Property Outline

Benites, Property, Page 1
Table of Contents Table of Contents.........................................................................1 THEORIES OF OWNERSHIP.............................................................4

Labor Theory.......................................................................................4
TYPES OF PROPERTY RIGHTS.........................................................5

Exclusion............................................................................................5
LEASEHOLD ESTATES (NON-FREEHOLD ESTATES)............................6

Categories of Leasehold Estates (3 types of leases)..............................6 Term of Years Tenancy.......................................................................................6 *Periodic Tenancy*.............................................................................................6 Tenancy at Will...................................................................................................6 Tenancy at Sufferance........................................................................................6
CREATING LEASEHOLD ESTATES....................................................7

The Lease...........................................................................................7 Lease v. License..................................................................................7 Doctrines............................................................................................7 Illegal lease doctrine............................................................................................7 Retaliatory eviction doctrine................................................................................7 Implied warrant of habitability............................................................................7 Tenant Duties and Protections.............................................................8 Landlords Duties and Protections........................................................9 Eviction..............................................................................................9 Actual Partial Eviction..........................................................................................9 Constructive Eviction...........................................................................................9 Eviction Remedies for tenants.............................................................................9 LL Tort Liability...................................................................................9
TRANSFER OF LEASEHOLD ESTATE...............................................10

How parties are bound.......................................................................10 Sublease...........................................................................................10 Assignment.......................................................................................10 How Courts Distinguish......................................................................11
FREEHOLD ESTATES & INTERESTS................................................12

FUTURE ESTATES...............................................................................12 VESTING............................................................................................12 DEFEASANCE.....................................................................................13
RULE AGAINST PERPETUITIES......................................................14 CONCURRENT INTERESTS............................................................17

Ownership.........................................................................................17 Types of Concurrent Interests............................................................17 *Tenancy in Common*......................................................................................17 Joint Tenancy....................................................................................................17 Tenancy by the Entirety....................................................................................18 Joint Bank Accounts...........................................................................................18 Profits (Usufructus) and Maintenance.................................................18
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Partition...........................................................................................18
MARITAL PROPERTY DIVISION......................................................20 EASEMENTS................................................................................21

Affirmative vs. Negative Easements...................................................21 Conservation Easements....................................................................22 Appurtenant vs. In Gross....................................................................22 Distinguishing licenses from easements.............................................22 Requirements for the Burden to Run ................................................................24 Requirements for the Benefit to Run.................................................................24 Enforcement v. Voiding......................................................................................24 Termination of Real Covenants .........................................................................24
REAL COVENANTS.......................................................................24
EQUITABLE SERVITUDES..............................................................26 COMMON INTEREST COMMUNITIES...............................................27

Cooperatives (Co-Ops).......................................................................27 Condominiums (Condos).....................................................................27 Community Associations (HOA, POA, PUD, COA)..................................27 Governance Decisions........................................................................27 Nuisance or trespass?........................................................................29 Nuisance remedies............................................................................30 . . . For Public Use . . . ...................................................................31 . . . Without Just Compensation......................................................31
NUISANCE..................................................................................29
EMINENT DOMAIN......................................................................31
REGULATORY TAKINGS ..............................................................32
Three Broad Categories.....................................................................32 Title transfer...................................................................................................... 32 Trespassory takings...........................................................................................32 Non trespassory takings:...................................................................................32 Per se regulatory takings...................................................................32 Elements of Zoning Ordinances..........................................................33 Zoning Amendments.........................................................................................34 Euclidean Zoning...............................................................................34 Zoning and Constitutional Framework................................................34
ZONING......................................................................................33
WATER RIGHTS...........................................................................35 Public Trust Doctrine..................................................................35

Navigable waters...............................................................................35 Natural resources..............................................................................35 Boundaries........................................................................................35 Groundwater, Oil, and Gas Reserves...................................................35 Riparian Rights..................................................................................36
ENVIRONMENTALLY SENSITIVE LANDS..........................................38 STARTING OWNERSHIP CHAINS....................................................39

