Real Property

Tenancy for Years

A tenancy for years lasts for a fixed or computable period and ends automatically when the term expires without notice. A lease for longer than the period specified by the statute of frauds must be in writing and signed by the party to be charged.

Periodic Tenancy

A periodic tenancy continues for successive periods until properly terminated. It may arise by express agreement, implication, or a tenant’s possession with periodic rent payments. At common law, termination requires notice equal to the length of the period, subject to a six-month maximum for a year-to-year tenancy; statutes often modify the notice period.

Tenancy at Will and Tenancy at Sufferance

A tenancy at will has no fixed duration and may generally be terminated by either party, subject to statutory notice. A tenancy at sufferance arises when a tenant wrongfully remains after the right to possess ends and lasts until the landlord evicts the tenant or elects to create a new tenancy.

Assignment Versus Sublease

A tenant makes an assignment by transferring the entire remaining leasehold interest and a sublease by retaining any part of the remaining term or a right of reentry. The characterization depends on the interest transferred rather than the parties’ label.

Privity After Assignment

An assignee is in privity of estate with the landlord and is liable for lease covenants that run with the land while the assignee holds the leasehold. The original tenant remains liable on contractual promises unless released by novation. An assigning tenant may be secondarily liable after the assignee defaults.

Privity After Sublease

A subtenant is ordinarily not in privity of estate or contract with the original landlord and therefore is not directly liable to the landlord for rent under the original lease. The original tenant remains liable to the landlord and may enforce the sublease against the subtenant.

Restrictions on Transfer

Absent a valid restriction, a tenant may assign or sublease. A restriction on assignment is generally construed narrowly and does not automatically prohibit subleasing. When a lease requires the landlord’s consent, some jurisdictions permit arbitrary refusal unless the lease requires reasonableness, while others require a commercially reasonable refusal. A landlord who consents to one prohibited transfer may waive the restriction as to that transfer but not necessarily future transfers.

Landlord’s Duty to Deliver Possession

Under the majority rule, the landlord must deliver actual physical possession at the beginning of the term and is liable if a holdover tenant remains. Under the minority rule, the landlord need only deliver the legal right to possession, leaving the new tenant to remove a holdover.

Tenant’s Duty to Pay Rent

A tenant must pay rent according to the lease while the lease remains in effect. At common law, lease covenants were independent, but modern residential law often allows a tenant to withhold or offset rent for a material breach of the implied warranty of habitability.

Tenant Abandonment and Landlord’s Options

When a tenant abandons before the term ends, the landlord may accept surrender and terminate the lease, leave the premises vacant and sue for rent as it accrues where permitted, or relet on the tenant’s account. The modern majority rule requires reasonable efforts to mitigate damages by seeking a replacement tenant.

Surrender

A surrender is the tenant’s offer to return the leasehold and the landlord’s acceptance. Acceptance may be express or implied from conduct inconsistent with continuation of the original lease. Reentry solely to mitigate or preserve the premises does not necessarily establish acceptance.

Covenant of Quiet Enjoyment

Every lease contains an implied covenant that the tenant will not be substantially disturbed in possession by the landlord or by someone with superior title. Actual eviction from any part of the premises breaches the covenant and may suspend rent under the traditional rule.

Constructive Eviction

Constructive eviction occurs when the landlord’s wrongful act or failure to perform a legal duty substantially interferes with the tenant’s use and enjoyment, the tenant gives notice and a reasonable opportunity to cure when feasible, and the tenant vacates within a reasonable time. A tenant who remains in possession generally cannot claim constructive eviction.

Implied Warranty of Habitability

A residential landlord must provide and maintain premises that are fit for basic human habitation. A substantial defect affecting health or safety, notice to the landlord, and failure to cure within a reasonable time constitute breach. Depending on the jurisdiction, the tenant may terminate, repair and deduct, withhold or reduce rent, seek damages, or obtain injunctive relief. The warranty generally cannot be waived.

Landlord’s Tort Duties

A landlord must use reasonable care regarding concealed latent defects known to the landlord, common areas under the landlord’s control, negligent repairs, premises leased for public admission, and defects the landlord has covenanted to repair after notice. Modern law in some jurisdictions imposes a broader duty of reasonable care under the circumstances.

