What is Property? a bundle of rights • right to enjoy/use (reasonably) • right to exclude • right to possess (possession = control; includes right to change/modify) • right to transfer (sell, give away) • right to dispose of (sell, consume) • property also comes with obligations Often there is a conflict of prop. owners and neither can have all his rights. Who gets the rights? • Justice systems favors human rights over property rights. • Common law says property rights are not absolute. Types of Property 1) Real Property: land and things attached to the land; immovables 2) Personal Prop.: everything else and intangible items 3) Fixtures: were personal, but so attached, now are real prop. -how attached is it? -how customized is it? -what was the intent at the time it was affixed to the land? Adverse Possession Why have AP? 1. roots/experiences (moral/psychological) 2. penalty to non-user (economic) 3. reward to beneficial users (economic) 4. prevent aging claims 5. title assurance/way to clear aging titles Elements of AdPoss: HELUVA Hostile: 3 standards; at least must show AdPoss is w/o permission of true owner Exclusive: adverse claimant possesses against everyone else, incl. owner Lasting: as long as statute requires Uninterrupted: stay on land, not made to leave by owner Visible: open and notorious; Doctrine of Encroachments protects unnoticeable Actual: per statute, what kind of possession is sufficient (use, cultivation) 3 Standards of Hostility 1. Good Faith Standard: mistake; claimant doesn't know he's on your land, but he intends to keep what he is on 2. Aggressive Trespass: must intend to take what you do not own (Ellis v Jansing: ok as long as you mean to keep it) 3. Objective Standard: state of mind is irrelevant Easement: rt. to use someone else's property for certain purpose Prescriptive Easement: easement acquired like AdPoss Texas Statutes of Adverse Possession Disability: 1) serving in military during war (2) under 18 (3) of unsound mind - no tacking of disabilities - must have disability when AdPoss begins Tacking requires privity, a transfer of possession 3 yr: requires color of title (trace back to sovereign of land) 5 yr: use, pays taxes, duly registered deed (not forged) 10 yr: HELUVA reqs.; 160 acres max unless enclosed or by registered deed 25 yr to reclaim your land notwithstanding your disability The Estate System . The Fee Simple Absolute (fsa) /no future interest "O to A and his heirs" (don't have to say in Tx §5.001) Transferable? yes (sell, convey) Inheritable? yes (by statute of descent) Devisable? yes (leave in will) Fee Simple Determinable (fsd) /possibility of reverter "O to A fsla __" "while, until" durational words present interest: A future interest: reverts to O in fsa immediately (AdPoss begins running as soon as condition met) FSD: Transferable/Inheritable/Devisable? always Rvtr: Transferable? probably transferable during O's life - depends on local law Inheritable? always Devisable? probably, sometimes only to owner of present interest Fee Simple Subj to a Condition Subsqt (fsscs) /right of re-entry "…on the condition that/but if/provided that" condt’l lang. Present interest: A has the rt. to possess; but that can be taken away only by force future interest: O has the right to take away A's rt to possess, but until he does, even if the condition has occurred, A still has "permission" to possess (note, AdPoss doesn't run) --Laches and estoppel protect A if O should know he can re-enter and does not. Consider: --how much time has passed (rzbl) --reliance (has A built a house?) And fsscs is a greater estate than an fsd, so it will be construed as such if ct. can't tell O's intent. fsscs: Transferable/Inheritable/Devisable? always rt. re-entry: Transferable? probably (local law) Inheritable? yes Devisable? prob. (local law - sometimes only to owner of present interest) Fee Simple Subject to a Executory Interest (fssei) /E. I. "O to A fsla/but if ___, then to B" future interest: someone besides O (B) fssei: Transferable/Inheritable/Devisable? always ei: Transferable? prob. Inheritable? yes Devisable? prob. *subject to the RAP* Term for Years /Reversion or Remainder "O to A for __ years." "O to A for ___ years, then to B." present interest: A future interest: B (remainder) or O (reversion) terms for years: (leasehold estate) Transferable? during term Inheritable? yes, for length of term Devisable? yes, but only for length of term Fee Tail /Reversion or Remainder "O to A and the heirs of his body" "…of his body, then to B" present interest: A future interest: bloodline heirs, then