Property Notes

Topic
I. II. A. B. C. D. E. F. G. H. I. III. A. 1st Half of Semester Bundle of Sticks Exclude Possess Occupy Use Destroy Alienate Manage Derive income from Devise or bequeath Lease Exclusion 1. Real General right to exclude (Steenberg Homes) Not absolute. Balance Test* Sufficient countervailing interest Ex: Constitutional issues; public policy (Shack) Exception: Efficiency Public place i.e. Mall (J.M.B. Realty) Less rights to exclude from public place Private or Public? a. What is the normal use of property? b. Extent of public invitation c. Purpose of free space 2. Chattel Trespass must cause damage (Intel) B. Lease 1. Agreement under which the owner gives up possession and use for valuable consideration for a definite term, after term owner can retake control. 2. Both a contract and a conveyance of interest in an exclusive right to possess property 3. INTENT OF PARTIES: Language of agreement Conduct of parties Nature of interest in property 4. ASK: would interpreting this contract to be X (lease or license) create an injustice or thwart an important public policy. 5. License and Lease Comparison Lease License Space Defined No particular defined area necessary Term Definite No particular defined term necessary Exclusive right to possess land of another Privilege to use or go on premises for certain purpose or use Possessory property interest No possessory property interest Not at Will - Generally revocable Revocable at will Assignable and transferable, Personal to license holder. Non transferable, non assignable, but might require LL's consent

Topic

Not at Will - Generally revocable Revocable at will Assignable and transferable, Personal to license holder. Non transferable, non assignable, but might require LL's consent Rent paid at particular times C. LL's Duties 1. To convey legal possession to T 2. To police common areas from nuisances 3. Not to interfere with T's physical possession 1 Wrongful Eviction through LL encroachment` I Actual: Complete or total expulsion from or deprivation of premises. 1 Partial actual: Expulsion, or deprivation of only a portion of rights i. Remedy - Pay a reduced rent value/abated (Knight) a. De minimus No rent suspension because no eviction b. Slightly above de minimus Total suspension c. Substantial Total suspension II Constructive: No actual deprivation, but equivalent 1 T must quit the premises because... i. LL failed to perform obligation, and ii. T's enjoyment is materially impaired (not Echo) iii. Ex: No heat or water, noise or odor 2 CQE Breach I Express or Implied Promise by LL or grantor that T or grantee will not suffer disturbance... 1 by LL, person with superior title, or other; or 2 eviction; or II CQE breached when LL 1 substantially interferes with... i. Ts beneficial use or enjoyment of the premises... ii. Does not need to be tantamount to constructive eviction. 2 Notice Required 3 Goodbye - Vacate premises III Breach of CQE may constitute constructive eviction 4. To make possession actually available 3rd Party Interference w/ Actual Possession A Encroachment = Complete abatement. - (Smith v. McEnany) B English Rule/Majority): LL must furnish... a. both actual and legal possession C American Rule/Minority): LL must furnish... a. only legal possession CQE A Majority: LL is not liable for other Ts actions. a. absent negligence by LL or b. unless done at the direction of the LL. B Minority: Liable where LL has a. Notice of and permits continuance of... b. lewd and immoral conduct of another T.. C Criminal acts: LL must use reasonable care to protect Ts form foreseeable criminal acts. D. LL breach of implied agreements, consider 3 questions 1. Did the LL impliedly promise? Warranty of Habitability - Residential (Marini's Toilet) At time of letting and thereafter until end of term, LL must provide... a. bare living requirements 1. Vital services/necessities water, heat, basic cleanliness b. Not liable for T induced accidents

Warranty of Habitability - Residential (Marini's Toilet) At time of letting and thereafter until end of term, LL must provide... a. bare living requirements Topic 1. Vital services/necessities water, heat, basic cleanliness b. Not liable for T induced accidents T need not quit premises to claim. a. Differs from constructive eviction - require you to leave c Breach of IWH when...Two authorities a. Moment when conditions exist b. After notice/reasonable time to repair 1. T can waive if failure to provide notice Warranty of Suitability - Commercial Premises will be suitable for intended purpose and remain so. (Davidow) 2. Remedies for LLs breach, if termination not available. ML - Damages, recission or specific performance Self-Help (Marini) Repair and deduct, or seek damages Vacate, then seek damages Withhold rent, or abatement (McEnany) Pay rent and sue for diminution in value of premises Damage measurement Trad - Value of promised - delivered Alt - What should have been provided - Actual provisions % - Reduction by % that enjoyment was reduced E. CL: Tenancies.. 1. For Years Creation Express agreement in writing between LL and T. For a certain length of time and no longer. Termination Ends on lease's expiration, unless renewed No notice required. Party death irrelevant 2. Periodic Creation Express agreement, or inferred from facts, on time of payment Ex: week-to-week or month-to-month Termination Automatically renews without notice by either party i One period in advance, or 30 days minority 2 Party death irrelevant 3. At Will - Abolished mostly Creation By express agreement or inferred from facts. Owner permits another person to possess without any agreement as to a termination date or payment of rent. No designated period of duration other than the will of both parties. Payment of rent converts to periodic tenancy - Most states Termination Terminates upon Notice by either party, Death of either party, or upon reassignment by LL or T 4. At Sufferance Creation When T holds over after expiration without LL consent Termination No notice required to terminate. LL's rent acceptance converts to periodic tenancy

Topic

Termination No notice required to terminate. LL's rent acceptance converts to periodic tenancy 5. Other common ways to terminate tenancy Breach of T Breach of LL By agreement of parties IV. Fair Housing A. Protections 1. Civil Rights Act of 1866 - prohibits public discrimination Jones v. Alfred H. Mayer Co., prohibits public discrimination 2. Fair Housing Act of 1968 Other Statutes LL may discriminate against whomever, absent a state statue specifying otherwise(STAHL) Statutes prove illustrative, not exhaustive as to a list of protected classes. (Marina) Disproportionate affect to minorities, even if not racially motivated, violation of FHA (e.g. quotas, racial tipping point considerations).(Starrett) Protected classes Race, Color, Religion, Sex, Familial status, National origin, or Disability. *Sexual orientation. Covered Dwellings under FHA Residential dwellings Nursing homes College dormitories Time-shares condominiums Hotels: Covered in Civil Rights Act of 1866 and 1964 Exemptions under FHA Single family houses sold or rented by an owner Small multiunit dwellings where owner occupies one unit Although FHA exempt, not exempt from Civil Rights Act of 1866 and others. Senior citizens communities (age restrictions) Standards of Proof EPC - public actions ex: Public Housing Intent - Must show purposeful discrimination FHA - private and public actions Treatment - Discriminatory Disparate Impact - Involves discriminatory practices of protected class a. Intent inconsequential V. LL Remedies A. Abandonment and Damage Mitigation 1. Surrender and acceptance If T vacates and LL accepts then LL has waived the right to payments. No longer in privity of estate Reentering premises not conclusive of acceptance... LL could be trying to mitigate damages, and not actually accepting 2. Mitigation CL: No duty for LL to mitigate damages ML: Yes, duty for LL to make reasonable efforts to relet the premises Some jurisdictions allow for passive burden to mitigate

