Property Outline 1. Acquisition…………………………………………………….1-2 2. Law of Find…………………………………………………….3 3. Adverse Possession…………………………………………….4-6 4. Gifts…………………………………………………………….7 5. Possessory Estates/Future Estates………………………………8-15 6. Co Ownership………………………………………………….16 7. Landlord Tenant……………………………………………….17-22 8. Law of Nuisance……………………………………………….23-24 9. Servitudes (RC and ES)………………………………………...25-31 10. Zoning………………………………………………………….32-33 11. Eminent Domain……………………………………………….34 12. Purchase and Sales Agreement…………………………………35-36 13. Closing………………………………………………………….37-38 14. Recording Acts…………………………………………………39-40 15. Chain of Title…………………………………………………...41-42 Big Picture Arguments: 1st in time Locke’s labor theory Certainty-value in easy to apply rules Fairness Instrumentalism/practical consequences (easy to apply rule) Value and limitation of customs Relativity of title Bundle of rights-right to exclude, sell, use, dispose of by sale or gift Institutional competenceanother body is more appropriate to determine Property being put to good use-valued Reliance Cheapest cost avoider—internalize externalities Zoning is not an encumbrance, violation of zoning ordinances is an encumbrance (exposes parties to hazards of litigation) Property big-picture arguments: 1st in time Locke’s labor theory Certainty-value in easy to apply rules Fairness Instrumentalism/practical consequences (easy to apply rule) Value and limitation of customs Relativity of title Bundle of rights-right to exclude, sell, use, dispose of by sale or gift Institutional competenceanother body is more appropriate to determine Property being put to good use-valued Reliance Oil/gas/water-natural resources -Move freely, Pierson dicta was true for a long time, but tech changes, times change and resources are scarce, need to put in “holding facility” to maintain control -Angled drilling=trespassing -Ratione soli-landowner owns wild animals on their land First Possession Facts Issue: Holding: Rule: Johnson v. M’Intosh Acquisition by discovery/conquest -Conveyance by native American tribe title vs. US gov title Pierson v. Post Acquisition by capture -Post pursuing a fox w his dogs, Pierson killed it Who owns title? US gov owns title Who owns the fox? Post owns fox. -tribe had faulty title, did not have authority bc they didn’t own land, only had right to occupancy -Law of Discovery, first EU nation to discover land has right to that land superior to all other EU nations, between EU countries -if granted title to native Americans, would undermine SC and cause many problems for current landowners and the US gov Maj-Mere pursuit does not give rise to ownership. One gains ownership by depriving animal of liberty and bringing it under “certain control” -easy to implement and enforce rule Conquest gives title. Ghen v. Rich Acquisition by capture -Ghen shot whale w bomb-lance, sank to bottom and washed ashore and a 3rd party sold it for oil -local custom—when a whale resurfaces it goes to OG owner & small finder’s fee for finder Is customs a legitimate claim to ownership? Yes, it encompasses an entire industry embraced by everyone Pro GhenPro Rich-Pierson v. Post, bringing -foxes are not whales, animal under certain certain control is control (Harpooning it different for whales and and identifying it w foxes lance) Dissent—hunter has reasonable prospect to take animal w/in reach, tempus mutantur (times change), wanted to rid countryside of foxes, encourage hunting a pest rather than deter people -Should be question for sportsmen (custom)Hot pursuit givesown. Mere pursuit does not give rise to Custom can determine ownership. ownership. Facts: Issue: Holding: Reas: Rule: Popov v. Hayashi Capture--baseball -Barry Bonds home run ball -Popov initially stopped ball but fell when pile of people attacked him -Hayashi also fell but managed to grab ball and take it Who had control over ball 1st/who owned ball 1st? Equitable remedy—sale of ball and proceeds split Pro PopovPro Hayashi-he stopped ball -Popov didn’t have when he was certain control attacked, context of mob Gray’s rule—must stop momentum of ball (catch ball) and maintain control. INS v. AP Acquisition by creation -AP suing INS for pirating news -AP created news, compiled it, collected information, INS repackaged it and sold it on West Coast How can AP protect its information? AP has quasi-property rights to hot news—good against its competitors Pro APPro INS-Locke’s Labor -news is commonly theory— owned, public transformed -AP can’t own information into news bc you palatable news couldn’t share -fairness-unfair news w anyone competition -instrumentalist— -1st in time to judges can’t collect, write, always foresee disseminate conseq -practical conseq if -institutional AP has no prop competence—leg right, no incentive should be one to be in news deciding business (stifle incentives) Quasi-property right may be created against others by one’s investment of effort and money in an intangible thing, such as information or a design. Moore v. Regents of University of California creation-conversion -Moore sought treatment for leukemia at UCLA -doctor took cells and received patent for a cell line, entered into commercial agreements w/o P’s knowledge (express informed consent) -Moore suing for conversion Who owns the cells? Maj-excised cells do not amount to property, feared it would disincentivize research, difficult tracking/knowing when cells get passed around for research purposes (hard to hold those who benefit liable—further down the line you go)not his property so not conversion Dissent—conversion argument -Bundle of rights—possess, use, exclude, dispose of by sale or gift, cells are still property (sticks left on the board) -cells are property and are market inalienabletake away a stick by sale, may be given but not sold -institutional competence--Leg better at handling this, more able to presume practical conseq POLICY: Incentivize volunteering for research, protection of patient’s right to make autonomous decisions Individuals do not have rights to a share in profits earned from research on their bodily materials. Law of Find LostFinder Owner unintentionally loses possession Hannahbrooch AbandonedFinder Owner has intentionally given up all rights to prop, voluntarily relinquishes it Armory-goldsmith MislaidLandowner Embedded/Buriedlandowner Owner intentionally Depends on classification of placed item there property then forgot to retrieve it McAvoy v. Medinabank notes in barber shop South Staffordshire Water Co.--rings Elwes Gas- prehistoric boat South Staffordshire Water Co. v. Sharman Rings found on private property by employee Rings were embedded/buried R: Landowner has rights over finder for mislaid, embedded/buried chattels Bridge v. Hawkesworth Facts: Issue: Holding: Reas: Rule: Armory v. Delamerie Abandoned-jewel -Chimney sweep who found jewel brought it to goldsmith shop, apprentice removed jewels to weigh it & never returned it Who owns the jewel? Finder owns jewel. Finder has right to property over everyone except the true owner. Just tertii defense— relativity of title right A > right B Hannah v. Peel Lost-brooch -house requisitioned for soldiers, Peel never lived there, Hannah found brooch on windowsill & turned it in to the police -case was close, could be Hannah was model citizen Who owns the brooch? Hannah, finder. Pro HannahPro Peel-Armory, 1st finder -South has right over Staffordshire everyone except Water Co. v. true owner & Peel Sharmannever lived there landowner generally entitled over finder to chattels found on land Banknotes found in public part of shop (Lost) R: One does not necessarily possess property which lies unattached to the surface of his land Elwes v. Briggs Gas Co. Prehistoric boat embedded Leased land to gas company for 99years & allowed to extract minerals R: Landowner owns embedded chattels on land. McCavoy v. Medina Pocketbook found in barber shop Mislaid R: Mislaid property is left to property owner (goal of prop is to return to OG owner, more likely w landowner) At time of trespass Adverse Possession Actual entry-trespass Open and notorious-reasonable notice to landowner, Hollander mowing Adverse-on land without landowner’s permission Hostile/claim of right-puts a reasonable landowner on notice (constructive notice) Must have INTENT to make land their own Disability (SOL) Regular (SOL) Take > one -Subsequent owner steps into the shoes of the previous owner a. Bad faith-trespassed knowing land was not yours b. Minority--Good faith-mistakenly trespassed on land you thought was yours c. Majority--Objective standard-doesn’t matter the state of mind, as long as the trespasser acted as if they were the owner, Hollander Exclusive a. Alone-without the true owner b. Without another adverse possessor c. Without general public Continuous and uninterrupted during Statutory period (Kunto-privity, tacking) a. use is consistent with that type of land (ex. Camping, summer homes) b. for time of SL-or tacking permitted due to privity-reasonable connection between landowners c. privity-voluntary transfer of property Statutory period: AP and disability analysis POLICY: o o o o o productive use of land efficiency in courts-property being put to good use Locke’s labor theory Attachment to land-emotional (worship) Negative (rewards trespasser, penalizes sitting on property, productive use of land is different now than it was in the 1800s, PENALIZES CONSERVATION), penalizes speculation (buying property hoping value will increase) Pierson