Property

Concurrent Estates

1. Joint Tenancy (Right of Survivorship)

2. Tenancy in Common (No Right of Survivorship)

3. Tenancy by the Entirety (Marital Estate)

Concurrent Estates

1. Joint Tenancy

Joint Tenancy (Right of Survivorship)

Characteristics

1. Right of Survivorship

   • Exception: joint tenant unlawfully and intentionally kills co-tenant, joint property become tenancy in common

2. Alienable: Transferable during lifetime 

3. Not devisable or descendible 

   • Devisable: pass by will

   • Descendible: pass by statutes of intestacy 

Creation

1. Joint Tenant must take

   1. Identical interests 

   2. At the same time

   3. By the same instrument

   4. With the same right to possession

2. Clear language in the grant

   • Right of Survivorship

     • Joint Tenant dies = person’s share passes to the surviving joint tenant automatically

     • Without clear language, we presume tenancy in common

Termination

1. Sale

   • JT sells/transfers during lifetime 

     • The buyer/transferee is a tenant in common

     • The remaining individuals are still joint tenants

2. Partition

   1. Voluntary and amicable end

   2. Judicial action

      1. Partition in kind: physical division if in the best interest of all parties 

      2. Forced sale: division of proceeds if in the best interest of all parties

3. Transactions that won’t result in severance

   • Mortgages 

     1. Majority → Lien theory (no severance)

     2. MINORITY → Title theory (severance)

Concurrent Estates

2. Tenancy in Common

Tenancy in Common (No Right of Survivorship)

Characteristics

1. No Right of Survivorship

   • Co-tenant will not automatically get your share when you die

2. Don’t need to have equal interests

   • Still has a right to possess the whole property 

     • No ouster: wrongful exclusion from whole/part

3. Each interest is divisible, descendible, alienable 

   • Devisable: pass by will

   • Descendible: pass by statutes of intestacy 

   • Alienable: transferable during holder’s lifetime

4. Other

   • Rents and Profits

     1. Co-tenant in exclusive possession → not liable for rent (unless ouster)

     2. Co-tenant who leases to a third party → must account to co-tenant (share profits)

     3. Adverse possession never met (unless ouster) 

   • Rights and Duties of Co-tenants

     1. Carrying Costs: taxes, mortgage interest payment

        • Each pays fair share 

     2. Repairs

        • Repairing co-tenant → right to contribution for reasonable, necessary repairs with notice

     3. Improvements

        • No affirmative right to contribution

        • Credit equal to any upside in value that her unilateral change caused at partition

     4. Tenant cannot commit waste

        • Voluntary: willful destruction

        • Permissive: neglect

        • Ameliorative: change without permission; increases value

Creation

1. Conveyance to two or more person, without more, is presumed to be a tenancy in common

Termination

1. Partition

   1. Voluntary and amicable end

   2. Judicial action

      • Partition in kind: physical division if in the best interest of all parties 

      • Forced sale: division of proceeds if in the best interest of all parties

2. One tenant in common mortgages her interest, mortgagee can only foreclose on the mortgaging co-tenant’s interest

Concurrent Estates

3. Tenancy by the Entirety

Tenancy by the Entirety (Marital Estate)

Characteristics

1. Similar to joint tenancy but it’s a marital estate

   • Can only be created by marriage

   • Right to survivorship

2. Impervious to 

   • Creditors of only one spouse 

   • Unilateral conveyance: One spouse, acting alone, cannot defeat the right of survivorship by unilaterally conveying to a third party

     • Deed or mortgage executed by only one spouse is ineffective

Creation

1. Majority: Any conveyance to married partners unless the grant says otherwise

Termination

1. Death, divorce, mutual agreement, execution of lien by both parties

   • Divorce → tenancy in common

Landlord / Tenant

Types

1. Tenancy for Years

2. Periodic Tenancy

3. Tenancy at Will

4. Tenancy at Sufferance

Transfer

1. Assignment

2. Sublease

Duties and Obligations

1. Tenant

   • Duty to pay rent

   • Duty to repair when lease is silent

   • Duty to repair when express covenant in lease

   • Duty to not use premises for illegal purposes

2. Landlord

   • Deliver Possession

   • Implied Covenant of Quiet Enjoyment 

   • Implied Warranty of Habitability

   • Retaliatory Eviction

   • Anti-Discrimination Legislation

Landlord’s Tort Liability

Landlord / Tenant

1. Tenancy for Years

Tenancy for Years

1. Commitment: High

2. For a fixed determined period of time

   1. Must be in writing if more than 1 year (statute of frauds)

3. Termination 

   1. Automatic on end date

      1. No notice needed

   2. Breach of Lease Covenant

      1. (most) landlord reserves right of entry → allows them to terminate if tenant breaches any of the lease’s covenants

         1. Failure to pay rent

   3. Landlord’s acceptance of tenant’s surrender

Landlord / Tenant

2. Periodic Tenancy

Periodic Tenancy

1. Commitment: Ongoing you keep making

2. Created

   1. Expressly

   2. Implication 

      • Land is leased with no mention of duration but provision made for payment of rent as set intervals

