Property Outline Statute of Frauds

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Property Outline Statute of Frauds Powered By Docstoc
					                                    PROPERTY OUTLINE
      Landlord-Tenant Law
      a.      Lease
      b.      Implied Warrant of Habitability
      c.      Landlord Liability and Responsibility
      d.      Assignment and Sublease
      e.      Eviction/Abandonment/Surrender
2.    Personal Property
      a.      Wild Animals/Found Property
      b.      Bailment
      c.      Gifts
      d.      Fixtures
3.    Estates in Land
      a.      Fee Simple Estates
      b.      Future Rules
      c.      Concurrent Interests
      d.      Other Types of Arragements/Marital Interests
4.    Easements
      a.      Creation of Different Types of Easements
      b.      Scope/Maintenance/Transferability of Easements
      c.      Termination of Easements
5.    Licenses
6.    Doctrine of Real Covenants
      a.      Creation and Different Types of Covenants
      b.      Termination of Covenants
7.    Modern Real Estate Transactions
      a.      Brokers
      b.      Statute of Frauds
      c.      Marketable Title
      d.      Risk of Loss
      e.      Financing/Sale K
      f.      Recording Systems/Wild Documents
      g.      Statutory Developments
      h.      Adverse Possession
      i.      Title Insurance
8.    Deeds
      a.      Covenant of Title
      b.      Warranty
      c.      Delivery
      d.      Merger
9.    Condition of Premises
      a.      Implied Warranty
      b.      Requirement to Disclose
10.   Attributes of Landownership
a.   Right to Exclude
b.   Freedom of Alienation
Constitutional Protection of Property
In C, property cannot be taken by the govt w/o compensation.
!       WJF Realty Corp. v. State (1998, p. 5)- “regulatory taking” of property. Regulation takes
        property if it destroys the value of it.


LANDLORD-TENANT LAW
Lease
!     Transfers the right to use property for a finite period of time.
      "       Ownership stays w/ landlord. Landlord gets right back at end of lease.
      "       Landlord retains right that tenant does not get.
!     Usually a commercial arrangement w/ payment of money
!     Statute of Frauds- lease must be in writing if over a year (or ones that end more than a
      year from when they were made).
      "       Courts can enforce the first year of an oral lease.
      "       Even if it is not in writing, the tenant is not a trespasser. Notice must be given to
              kick them out anyway.
!     Leases cannot be cancelled w/o notice.
      "       Common law- must give 1 month notice, starting at the next rental period (unless
              statute says otherwise).
      "       Written notice is practically better.

!      You can orally terminate a lease during the one year period of statute of frauds but you
       cannot orally modify it, b/c disputes are more likely w/ modifications. Gee v. Nieberg
       (1973, p. 18).

Land availability at beginning of lease (Hannah v. Dusch, 1930, p. 22)
Jx’s are split between the following two rules (Hannah court chose American rule):
!       English Rule: landlord has a duty to make property available at beginning of the lease.
        "       Actual possession must be available at the first day of the lease, otherwise the
                tenant can sue the landlord.
        "       Followed by universal L-T rules for residential tenants.
        "       Only must be available on first day of lease. Not landlord’s duty to get interlopers
                out who come in after the first day of the lease.
!       American rule: tenant has a legal right of possession and not an actual right of possession.
        "       New tenant should sue holdover tenant and not landlord (who did nothing wrong).
!       This may be contractually modified (e.g., tenant does not have to pay rent if there is
        holdover tenant, landlord must pay for alternate interim housing in interim)

Quiet Enjoyment is the ability to use property that was promised in the lease w/o interference
from the landlord. Camatron, 27.

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!      Implied protection from landlord, not from 3p interference.
!      Tenant has a right to undisturbed possession of leased space.
       "       If the landlord cuts off use to part of lease, it is a partial eviction.
       "       In this case, proposed renovation constituted a 1% reduction of total space but a
               25% reduction of office space. This was not de minimus and was enough for a
               partial eviction, so the court prevented the proposed work.
!      Landlord is free to reconfigure public space, but not private leased space.
!      If landlord reconfigures w/o permission- All or Nothing Rule- stop paying rent until
       landlord returns the space. Small change can affect entire value or property.
!      If landlord (wrongfully) totally evicts, stop paying rent, sue for damages b/c of no access.

Constructive eviction- Automobile Supply Co. v. Scene-In-Action Corp. (1930, p. 32)
!      Actions by a landlord that amount to an eviction by not allowing parties to fully use space
       "       Landlord breaches duty
               -       Does not do what he agreed to do.
       "       Does not allow quiet enjoyment of property by tenant (must be “grave &
               permanent”)
       "       Tenant must move out in a reasonable time.
               -       No set time. Look at situation of tenant.
!      The tenant must move out. If the court does not agree that there was a constructive
       eviction, the tenant owes back-rent.
!      Landlord not responsible for actions of 3p’s unless lease says otherwise. Landlord must
       do something to make property untenable. Net Realty Holding Trust (p. 37).
!      Tenant cannot claim constructive eviction for problems that he should have expected.

Condition and Maintenance Requirements of Leased Premises
!      Traditional common law rule- caveat emptor- takes property “as is.”

Waste
!     Tenant has a duty to make ordinary repairs. He must mitigate problems and not allow
      them to get any worse. Suydam v. Jackson (1873, p. 39)
      "       Statute about not having to pay rent in unlivable circumstances only applies to
              immediate damage caused by elements, not gradual deterioration.
!     Material alterations by tenants may constitute waste, even if changes increase the value
      of the building. Sparkman v. Hardy (1955, p. 42)
      "       Temporary changes and ones that cost little to correct are NOT material.
      "       Landlord entitled to get property back in pretty much the same condition as how it
              was rented.
      "       Minor changes are allowed by tenants, especially for long-term leases. But, the
              landlord might put in the lease that NO changes are allowed at all.

Implied Warranty of Habitability
!      Common law- caveat emptor- convey land as is, and you have the duty to inspect.

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!      Modern rule- implied warranty of habitability for residential property. Wade v. Jobe (46)
       "       By signing a lease for residential property it is implied that it is .habitable.
       "       Landlord is probably more knowledgeable and has upper hand and tenants are not
               usually qualified to make an adequate inspection personally.
       "       Building, and not land, is the most important part of lease in modern times.
!      Requires bare living requirements. It is only violated if it is unfit for human occupation.
       "       Look at local cases to see local standards.
!      Tenant has a duty to notify landlord of problems, and the landlord has a reasonable time
       to fix problems that were not caused by the tenant.
!      Duty for landlord to provide habitable property and that of tenant to pay rent are mutually
       dependant. They were independent under the common law.
!      Tenant does not have to pay for part(s) that are not habitable. If tenant is not sure if it is
       habitable, he can put money in escrow, and determination can be made later.
!      Most courts do not allow a waiver of implied duty of habitability, so it is a duty of law.

Implied warranty of suitability for commercial property. Davidown v. Inwood (p. 51, 1988)
!      Property must be suitable for intended commercial purpose.
!      Unlike warranty of habitability, this can be waived.
!      According to Davidow, requirement for tenant to pay rent is independent of requirement
       for landlord to provide suitable property. Cannot stop paying rent if unsuitable.
!      Most jx’s do not have this automatic protection for commercial property- it must usually
       be bargained for and be specifically in the lease.

Express Covenant to Repair
!      If there is a clause to repair in the lease, the landlord does not have to rebuild the property
       if it is completely destroyed. Instead, the lease is over. It would be inefficient to require
       rebuilding of the same building. Morris v. Durham (1969, p. 56).
!      If there is a clause that the lessee has to return property as he got it with normal wear and
       tear (general maintenance and delivery clause), courts are split as to whether the lessee
       has to rebuild the building if it is completely destroyed.
       "         Court in Amoco Oil Co. v. Jones (p. 59) said there was no duty to rebuild.
       "         Lessor can insist on clause that would require lessee to rebuild if destroyed.

Net lease
!      Landlord takes certain rent as net profit and tenant is responsible for everything else.
       This is a risky deal, but is cheaper. It is common for long-term leases.

Personal injury
!      Only duty is to danger on one’s premises and within one’s control.
!      Tenant is responsible for injury on the lease premises. Howe v. Kroger Co. (p. 62)
       "       Landlord is responsible for property outside premises if it owns premises.
       "       If not sure who is in control of premises, best to sue both landlord and tenant.
!      There is no duty to warn if danger is obvious (in this case, icy). No duty to warn of

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       danger outside of premises (according to this TX court).

Landlord liability
!      Common law- landlord not liable for injury. Taylor v. Schukei (p. 65)
!      Five exceptions:
       "        Undisclosed conditions known to the landlord but not to the tenant.
       "        The premises were leased for public use and a member of public gets hurt.
       "        Part of premises were retained under lessor’s control and was open to use of
                lessee.
       "        Lessor had contracted to repair the premises.
       "        Negligence by the landlord in making repairs.
                -       Therefore, look at pattern & history of landlord’s repairs.
!      If legislature provides that landlords are responsible for maintenance, then they might be
       responsible if a party gets hurt on the premises. Newton v. Magill (p. 68)
!      In general, the landlord has no general duty to protect tenants from crimes of 3p’s. Crime
       is common everywhere and a general risk. Feld v. Merriam (p. 73).
       "        Exception is if that landlord is contractually responsible for security and fails in
                doing so.
       "        Sometimes landlord might be liable if he had notice of criminal activity.
       "        Landlord might have duty to provide locks under warranty of habitability.

Exculpatory Clauses
!     Common law- clause (landlord not liable for injury) is dispositive (freedom to K).
!     Many jx’s have denied such clauses as contrary to public policy by statute or judicial
      opinion. Crawford v. Buckner (p. 79).
!     National trend is that exculpatory clauses are not allowed for residential leases, but are
      allowed for commercial.

Assignment and Sublease
!     An assignment transfers the entire unexpired term, sublease does not transfer entire term.
      "       Calling it a sublease does not make it sublease if it’s assignment. Dayenian (83).
      "       Subtenant is bound to pay tenant (thought usually pays landlord). In assignment,
              the original tenant acts as a surety.
!     Courts don’t favor express covenants that limit assignability. These usually must be in
      expressed terms.
!     It’s hard to get an implied-in-fact restrictions on assignability and require a heavy burden.
      "       Percentage clause in Rowe (86) does not automatically preclude assignment. In
              this case, the clause was not material b/c it made no difference.
      "       Significance of clauses that might restrict assignability depends upon other terms
              of lease, surrounding circumstances, nature of the business conducted on
              premises, and the id’s and expectations of the parties.
!     Modern approach is that there is a silent consent to sublease and assignment for
      commercial property. Julian v. Christopher (p. 91).

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       "       If a landlord must consent to sublease or assignment, the landlord may not
               withhold consent for unreasonable or arbitrary reasons.
       "       Courts frown on restrain to alienation. There is a public policy reason to act in
               good faith, so when the landlord has restriction, he must act reasonably.
       "       Some still follow traditional rule that unless the landlord is expressly barrd from
               withholding consent for arbitrary reasons, he may withhold for ANY reason.
       "       Landlord can also add K provision that he may withhold for ANY reason.
!      Same rule, but a little more latitude for residential property- parties may withhold for
       more arbitrary reasons, especially if they will have to live with the person.
!      Assumption of the lease (not just acceptance of assignment) is necessary for there to be
       privity of K between assignee and the lessor. First American (97).
       "       If there is an express clause in lease that does not allow assignment, lessor waives
               objection by accepting rent from the assignee.
       "       There is privity between assignor and lessor, not between sub-leasor and lessor.
       "       Tenant who assigns remains a surety.

Termination of the Landlord-Tenant Relationship

Holdover Tenant- tenant remaining on premises after lease ends. Clairton Corp. (104)
!     Traditional common-law rule: the tenant for a term of a year or more who holds over the
      lease w/ the consent of the landlord, intends (w/o evidence showing the contrary) to
      convert it to a year to year lease.
!     Modern approach: traditional rule does not apply where the possession is retained and the
      rent paid pending negotiations w/ respect to the renewal to the lease.
      "       The continuance of the lease does not in itself constitute a renewal of lease w/ all
              of its provisions. (106)
      "       Depending upon the circumstances (i.e. showing contrary intent- such as that to
              enter into a new agreement), the court might accept month to month lease.

