PROPERTYTHE PRESENT ESTATES

I. Fee Simple Absolute1) How to create: "To A" or "To A and his heirs.”

i. Today, those common law words "and his heirs" are no longer necessary. ii. Thus, "to A" suffices to create the fee simple absolute.

2) Distinguishing characteristics: i. This is absolute ownership of potentially infinite duration. It is freely devisable , descendible ,

and alienable . ii. Accompanying future interest? NO

II. The Fee Tail1) How to create: "To A and the heirs of his body." 2) Distinguishing characteristics:

i. Virtually abolished in the U.S. today. Virtually never tested. Historically, the fee tail would pass directly to grantee’s lineal blood descendants no matter what .

ii. Today, the attempted creation of a fee tail creates instead fee simple absolute.3) Accompanying future interest?

i. YES , because if A didn’t have heirs of his body, the interest would have to belong to someone. That person is O, the grantor, and it was called reversion.

ii. In a third party (someone other than O), it was called remainder.

III. The Defeasible Fees: (3 separate types—will be on our exam)1) The Fee Simple Determinable:

i. How to create: "To A for so long as . . ." "To A during . . ." "To A until . . ." “while”1. Grantor must use clear durational language. 2. If the stated condition is violated, forfeiture is automatic.

ii. Distinguishing characteristics1. This estate, like all of the defeasible fees, is devisable (will) , descendable (intestate) ,

and alienable (transferable inter vivos) , but always subject to the condition.a. You may convey less than what you started with, but you can't convey

more..iii. Accompanying future interest?

1. It is a possibility of reverter in the grantor. (commit this to memory: FSD will always walk hand in hand with POR)

F S D P O R [Frank Sinatra Didn’t Prefer Orville Redenbacher]2) The Fee Simple Subject to Condition Subsequent:

i. How to create: "To A, but if X event occurs, then grantor reserves the right to reenter and retake."

1. Here, grantor must use clear durational language and must carve out the right to re-enter . (2 elements)

2. Magic Words: provided however; but if; on the condition that;a. Magic words expressly reserve right to reenterb. Not: for purpose of…

ii. Distinguishing characteristics:

1

PROPERTY1. This estate is NOT automatically terminated, but it can be cut short at the grantor's

option, if the stated condition occurs (so no automatic forfeiture, but grantor can choose to cut estate short)

iii. Accompanying future interest? 1. Right of entry , synonymous with power of termination

3) The Fee Simple Subject to Executory Limitation: i. How to create: "To A, but if X event occurs, then to B.”

1. Example 5: "To Barry Manilow, but if Manilow ever performs music on the premises, then to Mandy.”

a. Barry has: fee simple subject to Mandy’s shifting executory interest .b. Mandy has: shifting executory interest.

ii. Distinguishing characteristics:1. This estate is just like the fee simple determinable only now, if the condition is

broken, the estate is automatically terminated (harsh) in favor of someone other than the grantor.

iii. Accompanying future interest? Shifting executory interest

AS CONCERN THE DEFEASIBLE FEES, NOTE TWO IMPORTANT RULES OF CONSTRUCTION: 1)Words of mere desire, hope, intention, purpose, or expectation are insufficient to create a

defeasible fee.i. Courts disfavor restrictions on the free use of land.

a. Meaning: courts will not find a defeasible fee unless clear durational language is used.

ii. NOT a defeasible fee: a. "To A for the purpose of constructing a day care center"b. "To A with the hope that he becomes a lawyer"c. "To A with the expectation that the premises will be used as a Blockbuster video

store."2)Absolute restraints on alienation are void.

i.An absolute restraint on alienation is an absolute ban on the power to sell or transfer that is not linked to any reasonable time-limited purpose.

ii.Right of first refusal is okIV. The Life Estate

1) How to create: This is an estate that must be measured in explicit lifetime terms, and NEVER in terms of years. (think of life estate as the romantic estate) Note: you can have a defeasible life estate that ends before the life tenant’s death if a limiting condition occurs

i. The life estate pur autre vie: A life estate measured by a life other than the grantee’s.1. "To A for the life of B."2. CL- if A dies first than, “seisin is vacant so anybody takes until measuring life dies”3. MAJ- if A dies first, than life estate passes to his estate until B dies

ii. Can create a provision that terminates the life estate if the life tenant attempts to convey away the life estate

2) Distinguishing characteristics of the life estate: i. The life tenant's entitlements are rooted in the important doctrine of waste. (this will be on

the exam this summer)ii. Note two general rules:

1. The life tenant is entitled to: all ordinary uses and profits from the land.

2

PROPERTY2. The life tenant must not: commit waste, i.e. must not do anything to harm the

future interest holders.iii. There are three species of waste (“maintain”):

1. Voluntary or affirmative waste. This is: actual overt conduct (beyond maintence) that causes a decrease in value (e.g. willful acts of destruction)

a. Use of natural resources:i. The general rule: The life tenant must not consume or exploit natural

resources on the property (such as timber, oil, or minerals), UNLESS one of four exceptions applies, remembered by PURGE (i.e. when the life tenant purge the land)

ii. PU: prior use, meaning that prior to the grant, the land was used for exploitation.

1. Here, the life tenant may continue to exploit, unless otherwise agreed.

a. Note: Prior Use and the Open Mines Doctrine: If mining was done on the land before the life estate began: the life tenant may continue to mine , but is limited to the mines already open. Thus, the life tenant must not open any new mines.

iii. R: reasonable repairs. The life tenant may consume natural resources for reasonable repairs and maintenance of the premises.

iv. G: grant. The life tenant may exploit if expressly granted the right to do so .

v. E: exploitation, meaning the land is suitable only for exploitation. (e.g. being a life tenant on a quarry)

2. Permissive waste, or neglect. This occurs when land is allowed to fall into disrepair, or the life tenant fails to reasonably protect the land. (i.e. pattern of remiss on the part of the tenant)

a. Permissive waste and the obligation to repair: i. The life tenant must simply maintain the premises in reasonably good

repair.1. Maintenance is the floor2. Not replacement3. If tenant not using or receiving income, no repair obligation

b. Permissive waste and the obligation to pay all ordinary taxes: The life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits from the land.

i. If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of the premises fair rental value .

ii. If you don’t pay taxes, future interests are eliminated by tax salec. Mortgage Debt: Life tenant must pay interest, not principal. Same no use as

aboved. Insurance: don’t have to get it but can

3. Ameliorative waste: a. The life tenant must not engage in acts that will enhance the property's

value, unless: all of the future interest holders are known and consentb. Rationale: property law honors sentimental value

3

PROPERTYc. If changed conditions that make property relatively worthless, can change

3) The life estate's accompanying future interest?i. If held by O, the grantor, it is called a reversion. If held by a third party, it is a remainder.

4) Life tenant must pay the interest on any encumbrances. Reversioners/remaindermen must pay the principal.

5) Seisin: holder of seisin is the taxpayer. All times and in all circumstances.

FUTURE INTERESTS

I. Future Interests Capable of Creation in the Grantor (vested at present)There are only 3 future interests capable of creation in the grantor1) The Possibility of Reverter. It accompanies only the fee simple determinable (FSDPOR)2) The Right of Entry, also known as the Power of Termination. It accompanies only the fee simple

subject to condition subsequent . 3) The Reversion. A reversion is the future interest that arises in a grantor who transfers an estate of

lesser quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent. Ex: O conveys to A for life; O has a reversion. Happens automatically

II. Future Interests in Transferees1) If our future interest is held by someone other than the grantor, it has to be either of 3

categories: i. A vested remainder of which there are three species:

1. the indefeasibly vested remainder, 2. the vested remainder subject to complete defeasance (also known as the vested

remainder subject to total divestment), and 3. the vested remainder subject to open.

ii. A contingent remainder; ORiii. An executory interest of which there are two species:

1. the shifting executory interest2. the springing executory interest

2) The difference between vested remainders and contingent remainders:i. Remainder

1. A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.

2. Remember that remainderman is sociable, patient and polite: a. He never travels alone - always accompanies a preceding estate of

known fixed duration. That preceding estate is usually a life estate or a term of years.

b. Remainderman is patient and polite = never follows a defeasible fee. i. Remainderman cannot cut short or divest a prior transferee.

3) REMAINDERS ARE EITHER VESTED OR CONTINGENT. i. A remainder is vested if it is both created in an ascertained person and is not subject to

any condition precedent.ii. A remainder is contingent if it is created in an unascertained person or is subject to a

condition precedent, or both. (2 ways to have contingent remainder):1. The remainder that is contingent because it is created in as yet unborn or

unascertained persons.2. The remainder that is contingent because it is subject to a condition precedent.

4

PROPERTYa. A condition is a condition precedent when it appears before the language

creating the remainder or is woven into the grant to remainderman.3. Contingent remainders and limiting rules:

a. The Rule of Destructibility of Contingent Remainders:i. At common law, a contingent remainder was destroyed if it was

still contingent at the time the preceding estate ended.1. Common law: B's contingent remainder is destroyed. Thus,

O or O’s heirs would take in fee simple absolute.2. Today: The Destructibility Rule has been abolished. Thus, if

B is still under 21 when A dies, O or O’s heirs hold the estate subject to B's springing executory interest. Once B reaches 21, B takes.

ii. The Rule in Shelley's Case : At common law, the rule would apply in one setting only:

1. Example 18: O conveys "To A for life, then, on A's death, to A's heirs." A is alive.

a. Historically: The present and future interests would merge, giving A fee simple absolute.

b. Note: The Rule in Shelley's Case is a rule of law, and not a rule of construction. It would apply even in the face of contrary grantor intent .

c. Today: The Rule in Shelley's Case has been virtually abolished. Thus, today, when O conveys "To A for life, then to A's heirs:"

i. A has life estate. ii. A's as yet unknown heirs have contingent

remainder. iii. O has reversion, since A could die without

heirs.iii. The Doctrine of Worthier Title (also known as the rule against a

remainder in grantor's heirs):1. This doctrine is still viable in most states today. It applies

when O, who is alive, tries to create a future interest in his heirs.

a. Policy Reason: The doctrine endeavors to promote the free transfer of land.

b. Note: The Doctrine of Worthier Title is a rule of construction, and not a rule of law. Meaning grantor's intent controls. If grantor clearly intends to create a contingent remainder in his heirs, that intent is binding.

