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PROPERTY – KLEIN – FALL 2022
Chapter 1 – Introduction to Property (p. 3-68) ....................................................................................8
A.
What Can Be Owned? .............................................................................................................8
1.
Real Property ................................................................................................................................ 8
Edwards v. Sims (Ky. App. 1929) ....................................................................................................... 8
2.
Tangible Personal Property ........................................................................................................... 9
Popov v. Hayashi (Cal. Sup. Ct. 2002)................................................................................................ 9
3.
Intangible Personal Property ...................................................................................................... 10
Bowman v. Monsanto Co. (U.S. 2013) ............................................................................................ 11
In re Application of Maui Electric Co., Ltd. (Haw. 2017) ................................................................. 11
4.
B.
Beyond Private Property ............................................................................................................. 11
What Does Ownership Mean? ............................................................................................... 11
1.
The Rights to Possession & Use .................................................................................................. 12
2.
The Right to Transfer .................................................................................................................. 12
Johnson v. M’Intosh (U.S. 1823) ...................................................................................................... 12
3.
The Right to Exclude ................................................................................................................... 12
State v. Shack (NJ 1971) .................................................................................................................. 12
Jacque v. Steenberg Homes (Wisc. 1997)........................................................................................ 12
4.
The Right to Destroy ................................................................................................................... 13
Eyerman v. Mercantile Trust Co. (Mo. 1975) .................................................................................. 13
C.
Why Property Rights? ........................................................................................................... 13
D.
Beyond the Black Letter: The Rise of the Sharing Economy ..................................................... 14
E.
Skills Practice: Common Law Analysis & Outlining .................................................................. 14
F.
Chapter Review .................................................................................................................... 14
G.
Chapter Quiz ......................................................................................................................... 15
Chapter 2 – Gifts, Finders, and Adverse Possession (p. 69-133) .......................................................... 17
A.
Gifts ..................................................................................................................................... 18
B.
Finders ................................................................................................................................. 18
Armory v. Delamirie ........................................................................................................................ 19
Benjamin v. Lindner Aviation, Inc. ................................................................................................... 19
C.
Adverse Possession ............................................................................................................... 19
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Porter v. Posey ................................................................................................................................ 21
Chaplin v. Sanders ........................................................................................................................... 21
O’Keeffe v. Snyder ........................................................................................................................... 21
Lawrence v. Concord ....................................................................................................................... 21
D.
Beyond the Black Letter: Cybersquatting ............................................................................... 21
E.
Skills Practice: Common Law & Statutory Analysis ................................................................. 21
F.
Chapter Review .................................................................................................................... 21
G.
Chapter Quiz ......................................................................................................................... 25
Chapter 3 – Estates & Future Interests (p. 137-203)........................................................................... 27
A.
Overview of Estates & Future Interests .................................................................................. 27
1.
Historical Overview ..................................................................................................................... 27
2.
Basic Terminology & Themes ...................................................................................................... 27
B.
Present Estates ..................................................................................................................... 27
1.
The Basic Categories of Present Estates ..................................................................................... 28
White v. Brown................................................................................................................................ 29
2.
Defeasible Present Estates .......................................................................................................... 30
3.
A System for Labeling Estates & Future Interests ....................................................................... 30
Mahrenholz v. County Board of School Trustees ............................................................................ 31
C.
Future Interests .................................................................................................................... 31
1.
The Basic Categories of Future Interests .................................................................................... 31
2.
Remainders – A Closer Look........................................................................................................ 33
3.
Putting It All Together ................................................................................................................. 34
D.
Enhancing Marketability: Four Rules...................................................................................... 34
1.
The Destructibility of Contingent Remainders Rule.................................................................... 34
2.
The Rule in Shelley’s Case ........................................................................................................... 34
3.
The Doctrine of Worthier Title .................................................................................................... 34
4.
The Rule Against Perpetuities ..................................................................................................... 35
E.
Beyond the Black Letter: Dead Hand Control ......................................................................... 37
F.
Skills Practice: Drafting Savings Clauses ................................................................................. 37
G.
Chapter Review .................................................................................................................... 37
H.
Chapter Quiz ......................................................................................................................... 40
Chapter 4 – Landlord-Tenant Law ..................................................................................................... 44
A.
The Lease as Conveyance ...................................................................................................... 44
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Thompson v. Baxter ........................................................................................................................ 44
1.
B.
The Lease as Contract ................................................................................................................. 45
The Rights & Duties of the Parties ......................................................................................... 45
1.
Possession ................................................................................................................................... 45
Ernst v. Conditt ................................................................................................................................ 45
Slavin v. Rent Control Bd. Of Brookline ........................................................................................... 45
Sommer v. Kridel ............................................................................................................................. 45
Crechale & Polles, Inc. v. Smith ....................................................................................................... 45
2.
Maintaining the Premises ........................................................................................................... 46
Adams v. Woodlands of Nashua ..................................................................................................... 46
Teller v. McCoy ................................................................................................................................ 46
3.
Nondiscrimination....................................................................................................................... 46
The Fair Housing Act of 1968 .......................................................................................................... 47
C.
Beyond the Black Letter: Parking – There’s an App for That .................................................... 49
D.
Skills Practice: Client Counseling & Drafting a Residential Lease ............................................. 49
E.
Chapter Review .................................................................................................................... 49
F. Chapter Quiz............................................................................................................................. 50
Chapter 5 – Concurrent Ownership & Marital Systems ...................................................................... 53
A.
Concurrent Ownership .......................................................................................................... 53
1.
Classifying the Estate .................................................................................................................. 53
2.
Actions by a Single Cotenant ...................................................................................................... 55
In re Estate of Johnson .................................................................................................................... 55
3.
The Challenges of Shared Ownership ......................................................................................... 55
Parker v. Shecut............................................................................................................................... 57
Ark Land Co. v. Harper .................................................................................................................... 57
Uniform Partition of Heirs Property Act .......................................................................................... 58
4.
Modern Applications: Condominiums, Cooperatives, and Time-Share Properties .................... 58
Dutcher v. Owens ............................................................................................................................ 59
B.
Marital Property Systems ...................................................................................................... 59
C.
Beyond the Black Letter: New Forms of Concurrent Ownership .............................................. 59
D.
Skills Practice: Client Counseling & Negotiating a Tenants in Common Agreement .................. 59
E.
Chapter Review .................................................................................................................... 59
F.
Chapter Quiz ......................................................................................................................... 61
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Chapter 6 – From Private Property to the Commons ......................................................................... 63
A.
Private Property.................................................................................................................... 63
B.
Public Property ..................................................................................................................... 63
Illinois Central Railroad Co. v. Illinois .............................................................................................. 63
C.
Commons Property ............................................................................................................... 63
The Tragedy of the Commons ......................................................................................................... 64
D.
Beyond the Black Letter: Mining Asteroids in Outer Space ..................................................... 64
E.
Skills Practice: Statutory Law & Implementing Regulations .................................................... 65
F.
Chapter Review .................................................................................................................... 65
G.
Chapter Quiz ......................................................................................................................... 66
Chapter 7 – Real Estate Transactions ................................................................................................ 68
A.
Overview of the Real Estate Transaction ................................................................................ 68
1.
The Timeline................................................................................................................................ 68
2.
The Real Estate Broker ................................................................................................................ 68
Fairbourn Commercial Inc. v. American Housing Partners ............................................................. 69
Ellsworth Dobbs, Inc. v. Johnson ..................................................................................................... 70
3.
Discrimination in the Sale of Real Property ................................................................................ 70
Texas Dep’t of Housing & Community Affairs v. The Inclusive Communities Project, Inc. .............. 70
B.
The Real Estate Contract ....................................................................................................... 70
1.
The Statute of Frauds .................................................................................................................. 70
Hickey v. Green................................................................................................................................ 70
2.
Equitable Conversion .................................................................................................................. 71
Brush Grocery Kart, Inc. v. Sure Fine Market, Inc. ........................................................................... 71
3.
C.
Remedies for Breach of Contract ................................................................................................ 71
The Physical Condition of the Property .................................................................................. 71
1.
The Seller’s Duty of Disclosure.................................................................................................... 71
Stambovsky v. Ackley ...................................................................................................................... 72
2.
D.
Flood Risk & Federal Insurance ................................................................................................... 72
Financing – Mortgages & Foreclosure .................................................................................... 72
1.
The Mortgage .............................................................................................................................. 72
Proctor v. Holden............................................................................................................................. 73
2.
Foreclosure ................................................................................................................................. 74
Greater Southwest Office Park, Ltd. V. Texas Commerc. e Bank Nat’l Ass’n .................................. 74
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Horne v. Harbour Portfolio .............................................................................................................. 74
E.
Title Security ......................................................................................................................... 74
1.
The Contract – The Promise of Marketable Title ........................................................................ 75
Lohmeyer v. Bower .......................................................................................................................... 75
2.
The Deed – Title Warranties ....................................................................................................... 75
Brown v. Lober ................................................................................................................................ 76
3.
Title Insurance ............................................................................................................................. 76
Riordan v. Lawyers Title Insurance Corp. ........................................................................................ 76
F.
Beyond the Black Letter: Climate – The Nest Real Estate Bubble? ........................................... 76
1.
Norfolk Sea Level Rise Takes Shine Off Waterfront Homes........................................................ 76
G.
Skills Practice: Reviewing Purchase Offers ............................................................................. 76
H.
Chapter Review .................................................................................................................... 76
I.
Chapter Quiz ......................................................................................................................... 79
Chapter 8 – The Recording System.................................................................................................... 83
A.
The Chain of Title .................................................................................................................. 83
1.
Searching the Chain of Title ........................................................................................................ 83
2.
Matters Potentially “Outside” the Chain of Title ........................................................................ 84
First Properties, L.L.C. v. JPMorgan Chase Bank ............................................................................. 84
Witter v. Taggart............................................................................................................................. 84
B.
The Recording Acts ............................................................................................................... 84
1.
Overview of the Recording Acts.................................................................................................. 84
2.
Protecting the Bona Fide Purchaser ........................................................................................... 86
Waldorff Insurance & Bonding, Inc. v. Eglin National Bank ............................................................ 86
Daniels v. Anderson ......................................................................................................................... 86
C.
Beyond the Black Letter: Evaluating the Recording System ..................................................... 86
D.
Skills Practice: Drafting Tenant Estoppel Statements .............................................................. 86
E.
Chapter Review .................................................................................................................... 86
F. Chapter Quiz............................................................................................................................. 88
Chapter 9 – Contractual Limits & Beyond: Easements........................................................................ 92
A.
Overview .............................................................................................................................. 92
B.
Creation................................................................................................................................ 92
1.
Express Easements ...................................................................................................................... 93
Estate of Thomson v. Wade ............................................................................................................ 93
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2.
Implied Easements ...................................................................................................................... 93
Traders, Inc. v. Bartholomew .......................................................................................................... 94
3.
Easements by Prescription .......................................................................................................... 94
Daytona Beach v. Tona-Roma, Inc. ................................................................................................. 95
4.
C.
Easements by Estoppel ............................................................................................................... 95
Scope, Transferability, and Termination ................................................................................ 95
1.
The Scope of Easements ............................................................................................................. 95
Brown v. Voss .................................................................................................................................. 96
2.
The Transferability of Easements ............................................................................................... 97
Heydon v. MediaOne ....................................................................................................................... 98
Miller v. Lutheran Conference & Camp Association ........................................................................ 98
3.
D.
The Termination of Easements ................................................................................................... 98
Conservation Easements ..................................................................................................... 100
U.S. v. Blackman............................................................................................................................ 100
E.
Beyond the Black Letter: Conservation Easements – What’s in a Name? ............................... 100
F.
Skills Practice: Drafting an Easement ................................................................................... 100
G.
Chapter Review .................................................................................................................. 100
H.
Chapter Quiz ....................................................................................................................... 102
Chapter 10 – Contractual Limits & Beyond: Running Covenants ....................................................... 106
A.
Traditional Doctrine: Real Covenants & Equitable Servitudes ............................................... 106
1.
Real Covenants.......................................................................................................................... 106
2.
Equitable Servitudes ................................................................................................................. 108
Tulk v. Moxhay .............................................................................................................................. 109
Neponsit Property Owners’ Ass’n, Inc. v. Emigrant Industrial Sav. Bank ...................................... 110
B.
Termination & Nonenforcement of Covenants ..................................................................... 110
Shelley v. Kraemer ......................................................................................................................... 111
Vernon Township Volunteer Fire Dept, Inc. v. Connor .................................................................. 112
C.
Modern Applications: Common Interest Communities & Conservation Easements ............... 113
1.
Common Interest Communities ................................................................................................ 113
Nahrstedt v. Lakeside Village Condominium Association ............................................................. 115
2.
Conservation Easements Revisited ........................................................................................... 115
D.
The Restatement (Third) of Property, Servitudes ................................................................. 115
E.
Beyond the Black Letter: Forever is a Long Time .................................................................. 115
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F.
Skills Practice: Policy-Based Arguments ............................................................................... 116
G. Chapter Review ...................................................................................................................... 116
H. Chapter Quiz .......................................................................................................................... 118
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Chapter 1 – Introduction to Property (p. 3-68)
Property – a set of rights & duties among people with respect to things
Bundle of Sticks vs. Web of Interests


Bundle (1) Right to Possession (2) Right to Use (3) Right to Transfer (4) Right to Exclude (5) Right
to Destroy
“An interconnected web of relationship between people and an object, and among people”
A. What Can Be Owned?
1. Real Property
Real Property (real estate or realty) – rights in land & the fixtures attached to it
Edwards v. Sims (Ky. App. 1929)
 Ad Coelum Doctrine
 Under Kentucky law, one who holds exclusive property rights to surface lands also
possesses exclusive property rights to subterranean areas beneath the s urface
lands.


Compare dissent: rejecting ad coelum doctrine & arguing cave belongs to owner of entrance,
particularly where labor is invested
Airspace: U.S. v. Causby, cutting back ad coelum doctrine & restricting surface owners’ airspace
rights to an undefined area immediately above the land
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Eminent domain - allows federal, state, and local governments to condemn private
property for public use in appropriate cases provided they pay just compensation
2. Tangible Personal Property
Tangible Personal Property (personalty or chattels) – rights in movable things

Can include living things
Popov v. Hayashi (Cal. Sup. Ct. 2002)
 When a person completes a significant portion of the steps to achieve possession
of an item but is thwarted due to the unlawful conduct of another, that person is
entitled to a pre-possessory interest of the item.
 Recognizing ownership of abandoned baseball in first party to exercise “complete
control,” but ordering an equitable division where an unruly mob made it
impossible to determine the first possessor.

Court notes virtues of ambiguity in definition of “possession” as promoting flexibility & fairness,
similar to “crystals & mud” property rules identified by Carol Rose.
Crystals & Mud (Carol Rose):


Crystals, “hard-edged rules… signal to all of us, in a clear, & distinct language, what our
obligations are & how we may take care of our [property] interests”
Mud, rules riddled with “exceptions & equitable second-guessing”
Rules of Possession:

Bernhardt Rule - possession requires both physical control over the item and an intent to control
it or exclude others from it
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

Brown Rule - orthodox view of possession regards it as a union of the two elements of the
physical relation of the possessor to the thing, and of intent -- this physical relation is the actual
power over the thing in question, the ability to hold & make use of it… and manifested intent to
control it
Gray's Rule - actor must retain control of the ball after incidental contact with people and things
Fox—Pierson v. Post (1805), recognizing ownership of wild fox on uninhabited waste land
in farmer who killed it, despite custom awarding title to first party in hot pursuit with a
reasonable prospect of capture.
Whale—Ghen v. Rich (Mass. 1881), recognizing ownership of whale in fish erman who
mortally wounded it, even though whale did not remain in fisherman’s control and
floated to shore.
3. Intangible Personal Property
U.S. Constitution, art. I, §8, cl. 8.
“The Congress shall have power . . . to promote the progress of science and useful arts,
by securing for limited times to authors and inventors the exclusive right to their
respective writings and discoveries.”


Gives Congress power to recognize time-limited exclusive rights in authors and inventors;
balances policy of stimulating invention with policy of protecting consumers/public interest.
Congress has exercised its constitutional authority by legislating on copyrights, patents, and
trademarks.
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Bowman v. Monsanto Co. (U.S. 2013)
 Doctrine of Patent Exhaustion
 Interpreting DPE narrowly and holding farmer’s replanting of subsequent
generations of seeds constitutes infringing copying, rather than permissible use.
 Case shows overlapping ownership of intellectual property between inventor (who
has broad exclusionary rights for abou t 20 years to encourage invention) and
purchaser (whose replanting would weaken patent’s value).
In re Application of Maui Electric Co., Ltd. (Haw. 2017)
 Holding state approval of utility’s purchase of nonrenewable fossil fuels implicates
constitutional right, protected by due process remedy of hearing that considers
the effect of fossil fuels and greenhouse gas emissions.
 Case shows minority jurisdiction with constitutional environmental rights.
 Case also raises question of whether intangible personal pr operty enjoys
traditional bundle of rights and traditional remedies (trover and replevin).
4. Beyond Private Property
Private property - Generally features strong rights of exclusion; can be shared by more
than one owner.
Public (or “state”) Property - Owned by a unit of government, generally to promote the
interests of the collective citizenry.
Commons - Generally features broad use rights, but no exclusionary rights, rare in a
mature society.