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First in Time / Rule of Capture............................................................39 Accession..........................................................................................39 Adverse Possession of Land...............................................................39
DEEDS & CONVEYANCES..............................................................41 FINANCING & THE RECORDING SYSTEM........................................44 TRANSFERRING OWNERSHIP OF PERSONAL PROPERTY..................48
Finders Doctrine................................................................................48 Gifts.................................................................................................48 Bailments..........................................................................................50
TRANSFERRING POSSESSION/USE OF PERSONAL PROPERTY..........50 Deed Covenants NOT ON FINAL.................................................51
Property Law THEORIES OF OWNERSHIP Labor Theory The labor theory posits that people are entitled to the property that is produced by their labor. Strong traces of this theory linger in American property law, sometimes mixed with first occupancy theory. There are several notable objections to this theory, one of which is that the theory assumes an infinite supply of natural resources. Utilitarianism: Traditional Theory Under the traditional utilitarian theory, property exists to maximize the overall happiness or utility of all citizens. Accordingly, property rights are allocated and defined in the manner that best promotes the general welfare of society. This is the dominant theory underlying American property law. Utilitarianism: Law and Economics Approach The law and economics approach incorporates economic principles into utilitarian theory. This view essentially assumes that human happiness can be measured in dollars. Under this view, private property exists to maximize the overall wealth of society. Critics question the assumption that social value can be appropriately measured only by examining ones willingness to pay. Personhood Theory Personhood theory justifies private property as essential to the full development of the individual. Under this approach, some items are seen as so closely connected to a persons emotional and psychological well-being that they virtually become part of the person, thereby justifying broad property rights over such items.
TYPES OF PROPERTY RIGHTS (Bundle of Sticks / Rights) Exclusion The right to exclude is a property right that exists to Preserve owner autonomy with respect to property, Protect against unseen harm posed by property Protections of delicate parts of property Protect privacy of owners Promote peaceful relations by giving a legal alternative to self help. Economic efficiency Trespass: Strict liability, violation of the right to exclude. Various remedies for trespass Damages Equitable remedies. . . Especially key for permanent trespass (encroachment) and repeated trespasses ADD SOMETHING HERE Can be limited by (exceptions to exclusion): Nuisance: two incompatible uses Restatement test: balances the harm to find reasonable use. First to start neighborliness test Coase theorem: most economically efficient solution. Necessity Life trumps property storms, acts of god, fleeing animal or assailant, etc. Custom Cost/Benefit Exceptions that arise from assembly costs of obtaining permission to use land. (results in eminent domain or easements) Public accommodation Places of public accommodation cannot have ad hoc exclusion, but may have rules for entry absent constitutional limits. Fair housing laws Unlawful to discriminate in advertising, sales, etc. on face, color, religion, sex, familial status, or national origin. Exception for single-family homes for sale by owner, and when you live in one of up to 4 units in a building. Use/Enjoy and Possession The owner has a right to use and possess his land, which is limited by nuisance laws Profits The owner has a right to the profits derived from his property. Transfer or Destroy Owner has right to transfer land. Restrictions are few, but may be imposed by CL or statute. Balancing test for free expression of property rights Some courts: right to exclude more power, some: more public interest concerned.
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LEASEHOLD ESTATES (NON-FREEHOLD ESTATES) In General A leasehold estate is a legal interest that entitles the tenant to exclusive possession for either a fixed time or at the will of the tenant (or lessee) and the landlord (or lessor). Benefits: Means of financing Spreads the risk. Tenants dont have sunk costs in location; landowner is able to retake land from defaulting tenants Permit specialization in parts of governance
Categories of Leasehold Estates (3 types of leases) Term of Years Tenancy Fixed period of years Any term longer than a year must meet the SOF No notice requirement to terminate because it is predetermined
*Periodic Tenancy* Lasts for an initial fixed period, and automatically renewed Landlord or tenant must give advanced notice terminates by ending renewal Yearly leases require a six month notice
Tenancy at Will Lasts as long as both parties want Either party may terminate at will At common law, no notice. Modern law requires notice equal to period of time at which rent payments are made.
Tenancy at Sufferance What occurs when tenant no longer has rightful possession but is not ejected. The landlord is free to evict the tenant at any time, but must make a removal action. Tenant offer of rent commences a periodic tenancy. A lease for your whole life is a freehold tenancy. Non-freeholds must fit into 1-3 above. Statutory Tenancies: rent control & co-ops different rules, protected by statute.
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CREATING LEASEHOLD ESTATES The Lease Contractual obligations The lease is the heart of the landlord-tenant relationship. Almost all states have a Statute of Frauds that requires a lease for a term of more than one year to be in writing, set forth the key lease terms, and be appropriately signed. Covenants Independent covenants are those independent of the other partys act. Remedy is in breach of contract. Dependent covenants must only be fulfilled if corresponding duty is.
Lease v. License Test: Courts look for intent of parties by interpretation & relationship Default Rule (both): All party interests transferable but you can only transfer what you have Lease (property right / interest PLUS K) Easement vs. in rem property Exclusive possession (temporary) Use right Non-revocable (ends at term end) Exclusive Argue: rent, long, sublet or assign provision, no property description, language tenant, LL, etc, uninterrupted possession Doctrines Illegal lease doctrine A lease of property that violates one or more housing codes that renders the property unsafe and unsanitary voids the lease. Retaliatory eviction doctrine A landlord cannot engage in retaliatory eviction, where he evicts a tenant in retaliation for complaining about housing conditions or taking other action to correct such conditions. Implied warrant of habitability Applies to residential lease (usually not applied to commercial) and deems them to contain an
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License (a K or less) Personal Use right Revocable If consideration or estoppel you can revoke but you will have to pay K damages Often non-exclusive Argue: no description, personal, control kept w/owner
implied warranty that the premises are in habitable condition and landlord will maintain them in that condition during the lease term. The tenant must notify landlord of defects and allow a reasonable time for repairs. Cannot be waived. Remedy for breach is to: Move out, or Remain in possession and: o (1) withhold rent (depending on jurisdiction may be allowed); o (2) abate rent; or Method 1: Reduce rent by a percentage equal to percent devaluation of the property Method 2: Reduce rent by the difference between the promised rent and the actual value. o (3) tenant repairs and deducts the cost from rent. Tenant Duties and Protections Duty to Pay Rent Duty to pay rent is a dependent covenant based on the right to quiet enjoyment Eviction releases duty to pay Partial eviction only requires a partial payment. Constructive eviction occurs when the landlord is notified of but does not ameliorate a substantive, chronic interference with the tenants right to quiet enjoyment; sometimes required to vacate the premises to show constructive eviction. If the landlord has a privity relationship to another individual violating quiet enjoyment, the landlord must use leverage to moderate the behavior of the other tenant. The duty is extinguished upon release by the landlord, merger (where tenant acquires freehold), expiration of the lease, eminent domain, a breach of the right to quiet enjoyment, frustration of purpose, and surrender. The landlords remedies are SIR: Surrender (accept the tenants offer to leave the lease). Tenant is liable for rent due up to the point of surrender. Ignore the tenants abandonment and sue for damages, or Re-enter and re-let for the tenants term (mitigation). Typically established through a clause. Differs from surrender in that an inability to re-let despite good faith efforts holds the tenant liable for the lost rent.
Duty to Repair The duty to repair is an independent covenant that requires the tenant to keep premises in reasonably good condition and avoid waste; remember, removal of a fixture is waste. Perversely, it remains even if the tenant has been evicted.
Landlords Duties and Protections Duty to Deliver Vacant Possession The landlord must deliver actual, legal possession of the vacant premises at the start of the lease. Duty of Quiet Enjoyment The landlord must not interfere with the tenants right to use and possession of the property by actual or constructive eviction. (This is a contract claim.) Additional duties The landlord must exercise reasonable care to prevent injuries from dangerous conditions. Eviction Actual Partial Eviction Requires actual physical trespass locks on door, building structure over property, etc. Dont need to show use & enjoyment impacted because obvious Constructive Eviction Use & enjoyment impacted so much that you cant use it (often times) You must actually leave! o SNG substantial, notice & opportunity to cure, get out proves no use/enjoy Interference in value: cut off electric, rodents, fumes, noise, etc. If you leave: no rent, but if you dont could have to pay some of it Eviction Remedies for tenants Terminate o Vacate without further rent liability Withhold rent (abatement some / all) o Pay partial rent for partial eviction Cure & deduct costs o Fix it yourself and get reimbursed by deducting from rent Sue for K damages or specific performance o Remain in possession & continue paying rent during suit LL Tort Liability Duty, Breach (failure to act reasonably after knowledge), Injury, Causation LLs have duty of reasonable care In some cases: Strict Liability if Injury & Causation o LLs should take care to avoid Least Cost Avoider
TRANSFER OF LEASEHOLD ESTATE How parties are bound Privity of contract Bind parties in contract with one another Obligations are those found in the contract (here, the lease) Privity of estate Bind parties where As interests are directly carved out from Bs, and A is in actual possession of the land. Obligations are those covenants that touch and concern the land and are intended to run. Safe to say they will include the same as landlord-tenant. Both parties may sublease & assign by default: K must specify any constraints Residential: courts tend to allow subjective denials by LLs Commercial: courts use objective reasonableness requirement on LL
Sublease A transfer of less than 100% of the tenant/sublessors interest to a sublessee. Privity of contract between: Tenant/subleasor and landlord because of the first lease Tenant/subleasor and the sublessee because of the sublease No privity of contract between the landlord and the sublessee. Privity of estate between: Tenant/subleasor and landlord because tenant/subleasor has retained some amount of interest carved directly out from the landlords interest. Tenant/subleasor and sublessee because the sublease transferred some portion of the tenant/subleasors interest. No privity of estate between the landlord and the sublessee because the sublessees interest is not carved directly out from the landlords.
Assignment A transfer of 100% of the tenant/assignors interest to an assignee. Privity of contract between: Tenant/assignor and the assignee through the assignment contract Tenant/assignor and the landlord through the lease. No privity of contract between landlord and the assignee Privity of estate between: Landlord and the assignee because the assignees interest is directly carved out of the landlords (tenant/assignor transferred everything) No privity of estate between the tenant/assignor and landlord because the assignment transferred all of the tenant/assignors interest.
