Uploaded by Ana Rosic

Property Law – Bar Exam Outline (following Barbri)

Present Possessory Estates
Fee Simple Absolute
 = Absolute ownership of potentially infinite duration of an estate
o Freely alienable, devisable, and descendible
o ‘To A’ is enough to create
 Note: A living person has no heirs (only prospective heirs)
Defeasible Fees
 ‘Defeasible’ = capable of forfeiture
o Courts prefer to avoid forfeiture of estates
o Courts will not find defeasible fee unless clear durational language is used
 Words of mere desire, hope, or intention are insufficient to create
defeasible fee
 E.g. these are FSAs:
 “To A for the purpose of constructing a day care center”;
 “To A with the hope that he becomes a lawyer”;
 “To A with the expectation that the premises will be used as a
hardware store.”
  Absolute restraints on alienation are VOID
o = Absolute ban on power to sell or transfer not linked to any reasonable timelimited purpose
 E.g. O conveys: “To A so long as she does not attempt to sell until the
year ____, when clouds on the title will be resolved.” = OK
 (1) FS Determinable (possibility of reverter)
o = Estate that automatically terminates and reverts to grantor on happening of
stated event
o ‘To A, so long as / during / until / while…’
 Automatic forfeiture if condition violated
 Devisable, descendible, and alienable, but always subject to condition
o Future Interest (FI): Possibility of Reverter
 (2) FS Subject to Condition Subsequent (right of entry)
o = Grantor retains power to terminate estate of grantee upon happening of stated
event (breaking of condition)
 Most states require grantor to expressly reserve right and to expressly
exercise right
o ‘To A, but if X event occurs, grantor reserves right to re-enter and retake.’
 = Clear durational language + clear statement of right of re-entry
 Not automatically terminated, but it can be cut short at grantor’s
prerogative if stated condition occurs
o FI: Right of Entry (Power of Termination)
 Have to take action to exercise
 E.g. file action for ejectment
(3) FS Subject to Executory Interest (shifting exec. interest)
o = Estate that automatically terminates and goes to 3P on happening of stated event
(breaking of condition)
o ‘To A, but if X event occurs, then to B.’
 B takes when A forfeits
o FI: Shifting Executory Interest
Life Estate
 Must be measured in explicit lifetime terms, and never in terms of years
o O conveys: “To A for life.”
o Life Estate Pur Autre Vie – life estate measured by a life other than grantee’s
 E.g. A has LE, conveys to B = B has LE PAV
o Can do anything with property (e.g. lease) but can’t extend beyond LE
 Life Tenant must upkeep property for benefit of next person
 Open Minds Doctrine – LT or Tenant for Years can continue
operating existing activities on property, but can’t start new
 Changed Conditions Doctrine – LT can tear down house that is
 FI: Reversion if held by O / Remainder if held by 3P
 Obligations:
o Life tenant is entitled to all ordinary uses and profits from the land
o Life tenant must not commit waste (terminates LE)
 Voluntary/Affirmative Waste – Actual, overt conduct that causes drop in
 Exploitation of natural resources by LT limited to:
o (i) When necessary for repair/maintenance of land
o (ii) Land is suitable only for such use; or
o (iii) Expressly/impliedly permitted by grantor
 Open Mines Doctrine – LT can continue mining already done on
 Permissive Waste (Neglect) – When land is allowed to fall into disrepair
or life tenant fails to reasonably protect the land
 Life tenant must maintain premises in reasonably good repair:
o (i) Preserve land and structures in reasonable state of repair
o (ii) Pay interest on mortgages
o (iii) Pay ordinary taxes on land, to extent of any income or
profits that she is reaping from land; AND
 If no income or profit, required to pay all ordinary
taxes only to extent of premises’ fair rental value
o (iv) Pay special assessments for public improvements of
short duration
 Ameliorative Waste – Life tenant must not engage in acts that will
enhance property’s value, unless all future interest holders are known and
 MT: Life tenant may alter/demolish existing buildings if:
o (i) Market value of future interests is not diminished, and
o (ii) Either:
 Remaindermen do not object, or
 Substantial and permanent change in neighborhood
conditions has deprived property of reasonable
If land is practically worthless, tenant may seek partition sale
Future Possessory Interests
Future interest = present, legally protected property right
 Any future interest that’s transferable is subject to creditors (involuntary transfer)
Future Interests Capable of Creation in Grantor
 Possibility of Reverter [FSD]
 Right of Entry [FSSCS]
 Reversion [LE]
o = Future interest that arises when grantor conveys less than she owns
 E.g. O, holder of FSA, conveys: “To A for 99 years.”
o Reversionary interests are vested, thus not subject to RAP
Future Interests in Transferees
 Categories:
o Contingent Remainder
o Vested Remainder
o Executory Interest
 Remainder = future interest created in a grantee that may become possessory on natural
expiration of prior estate
o Accompanies present estate (life estate or term of years)
o Cannot follow a fee simple estate bc doesn’t cut off prior taker
 If interest does not follow natural termination, it’s executory
 Contingent Remainder
o Remainder is contingent if:
 (a) It is created in an unascertained or unknown person, OR
 E.g. ‘To A for life, then to B’s first child.’ A is alive. B, as yet, has
no children.
