Property Outline I. Basics/Analytic Issues a. Title: Rights i. Liberty to enter ii. Liberty to use iii. Right of exclusivity iv.

Power to convey inter vivos v. Power to convey upon death vi. Duty to use in a way that avoids nuisance vii. Liability to reasonable govt regulations viii. Liability to govt exercise of the power of eminent domain Private Property: Original Acquisition a. First Possession: Wild Animals i. Power to acquire title to some thing/idea not yet owned (water, minerals, etc.) 1. Pierson v. Post: trespass on the case a. Cause of action, plead that: i. You had a right ii. D had a duty iii. Violation of right iv. You have been injured b. Rule of Capture i. Secure trapping or ii. Mortally wounded/killed c. Instrumental character of law: achieving justice/fairness d. Institutional Setting: rules should be kind that can be confidently administered 2. Laws to regulate hunting: if you kill something without a license, laws violated. Animal can be taken away because it belongs ot the state 3. Rule of PvP applied to oil and gas: didnt own until you tapped into oil/gas, brought it to surface- captured it 4. Commons: when an unlimited number of people have access, incentive is to capture as much as possible/as fast as possible a. Might not be the best idea-drives value down b. Provides incentive for rapid destruction of resources c. Ideas: establish rules among selves to bag/barrel limits, etc. i. Can work if commons used by small number of ppl. ii. At some point, institution needs to accept responsibility of resources 5. Ghen v. Rich (whale possession): not possible to take actual possession of whale when harpooned a. Well established industry custom to return whales when they wash ashore

II.

b. Law had yet to declare Ds action unlawful at time he took whale- ex post facto law c. Well-established custom: shaped the law, value of the custom to the industry and community 6. Keeble v. Hickeringill (shooting gun to scare off fowl of neighbor): D interfered with use of Ps property intentionally a. violent or malicious act done to interfere with another mans livelihood/land, professional occupation- good rule for an efficient economy b. If D was merely engaged in the same business, no cause of action b. Adverse Possession: i. A person who is in actual, open, notorious, continuous, exclusive, uninterrupted, and hostile possession of anothers property for the statute of limitations time period will acquire title to that property by the expiration of the owners cause of action to recover it. ii. Ejectment and S.O.L. 1. Status of Wrongful Possessor: a. Owner and any rightful possessor may bring ejectment action against him b. No person, other than owner or rightful possessor, may bring an action in ejectment against him c. He has ejectment action against any person other than the owner/rightful possessor, who intrudes on his possession 2. Ejectment: a. P in ejectment must show that D is a wrongful possessor AND that P has right to possession 3. SOL a. Cause of action for ejectment arises when D takes wrongful possession and expires when SOL has run iii. Duration 1. AP must continue for entire statute of limitations period, which varies depending on jx. 2. Characteristics: a. Continuous: Cannot be so sporadic as to amount to merely occasional disconnected trespasses, rather than to an actual continuous possession. i. Does not necessarily mean constant- must be behavior appropriate for an average owner of the particular type of property (ex: summer or winter property)

iv.

v.

vi.

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ii. Abandonment: possession is not continuous if occupant abandons property. SOL stops running when possessor leaves without an intent to return b. Uninterrupted: No other person, including the owner, can take possession as against AP during statutory period i. Interruptions by Third Persons 1. SOL will stop for original AP and being for dispossessor (unless someone possesses FROM AP- i.e. rents from him) ii. Interruptions by the Owner 1. Entry: owners retaking of possession interrupts the APs exclusive possession, stops SOL, unless possession by owner is not hostile Can cause original title to end, bring a new bundle of rights into existence 1. Statute of Limitations: bar someone from bringing a cause of action after certain time (20 yrs for AP) 2. Cause of action for: a. Trespass: remedy is money damages b. Ejectment: injunction, order by court to get off property, end possession c. Quiet title: declaratory judgment, settles who owns property 3. Effect to terminate preexisting chain of title and create new chain of title What kinds of actions will invoke running of SOL? 1. Elements (character of possession) a. Actual: physical possession, occupying the property b. Exclusive: not necessarily single person, two or more partners i. Prevents people from claiming AP when other unrelated ppl. are using the property in the same way c. Open and notorious: character of person in possession- openly occupying, not hiding it d. Continuous for statutory period Adverse and under claim of right 1. Adverse: no permission a. Real trespass, actually violating a right claimed by someone else (no permission from owner) 2. Claim of right: a. Good faith possession: based upon a writing that you believe is adequate to convey title b. Intent to exclude 3. adverse claim of right- just means no permission Color of title: modifies requirement of actual possession

viii.

ix.

x. xi. xii. xiii.

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1. Occurs when you have a writing that describes more than grantor had power to convey 2. Dont have to take actual possession of the part you dont have, yours by virtue of writing Lessee of Ewing v. Burnet 1. Issues: what constitutes actual possession? a. Doesnt need to be permanent improvement on land (use for gravel satisfied AP) Carpenter v. Ruperto (put driveway on Ps property): D knew they didnt own land, claiming title by continuous, open and notorious possession and use of land 1. This court said belief had to be in good faith Howard v. Kunto (occupying lots one off deed) 1. Summer occupancy enough to constitute continuous possession Tacking: allowed if there is privity, AP voluntarily conveys to another adverse possessor Adverse possession runs against title: if AP is continuous, runs against title, not person (true owner can sell, AP still runs) Disabilities of owner can prevent SOL from beginning to run 1. Being a minor 2. Being insane 3. Legally incompetent (Alzheimers, etc.) 4. Must have disability at moment AP begins, stops running of SOL until disability is gone 5. Typically statutes toll running of statute til they reach age of majority/ disability removed, then statute runs for either 10 years or remainder of statutory period (whichever is longest) Purpose of AP 1. Purpose of SOL: state claim when evidence is fresh a. Ps lassitude: was his property at one time b. Ds repose: has moved on, invested in lan 2. Reliance interests that possessor developed through long standing possession of property- whose interest is more substantial? 3. Gatekeeper: getting rid of ppl. who dont take care of their land 4. Cleaning up title: has been encumbered by being passed down (mtg, liens, etc.) AP of Chattels 1. Theories: a. Conversion rule: simpler, shorter SOL- more difficult to locate property i. Thief ii. Bona fide purchaser (BFP)