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An assumption is an express agreement by which the assignee agrees to be bound by privity of contract with the landlord. It does not remove privity of contract between the tenant/assignor and landlord. A novation is an agreement to erase any privity of contract between the tenant/assignor and the landlord. It does not create privity of contract between the assignee and the landlord.
How Courts Distinguish Language of lease / assignment Where payment goes (subleasor or LL) Entirety of rights & possession if subleasor retains anything sublease
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FREEHOLD ESTATES & INTERESTS FUTURE ESTATES Checklist for determining defeasible: 1. What the basis here: life estate or fee simple estate? 2. Who has the future interest? Grantor or Grantee 3. If grantee - you can call it FS/EL - executory interest 4. if its a grantor - is the language durational or conditional 5. once you answer all those questions you can determine what interests you have in the defeasible estates Present FSA Fee Simple Absolute LE Life Estate NO!!! YES!!! (for sure, people will definitely die) Future Grantor (O) NONE!!! Reversion (Always Vested) (A) Grantee (B) NONE!!! Contingent Remainder (Vested Remainders) Id. V R FSD (durational / determinable) Fee Simple Determinable FS / SCS (if FI in O) Fee Simple Subject to Condition Subsequent FS / EL (if FI in B) - Fee Simple Subject to Executory Limitation Yes!!! (mayyybe) Possibility of Reverter (Always Vested) Right of Entry (voluntary taking) (Always Vested) N/A VR Sub VR Sub to to Open Complete Divestment
Executory Interest (Always Contingent) N/A
Yes!!! (mayyybe)
Yes!!! (mayyybe)
Executory Interest (Always Contingent)
VESTING Remainder is vested if both: 1. Ascertainable holder a. Born must already be born b. Identifiable must be able to tell who it is NOW 2. No condition precedent (nothing has to happen first) VR Subject to Open: One child (of A) is already born class is open, closes on As death. VR Subject to Complete Divestment: You are vested but could lose before taking possession. (could die, or present holder could violate limitation ie build a farm when hes not allowed)
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Contingent remainders ALWAYS have an alternate path. DEFEASANCE Durational until, while, during, so long as; determinable or automatic Conditional but if, provided, however, condition; terminable subject to condition subsequent
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RULE AGAINST PERPETUITIES ONLY APPLIES TO: Executory Interest Vested Subject to Open Contingent Remainder The rule A future interest is void the moment it is created if: It is in a grantee, Is either contingent or subject to open, and It might still exist and still be contingent or subject to open longer than 21 years after the death of the last person alive at the time of the conveyance. Application 1. Draw vertical lines to separate the different interests and identify the state of the title according to the conveyance 2. Look for any future interests in a grantee 3. Check future interests in grantees to see if they are contingent or open. 4. Identify the necessary factual developments for vesting and closing. 5. Circle all lives in being 6. See if the interest might still be contingent or open longer than the lifetimes of everyone circled plus 21 years. See if there is a validating life. 7. If the contingent interest violates the rule, strike the whole interest and revise the classification of the title. 8. If there is another contingent or open interest in a grantee, repeat the process. RAP danger signs Beware if it is a conveyance or a devisement. Conveyance occur while alive, but devisements at death. Some classes (like children) could The condition is not personal to someone There is an identified age or time period of more than 21 years The interest is given to a generation after the next generation A holder must survive someone who is merely described rather than named. An identified event that need not happen well within 21 years. Holder is unascertainable until the death of someone described but not named.
RAP in the 21st Century Exemptions exist for charitable donations, but only if both the first grantee and the following grantee are charities. In addition, perpetual trusts (dynasty trusts) are increasingly common.
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The RAP has been reformed to make the time period year based rather than lifetime based, or to include wait and see periods in which the RAP waits to see if the interest will vest rather than requiring that it must vest or fail within the live in existence + 21 years. Cy Pres allows courts to reform the grant o Fulfill intent of grantor Grant Saving Clauses o People put in lists of names 4 people, entire NYC phone book, etc. cant find out when all the people die USRAP: Wait until interest vests & see if 90 years passed or if there is a validating life. o Not for commercial o Alaska has 1000 yr wait and see approach o Dynasty trusts: trust lasting generations for families exempt from RAP. Restraints on Alienation Public policy: when we grant someone a fee they are allowed to sell it. L-T law: alienation has to be reasonable, non-discriminatory, duty to mitigate What would be unreasonable? o Unreasonable duration, price (disproportionate for ex.), purpose (no legitimate reason for it) Courts may apply RAP or a balancing / reasonableness test
Doctrine of Waste 1. Commissive / Voluntary / Affirmative Waste a. You actually do something commit active waste. 2. Permissive Waste: a. Act of omission b. Failure of duty reasonably maintain & preserve property (reasonable person standard) 3. Ameliorative Waste a. Change in nature / character of land which drives property up b. Improving the property is this bad? i. One persons improvement might not be an improvement to another ii. I want my family home, not a townhouse community, even though it might make me money hurts me not the property c. What about the person with LE? The present property holder? Rule: Whether or not something is waste: depends on the context of whats happening in the circumstances. Not just a solid line. (Melms v. Pabst) Test: Duty, Breach, Caused Damage Recovery Options: 1. Damages (decrease in value) 2. Specific Performance (or injunction) 3. Appoint Receiver
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4. Terminate Possessory Interest
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CONCURRENT INTERESTS Ownership In all concurrent interests every owner has the right to possess the whole, exclude strangers, use the property for profits, partition, or sale. No owner can oust other co-tenants. All have duty to maintain. Types of Concurrent Interests *Tenancy in Common* Default form Each tenant has a separate undivided interest Undivided in that all have the right to possess the whole May still have different sizes and types of interests No survivorship: Each interest is descendible, conveyable, and devisable. Share of profits and costs relate to size of interest Destroyable by partition. Joint Tenancy Requires the four unities Acquired title at the same time Acquired title by the same deed or will Each interest must be the same in type and size Each tenant must have an equal right to possession. Right of Survivorship: Not descendible, devisable or alienable. Severance converts to a TIC. Sever (unilaterally or not) by: Suit for partition Sale Conveyance to self through strawman Lease Only works in certain jurisdictions. 3 perspectives: 1. Lease ends upon death of the leasing co-tenant 2. Lease causes temporary severance of joint tenancy during term of lease, but joint tenancy reforms after lease. 3. Lease causes conditional severance. If either co-tenant dies before lease term ends, joint tenancy becomes TIC, but if not the joint tenancy remains. Mortgage Lien theory jurisdiction (majority): Mortgagee is considered to have lien on the real estate to secure repayment of debt. Borrower continues to hold title, therefore, no severance. Title theory jurisdiction (minority): Lender is considered to own the legal title but the borrower owns the equitable title and the right to possession. Consequently, severance.
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Fragile & can be destroyed by any part even w/o knowledge & permission. Why do this? Tax avoidance no estate tax upon death Cheaper than writing a will Not typically what homeowners want.
Tenancy by the Entirety Joint tenancy plus unity of the person (marriage = one person) Neither spouse can sever on their own. Terminable by: divorce, the death of one spouse, mutual agreement of the spouses (cannot unilaterally sever). 30 states have outlawed these and you end up with TiC if you try to create TbE. Joint Bank Accounts Treated as joint tenancies. Three reasons for having: Agree to pool because of nature of relationship (marriage) Create a will substitute so that money transfers to other party upon death Assist dependent persons by allowing another to make withdrawals and purchases for their assistance. Each cotenant only entitled to an equal share (typically half) of account Profits (Usufructus) and Maintenance Partition Any cotenant can sue for partition without reason and court will grant Partition in kind: literally cut the property into equal shares Partition by sale: judicial sale of the property and distribution of proceeds Offset: suing for contribution opens you up to suit for accounting even without ouster. Ouster: concept not really a suit. Use that equals exclusion. Recover your share of rent, but if not actually excluded, you wont get anything. Suits for accounting recover an owners share of the profits. All owners have a right to the profits, in proportion to their ownership share, even if absent Suits for contribution recover money owed for maintenance. The maintenance was needed and notice was provided. All owners are obligated to pay for maintenance or improvements done with mutual agreement. At partition, each co-owner will be credited/debited for the value of any improvements undertaken by him and the other owners.
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Upside Down Doctrine: improvement, all share in value but dont have to pay until you sell: then you get profits as result of improvement and dont have to share extra profit. BUT if you waste / lower value: same applies difference charged to you.
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MARITAL PROPERTY DIVISION Theories of Property Ownership & Division Common Law: his & hers + Tenancy by Entirety (if allowed in state) Community Property States: Separate & Community Property o Separate: anything from before marriage, and gifts received separately (including testamentary, descent, etc.) o Community: anything acquired by A or B during the marriage o Proposals for separate to become community over time in marriage
Divorce Division of Property CL: entitled to share property acquired together and/or to one of you during marriage o Equitable division All property that either person has Reallocation of value How do we divide? Ad Hoc / No Rule / Courts Discretion Factors: contribution to marriage, duration of marriage, ability to keep standard of living after marriage, fault (getting less common) o Spousal Support Alimony getting less common Enforcement issues, changes over time, hard to divide, nice clean break When do we still do it? Why? Unable to pay upfront, preserve marriage sanctity, not bailing out poor spouse but entitlement of other spouse Community Property States: o Presume 50/50/ split of community property (CA is strict 50/50) o (Spousal Support)
Death Division of Property CL: cannot disinherit your spouse o Spousal share / Elective share allows spouse to select a certain percentage or 1/3 of the estate usually of his/hers floor not a ceiling if I leave all to X, spouse still gets -1/3 if you want to disinherit your spouse, do it when youre alive or divorce Community o 50% of community property o 0% of separate (unless there is a will) Professional license property? Only in NY. Cannot hold marital property outside marriage no community property, no TbE Contract (will not imply due to anti-palimony statutes, only express Ks enforced) Unjust Enrichment / Reimbursement / Promissory Estoppel
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Property Structure: partition, give away to get rid of survivorship, cohabiting not enough EASEMENTS
Easements are a type of servitude An easement is a K (enforceable as a property right) in which an owner agrees to waive his right to exclude certain kinds of intrusions by another. It is a contract approach to conflicting uses. Classifications Benefited land is dominant tenement, burdened land is the servient tenement. In addition, there are negative and affirmative easement, and easement appurtenants and easements in gross. (Require) Deeds to easements (per SoF): 1) Writing 2) Delivery (intent, actual physical transfer, acceptance) 3) Notice Actual, Inspection (duty: you should see easements there), Record BFPs can take title from merchants even if dont have good title Recording Act: certain people w/o notice get good title if no way they could have known Affirmative vs. Negative Easements Affirmative Easements The right to go onto and do something on serviant land. (e.g. rights of way, right to lay utility lines, right to put up a billboard) Negative Easements The right to compel the serviant owner to refrain from doing something otherwise permissible on his land.