2. Mitigation

Topic

ML: Yes, duty for LL to make reasonable efforts to relet the premises Some jurisdictions allow for passive burden to mitigate Burden of Proof LL - reasonable efforts (Reid v. Omaha) T - failure of good faith effort to mitigate (Isbey, Ruud) LL can deny acceptance of new T's and still be making a good fail effort 3. LL makes good faith effort to mitigate damages, and... Yes, T not liable for more than costs of relet if LL makes more....it's a wash with LL ahead No, T liable and new T pays less then old T liable for rest If No Good Faith effort then jurisdictional split of authority: Most will not award damages to be paid by T. Some will hold the T liable for the full amount. VI. Assignments and Sublease A. Intent to determine whether assignment or sublease 1. Assignment i. Identical amount of rent ii. Agreement to obey the original lease iii. Application of the original leases duration 2. Sublease i. Calling the agreement sublease ii. Rent paid to tenant iii. Retaining the right to possess the premises B. Tenants Rights to Assign or Sublease 1. If there is a clause, LL is entitled to withhold consent for any reason 2. LL may refuse consent arbitrarily 3. LL has NO absolute right to withhold consent 2. When a provision does not permit LL to withhold consent to an 4. assignment or sublease, LL may withhold consent ONLY WHEN i. He has a good faith ii. Reasonable objection to the assignment or sublease

VII. Future interests and perpetuities A. Executory Interest 1. FI in grantee that truncates the preceding fee estate or life estate 2. Two Types Springing: truncate the grantor's estate Shifting: truncate a grantee's estate B. Fee Simple 1. Absolute Sole possession, No sharing of interest 2. Defeasible Words of mere desire or hope or intention, are insufficient Grantor's FI Automatic transfer Fee simple exists until a specific occurrence terminates it " A transfers B for so long that it is used as the site of a church" PI: Fee Simple Determinable FI: Possibility of Reverter - PSDPOR - Sinatra/popcorn example - so long as no popcorn on premises Language: Until; so long as; while; during Transfer dependent on FI holder Fee simple exists until a specific occurrence terminates it "A transfers to B provided however not used for church " PI: Fee Simple Subject to Condition Subsequent

Topic

Transfer dependent on FI holder Fee simple exists until a specific occurrence terminates it "A transfers to B provided however not used for church " PI: Fee Simple Subject to Condition Subsequent FI: Power of termination, right of entry - only at Grantor's option Language: provided, however; but if; on condition that; if however Must set a duration - so long as coffee is not drank on coffee Needs language to reenter 3rd Party's FI PI: Fee simple subject to executory limitation FI: executory interest Language: Until...then to; but if...then to; Just like FSD, if condition is broken then goes to some other party C. FIs retained by the grantor or the estate of the testator (reversionary interests) 1. Life Estate
Life estate

Grantor's FI: Reversion 3rd Party FI: Remainder

Determinable Life Estate

Grantor's FI: Reversion 3rd Party FI: Fee simple subject to executory interest
Life estate subject to condition subsequent

Grantor's FI: Reversion or Power of Termination 3rd Party FI: Fee simple subject to executory interest
FI

In Grantor: Reversion In one other than Grantor: Remainder Remainder

a. Remainders never follow a fee b. Must have two things...

1. FI created in someone other than Grantor 2. If it ever becomes a present estate, it must do so upon, not before, the natural expiration of all previous estates
a. Death is always a natural expiration

Vested Remainder
a. Vested remainder in fee simple or Vest life estate remainder (A for life, then to B)

1. Must have 2 further things...

a. No conditions precedent to the remainder becoming present possessory b. There must be ascertainable possessor's to be.

2. Ascertainable person 3. No condition precedent before vest of interest 4. Recognizable property interest but possession comes later
b. subject to open (...then to A's children)

1. Ascertainable person 2. Class 3. At least one member of the class qualifies for distribution
c. subject to divestment (...then to B, but if...then to C)

1. Ascertainable person 2. B's remainder is vested subject t divestment. 3. C has an executory interest since C cuts short B's interest 4. Subject to condition(s) subsequent Contingent Remainder (Default if not Vested)
a. Not Vested b. Subject to condition(s) subsequent c. In favor of unascertainable person(s)

1. Heirs to a living person 2. then oldest child

c. In favor of unascertainable person(s)

Topic

1. Heirs to a living person 2. then oldest child In one other than Grantor: Executory Interest Cuts short the life estate (To A for life...but if...then to X) X has an executory interest. 2. Possibility of reverters by the grantor or the estate of the testator 3. Reversions: follow a life estate or non-freehold tenancy (for years, periodic, tenancy at will, or tenancy at sufferance) D. FI in favor of one who is not the grantor 1. Must be either a remainder or an executory interest Remainders Never follow a fee Follows a natural termination of a life estate Executory interests A future interest that follows a fee and is not created in favor of a grantor is always an executory interest A FI that is not a reversionary interest and that cuts short a previous interest is an executory interest. E. Distinguishing vested remainders subject to divestment from contingent remainders 1. Whether a condition is precedent or subsequent is matter of language rather than substance a Vested remainders subject to divestment = Vested remainders subject to a condition subsequent Language: provided, however; but if; on condition that; if however b Contingent remainders = Remainder subject to condition precedent c Examples "To A for life, Remainder to A's surviving children" Contingent remainder in A's children, because the condition of survival precedes the gift to the children. "To A for life, remainder to A's children who survive her" Contingent Remainder as well, Children must survive to receive the gift "To A for life, remainder to A's children, but if a child fails to survive A, that child's share shall be given to his issue" Remainder first given then taken away if condition not satisfied. Children have a vested interest that may be taken away Their issue has executory interest as it cuts the ancestor's gift "To A for Life, then to B's heirs" If B is alive when A dies, then contingent remainder If B is dead, then maybe vested or contingent depending on court's view of the term 'B's heirs' F. Rule against perpetuities 1. No interest is good unless it must vest (or fail to vest) if at all, no later than 21 years after some life in being at the creation of the interest 2. Applies to the following future interests: a Contingent Remainders b Executory Interest c Vested Remainder subject to open 3. Process of Applying RAP a Classifying the interests at creation Tell me what everyone has? b Does the RAP Apply? c Is the RAP violated? d If RAP is violated, strike offending language e Reclassify the interests f g Life estate or Fee simple h Does everyone exist right now? i CAn last guy in chain ever vest? j After RAP

Topic

i CAn last guy in chain ever vest? j After RAP Does O now have a reversion, LE, or possibility of reverter, FSD. G. Rules 1. Rule of Convenience Determines membership in a particular class Closes the class when: Someone qualifies for distribution; ad The gift is available for distribution 2. No creation of New interests 3. Presumption against forfeiture 4. Remainders never follow fees 5. Unborn Widow a. A's Widow is unborn at time of creation of interest 6. Measuring Life a. i. The person who can affect the vesting of the contingent interest. b. ii. The person who controls the class membership. 1. A gift to the children of A. A is measuring life. c. iii. The person to whom the gift is made. 1. A gift to B if he reaches age 45. B is his own measuring life. 7. Fertile octogenarian 1 Any person is capable of having children regardless of age or physical condition 8. Gestation/Fetus Rule 1 A child in utero at the creation of the interest is treated as a life in being at the creation of the interest if that child is later born alive and that child can be its own measuring life. 9. Dead hand control rule: Constraints on dead dictating what happens to land many years in the future 10. Class Gifts a. Bad for one, bad for all b. Different rules upon whether the gift is immediate or postponed 11. Definitions Escheat = No heirs exist the property would be claimed by the estate. 12. One cannot convey more than what they have 13. Someone is always in possession of lands 14. Heirs receive nothing until that person dies 15. Life in being - ask someone H. Case Law 1. A. AD JULLIARD & CO v AMERICAN WOOLEN CO o Where multiple companies assigned and received property rights, absent an expressed assumption of privity of contract, each company is only held liable for privity of estate with the original grantor. o RULE: Sub-assignees do not remain in privity of estate whenever they assign their rights to another company. Without an expressed assumption of the original contract (that would force them into privity of K), subsequent assignees may not be held liable for any legal recourse. 2. B. ABERNATHY v. ADOUS o Along with an assessment of the terms of a contract (the written language), the intent of the parties will also be considered. o If the intent of the parties was a sublease (which it was in this case), then the sublessee is not liable to the LL, meaning a default on the part of the original tenant will signify the demise of the sublessees rights. VIII. Waste A. Central concept 1. Can't use property where it unreasonably interferes with future possessors' expectations. 2. May result in forfeiture of estate B. LL or revisioner is entitled to receive property in substantially the same shape after T leaves 1. Without contractual obligation

