SUBSTANTIVE OUTLINE!!! 1.

Five Theories of Property

First, Labor, Happiness, Democracy, Personhood

NOTE - Maximize Social Happiness-Also, economic viability. 3 basic features of property rights: i. Universality- everything must be owned ii. Exclusivity- prevent others from using property iii. Transferability- ability to transfer title or possession What is Property?-"Bundle of Rights" (4 general rights) and aren't absolute. DUET DESTROY, USE, EXCLUDE, TRANSFER iv. Right to transfer v. Right to exclude vi. Right to use vii. Right to destroy 1. "Bundle of Rights"- if given establish property rights. If none, you aren't owner. b. Property Rights defined by government; Not natural, only when recognized. c. Property Rights are not absolute d. Property Rights can be divided; shared. e. Property Rights evolve as law changes The Rule of CAPTURE 1. Pierson v. Post: Unknown Objects (N.Y. 1805)2. Rule: If a wild animal is being pursued but still has natural liberty, it is not occupied until it is wounded or captured to prevent its natural liberty. Subject to control of pursuer and rendered escape impossible. Majority went w/ clearer rule. 3. Reasoning: The court uses Justinian law and other precedents to find for Pierson. Though unkind, Pierson had a right to kill and take a wild animal being pursued on unowned land. No one owns land. If Post owned the land ratiaone soli (title of occupancy, landowner is in constructive possession of wild animals therein). 2 conflicting theories: a. Formalism-applying legal principles to facts (found in majority opinion) b. Instrumentalism/Legal Realism-laws should reflect changes of time; instrument of society's needs. (found in dissent) What Acts Constitute Possession of a Wild Animal to the point that you can exclude the claims of others to that animal? 1. Do something that shows to the world that you are trying to exercise control over the animal (ex: mortally wounding) 2. Be the first to Exercise control over Mere Pursuit of the Fox is Not Enough!! Remember, possession is central to the concept of ownership, but it is not determinative. POD: c. Greene asks if Post had yelled "the fox is mine", would it matter? No change based on case. Possession doesn't mean the same things in all contexts d. Greene says Pierson's argument is best, absolute and concrete. 1

Basically, possession v. chase (closing in). Why? If you don't have a remedy, you don't have a right. e. First Possession- this case used for wild animals and later oil, water, body parts, homerun balls, etc. Who 1st deprived wild animal of liberty? f. When Does Labor Matter? Don't want to cause chaos and unneeded litigation by adopting "mere pursuit" rule? g. Capture Hypos: i. Post owns the deer because it prevented natural liberty ii. Pierson owns the rabbit because it was returned to ferae naturae iii. Pierson owns the rabbit because it still has natural liberty iv. Post own the cow because it is not a wild beast but domesticated h. On exam: i. Can object be deemed property? 1. Look at statutes and courts, then public policy, then rules; then public policy reasons encouraged by the rule. 2. In this case, promoting maximizing societal happiness through economic efficiency. Some personal development but a lot of 1st possession. Dissent is encouraging labor. **Don't be conclusory in rule or motivated by policy DISCOVERY doctrine: Discovery: not much is undiscovered today, but the idea that property could be acquired through discovery has some modern implications.

Johnson v. MIntosh (U.S. Supreme Court): The Americans were able to take over the title from the Indians because the Indians were considered a conquered people, so the dominant party wins.

Rule: The conquering nation has the exclusive title rights to land and can transfer title. The Indians are merely occupants (though they are entitled to compensation). Only US can be recipient of Indian lands. Indians only had right to use. Bases this on custom. Developed in historical context. Greene says response was natural reaction of someone taking your home. 3 ways conquerors got land: i. Purchase j. By force: killing; running off inhabitants k. Removal (Eventually) M'Intosh claim to title-Cabot discovered. US wins from Britain in war. US didn't reject Discovery doctrine. Indians have more of landlord/tenant relationship w/ US. Court uses 4 Judicial approaches: ON EXAM l. formalism-objective application of rules to fact to get your conclusion m. Instrumentalism-rules of law that reflect social change or changes in society 2

n. Legal Realism-judges make rules/laws wholly based on what is happening in society at the time (justifies or determined by) o. Critical Race Theory-establishing rules that reinforce Eurocentric legal principles and subordinates non-Eurocentric legal principles This was an action for EJECTMENT (3 Elements): A. Plaintiff has title. B. P was wrongfully dispossessed. c. P suffered damages/harm. In ejectment, D is in possession. In trespass, P is in possession. POD: p. Bundle of Sticks-Only Occupancy rights Hypo from Greene (Johnson v. M'Intosh): US invades Mars; Discover martians. US sets up court and gives land to US citizens. Martians file suit in US DC. How would rule? Court would adhere to Discovery Doctrine. Why? We didnt work to get to Mars for nothing. Arguments against? Int'l community would frown on kicking aliens out of their home planet. q. If Aliens settled in US like Bham. Then file action. What would court rule? 1st possession. r. **At times, deal w/ humanity and morality and other times, not so much. Ex/ you find unowned land: i. Find out if anyone claims to own it (govt, indigenous, private) ii. Not one body of property law, but intertwined w/ others like contracts, etc. s. **Property important to liberty and democracy 4. Joseph William Singer, Legal Theory: Sovereignty and Property- Indian property can still only be sold to government. Questions origins of American property law. Should we not pay the Indians compensation for taking their lands. 5. Humans as Property in Historical Context Slaves subject to: Rule of Capture, Rule of Conquest, Inherited, and as a Gift a. The Antelope (U.S. 1825)-3 ships, American Portuguese and Spanish, were captured by pirates near Africa and the ships carried slaves. The vessels were later captured off the coast of the US. b. The question was to admit the Africans as free or return them to their owners. Slave trade was outlawed in 1808, so the American ship Africans were treated as free. No one claimed the Portuguese Africans, so they were free. The court ruled the Spanish Africans to be returned to their owners upon proper title. c. Chief Justice Marshall claimed that slavery goes against natural freedoms. However, when there is conflict b/t natural law and positive law, law recognized as legal by the nations of power, positive law must prevail b/c a jurists could not hold anyone accountable for an illegal act that had general consent. d. There was also a comparison to the Johnson v. M'Intosh case about "conquest gives title to the conqueror." Marshall acknowledges natural law but turns and goes w/ legal positivism. Marshall had chance to say Int'l slave trade was illegal. Preserved property 3

rule of promoting labor and rule of capture. Also, ensured democracy. Tells us, to rule otherwise goes against allowing humans to be commodities. e. Dred Scott v. Sandford (U.S. 1857) Facts: Dred Scott, P and appellee, sued Sanford, D and appellant, for his freedom. Scott was a slave in Missouri and his master brought him to IL for 2 years, a state that abolished slavery. He was then taken to MN in the LA territory, which didn't allow slavery per the Missouri Compromise. He was then sold to Sanford, a citizen of NY. Proc. History: Scott sued Sanford for his freedom claiming diversity citizenship and that he was a citizen of Missouri. I assume, not mentioned, that the trial court ruled for Scott. Issues: Is a Negro whose ancestors were imported to the US and sold as property, but who are emancipated or born to free parents, a part of the sovereign people as recognized by the constitution? Frames issue more broadly to whether Scott or African Americans can be a citizen?? Holding: No Rule: The constitution does not give the power to the government to recognize the Missouri Compromise that takes recognized property from citizens when they move to states or territories that do not recognize the property. Reasoning: The court finds that Scott is still a slave under Missouri law. The court argues that the constitution allowed for slaves to be imported for twenty more years and prohibited the fed government from interfering with those property rights indefinitely by allowing escaped slaves to be returned to their owners. The court says the US government has no right to take property from owners though they move to states or territories that do not recognize slavery. Founders did not view African Americans as human or citizens (free or slave). Treated as property. Not court's place to overturn, but legislature's. Int'l and national norm for some time. Disposition: Reversed. f. Surrogacy, Slavery, and the Ownership of Life, Anita L Allen (1990)Facts: Polly Crockett was free but kidnapped and sold into slavery as a girl. She married another slave and had two little girls. Her husband was sold "way down South." One daughter escaped to Canada. When Polly tried to go as well, she was captured in Chicago and returned. She found a lawyer, slaveholder himself, and successfully sued for her freedom. She tried to buy her other daughter but the owner wouldn't sell. She sued for her daughter claiming that since she wasn't a slave when she gave birth, her daughter wasn't a slave either. The court agreed. The argument upheld was that though slavery exists, it is against the laws of God and man to deny one their freedom that has a right to it. Right to Transfer 1. Humans as Property in Contemporary Context 2. Moore v. Regents of the University of California (Cal. 1991) Big Idea: as one gains possession, someone is dispossessed. 4

Creation: many property rights are created through copyrights, patents, and trade secrets (intellectual property) Moore v. Regents of the University of California (Cal. 1990): Court found that Moore had no ownership because he never expected to retain possession of the cancerous spleen.

Four Things to Take Away from Moore o In order for an action centered on a property tort (or some other similar action) to lie there is a necessary determination that property rights may be exerted over the object-of-inquiry that the object may be legally owned and/or transferred. o The definition of property can be quite complexsimply because there is an object that can be physically possessed does not necessarily indicate that property rights may be exerted over it. o Courts and legislatures are the bodies American society has given the right to determine what may or may not constitute property. o Determining that an item may constitute property can lead to foreseen and unforeseen consequences in law and society that are informed by history and prevailing societal trends. 3. In the Matter of Baby M (N.J. 1988) Issue: Is a surrogacy contract enforceable? Can we recognize child as property of Mrs. Whitehead? Right to transfer is diminished. Adoption is considered a "gift", can't sell. Holding: No. Rule: A surrogacy contract is invalid b/c it conflicts w/ laws of NJ and public policies of the state. Best interest of child is a big RULE (though presumption is natural mother). Reasoning: Conflict w/ statutes: a. Prohibition against paying money for placement in adoption b. Laws against termination of parental rights w/o proof of unfitness or abandonment c. Laws making consent to adoption revocable i. Court says: 1. Law prohibits paying money w/ any placement of child for adoption 5

2. Termination of parental rights is serious and can only be done voluntarily to an approved agency and contracts can't terminate parental rights 3. Therefore, the adoption by Mrs. Stern is improper Conflicts w/ public policy: d. Money is the facilitator of the transaction dealing w/ humans, not child's interest e. Coercive contract f. Adoption goes to highest bidder, regardless of suitability g. Mother's consent to surrender child is revocable h. Also, potential for middlemen to make a market out of this and exploit and degrade women Court says the legislature should take up the issue. Needed counseling for mother, needed criteria for parents adopting. "Some things $ can't buy" in civilized society. Similar themes run through Marshall, Taney's opinions and now Baby M (just opposite sides). From "humans can be property" to "they can't". Disposition: Remanded for custody determination. Court ruled that Sterns were in best interest of child. Melissa. Why limit transfer of body parts? Why not limit? i. Alienability- free ability to transfer land (use w/ humans?) j. Right to transfer *Ch. 2: Owning Real Property a. Real Property-rights in land and things attached (bldgs, fences, trees) b. Personal Property-rights in movable property (chairs, pens, computers) and intangible things (patents, shares in stock) i. Traditionally, real property was most important b/c of English system handed down and major theme in American development was to develop land for productive use ii. 3 aspects of real property law (balance b/t rights of owners and interest to society: 1. Adverse possession 2. Vertical limits of ownership 3. Water law iii. Property rights are: 1. Not absolute 2. Relative 3. Good balance b/t owner and society

Adverse Possession-

acquiring land by possession for length of time, meeting certain specifications. Possessor is given bundle of rights that title holder held. *Applies to Primary Occupiers (not necessarily the Purchasers) Ex: Wrongfully thought land was theirs Invalid Deed > COLOR OF TITLE POLICY JUSTIFICATIONS FOR AP 1) Productive Use of Land 2) Preventing frivolous claims fosters repose 3) Correct Title Defects You Know who it is 4) Protect Personhood, reliance interests CONS Rewarding Theft/trespass Preventing true owner from exer.autonomy Does not Preserve Envir. Concerns Undermines the whole legal system (deed process) 6

5) Discourage Abandonment

No Clear Cut Rules = increase Litigation

1. a.

Elements of Adverse Possession AN ECHO Actual Possession-The claimant must actually

physically use the land in the same manner that a reasonable owner would, given its character, location and nature b. Exclusive PossessionThe claimants possession

cannot be shared with the owner or with the public in general c. Open and Notorious PossessionThe claimants

possession must be visible and obvious, so that if the owner made a reasonable inspection of the land, he would become aware of the adverse claim EX:
BLACKACRE is undeveloped wild land suitable only for hunting and fishing. If D builds a small hunting cabin on the land, and enters several times per year to hunt and fish, this will meet the open, notorious, and visible requirement if a typical owner of similar property would make such limited use. But it would not qualify if a typical owner would use the property more extensively, build a much bigger dwelling, etc.

d.

Adverse and Hostile Possession/Claim of Right i. Any permission to use the land by the owner negates this element ii. But if owner revokes permission then claim can move forward 7

To Defeat permission: 1. Show revocation of permission a. *both must be clear, not "maybe" e. Continuous PossessionThe claimants possession

must be as continuous as a reasonable owners would be, given the character, location, and nature of the land f. For the Statutory PeriodThe period for adverse possession ranges from 5 to 40 years, depending on the state. The most common ranges are 10, 15 and 20 g. Notes**Look out for on Exam***

o One act may satisfy multiple elements **On EXAM: apply facts to ALL elements (not isolated). *Know difference b/t ejectment and quiet title. *Also look at topography of land. o Actual possession-they used it exercising control and dominion **In Alabama, there must be a consistent and persistent cutting of timber or wood from the tract of land as to be evidence of ownership (this is the minority view)**

Alabama-2 types of adverse possession Adversepossessionbyprescription a. b. Lookatcommonlawelements

Determineiftheyhavebeenmeetforthestatutory periodoftime Statutoryadversepossession

a.

Possession under color of titleyou think you have possession but your documentation is defectiveyouactundercoloroftitle

b.

Either paid property taxes or derived title by descent or devisethrough estate statutes or throughagiftorconveyance

*AL statutory period is 20yrs o unless under color of title o (then 10 yrs AND either must pay property tax OR derive by descent (intestacy) or devise (gift or conveyance thru will). AL hostility requirement holds state of mind irrelevant-"adverse" is implied by meeting other requirements

Van Valkenburgh v. Lutz

1. Brief Fact Summary A dispute between feuding neighbors. Plaintiff sues to enjoin defendant from encroaching on his land. Defendant asserts adverse possession as an affirmative defense. Rule of Law and Holding "To acquire title to real property by adverse possession not founded upon a written instrument [i.e., no color of title], it must be shown by clear and convincing proof that ... there was an ACTUAL occupation under a claim of title. The essential elements of proof being either that the premises (1) are protected by a substantial inclosure, or are (2) USUALLY CULTIVATED OR IMPROVED."

2.

2. The Adverse Possessor's State of Mind a. Most states agree that permission from the owner to be on the land is not "adverse and hostile" b. 3 approachesi. Good faith-adverse possessor truly believes they own land ii. Bad faith-adverse possessor knows its not his land and intends to take possession iii. Irrelevant-other adverse possession factors indicate a claim of right c. Fulkerson v. Van Buren (Ark. 1998) CHURCH CASE

Issues: Was the possession by the church hostile?

