Property Flashcards
Adverse Possession
The elements of adverse possession requires possession which is:
1. Open and notorious (it would put a reasonable person on notice that it was occurring);
2. Actual and exclusive (the possessor uses the property);
3. Hostile or adverse (possessor lack owner’s permission or consent);
4. Continuous (possessor constantly using property for the purpose and in the manner reasonably and normally intended); and,
5. For the statutory period.
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(1) open and notorious (if it would put a reasonable person on notice that it was occurring);
(2) actual and exclusive (if only the possessor uses the property);
(3) hostile or adverse (lack of the owner’s permission or consent);
(4) continuous (constantly being used for the purpose and in the manner reasonably and normally intended)
(5) for the statutory period.
There can never be adverse possession against a government
But government can adversely possess private property
Adverse possession does not give marketable title
- So they cannot sell the property.
- Unless the adverse possessor gets a judicial decree of title in a quiet title action,
Fee simple
“O to A” or “O to A and his heirs” creates fee simple
Life estate
Life estate is followed either by a reversion or remainder
Life tenant pays taxes and mortgages to the extent of income from property or reasonable rental value
Life estate per autre vie
This life estate only last as long as the life of other
Remainder
Follows a life estate, not a fee estate
Vested Remainder
imposes no conditions
E.g., “To John and his heirs”
Contingent Remainder
Subject to conditions
Where the remainderman must first fulfill a condition
E.g., “To John, if he attains the age of 21.”
Fee Simple Determinable (FSD)
To A “so long as” property is used as a …” and followed by a possibility of reverter in the grantor
E.g., “to A so long as the property is used as a park,”
Fee Simple Subject to Condition Subsequent (FSSCS)
- To A;
- “but if the property ceases to be used as a …” and followed by a right of entry – must be exercised or else subject to laches defenses.
E.g., “to A, but if the property is no longer used as a park, then to O,”
FSD or FSSCS followed by estate in third party is an Executory Interest
If a defeasible fee such as a FSD or FSSCS is not followed by an estate in the grantor, but instead is followed by an estate to a third party, the interest in the third party is an executory interest.
Doctrine of Merger
Under the doctrine of merger, if the same person acquires both the present and all future estates (such as a life estate and a remainder), they merge into the fee title. But if the duration of the estates differs, there is no merger
Class Gifts
The Rule of Convenience provides that, absent a contrary intention in the instrument to include all members of a class whenever born, the class closes when some member of the class can call for distribution of her share.
Class gifts are gifts to a defined group.
E.g., to T’s grandchildren. Two grandchildren alive, one predeceased. One born after T’s death.
The last one born is not in the class – it closed.
Rule Against Perpetuities
Future interest must vest, if at all, within the lives in being plus 21 years.
The validity of the interests under the Rule against Perpetuities is determined at the time the interests are created, taking into account the facts then existing.
Applies Only to Contingent remainders, executory interests, class gifts, options and rights of first refusal, and powers of appointment
In determining the life in being, they should be connected to the beneficiaries. Thus, consider who biologically produces the beneficiaries, and their relationship to the testator/grantor.
- If such persons could be born AFTER the death of the testator or date of the deed, the Rule is violated.
- Defeasible fee to a third party other than grantor
Valid Interest
Rule Against Perpetuities
Since an interest, to be valid, must vest in the time period, vesting occurs either:
- when it becomes a present possessory estate (i.e., the life estate takes effect, or the fee goes to the transferee), or
- when it becomes an indefeasibly vested remainder or a vested remainder subject to total divestment.
Concurrent Estates
- Joint Tenancy
- Tenancy in Common
Unless otherwise started, title in co-tenants/co-owners is presumed tenancy in common
Joint Tenancy
Joint tenancy requires 4 unities and right to survivorship. The four unities requires joint tenants to take their interest at the same time, by the same title with identical equal interest and identical right to possess the whole.
Elements:
1. 4 unities
2. right to survivorship
4 unitities - JT must take their interests,
* At the same time
* By the same title
* Identical equal interest, and
* Identical right to possess the whole;
Even if the granting instrument grants property to A, B and C as joint tenants, discuss why each of the four unities is met, and whether there is survivorship, before concluding that there is a joint tenancy.
Approach JT
analysis
Even if the instrument grants the property to A, B and C as joint tenants, discuss:
1. why each of the four unities is met, and
2. whether there is survivorship,
before concluding that there is a joint tenancy.
Tenancy in Common
2 or more owners with no right of survivorship
Severance of Joint Tenancy
- by transfer/conveyance of their interest to a third person results in Tenancy in Common
- By Mortgage
(a) Majority - Lien Theory States - liens and mortgages do not sever a joint tenancy on creation of the lien or mortgage –> On death of mortgagor joint tenant, lender loses interests
(b) Minority - Title Theory States - a mortgage will sever a joint tenancy on execution but the lender/mortgagee only holds the mortgage on the ½ tenancy in common interest owned by the mortgagor co-tenant, and if the mortgagor co-tenant dies, the mortgage survives on that one-half tenancy in common interest.