 (b) It is subject to an unmet condition precedent
 E.g. ‘To A for life, then, if B graduates from college, to B,
otherwise to C.’
o B and C have alternative contingent remainders
o Destructibility
 CL: Contingent remainder destroyed if failed to vest before termination of
preceding freehold estate
 O to A for life, then to B is she reaches 21 – if A dies before B is
21, B’s remainder is destroyed
MT: B’s interest converted into executory interest that will divest O’s
reversionary estate
o Merger
 CL: When one person acquires all present and future interests except a
contingent remainder, remainder is destroyed
Vested Remainder
o Remainder is vested when it is created in a known taker who is not subject to a
condition precedent
o Types:
 Indefeasibly Vested Remainder
 Holder is certain to acquire an estate in future, with no conditions
 If remainderman dies before vesting, her future interest passes by
will or intestacy to heirs
 Vested Remainder Subject to Total Divestment (i.e. condition sub)
 Holder’s taking is NOT subject to any condition precedent but
right to possession could be cut short because of a condition
o 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
 E.g. O conveys: “To A for life, then to B, {provided, however, that
if B dies under the age of 25,} to C.” / A is alive. B is 20 years old.
o B 20 takes when A dies, goes to C if B dies before 25
o After 25, estate retains interests and B’s heirs will inherit,
otherwise C and heirs will take
 Vested Remainder Subject to Open (i.e. class)
 Vested in a group of takers, at least one of whom is qualified to
take possession
o Each member’s share could get smaller because additional
takers, not yet ascertained, can still join class
o Class member who predeceases grantor no longer takes
 Rule of Convenience – Class closes whenever any member can
demand possession
o E.g. “To A for life, then to B’s children.” A is alive. B has
two children, C and D. Class closes at sooner of B’s death
or A’s death—after either event, C and D can now demand
 Womb Rule – child in womb at time of closing is
part of class
 If C or D die, their interest go to devisees/heirs
Executory Interest
o Future interest created in a transferee (3P), which is not a remainder because it
takes effect by either (a) cutting short some interest in another person (shifting) or
(b) in grantor or his heirs (springing)
o Shifting Executory Interest – always follows a defeasible fee and cuts short
someone other than grantor
 E.g. “To A, but if B returns from Canada, to B and his heirs.”
o Springing Executory Interest – cuts short interest of grantor
 E.g. “To A, if and when she becomes a lawyer.” A is in high school.
o NOTE: Remainders never follow defeasible fees
Trust = fiduciary relationship with respect to specific property where trustee holds legal title
subject to enforceable equitable rights in a beneficiary
 Settlor must have (1) owned property at time of trust creation, and (2) intended to create
 RAP applies to equitable future interests of beneficiaries
 All trusts of real property must be in writing
 Charitable trusts:
o Must have indefinite beneficiaries
o May be perpetual (RAP does not apply)
 RAP does apply when shift from private to charitable, or vice-versa
o Cy pres doctrine applies
Rule Against Perpetuities
Certain kinds of future interests are void if there is any possibility, however remote, that the
given interest could vest > 21 years after death of a measuring life
Assessment of RAP
 (1) Is this future interest subject to RAP?
o RAP applies only to contingent remainders, executory interests, and certain vested
remainders subject to open
 Does NOT apply to future interests created in grantor
 (Possibility of reverter, right of re-entry, and reversion)
 Does NOT apply to indefeasibly vested remainders or to vested
remainders subject to complete defeasance
 DOES apply to rights of first refusal/options
 (2) What has to happen for future interest holder to take?
 (3) Find person alive then whose life and/or death is relevant to what has to happen for
future interest holder to take
 (4) Will we know for sure within 21 years of death of the measuring life if future interest
holder(s) can take?
CL Rule
 = Executory interest with no limit on time within which it must vest violates RAP
o E.g. “To A and his heirs so long as land is used for farm purposes, and if land
ceases to be so used, to B and his heirs.”
Fertile Octogenarian
o Woman is presumed to be capable of carrying children at any point in her life
 E.g. A is 80 years old. O ‘to A for life, then to A’s children for life, then to
A’s grandchildren’
Unborn Widow/er and ‘Issue’
o Person’s widow/er is not determined until death, so it may be someone not in
being at time of deposition – gift to A's issue does not vest until his widow dies,
and that could theoretically happen more than 21 years after death of all lives in
being at time of the transfer
 E.g. O ‘to A for life, then to A’s widow for life, then to A’s surviving
 Remainder to A’s ‘children’ would be valid bc determined at A’s
Administrative Contingency
o Gift conditioned on administrative contingency (e.g. admission of will to probate)
is invalid
Application to Class Gifts
o Bad as to One, Bad as to All
 If interest of any class member may vest too remotely, whole class gift
o Subclasses
 Each gift to a subclass may be treated as separate gift under RAP
o Per Capita Gift Exception
 Gift of fixed amount to each member of class is not treated as class gift
(each one is treated separately under RAP)
Reform of RAP
 ‘Wait and See’ Doctrine
o Validity of suspect future interest is determined on basis of facts as they now
exist, at conclusion of our measuring life
 Uniform Statutory RAP (USRAP)
o Codifies CL RAP and, in addition, provides for alternative 90-year vesting period
 Cy Pres Doctrine
o Court may reform violations in way that most closely matches grantor’s intent,
while still complying with RAP
o  Both reform measures apply cy pres
Adverse Possession
= Possession for a statutorily prescribed period of time can, if certain elements are met, ripen into
Elements [AN ECHO]
o Possession of a portion of a unitary tract is sufficient AP of whole if there is a
reasonable proportion between part actually possessed and the whole, and if the
possessor has color of title
 E.g. parcel of land with gravel road between northern woods and southern
farm ≠ unitary, need to openly possess both
o Only minority of states require AP to pay property taxes
Exclusive – Owner not using
Continuous – Uninterrupted for statutory period
Hostile – No consent to be there
o Possessor’s subjective state of mind is irrelevant (knew she was trespassing)
o Claim of Right – still AP even if possessor enters under claim of right (= they
reasonably believe property belongs to them)
 Invalid deed = hostile
Open [and Notorious] – Sort of possession usual owner would make
 One adverse possessor may tack on to her time with land her predecessor’s time, so long
as there is privity between them
o Privity = any non-hostile nexus, such as K, deed, or will
 NOT Ouster = when possessor acquires possession by ousting his
predecessor in possession
 SOL will not run against a true owner who is afflicted by a disability at start of AP
o E.g. Insanity, infancy, imprisonment
 E.g. O owned Blackacre in 1990 when A entered adversely. In 2000, O went into a coma.
