Property Law II

Question 1

Describe Easements in general the different classifications of an easement.

Answer 1

Gen.- an interest in land owned by another person, consisting of the right to use or control the land, or an area above or below it, for a specific limited purpose.

Traits:
Affirmative- entitle holder to do acts upon the burdened property. i.e.: driving across it (ROW) & fishing in pond (Right to Swim in Lake)

Negative- limits owner of land from using their land in certain ways. i.e.: preventing owner of land from doing something (buildings over a certain height);

Appurtenant- benefits owner of adjacent land; rights appurtenant to the land; must be two parcels of land. It runs with the land, thus subsequent owner of land enjoys easement
Dominant estate- land enjoying the right to exercise the easement
Servient estate- land subject to easement

In Gross- benefits owner of easement without regard to ownership of land; only one parcel; usually a specific situation (railroads, gas lines)

• App.: easement given to adjacent landowner
• In-G: easement given to someone across town

Question 2

Discuss the creation of Easements by expression or implication.

Answer 2

Express- arising out of a deed or conveyance; focus on intent of grantor

Implied- implied by circumstances surrounding the situation or by the intent of parties; consider facts of situation

Implied Easements: (2 types)

by Necessity.

Unity of Title- title of tract in question must have been held by one person prior to case at hand

Severance- unity of title must have been severed by a conveyance of one of the tracts

Absolute Necessity- necessity for owner of dominant parcel to use land, and without then could not make any beneficial use of parcel; must exist at the time of creation of the interest and time of the controversy

from a Pre-Existing use. (Quasi Easement)
Unity of Title- see above.
Severance- see above.

Prior Use- use must have been obvious, permanent, and reasonably necessary for the enjoyment of property; degree of necessity here only requires without easement then can be no reasonable mode of enjoyment; balance pre-existing use with necessity

*degree of necessity is higher for grantor than grantee because grantor should of accounted for this in original conveyance

Question 3

Non-possessory Interests: Profits à Prendre & Licenses

Answer 3

Profit- An easement that confers the right to enter and remove Imber, minerals, oil, gas, game, or other substances from land in possession of another.

Licenses- revocable license to be on property of another to do some act that would normally be unlawful (hunting); generally terminable at will and not subject to convey acing formalities; not an interest in the land, but privilege to use the land

Question 4

Name the ways which Easements are created and the classifications.

Discuss how Exceptions and Reservations factor into this.

Answer 4

Express
Reservation in a deed
Implied: by necessity & by pre-existing use
Prescription (affirmative)

Affirmative
Negative
Appurtenant
In-Gross

Exception- the interest never leaves the grantor’s hands, thus never transferred

Reservation- interest leaves grantor and goes to grantee, but a portion is reserved in favor of grantor; a. The grantor conveys a tract of land by deed, but reserves the right to continue to use that tract for a limited purpose (an easement)

Question 5

Discuss the way which an Easements is created by Prescription. Rationale.

Answer 5

Bring this when the factual circumstances resemble those of adverse possession.

Elements:

Open & Notorious: use was so obvious that a reasonable landowner would have noticed

Adverse Use: using land without actual consent;
*neighborly accommodations- when use does not interfere with servant estate’s enjoyment of property, presumed the use is not adverse

Continuous: use must be consistent with that of a reasonable easement holder’s use

For the statutory prescriptive period: SOL beings to run upon trespass; Jurisdiction specific; tacking may apply if in privity

Rationale: facilitates productive use of the land by protecting industrious claimants use

Question 6

Non-possessory Interests define it and name the types.

Answer 6

Non-P: you have an interest in the land but do not have possession.

Easements, Profits, Licenses
Real Covenants
Equitable Servitudes

Question 7

Real Covenants

Define it.
Elements.
Why are courts more stringent on requirements for the running of the burden than the running of the benefit.

*most of the time real covenants are restrictive, thus limiting and requiring things to be present on property.

Answer 7

written promise relating to land that imposes a burden on one party and benefits the other party and is enforceable in law by successors in interest; promises respecting the use of the land that will run with the land

Elements:

Meets SOF: written

Intent to bind successors: original parties must intend for subsequent purchasers to receive benefit/burden; language to look for, “this covenant shall run with the land,” “heirs and assigns,” “we intend to bind,” and “appurtenant to the land.”

Touch & Concern: must enhance the enjoyment of one parcel of real property by burdening the enjoyment of another parcel; consider: effects of physical use/enjoyment and property values

Privity: horizontal and vertical
H- between original parties; transfer of property and covenants must occur at the same time
V- privity between original covenantors and subsequent purchasers

Notice:
Actual- direct knowledge of the restriction at the time they acquired the burdened land

Constructive- two ways record notice or inquiry notice.
Record- restriction is present in prior deeds which are part of the purchaser’s chain of title
Inquiry- person knew or should of known; consider the neighborhood’s code, this should alter some suspicion of active covenants.

For burden/benefit to run:
Courts generally require all elements for Burden to run; however, do not require horizontal privity for a benefit and all vertical privity if less than the full estate is transferred

Question 8

Equitable Servitudes

Define it.
Elements.

