1 Property Outline Fall 2006 – Saxer Property is the relationship among people as to things. I. First Possession A. Acquisition by capture First possession = ownership or First in time 1) Rule of Capture: A person owns a wild animal (common resource) once it has been taken into possession by restricting its natural liberty and bringing it within the captor’s control. Mere pursuit is not sufficient to confer ownership—must mortally wound or capture. (Pierson) If you have done everything possible to take possession under the circumstances, you have possession. (Ghen) 2) Rule of Escape & Habit of return: If you capture the animal and then it escapes, you no longer own it if you don’t have a habit of return, or if you mark it, or if is not indigenous species to the area. Pierson v. Post Post’s pursuit of the fox did not amount to occupancy, therefore Pierson’s interference was not illegal. Ghen v. Rich P mortally wounded a whale (his business), but was unable to secure the whale to his ship due to its size; bomb lance was marker (indicative of first possession); D found whale and took possession of it. Court held that the whale was the P’s possession. Court looked to customary practice of the whaling business; economics of promoting the whaling business (beneficial to society). Keeble v. Kickeringill P possessed a decoy pond, D shot rifle to scare the wildfowl away; Court held for the P—issue not ownership, but interference with trade. 3) Constructive Possession: ownership is established when the animal is on the owner’s land. 4) Minerals/Natural Resources: Treated the same as animals: that which is on your property is yours. Water is an exception: English rule: First capture, first possession. American Rule: No wasteful uses of water…reasonable use. 5) Fruits of Labor: see that people are fairly getting the fruits of their labor and not someone else’s B. Acquisition by Creation In general, you have ownership of what you create or invent 1)Imitation Rewarding fruits of labor v. promoting competition: Balance giving incentive to create good stuff against concern of creating a monopoly and stopping competition International News Service v. Associated Press INS was stealing news info from AP; court held that there was a quasi-property right in the news for the purposes of the parties’ business; INS’ behavior constituted unfair competition. Cheney Bros. v. Doris Silk Corp. D copied P’s popular silk design (unpatented) and undercut the price; Court held that D was free to imitate.
2 A person’s property is limited to the chattels which embody his invention. Others may imitate at their pleasure. Trademark—words and symbols indicating the sourse of a product or service Patent—allows you to protect novel, useful and non-obvious processes or products Copyright—protects the expression of ideas 2) Body Parts, Tissue, Cells, etc. Moore v. Regents of the University of California P sued for conversion when D profited from his cell line without disclosing/sharing profits with him. Bundle of Rights: Right to possess, right to use, right to exclude, right to transfer/include, right to sell or give, right to give to heirs, etc. 3)Right to Exclude Jacque v. Steenberg Homes, Inc. P did not want D on his land, but D went across with mobile home anyway. Court held that D was liable for trespass and awarded damages. You can keep someone off your land for no reason. State v. Shack P could not sue the state for trespass when they entered his land to offer legal advice to migrant workers. Right to exclude does not include dominion over others; cannot bar government services. Bundle of rights is not absolute—cannot use them as they infringe on others. Property rights serve human values II. Subsequent Possession A. Acquisition by Find—Possession is most important, not first in time. Finder is entitled to possession over all except the rightful owner and prior possessor. Armory v. Delamirie P found lost jewels and took them to a jeweler for appraisal; jeweler had to return them because finder has claim to property against all but the true owner. Classifications of Property: 1) Lost --Owner unintentionally and involuntarily parts with an item --As between a finder and a landowner, the finder prevails 2) Mislaid --Owner voluntarily places the item, intending to retain ownership --As between a finder and a landowner, the landowner prevails (potentially gets item back to the true owner) 3) Employee/Agent find --In a private circumstance, the employee will find for the employer --In a public place, item should go to the employee who finds the item 4) Abandoned --No intent to reclaim; intentionally and voluntarily relinquished --Rights are to the finder, even over the prior owner --Mere passage of time is not enough to make an item abandoned—can use fact of time elapsed as support of argument that there was not intent to reclaim 5) Treasure Trove --Gold, silver, currency, etc. intentionally concealed for safekeeping
3 --Rights usually go to the finder Look at the location of the object, try to deduce what the true owner’s intent was, look at the totality of circumstances. Objects found within a home or imbedded in the land are awarded to the landowner, not the finder (constructively possessed by the landowner). Hannah v. Peel P found a brooch in D’s house, but the house had been used solely for quartering soldiers (public gov’t use); Court held that D did not have claim to the brooch: -Owner of the property never resided at the home—never had control or physical possession of the brooch -Landowner was never even aware of the item’s existence until P found it -Brooch was not mislaid property—it was lost in the ordinary meaning of the word -The home was quartered by soldiers, and therefore was public, not private. McAvoy v. Medina P found a pocketbook on a table in D’s barber shop; Court held that because the pocketbook had been voluntarily placed on the table, P had no right to it. Exception to the rule of finder—try to get the item back to true owner. You want to ask Where? Who? What? Where was it found, how was it attached, public v. private, home v. business. Who—type of person, employee, trespasser, tenant. What was found, lost or mislaid or abandoned or treasure trove. Acquisition by Adverse Possession Property acquired based on occupation/possession for statutory time period 1. Theory and policies of adverse possession Statute of Limitations Ejectment—If someone is on your property, you have the right to eject. But if you don’t, after a certain period of time you lose that right, and they get title. Moves people in to action Why? -To punish people for sleeping on their rights -To allow the land to be used productively -Protect the reliance interest of the new possessor -Clears title when don’t know who really owns the property 2. Elements of Adverse Possession (CANOE H) Continuous—a pattern of occupation like that of a true owner—Must be continuous. Actual—Actual occupation; acts of occupation like that of a true owner. Color of title—invalid deed—if your acts of occupation are only on a portion of the land, you get all the land described in the title under constructive possession. Notorious & Open—Give notice to the owner that someone is occupying the property; be visible—do not have to actually find and notify the owner. Exclusive—no other in occupation w/o permission of possessor—can have joint adverse possessors, but can’t have the true owner or a stranger on the property. Hostile—Claim of right. What is the state of mind? Three views-state the view and apply the facts
B.
