1. WHAT IS PROPERTY
Property – is a legally enforceable right, if you own something you can use it or something you
can protect. Property rights are not absolute. Generally owners possess a bundle of entitlements.
2. CHARACTERISTICS OF PROPERTY (BUNDLE OF STICKS)
A. The right to use the property
B. The right to exclude others from the property
C. The right to transfer title of the property
D. The right to prevent it from being damaged or taken away
3. WHAT IS PROPERTY LAW
Rules that determine ownership, rather it comprises rules that allocate particular entitlements and
define their scope.
I. POSSESSION
A. Acquisition by Discovery
RULE: Discovery gave exclusive title to those who made it and possess it.
Johnson v. M’Intosh,
- The U.S maintained that discovery gave an exclusive right to extinguish the Indian title
of occupancy, either by purchase or conquest; and gave also a right to such a degree of
sovereignty as the circumstances of the people would allow them to exercise.
- Title by conquest is acquired and maintained by force (war or battle for ownership)
- Title by occupancy gives the right to live on the land and to acquire the right to
occupancy is through purchase or conquest.
1. Discovery Principle - was that discovery gave title to the government by whose subjects
or by whose authority it was made, against all other European governments, which title
might be consummated by possession.
2. Conquest – gives a title the courts of the conqueror cannot deny. Title by conquest is
acquired and maintained by force. The conqueror prescribes the limits
3. Title by occupancy – the right to live on the land.
NOTES:
The U.S. had “ultimate dominion” “a power to grant the soil” “absolute title” “complete ultimate
title” “fee title” a “seisin in fee” and “the sole right of acquiring the soil”
The American Indians has “Indian title” “Title of occupancy” and “right to occupancy.” They
did not own the land and did not have the right acquire owner to transfer title.
B. Acquisition by Capture
RULE: The first to occupy, take possession of or capture a wild animal is the owner
Pierson v. Post: (Requires the actual taking of possession or pursuit with the intent of taking
possession or intent to take possession and depriving it of freedom and brought within control)
-
Pursuit alone is not enough to establish ownership of property
Pursuit along with a wounding is still not enough unless the animal be taken
Possession of the corps of a wild animal is enough to establish owner ship
Wounding and in pursuit with the intent of claiming it is enough for possession
Intending to possess for individual use and depriving it of its natural liberty and brought
within certain controls is enough to establish ownership.
DISSENTING Brockholst Livingston: That property in animals ferae naturae may be acquired
without bodily touch or manucaption, provided the pursuer be within reach, or have a reasonable
prospect of taking, what he has thus discovered an intention of converting to his own use.
NOTES:
Constructive Possession – you are treated as if you are the owner with a superior interest (in
possession of property although you do not have physical possession because it lays on your
property) (Ducks on a decoy pond)
RULE: Where an actor undertakes significant but incomplete steps to achieve possession
of a piece of abandoned personal property and the effort is interrupted by the unlawful
acts of others, the actor has a legally cognizable pre-possessory interest in the property.
Popov v. Hayashi: (There is a pre-possessory interest in property where a person takes
significants steps to take possession of abandoned personal property and is interrupted by the
unlawful acts of others.)
NOTES:
- Possession requires both physical control over the item and an intent to control it to
exclude others from it.
- Conversion is the wrongful possession of personal property rightfully owned or
possessed by another
RULE: The owner of a tract of land acquires title to the oil or gas which he produces from
wells on his land, though part of the oil or gas may have migrated from adjoining lands.
He may thus appropriate the oil and gas that have flowed from adjacent lands without the
consent of the owner of those lands, and without incurring liability to him for drainage.
Elliff v. Texon Drilling Co. (The law imposes upon all persons the duty to exercise ordinary care
to avoid injury or damage to the property of others. Thus under the common law, a person is
legally bound to use due care to avoid the negligent waste or destruction of the minerals
imbedded in others property oil and gas bearing strata).
NOTES:
- Under the law of capture there is no liability for reasonable and legitimate draining from
the common pool.
- 85 A.L.R. 1156 the annotated states “ the fact that the owner of the land has a right to
take and to use gas and oil, even to the diminution and exhaustion of the supply under his
neighbors land, does not give him the right to was the gas.
-
You can take as much of the oils and gas as you like from a common pool as long as you
don’t waste it or injure the others.
Westmoreland & Cambria Natural Gas Co. v. Dewitt: Oil and gas are from nature and
not fixed to a particular piece of land. If it should move to an adjacent property, title
passes to the other landowner. Every landowner has the right to tap the oil or gas
regardless of who tapped it first.
Water Rights:
Groundwater:
Doctrine of “free use” or “absolute ownership” each surface owner is free to withdraw as
much water as he likes from beneath the surface of his property without liability, even if it
has the effect of withdrawing water from underneath the neighbor’s property.
Other views on groundwater rights:
- Sipriano v. Great Springs Waters of America; Owners are not permitted to withdraw the
water in a way that wastes it. (Majority view)
- “Reasonable Use” each owner must accommodate the interests of neighboring owners;
the courts may have to balance the interest of both parties (Minority View)
- “Correlative Rights” each owner may withdraw a specified portion of the ground water,
perhaps in proportion to what percentage of the aquifer underlies their property (Minority
View)
- “Prior Appropriation” grants rights to the property owner that first invested in
withdrawing the water (Minority View)
- Some states regulate water use by a permit system administered by state or local
agencies.
Streams:
“Riparian Owners” property owners whose property borders surface streams and lakes
(MAJORITY VIEW) RULE: “Reasonable Use” considers and balances such factors as the:
- relative social of each owners use
- the extent of the harm to the other
- cost of preventing the harm relative to the benefit
(Reasonable use might mean comparing the relative utility of the competing uses and choosing
the one that is most valuable to society or apportioning the use so that all riparian owners have
the right to some portion of the water)
(MINORITY VIEW) RULE: “Prior Appropriation” provides that the first user or developer
prevails over a later user. Many states that have adopted the prior appropriation system also
have established state water management systems.
NOTES:
- Many states combine the prior appropriation with the reasonable use test.
RULE: The first person to find an item has superior rights over everyone but the original owner
(First possession)
C. Acquisition by Creation
Labor and Investment
RULE: Publication of the news must not be deemed as abandonment of the news to the
world for any and all purposes, but a publication for limited purposes, for the benefit of the
readers of the bulletin or the newspaper as such and not for the purpose of making
merchandise of it as news with result of depriving another of their reasonable opportunity
to obtain just returns for their expenditures
International News Service v. Associated Press; (INS press barred from production and
distribution of news that it has not gathered and only to the extent necessary to prevent the
competitor from reaping the fruits of complainant’s efforts and expenditure.)
DISSENTING Justice Oliver Wendell Holmes thinks the defendant should be enjoined from
publishing news obtained from the Associated press for hours after publication by the plaintiff
unless it gives express credit to the Associated press.
DISSENT: Justice Louis Brandeis says that there are no quasi property rights in the news and
the courts should not have created a new rule to redress a newly disclosed wrong.
NOTES:
- There are no property rights in the news
- Current events are not created, they are public for everyone’s use
- “quasi property” labor and investment created something of value; recognized as
property
- News has an “exchange value, dependent on its novelty and freshness” and because of
this value it should be protected from “misappropriation” (presenting it as your own)
- Imitation of products is what creates and allows for needed competition
o Cheney Brothers v. Doris Silk Corp: a silk manufacturer copied the designs of
another and used them. Courts rejected property interest “man’s property is
limited to the chattels which embody his invention.”
- Copyright law protects authors of original works such as books, music, and artwork. The
federal copyright statute protects only original expressions of ideas and prohibits
copying, distributing, and performing them without the author’s consent.
Common law based on “Misappropriation” can be based on disseminating facts only when:
o There was a cost to generating and gathering the information
o Information is time sensitive
o Use of the information by another is free riding on the others efforts
o Another is in direct competition with a product of the other, and
o The ability of the other to free ride on the efforts of the other or others would
reduce the incentive to produce the product or service that its existence or quality
would be substantially threatened.
Patents in Human Genes
RULE: These opinions hold that every person has a proprietary interest in his own
likeness and that unauthorized use of a likeness is redressible as a tort
Moore v. Regents of The University of California; (No property interest in your cells once they
are removed from your body)
NOTES:
Diamonds v. Chakrabrty; Human cell lines are patentable because long-term adaptation and
growth of human tissues and cells in culture is difficult, often considered an art….and probability
of success is low. It is the inventive effort that patent law rewards, not the discovery of naturally
occurring raw materials.
DISSENT: Judge Arabian said Moore at least had the right to do with his own tissue whatever
the defendants did with it, he could have contracted with researchers and pharmaceutical
companies to develop and exploit the vast commercial potential of his tissue and its products.
DISSENT: Judge Broussard said Misappropriated his cells and he should have a right to say
what happens to them.
D. Finders
RULE: The first person to find an item has superior rights over everyone but the original
owner (First possession)
Armory v. Delamiri; (Chimney sweeper found jewel appraised and they refused to return it he
was entitled to the full market value of the jewel under conversion)
RULE: The first person to find an item has superior rights over everyone but the original owner
(First possession)
NOTES:
- Trover is common law action to recover damages for the conversion of personal property
and damages generally measures by the value of the property
- Possession requires: (1) intent to possess and (2) actual possession
RULE: Human remains and burial goods located in cemeteries or burial grounds are not
“treasure,” and thereby are not subject to occupancy upon discovery.
Charrier v. Bell;(Burial artifacts do not go to the person that finds them)
NOTES:
- Lost personal property is when the owner has accidentally misplaced it
- Mislaid personal property when the owner intentionally left it somewhere and then
forgets where she put it
- Abandoned when the owner forms an intent to relinquish all rights in the property
- Property that has been lost or mislaid may subsequently be abandoned if the owner
intends to give up any claim to the property.
- The finder of lost or mislaid property does not acquire title over the true owner of the
property
- The finder is entitled to keep the property against third parties
- If personal property is found embedded in the soil, the landowner rather than the finder
gets the property
-
Treasure Trove, gold, silver, or money intentionally buried in the earth for recovery later
goes to the finder even if on another’s land as long as the finder wasn’t trespassing
Some jurisdictions distinguish between lost and mislaid awarding lost property to the
finder and mislaid property to the owner of the premises perhaps because the true owner
may remember where she mislaid the object
E. Relativity of Title (Color of Title)
RULE: The right of a trespasser in ejectment to recover rests on strength of his own title,
and is not established by the exhibition of defects in the title of peaceable possessor and
that the showing that the title is not in the peaceable possessor but someone else is
insufficient to establish the claim for ejectment.
Tapscott v. Lessee of Cobb;(peaceable possessor v. trespasser claim of ejectment) the peaceable
possessor). Color of title: a defective deed or title.
NOTES:
- Constructive Possession – control and dominion over a property without actual
possession or custody over it is not sufficient to maintain trespass to real property; actual
possession is required and where there is an injury to an heir or devisse by an abator,
before he has entered, he cannot maintain a trespass until his re-entry.
- In 1854 if an owner want to bring a claim for ejectment the process was more
cumbersome so some owners brought claims for ejectment in fictitious names and the
court recognized this.
- In this case there was no evidence that the property was ever paid for or that she ever
took possession of the land.
Personal Property
RULE: “Voidable Title” when a possessor has the power to transfer title to a bona fide
purchaser, although the true owner has the right to recover property from someone to
whom he has entrusted the property, the law may give that possessor the power to divest
the true owner of title by transferring to a bona fide purchaser.
NOTES:
- “bona fide purchaser” an innocent purchaser who has no knowledge that the property is
stolen
- A thief cannot pass any title to any subsequent transferees, including subsequent
purchasers, even if they are bona fide purchasers who have no notice of the theft.
- U.C.C. 2-403(2) provides that a bona fide purchaser will prevail over the true owner
when the true owner has entrusted the property to a merchant who regularly deals in such
goods
- U.C.C 2-403 (1) When a thief takes property away from an owner, such that the initial
transfer of possession is involuntary, neither the thief nor subsequent purchaser are
entitled to keep title as against the true owner.
- Fla Stat. 672-403 If an owner is induced to sell his property by fraud or duress, the seller
may recover the property from the buyer unless the buyer subsequently transferred the
property to a bona fide purchaser
II. ADVERSE POSSESSION
A. Title v. Possession
Squatters:
RULE: Adverse possession is when one possesses another’s property in a manner that is
exclusive, visible (“open and notorious”), continuous, and without the owner’s permission
(adverse or hostile) for a period defined by state statute, the rules in force transfer title
from the title holder (the true or record owner) to the adverse possessor.
Nome 2000 v. Fagerstrom: (Seasonally use was sufficient to satisfy the requirements of
continuous and exclusivity, and notorious for the statutory period for adverse possession)
Elements of Adverse Possession:
1. Actual Possession – physically occupying the property in some manner
2. Exclusive – Use the property as a typical owner would use the land
3. Continuous – control over the property in ways customarily pursued by owners of a
similar type of property
4. Open and Notorious – visible and obvious as to put the reasonable owner on notice that a
non-owner may be exercising dominion and control over their property
5. Adverse or hostile – without permission of the owner, (Did the owner act toward the land
as if he owned it”
NOTES:
- If possession lasts for more than the period defined by the relevant statute of limitations,
the owner is barred from bringing an action in ejectment against the possessor.
- Actual possession – ordinary use to which the land is capable and such as an owner
would make it engaging in significant activities on the land, like planting shrubs
- Easements are limited rights to use the property of another (i.e. right to cross neighboring
property)
- Affirmative easement is a right to do something specific on the land of another
- Negative easement are rights to limit or control the use of neighboring property (i.e.
preventing a neighbor from adding a extra story onto her building, one can purchase the
right to prevent construction above the existing building.
- Prescriptive easement an easement granted created from an open, adverse and continuous
use over a statutory period of time.
- There is a presumption that possession of another’s property is non-permissive
- “ouster” adverse possession over a co-owner of property by one owner making a
explicit statement that they intend to take possession of the entire property by
adverse possession.
- Some states require that in addition to adverse and hostile element that you prove that it
was in good faith (meaning that the possessor did not know he was actually trespassing
on the land formally owned by another) or you did not intentionally disposed.
Adverse Possession under the “Color of Title” – is that you have a written instrument giving you
title, but there is a defect in the title.
1. If you take possession pursuant to a defective document it can affect the period for
establishing adverse possession.
2. Property taken under the “Color of Title” you get what you actually possessed and
everything that is described in the deed.
CONCLUSION: Fagerstroms do not have a claim for the entire property, but for the portion of
the property they actually possessed. The most they would be entitled to is an easement which is
a prescription across the land used commonly amongst others.
RULE: Tacking permits adding together the time period that successive adverse
possessors claim property, and that if this period added together exceeds the requisite time
adverse possession is allowed.
Brown v. Gobble; (Tacking was permitted to meet the claim adverse possession)
RULE: Adverse possession is when one possesses another’s property in a manner that is
exclusive, visible (“open and notorious”), continuous, and without the owner’s permission
(adverse or hostile) for a period defined by state statute, the rules in force transfer title from the
title holder (the true or record owner) to the adverse possessor.
NOTES:
- “Trespass” is an intentional unprivileged entry on property possessed by another
- Subsequent owners that adversely possessed a piece of property may be linked together
to establish adverse possession.
RULE: A deed is not void for want of proper description if, with the deed and with
extrinsic evidence on the ground, a surveyor can ascertain the boundaries
RULE: An indefinite and uncertain description may be clarified by subsequent acts of the
parties
Romero v. Garcia(the deed does not have to precise in describing the property as long as you can
reasonably determine its boundaries).
B. Justifications for Adverse Possession
Traditional policies for adverse possession
(1) Providing a degree of certainty of ownership to possessors of land by eliminating the
possibility of stale claims to land title, and
(2) Encouraging maximum utilization of land
Moral basis for adverse possession
(1) the reliance interests that the possessor may have developed through longstanding possession
of the property.
Justifying granting protection to the land pirate
(1) Create security by encouraging owners to rely on actual use and occupation rather than
formal title creates more security and predictability for all property owners.
(2) The failure of the true owner to object might be understood as effective abandonment of the
owner’s rights, it is not accurate to call the intentional trespasser a pirate or thief.
(3) Statute of limitations gives victims incentives to bring lawsuits within a reasonable time.
C. Prescriptive Easements
RULE: An adverse use or possession which is open, notorious, hostile and continuou for a
statutory period and acquiescence in the use or possession by the person against whom the
claim is asserted.
Restatement of Property: The extent of an easement created by prescription is fixed by the
use through which it was created. No use can be justified under a prescriptive easement
unless it can fairly be regarded as within the range of the privileges asserted by the adverse
user and acquiesced in by the owner of the servient tenement. Yet, no use can ever be
exactly duplicated. If any practically useful easement is ever to arise by prescription, the
use permitted under it must vary in some degree from the use by which it was created.
Hence, the use under which a prescriptive easement arises determines the general outlines
rather than the minute details of the interest.
In California, case law requires claimants to show prescriptive easements by “a definite
and certain line of travel” for the statutory period. Slight deviations from the accustomed
route will not defeat an easement, [only] substantial changes which break the continuity of
the course of travel.
Elements of Prescriptive Easements (start off as a license)
1. Actual USE
2. Exclusive – Shared with the owner, used as the owner would
3. Open and Notorious – sufficient to put the reasonable owner on notice that a nonowner is exercising dominion and control over the property
4. Continuous – in a manner in which a USER would USE it
5. Adverse and Hostile – without permission
Community Feed Store, Inc v. Northeastern Culvert Corp;(A prescriptive easement was enforced
and where small deviations off the path of travel did not defeat an right-of-way access roadway)
Warsaw v. Chicago Mettallic Ceilings, Inc; slight deviations from the accustomed route will not
defeat an easement, only substantial changes which break the continuity of the course of travel.
“Acquiescence” you don’t have to have the true owners permission, but they don’t try to stop
you.
D. Other Informal Ways to Transfer Title to Real Property
Improving Trespasser
RULE: To prevent such unjust enrichment of the defendants, and to do equity between the
parties, the court holds that an improver of land owned by another, who through a
reasonable mistake of fact and in good faith erects a building entirely upon the land of the
owner, with reasonable belief that such land was owned by the improver, is entitled to
recover the value of the improvements from the landowner and to a lien upon such
property which may be sold to enforce the payment of such lien or in the alternative to
purchase the land so improved upon payment to the landowner of the value of the land,
unless the landowner refuses to pay for such land improvements.
Somerville v. Jacobs; (Property owner was denied an injunction because substantial cost of
removing the structure outweighed the harm caused by the encroaching party.)
DISSENT Judge Fred Caplan: To permit the plaintiff to force defendant to sell their property
contrary to their wishes is unthinkable and unpardonable. This is nothing less than
condemnation of private property by private parties for private uses. Condemnation of property
(eminent domain) is reserved for government or entities designated by the legislature. Under no
theory of law should an individual be able to acquire property by condemnation.
RULE: Relative Hardship Doctrine where the encroachment is innocent (the result of a
mistake), the harm minimal, the interference in the true owner’s property interests small and the
costs of removal substantial, the courts often refuse to grant an injunction ordering removal of
the structure. Instead, they either order the encroaching party to pay damages to the landowner
to compensate for the decrease in market value of the owner’s land or order a forced sale of the
property from the landowner to the owner of the encroaching structure with damages equal to the
value of the land taken and possibly a premium to compensate for the involuntary nature of the
transfer in ownership.
Elements of Relative Hardship
1. Innocent encroachment (mistake)
2. Minimal harm
3. Minimally interferes with owners rights
4. Substantial cost
5. Remedy, no injunction forcing encroaching party to remove the structure/instead owner
gets compensatory damages for value of property.
NOTES:
- When a builder mistakenly constructs an entire structure on land belonging to another,
the courts generally rule that the landowner becomes the owner of the structure built on
her land by another.
- Innocent trespassers who improves property in the good faith belief that it was his own
property has a right to compensation for the value of the improvements made when those
improvements increase the value of the property.
- Bad faith improvers who deliberately build on someone else’s property will not be
granted a right to compensation and will ordinarily be required to remove the
encroaching structure if the landowner wishes.
- Betterment statutes (minority view) allow owner’s to choose between paying the builder
the vale of improvements built on their land or compensation only when the builder had
color of title and believed in good faith that the land was hers.
Boundary Settlement
- Oral agreements between neighbors that set boundaries may uphold if:
-
-
-
o 1) both parties are uncertain where the true boundaries lay or genuine dispute
exists over the location of the boundary
o 2) the parties can prove the existence of an agreement setting the boundary
o 3) the parties take (and/or relinquish) possession to the agreed line.
Acquiescence may be recognized by longstanding acquiescence by both parties if:
o 1) adjoining owners
o 2) who occupy their respective tracts up to a clear and certain line (i.e. fence)
o 3) which they mutually recognize and accept as the dividing line between their
properties
o 4) for a long period of time, cannot thereafter claim that the boundary thus
recognized is not the true boundary
Estoppel establishes a boundary when one owner if:
o 1) erroneously represents to the other that the boundary between them is located
along a certain line
o 2) in reliance on the representations, builds improvements which encroach on the
true boundary or takes other detrimental actions
Dedication is a transfer of real property from a private owner to a government entity such
as a city. (requires offer and acceptance)
E. Adverse Possession of Personal Property
Three ways of Adverse of Personal Property
1. Conversion Rule – starts running of the statute of limitations when the property is
wrongfully taken (converted) and the owner dispossessed of the property.
2. Discovery Rule - the statute of limitations start to run only when the true owner
discovers, or reasonably should have discovered, where the stolen personal property is
located. O’Keefe v. Snyder; (stolen paintings discovered in a museum)
3. Demand Rule - a cause of action for replevin against a good faith purchaser of a stolen
chattel accrues when the true owner makes demand for return of the chattel and the
person in possession of the chattel refuses to return it. (Until a demand is made the
possession of the chattel by a good faith purchaser is not wrongful possession)
Replevin an action for the repossession of personal property wrongfully taken or detained by the
defendant, whereby the plaintiff gives security for and holds the property until the court decides
who owns it.
III. TRESPASS/PUBLIC ACCESS
A. Public Policy Limits on the Right to Exclude
RULE: Every person’s constitutional right to the exclusive enjoyment of his own property
for any purpose which does not invade the rights of another person.
Jacque v. Steeberg Homes; (Intentional trespass upheld against another who was denied access
for his convenience to delivery mobile home)
NOTES:
- The right to exclude is hollow if the state fails to provide sufficient protection
- Society has an interest in punishing and deterring intentional trespassers beyond that of
protecting interests of the individual landowner.
- “halfpenny” is hardly protection
REMEDIES
- Damages (nominal, punitive, compensatory)
- Injunction (an order to do or not do something)
- Declaratory judgment (statement by the court declaring the legal rights against the other)
RULE: An owner must expect to find the absoluteness of his property rights curtailed by
the organs of society, for the promotion of the best interest of the others for whom these
organs also operate as protective agents.
RULE: State law does not grant the owner of real property the right to bar access to
governmental services available to migrant workers and hence there was trespass within
the meaning of the penal statute.
State v. Shack; (Employer could not interfere with another’s rights to privacy by barring access
to government services, agents not liable for intentional trespass on migrant farm. )
NOTES:
- Employer may reasonably require those visiting his employees to identify themselves, the
employer may not deny the worker his privacy or interfere with his opportunity to live with
dignity and to enjoy associations customary among our citizens.
RULE: A trespass is an unprivileged intentional intrusion on property possessed by
another.
Desnick v. American Broadcast Companies; (Ophthalmologist consent to access for interview
was not a trespass when they conducted investigating reporting for public interest)
NOTES:
- There is not consent in any non-fictitious sense of the term when express consent is
procured by a misrepresentation or a misleading omission.
- Some consents obtained through fraud might be classified as privileged trespasses
designed to promote competition
- An invasion that is not on a protected interest is not a trespass.
- Crowell v. Crowell; seduction, standardly effected by false promises of love is not rape;
intercourse under the pretense of rendering medical or psychiatric treatment is at least in
most states.
- Mistaken entry onto another’s land does not relive them of liability for damages or injury