Four global commons include (1) The High Seas, (2) The Atmosphere, (3) Outer Space, & (4)
Antarctica.
B. What Does Ownership Mean?
William Blackstone - "That soul and despotic dominion which one man claims and
exercises over the external things of the world, in total exclusion of the right of any other
individual in the universe. "
John Lewis - "The dullest individual among the people knows and understands that his
property and anything is a bundle of rights. "
Justice Cardozo - "The privilege of uses only one attribute, among many, of the bundle of
privileges that make up property or ownership. The state is at liberty, if it pleases, to tax
them all collectively, or to separate the fagots and lay the charge distributively. "
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1. The Rights to Possession & Use
2. The Right to Transfer
Johnson v. M’Intosh (U.S. 1823)
 Holding Native American tribes are mere occupants of the land “domestic
dependent nations” and are incapable of transferring title to others .
 Created Discovery Doctrine - European nations assumed free title to lands they
discovered. Thus, NA on those lands retaine d only a right of occupancy but could
not be considered owners of the land.
 Indian Title Concept - The right of Indians to occupy lands in the US over which
they had sovereign prior to conquest by the Whiteman is not a property right but
amounts to a right of occupancy which the sovereign grants.
3. The Right to Exclude
State v. Shack (NJ 1971)
 Limiting farmer’s right to exclude aid workers from his property to protect farm
workers’ rights of dignity, privacy, and association, and explaining that rights are
relative.
Jacque v. Steenberg Homes (Wisc. 1997)
 Upholding landowners’ right to exclude mobile home delivery company through
award of punitive damages, even where nominal damages were only $1 .
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4. The Right to Destroy
Eyerman v. Mercantile Trust Co. (Mo. 1975)
 Enjoining demolition of home pursuant to provision in testatrix’s will because
razing the structure would violate public policy by negatively impacting
neighboring property rights and the community at large (minority rule).
 When a landowner attempts to co mpel his successor in interest to do to the land
something against public policy, a court may deem the condition void.
 Destroying Johnston’s house for seemingly no reason other than because it was in
her will is against public policy. The destruction would decrease the value to her
beneficiaries and would decrease the property values in the neighborhood,
without providing any benefit to anyone.
C. Why Property Rights?
John Locke rooted property rights in natural law, often associated with divine law &
thought to be universally just.
Today, property rights are widely accepted as positive law that has been created by
human legislation & customs.
Five main reasons property rights exist:
(1) The labor rationale – John Locke’s labor theory, a state of nature in which all property is
unowned. Natural law allows individuals to sever private property rights from the commons by
mixing in their labor with commons resources. Fairness: laborers deserve to own the items that
their toll & labor produced.
(2) The autonomy & liberty rationales – Institution of private property gives each owner a sphere of
personal autonomy to hold the problems of the world in abeyance. The right to exclude is
essential to the protection of autonomy. “home as castle”
(3) The personhood rationale – Recognizes property rights because of their ability to facilitate selfdevelopment. “Something more” than the autonomy & liberty rationales because it also conveys
a “Sense of connection with the external world” rather than isolation from it. The importance of
place*
(4) The utilitarian & economic efficiency rationale – Based on the work of David Hume & advanced
by Jeremy Bentham, the principle of utilitarianism under which actions should be based on their
consequences. Actions are moral if they bring about the greatest amount of happiness for the
greatest amount of people. The economic efficiency rationale for private property rights draws
on utilitarianism. It argues property rights should be universal in the sense that all are rare &
valuable resources should have an owner. It also calls for exclusive property rights that give
owners the right to exclude others. The rationale also emphasizes that property rights should be
transferable and that restraints on alienation should be disfavored. If property rights have all
three, then society’s overall wealth will be maximized (the greatest happiness for the greatest
number of people).The free market system will allocate scarce resources into the hands of those
who value them the most, thereby ensuring that property will be put to its highest & best use.
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(5) The democracy rationale – Democracies require (a) that there be many owners, (b) that
opportunities to acquire the property needed for a full human life are universally available, and
(c) that the scope of the powers granted to owners must be subject to rules that reflect both
democratic processes & individual rights to liberty & to equal, dignified treatment. (Joseph
Singer)
D. Beyond the Black Letter: The Rise of the Sharing Economy
E. Skills Practice: Common Law Analysis & Outlining
F. Chapter Review
(1) Sunken treasure: The African Queen grounded on a shoal nine miles off the coast
of Ocean City, Maryland. The bow section split from the stern and floated
approximately two miles away. The owners abandoned the vessel, and never
returned. A man named Warner found the vessel’s stern section, and spent several
days aboard examining it. Upon returning to shore he published a legal notice in a
local newspaper asserting his right of sole and exclusive possession of the vessel,
but he did not return to the vessel n or undertake any salvage operations. Along
came Deir and Little, who completed an expensive salvage effort by raising the
stern section and towing it into Norfolk under adverse conditions. Following th eir
initial visit, Deir and Little remained continuousl y aboard the vessel. Later, Warner
asserted a claim to the salvage profits against Deir and Little; in response, Deir
and Little asked the court to declare them the true and lawful owners of the ship’s
stern section.
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You represent the plaintiff Warner. As sume that Popov v. Hayashi is the most
relevant precedent in your jurisdiction. What arguments would you make on
Warner’s behalf that he is entitled to the salvage profits? Be sure to discuss
whether the facts of Popov v. Hayashi are analogous to or distin guishable from the
facts of your case.
Sunken treasure: Under the rule of Popov, the owner of an abandoned baseball is the first person to
“acquire unequivocal dominion and control” over it. In the salvage hypothetical, Warner will want to
distinguish the facts of his case from those of Popov because it is unlikely that he could satisfy the Popov
test. Instead, Warner will argue that the court should adopt a different rule better tailored to the
circumstances. For example, Warner might suggest a rule under which a cognizable property interest in
an abandoned vessel is awarded to the first person that (1) discovers the vessel, and (2) demonstrates an
intent to assert sole and exclusive possession over it (which he arguably demonstrated by publishing a
legal notice in the local newspaper).
There are at least two grounds upon which Warner can distinguish Popov. First, he can note the physical
distinction between an abandoned baseball and an abandoned ship: It is possible for a single person to
acquire unequivocal dominion and control over the baseball, but not over a large and unwieldy vessel in
dangerous waters. As Popov explained, “[i]t is impossible to wrap one’s arms around a whale, a fleeing
fox or a sunken ship” (unlike a baseball). Therefore, the Popov rule requiring unequivocal control over
disputed property should not be applied to an abandoned vessel because the standard would be virtually
impossible to satisfy.
Second, Warner will assert that the two situations are distinguishable based on custom. As Popov noted,
rules are contextual in nature and “are influenced by the custom and practice of each industry.” As Popov
explained, it is customary in Major League Baseball to award possession of balls hit into the stands to the
first person who achieves full control over such baseballs. Warner would argue that the salvage industry
follows a different custom under which absolute dominion and control are not required in order to
establish possession. We would need to know more about the customs of Major League Baseball and the
salvage industry in order to make this argument.
Despite these attempts to distinguish Popov, Warner’s position is weaker than that of Deir and Little.
This hypothetical is adapted from Brady v. S.S. African Queen, 179 F. Supp. 321 (E.D. Va. 1960). In that
case, the court held that Deir and Little were entitled to receive the entire proceeds from the salvaged
property. Even though Warner first arrived on the scene, the court held that “[a] salvor cannot assert a
claim merely by boarding a vessel and publishing a notice, unless such acts are coupled with a then
present intention of conducting salvage operations, and he immediately thereafter proceeds with activity
in the form of constructive steps to aid the distressed property.”
G. Chapter Quiz
(1) Under Edwards v. Sims, who owns Great Onyx Cave?
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Both Edwards and Lee, with each owning the portion of the cave located beneath their surface estate.
(2) Under modern law, do landowners own all the territory beneath their surface
property to the center of the earth?
No. Today, the ad coelum doctrine is not applied literally. See A Place to Start (p. 7) and note 3 (p. 11).
(3) What is the fundamental tension Congress must address when exercising its
constitutional authority over intellectual property? ( read carefully pp. 25-26).
The tension between individual rights and the public interest.
This response is reinforced in the final "digging deeper" entry in the text box: "Notice that the
constitutional treatment of IP rights highlights the tension between individual rights and the public
interest. For example, how can Congress simultaneously promote creative activity, stimulate
competition, and ensure that important ideas and information are easily and affordably available to the
public?"
(4) Does Maui Electric Co. (p. 31) represent the majority approach?
No. Review note 2 after the case.
(5) What is the relevance of the right to transfer (one potential stick in the property
rights bundle) to Johnson v. M'Intosh?
The Court cites to a principle under which Indian inhabitants are to be considered merely as occupants of
their lands, incapable of transferring the absolute title to others.
The tribes lacked authority to sell their property to plaintiff Johnson, even though the purported
conveyance to Johnson preceded the conveyance to McIntosh by more than 40 years.
Both of the above.
The first response correctly states the general rule, and the second response correctly states the
application of the rule to the facts of this case. Both are correct. What would have been the narrow
result in this case if Chief Justice Marshall had held otherwise? What would have been the impact on
history and the degree of political power enjoyed by Native Americans?
(6) Under State v. Shack, what was the scope of farmer Tedesco's p roperty rights?
The migrant workers had the right to receive visitors as an adjunct to their rights of privacy, dignity, and
association.
The court says that these rights of the workers are "too fundamental to be denied on the basis of an
interest in real property" (p. 54).
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(7) In Eyerman v. Mercantile Trust Co., did Louise Johnston have the right to order the
destruction of her home?
No, Johnston's right to destroy -- at least after death -- was limited by the public interest in preventing
waste and protecting neighboring property values.
This was the court's resolution, although the law is unsettled on this issue.
(8) Which writer is associated with the labor rationale for property rights?
John Locke
Do you agree with Locke that one should be able to privatize unowned commons property by mixing in
one's labor (p. 61)? Or do you agree with Carl Safina that one who cuts down a 1,000-year old tree in a
commons is a "thief who has severed history and taken a little of the future" rather than an owner (p. 11,
note 2)?
(9) Which writer is associated with the utility rationale for private property rights?
Jeremy Bentham
Do you agree with the economic efficiency corollary that the free-market system allocates scarce
resources into the hands of those who value them them most, thereby ensuring that property will be put
to its highest and best use, to the benefit of all?
(10) If it is clear which legal rule applies to a particular situation, then attorneys and
courts will likely engage in which of the following?
Fact-based analysis
For the distinction between fact-based analysis and precedent-based analysis, please review the text box
on p. 65.
(11) In Edwards v. Sims, in which type of analysis did the court primarily engage?
Precedent-based analysis
The applicable legal rule was unclear. The majority adopted the ad coelum doctrine, whereas the dissent
would have adopted a rule awarding title to the party owning the surface estate on which the cave
entrance was located (and added labor to develop the cave into a tourist attraction).
Chapter 2 – Gifts, Finders, and Adverse Possession (p. 69-133)
Transferability (alienability) – through the act of transfer owners can give or sell their
property to others


“Restraints on alienability are disfavored” in the law
Involuntary transfers – where the law of adverse possession can transfer property without the
first owner’s consent or knowledge
P a g e | 18
A. Gifts
Gifts – present, irrevocable transfers between living persons (inter vivos conveyances)
with consideration or compensation

Subject to three requirements: (1) intent, (2) delivery, & (3) acceptance by the
recipient/donee
B. Finders
Finders law – the transfer of possessory rights (but not title) by unknown owners who
part unintentionally with their property

Overarching goal to reunite owners with their property
Relativity of title – awarding property to the claimant who had relatively better title than
all the others, even though none of them can claim to be the actual owner

That person entitled to maintain possession, generally until the time the true owner
shows up
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Armory v. Delamirie
 A person who finds a piece of chattel has a possessory property interest in the
chattel, which may be enforced against anyone except the true owner of the
chattel.
Benjamin v. Lindner Aviation, Inc.
 Under the common law, property is mislaid when it is intentionally placed or
concealed by an owner and later forgotten, and the property belongs to the owner
of the premises where the property is found.
C. Adverse Possession
Adverse Possession – a trespasser can gain title to the land of another, provided that the
trespasser continuously satisfies requirements designed to give the record owner notice
of the adverse occupation and ample opportunity to bring an action to eject the
trespasser

The expiration of the applicable statute of limitations bars the true owner’s right to
assert title in a judicial action, & vests title to the possessor
“Adverse possession serves the social policy of not disturbing what has become the
status quo.” – Oliver Wendell Holmes
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Plaintiff landowners bring actions in ejectment and/or to quiet title in themselves
against would-be adverse possessors.
Plaintiff trespassers bring actions to quiet title in themselves & argue that they have
satisfied the elements of adverse possession.
Actual Possession


A trespasser can enter under color of title -- with a deed or other document that purports
to convey title but does not actually do so because of some technical or other defect that
is not apparent on the document’s face.
Constructive possession – some courts will credit a trespasser who enters under color of
title with satisfying the actual possession requirement for the entire acreage of the
document, not just the portion the trespasser is possessing
Continuous Possession & Disabilities of the Record Owner


The statute of limitations is modified if the record owner has a disability, it gives owners
an excuse for “sleeping on their rights” & failing to take action to eject trespassers.
Disabilities include minor status, legal incompetence, and imprisonment.
P a g e | 21


The disability must be in place at the time the trespasser entered, and any disabilities
that arise later do no give the owner an excuse for failing to take action.
Disability statutes may (1) postpone the start of the limitations period until after the
disability has been removed, (2) suspend the running of the statute of limitations for as
long as the owner suffers from the disability & then give the owner the entire remaining
statutory period to take action against the trespasser; or (3) give the owner an
additional grace period after the normal statute of limitations has expired to eject the
trespasser.
Doctrine of Tacking




Permits a series of claimants to add together their periods of possession, provided there
is privity among them.
Many courts adopt a relaxed view of privity & only require a reasonable relationship
among successive possessors.
One who enters property after the prior possessor has abandoned it lacks privity with the
predecessor, as does one who ousts the predecessor.
A series of unrelated trespassers cannot tack their period of possession together (like
squatters).
Porter v. Posey
 Title to property acquired by adverse possession may be transferred by a deed
that does not contain a description of th at property.
Chaplin v. Sanders
 Under Washington law, a claimant’s subjective belief about her interest in land is
irrelevant to establishing the element of hostility necessary for adverse
possession.
O’Keeffe v. Snyder
 The discovery rule tolls the statute of limitations if the owner of stolen personal
property acted with due diligence to pursue the property.
Lawrence v. Concord
 Holding record owner’s ignorance of the extent of their property does not defeat
the adverse possessor’s claim to the property .
D. Beyond the Black Letter: Cybersquatting
E. Skills Practice: Common Law & Statutory Analysis
F. Chapter Review
(1) The pocket watch at the farm: Baird Brown owns a 1,000 -acre farm. As a young
man, Farmer Brown grew a variety of crops on his land. Now, however, his health
is failing and he is no longer able to farm the property. In fact, it has been years
P a g e | 22
since Farmer Brown has even been able to get outside to inspect his property and
his fences. As a result, the farm has become overgrown and its natural vegetation
has become attractive to wildlife. To generate income, Farmer Brown allows
hunters to enter his land for a reasonable fee. On a cold Saturday in January, April
Adams made proper arrangements to hunt on Farmer Brown’s property. As she
was walking along, Adams spotted an old barn ahead, and decided to step inside
to get out of the wind. As she got closer, however , Adams noticed that the barn
door was sagging off its hinges and would be difficult to open. Undaunted, Adams
dragged over a stump from an old stack of firewood to help her climb in through a
window on the side of the barn. As she was doing so, she notice d something shiny
in the depression where the stump had been resting. Scraping away the dirt with
her fingers, Adams found a gold pocket watch.
Later that day, Adams stopped by Farmer Brown’s house and showed him the
pocket watch. Brown had never seen the watch, but said that he would run a “lost
and found” notice in the local newspaper. After six months, no one had responded
to the notice and Farmer Brown took the watch to a jeweler for an appraisal. Upon
learning that the watch was an antique valued at $ 5,000, Brown refused to return
the watch to Adams. She promptly filed a lawsuit to compel Brown to return the
watch to her.
Carefully state the central issue of the lawsuit Adams v. Brown. What arguments
should Adams make? What arguments will Brown make i n response? Does it make
a difference if the common law rules apply or if statutory rules have been enacted
to govern the issues?
The pocket watch at the farm: The central issue is whether the finder (April) or the owner of the locus in
quo (Farmer Brown) has relatively better title to the pocket watch. First, April will argue that the pocket
watch should be treated as “lost” property. The common law rule is that lost property goes to the first
finder, and not to the owner of the locus in quo. See Armory v. Delamirie (holding that finder has better
title against all the world except the true owner). Property is defined as lost when the owner
unintentionally and involuntarily parts with its possession and does not know where it is. See Benjamin v.
Lindner Aviation (defining four common law categories of found property). Under our facts, the watch
was found on the ground underneath an old stump. The most logical explanation is that the true owner
parted with it unintentionally and involuntarily while chopping wood, thus qualifying as lost property.
April might argue that if the watch is not categorized as “lost,” then it should be treated as “treasure
trove,” which the common law awards to the finder (here, April). “Treasure trove” refers to money, coins,
gold, silver, or bullion long ago hidden in the ground. See Benjamin v. Lindner Aviation (defining treasure
trove and explaining that it must have been hidden for such a length of time that the owner is probably
dead or undiscoverable). This is a weak argument because a gold watch probably does not fit into a
category including money, coins, gold, silver, or bullion. Further, because the watch appears to have
been close to the surface of the earth (and not buried more deeply), it seems unlikely that anyone hid it
beneath the stump long ago.
P a g e | 23
In response, Farmer Brown will likely argue that the watch was mislaid rather than lost. Under the
common law, the right of possession of mislaid property belongs to the owner of the premises upon
which the property is found, as against all persons other than the true owner. See Benjamin (defining
mislaid property as that which is voluntarily put in a certain place by the owner who then overlooks or
forgets where the property is). However, there is no logical reason why the true owner would voluntarily
place his watch under an old stump in the middle of a farm, so Farmer Brown’s attempted categorization
of the property as mislaid is weak. He might argue that even if the property is “lost,” he should be
treated as the constructive finder because he owns the land on which it was found. Finally, even if the
property is “treasure trove,” he will argue that he should be awarded possession because it was
embedded in the soil and he is the owner of the locus where the property was found.
Under the common law, it appears that April has a better claim to possession. If the jurisdiction has
enacted a finders statute, it is possible that the result might be different. For example, a statute might
award title to found property to the owner of the locus in quo (which would favor Farmer Brown rather
than April). This is not very likely, however, as most finders statutes tend to vest title to found property in
honest finders who are unable to find the true owner within a reasonable period of time. See, e.g.,
Benjamin v. Lindner Aviation (considering state statute that awards title to lost property to first finder
who fails to discover true owner within 12 months of publishing notice of found property).
(2) The neighbor’s: Last year, without Nora’s p ermission, her neighbor, Joseph, put up
a privacy fence that extends several feet into her yard. Nora wanted to maintain
good neighborly relations, so she told Joseph that she didn’t object to the fence’s
placement. Nora knew that Joseph only had a one -car garage and needed the extra
space to park his new second car. In addition, she had heard rumors that his
company was opening a new facility out of town, so there was a good possibility
that Joseph would be selling his house in the near future. She also fe lt sorry for
Joseph, and heard that his job was very stressful and that he had suffered some
sort of mental breakdown a little while ago. Advise Nora what action she should
take. Your jurisdiction has a 10 -year statute of limitations for actions in ejectme nt.
The neighbor’s fence: You should convey the following information and advice to Nora: After at least 10
years have passed, Joseph might be able to claim title to the portion of your yard enclosed by the privacy
fence under the doctrine of adverse possession. However, from the information you provided, it’s unlikely
that will happen because you gave Joseph permission to use your land when you told Joseph you didn’t
object to the fence’s placement on your property. That permission will probably prevent him from
proving the element of hostility, which requires a showing that Joseph used your land without your
permission.
To obtain title to the part of your land enclosed by his fence, Joseph will have to prove that he actually
used the land in a way that excluded you. Joseph’s construction of the privacy fence probably satisfied
these two elements because it enabled him to use your land to park his new second car, and it appears
that the fence kept you from using that portion of your own land. Joseph will also have to prove that he
used your land continuously for 10 years, which is the length of your jurisdiction’s statute of limitations
for actions in ejectment. Again, the presence of the fence suggests that Joseph’s use of your property is
P a g e | 24
continuous, and not merely sporadic. Even if Joseph is transferred out of town, the new owner could also
claim your land after 10 years by “tacking” or adding her period of possession to Joseph’s possession. The
law will allow this tacking as long as there is privity or some reasonable property relationship between
Joseph and the new owner of his property. The transfer of a deed from Joseph to the new owner will
likely establish sufficient privity to allow tacking. In addition, Joseph will have to show that his
occupation of your land is open and notorious, such that you would notice his presence if you made a
reasonable inspection. In this case, the facts suggest that you actually know of the fence and its
encroachment, so it is very likely a court would deem Joseph’s use of your property to be open and
notorious. Finally, as discussed above, Joseph will have to prove hostility—that he used your land without
your permission. Although his use is permissive at this point, if your friendly relationship with him should
deteriorate over time, it is possible a court would find that you revoked your permission and that
Joseph’s use became hostile (without your permission). At that point, all elements of adverse possession
would be satisfied and the 10-year statute of limitations would begin to run.
The facts indicate that Joseph may have suffered some sort of mental breakdown a little while ago. That
fact is irrelevant to the adverse possession determination. Certain disabilities suffered by the true owner
(you), such as minority (being under your jurisdiction’s age of minority), incarceration, mental
incapacitation, and the like, might toll the statute of limitations and give you an extended period of time
during which to bring an action in ejectment against Joseph. However, any disability suffered by the
trespasser (Joseph) is irrelevant.
Perhaps your safest course of action would be to sign a document with Joseph indicating that his use of
your land is permissive (not hostile), and that you can revoke your permission at any time. The
agreement should also specify that it remains in effect if either of you sells your property or dies (and
your property passes to your successors). Such a document would protect you from future claims of
adverse possession by Joseph or by his successor if he should move out of town.
(3) The bracelet at the coffee shop: Linda found a valuable bracelet on the sidewalk
outside of the local coffee shop. She showed it to the owner of the coffee shop
who told her to leave it with him so he could display the item in the hope that its
true owner would claim it. Six months later, Linda returned and asked about the
bracelet. The shop owner told her that no one had claimed it, and that he had
given it to his wife as a birthday present. Linda’s rights are best des cribed as:
a. Superior to rights of the true owner, and those of the shop owner and his
wife, because the bracelet was lost.
b. Superior to rights of the true owner, but inferior to rights of the shop
owner and his wife.
c. Inferior to rights of the true owner, but superior to rights of the shop
owner and his wife.
d. Inferior to rights of the true owner, and to those of the shop owner and his
wife.
P a g e | 25
The bracelet at the coffee shop: The correct answer is C. The bracelet was lost, rather than mislaid,
because its owner apparently parted with it involuntarily by dropping it on the public sidewalk. The finder
of a lost article acquires rights superior to those of everyone except the true owner. The finder holds the
lost property in trust or as bailee for the true owner, but may enforce her rights against everyone else.
Choices A and B are incorrect because the finder of lost property does not have rights superior to the true
owner. Choice D is incorrect because the bracelet was found outside the premises on the sidewalk and
was not under the control of the coffeehouse or its owner, nor can it be characterized as “mislaid.”
G. Chapter Quiz
(1) Review Test Your Understanding problem (1) on p. 72. With respect to the
purported gift of the two first -edition books, which statement below is most
accurate?
Owner failed to make a valid gift to Donee because there was no delivery of the books.
Here, the gift has not been delivered. There has not been a manual delivery because the donor has not
transferred possession and control of the two books. Likewise, there has not been a constructive delivery
because Owner has not physically transferred something giving access and control over the books (such
as keys to Owner’s residence and Paris home). Finally, there has not been a symbolic delivery, as through
a written gift card.
In the absence of a valid gift, who takes title to the books after Owner dies? In that case, Nephew would
take title to the books through Owner's will. Is that a good result, or does it run against the Owner's
apparent intention? What purpose does the delivery requirement serve?
(2) Concerning Benjamin v. Lindner, which statement is most accurate with respect to
the $18,000 in currency?
The Bank had better title than all but the true owner because the property was mislaid and the Bank
owned the airplane.
(3) Refer to the "disability" problem on pp. 104 -105. Focus on the alternative scenario
at the bottom of p. 105 (second to last paragraph):
"Assume instead that Olivia had been rendered mentally incompetent in 2004 and
that she remained so until 2024, at which time she recovered and her disability
was removed. (Continue to assume that Olivia had been born in 1994)."
In what year could Andrew perfect his title by adverse possession?
2025. The statute provides relief for owners under a disability at the time the cause of action accrues.
Here, O’s cause of action accrued in 2005 upon A’s adverse entry. At that time, O was under two
disabilities: minority (removed in 2015, when O turns 21) and incompetence (removed in 2024). The
statute states that the time within which O may commence her action “shall be extended for up to 10
years after the disability ceases.” But to which disability does this refer?
P a g e | 26
Olivia might argue that the 10-year extension begins in 2024, when the incompetence disability was
finally removed. Therefore, she would assert that she had until 2034 to initiate her action to eject A—10
years after she became competent. However, the statute’s generosity is limited: the statute of limitations
“shall not be extended by this provision beyond 20 years after the cause of action accrues.” Here, that
would be 2025 (10 years after A’s adverse entry in 2005).
Therefore, if O does not take action, A will perfect title by adverse possession in 2025. However, that title
will relate back to the date of A’s adverse entry in 2005.
(4) Refer to the adverse possession timeline on the top of p. 111, after Porter v.
Posey. Which statement is most accurate?
"Possessor 2" represents the Porters, who were plaintiffs claiming they had acquired title by adverse
possession.
(5) In Chaplin v. Sanders (p. 112), why did the Sanders acquire good title to Parcels A
and B?
Because they treated the land as their own throughout the statutory period.
The court expressly declined to rely on the adverse claimant's subjective belief (good faith or bad faith) or
intent (to dispossess or not dispossess the true owners) when determining whether the claimant satisfied
the hostility requirement. (p. 115)
(6) Which statement is most accurate with respect to O'Ke effe v. Snyder?
Georgia O'Keeffe will be awarded title to the paintings if she can establish facts that would justify
deferring the beginning of the statute of limitations.
Is the doctrine of adverse possession a good fit for personal property, as opposed to real property? Here,
the N.J. Supreme Court is moving away from applying adverse possession to chattels. Instead, it is
applying a statute of limitations modified by the discovery rule. This is not really an adverse possession
case at all! It focuses on the true owner's behavior, not that of the adverse claimant.
(7) Which format best describes the policy argument?
If the court adopts position X, then the result will promote policy Y because . . . .
Be sure to note the distinction between precedent-based arguments (p. 65) and policy based arguments
(p. 128).
P a g e | 27
Chapter 3 – Estates & Future Interests (p. 137-203)
A. Overview of Estates & Future Interests
1. Historical Overview
2. Basic Terminology & Themes
B. Present Estates
“Numerus Clausus” Principle – “the number is closed”, courts generally will not recognize
new types of estates
P a g e | 28
1. The Basic Categories of Present Estates
Fee Simple Absolute




potentially infinite duration, the “largest” estate in temporal terms
only ends if the owner dies intestate & without heirs, in which it escheats to the state
freely alienable inter vivos, devisable, & inheritable
virtually all states have abolished requirement of using words of limitation to create a
FSA

inheritable, but the line of descent is cut down to the “heirs of the body” of the grantee,
meaning all lineal offspring in the grantee’s direct bloodline
The grantor retains a reversion if the grantee’s lineal bloodline runs outs
The conveyance can also provide for a remainder to vest in a third part upon expirations
of the original grantee’s bloodline
Lesser quantum than FSA because its potential duration is briefer
Most American jurisdictions have abolished the fee tail, & is instead construed as a FSA
Fee Tail




