Property

Question 1

Fee simple absolute

Answer 1

“To A” or “To A and his heirs”

Absolute ownership of potentially infinite duration. Freely devisable, descendible, and alienable (transferable inter vivos). Accompanying future interest: None. Everything is given away.

Question 2

Defeasible Fees

Answer 2

Fee simple estates that can be terminated upon the happening of a stated event, which will then be returned to the grantor or vested in a third party. Includes fee simple determinable, fee simple subject to condition subsequent, fee simple subject to executory limitation.

Two Rules of Construction for Defeasible Fees:
(1) Words of mere desire, hope, motive, or intention are insufficient to create a defeasible fee. If this happens, treat as FS absolute.

(2) Absolute restraints on alienation are void. A condition that absolutely restrains alienation = an absolute ban on the power to sell/transfer that isn’t linked to any reasonable time-limited purpose.

Question 3

Fee Simple Determinable

Answer 3

“to A for so long as…” “To A while/during…” “To A until…”

Absolute ownership subject to a condition, O / grantor has POSSIBILITY OF REVERTER. Freely devisable, descendible, and alienable

Question 4

Fee simple subject to Condition Subsequent

Answer 4

“To A, BUT IF X event occurs, grantor reserves the right to re-enter and retake.”

Absolute ownership subject to condition. Grantor has RIGHT OF ENTRY / POWER OF TERMINATION that must be exercised. Estate is NOT automatically terminated, but grantee’s interest can be cut short at grantor’s option if stated condition occurs.

Question 5

Fee Simple Subject to Executory Limitation

Answer 5

“To A, but if X event occurs, then to B.”

Like Fee Simple determinable, except if condition is broken, estate AUTOMATICALLY goes to 3rd PARTY, someone other than grantor. third party has has SHIFTING EXECUTORY INTEREST

Question 6

Life Estate for Life of Grantee

Answer 6

“To A for life.”

Grantee has the interest for the duration of his life. O/grantor has REVERSION meaning that at end of A’s lifetime, the estate AUTOMATICALLY reverts back to O or O’s heirs. If future interest held by 3rd party instead of O/grantor, then it’s a remainder.

Question 7

Life Estate Pur Autre Vie

Answer 7

O conveys “to A for the life of B.”

Grantee has interest for the duration of the life of a third party. At end of B’s life, estate AUTOMATICALLY reverts back to O or O’s heirs as reversion. If future interest held by 3rd party instead of O/grantor, then it’s a REMAINDER.

Question 8

Duties of a Life Tenant

Answer 8

1) Taxes: Whoever has PRESENT POSSESSORY INTEREST of life estate must pay the taxes.
2) Doctrine of Waste: Life tenant is entitled to any ORDINARY USES and PROFITS from the land, but cannot commit WASTE, hurting the future interests of the remainderman or reversioner. Future interest holder can sue for damages or enjoin such acts. Types of Waste: 1. Voluntary/Affirmative Waste - Cannot consume or exploit NATURAL RESOURCES on the property (such as timber, oil, or minerals) unless one of the exceptions apply (prior use, open mines, repairs, granted right, exploitation 2. Permissive Waste/ Neglect - Simply maintain premises in reasonably good repair; AND Pay all ordinary taxes on the land to extent of fair rental value 3. Ameliorative Waste - Life tenant must NOT engage in acts that will ENHANCE the property’s value, unless ALL future interest holders are KNOWN and CONSENT. Today a life tenant may alter or even demolish existing buildings if market value of future interests not diminished and either remaindermen do not object or substantial and permanent change in neighborhood conditions has deprived the property of usefulness

Question 9

Future Interests in Grantor

Answer 9

Possibility of Reverter: accompanies a fee simple determinable

Right of Re-entry: accompanies fee simple subject to condition subsequent

Reversion: future interest that arises in grantor who transfers an estate of lesser quantum that he started with, other than an FS determinable or FS subject to condition subsequent.

Question 10

Future interests in Third Party

Answer 10

Remainders (contingent remainders, indefeasibly vested remainders, vested remainders subject to total divestment, vested remainder subject to open)

Executory Interests (shifting executory interest, springing executory interest)

Question 11

Remainders

Answer 11

Remainders are a future interest created in a third party other than the grantor that follows a life estate or a term of years

1. Contingent Remainders
2. Indefeasibly vested remainders
3. Vested Remainders subject to total divestment
4. Vested Remainders subject to Open

Question 12

Contingent Remainders

Answer 12

Contingent remainders follow a life estate or a term of years and are created in UNASCERTAINED person AND/OR subject to a CONDITION PRECEDENT. If the future interest does not vest, then the grantor has reversion. This interest is subject to the Rule against Perpetuities.

Examples of unascertained person: “to A for life, then to B’s first child.” A is alive, B, as yet, has no children. “To A for life, then to B’s heirs.” A and B are alive. Because a living person has no heirs, while B is alive his heirs are unknown.

