PROPERTY
Study Guide
First Acquisition
01
Conquest & Discovery
Discovery
"First in time, first in right"
-
Discovery by a subject of the Sovereign
-
Consummated possession
-
AND International Legitimacy
​
Note
-
Indigenous persons were treated as mere occupants rather than true owners.
-
Applied as between the Colonizing European Nations.
​
Conquest
"Might makes right"
-
Annexation
-
Subjugation
-
AND International Legitimacy
​
​Note
-
The court of the conqueror cannot deny its own title.
-
Applied as between the Colonizing European Nations and displaced indigenous persons.
-
Now (arguably) illegitimate under international law.
​
Examples
​
Agreement/Purchase
"Let's make a deal"
-
Agreement between one or more Sovereigns
-
AND International Legitimacy
​
Examples
​
Tracing Chain of Title
02
Capture
​​
Wild Animals
-
First possession creates title
-
Animal in a trap or net creates constructive possession
-
Mere pursuit insufficient, unless the animal is mortally wounded
Animus revertendi
-
Loss of Title
-
Upon a wild animal’s escape
-
Unless it periodically returns
-
OR If it is branded
-
AND the owner uses all possible effort to recapture
-
​
Note
-
A trespassing hunter forfeits title to the landowner
-
A person who violates a hunting statute forfeits title to the Sovereign
​
Ratione Soli
-
Owner of land is in constructive possession
-
Of all natural resources
-
On, over, and under the surface (cujus est solum, ejus est usque ad coelum ad infernos)
​
Note
-
Mostly rejected by American Courts
​
Accessions
1. Was there an addition or mixing of value?
-
Addition of value to a chattel
-
By the expenditure of labor;
-
OR the addition of new material (capital)
-
-
AND the addition cannot be separated from the original
​
2. Was the trespass innocent or intentional?
-
If innocent
-
Owner can sue for conversion or replevin
-
UNLESS
-
Complete change or great increase in value of chattel
-
Accession is separable from original
-
Other equitable considerations
-
-
-
-
If intentional
-
Owner can sue for conversion or replevin
-
Amount of change or great increase in value of chattel irrelevant
-
-
Note
-
Generally, the trespasser recovers nothing
​
3. Sale of improved items
-
A person who lacks title to goods cannot pass title to goods, even to a bona fide purchaser.
-
The true owner may maintain an action for conversion against a person who innocently purchased the item.
4. Damages from innocent purchaser
-
Some courts: damages based on the fair market value (FMV) at the time of purchase
-
Some courts: award depends on intent
-
If innocent
-
Innocent purchaser liable for the original value only
-
-
If intentional
-
Some courts: Innocent purchaser liable for the original value only
-
Some courts: Innocent purchaser liable for the increased value
-
-
​
5. Confusion
-
If the accession is separable from the original, the Court can order separation and return of the accession to its contributor
-
If however, the accession is inseparable, the intent of the accession matters
-
If the accession was innocent, the Court will award a pro rata share to the accessioner;​
-
If the accession was intentionally done in bad faith, the Court will not award title to a thief
-
​
Note
-
Accessions are based on Locke's Labor Theory of Property
-
According to Locke, we have a natural right in our own personhood​
-
When we mix our labor into unclaimed property held in the commons, we homestead that property and make it our own
-
The main counterargument to Locke's theory is that valueless labor should not create a property interest
-
​
The Commons
-
Cultural and natural resources that belong to the public, rather than a private individual
​
Note
-
The tragedy of the commons: if resources held in common can be capture through first possession, this incentivizes a race to exploit the resources, often leading to social, economic, and environmental externalities.
​
Additional Resources
The Tragedy of the Commons Explained in One Minute, One Minute Economics, YouTube.com
What is the Tragedy of the Commons, Harvard Business School Online, YouTube.com
​​
​
Oil and Gas
-
First possession creates title
​
Water
-
Watercourses
-
​​Riparian (Eastern states)
-
May not materially dimmish quantity, quality, or velocity.
-
Water belongs to the landowners adjacent to the water.
-
-
Prior appropriation (Western states)
-
First appropriation (first in time, first in right)
-
-
-
Ground Water
-
Jurisdictional Approaches
-
English rule: first appropriation (first in time, first in right)
-
American rule: reasonable use
-
Joint tenancy
-
Restatement: apply law of nuisance
-
Statutory allocation: e.g., the Colorado Water Compact
-
-
​​
Note
-
Natural trumps artificial uses (e.g. Household consumption v. Industry)
​
​Possession
-
​​Intent to possess
-
AND dominion and control​
​
Note​​: Possession can be either:
-
Actual (in fact)
-
OR Constructive (in law)
​
Relativity of Title​
-
Older title is superior to earlier, junior title
-
(i.e. First in time, first in right)
-
​
​Thieves
-
Title from a thief is void
03
Ownership
​​
The Bundle of Rights
-
Possession
-
Control
-
Enjoyment
-
Disposition
-
Exclusion
​
Trespass
-
An intentional, unprivileged, and nonconsensual encroachment on real or physical property
-
Possession by owner at time of encroachment
-
Lack of necessity
-
Clear and imminent danger​ outweighs other potential harm
-
Reasonable expectation of abatement
-
No legal alternatives
-
AND Legislature has not precluded the defense
-
-
AND not otherwise justified as a matter of public policy
​
Note
-
Actual damages not required. Jacque v. Steenburg Homes
-
The Sovereign cannot criminalize homelessness. Commonwealth v. Magadini
-
The Sovereign can limit or alter property rights without taking them under the Takings Clause of the Fifth Amendment.
-
Andrus v. Allard (limiting disposition or free alienation of protected bird feathers)
-
Commonwealth v. Magadini (limiting exclusion of homeless when necessary to protect human life)
-
Eyerman v. Mercantile ​Trust (limiting testamentary destruction of property)
-
Moore v. Regents (limiting alienation of body parts)
-
​
Public Trusts
-
Certain cultural and natural resources held in the commons belong to the public
-
Those resources are held from time immemorial in the public trust
-
Public Trust doctrine creates an easement for the public
​
Beaches (Matthews v. Bay Head Improvement Ass'n)
-
The land underwater and comprising the foreshore (wet sand) is held in the public trust
-
Private landowners can own portions of the backshore (dry sand)
-
That ownership is curtailed by the public's right of access to the backshore
-
Private landowners lose title to land that erodes into the ocean.
-
The Sovereign may restore title, but without express action the land reverts to the Public Trust
04
Creation I
(Intellectual Property)
​​
Tangible Property
-
Tangible property: real (land) and physical (chattel) property
-
Intangible property:​ non-physical assets
​
Economics of Property
-
Rivalrous property: ​one's possession or enjoyment prevents others from enjoying it
-
Excludable property: can be controlled by one person to the exclusion of
​
Examples
-
Land and chattels held in private ownership
-
Land and chattels held under Sovereign ownership to the exclusion of the public
​
-
Non-rivalrous property: ​one's possession or enjoyment does not prevent others from enjoying it
-
Non-excludable property: cannot be controlled by one person to the exclusion of others.
​​
Examples
-
Land and chattels held in the commons or in the public trust
-
Intellectual property
-
Digital assets
-
Financial assets
-
Privacy rights
-
Contractual rights
​
Misappropriation
-
Substantial investment of time, skill, or money by the plaintiff in developing some property;
-
Appropriation and use of that property at little or no cost by the defendant;
-
The appropriation and use done without authorization or consent from the plaintiff;
-
Proof of injury to the plaintiff due to the defendant’s action.
​
Note
-
Applies Locke's Labor Theory of Property to create a quasi-property right in the first publication of news stories under a theory of unfair competition. INS v. AP News (majority).
-
The quasi-property right measures the relationship of the competitors, not either party to the public. (Thus, neither has a right of exclusion to the detriment of the public).
-
Common law misappropriation is now heavy disfavored or abrogated in most jurisdictions.
​
Incentivizing Creative Works
-
​The law carves a delicate balance between overprotecting and underprotecting the creation of new intangible works.
-
Overprotection results in monopolization. Monopolization creates deadweight losses to the economy which ultimately harm the consuming public.
-
Underprotecting results in a lack of incentives to create works that advance the arts and sciences.
​
Privacy Rights
-
Intrusion upon seclusion
-
Public disclosures of private facts
-
False Light
-
Publicity
-
Uses another person's name or likeness;
-
Without their consent;
-
For their own benefit or the benefit of a third party;
-
AND injury.
-
​
Note
-
Does not require literal or actual appropriation of name or likeness, just enough to invoke the person's name or likeness. White v. Samsung Electronics.
-
Society should reward plaintiff's sweat of the brow in cultivating the celebrity.
05
Creation I
(Intellectual Property)
​​
Patents
Public Policy
-
Patents are a grant of a limited duration monopoly in exchange for public disclosure.
-
The monopoly incentivizes innovation, as without the monopoly:
-
The inventor could not exploit the first mover advantage of the idea.
-
Inventorship would be discouraged by free-riding.
-
-
This is counterbalanced by:
-
Full disclosure to the public.
-
Limitations on the types of ideas that may be taken from the public domain (i.e., the commons).
-
​
U.S. Const. Art I § 8 π 8 (“the Progress Clause”)
The Congress shall have the power…
To promote the Progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
​
U.S. Const. Art IV (“the Supremacy Clause")
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
​
Federal Patent Preemption: “[The Supreme Court’s] decisions have made clear that state regulation of intellectual property must yield to the extent that it clashes with the federal patent statute's balance between public right and private monopoly designed to promote certain creative activity.” – Bonito Boats, Inc. v. Thunder Craft Boats, Inc.
​
Patentability
-
Patentability: is it protectable patent subject matter? §101
-
Utility: does it offer some benefit to humans? §101
-
Novelty: is it not found in the prior art? §102
-
Nonobviousness: is it enough of an advancement? §103
-
AND Enablement: do the written disclosures allow the person having ordinary skill in the art (the “PHOSITA”) to reduce the patent to practice?
​
Patent Subject-Matter
35 U.S.C. § 101, the Patent Act
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
05
Creation II
(Intellectual Property)
Copyrights
Public Policy
-
Utilitarian: Copyrights are a grant of a limited duration monopoly designed to incentivize the creation and distribution of expressive works. (U.S.)
-
Personality: creation is an extension of the author’s being. Creates moral rights. (E.U.)
-
Labor Theory/"sweat of the brow": an artist mixes their mental labors into their creation, creating a property right. Rejected in Feist Publications, Inc. v. Rural Te. Serv. Co., 499 U.S. 340 (1991) ("the 1976 revisions to the Copyright Act leave no doubt that originality, not "sweat of the brow," is the touchstone of copyright protection. . . .").
​
U.S. Const. Art I § 8 π 8 (”the Progress Clause”)
The Congress shall have the power…
To promote the Progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
​
17 U.S.C. § 102, the Copyright Act
Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
​
Originality
-
Independent creation of the author;
-
A modicum of creativity;
-
A “spark in the mind of the inventor”
​
Works of Authorship – 17 U.S.C. 102
-
literary works;
-
musical works, including any accompanying words;
-
dramatic works, including any accompanying music;
-
pantomimes and choreographic works;
-
pictorial, graphic, and sculptural works;
-
motion pictures and other audiovisual works;
-
sound recordings;
-
AND architectural works.
​
Fixation – 17 U.S.C. 101
A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. . .