In 2010, O recovered. Our jurisdiction has a 20-year SOL = 2010 A owns Blackacre
Covenants in True Owner’s Deed
 If adverse possessor used land in violation of restrictive covenant, she takes free of
 If her use complies, she takes subject to restriction
Concurrent Estates
(1) Joint Tenancy (w/ right of survivorship)
 = 2+ own equal share with right of survivorship
o Dead tenant’s share goes automatically to surviving tenant
 Alienable: JT’s interest is alienable inter vivos (but severs JT)
 Not Devisable or Descendible: Joint tenant’s interest is neither devisable nor descendible
bc of ROS
o One party can get mortgage on their half-interest
 Lien theory means no severance, Title theory means severance
A co-tenant must sign mortgage to be subject to it
o CL: 4 Unities [T-TIP]
 Same Time
 Same Title (same deed, will, etc.)
 Identical interests/shares
 Rights to Possess the whole
 Each tenant holds 1/[] share + right to possess whole
o MT: Clear Expression of Right of Survivorship
 “To A and B as joint tenants with the right of survivorship.”
o Death
o Unilateral Sale/Conveyance – JT may sell/transfer, even without other’s
knowledge or consent
 Buyer is tenant in common, remaining tenants are still JTs
 Creditor may levy on one tenant’s interest
o Partition
 By Voluntary Agreement – Allowable and peaceful way to end
 In Kind – Judicial action for physical division of property, if in best
interests of all parties
 E.g. when BA is large tract of land susceptible to physical division
 Forced Sale – judicial action when, in best interests of all parties, land is
sold and proceeds are divided up proportionately
 E.g. when BA is home or single building
o Min: Title Theory – If one JT mortgages interest in JT, JT is severed
o Maj: Lien Theory – JT intact as long as tenant pays mortgage
(2) Tenancy by the Entirety
 = Protected marital interest between spouses with right of survivorship
o Take as fictitious ‘one person’
o In states that recognize, it arises presumptively in any conveyance to married
partners unless express language of grant
o Highly protected
 Creditors of only one spouse cannot touch this tenancy for satisfaction of debt
 One spouse, acting alone, cannot defeat right of survivorship by unilaterally conveying to
a third party
(3) Tenancy in Common
 2+ own without right of survivorship
o Each co-tenant owns an individual part, and each has a right to possess the whole
o Each interest is devisable, descendible, and alienable
 * 2 parties without equal shares = TIC
Rights and Duties of Co-Tenants
 Possession
o If one co-tenant wrongfully excludes another co-tenant from possession of the
whole or any part, he has committed ouster (actionable wrong)
Rent from Co-Tenant in Exclusive Possession
o Absent ouster, a co-tenant in exclusive possession is not liable to the other cotenants for rent
Rent from 3Ps
o Co-tenant who leases all or part of premises to a 3P must account to his cotenants, providing them their fair share of rental income
o Unless he has ousted other co-tenant, cotenant in exclusive possession for
statutory AP period cannot acquire title to whole to exclusion of other co-tenant
Carrying Costs
o = Taxes and mortgage interest payments
o Each pays her fair share
o Repairing co-tenant enjoys a right to contribution during life of co-tenancy for
reasonable, necessary repairs—provided he gave notice to other co-tenant(s) of
need for repairs
o During life of co-tenancy, there is no right to contribution for ‘improvements’
made by one cotenant
o At partition, improver gets credit equal to value enhancement or deduction to
value diminution
o Co-tenant must not commit waste
o During life of co-tenancy, co-tenant can sue for waste against another co-tenant
 Voluntary
 Permissive
 Ameliorative
o Joint Tenant or Tenant in Common has a right to bring an action for dissolution /
Landlord-Tenant Law
The Four Leasehold (Nonfreehold) Estates
 (1) Tenancy for Years
o For a fixed, determined period of time (e.g. 2 weeks, 3 months 50 years)
 > 1 year must be in writing
o No notice needed to terminate
 (2) Periodic Tenancy
o Lease that continues for successive intervals until L or T give proper notice of
 Continuous until properly terminated
o Creation:
Expressly – ‘to T from month to month’
By Implication
 No mention of duration, but provision is made for the payment of
rent at set intervals
 Oral term of years in violation of SOF creates an implied periodic
tenancy, measured by way rent is tendered
 In a residential lease, if LL elects to hold over tenant who has
wrongfully stayed on past conclusion of original lease, an implied
periodic tenancy arises measured by way rent is now tendered
o Termination
 Notice, usually in writing, must be given to terminate
 CL: At least equal to length of given interval
 Year-to-year or greater = 1 month RST (6 months CL)
 Note: By private agreement, parties may lengthen shorten these CL
prescribed notice provisions
(3) Tenancy at Will
o Tenancy of no fixed period of duration, terminable with reasonable notice
 E.g. “To T for as long as L or T desires.”