dissent, times change Disabilities for SOL (not penalized, owner always gets longer of both SOL) o After trespass occurred is irrelevant Prison Unsound mind Minor Quiet title-determine legal ownership Color of title-person who has a document that purports to give ownership of land and the person thinks they own the land o Faulty deed, shortens SOL Actual possession-use of land Constructive possession-control over property without having actual possession of the property (Only issue for Color of Title) O’s actual possession trumps constructive possession of A o If A owns property and is actually in possession of 20 acres o B is adversely possessing 10 acres, B can claim actual possession of 10 acres, CANNOT claim constructive possession o If A owns property and B is adversely possession for Statutory period, B can claim actual possession of 10 acres and constructive possession of 90 acres that A is not using Tacking-VOLUNTARY TRANSFERS (privity), adding of adverse possessors’ time together o Involuntary transfers (abandonment or forceable removal) NO TACKING Action for ejectment-action owner can bring to eject trespasser within SOL Facts: Issue: Holding: Reas: Rule: Fulkerson v. Van Buren Adverse Possession -Fulkerson held title, congregation began using land for place of worship & greatly improved building/surrounding land Who owns the land? Fulkerson owns the land. No AP. Maj-church has no right to adversely possess land, no requisite intent for 7 years (bad faith) Dissent-church greatly modified prop by clearing it out, satisfied continuous & uninterrupted use. Church did not recognize true owner after being notified, they still used it. Hostile claim of ownership even under a mistake is adverse. To establish AP, one must prove to have been in possession of property continuously for more than 7 years, o&n, exclusive, hostile & intent to hold prop against owner. Hollander v. World Mission Church Quiet title-Boundary Dispute -Hollander & predecessors used disputed land mistakenly believing their prop line ran to line of trees at edge of church’s property Howard v. Kunto Quiet title-Tacking -many houses not on proper land in deeds, mistaken tracts of land adjacent to one another -land used for summer camping, vacation homes Who owns the land? Hollander Is tacking permitted for AP claims? Yes, where there is privity (voluntary transfers between parties) you can tack time. -privity is satisfied -have to look at the nature of the land and for what it is used for Maj-OBJ standard (hostile intent)Adversity is judge on adverse possessor’s conduct (what would an owner do) Pro Church-Mistake precludes AP was hostile intent Minority-Adverse possessor must have intent to claim title to all land within boundary, mistake negates adverse intent—mistaken improvers Pro H-cared for & maintained land for 15 yrs, church wasn’t policing land properly, satisfied o&n req for AP To establish AP, one must prove to have been in poss continuously for over 15 yrs, poss was o&n, exclusive, hostile & w intent to hold property against the owner Continuity of possession may be established although land is used regularly only for a certain period each year (ex. Summer camping satisfies continuous & uninterrupted). -have to look at the nature of the land and engaging in activity that one would expect to happen on that land (what neighbors do). Gifts Intent-to make present transfer Acceptance-presume acceptance on delivery, everyone has right to refuse Delivery (if intent clearly satisfied, court may be forgiving about delivery) o Actual delivery-manual o Constructive delivery-means of accessing gift Ex. Keys to car, house o Symbolic delivery-letter Gruen v. Gruen Inter vivos gift Facts: -Father wanted to give son Klimt painting -gave son 2 letters stating he wanted to give son painting Issue: Is painting a valid gift? Holding: Yes, symbolic delivery satisfied. Reas: -impractical to have father physically deliver painting to son, then take it back with him just to later give him the painting upon his death -PPI-Father, future interest (remainder)-son Rule: Symbolic delivery (letter) is sufficient when intent is clearly satisfied. Newman v. Bost Causa mortis gift -widowed man on his deathbed gave Newman keys to a dresser, gestured vaguely to furniture of the house and said she could have it -in dresser drawer was life insurance policy Is piano, life insurance, furniture in the house a gift? No, except for the dresser and the furniture in her bedroom. -Newman not entitled to life insurance policy inside dresser bc it was capable of being hand delivered -Didn’t give constructive delivery to other furniture in the house (not entitled) except in her room because she had dominion and control over those (yes entitled) If an object is capable of being actually delivered, it must be so in order to satisfy delivery for a gift. Possessory Estates 1. Sticky laws, have been around for a long time (efficiency and simplicity in using land and tracing ownership) o Escheat-if person dies intestate (without a will) with no legal heirs, their property goes to the state o Testate succession-person dies w legally valid will o Beneficiaries of will are devisees o Intestate succession-person dies without legally valid will o Laws of intestacy: Spouse, descendants, ancestors, collaterals Life Estates—alienable Facts: Issue: Hold: Reas: White v. Brown -Woman died leaving holographic will to her niece & sister-in-law -restraint on sale Who gets the house? FSD—no restraint on sale -Disposing of whole estate is to construe terms of the will as much as possible, to pass as much property being conveyed (against partial intestacy—indiv left a will but will does not fully deal w whole estate) Baker v. Weedon -father died and left everything to his wife and her heirs, and if no heirs, then to his grandchildren (estranged) -highway bypass constructed on property, highway dept. located contingent remaindermen Whether sale is proper for all parties? No, sale is only proper if it is in the best interest of all parties. -law of waste-forbids life tenant to alter property in a way that reduces the value of the prop as a whole o affirmative waste (acts that substantially reduce value of the property) o permissive waste (failure to act, negligence, failure to take care of prop) o Ameliorative waste (changes prop by tenant that increases rather than decreases market value of land) -intent could be construed from the fact that (he was willing to give Anna’s kids the property regardless of who the father was, they didn’t have children) Rule: Sale is only proper if in best interest of all parties. Defeasible Estates Mahrenholz v. County Board of School Trustees School grounds 1.5 out of 40 acres to be used for school purposes, conveyed 38.5 acres to J. J then conveyed their deed to the Mahrenholzes. i. FSD or FSSCS? A.k.a. what is the future interest (poss of reverter or right of entry)? 1. Harry-son of Huttons who then released his interest to the P and the D. 2. FSDPoss of reverter-FSA (automatically) (Mahrenholzes got everything) 3. FSSCSRight of entry-Harry never did anything (Mahrenholzes got nothing) ii. Court held FSD possibility of reverted to Harry because of grantor’s intent was very clear and language “revert” could be construed either way. Future Interests Retained by transferor Reversion Possibility of Reverter a. FSDPossibility of reverter b. O automatically regains possession of property once condition broken Right of entry a. FSSCSRight of entry b. O can exercise right of entry to regain possession of property c. Not automatic Transferee All are inheritable, devisable, and alienable Vested remainder—grantor does not have reversion o Ascertained person o Can be followed by executory interest o NOT subject to condition precedent, but may be subject to condition subsequent o Ex. To A for life, then to B and her heirs. o Can be subject to open/partial divestment—children. May become vested when “openness closes” aka when all children are born/when condition is met Contingent remainder—O has reversion o Unascertained person, unborn o Subsequent to a condition precedent o Overtime contingents may become vested o CANNOT be followed by executory interest o Ex. To A for life, then to heirs of B. (heirs of B cannot be ascertained until B dies). Executory interest o Divest or cut short preceding interest o Only executory interest can follow vested remainder o Alienable, devisable, inheritable Rule against perpetuities prevents people from ruling from the gravedead hand rule ESTATES: STOP AND CLASSIFY WHEN YOU COME TO EACH COMMA Type of Estate FSA Language PPI “To A and his heirs” A= fee simple absolute Alienable Devisable Inheritable Infinite A= Life Estate Alienable Devisable Inheritable Ends when A dies A= Life Estate Alienable Devisable Inheritable “to A for Farming” For= words of hopethere is NO future interest Reversion to O: “To A for life” VESTED REMAINDER: LE “to A for life, then to Lucy and her heirs” A= Life Estate Lucy and her heirs – vested Remainder Unit A dies then automatically would go to Lucy Given to an ascertained person NOT subject to a condition precedent Vested Remainder Subject to Open LE Alienable? Duration Inheritable? Devisable? “To A for life, then to the nieces and nephews of Lucy and their heirs” At the time Lucy only had one nephew (Ned) A= Life Estate Alienable Devisable Inheritable Until A diesthen automatically to Lucys nieces and nephews in FSA. Future Interest