reversion to O or rem. to B Fee Tail: Transferable? yes, but only as a l.e. pur autre vie Inheritable? always (only) Devisable? no (always passes by statute of descent) illegal in 46 states; if granted in Texas, construed as a fsa Life Estate /reversion OR remainder "O to A (life)" "O to A (life) then to __" present interest: A for life *RAP* future interest: reversion to O, remainder to B Life Estate: Transferable/Inheritable as a l.e. pur autre vie Devisable? only from someone with a l.e. p.a.v. Revers/Rem: Transferable /Inheritable /Devisable? usually No Waste: a person should not be able to use land that unrzbly interferes with the other's interests (unless given the express right in the grant; or open mines) Life tenant's rights/responsibilities: 1. right to possess and enjoy benefits of possession (crops) 2. duty to preserve (no waste; can't diminish future market value) for future owners 3. Open Mines Doctrine: can take minerals if land already used for that purpose (minerals include oil, gas, timber, gold - not renewable things--or slowly renewing) 4. permissive waste: life tenant fails to take care of property 5. failure to pay taxes results in losing the property which is a failure to preserve the estate (unless from O's lifetime, then pd. out of O's estate) 6. improvements (voluntary and necessary) made by life tenant are his responsibility to pay for 7. cost of long term repairs made by tenant can be allocated if they outlast tenant's life expectancy Homestead acts: gives homestead (primary residence of married couple) as a life estate w/rem. to whomever else the property was to go to; in Tx, spouse must give up other rts. under spouse's will Condition can no longer be legally met: Ink: $ pd. by state (FSA price - value of fsscs/fsd = value of FI) Leeko: used Ink formula, made sense--city lied to get land Best soln: use $ to replace land granted with same estate given Hierarchy used to construe a deed: (first try to ascertain O's intent) 1. fsa (greatest estate to grantee) 2. fsa, subject to a covenant 3. fsscs 4. fsd Heirs/Issue: dead people have no heirs, since your heirs must be alive at your death. F.I.s granted to "heirs" are not vested until death of grantor (parent). (Ex. a devise to 'my heirs' by O, expecting it to go to his sons, A, B. If son B dies before O's death, neither he nor his estate get anything because he is not really an heir.) Issue: is your bloodline running down from your kids to your grandkids, etc. Distinct from collateral relations (aunts, nieces, etc.) and ancestors (grandp's, p's). Indefinite failure of issue: whenever A's bloodline runs out Definite failure of issue: if A dies without issue (used today) Executory Interests: (always follow fssei) *subject to RAP* Shifting - divests estate from not O Springing - divests estate from O Remainders: Vested: 1) you can identify who will get the estate 2) there is no condition precedent (other than previous estate ending) that will divest estate • absolutely vested: no possibility of estate being divested • total divestment: poss. of entire estate being divested (ie condition occurring) (vest. rem. in fssei) *RAP* • partial/subject to open: part of estate could be divstd.; (i.e. if there is a class open). *subj. to RAP* Contingent: not vested; *subject to the RAP* Doctrine of Merger: (applies in every state) merges two consecutive vested interests in same person Destructibility of Contingent Remainders: probably would be abolished in Tx (not tested); if a cont. rem. fails to vest at end of preceding estate, it is destroyed. Rule in Shelley's Case: abolished in Texas on 1/1/1964 §5.042 a) same instrument (deed or will) b) grantee given l.e. c) remainder in G'ees "heirs" d) l.e. and rem. must both be equitable/legal "O to A (life), then to A's heirs" A gets the l.e. and the rem. (+ doctrine of merger = fsa) is a rule of law: applies because you have the elements Doctrine of Worthier Title: abolished in Tx on 1/1/1964 §5.042 a) same instrument (only deeds) b) grantee given l.e. or defeasible estate c) rem. or e.i. in G'ors "heirs" d) l.e. and rem. must be both equitable or both legal "O to A (life), then to O's heirs" A gets the l.e. and O gets a reversion is a rule of construction: applies unless contrary intent shown (note: makes sense only deeds b/c O is dead when a devise is made anyway) The Rule Against Perpetuities (RAP) "Might it vest too late?" any possibility ei's---when possessory LIBs + 21 yrs. it might or cont. rems.---when possessory might not options---when runs out vest in time vested rems.