Property Outline I. Theories of Property Acquisition by First Possession A.

. First in Time (Common law maxim)First possession is the root of titlefirst in time is first in right. Exception is Johnson v. MIntosh case. (further down the outline) B. Lockes Labor Theory 1. Definition: Each person is entitled to the property produced through his own labor. How does this theory apply today when everything is already owned? With intellectual property rights (internet) 2. Pros and Cons of Lockes Theory (a) Pro easy to understand and rewards effort, awards hard work, encourages innovation. (b) Cons Hard to tell what is labor, and monopolizes to one person, hard to know how much work is enough, not all hard work is done by one person. 3. Ownership v. Possession Ownership does not mean you can do anything you want with it. You can possess something without seeing it in person. You may possess things you do not even know about. 4. The government defines what property isall the sticks may differ, b/c property is all different. C. Utilitarian - law and economics (Demsetz) Tragedy of the Commons private ownership less externalities equal no harmful or beneficial effect is external to the world, resources in common will always be abused. 1. Internalizing a process usually a change in property rights, that enables these effects to bear in (greater degree) on all interacting persons. 1. Externalities take place when people make a decision about how to use resources without taking full account of the effects of the decision on others. 2. Bottom line If I can act in a way that does not force me to take into account that my behavior may harm others, I am likely to act that way too much. 3. Tragedy of the commons (a) Free riders encourages the misuse of resources b/c others bear the cost (b) Hold-outs 4. Main Take Away: Property should consider the cost to society in adopting one rule over another. 5. Random The concept and role of property rights. There should be individualized private rights, to limit the externalities. Property right when (1) becomes economic for those affected by externalities. (2) To internalize benefits and cost.

II. Ways to acquire propertydiscovery, capture and creation A. Discovery- Johnson v. MIntosh (3) Native American rights to property Rule: The Europeans conquered the land from the Indians and Indians were only given the occupancy rights and they were never given the right to sell their land 1. Common law maximFirst possession is the root of titlefirst in time is first in right 2. Indians could not convey land b/c they are savages and cannot own landonly occupants. Therefore Indians could not transfer land. 3. Conquest is what was important and the Indians were only allowed right of occupancy or whatever the courts allowed. 4. Marshall agrees that you have to take care of the people you conquer, a middle ground. 5. Main Take Away Property conveys power, and first possession is a key to this power. Rights of occupancy is only good v. the government b/c they can change the laws. B. Capture --Pierson v. Post (18) wild animals 1. Pursuing does not equal possession. 2. Does the pursuer of a wild animal acquire a right to the animal? No. 3. Rule One must manifest an unequivocal intent to appropriate the animal to ones use, deprive the animal of its natural liberty, and bring the animal within certain control. (1) Notice (2) Deprive liberty (3) Bring to control First possession is first to right Only applies to wild animals, not domestic. 3. Reasoning: In order to obtain title to a ferae naturae (wild animal) a person must take it. The first to kill and capture is the superior rule of law. Had Post mortally wounded the animal, it would have been sufficient to show possession since this would have deprived the animal of its natural liberty (Dictaif it happened then holding wouldve been different). However, the plaintiff was only able to show pursuit and therefore acquired no property interest in the animal.

III. Property Law Can Be Instrumental A. Ghen v. Rich (26) No appropriation by chance finder of dead whale Rule: The party who harpoons the whale is the owner even if it is later discovered on the shore by another. 1. Did the original killer have title to the whale? Yes. 2. Classic case analyzing the role of custom in the law of property. Custom that embraced the industry. You could own the whale even though there was no complete possession. 3. Main Take Away Property is instrumental. Put another way, property is constructed in order to accomplish certain goals. 4. Policy: unless it is sustained, this branch of industry must necessarily cease, for no person would engage in it if the fruits of his labor could be appropriated by any chance finder.

B. Keeble v. Hickeringill (30) -- the duck case Rule: A part can recover against another for interfering maliciously with is ability to use his land for pleasure and profit. 1. Does a landowner have a right to attract wildfowel to his property unimpeded by the direct interference of another aimed soley at keeping the wildfowel away? Yes. 2. Main Take Away Competition is okay, but interference for the sake of interfering (malicious interference) is not okay. 3. Policy: favors protection of those who use their skill and industry to promote trade! 4. Willful interference keeping the ducks away from the decoy nets. They key is whether one is malicious with it or not.

C. Problems QUESTION #1: Post is out hunting deer. Post closes in on a deer, but before he can shoot it, the deer collapses of exhaustion. Pierson happens to be watching and graba the collapsed deer first. In a dispute, who owns the deer? ANSWER: There was notice and pursuit, plus the deer was deprived of his liberty (collapsed). But, was Post in certain control? Probably not. So, Pierson likely owns the deer. QUESTION #2: Plaintiff is a dairy farmer, and one day she is out chasing a cow that escaped from her pasture. If Defendant sees the cow on his own land and takes the cow, does Defendant now own the cow? ANSWER: The key to this problem is to remember that the rule in Pierson applies only to wild animals. A cow is generally not considered a wild animal, so Defendant cannot take the cow and keep it. QUESTION #3: Plaintiff captures a wild havelina on uninhabited land and puts it in a cage on his land. Does Plaintiff now own the havelina? What if the havelina escapes and Defendant catches it who owns the havelina? ANSWER: First, Plaintiff does own the havelina if Plaintiff puts the animal in a cage because he meets the Pierson elements. Second, once the animal escapes, it becomes wild again. Defendant will own it once he catches it. QUESTION #4: Assume you visit my property in south Chandler and see a wild havelina in my backyard. You take it. Do you own it? ANSWER: No. You cannot take a wild animal from land that someone else owns. I own the havelina through constructive possession (ratione soli).

QUESTION #5: Assume you are out hiking the uninhabited hills north of Scottsdale and see some white Siberian tigers. If you could figure out a way to capture them safely, would you own them? ANSWER: It is likely that you would not own them, but this could be argued both ways. The argument against your ownership is that these are not wild animals. Siberian white tigers in Arizona are so unusual, that you would be on notice that someone owned them. QUESTION #6: Bambi question. What if a wild animal on your property leaves and has babies. Who owns the baby? ANSWER: animus revertendi if the animal comes back, even if wild, then you own it, even if it wanders off to (1) Notice. - Rule of increase baby goes with the Mom.

III. Natural Resourcesbased on capture rules 1. Original Rule: Capture is required to own these resources. 2. Modern Rule: Ownership is limited by reasonable use (no excessive production). 3. The rule of capture and other fugitive resources: - resources in question likened to animals - ownership of oil and gas should be the same manner - when they escape treat them like wild animals. - Water Prior application 4. Reasonableness is the limit.

IV. Acquisition by Creation (First in Time b/c I Created It) A. Quasi Property INS v. AP (56) Hot News Doctrine Rule: News gathering costs money, and as such, the news which AP sells as its own should be regarded as quasi-property. 1. A last minute takeaway by D is not okay. 2. I am first in time, b/c I created it.Locke Theory 3. The hot news doctrineMay D lawfully be restrained from appropriating news taken from newspapers or bulletin issues or published by P or to Ds member publication?Yes. 4. Holding: When the purpose amounts to nothing more than a blatant taking, copying and retransmitting information from one news gatherer to another, there is an action that no court of equity ought not hesitate long in characterizing as unfair competition in business 5. Reasoning: Quasi property b/c P and D, b/c news is the stock of the trade. P does not intend to abandon its merchandise to the public. D interferes at the exact point where P will reap a profit, and its unfair competition b/c D is not burdened with the expense of gathering the news. B. Protection Against ImitationCheney Brothers v. Doris Silk Corp. (61) Goal of Imitation Rule: In absence of some recognized right at common law, or under a statute, a mans property right is limited to the actual chattels that embody his invention 1. Imitation is okay. 2. May Ps design be protected only during the first season in which they are introduced? No. 3. Holding: Ps personal property is limited to the chattels that embody their invention, others can imitate.

4. Pros: Serves a public interest by offering comparable goods at lower prices. Cannot have a monopoly even though it created the product. Increases competition, decreases prices 5. Reasoning: Most patterns have a life of only a season, making it impossible to obtain a copyright or secure design patents. 6. Policy: We want knockoffs-encourage competition and drives down price. Imitation drives innovation.

D. Celebrity's Image -- White v. Samsung Electronics (66) Rule: Television and other media create marketable celebrity identity value. The law protects the celebritys sole right to exploit this value whether the celebrity has achieved her fame out of rear ability, dumb luck, or a combination thereof. o Intellectual property is about careful balances: what is set aside for the owner and what is left for the publicthere must be limits in place in order to build a society where creative ideas can flourish. 1. Celebrities have a right to their persona 2. Right of publicity 3. The court abandoned the common law rule of appropriation. Defendant hoped to profit from Whites fame w/o paying her for it. 4. Slippery slope argument! E. Basics of Intellectual Property Law Concepts 1. Patents20 years -Processes or products -Novel, useful, and non-obvious 2. Copyrightslife of anothertransferable, doesnt you mean you have to sue. -Expression of ideas -Original material (but not novel) -They are property rights and therefore transferable. 3. Trademarks -Words and symbols indicating source of product or service F. Consolidating a Main Take Away 1. Just because you first made it or first thought of it does not mean you have absolute dominion and control over it (unless you are a celebrity, perhaps).

V. The Right to Exclude 1. Property law must include a right to include as well as a right to exclude in order to ensure transferability of property. 2. Main Take Away - Every person has the right to exclusive enjoyment of his own property for any purpose that does not invade the rights of another person. 3. Not an absolute rightstill have to serve human values. Jacque v. Steenberg Homes & Inc.State v. Shack

VI. Acquisition by Find (Subsequent Possession) A. Lost Propertygenerally favors the finder unless the owner can show constructive possession (i) Finders Interest Armory v. Delamirie (98) --first case of subsequent possession - ring in chimney case Rule: A finder of an object has a property interest which is not absolute, but is sufficient to allow the finder to keep the object against all claims but those made by the rightful owner. 1. Rank the rights. 1. The original owner a. Policy reasons: i. Incentivizes the original owner to give a reward ii. Promoting peace and security 2. Subsequent possessors 2. Does the finder of lost property have title to the property superior to all the world except the true owner? Yes. 3. Holding- Finder has the highest right except for the original ownerpublic policy, promote peace and security. 4. Trover v. Replevin (a) Trover sue for money because the thing is gone (b) Replevinsue for the item 5. Main Take Away Right to possession of the resource is relative. 6. True owner v. chimney sweep - True owner wins, as chimney sweep was holding money in bailment 7. True owner v. silversmith (after paying for the gem to make chimney sweep to go away) - True owner would win. Shop owner would give sue chimney sweep to get money back because the bailment is over

B. Problems Question #1: Suppose I lose a watch that I found last year in the parking garage. You find my watch on the sidewalk after Property class. I then sue you for return of the watch. Who wins? ANSWER: The prior possessor wins (me!). This is relative title. Teacher wins b/c she was the owner before the second finder--prior possessor wins. Question #2: Suppose I lose a watch that I stole from Lyn last year at an end of the year party. You find this watch on the sidewalk after Property class. I then sue you for return of the watch. Who wins? ANSWER: Some courts say my prior possession is important and will award the watch to me. Some courts say that they will not help me get back the item because I stole it originally. 3. Important term to know BAILMENT: - the rightful possession of goods by someone who is not the true owner (great, minimal or reasonable care) - you cannot do with it what you want, just holding it - most courts say that you have to take reasonable care until the finder comes back - bailment ends with statutesmore on this later (ii) Absentee Owner Hannah v. Peel (101) Rule: Property law favors the finder of lost property unless the owner of the premises (where the lost property was found) can make a case for constructive possession. The finder of lost property has superior title against the owner of the land on which it was found

1. Does the finder have a claim to the found property superior to that of the owner of the freehold upon which the property was found (if the freeholder was never physically in possession of the freehold)? Yes. 3. HoldingHannah needed actual possession, to have dominion and control, and Peele did not, so Hannah (P) wins. 4. How to show constructive noticeD would have to show that he intended to go to the property, for dominion and control. 5. The two elements of possession: The finder must both acquire actual possession (physically) and intend to have dominion over it. 6. Problem of the Law of Findyou are inferring the mental state when the object is found. 7. Constructive possession is a legal theory used to extend possession to situations where a person has no hands-on custody of an object. Most courts say that constructive possession, also sometimes called "possession in law," exists where a person has knowledge of an object plus the ability to control the object, even if the person has no physical contact with it

C. Mislaid Property--Property Voluntarily PlacedMcAvoy v. Medina (107) Rule: Mislaid property creates a bailment that the shop owner holds for the true owner and the finder acquires no rights in the property. -Mislaid goods are those which are placed voluntarily by the owner and forgotten 1. Does property that was voluntarily placed in a shop by its owner, who then neglects to remove it, belong to the finder? No. 2. The property was not lost, just misplacedvoluntarily placed. 3. Main Take AwayP acquired no right to the property b/c the property was not lost and Ds act of receiving and holding the property do not create any rights to P. 4. Location does not matter unless the property is mislaidP did not acquire original right to the property, but rather it was his duty to use reasonable care for the safekeeping of the property until the true owner claimed it.

