Auto Sublease Promissory Note - DOC

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					                                       INTRODUCTION TO PROPERTY
A. What is Property—the right toUTWER:
         1. Use it
         2. Transfer it (sell/donate)
         3. Waste it
         4. Exclude others from it
         5. Responsibilities
         *Don‘t always have all of the rights; ex: can‘t sell deer you hunted, can‘t sell body organs, etc.
         *The rights are created by law, not inherent in themselves.
B. Real v. Personal Property
         1. Real: land
         2. Personal (chattel): Anything you can pick up, tangibles (car, watch), intangibles (bank account,)
C. Possession: a certain amount of control over property, intent to possess the property and exclude others
                                   I. AQUIRING INTEREST IN PROPERTY
A. Conquest/Discovery: First qualifying discovery/possession confers ownership
         1. Johnson v. McIntosh: (Indian v. European title) Indians have less than full title, and can only
         sell their lands to the 1st European ―discoverer‖
B. Capture: First person to exercise certain control over it owns it.
         1. Certain Control:
                    a. death,
                    b. maiming,
                    c. trapping,
                    d. constructive possession—land owners have a superior right to possession over
         2. Fugitive Resources: oil, water, things that move under the land; Rule of Capture Applies
         3. MI: Rule of Capture applies in MI to wild animals and fugitive resources.
         4. Consequences of Rule of Capture: negative externalities and over-exploitation of resources
                    a. The effect of one person‘s acts upon another, when a person makes logical decisions
                    based on self-interest, but is ignoring negative consequences placed upon others, there are
                    hidden costs that the rational economic actor does not consider
                              i. Solution:
                                        1. nuisance/tax—make person think about their actions
                                        2. Assign property rights
                    b. Tragedy of the Commons—owned by all and all have the right to it—everyone will
                    chop as many trees down as they can to use for themselves and deplete all the trees.
         5. Cases
                    a. Pierson v. Post: (Fox Hunters) certain control‖ confers ownership over wild fox on
                    b. Ghen v. Rich (whale case) 1st person to do ―all that is possible‖ to capture a whale
                    acquires ownership.
C. Creation: one owns what he creates, however a man‘s property is limited to the chattels which embody
his invention, Others may imitate them
         1. Ideas: No common law property rights in Ideas, Cheney Bros v. Doris Silk (silk scarf case)
         2. Labor: News is not property, but general common knowledge; but it becomes quasi-property if
         a party puts time and effort into gathering & communicating it—so there‘s generally a period of
         time when he should benefit from his labor.
         3. Body Parts: Moore v. Regents (spleen case) no property rights in excised cells
D. Finders:
         1. True Owner:
                    a. Will always prevail, does not lose rights by losing property
                    b. True Owner will receive:
                              i. If Chattel:
                                        1. Trover—value of property ($); Conversion
                                        2. Replevin—the property back
                              ii. If Land:
                                        1. Trespass—damages ($)
                                       2. Ejectment—kick person off
         2. Finder‘s Rights:
                  a. Right to property over everyone except the true owner: Armory v. Delamarie
                  (chimney sweep case) 1st finder has good title against the whole world except the true
                  b. Finder‘s Keepers is true w/ exceptions:
                            i. True owner never relinquishes rights—true owner is considered a bailor and
                            finder is considered a bailee
                            ii. 1st Finder Only: Only applies to first finder,
                            iii. Mislaid: Doesn‘t apply to mislaid property
                            iv. Agents: The finder must not be acting as an agent/employee at the time of
                            finding, then the employer/supervisor gets it. [Is this right?]
                  c. Finder rightfully acquires possession of:
                            i. Lost Property:
                                       1. Hannah v. Peel (brooch case) non-trespassing finder of lost property
                                       has better title than absentee landowner
                                       2. Bridges v. Hawkesworth (money in shop case) (first finder has better
                                       title than LO for lost property in a public place)
                            ii. Abandoned Property—is entitled to keep it even against true owner if it was
                            actually abandoned
                            iii. Treasure trove: intentionally buried in the soil w/ intention of returning to
                            reclaim it. Newspaper Article [also, sometimes depends on if there‘s a statute—
                            if not try to fit it into either lost or mislaid property]
                  d. Landowner receives possession of
                            i. Mislaid Property
                                       1. McAvoy v. Medina (wallet in barber ship case) (locus owner has
                                       better right to mislaid property, as bailee for true owner)
                            ii. Property attached to Land:
                                       1. S. Staffordshire v. Sharman (rings in mud case) LO has possession
                                       of everything attached to or under her land
                                       2. Elwes v. Briggs (boat in soil case) LO has possession of everything
                                       attached to or under her land, even where finder has leasehold interest
                                       in the land
E. Adverse Possession: another way to come into possession—acquire title through long, uninterrupted
         1. Reasons:
                  a. Land needs to be used, shouldn‘t be wasted
                  b. True Owner can bring action for ejectment if don‘t want them on the land
                  c. Adverse possessor can bring action to quiet title to claim ownership
                  d. Boundary disputes are the most common form of adverse possession
                  e. Penalizes the owner for sleeping on rights—burden is on true owner to find out if
                  there‘s an adverse possessor
                  f. Rewards a person making productive use of the land
                  g. Exception to the rule that can‘t acquire good title from a thief
                  h. Exception to the Statute of Frauds that requires a writing to convey land
         2. Elements
                  a. Possession
                            i. Actual—actually occupy the land, possess the entire amount of property
                            desiring title to (can‘t just use one corner and claim title to whole lot)
                            ii. Constructive—actual possession under color of title
                                       1. Color of Title—Incorrect/Defective written instrument, judgment or
                                       decree: a exception to having to possess the entire amount claiming title
                                       to—don‘t have to if have a color of title giving right to entire lot
                  b. Open and Notorious
                            i. Physical Evidence that gives notice to the owner--
                  ii. Owners actual knowledge is not required Manillo v. Gorski: (15 ft over
                  property line) Court adopts minority view that open and notorious element
                  requires actual knowledge –minor encroachment is insufficient for actual
         c. Hostile—w/o owner‘s consent;
                  i. Mental State: does not matter in majority of states—if entered believing it was
                  yours or w/ bad faith, knowing it wasn‘t yours—doesn‘t matter. But:
                            1. VanValkenberg v. Lutz: (triangle land case) Court adds good faith
                            (must believe it is your property) requirement to and strictly follows
                            NY Statute requiring enclosure, improvement, or cultivation to
                            establish property rights by adverse possession;
                            2. Manillo v. Gorski: Majority view that mental state is irrelevant for
                            hostility element
                  ii. No trespassing sign proves the hostility element.
                  iii. Continuous element ends the minute possessor receives permission from true
         d. Exclusive—doesn‘t share w/ true owner
         e. Continuous for Statutory Period [MI Stat period is 15 years]
                  i. Continuous: normal use of the property;
                            1. Howard v. Kunto: Continuous possession requires only the degree of
                            occupancy and use that the average owner would make of the
                            property—use of a summer home only during the summer is
                            continuous use for the statute
                            2. Ewing v. Burnet: Adverse possession may exist even if the occupant
                            does not reside on the property and for long periods doesn‘t use it, but
                            pays taxes and from time to time exercises property rights (digs from it,
                            allows some to use it but excludes others from it).
