PROPERTY OUTLINE

Spring 99; Prof. Peterson

I. ACQUISITION BY FIND
A) Prior possession => the prior possessor is favored over subsequent possessors (Armorie v.
Delamirie; chimney sweep’s title to jewel prevailed over goldsmith)
B) Title is relative => true owner depends on who claimants are.
C) Finder v. property owner
• non-trespass and O≠true owner =>in Hannah v. Peel, finder won despite jewel being on π’s
property. He wasn’t trespassing, and π clearly wasn’t the true owner. Owning the whole
property wasn’t enough to give constructive possession of the broach.
• public shop (re dropped item in shop, finder has better title than shopkeeper).
• things attached to/under the land => land owner has constructive title over owner
II. ADVERSE POSSESSION
A. GENERAL COMMENTS
1. Can only get was O has (if adversely possess a life estate, just get a life estate)
2. Title relates back to date of original entry (once s/l runs, O can’t sue for back rent from
time it was running)
3. Justifications for the doctrine
- promotes efficient use of land
- improvement of dilapidated buildings in urban areas
- gen’l justification for s/l (settled expectations of possessor)
B. FOUR ELEMENTS TO ADVERSE POSSESSION; ALL MUST BE FOUND TO GIVE “NEW TITLE”.
1. Actual entry and exclusive possession =>
• physical possession; entry starts s/l running
• only the land actually occupied can be claimed (unless color of title)
• use the land in a way that O would (eg for a summer cottage, only need to occupy in the
summer; for a sand pit, just use it as a pit).
2. Open and notorious =>
• actions must be such that would inform a reasonably attentive owner that someone was
using the land. Doesn’t have to be actual notice.
3. Adversity => must not be permissive use
a) objective standard => don’t care @ state of mind of A. Only care that A’s actions
appeared objectively to indicate A was taking possession
b) subjective standard => supposedly minority view, but it plays a role even in objective
jurisdictions. Must be subjective intent to claim the land.
• good faith required => A had good faith belief land was hers
• good faith ok but not required; just look for intent.
• Lack of good faith => I knew it wasn’t mine, but I’m taking it anyway.
4. Continuity => continuous for statutory period
a) Effect of O’s reentry
• to disrupt continuity, O must interrupt in such a way that A knows O is asserting claim
(open and obvious reentry)
• Can interrupt continuity, but courts are concerned about notice to A

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 b) Tacking => Tacking is jurisdictional…some courts don’t allow it. If they do, the rules
are:
i. Tacking different owners together by A
A is permitted to tack against successive Os. Why? Expectations, use, O
shouldn’t be able to revive title by transferring ownership…say that next
owner takes “ailing title”. BUT A only acquires the estate she entered on, so
if A enters against a life estate, A can only get a life estate. But, if A enters
against fsa, and title is transferred to a life estate, at end of period A gets fsa.
ii. Tacking by successive As
Permitted as long as privity of estate (meaning A1 didn’t abandon and/or get
forced out by A2)
5. Taxes
In some jurisdictions (including CA) A must pay taxes on the property to claim it. In CA, it
can be paid in a lump sum at the end of the statutory period.
C. Color of Title Doctrine
1. Adverse possession of part of land (all elements must be satisfied) + defective written
instrument giving title to whole parcel give constructive possession to all that the deed
describes
2. Good faith re validity of deed is required in some jurisdictions.
3. Claimed land must be in reasonable proportion to what is actually occupied
4. Example -> If A is occupying one lot with color of title to that lot and the next door lot
=>
if both owned by one O, A gets title to both
if lot 2 is owned by different person, A doesn’t get it
D. Defenses
Disability
If O was disabled at time of entry, O gets another ten years after disappearance of the
ORIGINAL disability to eject. Only ten years even if O is still disabled, but w/ a different
disability than the original one.
|---------------|---------------|-------------|---------------------------|--------->
A enters O insane O=18 orig s/l A in fsa b/c ten years after O=18
O =5 but O is still insane (disabled)

Disabilities => Infancy (<18), Insanity, In prison

III. FREEHOLD ESTATES IN LAND

Hierarchy of estates => fee simple>fee tail>life estate>leasehold
A. FEE SIMPLE ABSOLUTE (FSA)
1. Creation language “to A and her heirs”. Presumption that O wished to transfer entire estate,
so even “to A” usually creates fsa if O had an fsa.
2. fsa is the entire timeline
3. inheritable => if no will, passes to heirs as defined in statute of intestate succession.
B. FEE TAIL (ARCHAIC BUT STILL POSSIBLE IN A FEW STATES)
1. Creation language “to A and the heirs of his/her body”