Rights and Liabilities of Co-Tenants
6 Rights
- Both have a right to possess all of the property, but a co-tenant not in possession cannot bring a possessory action (or claim rent from a possessing co-tenant) unless there has been OUSTER (wrongful exclusion of co-tenant from possession —usually by the possessing cotenant claiming a right of exclusive possession.)
- Co-tenant in possession has the right to retain profits gained by use of the property, and there is no need to share those profits with other co-tenants or reimburse them for rent, absent a written agreement to the contrary or if the profits are from uses that deplete the property’s value.
- Co-tenant out of possession has the right to pro rata share in rents from 3rd parties and in profits from uses that deplete the property’s value.
- Co-tenant in sole possession who pays for necessary repairs has right to reimbursement (some states require giving of notice before repairs made)
- No reimbursement for improvements
- Co-tenant in sole possession who pays taxes and mortgages is only entitled to reimbursement in teh amount that exceeds the rental value of the property.
Co-tenant’s Right to Possess the Property and Rent Payment and Issue of Ouster
Both have a right to possess all of the property, but a co-tenant not in possession cannot bring a possessory action (or claim rent from a possessing co-tenant) unless there has been OUSTER (wrongful exclusion of co-tenant from possession —usually by the possessing cotenant claiming a right of exclusive possession.)
Co-tenant In Possession Right to Retain Profits
Co-tenant in possession has the right to retain profits gained by use of the property, and there is no need to share those profits with other co-tenants or reimburse them for rent, absent a written agreement to the contrary or if the profits are from uses that deplete the property’s value.
Co-tenant out of possesion right to rent from 3rd party
Co-tenant out of possession has the right to pro rata share in rents from 3rd parties and in profits from uses that deplete the property’s value.
Co-tenant Right to Contribution/Reimbursement for Necessary Repairs but not Improvement
A co-tenant who pays more than the pro rata share for necessary repairs is entitled to contribution from the other co-tenants in an action for accounting or partition. In addition, a majority of courts permit an independent action for contribution if the repairs are necessary and the repairing co-tenant first gives notice to the other co-tenants.
Co-tenant in sole possession who pays for necessary repairs has right to reimbursement (some states require giving of notice before repairs made)
No reimbursement for improvements
Co-tenant duty to pay taxes and mortgage
Each co-tenant has a duty to pay her share of taxes and mortgage payments on the property.
A co-tenant who is not in possession but pays these expenses is entitled to contribution from the other co-tenants.
But a co-tenant in sole possession who pays the taxes and mortgage is only entitled to reimbursement in the amount that exceeds the fair rental value of the property.
Co-tenant in Sole Possession Right who pay taxes and mortgages
Co-tenant in sole possession who pays taxes and mortgages is only entitled to reimbursement in the amount that exceeds the rental value of the property.
Landlord-Tenant
Analysis
- Identify the type of Lease;
- Keep it brief
- Do not catalogue all types of tenancy but just focus on which type is described in the fact pattern
- Understand why each is important in terms of renewal or terminations
- Discuss whether there is a failure by the tenant to pay rent;
- Discuss tenant’s defenses to their failure to pay rent;
- Discuss, if any, issues arising from assignment of the lease by either the landlord or the tenant.
Types of Lease
Landlord-Tenant
- Term of years lease
- Periodic (including month to month)
Term of years lease
Landlord-Tenant
Term of years lease is a lease with set start and end dates; it automatically ends on the termination date, without either party giving notice, and no renewal absent exercise of a renewal clause.
The unjustified failure to pay rent subjects a tenant to the obligation to pay rent to the end of the term, absent any defenses.
Periodic (including month to month)
Landlord-Tenant
A lease that continues from year to year, or successive fractions, such as a month to month lease. It automatically renews unless it is terminated by timely submitting the written notice - at a minimum of 30 days.
If a tenant fails to properly terminate a periodic tenancy, they will owe rent, unless they can argue there has been a breach of express or implied covenants.
It can only be terminated by the giving of written notice—usually a minimum of 30 days, but longer if the period is for a longer time.
If a tenant fails to properly terminate a periodic tenancy, they will owe rent, unless they can argue there has been a breach of express or implied covenants
Holdover
Landlord-Tenant
Holdover occurs if the tenant stays beyond the term of the lease by landlord’s consent. The lease continues for the same rent, but the landlord can terminate the lease by a 30-day oral or written notice.
