burden a constitutional right 3. unreasonable restraint on alienation i. things that indirectly alienate are ok but direct alienation isn’t 4. unreasonable restraint on trade 5. unconscionable c. Under the Restatement, the covenant in Neoponsit would be valid, it’s not illegal, doesn’t violate public policy and isn’t unconstitutional. d. Both real covenants and equitable servitudes have this requirement
Examples of Touch and Concern under common law and restatement: Which of the following “touch and concern” under (a) common law and (b) the Restatement? 1. No flag of any kind, including the American flag may be displayed? (a) common law: yes, it affects the land, negative covenants almost always touch and concern because it restricts what you can do with your land (NY Law prohibits covenants against restricting flying US flag)
(b) Restatement: Yes, it touches and concerns the land (Prohibition on political speech, like flying a US flag is would be a burden on a fundamental constitutional right) 2. No sign except house location number may be displayed, nor any Christmas lights outside the house? (a) Common law: yes it affects the owner of a particular parcel of land (b) Restatement: yes, it doesn’t violate public policy or fundamental right. You could argue it violates fundamental expression of religious freedom. Most cases on this issue hold that Christmas lights are a burden and it doesn’t have that much religious restriction. 3. No solar energy device shall be displayed on the roof of any house? (a) Common law: yes (b) Restatement: no, doesn’t fit into any particular category but you could argue arbitrary, spiteful or capricious and promotes welfare of society in general 4. Daycare to nonresidents of house? (a) Common law: yes touches and concerns (b) Restatement, No probably restraint on trade which goes against public policy 5. Pay 10% to Developer upon sale of house? (a) Common Law: No, doesn’t touch and concern. It’s an affirmative covenant to pay money but not for use in maintaining land, its payment to developer. It’s in gross so it’s invalid (b) Restatement: maybe. It’s a restraint on alienation but a servitude is valid even if it restrains alienation if there’s a rational justification
Restrictive Covenants that have Discriminatory Effect: Hill v. Community of Damien: Residents of planned community sued to enjoin AIDS group home from occupying one of the houses, based on a “single family residence” clause in the restrictive covenant. i. ambiguous restrictive covenants should be construed in favor of the free use and enjoyment of the property and against restrictions; restrictive covenants with a discriminatory effect violate the FHA ii. Issue is whether a group home can be construed as a single family residence. iii. The court finds that it is residential use because they do many things together (sharing meals, support each other) and act as a family. iv. A “family” is not more than 5 unrelated people, living together in a dwelling constitutes a family(looks to local zoning ordinance)0Also promotes public policy. v. Restrictive Covenants that mandate single family use permit families to include group homes and can occupy as a single family unit. vi. Court claims traffic issue is irrelevant, covenant wasn’t directed at lowering the amount of traffic on the road or in front of houses vii. Court looks to reasons behind FHA and finds 3 distinct claims under 3604F, Discrimination against the Handicapped: 1. Discriminatory intent: a. traffic issue only came up when residents discovered people living there with aids 2. Disparate Impact:
a. if the covenant is interpreted the way the neighbors want it to be, it discriminates against the handicapped 3. Reasonable Accommodation: a. Doesn’t need to be directed at the handicapped but must still be burdensome on them and still must make reasonable accommodation for them. b. Reasonable accommodation would be allowing them to stay
Shelley v. Kramer: Black couple was buying a house while unaware of a racially based restrictive covenant on that street; white home owners try to stop them. i. Judicial Enforcement of a Restrictive Covenant based on race constitutes discriminatory actions and is thus forbidden by the equal protection clause if the Fourteenth Amendment. ii. Would also violate FHA and Civil Rights Act iii. It’s not a zoning ordinance or regulation it’s a private K between neighbors. There’s no law against entering into contracts like this (freedom of K) the covenant is valid but will not be enforced judicially. iv. The negative easement was against selling land to any black people for 50 years. v. Necessary Elements: 1. Writing 2. Intent to bind future successor 3. Touch and Concern 4. Vertical Privity 5. Horizontal Privity- (No Horizontal Privity) i. you need common owners and relationship between 2 parties other than covenant. A bunch of neighbors cant make a covenant on land because no pre-existing relationship
vi. Restatement: it’s a direct restraint on alienation and violates public policy vii. Courts now look to FHA not Constitution viii. Covenants and RAP: Covenants are present interests in land so not subject to rules against perpetuties no inherent limit on how long covenants can run
Changed Condition: Covenants that run with the land will do so unless there is a fundamental reason that the covenant is no longer functional. (Every parcel around this one is commercial and you want to build a super market-(Western Land) Modification: Covenant will not be modified even if the value of the restricted parcel is reduced, if a. if original purpose has been thwarted, and b. the covenant remains of substantial value to the other home owners (Western Land v Truskolaski) ii. Restatement § 7.10: Covenants modified when change occurs that makes it impossible as a practical matter to accomplish the original purpose of the covenant. Compensation for harm may be awarded Western Land Co v. Truskolaski: Rule: A restrictive covenant establishing a residential subdivision can not be terminated as long as the residential character of the subdivision has not been adversely affected by the surrounding area, and it is of real and substantial value t the landowners within the subdivision ii. Restrictive Covenant of 48 acres to single family dwellings, no stores or mercantile business of any kind. At time of covenant area had small population, very rural and very little traffic. Western now wants to build a mall and homeowners seek an injunction to prevent him from doing so. By time of suit, area population increased by 5x, more traffic, highways, more noise (CHANGED CONDITION). Western argues land no longer suitable for residences and wants to open a mall instead.
iii. Court finds everything is happening outside the subdivision. Court looks at value of covenant to entire 48 acres, not just the individual lots that are affected. Look to value of subdivision as a whole. iv. As long as other residents of subdivision are benefitting residential use only the court will not invalidate it v. A covenant won’t be invalidated as long as it is possible to achieve original goal of covenant. There was still benefit to members of community, and court won’t look at decreased value of a particular lot, it looks at the value of the covenant to the community as a whole. Hold Outs: Rick v. West: W bought land from R under restrictive covenant, and refused to release covenant when Rick attempted to sell similar land to hospital. i. Who benefits from the covenant? Cathy West ii. Who is burdened? The rest of the land (62 acres) iii. Is a restrictive covenant still enforceable when only one landowner in a subdivision refuses to consent to the release of the covenant? YES. The rule goes against: “Greatest good for greatest number” iv. Rule: A landowner in a subdivision under restrictive covenant has the right to insist upon adherence to the covenant even when the other owners consent to its release v. Restrictive Covenants will be enforced by injunction unless unconscionable or oppressive (Rick v. West) vi. Part of the point of Rick v. West is to explain that restrictive covenants will be enforced by injunction unless unconscionable or oppressive