Property

Question 1

Ownership/Acquisition Disputes –> Adverse Possession: Generally

Answer 1

Legally sanctioned stealing of title to land away from the rightful owner (the law favors productive use of land).

Three major components:

(1) physical,
(2) mental, and
(3) time.

Question 2

Ownership/Acquisition Disputes –> Adverse Possession: Physical Component

Answer 2

Majority
AP’or must: actually, openly, notoriously, and exclusively occupy the land in a manner suff to put the true owner on reasonable notice of a CoA (trespass) against the AP’or.

Minority
Reqs AP’or to also pay taxes on the property.

Question 3

Ownership/Acquisition Disputes –> Adverse Possession: Mental Component

Answer 3

Rule
AP’or has to occupy the land with a suff’ly hostile intent.
—> Hostile = Claiming the land as your own.
—> Two ways to satisfy hostile intent:
(1) Claim of right (claiming the land as your own); or
(2) Color of title (AP’or believes he/she has good title to the property under a deed but does not).

Permission to be on the land destroys hostile intent.
—-> Mere knowledge of the AP’or by the true owner does not imply permission.

Co-Tenancy Situation

• —> It is difficult for one co-tenant to AP against another.
• —> The only way it can be done is by one co-tenant ousting the other co-tenant from making any use of the property.

Split of authority on whether encroachment is hostile intent:

• —> Majority Rule: A mistaken encroachment is suff hostile intent.
• —> Minority Rule: Hostile intent exists only if the person who was doing the encroaching intended to encroach.

Question 4

Ownership/Acquisition Disputes –> Adverse Possession: Time Component

Answer 4

Rule
An AP’or has to be on the land continuously for the statutory period.
—-> CL is 20 years.
—-> Otherwise, it is determined by statute w/in the jdx.
—-> “Continuously” is a question of fact based on the nature of the land and the use to which it is being put.

Tacking
Combines AP’ors periods of possession in order to meet the statutory req/ment.
—-> There must be a transfer from one AP’or to another in order to allow for tacking.

Question 5

Ownership/Acquisition Disputes –> Adverse Possession: Scope of What the Adverse Possessor Obtains

Answer 5

(1) Generally, once the claim has ripened, the AP’or can only claim that portion of the land actually occupied.

Exception: An AP’or enters under color of title and occupies a significant portion of the parcel described in the flawed deed.
—> When the AP’or completes the statutory period, he/she can claim the entire parcel described in the flawed deed.

(2) An AP’or typically gets whatever the true owner has.
(3) Future interests cannot be obtained by the AP’or until they become presently possessory.

Question 6

Ownership/Acquisition Disputes –> Adverse Possession: Disability

Answer 6

A disability (infancy, incompetence, imprisonment) can suspend or toll the running of the SoL if the disability exists at the time the AP starts.
----> The AP period begins to run once the disability ends (e.g., the true owner gets out of jail or turns 18).

Question 7

Ownership/Acquisition Disputes –> Adverse Possession: Rights of the Adverse Possessor and True Owner

Answer 7

True Owner:
—-> Can eject the AP’or and collect damages up to the point the statutory period has run.

Adverse Possessor:

• —> When the AP begins, the AP’or is considered to be the owner against the entire world except the true owner.
• —> Once the SoL runs, the AP’or is the true owner as of the date he/she entered the land.

Question 8

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: Before Closing - K Issues (Defenses to Formation - SoF)

Answer 8

The SoF reqs a writing for a transfer of an interest in real property.

The writing must be signed by the party to be charged and must include:

(1) Description of the property;
(2) Description of the parties;
(3) Price; and
(4) Any conditions of price or payment, if agreed on.

Exceptions

(1) Doctrine of Part Performance
- –> May be used to enforce an otherwise invalid oral K of sale, provided the acts of part performance unequivocally prove the existence of the K.
- —> A showing of at least 2 of the following 3 facts must be made:
1. Payment of all or part of the purchase price;
2. Taking of possession; or
3. Making substantial improvements.
(2) Equitable and (under the modern trend) promissory estoppel may be used to prove an oral K for the sale of land.
- —> Equitable estoppel is based on an act or a representation.
- —> Promissory estoppel is based on a promise.

Question 9

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: Before Closing - K Issues (Equitable Conversion)

Answer 9

When a land-sale K is formed, at that point there is a bifurcation of title.

• —-> Equitable title passes to the buyer.
• —-> Legal title remains with the seller until the deal closes.

Majority Rule:
—–> The RoL is deemed to follow equitable title; therefore, the risk of loss is on the buyer.

Uniform Vendor and Purchaser Act (Minority Rule):
—–> The RoL remains with the seller until the legal title or possession of the property passes to the buyer.

Question 10

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: At Closing - Merger (Generally)

Answer 10

Covenants in a land-sale K merge into the deed at closing (can only sue on deed).

Merger DOES NOT apply to COLLATERAL matters (e.g., if seller agreed to remove a junk car from the property prior to closing and failed to do so).

Question 11

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: At Closing - Marketability of Title

Answer 11

Marketable Title
Every land sale K, unless expressly stated otherwise, contains an implied covenant of marketable title.
—-> This means that the seller must deliver a title at closing that is reasonably free from defects in both fact and law (not perfect title).

Defects may include:

(1) Unpaid mortgage or lien;
(2) Covenant or easement that restricts use of the land;
(3) Title acquired by AP until the AP’or quiets title; or
(4) Existing condition on the land that violates a zoning ordinance.

This covenant only manifests itself at the date of closing.
—-> Majority Rule: A seller may use the proceeds of the sale to remove a cloud on the title and make it marketable.

Question 12

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: After Closing - Sue on the Deed (Type of Deed)

Answer 12

Merger Doctrine
Bc the covenant of marketable title is implied in the K, and the K merges into the deed, the buyer cannot assert it and must sue on any covenants now contained in the deed.

(1) Quitclaim Deed
- –> The buyer cannot sue because this is an “as-is” deed (no warranties/covenants), and the seller conveys whatever interest she has.

(2) Warranty Deed
The buyer can sue on the deed through one of the covenants of title contained in the warranty deed:
1. General Warranty Deed
—> Contains all six covenants of title, which covers the period prior to the sale.
—> The seller warrants there are no defects in the chain of title.
2. Special Warranty Deed
—> May contain some, or all, of the covenants and typically limits liability only to the period of the seller’s ownership of the land.
—> The seller warrants that no defects have occurred during his or her ownership.

Question 13

Ownership/Acquisition Disputes –> Ownership via Land-Sale Contract: After Closing - Sue on the Deed (Reqs for Deeds)

Answer 13

3 req’ments for a valid conveyance: (1) donative intent (execution), (2) delivery, and (3) acceptance

(1) Execution
- –> The grantor must intend to transfer an interest immediately to the grantee, if the grantor intends the deed to take effect only on the death of the grantor, formalities of a will must be observed.
(2) Delivery
- –> Delivery exists if the grantor has the mental intent to transfer the property to the grantee.
- –> Ways to Deliver the Deed:
1. Grantor Gives Deed to Grantee
- –> Rebuttable presumption of delivery that may be rebutted by extrinsic evidence that shows that the grantor did not intend a present transfer.
2. Grantor Retains the Deed
- –> Rebuttable presumption of no delivery; may be rebutted by extrinsic evidence that shows a delivery was intended.
3. Grantor Gives Deed to a Third Party to Give to Grantee (escrow)
- –> Doctrine of Relation Back (or relation-back doctrine): Conveyance to the grantee relates back to the date the grantor gave the deed to a 3rd party.
(3) Acceptance
- –> Acceptance is presumed if the transfer is beneficial to the grantee.
- –> If the grantee refuses to accept, there is no transfer of property.

Question 14

Ownership/Acquisition Disputes –> Title Affected By Recording Act (Rule)

Answer 14

There is a strong PRESUMPTION that first in time is first in right.

• —> The first person to have a valid claim to property via AP, K, or deed is the one who presumptively owns the property.
• —> Recording acts can CHANGE this by PROTECTING subsequent purchasers.

Question 15

Ownership/Acquisition Disputes –> Title Affected By Recording Act (3 Types)

Answer 15

Race Statute: The person who records first prevails.

Notice Statute: A bona fide purchaser (BFP) for value who takes w/o notice of any other claim prevails.

• –> Pays Value = Paying more than a nominal amount (i.e., purchase price or reasonable amount).
• –> Types of Notice:
  (1) Actual Notice: Where you actually know something; what knowledge you actually possess.
  (2) Constructive Notice: Comes through the recording acts; as soon as you record a deed, you give constructive notice to the world that the property is yours.
  (3) Inquiry Notice: Arises from info that is learned or could have been learned that would lead a reasonable person to inquire further; held to a standard of notice what a reasonable person would have learned.