iii. Legal possession but not BFP 2. Songbyrd v. Estate (stealing song recordings) a. W hen true owner asserts their claim- who is in possession? i. When possessor is thief, court says conversion occurs at moment of theft b. SOL: 3 yrs, cant recover after that c. Rule with BFP: conversion occurs when TO demands that BFP returns chattel d. Rule with possessor who didnt pay value but did not steal: conversion occurs when possessor acts in a way that evidences their intent to exclude others-asserting they possess it III. Creation a. Intl News v. AP (stealing news): D not burdened with any part of expense of gathering news, D reaping where P has sown i. Concept of exclusive control: if it makes sense to give someone exclusive control of a resource, then call it a property right ii. Court limits Ds access only for a limited period of time, and in the context of competition iii. Dissent: better resolved by legislature, court has no way of monitoring and regulating news, etc. b. Right of publicity i. Midler v. Ford (impersonating Midlers voice in commercial): 1. Federal Doctrines invoked a. 1st Amendment-freedom of speech and press i. Invoked by Ford ii. This is an important right, but speech not protected if image/voice used merely for commercial purposes b. Copyright laws: dont protect eve a dead-on mimic of voice 2. State Doctrines: a. Unfair competition: D were not in competition with her, Midler didnt do commercials b. Secondary meaning: when ppl. identify something with a certain person i. Affects songwriters if nobody else allowed to sing the song and make $ by licensing to others c. Market Saturation d. Calif. Stat.: another using persons name, voice, signature, photograph, or likeness- Ford didnt attach her name or likeness to it, just voice e. Property in persona: common law, developed out of privacy rights, appropriating your persona for public gain

IV.

3. Tort doctrine dies with the person, move to property rights, stay relevant in life and in death c. Trenton Industries v. A.E. Peterson (high chairs): where is the line drawn for protected innovation? i. Encourage useful arts for benefit of the public- not necessarily to honor peoples/inventors ideas ii. Nothing unique about placing legs underneath instead of on the side 1. Being insane 2. Conversion rule: simpler, shorter SOL- more difficult to locate property a. Thief b. Bona fide purchaser (BFP) c. Legal possession but not BFP Owner Sovereignty and its Limits a. Exceptions to the Right to Exclude i. Necessity and custom 1. Ploof v. Putnam (boat in storm): duty on owner to tolerate invasion a. Rules for allocating responsibility for damages from necessity: i. Fault-none ii. Benefit- person who benefits pays damages iii. Economic efficiency- allocating to person who is in best position to repair on the least cost 2. McConico v. Singleton (hunting): doctrine of custom- unfenced, private land regarded as common in forest a. Evidence of custom: D raising affirmative defense i. No case had ever come up, never been a problem b. Rule: custom can be a limit on right to exclusive control i. Custom allowing access to unimproved/unenclosed property with respect to hunting c. Legislative Act: evidence that there is an awareness of a certain kind of habit d. Common practice of ppl. in state to hunt and provide for themselves on unimproved land 3. Three facts in deciding custom: a. Judicial decisions b. Common practices c. Legislative acts 4. Easement: limited right of non-owner to use land a. Voluntary conveyance OR by prescription- essentially doctrine of AP in limited instances 5. Public Easement: similar to custom, burden particular lands on basis of a history of use by public ii. Public Accommodation

1. Private property can be open to public- stores, movie theaters, golf courses, etc. 2. Subject to two restrictions: a. Cannot exclude arbitrarily b. Have to charge reasonable rates for their services 3. Uston v. Resorts Hotel (card-counting): absent valid contrary rule by commission, P allowed to play blackjack a. Govt not justified in interfering in market unless theres a flaw in the market-monopoly, fraud, etc. b. Other Powers of the Sovereign Owner i. Licenses 1. Waiver: owner waives right, person for whom right to exclude is waived is licensee a. Owner can revoke at any time, then licensee can be sued for trespass b. Property doctrine, complicated when licensee has to pay for privilege, license turns into K, cant revoke without good reason i. Problematic when: 1. No explicit terms, court has to impute meaning a. If cause, then no return of fee (liquidated damages) b. Policy matter: if owner of venue has sold out, ppl. who wanted to go turned away, owner has lost money 2. If terms explicit but not disclosed til payment (ProCD) 2. Hurst v. Picture Theatres: does a ticket make a waiver irrevocable? a. Ticket represents a contract: license comes with it i. Irrevocable for a period of time- akin to an option K ii. No explicit terms on ticket, court figures out what terms should reasonably be iii. Cant revoke K except for cause, otherwise you must refund money ii. Transfer/Conveyance 1. Lauderbaugh v. Williams (members of Lake Assn) a. Usually property owners have pages of covenants saying everyone must become a member of a neighborhood association b. Restraint on alienation: covenant restrained ppl. from selling lots until they had permission from neighborhood assn c. Taxonomy of restraints on alienation: i. Promissory: allowed if reasonable

ii. Disabling: not allowed iii. Forfeiture: allowed if reasonable d. Modern Distinction i. Partial: allowed if reasonable ii. Absolute: not allowed e. Covenants need to set out guidelines for selecting new members based on objective criteria, or simply say no conveyance will be disapproved without good reason f. Conveyance is not a K, can transfer title without any consideration (gift), but typically made in context of K c. Ks for Sale i. Contingent sales agreement- residential, industrial property 1. Seller agrees to convey land, buyer agrees to pay 2. Executory K 3. Contingencies satisfied: a. Condition of title- clouds, chains, etc., no outstanding liens, mortgages, etc. b. Condition of property- inspector c. Financing- loans, lending approval 4. Purchaser has obligation to try to satisfy conditions- refusal to close must be based on something substantial- then get $ back 5. Title conveyed by grant, transfer, conveyance d. Option i. Owner-offer purchaser 1. Owner promises purchaser to keep open 2. Purchaser gives money to owner for that promise ii. Common in commercial context, not residential e. Right of First Refusal- clouds on a title i. No agreement to buy or sell ii. Promise to make offer to potential buyer IF owner ever decides to sell, has to make offer to that buyer before anyone else 1. No actual agreement of sale- P gives O $ for it 2. Can agree the purchase price will be fair market value at time they decide to sell a. Set how FMV will be decided 3. Have owner put property on market, get offers, then turn around and offer to person with right of first refusal- possible way to do it but not recommended iii. Common in neighborhood assn and condo assns and between owners of a business and vacation properties f. Land Contract