      • Oral term of years in violation of Statute of Frauds creates an implied periodic tenancy, measured by the way rent is tendered

      • Landlord elects to hold over a tenant who has wrongly stayed on past the conclusion, created implied periodic tenancy period tenancy, measured by the way rent is tendered

3. Continues for successive intervals until properly terminated

   1. Notice, usually in writing

   2. Properly: at the length of the interval

      • Year-to-year tenancy

        1. Common Law = 6 months notice

        2. Modern Rule = 1 months notice

Landlord / Tenant

3. Tenancy at Will

Tenancy at Will

1. Commitment: low

2. No fixed period of duration

   • Termination possible at any time by either party

     • BUT most states require reasonable notice 

3. Created

   • Express terminable at any time

   • Unless parties explicitly agree regular rent payments → implied periodic tenancy

Landlord / Tenant

4. Tenancy at Sufferance

Tenancy at Sufferance

1. Created when a tenant stays past the expiration of their lease

2. Terminated when landlord

   • Evicts tenant OR

   • Holds tenant to a new tenancy

3. No notice is required

Landlord / Tenant

Transfer

1. Assignment

Transfer

1. Tenant can freely transfer their interest unless the lease forbids it

   • Consent waives right to object to future transfers, unless reserved

   2. Privity of Estate: relationship based on possession

   3. Privity of Contract: relationship based on the lease

Assignment

1. Tenant transfers their interest in whole

   • New Tenant –privity of estate→ Landlord

     1. Can be held liable for all promises that run with the land

     2. They are no longer liable if they assign to another

        1. No longer in privity of estate and not ever in privity of contract

   • Original Tenant –privity of contract→ Landlord 

     1. Can be held liable for all the promises in the lease

Landlord / Tenant

Transfer

2. Sublease

Transfer

1. Tenant can freely transfer their interest unless the lease forbids it

   • Consent waives right to object to future transfers, unless reserved

   2. Privity of Estate: relationship based on possession

   3. Privity of Contract: relationship based on the lease

Sublease

1. Tenant transfers their interest in part

   • New Tenant not in privity of estate or contract with the Landlord

     1. Thus is not liable to the landlord, just the original tenant 

Landlord / Tenant

Duties and Obligations

1. Tenant

1. Duty to pay rent

2. Duty to repair when lease is silent

3. Duty to repair when express covenant in lease

4. Duty to not use premises for illegal purposes

Landlord / Tenant

Duties and Obligations

1. Tenant

   • Duty to pay rent

Duty to pay rent

1. Tenant breaches but is still on site

   • Options: evict or sue 

   • Landlord cannot engage in self-help

2. Tenant breaches but is NOT on site

   1. Surrender: T shows, by words or actions, that they wish to give up the lease

      • Then landlord can end lease 

   2. Ignore the abandonment (Minority Rule)

      • Hold Tenant responsible for rent

   3. Re-let (or at least try) (Majority) 

      • Hold tenant liable for deficiency 

3. Rent deposits

   1. (Most) States restrict amount L may charge (one month’s rent)

   2. Statutes amy require L to use interest-bearing account and inform Tenant

   3. Lease clauses that avoid these laws are void

Landlord / Tenant

Duties and Obligations

1. Tenant

   • Duty to repair when lease is silent

Duty to repair when lease is silent

1. Maintain premises

   1. Make routine repairs other than to ordinary wear & tear

2. Must not commit waste

   1. Voluntary (affirmative) waste → over harmful acts

   2. Permissive waste → neglect

   3. Ameliorative waste → alterations that increase the premises’ value

      1. Exception: permits this type of change if long term tenant and change reflects changes in the neighborhood

Landlord / Tenant

Duties and Obligations

1. Tenant

   • Duty to repair when express covenant in lease

Duty to repair when express covenant in lease

1. Common law → Tenant responsible for restoration of leased premises even if consequences of force of nature 

   • Majority view → Tenant may end lease when premises destroyed without tenant’s fault

2. Residential vs. Nonresidential Contexts

   • Residential: landlord usually remains obligated to repair under nonwaivable implied warranty of habituality

   • Nonresidential: absence of specific reference to ordinary wear and tear, a covenant to repair usually includes such repairs

