"Lawful Owner Notice to Tennant"
Property, Hughes 2003 I. Ownership a. First in Tine: American Principle: first in time / first to capture b. Interference: when one use conflicts w/ use of another: i. ok if legitimate and part of a valuable occupation, ii. not ok w/ out a valuable occupation c. Possession v. Ownership i. Policy: protect ownership to preserve peace / economic efficiency 1. possession raises a presumption of ownership: a. easier to establish than ownership, and b. reduces theft / unrest. ii. Replevin: an action for the return of property wrongfully taken away iii. Trover: Common law action for $ instead of return of property iv. Bailment: rightful possession of goods by an non owner 1. voluntary: given by O 2. involuntary: accident. etc. II. Found Property a. General Rule: Finder has superior title to all others except the true owner and prior possessors. (chimney sweep example). i. O can always sue the possessor for return and the other claimants will have to sue each other to sort it out. b. Land owners: Finder vs. Land Owner (when you don’t know how it got there). i. Arguments for Finder: 1. Not attached to land 2. not an Employee or agent of O 3. no constructive possession b/c not liable to true owner for care of property ii. Arguments for Land Owner: 1. constructive possession, its on my property.. right to harvest.. 2. found by Employee 3. attached to land. c. Lost vs. Mislaid vs. Abandoned: Land Owner vs. Finder i. Abandoned: (intentionally left behind) finder wins in all JD ii. Lost vs. Mislaid 1. (minority) English rule: a. no distinction between lost and mislaid, both go with the finder. 2. (majority) American rule: a. Lost: (did not intend to put down.. dropped accidentally)-- > goes with finder b/c O won’t know where he lost it anyway b. Mislaid: O intentionally put property down and forgot to pick it up. goes with land owner: i. b/c O is likely to remember where he left it. ii. b/c expectation of reasonable care to land owner 1 iii. BUT: may discourage finder from turning it in III. Adverse Possession a. Never against the government b. Trespassers: Adverse possessors are just trespassers until the statutory period has elapsed: i. Exception: detrimental reliance.. won’t get property but might get an opportunity to remove. c. Policy: Economic efficiency i. Sleeping theory: O penalized for not asserting rights ii. Earning theory: reward A for putting land to productive use d. Adverse Possession vs. Easement by prescription i. Easement by prescription: same rules.. but non exclusive right ii. Adverse possession: gives exclusive right (what ever O had) e. Requirements : Burden of Proof on A: (general idea: notice to O) i. Actual entry giving exclusive possession: 1. exclusive possession in some area: not shared with O (can split the lot, but must have an exclusive area) a. If O comes onto area possessed by A then possession is interrupted and SOL resets 2. COLOR of TITLE: (written conveyance claiming title) a. lowers the standard in some JD: i. Partial possession + Color of title creates a presumption constructive possession of all. ii. rebuttal: if O possesses part then A only gets the area he actually possesses. b. Multiple adjacent lots: A still has to at least partially possess each. ii. Open and notorious 1. General Rule: not just a tiny encroachment: (O shouldn’t have to get surveys all the time.) 2. Exception: innocent encroachment by adjacent lot: A can have the court force a sale (condemnation) if removing the encroachment would be a great hardship for A. a. Exception But not allowed if it would greatly harm O iii. Adverse under a claim of right 1. No Permission: not adverse if given permission 2. Claim of Right a. Objective: Majority: A’s state of mind irrelevant b. Good Faith: A must have good faith belief that the property is his. c. Aggressor: must know its not yours and claim it anyway iv. Occupation must be continuous 1. Use as an Owner would: if its seasonal property (beach house) then seasonal possession is ok. a. possession must be such that a reasonably diligent owner could discover 2 b. Ex. NY requires: i. enclosure or ii. cultivation 2. Tacking: a. Voluntary Transfers: allow tacking and create privity b. Involuntary Transfers: theoretically the first A has a right to take action against the non owner who dispossessed him (judge will probably dismiss) i. A can tack his old time, but not the time of the dispossessor c. Interest Possessed: A takes the interest of the O that existed at the TIME HIS POSSESSION BEGAN: i. If A takes LE from O and then O dies, A does not own FS interest. d. Disability: The only disabilities that count are the disabilities that existed at the time that A’s possession began i. ex: statute: longer of 20 years or 10 after disability ends. ii. death or sale terminates the disability and A can tack. f. Personal Property: Theft vs. Entrustment i. Theft: (involuntary) 1. Common law rule: thief can never get or convey good title, but he can convey possession for the purposes of adverse possession. 