Property Flashcards
Devisable
Can pass by will
Descendible
Can pass by intestacy if holder dies intestate
Alienable
Transferable intervivos (during holder’s lifetime)
What is a fee simple?
1) Absolute ownership of potentially infinite duration; 2) Freely devisable, descendible, and alienable.
Words to create a fee simple
“To A” (or “to A and A’s heirs” but not necessary)
What is the future interest that accompanies a fee simple?
Nothing. O conveys all that O has to A. A’s heirs have nothing because a living person has no heirs. A has everything.
Words to create a fee tail
“To A and the heirs of his body”
What is a fee tail?
Historically, fee tail passed to the lineal blood descendants of grantee no matter what. Today, the attempted creation of a fee tail creates a fee simple absolute.
What is the accompanying future interest of a fee tail?
In O, the interest is a reversion. In a 3d party, the interest is a remainder.
What are the defeasible fees?
1) Fee simple determinable; 2) Fee simple subject to condition subsequent; 3) Fee simple subject to executory limitation
How do you create a fee simple determinable?
Need clear durational language such as: “To A for so long as…”, “To A during…”, “To A until…”
How does a fee simple determinable end?
If the stated condition is violated, forfeiture is automatic.
What is a fee simple determinable?
A devisable, descendible, and alienable interest in land that passes subject to the condition stated.
The Mick Jagger Rule of FSDs
You can’t always get what you want i.e. can’t transfer more than you have (fee subj to condition) w/o forfeiting estate.
What future interest accompanies a fee simple determinable?
FSDPOR: Frank Sinatra Doesn’t Prefer Orville Redenbacher. Fee simple determinable possibility of reverter.
How to create a fee simple subject to condition subsequent?
Grantor must use 1) clear durational language and 2) carve out the right to reenter. “To A, 1) but if X event occurs, 2) grantor reserves the right to re-enter and retake.”
What is the difference between FSD and fee simple subject to condition subsequent?
FSD = automatic forfeiture if condition violated; FSSCS = estate can be cut short at grantor’s option if condition is violated.
What future interest accompanies a fee simple subject to condition subsequent?
Right of entry a.k.a. power of termination.
How to create a fee simple subject to executory limitation?
“To A, but if X event occurs, then to B.”
What is a fee simple subject to executory limitation?
Just like an FSD but if the condition is violated the estate is automatically forfeited to someone other than O.
What future interest accompanies a fee simple subject to executory limitation?
A shifting executory interest.
What are the two important rules of statutory construction for defeasible fees?
1) Words of mere desire, hope or intention are insufficient to create a defeasible fee; 2) Absolute restraints on alienation are void.
What does it mean when we say words of mere desire, hope or intention are insufficient to create a defeasible fee?
Courts favor free use of land. Need clear durational language to have an actionable condition.
What does it mean when we say absolute restraints on alienation are void?
The absolute ban on the power to sell or transfer not linked to a reasonable tie limited purpose is void. If there’s a violation, construe as a fee simple.
What is a life estate?
An estate measure in explicit lifetime terms (never in terms of years).
How do you create a life estate?
“To A for life” grants A a life estate and A becomes the life tenant.
What future interest accompanies a life estate?
O has a reversion.
What is a life estate pur autre vie?
A life estate measured by a life other than the grantee’s life.
What are the two distinguishing characteristics of the life estate?
1) The life tenant is entitled to all ordinary uses and profits of the land; 2) The life tenant must not commit waste or do anything to hurt future interest holders.
What are the three kinds of waste?
Voluntary, permissive, ameliorative
What is voluntary waste?
Overt conduct that causes a drop in value i.e. wilful destruction.
What is the rule about voluntary waste and natural resources for life tenants?
Life tenant must not consume or exploit natural resources unless one of four exceptions applies.
What are the exceptions to the rule about voluntary waste for life tenants?
PURGE. 1) Prior Use of the land was for exploitation; 2) life tenant may consume natural resources for Repairs and maintenance; 3) life tenant may exploit if Granted that right; 4) may exploit if land is suitable only for Exploitation.
What is permissive waste?
When land is allowed to fall into disrepair i.e. neglect.
What are the life tenant’s obligations in the realm of permissive waste?
1) Must maintain the premises in reasonably good repair. 2) Must pay all ordinary taxes on the land to the extent of income or profits from land; if no income or profits, responsible only to the extent of the premises fair rental value.
What is ameliorative waste?
Life tenant must not engage in acts that will enhance the property’s value unless all future interest holders are 1) known and 2) consent.
What is the future interest that accompanies the life estate?
If held by O, a reversion; if held by a third party, a remainder.
What are the present possessory categories of freehold estates?
Fee simple absolute, fee tail, defeasible fees, and life estates.
What are the future interests capable of creation in the grantor?
Possibility of reverter, right of entry, and reversion (reversion = default)
What is the possibility of reverter?
An interest in O that accompanies the FSD.
What is the right of entry (or power of termination)?
An interest in O that accompanies the fee simple subject to condition subsequent.
What is a reversion?
A future interest that arises in O who transfers an estate of lesser quantum than O started with, other than a FSD or FSSCS. This is the default.
What are the future interests that can be created in a transferee?
Vested remainder, contingent remainder, or executory interest
What are the three kinds of vested remainder?
Indefeasibly vested remainder, vested remainder subject to complete defeasances, and vested remainder subject to open.
What is a remainder?
A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.
What are the characteristics of a remainder?
1) Always accompanies a preceding estate of known fixed duration. 2) It never follows a defeasible fee and can’t cut short or divest a prior transferee. Think FORREST GUMP.
What is a vested remainder?
A remainder that is both created in an ascertained person and is not subject to any condition precedent.
What is a contingent remainder?
