Spring 2017

Gatewood

Real Property Outline

5 Multiple Choice Questions, 5 fill in the blank, 1 Short Answer, 1 full blown IRAC

Intro/ Acquisition of Property/Capture Rule/Finder’s Law

Introduction:
Property interest: The legal relationship between a series of interest known as property
interest, with attached rights.
● Properties and the attached interest in relation to the use and ownership, in all
becomes the ultimate relationship of who has the greater interest between both
parties, to determine the most appropriate ownership in relation to one another.
● Property and it’s true relationships are completely based on the established case law
and existing law in order of establishing whether there is property or not.
● Property= interest in an object in relation to other parties on a legal standard.
● Series of interest.
○ Rights attached to the interest = property rights
○ Certain types of interest may have a different sets of conditions and titles
that may apply to the appropriate situation.
Ownership= interest in an object
● Not a complete control

Rule of Discovery: First person to discover land has superior interest

The John Locke Labor Theory=Anyone who has performed any acts of labor on property
and doing so gains the right on the property. Used in relation of the homestead principle

Capture Rule
Capture Rule:
1. In order to acquire a superior interest in animal in natural habitat,
2. the person to first occupy it by killing it OR mortally wound it without giving up the pursuit of
it OR capture/trap by relieve it of its natural liberty and
3. exercise dominion over it.
● Only applies to wild animals and the determination of who's right are superior
towards the ownership of the animal.
○ Helps us resolve issues regarding captured animals.
● Overt act to take possession. Possession is a mortal wound.
● Give superior interest to whomever gains complete control over a wild animal in its
habitat by killing, trapping with net/traps and depriving it of its liberty or mortally
wounding it without giving up chase and takes it under their possession
● An exception to the rule that the captor must have physical control over the animal is
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in the case where custom is more effective at getting animals killed. If the killer of
the animal makes marks of appropriation, he gets it.
● Must be the first person to occupy it and take possession of it
● Possession occurs when an animal : killed by the person ,or mortally wounded, and
not giving up pursuit of the animal, or must exercise control and dominion over the
animal, that deprives of its natural freedom
● Must also take the appropriate steps to secure possession of the animal once it’s
found.
● The term animus revertendi is a Latin phrase that means "With intention to
return". It can refer to an animal that is under the care of another, which
distinguishes it from an animal ferae naturae (wild beast). It is a type of ownership
right recognized by property law. It mostly refers to animals whom have a tendency
to return to a particular location, or person, and as such is considered domesticated
as a result because it has forgone it’s natural habitat.

Constructive Possession: Landowners are possessor of wild animals on their land.

● Any wild animal that is captured, then escaped is wild again since it regained its
liberty
● Ratione Soli: it is a justification for assigning property rights to landowners over
resources found on their own land.
○ Latin phrase meaning "according to the soil" or "by reason of the
ownership of the soil."
○ Anything found within your property, in this case an animal, is considered
your property as you hold the sole interest of the property in which it’s
found , and anyone that interferes with the use of your law is considered a
trespasser.

Finder's Law
Finder’s Law: One who finds property hold superior interest to everyone in the world except
the true owner depending on type of object and where it is found.
● It is concerned with how the property was lost, who is suing whom and where it was
found. How it was lost determines what rules we are going to use. Where it was and
the circumstances under which it was found determines who the original possessor
was.
● Possession is the first person with the intent to control the property and there has to
be an overt act to take control.
● The finder is the first person to gain possession of the lost, or unclaimed property.
● Possession( in which you must have sufficient dominion or control of the item, must
have:
1. an intent to control the item, AND
2. overt act to control the item, AND
3. but for an intervening cause, would had gain control of the item.

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Acquisition / Possession
General Rule: Owner of property does not lose title by losing the property, still persists even if
it has been lost or mislaid. Finder has superior right to everyone but the true owner
A. Ex. Amory v. Delamirie, where chimney sweep finds jewel, takes it to jeweler for appraisal,
jeweler tried to keep it but court rules that chimney sweep is the prior possessor and has
the superior right to possession (even in case of trespass or theft). Prior possessor
wins’ b/c (Policy):
a. Protects owner that has no indicia of ownership
b. Expects to prevail (want laws to match expectations of society)
c. Rewards honesty, and protecting finder rewards labor in returning useful item to
society
B. True owner → Possessor (even thief) → Subsequent possessor
C. Possession – acquirement of physical control over object and an intent to assume
dominion
D. Constructive possession – Law treats that something is in your possession even if you are
unaware of it (ex. landlord constructively possesses items in house)

Lost Property
Rule: When lost property is found on the land of another, the finder of it as long as they are
legally on it has superior rights to the property unless it is attached to, buried in or embedded in
the land then it goes to the land owner based on the rule that anything attached to your land is
yours.
Finder has superior right to everyone but the true owner

Determining what type of property it is under 4 classifications

1. Lost Property:
Property is considered lost if the owner involuntarily and unintentionally parted with the
lost item and does not know about its location or whereabouts
a. The original owner always maintains ownership over the property
b. The finder of the lost item has superior rights over everyone except the owner
i. EXCEPTION: IF the found item, is found on top of the land belonging
to someone else, AND if allowed to be on the property the original
finder has superior rights to everyone, including the landowner of
where the item was found.
ii. EXCEPTION: If the finder finds the property on someone else
property (by trespassing) the finder has no rights, the real property
owner has the superior right to it.
1. If there is no trespass the finder has superior rights even to
the landowner
iii. EXCEPTION: If the item is also found within a landowner's property ,
and over time has become embedded within the land, then as part of
constructive ownership, then the ownership rights goes to the
property owner.
iv. EXCEPTION: Employee is the finder of lost property, within the
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capacity of his employment, then the employer would have superior

rights.
v. Objects found in private home or place generally go to the owner
unless: Exception: Owner is not in possession (see: Hannah v. Peel
and the broach that was lost and awarded to Hannah after finding it in
Peel’s home that he had no yet moved into)

2. Mislaid Property:
Where the owner intentionally places the item in some particular place with the idea that he
will intentionally retrieve it but later forgets about it and doesn’t retrieve it.
a. Notion that they would come back for the item
b. Mislaid property is the same rule as a Lost Item, with the exception depending on
where the item was found, the owner of that property has the superior rights.
i. If it’s truly mislaid property, the law presumes that the original owner
will retrace their steps and attempt to recover it, as such the owner of
the property would be placed in the best position to return that item.
ii. EXCEPTION: When ownership is established, prior to the appearance
of a person with superior rights to your own, and from that point, if
that item has been sold, or such, then you would have the
responsibility to compensate for that value. Also if the finder has
found the item within another property, then an analysis has to be
established on what side did more to gain dominion and control over
the item.

3. Abandoned Property:
Where the owner intentionally and subjectively relinquishes all rights to the property.
a. Time alone is not sufficient enough to determine abandonment.
b. Real property cannot be abandoned.
c. Abandoned goes to the finder and he has rights over it, against the rest of the
world including the original owner as it was assumed that the original owner had
relinquished.
i. EXCEPTION: IF the abandoned item is found fixed and embedded on
someone’s land, then through constructive ownership, it belongs to
the landowner.
ii. EXCEPTION: If the finder has a legal right to be on the property, and
the finder has made an effort to gain dominion and control of the item
superior to that of the owner of the land, the rights go to the finder.
d. What factors are used to determine an item's status as abandoned: the condition
of item, where it is located, the time passed.

4. Treasure Trove:
Consists of gold or silver coin or bullion hidden by an unknown owner in the distant past.
a. Treasure goes to the finder, unless it’s found affixed, attached and or embedded
on someone else’s land and as such it’s considered the owner of the property.
b. EXCEPTION: If the item is not treasure trove and is found under the soil, then it
goes to the owner.
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c. The surface level rule: An item must be well within the ground in order to
be considered treasure. However, if an item is deeply embedded on the earth, but
visible on a surface level it can be considered buried.