Alienable? Inheritable? Devisable? NO FUTURE INTEREST Reversion to O Alienable Devisable Inheritable Lucy has a Vested Remainder Alienable Devisable Inheritable She is GUARANTEED to get it after Andy dies Vested remainder subject to open the class is open – there could be more nieces and nephews born and they would get the SAME interest as Ned Alienable Devisable Inheritable If all Lucys siblings were dead and there was no possibility of more nieces and nephews, then it would become just a vested remainder A life Vested Remainder “To A for life, then to B estate and her heirs, but if B does not survive A to C and his heirs.” Contingent Remainder: A= life O grants “to A for life, then estate to B and her heirs if B graduates from law school” Alienable Devisable Inheritable Alienable Devisable Inheritable Until A dies Ends when A dies Executory interest which divests VR -VR in B, Ex. Int. in C Alienable Devisable Inheritable B- contingent remainder O – reversion Alienable Devisable Inheritable If B graduated Law school then it would go to B when A dies- If B does not graduate law school and A dies then it would revert back to O Exists at the same time as a reversion because you need to be certain that the property will go to someone Unascertained Subject to a condition precedent Until A dies. Contingent remainder O grants “To Andy for their natural life, then to Lucy and her heirs if Lucy marries a Green Bay Packers fan, but if Lucy does not marry a Green Bay Packers Fan, then to Daniel” Andy = life estate Alienable Devisable Inheritable Lucy= contingent remainder Daniel= contingent remainder O = reversion If Lucy dies single, then Daniel would have a vested remainder and O would no longer have a reversion Alienable Devisable Inheritable FSD “To A (Present possessory) while A is using the land as a ____ (words of limitation)” A in FSD Alienable Devisable Inheritable Durational Language: So long as, while, during, until Ends AUTOM. AS AN OPERATION OF LAW when a stated event happens Possibility of Reverter In Grantor NOT alienable NOT devisable Inheritable Words of purchase in same clause as durational language Durational language Words of purchase in same clause as durational language Alienable M in FSD Devisable Inheritable “To M so long as the land is used for religious purposes for the next 20 yrs, if not then to LUC” “to A, provided, that A uses the property for a factory” Alienable Devisable Inheritable FSSCS Words of purchase and language of limitation are in separate clauses Conditional Language: provided, however, that when the premises, but if, on the condition of Courts prefer this over determinable A in FSSCS Ends AUTOM. AS AN OPERATION OF LAW when a stated event happens Until condition broken Possibility of Reverter in 3rd party Right of entry O has to exercise his right of entry, otherwise A remains in possession NOT alienable NOT devisable Inheritable NOT alienable NOT devisable Inheritable FSSEL When a grantor transfers what appears to be a fee simple subject to condition subsequent and in the same instrument creates a future interest in a third party rather than himself “O conveys “To A, but if it ceases to use the land as a school, to B” A in FSSEL Alienable Devisable Inheritable Until condition Executory interest broken, then executory Automatically/As an interest divests operation of law prior interest transfers to a 3rd party Alienable Devisable Inheritable CL—ROE, POR, not devisable or alienable exception owner of future interest can sell to holder of PPI--release Modern Law—ROE, POR devisable, inheritable, alienable Co-ownership and Marital Interests 1. Tenancy in common—separate but undivided interests in property, right to use property as a whole at any given time No survivorship rights Alienable, devisable, inheritable Rents and profits shared in proportion to ownership Responsibilities—taxes, mortgage payments, HOA (Carrying costs) in proportion of ownership Necessary repairs made in proportion of ownership Improvements--No right of contribution in present, but tenant who pays may recover at time of sale 2. Joint tenancy—right of survivorship, at any point either joint tenant can end joint tenancy and become tenants in common, risk comes with co-ownership (risk that other co-tenant defaults) and they can use their % as collateral so the bank can seize property Alienable, but then JTs become TIC with other owner Time-interest of each joint tenant must be acquired or vest at the same time Title-all joint tenants must acquire title by same instrument or by a joint adverse possession Interest-all must have equal and undivided shares and identical interests measured by duration (ex. 1/2, 1/2) Possession-right to possession as a whole, one joint tenant can voluntarily give exclusive possession to other joint tenant 3. Tenancy by the entirety—only for married couples, exactly like joint tenancy but with the addition of marriage a. Cannot unilaterally destroy survivorship right b. Terminates the minute there is a change in marital status (divorce, separation) c. Need express consent of other spouse d. Cannot use land as collateral unless they act TOGETHER Many people want to avoid probate process—the process by which estates are distributed after someone dies, judicial process Life tenants required to pay property taxes Exit options: every co-owner has the right to NOT own property 1. Ouster—demand for rent from cotenant, claim of adverse possession (running of SOL) Spiller v. Mackereth tenants in common owned commercial building, Spiller moved in and used building, Mackereth requested rent, Spiller put locks on building o Lessee vacated and Spiller used the building as a warehouse o Mackereth brought suit against Spiller for payment of ½ rent or to vacate half the building Rule: tenants in commonhave the right to occupy and unless the one in possession denies the other the right to enter, or agrees to pay rent, nothing can be claimed. 2. Reach an agreement—private agreement (1 buys other coowner’s share, act together and sell or divide it) 3. Partition in kind—divided between them, is land such that it can be divided, zoning and covenants, no way to preserve all interests of all parties, courts prefer partition in kind over partition by sale because it is an extreme and harsh remedy Delfino v. Vealencis-tenants in common, owned 20.5 acres of land and D’s dwelling and garbage business Trial court ordered a partition by sale, without considering the interests of all parties (brothers wanting to make a subdivision vs Vealencis who had her garbage business and dwelling) o R: the court must look for the best interest of all parties to partition land in kind or by sale. 4. Partition by sale—extreme measure of the court, easy to apply Landlord Tenant Law A. Leaseholds- when T has to stop paying rent and L gets property back Lease-contract (# covenants) and conveyance (transfers possessory interest in land) 1. Term of years—estate that lasts for some fixed period of time and terminates on a specified date, death of L or T does not end lease Ex. L leases to T from “June 1, 2020 through May 31, 2022” 2. Periodic Tenancy—lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination Ex. “To A from month to month” To terminate, must give notice of one term length or a limit defined by the state Death of either party has no effect on duration of a term of years or periodic tenancy Must give notice of one term to terminate, OR 30 days before end of the term, cannot drift into next term 3. Tenancy at will—no fixed period that endures so long as both landlord and tenant desire, ordinarily requires period of notice for example of 30 days or a time equal to the interval between rent payments Ex. L leases to T “for as long as they both agree” 4. Tenancy at sufferance: Holdovers—tenant who is rightfully in possession but wrongfully remains after termination B. Selection of tenants and fair housing law 1. Civil Rights Act 1866 Section 1982, Federal Fair Housing Act 42 U.S.C.A, §360, §3603 Exemptions 42 USC §3604 FHA Protected a. refuse to sell/ classes negotiate sale or rental based on race, color, religion, sex, familial status, or national origin b. rental agreement, privileges, sale c. no advertisements To publisher indicating and person preference, publishing— limitation or discrimination If using a based on protected real estate classes (including agent FHA handicap) applies d. to represent that any dwelling is not available for inspection, sale or rental when it is in fact available (to protected classes) e. to prevent any sale of property due to prospective entry into neighborhood of a protected class (prevent white flight) f. handicaprefusing to permit reasonable modifications made at differently-abled person’s expense 42 U.S.C. 1982 Civil Rights Act All citizens of US have same right in every state or territory to purchase, lease, sell, hold, and convey real and personal property Only prohibits RACIAL discrimination Not address discrimination about services and facilities 1982 courts interpret race to mean what it did in 1866, so could be German, etc. race and national origin 42 USC §3603 Exceptions: FHA Only subsection c of 3604 about advertising applies: 1. single family household (only applies to owner who owns more than 3 singlefamily homes) 2. rooms or units occupied or intended to be occupied by no more than 4 families living independently of each other if owner maintains one of living quarters as his residence (FHA does not