A remainder created in an unascertained (unborn) person or is subject to a condition precedent, or both.
What is a condition precedent?
A condition that appears before the language creating the remainder or is woven into the grant to the remainderman.
How do conditions precedent relate to vested remainders?
If B satisfies the condition prior to the death of A (life grantee), his interest auto transforms into an indefeasibly vested remainder.
What is the Rule of Destructibility of Contingent Remainders?
At CL, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended.
What is the modern rule relating to the Rule of Destructibility of Contingent Remainders?
It’s been abolished. If B has not met the condition when A dies, O or O’s heirs take subject to B’s springing executory interest.
What is the Rule in Shelley’s Case?
Applies when O conveys “to A for life, then, on A’s death, to A’s heirs.” If A is alive, the present and future interests would merge, giving A a fee simple absolute. This is a rule of law.
What is the modern version of the Rule in Shelley’s Case?
It’s been abolished. If O conveys “to A for life, then to A’s heirs,” A has a life estate and A’s heirs as yet unknown have a contingent remainder. O has a reversion if A dies w/o heirs.
What is the Doctrine of Worthier Title?
Applies when O, who is alive, conveys “to A for life, and then to O’s heirs.” The rule transforms this so that A has a life estate and O has a reversion, so land can be transferred if parties consent. BUT! This is a rule of construction, so if O intends to create a contingent remainder in his heirs the intent is binding.
What is an indefeasibly vested remainder?
The holder is certain to acquire in the future with no strings attached (NSYNC).
What if the holder of an indefeasibly vested remainder dies before the original grantee?
The interest passes by will or intestacy.
What is a vested remainder subject to complete defeasance?
Remainderman’s interest could be cut short because of a condition subsequent a.k.a. a string attached.
What is the comma rule?
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 complete defeasance. EX: “to A for life, remainder to B, provided that if B dies under age 25, to C.” If the conditional language appears before the language creating the remainder, the condition is a condition precedent and you have a contingent remainder. EX: “to A for life, and if B has reached age 25, then to B.”
What is a vested remainder subject to open?
A 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 members can still join in.
Open v. closed class
Open = others can still join; closed = no others can join.
When does the class close?
When any member can demand possession. The rule of convenience demands this bright line even if there might be more class members at some undefined future point.
What is the womb rule?
A child of B in the womb at the time of A’s death will share with the other members of the class.
What if a class member predeceases A?
At CL, their share goes to their devisees or heirs.
What is an executory interest?
A future interest created in a 3d 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).
What is a shifting executory interest?
It always follows a defeasible fee and cuts short someone other than O. It does not matter who (A or B or X) has the power to trigger the premature forfeiture.
What is a springing executory interest?
An interest that cuts short O’s interest.
What is the Rule Against Perpetuities (RAP)?
Some future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.
RAP does not apply to…
Any future interest in O, indefeasibly vested remainders, vested remainders subject to complete defeasance.
RAP applies to…
Contingent remainders, executory interests, and certain vested remainders subject to open.
Steps to addressing a RAP issue…
(1) Determine which future interests have been created by the conveyance and if the rule applies. (2) ID conditions precedent to the vesting of the suspect future interest. (3) Find a measuring life i.e. a person alive at the date of conveyance and ask whether that person’s life or death i relevant to the condition’s occurrence. (4) Ask: will we know with certainty w/in 21 years of the death of our measuring life if our future interest holder can or can’t take?
What is the fertile octogenarian rule?
Presumes everyone is fertile no matter their age.
What are the two bright line rules of CL RAP?
(1) A gift to an open class that is conditions on the members surviving to an age beyond 21 violates CL RAP i.e. “bad as to one bad as to all.” (2) Many shifting executory interests violate the RAP. An executory interest with no limit on the time w/in which it must vest violates RAP.
How do we solve if a conveyance has many shifting executory interests?
Get rid of the offensive future interest and evaluate. If the result is ungrammatical, strike entire clauses even if we get odd results.
What is the charity-to-charity exception?
A gift from one charity to another doesn’t violate RAP because we want to encourage charitable gift giving.
What is the “wait and see” or “second look” doctrine?
A reform of RAP (majority) under which the validity of any suspect future interest is determined on the basis of the facts as they now exist at the end of the measuring life.
What is the Uniform Statutory Rule Against Perpetuities? *VA has this.
USRAP codifies the CL RAP and provides for an alternative 90 year vesting period.
Wait and see as well as USRAP embrace:
(1) Cy pres as near as possible to grantor’s intent, and (2) if transfer depends on taker exceeding 21, we knock this down to 21.
What are the three concurrent estates?
Joint tenancy, tenancy by the entirety, and tenancy in common.
What is a joint tenancy?
Two or more own with a right of survivorship. These are disfavored so have to comply with rules of creation.
What is a tenancy by the entirety?
Joint ownership between married partners with right of survivorship.
What is a tenancy in common?
Two or more own with no right of survivorship.
What are the distinguishing characteristics of a joint tenancy?
(1) Right of survivorship i.e. when one tenant dies, his share automatically goes to surviving tenants; (2) a joint tenant’s interest is alienable but is not devisable or descendable bc of 1. This means last JT alive gets to keep all.
How is a joint tenancy created?
1) Grantor must express the right of survivorship; (2) the four T-TIP unities i.e. tenants must take at the same TIME, by the same TITLE, with IDENTICAL interests, and the right to POSSESS the whole.
If you already own by title, how do you create a joint tenancy?
Use a straw. Convey to straw and have straw convey back to you and your JT as JTs w/ right of survivorship.
How can you sever joint tenancy?
SPAM: Sale, Partition and Merger
Can a joint tenant sell during his lifetime?