                  ii. Must start over if abandoned at any time
                  iii. Tacking: allowed if privity
                            a. Tacking: can count continuous possession of different possessors
                            b. Privity: 1st possessor voluntarily transfer‘s to 2nd possessor through
                            title, deed, or any reasonable relationship Howard v. Kunto (neighbors
                            who owns others‘ deeds, adverse possession of the summer) Tacking of
                            adverse possessors is allowed if there‘s privity b/w the possessors and
                            that possession is how the true owner would use the property; Privity is
                            if deed, will, descent, written or oral contract, oral permission, or
                            consent –any reasonable relationship b/w adverse possessors is enough
                                      1. Ouster: No privity if ouster kicked out first adverse
                                      possessor; The first possessor has a right to the land against
                                      everyone except the true owner, so 1st could bring an action in
                                      ejectment against the 2nd (someone trying to oust 1st )
                                      2. Abandonment: No privity if property was abandoned and
                                      then adversely occupied by another
                  iv. Disabilities: (See example problems pg 152) Statutory Period doesn‘t begin
                  to run, or is tolled, if true owner has a disability at the time adverse possessor
                  enters, until the removal of the disability; O gets to elect more favorable
                  disability if both exist at same time (or if regular stat of lim is shorter or longer);
                            a. Must be the disability of the owner
                            b. Disabilities usually include mental, physical, age, prison
                            c. Can‘t tack disabilities
                            d. O gets to elect the more favorable disability if both exist at same
                            time (or if regular stat of lim is shorter or longer)
3. Mistakes / Innocent Improver Doctrine
         a. Improvements—where adverse possessor makes improvements; if adverse possessor
         can‘t take the improvements
                              i. Common Law approach—if lose the adverse possessor defense/claim, it
                              becomes the true owners and the adverse possessor is SOL
                              ii. Innocent Improver Doctrine—true owner gets title to the improvement, but
                              must compensate the adverse possessor if it was done innocently (forced sale)
                    b. Boundary Disputes:
                              i. No adverse possession if open and notorious element, or hostility element is
                              not satisfied (if true owner consents)
                              ii. Agreement—courts enforce oral agreement where true boundary line
                              uncertain and agreed on boundary line has been accepted for a long enough
                              period of time
                              iii. Acquiescence—no oral agreement, but acquiesce a boundary line for a
                              period of time (shorter than SofL)
                              iv. Estoppel—one neighbor indicates an agreement to a boundary line they are
                              later estopped from challenging it in court
          4. Adverse Possession of Chattels: O‘Keeffe v. Snyder: (stolen painting) Even a thief can acquire
          title under adverse possession, but when the SofL begins running depends on which jurisdiction:
                    a. Strict Statute of Limitations Rule: SofL runs as soon as it‘s out of owner‘s hands
                    b. Discovery Rule: SofL runs when the owner discovers who has it, or should know
                    through due diligence
                    c. Demand Rule: SofL runs when owner demands the chattel back
          5. Result of Adverse Possession—Adverse possessor only gets what the owner had: if enter
          against a holder of a Life Estate, only get possession until that person‘s life ends.
                    a. The Statute of Limitations doesn‘t begin to run against a future interest holder until that
                    interest vests and the future interest holder can do something about it.
F. Gifts: Two Elements of an Effective Gift
          1. Delivery: donor must transfer possession to donee
                    a. Manual—physical delivery [preferred]
                    b. Constructive—hand over access, but not item itself (key)
                    c. Symbolic—hand over a physical manifestation of the gift (written instrument like a
          2. Intent: Donor must clearly intend to be making a permanent gift and not a temporary loan.
                               II. ESTATES IN LAND AND CO-OWNERSHIP
    A. Present Possessory Estates (right to possess the property currently)
                1. Types of Present Estates
                    a. Fee Simple Absolute (FSA): cannot be divested, will never end, can do whatever you
                              i. Magic Words: ‗to A and his heirs‖ CL—but now ―to A‖ implies a FSA
                    b. Fee Tail (FT): conditional upon having issue; (normally today, replaced w/ LE)
                              i. Magic Words: ―to A and the heirs of his body‖
                              ii. If line of descendents runs out, FT ends and reverts back to grantor—Can
                              have it descend only along the male/female lines
                              iii. Every FT is followed by a reversion (to original owner) or remainder (to
                              someone else) h
                    c. Life Estate (LE): title only during the person‘s life; can do whatever want w/in that
                    time except sell)
                              i. Pur Autre Vie: for another‘s life
                              ii. Life of Grantee—for his life, then back to grantor or a different grantee
                          Baker v. Weedon: Court puts burden on Life Tenant to keep land valuable for
                              remaindermen, court can order the sale of property only if it‘s in the best interest
                              of all parties.
                2. Restraints on Estates
                    a. Disabling: grantee can‘t transfer interest –Made void by the Restatement
                          White v. Brown: Unless the words in context of a will clearly evidence an
                              intention to convey only a life estate, it will be interpreted as a Fee Simple
                              Absolute b/c court disfavors restraints on alienability, doubt is resolved in favor
                              of a FSA—court wants to avoid restrictions/inalienability of estates
            b. Forfeiture: if grantee tries to transfer his interest, it is forfeited to another person; Valid
            by Restatement if found to be reasonable in purpose, effect, and duration.
            c. Promissory: grantee promises not to transfer his interest (Contract law claim)
B. Defeasible Estates: FS,FT,LE can all be defeasible (end at some time due to some event)
       1. Determinable –can last forever (or for life if LE or FT) or automatically end upon some
            a. Magic Words: words of duration: during, until, whole, so long as… *usually before a
            b. Words merely stating the motive to not create FSD
            c. Always accompanied by a future interest
            d. O has a Possibility of Reverter (POR)
            e. CL: POR cannot be transferred during life b/c not thought of as a property interest you
            could transfer, but a mere possibility of becoming an estate
            f. Today: can transfer a POR inter vivos (during life), but some states follow the rule that
            interests are not transferable during life except to the owner
       2. Subject to Condition Subsequent (/CS): doesn‘t automatically terminate, but may be cut
       short or divested at transferor‘s election when a stated condition happens; O doesn‘t have to
       take away, but has the option if the event happens
            a. If event doesn‘t happen, it‘s a Fee Simple, FT, or LE
            b. Magic Words: condition: but if, provided that, on condition that –usually the property,
            a comma, then the condition subsequent; or an explicit re-entry provision
            c. Right of Entry (ROE) is retained by O expressly or impliedly
            d. Cannot grant a POR or ROE, to a transferee (it would be /EL instead)
            e. CL: ROE not transferable during life b/c it isn‘t a thing yet, but grantor had a special
            right to forfeit the estate
            f. Today: allow transfer of ROE, but some states don‘t allow unless there‘s a release
            (Some States allow transfer of POR but not ROE)
            g. FS/CS different from Covenant b/c in a Covenant a promise is made that a specified
            act will or will not be performed, if a covenant is breached the promisee may sue for
            injunction or damages.
       3. Subject to Executory Limitation: cuts short a prior estate, automatic transfer to designated
       person other than grantor
            a. Magic Words: words of duration or condition
            b. Future Interest held by named grantee
            c. Executory interest held by O
C. Future Interests (right to possess property in the future)
       1. In Grantor: interest retained by transferor
            a. Reversion: remainder of the Estate that hasn‘t passed from grantor when O has not
            given a FSA (the remainder of a LE when that person dies, etc.)
                      i. Transferable during life and descendible and devisable at death
                      i. Grantor takes immediately upon A‘s death,
            b. POR Possibility of Reverter: always preceded by estate Determinable (FSD, FTD,
                      i. Interest automatically vests in Grantor upon the event
                      ii. Waits politely for the estate to end naturally and then automatically takes over
            c. ROE Right if Entry: (power of termination) always follows an estate subject to
            condition subsequent and O retains power to cut short/terminate estate
                      i. When the condition occurs, grantor (or heirs) may exercise ROE, but doesn‘t
                      have to
       2. In Grantee: interest created in a person other than grantor;
            a. Remainder: waits politely until termination of preceding estate
                      i. Vested Remainder: remainder in ascertained person that is certain to become
                      possessory w/o condition precedent (other than death of preceding holder)
                                * Indefeasibly Vested: certain to become vested w/o condition—―To A
                                for life, then to B‖
                                *Subject to Open/Partial Divestment: grantee may be joined by one or
                                more other persons to share the interest –―To A for life, then to children
                                of B‖
                                *Subject to Complete Divestment: estate can be defeated by a condition
                                subsequent –―To A for life, then to B and his heir, but if at B‘s death he
                                is not survived by children, to C‖ (condition subsequent usually follows
                                a comma)
                     ii. Contingent Remainder: permits O to let future event determine who is to take
                     the property upon the life tenant‘s death; remainder isn‘t ready to become
                     possessory yet.
                                *Unascertained Person: ―To A for life, then to B‘s widow and heirs‖ [if
                                B is alive, the remainder is contingent b/c heirs of B cannot be
                                ascertained until B dies]
                                *Subject to Condition Precedent: contingent upon some event other
                                than the natural termination of preceding estate (Condition precedent
                                usually before a comma) ―To A for life, then to B if B is married at the
                                time of A‘s death‖ [B can take possession only if B survives A]
            b. Executory Interest (made possible through the Statute of Uses, at common law were
            void) A future interest in a transferee that can take effect only by divesting (shift/spring)
            another interest; cuts short the prior estate (words of condition) or it follows an estate
            Determinable *like a POR in another person
                     i. Shifting EI: divests or cuts short some interest in another grantee; ―To A and
                     her heirs, but if A divorces, then to B‖
                     ii. Springing EI: divest the grantor in the future, A has no rights right now, but
                     his rights ―spring up‖ in the future ―To A for life, and one year after A‘s death to
                     B in fee‖
                 Marenholz v. County Bd. Of Sch. Trustees: applying minority position, Court
                     forbid transfer of naked future interest Inter Vivos, but may descent to heirs
                     upon death
                 Toskono v. Mountain Brow Lodge: restraints against alienation are disfavored,
                     but use restrictions may be upheld.