o Creation
 Unless parties expressly agree to TAW, payment of regular rent will cause
court to treat it as implied periodic tenancy
o Termination
 In theory, by either party at any time
 Reasonable demand to quit premises is typically required
(4) Tenancy at Sufferance
o Creation
 Holdover Doctrine – T who has wrongfully held over past expiration of
lease creates periodic tenancy, have to pay rent
 Residential T – month-to-month tenancy
 Commercial T – year-to-year tenancy (cannot exceed 1 year SOF)
 EX: No TAS if:
 (i) T remains in possession for only few hours after expiration
 (ii) Delay is not T’s fault (e.g. severe illness)
 (iii) It is a seasonal lease
o Termination
 Until LL either evicts T or elects to hold T to a new tenancy
o If T notified of a rent increase prior to lease expiring, must pay new rent
Tenant’s Duties
 Duty to Repair
o When Lease Is Silent
 T need only maintain premises – make routine repairs, not those due to
ordinary wear and tear
 E.g. T clogs sink = must repair
 E.g. yellowed tiles = need not replace
 T must not commit waste
o Voluntary – T intentionally or negligently damages
o Permissive – T fails to take reasonable steps to protect
premises from damage from elements
o Ameliorative – T alters property and increases value
 Law of Fixtures – the more damage removing a fixture would do,
the more likely T is committing Voluntary Waste
o ‘Fixture’ = a once movable chattel that, by virtue of its
annexation to realty, objectively shows intent to
permanently improve the realty
 E.g. heating systems, custom storm windows,
lighting installations
 Express agreement controls
 T may remove a chattel that she installed so long as
removal does not cause substantial harm to
o Fixtures pass with ownership of land
 If what T installed amounts to a fixture, T can’t
 Trade Fixtures Doctrine – commercial tenant may remove all
trade fixtures prior to lease expiring
o CANNOT remove accessions = structural additions
 E.g. balcony, loft
o Express Covenants
 CL: T was responsible for any loss to property, including loss attributable
to force of nature (e.g. hurricane, earthquake)
 MT: T may end lease when premises are destroyed without T’s fault
Duty to Pay Rent
o Breach by Possessing T
 LL’s only options are:
 (a) Evict through court procedure
o Still entitled to rent until T vacates
o T becomes Tennant at Sufferance
 (b) Continue with relationship and sue for rent due
 LL must not engage in self-help like changing locks, forcibly removing
Ts, removing T’s possessions
 Punishable civilly and criminally
o Breach by T Out of Possession
 E.g. T wrongfully vacates with time left on a term-of-years lease
 Options:
 (a) L chooses to treat T’s abandonment as an implicit offer of
surrender, which L accepts
o T shows she wants to give up lease
 (b) Ignore abandonment and hold T responsible for unpaid rent,
just as if T were still there
o Available only in minority of states
 (c) Re-let premises on and hold wrongdoer-tenant liable for any
o Maj: L must at least try to r-let
In partial condemnation cases, lease and T’s obligation to pay entire rent
for remaining period of lease continue
 T is entitled to share in condemnation award to extent that it
affected her rights under lease
Landlord’s Duties
 Duty to Deliver Possession
o Maj: requires that L put T in actual physical possession of premises
 If at start of T’s lease, a prior holdover T is still in possession, LL has
breach and new T gets damages
 Implied Covenant of Quiet Enjoyment
o Arises by implication in every residential and commercial lease
o  T has right to quiet use and enjoyment of premises without interference from
o Breach:
 By Wrongful Eviction/Exclusion from Premises
 Total actual eviction occurs when LL or a paramount title holder
excludes T from entire leased premises
o Partial eviction by LL relieves T of obligation to pay rent
for entire premises, though T continues in possession of
remainder of premises
o Partial eviction by a paramount title holder results in an
apportionment of rent—tenant is liable for reasonable
rental value of portion that she continues to possess
 By Constructive Eviction
 Elements:
o (1) LL’s actions/failure to take action
o (2) Substantially and materially deprive T of her use and
enjoyment of premises
o (3) T must give LL notice and reasonable time to repair
o (4) T must vacate within reasonable time
 If T is occupying premises despite poor conditions,
it’s not constructive eviction
 T can then terminate lease and sue for damages
o E.g. every time it rains, Dido’s apartment floods. She has a
claim for constructive eviction if 3 elements are met.
 Act of other tenants
o LL is not liable BUT:
 LL must not allow nuisance on site
 LL must control common areas
 Implied Warranty of Habitability
o Applies only to residential leases and not to commercial leases (human habitation)
Premises must be fit for basic human dwelling
Not waivable
If, at time lease is entered into, LL knows of a dangerous condition that T
could not discover upon reasonable inspection, LL has duty to disclose it
 E.g. no heat in winter, no working plumbing, no running water
o T’s Entitlements:
 (a) Move out and end lease, then sue
 (b) Repair and offset cost against future rent
 (c) Reduce rent or withhold all rent until court assess fair rental value
 Typically, T must place withheld rent into escrow to show GF
 (d) Remain and seek damages
Retaliatory Eviction
o If T lawfully reports L for housing code violations, L is barred from penalizing T
(e.g. by raising rent, ending lease, harassing T)
o Ts and potential Ts are protected by Civil Rights Acts (bars racial and ethnic
disc.) and Fair Housing Act (bars disc. against ethnicity, religion, national origin,
gender, disability, families with children)
Transfers of Leasehold
 Assignment vs. Sublease
o Unless prohibited by lease, T may freely transfer her interest in whole (=
assignment) or in part (= sublease)
 L can prohibit T from assigning/subletting without L’s prior written
 But once L consents to one transfer, L waives right to object to future
transfers by that T, unless L expressly reserves right
 Privity of K – Initial T and T2 are liable to LL for rent
 Privity of Estate – Person in possession of estate is in privity of estate with LL
o They are now liable to each other for all of covenants in original lease that run
with the land (e.g. rent/repair)
o Sublease = T1 transfers less than all time left
 LL and sublessee are in neither privity of estate nor privity of K – T2 is
responsible to T1 and vice versa
LL’s Tort Liability
 CL of Caveat Lessee
o ‘Tenant Beware’ – In tort, L was under no duty to make premises safe
o Exceptions [CLAPS]:
 Common Areas
 LL must maintain all common areas
 Latent Defects Rule
 L must warn T only of hidden defects of which L has knowledge
or reason to know
 Duty to warn NOT to repair
 Assumption of Repairs
Once repairs undertaken, LL must complete them with reasonable
Public Use Rule
 L who leases public space (e.g. convention hall or museum), and
who should know that T will not repair (due to significant nature of
defect and short length of lease) is liable for any defects on
Short-Term Lease of Furnished Dwelling
 LL is responsible for any defective condition that proximately
injures T
Easement = grant of a nonpossessory property interest that entitles holder to some form of use or
enjoyment of another’s land
Affirmative – Right to go onto and do something on servient land
 Creation:
o (i) Prescription
 By analogy to adverse possession [NACHO]:
 [Notorious]
 Actual use (need not be exclusive)
 Continuous use for given statutory period
 Hostile use
 Open [and notorious]
o (ii) Implication
 'Quasi-Easement’ – Implied from existing use if:
 (1) Previous use was apparent; AND
 (2) Parties expected that use would survive division because it’s
reasonably necessary to dominant tenement’s use/enjoyment
o (iii) Necessity
 Implied when grantor conveys portion of its land with no way out, except
over some part of grantor’s remaining land
o (iv) Grant
 > 1 year easement must be in writing that complies with formal elements
of deed
 ‘Deed of Easement’
Negative – Entitles holder to prevent servient landowner from doing something that would
otherwise be permissible
 Traditional Categories:
o Light
o Air
o Support
o Stream water from artificial flow
o (Scenic view)
 MT: negative easements = restrictive covenants
 Can only be created expressly, by writing signed by grantor (no natural or automatic
Types of Easements
 Appurtenant to Land
o Benefits its holder in her physical use or enjoyment of her property
 E.g. A grants B a right of way across A’s land, so that B can more easily
reach his land
o Runs with the land
o Need two parcels:
 Dominant tenement – derives benefit
 Passes automatically with dominant tenement, whether or not
mentioned in conveyance
 Servient tenement – bears burden
 Passes automatically with servient estate, unless new owner is BFP
without notice
 In Gross
o Confers upon its holder only some personal or pecuniary advantage that is not
related to her use/enjoyment of her land
 Servient land is burdened, but no dominant tenement
 Not transferable unless for commercial purposes (bc personal to its
o E.g. train tracks / sewer lines / power lines / right to place a billboard on another’s
lot / right to swim in another’s pond
 Determined by terms and conditions that created it
 Use of easement beyond its legal scope = easement is surcharged, and servient owner
may sue to enjoin the use
Termination [END CRAMP]
 Estoppel
o Servient owner materially changes her position in reasonable reliance on
easement holder’s assurances that easement will no longer be enforced
 Necessity
o Expires as soon as necessity ends, unless easement was reduced to express grant
o Holder of servient estate has right to choose location of easement if there are
o Destruction of servient land, other than through willful conduct of servient owner
o Condemnation of servient estate by governmental eminent domain power
o Written release given by easement holder to servient landowner
o Physical action by easement holder showing intent to never use easement again
 Mere nonuse or mere words are insufficient to terminate
 E.g. A has a right of way across B’s parcel. A erects a structure on A’s
parcel that precludes her from ever again reaching B’s parcel.