Summary Eviction
!    To evict a tenant, landlord may go to court. There is usually an expedited process to get
     approval to evict. Usually the tenant does not even show up b/c he is in the wrong. If
     there is an order for eviction and tenant does not willingly submit, the marshall or sheriff
     shows up and physically evicts the person.
     "       Courts differ on how much of a defense a tenant can bring. They try to meet a
             balance between the expedition of the process and the rights of the tenant.
!    Courts do not like self help evictions.
     "       They will usually not uphold clauses that allow the landlord to evict the tenant
             himself for public policy reasons. Bass (111). This could lead to improper
             evictions and violence. Lock-out unlawful. The tenant is still in lawful
             possession of the premises until landlord recovers premises by legal means.
     "       Some jx’s allow self-help evictions if they are provided for in the lease, there is a
             breach, and everything is done in a peaceful way.

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Retaliation Eviction
!       Retaliatory eviction (for tenant reporting code violations on property to housing
        authority) is not allowed, even if it is a month to month lease that the landlord may
        terminate at any time. Edwards (116). Landlord may evict if there are legitimate reasons
        though.
        "       Public policy- tenants should not be deterred from complaining to authority.
                Inspectors cannot do adequate job- tenants need to complain about problems.
        "       Landlords should have to fix the problem and not just evict tenant.
        "       Landlords probably cant raise rent suddenly as a retaliation either.
        "       Some jx’s limit ban on retaliation to only meritorious claims to authorities, but
                some jx’s ban retaliation for any claim.

Eviction for illegal activity on premises
!      Landlord may evict for illegal activity on premises. Phillips (121).
       "        Landlord is allowed to void entire lease and eviction all tenants, regardless of
                whether they knew about illegal activity.
       "        This is the only effective way for landlord to provide a safe environment.
       "        Could be repercussions for the landlord for having such activity on his property.
                It is unclear whether landlord has a duty to report such activity to the police.

Abandonment and Surrender
!     If a tenant moves out in the middle of a lease, landlord has 3 options (Mesilla, 124):
      "       Let property sit and make abandoning party pay rent for rest of lease period (if jx
              requires no duty to mitigate)
              -        It may be hard to collect and may stigmatize property though.
      "       Relet the property to new tenant and original tenant is not liable for rent.
      "       Accept tenant turning over property and terminate lease and duty.
!     Landlord terminates the original lease by reletting the property for free (in Mesilla, the
      free use of property was short term while the landlord sought a new paying tenant, so the
      court could have decided differently).
!     Many jx’s have a duty for the landlord to mitigate if a tenant abandons property in the
      middle of the lease. Austin Hill (127).
      "       Common law is that there is no duty to mitigate.
      "       But against policy b/c unused property is likely to fall into disrepair, space could
              be used for greater good instead of sitting idle, and it is a penalty to tenant.
!     Modified mitigation rule- landlords are required to mitigate under certain circumstances.
      "       Landlord should advertise and go to realtor.
      "       Landlord may wait for acceptable tenant and require a credit check.
      "       The only duty to mitigate is a reasonable one.
!     Jx’s are split as to whether tenant has the burden of showing that landlord did not take
      reasonable steps to mitigate or landlord has burden of showing he did (tenant in Austin).
      "       TX says that there is no duty to mitigate if landlord does not reenter property and

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               lets it sit idle.
       "       Jx’s that do not require mitigation say that there is too much potential for
               litigation b/c there is so much uncertainty.
!      Jx’s are split as to whether parties can modify lease so that mitigation is not required.
!      There is generally this duty to mitigate for both residential and commercial landlords.

Retention of Security Deposits- many states have statute governing return of deposits.

Government Involvement in Rental Housing Market
!     Rent control is not widespread in US. It’s localized in places like NY and CA.
!     The laws need to substantially advance the public interest while still giving the landlord a
      reasonable rate of return. If laws are too severe, they are confiscatory and violate the
      takings clause. The landlord needs to make a profit. Valparaiso (135).
!     NY App ruled unC a law not allowing a landlord modify his property to other uses.
!     A more equitable solution is public housing, but this requires higher rent.


Personal Property

Wild Animals
!     Wild animals are not owned- they are “free in nature”
!     Pursuit of an animal does not give possession, but wounding or capturing it does. Must
      make escape impossible. If escapes, animal regains liberty. Pierson v. Post (1805, 144).
      "       Dissent says mere pursuit is enough, as long as there is a reasonable prospect of
              capture. He who puts time and labor into killing (in pursuit) should have right.

Found Property
!     Four types of property (Lindner Aviation, p. 149):
      "       Lost- unintentionally lost property. Kept by finder after statutory time.
      "       Abandoned- intentionally relinquishment of control. Finder keeps it.
      "       Mislaid- put somewhere but party forgets about it. Owner of place where it was
              left keeps property, so the true owner will be able to find it if he comes back.
      "       Treasure trove- hidden or lost from antiquity (very long ago). Finder keeps it.
!     Look at nature of item and where it was found to determine the likely intent of its last
      owner and therefore its status. People would not abandon a valuable.
!     Finder must advertise lost property for a certain amount of time. If nobody shows up
      after the statutory period, the finder can keep it.
      "       There is usually a 10% finder’s fee for finding lost, but not mislaid property.
!     Intentional trespasser has no claim to found property on trespassed land. He could have a
      claim if trespass was unintentional or trivial though. Favorite (158).
      "       The owner of the land has the right to things found embedded in the land,
              regardless of what kind of property it is (other than treasure trove).
      "       A lot of jx’s have rejected treasure trove b/c it encourages trespass.

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Bailments
!     Rightful possessor of goods by a person who is not the owner.
      "       Includes loaning goods to friend, renting car, storing goods in warehouse.
!     The bailee is responsible for the goods while he is in control of them.
      "       The burden is on the bailee to prove that he took reasonable care of goods.
              Therefore he has the presumption of negligence.
      "       If something is stolen, bailee would have to prove it was not b/c of negligence.
!     There can be implied bailment if there is an expectation by the owner that the goods will
      not be stolen. Look at expectation. Allen (162).
!     No set rule for parking lots, b/c there are different types of lots. Things to look at:
      "       Delivery
      "       Who has (exclusive) control and access and knowledge of where goods are.
      "       Lease of space is not a bailment.
!     Safe deposit box can be a bailment relationship. Buena Vista (168) said it is.
      "       It is debatable b/c bank has no knowledge of contents of box.
      "       But, the bank has the key and may limit the owner’s access to the box. Bank also
              controls the premises of the box.
      "       As the bailee, the bank has the burden of proof of showing that it exercised
              normal care and its security was up to industry standards.
      "       Banks cant usually K out of these bailment relationships.

Constructive Bailment
!      This is a bailment when there is no expressed agreement.
       "       Same requirements as regular bailment.
!      Bailment when a business takes control of a good by picking it up. Shamrock Hilton 170.
       "       Business has the duty to deliver the goods to the owner w/ reasonable care.
       "       Bailee responsible for goods, even if they don’t know the contents or value.
       "       This court said that responsible for goods so long as contents reasonable given the
               situation. Dissent says that expensive jewels were not foreseeable though.

Bailee’s Responsibility for Damage to Goods. Singer (175).
!      Common Law: A bailee is strictly liable in the event of misdelivery of a bailment to a
       third party.
!      UCC Sec. 7-204: Warehousemen are liable for injury of goods caused by failure to
       exercise reasonable care
       "       NOT liable for misdelivery when they adhere to reasonable commercial standards
               and good faith.
       "       NOT liable for damages unavoidable by exercise of reasonable care
       "       This is b/c bailee is not insurer of goods.
!      Bailee may rebut presumption of negligence by:
       "       Showing how the loss occurred AND that it was not attributable to negligence.
       "       "Requisite care" was exercised.

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!       IF goods are destroyed by fire, P has burden to show D's negligence.

Disclaimer on Bailment Relationship. Carr (177).
!      A bailee may limit liability w/ a K. It usually does not matter if the bailor read the K.
       "      A receipt an box w/ disclaimer was enough for Carr court.
!      Things to take into consideration about disclaimers (small print):
       "      Relative bargaining power
       "      Whether there was an agreement and/or understanding between parties.
       "      How informed the consumer is and whether he signed.


Gifts
!       Inter vivos- normal gifts, take effect immediately and cannot be revoked
!       Causa mortis- when giver is facing peril or apprehension of death. Revokable through:
        "       Express revocation
        "       Recovery
        "       Donee dies before donor

Requirements of inter vivos gift (Irvin v. Jones, p. 183):
       "      Intent of irrevocable gift. Donor intended to make gift.
       "      Gift is delivered. This can demonstrate gift was intended. If good never parted
              w/, status as gift is suspicious.
              -       A transfer on company books has been found to be sufficient delivery.
       "      Donor relinquishes dominion and control of gift.
       "      Acceptance of gift.
!      To be disposed of at time of death, thing has to be expressly listed in will. This written
       instrument, complete w/ formalities furthers the actual intent of the deceased.

Requirements of causa mortis gift (Braun, 195)
       "        Delivery,
       "        In the expectation of death
!      Causa mortis gift is presently effective but subject to revocation. Therefore the donee can
       spend it before donor dies, but if donor recovers, donee has to give back what is left.
!      Handing over a safe deposit box key is enough to constitute delivery of a gift of all the
       goods in the safe deposit box. Donor does not have to say “gift.”
       "        The key has no intrinsic value, but it is necessary to access contents of box.
       "        It is constructive delivery- release of control of goods.
!      To determine whether a person is expecting or apprehending death, look at their behavior
       and statements. Man in this case gave away money to pay hospital bills.
!      Witness is usually necessary for cause mortis gifts b/c donee is highly self interested and
       testimony might not be credible.
!      If a gift is given causa mortis, it cannot go in a will as well.


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Partial transfer of gift. Gruen v. Gruen (185).
!        Court in this case said that you can transfer title to a good, but not physically transfer it.
         This is a partial transfer.
!        Court allowed a symbolic giving of the gift, even though father never divested physical
         control of it.
!        The son kept letters promising the gift as evidence of transfer of gift.
!        This sympathetic court finds ways (and goes out of its way) to make it a gift, as the father
         seemed to have intended.

Joint Bank Account (In Re Estate of Gldowski, p. 191)
!      Some bank accounts are in the names of two people and if one dies, the survivor keeps
       the remainder.
!      To determine whether this is a gift to the survivor or not, you have to look to the intention
       of the person who opened the account. It is unclear whether it is a testamentary gift.
!      In this case, he put her name on the account as a matter of convenience. She said she was
       supposed to use the money for him until he died and then keep the remainder.
       "        It was not left for her in a will, so the money was split among his heirs.

Conditional Gift (Heiman v. Parrish, p. 199)
!      Gift that donee can keep based on a condition happening.
!      Majority says engagement ring is an implied conditional gift on the condition of
       marriage. Dissent says it is an inter vivos gift.
       "       Fault regime- if donor breaks off the engagement unjustifiably, then donor cannot
               get it back.
       "       No fault regime- it does not matter who breaks off the engagement or why- the
               donor still gets the ring back.
!      Court chooses no-fault. Public policy- make it less costly to break off marriages that
       people don’t want. It’s too hard (and subjective) to determine fault in engagements.


Fixtures
!      Definition of fixture (Everitt, p. 208)
       "       Item of personal property that is attached to the land.
       "       A fixture remains w/ the house in legal actions involving the house (sale, etc.)
!      Requirements for fixture:
       "       Annexation- (physical or constructive) relationship between object and real
               property
               -       Physical- it cannot be removed w/o causing damage
               -       Constructive- may move w/o physical damage, but may cause economic
                       damage.
       "       Adaptation- good has been adapted to the house
       "       Intention- intent that good be permanently annexed to the property
!      Modern, built-in appliances tend to be annexed and are fixtures.