2. Normal Adverse possession rule: SOL begins running at the time the possession it taken from O 3. Discovery rule: a. If O makes REASONABLE EFFORTS to locate the property then i. SOL only begins running when O 1. discovers the loss AND 2. Knows who stole it b. otherwise the harsh normal rule applies ii. Entrustment: (voluntary) 1. Rule: VOIDABLE TITLE can be conveyed to a GOOD FAITH PURCHASER FOR VALUE and create good title. a. Voidable title: is obtained when O VOLUNTARILY conveys property to a 3rd party. i. Voluntary: still vol. even if fraud involved. b. Good Faith Purchaser for value i. Good faith: no knowledge of defective title ii. For some value: no gifts, but FMV not required c. Recovery: O can sue the person to whom he entrusted the party for $, but can’t sue the 3rd party for return. 3 d. Policy: O should be careful when he entrusts, and 3rd party had no reason to know. so burden should be on O. IV. Transfer by Deed a. Definition: a document transferring land, (basically a K), most states have statutory forms and writing your own can be dangerous b/c language funny. b. 5 parts to a deed i. Premises 1. granting clause (evidence of intent to convey) 2. consideration: many JD require at least ceremonial $ ii. Habendum or Tenedum Clause: type of estate being granted iii. Warranty: representations from O to A (none required) 1. Present covenants a. Sesin: right to possess b. Right to Convey: c. Covenant against Encumbrances: no one else with right to property: liens etc. 2. Future Covenants a. Quiet Enjoyment: no one with paramount title till disturb b. Further Assurances: O will remedy any future title defect iv. Testimonial: recital of execution: “yes, I am giving this” v. Acknowledgment: not required at common law 1. almost always used in practice: b/c required to record. 2. Must record deed to be enforceable against 3rd parties. a. O could sell more than once if not recorded. c. 3 general deed types in the US i. General Warranty: ALL CLAIMS (most desirable to purchaser) 1. seller liable buyer for all lawful title claims ii. Special or Limited Warranty ONLY CLAIMS THROUGH SELLER 1. seller guarantees against title claims made through seller iii. Quit Claim: NO GUARANTEES 1. “I give you what I have, if I have anything.. no promise” d. Title Insurance: every intelligent buyer gets it. V. Estates in Land a. Free Hold Estates i. Fee Simple: highest possible estate 1. Words of Limitation: Modern default: you must make it very clear that you don’t intent to convey a full FS interest to convey something else. ii. Life Estate: measuring life not changeable iii. Fee Tail: passes to Issue of A, if no issue reverts to O 1. abolished in most states: 2. even if sold still measures by A’s life and issue b. Inheritance: (order of allocation matches order here) i. Beneficiaries 4 1. HEIRS: defined by laws of intestate succession (can’t be known until death): remainder “to heirs” is contingent (unascertained until death) 2. SPOUSE: all states give her something if living 3. ISSUE: Children and grandchildren (includes adopted and illegitimate) a. but not their spouses. if child dead it goes directly to grand kids b. ex. Kid 1 (alive) ½, Kid 2 (dead)-> grand kids (split ½ equally). 4. ANCESTORS: parents 5. COLLATERALS: horizontal blood kin (neither descendants or ancestors) 6. ESCHEAT: if no will and no kin then goes to state ii. Rules of construction 1. GIVE ALL AWAY: when in doubt favor an interpretation of the will that allocates everything 2. Fee Simple: FS unless clear intended otherwise a. free alienability of property favored/ c. Defeasible vs. Remainder / Reversion (not emphasized in class. i. Defeasible Estates: Any Free hold estate can be a defeasible estate: 1. Types a. FS Determinable i. Automatically divests ii. Language “so long as”, “while” “until” iii. If Condition becomes impossible then vests FS iv. POSSIBILITY OF REVERTER to O b. FS Condition Subsequent i. Affirmative Step required after condition met ii. Language: “but if”, “upon condition” iii. RIGHT OF REENTRY to O c. FE Subject to Executory Limitation i. Automatically divests holder ii. NOTHING to O ii. Remainders / Reversion : can only follow Life Estates of Fee Tail. 1. use process of elimination: if its not a defeasible estate then its a remainder (if created in Transferee) or a reversion (if created in Transferor) d. Restraints on Alienation / Free alienability of property i. General Rule: unreasonable restraints are void 1. ABSOLUTE: Restraints of any type are unreasonable when they preclude transfers.. violates policy of free alienability of property. ii. Three types of Restraints: 1. Disabling: attempts to transfer just null and void 2. Forfeiture: attempt to transfer results in AUTOMATIC transfer to title to O or 3rd party 5 3. Promissory: covenant not to transfer, O can prevent transfer w/ injunction or sue for $ after transfer occurs. iii. Unreasonable restraints: (courts Split) 1. Language: restraint only void if language absolutely prohibits transfer 2. Effect: even if language doesn’t prohibit, if the effect is to preclude transfer then its void. e. Waste: failure to properly use or maintain