apply if dwelling is intended to house 4 or fewer families and owner lives in dwelling) C. Subleases and Assignments Assignment—tenant transfers the whole term to another party, leaving no reversionary interest in the grantor Sublease—tenant grants interest in the leased premises less than his own or reserves himself reversionary interest in the term (portion/part of the time) Facts: Issue: Holding: Reas: Rule: Ernst v. Conditt Sublease or Assignment -E leased a tract of land to Rogers who constructed a racetrack & other improvements (go cart track) -Rogers then negotiated w Conditt to lease property Sublease or assignment? ERC Assignment, Conditt is responsible for rent/removal of improvements Pro ErnstPro Conditt-Agreement between -Agreement between RC is an RC is a sublease assignment of the & therefore R is lease therefore C is lliable for rent, R has liable for reversionary interest rent/repairs, if in prop assignment—privity -if sublease, no of contract between privity of contract Conditt & E, and C between E & C, and is liable directly to E C not liable for rent or improvements When a tenant passes the entire interest in property for the entire term, it is an assignment. Only need 1 privity to sue Privity of estate- two individuals share an interest through their relationship to a leased property Privity of contract- contract obligation between two contracting parties D. Tenant who defaults F Facts: Issue: Berg (T) v. Wiley (L) Tenant in possession -Berg took over assignment of lease from her brother & opened restaurant, in her contract with Wiley (owner) was that Wiley could retake premises should the lessee fail to meet condition of lease (that she make no changes to building structure w/o prior permission of L, & to operate restaurant in a lawful & prudent manner -Health Dept inspection produced order that certain changes be completed to comply w health code, & L demanded she remodel items & they be completed w/in 2 weeks -T shut down restaurant & L came in and tried to change locks unsuccessfully, then returned when T wasn’t there & changed locks Is retaking of premises lawful? Sommer v. Kridel Abandoning Tenant -“T” paid security deposit & 1 month’s rent, but then wrote letter to L that his engagement ended and he was discharged from army, he was a student & had no money -Asked to show apartment to another potential tenant -Power dynamic between L & T, Residential leases, disallowing self-help protects T (summary proceedings to get through more eviction cases through quickly) Whether L is under obligation to mitigate damages when T abandons property? -Reasonable effort to mitigate HHolding: No, must resort to judicial process to enforce remedy, self-help reentry against T in possession is wrong Reas: Pro TPro L-Lockout was wrong, T -T breached provisions had possession of prop of lease entitling L to -Did not retake possession abandonwrongful -repossession by eviction, not peaceful so changing locks in T’s cannot be justified under absence was peaceful CL Rule: Self-help is NEVER available to All sellers except, L have dispossess a T who is in possession & duty to mitigate damages has not voluntarily surrendered or when T abandons abandoned premises. property Surrender—agreement by landlord and tenant to terminate tenancy prematurely, tenant NOT liable for future rent, but liable for past rent o Implied: T letter that requests abandoning property o Express: T sends letter, L accepts Abandonment—T vacates leased property w/o justification and w/o any intention of returning and he defaults on payment of rent o Tenant’s abandonment is an implied offer to surrender Landlord’s options: o Terminate lease o Leave premises vacant, recover accrued rent o Mitigate damages and recover any difference in rent (treat property as if previous T was never involved) E. Landlord’s duties 1. Duty to Deliver Possession—L must deliver possession when lease term begins, but T’s responsibility to oust trespasser/holdover 2. Duty regarding condition of premises 3. Quiet Enjoyment and Constructive Eviction Covenant of Quiet Enjoyment-L not to interfere w/ tenant’s right to possess land during term of lease, breach would discharge T of his duty to pay rent To prove breach of covenant of quiet enjoyment and constructive eviction, T must prove: 1. wrongful conduct by L 2. substantial interference w T’s use and enjoyment of the premises and 3. there was a timely vacation of the premises T abandons, still liable for rent UNLESS L accepts L is seller, T is buyer Ls have excess capacity until ALL units are filled Covenant of quiet enjoyment—UNIVERSAL Gombo v. Martise Constructive eviction ONLY when tenants have left, is an affirmative defense raised by T when L sues for unpaid rent, tenant must quit premises if he would relieve himself from liability to pay rent and whether or not he is justified in quitting is a question for the jury o T has no reasonable alternative but to vacate premises—substantially interfered w/ T’s enjoyment of premises T may wish to vacate or stay but pay less (or no) rent T might be injured by allegedly defective premises and claim damages exception to no-landlord-duty rule: furnished dwelling (L has to keep premises in good condition for immediate occupancy), latent defect (L much more info than T), common areas (Concern about free-riding problem amongst Ts if one fixes it or inaction, L required to maintain) Actual eviction (Village Commons, LLC) when T is deprived of beneficial enjoyment of some part of the premises which T has a right of election, to quit and avoid lease and rent, or abide the wrong and seek remedy in action for trespass Facts: Constructive Eviction Claim -Slumlord situation, unfit for human beings to live in, roaches, holes in floor hazardous to life & limb, walls falling apart, no heat from Oct-Dec in NY, electricity & water— dangerous for children -Ts desperate & stopped paying rent, L sued for nonpayment Issue: Were Ts liable for rent? Holding: Yes, Ts were liable for rent. Reas: -Trial court—cites cannon of judicial ethics, judge felt bound by precedence, wanted to prevent slumlord Ls from receiving any more money, starting to say Ts don’t need to pay rent when conditions are deplorable -App Ct.—Ts may not claim CE if still living in apt. Rule: To claim constructive eviction, T must move out. Village Commons, LLC v. Marion County Prosecutor’s Office Actual/Constructive Eviction -building used as office & evidence storage space -leaks in various rooms, landlord hired microbiological sampling & found signs of water damage—L never made repairs -L sent a letter to T suggesting move evidence out of areas prone to damage (Court concluded actual eviction w letter) -another leak, 70 boxes of evidence damaged, mold spores found -MCPO vacated & stopped paying rent Were Ts liable for rent? No, Ts were not liable for rent. -doesn’t matter if actual eviction is partial or whole premises, T not liable for rent T relieved of any obligation to pay further rent if L deprives T in possession & beneficial use & enjoyment of any part of demised premises by actual eviction. Hilder (T) v. St. Peter (L) -P moved in w 3 children & newborn grandson into D’s apt building -P paid all her rent, D said he would refund her deposit if she cleaned apt prior to taking possession, kitchen window broke and P fixed it, D never provided a front door key so P purchased a padlock, toilet not working/bathroom light fixtures not working -Smelled so P couldn’t bring guests over, D never fixed anything -Ceiling fell down onto her bed & grandson’s crib P moved into living room, P found her furnace was attached to her breaker box even though D had agreed to pay for rent Issue: Whether T is required to abandon premises to be entitled to damages for breach of warranty of habitability? Holding: No Reas: -D did nothing to correct defects despite repeated complaints, had reasonable time to fix it Rule: In rental of residential dwelling unit an implied warranty exists in the lease, oral or written, that L will deliver over & maintain throughout the period of tenancy premises that are safe, clean & fit for human habitation. Facts: Implied warrant of Habitability-- safe and fit for human habitation—followed by some jurisdictions for RESIDENTIAL LEASES ONLY Caveat Lessee—lessee beware, very landlord friendly, tenant took premises “as is” Implied warranty of habitability—very T friendly, non waivable, if L breaches, T must give notice Reasonable amount of time to fix it (depending on defect and how serious it is, how much of an emergency) a. compensatory or even punitive damages may be available Can be used defensively if T is sued for nonpayment of rent, T can stay and not pay rent if T gives L notice in a timely manner Can be used offensively T can terminate lease because of breach of implied warranty of habitability CAUTION: COURTS MAY DETERMINE THAT TIME WAS NOT REASONABLE TO REMEDY THE ISSUE Law of Nuisance (PRIVATE) One should use one’s own property in a way that doesn’t intentionally injure another person’s property, interferes with another person’s enjoyment of their land “You know a nuisance when you see it, smell it, or hear it” Jost Approach (Factors) o extent & character of the harm o gravity of harm to P > D utility of conduct o social value of P’s use o Suitability to locality in question o the burden on P of avoiding the harm Whether the interference crosses some threshold that marks the point of liability Externalities—decisions that have costs on other people, goal is to make landowners aware of costs imposed on others and make landowners absorb the costs Public or private nuisance, public interferes with public health, safety, comfort or conveniencesubstantial harm caused by intentional/unreasonable, reckless or abnormally dangerous Morgan v. High Penn—court cited restatement and said High Penn Oil is a Nuisance Threshold approach, some level and if Ds activity exceeds that level, we are going to call it a nuisance Facts: Issue: Holding: Reas: Rule: Morgan v. High Penn Oil Co. -Ps bought land & used it as dwelling-house, restaurant & trailer park renting 32 trailers -D operated oil refinery that emitted nauseating smells that a normally sensitive person would find nauseating, inhibited enjoyment of land & use -P sued for injunction -prop around church, private houses, gas stations, mixed land use Is injunction valid? Yes-injunction necessary to protect Ps against irreparable harm Pro MorganPro Oil Co.