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Property is something of value an asset, that can be bought, sold, or given away. Property rights are generally held by individuals. What are these rights/interests? 1. right of possession 2. right to exclude/deny access 3. right to transfer/alienate a. by sale b. by will c. by inheritance d. by trade/barter e. by find f. by gift 4. right to use (destroy)? Conversion 1. wrongful exertion of dominion or interfering with another’s ownership or right of possession over another’s personal property. 2. Without owner’s consent 3. Without lawful justification Plaintiff must prove 1. belonged to the plaintiff 2. defendant wrongfully took it 3. harm suffered by plaintiff



1. Trespass quare clasuam fregit: an action for money damages for defendant’s direct interference with the plaintiff’s actual possession of plaintiff’s land. 2. Trespass de bonis asporates: an action for money damages for defendant’s injury to plaintiff’s personal property resulting from a carrying away of goods. 3. Trespass on the case: an action for money damages for defendant’s indirect or consequential injury to plaintiff’s chattels or land resulting from defendant’s wrongful act. 4. Trover: action to recover the value of an object wrongfully taken or retained by the defendant. 5. Revpiln: action to recover the value of chattels wrongfully taken from the plaintiff’s possession by the defendant. 6. Ejectment: action to recover the possession of the plaintiff’s real property. This action didn’t necessarily require the plaintiff to prove an absolute title. Therefore the action was unlike the action “trespass to try the title” where plaintiff’s title had to be proven. Locke’s Labor Theory of Property A. Each person has a property right herself B. It follows each person has a property in her own labor C. It follows from b that anytime someone uses her own labor on an object to increase its value, she acquires a property right in it.


Occupancy is required to obtain possession in wild animals. Occupancy is capture, confinement, possession, and control. (Pierson v. Post) Mortal wounding Is dependant on who owns the land Depends on the right to use the land May mean attraction to land (geese case) Occupancy isn’t Mere pursuit Doesn’t mean driving animals off your land b/c you don’t control where they go. Confinement Confinement doesn’t have to be absolute but it must be merely impossible for the animal to escape. (State v. Shaw) Pursuer must bring wild animals into his power and control (must show he doesn’t intend to abandon the animal) Type of animals Types of animals does matter, domesticated v. wild. Harder to obtain rights in animals that have been previously owned. Classical Theorists Puffendorf: occupancy of beasts is actual, corpal, possession of them. Barbeyac: mortal wounding and pursuit not abandoning them. Policy Reasons 1. Certainty of ownership (no disagreements)-less ambiguity 2. Need to increase peace and order 3. Decrease litigation (if there are clear rules, people will know what they can do). 4. Others need notice that there is a prior owner. (tattoo on fox) 5. Reward labor 6. Do not want to reward wrongdoers (not achieved by the Pierson v. Post case)


Types of Property 1. Lost property- property that has been unintentionally and voluntarily separated from the true owner. A. True owner v. Finder Ganter v. Kapiloff (stamps) Policy to protect private property Discourages wrongdoer B. Finder v. All other Finder wins Armory v. Delamarie (chimney sweep boy) Policy to reward prior possession, reward labor (bring something lost to find), rewards honesty. 2. Mislaid property- property that is voluntarily placed and then forgotten or overlooked. A. OLQ v. T.O T.O. wins B. OLQ v. Finder and all others OLQ wins MacAvoy v. Medina wallet in barbershop Policy reasons—OLQ is in the best position to return property to the true owner; OLQ has a responsibility as bailee and should be rewarded if T.O. never returns for property. Embedded may support the idea that the property was mislaid and not abandoned. 3. Abandoned property—property that is intentionally placed and the T.O. voluntarily relinquishes all rights to the property. A. T.O. v. Finder Finder wins Policy T.O. gave up all rights to the property when he abandoned the property. Reward labor 4. Treasure Trove—something (currency, valuable metal, coins, silver) that is old and when we have some assurance that the T.O. is not coming back for the property; concealed by the T.O. hoping to come back for it, but does not come back for it. A. Finder v. T.O T.O. wins B. Finder v. All others Finder wins Policy is to reward labor


Other things to consider 1. An employee must deliver all found property to the employer because the employee is simply doing his job duties 2. Finder is a bailee. Comes in knowing possession of an item The finder has an obligation to return the property to the true owner. 3. Must look at Public v. Private Property distinction Can be determinative or ambiguous. It deters theft of property in your home. 4. Wrongdoers may not profit from their wrongdoings. Policies to consider when determining who gets what 1. Return the property to the true owner, or the person must likely to make it happen. 2. Don’t want to favor or reward trespassers. 3. Reward prior possession 4. Reward the labor involved in finding something 5. Reward honesty


1. First in time, first in right 2. Custom can be more important than the law, (Johnson v. McIntosh)


1. Defendant will be held liable when they Use the plaintiff’s identity Or when there is appropriation of name or likeness to D’s advantage. Likeness is 1. photo of person (Clint Eastwood case) 2. Photo of racecar driver in the car 3. Voice (impersonator of Bette Midler voice singing her song) Court said it was enough that people thought it was Midler 4. If you evoke an identity you are guilty A. may or may not be considered likeness but it is actionable under CA law B. Lack consent C. Resulting in an injury Not getting paid Deprived of choice to participate or not


1. Gift must be during the donor’s lifetime. 2. Immediately transferred when the elements of IDA are satisfied. 3. Sometimes Delivery and Intent can combine Elements of Intervivos Gift A. Intent Donor intends to make an irrevocable present transfer of ownership 1. Irrevocable if a gift is given, can’t later give the same item to someone else 2. Example Gruen v. Gruen (painting given to son) a. 3 letters combined showed intention to give the painting to the son. b. Father made statements to others informing people that he gave the painting to his son c. An occasion for a gift helps support the intent d. Restoring and insuring the a painting does not negate intent, or show that another does not own the property e. The words “the contents are yours” may suffice for intent 3. Don’t confuse with motivation or expectation a. grandparents giving grandson and wife property b. engagement ring cases i. does the ring have to be returned if the engagement is cancelled. ii. When does it become a gift on passing of dominion or on performance of the wedding ceremony. 4. Freeze in time the delivery to determine the intent


B. Delivery—the transfer of dominion and control; donor divests self of dominion and control; donor divests self of dominion and control of the property. 1. Types of Delivery a. actual delivery—actually physically giving the donee possession b. symbolic delivery—donor gives the donee something that represents the gift. i. toy car when you get a real car ii. gift certificates and stock certificates iii. instrument of the gift; gives the donee the means to accept the gift. c. constructive delivery—gives the donee access to the property i. keys to a car ii. instrument of the gift gives donee the means to accept the gift. 2. a letter may be sufficient if the owner divests self of dominion and control of the property 3. May be a hierarchy of delivery a. if actual delivery is practical and possible it should be done. i. because there are witnesses and there is evidence of intent ii. may need evidence of actual delivery b. if you can’t actually deliver the item because of impossibility then constructive or symbolic delivery may suffice. 4. Examples a. O says here are the contents of my safety deposit box. The box contains jewelry and stock certificates. i. stock certificates—actual delivery without a signature does not divest the owner of dominion and control. ii. If GCM possession may be sufficient, even though possession is merely symbolic (probably questioning the intent not the delivery) iii. If O knowingly retains a key iv. If a can’t access the box without the signature of O probably isn’t delivery v. If possession is sufficient to show ownership and control has been transferred, probably sufficient. vi. A check may show delivery, but may not show intent, until it is cashed. vii. A recorded deed is sufficient to show the passing of land. 5. Why is delivery important? a. concrete to the donee the significance of what he is doing b. actual delivery is prima facie evidence of the alleged gift. 6. Agents a. if agent passes the gift it is incomplete b. if the third party is a trustee than gift is complete.


C. Acceptance—rebutable assumption of acceptance 1. The acceptance of something beneficial is assumed 2. Can disclaim an interest a. acceptance may be telling a friend that you got the gift.