9

Holding: No. Rule: Required bad faith intent ("we knew from day 1 it was not ours"). For adverse possession, it is only necessary that it be hostile in the sense that it is under a claim of right, title, or ownership as distinguished from possession in conformity w/, recognition of, or subservience to the superior right of the holder of title to the land. Mere possession of land is not enough to adversely possess, and there is every presumption that possession of land is in subordination to the holder of the legal title. The intention to hold adversely must be clear, distinct and unequivocal. Church could have tried OUSTER You know you are not the sole owner Try to exclude title holders from the land Notify them you are asserting sole ownership rights How to defeat permission element of hostility Clear revocation of permission Ouster-recognizing they are sole owner and are excluding the title holder

d. Tioga Coal Co. v. Supermarkets General Corp. (Pa. 1988)

Issues: Should the test for hostility be subjective, as opposed to objective?

Holding: No. OBJECTIVE WINS Rule: If true owner has not ejected the interloper w/in statutory limits, and all other elements of adverse possession are met, hostility will be implied (objective). Reasoning: Court discusses the benefits and detriments of both subjective and objective test for hostility. Reasons for subjective: i. Becomes part of personhood ii. Make more difficult to prove adverse possession Reasons for Objective: iii. Producing effective use; discourage abandonment iv. Impossible (vague) intent (more stability wanted) v. Discourage trespass The court sides with the public policy reasons behind Justice Holmes favoring objective. If land appears to be abandoned and a trespasser uses land for statutory period, he grows attached to the land, and cannot be displaced w/out cutting at his life. *Greene says some instances where you can adversely possess govt land: Usually if not been in public use (states). 43 USC 1068 (1986)-Fed govt has allowed adverse for 20 yrs, good faith, color of title, and improvements *Ways to defeat permission: vi. Clear revocation of permission vii. Ouster 10

Dissenting Opinion: Justice McDermott dissents that Justice Holmes is no reason to change existing Pa law. He claims Justice Holmes' approach is outdated. There must be hostile possession against title holder, not someone else. Disposition: Reversed. POD: viii. Role of Intent-Most jurisdictions don't require you know Policy reasons for objective theory Personhood-identify with the property, develop attachment Avoid land piracy or trespassing-avoid rewarding bad behavior Avoids abandonment of land-promotes productive use Hard to determine intent and possessors state of mind-state of mind can change over the statutory period Question though is what is reasonable use of land-what would the actual owner do? Policy reasons for subjective theory Promote use of title recording system Land is no longer wilderness-there may be a way to actually trace the title holders that didnt exist when adverse possession doctrine developed Makes it more difficult to prove advserse possession, NO PRESUMPTION OF AP e. Nome 2000 v. Fagerstrom (Alaska 1990) **Case mentioned in book; Printed from Westlaw

Issues: Does the continuous, notorious and exclusive use of land require the existence of significant improvements, substantial activity or absolute exclusivity? Holding: No.
Rule: The condition of continuity and exclusivity require only that the land be used

for the statutory period as the average owner of similar property would use it and physical visibility is required for notoriety.
Hostility is shown by objective standard that the possessor acted toward land as if he owned it w/out permission of legal authority to give possession.

Reasoning: The court notes that the Fagerstrom's built a cabin in 1978, so they are only concerned w/ the preceding year to establish the 10yr statutory requirement. Court says that others being free to pick berries and fish is consistent w/ a hospitable landowner. Others in the community recognized the Fagerstroms as owners. So continuous, exclusive and notorious possession is established. 11

Court finds the argument of owners v. stewards of the land irrelevant. Subjectivity is not the standard for hostility. Court finds that using trails and cleaning on southern portion did not put owners on notice of hostile claim and the posts for boundaries are irrelevant especially since the one on the southern portion is missing. They also vacated attorney's fees. 3. Proving Adverse Possession

Claims normally arise in two procedural situations The adverse possessor brings a quiet title action to confirm his title (Gurwit) The adverse possessor raises the doctrine as a defense to an owners lawsuit to recover possession (Van Valkenburgh) a. i. Judicial action is not necessary If A occupies Bs land for the required period of satisfies the adverse possession elements, A automatically acquires title to Bs land when the period ends, without litigation In this case, the claimant brings a quiet title action or a former owner may voluntarily give over the deed Tacking The adverse possession period of two or more successive occupants may be added together to meet the statutory period under this doctrine

ii.

b. i.

a. Howard v. Kunto (Wash. 1970) RULES: 1. In order to establish "continuous" possession, an actor need only possess in a manner that "ordinarily marks the conduct of owners in general, in holding, managing, and caring for property of like nature and condition. . . . It is not necessary that the occupant should be actually upon the premises continually. If the land is occupied during the period of time during the year it is capable of use, there is sufficient continuity." 2. Tacking the adverse use of predecessors is allowed when there is privity of estate. In other words, an 12

adverse possessor may aggregate the time of successive occupants, so long as possession was continuous, and the transfer of possession was in good faith. Definition of PRIVITY Reasonable connection between successive occupants of real property so as to raise claim of right above the status of wrongdoer or trespasser Privity is not destroyed where the deed relied upon did not give description of the land occupied 4 instances that would destroy continuity True owner files lawsuit to recover possession and lawsuit leads to judgment in favor of the owner True owner interrupts adverse possession claim by re-entering land and taking physical possession of the land Trespasser uses land Adverse possessor abandons possession or has significant absence from the property that does not comport with nature, church or use of the land POD: i. Tacking Basics-most states only allow if successive owners are in privity ii. Tackle These Hypos p. 1331. Gray area. No possession actually passed. The same could have happened regardless of A's statement to B.No official transfer. Also statute of frauds. More in line w/ trespasser 2. Tacking should be allowed. Successive privity. Yes. More official; privity shown. Not in line w/ wrongdoer. iii. Continuity Revisited- Summer occupancy does not destroy continuity. iv. 4 events that could destroy continuity: 1. True owner files suit for possession and judgment given in his favor 2. True owner re-enters and takes physical possession (not all states) 3. Share part of land w/ trespasser 4. Adverse possessor abandons or has a significant absence. a. *Look at disabilities p. 133-134: must be at beginning of adverse possession and cannot "tack" them Disabilities. What happens if owner A is unable to sue adverse possessor B during the states 10 year stat. period, for example, because A is insane? The period will be extended. Common Imprisonment, minority, and lack of mental capacity. LOOK AT DISABILITIES PROBLEMS - HANDOUT

Ch. 5: Estates and Future Interest 13

1. Ex/ O gives his parcel of Redacre to A for life and then to B. A has right to posses in her lifetime and then when she dies, B has right to posses. A has an estate (comes from Latin word for status) (present possessory interest) and B has a future interest (right to future possession). A Short History 1. 1066 William the Conqueror and the Normans defeated the Saxon army in England and he began distributing land to his small band of Norman followers to reward them and administer the conquered territory. He borrowed Norman feudal system which king owned all land and granted possessory rights to followers (tenants-in-chief). They provided services and incidents to king. Most common service was knight service (provide set number of knights to king's army). This led tenants-in-chief to create subtenures, where they distributed possessory rights to their own tenants. The knights in turn would grant a small portion of land to another person in exchange for payment of money or % of harvest. So knights became lords (mesne lords). Incidents included an oath of fealty, monetary payments for right of tenant's eldest son to succeed in tenancy, return of land if tenant died w/out heirs (escheat), right to possession of land until a deceased tenant's heir reached 21, and special payments in times of financial emergency. Incidents became more important b/c times of peace required less need for knights. Tenants became unhappy about payments for incidents and Magna Carta (1215) addressed this. 1290 the Statute Quia Emptores, which gave tenants right to transfer w/out lord's permission which signaled demise of feudal system and beginning of free alienability (right to transfer). a. 2 types of estates: i. Freehold Estates: 1. Fee simple 2. Life estate 3. Fee tail a. Generally held by nobles and gentry and deemed to have seisin (special form of possession), created by elaborate ceremony called feoffment with livery of seisin. ii. Nonfreehold Estates: created informally and held by common people. Much like modern lease. Modern Freehold Estates-6 freehold estates: 1. Fee simple absolute-99% of land in US; also has variants called fee simple defeasibles. Holder has all rights in metaphorical bundle of sticks. Duration is potentially infinite. By definition, no future interest accompanies fee simple. Traditionally used "and his heirs" to indicate fee simple (no interest given to heirs). Today it is presumed unless another is specified. a. It is freely: i. Alienable-can be sold or given away during the owner's lifetime ii. Devisable-can be transferred by will at death iii. Descendible-can pass by laws of intestate succession if owner dies w/out will 2. Life estate-rarely used but equitable life estate is commonly used in modern trust. When life tenant dies, the estate terminates. "for life" are traditional words of limitations. Grantor retains future interest (reversion) for when grantee dies. Also have pur autre vie (for life of another). Life estate cannot be created in favor of partnerships, corporations, or similar business entities.

*Biggest difference in modern estates and old England-Now fee simple is default. Was the life estate.
a. It is alienable, but not devisable or descendable. *Though one who holds life estate pur autre vie can devise it or allow intestate succession. As long as 3rd party is still living. 14

3.

4. 5. 6.

7.

b. Future interest is usually a reversion but if transfer is to "B for life, then to C", future interest is a remainder (held by 3rd party) Fee tail-almost extinct in US; most coveted in medieval England (keep land w/in family). Duration determined by lives of lineal descendants. Way to keep land in family. Passed from eldest son to eldest son as long a bloodline lasted. Abolished in England in 1925. America didn't like it b/c of fear it would undermine democracy and impair freedom of alienation. DE, ME, MA, and RI are only states that allow it. "the heirs of his body" were limiting words. Grantor retains reversion for when line of lineal descendants expires. Limited right to transfer: Grantee can transfer but transfers back to Grantee's descendants upon his death. Fee tail maleonly passes to male descendants. Fee tail special-only allows transfer to descendants of transferee who are parented by particular person. Fee simple determinable Fee simple subject to a condition subsequent Fee simple subject to an executory limitation a. Key distinguishing factor b/t 6 freehold estates is duration (how long they exist). Ex/ fee simple absolute is potentially infinite while life estates lsts only for a person's lifetime *Estate or future interest is usually transferred in 1 of 3 ways: a. Deed-living person may transfer real property by deed. Completed transfer is a conveyance or grant. Verbs to describe transfer are convey or grant. Person making transfer is grantor and recipient is grantee. b. Will-property of decedent can be transferred by will. Completed transfer is a devise (also the verb to describe transfer). Person whose will contains devise is testator (male) or testatrix (female) and recipient is devisee. *Different terms apply to transfer of personal property by will c. Intestate Succession-if person dies w/out will, property is distributed by state statutes (usually to closest living relatives). Completed transfer is intestate succession. Verb used to describe transfer of real property is descend while recipient is heir. *Different terms apply to transfer of personal property by intestate succession. i. Future interest in Grantee: 1. Reversion 2. Possibility of Reverter 3. Right of reentry ii. Future interest in Transferee (3rd party): 1. Remainder 2. Executory interest

A.

Background 1. Demise of Feudal System in England a. Statute Quia Emptores i. Gave a tenant the right to transfer his land without permission from the lord ii. Multiple people could have rights in the same parcel of land at the same time iii. Two types of estates were recognized
15

Freehold estates Fee Simple Life Estate Fee Tail Held mainly by noble and gentry Nonfreehold estates Created informally Held by common people

B.

Modern Freehold Estates 1. Six Freehold Estates a. Fee Simple Absolute b. Life Estate c. Fee Tail d. Fee Simple Determinable e. Fee Simple Subject to Condition Subsequent f. Fee Simple Subject to Executory Limitation Notes Fee Simple Absolute is dominant estate today Ways an estate or future interest is

Three transferred

Transfer by deed A living person transfers real property by a deed. The completed transfer is called a conveyance or a grant. The verb is to grant or to convey Transfer by will The property of a decedent may be transferred by a will. The completed transfer of real property is called a devise. The verb is to devise Male testator. Female testatrix Transfer by intestate succession If a person dies without a will, her property will be distributed according to state statutes Verb is descend Completed transaction if called intestate succession Heirs are recipients of the property. A living person has heirs apparent
16

2. a. b. c. d.

e. f. g. h.

Fee Simple Absolute IS THE DEFAULT!!!! If you own a home, likely you hold a fee simple absolute estate Embodies the largest group of private rights recognized The duration is potentially indefinite Under English system, a person could convey a fee simple only if the words and heirs was in the deed. Today, it is not necessary to include those wordsif a conveyance does not contain words that expressly describe the estate, it is presumed the grantor conveyed the largest possible estate Freely alienable-it can be sold or given away during the owners lifetime Devisable-it can be transferred by will at death Descendible-it can pass by the laws of intestate succession of the owner dies without a will Class Notes i. And his heirs are words of limitation-shows what type of estate ii. If convey to a corporation or entity then use and its successors and assigns iii. Heirs dont get anything by the language
Brief Fact Summary Testatrix left a will that stated "I wish Evelyn White to have my home to live in and not to be sold." Ms. White filed action to declare that she had fee simple interest in the home. The nieces and nephews of the testatrix are the defendants in the action and claim that Ms. White has only a life estate in the home. Rule of Law and Holding While the common law originally favored the life estate, a modern interpretation creates a strong presumption that a fee simple interest was conveyed. A fee simple will be conveyed unless the words and phrases of the will or other transfering document clearly evidence an intention to transfer less than a fee simple. 17

White v. Brown (Tenn. 1977)

1.

2.

***Exam prob: iii. Modern presumption on fee simple when language is unclear iv. Outcome in furtherance of writer's intent Disposition: Reversed decrees of trial court and appeals court and remanded. POD: v. Lide's Intent-As a lawyer for Lide if intent was life estate: 1. "White to live in home for her life" If intent was fee simple: 2. "White and her heirs" vi. Restraints on Alienation1. Disabling restraint-prevent transferee from transferring interests 2. Forfeiture restraint-leads to forfeiture of title if transferee attempts to transfer interest 3. Promissory restraint-stipulates that the transferee promises not to transfer interest a. Absolute restraints on fee simple are void as to public policy, partial restraints may be valid if reasonable as to duration, scope, and purpose vii. Life Estate Problems1. O conveys to B until he dies. = Life estate w/ reversion 2. O devises to C for life, then to X = Life estate w/ remainder 3. O conveys to D for 200 years = Life estate, life estate, w/ reversion 4. O conveys to E for life, then to Z for life = E has a life estate, Z vested remainder in life estate, Os heirs vested remainder in fee simple 5. O conveys to F for life. Then F conveys her interest to Google, Inc. = Life estate for F only 6. *Life Estate holder must: a. Pay taxes and mortgage b. Make reasonable repairs c. Cannot commit waste d. Disputes b/t life estate holder and future interest holder arise. Common law doctrine of waste resolves the life tenant to use property in manner that does not significantly injure the rights of the future interest holder.

c.