Security Deposits

A landlord must handle and return a security deposit according to the lease and governing statute, may retain only authorized amounts for unpaid rent or damage beyond ordinary wear, and must often provide an itemized statement within a specified time. Wrongful retention may trigger statutory damages.

Implied Covenant of Marketable Title

Every contract for the sale of land contains an implied promise that the seller will deliver marketable title at closing unless the contract provides otherwise. Title is marketable when it is free from an unreasonable risk of litigation and would be accepted by a reasonable purchaser.

Defects Rendering Title Unmarketable

Title is generally unmarketable when there is an undisclosed encumbrance, a significant defect in the chain of title, an existing zoning or private restriction violation, or a substantial risk that another person has superior title. The mere existence of a zoning ordinance does not make title unmarketable, but an existing violation generally does.

Time to Cure and Purchaser’s Remedies

The seller ordinarily has until closing to cure a title defect. If the seller cannot deliver marketable title when performance is due, the buyer may rescind and recover payments, seek damages, or obtain specific performance with an abatement when appropriate. A buyer who prevents cure or repudiates prematurely may lose those remedies.

Equitable Conversion

Once an enforceable land-sale contract is formed, the buyer is treated in equity as the owner of the real property and the seller holds legal title as security for the purchase price. Unless the contract or statute provides otherwise, this doctrine may allocate the risk of casualty loss to the buyer, subject to the seller’s duty to convey and any insurance rules.

Merger at Closing

When the deed is delivered and accepted, contractual promises concerning title ordinarily merge into the deed. After closing, the buyer generally must sue on an applicable deed covenant rather than the contract’s implied covenant of marketable title. Independent or collateral contractual promises that the parties did not intend the deed to satisfy may survive.

Requirements of a Valid Deed

A valid deed must identify the grantor and grantee, contain words showing present intent to transfer, sufficiently describe the land, and be signed by the grantor. Consideration is not required for validity between the parties, although lack of value may affect protection under a recording act.

Delivery and Acceptance

A deed transfers title only if the grantor delivers it with present intent that it operate as a conveyance and the grantee accepts it. Delivery depends on intent rather than physical transfer alone. Acceptance is presumed when the conveyance benefits the grantee unless the grantee rejects it.

Conditional Delivery

An oral condition attached to a deed handed directly to the grantee is generally disregarded and delivery is absolute. A deed delivered to an independent escrow agent subject to stated conditions becomes effective when the conditions occur, provided the grantor relinquished the power to revoke the delivery.

Quitclaim, General Warranty, and Special Warranty Deeds

A quitclaim deed conveys whatever interest the grantor has without covenants of title. A general warranty deed protects against covered title defects arising anywhere in the chain of title. A special warranty deed protects only against covered defects or encumbrances created by the grantor during the grantor’s ownership.

Present Covenants of Title

The present covenants are seisin, right to convey, and against encumbrances. Seisin promises that the grantor owns the estate purportedly conveyed; right to convey promises legal power to transfer it; and against encumbrances promises that no undisclosed encumbrance burdens the property. Present covenants are breached, if at all, at delivery and generally do not run to remote grantees.

Future Covenants of Title

The future covenants are quiet enjoyment, warranty, and further assurances. They protect against later disturbance by a person with superior title, promise a defense against lawful superior claims, and require reasonable acts to perfect title. They are breached upon disturbance or failure to act and generally run with the land to successors.

Damages for Breach of Deed Covenants

Damages for failure of title are generally limited by the consideration received and measured by the value of the interest lost, often with interest. For breach of the covenant against encumbrances, damages are generally the lesser of the reasonable cost to remove the encumbrance and the diminution in value, subject to the deed and jurisdictional limits.

Common-Law Priority

At common law, competing conveyances are governed by first in time, first in right. An earlier valid interest prevails unless a recording act protects a later claimant. An unrecorded deed remains valid between the grantor and grantee.

Notice Recording Statute

Under a notice statute, a later purchaser for value prevails over an earlier unrecorded interest if the later purchaser lacked actual, record, and inquiry notice when the later purchaser acquired the interest. The later purchaser need not record first.