4) Distinguish the three kinds of vested remainders: i. The indefeasibly vested remainder: The holder of this remainder is certain to acquire an

estate in the future, with no conditions attached. ii. The vested remainder subject to complete defeasance (also known as the vested

remainder subject to total divestment) (executory limitation).1. Here, remainderman exists. His taking is NOT subject to any condition precedent

5

PROPERTYa. However, his right to possession could be cut short because of a

condition subsequent 2. Here, note the difference between a condition precedent, which creates a

contingent remainder, and a condition subsequent, which creates a vested remainder subject to complete defeasance.

a. To tell the difference, apply the "Comma Rule": When conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance.

iii. The vested remainder subject to open:1. Here, a remainder is vested in a group of takers, at least one of whom is:

Qualified to Take Possession.a. But each class member's share is subject to partial diminution because

additional takers, not yet asserted can still qualify as class members. 2. A CLASS IS EITHER OPEN OR CLOSED

a. A class is open if it is possible for others to enter.b. A class is closed when its maximum members have been set so that

persons born thereafter are shut out. (conceived?)c. How will you know when the given class has closed?

i. Rule of Convenience (Common Law):1. The class closes whenever any member can demand

possession.ii. Intent still rules

5) Distinguish remainders from executory interests: i. Executory Interest: It is a future interest created in a transferee (a third party), which is

not a remainder and which takes effect by either cutting short some interest in another person ("shifting") or in the grantor or his heirs ("springing").

ii. Shifting Executory Interest:1. It always follows a defeasible fee and cuts short someone other than the grantor.

iii. Springing executory interest: 1. Cuts short O the grantor; ex: to A when and if he becomes a doctor

iv. Person with EI has no standing to sue for waste

THE RULE AGAINST PERPETUITIES (“RAP”)Look at handoutI. The Rule:

a. Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life.

b. No interest will be valid unless it must vest, if it is going to vest at all, within 21 years after the death of some life (anyone alive at time of conveyance) in being who was alive at the moment the conveyance was made

c. If conveyed by will, when will takes effect; if conveyed by deed, when deed takes effectII. Four-Step Technique for Assessing Potential RAP Problems:

6

PROPERTYa. FIRST: Classify the Future Interest - Determine which future interests have been created by the

conveyance. The RAP potentially applies only to (1) contingent remainders, (2) executory interests, and (3) certain vested remainders subject to open.

i. The RAP does NOT apply to any future interest in the grantor, O. ii. The RAP will NOT apply to an indefeasibly vested remainder and vested remainders subject

to complete defeasance. b. SECOND: Identify the conditions precedent to the vesting of the suspect future interest.

i. In the preceding example, what has to happen before a future interest holder can take? c. THIRD: Find a measuring life. Look for a person alive at the date of the conveyance and ask

whether that person's life or death is relevant to the condition's occurrence.d. FOURTH: Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if

our future interest holder(s) can or cannot take? i. If so, the conveyance is good.

ii. If not (if there is any possibility, however remote, that the condition precedent could or could not occur more than 21 years after the death of a measuring life), the future interest is void.

a. Fertile Octogenarian Rule. It presumes that a person is fertile no matter his or her age.

III. Two Bright Line Rules of Common Law RAP a. Rule #1: A gift to an open class that is conditioned on the members surviving to an age beyond 21

violates the common law RAP i. "Bad as to one, bad as to all." To be valid, it must be shown that the condition precedent to

every class member's taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class, the entire class gift is void.

1. Example 30: "To A for life, then to such of A's children as live to attain the age of 30." A has two children, B and C. B is 35 and C is 40. A is alive (so this class is still open).

a. B and C's vested remainders subject to open are voided by common law RAP and the “bad as to one, bad as to all” rule.

i. Examiners are trying to trick us into thinking that B and C are golden b/c they meet the life condition, but the problem is that the class is open and if A were to die in labor, that baby wouldn’t make the 30 year age condition, and the entire class gift is poisoned.

b. Under the common law RAP: A has a life estate. O has a reversion.b. Rule #2: Many shifting executory interests violate the RAP. An executory interest with no limit on

the time within which it must vest violates the RAP. i. Example 31a: "To A and his heirs so long as the land is used for farm purposes, and if the

land ceases to be so used, to B and his heirs." 1. Once the offensive future interest is stricken, we are left with: "To A and his heirs so

long as the land is used for farm purposes."a. Thus, A now has: Fee Simple Determinableb. O has: Possibility of Reverter

ii. Example 31b: Compare the preceding example to: "To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs."

1. once the offensive future interest ("to B and his heirs") is stricken: The conveyance is no longer grammatically sound.

a. Thus, the entire conditional clause is stricken.i. Therefore, A now has: fee simple absolute.

7

PROPERTY1. O has: nothing.

iii. Charity - to - charity exception : 1. A gift from one charity to another: does not violate RAP. (Rationale: to inspire and

encourage charitable gift giving)(both transferee’s are charities).IV. Reform of the RAP:

a. The "wait and see" or "second look" doctrine (majority): i. Under this majority reform effort, the validity of any suspect future interest is determined

on the basis of: the facts as they currently exist at the conclusion of the measuring life.ii. This eliminates the “what if” or “anything is possible” line of inquiry.

b. The Uniform Statutory Rule Against Perpetuities (USRAP):i. Codifies the common law RAP and, in addition, provides for an alternative 90 year vesting

period.c. Both the "wait and see" and USRAP reforms embrace:

i. The cy pres doctrine : “as near as possible” 1. If a given disposition violates the rule, a court may reform it in a way that most

closely matches the grantor’s intent while still complying with RAP.ii. The reduction of any offensive age contingency to 21 years.

1. If would normally fail because depends on a member reaching 21 years, the age requirement is reduced to 21 years to allow the interest to vest.

V. Watch for tricks:a. Right of re entry is only for grantorb. Right of first refusal- RAP applies to RoFR,

CONCURRENT ESTATESThere are three forms of concurrent ownership:

a. The joint tenancy2 of more own, with the right of survivorship. b. The tenancy by the entiretya protected marital interest between H & W with a right of

survivorship.c. The tenancy in common2 of more own, with NO right of survivorship.

I. THE JOINT TENANCYa. Distinguishing characteristics:

i. Right of Survivorship – when one JT dies, his share passes automatically to the surviving JTsii. Alienable – transfers during life are allowed.

iii. NOT Devisable or Descendible – because of the right of survivorshipb. Creation of a Joint Tenancy:

i. The four unities: Remember this "T-TIP"1. Joint tenants must take their interests:

a. T: Take interest at the same timeb. T: Take interest by the same title (Same document)c. I: Identical (equal) interest(same kind and amount)d. P: With identical rights to possession.

2. Grantor’s intends to create JTii. +Grantor must clearly express the right of survivorship.

1. Joint tenancies are disfavored a. (because of the right of survivorship which allows avoidance of probate

which generates significant fees for government)2. Thus, in addition to the 4 unities, grantor must clearly state the right of survivorship.

8

PROPERTYiii. Special Situations: Use of a straw. (Sometimes necessary)

1. Strawman conveys back to Dave and Paul as JT with the right of survivorship. (Now, all four unities are present, including the unities of time and title.)

c. Severance of a Joint Tenancy:i. Remember "SPAM": Sale, Partition And Mortgage

ii. Severance and Sale :1. A joint tenant can sell or transfer her interest during her lifetime.

a. May she do so secretly? Yes. Knowledge of consent of the other JTs is NOT required.

b. One joint tenant's sale severs the joint tenancy as to the seller's interest because it disrupts the 4 unities.

c. Buyer is: Tenant-in-Commond. Other Tenants: Joint Tenants (the joint tenancy remains intact as to the

remaining tenants)e. To the extent that we started with more than two joint tenants in the first

place: the JT is in tack, as between the other, non-transferring joint tenants.2. Sale of Interest : In equity, a joint tenant's mere act of entering into a contract for the

sale of her share will: sever the JT as to the contract party’s interest. a. This is because of the doctrine of: Equitable Conversion, which provides that

"equity regards as done that which ought to be done."i. Example 35: O conveys Blackacre to "Ringo, Paul, and John as joint

tenants with the right of survivorship." This form of concurrent estate is: joint tenancy.

1. On January 1, Ringo enters into a contract for sale of his interest in the joint tenancy to George, with the closing to take place on April 1. When does the severance as to Ringo's interest occur, and why? On January 1 under Equitable Conversion. (JT is severed as to Ringo’s interest as of when K was signed)

3. Creditor’s Sale: no severance until actual judicial sale takes placeiii. Severance and Partition :

1. Remember three variations: (based upon ownership interest)a. Voluntary agreement : an allowable peacefully way to end the relationship.b. Partition in kind : a judicial action for physical division of the property if in the

best interest of all parties. i. Most apt when Blackacre is a sprawling domain and lends itself to

ready division, e.g. you take those 50 acres and I’ll take these 50 acres.

c. Forced sale : a judicial action, if in the best interest of all, where the land is sold and sale proceeds/ $$ are divided proportionately.

i. Works best if it’s a home or an office buildingiv. Severance and Mortgage

1. Minority rule (Title Theory): One joint tenant's execution of a mortgage or a lien on his or her share will sever the joint tenancy as to that now encumbered share only in the minor of state following the title theory of mortgages.