Landlord / Tenant

Duties and Obligations

2. Landlord

1. Deliver Possession

   • Place T in physical possession of premises

2. Implied Covenant of Quiet Enjoyment 

3. Implied Warranty of Habitability

4. Retaliatory Eviction

5. Anti-Discrimination Legislation

Landlord / Tenant

Duties and Obligations

2. Landlord

   • Implied Covenant of Quiet Enjoyment

Implied Covenant of Quiet Enjoyment

1. L renders premises unsuitable for occupancy

   1. Wrongful eviction: L excludes T from whole or part of premises

      1. Actual eviction terminates T’s obligation to pay rent 

      2. Partial eviction relieves T of obligation to pay rent

   2. Constructive eviction: L renders premises unsuitable for occupancy 

      1. 3 Elements

         1. Substantial interference 

            1. Chronic or permanent problem attributable to L’s actions or failures

         2. Notice

            1. T must notify L of the problem

            2. L must fail to remediate problem within a reasonable time

         3. T must vacate within a reasonable time after L fails to resolve the problem

2. L not liable for acts of other tenant

   1. Exceptions

      1. Duty to abate a nuisance on site 

      2. Must control common areas 

3. Every residential and commercial lease

Landlord / Tenant

Duties and Obligations

2. Landlord

   • Implied Warranty of Habitability

Implied Warranty of Habitability

1. Provide premises that are fit for basic human habitation

   1. Determined by case law and housing code

      1. Examples: heat in winter, running water, adequate plumbing

2. T’s entitlements if L breaches

   1. Move

   2. Repair & deduct

   3. Reduce or withhold rent

   4. Remain & pay full rent & seek damages 

3. Every residential lease

   1. Not commercial leases 

   2. Nonwaivable

Landlord / Tenant

Duties and Obligations

2. Landlord

   • Retaliatory Eviction

Retaliatory Eviction

1. L can’t retaliate against T who reports housing code violations

   1. Many states presume retaliatory motive if L acts within 3 to 6 months 

2. L has burden of proving good faith reason for action

Landlord / Tenant

Duties and Obligations

2. Landlord

   • Anti-Discrimination Legislation

Anti-Discrimination Legislation

1. Civil Rights Act

   1. Can’t discriminate against tenants based on certain protected statuses

      1. Race or ethnicity

2. Fair Housing Act

   1. Unlawful to take actions against a person on basis of race, color religion, sex, disability, familial status, or national origin

      1. Reasonable accommodations for tenants with disabilities

   2. Exemptions

      1. Owner-occupied buildings with 4 or fewer units

Landlord / Tenant

Landlord’s Tort Liability

Common Law: Landlord has no duty to make the premises safe

1. Exceptions:

   1. Common areas

   2. Latent defects

      1. Landlord must warn of hidden defects they know or reason to know

   3. Assumption of repairs

      1. No duty to repair, but if they do, they must be completed with reasonable care

      2. Landlord liable if negligent 

   4. Public use rule

      1. Significant nature of the defect and the short length of the lease tenant will not repair → liable for any defects

   5. Short-term lease of furnished dwelling

      1. Responsible for any defective condition on site

Modern Trend: Landlords have a general duty of reasonable care

1. Landlord can be held liable for injuries resulting from the landlord’s negligence if they had notice and a chance to repair

Servitudes - Rights in Property

1. Easement

2. Licenses

3. Profit

4. Real Covenant

5. Equitable Servitude

Servitudes - Rights in Property

Easement

Nonpossessory property interests that entitles its holder to some form of use or enjoyment of another person’s land for a specified person

1. Affirmative: right to go onto and do something on another’s parcel

2. Negative: entities holder to prevent servient owner from doing something otherwise permissible

   • 4 types

     1. Light

     2. Air support

     3. Stream water and artificial flow

   • Created expressly by a writing

Types

1. Easement Appurtenant

   • 2 pieces of land

   • Benefits the holder in their use or enjoyment of their own land

     1. Dominant Tenement: land that benefits from the easement

     2. Servient Tenement: land that is burdened by the easement

   • Passes automatically with the dominant tenement

     1. Regardless of its even mentioned in the conveyance

     2. Unless new owner is a BFP without notice of easement

2. Easement In Gross

   • 1 piece of land

   • Holder derives a personal or economic benefit from the easement

     1. Easement doesn’t benefit their land

     2. Holder doesn’t even have to own land

     3. Examples

        1. Right to place a billboard on another’s lot

        2. Right to swim in another’s pond

        3. Utility company’s right to lay power lines on another’s lot

   • Not transferable unless commercial

Scope

1. Set by terms of grant or conditions that created it

2. Surcharged easement → easement's legal scope was exceeded

Servitudes - Rights in Property

Easement (Creating)

Creating an Easement

1. Affirmative Easement

   1. Grant (Most common)

      • Expressed and in signed writing

      • If more than 1 year → statute of frauds

   2. Implication

      • Implied from preexisting use

        • Use prior to division had to have been apparent

        • Parties reasonably expected that prior use would endure

      • No writing

   3. Necessity

      • Need, not want

      • Landlocked land without access to a public road

   4. Prescription

      1. Continuous and uninterrupted use for the statute’s period

      2. Open and notorious (discoverable upon inspection)

      3. Actual Use (need not be exclusive)

      4. Hostile (without consent)

2. Negative Easement 

   1. Created expressly by a writing

Servitudes - Rights in Property

Easement (Terminating)

Terminating

1. Estoppel

   • Servient owner materially changes position in reliance on the easement holder’s assurances that the easement will no longer be enforced

2. Necessity

   • Ends when given necessity ends, unless expressed writing

3. Destruction of servient land

   • Other than through the willful conduct of the servient owner

4. Condemnation of servient land

   • By government eminent domain power

5. Release

   • By holder to servient owner

   • Writing required 

6. Abandonment

   • Easement holder must show by Physical action

   • Nonuse alone not enough

7. Merger

   • Easement & servient land held by same entity

8. Prescription by servient owner

   • Continuous and uninterrupted use for the statute’s period

   • Open and notorious (discoverable upon inspection)