Answer 8

Real covent that cannot be enforced at law for some reason (lacking element) when the purchaser had notice of the covenant; this is unfair, thus we bring a claim of equity to enforce covenant through injunction or specific performance.

Elements:

Intent to bind successors: original parties must intend for subsequent purchasers to receive benefit/burden; language to look for, “this covenant shall run with the land,” “heirs and assigns,” “we intend to bind,” and “appurtenant to the land.”

Touch & Concern: must enhance the enjoyment of one parcel of real property by burdening the enjoyment of another parcel; consider: effects of physical use/enjoyment and property values

Notice:
Actual- direct knowledge of the restriction at the time they acquired the burdened land

Constructive- two ways record notice or inquiry notice.
Record- restriction is present in prior deeds which are part of the purchaser’s chain of title
Inquiry- person knew or should of known; consider the neighborhood’s code, this should alter some suspicion of active covenants.

Question 9

Reciprocal Negative Easement

Answer 9

Scenario: common landowner who sells off part of the property with restrictions that burden the land sold off but with benefit to the land retained

Purpose: places the same restriction on common owner of land even though it might now be in the landowner’s deed; all lots must have a general scheme

Through Implication: one deed may mention the restriction and another deed may not; consider whether a reasonable person would have notice by some surrounding general scheme

Question 10

Constitutional Restrictions with respect to non-possessory rights

General
Rights
Policy

Answer 10

General- policy promoting free use of the land, but is not absolute.

Rights- cannot violate a person’s constitutional right; discrimination may be expressed or implied, look for a disparate impact on a protected class

Public Policy- looking for a disparate impact effecting the lives of citizens which the state has interest in protecting

Question 11

Limitations on Real Covenants/Equitable Servitudes

Who can enforce covenants?

Ways to terminate

Answer 11

violations of constitutional rights
violations of public policy
Must affect either the residential or aesthetic character of the land

Enforced through POA/HOA; have right to enforce restrictive covenants

Bases ok K theory- may have defense such as estoppel/laches or frustration of purpose

Terminate- holder of benefit executes a release in writing; merger; condemnation of burdened property

Question 12

Nuisance

Define
Nuisance Elements
Public v. Private Nuisance

Answer 12

Tort Action

Elements:

Intentional: acts with a purpose of causing harm or knowing will result

Non-trespassory: harm to the land or those living on the land must be done without actual physical entry by another (light, noise, vibration, air pollution, etc.)

Unreasonable: by way of 2 test or integration thereof
Gravity of harm test- substantial harm; conduct is unreasonable no matter how much benefit (public v. private) it provides society
Modern- weighs utility of conduct verse the amount our harm

Substantial Interference: real and personal invasion of Ps interest

Use and Enjoyment of Land: conduct has to cause some kind of physical damage to property or personal injury to the occupants

Question 13

Nuisance Damages

Public Nuisance Statutes

Answer 13

Injunction/Equitable remedy v. Money
less willing to grant an injunction when a lot of money and resources have been invested into property causing nuisance

Social Utility:
increase jobs
tax revenues
service that benefits the public

Policy Argument courts consider:
traditional property rights; value of long-term injuries; economic harm cause by injection v damages; putting property to highest use; value of long-term environmental damage

Statutes: make injunction more likely; but does not prevent the court from providing other remedies

Question 14

Traditional Methods of Controlling Land Use

Answer 14

Zoning
Subdivision Regulation
Administration of Land Use Controls

Question 15

Zoning

Define.
Constitutionally speaking.
Differentiate between Cumulative and Non-cumulative.

Answer 15

dividing up a municipality into different districts which allows residents to only do certain things within the respective districts (residential, industrial, architectural aesthetics)

Zoning is constitutional if it has a reasonable relationship to the states police power; rational basis review

Cumulative zoning method permits anything marked as the highest use to encompass the lower uses; whereas the noncumulative sticks strictly to the concept of use separation and requires the citizens to petition for rezoning

Question 16

Zoning:

Non-conforming Use

Special Permit

Consider a project in-progress for a certain type of use complying with the zoning, and then before completion the district is rezoned so that the use in now non-conforming. What is the legal argument? How does it differ from estoppel?

Answer 16

NCU- generally refers to non-conforming use of property or non-conforming structures within a certain zoning district due to re-zoning of the particular district; some statutes allow for a gradual elimination (amortization) of non-conforming where others require upon removal and rebuilding of property it must conform with modern zoning

SP- certain (unusual) uses within a zoning district require a permit even though the particular zoning area encompasses the use requested; funeral home permit, liquor permit.

Vested Right. Tell the court to consider the steps you have already made in because of the original zoning and because of this we have a vested right to that zoning.
i.e.: material on site, dirt work, and construction started, perhaps the decrees in land value due to re-zoning.