V.

i. Come up when not much market for the property, and only interested party cant get a loan ii. Generally, treat as if a 30 yr. loan, but after two years theres a balloon, building equity so when they go to the bank in a better position to get a loan iii. Owner does not convey deed until entire amount paid off, essential purchaser is renting the property iv. Closing occurs when P pays ENTIRE purchase price v. If purchaser fails to make payment, then O says K is void and keeps title vi. Owner stepping into the place of the bank g. Mechanics i. Chattel: 1. Delivery a. Possibly registration of title (cars, corp. stock) b. If intangible- in writing ii. Land 1. Deed that satisfies SOF a. IDs property, grantor, and grantee b. Signed c. Witnessed d. Notorized e. Interest f. Delivered iii. Irons v. Smallpiece (colts-gift) 1. Importance of delivery of gift- no evidence of gift, need delivery or some writing, deed, transfer of possession for chattel iv. Foster (passbook and note from wife) 1. Wife did not personally deliver chattel to husband, so had to be passed through executor of will The Forms of Ownership a. Divisions by time i. Estates in land 1. Fee simple absolute: entire bundle in one person for an indefinite duration a. Three ways to split: i. Temporally- present and future interests ii. Concurrently- split among multiple owners iii. Trusts b. All duties, liabilities, etc. held by one person, if owner has FSA at death, title remains in estate c. to A and his heirs- simply means conveying FSA i. To A- language of purchase- IDs grantee

ii. And his heirs- language of limitation- IDs estate, does not create interest 2. Present and future interest a. Life estate i. to A for life ii. Has to be conveyed to someone with measurable life (i.e. not a corporation) iii. Who gets possession when grantee dies? 1. Goes back to original owner if no other heir specified iv. Reversion (in grantor)- default, presumed in life estate when future interest not identified v. pour autre vie- for anothers life 1. Usually to A for life, but could say to A, so long as B lives- changes measuring life to B instead of A vi. Remainder in third party- gives to someone else on death of grantee 1. to A for life, then to B b. Variations on Life Estates i. Term of years: present interest with definite duration, measured by passage of time specified by grantor 1. to A for 10 years ii. Fee tail: life estate followed by perpetual chain of life estates- dynastic in nature 1. to A for life, then to As oldest son, then to his oldest son.. 3. Defeasible Estates a. Fee simple determinable: present possessory interest, ends when some identified contingency occurs, then right of possession remains with grantor i. to A so long as ii. to A until A uses property for a bar iii. to city of MKE so long as it is used for education b. Future interest: possibility of reverter i. If reverted, grantor can use self-help to eject person from property, grantee can acquire title through AP if grantor doesnt do anything about it for certain # of years (SOL) c. Fee simple on condition subsequent: if contingency occurs, gives grantor a power of termination, but they dont have to terminate it

i. Language of condition- to A, but if A should ever marry, O may terminate ii. Terminate by kicking of f property or bringing an action to quiet title iii. Terminate only if grantor exercises power d. Fee simple subject to executory interest: language of duration OR language of condition subsequent i. Created in third party- automatically terminates interest 1. to A, but if A ever uses for something other than school, then to B ii. Grantor creates FS on condition subsequent, future interest retained by grantor, then turn around and convey to third party Third Party Interest Remainder or executory interest? Is there a possibility of possession on expiration of prior estate? If no= executory interest Yes=Remainder

Contingent or Vested? Subject to open? If no, vested 1. IDd grantee? If no=contingent 2. Condition precedent? If yes, contingent

b. Mediating Conflicts Over time i. Waste 1. Conflicts arise when life tenant cant afford or doesnt want to spend money on keeping up property, or 2. They do care about property, but want to change property to make it useful to them, in a way different than desired by holders of future interest 3. Waste doctrine imposes a duty on life tenants to keep property the way it was given to them 4. Types of Waste a. Affirmative waste (misfeasance): life tenant intentionally alters property in extraordinary way i. Cutting down trees, ec. b. Permissive waste (nonfeasance): life tenant fails to properly maintain property i. Not repairing roof or leaky plumbing, etc.

c. Ameliorative waste: intentionally altering property- but doing so in a way that improves the value i. Brokaw v. Fairchild: analogizing life estate to a lease 1. Give choice to ppl. holding remainder: allow ameliorative waste, pay life tenant for property, or combine with life tenant and sell FSA (some courts allow) 5. Cures a. Grantor clearly provides direction b. Parties negotiate accommodation c. Court gives effect to grantors intention- more sensitive to relationship of parties ii. Restraints on Alienation 1. Defeasible estates 2. Generally law disfavors grantors retaining right of alienation 3. Absolute restraints=invalid 4. Partial=valid if reasonable iii. Rule Against Perpetuities 1. JC GRAY: NO INTEREST IS GOOD UNLESS IT MUST VEST, OR FAIL, NOT LATER THAN 21 YEARS AFTER SOME LIFE IN BEING AT THE CREATION OF THE INTEREST 2. Types of Estates (subject to RAP in bold) a. Life estate i. Reversion ii. Remainder b. Defeasible F.S. i. Possibility of reverter ii. Possibility of reentry/termination iii. Executory interest 3. Applies to uncertainties a. Cant ID grantee b. Possibility of a contingency occurring too far in future 4. Idea that you dont want someone with no interest in the property controlling it too far into future a. If we cant ID grantees, cant merge interests back into fee simple absolute, property wont be marketable 5. 2 Purposes: a. Restrict dead hand control- testator trying to control descent of property too far into future b. Splintering of title that results from future interests 6. Only applies to contingent remainders, executor interests, and vested remainders subject to open

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8. 9.