o Title to easement and title to servient land become vested in same person (unity of
title is achieved)
 Selling parcel that was united does not bring easement back
 E.g. A buys B’s parcel
o Servient owner interferes with easement in accordance with elements of adverse
 Continuous interference, open and notorious, actual, hostile
Licenses & Profits
 = Mere privilege to enter another’s land for some delineated purpose, owner permits
 Creation
o No writing required (not subject to SOF)
 Revocation
o Licenses are freely revocable at will of licensor, even if paid consideration, unless
estoppel applies to bar revocation
 Classic cases:
o Tickets – creates a freely revocable license
o Neighbors talking by fence – beware of seemingly oral easements, more likely
creates freely revocable license
 E.g. A, talking by fence with neighbor B, says, “B, you can have that right
of way across my land” ≠ enforceable, violates SOF
 Estoppel
o Only applies when licensee has invested substantial money or labor or both in
reasonable reliance on license’s continuation
 = Non-possessory interest in land that entitled profit holder to take some resources (e.g.
soil, timber, materials, fish) from servient land
o Appurtenant – Exists to serve dominant estate
 Cannot transfer profit independently of dominant estate
o In Gross – Does not exist to serve dominant estate
 Can be transferred independently
o Same as easements
o Implied in every profit is easement entitled holder to enter servient estate to
remove the resources
o Same as easements
o May be extinguished through surcharge (misuse that overly burdens servient
Restrictive Covenants
Covenant = promise to do/not do something related to land
 Unlike easement because not grant of property interest but a contractual limitation or
promise regarding land
 Negative = restrictive covenant
o E.g. I promise not to have pets
 Positive = affirmative covenant
o E.g. I promise to maintain our common fence
 Covenant vs. Equitable Servitude
o Can be both until you sue
o Remedies different:
 P wants money damages = covenant
 P wants injunction = equitable servitude
Covenants Running with the Land (Binding Successors)
 Covenant runs with land when it is capable of binding successors
o One tract is ‘burdened’ by promise and another is ‘benefited’ – both need to run
o For Burden to run [WITH NV]:
 Writing – Original promise must have been in writing
 Intent – Original parties must have intended C to run
 * Courts are generous
Touch & Concern – Must affect parties as landowners and not simply as
members of community at large
 Horizontal and Vertical Privity – Both are required for burden to run
 HOR – Requires that original parties be in succession of estate, i.e.
they were in a grantor/grantee or LL/T or mortgagor/ mortgagee
relationship when covenant created
o * Hard to establish
o E.g. A bought burdened parcel from B
 VER – Requires some non-hostile nexus, such as: K, devise (will),
or descent (intestacy)
o Absent if A-1 acquired interest by adverse possession
o Full transfer, not leases
 Notice – A-1 must have had notice of promise when she took
o For Benefit to run [WIT V]:
 Writing – Original promise (bw A and B) was in writing
 Intent – Original parties must have intended benefit would run
 Touch & Concern – Promise must affect parties as landowners
 Vertical Privity – Non-hostile nexus between B and B-1
Equitable Servitude
 = Promise that equity will enforce against successors, accompanied by injunction relief
 Creation [WITNES]:
o Writing – Generally, original promise was in writing
o Intent – Original parties intended that promise would be enforceable by and
against assignees
o Touch & Concern – Promise affects parties as landowners
o Notice – Assignees of burdened land had notice of promise when they took
o [ES = Equit. serv.]