Topic B. LL or revisioner is entitled to receive property in substantially the same shape after T leaves 1. Without contractual obligation
Modifying to improve value of property is not waste, subject to circumstances (Pabst)

C. Depends on the term of interest: 1. the greater the interest, the less likely a party is to exploit and the party is allowed more freedom in using the property in question. More likely to use as the true owner would. D. Waste if: 1. Unpaid taxes (McIntyre) 2. Deterioration (Zauner) E. Ameliorate Waste: Enhancing value of property 1. Must round up future interest holders and get permission first F. Types of Waste 1. Comissive, or voluntary waste
Actual overt conduct that causes decrease in value

2. Permissive waste: failure to act as a RPP causes permanent and substantial injury to property (Zauner)
Duty to maintain against permanent and substantial injury

Not required to spend more than property brings in. 3. Injurious Acts: acts that substantially reduce the value IX. Restraints on Alienation A. Alienation: withholds from the grantee, the power to transfer her interest 1. Void if absolute restraint of fee simple. 2. Partial restraint permissible if reasonable in..
purpose, effect, and duration.

3. Lifetime restraint is more reasonable. B. Right of First Refusal (RTS Landfill) 1. Must seek approval before entering in transaction with 3rd party. 2. Subject to Rule against perpetuities 3. Void if
Unlimited in duration or Requires substantial discount in sale price without purposeful reason, or

Considering market value

Fixed price, inhibits bargaining and may depress value of property (Ferrero) Unfair to property holder (Urquhart)

C. Forfeiture restraint: if the grantee attempts to transfer her interest, the property is transferred to another person. D. Promissory restraint: provides that the grantee promise not to transfer her interest. 1. Valid and enforceable under contract remedies. X. Concurrent Estates A. simultaneous property rights by two or more people B. Types of Concurrent Estates 1. Tenancy in Common 2 or more persons Yes fractional share of interest No Survivorship - Heirs rather than interest holders Default tenancy, if ambiguous contract Unless between husband and wife Adverse possession One co-tenant must oust the others and be in exclusive possession Doesn't satisfy hostility 2. Joint Tenancy 2 or more persons No fractional shares Right of Survivorship

2. Joint Tenancy

Topic

No fractional shares Right of Survivorship Splits amongst other interest holders Husband and wife may be involved in joint tenancy iii Express language in conveyance required (Weems) 1 Terms in conveyance like joint tenancy do not always infer survivorship; How is a Joint Tenancy created? 4 UNITIES: Required under CL - TTPP 1 Time: All tenants must form their interest at the same time. 2 Title: Formation of interest from same source
i. Ex: (same deed, will, or estate).

3 Interest: Equal and undivided interest amongst Ts 4 Possession: Ts have possessory interest in the whole. Straw man 1 Cannot create joint tenancy with new party, where one owns property 2 Loophole: A to C, then C could convey to A and B: establishes 4 Unities Modern approach looks to the language and/or intent of the conveyance rather than the status of the 4 Unities. 3. Tenancy by the Entirety 2 Married persons Right to possess whole Right to survivorship husband and wife terminology in conveyance sufficient (Adamson) Debatable if does not clearly recognize marriage between interest holders 4. Ambiguity What is the intent of parties? Lawyer's intent (Kurpiel) To A and B as tenants in common with a right to survivorship, Intended Joint Tenancy 5. Partitioning of Concurrent Estates physically or by sale May occur either voluntarily or by court action. XI. Severance of Joint Tenancies A. The Mechanics of Severance 1. Severance abolishes T's right of survivorship. Allows conveyance to heirs. Creates a tenancy in common with remaining Joint Ts 2. Joint tenancy Any party may unilaterally sever without notice to other JTs Outright conveyance of one's interest to a 3rd party destroys. then convey the interest back to himself creating a tenancy in common. (Minok) Only inter-vivos conveyance. This rule, of course, follows the right to survivorship doctrine, because upon the death of a co-tenant, the interest passes completely to the other co-tenants. Without any remaining interest, there is no possibility to sever. 3. 4 Unites Where abolished. (Harms) Maintenance of Joint Tenancy permitted lien or mortgage against a property interest U of Interest or U of Title Where required. (Hutchinson National Bank ) Destruction of joint tenancy if lien or mortgage taken against property constitutes the conveyance of Ts interest and A co-tenant who severs her joint tenancy may only place a lien on her own interest. XII. Easements A. Define: Non-possessory property interest in the land of another. 1. Created through either... Grant: owner of servient estate explicitly designates E to dominant owner, or

XII. Easements A. Define: Non-possessory property interest in the land of another. Topic 1. Created through either... Grant: owner of servient estate explicitly designates E to dominant owner, or Reservation: owner transfers property to another person, but reserves a "rights of way" on property for himself. Interpreted restrictively since ambiguities are generally construed against grantor 2. Express Es I Clear language: As to length, width, and location. Court restricted to express language - Better reflects intent of parties. II Ambiguous language: Court will consider intentions with reasonable expectations of parties. to scope and/or duties Positive and Negative Es: 1. + : Grant's person the right to do something on another's land. Ex: Ingress/Regress 2. -- : Prevents a person from certain uses of their land. Rare Servient and Dominant Estates 1. Servient: burden attached to estate Rights of Servient Estate Holders Must not interfere w/ dominant's use and enjoyment of E May relocate unilaterally given... utility is not lost significantly Owner is not burdened in its use and enjoyment, and Purpose is not frustrated. 2. Dominant: benefit attached to estate Rights of Dominant Estate Holders Must not unreasonably burden the Servient. Must maintain the E Right to improve so long as does not unreasonably burden servient estate. May not unilaterally relocate, unlike servient estate owner can May reasonably change use of E, but must stay in the original intentions of writing (Hayes) Appurtenant or In Gross Es 1. Appurtenant - part of land and not particular to owner, created to benefit land. Benefits land more than owner. - Ex: Water farm from other property Appurtenant easement cannot be extended to serve other properties (Voss) 2. In Gross - Specific to grantee. Ex: Only B wants beach access A Assignment CL Old: only commercial Es are assignable (Crane) Modern: all Es are assignable so long as it reflects the intent of the parties. Exception E made specifically personal for another. Conveyance of E or Fee Simple 1. Factors to consider: Amount of consideration Fee purchase price or E price? Particularity of description of property conveyed No specific measurement - E Significance of terminology. Any Peculiarities "Right of way" suggestive of E (Greaves) Extent of limitation on property Best suited for parties' purpose Who paid the taxes? In who's name? Treatment of property by parties, or heirs, Intent of the parties Grantors Rights 1. EXCEPTIONS work to reserve a pre-existing property right for the grantor. 2. RESERVATIONS, on the other hand, retain a newly created property right for the grantor. Limitations on.. 1. Use If foreseeable, E's owner may increase degree of use, Altogether new forms of use may not be permitted.