property i. Economic Waste: not traditionally allowed. failure to put property to its highest and best use. ii. Affirmative Waste: (voluntary) active destruction of property iii. Involuntary Waste: (permissive) omission or neglect, failure to insure or maintain. iv. Non Economic any permanent change to property, even if increases FMV 1. traditional: Remainder man has a right to the Identical VI. Future Interests a. Are a current right to something: i. can be condemned or sold: valuation may be difficult: competing methods 1. Possessor: improvements + damages to remaining property + value of interest 2. Remainder holder: total (FS) value – value of defeasible interest. ii. Transferability: even in JD’s where reverter / right of reentry are not transferable, they can always be transferred to the owner of the possessory estate (free alienability of property.. then becomes FS absolute) b. Mandatory Pairings i. General types: 1. Defeasible estates : can follow and FS estate a. FS determinable -> possibility of reverter (only to O?) b. FS Condition Subsequent -> right of reentry (only to O?) c. FS Subject to an Executory Interest -> EI in (3rd party only) 2. Remainders (T’ee) / reversions (T’or). can only follow LE or fee tail estate ii. TRANSFERORS: Future Interests retained Transferors 1. Possibility of Reverter : determinable estate given 2. Right of Reentry: Condition subsequent 3. *Reversion: (find by process of elimination) a. *(would be remainder if created in 3rd party) iii. TRANSFEREES: Future interests possible in transferees 1. Remainder: (follows LE or Fee tail only) (vests only at the natural termination of the preceding estate) a. Characteristics: i. NEVER DIVESTS preceding estate ii. must be CREATED in Transferee (can be later transferred to O) 6 iii. Created at the same time the prior possessory estate is created iv. Can only follow LE or FEE TAIL b. Types (must be one of these two) i. Vested: allow immediate possession at termination of prior estate 1. ASCERTAINED: given to identified persons (can still be subject to open) OR a. VR subject to Open: one holder ascertained, but more might be born. 2. NO Condition precedent: no conditions must be met other than the termination of the preceding estate ii. Contingent Remainder: possession is contingent on a condition other than the termination of the preceding estate. 1. ALWAYS PAIRED WITH A REVERSION 2. Characteristics: a. to Unascertained persons: (ex.. heirs not known till death) OR b. Condition Precedent: some condition must be met before it can vest. 3. Language: (contrast with executory interest) a. Grant and limit in the same clause b. “to A so long as he survives B” 2. (can follow any estate) Executory Interest: Divests another estate (cuts it short when a condition is met) a. Grant and limit are in separate clauses: i. “to A, BUT if x happens then to B” iv. Remainder vs. Reversion 1. Remainder: always created in A 2. Reversion always created in O, and will ALWAYS exist when a contingent remainder created 3. Two types a. Shifting: divests a transferee b. Springing: divests the transferor VII. Transferability of Future interests a. VR vs. CR: Common Law Rule i. VR: transferable any time. ii. CR: not transferable during life (but inheritable) 1. exception: to the possessory estate. (creates FSA) b. Destructibility: (only contingent remainders can be destroyed) 7 i. Common law rule: if CR condition not met by the end of the prior possessory estate (even if LE terminated early) then it was destroyed and reverted to O 1. Most states have abolished c. Merger: i. If LE and next vested estate are in same hands then intervening CR destroyed. (works even if there is no intervening interest) 1. A REVERSION interests counts as a vested estate. d. Rule in Shelly’s Case i. Applies to Remainders but not EI ii. Rule 1. If a single document gives a LE and creates a remainder in the LE holder’s heirs (not issue.. just heirs) and LE are both Legal (normal) or both equitable (in trust) then the remainder becomes a remainder in FS held by the LE holder. a. note it does not destroy any intervening estate(s) if present.. it just gives the LE holder the remainder rather than his heirs (remains contingent on A having identifiable heirs). iii. Policy: marketability of property “Heirs” can’t be ascertained until death, so that interest couldn’t be bought and consolidated until death because no one owns it until then. e. Doctrine of Worthier Title: Applies to all FI. i. abolished in most states ii. Rule: a grantor can not create a future interest in his own heirs. f. Rule Against Perpetuities: i. applies only to Contingent remainders and EI but not to vested remainders 1. does apply to VR Subject to Open ii. Apply to each element of the transfer iii. Common law Rule 1. Transfer invalid unless CR or EI or VR (open) must vest if at all, not later than 21 years after some life in being at the creation of the interest. a. VEST: i. CR / VR Subj to open: condition precedent removed so that it will become possessory at the end of the preceding estate ii. EI: only vests upon becoming