4 a) Objective Standard (majority view)-state of mind does not matter; it is irrelevant as long as you were on the property. b) Good faith—must believe that property is yours (color of title will help you) c) Bad faith—must know that the property is not yours and yet intend to possess it anyway (color of title may hurt you) CANOE must be satisfied to have adverse possession. SOL doesn’t start until all the elements are satisfied—can’t be stopped or interrupted. Van Valkenburgh v. Lutz P claimed adverse possession, but relevant statute did not permit his argument; court says his gardening on portion of the land did not constitute occupancy, cultivation, and improvement; he was not intending to own the land (not adverse and under a claim of right). 3. Mechanics of Adverse Possession a) Boundary Disputes—Apply CANOE, but problem w/open and notorious. Look to: --Adverse possession elements --Agreed Boundaries: uncertainty permits oral agreement (usually all property conveyance is in writing) --Acquiescence: evidence of agreement to fix boundary (if a fence sits at a particular point not on the actual property line, this will suffice for an oral agreement. --Estoppel: change in position based on reliance on neighbor’s representations regarding location of boundary line Mannillo v. Gorski D built steps from house that encroached 15 in. onto P’s land; Court ruled that this constituted adverse possession, but D had to purchase the property at a fair price from P. No presumption of knowledge arises from a minor encroachment along a common boundary-only where the owner has knowledge is possession open and notorious, But this may create a hardship on adverse possessor, so—if the innocent trespasser of a small portion of land cannot without great expense eliminate the encroachment, true owner may be forced to convey the land upon fair payment. b) Land Disputes --Tacking: the uniting of the periods of possession of successive adverse possessors to complete the period necessary to establish title by adverse possession --Privity: successive relation to the same right in property; voluntary transfer of possession Howard v. Kunto P discovered that D’s home was on their lot and sought to quiet title; P argued that D did not adversely possess the land because they had only been there a short time and only used the home in the summer months. Continuous—that of a true owner (summer homes surrounding) c) Improvements and Encroachments
5 Improvements: Once you improve property, common law says-doctrine of accession-(whoever owns the underlying dirt owns the improvement)-if you built it on the wrong land, too bad, it belongs to the true owner of the land. Modern approach: compensation or removal Encroachments: Innocent mistake—relative hardships (court may consider conveyance of the land) Willful or intentional—injunction (court may require removal of the improvement). d) Disabilities-tolling the statute Action to recover property shall be brought within 21 years after the cause of action accrued, but if person is within age of minority, unsound mind, or imprisoned, such person after expiration of 21 years from time cause of action accrues(elements are satisfied) may bring action within 10 years after such disability is removed. **Disability must be there at the time that the statute would start running.** Can’t tack disabilities together because only the disability that existed at the time when the cause of action accrues matters. e) Adverse possession and the Gov’t Adverse possession does not run against the government under common law rules Some states permit adverse possession on same terms as against private land Modern Law by statute or judicial decision may allow with limitations Estoppel against the government f) Adverse Possession of Chattels Personal Property is moveable-problem with open and notorious component of adverse possession. O’Keefe v. Snyder P’s paintings were stolen from an art gallery, P delayed in reporting them missing, filed suit against D for replevin, but D claims title by adverse possession. Court examines elements of adverse possession in relation to chattels: Introduction of equitable considerations through the discovery rule provides a more satisfactory response than the doctrine of adverse possession. Discovery Rule: Cause of action accrues when the owner first knew, or reasonably should have known through the exercise of due diligence, of the cause of action, including the identity of the possessor of the personal property. Comparison Adverse Possession Doctrine: Adverse possessors’ acts are the focus (some jurisdictions apply the adverse possession elements even cases of personal property) Discovery Rule: Owners’ acts are the focus New York Rule: No application of the discovery rule; SOL for replevin does not begin to run in favor of a good faith purchaser until the true owner makes a demand for the item. C. Acquisition by Gift Three Elements: 1) Delivery—Physical transfer; a handing over of the property to the donee, unless it is impractical. 2) Intent to Give—express or implied (question of fact)
6 3) Acceptance—by the donee—we presume acceptance if the property is of value to the donee. If manual delivery isn’t possible because of size or weight of object then constructive delivery may be allowed. Constructive Delivery: Handing over a key or some object that will open up access to the subject matter of the gift. Something that gives you access to the gift. --look at what is being handed over --Treasure map is constructive delivery Symbolic Delivery: Handing something over symbolizing the property being given. Typically a written instrument declaring a gift of the subject matter. --Just handing over instrument doesn’t suffice if item can be handed over --Some Jurisdictions accept the written instrument as delivery. Nature of Acquisition by Gift: Delivery is to be satisfied if placed in/on/around personal property of the donee (does not necessarily have to be placed in the hands of the donee) Delivery and intent do not have to be simultaneous Intent must be immediate; otherwise it becomes a gratuitous promise and not an immediate gift Delivery must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit Nature of relationship can sway the court as to whether intent was present Newman v. Bost P, decedent’s housekeeper, claims all property of decedent; as he was on his death bed he handed her keys to his bureau, and inside was his life insurance policy. Court held that there was no valid manual delivery of the life insurance policy. The bureau itself was of value, and that’s what was intended for P. P was given all furniture that was constructively delivered to her (could be accessed with the keys she was given) Gift Inter Vivos or Causa Mortis Gift Inter Vivos: gifts not made impending immediate death Gift Causa Mortis: gifts made in contemplation of and in expectation of immediate approaching death o Revoked if person does not die as expected o Must have re-delivery if the donor does not die but wishes to still gift the item o Stricter standard than inter vivos on intent and delivery elements (because this method is so susceptible to fraud; public policy—encourage formal will) Gruen v. Gruen P wanted to gift his son his Klimt painting, however, he retained the painting until his death. Court held that it was a valid inter vivos gift even thought the father retained a life estate property interest. Intent: An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership; if the intention is to make ownership effective only after death, the gift is invalid unless made by will. The correct test is whether the maker intended the gift to have no effect until after the maker’s death, or whether he intended it to transfer some present interest. Delivery: What is sufficient to constitute delivery must be tailored to suit the circumstances of the case Acceptance: When the gift is of value to the donee, the law will presume an acceptance.