Restraints on Alienation i. These provisions prohibit or limit a future transfer of the property ii. If such a provision expressly prohibits the future transfer of a fee simple, it is void against public policy iii. Three types of restraints Disabling restraintA restraint that prevents the transferee form transferring her interest
18

Forfeiture restraintA restraint that leads to a forfeiture of title if the transferee attempts to transfer her interest Promissory restraintA restraint that stipulates that he transferee promises not to transfer her interest
Woodrick v. Wood (Court of Appeals of Ohio 1994) P is suing for an injunction to keep D from removing a barn which is on property on which P has a remainder interest Issue: Whether the holder of a remainder interest in a parcel of land may prohibit the life tenant of such property from destroying structures on the land. 1. Waste An abuse or destructive use of property by one in rightful possession 2. At common law, anything which in any way altered the identity of leased premises was waste, regardless of whether the act happened to be beneficial or detrimental to the remainder interest 3. The Ohio rule is that a life tenant has the right to make beneficial use of the property even though she would be altering the land in order to do so 4. The destruction of the barn (because it would not decrease the value of the land) does not constitute waste even though D finds the removal objectionable 5. The relevant inquiry is always whether the contemplated act of the life tenant would result in diminution of the value of the property. Majority Approach is that an action in waste lies only where the alterations reduce the value of the property Minority view (Common Law)-a life tenant could not alter the property in any substantial way-even if it increased its value Types of Waster 1. Voluntary Waste results from an affirmative act that significantly reduces the value of the property (e.g., demolishing a valuable house)

19

2. Permissive Waste results from failure to take reasonable care to protect the estate (e.g., failing to make minor repairs or pay property taxes) 3. Ameliorative Waste results from an affirmative act that leads to a substantial change in the property and increases its value (e.g. building a swimming pool) A FUTURE INTEREST HOLDER MAY OBTAIN DAMAGES OR INJUNCTIVE RELIEF IF THE LIFE TENANT COMMITS VOLUNTARY OR PERMISSIVE WASTE. HOWEVER, MOST STATES DO NOT RECOGNIZE AMELIORATIVE WASTE

20

Life Estate Holder 1. Must pay taxes and mortgage on the land 2. Must make reasonable repairs 3. Cannot commit waste

4. a. b. c. d. e.

Fee Tail Most important estate for landed aristocracy in medieval England The duration is determined by the lives of the lineal descendants of a particular person Almost extinct in the United States Only four states allow it Basic Form i. Created by a conveyance to a named person and the heirs of his body ii. The holder has limited right to transfer the estate iii. It is not devisable because it automatically passes to the lineal heir upon the holders death Fee Simple Defeasible Three ways courts construct restrictive language 1. Restrictive Covenants o Can sue for injunctive relief or damages o The holder does not forfeit the land 2. Expressed as a wish In this case there are not repercussions 3. Defeasible Estate Grantor retains divesting future interest The type of estate dictates the future interest If its determinable-its possibility of reverter
21

5.

 If its subject to condition subsequent its called a right of entry or power of termination The estate ends automatically when the condition is met or restriction violated a. b. An estate that may end upon the occurrence of some future event Three types i. Fee Simple Determinable
Is a fee simple estate that automatically ends when a certain event or condition occurs, giving the right of possession to the transferor. The potentially infinite duration of the fee simple will be cut short if the event or condition happen Characterized by words like so long as while until and during The future interest that follows is always a possibility of reverter which can only be retained by the transferor (or his heirs). It cannot be created in a transferee The possibility of reverter always becomes possessory upon the happening of the stated condition It is freely alienable, devisable, and descendible

ii. Fee Simple Subject to Condition Subsequent

A fee simple estate created in a transferee that may be terminated at the election of the transferor when a certain condition or event occurs If the condition happens, this estate does not end automatically; rather, the transferor has the power to terminate the estate by taking action Characterized by words like provided that but if on condition that 22

A right of entry or power of termination always follows a fee simple subject to condition subsequent The future interest can only be retained by the transferor (or his heirs). It cannot be created in the transferee When the condition occurs, the transferor can elect to re-enter the property, divesting the transferee of possession Unlike fee simple determinable, the estate is not automatically terminated Freely alienable, devisable and descendible

iii. Fee Simple Subject to Executory Limitation

Created in a transferee that is followed by a future interest in another transferee The future interest is held by a third party Created by same words as other two But the distinguishing characteristic is that the future interest is held by a transferee NOT THE TRANSFEROR The future interest that follows is an executor interest Alienable, devisable and descendible

Case Mahrenholz v. County Board of Lawrence County (Appellate Court IL-1981)

Had the court decided it was a fee simple subject to a condition subsequent, Hutton would have right of reentry. It would become a fee simple absolute after he took action. If this is the case the Mahrenholzs have no interest in the property. But Harry released his future interest to the school district . Under common law, the holder of the future interest can release the interest to the holder of the present estate MAHRENHOLZ - Big idea is what is future interest: i. Possibility of reverter ii. Right to reentry "otherwise revert back to Grantor herein" is only defining language. Rules: If fee simple determinable, land reverted back to Harry Hutton as soon as not used for school. If fee simple subject to condition subsequent, Harry Hutton had to reenter and reclaim land before he owned it.

c.

When language is ambiguous, courts generally construe the estate as a fee simple subject to a condition subsequent
23

i. ii.

Social policy abhors the forfeiture of estates because this interferes with marketability Therefore, the fee simple subject to a condition subsequent (presenting only a limited risk of forfeiture) is preferred over the fee simple determinable (which results in automatic forfeiture) Right to re-entry At common law, right to re-entry and possibility of reverter could be transferred only through intestate succession to the holders heirs ONLY DESCENDIBLE Today, most jurisdictions allow free alienation of both interests

d. i.

ii. e.

Doctrine of waste generally does not apply to fee simple defeasible Common Law i. Possibility of reverter and right of entry were not alienable or devisable-they were only descendable through intestate succession ii. These two future interests also can be released to the current possessor of the estate

f.

iii. Transferring Future Interest-Both determinable and subject to condition subsequent are descendible at common law, but not alienable or devisable (sold, gift, or will). *In most modern jurisdictions-possibility of reverter and right to reentry is freely alienable and devisable. **So know if applying common law or modern rules

24

Can a grantee acquire title by adverse possession following a breach of a condition subsequent but prior to a claim of forfeiture? NO Can the lapse of an extensive period of time between breach and an election of forfeiture waive or extinguish the condition? YES

RATIONALE Continued possession and enjoyment of property does not become adverse to any possessory estate of the grantor until the latter, or his heirs, elect to declare a forfeiture The grantor has a reasonable time after breach within which to declare a forfeiture If he fails to declare a forfeiture within that time, his power to do so has expired NOTES Court says grantors heirs waived their right of re-entry Waiver is an intentional relinquishment of a known right or intentional conduct inconsistent with claiming the right The waiver differs from a laches or estoppel defense where the possessor must show reliance The SOL for adverse possession for a fee simple determinable starts to run as soon as the condition is broken The SOL for adverse possession with a fee simple subject to a condition subsequent starts when the grantor exercises the right of termination or right of re-entry

C.

Modern Future Interests 1. Future Interests Retained by the Transferor Arises when a transferor conveys an estate to a third party which is smaller than the estate she holds a. i. ii. Reversion A transferor retains a reversion when she conveys an estate smaller than the one she has Future interest remaining in the transferor when she grants a vested estate of lesser quantum than she began with
25

iii. b. i. ii.

Alienable, devisable, and descendible Possibility of Reverter Future interest retained by transferor who holds a fee simple absolute, buy conveys a fee simple determinable Since there is a possibility that the fee simple determinable might end, this future interest gives the transferor the right to possession if that estate terminates Alienable, devisable, and descendible in almost all jurisdictions Right of Entry Future interest retained by the transferor who holds a few simple absolute but conveys a fee simple subject to a condition subsequent The right of entry does not become possessory until and unless the holder takes affirmative steps to regain possession Alienable, devisable, and descendible in almost all jurisdictions

iii. c. i.

ii. iii. 2. that is:

Future Interests Created in a Transferee Remainders A remainder is a future interest in a transferee o Capable of becoming possessory immediately upon the expiration of the prior estate o And, does not divest or cut short any interest in a prior transferee a. i. Indefeasibility vested remainder Remainder is vested if it is created in an ascertainable person and is not subject to a condition precedent other than the natural termination of the prior estate
26

ii.

If O conveys Greenacre to A for life, then to B, B holds an indefeasibly vested remainder-a remainder in an identifiable person that is certain to become a possessory estate Vested remainder subject to devisement Remainder that is vested but that is subject to a condition subsequent Vested remainder subject to open Vested remainder held by one or more living members of a group or class that may be enlarged in the future Contingent remainder i. If the remainder is not vested, it is Remainder given either to an unascertainable person or subject to a condition precedent

b. i. c. i.

d. contingent ii.

Executory Interests Future interest that must divest another estate or interest to become possessory If an executor interest divests the transferor, it is called a springing executor interest If a transferee is divested, it is a shifting executory interest Today, they are alienable, devisable, and descendible in all jurisdictions D. Rule Against Perpetuities
MY NOTES ADD 21 TO THE END OF A LIFE NO INTEREST IS GOOD IF ITS STILL HANGING OUT THERE AFTER 100 YEARS 1.IDTHECONTINGENTINTEREST 2.LISTTHELIVESINBEING

27

3.CONSIDERWHETHERANYONECANBEBORNWHOMIGHTAFFECTVESTING 4.KILLOFFTHELIVESINBEINGATSOMEFUTUREDATEANDADD21YEARS 5.FINALLY,ASKISTHEREANYPOSSIBILITYTHATTHECONTINGENTINTERESTWILL VESTAFTERTHISPOINT.IFSO,VOIDATTHETIMEMADE.

1)OtoBforlife,thentoMifMlivestobe50. 2)OtoAsolongasusedforresidentialpurposes. Afeesimpledeterminable,Oposs.Ofreverter 3)ToAforlife,thentoAschildren.Aisalive,butnochildren. 1.thereisacontingentinterest 2.Amustdieleavingachild 3.MeasurebyAslife 4.WithinAsdeath,willweknowifthefutureinterestcantake? Ifthereisachildtotake 1. 2. 3. No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest The rule limits the duration of a contingent interest by providing that is void unless it must vest or forever fail within 21 years of the death of a life in being A contingent interest is valid only if you can logically prove that it will either vest or forever fail to vest within the perpetuities period (a life in being plus 21 years) If there is any possibility that the interest might vest more than 21 years from the death of the relevant lives in being, the future interest is void when created Only three interests are subject to the rule a. Contingent Remainders b. Executory Interests c. Vested Remainders Subject to Open Interests not subject to the rule a. Fee Simple Absolutes b. Fee Simple Defeasibles c. Fee Tails d. Life Estates e. Leaseholds f. Reversions g. Possibilities of Reverter
28

4. 5.

6.

h. 7.

Rights of Entry

8.

The question is not whether the interest might vest the question is whether there is any possibility the future interest might not vest within the permitted time period Situations where an interest is more likely to be subject to the RAP a. When the condition is not personal to someone b. When there is an identified age or time period of more than 21 years c. Conveyance that skips a generation d. Conveyance requires that a holder survive someone who is merely described and not named e. An event that normally would not take place within 21 years 9.

More RAP Danger Signs

The condition is not personal to someone There is an identified age or time period of more than 21 years An interest is given to a generation after the next generation (for example, to grandchildren) A conveyance requires that a holder survive someone who is merely described rather than named An identified event that would normally happen well within 21 years, but might not The holder wont be identified until the death of someone merely described rather than named Class gifts following another class giftsbecause someone not alive now will move into the class If the ultimate grantee is a label, not a name If you have to have an event occur that is not a death or that doesnt have to be performed by a particular person o Greene's Hypos: O to A for life, then to A's children. A has no children at time of conveyance. Analysis: We'll know if remainder will vest or fail at A's death. So valid. A's children have contingent remainder. What if A has 2 children at conveyance? Still valid. A life estate; A's children have vested remainder subject to open. O to A for life, then to A's children who reach 30. A is alive. B & C are A's kids ages 30, 32. A has possessory 29

estate in life estate. Children have vested remainder subject to open. O has reversion in fee simple. Analysis: If A has child, D, at death, won't know if D will reach age 30 for 30 yrs. This violates rule of perpetuities. So A has life estate and O has reversion. *Note class doesn't close (or vest) until all kids are 30. O to A for life, then to B, but if land is ever used for tavern, then to C. A has possessory life estate. B vested remainder subject to executory limitation. C shifting executory interest. Rule of perpetuities doesn't apply to B (see below). C's interest fails. o Signs for Alarm that may Violate Rule: Not personal (Ex/ but if anyone finds cure for cancer) Identifies age requirement of more than 21 yrs Skips a generation (Ex/ then to B's grandchildren) Conveyance to holder who is only described but no name Event that would normally happen w/in 21 yrs, BUT might not. (Ex/ O to A for life, then B for 20 yrs, then to whoever received A's land in distribution of estate. A has life estate. B vested remainder in term of yrs. Whoever has contingent remainder in fee simple absolute. O reversion in fee simple absolute. Whoever is void. o Only 3 interest are subject to the rule: Contingent remainders Executory interests o Use following steps: Identify contingent interest List the lives in being Consider whether anyone can be born who might affect vesting Kill off lives in being at some future date and add 21 years Ask yourself "is there any possibility that the contingent interest will vest after this point?" If so, void. If not, valid.

10. Modern Reforms a. Wait and See i. Interest is void is actually does not vest within the 21 years of the death of a life in being ii. What is realistic not possible b. Uniform Statutory Rule Against Perpetuities i. Interest is valid if satisfied common law or vests within 90 years of its creation
30

c. i. ii. d. i.

Cy Press Courts rewrite language of the conveyance so it no longer violates the RAP Considers grantors intent when re-writing Savings clauses Write the conveyance in such a way as to save the interest

IV.

SELLING REAL PROPERTY A. The Purchase Contract 1. a. Statute of Frauds As a general rule, an oral agreement for the sale of an interest in real property is not enforceable b. A written contract gotta have 5 things: i. Essential Terms Must Be In Writing 1 2 3 ii. 4

Identity of the Parties The Price Property Description Be a Writing

31

o Can be a formal contract or an informal memorandum iii. Signature o 5 The writing must be signed by the party against whom enforcement is sought normally the buyer c. d. Failure to comply with the Statute does not make the contract void-it simply prevents it from being enforced The writing provides greater certainty about intentions, less problems with intent as opposed to oral agreement, and written agreements indicate a heightened level of seriousness about the agreement Electronic Signatures i. Electronic documents can satisfy the SOF ii. A person can be bound by an electronic signature Exceptions to the Statute of Frauds Part PerformanceAn oral contract for the sale of real property may be enforced if the buyer: i. Takes possession ii. Pays at least part of the purchase price iii. Makes improvements to the property o Courts reason that the buyer would perform these actions only if a contract existed so this conduct serves as a substitute for the writing b. be enforced if i. ii. One party acts to his detriment in reasonable reliance on anothers oral promise, AND Serious injury would result is enforcement is refused Equitable Estoppel-An oral contract may

e.

2. a.

32

Courts generally apply the doctrine if the complaining party has relied on the oral agreement by selling another property or by refusing other offers for the property in dispute B. The Closing 1. The Deed 3 types General Warranty Deed

Quit Claim Deed no warranties!

o Best type of deed free from all defects o Grantor warrants title against all defects whether they arose before or after grantor possessed or obtained title o Worst type of deed o Grantor makes no warranties about the title o Grantor warrants title for all defects that occur after the grantor obtained title, non before from the old days

Special Warranty Deed

**Delivery a. delivered b. c. An undelivered deed, even if signed by the grantor, conveys nothing The grantor must manifest an intention to immediately transfer title to the grantee The deed is only effective when it is

Elements of Delivery Intention by grantor to immediately transfer Objective manifestation Acceptance by grantee (even if grantee is unaware of the gift)

2.

