REAL PROPERTY

Restatement (First) of Property(1936): 9. Estate

The word estate means an interest in land which:
a) Is or may become possessory; and
b) Is ownership measured in terms of duration

POSSESSION
Pierson v. Post
1. Property in wild animals is only acquired by occupancy, and pursuit alone does not constitute occupancy or vest any right in
the pursuer.
a. Occupancy: physical dominion and control over an object, with an intent to exclude others
2. Mortal wounding may be enough to sustain property interest (also called constructive possession)
a. Mere pursuit does not constitute occupancy
3. A trespasser who kills a wild animal on the land of another forfeits their title in favor of the landowner.
4. Public policy considerations for a rule of capture:
a. Encourages competition to rid land of fox
b. If the rule was just pursuit, its difficult to apply (more than one may be in pursuit)
c. However, these considerations may go against social custom and norms of typical hunting interactions

I. Adverse Possession
A person's trespassery combined with acquiescence over time makes them the true owner.
All states have statutes of limitation that eventually bar the owner of property from suing to recover possession
from the one who has wrongfully entered the property.
Suits to recover are called ejectment suits. If the owner does not act within the limitation, the wrongful
effectively gets the title to the land.
Remember COAH(E)
1. Continuous
A. AP must remain continuous throughout the statutory period.
i. This is not to say that the possessor may not take a vacation. Rather, there must not be any substantial
interruption of the possession. Jarvis
B. The adverse possessor must exercise control over the property in the way customarily pursued by the owners
of that type of property
i. Interruption by owner/ Seasonal Use:
a. if the owner re-enters the property in order to regain possession, this is an interruption of AP.
b. Adverse possessor may take vacation/use seasonally if that is the only kind of use most owners of
similar property would make
1. Example: a beach house is utilized three months a year, only same would be expected of an adverse possessor
1. intermittent activities that are not the sort of activities done only by the true owners are generally not enough for
continuous possession to be fulfilled... ie if you pheasant hunt once a year
C. Tacking
i. Possession by two adverse possessors, one after the other, may be tacked if the two are in privity with
each other.. Ie the period of ownerships can be added together for purposes of meeting the statutory
period.
ii. Must be in privity.
a. Privity is satisfied by some continuity of interest (non-hostile link) between the possessors, such as
descent, contract, deed, will, or intentional transfer (ie inter vivos gift, sale, bequeath)
iii. Tacking is NOT allowed when there has been an ouster or adverse possession of previous adverse
possessor
iv. Also on owner's side..so an owner's time to sue can be used up by possession that was adverse to the prior
owner
2. Open and Notorious
A. Acts of possession are deemed sufficiently open and notorious if they are conducted in a manner which
would put a person of ordinary prudence on notice of the claim.
i. Usually means that he possessor's use of the land must be similar to that which a typical owner of similar
property would make..
ii. Examples: Building a fence, harvesting crops, clearing the land, building a driveway
3. Actual Possession
A. The ultimate fact to be proved in an AP case is that the claimant has acted toward the land in question as
would an average owner, taking properly into account the geophysical nature of the land
i. Designed to put the TO on notice
ii. Possessor must take an actual, physical entry onto the premises to start appropriate statute of limitations
iii. What constitutes actual possession depends on the nature and location of the property, the use of the
property, and the facts of the case.
4. Hostile
A. The possessor does not have the true owner's permission to be on the land
i. Permission always defeats AP. If possession starts permissively, the chance for it to become
hostile/adverse must be communicated.
ii. Ie the possessor could have a LE or a FSD, and then continue to hold onto the land after the end of the
present interest.
B. Helpful to apply 3 tests:
i. Objective Test(Connecticut Rule) MAJORITY
a. The state of mind of the possessor does not matter. His actions must look like he is claiming ownership.
ii. Good Faith Test (Carpenter v. Ruperto)
a. a minority of courts impose the additional requirement for the possessor to believe, in good faith, that he has
title to the property. He must have bona fides. So, in this case a squatter never gets the title
iii. Bad Faith Test(Maine Rule)
a. a minority of the courts require knowledge that the land is not his and an intention to adversely possess it
anyways
C. Boundary Disputes
i. Most courts hold that one who possesses an adjoining landowner's land, believing that he only possessed
up to the boundary line of his own land, meets the requirements of Hostile possession
5. Exclusive (this one is self-evident)
A. Ordinarily, the exclusivity requirement is not met if the true owner was concurrently in possession of the
property with the adverse possessor
i. The adverse claimant's possession cannot be shared with the TO
a. Possession can still be exclusive even if others used the property during the possessor's time of
possession, if the use can just be characterized as exclusive (Peters v. Girl Scouts)
ii. Two adverse possessors who possess property jointly may acquire joint ownership rights as co-owners.
6. Length of time established by Statute of Limitations
A. The statute begins to run when the claimant goes adversely into possession of the TO's land.
B. Statutory periods vary widely from state to state. Usually 15 years or longer. 15 in VA.
i. Disabilities: If the TO/title holder is under a disability, in nearly all states he is given longer statute of
limitation to bring an ejectment action(ie infancy, insanity, incompetence) 25 in VA
a. Statute begins running only after disability ends. IE when a minor reaches 21
b. Always run this possibility. However, if the statute for disability purposes gives less time to defend
the action than the non-disability time, it reverts back to the original.
c. Don't tack disabilities
7. Miscellaneous
A. Co-tenants-- Ouster Doctrine
i. Requires the tenant in possession to oust the other co-tenant in order to adversely possess and claim
ownership.
ii. Must prove they intend to exclude their co-tenant.
a. Exclusivity
b. Notice
B. Innocent Improver Doctrine- build wholly on property of another
i. TO has to sell the land on which the improvements were made to the adverse possessor.
ii. The TO has to award compensation to the improver to prevent unjust enrichment, but gets to keep the
land.
C. Payment of taxes is not an element necessary for Ap in most jurisdictions.
D. Law protects prior possessor(even if not true owner)
E. No adverse possession of chattelsonly real property
F. The burden is on the adverse possessor to demonstrate that he has met the elements to divest the TO.
 G. Justifications for Adverse Possession
i. Punishing TO's for not using land(sleepers)
ii. Awarding possessors for using land (laborers)
iii. Encourages productive and efficient use of land
H. Normally, the possessor acquires title only to the portion of the property actually occupied.
I. If there is a conflict between two person's whose interests are solely possessory, the general rule is that the 1st
possessor has priority over the subsequent possessors.

8. Color of Title and Constructive Adverse Possession,

A. A written instrument (ie deed) that is defective or invalid for some reason
B. The exception to the rule that the possessor acquires title only to the portion of the property actually
occupied.
C. By this doctrine, one who enters under CoT will gain title to the entire area described in the CoT instrument
even if he actually possesses only a portion.
D. BUT, if the TO is in possession at all, whether actual or constructive, the adverse possessor can only acquire
that which the adverse possessor is actually possessing..
E. NO FRAUD or defect with intent
F. General Rules
i. Actual possession trumps constructive possession
ii. Constructive possession by a TO trumps constructive possession by an adverse possessor
iii. The elements of constructive possession of real property by a TO:
a. actual possession of part of the land owned by the TO
iv. The elements of Constructive adverse possession:
a. the actual possession of part of the land covered by the defective writing and
b. CoT to the whole
c. If you have these two, you can establish AP by constructive possession.

9. Tapscott v. Cobbs
A. Importance of prior possession, even when you cant establish that you are the true owner
B. Neither of the two parties are the true owner of the land. When a dispute arises over possession of the land, the land will
be given to the first possessor. The suit is not about who has title, but about who has a right of possession, so the later
possessor cannot defend his claim by showing that title belongs to a third person.
C. The system values and protects POSSESSION

10. Jarvis v. Gillespie (AP of little wooded area used to store logs, horses, etc.)
A. A parcel of public property was conveyed to a private individual (Gillespie) for use. Jarvis adversely possessed the
parcel by meeting each element of adverse possession.
B. A claimants use of land is suffice to satisfy the requirements for acquiring the land through adverse possession if his use
is consistent with that of an average owner in light of the nature of the land.
 Present Estates and Future Interests

Freehold Estates in Land

Type
Fee Simple Absolute
Fee Simple Determinable
Words to Create
to A and his heir
Under modern law to A may
be enough
so long as While During
To A until..."
"To A while..."
(Language providing that upon
the happening of a stated event,
the land is to revert to the
grantor.)
To Know Future Interest in Future Interest in
Grantor Third Person
The best, what one normally None None
thinks of as to own
devisable, defeasible, freely
alienable. No limitation in
the instrument of
conveyance. Sum of the
quantities of all existing
estates in a piece of
land=fee simple absolute
Upon condition occurring Possibility of Reverter Executory Interests
next estate interrupts
automatically. AP possible (Not alienable, not
concern. Subject to rules devisable, IS
against restraint on descendible)
alienationunreasonable
restraints invalid.

Fee Simple subject to
condition subsequent
"To A, but if X event happens, Upon condition occurring
grantor reserves the right next estate may take estate,
to reenter and retake." does not automatically
provided that on condition interrupt. Doctrine of
(Grantor must carve out right of Laches possible if next
reentry). estate waits too long to
reclaim.
Right of (re) entry for Executory Interests
condition broken / power
of termination
(Not alienable, not
devisable, IS
descendible)

Fee Tail and the heirs of his Body Lasts only as long as there Reversion Remainders
are lineal blood descendants
of grantee

Fee Simple Subject to
Executory Limitation (FSSEI)
Life Estate
To A, but if X event occurs,
then to B.
For Life
to A until he dies
To A for the life of B.
pretty much a FSSCS with a None Executory Interests
shifting EI. If condition
broken, it does not revert
back to O, the estate is
automatically forfeited in a
3rd party.
Measured by life of Reversion Remainders
transferee or by some other
life
(pur autre vie).

Terms of Art
Law of Merger: reassembly of all estates by transfer to the same person once again causes them to collapse into a FSA
Inter vivos: ie Convey by deed
Testamentary: ie legal or devise
Devisable (capable of passing by will),
Descendible (through intestate succession, ie passes to ones heirs if one dies intestate)
Alienable (can be transferred during ones lifetime inter vivos)
The Fee Simple Absolute(FSA)
1. The greatest estate in land.
a. Absolute Ownership
b. Unlimited in Duration
i. No event can occur that will terminate the duration of the estate *because of any limitation of
condition set forth in the instrument of conveyance*
2. Magic Words To A and his heirs
3. Freely devisable, freely descendible, and freely alienable
4. No present or future estate follows the FSA-- it is infinite

The Life Estate(LE)

1. Info
a. Lasts for the life of the present holder and is followed either by a reversion in the grantor (O) or an
interest in a third party through a remainder or an executory interest
2. Creation
a. Look for the language To A for life, to A until he dies
3. Duration
a. Duration is for the life or lives of persons indicated as the measuring life or lives.
b. If the measuring life is not the grantee, but someone else its called a life estate pur autre vie
i. To A for the life of B
4. Transferability
a. LEs are alienable.
b. Normally not descendible or devisable
i. Exception: if you have a life estate per autre vie, you can pass present right of possession that is
good until the third party (LE holder) dies
5. Future Interests
a. 3rd parties: remainders or vested remainder then EI
b. Grantor: reversion
6. Doctrine of Waste
a. life tenant must not do anything that would hurt the future interest holders property through
unreasonably devaluing the property in some way either by affirmatively altering the property to decrease
the value or permissively letting the property fall into disrepair
7. Life Tenant Duties
a. Right to Possess
b. Right to collect rent/profits, lease/sell/mortgage
i. Must pay taxes on income or rental value of land
c. Duty not to commit waste

Restraints on Alienation
1. A restriction on transfer of property
2. Common places to see them
a. Inter vivos grants of an estate smaller than a FSA
b. Devise of an estate smaller than a FSA
c. Co-tenant agreement
d. Covenants that run with land
3. RULES
a. Absolute Restraints are generally VOID (Restraints on the alienation of a Fee)
1. Ex: O conveys blackacre to A and his heirs, but no conveyance by A to any third party shall be valid. Since this restricts alienation of a fee
simple, the restriction will be void, and A may convey to whomever he wants.

b. Use restrictions will generally be upheld (plus, think covenants)

1. Ex: O conveys to A and his heirs, provided that the property not be used for business purposes. Will be upheld.

c. Partial restraint is VALID if it is for:

1. a limited time; and
2. a reasonable purpose
1. A restraint is unreasonable if it is capricious, malicious, unlimited in duration, affects a large number
of potential interests, and serves no legitimate interest of the grantor.
 d. A LE may be subjected to restraints on alienation.
1. Ex: O conveys to A for life, but A shall have no right to convey his interest; then to B and his heirs. The restraint upon A's LE will generally be
upheld.

e. Other Valid Restraints

1. Forfeiture and promissory restraints on LE
2. Forfeiture and restraint on transferability of future interests
3. Restrictions on transferability of leasehold

Alby v. Banc One Financial pg. 289. (class discussion around 9/16) FSD and restraint; forfeiture always inherent in FSD
- Outlined Reasonableness Test of Restraint on Alienationpg. 292
o Utility of Purpose v. Injurious Consequences (Restatement Third of Property 3.4, at 440)
a. Scope
b. Duration
c. Legitimate interest-purpose of restraint and whether it is supported by consideration.
FS Defeasibles:
A defeasible estate is created when a grantor transfers land conditionally. Upon the happening of the event or condition
stated by the grantor, the transfer may be subject to defeasance.

