Class 2: Bailments, Easements Flashcards
Review: What is the difference between title assurance v title insurance?
Title assurance is a broad term to do with anyone to do with title to property
Title insurance is a specific contractual obligation
Review: What is the heart of the assurance system?
The public records system, the place where documents impacting land are recorded.
Review: Why title insurance if we do a title search?
Because public records are not always perfect, so title insurance serves as back-up to the recording system
Review: What title system does CND use?
How does it work?
What does the US use?
A Torrens title system
Owners are issued a Torrens Certificate (also referred to as a certificate of title). This Certificate assigns unassailable ownership of real property to the registered titleholder.
The certificate acts as the ultimate authority on the title to a property, and its legal supremacy makes recording deeds unnecessary.
Every state uses their own recording act making rules
Review: Hypothetical:
O mortgages Blackacre to A, but does not record the interest. O then later conveys Blackacre to B, who does not know of the mortgage.
What happens at common law?
Under most recording acts?
At common law, B takes the land subject to A’s mortgage because title was determined (at common law) by the timing of the conveyance, and A got a mortgage on BlackAcre first. (B would need to pay the mortgage)
Under most recording acts, a subsequent bona fide purchaser is protected against prior unrecorded interests. So B would be protected.
Important: The common-law rule of “first-in time, first-in right” continues to control UNLESS the person can qualify under the state’s recording act (which most people can).
Start of New Content:
Explain the three different types of US recording jurisdictions.
Race Jurisdiction
Notice Jurisdiction
- Whats the tip of a notice jurisdiction?
Race-Notice Jurisdiction
Race jurisdictions: Under a race statute, as between successive purchasers of property, the person who wins the race to record prevails.
SIMPLIFIED: Whoever records an interest first wins.
Notice jurisdictions: If a subsequent purchaser has notice of a prior unrecorded instrument (deed) the purchaser cannot prevail over the prior purchaser.
SIMPLIFIED: If someone buys a property and knows that someone else has interest in it, they lose. If not, they win.
TIP: Start from the bank. If they didn’t have notice, they win.
Race-notice jurisdictions means a purchaser is protected against prior unrecorded interests only if the purchaser:
(1) is without notice of the prior interest and
(2) records before the prior interest is recorded.
SIMPLIFIED: Purchaser gets interest if they have no notice of anyone else AND records before anyone else.
What are some characteristics of a race statute?
Knowledge is irrelevant, it’s just a race.
Anything off the record means nothing.
What are some characteristics of a notice statute?
Emphasis’s fairness.
If someone buys a property and knows that someone else has interest in it, they lose.
Explain the three types of notice regarding a notice statute.
(2 and 3 are constructive notice)
Actual Notice
Record Notice
Inquiry Notice
(1) Actual notice: is where a person is personally aware of a conflicting interest in real property, often due to another’s possession of the property.
(2) Record notice: Notice of a prior interest that would be revealed by doing a title search.
(3) Inquiry notice: Notice based on a purchaser’s duty to investigate relevant circumstances.
(Ex. Are there circumstances that would lead a reasonable person to inquire about another person’s interest in the property?)
What are the characteristics of a race-notice statute?
Race-notice tends to strike a balance between the two competing interests of Race & Notice statutes.
Race-Notice statutes help to eliminate lawsuits turning on extrinsic evidence about which deed was delivered first. And helps to avoid “notice” only questions.
Race-notice also punishes non-recording, so it helps make the records complete.
Note: Michigan is a race-notice state, as are the remaining half of the states.
Hypothetical:
O who is the owner of Blackacre conveys Blackacre to Alice who does not record the deed.
O then conveys Blackacre to Bob for valuable consideration.
Bob has NO knowledge of Alice’s deed.
Who wins under a notice jurisdiction?
A race-notice jurisdiction?
In a notice jurisdiction, Bob prevails even though Bob did not record the deed from O.
In a race-notice jurisdiction, neither would win as the test is 1)buying without notice AND 2) Win the race to record.
Here both people did buy without knowledge. But the race is ongoing.
To see whether Alice or Bob wins depends on whether O delivered Alice’s deed or Bob’s deed first (common law principle)
But this allegation of delivery of the deed wouldn’t matter in a race-notice jurisdiction if one of the deeds has been recorded.
Then that person wins.
Hypothetical: He said this one likely on the exam
O, owner of Blackacre, conveys Blackacre to Alice, who does not record the deed.
O subsequently conveys Blackacre to Bob for valuable consideration.
Bob has NO knowledge of Alice’s deed.
But after O’s conveyance to Bob and BEFORE Bob records, Alice finally records her deed.
Thereafter, Carl purchases Blackacre from Bob.
Would Carl prevail over Alice in a notice jurisdiction?
Shelter Rule: When you buy from a person, you are protected if your seller was protected.
Even though Alice’s recording puts Carl on notice as to Alice’s deed, Carl has no idea whether Bob had notice of Alice’s deed when Bob purchased, which is the main inquiry. This is known as the shelter rule.
Under the shelter rule, a person who takes from a bona fide purchaser that is protected by the state’s recording act has the same rights as the person they bought the property from.
(Thus, Carl is protected if Bob was protected.)
Carl Wins.
Hypo: He said this one likely on exam
O conveys Whiteacre to Alice, who does not record.
O subsequently conveys to Bob, who purchases in good faith and for valuable consideration, but does not record.
Alice then records.
The day after, Carl purchases from A in good faith and for valuable consideration.
Bob then records.
Carl then records.
Who prevails under a notice statute? (Give me the 1st, 2nd, 3rd)
A race-notice statute? (Give me 1st, 2nd, 3rd)
This will be an exam question
1) Carl prevails in a notice jurisdiction. WHY?