possessory b. Validating life (within 21 years of): 4 types i. preceding life tenant 1. “to B when A dies” ii. taker of the contingent interest 1. “to A for life, and to B if he reaches 30” iii. any one who can affect the identity of the takers 1. “to A’s children when A dies” iv. any one who effects the condition precedent 1. “to B if X wins the lottery” 8 g. Uniform Statute against perpetuities: wait and see attitude i. if it vests within 90 years of creation its ok, otherwise, invalid ii. allows closer attention to grantor’s interest. VIII. Concurrent interests a. Features common to all 3 types i. undivided interest ii. can’t exclude the other from any part. b. Types i. Joint Tenancy (JT) 1. Distinct features: a. Right of survivorship: not inheritable b. 4 unities required 2. 4 unities a. Interest: equal % interest b. Possession: equal non exclusive right c. Time : take interest at the same time d. Title: under the same instrument 3. Creation a. Traditional rule: favored JT b. Modern rule: favors TC: must be very clear to create JT i. even saying to A and B for their joint lives with remainder to survivor.. not enough: creates LE in both with CR. 4. Severance: can be severed by unilateral action of either JT a. severed when any unity destroyed: become T in Common i. Mortgage: 1. Old title theory: broke unity.. passed title 2. New title theory: not until sold at foreclosure ii. Agreement between JT to sell to 3rd party 1. unity not broken until actually sold, but 2. Surviving JT liable to estate of other under K law b. Partition By court order: (in kind if possible. see below) ii. Tenancy in Common (TC) 1. Unity: only one: unity of possession undivided right to possess whole w/ out exclusion a. inheritable, unequal % ownership ok, favored by modern rules 2. Tenant can ask court for partition iii. Tenancy by Entirety (TE) 1. Usually only applies to real property 2. no partition allowed 3. Unities: 9 a. like JT but has a 5th unity: Marriage. 4. Unilateral Severance / Debts: a. Early common law: creditors could attach H but not W b. Married Women’s property Act: (H and W equal) i. Majority: neither can unilaterally create debts that attach ii. Minority: Either can unilaterally create debts that attach c. Actions / Rights: i. Partition: allowed with all tenancies other than entirety 1. will always be granted 2. Default Rule: IN KIND, unless a. Economic or Physical problem.. more likely with multiple tenants. 3. Against Co or Joint tenant: partition the whole property a. possible to just sell a lease 4. Against Lessee: partition leased portion a. Kind / Sale.. if sold only sell lease of same length ii. Accounting / Rent: entitled to pro rata share of 3rd party rent 1. Lease to third party: valid for CO or JT can’t give more than they owned a. RENT: all co tenants entitled to participate in a proportionate share: 2. co tenants not liable for rent unless commit ouster iii. Ouster: refusal to allow co tenant entry, get FMV 1. General rule: not liable for rent to co tenant unless guilty of ouster a. Against Co Tennant: get ½ of $ received b. Against Lessee: get ½ of FMV (regardless of actual) iv. Waste: all the normal forms... traditional and economic.. 1. Traditional: (estopped by reliance) can’t sue a lessee for waste if you slept on your rights and allowed him to build an expensive structure on the property. v. preservation: if one Co tenant pays the taxes or mortgage 1. majority: entitled to pro rata contribution 2. minority: if one tenant is the sole occupant then he is not entitled to contribution from non possessory tenants vi. Repairs: not entitled to contribution but to return of cost when sold, partitioned or accounting done vii. Improvements: no right to contribution, reimbursed only to the extent that profits cover the cost, once the cost is covered split the profits 50/50 IX. Marriage a. Divorce i. Is a degree property? 1. Majority: not property, but could recover support given to the extent of: SPLIT a. GROUP 1: Property currently owned OR 10 b. GROUP 2: Reimbursement for support given even if it exceeds the value of property currently owned 2. Minority: increased earning potential is an asset allocable to wife. ii. Community Property vs. Equitable Division 1. Community States: Spouse owns property 50/50 with husband 2. Equitable Division States: judge decides what is fair b. Death: (inheritance) i. Common law: (minority) 1. Dower: (still exists) a. Fractional Interest: wife entitled to some fraction of each piece of land owned by H at his death. b. All Inheritable property: anything owned other than property held in JOINT TENANCY i. no children required 2. Curtsey: (may be extinct) a. Life Estate: wife entitled to LE in all inheritable property b. Children Required: Must give birth to a live child ii. Elective Share: majority 1. if the surviving spouse isn’t happy with the allocation by will she can elect to over ride it and take a statutory % in FSA X. Lease Hold Estates a. Types i. Term of Years 1. Fixed Length a. Must be calculable at the outset b. Any length c. St. of Frauds Applies to Lease over 1 year 2. Automatically Terminates at the End of term a. Neither LL nor T can unilaterally lengthen b. death does not terminate ii. Periodic Tenancy 1. Renewable Incremental Length a. ex. month to month 2. Automatically renews at the end of term 3. Notice: required to terminate: either LL or T a. Common law i. Year to Year (or more) Leases require 6 months notice ii. Less than year: requires the lesser of 1. 