Fee Simple Determinable(FSD)

1. Info & Duration
a. Ends automatically upon the happening of a stated event and transfers possession back to the grantor or
her heirs or devisees
2. Creation
a. Look for the language To A so long as
i. Example: To A so long as used for school purposes
b. Must see clear, durational language (Until, during, during such time as, so long as) Means the clock
is ticking
3. Transferability: FSD is Alienable, Devisable, and Descendible.
4. Future Interests
a. EVERY FSD is followed by the Possibility of Reverter in the grantor (O)
b. 3rd parties; EIs
5. Operation
a. If the condition is violated, forfeiture is automatic
b. IF the condition is breached and it doesnt revert back to the grantor but instead the future interest
belongs to a third party, then the third party has a shifting executory interest To A so long as used for
school purposes, then to B.
c. Courts always presume FSD
6. Forfeiture always inherent

Fee Simple Subject to Condition Subsequent(FSSCS)

1. Info & Duration
a. Allows the grantor to reclaim the property upon occurrence of the condition but does not make a transfer
of ownership automatic
i. Instead, the grantor must claim a right of entry or a power of termination
2. Creation
a. Through language that is usually accompanied by an explicit right of entry
i. But if the property is ever used for anything other than school purposes, O shall have a right of
entry for condition broken
ii. But if, on condition that, provided that
3. Transferability: FSSSC is Alienable, Devisable, and Descendible
4. Future Interests
a. Grantor: right of entry (aka power of termination), grantor must ACT to retake
b. 3rd parties: EIs
5. Operation
a. Only where there is a demand to leave does the owner of the right of entry have the right to possession
its not automatic
b. Typically preferable to FSD if language is ambiguous.

Fee Simple Subject to Executory Interest (FSSEI)

1. Info & Duration
a. A present Fee that is limited by specific durational OR conditional language
b. Automatically terminates upon happening of stated event, and
c. Title passes to 3rd party NOT the grantor (usually shifting EI)
2. Creation
a. through language that automatically forfeits interest to 3rd party upon occurrence of condition or event
b. To A, but if X event occurs, then to B
i. A=FSSEI; B= shifting EI
3. Transferability: Alienable, Devisable, Descendible
Fee Simple Subject to Executory Limitation is pretty much a FSSCS with a shifting EI. If condition broken, it does not revert back to O, the estate is automatically forfeited in a 3rd party.
The distinction between FSD and FSCS has been obliterated in some statutes. BUT
What it used to depend on is whether the grantors future interests are transferable/ Statute of Limitations. Now, they both transferable are but:
o FSD: Possibility of Reverter
Possibility of Reverter goes back to grantor automatically; then becomes FSA in O
So the SoL begins as soon as the defeasible event occurs
So increase the risk that the TO will fail to assert its right to possession of the property within the statute of limitation
period and thereby forfeit its claim to ownership due to an AP by the FSD holder.
o FSCS: right of entry; but not the obligation to re enter(really just the right to title)
Theoretically, SoL should not begin until grantor attempts to gain possession but is denied.
So theoretically lowers risk of forfeiture
However, Many jurisdictions say SoL starts at the time the defeasible event occurs.

Fee Tail
1. Purpose was to keep the land within a family bloodline
2. Created through the language To A and the heirs of his or her body
3. This would give a LE in the property to A, with the remainder going to his children for life, then to their children for life, etc., until the line
ran out and the property would revert to the grantor and his heirs.
4. Doesnt really come up anymore most states say that if you create a fee tail, you really create a FSA
II. Future Interests
*Every present estate except the fee simple absolute is followed by a future interest*

A. Future Interests Capable of Creation in the Grantor (O)

1. Possibility of Reverter
i. Follows only the FSD
ii. Interest retained by grantor, will automatically revert to him
2. Right of Entry for Condition Broken
i. Follows the Fee Simple Subject to Condition Subsequent(FSCS)
a. Ex: O conveys blackacre to A for residential purposes, and if it ever ceases to be so used, then the grantor
may re enter and retake possession. O retains the right of re-entry.
ii. IN order to become effective:
a. Grantor/Transferor must elect to exercise the right
b. Grantor/Transferor must do some AFFIRMATIVE ACT to terminate estate in transferee
iii. Aka power of termination but CNB hates it, and most everyone does
3. Reversion
i. Can ONLY follow a LE, fee tail, or leasehold estate (tenancy)
ii. The grantors future interest that stands ready to become a present interest when a preceding life estate
terminates other than by a condition subsequent
iii. A reversion is alienable, devisable, and descendible.

B. Future Interests That Can Reside in Third Party (Transferees)

Remainders carved out of the fee simple
i. A future interest created in a grantee that becomes possessory at the natural conclusion of a preceding LE or
term of years
a. Not necessary for a future interest to be classified as a remainder that it must become possessory upon
termination of preceding estate.
ii. Remainders never follow a defeasible fee
iii. The remainder waits patiently for the preceding estate to naturally come to an end
iv. Must be language expressly granting interest in third party; in same instrument that creates both present and
F/I
v. No magic words, but very typically the word remainder is used
iv. They are alienable, devisable, and descendible.

A. Contingent Remainder
a. Always start HERE by testing whether the remainder is contingent. A remainder will be contingent if:
1. Created in an unascertained person (usually unborn) AND/OR
To A for life, then to Bs first child
B has no children, so this is a contingent remainder (Its a remainder in a taker that is not yet
born)
2. Subject to Express AND Unmet Condition Precedent
To A for life, then if B graduates college, to B
B is still in high school. Because B hasnt yet graduated college, B has a contingent
remainder
It is contingent because it is subject to a yet unsatisfied condition precedent
The interest is subject to an expressed, unmet, condition precedent = prerequisite
To A with remainder in heirs of B
Two interesting things here. 1. There is an unascertained person(heirs) 2. There is a condition
precedent. Remembereven if B did have children, they arent heirs until he is dead.

B. Vested Remainder (favored by the law as seen in Re Houston)

a. If the remainder is not contingent, then its vested. Vested at moment it is created.
b. Created in 1) a known taker and 2) not subject to a condition precedent, ie it is certain to become possessory
To A for life, then to B
B has a vested remainder he is alive and there are no strings attached as prerequisites to Bs
taking
 c. Three kinds of vested remainders exist:
1. Indefeasibly Vested Remainder
a. If you are a remainder this is the kind you want
b. To A for life, then to B
B doesnt have to do anything to take, so its indefeasibly vested
Known and not subject to any conditions
c. The holder of this remainder is certain to acquire an estate in the future with no conditions
attached
2. Vested Remainder Subject to Complete Divestment
a. Remainderman exists (we arent waiting for him to be born or ascertained)
b. His taking is not subject to any condition precedent/prerequisite
c. Subject to an occurrence/nonoccurrence of a condition subsequent
d. Some eventuality exists that if it manifests, will divest the remainder of his interest
e. Important to distinguish VRSCD from CRs.
a. Once vested, a remainder is no longer subject to RAP or to Destructibility Doctrine
b. If one clause creates the remainder and a separate subsequent clause takes the
remainder away then it is VRSCD
c. If the remainder cannot become immediately possessory because some express
condition precedent is yet to occur or unmet, then it is a CR.
f. To A for life, remainder to B, but if B dies under 25, then to C
If A is alive and B is only 20, then B has a vested remainder subject to complete divestment
It means if B dies under 25, Bs estate loses everything and C takes
B must LIVE to the age of 25 for his estate to retain an interest
O has a reversion simply because its possible that neither C nor Cs heirs will exist if and
when the condition is breached
3. Vested Remainder Subject to Open (Class Gift)
a. RAP applies
b. The remainder is vested in a group of takers whose number, identity, and share of interest is
to be determined in the future
c. Each class members share is subject to partial diminution because additional takers not yet
ascertained can still qualify as class members
d. To A for life then to Bs children
A is alive and B has two children, C and D
Their share might be decreased if B has another child
e. The class remains open if its possible for others to enter (B can still have kids for as long as
he is alive)
f. Must be at least 1 living member of the class to be vested

Note on Class Gift Closing Rules

The class closes under two scenarios:
1. Physiologically
a. When person who is capable of giving birth to or adopting class members dies
2. Rule of Convenience
a. Basically, closes the class when any member is entitled to immediate possession
i. When preceding possessory estate has terminated (so when A dies) and
ii. there is no condition precedent outstanding(unmet) regarding the person who can
make a demand
PLUS keep in mind
3. Outright Gift
a. Class closes at date of testators death
4. Postponed Gift
a. Class closes at a time fixed for distribution
5. Disposition subject to condition id reaching a given age
a. When preceding estate terminates; and
b. The first class member reaches a given age
C. REMEMBER:
 VR if the owner is an existing person and is ready and able to take possession whenever and however the
preceding estate ends/terminates.
CR if its owner is not ready and able to take possession whenever and however the preceding estate
terminates/ends.

Reversion in O

Two Part Test:

1. Unascertained Persons
Contingent 2. Express and Unmet Condition Precedent
Life Estate

Remainder in
a Third Party Types
1. Indefeasibly Vested
2. Vested Subject to Complete Divestment
Vested 3. Vested Subject to Open

Executory Interests. If future interest cannot move immediately to another, there is a gap, then executory interest!!
created in a transferee (third party), which is not a remainder and which can become possessory by either cutting
short some interest in another person (shifting) or in the grantor or his heirs (springing).
Not subject to doctrine of destructibility
Subject to RAP
In most jurisdictions, they are freely alienable, devisable, and descendible.
In short: FI in third party that cuts short the previous vested interest before it would have naturally terminated..
NEVER IMMEDIATELY FOLLOWS LE--GAP OF TIME MUST EXIST
1. Shifting Executory Interest
a. Follows a defeasible fee and cuts short someone other than the grantor
b. To A and his heirs, but if B returns from Canada sometime next year, to B and his heirs.
i. B has a shifting executory interest in which he can come and interrupt As potentially limitless enjoyment
of the land
ii. A has a fee simple subject to Bs shifting executory interest
iii. This conveyance does not violate RAP because there is a one year limit on Bs interruption power
c. Its not a remainder because remainders never follow fee simples
2. Springing Executory Interest
a. Follows a defeasible fee and cuts short the grantor or his heirs
b. O conveys to A if and when he marries
i. A is unmarried. A has a springing executory interest
ii. O has a fee simple subject to As springing executory interest
iii. This conveyance does not violate RAP because we will know by the end of As life whether the condition
is met or not
c. O conveys to A when and if A marries B
i. If A marries B, divests O FS
d. O conveys to A for life, one year after As death to B
i. A has LE, O has reversion, B has springing
Remember, an EI cuts off but a remainder never cuts off a prior interest, it waits patiently for its natural
termination
To A for Life, remainder to B if she is 21.
o Bs interest is a CR
To A for Life, remainder one day after As death to B if she is 21.
o Theres a one-day reversion to the grantor in fee. B=executory interest.
To A for life, remainder to B if she is 21, if not to C
o Both CRs
To A for life, remainder to B, but if B fails to reach the age 21, remainder to C.
o B=VRSD; C=Executory interest because it takes effect by cutting short B

Rules of Thumb:
If the first remainder is a contingent remainder, the alternative will be CR too.
 If the first remainder is vested (or becomes vested). Then the alternative interest will be an executory interest.

Future Interests
Type How Created Alienable Descendible and Subject to Divests Prior Estate?
Inter Vivos? Devisable? Defeasance?

By operation of law ALWAYS ALWAYS YES, Following CR NEVER DIVESTS

Reversion ALIENABLE DESCENDIBLE and by EI Springing PRIOR ESTATE
-Fee Tail ALWAYS VESTED AND Use.
-Life Estate DEVISABLE.
ALWAYS IN FAVOR
OF GRANTOR

By implication of law CL: NOT NO.

Possibility of ALIENABLE when VARIES NEVER DIVESTS
Reverter ALWAYS unconnected with PRIOR ESTATE
--FSD CONTINGENT reversion ALWAYS
DESCENDIBLE
ALWAYS IN FAVOR TODAY: ALIENABLE
OF GRANTOR OR (with or without
SUCESSORS IN reversion)
INTEREST

By clear, express words CL: NOT NO

Right of Entry in deed or will ALIENABLE when VARIES ALWAYS DIVEST
--FSSCS unconnected with PRIOR ESTATE
ALWAYS reversion; ALWAYS
CONTINGENT DESCENDIBLE
TODAY: ALIENABLE
ALWAYS IN FAVOR IN SOME STATES
OF GRANTOR when connected with a
reversion

Vested By words of deed or will ALWAYS ALWAYS MAY BE SUBJECT NEVER DIVESTS
Remainder ALIENABLE DESCENDIBLE TO DEFEANSE PRIOR ESTATE
--Fee Tail ALWAYS VESTED AND EI PARTIAL OR
--LE DEVISABLE TOTAL SHIFTING
--Leasehold ALWAYS IN FAVOR USE.
OF GRANTEE

Contingent By words of deed or will NOT ALIENABLE DESCENDIBLE NO. NEVER DIVESTS
Remainder AT COMMON LAW; AND PRIOR ESTATE
--Fee Tail ALWAYS DEVISABLE
--LE CONTINGENT TODAY IT IS
--Leasehold ALIENABLE
ALWAYS IN FAVOR
OF GRANTEE
By words of deed or will
Executory TODAY ALIENABLE DESCENDIBLE NO.
Interests ALWAYS AND ALWAYS DIVESTS
--FSSCS CONTINGENT DEVISABLE PRIOR ESTATE
--FSD
--FSSEI ALWAYS IN FAVOR
OF GRANTEE
Destructibility of Contingent Remainders
1. If the preceding estate ends(usually LE) when the remainder is still contingent, then that contingent remainder is
forever destroyed.
2. A contingent remainder was destroyed if it was still contingent at the time the preceding estate ended
a. If a contingent remainder did not vest before, or at the time of, the termination of the preceding freehold estate, it
was destroyed, and the property reverted to the grantor
3. Overarching purpose of this rule was to promote free alienability of land
- Abolished in England in 1877, most of the states did too. The rule still survives in FL. Scholarly disagreement
whether it still applies in AR, NC, SC, TN, OR, PA
- Restatement (Third) of Property 25.5 says that the rule of destructibility is not recognized as part of American
law
- EXAMPLE:
o O: To A for life, remainder to B and his heirs if B attains the age of 21
At the time of conveyance, B is 18, so it is a CR.
o With Destructibility: if A dies next year, then Bs contingent remainder is destroyed, because he has not satisfied the express
condition precedent.
Bs interest is destroyed forever. So essentially only conveyance was LE to A
So O retained a reversion in FSA.
o Without Destructibility: if A dies next year, Bs CR is turned into an executory interest. And so upon As death, Os reversion
becomes possessory.
If O has died, it is his heirs. SO now either O or Os heirs now have a fee that is subject to Bs executory interest. SO
when B turns 21, that interest will kick in.