Elements 1. Intent 2. Delivery—heightened requirement for delivery; must be such as is actual, unequivocal, and complete during the lifetime of the donee, wholly divesting him of the possession, dominion, and control. a. same hierarchy of delivery may apply b. a note left in a drawer of husband describing items is not sufficient delivery, especially since there was a will (Foster v. Reiss) 3. Acceptance 4. Gift must b made in contemplation of death 5. Person must die of anticipated peril a. close in time does matter b. if the person returns home from the hospital it may still be a GCM but better if they don’t c. If the person doesn’t die of the peril then it is not a gift cause mortis and donor can give property through other means. d. Courts do not like the GCM because they want to protect the integrity of the wills and protect from fraud. e. In some states the GCM is not valid if the gift is over $500 because they want to protect against fraud. Things to think about with the GCM 1. If you have problems proving the last 2 elements see if it will fall under the GIV. 2. Donor must be competent to make the gift. Foster v. Reiss 3. Make a GCM because there is no time to make a will


Rights, Powers, and Obligations of Possessors
1. General Rule—the right of a P to recover rests on the strength of his own title, and is not established by the defects in the title of the Defendant, and the Defendant may maintain his defense by showing that the title is not in the Plaintiff but in someone else. 2. Exception to the General Rule—when the defendant has entered under the color of title in a 3rd person in contradiction to that under which he has entered. The plaintiff may recover not by the exhibition of a good title in self, but by showing that the relations between himself and the Defendant are such that the latter cannot question it. 3. Prior Peaceful possession prevails over subsequent possession. a. There is an assumption that heir has possession at the moment that decedent dies. b. A latter possessor not entering under color of title must prevail on the strength of his own title, not defects in the prior possessors title. 4. Powers of those that possess property a. generally you can passes only the title that you have. i. TITLE—the means by which the owner of lands or chattels has just possession of them or some of the property rights. ii. VOID—of no legal effect iii. VOIDABLE—that which may be declared void by the wronged party.


Exceptions to the general rule (defenses for buyers of property)
A. Statutory Estoppel (UCC 400.2-403) 1. gives a possessor the power to transfer better title that he had (only had possession, but can transfer all property rights; protects C. the buyer) 2. Elements: a. A must entrust (2-403(3)) the property to B. 1. Delivery or acquiescence of property (theft does not meets this element) (A mistake may not meet this element (Silver to goodwill)- must be intent b. Instructions to B do not matter (property is entrusted when it is delivered) 1. To protect C as a buyer. 2. C doesn’t know what was said between A and B 3. C must have faith in commerce and be able to rely on commerce. c. A loses a right because did something wrong (put property in the stream of commerce._ 1. A could have taken property to one that does not deal in goods of that kind. 2. A is ultimately responsible to make sure who he is giving the property to 3. Anytime there is more than one B, we may question ( Porter v. Wertz—how did the deli-employee get the property?) A. B must be a merchant that deals in goods of that kind B. Foster v. Wertz was deli-employee not an art dealer C. A pawnbroker does not suffice 4. C must be a buyer in the ordinary course of business (400.1201(9) A person who is in good faith and w/out knowledge that the sale to him is in violation of the ownership rights or security interests of a 3rd party in the goods, buys in the ordinary course of business from a person in the business of selling goods of that kind. a. good faith (1-201(19) & 1-203(6) honesty in the observance of reasonable commercial standards of fair dealings in the trade (doesn’t condone indifference to the history of ownership) b. commercial standards must be reasonable (Porter v. Wertz) c. If B steals painting and sells it to C, C has no title, (no entrustment).


Exceptions to the general rule (defenses for buyers of property)
B. Equitable Estoppel 1. Elements a. C must be an ordinary purchaser for value. 1. good faith does not exist if there was no reasonable effort to find out who the seller is. b. A has clothed B with possession and indicia of title 1. intended to create evidence that others will see 2. B must have more than simply possession (possession may look like ownership) 3. Sometimes prior course of conduct between A and B may be sufficient (Porter v. Wertz—Porter had sold paintings to Wertz in the past. C. Voidable title 1. (2-403(1))—B has voidable title but can transfer good title to C if C is a good faith purchaser for value. a. If A intends to transfer title to B, but B does something to make title void (writes bad checks), C can try to prove voidable title. b. Elements 1. person has voidable title 2. C must prove that he is a good faith purchaser for value I. honesty in fact in the conduct or transaction concerned 3. Example: B gives A a check for a painting. Before A realizes that it was a bad check , B sells the painting to C. All property rights are transferred to C if C can prove the voidable title exception. D. Estoppel v. Voidable title defense 1. Estoppel—pled when the only thing that A intended to transfer was possession; entrustment—A has no intent to transfer title to B 2. Voidable title—pled when A intended to transfer ownership of title.


1. Voluntary relinquishment of possession of goods of another; person has given control of their property to someone else. 2. If there is no mutual assent, there is no bailment 3. Bailor-true owner 4. Bailee-one who takes possession 5. In Common law, there are three types of bailments. A. Gratitous Bailment—for the good of the bailor. The bailee owed only slight care; could only be held liable for gross negligence. B. Mutual bailment—beneficial to both the bailee and the bailor; bailee owes ordinary care, liable for negligence. C. Bailment for the sole benefit of the bailee—bailee must use great care and will be held liable for slight negligence (borrowing someone’s car for your own good) 6. Some courts have dome away with the distinction and an ordinary care standard has been created (this works because a reasonable person would use different levels of care for different items (Peet v. Roth) A. In some jurisdictions the bailee must prove that there was not negligence, while in other jurisdictions the bailor, while in other jurisdictions the bailor must prove that there was negligence. B. Some may say that there is a presumption of negligence because the property was not returned. C. Majority rule—bailee is not held liable if there was no negligence. D. Minority rule: strict liability standard does not matter if there was negligence, bailee is still held liable (building burns down) 7. Finder is an involuntary bailee A. Finder may be held liable for misdelivery if they are negligent (deli employee that finds a wallet and gives it someone else) B. A finder voluntarily takes possession of the property of another (could have left the property lay) no mutual assent, the bailment is gratuitous. i. obligated to exercise due care ii. finder held to a standard of a reasonable finder


Licensee 1. In a licensee/licensor relationship, the licensee is held to a lower standard than is a bailee 2. Licensee only gives permission to park and exerts no control over the vehicle once permission is given (Ellish v. Parking garage) A. expectation is changed based on the parking arrangement 1. valet parking—probably bailment; owner relinquishes control to the service 2. no choice of spot, but someone directs you to the spot you may park in-probably bailment 3. service parks your car in specific garage—probably bailment. 4. Arm/ticket arrangement-probably not a bailment; you decide where to park; licensee has no control over your car. 5. Person gives you a ticket when you pull in; probably licensee; not bailee. B. These distinctions push the parking garage owner to have the most automation possible in order to avoid liability. C. Exculpatory clauses (We are not responsible if your care is stolen) may not matter.


1. AP doesn’t get title to the land just mere possession. 2. Titleholder loses property to one that does not have title. 3. Theories that support AP. A. Inconsistent with 1. protecting property 2. rewarding wrongdoers 3. does not reward prior possession B. Consistent with 1. rewarding labor 2. consistent with Johnson v. McIntosh (reward development) 3. share the wealth Elements of Adverse Possession Continuous Don’t have to be there all the time, seasonal possession may suffice The continuity of the adverse possession can be dependent on nature and condition of the land, as well as, how it is adapted. Actual Doesn’t require the occupant to be present at all times. Test is whether the possession activities are consistent with how a reasonable owner of the property would use the land, thus the particularities of the land may be important. Open and Notorious Objective test would AP be considered conducted in a manner which would put a person of ordinary prudence on notice of the claim. Trivial encroachment is not open and notorious. TO has to have the opportunity to know about it he looked, but doesn’t have to know it. Can be beneficial use of the land. Doesn’t mean land destructible. Exclusive Can be exclusive even though the other used the property during the possessor’s line of possession if the use by other’s can be characterized as permissive and ordinary and the exclusivity requirement is not met if the true owner was concurrently in possession of the property with the adverse possessor.