Yes, even if he does it in secret or w/o consent. Buyer is a tenant in common, but joint tenancy as to other JTs remains intact.
What is the effect of entering a contract for sale of her share of a joint tenancy?
It will sever the joint tenancy as to that contracting party’s interest. Why? Equitable conversion provides “equity regards as done that which ought to be done.”
Partition and its variations…
(1) Voluntary agreement i.e. peaceful; (2) partition in kind i.e. a court action for physical division of Blackacre if in the best interest of all parties works better if land is large and rural; (3) forced sale i.e. court action if in the best interests of all where BA is sold and proceeds divided proportionately.
What is mortgage?
One joint tenant’s execution of a mortgage or lien on his or her share will sever the JT as to that now encumbered share only in the minority of states to follow the title theory of mortgages. Majority of states follow the lien theory of mortgages, where JT execution of mortgage on his or her interest will not sever the joint tenancy.
How do you create tenancy by the entirety?
In jurisdiction where it exists, any grant to married partners unless stated otherwise will create tenancy by the entirety.
What are the characteristics of tenancy by the entirety?
Can’t touch this. Creditors of only one spouse can’t touch the tenancy; unilateral conveyance by one spouse can’t transfer to a 3d party.
What are the characteristics of a tenancy in common?
(1) Each co-tenant owns an individual part and right to possess the whole; (2) Each interest is devisable, descendible, and alienable w/o survivorship rights between tenants; (3) The presumption favors tenancy in common.
The nine rights and duties of co-tenants…
(1) Right to possess the whole and if one tenant excludes the other he commits wrongful ouster; (2) Tenant is not liable to others for rent; (3) Tenant who leases to a 3d party must account to co-tenants providing fair share of rental income; (4) Co-tenants cannot win by adverse possession; (5) Co-T responsible for fair share of carrying costs (taxes, mortgage); (6) Repairing co-T enjoys right of contribution provided she has told the others of the need; (7) No right to contributions for improvements but entitled to a credit or debit at partition; (8) A co-T must not commit waste; (9) Right to bring action for partition.
What are the four leasehold or nonfreehold estates?
Tenancy for years, periodic tenancy, tenancy at will, and tenancy at sufferance.
What is a tenancy for years?
Lease for a fixed period of time when you know the termination date from the outset.
How does a tenancy for years end?
Because a term of years states form the outset when it will terminate, no notice is needed to terminate.
How do you create a tenancy for years?
Must be in writing to be enforceable because of the Statute of Frauds.
What is a periodic tenancy?
Lease that continues for successive intervals until L or T give notice to terminate.
How do you create a periodic tenancy?
Expressly “to T from month to month (or year to year or week to week).” It can also arise by implication.
How can a periodic tenancy be created by implication?
(1) Land is leased w/o mention of duration but provision is made for the payment of rent at set intervals. (2) An oral term of years in violation of SOF creates an implied periodic tenancy measured by the way rent is tendered. (3) If L elects to holdover a T who has wrongfully stayed on past the conclusion of the original lease an implied periodic tenancy arises measured by the way rent is now tendered.
How can you terminate a periodic tenancy?
Written notice at least = to length of the period itself unless otherwise agreed. BUT! if tenancy is from year to year or greater only 6 mos. notice required (in VA 3 mos.). Parties may lengthen or shorten by K.
When does the tenancy terminate?
Must end at the conclusion of a natural lease period.
What is a tenancy at will?
A tenancy for no fixed duration. Unless parties expressly agree to a tenancy at will, the payment of a regular rent will cause a court to treat this as an implied periodic tenancy.
How can a tenancy at will be terminated?
By either party at any time BUT a reasonable demand to vacate is usually needed.
What is a tenancy at sufferance?
Created when T has wrongfully held over past the expiration of the lease.
Why do we have a tenancy at sufferance?
Need to give wrongdoer a leasehold to permit L to recover rent. It lasts until L evicts T or elects to hold T to a new tenancy.
What are tenant’s duties?
(1) T’s liability to 3d parties; (2) T’s duty to repair; (3) T’s duty to pay rent.
What is T’s liability to 3d parties?
T is responsible for keeping the premises in good repair. T is liable for injuries sustained by 3d parties T invited even where L promised to make all repairs.
What is T’s duty to repair when the lease is silent?
T must maintain premises and make ordinary repairs. T must not commit any of the three kinds of waste.
What is the law of fixtures?
When a tenant removes a fixture, she commits voluntary waste. T must not remove a fixture no matter that she installed it because fixtures pass with ownership of land.
What is a fixture?
A once movable chattel that by virtue of its annexation to realty OBJECTIVELY shows the intent to permanently improve the realty. EX: heating systems, custom storm windows, furnace, lighting installations.
How can you tell when a tenant installation qualifies as a fixture?
(1) An express agreement controls; (2) In the absence of agreement, T may remove a chattel she has installed as long as removal doesn’t cause substantial harm to premises. If removal will cause substantial damage, then in objective judgment T has shown the intent to install a fixture and the fixture stays put.
What is T’s duty to repair when T has expressly covenanted in the lease to maintain the property in good condition for the duration of the lease?
At CL, T was liable for any loss to the property including loss due to a force of nature. Today, the majority view is T may end the lease if the premises are destroyed w/o T’s fault.
What happens when T breaches duty to pay rent and is in possession of the premises?
L’s options are to evict thru courts or continue relationship and sue for rent due. If L moves to evict, entitled to rent form T form T until T at sufferance vacates.
What can a landlord not do?
Engage in self-help such as change locks, forcibly removing T, or removing T’s possessions. Why? Punishable civilly and criminally.
What if T breaches duty to pay rent and is out of possession?