Rosengrant v. Rosengrant
33

Issue(s): Under OK property law, was there was legal delivery of title from Harold & Mildred to Jay? Holding: There was no legal delivery to Jay so the title was void. There was only a symbolic delivery. Court's Rationale/Reasoning: On the envelope of the deed it said that it was to be given to either the grantor or the grantee which shows that Harold was free to retrieve the deed as he wanted before his death. There were 2 conditions that needed to be satisfied before the grant could take effect and those were 1) that both parties died and 2) that the deed was recorded. His actions also show that he intended to reserve a right of retrieval. He continued to farm the land, use and control the property and pay taxes on it and claim it as his homestead until he died. This shows that he was trying to use the deed as a will and under OK law this cannot be done. Legal delivery is not just a symbolic gesture. The true intent of the parties is evidenced on the envelope. Rule: Grantor's intent at the time the deed was delivered is the most important factor in transfers of title Where a grantor delivers a deed under which he reserves a right of retrieval and attaches to that delivery the condition that the deed is to become operative only after the death of the grantors and further continues to use the property as if no transfer had occurred, grantor's actions are nothing more than an attempt to employ the deed as if it were a will. Concurrences: There was no reason to believe Jay who was the only person from the parties that was still alive. If the grantors intended for Jay to have the land, they could have simply given it to him and told him to record it. The fact that the grantors continued to occupy the land, paid taxes on it and offered to sell it once shows that they did not make an actual delivery of the deed to Jay.

Class Notes o What was missing from this deed was the intent that the grantor be immediately bound and transfer title o This was probably testamentary intent-intent to give someone interest when dies o WILLS i. Must be in writing 34

ii. iii. iv. v.

Compliance with statute Need witness for a valid will Who being gifted to Possibly need witnesses

3. a. b.

4. a. b. c. 5.
RULE

Delivery as Intent Uniform Simplification of Land Transfers Act defines delivery as an act manifesting an intent to make a present transfer of real estate Restatement (Second) of Property indicates delivery is accomplished when the donor manifests that the document is to be legally operative which the donor is alive Physical Delivery Most states-the manual transfer of deed creates a presumption that the deed has been delivered Delivery is also presumed if the deed is recorded In some states, absence of a manual transfer creates a presumption of nondelivery Vasquez v. Vasquez

When a grantor delivers a deed to a third person without a reservation of a right to recall it, and instructs the third person to deliver it to the grantee on the grantor's death, he thereby makes an effective delivery as a matter of law.

35

V.

CONCURRENT OWNERSHIP AND MARITAL PROPERTY A. Concurrent Ownership Each cotenant has the right to use and possess the

entire property 1. Modern Concurrent Estates a. PRESUMPTION

i. Each tenant has an undivided, fractional interest in the property ii. Each may transfer to another person (alienable, descendible, devisable) iii. Each has the right to use and possess the whole parcel even if his fractional interest in smaller than the interests of others iv. Example If O conveys to A, B and C as tenants in common and then B conveys her interest to A, A and C are tenants in common. A holds 2/3 interest and C holds 1/2. C has as much right to use and enjoy the property as A but 36

Tenancy

in

Common

THE

when the property is sold, the proceeds will be divided according to the proportionate shares v. Most marketable type of concurrent estate

b.

Joint Tenancy
i. to A and B as joint tenants with right of

survivorship ii. Joint tenants have undivided right to use and possess the whole property iii. iv. Each joint tenant has right of survivorship When A dies, As interest in the estate is removed and B automatically becomes to the sole owner v. vi. Joint tenancy is NOT devisable or descendible Common Law: Four Unities Required

o Time-all tenants must acquire their interests at the same time o Title-they must acquire title by the same instrument (will or deed) o Interest-they must have the same shares in the estate, equal in size and duration If one grantee gets a 10 year tenancy and another a life estate this unity is destroyed o Possession-must have equal right to possess, use and enjoy the whole property o If any of the four unities is missing, then a tenancy in common is created vii. If one joint tenant transfers her interest, the joint tenancy is severed. The transfer breaks unities of time and title. The right of survivorship is destroyed 37

and the grantee becomes a tenant in common with the other concurrent owners. BUT The other

previous owners retain their joint tenancy 3 DISTINCTIONS W/ TENANCY IN COMMON: a. THE FOUR UNITIES, b. NEITHER DEVISABLE NOR DESCENDIBLE IN JOINT TENANCY c. Time and title If one joint tenant transfers his interest, the joint tenancy is severed by breaking unity and forms a tenancy in common w/ a new tenant

c.
i.

Tenancy by the Entirety

Created if O conveys to A and B as tenants by the entirety ii. Only married couples can hold property in tenancy by the entirety iii. Each has undivided right to use and possess the whole property and a right of survivorship iv. Can only be severed by death, divorce, or agreement of both spouses v. Neither spouse may transfer or encumber his or her interest without permission from the other spouse

CASES

James v. Taylor
HOLDING o The Court held that although it was obvious that Eura intended to create a joint tenancy, the language did not conform to the statutory requirements No right of survivorship. (The statute overrode the rules of construction) REASONING At common law, joint tenancy was favored and where possible, that estate was held to exist. But many statutes, including Arkansas, have adopted rules that presumptively construe an instrument to create a tenancy in common rather than a joint tenancy Nothing appears from the four corners of the deed to indicate Redmonds intent to convey a survivorship interest 38

The language of the deed is insufficient to overcome the statutory presumption of a tenancy in common Here the third child introduces extrinsic evidence to help the court interpret the grantors intent She told her attorney if one of children died she wanted that interest to go to the other children She changed names on bank accounts when her first children died The court decides not to follow the extrinsic evidence and instead relies on statutory rules of presumption which in Arkansas were that the grantor intended a tenancy in common minus express language to the contrary More modern rule is that courts will consider extrinsic evidence to help determine grantors intent as opposed to statutory language EXAM-if see fact pattern with both then apply both and reach a conclusion and throw in a property theory as to why the outcome is correct There is not necessarily one right answer

Notes

i. common ii. Joint tenancy To A and B as joint tenants with right of survivorship iii. Tenancy by the entirety To A and B as husband and wife as tenants by the entirety iv. If wording is unclear, courts may ignore the grantors actual intent but the modern trend is to focus more on grantors intent and less of formulaic language 2. Severance a. b. c. A joint tenant can end the tenancy by conveying her interest to a third party What about mortgages? Or leases? Three ways to sever a joint tenancy i. Sale ii. Action in partition
39

o The law presumes the grantor intends to create a tenancy in common absent express language to the contrary o Preferred language Tenancy in common To A and B as tenants in

d. e.

iii. Mutual agreement to convert the estate In most jurisdictions a lease does not sever a joint tenancy Mortgages will sever a joint tenancy in some jurisdictions and not in others

know these 2 theories! i.

Title Theory

Mortgage conveys title to 3rd party and thus severs the joint tenancy Minority Rule-only 10 states follow it Alabama follows this rule ii. Lein Theory o Mortgage is viewed merely as a lein to secure payment so it does not sever a joint tenancy because the unities are preserved, keeps it intact o If a foreclosure takes place the unities are destroyed and the joint tenancy is severed Tenhet v. Boswell
o Joint tenant leased property to D for a person of 10 years without knowledge or consent of other joint tenant o Joint tenant lessor died three months after execution of the lease and P sought to establish her sole right of the property as the surviving joint tenant o The lease did not create a severance o The lease of the joint tenancy property expires when the lessor dies HOLDING A joint tenant leases his interest in the joint tenancy property to a third person for a term of years and then dies during that term.

40

 The lease does not sever the joint tenancy, but expires upon the death of the lessor joint tenant When joint tenant dies, the lease expires and the other joint tenant(s) retain that interest 3. a. Partition Any tenant in common has the right to sue for partition of the property i. Most courts state the presumption if for a partition in kind where the land is divided but many courts allow partition by sale This ensures cotenants retain the same estate they had prior to partition Avoids need to impose sale on unwilling cotenants ii. Consequences of partition by sale Diminish wealth building capacity Destroy ancestral lands Destroy cultural traditions Disproportionate impact on certain communities Destroys mode of survival Eliminates the bundle of rights (use, possess, transfer, destroy) that exist with ownership A partition judgment ends the cotenancy and distributes its assets Agreements not to Partition i. Traditionally viewed as a restraint on alienation ii. But if reasonable in duration and purpose then most jurisdictions allow an agreement against partition Three common law default actions 1) Partition i. Terminates cotenancy
41

b. c.

4.

iii. 2)

ii. Partition in kind-divides up land Partition by sale-sell land and cotenants share the proceeds

Action in Accounting i. Equitable action ii. Asking cotenant to give benefits of rent iii. Seeking from a cotenant their pro-rata iv. Normally it is the cotenant not in possession seeking the money from the cotenant in possession Does not terminate cotenancy

share

3)

v. Contribution i. Asking for one cotent to contribute or reimburse the other for certain expenses ii. Taxes, insurance charges, mortgages iii. As a general rule, each cotenant is responsible for his pro-rata share of mortgage payments, taxes, etc. and the other can seek contribution iv. Normally only occurs in connection with a partition v. Does not terminate cotenancy Case Ark Land Co. v. Harper Court of Appeals of W.V. 2004
FACTS The corporation, which wanted to mine the property for coal, bought undivided interests in the property from some descendants of the original owners, but other descendants were unwilling to sell. Family used the land for reunions and family gatherings The supreme court of appeals held the fact that the corporation's proposed use of the property caused it to be worth more money, as opposed to maintaining it as a family homestead, did not control when deciding whether to order that the property be partitioned in kind or partitioned by a sale. 42

Partition in kind was the preferred partition method, and the partitioning sale statute, W. Va. Code 37-4-3, was to be construed narrowly. Evidence of the heirs' long-standing ownership of the property, and their sentimental or emotional interests in it, could be considered and controlled because the property could be partitioned in kind, even though it caused some economic inconvenience to the corporation. The corporation's self-created enhancement of the property's value, based on the corporation's expectation that it could mine coal on it, was not a determinative factor in forcing the heirs to give up their rights through a forced partition by sale Court considered the emotional or sentimental attachment, the longstanding ownership and the economic harm The economic harm to Ark Land is relevant but not determinative REASONING

Partition by sale, when it is not voluntary by all parties, can be a harsh result for the cotenant(s) who opposes the sale. This is because a particular piece of real estate cannot be replaced by any sum of money, however large; and one who wants a particular estate for a specific use, if deprived of his rights, cannot be said to receive an exact equivalent or complete indemnity by the payment of a sum of money. Consequently, partition in kind is the preferred method of partition because it leaves cotenants holding the same estates as before and does not force a sale on unwilling cotenants. Presumption is for partition in kind and a burden must be overcome for a partition by sale Economic value of the property is not the exclusive test for deciding whether to partition in kind or by sale The emotional interest would be prejudiced in this case by a sale of the property Court balances personhood theory with utilitarian/economic good theory A party requesting partition by sale must meet 3 requirements: Property cannot be conveniently petitioned in kind Interest of one or more parties will be promoted by sale 43

Interest of other parties will not be prejudiced by sale. Prove partition in kind would result in great prejudice. To show prejudice for partition in kind: Resources not divided equally on land (ex/ house) Some parts don't have sacred ground Part is worth more Topography is different

4.

Cotenant Rights and Duties

Majority RULE: no rent is owed by one in possession absent ouster (forced eviction from land or refuses request to possess) Minority RULE: occupiers must provide rent to those not occupying property.

a. i. ii.

Right to Occupancy A cotenant in possession does not owe any rent to a cotenant out of possession, absent an ouster An ouster occurs when a cotenant in possession refuses to allow another cotenant to occupy the property Sharing Rents and Profits Each cotenant is entitled to his proportionate share of all rents and profits derived from the land Sharing Costs If you make improvements or repairs, the majority rule is that you are not entitled to collect payment from a cotenant But if a cotenant makes needed repairs he will receive a credit for those costs in a partition action and the cotenant who improves the property receives a credit equal to the increased market value produced by the improvement

b. i.

c. i. ii.

d.

Rents
44

i.

Majority Rule

A cotenant does not owe any rent to a cotenant out of possession, absent an ouster Ouster occurs when the cotenant in possession refuses to allow the other to use or possess the property-must be express and explicit ii.. Minority Rule Those in possession give or provide rent to those cotenants not in possession
Estevez RULES

As a general proposition, on a sale of commonly owned property, an owner who has paid less than his pro-rata share of operating and maintenance expenses of the property, must account to a coowner who has contributed more than his pro-rata share, and that is true even if the former had been out of possession and the latter in possession of the property. The fact that one tenant in common occupies the property and the other does not, imposes no obligation on the former to make any contribution to the latter. All tenants in common have a right to occupy all of the property and if one chooses not to do so, that does not give him the right to impose an occupancy charge on the other. Notwithstanding the general rules, when on a final accounting following sale, a tenant who has been in sole possession of the property demands contribution toward operating and maintenance expenses from his co-owner, fairness and equity dictate that the one seeking that contribution allow a corresponding credit for the value of his sole occupancy of the premises. To reject such a credit and nonetheless require a contribution to operating and maintenance expenses from someone who had enjoyed none of the benefits of occupancy would be patently unfair. The party seeking the credit for the other's occupancy of the property has the burden of demonstrating the actual rental value of the property enjoyed by the occupying co-tenant

This court takes a middle of the road approach between the majority and minority rule and says the contribution amount should be offset by fair rental value of the cotenant in possessions sole occupancy Get brit/lindss notes on Twen cases chuck v. gomes, mcneely 45

Partition by Sale vs. In Kind? Lose ancestral land in Chuck v. Gomes, utilitarian use of land prevails McNeely what is happening in the blackbelt of AL getting land through intestacy and some sell of their share to companies who partition for sale. McNeely argues these partition claims are having disproportionate effect on rural areas (particularly African-Americans) hard to prove unconstitutional bad intent. Hawaii cases point to importance of land ownership where there is not plenty.

B.

Marital Property 1. Common Law Foundation

o Reflected profound gender bias. Women lost ability to own, manage and dispose of property (except clothing and jewelry). Law gave husband an estate jure uxoris("by right of the wife") in all wife's land. He could use, mort, or sell and could be reached by creditors. Married women couldn't even enter into legal contracts or execute other legal docs. If he died, common law gave widow dower: 1/3 life estate in all freehold land which: Was owned by husband Inheritable by his issue o *these could not be cancelled during marriage and were attached to property o Curtesy-right of husband and arose at birth of child, not marriage o *Dower rights did not apply to joint tenancy o *in few states still recognizing dower, applies to both spouses. o *many states passed Married Women's Property Acts giving same rights as single women and protected her property from husband's creditors MS was 1st state to enact Married Women's Property Actsequality of husband and wife. 2 ways to view: Empower wives to equal of husband Disempower husband so neither can transfer

2.

Separate Property System a. During the Marriage i. Property is separately owned by the spouse who acquires it ii. The creditors of a particular spouse can only attach the separate property of that spouse b. i. Divorce Most separate property states require the equitable distribution of the property owned by each spouse taking into account incomes,
46

standard of living, their contributions during the marriage, their age and health, any special needs, and the length of the marriage c. Death i. Most states offer the surviving spouse a forced share or elective share of the decedents estate ii. This means the survivor has a choice: Take under the decedents will, or Receive a defined portion of the decedents estatewhich is usually 1/3 or 1/2 share Community Property System a. During the Marriage i. All earnings during the marriage and all assets acquired from those earnings are owned by both spouses equally ii. Each spouse holds an equal, undivided share in the community property, although neither can transfer that share to a third party iii. Neither spouse has a right of survivorship iv. Property acquired before marriage or after marriage by gift or inheritance remains the separate property of the individual spouse b. Divorce i. All community property is divided between the spouses c. At Death i. Decedent may devise her half of the community property and all her separate property as she or he desires ii. The other half of the community property belongs to the surviving spouse iii. Does not provide a forced share to the survivor Tenancy by the Entirety a. Only half the states recognize this
47

3.