Life Estate


Endures for the life of a specified person, usually the grantee
In many cases the conveyance will contain a remainder in a third party, otherwise the grantor
retains a reversion
P a g e | 29
Nonfreehold Estates – Term of Years

A definite duration, & begins on a specific date or upon the happening of a specified
event
White v. Brown
 When the terms of a will are ambiguous, said will shall be determined to have
passed a fee simple absolute.
Law of Waste



Voluntary Waste – holders of present estates are responsible for affirmative actions that
cause unreasonable harm to the future interest holders
Permissive Waste – holds present possessors responsible if they fail to perform
reasonable actions for the benefit of future interest holders
Ameliorative Waste – where the present possessor changed the land’s character, even if
the change increased the land’s value
P a g e | 30
The Trust




As an alternative to the LE< the LE held in trust is a common tool used by modern estate
planners.
A life tenant would hold equitable title to the life estate, & a trustee would hold legal
title to the property for the benefit of the owners of both the present estate and the
owners of the future interest.
The trustee has broad powers to manage the property without judicial approval.
The equitable life tenant herself has broader powers of alienation than would the owner
of the traditional life estate.
2. Defeasible Present Estates
Three types of defeasible estates:
(1) Estate determinable
(2) Estate subject to condition subsequent
(3) Estate subject to executory limitation
3. A System for Labeling Estates & Future Interests
P a g e | 31
Mahrenholz v. County Board of School Trustees
 Deed language granting land for an ambiguous purpose and otherwise reverting
the land to the grantor creates a fee simple determinable followed by a possibility
of reverter.
C. Future Interests
1. The Basic Categories of Future Interests
Reversion



O retains a reversion unless there is (1) a prior vested interest, (2) in fee simple, (3) that
is ready to take possession immediately at the termination of all prior interests.
The reversion waits patiently for the natural termination of a preceding FT, LE, or TOY, &
then vests automatically.
There is usually no reversion after an executory interest.
Possibility of Reverter



Grantor always retains POR after conveying an estate determinable.
Possession automatically vests in the grantor after the natural expiration of the present
estate (upon violation of the special limitation).
Self-help is disfavored in the law, so enforcement is often accomplished through legal
action.
P a g e | 32
Right of Entry



Right of re-entry or power of termination
Grantor always retains ROE after conveying an estate subject to CS.
The ROE divests the preceding estate upon violation of the condition but requires the
grantor to take action to do so.
Remainder



Future interests created in favor of grantees.
Rem. Wait patiently for the natural expiration of the preceding estate, at which time
they must be capable of becoming possessory immediately.
They must be conveyed simultaneously with a present possessory estate less than the FS
& are the remnant that remains after the present estate expires.
Executory Interest


Future interests in grantees that generally divest the preceding estate or follow the
expiration of estate determinable.
Always follows a fee simple subject to executory limitation.
P a g e | 33
2. Remainders – A Closer Look
Contingent Remainder





Subject to condition precedent and/or is held by an unascertained taker.
A condition precedent is a requirement that must be satisfied before the holder is
entitled to possession upon termination of the present estate.
An unascertained taker is one who can not be identified (or who has not been born) as
the person entitled to possession at the termination of the preceding estate.
All remainders wait patiently for the natural end of the preceding estate.
It is possible for a conveyance to contain two contingent remainders, subject to
conditions precedent that are the mirror opposite of one another (alternative contingent
remainders).
Vested Remainder Subject to Complete Divestment



AKA Vested Rem. Subject to EL
Subject to a condition subsequent
Condition subsequent appears after the language creating the remainder
Vested Remainder Subject to Open

Must (1) be held by an open group or class of people (class gift), and (2) at least one
living member who has satisfied all conditions precedent (if any) can be ascertained
Indefeasibly Vested Remainder

Certain to become possessory when the present estate expires
P a g e | 34
3. Putting It All Together
D. Enhancing Marketability: Four Rules
1. The Destructibility of Contingent Remainders Rule
Rule: (1) A contingent remainder in real property is destroyed if it does not vest in
interest at or before the termination of the preceding freehold estate. (2) Under the
related doctrine of merger, if a LE & the next vested interest in FS come into the h ands of
the same person, the lesser estate merges into the larger. Merger will destroy any
intervening contingent remainders, unless the LE, CR & next vested interest were all
created by the same instrument.

Abolished in most states
2. The Rule in Shelley’s Case
Rule: If the same instrument gives a LE to A & a remainder to “A’s heirs” or “the heirs of
A’s body”, then as a rule of law A takes the remainder & the heirs take nothing.




Only applies if both estates are legal or equitable
Can override a contrary intention of the grantor
Words such as “Children” do not invoke the rules application
Abolished in most jurisdictions
3. The Doctrine of Worthier Title
Rule: If an inter vivos conveyance creates a remainder or executory interest in the heirs
or the grantor, then the grantor has a reversion, and the heirs take nothing.
P a g e | 35


The so-called testamentary branch of the doctrine achieved a similar result with respect
to devises by will.
Abolished in a majority of jurisdictions
4. The Rule Against Perpetuities
Rule: “No interest is good unless it must vest if at all, not later than 21 years after some
life in being at the creation of interest.”
P a g e | 36



Seeks to limit dead hand control for a reasonable period of time
Takes aim at three future interests: contingent remainders, executory interests, & vested
remainders subject to open.
Most states follow some version of the RAP
Class Gifts



Natural class closing rule – the class closes when the named ancestor of the class dies,
because at that point it is physically impossible for more children to join the class
Rule of convenience – the class closes when at least one member is entitled to possession
(rule of construction)
All or nothing rule – is void in every class member if the interest of even one class
member might violate the RAP
P a g e | 37
E. Beyond the Black Letter: Dead Hand Control
F. Skills Practice: Drafting Savings Clauses
G. Chapter Review
(1) O conveys, “To A for life, then to B and the heirs of his body, then to C’s children.”
At the time of the conveyance, C is alive and has one child, D.
A takes a life estate, B takes a vested remainder in fee tail, and D takes a vested remainder in fee simple
subject to open. There is no reversion remaining in O because D holds a vested interest in fee simple that
is ready to take immediately if B’s blood line should die out. C’s unborn children hold an executory
interest that will partially divest D’s interest upon their birth.
(2) O conveys, “To A and the heirs of her body.”
A takes a fee tail and O retains a reversion in FSA.
(3) O conveys, “To A and her heirs, but if she dies without having married, then to B
and his heirs.”
A takes a fee simple subject to executory limitation and B takes a shifting executory interest in fee simple
absolute. There is no reversion left in O.
(4) O conveys, “To A for life, then to B and her heirs, but if B ever drinks alcohol to C
and his heirs.”
A takes a life estate, B takes a vested remainder in fee simple subject to divestment, and C takes a
shifting executory interest in fee simple absolute. There is no reversion left in O.
(5) O conveys, “To A for life, then to B’s children who are residing in Wyoming at the
time of A’s death.” At the time of the conveyance, B has one child, C, who is living
in Wyoming.
A takes a life estate, B’s children take a contingent remainder in fee simple, and O retains a reversion in
fee simple absolute. It doesn’t matter that C is currently living in Wyoming, because the condition
precedent concerns the circumstances “at the time of A’s death.” C also holds a contingent remainder
that is contingent on living in Wyoming at the time of A’s death.
(6) O conveys, “To A, provided that A keeps the house in good repair, but if A does
not keep the house in good repair, then O may retake the premises.”
A takes a fee simple subject to condition subsequent and O holds a right of entry.
(7) O conveys, “To A for life, then one day later to B.” A dies. What estates and future
interests did the original conveyance create? At the time of A’s death, what is the
state of the title?
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Under the original conveyance, A takes a life estate, O holds a reversion in fee simple subject to
executory limitation, and B takes a springing executory interest in FSA. When A dies, O’s reversion
becomes a present fee simple subject to executory limitation, and B continues to hold a springing
executory interest. One day later, B has a fee simple absolute and O has nothing. Notice that O does not
hold a vested remainder in a term of years because O did not explicitly make such a conveyance to
herself (“To A for life, then to O for one day, then to B”). Instead, O’s reversion is merely the remnant of
her original FSA remaining after the conveyance of a life estate to A.
(8) O conveys, “To A for life, then to B’s children.” B has no children at the time of the
conveyance.
Identify each estate and future interest created by the following conveyances.
Then, assume that the jurisdiction follows the destructibility of contingent
remainders rule (and the related doctrine of merger). Do the results change?
A takes a life estate, B’s children take a contingent remainder in fee simple (because they are
unascertained), and O retains a reversion in FSA.
(9) O conveys, “To A for life, then to B for life if B gets married, then to A in fee
simple absolute.”
The conveyance creates a life estate in A, a contingent remainder in a life estate in B, and a vested
remainder in A in fee simple absolute. O does not retain a reversion. The destructibility rule does not
apply yet. We would have to wait until A’s death to see whether B’s contingent remainder had yet vested
in interest (upon B’s marriage). If not, it would be destroyed when A died. Likewise, the related doctrine
of merger does not change the result. Because all three interests—A’s life estate, B’s contingent
remainder, and A’s vest remainder—were created by the same instrument, the exception to merger
prevents the destruction of B’s contingent remainder ab initio.
(10) After O makes the conveyance described in problem 9, suppose that A conveys
to C, “all my interest.” What is the state of the title?
Identify each estate and future interest created by the following conveyances.
Then, assume that the jurisdiction follows the Rule in Shelley’s Case and the
Doctrine of Worthier Title. Do the results change?
After A conveys “all my interest” to C, the life estate and next vested interest (a vested remainder in fee
simple) have “come into the hands” of the same person— C. Under the doctrine of merger, the lesser
estate merges into the larger and destroys any intervening contingent remainders. Therefore, after
applying the destructibility/merger rule, A holds a fee simple absolute and B holds nothing.
(11) O conveys, “To A for life, then to the heirs of O.”
The conveyance creates a life estate in A, a contingent remainder in fee simple in O’s heirs (who are
unascertained until O’s death), and a reversion in fee simple absolute in O. If the jurisdiction follows the
Doctrine of Worthier Title, then the doctrine would destroy the contingent remainder in O’s heirs ab
initio. Instead, O holds a reversion in fee simple absolute and the heirs take nothing.
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(12) O conveys, “To A for life, remainder to Harry, A’s heir.” At A’s death, Harry is A’s
only heir.
Identify each estate and future interest created by the following conveyances.
Then, assume that the jurisdiction follows both the de structibility of contingent
remainders rule and the RAP. Do the results change?
The conveyance creates a life estate in A and a vested remainder in fee simple absolute in Harry. O does
not retain a reversion. The language “A’s heir” is mere surplusage, and Harry’s remainder is vested
because he is an ascertained person and there is no condition precedent. (One could argue that a
reviewing court would find an implied condition precedent that Harry takes “only if he is A’s heir,” but
this is a stretch.) At A’s death, Harry will hold a fee simple absolute. The result does not change under the
Rule in Shelley’s Case and/or the Doctrine of Worthier Title. Although the former (Shelley’s) might seem
to apply, the conveyance does not use the exact “magic words” necessary to trigger application of that
rule (“to A’s heirs” or “to the heirs of A’s body”). Moreover, the conveyance applies to an identified
person (Harry) and not to heirs ascertainable only at A’s death.
(13) O conveys, “To A for life, then to such of B’s ch ildren who reach 21.” At the time
of the conveyance, B is alive and has one child, C, who is 14 years old. What
estates and future interests does the conveyance create? Then A dies. At that
time, C is 15 years old and B has no other children. What is the s tate of the title
after A’s death?
The conveyance creates a life estate in A and a contingent remainder in fee simple in the class of “B’s
children who reach 21.” O retains a reversion in FSA. At A’s death (when C is only 15), O would hold a
present fee simple subject to executory limitation under the majority rule, and the class gift to B’s
children would become a springing executory interest in fee simple.
Would the Rule Against Perpetuities destroy the interest in B’s children ab initio? Although the children
as a class hold a vulnerable contingent remainder, the RAP will not strike it down. Their class gift will vest
when (1) the class closes (either when any child turns 21 after A’s death (rule of convenience) or when B
dies (natural closing)), and (2) every class member satisfies the condition of reaching 21. The lives in
being are A, B, and C. At the latest, the interest will vest (if at all) no later than 21 years after B’s death
(by which time all of his children will have turned 21 or died under 21).
Even though the RAP will not destroy the contingent remainder ab initio, will the destructibility rule later
do so if the jurisdiction follows that minority rule? Yes. At A’s death, the rule will destroy C’s contingent
remainder because it did not vest in interest at or before the termination of A’s life estate (because
neither C nor any after-born child reached 21 by that time). With the destruction of the contingent
remainder, O’s reversion will become a possessory fee simple absolute.
(14) O conveys, “To A for life, then to the first of A’s children who becomes a
comedian.” At the time of the conveyance, A has no children.
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The conveyance creates a life estate in A and a contingent remainder in fee simple in A’s first child (if
any) who becomes a comedian. O retains a reversion in fee simple absolute. If the Rule Against
Perpetuities applies, then the contingent remainder (in the first of A’s children who becomes a comedian)
is invalid. Contingent remainders are vulnerable under the rule. A could have an after-born child, X, who
was not a life in being when the interest was created. Then all lives in being could die (A). Then, wait for
21 years. At that time, the interest in X might still be contingent (if X has not become a comedian).
Therefore, the contingent remainder is void ab initio, leaving A with a life estate and O with a reversion
in FSA.
If the jurisdiction follows the destructibility of contingent remainders rule, then the result would be
different. Under the destructibility rule, we know the interest in A’s children will be destroyed if not ready
to vest at or before the termination of A’s life estate. Therefore, the gift to A’s first child to become a
comedian must either vest or fail at A’s death (under the destructibility rule). Because A was a life in
being at the time the interest was created, A serves as the validating life for the interest in A’s children.
Therefore, if the jurisdiction applies both the destructibility rule and the RAP, then the destructibility rule
“saves” the contingent remainder from the RAP. Instead of striking it ab initio, we will wait until A’s
death and strike the interest at that time if there is still no comedian child ready to take possession.
H. Chapter Quiz
(1) O conveys, "To A and his heirs." What rights do the heir s take under the
conveyance?
The heirs take nothing.
The heirs take nothing because "and his heirs" are words of limitation (not words of purchase). If A chose
to convey the property to B, could the heirs complain that they were cut out? Be sure to review pp. 144145 carefully (discussing Example 1).
(2) Jessie Lide conveyed her property, "To Evelyn to live in." Which statement is most
accurate concerning the words "to live in"?
-They are words of purchase, indicating to whom the property was conveyed (to Evelyn).
-They are words of limitation, clearly indicating what estate passed to Evelyn (a life estate).
-They are words of limitation, clearly indicating what estate passed to Evelyn (a fee simple absolute).
*None of the above.
The words "to live in" are similar to words of limitation because they almost tell us for how long Evelyn
holds her estate. But as we have seen, "close" is not good enough, and a grantor must use the precise
magic words to avoid ambiguity and uncertain interpretations by a reviewing court. Here, the words
"and her heirs" would clearly have conveyed a FSA to Evelyn, whereas the words "for life" would clearly
have conveyed a LE to Evelyn. But unfortunately, the grantor used neither, and instead created an
ambiguous conveyance that triggered litigation.
(3) Grantor O conveys a defeasible fee simple estate to A, who triggers defeasibility
by violating the relevant condition or limitation stated in the conveyance. If O
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sleeps on her rights, in which case is she more likely to lose title by a dverse
possession?
O is more likely to lose title if she conveyed a FSD, because her corresponding POR automatically returns
to her possession and starts the running of the statute of limitations against her.
(4) In which case below does B hold an EI?
-O conveys, "To A as long as A remains in law school, otherwise to B."
-O conveys, "To A, but if A drops out of law school, then to B."
-Both of the above.
The future interest is in B, so it is either a remainder or an executory interest. Because it is "impatient"
and divests A's FSA, it is an executory interest. The executory interest can be created by either words of
duration ("as long as") or words of condition ("but if").
(5) Which statement below is most accurate concerning judicial interpretations of
ambiguous conveyances? (See pages 156 -57).
Courts prefer a fee simple limited by a covenant over both the FS/CS and the FSD.
Courts prefer: (1) FSA, then (2) fee simple limited by a covenant, then (3) FS/CS, and last (4) FSD.
(6) O conveys, "To A and his heirs, beginning six months from today." Does O hold a
term of years?
No, because O retains a fee simple, even though it is now subject to an executory limitation.
Be sure you understand why this conveyance did not reduce O's interest to a term of years. Review
Example 17, p. 172.
(7) If a grantor makes a valid conveyance, can he retain more than one future
interest?
Yes. It is critical to review every conveyance to make sure O did not retain a reversion, even if O also
holds a different future interest. See, e.g., Example 13, p. 170.
(8) O conveys, "To A for life, then to B's children who turn 21." At the time of the
conveyance, B has two children, ages 18 and 22. Which statement below is
correct?
The conveyance creates a vested remainder subject to open in the class of B's children because there is at
least one living member who is ascertained and has satisfied all conditions precedent.
(9) O conveys, "To A for life, then to B, but if B ever takes dance lessons, then to C."
How can B's interest best be characterized?
B holds a vested remainder subject to divestment. B does not hold a contingent remainder because there
is no condition precedent here; rather, B is waiting patiently for A's life estate to end. There is, however,
a condition subsequent that could allow C to divest B's vested remainder. Notice that B's remainder could
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be divested before B ever takes possession (if B takes dance lessons during A's life) or after B takes
possession (if B takes dance lessons after A dies).
(10) O conveys, "To A for life." Subsequently O conveys her reversion to B. Does B
hold a remainder or a reversion? (See casebook, p. 170, Example 14 and the
"remainder column" in the text box on pp. 172 -73).
B holds a reversion because it was not created simultaneously with A's life estate.
(11) After making a conveyance, O retains a reversion unless which which of the
following elements are satisfied? (See casebook p. 169; see also entry for
"reversion" in table on p. 172).
-There is a prior vested interest.
-The prior interest is in fee simple.
-The prior interest is ready to take possession immediately at the termination of all prior interests.
-All of the above.
Because this issue arises so often, it would be helpful to memorize the elements (or at least know where
to find them quickly in your casebook).
(12) Which of the present estates below is classified as "nonfreehold"? (See Figure 1,
p. 143)
Term of years
(13) What is an equitable estate? (See casebook p. 153, note 4.)
It is the property right held by the beneficiary of a trust.
The trust is a common tool used by modern estate planners to avoid the problems such as those
highlighted in White v. Brown (p. 148). The trustee holds "legal" title to the property (both present estate
and future interest) for the benefit of the owners, who hold "equitable" title. This legal/equitable
distinction matters in the context of the Destructibility of Contingent Remainders rule, which can destroy
"legal" contingent remainders, but not "equitable" contingent remainders. See p. 179.
(14) Which of the following interests are vulnerable under the Rule Against
Perpetuities? (See p. 183, under "no interest is good" heading.)
-Contingent remainders
-Executory interests
-Vested remainders subject to open
-All of the above
All three interests are vulnerable. You should memorize this. For easy reference, you could even pencil in
"RAP" next to the relevant entries in the Figure on p. 168.
(15) When do contingent remainders "vest" under the RAP? (See p. 183)
When the taker is ascertained and when no conditions precedent remain unsatisfied.
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(16) When do executory interest vest under the RAP? (See p. 183.)
When they become possessory.
(17) When do vested remainders subject to open vest under the RAP?
When the class closes and when every member of the class has satisfied all conditions precedent.
(18) O conveys "To B and his heirs." B does not prepare a will and then dies without
heirs. After B dies, what is O's interest?
Nothing.
O conveyed a FSA to B, and retained no interest in himself. Therefore, O does not hold a reversion in FSA.
Likewise, O has no remaining interest (such as a FSA), even if B dies without a will and without heirs. If
neither O, B, nor B's nonexistent heirs hold title, who does? This is a rare example where the interest
escheats to the state.
(19) O conveys "To my children who learn to speak Portuguese." At the time of the
conveyance, O has two children: A (who speaks Portuguese) and B (who does not
speak Portuguese). At the time of the conveyance, what is A's interest?
Fee simple subject to executory limitation
The class closes at the time of the conveyance under the Rule of Convenience (our default presumption)
because (a) all prior estates have ended (there are none here), and (b) at least one member is entitled to
possession (A is entitled to possession because A speaks Portuguese). Be sure to notice that A's present
fee simple is defeasible: if B ever learns to speak Portuguese, B will partially divest A and share in the gift.
Because A will be divested (partially) by someone other than O, A holds a FS/EL.
What would we call B's interest? Because B is an impatient grantee, B holds a shifting executory interest
that will divest (partially) A's interest.
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Chapter 4 – Landlord-Tenant Law
Leaseholds – multiple parties who simultaneously hold a legal interest in the same
property, but who hold consecutive possessory rights.