​
U.S. Const. Art IV ("the Supremacy Clause")
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
​
Federal Copyright Preemption – 17 U.S.C. § 301: “As long as a work fits within one of the general subject matter categories (of federal statutory copyrights), the bill prevents the states from protecting it even if it fails to achieve federal statutory copyright because it is too minimal or lacking in originality to qualify, or because it has fallen into the public domain." H.R. Rep. No. 1476, 94th Cong., 2d Sess. 51, 131 (1976).
​
The Idea-Expression Dichotomy
17 U.S.C. 102(b)
In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.
​
Copyright Infringement
-
Valid copyright
-
Defendant copied the work
-
Copying was an improper appropriation
-
Actual copying
-
OR Access
-
AND Substantial similarity
​
Fair Use
-
Purpose and Character;
-
Nature;
-
Substantiality of use in relation to the work as a whole;
-
AND Marketplace displacement
05
Creation II
(Intellectual Property)
Trademarks
Public Policy
-
Brands and branding, which trademark law protects, are an ancient commercial practice dating back to as early as 2000 BC.
-
Trademarks protect against a form of consumer fraud called consumer source identification confusion. This fraud creates deadweight losses.
-
Trademarks also help enforce standards of fair dealing and commercial morality.
-
Like Copyrights, Trademarks favor protecting the public, over enriching the right holder.
​
U.S. Const. Art I § 8 π 3 (“the Commerce Clause”)
The Congress shall have the power…
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
​
No Federal Trademark Preemption
-
Common law trademarks
-
State law trademarks (based on intrastate trade
​
Trademark Subject-Matter
15 U.S.C. §1127
The term “trademark” includes any word, name, symbol, or device, or any combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter,
to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
​
Common Law Trademarks
-
Distinctiveness
-
Non-functionality
-
AND Seniority of Use (first in time, first in right).
​
Abercrombie Spectrum
Protectable:
-
Arbitrary & Fanciful
-
Suggestive
-
Descriptive (requires acquired distinctiveness/secondary meaning*)
​
Not protectable:
-
Descriptive (mark lacks acquired distinctiveness/secondary meaning)
-
Generic (not protectable)
​
15 U.S.C. 1052(a) - Immoral Trademarks
No trademark [shall register if it]:
(a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. . .
​
Held unconstitutional on First Amendment Grounds. Matel v. Tam, 582 U.S. ____ (2017)
Secondary Acquisition
06
Finders
Bailments
-
Bailments: transfer possession but not title
-
Bailor: person who delivers the chattel
-
Bailee: person who receives the chattel
-
Voluntary Bailment: consensual delivery to bailee
-
Involuntary Bailment: nonconsensual delivery to bailee
​
Lost Property
-
Owner has
-
Accidentally and involuntarily parted with possession
-
AND Does not know where to find it
-
​
Mislaid Property
-
Owner has
-
Intentionally placed the property aside
-
AND Forgotten about it
-
​
Abandoned Property
-
Owner has
-
Voluntarily relinquished ownership
-
AND Had an intent to give up both title and possession
-
​
Finder of Lost v. Mislaid Property
-
English courts: no distinction, apply first in time, first in right
-
American courts
-
Mislaid property: usually goes to the owner of the locus in quo
-
Lost property: usually goes to the finder
-
Embedded in soil: owner of the locus in quo
-
Lying on the surface: finder
-
-
​
Trove
-
Trove: gold, silver, or currency that was lost in the distant past
-
English rule: Crown owns it
-
American rule: finder or owner of locus in quo takes (if finder is a trespasser)
06&07
Adverse Possession
Adverse Possession
-
Open, Visible and Notorious
-
Actual
-
Exclusive
-
Hostile and Under a Claim of Title or Right
-
AND Continuous for the Statutory Period
​
Public Policy
-
Avoid stale claims to land
-
Quiet title or correct title errors
-
Protect personal attachments to property
-
Utilitarian maximization of productive uses of resources and land
-
Utilitarian maximization of tax revenues to the Sovereign
​
Hostility
-
The objective standard: state of mind is irrelevant
-
Good-faith standard: “I thought I owned it”
-
Aggressive trespass standard: “I thought I didn’t own it, but I intended to make it mine.”
​
Color of Title
-
Claim is based on
-
A written instrument (i.e., a will or deed)
-
OR A judgment or decree that is defective and invalid
-
​
-
Majority rule: color of title is irrelevant for adverse possession
-
Minority rule: color of title is required
-
Minority rule: claims lacking color of title require additional steps, like paying taxes, giving notice to the County or making improvements to the land
​
Mistaken Boundaries
-
Objective Standard: possession is hostile so long as the possessor intends to claim the land as her own, even if the possessor is unsure as to the location of the boundary. Connecticut view
-
Subjective Standard: the possessor must actually know that she has crossed over the boundary. Maine view
​
Continuous
Tacking
-
American Approach: permitted if the adverse possessor and successors are in privity of estate
-
English Approach: privity not required
​
Privity of Estate
-
Voluntary transfer of an estate or possession from one occupant to the other by descent, by devise, or by deed purporting to convey title
​
Seasonal Use
-
Intermediate occupancy insufficient
-
However, seasonal use is permitted if that is the best use of the property
​
Legal Disabilities
-
​Majority Approach: a legal disability extends the time to bring an action to quiet title until a defined period after the disability is removed
-
Disability includes childhood, incompetency and imprisonment
-
Disability must exist at time of entrance of the adverse possessor
-
If the owner has more than one disability, apply the longest
​
Governmental Property
-
Common Law/Majority Approach: no time runs against the king (nullum tempus occurrit regi)
-
Minority Approach: same as private land
-
Minority Approach: longer continuous period required
-
Minority Approach: only applies to proprietary holdings (e.g., intangible interests or estates)
​
Thieves
-
Conversion approach: action accrues at the time of the theft or conversion
-
Discovery approach: action accrues when the true owner discovers, or by exercise or reasonable due diligence should have discovered, facts which form the cause of action
-
Demand approach: action accrues when the true owner demands return
​
Bona Fide Purchasers and Title to Stolen Goods
-
Common law: a thief cannot pass good title, only void title
-
U.C.C. approach: the U.C.C. attempts to balance the need for marketability of goods generally against the rights of the true owner through the entrusting provisions of U.C.C. § 2-403, which permits curing of voidable title
​
Innocent Third-Party Purchaser
-
An innocent third-party purchaser is one who lacks notice, actual or constructive, of the circumstances of stolen property
​
Void Title
-
A seller with void title cannot convey good title to an innocent third-party purchaser
-
The innocent third-party purchaser must return the property upon demand to the true owner
​
Voidable Title
-
A seller with voidable title can convey good title to an innocent third-party purchaser See U.C.C. §2-403
​
08
Gift
Gifts
-
Intent: present intent to convey property
-
Delivery: transfer of possession
-
AND Acceptance: presumed but can be refused by donee
​
Delivery
-
Manual/Actual Delivery: donor physically transfers possession to done
-
Constructive Delivery: donor physically transfers the means of access or control to done
-
Symbolic Delivery: donor physically transfers to the done an object that represents or symbolizes the subject or matter of the gift
​
Public Policy Rationales
-
Make the donor feel the “wrench of delivery”
-
Provide unequivocal evidence of the gift
-
Create prima facie evidence in favor of the gift
​
Types of Gifts
-
Inter vivos: made during lifetime
-
Irrevocable
-
-
Gift causa mortis: made in contemplation of death
-
Requires an understanding of the nature of the gift
-
Requires an apprehension of imminent death
-
If donor does not die from the apprehension, the gift is automatically revoked
-
Gift remains revocable at anytime
-
-
If donor dies from the apprehension, the gift becomes irrevocable
-
-
Estates &
Future Interests
09 Possessory
Estates
Estates
An estate is all right, title, and interest to a property interest. At common law, there are four recognized possessory estates, and are, based on the size of the estate, as follows:
-
The Fee Simple
-
The Fee Tail
-
The Life Estate
-
The Leasehold
​
The Fee Simple
-
Largest possible estate in land, denoting the aggregate of all possible rights that a person may have in that parcel of land.
-
O to A and her heirs
-
-
Words of purchase: describe the persons (called “purchasers”) who take an interest under a grant or devise.
-
O to A and her heirs
-
-
Words of limitation: describe the duration and terms of the estate received
-
O to A and her heirs
-
​
Note
-
The terms fee simple and fee simple absolute are used interchangeably in modern practice.
Modern Intestacy
-
Spouses: the immediate intestate successor of some share defined under state law
-
Issue: if spouse is dead, or if spouse has gotten their share, the direct children of both take next, down the line of descent
-
Ancestors: if no issue or all issue are dead, the parents take
-
Collaterals: all persons related by blood to the decedent who are neither descendants nor ancestors are collateral kin take next
-
Escheatment: a person who dies intestate who no will and no heirs forfeits their property to the Sovereign
​
Note
-
This is offered as a generalization of intestacy rules you will study further in a Wills & Trusts course.
-
The statutory requirements vary significantly from jurisdiction to jurisdiction.​
​
Fee tail
-
A conveyance of all possible rights that a person may have in that parcel of land except the right to alienate the property or devise it to nonfamily member.
-
O to A and the heirs of her body
-
​
Note
-
Nearly all States have abolished the fee tail as enshrining and protecting aristocratic land ownership.
-
Majority approach: conveyance is void, A takes in fee simple
-
Minority approach: A takes in fee simple, if A dies intestate with no issue, then O can designate another to receive the property as a gift
-
Minority approach: A takes a life estate
-
Minority approach: Fee tail recognized
-
Delaware; Mass.; Maine; and Rhode Island
-
-
​
Life Estate
-
A grant of property limited to the life of the grantee.
-
​O to A for life, . . .
-
​
Life Estate pur autre vie
-
A can transfer her life estate to B, creating a life estate pur autre vie (for the life of another).
​
Restraints on Alienation
-
Disabling
-
Under a disabling restraint, A may not convey.
-
Disabling restraints are always void.
-
-
Forfeiture
-
Under a forfeiture restraint, A loses her estate if she attempts to convey.
-
Forfeiture restraints are valid for life estates and future interests, but they are not enforceable for fee simple estates.
-
-
​Promissory
-
Under a promissory restraint, A promises not to convey.
-
Promissory restraints are valid for life estates and future interests, but they are not enforceable for fee simple estates.
-
​
Duties and Obligations of Life Estate Holder
-
Sale/lease: life tenant cannot sell/lease a greater interest then the one they possess
-
Mortgage: bank will not mortgage properties on the life estate as a security interest
-
Waste: exploiting the property and its resources may constitute actionable waste
-
Insurance: life tenant has no duty to insurance the property, and is usually entitled to the proceeds from casualty losses
-
However, if the life tenant fails to reinvest the proceeds to repair damaged or destroyed buildings, fixtures, or appurtenances, it may commit permissive waste
-
​
Waste
-
Affirmative waste: voluntary waste leading to substantial decreases in value
-
But, Open Mines Doctrine: tenant may continue mining minerals if the mine was already open at the time tenant took possession​
-
-
Permissive waste: failure to take reasonable care of the property
-
​Ameliorative waste: voluntary waste leading to substantial increases in value
-
Majority Approach: rejects liability for ameliorative waste
-
​
Leaseholds​​
-
The tenancy created under the landlord tenant contract is the second most common estate in the United States and the most common in Miami, Florida.
-
This estate is subject to extensive statutory regulation and contract law.
10 Defeasible
Estates
Fee simple determinable
-
Fee simple that terminates automatically when a defined event (or restriction) occurs.