OTHER EXCEPTIONS:
● If the finder is an employee that finds an item within the scope of his employment,
the rights of property would go to the employer.
● If a child is the finder, then the Parent has rights over the item in relation to the age,
and status of the child.
● If finder is a trespasser, then the Owner always prevails.
● If finder is on the premises for limited purpose, such as cleaning the house, then the
owner is entitled to any object found.
● If the object is under the soil, it is always awarded to the owner UNLESS it is a
treasure trove, in which case, it will go to the finder.
● Objects found in private home or place generally go to the owner unless:
Exception: Owner is not in possession (see: Hannah v. Peel and the broach that
was lost and awarded to Hannah after finding it in Peel’s home that he had no yet
moved into)
● Titled Property cannot be abandoned, only if relinquished by the original owner.

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Adverse Possession
Adverse Possession: If an owner does not take legal action to eject a possessor who claims
the land, and the statute of limitations has expired, then the owner is barred from bringing
action against the possessor, who now has title to the land

Elements
Each element is measured by the conduct of an average owner in relation to nature & character
of the land and all the elements must be met for 20 years (unless otherwise specified).
1. Actual: Adverse possessor must physically use the land the same way a
reasonable owner might with the same type of nature, characteristic & location of
land
a. Triggers COA, and starts the SOL running.
b. If actual entry on part of land, may be in constructive possession of the
rest
2. Exclusive: Possessor cannot share the land with the true owner or general public
3. Open & Notorious: Adverse possession is so obvious, the owner knows.
a. It is so open, notorious and visible manner that constitutes a reasonable
notice to the owner that they are claiming dominion.
b. Note: does not mean that the true owner must be aware of them, just that the
community viewing the property would consider the adverse possessor’s actions
as open and notorious.
c. Exception-If it is not open & obvious- The owner must have actual
knowledge or notice (Boundary Dispute) Related to nature of land
4. Adverse & Hostile: The possession must be without the owner’s consent
a. Majority: Without owner’s permission
b. Minority: Good faith belief that the property is yours (under claim of
rights)
c. Special Rules Governing Boundary disputes
i. Agreed Boundaries – oral agreement will be enforced if parties live
with it for a long period of time
ii. Acquiescence – even if haven’t reached statute of limitation, but you’ve
lived with it for a long time, just have to deal with (some sign of
agreement required for this to be valid)
iii. Estoppel – if one party remains silent while the other is building
property to their detriment (i.e. if someone is building a garage on your
property and you know but don’t say anything), then you do not have a
cause of action against that person
iv. If someone mistakenly believes land to be theirs, and uses it in open

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and notorious way, they have claim to land under adverse possession
1. The mistaken innocent improver may be forced to pay
damages to the party they are possessing against depending on the
statutes within the jurisdiction
5. Continuous: Use must be continuous relating to the nature, character and
location of land.
a. A summer home is only used for the summer
b. Adverse possession statute of limitations may be severed if adverse possessor
leaves for extended period of time, or shows intent of not returning.
i. Any interruption by true owner for the purpose of regaining
possession resets the statue of limitations
c. Tacking: combining adverse possession lands together to meet the time
statute-only permitted when there is a legal transfer (privity) between
possessors
i. privity of estate – voluntary transfer and you have a relationship with
the other person)
1. Can also be tacking of statute of limitations periods against
owners of property
ii. Each possessor separately has to meet all the elements for the
period of time they had the property

● Effect of adverse possession

o Title acquired by adverse possession cannot be recorded in courthouse, so if
adverse possessor wants to have title recorded (and receive rights to sell
property), must file a quiet title suit against the former owner.
● Possessor’s rights: Has all the rights of a possessor while they are in the process of
adversely possessing land
o Note: once you have established adverse possession, it does not matter your
intent. So if the true owner claims the property and you didn’t know that you had
acquired title by adverse possession, you must execute a written deed to give title
back to owner since it is subject to the Statute of Frauds

Constructive Adverse Possession

Color of Title: Refers to a claim founded in a written instrument that is defective/invalid
● Adverse Possession due to a defective document that makes you believe that you should
be on the property.
● Can shorten statute of limitations (goes from 20 to 10 years)
● Still has to prove all the elements of original adverse possession

If actual entry on part of land, may be in constructive possession of the rest

● Only in constructive possession of the rest if it is the same plot of land and
adverse possessor has color of title (color of title = defective deed).
o However, can only constructively possess the same plot of land that you are on,
and CANNOT constructively possess entire property if others are in possession of

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that part

Privity: legal relationship b/w 2 parties.

● When one party transfers their interest. Done by:
○ Deed
○ Gift
○ Intestate transfer
● Tacking: one adverse possessor can tack on the time of another adv possessor as long
as there is privity between the 2 adverse possessors.
■

Clock Starts
Clock Starts: The clock begins when each element is first met
● However if the true owner is under some disability, when adverse possession starts, the
clock for adverse possession does not start until the disability stops.
● At the time of ENTRY
● If the Disability exists after adverse possession starts then the clock continues to run as
normal. Disabilities include:
○ Minor
○ Incarcerated
○ Mentally Incapacitated
● 10 years after entry, OR 5 years after disability removed
● Ex: 5 years after the true owner turns 18 (so they would then be 23), even if the
SOL would have been satisfied long before this point.
● Can only choose ONE disability, and only disability at the time of entry are counted.
● Tacking: When the Adverse Possessor has been adversely possessing for any time
before satisfying the time limit and transfers their ownership/interest into another
(either by color of title or permission) the new Adverse Possessor can add on the time
that the previous one was on to the land to their own.
o Bob adversely possessed for 15 years and transfers ownership to Terry by
color of title. Terry stays on the land for 5 years. Terry would have satisfied
the time limit because of his 5 years combined with Bob’s 15 years.

Adverse Possession of Chattels:

Mere possession is sufficient to meet all other elements
Possession is sufficient to meet all the original elements of adverse possession
● EXCEPTION: does not need to meet the element Open & Notorious
● EXCEPTION: SOL is shorter compart to adverse possession
● Most courts hold to due diligence rule, where the SOL will not begin to run so
long as the owner continues to use due diligence to locate items.
● Discovery Rule: The clock doesn't start until the owner discovers that the property is
being missing, knows who has it, and asks for it back/exercises due diligence in trying to
re-attain it. O’Keefer v. Snyder
○ Owner must prove that they used due diligence (determined by nature of the
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chattel) efforts to recover the chattel

Interest Not Affected by Adverse Possession

a. Future interests
i. Right to possession of the property in the future.
ii. If given property for life, child is given life estate, and grandchild is given
future interested called remainder. Grandchild has no right to possession
until child dies.
iii. Statute of limitations does not run against a remainder at the time of entry by
adverse possessor because the holder has no right to eject adverse
possessor.
1. Ex. O conveys Whiteacre to child for life, remainder to grandchild. In
1990, A enters adversely. The SoL is 10 years. In 2007, child dies.
Grandchild is now entitled to possession and has until 2017 to eject A
(this is assuming A did not bring quiet title suit)
iv. However, if A enters adversely prior to O conveying to child and creating the
remainder in grandchild, the statute would run upon A entering and would run
against O and his successor in interest (child, not grandchild). Grandchild
would not have a chance to evict (other than telling O or child to do so)
b. Liens, easements, equitable servitudes
i. If land is subject to outstanding liens or easements when the adverse possessor
enters, the title acquired by the adverse possessor remains subject to those
interests
c. Government interests : There is no adverse possession against the government
i. Government land is exempt from operations of statutes of limitations, and
private individual cannot acquire title from gov’t through adverse possession

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Law of Bailor and Bailee

Bailment – the rightful possession of personal property by someone who is not the owner
● The relationship created by the transfer of possession of personal property by a bailor to
a bailee without a transfer of title and for the accomplishment of a certain, limited
purpose
o E.g. borrow book from library, rent car, lend someone $5, etc
● Return of the property in the same (undamaged) condition is contemplated
o Or disposal of the property according to the terms of the bailment
● Property in bailment is usually tangible, but securities, etc can be used too