Estoppel requires a detrimental reliance on a promise/statement made by another, thus the gov. agency would need to make an assertion that the developer can use the land for a particular use then change the zoning; gov. agency may be estopped from denying the developer to finish the non-conforming use

Question 17

Public control & Private property rights:

Eminent Domain
Takings Clause & Elements
Condemnation & types
Exactions

Answer 17

well-established gov. power to take private property for public use so long as just compensation is given

Clause: 5th Amend. “nor shall any property be taken for public use without just compensation” - gives taking power

Elements:
take private property
for public use
for just or reasonable compensation:
Determine the FMV within arm’s length transaction
Fair compensation with an objective measure of the highest use of the property (opportunity cost value); i.e.: not forced to sale then what could they do with the prop. & its value
Does not include the expected gains from gov. plans with property, but does include aggregate value of all temporal interest
Does not include owner’s subjective valuation; i.e.: born and lived there forever, etc.

Condemnation: process by which property is taken and compensation is paid
Conventional Condemnation
Inverse Condemnation

Exaction: gov. imposes a condition on landowner/developer in return for issuing building permit (can be a monetary donation or donation of portion of property to public); i.e.: beach front house permit, gov. gets small strip of public access from street to beach.

Question 18

Conventional Condemnation

Define.
Define Public Use taking and levels.
S. Ct. view to the levels.
Just Compensation.

Answer 18

CC- gov. admits it is taking property and uses its right of eminent domain to effect property

PU- taking through the state identifying a legitimate state interest or purpose to take property and the interest being rationally related to the furtherance of the legitimate purpose

Levels:
Owned by gov. for public use
Owned by gov. for gov. use
Owned by private party for public use
Owned by private party for private use w/ beneficial public effect
Owned by private party for private use w/ no beneficial public effect

S.Ct.- 1-3 are good; 4 allowable if there is public benefit; 5 is not permissible.

JC- regardless if gov. takes portion or entire amount of property it must be for just compensation (FMV)

Question 19

Inverse Condemnation

Define.
Physical Invasions/Occupation define it and elements.

Answer 19

IC- Arises when a gov. occupies private property without initiating condemnation; includes regulatory takings; gov. has taken some property right from the landowner

PI/O- these are per se takings meaning the gov. has no defense; landowner only needs to show gov.’s physical invasion or occupation to be successful on claim (trespassory takings) (gov. required private apt. owners to install box on top of building and cable company cont. to own it, this is physical invasion)

Elements:
Permanent (residing within property bounds)
Physical (permanent attached to property, i.e.: box on building)
Occupation (by someone other than landowner)

Question 20

Inverse Condemnation:

Category Takings: OPU, Regulatory, Exaction
Total Takings & Policy.
Regulatory Takings & Elements.
Generally Takings found when (also called the exceptions to PC Balancing Test).

Answer 20

TT- per se taking when gov. regulation prohibits all economically beneficial or productive use of private land.
Policy- gov. should pay landowner just compensation when land completely loses its value due to a new gov. regulation; land must be deprived of all viable economically beneficial use (narrow exception)

RT- gov. regulates a property to such an extent that it is considered a taking; i.e.: accommodate unwanted intrusions, regulation that lowers value, imposes burdens unreasonable for society benefit; at some point (which there is no bright line threshold) gov. exercise of property rights will be considered a taking (non-trespassory taking) (deprives of all economically beneficial or productive use of private land)

Straight forward condemnation action, use this test.
Elements: (Penn Central Test)

Character of Gov. Action
nature of gov. regulation (physical invasion/occupation, misuse of regulatory authority)
Economic Impact of Regulation
diminution of value ( look at land and if owner can still put land to economic use then no taking)
Investment-Backed Expectations (objectively reasonable expectation)
expectations of owner when they purchased property

Exception- gov. found of taking when:
authorizes a permanent physical occupation of land
adopts regulation causing loss of all economically beneficial or productive use of land, unless justified by background principles of property or nuisance law
demands an exaction that has no essential nexus to a legitimate state interest or lacks rough proportionality to the impacts of the particular party

• first category taking consider the physical occupation
• second category taking consider if regulation denies all economically beneficial use of the land; total deprivation

Question 21

Exactions

Define.
Test.

Answer 21

Exact.- agreement by developer to make some sort of a contribution to the public as a condition for obtaining approval of the project/development

Essential Nexus Test- must be essential nexus between the public purpose and means employed to achieve it, otherwise its a taking and gov. must pay just compensation

Question 22

Takings Analysis.

Answer 22

Step 1: Categorical Takings OR Conventional Condemnation?
Police power gone too far.
1. Permanent or Physical Invasion Occupations (cable)
2. Loss of All Economic Beneficial use (Total Taking)
3. Exactions (no essential nexus between public interest and manner employed to achieve it)

Step 2: Make use of Penn Central to determine if its a taking:

Question 23

Transfer of Property Interest:

Real Estate Transactions, what effect does closing day have?

Answer 23

Pre-closing Day the real estate K governs and Post-closing Day the deed controls (swap $ for deed title)

Question 24

Real Estate K:

Requirements.
Covenant v Promise.