4. cotenancy

b. creditors

May

offer

significant

protection

from

Case Sawada v. Endo cant touch this! Hawaii (1977)

Endo was at fault in a car accident with the Sawada sisters, and was found liable for about $25k. o He had no liability insurance. Endo and his wife were owners, by tenancy in entirety of a house. After the accident, they conveyed the property to their sons, but continued to live there. o Endo did not reserve a life estate. o After the judgment, Endo' wife died. o Obviously, Endo was attempting to hide the asset so it couldn't be seized by Sawada. Hiding assets from creditors by giving them away prior to a tort judgment is a fraudulent conveyance, and is a criminal act. Sawada was unable to get the $25k from Endo, so sued to have the conveyance set aside and seize the property. o Sawada argued that the judgment made them defacto creditors of Mr. Endo. That means they effectively held a lien on his property. Endo's actions in giving his property away so it couldn't be seized amounted to fraud. The Trial Court found for Endo and refused to set aside the conveyance. Sawada appealed. The Appellate Court affirmed. o The Appellate Court found that under Hawaii law, a husband and wife do not have separate divisible interests in property held in a tenancy in entirety. Mr. and Mrs. Endo did not individually own anything, the house was owned by both of them. For example, Mr. Endo could not take out a mortgage on the property without Mrs. Endo's permission. If it were a joint tenancy, Mr. Endo could take out a mortgage on his interest in the property. o Since Mr. Endo didn't technically have an individual interest in the house, there was nothing that was subject to the claims of Mr. Endo's creditors. 48

 Endo couldn't sell the house or give it away without his wife's permission, so therefore he could never have it taken from him without his wife's permission. Therefore, since Sawada could never seize the property, it was not fraud for the Endos to give it away. In a dissent it was argued that this was not fair to the Sawadas, and that Mr. and Mrs. Endo each owned half the property and that Mr. Endo's interest was severable from Mrs. Endo's. o That's the way it is under New Jersey State law. The basic rule is that an estate by the entirety is not subject to the claims of the creditors of one of the spouses during their joint lives. o You can't go after the assets of a spouse for debts incurred by the other spouse. Except the IRS. The IRS ignores this rule. o If the property had been held under a joint tenancy, then each Endo would own an equal interest and that interest could be seized by a creditor (turning it into a tenancy in common). o If Mrs. Edno had died prior to judgment (and the property hadn't been given to their sons), the entire property would revert to Mr. Endo's exclusive ownership, and it could have been seized by Sawada. o Public Policy of protecting the Family. Secures family future by not allowing debts, etc. Should the court promote its idea of what family means? Reasoning
Group I - Coverture Model-(Massachusetts, Michigan, and North Carolina) o Common law tenancy by the entireties, unaffected by the Married Womens Property Acts. o The possession and profits of the estate are subject to the husbands exclusive dominion and control. o The husband may convey the entire estate subject only to the possibility that the wife may become

49

entitled to the whole estate upon surviving him. o The obverse of the wife does not hold true o In Mass., the estate in entirety is subject to levy by the husbands creditors o In NC and Mich., the use and income from the estate is not subject to levy during the marriage for the separate debts of either spouse. o Doesnt really exist anymore. Group II (Alaska, Arkansas, New Jersey, New York, and Oregon)

The interest of the debtor spouse in the estate may be sold or levied for his or her separate debts, subject to the other spouses contingent right of survivorship. Ex. In this case, if the husband dies, they debtors cant attack the wifes interest, but if she dies first, they can attach to the husbands interest. Creditor would have a defeasible interest. Alaska: the interest of a debtor spouse in any type of estate, except a homestead as defined and held in tenancy by the entirety, shall be subject to his or her separate debts. Group III (Delaware, D.C., Florida, Indiana, Maryland, Missouri, Pennsylvania, Rhode Island, Vermont, Virginia, and Wyoming)
An attempted conveyance by either spouse is wholly void, and the estate may not be subjected to the separate debts of one spouse only. Creditors cant attach to this!

Group IV (Kentucky and Tennessee) The contingent right of survivorship of either spouse is separately alienable by him and attachable by his creditors during the marriage. The use and profits, however, may neither be alienated attached during coverture. The right of survivorship is levied upon. Creditor has a defeasible interest. THIS COURT: o Joins group III. o Under the Married Womens Property Acts, the interests of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors

50

during the joint lives of the spouses. o The tenancy by the entirety is predicated upon the legal unity of husband and wife, and the estate is held by them in single ownership. o A joint tenant has a specific, albeit undivided interest in the property, and if he survives his cotenant he becomes the owner of a larger interest than he had prior to the death of the other tenant. o BUT, tenants by the entirety are each deemed to be seized of the entirety from the time of the creation of the estate. o AT COMMON LAW, for all practical purposes, the wife had no right during coverture to the use and enjoyment and exercise of ownership in the marital estate. All she possessed was her contingent right of survivorship. o THUS, the effect of the MWPA was to place the wife on a level of equality w/ him. The husband could no longer convey, lease, mortgage or otherwise encumber the property w/out her consent. o The wife became insulated in the estate from the separate debts of her husband. o Neither husband nor wife has a separate divisible interest in the property held by the entirety that can be conveyed or reached by execution. o The tenancy by the entirety may only be divided through joint action by the tenants by the entirety.

DISSENT

The Married Womens Act was to elevate the wifes right of alienation of her interest to place it on a position of equality w/ the husbands The husband could already alienate his right of survivorship at common law, and the wife, by virtue of the act, can alienate her right of survivorship. IF the wife takes equal rights with the husband in the estate, she must take equal disabilities. Thus, the judgment creditors of either spouse may levy and execute upon their separate rights of survivorship. The resultant restriction upon the freedom of the spouses to deal independently w/ their respective interests is both illogical and unnecessarily at odds w/ present policy trends. Would hold that the separate interests of the husband in entireties property, at least to the extent of his right of survivorship, is alienable by him and subject to attachment by his separate creditors, so that a voluntary conveyance of the husbands interest should be set aside where it is fraudulent as to such creditors. 51

5.

Defining Marital Property a. Professional Degrees i. Majority-they are NOT property ii. Minority-they are property representing investments in the economic partnership of the marriage and the product of the spouses joint efforts CASE Guy v. Guy (Mississippi 1999)
ISSUE o Is a professional degree marital property? o Majority approach is that a degree is not property but the majority approach is also that a contributing spouse should be compensated

b. Premarital Agreements i. Engaged couples can normally avoid the marital property system by contract ii. These agreements are valid so long as they are signed voluntarily and under fair and reasonable disclosure 6. a. Unmarried Couples Some jurisdictions refuse to recognize claims for palimony saying these agreements involve sexual relationships outside of marriage and are therefore contrary to public policy

In re Estate of Roccamonte, 808 A.2d 838 (N.J. 2002).

HOLDING The New Jersey Supreme Court held that a married man's estate must make a lump-sum payment to his longtime paramour and cohabitant, whom he had promised to support for the rest of her life.

52

RULE The formation of a marital-type relationship may legitimately and enforceably rest upon a promise by one person to support the other, the court said. It is the undertaking of a way of life that involves providing companionship and forgoing other opportunities, among other things. Entry into such a relationship and then conducting oneself in accordance with its unique character is consideration that can be the basis for an enforceable contract, the court found.

Accordingly, the court remanded for consideration of the appropriate amount of support.

7. a. b.

Same Sex Marriage Same sex couples can enter into agreements about how their property will be shared. But its unclear whether court will extend marital property holdings to gay and lesbian couples

CASE In re Marriage Cases CA 2008 What would have to change to keep names separate but elevating all rights
for homosexuals? Fed benefits (tax, immigration, SS) teancy by the entirety, intestacy statutes. Not available for

HOLDING 1. Statutes that treat persons differently because of their sexual orientation should be subjected to strict scrutiny 2. The existing California legislative and initiative measures limiting marriage to opposite-sex couples violate the state constitutional rights of same-sex couples and may not be used to preclude same-sex couples from marrying.

c.

Why Marriage? i. In re Marriage Cases court points out that the states domestic partnership act provides same sex couples with virtually all the legal benefits and privileges California law affords to married couples
53

54

VI.

LEASING REAL PROPERTY Immutable Rules-supersede any contrary provisions in

the lease, usually to protect vulnerable residential interests Default Rules-fill in the gaps that the parties did not address in the lease. The parties can ignore default rules in

lease negotiations but they cannot evade an immutable rule A. Creating the Tenancy 1. Selecting the tenant
o Fair Housing Act 42 U.S.C. 3601- made illegal to: Refuse to sell or rent or negotiate for sale or rent based on race, color, sex, religion, familial status (those w/ children, pregnant, or similar), or national origin. Discriminate for previous reasons in sale or rent Make, print, or publish a notice, statement, or advertisement w/ respect to sale or rent indicating preferences based on previous reasons Also includes handicaps (alcoholism, AIDS, etc) familial statuts definition p. 444

Fair Housing Act

Sec. 804. [42 U.S.C. 3604] Discrimination in sale or rental of housing and other prohibited practices As made applicable by section 803 of this title and except as exempted by sections 803(b) and 807 of this title, it shall be unlawful

55

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin. (b) To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin. (c) To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination. (d) To represent to any person because of race, color, religion, sex, handicap, familial status, or national origin that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available. (e) For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, handicap, familial status, or national origin.

Discriminating against a potential lessor

56

2.

Neithamer V. Brenneman Property Services, Inc. USDC, District of Columbia 1999

FACTS P is gay and HIV positive. P sues D under Fair Housing Act and the D.C. Human Rights Act September 1997 P contacted D in response to an ad about a townhouse. P viewed the property and filed an application with D P provided the agent bank statements, credit references and informed that there was one period in his credit history when he failed to make payments-told them the reason was medical expenses for his lover who died of AIDS Owner of the property rejected the application P offered to do several things-pay rent early, get a co-signor P was rejected and called to find out why and said he felt as though he was being discriminated against Response from D was if you try to sue me, I have a pack of bloodsucking lawyers who will place countersuits against you for libel and drive you to the ground P filed suit claiming discrimination under FHA and DCHRA and intimidation and coercion

PROCEDURE o D filed MSJ arguing there was no basis of fact to either claim REASONING o P must show a prima facie case of discrimination by showing: 1. Member of the protected class and D knew or suspected he was 2. Applied for and was qualified to rent the property in question 3. D rejected his application 4. The property was available afterwards o Once P establishes a prima facie case, burden 57

shifts to D to provide a legitimate, nondiscriminatory reason for rejection of the P application o If D satisfies the burden then P must show that the reasons and pretext or that material facts are disputed o The last two elements are undisputed here o Element 1 o P told the D his lover died of AIDS o Because of stereotyping, D likely suspected P had sexual relations with that person and was probably exposed to AIDS o D failed to make exceptions to their rule which they had done for others in the past o Element 2 P credit was not great But D knew that the one time credit issue had to do with medical bills P had significant assets in his bank accounts P had credit references Offered to pay one years rent up front P was qualified to rent the property o D reasons for rejection o P credit extremely poor such that any reasonable real estate agent would have rejected it o The decision to reject P application and offers were made by the owner for whom D was only acting as a agent CLASS NOTES o P here uses disparate treatment claim o Disparate treatment-dont have to prove intent to discriminate o Disparate impact-use statistical evidence that some percentage of tenants are not in protected group Rebuttable presumption of 1) 58

3.

Exemptions from Fair Housing Act a.

statistical or 2) policy perpetuates segregationist policies

if the owner occupies one of such living quarters as his residence Rooms or units in dwellings containing living quarters occupied by no more than four families living independently of each other

b.

if he owns less than three houses and does not use a real estate broker or agent in the sale or rental Any single-family house owned or rented by an owner

c. d.

Only sections a, b and f Advertising provision applies no matter what

4.

Selecting the Estate Four Nonfreehold Estates a. Terms of Years Tenancy i. Has a fixed duration which is agreed upon in advance ii. Once the term ends, the tenants possessory
59

right automatically expires and the landlord may retake possession of the premises iii. Example-L leases to Greenacre to T From July 1, 2009 until June 30, 2019 Ts estate ends at midnight on June 29, 2019 iv. v. Commonly used in commercial leases Expires on own at the end of the fixed term without either party giving notice vi. Doesnt have to be for years can be for days, weeks, months or any time vii. Grantor has reversion

viii. There must be a specific and definite start and end date

b. i.

Periodic Tenancy Automatically periods unless renewed the for successive or tenant

landlord

terminates the tenancy by giving advance notice ii. L leases from month to month, beginning
60

July 1, 2009 To end the tenancy, either L or T must give one months notice to the other iii. Generally advance notice equal to one period term must be given but if its a one year periodic tenancy then six months typically required iv. Termination must coincide with natural end of the period
Hypo: I have a Month to month lease thru May 1st. Dec 15th tenant gives notice to terminate on Jan. 15th. Doesnt coincide w/ natural end of period (dec. 31 or Jan 31). So, would have to hold lease until Jan. 31st. Not after. *At end of next full period.

c. i.

Tenancy at Will Has no fixed ending point and continues only so long as both the landlord and tenant desire

ii.

ExampleL leases for as long as both of us wish

iii.

Often

this

estate

arises

by

implication

without an express agreement iv. At common law, with the landlord or the tenant could end the tenancy without

advance notice to the other

61

v.

Today, most states require advance notice to end this tenancy usually equal to the period of time between rent payments

vi.

Tenancy

automatically

terminates

1)

if

either party dies, 2) the tenant abandons possession or 3) the landlord sells the property vii. No fixed duration and no defined renewable periods d. i. Tenancy at Sufferance Created when a person who rightfully took possession of land continues in possession after that right ends ii. Arises from the occupants improper

conduct, not from an agreement iii. This could also be called a wrongful

occupancy General Notes on Leases Lease-transfers rights to use and

possess/transferring exclusive right of possession

62

o With every leasehold there is an estate in the tenant o With every leasehold there is a reversion in the landlord o With every leasehold there is exclusive possession and control of the land in the tenant o Generally, there is a contract between the parties Leases Interests License-personal privilege to use land for some reason-not a right-revocable grant of Distinguished from Non-Possessory

permission to enter land for a specific purpose Easement-permits the holder to enter land and make particular use of the land in someone elses possession Profit-right to enter the land but holder can also remove part of the land-right to remove timber, minerals, oil and gas, etc. 5. Negotiating the Lease a. SOF i. Lease of real property for more than a year must be in writing in order to be enforced ii. In order to meet the standard, the lease or document must contain the key lease terms
63

(party, property, duration, and rent) and be signed by the party against whom enforcement is sought **6. Delivering Possession about tenants
American Rule Landlord merely covenants that possession will not be withheld by him or by one having paramount title. Only provides legal right to the property The lessor has conveyed the sole and exclusive right of possession to the tenat so the landlord has no action against the holdover tenant Incoming tenant has superior legal right to possession so the landlord cannot sue holder REMEDIES Incoming tenant may sue the holdover tenant to recover possession and damages but she has no claim against the landlord Can sue for possession and damages Incoming tenant may not terminate the lease but can sue the holdover tenant Incoming tenant may NOT sue the landlord

American

versus

English

Rule

EnglishRule Requiresthatwhentheleaseissilentonthepoint,the landlorddeliveractualpossessionofthepremisesatthe beginningoftheterm Lesseesrightsarebasedonbreachofthelessorsimplied covenantthathehasarighttoleasethepremises,orofthe impliedundertakingthatthelessorwilldeliverpossession tothelessee Ifthelesseecannottakepossessionbecauseofaholdover tenant,orsomeotherobstructingthirdperson,thelandlord isinbreachofhisobligation Implieddutytoputtenantinactualpossessiononfirstday ofleasetermunlesstheleasespecificallydisclaimssuchan obligation Obligationtodeliverphysicalandlegalpossession 64

o o o o

Rationale Landlordisbetterabletoprotecthimselfintheleasedocumentbyexpresslylimiting ordisclaiminghisobligationtodeliverpossession,orelsebyrequiringsecurityofa priortenantinpossessionthathewillnotholdover Thelandlordmayhavearemedyindamagesagainstaholdovertenant Cantreatholdovertenantasatrespasserandevict Maytreatholdovertenantasaperiodictenantandallowforthemtoadhereorabide toterms Somestatutesallowlandlordtocollectdoublerent Landlordcannotifytenantthatfutureoccupancywillbeundernewtermsusually includinghigherrent Landlordisinbetterpositiontoappraise,anticipate,andbeartheriskoflossthana prospectivetenantnotyetinpossession REMEDIES Tenantmayterminatetheleaseandsuethelandlordfordamages Alternatively,shemayaffirmthelease,paynorentuntilthe premisesarevacantandcollectdamagesfromthelandlord

B.