   • Actual Use (need not be exclusive)

   • Hostile (without consent)

Servitudes - Rights in Property

Licenses

Mere privilege to enter another’s land for narrow/delineated purpose

1. Freely revocable at will of licensor unless estoppel applies

   1. Classic cases

      1. Ticket cases

      2. Neighbors talking by the fence

   2. Estoppel

      1. When licensee has invested substantial money/labor on expectation that license would continue

2. Writing not needed

   1. License not subject to statute of frauds

Servitudes - Rights in Property

Profits

Entitles holder to enter servient land and take resources

1. Shares all rules of easements

2. Termination

   1. Surcharge: a misuse that overly burdens the servient estate

Servitudes - Rights in Property

Real Covenants

A written promise to do or not do something on land

1. Negative/Restrictive Covenants: promise not to do something

2. Affirmative Covenants: promise to do something

Does the covenant run with the land?

• Running with the land → covenant binds successors to the originally covenanting parties

• Easier for the benefit to run than the burden to run

1. Benefited Land

   • Requirements

     1. Writing

     2. Intent that benefit run

     3. Touch & Concern: must relate to the land

        1. Promise must affect the parties as landowners

     4. Privity: Relationship

        1. Vertical Privity→ Original Party + Successor

        2. Horizontal privity NOT required

2. Burdened Land

   • Requirements

     1. Writing

     2. Intent for successors to be bound

     3. Touch & Concern: must relate to the land

        1. Restrictive covenant: restrict the burdened parcel owner in her use of that parcel of land

        2. Affirmative covenant: increase her obligations in connection with the land 

     4. Privity: Relationship

        1. Parties should have some shared interest in the land

           1. Horizontal Privity→ Original Parties (hard to meet)

              1. Grantor-grantee 

              2. Landlord-tenant

              3. mortgagor-mortgagee

           2. Vertical Privity→ Original Party + Successor

              1. Contract, devise, or descent

              2. Absent if acquired interest through adverse possession

     5. Notice

        1. Successor had to have known or should have known of the promise when they acquired the land

           1. Actual, inquiry, or record notice

Enforcement

1. Money Damages: Real Covenant

2. Injunction: Equitable Servitude

   • Requirements

     1. Writing

     2. Intent

     3. Touch & Concern

     4. Notice (usually)

Servitudes - Rights in Property

Equitable Servitude

Promise equity will enforce against successor of burdened tract

• Injunctive relief

Requirements

1. Writing

2. Intent that promise would be enforceable by and against successors

3. Touch and concern

   1. Affects the parties as landowners

4. Notice

   1. Subsequent purchasers of land burdened by covenant had actual, inquiry, or record notice 

5. Equitable Servitude 

6. NO PRIVITY is required

Implied Equitable Servitude

1. The general or common scheme doctrine 

   1. Court will imply reciprocal negative servitude

   2. Elements

      1. When sales began, subdivider had scheme of development which included D’s lot

      2. D had notice of restriction when he took

         1. Actual notice→ D was advised

         2. Inquiry notice→ Lay of the land

            1. Constructive notice

         3. Record notice→ Public documents

Equitable Defenses to Enforcement

1. Changed neighborhood conditions

2. Unclean Hands: violating restriction on own parcel

3. Benefited part acquisition (or reasonable person would believe they had)

Adverse Possession

Possession for statutory period can ripen into title if elements are met

1. Continuous 

   • Regular use, of the type the owner might use

   • Uninterrupted 

2. Open and Notorious 

   • Sufficiently apparent 

3. Actual and Exclusive

   • Actual: Gain title only to land they actually occupy 

     1. Exception: Possessor enters under color of title (meaning by invalid deed)

        1. Deemed to be in constructive possession of all the land that the deed describes 

   •  Exclusive: Possessor is not sharing with the true owner or the public

4. Hostile 

   • Without the owner’s permission

   • Adverse possessor’s state of mind is irrelevant

5. For the statutory period

   • Tacking: adverse possessor may tack on to predecessor’s time if there is privity

     1. Privity is satisfied by any non-hostile nexus

     2. Privity is absent if possessor ousts predecessor 

   • Disabilities: SOL will not run against true owner with a disability at inception of adverse possession 

     1. E.g. insanity, infancy, imprisonment

If an adverse possessor uses the land in violation of a real covenant, she takes title free of the covenant EVEN IF she had knowledge of it.