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 2. Inheritable only by lineal heirs. Can be fee tail male or fee tail female.
3. Property is not reachable by current possessor’s creditors
4. In the few states where its allowed, it can be converted by the current possessor to fsa if
desired
C. LIFE ESTATE
1. Creation language “to A for life”
2. Terminates naturally upon the death of the holder, but it can end early (e.g. holder of
remainder succeeds in proving waste)
3. Followed by reversion if future interest is in O
4. Followed by remainder if future interest is in a transferee
D. FEES SIMPLE DEFEASIBLE
1. Fee simple determinable (fsd)
a) Creation language => “to A SO LONG AS xxx, then to whoever”
b) If followed by future interest in O, that’s a possibility of reverter
c) If followed by future interest in a transferee, it’s an executory interest subject to RAP
d) Fsd ends naturally upon the occurrence of the condition (s/l for adverse possession
starts)
e) In CA, fsd is followed by right of entry which must be exercised w/in 5 years (legislature
abolished possibility of reverter)
2. Fee simple subject to condition subsequent (fsscs)
a) Creation language => “to A, BUT IF X occurs then O has the right to reenter and
retake”
b) Future interest is called right of entry if in O (not subject to RAP)
c) Fsscs does not end automatically when the condition occurs; holder of future interest
must exercise right of reentry (in many states there’s a statutory time limit now, though
c.l. rule was s/l didn’t run for adverse possession until O entered)
3. Fee simple subject to executory limitation (fssel)
a) Creation language => “to A, BUT IF X occurs, then to B and her heirs”
b) Future interest in B is called an executory interest. Be sure to check for RAP problems
c) Fssel ends automatically upon the occurrence of X
E. RESTRAINTS ON ALIENATION (“REPUGNANT TO A FEE SIMPLE”)
1. General rule is that restraints on alienation of a fs are void because
a) frustrates improvement of property (no mortgages)
b) unfair to creditors
c) inefficient => land should be put to its highest and best use
d) concentration of wealth
2. Disabling restraint => withholds power of alienation from grantee (p 217); unable to
transfer
• these are void for both fs and life estates
3. Forfeiture restraint => grantor provides that grantee forfeits interest if he attempts to
transfer
Void for fs, but ok for life estate (See White v. Brown, p 210; Jesse tries to leave house to
live in and not to be sold; court implies restraint would have been valid on a life estate,
although this dealt with a disabling restraint)

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 4. Promissory Restraint => grantee promises not to transfer his interest (to A and her heirs, and
A promises for himself, his heirs and successors in interest that Blackacre will not be
transferred). Valid and enforceable through K remedies (damages and injunction)
5. Getting around the rule => you can leave a valid fsd or fssel that effectively restrains
alienation by its requirements (difficult to sell w/ the restriction). This was used in
Mountain Brow Lodge (p 240). There was a use restriction (as well as a forfeiture
restriction). Even though the forfeiture regulation was struck out, the use restriction was
also an effective restraint on alienation, b/c only the lodge could use the land.
F. FUTURE INTERESTS
1. Interests retained by transferor
a) reversion =>
i. the interest remaining in a grantor who transfers a vested estate of a lesser
quantum than that of the vested estate which he has
ii. alienable, devisable and descendable (inheritable)
iii. NOT subject to RAP
b) possibility of reverter
i. the interest remaining when an owner carves out of his estate a determinable
estate of the same quantum (follows fsd, usually)
ii. NOT subject to RAP
iii. not available in CA (it’s a right of entry instead)
iv. intervivos transfers available in most but not all jurisdictions (p 238)
v. s/l begins to run immediately upon termination of the fsd
c) right of entry
i. interest remaining when an owner transfers an estate subject to condition
subsequent and retains the power to cut short or terminate the estate.
ii. In many states must be exercised w/in certain time limit. Also, some states (CA)
require recording every 30 yrs to maintain the interest
iii. NOT subject to RAP
iv. intervivos transfers available in most jurisdictions
v. When s/l begins to run is jurisdictional. Some states say immediately after cond’n
occurs (CA), others say not until exercised (weird)
2. Interests created in a transferee
a) Remainder
i. follows quietly upon the termination of the prior possessory estate (but it can still
be called a remainder if it divests O)
ii. vested remainder => taker is ascertained and not subject to condition precedent.
• indefeasibly vested => certain to become possessory
• vested subject to divestment => can divest if an event occurs “to A for life,
then to B and her heirs, but if B does not survive A then to C and her heirs.
B has vested remainder in fssel, and C has a shifting executory interest in fsa.
Look carefully at the language. IF the limiting condition is in the same
clause as the gift then it creates a contingent remainder (…then to B if B

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 survives A, and if B does not survive A then to C…creates alternate
contingent remainders)
• vested subject to open => if the class isn’t closed at the time of a class gift.
Note that these remainders are NOT vested for purposes of the RAP
• Class gifts => in add’n to vested subject to open stuff, know that once a
member of the class gains actual possession, no more unborn members can
join (unless they’re in utero and born alive).
iii. contingent remainders =>
Taker is unascertained (eldest son of A) OR
Contingent upon some event other than nat’l termination of preceding estates.
Subject to RAP
In a few jurisdictions, contingent remainders aren’t alienable
b) Executory interest
i. a future interest in a transferee that must, in order to become possessory,
1) divest or cut short some interest in another transferee (shifting)
2) divest the transferor in the future (springing)
OR, there’s an oddball one that follows fsd (called executory interest for
historical reasons)
ii. subject to RAP b/c subject to condition precedent
iii. In CA, these are called right of entry, but its just a name change. They act like
executory interests
G. Rules Furthering Marketability by Destroying Contingent Future Interests
1. Rule in Shelly’s Case (RIP) (p 284)
a) One instrument (b) creates a life estate in A, and (c) purports to create a remainder in
persons described as A’s heirs (or the heirs of A’s body), and (d) the life estate and
remainder are both legal or both equitable, THEN the remainder becomes a remainder in fs
or fee tail
b) Then apply merger rule, and POOF, A has a fsa (or fee tail)
c) This is a rule of law that applies regardless of the testator’s intent
d) This rule has been abolished in almost all states (but in a few, its not retroactive, and in a
few it still applies)
e) Furthers marketability by creating an immediately alienable interest in A
2. Doctrine of worthier title (RIP) (286)
a) If O, during his lifetime, conveys title “to A for life, remainder to O’s heirs” its presumed
to be a reversion in O.
b) rule of construction only; this is rebutable if grantor really intended it.
c) abolished in most states
e) benefit cited => O keeps his options open and O can sell his reversion
3. Doctrine of destructibility of contingent remainders (RIP) (287)
a) Contingent remainder is destroyed if it hasn’t vested by the time the preceding freehold
estate terminates
b) Example: to A for life, then to the heirs of B. If B is still alive at A’s death, then the
remainder is still contingent. In DDCR jurisdictions, the remainder would be destroyed. In