- Trespass is an unprivileged intentional intrusion on property possessed by another
- A trespass may occur both above and beneath the surface
- Investigative reporting is not necessarily a trespass (in some jurisdictions) unless you
engage in wrongful conduct that can negate the consent given Food Lion Inc. v. Capital
Cities/ABC, Inc., reporter got a job as an employee thru fraudulent resumes to gain
access.
Privileged Elements
1. Intent – requirement is met if the actor engaged in a voluntary act, such as walking onto
the property
2. Tress pass is privileged and not wrongful if :
a. The entry is done with the consent of the owner
b. The entry is justified by the necessity to prevent a more serious harm to person or
property
c. Entry is otherwise encouraged by public policy
RULE: State v. Schmidt recognized implicitly that when property owners open their
premises to the general public in the pursuit of their own property interests, they have no
right to exclude people unreasonably. They have a duty not to act in an arbitrary or
discriminatory manner toward persons that come upon their premises.
Uston v. Resorts International Hotel, Inc. (Gambler has right reasonable access to private places)
NOTES: (NJ Minority view)
- Private property open to the public cannot bar access to individuals without cause
- Private property owners had the absolute right to fax exclude others from their property
except for:
o Statute
o Common carrier, innkeepers, private hospitals and gas stations because they are
monopolies and people can travel effectively because they don’t allow access.
- Public has a right that reasonable access must be provided
- Reasonable access is not permitted if: 1) it is disruptive to the essential operations of the
premises or 2) threatens security of the premises and its occupants
RULE: Traditional common law rule imposes a duty on innkeepers and common carriers
(planes, trains, buses) to serve members of the public without discrimination unless they
have a good reason not to provide services to a particular individual
-
Common law rule does not apply to places of amusement and resorts which enjoyed a
absolute right to serve whom they pleased
As long as the exclusion is not for race, creed, color or sex the common law can stand.
Justification for common law rule 1) more likely to be monopolies than other businesses
so denial of service was tantamount to denying the ability to travel or find a place to sleep
away from home 2) these businesses provided necessities whose denial would place the
individuals in risk from the elements or bandits on the highway 3) innkeepers and
common carriers hold themselves out as ready to serve the public and the public relies on
this representation.
B. Free Speech Rights of Access to Private
RULE: Property does not lose its private character merely because the public is generally
invited to use it for designated purposes. The Fifth and Fourteenth Amendment rights of
private property owners, must be respected and protected
Lloyd Corp. v. Tanner; (No right to trespass to distribute handbills in the mall)
NOTES:
- Marsh v. Alabama; and Amalgamated Food Employees Union v. Logan Valley Plaza; the
character of a the Lloyd Center “open to the general public” found that it is “the
functional equivalent of a business district” except for ownership by a private corporation
it has all the characteristics of any other American town.
- In short the town and its shopping district are accessible to and freely used by the public
in general and there is nothing to distinguish them from any other town and shopping
center except the fact that the title to the property belongs to a private corporation.
- Where the private interest were substituting for and performing the customary functions
of the government, First Amendment freedoms could not be denied where exercised in
the customary manner on the town’s sidewalks and streets.
DISSENTING: Justice Thurgood Marshall “It would not be surprising in the future to see cities
rely more and more on private businesses to perform functions once performed by the
governmental agencies cites” cites Marsh v. Alabama “the more an owner, for his advantage,
opens up his property for use by the public in general, the more do his rights become
circumscribed by the statutory and constitutional rights of those who use it.
RULE: Where there is no dedication of a privately owned and operated shopping center to
public use, a plaintiff is not entitled to exercise his First Amendment rights in that
shopping center.
Hudgens v. NLRB; (Striking employees no right of public access to trespass private property)
NOTES:
- States can grant greater rights but can’t take away what is awarded by the constitution. N.J.
permitted leaflets to be distributed in the mall. Justice Wilentz noted “every person may freely
speak, write and publish his sentiments on all subjects.”
C. Beach Access and the Public Trust
Matthews v. Bay Head Improvement Association; (Public trust grants access to beach)
RULE: Where a municipal beach is dedicated to public use, the public trust doctrine dictates
that the beach and the ocean waters must be open to all on equal terms and without preference
and that any contrary state or municipal action is impermissible.
RULE: Where an organization is quasi-public, its power to exclude must be reasonably and
lawfully exercised in furtherance of the public welfare related to its public characteristic
RULE: Land covered by tidal waters belongs to the sovereign, but for the common use of all
the people.
NOTES:
- The associations activities of cleaning, policing, and otherwise making attractive and safe
the bathing beaches paralleled those of a municipality in its operation of the beachfront
-
-
-
Courts will not compel admission to a voluntary association. Ordinarily a society or
association may set its own membership qualifications and restrictions. However, where
an organization is quasi-public, its power to exclude must be reasonably and lawfully
exercised in furtherance of the public welfare related to its public characteristics.
Where a municipal beach is dedicated to public use, the public trust doctrine dictates that
the beach and the ocean waters must be open to all on equal terms and without preference
and that any contrary state or municipal action is impermissible.
In order to exercise the rights of bathing, swimming, and other shore activities guaranteed
by the public trust doctrine, the public must have access to municipally-owned dry sand
areas as well as the foreshore. The enjoyment of rights in the foreshore is inseparable
from use of dry sand.
D. The right to be Somewhere and the problem of Homelessness
NOTES: A homeless person may not be constitutionally punished for publicly engaging in
harmless activities necessary to life, such as sleeping.
IV. NUISANCE
A. Land Use Conflicts Among Neighbors
B. Water Rights
Armstrong v. Francis Corp, (surface ground water redirect to anothers property)
RULE: REASONABLE USE – rule lays down the test that each possessor is legally privileged
to make a reasonable use of his land, even though the flow of surface waters is altered thereby
and causes some harm to others, but incurs liability when his harmful interference with the flow
of surface waters is unreasonable.
RULE: COMMON ENEMY – rule is, in substance that a possessor of land has an unlimited
and unrestricted legal privilege to deal with the surface water on his land as he pleases,
regardless of the harm which he may thereby cause others.
RULE: CIVIL LAW – rule is to the effect that a person who interferes with the natural flow of
surface waters so as to cause an invasion of another’s interests in the use and enjoyment of his
land is subject to liability to the other.
NOTES:
- The issue of reasonableness or unreasonableness becomes a question of fact to be
determined in each case upon a consideration of all the relevant circumstances, including
such factors as the amount of harm caused, the foreseeability of the harm which results,
the purpose or motive with which the possessor acted, and all other relevant matter.
Noone v. Price; (Lateral Support for house on side of mountain adjacent to your property )
RULE: If the adjacent landowner provides sufficient support to sustain the weight of the land in
its natural state, but the land slips as a direct result of the additional weight of a building or other
structure, then absent the negligence of the adjoining landowner, there is no cause of action for
damages against the other to land, building or structure.
NOTES:
- A landowner is entitled according to the laws of nature to lateral support in an adjacent land
for his soil
- an excavation made by an adjacent owner that takes away lateral support, given to the
neighbors ground by the earth if removed and cause the weight of the earth to fall, slide, or
breakaway makes the excavating owner liable for injury caused, no matter how careful they
were in the process.
- if you take away lateral support, you don’t dodge liability by selling the property
- If you remove natural support and replace it with artificial support you accept responsibility
Friendswood Development Co. v. Smith-Southwest Industries, Inc.,(Water in wells support
neighbors land).
RULE: If the landowner’s manner of withdrawing ground water from his land is negligent,
willfully wasteful, or for the purpose of malicious injury, and such conduct is a proximate cause
of the subsidence of the land of others, he will be liable for the consequences of his conduct.
NOTES:
- the landowner was not liable for the removal to the adjacent owner for the damage cause by
the removal of ground water because the rule was he could take as much as he likes however it
changed from that point to the future cases.
DISSENT: Justice Pope, this case was not about water rights, but the right to lateral support and
that the adjacent owner was entitled to support.
C. Nuisance
Page County Appliance Center, Inc v. Honeywell, Inc., (Unreasonable interference from
computer with the TV).
RULE: One's use of property should not unreasonably interfere with or disturb a neighbor's
comfortable and reasonable use and enjoyment of his or her estate. A fair test of whether the
operation of a lawful trade or industry constitutes a nuisance is the reasonableness of conducting
it in the manner, at the place, and under the circumstances shown by the evidence. Each case
turns on its own facts and ordinarily the ultimate issue is one of fact, not law. The existence of a
nuisance is not affected by the intention of its creator not to injure anyone. Priority of occupation
and location -- "who was there first" -- is a circumstance of considerable weight.
RULE: Whatever is an obstruction to the free use of property, so as essentially to interfere with
the enjoyment of property, is a nuisance, and a civil action by ordinary proceedings may be
brought to enjoin and abate the same and to recover damages sustained on account thereof.
Public Nuisance – A public nuisance is “an unreasonable interference with a right common to
the general public.
Common Law reasonableness – Manner, place and circumstances; character and gravity of
injury, priority, neighborhood, nature of the wrong.
Restatements 826 Defines land use as “unreasonable” (a) when the gravity of the harm
outweighs the utility of the actor’s conduct. In evaluating the gravity of harm, the courts are to
look at (a) the extent and (b) character of the harm involved; (c) the social value that the law
attaches to the type of use or enjoyment invaded; (d) the suitability of the particular use or
enjoyment invaded to the character of the locality; and (e) the burden on the person harmed of
avoiding the harm
Evaluating Factors of Fairness and Welfare
Fairness:
1. Character of the harm – aesthetic harms will be viewed as less serious than health or
safety concerns
2. Distributive Considerations – Is it fair to make an individual owner bear the cost of
defendant’s socially beneficial activity or should those costs be spread around to the
owner causing the damage and its employees and customers
3. Fault – Is one of the owners engaged in a disfavored activity? Is the conduct appropriate
for the area? Did the plaintiff come to the nuisance
Welfare:
1. Costs and benefits – The costs and benefits of allowing the harmful conduct must be
compared with the costs and benefits of prohibiting it.
2. Incentives – What effects will liability or immunity have on incentives to engage in the
respective activities? How will the distribution of the burdens and benefits of conflicting
land uses affect incentives to invest in safety or to engage in desirable economic
activities?
3. Lowest cost avoider – Which party can more cheaply avoid the cost? Should this party
also bear the burden of paying that cost?
Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc; (Hotel expanded blocking another)
RULE: A property owner may put his own property to any reasonable and lawful use, so long
as he does not thereby deprive the adjoining landowner of any right of enjoyment of his property
which is recognized and protected by law, and so long as his use is not such as one as the law
will pronounce a nuisance.
NOTES:
- There is no legal right to the free flow of light and air from an adjoining land
V. SERVITUDES – PART 1 (EASEMENTS)
A. Introduction to Servitudes
Servitudes – is a legal device that creates a right or an obligation that “runs with the land” or
with an interest in land.
Restatements (Third) of Property (Servitudes) a right or obligation runs with the land if it “passes
automatically to successive owners or occupiers of the land or the interest in land with which the
right or obligation runs.
Types of Servitudes
1. Licenses – revocable at will permissions to enter someone’s property withh a limited right to
use it. The are not transferable (except for theater tickets) and cannot be inherited or devised by
will.
2. Easements (right-of-way) – a permission intended to be permanent or irrevocable
3. Profit – the right to both enter and remove material (i.e. minerals or timber)
4. Covenant – Promises made by a landowner to use or not to use something in a particular way
Implied Covenants
B. Licenses
A mere privilege to enter another’s land for some delineated purpose. It is not subject to the
statute of fraud and does not require a writing to create a license.
Possessor s of real property constantly grant non-owners permission to enter their property.
This permission is normally intended to be temporary and is often limited to specific purposes.
Licenses are freely revocable at will by the grantor, unless estoppel applies. Many licenses are
implied by the circumstances.
No writing is required to create a license and many licenses are implied by the circumstances.
Licenses cannot not be freely revoked in at least four circumstances:
1. License coupled with an interest – (neighbors talking by the fence) An owner who sell s
personal property to another that is located on her own land generally gives permission to
the buyer to enter her land to remove the licensee’s personal property. A oral easement
creates a freely revocable license.
2. Promises to grant a license – tickets create freely revocable licenses. i.e. a person buys a
ticket to the movies, the theater agrees to let the ticket holder enter its property for the
purpose of watching the movie. The license can be revoked by the theater owner after
being issued, however the ticket holder can sue the theater owner for breach of contract.
Theater tickets are transferable.
3. Easements by estoppel will apply to bar revocation but only when the licensee has
invested substantial money or labor or both in REASONABLE RELIANCE on the
license’s continuation
4. Constructive Trust – One which is found to exist by operation of law or by
“construction” of the court, regardless of any lack of express agreement between or intent
on the part of the parties. When one party has been wrongfully deprived either by
mistake, fraud, or some other breach of faith or confidence, of some right, benefit, or title
to the property, a court may impose upon the present holder of legal title a constructive
trust fro the benefit of that party. Thus to prevent the unjust enrichment of the legal
holder, such person is deemed to hold the property as a trustee for the beneficial use of the
party which has been wrongfully deprived of its rights.
Trust – is a property arrangement in which an owner (settlor) transfers property to
another person (trustee) with instructions to manage the property for benefit of a third
party (beneficiary). The trustee is said to have LEGAL TITLE to the property, while the
beneficiary has equitable or beneficial title.
Easements
The grant of a nonpossessory property interest that entitles its holders to some form or another to
the use or enjoyment of another lands. (the serviant tenement)
Easements can be affirmative or negative.
Most easements are affirmative.
Affirmative Easement – the right to go onto and do something on serviant land (i.e. privilege to
land utility lines on another’s land, or giving a right-of-way on another’s land)
Negative Easements - entitles its holder to compel the servienant owner to refrain from doing
something that would otherwise be permissible.
CREATING SERVITUDES (EASEMENTS)
The Statute of Frauds requires a writing to transfer most interests in real property. Easements are
considered substantial property interests covered by the statute and writings are generally
required with some exceptions for (1) Easements by estoppel (2) easements by prescription, (3)
easement by implication from prior use, and (4) easement by necessity.
Estoppel (Irrevocable Licenses) The doctrine of easement by estoppel effectively converrs a
revocable license into an irrevocable easement.
RULE: Generally, many courts hold that a licensee is conclusively presumed as a matter of
law to know that a license is revocable at the pleasure of the licensor, and if he expend
money in connection with his entry upon the land of the latter, he does so at his peril.
Holbrook v. Taylor
RULE: Where a license is not a bare, naked right of entry, but includes the right to erect
structures and acquire an interest in the land in the nature of an easement by the
construction of improvements thereon, the licensor may not revoke the license and restore
his premises to their former condition after the licensee has exercised the privilege given by
the license and erected the improvements at considerable expense. Lashley Telephone Co.
V. Durbin, 228 S.W. 423.
RULE: The law recognizes that one may acquire a license to use a passway or roadway where,
with the knowledge of the licensor, he has in the exercise of the privilege spent money in
improving the way or for other purposes connected with its use on the faith or strength of the
license. Under such conditions the license becomes irrevocable and continues for so long as a
time as its nature calls for. Ackers v. Moore, 309 S.W.Sd 758 (Ky, 1958)
Prescriptive Easement (Adverse Use)
In California, case law requires claimants to show prescriptive easements by “a definite
and certain line of travel” for the statutory period. Slight deviations from the accustomed
route will not defeat an easement, [only] substantial changes which break the continuity of
the course of travel.
Elements of Prescriptive Easements (start off as a license)
1. Actual USE
2. Exclusive – Shared with the owner, used as the owner would
3. Open and Notorious – sufficient to put the reasonable owner on notice that a nonowner is exercising dominion and control over the property
4. Continuous – in a manner in which a USER would USE it
5. Adverse and Hostile – without permission
6. For the Statutory Period
Community Feed Store, Inc v. Northeastern Culvert Corp;(A prescriptive easement was enforced
and where small deviations off the path of travel did not defeat an right-of-way access roadway)
Prior Use (Implication) (Implied Easement)
A prior existing use (quasi easement) arises when an owner of an entire tract of land or two
or more adjoining parcels, after employing a part thereof so that one part of the tract or
one parcel derives from another a benefit or advantage of an APPARENT,
CONTINUOUS, and PERMANENT nature, conveys or transfers part of the property
without mention being made of these incidental uses. The conveyance of transfer imparts a
grant of property with all the benefits and burdens which existed at the time of the
conveyance of the transfer, even though such grant is not reserved or specified in the deed.
Granite Property Limited Partnership v. Manns(the shopping center was able to enforce an
easement by prior use because it was preexisting and reasonably necessary).
Creating a Prior use easement:
1. Common Ownership
2. Apparent
3. Obvious
4. Continuous
5. Permanent
6. Reasonably necessary to the enjoyment
7. Prior Use.
Absolute necessity is not required.
Necessity (Landlocked Property)(Implied Easement)
RULE: Where an owner of land conveys a parcel thereof which has no outlet to a highway
except over the remaining lands of the grantor of over the land of strangers, a way by
necessity exists over the remaining lands of the grantor. If, at one time, there has been a
unity of title, the right to a way by necessity may lay dormant through several transfers of
title and yet pass with each transfer as appurtenant to the dominant estate and be exercised
at any time by the holder of the title thereto. (The doctrine of easement by necessity applies
when land has no access to a public road).
Elements:
1. Common ownership
2. Right-of-way
3. May lay dormant for many years
4. Strict necessity required
Finn v. Williams (A dormant easement that was not in use was enforced after the PRIVATE
ingress and egress was terminated disabling access to highways from and to their property.) A
dormant easement of necessity still survives even if not used and passes with successive transfers
and cannot be denied.
Note: There is no necessity when the property is located along to a public road, but the cost of
creating useable access to that road is prohibitively expensive. (Schwab v. Timmons – no
necessity since the cost of building a access road over a bluff was $700,000 prohibitively
expensive, access was physically available and land was not landlocked and cost was not a
factor).
(Mississippi Power Co. v. Fairchild – the power company was granted an easement because
building access to a public road over a river because the cost of construction was prohibitive.)
Express Agreement (Statute of Frauds)
Writing
Express easements are crated by agreement of the parties; the owner of the burdened land grants
to another an easement in the grantor’s property. (It must be in writing to satisfy the SOF).
Easements are created by deed in which the named grantor recites that he grants an easement of a
certain description to the named grantee. Deeds are normally only signed by the grantor.
Rule Against Reserving an Easement in a Third Party
Traditionally – A grantor may not sell a parcel of property while reserving an easement over the
property in a third person (Estate of Thomson v. Wade).
Minority – Some courts apply the doctrine of estoppel to prevent the grantee from interfering in
the easement reserved for a third party. (Dalton v. Eller).
Majority – Many courts have changed the traditional rule, allowing reservation of an easement in
a third party. (Drafting around the easement by having the grantor convey the property to third
person and they become the grantor and convey the property to the intended grantee, reserving
the easement for themselves which is permissible for a grantor).
Limits on Negative Easements
Types of Negative Easements (Majority View)
(LASS)
Light Negative Easement – I can compel you from building on your land that would block light
Air Negative Easement – compel the servieant owner to refrain from doing something that will
interfere with my use and enjoyment of air.
Support Negative Easement - lateral support of one’s building
Stream Water from an Artificial Flow – I can compel the serviant owner from conduct that
interferes with the flow of an artificial stream (i.e. aqueduct).
Courts will recognize these negative easements but the use of covenants will be recognized to
restrict use. However the doctrines of changed conditions and undue hardship can eliminate
overly burdensome or insubstantial benefited covenants.
Traditional law of easements did not allow creation of an affirmative obligation to do something
on someone’s land for the benefit of other owners (i.e. pay a monthly feed to a condo
association).
The law of covenants developed to allow the creation of enforceable affirmative obligations that
run with the land.
Transferring an Servitude: Easement
Requirements for the Burden to Run with the Land:
An easement that runs with the land is treated as if it were attached to that parcel sot that any
future owner of the parcel is benefited or burdened by the easement.
Running Burden (Servient estates has the burden of what he dominant estate enjoys)
1. Writing – detailed in the deed granting the property; recorded writing. Even if it is
not included in a subsequent deed to the serviant estate, the “chain of title” because
it be found recorded can burden future owners of servient estates
2. Intent – Intended to run with the benefited and/or burden land. If ambiguous as to
the intent, it can be implied by if it is likely to have been merely personal (i.e. access
given to a friend to swim in one’s lake) or permanent right (i.e. right to lay utility
lines across the servient estate.
3. Notice
a. Actual – Owners know about the existence of an easement
b. Inquiry – Visible signs of use by non-owners (i.e. telephone poles, paths
across property, or above ground utility lines). Reasonable buyer would
discover an easement exist.
c. Constructive – If the deed is recorded in the proper registry and place and
the chain of title. (they actually knew or should have known).
Requirements for the Benefit to Run with the Land:
Is the easement owned by the person to whom it was originally granted or by who ever happens
to own the parcel of land it was intended to benefit.
Running Benefit (Dominant Estate enjoys the benefit of what the servient estates gives up)
1. Appurtenant easement – If the easement is intended to benefit whoever owns a
particular parcel of land. If the benefit runs with the land, it is treated as if it were
attached to the land and has a dominant estate.
2. Easement in GROSS – If the benefit is not intended to run with ownership of the
dominant parcel. If it does n4444ot run with the land, it is not attached to a
particular parcel of land and there is no dominant estate. (Assigned to the grantee
personally a right of access)
Intent distinguishes if an easement is appurtenant or in gross.
Green v. Lupo (The instrument described the easement as for ingress and egress for road and
utility purposes and was not intended to be appurtenant to the land and motorcycles were modes
of ingress and egress, so the benefit runs with the dominant estate).
There is a presumption that easements are appurtenant rather than in gross (Lewitz v. Porath
Family Trust).
Appurtenant easements are preferable because they limit the number of persons with easements
over the land to the number of neighboring parcels. (cannot be severed from the land and pass
automatically to the dominant estate (Cricklewood on the Bellamy Condo Ass’n v. Cricklewood
on the Bellamy Trust).)
In gross easements create more uncertainty about land use rights than appurtenant easements.
Scope of Servitudes: Easement
RULE: As a general rule, the owner of an easement may prepare, maintain, improve or
repair the way in a manner and to an extent reasonably calculated to promote the purposes
for which it was created. The owner may not cause an undue burden upon the servient
estate, nor an unwarranted interference with the independent rights of others who have a
similar right of use.
RULE: When the width is not specified, the conveying instrument must be construed in
the light of the facts and circumstances existing at its date and affecting the property, the
intention of the parties being the object of inquiry. Sometimes as a matter of law if the
width is not specified, it is limited to the width as it existed at the time of the grant.
Cox v. Glenbrook Company (The right-of-way granted full use over the roads “as now located”
for his life and to his heirs but they could not expand the road to because they had developed the
property, it was not intended for that purpose and would be outside the scope but it was
appurtenant to the land and DIVISIBLE amongst everyone that needed access). The servient
estate could relocate the right-of-way at its own expense. The dominant estate cannot cause an
undue burden or hardship on the servient estate.
Henley v. Continental Cablevision (the intent of the grantor of the easement was for electrical
power and communication. The cable company had an easement in gross and intended to be
exclusive and was APPORTIONABLE and transferable.) (The addition of cable and equipment
to already existing poles was not an additional burden on the servient estate since the utility
company was doing what they were enabled to do.) (Hoffman v. Capitol Cablevision System
Inc.)
Scientific and technology advancement are foreseeable and would not be outside the scope.
If an easement in gross is NON-EXCLUSIVE meaning the grantor, or owner of the s ervient
estate has reserved for himself the right to use the easement in conjunction with the grantee and
the easement is generally not apportionable. The grantor can sell others the right to use.
Traditionally, the servient estate could NOT relocate an easement without the consent of the
holder of the easement.
Modern View - Restatements (Third) Property 4.8(3) (2000) allows servient esate owner to
relocate a easement at their own expense as long as they are reasonable without the consent of
the dominant tenement.
Minority View – the servient estate owner may relocate an easement so long as damages are paid
to the dominant estate owner.
Minority View – the servient estate my relocate an easement ONLY after court proceedings
showing the dominant estate will not be harmed.
Scope of easement determination
1. Whether the use is of the kind contemplated
2. Whether the use is so heavy that it constitutes an unreasonable burden on the servient estate
not contemplated by the grantor
3. whether the easement can be subdivided(apportionable or divisible).