Conveyance

Steps of Conveyance (process of buying and selling real estate)

1. The Land Sale Contract

2. Closing

Recording Legal Title

Steps of Conveyance (process of buying and selling real estate)

1. The Land Sale Contract

Equitable Title passes to the Buyer

Requirements

1. In writing (Statute of Frauds)

   1. Identify the parties

   2. Describe the property

      1. Inaccurate description of land

         1. Land is smaller than the land description

            1. Remedy: specific performance with a pro-rata reduction in price commensurate with the acreage deficiency

   3. State the price

      1. Or a way to determine it

2. Signed

   1. By the party being sued

3. Exception to writing requirement: Doctrine of Part Performance

   1. Allows buyer to enforce oral contract by specific performance if

      1. Contract is certain and clear and 

      2. Acts prove existence of contract

         1. Satisfied by 2 out of 3

            1. Buyer takes possession

            2. Buyer paid purchase price or significant portion

            3. Buyer made substantial improvements

Legal Consequences of entering into the Contract

1. Doctrine of Equitable Conversion

   • Once the contract is signed, equity regards the buyer as the owner of the real property (Land contract → equitable title)

     • Majority view: before closing, the buyer bears the risk of loss

       • Unless the contract says otherwise

Law implies 2 key promises into every land sale contract

1. Seller will provide marketable title at closing

2. Seller will not make any false statements of material fact

3. No implied warranties of fitness or habitability

   • Exception: sale of new home by builder

Steps of Conveyance (process of buying and selling real estate)

1. The Land Sale Contract

   • Seller will provide marketable title at closing

Seller will provide marketable title at closing

1. Marketable: Title that’s reasonably free from doubt and the threat of litigation

   1. Title a seller could take to market, does not mean perfect

   2. Title must be marketable on the day of closing

2. Unmarketable

   1. Defects in record chain of title

      1. Adverse possession

   2. Encumbrances (unless waived)

      1. Liens

      2. Mortgages

      3. Easements

         1. Majority: beneficial easement that was visible or known to the buyer does not constitute an encumbrance

      4. Restrictive covenants

   3. Existing zoning violations

      1. Not zoning restrictions

3. Remedy

   1. Notify the seller that title is unmarketable and give the seller reasonable time to cure the defects

      1. If failure to cure → buyer remedies

         1. Recession

         2. Damages

         3. Specific performance

         4. Quiet title suit 

      2. IF closing occurs → seller’s liability on the implied contractual covenant ends

Steps of Conveyance (process of buying and selling real estate)

1. The Land Sale Contract

   • Seller will not make any false statements of material fact

Seller will not make any false statements of material fact

1. Liable for Failure to disclose material omissions of latent defects if:

   1. Seller must know or have reason to know of defect;

   2. Seller must realize buyer is unlikely to discover defect; and

   3. Defect must be serious enough that buyer would probably reconsider purchase

2. “As is” clauses (disclaimer clauses) will not excuse a seller who commits fraud or fails to disclose

Steps of Conveyance (process of buying and selling real estate)

2. Closing

After paying, the deed which hold Legal Title passes to the Buyer

• Possession follows legal title

The Deed

• Deed needs to be lawfully executed and delivered

• What effect does the type of deed have?

  • Scope of title assurance

• Types of Deeds

Common Issues before closing

• Things that cause either party to back out

• Things that call into question the nature of the deal

Common issues after closing

• Seller surprise

Steps of Conveyance (process of buying and selling real estate)

2. Closing

   • The Deed

Deed needs to be lawfully executed and delivered

Lawful Execution

• Requirements

  1. Writing signed by the grantor

  2. Identify the parties

  3. Unambiguous description of the land

     • Need not be perfect

     • Must be unambiguous and at least provide good lead

  4. Words of intent to transfer

  5. No consideration needed

Delivered

1. Manual / physical transfer to grantee

   • Does not necessarily require actual physical transfer

   • Grantor's intent that the deed have a present operative effect

2. Rejection defeats delivery 

3. Delivery with oral conditions

   • Oral condition drops out

   • Not provable

   • Delivery is done

4. Delivery by escrow

   • Grantor may use escrow agent

   • Once conditions are met, title passes to grantee

Steps of Conveyance (process of buying and selling real estate)

2. Closing

   • Types of Deeds

Quitclaim Deed (Worst)

• Grantor is promising nothing about the title (no covenants)

General Warranty Deed (Best)

• Promises the buyer can use to seek help if legal title isn’t as promised 

  1. Present Covenants (Breached, if at all, at the time the deed is delivered)

     1. Covenant of Seisin → grantor owns the land

     2. Covenant Right to Convey → Grantor can transfer (no temporary restraints on alienation or his capacity or power; sound mind, requisite age)

     3. Covenant Against Encumbrances → No servitudes/liens

  2. Future Covenants (Breached, if at all, when the grantee is disturbed in possession)

     1. Covenant of Quiet Enjoyment → No 3rd party lawful claims

     2. Covenant of Warranty → Grantor will defend 

     3. Covenant of Further Assurances → Grantor will perfect the title 

• Warrants against all defects in title, including problems attributable to their predecessors

Special Warranty Deed (Middle)

• Warrants against all defects in title only on behalf of herself

Conveyance

Recording Legal Title

Recording takes the document showing your property rights and puts it on the record

Recording Statutes

1. Race Acts

2. Notice Acts

3. Race-Notice Acts

Only protects Bona Fide Purchasers

Chain of Title (Record Notice)

1. Chain of Title Problems

   1. Shelter Rule

   2. Wild Deed

   3. Estoppel by Deed

Conveyance

Recording Legal Title

• Recording Statutes

Race Acts

1. Whoever records first wins

2. Example Statute:

   • “Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser whose conveyance is first recorded.”