 Privity not required
 Running with Land
o Burden
 Touch and Concern
 Intent
 Notice
o Benefit
 Intent
 Touch and Concern
 Implied Equitable Servitude – General/Common Scheme Doctrine
o Court will imply a reciprocal negative servitude (= implied equitable servitude) to
hold unrestricted lot holder to promise
 E.g. A subdivides her land into 50 lots. She sells lots 1 through 45 through
deeds that contain covenants restricting use to residential purposes. A then
sells one of remaining lots to a commercial entity, B, by deed containing
no such covenant. B now seeks to build a convenience store on his lot. = B
can be enjoined
o Elements:
1. When sales began, sub-divider (A) had a general scheme of residential
development which included D’s lot
2. D lot-holder (B) had notice of promise contained in those prior deeds
when it took
 Notice:
o Actual – D actually knew (was told, advice)
o Inquiry – if routine inspection would have revealed
neighborhood conforms to common restriction
o Record – if public record would have advised or restriction
Equitable Defenses to Enforcement
o Unclean Hands
 Person seeking enforcement is violating similar restriction on her own
o Acquiescence
 Benefit party acquiesced in violation of servitude by one burdened party
o Estoppel
 Benefited party acted in such a way that reasonable person would believe
covenant was abandoned or waived
o Laches
 Benefited party fails to bring suit against violator within reasonable time
o Changed Conditions
 Neighborhood has changed so significantly that enforcement would be
inequitable (must be so pervasive that entire area has changed)
 E.g. servitude against commercial, but area has been so infected by
commercialization and your parcel is suffering
 Mere pockets of limited change not enough
o Must go to court in equity to seek release
Purchase & Sale of Real Estate
 Every conveyance of real estate consists of a twostep process:
o Land Contract – conveys equitable title
 Endures until closing
o Closing – where deed passes legal title and becomes operative document
Land Sale Contract
SOF Standard
  K for sale of land must:
o (1) Be in writing
o (2) Signed by D
o (3) Describe land
o (4) Be supported by consideration
Size of land recited in K is more than its actual size
o Remedy = specific performance with pro rata reduction in price
EX: Doctrine of Part Performance
o Equity decrees specific performance if (2/3):
1. B takes possession
2. B pays all or significant part of price
3. B makes substantial improvements
Risk of Loss
 Equitable Conversion = In equity, buyer owns land once land K is signed
o Buyer bears risk of loss/damage to property during escrow period
 Destruction – If Blackacre is destroyed through no fault of either party post-K but preclosing, Buyer bears risk of loss (unless K says otherwise)
Implied Promises in Every Land K
 Seller Will Provide Marketable Title at Closing
o Marketable Title = free from reasonable doubt, free from litigation or threat
 Seller can provide good record title
o Things that render title unmarketable:
 Adverse Possession – if even portion of title rests on AP
 Marketable only after you have filed suit to quiet title
 Encumbrances – title must be unencumbered fee simple
 Servitudes and mortgages render title unmarketable unless Buyer
has waived them
 NOTE: Seller has right to satisfy an outstanding mortgage or lien
at closing using proceeds of sale
o Buyer cannot claim title is unmarketable so long as the
parties understand that closing will result in mortgage being
satisfied or discharged
 Zoning Violations – if premises are in violation of zoning ordinance
 Mere presence of zoning ordinances where located is fine
 Seller Will Not Make False Statements of Material Fact
o Majority of states now also hold seller liable for failing to disclose latent material
o Disclaimer will not excuse seller from liability for fraud
Seller’s Liability for Defective Property
 NO Implied Warranties of Fitness or Habitability
o CL norm = caveat emptor
 Onus is on buyer to be duly diligent
o EX: Implied warranty of fitness and workmanlike construction applies to sale of a
new home by a builder-vendor
 Sale of Existing Land and Buildings
o May be liable for defects like leaky roof, flooding basement, or termites on
several theories:
 Misrepresentation/Fraud – Defects seller knowingly or negligently made
false statement about that buyer relied on and materially affected value
 Active Concealment – Took steps to conceal
 Failure to Disclose – Serious non-apparent defects that seller knew/had
reason to know of that buyer unlikely to discover
 Controlling doc after closing that passes legal title from seller to buyer
o K merges into deed and deed germs control
 Formalities [LEAD] – Lawfully Executed And Delivered
o Writing
 Required
o Description of Land
 Must be unambiguous and provide good lead as to what has been
conveyed (but need not be perfect)
 ‘Good lead’ = With research you can know all
o E.g. O conveys ‘all of O’s land’ = ok
o E.g. O conveys ‘some of O’s land’ ≠ ok
 If mistake or inconsistency in description of property, physical description
takes precedence over quantity unless there are grounds for reformation
 Reformation = equitable action where court rewrites deed to
conform to intention of parties
o Granted when mutual mistake or a scrivener’s error, and
may also be granted when unilateral mistake if there was
o No Consideration
 Need not recite consideration, nor must consideration pass to make a deed
o Delivery
 Can be satisfied when grantor physically/manually transfers deed to
 Can use mail or agent
 But does not require physical transfer of deed
 Legal standard = test solely of present intent
 ASK: Did grantor have present intent to be bound, irrespective of
whether deed was literally handed over to grantee?
 Rejection defeats delivery
 If deed (absolute on its face) is transferred to grantee with an oral
condition  oral consideration is void (bc not provable)
 Delivery by escrow is allowed
Grantor may deliver executed deed to an escrow agent, with
instructions that deed be delivered to grantee once certain
conditions are met
Title passes when conditions met
If grantor dies/incompetent before, title will still pass from escrow
agent to grantee once conditions met
Defective Deeds
o Void deed will be set aside by court even if property passed to BFP
 E.g. forged, not delivered, nonexistent grantee, grantor didn’t know deed
o Voidable deed will be set aside only if property has not passed to BFP
 E.g. executed by minor, mistake, duress, fraud
Delivery and Acceptance
o Deed is not effective unless delivered and accepted
 Title passes on delivery, cannot be cancelled – need new deed to return
o Conditional Delivery
 Deed may provide that title won’t pass until grantor’s death
 Oral conditions to deed absolute on its face are invalid
 Grantor may give to 3P to deliver to grantee when conditions met
Covenants for Title & Types of Deed
 Quitclaim
o Grantor isn’t even promising that he has title to convey
 Contains no covenants
 Worst deed buyer could hope for
 General Warranty Deed
o Warrants against all defects in title, including those attributable to grantor’s
 Best deed buyer could hope for
o Typically contains all following covenants:
 Present Covenants – Breached, if ever, at time deed is delivered (SOL
 Covenant of Seisin – Grantor promises she owns the property
 Covenant of Right to Convey – Grantor has power to transfer
 Covenant Against Encumbrances – No servitudes or liens on
 Future Covenants – Breached, if ever, after grantee is in possession (SOL
 Covenant for Quiet Enjoyment – Grantor promises that grantee
will not be disturbed in possession by 3P’s lawful claim of title
 Covenant of Warranty – Grantor promises to defend grantee
should there be any superior claims of title asserted by others
 Covenant for Further Assurances – Grantor promises to do
what’s needed to perfect grantee’s title if it later turns out to be
 Special Warranty Deed
o Contains same covenants as General Warranty deed, but here grantor makes those
promises only on behalf of itself (i.e. grantor makes no representations on behalf
of its predecessors in interest)
Recording Acts
Case of Dirty Double Dealer – O conveys Blackacre to A. Later, O conveys Blackacre, the same
parcel, to B. O, our double dealer, has skipped town—A vs. B, who wins?