-
O to the School District so long as the premises are used for school purposes.
-
O to the School District during which the premises must be used for school purposes.
-
O to the School District while the premises are used for school purposes.
-
​
Fee simple subject to condition subsequent
-
Fee simple that does not automatically terminate but can be cut short or divested at the grantor’s election.
-
O to the School District but if the premises are not used for school purposes, the grantor has a right to re-enter and retake the premises.
-
O to the School District provided that if the premises are not used for school purposes, the grantor has a right to re-enter and retake the premises.
-
​
Fee simple subject to executory limitation
-
Fee simple may be divested by the grantor if a specified event happens.
-
O to the School District but if the premises are not used for school purposes, to the City Library.
-
​O to the School District ​ provided that if the premises are not used for school purposes, to the City Library.
-
11 Future Interests
Interests in the transferor
​
​Reversion
The interest remaining in the transferor, or in the successor in interest of a testator, who transfers a vested estate of a lesser quantum than that of the vested estate which he has.
O to A for life
O to A for life, the to B and her heirs if B survives A
​
Transferability
-
Majority & FL: alienable, devisable, and descendible
​
Possibility of Reverter
A future interest remaining in the transferor or her heirs when a fee simple (or life estate) determinable is created.
O to HSB so long as it is used for school purposes
​
Transferability
-
Common law: could descend through intestacy but not devisable or alienable inter vivos. Mahrenholz
-
Majority & FL: alienable, devisable, and descendible
Statute of Limitations
Begins to accrue when the condition occurs
​
Right of Entry
A future interest remaining in a transferee when a fee simple (or life estate) subject to condition subsequent is created.
O to HSB but if it ceases to use the land for school purposes, O has the right to re-enter and retake the premises.
​
Transferability
-
Common law: could descend through intestacy but not devisable or transferable inter vivos. Mahrenholz
-
Majority: descendible, devisable in some states, but not alienable inter vivos
-
Florida: alienable, devisable, and descendible
Statute of Limitations
-
Approach 1: accrues when the right of reentry is exercised
-
Approach 2: accrues when the condition occurs
​
Interests in the transferor
Remainders
A remainder is a future interest created in and that remains away from the grantor in a third person.
​
Note
-
The difference between taking possession as soon as the prior estate ends and divesting the prior estate is the essential difference between a remainder and an executory interest.
-
A remainder is capable of immediate effect;
-
an executory interest must divest (cut short) the prior estate.
​
Vested Remainder
-
Given to an ascertained person
-
AND not subject to a condition precedent (although may be subject to a condition subsequent)
Indefeasibly vested remainder: not subject to divestment or diminution
Vested remainder subject to total divestment: subject to a condition subsequent
Vested remainder subject to open: a class gift
​
O to A for life, then to B and her heirs
​
Contingent Remainder
-
Given to an unascertained (or unborn) person
-
OR subsequent to a condition precedent
​
O to A for life, then to A’s children and their heirs. A has one child, B.
​
Vested v. Contingent Remainders
-
A vested remainder accelerates into possession.
-
At common law, a contingent remainder, with a few exceptions, was not assignable and was unreachable by creditors.
-
Note: Modern rule is that they are alienable, devisable, and descendible.
-
-
At common law, contingent remainders were destroyed if they did not vest upon termination of the preceding life estate
-
Note: Modern rule has abolished this in nearly all jurisdictions
-
-
Contingent remainders are subject to the Rule Against Perpetuities, whereas vested remainders are not.
​
Executory Interests
An executory interest is a future interest in a transferee that must, in order to become possessory:
-
Shifting executory interest: divest or cut short some interest in another transferee
​
O to A and his heirs, but if A dies without issue surviving him, to B and her heirs
O to A for life, then to B and her heirs, but if B dies under the age of 21,
to C and her heirs
​
-
Springing executory interest: divest the transferor in the future
​
O to A if A graduates law school
​
O to A if A gets married
​
O to A upon the birth of A's first child
11
Trusts
Trusts
-
Separates legal and equitable title to property
-
Trustee holds legal title to the trust property and manages that property for the benefit of the beneficiaries.
-
Beneficiaries have right of beneficial enjoyment of the property.
​
Powers of Trustee
-
Trustee is fiduciary of beneficiaries (no self-dealing)
-
Power to sell trust assets and reinvest the proceeds in other assets
-
Pay net income to the beneficiaries
-
Upon termination of the trust disburse assets to beneficiaries
12
Dead Hands
Dead Hand Control
-
An effort to control beneficiaries through grants of property after death.
-
Disfavored as restraining alienability of land.
-
In contrary to the general rule of protecting the grantor's intent, these rules emerged at common law to protect the alienability of land:
​
Destructibility
A legal remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate.
​
O conveys Blackacre “to A for life, then to B and her heirs if B reaches 21.”
-
If at A’s death B is under the age of 21, B’s remainder is destroyed. O now has the right of possession.
​
Merger
If the life estate and the next vested estate in fee simple come into the hands of one person, the lesser estate is merged into the larger.
​
O conveys Whiteacre “to A for life, then to B and her heirs if B survives A.” A conveys his life estate to O.
-
The life estate merges into the reversion, destroying B’s contingent remainder.
​
The Rule in Shelley's Case
If
-
One instrument
-
Creates a life estate in A
-
AND Purports to create a remainder in persons described as A’s heirs (or the heirs of A’s body
-
AND The life estate and remainder are both legal or both equitable
​
The remainder becomes a remainder in fee simple (or fee tail)
​
O conveys Blackacre “to A for life, then to A’s heirs.”
​
-
The Rule in Shelley’s Case gives A a vested remainder in fee simple.
-
A’s life estate then merges into the remainder, leaving A with a fee simple in possession.
-
The land is immediately alienable by A and not tied up for A’s lifetime.
-
Note: most States have abolished the Rule in Shelley's Case
The Doctrine of Worthier Life
Where there is an inter vivos conveyance of land by a grantor to a person, with a limitation over to the grantor’s own heirs either by way of remainder or executory interest, no future interest in the heirs is created; rather, a reversion is retained by the grantor.
​
O conveys Blackacre “to A for life, then to O’s heirs.”
-
In the absence of the Worthier Title Doctrine, there is a contingent remainder in favor of O’s unascertained heirs.
-
Under the Worthier Title Doctrine, however, no such remainder exists. Rather, O has a reversion.
-
Note: many States have abolished the Rule in Shelley's Case. Treated as a rule of construction in most.
​
The Rule Against Perpetuities
“No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.” - John C. Gray
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Note:
-
Some states have removed unrealistic assumptions (i.e., the fertile octogenarian; the unborn widow)
-
Some states will wait and see if a remainder with vest outside the perpetuity period, rather than make unrealistic assumptions about what might happen
-
30 states have adopted the Uniform Statutory Rule Against Perpetuities:
-
If at the end of a 90 year period an invested has not vested, the court may reform the conveyance.
-
-
Restatement (Third) abandons the rule all together, adopting a two generation approach. If any interest would vest outside of two generations of the last living measuring live, it is void.
-
Note: most states have not adopted the USRAP
-
-
¼ of states have abolished the rule for trusts if the trustee has a power of sale
-
In 2022, Florida amended its RAP statute to provide for a 1,000 year period. Under the new law, an interest in any trust created on or after July 1, 2022 must vest within 1,000 years of that interest’s creation. Florida had previously extended its perpetuities period from 90 to 360 years, effective for trusts created between January 2001 and June 2022.
13 Concurrent & Martial Estates
Co-Ownership
Tenants in Common
-
Separate but undivided interests in the property
​
T devises Blackacre “to A and B.”
-
The interest of each is descendible and may be conveyed by deed or will
-
Requires one unity:
-
Possession: equal right of possession
-
​​
Joint Tenancy
-
Joint tenants together are regarded as a single owner; each tenant is seised per my et per tout and owns the undivided whole of the property.
​
T devises Blackacre “to A and B as joint tenants with rights of survivorship.”
​
-
Right of Survivorship: When one joint tenant dies nothing passes to the surviving joint tenant or tenants.
-
Requires four unities:
-
Time: interests vested at same time
-
Title: interests created by same interest or adverse possession
-
Interest: same type and duration
-
Possession: equal right of possession
-
-
Note: some jurisdictions no longer require unity of time and title
​
-
A joint tenancy is a vehicle for avoiding probate.
-
Joint tenancies are disfavored under modern law. The presumption is a creation of a tenancy in common unless the conveyance expressly creates a right of survivorship.
-
Allows for fractionalization of unequal shares of ownership.
​
Joint Tenancy - Severance
-
A joint tenant can severe a joint tenancy by either:
-
Bringing an action for partition;
-
Conveying some portion of their estate to another;
-
OR murdering the other joint tenant
-
​​
-
A conveyance of the entire interest results in severance of the unities.
-
The Courts are split on the consequence of a joint tenant’s conveyance of a smaller portion of the whole joint estate.
-
Leases
-
Some Courts say that a lease will severe the unity of possession
-
Some Courts say that a lease does not severe the unity of possession
-
-
Mortgages
-
Title Theory States: execution of a mortgage is a transfer of legal interest to the mortgagee (lender). Thus, the mortgage results in severance.
-
Lien Theory States: execution of a mortgage only gives a lien over the property. No severance occurs when the mortgage is made.
-
However, a foreclosure in a lien theory state results in severance.
-
-
​
-
The Common Law permitted unilateral severance without notice to the other joint tenants.
-
However, many states have enacted reform statutes that require recording for an effective severance.
-
Additionally, the following events do not result in severance:
-
A divestment by will
-
Murdering the other Joint Tenant
-
​
Joint Bank Accounts
-
Joint account
​
“A and B” / “A or B”
-
Savings account trusts (Totten Trusts)
​
“A in trust for B”
​
-
Payable on death accounts
​
“A payable on death to B”
​
Partition in Kind
Partition in kind is favored over partition sale, and that partition sale should be decreed only where:
-
the physical attributes of the land make partitioning impracticable;
-
OR the interests of the owners would be better promoted by a sale
​
Note: the modern preference is to favor partition sales over in kind. N1 pg. 267
​
Judicial Preferences
-
Courts will often (but not always) aim to keep people in their homes over maximizing the virtues of the market.
-
Other examples:
-
Homestead protections (creditors lose)
-
Rent control (landlords lose)
-
Tenancy by the entirety (creditors lose)
-
-
​
Rent & Ouster
​
Majority Rule:
-
A cotenant in exclusive possession does not owe rent to his cotenants, absent ouster.
-
Refusal of a demand to vacate or pay rent does not constitute ouster.
-
Ouster may require:
-
Must refuse physical entry;
-
OR deny right of entry
-
​
Minority Rule:
-
Avoids litigation by putting burden on cotenant in possession to prove an agreement not to pay rent
​
Accounting
-
An accounting is not allowed for personal use (unless there has been ouster or exploitation resulting in permanent depreciation)
-
An accounting may be had for rents from third parties (less operating expenses, such as taxes, mortgages, interest, and management fees).
-
There is no general right to an accounting or contribution for improvements made to co-tenancy property.
-
However, if an improvement increases the value of the property, the improver may be compensated for that increased value in an accounting for rents and profits.
-
Cotenants also owe a duty to each other to not engage in self-dealing.
​
Taxes and Mortgages
-
A co-tenant who pays a mortgage or taxes may seek contribution or may recover in an accounting or partition suit (but there is no separate action to compel contribution).
-
However, the co-tenant in sole possession will receive reimbursement only to the extent that his payment exceeds the market value of the property.