6 months or 2. the period of the lease iii. Notice that is too short applies to the next period. 1. liable for difference b. Death does not terminate iii. Tenancy at Will: (difficult to create accidentally) 1. parties can terminate at any time 11 2. created when there’s no agreement and the court can’t find a way to imply one 3. Death of either terminates iv. Tenancy at Sufferance: (not really a leasehold) 1. created when T remains after termination of lease by LL b. Periodic v Term of years: courts will look at payment terms, etc. c. Holdover Tenants i. LL has two options when T stays beyond the lease term 1. EVICT: Treat as trespasser and move to evict a. trespassers liable for rent at FMV 2. HOLD OVER: treat T as a holdover and renew the IMMEDIATELY PRIOR LEASE a. limited to 1 year. b. Liable for K rent rate. ii. LL’s Election: 1. LL must accept holdover to form it, T has no control 2. LL must chose in a reasonable period of time.. 3. LL can’t change after they chose. a. If elect to evict and then try to hold over it just forms a month to month b/c there’s no prior lease to hold over. XI. Legal v Actual Possession a. Legal Possession: i. Freedom of K: you can into anything ii. Default Rule in all JD’s: express / implied promise that LL has a legal right to convey, and that no one with superior title will claim against T b. Actual Possession: Default rules i. (American) Majority Rule: no promise 1. Traditional: notion of lease as conveyance (caveat emptor) 2. LL has duty only to defend against people with a claim of title 3. Policy: trespassers are committing a tort, LL should not be responsible for the independent tort of another. 4. T still owes rent even if can’t possess ii. Minority (English) Rule: Duty to deliver on first day 1. Modern: notion of lease as a K 2. LL must deliver actual possession on 1st day 3. Policy: a. LL in better position to ensure possession b. T has no cause of action until lease begins iii. you can K into anything. XII. Subleases and Assignments a. Privity: required before parties can sue i. Privity of Estate: 1. Sublease: doesn’t terminate privity of possession a. T1 gives T2 less than all of the remaining lease, and retakes from T2 at the end of T2’s lease.. i. so that LL retakes from T1 12 2. Assignment: terminated privity of possession a. T1 gives T2 all of his remaining lease and i. LL retakes from T2 b. Minority: look at intent rather than technical assignment (not emphasized) ii. Privity of Contract: (by written agreement) 1. T can unilaterally take on liability to LL, but (3rd party beneficiary) 2. T can not unilaterally K out of liability to LL iii. Subrogation: if a party is sued for rent, they can then sue down the chain of assignments / Sublease’s until the defaulting party is reached. b. Assignment with LL permission i. Property theory: Majority: traditional 1. ANY REASON: if LL reserves the right to refuse assignment he can refuse for any reason.. even if its just to demand more $. ii. K theory: Minority: modern 1. implied covenant of good faith and fair dealing under the K 2. General idea: a. Commercial reasons: allowed to refuse if it would hurt LL economically, for commercial reasons i. requires that LL only consider the property under negotiation (see limited exceptions below) b. Personal / extortion: not allowed to refuse just to get more $ (should have bargained for in original lease) or for reasons of personal preference. 3. Same building: vs. difference building a. sometimes: ok to refuse transfer to party negotiating who is currently negotiating with LL for another part of same building XIII. Land Lord / Tennant - Relations a. Waste i. General Rule: T has a duty not to commit any type of waste 1. includes improvements. (T not allowed to change property) 2. Repairs: a. T required to make ordinary repairs b. Major repairs / rebuilding: LL responsibility b. Eviction Self Help (disfavored) i. Common law rule: (minority): self help allowed if 1. ENTITLED: LL legally entitled to possession AND 2. PEACEFUL: means of entry must be peaceable a. careful: many JD’s interpret narrowly ii. Modern Rule (majority): self help never allowed 1. must use summary court proceedings c. Duty to mitigate i. Majority: (traditional): no duty to mitigate when T breaches ii. Minority: (must mitigate) usually only applies to residential leases 13 1. Burden of proof on LL: must show that he treated the place like part of his vacant stock. 