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 jurisdictions not following DDCR, O regains the property in fssel until the remainder vests
(but its now called a springing executory interest).
c) came from feudal desire to prevent gaps in seisin, (and therefore gaps in feudal incidents),
but it also furthers alienability
d) GONE in most jurisdictions. They now provide for a reversion in fs to O which is subject
to divestment by the contingent remainder. (see example, above)
4. Common Law Rule Against Perpetuities RAP
a) “No interest is good unless it must vest, if at all, not later than twenty-one years after
some life in being at the creation of the interest”
b) Three Steps In ANY RAP Problem
1) IDENTIFY THE INTERESTS
2) IS EACH INTEREST VALID UNDER RAP?
a) Vested (ascertained taker and no conditions precedent) OR
b) Interest retained by O OR
c) Measuring life
1) Definition => life in being (or in utero and later born alive) at
creation of the interest such that the interest will vest during the
person’s lifetime or within twenty one years of the person’s death
2) each interest can have a different measuring life
3) The “life” can be a group of people (in effect, you use the survivor)
4) Time of conveyance = when conveyed or when testator DIES
for a will.
5) The life doesn’t have to be someone in the instrument (To A for
life, then to the children of B who survive B is valid under RAP
because B is a measuring life
6) What’s required is that it be someone causally related to vesting.
3) If one or more interests are INVALID, what is the remedy for the violation?
Common Law Remedy
•Blue Line rule: Strike out the language creating the offending interest BUT
see below
•Doctrine of Infectious Invalidity => if striking the interest creates
something v. different from what the transferor intended, the entire thing gets
stricken
For other remedies, see Alternatives section, below.
c) Picky Details
1) Fertile Octogenarian => for purposes of RAP, there is no reality. Any living
woman is considered capable of having a child
2) Unborn widow => to A for life, then to A’s widow, if any, for life, then to A’s
issue then living. A’s issues’ contingent remainder is invalid. Can’t use the widow,
b/c she may be unborn at the time of the conveyance, and can’t use A, because the
widow might live > 21 years.
3) Class Gifts => A class gift does not vest for the purposes of RAP until the
interests of ALL class members vest (note that this is different than vesting of class

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 gifts in general). Therefore if a class is vested subject to open, it is NOT vested for
the purposes of RAP. The entire class gift stands or falls together.
4) Gifts to charities aren’t subject to RAP
d) The Rule is no obstacle to a perpetuity if you hire a good lawyer
1) Use two instruments, the first of which creates a reversion/etc in O, then transfer
that interest to whoever. Its valid under RAP
2) First transfer the whole property to the holder of what will be the future interest,
but form a K to transfer fsd to the person you want to hold the possessory fsd.
e) Alternatives to the Common Law Rule
1) Cypres => try to come as close as possible to grantor’s intent w/out violating rule.
Example => To A for life, then to first child of A to reach 30. The age restriction
would be changed to 21.
2) Wait and See => first look and see if its valid under c.l. RAP, but if not wait and
see if it vests too remotely (wait until 21 years after everyone causally related to
vesting is dead).
3) USRAP =>Wait and see for 90 years…
To use =>
• is it valid under c.l. RAP?
• if no, it is still valid if it vests within 90 years of creation.
• If 90 years pass and it doesn’t vest, court can use Cypres.
Court can use Cypres b/f 90 years if (1) its obvious it won’t vest in 90 years
or (2) it’s a class with some vested members, but others aren’t vested
IV. JOINT OWNERSHIP
A. TENANCY IN COMMON (TC)
1. Definition => each tenant owns separate but undivided interests. Each owns right of
complete possession, but not exclusive possession
2. Alienability => Interests are alienable, descendable, devisable.
3. Presumption => at old c.l., presumption was in favor of JT. NOW there’s a presumption
in favor of TC.
B. JOINT TENANCY (JT) (322)
1 1. Definition => Each owns the undivided whole of the property with right of survivorship.
2 2. Creation => Four unities must be present
a) Time => each interest must be acquired or vest at the same time
b) Title => all must acquire title by the same instrument or by joint adverse possession.
JT cannot be created by intestate succession.
c) Interest => equal, undivided shares and identical duration of interest.
d) Possession => Must have right to possession of the whole (but after creation, one JT
can voluntarily give exclusive possession to another JT)
e) In some jurisdictions, instrument must actually say “with right of survivorship”
3 3. Right of Survivorship
Outstanding feature of JT. Upon death of one JT, his interest dissolves. His heirs don’t
get it, the other JTs do.
4 4. Severance => converting JT to TC