Termination
Roadmap for Tenant to Terminate
- Notice required – lease will control
- Often 30 days in periodic leases – must be writing
- 30 days in holdover leases – oral or written notice ok
- Can be more in a term for years - one month notice
Landlord Duty to Mitigate on Breach of Lease by Tenant
The landlord’s failure to mitigate is a defense to the nonpayment of rent. When a tenant wrongfully terminates the lease and breaches their duty to pay rent, the landlord must attempt to reasonably re-let the premises.
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1. If a tenant wrongfully terminates the lease and breaches their duty to pay rent, the landlord does have a duty to mitigate by attempting to reasonably re-let the premises.
2. The landlord’s failure to mitigate is a defense to the nonpayment of rent.
3. Only discuss if there are facts indicating landlord did not try to mitigate
Conveyancing Interest in Lease
When conveying the tenant’s interest, the landlord’s interest, or both, –> assignment and/or sublease is the next issue to discuss.
- If a sublease is intended, you will be told that the tenant reserved part of the term back or part of the premises.
- Otherwise, presume an assignment.
Rule of Covenant prohibiting assignment/sublease
A covenant not to assign or sublease will be enforced, although consent cannot be unreasonably withheld.
Assignments
analysis
- Whether a lease can be assigned, and
- Whether the lease was assigned
Assignments
An assignment assigns the entire leasehold estate—it is a complete transfer of all the leased premises for the remaining term. Absent a novation, both the assignee and assignor remain liable on the covenant to pay rent, because the assignor [having signed the original lease] is in privity of contract with the landlord, and the assignee [who is now in possession] is in privity of estate, unless the landlord and new tenant execute an assumption of the lease.
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An assignee stands in the shoes of the original tenant in a direct relationship with the landlord: they are in “privity of estate” and each is liable to the other on all the covenants in the lease that “run with the land.” The original tenant and landlord remain in “privity of contract.”
Effects of assignment:
* An assignee stands in the shoes of the original tenant in a direct relationship with the LL,
* Assignee and LL are in “privity of estate” and
* Each is liable to the other on all the covenants in the lease that “run with the land”
* Original T and LL remain in “privity of contract”
Subleases
If the tenant retains any part of the premises or any of the remaining term, he has made a sublease. A sublessee is not liable to the landlord for rent, but if the rent is not paid to the landlord, the landlord can terminate the sublease and evict the sublessee.
Effects of sublease:
* A sublessee is not liable to the landlord for rent,
* if the rent is not paid to the landlord, the landlord can terminate the sublease and evict the sublessee.
Landlord-Tenant Right and Duties
Tips
- be aware of each party’s rights and duties,
- take each right one at a time
- always considering the specific question and what is being asked,
- separating the discussion of the landlord’s and the tenant’s duties.
- landlord has the right to receive rent for the term
- Notice must be in writing and delivered to terminate a periodic tenancy.
- Whenever there is a residential lease and some difficulties with the property, consider both quiet enjoyment and habitability.
- Only discuss the landlord and tenant implied covenants if they are implicated, but if the landlord’s covenants are implicated, discuss the tenant’s duty to pay rent first.
- Dealing with implied covenants, the obligations exist despite not being in the lease
Fixtures
Tenant’s duty
Tenant has a duty not to remove fixtures.
A fixture is something affixed to the property such that removal would cause substantial damage to the property
Exceptions:
* written agreement;
* trade fixtures - equipment used in the tenant’s trade or business
Landlord’s and Tenant’s Covenants in Lease
Approach
- Discuss implied covenants and express covenants separately
- a breach of either may be a defense to payment of rent.
Tenant’s Duty to Pay Rent /
Landlord’s Right to Receive Rent
The landlord has the right to receive rent for the term. Tenant’s failure to do so normally would entitle landlord to damages for unpaid rent and may evict tenant from the premises.
Landlord’s Implied Covenants
Landlords Violated Their Covenant
The landlord’s implied in law covenants, which automatically run when a lease is assigned, are:
* the landlord’s duty to deliver possession (including timely possession),
* the landlord’s covenant of quiet enjoyment and non-disturbance (which goes to the use and enjoyment of the premises), and
* the landlord’s implied warranty of habitability (that the property is reasonably suitable for human residence, and which generally extends to residential but not commercial property).
Implied Covenant of Duty to Deliver Possession
the landlord’s duty to deliver possession (including timely possession)
Implied Covenant of Quiet Enjoyment
Implied in every lease is a covenant that neither the landlord nor someone with paramount title will interfere with the tenant’s quiet enjoyment and possession of the premises.
Implied Covenant of Quiet Enjoyment and Non-disturbance -
Actual and Partial Physical Eviction
The implied covenant of quiet enjoyment can be breached by actual or partial physical eviction. Both require that the landlord physically exclude the tenant from part or all of the property.