2. Majority Rule (Lien Theory): the majority of states follow lien theory, whereby a joint tenant's execution of a mortgage on his or her interest will not sever the JT.

9

PROPERTYa. Example 36: Paul, John, and George are joint tenants. Suppose now that Paul

mortgages his interest in the joint tenancy. Will this sever the joint tenancy as to Paul's interest?

i. In a minority jdx to follow the title theory of mortgages: Yesii. In a majority jdx to follow the lien theory of mortgages: No

v. JT cannot be severed by will

II. TENANCY BY THE ENTIRETY a. Creation : can only be created in H & W (marital r/ship) with the right of survivorship.

i. In those states to recognize the tenancy by the entirety, it arises presumptively in any conveyance to married partners UNLESS clearly stated otherwise.

b. This is a very protected form of co-ownership:i. Remember "CAN'T TOUCH THIS" by MC Hammer

ii. Creditors: Creditors of only one spouse can NOT touch this tenancy.iii. Unilateral conveyance:

1. Neither tenant, acting alone, can defeat the right of survivorship by a unilateral conveyance to a third party.

2. Example 37: Tony and Carmella, married to each other, own Blackacre as tenants by the entirety. Tony then secretly transfers his interest to Uncle Junior. Uncle Junior gets nothing.

iv. Terminate by death; mutual agreement in writing; divorce, execution by joint creditor

III. TENANCY IN COMMON a. Remember three features:

i. Each co-tenant owns an individual part, and each has a right to possess the whole. ii. Each interest is descendible, devisable, and alienable.

1. Meaning there are NO survivorship rights between tenants in common.iii. The presumption favors the tenancy-in-common.

b. Rights and Duties of Co-Tenants (co tenant refers to any tenancy, ie JT, T in common, or T by entirety)

i. Greg and Marcia own Blackacre as tenants in common. Greg contributed 90% of the purchase price & Marcia 10%.

ii. (1) Possession : Greg takes a can of white paint and divides up the premises. "Marcia," he says, "you can use and enjoy that 10% on that side of the line, and only that." Are Greg's actions permissible?

1. NO , each co-tenant is entitled to possess and enjoy the whole2. Wrongful Ouster : If one co-tenant wrongfully excludes another co-tenant from

possession of the whole or any part, he has committed wrongful ouster.3. Remedy: Percentage of FMV rental & possession of property in the future.

iii. (2) Rent from co - tenant in exclusive possession : 1. Marcia leaves Blackacre voluntarily, for a three-month tour of Europe with her

cheerleading squad. On her return, she demands rent from Greg for the three months in which he enjoyed exclusive possession. Will she prevail?

10

PROPERTY2. NO , absent ouster, a co-tenant in exclusive possession is NOT liable to the others for

rent.iv. (3) Rent from third parties :

1. Greg leases Blackacre's basement to Alice, a tenant. Is Marcia entitled to a portion of the rental income? Yes. Marcia 10%, Greg 90% of rental income

2. A co-tenant who leases all or part of the premises to a third party: must account to his co tenants providing them their fair share of the rental income.

v. (4) Adverse possession : NEED OUSTER1. Marcia, so enthralled by a family trip to the Grand Canyon, decides to stay there for

the next 20 years. In her absence, can Greg acquire title to the whole through adverse possession? NO

2. Unless he has ousted the other co-tenants, one co-tenant in exclusive possession for the statutory adverse possession period cannot acquire title to the exclusion of others.

3. Why not? The hostility element of adverse possession is absent. There is no hostility because there was never any ouster.

vi. (5) Carrying costs : 1. What are Marcia and Greg’s respective responsibilities with respect to Blackacre’s

carrying costs? 2. Each co - tenant is responsible for his or her fair share of carrying costs (such as taxes

and mortgage interest payments), based upon the undivided share that he or she holds. For mortgage it must be signed by all co tenants

vii. (6) Repairs : 1. A football, thrown in Marcia's direction, goes through Blackacre's front window.

Marcia, who has repaired the window, now seeks contribution from Greg. a. Will she prevail? b. YES. Greg must contribute 90%, Marcia must contribute 10%.

2. The repairing co-tenant enjoys a right to contribution for r/s and necessary repairs provided that she has notified the other of the need for the repairs.

viii. (7) Improvements: 1. Marcia has wallpapered Blackacre's den with life-size posters of her idol, Davy Jones.

She now seeks contribution from Greg, for his fair share of the costs of her "improvements." Will she succeed? NO (one person’s “improvement” can be another’s nightmare)

2. During the life of the co-tenancy, there is no right to contribution for so-called improvements .

3. Credit : At partition, the improving co-tenant is entitled to a credit equal to the increase in value caused by her efforts.

4. Detriment : attendantly, at partition, the so-called "improver" bears full liability for decrease in value caused by her efforts.

ix. (8) Waste :1. A co-tenant must not commit waste. (Recall the three species of waste: voluntary,

permissive and ameliorative.) a. Co-tenant can bring an action for waste during the life of the co-tenancy.

x. (9) Partition : 1. A cotenant can bring an action for partition during the life of the cotenancy. No need

to wait for partition to sue.

11

PROPERTYxi. Accountability: one co tenant does not have to account to another for his share of profits

unless:1. Outseter; K to share; lease to 3rd party; depletion of natural rights

LANDLORD / TENANT LAWI. The Four Leasehold or Nonfreehold Estates

1. Tenancy for Years (also known as the Estate for Years or the Term of Years) This is a lease for fixed, determined period of time. (The length of the leasehold does not matter) When you know the termination date from the start, you have “tenancy for years.” Doesn’t matter how short, need definite begin and end.

ii) NO Notice: Because a term of years states from the outset when it will terminate NO notice is needed to terminate.

Example 38: L leases Blackacre to T "from January 1, 2003 to July 1, 2003." (or “for two years beginning Jan 1, 2006”) Which form of tenancy exists here? Term of Years. Why? It is a leasehold for a fixed known period of time. How much notice is needed to terminate the tenancy? NONE.

iii) S.O.F Requirement: A term of years greater than one year must be writing to be enforceable because of the statute of frauds.

Exception: An oral “term of years” agreement that violates the Statute of Frauds, is implied to be a periodic tenancy.

2) Periodic Tenancyi) This is a lease which continues for successive or continuous intervals until L or T give proper notice. (“repeating”)

ii) The periodic tenancy can be created expressly. For example, L conveys to T “for month to month”, or “year to year” or “week to week. ” (notice the continuous, successive nature of these leaseholds)

iii) Implied Tenancy: The periodic tenancy can also arise by implication, in any one of three ways:a. Land is leased with no mention of duration, but provision is made for payment of rent at set intervals.

b. An oral term of years in violation of the statute of frauds creates an implied periodic tenancy measured by the way rent is tendered.

Example 40: L and T negotiate on the telephone for a commercial lease. They orally agree on a five-year lease with rent at $1,000 a month. Is this a tenancy for years? NO, it violates the Statute of Frauds (b/c it’s an oral agreement).

12

PROPERTYWhat if T sends L a check for $1,000 and L accepts it? T's first rental payment renders his interest an implied periodic tenancy with the intervals based on the way rent is tendered .

c. The Holdover Tenancy: Residential Lease

o If L elects to holdover a T who has wrongfully (not just a few hours) stayed on past the conclusion of the original lease: an implied periodic tenancy arises, measured by the way rent is now tendered.

If original lease term was for a year or more, a month to month tenancy results from holding over

Example 41: T holds over after the expiration of her one-year lease, but sends another month's rent check to L, who cashes it. What tenancy now exists? An implied month to month periodic tenancy.

o If the LL notifies the tenant before termination that occupancy after termination date will be at an increased rent, the tenant will be held to have acquiesced to the new term if she does not surrender.

Commercial Lease – If original lease term was for a year or more, a year to year tenancy results from holding over

v) How to terminate a periodic tenancy: NOTICE (usually written) must be given How much notice? At common law, at least equal to the period of the tenancy itself, unless otherwise agreed. (Freedom of Contract)

Thus, in a month-to-month periodic tenancy: one month notice. In a week-to-week periodic tenancy: 1 week notice

o Exception: If the tenancy is from year-to-year or greater: 6 months notice (maximum)

Need enough time and effect date

Note - By private agreement, the parties may lengthen or shorten these common-law prescribed notice provisions. (Freedom of Contract)

Note -The periodic tenancy must end at the conclusion of a natural lease period, even if written notice of termination given. (ex: if july 15th month to month, must terminate on the 15th)

3) Tenancy at Willi) This is a tenancy for no fixed period of duration. (Rare)ii) Unless the parties expressly agree to a tenancy at will, the payment of regular rent will cause a court to treat the tenancy as an implied periodic tenancy.

iii) The tenancy at will may be terminated by either party, at any time. However, not as open as it seems, a reasonable demand to vacate is typically required.

4) The Tenancy at Sufferance: It is created when T has wrongfully held over past the expiration of the lease. We give this wrongdoer a leasehold estate (wrongdoer = the tenancy at sufferance), to permit L to recover rent.

13

PROPERTY The tenancy at sufferance lasts only until L either or evicts T or elects to hold T to another term . Raised Rent: LL gives notice to T before lease expired, than ok

II. Tenant's Duties: 1) T's liability to third parties; 2) T's duty to repair; 3) T's duty to pay rent.

1)T's liability to third parties: (this is a matter of tort law)a.T is responsible for keeping the premises in reasonably good repair. b.T is liable for injuries sustained by 3rd parties T invited even where L has expressly promised to

make all repairs. o Example 43: L leases a building to T, expressly promising to maintain the premises in a

state of good repair. T's invitee trips over a loose floorboard and sues T. If invitee sues T, what result?