-extend & character of harm -social value of (noxious gasses) preventing refinery, jobs, location Ps from using prop & going is around industrial outside, part of their business companies (RR, end (restaurant & renting trailers of a pipeline), is affected), happens impracticality of recurringly preventing the harm st -1 in time, put land to good (develop/use tech. that use (where they lived & slows emissions)— operated business) -Tech readily available -1 P -Injunction Interference with use and enjoyment of land, in order to give rise to liability must be 1. substantial (either intentional and unreasonable) OR 2. unintentional result of negligent, reckless, or abnormally dangerous activity. Boomer v. Atlantic Cement Co. -Ps sued D for dirt, smoke & vibration emanating from plant -7 Ps, residents in area Are permanent damages available? Yes Maj-permanent damages (loss recoverable is small in comparison w cost of removal of nuisance) Dissent-Danger in granting an injunction where a nuisance results in substantial continuing damage -cement co. can continue to do harm to neighbors as long as they pay a fee for it, once permanent damages are paid, no incentive to alleviate wrong & continue polluting -Tech not developed yet/too expensive -7Ps, difficult to get consensus -Permanent damages Servitudes--right to do something or to control something on someone else’s land (PRIVATE) 1. Initial unity of ownership of the now Dom and Serv estates 2. Strict necessity @ time of severance 1. Easements—encumbrance on title-makes property less marketable, appurtenant-belong, attached to the land, RUN W THE LAND Right to use Dominant—owner has right to use other land Servient—parcel burdened w/ easement Scope of easements—times change (if for transportation, can only be to get from A to B) Negative easementright of dominant owner to stop servient owner from doing something on servient land Easement by estoppel starts as a license and bc of heavy reliance and silence in face of reliance/use, turns into INABILITY TO REVOKE LICENSE o License-permission to use Reliance-what did they do w/ license (how they change their position w/license) Knowledge-person granting license, were they aware of possibility of reliance by other person? Easement by implicationnot written, Q is always did O.G. parties INTEND for there to be an easement o Easement by necessity: Easement by prior existing use: 1. Initial unity of ownership of now Dom & Serv estates, followed by severance of title 2. Existing, apparent, and continuous use of one parcel for the benefit of the other 3. Reasonable necessity for that use (CL), Modern jurisdictions require (Reasonable if granted, Strict if reserved) Easement by prescription right to use, use not limited to one party (not exclusive) **Not in Writing Higher than reasonable necessity and lower than strict necessity. End of easements- merger (dom estate and serv estate come to be owned by same person), abandonment (have to prove person intended to abandon), release (holder of D estate gives up right to easement—S estate purchases D’s easement) Othen v. Rossier-Easement by implication Facts -D made levee which resulted in road becoming impassable, extremely wet interfering w P’s ability to use easement of road -P claimed easement by necessity and by prescription Holding Reas: Othen did not have easement by implication to use road. -Othen’s use of road on D’s property was not necessary at the time of severance, Othen has burden of proof that it was necessary at time of severance Facts: Willard v. First Church of Christ. Scientist Easement in 3rd party -M conveyed to P easement for car parking during church services & to run w land, P conveyed to W, who claimed to not know about easement until much later after purchase & claimed it wasn’t applicable Issue: Was an easement created & is it viable? Holding: Reas: Yes, church was able to use parking lot Pro churchPro Willard-did not rely on -CL, cannot prop rule and reserve an church can easement in a 3rd continue to park party (church on land members—not -MP deed was grantor or grantee) recorded in land -he relied on prop office, a rule that strangers reasonable can’t use easement purchaser would (organized his life have researched it around that and read it, W was property rule) sleeping on his -stranger to the rights as a would- deed Rule: Easement by implication: 1. Unity of ownership of alleged dominant and servient estates 2. Roadway is a necessity, not a mere convenience Necessity existed at the time of severance of the two estates Mund v. English Van Sandt v. Royster Easement by Estoppel -Son and daughter-in-law suing D mother for permanent use of well -Ps built house next to Ds land w agreement Ps could use water from a well that both parties installed together, no other source of water available Can Ps continue to use the well? Easement by Implication -Lateral sewer through and across P land -P discovered basement flooded w sewage and found sewer drain through to D’s property Yes -When people are related, makes more sense that they don’t write things down (courts more likely to waive the requirement that it be written) -The license to use turned into a reliance by Ps (who built their house there with no other water source), and the D had knowledge of their reliance on the well (so the right to use the well cannot be revokedeasement by estoppel) Was the lateral sewer apparent, continuous and permanent? Yes, despite being buried underground, it was apparent. Pro PPro D-even if easement was -Easement was created by created, when purchased he implied reservation on took it free from burden of severance of servient estate easement and there was no from dominant estate in notice, actual or deed from OG parties constructive, at time of -valid easement by severance it was not prescription apparent, continuous and permanent because pipe is Court--@ time of purchase, underground and cannot see P made careful and what is buried. thorough inspection of prop and knew that house had modern plumbing and it Rule: be purchaser, W stands in previous owner’s shoes Most courts will enforce easement for 3rd party if there is no reliance by the new owner. drained into a sewer (apparent easement) easement by estoppel. 3. License 4. Heavy Reliance 5. Knowledge by grantor of reliance Easement by prior existing use: 1. Initial unity from D and S estate followed by severance 2. An existing, apparent and continuous use of one parcel for the benefit of the other, existing at the time of severance 3. Reasonable necessity for that use 2. Covenants-promises, benefit of promise is ability to enforce, burden is subject to/bound by Horizontal privity-required for burden to run, not benefit 1. Grantor/Grantee 2. Mutual Interest (easement/profit) created in the land burdened by the promise Vertical Privity-same duration as estate, VPL-Formal conveyance on benefit side, NO AP Real Covenant-$$ Burden Writing-in deed Intent-heirs, assigns Touch and Concern HP 1. grantor/grantee Equitable Servitude-injunction Benefit Burden Benefit 2. Easement or profit, interest in land created VP *CIC--Usually Touch and concern, and HP/VP satisfied (VPLformal conveyance, no AP) No, but some jurisdictions require VPL Real Covenants—P seeking monetary damages, run w land, ex. No lemonade stands Notice *If CIC—Common scheme of development or a common plan, restrictive servitudes—ESWriting requirement may be excused, ex. 53/91 lots like in Sanborn which contained the restrictive servitude Equitable Servitudes—P seeking equitable relief (injunction), run w/ land more frequently than RC Profit-Interest in land that allows someone to take something off the land Changed Condition Doctrinestringent, as long as restriction is of value to some land, courts will usually not terminate it even though conditions have changed in such a way that the restriction decreases the value of other land. Tulk v. Moxhay Facts: Issue: Holding: Reas: Leicester Square-ES injunction -Tulk conveyed land to Elms w a covenant for themselves, heirs and assigns and administrators that they would maintain the garden in Leicester Square -Moxhay wanted to build upon square Could P get an injunction when E conveyed land to M who wanted to build upon the square? Yes, ES-- could get an injunction -ES—about fairness (purchaser and seller, M paid less bc of covenant, would be unfair/unjust not to enforce it, D had notice, he knew and took the land knowing about the covenant River Heights Associates L.P. v. Batten Termination of Covenants -Neighbors wanted an enforceable restrictive covenant prohibiting commercial use of 4 residential lots in subdivision Whether the changed condition doctrine applies No, the changed condition doctrine does not apply -must look at change in surrounding area as well as within the neighborhood, if changed so dramatically, the court can refuse to enforce covenant 2A 2B Shelley (black buyer) v. Kraemer Discriminatory Servitudes--race -Neighbors got together and created Covenant preventing black people from moving in for 50 years -D owners subject to terms of restrictive covenant sued asking that Ps be restrained from taking possession of property and divesting title away from Shelley in someone else Whether the racially restrictive covenant is prohibited by Constitution? Yes, violates Equal Protection Clause of 14th Amendment -Restrictive agreement alone cannot violate 14th Amendment bc it has to be a state action (private party agreements do not violate Am) -However, the App. Court enforced the restrictive covenant, which is a violation of 14th amendment— judicial enforcement is state action Normally CL Rule—Stranger to the deed, can’t reserve a right to use in a 3rd person 2C 2D Route 29 If 2C, 2D become commercial, 2A, 2B relied on buffer 2C, 2D provided. 