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a. Will be destroyed only if they violate RAP b. If possible that condition precedent might still occur after RAP period, then interest is destroyed Test at the moment created- doesnt matter when challenge occurs a. Even if, when challenged, we already know whether condition occurred, grantees IDed or not, still destroyed b. When is the moment of creation? i. Inter vivos- when all conditions of SOF satisfied and deed delivered ii. Will- interests created at moment testator dies If grant destroyed by RAP, say that grant fails Modern Revisions to RAP a. wait and see approach: dont test vulnerable interests at time of grant, wait to see if uncertainties are resolved within perp. Period, then destroy i. Wait perp. Period or 90 years b. Cy Pres: court reformation of grant Wisconsin Rule (Wis. Stat. 700.16) a. Future interest is void if it suspends the power of alienation for longer than lives in being plus 30 years i. Power of alienation suspended when there are no persons in being who can convey an absolute fee in possession of land (i.e. cant ID all grantees, so FSA cant be conveyed, grantees cant be joined) ii. WI only concerned with marketability, not dead hand control Can prevent grant from being destroyed by RAP with inclusion of a savings clause a. all interests created by this instrument are to vest indefeasibly in person IDd at death of all lives in being plus 21 years= forces courts to wait and see, will then have to reform in accordance with savings clause

VI.

Co-Ownership a. Concurrent Estates i. Tenancy in common 1. to A & B- tenants in common will be default assumption with this language 2. Undivided: each tenant in common has liberty and right to use entire parcel a. Can waive right to whole parcel through a contract 3. Proportional: right to proceeds when sold, can have disproportionate interest

4. Independent: only to profits and proceeds, obligations for costsmortgage, insurance, etc. a. Each person can convey their interest away without permission of other tenant in common- right of first refusal, can also restrict with K 5. Can be between unrelated people, real estate developer- limits personal liability, condominiums a. Can have in cars, computers, land, etc. ii. Joint Tenancy 1. to A and B, as joint tenants, with right of survivorship a. When one joint tenant dies, other person gets FSA i. Or 1/3 j.t. becomes j.t., etc. b. Kind of like each j.t. has life estate and remainder given to j.t. who survives 2. Four Unities a. Time-all interests created at same moment b. Title- all created in same document c. Interest- joint tenants must be sharing exact same estate (life, F.S., etc.) d. Possession- like tenant in common, undivided interest in property (unless waived) 3. Transferability: joint tenants can convey interest freely to someone else, BUT it destroys joint tenancy and destroys right of survivorship a. Can sever j.t. by conveying interest to oneself iii. Tenancy in the Entirety 1. to A and B, a married couple, as tenants in entirety with rights of survivorship 2. Four unities PLUS marriage 3. Not independent, no conveyance of an interest without permission a. Conveyance or divorce will sever and destroy right of survivorship, automatically become tenants in common with divorce iv. Tenancy in Partnership 1. Prior to UPA (Uniform Partnership Act), regarded as tenants in common, with all incidents including undivided interest in whole, could use for own agenda 2. UPA adopted entity theory of partnership- pship treated as entity distinct from partners, no longer tenancy in common, property committed to pship purposes only v. By representation or per stirpes- grandchildren get equal share of portion granted to child, if child predeceases parent b. Right of Partition

i. All tenants entitled to occupancy of entire property, but obviously not realistic ii. Law wants to give parties maximum freedom to order relationships however they choose iii. Concurrent tenants can arrange limited freedom through contract law iv. Remedy for disputes: absolute right to partition unilaterally without cause v. Partition: division of property among tenants 1. Partition in kind: dividing property into parts according to proportional interests of tenants- give parts to tenants as FSA 2. Partition in sale: conveying entire FSA to a third party, dividing proceeds from sale among tenants according to proportional interests 3. Courts prefer partition in kind unless: a. Physical attributes make p. in kind impracticable/inequitablezoning doesnt allow, irregular landscape, etc., OR b. Interests of owners would better be promoted by sale- fair market value of whole parcel > sum of reasonable sale prices of each divided parcel vi. Delfion v. Vealencis: 1. Issue: whether or not owners interests better served by sale a. Market value alone should determine- clearly P wants to subdivide- evidence in itself that property as a whole is not worth more than property in its parts- therefore 2nd condition not met vii. Gillmor v. Gillmor(ouster): 1. Two T in C wanted to use land for grazing, one got there first and exhausted capacity of land 2. When is right violated and what is the remedy? a. Co-tenant may sue for his share of rents and profits if he has been ousted from possession b. Not enough that tenant using property exclusively, ouster occurs when one tenant excludes/prevents another tenant from using property in a way he has a right to use it i. Act of exclusion or use of such a nature that necessarily prevents another cotenant from exercising his rights c. D already took up sustainable carrying capacity of land for cow grazing d. Measure of damages: fair market value of interest P was denied, i.e. money not gained because cows couldnt graze 3. Imagine: A and B are in T in C with grazing land. B rents out to C Bs grazing right. B specific about how much cattle C can bring on, in line with As grazing interests a. Q: Does lease violate As interests? b. A: No. Interests independent=transferrable