Only four categories: Light Created by: Air Prescription: Support The use is 1) open and notorious, 2) Stream flow (artificial) adverse and under a claim of right, and 3) continuous & uninterrupted Must be created by grant. for the statutory period. Warsaw. Implication: Fontainebleau. Implied by: 1) severance of title to land held in common; 2) an existing, apparent, and continuous use when severance occurs, and 3) reasonable necessity for the use at time of severance. (Probably only for commercial. And, How Much very strictly interpreted.) Crane. Necessity: Requires: 1) severance of title to land held in common; and 2) strict necessity at the time of severance. Schwab.
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Grant: Must meet SOF. Conservation Easements Negative easements in gross Biggest growing area of easement law Prevents certain land uses for: environment, to prevent too much comm. Development Prohibit development after death dead hand give piece of mind to current owners. Donate your interest & receive tax deduction express grant, heavily lawyered. Objections: perpetual in nature, public funds, lack of oversight & flexibility Enforcement: no oversight, should we allow private individuals to sue? Appurtenant vs. In Gross Appurtenant in rem (runs with land) An easement appurtenant benefits the easement holder in his capacity as owner of the dominant tenement. Must have 2 parcels of land involved, and runs with either of the parcels. In Gross in personum An easement in gross benefits the holder in a personal sense, whether or not he owns particular land. Rare to run with person. Only need one parcel of land. If held for personal reasons it is non-transferable, but if it is held for commercial reasons may be transferred by writing (like RRs).
Profits A profit (aka profit a prendre) is right to enter the land of another and remove timber, minerals, gravel, game, or other physical substances. Distinguishing licenses from easements A license is not a property interest. It is a mere privilege to go onto another's land for some delineate purpose. As such, they are not subject to the statute of frauds and may be revoked by the grantor so long as the grantee does not rely upon it. If the grantee relies upon it, there develops an easement by estoppel. Reliance must include: 1) a license, 2) an expenditure of substantial money or labor in good faith reliance; and 3) the licensors knowledge or reasonable expectation that reliance will occur. Holbrook. Scope of Easements Scope may evolve over time as the manner, frequency, and intensity of use change. Courts look at language, context, & treatment to determine intent. Where, who, how, how much. Termination of Easements Terms of original grant AP / Adv. Prohibition of Use Deed of easement back Estoppel Merger of dominant & servient estates Marketable Title Laws Abandonment (holder stops using & clearly manifests intent to relinquish) Conveyance of burdened land w/o notice to a BFP nothing in record Third Party w/ Superior Rights (foreclosure on dominant land)
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Impossibility (changed circ. / look to grant language, RARE earthquakes, etc.)
Misuse: considered trespass, follows tp remedies + possibility of injunction against using it Goals of Drafting Easements 1. 2. 3. 4. Easement: (not a fee) put in that language In Gross: only to C as long as C owns / limits to possession Scope: type of use, where, how much / how often Relocation: right to relocate to easement to another location which doesnt harm easement holder within 2 days notice 5. Not Exclusive 6. Remedies: provisions & duration for termination, misuse & no longer need = termination 7. Maintenance: who will handle it 8. Holder not allowed to pave it 9. Holder must put in fence if dominant land holder requests 10. Liable if cattle strays off easement
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REAL COVENANTS Covenants distinct from easements Affirmative or negative promise concerning use of land. (Easement is a property interest.) Covenant is a contract creature of law with damages as the remedy. Creation of a Real Covenant Law distinguishes between original parties & subsequent. Original covenant simply promise. 3 Step Analysis Enforceable at all? Contracts question substantive. Does it run? Benefit & burden where necessary (below) Remedies available for covenant not being kept o Law: damages & injunction //// Equity: injunction only (no priv. req) Requirements for the Burden to Run WITHVN (HP + VP) Writing (SOF consideration) Intended to run with the burden (broadly interpreted) Touch and concern the land (relate to the direct use or enjoyment) Horizontal privity and Vertical privity. Horizontal privity: Privity of estate between the initial covenant makers. (e.g., landlord/tenant). CL: exists in grantor-grantee relationships. Neighbors do NOT have HP. Vertical privity: Ownership chain. Notice to burdened successor Neponsit Property Owners Assoc. Requirements for the Benefit to Run WITV (VP) Writing (same as above) Intent (same as above) Touch and concern the land (same as above) Vertical privity (only vertical, not horizontal) Restatement / Modern - WIN Writing: reasonable person looks at record Intent: original K parties courts may infer based on surrounding circumst., reliance Notice: not binding on BFP w/o it (Record, Actual, Constructive notice rules) TC & VP old rest. requires, new doesnt
Enforcement v. Voiding Consent: questionable actual knowledge but deemed by purchase, terms often bundled & non-negotiable, but no real alternatives as all properties in area have same covenants Public Policy: anti-competition must be rel to pub purpose, alienation & discrimination Termination of Real Covenants Covenants end upon abandonment, changed conditions, or merging. Abandonment occurs when the conduct of the person entitled to the benefit of the covenant demonstrates the intent to relinquish her rights. Changed conditions occur when conditions in the area of the burdened land have so substantially changed that the intended benefits of the covenant cannot be realized.
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Merger occurs when same landowner owns both the benefited and the burdened lands.
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EQUITABLE SERVITUDES What Is an Equitable Servitude? It is a promise concerning the use of land that 1) benefits and burdens the original parties to the promise and their successors and that 2) is enforceable by injunction. It is a creature of equity with an injunction as the remedy. Tulk. Creation of an Equitable Servitude Like a covenant, an equitable servitude is made by promise. For an equitable servitude to run with the land, it must be WITN: Writing (with covenants) Intent (with covenants) Touch and concern the land (with covenants) Notice to burdened successor (applies to the burden, not the benefit) Special Problem of Equitable Servitudes and the Subdivision If a developer manifests a common plan or common scheme to impose uniform restrictions on a subdivision, most courts conclude that an equitable servitude will be implied in equity, even if the Statute of Frauds is not satisfied. Restatement on Equitable Servitudes The Restatement only requires intent and notice. It does not require a touch and concern element because of freedom of contract. In addition, it sets these public policy/unconstitutionality limits that servitudes cannot 1) be arbitrary, spiteful, capricious; 2) unreasonably burden fundamental rights; 3) unreasonably restrains alienation (or competition); 4) be unconscionable.
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COMMON INTEREST COMMUNITIES CICs planned community where entire community subject to whole bunch of covenants. 80% of homes built in last decade are CICs. Types of Common Ownership Communities Cooperatives (Co-Ops) Leasehold + business assoc: 1) perpetual leasehold interest and 2) share in biz assoc. Association to govern owns the whole building tenants only have leaseholds. Condominiums (Condos) By state statutes: 3-D ownership, now can own FSA. (financing, ownership, etc. good) Units owned in FSA, Common areas / elements owned as TIC o Balconies: kind of like exclusive use easements o Taxes: you pay for unit plus % of common areas Association to govern does not own purely admin board of directors, managers, everyone has a right to vote if you own (so if you lease from owner: no vote) Community Associations (HOA, POA, PUD, COA) You own your own lot & pay taxes on it Common areas shared & taxes paid out of membership fees easements to use Dont need association for individual lots, only common areas o Manager to manage common areas (some states req. to be licensed & disclose) HOAs are liked by developers, local governments, and buyers Governance Decisions Declaration creating CIC will impose biding restrictions (usually enforceable as real covenants or equitable servitudes) on all units in the project. (CC&Rs: covenants, conditions, and restrictions or just covenants) Statutory law will trump any restrictions laid out in the declaration. Can contest decisions, but not the documents. Can CICs bring suit for violation of covenants? 4 Factors: Capacity for adversarial position Size & composition to represent community interests seeking to enforce Adverse effect of decision sought to be reviewed by group represented Whether full participation is available to residents (in the governance) Disputes Disputes will be about governance decisions or disputes between neighbors. Pullman. Buying a unit/lot and joining the community Frequently required to purchase share in HOA/condo with the purchase of the land lot Finances & community responsibilities
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The HOA will be responsible for common maintenance, and will assess owners for cost based upon budgets. Failure to pay can lead to a lien on the property being imposed through the courts. Use restrictions Use restrictions are an important part of the appeal of a community, and will typical require the property be used for residential purposes only. In addition, it may impose restraints on leases. Architectural covenants Important to preserving home values. The covenants may be broad (regulating down to the color of a door) or narrow (regulating only additions). Rules & regulations Noise: Can impose limits on the number of decibels Nuisance: The declaration needs to define what a nuisance is for the purposes of the home owner association. Increasingly, smoking is a nuisance. Parking: Limited supply, don't want unlimited demand. Pets: Can limit type and quantity of animals. Majestic. Enforcement Fines, leins, restrictions on use of common property. Courts look to notification, arbitrariness, waiver. Is P being singled out? Amending Covenants There must be a process documented in the bylaws for amendments. As long as followed, you cannot complain if you did not object to the bylaw that allowed the change in the first place. UCC 2-207: Additional terms vs. different terms Different includes additional BUT additional does NOT include different Additions dont mean all modifications, but modifications DO include additions We dont always like modifications BUT we usually like additions Process Unfairness / Discrimination Implied powers everyone should know at some point they may assess dues Minority interest holders / Tyranny of majority: May have followed process for amendments but treated one group unfairly. 99% residential decide to up fees for comm. Properties abuse of power (Colin Ranch) Change setback requirement and now corner lot cant build unfair to 1 person (Boils)
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NUISANCE Nuisance or trespass? CL: if invasion is something smaller than the eye can see it is a nuisance. Cleveland-Cliffs Iron --Liability for nuisance predicated on ability to show damages, trespass only requires invasion. Nuisance Substantial injury required for recovery Annoyance or invasion Intangible objects Elements: No actual entry Indirect injury Invisible object Law of Nuisance Restatement Nuisance: non-trespassory invasion of anothers interest in the private use and enjoyment of the land. It is illegitimate, reckless, or unreasonable. An illegitimate nuisance is an immoral one. A reckless nuisance is one that becomes worse with time. Reasonableness is a balancing issue of the gravity of the harm against the utility of the use. It is easier to prove unreasonableness in public nuisance cases than private nuisance. Other concepts English common law: A nuisance is an invasion, no matter how small, onto a property that causes significant harm. Normal use concept: When faced with incompatible uses, the atypical use is a nuisance. Temporal priority: If uses are incompatible, first to start wins. Dont award coming to the nuisance. Neighborliness: If someones actions/use is intended to annoy, it is a nuisance Reciprocal Problem: Coase: intersection of property interests (legit) Use A v. (legit) Use B. Ex. Confectioner & Doctor big machines shake ground. Not prob next to someone else. Intersection between both of them that causes the conflict. Nuisance per se Trespass Strict liability Invasion Physical object Elements: recovery Actual injury Direct injury for substantial Viewable object