Examples of condition precedent: “To A for life, then, if B graduates from college [CP], to B.” A is alive. B is now in HS. Before B can take, he must graduate from college.

Question 13

Vested Remainders

Answer 13

Vested remainders follow a life estate or term of years and are created in ASCERTAINED person and is NOT subject to any condition precedent.

Types: Indefeasibly Vested Remainder, Vested Remainder subject to Total Divestment, Vested Remainder Subject to Open

Question 14

Indefeasibly Vested Remainder:

Answer 14

Follows a life estate or term of years and granted to an ascertained person, who is certain to acquire an estate in the future, with no conditions attached. Ex: “to A for life, remainder to B.” A is alive. B is alive.

Question 15

Vested Remainder Subject to Total Divestment

Answer 15

Follows a life estate or term of years and granted to an ascertained person and is NOT taking subject to any condition precedent, but his right can be cut short by a condition SUBSEQUENT.

when conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to total divestment. Ex: O conveys “to A for life, remainder to B, provided, however, that if B dies under the age of 25, to C.” A is alive, B is 20 years old.

If conditional language appears before the language creating the remainder, the condition is a condition precedent, and establishes a contingent remainder. O conveys “to A for life, and if B has reached the age of 25, to B.” A is alive, and is 20 years old.

Question 16

Vested Remainder Subject to Open (partial divestment or disfeasance)

Answer 16

Following a life estate or term of years, Remainder is vested in a group of takers, at least one of whom is qualified to take. BUT, each class member’s share is subject to partial diminution because additional takers can still join in. Ex: “to A for life, then to B’s children.” A is alive. B has two children, C and D. They have vested remainders subject to open.

Class is OPEN if others can still join. Class is CLOSED when its max membership has been set so that others can’t join, i.e., whenever any member can demand possession. (rule of convenience). But express contrary intent controls.

Question 17

Executory Interests

Answer 17

A future interest that always follows a defeasible fee, created in a transferee (3rd party) which is NOT a remainder and which takes effect by either CUTTING SHORT some interest in ANOTHER person (“shifting”) or in the GRANTOR or his heirs (“springing”).

Shifting Executory Interests: (CUTS OFF THE GRANTEE) “menacing provision” Ex: “to A and her heirs, but if B returns from Canada sometime next year, to B and her heirs.” B has a shifting executor interest. Not a remainder because they don’t follow defeasible fees, only executory interests do. A has fee simple subject to B’s shifting executory interest. NO RAP violation because of 1 yr limit on B’s power.

Springing Executory Interests: (CUTS OFF THE GRANTOR). Ex: O conveys “to A, if and when he marries.” A is unmarried. A has springing executory interest. If and when A marries she cuts off O’s reversion. B has a FS subject to A’s springing executory interest. Doesn’t violate RAP because we’ll know at the end of A’s life (measuring life) if the condition is met or not.

Question 18

Rule Against Perpetuities

Answer 18

RAP is only applicable to 1, contingent remainders 2. executory interests, and 3. certain vested remainders subject to open.

Certain future interests are void if there is a possibility that the given interest may vest more than 21 years after the death of a life in being alive at the time of the grant.

STEP 1: Determine which future interests have been created by the conveyance. Is RAP applicable?
STEP 2: Identify the conditions precedent to the vesting of the suspect future interest.
STEP 3: Find a measuring life (person alive at date of conveyance whose life or death is relevant to the condition’s occurrence)
STEP 4: Will we know, WITH CERTAINTY, whether within 21 years of the death of the measuring life, future interest holders can or cannot take?

Question 19

Joint Tenancy

Answer 19

A concurrent interest in land between two or more people with the right of survivorship, meaning that when 1 Joint tenant dies, his share automatically passes to the surviving joint tenants. Joint tenant interest is alienable (meaning it can be transferred inter-vivos). But it’s NOT DEVISABLE or DESCENDIBLE because of the right of survivorship.

Creation of joint tenancy needs Four Unities (T-TIP)

1. T: Time. Must take interests at same time.
2. T: Title. Must take interests by same title/instrument. Grant must CLEARLY EXPRESS the right of survivorship
3. I: Interest. Same type of interests/shares for same duration.
4. P: Possession. Equal right to possess the whole.

Severance of a joint tenancy can occur through sale, partition, and mortgage.

1. Sale: A JT can sell or transfer her interest during her lifetime, even without the other JT’s knowledge or consent. Selling SEVERS the JT because it disrupts the 4 unities. Thus, the buyer becomes a Tenant in Common. Under common law, a lease of her interest causes a severance. Under Majority, one JT may lease the property without causing a severance.
2. Partition can occur through voluntary agreement, partition in kind (physical division of the property), or forced sale of the property and proceeds are divided
3. Mortagage “Lien Theory” (majority): JT’s execution of mortgage on his interest will NOT sever JT. Mortgage “Title Theory” (minority): One JT’s execution of a mortgage or lien on his share will sever the JT as to the now encumbered share.