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 a) by agreement among JTs
b) one unity is no longer present (but see conveyance of leasehold, below)
c) One party unilaterally severs => no notice or permission is necessary except as
required by statute (CA)
i. conveying interest to third party (straw man) or one’s self as TC (no notice
necessary, but in CA if JT is recorded, severance must also be recorded). See
Riddle v. Harmon, p 326.
ii. Conveying interest to another JT (destroys unity of title and time)
iii. Conveying estate of lesser quantum (eg a lease) => result is jurisdictional
a) permanent severance b/c destroys unity of interest and possession.
b) no severance => lease ends when grantor JT dies; survivor isn’t bound by
lease. Why? Must intend to sever in these jurisdictions
c) temporary severance (2 types)
(1) conditional severance => if lease ends and everyone is still alive,
JT returns. If not, JT’s gone for good.
(2) partial severance => JT severed until lease ends. JT returns when
the lease is over, regardless of who dies.
iii. Mortgage? Depends on jurisdiction. If mortgage = transfer of title to
mortgagee, then severed. If mortgage = lien, doesn’t sever and if mortgagor
dies poof lien is gone. Most treat as a lien.
C. RIGHTS AMONGST CO-TENANTS
1. Rent => tenant in possession isn’t required to pay rent unless he ousts another tenant or
unless he requests costs of repairs, etc in an accounting proceeding. Then reasonable
rental value will offset costs.
2. Accounting => equitable proceedings
a) Rents and profits
If cotenant collects more than share from third parties, he must account for that
b) Taxes, mortgage payments and liens
Co-tenant paying more than his share of these is entitled to contribution from others
(can bring action immediately)
c) Repairs and improvements
1) necessary repairs =>no affirmative right of contribution (but gets the cost of them
in partition action)
2) improvements => no affirmative right of contribution, and no value in partition,
but improvement (if possible in physical partition) or the value of it (not the cost)
will be awarded to the improver in partition.
3. Ouster => If a co-tenant is ousted, can sue for damages (reasonable rental value) or an
injunction
4. Lease to a 3rd party =>
a) Statute of Anne => recognize the lease and proceed under the Statute of Anne.
Entitled to portion of the rent. OR
b) Attempt to share possession, get ousted, then sue lessee as described under ouster
5. Fiduciary Duties => none unless they’re family members

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 6. Adverse possession by tenant in possession => can be done but v. difficult to establish
adversity
7. Partition => Co-tenants can force partition
a) Physical (in kind)=> court will physically divide the premises if possible. Favored
over partition by sale, supposedly, but partition by sale is v. common.
b) By Sale => Sale of proceeds with division according to share (value of
improvements, cost of repairs, etc). Ordered when (1) the physical attributes of the
land are such that partition in kind is impractical or inequitable and (2) the interests
of the owners would be better promoted by partition by sale.
V. MARITAL PROPERTY
A. TENANCY BY THE ENTIRETY
1. Definition => both are seized of the entirety. Regarded as one person. Except in HI, can
only be created in husband and wife. Only available in ~1/2 of states. Not available in
community property states.
2. Creation => all four unities (time, title, possession, interest) are required, plus the unity of
marriage. Divorce terminates it.
3. Cannot defeat survivorship by conveyance to a 3rd party.
4. Alienability => 3 approaches plus defunct C-L rule
a) Old C-L rule => husband could convey, etc, and his creditors could reach it. Wife had
survivorship only. RIP.
b) Either H or W can convey, but it doesn’t destroy survivorship. Creditors can reach
property.
c) Neither H nor W can convey acting alone. Creditors can’t reach it.
B. COMMUNITY PROPERTY
1. Only available in the eight community property states
2. Community Property is earnings while domiciled in community property state. Anything
purchased with community $ unless BOTH spouses agree to change it to separate property.
(Compare w/ separate property => anything acquired before marriage, or anything
acquired afterwards by gift, devise, or inheritance)
3. Created by => obtaining property while married. Strong presumption that jointly held
property is community property (but possible to have JT or TC property, and so can rebut
presumption)
4. Conveyance => Both spouses must consent. But, one partner can be the manager of the CP.
Fiduciary duty to act in good faith (but good judgment is not required).
5. Gifts => can be set aside by either spouse
6. Debts => creditors of either spouse can reach all community property
7. Mixing Community and separate property (comes up when dissolving)
a) training/talent brought into marriage => earnings from this are community property
b) interest from separate property remains separate (unless commingled)
c) businesses brought into marriage => if W’s business appreciates during marriage, result
depends upon whether appreciation is due to W’s labor, or just due to investment.
i. if appreciation due to labor => community property (but upon dissolution W gets
value of her investment back)

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 ii. if due to investment only => separate
d) Separate property as down payment, but balance paid with community funds. Depends.
i. down payment was gift to community (if deed in H&W’s names)
ii. loan to community (so W gets down payment + interest upon dissolution)
iii. community + separate interests
iv. loan by community to W to pay off.
v. In CA, statute says its an interest free loan to the community.
C. COMMON LAW STATES
1. Rights of surviving spouse
a) Dower => traditionally just for W. Get life estate of 1/3 of all freehold land of which H
was seized during the marriage and which was inheritable by their issue. This attaches
even if property is transferred. Gone in many states. Never attaches to JT property.
b) Curtesy => life estate in all freehold land of which wife was seized during marriage and
which was inheritable by their issue. There must be issue. RIP as is. If it still exists, its
now equal to dower.
c) Elective Forced Share =>
i. Elective => choose this or recognize the will. (or dower, if available)
ii. Forced share => amount determined by statute. Gets a share of the probate
estate.
iii. Usually doesn’t apply to life insurance or to property held in JT with someone
else.
iv. Intervivos gifts can defeat forced share, but not if a court determines that that was
their intent.
v. Attaches regardless of length of marriage (fair?)
d) Uniform Probate Code approach
Surviving spouse gets a percentage of augmented estate (joint assets) The percent is
based on length of marriage.
2. Rights upon dissolution => divided equitably according to 1 of 3 approaches
a) Equitable division of all property => regardless of when/how acquired. Considers
things like length of marriage, custodial provisions, need, etc (p 377). In some states
there’s a presumption in favor of 50/50.
b) Division of marital earnings => all property acquired during marriage except by gift,
inheritance or descent (e.g. only earnings). Like community property.
c) Division of marital property => all property acquired during marriage no matter how.
d) Professional good will => reputation that generates future business (difference between
this professional and an average professional). Divisible. Elkus v. Elkus (Frederika von
Stade case)
e) Contribution to education of spouse => jurisdictional, but sometimes recoverable
D. COMMUNITY PROPERTY STATES (CA, AR, ID, LA, NV, NM, TX, WA)
1. Rights of the surviving spouse
a) Will => each spouse has power to devise 1/2 of community property
b) Intestate => spouse’s share passes to survivor (5 states, including CA) or it passes to
heirs.