Race-Notice Recording Statute

Under a race-notice statute, a later purchaser for value prevails only if the purchaser lacked notice when acquiring the interest and records before the earlier claimant.

Race Recording Statute

Under a race statute, the first claimant to record prevails, regardless of notice, so long as the claimant falls within the statute’s protected class.

Bona Fide Purchaser

A bona fide purchaser acquires an interest for valuable consideration and without notice of the earlier interest. Donees, heirs, and devisees generally are not purchasers for value, though they may receive protection through the shelter rule.Recording acts protect a bona fide purchaser only against interests capable of being recorded; they do not defeat interests that arise by operation of law — such as title by adverse possession or an easement by prescription, implication, or necessity — because no instrument exists to record, although visible possession or use of the land may still charge the purchaser with inquiry notice.

Actual, Record, and Inquiry Notice

Actual notice is personal knowledge of the prior interest. Record notice arises from instruments properly recorded within the purchaser’s chain of title. Inquiry notice arises from facts that would cause a reasonable purchaser to investigate, including another person’s visible possession or references in recorded instruments; the purchaser is charged with what reasonable investigation would reveal.

Shelter Rule

A person who takes from a purchaser protected by the recording act generally receives the same priority even if the transferee has notice or gives no value. The rule protects the protected purchaser’s ability to transfer title, but a prior wrongdoer ordinarily cannot reacquire and improve the wrongdoer’s position through the rule.

Chain-of-Title Problems

A recorded instrument ordinarily gives record notice only if a reasonable title search under the jurisdiction’s indexing system would reveal it. A deed recorded before the grantor appears in the chain of title, or recorded after the grantor has conveyed away record title, may be outside the chain and fail to give notice.

Estoppel by Deed and After-Acquired Title

When a grantor purports to convey title the grantor does not own and later acquires that title, the later-acquired interest may automatically pass to the grantee under estoppel by deed. The doctrine generally applies to a purported conveyance of title and ordinarily not to a deed that merely quitclaims the grantor’s existing interest.

Easement Defined

An easement is a nonpossessory interest that gives its holder a right to use another’s land or to prevent a use of that land. An affirmative easement permits use; a negative easement restricts specified uses.

Easement Appurtenant and In Gross

An easement appurtenant benefits a particular parcel, the dominant estate, and burdens the servient estate. It ordinarily passes automatically with both estates. An easement in gross benefits a person or entity rather than a parcel and may be transferable according to its nature and governing law.

Express Easement

An express easement is created by a written grant or reservation satisfying the statute of frauds, identifying the parties and land, and showing intent to create the interest. Recording may be necessary to bind a later purchaser protected by a recording act.

Easement by Implication from Prior Use

An easement may be implied when commonly owned land is severed, before severance one part was used for the benefit of another in a manner that was apparent and continuous, the parties reasonably expected the use to continue, and the easement is reasonably necessary to enjoyment of the benefited parcel.

Easement by Necessity

An easement by necessity arises when commonly owned land is severed and the severance leaves a parcel without reasonably necessary access to a public road or utility. Strict necessity is commonly required. The easement ends when the necessity ends.

Prescriptive Easement

A prescriptive easement arises from use that is open and notorious, adverse or hostile, and continuous for the statutory period. Exclusivity is generally not required in the same sense as adverse possession. Permission defeats adversity.

Easement by Estoppel

An owner may be estopped from revoking permission when the owner allows another to use the land, reasonably foresees substantial reliance, and the user materially changes position in reliance. The easement lasts as justice requires.

Scope of Easement

The scope of an express easement is determined primarily by its language and the circumstances at creation. Use may evolve with normal development but may not unreasonably increase the burden on the servient estate or be used to benefit property not within the easement’s intended scope.

Rights and Duties of Easement Holders

The easement holder may make reasonable repairs and improvements necessary for use and generally bears the duty to maintain the easement unless the parties agree otherwise. The servient owner may use the land in any manner that does not unreasonably interfere with the easement.

Transfer and Subdivision

An appurtenant easement ordinarily transfers automatically with the dominant estate even if not mentioned in the deed. Subdivision of the dominant estate generally permits each subdivided parcel to use the easement if doing so does not unreasonably overburden the servient estate.