D. Four Rules: to further marketability by destroying Contingent FI
       1. SHELLEY‘S CASE: if the (1) same instrument gives (2) a LE to A and(3) a remainder to
       ―A‘s heirs‖ or ―the heirs of A‘s body‖, as a rule of law (regardless of intent), A takes the
       remainder and the heirs take nothing.
            a. Requirements:
                     i. Same Instrument
                     ii. Both estates must be legal or both equitable
                     iii. Future Interest must be a remainder (vested or contingent)
            b. Currently: abolished in majority (including MI) except Arkansas
            c. The Doctrine of Merger steps in and merges the FS remainder and the FI into a FSA
       2. DOCTRINE OF WORTHIER TITLE: O A + O‘s Heirs ; in a life conveyance, any
       limitation over to the heirs of the grantor is void, instead the grantor has a reversion
            a. Qualifications:
                     i. Inter Vivos: during life (some states have a Testimentary Branch that applies
                     this to wills instead/addition to)
                     ii. Rule of Construction: if grantor‘s intent is clear, it will be honored (not a rule
                     of law like in Shelly‘s case)
                     iii. Limitation Over: remainder or executory interest
            b. Rationale:
                     i. it was worthier to take by inheritance than by purchase,
                     ii. furthers alienability—O can convey reversion, whereas O‘s heirs, not being
                     ascertained, cannot convey future interest.
            c. Extended to personal property as well as real property
            d. Currently: still good law
      3. DESTRUCTABILITY OF CONTINGENT REMAINDER: a contingent remainder is
      destroyed if it does not vest at or before the termination of the preceding estate.
           a. Currently: Replaced w/ RAP
           b. A Contingent Remainder can become a springing executory interest that divests the
           remainder; Ex: O to A for life and then to B if B gets married. If B is single at A‘s death,
           O gets the reversion and has FS/EL and B gets the estate upon getting married.
      3.5. MERGER: if a LE and the next vested estate in Fee Simple come into the hands of the
      same person (through another rule) the lesser estate is merged into the larger
           a. Qualifications: All three interests can‘t be created by the same instrument
      4. RULE AGAINST PERPETUITIES (RAP): (1) An interest must vest (2) if at all (3) w/in 21
      years (4) of a life in being (5) at the time the interest is created. [Rule of law—applied no
      matter what grantor‘s interest is]
           a. Qualifications:
                     i. When an interest is transferred by will, the perpetuities period begins to run at
                     the testator‘s death
                     ii. If the interest is transferred during life, the perpetuities period begins to run
                     when an irrevocable transfer has been made
                        iii.        Validating Lives: a life that can affect vesting
                        iv.         RAP applies only to interests that the law does not consider to be
                                                i. Contingent Remainder
                                               ii. Executory Interest
                                              iii. Vested Subject to Open
                        v.          Class Gifts (vested remainders subject to open)
                                                i. Are not vested in any member of the class for purposes
                                                   of the RAP until: (1) class closed AND (2) interest is
                                                   vested in every member
                                               ii. The entire class gift is void if interest of even one
                                                   member might possibly violate the RAP
                        vi.         Three Approaches:
                                    a. Common Law: what might happen—if any absurd scenario
                                         could make the interest not able to vest, the remainder is void
                                         from the beginning [Ex: a condition greater than 21 years;
                                         condition is open/timeless]
                                    b. Wait-and-See: wait until the interest actually vests and see if it is
                                         too long *not on exam
                                    c. USRAP-Uniform Statutory RAP (what MI applies) combination
                                         of both—what might happen if it‘s certain not to vest it is void,
                                         if not, wait 90 years from creation to see if it vests.
E. Co-Ownership/Concurrent Interests
      1. Creation—four unities
                     a. Time—interest must be vested or acquired in both persons at the same time
                     b. Title—Must be acquired by the same instrument, or joint adverse possession
                     (can never arise by intestate succession or other act of law)
                     c. Interest—must have undivided shares and identical duration;
                     d. Possession—each person has a right to possession as a whole; but one tenant
                     can give exclusive possession to the other
      2. Types of Concurrent Interests
                     a. Joint Tenancy (w/ right of survivorship) –regarded as a single owner
                                 i. magic Words:
                                            *To A and B as joint tenants and not as tenants in common
                                            *To A and B as joint tenants w/ the right of survivorship
                                 ii. Four Unitites—all required
                                 iii. Severance: allowed, can be done by:
                                            * Mutual Agreement
                                         *Inter-Vivos Conveyance
                                        Riddle v. Harmon: a joint tenancy may be unilaterally
                                         terminated w/o use of a third party
                                     Harms v. Sprague: in a lien state, a unilateral conveyance of a
                                         mortgage cannot sever a joint tenancy and survivor retains
                                         entire property
                              iv. Partition: allowed
                                         *Court Ordered
                                                  1. Partition in Kind—(divide in half) courts say they
                                                  prefer this, but most often they actually sell
                                                  2. Partition by Sale
                                               Delfino v. Vealencis: partitions in kind are preferred
                                                  over partitions by sale unless: (1) The physical
                                                  attributes of the land are such that a partition in kind
                                                  is impracticable or inequitable, or (2) the interests of
                                                  the owners would better be promoted by partition by
                              v. Right of Survivorship: yes, if grant a FSA to A and B, when A dies,
                              B has entire FSA
                                               Spiller v. Mackareth: a co-tenant in exclusive
                                                  possession does not owe rent to the other co-tenant
                                                  unless he acted as an ouster.
                    b. Tenants in Common –No ROS; default interest; separate, but undivided
                              i. Magic Words: ―To A and B‖, To A and B as tenants in common
                              ii. No Right of Survivorship: when A dies, A‘s share doesn‘t evaporate,
                              but goes by will or intestate to A‘s heirs and B then shares w/ heirs
                              iii. Four Unities: only possession is necessary
                              iv. Partition: yes
                                         *Court Order
                    c. Tenancy by the Entirety: only created b/w husband and wife, recognized in
                    only 50% of jurisdictions (including MI)
                              i. Magic Words: To A and B as tenants by the entirety
                              ii. Four Unities: all four + Marriage
                              iii. Severance: cannot be severed unilaterally, but can be severed by:
                                         *Divorce—terminates the marriage requirement
                                         *Agreement—neither alone has a right to judicial partition
                              iv. Partition: only voluntary—court won‘t order two spouses to divide
                              up their property
                              v. Right of Survivorship: yes—can‘t defeat by conveying to third party,
                              only conveyance by husband and wife together is valid.
                              III. LANDLORD AND TENANT
A. Leasehold Estates:
       a. Term of Years:
                 i. Duration: definite period of time, specific beginning and ending dater or a
                ii. Notice: by advance agreement, so NOT required
               iii. Unilateral Power of Termination: YES—parties can create one if they want
               iv. Death Terminates Leasehold Estate: (if LL or Tenant dies) NO—still owe rent,
                    the rights and obligations just pass to the successor or estate
                v. Magic Words: T A for x amount of time
       b. Periodic Tenancy
                  i. Duration: for a particular period (week-to-week, year-to-year) express or
                 ii. Notice: YES (otherwise automatic renewal)—CL notice must be given at lease
                     one period in advance, but no more than 6 mo notice required
                iii. Unilateral Power of termination: YES
                iv. Death Terminates Leasehold Estate: NO
                 v. Magic Words: To A for one year from tomorrow
                  Garner v. Gerrish: (lease gave renter right to terminate, but not lessor) Court
                     chooses most favorable type for the tenant, terms of rental agreement, if
                     expressly and unambiguously set out, should be followed.
       c. Tenancy at Will
                  i. Duration: not fixed, express or implied, for as long as parties desire
                 ii. Notice: NO, some statutes modify to require some though
                iii. Unilateral Power of Termination: NO b/c by its nature either party can wals
                     away at any time
                iv. Death Terminates Leasehold Estate: YES b/c a person‘s will cannot survive
                 v. Magic Words: To A as long as party shall please
                            Garner v. Garrish: when lease gives tenant indefinite amount of time to
                                hold lease, it creates a Life Estate Determinable
       d. Tenancy at Sufferance
                  i. Duration: holdover tenant, has entered legally but has remained wrongfully
                 ii. Notice: Landlord either evicts or consents to another lease
                iii. Unilateral Power of Termination: N/A
                iv. Death Terminates Leasehold Estate: N/A
                 v. Magic Words : B‘s lease expires, but B continues to occupy premises—can‘t
                     really put words into a lease b/c then not a holdover, but another kind of tenant
                  Crehale v. Polles: when a LL fails to eject tenant and accepts monthly rental
                     checks, he agrees to an extension of the lease on a m/m basis—LL must make
                     irrevocable election of remedies when there is a holdover tenant.