Notice Acts

1. Subsequent purchaser who had no notice of the prior conveyance wins if the prior grantee failed to record

2. Example Statute

   • “Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

Race-Notice Acts

1. Subsequent purchaser who had no notice of the prior conveyance wins if they record first

2. Example Statute

   • “Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded”

Conveyance

Recording Legal Title

• Bona Fide Purchasers

Only protects Bona Fide Purchasers

Bona Fide Purchaser Requirements

1. Purchaser for value 

   • Pay valuable consideration

   • Not by gift or inheritance

     • Recording statutes do not protect donee, heirs, or devisees unless the shelter rule applies

2. No notice of prior conveyance

   1. Actual notice → B learns of A (Literal knowledge)

   2. Inquiry notice → B charged with what inspection would’ve revealed 

   3. Record notice → B on notice of deeds properly recorded in chain of title

Conveyance

Recording Legal Title

• Chain of Title

Chain of Title (Record Notice)

• Sequence of recorded documents capable of giving record notice to later takers

• Deed must be properly recorded to give record notice

Chain of Title Problems

1. Shelter Rule

   1. Anyone who takes from a BFP will prevail against any interest the BFP would’ve prevailed against

      1. Example: O conveys to A. A doesn’t record. O conveys to B, BFP who records. B conveys to C (mere donee or who knew of O to A). Who prevails? C

2. Wild Deed

   1. Recorded deed that isn’t connect to chain of title (incapable of giving record or constructive notice)

      1. Example: O sells to A. A doesn’t record. A sells to B. B records A-to-B deed.

         1. A-to-B deed is a wild deed. 

      2. Example: O sells to C. C has no actual or inquiry notice. C records.

         1. B vs. C? C prevails

         2. Notice state? C is the last BFP to take.

         3. Race-Notice? C is a BFP who wins the race to record. Why? Because B’s recording is a nullity. Recording a wild deed is the same thing as never having recording it at all.

3. Estoppel by Deed

   1. One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires the title that he had previously purported to transfer

Zoning

Government’s ability to control land usage

• States and local governments can divide up jurisdictions into different zones and say what types of land uses are permitted or prohibited in those zones

Variance

• Permission to depart from zoning restriction

• Proponents of it must show:

  1. Undue hardship; and

  2. No diminution to neighboring property values

Nonconforming Use

• Previously allowed use cannot be eliminated all at once unless just compensation paid for the taking

2 Types of Zoning Ordinances

1. Cumulative Zoning

   • Land ranked and categorized to create hierarchy of uses

     • Single family home is highest use

   • Land zoned for particular use may be used for that stated purpose and any higher use

2. Noncumulative Zoning

   • Land used only for purpose for which it is zoned

Special Use Permit

• Must be obtained even though zoning is proper for intended use

• Statutorily designed schedule of special uses

  • Examples: hospitals, funeral homes, drive-ins

Mortgages Generally

Transaction requires Borrower (Mortgagor) getting a loan from a lender (Mortgagee)

• Security for loan: mortgage on their property

Types of Mortgages

1. Purchase-Money Mortgage

   • Extension of value by lender who takes a security interest in the real estate their loan enables the debtor to acquire

2. Non-Purchase Money Mortgage

   • Loan by lender doesn’t enable the debtor to acquire the real estate

Requirements of a Mortgage (Creation)

1. The Promissory Note (Note)

   • Debtor is promising that they are good for payback 

2. The Mortgage

   • Gives the lender the right to sell land to pay back the loan

   • Requirements

     • Must typically be in writing (statute of frauds) → Legal Mortgage

       1. Names for mortgages

          1. Mortgage deed

          2. The note

          3. Security interest in land

          4. Deed of trust

          5. A sale lease-back

Transfer of the Mortgage

1. Mortgagee (Lendor) transfers (most common)

   1. Can transfer by

      1. Endorsing the note and delivering it to the transferred or

      2. Executing a separate document of assignment 

   2. Mortgage remains on the land even after sale 

   3. Recording statutes protect mortgagees

      1. If recorded, mortgage sticks with the land

2. Mortgagor (Borrower) transfers

   1. Buyer either assumes the mortgage or take the property subject to the mortgage

      1. Assumes the Mortgage: Both assume personal liability 

      2. Subject to the mortgage: Transferee assumes no personal liability on the outstanding debt

         1. Mortgage still remains on the land as long as it was properly recorded

Rights in the Land (to Mortgagee)

3 Different Theories of Title (based on State)

Lien Theory (Majority)

• Mortgagee holds a security interest in the property

  • Mortgagee has no right to possess the property before foreclosure

Title Theory (Minority)

• Mortgagee holds legal title to the property until the mortgage is satisfied or foreclosed

  • Entitled to possession on demand at any time

Intermediate Theory (Some States)

• Legal title is in the Mortgagor until default and upon default legal title is in the Mortgagee

  • Mortgagee can demand possession as soon as default occurs

Mortgage Foreclosure

Default: Mortgagor is in default (nonpayment of the loan) → Mortgagee can

• Foreclose: Process by which the mortgagor’s interest in the property is terminated