4. If one cotenant makes improvements for own benefits, others not required to contribute generally a. Only required to contribute to common debt: property taxes, necessary repairs, and maintenance b. Person who made improvements entitled to greater share of proceeds if property sold in proportion with amount improvements raided FMV of property c. Severance i. Severance of j.t. by mortgage 1. Right of survivorship: exists in joint tenancy a. Destroyed when one j.t. conveys his interest to another party 2. Mortgage as title v. mortgage as lien only 3. Two Ways to Finance Real Estate: a. Equity investment- money that investors already have i. Entitled to share of profits/also bear losses b. Debt- borrow money from someone else i. Lender had promise to have money repaid and interest, doesnt bear losses ii. Documented by promissory note- K iii. If debtor defaults, lender can sue on K, debtor may be insolvent iv. Mortgages support debt- interest in title of mortgage grantor, security interest, not a K 1. If debtor defaults, creditor can sell property and use proceeds to pay down debt 2. If doesnt cover debt, deficiency- mortgagor can still sue on promissory note 4. Harms v. Sprague: a. When one cotenant grants mtg., only on that tenants interest, not the property b. Mortgage as a lien theory: regard mortgage as NOT granting title, doesnt sever j.t. i. Not many states still follow title theory of mortgages d. Joint Bank Accounts i. Two distinct relationships: 1. Bank-account holders 2. Between people on the account ii. Law allows bank to treat all named people on account as joint tenants- each person has right to withdraw entire amount of money at once 1. Upon death, other account holders entitled to whole account 2. Bank doesnt want liability of keeping track of who can withdraw what amount of $

VII.

iii. Among depositors, law willing to give force to intentions of those who put $ in account iv. Four possible intentions of depositors: 1. To create thorough j.t.- right of survivorship and right to withdraw whole amount (spouses) 2. To treat deposit as will substitute only- just right of survivorship (elderly parent- children added to account) 3. Convenience account- not intending either right of survivorship or personal interest in money at all 4. Combo of 2 and 3- parent adds child to account as will substitute, also ability to write checks, etc. for depositer while alive v. Problems arise between depositors: law puts burden of proof on person saying they are NOT a j.t. vi. Joint tenancy- default assumption vii. Moeity: equal interest/share 1. If some j.t. withdraws more than his moiety, must return to the account 2. Intention of depositor will govern viii. Issues of severance will only come up when depositor intended a right of survivorship Entity Ownership: Possessory Rights: Leases a. Landlord/tenant evolution of law of leases i. Early common law 1. Lease is a distinct estate, less than freehold, leasehold and right of reversion in owner 2. Covenants are independent of each other a. Landlord promise not to interfere with tenants quiet enjoyment b. Tenant promises to pay rent c. EXCEPTION: duty to pay rent is dependent on landlords covenant of quit enjoyment ii. Blackett v. Olanoff- stretches doctrine of quiet enjoyment, extended to include acts of third parties- landlord leased building next door to bar playing loud music iii. Modern Era 1. Transition to contract a. Phase One: stretching old rules/concepts i. Doctrine of constructive eviction ii. Doctrine of surrender- abrogated doctrine, imposed obligation to mitigate damages b. Types of Leases i. Term of years: definite term. Lease cannot be enforced beyond one year unless in writing (SOF)

ii. Periodic Tenancy: automatic renewal 1. Term is one year, but automatically renews from year to year 2. Only ends when one person elects to terminate x amount of days before term ends iii. Tenancy at will: can be terminated at any time by either party 1. Still typically period of days (usually 30) to give reasonable notice 2. Default assumption if other kind of tenancy not apparent iv. Tenancy at sufferance: lease comes to an end, but tenant doesnt leave 1. Landlord suffering tenants continuous presence 2. Dont refer to as trespass because landlord can retain benefit of any previous bargain, continues obligation to pay rent or landlord can use self-help c. Model of Dependent Covenants i. Medico-Dental v. Horton (drug stores) 1. Lease did not explicitly say that Ps obligation not to rent to competing pharmacy was dependent of Ds duty to rent, but courts still recognizing them as such when it makes sense to do so- D would not have signed lease without the covenant 2. Covenants must appear in lease, courts wont imply covenants ii. Implied Warranty of Habitability 1. Court will relieve tenant of duty to pay rent when property is uninhabitable a. Operates in absence of any explicit covenant b. Court will enforce implied provision even if landlord demands that tenants waive covenant of habitability c. Goes beyond K doctrine, looks at building codes as cause of action for tenant d. Tenant can stay on premises, but doesnt have to pay rent 2. Might be unfair to put burden of poverty on landlord 3. Building codes are standard for when a property is uninhabitable a. Implied warranty comes from court deciding to bring consumer protection of K law into lease b. Building codes also tool for tenants to use to sue landlord d. Transfer of Interests i. Landlord always retains fee interest, lease represents K ii. Landlord can still sell interest at any time, but default is that lease doesnt terminate with conveyance of interest (unless it specifies otherwise) iii. Imagine: landlord is famous violinist, lease includes promise to give tenant lessons 1. Only will allow covenants to run with lease if they touch and concern the land 2. If landlord conveys interest, wouldnt own tenant lessons anymore

VIII.

3. Does covenant concern tenants beneficial use of land? iv. Mullendore (covenant to return security deposit): original lease contained standard clause for security deposit return 1. Court held provision didnt touch or concern land 2. Shows how strictly courts enforce requirement that covenant touches and concerns land a. Must be careful in strict jx. To make sure you are explicit about landlords obligation to return security deposit v. Transfer of tenants interest in lease 1. Sublease v. assignment a. Sublease: original tenant enters into new lease with sublesee i. LL looks to first tenant for payment of rent, T1 acts as a LL to T2 b. Assignment: T1 assigning all rights under original lease to assignee/T2 i. Not distinct lease, assumption of all responsibilities of original tenant ii. Privity remains between LL and T1 unless LL releases T1 and accepts T2 1. If no release, LL can look to T1 for satisfaction of any part of lease iii. Novation: erases privity of K, LL can negotiate higher rent, etc., puts prime tenant off hook all together 2. Jaber v. Miller: how do you tell the difference between a sublease and assignment? a. Common law: transfer is sublease if transferor retains any possibility of reversion (even one hour) b. Court here gets rid of that, focuses on K law and says intention of parties should govern i. Look at entire arrangement: more features of sublease or assignment? c. Any well-drafted lease will prohibit sublease/assignment without consent of the landlord i. Common law: gave LL absolute authority to refuse sublease/assignment for ANY reason at all ii. Now, more focused on K, good faith/fair dealing inherent, LLs can only refuse for good reason Security Interests a. Mortgages i. Secure payment of a debt ii. Gives creditor right to compel sale of property