B.

C.

D.

E.

F.

G.

Topic

G. Limitations on.. 1. Use If foreseeable, E's owner may increase degree of use, Altogether new forms of use may not be permitted.
Trivial and inconsequential misuse will not permit injunction

2. Repair E's owner has duty to repair and maintain the E So as to not place an excess burden on the servient estate holder. H. Succession of Es 1. Transfers of Es 1 Purchase without prior knowledge will typically extinguish E Inheritance will assume a succession of burden. 3 Benefit of Dominant transfers automatically assumed as appurtenant 2. Burden of Servient will run if there is: If the Intent original parties that it run; and Notice to new owner of servient estate. Actual Notice: A explicitly tells C of E. Constructive Notice: E has been recorded, C should know about it. Inquiry Notice: Upon property inspection, C saw road's use, the law requires C to exercise due diligence to discover existence of E. Imputed Notice: Notice to one owner establishes notice to all owners. Ex: Typically involves corp's, companies, joint tenancies or tenancies in commons; XIII. Termination of Es A. Expiration of duration 1. Could last indefinitely 2. Grantor can limit - Revocable at will - comparable with licenses B. Expiration of purpose 1. Frustration of purpose will result in the expiration of an E
C. By contractual contingency, or neglect of obligation

D. Abandonment 1. Conduct inconsistent w/ continued use 2. NON-USE and WORDS insufficient for termination. E. Merger 1. Merging of ownership over dominant and servient estates under one person No revival of E F. Eminent domain 1. Government taking the land G. Estoppel 1. Detrimental and foreseeable reliance by servient estate holder 2. Action or conduct by dominant estate holder 3. Ex: If the dominant estate holder doesnt use it, allows something to be built on that E [by the servient estate], then the court may grant the servient estate holder the right to continue to do so based on estoppel. H. Release 1. Mutual written conveyance that conforms to formalities terminating E I. Conveyance of servient estate to a purchaser without notice 1. Servient estate will not be burdened when it is transferred to a new owner. Without notice, the benefit will run but the burden will not J. Prescription 1. By adverse possession K. Misuse 1. Principal problem from Assignment 20> 2. Courts, however, are leery of forfeiture L. Destruction of structure on servient estate 1. If the E goes to a building and the building is destroyed, so is the E M. Tax sale

Topic

L. Destruction of structure on servient estate 1. If the E goes to a building and the building is destroyed, so is the E M. Tax sale 1. Generally do extinguish in gross Es but not appurtenant estate. N. Mortgage foreclosure
O. Visible, notorious and continuous adverse and hostile use of the land that is inconsistent with the use made and rights held by the easement holder.

XIV. XV. A. B.

2nd Half of Semester Implied Es Most are created expressly through grants or deeds. Sometimes, implied by court: Implied from prior use. 1. Intent that parties wish E to be permanent 2. Prior common ownership: Originally common parcel that owner has severed to form new parcels Between original parties 3. Prior use: Apparent use of E established prior to severance of land 4. Apparent/Visible 5. Continuous 6. Reasonably necessary for enjoyment of the dominant estate Pathway makes it more convenient to enjoy the dominant estate C. Implied by necessity (e.g. landlocked parcels) 1. Intent of parties 2. Prior common ownership 3. Strict/absolute necessity Necessity at time of severance of parcels Typically, landlocked parcels D. Adverse Possession - Prescription of Title 1. Whereas adverse possession of land will result in full title to that land upon the expiration of the statute of limitations, 2. AP of an E for the full statutory period will result in an E by prescription to the user. Accompanied by the different requirements for adverse possession open an notorious, continuous, etc. E. Map or Boundary Reference 1. The conveyance of land may include a description that refers to a particular map. 2. If map designates Es [right of ways, common areas such as parks, etc.], then grantee assumes an implied E upon purchase.

XVI. Covenants

A. A non-possessory right, non-property right between two property owners.

1. An easement is a (non-possessory) property interest. 2. A covenant is a promise with respect to a parcel of property. 3. A covenant may be.. affirmative [e.g. members agreement to pay X fees] or negative [association members have a covenants to not park RVs on front yards].

B. Real Covenants vs. Equitable Servitudes

1. Real Covenant - Default understanding of 'covenant' Runs with the land Breach leads to legal remedy (damages) 2. Equitable servitude Could "run with the land" - not necessarily Breach leads to equitable remedy (injunction) As modern courts do not distinguish law/equity, these two forms are actually blurred into one; disgruntled land owners will typically pray for equitable relief before attempting to receive damages.

C. Concerns - Covenant Enforcement

1. If fair and not contrary to public policy, covenants are to be enforced [Cats in the Condo Case] 2. Broad interpretations Where a restrictive covenant limits residency to single-families interpretation should not exclude families of an alternative sense. Ex: Group home that supports AIDS patients. Hill v. Community of Damien: 3. Reasonable restraints for alienation are when... Restraintor is seeking to protect interest in land by enforcement of restraint;

Topic

3. Reasonable restraints for alienation are when... Restraintor is seeking to protect interest in land by enforcement of restraint; Limited in duration; Exists for worthwhile purpose *The type of conveyances prohibited are ones not likely to be employed to any substantial degree by the one restrained

D. Running of Covenants
1. Requires 2. Intent of the original parties and 3. Adequate notice (actual, constructive, inquiry, imputed) A (promisor/burden) forms a covenant with B (promisee/benefit) 4. Touch and Concern Of and pertaining to the land CL: For the burden to run, the burden must touch and concern the land. A covenant not to dam up a river would touch and concern the land, whereas a covenant to not use the land for commercial purposes would not. Modern Trend: No longer applicable; intent of the parties is more important. Economic Impact Test: does the burden impact the lands value? 5. Privity Horizontal Privity: Concerns originally promising parties, A and B, requires succession of estate Ex: Grantorgrantee, landlordtenant, easement grantoreasement grantee a. This requirement excludes two neighbors from getting together to agree upon some covenant and then forcing subsequent purchasers of their land to abide by that covenant. Shared some servitude other than present covenant

Requires that a covenant arises from a transfer of estate.