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!      If something is more costly to remove than to put in, it is probably a fixture. (Met, p. 212)
       "      Party can specifically put into K that it wants to remove fixtures and/or retains
              ownership to certain fixtures installed.

!      Trade Fixtures- things installed by tenant that are necessary for tenant to run business.
       "      These may be valuable and the tenant has a right to remove them at end of lease.
       "      This allows businesses to fully adapt property to their needs, w/o fear that they
              will not get to keep things installed (i.e. large ovens).


Estates in Land
!      Traces back to 1066 invasion of William the Conqueror. King owned all land.
!      Interests developed so king could apportion land, and it could be inherited & transferred.
!      Prima genitor- when a person dies w/o a will. Property passed on descent.
       "       Estate passed solely to oldest son. This kept estates together.
       "       Abolished in England in 1925. Never applied in US.

Types of fee simple estates:
!      Fee simple absolute
       "       “To A and his heirs.” Land is inheritable.
               -       A has full control and heirs have rights when A dies (if heirs inherit it).
               -       There is a potential for infinite duration.
!      Fee simple determinable
       "       Estate exists as long as it is used for a certain purpose.
       "       When it cease to be used for this purpose the estate ends.
       "       It reverts to original owner or his heirs upon the condition being broken.
!      Fee simple subject to a condition subsequent
       "       Original owner must take some step to reclaim the land. Has right of entry.
               -       Above 2 not used anymore, but were more common in the 19th C.

Determining whether fee simple determinable or subject to condition. Mahrenholz (223).
!     Look at deed. Whether it says revert, right of entry, etc.
!     If court is in doubt, the default assumption is subject to condition subsequent.
      "         This disturbs existing ownership only if original party takes specific action.
      "         Court do not like automatic forfeiture- wait until heirs take action.
!     Court in case said deed was ambiguous, so it was subject to condition subsequent.
!     Court also has to make determination whether condition was fulfilled in the first place.
      "         This can be difficult if it is not spelled out on deed.
!     These arrangement are not popular anymore due to potential for problems. Conditions
      change. They have been banned in CA.
!     If it is subject to condition subsequent, to determine if the condition has been met for the
      reverter, the original party can go to court and get a declaratory judgment.


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Fee Tail Estate
!      To “A and the heirs of his body.”
!      Of NO USE today. Not allowed in almost any state- becomes fee simple absolute.
!      It is totally impractical.
!      Passes down ONLY to descendants of original grantee, so keeps property in family line.
!      When family line dies out, property goes to original grantor.
!      You cannot borrow against it or use it as a commercial arrangement.

Life Estate
!      Estate created for persons’s natural life.
!      After death it reverts. Therefore the life tenant cannot convey fee simple absolute.
       Absent agreement w/ fee simple holder, anything the life tenant conveys is only valid
       during his natural life.
!      Life tenant pays taxes and maintenance on property.

Life tenant’s use of property:
!       Life tenant may benefit from life estate. May cultivate renewable resources (e.g., trees).
!       Doctrine of waste applies to changes made by life tenant that are not renewable (mining).
!       There may be disagreements about what the life tenant can do w/ land though.
!       Decisions about the use of the land may determined by an assigned trustee.
        "       Different uses of property (logging, minerals, etc) may be assigned separately.

Non Freehold Estate
!     Estate granted for a set period of time. Then it goes to a future interest. It either reverts
      to grantor or his heirs, or the remainder goes to a 3p.

Future interests in land:
!       Future interest in favor of grantor or his heirs
        "       Possibility of reverter- follows fee simple determinable.
        "       Right of entry- fee simple subject to condition subsequent
        "       Reversion- when grantor grants less than his total property, there is automatically
                a reversion by rule of law.
!       Remainder- takes effect after the duration of the estate. This is an interest in 3p.
        "       Vested- remainder which is transferred to a living and identified person. Interest
                may be vested in one living person or class of those in which all are not yet living
                (e.g., A’s children- and A only has one child).
        "       Contingent- passes to a person not yet born or ascertained, or is subject to
                condition precedent. It may depend upon a person turning a certain age. May be
                a survivorship condition.
                -       Alternative contingent remainders- To one party on a condition, but then
                        to another party if that condition is not fulfilled.
Heirs are determined at time of death. Heirs contingent on who is alive at owner’s death.


                                                 12
Executory Interest- For a talk about it, look at p. 237 in textbook
!      Springing interest- one that will transfer in the future (upon a condition).
!      Shifting interest- conveyance to a party, and shifts to another party (upon a condition).
Fee Simple Subject to an Executory Interest- "to A, but if [some condition is met], then to B."

There were a bunch of rules developed by the common law to limit contingent interests and how
long the land could be tied up. The only one that is widely left is the rule against perpetuities.

Rule in Shelley’s Case (p. 240)
!      IF the same instrument creates a life estate in A
!      AND creates a contingent remainder in A's heirs
!      THEN the estates merge to create a fee simple in A.
       "       Rule is avoided by using 2 instruments, or giving A a 100-year lease.

Doctrine of Worthier Title (p. 241)
!      Gives to A for life, but remainder goes to grantor’s heirs
!      The remainder going to grantor’s heirs actually goes to the grantor.
!      Heirs might inherit by descent, but not by device.
!      Has not been as widely abolished as Rule in Shelley’s Case
       "      Applies to both personal and real property, and executory interest in heirs.

Doctrine of Destructibility of Contingent Remainders (p. 242)
!      If contingent remainder does not vest before proceeding estate, it is destroyed.
!      A has a life estate, then to B on her 21st Bday. If A dies before B turns 21, then the
       contingent interest is destroyed and it reverts back to the grantor.
!      The next vested estate becomes possessory.

Rule Against Perpetuities (p. 243)
!     Common law version: “No interest is good unless it must vest, if at all, not later than 21
      years after some life in being at the creation of the interest.”
!     An interest must vest not later than 21 years after some life in being at its creation.
!     Applies to:
      "       Contingent remainders
      "       Executory interests
      "       Vested remainders subject to partial divestment.
!     Does NOT apply to:
      "       Rights of entry
      "       Possibilities of reverter
      "       Vested remainders subject to complete divestment

!      The goal is to KNOW for sure that the property will vest within the period.
       "     The uncertainty can only be resolved within the period (life + 21 years).
       "     Interest is void if there was no way to determine whether it will be vested within

                                                13
              the perpetuity period.
       "      The whole arrangement is voided at the outset if there is a possibility that it is
              violated.
!      Adopted to limit tying up donative transfers for generations.
!      Helps to limit “dead-hand” control and complicated contingencies.
!      Most states have made modifications from the common law rule.
       "      Some have extended the period to 90 years.
       "      Some have adopted the “wait and see” doctrine.
!      “Wait and see”-
       "      Arrangement is not void just b/c there is some scenario that would violate rule.
       "      Wait and see if there is a violation. Violation are often technical and improbable.

Violations of common law rule:
!      O conveys “to A so long as the property is used for commercial purposes, then to B.”
       "       A has a present possessory estate- fee simple determinable, B has a shifting
               executory interest.
       "       The affect of this conveyance could be in effect long after O dies, so it would
               violate the common law rule.
!      O conveys “to A for life, then to A’s first child to reach age 25.” A has one living child,
       who is 24.
       "       Contingent remainder on the child reaching 25.
       "       The problem is that the child could die before reaching 25. Then A could have
               another child. A could die when the second child is 1 or 2. Then it would be over
               21 years before the second child reaches 25. Therefore, you would not be sure if
               the second child reaches 25 for over 21 years.
       "       Therefore there is a very small chance that there could be a scenario that violates
               the rule, b/c you would not be sure if the remainder would vest for over 21 years.


Concurrent Interests

Tenancy in common (p. 247)
!     Each tenant in common owns same or different % interests in property and has the right
      to possess property subject to other tenants rights.
!     Each holds an undivided interest in property.
!     Interests may be freely conveyed and it inherited to heirs.

Joint tenancy (p. 247)
!       Right of survivorship- last joint tenant keeps everything.
!       Shares must be the same.
!       Common law, required four unities- time, title, interest, possession.
        "      Common Law: Impossible to convey property to self and another as JT's w/o a
               strawman conveyance.

                                               14
       "       Statutes in some places now allow creation of JT between self and another by
               direct transfer.
!      Joint tenant can sever his interests while alive. Becomes tenancy in common.
       "       May be severed w/ an inter vivos transfer. Gets around last man standing rule.
!      A joint tenant cannot leave his interest in his will to somebody. He would have to sever
       his joint tenancy or else his interest will go to other joint tenants when he dies.

Tenancy by the entirety (p. 248)
!     Estate for husband and wife only. Some states allow it for gay couples though,
!     Has survivorship feature like joint tenancy.
!     The survivorship feature is indestructible- shares cannot be severed.
!     Under common law, husband controlled property. This has been abolished.
!     If somebody conveys a tenancy by the entirety to two people that are not married, it will
      probably be interpreted as a joint tenancy.
!     About half of states have retained this.
!     JX's ARE SPLIT
      "       Majority: Divorce turbs TbE into TiC.
      "       Minority: Divorce turns TbE into JT.
!     JX's ARE SPLIT - "to A and B, husband and wife."
      "       Common Law: Tenancy by the entirety is created even in absence of survivorship
              or entirety language.
      "       Modified Common Law: Tenancy in common is created by this.

Determining status of tenancy. In Re Estate of Michael, p. 249
!     Common law presumption was in favor of joint tenancy, to keep estate together.
!     Act of 1812 reversed this- presumption became tenancy in common.
!     A joint tenancy must be expressed in very clear language, otherwise, it is in common.

Rights of Creditors to Tenancy in Entirety. Sawda v. Endo, p. 253
!      States take four different approaches to whether creditor may seize property that is held
       as a tenancy in entirety when only one tenant is responsible for debt.
       "       I- common law- subject to husband’s exclusive domain and control
       "       II- property may be sold for the debt of one spouse. Creditor can reach up to half
               of the value of the home.
       "       III- creditor of either husband or wife cannot reach the estate
       "       IV- creditor attaches the survivorship of the property of the spouse who is in debt.
               The creditor will get paid depending on which spouse dies first.

Rights and obligations among Co-tenants. Graham v. Inlow, p. 260.
!      TiC's have right to make improvements w/o consent of co-T's
       "       IF improvements are made in good faith AND improvements "benefit the
               premises"
       "       THEN TiC will be indemnified for them when/if land is partitioned

                                                15
                -       EITHER by giving TiC the improved part OR monetary compensation
                -       TiC can only receive enhancement value of the improvement.
!      Each TiC has right to occupy premises; no TiC can lawfully exclude the others.
!      TiC's possession of property is adverse when other TiC's have actual or constructive
       knowledge of the adverse claim.
!      TiC in possession who does not exclude other TiC's is not liable for rent.
!      If parties are in total disagreement, partition is probably the best bet.

There is no liability for paying the other tenant rent unless there is adverse exclusive possession
by one of the tenants in common. Coggan, p. 263.
!      A co-tenant is able to get back rent if they are ousted by the other co-tenant, from the
       point that they were excluded from the property.
       "        Certain actions (e.g., changing locks) may constitute constructive ousting by not
                allowing the other tenant on the property.
       "        Telling somebody to get out can be enough. It does not have to be physical.