T always loses. (It does not matter that T may seek indemnification from L vis-a-vis the plaintiff, who is a guest, Tenant loses.)

2) T's duty to repair:a) T's duty to repair when the lease is silent:

i) The standard: Tenant must maintain the premises and make ordinary repairs .

ii) T must not commit waste:o FIXTURES: The law of waste goes with the law of fixtures (i.e. The law of fixtures walks

with waste) The law of fixtures: When a tenant removes a fixture he commits voluntary

waste .

Definitiona fixture is a once movable chattel that, by virtue of its annexation (attachment) to realty objectively shows the intent to permanently improve the realty.

Common examples : Heating systems, custom-made storm windows, furnace, and certain lighting installations.

RULE: T MUST NOT remove a fixture, NO MATTER THAT T installed it. (I.e. fixtures will always pass with ownership of the land)

How to tell when a tenant installation qualifies as a fixture: Express agreement: The AGR btw L and T is binding. (Freedom of K) Substantial Harm to Premises: In the absence of agreement, T may

remove a chattel that she has installed so long as removal does NOT substantial harm to the premises .

o If removal will cause substantial damage, then an objective judgment T has shown the intent to install a fixture. As such, the fixture must stay.

Subjective judgment is irrelevant General Custom Trade fixtures: Presumed that chattels used in trade/business are not

intended to be fixtures

14

PROPERTY Note: Even if T had a right to remove chattel, T must do so within the period of

the lease and not after the lease expires. Seller must remove the item before closing.

b) Express Covenant to Repair: T's duty to repair when T has expressly covenanted in the lease to maintain the property in good condition for the duration of the lease:

At common law historically: T was responsible to any loss (including losses from forces of nature, and ordinary wear and tear).

Majority View: T may terminate the lease if the premises are destroyed w/o T’s fault

3) T's Duty to Pay Rent (LL’s remedies)a) T breaches this duty and is in possession of the premises:

The landlord's only options are to (1) evict through the courts or (2) continue the relationship and sue from rent due . If the landlord moves to evict, she is nonetheless entitled to rent from the tenant until the tenant, who is now a tenant at sufferance vacates.

NO SELF HELP: LANDLORD MUST NOT ENGAGE IN SELF HELP, such as changing the lock, forcibly removing T, or removing T’s possessions.

Self-help is flatly outlawed, and is punishable civilly and criminally.

b) T breaches this duty but is out of possession:For example, T wrongfully vacates with time left on a term of years lease.

3 LL options when a T breaches duty to pay rent ( Remember S I R) i) Surrender: L could choose to treat T's abandonment as an implicit offer of surrender which L accepts.

o T demonstrated by words or actions that she wishes to give up the leasehold. Writing Required if the unexpired term is greater than one year surrender

must be in writing to satisfy the SOF. ii) Ignore the abandonment and hold T responsible for unpaid rent , just as if T were still there (this is a form of denial). iii) Re-let the premises on the wrongdoer tenant's behalf, and hold him or her liable for any deficiency.

Majority rule: L must at least try to re-let. This is a mitigation principle, an opportunity for landlord to cut his losses.

III. Landlord's Duties1) Duty to deliver possession:

English Rule: (Majority Rule) requires that L put T in actual physical possession of the premises. Thus, if at the start of T's lease a prior holdover T is still in possession, L is in breach and the new T is entitled to damages.

15

PROPERTYAmerican Rule: (Very Minority Rule) does NOT require that L put T is actual physical possession. L must only provide legal possession, i.e. the legal right to be on the premises.

2) Implied Covenant of Quiet Enjoyment (will be tested)Applies to both residentially and commercial leases.T has a right to quiet use and enjoyment of the premises, without interference from L.

a) Breach by actual wrongful eviction :This occurs when L wrongfully evicts or excludes T from the premises.

Partial eviction: LL uses part of basement for storage: T can stay rent freeThird party partially evicts, T stay and reduce rent proportionately

b) Breach by constructive eviction : For example, every time it rains, Dido's apartment floods. She has a claim for constructive eviction if three elements are met.

To recall the elements of constructive eviction

i) Substantial Interference: attributable to L’s (not third party) actions or failure to act. (Looking for a chronic problem, even if not a permanent problem) ii) Notice: T must give L notice of the problem and L must fail to respond meaningfully. (This is a safeguard on behalf of L, can’t fix what you don’t know about)iii) Goodbye: T must vacate within a reasonable time after the L fails to respond meaningfully. (So T can’t have it both ways [by staying] in order to plead she was constructively forced out)Is landlord liable for acts of other tenants?General rule = NO

Two exceptions: 1) L has a duty not to permit a nuisance on the premises.2) L must control common areas.

3) Implied Warranty of Habitability

This applies ONLY to residential leases (i.e. doesn’t apply to commercial arena)

The implied warranty of habitability is NOT waivable. Any attempt to waive is void.

i) The standard: The premises must be fit for basic human habitation. Bare living requirements must be met (a very modest requirement)

The appropriate standard may be supplied by local housing code or independent judicial conclusion .

The sorts of problems to trigger breach of the implied warranty of habitability include failure to provide heat in winter, lack of plumbing, or lack of running water.

16

PROPERTYii) T's entitlements when the implied warranty of habitability is breached:

Remember MR 3 - Move, Repair (& Deduct), Reduce, Remain.

Move out and terminate the lease.

Repair & Deduct: allowable by statute in a growing number of jurisdictions. T may make the reasonable repairs and deduct their cost from future rent. (need notice to LL)

Reduce rent or withhold all rent until the court determines fair rental value. Typically, T must place withheld rent into an escrow account to show her good faith.

Remain in possession, pay rent, and affirmatively seek money damages.

4) NO Retaliatory eviction: If T lawfully reports L for housing code violations, L is barred from penalizing T, by, for example, raising rent, harassing the tenant, ending the lease, or taking other reprisals.

IV. Assignment vs. Sublease1) In the absence of some prohibition in the lease, a T may freely transfer his or her interest in whole (thereby accomplishing an assignment) or in part (thereby accomplishing a sublease).

In the lease, L can prohibit T from assigning or subletting without L's prior written approval. Strictly construe (ie if only say no assign, can sublet)

However, once L consents (can be implicit, ie accept rent check from assignee) to one transfer by T, L waives the right to object to future transfers by that T, unless L expressly reserves the right.

2) Assignment

L and T2 are: in privity of estate L and T2 (assignee) are liable to each other for all of the covenants in the original

lease that “run with the land.”o Common examples: promise to pay rent, promise to paint the premises,

promise to repair. Most of the covenants/promises in the original lease continue.

L and T2 are NOT in privity of contract, unless T2 expressly assumed all promises in the original lease.

L and T1 are no longer in privity of estate. However, they remain in privity of contract! Thus, L and T1 are secondarily liable to each other.

o Example 46: L leases Blackacre to T1. T1 assigns to T2. T2 assigns to T3. T3 then engages in flagrant abuse to the premises.

Can L proceed against T3, the direct wrongdoer? YES, L and T3 are in privity of estate.

Can L proceed against T1, the original tenant? YES, L and T1 are in privity of contract. T1 is secondarily liable to L. If T3 is unavailable, T1 is secondarily liable.

17

PROPERTY Can L proceed against T2? NO. No more privity of estate or privity of

contract. Privity of estate ended once T2 assigned to T3. There was never privity of contract UNLESS T2 expressly assumed all promises in the original lease.

Covenants contained in the lease, the general rule is that a convenant will run with the land if it touches and concerns the land. It does touch and concern if it makes the land more valuable or more useful.

3) Subleaseo L and T1 remain in privity of estate and privity of contract. Thus T1 is liable to L for rent

and all other covenants. L and Sublessee are in neither privity of estate nor privity of contract (i.e. they

share no nexus). sublessee is responsible to T1 and vice versa

Taking: In the case of partial taking, the T will get amount equal to the rent that was to be paid over the remaineder of the lease term of the proprerty that was condemned. Must pay full rent. If complete taking, no need to pay rent and extinguishes the lease. Get condemnation if it exceeds FMRV

V. Landlord's Tort Liability1) Caveat Lessee (Common Law)let T beware. This means, in tort, L is under no duty to make the premise safe2) Five most important Exceptions: CLAPS

a) Common areas: L must maintain all common areas (RP).

b) Latent defects rule: L must warn of hidden defects of which L has knowledge or reason to know. (No duty to repair, just to warn; duty to warn: Licensee)

c) Assumption of repairs: While under NO duty to make repair, once repairs are voluntarily undertaken, L must complete them with r/s care. L is liable for negligent repair (despite how careful he is, must repair right).

d) Public use rule: L who leases public space (e.g. a convention hall or museum), and who should know of defect, and because of nature of the defect and length of the lease, L should have known that T will not repair, is liable for any defects on the premises. [E.g. a rotted floor board in a conference hall rented for a week]

e) Short term lease of furnished dwelling: L is responsible for any defect that (proximately) harms T (short term is 3 months or less)

SERVITUDES (see chart on pp. 48-49)

1. Affirmative Easements2. Negative Easements3. Real Covenants4. Equitable Servitudes5. Reciprocal Negative Servitudes (General Scheme Doctrine)

I. Easements

18

PROPERTY1) Defined: the grant of a nonpossessory property interest that entitles its holder to some form of use or enjoyment of another's land, called servient tenament. 2) Easements can be affirmative or negative.

a) Affirmative Easements: The right to go onto and do some affirmative act on servient land. b) Negative Easements: The negative easement entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible. Negative easements are generally recognized in only four categories:

NEGATIVE EASEMENTS CAN ONLY BE CREATED EXPRESSLY, BY WRITING SIGNED BY THE GRANTOR. THERE IS NO NATURAL OR AUTOMATIC RIGHT TO A NEGATIVE EASEMENT.