Foreclosure Sale

Conducted by Auction

2 Types

• Nonjudicial

• Judicial

Proceeds (in full)

1. Order: Attorney Fees & Costs → Principal and accrued interest of the foreclosing party’s loan (Senior) → Any Junior Interests → Surplus (to debtor)

   • Claims Order: Senor → Junior

     1. Priority determined by when a mortgage was placed on the property

        • Can be affected by if it was recorded or if it was subordinated

     2. Landowner enters into a modification agreement with the senior mortgagee, raising its interest rate or otherwise making the agreement more burdensome, the junior mortgage will be given priority over the modification

2. Deficiency: Proceeds less than what is needed to pay all claimants in full

   • Claimants who were not paid in full can bring a personal action against the debtor to recover what they are still owed

Priority of Creditors

1. Creditors must record

   • First in time, first in right

2. Exception: Purchase-money mortgage

   • Has first priority in the parcel financed (if recorded properly)

Effect of Foreclose on Interests

Effect of Foreclose on Interests

1. Junior interests Terminated

   • Terminated once foreclosure of the senior claim has occurred with the proceeds distributed appropriately 

     1. Can still proceed for a deficiency judgement 

   • Paid in descending order from sale proceeds

   • Necessary Parties for the foreclosure action

     1. Parties

        1. All junior lienholders

        2. Debtor

     2. Failure to include results in the preservation of that party’s claim 

        1. Thus the mortgage would remain on the land 

2. Senior interests to the mortgage not affected

   • Buyer takes subject to them 

   • Not personally liable to the senior interests

     1. HOWEVER if it’s not paid, the senior interest will eventually foreclose against the land

Redemption

Redemption: Mortgagor’s right to free the land of the mortgage

1. Redemption in Equity: At any time prior to the foreclosure sale, the mortgagor has the right to redeem the land and free it of the mortgage by paying off the amount due

   1. After foreclosure → no right to equitable redemption

   2. Many States: Statutory Right of Redemption

      1. Right to redeem for some fixed period after the foreclosure sale has occurred

         1. Even after the sale, they can send whatever amount their property sold for at the foreclosure sale and redeem their land

2. Acceleration Clause: permits the mortgagee to declare the full balance due in the event of default

   1. How is the right of equitable redemption exercised when there is no acceleration clause?

      1. By paying off the missed payment due plus interest and costs

Condos and Homeowners’ Associations

Individual Condo

1. Each owners owns in fee simple of the interior of the individual unit

   1. And an undivided interest in the exterior and all of the common elements

      1. Tenant in common as to all the common elements

   2. Ordinary rules against restraints on alienation apply

Homeowner’s association

1. Each condo owner is a member 

2. Members elect the board 

3. The board

   1. Manages property

   2. Oversees common elements

   3. Board governs declaration of covenants, conditions, restrictions

4. Each condo owner pay HOA fees and dues

   1. Special assessment: one time fee for emergency

Natural Rights

Rights incidental to ownership land

Lateral support

1. Right to have land supported in natural state

2. If landowner cause adjacent land to subside

   1. Land in natural state → strict liability

   2. Land improved → liability if negligent

Water Rights

1. Watercourse: Determining the allocation of water in watercourses (river, stream, lake)

   1. Riparian Doctrine

      1. Water belongs to those who own land bordering watercourse

   2. Prior Appropriation Doctrine

      1. Water belongs to state

      2. Right to divert/use can be acquired through actual use 

      3. First in time, first in right

2. Groundwaters

   • Surface owner entitled to make reasonable use

3. Surface Waters

   • Common enemy rule: owner can take an protective measures to get rid of surface water or combat its flow

Right to exclude

1. Trespass: invasion by tangible physical object or person

2. Private Nuisance: invasion by intangible like odor or noise

Present Possessory Estates

1. Fee Simple Absolute

2. Defeasible Fee

   1. Fee simple determinable

   2. Fee simple subject to condition subsequent

   3. Fee simple subject to executory interest

3. Life Estate

Present Possessory Estates

1. Fee Simple Absolute

Creation

• “To A” or “to A and his heirs”

  • A living person has no heirs

  • Thus, those heirs apparent are powerless

Characteristics

1. Potentially limitless duration

2. Freely alienable

   • Alienable: capable of transfer inter vivos (during lifetime)

3. Freely divisible

   • Divisible: capable of passing by will

4. Freely descendible

   • Descendible: capable of passing by intestacy (no will)

Present Possessory Estates

2. Defeasible Fee

Fee simples with a condition attached (defeasible = forfeiture)

3 Types

1. Fee simple determinable

2. Fee simple subject to condition subsequent

3. Fee simple subject to executory interest

Rules of Construction

1. Words of mere desire, hope, intent don’t create defeasible fee

2. Absolute restraints on alienation are void

   • Reasonable time-limited restraints okay

Present Possessory Estates

2. Defeasible Fee

   • Fee simple determinable

Fee simple determinable

1. Terminates automatically on happening of stated event

2. Created by clear durational language

   • “To A ..”