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 c) In CA => Quasi community property => survivor gets half. Defined as personal
property anywhere and real property in CA that would have been community property
had the decedent lived in CA at the time of acquisition.
2. Upon Dissolution
a) Community property => jurisdictional. Some divide equally (CA); others divide
equitably
b) Separate property => generally kept separate
c) Quasi-community property => also divided. Same definition as for survivorship, except
that any real property is included wherever its located.
d) Commingled community and separate property, see overall community property section
for what happens.
E. MIGRATING COUPLES (P 403)
1. General Rule => the character of the property is depends on the domicile of the couple at the
time of its acquisition. It doesn’t change its nature when the couple moves.
2. Exceptions
a) Move to community property state => couple can change separate property to community
property if they want
b) Quasi-community property => upon death/dissolution, several community property states
redefine some separate property as quasi-community
VI. LANDLORD-TENANT LAW
A. BASIC RULES FOR CREATION/TERMINATION OF TENANCIES
1. Term of years =>
a) Creation/Def => estate that lasts for discrete period of time. (To A for ten years). Can be
determinable (To A for ten years so long as used for school purposes)
b) Terminates automatically
c)
2. Periodic tenency (favored) =>
a) Creation/Def => lease for a period of some fixed duration that continues for succeeding
periods until either L or T gives notice of termination (To A from month to month)
Creation by implication: If no period is specified, its a matter of interpretation. Can
go by when it says payment is due (600 payable on the 1st of each month). If rent is
not reserved, it may be a tenancy at will.
b) Termination => requires notice
(1) C-L => 6 months notice to terminate year to year. For less, equal to length of
period but not exceeding 6 mo. Must terminate on last day of a period.
(2) In CA, only 30 d notice is required. Similar in many states. Also, can be in
middle of period.
3. Tenency-at-will =>
a) Creation => If lease expressly says, "terminable at the will of either party" or if someone
is given possession with no time period and no rent specified (usually in exchange for
services).
• If its only terminable at the will of the lessee, then its a life estate determinable, not
a tenancy at will.

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 b) Termination =>
(1) at death of either party
(2) upon sale of property
(3) at the will of either party => no notice is required
B. DELIVERY OF POSSESSION => JURISDICTIONAL
1. Third Party is occupying (holdover tenent)
a) English rule => L must deliver actual possession (implied covenant).
See Haman v. Dusch in supplement for policy arguments both ways
b) American rule => L delivers only legal right to possession. Its T's responsibility to assert
this right.
2. Absent third party with better title (L rented to them first)
• B/f taking possession => T can rescind K (even under American rule)
• After taking possession => no legal remedy until 3rd party shows up and makes trouble.
C. ASSIGNMENTS AND SUBLEASES
1. Definition
a) Assignment
i. Majority (C-L) rule => T1 transfers entire interest under the lease
But majority let T1 retain right of entry for breach of the lease. A minority
calls this a sublease, though.
ii. Minority => What matters is intent of the parties.
b) Sublease
i. Majority (C-L) rule => T1 transfers anything less than entire interst (even 1 day
less). T1 thus retains a reversion (usually, but see minority view above on right of
entry)
ii. Minority => Look at intent of parties
c) Partial assignment vs sublease
If T1 transfers all his rights to a portion of the land. Majority treats as partial
assigmment, rather than sublease.
2. Effect on rights of T and L
1. Privity of Contract (PC) => required for K claims (must be K between the two parties)
2. Privity of Estate (PE) => Exists between L and original T while in possession.
Assignment kills PE, but sublease doesn’t. L can recover at law for breach of covenants in
the lease that run w/ the land (like covenant to pay rent) only against T’s with which L is in
PE.
3. Sublease => doesn't disrupt PE
a) Doesn't disturb privity of contract (PC) or PE between T and L.
b) While in possession, T1 is in PE and PC with T, but not in either with L unless T1
expressly agrees to uphold the original lease. Therefore, L can no longer go after T1
for anything at law.
4. Assignment => DOES disrupt PE
a) Doesn't disturb PC with T. Vaporizes PE, though. (but bonus, b/c assignee is in
PE with L now)