Question 20

Tenancy by the Entirety

Answer 20

1. Interest in land between MARRIED partners with RIGHT OF SURVIVORSHIP. 2. Only death, divorce, mutual agreement, or execution by a joint creditor of both the spouses can sever a tenancy by the entirety. 3. On divorce, the tenancy by the entirety becomes a tenancy in common with no right of survivorship

Question 21

Tenancy in Common

Answer 21

1. Interest in land between two or more people with NO right of survivorship
2. Each co-tenant owns an individual part, and each has a right to possess the whole. No single TIC has the right to exclusive possession of any part. Split of ownership does not have to be evenly divided
3. No right of survivorship between tenants in common. Thus, interest is alienable, descendible, and devisable.

Question 22

Rights of Co-tenants: Possession

Answer 22

Each co-T is entitled to possess the whole property.

Ouster: If one co-tenant wrongfully excludes another co-tenant from possession of the whole or any part, he has committed WRONGFUL OUSTER. An ousted co-tenant has the right to her share of the fair rental value of the time she was wrongfully excluded from the property. Not wrongful if they agree that one would possess the whole without the other. Absent wrongful ouster, a co-tenant in exclusive possession is NOT liable to the others for rent

Adverse Possession: Unless he has ousted the co-tenants, one co-tenant CANNOT acquire title to the exclusion of the others. Hostility element of AP is absent without ouster.

Question 23

Rights of Co-tenants: Rent from 3rd parties

Answer 23

A co-tenant who leases all or part of the premises to a 3rd party must account to his co-tenants, providing them their fair share of the rent income.

Question 24

Partition

Answer 24

A Joint tenant or Tenant in Common have a right to bring an action for partition. partition in kind division (physical; preferred) or by sale and division of the proceeds

Question 25

Co-tenant Expenses and Contributions

Answer 25

Carrying Costs: Each T is responsible for his fair share of the carrying costs (like taxes and mortgage interest payments) based upon the share he holds. A co-tenant can compel contribution from the other co-tenants, However, a co-tenant in sole possession is reimbursed only to the extent of the amount that exceeds the rental value of her use of the property.

Repairs: Repairing co-tenant who pays more than pro rata share enjoys “right to contribution” for reasonable and necessary repairs, provided that she has told the other co-tenants of the need for repair. Contribution limited to share.

Improvements: During life of co-tenancy, there is NO RIGHT TO CONTRIBUTION for “improvements” unless there is a partition. A co-T in possession cannot compel contribution for improvements from out of possession co-Ts. However, at partition: the improving co-tenant is entitled to CREDIT, equal to the INCREASE due to his efforts, or bears full LIABILITY for any DROP in value due to his efforts.

Question 26

Leasehold Estate

Answer 26

an estate in land under which the tenant has a present possessory interest in the leased premises, and the landlord has a future interest (reversion). Types include: Tenancy for Years/Term of Years, Periodic Tenancy, Tenancy at Will, Tenancy at sufferance

Question 27

Tenancy for Years / Term of Years

Answer 27

1. A Lease for known, fixed period of time. (could be a day, months, years)
2. Term of years lease longer than 1 year must be in WRITING to comply with SOF.
3. Terminates automatically on the end date without notice because we already know the end date from the start.

Question 28

Periodic Tenancy

Answer 28

1. A Lease that continues for successive intervals with no end date. Can be Express Periodic Tenancy or Implied Periodic Tenancy (Land is leased with no mention of duration, but provision sets payment at certain intervals)
2. The Holdover: in a RESIDENTIAL lease, if L elects to HOLD OVER a T who has WRONGFULLY stayed on past the conclusion of the original lease, an implied periodic tenancy arises, measured by how rent is now tendered.
3. Terminating the Lease:
   L or T must give proper notice to terminate. Usually written notice is required. Under common law: need notice at least EQUAL to period itself, unless otherwise agreed. If tenancy is year to year or greater, need 6 months notice. (1 month notice under the restatement)

Question 29

Tenancy at Will

Answer 29

1. Leasehold estate with Tenancy for no fixed duration. Ex: “to T for as long as L or T desire.”
2. Unless parties expressly agree to tenancy at will, the payment of regular rent will cause a court to treat this as an implied periodic tenancy.
3. Can be terminated by either party at any time, BUT need reasonable demand to vacate.

Question 30

Tenancy at Sufferance

Answer 30

1. Leasehold estate when Tenant has wrongfully held over past expiration of the lease. We give wrongdoer a leasehold estate (tenancy at sufferance) to permit L to collect rent.
2. To terminate, Landlord either evicts Tenant OR decides to hold T to a new tenancy (holdover, implied periodic tenancy)

Question 31

Leasehold Tenant’s Duties

Answer 31

Maintain Premises: T is responsible for keeping the premises in good repair.