Hostile Without permission. Just means that is adverse to claim of TO. A. Maine Doctrine—minority rule 1. Only allows AP if the trespasser entered with an intent to claim, not a mistake. 2. Example—sidewalk inadvertently built on neighbor’s property is not AP. 3. Want to see evil intent on the part of the AP; you have to want to take land that you know is not yours; must have a bad state of mind. 4. AN intent to assert title in self when we know that the property belongs to another. 5. Disadvantages a. rewards wrongdoers, disfavors the honest reasonable entrant b. encourages a person to commit perjury when they understand the rule. c. Make AP claims small not very numerous d. Rule is not followed very much, anymore. B. Connecticut Doctrine—majority rule 1. The very nature of the act (entry an possession) is an assertion of its own title and the denial of title against all others 2. Does not matter if the trespasser entered by mistake or with intent, the same result is reached. 3. State of mind does not matter, but need to look at the actions of others, 4. We care what happens on the land. 5. Will ask questions as to what acts have taken place on the land and by whom. 6. Hostile means without permission of the true owner. C. Iowa Rule (Carpenter v. Ruperto) 1. Do look at the state of mind, but there must be a good faith belief that you are entitled to the land. 2. Do you think that the land is yours? If yes than the AP wins. 3. Must render a claim of right or color of title a. claim of right—have some basis for thinking that the land is yours, even if there is no color to your title. b. Color of title—have some belief bases on a title document that says it is yours, but the title is defective. Gives AP a good faith belief that the land is based on the title. c. Very high standard necessary to get land on AP. IA wants people to rely on documents, not just on acts of people.


What does thinking that it is your land do the hostility requirement? No presumption of knowledge occurs from a minor encroachment along a common boundary. In such a case, only where the true owner has actual knowledge thereof may it be said that the possession is open and notorious. Innocent trespasser of small part of land on boundary line without great expense or hardship to remove or eliminate encroachment the TO may be forced to convey the land upon payment of the fair market value without regard to whether the true owner has notice of the encroachment at its inception. Innocent Improver Doctrine B builds a garage on A’s land. A sues. B has improved A’s land. If B has intent to build garage on A’s property, B loses the garage. If B makes a mistake and builds garage on A’s land but he doesn’t meet the element of AP… Under common law, the part of the garage that is on A’s land is A’s; B can’t force A to sell his land. Some courts reject the common law because it is not equitable, efficient, or it is unjust enrichment. Some courts may award the innocent improver for the improvements made on A’s land. Some still may make TO sell to innocent improver to sell to innocent improver at fair market value. Tacking We allow tacking A and B’s time as AP’s as long as the two are in privity (acting with mutual consent) Can be shown if: Willed from A to B A’s Heir gets the AP time, rewards AP’s work. If AP dies with a will, and wills land to C for life, then to D, tacking may still be allowed even though there is not privity between C and D.


Reverse Tacking Is allowed (ownerside tacking) if the owner’s are in privity the time the statute has been running against the TO; tacking of time that the true owner failed to act. 1. Sale=privity O could sell to B what he has. Ex 5years of AP claim. 2. Forcefully removing someone is not privity 3. It is unlikely that reverse taking will be allowed against an owner who didn’t have a right to possession until it was too late. a. didn’t have any time to sleep on his rights because never had possession of rights. b. The clock can’t tick against you until you have a right to sue. c. If M has no right to sue the AP until he has a right to possess the land, we can’t allow the statute to run until he has a right to possess and sue. d. If A has a life estate, and B wins AP case, B only gets a life Estate, and when A dies, the property goes to the future interest holder. e. You can only get what the owner had when you entered the land. Tolling Stopping provisions—statute that says if certain facts/instances are true the SOL will not run. 1. If at the time the C/A accrues (when the AP enters) the TO has certain disabilities. a. disabilities usually include: minors Military imprisonment mental incapacity-usually you must be declared incompetent before the AP enters the land. b. What matters is the disability status at the time the AP entered the land. The person with the disability gets the benefit of whatever would be the longest completion of the original statute or the extra time allowed by the statute. 2. There is no tacking of disabilities. What matters is that the disability is removed at the time of the cause of action. 3. If we don’t know where TO is, if he is incompetent or dead; a. It is only safe to buy the property 10 years after the AP is dead (if the SOL is 10 years) b. it would probably be best to wait 100 years from the time of the first AP before you buy the property.


1. Mostly common comes up with paintings and artwork. 2. Most come up in NY and NJ. 3. 6 years is the typical SOL for AP of chattels—common law Not all owners of stolen property shouldn’t be required to behave in the same way it is necessary to look at the value of the property stolen and type of institution stolen from. 4. Discovery rule provides that a cause of action will not accrue until the injured party discovers or by exercise by reasonable diligence and intelligence should have discovered, facts which are the basis for a cause of action. 5. Courts consider a. plaintiff used diligence to recover stolen item at time of alleged theft and thereafter b. at the time of the alleged theft was there an effective method to alert property had been stolen. c. Whether listing property stolen would put a reasonably prudent purchase in notice of the true owner.


FEE SIMPLE ABSOLUTE If X is entitled to present possession and If X is entitled to future possession until X dies and If X’s heir is entitled to possession immediately upon x’s death and If X or anyone who inherited from x can without consent alienate all or part of Blackacre. Possession without condition Alienable Devisable Inheritable Words of purchase---and his heirs FEE TAIL If X’s is entitled to present possession X’s is entitled to the future possession of Blackacre until X’s death Upon X’s death, only x’s children who inherited from x, the children of x’s children are entitled to inherit and so on X or any of x’s lineal heirs who inherit Blackacre may alienate only his or her right to possession of Blackacre until Death. At time of such Death, regardless of who is in possession of Blackacre the estate passess to x’s lineal heir as described above. Possession without condition Inheritable only by direct lineal descendants Not freely alienable may only alienate right to possession for the life of owner There are three kinds of fee tails—special, male, female. Words of purchase—and the heirs of his/her body LIFE ESTATE X is entitled to present possession Future possession until he dies X’s heirs are entitled to inherit nothing May only alienate the right of possession during x’s life If x sells life estate to Y, then y holds a life estate pur autre vie. Life Estate pur autre vie is inheritable and can be devised. For example X sells to y, y’s interest is measured by the life of X. If Y predeceases X then Y’s heir or devisee may possess Blackare until the death of X. Words of purchase---for life.


FEE SIMPLE DETERMINABLE Same rules as the fee simple absolute except that it is subject to a self executing condition that, if broken removes the possession of Blackacre from X. Possession is conditional, however, Blackacre must always have to be farmed, used for church etc. Indefinetly inheritable Freely alienable Devisable Words of purchase—until, while. FEE SIMPLE ON CONDITION SUBSEQUENT Exactly same as fee simple absolute, subject to a condition that if broken allows creator of estate (the grantor) to enter the land and reclaim it. Right to reclaim it is passed on from grantor to his heirs and original grantor need not to be alive when it is broken. Words of purchase provided that if….then, enter and reclaim, on that condition that if…. Then, renter and reclaim, but if. . . then. Difference between determinable and condition subsequent is that determinable if self executing whereas fee simple on condition subsequent requires O to enter and reclaim Blackacre. O has to demand possession back.


FUTURE INTEREST IN GRANTOR Except for FSA O retains a reversion without saying anything further,

REVERSION How created? When O conveys an expirable estate i.e. Life estate or Fee Tail YES


When O conveys a Fee Simple Determinable Not by gift or sale, not sure about by will YES


RIGHT OF ENTRY When O conveys a fee simple on condition subsequent NO





FUTURE INTERESTS IN THE GRANTEE RULE 1: Only expirable estates could be followed by a future interest in a grantee. Hence only a fee tail or life estate may be followed by such an interest. RULE 2: The future interest created in B must be capable of taking effect immediately upon expiration of the proceeding estate. Ex.: O→A for life, then to B and his heirs. A has a life estate, B has a remainder. These will not work because they will not take effect immediately upon expiration, O→A for life, and in one year to B and his heirs. O→A for life, then to B ten years after A’s death of B is still solvent. These will work O→A for life, then if B survives A, to B and his heirs. O→A for life, then if B marries C, to B and his heirs. This one will not work because it is not verifiable at the expiration of A’s life estate. O→A for life, then if B marries C either before or after A’s death to B and his heirs. RULE 3: The future interest created in B must not take effect before the expiration of the proceeding estate. O→A for life, then if B marries C while A is living, immediately to B and his heirs. This one will not work because it cuts off—look for the words but if because they signal an impermissible cutoff. RULE 4: Then you must classify the present possessory estate of the remainder same rules apply as before. RULE 5: Classify the remainder by type there are two types of reminders at common law vested remainders and contingent remainders.


VESTED REMAINDERS X is said to have a vested remainder if X has a remainder and (a) X is born and ascertainable, and (b) there is no condition other than expiration of the preceding estate that must be met before x’s interest may come into possession. Vested remainders are alienable inter vivos, inheritable and devisable. CONTINGENT REMAINDERS X is said to have a contingent remainder if X has a remainder and (a) X is unborn or unascertainable or (b) There is a condition that must be satisfied before X may come into possession. Such a condition is called a condition precedent. Ex.: O→A for life, then if B survives A, to B and his heirs.