Termination of joint tenancy
!     When one of the four unities is severed, a JT becomes a TiC.
      "       Temporary division of property WITHOUT intent to partition does NOT destroy
              unity of possession.
      "       Divorce does not destroy joint tenancy between former spouses. Porter, p. 266.
      "       Divorced parties have to sever their interests.
!     Courts increasingly allow unilateral self-severance of joint tenancy. Knickerbocker,
      (269)
      "       The old rule was that you had to convey the property first to a straw-man (usually
              attorney) in order to sever it. You could not do it yourself.
      "       Having a straw man helps prevent fraud though- otherwise you could “secretly”
              sever the joint tenancy, but not enact it if the other joint tenant dies first.
      "       The severance was deeded in this case, which would have prevented fraud. Not
              all jx’s require recording of severance though.
      "       Secret severance is a problem w/ self-severance of property.
!     Conveyance, partition, and alienation sever a joint tenancy. Tenhet, p. 275.
      "       Look at whether the parties had an intent to sever the property.
      "       Leasing or mortgaging one’s share of a joint tenancy does not sever it.
!     If tenant that is lessor dies during the lease, the other tenant cannot get rid of the lessee.
      "       The lease is still valid for remainder of its term.
      "       As either joint tenant has undivided interest in the property, each can lease the
              entire property w/o the other’s permission.
      "       The only way to prevent the other party from leasing the property is to partition it.
!     Banks usually require BOTH joint tenants to sign mortgage on property.
!     Courts usually hold a tenant murdering another tenant to be a severance.

!      Joint tenants are entitled to partition the land, unless there is an express agreement that

                                                 16
       does not allow them to partition the property. Coolidge, p. 279.
       "      Agreements between TiC's prohibiting partition must be very clearly expressed.
       "      EVEN THEN they may be unenforceable asagainst public policy.
       "      JX's ARE SPLIT on whether or not to enforce agreements prohibiting partition.

!      Courts prefer division in kind (physically dividing land) over a division in sale (selling
       land then dividing proceeds). Von Behren, p. 280.
       "       Parties might want to stay on the land and courts do not want to force them off.
       "       Courts may allow division in sale when a division in kind would cause great
               prejudice to some of the parties. This is true when there are too many co-owners,
               b/c splitting it between so many parties would cause it to be valueless.
       "       Courts are split as to whether to give weight to non-financial considerations when
               determining whether or not partition is appropriate.
!      Process for partitioning property in kind (in Von Behren):
       "       3 court appointed commissioners make proposal how to divide land.
       "       Division based on value and not acreage. Takes into account topography, water.
       "       Approval of commissioners’ division is at TC’s discretion.
!      If there is an unfair partition in kind, the court may adjust the inequality by requiring cash
       payments between the parties. This is called owelty.
!      If one party payed for a majority of the joint tenancy, the presumption is that part of the
       joint tenancy is meant to be a gift b/c joint tenants have equal control of land.
       "       The party who paid for a majority has the burden of showing it wasn’t a gift.

Condominiums (p. 283)
!    Concurrent ownership agreement.
!    Owners own condos in fee simple. Responsible for taxes and financing.
!    Owners are joint tenants of common areas and pay for upkeep of this area.
!    Must follow rules of condo owners’ association (may lead to litigation).
!    Conversion from rental units may lead to problems (286). Some jx’s place limits or
     restrictions on conversions.

Cooperatives (p. 287)
!     Coop association owns entire building.
!     To join, you receive shares in coop stock and a long term lease in the apartment.
      "       Therefore you become an owner in stock, and a tenant
!     The association needs rent from all tenants in order to pay finances, otherwise the
      building can be lost through default. Association is careful about new members.

Marital Interests (p. 289)
!      Common law- husband and wife one person under law. Wife’s rights suspended.
       "       Everything wife owned went to husband and he managed it all.
       "       Courts of equity allowed a separate estate for the wife, through prenuptial trust or
               agreement. This was a way for women to own property.

                                                17
       "       Married Women Property Acts in Colonies- end of couverture (husband
               controlling wife’s property). His creditors could no longer take her property.
!      Courtesy (to husband), dower (to wife)- payment from dying spouse to surviving one.
       "       Widows were not left penniless when husband died. Widows were entitled to (at
               minimum) 1/3 life estate of ALL real property husband had owned during the
               marriage, regardless of whether this was sold before he died, or his debts.
       "       This led to problems- conveyances not possible unless wife relinquished property.
!      20th C, states began enacting statutes giving surviving spouse part of dead one’s assets.
       "       This is only after creditors get to it though. Can depose of property before death.
       "       The survivor gets a certain percentage of assets at time of death.


Community Property (p. 291)
!    Mostly in western states- treated wives as equals to husbands.
!    All property acquired by either spouse during marriage is considered communal property.
!    At time of divorce, all community property is divided equally.
!    Community property can be waived as a prenuptial agreement.

Homestead (p. 292)
!     Property protected from creditors. It is either wholly partially exempt from creditors.
!     Theoretically, does not allow family’s primary residence to be taken away.
!     Many states it’s impractically low ($5K in TN). In FL, there is no limit on value of
      home.


EASEMENTS (p. 294)
!    This is a non-possessory right in the property.
     "       Affirmative easements give holder a right to use the servient estate in some way.
     "       Negative easements allow the holder to prohibit some use of the servient estate.
!    Right to use or limit the use of another’s land. Two types:
     "       Easement appurtenant- benefits the holder of the land
             -       Dominant estate derives benefit from the servient estate.
             -       May run w/ title
             -       If it ends when/if some contingency is met, it is an appurtenant easement
                     determinable.
             -       May run for any period of time.
             -       Does NOT have to be mentioned in a deed.
     "       Easement in gross- benefits holder of the easement
             -       Do not normally run w/ title.
     "       If not clear which one it is, courts defer to appurtenant.
!    Land subject to an easement is servient tenement.
!    Profit a prendre- right to enter property and remove resources for commercial use.
!    Most easements are affirmative

                                               18
       "      They give dominant estate some use of the servient estate
!      Negative Easements restricts a party from doing something on his or her property.
       "      It puts an encumbrance on property.

Elements of different types of easements:
!     Quasi-easement


Creation of Easements

Through express provisions (Corbett v. Ruben, p. 295):
       "      You can create an easement in your own land.
       "      No magic language necessary to create an easement. It should be clear though.
              The intention is the most important thing to look at.
       "      If doubt as to whether easement is in appurtenant or in gross, courts defer to
              appurtenant.
       "      An easement in appurtenant may run for any period of time.
       "      You cannot sever easement in appurtenant and create easement in gross.
       "      Because they are interests in land, easements MUST BE IN WRITING.
       "      Express easements are often created through reservation- reserving right to use
              the property in a certain way when you sell it.
              -       Courts are split over whether one can reserve an easement for a 3p when
                      one sells property. Common law says no b/c of clarity of land titles.
Implied Easements
       "      Courts allow implied easements. They must interpret the intention of the parties.
!      Quasi-Easments (Schmidt v. Eger, p. 299):
       "      Requirements of quasi-easement:
              -       Common ownership
              -       Apparent and continuous use (quasi-easement)
              -       Severance
              -       Necessity at severance, reasonable or strict
       "      Quasi-easement is one using one portion of land for the benefit of another portion
              of the land. Though it has the traits of an easement, it is not considered such
              because the owner owns all parts.
              -       When the original owner sells the parts of the land separately that
                      constituted the quasi-easement, courts need to determine whether an
                      easement was created in splitting it up.
       "      Courts disagree about the extent of the necessity of an easement required.
              -       Some say only reasonable necessity required. Reasonable if it would
                      create a (significant) inconvenience otherwise.
              -       Others say it must be a strict necessity- no other options available.
       "      Whether an easement is apparent is determined at the time of the severance. It
              cannot be apparent if the easement did not exist at the time of severance

                                               19
!      Necessity Easements (Whitt v. Ferris, p. 304)
       "      Requirements for Necessity easements:
              -        Common ownership
              -        Severance
              -        Necessity at severance
              -        Continuing necessity- reasonable or strict
       "      A common necessity easement is one for accessing property.
              -        Such an easement is available ONLY to landlocked property.
              -        Such an easement will only be as wide as is necessary to get there.
              -        Access easement does not have to be in the deed. You would have to
                       explicitly say that there is NO access easement.
       "      Whitt court said there is no access easement just b/c plat map has roads on it.
       "      Guests are allowed to use access easement, but any users need to be for the
              benefit of the plot that has an easement (it cannot be used for access to other
              properties).
!      Implied easement based on plat map (De Ruscio v. Jackson, p. 309)
       "      Jx’s split as to how far an easement based on plat map extends.
       "      In this case, he needed an access easement, and he claimed he could use any of
              the roads on the plat map. The narrower interpretation was that he could use only
              the most direct route to the highway.
       "      This court said only access road you can use is the most direct one to highway.
       "      Things blocking the most direct access road have to be removed (tree in this
              case).

Prescriptive Easements
!      Elements of prescriptive easements (White, p. 311)
       "       Continuous and uninterrupted use for a certain period of time (varies from 5-20
               years, usually more in the East, less in the West).
               -       Continuous use:
                       #       As much as convenience or necessity requires. Regular use reqt.
                       #       Court says once a week is enough. Couple of times a year is
                               probably not enough.
               -       Uninterrupted:
                       #       Jx’s split on whether attempted or actual interruption destroys this.
                       #       This court says that an attempt to interfere w/ use in not enough- it
                               must practically interfere. In this case, the users of the easement
                               just cut the barb wire that was put up by the owner.
                       #       Owner should put up stronger barriers or file a lawsuit against
                               trespasser (if they know who it is).
       "       Visible and open or notorious use.
               -       Sufficient for a landowner paying attention to be aware of use.
               -       Secret and/or nocturnal use is not sufficient.
       "       Adverse use (w/o permission).

                                                 20
               -        This is w/o recognition or regard for true owner’s claim.
               -        Permissive use, no matter how long, precludes prescriptive easement.
               -        This permissive use can be implied.
       "       Some jx’s require exclusive use, but White court does not.
!      Such an easement can diminish the value of ownership of the property.
!      The justification for it is allowing long time users of private roads to remain using them.
       "       It favors the active use of property.
       "       Diligent can keep others off their property if they try.
!      The prescriptive easement may be passed on to others.
!      Courts do not allow negative easements by prescription.
!      Parties can rarely get easement for recreational use. You can get it for commercial use
       that relates to recreation more easily though.

Public use of private property. State Ex Rel. Haman, p. 317.
!      General public cannot have a prescriptive easement.
       "       The easement has to go to a person. The landowner cannot sue the general public
               over the easement, in order to vindicate the property.
       "       Fiction of the lost grant- the general public, considered apart from legally
               organized or political entities, could not acquire prescriptive rights b/c they could
               not receive a grant. (ID court did not follow this, but comes to same conclusion).
!      Custom:
       "       From English common law. Requires:
       "       (1) Use from time immemorial- used in a certain way since before recollection.
               Not long enough in a lot of place is the U.S., especially in the West (1912 in
               case).
       "       (2) Uninterrupted use. Not custom if owner has removed people in the past.
!      Public trust:
       "       Usually only applies to natural resources. Not intended for private property for
               public use.
!      Some states have allowed prescriptive easements of beaches.
       "       One problem is their continuous use- beaches are only used seasonally.

Prescriptive Easements to Light and Air. Fontaineblueau (p. 325).
!      No prescriptive easements to light and air allowed in US.
       "       In Britain you can get such an easement due to doctrine of “ancient lights.” This
               was ended in London after WW II so they could rebuild it more easily.
!      Doctrine of ancient light not accepted in any US jx- it is the claim of prescriptive right to
       sunlight. It is not accepted b/c it restricts productive use of land.
!      Some courts have not allowed spite fences (to annoy) based on the doctrine of nuisance.
       "       If something has a productive use, it does not fulfill this doctrine.
!      Legislature are free to enact zoning regulations, but it is not the place of the court.
!      Issue of prescriptive light for solar panels has not yet been litigated.