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 b) While in possession, T1 is in PE with L. If T1 assigns, though, everything
evaporates and L can't go after T1 for anything T2 does, unless T1 has agreed to
uphold original lease, in which case PC exists to support a c/a by L.
3. Right to sublease or assign
a. No express provision in lease => T can sublease or assign
b. Provision forbidding assignment or sublease => seems ok. But check w/ Peterson
c. Provision requiring L's permission to sublease or assign
1. Majority => L is free to unreasonably refuse consent
right to choose T; unambiguous reservation of absolute discretion; right to
realize increased value
2. Minority => L must be reasonable (good faith requirement). Must have a
commercially reasonable objection to the assignment
unreasonable restraint on alienation; expectation of good faith on part of K
parties;
D. DUTIES OF TENANTS (RIGHTS OF LANDLORDS)
1. Waste => T has duty not to commit waste
voluntary waste => T acts to commit waste
permissive waste => T fails to act and it damages property (at old C-L T had general duty to
make repairs…not followed anymore)
NOW => duty to keep clean and sanitary; no defacing/damaging building
2. Holdover tenants
a. Def => Tenant stays on wrongfully (e.g. after lease is up or stays on w/out paying rent).
b. L’s remedies =>
i. eviction (treat as a trespasser)
ii. expressly or impliedly allow T another term =>
• can create periodic tenancy or term of years (jurisdictional). Usually
periodic. If term of years is created, its one year maximum.
• If L accepts a rent check, he’s consenting to extension
• If L says, stay but at higher rent, most courts will enforce the higher rent.
3. Self Help
a. When this arises? Holdover, breach of covenant to pay rent.
b. Common law rule => Self help is available if
i. L is legally entitled to possession and
ii. L’s means are peaceful (no turning off electricity, etc)
c. Some jurisdictions have a general rule against self help, b/c they feel that L should resort
to judicial process. In some jurisdictions, parties can contract around this rule.
4. T breaches covenant in lease (like covenant to pay rent)
a. Old Common-Law => L cannot terminate lease b/c covenants were independent. L’s
remedy was to sue for damages.
b. Modern => the covenants are dependant and if T fails to pay rent L can recover
possession (evict on 3 d notice => if T cures w/in 3 d, no eviction)
5. Tenant who Abandons
a. Duty to Mitigate Damages

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 i. Not all jurisdictions impose this duty (in CA, no duty to mitigate IF lease
allows subletting/assignment subject to reasonable conditions)
ii. L is required to make a reasonable effort to mitigate
iii. Burden of showing failure to mitigate is sometimes on T, sometimes on L
iv. Policy pro => efficiency, fairness to T
v. Policy anti =>
• T is imposing a duty on L by wrongdoing
• T has purchased interest in land. L needn’t concern herself w/ abandonment
• shouldn’t have to deal w/ a new tenant
• encourages abandonment
b. When no duty to mitigate damages
i. Do nothing, sue T for rent as it accrues or in a lump sum
ii. treat lease as terminated and resume possession (abandonment = implied offer of
surrender and L can expressly or impliedly accept). L can sue for damages in most
jurisdictions after surrender (rent – fair rental value after surrender)
iii. retake possession on tenant’s account => NOT accepting surrender; not all
jurisdictions allow this.
• L can relet on T’s account. If L gets < rent, can look to T for damages. If L
gets > rent, some jurisdictions give difference to L, some to T.
6. Security Devices
L can retain amounts reasonably necessary to remedy a default, repair problems caused by T
(but not ordinary wear and tear), and for cleaning if necessary.
E. DUTIES OF LANDLORDS (RIGHTS OF TENANTS)
1. Old common-law rules
a. Condition of premises => caveat lessee
b. Duty not to interfere w/ T’s use and enjoyment =>
• implied covenant of quiet enjoyment => not breached unless T is physically evicted
by L
Remedy: L could terminate covenant to pay rent
• implied covenant of title => L must deliver title (but not breached unless someone
comes w/ better title and interferes)
• implied covenant to deliver vacant premises => depends on whether jurisdiction
follows English or American rule (see holdover tenant discussion above)
c. Tort liability => none
2. Modification of old common law rules
a. Condition of premises
i. if furnished, short term rental property, then IW of H
ii. duty to disclose known, dangerous latent (unobvious) defects
iii. duty not to fraudulently misrepresent conditions of premises
iv. Illegal K defense => K to rent premises that violate housing code are illegal and
unenforcable (defense to eviction)
• Some courts hold must have been illegal at time K created
• legislature must have intended housing code provision to allow this
• must be substantial violation

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 • L must have actual or constructive notice of violation
b. Interference w/ use and enjoyment
i. Constructive eviction doctrine => T has been constructively evicted if L substantially
interferes w/ T’s use and enjoyment
• L does something that drives T out (acts)
• L fails to provide heat, electricity and L has an affirmative duty to do so (in lease)
(omissions + affirmative duty to act)
• sometimes L is liable for failing to control actions of other tenants who interfere w/
use and enjoyment
• covenant to pay rent is dependant upon covenant not to constructively evict
• Still an important doctrine, particularly for commercial leases
ii. Remedies for breach of covenant of quiet enjoyment (constructive or actual)
• T can leave, terminate lease and sue for damages
- T takes risk that a court will find no constructive eviction, so you’ve
abandoned
- If you wait too long to leave, sometimes courts find forfeiture
- T must give L notice and reasonable time to correct (contrast w/ IwofH)
• Stay and sue for reduction in value
- some jurisdictions allow this but it’s a minority. Could find waiver, etc.
- STILL MUST PAY RENT (or you’re a defaulting T)
iii. Partial constructive eviction
• note that partial actual eviction means T pays no rent at all
• some courts say no rent, some reduction in value
c. Tort liability
i. General rule => No liability
ii. Exceptions => L is liable for
- negligent repair
- common areas => duty of reasonable care to maintain
- latent defect => duty to disclose (same as old cl)
- public use => if L knows its unsafe for intended public use, L is liable if
member of public gets injured
- violations of housing code that cause injury
3. Modern Rules
a. Implied Warranty of Habitability (IwoH)
i. What => Regard T as purchasing housing from L and there’s an IWoH b/c T is
bargaining for a place to live. In CA, established in Green v. Superior Court
ii. Breach
• L must provide bare living requirements, substantial compliance with
housing code that materially affects health and safety
• Conflict in CA between Knight and Peterson as to whether it’s a fault
standard => if fault, L must have constructive knowledge, reas time to fix; in
Knight, Court says breach occurs when it become uninhabitable.
• In CA, look to violations of §1941.1 for breach
iii. Waiver? Most jurisdiction say no. CA says no.