Termination of Easements

An easement may terminate by expiration, release in a signed writing, merger of the dominant and servient estates in the same owner, abandonment shown by intent plus conduct, estoppel, prescription by the servient owner, condemnation, or the end of necessity. Mere nonuse ordinarily is not abandonment.

Real Covenant - Burden

For the burden of a real covenant to run at law, there must generally be a writing satisfying the statute of frauds, intent that the covenant run, notice to the successor, the covenant must touch and concern the land, horizontal privity between the original parties, and vertical privity between the original covenantor and successor. The remedy is damages.

Real Covenant - Benefit

For the benefit of a real covenant to run at law, there must generally be a writing, intent, touch and concern, and vertical privity between the original covenantee and successor. Horizontal privity and notice are generally not required for the benefit.

Horizontal and Vertical Privity

Horizontal privity generally requires that the original covenanting parties shared an interest in land apart from the covenant, commonly through a grantor-grantee, landlord-tenant, or easement relationship. Strict vertical privity for the burden ordinarily requires the successor to take the covenantor’s entire durational estate; relaxed vertical privity is generally sufficient for the benefit.

Equitable Servitude - Burden

The burden of an equitable servitude runs when the covenant is in a writing, the original parties intended it to bind successors, it touches and concerns the land, and the successor has actual, record, or inquiry notice. Privity is not required. The usual remedy is an injunction.

Equitable Servitude - Benefit

The benefit of an equitable servitude runs when the covenant was intended to benefit successors and touches and concerns the benefited land. A writing or privity is generally not required for the benefit to run to a successor.

Implied Reciprocal Servitude

When a developer sells substantial parcels according to a common plan containing uniform restrictions, a court may imply a reciprocal restriction on retained or omitted lots if the parties intended a common scheme and the purchaser of the burdened lot had notice. Evidence includes a recorded plat, uniform deed restrictions, advertising, and the pattern of development.

Touch and Concern

A covenant touches and concerns land when it relates to the use, value, enjoyment, or physical condition of the benefited or burdened property rather than imposing a merely personal obligation. Modern law may enforce servitudes without using the label when the restriction is not illegal, unconstitutional, or contrary to public policy.

Defenses and Changed Conditions

Equitable defenses include unclean hands, estoppel, acquiescence, laches, and relative hardship. A restriction may be terminated or denied enforcement when changed conditions are so radical throughout the benefited area that the covenant no longer provides substantial benefit, but change outside the area or isolated violations ordinarily is insufficient.

Termination and Modification of Covenants

A covenant or servitude may terminate by its terms, written release, merger, abandonment through pervasive violations, changed conditions, prescription, condemnation, or agreement of the persons whose interests are affected. Marketable-title statutes may also extinguish old restrictions.

License

A license is revocable permission to enter or use land and is not an interest in land. It may be oral and ordinarily is not transferable. A license may become irrevocable for a reasonable period through estoppel when the licensee substantially relies with the licensor’s knowledge.

Profit

A profit is a nonpossessory interest allowing removal of natural resources from another’s land and generally carries an implied easement necessary for its use. Profits are created, transferred, and terminated under rules similar to easements.

Common-Interest Community Restrictions

Recorded declarations in a common-interest community bind owners who take with notice and are generally enforceable unless illegal, unconstitutional, or unreasonable. Association rules must be authorized by the governing documents and adopted and enforced in good faith and consistently.

Owners’ Association Powers and Duties

An owners’ association may levy assessments, maintain common property, enforce valid restrictions, and exercise powers granted by statute and the declaration. It owes duties to act within authority, use reasonable care, avoid arbitrary or discriminatory enforcement, and comply with procedural requirements.

Tenancy in Common

Tenants in common each hold an undivided fractional interest with an equal right to possess the whole property. Their shares may be unequal, are freely transferable, devisable, and descendible, and carry no right of survivorship. A conveyance to multiple persons is presumed to create a tenancy in common unless valid language creates another concurrent estate.

Joint Tenancy

Joint tenants hold equal undivided interests with a right of survivorship. At common law, creation requires the same time, title, interest, and right to possession, plus clear survivorship language. Modern statutes may modify the unity requirements but still generally require clear intent.