Vertical Privity: Concerns succeeding parties relationship (AC and BD) Strict: Succession must be one of entire estate or same property interest Concerns the BURDEN running If A owns a FSA in BA and the burden runs against A for a covenant made between himself and B, A must sell BA to C in FSA [i.e. same estate] for burden to run. If A merely leased the property to C, the burden would not run. Relaxed: Succession need not be of same estate Concerns the BENEFIT running If B owns a FS in BA and is receiving a benefit from covenant between himself and A, B need not sell the property to D in fee simple. B could lease to D and benefit still runs 6. Suppose A and B had formed a covenant that neither one would tear down their own house without the others consent. They form this with the intent that it will be preserved to future owners. A sells to C and B sells to D. Assume the requirements of notice are met. If C wished to tear down the existing house on his parcel without Ds consent, D may seek equitable relief in the form of an injunction to prevent the houses demolition even if C did not agree to the covenant. However, D may not be able to seek legal [monetary] damages for any violation. 7. When it is capable of binding succesors? Covenant at law or equitable servitude All ought to be in writing.

p482 8. Defenses for Enforcement of Covenants:

Topic

8. Defenses for Enforcement of Covenants: Unreasonable/offends public policy Changed circumstances (on the benefited lot) Neighborhood or surrounding area has so changed that it is unfair to force party to adhere to the restriction Focus not on burdened lot Will continue to enforce restriction on that is still substantially valuable to the benefited land, even though changed conditions have caused a hardship to the burdened owner. Relative hardship If burdened lot has an excessively larger burden than the benefit derived by the benefited lot, the covenant may not be enforced. Estoppel Grounded in detrimental reliance Benefitted party acts in such a way where a RPP would think the covenant has ended and it acts towards their detriment. Unclean hands Complainant has violated a similar covenant that burdens his lot "You did it to, why enforce against me you did it too." Waiver / Acquiescence Failure to enforce covenant against party, where 3rd party covenant has not been enforced Laches Failure to sue in timely manner Statute of Limitations related NOTE: 4-7 are all general equitable remedies that apply to covenants running in equity Merger Both parcels come under common ownership NOTE: The above concerns appurtenant covenants [or those that run with the land]. Covenants in gross do not have as clear definition for how they may run. - Courts debate whether they should run or not: o MAJORITY says they should not A. Acquired ownership of land without payment and consent of legal record owner. 1. Actual 2. Criteria required in different measures based on JDS to effectively divest the previous title of land to himself. Creates a new chain of title]. Hostility Intentional taking possession of the true owners land with the intent of making it ones own Without the owners consent Can be implied if the other elements of AP are met regardless of the subjective state of mind of the trespasser a. Even where mistake is made as to true owner of the property. (TIOGA) Claim of Right - Objective Standard Some JDS say claim that you own it; some say you must know it is not yours, that is, you must have a belief that the property really belongs to someone else. HALPREN A trespasser [or a wrongdoer] may not go onto anothers property and have that possession ripen into legal title. One must enter upon the land claiming in good faith the right to do so. To enter upon the land without any honest claim of right to do so is trespass that may never ripen into prescriptive title. a. Discourages trespassing; rewards only those who have a mistaken belief about where the property line exists. SUBJECTIVE MENTAL STATES ARE NOT NECESSARY FOR DETERMINING ADVERSE POSSESSION. Court favors an approach that determines the nature of the trespassers claim by looking to the manner in which he treats the property. (not subjective belief) Other JDS see the requirement of examining the subjective belief of the actor as necessary in the consideration of the purpose of adverse possession [protect both those who knowingly appropriated land of others and those who honestly held the property in the belief that it was their own]. Openness and Notoriety SoL does not run until the true owner knows or should have known of the possession. not secretive; apparent; sufficient to put world notice. (Marengo Cave) Visible possession possession must be visible to true owner and the common observer for ad. poss. Actual possession physical, or constructive possession

XVII. Adverse Possession

Topic

Actual possession physical, or constructive possession Must be actual or implied knowledge that the trespasser intends to own the land that he occupies. Actual possession against a title extends only to the surface. Notorious possession requires that the possessor actually take steps to show his intentions to possess the land. If there are no steps taken by the trespasser to provide actual notice to the true owner then the trespassers activity must be significant enough that a common observer could tell that the possessor intended to openly claim the land as his own. Exclusivity Use similar to or same as a true owner; exclusive of world i. Two or more persons cannot adversely possess the same tract of land exclusive possession 2. ITT RAYONIER cont. House Boat emphasizes the requiremet of exclusive possession. Use alone does not constitute possession. Possession is established only if it is of such a character as a true owner would make considering the nature and location of the land. (e.g. exercise of dominion over the land in a manner a true owner would take e.g. exclusive possession) a. Do not just look at use look to the nature of the use Continuity custom; type of property; seasonal use (tacking and tolling of statutes) 1. HOWARD continuity of possession may be established although the land is used regularly for only a certain period of each year. 2. RAY (another seasonal home case) The nature of the land being possessed requires a subjective determination of the degree of control required by an adverse possessor. a. Look to frequency and duration of acts of improvement and other forms of dominion and control over the premises. b. Determine if the adverse possessors acts of dominion are consistent with those that would normally be undertaken by a true owner of the same land. Color of Title - Possession founded Possessing pursuant to a written instrument purporting to grant them title. If the possessor shows a deed that he believes to give him right to title but the instrument is invalid [not property recorded, fraudulently composed, etc.] Someone is acting under color of title if they have a deed that purports (red flag that something is wrong with the conveying instrument) to convey an interest in the property. COURTS REQUIRE THESE ELEMENTS IN DIFFERENT MEASURES B. Statutory Period that lasts from 5 to 60 years depending on JDS. 1. i. During this period, the adverse possessor is perfecting/building full legal title that s/he will receive upon the end of the statutory period. 2. ii. Once the period has run, the adverse possessor (who has full legal title now) is immune from prosecution. 1. But, while the adverse possessor is building title, he is subject to ejectment and legal claims of trespass by the rightful owner. 2. During the running of the statutory period, the trespasser has a claim against other trespassers [for nuisance, trespass, or any other legal right incident to possession].

C. Rationale and Policy 1. i. People should maintain their property ii.Efficient use of property iii.Purpose: protect both those who knowingly appropriate the land of others (hostility) and those who honestly held the property in the belief that it was their own (mistake). iv.Most Important Justification: an adverse possessor may innocently and mistakenly possess the land of another for such a long period that a justifiable reliance on the existing state affairs is presumed by that possessor. 1. Statutory period (and AP in general) promotes certainty in land titles (think: RAP dead hand control), nullifies conveyancing errors and often settles boundary disputes. D. Tacking and Tolling 1. Tacking - requires privity - non hostile nexus
Allows adding time of possession of predecessor for your claim to adv. possession (Privity no more than judicial recognition of the need for some reasonable connection between successive occupants of real property so as to raise their claim of right above the status of the wrongdoer/trespasser.) a. Technical privity requirement should not be used to upset the long periods of occupancy of those who in good faith received an erroneous deed description. (Howard)

1. Tacking - requires privity - non hostile nexus

Topic
Allows adding time of possession of predecessor for your claim to adv. possession (Privity no more than judicial recognition of the need for some reasonable connection between successive occupants of real property so as to raise their claim of right above the status of the wrongdoer/trespasser.) a. Technical privity requirement should not be used to upset the long periods of occupancy of those who in good faith received an erroneous deed description. (Howard) Adding on time of possession by the predecessor in interest. Tacking, and privity, is available when property acquired via Deed grant/conveyance (there is consideration) Gift no payment of considerationc. Descent Will/testate Intestate succession One adv. possessor that abandons, cannot be tacked on a second adv. possessor because NO PRIVITY.

