Property Rules Flashcards
Assignment
Tenant transfers interest in whole; transfers ENTIRE REMAINING TERM OF LEASE
After assignment –> original T no longer in privity of estate/not liable
Sublease
Transfers interest in part, original T retains some part of the remaining term, other than right to reenter upon breach
- Sublessee is the T of original lessee
- LL and sublease not privity of estate or privity of K
- Sublessee can’t enforce any covenants made by LL in lease, unless residential sublease then may be able to enforce implied warranty of habitability
Common Law Caveat Lessee - Buyer Beware
LL under no duty to make premises safe, except for in following situations “CLAPS”
C: common areas
L: latent defects
A: assumption of repairs, must complete with reasonable care
P: public use – LL liable for defects on premises that cause injury to public
S: Short term lease of furnished dwelling; LL’s responsible for any defective condition which injures tenant
Modern Trend LL Tort Liability = General Duty of Reasonable Care
LL owes general duty of reasonable care towards residential tenants
- liable for injuries in tort resulting from ordinary negligence if LL had notice of defect + opportunity to repair it
Fixtures
Chattel that is so affixed to real property that it ceases being personal property
Accession
When an article of personal property “accession” becomes an integral part of the property, even though it’s not physically annexed to the property - fixture becomes integral part of the realty
Manifest intent to determine whether chattel becomes a fixture
(I) relationship between annexor and premises
(ii) degree of annexation;
(iii) nature and use of chattel
Easement
grant of nonpossessory property interest that entitles its holder to some form of use or enjoyment of another’s land; presumed to be perpetual duration unless otherwise specified
Affirmative easement
Right to use someone else’s land
Negative easement
Right to prevent something on another’s land
Easement appurtenant
Involves two tracts of land:
- Dominant parcel - has benefit which runs to grantees regardless of mentioned in conveyance
- Servient parcel - burden, which runs to grantees with notice
Easement in Gross
Involves one tract of land; only servient land burdened there is no dominant parcel
Example: right to swim in another’s pond, utility company right to lay power on lot, billboard on another lot
Creating Easements = PING
- Prescription: through adverse possesion
- Implication
- Necessity
- Grant
Easements by Implication
- Easements implied by preexisting use when:
- previous use on the servant land was apparent and continuous AND;
- parties expected that the use would survive division because it’s reasonably necessary to dominant tenements use and enjoyment - Easements Implied Without Preexisting Use:
- Subdivision: w/ lots sold in subdivision with reference to a recorded map
- Profit a prendre: implied easement to pass over land and use as reasonably necessary to extract minerals/product from land
Easement by Necessity
Implied when a landowner conveys a portion of her land with no way out except over some part of the grantor’s land (landlocked parcel)
Easement by Grant
In writing signed by holder of servient tenement, unless duration is so brief falls outside SOF
Terminating Easements = ENDCRAMP
- Estoppel
- Necessity
- Destruction
- Condemnation
- Release
- Abandonment
- Merger
- Prescription
Easement termination by estoppel
oral expression of intent to abandon won’t generally terminate an easement, unless it’s also committed to writing OR accompanied by abandonment
- Some conduct/assertion by the owner of the easement AND
- Reasonable reliance by the owner of the servient tenement coupled with;
- Change of position
Easement termination by necessity
Expire as soon as necessity ends, unless easement was reduced to express grant
Easement termination by destruction
Destruction of servient tenement, other than through willful conduct of servient owner, terminates easement
Easement termination by condemnation
governmental eminent domain power terminates easement
*easements AND nonexclusive profits = property right which entitle holders to compensation for any condemnation proceeding
Easement termination by release
Release in writing given by the servient land owner will terminate easement
Easement termination by abandonment
Must show physical action for an intent to never use easement again; words alone not sufficient
Easement termination by merger
Easement extinguished when title to easement and title to servient land become vested in same person
License
Mere permission to enter land of another for narrow purpose
- may be revoked at any time merely by a manifestation of the licensor’s intent to end it
- don’t need to be in writing
- tickets create freely revocable licenses
- license + interest = irrevocable as long as interest lasts
Profit
Nonpossessory interest in land that allows profit holder to enter servient tenement to remove resources
- shares rules of easements
- entitled to compensation if government condemnation
Real Covenants
Written promise to do/not to do something related to the land; contractual limitation
Negative: promise to refrain from doing something
Affirmative: promise to do something
Real Covenant - Requirement for burden to run to later grantees
- Intent - inferred from language/cirucmstances in the deed
- Notice
- Horizontal privity
- Vertical privity
- Touch and concern - affect parties in legal relation as landowners
- Notice - actual/inquiry/record
Real Covenant - Requirement for Benefit to Run to Later Grantees
- Intent - inferred from language/circumstances in the deed
- Vertical Privity
- Touch and Concern - affect parties in legal relation as landowners
Horizontal Privity
Nexus between original promising parties; requires they be in succession of estate (mortgagor/mortgagee; landlord/tenant)
Vertical Privity
Nexus between successor in interest and originally covenanting party
- Contract; devisee; descent
- Absent when successor acquires interest through AP
Equitable Servitude
Promise that equity will enforce against successors of burdened land regardless of whether it runs with the land, unless the successor is a BFP
How is equitable servitude created?
