Semester Overview
-Transfers of land (ch. 7)
-Title Assurance
-Nuisance
-Servitudes
-Zoning
I.
K OF SALE
a. General rule is K does not end when 1 party dies
i. A buyer should add a clause of what happens if one of the buyers dies
b. You want to make sure the K says good title “of record”
1. Some K’s just says good title, not good title of record.
a. Good title could be had by adverse possession.
i. this is not as marketable as good title of record
c. Read K carefully and decide if you want to modify it before you sign it
i. Paragraph for Attorney modifications
1. you could wiggle out of the K this way
ii. A K should say “subject, however, to all restrictions and easements of record.”
iii. You must put these words in your K---- “time is of the essence.”
1. If these words are added, seller has to provide good title at the closing.
iv. Make sure you put in K that the seller has to keep ins on the prop until closing
Merger applies to SOF and marketable title, and they can’t be sued on once closing has occurred.
Merger does not apply to failure to disclose. This can still be sued on, even after closing
MARKETABLE TITLE- generally implied in a K, but very often it is expressed in K
II.
Lohmeyer case
a. Problem 1: private: restrictive covenant saying house had to be 2 stories
i. majority rule: the mere existence of a private covenant makes title unmarketable, unless it is waived in the K
(thru a clause saying, “subject to restrictions of cov”)
1. minority. rule: if private cov known by buyer, or obvious, it doesn’t make title unmarketable
b. Problem 2: public: Zoning ordinance problem- house was too close to lot line
i. this is not found on the deed, you have to search this out
1. Rule: the existence of a zoning ordinance doesn’t make title unmarketable
a. a violation of the oridnance does make the title unmarketable.
Existence
Violation
Restrictive covenant, sewage
Mere existence makes title
Violation makes title
easement, utility lines (private)
unmarketable (unless buyer
unmarketable
waives in K)
Zoning laws, ordinances (public)
Has no effect on title
Violation makes title
unmarketable
ii. Conklin v. Davi-The title rested on AP. Does this make title unmarketable? No.
1. They still had good title, just not valid title “of record”
2. you must put in the words “of record” and then Adverse Possession won’t work.
a. (ask Knap: is title still marketable if “of record” is in K? but just not allowed under K?)
3. The seller can fix the problem with the title, and can take as much time as they need, until judgment
a. unless the K says “time is of the essence.” If these words are added, seller has to provide
good title at the closing.
iii. Equitable conversion:
1. Buyer owns prop from the date K is signed, and carries the risk of loss.
a. For the seller’s estate, the moment they sign K it is considered personal prop.
i. What if the house burns to the ground before the closing date? The buyer is
responsible.
ii. However, if the seller has ins., then he must credit the buyer.
2. Hypo: Seller’s will says “all my real prop to my Daughter and all my personal prop to my Son.”
a. Seller signs K to sell prop on March 1, Seller dies on Apr 1, and closing is to occur on May
1.
i. the fact the Seller dies does not void K
ii. on Mar. 1st, the buyer gets house b/c of equitable conversion
b. Who owns what when Seller dies?
i. The Son gets the cash for the house, b/c cash is considered personal prop.
c. DUTY TO DISCLOSE DEFECTS (broker has same duty as seller)
i. Minority 1- caveat emptor- “let the buyer beware”; no duty to disclose anything
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ii. Minority 2- NY exception - haunted house (Poltergeist)
1. Applies to condition that does not involve the physical condition of premises
a. ex. Ghosts, murder happened there, etc.
2. What we need is:
a. seller created the non-physical condition
b. it materially impairs the value of the K
c. it’s within the knowledge of the seller and unlikely to be discovered by the buyer exercising
due care
i. If seller doesn’t disclose, then buyer can rescind
iii. Majority- water gushing in around windows case
1. seller has a duty to disclose when they
i. know of a latent defect
ii. that materially impairs the value of the prop
iii. which is not readily observable to buyer
b. materially? Whether it affects the desirability of the prop (Cts split: Some juris say
objective (reasonable person) std, some say subjective
iv. Where is the law going?
1. You have to disclose about physical problems, but also things that affect premises, such as
neighborhood noise.
a. a seller probably doesn’t have to disclose that they live on a busy street, b/c the buyer could
figure this out
2. The law is starting to move to having to tell of problems near the prop, such as a hazardous waste
dump nearby or a sex offender who lives in neighborhood.
DOCTRINE OF MERGER- once the sale goes through and the buyer accepts the deed, the K merges into the deed and that means you
now sue on the warranties of title in the deed, and not on the K (not of SOF, Marketable Title)
Suits on the K (this is before deal closes)
Statute of Frauds
Marketable Title (can be implied)
Duty to Disclose
Once the deal closes, the buyer accepts deed, we have Merger, and you have to sue on:
-IWQ
-6 Warranties of Title (these are always Express)-also, you can still sue on Duty to Disclose
III.