Answer 24

Must:

have a Written K

Identify the Parties in the K

sufficiently Describe the Land (address)

include Terms and Conditions of payment (price, deposit/earnest $, time of performance)

include a Transfer of Title

have the Signature of the party to be charged

Practically speaking: include information about the amount, timing, and manner of financing

Covenant- promise, surrounding an obligation to perform

Condition- statement that a covenant is dependent upon the happening of an even or occurrence

K stating a condition may be avoided if condition is not satisfied (sell land if you get loan). Whereas if the term states a covenant then it may constitute a breach of K.

Question 25

Real Estate K:

Assignment
Damages

Answer 25

Ass.- vendor or vendee can assign right to 3p during the executory period absent a term in the K stating otherwise; neither party rids themselves of obligations (must have release); K terms may not allow for assignment; assigns rights by conveying title

Damages:

Specific Performance- force the K
Restitution- party received a benefit that is unjust for them to keep (unjustly enriched)
Rescission- dissolve the K
Reformation- re-structure the K
Monetary Damages- Get the benefit of the bargain damages at the time fixed for delivery

i.e.:
vendee breaches then vendor can recover the K price minus the FMV
vendor breaches the vendee can recover the FMV minus the K price

Consider: FMV=$100k and K price is below/above the FMV by $10k

Vendee recovers when K price is $90k
Vendor recovers when K price is $110k

*AR follows American Rule: benefit of bargain

Question 26

Deeds:

Statute of Enrollment
Types
Go interest transfer, describe its importance. 
Elements
Not effective situations.

Answer 26

SOE- required public records of all sale and bargain deeds

Types:
Quitclaim Deed- conveys whatever title the Go/Vo has without guaranteeing anything. (does not speak to the quality of the title or whether the Go stands behind it): doesn’t contain 6 covenants of title

Gen. Warranty Deed- provides the Go is guaranteeing the quality of title; contains 6 covenants of title

Special Warranty Deed- Go only warrants from defects during his time as owner; contains 6 covenants of title

Go- here, Go can only transfer the interest they have the time of conveyance. (i.e.: A has .5i at deed to B, but later gets the other .5i; B only gets the 1st .5i)

Elements:
Must be ‘in Writing’
Must ‘Identify the Parties’ (Go & Ge)
Must contain a ‘Description of the Land’
Must include words “present intent to convey,” or modernly we consider the present intent implicit in delivery
Must be signed by GO

Not effective: deed to decease Ge; heirs of someone that is living; corp. that is not formed

Question 27

Deeds:

Merchentable/Marketable Title.
Implication associated with marketable title.
Remedie for unmarketable title.
How does marketability work with adverse possession.

Answer 27

MT- title not subject to such reasonable doubt as would create a just apprehension of its validity in the mind of a reasonable, prudent, and intelligent person; want a fee simple title free of covenants, easements, liens, etc.; title is unmarketable when a reasonably prudent purchaser would refuse to accept it due to cloud on title

Imp.- implied there is an obligation to sell marketable title, unless there is a subject-to clause listing encumbrances or liens the purchaser has agreed to

Rem.- Monetary damages are usually awarded; once buyer finds out about the defect B must give seller notice and allow S to cure within a reasonable time; specific performance not generally awarded because owner of land may not be able to cure title to the land

AP- Title acquired through adverse position is a not marketable title until you actually get a court to rule you have title, you have a judgment shown within the public record, then you have title.

Question 28

Modern Deeds.

Deeds are structured with these.
Defects. Void or Violable.

Answer 28

Granting Clause- showing intent to convey

Consideration- deed is a transfer of ownership and therefore does not have to contain the actual purchase price

Habendum clause- limits the estate (life estate, fee simple determinable ‘condition’)

Reddendum clause- Go wishes to make a reservation of the property

Construing Deeds- Go intent; 4 corners of doc.

Premises- portion of the deed that indicates the parties names, consideration, description of land, and granting clause

Defects- error in deed that does not reflect intent, then parties may petition for reformation; must show in clear and convincing evidence views are not reflected; failure to conform then consider whether it is void or voidable

Void- if Go never had any interest. Look for some sort of fraud in the execution, forgery, complete lack of delivery. BFPFV interest is lost.

Voidable- fraud in the inducement, lack of capacity, duress, undue influence, deed in favor of a minor; BFPFV interest is protected

Question 29

Deeds:

Land Descriptions.
Types. Describe them.

Answer 29

Meets & Bounds description- start at an initial point in ground, give directions for prop. lines to be drawn along the perimeter, and end at the initial point.

Gov. Survey System- based on township girls of 6x6 mile squares (mostly just the western half of the country)
idea: baseline (horiz.) & prime meridian (vert.); range is movement E to W; Township is N to S; (township is also name of individual 6x6 square miles); each township contains 36 sections consisting of 1x1 square mile

Plat System- urban and suburban areas; subdivision plat filed with county and if proved can be used as a legal description.

Question 30

Transfer of Real Estate: Real Estate K:

Financing.
Define.
Distinguish between a Promissory Note and Mortgage.