                                                 21
Scope of Easements
!      Easement can be used for any purpose for which the dominant estate can reasonably be
       put. It cannot overburden servient estate. Commercial use not restricted. Hayes (330).
       "        Increase in traffic on easement does not prevent expansion of dominant estate.
       "        (This court says) that dominant estate can be subdivided and the increased number
                of users can use the easement.
       "        Change in use of the dominant estate does not overburden easement.
       "        Changes can be evolutionary but not revolutionary. A huge commercial
                installation may not be allowed to use the easement.
!      Dominant owner has the duty to maintain the easment.
       "        Improving the easement is allowed so long as it does not unreasonably burden the
                servient estate.
!      For an express easement, servient estate may spell out terms of easement, including any
       specific limitations.
       "        Agreement needs to expressly say what purposes the easement may be used for.
!      Courts are split as to whether a party can build power lines on a right of way if it is an
       easement for egress and regress.
!      Easement should adapt to changes of technology, even if changes were not contemplated
       at the time of creation. This includes allowing cars on easements.
!      Courts tend to be more restrictive about the use of prescriptive easements.
       "        A reasonable evolution of the prescriptive easement is allowed though.
       "        To interpret a prescriptive easement, look at the nature and scope of use that gave
                rise to the prescription.
       "        Prescriptive easements are not voluntary or bargained for, so parties should not
                get more than was earned.

!      The owner of the servient estate may do whatever he wants with his land so long as it
       does not unreasonably interfere w/ the easement. Schold v. Sawyer, p. 334.
       "       TC must ask whether the servient user is making a reasonable use of the land and
               whether the change made to the land (in case, adding a gate) was necessary.
       "       How burdensome is the change on the dominant estate?
       "       No rule on gates- on case by case basis. There is a higher burden on locked gates
               than unlocked ones, but they are allowed at time (e.g., if there is vandalism).
!      Courts are split over whether the owner of the servient estate may move the dominant
       estate’s easement w/o permission.
       "       Most courts do not allow it b/c there is ownership of an easement and it should be
               maintained as is.
       "       The latest restatement said it is alright. This is the utilitarian view.

Maintenance of Easements
!     The owner of the easement has the right and duty to repair and maintain it. Triplett
      (336).
      "      Cannot make material alterations that place a greater burden on servient estate.

                                                22
       "       Cannot interfere w/ use or enjoyment of servient estate.
               -     If interferes or places burden, will have to change it back to how it was.

Transferability of Easements. Miller, p. 340
!      Easements in gross do not transfer w/ the property, but easements appurtenant do.

!      Common law- easements in gross cannot be transferred between parties. When holder of
       easement dies, the easement in gross is terminated.
!      Court in Miller did not follow the common law. It said the common law was not
       equitable- the owner invested a lot of money in the property based on the easement and
       should not lose it.
!      The court looked at the intent of the easement:
       "      It was assigned to his “heirs and assigns,” so the intent was that it’s transferrable.
       "      It is also a commercial right.
              -        The court does not make clear whether one of the above requirements, or
                       both of them, are necessary for tranferability of an easement in gross.
!      Most courts have found that an easement for commercial purposes should be assignable
       and not terminate.
       "      A company might merge and it should still be able to keep its easements.
!      For non-commercial easements in gross, courts sometimes give weight to intention and
       allow assignability.

Dividing easements
!      Traditional rule is that parties with divided parts of an easement must enjoy the easement
       as “one stock.”
       "        The dividing of easements is not favored b/c it may overburden servient property.
!      There has been litigation over whether companies that have an easement for a certain
       purpose (e.g., power lines, railroad tracks), may put in other things along the same lines
       (e.g., cable, fiber optics). Courts have gone both ways.


Termination of Easements (p. 345)
Ways easements can expire:
!     1. Provision for expiration
!     2. Easement implied from necessity ends when necessity ends
!     3. Released by holder
!     4. Title to both servient and dominant tenements come into same hands
!     5. Easement ends when it is obstructed for the prescripted period
!     6. Abandoned
!     7. Estoppel- another builds in reliance on non use of easement
!     8. Building that serves as dominant or servient tenement is destroyed
!     9. Holder of dominant tenement misuses easement making it impossible to enjoin misuse
!     10. If servient estate is conveyed w/o actual, constructive, or inquiry notice of easement

                                                23
       to bona fide purchaser
!      11. Servient tenement is condemned by gov’t under power of eminent domain.

!      To abandon an easement, there must be intent to abandon and not misuse. Lindsey, (346)
       "      Non-use is not enough for abandonment
       "      An easement is not abandoned or ended b/c of prescriptive easement if all parties
              are mistaken about its location and use a different path as an easement.
!      Courts will defer to reasonable alternatives and not require economic waste. In Lindsey,
       the court moved the easement to the location that the parties used by mistake and though
       was the location of the easement b/c a house was built over the original easement.


Licenses
!     You are a licensee in a business that you enter.
!     Licenses are basically revocable at will by the business. Mosher, p. 350.
      "       No obligation for business to give an explanation for revocation.
      "       Once license is revoked, the person is a trespasser if he does not leave.
!     Dissent says a reasonable explanation for expulsion if licensee is only doing what he was
      invited to do (in this case, comparison shop).
      "       Notice must be given that comports w/ the effort and expense incurred (in this
              case he drove a long way to get to the store- he deserves explanation accordingly).
      "       Customer may stay and do what he was invited to do as long as he wants.
!     Tickets to entertainment events and transportation are revokable licenses and revocable at
      will. A stadium may revoke a ticket at will b/c guest is a licensee.
      "       But, there is a K, so if entrance is denied, the stadium breaches K.

A licensee is one that has the privilege to use an area, but not to control the space. Linro, 353.
!      Even if parties characterize agreement as a lease, it may still be a license if the licensee
       does not have exclusive dominion and control over the space.
!      Intent is more important than language in determining whether a lease or license.
!      This is an important difference, b/c a license can be revoked at will but a lease cannot.
       "       Luxury boxes at stadiums are a sticky, confusing situation.
Courts sometimes have trouble determining whether something is a license or lease.
!      Courts usually follow test of whether there was dominion and control over the property.

Irrevocable Licenses
!      Courts are split over whether licenses can be irrevocable.
A license is no longer revocable when a party relies upon it and spends money on it. Stoner (355)
!      This protects reliance on the license and protects against fraud.
!      In this case, it involved the construction of an irrigation ditch. In 1906, $7K was spent, a
       substantial sum.
       "        The license in this case becomes more like an easement b/c it irrevocable, even
                though it was only oral permission.

                                                 24
!      Many jx’s do not recognize concept of irrevocable licenses (e.g., MI).
       "      It is controversial b/c it adds uncertainty to real property.
!      The jx’s that allow irrevocable licenses usually require a substantial sum of money.


DOCTRINE OF REAL COVENANTS (358)
Real covenants are bound to the land and often bind remote parties who bought land at later date.
!      In general, owners of land are not bound by covenants they did not make.
!      Real covenants are an exception to this rule though. Often times, those who made the
       covenants are dead though, so problems arise.
!      Some courts are inclined towards respecting real covenants, while others want land to
       remain unrestricted.
!      There are distinction between enforcement at law and at equity.
!      Most real covenants are created in a deed.

Implied Covenant- Reciprocal negative easement. Sanborn, p. 360.
!      Imposing a restriction that is not explicitly stated in title.
!      Restrictions run w/ land even if deed does not say so explicitly. In this case, the original
       owner conveyed w/ the restriction, but not all subsequent deeds listed it.
!      Subsequent owners should have implied notice of the covenant.
       "        You are bound to research whether there are restrictions on the land.
       "        You are require to go beyond just asking grantor. Could go to records office.
       "        Best would be a title search of the surrounding lots.
!      In this case, the court said that there was an obvious pattern in the lots, which should
       have made them inquire upon purchasing the property.
       "        If the surrounding neighborhood did not give such an impression, they might not
                have been bound.
!      This rule benefits a community as a whole. It imposes the same restrictions on everyone,
       regardless of whether they had actual notice.

!      Nowadays, developers must file covenants of restriction on property.
       "    This makes restriction more apparent and these problems come up less.

Courts don’t like to decide community values or make aesthetic decisions. McHuron (365)
!      This is courts may be willing to defer to housing committees to enforce such decisions.
!      K w/ housing committee leaving decisions up to their discretion can be upheld.
       "       Purpose and intent must be reasonable
       "       Restrictions must be reasonable
       "       The committee needs to go along w/ a general plan.
       "       Be consistent in it’s application.
       "       Not play favorites.
!      Dissent says that the whims and tastes of the committee is not enough- there should be
       some sort of hearing for the homeowners. They need a forum.

                                                25
       "       The standards cannot be too vague.

Making a covenant bind to property
!     The covenant must be enforceable in the first place
!     Intent that the successors will be bound and covenant will run w/ land
      "       Look at original agreement.
      "       Ambiguous language will preclude this
!     Covenant must touch and concern the land
      "       Restriction must relate to the land
      "       It cannot be of personal character or collateral matter
      "       Usually has an economic impact- may decrease value of property w/ covenant or
              increase value of surrounding properties.
      "       Often a restrictive covenant- like restricting property to residential uses.
      "       Affirmative restrictions are more tricky- paying $ to owners’ assoc. or
              maintaining
!     Privity of estate
      "       Usually both horizontal and vertical privity required between party seeking
              enforcement and who enforcement is sought against
      "       Horizontal- restriction imposed at same time grantor grants land to grantee
      "       Vertical- succession of interest between original parties and current owners
              -        No vertical privity if land is obtained before restrictions made.
!     Unless homeowners follow all the rules, the land will be free of burdens

Inheritor of land from party part of the original agreement has standing to sue. Runyon (377)
!       If a party does not have privity, he does not have standing to sue to enforce covenant.

Affirmative Covenants to pay money
!      If there is affirmative covenant to making a regular payment, the unpaid amount becomes
       a lien and property could be foreclosed upon. Neponsit, 386
!      Traditional rule is that affirmative covenants DO NOT run w/ the land.
       "       But, the payment seems to be connected to the land- there could be a foreclosure
               if money is not paid.
       "       Money is used for maintaining the land, which enhances its value.
       "       RULE: Look to substance, not form to see if a covenant touches and concerns the
               land.
!      Court did not follow traditional rule. Affirmative covenant has to touch & concern.
!      The housing association is usually the party who enforces payment. It never had title to
       the land, so the association itself does not have privity of estate.
       "       BUT, this court said that the association represents owners who do have privity.

Affirmative covenant w/ an attached duty (Tulk, p. 392)
!      These are allowed and they can attach to the land. Subsequent owners retain the
       affirmative duty in the covenant so long as they have notice of it, even if not recorded.

                                                26
       "       The condition must touch and concern the land though.
!      But, to enforce such a covenant, you need to own land that will benefit from the
       covenant.
       "       Land cannot be tied up too long by long past owners.

Who may Enforce Covenants (Christianson, p.395)
!    When there no more dominant estate, covenant becomes a personal (in gross) covenant.
     "       This is when grantor has divested himself of benefitted land.
!                    Traditional view: To enforce covenant in gross, you need stake in property.
     "       This court takes a different view- you can enforce if you have an interest in the
             property. The fact that the P in this case owned an adjacent lot was enough.
!    To be able to enforce covenant, party needs to suffer by not enforcing it.
     "       P is the developer and needs his sold property to look certain way for future sales.
     "       Developer can sue in place of neighbors, who might be more hesitant to do so.
!    In general, courts favor free and unfettered use of property, so parties need to show some
     stake in the property to enforce a covenant in gross.
!    But, COURTS ARE SPLIT on whether subdivision developers can enforce covenants
     once they own no benefitted property.

Remote parties MAY enforce covenants IF they were made by common grantor for benefit of all
grantees. Nelle, 405
!      Common Law- Grantor's reservation of right to modify restrictions negates this
       possibility. Covenants can only be enforced if a uniform development scheme.
       "       Therefore the covenant is not valid if exceptions are available for no reason.
!      Modified Common Law (followed by Nelle court): reservation of right does not
       automatically preclude covenant, ONLY if grantor reserves too much power.
       "       Developer may retain exception to covenant so long as its reasonable.
       "       Small and minor exceptions are allowed to give developer some discretion.