D. Abandoned Property 1. Property is abandoned when the owner intentionally and voluntarily relinquishes all rights, title and interests in it. E. Overall Road Map on how to attack a question 1. If lost = Armory + Hannah rule --> location matters? Attached v. unattached. 2. Mislaid = goes to owner of property--location matters 3. Abandoned = The first person who takes possession of the abandoned property acquires title that is valid against the world, including the prior owner

F. Interesting note on treasure trove and rewards English law: treasure belonged to king. American law: treasure is treated like other lost and mislaid property. Reward: no common law right to one.

VII. Adverse Possession Adverse possession - A means of acquiring title to another's real property without compensation by occupying the property in a manner that is actual, open and notorious, exclusive, hostile, under cover of claim or right, and continuous for a certain number of years 1. Why is adverse possession useful? What policies does it promote? o Settles or prevents disputes. o Provides certainty in the land

o o

Provides utilization of the land Vehicle for people to make claims on land

Other Policy Reasons i. Quiets title (establishes ownership); will tell us who owns the land ii. Promote beneficial use of land ii. Penalizes person sleeping on their rights 1. Sleeping theory: encourages attentive ownership iv. Settles disputes; encourages persons to make improvements 2. Elements of Adverse Possession Open Continuous Entry (giving exclusive possession) Adverse -Claim of right or hostile (courts vary) -Western states allow payment of taxes Notorious Open and Notorious = puts true owner on notice that you are on the property and you are not hiding / actions of adverse possessor. Visible possession so as to put owner reasonable notice. Reasonably inform an attentive landowner that someone is on the property Continuous = statute of limitations element. Appropriate to the subject landcan be seasonal-- the same degree of occupancy and use as average owner would use that type of property. Continuous for the statutory period. Entry/Exclusive = triggers the running of the statute of limitations you enter the land against the true owner. Must actually physically possess the property. Must exclude true owner Adverse = must be adverse, not with permission. Has to be against the true owners interests (a.k.a. hostility). Notorious = from the position of a reasonable personwould a reasonable person believe the person was in true possession results in constructive notice to the true owner. 3. Main Take Away adverse possession is a true elements test and a person must meet all the elements to win the property.

VIII. Color of Title Color of Title - the appearance of having title to personal or real property by some evidence, but in reality there is either no title or a vital defect in the title. One might show a title document to real property, but in reality he/she may have deeded the property to another; a patent to an invention may have passed to the inventor's widow, who sells the rights to one party and then, using the original patent documents, sells the patent to a second party based on this "color of title." 1. Claim of right v. Color of title (a) Claim of title the person thought it was actually their property (b) Color of title tainted piece of paper that did not truly transfer the property **The adverse possessor needs to go to court to quite the title to actually get the land

Color of Title Question #1 - O owns and has been in possession of a 100-acre farm since 1975. In 1994, A entered the back 40 acres under color of invalid deed from Z (who has no claim to the land) for the entire 100 acres. Since her entry, A has occupied and improved the back 40 in the usual manner for the period required. A brings suit to evict O from the farm. Who wins? ASNWER - O wins. A can only claim the part she actually occupies. Limitation: If someone else is in prior possession, then adverse possessor can only claim the part she actually occupies. Additonal Analysis: A does not win b/c he did not have exclusive possession of the whole farm--O and A were on the farm at the same time.

Color of Title Problem #2 - Suppose O took the farm by an invalid deed in 1975 and has been in possession for the statutory period. Does the result in #1 change? ANSWER - No. The same reasons apply (see Answer #1). Just stacking adverse possession does not address the problem "by who has the better piece of paper."

Color of Title Question #3 -- Two contiguous lots (1 and 2) are owned by X and Y, respectively. X and Y are not in possession. The lots are conveyed by invalid deed from Z to A, who enters lot 1 and occupies it in the usual manner for the required period. Subsequently, A sues X and Y to quiet title to lots 1 and 2. Who wins and why? Answer: A wins against X but not against Y. A never entered lot 2. To have adverse possession, there must be entry against the owner of the land. You can only claim the land you entered. Lot 2, was not O + N or no E. ** If X owned both 1 and 2, then A would win both b/c of color of title? Limitation: Entry must be against the owner of the land.

IX. Minor Encroachments Manillo v. Gorski (136)the stair case. Rule: A party may acquire land through adverse possession if that party had a mistaken belief that she had title to the property (Connecticut doctrine), BUT the true owner must have actual knowledge. 1. Does an entry and continuous possession under the mistaken belief that the possessor has title to the land involved exhibit possession required to obtain title by adverse possession?Yes. Case remanded for further factual determination. 2. Holding Whether or not the adverse possessor is mistaken, the result is the samethe owner is ousted from possession. If he fails to attempt to recover possession within the requisite time, it is probably the result of the lack of knowledge that he is being deprived of lands to which he has title. Thus, any entry and possession for the required time that is exclusive, C, visible and N, even though a mistaken claim of title, is sufficient to support a claim of title by adverse possession. 3. Limitation of Holding However an element of O + N possession may not be met where the encroachment is of a small area or where the intrusion requires on-site surveythere is no presumption of knowledge of a minor encroachment along a common boundary. Only when the true owner has actual knowledge may it be said that the possession was O + N. If it is a minor encroachment then true owner requires MAJOR NOTICE. 4. When it is a minor encroachment, the true owner must have actual knowledge -Usually ends in settlements and one pays money

Mistaken Boundary Problem #1 - A and B own adjacent lots. A builds a fence on what she mistakenly believes is the boundary. In fact, the fence is 3 feet onto Bs land. A then acts as owner of all the land up to the fence for the required period. So, A gets title by adverse possession. Later, when B finds out, A moves the fence back to the original boundary (to avoid a hassle). Three years later, A changes her mind and sues to eject B from those 3 feet. Who wins? Answer - The adverse possessor wins b/c it is their property, at least until the other adverse possessor wins. She still has title.

X. Tacking: Privity -- Howard v. Kunto (142)--the case with all the messed up deeds!! Rule: To constitute adverse possession, there must be actual possession that is uninterrupted, open and notorious, hostile and exclusive and under a claim of right made in good faith for the statutory period. Summer possession can constitute continuous possession if such possession is similar to the conduct of surrounding owners. Tacking of adverse possession is permitted if the successive occupants are in privity, if there is a reasonable connection between the predecessors and the successive occupants. 1. May a person who received record title to tract #1 under the mistaken belief that he has title to tract #2, who subsequently occupies the tract, use the period of possession of tract #2 by his immediate predecessors (who also held the record title to the other tract) for the purpose of establishing title to tract #2 by adverse possession?Yes. 2. Privity privity requirement is no more than a judicial recognition of the needs of some reasonable connection between successive occupants of real property so as to raise their claim of right above the status of the wrongdoer or the trespasser. In this case, there was sufficient connection between estates. Therefore, the prior estates could be tacked onto the present Ds time period to meet the statutorily required time period. You can only tack where there is privity Privity if the deeds were in good faitha reasonable connection. 3. Definition of Tacking adding together time from a previous owner. 4. Hypotheticals: Hypothetical #1 - In 2000, A enters Blackacre adversely. O owns Blackacre. In 2007, B tells A to get out of here; Im taking over. A, feeling threatened, leaves. B enters possession. In 2010, who owns Blackacre (assume 10 year statute)? Answer - O owns blackacre b/c there is no privity between A + B. There was no "good faith," A and B were not on the "same wavelength." There was no reasonable connection so the time is not tacked (passed along) when A was kicked out. Continued Hypo: What if B comes in and A allows him to take over? Answer: Tacking is allowed Hypo Continued: What if A leaves in 2007 but gets brave and comes back 6 months later. When does A possess the land? - 2010 (will pretend there is privity) OR - 2010 plus 6 months (meaning that Bs possession is not tacked onto As period) **It depends on the state, but the reason for allowing the tacking is so A does not lose the first 7 years if he was kicked out. However, if A left voluntarily, then the clock will start over on A. 5. Does tacking work on the owners side? YES. Hypothetical: In 1994, A enters adversely on Blackacre, owned by O. In 1995, O dies, leaving a will that devises Blackacre to B for life, remainder to C. In 2010, B dies without ever having entered Blackacre. Assume a 10 year statute period. Who owns Blackacre?

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Answer: Statute of limitations ends in 2004 A adversly owned the property to "O," but at that time it is B's property--still tack O and B, so that A owns the property. The clock does not stop on A just b/c the property changed hands--> privity b/w O and B (the will). **Important question to ask: "Who got the best interest of the land in 2004?" If OCEAN applies to O, then privity assures OCEAN for the next person too.

B. Disabilitiesdo not tack. Disability must exist at the time one steps on the land. 1. Basically, statutes in every state allow the time period to be extended if certain disabilities are present. Disability includes age, mental state and imprisonment BUT, disability must exist at time the cause of action accrues. At Entry Disabilities cannot be tacked. 2. Hypo Hypothetical: O is the owner of Blackacre in 1984, and A enters adversely on May 1, 1984. O is insane in 1984, then dies insane and intestate in 2007. Blackacre goes to H (heir). Who owns the land? ANSWER: If insane before A entered then H owns the land. If insane after, then A owns the land.

Hypothetical continued: What if H is 6 in 2007? (Assume the age of majority is 18). ANSWER: Cannot tack disability, so A would own the land in 1994.

XIII. Adverse Possession of Chattels - OKeeffe v. Snyder (151)stolen paining case Rule: The statute of limitations for replevin will begin when the owner of the chattel should have through due diligence discovered facts that form the basis for a cause of action. 1. Discovery Rule If an artist diligently seeks the recovery of a lost or stolen painting, but cannot find it or discover the identity of the possessor, the statute of limitations will not begin to run. -shifts the burden from an adverse possessor having to prove open to show the owner acted in due diligence shifts the burden to the owner. 2. Issue Does the discovery rule apply to stolen artwork to toll the statute of limitation? A thief never acquires title and cannot transfer title Discovery rule holds that the statute of limitations does not begin to run until the injured party discovers the property was stolen. The court should consider whether the P took reasonable steps taken after the alleged theft, to recover the painting. The due diligence required will vary with the nature, value and use of the property involved. Tacking is permitted if it was in good faith. 3. Open could be proved by Snyder. XIV. Acquisition by Gift 1. Two types: (1) Inter vivos gifts made during the grantors life when death is not imminent. Irrevocable once made (2) Causa mortis gift made in contemplation of imminent death Revocable (automatically) if grantor survives

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2. Elements for a valid gift: (1) Intent to get it now (in WILLS, intent exists now) (2) Delivery no longer under the grantors dominion and control - Manual (old common law rule used to be that if something could be delivered by hand it must be delivered by hand.) - Constructive: like a key - Symbolic: standing in for a gift, like a deed or letter (3) Acceptance 3. Main Take Away A gift is only recognized if the donor has truly lost the ability to control the gift now, at the moment, or else it's a will and that is different. 4. Special Cases Checks -- not a gift until you cash it Engagement rings -- "common law" depends on jurisdiction Other statesdonor cant get ring back if it is donors fault Gifts by letters -- a gift if it is in the present tense o I give you = gift o I will give you = not a gift Safe deposit boxes Future tense is not good enough. States dont want wills to be circumvented. o A note in a box is not good enough, so not a gift Why? b/c we do not want people to circumvent rules Use a will for a the above Voluntary bailment give up property and is just being held onto. 5. Problems A. Problem - O visits her daughter A and leaves a pearl ring on the bathroom sink. After O leaves, A discovers the ring. When A calls O to tell her, O tells A to keep the ring as a gift. Can O change her mind and get the ring back? Answer - A owns the ring. Once a gift has been made by physical delivery, the giver cannot take it back. Quick analysis There was intent when O said yes you can keep it. Delivery was not necessary b/c A already had it. Acceptance was obvious, she kept it. B. Suppose A does not make the call. Instead, she brings the ring to a dinner to surprise O. O tells her, I want you to have it. Its yours. A tries on the ring, but it is too big. O says, Let me wear it until you can get it cut down to fit you. O leaves dinner wearing the ring, is struck by a car, and is killed. A sues Os executor for the ring. Does A win? Answer: A wins. She can prove both elements of gift: intent and delivery. Bonus question! When A gave O the ring to wear until A could get the ring sized, what is this arrangement called? Bailment: O is holding onto it so A wins. C. Assume the same scenario as part 2 except that O tells A the following: I promise to leave you this ring when I die. Does A get the ring? Answer: A loses. There is no intent. Instead, this is a gratuitous promise. Would require a will, b/c this is in the future. 6. Newman v. Bost (167) -- case that asks us to explore the depth of intent and delivery.