Tenant has a present right to present possession, & landlord gas a present right to future
possession that takes effect upon the termination of the leasehold.
A. The Lease as Conveyance
Thompson v. Baxter
 If a grant is made subject to the possibility that the grant is defeated by a
particular event, and there is not a temporal limitation on the grant, the grant is
one of a life estate.
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1. The Lease as Contract
B. The Rights & Duties of the Parties
1. Possession
Ernst v. Conditt
 One who takes an assignment of a leasehold interest is responsible to the lessor
under the terms of the lease.
Slavin v. Rent Control Bd. Of Brookline
 A residential landlord may unreasonably withhold his consent to an assignment of
a lease when there is no provision in the lease that his consent will not be
unreasonably withheld.
Sommer v. Kridel
 A landlord has a duty to mitigate damages when he seeks to recover rents due
from a defaulting tenant.
Crechale & Polles, Inc. v. Smith
 A landlord who failed to evict a holdover tenant and instead accepted rent for
another month may not then hold that tenant to a new one -year lease term under
state law.
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2. Maintaining the Premises
Adams v. Woodlands of Nashua
 Conditions that do not interfere with a tenant’s use of leased premises may
violate the implied warranty of habitability but not the right to quiet enjoyment.
Teller v. McCoy
 There is an implied warranty of habitability in a residential lease.
3. Nondiscrimination
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The Fair Housing Act of 1968
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C. Beyond the Black Letter: Parking – There’s an App for That
D. Skills Practice: Client Counseling & Drafting a Residential Lease
E. Chapter Review
(1) Trading tenants: On January 1, 2010, Liam conveyed a leasehold in a commercial
building that he owned, “To Alice and Bob for 10 years, for the sum of $5,000 per
month.” The agreement was duly signed and dated by the parties. Thereafter,
Alice and Bob shared the premises for business purposes and promptly paid $5,000
to Liam on the first day of each month. On January 1, 2011, Bob duly executed a
document stating “I hereby sublease to Braydon all my interest in the property for
the period January 1, 2011 thro ugh December 31, 2019.” Thereafter, Bob vacated
the premises and Braydon moved his business into the building, sharing space with
Alice. When Liam realized what had happened, he wrote Bob a letter that stated,
“I withhold my consent to your sublease to Bra ydon and hereby terminate your
tenancy.” Alice and Braydon did not know of the letter, and continued to pay
$5,000 to Liam on the first day of each month, and Liam cashed the checks. On
January 1, 2012, Alice was in a serious car accident and died on the w ay to the
hospital. Her valid will duly conveyed her entire estate to her daughter Ava, who
promptly took over her mother’s business operation in Liam’s building. On
February 1, 2012, Liam served Ava and Braydon with a notice to vacate the
premises in 30 days and changed the locks on the building so that they could not
enter. They refused to surrender the property and hired a locksmith to let them
back into the building. Liam brought a legal action to evict Ava and Braydon. What
should each of the parties argue? What are the precise property interests of each
party? Who should win the lawsuit?
Trading tenants: Ava and Braydon should win the lawsuit. Together they hold a term of years in the
commercial building. The initial 1/1/2016 conveyance from Liam to Alice and Bob created a term of years
because it has a specific beginning calendar date (it was effective immediately) and a specific ending
date or formula (the facts state that the lease was to terminate 10 years after January 1, 2010, which
would cause it to terminate on January 1, 2020). In addition, the lease complied with the statute of
frauds (the facts state that the agreement was duly signed and dated by the parties). As a matter of
terminology, Bob’s transfer of his interest to Braydon was likely an assignment (rather than a sublease)
because Bob conveyed his entire interest to Braydon (both assignment and original lease terminated on
1/1/2020). Further, the facts state that Braydon paid rent directly to Liam (Alice and Braydon “continued
to pay $5,000 to Liam on the first day of each month”). Although Bob remained in privity of contract with
Liam, Braydon entered into privity of estate with Liam.
Liam will argue that the tenants breached the lease when Bob purported to “sublease” his share of the
tenancy to Braydon. He will point to his letter to Bob in which he specifically withheld his consent to the
transfer to Braydon and terminated the tenancy. He will argue that such breach terminated the tenancy,
thereby giving him the right to retake possession through his action for eviction. Liam’s arguments are
weak, and he will likely not prevail.
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Braydon will first argue that the “sublease” by Bob was valid. The facts do not give any indication that
the original lease contained a non-assignment clause prohibiting assignments without Liam’s consent. In
the absence of such language, periodic tenancies and terms of years are freely transferable by sublease
or assignment unless the lease states otherwise. Even if the lease did contain such a provision, such
restraints on alienation are disfavored and strictly construed against the landlord. Further, under the
modern trend, landlords may not unreasonably withhold consent for subleases and assignments of
commercial leases, such as the one initially conveyed to Alice and Bob (the facts state that Liam
conveyed a leasehold “in a commercial building”). Further, Braydon will argue that Liam impliedly
consented to the assignment (or waived his right to object) because he accepted rent directly from
Braydon and cashed the checks.
Ava will argue that her leasehold interest is valid because death has no effect upon a term of years. The
facts state that the conveyance to her was valid (Alice’s “valid will duly conveyed her entire estate to her
daughter Ava”). Therefore, Ava simply took her mother’s place as Bob (or Braydon’s) cotenant. In
Chapter 5, we will study how two or more tenants can share a leasehold.
F. Chapter Quiz
(1) Which of the following estates is not clearly recognized by the common law, &
therefore potentially violates the numerus clauses principle?
Lease for life, p. 214, “there is no such thing as a lease for life”.
(2) Do periodic tenancies require notice of termination?
Yes, the common law required notice of termination equal to the length of the period, up to a maximum
of six months.
(3) For tenancies at will, can one party unilaterally control the right of termination?
No, p. 207, the defining characteristic of the tenancy at will is that either landlord or tenant can
terminate the lease at will and at any time. If the lease purports to give the power of termination to the
landlord only, most courts will readily imply a reciprocal power in the tenant. But if the lease purports to
give the power of termination to the tenant only, courts might be willing to uphold the unbalanced
arrangement that favors the tenant, and then label the property interest as something other than a
tenancy at will, as in Thompson v. Baxter.
(4) What kind of lease do you have? Are you required to give notice?
Term of years does not require notice before you can terminate. Periodic tenancy, you must take care to
give proper notice to avoid automatic renewal for a new term. Tenancy at will, you are not required to
give notice.
(5) Which statement is most accurate c oncerning assignments?
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The landlord can collect rent from either T1 or T2.
T1 remains in privity of contract with the landlord and is therefore bound by the covenance in the lease
(unless L has expressly “released: T1 from the lease & its obligation).
T2 is in privity of estate with the landlord (because T2’s tenancy adjoins the landlord’s reversion) & is
therefore bound by the duty to pay rent. (T2 could also become in privity of contract with L if T2 expressly
“assumes” the lease & its obligations).
(6) Which statement is most accurate concerning subleases?
The landlord can collect rent from T1 only.
T1 remains in privity of contract (because she signed the lease) and privity of estate (because T1’s
leasehold adjoins the landlord’s reversion). The landlord cannot collect rent from T2 because he is neither
in privity of contract nor privity of estate.
(7) Under the majority rule, do residential landlords have a duty to act reasonably
when deciding whether or not to consent to a sublease or assignment?
No. The modern trend imposes a greater duty on landlords under a commercial lease.
(8) Review the model lease. Does it contain a “ silent consent” clause related to
subleases & assignments?
No. The phrase “silent consent” refers to silence on the standard that governs the landlord’s decision
whether or not to approve requested assignment/subleases. In the model lease, P13 does contain such a
standard: “Consent will not be withheld except for good reason.”
(9) Does Sommer v. Kridel follow the modern trend on whether a landlord has a duty
to mitigate damages when seeking rents due from a defaulting residential tenant?
Yes. The modern trend requires landlords to make reasonable efforts to mitigate the tenant’s damages,
at least in some circumstances. In Sommer, NJ recognized a duty to mitigate, atleast for residential
leases.
(10)
In the model lease, what happens if the tenant holds over after the
leasehold expires and the parties do not reach an agreement about a new lease?
An implied month-to-month periodic tenancy arises.
(11)
Under which covenant/warranty must a tenant move out in order to pursue
a remedy for the landlord’s breach?
The covenant of quiet enjoyment. Courts often confuse the covenant of quiet enjoyment with the implied
warranty of habitability or blur the two doctrines together. However, the better response is that a breach
of the covenant of quiet enjoyment entitles T to remedies for “constructive eviction”, provided T moved
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out within a reasonable time (and therefore completes the “eviction). Conversely, the implied warranty
of habitability does not require T to move out but provides for an award of damages that enables T to
complete the repairs (or other similar remedies leasing to an improvement of the physical condition of
the premises).
(12)
Review the FHA section 3603(b)(2) exemption related to dwellings occupied
by no more than four families. Is the owner of such a property exempt from all of
the prohibitions contained in section 3604?
No, even if the owner actually maintains & occupies one of such living quarters as his residence. The first
sentence of section 3603(b) makes clear that nothing in section 3604 other than subsection (c) applies to
exempt properties. Section 3604(c), in turn, contains a prohibition against notices, statements, or
advertisements that indicates any discriminatory preference, limitation, or discrimination. Thus, an
otherwise exempt landlord must still refrain from notices, states, or ads that violate section 3604(c).
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Chapter 5 – Concurrent Ownership & Marital Systems
Unity of Possession – the idea that all owners have a right to possess the whole of the
property at the same time
A. Concurrent Ownership
1. Classifying the Estate
Four Unities: (1) time, (2) title, (3) interest, & (4) possession.
Unity of Time – the interest of each owner must vest at the same moment in time
Unity of Title – all owners must take title by the same instrument, such as a deed or will .
Unity of Interest – each cotenant must hold an equal sh are of the property, of equal
duration.
Unity of Possession – even though each cotenant only owns a share of the property, each
has an undivided right to occupy the entire property.
Tenants In Common (TIC)






Default concurrent estate
Requires only the unity of possession
Because unity of interest is not required, cotenants frequently own unequal shares
corresponding to the percentage of the purchase price paid
Transferable inter vivos, by will, & by inheritance
Because unity of time & title are not required, the transferee takes over the transferor’s
place as a TIC, even though the transferee’s interest vested at a later time than the
original cotenants, & even though it was conveyed by a different instrument
Tenancy in partnership – modified form, evolved to fulfill the needs of business
enterprises
Joint Tenants w/ a Right of Survivorship





JT/ROS or JT require the satisfaction of all four unities, both at the initiation of the
tenancy & throughout its duration
Said to hold “per my et per tout” (“by the half and by the whole”), equal, undivided
fractional shares of the estate as a whole
For survivorship, each stand to take the whole; but for purposes of alienation, each can
transfer her own share
Despite the unity of title requirement, some jurisdictions allow two or more persons to
acquire joint tenancy by adverse possession, provided they undertook color of title
(defective instrument purporting to create joint tenancy)
Despite unity of interest requirement, some jurisdictions allow cotenants to own unequal
fractional shares of the property
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






In some jurisdictions strict adherence to the four unities has been replaced with a test
that relies on the intent of the parties (In re Estate of Johnson)
ROS – upon the death of the first joint tenant, that tenant’s share terminates, the
remaining joint tenant becomes the sole owner, & the decedent’s share does not “pass”
to the surviving joint tenant but ends*
Joint tenancies are often used as substitutes for wills & avoid the need for probate.
Joint tenants cannot pass their share by will or devise to others because there is no
interest that survives their death.
If only one joint tenant incurs a debt or conveys a mortgage interest to another, the debt
or mortgage does not survive the death of that cotenant. (Lenders routinely ask all joint
tenants to sign mortgage documents.)
If all joint tenants die, the property passes to heirs who become TIC
*Unilateral action by one of the cotenants can sever the joint tenancy, but only as to the
interest transferred*
 If one cotenant deeds her interest to another, destroying unity of time & title,
then the JT transforms into TIC.
 Severance can occur without the knowledge of the other joint tenant & can
destroy the ROS.
 Limited to the interest transferred
joint
Tenants by the Entirety







TBE can exist only between married spouses, who hold the property as a unit, not by
equal shares (per tout et non per my).
Must be married before they can take title as TBE, does not automatically convert after
marriage
Cannot be created unless the tenants are married & four unities are satisfied.
Recognized by William Blackstone in the late 18th century (origin dates are earlier)
Features a ROS that is more durable, cannot be unilaterally destroyed by one spouse
acting alone
Some jurisdictions presume a grant to a married couple creates a TBE in the absence of a
clear intent to the contrary
TBE recognized in fewer than half the states
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Misc. Issues


A single disgruntled TIC can petition the court for a partition that will divide the property
into separate ownership
 Partition in Kind - physically delineating separately owned parcels
 Parition by Sale - ordering a sale, the profits of which will be divided among the
cotenants in accordance with their percentage share of ownership
 JT can achieve the same result by severing the JT into TIC, & then seeking
partition
 TBE cannot be partitioned, but termination of shared ownership can be
accomplished through divorce & distribution of assets
Two or more people can have concurrent ownership of any of the estate or future
interests
2. Actions by a Single Cotenant
In re Estate of Johnson
 Under the intent-based approach to evaluating the termination of a joint tenancy,
the instrument purporting to terminate the tenancy must be valid.
 Court determined JT1 lacked the intent to sever the joint tenancy, & therefore the
ROS continued, & the property passed to JT2 at JT1’s death.
3. The Challenges of Shared Ownership
Unity of Possession & Ouster
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



Applies to all types of concurrent interests, giving each cotenant the right to possess the
whole of the premises
None can complain of the other’s presence, and a single cotenant in sole possession does
not owe rent to the other cotenants
Sometimes one cotenants possession is so complete that it constitutes an ouster
 Ouster – the wrongful exclusion of co-owners from all or part of the premises
 Excluded owners can bring an action in ejectment, but may not resort to selfhelp in the interest of keeping the peace
 The occupying owner may owe rent to the others for the period of exclusion
If one cotenant ousts the others, the statute of limitations for adverse possession begins
to run.
 Without ouster, one cotenant in sole possession cannot extinguish the other
cotenants’ interest by adverse possession
The Condition of the Premises – Waste


Those who share property over time can be liable in waste to those entitled to future
possession, likewise to those who share property across space
A cotenant in sole possession (with or without ouster) who damages the property will be
liable to the other owners for waste, because they have reduced the value of the
property
Finances




If one owner leases a portion of the premises to an outside party, then the cotenant is
liable to the others for their share of the rents received, under the theory that the lessor
is acting as an agent for the other cotenants.
 Single owner cannot grant the lessee exclusive possession because it interferes
with the other owners’ possessory rights & would constitute an ouster
If one cotenant makes necessary expenditures such as mortgage or tax payments, that
owner generally has a right to recover a share of the expenses from the other cotenants.
A cotenant who opts to make elective expenditures for repairs or improvements usually
cannot compel others to contribute to the costs.
The debts, mortgages or other liabilities incurred by one cotenant alone cannot be
satisfied from the interests of the other cotenants.
Partition – An Exit Strategy




Co-owners can voluntarily choose to terminate a concurrently held estate.
In the absence of agreement, a cotenant can petition the court for partition, even over
other’s objections.
TBE & Community Property cannot be partitioned but can be transformed into another
type of concurrent interest where they can be partitioned after
Partition – terminates shared ownership, Severance – destroys a ROS & transforms JT
into TIC
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

If property can be divided physically, court will order partition in kind. (preferred
method)
 Owelty – a cash payment, when shares of property are divided unequally, the coowner receiving a larger share may be required to make payment to the others
If property cannot be divided physically, court can order partition by sale, & divide the
proceeds among the co-owners.
 Extraordinary remedy
Legal Actions


Action for Accounting – one cotenant seeks to compel another to share benefits obtained
from using, leasing, or otherwise exploiting the property
Action for Contribution – a cotenant can seek reimbursement from another for a share of
expenses incurred
 If the action is initiated by sole owner in possession, some courts will give nonoccupying owner an offset for the fair market rental value, reducing the
contribution owed
Parker v. Shecut
 A person commits ouster of a party entitled to possession of real property if th e
person’s conduct is so distinctly hostile to the rights of other cotenants that the
intention to exclude is clear and unmistakable.
Ark Land Co. v. Harper
 The economic value of property is not a decisive factor in determining whether to
partition in kind or by sale.
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Uniform Partition of Heirs Property Act
4. Modern Applications: Condominiums, Cooperatives, and Time-Share Properties
The Condominium
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



Form of concurrent ownership under which residents hold an undivided interest as TIC in
the shared elements of community, but also hold an individual interest in the interior of
the unit.
Form of legal ownership, not architectural (can be houses, buildings, etc.).
State statutes control many aspects of creation & operation.
Most communities organize owners’ associations & adopt rules/regulations known as
“restrictive covenants”.
The Cooperative





A nonprofit corporation owns entire premises.
Each resident is a stockholder in the corporation & holds a long-term leasehold interest
in an individual unit or apartment.
Corporation holds a single mortgage to finance the structure, if one stockholder defaults
the others must make up the shortage.
Often organize owners’ associations & adopt restrictive covenants.
Exist primarily in multi-unit buildings in dense urban areas like NYC
The Time-Share Holding