Implied Covenant of Quiet Enjoyment and Non-disturbance -
Constructive Eviction
The implied covenant of quiet enjoyment can also be breached by constructive eviction, which requires that the landlord breach a duty set out in the lease, the breach substantially and materially deprived the tenant of use and enjoyment of premises, and Tenant gives notice and reasonable opportunity to cure, OR Landlord refuses to repair. [Even if a third party causes the problem for the tenant, the landlord is still liable for constructive eviction if they have an obligation of repair or otherwise to remediate the constructive eviction.]
The remedy is for tenant to move out and terminate the lease if he moved out timely or otherwise tenant waive it.
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The remedy is to timely move out, or otherwise tenant waive it if not timely move-out.
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**Even if a third party causes the problem for the tenant, the landlord is still liable for constructive eviction if they have an obligation of repair or otherwise to remediate the constructive eviction.
**such obligations almost always are set out in most modern leases. **
landlord duty to repair the premises is implied - doesn’t have to be in the lease
Elements of Constructive Eviction
Elements of Constructive eviction:
1. Landlord breaches a duty set out in the lease
2. Breach substantially and materially deprives the tenant of use and enjoyment of premises
3. Tenant gives notice and reasonable opportunity to cure, OR Landlord refuses to repair
4. Remedy – move out and termination if done promptly; otherwise waived if there is no timely move-out.
Then discuss what implied duty landlord has:
e.g., A landlord has a duty under most leases to make material repairs to the premises where required, so it is likely that the lease here had such a provision.
Implied Warranty of Habitability
The implied warranty of habitability provides that the property is reasonably suitable for human residence. It generally extends to residential [but not commercial property].
If the warranty of habitability is breached, the tenant has three options for remedies:
(1) move out and terminate the lease, or
(2) make repairs and offset the cost against their rent or
(3) seek damages against the landlord.
Tenant’s Implied Covenants
- Tenant’s covenant to pay rent
- the breach of which gives rise to the right to terminate the lease and to evict tenant from the premises
- Tenant’s covenant to repair any damage they caused. T must also maintain premises and make ordinary repairs
- Tenant’s covenant not to commit waste
- Affirmative
- Permissive
- ameliorative
When to Discuss Express Covenants in Lease Run with the Land
Trigger
When the express covenants (other than the covenant to pay rent) is in the lease and the lease has been assigned by either the landlord or tenant or both, you MUST discuss and determine if each such covenant runs with the land.
Express Covetants in Lease - Run with the land
In a lease, express covenants run with the land if:
1. there is intent (the lease applies to “successors and assigns”), and
2. the covenant touches and concerns the land—it affects the value of the lease to either party in some way.
run with the land— binding on successor landlords and tenants
must also discuss two rules below
Breach of Express Covenant
2 different rules
A. Traditional rule:
* Express covenants in a lease are independent of each other, with the exception of the covenant to pay rent;
* Breaching party may owe damages, but the non-breaching party is not excused from performance, including duty to pay rent
* if the covenant to pay rent is breached, the landlord can evict the tenant or refuse to renew the lease even if the landlord has breached other express covenants.
B. Modern rule: contract theory
* All express covenants are dependent;
* If breach is material breach, that may be grounds for the tenant to terminate the lease and claim damages;
* Tenant may not refuse to pay rent unless they terminate the lease and timely move out
Remedies Alternative to Damages
LL/T
Instead of enforcement by suing for damages, landlord or tenant can seek enforcement of the covenant by Specific Performance or Injunction
Element - For Plaintiff to enforce the servitude, Plaintiff must show:
1. Intent
2. Notice (for burden to run)
3. Touch and concern
Doctrine of Waste
Waste is an act by someone in rightful possession of property that does permanent injury to the land, harming the interest of someone entitled to future possession.
3 types of waste
1. Voluntary – deliberate destructive acts
2. Permissive – acts of omission or neglect
3. Ameliorative – alter the property but result in an increase in value
Voluntary Waste
These are deliberate destructive acts.
Remedies include injunction and damages measured either by:
* the diminution in value of the property before and after the injury, or
* by the cost of repairs.
In addition, statutes may permit treble damages.
Permissive Waste
These are acts of omission or neglect.
The only real remedy is damages measured either by the diminution in value of the property both before and after the injury, or by the cost of repairs.
Ameliorative Waste
These are acts that alter the property but result in an increase in value
The only damages, if any, which may be recoverable are the costs of restoring the property to its previous condition.
An injunction depends on the facts of a case,
* a short-term tenant might be enjoined from making substantial changes
* however, a long-term tenant might not be so enjoined.
Easements
The right to use land for a particular purpose, such as travel over it, and thus for ingress (entrance) and egress (exit) but no right to possession or enjoy that land. An easement can be created in several ways.
Profit
Easement
the right to take specific things, such as timber, from the land.