       * Miscellaneous: Statute of Frauds: leases for more than one year must be in writing to be
B. Discrimination: Fair Housing Act—can‘t discriminate while renting to someone—Fed Statute
   adds additional duties to ownership
       a. §3604(b) Protected Classes:
                  i. Race
                 ii. Color
                iii. Religion
                iv. Sex (but not sexual orientation—okay to discriminate against gays)
                 v. Familial Status
                vi. National Origin
       b. Prohibited Activities: can‘t discriminate in:
                  i. Sale/Rental of Property
                 ii. Terms/Conditions of Sale/Rental
                iii. Ads for Sale/Rental
       c. Handicapped People
                  i. LL must make reasonable modifications
                 ii. LL must make reasonable accommodations
       d. Exemptions:
                  i. If selling/renting a single family home and selling/renting by owner—but ads
                     still not exempt
                 ii. If it‘s an owner occupied building w/ 4 or fewer units (ads not included)
       e. Proving Discrimination:
                  i. Discriminatory Effect (no need to prove intent)
                 ii. You‘re a protected Class
                iii. You‘re otherwise able to rent/buy the property
                 iv. Then the burden shifts to owner to explain the discriminatory effect
                  Soule v. US Dept of Housing: (discriminated renting on child‘s age) LL
                      presented legitimate, nonpretextual reason for making their inquiry and
                      discriminatory effect, they did not violate the Fair Housing Act.
C. Sub-Lease/Assignment:
       a. Rules for LL:
                   i. Residential Leases: LL has no duty of reasonableness to accept an assignment or
                  ii. Commercial Leases: LL has a duty to use reasonable means to accept a qualified
                      sub-tenant and assignee
       b. Assignment:
                   i. If T1 conveys everything he has to T2—entire unexpired remainder is
                  ii. T1 and T2 are both liable for the rent and the LL can go after either one
                iii. Privity of K—T1 is still in privity of K w/ LL, T2 and T1 are in privity of k
                 iv. Privity of Estate—T1 is in privity of estate w/ LL
                  Ernst v. Conditt: the intent of the parties indicates whether a transfer is an
                      assignment of sublease, and by transferring lessee‘s estate for the entire term, an
                      assignment is created.
       c. Sub-Lease:
                   i. T1 conveys less than his entire estate to T2—only partial remainder is
                  ii. T1 is liable for the rent (T2 must pay T1)
                iii. Privity of K—T1 is in privity of K w/ LL
                 iv. Privity of Estate—T1 is in privity of estate w/ LL
       d. Self-Help/Defaulting Tenants: LL can use self-help if reasonable to regain possession of
            his property
                   i. LL entitled to re-take possession where:
                            Legally entitled –re-entry clause
                            Means of re-entry is peaceable
                  ii. Abandonment—LL options:
                            Leave premises vacant and sue for rent
                            Re-take and attempt to lease again
                     Berg v. Wiley: (lock out of leased restaurant) self-help okay if reasonable, but
            unreasonable self-help in recovering possession is prohibited, LL must resort to statutory
            remedy or be liable for damages –narrow view or reasonable self-help
D. Rights and Remedies:
       a. Duties:
                   i. LL can‘t evict b/f lease is up—if happens LL not entitled to damages, and T is
                  ii. If property was abandoned then T breaches and LL entitled for remaining rent
                iii. Limiting Clauses generally upheld (but if lease is silent, then T may assign or
                 iv. LL has no duty of reasonableness in limiting assignments or sub-leases, but
                      there‘s a trend to be more tenant-friendly
       b. Remedies:
                   i. Eviction
                  ii. Back Rent
                iii. Security Deposit
                 iv. Future rent (if acceleration clauses permitted
                  v. Damages
       c. Mitigation of Damages: (use good faith in trying to re-rent the property-can‘t just sit and
            collect the rent w/o a person using it) at CL, LL has no duty, but Modern Trend is that LL
            must make reasonable efforts.
       d. Implied Covenant of Quiet Enjoyment: (Constructive Eviction when T vacates): in every
            k—any act or omission by LL which renders premises substantially unsuitable for the
            purposes for which it was leased or seriously interferes w/ the enjoyment of the
            premises—there is a breach of QE and constitutes constructive eviction of k.
                  i. Breached in two ways
                            Actual Eviction: T treats k as breached; if evicted, can stay and refuse
                                to pay rent until LL restores entire premises
                            Constructive Eviction: if QE substantially interfered w/ T can treat
                                lease as terminated and vacate the premises, he‘s no longer liable for
                 ii. Four Elements of Eviction:
                            Substantial Interference: if known by T at inception of lease, this may
                                be a waiver
                            Notice: notify LL of defect; give reasonable time to cure
                            Must Vacate w/in a Reasonable Time: cannot stay AND pay rent and
                                claim constructive eviction
                            Fault: must lie w/ LL
             Reste Realty Corp. v. Cooper: a flooded basement constitutes substantial interference
                 w/ use and enjoyment of property and LL‘s failure to remedy constitutes a
                 constructive eviction b/c it breaches the covenant of QE
       e. Implied Warranty of Habitability: implied in every lease—applies to both hidden and
            latent defects
                  i. Constructive eviction not available, instead LL will deliver and maintain
                      throughout the period of tenancy, premises that are safe, clean, and fit for human
                 ii. Tenant has three options:
                            Stay and Pay: sue and collect damages
                            Withold Rent: use as a defense
                            Make repairs and Deduct from Rent—not recommended
             Hilder v. St. Peter: (rented crappy house b/c poor) WHO cannot be waived; court
                 applies WOF b/c constructive eviction not available (T didn‘t move out), allows
                 tenant to use WOF as a cause of action to collect damages/ or defense for
                 withholding rent.
       f. Retaliatory Eviction: rebuttable presumption of Retaliatory purpose if : (w/in some period
            of good faith complaint) LL seeks to
                  i. Terminate Tenancy
                 ii. Increase Rent
                iii. Decrease Services
E. Affordable Housing
                                   IV. TRANSFERS OF LAND
A. Stages of Transactions:
       a. Contract of Sale
       b. Buyer Secures Financing: buyer chooses lender, applies for load, lender conducts
            appraisal to see what house is worth, lender takes mortgage on property
       c. Title Investigation: to assure buyer that seller has good, marketable title, no adverse
            claimants, mortgages leins, etc. Seller must establish chain of title to Fed Gov‘t. title
            assurance, title insurance
       d. Closing: buyer and seller and agent and representative from housing company are
            present, but can conduct by mail
       e. Recording: in county records (subject to various recording acts)
       f. Unauthorized Practice of Law: most states prohibit unauthorized practice of law through
            statute, judicial decision, or both.
                  i. In most states, courts will allow non-legal agencies to prepare basic/standard
                      legal documents, but they cannot charge legal rates, or give legal advice
                         State v. Buyers: an extreme example where attorneys must perform
                              everything, CA is other extreme where no attorneys are necessary.