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An activity that is a nuisance in any circumstance and in any location regardless of the reasonableness of it, or which violates a law specifically designed to prohibit a nuisance. Luensmann v. Zimmer-Zampese & Associates. Nuisance remedies Either property (an injunction) or liability (a fine). Del E. Webb. Remedy/Protection Property Liability has the right to clean air; has the right to clean air; Protect by Protect with Injunction against assessing damages ( can keep polluting s use if he pays) Boomer has the right to pollute; Protect has the right to pollute; Protect by by denying s suit (no relief) assessing damages for shutting down ( can get clean air if he pays) Spur
Entitlement
Def.
Plaintiff
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EMINENT DOMAIN Nor Shall Private Property . . . Any type of private property may be acquired through eminent domain. . . . Be Taken . . . Government first attempts to negotiate a voluntary purchase. If negotiations fail, the condemning agency brings suit. . . . For Public Use . . . Boyacks 5 purposes - Takings Clauses 1. Owned by Government for Public Use 2. Owned by Government for Government Use 3. Owned by Private Party for Public Use 4. Owned by Private Party for Private use with beneficial public effect (public externalities) a. Eliminating a harm b. Creates trickle down benefit: private externalities & rest of community benefits c. THIS IS KELO Majority 5. Owned by Private Party for Private use with no beneficial public effect (purely private) Stevens Majority: 1-4b are okay Kennedy concurrence adds big to benefit in 4b OConnor: 1-4a are OK Midkiff argument, what is the blight on neighborhood Thomas: 1-3 are OK disparity, powerful oppress weak, he would overrule Berman & Midkiff . . . Without Just Compensation Just compensation equals fair market value objective sale price Ways to determine fair market value without arms length transaction o How much property appreciated from most recent sale o Adjust from recent transactions of similarly situated properties o Value of an assumed rate of return from rentsReplacement cost (how much owner have to pay for similar land) Fair compensation = opportunity cost value (objective measure of highest use) Does not include value of the govt project (assembly) o BUT includes aggregate value of all temporal interests (=FSA value) o Does not include owners subjective valuation
Quick Takes Governed by statute Government proves (or it is assumed) taking is for a public use. Title then transfer to the government o Government puts money in the courts holding for the landowner. Court determines final award of fair compensation Any excess money is paid back or shortfall paid out.
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REGULATORY TAKINGS The Takings Problem At some point, land use regulation may so restrict an owners rights as to become a takingthus requiring the payment of compensationeven though government does not physically occupy the land. Defining when such a regulatory taking occurs is one of the most controversial issues in property law today. Three Broad Categories Title transfer Everyone knows its a taking, no argument. Trespassory takings Government forces private landowner to accommodate unwanted physical intrusions not necessary for health and safety of occupants taking away right to exclude Non trespassory takings: Government regulates property so intensely that it substantially destroys or significantly lowers its value. Harder to prove. Government imposes burdens unreasonably on the property of a small group of persons for benefit of society at large. The Modern Standard: Penn Central Transportation Co. v. New York City Three factor balancing test to be applied generally to any takings claim: 1. The extent of the diminution in value, 2. The extent to which the regulation has interfered with distinct, investmentback expectations, and 3. The character of the governmental action. Weigh the benefits and burdens Boyacks list of regulation that isnt eminent domain Regulation eliminating right to destroy Regulation eliminating right to sell Regulation eliminating right to transmit property upon death Boyacks regulation that is: eliminating the right to exclude Per se regulatory takings 100% loss of value in the land Trespassory takings
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ZONING Elements of Zoning Ordinances The typical state zoning enabling act empowers a city council or other local legislative body to: (1) adopt a comprehensive plan; (2) enact a zoning ordinance; and (3) delegate administrative authority to an appointed board Zoning: 1. Local code that regulates which uses are permitted in which areas. Typically a map designating areas and descriptions of types of uses for each area. Uses are described both by inclusion (permitted uses) and exclusion (prohibited uses). Areas are often further limited w/ respect to permitted building size and shape and location a. Based on segregating uses b. Creating law based on comprehensive plan Comprehensive Plan: 2. Typical first step in designing communitys zoning, involving drawing areas designated to various use classifications on map of the county. Will prescribe types of future uses will be allowed, and provide for interconnected development elements like transp., infrastructure and open space. Prepared by prof. experts hired by municipality and not strictly speaking a legally enforceable regulationnot an admin. act, (guidelines rather than actual rules). Conditional Use Permits: 3. Specifically negotiated variation to the basic regulatory use designations (set forth in the map), b/t landowner and local govt specifically allowing certain use to exist if otherwise neither proscribed nor explicitly permitted. Such approvals are quite common. Often conditional, requiring certain compliance acts. Variances: 4. Approved departure from basic regulatory use designations (set in map), b/t landowner and local govt granted b/c of specific hardship that regulation causes on landowner. Hardship must not be self-imposed and typically more than financial, often resulting from some special feature or problem of land itself (ex. irregular lot size). a. To get approval, land owner must show a) undue hardship by having to otherwise comply w/ regulations and b) no negative impact on property values of lots around Subdivision Approval: 5. Discretionary permission granted by municipality to landowner or developer to change lot designations and/or layout of certain land. Typically includes map to be filed in land records to clarify lot dimensions and boundaries and ensure available infrastructure and neighborhood compatibility and coord. Approval often requires developer to pay for road, schools, firehouse, etc. (Like a K with a municipality) Planned Unit Development:
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6. Essentially a K b/t developer and municipality, creating a zoning effect (rather than a covenant effect.) Allows for mix of uses as described in approved site plan, and once approved becomes the zoning itself (trumping designation to contrary code) (K with dev) Overlay Zones: 7. Additional layer of regulation of use for particular area. Typically adds to use (and other) designations already created by regulation, so both layers will govern land use in that area. Performance Zones: 8. Regulations aimed at restricting certain types of outputs rather than uses. Often used to deal w/ noise, air and water pollution and hazardous materials. Buffer Zones: 9. Transition areas so-designated by the regulatory authority to ease the transition between different types and classes of land use. Non-conforming Uses: 10. If a regulation is passed that disallows current use of property, virtually all municipalities offer some relief to affected landowner. If land was previously in conformance w/ a prior iteration of land use law, then these use rights are typically seen as vested. Because of vested use rights, such land owners either can maintain this use or will be granted some period of time during which they can gradually bring their property into eventual compliance (amortize) w/ the new law. (Sometimes called grandfathering a use.) Zoning Amendments Zoning ordinance may be modified by zoning amendment adopted by city council or other local governmental entity. Most jurisdictions will invalidate such amendment if it constitutes spot zoning: rezoning that confers a special benefit on a small parcel of land regardless of the public interest or the comprehensive plan. Euclidean Zoning USSC upheld constitutionality of zoning in famous decision of Village of Euclid. Ct held zoning ordinance rational basis test. The ordinance was a cumulative zoning scheme with hierarchy of uses. In any zone the use can be that zoning designation OR a higher use. Ex: Highest zone is for Single family Homes Under is for apartments. Can build apts or single family homes Under is for office. Can build office, atps or single family Under is for retail. Can build retail, office, atps or single family Zoning and Constitutional Framework Although Village of Euclid upheld zoning as constitutional, it may be challenged under the Equal Protection, Due Process, and Takings Clauses, plus the First Amendment protection for freedom of speech and religion. In addition, state constitution concerns come into play. (e.g. Township of Mt. Laurel where the NJ SC invalidated a zoning statute aimed at excluding low income groups based on an state constitutional obligation to meet a certain fair share of the regional need for low income housing.)
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WATER RIGHTS Public Trust Doctrine Public trust doctrine: certain resources preserved for public use, and the government is required to maintain them for the public's reasonable use public is the owner that benefits If you can categorize something as a navigable waterway then you can regulate it! Navigable waters Most often invoked in connection with access to the seashore. State laws differ, in general limits rights of ocean front property below mean high tide line o Most states allow free access to intertidal zone for walking, swimming, sunbathing, etc. This does not always include right to cross private land to reach the shore but prevents private owners from excluding the public below the mean high tide line. o Massachusetts and Maine (exception states): allow private ownership far as mean low water line but allow for public rights to fish, fowling & navigation (w permits). Natural resources Doctrine has also been used to provide public access across & provide for continued public interest in those areas where land beneath tidally influenced waters has been filled. o In some cases: limited (ex: to transportation) & others, provision for public access. Most states: lakes and navigable-in-fact streams are maintained for drinking and recreation purposes under a public-trust doctrine. Boundaries Accretion: land mass increases by sediment deposits Avulsion: change is sudden, rather than gradual one like erosion, boundary will stay same o So even if the river changes, the boundaries stay the same for the land Subsurface ownership boundaries are same as those on surface, projected downward to center of earth o Roman legal principle: ad coelom: own things in a column to depths & up to space Groundwater, Oil, and Gas Reserves CL Rule of Capture (English): 1st person to "capture" resource owns resource (you have to actually take control, once your ownership vested, you dont lose by losing possession) o Ex: landowner who extracts or captures groundwater, oil, or gas from a well that bottoms within the subsurface of his land acquires absolute ownership of the substance, even if it is drained from the subsurface of anothers land Owner that captures substance owes no duty of care to other landowners