Elements of a Bailment
● Delivery by bailor (actual, constructive, or symbolic)
● Acceptance by bailee
o Bailee must acquire possession
▪ Physical control and intent to exercise control
o Bailee must consent to bailment
▪ Similar to intent aspect of possession
▪ Mere custody of a chattel is insufficient to constitute possession
▪ Acceptance & intent to possess
o Knowledge of property’s presence
▪ Bailee must be aware of the item creating the bailment
▪ Bailment does not exist in regard to something concealed within the property
that is the subject of the bailment
● E.g. a garage attendant takes possession of your car, not what’s inside
the glove compartment (so lost wallet – would not be liable)
Constructive Bailment
● Possession of personal property is acquired and retained under circumstances in which the
recipient should keep it safely and return it
o Arises when delivery and/or acceptance are lacking
▪ E.g. context of mislaid property found in shop

Bailment vs. Lease vs. License

● Important distinction because of liability issues
● If parking your car in a lot constitutes a bailment, the lot operator becomes bailee and is
responsible to care for your car
● If the lot operator merely gives the owner a license to use the space to park his car, no
bailment arises and car remains under owner’s control

Bailee’s Liability
● Exam Tip: Most questions involve the duty of care owed to the bailor. Must ask who is
benefiting from the bailment, and based on that, the duty of care can be established
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● A failure to redeliver (i.e. misdelivery) renders the bailee strictly liable

o Some states have replaced this with a presumption of negligence
● Liability in negligence arises when the bailed property is lost or damaged. Must show a
standard of ordinary care under the circumstances
o 3-pronged rule
▪ When the benefit to the bailee (from the bailed property) is slight, the care
required of the bailee is slight → only liable for gross negligence
▪ E.g. gratuitous bailment, such as taking care of object for friend
▪ If the bailment benefits both bailor and bailee mutually and is equally
beneficial, the standard of care rises and bailee is liable for negligence → duty
of reasonable care under circumstances
▪ If the bailment benefits the bailee, the bailee’s standard of care rises again →
merest neglect renders bailee liability
▪ E.g. repair shops, transport companies

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Gift Possession
Definition: a gift is a voluntary transfer of property without any consideration.
Requirements:
a. Must intend to give presently (not in the future);
b. Must deliver to donee (exams often focus on if delivery took place);
c. Donee must accept

Elements:
1. Acquisition by Gift: Whether the gift was meant to be an intervivos gift (a gift giving
during one’s lifetime not responding to the threat or subjective belief of impending
death) or a gift causa mortis (a gift made upon the threat or subjective belief of
impending death), three elements must be satisfied: (1) there must be intent to make a
present gift, (2) there must be delivery of the gift, and (3) there must be acceptance of the
gift. All of these elements must be satisfied to make a valid gift.
2. Intent: In order to make a valid gift there must be intent by clear and convincing
evidence to make an immediate transfer. Gift promises, gifts subject to a condition
precedent and gifts to take effect in the future or at one’s death do not meet the
requirement of intent to make an immediate transfer.
3. Delivery: In order to constitute sufficient delivery, there must be actual delivery,
constructive delivery, symbolic delivery or delivery through a third-party agent. Actual
delivery is required at all times unless because of size, location or for other practical
reasons it is not possible. The requirement of actual delivery is still applicable when the
gift is delivered through a third-party agent.
● Actual Delivery: If a thing is capable of actually being delivered, it must be
delivered that way. If it can’t be delivered, then the exceptions apply.
a. Exceptions to the general rule
i. Constructive Delivery: Where actual delivery is not possible/not
practical at the time of the gift, delivery may be means by constructive
delivery. Constructive delivery is delivering the means to have control or
gain access to the gift.
1. Ex: Keys to the car
2. Newman v. Boast
o Gifted to nurse all furniture and all that is in his house
on deathbed. Insurance policy in a piece of furniture
that plaintiff is suing for, but since Pelt didn’t
explicitly state that all that is in furniture is yours,
policy money goes to estate holder.
o B/c insurance policy was present in room when the
furniture was gifted to her, it could have easily manually
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been given, and since it was not, the theory of constructive

delivery is not applicable.
o Bureau YES because the key was given to the servant
o Servant does not have dominion over piano, needed to
show that it was hers (i.e. have someone move it into her
room)
o Bedroom furniture YES, since it was in HER room.
o BEST way to transfer property is with a will, these cases
come up when they don’t have a will
ii. Symbolic Delivery: Can be used where actual delivery is not possible or
practical. Delivering something that symbolizes the gift (i.e. a letter, a
note, a title and a deed) Everything is measured at the time you want to
give the gift.
1. Token that symbolizes the gift
o Ex: print out a sign that say “you are going to a cruise”
2. Handing over dominion AND control
3. Unsealed vs. Sealed instruments – debate over whether this allows
for symbolic delivery
4. Informal writing as symbolic deliver OK, but only if manual
delivery is impracticable.
5. Debt or remainder interests can be transferred by written
instrument.
6. Gruen v. Gruen : During his life, father communicated via letters
to son that he intended to give painting to him upon his death, but
wished to retain possession until then. Court ruled that this is a
valid transfer inter vivos because:
o He clearly showed the intent to give the painting with
his letters
o Symbolic delivery was given (not constructive because he
didn’t give him dominion and control), because it would
have been impracticable for both parties to come to New
York. Father retained life estate (present possession until
his death), gave remainder interest (future possession) to
child. Remainder interest sufficient for symbolic delivery
since interest is not physical
o Acceptance by plaintiff was implied by keeping father’s
letters for 17 years and telling friends and associates about
the painting he would one day inherit.
o Schmudde: doesn’t like this decision since it ignores
statute of wills. Why did he not file a gift tax return?
Shows that it wasn’t intended or treated as a gift.

iii. Agent Delivery: You use someone else to deliver it. You use a third party
to deliver. You must look at the agent. The gift is not valid until it is in the
hands of the donee.
1. An agent completes constructive delivery or symbolic.

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2. Donor/Giftor Agent: Not valid until in donor’s hands (still

have power to call it back).
3. Donee/Giftee Agent: Valid once in the Agent’s hands. (doesn’t
make if the agent doesn’t deliver it.)
iv. If goods already in possession of done, no need to give to the donor to give
back since there is intent and clear evidence that donor wanted done to
have item.

4. Acceptance: Donee must accept for it to be a valid gift. The gift takes effect
immediately upon delivery, subject to the right of the done to repudiate the gift.

Gift Inter Vivos:

gift given while alive but you are not responding to threats of imminent death
● Gifts given during life and is irrevocable
● Intent: To make immediate transfer of the gift. Title is not postponed. Possession might
be. There is no condition precedent (required action on the part of the giftee) to the gift.
● Delivery: Any gift that is already into the hands of the donee prior to the official gift
giving does not have to be redelivered
● Acceptance: Once the gift has been delivered the giftee, its done! Even if it is given to
the third party (and the giftee doesn't know) its still accepted.
● Checks are not usually gift until it is cashed because can be revoked
● Split authority on engagement rings (some must give back to donor, some only if the
donor at fault).

Gift Casua Mortis:

gifts given while alive but you are in the imminent fear of death
● Intent: Giftor gives the the gift in response to death being on the horizon
● Delivery: Any gift that is already into the hands of the donee prior to the official
gift giving does have to be redelivered.
● Acceptance
● Death: There is an imminent fear of death and you actually die in the manner
anticipated. It is revocable if you don’t die the way you believe you are dying
o Ex: if you think you are going to die from cancer but actually die in a car
accident then death element is not satisfied.
● Suicide counts as gift causa mortis so long as the court holds that contemplation
of suicide is contemplation of imminent death, and give the person donative
power
● War is not considered to be a scenario giving rise to contemplation of imminent
death.