2. Tolling
Stops the running of SoL In true owner's interests a. Tolling involves the suspension of the application of the SoL preserving legal title for the true owner gives true owner more time to bring their ejectment action No successive disabilities. Disabilities are only acknowledged at the time of the beginning of possession. What tolls a statute? a. Disabilities {legal term} the disability must exist at the time the adverse possession began i. INFANCY (under the age of majority) ii. INSANITY iii. IMPRISONMENT iv. MILITARY SERVICE
XVIII. Instruments

A. Written Instrument Requirement 1. Deeds Passes legal title Anyone can write one No required form, but rather simply REQUIREMENTS: Present Intent to convey/sell the property with this instrument Names of Parties Description of Property 1. No other parcel should fit the same description. a. Must be Enclosed area 1. Cannot properly describe land in square feet b. Every reader, now and in future, should be able to ascertain size, shape and location easily 2. Substantial landmarks, area, distance, direction a. 1.(e.g.) Powell Mistaken Creek case 1. Specificity in naming landmarks required
a. Ownership may be affected by shifting or changing of physical boundaries

3. Should clearly convey all the land intended to be conveyed a. No less, no extra, correct parcel and not a wrong parcel b. Be deliberate and careful in drafting Consideration Signed by the person to be charged (seller and buyer) 2. Modern Trend Look to the instrument as a whole and discern the intent of the parties (not the common law requirements of technical words for it to exist as a proper conveyance Unless there is a statute to the contrary there is no requirement of granting words as long as the intent to presently convey is clear. ii. Harris If from a reading of the whole instrument, a grantor/grantee can be ascertained, there are operative words to indicate the grantors sufficient intent to convey the land to the grantee, and the document is signed and acknowledged by the grantor, then it is a deed. 3. When will an informal writing (e.g. letter or memo) operate as an effective coveyance of land? i. Most states, under the statute of frauds, require the written conveyance of real property, and many of these states require that the conveyance be passed through an act of law [e.g. deed]. 4. Walker SoF is not available as a defense on the basis of:

Topic

B.

C.

D.

E.

3. When will an informal writing (e.g. letter or memo) operate as an effective coveyance of land? i. Most states, under the statute of frauds, require the written conveyance of real property, and many of these states require that the conveyance be passed through an act of law [e.g. deed]. 4. Walker SoF is not available as a defense on the basis of: Partial Performance Walkers acts were not sufficient to justify specific performance of the oral contract the SoF defense is still valid. Fraud No false misrepresentations of existing fact here. Waiver Estoppel Estopped from using SoF defense because of grantees detrimental reliance. Cannot be illusory reliance a. Nessralla - P provided no evidence that he would have attempted to purchase the property or sought another to do the same had the oral agreement not existed. Producers Lumber & Supply Co. Bulldozed house without consent destroying good faith unclean hands A person can receive relief if they place a permanent improvement on the land in good faith. a. Monetary value of the improvement (due to the increase in value of the proerpty that the improvement has generated). 1. Basically, recovery will be the increased value of the lot. ii.If it is possible to move it to the correct property, they may do that iii.People must be careful when building and imporiving make sure you do it on the right parcel of land (no shight, right!) Acquiescence Inconsistency in Conduct Ratification Legal Delivery by Grantor Demonstrates that deed is to be operative 1. Intent to Convey Required 2. Co-Tenancy If you retain part of the estate, conveyance is automatic when creating co-tenancy 3. Delivery equates to irrevocable transfer of ownership. Seal unnecessary Types of Delivery 1. Manually/Physically delivery of signed deed to grantee. Escrow delivery to buyer generally constitutes legal delivery 2. Constructive Delivery actions equivalent to delivery Recording may show grantor's intent to deliver Safety Deposit Box delivery to a box Grantee's knowledge of location and access required If grantor can reclaim deed, then not legal delivery Wills and Deeds 1. Wills are not operative until death; 2. Deeds are operative when delivered. so long as did not intend to take it back. 3 Types of Delivery Disputes 1. No third parties or escrow agents Only grantor and grantee involved in claimed delivery. 2. A third party holds deed until grantor dies and then delivers to grantee. (death escrow) 3. Use of Commercial Escrow

XIX. Marketable Title & Remedies for Breach 45

A. Marketable Title
1. A title reasonably free of encumberances Not a guarantee that title is encumberance free Ex: a mortgage OK; Excessive encumbrances disqualification for marketability Ex: Back taxes along with outstanding mortgages or disputed easements Express or implied promise in the sale of the property Requirements Seller must actually own the interest for sale Are there encumbrances against the land?

Topic

Requirements Seller must actually own the interest for sale Are there encumbrances against the land? More than insurable title? Breached if significant risk of litigation concerning the title. a. Not prudent to sell a lawsuit 2. Things to consider for a breach of marketable title -Visible easements -Existing leases -Encroachments -Zoning violations -Building codes -Covenants How many? How much?

B. Remedies for Breach of Contract for Sale

1. BEFORE TITLE PASSES Buyer entitled to specific performance + price abatement Normally against seller; Buyers are not typically compelled to purchase whereas sellers are compelled to sell. THINK: uniqueness of property. Recission of contract Restitution of deposit Damages Detrimental reliance on sale will likely result in monetary damages for seller - sometimes buyer 2. AFTER TITLE PASSES Covenants of titles Representations made by grantor to grantee in title. Any suit that occurs after title passes will be based on title covenants, not on sales contracts. No sales of contract agreements will pass upon transfer of the title. Suit based on title covenants in deed Damages Specific performance in limited circumstances 3. PRESENT COVENANTS Seisin Grantor is peaceably in possession under freehold title Type of estate: if the grantor only has a life estate but attempts to convey a fee simple, he is in breach of covenant of seisin. Quantity: if grantor only has 20 acres but tries to convey 100, he is in breach of the covenant of seisin. Right to convey Grantor has power and authority to convey Against encumbrances No other right or interest in the property conveyed, by any third party. Consistent with the passing of a fee Which decreases property value Do not run with the land Future owners have no claim against the grantor who made them Time of breach: Upon delivery of deed at closing. 4. FUTURE COVENANTS Quiet Enjoyment Promise to not be evicted, either actually or constructively, by someone with paramount/superior title. Warranty Promises to compensate in event of eviction, actually or constructively, by someone with paramount/superior title. Further assurances Grantor will supply further assurances in the form of papers and documents that the grantee may need in the future to prove her title Can be specifically enforced, whereas the other covenants are enforced only by an award of damages. -Do run with the land

Further assurances

Topic

Can be specifically enforced, whereas the other covenants are enforced only by an award of damages. -Do run with the land -Time of breach: after the closing 5. TYPES OF DEEDS GENERAL OR FULL WARRANTY DEED most protection All six title covenants Provides most title protection Warranty against Grantor's conduct and persons preceding No encumbrances SPECIAL WARRANTY DEED Warrants title as to acts taken by the grantor, him or herself. Contains six standard title covenants, but only applied to title defects caused by the acts or omissions of grantor QUITCLAIM DEED least protection -Contains no title covenants at all -Grantor makes no warranties or promises of any kind about the quality of title, if any. -Conveys whatever rights the grantor has. -Very shady deed, not typically acceptable
XX. Mortgages - Needs Caselaw A. Equitable right of Redemption (ERR) 1. After foreclosure sale process has begun, 2. The right to make good on loans and regain ownership 3. Court will not condone the limiting of ERR 4. Original owner may redeem until the actual foreclosure sale has occurred B. Statutory right of redemption 1. After foreclusure sale 2. During specified amount of time (generally 6-8 months) 3. Debtor may redeem property from purchaser of 4. Either mortgagor or buyer will retain possession until time is up based on jurisdiction 5. Right to redeem transferrable by

Testamentary; or Assignment
6. Junior Leiner have priority after mortgagor's statutory redemption period 3. Foreclosure 1. Two types