Merger Doctrine
1. Can be seen most frequently in Shelleys case and in Destructibility of Contingent Remainders.
2. Created to stop tax avoidance, so when A has FSA, his heirs have to pay taxes
3. Present interest and future vested interests merge if they belong in the same person.
a. O: A to life with remainder in B. A=LE; B=VR in FSA
i. Suppose B conveys VR to A, then A=LE & VR in FSA
b. Merger Kicks in so A= FSA.
4. Does NOT occur if the intervening interest is a vested estate.
a. O: A=LE; B=VR in LE; C=VR in FSA
i. C conveys to A; so A=LE & VR in FSA
b. SO Merger does NOT apply because there is an intervening VR in B
5. DOES occur if intervening interest is CR(because doctrine of destructibility kicks in too)
a. O: to A for life, then to B for life if B survives A, then remainder in FSA to C and her heirs.
i. A=LE; B=CR in LE; C=VR in FSA
ii. If C conveys to A, then A=LE & VR in FSA
1. There is an intervening interest: Bs CR in LE
iii. SO the Doctrine of Destructibility kicks in. (if it exists in juris)
1. Bs CR is destroyed by termination of preceding estate: As LE, because it will merge
into Cs VR in FSA.
iv. So Merger kicks in and A=FSA
6. So situation in which Merger occurs depends on whether or not the intervening estates, if there more than two, are
are VR or CR
a. If the intervening estate is VR, merger will NOT occur
b. If it is CR, the doctrine of Merger and the doctrine of Destructibility will COMBINE to destroy the
intervening CR and the merger will occur, so A will end up with a FSA.
Rule in Shelleys Case (Rule Against Remainders in Grantee's heir's)
1. If the grantor conveys a life estate to A and in the same instrument purports to create a remainder in As heirs, the
remainder is a FSA in A
2. Doctrine of Merger will normally apply in these situations
3. Best explained by example: If you see a conveyance that reads: From O to A for life, remainder to As heirs.
a. Shelleys Case applies to destroy the remainder to As heirs, and to in effect give it to A so that the
conveyance is rewritten this way:
i. To A for life, remainder to A and his heirs.
ii. In other words, remainder taken away from heirs and given to A in FSA.
iii. This means that A has 2 estates, LE and VR in FSA
4. This is all the rule does. All it does is take remainder away from As heirs and give it to A
a. But, as in the example above, Merger normally comes in, ie because A=LE & VR in FSA
i. So A=FSA
b. Notice it takes the double whammy: Shelleys Case and Merger to give A an FSA.
5. Why have this rule? Because the intent of the grantor was to give a life estate and give remainder to his heirs?
a. Why not give the whole estate to A? Tax avoidance
b. Prevent Deadhand control
c. So after merger and Shelleys rule, the heirs have to pay taxes
6. Requirements for applicability
a. A must get LE
b. A's heir must get a remainder in fee
i. Only heirs, words like issue and children do not apply
c. The same instrument must create the LE to A and A's heirs interests
d. Both estates must be either legal or equitable
7. If all requirements met
a. A gets both LE and Remainder in FSA
b. When merger doctrine applies, A gets FSA and A's heirs take nothing by virtue of the grant itself

Doctrine of Worthier Title (Rule Forbidding EI/Remainders to Grantor's Heirs)

1. Similar in purpose to Shelleys Case but Never confuse the two.
a. In Shelleys, the remainder is given to the heirs of the life tenant, As heirs
b. In Worthier title, the remainder is given to the grantors heirs.
2. A conveyance of a remainder or executory interest to the heirs of the grantor was void, and the grantor retained
the reversion.
3. Start with example: O to A for life, remainder to Os heirs.
a. Here, the Doctrine operates to destroy the remainder to Os heirs
b. So when it applies, the conveyance basically reads:
i. O to A for life.
ii. So when O dies, the reversion will pass to Os heirs and the inheritance and estate taxes will be
paid
4. Shelleys Rule has been abolished by most jurisdictions; Doctrine of Worthier Title is mixed bag
a. On the exam, be sure to be able to work with and without applying each rule.
5. The idea was to get around estate and inheritance.
a. Because Os heirs already owned the remainder and they would take a FSA upon As death without
having to pay any inheritance or estate taxes.
6. In US it has operated as more of a rule of construction, not as a rule of law. So it could give way to contrary
intent.
a. BUT The doctrine of worthier title is not recognized as part of Am. law, neither as rule of law nor as rule of
construction. An inter vivos transfer purporting to create a future interest in the transferors heirs or next of kin
creates just that, not a reversionary interest in the transferor Restatement 3rd 16.3
Notes
When property is distributed per capita among a group of persons, each person takes an equal share.

When property is distributed per stirpes, living descendants of a closer degree of relationship to the named ancestor take
to the exclusion of their own descendants and the ultimate takers of the property may not necessarily take equal shares.
The Rule Against Perpetuities RAP
1. Invalidates future interests unless they are certain to vest or fail to vest within the lifetime of someone who is
alive (in being) at the creation of the interest or no later than 21 years after her death
2. It allows land to be tied up, but not for any longer than the time span of some relevant life in being plus an
additional 21 year grace period
a. Vest or Fail: If there is ANY possibility that it will not be known whether the interest will vest or fail
within applicable period, then RAP has NOT been satisfied.
3. Only applies to:
a. CRs (contingent remainders);
b. EIs (executory interests); and
c. ~VRSOs (some vested remainders subject to open)
d. Rights of first refusal; options to purchase land in future, powers of appointment
4. It does NOT apply to indefeasibly vested remainders, or vested remainders subject to complete divestment
5. It does NOT apply to any future interest created in the grantor
a. Dont need to run RAP if its a possibility of reverter, right of entry, or reversion

Application of RAP for class gifts (VRSO).

Bad as to one, Bad as to all
a. If gift with respect to any afterborn child violates the rule, entire class gift is void..
Rule of convenience: can operate to prevent application of RAP
Exceptions: transfer of a specific $ amount to each class member; transfers to a subclass that vests at a
specific time

EXAMPLE: O conveys Blackacre to A for life and upon As death, to such of As children that attain age 25.
6. CNB uses the Create and Kill Approach
Step 1: Define all interests
LE in A, CR in As children (express, unmet condition precedent)
Step 2: Determine all future interests subject to the rule
CR in As children
Step 3: List all the possible validating lives (anyone that can affect the validity of the taker)
A, O (they were the only ones alive at the time of the conveyance)
Step 4: Create a new life
Say that A has another child, Z
Step 5: Kill off the validating lives
If A dies the same day that Z is born, he cannot take within the 21 year period (a remote failure to vest)
Moment the validating life dies, is when the 21 year post period starts
Step 6: Determine whether the future interest that are subject to RAP will be certain to fail or vest within 21 years of killing off the
validating life (#5)
Z would only be 21 if A died the day of his birth. Thus, it would be four years outside the RAP period before he
could take
SO THIS VIOLATES RAP
7. Barbri uses Know with Certainty Approach
Step 1: Determine which future interests have been created by the conveyance
As children have a CR
Step 2: Identify the conditions precedent to the vesting of that future interest
A must die leaving a child who is at least 25
Step 3: Find a Measuring Life
A qualifies as a measuring life because she must have a child. Her death is also relevant
because she has to die for the future interest to take
Step 4: Will we know with certainty within 21 years of the death of the measuring life (A) if the future
interest holder can or cannot take?
i. NO because we dont know whether A has a kid that will be 25
ii. We just dont know for sure today whether the condition precedent to any newborns taking will
be satisfied within 21 years of As death.
The RAP protects against any chance there is that the interest will vest outside the perpetuities period.

Many shifting executory interests will violate RAP (those that cut short someone other than the grantor)
An executory interest with no time limit on the time within which it must vest will violate RAP
- To A and his heirs so long as the land is used for farm purposes and if the land ceases to be so used, to B and
his heirs.
o BARBRI
1. B has a shifting executory interest he becomes the beneficiary of As misfortune
2. In order to trigger Bs entitlement, the land must cease to be used for farm purposes
3. A qualifies as the measuring life
4. We cant know with certainty within 21 years of As death whether B will take
SO THIS VIOLATES RAP
o CREATE AND KILL
1. A=FSD; O=Poss of Rev; B= shifting executory interest
2. B=shifting EI
3. A, O
4. Say that A has another child, Z
5. A dies, goes to Z and heirs
6. We have no way of knowing
SO THIS VIOLATES RAP

Common Pitfall cases

1. Age contingency beyond age 21 in an open class
a. To A for life, then to such of As children as live to attain the agae of 25.
i. A might have another child, currently living children could die before 25
2. Fertile Octogenarian- Women presumed capable of giving birth her entire life
3. Unborn Widow or Widower
a. To A for life, then to his widow for life, and on her death to As living descendants.
i. A might divorce and marry someone else who was not alive at the time the interest was created.
4. Administrative Contingency
a. Admission if will to probate- could take a long time
5. Options and Rights if First Refusal
a. Could exercise right or refusal remotely
6. When dealing with entities(corporations, etc) and no measuring lives are stated in the instrument of conveyance,
the perpetuities period is normally a flat 21 years.
7. A gift to a class that is conditioned on the members surviving the age beyond 21 violates common law RAP
a. Ex To A for life, then to such As children as live to attain the age of 30.

Reforms to the RAP Doctrine

1. Wait and See Approach
a. The validity of any future interest is determined on the basis of the facts at the conclusion of the
measuring life.
b. It eliminates the what if and the requirement to exist some horrible story about killing the entire family
to identify certainty
2. Cy Pres
a. A court can reform the given disposition in a way that most closely matches the grantors intent while still
complying with RAP
i. Rewrite the transaction to ensure it will vest
b. Pretty much permits a court to redirect trust established for one charitable purpose to another
Concurrent Estates
When more than one entity owns Blackacre at the same time

Tenancy in Common (default cotenancy)

1. A form of concurrent ownership in which two or more persons own the same property at the same time no right
of survivorship
2. Each tenant in common owns the right to possess the entire property
a. Undivided interest right to possess the whole
3. Tenants in common own separate interests, and each interest is descendible, devisable, and alienable
4. Tenants in common can own property in unequal percentages
a. (A could own 70%, B could own 30% - but both are entitled to the rights of the whole)
b. Proceeds from sale or rental of the property are divided according to fractional shares
5. TiC can come into ownership at different times
6. The only unity involved is possession
7. The presumption always favors the tenancy in common

Joint Tenancy with the Right of Survivorship (T-TIP)

1. Right of Survivorship
a. When one joint tenant dies, his share automatically goes to the surviving joint tenants
b. The last one standing gets to take it all
2. Joint tenants interest is alienable, but not devisable or descendible
a. Because once youre dead there is nothing to devise or inherit
3. 4 unities are required to create a JTRS: time, title, interest, possession (T-TIP)
a. Joint interests must take their interests at the same time;
b. By the same title (meaning the same instrument);
c. With identical interests (identical percentage and possession); and
d. With the right to posses the whole
4. You can sever a joint tenancy through:
a. Severing any T-TIP.
b. Sale
i. Inter vivos transfer by one JT- creates TiC; leases normally do not sever (Tenhet)
ii. But non-conveying JTs keep JTRS (so conveying guy would be TiC and others would be JTRS)
c. Mortgages? Special Rules:
i. Majority Rule: Lien Theory
1. The mortgage is treated as a lien and does not destroy the JT
ii. Minority Rule: Title Theory
1. The mortgage severs title and tenancy between the JTs and creditor is converted into a
TiC

5. JTRS Example
a. Suppose O conveys Blackacre to Phoebe, Ross and Monica as JTRS. Each owns 1/3 plus the right to enjoy the whole.
i. Phoebe then sells her interest to Chandler
ii. Phoebes unilateral to sell to Chandler severs the JTRS as to Phoebes interest Chandler isnt taking at the same time
or by the same title as Ross and Monica
1. Thus, Ross and Monica hold 2/3 as JT and Chandler holds 1/3 as their TiC
iii. Ross dies, leaving behind his heir Rachel
1. Monica takes Ross share because of the right of survivorship and now holds 2/3 with Chandler who holds
1/3 in a TiC
2. Rachel takes nothing because joint tenancy interests are not descendible
Rights and Obligations of ALL Cotenants (TiC & JTRS)
1. Possession: each cotenant has right to possess entire property
a. Think about Ouster/AP
2. Rent/Profits:
a. CT not entitled to rent or profits from other co-tenant if no ouster
b. CT entitled to share rents or profits from 3rd party.
3. Operating Expenses
a. CT can collect contribution from other CTs for operating expenses BUT NOT for repairs or
improvements
b. cotenant can generally collect expenses if he paid more than his share (taxes, mortgage payments) unless
he is the only one in physical possession of the property, and the value of his use is equal or outweighs
the overpayment.
4. Repairs and Improvements
a. Repairs: A cotenant does NOT have a right to be reimbursed by other co-tenants for repairs, even if
necessary. However, the majority rule is that contribution for necessary repairs can be compelled in
accounting or partition actions. In some jurisdictions, an action for contribution can be brought if notice
was given.
i. When a 3rd party is occupying the property, a cotenant who collects rent from the 3rd party can
subtract expenses for necessary repairs from the rent received before sharing the rent with other
cotenants.
b. Improvements: Except in actions for accounting partition, a cotenant does not have a right to
reimbursement for improvements

PartitionEquitable remedy for JTRS and TiC (not for TbE)

iv. Unilateral right in Equity
a. It is the universal right of any co-tenant to unilaterally file a lawsuit to partition the property
i. Partition in Kind
a. Court action for physical division of property if in the best interests of all
Court will not order PiK and will instead order a partition by sale if physical partition is:
--Not practical; or
--Not fair for all parties
i. Partition in Sale (Forced Sale)
a. Court can order a forced sale by judicial declaration which would require that the property be sold and its
proceeds divided up proportionately
i. Proceeds from a partition sale are divided among the co-tenants based on their ownership
interests
b. A large number of state resolve these issues through sale instead of partition in kind because of the
theoretical value of the land cant capture the sentimental value of the land
i. In response to this, a uniform act was promulgated
1. Uniform Partition of Heirs Property Act
a. Absolute right to partition
b. Developers have used this as an opportunity to divest land rich, cash poor heirs