Licensees/Invitees: T is liable for injuries sustained by 3rd parties T invited over, even if L expressly promised to make all repairs

Duty to Repair: If Lease is Silent, T must maintain the premises + make ordinary repairs, must NOT commit waste (voluntary, permissive, ameliorative), must NOT remove a fixture, even if she installed it, unless the fixture is a TRADE FIXTURE. If T expressly promises in the lease to maintain property in good condition for the duration of the lease, under the majority rule, T may terminate lease if premises are destroyed without T’s fault.

Duty to Pay Rent: If T breaches rent duty and STAYS, L may either evict through the courts OR continue the relationship and sue for rent owed. L must NOT engage in self-help. This is punishable civilly and criminally.
If T breaches rent duty but LEAVES, L could treat T’s abandonment as an offer of SURRENDER of the lease, L could IGNORE the abandonment and hold T responsible for the unpaid rent, as if T were still there, or L could RELET the premises on the wrong-doer tenant’s behalf, and hold him liable for any deficiency. L must at least TRY to re-let to mitigate damages.

Duty Not to Use Premises for Illegal Purposes: L may terminate lease or sue for damages and injunctive relief if duty is violated.

Question 32

Landlord Duties (6)

Answer 32

Duty to Deliver Possession

Implied Covenant of Quiet Enjoyment

Implied Warranty of Habitability

No Retaliatory Eviction

Fair Housing Act compliance

Tort Liability Compliance (CLAPS)

Question 33

Landlord Duty to Deliver Possession

Answer 33

1. English rule (majority): L must put T in actual physical possession of premises, otherwise L has breached and new T can sue.
2. American rule (minority): L must put T in legal possession of premises, not actual physical possession.

Question 34

Landlord Duty of Implied Covenant of Quiet Enjoyment:

Answer 34

1. T has a right to quiet use and enjoyment of the premises, without INTERFERENCE from L. Applies to: Residential AND commercial leases
2. Actual Wrongful Eviction: Every lease contains implied covenant that neither the L nor someone with paramount title will interfere with T’s quiet enjoyment and possession of the premises. If total eviction, then T does not need to pay rent. If partial eviction by L, T does not need to pay rent at all. If partial eviction by PARAMOUNT TITLE HOLDER, T pays rent by apportionment
3. Constructive Eviction: If L’s act or failure to provide a service that L is legally obligated to provide renders the property uninhabitable, then T may terminate the lease and sue for damages. Tenant must show 1) Substantial Interference due to L’s actions or failures (recurrent or permanent problems); 2) Notice. T must tell L of the problem, and L must fail to act; AND Give L reasonable amount of time to act after notice 3. Goodbye. T must VACATE within a reasonable time after L fails to act.

Question 35

Landloard’s Implied Warranty of Habitability

Answer 35

1, Warranty by landlord that The premises must be fit for BASIC human dwelling. Not waivable.
Applies to residential ONLY, not commercial leases

2. If L breaches, T does NOT have to vacate, like in constructive eviction. T can either 1) Move out and end the lease; OR
   2) Repair and deduct; OR
   3) Reduce rent OR withhold all rent until Ct determines fair rental value (T usually must place withheld rent into escrow to show good faith); OR
   4) Remain in possession, pay rent, and affirmatively seek money damages.

Question 36

Landlord Duty to avoid Retaliatory Eviction:

Answer 36

If T lawfully reports L for housing code violations, L is barred from penalizing T through raising rent, ending the lease, harassment, etc.

Question 37

Landlord Compliance with Fair Housing Act

Answer 37

1. The Fair Housing Act protects tenants and potential tenants from discrimination based on race, color, religion, national origin, sex, or disability, as well as familial status (except in senior housing).
2. Exemptions: the Fair Housing Act does not apply to (1) owner-occupied buildings with four or fewer units in which persons live independently of each other; and
   (2) single-family homes sold or rented by an owner who owns no more than three single-family homes.
3. Examples: Unlawful to Refuse to negotiate, rent, or sell housing or make available a mortgage loan or other financial assistance; Provide different terms or conditions for the sale or rental of a dwelling or for a mortgage or other financial assistance; and Falsely represent that a dwelling is not available for inspection, sale, or rental; Advertise discriminatorily; Refuse to allow disabled tenants to make reasonable modifications

Question 38

Landlord’s Tort Liability

Answer 38

1. Common Law Caveat Lessee: “let the tenant beware.” In tort, L had no duty to make premises safe.
2. Exceptions: “CLAPS”
   C: Common areas. L must maintain all common areas, like hallways and stairwells.
   L: Latent defects. L must WARN T of hidden defects that L knows or should know about, BUT no duty to repair. Just a duty to warn.
   A: Assumption of repairs. L who voluntarily makes repairs must complete them with reasonable care.
   P: Public use. L who leases public space (ex: convention hall, museum, amphitheater), and who should know because of nature of defect and length of lease that T will NOT repair, L is liable for any defects on the premises.
   S: Short term lease of furnished dwelling: L is liable for ANY defects that harm T.