​
Marriage at Common Law
The husband and wife become one economic and legal unit.
-
The wife ceased to be a legal person.
-
The husband gained legal and equitable title to all of the wife’s real and physical property, except her clothes and other small ornaments.
-
1830s-1900: Married Women’s Property Acts. Women in common law states could hold property in their own name.
-
1969: First no fault divorce statute enacted in CA
-
1970s: Most states abolished dower & courtesy and replaced it with the elective share
​
Tenancy by the Entirety
Traditionally, to create a tenancy by the entirety, the following words are required:
​
“to H and W as tenants by the entirety and not as joint tenants or tenants in common, with full right of survivorship.”
At common law, the tenancy by the entirety required five unities:
-
Time: interests vested at same time
-
Title: interests created by same interest or adverse possession
-
Interest: same type and duration
-
Possession: equal right of possession
-
Marriage: legal
-
10 States recognize common law marriages
-
5 states recognize civil unions
​
Twenty Five States have abolished tenancy by the entirety:
-
The eight community property states: (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington) and
-
Seventeen other states recognize common law concurrent estates: (Alabama, Colorado, Connecticut, Georgia, Iowa, Kansas, Maine, Minnesota, Montana, Nebraska, New Hampshire, North Dakota, South Carolina, South Dakota, Utah, West Virginia, and Wisconsin).
​
Tenancy by the Entirety – Limitations on Severance
-
In most states, a spouse cannot convey or encumber the property alone.
-
A deed or mortgage executed by one is void
-
Creditors of one spouse may not attach a lien to the property
-
Exception: federal tax liens
-
-
Neither party may bring a partition action.
-
​
-
This estate lasts until:
-
Divorce
-
The death of one spouse
-
Mutual agreement
-
OR Execution by a joint creditor of both spouses
-
​
​
14
Landlord & Tenant I
Leaseholds
Term of Years
-
Continues for a fixed period of time
-
May be more or less than a year
-
May be determinable or on condition subsequent
-
​Creation
-
Created by contract until a date certain
​
Statute of Frauds
-
A lease creating a tenancy for longer than a year must be in writing
Termination
-
A term of years ends
-
Automatically on its termination date
-
Upon tenant’s breach of a material covenant
-
Surrender
-
Periodic Tenancy
-
Continues for successive periods of time (e.g. year to year, month to month)
-
Termination date is uncertain
-
Automatically renews absent notice to the other party
Creation
-
Express Agreement
-
Implication
-
Operation of Law
-
Tenant holds over
-
Lease Invalid
-
​
Periodic Tenancy
-
Continues for successive periods of time (e.g. year to year, month to month)
-
Termination date is uncertain
-
Automatically renews absent notice to the other party
​​
Termination
-
Periodic tenancy is automatically renewed
-
Tenancy must end at the end of a natural lease period
-
For year to year:
-
Common law requires six months’ notice
-
Modern rule requires one month’s notice
-
-
For smaller periods:
-
A full period in advance is required
-
i.e. month-to-month = 1 month notice; week-to-week = 1 week
-
-
-
​
Notice
-
In writing
-
Delivered in a manner similar to service of process
​
Tenancy at Will
-
No fixed period
-
If the lease gives the landlord a unilateral right to terminate at will, the tenant’s right is implied
-
If the lease gives the tenant a unilateral right to terminate at will, the courts generally do not imply a right in favor of the landlord
-
​
Creation
-
Requires an express agreement
-
Normally implied where the agreement:
-
Creates an indefinite period
-
OR Lease fails under the statute of frauds
-
​
The payment of regular rent will cause an implied periodic tenancy in any case
​
Tenancy at Sufferance (Holdovers)
-
Tenant wrongfully remains in possession after the lawful tenancy expires
-
No notice to terminate
-
Tenant remains liable for rent
​
14 U.S.C. § 1982 – Civil Rights Act of 1866
All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.
-
Bars racial or ethnic discrimination in the sale or rental of property.
​
42 U.S.C. 3601, et seq.
-
Bars discrimination based on race, color, religion, national origin, sex, or disability. Includes discrimination against families with children, except for senior citizen housing or renting for non commercial purposes.
​
Exemptions
-
Owner-occupied buildings with no more than four units in which persons live independently.
-
Single-family homes sold or rented by an owner who owns no more than three single-family homes
-
Religious organizations and private clubs may preference members of their own group when selling or renting for non commercial purposes
​
Prohibitions
-
Refuse to negotiate, rent or sell
-
Provide different terms, conditions, or privileges
-
Falsely represent that a dwelling is not available
-
Induce or attempt to induce a person to sell or rent based on representations of a particular protected characteristic
-
Refuse to make a mortgage loan or other financial assistance available
-
Engage in discriminatory advertisements (even if otherwise exempted)
​
Comparing the CRA and the FHA
-
The Civil Rights Act of 1866
-
Covers racial discrimination*
-
Does not cover discrimination in services and facilities
-
Does not prohibit discriminatory advertising
-
-
The Fair Housing Act
-
Limited to Dwellings
-
Contains a number of exemptions in an effort to respect freedom of intimate associations of persons living together
-
​
Disparate Impact
Defendant’s actions have a disproportionate, exclusionary impact on members of a protected group and that such impact is not justified by a legitimate business or governmental purpose.
​
Disparate Treatment
-
The plaintiff establishes a prima facie case of discrimination;
-
The burden then shifts to the defendant to prove a legitimate, non-discriminatory reason for the conduct; and (3)
-
If the defendant satisfies the burden under step 2, then the plaintiff must show that the defendant’s reason is merely pretextual.
​
Tenant’s Duties
-
Rent: A lessee has a duty to pay rent.
-
Waste
-
The lessee’s duties in respect to waste are similar to those owed by life tenants.
-
However, the lessee's duty not to commit permissive waste (primarily in respect to repairs) is not limited to the extent of income derived or reasonable rental value when the lessee possesses personally.
-
In addition, a lessee (except possibly a tenant for a long term) may not commit ameliorative waste (which a life tenant may do).
-
-
Statutory Duties: In most states, the lessee also has duties assigned by statute, such as the duty to keep the premises clean.
​
Leases
Leases create both privity of estate and privity of contract between the landlord and tenant.
​
Privity of Estate
Mutual and successive legal relationship to the same right in real property.
​
Privity of Contract
Relationship to parties in a contract.
​
Assignment
-
An assignment occurs when the lessee transfers to a third person all of her right, title and interest in the leased premises.
-
An assignee comes into privity of estate with the lessor.
-
Therefore, if the rent is not paid, the lessor may sue the assignee, so long as the assignee remains on the premises.
-
However, the lessor may not sue the assignee after the assignee has transferred the premises to another third person, unless the assignee had assumed the duty to pay rent.
-
-
​
Sublease
-
A sublease occurs when the lessee transfers to a third person less than all of her right, title and interest in the leased premises.
-
A sublessee does not come into privity of estate with the lessor.
-
Therefore, absent an express assumption of the duty to pay rent, the lessor may not sue the sublessee directly for rent due.
-
-
15 Landlord & Tenant II
Leaseholds
Tenant's Duties
-
Rent: A Tenant has a duty to pay rent.
-
Waste
-
The Tenant’s duties in respect to waste are similar to those owed by life tenants.
-
However, the Tenant's duty not to commit permissive waste (primarily in respect to repairs) is not limited to the extent of income derived or reasonable rental value when the Tenant possesses personally.
-
In addition, a Tenant (except possibly a tenant for a long term) may not commit ameliorative waste (which a life tenant may do).
-
-
Statutory Duties: In most states, the Tenant also has duties assigned by statute, such as the duty to keep the premises clean or use it for illicit activities.
​
Landlord’s Remedies for Tenants Breach
-
Material Breach: If the Tenant fails to pay rent or commits another material breach of the lease, the Landlord may seek
-
To evict the Tenant.
-
To recover damages for the Tenant’s breach.
-
-
Abandonment: If the Tenant abandons the premises, the Landlord may
-
Retake the premises when the Tenant abandons,
-
Ignore an abandonment and continue to hold the tenant liable for rent, or
-
Reenter and relet the premises for the Tenant.
-
​
-
Termination of the Lease for Nonpayment of Rent:
-
If the Tenant fails to pay rent (without a valid defense), under the modern trend, the Landlord may terminate the lease and may sue for past rent due.
-
However, if the Landlord elects to terminate the lease, in most cases, the Landlord may not sue for rent due for the unexpired term of the lease.
-
-
Suit to Recover Rent Past Due
-
If the Tenant fails to pay rent (without a valid defense), the Landlord may sue for past due rent.
-
The Landlord may also sue for rent for the unexpired term of the lease as it becomes due.
-
However, in some jurisdictions, the Landlord may have a duty to mitigate damages in respect to future rent.
-
​
-
Anticipatory Repudiation
-
To recover before the contract due date under a theory of anticipatory repudiation, the non-breaching party must prove
-
The breaching party has unequivocally stated that he or she will not perform on the due date; and
-
The contract is still executory on both sides.
-
-
Tenant Remains on the Premises
-
If the Tenant fails to pay rent but remains on the premises, it is unlikely that the Landlord will be able to prove that the Tenant has unequivocally stated that he or she will not pay rent as it becomes due in the future.
-
Therefore, it is unlikely that the Landlord will be able to use the theory of anticipatory repudiation to recover rent due for the unexpired term of the lease.
-
​
-
Rent Acceleration Clause in Lease
-
In some jurisdictions, a Landlord may include a rent acceleration clause in a lease.
-
A rent acceleration clause states that the full amount of rent due under the lease will be due and payable immediately on the Tenant’s failure to pay rent currently due.
-
If a rent acceleration clause is enforceable, on the Tenant’s breach, the Landlord may sue immediately for the rent due for the unexpired term of the lease but may not retake the premises.
-
-
Rent Acceleration Statute: In some jurisdictions, rent acceleration is authorized by statute, at least if
-
The lease contains an acceleration clause; or
-
The Landlord has relet the premises in an attempt to mitigate damages.
-
​
-
In no case may the Landlord exercise “self-help” or force to recover possession, because of:
​
Procedural Due Process (5A & 14A)
-
Notice;
-
AND an opportunity to be heard
​
Florida’s Residential Eviction Statute, § 83.40, et seq.
(“Unlawful Detainer Statute”)
-
Landlord provides a 3 day written notice for nonpayment of rent
-
The landlord files an eviction complaint with the court
-
Court serves the tenant with Summons and Complaint
-
Court holds the hearing for the eviction and issues a judgment
-
Local sheriff provides tenant with Writ of Possession
-
Sheriff returns possession of the property to the landlord
​
The Prohibition Against Self Help
Fla. Stat. § 83.67
(1) A landlord of any dwelling unit governed by this part shall not cause, directly or indirectly, the termination or interruption of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, elevator, garbage collection, or refrigeration, whether or not the utility service is under the control of, or payment is made by, the landlord.
(2) A landlord of any dwelling unit governed by this part shall not prevent the tenant from gaining reasonable access to the dwelling unit by any means, including, but not limited to, changing the locks or using any bootlock or similar device.
(5) A landlord of any dwelling unit governed by this part shall not remove the outside doors, locks, roof, walls, or windows of the unit except for purposes of maintenance, repair, or replacement; and the landlord shall not remove the tenant’s personal property from the dwelling unit unless such action is taken after surrender, abandonment, recovery of possession of the dwelling unit due to the death of the last remaining tenant in accordance with s. 83.59(3)(d), or a lawful eviction. . . .