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Rule: To constitute a gift causa mortis, a gift made in contemplation of and expectation of immediate death, there must be an intention to make a gift and actual delivery of that gift. The donor of the gift can expressly or impliedly intend to make a gift, but it must be clear that the donor knew what he was doing and that he intended to make a gift. Actual manual delivery must occur when articles are present and capable of manual delivery. Constructive delivery may occur when the things intended to be given are not present, or when present are incapable of manual delivery because of their weight or size. Issue: Is constructive delivery of a gift sufficient if actual delivery was not possible. Main Take Away - Intent is usually a question of fact for the jury. Delivery is usually a question of law. This means that intent is harder to prove and predict (plus, it has a tougher standard of review). Furniture was delivered b/c P was given a key constructive delivery and manual delivery was impossible b/c of the size and weight of furniture. ***Key represents constructive possession With a key to a drawer, you get everything in it. Reasoning: She got all the furniture in the room b/c there was no need to redeliver.

7. Gruen v. Gruen(229) - this case also dissects the elements of intent and delivery Rule: In order for an inter vivos gift to be valid, there must be intent on the part of the donor to make a gift, delivery by the donor to the donee and acceptance of the gift by the donee. An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership. Delivery of the gift can be by physical delivery or constructive delivery, sufficient to divest the donor of dominion of the property. Acceptance by the donee will be presumed when the gift is of value to the done watch for "magic words" Ill give it to you someday is not a gift Do the cases ever dissect the element of acceptance Issue: May a donor make a valid inter vivos gift of a chattel if the donor retains a life estate in the chattel and never surrenders possession to the donee before the donor's death?--YES. Life estate = TRUST Holding: There is a different b/w ownership and possession. The delivery is satisfied by the letter b/c it would be pointless to deliver the painting and then for the son to give it back.

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THE SYSTEM OF ESTATES I. Estates and Future Estates 1. How do we define estate? - An interest that is or may become possessory. - An interest that is measured in terms of duration - Magic words are important 2. What is a freehold estate? - Livery of seisin- ownership of property, therefore it can be willed, transferred, etc. 3. Main Take Away Duration is the essential element that distinguishes estates.

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II. Fee Simple Absolute (FSA) 1. Characteristics: - Potentially infinite duration - Inheritable by collateral and lineal heirs - Freely alienable and devisable 2. What are the four ways to END a fee simple absolute? (1) sell it/transfer (2) will it away (3) imminent domaingovernment takes it away (4) escheat (die with no heirs)the state gets it b/c there are no heirs 3. The magic words for creation: O to A and his/her heirs What the words of purchase? Who it is going to, who get its . . . to A What the words of limitation? What they got and his heirs = FSA ** 75% of the states assume FSA when in doubt of the magic words (DEFAULT ESTATE). In 2 states (LA and CT) you have to use the magic words 4. If property passes to heirs, it passes via the following hierarchy: heirs only exist once the person dies. 1. Spouse (modern view) 2. Issue/Descendants o -per stirpes 3. Ancestors 4. Collaterals anyone who can claim blood relationship 5. If none of the above, property escheats **Some states do conveyance by per capita which is property divided unevenly and most states divide per stripeevenly.

HAVE TO REMEMBER: IF O EVER GIVES A FSA THEN O CAN NEVER GET THE PROPERTY BACK; and that you can never convey more than you have. 5. SEE ATTACHMENT for FSA & Life Estate Hypos.

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QUICK CHECKLIST State interests o Life estate o Fee simple o Fee tale o Fee simple determinable o Fee simple subject to condition subsequent o Executory interest Future interest o Everything out there Where have we been? o We continued our discussion of estates and future interests Fee simple determinable Fee simple subject to condition subsequent Fee simple subject to executory interest o We started talking about future interests in more detail. Reversion Transferable Devisable Descendible (through inheritance)

III. Fee Tail 1. The magic words for creation: O to A and the heirs of his body - What are the words of purchase?O to A - What are the words of limitation? . . . and the heirs of his body **NO LONGER EXISTS IN MODERN VIEW, AND IS TREATED LIKE FSA

IV. Life Estate 1. The magic words for creation: O to A for life - Words of purchase = to A - Words of limitation = . . . for life 1. What interest can the holder of a life estate (A) convey to someone else? - The right to possession for As life - A is the measuring life - If someone has a life estate then that person has some rights (in regards to adv. poss). rights of other person. Assume A and then B has future interestBs possessory interest. 2. Life estate pour autre vie - life estates that are measured by the life of someone else Ex. A conveys land to B during the life of C

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V. Waste Waste - term used in the law of real property to describe a cause of action that can be brought in court to address a change in condition of real property brought about by a current tenant that damages or destroys the value of that property. o Common law mechanism for resolving land use disputes where property rights are divided between persons holding present estates and future interests in the same land. 1. For life estate onlyrights of other person (not the life estate holder). Assume A and then B has future interest Bs possessory interest. 2. Three types: (1) Voluntary not only what you should be doing but also letting something happen or doing something bad. (2) Permissive type of voluntary; sit by and let it happen; not fixing something, hoarding (3) Ameliorative Sill waste where life estate is improved the value of the property. Usually you cannot sue for this, but the policy reason is if by improving the property you destroy the historical value.

VI. Defeasible Estates 1. What is the definition of defeasible? An estate that terminates upon occurrence of a specified future event, but the event that ends the estate must be in words. 2. Purpose? A way to control land use without zoning 3. Two exceptions (1) Cannot tell people not to sell the landagainst public policy (2) Cannot hinge upon marriagemeddles with peoples lives 4. Three types: (1) Fee simple determinable- FSD (2) Fee simple subject to a condition subsequent - FSSCS (3) Fee simple subject to an executory interest FSSEI A. Fee Simple Determinable (FSD) 1. The magic words for creation: Language of duration as long as until for as long as during while used for such time Statement of motive or wishes does not count. This makes a FSA. Example: To A as long as X o The above shows a possibility of reverter to O if A does not meet the language of duration. 2. Another example: To A so long as the property is used as a school. i. Who gets the property if the estate ends? Owner - Possibility of reverter - This is automatic. - Cannot be waived but can be transferred. B. Fee Simple Subject to Condition Subsequent (FSSCS) 1. The magic words for creation: Language of condition on the condition that provided subject to but if unless 2. Courts favor these over a Fee Simple Determinable. Why?

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 Does not end automatically. There is a statute of limitations usually 3 years and gets a FSA. 3. Example: To A on the condition that she uses it as a school. (i) Who gets the property if the estate ends? Owner - Right of entry - This is not automatic. - Cannot be waived or transferred generally. C. Fee Simple Subject to Executory Interest (FSSEI) 1. The magic words for creation: Language involves a third party (i)Who gets the property when estate ends? - Third party - This is automatic. 2. Other random things to remember FSSEI only on FSDs and FSSCSs if O conveys to A on the condition and then B on the condition, then A is FSSEI.

then the person

FUTURE INTERESTS

I. Introduction to Future Interests 1. Six possible future interests A. Interests retained by grantor (1) Reversion (2) Possibility of reverter (FSD) (3) Right of entry (FSSCS) B. Interests created in third party (1) Vested remainder (2) Contingent remainder (3) Executory interest - executory interest is a future interest in someone other than the grantor thats not a reversion. A future interest in a grantee that either divests (cuts short) the prior estate, or springs out of the grantor at a later date.

II. Review of Reversions 1. A reversion is what a grantor has left after he creates an estate that is something less than he possesses. **there is no reversion left if O grants a FSA. 2. A reversion is not always certain Example: To A for life then to B and his heirs if B survives A. This is still called a reversion. 3. A reversion is transferable, devisable, and descendible.

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4. Reversion Hypos: A. O owns a fee simple absolute and makes the following transfers. In which cases is there a reversion? (a) To A for life, then to B and her heirs. (b) To A for life, then to B and the heirs of her body. (c) To A for 20 years. (d) To A for life, then to B and her heirs if B attains the age of 21 before A dies. Answer: (a) No, b/c FSA (b) Yes, life estate and then fee tailcould run out of heirs (c) Yes. When 20 years are up. (d) Maybe. A has a life estate and B may have a FSA if B meets the condition

B. O conveys Blackacre to A for life, then to B for life. O subsequently dies with a will devising all of Os property to C. Then A dies, and B dies. Who owns Blackacre? Answer: C owns Blackacre because the reversion is devisable.

III. Remainder 1. What is the definition of a remainder? A future interest that waits politely until the termination of the prior possessory estate (the prior estate ends naturally) Look for these after the comma and magic words . . . , then to. The first transfer is an estate Two steps or further away = future interest 2. There are two types or Remaindersvested and contingent. I. Vested Remainder 1. Requirements: Must be given to an ascertained person. Must not be subject to a condition precedent. May be uncertain in size. If the interest is certain to vest at the end of the prior estate, we say the future interest holder has a vested remainder in FSA. Example: To A for life, then to B and his heirs. 2. Subject to open when the conveyor is not sure of the size of the group. A vested remainder may be uncertain in size. Example: To A for life, then to As children and her heirs. If A has one child, B, that child has a vested remainder subject to open because A may have more children before her death. II. Contingent Remaindercontingency has to be subject to the person Definition - Interest is not sure to vest at the end of prior estate because there is a condition to be met. 1. Requirements: The interest is dependent on some other event other than the natural termination of the prior estate. Example: To A for life, then to Bs heirs. If B is still alive, he has no heirs yet. So, the interest is given to an unascertained person. Example: To A for life, then to B and her heirs if B survives A. The interest is dependent on some event other than the natural termination of the prior estate. ** Reversion to O if the contingency is never met.

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III. Contingent v. Executory Interest Identify a 3rd party, cannot revert back to grantor and previous estate can be cut short or divested. Identify if there is someone who HAS the property who is next in line. Remember the lines.

3. SEE ATTACHMENT: Future Interests Questions 4. Some points to poinder (i)Why is there a preference for vested remainders? Its easy-- we know where the property is goingadministerability Certainty Better to predict those who have future interest to look back have interest in the property. (ii) What is the distinction between contingent remainders and vested remainders subject to divestment? In certain states it does not matter, but in some it does. It matters in states with Rules of Perpituities. subject to divestment only on vested remainders 5. Comparing Remainders To A for life (life estate), then to B and her heirs if B survives A (contingent remainder). To A for life (life estate), then to B and her heirs (vested remainder), but if B does not survive A, to C and her heirs (vested subject to divestment).

MAIN TAKE AWAY You must classify each interest in sequential order as they were written. The language used is highly important, as are the commas.

CO-OWNERSHIP AND MARTIAL INTERESTS

I. 3 Types of Co-ownership Tenants 2 people who have a possessory interest in the land. (1) Tenants in common - This is the default ownership when courts are in doubt as to creation. (2) Joint tenants (3) Tenants in the entirety: tenants does not equal leasing, just people have possessory interest on the land

A. Tenants in Common - DEFAULT Each tenant has a separate but undivided interest in the property. A type of land ownership when the land is held by more than one person. If one of the owners dies his portion goes to his descendantsalso in tenant in common o Each tenants interest is transferable, devisable, and descendible. o Each tenant owns one piece, but each tenant has a right to the whole thingcannot keep someone from certain parts.