- Originally in writing (generally not always)
- Intent: original parties intended promise to be enforceable by and against successors
- Touch and Concern: promise affects parties as landowners
- Notice: subsequent purchasers burdened by covenant had some form of notice (look to recording act)
Common Scheme Doctrine –> Court will imply reciprocal negative servitude to hold unrestricted lot holder to promise
- When sales begin, subdivider had a general scheme of residential development which included the defendants lot;
- can be evidenced by recorded plat, general pattern, oral rep - Defendant lot holder had notice of promise contained in prior deed when it took:
- actual: in deed/prior deed
- implied: lay of the land
- record: imputed to buyers on recorded documents
**if scheme arises after some lots are sold, then general scheme will NOT apply
**will not enforce if neighborhood conditions have so changed/unclean hands/etc.
Adverse Possession
Possession for statutory period can turn into title of real property when COAH
C: Continuous/uninterrupted use
O: open use = visual/visible
A: Actual and exclusive; only to the title they actually occupy as long as not sharing with actual owner
H: hostile/without true owners permission
If adverse possessor enters under color of title –> deemed to be in constructive possession of all land deed describes, as long as in actual possession of reasonable portion of the land
- one may tack onto predecessors time so long as their is privity
- statute begins to run when owner brings suit (does not run if owner under disability @ time)
Marketable title
Land sale contracts contain an implied covenant that seller will deliver title free from an unreasonable risk of litigation at closing
Examples of defects:
- encumbrances
- existing zoning violation (not just mere presence)
- defects in chain of title
If title not marketable –> buyer must notify seller and give seller reasonable time to cure defects
If seller fails to cure –> buyer can rescind, sue for damages, specific performance
Land Sale Contract
Must be in writing for SOF:
1. Identify the parties;
2. Describe the property
3. Include the price/means of determining the price (FMV)
Deed
- Words of intent to transfer
- Description of land and parties
- Grantor’s signature
- Effective on delivery; acceptance presumed unless facts indicate not accepted
*if inconsistency in description of deed AND # physical acres –> physical acres takes precedence over quantity indicated in the deed
Conveyance by Will
Valid so long as there is:
- Donative intent;
- Delivery;
- Acceptance
Ademption
If property specifically devised in will, but T longer ones it at time of death then GIFT FAILS
Lapse/Anti Lapse
Look for these statutes; when beneficiary of gift in a will dies before the testator
If anti-lapse statute –> can pass to beneficiaries descendants if he and testator were related (CL rule)
If not related, can only pass to beneficiaries descendants if Modern Law jurisdiction
General Warranty Deed
Covenants against any title defects created by the grantor/prior title holders
All six covenants
Special Warranty Deed
Covenants against title defects created by the grantor
Quitclaim Deed
No covenants; transfers whatever interest grantor has at time
Present covenants = breached at time of conveyance
- covenant of seisin: grantor owns estate
- covenant of right to convey: grantor has power to transfer
- covenant against encumbrances: no servitudes/liens on land
- Majority rule: present covenants don’t run with land and can’t be enforced by remote grantees