Ending of real covenants
Real Covenants may terminate because:
!     JX's statutes limit duration.
!     JX's statutes require re-recording that is not fulfilled.
!     Parties' conduct
      "        Abandonment or Waiver
      "        Community violations frustrate original purpose of agreement.
      "        NOT "distant and sporadic" violations
      "        Only a major violation/exceptions to doctrine would abandon it.
!     Change in circumstances
      "        Changes have already thwarted the purpose of the restrictions.
      "        Restrictions no longer have substantial value to property owners.
      "        Changes in area make the restrictions inequitable or oppressive.
!     Courts are split on whether changes outside a covenanted area may destroy the

                                               27
       enforceability of covenants.
       "      Maybe when changes outside property impose detriments for which there aren’t
              remedies.
       "      Maybe only if court can still protect nearby landowners

Outside conditions alone are not sufficient to terminate covenant on land in Western Land (407).
       "       Court said that the increased traffic, noise, and development as a result of the land
               becoming Reno proper was not enough to end an easement.
       "       The neighborhood retained it residential character, and the proposed shopping
               center would have destroyed this.
!      Public zoning ordinances do not override public covenants.
!      It does not matter if land is more valuable as something covenant prevents (in Western).
!      Most courts have allowed churches to be built on land that has a covenant requiring
       residential use, but they could decide otherwise.

Some courts will come to compromises and allow exceptions to covenants due to external cond.
!     DeMarco (412) court allowed the property next to a newly built major highway abandon
      its covenant and go commercial, os long as it built a greenbelt around it.
      "       This decision was held to be fair and equitable.
      "       There was little danger of a “domino” effect, and greenbelt would mitigate this.
!     The court was swayed by the fact that the property was worth very little for residential
      purposes, but a lot for commercial purposes.
      "       It was already in the middle of a commercial area.


Modern Real Estate Transactions
BROKERS
!   Purpose of a broker is to suggest a realistic price for the house, show the house, and
    negotiate the price w/ prospective buyers and get transaction rolling.
!   Three types of arrangements w/ brokers:
    "      Exclusive right to sell: no matter who sells house, broker gets commission.
    "      Exclusive agency: agent is only agent showing house on behalf of seller.
           -        Only way commission not paid is if he finds buyer himself.
    "      Open- the only way broker gets commission is if he finds buyer himself.
!   Broker relationship need not be in writing.
    "      It is a service relationship and not property one. It’s for less than a year anyway.
    "      If parties do not agree about fees, etc., then they use the broker’s prevailing rate.
!   Multiple Listing Service- subscribed to by broker. It’s listing of properties in the area.
    "      Service usually gets half of commission.

!      Broker has a fiduciary relationship w/ the seller.
       "      Broker has a unique position of duties to both buyer and seller.
       "      Broker may forfeit commission if he undercuts relationship to seller though.

                                                28
!      Some puffery is tolerated though- he can get bids from potential buyers by telling them
       that the seller might be willing to go lower.

Courts are split when brokers are supposed to get commission. Tristram, 418.
!      Most courts follow the traditional rule is that as soon as broker finds a person that is
       ready, willing, and able to purchase the house (as evidenced by sale K), the broker gets
       the commission, even if the deal eventually falls through.
!      Tristram court did not follow traditional rule- said it is no longer fair in modern real
       estate transactions.
       "        There has to be a closing and actual sales transaction for a commission.
       "        Commission is usually paid out of proceeds of the home anyway.
       "        If seller interferes w/ closing by blocking sale or backing out, commission due.
       "        If there are contingencies, like buyer attaining mortgage, broker does not get
                commission until these are fulfilled.
!      Even if the jx follows the new rule, the broker and seller can K to the traditional rule.

Brokers are allowed to fill out real estate forms, and add terms to agreements. Cultrum, 425.
!      In general, lay-people are prevented from practicing law to protect the public.
!      But, court allows brokers b/c there is an economic benefit to letting them fill them out.
       "       Amount saved by not having to go to attorney outweighs risk.
       "       Brokers take a lot less time and most of the time there are no problems. They are
               usually sufficiently knowledgeable to fill out the forms.
!      Broker CANNOT CHARGE for filling out forms.
!      Broker must take same level of care as attorney when performing duties of attorney.
       "       Brokers carry same burdens and responsibilities as a lawyer would. So if they
               mess up, they are liable.

STATUTE OF FRAUDS
Writing Requirement
!      K’s for sales of land or interest in them require a writing.
!      Statute of Frauds may be satisfied by written correspondence. Cash, 433.
!      Writing must establish essential terms of K w/o resort to parol evidence.
!      Generally, writing should:
       "        ID parties
       "        Describe land- definite location or shape
                -       It must clearly ID the parcel of land.
       "        State the purchase price
       "        Signed by the party to be charged
!      The court should not have to interpret the intent of the parties.
!      It just needs to be a “memo,” not necessarily a contract.
       "        Uniform Electronic Trans Act allows electronic signature and processing of K.
!      A check is signed by parties and contains their names, but it does not list the total
       purchase price (if a down payment) or contain a sufficient description of the land.

                                                29
       "      So it is not a sufficient writing.
!      Some courts (dissent) say that if there is no indication of fraud and parties do not disagree
       on terms, the writing should be accepted. Therefore the check is enough, as it was a
       binder or down payment.
       "      If no doubt, K should be enforced. This isn’t a strict application of stat. of frauds.

Part Performance (436)
!      Oral K’s are enforceable under doctrine of part performance.
!      Unequivocal Reference Theory:
       "       If acts or part performance can only be explained by existence of oral K, then K
               should be enforced.
!      Fraud or Estoppel Theory:
       "       Statute of frauds should not be enforced to work a fraud or hardship on one who
               has acted in reliance on oral agreement.
!      1-3 critical acts needed, depending on jx:
       "       Payment of consideration (not sufficient alone though)
       "       Making improvements
       "       Taking possession (acts taking place on disputed parcel)

Time period for consummation is formal rather than essential.
!     Default is that time is NOT of the essence. Not closing on K date is not fatal.
!     Time of the essence clause may be added though- allows courts to be strict in holding
      parties to timely performance.

MARKETABLE TITLE- a.k.a. good title, merchantable title, clear title.
!   A cloud on title is a defect on owner’s title due to some claim or encumbrance.

In absence of contrary provisions in K, seller must give buyer marketable title.
!      K may be more specific and enlarge or restrict seller’s duty though.
!      Seller could list certain defects as exceptions.

Marketable title must be in a condition to satisfy buyer of ordinary prudence. G/GM, 439
!     There is no definite rule, but cannot have problems likely to give rise to litigation.
      "        Substantive objection required to show title is not marketable.
!     The test for marketability IS NOT desirability.
      "        It need not be entirely cloudless.
!     SOME easements will make title unmarketable.
      "        A standard utility easement would probably not make title unmarketable, but a
               drainage easement probably would.
      "        Hazardous waste might not though. It is not a cloud, only a desirability issue.

If property is a joint tenancy, not a marketable title unless both tenants sign. Warner, 444.
!       If one joint tenant sells the property but the other refuses to sign, purchaser can get

                                                 30
       monetary damages but not specific performance.
       "      This is b/c seller unjustly fails to perform K.
       "      Especially true if seller knew that joint tenant had to sign.
!      Court are divided as to whether seller should pay damages to the buyer if he sells the
       property with an unknown defect and in good faith.
       "      The title is not marketable either way.

Forfeiture of Deposit (446)
!       If seller backs out, he has to give deposit back to seller & buyer can sue for damages.
!       If buyer backs out, seller can keep deposit as liquidated damages.
!       Courts are split over whether the seller can still keep the deposit if the buyer backs out
        and the seller sells it to somebody else for much more.
        "        Liquidated damages are calculated at time of K (if losses are , not on what
                 actually happens.
        "        But, some courts have said that it is not equitable for the buyer to lose deposit
                 when the seller does not lose anything.

In general, you get specific performance for K’s for land (unlike most other K’s).
!      Court in Pruitt (447) says that there should be specific performance for sale K’s of
       portions of large developments.
       "       Even condo units are unique land units and require specific performance.
!      Some court have said that sellers have the right to specific performance b/c buyers do.


RISK OF LOSS
!     There is the issue of who bears the risk of loss in the interim period between the signing
      of the sale K and the date of closing, which could be a period of months.

There are three different doctrines for the default risk of loss (Bryant, 448):
!      Doctrine of equitable conversion (majority, and followed in case)
       "       Risk of loss is sustained by the purchaser as soon as sale K is signed.
       "       Justification is that when K is signed, purchaser is treated in equity as owner, even
               though seller holds title until closing.
               -       Purchaser can get insurance upon signing sale K.
!      Uniform vendor-purchaser act
       "       Risk of loss is determined by who is in possession of property.
       "       Purchaser can get out of K if he is not in possession of property and the property
               is materially destroyed (not due to his fault).
!      Risk of Loss on seller (MA)
       "       At closing, property should resemble how it was at time of K.
!      The above are the default rules, so they may be changed w/ a clause in sale K.



                                                 31
FINANCING
!    Real property is usually financed, either with mortgage or deed of trust

Mortgage
!     Mortgagee- party that lends money, usually lending institution.
!     Mortgagor- borrowing party that has pledged to repay cost of loan.
!     Home is collateral for loan.

Judicial foreclosure
!       This is the modern method of enforcement.
!       This is a compromise between parties on fair enforcement mechanism.
!       If mortgagor fails to pay terms of K, court orders a foreclosure.
!       It involves a public sale by a court appointed officer after a period of notice.
!       They are not usually advertised well, so often only foreclosing party makes bids (for
        amount of the mortgage obligation)
        "       The bidder must pay price promptly, w/o time to secure a mortgage, which serves
                to detract potential buyers and drive down the price at foreclosure.
!       If property is sold for less than unpaid obligation, court order mortgagor to pay
        difference.
!       There are some judicial safeguards though for auction bids that are too low:
        "       Sale have to be approved by court, which would not allow sales for an
                unreasonably low price.
        "       Statutory redemption- mortgagor has option of buying property back at the sale
                price at auction.
!       Lending institutions are hesitant to foreclose- they usually try to work something out first.
Redemption
!       Any time before foreclosure sale, mortgagor may redeem by paying amount due.
!       Half of states have statutory period (usually 6 mos) that mortgagor can pay off mortgage
        after foreclosure sale has occurred.

Second mortgages are not paid off until first mortgage is entirely paid off.
!     The 2nd mortgagee might not get anything from a foreclosure, and then would only get a
      deficiency judgment against the mortgagor, who probably cannot pay it off.
!     Lending institutions are very hesitant to give 2nd mortgages, and when they do, the
      interest rate is very high.
!     A mortgagee can only foreclose against his part of the mortgage.

Two types of interest on mortgages:
!     Fixed rate (typical)
!     Adjustable Rate Mortgage (ARM)- fluctuate as interest rates fluctuate.

Subject to financing clauses
!      Most mortgages today have clause that buyer has to obtain financing before they can

                                                 32
       purchase the property.
!      If buyer gets financing, but then fails b/c the financing is withdrawn b/c situation buyer
       changes situation voluntarily (court said divorce was voluntary, and this is why the bank
       withdrew financing), then it is a breach and buyer not entitled to a return of deposit.
       "      Clause only protects buyers who involuntarily breach. (Bruyere, 459)
!      Courts differ as to how explicit agreements have to be.
       "      Some courts do not enforce K’s if the subject to financing clause does not include
              interest rates, which is the rate at which the buyer will not purchase the house
              above (Homler, 460). Others have enforced K’s w/o rates though.
       "      The agreement cannot be too vague. Best to make it as specific as possible.
!      Buyer needs to make a GOOD FAITH EFFORT to attain acceptable financing. Courts
       vary considerably about what constitutes such an effort.
       "      Down payment is forfeited if buyer does not put in a good faith effort.

Ways a mortgaged property is sold
!     Assuming mortgage- buyer assumes mortgage note and all subsequent payments
!     Purchase subject to mortgage- not assuming mortgage, but must make payment
!     Due on sale clause- most mortgages have requirement that when home is sold, lending
      institution has option to collect entire amount owed.

Prepayment
!     Most residential mortgages allow pre-payment & some states require it.