         g. Realtors: MI law says realtors must disclose in writing whose agent the realtor is—
            protects buyer from being deceived: Represents the modern approach, a realtor can be:
                   i. Buyer
                  ii. Seller
                iii. Dual—both
                 iv. Transaction coordinator—just get papers signed and let them negotiate
B. Contract of Sale
       a. Statute of Frauds: in order for a k for a sale of land to be binding, it must follow the
            statute of frauds:
                   i. Signed by a party to be bound
                  ii. Describe the Real Estate
                iii. Price, Formula, or Fair market Value
                 iv. Exceptions:
                                1.Part Performance Restatement §129:
                                    a. Reasonable Reliance: transfer of possession and either part
                                         payment of making of improvements
                                    b. Restitution is inadequate
                                    c. Parties efforts were unequivocally referable to k/Promise
                                         Proved—the sale of land can‘t be explained any other way
                                         except oral agreement; this element is not required if the
                                         making of the promise is admitted or clearly proved
                                                 Hickey v. Green: where seller admitted to oral
                                                      agreement, apply part performance as an exception
                                                      to Stat of frauds is excused if party seeking
                                                      enforcement in reasonable reliance theron, has so
                                                      changed his position that injustice can be avoided
                                                      only by specific enforcement
                                2. Estoppel:
                                         a. Reasonable Reliance
                                         b. Unconscionable Injury if Promise not enforced
                                         c. Seriously changed position
                                         d. [Unjust enrichment—some courts require]
                                3. Adverse Possession—property changed hands w/o written k
            b. Marketable Title: implied into every k, free from reasonable doubt in the mind of a
                 reasonable attorney:
                        i. includes
                                1. AP,
                                2. encumbrance of gov‘t restriction,
                       ii. doesn‘t include
                                1. private restrictions,
                                2. violated private restrictions,
                                3. violations of gov‘t restrictions
                      iii. Good Record
                      iv. Adverse Possession: If k provides for marketable title, AP is enough, but if
                           k required marketable record title, must pass a piece of paper too.
                           Conklin v. Davi: title by AP is marketable if outstanding claimants would
                             not succeed and it is unlikely that a claim will be brought
                       v. Encumbrances
                                1. Zoning Ordinances: public limitation son personal property—the
                                    mere existence doesn‘t make title unmarketable
                                2. Restrictive Covenants: private restrictions on property—mere
                                    existence makes title unmarketable
                           Lohmeyer v. Bower: (restrictive covenant on land and violation of it)
                             Marketable title is title w/o private encumbrances and no violation s of
                             legal zoning laws; Private encumbrances OR violation of Zoning laws
                             renders title unmarketable
          Duty to Disclose Property Defects: standard was caveat emptor (buyer beware); now
          trend is moving that buyer has duty to disclose material, hidden, or self-created
                i. Latent/Hidden Defects
                   Stambosvsky v. Ackley: (poltergeist house) seller must disclose material,
                      latent defects that are created by seller.
               ii. Known defects
                   Johnson v. Davis: seller cannot tell affirmative lies; commit fraud if do
                      so; seller must disclose material, latent defects that he knows of.
              iii. Examles: Noisy neighbors
                         1. Stombovsky court: if seller didn‘t create the noise, doesn‘t have to
                         2. Johnson court: if seller knows of the noise, has to tell
              iv. MI law: standard disclosure sheet available at all open houses / complete
                    disclosure rule
B. The Deed
       a. Three types of Deeds:
                i. General Warranty Deed: no defects in title up to time of conveyance (six
                    promises are made) :
                         1. Present Covenants: SOL starts to run when deed is delivered to
                                   a. Covenant of Seisin: grantor owns estate
                                   b. Covenant of Right to Convey: grantor also has right to
                                       convey the property
                                   c. Covenant Against Encumbrances: premises are free from
                                       encumbrances, no one else has claim to all or part of
                         2. Future Covenants: SOL starts to run at breach of covenant; usually
                              by eviction/constructive eviction of buyer
                                   a. Covenant of General Warranty: grantor will defend
                                       against all lawful claims against superior title; if grantee
                                       loses, grantor will reimburse
                                   b. Covenant of Quiet Enjoyment: grantee will not be
                                       disturbed in possession and enjoyment of property, legal
                                       right to possession
                                      Brown v Lober: no constructive eviction resulting in
                                          breach of quiet enjoyment until the person holding the
                                          title actually interferes w/ P‘s right of possession—
                                          covenant of QE doesn‘t guarantee there is no one w/ a
                                          paramount title—if buyer never attempts to occupy
                                          land, his possession can never be other than peaceful
                                   c. Covenant of Further Assurances: grantor promises he will
                                       execute any other documents required to perfect the title
               ii. Special Warranty Deed: grantor had done nothing to defect the title,
                    warrants only against the grantor‘s acts, but not the acts of others prior
              iii. Quitclaim Deed: no warranties at all
       b. Merger: if k promises to deliver all three types of deeds, but buyer accepts only one
          deed, Courts follow two doctrines:
                i. Merger: at closing the k merges into the deed, buyer gets only what he
                    accepts and by now it‘s too late to sue
               ii. Non merger Jurisdictions: k and deed promises are independent and buyer
                    can sue for damages on the k or the deed.
       c. Suing remote grantor
                i. Usually cannot sue a remote grantor on present covenant warranty
                  ii. Usually can sue remote grantor on future Warranties b/c they run w/ the
                      land to all subsequent purchasers.
                      Rockafellar v. Gray: Minority view that can sue a remote grantor on a
                        Present covenant warranty
C. Mortgages
      a. Documents given to lender at closing:
               i. Promissory Note—borrower‘s promise to repay the debt
                      1. Only a promise to re-pay, but in some states, subjects borrower to
                            personal liability
                      2. Pre-Pay loan (if advising buyer you want this)
                                a. Can make advance payments that go only to the principle
                                b. Some have penalties, some don‘t
                                c. Must have right to pre-pay in order to re-finance
                      3. ―Due on Sale‖ Clause (if advising lender) –prevents a 2nd buyer
                            from taking over the house at 1st buyer‘s interest rate; bank makes
                            more money by financing a new person
              ii. Mortgage: creates only a security interest in the property for the bank to
                  assure payment on the loan. (unlike promissory note which may or may not
                  create personal liability)
                      1. Title Theory State: bank/lender actually gets title until the last
                            penny has been repaid (also applicable in joint tenancy)
                      2. Lien Theory State: (MI) bank only has a lien, doesn‘t have
             iii. Lender‘s Remedies: (the way the security interest works for the lender), the
                  steps the lender takes:
                      1. Default by borrower—fails to make payment
                      2. Workout—attempt to negotiate an agreement
                      3. Equity of Redemption—borrower has failed to pay on loan (at CL
                            borrower only retained equity of redemption (a second chance to
                            bring payments up to speed) ~but this creates a period of
                      4. Foreclosure: at some reasonable point can foreclose the equity of
                                a. CL strict foreclosure: lender takes and buyer loses
                                     everything he‘s paid—lender gets money already pd and
                                     the property
                                b. Modern Foreclosure: sell the property and divide up the
                                     proceeds in a fair way.
                                           i. Judicial Foreclosure Sale: court supervises all
                                               procedures and sale—has a lot of safeguards and
                                               very secure, but expensive and cumbersome
                                          ii. Private Power of Sale (majority view) normal
                                               sale, not court supervised so less expensive, but
                                               if either party is dissatisfied and later leads to
                                               litigation, the sale may be overturned. –If parties
                                               have agreed to private sale then there‘s a deed of
                                               trust which goes to a neutral third party trustee
                                               who brokers the sale.
                          c. Upon foreclosure, bank gets the rest it is owed and the rest goes
                          to the buyer/borrower in equity. If sale produces less than what
                          bank is owed, lender can go after personal assets of borrower;
                          however most states have anti-deficiency Statutes, prohibiting
                          banks from going after the remaining deficiency—this is usually
                          woven into the promissory note.