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o Ex: a water well owner may dry up wells owned by adjacent landowners without fear of liability, unless the groundwater was withdrawn for malicious purposes, the groundwater was not put to a beneficial use without waste, or (in Texas) "such conduct is a proximate cause of the subsidence of the land of others" o Cant extract the substance from someone elses land by drilling on a slant. Reasonable Use (American): cant use it in unreasonable or wasteful way: use what need o Owner of land overlying a groundwater source has the right to pump as much groundwater as he/she can put to a reasonable use on the overlying tract o Correlative rights: All landowners share rights to the available water from a groundwater source over which they own land on an equitable basis, such as pro rata according to acreage overlying the groundwater source Note: Off-tract uses permitted if there is a surplus of water) o Prior Appropriation: Rights to pump and use groundwater have relative superiority and protection in accordance with the time at which the pumping first began Senior appropriators cant prevent new wells that might affect their rights o Permits: many states require perm. from state agency before can pump groundwater Riparian Rights Eastern states: Owner of land bordering on or straddling a body of water has a right to reasonable use of water flowing past or through his or her property o Traditionally riparian owners couldnt divert the water; now some uses have been allowed if consistent w public interest or if no injury to co-riparians o CL: riparian landowners enforce rights by claims against competing riparian landowners; allege harm from competing users unreasonable uses of shared waters P must prove unreasonableness & injury to his/her riparian rights Western States: first in time, first in right / rule of capture o Rights to divert water form a system of priority according to when a person or entity diverted the water, senior appropriators have the superior right Junior appropriators must reduce/cease their diversions in reverse order of seniority if theres a drought or reduced flow o Fundamental elements of an appropriation right to water are: 1. Intent to put the water to a beneficial use (prohibits waste- must employ reasonably efficient methods for using water) 2. Actual diversion of prev. unappropriated water from surface waterway 3. Application of the water to a beneficial use; and 4. Relatively continuous use of water (seasonal/occasional interruptions ok) o Anti-speculation doctrine: investors or speculators in water cant acquire rights for future uses if they do not put the water to beneficial use now o Abandonment: appropriation right will be lost if the appropriator evinces an intent to abandon the right and acts in a manner that unequivocally manifests this intent Forfeiture: non use that exceeds the statutory period
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Hybrid States (along the pacific coast): follow both systems- legislation that req. water users to obtain permits from state regulatory agency to acquire a legal right to use water o Prior appropriation dominates & only historically exercised ripar. rights recognized
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ENVIRONMENTALLY SENSITIVE LANDS 1. a. b. c. d. e. 2. a. b. c. d. Traditional View: served non-ecological values Economically productive use of land Wealth creation and preservation Human liberty and autonomy Social order Property = bundle of rights Special features of environmentally sensitive lands: Vulnerable to environmental impact (erosion) Provide resource values Have aesthetic or ecological values Threat of extinction of plants/animals
3. Endangered Species Act- prohibits any person/entity from adversely modifying the critical habitat of federally listed endangered/threatened species without a permit a. Just v. Marinette: Owner of land has no absolute and unlimited right to change the essential natural character of his land so as to use it for a purpose for which it was unsuited in its natural state and which injures the rights of others i. Not unreasonable exercise of power to prevent harm to public rights by limiting use of private property to natural uses ii. Ordinance prevents changing of natural character of land near a lake/river because of such lands interrelation to the contiguous water iii. May provide more economical value to the owner but causes harm to public iv. Public Trust Duty 1. Requires state to promote navigation, protect and preserve waters for fishing, recreation, and scenic beauty v. Value based upon changing character of land at expense of harm to public rights is not essential factor or controlling. b. Palazzolo: Regulations promulgated by council protected coastal salt marshes as "coastal wetlands,'" on which construction was severely limited i. Rule: a claimant does not waive his right to challenge a regulation as an uncompensated taking by purchasing property after the enactment of the regulation challenged because 1. such a principle would make constitutionality of a regulation a matter of passage of time, thereby creating [SOL] on a constit. right 2. such a principle also prejudices owners at time of regulation, whose ability to transfer land has become seriously impaired; and 3. such a principle would create different and unequal rights between different classes of owners (old and new owners)
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STARTING OWNERSHIP CHAINS First in Time / Rule of Capture No one owns wild animals in natural habitats. Under CL capture rule, property rights in animals acquired only through physical possession. First person to kill or capture wild animal acquires title to it, bc they are first to provide notice of possession & maintain control over the possession Pierson v. Post. o Fox hunt case: Court held that the true owner is the first to actually kill, capture, or mortally wound the animal. Accession Allocates ownership to owner of thing with closest connection to it (ex. allocating offspring of animals to owner of the animal). If you create something new out of raw materials owned by someone else, you could possibly be the owner of the new thing you created. Requires good faith. If you knowingly use anothers materials, ownership in your finished product will typically be granted to the owner. Object must be transformed must use prior materials to make new, distinct thing. Most value of object must be derived from your labor rather than owners materials. Does not apply to land, but grants rights to things produced from landowners land. Adverse Possession of Land Exists to punish current owners for failure to exercise diligence and failing to use the land while rewarding those that may have begun to develop a personhood attachment to the property. NOT available against the government Can be protected against by providing a revocable license to use the land or an easement to use a limited portion of it. AP must bring action to quiet title to the land. Elements: Requirements of adverse possession: OCEAAN. [O] Open Both the use and the property line must be open and notorious. Manillo (Objective) DOES NOT matter if the first owner knew. Must only be such that a reasonable owner who inspects the land would know. Usually a fence, house, etc. being built makes it open & notorious. [C] Continuous The adverse use of the land must have continued for the statutorily defined period. You can tack on the time of any preceding adverse possessors, so long as they met the other requirements and there is privity of claim. Tolling: Timing begins from when the first owner could have brought a claim. If the first owner is disabled, the timing tolls (stops) until disability lifts. o Disability must exist when AP began 1. Infancy (SOL ends at 18 + 5 years) 2. Insanity
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3. Imprisonment 4. Military Service
[E] Exclusive Must deny the first owner some right to the land. [A] Actual Must be actually used. [A] Adverse Possession must exists under a claim of title or right Color of Title / Bad Title: AP has claim on paper. o AP has a claim to all the land encompassed within the title except that used by the true owner, even if AP was only using a portion of the titled land. Claim of right: no title, but have been using land and claim a right to continue using it. o In all cases you only get the part of the lot you were actually possessing. o Minority positions: Majority: Good faith belief allows adverse possession. Minority: Bad faith belief allows adverse possession. o Majority position: If you acted like it was yours and can establish with objective evidence than it is yours. [N] Notorious Goes with open. The claim must be such that it could be known to the public at large. Prescriptive Easement / Easement by Prescription Whereas AP will result in full title to that land upon the expiration of the SOL AP of easement for full statutory period will result in easement by prescription to the user. o Accompanied by requirements for AP (OCEAAN) Defenses to Prescription: self help (build a fence), sue for trespass, report a crime to the police, give permission for a specific period so that the use has to cut off Note: No negative easements by prescription in US, only UK Boundary Disputes / Equitable Boundary Adjustments Open and notorious means occupation is obvious, not the boundary o Minority: if reasonable owner would know where boundary was, thats O&N o NJ: if you have a boundary dispute, you have to have actual knowledge Possibility 1: A owns the entire strip because of 20 year continuity Possibility 2: B sues for trespass and A petitions to the court to adjust survey via Quiet Title Action (finalizes your absolute title possessor) Agreed Boundaries: courts can adjust bound. if all TREAT bound. as something else o Uncertainty about the true location of the boundary o Agreement about a fence/natural boundary (can be express/implied from either/both of the neighboring landowners marking line & both acting as it were boundary)
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o Mutual acquiescence in location of line, usually manifested by each neighbors possessing up to agreed upon boundary o Acquiescence must be for a certain period of time DEEDS & CONVEYANCES Deeds Pass Legal Title Anyone can write, no required form, simple requirements: o Intent to convey / sell with this instrument o Names of parties o Description of Property: exact size, shape, & location (read literally by courts) If inadequate, doesnt transfer anything If only describes part of larger tract, but doesnt identify part, defective. No other parcel should fit same description. Must be enclosed area Cannot properly describe land in sq. feet 3 types: 1) Government Surveys (29 states), 2) Meets & Bounds (TX & E. Coast), 3) Reference to Recorded Platts much easier Easily understandable, forever understandable Description should correspond exactly with land intended to be conveyed: substantial landmarks, area, distance, and direction o Consideration o Signed by person to be charged (seller) o SOF: must be in writing. Notary: least cost avoider for forgery Defense lawyers can use: o Adverse possession for boundary disputes o Rules of interpretation to figure out inconsistencies Mistaken improvements (ie on wrong land): o Sell property or keep improvements & pay improver o If A improves Bs land in good faith, may ask for equitable relief but may NOT demolish w/o consent of landowner may be required to pay waste if does so. Water Boundary: stream is boundary, division follows thread of non-navigable waterway o Avulsion original stream remains boundary (sudden change) o Accretion owner gains land as water recedes Legal Delivery for conveyance to occur, deed must be delivered o Requirements: Present intent (by grantor) + physical transfer + acceptance Notarized usually presumes intent Recorded presumes delivery o Types of Delivery Manual / Physical: delivery of signed deed (escrow delivery usually good) Constructive Deliv.: actions equivalent to delivery relinquish to 3rd party Recording may show intent to deliver Safety Deposit Box delivery to a box
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o Grantees knowledge of location & access to box required o If grantor can reclaim not legal delivery Attorney instructions to deliver upon grantors death = delivery One challenging delivery may do so by preponderance of evidence Co-Tenancy: if you retain part of estate, conveyance automatic when creating co-tenancy Brokers Types o Mortgage Brokers: help with financing property o Leasing Brokers: help with leasing o Realtors: brokers that help in purchase & sale agreements o Listing Broker: agent of the seller, owes seller fiduciary duties o Cooperating Broker: works closely with buyer and is agent of the listing broker and therefore sub-agent of seller (even if he/she never meets them) o Dual Agency: broker who represents both buyer and seller (must disclose to both) Everyone owes seller fiduciary duties o 1. Duty of disclosure o 2. Loyalty o 3. Confidentiality brokers still have to disclose certain things o 4. NJ has discl. notice cooperating broker must say not lawyer & are sub-agent Duties to Seller o Agreement between broker & seller (Agency Agreement) 1. Exclusive Rights: best for broker still gets commission if owner sells 2. Exclusive Agency: only listing broker can bring buyers in 3. Open: sellers like any broker can bring whoever sells gets commis. o Broker is fiduciary o Broker must use due care, diligence, & disclose all offers to seller Duties to Buyer o Sellers broker owes duties to the buyer o Broker who misrepresents property is liable to buyer for that misrepresentation. o Warn of material defects (impact value or unknown to buyer but known to broker) o Limited duty of disclosure limited due to seller / buyer conflict MLS: connection between listing broker & cooperating brokers Three phases of land deal: o Purchase & Sale Agreement o Due diligence / executory period / pre-closing Financing Physical condition of land Legal Title status (marketable title) o Closing (title) = delivery of deed Brokers get commission when sale goes through. o 1. Condition fails no commission ie condition for financing realtor form MAY make buyer liable to broker for commission