     • “For as long as”

     • “While”

     • “During”

     • “Until”

3. Characteristics

   • Freely alienable

     • Alienable: capable of transfer inter vivos (during lifetime)

   • Freely divisible

     • Divisible: capable of passing by will

   • Freely descendible

     • Descendible: capable of passing by intestacy (no will)

   • But wherever the estate passes to, the condition accompanying it follows

4. Possibility of Reverter

Present Possessory Estates

2. Defeasible Fee

   • Fee simple subject to condition subsequent

Fee simple subject to condition subsequent

• Use of conditional language + explicit right to re-enter

• Not automatically forfeited or terminated (grantor’s prerogative)

• When there are elements of both fee simple determinable and fee simple subject to condition subsequent

  • Construe in favor of latter

Present Possessory Estates

2. Defeasible Fee

   • Fee simple subject to executory interest

Fee simple subject to executory interest

• “To A, but if X event occurs, then to B”

  • Third party, not grantor, takes if condition betrayed

• Forfeiture automatic on behalf of the other party

Present Possessory Estates

3. Life Estate

Measured in lifetime terms (not in term of years)

• “To A for life” (A = life tenant)

Life Estate Pur Autre Vie (life of another)

• “To A for the life of B”

Doctrine of Waste

• Life tenant is entitled to all ordinary uses and profits from land, but must not commit waste

• Types of waste

  1. Voluntary: actual overt conduct causing drop in line

     1. Natural resources

        1. Exploitation limited when

           1. Necessary for repair or maintenance of the land

           2. Land is suitable only for such use

           3. It’s expressly or impliedly permitted by the grantor

        2. Open Mines Doctrine

           1. If mining was done prior to the life estate, life tenant can continue mining but only to the mines already open

  2. Permissive: failure to take reasonable measures to protect land (neglect)

     1. Duties of the life tenant 

        1. Preserve the land and structures in a reasonable state of repair

        2. Pay ordinary taxes on the land

        3. Pay interest on mortgages (not principle)

        4. Pay special assessments for public improvements of short duration 

     2. Not liable for damages caused by a third party tortfeasor

  3. Ameliorative: unilateral change that enhances value

     1. Modern Law: life tenant may alter or even demolish existing buildings if: 

        1. Market value of the future interests is not diminished AND

           1. The remaindermen do not object OR

           2. Substantial and permanent change in the neighborhood conditions has deprived the property in its current for of reasonable productivity or usefulness

Future Interests

1. Future interests in grantor

2. Future interests capable of creation in a third party

   1. Remainder

   2. Executory Interest

Future Interests

1. Future interests in grantor

Possibility of Reverter

• Accompanies fee simple determinable

Right of entry / power of termination

• Accompanies fee simple subject to condition subsequent

Reversion

• Arises when grantor conveys estate of lesser duration than they started with

Future Interests

2. Future interests capable of creation in a third party

   • Remainder

Possession on natural expiration of preceding estate (e.g. life estate) (patiently wait)

• Never follow defeasible fees

• Example: “To A for life, then to B”

  • A = life tenant

  • B = remainderman

2 Types

1. Contingent Remainder

2. Vested Remainder

Future Interests

2. Future interests capable of creation in a third party

   • Contingent Remainder

Contingent Remainder

Taker as yet unascertainable OR subject to condition precedent

1. Unascertainable

   • “to A for life, then to B’s first child.” A is alive. B has no children.

2. Subject to condition precedent:

   • “to A for life, then if B graduates from college, to B.” A is alive. B is now in high school.

Common law doctrines on remainders have been abolished → likely wrong answer

1. Destructibility of contingent remainders

2. Rule in shelley's case

3. Doctrine of worthier title

Future Interests

2. Future interests capable of creation in a third party

   • Vested Remainder

One created in an existing and ascertained persona nd not subject a condition precedent

3 Types

Indefeasibly vested remainder

• Holder of the remainder certain to acquire an estate in the future with no strings or conditions attached

• “To A for life, remainder to B.” A is alive. B is alive. 

  1. B has a indefeasible vested remainder

  2. If B dies before A, then it passes to B’s heirs once A dies.

Vested remainder subject to total divestment

• Subject to condition subsequent 

  1. Condition Precedent: Appears before language introducing you to remainderman

  2. Condition Subsequent: Appears after language that, alone and set off by commas, creates remainder

• “To A for life, then to B, provided, however, that if B dies under the age of 25, to C.” A is alive. B is 20 years old.

Vested remainder subject to open

• Class of takers, at least one already qualified to take 

  1. Rule of Convenience: when any member can demand possession the class closes

• “To A for life, then to B’s children.” A is alive. B has two children, C and D.

  1. Class closes at A or B’s death

Future Interests

2. Future interests capable of creation in a third party

   • Executory Interest

Interest in third parties that either divest a transferee’s preceding freehold estate, or follow a gap in possession or cut short a grantor’s estate

1. Springing executory interest → cuts short grantor

   1. “To A, if and when she becomes a lawyer.” A is in high school. 

      1. A has a springing executory interest.

2. Shifting executory interest → cuts short grantee

   1. Always follows a defeasible fee

   2. “To A, but if B returns from Canada, to B and his heirs.”

      1. B has a shifting executory interest.