                    Murphy v. Financial Development Corp: (bank foreclosed and bought
                       cheap) As long as the lender exercised reasonable efforts, good faith,
                             and due diligence to obtain a fair and reasonable price then the sale
                             will not be set aside; Courts look at the process of the sale, not just the
                iv. Installment Land Ks: (mortgage substitute) now buyer is treated just as a
                       mortgagor and is the equitable owner of the premises and is entitled to all
                       the equity he has built and all legislative actions protecting buyers
                         Bean v. Walker: : (Installment Land k) In spite of contrary language,
                             an installment land k is treated like a mortgage and is therefore the
                             buyer has an equitable title to the property regardless of what the k
D. Title Assurance
        a. Recording Systems: public records that can be searched for free
                  i. Grantor/Grantee Indexes (most common and historic):
                            1. Grantor: start w/ most recent Grantee (buyer) and move backwards
                                  to find original owner/grantor
                            2. Grantee: start w/ date original owner got property and move
                                  forward until the current date, verifying what grantee index said –
                                  make sure there was no double dealing
                 ii. Tract Index System: doesn‘t organize by buyer/seller, but by tracts of land:
                       thought to be superior b/c all info for a piece of land is on one paper –but
                       not required
                iii. Private Records: at a cost, Title plants/private tract indexes
                iv. Things that can be recorded: judgment lien (involuntary conveyance),
                       mortgage, deed, lis pendens (notice of pending lawsuit), contracts,
                       easements, etc.
        b. Notice:
                  i. Actual: actually knows
                 1. Buyer protected as a BFP Where buyer pays entire balance before receiving
                 actual notice
                 2. If seen by the purchaser, an improperly recorded conveyance can provide
                 actual notice
                                   Lewis v. Superior Court: a document is not considered
                                       recorded until it is properly indexed
                 ii. Constructive
                 1. Record Notice: would know if did a title search
                 2. Inquiry Notice: should know b/c facts would lead a reasonable person to
                 inquire farther
               *Default Rule is ―First in Time, First in Right‖ The first grantee would always
               win b/c received the conveyance first
                         Luthi v. Evans: Mother Hubbard Clause does not give constructive
                             notice to subsequent to purchasers
                         Orr v. Byers: misspelled name does not constitute constructive notice
                             and therefore was not recorded
                         Guillette v. Daly Dry Wall: purchasers are charged w/ notice of
                             restriction on all deeds coming out from a common grantor—prior
                             deeds out from common grantor provide notice to all subsequent
                         Bd of Educ. V. Hughes: Conveyance doesn‘t count until the deed is
                             complete; B has notice of late recording (so must search all grantors
                             from date you acquire title to present date)
                         Muniments Title Doctrine: If the jurisdiction follows the muniments of
                             title doctrine, then a title searcher must read all documents in the
                             recorded chain of title, as well as read all documents that are
                             mentioned or referenced in the recorded chain of title; purchaser takes
                            w/ constructive notice if and Unrecorded Conveyance is Referenced in
                            the COT
                iii. Modern Recording Statutes: modify the Default rule for conflicts
                 1. Race State: race to the courthouse, whoever gets there first wins—a PUC
                 (Prior Unrecorded Conveyance) is not valid against subsequent BFP (Bona Fide
                 Purchaser) who records first.
                 2. Notice State: if B took w/o notice, he wins –PUC ineffective against a
                 subsequent BFP no matter who records first
                 3. Race-Notice State (MI): combination, Race and lack of notice to win –PUC
                 ineffective against subsequent BFP who records first (in a R-N State if it doesn‘t
                 apply, go to CL default rule)
                           *PUC—first conveyance must be unrecorded at the time the second
                           conveyance was made
                           *BFP—paid value for the property and took without notice of prior
                           conveyance –who is a BFP:
                                     ~harsh CL Daniels v. Anderson: not a BFP until seller receive
                                     full payment—made final payment still w/o notice (so a land k
                                     is diff than a mortgage)
                                     ~equitable title: BFP status measured at the time when 1st
                                     payment made
                                     ~Actual Notice: middle ground approach
                                     ~To maintain BFP status, must inquire of all persons in
                                     possession of property unless their presence is entirely
                                     consistent w/ COT
                 iv. Shelter Rule: (assume the shelter rule always applies) B can forever defeat
                      A‘s title and C is sheltered under the umbrella of B‘s recording or BFP
                  v. Variance of Shelter Rule (Shelter Rule in COT #2) can also be applied
                 vi. Wild Deed: (only applied if told) A deed is not ―recorded‖ unless all
                      previous conveyances in the chain are recorded. –if someone later on in a
                      COT records, it doesn‘t count.
  1.                            Messersmith v. Smith: minority rule that wild Deed applies to
                                COT #2
                 2.             Bd of Educ. V. Hughes: Court goes to great lengths to avoid
                      applying Wild Deed to COT #2.
                vii. Defective Recording/Notice
                 1. Defective Convayance:
                 2. Defective Acknowledgement
                           a. Majority Rule
                           b. Minority Rule: Messersmith v. Smith: hypertechnical defining of
                           defective acknowledgement b/c a latent/hidden defect—wouldn‘t know
                           the record was defective simply b/c it was acknowledged over the
E. Marketable Title Acts:
        a. Limit the title searches to 30-40 years (MI is 40 years)
        b. All claimants of interest must file a new claim every 30-40 years
        c. Extinguish old title defects automatically over time
        d. Don‘t require BFPs
F. Title Insurance:
        a. Opinion of insurer concerning the validity of title; along w/ agreement to make
            opinion good if it‘s wrong and results in a loss—guarantees the ins co searched
            records and insures against any defects in public records, unless defects are excepted
            from coverage
        b. No fixed term—continues as long as insured has interest in the land
        c. Creates liability to insured only—doesn‘t run w/ the land
        d. Most use two forms: Mortgagee‘s policy & owner‘s Policy
             e.   Most exclude losses from:
                         i. Gov‘t regulations affecting use, enjoyment, or occupancy [zoning,
                             subdivision regs, building codes…]
                        ii. Claims of persons in possession not shown by public records
                       iii. Unrecorded easements
                       iv. Implied easements
                         v. Easements from prescription
                       vi. Defects that would be revealed by survey or inspection
                            VI. PRIVATE CONTROL OF LAND USE
A. Nuisance: CL tort claim—the right thing in the wrong place; the use of property that unreasonably
   interferes w/ another person‘s use and enjoyment of the land
        a. Remedies: only an after-the-fact remedy: sue after they do something and get injunction
             to get them to stop or get damages
        b. No need for physical invasion (like for trespass)
        c. Moral or Psychological Nuisances are also allowed: gambling, prostitution…
        d. Test: balance and look at:
                    i. Who was there first
                   ii. Utility of Conduct: how beneficial it is to the location
                 iii. Appropriateness to the location
B. Easements: the right to use the land of another
        a. Terminology
                    i. Appurtenant to land: for benefit of a piece of land, runs w/ the land as long as
                        the property for whose benefit the easement was created is still there
                   ii. In Gross; for the benefit of a person—this particular person can always use the
                        land, can assign or convey at will—doesn‘t expire upon death
                 iii. Dominant: benefits from the other—receives the benefit
                  iv. Servient: the land that‘s burdened, it serves the easement
                   v. Affirmative: the right to do something to/on the land
                  vi. Negative: the right to prevent the use of the property—right to make the owner
                        of servient land not do something otherwise allowed; CL limits them to four
                        areas (and one recent neg. Easement allowed)
                             1. Light: can‘t block windows
                             2. Air Flow: can‘t block the air
                             3. Removal of building support
                             4. Interference w/ Artificial Water course/Flow
                             5. Conservation: negative easements not to log the land, etc. in order to
                 vii. Reservation: provision in a deed being conveyed that creates a new servitude
                        which did not exist before, Courts are more suspicious of reservations than of
                        grants—so a little tougher on grantor to make sure that‘s what the parties
                        actually intended
                              Willard v. First Church: modern approach under which court allows
                                  easement to be reserved in favor of third party
                viii. Grant: given to someone—more easily enforced by courts
                  ix. Profit: right to enter land and remove something from it
                   x. License (diff than an easement): permission for one person to come onto the
                        land of another which would otherwise be a trespass
                             1. Often an oral k for SOF
                             2. Revocable (unless license + interest (improvements) or estoppel, then
                                                Holbrook v. Taylor: where party relies and changes
                                                    position on oral agreement, court awards irrevocable
                                                    license which is functionally equivalent to easement
                                                    by estoppel
                             3. Not a property Interest
        b. Creation: must comply w/ SOF or fit w/in an exception
          i. Express:
                  Willard v. First Church: grantors expressly created an easement (in the
                      form of a reservation for third party)
         ii. Implied / Quasi Easement
                 1. Prior Use: requirements:
                           a. Unity of Ownership: can‘t imply easement through a
                                stranger‘s land—privity of ownership: relations b/w the
                                respective owners
                           b. Prior Use:
                                       I. reasonable necessity,
                                       II. apparent (known by parties),
                                       III. continuous
                                        VanSandt v. Royster: court stretches to find
                                             easement implied from prior use on the basis of
                                             continuous, apparent, necessary prior use of
                                             previous owners
                 2. Necessity: lasts only as long as the necessity exists; requirements:
                           a. Unity of Ownership
                           b. Necessary: at the time of severance of estates
                                       I. Strict: the absolute only way:
                                        Othen v. Rosier: court used strict necessity and
                                             found the right-of-way was not necessary
                                       II. Reasonable Necessity
        iii. Prescription: same as Adverse Possession (except for exclusivity)
                 1. Continuous for Stat period
                 2. Open & Notorious
                 3. [Exclusive—not included b/c an easement by definition is the right to
                      use the land of another—so owner is always using it]
                 4. Hostile: w/o owner‘s consent
                 5. Actual
                       Holbrook v. Taylor: didn‘t have the hostile element b/c had
                           owner‘s permission
                       Othen v Rosier. The hostile element was lacking since he had
                           permission—he only had a license which can‘t ripen into a
                           prescriptive right
                       Matthews v Bay Head Improvement Association. (beach
                           improvers) Alternative recovery b/c groups cannot be granted
                           easement by prescription, so use the public trust doctrine
        iv. Estoppel: similar to license by estoppel
                 1. Oral Agreement
                 2. Reliance
                 3. Changed Position
                       Holbrook v Taylor. Where a party relied and changed position on
                           an oral agreement, court awards irrevocable license by estoppel as
                           the functional equivalent of easement by estoppel.