Race-Notice Statute: An unrecorded conveyance is invalid against a subsequent BFP who takes w/o notice and records first.

Question 16

Ownership/Acquisition Disputes –> Title Affected By Deed of Trust

Answer 16

Debtor (settlor) borrows $ from the creditor and executes a deed to the property.
—–> This deed to the property is given to a 3rd party (the trustee) who holds on to the deed and will not return the deed to the debtor until the debt is paid.

Question 17

Ownership/Acquisition Disputes –> Title Affected By Mortgage: General

Answer 17

An INTEREST in real property that is designed to SECURE performance of an OBLIGATION (usually repayment of a DEBT).
—–> Mortgages must be in WRITING to satisfy the SoF.

Mortgagor = Debtor, person borrowing the money—issuing a mortgage to the lender.

Mortgagee = Bank; lender—creditor receiving the mortgage.

2 INSTRUMENTS that make up a mortgage:

(1) MORTGAGE: Doc that represents an interest in the land.
(2) NOTE: Represents the PERSONAL OBLIGATION of the debtor to repay the debt.
- —-> Generally, the mortgage is deemed “to follow the note,” meaning that when the note has been transferred, the mortgage securing it automatically follows to the transferee.

MORTGAGEE REMEDIES - choice to sue:

(1) IN PERSONAM: Sue on the note; or
(2) IN REM: Foreclosing on the land through the mortgage.

Question 18

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Purchase-Money Mortgage

Answer 18

A mortgage that covers part, or all, of the purchase price (e.g., as opposed to a mortgage obtained to remodel a kitchen).

• —-> A PMM that is recorded has priority over other types of mortgages.
• —-> To maintain the top priority, the PMM has to be recorded to give constructive notice to future mortgages.

Things to note about PMMs:

(1) Vendor-Purchase Money Mortgage
(2) The buyer borrows $ from a third party (typically a bank) to pay off the purchase price and gives a mortgage.
- —-> Note: this has to be one continuous operation; there are not gaps in time for these occurrences.

Question 19

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Future-Advance Mortgage

Answer 19

A future-advance mortgage (FAM) is any line-of-credit (e.g., construction loan) or home-equity loan where $ can be borrowed as it is needed.
—> If the lender has discretion to advance funds depending on mortgagor’s financial situation, it is called an optional FAM as opposed to an obligatory FAM.

The most common issue involving FAMs is the fact that the arrangement is being executed at the present time, but the funds are not being accessed until a date in the future.
—> The question then involves determining at what point the mortgage attached to the property.
—> If proper notice is given to future creditors, the FAM interest attaches on the date that the obligatory FAM arrangement is made, not on the date that the funds are actually accessed.
—–> In an optional FAM, if the mortgagee has notice when it makes the advance that a subsequent creditor has filed, then the FAM loses its priority.
—–> Split in jdxs on what constitutes notice:
Majority view—actual notice is required; Minority view constructive notice is suff to protect the creditor.

Question 20

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Installment Land-Sale K

Answer 20

The buyer buys land and agrees to pay off the purchase price in installments.

• —-> The buyer takes possession today, the seller holds on to the deed until the debt is entirely paid.
• —-> Typically, these types of Ks contain a “time is of the essence” clause.

What happens if there is a DEFAULT?
If the K states that time is of the essence, the seller can declare that the buyer breached the K and the seller keeps the land and all payments to date.
—–> Bc this is such a harsh result, cts look to avoid this outcome and see if time really is of the essence.
—–> If the buyer was previously late and the seller accepted payment, cts will waive the time is of the essence clause.

Question 21

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Absolute Deed

Answer 21

A debtor borrows $ then issues a deed to the property to the creditor that looks absolute on its face.
—–> Extrinsic evidence would be req’d to est that this was not meant to be an absolute conveyance, rather a disguised mortgage arrangement.

Question 22

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Security Relationship Theories - What Does a Mortgagee Receive?

Answer 22

(1) Lien Theory:
- —-> The mortgagee receives a lien on the property, the mortgagor retains the right to possess the property and the rights to rents and profits from the mortgaged property.

(2) Title Theory:
- —-> The mortgagor retains possession until default, the mortgagee has the right to rents and profits produced by the mortgaged property.

(3) Intermediate Theory:
- —-> Lien theory deemed to apply until default and then the title theory kicks in.
- —-> The effect is that prior to default, the mortgagor retains the right to possession and rents/profits; upon default, the mortgagee is entitled to possession and rents/ profits.

(4) Duties:
- —-> A person in possession has the duty to manage the property in a reasonably prudent manner (i.e., cannot commit waste).

Question 23

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Transfers By Mortgagor

Answer 23

The mortgagor (borrower) can make 3 types of sales of land encumbered by a mortgage:

(1) The buyer takes “subject to the mortgage”
- —-> the buyer has no responsibility to pay on it, either before or after foreclosure;
(2) The buyer “assumes the mortgage”
- —-> the buyer becomes personally liable for it, along with the original borrower; or
(3) The buyer “assumes the mortgage” plus a novation (new K) w/ the lender
- —-> the buyer alone is personally liable for paying the mortgage.

In each case, the mortgage remains on the land and is available if the mortgagee (lender) needs to foreclose on it.

Assumption

• —-> If the grantee has assumed, then the grantee is primarily liable and the grantor is secondarily liable.
• —-> If the debt falls into default, the creditor can sue the grantor and the grantor can get an exoneration (ct order compelling the grantee to pay the debt paid by the grantor).
• —-> If the grantor makes payments following the transfer, the grantor can sue the grantee for reimbursement.
• —-> Subrogation: grantor is secondarily liable; can pay off debt to debtor, and then be subrogated to mortgage and note.

Due-On-Sale Clause
—–> Gives the mortgagee the option to require that the entire debt be due and payable upon any transfer (enforceable if in the mortgage).

Question 24

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Transfers By Mortgagee

Answer 24

Mortgagee (lender) may transfer the note and the mortgage, which travel together.

Question 25

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Foreclosure (Remedies on Default) - Types of Foreclosure

Answer 25

(1) JUDICIAL Foreclosure:
- —-> Judicial proceeding w/ pleadings, service of process, etc.
(2) PRIVATE SALE/Power-of-Sale:
- —-> Occurs w/o judicial action, pursuant to a power-of-sale clause included in the mortgage docs.

There is no limit to the # of mortgages on a property that one may have (“first in time, first in right” principle applies).

Question 26

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Foreclosure (Remedies on Default) - Deficiency Judgment

Answer 26

When the foreclosure sale raises less $ than the amount of the outstanding debt.

Question 27

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Foreclosure (Remedies on Default) - Acceleration Clause

Answer 27

Makes the entire debt become due on the happening of an event, such as a default or sale.

Question 28

Ownership/Acquisition Disputes –> Title Affected By Mortgage: Foreclosure (Remedies on Default) - Redemption

Answer 28

Redemption will stop the foreclosure if the debtor pays off all the debt (all payments due and fees paid).

• —-> Debtor’s remedy
• —-> Note: If there is no acceleration clause, the mortgagor can bring the loan current and avoid foreclosure

Equitable Right of Redemption:

• —-> Right automatically exists in interest of equity.
• —-> Exists any time up until there has been a foreclosure sale; until that time, the debtor can redeem by paying off the debt or bringing the loan current, if allowed.
• —-> As soon as the foreclosure sale occurs, there is no more equitable right of redemption.

Statutory Right of Redemption:
—–> Debtor will have a limited time (6-12 months) following the foreclosure sale to go to the buyer and force them to sell the property at the foreclosure price.

Question 29

Use Disputes –> Easements: Definitions (Servient Estate v. Dominant Estate)

Answer 29

Servient Estate = The estate that is burdened by the easement (must always have a servient estate).

Dominant Estate = The estate that is benefited by the easement (do not always have to have a dominant estate).

Question 30

Use Disputes –> Easements: Definitions (Easement Appurtenant v. Easement in Gross)

Answer 30

Easement Appurtenant = Benefits a parcel of land; the dominant estate.

Easement in Gross = Benefits a person or entity rather than a piece of land (no dominant estate).

Question 31

Use Disputes –> Easements: Creation - Generally

Answer 31

Can be created:

(1) expressly,
- —-> A writing must satisfy the Statute of Frauds.
(2) by implication, or
(3) by prescription.