---absolutely vested; class closes Classifying Estates 1) classify (void any fee tails?) 2) subject to Shelley or Worthier title? (look for "heirs") a) rules apply in this juris (if Tx: on/after 1964) b) cont. rems. or ei's? 3) subject to RAP? a) options, ei, cont. rem., vested rem subject to open 4) if subj. to RAP, void or valid? Trusts: trustee=legal O, fiduciary • beneficiaries = equitable O duties: cannot engage in self--dealing, must keep trust prop. separate from his own, act impartially, accurate accounts, invest prudently; subj. to prsnl. liability for violation res: creditors can’t touch (trusts reinstated the “use”) The Lease non-freehold estate 1. TERM FOR YEARS (common) c/L: no limit on # years, but can terminate on a condition; definite beg. & end.; no notice needed 2. PERIODIC TENANCY yr-to-yr; automatic renewal; continue until LL or T gives termination notice; death of LL or T has no effect 3. TENANCY AT WILL no fixed period; can be terminated by either party; death of LL or T = terminates; often made if ambiguous duration 4. TENANCY AT SUFFERANCE (Holdsover) LL can evict or create new lease term (or accept periodic tenancy, esp. if LL accepts future month’s rent) Termination Notice: Tx Prop. Code §91.001 When stated OR one month (starts day after notice given) (if less than 1 mo =>length of period & end of period) Pro-rated rent c/L: 1 term or 6 mos max; end at end of period only Is it a lease? Intent of parties; restrictions on possession; Exclusivity of possession; Degree of control; Incidental services; NOT Leases: licenses, life estates • Lease: Conveyance or K? • Are promises in lease mutually dependent? • If premises destroyed, is T liable for rent? • If T leaves, must LL mitigate damages? • Warranties of implied quality? • SOF: need writing if lease for more than 1 yr (doesn’t matter if doesn’t start right away); if a condition that may occur w/in a yr. terminates the lease, no writing req’d • Exception: entry & possession under an oral lease + pymt. of rent = periodic tenancy for one year • §91.004: if LL breaches lease, he is liable to T for damages from breach; T has lien on rent pymts. • • Discrimination: human values served • - infringe on rts. of owners • + decrease ethnocentrism; + rt. to possess for more ppl • + freedom, liberty = ability to own prop. • + self-interest (chain reaction, higher taxes) • • Civil Rts Act 1866 • Only race, no exemptions, public only (after Shelly, applied to private); requires intent to discrim. • Remedies: 1) actual 2) punitive 3) injunctive relief • • Fed. Fair Housing Act 1968 42 USC • PFC: (1) P member of protected class; (2) Applied for/qualified for unit; (3) Rejected although unit remained avail • only requires disrim. effect/impact, not motive/intent! • => after P shows PFC, production burden shifts to D to show he didn’t discrim. (then P gets persuasion) • §3603 exemptions: • Single-family dwelling and • Own/interest in less than 4 at once and • 1 exemption per 2 yrs (if you didn’t just live there) • can’t use broker • not exempt from ads/stmts. (§3604c) • Mrs. Murphy exemp: unit is places occupied by less than 5 families IF owner lives there • §3604 Protected: race, color, religion, sex, famil stat, nat’l origin • Can’t refuse to rent/sell; blockbust (induce sale); say unavailable; (c) ad indicating preference or show intention to discriminate (incl. stmts) • Handicapped: rzbl accommodations for full enjoyment if necessary (unit & policies); can require removal when lease ends; = opp. to use and enjoy [aft. 3/3/92 must build for handicapped] • Ads: Ordinary Listener standard: does ad/stmt. suggest to ordinary listener a class preference? There are circumstances where you have a legit. rzn to ask • To Avoid FFHA: must make individual determination, not based on a class; asking okay b/c you may warn them • Remedies: • Actual damages, incl. emotional distress, humiliation • Punitive damages if motivated by evil intent/indifference to fed. rts. • Injunctive relief, other orders (affirmative actions) • Atty’s fees to prevailing P • • Tx FHA §301.152: same as FFHA, but allows Ct. to appt. attys. • • Delivery of Possession (under implied covenant of QE) • English rule (Tx): LL must give legal and actual rt. to possess • + LL has more info re: holdover to sue w/• - makes it hard for LL to K while old T there • - LL not part of Tort, shouldn’t be forced to sue • + T isn’t King for a lawsuit; modern lease • • Covenant of Quiet Enjoyment LL ensures- • (implied in all leases in Tx but can be waived): • I have right of possession • No one will interfere w/T (LL or other) • T must show LL