SIR. (1) Surrender i.e. chose to treat T’s abandonment as an implicit offer of surrender which L accepts (must be in writing SOF if unexpired term is more than a year); (2) Ignore the abandonment and hold T responsible for unpaid rent (only available in minority states); (3) Re-let premises on wrongdoer T’s behalf and hold him or her liable for any deficiency (must at least try in majority).
What is surrender?
T shows by words or actions that she wants to give up the lease.
What are the landlord’s duties?
(1) Duty to deliver possession; (2) Implied covenant of quiet enjoyment; (3) Implied warrant of habitability; (4) Retaliatory eviction
What is the duty to deliver possession?
Majority rule requires L put T in actual possession of the premises. If at the start of T’s lease prior holdover T is still in possession, L has breached and the new T gets damages. Minority rule is that L need only provides legal possession and not physical possession.
What is the implied covenant of quiet enjoyment?
T has a right to quiet use and enjoyment of premises w/o interference from L. Applies to both residential and commercial leases.
What happens if the implied covenant of quiet enjoyment is breached?
T can sue for (1) breach by actual wrongful eviction when L wrongfully evicts T or excludes T from the premises or (2) breach by constructive eviction i.e. SING.
What are the elements of constructive eviction?
SING. (1) Substantial Interference due to L’s actions or failures; (2) Notice: T must give L notice of problem and L must fail to act meaningfully; (3) Goodbye: T must vacate w/in reasonable time after L fails to correct the problem.
Is landlord liable for acts of other tenants?
No. But exceptions for (1) L must not permit a nuisance on site and (2) L must control common areas.
What is the implied warranty of habitability?
The premises must be fit for basic human dwelling; bare living requirements must be met. The appropriate standard may be supplied by local housing code or case law. Applies only to residential leases and is non-waivable.
What happens when implied warranty of habitability is breached?
MR3: Move, Repair, Reduce Remain. Move out and end lease (not necessary); Repair and deduct allowable by statue in a growing number of jurisdictions; Reduce rent or withhold all rent until court determines fair rental value (must place into escrow to show GF); Remain in possession pay rent and affirmatively seek money damages.
What is retaliatory eviction?
If T lawfully reports L for housing code violations, L is barred from penalizing T by raising rent, ending the lease, harassing T or taking other reprisals.
Assignment v. sublease
In absence of some prohibition on lease, a T may freely transfer his or her interest in whole (assignment) or in part (sublease). L can prohibit T from assigning or subletting w/o L’s prior written approval, but once L consents to one transfer by T, L waives right to object to future transfers by T unless L reserves the right.
What happens in assignment?
T transfers all interest to T2. As a result L and T2 are in privity of estate and are liable to each other for all covenants in the original lease that run w/ the land. Not in privity of K unless T2 assumed all promises in original lease. L and T remain in privity of K and are secondarily liable to each other.
What happens in a sublease?
L and S are in neither privity of estate nor privity of K. The share no nexus. Relationship between L and T remains fully intact.
What is the CL of caveat lessee?
Let tenant beware. In tort, L was under no duty to make premises safe.
What are the five most important exceptions to the CL caveat lessee?
CLAPS! (1) L must maintain all Common areas; (2) Latent defects rule: L must warn T of hidden defects L knows about or should know about; (3) Assumption of repairs: L who voluntarily makes repairs must complete them w/ reasonable care; (4) Public use rule: L who leases public spaces and show should know because of the nature of the defect and length of lease that T will not repair is liable for any defects; (5) Short term lease of furnished dwelling L is liable for any defect that harms T.
What are the types of servitudes?
Affirmative easements, negative easements, real covenants, equitable servitudes, and reciprocal negative servitudes.
What is an easement?
The grant of a nonpossessory property interest that entitles its holders to some form of use or enjoyment of another’s land called the servient tenement.
What are typical examples of easements?
Privilege to lay utility lines on another’s land, easement giving holder right of access across a tract of land.
What is an affirmative easement?
The right to do something on servient land.
What is a negative easement?
Entitles holder to prevent servient landowner from doing do something that would otherwise be permissible. Can only be created expressly by writing signed by grantor.
What are the types of negative easement?
LASS. Light, Air, Support, and Stream water form an artificial flow. (In CA, also neg easement for scenic view.)
What is an appurtenant easement?
Benefits holder in physical use or enjoyment of property. Requires two parcels of land i.e. the dominant tenement gets a benefit and servient tenement bears the burden.
What is an easement in gross?
Confers on holder only some personal or pecuniary advantage that is not related to use or enjoyment of his land. Servient land is burdened, but no dominant tenement. EX: right to place billboard, right to swim, utility right to lay lines.
Are appurtenant easements transferable?
They pass automatically w/ dominant tenement even if not mentioned in conveyance. The burden of the easement also passes unless the new owner is a bona fide purchaser w/o notice.
Are easements in gross transferable?
Not unless it is for commercial use.
How do you create an affirmative easement?
PING. Proscription, implication, necessity, or grant.
What is a grant (in affirmative easement context)?
An easement to endure for more than one year that must be in writing that complies with the formal elements of a deed.
What is arises by implication (in affirmative easement context)?
Court may imply an easement if previous use was apparent and parties expected that the use would continue because it is reasonably necessary to the dominant land’s use and enjoyment.
What is arises by necessity (in affirmative easement context)?
In a landlocked setting, an easement of right of way will be implied by necessity if grantor conveys a portion of his land w/ no way out except over some part of grantor’s remaining land.
What is arises by prescription (in affirmative easement context)?
Easement may be acquired by satisfying the elements of adverse possession. COAH.
What is the scope of the easement?
Determined by the terms or conditions that created it.
How can an easement be terminated?
END CRAMP. 1) Estoppel; 2) Necessity; 3) Destruction of servient land; 4) Condemnation of the servient estate; 5) Release; 6) Abandonment; 7) Merger doctrine; 8) Prescription.