Question 32

Use Disputes –> Easements: Creation - By Implication (Easement Implied by Prior Use)

Answer 32

4 Reqs:

(1) Severance of title to land held in common ownership;
(2) The use giving rise to the easement was in existence at the time of the severance;
(3) The use was apparent and could be discovered upon a reasonable inspection; and
(4) At the time of severance, the easement was necessary for the proper and reasonable enjoyment of the dominant tract.

Question 33

Use Disputes –> Easements: Creation - By Implication (Easement By Necessity)

Answer 33

2 Reqs:

(1) Common ownership of the dominant and the servient estate, then severance; and
(2) Strict necessity for the easement at the time of severance.

Question 34

Use Disputes –> Easements: Creation - By Prescription (Adverse Possession)

Answer 34

If someone actually, openly, notoriously, and exclusively uses land with hostile intent for the statutory period.

Question 35

Use Disputes –> Easements: Scope

Answer 35

If an express easement states a particular use, that is the only allowable use.
—–> Otherwise, an easement can be used to the extent that it is reasonably necessary to do so.
• This does not terminate the easement; however, the holder of the servient estate can sue for an injunction or damages.

The holder of the easement may do what is reasonably necessary to maintain the easement, even if it interferes with the servient owner’s use of their property.

Question 36

Use Disputes –> Easements: Termination - Destruction of the Servient Estate

Answer 36

Generally, destruction of the servient estate will terminate an easement unless the owner of the servient estate intentionally caused the destruction.

Question 37

Use Disputes –> Easements: Termination - Based on the Actions of the Easement Holder

Answer 37

(1) Merger of Title:
- —> Occurs when the owner of the dominant estate also acquires the servient estate.

(2) Written Release:
- —> Expressly terminates the owner’s rights in the easement (must satisfy the SoF).

(3) Abandonment:
- —> Requires proof of intent to abandon and an affirmative act in furtherance of the intent.

(4) Estoppel:
- —> The owner of the servient estate foreseeably and detrimentally relies on the easement holder’s action/abandonment.

(5) Severance:
- —> The owner of the dominant estate tries to sever the easement from the dominant estate (only arises with easements appurtenant).

Question 38

Use Disputes –> Easements: Termination - Based on the Actions of the Owner of the Servient Estate

Answer 38

(1) Prescription:
- —> The owner of the servient estate interferes with the use of the easement for the statutory period.

(2) The Servient Estate is Sold to a BFP:
- —> Pays value and takes w/o notice.

(3) End of Necessity:
- —> For an easement created by necessity, the easement ends when the necessity ends.

Question 39

Use Disputes –> Profits

Answer 39

A profit is a nonpossessory interest in land.

• –> The holder of the profit has the right to go on someone else’s land and take something off of it.
• –> EX: Permission to log trees of a certain size on the owner’s land.

Creation:
—-> Can only be created expressly or by prescription (analysis is otherwise the same as easements).

Profits are transferable.

Termination:
—-> Same as easements.

Question 40

Use Disputes –> Licenses: Generally

Answer 40

A license is a privilege, usually to do something on someone else’s property—i.e. go on the land.

• —> This is a personal right, not an interest in the land.
• —> Can be oral (no SoF analysis).
• —> Licenses are freely revocable at any time, for any reason.
• —> Licenses are not transferable unless the licensor so intends.
• —> Licenses terminate on the death of the licensor or the conveyance of the servient estate.

License Coupled w/ an Interest
—> The licensee purchases personal property that is located on the licensor’s property and is given permission to come onto the land to claim that property.

Executed License
—> The licensee expends $ or labor in reliance on the license; license is irrevocable until the person gets value out of the expenditure.

Question 41

Use Disputes –> Covenants: Covenants v. Equitable Servitudes

Answer 41

Covenants when breached lead to an award of damages.
—-> Equitable servitudes lead to the granting of an equitable remedy, such as an injunction.

An implied reciprocal servitude, where one owner sells lots w/ restrictions that benefit the land retained by that owner, after which the owner cannot violate the same restriction.
—-> The restriction becomes mutual, benefits that owner’s land, and the land sold.

Question 42

Use Disputes –> Covenants: Creation and Enforcement

Answer 42

Creation: For a covenant to run with the land, the following elements must be met (mnemonic: PINT): Privity, Intent, Notice, and Touch and Concern.

• –> To enforce benefit of covenant:
  1) Intent to run w/ land
  2) Vertical privity
  3) T & C land
• –> To enforce burden of covenant:
  1) Intent to run w/ land
  2) Notice
  3) Horizontal and Vertical Privity
  4) T & C Land

Question 43

Use Disputes –> Covenants: Creation - Privity

Answer 43

Horizontal Privity = The relationship between the original covenantor and covenantee.

Requires privity of contract in connection with the land.

• —> Landlord/tenant
• —> Grantor/ grantee
• —> Mortgagor/mortgagee

Vertical Privity = The relationship between an original party to a running covenant and the successor in interest to the original party.
—-> In order for the burden to run, privity of estate will only exist when the holder of the servient estate transfers all of his interest in the servient estate to the new owner.

Question 44

Use Disputes –> Covenants: Creation - Intent

Answer 44

The writing (SoF applies) must include language that shows the parties’ intent for the covenant to run w/ the land and bind successors in interest.

Question 45

Use Disputes –> Covenants: Creation - Notice

Answer 45

The current owner of the servient estate must take w/ notice of the restriction
—-> Req’ment on servient side only.

Recordation will provide notice.

• —> Actual Notice (what you know).
• —> Constructive Notice (recordation).
• —> Inquiry Notice (you learned enough information that would lead a reasonable person to inquire further, but failed to do so).

Question 46

Use Disputes –> Covenants: Creation - Touch and Concern the Land

Answer 46

Servient Estate: The restriction must reduce the use and enjoyment of the servient estate.

Dominant Estate: The restriction must increase the use and enjoyment of the dominant estate.

Affirmative restriction (reqs burdened estate to do something) v. negative restriction (reqs burdened estate not to do something)

Question 47

Use Disputes –> Covenants: Covenants of Title in General Warranty Deeds - Present Covenants

Answer 47

Do not run w/ the land and can be breached only at the time of closing.
—–> The buyer’s successors in interest are unable to sue on these covenants.

Three Kinds:

Seisin: The grantor promises he or she owns the property.

Right to Convey: The grantor promises he or she has the power to convey the property.

Covenant against Encumbrances: The grantor promises there are no encumbrances (visible or invisible) on the property.

Question 48

Use Disputes –> Covenants: Covenants of Title in General Warranty Deeds - Future Covenants

Answer 48

Run with the land and breach can be at the time of closing or afterwards

Three Kinds:

Quiet Enjoyment: The grantor promises that the grantee will not be disturbed by a third party asserting a valid claim to the land.

Warranty: The grantor promises to defend the grantee against any third-party claim.

Further Assurances: The grantor promises to do everything reasonably necessary to perfect the grantee’s title.

Question 49

Use Disputes –> Equitable Servitudes: Creation

Answer 49

Touch and Concern the Land:

(1) The burden must run with the servient estate;
(2) The benefit must run with the dominant estate.

Intent: The writing (SoF applies) must include language that shows the parties’ intent for the restriction to run with the land and bind successors in interest.
—–> NOTE: If the P cannot show intent in a writing for the covenant to run, he may nevertheless establish intent by showing a common scheme.

Notice: The current owner of the servient estate took with notice (actual, constructive, or inquiry).

Relief: Can be enforced in equity through an injunction; damages are not available.

Question 50

Use Disputes –> Implied Reciprocal Servitude

Answer 50

To create an implied reciprocal servitude, look for a filed declaration containing the restrictions (called CC&R’s – covenants, conditions, and restrictions).

• —> The SoF does not apply (no req of a writing, bc it can be implied).
• —> Works for negative restrictions only.

One way to impose a reciprocal servitude is by showing a common scheme/plan.

• —> Restriction must be part of a common scheme/plan for development of the area and the current owner takes w/ notice of the restriction.
• —> An implied reciprocal servitude is imposed on any lot that does not contain the restriction if a common scheme was evident at the time of the conveyance of those lots.
• —> Factors to show a “common scheme”:
  (1) A large percentage of lots expressly burdened;
  (2) Oral representations to buyers;
  (3) Statements in advertisements to buyers; or
  (4) Recorded plat maps or other declarations.

Enforcement: can be enforced by:

(1) The original grantor;
(2) Any purchaser affected by the common scheme; or
(3) A condo or subdivision association for common land conveyed to it.