My answer: Alice is in third place regardless of her recording.
B is in second place and beats Alice as he had no notice.
C is in first place because he bought after Bob and he had no notice.
Since B wins over A, and C bought last without notice, he wins.
Prof Answer: Bob would prevail over Alice because Bob is a subsequent BFP. But Carl would prevail over Bob because Carl had no notice of Bob’s claim
2) Carl also prevails in a race-notice jurisdiction. WHY?
Alice bought without notice and recorded first.
Bob bought without notice and recorded second.
Carl bought without notice an recorded last.
Alice prevails over Bob because Bob did not record before Alice. So Alice can convey good title to Carl.
Note: Even if Carl had notice of Bob’s claim, Carl would prevail over Bob because of the shelter rule.
Hypo:
On July 1, Oscar conveys Blackacre to Alice. On July 4, Alice records the deed, which is properly indexed. A few weeks later, on July 20, Oscar conveys Blackacre to Bob for valuable consideration. Bob has no actual knowledge of the earlier conveyance to Alice. The next day (July 21), Bob records the deed.
Who wins in a notice statute jurisdiction? Why?
Who wins in a race-notice statute jurisdiction? Why?
Notice Jurisdiction:
Alice prevails because Bob had record notice of the conveyance from Oscar to Alice.
Race Notice Jurisdiction:
Alice prevails because Alice did not have notice of any prior interests and won the race to record against Bob.
On September 15, Olivia conveys Blackacre to Amy, who still has a month on her apartment lease, so she does not take possession of the property. A week later, on September 22, Olivia then conveys to Barb. Barb has no actual knowledge of the conveyance to Amy. Barb records her deed on Sept 24. Amy records her deed on September 25.
Who wins in a race statute jurisdiction? Why?
Who wins in a notice statute jurisdiction? Why?
Who wins in a race-notice statute jurisdiction? Why?
Race jurisdiction?
Barb wins because Barb was the first to record
Notice jurisdiction?
Barb wins in a notice jurisdiction because they had no actual, inquiry, or record notice of Amy’s interest.
Race-notice jurisdiction?
Barb wins in a race-notice jurisdiction because Barb had no notice of Amy’s interest and won the race to record.
On April 1, Owen conveys Blackacre, a rural piece of farmland with no house, to Art, who doesn’t move into the property. Two weeks later, on April 15, Owen conveys a mortgage in his property to Banks, who does not know about the conveyance to Art. Art then records his deed to Blackacre on April 16. On the next day, a Saturday, Art conveys Blackacre to Charlie, who plans on turning the farmland into a subdivision. Charlie does not know about the mortgage to Banks. Two days later, on Monday, Banks records the mortgage interest.
- Does Charlie take Blackacre subject to the mortgage interest to Banks in a race jurisdiction? Why?
- Would Charlie take subject to the mortgage in a notice jurisdiction? Why?
- Would Charlie take subject to the mortgage in a race-notice statute jurisdiction? Why?
- Charlie would not take Blackacre subject to the mortgage because Art prevails over Banks by recording before Banks did. Thus, Charlie is protected by the shelter rule because Art (the person Charlie got the property from) would prevail over banks.
- Charlie would prevail in a notice jurisdiction because he had no notice of Banks’s interest.
- Charlie would win in a race-notice jurisdiction because of the shelter rule. Art would win over Banks in a race-notice jurisdiction because Art did not have notice and recorded first. Thus, since Charlie took title from Alex, Charlie is protected by the shelter rule.
What is an easement?
Give a few examples
An easement is a non-possessory right to use or enter the land of another
Land at the end of the driveway
What is a affirmative easement?
What is a negative easement?
Affirmative easements give the interest holder a right to do some act on land that someone else owns. (e.g. you can go into my home and make a pipeline)
Negative easements forbid one landowner from doing something on land that might harm a neighbor. (e.g., cannot develop the land commercially
Hypothetical:
In a deed, W agrees not to allow trees to grow on her property that are more than 30 feet tall in order to preserve the view that M has over W land.
Is this an affirmative or negative easement?
(Trick Question)
It can be both depending on who is doing the tree trimming.
It is a negative easement if W will do the tree trimming. But if M is permitted to enter W’s land and do the tree trimming, then it is an affirmative easement
Hypothetical:
Mary has an easement of way through a building on Wendy’s adjacent land. Wendi later demolishes the building and builds a new, state-of-the-art building.
(1) Could Mary use her easement to prevent Wendy from demolishing the building?
(2) If not, does Mary’s easement of way transfer to the new building?
1) No. She has an affirmative easement because she is allowed to cross Wendy’s property. She would need a negative easement to prevent the building of the building, which is not what she likely has in the easement of way.
2) It depends on whether Mary’s easement is appurtenant to the land and not the structure. The language in the easement would control. If it were an easement of way over Wendy’s land, then it would extend to the new building.
What is a dominant estate in regards to easements?
What is a servant estate in regards to easements?
A dominant estate the one who gets the easement.
A servant estate the one who has the easement on it. They serve the domination.
What is a water easement?
A duty not to interfere with water flow to the dominant estate (but only if the dominant estate has some system that puts the water to use for power)
What is a view easement?
View easements – duty not to block a view
What is a solar easement?
Solar easements – Amounts to a “don’t block my sun” easement.
What is an easement appurtenant?
An easement appurtenant gives the easement rights to whomever owns a parcel of land that the easement benefits.
What is an easement in gross?
An easement in gross gives the easement rights to some person – it isn’t dependent on ownership of land.
whats the presumption if there is an issue if it is a easement in gross or in appurtenant?
Court will assume it is an easement in appurtenant.