Termination of Servitudes: Easement
1. By agreement in writing (release of the easement by the holder)
2. By their own terms – the deed specifies the life of the easement (i.e. for ten years)
3. By Merger – when the servient estate becomes owner of he dominant estate
4. Abandonment – by conduct indicated an intent to abandon an easement
5. By adverse possession or prescription by servient tenement or third person
6. Frustration of purpose – the purpose of the easement has become impossible to accomplish
SERVITUDES : COVENANTS
Promises relating to land interest.
Creating a Covenant
Binding Elements of Covenants
1. Writing
2. Intent
3. Notice (actual, inquiry, constructive)
4. Touches and Concerns – (Affects the physical use of the land)
5. Privity of estate (horizontal and vertical for the burden to run) (vertical only for the
benefit to run)
Horizontal Privity
1. Mutual Privity – simultaneous interest in the land and at the time of the transfer they
mutually agreed
2. Instantaneous Privity – simultaneous at the time of the sale of the land
Veritical Privity
1. Relaxed Privity – grantor retains some interest in the land
2. Strict Privity – grantor does not retain any future interest in the land
Note:
 For the burden to run there must be strict vertical privity.
 For the benefit to run there must be relaxed vertical privity.
4 Scenarios for Real Covenants
1. Enforcers and violators are the original parties (burden and benefit must run)
2. Enforcer is an original party and violator is a successor to the other original party
(whether burden runs)
3. Enforcer is a successor to an original party and violator is the other original party
(whether the benefit runs)
4. Both the enforcer and violator are the successors to the original parties (whether the
benefit and burden runs.
Traditional Model:
Breach of Covenant (Remedy were at law (damages)
1. Writing
2. Intent
3. Notice (actual, inquiry, constructive)
4. Touches and Concerns
5. Privity
Equitable Servitude (Remedy was in equity (injunction)
1. Writing
2. Intent
3. Notice (actual, inquiry, constructive)
4. Touches and Concerns
Touch and Concern Burdens
1. Validity – Reasonableness (scope and duration)
2. Enforceability – Touch and concern
Running the Benefit (Enforcers)
1. Writing
2. Intent
3. Notice – none issue because if you are an enforcer you know of the covenant
4. Touch and concerns
5. Privity – Horizonatal privity is not necessary / Relaxed vertical privity standard.
Touch and Concern Benefits
1. improves the enjoyment or
2. increases its market value
Anticompetitive covenants traditionally do not touch and concern because it was for someone
not to use the land therefore a covenant would not be binding on a servient estate. There is a
benefit because it gives the other more value in their land.
By Express Agreement
Traditional View/Common Law - A covenant will not run with the land unless it affects the
physical use of the land. The burden side of a NONCOMPETITION covenant is personal
to the covenantor and is not enforceable against a purchaser (Brewer v. Marshall)
Davidson Bros., Inc. v. D. Katz & Sons, Inc. (Plaintiff sold property with a covenant not to
compete in the grocery business. Covenant not to compete was enforceable if it was reasonable
at the time it was enacted. If it was reasonable but now adversely affects commercial
development and public welfare the court can consider damages.)
Reasonableness Standard:
1. Intent of the parties
2. Whether the covenant had an impact on consideration exchanged (did they pay less
because of the covenant)
3. Whether the covenant clearly and expressly sets forth the restrictions
4. Whether the covenant was in writing, recorded, and whether the grantee had notice
5. Whether it is reasonable concerning the area, time, and duration. (covenants that are for
perpetuity or beyond the terms of a lease may often be unreasonable).
6. Whether it imposes an unreasonable restraint on trade or secures a monopoly for the
covenantor.
7. whether the covenant interferes with public interest
8. whether changed circumstances make the covenant unreasonable.
DISSENT: Justice Steward Polluck believes that an injunction is inappropriate and amounts to a
taking for private purposes. He says give them money for the harm they have suffered because
the citizens need a grocery story.
Whittinsville Plaza v. Kotseas (Defendant could not enforce the covenant against the successor
because he did not have strict vertical privity for the BURDEN to run, however he could enforce
against the original covenantor.)
Implied Reciprocal Negative Servitude (exception to the SOF)(common owner has an
implied promise to successive purchaser whose lot does not have a restrictive covenant where
other owners are do there is an implied promise to a successive owner that does not have a
restriction).
RULE: Doctrine Of Implied Reciprocal Negative Servitude: where a common grantor
develops a tract of land for sale in lots and pursues a course of conduct which indicates that
he intends to inaugurate a general scheme or plan of development for the benefit of himself
and the purchasers of the various lots, and by numerous conveyances inserts in the deeds
substantially uniform restrictions, conditions and covenants against the use of the property,
the grantees acquire by implication an equitable right, variously referred to as an implied
reciprocal negative easement or an equitable servitude, to enforce similar restrictions
against that part of the tract retained by the grantor or subsequently sold without the
restrictions to a purchaser with actual or constructive notice of the restrictions and
covenants.
Burden Running – (requires Intent, Notice, Touch and Concern)
Intent – Evidence of common ownership and common scheme or plan, presence of a restriction
on all of most of the land, plat map,
Notice - Actual, Inquiry, or Constructive (Writing or Deed, Asking or recorded at county clerks
office)
(Most jurisdiction you are considered on constructive notice because of an expanded
concept of notice)
Touch and Concern - touches the related property and concerns the property (i.e. value)
Evans v. Pollock (The restricted district need not be the whole subdivision nor include the whole
retained tract).
RULE: It is “not essential that there be a general scheme of restricting all of the lots in the
additions. Valid restrictions could result from a scheme to restrict the lots in only one
block or those facing on only one street.”
Sanborn v. McLean(Minority View)
RULE: Intent to create a common plan and constructive or inquiry notice on a purchaser
was sufficient for the court to impose a implied reciprocal negative servitude.
Riley v. Bear Creek Planning Committee(Minority View) (It must be in writing to fall within the
statute of frauds).
RULE: The recording statutes operate to protect the expectations of the grantee and
secure to him the full benefit of the exchange for which he bargained. Where, however,
mutually enforceable equitable servitudes are sought to be created outside the recording
statutes, the vindication of the expectations of the original grantee, and for that matter
succeeding grantees, is hostage not only to the good faith of the grantor, but, even assuming
good faith, to the vagaries of proof by extrinsic evidence of actual notice on the part of
grantees who thereafter take a part of the servient tenement either from the common
grantor or as successors in interest to his grantees.
Interpretation and Scope Covenants
Restrictive covenants are not favorites of the law and when interpreting such covenants,
courts should give effect to the intent of the parties as expressed in the plain language of the
covenant; but when there is an any ambiguity or substantial doubt as to the meaning,
restrictive covenants will be read narrowly in favor of the free use of property.
Blevins v. Barry-Lawrence County Association for Retarded Citizens (The restriction of on the
property “for residential purposes only” was interpreted to mean on the use of the dwelling and
not the make-up of who resides in the property and “single family dwelling” did not exclude
unrelated persons living together in a home). (Majority view)
Minority view – the term “family” is residents must be related by blood. (Jackson v. Williams).
Modification and Termination of Covenants
Rule: A court will not enforce a restrictive covenant where a fundamental change has
occurred in the intended character of the neighborhood that renders the benefits
underlying imposition of the restrictions incapable of enjoyment.
El Di, Inc. v. Town of Bethany Beach (changed conditions inside the neighborhood to a more
commercial zone from residential were sufficient enough to terminate the restrictive covenant
and allowed him to sell alcoholic beverages at his hotel business).
(inside the neighborhood) Covenants will not be enforced if conditions have changed so
drastically inside the neighborhood restricted by the covenants that enforcement will be of no
substantial benefit to the dominant estates.
(outside the neighborhood) The changed conditions doctrine may also apply when substantial
changes have occurred outside the restricted subdivision. It is likely to apply to changes outside
the restricted division only when those changes have so adversely affected so many lots in the
subdivision that enforcement is pointless.
THE ESTATE SYSTEM – CLASSIFICATION
Introduction & Historical Background
The Estates System
- A different way owners may share ownership is by divvying up ownership rights over
time, with one owning the present right to possess the property and the other a future
power to take possession from the present owner.
Present estate holder has the right to possess the property while her property rights last.
Future estate holder will obtain the right to possess the property when and if the present interest
terminates.
Both have the power to transfer their present or future interest.
Classification (takes effect when the deed is executed/delivered)
Words of purchase – identify who owns the estate
Word of limitations – kinds of estate person owns
Types of Estates: (difference is primarily the duration)
1. Fee simple – a freehold estate who’s duration is potentially infinite
2. Life Estate – a freehold estate who duration in measured by the life of one or more
persons.
3. Fee Tail – a freehold estate who’s duration is measured by the lives of lineal decendents
of a person. (mostly obsolete)
Fee Simple Estate types:
1. Fee simple absolute (FSA) – No future interest
a. O to A
b. O to A and her heirs
c. O to A in fee simple
2. Defeasible fees (words of limitation i.e. so long as, while, during, until,
unless)(Potentially infinite)
a. Fee simple determinable (FSD) – possibility of reverter (automatic transfer when
the future interest reverts automatically to the grantor on the happening of the
state event, the present interest is called FSD and future interest is call possible
reverter
i. O to A so long as used for residential purposes
ii. O to A while used for residential purposes
iii. O to A during residential use
iv. O to A unless used for nonresidential purposes
v. O to A so long as used for residential purposes; if used for a
nonresidential purpose, the property shall automatically revert to O.
b. Fee simple subject to condition subsequent (FSSCS) - right of entry for condition
broken (or power of termination) (must assert the right of entry to shift the title)
(i.e. provided that, on condition, but if)
i. O to A on condition that the property be used for residential purposes; in
the event it is not so used, O shall have a right of entry
ii. O to A, but if used for nonresidential purposes, O shall have a right of
entry.
iii. O to A, provided that the property is used for residential purposes; if this
condition is violated, O shall have a right of entry.
c. Fee simple subject to executory limitation (FSSEL) – Executory interest(types of
executory interest: shifting/springing) (when the future interest goes to someone
other than the grantor meaning the right to possession shifts from one grantee to
another it is shifting. If possessory future interests goes from the grantor to
another grantee upon a condition it is springing.
i. O to A so long as used for residential purposes then to B
ii. O to A, but if the land is not used as a public part, to C
iii. O to A while the land is used as a public park, if not so used, to C (shifting
example: O’s future interest will shift from A to C if the condition is
violated by using the land for something other than a public park)
iv. O to A if she graduates from law school (O has a FSSEL because the
future interest is in A graduating from law school. When A graduates O
interest is springing to A.)
Interpreting Ambiguous Conveyances
There is a presumption against forfeiture by current owners in interpreting documents.
Wood v. Board of County Commissioners of Fremont County
Said tract is conveyed to Freemont County for the purpose of construction and maintaining a
county hospital in memorial to gallant men of Armed Forces from Fremont County.
Example: FSA with a covenant and Freemont County promises said tract is conveyed to
Freemont county construct and maintain a county hospital in memorial to gallant men of Armed
forces from Freemont County.
RULE: FSA absolute are favored over FSSCS and FSD. FSSCS are favored over FSD.
Cathedral of the Incarnation in the Diocese of Long Island, Inc v. Garden City Company
Church wanted to dispose of the restriction so that they could sell the property. The heirs had
transferred their interest to the city, however the right of entry was not assignable or devisable.
Therefore the right of entry would be rendered void by any attempt by the Stewart heirs to assign
it to the company. The deed created a right of entry in the grantor which was now none existent
because of the statute.
Classical View – Right of entry not transferable
Modern View – Right of entry is transferable
3. Life Estate – ownership rights can be held during the life of a designated individual.
a. O to A for life (A owns the property during his lifetime)
Reversion – future interest reverts to the grantor upon the death of the grantee of a life estate
Remainder – future interests in third party, designated by the grantor to obtain the when the
grantee A dies
Vested Remainder
a. Persons who are identifiable at the time of the initial conveyance
b. Conditions that must occur before they will have the right to control the property
Contingent Remainders
a. If the remainder will take effect only upon the happening of an event that is not certain to
happen, OR
b. If the remainder will go to a person who cannot be ascertained at the time of the intial
conveyance
Vested Remainders to subject to open
a. a remainder that may be divided among person who will be born in the future
b. Ex. O to A for life then to the children of B.
Vested remainders subject to divestment
a. a vested remainder that may be destroyed by an event that occurs after the original
conveyance.
b. Ex. O to A for life, then to B, but if B has flunked out of school, the property shall then
revert to O.
Destructibility of Contingent – if the condition to be satisfied hasn’t been vested by the death of
the grantee the contingent remainder would be destroyed and revert back to the grantor. (Old
Rule)
Modern Rule: If the condition to be satisfied hasn’t been vested by the death of the grantee the
contingent remainder becomes a FSSEL. The grantor as has an EI until the condition is satisfied
then to FSA PASSES. (contingent remainders are not destroyed).
Reversion Rule – if the last interest on the time line is a contingent remainder, then there is a
reversion following it.
Rule in Shelley’s Case – It converts a remainder in the grantee’s heirs into a remainder in the
grantee. (rule only applies here in this example. O: to A for life, then to A heirs. A: LE A: VR;
A has a FSA.
Doctrine of Worthier Title – The remainder in O’s heirs converted into a reversion in the grantor.
(old rule)
Modern view of Worthier Title – The remainder in O’s heirs converts into a reversion UNLESS
in many states there is sufficiently clear language indicating that the grantor actually intends to
give a remainder to his own heirs.
Edwards v. Bradley (Plaintiff acquired a life estate and her children had a vested remainder and
were intended to get the estate after there mother’s life.
A condition totally prohibiting the alienation of a vested fee simple estate or requiring a
forfeiture upon alienation is void. As an exception to the rule, conditions prohibiting alienation
of land granted to corporate entities for their purposes are valid. A conditional limitation
imposed upon a life estate, however is valid.
A presumption against forfeitures.
4. Fee Tail – an estate whose purpose is to keep the property in a family dynasty. The lineal
descendants, their descendants and so on, until the blood line runs out, at which point the
property would revert back to the grantor or the grantors heirs. EVERY fee tail is
followed by either a reversion or a remainder to take effect when the blood line runs out.
a. O to A and the heirs of his body.
b. Some states treat it as Fee Simple absolute.
c. Some treat it as fee tail and allow the owner to covert it to fee simple by
conveying the property in fee simple to another.
d. Some treat it as a life estate in present owner and a remainder in fee simple in her
issue.
RULE AGAINST UNREASONABLE RESTRAINTS ON ALIENATION
Restraint on alienation – a restriction in a deed of conveyance, on a grantee’s ability to sell or
transfer real property; a provision that conveys an interst and that, even after the interst has
become vested, prevents or discourages the owner from disposing of it all or from disposing of it
in particular ways.
5 Types of Restraint on Alienation:
1. Direct restraints on transfer (in the deed)
2. Servitudes requiring the consent of either the grantor (the developer) or the association to
transfer the property (covenants)
3. rights of first refusal (also called preemptive rights)
4. leasing restriction
5. restraints designed to keep housing affordable by low- and moderate-income families.
Alienation – conveyance or transfer of property to another; withdrawal from former attachment;
estrangement.
Rule: (Traditional) Rule of reasonable restraints, that the validity of a restraint against
alienation depends upon its reasonableness in regard to the justifiable interests of the
parties, the court found the restraint in the deed invalid.
One of the factors tending to show the reasonableness of the restraint is that “the one upon
whom the restraint is a charity. A sale of land owned by a charitable entity may be
permitted despite a valid restraint against alienation, if a court of equity determines that,
due to unforeseen circumstances, the sale is necessary and would be in the best interest of
the charity.
(Direct Restraints on Alienation)
Horse Pond Fish & Game Club, Inc. v. Cormier (direct restraint on alienation (restriction in the
deed) was found to be unreasonable but required further determination of whether Horse Pond is
a charitable entity and if the restraint on alienation is valid was required)
Restraint on alienation cannot be for an unlimited duration and did not accomplish a worthwhile
purpose.
A charity may be permitted to SALE despite a valid restraint against alienation if a court of
equity determines that, due to unforeseen circumstances, the sale is necessary and would be in
the best interest of the charity.
Consent to Sell Provisions
(a) (Grantor Consent Clauses)
Rule: Restraints on alienation of fee interests in land are absolutely void on the formalistic
ground that they were “repugnant to the fee.”
Restatement of Property 406
Reasonableness of alienation on restraint
1. Interest in the land
2. limited in duration
3. Worthwhile purpose
4. Type prohibited not likely to be employed by the one restrained
5. # of persons to whom alienation is limited
6. Imposed on a charity
UNREASONABLE of alienation on restraint
1. Capricious
2. Imposed a spirit of malicious
3. one imposing has no interest in the land
4. unlimited in duration
5. # of person to whom alienation is large
Rule: A clause in a deed prohibiting the grantee from conveying land to another without
the approval of the grantor, when the grantor transferred a fee simple estate to the grantee
is void as repugnant to the nature of an estate in fee.
Rule: Every provision in a written instrument relating to real property which purports to
forbid or restrict the conveyance, encumbrance, occupancy, or lease there of to individuals
of a specified race, creed, color, national origin, or with any sensory, mental, or physical
handicap, which directly or indirectly limits the use or occupancy of real property on the
basis of race, creed, color, national origin, or the presence of any sensory, mental, or
physical handicap is void.
Northwest Real Estate Co. v. Serio (the restraint on alienation required the grantor of the land to
consent to the sale of the property that was fee simple which is against the presumption of
ownership and the right to transfer and was void and unreasonable because the consent was
arbitrary). (Partial, promissory restraint was repugnant to the fee)
Dissent: Apply the rule of reasonableness because it is a temporary restraint on alienation and
make it more desirable for public policy interests. (making the property more valuable)
Riste v. Eastern Washington Bible Camp, Inc. (the restrictions of the bible camp were based on
creed which refers to a system of religious beliefs and is void; and also, the deed transferred a
fee simple and was against ownership, therefore void). (Bible Camp: To A with restraint not to
sale without approval (disabling partial restraint because it said it could not sale without
approval) (use restriction on conduct limits ability to alienate the property (was an indirect
restraint)
NOTES:
- Direct restraints are invalid only if they are unreasonable
- Indirect restraints are invalid only if they lack rational justification Restatement (Third)
Property
- Total restraints on alienation of fee simple interests, whether in the form of disabling,
promissory, or forfeiture restrains, are uniformly held void and unenforceable.
- Restraint on alienation are covenants or conditions that restrict the ability of the owner of
real property to sell or give away the property. (Three types total restraints on alienation)
o Disabling restraints – directly forbids the owner from transferring her interest in
the property (O conveys Blackacre to A and her heirs, but any transfer of
Blackacre shall be null and void.)
o Promissory restraints – a covenant by which the grantee promises not to alienate
his interest in the property (O conveys Blackacre to A in fee simple. A promises
[or covenants] for himself, his heirs, and his assigns that Blackacre shall not be
transferred.)
o Forfeiture restraints – provides for a future interest that will vest if the owner
attempts to transfer her interest in the property. (O conveys Blackacre to A, but if
A attempts to transfer the property, then to B and her heirs.)
- Partial Restraints on alienation of fee simple interests
o Time (duration) alienation that last for a limited time may be upheld
o Person’s alienation limits the transfer of property to certain persons but do not
constitute wholesale prohibitions on transfer.
- Low Income housing, City of Oceanside v. McKenna, the restriction on leasing was a
reasonable restraint on alienation because “the provision of housing for low and moderate
income persons is in keeping with the public policy of the state. The restriction support rather
than offend the policies of this state.
-
Traditional common law approach on a FEE SIMPLE, disabling, forfeiture and
promissory restraints are void. Also LIFE ESTATES, disabling, forfeiture and
promissory restraints are void. EQUITABLE ESTATES disabling, forfeiture and
promissory restraints are generally valid. LEASES disabling, forfeiture and promissory
restraint are generally valid.
RULE AGAINST PERPETUITIES (ONLY APPLIES TO FUTURE INTEREST AND
FUTURE CREATED IN THIRD PERSONS, CONTINGENT REMAINDERS,
EXECUTORY INTEREST, AND VESTED REMAINDER SUBJECT TO OPEN)
Rule Against Perpetuities - No interest is good unless it must vest, if at all, no later than 21
years after the death of some life in being at the creation of the interest. (it imposes a time
deadline on how long contingent future interest can exist).
Determine for certain that someone will take possession of the property within the
perpetuities period is not a violation of the RAP.
Rule Against Perpetuities applies to:
1. Contingent remainders
2. Executory interest (options are always considered as EI)
3. Vested remainders subject to open
Test the rule against the lives in being at the time of creation of the grant plus 21 years that
affect the identity of the beneficiaries.
You have to logically prove that the contingent interest will vest or fail on the effective date of
the conveyance. If you can’t prove it then it fails the rule.
Ex. O: To A for life, then to B if he reaches 21 (and B is 18). (valid interest under the RAP)
Definition
Validating life – someone within whose lifetime (or 21 years afterward) the future interest is
certain to vest if it ever vests.
Life in Being – is technically anyone alive anywhere in the world who is alive on the effective
date of the grant.
Measuring lives – anyone who can affect the time a future interest vest.
1. Holder of the interest
2. Creator of the interest
3. Anyone who can affect the identity of the beneficiaries (parents, grandparents)
4. Anyone who can affect vesting of the condition precedent
Time of vesting and time of possession are not necessarily the same.
Contingent remainders when:
1. An unascertainable person is assertainable
2. condition precedent is satisfied
Executory interest vest when:
1. the condition is satisfied for the third party to take possession
Vested Remainder subject to open vest when:
1. the class closes
When there is a remainder to a class there are two ways for a class to close:
1. Natural closing – when it is impossible for new members to enter the class (death of person
creating the class)
2. Rule of Convenience – when one member of the class is entitle to take actual possession of
the property.
Unborn Widow – A conveyance from “O to A for life, remainder to A’s widow for life,
remainder to A’s surviving children” creates a contingent remainder in A’s surviving
children that violates the traditional rule against perpetuities because A could marry
someone bore after the conveyance.
O: “To A for life, then to A’s widow, if any, for life, then to A’s issue then living.” (A is alive,
married to S and they have 1 child, C).
A: LE, A’s widow: CR; A’s issues: CR;
Fertile octogenarian – If O grants property to “A for life, remainder to A’s grandchildren,”
the assumption has always been that A could have more children until she dies, even if she
is 80 years old. The contingent remainder in the grandchildren (or vested remainder
subject to open if there are grandchildren at the conveyance from O to A) violates the rule
because A could have a child after the creation of the interest that child could have a chile
more than 21 years after the death of A.
O: “To A for life, then to A’s children for their lives, and upon the death of the survivor of such
children, to the grandchildren of a.” (A is alive, 79 years old, and has no children).
“Wait and See” or “Second Look” rule – A future inters is void if a possibility exists that it
will vest outside the perpetuities period. You would wait until 21 years after all of your
lives in being.
O: “To A, but if the land is ever used for commercial purposes, to B and her heirs. Under the
wait and see you would wait until the measuring lives of O, A, B are over and add 21 years and
that’s when the heirs receive the property.
Equitable reformation or Cy Pres – a conveyance may violate the rule against perpetuities
because it contains an age limit greater than 21.
O: “To A for life, then to the first son of a to reach 25.” O: Reversion; A: LE; A’s 1st Son: CR;
uncertainty: Whether A has a son and whether the first son will reach 25. violates the RAP,
however in Equitable reformation, you can change the age to 21, as to not violate the rule.
Measuring lives are O, A.
Uniform Statutory Rule – validates future interests that otherwise violate the traditional
rule against perpetuities if the interest vest at any time within 90 years of the date of its
creation. DO NOT use any measuring lives.
Vertical Separability Rule – Only applies to a class gift.
WASTE
Waste – conduct by a life estate tenant that permanently impairs the land.
Types of Waste:
1. Permissive – failure to perform an affirmative duty
2. Voluntary – a deliberate act that reduce the value of the property by the possessory
tenant
Ameliorating waste (exception to waste) – voluntary acts of waste that increase the value of the
property
Moore v. Phillips the defenses of the executor of laches and estoppel were not accepted in a
claim of permissive waste against her mother who was a life estate holder and the daughter holds
a vested remainder. Damages were awarded.
Equitable defenses
1. laches - failure to do something at the proper time, esp. such delay as will bar a party from
bringing a legal proceeding
2. estoppel - a bar or impediment preventing a party from asserting a fact or a claim inconsistent
with a position that party previously took, either by conduct or words, esp. where a
representation has been relied or acted upon by other
Melms v. Pabst Brewing Co. life tenant sold the property to the defendant and it demolished a
large house on the lot and graded the land to street level. Ordinarily destruction of dwelling
would constitute waste. The commercial development made the property value increase from
substantial changed conditions in the surrounding area.
CONCURRENT INTEREST
People can share the current interest and the present interest in land
Example: To A for life, then to A’s children X & Y.
When A dies X&Y would have a FSA and concurrent owners.
Types of Concurrent owners:
1. Tenancy in Common – two or more persons own the property with no right of survivorship
between them; when one tenant in common dies, her interest passes to her heirs or devisees.
 Form of concurrent ownership wherein each co-tenant is the owner of a separate and
distinct share of the property. Each owner has a separate undivided interest in the whole.
a. Right to possession