2. Damages: a. BACK RENT: all past due rent b. FUTURE RENT: difference between FMV and K rent i. but don’t get if accept surrender. c. no compensation for lost volume d. LL keeps any profit beyond expectation (if he released for more than the K price with T) 3. Surrender: by T a. LL can chose: T still liable unless LL accepts surrender b. Acceptance can be express or implied c. LL can change his mind if he rejects but not if he accepts.. i. once LL accepts surrender T no longer liable for future rent. XIV. The Evolution of LL responsibility a. Constructive Eviction (Covenant of Quiet Enjoyment): TRADITIONAL i. Lease as property. ii. Covenant: triggered by a violation of the covenant of quiet enjoyment 1. “LL shall not seriously interfere with premises by act or omission” 2. covenant can be express or implied by law iii. Common law Rule: 1. Notice: LL must be given reasonable notice and time to fix a. latent vs. patent (notice presumed) defects. 2. Abandonment: T must abandon in a reasonable time a. difficult for on T : (contrast with Habitability) b. Policy: acts as proof that T was evicted. 3. Interference must be substantial (permanent defect) a. impairment need not be constant but must be due to a permanent defect. (ex. flooding when it rains) 4. T’s Knowledge: T must not have known at the time of the K a. But, if LL promised to fix then ok for T to know. iv. Independent vs. Dependent Covenants 1. Common law rule: Covenant of quiet enjoyment and covenant of T to pay rent are not dependent 2. Modern rule: their connected v. LL and T duties 1. Common Law: Caveat Lessee: T had a duty to inspect premises and accept or reject. a. EXCEPTIONS: @ common law i. Short term lease for furnished dwelling 1. LL required to keep habitable 2. LL has a duty to disclose Latent defects of which LL was aware ii. Common areas used by all tenants iii. Beginning to fix 14 iv. No Fraud allowed 2. LL duty to control others: LL has duty if a. In his control: ex. employees, tenants: b. Crime: generally no duty unless i. Common area: must take reasonable steps ii. Beginning to act: reasonable care b. Partial Eviction: i. Actual: T relieved of duty to pay rent for any part of premises 1. logic: Defaulting LL can’t apportion his wrong ii. Constructive 1. Majority: T can pro rate rent 2. Minority: relieves all duty to pay c. Illegal lease (no abandonment required) i. General rule: if the lease violates the law at its outset then the K is unenforceable 1. Mitigating factors a. Illegality must exist at the time the lease starts b. Not a Deminimus violation c. FMV: T still liable for FMV rent for time in occupancy i. never more than K price d. Implied Warranty of Habitability: No Duty to abandon i. Almost all JD recognize for residential leases 1. Implied 2. Can not K out of it ii. Warranty 1. Major Habitability Problems: property uninhabitable then warranty violated: (LL liable even if its an act of God) 2. minor problems: (not enough to make it uninhabitable) a. Habitability related problems: i. some courts will allow T to withhold part of rent. ex. broken water heater. b. Un related to habitability: i. Caveat lessee applies if not explicitly agreed to iii. Lease as K (Habitability covenant) vs Lease as property (caveat lessee) 1. Lease as property: traditional: caveat lessee 2. Lease as K: modern, more power to T a. Gives T full range of K rights, and abolishes caveat lessee with respect to habitability b. Notice: T must give LL reasonable notice and time to fix i. Latent vs. Patent (no notice needed) defects c. Rights of T: i. DO NOT HAVE TO ABANDON ii. T can withhold part / all rent and remain on premises. (liable for FMV if they remain) 1. court may find very low FMV. iii. If LL doesn’t fix in reasonable time 15 1. T can fix and deduct from rent OR 2. T can terminate in a reasonable time d. Damages i. Dimuition in value: K paid – FMV ii. Discomfort and annoyance iii. Punitive damages: allowed if LL very bad e. illegal lease: premises uninhabitable at the start of the lease may violate housing codes so that the lease is illegal and unenforceable. XV. Other sorts LL problems a. Tort Liability: of LL i. (obvious) Patent defects: LL not liable for obvious defects ii. (hidden) Latent: not easily discoverable by T 1. LL actually Knows or reasonable should know a. Liable. (ex. LL knows about dangerous balcony) 2. LL doesn’t know and no reason to LL to know a. not liable (ex. freak accident) b. Retaliatory Eviction: i. LL can’t evict T in retaliation for reporting a violation 1. Burden of proof on LL 2. LL can still evict, but LL must prove a legitimate basis for eviction c. Discrimination: i. Civil Rights Act: 1. Applies to: a. Types of transactions: i. sale or rental of all property (not just housing) b. Groups: Race / ethnic only ii. Fair Housing Act: 1. Applies to: a. Types of transactions i. DWELLINGS ONLY ii. Advertising iii. EXEMPT GROUP: Owners of 3 or fewer homes who don’t use a broker or advertise b. Groups: i. Race / ethnic, ii. Gender, iii. Family Status (kids only) 1. marriage /divorce or sexual orientation not protected. iv. Disability: Includes AIDS 1. Only protected if they actually have a disability: ex. if LL turns down Gay people because he is afraid of AIDS, then he’s only liable if one of them actually has AIDS. 2. Burden Shifting Structure 16 a. Case: P must make prima