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Schwartzbaugh v. Sampson thus, if one cotenant leases his interest, the leassee is similarly entitled to an equal right to possession of the whole property.

B. Joint Tenants Tenants own the property together (like a single owner) with rights of survivorship (per my et per tout) The holding of an estate or property jointly by two or more parties, the share of each passing to the other or others on death o Cannot pass by will why? So people do not try to avoid taxes o Benefit inheritance taxes, creditor goes away o Rights of survivorshiponce one dies, the other gets the deceased part 1. How to CREATE a joint tenancy4 Unities (1) timesat the same time (2) title same instrumentsame paper (3) interests must be equal and must be the same type of estate (4) possession must have the right to possess the whole when he gains the interest. 2. How to DESTROY a joint tenancy (and make it into a tenancy in common): Agreementboth parties agree One party unilaterally conveysRiddle v. Harmon o Rule: A joint tenant can unilaterally sever the joint tenancy and create a tenancy in common by conveying the property to herself as a tenant in common. o Straw conveyances Court says if we allow straw people, then should just let her do it. o Harms v. Sprague Rule: A mortgage on the joint tenancy property was not a lien after the death of the joint tenant and did not sever the four unities of joint tenancy, thus the surviving tenant became the sole owner of the property. If one joint-tenant mortgages his interest in the joint property, is the joint-tenancy severed? No. The mortgage is a lean that does not survive a join-tenants death. However courts are split as to whether a lesser interest severs a joint interest. One party seeks partitionone goes to court to divide the property o Partition in kind o Partition by sale 3. Other aspects of Joint-Tenancy (a) Slayer statutes do not allow a murderer to keep survivorship rights if the murderer kills his joint tenant Arizona has a slayer statute. (b) Uniform Simultaneous Death Act (19 states, including AZ)-- The Act specifies that, if two or more people die within 120 hours of one another, each is considered to have predeceased the others, so shared equally b/w both their heirs. (c) Schwartzbaugh v. Sampson- a joint tenant has the power to execute a valid lease and that the lease does not affect severance. o Rule: A joint tenant can lease or license anything less or equal to his rights in the joint tenancy property

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 The theory is that one joint tenant is entitled possession to the whole, and the lease merely gives to the lessee, a right that he, the lessor, had been enjoying. However, one person cannot unilaterally give someone the right to purchase, b/c the joint tenant does not own the whole property by himself. C. Tenant in the Entirety This tenancy exists between a husband and wife and operates like a joint tenancy. o Marriage is added elementat the time of the conveyance. How to destroy: o Divorce-only way to destroy Arizona does not recognize this. If H and W are not married then they would meet the elements of joint-tenancy Main Take Away Creation of a co-tenancy interest is determined by elements, but courts will take intent into account when severing these interests (as we will see shortly).

D. Problems, Co-tenancy 1. O conveys Blackacre to A, B, and C as joint tenants. Subsequently, A conveys his interest to D. Then, B dies intestate leaving H as his heir. What is the state of the title to Blackacre? Answer: - First, the original conveyance created a joint tenancy. A severed this tenancy when she conveyed her interest to D. - So, B and C are joint tenants of 2/3 of Blackacre, and D is a tenant in common of 1/3. - When B dies, his interests automatically goes to C. This leaves C (2/3) and D (1/3) as tenants in common. - D and C would be tenant in commons Analysis: - You cannot will or convey your joint tenancy - Remember you can unilaterally convey and sever joint tenancy, resulting in a tenant in common.

2. O conveys Blackacre to H, W, and X as joint tenants with rights of survivorship. H and W are married to each other. X is not related to either. Later, H dies, then W dies. What is the state of the title to Blackacre? Answer: X owns Blackacre in FSA Analysis: X wins b/c he is the last man standing

3. A and B are planning to marry. Two weeks before the ceremony, they buy a house and take title in A and B as tenants by the entirety. Several years later, A moves out and conveys his interest in the house to his brother C. C brings an action to partition the property. What is the result? Answer: A and B do not have a tenancy in the entirely (because no marriage at time of taking title). So, court will choose between joint tenancy or tenancy in common. Either way, C can bring an action in partition because B and C are tenants in common (B broke any joint tenancy when he conveyed to C. Analysis: Remember that for Tenant in the Entirety, H and W have to be married at the time of obtaining title or conveyance.

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II. Partitioning and Ousters 1. Partitioning distributes the property among the former cotenants as solely-owned property. Absent a contract, each cotenant has a right to obtain partition without proving any right or reasonregardless of any inconvenience , burden or damage. 2. A partition in kind is a division of the property itself among the co-owners. In a partition by allotment, which is not available in all jurisdictions, the court awards full ownership of the land to a single owner or subset of owners, and orders them to pay the person or persons divested of ownership for the interest awarded. Partition by sale constitutes a forced sale of the land, followed by division of the profits thus realized among the tenants. Generally, the court is supposed to order a partition sale only if the land cannot be physically divided 3. Two kinds of action of partition: (1) In kind (2) By sale Court may also do accounting an action (an equitable proceeding) that is brought when a cotenant refuses to give his cotenants a pro rata share of this interests received from a third party for use of the land (rental income, exploits natural resources) Accounting does not apply if a cotenant is in possession and is making money out of his own labor. Four areas to be aware of: (1) Rents/profits (2) Taxes/mortgage payments (3) Repairs (4) Improvements A. Partition in Kind- (Favored) The physical division of property into different parcels B. Partition by Sale- Delfino v. Vealencis If physical division of a land is impossible, impracticable, or inequitable, a court may order partition by sale. - Partition by sale the property is sold and the sale proceeds are divided among the cotenant according to their prospective shares. Partition by sale usually forces poorer tenants of their land simply b/c they cannot afford to bid successfully. - Issue: Did the court properly order the sale, pursuant to statute, of the property owned by Ps and D as tenants in common? No. - Reasoning: Courts should favor partition in kind, but allow partition by sale in emergencies or when division cannot be well made otherwise. The burden is on the party requesting partition by sale to demonstrate that such sale would promote the owners interest. The court must consider the interests of all the parties and not only the economic gain of one party. Does one party have exclusive possession of a portion of the property? Does one party have their home or derive their livelihood from their portion of the property? 3. Ouster Spiller v. Mackereth Ouster occurs when a cotenant in possession refuses the request of another cotenant to share possession of the land. As an ouster cotenant, he is entitled to recover his pro rata share of the property from the ousterer. On the other hand, if B asks that A pay him rent, no ouster occurs when A refuses b/c B has failed to demand share possession. Rule: Ouster necessitating the payment of rent to non-occupying tenants requires that the occupying tenant take action that prevents the use and enjoyment of the property by the nonoccupying cotenant Majority view: the occupying co-tenant is not liable for rent nonwithstanding a demand to vacate or pay. The occupying co-tenant must deny his co-tenant the right to enter. Minority view: take a view that a cotenant must pay rent to contenants out of possession even in the absence of ouster.

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III. Marital Interests 1. Majority (after 1970) v. Minority View (before 1970) (1) Minority (old view) the man and woman were considered one the woman ceased to be a legal person for the duration of the marriage Married Womens Property Acts (1839) removed the disabilities of coverature. Alimonywife was due this although could be denied if divorce was her fault Common law: property divided by title (2) Majority view-modern A. Termination by Divorce - No fault divorce with equitable division (after 1970) Common law: property divided by title Alimony wife was due this although could be denied if divorce was her fault. This was the rule prior to 1970 (divorce required fault) After 1970 no fault divorce Property is now subject to equitable division. o The courts distribute property between H and W based on equitable principles after considering a variety of criteria relating to each spouses needs, abilities and circumstancesincome, duration of marriage, age and health, special needs, contribution to marriage from each spouse, future employment, etc. o Some courts say all property o Some courts say marital property only Alimony is more short-term now B. Termination by Death - surviving spouse has interest in other spouse's property (like deferred community property) Common law: - Land stays with the patriarchal family. - Personal property: o Wife gets 1/3 interest if surviving issue. o Wife gets 1/2 interest if no surviving issue. o Husband gets all of wifes personal property/independent of children OLD VIEW Majority view - old (1) Dower (from endow): considered a gift from groom to bride at marriage. Effect: if H dies, W gets 1/3 life estate in Hs lands that H owned during marriage and that can be inherited. She only gets this if H dies first. If W does not extinguish her dower, then any purchaser or creditor from H takes subject to her dower. - Therefore without the Ws consent, the husband could not voluntarily transfer these interests to others, nor could creditors seize them to satisfy the Hs death Virtually obsolete now (4 states) in favor of more effective techniques for protecting the surviving widow. (2) Curtesy: The counterpart to Dower. H gets complete life estate in his Ws lands (that can be inherited) if she produced issue (of the marriage) capable of inheriting and the issue was born alive. Unlike dower, curtesy arose only if the marriage produced issue capable of inheriting the wifes landchildren! Wife could not transfer the land without her husbands consent. Virtually abolished (4 states)

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MODERN APPROACH (1) Majority view - The Elective Share This is a statutory right. Effect: surviving spouse has property interest in other spouses property at death. Does not attach to life insurance or joint property. Only attaches to property actually owned at death. However, trend is to . (2)Minority View- Community property - earnings of each spouse during marriage are owned equally in undivided shares by both spouses regardless of title. Exists in 10 states: (AL, AZ, CA, ID, LA, NV, NM, TX, WA, and WI). a) Separate property-- Strong presumption of community property if property bought during marriage. Property acquired before marriage. Property acquired by gift, devise, descentyours only Income from separate property (AZ but not all). Whatever parties agree to b) Conveyance cannot unilaterally change nature of the property & can convey if both spouses consent. c) Divorce equal division of community property d) Death each spouse can devise their share & if spouse dies intestate, the other spouse inherits. e) Devising: Can only devise your interest in the party and then other party and non-devising spouse would own the property as tenants in common. - Tracing is the concept of seeing what money bought the property. f) Mixing property. 2 approaches: (a) Inception of Right At time of conveyance or purchase / whatever was the majority (AZ) (b) Time of Vesting Will not figure out until after you pay mortgage off, etc and actually own the title (minority view). g) Migrating Couple- ownership of property does not change when domicile changes (unless spouses agree otherwise). At death: Personal property: law of domicile Real property: law of location of land Many common law states recognize community property (Uniform Disposition of Community Property Rights at Death Act)

Review Problems on Marital Interest 1. Under dower and curtesy law, during Os marriage to W, O conveys Blackacre to A and B as joint tenants. O then dies. Is Os widow, W, entitled to dower? Answer: Yes, because there is no indication that W extinguished dower. (Watch for this!) Analysis: Without the Ws consent, the husband could not voluntarily transfer these interests to others

2. A and B own Blackacre as joint tenants. A dies survived by his wife, X. Does X have a right to dower in Blackacre? Answer: Tricky one! No. A, as a joint tenant, has a property interest that cannot be inherited. X has no dower. 3. A and B own Blackacre as joint tenants. A conveys his interest to C. A then dies survived by his wife, X. Is X entitled to dower in Blackacre?

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Answer: No, same analysis as #2. A never owned the property other than joint tenant, so wife X cannot get it. 4. B and C own Blackacre as tenants in common. If C dies, is Cs widow entitled to dower in Blackacre? Answer: Yes. A tenancy in common is inheritable, so Cs widow has dower. Analysis: Did C own property at time of marriage? Yes. Is property inheritable? Yes

Extra: Remember a dower is a 1/3 interest only. 5. In a community property state, H takes $10,000 of the earnings from his job and puts it in a savings account in his name only. He then buys a lot with it, taking title in just his name. H then dies, devising all his separate and community property to his son, S. Who owns the lot? Answer: The lot was owned as community property, regardless of title because H bought it with community resources. W has a half interest in the lot, and H can devise his half. So, W and S own the lot as tenants in common. Tracing is the concept of seeing what money bought the property. Analysis: H or W can devise his half but never the whole things, b/c H or W does not own the whole.

I.