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Testamentary Gift:
only given at death…through your will or intestate succession (person who dies without a will)

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Possessory Estates
The term “estate,” as used in property law, means “[t]he amount, degree, nature, and quality of a
person's interest in land or other property.” There are two basic types of estates in land:
present possessory estates (or possessory estates, for short) and future interests.

● Rights Afforded by Present Possession

The notion of possession is said to afford the possessor certain rights. These rights are
subject only to (1) restrictions found in the law or (2) valid encumbrances or other
interests in the property arising in favor of others. Those rights are:
A. Right to Use
Generally, the right of present possession affords the holder the right to use the
property however she sees fit [63C Am. Jur. 2d Property § 3]
B. Right to Alienate
The right of possession generally affords the holder the right to transfer
possession—that is, to “alienate” her rights—to others. [Id.]
C. Right to Exclude
The right of possession generally affords the holder the right to exclude others
from entering upon or in any way enjoying the property. [Id.]

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1. Present Interest
a. Freehold Estates
i. Fee simple
ii. Life Estate
iii. Fee Tail
b. Non Freehold Estates
i. the estate for years (or the estate for a fixed term)
ii. the estate at will
iii. the tenancy at sufferance.( A person whom has remained on the property
after permission has been taken away, and as such you are are classified
as either a trespasser or an adverse possessor)
2. Future Interest

Present Interest
A possessory estate affords the holder of the estate the present right to possess the property.
The possessory estates are further subdivided into two basic categories:

Freehold estates:
confer the present right of possession for an indefinite period of time or, at the very least, for the
life of the holder. They are: the fee simple estates, the life estate, and the fee tail.

Fee Simple
● Never terminates unless condition in grant terminates it
● O to A (and his heirs). Heirs have no say. Heirs can’t be determined until O is dead.
○ Defeasible: Has a condition or restriction to estate to cut estate cut
■ O to A so long as...or O to A, but if…
● Determinable - If requirement isn’t met then property goes back to
original owner.
● Subject to Condition Subsequent - Get the property, but if
condition to keep property isn’t met/violated then current owner
no longer has rights to property.
● Subject to Executory Limitations - Get the property but if
condition to keep property isn’t met/violated then interest
property goes to a third party/not the original grantor.
○ Absolute: No condition or restriction tied to estate
■ O to A.

Fee Simple Absolute:

Absolute ownership no limit on duration or heritability, cannot be divested and it will no end on
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an event happening.
● O → A = transferred from O to A (and heirs).
● Exam Tip: What most people think of about owning land
o Owner?
▪ The person who has seisin, and who has deed
o Words of purchase “to A”, and words of limitation “and his heirs”
▪ Heirs have no present interest in the property (A can give property away
before heirs inherit). “to A” in modern times conveys fee simple
o Transferability – can devise land to others in will/deed, or goes to heirs after
death
▪ Exam Tip: Heirs take when the descendent leaves no will, devisees and
legatees take under a will

Fee Simple Defeasible

Reasons why a fee simple may not be infinite in duration.

1. Fee Simiple Determinable :

a. conveyed to another for a specific purpose using words of limitation.
i. Ex. conveyed to school board so long as used for school, if not, then land
automatically reverted back to O
ii. Future interest = possibility of reverter
1. If doesn’t say who has the future interest, then goes back to O
iii. Exam Tip: Must use language to limit the duration of the estate in order
to be valid determinable: “so long as”, “while”
iv. Can be transferred, but still limited by determinable
v. ends automatically and right to immediate possession “reverts” back to
the grantor
vi. Language: “as long as”; “while”; “until”; “during”; words of duration

2. Fee Simple Subject to condition subsequent

a. not automatically cut short, but may be at grantor’s election.
i. Ex. grant property, but if A ever sells alcohol on it, O has right to reenter
the premises
ii. Future interest = right of re-entry (must be exercised, not automatic)
iii. Exam Tip: determinable ends automatically, condition subsequent the
owner must act
iv. Language: but if, upon condition, provided however
v. ends at grantor’s election and the grantor “re-enters” possession.

3. Fee Simple subject to Executory Limitation

a. On the happening of a stated event, it is automatically divested to a third party
Ex. Property to school board, but if not used for certain purposes, then to A
i. Future interest = reversion (automatic) – not in grantor, a third party
ii. Exam Tip: Will always be to a third party

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iii. Language: but if, upon condition, provided however

iv. ends automatically but the grantor doesn’t get possession

Fee simple Terminates Land Goes to: Future Interest

determinable automatically grantor possibility of reverter

on condition subsequent grantor's election grantor right of re-entry *

on executory limitation automatically 3rd party executory interest

*Note: the right of re-entry is sometimes called, more simply, a "right of entry;" or-in some
modern usage, a "power of termination."

Life Estate
● O to A for life. A dies. Estate ends.
● Language must be clear & convincing. When grant is ambiguous between fee simple and
life estate, courts favor fee simple.
○ Defeasible
○ Absolute
○ Life Estate Pure Autrie Via
■ O to A for life of B
■ Ends when B dies. If A dies before B, Goes to A’s heirs until B dies.

Life Estate Absolute

Estate transferred to A for A’s life and nothing can cut it short.

Life Estate Defeasible

Anything that can cut the Life Estate shorter that it is meant to be.

Life Estate Determinable

Ex: "to Oliver Olympio during the time he lives on the land."
Life Estate Subject to Conditions Subsequent
Life Estate Subject to Executory Limitations

Fee Tail
● Grant is made to A & Heirs of A’s body
● O to A & A’s bloodline. (A must have blood children or estate ends)
● O to A, A transfers to B. Then must stay in B’s bloodline.
● If no lineal descendant’s (children, grandchildren, great-grandchildren, no nephews,
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etc.), then it would come back to the estate, it would cease

o Lasts as long as grantee or any descendants survive and it is inheritable only by
the grantees descendant’s
● Has been abolished in most states, and those holding a fee tail may “disentail” through
the courts in order to convey a fee simple absolute by deed
o Many states hold that A now has a fee simple absolute.
o Includes GA
● Cannot be devised by will
● Future interests:
o Reversion: “O conveys to A and the heirs of his body”. A has a fee tail, O has a
reversion in fee simple upon expiration of fee tail (i.e. no longer and heirs of A)
o Remainder: “To A and the heirs of his body, and if A dies without issue, to B and
her heirs”. A has a fee tail, B has a remainder at the expiration of the fee tail.

HOW TO DETERMINE PRESENT INTEREST :

Step 1: is it life estate or fee simple or fee tail?
● Look at the language and the conditions
● If no lang/ condition, then fee simple
Step 2: is the absolute or defeasible
● Is there lang that estate could be cut short? Then it is defeasible
● All fee tails in GA are Fee simple Absolute
● Only applies to fee simple and Life estate
Step 3: if it is defeasible, who holds the future interest?
● If O hold the future interest, then determinable or subj to conditional subsequent
● If O does not have future interest, then it is subj to executory limitation
Step 4: if there is words of time are used to create grant, then it is determinable
If there is words of conditions, then it is subj to conditional subsequent

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Other Information

1) Waste
a) Affirmative waste
i) Injurious acts that substantially reduce the value of the property in
question
ii) This is an action that the remainder interest could bring against the
present possessor
b) Permissive waste
i) Negligence – failure to take reasonable care of the property
c) Ameliorative waste
i) Make improvements (maybe some that you don’t agree with). This is
OK so long as it’s adding value or at least not detracting from the value

2) Leasehold “Landlord / tenant law”

a) Term of years (1 year fixed lease) – automatic end with no notice required
b) Period to period tenancy (month to month that automatically renew) – required
to give notice
c) Holdover tenancy (rights of the two parties when someone holdsover before
renewing lease)
d) Tenancy at will (as long as each party wants to continue) – this is the default for a
void lease, which then becomes a periodic tenancy