7 III. The System of Estates A. Present and Future Interests 1) Present Interest: present right to exclusive possession Classifying the Present Possessory Estate – Who holds the possessory estate? Words of purchase Classify the Estate based on Duration Words of Limitation 2) Future Interest: present right to possess property in future Classifying the Future Interest – Who holds the future interest? (Classify based on possessory estate it follows) Words of purchase Indicate Duration Words of limitation 3) Inheritance Heirs o Intestate Succession: IF a person dies intestate (without a will) the decedent’s property descends to his or her heirs (note: a living person has no heirs) o Will: devisee (real property) or legatees (personal property) o Modernly, all states award the spouse as intestate successor some share of decedent’s land (size of the share often depends on who else survives – go by statute) o Under modern statute, classes of kindred are usually preferred as heirs in the following manner: first issue; and if no issue, then parents; and if none, then collaterals Issue o Issue is synonymous with descendants (not necessarily children – can be grandchildren, etc.) o If decedent leaves issue, they take to the exclusion of all other kindred o Distribution is made among the decedent’s issue per stirpes (―by the stocks‖) – if a child of the decedent dies before them, that child’s share goes to their children by right of representation o Primogeniture: eldest son received everything (historically) Ancestors o By statute parents usually take as heirs if the decedent leaves no issue Collaterals o All persons related by blood to the decedent who are neither descendants nor ancestors are collateral kin o If a decedent leaves no spouse, no issue, and no parents, the decedent’s brothers and sisters (and their descendants by representation) take in all jurisdictions Escheat o If a person dies intestate without any heirs, real property goes to the state 4) Estates A) Fee Simple Absolute Most complete form of ownership: alienable, inheritable, devisable
8 No future interest; ownership continues forever OA and her heirs (only acceptable words of limitation under common law) B) Fee Simple Defeasibles Fee simple Determinable o Fee simple subject to self-executing condition which removes possession if condition is broken o Always accompanied by a future interest retained by the transferor – ―possibility of reverter‖ o O A and his heirs as long as the land is farmed Fee Simple Subject to Condition Subsequent o Fee simple subject to a condition which, if broken, allows grantor to enter land and reclaim it (not self-executing) o Future Interest retained by the transferor – ―Right of Entry‖ o O A and his heirs, but if the land is not farmed then O may reenter and claim the land Fee Simple Subject to an Executory Limitation o Fee simple subject to a condition which, if broken, the property interest will shift to another party o Future interest held by a third party (future interest is an ―executory interest‖ o Types of executory interest: Shifting executory interests: the right to possession under the future interest is being taken from a third party. O A and her heirs, but if A sells alcohol on the land, then to B and her heirs Springing executory interests: the right to possession is being taken from the grantor. O A and her heirs if she graduates from law school (O has possession; A is the 3rd party) Variations on springing executory interests o The ―future interest only‖ conveyance: O A and her heirs if A gets married. (Note: there is an express condition precedent: the grantor, O, holds a fee simple subject to an executory limitation and the third party holds a springing executory interest in fee simple absolute o The ―gap‖ scenario arises when there is what appears to be a contingent remainder, but the express condition precedent is one that by its nature cannot be satisfied before the end of the preceding finite estate. O A for life, then to B and her heirs if B attends A’s funeral. Note: there is a temporal gap between the end of the finite estate and the point in time when the express condition precedent may be satisfied. The grantor, O, holds a reversion in fee simple subject to an executory limitation and the third party, B, holds a springing executory interest in fee simple absolute.
9 C) Seisin o The fee simple, the fee tail, and the life estate are freehold estates – at common law the freeholder had ―seisin‖ o Seisin was originally a ceremonial tradition of handing over a piece of the land (dirt, etc) as delivery of the land (livery of seisin) o Must be someone who is seized – never a moment in time where someone is not seized of the land D) Finite Estates Life Estate o Lasts for the duration of the grantee’s life o OA for life o At common law, life estate is the default estate o If a life tenant transfers his or her interest, the grantee/transferee holds a life estate ―pur autre vie‖ (measured by the life of the original life tenant – ―for another’s life‖) Fee Tail o Series of life estates (one generation after another – lineal descendents; expires when A’s direct line dies out) o Mostly abolished in US o OA and the heirs of her body, then to B and the heirs of his body o Grantee can limit the eligible heirs of the body by drafting a ―fee tail male‖ or ―fee tail female‖ or other limiting characteristic. ―Fee tail special‖ OA and the heirs of his body by W (specific wife) Term of Years o Express language of the conveyance established a finite duration which is calculable on the day the interest is created o O A for five years (does not have to be greater than one year – could be one day) OA from Jan 1, 2006 until Dec 31, 2010 o Non freehold Interest (Landlord/tenant relationship) – no seisin Two Possible future interests o If the grantor holds the future interest – reversion o If a third party holds the future interest – remainder (vested or contingent) Remainders o Vested Remainders Remainder is vested if the remainderman (holder of the remainder) is: Born Ascertainable (ID the person by personal name), and There is no express condition precedent (must be satisfied before the remainderman can take actual possession) The Vested Remainder Subject to Divestment: If the qualifying condition may occur prior to the vested remainder becoming possessory, the vested remainder
10 is subject to divestment and the future interest in the third party is a shifting executory interest in fee simple. o OA for life, then to B and her heirs, but if A stops farming the land, then to C and her heirs o Call life estate ―subject to executory limitation‖ o Note: if the condition precedent is in a clause creating the remainder, it is a vested remainder subject to a divestment (future interest following it will be a shifting executory interest in fee simple) o Contingent Remainders: Default remainder (any remainder not vested) At common law, a contingent remainder has to vest at, or prior to, the end of the preceding finite estate, or the contingent remainder is destroyed by operation of law OA for life, then to B and her heirs if B survives A (what if B dies before A? Contingent remainder is destroyed; what if B survives A? Contingent remainder becomes vested) When there is a contingent remainder, there must be someone to take the property if the contingent remainder fials to vest in time and is destroyed. Where there is no express party, the default taker is always the original grantor Alternative Contingent Remainders Arise where the conveyance sets forth two contingent remainders, and the second one is contingent on the first failing to vest. OA for life, then to B and her heirs if B graduates from law school, but if B fails to graduate from law school, then to C and her heirs Alternative Contingent remainder Look Alike Where the first contingent remainder is not in fee wimple, there can be an express gift over to a third party in fee simple which eliminates any need for default reversion in the grantor OA for life, then to B for life if B graduates from law school, then to C and her heirs(C’s interest will follow either A or B’s life estate, so it is a vested remainder – no default reversion to O) Merger Anytime you see a transfer, check for merger o If the same party holds successive vested interests, the interests should be merged and re-identified based upon the largest estate created by the merger o Only applies to vested interest o For the merger doctrine to apply, vested interests must be successive and held by the same party o Typically comes into play when a finite estate is transferred
11 o Merges into the Largest Estate o OA for life, then to B and her heirs if B graduates from law school. B graduates from law school – remainder becomes vested. A then transfers to B his life estate before his death. B now holds a life estate pur autre vie and a vested remainder in Fee Simple Absolute – merge into Fee Simple Absolute Class Gifts o OA and B and their heirs o A and B hold the property concurrently in fee simple absolute o Where there is a conveyance of a remainer to a class; the issue is whether the remainder is vested or contingent: Once at least one class member vests, the remainder becomes vested. But if more individuals can enter the class and vest in the property, the remainder is classified as: o Vested Remainder subject to open (Remains open until the class closes) o Class can close – 1) naturally/biologically (death) or 2) by the Rule of Convenience: once one member of the class is entitled to take actual possession of the property, the class closes
IV.