LEASEHOLDS (THE LAW OF LANDLORD AND TENANT) A. Lease both a conveyance of an interest in land and a contractual agreement between the landlord and tenant. B. Statute of Frauds 1. General rule: an oral promise for the sale of real property is not enforceable. Requires instrument to be in writing. 2. Oral leases for less than 1 year may be enforceable. C. Types of Tenancies: 1. Term of Years (L rents to T for 5 years) 2. Periodic Tenancy (L rents to T for term of 1 year that automatically renews unless one party gives notice) i. Common law requires 6 month notice. Many statutes require 30 days 3. Tenancy at will 4. Tenancy at sufferance (not really a tenancy!) D. Hannan v. Dusch (438) - Delivery of Possession 1. American rule - the lessee has a right to possession, but absent an explicit covenant, the lessor has no duty to deliver possession. 2. English rule in the absence of stipulations to the contrary, there is in every lease and implied covenant on the part of the landlord that the premises shall be open to entry by the tenant at the time fixed for the beginning of the lease. 3. Reasoning a. The American rule recognizes the lessees right to possession, but imposes no duty on the lessor to deliver possession. The lessee may covenant to require the landlord to deliver possession. There may be an ethical duty in good conscience upon the lessor to oust the old tenants, but the duty to oust the old tenants by statutory remedy rested on lessee.

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E. Ernst v. Conditt (442) Liabilities under Subleases and Assignments 1. Subleases: a transaction whereby a tenant grants an interest in the leased premises less than his own, or reserves to himself a reversionary interest in the term. 2. Assignment: conveys the whole term or remainder of the lease, leaving no interest nor reversionary interest in the grantor or assignor 3. Rule: if the instrument purports to transfer the lessees estate for the entire remainder of his term, it is an assignment, regardless of its form or the parties intentions. 4. Because the sublease agreement left the lessee with no rights either express or implied, the intention of the parties was an assignment and not a sublease. 5. Formalistic (duration) test: if the tenant transfers the right of possession for the entire remainder term of the lease, the transfer is an assignment 6. Intent test: a few courts rely on the intent of the parties to distinguish between assignment and sublease F. Kendall v. Ernest Pestana, Inc. (450) Prior Approval Clause 1. Minority rule (now majority rule) - When a lease provides for assignment only with the prior consent of the lessor, such consent may be withheld only where the lessor has a commercially reasonable objection to the assignment. 2. The law favors free alienability of property. The statute prohibits conditions restraining alienation, which has been interpreted by the courts to prohibit unreasonable restraints on alienation. G. Berg v. Wiley (p.460) Landlord Self-Help 1. Berg never gave up possession by closing the restaurant. 2. Rule: The only lawful means to dispossess a tenant who has neither abandoned nor voluntarily surrendered, but who claims possession of the property, is by resort to judicial process. Landlord cannot engage in self-help. 3. Reasoning: a. Minnesota has historically followed the common law rule that a landlord may rightfully use self-help to retake leased premises from a tenant provided that the (1) landlord is legally entitled to possession and (2) landlords means of reentry are peaceable. i. It was not peaceableeven if it was not broken into 4. There is growing modern trend holding that self-help is never available. i. Any form of self-help has the potential to catalyze a violent breach of the peace. H. Summary Proceedings - quick, efficient court proceedings by which a landlord can recover his premises (in some jurisdictions, this includes rent too). I. Forcible Entry and Detainer an action that a landlord or new property owner can take if the existing occupant refuses to leave after appropriate notice. This occupant could be either a tenant or original owner of property that was sold at a foreclosure or trustee's sale. The laws governing forcible entry and detainer actions are different if the property is residential or non-residential. 1. The occupant receives a written demand to vacate property for a specified term, after the days expire and the occupant still refuse to leave then a complaint for a forcible detainer can be filedwhich provides for a very short notice period before a court hearing. 2. A hearing is held to see if the occupant has the right to possession, if not they will be found guilty of a forcible entry and detainer. They will be forced to vacate, if not then the sheriffs office can evict the occupant, remove their personal property and return landlord possession and control of property. J. Sommer v. Kridel (469) Landlord Duties when Tenant Abandons Possession

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1. A landlord does have an obligation to make a reasonable effort to mitigate damages in this situation for the following reasons: a. Application of the contract rule requiring mitigation of damages to a residential lease is justified as a matter of basic fairness. If the landlord has other vacant apartments besides the one which the tenant abandoned, he has a duty to make reasonable efforts to attempt to re-let the apartment and treat it as one of the vacant stock. b. To assess whether the landlord made reasonable efforts to mitigate, the court should consider whether the landlord offered/showed the vacant apartment, advertisements, among other factors. The landlord need not accept less than fair market value rent or substantially alter his obligations as established by the pre-existing lease. 2. The burden is on the landlord reasonable diligence 3. This rule is opposite than that in the Restatement. 4. Surrender the yielding of the leasehold estate by the lessee to the landlord a. Effect: Landlord can accept it and tenant is off the hook 5. Abandonment occurs when the tenant: a. Vacates the leased premises w/o justification b. Lacks the present intent to return; and c. Defaults in the payment of rent. i. Effect: Landlord doesnt accept and tenant is still on the hook d. Landlord remedies: i. Leave the premises vacant and sue the tenant later for accrued rent ii. Mitigate damages by reletting the premises to a new tenant, and then sue the original tenant for the unpaid balance; or iii. Terminate the lease K. Other Security Devices & remedies 1. Suing for rent 2. Eviction 3. Anticipatory repudiation 4. Security deposits 5. Rent acceleration L. Modern landlord/tenant law favors contract principles and favors rules that promote efficient use of property (no waste).

II.

MOVEMENT TOWARD TENANTS RIGHTS A. Reste Realty Corp. v. Cooper (483) Doctrine of Quiet Enjoyment and Constructive Eviction 1. Quiet enjoyment - Any act or omission of the landlord or of anyone who acts under the authority or legal right from the landlord, which renders the premises substantially unsuitable for the purpose for which they are leased, or which seriously interferes with the beneficial enjoyment of the premises, is a breach of the covenant of quiet enjoyment and constitutes a constructive eviction. a. Doesnt have to be an affirmative act. b. Breaches of quiet enjoyment: i. Failure to provide heat ii. Sewage/blocked pipes iii. Allowing premises to be used for lewd operations

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B.

C.

D.

E.

iv. Excessive noise c. Permanency just means regularly occurring problems 2. Latent defects (hidden) landlord has duty to disclose these a. Most courts wont allow a tenant to accept latent defects 3. Patent defects (obvious) tenant may accept 4. Constructive eviction (failure of consideration/implied warranty against latent defects) a. Constructive eviction occurs when wrongful conduct of the landlord substantially interferes with the tenants use and enjoyment of the leased premises. Two key issues arise: (1) what is wrongful conduct by the landlord? And (2) what conduct substantially interferes with the tenants use and enjoyment? Lease Timeline: 1. Caveat lessee a. The caveat lessee principle means that it is up to the tenant to be sure of his bargain before entering into a lease. The first steps will be to scrutinize the plans of the demise and the building itself, as well as carrying out an inspection, looking for potential structural and practical issues. 2. Covenant of quiet enjoyment/constructive eviction 3. Illegal lease a. Under the illegal lease doctrine, a lease of unsafe and unsanitary premises that violate the local housing code is deemed an illegal contract. 4. Implied warranty of habitability Hilder v. St. Peter (493) Implied Warrant of Habitability 1. Elements of Implied Warrant of Habitability: a. Notice (notify landlord of problem) b. Reasonable time to repair c. Re-occurring condition d. Substantial or serious condition e. The landlord doesnt correct the problem 2. An implied warranty of habitability is always there in a residential property, requiring the landlord to deliver and maintain, through the lease, the premises and keep it safe, clean and fit for human habitation. 3. Warranty of habitability covers all latent and patent defects in the essential facilities of the residential unit. Essential facilities are facilities vital to the use of the premises for residential purposes. 4. A tenant cannot assume the risk by acknowledging a defect, nor can the implied warranty of habitability be waived by a covenant in the lease. 5. To bring this claim, the tenant must show that he first notified the landlord and gave the landlord a reasonable time to correct the defect. Retaliatory Eviction when a landlord evicts a tenant because tenant has lodged a complaint or exercised tenants rights. 1. Most jurisdictions today prohibit retaliatory eviction by statute (residential leases). a. Some have rebuttable presumption of RE if landlord evicts, increases rent, or decreases services within a certain time period of a tenants complaint. Note on Duties: 1. Landlords have generally no tort duty 2. Tenants generally have to keep property in good repair a. Waste (voluntary) b. Other repairs only if agreed upon in lease

29

3. Under modern law, tenant doesnt have to pay rent if premises are destroyed.

III.

MAJOR STEPS IN A REAL ESTATE TRANSACTION A. Major steps: 1. Purchase Contract (of sale) a. Usually this is a preprinted form provided by a realtor, fill in the blanks to customize b. Key provisions: i. Price ii. Method of payment iii. Time for performance iv. Conditions 2. Closing a. Preceding steps: i. Examine title ii. Inspect premises iii. Get financing iv. Open escrow v. Prepare documents (deed, mortgage, promissory note, escrow instructions) 3. Title Protection B. Problems facing Contract: 1. Statute of Frauds a. General rule: an oral promise for the sale of real property is not enforceable. i. The contract is not void, just voidable. b. Requires essential terms in writing: i. Parties ii. Price (Uniform Land Transactions Acts says a formula is good enough) iii. Property description c. Two exceptions: i. Partial performance ii. Equitable estoppel 2. Marketable Title a. Lohmeyer v. Bower (548) i. Marketable title is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation. ii. The city ordinance violation made the title unmarketable and doubtful. iii. Two key questions: a. Does a restrictive covenant affect marketable title? b. Does a zoning ordinance affect marketable title? c. Violations of either one make it a clear marketable title 1. Allows someone to rescind contract b. Ask: would a buyer pay fair market value for this property? C. Caveat emptor let the buyer beware under this doctrine, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes.

30

D.

E.

F. G.

H.

1. The only exception was if the seller had actively concealed latent defects or made misrepresentations amounting to fraud. Stambovsky v. Ackley (553) Doctrine of Caveat Emptor 1. Rule: Where a condition which has been created by the seller materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the sale, nondisclosure constitutes a basis for rescission as a matter of equity. 2. Reasoning a. A house purported to be haunted, which impairs the value of the property and is left undisclosed to the buyer can constitute a basis for rescission of the purchase agreement, even if the fact was publically known. b. Goes to NOTICE c. Seller advertized property as a haunted house before, so he was estopped from claiming ignorance. Johnson v. Davis (557) 1. Rule: When a seller of a home knows of facts materially affecting the value of the property, which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them. 2. Reasoning: This case was not in line with current developments of restring caveat emptor. Material fact statutes answer which facts are material in many jurisdictions. Disclosure forms as well. Stigma statutes Several states have enacted statutes shielding sellers from a failure to disclose psychological or prejudicial factors which might affect market value, such as a murder within the house or that a former occupant dies of AIDS. As is clause - The court should inquire whether the clause is an important part of the basis of the bargain, not an incidental or boiler-plate provision, and is entered into by parties of relatively equal bargaining position

IV.

TITLE ASSURANCE A. Deeds 1. Deed consideration; a legal, sealed, signed instrument granting a right. a. It must contain a description of the parcel of land conveyed that locates the parcel by describing its boundaries. i. Ex: reference to a natural or artificial monuments and from the starting point, references to directions & distances, reference to government record, reference to street and number or name of property 2. Three types: a. General warranty i. I havent put anything on the property and no one else has either. Warrants title against all defects in title, whether they arose before or after the grantor took title b. Special warranty i. Warranties only against the grantors owns acts but not the acts of others c. Quitclaim i. I dont promise anything; contains NO warranties of any kind, merely conveys whatever title the grantor has, if any, and if the grantee

31

B.

C.

D.

E.