Each tenant in common has the right to possess and enjoy the entire
property, subject to the same right in each co-tenant; each tenant has the
right to sell, possess and lease the property.
b. No right of survivorship
 When a tenant in common dies, her interest passes to her devisees or heirs.
It does not go to the surviving tenant in common. There is no right of
survivorship among tenants in common
 A tenant in common can sell, give, devise, or otherwise dispose of her undivided share in
the same manner as if she were the sole owner of the property
a. EX: A died devising her one-half interest to C for life, remainder to D. Thus,
each share of a tenancy in common can be divided into a life estate and future
interests, or among a new group of concurrent owners.
2. Joint tenancy – two or more persons own the property with a right of survivorship; when
one joint tenant dies, the survivor(s) takes all. Remember that the common law required the four
unities (time, title, interest, and possession) for a joint tenancy.
 There is no limit on the number of persons that can form a JT
3. Tenancy by entirety – exists only between husband and wife, with a right of survivorship
that cannot be severed without consent of both spouses.
Joint Tenancy Creation – requires four unities
1. Time
2. Title
3. Interest
4. Possession
Tenancy by Entirety Creation – requires four unities plus marriage
Two Types of Ouster
1. Actual - an affirmative act of physically barring one co-owner from entering the
property
2. Constructive - (traditionally the property was physically too small for all the concurrent
owners to physically occupy the property). Emotional discord may be a form of
constructive ouster.
 Ouster: Marital Discord
o Actual
o Constructive
o Fault (abusive marital relationships)
Tenancy in Common
Creation - the right to possess the property in its entirety.
Possession
Termination – Marital Discord
**TICS do not owe each other rent unless they have been ousted****
CONFLICTS OVER RENT AND POSSESSION
Olivas v. Olivas Husband abandoned claiming constructive ouster of emotions make the house to
small for the both of them and moves in with his girlfriend after a hostile relationship is not
entitled to receive rent as a tenancy in common. There was no constructive ouster because he
chose to leave and abandon the property.
Maxwell v. Eckert Emotional Discord - the impracticality of joint occupancy by the
cotenants may result from the relations between the cotenants becoming so strained and
bitter that they could not continue to reside together in peace and concord.
O’Connell v. O’Connell if however, hostility flows from the cotenant out of possession,
ordinarily would not normally be constructive ouster.
CONFLICTS OVER TRANSFERS BY ONE CO-OWNER