Installment sale K
!       Alternative to traditional mortgage- purchaser signs K agreeing to purchase property
        from seller over period of time at set payment.
!       Purchaser obtains possession of property but seller retains title.
!       These K’s do not usually require down payments. Buyers usually get them when they
        cant get traditional mortgages.
!       Traditional rule: if buyer defaults on payment, seller may bring action removing
        purchaser from possession and purchaser gives up payments already made.
!       New rule: should not be strict forfeiture of property if payment is missed. Skendzel, 464.
        "       This is not equitable b/c purchaser loses entire equity, and seller gets to keep the
                property and all the payments already made.
        "       Instead, it should be treated like a regular foreclosure. Buyer needs an
                opportunity to redeem and it must be consistent w/ fairness and justice.


RECORDING SYSTEMS (471)
!   Old English Rule- first in time, first in right. No recording system.
    "     This led to problems. Now there are laws requiring recording in every state and
          there are public records.
!   Purpose of recording is to embark notice on subsequent parties.

                                                 33
       "      It is then the buyer’s responsibility to do a thorough search.
!      Things that need to be recorded:
       "      Deeds
       "      Mortgages
       "      Long-term leases (usually 5 years or more)
       "      Deeds of easement.
       "      When a party dies, it does not have to be recorded automatically though, so you
              probably need to search for testate records.
!      Two types of recording systems in the US:
       "      Grantor-grantee (most common): transactions recorded in names of parties
       "      Tract index: Transactions regarding respective tracts are recorded together.
!      You are responsible for all instruments within the chain of title, which is the series of
       successive transfers from as far back as the statute requires you to search.

Three systems of recording statutes
!      Race- first party to record deed wins. Original and simplest, but used in few jx’s (NC).
!      Notice- subsequent purchaser who takes w/o notice of prior unrecorded instrument is
       protected. You don’t have to record (but would be a good idea).
!      Race-notice- Party who meets both requirements first is the prevailing party. First bona
       fide purchaser w/ no notice of prior instrument to record wins.
       "       States are more or less split between notice and race-notice.

Earlier purchaser who does not record gets to keep property if later purchaser who records is not
a bona fide purchaser in good faith.
!       Bona fide purchaser in good faith must purchase for valuable consideration.
!       Some jx’s hold that nominal consideration is enough, but others say nominal
        consideration is not enough to be purchaser ($10 not enough in Anderson, 476).
!       A gift is not sufficient.

Conveyance of property shall be void to creditors and bona fide purchaser if the conveyance has
not yet been recorded (Rowe, 479)
!       Debt against seller can be against land (such as attachment of judgment lien) even after
        he has sold it if the purchaser has not recorded it.

Courts are split on whether the purchaser is still liable if the clerk puts a judgment in the book of
attachments but does not put it in the index.
!      In Haner (482), majority said that the purchaser has the burden of doing a more
       exhaustive search than simply checking the index.
       "        Index is not essential to the record, only the book of attachments.
       "        Handing document to clerk suffices to impart constructive notice to everyone and
                the purchaser is protected.
!      Dissent said seller can check if the clerk has done the job properly pretty easily. It is not
       practical to make the buyer check the ENTIRE book of attachments.

                                                 34
Wild Document
!       If prior essential instrument in chain of title has not been recorded, any later recording is
        wild. An omission in the chain will mean that a title search will not uncover later
        instruments connected to it.
        "        B/c a search of title record could not have disclosed its existence, most courts will
                 hold that there was no constructive notice.
!       If deed is recorded by the 1st grantee before grantor obtains record title, it does not impart
        notice to subsequent purchasers (Far West, 485).
        "        Grantee must re-record deed after title comes to grantor, or else another grantee
                 has no notice of the first conveyance and may foreclose.
Equitable interest in land may exist prior to patent title being given and can be legitimately
transferred. But, the transfer is a wild deed if it is not re-recorded.

Courts are divided as to whether quitclaim deed puts purchaser on inquiry notice.
!      Some courts hold that quitclaim deed puts purchaser on inquiry notice and he must search
       beyond chain of title to see what grantor has done w/ property before he acquired title.
!      Court in Sabo (489) said that purchaser obtaining title by quitclaim has no duty to look
       further than grantee-grantor index b/c of cost and efficiency concerns.

Doctrine of After-Acquired Title OR Estoppel-by-Deed
!      A grantor who does not have title at time of conveyance but subsequently acquires it may
       not deny grantee’s ownership of land. It passed by operation of law once acquired by
       grantor.
!      Subsequent bona fide purchaser usually trumps this grantee though.

Courts are split as to whether servient owners have constructive notice of easements contained in
deeds in neighboring properties.
!      Court in Witter (493) said that restrictive covenant is only binding if they appear in some
       recorded deed in the chain of title.
       "        Dominant owner can record conveyance creating covenant rights in servient
                chain.
       "        Purchasing party should not be required to examine collateral deeds of prior
                common owners.
!      Some courts say that the landowner has the duty to search beyond his own deed for
       restrictions. Some say that where land is conveyed by common grantor, landowner has
       duty to look at all deeds conveyed by common grantor.

There is notice of subsequent purchaser if there is a clear physical manifestation on the property
that would indicate this. Bank of MS (496)
!      In case, a fence was enough for inquiry notice that another party was claiming title, even
       though it was inconsistent w/ record title.
!      Therefore, there should be a personal inspection of property to determine if possession is

                                                 35
       in line w/ title.
!      An aerial inspection is probably enough for a large tract of land.


STATUTORY DEVELOPMENTS
Marketable Title Statutes
!     Legislative attempts to streamline title process, such as curtailing duty to search.
!     Period of time is typically 30 or 40 years, and until you find the root of title, which is the
      first conveyance before this statutory period.
!     Unless steps have been taken to preserve it, interest before the root of title do not affect
      land and cloud the title.
      "       Party must make clear intent to preserve claim. This is not common though.
!     Interests that are not barred:
      "       Re-filed interests from before root of title.
      "       Restriction that is clearly evidenced by use, including easements.
      "       Us or occupancy inconsistent w/ marketable title that would be apparent from
              reasonable physical inspection.
!     The statute were retroactive.
      "       Most courts have rejected claims they are unC, even though they take away prop.

Title Registration.
!      Legal costs are very high for buying property.
!      Purchaser’s attorney must examine title thoroughly to determine whether it is marketable.
!      This must be done every time land is sold.
!      The Torrens System is a much simplified method that has not caught on in the US.
       "        Judicial inquiry for every piece of property. Everything relevant would be
                entered into the land registration book. Buyers would get judicial certificate of
                title.
!      Title registration statutes are optional and very few parties do it. No real incentive.

ADVERSE POSSESSION
!   Allows parties who use land as though it’s theirs for long time to claim it as theirs.
    "       It is like a prescriptive easement, but instead of using land, you own it.
    "       If you don’t succeed on this claim, you can try for prescriptive easement.
!   The purpose is that it encourages productive use of land and the diligence of landowners.
    "       We also want to respect people’s claims, especially if they have developed it.
!   Some claim there should be compensation for owner, but there is not.
    "       Also environmental concern and over-development, especially on “wild lands.”
!   Many states have statutes that adverse possession does not run against those w/
    disabilities, minors, persons in prison, and those who are incompetent due to retardation
    or mental illness. Legislatures believe they cant adequately take care of the land.
!   Can apply to both real property and chattels- same requirements.
    "       It’s more complicated for chattels. It usually involves fine art- unique & valuable.

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Requirements (Chaplin, 507):
!      Actual and exclusive
       "       Doesn’t have to actually have to occupy the entire property. May include use.
       "       Exclusive- not sharing it w/ true owner.
       "       Use should be consistent in the same manner as others in the region use land.
               Grazing, tapping maple trees, logging is sufficient (Jarvis, 516).
!      Continuous and uninterrupted possession/use during statutory period, usually 10-20 yrs.
       "       May miss a month at a time, but in general must be more than occasional use.
               Seasonal activity can be sufficient.
       "       Eviction or permission to use will interrupt use.
       "       Multiple periods of possession can be joined and considered one continuous
               possession to meet statutory period- not broken when grantor conveyed to
               grantee. Carpenter, 513. “Tacking”- stretches held by multiple adverse parties
               (uninterrupted) can be combined.
!      Open and notorious
       "       Original owner need not have actual knowledge, just constructive.
       "       Use should be apparent to those who observe property regularly.
       "       Not open and notorious if vigilant owner would not know about adverse use.
               Underground use is not adverse b/c not easily discovered (Marengo, 521).
!      Hostile
       "       Using land as if it was your own- it’s an objective view of party’s use.
       "       State of mind does not matter- whether it was by mistake or on purpose.
       "       Preventing others from using the land is sufficient, b/c establishes dom & control.

Boundary line acquiescence- if boundary line is accepted for a certain amount of time, it
remains.

Courts are split about whether private individuals can claim adverse possession of public land.
!      In general, one cannot claim adverse possession to public land, but some states allow an
       exception if you can show that the gov’t did nothing w/ property at all. Jarvis, 516.
!      The gov’t cannot have plans to treat the land as public.

To interrupt adverse possession
!      File a suit
!      Interrupt use- possibly physical interruption w/o force. Need more than writing letter.


TITLE INSURANCE
!     Single payment, that helps guarantee title to an extent.
!     Important in real estate transactions. May replace attorney.
!     Many banks require it for mortgage, despite attorney.
!     Standard parts of K: Standard exclusions (531), standard exemptions (533)- e.g.

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       easements and things discovered on inspection, obvious defects.
!      After the conveyance of title, it converts to a warrantor’s policy.
!      It is still important for an attorney to do a thorough inspection though of the title and a
       physical inspection of the premises should be done before purchasing property anyway.
!      Title insurance is a much easier method of collecting than suing previous owner.

Courts are split as to whether Title Co. has a duty to buyer to notify of defects in title.
!      Court in Greenberg (540) said that company has no such duty.
       "        Court does not have to search. It’s search is only for its own benefit to calculate
                risk and decide whether to issue policy and the cost of the premium.
       "        You are only buying an insurance policy, and you are only protected to the limit
                of the policy.
       "        Therefore you can only sue for breach of K, not for tort of negligence.
!      Other courts say that company takes on implicit duty so there is a tort COA if the
       company does a negligent search and there is a defect. Might increase price of insurance.

Courts usually interpret terms in title insurance strictly. Gates, 545.
!      In case, court interpreted the term right of access in the title insurance to entail an actual
       right of access, not a convenient one. The “goat path” barely passable by jeep was
       sufficient to fulfill the requirement of access.
!      Dissent said term should be interpreted less strictly- access needs to be reasonable & safe.
!      FL court said title co. need not inspect property. Temporarily blocked access is OK.

DEEDS (548)
!    Instrument that serves as vehicle of conveyance of property.
!    Typically handed from seller to buyer at time of closing, for remainder of sale price.
!    Most jx’s have adopted short form deeds.
!    Things needed on deed:
     "      Names of parties
     "      Description of property that is subject of conveyance. It must describe the
            boundaries and parameters, not just the address. Should not be vague.
!    Ways to describe property (550):
     "      Metes and bounds: oldest. Start w/ a definite point on boundary and trace
            perimeter w/ reference. Must “close” property. Some can be vague.
     "      Government survey- primarily used in West. Divides land into progressively
            smaller parcels, down to 40 acres. Smaller than this, you use metes and bounds.
     "      Plat maps- prepared by developer. Recorded in clerk’s office upon approval by
            the local board.

Covenants of Title (553)
!     Warranty deed- most common. Seller covenants that the deed is free of defects, except
      for those which have been explicitly stated. Gives buyer recourse- can sue seller.
      "       Present- breached at once, when deed is passed.

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               -       Covenant against encumbrances
               -       Seisen- grantor owns property
               -       Grantor has the right to convey
       "       Future- breached if and when the buyer is disturbed.
               -       Covenant of quiet enjoyment and covenant of warranty- purchaser will not
                       be disturbed or evicted by one who has superior title.
               -       Future assurances- will provide documents in the future if required.
       "       These are no longer ALL required in most states. By many statutes, the word
               “warrant” implies that all six have been fulfilled.
!      Special warranty deed- Grantor only warrants against defects that the grantor created, not
       from those before his time of ownership. More limited form of protection.
!      Quitclaim deed- includes no title covenants. The grantor only agrees to grant what
       interests he has. Gives buyer burden of doing good search, b/c anything can be granted.