F.

of a quietclaim deed takes nothing by the deed, the grantee cannot sue the grantor. 3. Merger doctrine says that when a buyer accepts a deed, the contract merges into the deed and the deed is deemed to be the final act of the agreement. a. NOW, the contract rules! The Recording System is a system to assure buyers that they have good title to the land. 1. Works by someone searching the public, recorded documents to check the chain of title. a. Tract index requires employees in the recorders office to determine which property is affected by the instrument and to index it by the legal description of that property. b. Grantor/grantee indexes an index based on the names of the grantors and of the grantees. 2. The recording system protects subsequent bona fide purchasers against prior unrecorded interests. Orr v. Byers (661) Doctrine of Idem Sonans 1. Idem sonans doctrine whereby a persons identity is presumed known despite the misspelling of his or her name, presuming from the similarity of sounds between the correct pronunciation and pronunciation as written. 2. Rule: misspelling of a name is a material issue and thus the doctrine of idem sonans cannot be applied to give constructive notice to good faith purchasers for value of real property. 3. Reasoning: the court ruled that to allow the judgment lien holder to prevail would place and undue burden on good faith purchasers for value of real property. These individuals would in reality never be sure if the property they intend to purchase was free of liens. The Recording Acts depending on the jurisdiction, a statute that dictates the legal procedure by which an individual claiming an interest in real property formally establishes their claim to that property. 1. 3 types: a. Race Statute whoever records first wins (DE, NC, LA) b. Notice (AZ) Statute protects a subsequent purchaser against prior unrecorded instruments even though the purchaser fails to records c. Race-Notice Statute tends to eliminate lawsuits turning on extrinsic evidence about which deed was delivered first (no prior notice = first to record!) 2. In the absence of a recording statute, the common law governs. The common law says first in time, first in right. So, the first conveyance always wins 3. Once there is a recording on a property, there is constructive notice, even if a person doesnt check it. Chain of Title and Notice 1. Chain of Title: indicates the sequence of transactions as property passes from owner to owner. 2. To be protected under the recording acts as a BFP (bona fide purchaser). A buyer must review this chain of title and is then charged with notice of any encumbrances he found/should have found. 3. Types of Notice: a. Actual Buyer is personally aware b. Record (constructive) what buyer should know based on what is recorded (whether Buyer looks or not) c. Inquiry (constructive) Facts that would cause a reasonable person to inquire Harper v. Paradise (693) Inquiry Notice

32

1. This case also serves as a caveat re: being careful about putting recitals in deeds! 2. Rule: A deed in the chain of title, discovered by the investigator, is constructive notice of all other deeds which were referred to in the deed discovered, including an unrecorded plat included in the deed discovered. The new owner MUST check and AT LEAST ask. 3. Reasoning: Defendants were on constructive notice that another missing deed existed and had a duty to inquire of the interests in the missing deed. It was incumbent upon the Defendants to ascertain through diligent inquiry the contents of the earlier misplaced deed and the interests conveyed therein. 4. Reminder: heirs (no willmost of the time)/beneficiaries (will) 5. Inquiry Notice based on facts that would cause a reasonable person to make inquiry into the possible existence of interest in real property G. Ways to Insure Title 1. Marketable title acts 2. Title registration (Torrens system) a. No around in many states )only 8 states) b. Different counties in same state can have different laws. 3. Title insurance a. American land Title Associations standard mortgage policy b. Lasts until the property officially changes handsdoesnt run with the land.

V.

NUISANCE A. Nuisance is the substantial and unreasonable interference with the use and enjoyment of land, arising out of negligent or otherwise wrongful activity. 1. Slippery slope standards 2. You will always argue the facts in a nuisance problem. B. Two types: 1. Private nuisance: arises when one uses his land in a manner that injures a private owner or occupant in the use or enjoyment of that persons land. a. A nontrespassory invasion of anothers interest in the private enjoyment of land. 2. Public nuisance: an activity that interferes with the rights of the public in general, usually by threatening the public health, safety or morals. a. An unreasonable interference with a right common to the general public C. Character of neighborhood: intangible invasion (light, dust, water, vibration, pollution) D. Trespass: requires only a showing of physical invasion. 1. Trespass is easier to argue because there is less burden of proof E. You have to have standing (constitutional requirement of a recognizable injury) F. Traditional test to ascertain nuisance: 1. The interference is unreasonable with serious injury to the plaintiff (some states);or 2. Multi factor test including: character, nature of wrong conduct, proximity to plaintiffs property, frequency, continuity, duration, and the nature and extent of resulting injury to the plaintiff. Some states also consider the utility of the defendants conduct as one factor. a. Utility of conduct the social value of the conduct G. Balancing Test (Restatement): an intentional interference is unreasonable if the gravity of the harm outweighs the utility of the act of the defendants conduct. In order to apply this standard, a court must compare the (1) utility of the defendants conduct with the (2) gravity of the harm that this conduct causes to the plaintiff.

33

H. Morgan v. High Penn Oil (731) 1. Substantial non-trespassory invasion of use and enjoyment of land that is caused a. By negligent, reckless, or ultrahazardous activities, or b. By activities that are intentional and unreasonable. i. Intentional means acting for the purpose of causing the invasion, or knowing that it is resulting or is substantially certain to result from the conduct in question. 2. Rule: An intentional invasion occurs when the person knows that the nuisance is resulting from his conduct, regardless of the care or skill exercised to prevent the injury. 3. To allow DF's to continue their use of an oil refinery to the extent that it is would present the threat of an irreparable injury to PL's and under this standard both temporary damages and a permanent injunction are appropriate. I. Estancias Dallas Corp. v. Schultz (739) When Party Can Seek Injunction for Noise 1. Rule: The trial court did not abuse its discretion in balancing the equities in favor of the Plaintiff and granting the injunction. Even when there is a jury finding of a nuisance, there should be a balancing of the equities in order to determine if an injunction should be granted. The court will consider any injury, which may result to the Defendant and the public by granting the injunction, as well as the injury to be sustained by the Plaintiff if the injunction is denied. J. Boomer v. Atlantic Cement Co. (743) Balancing the Equities 1. When does it make sense to award damages instead of an injunction? 2. Rule: Where a nuisance is of such a permanent and unabatable character that a single recovery can be had, including the past and future damages resulting there from, there can be but one recovery. Whenever the damage resulting from a nuisance is found not unsubstantial an injunction will not follow and monetary damages will be awarded K. Spur Industries Inc. (750) When a Person Comes to the Nuisance 1. What is the proper remedy when someone comes to the nuisance? 2. Rule: To be a public nuisance, the activity has to be one that must affect a considerable number of people or an entire community or neighborhood. To be a private nuisance, it must affect a single individual or a definite small number of persons in the enjoyment of private rights not common to the public. 3. Rule: now, coming to the nuisance is just one factor in determining reasonableness. 4. Reasoning: a. With respect to indemnity, if a residential owner knowingly came into an area reserved for industrial or agricultural endeavors, he may not be entitled to relief. 5. Remedies for nuisance: a. Injunction b. Damages c. Deny all relief d. Enjoin but also have damages at same time for coming to the nuisance i. Coming to the nuisance just affects the amount of remedy but it is not a way for the defense to get rid of the suit. e. Remedy for private nuisance: i. Traditional injunction against offending conduct ii. Balancing the equities most importantly economic impact on parties are factored and injunction will be granted if the resulting benefit to plaintiff is greater than resulting damage to defendant. Otherwise plaintiff receives compensatory damages. L. Policy

34

1. A noisy air conditioner is not unreasonable 2. A public nuisance can be dangerous to public health, unless it stifles the market. M. *Suggested Approach for Nuisance Questions 1. Is there a nuisance? a. Private b. Public 2. Is an injunction appropriate? a. Balance the equities 3. Should the complaining party pay damages to offset the injunction? a. Coming to the nuisance

VI.

LAW OF SERVITUDES (EASEMENTS) A. Servitudes private agreements regarding at least 2 parcels of land, usually to increase the value of one parcel B. Effects: 1. One parcel is the burdened parcel 2. One parcel is the benefited parcel C. Five types of servitudes: 1. Easement 2. Negative easement 3. Profit 4. Covenant 5. Equitable Servitude D. Easements 1. Easements are a GRANT of the right to enter someones land. 2. Type types of easements: a. Appurtenant (2 pieces of property) DEFAULT when in doubt i. Right goes to the owner of the land that the easement benefits ii. Moves with the land/stays with the land b. In gross (1 piece of property and a person) i. Right goes to some person without regard to ownership of land ii. Courts dont prefer this because it might tie up the property for awhile, making it unmarketable iii. Stays with the person and does not stay with the land. 3. Servient tenement the piece of land doing all the service 4. Dominant tenement the piece of land getting all the benefits 5. Creation of Easements (Also called right of ways) a. P.I.N.E. (4 ways to create them) i. Prescription (adverse possession) ii. Implication iii. Necessity iv. Express 6. Willard v. First Church of Christ, Scientist (768) Express Easement a. Rule: A grantor may in a deed to real property, reserve an interest in that property for third parties b. Reasoning

35

The court abandoned the old common law rule of rejecting conveyances that vest interests in third parties and held that in the case, such a reservation vests the interest in the third party. ii. In order to determine whether a court should apply the old common law rule to grants made prior to the courts decision, a balancing of equitable and policy considerations must occur. The court should examine the injustice of refusing to give effect to the grantors intent versus the result of failing to give effect to an individuals reliance on the old common law rule and policy against disturbing settled titles. 7. License is different from an easement as it is not an interest in the land and is revocable. a. License can become an easement if you couple it with some sort of interest that cant be revoked. 8. Holbrooke v. Taylor (774) Estoppel in Changing a License to an Easement a. Holding: The use of the roadway with the consent of the Appellants, general improvements to the road and construction of the house on the land, creates a license by estoppel and cannot be revoked. Where a license is not a bare right of entry, but includes the right to erect structures and acquire an interest in the land in the nature of an easement by the construction of improvements, the licensor may not revoke the license after the licensee has erected improvements at considerable expense. b. Reasoning i. The license was changed into easement by estoppel. There was money involved and the parties knew about the improvements, therefore creating the estoppel. ii. If you dont want a license to turn into an easement, then you have to actively do something. iii. Policy: FAIRNESS. a. When it is unfair to revoke now, the license has become an easement. 9. Van Sandt v. Royster (779) Implied Easements a. There are two types of implied easements: i. Quasi-easement ii. Easement by necessity b. For an implied easement, the use must exist at the time of conveyance by a common owner and must be apparent (NOTICE!!!) and have some kind of necessity. i. Implied grant in favor of grantee/dominant tenement a. Owner keeps the service piece. ii. Implied reservation in favor of grantor/dominant tenement a. Owner gets the dominant tenement iii. Necessity factors test (p.783) c. Held. An apparent easement existed. An easement need not be visible to be apparent. Appliances connected with and leading to the property were obvious adaptations of the property that led to a sewer. The Plaintiff purchased the property upon careful inspection and knowledge that the property had modern plumbing. Plaintiff was thus charged with notice of the sewer. An easement by implication was created. d. Reasoning:

i.

36

10.

11.

12.

13.

The easement was necessary for the comfortable enjoyment of the grantors property (Bailey, the common owner, installed the plumbing for the benefit of all three lots). If the land cannot be used without disproportionate effort and expense an easement may still be implied in favor of the grantor or grantee on the basis of necessity alone. The original purchaser was aware of the sewer and thus there were reasonable expectations concerning the prior existing use. Easement by Necessity a. There must be common ownership before the parcel is split. b. The split results in one parcel being landlocked (exists at time of split). i. Strict necessity for ingress and egress (I cannot get to my property without the easement) ii. Lasts for as long as necessity lasts. Easement by Prescription a. This is just like adverse possession minus exclusivity i. Open and notorious use ii. Continuous (uninterrupted) for statutory period a. Does not allow the tacking that adverse possession allows. 1. Once interrupted, the clock starts over again iii. Adverse use b. Even the public can gain an easement by prescription, beach access. Brown v. Voss (820) Exception to the Rule that an Easement Only Serve the Dominant Tenement a. Held. Based on the equities, Plaintiffs would not be enjoined from using the easement to access parcel C, although it was a technical misuse of the easement which by express grant only to gave access the residence on parcel B. b. Reasoning: i. The trial court found that there was no increase in burden on the servient estate since it was being used for the same purpose, and the Plaintiffs acted reasonably in the development of the property, the trial court acted within its discretion to deny the injunction, even though it was technically a misuse of the easement to access parcel B expressly ii. Most court says you can change the scope of the easement (widen it/change the grade) if you can reasonably prove that there is a necessity for it Preseault v. United States (831) Rails to Trails a. Held. Under Vermont property law, the estate acquired by a railway is no more than is needed for the railroads limited purpose and that typically means an easement not a fee simple estate. Since the easements are limited as a matter of law to railroad purposes, the Court could not find that the scope of easement would encompass a public recreational trail b. Reasoning i. There was an easement. The railroad should never ask for more than their ability to use the land. When the easement was created, they could never have imagined that the railroad would go away. ii. Simple non-use does not extinguish an easement, something more is needed such as conduct by the owner manifesting a present intent to relinquish the easement or a purpose inconsistent with future existence.

i.