Contenancy provide that co-owners have the right:
o To possess the entire property
o To transfer their individual fractional interests
o To share rents earned by the property in proportion to their ownership
interests and
o The duty to share maintenance and upkeep
A cotenant may lawfully lease his own interest in the common property to another
without the consent of the other tenant and without his joining in lease. The nonjoining cotenant is not bound by this lease of common property to their persons.
When co-owners cannot agree among themselves about who will the property or
how it will be used, the result is either:
o An accounting –
 Generally useful only as to financial matters.
o A partition –
 a lawsuit which one co-owner of real property can file to get a court
order requiring the sale of the property and division of the profits, or
division of the land between the co-owners, which is often a practical
impossibility. Normally, a partition order provides for an appraisal of
the total property, which sets the price for one of the parties to buy
out the other's half. Partition cases are common when co-owners
differ on whether to sell, keep or divide the property.
Carr v. Deking – Joel Carr and his father, deceased, George Carr owned a parcel of land as
tenants in common. The Carrs leased the property to Deking on a year to year oral agreement.
Father and Deking entered into a ten year crop-share lease w/o knowledge or consent of the son.
Son intitates a suit of ejectment claiming that Deking had no right to farm the land and should be
required to vacate. He further claimed that the lease is invalid w/o his consent. Deking argues
that the father could legally enter into a lease with respect to his own undivided ½ interest in the
property and the son was not entitled to bring an ejectment action to which the father did not
agree. Court says the interest of the tenant in common transfer with lessee and cannot be ejected.
He can get half the rent until the property is partitioned. Joel can take the benefit of the lease but
cannot challenge the terms of the lease.
Tenhet v. Boswell - whether a lease terminates a joint tenancy. In some jurisdictions yes
If you create a joint tenancy, there was an intent to create it and to terminate, there must be the
same to terminate. It was not clear. The unities in questions was the possession unitity.
Permanent Severance (some jurisdictions)
Temporary Serverance (some jurisdictions)(for the duration of the lease)
No Severance. (other jurisdictions) – court adopts this option
Harms v. Sprague - Whether a mortgage severs a joint tenancy. Under the mortgage theory it
servers the joint tenancy. Under the lien theory it does not sever the joint tenancy. A mortgage
is a security interest in the property, giving the holder of the mortgage the power to initiate a sale
of property to pay off a debt.
 Mortgage Theory affects the title of unity resulting in severance.
 Lien Theory does not affect title of unity resulting in no severance.
Next step is to determine whether the mortgage survives? Because the mortgage did not sever
the joint tenant, the deceased tenant’s interest automatically terminated when he dies; the
mortgage did not survive as a lien on the surviving joint tenant’s property, and the surviving
tenant becomes the sole owner of the estate.
Sawada v. Endo Tenancy by the entirety. Sawada was injured my Endo in a car accident. He
sued and received a judgment. To avoid a lien on there property, Endo conveyed the property to
their sons. In a judgment from a car accident the plaintiff tried to levy against the house after the
spouse died. Has all the unities of time, title, interest, possession and marriage. It was not a
fraudulent conveyance because the creditors could not attach to the interest of the property. The
property was not levied at all. The Endo’s hold the property
Married Women’s Property Act was to abrogate the husband’s common law dominance over
the marital estate and to place the wife on a level of equality with him as regards the exercise of
ownership over the whole estate.
Group I. (Mass, Mich. & N.C.) does not change common law (at cl tenants by the entirety means
the title was held exclusively by the husband); MWPA does not
Group II. Removes the husband’s rights of control over the jointly owned by property; gives the
wife the same equal footing as husband; Non debtor and creditor are tenants in common
Group III. Puts both parties in an equal positions possession and the creditors cannot go
against either spouse; both husband and wife are seen as one MAJORITY; both parties have to
consent to transfer
Group IV. Creditors cannot levy against a spouse right of possession, but can levy on the
debtors right of survivorship. (If the debtor survives, a creditor can levy against it’s right of
possession, however if the non-debtor survives the creditor cannot levy against it’s right of
possession).
Rule: The tenant in possession does not owe rent unless there is an ouster. The other has a
duty to share in the maintenance expenses.
Damages (contributions) for tenants in common
Example: A&B co-owner. A&B leases to C for $1500/month. Mortgage, taxes and insurance
$1000/month. If A pays mortgage, taxes, and insurance can B sue for contribution. Yes. FRV:
$1000 Expense: A=$750 B=$750 contribution is $250
Example: A&B co-owners; A lives in the house. Fair rental value $1500/month. Mortgage,
interest, taxes and insurance $1000 month. Can A sue B for contribution? If the fair rental
value exceeds the expense, then the tenant in sole possession has to pay the value of the
expenses and can not seek contribution for the co-owner not in possession.
Example: A&B co-owners. A lives in the house. Fair rental value $1000. Expense: $1500. Can
A sue B for contribution? Yes, the difference would be between.
Adverse Possession for Co-Owners
A&B are co-owners
A lives in the house
SOL – Adv. Pssn 10 years
Year 10, does A have title? No. the possession is not hostile
Suppose A change the locks? Argue the elements of Adv. Pssn.
Termination of tenants in common is done by partition either physical or in a sale and divide
the property.
NON-FREEHOLD ESTATES
LANDLORD TENANTS (LEASEHOLDS)
Types of Tenancies
1. Residential – renting property for the purpose of establishing a home
2. Commercial – any nonresidential use, including operation of a business for profit or
operation of a nonprofit institution such as a church, hospital, or university
Categories of Tenancies
1. Terms of years (TOY) – term of years last for a specified period of time. Lease can be for
any length of time. A term of years terminates automatically at the agreed-upon time. (future
interest held by the landlord is a reversion and if the landlords interest shift to a third party it is a
remainder).
2. Periodic tenancy (PERIODIC) – renews automatically at specified periods unless one of the
parties ends the relationship. (month-to-month tenancies) Common law requires notice. At
common law the notice requirement is 6 months if there is a year to year periodic tenancy. Many
states require a months notice to end a month-to-month tenancies. If the tenant moves out w/o
providing notice then the landlord can sue for damages after he mitigates damages (damages
usually limited to the notice period.
3. Tenancy at will (AT WILL)– similar to periodic except that it can be ended with no notice
by either party. (most states have abolished). No notice is required. Either party can end the
tenancy at anytime.
4. Tenancy at sufferance (AT SUFFERANCE) – a tenant rightfully in possession who
wrongfully stays after the leaseholds has terminated is call a tenant at sufferance (holdover
tenant). This distinguishes between a tenant who wrongfully retains possession after the end of
the lease term and a trespasser who never had a right to possess.
Landlord Remedies: Regain Possession: Eviction
Self-help - an owner can physically eject a trespasser or to call on the police to do so or at
common law the landlord was allowed to use self-help to regain possession of property.
 Once a party achieves the status of a tenant then certain rights under landlord/tenant attch
 Common law self-help no longer allowed
 Summary procedure – in theory is a quick procedure
A landlord who accepts rent checks from a holdover tenant may be held to have agreed to a
new tenancy calculated by the rental payment schedule (monthly checks creating a monthto-month tenancy).
 LL Remedies to regain possession:
o Ejectment CL
o Summary Eviction (unlawful Detainer) (usually long and drawn out)
Common law a landlord could select a tenant based on whatever reason they want.
Fair Housing Act 1968 bars discrimination in housing by race, color, religion, sex, familiar
status, national origin and handicap.
Rights and Obligations of Co-Ownership
Rights