- Minority rule: remote grantee can sue on present covenants unless grantee had notice. If no notice –> may be entitled to damages
Future covenants = not breached until grantee is in possession
- Covenant of quiet enjoyment: grantor promises grantee will not be disturbed in possession by a third party’s lawful claim of title
- Covenant of warranty: grantor promises to defend against reasonable claims of title by third party and to compensate grantee for any loss sustained by claim of superior title
- Covenant for further assurances: grantor promises to do whatever is needed to perfect grantee’s title if later turns out to be imperfect
Joint Tenancy
Two or more co-tenants with right of survivorship (T-TIP) needs to be expressly created “right of survivorship”
Time: at the same time
Title: by the same title
I: Identical, equal interests
P: Rights to possess the whole
*severance terminates and tenancy in common remains
Tenants by the Entirety
Two spouses with right of survivorship (only way its created)
- created expressly or presumed in some states by a grant to spouses, severed by divorce
Tenants in common
Two or more co-tenants; no right of survivorship
- Default co-tenancy if not specified
- If other tenancies severed; this is presumptively created
Tenancy in Common
Right to Rents/Profits
- Co-tenant in exclusive possession not liable to other co-tenant for rent, unless ouster or agreement otherwise
- If there are net profits from exploitation of land –> must share profits w/ co-tenant
- Co-tenant who leases all or part of the premises to third party –> should provide fair share of rental income to co-tenant
Bona Fide Purchaser
A purchaser who paid valuable consideration AND takes without notice of the prior conveyance
- cannot be one who received by gift, will, or inheritance
- BFP’s not protected against interests arising out of operation of law; adverse possession
Actual Notice
Literal knowledge
Inquiry Notice
Buyer on inquiry notice of whatever an examination of Blackacre would have revealed
Includes when a recorded instrument makes reference to unrecorded transaction
Record Notice
Buyer on record notice of deeds that are properly recorded within chain of title
Race Notice Jurisdiction
“FIRST” & “NOTICE”
No notice AND must record first to prevail
“Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser fro value, without notice thereof, whose conveyance is first recorded.”
Shelter Rule
Transferees who take from a BFP will prevail against any interest the BFP would have prevailed against
Steps into shoes of BFP
Notice Jurisdiction
Last BFP to enter wins, regardless of who recorded first
“NOTICE”
“A conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without NOTICE thereof, unless the conveyance is recorded.”
Race-Notice Jurisdiction
No notice AND first to record WINS!
“FIRST & NOTICE”
“Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without NOTICE thereof, whose conveyance is FIRST recorded.”
Wild Deeds
Do not give record notice because not in chain of title
Can give
Mortgage
Agreement that if mortgagor quits paying, the land can be sold to mortgagee (lender)
Lien Theory Majority
Joint tenants execution of mortgage does NOT sever joint tenancy
Mortgagee holds security interest only
Title Theory (minority)
encumbrance by lien severs the joint tenancy to encumbered share; basically like transferring title to creditor
“Assuming” mortgage
Grantee who agrees to assume mortgage can become primarily liable to pay mortgage loan
If only “subject to” not liable unless it indicates there is an express assumption
Foreclosure
After default, the property may be sold to satisfy the debt.