Tenancy by the Entirety(T-TIP)

1. Only exists between married partners who enjoy the right of survivorship
2. No owning of share, both parties own the whole
3. Creditors of only one spouse cant reach this tenancy
a. Fiercely protected form of co-ownership
4. Neither tenant acting alone can defeat the right of survivorship by trying to sell to another
5. No unilateral severance is allowed
a. Can only be terminated by:
i. The death of either spouse (leaving the survivor sole owner of the fee)
ii. Divorce (in most states leaving the parties as tenants in common with no right of survivorship)
iii. Mutual agreement
iv. Execution by a joint creditor of BOTH the husband and wife (a creditor of just one cant execute)
6. Requires the four unities (in addition to marriage)
 ***Method of creation, duration, and termination are all-important when discerning what type of tenancy is present

CONCURRENT OWNERSHIP
Type of Tenancy Definition Creation Termination
Each T has a distinct, proportionate, To A and B May be terminated by partition
Tenancy in Common undivided interest in the property
(TIC) - There is no right of survivorship To A and B as joint tenants
- Interests are descendible and can be
conveyed by will/deed - Only unity required is possession

Each tenant has an undivided interest in
Joint Tenancy (JTRS) the whole estate, and the surviving co-
tenant has a right to the whole estate
To A and B as joint tenants with the right of
survivorship
* Without survivorship language, it may be
construed as TIC depending on jurisdiction
(FL)
Four Unities (JTs must take)
i. Time
ii. Title (same instrument or joint
adverse possession)
iii. Interest (equal undivided shares)
iv. Possession (right to possession of the
whole)
Right of survivorship may be
severed by:
a. A conveyance by one JT
b. Agreement of JTs
c. Murder of one co-tenant by
another
d. Simultaneous deaths of co-
tenants
* Converts the estate to TIC
JT can be terminated by partition
(voluntary or involuntary)

- Husband/wife and wife/husband To H and W Right of survivorship may be

Tenancy by the Entirety - Undivided interest in the whole To H and H severed by:
estate To W and W - Death
- Right of survivorship - Divorce
Some states presume a TbE in an joint - Mutual agreement
conveyance to H and W where the four unities - Execution by joint creditor
are present
Cannot be terminated by
involuntary partition

Cohabitants
Dower and curtesy were replaced by the tenancy in the entirety
The abolition of dower and curtesy in favor of spousal elective shares is largely explained by the fact that much wealth today is in the form
of personal rather than real property
Most states have elective shares, including Virginia
If there is a will and you dont like what you were left by your spouse, you can move to the elective share
Spouse can get one-half of the decedent spouses estate if there are surviving children or decedents
Spouse can get one-third if there are surviving children or grandchildren
 Leasehold Estates in Land
Type Words to Create To Know Future Interest in Grantor Future Interest in Third
Person
for__years Lease for a fixed period of time Reversion Remainders
Tenancy for years Executory interests
No notice is needed to terminate
at will Reversion Remainders
No fixed duration Executory interests
Tenancy at Will
Death terminates the tenancy at will
automatically

Can be terminated at any time by either

party, usually reasonable notice is
required.

Quite open ended

e.g. month to Continues in successive intervals Reversion Remainders

Periodic Tenancy month Executory interests
Has a fixed duration that auto renews

Notice is required to terminate

-proper=notice on 1st day of what is to be
last period
-termination effective on 1st day of last
period

Implied Warranties
Type Definition Duration Waivable?
Covenant of Power to Demise Power to Convey Entire Lease Technically Yes, but
really no
Covenant of Quiet Enjoyment Neither the landlord nor anyone claiming superior title will Entire lease Can contract around
substantially interfere with the tenants possession
Inception Not really for our
Right of Possession American: LL only obligated to provide legal possession. No duty purposes.
to provide actual possession.

English: LL Obligated to provide legal and physical possession

Constructive Eviction
Implied Warranty of
Habitability
(Residential Only)
Implied Warranty of
Suitability
Wrongful failure to perform an obligation. Substantial interference. Entire Lease Probably no
Landlord must be given the chance to cure. Tenant may then vacate
and must do so in a reasonable amount of time. If constructively
evicted then QE breachedif tenant doesnt want to vacate can still
claim breach of QE
Unsafe or unsanitary conditions may or may not be housing code Entire Lease No
violations (minor violations dont count) bare living requirements
No heat/ hot water , raw sewage in basement all examples of under VA Code 13.2 Part D
-can delegate responsibilities
breach. Cracks, minor water leaks, need for paint dont count under good faith
(Wade v Jobe) Must provide reasonable time to remedy
Entire lease Yes
Applies to commercial leases. Landlord will maintain the premises
in a manner suitable for the tenants intended commercial purpose

Breach of bolded can lead to CE, Do not have to vacate to prove violation.

Always start with the statute, NOT common law.

SPECIAL TOPIC: DISCRIMINATION
FHA
o Prevents discrimination in the sale, rental, and financing of dwelling.
o It also prohibits advertising that states a discriminatory preference.
o Who is covered?
Primary focus is on multi-family residential housing
o Who is not covered? There are two exemptions from the FHA:
1. Single-family housing that is sold or rented without a broker; and
2. Owner-occupied buildings with 4 or less units (ie boarding housings)
o Who is protected?
Race, color, religion, national origin, sex, disability, and familial status
Familial status means families that have children under 18 or someone is pregnant.
o Special exemptions for senior living
Disability provision mandates reasonable accommodations for the disabled
o What is prohibited?
Refusing to rent, sale, or finance a dwelling
Requiring different rents
Falsely denying that a unit is unavailable
Providing different services to facilities
Stating a discriminatory preference in advertisement (no exemptions)
o Intent: FHA allows for both intent (disparate treatment) and effect (disparate impact)
o Causation: prohibited behavior must be linked to protected basis
Leasehold Estates Landlord/Tenant
Typically, Upon creation of a leasehold estate, the T acquires a non-freehold estate and the landlord retains a reversion.
T holds a present interest of exclusive possession
LL has a reversion in a FSA

Lease for a term of years

Lease for a fixed period of time
o Period could be as short as a couple of months, it might even be a few weeks doesnt have to endure for
years
Created through the consent of both parties- Agreement by LL & T
Termination: No notice is needed to terminate
o Termination occurs automatically at end of term
o Terminate before term is over:
T surrenders lease;
T or LL commits a material breach of the lease
Term of years greater than one year must be in writing to be enforceable

Periodic Tenancy
Repetitive & ongoing- this lease continues in successive intervals (periods)
o It has a fixed duration that automatically renews until proper notice
Open-ended leasehold
Created by intent of parties
o Can be express or implied
Termination: Notice is required to terminate a periodic tenancy (most jurisdictions require written notice)
o Proper notice means the terminating party gives notice before the beginning of the intended last period.
Notice is effective on the last day of the period.
o Thus, a periodic month-to-month tenancy can be terminated by either party with a one-month notice of
termination. Notice that is given late is generally treated as effective for the subsequent period.
o Year to year periodic tenancy requires six months notice,

Tenancy at Will
No fixed duration it endures as long as the tenant and landlord desire
o May be terminated by either LL or T at any time, for any reason.
Can be created by express agreement or implication
Termination
o No notice required; can be terminated by LL or T (usually reasonable notice is required)
*but if agreement gives only T right to terminate, LL cannot
o Death terminates the tenancy at will automatically
Quite open ended

Tenancy at Sufferance
Really isnt a tenancy, but a holdover
Created by actions of T alone
Terms of old lease control if new tenancy created
Termination
T can voluntarily leave
LL can Evict the tenant
LL can Hold the tenant over for a new lease (maximum of which is a year in most jurisdictions)

Proper Notice
Written and delivered to other party, effective when received
o Signed, identify premises, termination language, date
Entitled to possession until last minute of the term
Tenants Duties
Two basic duties:
o 1. Duty to pay rent
o 2. Duty to avoid waste
Duty to Pay Rent
o 3 situations where duty to pay rent is suspended
1) Premises are destroyed, so long as the T didnt cause the damage
2) LL completely or partially evicted the T
3) LL materially breaches the lease
o What sorts of breaches are material (defenses to not paying rent)?
Primarily concerned with breaches of the ICQE and the IWH
Implied Covenat of Quiet Enjoyment
o T can withhold rent when LL takes actions that make premises wholly or
substantially unusable for their intended purpose, and the T is constructively
evicted (SING)
IWH. If premises are not habitable, tenant may:
o Refuse to pay rent
Must notify LL of problem and
Give LL a reasonable amount of time to fix the problem
o Remedy the defect and offset cost against rent; or
o Defend against eviction
Duty to Avoid Waste
o Background rule. Does not have to be expressed in lease
o T has duty not to commit affirmative waste or permissive waste.
o T may make changes to property that increases the propertys value (ameliorative waste) but LLs usually
require permission to do so
LLs remedies for Ts Breach
o Ts failure to pay rent? LL can sue for damages and evict
o T abandons?-LL can retake premises but LL must mitigate by re-renting; T liable for any deficiency

Landlords Duties
Duty to Repair
o In residential leases, the LL is presumed to be responsible for repairs. The T must notify the LL of any
needed repairs.
o A residential lease generally cannot place the duty to make repairs on the tenant, and a provision to that
effect is void.
Duty to Mitigate Damages
o Majority Rule
LL must make reasonable efforts to re-rent the property
LL must treat leasehold as if it were vacant stock
LL does not have to accept an unacceptable replacement T
If LL does not make diligent efforts to mitigate, T is relieved from the obligation to continue
paying rent
**If the LL does seek to mitigate LL is entitled to the difference between the original rent and the
rent received from the replacement T
o Minority Rule- no duty to mitigate
LL does not have to mitigate damages
More common in cases involving commercial leases
IWH
QE
Duty to Deliver Possession
Hannan v. Dusch - the necessity of delivering possession
Two schools of thought on whether the covenant should be implied:
1. (Majority) English: implied on every act of leasing it is required for every landlord to put the
tenant in actual possession at the commencement of the lease. Obligated to provide legal and
physical possession
 a. Landlord is in a better position to anticipate, to know, and to manage the risk of a
holdover
2. American: no implied covenant to put tenant into possession at the commencement of the lease
only to put tenant in superior legal right of possession. Duty of the tenant to evict the holdover.
LL only obligated to provide legal possession. No duty to provide actual possession.
Quiet Enjoyment
In practice, breach of QE occurs when the LL, or someone the LL is connected to, renders the premises unsuitable
for the intended purpose
LL Must control:
o Common areas
o Nuisance-like behavior of other Ts
LL does NOT have to control
o Off-premises actions of third parties that are beyond LLs control (ie noise across the street)
Louisiana Leasings v. Sokolow (1966) p. 490
o Sokolow and his fam were objected to by the Levins middle-aged tenants below them because their children were
loud. There was an express covenant in the lease about noise. LL brought action to have Sokolows removed.
o May a tenant be evicted under a noise covenant in a lease where the noise is not excessive?
o Court: A landlord has no right to eject a tenant-couple for a breach of a noise covenant in a lease by their children
where (1) the complaining tenant moved in after the tenant-couple, and (2) the noise was not, in and of itself, found
to be deliberate or excessive.
Idea of coming into nuisance
Caveat Emptor
o At the end of the toilsome day, like tired fish, they are only too happy to seek out these quiet backwaters of the
metropolis to recuperate for the next day's bout with the task of earning a living"

Constructive Eviction (breach of QE)

Occurs when the landlord wrongfully performs or fails to perform a duty that results in a substantial loss of
enjoyment to the tenant
Applies for the duration of the lease
Elements
a. Wrongful failure to perform (either express or implied)
b. Substantial interference with the tenants use and enjoyment
c. Tenant must give landlord notice of the problem and landlord must be given a reasonable opportunity to
remedy the interference
d. Tenant must vacate the premises within a reasonable time after the landlord fails to fix the problem
A tenant must SING: SI: Substantial Interference, N: Notice, G-Get out

Implied Warranty of Habitability

1. Endures for the entire term of the lease
2. Warranty that the premises will be maintained in a fit and habitable condition for the entire term of the lease
a. Premises have to be fit for human occupancy at the outset and throughout the term
3. T does not have to vacate the premises to take advantage of the implied warranty of habitability (unlike in
constructive eviction)
4. In most jurisdictions the IWH is non-waivable
a. Larger public policy concerns at hand
5. Percentage Diminution Method tenant's recovery reflects the percentage by which the tenant's use and
enjoyment of the premises has been reduced by the uninhabitable conditions.