facie case i. Protected: member of a protected class ii. Qualified to rent and denied iii. LL INTENT not required b. Reason: D must then offer a non discriminatory reason c. Pretext: P must then show that the reason was just pretext XVI. Servitudes a. Definition: limited, non possessory interest in property which bind or burden one piece of property for the benefit of another. b. Types: i. Easements: 1. positive or negative 2. Gross or Appertant 3. express or implied ii. Profits iii. Licenses iv. real Covenants v. Equitable servitudes XVII. Easements a. Positive : gives a right to enter another’s land i. An estate in land, 1. Can be FS, LE, CR... etc. ii. Can be Gross or Appertant 1. Gross: a. interest in servient estate benefits a person (no dominant estate) b. can be transferred apart from any piece of land 2. Appertant: a. interest in servient estate benefits a dominant estate i. can’t use to benefit another estate b. Must be transferred with the servient estate and only iii. Must be written 1. St of Frauds exceptions a. Fraud in fact b. Partial performance c. estoppel 2. Special Easement Specific exceptions (see below) a. Easement by implication b. easement by prescription (adverse possession) b. Easement vs License: i. Easement is not revocable 1. (unless implied by strict necessity and necessity ends) ii. License is usually revocable 1. Exception: may become irrevocable if a. coupled with another interest in land (ex profit) OR 17 b. ESTOPPEL: reliance on your license: if license given and improvements made: then not revocable. i. But may become revocable if the reason for the irrevocability expires. iii. Express 1. Reservation of 3rd Party easements (reserved in favor of a third party) a. Common law rule: reservation not allowed, must give directly to the party in a separate deed. (easy to satisfy) b. Modern Rule: third party transfer allowed. iv. Implied easements: 1. Quasi Easement: (implied from an existing use) a. One owner: for all properties at time of creation b. Necessity required at the time of creation i. American Rule: reasonable Necessity 1. Easements by reservation (to owner) and easements by grant (to another party) are treated the same.. consider the intent of the parties ii. Minority (English Rule): 1. Reservation to owner: strict necessity 2. Grant to anther: reasonable necessity 2. Easement by Necessity: (need for access) a. One owner: for all properties at time of creation b. Strict Necessity: must be more than mere convenience c. no existing use required v. Easement by condemnation: 1. statutory, dominant estate must pay 2. Easement by: necessity / prior use vi. Easement by prescription: adverse possession 1. burden of proof on dominant estate Easement Appertant: I. Extensions: generally can’t be extended beyond dominant estate regardless of burden a. Legal remedy ($): allowed even for minor infractions / extensions b. Equitable remedy: (injunction) requires substantial need and reliance may bar it. II. Subdivision: every inch of the dominant estate is benefited equally, a. the reasonable intent of the parties at the time the K was formed defines easement Negative easements: I. English common; disfavored, limited to 4 types: light, airflow, lateral support, water flow: never created by prescription II. American Common law; more than 4 (ex. view), prescription allowed, Private Nuisance: unreasonable interference with use and enjoyment, balance utility, expectations, public policy. 18 Covenants: I. Promises with respect to land: II. run at law $ and injunction, run at equity then just injunction allowed Run at law Run at Equity Remedy? $ or injunction injunction only Creation by implication? no yes Covenants that Run at law I. $ or injunction, can’t be implied, II. Privity: can be of K (only between original parties) or of Estate (see below): III. Privity of estate: a. Possible requirements i. INTENT: original parties must intend for the covenant to run ii. TOUCH AND CONCERN: must relate to LAND OWNERS as to benefit and burden iii. HORIZONTAL PRIVITY: not all JD require 1. exists if at all only between original parties 2. English rules: H privity seldom existed outside of LL T relation iv. VERTICAL PRIVITY: not all JD require 1. benefited and burdened parties must take some interest from the person who made the covenant. 2. JD’s Split: need to take entire interest vs. part is ok a. Tendency: higher threshold to be burdened than benefited. Covenants that Run at Equity I. injunction only (no $), can be implied, II. NO HORIZONTAL PRIVITY REQUIRED III. Require a. INTENT: of parties for covenant to run b. TOUCH & CONCERN: the LAND OWNERS with respect to benefit and burden c. KNOWLEDGE: (actual or constructive) in the party the covenant will be enforced against: can be put on notice by the surrounding neighborhood. IV. Formation by implication a. RECIPROCITY: i. if ONE OWNER: sells lots with a development scheme in mind then he can be bound with respect to later lots. ii. NOTICE: still required to enforce against buyer 1. INQUIRY NOTICE: condition of neighborhood can put you on 2. if you don’t look then you’re deemed to have CONSTRUCTIVE NOTICE: fact specific. 