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 iv. Remedy
• T can remain in possession but deduct rent (no need to vacate)
• Defense in an eviction proceeding
• T can terminate lease and sue for damages
• T can sue for specific performance, but doesn’t come up often b/c T usually
just needs the money
• T can sue for damages
(1) f.r.v. habitable – frv as is (rent is evidence of frv; not dispositive)
(2) rent – frv as is (officially adopted in CA, but not being used)
(3) % diminution (% decrease x rent = damages)
(4) (frv uninhab/frv inhab) x rent = amount owed (ratio approach)
(5) tort measure – recover damages for discomfort, etc
• Repair and deduct remedy (CA) 2 x per year T can use rent to repair
violations if L has notice (from housing code in CA)
v. Policy
• No longer makes sense to talk @ fixit T in our society
• urban apartment dweller isn’t purchasing an interest in land
• Step forward b/c covers omissions, no need to move out, defense against
eviction, non-waivable
Compare w/ illegal K defense and constructive eviction doctrine.
b. Tort Liability => modern rule (in CA at least)
• L owes T duty of reasonable care to provide and maintain the rental unit in safe
condition.
• Exculpatory clauses => In CA these clauses are void. Maybe valid in some
jurisdictions
c. Retaliatory Eviction
i. How it happens=> T complains @ IWoH violations and gets slammed.
ii. Doctrine => L cannot evict w/ retaliatory motive.
iii. Steps to claim retaliatory eviction
(1) make sure it exists in your jurisdiction
(2) T must show retaliatory motive (most have presumption if it occurs w/in
specified time) => If T succeeds, no eviction and T owes frv
(3) L CAN terminate the lease if he’s going out of business
F. RENT CONTROL
1. Caps on rent increases for periodic tenancies. L is entitled to a reasonable return.
2. Strict =>
• no increase even during vacancies
• is this a taking? Most challenges fail, but CA has eliminated strict rent control (Costa Bill)
3. Vacancy Decontrol
When T lawfully vacates, L can raise to market value
(Costa law in CA => single family homes and condos are exempt from rent control)
4. Policy issues

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 • efficiency => most economists say rent control decreases incentives to provide housing
and to repair existing stock b/c no profit => result = housing shortage and decaying housing
stock. (counter argument => most r.c. plans allow L to raise rent when L repairs)
• inequality of bargaining power => T has no power in many rental markets. State must step
in to correct this breakdown
VII. SERVITUDES
Land use arrangements arising from private agreements
A. Profits => rights to take off land things part of the land (timber, minerals, game)
B. License => not really an interest in land (not covered by S of Frauds). Express or implied.
1. Revocable at will
2. Exceptions to #1
a. license coupled w/ interest in land => right to cut timber + irrevocable license to enter
onto land to do it.
b. estoppel => If a representation was made upon which the promisee relied to his detriment.
License is irrevocable until promisee has recouped expenditure.
C. EASEMENTS
1. Terminology
a. Affirmative => gives right to go do something on servient tenement
b. Negative => holder can prevent servient tenement holder from doing something on his
land
Four types => light, air, receive support (from wall), right to receive flow of H2O
from artificial stream. (conservation, etc, are legislative easements) Always
appurtenant.
c. Appurtenant => benefits parcel of land (dominant tenement)
d. In gross => benefits an individual
2. Creation
a. Express => Must be a writing
BUT, when deeding property, the grantor cannot reserve an easement in favor of a
third party. (CA doesn’t follow)
Negative easements can only arise by express grant in this country.
b. implied on basis of prior existing use => easement arises upon severance…based upon
reasonable expectation of parties
i. use must be apparent upon reasonably prudent inspection at time of severance
ii. must be reasonably necessary to continuing enjoyment
iii. some jurisdictions don’t allow implied reservation unless strict necessity
(demand a writing). No pbl with implied grant.
c. implied on basis of necessity => easement arises when:
i. prior unity of title
ii. when divided, the parcel was landlocked
iii. how necessary? Some say strict, others reasonable necessity
d. created by prescription => analogous to adverse possession
i. use must be open & notorious, adverse, and continuous for statutory period (use
same period as for adverse possession)

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 ii. Fiction of the lost grant => these jurisdictions assume fictional lost grant of
easement. If owner objects during statutory period, this defeats the presumption.
iii. Normal jurisdictions => Owner must successfully stop the use to toll s/l.
iv. Safe harbor => in CA, legislature says post signs “right to pass by permission and
subject to control of owner… want to encourage right to pass
v. Exclusive use? Not necessary, but if you’re using only as member of public, only
the public can get an easement.
vi. public prescriptive easements are allowed, but courts try to protect O
3. Enforceability
a. appurtenant
i. benefit => passes with possession of the land, no matter how acquired (even
wrongfully)
ii. burden => passes w/ possession of the land, unless taker is a bona fide purchaser
protected by the recording acts
iii. Recording acts
• Notice statute => if bona fide purchaser lacks notice of easement that could
have been recorded, then she takes free of the easement. Notice can be actual
or constructive (inquiry or record notice).
• Race notice statute => Same as above, except that purchaser must also
record first
b. in gross
i. burden => passes w/possession
ii. Is benefit transferable? Trad’l c-l said no. Now, look at intent of parties.
iii. Divisibility (multiple new holders) => sometimes yes, other jurisdictions apply:
one stock rule => they all must agree on use & transfer
4. Scope of an easement –interpretation of written instrument
a. Generally based on intent of parties => look at original purpose + any development
reasonably foreseeable at the time easement created
b. easement by necessity => determined by the necessity
c. prior existing use => determined by that use, but expansion allowed for reasonably
foreseeable increase in use
d. prescription => determined by nature of activity. Can increase a bit, but must be same
type (eg foot traffic)
5. Termination of easements
a. Unity of Title—dominant and servient owned by one person. Extinguished
b. If limited for period of time, it ends automatically (or can create in fsd, life, etc)
c. Estoppel—owner of servient tenement can reasonably rely on representation that it will no
longer be used
d. abandonment—must intend to abandon—demonstrate orally or w/ action
e. written release
f. for easement implied by necessity => if necessity ends
g. prescription—open &notorious adverse prevention of use for statutory period.
D. COVENANTS RUNNING WITH THE LAND
1. Creation of Covenants