- Does not affect senior interests
- Terminates junior interests
- Junior interests entitled to any surplus remaining after the foreclosing mortgage is satisfied
- Mortgagor may redeem the land by paying the amount due - If there is a deficiency - mortgagee can sue mortgagor if foreclosure sale proceeds do not satisfy mortgage debt
Deed of trust
Similar to mortgage, but third party trustee forecloses
Installment land K
Seller retains deed until buyer pays in full
Absolute Deed
Treated as an equitable mortgage when given for a debt
Sale-leaseback
Court may determine this was a disguised mortgage
Variance
Permission to depart from zoning restriction
Proponent of variance must show:
1. Undue hardship AND
2. Granting variance will have diminution to neighboring property values
Condo
Each owner owns interior of individual condo in fee simple; plus undivided interest in exterior and common elements as tenants in common
Lateral Support
Ownership includes right to have land supported in natural state by adjoining land
- Landowner strictly liable if their excavation causes adjacent land to subside
- If land is improved with buildings –> excavator will be liable only if negligent
- strict liability will apply to D’s excavator if: because of D’s actions, the P’s improved land would have collapsed even in natural state
Watercourse Doctrine (streams/lakes/rivers)
- Riparian = water belongs to those who own the land bordering the watercourse and can use in connection with that parcel
- Reasonable Use Theory: all riparians share the right of “Reasonable use” of the water
- Prior Appropriation Doctrine: one can acquire the right to use water simply by being the first in right to do so
Groundwater Doctrines
- Absolute ownership: owner of overlying land can take all the water they wish
- Reasonable use: exporting only allowed if it doesn’t harm other owners who have rights in acquifier
- Correlative Rights doctrine: owners own as joint tenants and each allowed a reasonable use
- Priority of use is determinative
Reinstatement -
Surface owner may pump groundwater unless:
- unreasonably harms neighboring landowners;
- exceeds the pumper’s reasonable share
- directly and substantially affects surface waters and unreasonably harms surface water users
Indefeasible interests
Those not subject to early termination
- Fee simple absolute
“To A” “To A and his heirs” - Life Estate
“To A for Life” “To A for the life of B”
Defeasible Interests
Allows fee simple/life estate to be terminated if a stated event occurs:
- Determinable - “for SO LONG AS,” “until” “while” “during” = automatically reverts to grantor
- Subject to condition subsequent:
- “BUT IF” “upon condition that” “provided that”
- subject to grantors right of entry - Subject to an executory interest
“to A for so long as… and if not …. to B” // “To A, but if … to B”
- divests to someone other than grantor
Future Possessory Interests
- Interests Retained by Grantor
- Reversion: grantor transfers a shorter estate than she owns
- grantor with fee simple transfers a life estate - Possibility of Reverter: when grantor transfers a determinable estate
- Right of entry/power of termination: reserved on the grant of an estate subject to condition subsequent
Future Possessory Interests - Created in a Transferee
- Executory Interests - cut short the prior estate
- Remainders: possessory only on the natural termination of the prior estate (can be vested or contingent)
- vested if made in ascertained person with no condition precedent
- contingent otherwise - Class gifts - remainders in class are contingent if no member of class exists; vested if all members exist; subject to open if more members might come to exist
Rule Against Perpetuitiies
- Any future interest that is not certain to vest or fail within a life in being plus 21 years is void
- Applies to: contingent remainders, executory interest, class gift, options and rights of first refusal, and powers of appointment
- Does not apply to vested interests, grantor’s reversionary interest, or gifts between charities
Cases that always violate RAP
- Executory interest followed by defeasible fee (executory interest stricken)
- Gift to an open class conditioned on members surviving to an age beyond 21 - entire class gift is stricken
- Remainder to A’s children living at his widow’s death (unborn widow problem)
- Gift conditioned on an administrative contingency
- options/rights of first refusal that extend to holder’s heirs and assigns
*Common law - woman is presumed capable of bearing children
Departures from Common Law RAP
- Wait and see statutes; determined by actual future events
- Uniform Statutory RAP: 90 year vesting period
- Cy Pres: invalid interests reformed to match grantor’s intent
Implied Warranty of Habitability
Found in ALL residential leases and guarantees the premises will be fit for human habitation
Basic Living Condition Requirements:
- Plumbing
- Heat in Winter
- Electricity
- Running Water
Tenants Options When Implied Warranty of Habitability is Breached
MR3
- Move out and terminate lease
- Repair/deduct costs from future rent
- Reduce rent/withhold rent until court determines fair rental value
- Remain in possession (pay full rent + seek money damages)
If co-tenant is in exclusive possession, can they acquire title by adverse possession?
NO; because no hostility.
If ouster occurs, then the co-tenant could meet all elements of adverse possession.