c.   Scope
          i. Appurtenant (for land) –
                 1. may not be extended to another parcel of land, even if owned by the
                      same person
                 2. The benefit can only go to the tract of land specified.
                       Brown v Voss. (owner had possession of servient also had another)
                           If an easement is appurtenant to a particular parcel of land, any
                           extension to other parcels is a misuse of the easement; however
                           damages may be imposed (instead of injunction) according to the
                           increased burden.
                                 Prseault v US. (Rails to Trails Act) The easement can only be
                                  extended to uses that were reasonably foreseeable when it was
               ii. Gross (for person)
                         1. Assignability: assignable if they are for commercial purposes
                              Miller v Lutheran. (lake for church use) Easements in gross are
                                  assignable if they are for commercial purposes
                         2. Divisibility:
                                  a. Ownership: more than one person can own a share in the
                                       easement, can divide the profits
                                  b. Use: can divide the use if there‘s common consent; One Stock
                                       Rule—they must exercise it jointly in one stock—must be
                                       used w/ consent of all parties
                              Miller v. Lutheran: easements can be divided in ownership and use
                                  if there‘s common consent by all owners
      d. Termination: easements are usually infinite in duration but there are several exceptions:
                i. Necessity: when the necessity ceases to exist
               ii. Merger: when the same person acquires both the servient and dominant estates
              iii. Abandonment: non-use + conduct that shows intention to abandon; acts that
                    manifest either:
                         1. Present intent to relinquish the easement
                         2. Inconsistent Purpose w/ future existence
                              Preseault v. US: (Rails to Trails Act) easement can be abandoned
                                  only by non-use and conduct showing intent not to use.
              iv. Release: usually for money—selling back the easement
               v. Loss by Prescription: if someone uses your easement for such a time period to
                    take over (E-NACHO)
              vi. Record: if fail to record the easement, lose it
C. Covenants:
      a. Real Covenants: suit for damages; (in b/w k and property rights—looks like a promise,
          but refers to a piece of land)
                i. Types:
                         1. Affirmative: promise to perform an act related to land
                         2. Negative: (looks like negative easement): promise to refrain from
                             performing some act related to land
               ii. Requirements:
                         1. enforceable promise +
                         2. intent to bind successors +
                         3. LL / Tenant Relationship +
                         4. Simultaneous Interest +
                         5. Successive Interest (Grantor/Grantee transaction)
                         6. [Satisfy Statute of Frauds—be in writing (can be contained in a deed)
              iii. Benefit to Run need:
                                  a. Vertical Privity not required: Can take lesser estate than A
                                       possesses, but must take some estate after promise is made
                                  b. Touch and Concern: if benefit increases value of D‘s land or
                                       enjoyment thereof; promise to pay $ may touch and concern
                                       land if substitute for an act that touches and concerns the land
              iv. Burden to Run need:
                                  a. Vertical Privity: c must succeed to B‘s entire estate
                                  b. Touch and Concern: Fair result—socially undesirable as a
                                       restraint on alienation if promisor affected as land owner,
                                       rather than in personal capacity; exercise direct influence on
                                       the occupation, use, or enjoyment of the premises.
                                  c. Notice: not an independent requirement, but may be required
                                       by various recording acts
         v. Benefit in Gross Rule: the burden will not run where the benefit is in gross
              (either the successors of both get the benefit and burden, or neither does) See:
              Caullett v. Stanley Stilwell
        vi. Remedy: personal liability for money damages—today an injunction may also
              be awarded in some cases. Potential k remedy against original promisor, at least
              where a portion of the estate has been retained.
b.   Equitable Servitude: sue for injunction (practically replaced the law of real covenants)
          i. Requirements:
                   1. enforceable promise +
                   2. Intent to bind successors
                   3. Statute of Frauds: enforced by some courts, others imply writing from
                        signature on deed and/or imply reciprocal covenants
                   4. For BENEFIT to run:
                             a. Vertical Privity: not required, generally D may take lesser
                                 estate than A possesses, but must take some estate from A
                                 after the promise was made
                             b. Touch and Concern: if benefit increases the value of D‘s land
                                 or enjoyment thereof, Promise to pay $ may touch and concern
                                 land if substitute for an act that touches and concerns the land.
                   5. For BURDEN to run:
                             a. Vertical Privity: generally not required; C may take lesser than
                                 B possesses, but must take some after promise is made.
                             b. Touch and Concern: (fairness in disguise) if promisor is
                                 affected as land owner rather than in personal capacity;
                                          Under strictest view burden will not run w/ the
                                             estate to a successor if the benefit is in gross
                                             Caullett v. Stilwell.
                        *Tulk v. Moxhay: (keep the garden) k or promise will run w/ the land if
                        the purchaser has notice of that promise
         ii. Subdivision problems: prior purchaser can sometimes enforce promise against
              subsequent purchaser w/:
                   1. In a ‗community plan‘ when one sells many different tracts, benefit
                        flows downstream, buyers make promises for the benefit of remaining
                        lots. Only the remaining lots can be P‘s if first lot (or successors)
                        breach the negative covenant
                   2. But prior purchaser can sometimes enforce promise against subsequent
                        purchaser if:
                             a. Implied Reciprocal Servitude:
                                 o Sanbourn v. McLean: (gas station in res.) court implied a
                                      reciprocal promise by the promisor and looked at whom
                                      the burden ran instead of the benefit.
                             b. Third-Party Beneficiary: (k claim) the promise was made /
                                 intended for the benefit of everyone
c.   Enforcing Covenants:
          i. Common Grantor: enforcement problems depending on if purchased b/f promise
              was made—benefit runs to subsequent purchasers after the promise was made,
              but see implied reciprocal servitude
         ii. Homeowner‘s Association: sometimes they can enforce as a third-party
              beneficiary in k law, sometimes they buy property from the subdivision
              committee after the promise was made
        iii. Shelley v. Kraemer: a State court violates the EPC of 14th amendment if it
              enforces a private restrictive covenant based on race
        iv. Fair Housing Act: statute passed under the authority of the Constitution that
              prohibits discrimination based on race, sex, familial status, etc (this is used
              today and don‘t need to interpret the Constitution
d.   Termination:
                   i. Release
                  ii. Abandon: intent to abandon + action (usually widespread non-enforcement of
                       the covenant)
                 iii. Changed Conditions: (longer period of time than abandonment) after a certain
                       point it‘s too late, Doctrine of Futility: at this point give it up b/c the covenant
                       has been unenforced for so long, can‘t try to enforce it now
D. Common Interest Communities: many restrictive covenants (becoming so widespread that the
   private entities are taking on a quasi-governmental role), common grantor sells property all w/ the
   same restrictions
       a. Condo: each resident owns interior space of unit (usually in FSA) but exterior held by all
            condo holders as tenants in common; Not joint tenants b/c no right of survivorship, no
            unities—so one person defaulting on their mortgage doesn‘t affect the others;
       b. Co-Op: title to the land is held by corp; residents own all the shares of the stock in the
            corp and control it through an elected board of directors. Residents are both owners and
            tenants—one person defaulting can result in foreclosure—Co-ops have discretion to rent
            as long as they don‘t violate the Fed discrimination laws.
       c. Gated Communities: (article in handout) sometimes the restrictions are so strict
                   i. Advantages: have neighbors who do the things you want
                  ii. Disadvantages, give up freedom, false sense of security, can get carried away,
                       become elitist.