EX: O→ A for life, then to B’s oldest child living at the time of A’s death and that child’s heirs.

When remainder person is unascertainable those who are remainder persons have expectancies not contingent remainders.


THE ALTERNATIVE CONTINGENT REMAINDER X and Y are said to have alternative contingent remainders if (a) x has a contingent remainder, and (b) x’s remainder is followed by y’s future interest, which is a remainder and which takes effect in exactly those circumstance in which x’s remainder will not. Example: O→A for life, then if B marries C, to B and his heirs, but if B does not marry C, then to D and his heirs. B’s Contingent Remainder in Fee→ O\ A’s life estate, O’s Reversion______________→ D’s Alternative Contingent Remainder in Fee→

Contingent remainder are not substantial remainders at CL there are not alienable inter vivos, However they are inheritable and might be devised.



Doctrine of Destructibility of Contingent Remainders Contingent Remainders destroyed unless it vests at or before termination of the proceeding estates. If it is destroyed, then, at the expiration of the proceeding estate, the next vested estate comes into possession. Usually a reversion. Once it is vested it is indestructible—meaning there is no reason the vested remainder person can fail to take. Contingent remainders are destructible because they have a deadline. The estate that precedes and supports a contingent remainder will be a life estate or a fee tail. It can end up in 3 ways, expiration, merger, or forfeiture. Merger creates interests belonging to one person under some circumstance, as having combined into a larger interest. Gifts to a class and vested remainders, Subject to Open, Just like a contingent remainder to an individual that it is destructible and inalienable intervivos. The class is subject to open because for some period of time, the class is open, can increase in number, and x’s share might diminish in size. It is alienable, devisable, and inheritable.


• If you want to make a grant based upon survivorship you have to write it down the court will not lightly imply a condition of survivorship. • Per stripes proportionately amongst beneficiaries based upon dead ancestors share • Taking per capita—per head.


•RULE (1) one instrument (2) creates a life estate in land in A, and (3) purports to create a remainder in persons described as A’s heirs (or heir’s of A’s body), and (4) the life estate and remainder are both legal or both equitable, (5) the remainder become a remainder in fee simple (or fee tail) in A. • on face the rule did not apply to executory interests. • Rule was designed to make property more marketable by eliminating the purported contingent remainder in A’s heirs. • Mo STAT 44.470 abolished it for wills • Mo STAT 442.440 in inter vivos conveyance. • MO cancels the Shelley’s Rule • Most states have abandoned the Shelley’s Rule


• Old common law drew a distinction between titles acquired by inheritance and titles acquired by purchase. Title deemed by inheritance was seemed worthier; therefore the law forbade a person’s heir to take from purchase from his own ancestor. • Two branches inter vivos and testamentary branch. • Under the inter vivos provided that where there is an inter vivos conveyance of land by a grantor to a person, with a limitation over to the grantor’s own heirs wither by way of remainder or executory interest, no future interest in the heirs is created but a reversion is retained by the grantor. Ex. O conveys Blackare “ to A for life, then to O’s heirs.” The remainder to O’s heirs if void; O has a reversion. • Inter vivos branch aided the marketability of property and caused it to pass by descent rather than purchase, thereby subjecting the property to feudal inheritance taxes. • Under the testamentary branch, a devise to the heir of the testator was void if it purported to give to the devisee an interest of the same quality and quantity that the devisee would have taken if the testator had died intestate. • Policy supports: makes it more alienable, prevents feudal tax evasion, etc.


• No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest. •Strikes down contingent remainders that might vest to remotely. • Cy pres a court can reform a nonvested interest to assure that it will timely vest or fail to vest. • Savings clause—saves interest created against RAP. Adds a paragraph to the text of the will. If the will violates the RAP then section comes into play. It defines the measuring life like for example the heirs of JFK plus 21 years. • Uniform Statutory Rule Against Perpetuities, has been adopted by Kansas but only for estates in MO. It allows for a 90 year period for a grant to vest. • 4 steps to know if violates RAP (1) Identify the interests (2) State the conditions and contingencies (3) Find a tentative measuring life find person whose death will resolves the issue immediately or within 21 years (4) Determine whether tentative measuring life is in being. • Three justifications for the rule (1) The rule provides an adjustment or balance between the desire of the current owner of property to prolong indefinitely into the future his control over the devolution and use thereof and the desire of the person who will in the future become the owner of the affected land or other thing, to be free of the dead hand. (2) The rule contributes to the probable utilization of wealth of society. (3) Aids in the keeping of property responsive to the meeting of the exigencies of its current owners.


•A concurrent interest exists whenever two or more persons have concurrent and equal right to the possession and use of the same parcel of land. Only three types of concurrent estates survive today in the United States. (A). Tenancy in Common--Each tenant or co-owner has an undivided interest in the whole. A and B each has the rights that their estate allows them. Default estate for non married persons. In Missouri by statute it is the default. Each co-tenant is entitled to 1. Undivided interest in the whole. 2. Alienable during it’s lifetime. 3. Devisable by will. 4. Descendable/Inheritable to his heirs should he die intestate owning such an interest. A dies without a will as a cotenant with B & C. A’s heirs thus have a share in Blackacre without the permission of B & C. Heirs have the same rights as B & C, only during partition do the heirs only have a third. They do not have to receive their tenancy at the same time or by the same instrument (will). They each have an undivided interest in the whole but their percentage interests are in thirds. They need not to have the same percentage interests. The only technical component is that they have unity in common I.e. the same rights to the land. 442.450 page 42 of supplement says that Conveyance to 2 or more people other than executors and trustees and husband and wife shall be tenancy in common unless otherwise declared.


(B). The joint tenancy with right of survivorship Having a concurrent interest in property whose interest also satisfied the so-called four unities test. The four unities tests are: 1. Time--Joint tenants acquired their concurrent interests at the same time. 2. Title-- Joint tenants acquired their concurrent interests under the same instrument 3. Interest--Each joint tenant had an identical percentage of their share of the concurrent estate. 4. Possession--Each joint tenant had an identical share respecting duration, quality and right to possession. Default Estate at common law. It is not devisable and not inheritable, but you can alienable. A and B are joint tenants. At A’s death what happens? Co-joint tenants then can own the whole. It is considered a non probate transfer. Popular because husbands and wife can pass land without the use of a will…it is a transparent transfer at death you don’t need a court to pass it. Federal Estate Taxes do apply although. Husband and wife with JT. One of them is not trustworthy. Husband transfers his interest to the secretary before he dies. Who owns the property now? Secretary and wife. Can’t do anything until they get a transfer agreement that pays one of them half of the value of Blackacre.

(C.) Tenancy by the entirety. Missouri is a tenancy by entirety state. Exists in 20 states and Mo is one of them. It cannot be unilaterally be severed by one of the spouses transferring the property. Example: The deed identifies if the persons you are buying property from are married so you know that you aren’t getting screwed. Could only be created between married persons. Since this tenancy cannot be unilaterally severed, the right of survivorship is effectively indestructible.


• RULE 1: If silent document is silent than we presume that they get equal shares • RULE 2: If it is a gift than they get equal shares • RULE 3: Where title to property is taken in the name of two persons as cotenants and their contributions to the purchase price of the property are unequal and their relationship is not such that a gift from one to the other is presumed to be intended, they will in equity be held to own the property in the proportions of their contributions to the purchase price. • RULE 4: IF the property is held as tenants in common the courts will presume that they intended to share the property in proportion to the amount contributed, where it can be traces, otherwise they share it equally. • RULE 5: Improvements placed upon the property by one cotenant cannot be charged against the other cotenant unless they were either necessary or actually enhanced the value of the property. • RULE 6: Partition actually ends a co tenancy. They can do it voluntarily or involuntarily. RULE 7: In most jurisdiction the cotenant that derives income from a nontortuous use of the land that permanently reduces its value. RULE 8: IF ouster has occurred that cotenant out of possession is entitle to his share of the fair rental value of the premises from the co-tenant in possession. • occupation of the whole by one tenant is never seen to be adverse in the terms of adverse possession. Special Facts however can make it clear that the occupying tenant has ousted his cotenants and has claimed as an individual more than his due as a co-tenant. In this situation the wrongfully acting co-tenant must compensate his co-tenant unless his wrongful claim has ripened into adverse ownership. • Litigation amongst cotenants falls into one of three categories contribution, accounting, and partition.