License
A license results from a failed attempt to create an express easement, and is terminable at will. A license is irrevocable only if the licensee invests substantial amounts of money or labor in reliance on the license—in that case, the owner is estopped to revoke the license, which becomes the equivalent of an easement.
Creation of Easement
Recordation is not essential to the validity of a deed between the grantor and grantee. An easement is presumed to be perpetual unless the grant specifically limits the interest.
Express Easement
An express easement is usually created by a writing evidencing the express permission from the owner of the servient estate to the owner of the dominant estate to use the land.
Easement By reservation
the Grantor reserves an easement for herself as part of the conveyance of the property to another person.
Easement By implication
To create easement by implication, the use:
(1) must be apparent and continuous at the time the tract is divided, and
(2) must be reasonably necessary to the enjoyment of the dominant parcel, considering factors such as:
(a) cost and difficulty of the alternatives, and
(b) whether the price paid reflects continued use of the easement.
Use apparent and continuous at the time the tract is divided (so it only has to exist at the time the parcel is divided, not before),
“Reasonably necessary” doesn’t require that the access be the only access. If told the road gives neighbor access to Parcel B, on which she built a house. Thus, it is reasonably necessary to enjoy the dominant parcel, on which her house sits.
Easement By necessity
easement by necessity arises where there was no prior use (no use of easement or any other access prior to the necessity arising) and the party asserting the easement owns landlocked property and the two parcels were originally part of the same ownership at one time.
Easement By prescription
An easement is created by adverse possession. The elements of a prescriptive easement are possession that is: (1) open and notorious (if it would put a reasonable person on notice that it was occurring); (2) actual possession (use the property); (3) hostile or adverse (lack of the owner’s permission or consent); (4) continuous (constantly being used for the purpose and in the manner reasonably and normally intended); (5) for the statutory period.
same elements as adverse possession except exclusive possession is not required
Negative Easement
prohibits certain uses
However, there’s no negative easement prohibiting blocking of light absent written agreement
Affirmative Easement
An affirmative easement entitles the easement holder to enter onto the servient tenement and make affirmative use of it.
Types and effect of Transfer of Ownership
Easement
Whenever property subject to an easement is transferred, make sure you have discussed:
1. whether it is an easement appurtenant or easement in gross and
2. then whether it has transferred with the transfer of the servient estate.
Appurtenant Easement
An easement appurtenant is one where the dominant tenement (the holder of one parcel) holds the easement burdening the servient tenement (a different parcel).
An easement appurtenant automatically runs with the transfer of the servient estate, unless the servient estate is transferred to a bona fide purchaser without notice
An easement appurtenant automatically transfers with the transfer of the dominant estate.
Easement in Gross
An easement in gross is held irrespective ownership of property.
An easement in gross does not transfer between successive owners of the easement unless it is for commercial purposes.
Element:
* held irrespective of ownership of property;
* does not transfer between easement holders unless for commercial purposes
Easement in gross does not transfer between successive owners of the easement unless it is for commercial purposes.
When easement transfer to Servient Estate
Both an easement appurtenant and in gross automatically run with the transfer of the servient estate, unless the servient estate is transferred to a bona fide purchaser without notice (including actual, constructive, or inquiry notice).
The Three Notices for Easement
There are three types of notice:
1. actual notice;
2. constructive (record) notice; and
3. inquiry notice.
Inquiry notice exists where the appearance of the property is such that it would give an observer notice based on further inquiry that would disclose the true state of the title.
Termination of Easement
Outline + Barbri Rule
Easements are terminated either in writing, or orally plus an action of abandonment. Other ways include unity of owernship, written release, estoppel, or prescription. However, the owner of the servient estate cannot unilaterally terminate an easement for overuse—she can only seek an injunction against the overuse.
Covenants and Servitudes
Covenants and servitudes are binding promises regarding use of the land.
They are found in deeds and mortgages or separately such as covenants, conditions and restrictions for many housing developments.
Covenant
In order for a covenant to be binding on a successive purchaser, the original covenanting parties must have agreed to be bound by the terms of the agreement and actual or constructive notice must be given to a BFP. The remedy for breach of covenant is damages.
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If the plaintiff wants to recover damages, he must sue for a breach of a covenant.
One can enforce a covenant provided the covenant “runs with the land”
Equitable Servitude
An equitable servitude is a covenant that, regardless of whether it runs with the land, equity will be enforced with an injunction or specific performance against assignees of the burdened land who have notice
Burden of Covenant to Run
Recovery of damages for breach
For the burden of covenant to run against burdened owner who must perform the covenant. All 6 must be present:
- The covenant must be in writing;
- An intent to create the interest that is the subject of the covenant
- Notice of the covenant or interest created by the covenant –
- Horizontal privity - the covenant was set forth in the granting instrument between the original parties so there is a relationship between the covenanting parties beyond just the covenant
- Vertical privity - the successor holds the entire estate held by the original covenantor (so, for example, a tenant does not have vertical privity with the landlord);
- Touch and concern the land - the effect of the interest created by the covenant is to make the land more useful or valuable to the benefited party.