Answer 30

Financ.- purchaser usually secures financing through 3p independent of Go or Ge

Promissory Note- here a K is present and commitment to fulfill by promise; debtor owes obligation to creditor

Mortgage- this is a security interest which ensures satisfaction of the obligation; mortgagor grants the SI within the property to mortgagee; FS interest with condition subsequent

*mortgage follows the promissory note

Question 31

Transfer of Real Estate: Mortgage.

Define Foreclosure. Strict Forclosure.
Two options of Foreclosure
Elusory K.

Answer 31

Fore.- Sell of the mortgaged premises; occurs when debtor defaults by failing to make promise payment.

Strict Foreclosure- forfiet the land back to Mee and will cover the debt; even when no sale

Options-
Judicial Foreclosure: court action where a judicial public sale results & proceeds go toward debt; proceeds are insufficient then debtor liable if this is a recourse loan; proceeds exceed then go towards debtors with priority

*recourse allows the creditor to sue in court for deficiency and collect remaining debt; whereas non-recourse the creditor can only go after the property

Power of Sale Foreclosure- performed with gov. assistance through statute; resulting in private sale

• AR allows both.
• Purchase Money lender has highest priority

Elusory K- no meeting of the minds which allows one party to interpret the K with a subject intent; need to establish type of financing, the amount, and reasonable interest rates if condition subsequent is present

Question 32

Discuss Dower Interest.

Answer 32

Spousal relationship; one spouse has interest in the property conveyed and has not authorized the conveyance; case studied gave the wife a 1/3 interest Life Estate within the land; the interest may live on even when only one of the spouse’s has title to the deed.

Question 33

Transfer of Real Estate: Deeds.

Recording:
Policy.
Types of Indexing System.
Types of Recording Acts.
How does the Shelter Rule factor in.
Types of Notice.

Answer 33

Policy- protects BFPFV; encourages use of system & punishes those not using the system

Index.- 2 types
Grantor/Grantee Indexes (most common): find Go of deed & trace back t land patent, the work forward from there in Go index

Tract/Parcel Indexes: organized by tracts of land: usually divided into blocks and lots; more efficient, but less prominent among jurisdictions; makes it more difficult for debtors to find all real property of debtor

Record.- 3 types
Notice: protects subsequent BFPFV from a previous conveyance by granting rights over the previous, if subsequent value & w/o notice and then gives the rest of world notice to his rights (records); requirement is that you must be a BFPFV (no notice & gave value)

Race-Notice: protects the BFPFV so long as they record first; first person give notice to the world by recording in county office has priority to title, even if they are the second person for the title to be conveyed to so long as they have no notice and gave value (.5 States, AR)

Race: first person to record at court house wins regardless of your prior knowledge (3 states)

Shelter.- once BFPFV comes into chain of title then subsequent purchasers from BFPFV get same protection even if they have notice; exception: prior granter had notice becomes a subsequent purchaser from BFPFV

Notice- 3 types.
Actual: actual knowledge or factual; seller tells buyer of previous conveyance
Record (constructive): deed has been recored, thus the buyer is on notice; searching through the record would alert them
Inquiry- evidence of another claim that should have triggered buyer to inquire further to discover any other interest; scienter; i.e.: house aesthetic code in sub-division

*not really sufficient notice if everyone in community knows the Seller does not own the property

Question 34

Bona Fide Purchaser.

What’s property law’s look on BFP .
Elements.

Answer 34

BFP- protects subsequent BFP if purchasing for value and without notice; Determined at the time of the conveyance.

Elements:
GF: acting in good faith; no devious intention
Valuable Consideration: fmv; maybe nominal; forbearance: forebear from taking an action legally entitled to engage in; changes ballgame if states a definite amount of time.
Without Notice: consider three types.

Question 35

Chain of Title.
Define it.
Theory.

Answer 35

Record office’s index; only required to know whats reasonable by examining grantor/grantee index

Question 36

Persons Protected by the System

Implied Warranty of Fitness/Habitability: generally what is it and what is the standard.

Answer 36

Gen.- looking for defects in the property; its implied; patent defects- those obvious to the eye

Stand.- whether its reasonably suited for its intended use; looking for latent defects (those defects you won’t discover until after a while of use; i.e.: cracked foundation)

Notes:
some jurisdictions don’t extend this to commercial structures

warrant last for 5y after construction

parties may attempt to waive this, but implied, so they will have to be very specific to waive this warranty

Question 37

Wild Deed.

Define it.

Answer 37

Deed recorded outside the chain of title is a wild deed and therefore not effective to put subsequent gf purchasers on constructive notice.

i.e.: conveyed before land patent issued; if filed conveyance of title in record before patent issued then wild.

Question 38

X is the true owner of Greenacre

O by Warranty Deed conveys greenacre to A
• remember, O has no title to convey

X then conveys Greenacre by deed to O

State of title to Greenacre & why:

Answer 38

A is the owner by the doctrine of after-acquired title. When X conveyed title to O this principle is that title to prop. automatically transfers

Question 39

Covenants for Title and After- Acquired Title:

Present Covenants.
Future Covenants.
Damages.