Condition of the Premises

Redefining the landlord-tenant relationship over time. CL Caveat Emptor, Tenant had responsibility and Permissive Waste, shifts to Implied Covenant of Quiet Enjoyment not to wrongfully interfere, shifts to revolutionary Implied Warranty of Habitability. Take a look at p. 473 note a

1. 2. a. b.

The Challenge of Substandard Housing Constructive Eviction (as a defense) Common law offered special protection for the tenant in defective leased premises Wrongful conduct by the landlord that substantially interfered with the tenants beneficial use and enjoyment of leased premises was deemed a constructive eviction i. Under these circumstances, the tenant could vacate the premises and end the lease, thus avoiding liability for future rent Evolved out of an implied covenant of quiet enjoyment-a promise by the landlord that he would not wrongfully interfere with the tenants possession i. Promises in a lease were originally viewed
65

c.

d. e. f. g. h.

as independent covenants, so landlords breach of this covenant did not excuse the tenants continued performance - BUT there was one exception-ACTUAL eviction Over time, constructive eviction evolved out of this doctrine Both action and lack of action can constitute constructive eviction The landlord is not responsible for actions of third parties but this rule applies only when the landlord does not permit the third party to act A constructive eviction results from a landlords failure to keep the premises in a tenantable condition Untentability exists when the interference with occupancy is of such a nature that the property cannot be used for the purpose for which it was rented A constructive eviction cannot exist where the tenant does not surrender the property Following a constructive eviction, a tenant is required to vacate the premises immediately, but is entitled to reasonable time to do so The tenant bears the burden of proving that he did not abandon the premises within a reasonable time Wrongful conduct standard is met when a landlord i. Fails to perform an obligation in the lease ii. Fails to adequately maintain and control the common area iii. Breaches a statutory duty owed to the tenant iv. Fails to perform promised repairs v. Allows nuisance like behavior Third Parties i. Many courts and the Restatement allow a
66

i. j. k.

l.

m.

tenant to assert constructive eviction due to the acts of third parties if the landlord has a legal right to control the third partyconduct n. Steps 1. 2. Tenant must notify landlord of the problem Tenant must give the landlord a reasonable period to fix the problem 3. Tenant must vacate the premises Some states allow a tenant to remain in possession and recover damages on a constructive eviction theory 3. Implied Warranty of Habitability THE REVOLUTION!!! a. Designed to protect ordinary consumers who do not have the knowledge, capacity, or opportunity to ensure that goods which they are buying are in safe condition b. Landlord warrants that the leased premises are habitable at the outset of the least term and will remain so during the tenancy c. Does not require the landlord to maintain the premises in perfect condition at all times d. Does not preclude minor housing code violations or other defects FACT QUESTION = HABITABLE?? e. Landlord is not responsible for defects caused by the tenant f. Landlord must have reasonable time to repair the defects before a breach can be established g. Requires that landlord maintain bare living requirements and that premises are fit for human occupation h. Failure to supply hot water or heat breaches the warranty but a breach is not shown in a malfunction of blinds, minor water leaks or need for paint i. A code violation is not necessary to establish a breach so long as the claimed defect has an impact on the health or safety of the tenant
67

j.

Remedies for Breach IMP KNOW THESE! P. 483 1. WITHOLD RENT - Tenant may withhold rent may motivate the landlord to repair damages 2. REPAIR AND DEDUCT - Tenant may continue to pay rent to the landlord and bring an affirmative action to establish breach and receive a reimbursement for excess rent paid 3. SUE FOR DAMAGES A. Special damages may be recovered when the tenant suffers personal injury, property damages, relocation expenses, or other similar injury due to a foreseeable result of landlords breach ii. General damages are recoverable in the form of rent abatement or reimbursement to the tenant-these are more difficult to calculate Courts can use fair rental value of the premises as warranted less their fair rental value in the unrepaired condition Under this approach rent may be considered as evidence of the value of the premises warranted Another measure is the contract rent less fair rental value of the premises in unrepaired condition Some courts use percentage dimunition where the tenants recovery reflects the percentage by which the use and enjoyment of the property has been reduced by uninhabitable premises l. Most courts hold that any waiver of warranty is invalid as against public policy m. Procedure i. Tenant must notify the landlord about the defects and allow a reasonable time for landlord to make repairs ii. Tenant not required to vacate the
68

C. subleasing

premises n. Remedies i. Withhold rent ii. Repair and deduct iii. Sue for damages o. In most states, warranty of habitability does not apply to commercial leases Transferring the Tenants Interest Assigning and
Basically, an assignment occurs when a lessee transfers his entire interest under the lease (including right to possession for the duration of the lease). Leaving nothing

If the lessee transfers anything less than their entire interest (for example only one year out of a two year lease), then it is a sublease. Reserves a reversionary interest

1.

Assignment or Sublease? a. i. Majority Approach-Objective Test Did the tenant transfer his right of

possession for all of the remaining lease term? If so, it is an assignment. If not, then it is a sublease ii. If transfer for entire duration then it is an assignment iii. If transfer less than entire balance, its a
69

sublease and the tenant retains a reversion b. i. Minority Approach-Subjective Test It would be possible to have a sublease for the entire remaining term of the original lease ii. Look to the intent of the parties

2. a. b.

Assignments-A Triangular Relationship The tenant (assignor) transfers (assigns) her entire interest in the leases premises to a third party (assignee) If T assigns her rights in a short store space to U, PRIVITY OF CONTRACT still exists between T and L(landlord) and PRIVITY OF CONTRACT arises between T and U.

But PRIVITY OF ESTATE only exists between L and U. In effect, U has taken Ts place. L and U are still obligated to perform all the covenants in the original lease that run with the land (duties to pay rent, repairs, provide heat, use for specific purposes) c. In order for duties to run with the land privity of estate must exist 3. SUBLEASES -Two Separate Relationships a. A sublease essentially involves two separate
70

landlord-tenant relationships. sublessor) transfers

The tenant (the part of her

(subleases)

interest in the leased premises to a third party (the sublessee) b. The original landlordtenant privity of contract and privityofestateremainintact c. Tenantandsublesseealsohaveprivityofcontractand privityofestate d. ThirdpartyhasnodutytopayrenttolandlordbutifT fails to pay the rent then landlord can evict the third party 4. a. Transfer Issues/Landlord Consent If L and T enter into lease that requires L consent to any transfer by T what standard governs Ls decision. Three basic possibilities: i. Sole discretion clause owner may refuse consent for any reason ii. Reasonableness clause owner may refuse consent only on commercially reasonable basis. Ex: bad credit record iii. No standard in lease requires owners consent but no standard to guide decision (silent consent clause) b. Silent Consent Clause i. Majority Rule Where a lease contains an consent clause, the lessor may arbitratily refuse to approve
71

a proposed assignee no matter how suitable the assignee appears to be and no matter how unreasonable the lessors objection Came under attack just prior to 1985 ii Minority Rule o Consent may be withheld on where the lessor has a commercially reaonsable objection to the assignment even if the clause is silent about reasonableness o Landlord must have commercially reasonable basis for withholding consent
Original tenant remains liable under both assignment and sublease b/c of privity of contract. Owner can release original tenant (called novation) from liability. HYPO 1: 3 yr lease to Rogers who assigns remaining interest to Conditt who assigns remaining interest to Eldridge. Who can Greene get rent from? Edlridge-privity of estate (possession, reversion, and ? Rogers-privity of contract Can't sue Conditt b/c he has neither HYPO 2: Greene landlord. Eldridge 1 year lease. Garrety lives there 3 months in summer while he is in ATL. Who can Green get rent from? Eldridge only. Sublease so reversionary interest in Eldridge. If last 3 months of lease-could argue assignment HYPO 3: Greene landlord. Rogers 5 yr lease. Gives remaining to Conditt but retains right to reentry if Conditt defaults. Sublease or assignment? Historically, contingent right to reentry not regarded as estate. So it would be assignment, not sublease. Modern view would be right to reentry is substantial right (estate) to make it a sublease. **Know difference in privity of estate and privity of contract. KENDALL V. ERNEST PESTANA applies only to commercial leases Perlitch leased a hangar at the San Jose Airport. Perlitch assigned his interest to Pestana. Pestana subleased the hangar to Bixler for 25 years (Bixler was to pay Pestana) for his airplane repair business. After 11 years, Bixler sold his business to Kendall. As part of the purchase agreement, Bixler was to assign the sublease to Kendall. However, Pestana balked. o According to the original agreement, the written consent of the lessor (Pestana) was 72

required for Bixler to assign the property to Kendall. o Kendall was in better financial shape than Bixler. Pestana demanded increased rent as a condition of consent. Kendall refused and sued, arguing that Pestana's refusal was unreasonable and amounted to an unlawful restraint on the freedom of alienation. o Alienation is the right to sell your property interest without constraint. The Trial Court found for Pestana. Kendall appealed. The California Supreme Court reversed and remanded for trial. o The California Supreme Court noted that the lease had a clause requiring consent. They also recognized that a majority of jurisdictions would find the clause bindings. o However, the Court changed the common law and found that for reasons of Property law and Contract law, the clause was void if Pestana acted unreasonably. In Property law, the Restatement of Property 15.2(2) says that, "a restraint on alienation without the consent of the landlord of a tenants interest in leased property is valid, but the landlord's consent to an alienation by the tenant cannot be withheld unreasonably." In Contract law, "where a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing." o Pestana unsuccessfully made four arguments that had been used to deny consent: The lessor made a personal choice of lessee. They should not be forced to accept a new tenant. The lessee could have bargained for a more liberal sublease policy, but chose not to do so. The issue had already been decided in numerous courts and should not be 73

changed, since many lessors relied on the original rule. If the value of a property increases, the lessor has a right to raise rents to compensate. o The Court found that whether Pestana was acting reasonably was a question for a jury to decide. Denying consent solely on the basis of personal taste is not commercially reasonable. Denying consent because you want to squeeze a higher rent out of the new tenant is not commercially reasonable. (a) Factors to consider in applying standards of good faith and commercial reasonableness Financial responsibility of the proposed assignee Suitability of the use for the particular property Legality of the proposed use Need for alteration of the premises Nature of the occupancy (office, factory, clinic, etc.)

(b)Tenant has the burden of proof on unreasonableness The ruling in this case was eventually codified into Statutory law by the California legislature. Court gives two reasons for imposing commercially reasonable standard the lease as a conveyance-promotes

1. Treat alienability

2. Treat the lease a contract-good faith and fair dealing standard

Commercially Reasonable Standard What is NOT commercially reasonable?

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1. Personal taste 2. Inconvenience 3. Where you try to charge higher rent than originally contracted for What is commercially reasonable? 1. Preserving the image of some property in favor of the main tenant 2. Desire for good tenant mix/diversity 3. Where lessor believes assignees business would not succeed D. Ending the Tenancy if the parties agree to terminate early, 1. a. Abandonment RST 2ND: Abandonment of a premises by the tenant occurs when he vacates the leased property without justification and without any present intention of returning and he defaults in the payment of the rent. i. If the tenant vacates with justification-due to constructive eviction, etc-no abandonment occurs If T abandons the leased premises before the lease terms ends, traditionally, landlord L could choose among three options: i. Sue for all rent-L could keep the premises vacant until the lease term expired, and then sue T for all the accrued rent ii. Terminate the lease-L could treat Ts abandonment as an implied offer of surrender and terminate the lease iii. Mitigate damages and then sue for rent-L could mitigate his damages by reletting the premises to another tenant, retaining that rent and then suing T for the balance At common law, the landlord had no duty to find
75 called a surrender

b.

c.

a new tenant but now there is a duty to mitigate damages

o The New Jersey Supreme Court found that a landlord does have an obligation to make reasonable efforts to mitigate damages, even if the apartment was wrongfully vacated.

o The burden is on the landlord to prove he used reasonable diligence in attempting to re-let the premises-here the court should consider the following factors:
1. Whether the landlord, personally, or through an agent, offered or showed the property to any prospective tenants 2. Advertisements in newspapers 3. Tenant may rebut such evidence by showing that he proferred suitable tenants who were rejected *Most states follow the Sommer rule-after abandonment, the landlord must either terminate the lease or mitigate damages *Restatement of Property still follows traditional approach of NO mitigation

d. i. ii. e.

Majority Rule when tenant abandons Terminate lease or sue for damages and mitigate damages Burden on landlord to prove took reasonable efforts to mitigate

What are reasonable efforts to mitigate damages i. Showing to all prospective tenants ii. Advertise through newspapers, signs in windows iii. Landlord need not accept less than fair market value iv. Landlord does not have to substantially alter obligations established under the preexisting lease v. If asking for higher rent just for negotiation purposes then that is reasonable Security Deposits??
Eviction 76

2.
3.

a.

Retaliation Issues - Hillview Associates v. Bloomquist

FACTS -Tenants at a mobile home park began to organize and meet informally to discuss concerns over the physical condition of their mobile home park Relationship declined, Another meeting resulted in some type of physical altercation After the meeting the management served ultimatums on all tenants requiring them to sign park rules or be evicted Management also sought out tenants not in the tenants association in an attempt to start a rival association favoring management Management served a 37 day termination notice on a group of married couples at the meeting Former secretary for manager said well get these now and the rest later so it wouldnt look like were doing it because they were members of the association REASONING Iowa adopted Mobile Home Parks Residential Landlord and Tenant Act Evidence of a complaint within six months prior to the alleged act of retaliation creates a presumption that the landlords conduct was in retaliation Presumption means the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which could support a finding of its nonexistence This presumption imposes a burden on the landlord to produce evidence of legitimate nonretaliatory reasons to overcome the presumption Tenant is then afforded a full and fair opportunity to demonstrate pretext

Procedure for Eviction i. TRADITIONALLY, L could evict T in one of two ways: 1. Use self-help: L could retake possession through self-help by physically entering the premises and causing T to leave-so long as L only used a reasonable amount of force OR
77

c.