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o 2. Buyer default Modern (inc. NJ): no commission Traditional: yes commission Broker can sue buyer if the buyer defaults o 3. Seller default commission o 4. Impossible no commission
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Marketable Title No document called title chain of title established by deeds of sale. Title that a reasonable and prudent businessperson, with knowledge of facts & their legal ramifications, would accept. o You can never argue title problem if you agreed to something in record o Reasonably free from encumbrances (title must appear free of defects) 1. Chain of title 2. Right of possessor 3. Undisclosed future interest holders 4. Lien (subject to mortgage or big claim) 5. Non possessory interest in property (easement or covenant) encumbrances that make unmarketable (title defect) o negatively effects the value some are okay ie electricity easements, etc. o doesnt effect the value 6. Encroachments (never on record, cant be agreed to in sale K) building goes over easement or boundary area very bad most likely unmarketable 7. Non-legal title issues / Government issues o Insurable doesnt mean marketable (title insurance only gets you damages) Insurance payments may not equal costs to cure Buying a lawsuit is not marketable title Marketable Record Title Act: limits title searches to 30 yrs & voids earlier interests FINANCING & THE RECORDING SYSTEM Mortgages Conveyance/retention of interest in real prop. as security for performance of obligation. o Obl. Arises from a loan made by mortgagee to mortgagor Equitable Right of Redemption (ERR): mortgagor may redeem property from mortgagee even if payment is late UNTIL foreclosure sale. o Court will not allow parties to contract out of ERR. Statutory Right of Redemption (SRR): specific amt of time (6-8 mos) AFTER foreclosure mortgagor may redeem property from purchaser at forecl. price + interest & expenses The Note: the obligation / actual proof of the debt must be recorded. Date stamped. o Mortgage is the collateral itself no note is like no consideration, doesnt work. Payment Waterfall (based on date-stamp). o 1st mortgage (2005) $500K o 2nd mortgage (2007) $200K o 3rd mortgage (2009) $50K o house sells in foreclosure for $800K goes down waterfall paying each, leftover is for the owner o house sells for $480K goes down waterfall paying each until runs out
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mortgage (collateral) interest is gone for all of them each have a separate claim to bring against owner using the note Foreclosure Process: o Judicial Sale (file lawsuit) expensive & time consuming o Non-judicial Sale (auction on courthouse steps or other location) Far more popular in states where its allowed Borrowers like it because dont have to pay court costs Issue: can happen without judicial oversight (not done right) Statutes supposed to protect against this happening Sales of Property Subject to Mortgage o A person who acquires secured property normally takes subject to security interest, unless the security interest has a due-on-sale clause o Grantee not personally liable for debt, unless agreed to assume it, but since holds subject to security interest, will lose prop in foreclosure if fails to make payments. Original borrower remains liable promissory note unless lender releases Factors that make a sale look like a mortgage: o 1. Intent for loan o 2. Price Adequacy looks suspicious if just 50% of market value o 3. Behavior after sale does seller possess, pay taxes, improve? borrower o 4. Process of negotiation & relationship between parties o 5. Originally seeking loan and they said give me your deed, will not look like sale. o 6. (Motive for characterizing it this way?) Mortgage (Transfer of interest in property as security for performance of obligation) Mortgagor Mortgagee None. The lender holds transferred interest in property. Usually judicial foreclosure sale. Deed of Trust (Transfer of interest in property as security for performance of obligation) Trustor Beneficiary Trustee Usually power of sale foreclosure sale.
The owner of property who uses the property as security for performance of obligation. The obligee, lender, or person who extends credit. Third party, often a title company or bank, that holds property in trust as security. Method of foreclosure
Recording CL: One cannot convey what one does not own o First in time, first in right Exception: where second holder has legal interest as BFP w/o notice UCC 2-403: you buy as a BFP from a merchant and seller didnt own it you still get it o Original owner can make a claim against seller possibly get some remedy Recording Acts: what must be recorded?
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o Every instrument by which interest in land, legal or equitable, created / modified. Not only FSA, but also LE, mortgages, restrictive covenants, tax liens.
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Recording System o Notice to the world that land is conveyed. o BFP: one who purchases (1) for valuable consideration (2) w/o notice at the time of any problems with the grantors title. NOT BFPs: people who receive interest as a gift (devise or inheritance) CAN prevail if they record as subsequent purchaser has notice Not required for race statute o One who takes from a BFP will prevail over any interest over which BFP would have prevailed once BFP has good title he passes good title. Recordation o Title passes on delivery, not recordation o Must deliver to records office Value (consideration) o Not necessarily money Ex. Can be extra time to pay back a loan Purchaser protected from time consideration paid (even if deed recorded & delivered) Marketable Title Act: (see above) only have to look back 30-40 yrs for recorded titles. Recording Process: o Filing: county recorder date stamps & makes copy. Copy goes into deed book. o Indexing: recorder indexes to know which deed book in which to find the copy. Grantor / Grantee Index: organized by both grantee & grantor names Search necessary to find judgment & federal tax liens by debtor Start with grantee index trace back to grantor and then by that grantor as the grantee etc. until you find the root (30-40 yrs). Then to grantor index trace the chain back to present from the root to see if any other encumbrances (easements, etc.) o Note: wont find wild deeds if recorded after subsequent deeds which stayed in chain of title Tract Index: organized by parcel of land, find everything on one page Recording Acts o RACE statutes: Whoever records first Can essentially convey property one has already sold / does not own o NOTICE statutes: Is B a BFP? If yes B gets property, we dont care who records. Actual Notice what you do know Constructive Notice what you should know Record (must search records) so if A recorded B cant be BFP o B required to search land, probate, & tax lien records Ground Inquiry you must look around you! o RACE-NOTICE statutes: (1) Did B record first (race)? (2) Is B a BFP (notice)? B must have BOTH 1 & 2 in order for B to win.
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o Shelter Rule: one who has good title can pass good title even if purchaser not BFP If B wins over A, B can pass to C, even tho C not BFP (C knew about A). TRANSFERRING OWNERSHIP OF PERSONAL PROPERTY CONTENTS FINDERS DOCTRINE GIFTS Finders Doctrine The first finder has superior title to everyone but the true owner. He does not extinguish the true owners rights in the thing, but creates a subsidiary chain of title, subject to the true owner, as a bailee. Finders prevail over converters (converters act in bad faith) But first converter usually prevails over subsequent converters First finder always prevails over second finder Constructive possession exists, and will block first finder from possessing, when: Item is a fixture on someone elses land; it is locus in quo. The finder is a trespasser. The location is private (like a home). The finder is an employee of the land owner. The true owner has deliberately put the item on someones land intending to retain possession but forgets where it is; mislaid. UCC exception: If a merchant sells a found item (which he cant do because it is a bailment) a bona fide purchaser will be able to keep the item. Gifts A valid transfer of property via gift there must be a delivery, which requires: Intent to transfer title by donor Actual physical transfer of possession by donor to donee Can be manual (physical transfer), constructive (transfer means of obtaining access, e.g. a key), or symbolic (use of a symbol for the object). If there is an agent used for delivery, there is no delivery until the gift leaves the agent. If there is a non-agent used for delivery passing it onto the non-agent constitutes delivery Acceptance of ownership by donee Intervivos gifts: Gifts while alive and passing on. Testamentary gifts: Gifts by will Causa mortis gifts: conditioned on the anticipated subsequent death of the donor occurring as anticipated. Gifts causa mortis are scrutinized by courts and must meet the delivery requirement for gifts.
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TRANSFERRING POSSESSION/USE OF PERSONAL PROPERTY CONTENTS BAILMENTS IP LICENSES Bailments A Bailment is created when there is an owner transfers lawful possession to one who is not the owner. Bailments can be involuntary (finders) or voluntary (valets). Voluntary bailments: when you know who you are handing the possession over to. Strictly liability for delivery because there is a least cost avoider Exercise diligence in respect to the duty of care. Bailments for the bailors benefit = lower duty of care; for the bailees benefit = higher duty of care. Can be trumped by contract Involuntary bailments: When it is lost or misplaced. Reasonable duty to take care and take back, but not strictly liable. After sufficient statutory time, may take into possession
To create a bailment, there must be actual transfer of possession/control over the property. They have both contract aspects (agreement or implied agreement between bailee and bailor) and property aspects (in rem rights of bailee). Bailees have rights to the property over other people and can enforce these rights as property rights.
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Deed Covenants NOT ON FINAL Three Types of Title Assurance for Buyers Covenants of Title Title covenants or covenants of title are express promises by the grantor about the state of title being conveyed. If one of these covenants is breached, the grantee (and sometimes his successors) may recover damages from the grantor. The law has traditionally recognized six title covenants. 1. The covenant of seisin (present covenant)warrants that the grantor is the owner of the estate described in the deed; 2. The covenant of right to convey (present covenant)warrants that the grantor has the legal right to convey title; 3. The covenant against encumbrances (present covenant) warrants that there are no encumbrances on the land. 4. The covenant of warranty (future covenant) is the grantors promise to defend the title against other claimants 5. The covenant of quiet enjoyment (future covenant) warrants that possession will not be disturbed by anyone with superior title. 6. The covenant of further assurances (future covenant) is a promise that the grantor will take other actions that are reasonably necessary to perfect the grantees title. Present covenants are breached at closing; accordingly, the relevant statute of limitations begins running at that point. Both the original grantee and successors have standing to sue for breach. A future covenant is breached when the grantee is actually or constructively evicted by one holding superior title, and only the grantee has standing. The measure of damages for breach is the purchase price plus interest. Title Insurance Policies A title insurance policy is a contract of indemnity between the issuing company (the insurer) and the property owner or mortgagee (the insured). The insurer promises to compensate or indemnify the insured against losses caused by covered title defects. The standard policy covers four types of risks: (1) if title to the estate is actually held by someone other than the insured; (2) if there is an encumbrance on the insureds title; (3) if title is unmarketable; and (4) if the insured has no right of access. The broad coverage afforded by the standard policy is limited by various exceptions and exclusions. For example, adverse possession issues are typically excluded from coverage. In some states, an insurer can be held liable in negligence for failing to conduct a reasonably diligent title search for the insured before issuing the title policy. Title Diligence Researching marketable title as required in the cases due diligence on the part of the buyer.
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Benites, Property, Page 1