What is estoppel (for purposes of terminating an easement)?
Servient owner materially changes position in reasonable reliance on the easement holder’s assurances that the easement will not be enforced.
What is necessity (for purposes of terminating an easement)?
Easements created by necessity expire as soon as the need ends. If the easement, attributable to necessity, was nonetheless created by express grant it will not end when the need ends.
What is destruction (for purposes of terminating an easement)?
Destruction of the servient land, other than through the willful conduct of the servient oner ends the easement.
What is condemnation (for the purposes of terminating an easement)?
Condemnation of the serivent estate by imminent domain ends the easement.
What is release (for the purposes of terminating an easement)?
A written release, given by easement holder to the servient owner.
What is abandonment (for the purposes of terminating an easement)?
The easement holder must demonstrate by PHYSICAL ACTION the intent to never use the easement again. Nonuse or mere words are insufficient to terminate.
What is merger doctrine (for the purposes of terminating an easement)?
The easement is extinguished when title to the easement and title to the servient land become vested in the same person. Later separation does not revive the easement.
What is prescription (for the purposes of terminating an easement)?
Servient owner may extinguish the easement by interfering with it in accordance with the elements of adverse possession. Re: COAH.
How else does VA law allow an easement to be terminated?
Statute allows termination by cessation of purpose i.e. easement terminated when the original purpose no longer exists.
What is a license?
Mere privilege to enter another’s land for a delineated purpose.
Licenses are not subject to…
The statute of frauds i.e. you don’t need a writing.
What are the characteristics of licenses?
They are freely revocable, at the will of the licensor, unless estoppel bars revocation.
What are the classic license cases?
1) Tickets. 2) Neighbors talking by the fence (if oral easement, construe as license).
When will estoppel bar revocation of a license?
When the licensee has invested substantial money, labor, or both in reasonable reliance on the license’s continuation.
What does VA law do with an irrevocable license?
Equitable easement. How is it tested? Oral grant of easement relied on by licensee can give rise to equitable easement.
What is a profit?
It entitles the holder to enter the servient land and take from it the soil or some substance of the soil such as mineral, timber, or oil.
What are the rules of profit?
Shares all the rules of easements.
What is a covenant?
A promise to do or not do something related to land.
How is the covenant unlike an easement?
It is not the grant of a property interest, but rather a contractual limitation or promise regarding the land.
Can a covenant be negative?
Yes. The restrictive covenant is a promise to refrain from doing something related to land. This is the most common kind of covenant.
What is an affirmative covenant?
A promise to do something related to land.
How do you know whether to construe a promise as a covenant or equitable servitude?
On the basis of the remedy P seeks. If P wants damages, construe as a covenant; if P wants an injunction, construe as an equitable servitude.
What are the terms for covenanted land?
One tract is burdened by the promise and another is benefited.
What is horizontal privity?
The relationship created when A promises to B to do something that burdens her land and benefits B. Refers to the nexus between the original parties.
What is vertical privity?
The relationship between A and A-1 or between B and B-1.
When will the covenant run with the land and bind successors?
1) When the burden of A’s promise to B runs form A to A-1 and 2) when the benefit of A’s promise to B runs from B to B-1. Always analyze burdened side first.
When does the burden of A’s promise to B run from A to A-1?
WITHN. (W) The promise was Written. (I) The original parties Intended the covenant would run. (T) The promise must Touch and concern the land. (H) Horizontal (this is the sticking point and why we usually fail) and vertical privity required. (N) A-1 had Notice when she took.
What does it mean to touch and concern the land?
Promise must affect the parties’ legal relations as landowners and not simply as members of the public at large. Must be “of and pertaining to” Blackacre.
For the national test, what about covenants to pay money to be used in connection with the land and covenants not to compete?
They DO touch and concern the land.
For the VA test, does a covenant not to compete touch and concern the land?
NO. This is a minority view.
What does horizontal privity require?
Parties must be in succession of estate i.e. they were in a grantor-grantee, landlord-tenant, or mortgagor-mortgagee relationship to make the covenant at the time the relationship was created.
What does vertical privity require?
Some non-hostile connection such as K, devise or descent. Only time it doesn’t exist is adverse possession.
When does the benefit of A’s promise run from B to B-1?
WITV. (W) Original promise in Writing; (I) Original parties Intended benefit to run; (T) Promise Touches and concerns the land and parties as landowners; (V) Vertical privity i.e. non-hostile nexus between B and B-1.
What is an equitable servitude?
A promise that equity will enforce against successors. It is accompanied by injunctive relief.
How do you create an equitable servitude that will bind successors?
WITNES. (W) Original promise generally in Writing; (I) Parties Intend to bind successors; (T) Promise Touches and concerns the land; (N) successors had Notice of the promise; (ES) Equitable Servitude.
What is an implied equitable servitude?
General or common scheme doctrine. Courts imply a reciprocal negative servitude to hold an unrestricted lot holder to the restrictive covenant if (1) when the sales began subdivider had a general scheme of residential development that included D’s lot and (2) D had notice of the promise contained in the prior deeds.
How do we impute notice?
AIR. Actual, literal knowledge of promises in prior deeds; Inquiry notice i.e. lay of the land indicates there’s a common restriction in place; Record notice i.e. imputed to buyers on basis of publicly recorded documents.
What’s the deal with record notice?
Court split. Some say buyer is on record notice of contents of prior deeds transferred to others by a common grantor. The BETTER view is that buyer does not have notice of the contents of prior deeds transferred to OTHERS by common grantor.
What is the defense to enforcement of an equitable servitude?
Changed circumstances must be alleged by party seeking release. They must be so pervasive that the entire area has changed. Mere pockets of limited change are never good enough.