Co-Ownership and Marital Interests A. Common Law Concurrent Interests Situations when 2 or more persons have concurrent rights of present or future possessions 1) Tenancy in Common Separate but undivided interests in the property Interest of each is descendible; may be conveyed by deed or will No survivorship rights Unity of possession (one unity) – each tenant in common is entitled to possession of the whole 2) Joint Tenancy Right of survivorship Together regarded as a single owner (CL) Each tenant is seised ―per my et per tout‖ – ―by the share and by the whole‖ When one joint tenant dies, estate continues in survivors freed from participation of decedent (decedent interest vanishes; nothing passes) Four Unities of Joint Tenants: o Time – must be acquired or vest at the same time o Title – must acquire title by the same instrument/deed or by joint adverse possession o Interest – equal undivided shares and identical interests measured by duration o Possession – each must have a right to possession of the whole Any one joint tenant can convert a joint tenancy into a tenancy in common by conveying his interest to a third party; if any of the four unities are destroyed joint tenancy is severed Any party can bring an action for judicial partition Some states allow unequal interests and still uphold joint tenancy
12 Creating a joint Tenancy o Title: a real property – must have a deed Severance of Joint Tenancy (results in Tenancy in Common) o Get rid of one or more unities to create a tenancy in common (no right of survivorship) o By mutual agreement o Unilateral conveyance o Judicial partition o When one party severs a JT, they only sever their relationship – not the relationship of others between themselves o Ex: A, B, C, as joint tenants with 1/3 share each: A conveys to D (severs JT with B and C) but when B dies, his share goes to C b/c their JT was not severed. D has 1/3 tenancy in common with C who holds 2/3 Avoidance of Probate o Because nothing passes, no property has to go through probate o Interest cannot be passed by will o Creditors cannot reach decedent JT’s interest Taxation o Fed estate taxation – ignores JT fiction that nothing passes o Married couple gets marital deduction o State Inheritance tax: based upon fractional ownership share 3) Modern Presumption – tenancy in common is default unless express declaration of intent to create a JT. To A&B as joint tenants with the right of survivorship and not as tenants in common (Be this clear, otherwise it will be presumed to be a tenancy in common) Riddle v. Harmon Decedent wished to devise her property to P by will, so she unilaterally sought to sever the JT she held with her husband. Court held that the JT had been severed despite the absence of a ―strawman‖ Note: At common law, it was necessary for joint tenants to acquire their interests at the same time and by the same conveyance instrument, so where one of the proposed joint tenants already owned the property, it was necessary to convey the property to a disinterested third party or ―strawman‖ who then conveyed the title to the ultimate grantees as joint tenants. Common sense and legal efficiency dictate that a joint tenant should be able to accomplish directly what he or she could otherwise achieve indirectly by use of elaborate legal fictions 4) California Law CA has community property cannot hold tenancy by the entirety CA legislation (Civil code sec. 683.2) says that you must place severance of joint tenancy on public record: requires recording of severing instrument prior to death of severing tenant to extinguish survivorship of non-severing counterpart Ex: H&W are JT; W executes a single party severance deed; W does not record If W dies first? JT is not severed – husband gets it all If H dies first? JT is severed Statute only applies to extinguish survivorship of nonsevering party)
13 This is intended to encourage notice – must record to make severance valid against the non-severing party Harms v. Sprague One of JT mortgaged his property interest; when he died, court held that the mortgage was a lien on the property which did not sever JT, and the mortgage did not survive the death of the mortgagor JT (only a foreclosure would sever – this did not occur prior to the death) Note: this may vary from jurisdiction; ―Harms view‖ – mortgage does not survive the death of the mortgagor Lien Theory (majority) – Pledging property through a mortgage is a lien on the property (this would allow the mortgagee to compel a forced sale – foreclosure) Title Theory (Minority) – Pledging property through a mortgage is a conveyance of the property Note: A lease does not sever JT A&B own BA in JT A leases to C for 10 years 5 years later A dies and devises property to D Was the JT severed when A leased the property? NO – the lease DOES NOT sever (all jurisdictions agree) Does the lease expire on death of lessor tenant? Split – ―CA Rule‖ recognizes the rule that the lease does expire 5) Joint Tenancy Bank Accounts A. ―True Joint Tenancy‖ Bank Accounts – O makes a deposit which is intended as a present gift to A for one-half the sum deposited in addition to survivorship rights to the whole sum B. ―Payable on Death‖ Bank Accounts – O intends to make a gift to A only of survivorship rights (avoids probate) C. ―Convenience‖ Bank Accounts – O only intends A to have power to draw from the account to pay O’s bills Note: the bank card signed by O or A usually says one of the parties has the right to withdraw all the money on deposit during their joint lives, and the balance goes to the survivor Majority: surviving tenant takes unless clear and convincing evidence otherwise Issues: present rights of a nondepositer? Minority: parties hold equal fractional shares 6) Relations among concurrent owners Each own interest in all of fee; each has a right to possession of the whole; neither can do any act to the prejudice of his cotenants in their estate A. Partition Termination of co tenancy can occur through a voluntary agreement; in the event that an agreement cannot be reached – partition is necessary Privilege of each co-owner to transform a concurrent estate into an estate held in severalty Equitable Action – not available for tenancy by entirety Favored method of partition: physical divide – ―In kind Partition‖ (common law preumption)