Under “deeded” time-share arrangements, each cotenant owns in interest in a specific
unit to use at a specific time each year.
 Real property interest that can be sold, rented, or otherwise freely alienated.
 Together the owners own the resort property.
 Allows people to have an ownership stake in their vacation home & to capture any
associated appreciation in equity, rather than to pay for hotel rooms.
 As a variation, one can own the right to use a particular unit for a specified time interval,
which is an interest in personal, rather than real, property.
Dutcher v. Owens
 Under Texas law, the owners of condominium units are not jointly and severally
liable for damages arising from negligence in the management of common
elements.
B. Marital Property Systems
C. Beyond the Black Letter: New Forms of Concurrent Ownership
D. Skills Practice: Client Counseling & Negotiating a Tenants in Common
Agreement
E. Chapter Review
(1) Changes over time: Olivia conveyed property, “To Aiden, Brittany, and Cody as
joint tenants with a right of survivorship.” Subsequently, Cody conveyed all of his
interest to Darren. What are the interests of Aiden, Brittany, Cody, and Darren?
Subsequently, Aiden dies. What are the respective property interests after Aiden’s
death?
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Changes over time: Initially, Aiden, Brittany, and Cody each have an undivided 1/3; interest in the
property as joint tenants. The conveyance by Cody severed the joint tenancy, but only as to the interest
conveyed—here, Cody’s interest. Thereafter, Darren held an undivided 1/3; interest as tenant in common
with Aiden and Brittany. Aiden and Brittany held an undivided 2/3; interest as joint tenants with one
another, and as tenants in common with Darren. After Aiden died, Brittany’s right of survivorship took
over the entire 2/3; interest. Thereafter, Brittany held an undivided 2/3; interest as tenant in common
with Darren (who held an undivided 1/3; interest in the property).
(2) 2. The sisters and the townhouse: Two sisters, Ava and Bella, inherited a
townhouse from their aunt. The deed to the property specified that Ava and Bella
p. 342took title, “jointly, as tenants in common, with equal rights and interests in
said land, and to the survivor thereof, in fee simple. To have and to hold the same
unto the said parties hereto, equally, jointly, as tenants in common, with equal
rights and interest for the period or term of their lives, and to the survivor thereof
at the death of the oth er.”
Ava moved into the townhouse and lived alone there for several years. At no time
did she ever pay rent to her sister, Bella, who lived some distance away.
About a year ago, Ava entered into a written lease with Connor. The lease granted
Connor a two-year lease term in the townhouse. Ava moved out and Connor took
possession. Connor did not pay Ava the agreed monthly rent on a regular basis.
Several months later, Ava died. At the time of her death she had not received rent
for the townhouse for several months.
Ava left a valid will in which she left all her property to the Humane Society. Bella
claims that she owns the property in fee simple absolute, and has filed a claim
against the estate for one-half the rental value of the townhouse for the years Ava
lived there alone. Bella also claims one -half of any rents paid by Connor. Finally,
the Humane Society claims one -half of the townhouse, which Bella contends is
hers alone.
a. Who owns the townhouse?
Bella owns the townhouse in fee simple absolute because the grantor’s intent was to create a joint
tenancy with a right of survivorship. At Ava’s death, her share of the cotenancy ceased, leaving nothing
that could pass to the Humane Society by will. Therefore, Bella’s right of survivorship took effect, giving
her ownership of the entire property in fee simple absolute.
The grant here puts two property maxims at odds: the modern trend of favoring tenancy in common to
promote free alienability against abiding by the grantor’s intent. The grant expressly used the words
P a g e | 61
“tenants in common,” but with a prefatory clause “jointly” and a modifier creating a right of
survivorship. Tenancies in common do not have a right of survivorship. Accordingly, the prefatory clause,
plus the language of survivorship is probably sufficient to make it clear that their aunt intended to create
a joint tenancy with right of survivorship, and not a tenancy in common (even though she failed to use
the precise “magic words”). The four unities (time, title, interest, possession) were present, so the
grantor’s intent was not defeated by a lacking unity. Ava and Bella acquired their property interests at
the same time (at their aunt’s death), by the same instrument (their aunt’s will), received the same
interest (“with equal rights and interests”), and held under a unity of possession (“with equal rights and
interests”). Accordingly, the grant satisfied the four unities.
It is unlikely that the lease between Ava and Connor severed the joint tenancy. First, without more, there
does not seem to be sufficient evidence that Ava intended to sever the joint tenancy. See In re Estate of
Johnson (under intent-based test, requiring evidence that joint tenant intended to sever the joint tenancy
into a tenancy in common, rather than to terminate the cotenancy altogether and assert sole
ownership). Moreover, in jurisdictions following the four unities rule, it does not appear that the
conveyance of a lease is sufficient to destroy any of the unities. See Tenhet v. Boswell (note following In
re Estate of Johnson). Unlike a mortgage in a title theory state (see Harms v. Sprague, note case
following Johnson), a leasehold is a nonfreehold estate and its conveyance is unlikely to destroy the unity
of title.
b. Is the estate liable to Bella for one -half the rental value of the townhouse
for the period Ava was in possession?
No. Under the majority rule, one cotenant in exclusive possession does not owe rent to the others unless
there has been an ouster. Under our facts, there is no indication that Ava ousted Bella from the
townhouse or that Bella was refused entry upon demand. Instead, it appears that Ava was simply
exercising her right to occupy the entire premises under the unity of possession. See Parker v. Shecut
(requiring unequivocal actions to establish an ouster)
c. Is the estate liable to Bella for one -half of any rent Ava collected from
Connor?
Yes, Ava’s estate is liable for rent collected from Connor. If one cotenant leases a portion of the premises
to an outside party, then the cotenant is liable to the others for their share of the rents received, under
the theory that the lessor is acting as agent for all cotenants.
F. Chapter Quiz
(1) Which concurrent estate(s) have a right of survivorship? Choose all correct
answers below.
The joint tenancy, the tenancy by the entirety.
(2) In In re Estate of Johnson, did Roy unilaterally sever the joint tenancy he held with
Emogene?
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No, because the court determined he lacked the intent to sever the joint tenancy. Because the joint
tenancy was not severed, the right of survivorship continued. Therefore, at Roy's death, Emogene took
the property in fee simple absolute under her right of survivorship. At Emogene's death, the property
then passed under her will.
(3) Joint tenancies with a right of survivorship pose the problem of the so -called
"secret severance" where one co -tenant can unilaterally destroy the other's right
of survivorship and convert the JT i nto a TIC. Does the same problem exist with
tenancies by the entirety? (Read carefully p. 275; see also table pp. 276 -77).
No. Because the cotenants hold per tout et non per my, neither husband nor wife can dispose of any part
without the assent of the other. Unlike the JT/ROS, the right of survivorship is not "fragile" in a TBE.
Neither spouse in a TBE can convey unilaterally convey his/her interest, in contrast to the JT (where
unilaterally conveyances can destroy the ROS). Even in jurisdictions that allow limited alienability by a
single spouse, the right of survivorship cannot be destroyed. (Review table, pp. 276-77).
(4) In which of the following judicial actions does the court physically divide the
property into distinct segments and terminate shared own ership?
Partition in kind. Notice that a single co-owner can petition a court for partition, even over the objection
of the other owners! Courts and many state statutes say that partitions in kind are the preferred method
of partition. In practice, however, partitions by sale are probably the dominant method employed today.
(5) If a single cotenant occupies the premises, does that cotenant owe rent to the
others? (Read carefully p. 292, "Unity of possession and ouster").
No, not unless the tenant in possession has committed an ouster. Under the unity of possession, each
cotenant has an undivided right to occupy the entire premises. The mere exercise of this right does not
violate the parameters of the co-tenancy and does not trigger any obligation to the others, such as the
obligation to pay rent. Instead, the cotenant in possession would owe rent to the others only if there had
been an “ouster” that wrongfully excluded the others.
(6) A owns a condominium. Which statement is most accurate concerning A's property
interest?
A holds FSA in her own unit, and a TIC with other co-owners in the common elements of the community.
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Chapter 6 – From Private Property to the Commons
A. Private Property
Private Property - a single owner who enjoys (or co -owners who enjoy), among other
things, strong rights of exclusion and transferability
B. Public Property
Public Property—property that is owned by local, state, or federal governments .

When governments own property, they generally hold it to promote the interests of the
collective citizenry, rather than to specifically advance the needs or desires of selected
individuals.
States own the submerged lands beneath navigable waters, generally beginning at a
baseline of the ordinary high-water line.
Illinois Central Railroad Co. v. Illinois
 The public-trust doctrine prevents the legislature from granting a private
corporation title to submerged lands held in trust for the public.
C. Commons Property
Commons property - the residual category that theorists usually use when they describe a
regime that is not private or state property (Heller)


there are broad use rights, but no exclusionary rights
every individual may use any object of property and no individual has the right to stop someone
else from using the object
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Under rule of capture, commons property can become private property or public
property.
The Tragedy of the Commons
The tragedy of the commons is a situation in which individual users, who have open
access to a resource unhampered by shared social structures or formal rules that govern
access and use, act independently according to their own self -interest and, contrary to
the common good of all users, cause depletion of the resource through their
uncoordinated action in case there are too many users related to the available r esources.
D. Beyond the Black Letter: Mining Asteroids in Outer Space
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E. Skills Practice: Statutory Law & Implementing Regulations
F. Chapter Review
1. Drilling for oil: Jayden drilled an oil well on his land and began to produce
thousands of barrels of oil per day. The well is located only 350 feet from the
property of his neighbor Sarah. Sarah hired a consultant, who discovered that
there was a vast deposit of oil beneath Sarah’s land, which Jayden’s well was
pumping out. Sarah sued Jayden for damages, claiming tha t Jayden was taking her
oil. Assume that Sarah can prove that the oil reservoir that Jayden was draining
extends beneath her land. Assume also the jurisdiction has no relevant legislation
governing the extraction of oil. Which statement is most accurate?
a. Jayden should prevail under the rule of Edwards v. Sims (Chapter 1) and its
maxim, cujus est solum, ejus est usque ad coelum ad infernos.
b. Jayden should prevail under the English (or common law) rule discussed in
Wisconsin v. Michels Pipeline Construction if the court determines that oil
is a fugitive resource.
c. Sarah should prevail under the rule in Johnson v. M’Intosh (Chapter 1) if
she can prove that the consultant (as her agent) discovered the oil first.
d. Sarah should prevail under the rule of Ghen v. Rich because it is not
possible for Jayden to first “kill” the oil, as was required of the whaler in
Ghen.
Drilling for oil: The correct answer is B. Under the common law rule, the first to capture a “fugitive
resource” acquires title to it. Choice A is not correct because the ad coelum doctrine would seem to
support Sarah’s claim (not Jayden’s), at least for the portion of the oil that originated from beneath her
land. In any case, the ad coelum doctrine is not a good fit for fugitive resources that do not consistently
remain beneath one particular landowner’s surface property. Choice C is incorrect because the discovery
p. 796doctrine applies to real property and has not been extended beyond the context of Johnson v.
M’Intosh. Choice D is also incorrect. Literally, Ghen awarded the whale to the person who first kills it, but
more broadly, it is simply a rule of first possession.
(3) Owning a condominium: Recall our study of condominium ownership from Chapter
5.A.4. Into which category of ownership do condominiums best fit, and why
a. Private propert
b. Public propert
c. Commons propert
d. Liberal commons property
Owning a condominium: The correct answer is D. Condominiums are a type of liberal commons that are
a private/commons hybrid. Recall that condominiums involve private ownership of the interior of each
P a g e | 66
unit (often, in fee simple absolute), and that the exterior of the buildings and any common areas are
owned as tenants in common by all residents. As such, they are not purely private property because one
owner lacks the ability to exclude all other owners. But neither are they purely commons property,
because each owner retains the right to exclude non-owners. Answer A is incorrect because
condominiums are not purely private property. With respect to the common areas, no owner has a right
to exclude the others. Answer B is incorrect. Condominiums are not public property because they
typically are not owned by governmental entities. Finally, answer C is incorrect. Condominiums are not
commons property because each owner has a right to exclude non-owners.
2. The Raging River and the power company: Assume that the Ra ging River is
“navigable” in the technical sense discussed in the note after Illinois Central
Railroad Co. A large, private utility company wants to install hydroelectric power
generating facilities in the riverbed. Can the state grant the utility the righ t to so
use the riverbed?
a. Yes, but only if the state determines that the grant does not substantially
impair the public interest in the lands and waters remaining.
b. Yes, because the riverbed is the state’s property to convey as it wishes.
c. No, because the public trust doctrine forbids any private use of state
property.
d. No, because the river is a commons over which the state has no authority
to either grant or deny use rights.
The Raging River and the power company: The correct answer is A. Under the Illinois Central exception,
the state can grant its submerged lands into private ownership if such conveyance is not contrary to the
public trust interest in the remaining lands and waters. Here, rather than convey a fee simple absolute,
the state is conveying the right to use the riverbed—mostly likely a type of easement (which we will cover
in Chapter 9). Choice B is incorrect because Illinois Central makes clear that the states cannot abdicate
their duty to hold submerged lands in trust for the benefit of the people. Choice C is incorrect because the
public trust doctrine does allow for a narrow exception, as set forth in Illinois Central. Choice D is
incorrect because navigable watercourses are not a commons over which states retain no authority.
Rather, submerged lands beneath navigable watercourses are a type of public property that is owned by
the states. This problem is based on PPL Montana, LLC v. Montana, 565 U.S. 576 (2012) (determining
relevant segments of rivers to be nonnavigable and therefore rejecting Montana’s claim that the utility
owed the state compensation for its use of the riverbeds over which Montana unsuccessfully claimed
ownership). This problem, of course, is oversimplified. In actual practice, the federal government would
also have something to say about this because it has a “navigation servitude” to keep the nation’s
navigable watercourses open for unobstructed navigation for use in commerce and other purposes. And
as you might imagine, Congress has passed statutes regulating power generation.
G. Chapter Quiz
(1) What is the extent of state ownership of submerged lands off their shores?
(casebook pp. 355-56)
States own submerged lands beneath navigable waters, generally extending from the mean high tide line
seaward for 3-9 nautical miles.
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(2) In The Tragedy of the Commons, Garrett Hardin uses the example of the National
Parks. Are they a true commons under the classifications set forth on pp. 357 -58?
No, because the federal government retains title to the national parks, together with the right to set
exclusionary rules.
Hardin later clarified that he was referring to unmanaged lands (see p. 363 n. 4) . This would include
both the true commons and also unmanaged public property owned by a unit of government--such as a
hypothetically unmanaged national park (which does not currently exist in practice).
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Chapter 7 – Real Estate Transactions
The law generally agrees on the importance of information disclosure in a real estate
transaction.
A. Overview of the Real Estate Transaction
1. The Timeline
Three Stages:
(1) Contract Formation
The buyer searches for a suitable property, often with the aid of a real estate broker. If buyer identifies
such a property, then the buyer & potential seller negotiate for the purchase & sale of real estate. If
successful, this results in a signed, written, document that satisfies the statute of frauds (or an oral
agreement that falls under an exception to the statute of frauds).
(2) Executory Period
Most states follow doctrine of equitable conversion (exceptions in MA, WY, etc.). Under that theory,
upon signing of the contract the buyer takes “equitable title” to the property, leaving bare “legal title” in
the seller. If the property is destroyed or damaged during the executory period, the buyer bears the risk
of loss in some jurisdictions, unless the contract provides otherwise.
During this period the parties perform various tasks under a detailed time schedule set forth in the
contract. Most contracts contain three contingencies that allow the buyer to perform certain actions
before finalizing the purchase: (1) investigate the physical condition of the premises (survey for
property boundaries or if its located in a floodplain), (2) arrange for a mortgage or other financing,
and (3) investigate to make sure the seller has good title & obtain title insurance to cover backup for
issues not found in the search.
In jurisdictions that follow the merger by deed doctrine, all pre-closing promises are said to merge into
the final documents provided at closing. Meaning, the provisions of the deed given to the buyer at
closing supersede and nullify all previous promises contained in the purchase contract.
(3) Post-Closing Period
Most critical events of this period are the buyer’s recording of the deed in the public records & the
lender’s recording of the buyer’s mortgage. Problems can still occur, like foreclosure or competing title
claims.
2. The Real Estate Broker
Although some sellers’ market their properties without a broker through for sale by
owner transactions, the majority of buyers & sellers use a broker. They have access to
vast amounts of market data, such as the MLS.
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Multiple listing service - a restricted database of all properties listed for sale with a
broker within a specified geographical area
Real estate agents (salespersons) usually work under real estate brokers. Both categories
are heavily regulated by the states, which establish educational standards & licensing
examinations. Requirements for brokers are usually more extensive.
The Representation






Most brokers represent sellers. The seller will pay the broker’s sales commission, which might
create incentives for the broker to act against the buyer’s interests.
o Seller & broker execute a listing agreement – contract under which the seller retains the
broker to market her property.
Increasingly popular for buyers to have their own brokers, who work as buyer’s agents.
Some states allow brokers to serve as dual agents for the buyer & seller in same transaction, as
long as they consent.
Brokers act as fiduciary agents of their clients & owe them duties of loyalty, disclosure, &
confidentiality.
Brokers can also serve as transactions coordinators who facilitate the sale, but do not represent
either party in a fiduciary capacity.
Most states require a broker to provide written disclosure form expressly describing the broker’s
relationship.
The Commission



Commissions range between 5% & 7% of the sales price.
The sellers broker will split commission with buyer’s broker, unless the buyer does not have a
broker.
The broker earns a commission when they produce a buyer who is ready, willing, and able to
purchase upon terms acceptable to the seller. (majority rule) (usually occurs when buyer &
seller enter a contract, even though it may unravel)
o Exception recognized where the terms of the sales contract express it. Most contracts
outline the rights of buyers & sellers to terminate the contract if certain conditions are
not met, & in those cases, the terms of the contract may excuse the seller from the duty
to pay a commission.
o Sellers & brokers can also insert a clause in the listing agreements that the broker is not
entitled to commission unless the contract closes & the parties consummate their deal.
Fairbourn Commercial Inc. v. American Housing Partners
 Majority Rule
 Requiring seller to pay commission even though buyer did not proceed to closing,
in part because the broker is not an insurer of the subsequent performance of the
buyer.
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Ellsworth Dobbs, Inc. v. Johnson
 Minority Rule
 Requiring sellers to pay the broker’s commission only if the sale is finalized.
3. Discrimination in the Sale of Real Property
Housing practices are cognizable under the Fair Housing Act not only when the D has a
discriminatory intent, but also when the D’s practices have a dispro portionately adverse
effect on people that fall within the FHA’s protected classes.
Texas Dep’t of Housing & Community Affairs v. The Inclusive Communities Project, Inc.
 The Fair Housing Act prohibits entities from making housing decisions that have a
disparate impact on a protected class, even if this impact is not intended by the
entities making the decisions.
 Disparate Impact Theory of Liability
Racial Steering – the practice by which some real estate agents promote housing
segregation by declining to show properties in predominantly white neighborhoods to
persons of color
B. The Real Estate Contract
1. The Statute of Frauds
Hickey v. Green
 An oral land-transfer agreement may be specifically enforced, even though it
violates the Statute of Frauds, if the party seeking enforcement detrimentally
relied on the validity of the contract and injustice can be avoided only by specific
performance.
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2. Equitable Conversion
Equitable Conversion Doctrine – the buyer becomes equitable owner from the moment
the parties sign an agreement enforceable through specific performance, leaving the
seller with bare legal title and a claim for the purchase price secured by a lien on the
property

If property is destroyed by fire, flood, etc. most jurisdictions will treat the new equitable owner as
the owner for virtually all purposes.
Brush Grocery Kart, Inc. v. Sure Fine Market, Inc.
 After executing a contract for the sale of real property, the vendee does not bear
the risk of loss to the property prior to the transfer of title unless the vendee is in
possession of the property.
3. Remedies for Breach of Contract
Specific Performance is considered an extraordinary remedy in most breach of contract
cases, but courts have awarded it as a favorable remedy when the contract relates to the
sale of land.
C. The Physical Condition of the Property
Caveat emptor “let the buyer beware”
Under common law doctrine of caveat emptor – a seller of real property was not liable
for defects in the land or its structures , except in cases where the seller had
(1) Expressly warranted condition of the premises
(2) Engaged in concealment or fraudulent misrepresentation
(3) Had a confidential or fiduciary relationship with the buyer
1. The Seller’s Duty of Disclosure
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Stambovsky v. Ackley
 If a seller creates a condition that materially impairs the value of a contract and is
within the knowledge of the seller or unlikely to be discovered by a prudent
purchaser exercising due care, nondisclosure of the condition constitutes a basis
for rescission of the contract.
2. Flood Risk & Federal Insurance
If a buyer seeks to purchase property in a special flood hazard area, the buyer will not be
able to obtain a mortgage from a federa lly regulated or federally insured lender unless
the property is covered by federal flood insurance.
Standard homeowners insurance policies do not cover flood insurance because the risk is
too great for private lenders to absorb.
D. Financing – Mortgages & Foreclosure
1. The Mortgage
Traditionally
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Buyer deposits earnest money (3% to 10%) into an escrow account to show good faith – a buyer
who defaults on the contract risks losing the earnest money.
Buyer applies for loan to satisfy the deadlines set out in the sales contract. The lender will order
an appraisal of the property, & then makes a loan commitment to the buyer.
Lender will pay the money to the seller at closing, who pays the broker’s sales commission.
Borrower provides two documents to lender (1) a promissory note, representing the buyer’s
contractual commitment to repay the loan, & (2) mortgage, which gives the lender a property
interest as security for the buyer’s obligation to repay the debt.
Lender’s security interest is called a lien, which is an encumbrance on the property that may
render its title unmarketable to future purchasers unless the entire loan is repaid.
Installment Land Contract
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Buyers enter into installment land contracts if they cannot afford to make a down payment or if
they have poor credit & likely would not qualify for a loan from an institutional lender.
Sellers generally charge interest at above-market rates in exchange for extending credit to risky
buyers.
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Proctor v. Holden
 A financing application initiated prior to the e xecution of a real estate contract
satisfies the contract’s requirement to apply for financing within a fixed time
period.
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2. Foreclosure
Greater Southwest Office Park, Ltd. V. Texas Commerc. e Bank Nat’l Ass’n
 In the absence of evidence of irregularity in a foreclosure sale, mere inadequacy
of sale price is not grounds for setting aside the sale.
Horne v. Harbour Portfolio
 Unfair lending practices that intentionally target or disparately impact a protected
group violate fair-housing laws.
E. Title Security
Marketable title – good title to property
Buyers can conduct title examination of the public records for assurance the seller has
good title to the property.
Buyer contract for certain assurances from the seller, & ideally the contract of sale will
promise to convey marketable title through a general warranty deed that contains
various seller warranties of the title.
Buyers routinely obtain title insurance issued by a commercial insurer, usually at the
seller’s expense.
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1. The Contract – The Promise of Marketable Title
Encumbrance – any right to an interest in land which may subsist in third persons, to the
diminution of value of the land, not inconsistent with the passing of title. (Proffit v. Isley)
Jurisdictions do not agree on the definition of “marketabili ty”, there is agreement that
the mere existence of public restrictions does not destroy marketability, but beyond that
is unclear.
Most jurisdictions recognize adverse possession as “marketable title” , but not
“marketable record title” until adjudicated by the court. (Conklin v. Davi)
Lohmeyer v. Bower
 The purchaser of real property may choose to cancel the sale if the title to the
land is found to be unmarketable.
2. The Deed – Title Warranties
General Warranty Deed
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Offers maximum amount of protection to the buyer.
In it, grantor warrants (“covenants”) against all defects in title, whether or not they arose during
the grantor’s period of ownership.
Grnator’s warranties extend throughout the entire period of the chain of title, up until the
moment of deed delivery.
Six covenants.
Special Warranty Deed