• One of two joint tenants may severe the tenancy by conveying his/her interest to a third party. Severance of the joint tenancy of course extinguishes the right to survivorship. • Up and coming majority rule says that a joint tenancy can only be created by express intent. • A joint tenant may during his lifetime grant certain rights in the joint property without severing the tenancy. But when such a joint tenant dies his interest dies with him, and any encumbrances placed by him on the property become unenforceable against the surviving joint tenant. Leases fall within this rule. • the mere temporary division of property held by joint tenants without an intention to partition will not destroy the unity of possession and amount to a severance of the joint tenancy. • A divorce decree which is silent with respect to property held jointly with a right of survivorship does not automatically destroy the existing survivorship provisions. To hold that a divorce decree that is effectively silent would be to convey the property by implication. Real property cannot be conveyed by implication.


• We assume that bank accounts are JTWROS but the four unities test doesn’t work because every time a person writes a check the tenancy would change to a tenancy in common. • The statute in the Combee case eliminated the requirement of showing a gift inter vivos by providing that the creator of a joint account shall be presumed to have intended that upon the death of any such person all rights, title, interest, and claim in, to, and in respect of such deposits and account. . .shall vest in the surviving account holder or holders. • For policy reasons it protects the bank. As long as name is on the bank account and the bank pays you it cannot be sued. • The Rule is that you can overcome the presumption of JTWROS by proving fraud or clear and convincing evidence that the decedent didn’t intend to give it all to X.


• Is the interest of one spouse in real property held in Tenancy by the entirety subject to levy and execution by his or her individual creditors? 4 ways to look at it (3 because no group 1 states) (1) husband can convey entire estate wife can not. (2) both husband and wife can deal in the property. Individual creditors can get both of them even if one of them is innocent. There is still a contingent remainder in the survivor. So the creditor can only get what wife/husband had. (3) Any attempt at conveyance by a single spouse is void. One spouse cannot act alone. (4) Contingent remainder is alienable and attachable by your creditors. • Divorce severs tenancy by entirety. Divorce doesn’t guarantee and equal 50-50 split. • If a state recognizes tenancy by entirety then there is no common law marriage in that state.


• not available in the states of Missouri or Kansas • usually only states that are dictated by civil code countries like Spain and France are community property states. For example WA, CA, ID, AZ, NM, NZ, TX, LA. • Husband and wife form martial partnership. Community property is property that is acquired during marriage as long as it is earned through work. Separate property is acquired before marriage or isn’t given lucratively (gift, inheritance, etc.) • At divorce community property gets divided equally. Separate property stick with owner but the burden of proof falls on them to prove that the property belongs to them. • Husband’s pension rights are a contingent interest—whether vested or not vested, compromise a property interest of the community and that the wife may properly share in it. • Court in Bloomer v. Bloomer evaluated pension rights and said that the court should consider the amount of the employed spouse’s contribution to the fund, plus interest, and award the nonemployed spouse an appropriate share. Second the court could attempt to calculate the present value of the benefits when they vest under the plan. Under this approach the benefits payable in the future would have to be discounted for interest in the future for mortality the probability the individual will die before qualifying for the benefits and 4 vesting will have to continue to work at least until the age of 55 before qualifying. • UNIFORM MARITAL PROPERTY ACT on page 375 if you need it.


• O’Brien court (minority viewpoint) says that a professional license is a valuable property reflected in money, effort, and lost opportunity for employment expended in its acquisition and also in the enhanced learning capacity it affords its holder, which may not be revoked without the due process of law. • Francis Court says that an advanced degree or professional license is a factor to be considered in the division of property and the award of alimony. Insofar as the advanced professional degree creates an expectancy of higher future earnings, the degree may and should be taken into account in calculating the future earning capacity. • The possible solution is reimbursement alimony which is predicated upon the economic sacrifices made by one spouse during the marriage that directly enhances the earning capacity of the other, should not be subject to termination or modification until the compensation has been reached. • Options the court could look at in evaluating whether education is a marital asset. (1) could just say tough to the spouse (2) Could see it as a loan to be paid back w/o interest (3) Reimbursement alimony (4) Property because of enhanced earning capacity. • MO courts have allowed party to get something for putting a spouse through college that is almost like rehabilitative property but Mo doesn’t recognize a degree or license as property. • Damage Theories (1) Restitution put them back where they were before (2) Expectancy put you back where you thought that you would be before the breach. (3) Lost opportunity—spouse sacrificed and now you owe them.


• Court sees no impediment to the parties of a non-marital relationship agreeing between themselves to certain rights and obligations. So long as the agreement does not rest upon illicit meretricious considerations, the parties may order their economic affairs as they choose. • Unmarried cohabitants can contract for duties and rights as long as they are in writing in order to fulfill the provisions of the Statute of Frauds. • No state extends the protection of dowry, curtsey or statutory shares in lieu to cohabitants.


1. Term for years • Lease for any fixed computable period of time • No notice for termination except specified in lease • Alienable, devisable, and descendible • Most common for residential leases • doesn’t terminate on death Termination of a term 4 years • Usually terminates at the end of the period • At the happening of a contingency • surrender • Release • Indemination • Expiration of landlord’s estate • Lessor retains a reversion complied or a right to re-entry—compiling is called a Terminination clause 2. Periodic Tenancy • endures until one party has given required notice to terminate • has a definite duration month, year, etc. • Automatically renews unless the LL or T give the proper notice of intent to terminate • Notice to terminate must be received by the party to whom it is delivered no later Than the last day of period otherwise it rolls over. • does not terminate on death • Missouri Code 441.050 says that the proper amount of notice to terminate is 60 days. 3. Tenancy at Will • Tenancy of possible infinite duration • terminated at any time by either party without prior notice • Or can be terminated at conveyance of his fee by landlord • Or an attempt of an assignment of his interest by tenant. • Or death of either party terminates the tenancy at will. 4. Tenancy at Sufferance • happened when a party holds over • Landlord may elect to treat holdover as a trespasser or as a periodic tenant • At holdover if there is no agreement it becomes a periodic tenancy. • Holdovers can become adverse possessors if not terminated.


DUTY TO PASS POSSESSION Duty to pass possession
1. Every lease has an implied duty to pass possession. 2. Actual possession at beginning of the lease term is the majority or English Rule 3. English Rule conforms with Restatement rule and the URLTA 4. American rule says there is no duty to pass actual possession. 5. The law allows people to choose law not of their jurisdiction 6. States that have adopted the URLTA cannot waive their rights 7. In restatement states (MO) allow people to waive their right to the English Rule.

Lease Damages under the English and American Rules
1. American Rule the LL has not breached no damages. 2. English Rule a. landlord has the duty to evict rent abatement because LL could get rent from the holdover tenant b. Tenant’s Options i. rescind due to breach ii. Reformation, renegotiates, or change lease or apartments. iii. Damages for the amount that you are in breach • Actual measured by losing your expectancy FMV-KP Gives the tenant benefit of contract bargain Allows for relocation costs and interest • Consequential Damages • Special Damages 3. Examples $700-$560=140 If LL rescinds every month than s/he owes the T $140 for every month. IF the FMV is the same as KP then there is no loss. If the KP is higher than the FMV then are no expectancy damages. Remember there is no breach if there is no injury.


•Law construes use restrictions against the drafter and ambiguous leases provision are construed in a way that are lease restrictive to use of land. • Breach of use LL can sue for damages and injunctive relief. • T’s defense are unconscionability and waiver.

• occurs when the performance of the lease is possible but the expected value of Performance to the party seeking to be excused has been destroyed by a fortuitous Event, which supervenes to cause an actual but not literal failure of consideration. Same as impossibility in contracts. • Requirements for a tenant to be relieved because of commercial frustration a. landlord must have known of the tenant’s intended use b. there must have been either total or near total frustration; and c. The cause of the frustration must not have been reasonably foreseeable at the time that the lease was executed.