3) Can die testate (have a will) or intestate (no will)

a) If you don’t have a will, the state must look to their statute on intestate succession
b) Heir ONLY if survive decedent, AND are designated as intestate successor by the
state statute
c) Ancestors, collaterals (brothers, sisters, nephews, nieces)
d) Intestate without any heirs, then the estate escheats to the state

4) Issue (fee tail children and grandchildren)

a) Common law → goes to the oldest son
b) By representation per stirpes (by the roots). OR you could could set it up per
capita (which dictates specific amount, i.e. 1/5 each)
c) Ex. O dies has:
i) Daughter (a) (dead)
(1) 3 children
ii) Son (b) (dead)
(1) 2 children
iii) Goes to grandchildren since both children dead, so how much goes to
each?
(1) ½ between A and B, and then split between each.
(a) 1/6 each to A’s children, and ¼ each to B’s children

5) Probate determines title of assets in estate

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a) Avoid this through Joint Tenancy (the other person has sole ownership at the
death of one of two parties – i.e. husband and wife)
i) Pensions by law go to the spouse

6) White v. Brown
a) Did Lide mean life estate (to Lides heirs after White dies) or fee simple (to
White’s heirs)?
b) Wills cannot contain restrictions on alienation (i.e. can’t limit how to transfer
property in the will from the grave)
i) Ties up land, makes it unmarketable, discourages improvements on the
land
c) When not enough information in the will, try to gleam intent of writer from all
the evidence
i) Court says looking for intent to create life estate and don’t see it
ii) White ends up getting the property as fee simple without any of the
restriction since can’t limit alienation
(1) When there is doubt, the court will find as a fee simple to make it
clear for the future

7) Ground Lease - keep property in the family by leasing it out for a long time, and the
person leasing it essentially pays full buying value for it, then they original owner gets it
back at the end of the lease time
a) Examples on bottom of page 232

8) Fair market value of property = FMC of life estate (present life estate) + FMV of
remainder interest (remainder interest) → Page 234 examples of this
a) If you buy both interests, you essentially have a fee simple
b) Present value reflects future expected cash flow
i) Formula = PV = CF /(1 + i) ^n
(1) CF = cash flow ($ you’ll get in the future)
(2) i = interest rate
(3) n = years remaining

9) Baker v. Weedon
a) 1932 John (72) dies and leaves the farm to Anna (34) for life remainder to Anna’s
children.
i) If Anna dies without issue (heirs), farm to John’s grandchildren (he had
previously been married)
b) Anna only has life estate so doesn’t have right to give Mississippi access, so state
finds the grandchildren. Makes offer to Anna, grandchildren turn it down
because they want more money
c) Court will not order a judicial sale given these circumstances

10) Must maintain the property, or else the value plummets for the remainder interest.

11) Conveys = DEED → gift (O is alive during time of conveyance) – relevant for RAP
Devise = WILL = Dead
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Future Interest
A future interest is a presently existing estate in land, which will only confer the right of
possession, if at all, at some future time. To overgeneralize a bit, every future interest
is said to follow a preceding possessory estate (or perhaps another future interest).
The future interest will ripen into possession when some operative event (A) terminates
the preceding possessory estate (or future interest) and (B) transmutes the future
interest into a new possessory estate.

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Created in Transferor

● Reversion- to O (O to A for life) this future interest is in the grantor of the estate and
becomes possessory when the present estate ends.
1. Reversion is always retained by the grantor
2. A reversion "automatically" has to arise whenever an owner conveys a quantity of
ownership that is less than he has.
● Right of Entry:
1. if the present interest is subject to condition subsequent, then the future interest
is the right of entry.
● Possibility of Reverter:
1. if the present interest is Determinable, then the future interest is the possibility of
reverter

Created in Transferee
I. Remainder - other than O (O to A for life, then B) this future interest (a) waits
patiently for the natural termination of the present estate to end and (b) there is no
waiting to take possession after the natural termination of the prior estate.
1. It's a future interest, in someone other than the grantor, following
immediately after the expiration of a particular estate, thereby
fitting all the criteria for a remainder.
2. Remainder is always created in someone other than the grantor
3. Remainder can never directly follow fee simple, never divest a prior estate, can
never directly follow possession by the grantor
4. Vested - The class or person with future interest is known at the time the grant
is made (is in the world)
a. A remainder is vested if it's not contingent.
b. A remainder is vested if the remainderman is:
i. born and
ii. ascertained, and
iii. no (stated) event need occur before possession (except
expiration of the prior, particular estate).
c. Indefeasible- Must be vested, know who it and no condition, and it has
absolute certainty that the future interest will vest and become the
present estate. Must be absolute

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i. Holder of the remainder is certain, and there are no conditions

attached.
ii. Future interest holder have rights: Can't prevent selling but can
prevent waste: Restrains the present interest holder from action in
a manner that unreasonably injures property
1. Voluntary Waste: Acts that unreasonable reduce the
property value
2. Permissive Waste: Possessor fails to exercise reasonable
care of property
3. Sue for the stop of waste, not to get the property
d. Subject to divestment- must be vested, know who it is and not
condition is precedent, but there is the presence of a condition
subsequent, which means they can lose the property once they gain it.
i. A remainder can be vested and yet be "subject to divestment,"
which means that it can be "cut short" if a stated event occurs.
ii. Ex: "to A for life, remainder to B and his heirs, but if B does not
reach the age of 21, then to C and his heirs."
1. Here there's no "condition precedent" -- no pre-
condition -- to B's right to possession, so B's remainder is
vested.
2. There is, however, a condition under which B's vested
remainder can be cut off. It's a "condition subsequent."
3. Because the condition subsequent can cut off B's vested
remainder, we say the remainder is VESTED SUBJECT TO
DIVESTMENT.
e. Subject to open- must be vested , and must be found in a class that can
be considered a growing class. A class is a group of individuals, but at
least one must successfully be under the assigned condition for it to
receive the benefit of a class. They cannot be assigned by name, but rather
a large group of individuals. The class must not have a certified closing,
but must remain open.
i. to a class of recipients (e.g., "remainder to my children"), and
ii. at least one member of the class is born and ascertained, and
iii. other members may be added to the class later.

5. Contingent- In a living ascertainable person, and a condition is present to limit

himself.
a. A contingent remainder is one in which the right to immediate possession
is subject to a condition precedent
b. Ex: to Gene for life, then to Sharon and her heirs if she becomes a chess
grandmaster.
c. Subject to occurrence of some stated event - "... remainder to B
and her heirs if B marries C"
d. Conveyed to unascertained persons -- "... remainder to B's first
child to reach age 21, and his or her heirs"
e. Conveyed to unborn persons -- "... remainder to B's next born
child and his or her heirs"
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f. A remainder is contingent if any of the following applies:

i. A stated event must occur before possession.
ii. It is conveyed to unascertained persons.
iii. It is conveyed to unborn persons.