37

iii. However, removal of the tracks and equipment was inconsistent with future existence and no attempts were made to reconstruct. The limited collection of licensing fees for crossing was not enough to defeat the abandonment. 14. 7 Ways to End a Easement: a. Abandonment b. Release/agreement c. Expiration d. Merger e. Estoppel f. Condemnation g. Prescription E. Negative Easements right of dominant tenement to stop the servient tenement from doing something on the servient tenement. 1. Classic 4 types: a. Blocking windows b. Interrupting air flow in a defined channel c. Removing building support d. Interfering with flow of water in an artificial stream 2. American addition types: a. Conservation b. Faade preservation c. Primary residence F. Covenants 1. A covenant is a promise regarding use of land (like a contract). 2. There is a burden (land doing/not doing something) 3. There is a benefit (land that gains) 4. Burden Requirements a. Written promise b. Touch and concern the land (related to land) c. Intent for covenant to run with land d. Privity i. Two Types of Privity: a. Horizontal Privity 1. Goes between the promisor and promise a. Landlord/Tenant b. Grantor/Grantee 2. Some courts do not require this 3. Some courts require land be granted from common owner. b. Vertical Privity 1. Goes between the original promisor/promise and a successor 2. Successor must get the entire estate. 3. Successor must have notice of covenant a. Actual, inquiry, record. 5. Benefit Requirements a. Written promise b. Touch and concern the land (related to land)

38

c. Intent for covenant to run with land d. Vertical privity 6. Remedy: Damages (remedy at law) is the only one remedy that someone can seek if a covenant is broken. G. Equitable Servitudes 1. Equitable servitude is a promise regarding use of land like a covenant. 2. There is a burden and benefit 3. Guiding principle: equitable enforcement against one with notice. 4. Burden Requirements a. Written promise i. Exception coming building scheme b. Touch and concern the land (related to land) c. Intent for covenant to run with land d. Notice 5. Benefit Requirements a. Written promise b. Touch and concern the land c. Intent for covenant to run with land 6. Remedy: Injunction (equitable remedy) is the only remedy that someone can seek if an equitable servitude is broken. 7. Tulk v. Moxhay (854) Growth of Equitable Servitudes in English Common Law a. Rule: Defendant must comply with the covenant, because he had notice of the covenant when he purchased the land. b. Reasoning i. Even though the covenant wasnt in the deed, the defendant had notice. ii. If the Defendant were allowed to ignore the covenant entered into between Plaintiff and Defendants predecessor in title then the result would be unfair, because an original purchaser (with restriction) could sell the land the next day for a higher price (without restriction) iii. So long as the Defendant, or any person purchasing with notice of a restriction, purchases the land with notice of a restriction, then the restriction will be considered an equity, which attached to the property. 8. Sanborn v. McLean (859) - Exception to Writing Requirement for Equitable Servitudes: A Common Building Scheme a. Rule: A reciprocal negative easement is attached to all lands sold in a common development scheme, and even though a restriction is outside of the direct chain of title, subsequent buyers will be deemed to have constructive notice because of their duty to check the title of neighboring lots b. Once a subdivision plat is filed and one lot sold with restrictions, all subsequent purchasers in the subdivision buy at the risk of the same restrictions c. Reasoning i. The neighborhood is residential, and the deeds sold by the developer contained residential restrictions. This proves that the developer had a common development plan. Because there was a common plan when the lots were sold, the remaining land became subject to a reciprocal negative easement, so the owner cannot do anything that is forbidden to the owner of the lot sold ii. Defendant had constructive notice of the negative easement because the nature of the residential neighborhood should have put him on notice

39

9.

10.

11.

12.

that a reciprocal negative easement may have existed. He was under a duty to inquire about restrictions on the neighborhood. Had he done so, he would have found the record limiting the lots to residences Neponsit Property Owners Associate, Inc. (864) HOA Requiring Dues a. The covenant essentially provided that a $4 fee would be collected annually upon lots of a certain size. The charge collected was to be devoted to maintenance of roads, paths, parks and other public purposes b. Rule: A covenant must touch or concern the land. Privity exists in substance if not in form for an association that is comprised of property owners to advance their common interests c. Reasoning i. The Defendant and other property owners enjoy the benefits of maintenance of public places (including land not conveyed by the title) by the payment of the charge. The court found any distinction between this benefit and touching or concerning the land would be one of form not substance 7 (10?) Ways to terminate a Covenant/Equitable servitude a. Merger b. Release c. Acquiescence d. Abandonment i. Perfect title cannot be abandoned. e. Unclean hands f. Laches i. "unreasonable delay pursuing a right or claim...in a way that prejudices the [opposing] party" ii. Equitable flip side of statute of limitations g. Estoppel Western Land Co. v. Truskolaski (882) Effect of Changing Conditions on Enforcement of a Covenant a. Held. Substantial evidence indicated the covenants continued to have real and substantial value to the residents of the subdivision and that there was not sufficient evidence that the object and purpose of the restrictions was thwarted. b. Reasoning i. Even if the property is more valuable for commercial purposes, substantial benefits still go to the restricted area by enforcing the restriction ii. An ordinance could not override the privately-placed restrictions and a zoning change would not invalidate these restrictions iii. Any other sporadic violations of the restrictions were distant and did not show a general consensus of the property owners to abandon or waive the restrictions c. Rick v. West (887) i. Rule: Only upon evidence of a substantial change in the neighborhood that would render the defendants enforcement of the covenant unconscionable or oppressive. The restriction is not outmoded by a change in the character of the neighborhood and continues to provide a real benefit to the defendant Pocono Springs Civic Assoc., Inc. v. MacKenzie (892) Abandonment of Title

40

Rule: To abandon a property you must relinquish all right title and claim to possession with intention to terminate ownership. Other actions to disassociate from the land will not be enough b. Reasoning. Under Pennsylvania law, real property could not be abandoned unless all right, title, claim and possession was relinquished. Since the MacKenzies continued to hold perfect title and fee simple in the property it was not abandoned as a matter of law. Therefore, the MacKenzies owed the fees 13. Common Interest Communities a. They are an obligation that binds the owners of individual lots/units to contribute to the support of common property or facilities (regardless of use). b. Three types: i. Homeowners Association ii. Condominiums a. Each unit is owned separately, but common areas (hallways, land, exterior walls) are owned by the unit owners as tenants in common. 1. Residential or commercial use 2. Each unit pays dues to maintain the common facilities iii. Cooperatives a. Owners actually own shares in corporation. Corporation owns the building (really only in NYC) 1. The corp. carries the mortgage and insurance 2. The stock owners pay for a long-term lease and are the tenants 3. The stock owners elect a board of directors from the tenants. 14. Nahrstedt v. Lakeside Village (900) Standard that Applies to Governing Boards Restrictions a. Rule: Agreed-to use restrictions will be enforced unless it is shown that they are unreasonable b. Reasoning i. Reasonableness should be determined by reference to the common interest of the development as a whole and not the objecting owner. Since the pet restriction was rationally related to health, safety, sanitation and noise concerns of the development as a whole it was reasonable and must be enforced. ii. Dissent: He felt the analysis should focus on the burden on the use of land (and on the objecting owner) and not the health and happiness of the development which realistically would be unaffected by this particular use 15. 40 West 67th Street Corp. v. Pullman (913) Business Judgment Rule Application a. In the context of cooperative dwellings, the business judgment rule provides that a court should defer to a cooperative boards determination so long as the board acts for the purposes of the cooperative, within the scope of its authority and in good faith.

a.

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VII.

ZONING A. Zoning During most of the century, zoning referred to the form of land use regulating that emerged in the 1920sthe division of communities into geographical districts or zones where particular types of land use were allowed, together with restrictions on the height, bulk, and density of buildings in the zone. Today zoning is often used to mean all forms of government land use regulation. B. The Need for Zoning 1. Nuisance law has limits a. Gives damages or injunction b. May not cover all hazardous activities 2. Covenants have limits a. Use only in new subdivisions and other developments of large plots of land 3. Modern City Planning a. Industrialization caused smoke, odors, noise, disease, filth, and overcrowding. b. Protection of single-family home c. Low-rise development d. Rational planning occurred to end chaotic cities 4. Utilitarian Response a. Zoning is best understood as a utilitarian response to these problems of industrialization. It restricts the rights of private landowners in order to promote the health, safety, and welfare of the general public. C. Fathers of Modern Planning and Zoning: 1. Howard Garden City concept 2. Burham City Beautiful movement 3. LeCorbusier the City of Tomorrow (mix of both of above) D. Village of Euclid v. Ambler Realty Co. (930) Constitutionality of Zoning 1. Rule: The ordinance must find its justification in some aspect of the police power, which is asserted for the public welfare. The court used the doctrine of nuisance to determine whether the zoning exclusions were proper. Court decided it was a reasonable exercise of police power. E. Variances in Zoning permission to depart from the literal requirements of a zoning law (way to achieve flexibility) 1. Two types: a. Area variance: allowing a compatible use to the zoning ordinance but not an exact fit (like a technical violation) i. Have to meet 2 elements: a. Undue hardship (not self-imposed) b. Variance will not diminish neighborhood values b. Use variance: allowing a change (not a compatible use) from what is required under the zoning i. Requirement is to prove special circumstances a. This is a very hard standard b. F. Limits of Zoning 1. General rule about how far zoning ordinances can go. If you zone property into essentially total dis-utility it may be a taking; and thus the city may have to pay compensation. 2. Non-Conforming Use

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Zoning law goes into effect and now the use of the property breaks that law (the use did not originally violate any zoning law). b. To enforce the new zoning law could amount to a taking not desirable by the authorities. c. Many states have amortization statutes to avoid this takings result. i. Like a phase-out ii. Ex. Give the non-conforming use a deadline to stop the use so the owner can spread out the loss over time. G. Kelo v. City of New London - (1065) - Public Use 1. Takings are not allowed if certain requirements are met. 2. Held. Majority held that the city's taking of private property to sell for private development qualified as a "public use" within the meaning of the takings clause 3. Reasoning a. Te city was not taking the land simply to benefit a certain group of private individuals, but was following an economic development plan. Such justifications for land takings, the majority argued, should be given deference. b. The takings here qualified as "public use" despite the fact that the land was not going to be used by the public. The Fifth Amendment did not require "literal" public use, the majority said, but the "broader and more natural interpretation of public use as 'public purpose.'" H. Takings 1. Regulatory taking - refers to a situation in which a government regulates a property to such a degree that the regulation effectively amounts to an exercise of the government's eminent domain power without actually divesting the property's owner of title to the property. 2. Taking clause of the 5th Amendment nor shall private property be taken for public use, without just compensation. 3. There can be partial compensations for even temporary takings. 4. 4 tests overall. 5. Balancing Test: 3 relevant factors are a. The economic impact of the regulation on the claimant, b. The extent to which the regulation interferes with the claimants distinct investment-backed expectations, and c. The character of the governmental action 6. Categorical Test (Penn Central standard): Taking will be found: a. If government authorized a permanent physical occupation of land b. If regulation causes the loss of all economically beneficial or productive use of land, unless justified by background principles if property or nuisance law. c. If government demands an exaction that either lacks an essential nexus with a legitimate state interest or lacks rough proportionality to the impacts of the proposed project.

a.

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Fee Simple Absolute and Life Estate Problems

1. O, owner of Blackacre, has two children: A and B. Subsequently B dies testate, devising all his property to W, his wife. B is survived by three children: B1, B2, and B3. A has one child: A1. Who owns Blackacre when O dies intestate? Answer: A has 1/2 interest. B1 has 1/6 interest. B2 has 1/6 interest. B3 has 1/6 interest. Analysis: W gets nothing b/c B died before O, so she never HAD the property. Therefore, the wife of the "main person" gets something--> the daugther in zilch! 2. In 1600 O conveys Blackacre to A for life, then to B forever. What estates do A and B have? Answer: A has a life estate. B has a life estate. Analysis: words for FSA. Remember the magic words in 1600 means that you need the magic

law gets

3. What if A dies and then B dies, who owns Blackacre? Answer: Reverts back to O. If O is dead, then to his heirs. 4. In 2002 (in a state following the modern view) O conveys Blackacre to A for life, then to B forever. What estates do A and B have? Answer: A has a life estate. B has a remainder in fee simple. (later discuss which type of remainder) Analysis: Remember the magic words in 2002 so you would use the modern view that if in doubt then FSA is conveyed. Therefore, forever will be construed to be FSA. Extra: view. Remember that some states require the magic wordsso only a majority

5. In 1600 O conveys Whiteacre to A for life, remainder to the heirs of B. B is alive in 1600 but dies (without a will) soon thereafter. Bs heir is C. Subsequently C dies. What estate does C (and now his heirs) have? Answer: C has a fee simple absolute. It is OK that heirs is a plural word yet the reality is that there exists just one heir. Extra: A has a life estate.