Courts are split as to whether warranty of title extends to zoning matters at all.
!      The existence of a local ordinance on the property is not enough for an encumbrance.
!      A majority say that an existing violation of zoning ordinance at the time of sale of the
       property is an encumbrance, so is a breach of the warranty (Wilcox, 555).
       "        The new owner could be subject to fine or enforcement proceeding as a result.
!       Others say that warranty of title does not extend to this matter.

Issues involving warranty:
!       There has to be an actual breach to claim a breach of title covenant.
        "       Something like an outstanding mortgage that is paid off is probably not breach of
                the title covenant. This is not an actual encumbrance b/c nothing owed and no
                damages.
        "       This is a different standard from marketability, which is a bit stricter.
!       Future covenants are only breached when there is an eviction. Foley, 558.
        "       Court says that order for specific performance to sell to another party is eviction.
!       Warranty protects against both known and unknown breach
        "       Knowledge of another K for sale does not matter in a breach of warranty claim.
        "       Buyer does not need to be bona fide purchaser to bring claim. Only the existence
                of breach matters.
!       Statute of limitation starts running when the warranty is breached.
        "       On future covenant, at time of eviction, on present cov, time of transfer of title.
!       Reasonable attorney’s fees and interest are recoverable if good faith effort to defend title.
        "       Consideration paid rule- other party holds onto money, so interest should be paid.
!       If property is improved by grantee, but then true owner get property back:
        "       Common law- no recovery. People need to check and insure title.
        "       Other statutes- owner is obligated to make some recompense.
!       A grantor of a warranty of title is only responsible up to the amount property was sold
        for.
        "       He should be not be liable for the (considerably higher) value of the property in

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               the near or distant future when the warranty of title is actually breached.
       "       Some courts may award more than consideration paid, but this is not common.

Present covenant DO NOT run w/ land, future covenant DO run w/ land. Proffitt, 563.
!      If there is a breach of a present covenant, you can only sue against immediate grantor.
!      If breach of future covenant, you can sue against previous owners as far back as breacher.
       "       To sue against future covenants, there has to be an eviction.
!      If a party pays off a mortgage of somebody who was not the immediate grantor, the party
       can only sue for value of mortgage that he has already paid off.
!      Cant sue against previous owners who had coveyed by quitclaim deed.

DELIVERY
!    Deed needs to be actually delivered in order to be effective. Chandler, 566.
     "       It does not need to be physically delivered to grantee to be effective though.
!    If the grantor leaves the deed with a 3p to give to somebody at some future point, the
     grantor must divest dominion and control over the deed though to deliver it.
     "       Majority said the intention to deliver is the controlling issue and that the ability to
             retrieve deed does not matter if it is merely technical.
             -       In case, the grantor’s intention and instructions were clear.
     "       Dissent said that a deed is not delivered if the grantor still has the ability to
             retrieve it, as he has not divested himself of ALL dominion and control.
             -       Not a delivery if only held by 3p for safekeeping.
!    One court said that if a party rejects a deed, it is also rejected for all of his remainders.

MERGER
!   Typically, a sale K merges into the deed. American, 572.
    "      The deed reflects the final intentions of the parties- sale K has been superceded.
    "      Therefore it is important that the deed reflect the full intention of parties- nothing
           less should be accepted as they may not be enforced if not in deed.
!   Court said this only applies to title matters though, including warranty on the title.
!   Collateral obligations (and agreements) on sale contract DO NOT merge into deed.

SELLER LIABILITY FOR CONDITION OF PREMISES
!    Old rule: caveat emptor- buyer beware, take “as is.”
!    New rule: Implied Warrant of Habitability.
     "       Only the builder would know about certain defects.
     "       Buyer of home assumes everything is in reasonably working order and that the
             builder will stand behind his workmanship.
!    In general, the builder can disclaim the liability if it is EXPRESS in the K. This is
     different from leases from landlords, who generally cannot disclaim the warranty.

Implied warrant is applied when a defect can be traced to the vendor-builder. Gaito, 574.
!      Only applies to “recently completed” (somewhat new) houses.

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       "       The amount of time that warrant applies is based on the defect b/c different
               defects take various amounts of time to manifest.
       "       Court said five years is not too long, depending on the defect.
!      Builder needs to meet a standard of “reasonable workmanlike practice.”
       "       The home need not be perfect, but just meet this standard.
!      Only applies to defects that are not easily discoverable.
!      House does not need to be uninhabitable to violate standards of implied warranty. It has
       to not meet the standards of workmanship.
!      The buyer needs to give the vendor-builder a reasonable opportunity to cure defect.

Damages for breach of implied warrant:
!    Preferred standard is that owner can collect for cost to make house meet standard.
!    BUT, f the cost to cure would be prohibitively expensive, then damages is the difference
     in value between the house in present state and one that meets standard of warranty.

When house resold by somebody other than vendor-builder, usually no warranty (Vetor, p. 583)
!     Vetor court adopts caveat emptor for used homes not sold by vendor builder.
!     Implied warranty doesn’t extend beyond vendor builder, tort possible if misrepresentation
!     Seller probably does not know more about home than buyer.

If person buying a used home, advise them to:
!       Get building inspector to look at house. Should have K provision requiring satisfactory
        inspection before sale. Even if sale K already signed, still good to have inspection.

Even if there is caveat emptor, can still sue for misrepresentation. Lyons (586)
!      Elements of fraudulent misrepresentation:
       "        1. Material representation of a past or existing fact.
       "        2. Representation is false.
       "        3. Representation is made w/ knowledge or reckless ignorance of its falsity.
       "        4. The representation causes a detrimental reliance by another.
!      It is not just puffery if misstatement relates to a major defect.
       "        In case, seller said, upon being asked, that he did not know of defects in home,
                even though he knew of a major termite infestation.
!      An “as is” provision in the K is NOT a defense to fraudulent misrepresentation.
!      Parol evidence rule does not preclude statements of fraud.
!      Concealment or covering up defects can be misrepresentation if it fulfills factors.

In many jx’s Seller has a Duty to Disclose certain matters (Johnson, p. 590)
!     Nonfeasance of not telling about a considerable defect can be a misrepresentation.
!     Not readily discoverable (obvious) material things about the house that the seller knows
      of that might affect the value of the house have to be disclosed.
!     If the seller does not make the disclosure, recission of K is available to the buyer and
      buyer gets all down payment(s) returned.

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!      There is no duty to disclose defects in commercial property in most places- only homes.
!      Some states have passed statutes about what needs to be disclosed
       "      They have forms w/ certain information- this leads to greater certainty.
!      Courts are hesitant to force sellers to disclose off-site info to buyers (e.g. nearby dump).

Seller sometimes has a Duty to Disclose Pyschological Factors that affect value (Reed, p. 597)
!       CA law that seller must disclose known defects that materially decrease value of home.
        "       In case, there was a gruesome mass-murder in house.
        "       This sort of defect is highly unlikely, so buyer not expect to inquire about it.
!       P has burden of showing market valuedecreased as a result of factor. D misrepresented if
        P can show that value is materially lowered as result of factor
!       Before Reed, courts limited the duty to disclose to physical defects.
!       The result of this decision was that states passed laws of things that sellers do NOT have
        to disclose. Examples include murder or suicide in home, resident w/ HIV, sex offender.

Even in caveat emptor followed, there is a duty to disclose if the seller creates a psychological
defect that the buyer is not likely to inquire about. Stambovsky, 600.
!       When seller creates a psychological defect in house, there is a duty to disclose.
!       In case, owner advertised house a being haunted. She created a reputation for the house
        and therefore a psychological defect which materially reduced its value.
!       Even if value was not reduced, court sided w/ buyer who did not want to live there as a
        result of the haunted reputation that seller created (that she learned about after buying).
!       It seemed like bad faith for the seller to tell everyone that the house is haunted (she
        advertised), but neglect to tell the out of town buyer. Buyer not likely to inquire about it.

ENVIRONMENTAL ISSUES
!    Environmental liability issues may impact transaction.
!    CERCLA
     "      Owner of site w/ hazardous products is strictly liable for cleanup cost.
     "      This causes unmarketability of land and abandonment.
     "      Many K’s now include clause for environmental audit, b/c of high cleanup costs.
     "      Good idea to get environmental test of property before buying.
!    Radon
     "      Naturally radioactive gas. Sales K’s in some places include clause for radon test.


ATTRIBUTES OF LANDOWNERSHIP
RIGHT TO EXCLUDE
Right to exclude is major right of being a property owner. You don’t need to give reason.
!      There are limits to your right to exclude though. Under certain circumstances your right
        to exclude fails (e.g., firemen if fire on property, police if crime on property).
!      Certain other things trump your right to exclude though.

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NJ SC said in State v. Shack (1971, p. 607) that property owner, farmer, could not bar access to
aid workers to the migrant workers on his property. Owner must also allow press onto property.
!      Owner is allowed to find out who is entering his property and ID who they are, but
       cannot exclude certain people b/c migrant workers are on his property too.
!      The court said that the migrant community is highly vulnerable and their needs as
       perceived by the court (legal and medical) trumps property owner’s right to exclude.

US SC said that private businesses can exclude political speech from property.
!      Most state courts have agreed w/ this.
!      Leafleters can distribute political speech elsewhere.
!      The difference w/ migrant population is that they are less advantaged, informed, and
       mobile, so they cannot access the aid elsewhere.
Courts are split over whether businesses may unreasonably exclude people.

FREEDOM OF ALIENATION

Courts put great importance on the freedom of alienation (sale). There are strict requirements for
restraint on the freedom of alienation, in which there is a reverter if condition is met. Casey, 613.
!       Restraints on alienation decrease the value of property. They are a cloud on the title.
!       For such a restraint to be valid (From Restatement):
        "       a. the restraint is a promissory restraint or a forfeiture restraint, and
        "       b. the restraint is qualified so as to permit alienation to some though not all
                possible alienees, and
        "       c. the restraint is reasonable under the circumstances, and
        "       d. if the restraint is a forfeiture restraint, the requirements of the rule against
                perpetuities are satisfied.
!       The court weighs the justification for the restraint against its severity/reasonableness.
!       Factors showing restraint is unreasonable:
        "       a. the restraint is capricious;
        "       b. the restraint is imposed for spite or malice;
        "       c. the one imposing the restraint has no interest in land that is benefitted by the
                enforcement of the restraint;
        "       d. the restraint is unlimited in duration;
        "       e. the number of persons to whom alienation is prohibited is large.
!       Wishes on a will must be weighed against the importance of keeping land alienable.
!       Court in Casey said that a restriction on only the daughter of the grantee was void as a
        matter of public policy. Court wanted to uphold freedom of alienation.

Preemptive right provision (right of first refusal) is not per se restraint on alienation. Smith, 616.
!     The holder of the right only has the right to purchase first when the owner wants to sell.
!     This is different from an option K, in which a person may buy the property at any time.
!     Preemptive right is a control device on property that can be useful in certain situations,

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    such as to keep the property in the family. So, not always a bad thing.
!   Requirements for such a provision (Restatement):
    "       Price needs to be reasonable. Price should be either fair market value (probably
            as determined by appraiser(s)) or by the seller’s desire to sell (the price is the
            lowest price that owner is willing to accept to sell the house).
    "       Needs to adhere to rule against perpetuities- limited to life of grantor plus 21 yrs
!   Provision is allowed even though it might deter potential buyers and brokers and will
    probably drive down the purchase price of the home b/c it is a restraint/cloud on title.
!   The holder of the preemptive right can get specific performance if the owner breaches by
    selling w/o offering the right of first refusal.
    "       Holder may exercise right of first refusal and purchase property.
!   Some state had decreased by statute the period for which preemptive rights can exist from
    the rule against perpetuities period. NC limited it at 30 years.




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