In the commercial sphere, there is something akin to the implied warranty of habitability called the Implied Warranty of
Suitability
Provides the tenant with an entitlement throughout the entirety of the lease. Landlord would have to negotiate a position away from
that if he doesnt, then the warranty is implied.
However, even where its implied, courts have allowed the implied warranty of suitability to be negotiated away unlike the implied
warranty of habitability (Davidow)
Retaliatory Eviction
If we allow someone to evict a tenant who has effectively sued the landlord for not keeping up with their promises, then
we are rewarding wrongdoers
1. Landlord is barred from penalizing a good faith whistleblower
2. Courts stress that they arent going to award landlords who have violated the rights of their tenants
3. If the landlord is able, but unwilling to make the repairs he has made the premises uninhabitable
i. However, Robinson v. Diamond Housing Corp said that if the landlord bona fide cant make the repairs then its not a
retaliatory eviction
4. Robinson diminishes the landlords right to exclude even after giving proper notice for the termination of a
periodic tenancy

LL and Ts Tort Liability

T owes a duty of care that extends to invitees, licensees, and foreseeable trespassers
LLs liability to invitees, licensees, and foreseeable trespassers is as follows;
o Responsible in negligence for latent defects about which the T does not know
o Responsible for faulty repairs completed negligently by the LL or the LLs agent
o Responsible for negligence that causes injuries in common areas of the property

Transfers of a Leasehold Interest

Assignments and Subleases
A. An Assignment is the outright transfer of all or part of an existing lease, the assignee stepping into the shoes of the
assignor.
a. All of the remaining time, nothing left
b. There is still PoK
B. A Sublease involves the creation of a new tenancy between the sublessor and the sublessee, so that the sublessor is
both tenant and landlord.
a. Under common law, when a lease terminates, the sublease also terminates
b. The original LL and tenant are still in PoE and PoK with each other

Distinguish b/w assignment and a sublease

If the original tenant retained an interest or estate in the premises- Sublease
a. Retention of a right of re-entry or a possibility of reverter by the original tenant signifies sublease
b. Tenants right to re-enter the premises for a breach of particular covenants in the original lease in
order to preserve that lease would likely be held as a sublease
If the original tenant did not retain an interest or estate in the premises- assignment
Also look at the parties intentions as evidenced by the totality of the factors and circumstances surrounding
the transfer.
An assignment is for the entire term of the lease, while a sublease is only a portion of the lease term
Also, if a third party is making rent directly to the landlord, that might denote an assignment, while if the third
party pays the tenant instead of the landlord, that might indicate a sublease

Assumption and Novation

A. Assumption- The assignee is not otherwise bound by the terms of the lease b/w the original LL and the transferring tenant unless there is an assumption by the
assignee of the tenants contractual obligations to the LL under the lease.
B. Novation- When the LL expressly releases the tenant from his contractual obligations under the lease and substitutes the assuming assignee in the tenants place.
a. This extinguishes privity of contract b/w the LL and the tenant
b. Novation needs to be expressly created
Jaber v. Miller dealt with cancellation of promissosy notes
The Intention of parties governs whether something is sublease or assignment.

Prohibition Clausesa clause in the lease prohibiting Assignment or Sublease

If the lease prohibits only assignment, the tenant may still sublease
If the tenant violates the prohibition, the landlord can terminate the lease
o Waiverif the landlord accepts payment from the new tenant, he waives the right to enforce the
prohibition clause
 Consentsome clauses allow assignment or sublease only with landlords consent
o The landlord can only withhold consent on a commercially reasonable ground
Privity of Estate and Privity of Contract
A. Privity of Contract- Privity is a relationship existing between both parties to a contract. Both the LL and the tenant have an
immediate, simultaneous existing relation to each other b/c of the lease. It is the rights and obligations of the LL and tenant
arising out of such express lease covenants. Ex- rental payments and maintaining the premises
B. Privity of Estate- Both the LL and the tenant have a mutual, immediate, and simultaneous interest in the title to the leased
premises (the tenant having the right to possession for a term and the LL having the reversion after the term). This is the
rights and obligations of the LL and tenant growing out of the conveyance.
o Runs with the land
o PoE permits a LL to collect rent from the tenants assignee, even though there is no direct contract b/w them.
o PoE can begin at two possible times:
1. When the right of possession begins, or
2. When the tenant takes actual possession

LL and tenant relationship from the outset involves both PoE and PoK
PoK arises by virtue of the lease agreement, which is a form of contract
Test for LL+T PofE
o Both parties have an estate in the same land, and the LLs right to possession succeeds immediately to the tenants
possession.
o If there is PofE, then the parties are liable to one another for all covenants that run with the land.

If the Tenant Assigns the Lease

LL+A=PofE
LL+T=PofK
T+A=PofK
o If the tenant assigns the leasehold interest to A, PoE now exists between the landlord and A because at the
termination of As estate, the possession of the property will revert to the landlord. So LL can collect rent from A
(rent=covenant that runs with land)
o PoE longer exists between the LL and original T
o Because the assignment of the leasehold interest does not in and of itself effect a termination of a lease agreement,
the LL and the original T continue to be in PoK
o An assignee may establish PoK between herself and the LL by expressly assuming the terms of the lease. (179 So.2d
573)

If Tenant sublets his interest to S

T+ST= PofK & PofE
LL+T: PofE & PofK
LL+ST= nothing
o A LL/T relationship arises between T and ST. Since at the termination of STs interest, possession of the property
will revert to T, ST and T are in PoE. (229 Cal.App.2d 705)
o T and ST are also in PoK
o Since the sublet does not terminate the lease agreement between LL and T and when Ts interest terminates,
possession of the property will revert to LL.
Both LL and T remain in PoE and PoK notwithstanding the sublet.
o Many states still follow common law idea that no PoE or PoK exists between LL and ST.

If a LL transfers its reversion to another, the transferee of the reversion comes into PoE with T
The PoE between the original LL(transferor) and T ceases.
But, PoK continues to exist between the original LL(transferor) and T
AND between the (transferee of the reversion) and T
provided that the transferee agrees to terms of lease..
Termination of Leasehold Estates
Surrender and Abandonment
A. Surrender- requires the consent of both the LL and the T.
B. Abandonment- unjustified vacation of the leased premises by the T with no present intent to return, coupled with
default in the payment of rent
When a tenant surrenders possession of the premises or abandons the property, LL in a majority of the states has
an election to make:
1. Accept the offer. Treat the lease as terminated, retaking possession for the LLs account and ending
further liability of the tenant; OR
2. Re-let: retake possession for the Ts account and as the Ts agent, hold the T liable for the difference b/w
the agreed rent and what the LL is able to recover in good faith from a new tenant; OR
3. Reject the Offer. Do nothing, holding the T liable for the rent as it falls due.
Upon the tenants abandonment or surrender, LL has a duty to mitigate the tenants damages and should make a
good faith effort to re-let the premises on substantially the same terms and conditions for the remaining portion of
the term
Duty to Mitigate Damages
Majority Rule
o LL must make reasonable efforts to re-rent the property
LL must treat leasehold as if it were vacant stock
LL does not have to accept an unacceptable replacement T
o If LL does not make diligent efforts to mitigate, T is relieved from the obligation to continue paying rent
o **If the LL does seek to mitigate LL is entitled to the difference between the original rent and the rent
received from the replacement T
Minority Rule- no duty to mitigate
o LL does not have to mitigate damages
o More common in cases involving commercial leases
Sommer v. Kridel Important Case Duty to Mitigate
Issue is whether a landlord has a duty to mitigate in the case of a breach by the tenant
o Court holds that if the landlord wants to hold for future payments, they have a duty to mitigate
Mitigation is only an issue if you want to hold the tenant liable for future amounts due under the lease
It moves forward the notion that leases are a contract, requiring mitigation
Even though the LL performed all of its requirements and its the T that breached, A LL has an obligation to make a reasonable effort to mitigate damages when a lessee surrenders
o meaning that he must make a reasonable effort to relet the premises.
Requiring mitigation in the LL-tenant context discourages economic waste and encourages productive use of the property. It also helps prevent destruction or vandalism of the
unoccupied property.
1. Anytime a tenant abandons, PoE is destroyed.
2. If destroy PoE, then may not have destroyed covenant to pay rent b/c that runs with the land
3. Acceptance of surrender terminates PoE b/w the parties while leaving PoK unaffected

Holdovers
A tenant at sufferance who came legally but overstayed.
Can be evicted, or held over for the term of a new lease (as a periodic T; but not longer than a year)
o LL can impose a higher rent if LL had informed T of increase prior to expiration of the old lease
The tenant remains in possession until the LL makes an election
1. Can reject the tenant as a trespasser- can recover damages by holding over
2. Can accept the tenant for additional term (does not have to be identical term)
A constructive acceptance is evidenced by the LLs acceptance of rent when it is due
An election is irrevocable
Once the LL makes his election, new tenancy arises irrespective of consent, intentions of tenant
Law says that for involuntary holding over- when the tenant wants to vacate but is prevented from
doing so b/c of things beyond control, she is excused (Commonwealth)
The usual measure of damages for the LL is the reasonable rental value for the duration of the
holdover.
 LL must make the election within reasonable amount of time \

You record a lease for notice, not for binding purposes

o After you record, any subsequent purchaser has notice by inquiry; no one can set themselves up
as a bona fide purchaser

Servitudes
Easements
Licenses
Covenants
o Real Covenants
o Equitable Servitudes

Easements in General
1. Grant of a non-possessory property interest that entitles its holder to some form or use or enjoyment of anothers
land (When it otherwise would be considered a trespass)
Easements by grant
o By a separate deed creating only the easement
o By a deed which also grants a possessory interest in certain property
o Sometimes someone sells the possessory interest in real property but retains a right to travel across
that property or use it for some other specified purpose..
Easement by reservation
o Technically implies that a new interest is created in the grantor
Conceptually troublesome because an individual cannot, at the same time, own the fee simple
and an easement in the same land
Easement by exception
o Technically implies that the easement that is being withheld from the grant is a preexisting interest in
the grantor
o Merely a statement that property might be subject to an easement.
Today most courts disregard these technical distinctions and, instead, construe the language used so as to
effectuate the intention of the parties.

2. Easements can be either affirmative or negative (plus conservation)

a. Affirmative easement: entitles its holder to do a physical act on anothers servient landMost action
happens here (PING)
i. Right to place utility lines on anothers land
ii. EX: A, who owns Blackacre, gives B a right of way over Blackacre, so B can pass from his own property to a street
which adjoins Blackacre. B holds an affirmative easement.
b. Negative easement: enables its holder to prevent its servient owner from doing something that otherwise
would be permissible. Can only be created by express grant
i. Ie Light, Air, Support, Stream of water from an artificial flow (LASS)
ii. EX: A owns Whiteacre, which is next to the ocean; B owns Blackacre, which is separated from the ocean by
Whiteacre. A gives B an easement of light and air, which assures B that A will not build anything on Whiteacre
which would block Bs view of the ocean.
c. Easement by Conservation
i. pretty much a negative easement. Property owner agreeing not to do something on the land in
name of conservation. Normally government and kickback involved..
3. Two types of Easements
a. Easements Appurtenant
i. The default assumption when in doubt; Must be to the benefit and use of the dominant estate
ii. Includes a dominant/benefitted estate and a servient/burdened estate
iii. You know its appurtenant when 2 parcels are involved
iv. Example: A grants B a right of way across As land so that B can better reach Bs land
1. 2 parcels of land are implicated
2. Bs land gets the benefit dominant estate
a. B has a easement appurtenant to Bs dominant estate
3. As land is burdened servient estate
 v. Appurtenant easements are transferred automatically with the dominant estate
vi. Can be alienated and devised
b. Easements in Gross
i. If there is only one estate in question its in gross
ii. The easement is in gross when it gives its holder only some personal or commercial advantage
iii. Servient land is burdened, but there is no dominant land
1. No dominant land because the holder of the easement in gross is deriving a purely
personal or financial gain independent of any landholdings
iv. Examples:
1. right to fish or swim in anothers pond; right to place a billboard on anothers lot; right to
place utility lines on anothers land
v. Easements in gross are NOT transferrable unless it is for commercial purposes
vi. Decreases marketability in land

4. Creation of AFFIRMATIVE Easements: 4 main ways

a. Prescription: akin to AP
b. Implication: implied easement through 2 scenarios
i. by prior apparent use
ii. By plat
c. Necessity
d. Grant: time lasts for what is spelled out in easement; also need to spell out what is being granted; what is
being used for and when it ends.
e. Estoppel

Easements by Prescription
1. Prescription (like AP)
a. If a person accesses the property of another to use it in the manner of an affirmative easement, and the use
is accomplished over a sufficiently long period of time in an actual, open, continuous, and adverse
manner, the use ripens into an easement by prescription
b. Elements:
i. Continuous and uninterrupted
ii. Open and notorious
iii. Actual
iv. Hostile/adverse under claim of right
1. The use must be adverse, this is different from adverse possession which requires
possession
2. The use is less intense than possession actions dont require ownership per se
c. Example: everyday you cut across your neighbors front lawn over time this may succeed from trespass
to affirmative easement via prescription
Different Approaches
1. NE approach creates presumption of hostility. It is up to the servient lands holder to rebut this.
2. WY approach creates presumption of permission and says that it is up to the user to establish hostility. A person
claiming a prescriptive easement may not rely on presumption of adverse use or his subjective intent.
Otherwise, it is assumed they are using it with permission

Easements by Implication and Necessity

1. Necessity (USDS)
a. Created when there is no feasible way to enter or leave a property without trespassing on another persons
land (The landlocked setting)
b. An easement of ROW will be implied when grantor conveys part of his land with no way out except over
some part of the grantors remaining land
c. Requires inaccessibility
d. Elements:
1. Unity of title indicating that the dominant and servient estates were owned as a single unit prior to
the separation of the tracts
2. Severance {Title} of the dominant and servient estates. It is the severance that causes the owner
of the
 3. Dominant estate denied access to and from the dominant estate
4. Strict necessity existing at the moment of the severance
e. The common source of title need not be the immediate grantor but is any common source in the chain of
title to the two estates which meets the other criteria for creation of a way of necessity over the property
of another

2. Implication by Prior Use (UBAN)

a. Created when a grantor conveys a section of her property from which, before the conveyance, the grantor
used the land in such a way that, had the two tracts been separated, the usage could have been the basis
for an easement appurtenant with one track being the dominant and the other the servient
b. All easements implied by prior use are appurtenant
c. Elements:
1. Unity of Title: Must be prior common ownership of the alleged dominant and servient tracts or
common grantor
2. Before Severance
i. Owner of a large tract uses his land as if there is an easement (like a quasi-easement)
3. At time of Severance
i. The use must be continuous and apparent at the time of severance as to indicate it was
intended to be permanent and to continue after the severance
4. Necessity
i. The servitude must be reasonably necessary for the use to continue after the severance
Example: A owns two lots (1 and 2). Lot 1 is hooked up to a sewer drain located on Lot 2. A sells Lot 1 to B, with no mention of
any right to use sewer drain on As Lot 2 Court may nonetheless imply an easement on behalf of B if the elements are met
LOGIC BEHIND THEM: Originally a single owner owns a parcel that is subsequently divided into two parcels. During the
period of unified ownership, the owner does something that makes one part of the parcel dependent on the other part. During that
period of ownership this structure is not an easement since there are not separate dominant and servient estates. After severance,
however, when the issue of implication arises, courts commonly refer to such structures, as they existed during unity of title as
quasi-easements.
a. Implied by Plat
i. Ie if a person sells a plat of land with parcels, there is an implied easement that interior roads may
be used to get to each parcel

Easements by Estoppel
Creation
o Permission: starts with a permissive license by one property owner to another person
o Reliance: continues when licensee relies on licensors promise
must be reasonable and in good faith
typically reliance means investing substantial money or labor
o Permission Withrawen: the licensor withdraws permission (revokes license)
Result:
o If reliance was detrimental to the licensee, the licensor is estopped from withdrawing permission, in effect
creating an easement.
Scope Of Easements
BLL: You cant use/ Expand an easement to benefit a non-dominant estate.
o That is a misuse of the easement because it is extending the easement beyond its scope in essence, this
is trespass
o You arent entitled to unilaterally extend the easement to a non-dominant parcel even if it doesnt extend
the burden on the servient estate
Express Easements
o Ambiguous terms: if the terms are ambiguous, the court considers the intent of the original parties as to
the purpose of the easement
o Changing and Easement
Any changes are tested under a reasonableness test
Any future use of the easement must be reasonably foreseen at time easement was established
This means that any changes must have been foreseen by the original parties
o Trespass
If the use exceeds the scope, the dominant estate is trespassing on the servient estate
Implied Easements= nature of easement determines it scope
Duty to maintain
o Typically the holder of the easement has duty
o The owner of an easement has the right and the duty to maintain the easement for its purpose unless the
parties otherwise agree.
o If the easement is shared:
the owner who maintains or repairs the easement may seek contribution from the other owners
of the easement after:
1) adequate notice and
2) an opportunity to participate in repair decisions.
the owner of the servient estate also has an obligation to contribute to the repair or maintenance
of an easement if the servient estate owner uses the easement.