1. If proceeds of sale are insufficient, mortgagee can still sue for deficiency under promissory note iii. Mortgage not personal to debtor, stays with land, but promissory note stays with debtor- even if new buyer not assuming debt of previous owner b. Rights of mortgagee/creditor i. Depends on jx.: 1. Strict foreclosure: remedy for debt not being paid, mortgagee keeps title, becomes owner a. Harsh result for debtor b. Value of land could be hugely in excess of debt, could default even if debtor simply cant find creditor 2. Courts developed equity of redemption- debtor would have period of time to pay off loan following a default a. Was at first unlimited period of time, creditor needed some assurance that they could use property, made their title unmarketable i. Developed fixed period of time- foreclosing possibility of redemption by debtor b. If value of property still exceeds debt, debtor still losing moneycured by abolishing strict foreclosure, dont let creditor keep title to property (all but 2 jx) i. Replaced by judicial foreclosure- sets equity of redemption running, if not paid, goes to sheriff sale ii. Sheriffs sale: least effective way to assure you receive fair market value for the property 1. Protection at sale: if bid so low that it shocks the conscience of the court c. Banks have adopted anti-deficiency legislation/statutes- forbid creditor from collecting deficiency unless they have bid fair market value, unless value of property has fallen well below amount of debt i. WI doesnt have but Wis. Stat. 856 prohibits courts from entering judgment unless it decides price was fair ii. Power of Sale 1. Not all jx. allow these, in states that do, frequently prohibit creditors from suing for deficiency 2. Gives creditor power to sell without filing any action in court (trust agreement) 3. Debtor will convey title to third party with power to sell in trustee if ever a default 4. Problem: person conducting sale tends to have interest in sale (trustee usually agent of creditor)- could encourage bad faith/negligence

5. Murphy v. Financial: a. Court held trustee owes duty to debtor, even in trust, to behave in reasonable manner to maximize proceeds of sale for benefit of debtor b. What constitutes care? How far does a trustee have to go? i. Ordinary methods of making buyers aware that are used when an owner voluntarily sells land (advertising, etc.) c. What is a court required to do if trustee violated fiduciary obligations? i. Order new sale, assess damages to trustee ii. If result of negligence: amount of damages less than fair market value, based on fair return had trustee properly advertised property iii. If result of intentional bad faith: base damages on FMV (difference between what came in and FMV of property) 6. Land Ks a. Meant to avoid debtor protections b. Should buyer default, seller has option to either declare entire amount due OR to declare K at an end, seller keeps past payments as liquidated damages (like rent payments) c. Forfeiture provision in land K clever substitute for strict foreclosure that otherwise has been declared invalid i. Courts will be skeptical of these, subject land Ks to exact same statutory protections as any other mortgage, including judicial foreclosure c. Priorities in mortgages i. First in time= first in right ii. Earlier mortgages will be senior to later ones, later ones called junior mortgages iii. Consequences of priorities: 1. If all debts default simultaneously and all mortgages in foreclosure together: a. Rights to proceeds of sale: senior mortgage gets paid completely before anyone junior to them gets a penny i. Puts practical limits on number of mortgages attached 2. If not all mortgages go into default at same time: a. Purchaser takes title in condition it was in at time foreclosed mortgage was granted b. If senior mortgage goes into default, junior mortgages destroyed, but senior mtgs. Survive if juniors go into default

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iv. Most mortgages list extra instances of default: failure to pay insurance, taxes, failure to maintain property v. Even without mtg., sheriff can order property seized, judgment debt 1. Who gets paid out of sale of assets? a. Take in proportion to relative debts, priorities only exist among secured creditors to the same asset Title Records and the Transfer of Property a. Assuring title (Four methods): i. Contingency in conditional sales agreement ii. Title insurance iii. Warranty deed iv. Recording office and statutes b. Contingency of marketable title i. Deliver marketable title 1. If buyer doesnt pursue contingencies, lose money 2. If pursued and not satisfied, dont lose earnest money 3. Seller must have power to convey 4. Marketable title: what reasonable, prudential buyer will accept because no clouds that threaten title: liens, mortgages, license penders, easements 5. Demonstrated by abstract of title delivered with binder for insurancejust an account of chain of title of property and all interest generated from beginning a. Some liens wont show up on abstract-construction lien, mechanics lien c. Title insurance i. Am. Land Title Assn (ALTA) ii. Company itself generates abstract and gives insurance iii. Coverage usually pretty narrow: covers defects that dont show up on record, mistakes by insurance, cannot be easily seen by property iv. Up in the air among jx whether or not insurance co. can be liable for negligence in searching for encumbrances on title 1. Growing trend to hold liable for negligence- even if insurance disclaims liability v. Perfecting lien- put on books (usually have six months to record it) 1. Include in contingent sales agreement promise that work has not been done in last year, which might give rise to these types of liens vi. Estoppels letter- signed by past creditor saying debt has been satisfied 1. Liens can be foreclosed on, like mtg. d. Warranty Deed i. Instrument used to convey title

ii. All promises in contingent sales agreement disappear when deed is handed over- they merge with deed- dont get carried over unless incorporated into deed iii. Warranties 1. Grantor has title (present covenant) 2. Power to convey (present) 3. No encumbrances (present) a. If violated, SOF starts running immediately as soon as deed is delivered 4. Grantor will defend grantee from claims against title (future) 5. Grantee will enjoy quiet enjoyment (Future) 6. Grantor will provide for assurances (future) e. Recording statutes (Wis. Stat. 59.50) i. To compile abstract: 1. Grantees backwards in time to root 2. Grantor index root forward 3. Look at every document in chain of title a. Lease options, easements, etc. ii. Recording statutes protect some subsequent purchasers by destroying earlier conveyance if subsequent purchaser satisfies conditions iii. Types of Statute: 1. Pure race: subsequent purchaser must: a. Pay value b. Record first 2. Pure notice (compromises integrity of recording system) a. Pay value b. Take without notice of earlier purchase i. No actual or constructive notice- record/inquiry ii. Holding ppl. to what they wouldve discovered by due diligence 3. Race notice (WI) a. Pay value b. Without notice c. Record first iv. Tract index: tracts do not necessarily mean each legally defined lot in county 1. Meets and bounds description: convey portion of land as separate legally identifiable piece of land 2. File subsequent plat- map that shows location of lot lines, roads, easements, convey title by reference to number assigned to each plat 3. In WI, counties only required to maintain tract indexes if they began recording in that way a. Title insurance cos maintain their own tract indexes