6. O conveys Greenacre to A and her heirs. As only child, B, is a spendthrift and runs up large, unpaid bills. Bs creditors can attach Bs property to satisfy their claims. Does B have an interest in Greenacre that is reachable by Bs creditors? Answer: No. B has no possessory interest, only an expectancy. Analysis: The heirs do not actually have any interest if A is alive.

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Extra:

A has FSA

7. O conveys Greenacre to A and her heirs. A wishes to sell Greenacre and use the proceeds to take a trip around the world. Can B prevent A from doing this? Answer: No. B has no possessory interest, only an expectancy. 8. O conveys Blackacre to A and her heirs. If A dies intestate without issue, will Blackacre escheat to the state? Answer: Not necessarily, as the court will look for other heirs, such as parents, cousins, etc. The magic word was issue. Extra: A has a FSA 9. O conveys Blackacre to A for life, remainder to B and her heirs. B then dies intestate without heirs. A then dies. Who owns Blackacre? Answer: The property escheats to the state. The magic word was heirs. Lesson learned: read questions carefully! Extra: A has life estate B has FSA

HAVE TO REMEMBER: IF O EVER GIVES A FSA THEN O CAN NEVER GET THE PROPERTY BACK

Estates in Land Questions 1. O conveys Blackacre to A and the heirs of her body, then to C. What are the parties interests under the Restatement/modern view? Answer: A has a FSA C has nothing O has nothing Analysis: convey a FSA. Extra: O does not have a reverter b/c you cannot get anything back after you

If old school :

A has a feetail C has a life estate b/c O did not use the magic words O has possibility of reverter

2. O conveys Blackacre to A for life, then to B for life. A conveys her interest to C, and A is still alive. B sues C for the property. Who wins? Answer: C wins. He has a life estate pur autre vie. B will have a right to the property when A dies. Extra: A has a life estate B has a life estate O reversion

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3. O conveys Blackacre to A so she can operate a daycare. A moves in and opens a tax preparation office. O sues A for the property. Who wins? Answer: A wins. The statement in the conveyance is one of motive, which creates a fee simple absolute. Analysis: There was no magic language that is required to create a FFSCS on the provided subject to but if. condition that

4. O conveys Blackacre to A so long as she uses the property as a daycare, then to B so long as she uses the property as a daycare. A no longer wants to operate a daycare, so she gives up the property. B moves in, but she does not want to operate a daycare and does nothing. Who owns the property? Answer: - O automatically owns the property because he gave a future interest in FSD to B. - A has a FSSEI. - B has a vested remainder in FSD - O has a possibility of reverter.

5. O conveys Blackacre to A for life, then to B and his heirs. What interest does B currently have? (A is still alive) Answer: B has a vested remainder in FSA (talk about this later) Extra: A has a life estate O has nothing

6. O conveys Blackacre to A on the condition that she uses the property as a daycare, then to B on the condition that she uses the property as a daycare. A no longer wants to operate a daycare, so she gives up the property. B moves in, but she does not want to operate a daycare and does nothing. Who owns the property? Answer: A has a FSSEI B has a FSSCS O has the right of entry Analysis: O has a right of entry b/c O gave away FSSCS A has a FSSEI b/c of Bs 3rd party interst B has a FSSCS b/c of the magic words on the condition

7. O conveys Blackacre to A forever on the condition that she never uses the property for a commercial business. The statute for the grantor (O) to file an action is 3 years from the event triggering the right of entry. In 2005 A opens a shop on the property. Now it is 2010, and O sues for the property. Who wins? Answer: A wins. The conveyance was a FSSCS, and the statute of limitations has run. Analysis: Remember that O only has a right of entry and runs out after the statute of limitations. A has a FSSCS b/c of the magic words on the condition. 8. O conveys Blackacre to A forever so long as she never uses the property for a commercial business. The statute for a grantor (O) to file an action is 3 years from the event triggering the right of entry. In 2005 A opens a shop on the property. Now it is 2010, and O sues for the property. Who wins? Answer: O wins. The conveyance is a FSD, so the statute does not apply; O automatically got the property in 2005 (although O failed to ask for it then). Analysis: A gets a FSD b/c of the magic words so long as.

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9. O conveys Blackacre to A for life, then to B and his heirs. B conveys his interest to C. What interest does C have, if anything, under the majority view? Answer: Extra: C has a vested remainder in FSA (talk about later) A has a life estate B has a remainder in FSA C has a remainder in FSA O has nothing (b/c conveyed FSA)

10. Name the interests in the following conveyance: To A for life, then to B if B has passed the bar exam, then to C and her heirs. Answer: A has a life estate B has a remainder in FSA (contingentlater) C has a remainder in FSA (contingentlater) O has nothing b/c conveyed FSA

Future Interest Questions 1. O conveys Blackacre to A for life, then to B if B gives A a proper funeral. What interest does B have? Answer: B has a contingent remainder because if he gives A a proper funeral, he is not divesting anyones estate (the estate ended naturally with As death). Analysis: Interest is not sure to vest at the end of prior estate because there is a condition to be met. Extra: A has a life estate O has a reversion if the contingency fails

2. O conveys to A for life, and in the event of As death, to B and her heirs. Is Bs remainder vested or contingent? If B subsequently conveys her interest back to O, what interest does O have? Answer: B has a vested remainder (death is the natural way a life estate ends). When B conveys his interest back to O, he can only convey what he has (or less): a vested remainder. Extra: A has a life estate

3. O conveys to A for life, then to B for life, then to C and her heirs. What interests are created? Answer: A has a life estate B has a vested remainder in life estate C has a vested remainder in FSA O has nothing b/c O conveyed a FSA 4. O conveys to A for life, then to B for life, then to C and her heirs if C survives A and B. What interests are created? Answer: A has a life estate B has s vested remainder in life estate C has a contingent remainder in FSA (C must survive) O has reversion if C never gets it even though O possible conveyed a FSA. 5. O conveys to A for life, then to As children who shall reach 21. As oldest child, B, is 17. Is the remainder vested or contingent? Answer: The remainder is contingent b/c the child has to reach 21, no assurance he/she will reach that age.

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Extra:

A has a life estate O has possibility of reversion

6. O conveys to A for life, then to As children who shall reach 21. As oldest child, B, is now 21. Is the remainder vested or contingent? Answer: Vested remainder but it is also subject to open to B b/c A may have more children (vested because the condition is gone).

Estates and Future Interests Review O wants to draft an instrument of gift. O tells you he wants to convey Blackacre to his son A for life, and upon As death O wants Blackacre to go to As children if any are alive or, if none of them are alive, to Os daughter B. A is alive and has no children at the time of conveyance. 1. To A for life, then to As children and their heirs, but if at As death he is not survived by any children, then to B and her heirs. What is the state of the title? (no children born yet) Answer: A has a life estate Children of A has contingent remainder in FSA (b/c no children born yet) B has a contingent remainder in FSA O had nothing (modern law) Analysis: No executor interest b/c the children do not have a vested interest yet. 2. Two years after the conveyance, twins C and D are born to A. What is the state of the title? Answer: A has a life estate C and D have a vested remainder in FSA subject to divestment B has a contingent remainder in FSA or an executory interest in FSA O has nothing (modern law) **only example of executor interest Analysis Identify a 3rd party, cannot revert back to grantor and previous estate can be cut short or divested. Identify if there is someone who HAS the property who is next in line. Remember the lines. 3. To A for life, then to such of As children as survive him, but if none of As children survives him, to B and her heirs. At the time of the conveyance, A is alive and has two children, C and D. What is the state of the title? Answer: A has a life estate C and D have a contingent FSA (they have to survive) B contingent FSA why not executor interest? (see below) O had nothing (modern) Analysis: No executor interest if there is contingent remainder. 4. To A for life, then to B and her heirs, but if A is survived at his death by any children, then to such surviving children and their heirs. At the time of the conveyance, A is alive and has two children, C and D. What is the state of the title? Answer: A has a life estate B has a vested remainder in FSA subject to divestment C and D have an executory interest in FSA Analysis: Remember to do everything within the commas so you do not confuse vested and contingent, etc.

Questions

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On October 1, L leases Whiteacre to T for one year, beginning October 1. On the following September 30, T moves out without giving L any notice. What are Ls rights? o To answer these questions, first identify the type of tenancy. o Here, the tenancy is a term of years. No notice is required for T to leave. So, L has no rights. On October 1, L leases Whiteacre to T from year to year, beginning October 1. On the following September 30, T moves out without giving L any notice. What are Ls rights? o The tenancy is a periodic tenancy. At common law, a periodic tenancy of year-to-year required a 6-month notice. Many statutes now require only 30 days. Thus, because T did not give notice, L could force T to be bound for another year. On October 1, L leases Whiteacre to T for for an annual rent of $24,000 payable $2,000 per month, beginning October 1. On the following September 30, T moves out without giving L any notice. What are Ls rights? o See answer to #1b. This is a periodic tenancy, so L has the right to bind T to another term. What is the term? o Some jurisdictions look to how the rent is reserved (here, as a yearly amount) and say a yearto-year tenancy. o Other jurisdictions look to how the rent is paid (here, monthly) and say a month-to-month tenancy.

Assume the jurisdiction has no duty to mitigate upon abandonment. What does the Tenant owe to the Landlord, if anything, if the Landlord relets the premises for less than the fair rental value and for less than Tenants original rent? o The Tenant owes the difference between the original rent and the FRV, plus any costs the Landlord incurred in getting a new Tenant. Assume the jurisdiction has no duty to mitigate upon abandonment. What does the Tenant owe to the Landlord, if anything, if the Landlord relets the premises for more than Tenants original rent? o The Tenant does not owe the Landlord anything. Courts are split as to whether the Tenant has a claim to the excess rent.

Assume T had a term of years and vacated prior to the end of the term. T stopped paying rent, and in a subsequent suit by L, asserted a defense of constructive eviction/breach of covenant of quiet enjoyment o Facts: L fails to control excessive noise of partying neighbors Modern trend is that this is constructive eviction. L has the duty to control other tenants. Why? o Facts: L building is site of criminal activity. He puts on deadbolts and hired guards, but the problem continues. What results? There is no constructive eviction. Rule only requires L to act reasonably, which he did. T is a gyno who practice includes elective abortions. T rents office space from L, who promises to provide security. o Yes because L promised to provide security in the lease and did not provide it. This may not be the case if the lease read differently (L has no duty to protect against 3 rd parties) If T believes that L has breached the covenant of quiet enjoyment, can T ask the court to determine this? So, rather than vacate, the T would ask for declaratory judgment that L breached the covenant in a substantial way and T has 30 days to vacate to avoid further rent.

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Some courts do this. It is very expensive and time consuming, however. Also opens floodgates. So a T should have a very good reason for doing this (ex. Unique business).

How do we know if something is a material defect? o Statutes answer this question in most statutes. o Disclosure forms How do stigma statutes help a seller? Do as is clauses protect a seller?

Recording Act Problems #1 o What kind of recording statute is the following? A conveyance of an interest in real estate shall not be valid as against any person who first records his subsequent interest, pays substantial value, and takes w/o notice of the prior interest, unless the interest in real estate is recorded with the registry of deeds? Race-notice (says notice and says first records) A sells his land to B. B goes on vacation and does not record. Then, while B is out of town, A sells land to C. C does not record. B returns and records. Two weeks later, C records and claims title. Who wins in race jurisdiction? A notice jurisdiction? A racenotice jurisdiction? Race B wins Notice C wins (Because there is an incentive system for buyers to rush to the courthouse) Race-Notice B wins O to A (A does not record) A to B B records O to Z (Z has no notice of As deed) Z records Who wins b/w B and Z? o This problem shows what happens if there is a wild deed a conveyance that was not recorded. O to A (A does not record)A records B records B conveys to X Who wins b/w A and X? o Race: A o Notice: A (although some jurisdictions differ) o Race-Notice: A

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