14 A ―Partition by Sale‖ should only be ordered when: o The physical attributes of the land are such that a partition in kind is impractible or inequitable o The interests of the owners would better be promoted by a partition by sale Ask: Does economic gain to all cotenants by sale outweigh one cotenant’s desire in kind? Burden is on the party requesting partition by sale to demonstrate that it would better promote the owners’ interests; a sale of one’s property without his consent is an extreme exercise of power warranted only in clear and exceptional cases “Owelty” – If partition in kind results in unequal shares – owelty is payment to make the transaction equitable Delfino v. Vealencis P sought to compel partition by sale of property, as they wished to create a residential development, but their adjacent co-tenants ran a garbage collecting business Court held that in kind partition was appropriate – must consider the interests of both tenants. 7) Sharing the Benefits and Burdens of Co-Ownership A. ―Ouster‖ describes two fact situations: Adverse Possession by cotenant: the beginning of the running of the SOL for adverse possession (claim of absolute ownership and a denial of the cotenancy relationship by the occupying cotenant) Demand for use and refusal by cotenants: the liability of an occupying cotenant for rent to other cotenant (occupying cotenant to vacate is not sufficient b/c occupying co-tenant holds title to the whole and may rightfully occupy the whole unless the cotenants assert their possessory rights) Cotenant not in possession must state, ―I demand use and enjoyment of these premises‖ Mesne profits=reasonable rental liability Action for Accounting=actual rent paid B. Adverse Possession Need ouster when trying to adversely posses against co-tenant Denying use and enjoyment = mesne profits Denying property interest entirely = adverse possession – SOL begins to run Spiller v. Mackereth P and D owned a building as tenants in common. When their lessee vacated, D entered and began using the structure as a warehouse. P demanded that he vacate half the building or pay half the rental value. He refused, and P brought suit. Court held that D did not have to pay rent – in absence of an agreement to pay rent or an ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property
15 Swartzbaugh v. Sampson Can one joint tenant who has not joined in the leases executed by her cotenant and another maintain an action to cancel the leases where the lessee is in exclusive possession of the leased property? Court said no. Lessee has the same right as JT who made the lease (steps into shoes of JT; lease does not sever JT Mrs. Swartzbaugh could bring an ―action for accounting‖ to receive a share of the rent received Note: no adverse possession – Cotenant cannot hold adversely unless absolute ownership is claimed C. Accounting for Benefits, Recovering Costs A cotenant who collects from third parties rents and other payments arising from the co-owned land must account to cotenants for the amounts received A cotenant making or paying for necessary repairs has no affirmative right to contribution fro the other cotenants in the absence of an agreement Interests of the improver are to be protected if this can be accomplished without detriment to the interests of the other cotenants Can bring an ―action for accounting‖ to claim your share of the rent, etc. Lessee may lose lease on partition or death of lessor Lessee steps into shoes of lessor tenant; lessee subject to possessory rights of nonlessor cotenant Carrying charges – mortgage, insurance, taxes – right to contribution in proportion to ownership – ―action for contribution‖ (unless you are in sole possession – contribution must exceed your use in order to have a right to contribution from cotenants) Partition Action: Credit for reasonable repairs unless in sole possession; improved portion goes to improver or value increase to property Action for accounting/mesne profits: Set off for reasonable repairs; improver awarded increments in value attributable to improvement B. Marital Interests 1) Tenancy by the Entirety Created only in husband and wife; four unities plus fifth – the unity of marriage – are required Right of survivorship Both are seised of the entirety ―per tout et non per my‖ Only a husband and wife together can convey and thereby defeat the right of survivorship Neither has the right to judicial partition Divorce = parties become tenants in common Some states do not have this interest (CA does not) 2) Two Systems of marital property: Common Law marital property system o No community property – H&W have separate property o H&W regarded as one entity; wife operated under husband o Ownership is based on who acquires property
16 o Married Women’s Property Acts: women could own property Community property o H&W are a marital partnership and should share their acquests equally o See 7) Community Property below
Sawada v. Endo P was in an accident with D, D conveyed his property (held in T by the E with his wife) to his sons. When P could not obtain satisfaction for the judgment against D, they brought suit to set aside the conveyance. Court held that the interest of one spouse in real property, held in tenancy by the entirety, is not subject to levy and execution by his individual creditors (the creditors could not have reached the property regardless of the conveyance) Group 3 approach Note: CL view when held as T by the E (before Married Woman’s Property Acts) – husband had management and control, therefore creditors of husband could go after property; creditors of wife could not 3) Jurisdictional Approaches to Creditors’ Rights under Tenancy by the Entirety Group 1: CL approach – creditors can follow management and control – husband only Group 2: Wife given same rights as Husband – creditors can follow management and control – can levy on possessory rights and survivorship Group 3: Neither husband nor wife may convey w/o consent of other (majority) – creditors cannot reach property in T by the E unless H&W together take out a mortgage/agree to use land Group 4: Only thing a creditor can reach is that party’s right of survivorship – creditor of husband: if wife dies first, creditor gets husband’s property, if she does not die first – creditor loses interest US v. 1500 Lincoln Ave H held property in T by the E with W, and without her knowledge used the land for illegal drug sales. Court held that the government could not take the land; however, they could levy H’s right of survivorship. (Group 4 approach) Remedy: innocent owner retains full use and possession of the property during her lifetime; also retains the right to obtain title in fee simple absolute if she is predeceased by her guilty husband Gov has a right to forfeiture of H’s property if and when it comes into his sole possession 4) Termination of Marriage by Divorce Tenancy by the entirety is converted into tenancy in common; alimony has modernly been called ―rehabilitative‖ and is only support for a limited time until the spouse can enter the job market, etc. Common law division of property by how title was held was replaced by the rule of ―equitable distribution‖ where property is divided on equitable principles In re Marriage of Graham W worked to support H while he obtained his master’s degree; court held that the MBA was not marital property. Something is property if it can be assigned, sold, transferred, conveyed,