Remember: LASS for negative easementsL: Light A: AirS: SupportS: Stream Water from an Artificial Flow(S): (minority, including CA) Scenic View

3) An easement is either appurtenant to land or it is held in gross.a) Easement Appurtenant: The easement is appurtenant when it benefits its holder in her phys ical use or enjoyment of HER property .

It takes 2 parcels . Dominant tenement which derives/reaps the benefit Servient tenement which bears the burden of the easement.

b) Easement in Gross: The easement is in gross if it confers upon its holder only some personal or pecuniary advantage that is NOT related to his use or enjoyment of his land. Here, servient land is burdened. However, there is NO benefited or dominant tenement. Only takes one parcel of land (and it is servient).

Common examples: the right to place a billboard on another’s lot, the right to fish or swim in another’s lake/pond, or the right to lay power lines on another’s land. Notice the commonality—the servient land is burdened but there’s no dominant land, i.e. only 1 lot is implicated

Servient land holder can get damages for changes to land by easement holder, but can’t get an injunction.

4) Easement Transferabilitya) Appurtenant Easement: The appurtenant easement passes automatically with the dominant tenement, regardless of whether it is even mentioned in the conveyance. (cant be transferred separately)

Note that the burden of the easement appurtenant also passes automatically with the servient estate, unless the new owner is a bona fide purchaser without notice of the easement.

b) Easement in Gross: An easement in gross is not transferable unless it is for commercial purposes.

19

PROPERTYC) servient: easements are always binding on subsequent holders of servient estates, even if not specifically mentioned in deed. Provided the subsequent holder had notice (actual, constructive if duely recorded, or inquiry notice) of easement.

5) Creation of an affirmative easement: Remember P I N G (four ways to create an affirmative easement):

P: PrescriptionI: ImplicationN: NecessityG: Grant

a) By Prescription: An easement may be acquired by satisfying the elements of adverse possession. (Common Ex: residential subdivion)

Remember COAH for adverse possession:C: Continuous Use for the Statutory Period (CL is 20 years)(seasonal use can be enough if appropriate)O: Open and Notorious UseA: Actual UseH: Hostile Use (Use w/out the Servient Owners Consent)

Note: Permission defeats the acquisition of an easement by prescription. An easement by prescription requires that the use be hostile.

b) By Implication (also known as the easement implied from existing use):

Example 51: A owns two lots. Lot 1 is hooked up to a sewer drain located on lot 2. A sells lot 1 to B, with no mention of B's right to continue to use the drain on A's remaining lot 2. The court may nonetheless imply an easement on B's behalf if:

1) The previous use had been apparent (and continuous) and2) The parties expected that the use would survive division because it is reasonably necessary to the dominant land’s use and enjoyment.

c) By Necessity: The landlocked setting. An easement of right of way will be implied by necessity if grantor conveys a portion of his land with no way out except over some part of the grantors remaining land.

Ends when necessity ends!d) By grant: Writing Requirement (SOF): An easement to endure for more than one year must be in a writing that complies with the formal elements of a deed, to satisfy the SOF. The writing to evidence the easement is called deed of easement.

6) Scope of an Easement: is determined by the terms of the grant or the conditions that created the easement. If silent, presumed to last forever. If silent, use presumed that of reasonable development of dominant estate (at time of creation). Excessive use creates injunction, but no termination of easement.

7) Termination of an easement:

Remember END CRAMP:EstoppelNecessityDestruction

20

PROPERTYCondemnationReleaseAbandonmentMergerPrescription

a) E stoppel : Here, the servient owner materially changes his or her position in reasonable reliance on the easement holder's assurances that the easement will no longer be enforced.

b) N ecessity : Easements created by necessity expire as soon as the necessity ends unless created by express grant.

c) D estruction of the servient land, other than through the willful conduct of the servient owner terminates the easement.

d) C ondemnation (by eminent domain) of the servient estate terminates the easement.

e) R elease : A written release, given by the easement holder to the servient land owner.

f) A bandonment : The easement holder must demonstrate by physical action the intent to never use the easement again.

Note: Abandonment requires physical action by the easement holder. Mere nonuse, or mere words, are insufficient to terminate by abandonment.

g) Merger doctrine (aka unity of ownership): The easement is extinguished when title to the easement and title to servient land become vested in the same person.

Note: Once unity of ownership is achieved, there’s NO REVIVAL. If complete unity of title is achieved, the easement is extinguished. Even though there may be later separation of title the easement is NOT automatically reinstated.

h) P rescription : The servient owner may extinguish the easement by interfering with it in accordance with the elements of adverse possession. (So prescription works both ways, 1 to create and 2 to extinguish an easement)

Remember COAH:

C: Continuous InterferenceO: Open & NotoriousA: Actual InterferenceH: Hostile to Easement Holders

II. LICENSE1) Definitiona mere privilege to enter another’s land for some delineated purpose.

2) NO WRITING NEEDED: Licenses are not subject to SOF. Thus, you do NOT need a writing to create a license.

21

PROPERTY

3) FREELY REVOCABLE: Licenses are freely revocable at the will of the licensor, unless estoppel applies to bar revocation.

4) TWO classic license cases:i) The ticket cases: Tickets create freely revocable licenses ii) Neighbors talking by the fence

If they create an oral easement, it is unenforceable b/c it violates the SOF. An oral easement creates instead a freely revocable license.

iii) Estoppel: Estoppel will apply to bar revocation only when the licensee has invested substantial money, labor, or both, in reasonable reliance on the license's continuation.

III. PROFIT1. The profit entitles its holder to enter the servient land and take from it the soil or some substance of

the soil (e.g. timber, oil, or minerals) (implied easement)2. The profit shares all the rules of easements.

Affirmative or negative Appurtenant or gross Termination through END CRAMP Creation through PING

IV. COVENANT1) Defined: The covenant is a promise to do or not do something related to land. It is UNLIKE the easement because it is not the grant of a property interest, but rather a contractual limitation or promise regarding land (i.e. a covenant is a K re land)

2) Restrictive (negative) Covenant: The restrictive covenant is a promise to refrain from doing something related to land (most covenants are negative covenants)

For example: I promise not to build on the land for commercial purposes. Negative easements are construed so restrictively, so that’s why restrictive covenants exist

3) Affirmative Covenant: The affirmative covenant is a promise to do something related to land. For example: I promise to maintain our common fence or walkway

3) Distinguishable from Equitable Servitude: How to know whether to construe the given promise as a covenant or as an equitable servitude? On the basis of the relief that the seeks.

If P seeks the following remedy:Money Damages = Covenant (e.g. where P is trying to be made whole)Injunction = Equitable Servitude

4) EQ Servitude Terminology: one tract is burdened by the promise and another is benefited.

Covenants Running with the Land: When will the covenant run with the land? When it is capable of binding successors.

22

PROPERTY (burdened parcel) A B (benefited parcel)

horizontal privity

vertical privity:

A-1 B-1

In answering, two separate contests must be resolved:

1. First, does the burden of A's promise to B run from A to A - 1? ( Always analyze the burden first. It is hard for the burden to run; harder for burdens to run than benefits)

Remember W I T H N :The elements necessary for the burden to run:

i) Writing: The original promise between A & B must be in writing.

ii) Intent to Run: The original parties intended the covenant to run with the land. Note: Courts are generous in finding the requisite intent.

iii) Touch and concern the land: The promise must affect the parties' legal relations as land owners, and not simply as members of the community at large.

Note: Covenants to pay money to be used in connection with the land (such as homeowners' association fees) and covenants not to compete DO touch and concern the land. (E.g. McD’s promises not to compete with BK w/in 3 miles = T&C)

iv) Horizontal and vertical privity: BOTH REQUIRED for burden to run

Horizontal Privity: Horizontal privity refers to the nexus between the originally promising parties. (outside covenant) Horizontal privity is hard to establish Horizontal privity requires that they be in succession of estate, i.e. original parties were

in a grantor/grantee or LL/T or mortgagor/mortgagee relationship Many burdens do not run because there is no horizontal privity (HP is HARD to

establish).

Vertical Privity: Vertical privity refers to the nexus between an original owner and a party getting rights from the original owner (i.e. btw A and A1). It simply requires some non-hostile nexus, such as a contract, devise, or descent. (full estate for burden, partial for benefit)

The only time that vertical privity will be absent is if A-1 acquired her interest through: adverse possession.

23

PROPERTYv) Notice: A1 (successor, person whom enforcement is sought) must have had notice of the promise when she took the land.

Actual, Inquiry or record noticeo Note that a donee is not protected by recording statutes and thus is subject of a

covenant even without notice, since she is not a bona fide purchaser

2. Does the benefit of A's promise to B run from B to B-1? Successor in Interest Standing (What we are really asking is “does B1 have standing to make this claim?”)

Remember W I T V:i) Writing – the original promise from A to B must be in writing.

ii) Intent – the original parties A & B intended the benefit to run.

iii) Touch and Concern – original promise affects the parties as landowners.

iv) Vertical Privity – some non-hostile nexus between the original parties and the successor (B & B1).

Note: Horizontal privity is not required for the benefit to run (that’s why it’s easier for benefits to run than for burdens to run)

V. EQUITABLE SERVITUDES1) Defined: The equitable servitude is a promise that equity will enforce against successors. It is accompanied by injunctive relief (i.e. takes it’s remedy in equity)

2) To create a binding equitable servitude on successors:

Remember W I T N E S:i) Writing – generally (but not always), the original promise was in writing.

ii) Intent – parties intended the promise to be enforceable (binding) against/by successors.

iii) Touch and Concern – promise affects the parties as landowners.

iv) Notice – the successors of the burdened land had notice of the promise.

E - EquitableS - Servitude

NOTE: PRIVITY IS NOT REQUIRED TO BIND SUCCESSORS.

