Property 2 - Competing Claimants Flashcards
Adverse Possession - Definition
Legally sanctioned stealing of title to land away from the rightful owner. The law favors land use.
Components of Adverse Possession
- Physical
- Mental
- Time
Adverse Possession - Physical Component
Must actually, openly, notoriously, and exclusively occupy the property. You must occupy in a way that could put the true owner on notice of your adverse possession if they bothered to check, can’t hide it.
(Minority rule - you have to pay taxes on the land too.)
Adverse Possession - Mental Component
Must have hostile intent. (Aka intent that is adverse to the true owner.) 2 ways to satisfy:
(1) Claim of Right - AP claims that he’s the owner of the land.
(2) Color of Title - AP enters on the land under a belief that he has received a good deed to the property but that belief is incorrect.
Adverse Possession - Permission
Permission to be on the land will always destroy hostile intent.
But mere knowledge does not imply permission.
Adverse Possession - Co-Tenancy
Only time one Co-T can Ap the property is if there has been an ouster. A says to B, ‘don’t set food on this land’ and then A occupies the land for the statutory period, then AP works.
Hostile Intent - Split of Authority
Majority - any encroachment, even an innocent one, is sufficient for hostile intent.
Minority - an innocent encroachment will not suffice, must be shown that the encroachment was willful, intentional, or would have been had the adverse possessor known the true facts.
Adverse Possession - Time Component
Has to possess the land continuously for the statutory period.
Common law was 20 years, nowadays ever state has a different statutory period. Continuously is a question of fact (i.e. mountain resorts are normally only used 6 months out of the year)
Adverse Possession - Tacking
Combines AP periods to meet the statutory requirement. There must be some transfer of interest from one AP to the other.
Adverse Possession - Scope
General can only claim that portion of the land actually occupied. EXCEPTION: color of title situation, the AP occupies a significant portion of the land then the end of the AP period, the AP can claim the entire parcel described in the flawed deed, not just the portion occupied.
AP only gets whatever the true owner had. If true owner sold sub-surface rights, AP doesn’t get them.
Adverse Possession - Future Interests
“A to B for life, remainder to C.” B has life estate, but during B’s life he chooses not to use the property, an AP comes and AP’s it against B. He only acquires B’s life estate but cannot get the remainder interest of C.
Adverse Possession - Disability
Disability can suspend the running of the statute of limitations. Disability only counts if it exists at the time the AP commences, and AP period will begin once the disability ends.
Disabilities in the majority of jurisdictions include:
(1) Minority - if the true owner is a minor.
(2) Insanity - if the true owner is insane.
(3) Imprisonment - if the true owner is in prison.
Rights of Adverse Possessor and True Owner
(1) Up until the time the AP period has run, true owner is still the owner and can have the AP removed from the land and sue for damages.
(2) As soon as statute time runs, AP’s ownership relates back to the date of entry and is now the true owner of the land as to everyone else.
Land Sale Contract Analysis
X —- Closing —- Y
X is the date on which the land sale contract was formed.
Closing is the date which the seller hands over the deed and the buyer hands over the money.
Y is sometime after the date of closing.
Equitable Conversion
When a land sale contract is formed, there is a bifurcation of title:
(1) equitable title - passes to the buyer at the point the K is formed.
(2) legal title - remains with the seller until the date of closing.
Risk of Loss - Majority Approach
Risk of loss follows equitable title. Buyer has risk of loss between contract and closing.
Risk of Loss - Uniform Vendor and Purchaser Risk Act
Risk of loss doesn’t follow equitable title. Remains with seller until:
(1) there has been a change of possession of the property; or
(2) Legal title has been transferred to the buyer (closing)
Marketable Title
Title that is reasonably free from defect. Implied into every land sale contract unless expressly stated otherwise, is a promise that the seller will deliver marketable title to the buyer.
Marketable Title - Defects
(1) Encumbrances e.g. unpaid mortgaged or lien.
(2) Easement or restriction that reduces the use and enjoyment of the land.
(3) Title acquired by adverse possession. The only was an AP can get marketable title is to get a judicial decree that they are the true owner of the land.
(4) An existing zoning or other statutory violation.
Marketable title - Timing
Only manifests itself at the time of closing. Don’t have to have marketable title at the time of contract as long as they get it by closing date.
Majority of jrdx allow seller to arrange that a portion of the purchase price is to be used to remove a cloud on title, thereby making it marketable. The buyer MUST allow the seller to do this.
Merger Doctrine
On the closing of the deal, the seller hands the deed to the buyer, and the land sale contract merges into that deed. So if we’re at some point after the deal has closed and the buyer discovers a problem, the buyer can’t sue on the contract because the K has merged into the deed; can only sue on the deed.
Quitclaim Deed
The buyer is screwed. A quitclaim deed is an as-is deed.
Warranty Deed
Buyer has the possibility of a suit. A warranty deed contains certain covenants of title. The buyer can sue for breach of those covenants of title.
General Warranty Deed
Contains all 6 covenants of title. Covers any problems that arose during all previous owners of the property.
Special Warranty Deed
Only covers problems that arose during the ownership of the grantor.
6 Covenants of Title
Present Covenants (run with land - breach must have occurred on the date of closing) (1) Seisin - implied promise by the grantor that he actually does own the property. (2) Right to Convey - implied promise by grantor that he has right to convey the property. (3) Encumbrances - implied promise that there are no encumbrances on this property. Future Covenants (Run with land, breach can be on closing or after) (4) Quiet Enjoyment - implied promise that grantee will not be disturbed by a 3rd party asserting title to the property. (5) Warranty - implied promise that the grantor will defend the grantee against any such third party claims. (6) Further Assurances - implied promise that the grantor will do anything reasonably necessary to perfect the grantee's title
Competing Claimants - STRATEGY
Take potential claimants in chronological order and establish their claims to the property. Then take subsequent claimants and see if they can take title away via: adverse possession; land sale contract; conveyance.
3 Requirements for Conveyance of Real Property by Deed
- Must be in writing
- Delivery of the deed
- Acceptance by the buyer
4 Requirements for a Valid Deed
- An adequate description of the parties.
- Words indicating present intent to transfer.
- An adequate description of the property to be transferred.
- Signature of the grantor.
Delivery of a deed
Delivery exists if the grantor has the present intent that the property should transfer to the grantee. (Doesn’t have to be physically delivered.)
3 Types of Delivery of a Deed
- Give the deed to a grantee. (Creates presumption of delivery that can be rebutted by extrinsic evidence that shows the grantor did not intend a present transfer of the property under any circumstance.)
- Hold on to the deed an keep it. (Creates a presumption of no delivery that can be rebutted by extrinsic evidence that shows the grantor did intend a present transfer to the grantee.)
- Hand the deed to a third party e.g. escrow. (The effective date of the transfer relates back to the date the grantor handed the deed to the 3rd party.)
Delivery of a Deed w/ Conditions
The more conditions placed on the conveyance, the more likely the conveyance is to fail. Courts will generally allow 1 condition and still allow relation back, multiple conditions the court is less likely to relate back.
Death Escrow
Grantor gives the deed to a 3rd party and says give this deed to grantee when I die. Generally, nothing takes precedence of will except JT, so here the courts say that when grantor hands deed to the 3rd party, he’s creating a life estate in himself and giving the remainder to the grantee.