2A/2B is more expensive, protects bargain made w respect to the land. If 2C, 2D become commercial, next 2A, 2B will become commercial Rule: Normally CL—stranger to the deed, can’t reserve a right to use in a 3rd person, however, if the purchaser knows of the equitable servitude, they are bound by it. Change must be so radical as practically to destroy the essential objects and purposes of the restrictions in order to defeat purpose of restrictive covenant. -Without judicial assistance, restrictive covenant could have been imposed, but judicial enforcementstate action -Covenant is unreasonable and should be struck— contrary to public policy, restraint on alienation -Fairness—unfair, Ps can’t purchase land bc of race, impermissible restraint on alienation 14th Amendment protects from agreements made by private citizens where the State would enforce such agreement Common Interest Communities-Residential ownership in which management of development is separated from possession o Condominiums, Cooperatives, and planned subdivisions o Almost all states adopted statutory scheme for organizing CIC, declaration of rules (covenants), conditions and restrictions (CC&R) And they must be disclosed to purchasers (HOA—which manages o Any requirement for HP/VP usually met because the original purchasers are in privity with the developer and subsequent purchasers are in privity with the original purchaser o Req that covenants touch and concern the land are usually satisfied RC/ESdoes not run if o Arbitrary o Contrary to public policy o Imposes a burden on the affected land that is greater than the benefit If you strike the covenant for 1 person, must be struck for all *Writing requirement (ES may be construed if writing is not satisfied in CIC) *If common developer/CIC, HP satisfied, VP satisfied and T&C satisfiedusually Facts: Nahrstedt v. Lakeside Village Condominium Association, Inc. Common Interest Communities--cats P homeowner in condo complex sued to prevent HOA from enforcing a restriction against keeping cats, dogs and other animals in condo complex Issue: Holding: Reasoning: Rule: Is restrictive covenant enforceable? Yes, restrictive covenant is not against public policy and benefit to everyone > burden to everyone. Maj-Fairness, real covenants are recorded and attached, other owners knew about restriction, some people relied on restriction being enforced and changed their lives around that covenantincreased likelihood of lawsuits, private concerns are different (don’t want to do a case-by-case basis for every challenge to a covenant in CICs) Dissentvalue of pets > utility that restriction may serve restriction does not promote health, happiness or peace of mind If restrictive covenant violates public policy, then it will not be enforced, nor will an arbitrary ES that has no rational relationship to protection, preservation of affected land. Weigh burden to everyone < benefit to everyone, or else struck. A=Dominant B=Servient HP if interest is created in B’s land Interest in the land subject to the promise NO HP in A’s land *Parcels can be DOM & SERV. @ same time Legislative Land Use Controls: Zoning (PUBLIC) Facts: Issue: Village of Euclid v. Ambler Realty Co. Constitutionality City zoned for different uses U1 (Single family-U6 heavy industry) State Ex Rel. Stoyanoff v. Berkeley Is zoning constitutional? Is the creation of arch. board w/in scope of delegated authority from state to municipality? Yes Enabling Acts refer to zoning as way of preserving value of prop. Aesthetic consideration of proposed buildings are a matter of general welfare and sustains value of prop. Prop. Values maintain character of neighborhood, no data on whether 1 house would signif. alter Holding: Yes Reas: Rule: Zoning is an extension of police power through Enabling Acts. Can always do something lighter in a heavier zone (U1 can be in U4, but U4 can’t be in U1) Aesthetic Regulation Architectural variation of modern house to be put in historical community was not approved Southern Burlington County NAACP v. Township of Mount Laurel Zoning out classes of people -low density population -30% zoned for industry -Planned unit developer—mix land use but not for poor -municip. Was keeping prop tax low by limiting number of children/families—children are parasites Is it acceptable to zone out entire classes of people through zoning ordinances? No Zoning must make realistically possible appropriate variety of choice of housing for all people. Pro Zoning: -Reduces nuisance -Foster wholesome family living -Separating land uses that are incompatible -more open space, green, air, light Anti Zoning: -pushes env. Probs. Onto certain communities -NIMBY -Creates econ. Segregation, with wholesome family living being most desirable -creates env. Dependent on cars -insuff. Hous -creates sterile env. (uniform uses) -limits profit of land res. < commercial use City of Edmonds v. Oxford House Zoning out classes Facts: Group home in single family zone -city ordinance permitting no more than 5 unrelated people -FHA prohibits discrimination for handicap (recovery addicts) -City changed zoning ord. and allowed group home to be in commercial zone Issue: Whether ordinance is household composition ruleFHA applies, or occupancy restrictionexempt from FHA regulation Holding: Household compositionFHA applies Reas.: -Land use restriction, preserve neighborhoods where family values, youth valueswholesome family living -fairness—FHA generous interpretation, want to make exceptions VERY narrow -remanded to see if the city made “reasonable” accommodations Rule: Who may compose a family is not a max occupancy restriction exempt from FHA, but Pro NAACP: -Enabling Acts—town can’t do anything state can’t do -need to look outside municip. As well, should pay for regional fair share of housing needs -can’t foreclose affordable housingzoning to protect tax base is unconst. -pushes out segment of population Moore v. City of East Cleveland Household composition -city filed criminal charges and fine alleging Moore in violation of city ordinance by living w son and 2 grandkids -city ordinance defined family -limited occupancy of dwelling to members of single family, but had unusual and complicated definition of family Whether city’s housing ordinance violated 14th Am. Due process clause? Yes, attacked intimate right of association (family) -family is an integral part of American history/tradition Intimate right of association—cannot strictly define family so as to prevent family members from living together. Pro Town: -sheme provides for general welfare by keeping property taxes low -increased property taxes effect property values (in a negative way)—Stoyanoff zoning with an eye for property taxes Jones v. Lutken Non-conforming use -Portable cabins on property -Jones owned land and used it commercially for convenience store, RV campground prior to zoning ordinance -granted non-conforming use -decided to display port. cabins Whether the cabins constituted a continuation or an extension of non-conforming use? Continuation -continuation and is permissible Zoning ord., great weight given to local authorities in constructing words. Arg. rather a household composition rule and FHA applies. Pro CityPro Ox House-denied but passed -FHA illegal to ordinance listing GH discriminate against as permitted in handicap, illegal to multifamily and gen refuse to make commercial zones reasonable -Family comp rule is accommodation to w/in FHA’s afford = opp., alleges exemption for max city didn’t make occupancy reasonable accom. By restrictions--caps 5 allowing them to unrelated people remain in single fam allowed to live in -financially and single-fam dwelling therapeutically viable to have 8-12 residents Pro City-effect of ordinance is to limit financial burden on school system -kids are parasites (spending $) -Euclid Apts—lead to more traffic, congestion, etc. Bell Terre—7 college kids wanted to live together despite city ordinance prohibiting, ordinance upheld, didn’t Pro Moore-Not all families fit same easy definition -intimate right of association -contrary to public policy Pro Jones-Comm op., nonconforming use is commercial operation, therefore placing cabins is a