Possession
Rent
Obligations


Expenses
Includes maintenance and repairs
and improvements
Contribution Problem 1
Contribution Problem 2
 Necessities
 Taxes
 Mortgages are expenses that co-owners assumed and if one co-owner makes the
repairs the other
Sommer v. Kridel
 Sommer is the LL and Kridel is the tenant
 Lease from 5/1/1972-4/30/1974



Kridel has a TOY with a reversion in Sommer
Landlord has a duty to mitigate
Theories in Sommer
o LL Breached
o LL failed to mitigate
o LL accepted surrender
Majority rule hat there is a duty to mitigate . If as a landlord you bear the the risks
of duty to mitigate.
LANDLORDS DUTY TO DELIVER POSSESSION
Majority Rule: the landlord has the duty to deliver possession of the rented premises to the
tenant at the beginning of the leaseholds.
Restatement (Second) Property (Landlord & Tenant) If a prior tenant wrongfully holds over
after a lease term expires, the landlord has an obligation in most jurisdictions to remove the prior
tenant within a reasonable period of time by either instituting conviction proceedings or
convincing the holdover tenant to leave.
Chapter 8
LANDLORD AND TENANT
I. INTRODUCTION
A. Various types: There are four estates that involve a landlord-tenant relationship: (1)
the tenancy for years; (2) the periodic tenancy; (3) the tenancy at will; and (4) the
tenancy at sufference. [192]
B. Statute of Frauds: Under the original English Statute of Frauds, any lease for more
than three years must be in writing. (Otherwise, it merely creates an "estate at will.") In
the U.S., most statutes now require a writing for all leases for more than one year. [193]
1. Option to renew: In calculating whether a lease is for more than one year (so
that it probably has to be in writing), most courts add together the fixed term and
any period for which the tenant has the option to renew. [193]
C. The estate for years: Most leases are estates for years. An estate for years is any
estate which is for a fixed period of time. (So even a six-month lease is an "estate for
years.") [194]
1. Certain term: For a lease to be an estate for years, the beginning date and end
date must be fixed.
2. Automatic termination: Because an estate for years contains its own
termination date, no additional notice of termination need be given by either
party – on the last day, the tenancy simply ends, and the tenant must leave the
premises.
D. Periodic tenancy: The periodic tenancy is one which continues from one period to
the next automatically, unless either party terminates it at the end of a period by notice.
Thus a year-to-year tenancy, or a month-to-month one, would be periodic. [195 - 196]
1. Creation by implication: Normally a periodic tenancy is created by
implication. Thus a lease with no stated duration (e.g., T agrees to pay L "$200
per month," but with no end period) creates a periodic tenancy. Also, if a tenant
holds over, and the landlord accepts rent, probably a periodic tenancy is created.
[195]
2. Termination: A periodic tenancy will automatically be renewed for a further
period unless one party gives a valid notice of termination. [195 - 196]
a. Common law: At common law, six months’ notice was needed to
terminate a year-to-year tenancy, and a full period’s notice was necessary
when the period was less than a year (e.g., 30 days notice for a month-tomonth tenancy). Also, at common law, the notice had to set the end of a
period as the termination date.
b. Modern: Most states today require only 30 days notice for any tenancy,
even year-to-year. Notice today must still generally be effective as of the
end of a period, but if the notice is not sufficiently in advance of one
period, it is automatically applicable to the following period. (Example: L
and T have a month-to-tenancy; if one gives the other notice of
termination on January 4, this will be effective as of February 28.)
E. At-will tenancy: A tenancy at will is a tenancy which has no stated duration and
which may be terminated at any time by either party. [196 - 197]
1. Implication: Usually a tenancy at will, like a periodic tenancy, is created by
implication. For instance, if T takes possession with L’s permission, with no term
stated and no period for paying rent defined (so that the lease is not even a
periodic one), it will probably be at will. Also, a few courts hold that if one party
has the option to terminate at will, the other party has a similar option so that the
tenancy is at will.
F. Tenancy at sufferance: There is only one situation in which the "tenancy at
sufferance" exists: where a tenant holds over at the end of a valid lease. Here, the
landlord has a right of election, between: (1) evicting the tenant; and (2) holding him to
another term as tenant. (If L elects to hold T to another term, most courts hold that a
periodic tenancy is then created, and the length of the period is determined by the way
rent was computed under the lease which terminated.) [198 - 200]
II. TENANT’S RIGHT OF POSSESSION AND ENJOYMENT
A. Tenant’s right of possession: Courts are split about whether L impliedly warrants to
T that he will deliver actual possession at the start of the lease term. The question usually
arises when a prior tenant holds over.
1. "American" (Majority) view: The so-called "American" view is that the
landlord has a duty to deliver only legal possession, not actual possession.
Despite the name, at most a slight majority of American courts follow this rule.
[200]
2. "English" (Minority) rule: Other courts follow the so-called "English" rule,
by which L does have a duty to deliver actual possession. In courts following this
rule, T has the right to terminate the lease and recover damages for the breach if
the prior tenant holds over and L does not oust him. Alternatively, T may continue
the lease and get damages for the period until the prior tenant is removed. [200 201]
B. Quiet enjoyment: T has the right of "quiet enjoyment" of the leased premises. This
right can be violated in two main ways: (1) by claims of "paramount title"; and (2) by
acts of L, or persons claiming under him, which interfere with T’s possession or use of
the premises. [201]
1. Claims of paramount title: L, by making the lease, impliedly warrants that he
has legal power to give possession to T for the term of the lease. If someone else
successfully asserts a claim to the property which is superior to T’s claim under
the lease (a claim of "paramount title"’), L has breached this warranty. Thus
suppose that X shows that L does not have title to the premises at all (because X
has title), or that X shows that L has previously leased the premises to X, or that
X shows that X holds a mortgage on the premises, and is entitled to foreclose
because L has not made mortgage payments – in all of these instances, X’s claim
of paramount title constitutes a breach by L of his implied warranty. [201]
a. Before T takes possession: If T discovers the paramount title before he
takes possession, he may terminate the lease.
b. After T takes possession: Once T takes possession, he may not
terminate the lease (or refuse to pay rent) merely on the grounds that a
third person holds a paramount title. (It is sometimes said that T is
"estopped to deny L’s title" to the leased property.) On the other hand, if
the third person then asserts his paramount title in such a way that T is
evicted, T may terminate the lease and recover damages.
2. Interference by landlord or third person: If L himself, or someone claiming
under L, interferes with T’s use of the premises, this will be a breach of the
covenant of quiet enjoyment. [202]
a. Conduct by other tenants: If the conduct of other tenants makes the
premises uninhabitable for T, the traditional view is that L is not
responsible (unless the other tenants use their portion for immoral or lewd
purposes, or conduct their acts in the common areas). But the modern
trend is to impute the acts of other tenants to L where these acts are in
violation of the other leases, and L could have prevented the conduct by
eviction or otherwise. (Example: Suppose that other tenants make a great
deal of noise in violation of their leases, so that L could evict them, but
does not. The modern trend, but not the traditional rule, is that T may
terminate the lease.) Blackett v. Olanoff
b. Constructive eviction: If T’s claim is merely that his use or enjoyment
of the property has been substantially impaired (e.g., excessive noise,
terrible odors) the eviction is "constructive". When T is constructively
evicted, even if this is L’s fault, T is not entitled to terminate or stop
paying rent unless he abandons the premises. (Example: Other tenants
make so much noise that T’s use is severely impaired. If T remains in the
premises, he may not reduce the rent payments to L; he must leave and
terminate the lease, or else pay the full lease amount.) [203] Minjak Co. v.
Randolph. Landlord sues tenants for not paying rent and they respond
C. Condemnation: If the government uses its right of eminent domain to condemn all or
part of the leased premises, T may have a remedy. [204]
1. Total taking: If the entire premises are taken, the lease terminates, and T does
not have to pay the rent.
2. Partial (constructive eviction): But if only a portion of the premises is taken
(even a major part), at common law the lease is not terminated. Also, T must
continue paying the full rent (though he gets an appropriate portion of any
condemnation award which L collects from the government). However, the
modern trend is to let T terminate if the condemnation "significantly interferes"
with his use, and to give him a reduction in rent even for a small interference.
D. Illegality: If T intends to use the property for illegal purposes, and L knows this fact,
the court will probably treat the lease as unenforceable, especially if the illegality would
be a serious one (e.g., crack distribution). [205 - 206]
1. Variance or permit: If the use intended by T requires a variance or permit,
and T is unable to get the variance or permit after the lease is signed, most courts
hold that the lease remains valid.
E. Right to Transfer
III. CONDITION OF THE PREMISES
A. Common-law view: At common law, T takes the premises as is. L is not deemed to
have made any implied warranty that the premises are fit or habitable. Nor does L have
any duty to repair defects arising during the course of the lease (unless the parties
explicitly provide that he does). [208]
1. Independence of covenants: Also, the common law applies the doctrine of
"independence of covenants" in leases. Thus even if L does expressly promise to
repair (or warrants that the premises are habitable), if he breaches this promise T
must still pay rent. T may sue for damages, but he is stuck in the uninhabitable
living conditions. [209]
2. Constructive eviction: However, even at common law, T can raise the defense
of "constructive eviction" – he can terminate the lease if he can show that the
premises are virtually uninhabitable. But he can only assert constructive eviction
if he first leaves the premises, something which a poor tenant in uninhabitable
residential space can rarely afford to do. [209]
B. Modern implied warranty of habitability: But today, the vast majority of states
(either by statute or case law) impose some kind of implied warranty of habitability.
That is, if L leases residential premises to T, he impliedly warrants that the premises are
in at least good enough condition to be lived in. If L breaches this warranty, T may
(among other remedies) withhold rent, and use the withheld rent to make the repairs
himself. [210]
Traditional Rule: There is no duty for the landlord to make repairs. Because older
tenants did not concern themselves with the land.
1. Waiver of known pre-existing defects: Some (but by no means all) courts
hold that if T knows of the defect before he moves in, he will be held to have
waived the defect, so that the implied warranty of habitability does not apply to
that defect. (If the defect is one which T neither discovered nor reasonably could
have discovered before moving in, then all courts agree that an otherwiseapplicable implied warranty of habitability protects T against the defect.) [211 212]
2. Standards for determining "habitability": All courts agree that the existence
of a building code violation is at least evidence of uninhabitability. However,
most courts require that to prove uninhabitability, T must show that the conditions
not only violate the building code, but are also a substantial threat to T’s health
or safety. (Conversely, most courts hold that if conditions are a substantial threat
to T’s health or safety, the warranty is breached even if there is no building code
violation.) [213] Javins v. First National Realty Corp.
a. Relevance of nature of building: Some (but not all) courts hold that
the age of the building and the amount of rent charged may be
considered in determining whether there has been a breach. Thus a given
condition might be a breach of the warranty as to a new luxury high-rise,
but not as to an old low-rent structure.
3. Kinds of leases:
a. Residential: Most statutes imposing an implied warranty of habitability
apply to all residential leases (though some apply merely to units in
multiple dwellings, so that a single-family house would not be covered).
[213]
b. Commercial leases: Most statutes and cases do not impose an implied
warranty of habitability as to commercial leases. [214]
4. Waiver in lease: Generally, a clause in the lease expressly stating that there is
no implied warranty is usually not effective. (But some statutes, such as the
URLTA, will enforce a deal in which T promises, in a separate writing, and for
adequate consideration such as a lower rent, to make repairs himself.) [215]
5. Remedies: If T shows a breach of the implied warranty of habitability, he may
have a number of remedies:
a. Terminate lease: T may usually vacate the premises and terminate the
lease (after he puts L on notice and L still refuses to make the repairs).
[216]
b. Withhold rent: T may also withhold rent until the defects have been
cured. (But most statutes, and some cases, require T to deposit the rent in
some sort of escrow account.) [216]
c. Use rent for repairs: Many cases and statutes allow T to make the
repairs and then to deduct the reasonable costs of those repairs from the
rent. T must usually give L advance notice of his intent to make the repairs
and to deduct (so that L can make the repairs himself to avoid the loss of
rent). [217]
6. Retaliatory eviction barred: By the doctrine of "retaliatory eviction," L
usually may not terminate a periodic lease, or deny T’s request for a new lease at
the conclusion of a tenancy for years, on account of T’s assertion of the right to
habitable premises. The doctrine is most likely to be applied where L tries to
terminate the tenancy in retaliation for T’s complaints made to a housing authority
about code violations. Also, some courts apply the doctrine where the nonrenewal or termination is in retaliation for T’s withholding of rent or his joining in
a tenants’ organization. [219 - 221]
C. Destruction of premises: If the premises are suddenly destroyed or damaged (by fire,
flood, lightning or other natural elements), at common law T must keep paying rent, and
may not terminate the lease. [221]
1. Modern view: But most states have now passed statutes changing this
common-law rule – if the premises are destroyed or damaged so that they are no
longer habitable, T may now usually terminate the lease and stop paying rent.
Also, some courts have reached this result by case law. (But T usually cannot
recover damages, so termination of the lease is his only remedy.)
IV. TORT LIABILITY OF LANDLORD AND TENANT
A. Tenant’s tort liability: T, during the time he is in possession of the premises, is
treated like an owner, for purposes of his tort liability to others who come onto the
property. (Example: Since L would have a duty to warn a social guest, or licensee, of
known dangers, T has a similar duty to warn of dangers that he is aware of.) [223]
B. Landlord’s liability:
1. Common law: At common law, L is generally not liable for physical injury to
T, or to persons who are on the leased property with T’s consent. That is, L has no
general duty to use reasonable care to make or keep the premises safe. [223]
However, there are a number of exceptions (including some developed by courts
recently), including the following:
a. Concealment: L is liable if he conceals, or fails to disclose, a
dangerous defect existing at the start of the lease of which he is aware.
[224]
i. L should know but does not: Most courts also hold that if L
does not have actual knowledge but should know about the danger,
based on facts that he does know, he will be liable for failing to
warn.
ii. No duty of inspection: But L has no duty of inspection, i.e., no
obligation to inspect the property to find out whether there are
hidden defects.
b. Liability to persons other than T: Nearly all courts hold that if L
would be liable to T, he is also liable to persons on the premises with T’s
consent. (But if L has told T about the defect, L will not be liable to T’s
guests even if T did not pass on the warning.) [224]
c. Areas under L’s control: L has a duty to use reasonable care to keep
the common areas safe (e.g., lobbies, elevator, corridor, etc.). [224]
i. Security against criminals: Most courts now require L to use
reasonable care to prevent unauthorized access to the building.
(Example: L, the owner of an apartment building, fails to repair the
building’s outer lock after being told that it is broken. X enters, and
mugs T. Most courts would hold L liable for not using reasonable
care to secure the building.)
d. Repairs negligently performed: If L attempts to make a repair, he will
be liable if the repair is done negligently, and L has made the condition
more dangerous or lulled T into a false feeling of security. (But if L’s
negligent repair does not make the condition worse or lull T, the courts are
split as to whether L is liable if T is injured.) [225]
e. L contracts to repair: If a clause in the lease requires L to make
repairs or otherwise keep the premises safe, L will be liable in tort if he
fails to use reasonable care and T is injured. Also, L is probably liable to
third persons on the premises with T’s consent in this situation. [226]
f. L’s legal duties: If building codes or other laws impose a duty on L to
keep the premises safe, L will generally be liable in tort if he fails in this
duty. Probably L will also be liable if he breaches an implied warranty of
habitability, and the uninhabitable condition causes injury to T or T’s
guest. [226 - 228]
g. Admission of public: If L has reason to believe that T will hold the
premises open to the public, and L has reason to know that a dangerous
condition exists, L will be liable for resulting physical harm to the public.
(L usually has an affirmative duty to inspect in this situation.) [228 - 229]
2. General "reasonable care" theory: Some recent cases have simply rejected
the common law view that L has no general duty to use reasonable care. Under
these cases, P does not have to fit within one of the above exceptions, and merely
has to show that: (1) L failed to use reasonable care and (2) the lack of reasonable
care proximately caused P’s injury. [228 - 229]
3. Exculpatory clauses: At least in the case of a residential lease, most courts
today refuse to enforce an "exculpatory clause" in a lease, that is, a clause
purporting to relieve L of tort liability for his negligence. About half the states
accomplish this by statute, and some others by case law. [229]
V. TENANT’S DUTIES
A. Duty to pay rent: T of course has a duty to pay rent.
1. Breach of L’s duties: Most courts today hold that if L materially breaches his
implied or express obligations (e.g., the implied warranty of habitability), T is
temporarily relieved from continuing to pay rent. [230 - 231]
B. Duty to repair: At common law, T had an implied duty to make minor repairs. [230]
1. Modern rule: However, most courts today do not impose this duty on T (and
indeed, most impose it on L under the doctrine of implied warranty of
habitability, at least for residential leases).
C. Fixtures: A fixture is an item of personal property which is attached to the land (e.g.,
lighting, built-in bookcases, etc.). [231]
1. Right to affix: T is usually allowed to attach fixtures if this would not unfairly
damage the value of L’s reversion.
2. Right to remove: Similarly, most courts today say that T may remove a fixture
installed by him if this removal will not damage L’s interests (so that T must
normally restore the premises to the way they were before the fixture was
attached).
D. Duty to behave reasonably: T has the implied duty to behave reasonably in his use
of the premises. (Examples: T must not unreasonably disturb other tenants, and must
obey reasonable regulations posted by the landlord.) [233]
VI. LANDLORD’S REMEDIES
A. Security deposits:
1. Interest: In many states, L is required by statute to pay interest on the security
deposit. [233]
2. Right to keep: Once the lease terminates, L must return the deposit to T, after
subtracting any damages. If T abandons the lease before the end of the lease term
and L re-lets, L must immediately return the deposit (after subtracting damages).
3. Commingle: L may normally commingle the security deposit with his own
funds.
4. Purchaser’s obligation: Courts are split as to whether one who purchases L’s
interest in the property must account to T for the end of the deposit at the end of
the lease term. [234]
B. Acceleration clause: Most leases contain an acceleration of rent clause, by which if
T fails to pay rent promptly or otherwise breaches the lease, L may require that all of the
rent for the rest of the lease term is payable at once. [234]
1. Generally valid: Most courts enforce such acceleration clauses. (But if L
decides to sue for enforcement of the acceleration clause, he may not also demand
possession of the premises.)
C. Eviction:
1. Express forfeiture clause: Most leases explicitly give L the right to terminate
the lease if T fails to pay rent or violates any other lease provision. Such clauses
will be enforced, but only if T’s breach is material. (Example: If T is merely a
couple days late with the rent on one or two occasions, the court will probably not
allow L to terminate the lease.) [235]
2. Summary proceedings: In most states, if L is entitled to terminate the lease
and regain possession (or if T holds over at the end of the lease term and L wants
to get him out), L may do so by "summary proceedings," which provide for a
speedy trial of L’s right to immediate possession. Summary proceedings usually
work by limiting the defenses which T may assert. (Example: Some summary
proceeding statutes prevent T from asserting the breach of the implied warranty of
habitability as a defense in L’s action to regain possession for non-payment of
rent.) [236 - 237]
D. Damages for holdover: If T holds over after the lease terminates, L is entitled to
damages as well as eviction. [237]
E. Abandonment: If T abandons the premises (and defaults on the rent) before the
scheduled end of the lease term, L has three basic choices: (1) to accept a surrender of
the premises, thus terminating the lease; (2) to re-let on T’s behalf; and (3) to leave the
premises vacant and sue for rent as it comes due. [238 - 241]
1. Accept surrender: L may treat T’s abandonment as a surrender, and accept it.
This has the effect of terminating the lease, so that no further rent becomes due
from T. (If T takes possession and/or leases to someone else, and does not notify
T that he is acting on T’s behalf, then this will probably be held to be an
acceptance of surrender, causing T’s rent obligation to end.) [238]
2. Re-letting on T’s account: L may re-let on T’s behalf, if he notifies T that he
is doing so. This has two advantages to L: (1) T remains liable for all rents
coming due, if no new tenant is found; and (2) if a new tenant is found who pays a
lesser rent, T is still liable for the difference between this and the original rent due
under the L-T lease. (Courts are split on whether L must give the surplus to T if L
re-lets for a higher amount.) [239 - 241]
3. Leave vacant: Courts are split on whether L has the right to leave the premises
vacant, and hold L to the lease. Usually, the question is phrased, "Does L have the
duty to mitigate?"
a. Traditional view: The traditional view is that L has no duty to
mitigate, i.e., no duty to try to find a new tenant. [240]
b. Duty to mitigate: But an increasing minority of courts now hold that L
does have a duty to mitigate, by attempting to find a suitable replacement
tenant. In these courts, if L does not make such an effort, T is off the hook.
[240]
Mitigating Factors Include:
1. Extent to which the LL advertised unit for rent
2. Extent to which LL offered or showed unit to prospective tenant
3. Remaining length of Original Lease
4. Cost of preparing property for new tenant
5. Market rent for a comparable unit
6. How far terms for any replacement lease deviate from terms of original
lease
VII. TRANSFER AND SALE BY LESSOR; ASSIGNMENT AND SUBLETTING BY
LESSEE
A. Generally allowed: Unless the parties to a lease agree otherwise, either may transfer
his interest. Thus L may sell his reversion in the property, and T may either assign or
sublease his right to occupy. [241]
1. Distinguish assignment from sublease: Be sure to distinguish sublease from
assignment. An assignment is the transfer by T of his entire interest in the leased
premises. Thus he must transfer the entire remaining length of the term of his
lease. A sublease is the transfer by T of less than his entire interest. (Example: T’s
lease has one year to go. T transfers the first 11.5 months of this interest to T1. In
most states, this is a sublease, not an assignment.) [242]
a. Significance: The main significance of this distinction is that if T
assigns to T1, T1 is personally liable to pay rent to L, even if he makes no
express promise to L or T that he will do so. If T merely subleases to T1,
T1 is not personally liable to L for the rent (absent an explicit promise).
[243]
B. Running of benefit and burden: Determine whether a particular promise runs with
the land, either as to benefit or burden. If the benefit runs, then an assignee of the
promisee can sue to enforce; if the burden runs, an assignee of the promisor will be
liable. If neither the burden nor benefit runs, then the promisor’s assignee is not liable,
and promisee’s assignee cannot sue. [244]
Example 1 (benefit runs): In the L-T lease, T promises to make repairs. This promise
"touches and concerns the land" both as to benefit and burden, so benefit and burden run.
Thus if T assigns to T1, T1 is personally liable for making the repairs. Conversely, if L
assigns to L1, L1 can sue T (and T1 if T has assigned to T1) to enforce this promise.
Example 2 (burdens runs, but benefit does not): In the L-T lease, T promises not to
compete with L’s use of certain other property. If T assigns to T1, T1 is liable not to
compete. But if L assigns to L1, in most states L1 cannot enforce the promise against
either T or T1.
1. "Touch and concern" test: The burden runs if the promise "touches and
concerns" the promisor’s assignee’s interest in the land. Similarly, the benefit
runs if the promise "touches and concerns" the promisee’s assignee’s interest in
the property. [244]
2. Normally both or neither: Normally, either the benefit and burden will both
run, or neither will run. (The non-competition situation described in Example 2
above is one of the few examples where this is not true.) [244 - 245]
C. Rights after T assigns: Here are the rights of the parties after T assigns to T1 his
rights under the L-T lease:
1. T’s liability to L: After the assignment, T remains liable to L (whether T’s
promise to L does or does not "touch and concern" the land). (Example: T remains
liable for the rent after assignment to T1. This is true even if L consents to the
assignment, and even if L accepts some rent payments from T1.) [246]
2. T’s rights against T1: After the assignment, T1 becomes primarily liable, and
T is only secondarily liable. Therefore, if L sues T when T1 does not make the
rent payments, T can then sue T1 for the amount that T has had to pay (even if T1
never expressly assumed the lease duties at the time of the assignment). [246]
3. L’s rights against T1: Assuming that T1 does not make any specific promises
of performance when he takes the assignment, T1 is liable only for those promises
made by T whose burden runs with the land. [247]
Example 1: T1 is liable to L for rent, since the burden of T’s original rent
promise ran with the land. Thus T1 must make the rent payments even if he did
not expressly promise either T or L that he would make these payments.
Example 2: In the original L-T lease, T promises to keep the premises insured.
Assume that the burden of this promise does not run with the land (the majority
rule). If T assigns to T1 and T1 does not make any promise of insurance, T1 is not
liable for failing to insure the property (though L can terminate the lease for
breach if T1 does not do so).
a. Assignment by assignee: But T1 remains liable (even on promises
whose burdens run with the land) only for the period when he is in actual
possession. If he re-assigns, he is not liable for breaches by the
subsequent assignee. [248] (Example: T assigns to T1. T1 remains in
possession for six months, then assigns to T2. T1 is liable for the rent that
accrued during the six months he was in possession, but not for any rents
accruing after he left possession and T2 took possession.)
b. Assumption: However, if T1 assumes the lease (i.e., expressly
promises T that T1 will obey all terms of the L-T lease), then T1 is liable
both to T and L for all T’s obligations, including those accruing after T1
re-assigns to T2. [248]
D. Assignment by L: Now, assume that L assigns his rights to L1. Here, the same rule
applies: L1 has the burden of covenants whose burden runs with the land, and has the
benefit of covenants whose benefit runs with the land. [249 - 251]
1. Repair obligation: Thus if L promised T that he would keep the premises in
repair, L1 is liable for making the repairs after the sale. (Also, the implied
warranty of habitability, if it applies at all, probably binds L1 just as it bound L.)
E. Agreement by the parties about transfer: All of the above assumes that the lease
itself contains no provisions restricting transfer. Most leases, however, contain a promise
by T that he will not assign or sublease his interest without L’s consent. [251 - 252]
1. Generally enforced: Most states enforce such a clause, even if L is completely
unreasonable in refusing to consent to the transfer.
a. Strict construction and waiver: However, courts construe such antitransfer clauses strictly, and are quick to hold that L waived the benefit of
the clause. (Example: If L knowingly accepts rents from T1 he will
probably be held to have waived his right to refuse to consent to the
transfer.)
b. Consent to second transfer: Also, if L consents (or waives his
objection to) a particular transfer, he is usually held to have also waived
his right to a subsequent transfer, under the rule of Dumpor’s Case.
(Example: L consents to T’s assignment to T1. In most states, L is also
held to consent to T1’s further assignment to T2.) [251]
2. Modern trend: An increasing minority of states hold (often by statute) that
even if the lease says that L has an unconditional right to refuse to consent to a
transfer by T, the consent may not be unreasonably withheld. (In such a state, L
should get a lease provision giving him the right to make his own deal directly
with T1 – this way, if T1 is willing to pay more than the original lease amount, L,
not T, gets the benefit.) [252]
REAL ESTATE TRANSACTIONS
Brokers
 Also called agents or realtors
 Seller normally signs a contract with the broker by which the broker agrees to look for
prospective buyers and show the property to them in exchange for commission
o Three major types of broker listing agreements:
 Exclusive right to sell
 gives the broker the right to collect the commission if the property
is sold to anyone during the period of the contract, even if the sale
is to a buyer that the owner found without the broker’s help
 Exclusive agency
 Entitle the broker to the commission, or share of the broker, but not
if the property is sold by her efforts or the efforts of any other
broker, but not if the property is sold by the owner
 Open, or nonexclusive
 Broker is entitled to a commission only if she is the firstperson to
procure a buyer who is ready, willing, and able to buy. If anyone
else, including the seller, finds a buyer first, the broker gets no
commission
 Outlawed/discouraged listing agreements
o Net Listings:
 Where the broker takes her commission out of the purchase price to the
extent it exceeds the sellers price
 Problematic b/c broker has an incentive to induce the seller to list
the property for a price far below its fair market value b/c the
broker will pocket the excess. Conversely, if the property is sold at
fair market value and is listed at that amount, the broker recovers
nothing and therefore may have an incentive not to tell the seller
about an offer that will earn the broker nothing
o Option Listings:
 Where the broker promises to buy the property at a set price, revealing the
commission only when the option is exercised.