Intent
Intent can be evidenced by language in the conveyance creating the covenant.
Three Notices For Covenant
There are three notices: actual notice, constructive notice and inquiry notice.
(a) Actual - the party against whom the covenant is asserted has actual knowledge of the interest created by the covenant
(b) Constructive - the interest created by the covenant is set out in a recorded instrument
(c) Inquiry - the party knows of facts which would lead a reasonable person to inquire further, by which they would learn about the covenant
Horizontal privity
Horizontal privity requires that they share some interest in the land independent of the covenant at the time they entered into the covenant.
Vertical privity
the successor holds the entire estate held by the original covenantor
Touch and Concern Land
The effect of the interest created by the covenant is to make the land more useful or valuable to the benefited party.
Benefit of Covenant to Run
Recovery of damages for breach
For the benefit of covenant to run in favor of benefited owner (other than an owner who originally covenanted):
- The covenant must be in writing;
- An intent to create the interest that is the subject of the covenant
- Vertical privity - the successor holds the entire estate held by the original covenantor (so, for example, a tenant does not have vertical privity with the landlord);
- Touch and concern the land - the effect of the interest created by the covenant is to make the land more useful or valuable to the benefited party.
If the benefited party was themselves a party to the covenant, or it was in their deed from the original covenantor, they do NOT need to show the benefit has run. They already hold the benefit.
Burden to Run Equitable Servitude
For burden to run, enforcing an equitable servitude by injunction or specific performance on the burdened owner:
* the servitude must be in writing
* Notice to the burdened party
* Intent
* Touch and concern the land
Benefit to Run Equitable Servitude
For benefit to run, the benefited party only need to show that:
* servitude must be in writing;
* Intent
* Touch and concern
Negative Reciprocal Servitude
prohibits certain uses which can be implied from a common scheme of development, and notice
Defense to Equitable Servitude
The one major defense to an equitable servitude is changed neighborhood conditions.
Look for facts showing a very different neighborhood—relative to the purpose of the covenant when it was originally created—than exists presently.
Conveyancing
To be valid, a deed or other conveyance must be (1) executed, (2) delivered, and (3) accepted. The deed must contain words of intent, such as “grant” or “convey,” it must adequately describe the property, by address, or metes and bounds, or something similar, and any oral conditions are generally not enforced. A deed does not require consideration to be valid.
Note: Minority of state, other than grantor’s death, will enforced an oral condition.
Quitclaim Deed
A quitclaim deed conveys only what the seller has, but does not affect the implied warranty of marketable title in a real estate contract.
Marketable Title
Marketable Title is title reasonably free from doubt – a title that a reasonably prudent buyer would be willing to accept. Marketable title need only be delivered at closing.
Title is not marketable if there is an undisclosed encumbrance or a condition that gives rise to a threat of litigation.
Encumbrances that make title unmarketable
- Easement (on the land - not underground easement)
- Restrictive covetnant
- Building code violation (maybe)
- Zoning violation (but not zoning changes)
Marketable title - Buyer’s defense
Marketable title is a buyer’s defense to a specific performance suit or suit for breach against the buyer who refuses to buy the property.
Contract Merges Into Deed - affecting Buyer’s Defense
Once the buyer buys the property and accepts the deed, the contract and the warranty of marketable title merge into the deed and do not provide grounds for a suit for breach of contract or the warranty of marketable title. Any remaining remedy depends on the type of deed the buyer receives.
Warranty Deed
A general warranty deed has six covenants: three present covenants (seisin, right to convey, against encumbrances), and three future covenants (warranty, quiet enjoyment, further assurances). Present covenants are breached at time of conveyance; future covenants are breached at time of the claim against the title, if any.
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Warranty deed contains six covenants: three present covenants and three future covenants.
- Seisin (title and possession)
- Right to convey the property
- Against encumbrances (other than those recorded prior and appearing on the preliminary title report)
- Quiet Enjoyment (grantee will not be disturbed in possession by a lawful claim of title)
- Warranty (grantor agrees to defend grantee’s title and compensate the grantee for loss as a result of an undisclosed superior title)
- Further Assurance (to perform whatever further acts are necessary to perfect title in the grantee)
two analysis: present breach and future breach
breach present covetnant applies at time of sale
breach future covetnant that last after time of sale
If the fact pattern includes a warranty or grant deed, consider and identify each of these six covenants and only discuss those that have been breached.
Covenant Against Encumbrances
The covenant against encumbrances provides that there are no visible or invisible encumbrances other than those disclosed by seller or appearing on title or interest. Encumbrances include mortgages and easements.