3. buyer can be restricted even if the covenant wasn’t in his deed. V. Enforcement of equitable servitudes: courts have wide latitude even if a case doesn’t fit the rule exactly: ex. development association didn’t actually own land. VI. Racial Discriminatory Covenants: not enforceable, fair housing act further restricts 19 Defenses to covenants I. Equitable Defenses a. Change in circumstances: such that the purpose is no longer possible b. Acquiescence: allowing non conforming uses to the extent its waived by all c. Unclean Hands: individual owners in violation can’t challenge a violation II. Legal defenses: a. Merger: when all encumbered property is purchased by 1 O, the covenants merge i. unless O expressly manifests an intent not to merge b. Agreement: requires all O unless expressly different c. Express terms: can give an expiration date d. Statute: can mandate a date e. Abandonment: rampant violations such that on one intended to enforce Nuisance I. Substantial interference with another’s use and enjoyment II. Intentional v. Unintentional a. Intentional Act: D knows or should know interference unreasonable: 2 tests: i. Thresh hold: effect on P what should he have to endure ii. Balancing: Utility of D’s act vs. harm to P b. Unintentional: torts standards... reckless, ultra hazardous.. III. Damages: $ vs injunction: tests a. Balance of Equities: D / P / public: give injunction if it doesn’t hurt public b. Statutes require injunction, but court may grant injunction and force P to buy it o IV. Public V. Private Nuisance: a. Public: damage to pub. at large, different in degree, P must show special damage 1. DON’T need to OWN PROPERTY, INJUNCTION only b. Private: affects that person’s property, must be an owner, $ or injunction V. Coming to the nuisance: limited: must be: first there and expansion not foreseeable, new development that comes to the nuisance may have damages reduced/ waived. Takings I. Valid Public Purpose: Rational, transfers to private ok, doesn’t have to work II. When is there a taking: a. Per Se Rules: i. permanent physical occupation ii. Police Power iii. All economic value: unless in background common law, passage of title after law passes doesn’t necessarily put in the law in the background 1. Conceptual severance: treat entire lot as one bundle of rights b. Balancing test: Penn Coal: its a taking if it goes too far. i. Penn. Cent. 1. Impact on investment backed expectations 2. Reciprocity: does regulation benefit P by burdening others 3. Diminution in value of property 4. Mitigating fctors: given anything in return? III. Types of Takings: physical, regulatory, exactions (just banned no compensation). 20 Exactions I. Def: fee charged by gov $ or in kind, for permission to change the use of a property II. Requirements for a constitutional Exaction a. Substantial Legitimate Public Purpose b. Essential nexus: between restriction and purpose c. Roughly Proportional: burden created by new use must balance w/ exaction III. Damages: exactions are just banned. the gov can chose to pay and proceed but never trigger temporary takings. Temporary takings I. Inverse condemnation: challenging a regulation as a taking a. can’t force city to buy, but you can force to compensate for temp taking II. Price if bought: immediately before the taking. exclude increase due to taking law Zoning Regulations I. Cumulative: some uses allowed any where II. Regulates: use, height, area/density III. Grand fathering: must allow unless use discontinued IV. Constitutionality: a. Rational basis review: ok for it to be a bit over inclusive b. PUBLIC interest: zoning power derived from state, so local laws must benefit all c. public interest: preserving property values through aesthetic zoning can serve the public interest. (burden on P vs. benefit to people), must not be too vague d. Village of Belle Terre: US Supreme (limited to 2 unrelated or any # related) i. Rational basis review. e. City of Edmunds: (US Supreme): Disabled group : (“no more than 5 unrelated”) i. FHA Rule: 1. Pure # limit: (health and safety) FHA doesn’t apply 2. Family and #: FHA does apply: a. Must make “reasonable accommodation” i. if accommodation possible then make exception ii. if not possible then discrimination permitted f. (State Supreme): Mount Laurel: (no room for poor people) ok to limit amount / location of low income zoning, but must have your “fair share” for the region. g. Pre Existing use: made illegal by new regulations i. Amortization does not prevent a taking, ii. Amortization prevents a taking if “reasonable period of time” allowed to secure return on investment. h. Variances and Special Exceptions i. Variance: an exception made to a zoning General Rule 1. Must grant to prevent a taking if Undue Hardship: 3 rules a. didn’t create problem yourself b. Unable to sell or buy at FMV to fix problem c. no substantial impact on goal of ordinance ii. Special Exception: no general rule, nothing allowed without case by case approval: approval is called a “special exception” 21