The broker has an incentive to suggest to the seller that the
property is worth less than it really is because the broker can resell
the property
Real Estate Transactions - Deeds and Title Protection
Essential Terms
 The Deed must have the following elements to satisfy the SOFperty:
 Identify the parties
 Describe the property being conveyed
 State the grantors intent to convey the property interest in question and
 Contain the grantors signature
 Most deeds are and should be recorded to protect the grantee’s rights
o To be recorded, most states require the deed to be acknowledged by a public
notary or other official and some require one or more witnesses to the transaction
o Witness, notary and acknowledgement not necessary to make the deed valid but
are needed to be recorded
 The land being conveyed must be described in the deed
 The description must be sufficiently precise to locate the boundaries of the property
o Boundaries may be defined by reference to official surveys. Plats or by metes and
bounds
 No need to mention consideration in deed however important because real estate
transactions only deal with purchases rather than gifts
Delivery
 In order to be recorded a deed must be delivered
 A future interest of a deed is effective on delivery
 Types of Delivery:
o Actual
o Constructive
 Writing a deed and engaging in conduct that demonstrates an intent to
transfer ownership is sufficient to constitute delivery
 Engaged in conduct to effectuate the intent to transfer by giving the deed
to a 3rd party
 When deed is given to a third party and grantor has relinquished control
over the property
 Constructive delivery valid so long as the grantor has relinquished control
and put the deed beyond the grantors control
o Conditional
 Courts are split
 At common law conditions on a deed were impermissible; grantor may not
condition delivery to the grantee
 Modern law generally allows conditions; courts then look at when the
condition is effective
 When condition written deed, ineffective to transfer title:
INVALID



If left out of the deed (oral conditions) are inadmissible:
INVALID
If written condition: PRESSUME VALID
Some other courts ignore conditions making the conveyance valid
Title Protection
 Title Covenants
o Present covenants: covenants are breached, if at all, at the time of the
conveyance; DOES OT RUN WITH THE LAND BUT USUALLY
TRANSFERRABLE
1. Seisin: “I own what I say I am transferring to you”; the grantors promise
that he owns the property interest he is purporting to convey to the grantee
2. Right to Convey: “ I have authority to transfer title to you”; the grantor’s
promise that he has the power to transfer the interest purportedly conveyed
to the grantee
3. Against encumbrances: “I promise that there are no encumbrances
except those that I have disclosed”; grantor’s promise that no mortgages,
lease, liens, unpaid property taxes, or easements encumber the property
other than those acknowledged in the deed itself
T: I convey/transfer title of Blackacre to B
Unknown to B T is a tenant in common with J: problem with seisen and Right to
Convey
T: I convey/grant title to Blackacre to B
T the record owner but C has gained title through Adv. Possession: Problems with
Seisen and Right to Convey
o Future covenants: covenants are breached, if at all, after the closing, when the
disturbance to the grantee’s possession occurs. The SOL starts to run when the
grantee’s possession is disturbed; RUNS WITH THE LAND
1. Warranty: the grantor promises to compensate the grantee for any
monetary losses occasioned by the grantor’s failure to convey the title
promised in the deed; “I promise to compensate you for monetary loss if
someone claims superior title”
 General Warranty Deed:
o covenants against all defects in title
o includes present and future covenants (all 6)
 Special Warrant Deed:
o limits the covenant to defects in title caused by the
grantor’s own acts but not only by the acts of prior owners
 Quitclaim Deed:
o name generally used for deed that contains no warranty of
title whatsoever
o purports to convey whatever interests in the property are
owned by the grantor
o does not promise that the grantor in fact owns the property
interest that the grantor claims to own or any interest
2. Quiet Enjoyment: grantor promises that the grantee’s possession will not
be disturbed by any other claimant with a superior lawful title; breached at
the time of disposition; “I promise no one w/superior title will dispossess
you”
3. Further Assurances: requires seller to take further steps to cure defects in
the grantor’s title; “I promise to cure any defects on title”
Remedies for Breach of Warranty
 Damages for breach of warranty, seisen, right to convey and quiet enjoyment:
o Generally measured by the price paid for the property that has been lost. This
price is generally near the fair market value of the property at the time of closing.
 Damages for breach of covenant against encumbrances:
o Either the cost of removing the encumbrance or
o The difference between the value of the property w/o the encumbrance and with it
Recording Acts


The Recording System
o Deed is valid when it
 Is delivered
 Satisfies the statute of fraud
o Intended to provide buyers of real property w/the security of knowing that they
will really own the property interests they are buying
o The system can be used to find out whether the person purporting to own and sell
the property indeed owns it and to ensure that neither the owner not any of his
predecessors in interest has conveyed to someone else all or part of the property
interests that the seller has contracted to sell to the buyer
o Common Law Rule – “First in time, first in right”; theory that grantor cannot
convey what they do not own
o Exception to the Common Law Rule
 Recording Acts
1. In general protects a certain class of purchasers: bona fide
purchaser for value BFP4V
2. Each state has recording acts and defines what is necessary to
attain the BFP4V status; if you don’t meet the qualifications for the
BFP4V common law applies
3. Bona fide purchaser is generally someone who has purchased
property in good faith and w/o notice
4. Purchaser For Value - excludes donees, heirs or devisees;
purchase must be made for a nominal amount
 Modern Rule – a subsequent purchaser who has no notice of a prior
conveyance and who records his interest will prevail over any prior
unrecorded interest.
How to Conduct a Title Search

o Tract Index
o Grantor-grantee Index
 Grantor index: all instruments are listed both alphabetically and
chronologically by the grantor’s last name
 Grantee Index: all instruments are listed both alphabetically and
chronologically by the grantee’s last name
 Index describes
1. The grantor and grantee
2. A description of the land
3. The type of interest conveyed
4. The date recorded
5. And the book and page numbers where a copy of the document can
be found
Types of Recording Acts (exception to the CL rule “first in time first in right)
o Race Statutes NOT TESTED MS PRUITT
 When a successive purchaser of property has recorded their deed first
 True even if the person who records first knows about an earlier
conveyance to someone else
o Notice Statutes (Florida is a Notice statute state)
 When a subsequent purchaser for value prevails over an earlier purchaser
only if the subsequent purchaser did not have notice of the earlier
conveyance
 Notice Problems
1. O conveys to A. A does not record. O conveys to B. B records.
Who prevails?
o CL
o Notice Statute
2. O conveys to A. A does not record. O conveys to B. B does not
record. Who prevails?
o CL
o Notice Statute
3. O conveys to A. A records. O conveys to B. B records. Who
Prevails?
o CL
o Notice Statute
o Race-Notice Statutes
 When a subsequent purchaser prevails over prior unrecorded interest only
if she
1. Had no notice of the prior conveyance at the time she acquired her
interest and
2. Records before the prior instrument is recorded
 Race-Notice Problems
1. O conveys to A. A does not record. O conveys to B. B records.
Who prevails?
o CL: A prevails
o Race-Notice: B prevails.
2. O conveys to A. A does not record. O conveys to B. B does not
record. Who prevails?
o CL: A prevails
o Race-Notice: A prevails
3. O conveys to A. A records. O conveys to B. B records. Who
prevails?
o CL: A
o Race-Notice: A prevails because B does not satisfy the
recording statute. B was on constructive notice so B fails
second prong of the Race-Notice exception
 Chain of Title Problems
o Although an instrument has actually been recorded and indexed in the recording
office, the instrument might not have been recorded in a way as to give notice to
the subsequent purchasers
o Chain of title - Period or evolution of a deed of title’s existence.
o
Sabo V Horvath
Facts: Lowery conveyed the same 5 acre tract of land twice; first to Horvath, then Sabo. Lowery
did so in each instance by quit-claim deed. Lowery’s interest originated out of a land patent. He
conveyed the land to Horvath prior to receiving the patent and to Sabo afterward.