Question 51

Use Disputes –> Ways to Terminate a Covenant or Equitable Servitude

Answer 51

(1) Written release;
(2) Merger of the dominant and servient estates;
(3) Abandonment;
(4) Estoppel; or
(5) Changed circ’s so that the reason behind the restriction is no longer valid.

Question 52

Use Disputes –> Crossover Issues: Nuisance - Public Nuisance

Answer 52

An unreasonable interference w/ a right common to general public (health, safety, morals of community); P must have suffered harm of different kind from other members of public. Typically brought by govt actor (ex: AG).

Unreasonable factors: (1) whether the conduct involves a sig interference w/ public health, safety, peace, comfort, or convenience; (2) whether conduct is proscribed by statute, etc.; (3) whether conduct is of a continuing nature or has produces permanent/long-lasting effect, and as the actor knows/has reason to know, has sig effect on public right.

For Public Nuisance, P must (3 scenarios):

(1) have right to recover damages
(2) have authority as public official or public agency to represent state or political subdivision in the matter; or
(3) have standing to sue as representative of general public, citizen in citizen’s action, or member of class in class action.

Question 53

Use Disputes –> Crossover Issues: Nuisance - Private Nuisance

Answer 53

Thing/activity that substantially and unreasonably interferes w/ P’s use and enjoyment of his land.

• -> Interference must be offensive, inconvenient, or annoying to an AVERAGE PERSON in the community; P cannot devote his land to unusually sensitive use and complain of nuisance based on otherwise relatively harmless conduct.
• -> P must be a possessor, owner of easement/profit, or owner of nonpossessory estate

Private Nuisance Reqs: A D is subject to liability only if his conduct is a legal cause of an invasion of another’s interest in private use and enjoyment of land, and the invasion is either:

(1) intentional and unreasonable; or
(2) unintentional and otherwise actionable under the rules controlling liability for neg or reckless conduct

Ct will weigh gravity of harm done to P against utility of D’s activity.

• -> Factors:
  (1) compliance w/ applicable zoning ord;
  (2) whether there are alternatives
  (3) frequency and extent of interference/injury;
  (4) utility and social value of D’s activity;
  (5) who was there first (once a defense, now just a factor)

Question 54

Use Disputes –> Crossover Issues: Nuisance - Defenses

Answer 54

Contributory Neg - Same as neg; when harm is intentional/reckless, contrib neg not defense; when nuisance is abnormally dangerous activity, contrib neg is defense only if P has voluntarily and unreasonably subjected himself to risk of harm.

Assumption of Risk - same as neg

Coming to the Nuisance - fact that P has acquired/improved land after nuisance will not by itself bar action, but is a factor to consider in determining whether nuisance is actionable.

Compliance with Statute - same as neg

Question 55

Use Disputes –> Crossover Issues: Nuisance - Remedies

Answer 55

(1) Injunction
- –> Injunction is a ct order directed to a person/entity, usually to refrain from doing particular act (prohibitory) or do a particular act (mandatory).

(2) TROs and Preliminary Injunctions
- –> Prelim relief available (4 factors):
(1) P likely to succeed on the merits of underlying claim
(2) complaint shows P entitled to relief demanded either for limited period or perpetually
(3) denial of injunctive relief would produce waste, or great/irreparable injury to the P
(4) public interest as well as balancing of hardships favors grant of injunction
- –> Notice required for prelim injunct; between notice and hearing on prelim injunct, party may seek TRO (14 days).

Permanent Injunction
Requirements: P must have prevailed on substantive claim and shown a need for continuing protection.
–> Need not be perpetual, may be set to expire by its own terms.

Question 56

Use Disputes –> Crossover Issues: Zoning - Generally (Authority + Classifications + Purpose + Uniformity)

Answer 56

Power to Zone
Granted by STATUTE from a STATE to a city, county, township, or other approp political subdivision.
—> Gives political subdivision the ability to divide its geographical areas into zones where some uses are permitted and other uses are prohibited.
—> Ordinances not conforming to state enabling acts are unauthorized.

Classifications
Common classifications include: residential, commercial, agricultural, industrial, spatial, and mixed-use.

Purpose
Must promote the public health, safety, prosperity, morals, or welfare.

Uniformity
Must be uniform for each class or kind of buildings and uses throughout each district, but the regulations in one district may differ from those in other districts.

Question 57

Use Disputes –> Crossover Issues: Zoning - Scope

Answer 57

Regs in each district may regulate, restrict, permit, prohibit, and/or determine:

(1) Use of land, buildings, and structures;
(2) Size, height, area, location, construction, repair, and removal of structures;
(3) The areas and dimensions of land, water, and air-space to be occupied and open spaces to be left unoccupied; or
(4) The excavation or mining of soil or other natural resources.

Question 58

Use Disputes –> Crossover Issues: Zoning - Enforcement (Notice of Zoning Violation)

Answer 58

When a property is found to be out of compliance with the zoning code, the political subdivision will issue to the property owner a Notice of Zoning Violation.

Cease and Desist:
The notice may contain instructions to cease and desist from a certain use, or instructions on how to modify the property to bring it into compliance, or how to cure the violation.
—–> If the property owner does not protest the notice, and does not bring the property into compliance, the political subdivision may:
(1) Obtain a court-ordered injunction to enforce the notice;
(2) Apply civil fines until compliance is achieved; or
(3) Require a zoning violation to be recorded to alert potential buyers (some states).

Challenges:
A Notice of Zoning Violation must include information on how to protest the notice by appealing to the local board of zoning appeals.
—-> If relief is not granted, an appeal to a court must be provided.

Tenants and Occupiers:
While the property owner is always liable for civil zoning violations, whether committed by the owner or a tenant or other occupier, in most jurisdictions a tenant or other occupier who is committing the violation is also liable.
—-> An owner, however, cannot be liable for a criminal misdemeanor committed by the tenant or occupier because the element of intent is lacking.

Question 59

Use Disputes –> Crossover Issues: Zoning - Constitutional Limitations (Generally)

Answer 59

The Due Process Clause of the Fourteenth Amendment provides for both procedural and substantive due process.

PDP
Requires NOTICE and an OPPORTUNITY to be heard
—–> When a property owner receives a Notice of Zoning Violation, and appeals it to the local board of zoning appeals or other administrative board, there is a public hearing. If the owner does not receive relief, an appeal to the courts must be provided.
—–> When a property owner requests a variance from the zoning code, the owner is entitled to a public hearing that has been noticed to all who might take an interest in the request, including nearby property owners. If relief is not granted, an appeal to the courts must be provided.
—–> Where appeal to the court is taken, the court reviews the administrative decision to see if it was illegal, arbitrary or capricious, or unsupported by a preponderance of the evidence.

SDP
—–> A zoning ordinance violates substantive due process if it is ARBITRARY and CAPRICIOUS, meaning that it is not reasonably related to public health, welfare, or safety.

EPC

• —-> A zoning ordinance may give rise to an equal protection challenge if similarly situated people are treated DIFFERENTLY.
• —-> However, where there is no fundamental right impacted, and where there are no suspect classifications, then the rational basis test will be applied.

1A
—-> A zoning ordinance may also be subject to a First Amendment challenge if it regulates billboards or aesthetics.

Question 60

Use Disputes –> Crossover Issues: Takings

Answer 60

The 5A provides that private property shall not be taken for public use w/o just compensation (applies to the states through the DPC of the 14A).

• —> A land-use reg is a “taking” if it denies an owner all reasonable, economically beneficial uses of his or her land.
• —> To analyze regs that merely decrease economic value, the ct uses a balancing test to determine if there is a taking (which happens rarely) considering the following factors:
  (1) The economic impact of the reg on the claimant;
  (2) The extent to which the reg has interfered with distinct investment-backed expectations; and
  (3) The character of the govt’al action.

Question 61

Use Disputes –> Crossover Issues: Zoning - Rezoning

Answer 61

If rezoning is inconsistent w/ a comprehensive plan for that area, then it must be based on a change of conditions in the land, neighborhood, environment, or public opinion.

Rezoning of a particular piece of land is quasi-judicial and requires PDP.
—-> A broader rezoning is legislative.

An owner may petition for a rezoning to change the classification; however a use variance or special use permit is much easier to obtain.

Question 62

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Nonconforming Use)

Answer 62

A nonconforming use is a use permitted by zoning statutes or ordinances to continue, notwithstanding the fact that similar uses are not generally permitted in the area.

• —> A nonconforming use may not be expanded or rebuilt after substantial destruction.
• —> Local ordinances often prohibit the enlargement, alteration, or extension of a nonconforming use.
• —> Some local ordinances req certain nonconforming uses to be amortized (reduced) over a specified period, at the end of which they must be terminated.