2. Sue the tenant: L could sue T, secure a judgment ordering Ts eviction, and have the judgment enforced by a law enforcement officer
NOWADAYS: A landlord may use self-help to retake possession of a leased property as long as: The landlord is legally entitled to take possession. AND The landlord does it peaceably. The Court defined non-peaceable as anything that could possibly lead to a confrontation. They construed the law so narrowly that pretty much the only way a repossession could be peaceable was if the tenant had completely abandoned the property. o Basically, the Court was saying that if there is a dispute with a lease, the landlord should not take the law into their own hands and lock out the tenant. They should go to court and get a court order to do so. o "The only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord's claim of breach of a written lease is by resort to the judicial process." o In the past, landlords had to resort to doing it themselves (aka self-help) because the judicial process for kicking someone out (aka ejectment) was slow and cumbersome. But modern laws have attempted to make a summary proceeding to eject a deadbeat tenant relatively quick and straightforward. This case basically says never is there time where there is a self-help without breach of the peace Landlord can only use self help where the tenant has clearly abandoned or surrendered

VII. PRIVATE LAND USE PLANNING CLASS THEME: WE WANT PRODUCTIVE USE OF LAND, BUT THIS CONFLICTS WITH CERTAIN RESTRICTIONS , AKA I do what I want with my property versus govt, CIC, other peoples restrictions A.

Easements know the 4 types

Express Implied Easement by Prior Existing Use Easement by Necessity Prescriptive Easement Easement by Estoppel (Irrevocable License)

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Terminology
Dominant tenement or dominant land-the land benefited by the easement Servient tenement or serviennt land-the land burdened by the easement Dominant owner-easement holder Servient owner-owner of servient land Appurtenant easement-benefits the holder in her use of a specific parcel of land Easement in gross-is not connected to the holders use of any particular land-it is personal to the holder Affirmative easement-allows the holder to perform an act on the servient land Negative easement-allows the holder to prevent the servient owner from performing an action on the servient land Merger where 1 owner owns both the dominant & the servient estate no longer an easement

1.

Creating Easements a. Express Easement by Grant i. Arises when the servient owner grants an easement to the dominant owner b. i. Express Easement by Reservation Arises when the dominant owner grants the servient land to the servient owner but retains or reserves an easement over that property
79

c.

d.

e.

Express Easements may be created only in a writing that satisfies the SOF and will include: i. Identity of the parties ii. Describe the servient land and the dominant land (if any) iii. Describe the exact location of the easement on the servient land iv. State the purposes for which the easement may be used and be signed by the parties Traditionally, express easements by reservation could only be reserved in favor of the dominant owner, / but the modern decisions allow this easement to be reserved in favor of a third party Easement v. License if vague on EXAM, ARGUE BOTH i. License-an informal permission that allows the holder to use the land of another for a particular purpose but it is not an interest in land f. Transfer i. An appurtenant easement is seen as attached to the land so the transfer of the dominant land automatically transfers the benefit of the easement to the grantee ii. In some states an easement in gross is only transferable if it serves a commercial purpose but the modern trend is to allow the transfer of an easement in gross unless the parties had a contrary intent

NOTES - If the owner has a limited right to exclude and the right to use is continuous for a deifinite period of time then the interest will likely be an easement not a license - If the owner retains a right to exclude and it is not for a definite period of time then more than likely this will be a license Greene calls the easement in this case an appurtenant easement because it continued to burden the land and was not purchased by a bona fide purchaser If the status of a bona fide purchaser is met then it would have been an easement in gross To have a bona fide purchaser the following must exist: 80

The purchaser paid value and the taking was in good faith, AND The purchaser had no notice of the previous conveyance

Appurtenant versus In Gross Easements According to Greene Appurtenant Intended to run with the land such that the benefit of the easement will pass to any future owner of the dominant estate and the burden will be imposed on any future owner of the servient estate Senger says an easement is intended to be appurtenant and will run with the land only if: Intended to run with the land If the intention is in writing If owner of servient estate purchases with notice of the easement Notice is not the distinguishing factor deciding whether an easement is in gross or appurtenant but notice is relevant when we talk about the expectation that it will be run with the land Three types of notice Actual-the owner in fact has knowledge of the easement Constructive-deeds recorded and in those deed the easement is mentioned and the deed is recorded in proper place and the deed is in the chain of title then the purchaser is said to have constructive notice Inquiry-visible signs of use by non-owners prompting a reasonable owner to do further investigation In Gross Not intended to be attached to any particular ownership of a piece of land-not intended to be attached to any possessory right of some piece of land
81

If at the time of creation, the parties intended it to be a permanent grant then you could say its an appurtenant. Look at the following factors Was the easement meant to provide irrevocable access to a certain land? Was it intended to bind future owners of the servient estate? If the answer is yes to either of these then you may view it as an appurtenant easement

Implied Easement by Prior Existing Use Three elements usually required 1. Severance of title to land held in common ownership 2. An existing, apparent, and continuous use of one parcel for the benefit of another at the time of the severance 3. Reasonable necessity for that use Reasonableness test-the easement must be beneficial or convenient for the use of the dominant tenement, but need not be essential Restatement defines reasonable necessity as meaning that alternative access or utilities cannot be obtained without a substantial expenditure of money or labor Implied easement by prior existing use can arise by grant or reservation & prior use must be there when severance occurs h. Easement by Necessity Required Elements o 1. Severance of title to land held in common ownership and o 2. Strict necessity for the easement at the time of severance Traditionally, strict necessity is found only when the owner has no legal right of access to her land-Thus, the parcel may be
82

g.

surrounded by privately-owned land, and the owner must not have a right to cross that land to reach a public road Minority of courts require only reasonable necessity-the easement must be beneficial of convenient for the use of the dominant parcel, but not absolutely necessary (Restatement only requires reasonable necessity) **If bridge falls down AFTER Easement by Necessity is created, then eas. Holder is OUT OF LUCK o An easement by necessity will not arise if this would contradict the actual intent of the parties o An easement by necessity will only last so long as the necessity continues o Generally, the owner of the servient land is entitled to select the route for an easement by necessity, as long as it is reasonable
Greene distinguishes necessity versus prior use: 1. Implied easement of necessity ONLY last as long as needed, *Not true with easement by prior use unlimited duration. 2. Reas. Nec. Vs. Strict Nec. State of Vermont Case reflects an INSTRUMENTALIST view navigable water exception, contemporary realities

i.

Prescriptive Easements i. Elements - CHO

1. Continuous for the statutory period 2. Hostile (Adverse without permission) 3. Open and notorious ii. Most states presume adversity and hold that continuous use of an easement over a long period of time without a landowners

interference is presumptive evidence of its existence

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iii.

Traditionally, the public could not acquire a prescriptive easement, but many modern courts recognize public prescriptive easements

generally, PERMISSION will defeat easement by prescription but will not defeat Easement by Estoppel

j. License

Easement

by

Estoppel/Irrevocable

Elements 1. A landowner allows another to use his land, thus creating a license 2. The licensee relies in good faith on the license, usually by making physical improvements or by incurring significant costs and 3. The licensor knows or reasonably should expect such reliance will occur

2.

Interpreting Easements

Traditional rule is that the location of an easement can be changed only if both the servient and dominant owners agree but the Restatement provides that the servient owner may relocate an easement as long as this does not significantly lessen the utility of the easement, increases the burdens on the easement holder, or frustrate the purpose of the easement *Public Policy reasons for the majority strict interpretation = potential
purchasers need to be able to rely on the terms (cant have them shifting) Second, does the proposed use result in serious material burden on the servient land? If yes, like splitting it up completely to like 4 users, easement goes beyond original scope

84

The public policies behind these rules of easements are to promote certainty in land transactions, and for owners to be assured that their conveyances will not be construed to undermine privateproperty rights. 1. 2. 3. Greene commentary: Forlandownersgivingeasements,makesuretheeasementsarelimitedintheirgrantsas towhatmayandmaynotbeputintheeasementpremises. Makesureyouarecompensated. Anddrawthesegrantprovisionsnarrowlytomakesureyouarecompensatedyetagain, andagain,andagain,everytimetheeasementisusedforadditionalordifferent purposes. Ofcourse,ifyoureacquiringtheeasement,payonce,andgeteverything,includingthe righttoassignpartsofyoureasementrights.Thenyoucanbetheonecompensatedover andover. RULES 1. Apply contract construction and the contracting parties intentions, as expressed in the grant, determine the scope of the conveyed interest 2. When the grants terms are not specifically defined, they should be given their plain, ordinary, and generally accepted meaning 3. If a particular purpose was not provided for in the grant, a use pursuing that purpose is not allowed 4. The manner, frequency, and intensity of an easements use may change over time to accommodate technological development but such changes must fall within the purposes for which the easement was created-as determined by the grants terms ZUNI TRIBE RULE

4.

3.

Terminating Easements A. i. B. i. Abandonment Most jurisdictions agree that mere nonuse of an easement is not abandonment Prescription An easement may be terminated by prescription, using essentially the same standard for acquiring a prescriptive easement
85

ii.

If the servient owner blocks use of the easement in an open and notorious adverse and hostile and continuous manner for the prescriptive period, the easement ends

4. a.

Negative Easements An easement that entitled the dominant owner to prevent the owner from performing an act on the servient land

VIII. PROMISORY SERVITUDES: REAL COVENANTS AT LAW AND EQUITABLE SERVITUDES

REAL COVENANT Intent to Bind Successors Touch and Concern Privity of Estate Horizontal Vertical Remedies are: money damages & injunctive relief Remedy: Injunctive Relief EQUITABLE SERVITUDE Intent to Bind Successors Touch and Concern Notice inquiry) (actual, constructive,

86

REAL COVENANT REQUIREMENTS For the Burden to Statute of Frauds Intent to Bind Successors Touch and Concern Notice Horizontal Privity Vertical Privity Run Yes Yes Yes Yes Yes Yes For the Benefit to Run Yes Yes Yes No No Yes

EQUITABLE SERVITUDE REQUIREMENTS For the Burden to Statute of Frauds Intent to Bind Successors Touch and Concern Notice Horizontal Privity Vertical Privity Run Yes, or common plan Yes Yes Yes No No For the Benefit to Run Yes, or common plan Yes Yes No No No

Distinctions between real covenants and equitable servitudes Available remedy for breach For real covenant-monetary damages or injunction For equitable servitude-injunction or specific performance Doctrines that terminate the two obligations Abandonment terminates real covenants and equitable servitudes 87

Acquiescence, unclean hands, and relative hardship only terminate equitable servitudes Requirements for Creation Covenant requires: Intent of parties Privity of estate Touch and concern American courts require notice Equitable servitude requires: All except privity

A. History First phase. English Resistance a. Concerned by negative easements for procedural and conceptual reasons b. Practically-English courts concerned by a lack of recording system making it difficult for buyers of land to discover negative easements. Courts feared recognition of new negative easements would unreasonably burden transferability and development of land c. Conceptually, courts concerned about a servient landowner foregoing some use of her land which involves more invisible and intangible rights Second phase. Development of Covenants Running With the Land a. b. Landowners turned to contract law but in the early part of the 19th century, the law generally considered contract rights and non-assignable But there was an exception where parties stood in privity of estate (traditionally restricted to lessor and tenant) Traditional Rule Three requirements for such a covenant to bind successors in ownership of the burdened land. 1. The covenanter demonstrate the covenanting parties intent to bind successors
88

2. The covenant touch and concern the land 3. There be privity of estate between the covenanting parties 3. Covenants Running With the Land in American Law a. To enforce a covenant against a successor at law (action for monetary damages), American courts generally require that: 1) The original covenanting parties intended to bind successor owners to the restriction 2) The restriction touched and concerned the land 3) The original covenanting parties stood in privity of estste 4) The successor took the land with NOTICE of the restriction To enforce a covenant against a successor in equity (specific performance or an injunction), American courts generally have disgarded the privity requirement, requiring only that: 1) The original covenanting parties intended to bind successor owners to the restriction 2) The restriction touched and concerned the land 3) The successor took the land with notice of the restriction c. i. Analyzing privity of estate American Courts have extended privity of estate beyond the landlord-tenant relationship b.

Two Components Horizontal-focuses on relationship between the original parties to the covenant Exists if the original parties to the covenant have either a mutual interest (simultaneous interest) or successive interests (succession of interest) in the affected land at the time they enter into the covenant Mutual interest exists when each party has some interest in a given parcel of land Servient Landowner and Easement holder
89

Landlord/Tenant Concurrent Owners Life Estate Holder/Remainder Holder Succession in interest exists when the parties make the covenant as a part of the grant of an estate from one to the other thereby standing in grantor-grantee relationship At the time the original parties enter into a covenant was there a grantor/grantee relationship?? ASK Is the relationship a grantor/grantee? Does it affect the land for which the covenant was created? Does the relationship exist at the time the covenant was created? If Yes, then succession in interest is established Vertical-focuses upon succession to the interests of the original parties to the covenant-either a transfer of the burdened parcel, a transfer of the benefited parcel or both at the some point after the original covenanter and covenantee enter into the covenant In most cases, requires that the successor owner succeed to the entire estate of the predecessor ***Look at the duration of the estate and if the successor received the same estate then vertical privity exists iii. What type of privity is required for a burden or a benefit of a covenant to run with the land? (First Restatement Approach) First Restatement requires both horizontal and vertical privity before a covenantee or her successor could enforce the burden of a covenant against a successor to the covenantor iv. Common law relaxes requirements for the running of the benefit of a covenant Neither horizontal nor vertical privity was required if a successor owner of the benfitted parcel sought to enforce the covenant against the original covenantor
90

Analyzing touch and concern If the covenant merely be collateral to the land and does not touch or concern the thing demised in any sort, it will not be enforceable as between successors in ownership to the original parties to the covenant This is not extremely difficult to apply to negative covenants restricting land use ii. Touch and concern-the covenant must relate to the enjoyment, occupation, or use of the property iii. Class Notes Ask two questions Does the covenant in purpose and effect substantially alter the legal rights of the landowner in a way that is connected with the land? Does the covenant impose a burden on one interest in land which also increases the value of the different interest in the same or related land? If the answer is yes to either question then presumably the covenant will touch and concern the land e. Difference in Real Covenant and Equitable Servitude i. The traditional remedy for breach of real covenant is damages ii. Equitable servitude is enforced by an injunction 3. a. b. Restatement Approach Combines the real covenant and equitable servitude into one doctrine-the covenant that runs at law A coveant running with the law is a servitude arising when: i. The owner of the property to be burdened intends to create a servitude
91

d. i.