 If no Recording Act = first in time first in right
Recording Acts
 Types of Statutes:
o Race – First to record wins
o Notice – Subsequent BFP wins if paid value and no notice
 ‘A conveyance of an interest in land shall not be valid against any
subsequent purchaser for value, without notice thereof, unless the
conveyance is recorded.’
o Race-Notice – Subsequent BFP who properly records first wins
 ‘A conveyance of an interest in land shall not be valid against any
subsequent purchaser for value, without notice thereof, whose conveyance
is first recorded.’
 Protect (a) BFPs and (b) mortgagees/creditors
o Bona Fide Purchaser is one who:
 (1) Buys for value
 As long as you pay substantial pecuniary value
o E.g. Pay $50k for $100k = BFP
 Doomed Donee: recording statutes do not protect donees, heirs, or
devisees unless Shelter Rule applies
 (2) Without notice that someone else bought first
 Actual – Prior to B’s closing, B learns of A
 Inquiry – B has duty to inspect before closing
o If another has possession (is living there)
o If recorded instrument references an unrecorded
transaction, charged with what reasonable follow up would
have shown
 Record – A’s deed was recorded properly within chain of title
 Does NOT protect against interests that arise by operation of law (e.g. implied easement,
title by AP) bc there’s no instrument to record to perfect such interests
Chain of Title
 Chain of Title = sequence of recorded documents capable of giving record notice to
subsequent takers
o B’s status as subsequent BFP will be defeated if A had promptly and properly
recorded within chain of title before B takes
o Title search of grantor-grantee index
Shelter Rule
o = One who takes from a BFP will prevail against any entity that transferor-BFP
would have prevailed against
 Transferee ‘takes shelter’ in the status of her BFP transferor, and thereby
‘steps into the shoes’ of BFP even though she otherwise fails to meet
requirements of BFP status
 E.g. O to A, who does not record. Later, O to B, a BFP, who
records. B to C, who is a (a) mere donee or (b) who has actual
knowledge of the O-to-A transfer = C wins in every state
o C steps into B’s shoes, and B was a BFP who recorded first
Wild Deed
o = If a recorded deed (A to B), has a grantor unconnected to chain of title (O to A),
it’s a wild deed incapable of giving record notice of its existence
 E.g. O to A, who does not record. A to B. B records the A-to-B deed.
 Deed is not in chain of title because O-A is missing — not
connected to larger chain of title
 E.g. O then to C. C has no actual or inquiry knowledge of the O-to-A or
A-to-B conveyances. C records. = C wins in every state
 C ‘recorded first’ bc wild deed is a nullity
Estoppel by Deed
o = One who conveys realty in which he has no interest (here, X back in 1950), is
estopped from denying validity of that conveyance if he subsequently acquires the
title that he had previously purported to transfer (here, the 1960 O to X sale)
 E.g. 1950 O doesn’t sell to X. X ‘sells’ to A. A records. 1960 O sells to X.
1970 X sells to B.
 A owns 1960-69
 B owns 1970 if BFP in any state (A’s recording is nullity)
o One is entitled to assume that no one sells land until they first own it
Security Interests in Real Estate
 Mortgage
 Deed of Trust
 Installment Land K
o Purchaser obtains legal title only when full price paid off
 Absolute Deed
o Can be treated by court as equitable mortgage
 Sale-Leaseback
o Can be treated by court as equitable mortgage
 Equitable Vendor’s Lien
o Arises by implication of law when seller transfers title to buyer and portion of
price remains unpaid
Mortgage = conveyance of a security interest in land, intended by parties to be collateral for
repayment of a monetary obligation
 Owner of real estate gives lender a lien in that real estate to secure or backup loan that
lender makes
o Creditor = mortgagee, debtor = mortgagor
 Elements:
o Debt – represented by note/mortgage instrument
o Voluntary Transfer of Lien – to collateralize debt
 Types:
o Purchase-Money Mortgage
 Extension of value by lender who takes as collateral a security interest in
the very real estate that its loan enables debtor to acquire
o Non-Purchase-Money Mortgage
 E.g. loan to pay for college with home as collateral
 Writing
o Mortgage usually must be in writing to satisfy SOF = legal mortgage
o Note / mortgage deed / deed of trust / sale leaseback / security interest in land
 Theories of Title
o Lien theory – Mortgagee holds security interest only, mortgagor owns land
o Title theory – Mortgagee has legal title
o Intermediate theory – Mortgagee has legal title
Transfer of Interests
 All parties to a mortgage can transfer their interests
o Transfer by Mortgagee (Creditor)
 Mortgage automatically follows a properly transferred note
o Transfer by Mortgagor (Debtor)
 It remains on land as long as mortgage instrument was properly recorded
 All recording statutes apply to mortgages as well as deeds
o Subsequent buyer takes subject to a properly recorded lien
 Notice – buyer takes subject to lien bc had record
 In a notice state, a subsequent BFP prevails
over a prior grantee or mortgagee who has
not yet recorded properly at time BFP takes
 Race-notice – buyer takes subject to lien bc had
record notice and bank recorded first
o Recording statutes protect mortgagees/creditors
o Personal Liability
 If B has ‘assumed the mortgage,’ both O and B are personally liable – B is
primarily liable, and O remains secondarily liable
 If B takes ‘subject to mortgage,’ B assumes no personal liability – only O
is personally liable
 But, if recorded, mortgage remains on land – if O does not pay,
mortgage may be foreclosed
 Procedure
o In event of default, mortgagee must foreclose by proper judicial proceeding
o At foreclosure, land is sold and sale proceeds go to satisfying debt
 If deficit, creditor brings deficiency action against debtor
 If surplus, junior creditors are paid off, then debtor
o Hierarchy:
 Attorney’s fees and expenses of foreclosure
 Accrued interest on main creditor’s loan
 Mortgages in order of priority
 Each claimant entitled to satisfaction in full before junior
lienholder may take
 Effect on Various Interests
o Junior Interests
 Foreclosure will terminate interests junior to the mortgage being
foreclosed but will not affect senior interests
 Once foreclosure of a superior claim has occurred, junior
lienholders can no longer look to Blackacre for satisfaction
 Necessary party bc juniors have right to pay off senior mortgage to avoid
being wiped out by foreclosure
 If not joined, her claim is preserved and her mortgage will remain
on land
 If mortgagor enters into modification agreement with senior mortgagee,
raising its interest rate or making agreement more burdensome, junior
mortgage will be given priority over modification
 If mortgagor was assuming grantee, original mortgager’s surety
obligation is cut off by modification
o Senior Interests
 Foreclosure does not affect any interest senior to mortgage being
 Buyer at sale takes subject to any senior interests
 Buyer not personally liable on senior debt, but as a practical
matter, if senior mortgage is not paid, sooner or later senior
creditor will foreclose against land
 Thus, foreclosure sale buyer has a strong incentive to pay off First
Bank’s lien
 Priorities
o Creditors must record to have priority
 Once recorded, priority is determined by first-in-time, first-in-right
o Purchase-Money mortgagees have first priority in parcel they financed if they
record properly
 PMM also has priority over Floating Liens
 = O takes security interest in all O’s real estate holdings, “whether
now owned or hereafter acquired.”