Answer 39

Present Covenants: 3 types, they do not run with the land (only sue Go) & SOL begins at time of conveyance

Seisin: Go covenants that she is seized of the estate or interest she purports to convey; Need title and maybe possession (courts are split – AR says yes, so grantor is liable for adverse possessors); Goes hand-in-hand with next covenant

Right to Convey: Go covenants that he has power and authority to make the grant; Someone who is not seized of the land could still have this right (power of attorney)

Against Encumbrances: Assures that there are neither visible (easements, etc.) nor invisible (mortgages, liens) encumbrances against the title of the interest conveyed

i.e.: Ge can see permanent easement on land then taking subject to easement & no covenant breached (power lines)

Damages- lesser cost to remove encumbrance or the dilution in FMV with encumbrance
Exclusion- look for “subject to” clause to exclude certain encumbrances

Future Covenants: 3 types, run with the land so long as no break in the chain of title and SOL begins at time of lawful eviction

Further Assurances: Go covenants they will perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect

Quiet Enjoyment: Go covenants that Ge will not be disturbed in possession or enjoyment of the property by a 3rd party’s lawful claim of title

Warranty: Go warrants they will defend against any lawful or reasonable claims of title by a 3rd party on behalf of Ge and compensate Ge for any loss sustained by the claim of superior title; Ge must notify Go when claim arises to give them an opportunity to defend; Go does not defend & Ge is evicted then Ge may bring breach of W claim

Damages 3 measures if complete failure of title

Maj. Rule: amount paid plus interest from time of purchase
Min. Rule: value of land including improvements on land at the time the covenant was made and appreciation in value of that, but nothing for anything that you add
Min. Rule: value of land including all improvements (whether made at the time of covenant or after) and appreciation of all that

*value of rents received may offset by value of improvements

Question 40

O to A (A does not record).
O to B (B has notice of the earlier conveyance to A).
B records.
A records.
B sues A for title.

Answer 40

Jurisdiction:
Race:
B wins because she recorded first.
Notice:
A wins since B had notice of the prior conveyance and thus cannot prevail over a prior grantee who bought without notice, no matter who records first.
Race-notice:
A wins since B had notice of the prior conveyance, and the first to record wins only if they had no notice of the prior conveyance.

Question 41

O to A (A does not record).
O to B (B has no actual notice of the earlier conveyance to A).
B records.
A records.
B sues A for title.

Answer 41

Race:
B wins since B recorded first.
Notice:
B wins since B bought without actual or constructive notice.
Race-notice:
B wins since B bought without notice and recorded first.

Question 42

O to A (A does not record).
O to B (B has no actual notice of the earlier conveyance to A).
A records.
B records.
B sues A for title.

Answer 42

Jurisdiction:
Race:
A wins since A recorded first.
Notice:
B wins since B bought without notice of the prior unrecorded deed from O to A; it is irrelevant that A recorded first.
Race-notice:
A wins since, although B bought without notice, A recorded first, and both lack of notice and recording first are required to prevail over a prior unrecorded interest.

Question 43

O to A (A does not record).
A to B (B records).
O to Z (Z has no actual notice of deed from O to A; Z records).
B records deed from O to A.

Answer 43

Jurisdiction:
Race:
Z wins in contest with B because the deed from O to A was recorded too late; the deed from A to B is a wild deed that Z could not find out about and thus is not bound by; Z wins even though B recorded before Z.
Notice:
Z wins for the same reason; Z had no actual or constructive notice of the conveyance from O to A since the deed from O to A was recorded too late (after O conveyed to Z).
Race-notice:
Z wins for the same reason; Z had no notice of the conveyance from O to A and it is irrelevant that B recorded first.

Question 44

O to A (A does not record).
O to X (X has notice of conveyance from O to A).
X records.
A records.
X conveys to Z (Z has no actual notice of deed from O to A).

In a contest between A and X:
In a contest between A and Z:

Answer 44

In a contest between A and X:
Race:
X wins since X recorded first
Notice:
A wins since X had notice and is therefore unprotected by the statute
Race-notice:
A wins since, although X recorded first, X had notice of the prior conveyance to A and thus cannot prevail.

In a contest between A and Z:
Race: 
Z wins because the deed from O to A was recorded too late, after the transfer from O to X and the deed from O to X was recorded and thus Z could not have discovered the conveyance from O to A; Z prevails even though A’s deed was recorded before Z bought since Z would never have looked that far forward for a deed from O.
Notice: 
Z wins for the same reason.
Race-notice: 
Z wins for the same reason.

Question 45

O to A (A does not record).
O to X (X has notice of conveyance from O to A).
A records.
X records.
X conveys to Z (Z has no actual notice of deed from O to A).
In a contest between A and Z:

Answer 45

In a contest between A and Z:
Race:
A wins since A recorded before X and therefore Z would find it, since the period of the search is from the date O obtained title until the date a deed out from O is recorded.
Notice:
A wins since Z was not a bona fide purchaser; although Z had no notice of the deed from O to A, Z was on constructive notice since a search would have revealed the deed from O to A because it was recorded before the deed from O to X.
Race-notice:
A wins since Z was not a bona fide purchaser and was on constructive notice of the earlier conveyance from O to A.