3) Implied Equitable Servitude (reciprocal negative servitude) – a.k.a. the general or common scheme doctrine

Two Elements:i) GENERAL SCHEME (intent): When the sales began, the subdivider (A) had a general scheme of residential development which included Defendant’s lot. (dedication is ok based on dedication theory, not servitude)

24

PROPERTYii) NOTICE: The D lot-holder (B) had notice of the promise contained in the prior deeds

o Note that a donee is not protected by recording statutes and thus is subject of a covenant even without notice, since she is not a bona fide purchaser

There are three forms of notice potentially imputed to defendant: (Remember AIR)A: Actual notice, meaning: D had literal knowledge of the promises in the prior deeds. I: Inquiry notice: the neighborhood conforms to the common restriction; (synonymous with the lay of the land)R: Record notice(constructive): the form of notice sometimes imputed to buyers on the basis of the publicly recorded documents.

Note: With respect to record notice, the courts are split. Some take the view that a subsequent buyer is on record notice of the contents of prior deeds transferred to others by a common grantor. The better view, taken by more progressive courts, is that the subsequent buyer does NOT have record notice of the contents of those prior deeds transferred to others by the common grantor.

(The latter view is the better view because it is more efficient and less burdensome to the Defendant’s title searcher, i.e. don’t have to scan all previous titles to strangers transferred by a common grantor)

4) Equitable Defenses to enforcement of an equitable servitude:

a) Changed conditions: The changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the character of the entire area has changed (all lots).

What is never good enough? Mere pockets of limited change = always insufficient.

Unclean hands (P does same thing), acquiescence (P lets someone else do same thing), laches (P doesn’t object till after completion), estoppel

ADVERSE POSSESSION

1) The basic concept: Possession for a statutorily prescribed period of time can, if certain elements are met can ripen into title .

2) Elements of Adverse Possession: Remember C O A HFor possession to ripen into title it must be:

i) Continuous: Uninterrupted for a given statutory period (ejectment).

ii) Open and Notorious: the sort of possession that the usual owner would make under the circumstances.

iii) Actual: Physical entry on the land. Entry cannot be hypothetical or symbolic. (E.g. the clock won’t start ticking merely by issuing a declaration of intent in a letter)

25

PROPERTYiv) Hostile: Possessor does NOT have the true owner permission to enter land.

Exclusive

NOTE: POSSESSOR'S SUBJECTIVE STATE OF MIND IS IRRELEVANT (doesn’t matter if the possessor had no idea that she was encroaching on someone’s land, and doesn’t matter if possessor did it in bad faith either)

3) Tacking: One adverse possessor may tack on to his time with the land his predecessor's time, so long as there is privity (btw the possessors), which is satisfied by any non-hostile nexus, such as blood r/ship, contract, deed, or will. Must be successive

Tacking is NOT allowed when: there has been an ouster. Ouster defeats privity.

Example 61: O owned Blackacre in 1980 when A entered adversely. A was on her way to satisfying the elements of adverse possession when, in 1986, Mr. X ousted her. Mr. X stays on the land through 2000. Our jurisdiction has a 20-year statute of limitations. In 2000, who owns Blackacre? O, ouster defeats privity, therefore no tacking is allowed.

4) Disabilities: The statute of limitations will not run against a true owner who is afflicted by a disability at the START of the adverse possession. Owner cannot claim the benefit of disability if he was not suffering from the disability at the inception of the adverse possession . (this means you cant tack disabilities; ex: minor at start of adverse possession, before turning 18 minor goes insane, clock starts when minor turns 18)

Common disabilities include (a) insanity, (b) infancy, and (c) imprisonment.

Constructive Adverse Possession: Pg 73 of handout, exception to actual possession. Invalid title, possess 85 of 100 acres, you get extra 15 acres if reasonable relation to whole and the whole is one unit (unitary) Leasing Land to a 3rd party constitutes possession for purpose of adverse possession No adverse possession against government land, need court action for quite title

LAND CONVEYANCING: THE PURCHASE AND SALE OF REAL ESTATE

Every conveyance of real estate consists of a two-step process.Step I: The land contract, which endures until step II.Step II: The closing, where the deed becomes our operative document. (conveyance)

I. The land contract1) The land contract and SOF:

i) Requirements i. Writing

ii. signed by the party to be bound (include parties names)iii. describe the landiv. state some consideration (price)

26

PROPERTY Exception to SOF: PART PERFORMANCE: if two of the following three, the doctrine is satisfied

and equity will decree specific performance of an oral contract for the sale of land (proves up existence of K)

a) Buyer takes possession of the land..

b) Buyer remits all or part(most of) of the purchase price and/or

c) Buyer makes substantial improvements on the property.

Note: When the amount of land recited in the land contract is more than the actual size of the parcel: Specific Performance with a pro rata reduction in purchase price.

2) The problem of risk of loss:

Apply the doctrine of equitable conversion: Equity regards as done that which ought to be done.

Thus, in equity, once the contract is signed, Buyer is owner of the land subject of course to the condition that he pay the purchase price at closing.

o Risk of Loss : Destruction. If, in the interim between contract and closing, Blackacre is destroyed through no fault of either party, buyer bears the risk of loss (unless K says otherwise)

Death of Party before closing: Seller dies, Buyer pays Seller’s estate gets title (S’s interest is in personal property) Buyer dies, Seller delivers title to buyer’s estate, B’s interest is in real property

3) Two Implied Promises in every land contract:a) Seller promises to provide marketable title at the closing. ***

i) Marketable Title Standard: Title free from reasonable doubt (i.e. free from lawsuits and the threat of litigation). Satisfy by: proof of title, title free of encumbrances, valid legal title at closing

ii) Three circumstances will render title unmarketable:

1. Adverse possession: If even a portion of the title rests on adverse possession, it is unmarketable. Seller must be able to provide good record title (marketable = good record title).

2. Encumbrances: Marketable title means unencumbered fee simple. Thus, servitudes (easements, covenants and equitable servitudes) and mortgages render title unmarketable, unless Buyer has waived them in the land sale contract. If disclose than ok.

Note: Seller has the right to satisfy an outstanding mortgage or lien at the closing, with the proceeds of the sale. Thus, buyer cannot claim title is unmarketable b/c it is subject to a mortgage prior to closing, so long as the parties understand that the closing will result in the mortgage being satisfied or discharged.

27

PROPERTY

3. Zoning violations: Title is unmarketable if the property VIOLATES a zoning ordinance (not building or safety codes). However, the mere presence of a zoning ordinance does not render property unmarketable

b) Material Misrepresentation: Seller promises not to make any false statements of material fact: The majority of states now also hold seller liable for failing to disclose LATENT material

defects. Seller is responsible for material lies and material omissions.o Disclaimers: If the contract contains a general disclaimer of liability (for

example, "property sold as is" or "with all faults"): The disclaimer will not excuse seller for liability for fraud or failure to disclose.

4) The land contract contains no implied warranties of fitness or habitability. The common law norm is: caveat emptor (let the buyer beware)

BUILDER/VENDOR Exception: The implied warranty of fitness and workmanlike construction applies to the sale of a NEW home by a builder/vendor.

o Remedies for Buyer for non marketable title: Buyer notify seller of defect, give reasonable time to cure (even if postpone closing) If seller cant cure in reasonable time:

Recission Sue for damages Specific performance with deduction in price

If buyer closing without cure, no recourse on K, actions must be based on deedo If not close on time, 2 month leewayo Liquidated damages 10% of K value oko At CL, while seller has no obligation to disclose any defects to buyer, S must not actively disclose. If S is

builder-seller than implied warranty of fitness (for residential)

II. The Closing Our controlling document is now the deed. The deed passes legal title from seller to buyer. Dead must be “LEAD”: Lawfully Executed And Delivered. (LEAD)

1) Lawful execution of a deedi) The standard: The deed must be in writing, signed by the grantor.

Note: The deed need not recite consideration, nor must consideration pass to make a deed valid.

ii) The description of the land: The law requires only an unambiguous description and a good lead (i.e. lead doesn’t have to be perfect)(being able to ID property) (can use parol evidence) (void for vagueness)

good lead = you can research and discern what “all of O’s land” is.

2) Delivery Requirement:

i) The delivery requirement could be satisfied when granter physically or manually transfers the deed to the grantee.

It is permissible here to use mail, agent, or messenger.

28

PROPERTYii) However, delivery does not necessarily require actual physical transfer of the instrument itself

Recordation is prima facie evidence of delivery The standard for delivery is a legal standard, and is a test solely of present intent. Ask: Did

grantor have the present intent to be immediately bound to the conveyance of either a present or future interest irrespective of whether or not the deed has been literally handed over. (can use parol evidence)

iii) Recipient's express rejection of the deed defeats delivery.

iv) Oral Conditions Drop-Out: If a deed, absolute on its face, is transferred to grantee with an oral condition, it drops out because it is not provable and delivery is deemed accomplished.

v) Delivery by escrow is permissible .Grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deed be delivered to grantee once certain conditions are met. Once the conditions are met title passes automatically to grantee. (ex: delivery conditioned on purchase price)

The advantage of escrow: If grantor dies or becomes incompetent or is otherwise unavailable before the express conditions are met title will still pass to the grantee once the conditions are met.

Acceptance implied unless facts show otherwise. No consideration for deed

3) Three Types of Deeds: Covenants for title

a) Quitclaim: Contains NO covenants Grantor isn't even promising good title to convey. This is the worst deed buyer could hope for.

But the seller/grantor does implicitly promise nonetheless (in the land K) to provide marketable title at closing. (This modifies the harshness of a quitclaim. If there is a post closing problem, the grantor is off the hook, the promise is very short lived

b) General Warranty Deed: Warrants against ALL defects in title, including those defects attributable to the grantor’s predecessors in interest. (The best deed a buyer could hope for.)