17 or pledged, or if it terminates on the death of the owner; an MBA is not property under this standard Note: in CA there is restitution reimbursement for supporting spouse Elkus v. Elkus W divorced the H after becoming a famous opera singer – H had cared for the children, coached W, etc. Court held that W’s career/celebrity status did constitute marital property. To the extent the husband’s contribution and efforts led to an increase in the value of the P’s career, this appreciation was the product of the marital partnership, and therefore marital property subject to equitable distribution 5) Marital Property All Property acquired by either spouse subsequent to the marriage except: o Property acquired by gift, bequest, devise, or descent o Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, etc. o Property acquired after legal separation o Property excluded by valid agreement 6) Termination of Marriage by Death of one Spouse Common Law: Land stayed in the patriarchal family, but surviving spouses should be supported for life Modern Elective Share o The surviving spouse is not entitled only to support, as dower and courtesy provided, but to an ownership interest in the decedent spouse’s property o CL marital property states have a ―forced share‖ – if one spouse dies and leaves a will, then the surviving spouse has to decide/elect to take whatever that surviving spouse has left in the will, or take a forced share (usually 1/3 – ½ both real and personal property) o Ex: H has a life ins. Policy $60K payable to W H&W own house as JT worth $60K at H’s death H dies owning BA worth $90K, stocks worth $20K and a $10K savings account W would get: life ins - $60K; JT house - $60K, but she could also take a forced share of H’s will – H’s will: To D: BA - $90K; stocks - $20K; savings - $10K 7) The Community Property System Each party owns an equal share of property acquired during the marriage; separate property is that acquired prior to marriage and property acquired during marriage by gift, devise, or descent When the marriage is terminated, some states require equal division of the property; other states authorize a divorce court to make equitable division of community property Characteristics of Community Property States: o Marital partnership; earnings owned equally o Classification of property: community property and separate property o Presumption: property acquired or possessed during marriage is community property
18 o Issues: Commingling, title, and transmutation (change classification from separate property into community property) o Divorce: Community property divided equally or equitably o No dower, curtesy, or tenancy by the entirety o No forced share o At death, each may dispose of ½ by will (no survivorship but intestacy provision may apply) o Tax implications for holding title as Community Property (tax advantage) o Either H and W acting alone has power to manage CP o Fiduciary Duties: must act in good faith for the best of all parties o Creditor liability follows management and control 1) Mixing Community Property with Separate Property Example: wife makes a 1/3 down payment on a house prior to marriage, and pays remaining 2/3 after marriage with community funds: ―Inception of Right‖ rule – character of the property is determined when wife signed the contract – the house is her separate property ―Time of Vesting‖ rule – title does not pass until all installments are paid – the house is community property ―Pro rata apportionment‖ rule – the community payments buy in a pro rata share of the title (CA) 2) Migrating Couples Once property has been characterized based on the system within that jurisdiction, ownership does not change when parties change their domicile unless both parties consent to the change At death: Law of domicile at death govern personal property; law of state where land is located governs real property 3) Rights of Domestic Partners CL marriage is only recognized in 11 states CA has ruled that property division or support can be implied from conduct of the parties (express contract is not necessary) regardless if they are married or claim to be married In Domestic partnerships, property is divided only according to principles of marital property; if one partner dies, surviving partner’s rights depend on the laws of intestate succession Court has held that state cannot deny domestic partners of marital benefits Note: 1996 Defense of Marriage Act – fed law says no full faith and credit to other states in this area V. Leaseholds: The law of landlord and tenant A. Leasehold Estates 1) Term of Years An estate that lasts only for a fixed period; no notice to bring the estate to an end; death has no effect on duration L to T for ten years so long as used for a school – term of years determinable; reversion in L
19 2) The Periodic Tenancy A lease for a period of some fixed duration that continues for succeeding period until either the landlord or tenant gives notice of termination; death has no effect on duration (Ex: month to month lease) Expressly or impliedly created Notice: Year to year – 6 mo notice; less than one year lease – length of notice period cannot exceed 6 mo (4mo, give 4mo notice; 2 mo, give 2 mo notice) Must terminate on final day of period 3) The Tenancy at Will A tenancy of no fixed period that endures as long as both landlord and tenant desire; ends when on party terminates or at the death of one party or landlord conveys or tenant assigns No notice required unless stated Improper notice m-to-m T notified L on 11/16 that she would vacate 11/30 Improper – need one mo notice Majority: this notice is sufficient for vacating 12/30 Minority: notice has no effect b/c it is improper – could be liable for rent indefinitely Garner v. Gerrish Lease provided that ―the tenancy continue from May 1977 – Lou Gerrish has the privilege of termination at a date of his choice.‖ P, the L, died, and his executor sought to evict D, arguing that the lease was a tenancy at will. Court held that the lease was a determinable life tenancy; the lease expressly and unambiguously grants to the tenant the right to terminate, and does not reserve to the landlord a similar right 4) The Tenancy at Sufferance: Holdovers Arises when a tenant remains in possession after termination of the tenancy; common law gives the landlord two options: o Eviction (plus damages) o Consent (express or implied) to the creation of a new tenancy (1 year limit to impose) o Note: Some jurisdictions have changed these rules o Majority: Converts to periodic, based upon the way rent was paid (if the rent was paid yearly, the it could be a year to year periodic (Max 1 year) o Minority: Converts to Term (Max 1 year) Crechale & Polles, Inc. v. Smith LL ordered T to vacate the premises; however, he did not follow through with eviction and subsequently accepted the following mo’s rent. Court held that once the LL elects to treat a T as a trespasser but fails to pursue his remedy for ejecting the T (by accepting monthly checks) he in effect agrees to an extension of the lease on a mo to mo basis. 5) The lease