mere continuation of comm op. -1st in Timenonconforming use, eminent domainstate can take back when imperm. Pro Homeowners-J had RV park and nothing else -port. Cabins are not RVs -impermissible expansion Eminent Domain Takings Clause-V Amendment, applies to state via Due Process clause of 14th Amendment (AGov. ex. State park, ACommon carrier ex. RR) AB cannot give)—solves a lot of practical problems and eliminates monopoly power (people holding out) 1. Public use (Kelo v. City of New London-econ. Development if 1. Comprehensive plan, 2. Thoroughly discussed and debated) 2. Just compensation—fair market value Kelo v. City of New London Economic Development Plan Facts: -city designed econ develop plan for distressed city -included marina, shops, new residences, office spaces -Pfizer was going to open plant creating jobs Issue Whether the city could take land from AB for commercial purposes? Holding: Yes, AB as long as in larger public use, good Reas: -econ develop plan is comprehensive and thoroughly debated -Constitution & States Const. can be amended to declare econ development against public use -deference to legislature (institutional competence) Rule: To satisfy Takings Clause, econ develop plan must be for 1. Public use (a. Comprehensive b. Thoroughly discussed & debated) 2. Just compensation—fair market value Contract of sale/P&S agreement- RISK IS ON SELLER 1. signed-by party to be bound 2. describe-real estate 3. price-stated Exceptions: o part performanceallows special enforcement of oral agreements, paying all or part of purchase price or making valuable improvements o estoppelunconscionable injury would result from denying enforcement of oral contract after 1 party relied on contract, unjust enrichment (break word—Green can turn around and ignore contract and get wealthier from another buyer) marketable titletitle not subject to reasonable doubt as would create a just apprehension of its validity in mind of a reasonable, prudent man o free from encumbrances (any interest/right in property held by someone else) o APs have good/marketable title because title is free from encumbrances (but, not in writing—SOF), need to have court quiet title and record E-communicationsE Sign Act 2000, electronically, sufficient to satisfy SOF Specific performance—court makes parties adhere to terms of contract Doctrine of Equitable conversion—buyer is viewed as owner from date of P&S agreement signed, seller has right to $, Holds “legal title” Between P&S agreement and closing Risk of loss, often w buyer unless specified by contract Caveat emptor-req. buyer act prudently to assess character/fitness & value of his purchase & bars purchaser who fails to exercise due care from seeking equitable remedy of recission Exceptions: confidential relationships, active concealment (sellers take steps to actively hide defects), affirmative misrepresentation (lie), partial disclosure (ex. Leak in living room but not in kitchen, half-truths) Stambovsky exception: 1. seller creates condition (reputation that house is haunted) AND 2. condition materially impairs value of contract AND 3. Condition is uniquely in knowledge of seller/uniquely in knowledge of seller/unlikely to be discovered by buyer exercising due care Erosion of Caveat Emptor—majority of states now require seller to disclose all known defects A. OBJ Test-whether reasonable person would attach importance to it in deciding to buy B. SUBJ Test-whether defect affects value of desirability of property to buyer Professional sellers have duty to disclose off-site and on-site defects that can affect habitability, use, and enjoyment of prop. Trend is statutory—what seller must disclose: structural defects, soil problems, violations of building codes, neighborhood nuisance, underground storage or sewage tanks, presence of hazardous materials, unpermitted changes Stigma statutesprotects sellers from failing to disclose psychological/prejudicial factors that might affect market value ex. Murder in house Loehmeyer v. Bower Marketable Title Hickey v. Green SOF Stambovsky v. Ackley Duty to Disclose Defects Facts: -buyer suing for recission of contract after zoning ordinance violations/RC found on land -zon ord house had to be 3ft from prop line, house was 18in -RC house had to be 2 stories -house newly on prop (5 yrs) Issue: Holding: Can buyer rescind contract? Yes, unmarketable, exposes the buyer to hazards of litigation Reasoning: -to comply w RC, seller would have to build another story, which would alter the prop in such a fund way as to break notion of what buyer is buying, subst different -not rescinding contract would force buyer to buy sth he didn’t want -exposes buyer to hazards of litigation (encumbrances)unmarketable -P&S agreement—give seller reasonable time to remedy defect Rule: Unmarketable title exposes buyer to hazards of litigation and to purchase something fundamentally different than they originally set out to purchase. Closing: RISK IS ON BUYER Deed -Green owned land, oral agreement on $15,000, Hickey wrote deposit check, Green never signed it nor cashed it -relying on sale, Hickey put house up and entered into negotiations w buyer -Green turned around and told Hickeys she no longer intended to sell prop to them, but found another buyer for $16,000 What happens w oral contract? Equitable remedy -P’s house was allegedly possessed by ghosts, seen by D seller and members of her family -D had even promoted the reputation in an article -D did not disclose that the house was haunted to the buyer -If Hickeys have to sell their housespecific performance (continue w terms of contract) and reliance on agreement, if Hickeys don’t have to sell their houseSOF rules -Seller profited off of reputation/promoted repuation -not a part of normal inspection (ghosts are not a normal routine check) -assumes house value decreases due to haunted naturenow could be a profitable thing -meticulous search would not reveal presence of ghosts -seller created and perpetuated condition about which buyer is unlikely to even inquire, enforcement of contract is offensive to court’s sense of equity - Paying part of purchase price, partperformance (court becomes convinced that contract exists) Reasonable reliance on the contract has so changed his position (silence by D) that injustice can be avoided only by specific enforcement. Whether contract can be rescinded. Yes, contract can be rescinded. Stambovsky exception: 1. seller creates condition (reputation that house is haunted AND 2. condition materially impairs value of contract AND 3. Condition is uniquely in knowledge of seller/uniquely in knowledge of seller/unlikely to be discovered by buyer exercising due care 1. General Warranty Deed-provides greatest degree of protection, warranting title against all defects in title, whether they arose before or after the grantor took title 2. Special Warranty Deed-next in terms of degree of protection, contains warranties only against the grantor’s own acts but not Against the acts of others (if defect is mortgage on land executed by grantor’s predecessors in ownership, grantor is not liable) 3. Quitclaim deed-No warranties of any kind, merely conveys whatever title grantor has, if any, and if the grantee of a quitclaim deed takes nothing by the deed, the grantee cannot sue the grantor (for family or someone you trust) Brown v. Lober (Bosts) Ps brought suit against Lober (executor of grantor’s estate) for damages for breach of covenant of quiet enjoyment. OG owner of 80 acres conveyed to Bosts reserving 2/3 interest in himself for mineral rights BostsBrowns by general warranty deed containing no exceptions Browns contracted to sell mineral rights to Coal Co. but later found out that they only owned 1/3 of mineral rights, so had to renegotiate contract Prior grantor never made attempt to exercise his mineral rights—10 yr SOL barred suit on present covenants PH: Trial court—D, App Ct. Reversed, SC Reversed (found for D) Issue: Whether Ps have alleged facts sufficient to constitute constructive eviction? Holding: Yes Reason: -no one had attempted to remove mineralsno breach of cov of quiet enjoyment -Cov of seizin was breached when BostsBrowns, grantor warranted that he owned estate he was purporting to convey (but SOL had run) -Cov of quiet enjoyment—protects from someone interfering w land possessioncourt rejects argument: haven’t been disturbed (requires owner 2/3 interest try to take it) -Browns could AP mineral rights—would have to actually enter 2/3 mineral estate -Browns have limited options (P&S agreement—many options, but CLOSING—signed deed, buyer has limited recourse, buyer can only claim violation of 1/6 covenants -10 yrs after buyer decreases chance against seller, only if someone comes and disturbs possession Rule: P/R: Facts: O Bosts 2/3 1/3 Browns 1/3 *Browns could only convey what they actually had (stepped into shoes of Bosts) Present covenant s—SOL runs Future covenan ts-SOL doesn’t run until breach Covenant of Seizin—grantor warrants he owns the estate he purports to convey Covenant of right to convey-Grantor warrants he has the right to convey the property. It’s possible that a person has the covenant of seizin but not the right to convey Covenant against encumbrances—grantor warrants that there are no encumbrances on the property. Encumbrances include (mortgages, liens, easements and covenants) o Except for RC that were recorded or that buyer knew about Covenant of general warranty—grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title