is cause of interruption • Remedies: @c/L • terminate, vacate & claim “constructive eviction”; terminates lease -> no pymts. • a) LL intended T no longer enjoy premises per circs. • b) LL committed material act/omission that substantially interfered w/use/enjoymt of lease for intended purpose • c) act/omission permanently deprived T of use/enjoymt • d) T abandoned premises w/in a rzbl amount of time of act • Substantial breach: LL fails to: • Disclose latent defects • Keep premises habitable • Maintain common areas • Make promised repairs • Abate immoral conduct/nuisances on premises • No fraudulent misrep. of condition • Affirm lease, sue for damages suffered from breach • Affirm, seek rent abatement (rent - suffering due to breach) • Affirm, repair w/rent pymt (see rules!) • Affirm, w/hold rent (not avail in Tx after Ch. 92) • • Implied Warranties of Suitability (commercial: 1988) /Habitability (residential) (1978) [before LL no duty to repair per 92.051 - 92.061] • Physical condition: residential? statute; commercial? Davidow • Specialized QE warranties; Ct’s treated lease more like Ks • T’s obligation to pay rent dependent on LL fulfilling duties • Commercial: breach? Must render premises unsafe, unsanitary, unfit for use (guidelines also apply to residential:) • Nature of deficiency • Effects of habitability • Length of time persisted • Age of structure • Amt. of rent • Area where premises located • Did T waive defects? • Defects result of malicious, unusual use by T? • Residential: Ch. 92 of Tx Property Code • §96.006: can’t waive conditions mat. affecting hlth/safety • -can agree T will repair & LL pays (T pays only if): • LL owns only one dwelling • No condition mat. Affecting hlth/sfty • None expected to arise • Lease: written, bold, sep. ¢ • §95.052 LL Duty to Repair • a. 1. Notice (written if req’d in lease) • 2. Not late on rent • 3. Condition mat. affects hlth/sfty • LL doesn’t have to fix ordinary wear • §92.056 for T to get Remedy: • notice (once if cert.) • cond. mat. affects hlth/sfty • LL has rzbl time to repair (week) • LL hasn’t made diligent effort • T not late on rent when notice given • T remedies: • end lease • deduct (see 92.0561) • judicial remedy (92.0563) • §92.0561 Repair and Deduct • can deduct 1 mo. or $500 • notice states intent to repair • made by someone w/o conflict of int. • send copy of bill & receipt to LL • Only for the following conditions: • raw sewage, water pipe breaks, potable water • htng or a/c if official sends notice • official sends notice condition mat. affects hlth/sfty • §92.0563 T’s Judicial Remedies • injunction (Ct. order for LL to repair) • reduction of rent for reduced value (by Ct. order) • civil penalty: 1 mo. +$500 • actual damages • ct. costs, atty fees Knowing Violation: penalty= above + $2000 • §92.331 no retaliation of any kind within 6 mos. by LL • • When is T responsible? • If he K to do so • Permissive Waste theory growing: T=minor repairs • If he willfully, negligently damages (T, family, guest of T) T Breaches: LL's remedies 1) continue lease, seek remedy (damages, injunction) 2) terminate lease a) cannot automatically term. (FED suit) b) can only term. for breach if lease provides c) termination clause in lease construed strictly d) only get $ for unused term. if lease provides for rent default only: lockout, interrupt utilities: by Tx. statute, discourages self-help remedies (harder for LL!) >LL must post notice, be avail. 24 hrs. to bring key/turn utils on; must restore w/in 2 hrs. of request > if lockout unlawful, LL liable for wrongful eviction FED action for breach/holdover (forcible entry & detainder) • LL must give T 3 days notice before filing • T’s defenses: no breach; repair & deduct; retaliation • Writ of possession if LL wins (sheriff orders vacate) T abandons: LL's rights (M = duty to mitigate) • reject surrender, sue for rent (not after Ch 92; only per AHR) • M reject surrender, sue for anticipatory breach, damages (present value - fmv) • M reject, relet "for T's benefit" (T rent - T² rent) [no present value adjustments] • accept surrender, term. lease (can only collect for past due rent, damage to apt.) • before Austin Hill if T wrongfully abandoned, LL no M duty after 7/97 under §91.006, LL always must M (not waivable) T has burden of showing LL did not M LL must use objectively rzbl efforts to fill the premises not an absolute duty; suitable T under the circumstances; doesn't have to accept financially risky Ts or Ts whose bsns was previously barred Assignments & Subleases: assignment: transfers all rts.