• Section 3.102 of the URLTA says that a landlord from time to time may adopt a regulation along the line of these guidelines and it is enforceable against the tenant only if (5) its purpose is to promote the convenience, safety, or welfare of the tenants in the premises preserve the landlord’s property from abusive use, or make a fair distribution of services and facilities held out for the tenant’s generally; (6) it is reasonably related to the purpose of which it is adopted; (7) it applies to all tenants in the premises in a fair manner (8) it is sufficiently explicit in its prohibition, direction, or limitation of the tenant’s conduct to fairly inform him of him if what he must or must not do to comply; (9) it is not for the purpose of evading the obligations of the landlord; and (10) The tenant has notice of it at the time he enters into the rental agreement, or when it is adopted. (11) If a rule or regulation is adopted after the tenant enters into the rental agreement that works a substantial modification of his bargain it is not valid unless the tenant consents to it in writing.


• Tenant may be able to terminate lease or seek damages or as a defense in a suit for nonpayment of rent highly conjectural although if one of the following apply. (1) doctrine of caveat emptor (2) tenant fails to ask questions or has failed to reduced LL duty to writing (3) issues of latent defects are not involved (4) Tenant has not relied on statements made by the LL. • Exceptions to the rule (1) Fraud (2) Short term residential rental like the Ingalls v. Hobbs summer rental case (3) Latent defects undiscoverable by the tenant (4) Sole use i.e. only use 4 drive in and we find that it can’t be used for that purpose. It may be possible to let the tenant off the hook but only if the contract says only. • Warranty vs. Covenant—warranty is promise that something will be true at the beginning of a lease term. Covenant something is true and will remain to be true.

• LL promise that during the terms of the tenancy neither the landlord not anyone claiming through the landlord, nor a third person having superior title to the leased premises would disturb the tenant in the tenant’s use and enjoyment of the premises. • LL covenant is not breached if the tenant’s possession is disturbed by a mere wrongdoer. • Not breached merely because someone has superior title only occurs if it interferes with the tenant’s possession.


• occurs when LL wrongfully performs or fails to perform some duty that the LL is obligated to perform that results in the tenant’s substantial loss of use and enjoyment of the leased premises. • Elements of Common Law CE (1) the landlord must wrongfully perform or fail to perform some obligation that the landlord is under some expressed or implied duty to perform. (2) As a result of the landlord’s commission or omission there must be a substantial interference with tenant’s use and enjoyment of the premises. (3) The tenant must give the landlord notice of the interference and a reasonable opportunity to remedy the interference; and (4) If after such notice the LL fails to remedy the interference the tenant must vacate the premises within a reasonable time. • Restatement Rule provides that the LL breaches his obligation to tenant if the landlord or someone whose conduct is attributable to him interferes with a permissible use by the tenant. The newer version of the Restatement rule would stop the vacate rule. • Third party violation. In general before the LL can be found to have breached his obligation because of the behavior of a third party more than the mere LL-T relationship must be found between the LL and the third party. Permission or authorization express or implied from the LL is necessary in order to attribute a third party’s behavior to the LL. • Typically CE involves allegations that the LL breached a duty to provide heat, make repairs the LL covenanted to make, remedy unsafe, unhealthy, or unsanitary conditions or remove the a nuisance to the premises like prostitution. • Under the traditional CL rule in order for the tenant to successfully claim CE the tenant had to vacate the premises—because of that obligation the Implied Warranty for Habitability is more enjoyable.


• rejects the caveat emptor approach. A warranty by the LL that the premises, including both the dwelling unit and the common areas or common building systems will be to the tenant at the inception of the lease term in habitable condition and that the premises will remain so during the term. • Can be used as a shield or as a sword • ELEMENTS FOR CAUSE OF ACTION IN MO (1) entry into a residential lease (2) Subsequent development of dangerous or unsanitary conditions materially affecting the life, safety, or health of the tenant. (3) Reasonable notice of the defects to the LL and a reasonably opportunity to correct the defect. (4) The failure of the LL to restore the premises to habitable. • DAMAGES (1) While tenant is in possession K price—FMV (2) Not in possession FMV as warranted-KP (3) Tenant can place rent in an escrow account awaiting the discretion of the court, (4) Repair and Deduct remedy tenant performs at his own expense if reasonable and deducts the loss from the amount payable. Repairs must be reasonably priced and cannot exceed the amount of rent owed. (5) The Tenant can sue for damaged for the impaired enjoyment of the premises and consequential damage. • Problems with FMV approach (1) Assumes that there is a FMV for the defective premises. (2) Determination of the FMV of the defective dwelling would in all probability require some type of market survey, statistical evidence, or expert testimony from realtors or appraises familiar with the local rental market.


(1) Damages=promised rent x by % of the use of the premises that are lost because of the breach (PUGH COURT) (2) If tenant is entitled to an abatement of rent, the rent is abated to the amount of the proportion of the rent which the FMV after the event giving to the right to abate occurs to the fair market value before the event. (3) Abatement is allowed until the default is eliminated or the lease terminates which ever occurs first. (4) Damages=the difference between the promised rent and the FMV of the premises during the time the warranty was breached. (5) Damages=difference between the fair rental value of the premises if the premises had been in their warranted condition and the fair market value of the premises in their as is condition. (6) Tort approach---the tenant could recover for emotional distress and discomfort and punitive damages in addition to any loss of rental value as measured by one of the foregoing methods.


•Exculpatory clauses (1) Release a residential landlord from liability for future negligence are not void against public policy. (2) Exculpatory clauses are upheld in Mo for contract purposes and in commercial leasing. (3) There is not a conspicuous requirement in MO (4) The URLTA doesn’t allow exculpatory clauses because of public policy (5) Key to enforceability in MO is the degree and specificity of the language used. (6) The language use must be “clear, unambiguous, unmistakable, and conspicuous” It must effectively notify a party that he or she is releasing the other party from claims arising from the other party’s own negligence. (7) 17-2 shows example from the Warren case critical to the holding was the use of “negligence” carelessness and fault and the clarity of the phrase “Resident agrees that apartment company should not be liable to resident even if said damages are alleged to be fault or caused by the negligence or carelessness or fault of the Apartment Co. (8) Restatement 2d of Property 17.1 provides that the LL is liable for harms caused to the tenant as a result of conditions involving an unreasonable risk of physical harm existing when the tenant took possession if (a) tenant did not know or have reason to know of the condition or risk involved and (b) the landlord knew or had reason to know of the condition, realizes or should have realized the risk and had reason to expect that the tenant would not have discovered the condition or realized the risk.


• decide a retaliatory eviction is decided by motive. Action decided by landlords Desire to punish tenant then it is illegal. • Tenant has to prove the improper motive but the LL has to rebut the Presumption. • When there are mixed motives the court has to determine which one is the Casual connection. WHAT WEIGHT IS GIVEN TO THE FACT THAT A RETAILITORY MOTIVE IS ONLY ONE OF THE REASONS THE LL DESIRES TO EVICIT THE TENANT? Three Tests (1) Most restrictive adopted in Wisconsin court that held that in order for the eviction to be retaliatory and improper it must be shown that the landlord’s retaliatory motive was the sole motive for evicting the tenant. (2) The principal case for retaliation need only be a causative factor. (3) Independent motive test which establishes an improper retaliatory Eviction when the tenant is evicted at least particularly in retaliation, even if the primary purpose of the eviction was the tenant’s failure to pay rent or some other legitimate reason.


(1) sublease involves the creation of a new tenancy between the sublessor and the sublessee so that the sublessor is both a tenant and a landlord. (2) assignment general mechanism to assign your rights to someone else. LL---------T1----------T2 SUBLEASE LL--------T1 ↓ T2 ASSIGNMENT • sublease is more prevalent because it doesn’t go to the end of the term allowing T1 a reversion • assignment limits the landlord’s choice he doesn’t pick who lives there • If lease terminates than the sublease terminates also. How do we decide sublease or assignment? (1) Majority rule is that we find out whether or not the tenant retains a right to reversion. If he does than it is a sublease if not that it is an assignment. (2) Payment of extra rent i.e. promissory notes is indicia of assignment. (3) Minority rule looks at intention important because (a) there could be double liability causing a mistake on the subtenant as to who to pay (b) Unjust b/c T1 may not be able to reap the benefits of his bargain and charge more. (c) Disadvantage is that there is more liability because it isn’t as easily applicable as looking for a reversion.