Question 39

Transferability of a Leasehold Estate

Answer 39

1. Absent a prohibition in the lease, a T may freely transfer his interest in whole (assignment) or in part (sublease).
2. L can prohibit T from assigning or subletting without L’s prior written approval.
3. Consequence: If T violates no-assignment/no-sublease clause, L can 1. terminate lease, 2. evict, 3. collect damages against original T. BUT the transfer is NOT VOID.
4. Waiver: However, once L consents to ONE transfer by T, L waives the right to object to future transfers by that T, unless L reserves the right.

Question 40

Assignment v. Sublease

Answer 40

Assignments: A complete transfer of the entire remaining portion of the lease term. Assignee is in privity of estate with L and is liable for all covenants in the original lease that run with the land. Assignor (original tenant) is in privity of contract with L still and is secondarily liable to L, but is not in privity of estate.

Subleases: A partial transfer of the remaining portion of the lease term. L and sublessee are neither in privity of estate nor privity of K. Everything goes through T.

Question 41

Licenses

Answer 41

1. Licenses are a mere privilege to enter another’s land for some delineated purpose, not a right.
2. NOT subject to SOF.
3. Freely Revocable at the will of the licensor, UNLESS estoppel applies to bar revocation.
4. Cannot take anything from the land (that would be a profit)
5. Classic license cases: Ticket cases; ORAL grants of easements because they violate SoF.

Question 42

Profits

Answer 42

1. Profits are a non-possessory interest in land that entitles the profit holder to enter the servient land and take resources from the land (soil, timber, materials, gravel, fish).
2. Implied in every profit is an easement. Profits share all the rules governing easements.
3. Profit Appurtenant: If the profit exists to serve a dominant estate, the profit is appurtenant and can only be transferred along WITH the actual transfer of the dominant estate (i.e. cannot just assign the right to the resources)
4. Profit in gross. If the profit does not exist to serve a dominant estate, it is a profit in gross and may be transferred separate and apart from the dominant estate (i.e. can just assign the right to the resources)

Question 43

Easements

Answer 43

1. An easement is the grant of a non-possessory property interest that entitles its holder to some form of use or enjoyment of another’s land (servient tenement).
2. Negative Easement entitles holder to prevent servient landowner from engaging in some activity on the servient estate. Can only be created EXPRESSLY, through a WRITING signed by the grantor. Generally only includes light, air, support, stream of water from an artificial flow, and Scenic views (minority only)
3. Affirmative Easement: right to do something on servient land. Can be created through 1) Prescription (satisfying adverse possession elements “CONAH”); 2) Easement implied from existing use if Previous use was apparent; AND Parties expected use to continue because it is reasonably necessary to the dominant tenement’s use and enjoyment. 3) Necessity. landlocked setting that deprives one of any access to a public road or utility line; 4) Grant or Reservation (express easements). Easement to endure for more than 1 year must be in writing that has same formal elements of a deed.
4. Effect of Failing to Record: improper recording of an easement does NOT affect rights of the original parties to transaction. Although an unacknowledged instrument does NOT impart constructive notice to subsequent purchasers, it has no effect on the validity of the easement as between the original parties. But a BFP could take the land without the easement if there is no notice.

Question 44

Easements Appurtenant and Easements in Gross

Answer 44

1. Easement Appurtenant: Easement benefits the dominant tenement in his physical use or enjoyment of his property. Dominant Tenement: derives the benefit. The benefit of the easement appurtenant passes automatically with the dominant tenement, regardless of whether it is mentioned in the conveyance. Servient Tenement: bears the burden. The burden of easement appurtenant automatically passes with servient estate UNLESS new owner is BFP (without notice).
2. Easement in Gross: Easement confers upon its holder some PERSONAL or PECUNIARY advantage that is NOT related to his use or enjoyment of his land. Servient land is burdened, but there is no benefited or dominant tenement. Will only transfer with the land for commercial purposes. If not for commercial purposes (i.e. residential), then not transferable.

Question 45

How can easements be terminated? ENDCRAMP

Answer 45

1. Estoppel: Servient owner MATERIALLY changes his position in reasonable reliance on easement holder’s assurances that easement will no longer be enforced.
2. Necessity ends: Easements created by necessity expire as soon as the need ends UNLESS it was created by express grant.
3. Destruction of the servient land: Destruction ends the easement UNLESS it was through the WILLFUL CONDUCT of the SERVIENT owner.
4. Condemnation of the servient land: Condemnation by EMINENT DOMAIN will end an easement.
5. Release: A written release, given by easement holder to the servient owner, ends the easement.
6. Abandonment: Easement holder must demonstrate by PHYSICAL ACTION the intent to NEVER use the easement again. Note: Mere NONUSE or WORDS are INSUFFICIENT to terminate by abandonment.
7. Merger doctrine: Easement is extinguished when TITLE to the easement and title to the servient land become vested in ONE person. Doesn’t matter if there’s separation of title later, the easement isn’t revived. To recreate, must start from scratch.
8. Prescription: servient owner can extinguish easement by interfering with it per adverse possession elements. “CONAH”. This time, “C” stands for continuous INTERFERENCE, not USE.