Voluntary Waste
Willful destruction/overt damage
Permissive Waste
Waste that neglects/harms premises
Ameliorative Waste
Unilateral change that increases value of property
Tenancy for Years
Lease for fixed, determined period of time
- knows end date from start and ends automatically at termination
- if greater than 1 year = subject to SOF
Periodic Tenancy
Lease which continues for successive intervals until either the LL or tenant gives proper notice of termination (week to week/month to month)
Terminates: at least equal to length of period itself
*often Bar will want at least 1 Month
Tenancy at Will
Tenancy of no fixed duration; terminable at will of either LL / Tenant as long as L or T desires
- created by express agreement that the lease can be terminated at any time
- termination: requires notice AND reasonable time
Tenancy at Sufferance
Created when tenant wrongfully holds over (remains in possession past the expiration of the lease)
- Lasts until the LL evicts or elects to hold tenant in new tenancy
Hold over Doctrine
If tenant continues in possession after right to possession was ended, LL may:
- Evict the tenant OR;
- Bind the tenant to a new periodic tenancy
Commercial Tenants Holdover Doctrine Rule
If lease was more than 1 year –> held to new year to year lease
If original term of lease was less than 1 year –> new tenancy is month to month
*If prior to lease expiration, tenant receives notification of rent increase; they have to pay the new amount.
Tenant’s Duty to Repair When Lease Silent
- Maintain premises
- Make routine repairs
- Not responsible for ordinary wear/tear
- Can’t commit waste
- exception for waste: if long term tenant, entitled to ameliorative waste if change reflects changes in the neighborhood
Tenant’s Duty to Repair with Express Covenant in Lease
- Maintain in good repair/condition
- T can terminate if premises destroyed without T’s fault
- Frequently excludes ordinary wear and tear
Tenant Breaches Duty to Pay Rent
If breaches and stays in possession:
1. LL can evict/continue relationship and sue for rent
2. If LL evicts, entitled to rent until T vacates
3. Cannot engage in self-help
If breaches and out of possession = SIR:
1. Surrender; end lease
2. Ignore abandonment; hold T liable
3. Relet the premises
*majority require trying to relet
Tenants Duties if Condemnation Occurs
- If entire lease taken by eminent domain –> tenants liability for rent is extinguished –> lessee entitled to compensation.
- If taking is temporary/partial –> tenant NOT discharged from rent, but entitled to compensation
Implied Covenant of Quiet Enjoyment (LL Duty)
- Provides T right to use/enjoyment of the premises without interference from the LL or paramount title holder
- Arises by implication in every residential/commercial lease
- LL can breach through wrongful eviction OR constructive eviction
Wrongful Eviction
Actual eviction: LL/paramount title holder excludes T from entire leased premises –> terminates T’s obligation to pay
Partial eviction: T physically excluded from part of leased premises
1. If by LL –> relieves T from paying rent
2. If by paramount title holder –> apportioned; T liable for reasonable rental of portion he continues to possess
Constructive Eviction - LL’s breach of duty renders premises unsuitable for occupancy
Elements = SING
Substantial Interference: chronic/permanent problem due to L’s actions/failures
Notice: T must notify L of problem; L must fail to fix it
Goodbye: T must vacate within reasonable time after L fails to remediate
Retaliatory Eviction
LL may not terminate/penalize T in retaliation for T’s exercise of legal right
- States presume retaliatory move if LL acts within 90-180 days after T exercises rights
- LL must show valid, non-retaliatory reason to overcome
Civil Rights Act
bars racial/ethnic discrimination in sale/rental of property
Fair Housing Act
Protects tenants from discrimination based on race, color, religion, national origin, sex, disability, familial status
- includes false representation
- includes ads/marketing
- can’t refuse to negotiate, rent or sell house to make mortgage loan/financial assistance available
- must permit disabled tenant to make reasonable accommodations at their expense
What type of owner is exempted from FHA
- Owner occupied buildings with 4 or fewer units in which persons live independently of each other
- Single family homes sold/rented by an owner who owns no more than 3 single family homes
Title Insurance - Owner’s Policy
Protects only the person who owns the policy and does not run with the land to subsequent purchasers
Title Insurance - Lender’s Policy
- Follows any assignment of mortgage loan
- Ends when mortgage loan is paid off
Void Deed
Can be set aside regardless of property having passed to bona fide purchaser
- forged deeds
- deeds never delivered
- deeds obtained in fraud
Voidable Deeds
Can be set aside only if the property had not been conveyed to a bona fide purchaser
- duress
- undue influence
- mistake