What is adverse possession?
Possession for a statutorily prescribed period of time can if certain elements are met ripen into title.
What are the elements of adverse possession?
COAH. Continuous (uninterrupted for the statutory period); Open and Notorious (the sort of possession the usual owner would make); Actual; and Hostile (no owner consent).
What is not necessary for adverse possession?
Possessor’s subjective state of mind.
What is tacking with respect to adverse possession?
One adverse possessor may tack on to his time with the land his predecessor’s time, so long as there is privity, which is satisfied by any non-hostile nexus, such as blood, K, deed, or will BUT NOT when there as been ouster.
What is the rule about disability and adverse possession?
The SOL will not run against a true owner who is afflicted by a disability (insanity, infancy, or imprisonment) at the START of adverse possession.
What are the two steps in conveyance of real estate?
1) The land contract which endures until step 2; 2) The closing, where the deed becomes the operative document.
What is the standard for the land contract?
It must be in writing signed by the party to be bound (buyer and seller). It must describe Blackacre and state some consideration.
What if the land contract states an amount of land that is more than the actual size of the parcel?
Buyer gets specific performance w/ pro rata reduction in price.
What is the doctrine of part performance?
An exception to statute of frauds where, if you have any two of (1) B taking possession, (2) B pays all or part of the price, and/or (3) B makes substantial improvement, the doctrine is satisfied and equity will decree specific performance of an oral K for the sale of land.
How do we solve the problem of risk of loss?
The doctrine of equitable conversion. Equity regards as done that which ought to be done. Once K is signed, B owns the land. B bears the risk of loss between K and closing unless K states otherwise.
What are the two implied promises in every land K?
(1) Seller promises to convey marketable title AT THE CLOSING; (2) Seller promises not to make any false statements of material fact.
What is the standard for conveying marketable title?
Title free form reasonable doubt, free form lawsuits, and the threat of litigation.
What circumstances will render title unmarketable?
(1) Adverse possession bc need good record title; (2) Encumbrances i.e. servitudes and mortgages render title unmarketable unless B waives them (but seller has a right to satisfy outstanding mortgage at closing w/ proceeds of the sale); (3) Zoning violations.
What do the majority of states hold a seller liable for when it comes to false statements of material fact?
Failing to disclose latent material defects, material lies and omissions. Silence is not golden.
Do disclaimers excuse sellers from obligation to not make any false statements of material fact?
If K contains general disclaimer, it doesn’t excuse seller from liability for fraud or failure to disclose.
What warranties does the land K not include?
Implied warranties of fitness or habitability. CL norm is caveat emptor. EXCEPTION is that the implied warranty of fitness and workmanlike construction applies to the sale of anew home by a builder-vendor.
What document controls after the closing?
The deed.
How does the deed pass legal title form seller to buyer?
LEAD. Lawfully executed and delivered.
What is the standard for lawful execution and delivery?
Deed must be in writing and signed by grantor. It need not recite consideration nor must consideration pass to make the deed valid.
How does the deed have to describe the land?
Doesn’t have to be perfect. Property requires only an unambiguous description and good LEAD.
What is the delivery requirement for the deed?
Satisfied when grantor physically transfers deed to grantee. It is permissible to use the mail, a messenger, or an agent.
What does delivery of a deed not require?
Physical transfer of the deed itself. It is a test solely of present intent. Does the grantor have the present intent to be bound irrespective of whether the deed was handed over?
What happens if the recipient rejects the deed?
Defeats delivery. But! Rejection must be express.
What if the deed is conveyed with an oral condition?
Oral condition drops out because not provable and delivery is done.
Can a deed be delivered by escrow?
Yes. Grantor may deliver an executed deed to a 3d party known as an escrow agent with instructions that the deed be delivered to grantee once certain conditions are met. Title passes when conditions are met.
What is the advantage of passing a deed by escrow?
If grantor dies or becomes incompetent or is unavailable before express conditions are met, title still passes from escrow agent to grantee once conditions are met.
What are the three types of deed?
Quitclaim, General Warranty, and Statutory Special Warranty
What is a quitclaim deed?
Contains no covenants. Grantor isn’t even promising he has title to convey. BUT grantor implicitly promises in land K to provide marketable title at closing. Any problems post-closing gets grantor off the hook.
What is a general warranty deed?
Best deed buyer could hope for. Present grantor assumes all defects of title including those due to grantor’s predecessors.
What six covenants does a general warranty deed invlude?
Seisin, right to convey, against encumbrances, quiet enjoyment, warranty, further assurances.
What are the present covenants in a general warranty deed?
A present covenant is breaches at the moment of delivery, and SOL begins to run at moment of delivery. They are the covenant of seisin, right to convey, against encumbrances.
What is the covenant of seisin?
Grantor owns the estate.
What is the covenant of right to convey?
Grantor has power to transfer. No restraints on alienation and grantor under no disability.
What is the covenant against encumbrances?
No servitude or mortgages on land.
What are the future covenants in a general warranty deed?
They are not breached if ever until grantee is disturbed in possession, so SOL runs from that future date. They are the covenants for quiet enjoyment, warrant, and further assurances.
What is the covenant for quiet enjoyment?
Grantee won’t be disturbed by 3d party’s lawful claim of title.
What is the covenant of warranty?
Grantor will defend grantee against lawful claims of title brought by others.
What is the covenant for further assurances?
Grantor will do whatever is needed in the future to perfect title.
What is the statutory special warranty deed?
Deed contains two promises that grantor makes only on behalf of himself. (1) Grantor promises he hasn’t conveyed Blackacre to anyone other than grantee and (2) Blackacre is free from encumbrances made by grantor.
What are the TWO BRIGHT LINE recording system rules?