(6) A landlord who violates any provision of this section shall be liable to the tenant for actual and consequential damages or 3 months’ rent, whichever is greater, and costs, including attorney’s fees. Subsequent or repeated violations that are not contemporaneous with the initial violation shall be subject to separate awards of damages.
(7) A violation of this section constitutes irreparable harm for the purposes of injunctive relief.
(8) The remedies provided by this section are not exclusive and do not preclude the tenant from pursuing any other remedy at law or equity that the tenant may have. The remedies provided by this section shall also apply to a servicemember who is a prospective tenant who has been discriminated against under subsection (3).
​
Landlord’s Remedies for Tenants Breach
-
Abandonment: If the Tenant abandons the premises, the Landlord may
-
Retake the premises when the Tenant abandons,
-
Ignore an abandonment and continue to hold the tenant liable for rent, or
-
Reenter and relet the premises for the Tenant.
-
​​
-
Tenant Abandons the Premises
-
However, if the Tenant abandons the premises, in at least some jurisdictions, the Tenant’s abandonment is deemed to be an unequivocal statement that the Tenant will not pay future rent as it becomes due.
-
Therefore, in at least some jurisdictions, if the Tenant abandons the premises, the Landlord may use the doctrine of anticipatory repudiation to sue immediately for rent for the unexpired term of the lease.
-
​
-
Landlord’s duty to mitigate
-
Majority rule treats a lease as a contract
-
Landlord is required to mitigate damages from Tenant’s Breach
-
Landlord must show the property
-
Tenant may furnish suitable replacements for the lease
-
​
Landlord's Duties
Strict Common Law
-
Common law: the covenants of land landlord and tenant owed each other were deemed to be independent of one another. Caveat Lessee
-
Therefore, a tenant was required to continue to perform her duties under the lease, including the duty to pay rent, even if the landlord breached the lease.
Statutory Innovations: Under some state statutes, if a Landlord breaches the lease, the tenant may
-
Withhold rent.
-
Repair and deduct.
Covenant of Quiet Enjoyment
-
Every lease contains a covenant of quiet enjoyment (express or implied).
-
In the covenant of quiet enjoyment, the Landlord promises that the Tenant will not be disturbed by the Landlord (or someone claiming through the Landlord) in her possession of the premises.
-
A Tenant may treat the lease as terminated and withhold rent if the covenant of quiet enjoyment has been breached by an actual or a constructive eviction.
​
Constructive Eviction
-
Eviction is either actual or constructive, actual when the tenant is deprived of the occupancy of some part of the demised premises, and constructive when the Landlord, without intending to oust the Tenant, does an act by which the latter is deprived of the beneficial enjoyment of some part of the premises, in which case the tenant has his right of election, to quit, and avoid the lease and rent, or abide the wrong and seek his remedy in an action for the trespass. But in every case of constructive eviction the tenant must quit the premises if he would relieve himself from liability to pay rent; and whether or not he is justifiable in so quitting is a question for the jury.
​
Other Exceptions to Caveat Lessee
-
Furnished Dwelling
-
Latent Defects
-
Common Areas
-
Fraudulent Misrepresentations
-
Nuisance Abetment
Tenancy at Will
-
No fixed period
-
If the lease gives the landlord a unilateral right to terminate at will, the tenant’s right is implied
-
If the lease gives the tenant a unilateral right to terminate at will, the courts generally do not imply a right in favor of the landlord
-
​
Actual Eviction
-
A Tenant may treat the lease as terminated and withhold rent if the Landlord (or someone claiming through him) breaches the covenant of quiet enjoyment by actually evicting the Tenant.
​
Partial Actual Eviction
If a Tenant is actually evicted from part of the premises
-
Majority rule: the Tenant is relieved of all liability for rent, even if the Tenant continues to occupy the rest of the premises.
-
Minority/Restatement: rent abatement only
​
Constructive Eviction
-
A Tenant may treat the lease as terminated and withhold rent if the Landlord breaches the covenant of quiet enjoyment by constructively evicting the Tenant.
-
To constitute constructive eviction, the Landlord’s act must substantially and permanently interfere with the Tenant’s use and enjoyment of the premises.
-
wrongful conduct by the landlord (or someone for whom the landlord is legally responsible);
-
substantial interference with the tenant’s use and enjoyment;
-
AND vacation of the premises in a timely fashion.
​​
Landlord's Duties
Implied Warranty of Habitability (Residential Leases Only)
-
Nature of Warranty: The implied warranty of habitability guarantees that the Landlord will deliver and maintain premises that are safe, clean and fit for human habitation.
-
Adoption: Almost all states (except Alabama, Arkansas, and Wyoming) and the District of Columbia have adopted the implied warranty of habitability.
-
Basis for Cause of Action: The tenant must show a defect in essential residential facilities.
-
Majority Approach: the defect may be patent or latent.
-
Some jurisdictions exclude patent defects from the scope of the implied warranty of habitability.
-
-
​
-
Other exclusions
-
Leases for single-family residences.
-
Agricultural leases.
-
Long-term leases.
-
Casual leases made by nonmerchant Landlords.
-
​
-
Standard
-
In some jurisdictions, a housing code violation automatically breaches the implied warranty of habitability.
-
In other jurisdictions, the housing code provides the standard; however, substantial compliance with the code is sufficient so long as habitability is not affected.
-
-
Common Law
-
In some jurisdictions, the standard for the implied warranty is found in the common law, even in the absence of a housing code.
-
In those jurisdictions, a breach of the warranty may be found if the premises are uninhabitable in the view of a reasonable person.
-
​
-
Procedure
-
Provide the Landlord with notice of the defect, and
-
Then allow the Landlord a reasonable time to make necessary repairs.
-
-
Effect of Breach on Lease
-
The tenant is excused from further performance under the lease.
-
The tenant may but need not vacate the premises.
-
​
-
The tenant may treat the lease as cancelled, and rent is abated.
-
The tenant may also seek money damages.
-
The tenant may seek reformation or other contract or tort remedies
​
16
Real Estate Contracts
Lands Transactions
Scope (MYLEGS)
Marriage, Year, Land, Executor, Goods, Surety
-
(1) “the contract must be a writing signed by the party against whom enforcement is sought”; and
-
(2) “the writing must contain all of the essential terms of the sale and these terms may not be explained by resort to parol evidence.”
​
Statute of Frauds - Requirements
-
Signature: the agreement must be signed by the party sought to be charged
-
Description: the agreement must describe the land covered by the contract
-
Price: the writing must state the contract price
​
Statute of Frauds - Exceptions
-
Part performance
-
Estoppel
Restatement (Second) of Contracts, §129
A contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the Statute of Frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.
​
“d. . . . Where specific enforcement is rested on a transfer of possession plus either part payment of the price or the making of improvements, it is commonly said that the action taken by the purchaser must be unequivocally referable to the oral agreement. But this requirement is not insisted on if the making of the promise is admitted or is clearly proved. The promisee must act in reasonable reliance on the promise, before the promisor has repudiated it, and the action must be such that the remedy of restitution is inadequate. If these requirements are met, neither taking of possession nor payment of money nor the making of improvements is essential . . .” (emphasis supplied).
E-SIGN
The Electronic Signatures in Global and National Commerce Act of 2000 permits electronic signatures in transactions in or affecting interstate or foreign commerce.
​
Florida Electronic Signature Act of 1996
Fla. Stat. 668.50
-
(a) A record or signature may not be denied legal effect or enforceability solely because the record or signature is in electronic form.
-
(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in the formation of the contract.
-
(c) If a provision of law requires a record to be in writing, an electronic record satisfies such provision.
-
(d) If a provision of law requires a signature, an electronic signature satisfies such provision.
Marketable Title
A marketable title to real estate is one which is free from reasonable doubt, and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.
​
Restrictive Covenant
-
A restrictive covenant is a provision in a real property conveyance that limits the grantee’s use of the property.
-
Majority Rule: the mere existence of a restrictive covenant makes title unmarketable because it is an encumbrance.​
​
Zoning Restrictions
Near Unanimous Rule: the mere existence of a zoning restriction does not constitute an encumbrance, but a violation of a zoning restriction does.
Nondisclosure
-
Common Law: Caveat Emptor applies unless there is a confidential or fiduciary relationship between the parties
-
Mere nondisclosure is not actionable misrepresentation
-
Buyer must prudently access the fitness and value of the purchase
-
A buyer who fails to exercise due care (inspect) is barred from rescission of patent defects
-
​
Defects
-
Patent: visible or known
-
Latent: hidden
​
Nondisclosure
-
Modern Majority: seller must disclose all known defects, nondisclosure is fraud or misrepresentation
-
Most states have required disclosures covering:
-
Structural defects
-
Soil issues
-
Underground sewage or storage tanks
-
Hazardous materials
-
Unpermitted improvements
-
Building code or zoning violations
-
Encroachments
-
-
Merger
-
Common Law: when buyer accepts deed, the contract merges into the deed and the contract can long be enforced at law. Buyer must sue seller on the warranties in the deed.
-
Modern approach: intent of parties controls.
​
Implied Warranty of Quality
-
Similar to the implied warranty of habitability
-
Most courts: covers latent or hidden defects where the builder failed to exercise the standard of skill and care exercised by similar merchants.
​
Remedies for Breach
-
Monetary damages: compensatory, punitive, and retention of the earnest money (the deposit)
-
Specific Performance: both parties are usually entitled to specific performance if the other breaches the contract
-
Equitable Conversion: if the contract is specifically enforceable, the buyer takes equitable title to the land, the seller takes a vendor’s lien on the land secured by a claim to the purchase funds (holding legal title as trustee for the buyer)
-
Recission: cancelation of the contract for failure to satisfy a condition precedent to the executory contract
​
Calculating Monetary Damages
-
Majority Rule: in the absence of a liquidated damages clause, vendor damages should be computed according to the common law rule which provides for the difference between the contract price and the market value of the property at the time of breach
-
UCC: the difference between contract price and resale price as the value of damages. For seller breaches, damages are calculated as the difference between the value of the property at breach and the contract price
​​
​
17
Real Estate Contracts
Lands Transactions
Calculating Monetary Damages
Marriage, Year, Land, Executor, Goods, Surety
-
Majority Rule: in the absence of a liquidated damages clause, vendor damages should be computed according to the common law rule which provides for the difference between the contract price and the market value of the property at the time of breach
-
UCC: the difference between contract price and resale price as the value of damages. For seller breaches, damages are calculated as the difference between the value of the property at breach and the contract price
​
Deeds
Types of Deeds
-
General Warranty: warrants against all defects in title, regardless of when
-
Special Warranty: warrants against defects in title caused by Grantor
-
Quitclaim Deed: no warranties
​
Title Warranties (Present)
1. A covenant of seisin—The grantor warrants that she owns the estate that she purports to convey.
Note: The existence of an encumbrance does not breach the covenant of seisin
2. Right to Convey: the covenant of the right to convey is often co-extensive with the covenant of seisin.
​
-
Differences From the Covenant of Seisin
-
A trustee may be seised of the fee but may not have the right to convey if the trust deed prohibits the trustee from conveying.
-
An owner of a life estate may be seised but may not have the right to convey if the life estate is subject to a valid restraint on alienation.
-
​
3. Against Encumbrances: The grantor promises that there are no encumbrances on the property.
-
In most cases, if a defect renders title unmarketable (e.g., a mortgage or an easement), the defect also breaches the covenant against encumbrances.