Question 46

O to A (A does not record).
O to X (X has no actual notice of conveyance from O to A).
X records.
A records.
X conveys to C (C has notice of conveyance from O to A).
In a contest between A and C:

Answer 46

In a contest between A and C:
Race:
C wins since X recorded before A, and thus has the power to convey title to C.
Notice:
C wins even though C had notice of the earlier conveyance from O to A under the shelter doctrine; since X had no notice of the conveyance from O to A, X obtained good title and would prevail in a contest with A, and under the shelter doctrine has the power to convey good title to C despite C’s notice that O conveyed to A before conveyed in X.
Race-notice:
C wins since X bought without notice and recorded before A and the shelter doctrine thus gives X the power to convey title to C even though C knows about the earlier conveyance from O to A.

Question 47

Examination of the Records or an Abstract of Title

Answer 47

Old form of title insurance; provides summaries or actual copies of every document of record pertaining to the property; record of deeds and instruments showing chain of title

Question 48

Title Registration – Torrens System Title Insurance

Torrens Define
Insurance Define, Types, Things insured.

Answer 48

Torrens System: place that you can search to see who owns the property; who has liens/interest on the property; one form a title held with circuit office and the other with the owner of the property; new fresh certificate for each transfer to show exactly what the state of title is.

Insurance- Insurance promise that if title is not provided (clear title) the indemnified will pay out for the loss.

Types: Lender’s Policy & Owner’s Policy

Things: no hold over tenants; adverse possessors; encumbrances on the land.

Question 49

Subrogation

Answer 49

• substitution of one claimant by another claimant of the same claim, brought about when the new claimant pays the earlier claimants claim in a circumstance in which the earlier claimant then assigns the claim to the later claimant.
• E.g., when the insurer pays an insured for an injury caused ;by a third party, and the insured assigns the insured’s underlying claim to the insurer, who then pursues the third party on the subrogated claim.

Question 50

Equitable Conversion
Nature of the Vendor-Purchaser Relationship
Devolution by Death
Risk of Loss

Answer 50

EC- doctrine of the law equitable title passes to the purchaser as soon as an real estate k in valid; seller keeps title until conveyance; here, we are in this in-between area and stuff happens like tornadoes, or the Seller runs away with title; but usually if something happens to the property (house burns, taken by eminent domain) the purchaser is liable

i.e.: Sign K for house; tornado happens; Buyer is liable because EC

Nature- looking at characterization of the land; whether real estate or personal property; real estate will go to Vendor upon death; personal property will go to purchaser upon death.

Dev.- purchaser dies then estate liable to pay amount out of estate for property upon signing a K; vendor dies then liable to hand over title upon singing of K; any clause not fulfilled of K then not an enforceable K

ROL- The buyer bears the risk of loss between the time the contract was signed and the closing; consider insurance, whomever has the insurance policy has rights to the proceeds; exception: unmarketable title & Seller negligence

Question 51

Interests in Water.
Factors to consider:
Doctrines & the theories.

Answer 51

Consider: Kind of water (channel/body & surface/underground); geographical location; Eastern: Riparian & Western: Appropriation

Appropriation Doctrine- gov. agency acting under const. or legislation authority apportions water to contesting claimants; principle distinction under appropriation is not subject to riparian land owners;

Riparian Doctrine- gave owners of land bordering (adjacent) the stream the right to use the water; divided into the natural flow theory and reasonable use theory

Natural Flow: riparian owner can take water for domestic uses only (family, livestock, gardening) but the (lake/stream) water level must be kept at normal level

American or Reasonable: each person must exercise their right to use the water reasonable with regard to those others similarly situated;o rights of riparian proprietor are mutual;

*consider if diversion is even benefiting the same watershed

Question 52

Distinguish between:
English or Absolute Rule
American or Reasonable Rule
Correlative Rights Doctrine
Restatement of Torts
Prior Appropriation

Answer 52

English: withdrawal any amount for any purpose without liability
American: entitled to water on land but cannot take in excess (needs reas. purpose); liable if water not used for beneficial purpose
CRD: rights of owners are coequal over an aquifer and owners cannot take more than their share; based on each owners reas. needs; liable if someone is injured
Rest.: several factors concerning (purpose, sustainability, economic value, social value, extent of harm, etc.)
PA- priority to the first landowner who diverts and beneficially uses the water from a water source.

*AR combines core. rights doctrine and Reas. use doctrine

Question 53

Groundwater Questions:

Can the owner waste water?

Can the owner withdraw unlimited amounts of water for use on the owner’s own land, even if others are harmed?

Can the owner withdraw unlimited amounts of water and sell it to an off-site user?