(1) If B is a bona fide purchaser and we are in a notice jurisdiction, B wins, regardless of whether or not she records before A does. (2) If B is a bona fide purchaser and we are in a race-notice jurisdiction, B wins if she records properly before A does.
Is VA a notice or race-notice jurisdiction?
Notice.
Who do recording acts protect?
Bona fide purchasers and mortgagees (creditors). Does not protect heirs or devisees w/o Shelter Rule.
Who is a bona fide purchaser?
One who buys Blackacre for value and w/o notice that someone else got there first.
What does it mean to be a purchaser “for value”?
As long as B remits substantial pecuniary consideration, he is a buyer for value. Doesn’t matter if B gets a good deal.
What is actual notice?
Prior to B’s closing, B learns of A (prior purchaser).
What is inquiry notice?
B is on inquiry notice of whatever an exam of Blackacre would show. Creates a duty to inspect. EX: if A is in possession, B has inquiry notice. EX 2: if recorded instrument makes reference to unrecorded document, B has inquiry notice of whatever a reasonable follow up would show.
What is record notice?
B is on record notice of A’s deed if at the time B takes, A’s deed was properly recorded.
What does a “notice statute” look like?
A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, w/o notice thereof, unless the conveyance is recorded. (Translation: if B is BFP when he takes, he wins.)
What does a “race-notice” statute look like?
Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, w/o notice thereof, whose conveyance is first recorded. (Must be a BFP AND first to record.)
What’s odd about VA’s recording rules?
VA is a notice state, but Sup Ct held to prevail you must be a BFP who wins the race to record.
How must a deed be recorded in order to give record notice?
Must be recorded properly w/in the Chain of Title.
What is the chain of title?
Sequence of recorded documents capable of giving record notice to later takers. In most states, the chain of title is established through a title search of the grantor/grantee index.
What are the three discrete chain of title problems?
The shelter rule, the problem of the wild deed, and estoppel by deed.
What is the Shelter Rule?
One who takes from a BFP will prevail against any entity that the transferor BFP would have prevailed against i.e. transferee “takes shelter” in status of transferor and steps into the shoes of the BFP though he would otherwise fail to meet requirements for BFP status.
What is the aim of the Shelter Rule?
Protect B by making it easier to transfer successfully (even though C may not deserve this).
What is the problem of the Wild Deed?
If a deed, entered on the record (A to B), has a grantor unconnected to the chain of title (O to A), the deed is a wild deed. It is incapable of giving record notice of its existence. B’s recording is a nullity.
What is 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 the previously transferred interest.
How does one create a mortgage?
Conveyance of a security interest in land intended by the parties to be collateral for the repayment of a debt.
What are the two elements of mortgage?
Union of 1) debt and 2) voluntary lien in debtor’s land to secure the debt.
What do we call the parties in a mortgage?
DebtOR is the mortgagOR; and creditor is mortgagee.
What about the mortgage and SOF?
Must typically be in writing to satisfy SOF. This is a legal mortgage evidenced by writing. Also called note, mortgage deed, security interest in land, deed of trust, sale leaseback.
What is an equitable mortgage?
Instead of executing a note or mortgage deed, O hands creditor a deed to Blackacre that is absolute on its face. Parole evidence is allowed to show parties’ intent.
Can a holder of an equitable mortgage sell the land?
NO. Title will transfer to purchaser, but mortgagor can sue mortgagee for fraud and sale proceeds.
Once a mortgage has been created, what are the parties’ rights?
Unless and until foreclosure, debtor has title and right to possess. Creditor has lien i.e. the right to look to Blackacre in the event of a default.
Can parties to a mortgage transfer their interests?
Yes. Mortgages automatically follow a properly transferred note.
How can a creditor-mortgagee transfer his interest in a mortgage?
(1) Endorsing note and delivering to transferee OR (2) execute separate document of assignment.
What are the mortgage transferee’s rights?
If note is endorsed and delivered, transferee is eligible to become a holder in due course i.e. he takes the not free of an personal defenses that could have been raised against the original creditor. Holder in due course is subject to real defenses that the maker might raise.
What are the personal defenses that may be raised in mortgage claims?
Lack of consideration, fraud in inducement, unconscionability, waiver, or estoppel.
What are the real defenses to a mortgage?
MAD FIFI4. Material Alteration; Duress; Fraud In the Factum (lie about instrument); Incapacity; Illegality; Infancy; Insolvency.
What criteria must be met to be a holder in due course?
The note must be negotiable (payable to named mortgagee); the original must be endorsed by named mortgagee; the original must be delivered to the transferee; the transferee must take note in GF w/o notice of any illegality; and transferee must pay value for the note.
What happens to the lien of the debtor sells the land?
The lien remains on the land as long as the mortgage was properly recorded. All recording statutes apply ot mortgages as well as deeds.
Who is personally liable on the debt if O, debtor, sells Blackacre to B?
Both O and B are personally liable because B has “assumed the mortgage.” B is primarily liable; O remains secondarily liable.
What if B takes subject to the mortgage?
B assumes no personal liability. Only O is personally liable. But if recorded the mortgage sticks with the land. If O doesn’t pay, the mortgage may be foreclosed.
If mortgagee must look to the land for satisfaction, how must he proceed?
Mortgage must be foreclosed by proper judicial action. The land is sold and sale proceeds go to paying attorney’s fees, foreclosure expenses, and any accrued interest on the mortgage, and then satisfying the debt.
What if the proceeds from the sale of the land are too little to satisfy the debt?
Mortgagee may bring a deficiency action against the debtor.
What if there is a surplus in the proceeds from the sale of the land?
Junior liens are paid in order of priority, and then any remaining surplus goes to the debtor.
What is the effect of foreclosure on various interests?