-
However, in some jurisdictions, a violation of a zoning ordinance may render title unmarketable but does not breach the covenant against encumbrances.
-
An encumbrance excepted in the deed cannot serve as the basis for a breach of the covenant against encumbrances.
Note: The jurisdictions are split on whether a visible or known encumbrance breaches the covenant against encumbrances.
​
Title Warranties (Future)
​
4. General Warranty: The grantor guarantees that she will assist in defending title against lawful claims and will compensate the grantee for losses sustained by an assertion of superior title.
Note: The covenant of general warranty is not breached unless and until the grantee is evicted from the premises or otherwise suffers damage.
​
5. Quiet Enjoyment: the grantor warrants that the grantee will not be disturbed by a superior claim.
-
The covenant of quiet enjoyment is virtually identical to the covenant of general warranty.
​
6. Further Assurances: The grantor promises to take whatever steps (e.g., defending a law suit or executing a curative deed) may be required to perfect defects of title.
​
Breach of Covenants
-
Present: at the moment of conveyance
-
Future: not breached until the grantee or her successor
-
Is evicted
-
Buys up the paramount claim to avoid suit;
-
OR is otherwise damaged
-
Breach of Covenants - Remedy
Monetary Damages: Recovery is generally capped at the amount the grantor/defendant received for the property (plus interest).
​
For breach of the covenants of seisin, right to convey, general warranty, and quiet enjoyment, the grantee may recover the full purchase price (if the conveyance is voided) or a percentage thereof (if a portion of the conveyance is voided).
​
For breach of the covenant against encumbrances, damages are measured by
-
The cost of removing the defect, if removal is possible or
-
The diminution in the value of the property, if the defect cannot be removed.
​
Attorney’s Fees: In some jurisdictions, attorney’s fees may also be recovered for breach of future covenants if the grantee loses the property to a lawful superior claim.
​
Remote Grantors: Some states permit a grantee to recover damages from a remote grantor to the extent of the consideration received by the remote grantor from his immediate grantee, even if the remote grantee paid her immediate grantor less for the property.
-
However, if the remote grantee paid less than the remote grantor received from her grantee, some states limit the remote grantee's recovery to the amount the remote grantee paid to her immediate grantor.
​
Specific Performance: Specific performance is available for the covenant of further assurances.
Breach of Covenants
Conveyance of real property by deed requires:
-
Donative intent,
-
Delivery, and
-
AND Acceptance
​
Donative Intent
-
Present Donative Intent: The grantor must intend to transfer an interest (present or future) immediately to the grantee.
-
Testamentary Intent: If the grantor intends the deed to take effect only on the death of the grantor, will formalities must be observed
​
Delivery
-
Actual: Delivery is usually accomplished through the physical act of handing the deed over to someone.
-
Constructive: However, it is possible to accomplish delivery by mere words (e.g., by a declaration of intent and relinquishment of control.) y.
​
Presumption of Delivery: A presumption of delivery arises if
-
The deed is later found in the grantee’s possession.
-
The deed is properly executed and recorded.
-
The deed contains an attestation clause that attests to delivery.
​
-
Handing the deed to the grantor’s agent does not constitute valid delivery.
-
Handing the deed to the grantee’s agent does constitute valid delivery.
Escrow Agent
-
Handing the deed to a third party (escrow agent) does constitute valid delivery if the grantor relinquishes all control over the deed.
Relation Back
-
Once the deed is delivered, delivery will date back to the date the grantor handed the deed to the escrow agent
​
Acceptance
-
Presumed
The Mortgage
A mortgage is typically evidenced by two documents:
-
A mortgage deed, and
-
A promissory note.
​
A mortgage is a conveyance of an interest in real property made to secure performance of an obligation. The note is a separate instrument governed by Contract law.
-
The obligation often arises out of a loan of money made to facilitate the purchase or development of real property.
Title Theory
-
Mortgagee takes legal title, the mortgagor has the equity of redemption
​
Lien Theory (Fla.)
-
Mortgagor retains legal title, mortgagee has a lien against the property
Mortgage Alternatives
The installment land sale contract/contract for deed/lease to own contract:
-
The buyer takes possession of the land immediately, but the seller contracts to deliver title to the buyer only after the buyer has paid the purchase price plus interest in regular installments over a fixed period of time.
​
Discriminatory Lending under the FHA
Direct Discrimination
-
“[I]f the plaintiff presents direct evidence that the lender intentionally targeted her for unfair loans on the basis of [membership in a protected class], the plaintiff need not also show that the lender makes loans on more favorable terms to others.’
​
Reverse Redlining
-
Plaintiff need not show a “robust casual connection” between any alleged facially neutral policy and the alleged disproportionate racial outcome.
-
Rather, plaintiffs must allege “‘that the defendants’ lending practices and loan terms were unfair and predatory, and that the defendants either intentionally targeted on the basis of race, or that there is a disparate impact on the basis of race.’”
Foreclosure
Mortgagee's Obligations at Foreclosure
Mortgagee is the Mortgagor's Fiduciary at Foreclosure
-
The mortgagee has a duty to exert every reasonable effort to obtain a fair price.
-
The due diligence required depends upon the circumstances of the case.
-
Mere legal notice is insufficient, must give notice reasonable under the circumstances to result in a ‘fair’ price.
-
​
Fair Price
-
Not fair market value
-
The result of Mortgagee exercising reasonable due diligence
-
Inadequate price will not be set aside unless it “shock’s the concious”
​
Foreclosure Payouts
The proceeds of a mortgage foreclosure sale will be distributed in the following order:
-
To the costs of the sale.
-
To the security interest foreclosed.
-
To junior lien holders* terminated by the sale.
-
To the mortgagor, if any proceeds remain.
Senior Interests
Are not destroyed by the sale
​
Junior Interests
Destroyed if given notice of both the proceedings and the sale
​
Unfair Characteristics
-
The loans were ARM loans, where the borrowers’ monthly mortgage payments would start out lower and then increase substantially after the introductory two or three year period;
-
They featured an introductory rate for the initial period that was at least three percent below the fully indexed rate;
-
They were made to borrowers for whom the debt-to-income ratio would have exceeded fifty percent had Fremont measured the borrower’s debt by the monthly payments that would be due at the fully indexed rate rather than the introductory rate;
-
AND the loan-to-value ratio was one hundred percent, or the loan featured a substantial prepayment penalty, or a prepayment penalty that extended beyond the introductory rate.
​
​​
​
18
Recording
Recording
Common Law Rule
Marriage, Year, Land, Executor, Goods, Surety
-
First in time, first in right controlled.
-
Once a grantor conveyed an interest, they could not subsequently convey that interest a second time.
-
The Recording Statutes and Marketable Title Acts abridge this rule.
​
Establishing Marketable Title
-
Title opinion based on a title search
-
Title insurance
-
Title covenants
​
Recording Statutes - (Purpose)
-
Establishes a system of public recordation of land titles
-
Preserves in a secure place important documents
-
Protects purchasers for value and lien creditors against prior unrecorded interests***
-
Ensures the tax collector knows who is responsible for the payment of taxes on the property
Documents Subject to Recording
-
Deeds;
-
Mortgages;
-
Easements;
-
Covenants;
-
Leases;
-
AND Contracts to convey.
Recording Statutes - (Bona Fide Purchasers)
Protection under the Recording Statutes requires a person to be a bona fide purchaser, which requires that they:
-
Are a purchaser (or mortgagee or creditor if allowed);
-
Takes without notice;
-
Paid value
Recording Statutes - (Value)
-
Deed: in the case of a deed, the fact pattern should indicate whether value was paid.
-
Donees, devisees, and heirs by intestate succession do not pay value and therefore are not protected under a recording statute.
-
-
Mortgage: If the mortgagee lends money to the mortgagor at the time the mortgagor executes the mortgage deed, the mortgagee pays value for the purposes of the relevant recording statute.
-
Judgment Creditor: Unless otherwise provided by statute, a creditor is protected only against claims that arise after a judgment against the debtor is recorded.
-
Purchaser at Judicial Sale: In most jurisdictions, a purchaser at a judicial sale of real property is protected against unrecorded interests that are subject to the recording act.
​
Recording Systems - (Types)
-
Grantor-Grantee Index
-
Tract Index
Grantor-Grantee Index Search Steps:
-
Identify the cut-off period defined in the Marketable Title Act.
-
Starting with the most recent recording, search the grantee index backwards and the grantor index forward for any recordings from a known party.
-
Identify each grantor and each grantee up and down the immediate chain of title to the immediate grantee (“IG”).
-
Then, search backward in the grantee index until the deed to IG is found (or the cut-off, often established by the marketable title act, is reached).
-
Switch to the grantor index and searches for deeds in which IG is named as grantor in the time from the date on which IG is named as grantee until they conveyed their interest.
-
Repeat for IG’s grantor (“RG”), and their grantor, and so on, until the cut-off period is reached.
Florida Marketable Title Act
712.02 Marketable record title; suspension of applicability.—Any person having the legal capacity to own land in this state, who, alone or together with her or his predecessors in title, has been vested with any estate in land of record for 30 years or more, shall have a marketable record title to such estate in said land, which shall be free and clear of all claims except the matters set forth as exceptions to marketability in s. 712.03. A person shall have a marketable record title when the public records disclosed a record title transaction affecting the title to the land which has been of record for not less than 30 years purporting to create such estate either in:
(1) The person claiming such estate; or
(2) Some other person from whom, by one or more title transactions, such estate has passed to the person claiming such estate, with nothing appearing of record, in either case, purporting to divest such claimant of the estate claimed.
​
Recording Systems - (Types)
-
Tract Index
Recording Statues
​
1. Race statute—The first purchaser (meaning anyone who has paid consideration for an interest in land) for value who records first, prevails (notice is irrelevant).N.C.
​
Gen. Stat. § 47-18(a). No (i) conveyance of land, or (ii) contract to convey, or (iii) option to convey, or (iv) lease of land for more than three years shall be valid to pass any property interest against lien creditors or purchasers for a valuable consideration from the donor, bargainor or lessor but from the time of registration thereof in the county where the land lies. . .
​
2. Notice statute—A subsequent purchaser for value who takes without notice of third-party interests in the land prevails, regardless of whether he records.
Note: Florida is a Notice state.
​
A conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser fore value, without notice thereof, unless the conveyance is recorded.
​
Notice
-
Mortgagee takes legal title, the mortgagor has the equity of redemption
​
Under the typical notice or race-notice statute, notice may be actual, inquiry, or record (constructive):
-
Actual Notice: Actual notice exists when the subsequent claimant actually knows about the prior claim.
-
Inquiry Notice: Inquiry notice exists when, based on a proper inspection of the property, the subsequent claimant should know of the prior claim.
-
Record (Constructive) Notice: Record notice exists when, based on a proper search of the public record, the subsequent claimant should know of the prior claim.
​
Recording Statutes
3. Race-notice statute—A subsequent purchaser for value who takes without notice of third-party interests in the land prevails only if he records before the prior instrument is recorded.
Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.
​
Shelter Rule
A person who takes from a bona fide purchaser protected by the recording act has the same rights as his grantor.
-
Does not apply to one who:
-
Attempted to wash his non-protected status;
-
OR Committed fraud in respect to the deed.
​
​
20
Nuisance
Nuisance
Private Nuisance
A private nuisance exists in a legal sense when one makes an improper use of his own property and in that way injures the land or some incorporeal right of one’s neighbor
-
An intentional invasion occurs when one’s conduct is unreasonable under the circumstances of the particular case.