1. seisin (present covenant)2. right to convey (present covenant)3. against encumbrances (present covenant)4. quiet enjoyment (future)5. warranty (future)6. further assurances (future)

The general warranty deed typically contains all six of the following covenants. The first three are present covenants meaning if a present covenant is breached, if ever, at the time the deed is delivery.

29

PROPERTYThus, the statute of limitations for breach of a present covenant begins to run at the instant time of delivery.

i) Covenant of seisin: grantor promises that he owns the estate that he how claims to convey. (One is vested with seisin when one has title)

ii) Covenant of right to convey: grantor promises that he has the power to convey. (No temporary restraints or disability on the power/capacity to convey/sell)

iii) Covenant against encumbrances: grantor promises that there are NO servitudes or mortgages/liens on the land. (unless previously disclosed)

The next three covenants are future covenants, meaning: a future covenant is not breached, if ever, until grantee is disturbed in possession. Thus, the statute of limitations for breach of a future covenant will not begin to run until the future disturbance occurs. (runs with the land) (limit damages to purchase price by warrantor, plus incidental)

iv) Covenant for quiet enjoyment: grantor promises that grantee will not be disturbed in possession by a 3rd party’s lawful (superior) claim of title (i.e. I promise there’s no double dealing)

v) Covenant of warranty: grantor promises to defend grantee if there are any lawful claims of title asserted by others.

vi) Covenant for further assurances: grantor promises to do whatever future acts are reasonably necessary to perfect the title if it later turns out to be imperfect. (Housekeeping/administrative sort of promise, e.g. signing with the wrong ink and seller promises to fix it if in the future it’s necessary to get the right ink)

c) The statutory special warranty deed:Provided for by statute in many states, this deed contains two promises that grantor makes only on behalf of himself (not his predecessors). (Note: Grantor makes NO representations on behalf of his predecessors in interest).

1) Grantor promises that he has not conveyed this estate to anyone other than grantee (i.e. Grantor is not a double dealer), AND

2) Grantor promises that the estate is free from encumbrances made by the grantor.

Estoppel by deed doctrine: pg 90 handoutConveyancing by will: pg 91Ownership interest in trust

THE RECORDING SYSTEMRemember Two Brightline Rules:

1) If B is a BONA FIDE PURCHASER, and we are in a NOTICE jurisdiction, B wins, regardless of whether or not she records before A does.

30

PROPERTY2) If B is a BONA FIDE PURCHASER and we are in a RACE-NOTICE jurisdiction, B wins only if she records

properly before A does.

3) CL: first person to have it conveyed wins. First in time first in writing. (default)

The Recording Act protects only bona fide purchasers and mortgagees (creditors)

A bona fide purchaser is one who:i) Purchases for value (out of pocket, more than mere peppercorn), andii) Without Notice that someone else has title to the land.

Two routine value questions:

1) Bargain basement sale = OK.

Example 68: B paid $50,000 cash for Blackacre, when its fair market value is estimated at $100,000. Is B a purchaser for value? YES, as long as Buyer remits substantial pecuniary consideration.

2) Doomed done = Recording statutes do NOT protect donees , heirs , or devisees (not BFP)

The three forms of notice that a buyer may (imputed) potentially be charged with are:

i) Actual notice: prior to Buyer’s closing, Buyer get literal knowledge of a previous owner.

ii) Inquiry notice: a Buyer is on inquiry notice of whatever an exam of the land would reveal.a. Whether he looks or not, Buyer is on inquiry notice.

1. The buyer of real estate has a duty to inspect the premises before transfer of title, to see, for example, whether anyone else is in possession or uses.

i. If another is in possession, Buyer is charged with inquiry notice, regardless of whether buyer actually bothered to inspect or not.

2. If a recorded instrument makes reference to an unrecorded transaction, grantee is on inquiry notice of whatever a reasonable follow-up would have revealed.

iii) Record notice: B is on record notice of A's deed if at the time B takes, A’s deed is properly recorded within the direct chain of title.

NOTE: To give record notice to subsequent takers, the deed must be recorded properly, within the direct chain of title.

Chain of title refers to that sequence of recorded documents capable of giving record notice to later takers.

o Grantor/grantee index = most states Searcher looks back in time and then forward in time to see if any

grantor conveyed an interest to someone outside of the backward chain.

o Tract Index jurisdiction = searcher looks at the page indexed by block and/or lot describing the property and any instruments affecting it

o Have to go back 30-60 years to construct the chain of titleo Legal blinders, only search under grantor during time ownership (period of

record ownership)31

PROPERTY Watch out for deeds recorded to late but before a third transfer (pg

101 of handout)o Note three discrete chain of title problems:

Shelter Rule : One who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against.

o "steps into the shoes" of the BFP even if not a BFP himself designed to protect B, the BFP, (to make B’s life easier) by allowing

BFPs to transfer title to others. Wild Deeds : If a deed, entered on the record (A to B), has an original grantor

unconnected to the chain of title (O to A), the deed is a wild deed. It is incapable of giving record notice of its existence.

o It is incapable of giving record notice of its existence. The A to B deed, although recorded, is NOT recorded properly b/c it’s

not connected to the larger chain of title, because it is contains a missing grantor, the O to A link is missing from the public records.

If the initial grantor, O then sells the same property to C. C cannot be on record notice because A never recorded the O-to-A deed. Assuming that C has no actual or inquiry knowledge of the O-to-A or A-to-B conveyance and C records . . .

C wins, in both a notice and race-notice state. o C wins in a notice state because at the time C takes she

is a BFP. o C wins in a race-notice state because she is BFP who

recorded first. (B’s recording is a nullity because B recorded a wild deed).

Estoppel By Deed : One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires the interest that he previously transferred.

The Recording Statutes:

1) The Notice Statute: (LAST BFP WINS!!) "A conveyance of an interest in land (that’s O to A) shall not be valid against any subsequent

purchaser for value (Buyer), without notice (Buyer)(or “in good faith”) thereof, unless the conveyance (A) is recorded."

If, at the time B takes, he is a BFP, he wins. It won't matter that A may ultimately record first, before B does. It won't matter, in the A vs. B contest, that B never records as long as he was a BFP. But he should record in case a C comes along later.

4) The Race Notice Statute: (BFP who records FIRST wins)a. "Any conveyance of an interest in land (that’s O to A) shall not be valid against any subsequent

purchaser for value (B), without notice (B) thereof, whose conveyance is first recorded” (these last 5 words denote the RN jdx)

To prevail, B must 1) be a BFP and B must 2) be first to record.

Judgment creditors are not protected by recording statutes

32

PROPERTYMORTGAGES

Our model: C, a creditor, is thinking of lending O $50,000. O offers Blackacre as collateral.

1) Legal MortgageA mortgage is the conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a monetary obligation.

The mortgage typically must be in writing to satisfy the Statute of Frauds. This is the legal mortgage. A legal mortgage is evidenced by a writing.

A mortgage is the union of two elements:i) A debt, plusii) A voluntary transfer of a security interest (lien) in the debtor’s land to secure the debt.

By way of vocabulary: debtor = mortgagor, and creditor (lender) = mortgagee. A mortgage can also be called a “note”, “security interest in land”, “mortgage deed”, “deed of trust”, or “sale-leaseback with option to repurchase”.

Land sale contract is slightly different, seller has title until full payment of loan. Forfeiture clause: if a debtor misses a payment, the seller keeps prior payments and can retake property. If enforce forfeiture clause, cant sue for damages too.

2) Equitable mortgage: The parties understand that Blackacre is the collateral for the debt. However, instead of executing a note or mortgage deed, O hands Creditor a deed to Blackacre that is absolute on its face. This is called an equitable mortgage.

Parol Evidence: As between O and Creditor parol evidence is freely admissible to show the parties true intent.

What if Creditor proceeds to sell Blackacre to bona fide purchaser X? X owns the land. O’s only recourse is to sue Creditor for fraud and recover the proceeds of the sale.

3) Parties Rights under the Mortgage (both legal and equitable) Unless and until foreclosure

o debtor-mortgagor has: Title and the right of possession.o Creditor-mortgagee has: lien (the right to look to the land if there is a default

4) All parties to a mortgage can transfer their interests. Mortgagor’s (grantors) transfer of property

o Wheenver the grantor transfers title to the property, the grantee auto take the property subject to the mortgage.

o Grantee no personally liable on mortgage unless the grantee specifically assumes the mortgage.

The mortgage automatically follows: a properly transferred note. o The creditor/mortgagee can transfer his interest by:

Endorsing the note and delivering it to the transferee, or Executing a separate document of assignment.

o If the note is endorsed and delivered, the transferee is eligible to become a holder-in-due-course.

33

PROPERTY This means that he takes the note free of any personal defenses that could have

been raised against the original mortgagee. o Personal defenses include: lack of consideration, fraud in the

inducement, unconscionability, waiver, and estoppel. Thus, the holder in due course may foreclose the mortgage despite any

personal defense.o By contrast, the holder in due course is still subject to real

defenses that the maker might raise.MA: Material Alteration D: DuressF: Fraud in the Factum (a lie about the instrument) I: IncapacityI: IllegalityI: InfancyI: Insolvency

To be a holder in due course of the note, the following criteria must be met:a) the note must be negotiable, made payable to the named mortgagee;b) the original note must be endorsed, signed by the named mortgagee;c) the original note must be delivered to the transferee. A photocopy is unacceptable; d) the transferee must take the note in good faith without notice of any illegality; ande) the transferee must pay value for the note, meaning, some amount that is more

than nominal.