Question 46

Covenants

Answer 46

1. A covenant is a promise to do or not to do something related to land. The remedy is always money damages.
2. Negative / Restrictive Covenant: promise to REFRAIN from doing something related to land.
3. Affirmative Covenant: promise to DO something related to land.

Question 47

Does the Covenant Run with the Land?

Answer 47

A real covenant, usually found in a deed, can run with the land, which means that subsequent owners may enforce or be burdened by the covenants. In order to enforce the covenant, the elements must be met

The BURDEN of A’s promise to B runs from A to A-1 only if “WITHN”

1) W: Writing. Original promise between A and B must be in writing.
2) I: Intent. Original parties, A and B, INTENDED that the covenant would RUN.
3) T: Touch and concerns the land. Promise affects the parties’ legal relations as landowners, and not simply as members of the community at large (Covenants to pay money to be used in connection with the land (HOA fees) DO touch and concern the land)
4) H: Horizontal AND vertical privity: Horizontal privity: At the time the promisor and the promisee entered into the covenant, they share some interest in land independent of the covenant (Ex: grantor / grantee, mortgagor / mortgagee, landlord / tenant relationship.) Vertical privity: NON-HOSTILE nexus between A and A-1. (Ex: contract, devise, descent.
5) N: Notice: Under modern recording statutes, a BFP who has no notice of the covenant and records takes free of the covenant.

The BENEFIT of A’s promise to B runs from B to B-1 if “WITV”

1) W: Writing. Original promise between A and B was in writing.
2) I: Intent. Original parties intended that benefit would run.
3) T: Touch and concern. Promise affects parties as landowners.
4) V: Vertical privity. NON-HOSTILE nexus between B and B-1. Don’t need horizontal privity for benefit to run.

Question 48

Equitable Servitude

Answer 48

1. If P wants an injunction or specific performance, he must show that the covenant qualifies as an EQUITABLE SERVITUDE. Equitable servitude is a covenant (promise to do or not do something on the land) that, regardless of whether it runs with the land at law, EQUITY will enforce against successors of the burdened landed who have notice of it (remedy = injunctive relief)
2. Creation of equitable servitudes that will bind BURDENED successors requires “WITNES”
   1) W: Writing. (generally, but not necessarily).
   2) I: Intent. “Grantee agrees for himself and assigns”
   3) T: Touch and concern. = affects parties as landowners
   4) N: Notice. Successors of the burdened land had notice.
3. Creation of equitable servitudes that will bind BENEFITED successors require
   1) I: Intent. “Grantee agrees for himself and assigns”
   2) T: Touch and concern = makes the land itself more useful or valuable to the benefited party (i.e. increases enjoyment of the land)
4. Defense to enforcement of Equitable Servitude: Changed conditions.Changed circumstances/conditions are SO PERVASIVE that the ENTIRE area has changed FOREVER.

Question 49

Implied Equitable Servitude aka General or Common Scheme Doctrine

Answer 49

Equitable Servitude is IMPLIED, even when not written, when:

(1) When the sales began, the sub-divider had a GENERAL SCHEME of residential development which included defendant’s lot.
(2) Defendant lot holder had NOTICE of the promise contained in the prior deeds through Actual notice, Inquiry notice, or Record notice.

Question 50

Common Interest Developments

Answer 50

1. Housing developments of individually owned units with shared facilities and common areas. Typically governed by an HOA or other association made up of individual unit owners, most often through an elected board.
2. Enforcement: To ensure compliance, a board may impose fines, penalties and late fees; withdraw privileges to use common rec or social facilites; require prior submission of plans for projects to ensure compliance with existing restrictions; conduct reasonable inspections of property for violations with reasonable belief such violation exists; deny voting privileges or board positions
3. Direct restraints on alienation are valid if they are reasonable. Ex: prohibitions on transfer without consent of the HOA, rights of first refusal, requirements that transfers be made only to persons meeting certain eligibility requirements. Indirect restraints are valid so long as there is a rational justification (less demanding than reasonableness). Regulations later adopted by HOA for community government must be reasonable

Question 51

Adverse Posesssion

Answer 51

Possession of property for a statutorily prescribed period of time can ripen into TITLE, if the elements are met:
C: Continuous possession. Uninterrupted for statutory period.
O N: Open and notorious possession. The sort of possession that the usual owner would make under the circumstances, and sufficiently apparent to put the true owner on notice that trespass is occurring.
A: Actual and exclusive possession. Not sharing with owner or public.
Actual use is the kind of use the true owner would make of the parcel and is designed to give the true owner notice of the trespass
H: Hostile. Without permission.