Generally, contains all six covenants, but warrants only that the grantor did not cause or create
any title defects during their period of ownership.
Quitclaim Deed
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Contains no warranties of title, but simply conveys to the buyer whatever the title holds.
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The deed contains important title warranties in the form of present & future covenants
of title.
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For breach of the first five covenants, the usual remedy is payment of damages (limited to
purchase price paid to grantor and interest).
For breach of the sixth covenant, specific performance is available if the grantor refuses to take
additional action as warranted.
Present covenants are breached, if at all, at the moment the deed is delivered.
Six Covenants
(1) Covenant of Seisin – warrants that the grantor is “Seized” (holds title & possession) of the estate
the deed purports to convey in both quality (ex: FSA) & quantity (ex: acreage)
(2) Covenant of the Right to Convey – promise that the grantor has the legal right to convey the
estate described in the deed. (ex: grantor holds equitable title as beneficiary of a trust, but lacks
the right to transfer ownership, held by the trustee of the trust)
(3) Covenant Against Encumbrances
(4) Covenant of General Warranty – warrants that the grantor will defend against claims asserted
by one with superior title or by one claiming under the grantor. Breached if the grantee suffers
an actual or constructive eviction from all or part of the property.
(5) Covenant of Quiet Enjoyment – promise that the grantee will not be disturbed in her quiet
possession of the premises by one who is lawfully entitled to them.
(6) Covenant of Further Assurances – warrants that the grantor will provide whatever further
assurances are necessary to perfect the grantees title (ex: providing documents). *Can be
enforced through specific performance.
*present covenants do not run with the land, future covenants do run with the land.
Brown v. Lober
 The mere existence, without more, of a superior title does not cons titute a breach
of quiet enjoyment.
3. Title Insurance
Riordan v. Lawyers Title Insurance Corp.
 Title insurance for lack of a right of access to the property and unmarketability of
title does not cover losses caused by lack of only practical access or physica l
defects.
F. Beyond the Black Letter: Climate – The Nest Real Estate Bubble?
1. Norfolk Sea Level Rise Takes Shine Off Waterfront Homes
G. Skills Practice: Reviewing Purchase Offers
H. Chapter Review
(1) The one-car Tudor: Blackacre was the site of a Tudor home with a one -car garage.
Shan contracted to convey “marketable title” to Blackacre to Barbara “by warranty
deed, free and clear of all encumbrances, subject to all restrictions and easements
of record applying to this property.” Through her title examination of the public
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records, Barbara learned that the property was subject to a private restrictive
covenant requiring that any house erected on the lot must have at least a two -car
garage. In Barbara’s lawsuit to rescind the contr act, what is the most likely result?
a. Barbara will prevail because the mere existence of a private restrictive
covenant makes title unmarketable.
b. Barbara will prevail because the restrictive covenant has been violated.
c. Shan will prevail because the contract waived Barbara’s right to object to
the restrictive covenant.
d. Shan will prevail because the mere existence of a restrictive covenant or
municipal ordinance does not make title unmarketable.
The one-car Tudor: The correct answer is B because the existence or violation of private restrictions (such
as restrictive covenants) makes title unmarketable. Although Barbara agreed through the contract to
accept restrictions and easements of record, she did not waive her right to object to violations of such
restrictions (here, the existence of a one-car garage violates the covenant’s requirement that all houses
must have at least a two-car garage). Answer A is incorrect. It states a proposition that is true in general,
but in this case, Barbara waived her right to object to recorded restrictions such as the two-car garage
requirement. Answer C is incorrect because the contract did not waive Barbara’s right to object to the
violation of the restrictive covenant. Answer D is incorrect. Although the mere existence of a municipal
ordinance generally does not make title unmarketable, the mere existence of a restrictive covenant does
result in unmarketability.
(2) Murder on the premises: Sofia contracted to sell her home to Benjamin. Many
years earlier, a murder had been committed on the premises. Although Sofia was
aware of that fact, she did not disclose it to Benjamin. If Benjamin learns of the
murder and sues to rescind the contract, who will most likely prevail? The
jurisdiction follows the modern trend with respect t o the doctrine of caveat
emptor.
a. Benjamin will probably prevail because Sofia had a duty to disclose the
circumstances of the murder to him.
b. Benjamin will probably prevail if the court determines that the murder
created a material defect in the premises.
c. Sofia will probably prevail because the defect was not latent.
d. Sofia will probably prevail under the majority rule of caveat emptor.
Murder on the premises: The correct answer is B because courts typically require sellers to disclose
defects that are material, latent, and known/should be known to the seller (see notes following
Stambovsky v. Ackley). The facts make clear that the defect is latent or hidden (because the prior murder
would not be apparent from an inspection of the premises) and known to Sofia. Answer A is incorrect
because sellers do not clearly have a duty to disclose past murders to sellers. Answer C is incorrect
P a g e | 78
because the past murder can better be described as latent (hidden) and not apparent to potential buyers.
Answer D is incorrect because caveat emptor is no longer the majority rule.
(3) Backing out of his promise: Sergio told Bridgette that he would p. 475sell his
property at #1 Main Street to her for $100,000. Bridgette agreed and wrote out a
check to Sergio for $300. Bridgette duly si gned and dated the check and wrote on
the back, “down payment toward purchase of #1 Main Street for $100,000.” Two
weeks later, Sergio changed his mind and told Bridgette that he did not want to
sell his property to her after all. If Bridgette sues Sergio for specific performance
of the contract of sale and Sergio denies that he ever entered into a verbal
agreement, what would be the most likely result?
a. Bridgette will prevail because the check was a signed writing that contained
both a description of the property and the total sales price.
b. Bridgette will prevail because her action in bringing the lawsuit was
unequivocally referable to the oral agreement.
c. The court will enforce the contract unless restitution would be inadequate.
d. The court will not enforce the contract because it failed to comply with
the statute of frauds.
Backing out of his promise: The correct answer is D. The check does not qualify as a writing that complies
with the statute of frauds because it does not contain the signature of the party to be bound (seller
Sergio). Answer A is true, but incomplete (the writing must also contain Sergio’s signature). Answer B is
incorrect because the stringent “unequivocally referable” standard cannot be satisfied simply by the
filing of a lawsuit. Answer C is incorrect because inadequate restitution would help to make the case for
contract enforcement (not for nonenforcement, as the response suggests).
(4) Adverse possession: Sapphire duly executed a contract for the sale of Blackacre to
Brody. The contract pr ovided that Sapphire would convey the property, “by
warranty deed with an abstract of title, certified to date showing good marketable
title, subject however to the encumbrances hereinabove set forth.” At closing,
Brody learned for the first time that Sapp hire claimed that the validity of the title
to a portion of the premises was based solely upon the doctrine of adverse
possession. If Brody sues to rescind the contract, what is the most likely result?
a. Sapphire will prevail because title acquired through a dverse possession is a
valid exception to the statute of frauds.
b. Brody will prevail because a title acquired through adverse possession is
not marketable title.
c. Sapphire will prevail unless the contract provided that “time is of the
essence.”
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d. Brody will prevail unless Sapphire can convince the tribunal that the title
to Blackacre is free from doubt and that all the elements of adverse
possession have been satisfied.
Adverse possession: The correct response is D. Although title by adverse possession can be “marketable
title” (but not marketable record title until it has been adjudicated and recorded), Sapphire must make
the case before a court or other appropriate tribunal. Response A is true but does not resolve the issue of
marketability. Answer B is an incorrect statement of the law. Answer C is incorrect. Although the absence
of a “time is of the essence” would assist Sapphire by potentially allowing her time to prove her case, it is
not enough for Sapphire to prevail.
I. Chapter Quiz
(1) Do a majority of states follow the doctrine of equitable conversion? (pp. 389 -90)
Yes. In most states, upon signing a contract to purchase real property, the buyer becomes the equitable
owner of the property! As we saw in Brush Grocery Kart (p. 411), the doctrine can take unwary buyers by
surprise and subject them to unexpected costs.
(2) In Texas Dep't of Housing & Community Affairs (p. 393), the plaintiff alleged, "the
Department has caused continued segregated housing patterns by its
disproportionate allocation of tax cred its" in white areas. Which section of the
Fair Housing Act (p. 260) provides the best support for the plaintiff's claim?
Section 3604(a) makes it unlawful to "otherwise make unavailable" a dwelling because of race, color,
religion, sex, familial status, or national origin.
The Court notes that the phrase "otherwise make unavailable is of central importance to its analysis,
which looks to the consequences of the distribution of the tax credits rather than the Texas department's
intent. Previously, the phrase to "otherwise make unavailable" had been largely overlooked by reviewing
courts, making this case a very important modern precedent under the FHA.
(3) The Statute of Frauds requires that contracts for the sale and purchase of real
property must be in writing to be legally enforceable. In most jurisdictions, which
of the following elements must be included in the contract to make it
enforceable? Select all answers that apply. (See table, pp. 405 -06).
-The identity of the parties
-A description of the property
-The sales price (or sometimes a formula such as "fair market value")
-The signature of the party to be bound
*Pay careful attention to this element. The party to be bound can be either seller or buyer, and
generally refers to the party against whom the plaintiff is seeking to enforce the contract.
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(4) Under the rule of Brush v. Sure Fine, which element(s) below must be satisfied
before a buyer bears the risk of loss during the executory period of a contract for
the sale of real property? Select the best response below.
-The purchaser signed the sales contract
-The purchaser has the right to possession
-Both of the above.
Under Brush, risk does not shift to the purchaser immediately upon equitable conversion, but only after
the purchaser also has the right to possession--generally showing the purchaser has enough control over
the property that it would be appropriate to assign the risk of loss to the purchaser. Review the sample
contract on p. 402 (para. q). Does that provision adequately resolve the uncertainty that triggered the
litigation in Brush?
(5) Suppose a contract calls for the sale of real property for $100,000. The buyer
breaches during the executory phase at a time when the property's market is
$110,000. In an appropriate lawsuit, the seller prev ails. Which statement below
accurately describe remedies available to the seller? (See p. 417, note 2.)
If the court orders specific performance, the seller would be entitled to $100,000.
(6) Carefully identify the three elements of the Stambovsky test to det ermine whether
the seller must disclose a property defect to potential buyers. Then compare the
alternative test of Johnson v. Davis (p. 422, n. 2). What is the primary difference
between the two tests?
Stambovsky requires disclosure of defects created by the seller, whereas Johnson requires disclosure of
defects that are known or should be known to the seller.
(7) Does the typical homeowner's insurance policy cover flooding? (pp. 425 -26)
No. Flood insurance is primarily provided under the National Flood Insurance Program (NFIP). Be sure to
notice when buyers of real estate might be required to purchase federal flood insurance. Also, be sure to
think about the "Problem" on p. 426: Can you think of at least 4 flood-risk related questions prudent
buyers should investigate?
(8) When a buyer receives a loan, the buyer typically gives the lender both
contractual and property assurances of repayment. Which assurance below
represents a property interest? (pp. 426 -427)
Mortgage.
The promissory note is the buyer's contractual commitment to repay the loan, whereas the mortgage
gives the lender a property interest as security for the buyer's obligation to repay the debt. Be sure to
notice that the mortgage is an encumbrance on the title. Do you think a mortgage is a freehold or
nonfreehold interest? Possessory or nonpossessory?
(9) Which theory of mortgages represents the majority position? (pp. 428 -29)
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The lien theory.
Why would this distinction matter in the context of the severance of a joint tenancy into a tenancy in
common? (Review problem #2, p. 285). This distinction might also affect the outcome of foreclosure
actions (although modern legislation has done much to minimize distinctions between the title theory
and the lien theory in this context).
(10) What are common reasons why buyers might prefer financing from a
conventional lender (such as a bank) rather than financing extended by the
owner/seller? (see p. 431 fn 8)
-Buyers may want to buy only if the judgment of a particular lender as to the property's value concurs
with their own
-Buyers may want to borrow only from a lender whose practices in the event of default are known to be
patient and reasonable
-Buyers might want to borrow only from a lender they know would not seek to penalize pre-payment
-All of the above
(11) In the context of foreclosure, compare the statutory right of redemption with the
equity of redemption. Which occurs earlier in the foreclosure process? (See pp.
435-37).
The equity of redemption.
(12) As considered in Harbour Portfolio (p. 443), what is " reverse redlining"?
Extending credit on unfair (and often risky) terms because of the plaintiff's race and geographic area
After the collapse of the housing market that led to the Great Recession of 2007-2009, there was a great
deal of discussion of "subprime loans" that were extended to vulnerable borrowers and that were
"doomed to failure" (p. 429). Harbour Portfolio addresses the related issue of loans with unfair terms
extended to vulnerable borrowers within classes protected by the Fair Housing Act, including race and
ethnicity. Together, these cases show the courts' willingness to carefully scrutinize mortgage practices
that hurt specific borrowers, and that also have broader ramifications for the national economy.
(13) What type of problem does Lohmeyer v. Bower address?
Whether certain title defects give buyers the right to rescind before closing.
Be sure to notice the purported difference between physical defects (as considered in Stambovsky) vs.
title defects (as considered by Lohmeyer). But in actual practice, the categories blur. In Lohmeyer, can
you make an argument that the existence or violation of zoning ordinances do not constitute title defects
at all? Courts are not in agreement on the distinction and on what types of defects render title
"unmarketable." See p. 452 (note 2). But in general, courts are more willing to hold that a broader range
of defects (including such zoning violations that do not directly impact title) render title unmarketable
during the early executory period of the contract, then after closing when the buyer is suing to enforce
deed warranties.
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(14) What is an encumbrance? (See p. 452, n. 1).
An interest in land not inconsistent with the passing of title
An encumbrance is "an interest in land . . . not inconsistent with the passing of title." You should
memorize this definition!
Notice that encumbrances are consistent (or often, "not inconsistent") with the passing of title.
Therefore, they represent the sharing of property. For example, A could hold the fee simple absolute to
real estate, and B could simultaneously hold a mortgage, leasehold, easement, right of first refusal,
restrictive covenant (chapter 10), or other such interest.
(15) If damages are awarded for breach of a title covenant, what is maximum
permissible damage aw ard? (See p. 454).
The purchase price paid to the grantor (and interest).
The deed covenants offer important protections to buyers against title defects, but the damages remedy
is generally limited to the sales price paid to the grantor (and interest) at the time of purchase. If the
property has gone up in value since the breach, the buyer is not compensated for that appreciation in
value. Notice that damages is the usual remedy for breach of the first five covenants, whereas specific
performance is the usual remedy for breach of the sixth covenant. Why do you think the remedies differ?
(16) In Brown v. Lober, was it possible that the Browns could own the surface estate
and another party owned all or part of the subsurface coal rights? (See p. 457 and
review the text box on p. 7).
Yes, because state law generally allows surface landowners to create a "split estate" by conveying
separately the subsurface estate, such as mineral rights.
Many a landowner has been surprised to learn she does not own the underground estate because a
predecessor split the estate! In Brown the court court stated that the plaintiffs "discovered" that they, in
fact, owned only a one-third interest in the subsurface coal rights. How can landowners avoid such an
unpleasant discovery? Conduct a thorough title search in the public records before purchasing property!
(17) If a buyer receives title insurance, she does not need to conduct a title search or
to seek warranties from the seller (as through a general warranty deed).
False.
Riordan (p. 462) illustrates that title insurance provides incomplete protection to buyers. Prudent buyers
should seek the full trio of title assurances available to them: (1) a title search of the public records
conducted by the buyer's attorney (or at least the buyer can request the results of the title company's
title search), (2) deed warranties from the seller, and (3) title insurance from a commercial title company.
Individually, none provides complete protection. But together, they work quite well to promote the
smooth functioning of our real estate market.
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Chapter 8 – The Recording System
A. The Chain of Title
Recording acts – statutes that resolve competing claims to the same property
Bona Fide Purchasers (BFPs) – purchasers who take title to property in good
faith/without notice of prior claims to the property
1. Searching the Chain of Title
Buyers can conduct a title search to verify the seller has a marketable title, not subject to
any undisclosed or unacceptable defects . Either an attorney will search the inde xes to
public records to find relevant documents, or the buyer can accept a title insurance
policy where a professional title service will search the indexes and compile an abstract
of title.
Abstract of Title (Title Plant) – summarizes the history of the property’s ownership & also
identifies claims against the property such as easements, mortgages, & liens
The bulk of public records affecting title are usually filed & indexed in the county clerk
and recorder’s office. However, if the title has been impacted by bankruptcy, probate,
divorce. Or other proceedings, the title searcher will have to check those records as well.
Two types of indexes: the grantor/grantee index & the tract index.
Marketable Title Acts – limits the period that the search must cover to a period of 30-40
years
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2. Matters Potentially “Outside” the Chain of Title
Bona Fide Purchasers – those who take title without notice of adverse claims
Four Main Ambiguous Situations: (1) late recording, (2) early recording, (3) the wild deed
problem, & (4) the common grantor problem.
Three Types of Notice: (1) actual, (2) record, and (3) inquiry .
First Properties, L.L.C. v. JPMorgan Chase Bank
 A deed outside the chain of title, even if recorded, does not give a purchaser
constructive notice of the interest claimed in the deed.
Witter v. Taggart
 A landowner is only bound by restrictions on his land if said restrictions are
included in his deed or the deed of a landowner in the same chain of title, unless
actual notice of a restriction exists.
B. The Recording Acts
1. Overview of the Recording Acts
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The common law default rule is “first in time, first in right” .
Race Jurisdictions:
(1) A prior unrecorded conveyance in Chain of Title #1, measured as of the moment B took her
property interest in Chain of Title #2.
(2) B qualifies as a purchaser – a party who paid value for the property.
o As opposed to donee – one who acquired property at no cost
(3) B records before A.
Notice Jurisdictions:
(1) A prior unrecorded conveyance in Chain of Tile #1, at the moment B took property interest in
Chain of Title #2.
(2) B qualifies as a purchaser.
(3) B is a bona fide purchaser.
Race-Notice Jurisdictions:
(1) A prior unrecorded conveyance in Chain of Title #1, at the moment B took property interest in
Chain of Title #2.
(2) B qualifies as a purchaser.
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(3) B qualifies as a bona fide purchaser.
(4) B records first.
Bona fide purchaser – one who takes in good faith – one who takes without notice of a prior competing
conveyance
MO has a notice statute.
2. Protecting the Bona Fide Purchaser
Waldorff Insurance & Bonding, Inc. v. Eglin National Bank
 If a purchaser of real property has actual or constructive notice of another's
equitable interest, then the purchaser's interest is inferior to the equitable
interest.
Daniels v. Anderson
 A bona fide purchaser who does not make full payment for the property at the
time of the sale may not ignore actual notice of preexisting obligations on the land
before the purchase price is fully paid.
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
Pro tanto rule – protects the buyer to the extent of the payments made prior to notice
⁎ Majority of jurisdictions
Methods for applying pro tanto protection:
o Award the land to the holder of the outstanding interest and award the buyer the
payments that he or she made
o Award the buyer a fractional interest in the land proportional to the amount paid
prior to notice
o Allow the buyer to complete the purchase, but to pay the remaining installments to
the holder of the outstanding interest
C. Beyond the Black Letter: Evaluating the Recording System
D. Skills Practice: Drafting Tenant Estoppel Statements
E. Chapter Review
(1) Aaron conveyed Blackacre to Bianca, who does not record. Aaron then executes a
deed to Carlos purporting to convey Blackacre to Carlos. Carlos had no notice of
the deed to Bianca and paid Aaron full value for the property. Bianca then records
her deed, after which Carlos records his deed. At the time Carlos received his
deed, Bianca was not in possession of Blackacre, but soon thereafter Carlos found
her in possession of Blackacre. The jurisdiction’s recording statute provides:
Every conveyance of real property shall be void as to subsequent purchasers and
incumbrancers who give value and take without notice, unless such conveya nce is
duly recorded before such subsequent purchase or incumbrance.
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Carlos sues to eject Bianca. Who will prevail?
a. Bianca will prevail because the jurisdiction has enacted a race statute.
b. Bianca will prevail because the jurisdiction has enacted a race -notice
statute.
c. Carlos will prevail because the jurisdiction has enacted a notice statute.
d. Bianca will prevail under the common law default rule.
The correct response is C. The jurisdiction has a notice statute (the phrase “unless such conveyance is
duly recorded” refers to a conveyance in COT #1 unrecorded at the time of a subsequent conveyance).
Under that statute, Carlos will prevail if the conveyance to Bianca was unrecorded at the time he
received his deed (Bianca’s later recording doesn’t count) and if he took without notice of Bianca’s prior
interest. The facts indicate that both requirements were satisfied. First, Bianca did not record until after
Carlos accepted his deed. Second, Carlos lacked notice of Bianca’s prior interest. Carlos lacked actual
notice (he “had no notice of the deed to Bianca”), record notice (Bianca’s deed was not recorded until
later), and inquiry notice (Bianca was not in possession so as to prompt further inquiry).
(2) Oma conveyed Blackacre to Aaron. The next day, Oma conveyed a de ed to
Blackacre to Bianca, who had no notice of the prior conveyance. Bianca promptly
recorded her deed. Later, Aaron recorded his deed. Then, Bianca gave a deed to
Blackacre to Carlos, who knew of the prior conveyance to Aaron. Carlos promptly
recorded his deed. In a lawsuit between Aaron and Carlos, who will prevail?
a. Carlos will prevail under the shelter rule.
b. Aaron will prevail if the jurisdiction has enacted a race statute.
c. Aaron will prevail if the jurisdiction has enacted a notice statute.
d. Aaron will prevail under the common law default rule.
The correct response is A. There is a prior unrecorded conveyance in COT #1 because Aaron’s deed was
unrecorded at the moment Bianca took title. Because Bianca took without notice and recorded first, her
title is superior to Aaron’s title under any type of recording act. Therefore, the shelter rule protects her
interest and allows her to pass good title to Carlos, even though Carlos took with notice of the prior
conveyance to Aaron, and Carlos recorded after Aaron. Any other result would penalize Bianca, who was
“rescued” under all three types of recording acts from the common law default rule that would otherwise
favor Aaron’s prior interest in the property.
(3) Oma conveyed Whiteacre to Aaron. The next day, Oma gave a deed to Whiteacre
to Bianca, who took without notice of the prior conveyance. Then, Aaron recorded
his deed, and subsequently gave a deed to the property to Carlos. Bianca then
recorded her deed. Next, Carlos recorded hi s deed. In a lawsuit between Bianca
and Carlos, who will prevail?
a. Carlos will prevail if the jurisdiction has enacted a notice statute.
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b. Bianca will prevail if the jurisdiction has enacted a notice statute.
c. Bianca will prevail if the jurisdiction has enacte d a race-notice statute.
d. Bianca will prevail if the jurisdiction has enacted a race statute.
The correct response is A. In a notice jurisdiction, Bianca’s title is superior to that of Aaron’s because she
took title without notice of Aaron’s prior interest (he did not record until later). However, because Bianca
did not promptly record her title, she failed to give notice to subsequent purchasers such as Carlos. At the
time he took title, Carlos had no notice of the prior conveyance to Bianca (because she did not record
until later). Therefore, Carlos’ interest is superior to Bianca’s interest.
(4) Oma conveyed her property to Aaron who did not record. Oma then conveyed her
property to Bianca, who took without notice of the conveyance to Aaron, paid
value, and recorded. Bianca then conveyed a deed to the property to Carlos, who
knew of the prior conveyance to Aaron, did not pay value, and did not record.
Does Aaron or Carlos have better title under each of the three types of recording
acts?
Under any type of recording act, Bianca holds better title than Aaron because she took without notice of
Aaron’s prior interest and recorded first. Therefore, under the shelter rule, Bianca can pass good title to
Carlos, even though he was not a BFP (he did not pay value and he took with notice of the prior
conveyance to Aaron) and he did not record.
(5) Oma conveyed her property to Aaron who did not record. Oma then conveyed a
deed to the same property to Bianca who paid value. One week after the
conveyance, Oma told Bianca about the prior transfer to Aaron. Bianca
immediately ran to the recorder’s office and properly recorded her deed. Does
Aaron or Bianca have better title under each of the three types of recording acts?
Bianca prevails under any type of recording act. At the moment Bianca took title, she was a BFP (she had
not yet received notice of the prior conveyance to Aaron and she paid value). She also won the race to
the courthouse and recorded first.
F. Chapter Quiz
(1) conveys to A, who does not record his deed. Then, A co nveys to B, who promptly
records her deed. Does B's deed provide constructive notice to subsequent
purchasers from O? (See page 485, figure 5).
No, because B has a "wild deed."
Under the wild deed rule, a deed is not considered "recorded" and does not give notice unless every prior
deed in the chain of title has been properly recorded. Study Figure 5 on p. 485. Do you see why the
purported recording of B's deed would not give notice to C that O previously conveyed the same property
to someone else (here, A)?
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(2) In First Properties, Ruthia Dumas lost the title to her home at a foreclosure sale.
Which statement below is most accurate about that sale and related events?
The Fire District purchased the property at the sale for $603.
The Fire District took title to Ms. Dumas's home for only $603! Is that a price low enough to "shock the
conscience" of a reviewing court? The court was not presented with that issue, but effectively invalidated
the foreclosure sale through another mechanism. What was the legal basis of the court's holding?
(3) In Witter v. Taggart, were the Taggarts bound by the restriction against docks that
the common grantor inserted into the Witter's chain of title?
No, because a restriction inserted by the common grantor into one deed does not provide notice to other
neighbors who purchased from the same common grantor.
Courts are fairly evenly split on this "common grantor" problem. If the court had applied the "no dock"
restriction to the Taggarts, what sort of title search would be required for the Taggarts to uncover the
restriction? Do you think the court reached the correct result?
(4) Under a race recording statute, which factor(s) resolves competing claims to t he
same property?
Recording one's claim.
What policies are served by rewarding the party that records first?
(5) Under a notice recording statute, which factor(s) resolves competing claims to the
same property?
Taking title as a BFP.
What policies are served by rewarding those who take title as bona fide purchasers?
(6) Under a race-notice recording statute, which factor(s) resolves competing claims
to the same property?
-Recording one's claim
-Taking title as a BFP
-Both of the above
(7) Carefully review the sample recording act language on pp. 496 -498. Take your
time and do a thorough job! Then, determine what type of recording act the
following language creates. Be sure to distinguish between language that
describes chain of title (COT) #1 and a potential PUC, and language that describes
the requirements the claimant in COT #2 must satisfy (record first? qualify as a
BFP? both?) in order to overcome the common law default rule:
"Every grant of an estate in real property is conclusive against the grantor, also
against everyone subsequently claiming under him, except a purchaser or
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encumbrancer who in good faith and for a valuable consideration acquires a title
or lien by an instrument that is first duly recorded."
What type of recording act does this language crea te?
A race-notice statute.
This is from the California Civil Code, section 1107.
Notice language relating to COT#1: "Every grant . . . is conclusive . . . against everyone subsequently
claiming under under [the grantor] except . . ."
Notice language relating to COT#2 describing the circumstances under which the statute "rescues" a
later grantee: "a purchaser who in good faith and for a valuable consideration . . . first duly record[s] [her
instrument]." Also notice there is no need to describe the first grant as unrecorded because if grantee #2
records first, then grantee #1 necessarily was unrecorded at the time grantee #2 "took" title.
(8) What type of recording act does the following statutory language create?
"No conveyance of land, contract to conve y, or lease of land for more than three
years shall be valid to pass any property interest as against lien creditors or
purchasers for a valuable consideration from the donor, bargainer, or lessor but
from the time of recording thereof in the county where the land lies. . . . Unless
otherwise stated either on the recorded instrument or on a separate recorded
instrument duly executed by the party whose priority interest is adversely
affected, instruments recorded in the officer of the register of deeds shall have
priority based on the order of recording as determined by the time of recording."
A race statute.
This is from N. Carolina General Statutes section 47-18. North Carolina and Louisiana are the few
(perhaps only) states that have a race recording act. Which type of statute do you think is best? Why?
(9) What type of recording act does the following statutory language create?
"No conveyance of land shall be effective against subsequent purchasers for a
valuable consideration and without notice, unless the same be recorded according
to law."
A notice statute.
This is Florida's recording act (somewhat condensed). Notice that the final phrase ""unless the same be
recorded" modifies the description of the prior conveyance in COT #1. In other words, if we move that
phrase earlier in the statute, the result is perhaps clearer: "No conveyance of land shall be effective
unless the same be recorded against subsequent purchasers for a valuable consideration and without
notice."
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Chapter 9 – Contractual Limits & Beyond: Easements
A. Overview
Easements – nonpossessory interests in the land of another (a property right)
B. Creation
Express: In writing & subject to statute of frauds.
Implied: Implied from prior use or from necessity.
Prescriptive easements: Through prescription, a doctrine similar to adverse possession.
The related doctrine of custom can give rise to a public right of use that is similar to an
easement.
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Easements by estoppel/ irrevocable licenses: License agreements accompanied by certain
types of conduct can give rise to easements (or their functional equivalent).
1. Express Easements
Estate of Thomson v. Wade
 A provision in a deed purporting to create a property interest in favor of a third
party who is a stranger to the deed does not crea te a valid interest for the third
party.
2. Implied Easements
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`
Traders, Inc. v. Bartholomew
 If commonly owned land is severed, leaving one of severed parcels without access
to a public road, the grantee of the landlocked parcel is entitled to an easement
by necessity over the remaining lands of the common grantor or the common
grantor’s successor in title.
3. Easements by Prescription
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Daytona Beach v. Tona-Roma, Inc.
 To obtain an easement by prescription, the use of the land must be inconsistent
with the landowner’s use and enjoyment of his land.
4. Easements by Estoppel
C. Scope, Transferability, and Termination
1. The Scope of Easements
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Brown v. Voss
 An easement appurtenant to an estate may not be extended to other adjoining
estates.
Facts: In 1952, the then-owners of Parcel A granted the then -owners of Parcel B a private
road easement which was to be used for ingress and egress to and from Parcel B through
Parcel A. Voss (defendant) acquired Parcel A in 1973, and Brown (plaintiff) acquired
Parcels B and C in 1977, at different times and from different owners. The previous
owners of Parcel C had nothing to do with the easement relating to Parcel B. Brown
desired to build a house on his land straddling Parcels B and C and began preparations for
this endeavor in November 1977. In April 1979, after Brown had spent almost $11,000
preparing to build the house, Voss placed a fence, logs, and a concrete sump on the
easement land in order to prevent Brown from further using it. Brown sued to have the
obstructions removed. Voss countersued to prevent Brown from using the easement for
access to anything other than Parcel B. The trial court found (1) that there was no
significant increase in the traffic along the easement as a result of Brown’s acquisition of
Parcel C, (2) that Parcel C would be landlocked if access to it through the easement on
Parcel A were prohibited, which would hamper Brown’s enjoyment of his land, and (3)
that any order prohibiting Brown from using the easement to get to Parcel C woul d be
impractical and unenforceable. The court ruled in favor of Brown and ordered that he be
permitted to use the easement to access Parcels B and C. The Court of Appeals reversed,
and Brown appealed to the Supreme Court of Washington.
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2. The Transferability of Easements
Problem 1: From telephone lines to cable television: Detroit Edison, an electric utility,
installed and maintained telephone poles and wires across Peter and Henrietta Heydon’s
property without their permission. At least 15 years later, Detroit Edison entered into an
agreement with MediaOne allowing it to place and maintain cable television lines on the
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same utility poles that continued to support Detroit Edison’s telephone lines. The
Heydons sued Media One to enjoin it from installing cable lines across their property.
What are the relevant issues? Be specific. How should the court resolve the dispute? See
Heydon v. MediaOne, 739 N.W.2d 373 (Mich. Ct. App. 2007).
Easement, Affirmative, In Gross, Commercial, Divisible
Heydon v. MediaOne
 A commercial, exclusive, prescriptive easement in gross can be apportioned so
long as the apportionment does not unreasonably increase the burden on the
servient estate.
Problem 2: Too many swimmers? The Pocono Spring Water Ice Company owned lands on
which a dam had been built, thereby creating artificial Lake Naomi. By express deed, the
Company granted, “To Frank C. Miller, his heirs and assigns forever, the exclusive right to
fish, boat, and swim on Lake Naomi.” One year later, Frank granted to his brother, Rufus,
by express deed, “To Rufus W. Miller, his heirs and assigns forever, [a] 1/4; interest in
and to the fishing, boating, and bathing rights and privileges at, in, upon, and about Lake
Naomi, which rights and privileges were granted an d conveyed to me by the Pocono
Spring Water Ice Company.” Thereafter, the brothers formed a partnership, and together
operated a summer church camp on the lake. Rufus died many years later, terminating
the brothers’ partnership. The executors of Rufus’ est ate planned to grant a license to a
different church, allowing its 2,000 members to fish, boat, and swim in and around the
lake. Fearing overcrowding and overuse of the lake, the Pocono Spring Water Ice
Company brought suit against Rufus’ executors, claimi ng that (a) the boating, bathing,
and fishing privileges were not assignable by Frank C. Miller to Rufus W. Miller, and (b)
even if the easement rights had been assignable, they were not divisible because this
might subject the servient tenement to a great er burden than originally contemplated.
Drawing upon what you have learned about easements in this chapter, how should the
court decide each of these issues? See Miller v. Lutheran Conference & Camp Association,
200 A. 646 (Pa. 1938) (hypothetical facts mo dified slightly).
In Gross, Not Commercial, Not Assignable, Divisible
Miller v. Lutheran Conference & Camp Association
 Easements in gross are not divisible without the consent of all parties holding an
interest.
3. The Termination of Easements
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Problem 1: A gas line beneath the garage: Defendants purchased their lot in 1962.
Pursuant to a valid express easement appurtenant granted to them by the Smiths, their
neighbors to the east and the plaintiffs’ predecessor in interest, the defendants ran the
gas line servicing their residence east beneath the Smiths’ lot and connected it with a
meter located at the eastern border of the Smiths’ lot. The defendants and the Smiths
each retained a copy of the easement agreement for their personal records. The line is
underground and no part of it is visible. Three gas meters are located on the boundary
between the Smiths’ lot and the property to the east: one of the meters services the
Smiths, one services the defendants, and one services the Smiths’ neighbor to the eas t. In
1980, the plaintiffs purchased the Smith property. Two years later, the plaintiffs
inadvertently discovered the gas line as they were rebuilding their garage. You represent
the plaintiffs, who sued to quiet title to their property and to require the defendants to
remove the gas line from beneath their property. What arguments should you make on
behalf of your client? What arguments do you anticipate that the defendants will make?
As an alternative to litigation, can you counsel your clients as to othe r approaches that
might achieve a satisfactory resolution of their concerns? See generally Childress v.
Richardson, 670 S.W.2d 475 (Ark. Ct. App. 1984).
Inquiry notice - Whether it was reasonable to inquire whether the other gas meters went to their
neighbors’ homes & if they went underneath their own home
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D. Conservation Easements
A person can sell or donate the right to develop the property to a nonprofit organization
(aka “land trust”) or a unit of govt. equipped to hold the conservation easement and
monitor its enforcement.