Question 63

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Variances)

Answer 63

A variance is the permission by the local zoning authorities to use property in a manner forbidden by the zoning ordinances in order to alleviate conditions peculiar to a particular parcel of property.

• —> If a variance is sought from an area restriction, the petitioner must show that there are practical difficulties in meeting the req’ments of the zoning code or that the req’ments are unreasonable or create an undue hardship.
• —> If the variance is sought from a use restriction, the petitioner must show UNDUE HARDSHIP, meaning that, w/o a use variance, there is no viable use of the property.

Question 64

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Special Use Permits)

Answer 64

A special use permit is req’d for uses in an area not zoned for those uses, but which would be (1) beneficial to the public welfare and (2) compatible w/ the area.
—-> An applicant for a special use permit is entitled to a public hearing that has been noticed to all who might have an interest in the application, including nearby property owners.

Question 65

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Conditional Use Permits)

Answer 65

A conditional use permit is req’d for uses in an area not zoned for those uses, but which would be beneficial to the public welfare, and compatible with the area if certain conditions are met.

• —> Granted only if the applicant agrees to meet the additional conditions.
• —> An applicant for a conditional use permit is entitled to a public hearing that has been noticed to all who might have an interest in the application, including nearby property owners.

Question 66

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Spot Zoning)

Answer 66

A parcel, or small area, may be zoned for a use or structure that is inconsistent with the rationale of the overall plan or ordinance; this is called spot zoning.
—-> Spot zoning is illegal when the zoning ordinance is designed solely to serve the private interests of one or more landowners.

Question 67

Use Disputes –> Crossover Issues: Zoning - Zoning Changes (Exactions)

Answer 67

An exaction is an approval of use in exchange for $ or a dedication of land.

Permissible only if:

(1) The local govt can demonstrate that the increased public need is causally related (i.e., has an essential nexus) to the owner’s use; and
(2) The amount of the exaction is approx equal to the additional public cost imposed by the use (i.e., has a rough proportionality to the use).

Question 68

Use Disputes –> Water Rights

Answer 68

Riparian View (majority):

• –> Anyone who is w/in the watershed (touches the lake or stream) has a right to make reasonable use of the water.
• –> This is the rule for many Eastern states.

Prior Appropriation/Use View (minority)

• –> Awards the right to use the water to the 1st person to take the water for beneficial purposes.
• –> This is the rule for many Western states.

Diffuse Surface Water

• –> Common Enemy Rule (Eastern states): Floodwater can be diverted by any method onto another’s land.
• –> Civil Law Rule (Western states): No interference with any surface water is allowed.
• –> Reasonable Use Rule: Surface water can be diverted onto another’s land if using reasonable means to do so.

Question 69

Use Disputes –> Support Rights: Lateral Support

Answer 69

Right of a LO to physical support of his/her land in its natural state by adjoining land.

General Rule
—> A LO has an absolute right to lateral support; therefore, if the adjoining LO fails to provide lateral support, the adjoining LO will be strictly liable for any damages suffered.

If the land has been improved, you should ask yourself the following question: Would the property have subsided anyway, or was it the weight of the improvement that caused the land to subside?

• ——> If the land would have subsided anyway (due to its natural state)—remains strictly liable.
• ——> If the weight of the improvement caused the land to subside, the adjoining landowner is liable only if there was neg in depriving the neighboring property of lateral support.

Question 70

Use Disputes –> Support Rights: Subjacent Support

Answer 70

Typical problem: LO of a parcel will sever the below-ground and above-ground estates and sell the underground (e.g., mineral) rights to someone else; underground LO excavates and causes above-ground structures to subside.

General Rule: The right of support extends to:

(1) Land in its natural state; and
(2) Buildings existing on the date when the subjacent estate was severed from the surface.
(3) However, the underground LO is liable for damages to subsequently erected buildings only if he/she is neg.

Question 71

LL/T –> Type of Tenancy: Tenancy for Years

Answer 71

A lease that has a definite beginning and end (set date, months, or years).

Creation:

• –> Express agreement between the landlord (LL) and the tenant (T) for a term specified in the lease.
• –> If the duration is for longer than a year, the agreement must be in writing.

Termination:

• –> Automatically at the end of the period; no notice is req’d.
• –> Failure to pay rent
• –> Surrender and acceptance

Question 72

LL/T –> Type of Tenancy: Periodic Tenancy

Answer 72

A lease with a set beginning date and continues from period to period (e.g., m-to-m) w/o a set termination date, until proper notice is given.

Creation:
—> Expressly or by implication w/ a holdover tenant.

Termination:

• –> The LL or the T must give approp notice of intent to terminate.
• –> Approp notice must be:
  (1) in writing, if the lease or state statute so specifies, otherwise it can be oral; and
  (2) equal to the rental period, up to a maximum of six months.

EXAMPLES:
One-month tenancy = 1 months’ notice
Three-month tenancy = 3 months’ notice
One-year tenancy = 6 months’ notice

Timing of Notice

• —-> CL: Notice had to be given at the start of the rental period.
• —-> Modern law: Notice is good whenever given but it does not take effect until the start of the next rental period.

Question 73

LL/T –> Type of Tenancy: Tenancy at Will

Answer 73

Has no fixed duration and lasts only as long as the LL and T desire.

Creation:
—> Generally, by express agreement of the parties.

Termination:

• –> This is a very fragile tenancy, it terminates:
  (1) Freely as soon as either party decides (no notice req’ment);
  (2) If either the LL or the T dies; or
  (3) If either party attempts to transfer their interest.

Question 74

LL/T –> Type of Tenancy: Tenancy at Sufferance (Holdover Tenant)

Answer 74

Creation:
—> A holdover situation (e.g., the T does not move out at the end of the agreed upon tenancy, wrongful possession).

A holdover T will become either a periodic T or a T at sufferance.

The determining factor of whether the T becomes a periodic T or a T at sufferance is the LL:

(1) If the LL wants the T to remain on the land, the T becomes a periodic T.
(2) If the LL does not want the T to remain on the land, the T becomes a T at sufferance until the LL can get the T off the property.
(3) Crucial factor: Acceptance of rent from the T.
- —–> If the LL accepts rent from the T, this is evidence that the LL wants the T to stay on the land.

If the T becomes a periodic T, the period is determined by the type of jdx.
——> CL: The length of the expired lease, with a max of one year.
——> Modern law (most jdxs): Treat the period as the period for which rent is reserved.
EXAMPLE: T pays rent monthly; the period will be month-by-month.

Termination
—> T evicted

Question 75

LL/T –> 4 Issues: Rent - How Much Can LL Sue For?

Answer 75

(1) Tenancy for Years = T liable for all unpaid rent in the lease.
- —-> CL: LL could only sue for rent as it accrued.
- —-> Modern Majority Rule: allows for anticipatory repudiation but the LL has a duty to mitigate (make reasonable efforts to re-rent the property)

(2) Periodic Tenancy = T liable for rental obligation up until proper notice is given to terminate the lease.

(3) Tenancy At-Will = T is liable for the amount of rent stated in the agreement that is already owed.
- –> Generally, under this type of tenancy, rent is usually not $ (e.g., T can stay as long as T gardens the property).

(4) Tenancy at Sufferance
- —-> The T is liable for the reasonable rental value of the property.

Question 76

LL/T –> 4 Issues: Rent - Defenses (Failure to Deliver Possession)

Answer 76

Majority: The LL has an obligation to deliver possession of the property to the T.

Minority (“American”) Rule: The LL has no obligation to deliver possession of the premises; the T must take it.

Question 77

LL/T –> 4 Issues: Rent - Defenses (Tenant Evicted)

Answer 77

Actual Eviction = T is physically removed from all, or part, of the property.
—–> A partial, actual eviction excuses the T from paying any rent. (Note, this acts as sort of a penalty for the LL’s bad-faith behavior, which is why the T gets complete rent cancellation.)

Question 78

LL/T –> 4 Issues: Rent - Defenses (Tenant Accepts and Surrenders Premises to Landlord)

Answer 78

In order to claim this defense, the LL must accept the surrender and retake possession of the premises.
——> The LL will typically be req’d to mitigate damages via K law.

Question 79

LL/T –> 4 Issues: Rent - Defenses (Destruction)

Answer 79

CL: Generally, did not excuse payment of rent because the T was still in possession of the actual land.
—-> Note, there would be a diff result had T only leased a portion of the building.

Modern law: No distinction is drawn between leasing all or a portion of the building.

• –> Destruction will be a defense to payment of rent.
• —> Exception: If the T intentionally or neg causes the destruction.