-
Intent means that the defendant acted for the purpose of causing it, or knows that it is resulting from his conduct, or knows that it is substantially certain to result from his conduct. Restatement
-
An unintentional invasion occurs when one’s conduct is negligent, reckless, or ultrahazardous.
​
Common Law
-
​Sic utere tuo ut alienum non laedas: one’s use of land cannot interfere with another’s use of land
Coase & the Restatement
-
Utilitarianism: what is the most cost-efficient resolution
-
Does the gravity of the harm outweigh the utility of the actor’s conduct?
-
Who is the best cost-avoider?
-
Corrective Justice
-
What is the most just outcome?
-
Any invasion on use creates strict liability.
-
To determine the existence of a private nuisance based on intentional conduct, a court balances the utility of the conduct against the gravity of the harm caused by the conduct.
conduct not feasible.
​
In balancing the gravity of the harm against the utility of conduct, the following factors are considered:
(a) the extent of the harm involved;
(b) the character of the harm involved;
(c) the social value that the law attaches to the primary purpose of the conduct;
(d) the suitability of the conduct to the character of the locality; and
(e) the impracticability of preventing or avoiding the invasion.
(f) the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible. Restatement approach
Common Law
-
Trespass is “as any intrusion which invades the possessor’s protected interest in exclusive possession, whether that intrusion is by visible or invisible pieces of matter or by energy which can be measured only by the mathematical language of the physicist.”
​
Lateral Support
Lateral support: duty on neighboring land to provide the support that the subject parcel would need and receive under natural conditions
-
Common Law: did not include buildings
-
Modern Approach: includes all types of buildings
​
Subjacent Support
Lateral support: one person owns surface rights and another person owns some kind of subsurface rights, such as a mineral interest.
-
Common Law: did not include buildings
-
Modern Approach: includes all types of buildings
​
Remedies
-
Injunction: whenever a nuisance causes "not unsubstantial injury”, without regard to whether the injunction would work great injury to the defendant and the public.
-
Monetary Damages: permanent damages to plaintiff
-
Diminishment in value (past and future injury); OR
-
Cost of buying an easement or servitude over plaintiff’s land
-
-
Injunction + compensation: some courts will grant an injunction conditioned on plaintiff paying to reimburse defendant for losses
Public Nuisance
A public nuisance is “an unreasonable interference with a right common to the general public.”
​
Circumstances that may sustain a holding that an interference with a public right is unreasonable include the following:
(a) Whether the conduct involves a significant interference with the public health, the public safety, the public peace, the public comfort or the public convenience;
(b) whether the conduct is proscribed by a statute, ordinance or administrative regulation; OR
(c) whether the conduct is of a continuing nature or has produced a permanent or long-lasting effect, and, as the actor knows or has reason to know, has a significant effect upon the public right.
​
Coming to the Nuisance
“Coming to the nuisance” is a factor that may be considered in weighing the utility of the conduct against the gravity of the harm.
Note: However, “coming to the nuisance” is not a complete bar to suit
21-22
Easements
Nonpossessory Interests
​
-
A right to do some act on another person’s land (e.g., a right of way) → Easement
-
A right to enter onto someone’s land and remove something attached to the land (e.g., remove minerals) → Profit
-
A right to restrict an owner from using her land in some way (e.g., your neighbor cannot develop her land commercially) → Easement (a negative easement), or → Real covenant, or → Equitable servitude
-
A right to compel an owner to perform some act on her own land (e.g., maintain a fence) → Real covenant, or → Equitable servitude
-
A right to compel an owner to pay money to maintain certain facilities (e.g., maintain a swimming pool available to residents) → Real covenant, or → Equitable servitude
​
Easements
​
-
The owner of an easement has:
-
A right to use a tract of land (the servient tenement)
-
No right to possess and enjoy the servient tenement
-
​
Affirmative Easements
-
A right to enter upon the servient tenement and make an affirmative use of it
-
Examples:
-
Laying and maintaining utility lines
-
Draining water
-
Polluting Air
-
Right of way
-
-
​
Easement Appurtenant
-
Requires two parcels.
-
One dominant tenement to which the benefit flows;
-
One servient tenement subject to that benefit.
-
​
Easement of Gross
-
Personal in Nature
-
One servient tenement subject to that benefit.
-
Examples:
-
O gives A the right to swim on his lake
-
O gives FPL the right to run electrical lines for the community under his land
-
-
​
Profit à Prendre
-
A right to take something (e.g., minerals) from the land of another
​
Reservations
-
Common Law (Majority): an easement cannot be reserved in favor of a stranger
-
Minority (Willard/ReProp): an easement can be reserved in a third party
​
Licenses
-
A license is oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass
​
Revocability
Majority:
-
Licenses are generally revocable.
-
License may be irrevocable when:
-
Coupled with an interest in land; OR
-
Under the rules of estoppel (easements by estoppel)
-
​
Note: the ReProp treats irrevocable licenses as easements in both scope and duration. Some courts limit to time period needed to recoup expenses.
Minority: reject irrevocable licenses for violating the Statute of Frauds
​
Easement by Implied Reservation
-
English/Minority Rule: will not imply an easement except in cases of necessity
-
Majority Rule/ReProp: reasonable necessity:
1)Initial unity of ownership of the now dominant and servient estates, followed by severance of the title to the dominant and servient estates;
2)An existing, apparent, and continuous use of one parcel for the benefit of the other, existing at the time of the severance; and
3)Reasonable necessity for that use. (Note 2)
​
Note: if the dominant and servient estates come back to one title, the easement is extinguished.
​
Easement by Prescription
-
Open and notorious
-
Actual
-
Continuous
-
Exclusive
-
Majority: exclusivity of use is not required for an easement to arise by prescription.
-
Minority: “Exclusivity does not require a showing that only the claimant made use of the way, but that the claimant’s right to use the land does not depend upon a like right in others.”
-
-
Hostile
-
Majority: an unexplained, open or notorious use of land, continued for the prescriptive period, is presumed to be adverse.
-
Minority: an unexplained use is presumed permissive
​
Public Easements
1.Prescription
2.Dedication
3.Custom
4.Public Trust
​
1. Prescription
1.Long continuous public use
2.Notice of public claim
​
2.Dedication
1.Express; or
2.Implied
-
Owner evidenced an intent to make public grant
-
State accepts by maintaining it for the benefit of the public
3.Custom
1.Ancient; and
-
Traditionally, the use must date from “time immemorial.”
-
However, today, long and general use is sufficient.
2.Reasonable
-
The reasonableness requirement is satisfied with proof that the public has always made use of the land in a manner appropriate to the land and to the usages of the community.
4.Public Trust
1.Under the public trust doctrine, the public also has the right to horizontal and vertical access to the shore through dry sand in
-
Land held by a local governmental agency;
-
Land held by a quasi-public association (Matthews v. Bay Head Improvement Assn); and
-
When access through municipally-owned land is not available, privately-owned upland sand (Raleigh Avenue Beach Assn. v. Atlantis Beach Club)
​
Scope
-
Common Law/Majority (bright-line test): an easement may not be used in connection with a nondominant estate, and any such use is subject to an injunction.
-
Minority (reasonableness test): an easement can be used in connection with a nondominant estate, subject to a limitation on reasonableness
​
Subdivision
Restatement (Third) of Property, Servitudes § 4.10 (2000), says:
•[T]he holder of an easement or profit . . . is entitled to use the servient estate in a manner that is reasonably necessary for the convenient enjoyment of the servitude. The manner, frequency, and intensity of the use may change over time to take advantage of developments in technology and to accommodate normal development of the dominant estate or enterprise benefited by the servitude. Unless authorized by the terms of the servitude, the holder is not entitled to cause unreasonable damage to the servient estate or interfere unreasonably with its enjoyment. (Emphasis added.)
​
Relocation
-
Common Law: the location of an easement, once fixed by the parties, cannot be changed by the servient owner without permission of the dominant owner.
-
Re3Prop: Grants the servient owner the right to change the location of an easement, at his expense, if the change does not
-
(a) significantly lessen the utility of the easement,
-
(b) increase the burdens on the owner of the easement in its use and enjoyment, or
-
(c) frustrate the purpose for which the easement was created.
-
​
Scope of Prescriptive Easements
-
Not as broad as an easement created by grant, implication or necessity.
-
Uses not confined to those used during the prescriptive period.
-
Must be confined to those consistent with general uses.
​
Abandonment
1.Physical Act Required
2.Mere Words Insufficient
3.Mere Nonuse Insufficient
​
Methods of Termination
1.Release. Dominant tenement may release the servient. Requires a writing.
2.Expiration. Naturally, upon condition (defeasible easements) or when any necessity ends.
3.Merger. Dominant and servient tenements come under one title.
4.Estoppel. Reasonable detrimental reliance by servient holder.
5.Abandonment. Normally, mere non-use by the easement owner does not constitute abandonment, but in several states a prescriptive easement ends by abandonment upon non-use for the statutory period of time.
6.Condemnation. State or Federal government exercises its eminent domain power
7.Prescription. If the servient owner wrongfully and physically prevents the easement from being used for the prescriptive period, the easement is terminated.
​
23-24
Covenants
Covenants that Run with the Land at Law​
Requirements:
-
Writing: (the complies with Statute of Frauds)
-
Intent: (generally presumed)
-
Notice: (actual, constructive or inquiry)
-
Privity (both horizontal and vertical)
-
“Touch and concern"
​
Horizontal Privity
​
-
The original agreement between the original parties to bind and/or burden subsequent owners of the property.
​
Common Law: horizontal privity is required for the burden to run but not for the benefit
Modern
-
Benefit: horizontal privity is not required for the benefit to run
-
Burden:
-
Some Courts: horizontal privity required for the burden to run
-
Re3Prop: horizontal privity not required for the burden to run
-
Some Courts: notice of the covenant is sufficient
-
​
Vertical Privity
-
The relationship between an original party to the contract and the subsequent owner.
-
Requires the transferee take the same estate as the transferor.
Modern
-
Benefit: Strict vertical privity is not required for the benefit to run. A possessory interest is sufficient.
-
Burden: the party must have succeeded the entire estate of their predecessor
​
Adverse Possession
-
The benefits of most affirmative covenants do not run to an adverse possessor.
-
However, the benefits the following affirmative covenants do run to an adverse possessor:
-
The benefit of covenants to repair, maintain, or render services to the property; and
-
Covenant benefits that can be enjoyed by the person in possession without diminishing their value to the owner of the property and without materially increasing the burden of performance on the person obligated to perform the covenant.
​
Touch and Concern
-
The promise must relate in some way to the enjoyment, possession, or use of the affected land rather than being of personal concern to the original contracting parties.
-
Traditional Rule: both the benefit and burden had to touch either side for both to run
-
Modern Rule:
-
Some Courts: benefit will run even if the burden does not touch
-
Some Courts: burden will run even if the benefit does not touch
-
​
Equitable Servitudes
Requirements:
-
Writing: (part performance or estoppel may substitute in equity)
-
Intent: (a common scheme is sufficient)
-
Notice: (actual, constructive or inquiry)
-
Privity (both horizontal and vertical)
-
“Touch and concern"
​
Elms Covenants
-
The grantee, his heirs and assigns will maintain the garden in proper repair;
-
The grantee, his heirs and assigns will not cover the garden with any building; and
-
Tenants of Tulk residing on Leicester Square shall have the right to use the square “on payment of a reasonable rent.