Terminates interest junior to the mortgage being foreclosed but will not affect senior interests. Junior lienholders can get paid after all superior lienholders are satisfied in full, and can sue for a deficiency judgment for whatever is unsatisfied.
Who are the parties with interests subordinate to those of the foreclosing party?
Necessary parties to the foreclosure action.
Is the debtor-mortgagor a necessary party?
Yes. And he must be joined, particularly if creditor wishes to proceed against debtor for a personal deficiency judgment.
What is the effect of failure to include a necessary party?
Preservation of that party’s claim, despite the foreclosure and sale i.e. his mortgage remains on the land.
What is the effect of foreclosure on senior interests?
None. Buyer at the sale takes subject to such interests. Buyers is not personally liable on senior debt, but senior creditor can foreclose on the land if not paid. SO! Foreclosure sale buyer has a strong interest to pay off the lien.
How is bidding likely at the foreclosure sale?
Buyer should bid Blackacre’s FMV minus the money buyer needs to pay off senior lienholders.
As a creditor, what must you do to get priority as mortgagee?
Record. Until you properly record, no priority.
What is the rule once the priority is recorded?
First in time first in right.
What is a purchase money mortgage?
A mortgage given to secure a loan that enables the debtor to acquire the encumbered land. Creditor takes a superpriority interest in whatever parcel of land his extension of value enabled O to acquire.
What is an after-acquired collateral clause?
Interest in all holdings “whether now owned or hereafter acquired.” Permissible, but doesn’t beat a purchase money mortgage superpriority.
What about subordination agreements?
Allowed. A senior creditor may agree to subordinate priority to a junior creditor.
What is redemption in equity or equitable redemption?
Universally recognized up to the date of sale. At any time prior to the foreclosure sale, debtor can try to redeem the land. Right disappears after valid foreclosure has taken place.
How is the right of equitable redemption exercised?
By paying off missed payments and interest and cost.
What if the mortgage or note contained an acceleration clause?
Permits the mortgagee to declare the full balance due in the event of a default. If the mortgage contains an acceleration clause, the full balance and interest and costs must be paid to redeem.
May the debtor-mortgagor waive the right to redeem in the mortgage itself?
No. This is known as clogging the equity of redemption. It is unenforceable to extract waivers on the front end.
What is statutory redemption?
NOT RECOGNIZED IN VA. Gives debtor a right to redeem for some fixed period after the foreclosure sale has occurred. It applies after foreclosure, and the amount paid is usually the foreclosure sale price rather than the amount of original debt.
In states recognizing statutory redemption, what right does the mortgagor have?
Right to possess Blackacre during the statutory period.
When a mortgagor redeems in statutory redemption period, what is the effect?
Nullifies the foreclosure sale. Redeeming owner is restored to title.
What is lateral support?
If land is improved by buildings and an adjacent landowner’s excavation causes that improved land to cave in, the excavator will be liable only if negligent.
When does strict liability attach to the excavator’s actions?
When because of D’s actions, P’s improved land would have collapsed even in its natural state i.e. P’s improvements on land didn’t contribute to his land’s collapse.
What are the two major systems for determining the allocation of water in water-courses?
(1) Riparian doctrine and (2) Prior appropriation doctrine.
What is the riparian doctrine?
Water belongs to those who own the land. These people are “riparians” who share the right of reasonable use of water. One riparian is not liable to another unless he unreasonably interferes with others’ uses.
What is the 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 or not he happens to be a riparian owner.
How are rights determined under the prior appropriation doctrine?
Priority of beneficial use i.e. first in time first in right. B can acquire the right to divert and use water form a watercourse merely by being the first to do so. Any productive use of the water is sufficient to create the appropriation right.
What is groundwater?
Water beneath the surface of the earth that is not confined to a known channel.
What is the rule about groundwater?
The surface owner is entitled to make reasonable use, but the use must not be wasteful.
What are surface waters?
Those which come from rain, springs, or melting snow, and which have not yet reached a natural watercourse or basins.
What is the common enemy rule?
Surface water stagnates and doesn’t belong. It’s harmful, and it’s our nemesis. A landowner may change drainage or make any other changes/improvements to combat the flow of surface water (but courts have modified so that you can’t unnecessarily harm others’ lands in so doing).
What are the possessor’s rights?
To be free from trespass and nuisance.
What is trespass?
The invasion of land by tangible physical objects. To remove, bring action for ejectment.
What is private nuisance?
Substantial and unreasonable interference with another’s land use. Unlike trespass, no physical invasion required i.e. odors and noise give rise to nuisance but not trespass.
Can a hypersensitive plaintiff win in nuisance?
No. Not if the nuisance only exists due to the hypersensitivity.
What is eminent domain?
The government’s 5th Am power to take private property for public use in exchange for just compensation.
What are explicit takings?
Acts of governmental condemnation.
What are implicit or regulatory takings?
A governmental regulation that although not intended to be a taking has the same effect.
What is the remedy for a regulatory taking?
Either (1) compensation or (2) terminate the regulation and pay for damages that incurred while it was in effect.
What is zoning?
Pursuant to police powers, the government may enact statutes to reasonably control land use.
What must a proponent show to get a variance from a zoning ordinance?
(1) Undue hardship. (2) The variance won’t work detriment to surrounding property values.
How is a variance granted?
By administrative action.
What if land was once used for a lawful purpose but it is deemed non-conforming by a new zoning ordinance?
Ordinance cannot be eliminated all at once unless just compensation is paid. Otherwise, it could be deemed an unconstitutional taking.
What is an unconstitutional exaction?
Those amenities government seeks in exchange for granting permission to build. To pass constitutional scrutiny, they must be reasonably related in nature and scope to the impact of the proposed development.