He enters into a contract or conveyance to this effect that satisfies the SOF iii. The servitude is not arbitrary, unconstitutional, unconscionable, or violate of certain public policies This standard abandons the requirements of touch and concern and horizontal privity 4. Common Interest Community a. Planned residential development where all properties are subject to comprehensive private land use restrictions and which is regulated by a homeowners association b. Restatement approach-A servitude is valid unless it is illegal or unconstitutional or violates public policy It violates public policy if it: i. Is arbitrary, spiteful, or capricious ii. Unreasonably burdens a fundamental constitutional right iii. Imposes an unreasonable restraint on alienation iv. Imposes an unreasonable restraint on trade or competition v. Is unconscionable c. Validity of Specific Restrictions i. A covenant which barred non-Caucasians from living on a particular street violated the Equal Protection Clause of 14th amendment d. Property owners can lose the right to enforce a specific covenant is the specific covenant has been abandoned, thereby rendering it unenforcement i. The test to determine abandonment Requires the party opposing enforcement to prove that existing violations are so great as to lead the mind of the average person to reasonably conclude that the restriction had been abandoned This test is met when the average person upon inspection of a subdivision and knowing of a certain restriction will readily
92

ii.

observe sufficient violations so that he or she will logically infer that the property owners neither adhere to no enforce the restriction In applying the test courts consider the following: Number, Nature and Severity of the then existing violations, any prior acts of enforcement of the restriction, and whether it is still possible to realize a substantial degree the benefits intended through the covevant Courts should consider number, nature and severity first and then go to other factors e. Discharge of a Covenant i. Burden is on party seeking the discharge to show that the original purpose of the restriction has been materially altered or destroyed due to changed conditions, and that a substantial benefit no longer extends to the other party by enforcement of the restriction **As a general rule, a restrictive covenant may be discharged if there has been acquiescence in its breach by others, or an abandonment of the restriction **Changes in character of a neighborhood may result in the discharge of a restrictive covenant ****Where the changed or altered conditions in a neighborhood render the strict adherence to terms of a restrictive covenant useless to the dominant lots, the court will refrain from enforcing such restrictions
Rule: "Essential elements of a real covenant: (1) must appear grantor & grantee intended that the covenant should run with the land; (2) covenant touches or concerns the land which it runs; (3) privity of estate between the promisee or party claiming the right to enforce it, and the the promisor or party who rests under the burden of the covenant."

Defenses to Restrictive Covenants

93

1.

Abandonment

Requires the party opposing enforcement to prove that existing violations are so great as to lead the mind of the average person to reasonably conclude that the restriction had been abandoned The test is met when the average person upon inspection of a subdivision and knowing of a certain restriction will readily observe sufficient violations so that he or she will logically infer that the property owners neither adhere to no enforce the restriction In applying the test courts consider the following: Number, Nature and Severity of the then existing violations, any prior acts of enforcement of the restriction, and whether it is still possible to realize a substantial degree the benefits intended through the covevant Courts should consider number, nature and severity first and then go to other factors 2. Changed Conditions

Burden is on party seeking the discharge to show that the original purpose of the restriction has been materially altered or destroyed due to changed conditions, and that a substantial benefit no longer extends to the other party by enforcement of the restriction As a general rule, a restrictive covenant may be discharged if there has been acquiescence in its breach by others, or an abandonment of the restriction Changes in character of a neighborhood may result in the discharge of a restrictive covenant Where the changed or altered conditions in a neighborhood render the strict adherence to terms of a restrictive covenant useless to the dominant lots, the court will refrain from enforcing such restrictions 3. Unreasonableness
94

4.

Relative Hardship

The covenant will not be enforced if the harm/hardship caused by enforcement to the burdened estate owner will be greater than the benefit to the owner of the benfited estate 5. Unclean Hands Enforcement may be denied if the complaining party breached the covenant himself 6. Acquiesence Servient owner violates covenant and beneficiaries of the covenant fail to object and complain 7. Laches Servient owner waits too long to file a claim NUISANCE
Nuisance a. People don't have unlimited power to use land as you please: ex/ Gov't can have zoning laws. W/out remedy under zoning laws: use Nuisance b. Public Nuisance-improper interference w/ right common to public: good air, decency ex/ erica badoo naked recently where Kennedy was shot in Dallas. c. d. Private Nuisance-non-trespassory invasion in nature of another's use and enjoyment of land. Ex/ gas, noise, smoke, particles. Must have the following 3 kinds of interference: 1. Intentional 2. Substantial 3. Unreasonable a. **mere licensee cannot maintain nuisance action ii. 3 common elements for private nuisance: 1. D's conduct must cause interference w/ P's use of land 2. Intentional a. Knows to substantial certainty harm will result or b. Purposefully acts 3. Substantial 4. iii. 2 ways to approach unreasonable: 1. Gravity of Harm-D's conduct is unreasonable if causes substantial harm regardless of utility 2. Restatement-balance harm and utility a. **Must be a person w/ ordinary sensibilities-Hypersensitive P does not constitute nuisance. Ex/ ugliness of house is not enough e. Nuisances can be: 95

i. Permanent-passive and created by durable automated thing. Ex/ Dam backs up water on P's land. If structure and effects will continue to reasonable certainty into indefinite future. May recover past, present and future damages ii. Temporary (Ex/ Boomer case b/c owners could stop operation at any time)active operation is essential to its continuous effect .Allow past and present damages and injunction. f. Nuisance depends on context (factual situation). Major class theme. Rules: NE adopted Restatement 2nd that private nuisance is intentional and unreasonable invasion of another's use and enjoyment of land and unreasonable is if gravity of harm outweighs the utility of the actor. Also use following (5) factors for gravity of harm test:

1)Extent of harm involved 2) Character of harm involved 3)Social value law attaches to type of use or enjoyment invaded 4) Suitability of particular use or enjoyment invaded to the character of locality and 5) Burden on person harmed of avoiding harm
Use following (3) factors for determining utility: 1. Social value law attaches to primary purpose of conduct 2. Suitability of conduct to character of locality 3. Impracticability of preventing or avoiding invasion

d.

Private Nuisance
Use of your property in a way that unreasonably interferes with anothers use Difficult question is what is unreasonable (the gravity of the harm outweighs the utility of the actors conduct)

e.

Prah v. Maretti

Prah had solar panels on his home. Later, Maretti began building a home next door to Prah. Maretti's home would have blocked the sun so Prah's solar panels wouldn't work. o Note that Prah built his home only 10 feet away from the edge of his property, knowing that a future next door neighbor might chose to build a house that could block Prah's sun. Prah sued Maretti in order to force him to build his home further away from Prah's property line. 96

o Prah argued that Maretti's sun-blocking house was a nuisance. o Maretti argued that he could do whatever he liked with his property. Maretti agreed to move his home some, but not enough to satisfy Prah. Maretti wanted a view of the lake, and if he moved it any further he couldn't see the lake. The Trial Court found for Maretti in summary judgment. Prah appealed. o The Trial Court found that since Maretti's house conformed with zoning laws, there was no nuisance. The Appellate Court reversed and ordered a trial. o In the past, courts have refused to consider blocking sunlight a nuisance. However, this was mainly due to the sunlight was valued only for aesthetic enjoyment. o The Appellate Court weighed the gravity of the harm against the utility costs. In specific, they considered: Gravity of Harm: The extent of the harm involved. The character of the harm involved. The social value of that the law attaches to the type of use or enjoyment invaded. The suitability of the particular use or enjoyment invaded to the character of the locality. The burden on the person harmed of avoiding the harm. Utility of Conduct The social value that the law attaches to the primary purpose of the conduct. The suitability of the conduct to the character of the locality. The impracticability of preventing or avoiding the invasion. o The Court found that there were questions of fact as to the gravity of harm vs. the utility costs. These are questions for a jury to decide. Does the encouragement of solar power outweigh the harm to Maretti in not being able to see the lake? 97

In a dissent, it was argued that nuisance only occurs when the act is intentional and unreasonable. Also, there is liability only to those to whom it causes significant harm, the kind that would be suffered by a normal person under reasonable circumstances.

SHELLEY V. KRAEMER ISSUE 1) JUDICIAL ENFORCEMENT IS A STATE ACTION? 2) IF SO, DID IT DEPRIVE EQUAL PROTECTION UNDER THE LAWS?

A.

PowertoEnactZoningLaws A) Stateconstitutionsgrantpowerstostategovernmentofficials.Moststateconstitutionsgranttothe statespolicepowertoregulateactivitiesthataffectthepublichealth,safety,morals,orgeneral welfare.Theonlypowerthatcountiesandcitieshavearethepowersdelegatedtothembythestate constitutionorbylegislation.Moststatelegislaturesdelegatezoningauthoritytocitiesandcounties throughanenablingact.Inotherstates,thecitiesandcountiesgetthepowertozoneinahomerule provisioninthestateconstitution. B) TheUSConstitutionandStateConstitutionslimitthegovernmentspowertoregulate.State constitutionsmayoffermoreprotectiontoindividuals,butiftheypurporttoofferlessprotectionthan thefederalconstitutionthenthefederalconstitutionwillcontrol.Thereforewhicheverconstitution givestheindividualmoreprotectionwillbetheonethatcontrols. C) Constitutionalprovisionsinvokedtovoidzoninglaws: 1) SubstantiveDueProcessClause 2) ProceduralDueProcessClause 3) TakingsClause 4) EqualProtectionClause 5) FreeSpeechClause 6) FreedomofAssociationClause 7) FreedomofReligionClause D) StandardStateZoningEnablingAct 1) TheStandardActmakescitiesorcountiestheprimaryzoningauthorities.Thezoningauthority developsacomprehensiveplanestablishingthegoalsthatthezoningregulationshouldstriveto achieve.Theydividethecityorcountyintodistrictsorzonesandadoptsproceduresforenacting, enforcing,andamendingthezoningordinances. 2) TheStandardActgrantslocalgovernmentsthepowertoenforcethezoningordinance.Theact offersasystemofappealstoanadministrativebody(boardofappeals,boardofzoningadjustment, boardofzoningappeals)thatallowslandownerstopetitiontheboardforredress.Ifthelandowner challengesanofficials(buildinginspector)refusaltograntabuildingpermit,thelandownercan appeal. 3) Theboardofappealshasthepowertoissueavariance.Theboardalsohasthepowertogrant specialexceptions.

Thelawofzoning 1. Thevalidityofzoning 2. Thezoningprocess:searchingforflexibilityandfairness a) Amendmentsandconditionaluses

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4) Landownerswhicharedissatisfiedwiththedecisionoftheboardofappealsmayappealthe decisiontoacourt. II CumulativeZoningandNoncumulativeZoning A) EuclideanZoning:ZoningbydistrictsisknownasEuclideanZoning.Thevillage/city/countyis dividedintodistricts.Eachdistrictwasrestrictedbasedonthreemajorfactors:use,height,andarea. Alsoincludedwererestrictionsonotherthingssuchaslotwidth,setbacks,etc. B) CumulativeZoning:Thedifferentzonesordistrictsarerankedinahierarchy.Districtslimitedto residentialusesareconsideredhigherdistrictsorzones.Districtsallowingmultifamilyandbusiness usesarelower.Usesallowedinahigherzoneareallowedinlowerzones,butnousecanbelocated inahigherzonethanthatforwhichitislisted.Thehierarchyappliestoheightandarearestrictions also.ThiswasusedinEuclid. C) NoncumulativeZoning:AlsocalledExclusiveZoning.Onlyauthorizedactivitiesareallowedineach district. III Constitutionality A) DueProcesClause: 1) 5thAmendmentNopersonshallbedeprivedoflife,liberty,orproperty,withoutdueprocessof law. 2) 14thAmendmentNorshallanystatedepriveanypersonoflife,liberty,orpropertywithoutdue processoflaw. B) ConstitutionalityinEuclid: 1) Euclidinvokedsubstantivedueprocess.Thisaddresseswhetherthefederalorstategovernment canrestrictindividualrightsthroughthelaworactionatissue. 2) Undersubstantivedueprocess Thelawmustadvancethepublichealth,safety,morals,orgeneralwelfare.Thelawmustbe tryingtopromotealegitimatestateinterest. Ifthelawdoesnotinfringeonaconstitutionallyprotectedright,thenallthatisleftisforthe meanschosentoachievethelegitimatestateinterestmustberationallyrelatedtothelegitimate stateinterest. Astatutewillbedeclaredunconstitutionalonlyiftheprovisionisclearlyarbitraryand capricious,havingnorelationtothelegitimatestateinterest. HOWEVER,ifthelawinfringesuponanindividualsfundamentalconstitutionalright,thestate mustthenconvincethecourtthatthestatesinterestoutweighstheindividualsfundamental right.Itusuallyhastoshowacompellingstateinterest.Ifthestatecantshowthis,thelaw willbestruckdownasunconstitutional.Ifthestatesinterestoutweighstheindividuals fundamentalright,thenthestatutemustbenarrowlytailoredtoachievethecompellingstate interestwhileinfringingaslittleaspossibleupontheindividualsconstitutionallyprotected right. C) OnitsfaceandAsapplied 1) Facialvaliditydealswithwhetherthestatuteisconstitutionalinanysituation.Thisisbasedon howthestatutewouldoperateinmostcases. InEuclid,thezoningordinancewaschallengedonitsface.Thecourtheldthattheordinance wasconstitutionalonitsfacebecausetherewasalegitimatestateinterestandthezoninglaws wererationallyrelatedtothelegitimatestateinterestandthatnofundamentalindividualrights werebeingviolated.

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2) AsApplieddealswithwhetherthestatute,althoughgenerallyconstitutional,isunconstitutional ifitisappliedtothespecificsituation. InNectowv.CityofCambridge,theCourtconcludedthatthesamezoningordinanceasin Euclid,althoughconstitutionalonitsface,wasunconstitutionalasappliedtothecaseathand. Plaintiffslandwaszonedcommercial,buta100footstripwaszonedresidential.Thecourt foundthattherewasnopracticaluseforthe100footstripandthatthe100footstripwouldnot promotethehealth,safety,welfare,etcofthecity.Thezoningordinancefailedtopromotethe legitimatestateinterest.Azoningregulationcannotbeimposedunlessifbearsasubstantial relationtothepublichealth,safety,morals,orgeneralwelfare.

B.

Eminentdomain,regulatorytakings,andexaction

1.EminentDomaingovforcesyoutosellyourpropertytoit 2. CondemnationtheprocessbywhichEminentDomainisdone,theprocessoftakingyourland,
theymustpayyoumorecommonlyknownasatakingfromthe5thAmendmenttotheConstitution nor shall private property be taken for public use without just compensation from the 5th Amendment,appliestotheFederalGovernment 14thAmendmentextendsthistothestates.

C.

Facts: NewLondonwaseconomicallydepressed Militarybasehadbeenclosed NewLondoncameupwithadevelopmentplanaroundPfizer Certainfolksopposeitbecausesomeofthepropertywouldendupinthehandsofprivatepartiesso argueditwasnotapublicuse Snoearguesthatthisisthekindofthingweexpectgovernmenttodo

Kelov.CityofNewLondon,125S.Ct.2655

SubstantiveDueProcessConstitutionalAnalysis: 1. LegitimateStateInterest? a. Businessdevelopment b. Touristdevelopment c. Qualityoflife/beauty 2. Meansrationallyrelated?

Issue:Doestakingpropertysolelyforeconomicdevelopmentsatisfythepublicuserequirement? USSCsayslegit. Casehistory: 1.WashingtonDCCaseOKtomakeaestheticsmotivatedtakings 2.HawaiiHousingAuthorityv.Midkiffdecisiontooklandfromonepersonandsoldtoothertodiversify ownership,saidiflivinginahouse,OKtobuytheland,endsupworkingthroughthestatebuyingitandthen sellingLSIdiverseOK,Meanstransferlegitmeansoncethestateidentifiesalegitimatestateinterest,wewill OKaslongasitisrationallyrelatedtotheaccomplishmentofthepurpose 3.GMandDetroitMichiganSCsaidOKtocreateagreenbeltbyeminentdomain 4.Kelocausedabigrevolt

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ReasonsLSIs Increasetaxes,jobs,etc.

norshallprivatepropertybetakenforpublicuse,withoutjustcompensation Public use interpreted as a public purposeUSSC is deferential unless the interpretationisabsolutelyridiculous onceyouhaveapublicpurposeinmind,thegovernmentcanuseanynumberof methodsaslongastheyarerationallyrelatedtothelegitimatestateinterest Has the government gone too far? [regulatory takings, called inverse condemnation] mostdoneonanadhocbasis,webalance

D.

C.Takingsmore

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