Judicial foreclosure lender asks court to foreclose on property and either sell it, give it to the lender, or force property owner to pay with other assets Non-Judicial Foreclosure lender can sell property without having to go through court to adjudicate a dispute, lender may hold a public sale of real property almost immediately after the borrower default.
2. Property is sold at a public auction, 3. Proceeds used to pay the costs of the sale, unpaid principal and interest accrued to date, and then junior liens D. Deficiency Judgment 1. Upon foreclosure sale, if bank does not cover all costs, then Mortgagee may have to pay balance 2. Potential Restrictions

Bank only entitled to fair market price for foreclosed property. No excess Deficiency Judgment may be available only after judicial judgment Forbidding deficiency judgments for foreclosures on purchase money mortgages or on deeds of trust Mortgagors cannot waive these protections in the initial mortgage agreement
3. used to secure the balance of the purchase price, particularly, if the real estate contains a residence E. Second Mortgages; Home Equity Loans 1. Equity: The excess of the value of the property over the sum of all liens, including mortgages. 2. In case of two mortgages

If 1st loan from Bank forecloses, buyer gains a title clear of liens

E. Second Mortgages; Home Equity Loans

Topic

2. In case of two mortgages

If 1st loan from Bank forecloses, buyer gains a title clear of liens 2nd loan is eliminated upon foreclosure sale, debt is not If 2nd loan from Lance forecloses is the loan that gets paid by the sale, Any surplus goes to debtor
3. Deeds of Trust - Differences from Mortgage

Generally power of sale foreclosure Third party holds property in "trust"

F. Sales of Property Subject to Mortgage 1. A person who acquires secured property normally takes the property subject to the security interest, unless the security interest has a due-on-sale clause 2. Grantee is not personally liable for the debt, unless he agreed to assume it, but since he holds subject to the security interest he will lose the property in foreclosure if he fails to make the loan payments Original borrower remains liable on the promissory note unless the lender releases him XXI. Recording - p1061 for Problems A. Title Insurance

1. Insured will receive damages if he does not have good title

B. CL: Rules

1. One cannot convey what one does not own 2. First in time, first in right
Exception Where 2nd interest holder has legal interest as Bona Fide Purchaser without notice of previous conveyance, and 1st has equitable interest C. Recording and Indexing

1. What instruments must be recorded:

Recording acts generally allow (and in effect require) the recording of every instrument by which an interest in land, whether legal or equitable, is created or modied. Thus not only fee simple conveyances, but also life estates, mortgages, restrictive covenants, and tax liens, are all required to be recorded. D. The Recording System

1. Notice to the world need be given that land has been conveyed. B. Bona fide Purchaser
1. Someone who purchases the property for valuable consideration without notice at the time of any problems with the grantors title 2. NOT bona de purchasers: people who: (b/c they dont receive it for value)` receive interest as a gift devise or inheritance 3. BUT, they can prevail if they record since a subsequent purchaser will have notice 4. Consideration 5. Without Notice 6. Not required for race statute G. Recordation 1. Title passes on delivery, not recordation 2. Must deliver to Records Office H. Value (consideration) 1. Not necessarily money 2. ex: it can be extra time to pay back a loan Purchaser is protected from time consideration is paid (even if deed recorded and delivered) 9. Rule: a person who takes from a bona de purchaser will prevail over any interest over which the bona de purchaser would have prevailed (despite being aware of other titles)

3. Marketable Title Act

a person who has an unbroken chain of title for forty years or more shall be deemed to have marketable record of title. MTAs make a root of title out of an actual transaction 40 years prior, before which all claims are invalid. Also, impeached claims in the interim that arent on record during the 40 year period. Hypo: 1900 O-A easement, recorded 1905 O-B Mortgage, recorded 1910 O-C option to purchase, recorded 1950 C-X exercise of option, recorded 1970 X-Y, recorded 2000 Y-E, recorded According to marketable title, A & B lose their claims to title. In order to maintain interest in title, you must file every forty years. Purpose: to get rid of stale claims and simplify the title search

Topic

1905 O-B Mortgage, recorded 1910 O-C option to purchase, recorded 1950 C-X exercise of option, recorded 1970 X-Y, recorded 2000 Y-E, recorded According to marketable title, A & B lose their claims to title. In order to maintain interest in title, you must file every forty years. Purpose: to get rid of stale claims and simplify the title search

4. Mechanics of recording (2 copies)

Filing copy: grantee or grantees agent presents the deed to the country recorder, who stamps the date and time of filing thereon and makes a copy. Recorder then filed copy in deed book, which contains copies of prior recorded deeds. Indexing: recorder indexes the deed by entering notation in the index book showing which deed book the deed can be found in. Index is used to find the deed in subsequent title searches. Separate indexes for grantors and grantees and a tract index, where entries are made under block and lot number. Indexes

Grantor/Grantee index: organized by grantor/grantee a. search of this index is necessary to find judgment liens and federal tax liens because they are only filed under the name of the debtor b. grantee index 1. where you start and trace the title back, from grantee to the grantor qua previous grantee until you hit the root. c. grantor index 1. where you trace the chain back to present from the root to see if there are any other encumbrances. Tract index a. organized by parcel of land b. where you can find everything for one plot of land on one page, altogether. 5. Title Search:
O contracts to sell Blackacre to A. Prior to closing, a title search is made to assure A that O owns Blackacre and to determine if there are any encumbrances on Os title. 1. First, look to tract index: look at page, indexed by block and lot. This shows any recorded instruments conveying, mortgaging, or otherwising dealing with Blackacre. 2. If no tract index, go to grantor-grantee index: rst look to grantee index to discover from whom the previous owner took title. Then use the grantor index to ascertain what transfers each owner made during his tenure on the land. Land can pass by wills or intestatetough to track. Must make sure all heirs are represented. E. Successfully adverse possession

1. Creates new chain of title 2. Not Dirivitive

F. Types of Recording Acts

1. Pure race statutes:

A race statute places a premium on the race to the recorders ofce. The subsequent B.F.P. must record before the earlier purchaser No notice reqd. Can essentially convey property one does not own Notice Immaterial

2. Pure notice statute:

A pure notice statute provides that an unrecorded instrument is invalid against any subsequent B.F.P. without notice, regardless of whether the subsequent purchaser records prior to the rst purchaser The subsequent B.F.P. need only not have notice (actual, constructive, or inquiry notice) This B.F.P. prevails immediately upon closingdoesnt even have to record, except to protect her title from other subsequent B.F.P.s A subsequent purchaser for value wins if, at the time of conveyance, that subsequent purchaser had no actual or constructive notice of the prior conveyance. In short, a subsequent bona de purchaser (BFP) wins. Winner of race Immaterial

3. Race-notice statute:
protect subsequent bona de purchaser without notice of prior claim. But, they protect subsequent purchasers only if he records before the prior grantee. Subsequent purchaser must be without notice and the rst person to record. A race-notice statute protects subsequent B.F.P. only two requirements:

He records before the earlier purchaser records; and He takes without notice of the earlier conveyance (actual, constructive, or inquiry notice).
At a minimum, recordation creates constructive notice to any subsequent purchasers that a prior conveyance occurred therefore protects the prior purchaser in the event of a subsequent conveyance.

Topic

At a minimum, recordation creates constructive notice to any subsequent purchasers that a prior conveyance occurred therefore protects the prior purchaser in the event of a subsequent conveyance.