REMAINDER SUBJECT TO

Vested (indefeasibly) No Conditions

Contingent Condition Precedent

Vested Subject to Divestment Condition Subsequent

II. Executory Interest: An executory interest is “[a] future interest, held by a third
person [that is, a non-grantor], that either cuts off another's interest [before its natural
expiration] or begins after the natural termination of a preceding estate.
1. if the present interest is Fee Simple Subject to Executory limitations, then the
future interest that follows is Executory Interest.
2. Shifting Executory Interest - Third party’s transferee interest is divested
a. A shifting executory interest is one that, when it materializes into
possession, terminates the estate of one grantee in favor of another
grantee. In other words, when a shifting executory interest
materializes into possession, it divests Grantee A of the property
and transfers it to Grantee B
b. Possession of a freehold estate cannot be made to "shift"
in the future.
3. Springing Executory Interest - The grantor’s interest is divested
a. “springing” executory interest is one that, when it materializes into
possession, divests the grantor of his estate. In other words, a
springing executory interest, when it ripens into possession,
transfers the property from the grantor to a grantee.
b. Ex: "to L for life, then one day after L's death to E and her heirs"

Executory Interests either: Remainders:

follow a fee simple can never follow a fee simple

divest a prior estate can never divest a prior estate

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directly follow poss'n by the can never directly follow poss'n by the
grantor grantor

Interest transformations:

Common Law rules that invalidate + All the common law rules apply to the future
interest

1. Destructibility Of Contingent remainder: If a contingent remainder fails to

vest( become possessory upon the termination of the preceding estate, it is
destroyed. If a life estate fai. Failure to vest fails to become one when a contingent
remainder fails to become a vested remainder. Faces Wait and See approach, if
someone has not claimed or been assigned as a future owner of a property, then
the grant is destroyed
a. Ex: O conveys to B for life, then to C and her heirs if C marries H. C doesn’t marry
H.
i. C's interest might have taken effect as a remainder, if C and H had just
gotten their act together and said "I do" while B was still alive. But, if they
didn't, then (under the traditional rules) C's contingent remainder is
destroyed. This is destructibility of cont. remainder

2. Merger doctrine- If a life estate and the next vested in fee simple come into the
same hands, the two estates merge as one. If two parties hold two different
properties, if anyone comes into contact and controls both properties, then they
will merge and the owner will gain the superior rights.

3. Rule in Shelly’s case- Must be measured by the beginning of a grant- In a life

estate is created in one person and a remainder in fee simple is created in the
same person's heirs, the estates merge creating a fee simple absolute. Otherwise
providing that any conveyance, which purports both to convey a present
possessory estate of definite duration (such as a life estate) to a grantee and to
create the corresponding remainder entirely in the grantee's heirs, instead results
in the conveyance of the grantor's entire estate to the grantee alone, because both
the present and future estates are deemed to be merged in the grantee.

4. Doctrine of Worthier title- if the owner conveys property to one party and by
same document conveys a remainder or executory interest to owners heirs; then
owner retains reversion and not to the heirs.

5. Rule against Perpetuities -No interest is good unless it must vest, if at all, not
later than 21 years after some life in being at the creation of the interest. It
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focuses on establishing a safeguard on someone who might control a property for

an extremely long time, denying it’s use to others. Measured by 90 years by
Georgia.

6. Only applies to 3 types of future interest- Contingent Remainder, vested

remainder to subject to open and the class is still open, and a contingent
executory interest whether or not they are springing or shifting.

O to A for Life, then to A’s Children. A had no Children

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Co-Ownership
Concurrent Interest (For Present Interest): Only when O conveys to A & B

Tenants in Common (Default)

● Each co owner owns an undivided fractional share of land
● Each is entitled to simultaneous enjoyment of the whole land regardless of the % one
actually has
● % only matters at death or transfer
● Do not need the consent to sell/transfer/convey their own interest in the property to
someone else.

Joint Tenants (w/ the right of survivorship)

● You must state this interest specifically-I want a joint tenancy with the right of
survivorship or joint tenants (cannot just say joint)
● Regardless of the fractional share, both still own 100% of the property
● As soon as one co-owner dies, the other co-owner gets 100% of the property
● 4 things are required and must be met: Time, Title, Interest, & Possession
○ Time: Both co-owners have to acquire their interests at the same exact time
○ Title: Both co-owners have to acquire their interests in the same documents
○ Interest: Both co-owners have to acquire the same interest, meaning if one has
50%, the other one does too
○ Possession: Both co-owners have to acquire 100% of the property

Tenants by Entirety
● Requirements of JTROS & Parties must be married at time
● Property is a whole-only transfer as a whole
● Death & Divorce-Only way to server in %-Severs 50/50-becomes tenants in common
○ When tenants can't decide what to do w/property
● Partition in Kind: Courts favor splitting up property (can be impractical)
○ Division is unfair: When a party gets a diminished value. (unusable land)
○ Others owe him an owelty to pay him some extra
■ owelty: a payment from other co-tenant whose percentage is not as high
as the other co-tenants to make his percentage equal with the others
● Partition in Sale: Courts force property sold & divide the money
○ Courts don't want to force sale, must meet requirements
■ The physical division of the land must be impractical
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■ Whether the interest of owners of would be better promoted by partition

of kind

Leasehold Estate

Non FreeHold Estate

(You can determine the exact time that estate will terminate)
the various leasehold interests: the estate for years (or the estate for a fixed term), the
estate at will, and the tenancy at sufferance. These estates are not “freehold” estates, because
they are all of finite duration.
NOTE: A contingent remainder can never follow a non-freehold particular estate.
(term of years, periodic tenancy, tenancy at will)

Terms of Years (Landlord/Tenant Relationship)

○ Must be able to determine in advance how long the leasehold will last, you can determine
the EXACT time it will start and the EXACT time when it will end
○ The term is fixed, but terminates automatically at the end of the lease
○ Can be for months, weeks, or years
○ Notice can not be given to terminate lease because of the inherent end date of the lease
○ If you do not leave at end of lease term you are holdover tenant => tenant at sufferance
■ If you don't leave, then you have the potential of being an adverse possessor)

Periodic Tenancy (Landlord/Tenant Relationship)

○ A lease for a period of some fixed duration that continues succeeding periods, until the
landlord terminates
○ Notice is required to terminate (usually the time period of the original terms of the lease)
■ Month to month leases
○ For any periodic tenancy less than a year, notice of termination must be given equal to
the length of the period, but cannot exceed six months
■ You must give 30 days notice to terminate month to month lease
■ You must give 6 months notice for a year long lease
○ Courts looks at the INITIAL term of the lease

Tenancy at Will (Landlord/Tenant Relationship)

○ You can stay at your will or landlord’s will, until one of you terminates.
○ There is no formal lease or agreement
○ You create a tenancy at will when you let someone stay with you for about 30 days. After
that prevent them from coming in.
■ If you can them out, you have to evict them

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○ Death terminates a tenancy at will.

Tenancy at Sufferance
When a person remains in possession of property after the lease has been terminated or it
expired.
○ At one point, the person had the legal right to be on the property, but then the lease
terminated and the tenant still remained on the property
○ The landlord can evict the tenant or keep him for another term of lease
○ If a landlord does not object to the tenant staying after the lease has expired, then a
holding over results
■ This can lead to adverse possession if all the other elements are met.
● Ouster - Through self help methods of preventing a tenant from the
enjoyment and use of their property.

Partition by Sale
A partition by sale occurs where the court orders the property to be sold by some fair
means designed to get the highest price. Once the sale occurs, the net proceeds (after
payment of costs of sale and any liens) will be distributed to the co-tenants, in
proportion to their respective shares of the equity. [Id. at §§ 117, 125, 133-35]

Partition in Kind
Partition in kind means that the court will subdivide the property into discrete parcels.
Each former co-tenant will get one parcel that she owns exclusively, the value of which
should correspond closely to her entitlement to the equity. [See id. at § 3; accord Von
Behren v. Oberg, 902 S.W.2d 338 (Mo. 1995)]. Impractical in single family homes, or
property that cannot be properly divided physically.