Future Covenants
Rule from Barbri
3 covets + require notice for 2 covets of the 3 covets
The covenant of quiet enjoyment is a covenant where the grantee will not be disturbed in possession by a lawful claim of title. The covenant of warranty is a covenant where the grantor agrees to defend the grantee’s title and compensate the grantee for loss as a result of an undisclosed superior title. And further assurance is a covenant for the grantor to perform whatever further acts are necessary to perfect title in the grantee. Liability on the covenants of warranty and for further assurances does not arise unless the party claiming breach gives the covenanting party notice of the claim.
Recording Statutes
not stated rule
Recording statutes protect BFPs, including lenders who take a security interest, but not recipients of gifts, and they do not apply to or protect judgment creditors unless the statute expressly does so.
Three Recording Statutes
General Rule
Three types of recording statutes: race, notice, and race-notice. Race statute is one where whoever records first wins. No requirement that prevailing party be a bona fide purchaser. A notice statute is one where a subsequent BFP prevails over a prior grantee who failed to record. A race-notice statute is one where a subsequent BFP who also records before the prior grantee prevails over a prior grantee who failed to record. Race-notice and notice statutes give protection to BFP’s only.
Bona fide purchaser is a person who gives adequate consideration and has no actual, constructive (record or inquiry) notice of the prior instrument.
Race statute
A Race statute is one where whoever records first wins
No requirement that prevailing party be a bona fide purchaser
Bona Fide Purchaser
a person who gives adequate consideration and has no actual or constructive (record), or inquiry notice of the prior instrument
related to easement and race-notice statutes
Notice statute
A Notice statute is one where a subsequent BFP prevails over a prior grantee who failed to record.
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a subsequent BFP prevails over a prior grantee who failed to record
Race-Notice Statute
A Race-Notice statute is one where a subsequent BFP who also records before the prior grantee prevails over a prior grantee who failed to record. Race-Notice statutes give protection only to BFP.
Note: a subsequent BFP who has no notice and also records before the prior grantee prevails over a prior grantee who failed to record
Mortgage
A mortgage is a security interest in property. It secures the repyament of a loan. A purchase money mortgage secures the payment of the loan, the proceeds of which are used by the buyer to purchase the property that the mortgage is on. [Thus, a buyer borrows money to buy property, and the lender gets a mortgage on the property.] A purchase money mortgage takes priority over an unrecorded prior lien, including an unsecured vendor’s lien
Foreclosure of the property with mortgage
Definition
When a mortgage is recorded, and later foreclosed, the mortgagee gets the title that existed as of the date of recording. But, pursuant to operation of the recording statutes, in a notice or race-notice jurisdiction, if the mortgagee has actual, constructive, or inquiry notice of a prior, unrecorded interest, they are not protected, and when they foreclose, they will take title subject to the prior unrecorded interest.
Deeds of Trust
not rule
Deeds of Trust is like a mortgage: a security interest in property that can be recorded.
- Beneficiary = Lender
- Trustor = Borrower
- Trustee = usually a disinterested 3rd party such as a title company
Deed of Trust and Foreclosure
Model Answer + Barbri Rule
A deed of trust (D/T) is like a mortgage: A D/T is an interest in the property that can be recorded. The trustor (debtor) conveys a D/T to a third party trustee and agrees that, in the event of default, the beneficiary (lender) instrusts the trustee to foreclose the deed of trust by sale. Notice of foreclosure proceedings must be given to all parties with an interest in the property, and of whom the foreclosing party has, or should have, actual, constructive, or inquiry notice.
Deed of Trust
not rule
Additional Info
- The trustor (borrower) conveys bare legal title and agrees that, in the event of a default on the note that is secured by the D/T, the trustee can begin a foreclosure proceeding to foreclose on the equitable title and thus give the purchaser at a foreclosure sale full title.
- A Deed of Trust has no right of redemption, so from a lender’s standpoint, a Deed of Trust ends the borrower’s remedies at foreclosure and is preferable.
- Like a mortgage, failure to give notice of the foreclosure proceedings on a Deed of Trust to interested parties will result in the foreclosure being ineffective as to those interest holders.
- Notice of foreclosure proceedings must be given to all parties with an interest in the property, and of whom the foreclosing party has, or should have, actual, constructive, or inquiry notice.
- Failure to give notice of the foreclosure proceedings on a Deed of Trust to interested parties will result in the foreclosure being ineffective as to those interest holders.
Deficiency Judgment - General
Deficiency judgment occurs when the amount owed on the note secured by the mortgage or D/T is greater than the current value of the property securing the debt.