                            VII. PUBLIC CONTROL OF LAND USE
A. Zoning
       a. Background: exercise of State police power
                   i. States can regulate if it‘s for the public health, safety, and welfare
                  ii. Enabling Act (SSZEA) State‘s don‘t do much zoning, but delegate it to cities
                 iii. Cities / Municipalities—required by the State to create a Comprehensive Plan;
                       create two sub-groups
                            1. Zoning / Planning Commission: do the grunt work and make
                                 recommendations to the cities, draft:
                                      a. Zoning / Ordinance Committee—consistent w/ the plan,
                                            provides for:
                                                  i. Uses w/in the city
                                                 ii. Sizes of buildings (area, height, etc)
                                                iii. Location of buildings (set-back requirements)
                                                iv. Series of maps of the city
                                                 v. Others: aesthetics, etc.
                                      b. Rezoning Ordinances: another method for flexibility, okay as
                                            long as it isn‘t ―spot zoning‖ (one person on the block wants a
                                            spot re-zoned)
                            2. Board of Appeals / Adjustments: hears individual appeals and cases,
                                 interjects some flexibility into the process
                                      a. Requests for Variances: generally must be:
                                                  i. Consistent w/ public interest
                                                 ii. Suffer special hardship if not granted the variance

                                     b.   Consider special Use Permits: usually left open in the zoning
                                          ordinance, but not automatic
         b.   Purposes:
                   i. Protect public health, safety and welfare:
                          * Euclid: zoning that promotes the public health, safety and welfare is
                                         ~Euclidian / Separation of Uses Zoning…separating uses on a
                                         scale from highest to lowest uses.
                  ii. Property Values / Aesthetics: it‘s okay to regulate for aesthetics if it controls the
                      property value (though some courts allow regulation on pure aesthetics even if it
                      doesn‘t affect the property values)
                       *Ladu: (crazy house) cautious expansion of use of zoning to protect
                       property values and aesthetics
             iii. Exclusionary Zoning / Household composition:
                       1. Family Values / Students: okay b/c it regulates families
                            *Belle Terre: (no >2 unrelated) promotion of family values is a
                            legitimate function of zoning b/c protects family values, youth values,
                            and the blessings of quiet seclusion and clean air
                                      ~But dissent: the standard of review should be strict scrutiny
                                      where definition of family might interfere w/ freedom of
                                      association of whom to live with
                            *But, Edmonds: court may be adopting narrower view of regulation of
                            families and more toward total occupancy limits regardless of who they
      c. Limits:
               i. St Statute: limits the scope of delegated authority
              ii. Fed Statute FHA: protects seven categories of people, but contains an exception
                  for reasonable zoning regulation of maximum occupancy
                       *Edmonds: (group home) narrowly construes the FHA exemption for
                       zoning to only total occupancy limits
             iii. Constitutional Limits: challenge on grounds that the zoning is:
                       1. Arbitrary: (get enjoinment) prohibited by Due Process Clause
                       2. Discriminatory: (get enjoinment) prohibited by Equal Protection Clause
                       3. Confiscatory: (get money) prohibited by 5th Amendment takings
      d. Challenges:
               i. Facially: under no set of circumstances is it constitutional (a bigger win, but a
                  harder one)
              ii. As-Applied: as applied to this particular piece of property, the zoning ordinance
                  is unconstitutional (easier to win)
             iii. Tests:
                       1. Rational Basis Test: any rational relationship b/w the ordinance
                            (means) and police power / public welfare (ends) is okay; the means
                            must be reasonable and rationally related to a legitimate St. Goal.
                            (easiest argument to make, most lenient to allow for zoning)
                       2. Exclusionary: if the ordinance acts not just for the public welfare, but
                            excludes people based on race/economics…there is a stricter standard;
                                 a. Strict Scrutiny: (if a fundamental right or protected class is
                                      involved) need a compelling governmental interest that‘s
                                      narrowly tailored and the method chosen is necessary (the
                                      only way) to achieve this goal.
                                             *Belle Terra: (no students) dissent: overly strict
                                             scrutiny where definition of family might interfere w/
                                             freedom of association
      e. Advantages
               i. Safety
              ii. Segregated Uses
             iii. Family Zones
      f. Disadvantages
               i. More Auto Trips
              ii. Isolate Seniors
             iii. Make mom into a chauffer b/c kids can‘t walk anywhere close enough
B. Eminent Domain: forced sale, gov‘t pays owner for the land and gov‘t gets title
      a. Background; continuum:
               i. Zoning: Police Power deals w/ authority to regulate, reciprocity (as long as it
                  protects everyone equally and reciprocally it is usually sustained under the
                  police power)
              ii. Regulatory Taking: in-between, is the zoning sufficient to constitute a taking
               iii. Eminent Domain: gov‘t outright takes someone‘s property
                 i. Just Compensation:
                         1. generally has to be Market Value, but
                         2. Doesn‘t include subjective value (been in family for x generations and
                             no amount of money enough…)
                ii. Public Use: can‘t take for any reason—must be legitimate reason related to
                    public use
                         1. Primary Beneficiary Test: okay if the primary beneficiary is the public
                                  *Poletown: (Detroit for GM) look at primary beneficiary of the
                                  forced sale/condemnation and not necessarily the public use it‘s
                                  going to—the citizens are the primary beneficiary b/c it was
                                  designed to bolster the economy and alleviate financial distress.
                         2. Public Purpose (expansion of public use test): okay as long as it‘s a
                             conceivable public purpose
                                  *Midkiff: (Hawaii transfers) even transferring land from one set of
                                  private owners to other private owners constitutes public use b/c
                                  it‘s for a public purpose
                                  *Berman: can re-develop slum land for the sale/lease of the
                                  condemned lands to private corporations
C. Regulatory Takings
      a. Authority v. Duty to Compensate
      b. Facial v. As Applied Challenge
                 i. Facial: under no set of circumstances is the Statute in Compliance w/ 5 th
                    amendment, (a harder win, but bigger one)
                ii. As-Applied: for this particular person, it‘s unlawful (injunction or
      c. Tests for Takings
                 i. Categorical Taking: [per se/ as a matter of law]
                         1. Permanent, Physical Occupation by third party (or gov‘t) is a taking
                                  *Loretto: (cable wires)
                         2. Total Taking:
                                  *Lucas: (can‘t build on beachfront) when all economically useful
                                  basis is taken, compensation is required
                ii. Balancing Test Taking three party balancing to see if the taking should be
                    compensated (established in Penn Coal)
                         1. Gov‘t Action: weigh the character of the gov‘t action
                                                *Penn Central: upholding St landmark preservation
                                  a. Nuisance Prevention: if gov‘t preventing a nuisance, it isn‘t a
                                                *Hadacheck: (brick kiln) court supports the statue even
                                                though it takes away a lot of the property value,
                                                *but see Lucas: court doesn‘t support b/c takes away all
                                                of the useful basis
                                  b. Exception: Old Dead Judge Rule: if an old dead judge would
                                        say it violates the background principles of property law, that
                                        stick was never in the bundle anyway, so gov‘t doesn‘t have to
                                        pay for it. (CL rule, not legislatively made)
                         2. Economic Effect: on the property
                                  a. Keep in mind: Parcel as a whole, conceptual severance
                                        (subsurface separate from estate), denominator parcel problem
                                  b. Must decide what out of what is taken to see the economic
                                  c. Some have mitigation schemes that O must minimize the
                                        economic impact of gov‘t action
                       *Penn Coal: (statute deprived coal co of all its property rights) if
                       regulation goes too far, it‘s a taking [origin of Regulatory Takings
                       *But See Keystone Coal: (statue required leaving 2% of coal)
                       Statute was constitutional b/c left LO w/ reasonable economic
                       value—functional overruling of Penn Coal
                       *Taho Sierra: (temporary taking) temporary moratorium on land is
                       not taking
              3. Investment-backed Expectations: expectation also deals w/ the time the
                  law was passed [a vacant piece of land has problems proving the
                  investment and returns b/c it‘s all speculative]
                       *Palazzolo: (Statute in place b/f purchased property) even if the act
                       is in place, can still bring a lawsuit for taking.
              4. Nuisance Prevention: not a taking
                       *Hadacheck: court supports even if take away a lot of the property
                       *But see Lucas: doesn‘t support for nuisance prevention if take
                       100% of the value (unless it‘s an old judge-made rule)
iii. MI says no conceptual severance and must look at the parcel as a whole, so a smaller
percentage of a taking has occurred

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Description: Auto Sublease Promissory Note document sample