20 Conveyance v. Contract: A lease is both; however modernly, courts rely on contract principles to reshape the law of leases The statute of frauds – generally leases for more than one year must be in writing Form leases/Bargaining power – typically leases are standardized documents offered to tenants on a take-it-or-leave-it basis; no negotiation over terms 6) Unlawful Discrimination Federal Fair Housing Act – they want fair housing o Sec. 3603 – exemptions (b) not held to fair housing act if you’re an owner and don’t have more than 3 single family homes Don’t get these exemptions from advertisements (can’t say you want white only peeps in ad) Rooms or units in dwellings containing living quarters (duplexes or apartment houses) not more than 4 families and 1 is owner o Sec. 3604 – Prohibitions Can’t have a pattern of only white models in ads and only white peeps in your homes B. Delivery of Possession and Subleases/Assignments Hannan v. Dusch Does D have a duty to see that the premises were open for entry by P (oust trespassers and wrongdoers as to open the premises for entry by the tenant)? NO – see American Rule 1) Duty of Landlord to Deliver Actual Possession English Rule – implied covenant that premises shall be open to the tenant at the time fixed by the lease. Reasons: LL is in a better position to deal with problem; tenant does not want to buy into a lawsuit American Rule – LL is not bound to put the tenant into actual possession but is bound only to put him in legal possession (in situation of trespass – remedy is against the wrongdoer, not against the LL) 2) LL’s implied covenants Deliver Legal possession (cannot lease to someone else) Covenant of quiet enjoyment (LL agency/party under their authority cannot disturb) Delivery of Actual Possession? T has the burden unless express covenant (majority Americal rule) 3) Subleases v. Assignments If original tenant has a reversionary interest, then it is a sublease; if the tenant has no way of reentry, then it is an assignment (assignment is transfer of party’s entire interest under the lease) Look to the intent of the parties Privity of contract – original lease agreement between the parties Novation – LL has explicitly agreed that tenant is no longer liable o If LL gives written permission to assign/sublease this is not a novation – does not let original tenant off the hook
21 Privity of estate – if the assignment is between the LL and the 2nd tenant – person who has possession o Assignment, by itself doesn’t destroy privity of contract – this means that the contractual duties created by a lease continue to be personal obligations of the original parties to the lease Privity of contract – in the sublease is between the LL and the original tenant, and the original tenant and the 2nd tenant (assignee) Privity of contract – based on 3rd party beneficiary relationship – if you enter into a contract where 3rd party benefits LL, then that establishes a connection with that third party, giving the LL standing to sue o This occurs where the subsequent tenant expressly assumes the covenants of the original lease
Ernst v. Condit Ernst leased property to Rogers for a one year term – Rogers constructed a race track and constructed other improvements on the property. Rogers then entered negotiations with Conditt for the sale of his business. Ernst agreed to amend the lease to two years. Was the agreement a sublease or an assignment? Rogers reserved no right to reentry and no part or interest in the lease. Conditt had a right to possession of the property for the entire term of the lease, thereby creating an assignment. Conditt is directly liable. 4) Withholding Consent to sublease or Assign Kendall v. Ernst Pestana, Inc Can a lessor withhold consent to an assignment? Consent can be withheld only where the lessor has a commercially reasonable objection to the assignee or the proposed use; this is a minority rule (CA): cannot arbitrarily withhold consent Note: courts will permit arbitrary withholding if express provision was freely negotiated Commercially reasonable objections? o Financial responsibility – proposed tenant’s ability to pay o Suitability and Legality of Use o Need to Alter Premises o Nature of Occupancy o Good Tenant mix – one lead (i.e. Nordstrom; good mix – different stores) o Projected success of the tenant Unacceptable Reasons to withhold consent? o Personal Taste o Desire to charge higher rent o Convenience o Sensibility/personal beliefs o General economic protection Rule in Dumpor’s Case: If there is a prohibition against assignment it is terminated when L consents to an assignment unless he/she specifically reserves the right to prohibit future assignments
22 Note: only applies to assignments C. The Tenant Who Defaults 1) Tenant in possession Common Law o Self help is okay to get a tenant out if LL is Legally entitled to possession; AND Right exercised in a peaceable manner Modern Doctrine (minority) o No self help – must use judicial process Berg v. Wiley P began remodeling the leased premises, and D contended that P had violated the lease by making changes without consent of the lessor. D gave P a list of remodeling items that needed to be completed or else he would retake possession. P closed the restaurant for remodel. D came to the premises and attempted to change the locks and on another occasion pounded on the back door demanding admittance. D finally did enter without permission, changed the locks, and relet the premises to another tenant; Court held that P had not abandoned the premesis: The lockout was wrong as a matter of law as it was No accomplished in a peaceful manner; and Any self-help reentry against a tenant in possession is wrongful under the modern doctrine that a LL must always resort to the judicial process to enforce his statutory remedy against a tenant 2) Tenant who has Abandoned Possession Duty to Mitigate o Modern Trend (majority) LL does have the duty to mitigate/reduce damages Burden to prove mitigation Minority: Burden is on LL to show efforts; LL is in the best position to know what has been done to mitigate Majority: adopt contract view that the tenant as the breaching party has the burden of proof Factors to decide whether there has been proper mitigation: property shown, advertised, treated as part of vacant stock, residential v. commercial may or may not impact duty to mitigate – but the duty is applied to both o Common Law (Minority) LL does not have a duty to mitigate Property Law – Tenant has purchased complete rights to that property for that term – LL has no duty or right to infringe on the property during this period (owns a ―piece of the line‖) Contract Law – the other party can argue that the breaching party should have tried to mitigate the damages o Conflicting Duties – if the contract says that tenant cannot sublet/assign, does this hinder the LL’s duty to mitigate?