Question 80

LL/T –> 4 Issues: Rent - Defenses (Warranty of Habitability)

Answer 80

An implied warranty that the premises are fit for habitation.

• –> The majority of jdxs apply the warranty of habitability to residential leases only.
• –> A minority of jdxs also extend the warranty of habitability to commercial leases.

Reqs the LL to maintain the premises in a habitable condition.

• —> If the LL fails to do so, and the premises become uninhabitable, and the T moves out, it could be viewed as a constructive eviction.
• —> If there is a problem, but the T does not want to move out, the T must notify the LL to correct the problem.
• —>The T is obligated to give the LL a reasonable period of time to fix the problem.
• —>If the LL has not done what is necessary, the T can do what is necessary and offset the costs of doing so against rent that is owed.

Rule: To claim a breach of implied warranty of habitability, the T must:

(1) Provide the LL w/ notice; and
(2) Allow the LL reasonable time to repair the problem.

Question 81

LL/T –> 4 Issues: Rent - Defenses (Contract Defenses)

Answer 81

Impossibility, impracticability, and frustration of purpose.

Violation of quiet use and enjoyment of the property.

Question 82

LL/T –> 4 Issues: Rent - Defenses (Breach of Quiet Enjoyment - Constructive Eviction)

Answer 82

Breach of Quiet Enjoyment
Constructive Eviction = The LL has allowed the condition of the premises to deteriorate to the point that the T is essentially being forced out.
—> The use and enjoyment of the property is being substantially interfered with.
—> T must actually move out w/in a reasonable time following the acts constituting the substantial interference.
—> Even if the acts constituting the substantial interference are due to 3rd parties, the LL can be liable because the LL should have had reason to know that the interference would cause a constructive eviction.
—> Total Constructive Eviction = Defense to the payment of any rent.
—> Partial Constructive Eviction = Reduction in rent only.

Question 83

LL/T –> 4 Issues: Condition of Premises

Answer 83

LL’s Obligations

• —> CL: Absent an express promise in the lease, the LL has no obligation to maintain or repair leased premises.
• —-> ML: An implied warranty of habitability and other statutory obligations may apply.
• —-> Additional Liability in Tort:
  (1) Tort land occupier duties owed (invitees, licensees, trespassers). Who owes the duty? Not the owner, but the possessor. During the lease, the T has possession so the T owes the duties.
  (2) The LL retains a duty for common passageways and other areas under the LL’s control (stairs, hallways etc.).
  (3) If the LL rents the premises w/ a known defective, dangerous condition not readily apparent to the T, the LL retains liability until the T has had reasonable time to inspect and repair.

T’s Obligations

• —-> CL: No obligation to repair the leased premises.
• —-> Duty to Avoid Waste:
  (1) Voluntary Waste: The T is liable if the T intentionally, or neg, damages the property.
  (2) Permissive Waste: The T must take steps to guard against damage to the property.
  (3) Ameliorative Waste:
• > CL: The T had no obligation to make improvements and the LL could hold the T liable.
  (2) CL: The T can make improvements if expressly authorized, or if there is a change in circumstances that warrants the improvements to be made (provided that the improvement does not depreciate the value of the property).

Security Deposits: (Three kinds)

(1) A true security deposit, that is returned to T at end of lease, minus funds used to repair damage done by T;
(2) A deposit to be forfeited in the event of default; and
(3) A deposit denominated as advance rent for the last period of the lease.

Question 84

LL/T –> 4 Issues: Possession

Answer 84

Rule: The LL can retake the property if the T has committed a material breach of the lease.
—-> CL: The LL was entitled to use reasonable force to retake possession of the premises from the T.
—-> ML: The majority of jdxs no longer allow the use of any force and the LL must use the legal process.
• Generally, the LL has to give the T notice to either cure the breach or vacate.
• There will then be a judicial hearing to determine whether the T has committed a breach, and if so, the T will be evicted.

Cts will not uphold a retaliatory eviction.

Question 85

LL/T –> 4 Issues: Improvements

Answer 85

CL: Anything, except for a trade fixture, affixed to the land became part of the land and had to stay.
—-> “Trade fixture” = Any item used in the course of the T’s trade or business.
• Rule: A trade fixture could be removed unless removal would cause substantial damage to the property.

ML: If the fixture can be removed w/o affecting the premises, the T is entitled to remove the fixture (no distinction between regular and trade fixtures).
—-> If the fixture can be removed, and the premises left in substantially the same condition as when the T arrived, then the T is entitled to remove the fixture before leaving the premises.
—-> If something is removable, it must be removed before the expiration of the lease.
• Exception: Some jdxs will give Ts a reasonable amount of time after the expiration of the lease, if the T has no way of knowing when the tenancy will terminate, e.g., a tenancy at will.

Presumption: Structural changes cannot be removed bc the premises cannot be returned to substantially the same condition as when the T arrived.

Question 86

LL/T –> Transfers: LL’s Transfer of Interest

Answer 86

Who is entitled to collect the rent?

• –> The landlord of record, on the date the rent is due, is entitled to that rent.
• –> LL can assign interest and delegate duties

Question 87

LL/T –> Transfers: T’s Transfer of Interest

Answer 87

Assignment versus Sublease

• —> Assignment = T transfers all of the remainder of the interest (rental obligation) to a new party.
• —> Sublease = T transfers less than the entire interest in the K.

Is the new T an assignee or a sublessee?

• —> Assignee = If a T transfers all of the remainder of the rental obligation.
• —> Sublessee = If a T transfers only a portion of the time left on the rental obligation.

Question 88

LL/T –> Transfers: Assignment and Subletting - Liability of Parties

Answer 88

Assignment:

• —> The assignee comes into privity of estate with the LL, while the T remains in privity of K with the LL.
• —> Assignee is liable to the LL for rent, unless he or she re-assigns to a new assignee who takes over privity of estate.
• —> The T is liable to the LL for rent, even after assignment, unless there is a K novation.

Sublease:

• —> The sublessee comes into privity of estate and privity of K with the T, owing the T rent.
• —> The T cont’s to owe rent to the LL.

Question 89

LL/T –> Transfers: Assignment and Subletting - Covenant to Pay Rent

Answer 89

Can be enforced by the LL against the original T bc of the contractual nature of the relationship.

In order for the original LL to enforce against a new T, the req’ments for a covenant running with the land must be satisfied:

• —> Key issue = Vertical privity. An assignee is in privity of estate with the LL but a sublessee is not, so a covenant can be enforced against an assignee but not a sublessee.
• —> If the LL is not receiving rent, this is a material breach of the lease and the LL can have the assignee or sublessee evicted.

If there is more than one transfer, only the original T and the current T are liable to the LL for rent.
—-> Middle-of-the-chain assignees are not liable to the LL, only to the original T.

Question 90

LL/T –> Transfers: Assignment and Subletting - Transfer of Interest in Leases

Answer 90

Generally, interests in leases are fully transferable.

To prohibit both an assignment and a sublease, the lease must specifically state that both are prohibited.

Consent: A consent clause in the lease that does not state a standard or condition for giving or withholding consent is commonly known as a “silent” consent clause.
—-> Traditional/Majority Rule: A silent consent clause gives the LL the right to withhold consent for any reason, or for no reason at all, even if withholding consent is arbitrary and unreasonable.
o This rule is subject to any applicable statutory housing discrimination laws.
—-> Minority Rule: Reqs the LL to be reasonable in withholding consent for an assignment.

Rule in Dumper’s Case: If there is an express prohibition against an assignment in a lease, and the LL either expressly or impliedly waives that restriction, once waived it is deemed waived for the remainder of the lease except if specifically stated otherwise.

Question 91

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Fee Simple Absolute

Answer 91

This is the best type of estate.

• —-> A FSA holder has all possible rights that a person may have in that parcel of land.
• —-> May last forever – FSA is alienable, devisable, and descendible.
• —-> One way to terminate: Owner dies w/o a will or heirs, and property escheats to state.

EXAM TIP (terminology): Devisees take by will, heirs take by the law of intestacy in the relevant jurisdiction, and grantees take by inter vivos (literally “between the living”) transfer.

Creation
—–> “to A and his heirs” (CL); “to A” (modern law).

Question 92

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (General)

Answer 92

An estate that may terminate upon some happening or event before its maximum duration (forever in fee) has run.

3 Types

(1) Fee Simple Determinable
(2) Fee Simple Subject to a Condition Subsequent
(3) Fee Simple Subject to Executory Interest

Question 93

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Fee Simple Determinable)

Answer 93

Created by durational language—for so long as, during, until, or while.