Can gain tax benefits: (1) income tax - one time, (2) estate tax – one time, (3) property tax –
every year
Conservation easements – a nonpossessory interest of a holder in real property imposing
limitations or affirmative obligatio ns




retaining or protecting natural, scenic, or open-space values of real property
assuring its availability for agricultural, forest, recreational, or open-space use
protecting natural resources; maintaining or enhancing air or water quality
preserving the historical, architectural, archaeological, or cultural aspects
U.S. v. Blackman
 The conveyance of a negative easement in gross for the purpose of land
conservation and historic preservation is valid.
E. Beyond the Black Letter: Conservation Easements – What’s in a Name?
F. Skills Practice: Drafting an Easement
G. Chapter Review
(1) The buried utility cable: Laura owns a large parcel of land. She has constructed her
home on the eastern portion of the property, and has run a private utility cable
underground that connects with the City’s utility poles at the western edge of the
property. Later, Laura divides her property in two and sells the western half to
Van. Van discovers the utility cable buried beneath his pro perty, disconnects it,
and digs up the portion that is buried beneath his land. Laura, who is now without
electricity, sues Van to enjoin him from interfering with her utility cable. What is
the most likely result of the lawsuit?
a. Laura will prevail if she can show that the existence of the underground
cable should have been apparent to Van, and that the continued use of
the underground cable beneath Van’s land is reasonably necessary to
Laura’s use and enjoyment of her property.
b. Van will prevail because he destroyed Laura’s unity of title when he
purchased the western tract from her.
c. Van will prevail because Laura is claiming an easement by reservation,
rather than by grant.
d. Laura will prevail because her property is “landlocked.”
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The buried utility cable: The correct response is A. Laura has an easement implied from prior use. The
requirements include proof of unity of title during the time of prior use and prior use (apparent,
continuous, and necessary). Response C is incorrect. Although courts will closely scrutinize claimed
reservations, there is sufficient evidence here to prove Laura’s implied easement. Response D is incorrect.
Although she might also be able to prove an easement implied from necessity, we would need more
evidence as to whether she has strict necessity (the mere fact that her parcel is landlocked does not
necessarily mean that there is no other path for an underground utility cable to follow).
(2) Driving through the neighbor’s property: Amy and Brian are neighbors. For many
years, Amy has allowed Brian to use a road on the south end of her property in
order to reach the main road. Amy sells her property to Anita through a valid deed
stating that the conveyance was “subject to an easement for the benefit of my
neighbor Brian to reach the mai n road from his property.” What interest, if any,
does Brian have in Anita’s property?
a. Brian has an easement by prescription, provided that he has used the road
for the required statutory time period.
b. Brian’s easement across Amy’s property terminated when she sold it to
Anita.
c. Brian has an express easement across Anita’s property.
d. Brian has no easement across Anita’s property if the jurisdiction follows
the common law “stranger to the deed” rule.
Driving through the neighbor’s property: The correct response is D. If the jurisdiction follows the
“stranger to the deed” rule, then it will not recognize easements reserved in favor of third parties such as
Brian. Brian has not acquired an easement by prescription (response A) because he used the road with
the permission of Amy and therefore his use was not hostile. Although Brian’s easement might have
terminated upon sale (response B), it would continue in jurisdictions that allow third-party easements in
strangers. Although Brian may have an express easement across Anita’s property (response C), he will
have nothing if the jurisdiction follows the old common law “stranger to the deed” rule.
(3) A lakefront resort: Sam owns Wild Lake, and by written instrument has granted
Breta “the exclusive right to develop the lak e as a commercial resort.” Through a
proper written instrument, Breta thereafter grants to Susan and “her heirs and
assigns forever, a one-fourth interest in the exclusive right to develop the lake as
a commercial resort.” What interest, if any, does Susan hold in Wild Lake?
a. Susan has no valid interest in Wild Lake because the covenant does not
“touch and concern” Wild Lake.
b. Susan has a valid one-fourth interest in Breta’s resort, provided that the
assignment to Susan does not increase the burden on the ser vient estate
beyond that originally intended by Sam.
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c. Susan has no valid interest in Breta’s resort because commercial easements
in gross cannot be assigned or transferred to others.
d. Susan has no valid interest in Breta’s resort because commercial easements
appurtenant cannot be assigned or transferred to others.
A lakefront resort: The correct response is B. Most courts today hold that commercial easements in gross
are both divisible and transferable (including assignments), provided that the burden is not increased.
Easements are not required to “touch and concern” land (as suggested by response A).
(4) A change of plans: Charlotte owns Lot 1, which is bordered on the south by a
major roadway. Her neighbor Steve owns Lot 2, which is directly north of Lot 1.
Steve also owns Lot 3, which is directly north of Lot 2. Steve planned to build a
home on Lot 2, and through a valid written conveyance Charlotte had granted
Steve an easement across Lot 1 “for ingress to and egress from Lot 2.” Steve,
however, changed his mind and constructed his home on Lot 3. He regularly used
the easement through Lot 1 in order to r each his new home on Lot 3. The
neighbors’ relationship deteriorated over time, and Charlotte erected a fence
across the easement path that blocked Steve’s ability to reach her land and the
road beyond. Steve sued for removal of the fence and an injunction against
Charlotte’s interference with the use of the easement. What is the most likely
result?
a. Steve will prevail because it was reasonably foreseeable that he might build
a home on Lot 3.
b. Steve will prevail because he has an express easement created by a valid
written conveyance.
c. Charlotte will prevail because Steve is seeking to unreasonably expand the
burden on Lot 1.
d. Charlotte will prevail because Lot 3 is not the dominant estate.
A change of plans: The correct response is D. Under the majority rule, an easement appurtenant must be
used only for the benefit of the dominant parcel (here, Steve’s Lot 2). As long as the easement is used for
the benefit of Lot 2, however, the burden may expand to allow for reasonable, foreseeable expansion of
the uses on Lot 2. Answer C is incorrect. The common law rigidly insists on confining the benefit to the
dominant parcel, even if there is no increased burden on the servient tract (here, Charlotte’s Lot 1).
H. Chapter Quiz
(1) What types of uses can be prohibited under common law negative easements?
Mark all appropriate responses below. (See casebook p. 517).
-Light blockage
-Air blockage
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-Stream flow (artifcial) interference
-Support for buildings removed
You should memorize the four types of negative easements permitted by the common law. As we will see
in the next chapter, if a negative restriction does not fit into one of these four categories, we will classify
it as a negative covenant, rather than a negative easement--with important legal consequences.
(2) In general, does the holder of an easement have a right to exclude the owner of
the servient estate? (See pp. 517 -18.)
No. Easements are the right to use the land of another. By definition, they are a type of property right
("nonpossessory") that is shared with the true owner, and not exclusive of the true owner's use.
Easement holders might also have to share their use with others, unless the landowner granted an
exclusive easement to only one easement holder.
(3) Sam, owner of Blackacre, sold the property to Betta, but reserved an easement for
the benefit of neighbor Eva to allow her to continue to cross Blackacre to reach
the main road. Would Eva's easement be valid under the common law?
No. This is the classic stranger to the deed problem. The parties to the deed are Sam (seller) and Bretta
(buyer). Because Eva is simply a neighbor, she is a "stranger" to the deed. Under the common law, sellers
cannot reserve easements in favor of such third-party strangers. What would the common law follow
such a rule? Hint: How could a future purchaser of Blackacre determine that it was encumbered by an
easement in favor of Eva?
(4) How do the elements of an easement implied from prior use differ from those of
an easement implied from necessity?
The easement implied from prior use requires a showing of reasonable necessity, whereas the easement
implied from necessity generally requires a showing of strict necessity.
(5) Which element of adverse possession is not requi red to establish an easement by
prescription?
Exclusive use. Why would a showing of exclusivity not be required to establish a prescriptive easement?
Hint: What is the definition of an easement, and what role does it envision for the owners of the
dominant and servient estate, respectively?
(6) Review "the old haul road" problem on p. 539, note 1. Could the Taylors make a
strong claim that they had acquired an easement implied from prior use?
No, because there was not unity of title.
(7) Review "the old haul road" problem on p. 539, note 1. Could the Taylors make a
strong claim that they had acquired a prescriptive easement?
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No, because their use was not hostile.
Here, the facts state that the Taylors used the road with the "verbal permission" of their adjacent
neighbors, the Holbrooks. At that time, the use was not hostile. It was only after considerable time (and
the construction of a residence), that the use became "hostile" (without permission). A lawsuit was filed
shortly thereafter, suggesting their was likely not a long enough period of hostility to satisfy the statute
of limitations for an easement by prescription.
(8) Review Brown v. Voss. Does the common law allow the holder of an easement to
use it on land other than the dominant tract, as long as no measur able harm would
result?
No. The common law (and even many modern courts) does not permit the expansion of an easement to
benefit non-dominant land, even if no harm would result. Notice the holding in Brown v. Voss: Did the
court enforce that common law rule? If so, what does the measure of damages tell you about the
strength of the common law rule?
(9) Review Traders, Inc. v. Bartholomew (p. 526). There, the court held that the
plaintiff had acquired an easement implied from necessity across Lots #1 and Lot
#2, for the benefit of Lot #4. If you represented the plaintiff, would you have
argued also (or alternatively) that the plaintiff had acquired an easement implied
from necessity across Lot #3?
No, because there had not been unity of title at the time the necessity arose.
(10) In which case would the majority rule prohibit an easement holder from
transferring the benefit to another?
If the easement is a non-commercial easement in gross.
Most courts restrict the transferability of easements in gross, unless they are commercial. The general
rationale is that easements in gross are inherently personal to the original parties, at least if the
easement is for non-commercial purposes (although many modern commentators doubt the logic of that
rationale). In what context have we previously seen a court take such a position? In Thomson v. Wade,
the court stated, "inasmuch as the right-of-way reserved to Noble personally was not shown to be
commercial in nature, the Appellate Division correctly determined that it could not be transferred to
plaintiff . . . " (last paragraph of opinion).
(11) Carefully review the three elements necessary to prove an easement by estoppel
(text box, p. 539). Which other doctrine has elements that most closely resemble
those of an easement by estoppel?
The equitable estoppel exception to the statute of frauds (see p. 406).
Notice the almost identical elements necessary to prove the enforceability of an oral contract for the sale
of real property (under the equitable estoppel exception) and to prove the irrevocability of a license
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(which is often oral). What does the plaintiff stand to gain under these theories? Either the plaintiff gains
a possessory property right (often, a FSA under a real estate contract) or a nonpossessory property right
(an easement).
(12) Modern statutes generally support the creation of conservation easeme nts. What
common law obstacles must the modern statutes overcome? (read carefully pp.
554-55). Choose all relevant responses.
The common law disfavored negative easements.
The common law disfavored easements in gross.
Notice the paragraph directly preceding United States v. Blackman (p. 555): "Recall that the common law
disfavored both negative easements and easements in gross--both of which describe conservation
easements. Absent statutory intervention, then, conservation easements likely would not have been
enforceable at common law." Why are conservation easements negative (what land uses do they
"veto")?
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Chapter 10 – Contractual Limits & Beyond: Running Covenants
Covenant – a contract or agreement
Running Covenant – agreements that affect land, where the original promising parties
intend to bind their successors