Terminating an Easement (ENDCRAMPPS)

1. Estoppel Doctrine
a. Servient owner changes his position to his detriment in reliance on statements/conduct of the easement
holder that the easement is abandoned. (detrimental reliance)
i. A tells B that A wont be using her right of way anymore that crossed Bs parcel. So B builds a
swimming pool there
2. Necessity- easements created by necessity expire as soon as the necessity ends
3. Destruction of the servient land, other than through willful conduct of the servient owner
4. Condemnation of the servient estate
5. Release: By express written release given by the easement holder to the servient owner
6. Abandonment
a. Requires non-use plus an act demonstrating the intent to abandon)
i. Easement holder must show by physical action the intent to never use the easement again
b. If an easement is abandoned, the title goes back to the owner of the servient estate and is reunited
7. Merger Doctrine (Unity of Ownership)
a. The easement ends when title to the easement and title to the servient land become vested in the same
person. Ie owner of easement acquires fee title to the servient estate
8. Prescription
a. The servient owner may extinguish the easement by interfering with it in accordance with the elements of
adverse possession (COAH)
b. You can both create and terminate by prescription
9. Purchase by a BFP=if he can show BFP (took for value with no constructive/inquiry/actual notice)
 10. Severance

In addition to any express terms in the written instrument that allow for termination of the easement,
an express easement may be terminated by an express written release, merger, severance,
abandonment, prescription, or estoppel.
Easements in Short:
AFFIRMATIVE
Prescription
o Adverse
o Open and Notorious
o Continuous
o Hostile
o Public
Scope of Easement confined to use that was engaged in to
acquire by prescription
No negative Prescriptive Easements
No easements on public lands
Implication
o Prior Use
Common Ownership of Dominant and Servient
Existing Use at time of common ownership
Apparent, obvious, NOTICE function
Continuous, permanent use
Severance of Title, severance created easement
Reasonable necessity for use to continue after severance
Necessity
o Unity of Title
o Severance of Title
o Dominant Estate curtailed access due to severance
o Strict Necessity
Grant
o Ie Reservation
Owner conveys title but reserves continued use
NEGATIVE (LASS)
o Created ONLY by writing signed by grantor

NOT EASEMENTS
Profit
o Right to enter anothers land and remove specific natural resources
o Operate like easements
o Cannot be created by necessity
Licenses
o a revocable permission to uses anothers land
1. A mere privilege to enter anothers land for some delineated purpose
2. More tenuous than easements
3. Dont need a writing to create a license tremendously informal
4. Licenses are freely revocable at the will of the licensor unless estoppel applies to bar revocation
a. Estoppel will bar revocation when the licensee has invested substantial money or labor or both on
reasonable reliance of the licenses continuance. Prevents unjust enrichment
Restatement 519: Revocation:
1. A license is terminable at the will of the possessor of the land subject to it except
a. licensee must be given a reasonable opportunity to remove himself and effects;
b. a license coupled with an interest can be terminated only to such an extent as to not prevent the license from being effective to
protect the interest with which it is coupled;
c. a license including expenditures in exercise of his license in reasonable reliance upon licensor as to the duration of the license
can continue to the extent reasonably necessary to realize upon his expenditures

Covenants v. Easements
 1. Easements give entitlement to use land for another; ie right to use
2. Covenants are about what you can do with your land

Real Covenants
1. Contractual obligation to do or not to do something with your land
a. Ie homeowners associations and door colors, etc.
2. Covenants can be affirmative or negative
a. Affirmative covenants obligate owners to perform certain acts for the benefit of their neighbors
i. Example: require an owner to maintain a wall on her property that supports neighboring land;
required to pay fees to the homeowners association for upkeep; etc.
b. Negative covenants prohibit certain land uses (most will be negative)
i. Example: cant paint your front door red
3. Remedy: Damages
a. When your wants money damages construe as a covenant
b. At law damages can be awarded
4. A covenant will run with the land when it is capable of binding successors
a. Benefit of covenant= ability to enforce the covenant
b. Burden of covenant=being subject to it, bound to it
5. Elements needed for the burden to run (WPINT)
a. Writing
i. You CANT create by a prescription or implication
ii. Statute of frauds requires covenants to be in writing to be enforceable against subsequent owners
b. Privity
i. Horizontal Privity
1. Describes the relationship among the (1) original promisor under the covenant and (2) the
original promisee under the covenant and (3) the affected estate in land
2. Horizontal privity is difficult to establish not usually the case that the original parties
will be in succession of estate
a. The Massachusetts Rule:
i. The most restrictive definition: a promisor and promise were in privity of estate only if
they held simultaneous legal interests in the affected property after the covenant was
created. A mutual and continuous interest. Meaning that grantors and grantees do not
have privity
b. Modern Rule (Rule we should go by)
i. Adopted by nearly all jurisdictions today. This expands privity to include a covenant
contained in a deed which transfers the grantors entire interest in the land to the grantee.
ii. Has to be SIMULTANEOUS with the transfer of the interest
1. So granting property one day and a covenant the next does NOT create privity
c. No Privity Requirement
i. This is the most expansive, and is only followed by a few states. What the Restatement
(Third) basically says
3. Absence/time is the reason why many burdens wont run be on the lookout for this
4. Under Modern Rule, in most jurisdictions, landlords and tenants/co-tenants and
grantor-grantee transactions are in privity of estate
ii. Vertical Privity (just think: any succeeding possessory estate)
1. Relationship that exists between the original promisor or promisee under a covenant, that
particular promisor or promisees successor in interest, and the affected estate in land
2. The relation between the original covenanting parties and their successors in interest
3. The nexus between A and A1
4. Simply requires some non-hostile connection (contract, devise, descent, etc.)
5. The only time vertical privity will be absent is when A1 took by adverse possession
iii. Strict privity of estate means that the successor took 100% of the predecessors interests
c. Intent
i. The grantor must intend that the benefit of the covenant run with the land
1. Look for language like and his heirs and assigns
d. Notice
 i. Actual or Constructive; Typically satisfied because it should be recorded
e. Touch and Concern
i. A covenant touches and concerns the land when the benefit enhances the value of the dominant
estate to the benefitted party and the burden detracts from the value of the servient estate to the
burdened party
1. At one extreme, the covenant that a party do something or refrain from doing something
that benefits the property DOES touch and concern the land
a. Ie A makes a covenant with B that B has to trim the hedges every year so that
As property value doesnt go down. If B sells the property, the new owner will
have to do the same thing.
2. At the other extreme, covenants to do acts that have nothing whatsoever to do with the
land generally are not enforceable.
3. (Candlewood example)-the money benefits the property in this case
ii. In essence are you impacted either for the good or the bad because of the covenant?

6. Elements needed for the Benefit to Run under common law (WTIV)
a. Writing
b. Touch and Concern
i. If the benefit is in gross It does not touch and concern the land In Caullett v. Stanley
Stilwell & Sons, for example, the right to build or construct the original dwelling did not run
because it didnt touch and concern the land and was instead a mere personal commercial
benefit.
c. Intent
i. of the original grantor and grantee must have been that the covenant run with the land.
d. Relaxed Vertical Privity: meaning successor can take less than what his predecessor had to give
i. between the party claiming the benefit of the covenant and the party who is called upon to fulfill
it.
7. In many jurisdictions, if you can show that the burden can run; even if the benefit is personal it does NOT matter,
the covenant is not valid
8. In some jurisdictions, the burden will not run unless the benefit runs too

Covenants Enforceable in Equity: Equitable Servitudes

1. An agreement/promise between two or more parties that restricts the right of use or enjoyment of one or more
parcels of property that equity can enforce against successors. (ie. by specific performance)
2. Enforced in equity, usually by injunctive relief
a. Remember, under covenants, law defaults to damages if you want injunctive relief, you have to argue
equitable servitudes
3. IE would be seeking an injunction in order to enjoin the alleged offender from going forth in defiance or breach
of the promise
4. Successors are bound if: (WITNes)
a. Writing (exception: common scheme)
b. Intent
c. Touch and Concern
d. Notice
i. Actual notice is of course best form of notice.
ii. Constructive notice may apply when we deem a party to know as the deed is recorded in real
property records.
iii. Inquiry notice exists where it may not be recorded, but you still should have seen during
inspection.
1. Example: A promises to sell B house and gives B the deed. B never records the deed so it
still looks like A owns it. A sells to C after. It would be pretty obvious during inspection
of property.
a. Ie can be inferred from uniform characteristic of neighborhood, even if it isnt
in the deed.
e. Privity is NOT required
Implied Negative Reciprocal Servitude (General Scheme Doctrine; Exception to Writing requirement)
It is a kind of equitable servitude that is implied and need NOT be in writing
Usually comes up in planned communities (condo, subdivision)
How are they created?
o 1) Developer must intend to create a covenant (i.e., promise) on all of plots in the subdivision;
o 2) Promises must be reciprocal (i.e., benefits and burdens each and every parcel equally);
o 3) Must be negative rather than positive (i.e., it must be a restriction on owners use);
o 4) Successor must be on notice of the restriction (at least inquiry notice); and
o 5) Must be a common plan (general scheme).
To prove there is a common plan, look for:
A (recorded) map of the community showing the common scheme
Marketing or advertisements of the community
Oral or written mention that the lots are burdened by common restriction

According to majority, in a subdivision, residential restriction contained in deeds conveyed by common grantor
will bind subsequent grantees whose deeds contain no such restriction if:
At start of subdividing, grantor had
o (i) common plan (scheme); and
o (ii) unrestricted lot holders had notice.
(Minority rule will not bind subsequent grantees unless their lots are expressly restricted in writing)

***A real covenant may also be an equitable servitude but some equitable servitudes dont classify as real
covenants.

Real Covenant Equitable Servitude

Privity
YES NO PRIVITY
Remedy Enforced by awarding of monetary Enforced by Injunctive Relief
damages

Memory:
Real Covenant Equitable Servitude (ES)
Burden to Run (WPINT) Successors bound if: (WITN(ES))
o Writing o Writing
o Privity o Intent
Horizontal privity o Touch and Concern
Vertical privity(strict) o Notice
o Intent for successors to be bound
o Notice Where common scheme exists, subsequent
o Touch and Concern purchasers with notice are bound
Benefit to Run (WITV)
o Writing
o Intent
o Touch and Concern
 o Vertical Privity (Relaxed)

Termination and Amendment of ALL Servitudes

1. Termination by Merger, Prescription, and Abandonment; See above too
a. Merger Doctrine (Unity of Ownership)
i. The servitude ends when title to the servitude and title to the servient land become vested in the
same person
b. Abandonment
i. Servitude holder must show by physical action the intent to never use the easement again
(requires non-use with the intent to abandon)
1. If an easement is abandoned, the title goes back to the owner of the servient estate and is
reunited
c. Prescription
i. The servient owner may extinguish the servitude by interfering with it in accordance with the
elements of adverse possession

d. Arguments AGAINST termination include:

i. There was no merger of dominant and servient estates;
ii. Easements created by grant are not lost by non-use alone;
iii. Prescription did not occur because all 5 elements were not met

Prescription v. AP
Prescription is applied to servitudes while AP is applied to title; sort of interchangeable; use doesnt have to
be exclusive

2. Changed Conditions Warranting Terminations

a. Doctrine of Changed Circumstances/Conditions: The surrounding area has drastically changed to
conditions that they are no longer deriving intended benefit from the covenant. A court will not enforce a
restrictive covenant where a fundamental change has occurred in the intended character of the
neighborhood that renders the benefits underlying imposition of restrictions incapable of enjoyment.
i. Watch for it being FSD and not covenant With FSD, changed conditions are harder to prove
because they are taking away property interest.
ii. Whether or not there can be damages under this equitable provision is untested ground.
iii. Most courts decline to use changed conditions to relieve a residential only servitude when land is
on edge of residential and commercial.
iv. Rationale for changed conditions:
1. Restrictions will no longer be enforced when general character of community has
changed so much that owners can no longer enjoy benefits of restriction;
2. For a long time, property owners within subdivision have acquiesced with result that
character of land within subdivision has changed (waiver or abandonment)

b. Keep in mind that the Doctrine of Changed Conditions generally holds that restrictions will no longer be enforced when the general character of
the community OUTSIDE the restricted subdivision has changed so much that the owners of the restricted lots can no longer enjoy the benefits
for which the restrictions were created.
i. The Doctrine of Waiver / Abandonment applies when for a long time property owners within the subdivision have acquiesced in
certain violations of restrictions, with the result that the character of the land WITHIN the subdivision has changed.
ii. It is generally not a defense to an action for injunctive relief that the s losses are small in comparison to the costs that the relief
would impose upon the thats why we have DAMAGES instead of just injunctive relief.
iii. The Restatement Rule says that if a is entitled to enforce a restriction as EITHER a real covenant or an equitable servitude,
application of the doctrine of changed conditions would deprive him of the equitable remedy (the injunction), but leave him the action
for damages.
1. MOST STATES DO NOT FOLLOW THIS.
2. Rather, they follow the Doctrine of Willy-Nilly to both real covenants and equitable servitudes.
a. Basically seek whatever you want (injunction or damages), but dont seek both.