Covenant of quiet enjoyment—grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title. (Identical to Covenant of general warranty) Covenant of further assurances—grantor promises that he will execute any other documents required to perfect the title conveyed Title Assurance-Recording System Recording System, indexes grantee/grantor, tract index (by parcel) Why record?deed, interest in land, needs to be written and filed in land office (public document, repository of documents that people may need, of high importance, incentive to record gives protection for BFP who pay consideration ($)—gives superior title to those 2nd in time rather than under CL (1st in time) NO PROTECTION FOR DONEES 2ND IN TIME Bona fide purchaser for value (BFP for value)—innocent party who purchases property without notice of any other party’s claim to the title, they must pay for part or all of property Types of Recording Acts: 1. Race-1st person to record, Want to incentivize people to record, fairness of race jurisdiction Jul AB Dec AC Under CL B would have superior title, but if C records first they are protected by Recording Act. 2. Notice-subsequent bona fide purchaser has priority if they have no notice of prior conveyance/deed Key Q is whether C has notice of deed to B If NO notice, C has superior title bc protection of Recording Act 3. Race-noticemust record first and have no prior notice of the previous conveyance, incentivizes people to record AND penalizes those who had notice of the prior conveyance by preventing them from gaining protection of Recording Act Key Qs: o Who recorded 1st? o Whether C has notice of deed to B? If C recorded 1st and had NO notice of deed to B, then they are protected by Recording Act. Luthi v. Evans Messersmith v. Smith Indexes -Owens conveyed interest in number of oil/gas leases in country to D International Tours -Assignors lawful owners of and have good title free and clear from any encumbrance/liens/adverse claims -Owens also owner of interest in oil/gas lease Kufahl lease located in the same county, later conveyed to Burris (who checked the records and deeds—prior conveyance didn’t show up) Facts: Issue: Holding: Reas: Rule: Whether recording of Mother Hubbard Clause to describe property conveyed constitutes constructive notice to a subsequent purchaser. No—no constructive notice, Burris ended up w deed -Clause OwensTours deed was too general, didn’t turn up information in recording office -Court chooses against person who could have protected themselves (could have been more specific about Mother Hubbard Clause—affidavit that listed ALL leases purchased -Purchaser protect yourself—don’t use catch-all clause Specific description of property conveyed is required in order to impart constructive notice to subsequent purchaser. Proper Recording -Frederick Messersmith and Caroline Messersmith record title owners -Quitclaim deed from CarolineFrederick (nephew) -Caroline later conveyed to Smith mineral deed warranty of title ½ interest in oil/gas/minerals and deed was recorded -deed conveying to Smith was torn up because of incorrect pronouns, and new deed drawn up and “signed” over the phone, so not officially notarized. Who has superior title? Frederick has superior title. -Frederick didn’t recordperhaps as a substitute will, probably for future not present -deed is valid w/o signature of notarymany deeds must be notarized before recorded CSmithSeale, Smith deed wasn’t notarized (signed in front of notary) Recording of an instrument affecting title which does not meet statutory requirements of recording laws does not constitute constructive notice. Mother Hubbard Clause—leaves grantor with nothing more to convey Notice: 1. Actual notice-prior knowledge 2. Record/Constructive notice-instrument was properly recorded and is available in recording office, prospective purchaser is charged with knowing 3. Inquiry notice-Reasonable buyer would have been put on notice to ask further questions R: Document in recording office but CANNOT be found through usual search procedures does NOT provide constructive notice Chain of Title Problems Board of Education of Minneapolis v. Hughes Race-Notice Lewis v. Superior Court Race-notice Facts: -Hoerger owned lotHughes who paid $25 for lot -deed left grantee name blank -Did not record or fill in his name until 4 years later -HoergerD&W in meantime, and was recorded just after HoergerHughes deed Issue: 1. Did deed from Hoerger to Hughes ever become operative? -Yes, implied authority to fill in grantee name 2. If so, is he a subsequent purchase whose deed was first duly recorded, within language of recording act? Hughes owner of lot. Holding: Reas: -when grantor sent over blank deed for grantee space, grantee had implied authority to fill in grantee name -as soon as he filled in his name it was valid (issue of not having any witnessesrelying on his own state of mind) -Hughes BFP for value when deed signed -Hughes recorded first and had no notice of other agreement from HoergerD&W Rule: R: Document in recording office but CANNOT be found through usual search procedures does NOT provide constructive notice Cheapest cost avoiderpenalizes person who could have more easily avoided the harm -Fairness -Efficiency/instrumentalism—time consuming, easier to have person most easily able to avoid the harm to do so POLICY: -Lewis contracted to buy residence from Shipley for $2.3 million, Lewis’ opened escrow and a few days before they acquired title, Fontana Films recorded lis pendens (notice of lawsuit affecting title to property against Shipley) -Lis pendens was not recorded fully (recorded AND indexed) until the day after Lewises acquired title -Lewises paid down payment $350,000 and closed with a note they would pay 1.95 million -Lewises spent $1.05 million renovating the house in the next year and then they learned of Fontana Films lawsuit Can Lewises gain protection of the recording act? Record 1st Title w/ NO notice Yes, the Lewises are protected by the recording act. They acquired title the day before the Fontana Films lis pendens was recorded fully (recorded AND indexed). And they had no prior notice of lis pendens. -Distinguishes an older case Davis v. Ward, court RejectsTimes change, outdated rule, no longer suitable for modern times -Now > $ and most people have to finance their purchase, instead of using a bank to finance, the Lewises used the seller, they shouldn’t be at a disadvantage from others who finance through mortgage/bank -Reliance on previous house—remodeling house (a lot of reliance and $), Mund v. English—Easement by Estoppel -Willard case—Church parking (easement in 3rd party, stranger to deed, reliance) -Hickey v. Green-SOF part performance, reliance by purchaser R: Document in recording office but CANNOT be found through usual search procedures does NOT provide constructive notice Waldorff Insurance and Bonding, Inc. v. Eglin National Guillette v. Daly Dry Wall, Inc. Bank Facts: Issue: Holding: Reas: Inquiry Notice -Choctaw constructed condosWaldorff for Unit 111 -Waldorff occupied unit, furniture, and continually occupied for 1.5 yrs (paid monthly maintenance fees, garbage and repairs) -Choctaw mortgaged the property twice to Eglin bank -Choctaw was client of Waldorff and in return for cancellation of debt owed by Choctaw to Waldorff, Waldorff wrote off debt and Choctaw executed quitclaim deed to unit 111 in favor of Waldorff -Many of condos were occupied Is Waldorff’s interest in prop > two mortgages held by bank? Yes, Waldorff’s claim is > Eglin bank. -Waldorff is 1st in timeP&S agreement -Doctrine of Equitable Conversion-Buyer has equitable title to land 1. Waldorff 2. Bank (to gain protection of recording act, they would have to prove they had NO notice) -court charges them with inquiry notice (purchaser should have asked questions -furniture in unit, should have inspected property -Waldorff was open, visible and in exclusive possession of unit at the time of the mortgages Rule: Actual possession of real estate is sufficient to a potential buyer and all the world of the existence of any right which the person in possession is able to establish. (Inquiry Notice) Constructive Notice Ps owned 3 lots in subdivision and their deeds contained restrictions, sued to enjoin D owner of another lot in subdivision from constructing apt complex -Daly received building permit to construct apt building, the deed they had received had no mention of restrictions Is D bound by restriction contained in deeds of its neighbors from a common grantor when D took w/o knowledge of restrictions and deed did not mention? Yes, D is bound by restrictions on neighbors deeds. -Daly is bound—when buyer wants to purchase land subdivided by common grantorOBLIGATION to check all neighbors deeds to find restrictions -Daly charged with constructive notice -As purchaser of part of the restricted land, D took subject to restrictions Pro Daly—no notice of deed, not written in its deed and it did a thorough title search and nothing came up—IMPOSSIBLE task of title searching each and every deed Pro Guillette—reliance, Ps bought property relying on benefit (single family houses) if the restriction is not imposed it is unfair for those who purchased because of the reliance on the restriction—NOT IMPOSSIBLE When buyer wants to buy land/property that has been subdivided by common grantor they have an obligation to check all neighbors’ deeds to find restrictions. (Constructive notice)