Tenancy by the Entirety

A tenancy by the entirety is a marital concurrent estate with survivorship recognized in some jurisdictions. Neither spouse acting alone may generally convey or encumber the entire estate, and an individual creditor ordinarily cannot reach the property while the tenancy continues. Divorce generally converts it to a tenancy in common.

Severance of Joint Tenancy

A joint tenant’s inter vivos conveyance of the interest severs the joint tenancy as to that share and creates a tenancy in common with the remaining owners. A will does not sever because survivorship operates before the will. Agreements, partition, and certain mortgages or leases may also cause severance depending on jurisdiction.

Mortgage by Joint Tenant

In a title-theory jurisdiction, a mortgage by one joint tenant generally severs the joint tenancy because legal title is transferred. In a lien-theory jurisdiction, the mortgage generally does not sever; if the mortgagor dies first, the interest may disappear by survivorship, subject to jurisdictional rules protecting the lender.

Lease by Joint Tenant

One joint tenant may lease that tenant’s undivided interest without consent of the others. Jurisdictions differ on whether the lease severs the joint tenancy or survives the lessor’s death; the lessee may not exclude other cotenants from possession.

Equal Right to Possession

Each cotenant has the right to possess and use the whole property consistent with the equal rights of the others. Exclusive possession by one cotenant is lawful unless the possessor ousts another or agrees to pay rent.

Ouster

Ouster occurs when a cotenant wrongfully excludes another cotenant from possession or clearly denies the other’s title and right to possess. After ouster, the excluded cotenant may recover possession and the occupying cotenant may owe fair rental value. Clear notice is required before one cotenant’s possession becomes adverse.

Rent from Third Parties

A cotenant who rents part or all of the property to a third party must account to the other cotenants for their shares of the actual net rent received. The leasing cotenant may convey only the possessory rights held and may not defeat the other cotenants’ rights.

Operating Income

A cotenant who uses the property in a business generally need not share business profits absent ouster, agreement, or exploitation of natural resources, but must account for rent or value attributable to use beyond the cotenant’s share when governing law requires.

Taxes, Mortgage, and Necessary Carrying Costs

A cotenant who pays more than a proportionate share of property taxes, mortgage interest, or other necessary carrying costs may obtain contribution from the other cotenants, subject to offsets for exclusive possession or rental value.

Repairs

A cotenant generally has no affirmative right to contribution for repairs made without agreement, though necessary repair costs may be credited in an accounting or partition if the other cotenants received notice and the repairs were reasonable.

Improvements

A cotenant has no right to contribution for unilateral improvements. At partition, the improving cotenant may receive the enhanced value attributable to the improvement and, when feasible, the improved portion, but bears any loss if the improvement did not increase value.

Waste

A cotenant may sue another cotenant for voluntary, permissive, or ameliorative waste that injures the common property or exceeds reasonable use.

Partition

A tenant in common or joint tenant generally has an absolute right to partition unless the right was validly waived for a reasonable time. The court prefers partition in kind when practical and fair, but may order sale and division of proceeds when physical division would cause substantial prejudice.

Adverse Possession by Cotenant

A cotenant’s possession is presumed permissive and consistent with common ownership. The statutory period for adverse possession against another cotenant begins only after clear ouster or unequivocal repudiation of the other’s title communicated to that cotenant.

Mortgage and Note

A mortgage is a security interest in real property securing an obligation, usually evidenced by a promissory note. The note represents the debt; the mortgage follows the debt and ordinarily cannot be enforced separately by a person not entitled to enforce the obligation.

Lien and Title Theory

In a lien-theory jurisdiction, the mortgagor retains legal and equitable title and the mortgagee holds a lien. In a title-theory jurisdiction, the mortgagee holds legal title for security purposes until the debt is satisfied. The distinction may affect possession, joint-tenancy severance, and rents.

Equitable Mortgage

A transaction intended to secure a debt may be treated as a mortgage regardless of form. A deed absolute on its face may be deemed an equitable mortgage when the circumstances show a loan and security arrangement, preserving the borrower’s equity of redemption.

Transfer by Mortgagor - Assumption

A grantee who assumes the mortgage becomes personally liable for the debt, while the original mortgagor ordinarily remains secondarily liable absent novation. The lender may enforce the obligation against both subject to suretyship defenses.