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 a) Real Covenants ($ damages, run at law)
i. a writing is required (considered an interest in land for S of F purposes)
ii. cannot arise by implication or prescription
b) Equitable Servitudes (injunctive relief, running in equity)
i. a writing is required as for real covenants
ii. cannot arise by prescription
iii. Implication
aa) Majority => If common plan in a subdivision, if a particular lot went out
w/out the restriction to other lots, court will find an implied reciprocal
negative equitable servitude.
bb) Minority => No covenants by implication
BUT => If there’s a common plan and the original purchaser made a
promise to the developer (though not to others) then courts allow the
others to sue on a third-party beneficiary K theory.
2. Enforcement of Covenants (see attached chart)
a) Definitions
i. Intent => refers to intent of the parties at the time the covenant was created.
ii. Touch and concern => ambiguous. Land use restrictions always touch and
concern. Also, promise to pay money for upkeep of common areas. Promise to do
laundry wouldn’t work.
iii. Horizontal Privity
aa. Mutual privity => minority of jurisdictions require this. cov/or and cov/ee
must have mutual and simultaneous interest in the land. Possessor + future
interest; easement
bb. Successive privity => grantor/grantee relationship. Promise must be
made at time of grant.
iv. Vertical Privity
aa. strict test => must succeed to entire estate of covenantor by an actual
transfer (fsa/life estate wouldn’t cut it; adverse possessors don’t work)
Required for burden to run at law.
bb. relaxed test => must be a successor in interest (of any duration). This
covers everyone but adverse possessors, who get off the hook. Required for
benefit to run at law.
v. Notice
Actual
Constructive =>
Record notice (its recorded)
Inquiry notice (look around stupid)
b) Real Covenants
i. Intent =>
both parties must intend it to run (true for burden and benefit)
ii. Burden touch and concern =>
Burden => YES. Or it won’t run

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 Benefit => no, not necessary for benefit to run (If I promise to come by and
clip the flowers every month, and you sell it to B, B can enforce the covenant
against me. But, my burden doesn’t pass on when I sell my lot next door)
iii. Benefit touch and concern =>
Benefit => YES. Or it won’t run
Burden => some courts say the benefit must touch and concern or the burden
won’t run, others don’t require it.
iv. Horizontal privity =>
Burden => required (mutual or successive depends on jurisdiction)
Benefit => split (Restatement says no, but often it’s a yes)
v. vertical privity =>
Burden => strict test
Benefit => relaxed test
vi. notice=>
Burden => recording acts may protect a purchaser w/out notice
Benefit => not required
c) Equitable Servitudes
i. Intent => yes for both burden and benefit
ii. Burden touch and concern =>
Burden => Yes or it won’t run
Benefit => No
iii. Benefit touch and concern =>
Benefit => Yes or it won’t run
Burden => split as above for real covenants
iv. Horizontal and vertical privity =>
Not required for either the benefit or the burden to run
v. Notice =>
Burden => Actual or constructive notice is required
Benefit => no notice required (its like free money)
3. Scope of covenants
• This involves interpretation of the written instrument
• Want to know the intent of the parties at the time of the creation of the covenant
• Most litigated issue is what a single family residence is
4. Termination of Covenants
1) Duration can be limited by the terms of the covenant or by statute
2) Merger => If burden and benefited land are owned by same party
3) Abandonment => must be clearly expressed intent to abandon
4) Estoppel => waited too long to sue for breach (s/l or laches)
5) Changed Conditions =>
If conditions have changed so much, enforcement is inequitable
Must be impossible to secure the benefit of enforcement
Changes must be within the subdivision itself (not at the borders)

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VIII. TAKINGS CLAUSE
A. FIFTH AMENDMENT (plus 14th for states) …nor shall private property be taken for public use
without just compensation
B. Public Use
1. Must be taken for a public use.
2. Not necessary for it to be open to public
3. Legislative body must reasonably believe or could reasonably have believed the taking
would benefit the public
C. JUST COMPENSATION
1. Required when there’s a taking…but sometimes its unclear when that occurs
2. Fair market value
3. When formally exercises eminent domain, just compensation is required
4. Physical action by government that has effect of a taking
e.g. building a dam that totally floods O’s land
5. Government enacts a law that effects a taking
a) land use restriction (zoning your land for public park use)
b) exactions on development
c) This is where most of the fighting takes place. Court’s ultimate determination is whether
its fair for gov’t to take this action w/out compensating O. Many different tests. Unsettled
doctrinal area.

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Questions
O conveys Blackacre to A for life, then to the heirs of B. B is alive at A’s death. So now O has
Blackacre in fssel, and the heirs of B have a springing executory interest? Is that right, or is it still
called a remainder. Does it matter?

L-T questions
In a term of years, is notice necessary to terminate early? Can it terminate early?

If T assigns, T is still in PC with L, right?

If L leases to T, then T assigns to T1, then T1 subleases to T2, is T1 still in PE with L if T2
breaches covenant to pay rent?

Can L forbid assignments of residential leases? Is there a split in reasonableness requirement for
residential leases like there is for commercial leases?

Does a periodic tenancy end when L dies?

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