23 If LL asserts their right to disallow subletting (specified in the lease), this may conflict with duty to mitigate Rule of Abandonment: when tenant vacates without justification and without any intention of returning and defaults in rent payment When was the LL’s intention when they re-leased the property to someone else? o If LL believes there has been abandonment, LL is simply complying with his duty to mitigate although the tenant owes him for his lease contract; LL possibly does not want to pursue rent from tenant who abandons the property We must infer LL’s intent whether they intend to hold T for damages, to mitigate, to let them off the hook – if they get more money for the re-let, then if they are mitigating the damages, extra rent could be argued to be owed back to abandoning tenant to reduce his damages (if you look at it as a property interest that it entirely owned by the tenant during his ―line‖) this is theory, never been ruled Independent Covenants – when promises are independent, lease cannot be terminated for a breach T breaches his promise not to improve the premises/make certain changes to the property – LL cannot evict
Sommer v. Kridel P rented an apartment, and before moving in notified LL that he was unable to afford it; LL did not reply to P’s letter. Subsequently, another renter inquired into the vacancy of P’s apartment, but LL did not show it. LL did not re-enter and rent the apartment to a new tenant until over a year later. LL sued, demanding the rent for P lease term Court held that LL should have mitigated the damages. D. Duties, Rights, and Remedies (Esp. R: Condition of Leased Premises)
1) Landlord Security Devices: a) Security Deposit 1) purpose: to compensate L for default by T 2) statutory reform to prevent abuse by L (many states have these to discourage L from unduly withholding security deposit) b) Advance Rent c) Liquidated damages: agree in advance how much T will pay if they breach the contract, rather than trying to prove the damages if there is a breach (Courts do not want this to be used unless there is a precise way to calculate those damages- cannot act as a punishment to the breaching party) 2) Common Law Landlord Duties (generally) a) Implied Duties 1) Legal possession- L must give this to the T- sole possessory rights 2) Quiet Enjoyment- use of premises- T cannot be disturbed in possession 3) Actual Possession- English rule- this is a duty; American rule- this is not a duty 3) Caveat Lessee a) No duty implied as to condition of premises (starting place for condition of leased premises problems*)
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b) Exceptions to Caveat Lessee 1) Short term lease of furnished dwelling a. Purpose of this arrangement is for short, furnished living conditions; there would be no time for tenant to act 2) Duty to disclose latent defects (if L brings it to T’s attention- it is a patent defect) 3) Duty to maintain common areas 4) Duty to undertake carefully any repairs L promised 5) Duty to abstain from fraudulent misrepresentation re: condition 6) Duty to abate immoral conduct and other nuisances 4) Landlord Breaches a) Implied duties b) Exceptions to Caveat Lessee which create duties c) General duty- Reste case d) May be express duties stated in the lease 5) Issues Involving Condition of Premises a) when T wants to vacate or stay and pay less or no rent b) when T or T’s invitees are injured b/c of condition of premises and claim tort damages against L 6) Quiet Enjoyment and Constructive Eviction a) Breach of covenant of quiet enjoyment: any act or omission of L which 1) Renders premises substantially unsuitable for purpose leased or 2) Substantially interferes with beneficial use of enjoyment b) Remedy: constructive eviction: condition is so bad that LL may as well have come in and evicted b/c T cannot live there 1) Tenant can vacate (implied covenant of quiet enjoyment is a mutual covenant- this entitles the T to stop paying rent- dependent) or 2) Stay in possession and sue for damages Reste Realty Corp. v. Cooper T signed a five year lease in reliance on a promise from the LL that the flooding resulting from the common area driveway would be repaired. The problem persisted, and T vacated. -Breach of quiet enjoyment; breach of caveat lessee exceptions- duty to disclose latent defects; maintain common areas 7) Partial Eviction a) Actual Partial Eviction (change lock on the garage) -Majority- tenant relieved of all rent -Minority/Restatement- tenant may receive abatement in rent b) Constructive Partial Eviction (condition of premises- toilet does not work) -Majority- tenant may receive abatement in rent -Minority- tenant relieved of all rent 8) When may Tenant legally stop paying Rent? a) Breach of Duty by the L: Express duty promised by L Statutory duty Implied duties Duty exceptions to caveat lessee b) Declaratory judgment to avoid risk to tenant (may still be a chance that court would say breach above was not sever enough to merit stopping rent payments) 9) Illegal Lease Theory**** a) Discuss this after breach/caveat lessee
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b) Says if there are housing code violations at the time L and T entered into lease- then the lease is illegal at the onset c) If conditions are very bad, assume it is a violation of the housing code d) Advantages over constructive eviction remedy? Do not have to leave the premises e) Can lessee stop paying? No, still must pay reasonable rental value if T stays f) Disadvantages? Cannot use theory unless violation was there when lease was created 10) Implied Warranty of Habitability a) In rental of residential dwelling unit, implied warranty exists that L will deliver and maintain premises that are safe, clean, and fit for human habitation 1) Source of warranty: i) Statutory ii) Judicial decision 2) Scope of warranty: i) Applies to all latent and patent defects in essential facilitates of rented unit and associated common areas (this differs from exceptions to caveat lessee- which applies only to latent defects) ii) Implied in tenancies for a specific period or at will iii) Warranty cannot be waived by T- either explicitly or implicitly 3) Advantages to Tenant: Creates a duty on part of L as long the lease fits within the scope Often generous in terms of damages- right to withhold rent; can recover punitive damages 4) Risk to tenant: Must be sure that there has been a breach before taking steps 5) Determining breachi) Breach if uninhabitable in the eyes of TARP ii) Look to housing code violations- compelling but not conclusive iii) Standard=fit for human habitation iv) Ask whether defect has impact on T’s safety or health? v) T must notify L of defects and allow reasonable time to correct 6) Remedies for Breachi) Contract law remedies: Rescission Reformation Damages ii) Other remedies: Withhold rent and damages for past rent paid Repair and deduct iii) Tort damages: Discomfort and annoyance or Emotional distress Punitive damages (willful, wanton) Hilder v. St. Peter P moved into apartment in horrific condition; P never abandoned the premises, but brought suit to recover for rent paid and additional compensatory damages. Tenant must show that: 1) LL had notice of the previously unknown defect and failed within a reasonable time to repair it 2) The defect, affecting habitability, existed during the time for which rent was withheld Note: the doctrine of constructive eviction is no longer viable when the tenant seeks compensatory damages in the amount of rent already paid 11) Retaliatory Eviction a) Common Law- L has absolute freedom to terminate periodic tenancies and tenancies at will for any reason
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b) Modernly- most jurisdictions forbid retaliatory action by LL -Rebuttable presumption of retaliatory purpose if L seeks to terminate after T’s good faith complaint -Not applicable to commercial leases 12) LL Tort Liability a) Common Law/majority- L is liable for injury when there is a breach of duty arising from exceptions to caveat lessee b) Modern trend- Implied Warranty of Habitability imposes general duty of care under all circumstances (broader- no need for exceptions to get tort liability) ***Moving toward general duty of care c) Strict Liability- if a T is injured, L is liable (CA was strict liability, but not currently- there are presently 2 states- LA and IN that hold this view) 13) Tenant’s Duty not to Commit Waste a) Breach of T’s duty not to commit waste- if T makes a change that affects vital and substantial portion of the premises, as would change its characteristic appearance, fundamental purposes uses contemplate, or affect the realty itself b) Law of Waste 1) Voluntary a) Affirmative Acts i) Removal of fixtures? b) Ameliorating Waste ii) Change the premises by improving it 2) Involuntary/Permissive a) Tenant Duty to Repair (should be fixing something, but T fails to do so) b) Duty of T: maintain premises to be airtight and watertight c) CL- T has implied duty to make minor repairs to keep buildings windtight and watertight to prevent waste d) Modernly- Implied Warranty Habitability negates T’s implied duty to repair e) T may have an expressly duty to repair in lease 14) Destruction of Leased Premises a) Whether T must continue to pay rent after leased premises have been destroyed? 1) Under CL- yes (leasing the property, not the building)- exceptions- short term lease, only a portion of building rented or if building covers entire lot 2) Modern Trend- no, based on contract- impossibility of performance or frustration of purposes theories