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v. Purposes of recording statute: 1. Creates public archive, always public archive to settle land disputes 2. Ability to compile abstracts of title to property 3. Protect some purchasers against some classes of earlier purchases vi. Mortgages 1. New buyer destroys mortgage if satisfy recording statute 2. Subsequent mortgages: reverses priorities a. Ex: if O gives B1 a mortgage (not recorded), then gives B2 a mortgage (recorded), B2s mtg gets higher priority- bank of B2 gets money before bank of B1 vii. Shelter Rule: 1. In situation where B prevails over A, if B subsequently conveys property to C, C will be sheltered even if C cant satisfy conditions to prevail over A a. Not to protect C, but to protect B, who should have full ownership benefits of prevailing over A, should be allowed to convey to whomever they want b. When subsequent grantee is original owner, shelter rule does not work! viii. Wrinkles: 1. Adverse possession: not subject to recording statute a. Mugaas: O could no longer convey strip that had been adversely possessed to another, even though AP had stopped using strip 2. Wild Deeds: not yet recorded AND not legitimate deed to convey, person relying on recording statute to acquire ix. Marketable Title Statutes: 1. Take up back to RAP discussion 2. Can destroy future interest in grantor 3. Typically destroy interests in land over 30 years unless there has been notice of existence within chain of title within last 30 years a. Not always limited because of savings clauses 4. Root of title: most recent conveyance of title before 30 years from present date a. In some marketable title statutes, go back to that title, makes more complicated b. WI= just 30 years The Law of Neighbors a. Nuisance i. Not the best way to deal with land disputes 1. Zoning ordinances, legislature better equipped to prevent/avoid these conflicts

ii. Limited to unreasonable use of land 1. Right of exclusive possession 2. Duty to make reasonable use of land so as not to cause harm to others a. Right holders: i. Public- class of people who have standing to bring public nuisance claim limited 1. Ppl. who officially represent public interests (govt officials or body) 2. Neighbors/landowners (could otherwise bring private claim). Significance= expands remedies iii. Private nuisance: unreasonable interference with quiet enjoyment of land 1. Must be substantial interference to be actionable 2. Trespass: physical intrustion- violation of right of exclusive possession. Even nominal infraction actionable a. Adams: matters whether it is called trespass or nuisance, have to prove less harm if you call it a trespass iv. Substantial Harm 1. Noise, fumes, dust, smells, vibrations, etc.- all pretty obvious harms 2. Some things regarded as offensive by nature (especially in residential neighborhoods) a. Brothels, funeral homes, cemeteries, etc. b. Usually taken care of by zoning laws, but not always, even with zoning laws nuisance claim still available 3. Some artistic expressions can be called nuisances if so out of character in neighborhood, but rare a. Per accidens: offensive to ordinary sensibilities and character of neighborhood, appropriateness of activity (right thing in wrong place) v. Per se unreasonable uses 1. Unlawful- illegal a. Doesnt commit simply by violating statute, also has to cause harm 2. Ultra-hazardous activities a. Keeping wild/vicious animals on your property b. Blasting explosives c. Comparable to products liability in torts vi. Spur Industries (feed lot) 1. D developing subdivision by feed lot in area dedicated to agriculture 2. What are established uses of area? 3. Judicial takings of property a. Most courts have adopted statutes to preclude courts from adopting this doctrine

vii. Remedies 1. Damages for past 2. Injunction to enjoin future use a. Although, see Boomer: consider value of activity to community viii. Smelting v. Tipping (P buying a house in area with industry- noxious gases) 1. Owner can convey property with cause of action a. Protects Os ability to sell property- can convey property with cause of action ix. Latches: common law doctrine for when people have sat on their rights too long 1. Nuisance can turn into custom, characterize an area over a period of time x. Nuisance law- not the best way to deal with land disputes- zoning ordinances, legislature better equipped to prevent/avoid these conflicts xi. Public benefit of nuisance: courts dont engage in balancing act 1. Scholars engage in this 2. Courts only look at unreasonable conduct and substantial harm xii. Once nuisance has been found, courts actually look at public balance to determine remedies 1. Boomer: injunction wouldve effected economy- many employees at plant, investment in community, so cement plant instead paid permanent damages to P b. Easements i. Roads, RRs, etc. ii. Affirmative: permits someone other than owner to enter/use land iii. Negative: restrict what an owner can do with his own property (largely not permitted) 1. Real covenants and equitable servitudes can be substitute for unavailability of negative easements iv. Similar to licenses, but licenses are waivers and can be revoked v. Interest in land 1. Subject to SOF, recording statutes, and marketable title statutes 2. Created by grant, not revocable, can only be created by document that satisfies SOF a. deed or grant of easement b. If permission, no adversity, so cant acquire by prescription 3. Can be destroyed if not recorded under same rules as normal rec. stats. 4. Mark. Title stat: can be destroyed if not recorded of possessed within last 30 years or refreshed vi. Profit a pronda: right to take profits of land (water, etc.) vii. Servient Estate: title burdened by easement viii. Dominant Estate: title benefited by easement 1. Easements can run with title, continue to bind successors