2. Note: Possessor’s subjective state of mind is irrelevant. Doesn’t matter if the possessor doesn’t know or is purposefully adversely possessing or not
3. Tacking: One possessor may tack on his time adversely possessing the land with his predecessor’s time on the land, so long as there is PRIVITY. (simply need non-hostile nexus, like blood, K, deed, will), as long as there has been no OUSTER. Ouster ends the continuous period and tacking no longer can occur
4. Statutory period will NOT run against a true owner who is afflicted by a disability at the START of adverse possession.
5. Future Interests: AP does not run against the holder of a future interest. Adverse possession will end once the life estate ends and interest goes to the remainder.
6. Covenants: If an APer uses land in violation of a recorded real covenant for the limitations period, she takes title free of the real covenant. BUT, if APer complies with the covenant for the statutory period, she takes title subject to the real covenant.

Question 52

2 Steps of Land Conveyancing

Answer 52

Step 1: The LAND K, which endures until step 2 in process called escrow, then merges with the deed.
Step 2: The CLOSING, where the deed becomes our operative document.

Question 53

Land Conveyancing: The Land Contract

Answer 53

1. Must comply with STATUTE OF FRAUDS:
   1) The land K must be in WRITING;
   2) SIGNED by the parties to be BOUND;
   3) DESCRIBES the land; and
   4) IDENTIFIES the parties
   5) States some CONSIDERATION.
2. If it does not comply with Statute of Frauds, Doctrine of Part Performance Exception can apply. If 2 of the 3 are satisfied of POSSESSION, PAYMENT, or IMPROVEMENTS, an oral K of sale can be enforceable, so long as the acts of part performance unequivocally prove the existence of the contract.
3. Risk of Loss: Under the Doctrine of Equitable Conversion, once the K is SIGNED, buyer OWNS the land, SUBJECT TO payment of purchase price at closing. If, in the interim between K and closing, Blackacre is destroyed through NO FAULT of either party, B bears the risk of loss UNLESS K says otherwise. Either party can demand SPECIFIC PERFORMANCE, meaning the full K price. OR, if the seller dies between the land sale K and the closing, that leaves a will giving the real estate to another, the buyer still owns the property subject to payment at closing.

Question 54

Implied Promises in Land Sale Contracts

Answer 54

1. Marketable Title: Seller’s promise to provide MARKETABLE TITLE at the closing, meaning Title is free from reasonable doubt, lawsuits, and threat of litigation. Adverse possession, encumbrances, zoning violations would make title unmarketable. If B determines that S’s title is unmarketable, B must notify the seller and give a reasonable time to cure the defects (i.e. closing date can be extended). If S fails to cure the defects, then the buyer may RESCIND the contract, SUE for damages for breach, get SPECIFIC PERFORMANCE w/ abatement of purchase price, or (in some jxs) require the seller to quiet title.
2. No Lies/Omissions: S promises NOT TO MAKE ANY FALSE STATEMENTS OF MATERIAL FACT. Majority: Seller also liable for failure to disclose LATENT MATERIAL DEFECTS and MATERIAL LIES/OMISSIONS.

Question 55

Land Conveyancing: Closing

Answer 55

1. Controlling document is now the DEED, which passes LEGAL title from seller to buyer. The contract and the deed merge together, and the deed controls and the terms of the K become meaningless.
2. To pass legal title from seller to buyer:
   1) Must be in WRITING,
3. SIGNED by GRANTOR.
   3) DESCRIPTION of land that is UNAMBIGUOUS and provides a GOOD LEAD as to what the land is passing (Deed doesn’t have to describe consideration)
   4) Adequately IDENTIFIES the parties
   5) Evidences an INTENT TO TRANSFER the property
   6) Deed is delivered to the grantee through physical transfer or present intent to bound

Question 56

Types of Deeds

Answer 56

1. Quitclaim Deed (WORST deed for buyers): contains NO covenants. Grantor is NOT promising that he even has title to convey.

2. General Warranty Deed (the BEST deed for buyers):  warrants against ALL defects in title, including those due to grantor’s PREDECESSORS. 
Present covenants: (1) Covenant of Seisen:  grantor promises he owns the estate. (2) Covenant of Right to Convey:  grantor has the power to transfer without temporary restraints on alienation/capacity to sell.  Grantor is also of requisite age and of sound mind. (3) Covenant against Encumbrances:  grantor promises that there are no mortgages, liens, easements, or covenants/servitudes on the estate. 
Future covenants (4) Covenant of Quiet Enjoyment:  grantee will not be disturbed in possession by a 3rd party’s lawful claim of title (like mortgagees). (5) Covenant of Warranty: grantor promises to defend grantee against any lawful (valid) claims of title brought by others. (6) Covenant for Further Assurances:  grantor will do what is reasonably needed in the future to perfect the title.  

3. Special Warranty Deed (provided by statute in many states if type of deed is not specified): grantor makes two promises only on HIS BEHALF that (1) Grantor has not conveyed Blackacre to anyone other than grantee. and (2) Blackacre is free from encumbrances made by grantor.