• —-> “O to A for so long as liquor is not served on the premises.”
• —-> Terminates automatically on happening of a named future event.
• —-> The estate returns to the grantor.

Question 94

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Fee Simple Subject to a Condition Subsequent)

Answer 94

Created by conditional language (provided however, however if, but if, on condition that, or in the event that) to occurrence of a condition that will terminate estate.

• —-> Power of termination must be expressly reserved to the grantor.
• —-> “A to B, provided that in the event the premises are not used for educational purposes, then A has the power to terminate B’s estate.”
• —-> “A to B, but if B stops using the premises for residential purposes, then A may reenter and retake the estate.”
• —-> “A to B for life, on condition that B uses the land for recreation, but if he fails to do so, A may re-enter and retake the estate.”

If the language is ambiguous, courts interpret the grant as an attempt to create a FSSCS; though, this often fails and the grant becomes a fee simple absolute for lack of a specific power of termination; thus, avoiding a forfeiture of the fee simple estate.
—–> NOTE: Courts disfavor forfeitures.

Question 95

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Fee Simple Subject to Executory Interest)

Answer 95

Created by either durational or conditional language.

• —-> Termination occurs on the happening of an event that terminates the estate; property then passes to someone other than grantor.
• —-> “A to B so long as B farms the property during his lifetime and, if he does not, then to C.”
• —-> “A to B on condition that B gets married. If B dies without marrying, the property will pass to C.”

Question 96

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Fee Tail)

Answer 96

Common law: An estate that descended to grantee’s children only.
—–> EXAMPLE: “A to B and the heirs of his body.”

Modern law: Fee tails are disfavored and are treated in most jurisdictions as fee simple absolutes.

Question 97

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Life Estate)

Answer 97

Life estates last for the duration of the grantee’s life.
—–> EX: “A to B for life.”

“Life estate pur autre vie” = The duration of the estate is measured by the life of someone other than the grantee.
—–> EX: “A to B for the life of C.” As long as C is alive, B owns the property.

Can be made defeasible.
—–> EX: “A to B for life, as long as B farms the land.”

Question 98

Present/Future Interest Disputes –> Present Possessory Estates: Freehold Estates - Defeasible Estates (Non-Freehold Estate)

Answer 98

Term estate = Estate that is limited in duration (basically a LL-T relationship).
—–> Exs: “A to B for 50 years.” or “A to B for 1 year.”

Question 99

Present/Future Interest Disputes –> Future Interests: Grantor Future Interests - Possibility of Reverter

Answer 99

A future interest in the grantor that follows a determinable estate.
—–> “A to B so long as B farms the land” creates a possibility of reverter in the grantor.

Creation: a fee simple determinable automatically creates a possibility of reverter; no special language needed.
—–> Upon the happening of the event, the land automatically reverts back to the grantor.

Transferability
CL: The power of termination could descend through intestacy but could not be devised or transferred inter vivos.
ML/Maj: The power of termination is freely transferable, devisable, and descendible.
—–> NOT subject to the Rule Against Perpetuities (RAP) because the grantor’s possibility of reverter has already vested.

Question 100

Present/Future Interest Disputes –> Future Interests: Grantor Future Interests - Power of Termination (Right of Reentry)

Answer 100

A future interest in the grantor when the grantor attempts to create a FSSCS or a defeasible life estate.

Creation: Not automatic; must be spelled out in the conveyance or it does not exist.
—–> EXAMPLE: “A to B, provided that B uses the premises for residential purposes, but if he does not do so, A may retake and re-enter.” If B ever stops using the premises for residential purposes, A or A’s heirs can enter and retake the property.

Upon the happening of the event, the property does not automatically revert.

• —-> The grantor must exercise the right of reentry and take affirmative steps to retake the property.
• —-> Courts favor a fee simple subject to condition subsequent over a fee simple determinable to avoid an automatic forfeiture.

Transferability

• —-> Common law: The power of termination could descend through intestacy but could not be devised or transferred inter vivos.
• —-> Modern law/Majority: The power of termination is descendible and devisable. However, the power of termination is not transferable inter vivos.

NOT subject to the RAP because the grantor’s power of termination has already vested.

Question 101

Present/Future Interest Disputes –> Future Interests: Grantor Future Interests - Reversionary Interest

Answer 101

Reversion = A future interest retained by the grantor when the grantor transfers less than a fee interest to a third person.
—–> EXAMPLE: “A to B for life.” A has given a life estate to B but has not provided for who is going to own the land after B dies. The property will return to A after B dies.

Transferability

• —-> Common law: The power of termination could descend through intestacy, but could not be devised or transferred inter vivos.
• —-> Modern law: The power of termination is freely transferable, devisable, and descendible.

NOT subject to the RAP because the grantor’s right has already vested.
—–> The RAP does not apply to any reversionary interests.

Question 102

Present/Future Interest Disputes –> Future Interests: Grantor Future Interests - Remainder

Answer 102

A future interest created in a 3rd person that is intended to take effect after the natural termination of the preceding estate.
EXAMPLE: “A to B for life, then to C.” C has a remainder.

Contingent Remainder = Any remainder that is not vested.
—–> EXAMPLE: “A to B for life, then to the oldest child of C then living.” This would be a contingent remainder bc we do not know who the oldest child is going to be until B dies. There is a condition precedent to that person taking – they must be alive when B dies.

Vested Remainder is vested at the point that it is:

(1) Created in an ascertainable person; and
(2) Is not subject to any condition precedent, other than termination of the preceding estate.

Question 103

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Special Types of Vested Remainders (Vested Remainder Subject to Total Divestment)

Answer 103

A remainder that is presently vested but may be terminated on the happening of a future event.
—–> EXAMPLE: “A to B for life, remainder to C, so long as liquor is never served on the premises.” C has a vested remainder but could lose it by serving liquor on the premises.

Question 104

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Special Types of Vested Remainders (Vested Remainder Subject to Open)

Answer 104

A remainder that has been made to a class and has at least one member who is ascertainable who has satisfied any conditions precedent to vesting, but may have other members join the class later.
-----> “A to B for life, then to the children of C.” As soon as C has a child, that child is an ascertainable person and there is no condition to their taking other than the termination of the preceding estate (B’s death). Child would have a vested remainder, but it is subject to open because as other children of C are born, they will also share in the gift.

Class Opening

• —-> Inter vivos conveyance: class opens at the time of the conveyance.
• —-> Testamentary conveyance: class opens at the death of the testator.

Class Closing
The RAP can void a future interest.
-----> Generally, does not apply to vested interests except vested remainders subject to open.
-----> If any member of a class could potentially claim in a way that violates the RAP, the entire class gift fails.
-----> Rule of Convenience: Class closes as soon as one member of the class becomes entitled to immediate possession of the property.

Question 105

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Executory Interests (Definition)

Answer 105

Executory Interest = A future interest in a 3rd person that cuts short the previous estate before it would have naturally terminated.

• —-> Bc a fee estate has the potential to last forever, any interest created in a 3rd party that follows the granting of a fee will always be an executory interest.
• —-> EXAMPLE: “A to B so long as liquor is not served on the premises in B’s lifetime. If liquor is served on the premises in B’s lifetime, the property will pass to C.” C has an executory interest.

Subject to the RAP.

Question 106

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Executory Interests (Two Types)

Answer 106

Shifting Executory Interest: The interest passes from one grantee to another—i.e. a grantee to a grantee (most common).
—–> EXAMPLE: “A to B so long as B completes law school by age 30. If B fails to do so, then to C.” Shifts the property from grantee B to grantee C.

Springing Executory Interest: The interest transfers from a grantor to a grantee.
—–> EXAMPLE: “A to B for life. Then 20 years after B’s death, to C.” B has a life estate. When B dies, the property reverts back to the grantor, A. 20 years later, the property transfers to C. A’s reversion would be in fee.

Question 107

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Rules Affecting Future Interests (Doctrine of Worthier Title)

Answer 107

It is worthier to take by descent than by devise, meaning a grantor cannot create a remainder in his or her heirs.
• This is a rule of construction, not law.

EXAMPLE: “A to B for life, remainder to A’s heirs.” Whether or not A included “remainder to A’s heirs,” the property would have gone to A’s heirs via a reversion. Should pass by descent rather than the devise.

Question 108

Present/Future Interest Disputes –> Future Interests: Grantee Future Interests - Rules Affecting Future Interests (Waste)

Answer 108

Determines what someone who owns land can/cannot do w/ it.

• —-> Owner of a fee estate can do whatever he/she wants w/ the property.
• —-> Owner of less than a fee estate cannot commit waste (e.g., harm the property at the expense of the person who will hold it after them).