Purchase and Sale

Real estate agents can get commissions whether or not the deal close
● However, in reality no real estate agent enforces this

Sell your house Overview

1. Find a broker – the listing broker
a. named a listing agent who helps market and list your house, and is the only
individual whom you have a contract agreement with,
b. there are certain limitations that can be imposed between both parties.
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c. Owes fiduciary duties to the seller which entails that all information and pricing
updates
d. must be disclosed by the listing agent to their employers
2. Broker lists your house on MLS, a nationwide network of real estate listing.
a. A selling broker, who is looking at MLS for their client that wants to buy a house,
will be the one who finds the listing and agrees to try to find a buyer for the
property.
3. Once the house is sold, the commission will be paid to the listing agent, not the selling
agent
a. The commission will be split among the parties as a generally industry practice
4. Purchase and Sale Agreement: Once a buyer is found by the selling broker,
then all the parties will enter into purchase and sales agreement. This is an offer only,
and can be denied or accepted by the seller.
a. Purchase and Sale Agreements includes:
i. description of the property,
ii. the amount price,
iii. financing contingency: a promise by the buyer to obtain financing with
either loans or other methods to purchase the house)
iv. appraisal contingency: an agreement from the buyer that places a promise
on the seller that the property’s value be calculated and match the asking
the price.
v. Disclosure Form: Seller discloses any known defects
1. Absent of this disclosure form, owner doesn’t need to tell you
anything.
vi. Good and Marketable Title: Seller deliver a good and marketable title to
the buyer
vii. Time is of essence: hard and fast deadline that are listed in the contract.
1. If the phrase is missing, court looks at time / deadlines as
“reasonable time”
5. Transfer of Deeds / Title

Brokers

Broker’s Right to Commission

Governed by the type of listing agreement:
1. Open listing agreement
2. Exclusive Listing Agreement
3. Exclusive right to sell

Open Listing Agreement:

Non- exclusive listing where seller is to pay broker only if the broker is the procuring the cause
of a “ready, willing, able” buyer
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● A free for all agreement in which the first broker whom finds “a ready, willing , and able
buyer” will be the one whom gets the commission
o Non-exclusive: multiple agreements with multiple agents
● First agent that brings the seller a buyer, the seller will pay him the commission.
● It is a unilateral agreement where the broker has little incentive to do anything on your
behalf.

Exclusive listing agreement:

● An agreement that placed a limitation in the amount of time, known as exclusivity
period, that a broker is able to find a “ready, willing, able , buyer” within that time.
● It is an exclusive agreement so only the chosen the broker can act on it,
● If the seller can find someone on their own during the period of time, or after, then the
broker will not be able to collect a commission
● Time period is usually an agreed upon by the parties.
● This is a bilateral agreement where the agent is to take all reasonable steps to sell the
house.

Exclusive right to sell

● An agreement between a seller and a broker, that states that where during the
exclusitivity period regardless of who sells the house, the broker will then gain the
commission.
● If seller finds buyer on his own. He still has to pay the agent his commission
● Bilateral agreement where a lot of fucks are given by the agent

Ready, Willing, Able Buyer

● Ready-means that the purchaser must be prepared to enter into the contract on the
terms offered and such a position should not be impeded by an outside factor, such as
the fact that a prospective purchaser of a lease was not a suitable assignee for the existing
landlord.
● Willing-'willing' means that the purchaser should be prepared to put his signature to a
binding contract on the terms offered and be bound thereby; "for the words 'ready and
willing' imply not only the disposition, but the capacity to do the act

● Able- someone with the financial capacity to either have the money to purchase the
house, or has the ability to gain financing for a loan to purchase the home.

Valid Purchase & Sale

In order to determine the issue of what is a valid agreement, since it pertains to an interest in
land must satisfy all the elements of the statute of frauds, or fall into one of the elements of the

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statute of frauds, meaning it must be in writing and signed by both parties in order to be
enforceable, and must fall within the elements of a contract.

Statute of Frauds
1. Offer, acceptance, consideration
2. In writing and signed by against whom the contract will be enforced
a. Piece of writing w/ reasonable terms and Need signature
b. Can be more than one document
c. Email is sufficient
d. Check with sufficient information can satisfy SoF.
e. In case of no writing, a contract for purchase of land can be used but it doesn’t
satisfy SoF.
i. If no writing, then it is not enforceable
3. Reasonable terms
a. Name of parties
b. Intent is clear
c. Description of what is being purchase
d. Purchase price, if known or means to calculate the purchase price.

Voidable
● if there is an oral agreement or is missing one of the elements of the statute of frauds. It
means that the contract is called “voidable”, if used as a defense at the moment that one
party may be sued by another at that moment, if not then the chance will be lost.
● This is an affirmative defense that must be raised before it becomes enforceable
● If it isn’t raised in time, then you can’t raise it later, meaning failure to raise it can make
it enforceable.

2 exceptions to the writing element of SoF

1. Part Performance
a. 3 things to show part performance [may only need 2/3, depending on the
Jurisdiction]
i. Take possession of property
ii. Paid all or part of purchase price
iii. Made improvements to the property
b. Some jurisdictions like GA, you must show that you took possession and then
show either of the other two.

2. Equitable Estoppel
a. Available when one party has substantially included the other party to change
position in reliance AND there will be harm if refused to enforce the agreement.
b. The party who you are rely on that they know or should reasonably know about it.
c. Case: Hickey v. Green
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d. Reliance make the party to substantially change position.

Title
an assumed covenant between both parts that the thing being exchanged is a marketable title,
operating as both as a condition or closing that you will gain the title at the end of the
agreement.
● It is a promise that the seller will provide you with marketable title at the end, and if not
the buyer is not forced to close the deal and if incurred any damages during the process,
can be compensated.
● Once you buy the property, you simply buy the most tenement legal interest in the
property apart from ownership
● Occurs after the Purchase and Sale Agreement

Marketable Title
Title that is free of all liens, title defects, and encumbrance
● Free of all liens: a right to keep possession of property belonging to another person until
a debt owed by that person is discharged
● Title Defects: gaps in the chain of title.
● Encumbrance: any right or interest that reduces its value or restricts on how it could use
the land.
Other factors:
● Operate as condition and covenant
o Conditional: If seller doesn’t deliver a marketable title at closing, you don’t have
to close
o Covenant: promise to deliver a marketable title at closing
▪ Any damages that incur from backing from the closing, you can recover.
● Whatever things that exist on the land makes the title unmarketable, unless you accept
those faults such as utilities easements ( water, electricity,etc) or anything else may be
included in the contract. IT only pertains to the LEGAL TITLE of the Land, Not the
physical condition of the land.
● Seller doesn’t need to disclose title defects to the buyer

Equitable conversion
The risk of loss where performance becomes impossible or impracticable
● Ex: you die before closing or the house burns down before closing, buyer has risk of loss
● Buyer has equitable title and the seller has record
● Buyer has risk of loss but still has to close the house unless it is specified in the contract
otherwise
● In GA, the risk of loss passes at the time the title is transferred or at closing.

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Caveat Emptor- A seller does not have to disclose non material and latent defects that can be
easily discoverable by the buyer, but must disclose material and latent defects that are not easily
discoverable by the buyer. Even if a non material defect is not disclosed, it cannot however be
misrepresented either if asked a question regarding the physical conditions of the house, and a
defect is cover up and

Deeds
General:
● all deeds use to transfer title in property
● deeds protect against defects in title that you didn’t accept at closing or knew about
defect
○ does not protect against physical defects
○ Physical defects merge into the deed and become your defect unless physical
defects that are material and latent known to the seller.
● Valid deed is transferred, then the title is transferred
● after you file the recordable form and have valid and effective deed, you put people on
constructive notice

Transferring Title
Title is transferrable if the deed is
1. Valid
2. Effective
3. Recordable

Valid
● Satisfies the Statute of Frauds
o in writing, signed by guarantor
▪ can be on a napkin
o identify the guarantor and guarantee
o must have words of convenience
● has a sufficient legal description
o identifies the land in sufficient and detail so that it is readily distinguishable from all
other property in the world
o address only is not sufficient
o description that makes unique in the whole world
o finds the boundaries of the property
o includes Meets and Bounds, plaque survey, etc.
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● if the deed is not sufficient =/= valid deed

● no need for notary, witness, public records, etc

Effective
● must be delivered
o same rules and types of delivery as under Gift delivery
● must have already be valid
● effective deed that is valid can be transferred, even if it not recorded.
● transfer is immediate upon delivery
● Rebuttable presumption that if it is in your possession, then it is delivered.