(Tx rule); intent of parties sublease: transfers less than all (Tx); intent; T becomes LL of T² consent: always req'd in Tx (§91.005); can't w/hold consent w/o good rzn [remedy for no consent: LL can terminate/forfeit lease; not automatic: waivable]; consent implied consent (“to T and heirs, assigns..” or if LL knows, laches) LL can recover against (for a rent default): Original T always liable b/c privity of K (if T² accepted liabil, then T has remedy v. T²) unless: 1. release 2. novation (actions by LL, his choice) Transferee: if assignment a) privity of estate or b) 3rd party beneficiary (only if T² accepted T's liability) if sublease a) 3rd party ben. (only if T² accepted liability) LL can get injunction against either T or T² for a use default if T² had notice of use covenant 1. In a lease T has leasehold int & LL has future int. Both are transferable. LL only needs to give notice & New LL is almost always bound by covenants the original LL was bound by: Covenants run w/the land 2. T: Always liable under privity of K unless, the LL releases or Novation has occurred -substitution of lease with a new one 3. T can get out of liability if T² assumes liabil 3rd Pty Beneficiary 4. Black Letter Law: LL can enforce v. T² all covenants that Touch & Concern the Land (rent, maintain insurance) 5. LL looking for money (on assignment) LL can (1) enforce against T² all covenants that touch the land (2) may also have TPB which can go beyond all covenants 6. LL looking for use (on either) LL can seek an injunction, LL must show Notice -that T2 knew of Use Covenant 7. Tx: T can’t assign/sublet w/o LL consent: Must be Rznbl (Commercial Reason) Way around Unrznble LL, Vacate when LL must M, T2 can try to relet, then the LL runs risks 8. LLT0T1T2T3 (All Assigned &T1 assumed T0’s Liability): LL on T’s can go after 1) T0: Priv of K 2)T1: assumed LiabilityTBD, once assigns no Priv of Est 3) T2: once assigns No Priv of Est 4)T3: Priv of Est 9. In Texas, Both T1 & T2 are still liable under Privity of Estate 10. If T3 were Sublease, LL could term. lease w/T0 & term’s all Concurrent Interests TIC JT TBE Undivided Fractional Int Yes, need not be (=) Yes, may need to be (=) No, H&W=1 ROS NO Yes Yes Creation Presumption 4unities/statu e 5 unities /not TX Partition Rt’s Abs. uoa (for rzble time) Abs. No/Veto power Transfer (alive) Yes (transfer, inherit, will) Yes, during life.. not through will If both agree; Not Unilaterally 1) Joint Tenancy with ROS; 4 unities 1) Time (start/end at same time) 2) Title (from same grant) 3) Interest (= fraction & = duration) 4) Possession (all can possess the whole) TX: §46 must be used to create ROS: must be explicitly stated, then unities don’t matter; but if A sells =>TIC ROS: if one T severs, the other still have ROS Sever: destroy unity, use strawman transfer (safer) Creditors: can seize during JT’s life only (becomes TIC) 2) Tenancy in Common: presumed; no ROS ex: “O to A&B for their joint lives, rem. to survivor” A&B le, alt. cr’s, O reversion ex. “O to A&B but on the death of the first, decendant’s int. will pass to survivor” A&B=fssei and ei on cond. of being survivor 3) Tenancy by the Entireties: 4 unites + Marriage; int. must be passed by both b/c ea. holds as 1 person (not in Tx) Partition by sale: ea gets $; in kind: ea gets a separate part of land Parol partition: no SOF violation if parties follow it & all agreed Owelty: equalizes share value after partition in kind Ouster: only way to adposs a co-T; clear and unequivocal notice to Ts not in possession; put on locks (for more than protection); 1. Black Letter Law -Co-tenants are not partners or agents of each other, but cannot do something to harm the others 2. Tx: Rent of Co-tenant in possession: only if ousted, collect based on [value of fract. int. * Open Market Rent Value] 3. Tx: Every tenant has duty to maintain/preserve prop (not to improve) Can sue non-contributor 1) their assets 2) against prop (adjust the fractional interest) preferred method 4. Accounting -determines who owes what to whom 5. Improvements: do not give non-contributors benefits they did not contribute for (equitable) Profits from third parties: share; profit from T, no share; profit from minerals creates partition as minerals are mined mined Co-T’s don’t owe ea other rent uoa or ouster (frv * frac. int) Ea. party pays share of necessary expenses & taxes All share profits from 3rd parties (if un= seek acctng) Co-T making unneeded improvements recoups only at partition REMEDY: 1) put a lien on int., foreclose, pay yourself, O gets leftover; 2) sue them personally (good if fract. int. wrthlss)