Transfer by Mortgagor - Subject To

A grantee who takes subject to a mortgage is not personally liable on the debt but risks loss of the property through foreclosure. The original mortgagor remains personally liable.

Due-on-Sale Clause

A due-on-sale clause permits the lender to accelerate the debt upon transfer of the property, subject to governing law and specified statutory exceptions.

Transfer by Mortgagee

Transfer of the note ordinarily carries the mortgage with it. A purported assignment of the mortgage without the debt is generally ineffective to transfer the right to enforce the security.

Mortgage Recording and Priority

Mortgage priority generally follows first in time unless altered by a recording act, subordination agreement, purchase-money priority, future-advance rule, modification, or other doctrine. A properly recorded mortgage gives record notice to later purchasers and lenders.

Purchase-Money Mortgage

A purchase-money mortgage secures funds used to acquire the property and generally receives priority over earlier liens arising through the purchaser, even if recorded later. Between a seller’s purchase-money mortgage and a third-party purchase-money mortgage, the seller’s mortgage commonly has priority.

Future-Advance Mortgage

A mortgage may secure future advances. Obligatory advances generally retain the mortgage’s original priority. Optional advances may lose priority to an intervening lien when the mortgagee had actual notice of that lien before making the advance, subject to the jurisdiction’s recording statute.

Modification and Priority

A material modification that prejudices a junior interest may cause the senior mortgage to lose priority to the extent of the prejudice. Extensions, increased principal, or increased interest may be material; minor or contemplated modifications ordinarily are not.

Rights Before Foreclosure

The mortgagor has an equitable right to redeem by paying the debt, accrued interest, and proper costs before foreclosure. The right cannot be waived in the original mortgage transaction, although the mortgagor may later transfer it for fair consideration.

Foreclosure

Foreclosure terminates the mortgagor’s equity of redemption and sells the property to satisfy the secured debt. The lender must comply with applicable judicial or power-of-sale procedures, notice requirements, and duties of good faith and commercial reasonableness.

Necessary Parties

Persons holding interests junior to the foreclosing mortgage are necessary parties because foreclosure can extinguish their interests. A junior interest holder omitted from foreclosure retains the interest and right to redeem. Senior interest holders are not necessary parties and their interests ordinarily remain on the property.

Effect of Foreclosure on Interests

A valid foreclosure extinguishes the foreclosed mortgage and junior interests that were properly joined or notified, but does not extinguish senior interests. The purchaser takes subject to surviving senior interests.

Distribution of Proceeds

Foreclosure proceeds are applied first to sale expenses, then to the foreclosed mortgage, then to junior liens in order of priority, with any surplus paid to the mortgagor. Senior liens remain attached to the property rather than being paid from a junior foreclosure’s proceeds.

Deficiency Judgment

If foreclosure proceeds do not satisfy the debt, the borrower or other personally liable party may owe a deficiency, subject to anti-deficiency statutes, fair-value limitations, and procedural requirements.

Statutory Redemption

Some jurisdictions provide a statutory right to redeem after foreclosure by paying the prescribed amount within a fixed period. During the redemption period, possession and rights to rents depend on statute.

Installment Land Contract

An installment land contract obligates the buyer to make payments over time while the seller retains legal title as security. Traditional forfeiture rules may permit the seller to cancel after buyer default, but modern courts often treat the arrangement like a mortgage and require foreclosure or grant restitution and cure rights.

Dragnet Clause

A dragnet clause purports to secure other debts between the parties. Courts construe it according to clear language and the parties’ intent and may limit it when the additional debt is unrelated or when enforcement would prejudice third parties without notice.

Fee Simple Absolute

A fee simple absolute is the largest possessory estate, potentially infinite in duration and freely transferable, devisable, and descendible. It is created by words showing an unrestricted grant and has no accompanying future interest.

Fee Simple Determinable

A fee simple determinable automatically ends upon occurrence of a stated event and returns to the grantor. Durational language commonly creates it, and the grantor retains a possibility of reverter.

Fee Simple Subject to Condition Subsequent

A fee simple subject to condition subsequent continues after the condition occurs until the grantor elects to terminate it. Conditional language plus an express right of entry or power of termination commonly creates it.