Can be recorded in country records
Condemnation by eminent domain requires compensation
Nonpossessory in nature
Two forms of covenants – real covenants & equitable servitudes.
A. Traditional Doctrine: Real Covenants & Equitable Servitudes
Promisor (or Covenanter) – the original party making the promise & bearing its burden
Promisee (or Covenantee) – the original party receiving the benefit of the promise
Real Covenant – A promise to do or not to do something related to land (i.e. runs with
the land) and is enforceable at law.


Not a grant of a property interest
Negative or affirmative
Affirmative Promise – the promisor’s agreement to perform a specified act or undertake
a specified duty
Negative Promise – requires the promisor to refrain from acting in an otherwise lawful
manner
Equitable Servitudes – a promise that equity will enforce against successors.

Accompanied by injunctive relief
1. Real Covenants
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2. Equitable Servitudes
Seeking Injunction:

Must be in writing, but can be implied (unlike RC)
Requirements:
(1) Intent the covenant run w/ the land
(2) Notice to the Transferee
(3) Touch & Concern
a. HP not required, VP not required for Burden to Run
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Tulk v. Moxhay
 Tulk sells the property, a square, with a covenant not to make any changes to the
square. Moxhay buys the land and argues that the restrictions are not
enforceable, and he is not subject to them. Under the doctrine of enforceable at
law, he would be correct because there was no privity of estate. However, in
enforceable in equity, the buyer had voluntarily and consented to the covenant.
Because it would affect the property value, it would be enforceable.
 One who purchases property with knowledge of restrict ive covenants burdening
the land must honor the covenant. Selling the land does not reverse the
restriction.
 To be enforceable in equity there must be (1) intent that the covenant run with
the land (whoever owns the property is subject to the same covenant); (2) the
subsequent purchaser has actual or constructive notice of the covenant; and (3)
the covenant touch & concern the land.
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Neponsit Property Owners’ Ass’n, Inc. v. Emigrant Industrial Sav. Bank
 (1) A covenant contained in a deed requiring the payment of money “touches and
concerns” the land if it substantially affects the rights of the parties as
landowners.
 (2) Privity of estate will exist in substance if not in form between property owners
and an owners’ association when the association is acting as a medium through
which enjoyment of a common right is preserved.
B. Termination & Nonenforcement of Covenants
Running covenants are real property rights (of the nonpossessory variety), but they can
be deemed unenforceable, or even terminated, over the objection of some or all of their
holders.


Vulnerability reflects their hybrid contract-property status (courts will refuse to enforce
covenants – like contracts – if they are in violation of public policy).
Vulnerability illustrates property as web of interests because the benefits & burdens of
covenants extend beyond the original parties (courts look past original parties’
intentions to determine validity of covenants).
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Shelley v. Kraemer
 State court enforcement of a racially restrictive covenant constitutes state action
that violates the Equal Protection Clause of the Fourteenth Amendment.
Facts: In 1911, thirty property owners on a street in St. Louis, Missouri signed and
recorded a restrictive covenant, which provided that no races other than Caucasians
were welcome as tenants on the property for the next fifty years. In 1945, the
Shelleys (defendants), a black family, bought a house on one of the restricted parcels
of land without knowledge of the restrictive covenant. The Kraemers and other white
property owners (plaintiffs) in the subdivision brought suit in circuit court to enforce
the covenant, seeking to enjoin the Shelleys from taking possession and divest them
of title to the property. The circuit court denied relief to the plaintiffs on the ground
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that the restrictive covenant was incomplete, because not all property owners in the
subdivision had signed.
Reasoning:

Equal Protection Clause guarantees equal treatment of all people under the law,
including in their exercise of various property rights.

Racially restrictive covenants created by state or local law are unquestionably
invalid, even if the restrictive covenants are entered into by private parties,
because the court decisions become state law.

Actions of state courts and judicial officers are state actions within the meaning of
the 14 th Amendment & improper state action occurs when a court enforces a
substantive rule that violates individual rights under the 14 t h Amendment.

States may not “make available... the full coercive power of government” to allow
private individuals to deny rights based on race , & courts give effect to
discriminatory provisions on the basis of state common law.
Vernon Township Volunteer Fire Dept, Inc. v. Connor
 A restrictive covenant is not invalidated by non -conforming activity that takes
place outside the restricted tract.
Facts: The Vernon Township Volunteer Fire D epartment, Inc. (Fire Department) (plaintiff)
purchased a parcel of land within the Cuthbert Subdivision for the purpose of building a
social hall that would sell alcohol to its patrons. After beginning construction, the Fire
Department learned of a restrictive covenant barring the sale of alcohol within the
subdivision. The Fire Department sought releases of the restrictive covenant from the
owners of the 77 parcels in the subdivision. The owners of 68 parcels signed releases. The
owners of three parcels neither signed releases nor sought to enforce the covenant.
William E. Connor and others (defendants), who owned the remaining six parcels, refused
to sign releases. The Fire Department sued to quiet title and for declaratory judgment
that the restrictive covenant was obsolete and invalidated because of changed conditions
in the immediate neighborhood. Specifically, the Fire Department argued there were now
establishments selling alcohol in within two miles of the subdivision, though not within
the subdivision itself. The trial court held the restrictive covenant valid and enforceable.
The superior court reversed the trial court’s judgment on the grounds of changed
conditions in the immediate neighborhood. The superior court further noted that 68 of
the 77 parcel owners, and all of the property owners who testified, said they had not
relied upon the alcohol restriction when purchasing the property. The defendants
appealed to the Supreme Court of Pennsylvania.
Reasoning:
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
Restrictive covenants may be discharged if the original purpose of the covenant
has been destroyed or materially altered by changed conditions, & there is no
longer a substantial benefit from the covenant’s enforcement.

Changed conditions may be demonstrated by establishing acquiescence in the
breach of the covenant, abandonment of the covenant, or changes in the
character of the immediate neighborhood.

If not discharged, a restrictive covenant will be enforced, but strictly construed,
because it interferes with the free use and enjoyment of prop erty.

A restrictive covenant may provide a substantial benefit for the residents of the
restricted tract despite the occurrence of the restricted activity outside the tract.

Furthermore, even if the residents did not rely on the covenant when purchasing
their homes, they may still benefit from the covenant.
C. Modern Applications: Common Interest Communities & Conservation
Easements
1. Common Interest Communities
Common Interest Community – type of housing development in which all owners share
common land & facilities, but privately own their individual home or unit
Homeowners Association – governs CIC through its elected representatives


Created though a recorded “declaration” or “master deed” with an initial set of rules –
generally known as covenants, conditions, and restrictions.
Can levy assessments & regulate things like pet ownership, parking, exterior building
colors, & roofing.
Homeowners can amend declaration & it’s CC&R’s by a super -majority vote or can enact
additional rules by majority vote. Original & amended declarations generally take the
form of equitable servitudes that run with the land to bind future homeowners in the
community.
[606-609]
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Facial Challenge – one that alleges that the challenged rule or statute is invalid under all
possible circumstances


seeks the remedy of invalidating the rule itself, once and for all
more difficult, but the remedy is broader
As-Applied Challenge – alleges that the offending rule is invalid as applied to the facts of
the P’S case

results in injunction prohibiting enforcement of the rule against the P, but leaves the rule intact
to be applied in other circumstances
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Nahrstedt v. Lakeside Village Condominium Association
 California law provides that common interest development use restrictions are
enforceable unless unreasonable , unconstitutional, or against public policy.
 A restriction in a condominium complex’s rules which prohibits dogs or cats is
unreasonable.
Facts: Nahrstedt (plaintiff) purchased a unit in the Lakeside Village Condominiums and
moved in with her three cats. When the condominium association (defendant) (the
Association) learned of the cats, it demanded their removal. Nahrstedt sued the
Association, arguing that the restriction was unreasonable as applied to her cats,
which were kept indoors and not free to roam any common areas.
Reasoning:

Deference is appropriate because condo owners are entitled to know that the
restrictions on use in place at the time they purchased their units would be
enforced.

Encourages the development of c ommon interest developments which are
generally cheaper than single -dwelling buildings & which attract buyers looking for
stable, planned environments.

Discourages lawsuits & promotes stability & predictability.
2. Conservation Easements Revisited
(1) Easement, servitude, or something else? As you saw in the previous chapter, many
state statutes and the Uniform Conservation Easement Act refer to such
conservation arrangements as “easements.” Alternatively, the Restatement (Third)
of Property, Servitudes refers t o them as “servitudes.” See id. at §§1.6, 4.3(4), and
7.11. How would you label such conservation agreements?
(2) Practical consequences: From a practical perspective, does it matter whether
conservation agreements are classified as easements, covenants, or so mething
else? Among other things, consider potential differences of creation and
termination.
D. The Restatement (Third) of Property, Servitudes
E. Beyond the Black Letter: Forever is a Long Time
(1) The present vs. the future: In general, do you favor expansive rig hts for the
current owners of property, or do you think that current owners should have only
a limited ability to bind future owners? Is your answer the same in the context of
estates and future interests, easements, running covenants, conservation p.
622easements, and common interest community restrictions? If not, can you
articulate a principled distinction to justify your response?
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(2) The role of the courts: Should the courts be willing to terminate (or enjoin
enforcement of) easements and covenants, or sho uld they be reluctant to do so?
Who should bear the burden of proof —the party favoring termination or the party
opposing it? When circumstances make it impossible, impracticable, or illegal to
implement the original terms of an easement or covenant, should courts exercise a
power analogous to cy pres to remake the agreement to carry out the intention of
the drafters as near as possible, rather than terminate the servitude altogether
(recall our discussion of cy pres from Chapter 3)?
F. Skills Practice: Policy-Based Arguments
G. Chapter Review
(1) Good fences make good neighbors: Abu promised his neighbor Martha, on behalf
of himself and “his heirs and assigns,” that he would keep his fence in good repair.
What type of legal interest have the parties cre ated, if any?
a.
b.
c.
d.
Abu’s promise creates an easement appurtenant.
Abu’s promise creates a negative easement.
Abu’s promise creates an affirmative covenant.
Abu’s promise creates an easement by estoppel.
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Good fences make good neighbors: Abu’s promise creates an affirmative
covenant (response C). It is affirmative because he promised to perform a
specific act (maintain his fence), and it is a covenant (rather than an
easement) because it promises to perform an act and does not grant him
the right to use the land of another (as would an easement).
(2) The deteriorating fence: Abu made a promise to his neighbor Martha, on behalf of
himself and “his heirs and assigns,” that he would keep his fence in good repair.
Subsequently, Martha sold her property to Mia, and Abu allowed his fence to
deteriorate. Can Mia sue Abu for money damages caused by his failure to maintain
the fence?
a.
b.
c.
d.
Yes, if Abu’s original promise was enforceable.
Yes, because Martha’s easement was transferred to Mia.
No, because there was no horizontal priv ity between Abu and Martha.
No, because there was no vertical privity between Martha and Mia.
The deteriorating fence: The correct response is C. Because Mia seeks money
damages, the agreement must satisfy the requirements of real covenants
running at law. Here, there is no horizontal privity of estate between the
original promising parties (Abu and Martha). They were simply neighbors, and
there is no evidence that they were in a p. 799landlord -tenant relationship,
shared simultaneous privity, or successiv e privity. Although the Restatement
(Third) of Property, Servitudes, calls for an abandonment of the horizontal
privity requirement, there is no evidence that this jurisdiction has adopted the
minority Restatement approach.
(3) Fix that fence! Abu made a promise to his neighbor Martha, on behalf of himself
and “his heirs and assigns,” that he would keep his fence in good repair.
Subsequently, Martha sold her property to Mia, and Abu allowed his fence to
deteriorate. Can Mia sue Abu for injunctive relief to require him to maintain the
fence?
a.
b.
c.
d.
Yes, if Abu’s original promise was enforceable.
Yes, because Martha’s easement was transferred to Mia.
No, because there was no horizontal privity between Abu and Martha.
No, because there was no vertical privity between Martha and Mia.
Fix that fence! In this case, the problem must be analyzed as an equitable servitude because
Mia is seeking injunctive relief. The correct response is A. If the promise is enforceable under
the statute of frauds (we don’t know if it was written and properly executed), then Mia
should be able to obtain an injunction against Abu. Response B is incorrect because this is an
affirmative covenant, not an easement. In equity, no horizontal privity is required, so
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response C is incorrect. Likewise, equity does not require vertical privity between the original
covenantee (Martha) and successors (Mia), so response D is incorrect.
(4) No fences make good neighbors? Zelda promised her neighbor Lucas that she
would never erect a fence between their two pro perties. Which statement is most
accurate?
a.
b.
c.
d.
Zelda’s promise has created a negative covenant.
Zelda’s promise has created an easement appurtenant.
Zelda’s promise has created a negative easement.
Zelda’s promise has created an affirmative covenant.
No fences make good neighbors? Zelda’s negative promise (to never erect a fence) created
either a negative easement or a negative covenant. Because the promise does not fit easily
into one of the four negative easement categories recognized at common law (involving
light, air, artificial stream flow, and building support), the promise is a negative covenant
(response A).
(5) The buried wetland: Sophia owns two adjacent tracts of land. Tract #1 is mainly
covered with wetlands. Sophia sold Tract #2 to Mason, in a d eed that promised on
behalf of Sophia, “her heirs, and assigns,” that she would never develop Tract #1
in a way that would destroy the natural wetlands. Subsequently, Sophia leased her
property for 99 years to Sara, who promptly began to fill in the wetlan d in
preparation for constructing a new home on the site. Then, Mason leased his
property to Micah. Which statement is most accurate? Assume that the original
promise between Sophia and Mason was valid and enforceable.
a. Micah cannot enjoin Sara from destroy ing the wetland because there was
no horizontal privity between Mason and Sophia.
b. Micah cannot recover damages from Sara for the destruction of the wetland
because there was no horizontal privity between Mason and Sophia.
c. Micah cannot enjoin Sara from dest roying the wetland because there is no
vertical privity between Sophia and Sara.
d. Micah cannot recover damages from Sara for the destruction of the
wetland because there is no vertical privity between Sophia and Sara.
The buried wetland: The correct response is D. If Micah seeks damages, he generally must
satisfy the requirements of real covenants running at law, including horizontal privity
(satisfied by the conveyance of Tract #2 by Sophia to Mason), relaxed vertical privity on the
benefit side (satisfied by the lease from Mason to Micah), and strict vertical privity on the
burden side (not satisfied by Sophia’s conveyance of a 99-year lease to Sara).
H. Chapter Quiz
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(1) What is the difference between a negative easement and a negative covenant?
(See p. 571).
If the promise fits into one of the four common law categories, it is a negative easement; otherwise, it is
a negative covenant.
Methodically categorize promises in order: Affirmative or negative? If negative, does it fit within the four
common law categories of negative easements? (promises that prohibit interference L-A-S-S -- light, air,
support of buildings, or artificial streamflow). Otherwise, it is a negative covenant. Why does it matter?
Among other things, we'll see that easements and covenants have different requirements for their
creation and for their termination.
(2) Carefully study the requirements of a real covenant. What is the difference
between strict vertical privity and relaxed vertical privity? (See p. 575.) Choose all
correct responses.
Strict privity requires the successor to take the entire estate of the original covenanting party.
Under strict vertical privity, the successor must the entire estate (fee simple, life estate, etc.) of the
original covenanting party.
Correct!
Relaxed vertical privity requires the successor to take some possessory interest from the original
covenanting party.
Relaxed vertical privity requires the successor to take a possessory interest carved out of the estate of the
original covenanting party. Be sure to remember which property interests are possessory, as opposed to
those that are nonpossessory (see p. 575). Do adverse possessors take a possessory or nonpossessory
interest from their predecessors? Neither! Adverse possession starts an entirely new chain of title, with
no interest passing from the record owner to the adverse possessor.
(3) Distinguish the elements of an equitable servitude from those of a real covenant.
Compare p. 576 (table) with p. 580 (table).
The majority rule requires horizontal privity of estate for real covenants, but not for equitable servitudes.
Why does it matter that equitable servitudes do not require horizontal privity? Because this means they
can be established by "naked" promises between landowners, independent of the conveyance of any
interest in land.
(4) Distinguish the elements of an equitable servitude from those of a real covenant.
Compare p. 576 (table) with p. 580 (table).
Real covenants require vertical privity of estate, but equitable servitudes do not.
(5) Distinguish the elements of an equitable servitude from those of a real covenant.
Compare p. 576 (table) with p. 580 (table).
Both real covenants and equitable servitudes require that promises "touch and concern the land."
(6) Distinguish the elements of an equi table servitude from those of a real covenant.
Compare p. 576 (table) with p. 580 (table).
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Equitable servitudes are enforceable against only those who take with notice of the burden, whereas this
is not a requirement for real covenants.
Because equitable servitudes are creatures of equity, they impose an additional requirement--notice of
the burden--as an element of equity or fairness. In practical terms, however, this distinction seldom
matters because the recording acts can protect landowners who take property without notice of prior
restrictions on the property. (See p. 576.)