OLowery: AHorvath (Records)
OOUS: OLowery (Records)
o OLowery: BSabo (Record)
This is a Race-Notice jurisdiction
Crt recognized Lowery complied with the statute to a sufficient extent so as to have an
interest in land
At CL: Horvath prevails
At Race-Notice: Sabo prevails
o Sabo’s were not on constructive notice of the deed; although Horvath recorded the
deed in 1970, it was a wild deed b/c it was outside the chain of title. If the Sabos
went to the grantor’s index they would have found only Lowery and the US gov’t
listed. Lowery recorded his deed in 1973. The Sabos would then turn to the
grantee index look under Lowery from 1973 forward. They would have not
discovered the deed recorded in 1970 by the Horvaths (wild deed) therefore could
not be said to have constructive notice of its existence. Because this element of
the Race-Notice statue is met Sabo prevails.
o Exceptions to the recording acts are Race-Notice and Notice. Alaska goes by the
Race Notice. The type of deed conveyed is a quit claim claim. Both Sabo and
Horvath were conveyed a quit claim. Sabos are asserting that their interest
supersedes the Horvaths under Alaska law. Court must decide whether the Sabos
Issue: Whether land conveyed before land patent was issued, outside the chain of title, satisfied
the constructive notice requirement to the subsequent purchaser?
Holding: No
Procedure: Superior ct ruled for Horvath’s interest as a warranty deed from Lowery. This
constituted constructive notice. Sabo did not receive constructive notice. Recording was outside
the chain of title. Reversed.
Rule: Conveyance of real property is void as against a subsequent innocent purchaser for a
valuable consideration of the property whose conveyance is first duly recorded. An unrecorded
instrument is valid as against one who has actual notice of it. A purchaser has notice only of
recorded instruments that are within his chain of title.
Ct. Rationale: At the time Lowery executed the deed to the Horvaths he had complied with the
statute to a sufficient extent so as to have an interest in the land which was capable of
conveyance. Because the Horvaths recorded their deed prior to Lowery receipt of the land
patent, Sabos did not have constructive notice by the recording system. Sabo’s interest was
therefore the first recorded interest in the tract of land.
PL A: (Horvath) Pl recorded the deed in accordance with the law, prior to the conveyance and
recording of Def. Def recording was outside the chain of title
Def A: The deed was not recorded before the land patent was granted, and therefore the
recording by PL was not notice.

Notice
1. In both notice and race-notice jurisdictions, only subsequent purchasers w/o
notice of the earlier conveyance can prevail over the earlier grantee
2. Constructive notice
 Documents duely recorded within the chain of title
 under the recording system will also deprive a subsequent purchaser of
protection
 Exists when the grantee, by conducting a reasonable title search, would
have discovered the earlier conveyance
3. Inquiry Notice
 Imputed if the subsequent purchaser would have discovered the
conveyance had she acted reasonably to investigate facts at her disposal
4. Estoppel by deed
 When a grantor purports to convey a property interest she does not own to
a grantee, and the grantor subsequently comes to own the property interest
by receiving the deed, ownership is automatically vested in the grantee.
 Changing the facts of Sabo v Horvath:
o Assume the Horvaths discover, before L sales to the Sabos
that L did not obtain title to the property until after he sold
the property to them. In an action between Horvaths and
Lowery who will prevail? The Horvaths under the theory
of Estoppel by Deed
 O conveys property to A that A

5. Wild Deeds
 Deeds recorded outside the chain of title
 Recorded too early
o Sabo v Horvath: the Sabos recorded before Horvath
actually had title
 Recorded too late
6. Shelter Doctrine (exception to the Recording Acts)
 Allows a bona fide purchaser to convey to a third party even if the third
party is on notice of an earlier conveyance
 Using Sabo v Horvath as an exception: Assume that the Sabos
convey their interest to C. C knows of the conveyance of the
conveyance to the Horvaths. In an action between the Horvaths
and C, who prevails?
7. Fraud
PROBLEMS pg 792-93
1. O to A (A does not record
O to B (B has notice of the earlier conveyance to A)
B records. A records
B sues A for title
2. O to A (A does not record)
O to B (B has no actual notice of the earlier conveyance to A)
B records
A records
B sues A for title
3. O to A (A does not record)
O to B (B has no actual notice of the earlier conveyance to A)
A records
B records
B sues A for title
4. O to A (A does not record)
A to B (B records)
O to Z (Z has no actual notice of deed from O to A; Z records)
B records deed from O to A
5. O to A (A does not record
O to X (X has notice of conveyance from O to A
X records
A records
X conveys to Z (Z has no actual notice of deed from O to A)
6. O to A (A does not record)
O to X (X has notice of conveyance from O to A)
A records
X records
X conveys to Z (Z has no actual notice of deed from O to A)
7. O to A (A does not record)
O to X (X has no actual notice of conveyance from O to A)
X records
A records
X conveys to C (C has notice of conveyance from O to A)
Fraud and Forgery
Zurstrassen v Stonier
 Facts:
o Jun 97 K and R purchase
o Spt 97 K goes to Germany
o Sept 25 97 deed recorded from K to R
o “ “ K and R sign a document
o Jun 98 R sells t
 Zurtrassen, a citizen of Germany, and his brother, Rolf, a US citizen, acquired title to two
vacant lots in Indian County. Zurt returned to Germany leaving his brother in charge of
commencing construction on the lots so that they could be sold. While construction
commenced on one lot, a deed purporting to convey Zurt interest in the lots to his brother
was recorded into public records. Zurt claims forgery with no knowledge of conveyance
or recording. Zurt returned from Germany and the brothers agreed to sell the constructed
home. Zurt met with the realtor who researched the title and informed Zurt that his name
did not appear on the last deed in the chain of title. The title was vested in the brothers
name alone. Zurt asked the brother about it and was told that he did not know why his
name did not appear on the did but that he should not concern himself with it. As a
precaution the brothers signed an agreement recognizing Zurts interest and the terms of
their intial agreement regarding the properties. The agreement stated that title was in the
brothers name alone and it outlined the process of selling the properties and distributing
the proceeds. After Zurts return to Germany, the brother transferred both lots to Stonier
by quitclaim deed. Stonier executed a warranty deed on one lot to the Wihlborgs which
was mistakenly recorded in Brevard County. Zurt returned to the states, began
investigating title and uncovered the forged deed and subsequent deeds. He institutied
suit of quit title and for rescission and filed a notice of lis pendens 13 days b/4 the
Wihlborgs deed was recorded in Indian county. Stonier and Wihlborg claim that Zurt is
estopped from asserting any rights because he acknowledged in his agreement between
he and his brother that the property was in his brothers name and he had delayed in
objecting to any purported fraud
 Equitable estoppels
o Elements of estoppels:
 Representation of a material fact by the party stopped to the party claiming
the estoppels that is contrary to the fact later asserted by the stopped party
 Reliance of that representation by the party claiming the estoppels
 Detrimental change of position due to such reliance
o Estoppels in the context of title to disputed land:
 Estoppels prevents a party who by acts, words, or silence allows another to
purchase title to property under and erroneous opinion of title, without
making known his claim, from afterwards exercising his/her legal right
against such person.
 Waiver of Fraud:


o A waiving party must possess all of the material facts in order to constitute waiver
o Elements
 The existence at the time of the waiver of a right, privilege, advantage, or
benefit which may be waived
 The actual or constructive knowledge of the right and
 Intention to relinquish the right.
Ratification of fraud:
o Occurs where a party with full knowledge of all the material facts make an
affirmative showing of his or her express or implied intention to adopt an act or
contract entered into without authority
Generally when a deed is forged, title is void and any subsequent purchaser gets nothing
McCoy v Love (Fraud)
 Mary Elliot was in illiterate elderly woman who owned an undivided 1/5th interest in the
minerals underlying a 75 acre tract of land. B G Russell offered to purchase her entire
interest, but she refused. She orally agreed to sell Russell 2 of the 13 to 15 mineral acres
she owned for 3300 dollars. Russell prepared the mineral deed, and instead of the 2 acres
agreed upon, he entered a clause which listed a 1/5 interest in and to all oil, gas and other
minerals on the entire 75 acre tract. Elliots daughter looked over the document, and
although she did not understand it, advised Elliot that she guessed it was alright. Several
days later Russell acknowledged the error and offered to pay Elliot 15k for the interest
conveyed. She refused and Russel purported to reconvey the portion of the interest Elliot
did not intend to sell. Prior to this however Russell conveyed a substantial portion of the
same mineral rights to McClelland, who later conveyed to four other parties. Elliot
remained ignorant the subsequent transactions until she tried to sell more of her mineral
rights and a title search revealed them. She sued for cancellation of deed
 RULE:
o A bona fide purchaser has the right to rely on the record title of his grantor, but
this protection only extends to those purchasing a legal title. The recording of a
void or forged deed is legally insufficient to create a legal title, and afford no
protection to those claiming under it.
o Fraud in the inducement of title renders a legally effective deed voidable in
equity.
NOTES AND QUESTIONS
 Void or Voidable
o When a deed has been obtained by fraud or forgery, it is classified as either void
or voidable
o Void
 When a deed conveys no title to the grantee and the grantee has no power
to convey title to another; the bona fide purchaser is not protected
o Voidable
 When a legally effective deed is induced by fraud
 Forgery (grantor unaware that he is giving away anything)
o Forged deeds are absolutely void and therefore transfer no interest to the grantee
o Nor can they be the basis of a transfer from the grantee to a subsequent bona fide
purchaser even though that purchaser has no knowledge of the forgery
o Grantor gets property back
 Fraud (grantor knows they are transferring something)
o Deeds obtained through fraud are voidable rather than void
o They are voidable by the defrauded victim – the one fraudulently induced to
transfer the property
o Once the property passes to a bona fide purchaser without notice of fraud, the
conveyance cannot be rescinded.
o Grantor cannot get title back
Deeds and Title Protection
 Formalities
o Writing that satisfies the SOF
 Intent
 Delivery
 Title Covnenants
o General Warranties (covers acts prior to grantees)
 Present
 Seisen
 Right to Convey
 Encumberances
 Future
 Warranty
 Quit Enjoyment
 Further Assurances
o Special Warranties (only for acts by grantor)
 Recording Acts
o Exceptions; must be a BFPV
 Race
 Notice
 Race-Notice
 Marketable Title Acts NOT TESTED MS PRUITT
 Title Insurance
o Provides some protection for later defects in title; required before closing
 Title Registration
Marketable Title Acts
 Attempt to define how far back one must search in the grantor-grantee index by limiting
searches to 30-40 years
 To preserve prior claims, owners must record their interest or file a notice of claim every
30 years or so after the recording of their initial deed.
Title Insurance
 In most states title insurance companies have emerged to perform the work connected
with a title search
Title Registration
Real Estate Finance
MORTGAGES
Debtor Protection Legislation
Regulating the Foreclosure Process
Central Finacial Services, INC v Spears
 Spears borrowed $1,250 from CFS to purchase real property; however he fell in arrears
on payment of the loan. CFS bought the property back through foreclosure sale for a toal
of $1,458, the amount of the indebtness due plus costs of the foreclosure. Two days later,
upon notice of the sale, Spears offered to pay the amount of the delinquency, but was told
he was too late. Two weeks later CFS sold the property to Stewart for $4k. Stewart then
sold the property to Henderson for $6,500. Spears sued to set aside the foreclosure sale
alleging inadequate sale price. The trial court found tha the FMV of the property was
$7k and the consideration paid to spears was so grossly inadequate as to shock the
conscience. Trial court ordered CFS to pay Spears the difference between the FMV and
the price paid at the foreclosure sale. CFS appealed
 RULE
o Mere inadequacy of price is not sufficient to set aside a foreclosure sale unless the
price is so inadequate as to shock the conscience of the court
Installment Land Contracts
 This is an alternative financing arrangement for purchasing real property
o The buyer makes a down payment to the seller, and signs a single contract with
the seller, in which the buyer promises to pay the rest of the purchase price to the
seller at the times and in the amounts specified in the contract. At the end of the
contract, the seller will convey title to the property to the buyer
o Liquidated damages
 Damages for breach of contract set in advance by the parties themselves as
part of their agreement
o Some states prohibit installment land contracts
o Others that allow installment land contracts may permit the seller to regain
possession of the property but will examine the amounts paid by the buyer to
determine whether they are grossly disproportionate to the damages suffered by
the seller.
 Damages that are too high are considered a penalty or forfeiture, and court
will order the seller to disgorge part of that amount back to the buyer.
Forfeiture
Stonebraker v Zinn
 The Zinns contracted to sell Stonebrakers real property for $25k. the Stonebrakers paid
$1,500 as a down payment and agreed to pay $189 a month, representing the balance at
9% annual interest. The contract provided that if they abandoned the property, the Zinns
liquidated damages would be the amount paid to that point. The Stonebrakers abandoned
the property after 1 year. They then sought to avoid the forfeiture by asserting the
liquidated damages provision was too high.
 RULE:
o Liquidated damages provision in land sale contracts are enforceable if the amount
is a fair estimate of the sellers actual damages
Making Mortgage Protection Nondisclaimable
Sebastian v Floyd
 Sebastian contracted to buy a home from the Floyds. Sebastina paid a down payment and
was to pay the balance of the purchase price, plus taxes, insurance and interest in monthly
installments. The contract contained a forfeiture clause that stated if Sebastian failed to
make any monthly payments and remained in default for 60 days, the Floyds could
terminate the contract and retain all payments previously made as rent a liquidated
damages. Subsequently, Sebastian missed 7 installments. The Floyds brought suit
seeking enforcement of the forfeiture clause amongst other damages
 RULE:
o In an installment land contract, equitable title passes to the buyer although legal
title to the property remains in the seller until the buyer has paid the entire
contract price or some agreed upon portion thereof
o Land sale contract and mortgage should be treated the same therefore, like a
mortgage, if a purchaser of property enters into an installment contract which
contains a forfeiture clause, and subsequently defaults on his payment, is entire
interest is not forfeited. Like a mortgagor, the purchaser under an installment
contract has the right to redeem the property by paying the full debt plus interest
and expenses incurred by the creditor due to the default.
NOTES AND QUESTIONS
1. Universal mortgage foreclosure protection
i. Installment land contracts are equivalent to mortgages and therefore must
be governed by the same rules. This gives buyers the full range of
protections available to mortgagors, including
1. Equity of redemption (the right to retain the property by paying the
rest of the purchase price at or before the foreclosure sale)
2. The procedural protections of the foreclosure statutes
3. The right to recover any proceeds of the foreclosure sale in excess
of the unpaid debt
2. Treating some installment land contracts as mortgages
3. Forfeiture
i. Where the buyer has no right of redemption under the installment land
contracts; thus the seller has the right to get the property back on the
buyers default and to eject the buyer from the property
EQUITABLE MORTGAGES
KOENIG V VAN REKEN


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
Koeing, while in financial distress, sought help from Reken in saving her home. She
Reken executed several documents:
o First document stated Reken would purchase the property, redeem it from
foreclosure and give Koenig the exclusive right to repurchase according to the
lease-option agreement
o Second document was a warranty deed which conveyed the property from Koenig
to Reken.
o Third document was a lease-option agreement for a period of 3 years at a fixed
monthly rate of $300. Also include an option to repurchase during the term of the
lease
Parties operated under the lease for approx 1 and ½ years until Koenif defaulted in a
monthly rental payment and was evicted. Koenig sued to have deed declared an
equitable mortgage
Equitable mortgage –
o When a transfer of a deed is intended merely to provide security for a loan rather
than a sale of the property
RULE:
o The controlling factor in determining whether a deed or equitable mortgage exists
is the intention of the parties
 Intention may be gathered from the circumstances attending the
transaction including the conduct and relative economic positions of the
parties and the value of the property in relation to the price fixed in the
alleged sale
NOTES AND QUESTIONS

Six factors to consider when determining whether an equitable mortgage exists
1. Whether a debt exists
2. The relationship of the parties
3. Whether legal assistance was available
4. The sophistication and circumstances of each party
5. The adequacy of consideration
6. Who retained possession of the property