Even obtaining deficiency judgment, buying title/lending mortgage when you have notice –> defense to the mortgagtor/seller
Obtaining Deficiency Judgment
Specifically Deed of Trust and mortgages
model answer:
The beneficiary under deed of trust/mortgagee can obtain a deficiency judgment only if (1) the beneficiary under deed of trust/mortgagee uses judicial foreclosure, because non-judicial foreclosure of a deed of trust / mortgage carries an anti-deficiency provision, and (2) when the amount owed on the note secured by the mortgage or D/T is greater than the current value of the property securing the debt.
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Outline:
A mortgagee or beneficiary under a D/T can obtain a deficiency judgment for money against the borrower only if:
- the property securing the mortgage or D/T is not a single-family home or up to a 4 single family residence and
- the mortgage or beneficiary uses judicial foreclosure of a deed of trust carries an anti-deficiency provision that prohibits the awarding of a deficiency judgment.
Non-judicial foreclosure of Deed of Trust
Non-judicial foreclosure of a D/T carries an anti-deficiency provision that prohibits the awarding of a deficiency judgment
When Foreclosing Party Under Deed of Trust Takes Title
A foreclosing party under a deed of trust takes the title that existed as of the date it was recorded
Default Under Deed of Trust in Nonjudicial Foreclosure
On a default under the note, the D/T allows nonjudicial foreclosure, and the foreclosing party obtains the title that existed as of the date the D/T was recorded, subject to any prior existing encumbrances.
Lateral Support and Subjacent Support
Approach
- All you can do is state the rule, and apply it conditionally.
- Just explain the rule conditionally (if the land would have subsided in its natural state, then … etc.) since you are not geologists so unless there are facts on which to base a conclusion in either case.
Lateral Support – Damage to Adjacent Property from Excavation
A landowner is strictly liable if his excavation causes adjacent land in its natural state to subside, but he is only strictly liable if his excavation causes adjacent land with improvements to subside if the land would have subsided in its natural state. Otherwise, the landowner is only liable if his excavation was done negligently.
Definition - lateral support: the right that his property be safe from collapse and subsidence due to excavation of adjacent property.
Subjacent Support – Damage to Property from Subsurface Mining or Tunneling
If a grantor conveys the right to have minerals taken from beneath the surface or the right to tunnel subsurface, and the land or existing buildings collapses, the grantee is strictly liable. But, if subsequently built buildings collapse, the grantee is only liable if they were negligent in their tunneling or mining.
Riparian rights
right to draw water from a defined watercourse
Riparian Doctrine
Under the riparian doctrine, the water belongs not to the public or the government, but to those who own the land bordering on the watercourse.
Majority view: all such riparian owners may take water for all reasonable uses that do not unreasonably interfere with the uses of the other riparian owners. The majority rule is that all lots owned by a single owner are riparian (meaning there is a right to take water) if they are contiguous and any of them border on the watercourse.
Minority rule: the riparian rights of an owner who owns multiple lots abutting the water are limited to the smallest tract owned by that owner that is abutting the water.
Balancing factor: the purpose, economic and social value of the use is balanced against the harm and practicality of avoiding the harm.
Prior Appropriation Doctrine
Under the prior appropriation doctrine, the water belongs to the state, but the right to divert and use it can be acquired by an individual whether or not he is a riparian owner.
- Water use/amount based on prior appropriation (first in time) from particular area on stream for beneficial uses.
- If there is a decrease in water flow and availability, the junior in time appropriators suffer first and lose their rights.
Diffusion of Surface Water
All surface water not confined in lakes, rivers, streams or other confined watercourses is diffused surface water—whether from snow melt, flooding, springs, other sources, if it gathers om temporary ponds or puddles.
Rule of reasonable use
Diffusion of Surface Water
An owner may make reasonable use of his or her land, even though this alters the flow of diffused water in a manner that harms others.
Consequently, a landowner can accept and impound the flooding water, or divert it, assuming doing so allows a reasonable use of the land.
No estoppel theory: even if an owner has traditionally diverted the surface waters, and her neighbor has then impounded it, the first owner is not estopped from impounding the water themselves should they wish to do so.
Groundwater
Two types:
1. Underground streams: water flowing in a defined channel underground
2. Percolating groundwater: percolates up through permeable subsurface
Reasonable use approach
Groundwater
- water may be used only on the overlying land; and,
- for uses reasonably related to the natural use of the land;
Modified reasonable use
Groundwater
reasonableness based on balancing equities and hardships among all users;
Correlative rights
Groundwater
all owners of land over a common pool have equal extraction rights;
Permit System
Permit system based on prior appropriation.
Deed of Trust and Its Effect
Rule
A deed of trust (D/T) is like a mortgage. A D/T is an interest in property and can be recorded. On a default under the note, the D/T allows nonjudicial foreclosure, and the foreclosing party obtains the title that existed as of the date the D/T was recorded, subject to any prior existing encumbrances.