c. If the GOV exercises its power of EMINENT DOMAIN and takes over a property that has a residential restrictive covenant on it:
 i. The MAJORITY of states hold that the Gov owes BOTH the property owners (the one who they bought the land from and the other
party to the covenant/easement) COMPENSATION.
ii. The MINORITY holds that the easement is not a property interest for which just compensation must be paid.
 Easements, Covenants, Equitable Servitudes: A Review

FORMS OF METHOD OF CREATION PARTIES BOUND REMEDY

SERVITUDES

P-I-N-G Easement Appurtenant Injunction

-transferred automatically with the dominant
Prescription (COAH) estate (or damages these
days)
Implication (implied from prior use; at time Easement in Gross
land is severed, a use of one part existed from -ONLY assignable for commercial purposes
AFFIRMATIVE which it can be inferred that an easement
EASEMENTS permitting its continuation was intended
(UBAN))

Necessity (division of a tract deprives one lot

of access out (USDS))

Grant (writing signed by the grantor)

NEGATIVE
In almost all cases Horizontal privity is Injunction
EASEMENTS
Can be creating ONLY by a writing signed by required before the burden will run.
the grantor (or damages these
(L-A-S-S: Light,
Horizontal Privity NOT required for benefit days)
Air, Support,
to run
Streamwater)

REAL WRITING signed by grantor Burden of covenant (being subject to it, Damages
COVENANTS bound to it) will run to successor if WPINT:
Writing
Privity (horizontal & vertical)
Intent
Notice
Touch and Concern

Benefit of covenant (ability to enforce the

covenant) will run to successor if WITV:
Writing
Intent
Touch and Concern
Vertical Privity (Relaxed)

EQUITABLE WRITING signed by grantor (unless implied Successors bound if WITNes: Injunction
SERVITUDES by general scheme doctrine) Writing
Intent
Touch and Concern
Notice

**privity not required

IMPLIED Injunction
RECIPROCAL At start of subdividing, grantor had (i) Where common scheme exists, subsequent
NEGATIVE common plan (scheme); and (ii) unrestricted purchasers with notice are bound.
SERVITUDE lot holders had notice.
(Minority rule will not bind subsequent
grantees unless their lots are expressly
restricted in writing)
Voluntary Transfers of Interests In Real Property
Two stages: Contract Stage and Deed Stage
I. Land Sale Transactions (Contract Stage)
Land Sale Ks must meet SOF requirements:
o 1. Must be in writing
o 2. Must be signed by the parties to be charged
o 3. Must include essential terms
Parties
Description of property
Price and payment info
Exceptions to SOF
o Partial Performance: by either the seller or buyer is treated as evidence that a k existed.
Look for acts of performance such as:
Payment of all or part of the purchase price
Possession by the purchaser
Improvements by the purchaser
o Estoppel
Elements
1) Seller made a promise to sell or whatever that would foreseeably induce reliance by
the buyer
2) Buyer detrimentally relies on that
3) Only way to prevent hardship/injustice is enforcement of the purported k

Marketable Title
o Every land sale K includes an implied covenant of marketable title
Marketable title= title that is free from unreasonable risk of litigation
o Standard for determining whether title is marketable
That of a reasonable buyer
o Seller cant deliver marketable title? Buyer Can:
1) rescind the contract and recover payments,
2) sue for breach of contract, or
3) bring an action for specific performance with an abatement of the purchase price (e.g., price
adjustment to compensate the buyer for the defect).
Performance
o Delays
Unless k or parties notify, time is not of the essence
o Implied Warranty of Fitness for Suitability (IWFS)
What is it?
The seller asserts that he used adequate materials and workmanship for the residence.
What it applies to
defects in new construction
o Generally covers latent construction defects, including any problems that do not
manifest themselves until after the sale.
Any duties?
Buyer has a duty to reasonably inspect the residence, but is not required to employ an
expert home inspector.
Who it covers
In most jxns, the initial homeowner-purchaser AND subsequent purchasers may recover
damages
In other jxns, only the original buyer can enforce the warranty
How to claim breach
Generally, a suit for breach of the implied warranty may be brought against builders,
developers, and contractors within a reasonable time after discovery of the defect.
Damages? Damages are generally based on the cost of repairs to bring the residence into
compliance with the warranty.
 o Duty to Disclose Defects
Most jxns impose a duty on seller to disclose to buyer all known, physical, and material defects
Concerned with latent defects
Material defect=must substantially decrease the value of the home, health and safety of
its occupants, or desirability of the home
General disclaimers like as is will not satisfy the sellers duty to disclose
o Merger
At closing, obligations in the k are merged into the deed. If there was something important in the
k that wasnt also in the deed, the coa is lost bc the deed controls after closing

Sellers Remedies on Breach by the Buyer

o 1. Damages (measure between the k price and market price)
o 2. Rescission (seller can sell property to someone else)
o 3. Specific Performance

Buyers Remedies on Breach by the Seller

o 1. Damages (measure is difference between k price and market value on date of breach)
o 2. Rescission (return payments to buyer and cancel k)
o 3. Specific Performance
BUT if seller breaches but acted in good faith, buyer can only recover out of pocket expenses

Equitable Conversion and Risk of Loss

o Who bears the RoL if there is damage to or destruction of the property?

Majority Rule: The Buyer holds equitable title during the period between execution of the k and
the closing and delivery of the deed.
SO BUYER is responsible for any damage to the property that happens during that period
As holder of legal title, seller has a right to possess property
However, if the seller has casualty insurance on the property, the seller must give
the buyer credit in the amount of insurance proceeds against the purchase price.

Minority Rule: Places the RoL on the SELLER until the closing and delivery of the deed

II. Conveyancing by Deed

You dont have to record a deed in order to convey good title, but we have to have a writing that satisfies the
Statutes of Frauds, Delivery and Acceptance
o Why Record?? Protect from BFPs
BUGABOO
Transfer of a deed to the
grantee creates a To be VALID AS TRANSFERRING INTEREST, A DEED needs:
presumption that the
grantor intended to make
o 1. INTENT by grantor to make a PRESENT transfer of the interest
a present transfer. Delivered this is the typical way that a grantor expresses present intent to transfer property
Parol evidence is
admissible to show that Can be completed by mailing to grantee or grantees agent or physical handing it
the grantor lacks such over
intent.
Recording is not required, but doing so creates a presumption of delivery
BUT, when the grantor **rebuttable by facts indicating the grantor's contrary intent
transfers the deed to the
grantee subject to a AND intent can be implied from the words and conduct of the grantor, even if the deed has
condition that does not not been actually delivered.
appear in the deed (e.g.,
an oral condition), parol o 2. Acceptance by grantee
evidence is not admissible Acceptance of a beneficial transfer is generally presumed
and the condition is not
enforceable
To be EFFECTIVE, a DEED MUST be a WRITING that includes:
o Parties
o Granting clause expressing grantors present intent to convey
o Sufficient description of property
o Grantors signature
III. The Form of the Modern Deed
Remember, after closing, the land sale K is merged into the deed. Any liability must arise out of the deed, not
the k.
As a general rule, an effective deed minimally must be a writing that includes:
1) Parties
a. name of the grantor AND name of the grantee
2) Granting Clause (operative words of conveyance/grant)
a. an indication of PRESENT INTENT/passage as opposed to future purpose,
3) Sufficient description/identification of the property
4) Grantors signature.
a. Grantor can appoint agent but, Equal Dignities Rule: agency relationship must be in writing

5) Acknowledgement between grantor and grantee?

a. This is not necessary to have a valid deed; BUT it is necessary for deed to be recordable in
most jurisdictions. And you always want to record

Types of Deeds
General Warranty
o Has 6 covenants
o Warranting everyone against all defects in the title
Special Warranty
o Has 6 covenants but they only apply to actions of grantor
o Only warrants defects caused by grantor
Not making any promises to what my predecessors in title have done
Quitclaim
o Whatever interest I have, if any at all, I transfer to you
o NO warranties
o Why accept?
Tacking for AP
Family, etc
Elements of Deeds
1. Includes 3 present covenants (A present covenant is breached if ever at the time of conveyance/delivery. SoL
begins running from the instant of conveyance)
a. Covenant of Seisin
i. Basically just says the title conveyed is what is described in the deed
b. Covenant of Right/Power to Convey
i. Grantor promises that he has legal right to convey the property
c. Covenant against Encumbrances
i. Promises there are not any undisclosed interests that encumber the property
1. Ie mortgages, servitudes or liens
2. Includes 3 future covenants (A future covenant isnt breached until grantee is disturbed in possession. So AFTER
conveyance. SoL wont begin to run until that future date when the grantee is disturbed in possession)
a. Covenant of Quiet Enjoyment
i. Grantor promises Grantee wont be disturbed in possession by a third partys lawful claim of title
ii. Im not conveying Blackacre to you and also to someone else.
b. Covenant of Warranty
i. Grantor promises to defend grantee against lawful title claims
c. Covenant for Further Assurances
i. Grantor promise to fix future title problems
3. These six covenants are typically present in every general warranty deed
a. They can be negotiated out, but these are the standard ones
b. Problems can be listed as excepted in the deed. Ie free of encumbrances on the property except..
c. Recap: when breach?
i. Present covenant: breach occurs at time of conveyance
ii. Future covenant: breach occurs after conveyance
IV. RECORDING ACTS
Scope of Recording Acts
o Interests covered
Deeds
Mortgage
Lease
Option
Judgment affecting title
Other instruments creating an interest in land, such as easement or covenant
DOES NOT cover interests created by operation of law (like AP)
o Who is Protected? Who is covered by recording Acts?
Subsequent Transferees (Purchasers)
o Unprotected persons: Who is not covered by recording acts?
Grantees who acquire title by:
Gift;
Intestacy; or
Devise
Notice
o Actual Notice when the subsequent grantee has real, personal knowledge of prior interest
o Constructive Notice (ie record notice)
o Inquiry Notice when a reasonable investigation would have disclosed the existence of prior claims
Ie dude on land; mentioned interest
Race Statutes
o Rule: First to RECORD always WINS
key language: first to record
Notice Statutes
o Rule: Subsequent purchaser wins if she buys WITHOUT NOTICE (in good faith) of a prior, unrecorded
conveyance
key language: without notice in good faith
Race-Notice Statutes (combo)
o Rule: Subsequent purchaser wins if:
1. Purchase WITHOUT notice (in good faith) of a prior unrecorded conveyance; AND
2. Record FIRST
Special Rules
o Shelter Rule: A person who takes from a BFP protected by the recording act has the SAME rights as his
grantor.
o Estoppel by Deed: arises when grantor conveys land that the grantor does not have title.
If a grantor subsequently acquires title to the land, the grantor is ESTOPPED from trying to
repossess on grounds that he didnt have title when he made the original conveyance.
MORTGAGES
A. Basics
What is a mortgage? A security device used to secure payment of a lien.
o Two component parts:
Note: Borrowers promise to repay the loan/debt
Mortgage: Instrument that provides security to the note
Whos who?
o Mortgagor: borrower
o Mortgagee: lender
Two kinds of mortgages:
o Purchase money mortgage: Person takes out a loan for the purpose of buying a house
How it works:
Seller conveys fee title to buyer
Buyer in return will execute a promissory note secured by the mortgage
Seller or Mortgagor holds the mortgage
o Future advance mortgage: A line of credit used for home equity, construction, business, and
commercial loans (often referred to as a second mortgage)

B. Lien States vs. Title States

Majority (Lien Theory States): Treats a mortgage as a lien that does not sever a joint tenancy
o A lien is created against the secured party upon execution of the mortgage and only the mortgagor is
entitled to possession.
o In absence of contrary provision, only the mortgagor is entitled to possession and rents generated from the
property until a foreclosure sale is held and the mortgagors equity of redemption and statutory
redemption are foreclosed.
o SC is Lien Theory
Minority (Title Theory States): A mortgage severs a joint tenancy and converts it into a tenancy in common
o Upon execution of the mortgage, the mortgagee (lender) has the right to take possession of the property.
The mortgagors title to the property is transferred to the mortgagee, subject to defeasance
Title will remain in the mortgagee unless the mortgagor pays off the debt secured by the
mortgage.
The payment of the debt is a divesting condition that causes title to shift back from the mortgagee
to the mortgagor.
o VA is title theory
o Exam Tip 9: This is an ideal exam question. Encompasses two areas of study - concurrent ownership and security
devices (mortgages).
C. Alternatives to Mortgages - Equitable Mortgages
1. Deed of Trust
o Operates like a mortgage but uses a trustee to hold title for the benefit of the lender (beneficiary of the
trust receiving the payments)
The borrower (trustor/grantor), deeds legal title to the property to a 3rd party trustee, to be held in trust as a security for
the loan (debt) for the benefit of the lender (beneficiary).
Trustees actions are governed by the document and state law. The equitable title remains with the borrower.
If the trustor repays the debt, the beneficiary will instruct the trustee to reconvey the property to the trustor by
way of recording a Deed of Conveyance, which removes the beneficiarys interest in the property.
If the trustor defaults, the beneficiary will advise the trustee to begin employing the remedies set forth in the
document
2. Installment land contract
o Seller finances the purchase; seller retains title until the buyer makes final payment on an installment plan
Traditional rule: If the buyer breaches (misses a payment), the seller keeps the installment
payments made and the property.
Modern approaches: States are trying to assist defaulting buyers
Some treat installment contracts as a mortgage, requiring the seller to foreclose
Some give the buyer the equitable right of redemption to stop a foreclosure sale
 Some allow the seller to retain ownership, but require some restitution for what's been
paid.
3. Absolute deed
o Mortgagor transfers the deed for the property instead of conveying a security interest in exchange for the
loan.
If this is a mortgage disguised as a sale, the borrower must prove a mortgage-like agreement by
clear and convincing evidence, i.e. that there was an obligation created prior to or
contemporaneously with the transfer.
Parol evidence is admissible to make this showing.
Statute of Frauds DOES NOT bar oral evidence about the agreement.
4. Conditional sale and repurchase
o Owner sells property to the lender who leases the property back to the owner in exchange for a loan.
Lender gives the owner the option to repurchase, after the loan is paid off.