Recordable
● this is not required.
● recordable = valid + effective + elements
● puts people in constructive notice
● recordable forms
o written document that meets the state’s requirement
▪ to be valid, it can be on a napkin but the napkin does not meet the recordable
standards
o notarized & acknowledge (aka witness)
▪ some states require a seal
● GA does not require a seal

3 types of deeds
General warranty deeds
Special Warranty Deed
Quitclaims Deed

General warranty deeds

a. protect against title defect cause by anyone in the world/defect by seller or someone
prior to seller
b. the warranty with the most protection
c. deed must expressly state the warranties
d. 6 types of general warranties
i. Warranty/ Covenant of Scisin
1. grantor states/promises that they are the owner of the property
described in the deed

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2. promise of the quality of deed and the quantity of the acreage.

3. present warranty, meaning breached as soon as deed delivered and
expires in 4 years
ii. Warranty/ Covenant of right to Convey
1. promise that I have legal right to convey the property without any
restriction
2. present warranty, meaning breached as soon as deed delivered and
expires in 4 years
iii. Warranty/ Covenant against encumbrances
1. promise that there is no encumbrances on the property
2. This allows the buyer to sue for the title again
3. present warranty, meaning breached as soon as deed delivered and
expires in 4 years
iv. Warranty/Covenant of Warranty
1. if someone with superior rights comes in,. then I will protect your
rights.
2. Future covenant, meaning breached as soon as someone with superior
rights intervenes/infers with your rights
3. runs with the land, does not expire
v. Warranty/ Covenant of quiet enjoyment
1. no one, including me, acting through me or under me will interfere
with your rights.
2. exists even if it is not in the deed - implied in all deeds
3. Future covenant, meaning breached as soon as someone with superior
rights intervenes/infers with your rights
4. runs with the land, does not expire
vi. Warranty/ Covenant further assurance
1. if I didn’t transfer you what I promised at closing, then I will try to
fulfill my promise.
2. AKA warranty to fulfill promise
3. Future covenant, meaning breached as soon as someone with superior
rights intervenes/infers with your rights
4. runs with the land, does not expire

Special warranty deed / limited warranty deed

● Same stuff as the general warranty except the guarantor only give warranty to protect
against defects caused by seller or during seller’s ownership
o doesn’t protect against any defects that occurred before O had the land

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Quitclaim deed
● no warranties at all given with the property
● Deed is basically says, I have an interest in the property and I release / transfer that interest
to you.
o you can say this even if you don’t own the property and you try to transfer it.

Recording Systems
Importance Recording Systems
● Put people on notice that someone has interest
● Prevents from fraud
● Protects those who file their documents and protects BFP.

Notice
1. Constructive notice: notice regarding deed based on recording in public records
a. Priority of deed determine by
i. statute
ii. when you file
iii. type of notice
b. everything in public records does not put you on constructive notice because
there may be defects
2. Actual notice
a. if you know someone else may have the higher interest
b. if deed fails to meet filing requirements because it is filled incorrectly, then it
does not give you constructive note by gives you actual notice.
3. Inquire notice
a. a reasonable people would inquire about notice.
b. There is nothing suspicious and if you inquire, you would find out the answer.

Sufficient Constructive notice

1. recordable
2. No technical defects
a. incorrect spelling of the guarantor's name will not put you on notice, unless
i. idem sonams like Berry and Beri
ii. denominative names like Robert and Bob
iii. trade names like James Todd Smith vs. LL Cool J.
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3. in chain of title
4. property index

Bona Fide Purchaser:

● To be BFP, they accept deeds with defects, give value to property, and have no notice of
any kind of defect at the time of acceptance
● Subsequent Purchaser that Gives value w/o notice of any kind
○ if they knew there was superior interest out there, they are not BFP.
● good faith purchaser that gave value to the property.
●

3 types of Recording statute

1. Notice Act Statute
2. Race-Notice Statute
3. Race Statute

Notice Act Statute

when the deed was delivered to the bona fide purchaser and BFP does not have any notice of
prior transactions, then the BFP would have superior rights, does not matter when BFP records.
BFP
● Subsequent purchase : I purchase the property after the defect.
○ Ex: person from whom I purchased it already gave interest to someone else
● Give value: reasonable value, not nominal value
● w/o notice of any kind : not know that someone else has interest or someone that is
giving
○ Actual: tell you or happen to know
○ Inquire: puts a reasonable person on notice that they should inquire about it.
○ Constructive notice: something filed in public records
■ Sometimes things are filed in public records that should not have been
filed, then you have defects in filing
● Ex: wrong name, not in recordable form, not notarized etc.
● Record anytime: does not matter when record; as long as they record.
Ex:
Day 1: O --> A ; unrecorded
Day 2: O ---> B ;
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Day 3: A records
Day 4: B records
Answer: B's interest > A interest

Ex:
Day 1: O --> A ; unrecorded
Day 2: O ---> B ; B is fully aware of A's initial purchase
Day 3: B records
Day 4: A records
Answer: since both of them after not BFP, then the person that records first would have
superior interest. So, B would have superior rights.

Race-Notice Statute
Race notice act statute: no notice + first to records.
1. Combines Race act + Notice act
2. BFP with no notice + the BFP has to be first to file.
Ex:
Day 1: O --> A ; unrecorded
Day 2: O ---> B ;
Day 3: A records
Day 4: B records
Answer: A's interest > B's interest, unless B records first.
Ex:
Day 1: O --> A ; unrecorded
Day 2: O ---> B ; B is fully aware of A's initial purchase
Day 3: B records
Day 4: A records
Answer: B is not protected b/c he is not a BFP since B has actual notice. A is not a BFP b/c
the A is not subsequent purchaser. Here, since both A and B are not BFP, the statutes do not
apply. B would win because B recorded first. The Law protects the BFP and those who record
first. Since neither one is BFP, then we protect the person that records first.

Race Statute
1. It is a race to courthouse
2. First to file, wins
3. Does not matter what you know or how much you know.
4. Does not matter what notice and who had it

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Common Law
Only applies when neither deed has been recorded
● If none of the deeds have recorded, then 1st deed Delivered has superior
● Effective deed = delivery

Shelter Right: if you get your property from a BFP, everyone else down the line is protected.

Mortgages
Mortgages: Interest conveyed to a lender in real property to secure a debt owed to the lender
● GA calls it a deed to secure debt; some states calls it deed of trust; other call it a
Mortgages.
Mortgage is interest in property thus has to follow the Statute of Frauds.
● Legal description same as deed
● Intent: secure mortgage to secure a loan on the property
● Writing
3 theories that apply to Mortgages
1. Lien theory state:
a. 2/3 of the state is the US including GA; majority view
b. Grant someone a mort., that person is seen as security interest or lien on
the property but not the title to your property.
c. If you default on debt, then mortgagee can foreclose but can't get
possession or akin to prior possession until they foreclose.
2. Title theory state
a. Represented by deeds of trust
b. When you give a mort. The mortgagee has title to your property.
c. Foreclose on property after your default. They can obtain rents and profits
from the property. This is before foreclose and after default. They can
exercise certain rights and remedies.
i.
3. Intermediate theory state
a. Allows the mortgage possession only upon default and after foreclosure
procedure is started. The foreclosure process does not have to be
complete.

3 ways for Foreclose

1. Judicial foreclosure
a. Sue a borrow, file complaint, prove the debt, enforce the debt
2. Power of sale foreclosure
a. Contractual right

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b. The right to foreclose To the extend that the right is given to them in the
mortgage. If not in the mort, then the judicial foreclose applies.
c. Allows to foreclose w/o going to court.
3. Strict foreclosure
a. Only permitted in KY and VT
b. foreclose on property w/o judicial or power of sale.
c. Borrower agrees that if the borrower doesn't pay then the property
automatically goes to mortgagee
4. Deed and lieu of foreclosure
a. Only enter after you have defaulted and lender and intended to foreclose.
b. Borrow just gives deed.
c. Does not wipe out Junior deeds.
d. Once a lender accepts this, there is never any deficiency

How to foreclose
● Every state has judicial foreclose . However, in some states, this is the only method.
● Some states have power of sale foreclose .

There is not redemption in a foreclose .

● This exist in tax liens.

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