Table of Contents Table of Contents.........................................................................1 THEORIES OF OWNERSHIP.............................................................4

TYPES OF PROPERTY RIGHTS.........................................................5

LEASEHOLD ESTATES (NON-FREEHOLD ESTATES)............................6

CREATING LEASEHOLD ESTATES....................................................7

TRANSFER OF LEASEHOLD ESTATE...............................................10

FREEHOLD ESTATES & INTERESTS................................................12

RULE AGAINST PERPETUITIES......................................................14 CONCURRENT INTERESTS............................................................17

Benites, Property, Page 2

MARITAL PROPERTY DIVISION......................................................20 EASEMENTS................................................................................21

EQUITABLE SERVITUDES..............................................................26 COMMON INTEREST COMMUNITIES...............................................27

REGULATORY TAKINGS ..............................................................32

WATER RIGHTS...........................................................................35 Public Trust Doctrine..................................................................35

ENVIRONMENTALLY SENSITIVE LANDS..........................................38 STARTING OWNERSHIP CHAINS....................................................39

First in Time / Rule of Capture............................................................39 Accession..........................................................................................39 Adverse Possession of Land...............................................................39

Benites, Property, Page 3

TRANSFERRING POSSESSION/USE OF PERSONAL PROPERTY..........50 Deed Covenants NOT ON FINAL.................................................51

Benites, Property, Page 4

Benites, Property, Page 5

Benites, Property, Page 6

Benites, Property, Page 7

Benites, Property, Page 8

Benites, Property, Page 9

Executory Interest (Always Contingent) N/A

Executory Interest (Always Contingent)

4. Terminate Possessory Interest

Impossibility (changed circ. / look to grant language, RARE earthquakes, etc.)

3. Imprisonment 4. Military Service

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