Three Types of Waste:

(1) Voluntary Waste = A life T cannot intentionally or neg damage property. If they do, they are liable for the damage.
(2) Permissive Waste = A life T must take reasonable steps to avoid damage. Failure to do so constitutes permissive waste, and the life T will be liable.
(3) Ameliorative Waste = A life T makes improvements to the land.
- —-> CL: A life T was not allowed to make substantial alterations unless authorized to do so and could be held liable for costs of restoring the land to its previous condition.
- —-> ML: A life T is now allowed to commit ameliorative waste if:
(1) Market value of the remainderman’s interest is not impaired; and
(2) It is permitted by the remainderman OR a substantial and permanent change in the neighborhood justifies the improvement.

A remainderman has standing to sue for past or future waste.

• —-> Vested Remainderman: Can sue for damages or an injunction to stop the waste from occurring.
• —-> Contingent Remainderman: Cannot sue for damages and can only sue for an injunction to stop the waste from occurring.

EXAM TIP: Watch out for situations involving the mortgagor/mortgagee relationship and the LL/T relationship. Both relationships are also governed by the doctrine of waste.

Question 109

Present/Future Interest Disputes –> Future Interests: Special Problems - Rule Against Perpetuities

Answer 109

The CL RAP provides that “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.”

Purpose of the Rule:

• —> The law does not want land tied up forever w/ ridiculous contingencies that could go on in perpetuity.
• —> The rule attempts to place a limit on contingencies on ownership of land.

The rule deals solely with possibilities.
—-> If you can look at a future interest in a conveyance and can come up with an interpretation where someone could be claiming more than 21 years after everyone currently alive connected to the grant is dead, it violates the rule.

Application
—–> RAP does not apply to present possessory estates.
—–> RAP only applies to three future interests:
• Executory interest;
• Contingent remainder; and
• Vested remainder subject to open
—–> Two other interests subject to the rule:
• Purchase option; and
• Right of first refusal
—–> All other future interests are exempt from the RAP.

Steps for Dealing with a RAP Problem:
(1) Identify the type of interest and make sure the RAP applies:
• Executory interest;
• Contingent remainder;
• Vested remainder subject to open;
• Purchase option; and
• Right of first refusal
(2) Is it possible to interpret the facts so someone can claim an interest more than 21 years after everyone currently alive is dead?
—-> If yes, the future interest is wiped out and interpret the rest of the grant accordingly.
—-> If no, the interest will stand.

Question 110

Present/Future Interest Disputes –> Future Interests: Special Problems - Restraints on Alienation

Answer 110

EXAMPLE: “A to B for life, but if B tries to sell his interest, then to C.”

Total Restraint
EXAMPLE: “A to B, but if B ever tries to sell the property, then the property will revert to A.”
—> On a fee: This will generally not be valid.
—> On less than a fee: This will be upheld, if reasonable.

Partial Restraint (both are valid, if reasonable)
—> Purchase Option
EXAMPLE: “A to B and her heirs, but A reserves the right to buy back the property at any time during A’s life.”
—> Right of First Refusal
EXAMPLE: “A to B and her heirs, but if B ever attempts to sell during A’s life, B must first offer the property to A at the same price.”
—> Courts look to whether a restraint is limited in scope or time, the purpose of the restraint, the legitimate interests of the party, and whether the restraint is supported by consideration in assessing its reasonableness.

Question 111

Concurrent Ownership –> Cotenancy: Generally

Answer 111

Any time property is being transferred to more than one person to be held concurrently, you have to determine how they are going to hold the property.
o Tenancy in Common = Each co-tenant owns an undivided possessory interest in the whole of the property.
o Joint Tenancy = Each co-tenant owns an undivided possessory interest in the whole of the property AND has a right of survivorship.

Question 112

Concurrent Ownership –> Cotenancy: Right of Survivorship

Answer 112

If you have property that is jointly owned, and one of the co-tenants dies, the property passes to the surviving co-tenant automatically.

CL: A conveyance to 2 or more ppl to jointly own property was presumed to create a joint tenancy, unless specifically stated otherwise.

Modern Majority: A conveyance to 2 or more ppl to jointly own property is presumed to create a tenancy in common, unless specifically stated otherwise.

You MUST use language to demonstrate that you want the right of survivorship attached to the grant.
—–> EXAMPLE: If A and B own property as joint tenants and B dies, the property automatically passes entirely to A, and A owns the property outright.

The right of survivorship takes precedence over a will or inheritance by intestacy.
—-> If there is a tenancy in common (no right of survivorship) a concurrent interest held in a tenancy in common is freely transferable and can be willed away or inherited through intestacy.

Question 113

Concurrent Ownership –> Cotenancy: Joint Tenancy Creation

Answer 113

Traditionally, a joint tenancy requires four unities (TTIP):

(1) Time: JTs must take at the same time;
(2) Title: JTs must take by the same instrument;
(3) Interest: JTs must take equal shares of the same type; and
(4) Possession: Each JT has the right to possess the whole.

Today, most jdxs do not req the unities of time and title, only interest and possession.
—–> Tenancy in common only reqs unity of possession.

Main Differences between Joint Tenancy and Tenancy in Common:

(1) Right of survivorship.
(2) Four unities: time, title, interest, and possession.

Question 114

Concurrent Ownership –> Cotenancy: Tenancy by the Entirety

Answer 114

A form of concurrent ownership reserved for married couples, which gives each spouse an undivided interest in the whole of the property and a right of survivorship, unless expressly stated otherwise.

• —> Can be created by deed or will, but not by descent.
• —> Not recognized in community property states.

Question 115

Concurrent Ownership –> Cotenancy: Severance

Answer 115

Tenancy by the Entirety - severance only occurs when:

(1) The spouses jointly convey to a third party;
(2) One spouse conveys to the other spouse; or
(3) The couple divorces.

Severing a Joint Tenancy Creates a Tenancy in Common
Done by an inter vivos act of one of the parties.
(1) Can seek a partition action.
(2) Joint tenant sells his interest in the property.
(3) Joint tenant mortgages his/her interest in the property.
—> Majority View (Lien Theory Jdx): Mortgage is viewed as a lien on the property, will not sever.
—> Minority View (Title Theory Jdx): Mortgage is viewed as a title to the property, will sever.
—> Giving out a lien on the property will not sever a joint tenancy, but transferring title to the property will sever a joint tenancy.

In both types of jdxs, the mortgage encumbers only the portion belonging to the mortgagor.

• –> In lien theory jdxs, if the mortgagor dies before pay-off or foreclosure, the living joint tenant(s) inherits the whole free of the mortgage.
• –> If there is a foreclosure before the mortgagor dies, the foreclosure severs the joint tenancy.

Question 116

Concurrent Ownership –> Cotenancy: Rights and Duties of Co-Tenants

Answer 116

Possession: Each co-tenant is entitled to possess the whole property.
—–> If a co-tenant is denied possession, they can bring suit for damages and/or ejectment.

Profits

• —-> If a profit is produced by one of the co-tenant’s efforts, then the other co-tenants have no right to share in those profits (unless they’ve been ousted from the property).
• —-> If a profit is generated by a third party (e.g., rent), then all co-tenants are entitled to a proportionate share of the profits.

Expenses
—–> Taxes/Mortgage Payments: Each co-tenant must pay a proportionate share.
—–> Repairs: No direct duty of repair imposed on any co-tenant; however, a co-tenant who makes repairs to the property may be compensated for the amount of the repair by a set-off against any third party rents received or from proceeds in a partition action.
—–> Improvements: Generally, there is no duty imposed on any co-tenant to improve the property. If one co-tenant chooses to improve the property, they cannot get contribution from the other co-tenants.
• Exception: If the property is sold, any amount attributable to the improvement goes to the tenant who made the improvement.

Question 117

Cotenancy and Rights

Answer 117

RENT - CO-T IN POSSESSION
An out-of-possession co-T CANNOT demand rent from an in-possession co-T UNLESS the in-possession co-T somehow EXPLOITED the property in a manner resulting in PERMANENT DEPRECIATION of the property.

RENT- 3RD PARTY IN POSSESSION
An out-of-possession co-T DOES have a right to share in the rents and profits derived by another co-T from 3rd parties.
—> This amount would be LESS EXPENSES, such as taxes, mortgage, and management fees

REPAIRS
Under CL, a co-T could NOT seek CONTRIBUTION from another co-T for repairs w/o prior notice or the existence of an agreement.
—> By contrast, under many modern statutes, a co-T is
ENTITLED to credit co-T for the COST to MAINTAIN property.