​
Covenants that run at Law v. Equitable Servitudes
-
Remember, the difference is the remedy.
​
Covenants that run at law
-
Suit for monetary damages
-
English Rule: only landlord-tenant can be in horizontal privity
Equitable Servitudes
-
Suit for injunctive relief
-
It would be inequitable not to enforce the covenant in equity against assignees who take with notice of the covenant
​
Requirements of Equitable Servitudes
For the burden to run,
-
the promise must be in writing or be implied from a common plan of development
-
the original parties must intend to bind successors
-
the promise must “touch and concern” the land
-
the successor in question must have notice
Note: Neither horizontal nor vertical privity is required.
​
For the benefit to run,
-
the promise must be in writing or be implied from a common plan of development
-
the original parties must intend to benefit successors
-
the promise must “touch and concern” the land
​
Statute of Frauds Concerns
-
Real covenants are interests in land.
-
Must be signed by the grantor.
-
The grantee is assumed to accept by accepting delivery of the deed.
-
A real covenant cannot arise by estoppel, implication, or prescription, as can an easement.
​
Restatement (Third) of Property
-
Only one covenant form–the servitude. §1.4
-
The court may enforce the servitude by “any appropriate remedy or combination of remedies, which may include declaratory judgment, compensatory damages, punitive damages, nominal damages, injunctions, restitution, and imposition of liens.” §8.3
​
Creation – Re3Prop §2.1
1)When the owner of land to be burdened “enters into a contract or makes a conveyance [that is] intended to create a servitude” that complies with the Statute of Frauds;
2)When the owner of land to be burdened conveys a lot in a common scheme development or common interest community subject to a recorded declaration of servitudes for the development;
3)If the requirements for creation of a servitude by estoppel, implication, necessity, or prescription are met; OR
4)“If the requirements for creation of a servitude for public benefit [e.g., by condemnation] are met.”
​
Legality – Re3Prop §3.1
​
-
A servitude is valid unless it is illegal, unconstitutional, or violates certain public policies.
​
Termination
Restatement (Third) of Property
1)Merger of ownership of the benefit and burden;
2)A written and recorded release;
3)Plaintiff’s acquiescence, by failing to enforce the servitude;
4)Abandonment, which resembles acquiescence except that it makes the servitude unenforceable as to the entire parcel rather than only as to the plaintiff immediately involved;
5)Unclean hands;
6)Laches; and
7)Estoppel
Changed Conditions Doctrine
-
Traditional: “the changes must be so radical as practically to destroy the essential objects and purposes of the agreement.”
-
Re3Prop: If the purpose of the servitude can be accomplished, but because of changed conditions the servient estate is no longer suitable for uses permitted by the servitude, a court may modify the servitude to permit other uses under conditions designed to preserve the benefits of the original servitude.
​
Validity
Review
-
Beside striking the covenant down under the 14th Amendment, what other Property Rules court the Supreme Court have used to void their effect?
​
Group Homes
-
Does the use of the house as a group home fall within the meaning of the phrase “single-family residence”?
​
Relocation
-
Common Law: the location of an easement, once fixed by the parties, cannot be changed by the servient owner without permission of the dominant owner.
-
Re3Prop: Grants the servient owner the right to change the location of an easement, at his expense, if the change does not
-
(a) significantly lessen the utility of the easement,
-
(b) increase the burdens on the owner of the easement in its use and enjoyment, or
-
(c) frustrate the purpose for which the easement was created.
-
​
Scope of Prescriptive Easements
-
Not as broad as an easement created by grant, implication or necessity.
-
Uses not confined to those used during the prescriptive period.
-
Must be confined to those consistent with general uses.
​
Abandonment
1.Physical Act Required
2.Mere Words Insufficient
3.Mere Nonuse Insufficient
​
Methods of Termination
1.Release. Dominant tenement may release the servient. Requires a writing.
2.Expiration. Naturally, upon condition (defeasible easements) or when any necessity ends.
3.Merger. Dominant and servient tenements come under one title.
4.Estoppel. Reasonable detrimental reliance by servient holder.
5.Abandonment. Normally, mere non-use by the easement owner does not constitute abandonment, but in several states a prescriptive easement ends by abandonment upon non-use for the statutory period of time.
6.Condemnation. State or Federal government exercises its eminent domain power
7.Prescription. If the servient owner wrongfully and physically prevents the easement from being used for the prescriptive period, the easement is terminated.
​
CIC Restrictive Covenants
​
Some Courts:
-
Restrictions imposed in the CID's original declaration or master deed: presumed valid and only unenforceable if arbitrary or violative of public policy or a constitutional right
-
Restricts adopted by majority vote or by the board of a HOA: reasonableness test
-
Do the burdens of the restrictive covenant imposed on affected properties so substantially outweigh the benefits of the restriction that it should not be enforced against the owner?
-
​
Restatement (Third) of Property
-
Presumption that a servitude is valid unless it is “illegal, unconstitutional, or violates public policy.”
-
A servitude violates public policy if it:
1.is arbitrary, spiteful, or capricious;
2.“unreasonably burdens a fundamental constitutional right”;
3.“imposes an unreasonable restraint of alienation”;
4.imposes an unreasonable restraint on trade or competition; or
5.is unconscionable.
​
Business Judgement Rule
In making financial decisions all that was required of a board was that:
1.It exercise its discretion in good faith,
2.after reasonable investigation, and
3.in the best interests of the association and its members.
​
​
25
Zoning
Zoning
​
Euclidean/Cumulative Zoning
-
Higher uses are permitted in areas zoned for lower uses but not vice versa.
-
Note: Refers to use, not value. Commercial land is generally more valuable than residential.
​
Noncumulative Zoning
-
No scaling of uses but rather distinct zones.
-
Generally: commercial, industrial, residential, agricultural, etc.
-
Trial court: “The true reason why some persons live in a mansion and others in a shack, why some live in a single-family dwelling and others in a double-family dwelling, why some live in a two-family dwelling and others in an apartment, or why some live in a well-kept apartment and others in a tenement, is primarily economic. It is a matter of income and wealth, plus the labor and difficulty of procuring adequate domestic service. Aside from contributing to these results and furthering such class tendencies, the ordinance has also an aesthetic purpose; that is to say, to make this village develop into a city along lines now conceived by the village council to be attractive and beautiful. . . . Whether these purposes and objects would justify the taking of plaintiff’s property as and for a public use need not be considered. It is sufficient to say that, in our opinion, and as applied to plaintiff’s property, it may not be done without compensation under the guise of exercising the police power.”
​
State's Police Power
-
“Public safety, public health, morality, peace and quiet, law and order. . . are some of the more conspicuous examples of the traditional application of the police power”; while recognizing that “[a]n attempt to define [police power’s] reach or trace its outer limits is fruitless.” Berman v. Parker (1954)
​
“The line which in this field separates the legitimate from the illegitimate assumption of power is not capable of precise delimitation. It varies with circumstances and conditions. A regulatory zoning ordinance, which would be clearly valid as applied to the great cities, might be clearly invalid as applied to rural communities. In solving doubts, the maxim sic utere tuo ut alienum non laedas, which lies at the foundation of so much of the common law of nuisances, ordinarily will furnish a fairly helpful clew. And the law of nuisances, likewise, may be consulted, not for the purpose of controlling, but for the helpful aid of its analogies in the process of ascertaining the scope of, the [police] power. . . . A nuisance may be merely a right thing in the wrong place — like a pig in the parlor instead of the barnyard. If the validity of the legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control.”
​
Zoning Goals
1)Separation of uses;
2)Protection of the single-family home;
3)Low-rise development; and
4)Medium-density population.
​
Standard State Zoning Act
-
It empowers municipalities to “regulate and restrict the height, number of stories, and size of buildings and other structures, the percentage of lot that may be occupied, the size of yards, courts, and other open spaces, the density of population, and the location and use of buildings, structures, and land for trade, industry, residence, or other purposes.”
-
It permits the division of municipalities into districts (zones) of appropriate number, shape, and area, and provides that regulations may vary from district to district. The regulations must be made in accordance with a comprehensive plan.
-
Under the Standard Act, to enact a zoning ordinance a city must create a planning (or zoning) commission and a board of adjustment (sometimes called a board of zoning appeals).
​
Washington County Zoning Ordinance § 3001(3)(a)
It is the intent of this Ordinance to allow nonconformities to continue. It is further the intent of this Ordinance that nonconformities shall not be enlarged upon, expanded, or extended, nor be used as grounds for adding other structures or uses prohibited elsewhere in the same district.
​
Nonconforming Use
One in which the use or structure was legally permitted prior to a change in the law, and the change in law would no longer permit the re-establishment of such structure or use.
​
Zoning Review
“‘[I]n construing a zoning ordinance, unless manifestly unreasonable, great weight should be given to the construction placed upon the words by the local authorities.’”
​
Options After Nonconformity
1.Right to continue – limited and balanced by continuation/expansion/intensification
2.Abandonment
3.Amortization: wind-up period
4.Vested rights: (quasi-estoppel/quasi-part performance) developer who has gone too far in development in reliance of prior zoning law can shelter under vested rights
​
Variances
In appropriate cases and subject to appropriate conditions and safeguards, make special exceptions to the terms of the ordinance in harmony with its general purpose and intent . . . , [and may authorize] in specific cases such variance from the terms of the ordinance as will not be contrary to the public interest, where, owing to special conditions, a literal enforcement of the provisions of the ordinance will result in unnecessary hardship, and so that the spirit of the ordinance shall be observed and substantial justice done.
​
Plaintiff/Applicant must show:
1.Exceptional and undue hardship: can the property be effectively used without the variance?
2.The variance would not be determinantal to the area: no undue adverse impact
​
Conditions
-
Court may order the neighbors to buy the applicant’s property at fair market value. If they refuse, then they have no cause no complain about the variance.
-
Reasonable restrictions to minimize adverse impact
-
Aesthetic limitations (that run with the land)
​
Area v. Use
​
-
The burden of proof is said to be greater for a use variance than for an area variance.
-
Use variance: permissible uses in a particular area
-
Area variance: setback requirements, lot sizes, room sizes, etc.
-
​
Special Exceptions
-
An exception is a use permitted by the ordinance in a district in which it is not necessarily incompatible, but where it might cause harm if not watched.”
-
Examples: airports, landfills, hospitals, schools
-
Changed Conditions Doctrine
-
Traditional: “the changes must be so radical as practically to destroy the essential objects and purposes of the agreement.”
-
Re3Prop: If the purpose of the servitude can be accomplished, but because of changed conditions the servient estate is no longer suitable for uses permitted by the servitude, a court may modify the servitude to permit other uses under conditions designed to preserve the benefits of the original servitude.
​
Standard Review
“As a legislative act, a zoning or rezoning classification must be upheld unless opponents prove that the classification is unsupported by any rational basis related to promoting the public health, safety, morals, or general welfare, or that the classification amounts to a taking without compensation. . . . Our narrow scope of review reflects a policy decision that a legislative body can best determine which zoning classifications best serve the public welfare.”
​
Spot Zoning
“[Z]oning changes, typically limited to small plots of land, which establish a use classification inconsistent with surrounding uses and create an island of nonconforming use within a larger zoned district, and which dramatically reduce the value for uses specified in the zoning ordinance of either the rezoned plot or abutting property.”
​
Invalid
1.Singles out a small parcel of land for special and privileged treatment;
2.Only for the benefit of the landowner rather than in the public interest; or
3.In a way that is not in accord with a comprehensive plan.
​
​