D. Transfers
1. By Mortgagor/Borrower
o Liability of mortgagor/borrower
Mortgagor may transfer the property by deed (selling), by will, or by intestate succession.
Ie alienable, devisable, descendible
Mortgagor remains personally liable after the transfer unless:
Lender/mortgagee releases mortgagor; or
Lender modifies the transferee's (buyer/new owner) obligation
Due-on-sale clause: Lender has option to demand immediate full payment upon transfer. Think
of this as an acceleration clause that allows the lender to speed up the payment when the property
is transferred.
Due-on-encumbrance clause: Acceleration when mortgagor obtains a second mortgage or
otherwise encumbers the property.
o Liability of subsequent transferee
Option A: Can Assume the mortgage
Upon default, if the transferee (buyer) assumes the mortgage, the transferee is personally
liable for the mortgage.
Both the original mortgagor and the transferee are liable upon default.
In most jurisdictions, the assumption agreement does not need to be writing.
Option B: Can Take "Subject to" Mortgage
Transferee is NOT personally liable upon default.
If the deed is silent or ambiguous as to liability, transferee/buyer is considered to have
taken title subject to the mortgage.
SUBROGATION
A person who pays off another person's mortgage obligation in order to protect her own
interests acquires the rights of the original mortgagee-lender and may therefore enforce
the mortgage.
o becomes the owner of the obligation and the mortgage to the extent necessary to
prevent unjust enrichment.
but subrogation is not permitted when the full obligation secured by the mortgage is
not discharged.
As a tenant in common with an equal ownership interest in the store with the bookkeeper,
the manager is entitled to contribution from the bookkeeper for one half of the payment
made by the manager because the payment protected the managers interest in the store
as well as the bookkeepers.
2. Transfer by Mortgagee/Lender
MORTGAGE FORECLOSURES
A. Pre-Foreclosure Rights and Duties
o When can the mortgagee/lender take possession?
Lien theory state - Mortgagee/lender Cannot take possession prior to foreclosure because lender
has a lien until foreclosure is complete. Mortgagor is owner up until foreclosure.
Title theory state - Lender technically has the right, as the legal title holder, to possess the
property at any time.
Intermediate title theory state - Minority of jurisdictions modify the title theory - the mortgagor
retains title until default, at which point the lender can take possession.
o Waste
Homeowner cannot commit waste that will impair the lender's security interest.
Affirmative waste, voluntary waste, and permissive waste are more of a concern than
ameliorative waste (improvements).
o Equity of redemption
A common law right held by the mortgagor to reclaim property and prevent foreclosure upon the
full payment of the debt.
Mortgagor must exercise the right of equity of redemption BEFORE the foreclosure sale.
Deed in lieu of foreclosure: Rather than face foreclosure, mortgagor can convey the property to
the lender in exchange for releasing her from any outstanding debt.
"Clogging" the equity of redemption: When a homeowner gives up their right to stop the
foreclosure sale. Courts hate clogging because they dont want homeowners to give up their
equity of redemption.
However, a mortgagor may waive the right to redeem after the mortgage has been
executed in exchange for good and valuable consideration
B. Foreclosure Methods
o Whats what? A foreclosure is a sale of an asset to pay off a debt.
o Notice: Mortgagee must give notice before foreclosing.
o Two methods:
Judicial Sale: Sale under the supervision of a court
Power of Sale (Private Sale): Sale is held by the mortgagee
Either way, proceeds of the sale are used to pay off the debt.
Excess proceeds will be used to satisfy other creditors
o PROCEEDS the money from a foreclosure sale is applied:
1) to the costs associated with the foreclosure sale itself (which would include attorneys fees),
2) to the balance and interest of the mortgage obligation being foreclosed, and
3) to the mortgage obligations owed to all junior interest holders.
o Deficiency: Is the mortgagor responsible if the sale produces less than the mortgagor owes? yes. In that
situation, the court can issue a deficiency judgment for the remaining balance.
D. Priorities
o General Rule:
Senior interests: Interests acquired BEFORE the interest that is being foreclosed. They survive
the foreclosure.
Junior interests: Interests acquired AFTER the interest that is being foreclosed. They are
extinguished by the foreclosure.
For a foreclosure sale to eliminate a junior interest, the holder of the junior interest must
be made a party to the foreclosure action.
First in time rule: Surviving debts are satisfied chronologically.
Note 28: Classify the interest as either senior or junior and then apply the rule to determine
whether the interest survives foreclosure.
o Exceptions to chronological first in time rule:
1) Purchase-money mortgage exception The purchase money mortgage has priority over all
earlier non-purchase-money mortgages and liens whether or not recorded.
Example 3: A purchase-money mortgage would have priority over a judgment lien that pre-dates
the purchase of the property.
 2) Recording act exception - A senior mortgage may sometimes not get recorded. A junior
mortgage that satisfies the requirements of the state recording act MAY take priority over the
unrecorded senior mortgage.
3) Subordination agreement between mortgagees - A senior mortgagee can agree to
subordinate its interest to a junior interest.
4) Mortgage modifications - A senior mortgagee who enters into an agreement with the
mortgagor/landowner to modify the mortgage by making it more burdensome subordinates its
interest, but also as to the modification. The original mortgage will otherwise remain superior.
5) Future-advances mortgages - Line of credit. See MBE Real Property outline at V.E.2.
D. Effects of Foreclosure
o Mortgagor: Foreclosure eliminates the mortgagor's interest in the property.
Exception: Statutory redemption - Some states allow the mortgagor to redeem the property even
after the foreclosure sale. A statute enables the homeowner to nullify the foreclosure. It ends the
purchaser's title and restores title to the homeowner.
Note 29: Absent statutory redemption, the purchaser of property at a foreclosure sale takes the
property free and clear of any junior mortgage and subject to any senior mortgage.
o Purchaser: Purchaser of property at a foreclosure sale takes the property free and clear of any junior
mortgage and subject to any senior mortgage; BUT:
The purchase may be subject to the mortgagors statutory right of redemption, if one exists.

Common Interest Communities

What are we talking about? Real estate development in which individual units/lots are burdened by a covenant
to pay dues to an association.
o The association:
o Services: Maintains grounds, provides facilities, etc.
o Enforces the covenants: The association is the heavy when your neighbor breaks the rules
Three types:
o Owners Associations: Where property owners belong and pay dues to an association or board
o Condominiums: Where individual units are owned outright, but common areas are owned collectively as
TiCs
o Cooperatives: Property is owned by a corporation (made up of residents/shareholders) that leases
individual units to shareholders (residents)
Governance
o Declaration: The governing documents that outline the controlling covenants and restrictions, as well as
the particulars about the association or board
Note: Rules laid out in declaration are valid so long as they are not illegal, against public policy,
or unconstitutional
o Powers: The board has general powers to manage the common property and administer the residents. For
example:
Assessments/Fees
Manage and maintain the common property (e.g., clubhouse, gym)
Enforce rules
Create new rules
Basic test: A new rule must be reasonably related to further a legitimate purpose of the
association (think rational basis test)
Duties
o To the community: The association must deal fairly with members of the community
Good faith
Prudence
Ordinary care
Business Judgment Rule controls (board is shielded from honest but good faith business
decisions)
Fixtures
What is it? Tangible personal property that is attached to real property in a manner that is treated as part of the
real property (e.g., a wall or a bridge; the materials used to make a wall or a bridge)
Making Improvements:
o A fee simple owner of property is free to make improvements to the property, including fixtures, subject
to governmental land use regulations.
o Holders of a life estate or tenants, by contrast, are limited by the doctrine of waste.
Removal: The buyer of real property is generally entitled to the chattel, unless the seller reserves in the contract
the right to keep the chattel.
o Life tenants and tenants: Presumption is that they can remove fixtures unless doing so would
permanently damage the property
Trespassers
o Old Rule: Trespassers could never remove any fixtures or improvements that they installed.
o New Rule: Modern/majority rule is that trespassers can remove an improvement, or at least recover the
value added to the property, so long as they acted in good faith

LAND USE
A. Zoning Basics
What are we talking about? State and local governments may regulate the use of land through zoning laws.
Zoning laws are enacted for the protection and safety of the community.
o States have authority to zone through police powers
o Local governments get power to zone through specific enabling acts
Objective: Segregate incompatible uses from being developed in the same area (e.g., residential vs. commercial
and industrial)
o Cumulative Zoning: The traditional approach in which residential use is permitted everywhere,
commercial use is restricted to some areas with industrial use allowed in the fewest areas.
o Mutually-Exclusive Zoning: Some jurisdictions have developed an approach where only one type of use
is permitted by zone.
B. Nonconforming Uses
Two situations:
o 1. Existing Nonconforming Properties: When zoning is changed and a structure does not satisfy the
zones requirements, it is called a nonconforming use.
The goal of the property owner is to get the nonconforming use grandfathered in.
Vested Rights:
If the project is in process when the change happens, the developer must have the proper
building permits by the time the ordinance takes effect
The developer must also demonstrate the project was in good faith
What if?
Owner wants to expand the nonconforming use? This is generally NOT allowed.
The nonconforming owner switches to another nonconforming use? NO.
The nonconforming owner transfer the property to a new owner? Ya.
o 2. Post-ordinance Nonconforming Properties: When the property owner requests a change after the
zoning ordinance is in place.
Variance: Owner applies for a variance, essentially permission to violate the rules.
Use Variance: Obtain the right to use property in a manner not permitted by zoning
Area Variance: Focuses on restrictions concerning property development.
Standard: The person applying for a variance must show ALL of the following:
1) Compliance would create unnecessary hardship;
2) The hardship arises from circumstances unique to the property;
3) The owner did not create the hardship;
4) The variance is in keeping with the overall purpose of the ordinance; and
5) The variance will not cause substantial harm to the general welfare.
C. Nuisance
Anyone with possessory rights in the property may bring a nuisance claim.
Private Nuisance: A substantial and unreasonable interference with another individuals use or enjoyment of his
property
o Substantial: One that would be offensive, inconvenient, or annoying to an average person in the
community
o Unreasonable: The injury caused by D outweighs the usefulness of the defendants actions
o The interference may be intentional, negligent, reckless, or the result of abnormally dangerous conduct.
Public Nuisance: Unreasonable interference with the health, safety, or property rights of the community
o Private Party: Must show that she suffered a different kind of harm than the rest of the community
Remedies: Usual remedy is damages
o If money damages are inadequate or unavailable, court can impose injunctive relief.

D. Water Rights
Two basic approaches:
o 1. Riparian Rights
Doctrine of riparian rights holds that landowners who borders a waterway own the rights to the
waterway. The right depends upon whether the landowner is located near the water.
Riparians share the right to reasonable of the water, such that one riparian is liable to another for
interference with the others use.
o 2. Prior Appropriation
First in Time, First in Right: First to use the water, regardless of where their land is located, has
the rights to the water.
Beneficial Use: In a prior appropriation jurisdiction, the user must put the water to a beneficial
use. Any productive use satisfies this standard.

E. Support Rights
Lateral Support Rights: Neighboring landowner cannot excavate so as to cause a cave in (i.e., subsidence) on an
adjacent owners land.
o Applicable Standards:
Did the neighbors buildings (structures) contribute to the subsidence?
If so, the standard to apply to the one excavating is negligence.
What if the neighbors buildings did not contribute to subsidence?
The standard to apply is strict liability.

Subjacent Support: Think mineral rights. The surface landowners have the right not to have their land subside
from the activities of the owners of underground rights.
o landowner enjoys the right to subjacent support when the landowner transfers the rights to access and
remove oil or minerals from the property.
o Liability
The owner of mineral rights is strictly liable for any damage that occurs to existing structures on
the land as a consequence of subsidence caused by the removal of the oil or minerals.
BUT The owner of mineral rights is not liable for damage done to structures built on the surface
of the land after the mineral rights were transferred unless the owner fails to exercise
reasonable care in removing the minerals.
WILLS
Real property can be transferred by devise
Testattors intent drives interpretation of wills
Who?
o Heirs: people who take a decedents intestate estate
o Devisee: a person who takes a devise by will
o Decedent: dead guy
o Testator: dead guy who dies with a will
What
o Escheat: if a decedent dies without a will and without heirs, his property escheats to the state
o Ademption: Devise of property that fails (adeems) because it is not in the testators estate on death
Basic rule: the gift fails and the intended B gets nothing
Exception
Satisfaction: if the testator gives the intended B the promised gift inter vivos, the
beneficiary keeps the gift (ademption by satisfaction)
BUGABOO FOR LAND SALE CONTRACTS*
When the seller of real property pursuant to a contract dies before the conveyance of the
property, the buyer can compel the executor of the sellers estate to honor the contract
and transfer the property to the buyer.
o At CL, the proceeds from the sale of the property under contract were treated as
personal property that passed to the devisee of the seller-decedents personal
property.
o The devise of the real property itself was treated as having been adeemed.
In a jurisdiction that has adopted an anti-ademption statute, however,
the devisee of the seller-decedents real property is entitled to the sale
proceeds
o Lapse & Anti-Lapse
Lapse: the intended B predeceases the testator
CL, the gift fails and would fall to the residuary
Anti-Lapse: every state has AL statute to prevent a gift from failing bc an intended B
predeceased the testator
The statute replaces the intended B with a family member who stands in shoes of their
parent and take the gift on their behalf
Why? To preserve testator intent of giving to fam

TRUSTS
You know