4. Types of notice:
Notice or race-notice statute, a subsequent purchaser must be without notice. Actual: B.F.P. or agent has actual notice of a prior claim if subsequent grantee actually knows of the prior instrument. Proof of actual notice depends on extrinsic evidence. Constructive: B.F.P. could gain notice or knowledge of claim by searching the records Record Notice: if an instrument is properly recorded, any subsequent purchaser has record notice. Record notice is one form of constructive notice, notice that the law imputes to the purchaser when actually known or not. Main questionin checking the title (at the time of purchase), would B have found the conveyance to A? (he wouldnt in cases where A records later than date on which B checks title) If all people are not within the statute as against one other person, then the common law prevails. (circular problemevery place you start leads to another person winning). possession might make a difference in that it likely gives notice of a prior claim. Inquiry Notice: another form of constructive notice. Under certain circumstances, a purchaser is required by law to make reasonable inquiries. He is charged with notice of whatever the inquiry would reveal, even though he made no inquiry. XXII. Doctrine of Equitable Conversion A. All rules can be contracted against B. Trad. Rule: Purchaser bears the burden of risk of loss - Maj. C. Mass. Rule: 1. Implied condition. - Min. 2. Subject matter will exist 3. Contract may be rescinded 4. Significant damage D. Uniform Vendor and Purchaser Rule 1. If before transfer of title.. Material part of property is destroyed without fault of purchaser; or taken by Eminent Domain Purchaser is entitled to recover payment 2. After transfer If there is material damage not caused by vendor; or taken by Eminent Domain Purchaser must still satisfy payment of contract XXIII. Implied Warranty of Fitness and the Duty to Disclose - Needs caselaw A. Seller is on the hook for material lies and omissions B. Latent defects - Concealed defects 1. Building code violations 2. In proximity of questionable concern...earthquakes, gang house, toxic waste dump Weighs gravity of concern C. Patent defects - Plainly visible or reasonably discovered upon inspection D. Sellers may remain silent, but may not mislead 1. by word or conduct 2. Must disclose known latent defects Some states Disclosure material or signicant defects the value Written disclosure 3. Seller breaches may rescind the contract or recover potential damages E. Implied Warranty of Fitness 1. Holds builders of new homes To standard of reasonable workmanship 2. Consumer protection statutes that protect him from unfair or bad faith home sellers Relief available 3. Is a builder/prior owers liable to subsequent purchaser XXIV. Finder's A. Lost B. Mislaid

XXIV. Finder's

Topic A. Lost
B. Mislaid C. Abandoned D. Treasure trove XXV. Intellectual Property

A. COPYRIGHT 1. Copyright Act (1976). 17 USC 101 et seq., US Constitution Copyright Cause, Art. I, Sec. I, cl. 8, 18 USC 2319 Federal Protection of rights in original books, articles, songs, paintings, sculptures, pictures and related artistic creations. To qualify as original, the work must exhibit at least some minimal creativity on the part of the author and the work must be fixed in tangible physical for. Eg. A sound recording of a speech qualifies for protection but not an unrecorded speech. Good for the life of the author plus 70 years, ten becomes part of the public domain. Work for hire: good for 90 years from first publication or 120 years from creation whichever expires first. See handout for additional relevant laws. B. PATENTS 1. 35 USC 101 et seq Secures an exclusive property rights in certain types of inventions A person who invents or discovers any new and useful process, machines, or other invention and meets other statutory requirements may obtain a patent upon application to the federal Commissioner of Patents and trademarks. Good for 29 years from the application date. Exclusive right to make, use and sell an invention in the US. Not renewable. In order to obtain the patent, the applicant must disclose enough information to allow others skilled in the art to make and use the invention. C. TRADEMARK 1. Lanham Act (1946), 15 USC 1051-1127 Any word, name, symbol, or device, or any combination thereof, use to identify and distinguish ones goods or services from those of others and to indicate the source of those goods or services. E.g. sound of a HarleyDavidson. A word, name, symbol, or device used to identify and distinguish the products of a particular manufacturer or retailer. Protects marketing symbols that are used on goods. Policy: prevent consumer confusion, encourages competition, and fosters product quality. D. SERVICE MARK 1. Any word, name, symbol, or device used to identify and distinguish the services provided by a particular business. Protects marketing symbols that are used on services. Policy: prevent consumer confusion. E. TRADE DRESS 1. The total appearance and image of a product including features such as size, texture, shape, color or color combinations, graphics and even particular advertising and marketing technique used to promote its sale. F. TRADE SECRET 1. May consist of any formula, pattern, device of compilation of info which is used in ones business (provides competitive advantage) G. CELEBRITIES RIGHTS OF PUBLICITY 1. In most jurisdictions, actors, politicians, or other famous people have a property right to the exclusive use of his or her name and likeness for financial gain
XXVI. Takings A. Now, ask yourself: Has there been a physical occupation of the property? Has there been a regulation that has limited the use of the property. B. Pennsylvania Coal

1. Charcter of governmenet action 2. Amount of diminuition of value 3. Degree of intereference with investment backed expectations 4.
C. PHYSICAL TAKINGS physical per say takings permanent physical occupation

1. LORETTO

C. PHYSICAL TAKINGS physical per say takings permanent physical occupation

Topic

1. LORETTO cable box on apartment building case A permanent physical occupation of property is a taking without regard to the public interest that it may serve. Physical intrusion of government is a property restriction of an unusually serious character. When the physical intrusion reaches the extreme form of a permanent physical occupation, a taking has occurred. Constitutional Argument: th th The 5 and 14 Amendment prohibit the taking of private property for public use without just compensation. Fair market value at the time of taking 2. Standards Determining Whether a Taking has Occurred that Justifies Compensation Economic Impact Degree of interference with investment-backed expectations Level of Physical Intrusion Temporary Invasion vs. Permanent Physical Occupation (PPO) if it is a PPO, usually a taking has occurred and compensation to the property owner is due. 3. YEE owners of a mobile home park are asserting that a permanent physical taking has occurred (per se) because of a law passed in California that provided owners of mobile homes unique protection from actual or constructive eviction and prohibited rent increases resulting in a transfer of wealth from the landowners to the tenants. Court rejects the argument no physical invasion of property Tenants were invited by the park owner, not forced upon them by the govt Right to exclude others has not been taken from the P P may have a claim relevant to a regulatory taking but not physical occupation 4. Distinction between Laretto and Yee Who has the right to occupy in each of these cases? rd Laretto cable company wanted the right to occupy (3 party). The landlord had not already given up any sticks from the bundle. rd Occupany by an unrelated 3 party Where there is a permanent occupation by an unrelated third party, the court will find a per se taking. Yee tenants wanted the right to occupy. Tenant had already received the right of possession for the term of the tenancy from the landlord (given up a stick). CRITICAL DISTINCTION
D. REGULATORY TAKINGS

1. A given regulation deprives the property owner of enough strands in her bundle of rights so as to mandate compensation (regulatory taking distinguish from physical occupation) 2. PENN CENTRAL TRANSPORT. Train station is assigned landmark status by a NY statute. Where does a regulatory scheme effect a compensable taking. Courts have been reluctant to set a bright-line rule Look at the facts on a case by case basis (ad hoc basis). When the courts looks at the case it will apply certain factors to determine if the regulation has gone to far. Character or nature of governmental action If its is a permanent physial occupation by a third party (per se taking) 3. Lucas: If a regulation deprives property of all economic uses of property, categorically, there will be a regulatory taking. Extent to which the regulation interferes with the owners distinct investment-backed expectations. Degree of diminution of value Physical taking more likely that there is a greater reduction in diminution of value of the land.