 Used when, at inception, loan is under-collateralized
o Subordination Agreements
By private agreement, a senior creditor may agree to subordinate its
priority to a junior creditor
o Right of Redemption
 In Equity
 Debtor can redeem land by paying off mortgage any time prior to
foreclosure sale
 Acceleration clause permits mortgagee to declare full balance due
in event of default
o No AC in note – to redeem, pay off missed payments +
accrued interests and costs
o AC in note – to redeem, debtor must pay off full balance +
accrued interests and costs
 ‘Clogging’ – debtor cannot waive right to redeem
 Statutory
 Mortgagor may recover land after sale, usually by paying
foreclosure sale price
 Half of states provide statutory right to redeem for some fixed
period after sale, usually 6 months - 1 year
Natural Rights
 Land Support
o Landowner has right to have land supported laterally (sides) and subjacently
(below) by neighboring landowners
 If damages caused to manmade structures from removal of
lateral/subjacent support, you have to prove neighbor’s negligence
 Damages caused to natural land = SL
 Water Rights
o Watercourses
 Riparian Doctrine – Water belongs to those who own land bordering
 Natural Flow Theory: can enjoin owner’s use that results in
substantial/material diminution of water’s quantity, quality, or
 Reasonable Use Theory: all riparians share right of reasonable use
of water
o Courts balance utility of owners use against gravity of
harm: alteration of flow, purpose of use, pollution, extent of
use, destination of water taken, misc. conduct that may give
rise to litigation
 Natural v. Artificial Use: natural uses prevail over artificial uses
 Prior Appropriation Doctrine – Appropriative rights determine by priority
of beneficial use
o Groundwater
 Ownership – Owner of overlying land can take all the water she wishes
for any purpose
 Reasonable Use – Ownership doctrine but exporting is allowed only if it
does not harm other owners
 Correlative Rights – Owners of overlying land own underground water
basin as joint tenants
 Appropriate Rights– Priority of use is determinative
 RST – Surface owner may pump ground water unless it unreasonably
harms neighboring landowners, exceeds her reasonable share, or directly
and substantially affect surface water and unreasonably harms surface
water users
o Surface Waters
 Landowner may use surface water within her boundaries for any purpose
she desires
 Natural Flow – owners cannot alter natural drainage patterns
 Common Enemy – owner can take any protective measures to get
rid of the water
 Reasonable Use – balance utility of use against gravity of harm
 = Pursuant to its police powers, government may enact statutes to control land use.
 Variance
o Grants a landowner permission to depart from a zoning restriction
o Proponent must show:
1. Undue hardship
2. Variance won’t diminish neighboring property values
o Variance is granted/denied by administrative action, typically zoning board
 Nonconforming Use
o A once lawful, existing use is now deemed nonconforming by a new zoning
 Cannot be eliminated all at once unless just compensation is paid –
government pays you for what is basically a taking
 Cumulative Zoning
o Types of ordinances:
 Cumulative Zoning Ordinance – Creates a hierarchy of uses of land,
where a single-family home is highest use followed by lesser uses (e.g.
two-family home then apartment building, then strip mall, then factory)
 Land that is zoned for a particular use may be used for that
particular use and for higher use
 Noncumulative Zoning Ordinance – Land may be used only for purpose
for which it is zoned
Condos and HOAs
 Condos
o = Each owns interior of her individual unit plus an undivided interest in exterior
and common elements
 E.g. stairways, front gate
o Owner of each condominium is a member of HOA and pays regular dues
 If fees insufficient to pay necessary expenses (e.g. major roof repair
needed) HOA imposes additional one-time fee = ‘special assessment’
o HOA oversees common elements + passes rules contained in ‘Declaration of
Covenants, Conditions, And Restrictions (CC&R)’
 Package of privately imposed restrictive covenants
 Enforced by board elected by HOA
Conveyance by Will
 Ademption
o If grantor no longer owns gifting well, gift fails at death
o Does not apply to proceeds of land sale contract or casualty insurance proceeds
 Exoneration
o CL: Devisee’s specific property is entitled to have land exonerated by payment of
liens from testator’s residuary estate
 E.g. son inherits dad’s real property, daughter personal property, dad
signed K before death = son can force sale and compel daughter to pay
o MT: Will must expressly provide for payoff
 Lapse & Anti-Lapse
o Lapse = beneficiary dies before testator
 CL: Gift void
 MT: Gift passes to B’s issue (anti-lapse)
 Abatement
o If estate assets can’t pay all claims, gifts are abated (i.e. reduced)