Enforceability of a covenant in a lease is dependent on 2 things (1) privity of estate (2) Privity of interest. Privities of estate • Three factors arise to create a liability running from the assignee of a leasehold to a lessor (1) privity of estate (2) covenant of the lease running with the land (3) actual assumption of the convents of the lease by the assignee • An assignee of a leased is bound by privity of estate to perform the express covenants which run with the land, but in the absence of express agreements on his part he liable only such covenants as run with the land and only during such time he holds the term. • There are promises that run both ways from LL to T, possession and payment. • Whatever rights the LL owes T1 he also assigns to T2 • IF T2 stops paying tent who does the LL sue ? T1 because it’s a duty only rights can be assigned. LL is the only one that can assign duties. Privity of contract • Before there is privity of contract between the assignee and the lessor there must be an actual assumption of the lease. ASSIGNMENT SUBLEASE LL LL K↓ K1 ↓ E T1→T2 T1/LL K2 ↓ E T2


• Minority Viewpoint • Leases contain an approval clause. Harsh consequences of the rule have been avoided through the application the doctrine of waiver and estoppel under which lessor may have found to have waived or estopped from asserting the right to refuse consent to assignment • Justification for the minority view (1) Necessities of permitting reasonable alienation of commercial space has become paramount in the development of an urban society. (2) Shortage of housing and commercials space is eliminated by increased alienability. (3) Nature of the lease contract increase the recognition of and emphasis on the duty of good faith and fair dealing inherent in the contract. Where a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing. (4) Lessee has right to expect that consent will not be unreasonably upheld. (5) Determination whether the objection was reasonable is question of fact. Consideration re financial reasonability of the proposed assignee, suitability of the use of the particular property, legality of the proposed use, need for alteration of the premises, and the nature of the occupancy. (6) Also it is not reasonable to deny consent in order that the landlord may charge a higher rent than originally contracted for. The clause is for the protection of the landlord in his/her ownership and operation of the property not for general onerous reasons.


•Justifications for the Majority opinion (1) It is said that a lease is a conveyance of real property and that the lessor having exercised a personal choice in the selection of a tenant and provided that no substitution should be suitable without consent. (2) That an approval clause is an unambiguous reservation of absolute discretion in the lessor over the assignment of the leases. The lessee could have bargained better—just because they failed to the court should not rewrite the lease for them. (3) Doctrine of Stare Decisis many lease now in effect covering a substantial amount of real property creating valuable property rights were carefully prepared by competent lawyers in reliance on the majority viewpoint. (4) Both traditional and sound public polity dictate that the lessor has a right under circumstances such as these to realize the increased value of his property and should be able to contract higher rent. Minority says that his/her estate will benefit from the increased benefit from inflation in any event, at least at the expiration on the lease.


Abandonment of property occurs when the tenant vacates the leased property without justification and without present intention of returning and he defaults on payment of rent. • Surrender takes two forms express acceptance of surrender must be for consideration and satisfy any relevant provisions of the statute of frauds. An acceptance of surrender may also occur by operation of law. Occurs when the parties to a lease do some act so inconsistent with the substituting relation of landlord and tenant as to imply they have both agreed to consider the surrender as effective. • Surrender as operation of law there must be some decisive unequivocal act by landlord which manifests the lessor’s acceptance of the surrender. Intent is key to determining the actions of the parties constitute surrender as a matter of law. • Termination of leases (1) natural expiration (2) proper notice by either party (3) trespasser/summary eviction (4) surrender “early termination” A. an agreement of parties B. By operation of law abandonment vacating without justification with no intention of returning. Landlord has to accept the premises back. Litigation do we have a surrender or do we have landlord reletting. • T abandons, LL options (1) complete surrender (T off K) LL relet even if it is for lessor rent T is still off the hook (2) Do nothing T remains on K/lease liable for rent, Option required at common law. Still the majority rule. (3) Reenter and relet premises for T’s acct (mitigation) doesn’t end lease option for T1. (4) New Jersey is one of the 1st to oppose the duty on the LL to have a duty to mitigate damages.


•Majority rule is that the LL is under no duty to mitigate damages. It is based on principles of property law which equate a lease with a transfer of a property interest in the owner’s estate. The view believes that that the LL through a lease conveys to a tenant an interest in property which forecloses any control by the landlord, thus it would be anomalous to require the landlord to concern himself with the tenants abandonment with his own property. • Applying a contract rule can be justified as a matter of fairness. Because reasonable efforts on part of LL to rerent could have avoided. • Argument that multi-level dwelling could have other vacant premises and forcing to rent another trades off with renting another vacant apartment if applicable because each apartment may have unique qualities which make it attractive to certain individuals. LL must treat apartment in dispute as it was one in the vacant stock. • Landlord has a burden of proving that he used reasonable diligence in attempting to relet the premises. • Why because landlord is in the better position to demonstrate whether he exercised reasonable diligence in attempting to re-let the premises. •ordinarily we would require the tenant to bear the cost of any reasonable expenses incurred by a landlord in attempting to relet premises. • In assessing whether the LL satisfactory carried his burden we look at (1) Whether LL or his agent offered or showed the apartment any prospective tenants or advertised in local newspapers. (2) If he rejects a T2 he has to show just cause for rejecting that individual. What if LL asks for higher rent with T2? It could be seen as a failure to mitigate damages—In re garment ctr. Capitol inc. “Landlord’s duty not eliminated where higher rental was known that it was merely a basis for negotiations.” • However if LL only advertises once then it could be argued that the LL did not try hard enough. • Landlord can get K price fair market value proven by lessor rent obtained from tenant. Because we assure T2 is paying what the premises are worth. • If landlord tries but can’t find anyone then he gets the full value. • Some states refuse to adopt the duty to mitigate law because they believe that it allows the tenant to reap advantage from his own breach of contract and because it unfairly requires the lessor to seek new tenants continually. • majority of courts imposing mitigation to damages theory have concluded that the LL is entitled to damages even though it has not attempted to mitigate but the amount is to be reduced by the fair market value of the premises.


• It could be possible that landlord gets payment for all of T1’s K but their down road gets a 2nd tenant and collects rent from them do we allow a windfall..Yes because there is hassle etc based on the ordeal that LL will never be compensated. • Acceleration Clauses if you fail to pay one month all rent that is due under this contract is due at the time. How do you square that with the fact that rent is due on the first of the month? Two clauses thus the narrower clauses thus a matter of law.


• at least 41 states have enacted statutes of one kind or another that address basic security deposit issues, including a ceiling on the amount of the deposit, the use of the deposit by landlord during the term of the lease, the landlord’s obligation to return the deposit and the consequences of the landlord’s failure to account for and return the deposit. • The URLTA limits the size of the security deposit to one month’s rent. Some states have higher ceilings on the amount of the security deposit. • URLTA requires return of the security deposit within 14 days of the termination of the lease.


A holdover tenant is one who after the termination a lease refuse to turn over possession of the premises. • LL options (1) The landlord can charge the holdover rent causing it to become a periodic tenant. LL is likely to have a clause in the lease that continues the original lease. (2) Or the LL can treat the tenant as a trespasser. • Theories (1) voluntary action of the tenant is such as to disclose the right of the LL to assume an intention on the tenant’s part to create a 2 nd tenancy. (2) That the action of the tenant is such that the court will as a matter of law hold the tenant liable for a second lease upon the principle of quasi contract that justice may prevail. • The Restatement of property 14.4 takes the position that a periodic tenancy results from the LL’s election and term equals the length of the period for which rent is computed. Thus if rent is computed on a month to month basis the holdover tenancy is a month to month tenancy also. •The Restatement approach would oust T2 from possession (actual). It is better for the market if we just charge the holdover for the extra days in the apartment. • The URLTA 4.301 provides that if tenant remains in possession of the premises beyond the term of the lease the landlord may (2) sue for possession and under certain circumstances however up to 3 months rent or damages, which is greater, or (2) treat the tenant as a month to month tenant.