Question 57

Recording Systems

Answer 57

1. NOTICE Jurisdiction : LAST BFP, regardless of whether or not he records, wins. Bonafide purchasers MUST Purchase for value without notice that someone else got there first. Thus, the last BFP always wins, unless the buyer had notice of a previous buyer
2. RACE-NOTICE Jurisdiction: must be a BFP AND be FIRST to record. Thus, if a buyer does not have notice of a previous buyer and records before the previous buyer, he wins
3. RACE Jurisdiction: first to record wins
4. Shelter Rule: One who takes from a BFP will prevail against any entity that the transferor-BFP WOULD’VE PREVAILED against. Transferee “steps into the shoes” of the BFP even though he otherwise fails to meet the requirements of BFP status.
5. The Wild Deed: If a deed, entered on the records (A to B), has a grantor unconnected to the chain of title (O to A, A didn’t record, A to B, B records, A to B is wild deed), then the deed entered on the record is actually a wild deed. It is INCAPABLE of giving RECORD NOTICE of its existence. As if deed was never recorded.
6. Estoppel by Deed: One who conveys realty in which he has no interest, is estopped from denying the validity of that conveyance IF he later acquires that previously transferred interest

Question 58

Mortgage

Answer 58

1. Mortgage: Conveyance of a security interest in land, intended by the parties to be collateral for repayment of a debt.
2. Mortgage must be in writing to comply with SOF.
3. All parties can transfer their interests. Mortgage AUTOMATICALLY follows a properly transferred note (i.e. runs with the land if it was properly recorded under the recording system of the jurisdiction)

Question 59

Foreclosure

Answer 59

1. Mortgagee must foreclose by PROPER JUDICIAL ACTION so that the land is SOLD and sale proceeds SATISFY the debt.
2. Fees paid off the top of the sale:
   FIRST: Attorney’s fees, foreclosure expenses, any accrued interest on the foreclosed loan,
   THEN: junior interests in the order of their priority, and
   LAST: finally to the mortgagor.
   If sale proceeds are LESS than the debt owed: mortgagee can bring deficiency action against debtor.
   If sale proceeds produce a SURPLUS to debt owed: junior liens are paid in order of their priority with remainder to the debtor-mortgagor.
3. Foreclosure DOES NOT affect any senior interests. The new buyer takes subject to such interest, but is NOT personally liable on the senior debt.
4. Necessary Parties: Those with interests junoior to those of the foreclosing party are necessary parties to the foreclosure action and must be named in the foreclosure, or else that party’s claim remains on the land, or may collect mortgage from foreclosing interest that didn’t notify. Prior to foreclosure, a junior mortgagee has the right to pay off (i.e., redeem it) the senior mortgage that is being foreclosed in order to avoid being wiped out by its foreclosure.
5. Right to Redeem: mortgagor has the equitable right to redeem the property and it cannot be waived, ANY TIME PRIOR to the foreclosure sale by paying off the AMOUNT DUE (missed payments, interest, costs), OR if subject to an acceleration clause, mortgagor must pay FULL BALANCE to redeem the property. Statutory Redemption (1/2 states allow): mortgagor may have right to redeem property for fixed period AFTER foreclosure sale has occurred.

Question 60

Natural Rights Incidental to Ownership of Land

Answer 60

1. Lateral Support: If land is in NATURAL STATE (no buildings), excavator is strictly liable if his excavations cause the land to subside. If land is IMPROVED BY BUILDINGS, and adjacent landowner’s excavation causes it to cave in, excavator will be liable ONLY IF NEGLIGENT.
2. Subjacent Support: An underground occupant of land (ex: mining company) must support the surface and buildings existing on the date the subjacent estate was created. Liability for subsequently erected buildings requires NEGLIGENCE.
3. Water Rights:
   1) Riparian Doctrine: water belongs to those who own the land bordering the water course.
   2) Prior appropriation doctrine: water belongs initially to the state, but the right to divert it and use it can be acquired by an individual, regardless of whether he happens to be a riparian owner.
   3) The surface owner is entitled to make REASONABLE use of groundwater. Use must NOT be wasteful.
   4) Surface Water: surface water is a common enemy for its ability to get stuck on the land. Landowner may change drainage or make ANY other changes /improvements on his land to combat the flow of surface water.
4. Right to be free from trespass or nuisance.
   1) TRESPASS: the invasion of land by tangible, physical object. Trespassers are removed via ejectment.
   2) Private nuisance: the “substantial and unreasonable interference” with another’s use and enjoyment of land.
   3) Public Nuisance: an unreasonable interference with the health, safety, or property rights of a broad segment of the community.

Question 61

Eminent Domain

Answer 61

1. Government’s 5th Amendment power to take private property for public use in exchange for just compensation.
2. Explicit takings: acts of governmental condemnation.
3. Implicit or Regulatory Takings: governmental regulation that, although not intended to be a taking, has the same effect.
4. Remedies: Gov may compensate the owner, OR terminate the regulation and pay the owner for damages incurred during regulation’s effect.