RECORDING STATUTES PROTECT MORTGAGEESRULE: All recording statues apply to mortgages as well as deeds.

ii) If O, our debtor/mortgagor, sells Blackacre, which is now mortgaged, the lien remains on the land so long as the mortgage instrument has been properly recorded .

iii) Who is personally liable on the debt if O, our debtor/mortgagor, sells Blackacre to B?

If B has "assumed the mortgage": Both O and B are personally liable. B is primarily liable, O remains secondarily liable.

If B takes "subject to the mortgage": B assumes NO personal liability. Only O is personally liable. But if recorded the mortgage remains on the land. Thus if O does not repay the mortgage, the mortgage may be foreclosed on the land.

5) Foreclosure:Assuming that our mortgagee/creditor must look to the land for satisfaction, how must he or she proceed? The mortgagee must foreclose by proper judicial proceeding. At foreclosure, the land is sold. The sale proceeds go to satisfying the debt.

What if the proceeds from the sale of Blackacre are less than the amount owed? The mortgagee can bring a personal action against the debt for a deficiency judgment.

34

PROPERTYBy contrast, what if there is a surplus? Junior liens (creditors with lesser priority) are paid off in the order of their priority. Any remaining surplus goes back to the debtor.

Off the top: 1) atty’s fees, 2) expenses from foreclosure, and 3) interest on First Bank’s lien/mortgage.

The sale proceeds are then used to pay off the mortgages in the order of their priority. Each claimant is entitled to satisfaction in full before a subordinated (junior) lienholder may take.

6) Effect of Foreclosure on various interests: (Note that recording statute violations can change a creditors chronological status and interest!)

i) Foreclosure will terminate interests junior to the mortgage being foreclosed but will not affect senior interests. (interests include easements, leases, liens…)

This means that junior lienholders will be paid in descending order with the proceeds from the sale, assuming funds are leftover after full satisfaction of superior claims. Junior lienholders should be able to proceed for a deficiency judgment.

o But once foreclosure of a superior claim has occurred, with the proceeds distributed appropriately, junior lienholders can no longer look to Blackacre itself for satisfaction.

o Junior interests can pay off mortgage to keep their interest from being wiped out Necessary Parties to a foreclosure must be joined to the action

o Those with interests subordinate to those of the foreclosing party o The debtor-mortgagor particularly if creditor wishes to proceed against debtor

for a personal deficiency judgment.o Failure to include a necessary party (is BAD b/c it) results in the preservation of

that party's claim, despite the foreclosure and sale. Thus, if a necessary party is not joined, his mortgage will remain on the

land. ii) Foreclosure does not affect any interest senior to the mortgage being foreclosed. The buyer at the sale takes subject to such interest. This means that buyer is NOT personally liable on the senior debt, but as a practical matter, if the senior mortgage is not paid, sooner or later, the senior creditor will foreclose against the land

7) Priorities:

i) Recording Required: As a creditor, you must record. Until you properly record your mortgage you have NO priority.

ii) Priority: Once recorded, priority is determined by the norm of first in time, first in right.

iii) Purchase Money Mortgage: (Superpriority) a mortgage given to secure a loan that enables the debtor to acquire the encumbered land has first priority as to parcel he financed. PMM given to seller gets priority to PPM given to 3rd party lendor (ie bank)

The purchase money mortgagee's "superpriority" = Can trump an earlier creditor in time

35

PROPERTY Example 80: C1 lends $200,000 to O, taking a security interest in all of O's real estate holdings,

"whether now owned or hereafter acquired." This clause is called “after acquired collateral clause.” It is permissible.

o C1 then records the mortgage note. Six months later, C2 lends O $50,000 to enable O to acquire a parcel known

as Blueacre, taking back a security interest in Blueacre and recording that interest. Subsequently, O defaults on all outstanding obligations. All that he has left is Blueacre.

C2, the purchase money mortgagee, has first priority AS TO THE PARCEL IT FINANCED.

iv) Subordination agreements (legal/permissible): By private agreement, a senior creditor may agree to subordinate its priority to a junior creditor. v) Change in senior mortgage: lose seniority to the extent of the change (ie, borrow more from bank later, this later mortgage doesn’t get the senior priority)

8) Redemption:i) Redemption in equity: At any time prior to the foreclosure sale, debtor has the right to redeem the land and free it of the mortgage

Once a valid foreclosure has taken place the right to equitable redemption is gone/cut-off.

o Exercising Equitable Redemption Right: Pay off the missed payment + interest + costs.

If mortgage or note contained an acceleration clause, the FULL BALANCE (not just the missed payments) + accrued interest + costs must be paid to redeem.

An acceleration clause permits the mortgagee to declare the full balance due in the event of default (bad news for a debtor).

Debtor/mortgagor CANNOT waive the right to redeem in the mortgage itself, can waive later with separate consideration

ii) Statutory redemption: Recognized in 50% of states, statutory redemption gives the debtor-mortgagor a statutory right to redeem for some fixed period after the foreclosure sale has occurred (typically six months to one year).

Applies only after foreclosure has occurred. The amount to be paid is usually the foreclosure sale price (rather than the amt of the

original price). Possession of Land: mortgagor will have the right to possession of the encumbered land

during the statutory period. Effect of Statutory Redemption: W nullifies the foreclosure sale .

A seller of a of a fixture who provides a purchase money security interest in the chattel must make a UCC article 9 fixutre filing within 20 days after the attachment of the fixture. Otherwise security interest is subordinate

LATERAL SUPPORT

36

PROPERTY Landower has the right to have her land supported by adjoining landowners and strict liability results if

the land is not supported Two ways a land owner is liable when adjacent property damaged by land owner’s excavations

o Negligence Standard: If the Landowner's excavation causes improved land (ie add a barn) to cave in, the excavator will be liable ONLY IF he acted negligently.

o Strict liability if adjacent improved land would have collapse even in its natural state. Subjacent support: surgace owners have the right to have their land supported from the bottom and

strict liability will result if the land is not supported. Scope: land and improvements that were existing on the land when the mineral rights were severed.

WATER RIGHTS

I. Watercourses: The two major systems for determining the allocation of water in watercourses, such as streams, rivers, and lakes:

1) Riparian doctrine: The water belongs to those who own the land bordering the water course (lake or stream).

These people are known as riparians, who share the right reasonable use of the water. Thus, one riparian will be liable if his or her use unreasonably interferes with other’s use.

Accretion: the increase of land by the slow and imperceptible change in course of a river serving as a boundary and resulting in deposits of soil belongs to the owner of the abutting land.

Avulsion: sudden and perceptible loss or addition to land by the change in course of a river does not change property rights.

2) Prior appropriation doctrine:The water belongs initially to the state, but the right to divert it and use it can be acquired by: by an individual regardless of whether or not he happens to be riparian.

PriorityRights are determined by: priority of beneficial use. The norm for allocation is first in time, first in right.

o Thus, a person can acquire the right to divert and use water from a watercourse merely by being the first to do so.

Any productive or beneficial use of the water, including use for agriculture is sufficient to create the appropriation right.

II. Groundwater (aka percolating water): Water beneath the surface of the earth that is not confined to a known channel.

Absolute Ownership Doctrine: overlying owner may extract as much water as he wishes and use it for whatever purpose he desires.

Reasonable Use Doctrine: The surface owner is entitled to make reasonable use of ground water. However, the use must NOT be wasteful.

o Owners can use all of the water for any purpose 37

PROPERTYo Exporting only allowed if does not harm other owners who have rights in same

aquifier

III. Surface Waters: Those which come from rain, springs or melting snow, and which have not yet reached a natural watercourse or basin.

The common enemy rule : surface water is considered a nemesis. A landowner may change drainage or make any other changes/improvements on his land to

combat the flow of surface water. o Many courts have modified the common enemy rule to prohibit unnecessary harm

to other’s land. Natural Flow Theory: owner can’t alter natural drainage patterns Reasonable Use Theory: balance utility of the use against gravity of harm

POSSESSOR'S RIGHTS (not mentioned in lecture)

The possessor of land has the right to be free from trespass and nuisance.

1. Trespass : the invasion of land by tangible, physical object. i. Removal of Trespasser bring an action for ejectment (COA).

2. Private nuisance : the substantial and unreasonable interference with another’s use and enjoyment of land.

i. Unlike trespass, nuisance doesn’t require tangible/physical invasion. ii. Thus, odors & noise can give rise to a nuisance, but not a trespass.

3. The fact of land use before another’s use is relevant but no conclusive evidence of reasonableness of the use of land.

4. Nuisance and the hypersensitive plaintiff: No nuisance it the problem is the result of the plaintiff’s supersensitivity or special use.

EMINENT DOMAIN

1) Defined: Government's 5th Amendment power to take private property for public use in exchange for just compensation.

2) Explicit takings: overt acts of governmental condemnation. For example, the government condemns your land to make way for a public highway.

3) Implicit or regulatory takings: a governmental regulation that, although not intended to be a taking, has the same effect = an economic wipeout of your investment.

4) Remedy for a regulatory taking: Gov must either:i) Give the owner just compensation for the taking, orii) Terminate the regulation & pay for damages that occurred while the regulation was in effect.

ZONING

1) Defined: Pursuant to its Police powers, Government may enact statutes to reasonably control land use. 38

PROPERTY

2) Variance: The principal means to achieve flexibility in zoning is to get permission from the zoning board to depart from laws by showing:

(1) Undue hardship; AND(2) That the variance will not work detriment (decrease) to surrounding property values

3) Nonconforming Use: A once lawful, existing use now deemed nonconforming by a new zoning ordinance. It cannot be eliminated all at once by the government unless just compensation is provided. Otherwise, it could be deemed an unconstitutional taking.

4) Unconstitutional exactions: Exactions = those amenities Gov seeks in exchange for granting permission to build.

o To pass constitutional scrutiny, these exactions must reasonably related both in nature and scope to the impact of the proposed development.

39