Answer 53

Only under the English or absolute ownership rule

Yes, under the English rule, the American or reasonable use rule, and the prior appropriation doctrine.

Only under the English rule and the prior appropriation doctrine.

Question 54

Navigable v Non-navigable Importance

Answer 54

determines whether a private party or state owns the waterways bed; State owns navigable.

Question 55

Interests in Oil and Gas: Migratory or Fugitive Resources.

Rule & Problems:
Regulations:
Conversion of resources. 
Ownership in place theory.
Fair Share Principle.

Answer 55

Rule of Capture: self-help; get as much as you can even if it comes from an adjacent property; first come first serve; which holds that oil and gas are not owned until they are produced

Problems: hard problem to determine the exact location of the hydrocarbons; speculative industry

Regulations: well spacing (specifies how much acreage is assigned to each well and where it can be located); production limit (prevents overproduction)

Conversion- taking resources from another’s property and selling as your own

Ownership- same interest in solid minerals; fee simple while in the ground; ownership subject to being lost if produced by someone else

FSP- within reasonable limits, allowed opportunity to recover equal amounts of recoverable oil underlying the property; doesn’t abolish rule of capture, but places limits on proper application

Question 56

In 2010, Hurst sought approval of her next-door neighbors, the Keels, to construct a “French drain” across their backyard in order to alleviate flooding in Hurst’s side-yard and driveway. The Keels verbally agreed to let Hurst enter their yard and construct the drainage system. Hurst then hired workers to install the French drain a few months later at a cost of $6,000. In 2014, the flooding problem returned and Hurst sent workers out to the Keels’ yard to unclog the drainage system. The Keels refused to allow the workers to enter their land. What is the most likely result if Hurst sues the Keels for denying access?

A. The court will find an in gross easement exists that does not extend to workers contracted by Hurst.
B. The court will find merely an oral license existed, which was properly revoked by the Keels.
C. The court will find an irrevocable license because Hurst spent $6,000 in reliance on the Keels’ promise.
D. The court will find that the oral license expired immediately upon the completion of the construction of the drain.
E. The court will find an easement by pre-existing use in favor of Hurst.

Answer 56

?

Question 57

At the end of last year, Oswald had fallen on rough times and so he decided to sell the family farm. After marketing the fifty-acre tract of land, complete with a well-kept cottage and a red barn, Alice finally stepped forward to purchase the parcel. In light of her love for the great outdoors, Alice hoped to escape from the city and to live in the countryside, making Oswald’s farm perfect for her purposes. The parties executed a valid contract and Oswald delivered a warranty deed upon Alice’s payment of the purchase price.

Oswald quickly spent the funds that his farm’s sale had produced and found himself in yet another troublesome spot. Finding a quick purchaser, Oswald sold his farm again to Brady, who took a deed without notice of Oswald’s prior dealings with the farm. Alice recorded her deed thereafter, soon thereafter. A week later, Brady recorded as well.

Which of the following is true?

A. Alice would win only in a notice jurisdiction.

B. Brady would win in both a race notice jurisdiction as well as in a notice jurisdiction.

C. Alice would win in all jurisdictions.

D. Alice would win in both a race and race notice jurisdictions.

E. Brady would win in a race notice jurisdiction.

Answer 57

D

Question 58

Reference problem for drawing.

Three parcels of land sat north of Highway 101. To the west, dwelled Mike, a rather pleasant fellow who enjoyed working in his garden growing vegetables which he sold at a local farmer’s market. Jessica lived on the eastern-most parcel where she operated an art studio. Between the two lived an elderly lady, Betsy, who housed several dozen cats.

The three parcels sat on a rising slope that peaked at Mount Foster. As one moved from west to east, the parcels gradually rose at an incline. This created a serious flooding issue, as the water descending from Mount Foster often pooled onto Mike’s parcel at the mountain’s base. After Mike spoke with Jessica of his woes, the two agreed that Mike could build a drainage ditch on the eastern (i.e. the highest point) of Jessica’s parcel to divert the water onto Route 101 and away from Mike’s land. Pursuant to this agreement, Mike performed the work himself and to his delight, the ditch diverted most of the water.

In addition, Mike purchased new supplies and hauled them over Betsy’s property in order to reach Jessica’s parcel and his irrigation ditch. Although Betsy watched Mike cross her land, she never uttered a word as she was too busy wrangling up her beloved cats.

Several years passed, and the flooding began once again. Mike entered Jessica’s parcel to make repairs to his drainage ditch, only to be chased away by Jessica wielding her trusty garden hoe.

Select the best answer out of the following.

A. Mike likely had a revocable license to make repairs to the drainage ditch, which Jessica has now revoked.

B. Mike likely had an easement implied by prescription to cross Betsy’s land.

C. Mike likely has an equitable servitude permitting him to enter onto Jessica’s land and make repairs to the drainage ditch.

D. Mike likely has an irrevocable license to enter upon Jessica’s land to make repairs to the drainage ditch.

E. Mike has no remedy.

F. Jessica likely could raise a successful claim against Mike for trespass.

Answer 58

D