ix. Appurtenant easement- given by grantor to benefit grantee and any subsequent owner that title (Benefits land) x. Easement in gross: personal easement (RR tracks, utilities) given to personally benefit someone, not necessarily landowner (cant be conveyed) xi. Methods of Creation 1. By grant or deed (SOF) 2. Necessity: owner divides parcel and conveys to someone else a landlocked parcel a. Conditions: i. Unity of title- at one point property was unified ii. Severance of dominant estate by owner iii. Conveyance by owner of dominant estate to grantee iv. Dominant estate landlocked 3. Implication: grantor divides unified parcel- already established, visible, obvious use of what will be servient estate, reasonably necessary for beneficial enjoyment of dominant estate 4. Prescriptive: similar to AP, open, notorious, continuous and adverse for 5 years/stat. period 5. Estoppel: investment in reliance a. Two common scenarios: i. Grantor intended to create easement but blew it (orally instead of writing) ii. Only intends to give license, but can become easement if owner of servient estate always other to make improvements to use that license b. Right has arisen in grantee, can continue to use easement, ONLY as long as necessary to enjoy return on investment xii. Termination 1. Conveyance/formally- most obvious way 2. Merger- dominant and servient estate become owned by same person 3. AP- if owner of servient estate chronically interferes with dominant estates use of easement, can re-acquire through AP (dep. on jx.s SOF) 4. Prolonged non-use/abandonment: under circumstances that suggest an intention by owner of easement to abandon it permanently a. Ex: govt puts in new road, B starts using that instead, could infer that B was abandoning use of As easement xiii. Scope 1. Describe with precision in grant exactly how extensive physical use of property is 2. Default: Rule of Reason- decide reasonable intent of parties 3. Cannot expand: spatial of # of uses c. Real Covenants

i. Substitute for negative easements 1. Promise by someone regarding the use of their land 2. Ks, not interests in land** ii. Two types: 1. Negative: owner of servient estate promises not to use the land in a certain way 2. Positive: owner of servient estate promises to do something for the benefit of another a. Ex: maintain row of hedges on property line b. Ex: combined with affirmative easement, sidewalks in front of ppls property, person must tolerate ppl. walking (easement) AND maintain it (covenant) iii. Conditions for Running of Covenant (poss. For burden to run but not benefit, vice/versa) No requirement of notice in either of the following (rec. stats. Can destroy though) 1. Burden on servient estate a. Intent to run with title to servient estate b. Horizontal privity (grantor/grantee)- only time covenant can appear is in a deed c. Vertical privity: relationship between person who made promise and his successor for whole duration of conveyance interest d. Touches and concerns land 2. Benefit to dominant estate a. Intent of benefit to run with title to dominant estate b. Horizontal privity: did covenant arise in context of grantor/grantee relationship? c. Vertical privity (only difference): voluntarily conveyed to successor, but dont worry about duration d. Touches and concerns land d. Equitable Servitudes i. Equitable alternative to common law real covenant ii. Available when common law remedy is inadequate iii. Conditions: 1. Burden a. Intent b. Notice c. Touches and concerns land 2. Benefit a. Intent b. Touch and concerns land 3. Notice: a. Actual

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b. Constructive i. Record ii. Inquiry 1. Common plan a. Covenant must attach (despite failure to include in deed) b. Implied reciprocal covenant c. Notice from pattern of development, single kind of use d. When grantor begins subdividing, covenant if intended attaches to all parcels not yet sold/granted iv. Termination 1. Voluntary release: served by beneficiaries a. Everyone must release you from covenant, can be very hard to do i. Ex: if doctor wants to see patients at his house, everyone in neighborhood must release ii. Neighborhood assns might fix by using majority vote 2. Court ordered release (action to quiet title) a. Changed conditions: make it unreasonable to continue using in a certain way b. Abandonment: habitual and substantial c. Estoppel by beneficiary: actual expression d. Laches: fails to enforce covenant, slept on rights i. Requires beneficiary to enforce covenant promptly Government Regulation of Land Use a. Amd. V: [Nor] shall private property be taken for public use without just compensation i. Incorporated into Amd. XIV Due Process Clause ii. Similar clause in const. of almost every states 1. Possible that states may have even greater rights to take property than Federal govt b. Issues: i. Eminent Domain: power of govt to take private property 1. Just compensation: a. Fair market value of whatever is taken b. Fair rental value c. Typically, govt tries to buy property without courts involvement: if not successful, take to court for eminent domain 2. Public Use: most controversial, what constitutes a public use?

a. Becomes problem when govt delegates responsibility to private entity or takes and sells to another private party for same use as was used before b. Co-extensive with public purpose: ct. will defer to legislature to determine what is in best interest of community, defer to citys police power c. Berman 3. Kelo: public use=public purpose 4. Power to Regulate the Use of Land a. Federal i. Exclusive power to regulate Fed. Land 1. Also regulate private use of private land that borders fed land 2. Up to Congress to decide ii. Commerce Power 1. Clean Air and Water Acts b. State i. Most pervasive land use regulations come from local level- municipalitys police power ii. Only have power that state legislature delegates to local bodies (enabling statutes) iii. Police power: health, safety, general welfare iv. Limits: 1. Reg. has to serve public interest a. Intended to promote public good b. Effectively promotes that purpose (arguably) 2. Substantive due process: not to have property circumscribed without good reason/just compensation ii. Regulatory Takings 1. Mahon (1922): SCOTUS held that regulation can amount to taking a. Provides more protection to land owners than police power/subs. Due process b. Point of takings clause is to fairly allocate cost of public benefits 2. Penn Central (current doctrine) a. Ad hoc balancing test b. Three Factors: i. Economic impact of regulation on claimant ii. Extent of interference with investment-backed expectations

iii. Nature of govt action- whether or not reg. requires owner to tolerate physical invasion c. Weight of govt interest considered- substantive due process question, only applies to unconstitutional conditions (Nolan v. Calif. Coastal) 3. Per se takings: a. Permanent physical invasion (Loretto) b. Total destruction of economic value (Lucas) i. Nusiance exception: never have right to create nuisance