An easement is a privilege to use the land of another (a) entitles the owner of such interest to a limited use or enjoyment of the land in which the interest exists (b) entitles him to protection against third persons from interference in such use or enjoyment (c) is not subject to the will of the possessor of the land (d) is not a normal incident of the possession of any land possessed by the owner of the interest and (e) is capable of creativity by conveyance. Affirmative vs. Negative Easements An affirmative easement is one entitling its holder to do a physical act on another’s land. A negative easement is one which enables its holder to prevent the owner land from making certain uses of that land. Appurtenant and Gross An easement appurtenant is one which benefits its holder in the use of a certain piece of land. The land for whose benefit the appurtenant easement is created is called the dominant tenement. The land that is burdened or used is called the servient tenement. An easement in gross is one whose benefit is not tied to any particular parcel. How are Easements created? 1. Grant, reservation, agreement. 2. Implied, prior use, necessity 3. Prescription like AP acquires an easement because you have used it for so long. By implication (a) implied by prior use (b) implied by necessity The Hovenkamp book says that these two should be grouped together because of market failure. Cheslik is not a fan od this because she doesn’t think a little market failure should equal a huge court imposed award because it gives the dominant tenement something that he didn’t bargain for.


Prior Use (1) common source unity of title (2) severed (3) at time of severance part was used to benefit another (4) Used in such away because it was necessary or beneficial. You can imply an easement only if (1) Unity of title—common source of title at some point have to have a common title. Doesn’t matter where in the chain of title it occurred. (2) Necessity, Test is it reasonably necessary. Absolute? Convience? Is reasonable the test between the two. Most convient is hard to prove . These two are on the outside of most reasonable. Justifications for implied Easements 1. necessity is also said to be supported by the rule of public policy that lands should not be rendered unfit for occupancy or successful cultivation 2. Intention of the parties. Best evidence of their intent is the deed and the failure to act. Intent so obvious that easement that there is no need to bargain for it. We have to step in where parties fail because it renders the land worthless. So we bargain for plaintiff because he failed to do it for himself. Court will impose when economically ST and DT can’t agree on one price. In a perfect market there is equilibrium between cost and need. Implied easements are forcing a sell. In old cases the court didn’t make them pay for the servient tenement. WHEN the grantor seeks the easement by implication… Different because the grantor usually drafts instrument making the grant and is responsible for its contents. Second the grantor is in a much better position to know about the existence of the easement to be implied. The Restatement says Easements by implication require an inference to the conveyance intended to create the easement. In determining whether there was such an easement the restatement looks to 8 factors: whether the claim is against a simultaneous grantee; the extent of the necessity to the claimant of the easement whether there are reciprocal benefits to grantor and grantee; the manner in which the land was used before the conveyance; and the extent to which the prior use may have been known to the parties.


Reasons why easements by implication are a good idea. (1) it preserves efficient easements that probably would have been preserved un a perfect functioning market but were inadvertently not pursued because the parties didn’t have good information about what they were buying and selling. A way of necessity is also said to be supported by the rule of public policy that lands should not be rendered unfit for occupancy or successful cultivation.

Prescription Do not use Ap statutes because there is no ejectment. Usually use adverse use. It must be adverse under claim of right, continuous and uninterrupted, open and notorious, exclusive, and with the knowledge and acquiescence of the servient tenement for the full prescriptive period. Hosility requirement can cause purgery in trying to prove that the prescriptor did not have permission. Tacking can occur in order to meet the statutory period. Acquiescence and knowledge test means passive submission, quiescence consent by selling and the owner is discharged with the knowledge when the claimants use has been open, notorious, visible, uninterrupted and undisputed. To rebut prescription the ST has to prove that it was permissive. The Court says if person proves uninterrupted and open use for the necessary period w/o evidence to explain how the use began the presumption is raised that the use is adverse and under claim of right, and the burden is on the owner of the land to show that the use was by license, agreement, or permission. The presumption of adverse use and claim of right, when applicable prevails unless it is overcome by a preponderance of the evidence. Basis—lost grant theory at one time there was a grant gave permission but we lost it that is why it is consistent that people drive across your land. Lost grant theory changes the hostility requirement. The difference is adverse possession vs. adverse use is that with adverse possession you think that you own the land with adverse use you never think that you own the land.


SCOPE 1. Extent of the use 2. Size of dominant tenement Dimension/Placement width Volume/ingresse/egresse a day etc. Type of vehicle and weight Maintenance Noise Time restrictions Rule: You cannot use an easement to benefit the non servient land. Can’t add new land to the dominant tenement. At common law the easement stops when you do it. New rule is that we give them the option to renegotiate. If you don’t dictate the extent or use then there is usually litigation. Rule: Reasonable increases/changes okay. Damages for increase in scope (a) The injury to the owner of the servient estate, which would support an award of merely nominal damages. (b) The value of the easement to the plaintiff. Termination of Easements 1. By language of creation document (expressly) Limited in duration by creation Parties enter into agreement releasing parties from easement 2. Doctrine of Merger Dominant and servient owned by different people sell to one person than merged into 1 person=fee simple absolute. 3. Release or abandonment, cessation of use with intent to give easement right words not enough, abandonment is not enough. Have to have both words and non use. 4. Adverse use, acts of servient tenant not consistent with easement. Its like DT adversely possesses his own property. After SOL has run ST has eliminated Easement. Restatement 3d of Property wants to lump easements, real covenants, and equitable servitudes together people aren’t happy because it takes easements out of property rights.


Difference between real covenants and easements? Easements are older, Real Covenants 19th century came from contract rights. Easements generally limited to requirements to passive duties tenements. Affirmative duties come from covenants. Ways to determine RC vs. Easements. 1. authorizes the benefited party to make affirmative use on ST=Easement 2. Imposes affirmative duties on servient estate=real covenant 3. Restraints ST from making certain uses of his land=RC 4. No servient estate at all=Real covenant ex. Noncompete agreement. Real Covenants Enforce promises against people who didn’t make them Enforce them even if promise wasn’t made to is Sometimes parties are not originating parties to the promise. Does the burden and benefit run with the land? MUST HAVE ALL 5 parts of this test. 1. Enforceable contract main thing that we are interested in is are they old enuf to contract, statute of frauds, competent. 2. Did parties intend to promise to run original parties? For example his heirs and assigns. Presume if it is a promise meant to benefit the land and not just the parties. 3. Promise must touch and concern the land. Restatement 3d forgoes this…Chicken dinner promise doesn’t run not every promise runs with the land. Promise has to relate to the land. Tests of Touch of Concern 1. Performance or nonperformance quality, value, or mode of enjoyment 2. it must logically be connected to the land. Physically on land is always going to touch and concern If it effects the legally relations of the parties as owners of the land and as not merely as members of the community in general. Covenants not to compete are enforceable most of the time so don’t make the distinction about the land being so far apart.


4. Horizontal Privity describes a relationship among (a) the original promisor under a covenant; (b) the original promise under the covenant (c) the affected estate in land.

Three different rules for determining privity ON THE BURDENED SIDE A. Massachusetts rule under which a promisor and promise were in privity of estate only if they held simultaneous legal interest in the affected property after the covenant was created. At common-law only the LT relationship would qualify. B. Restatement Rule is the majority rule. The creation of the covenant had to be simultaneous with the transfer of the interest, which effectively meant that the covenant had to be contained in the deed. “One instrument or transaction. Of course if you meet the mass rule you meet the restatement rule. C. The Restatement 3d Rule adopted in NJ and a few other states require that there is no horizontal privity rule.

What if the benefited party changes hands but the burdened party stays the same? Successor to benefit side you do not need horizontal privity. 5. Vertical Privity Burdened Party Side In order for burden to run to successor the successor no matter how remote as long as he/she succeeds in same Interest. A ↓ A-1 A=Fee Simple A1=Fee Simple thus the burden runs Benefit to Run has to succeed to promisee’s equal estate or any lessor estate. Public policy wants land to be benefited. B ↓ B-1


COVENANT IS A PROMISE THAT IS SUBJECT TO LEGAL RATHER THAN EQUITABLE RELIEF. That is when a covenant is breached the relief granted is money damages not an injunction or relief like in an equitable servitude.

Need to look at what remedy is being sought and who can enforce it. At common law could only get equity—injunctive relied unless you could sue under equitable servitudes. Requirements run with the land 1. Intent 2. Touch and Concern 3. Notice A. actual B. Constructive C. Inquiry notice—uniformity of notice if everyone in your area has an iron fence you are on notice that you should have to have one to. Two Theories on which ES rests 1. Third party beneficiary where you are on notice when you made promise that other people would rely on it also. 2. IRNE—Implied Reciprocal Negative Easement


License is giving of one’s permission to another to do a certain thing. . . revocable at the will of the licensor, simply by withholding his permission. A license doesn’t pass any interest in the property to the license. It only makes an action lawful which without a license would have been unlawful.


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