DEED
a. THE 6 WARRANTIES (always express)
i. Covenant of seisin
1. Grantor says he owns prop he is conveying
ii. covenant of right to convey
1. grantor says he has the right to convey prop
a. sometimes you can own (#1) and not be able to convey (like in a trust)
iii. covenant against encumbrances
1. grantor says that there are no encumbrances on the prop (mortgages, liens, easements, and covenants)
iv. covenant of general warranty
1. grantor says 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
v. covenant of quiet enjoyment
1. grantor says that the grantee will not be disturbed in possession and enjoyment of the prop by
assertion of superior title. (often synonymous with general warranty)
vi. covenant of further assurances
1. grantor promises that he will execute any other docs required to perfect the title conveyed
a. ex. File mechanics lien
i. first 3 are called present covenants- a present covenant is broken, if ever, at the time
the deed is delivered
ii. The second 3 are called future covenants- a future covenant is not breached until the
grantee or his successor is evicted from the prop
iii. Remedy for 1-5 is money, but for 6 it is usually specific performance
General Warranty deed- covers all defects; contains all 6 express warranties
Special Warranty deed- -“grantor warrants that the he has not done or suffered anything whereby the premises have been encumbered in
any way”-contains only #3, covenant against encumbrances
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Quitclaim deed- contains no warranties of any kind--says that buyer gets what seller may or may not have
-used in inheritance cases, when you have a straw, and for probate or foreclosure cases
Forgery: a forged deed is void
-grantor whose signature is forged on deed prevails over all, including subsequent bona fide purchaser
Fraud: a deed procured by fraud is voidable
subsequent bona fide purchaser (who purchased from a grantee who was fraudulent in acquiring from the grantor) who is
unaware of the fraud prevails over the grantor
A CQE (cov #5) is breached only when someone claims superior title
--Brown v. Lober- The Bosts sold land to the Browns, but conveyed only a one-third interest in the mineral rights b/c the prior
owner had reserved a two-thirds interest in mineral rights for their selves. Brown’s tried to sell their mineral rights, but could
only sell for 2k, not 6k, b/c they only owned 1/3.
-Browns couldn’t sue for breach of the covenant of seisin (which they would have won) b/c the SOL had run. So they
tried to sue for breach of the covenant of quiet enjoyment, b/c SOL doesn’t start until the covenant is breached
-Rule: A CQE can be breached by constructive eviction, where the owner’s right of possession is interfered with
(someone asserting superior title)
-**One way a person can be constructively evicted is by being forced to buy the superior title to keep from
actually being physically evicted from the prop**
SOL for General Warranty Deed
-For present warranties, the SOL starts on day you get deed
-For future, SOL starts day it is breached
Covenant against encumbrances (#3)
-Frimberger-After purchasing prop, Pl discovered that the home violated state environmental protection statutes (encroached
tidal wetland boundaries)
-What is an encumbrance?
-a financial charge against prop, such as mortgage, judgment lien, tax lien, or assessment
-these you could find on title search
-estates or interests in the prop less than the fee, like leases, life estates or dower rights
-you would not find out with title search
-easements or servitudes on the land, such as rights of way, restrictive covenants and profits
-except: Public easements that are visible, open, notorious and in public use do not violate the
covenant against encumbrances, b/c of caveat emptor and it is already reflected in the price
-Land use or zoning statute: split
-Majority: Frimberger, violation of land use statutes or a zoning statute are not considered an
encumbrance
-Minority: Bianchi- violation of building restrictions and zoning are encumbrances
b. Septic system didn’t comply with building code, and the septic system broke and cost buyers
40k to repair.
2. What about the misrepresentation allegation:
a. Innocent Misrepresentation
i. representation of material fact
ii. purpose is to induce buyer to buy prop
iii. purchaser has to prove misrepresentation is untrue
iv. there must be reliance by Pl
v. there must be damages
1. Hypo: What if Frimberger finds out 2 years after the sale that there is an
unreported easement on the prop and the seller didn’t know of easement?
(innocent misrep can be sued on)
a. Now Frimberger can sue, b/c there is a representation (warranty
3), it induced, etc.
b. If you have a valid suit on warranty 3, then you can also sue for misrepresentation
Majority rule- warranty of seisin does not run with the land, so only the buyer in privity can sue
-Minority rule- warranty does run with the land, so remote buyer can sue
-chose in action is a personal right to sue that is not attached to the prop, so possession is not necessary
Damages: Generally speaking, when someone violates the covenant of siesin, you can only get what the deed
says the grantor was paid
-Parol evidence rule: says the amount listed in the deed is the amount, and you can’t prove otherwise
with oral evidence
3 things we should know about the breach of the 6 warranties
b. What kind of deed the person has? GWD, QCD, SWD
c. The present covenants are broken on the date deed is delivered
i. Majority: Only the grantee in privity with the grantor can sue on the present covenants
1. The right to sue (chose in action) doesn’t run with prop
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a. Minority: the right to sue (chose in action) does run with prop
ii. SOL starts on day deed is delivered
d. Future covenants are assigned to remote grantees (do run with prop)
i. How much the grantor received on prop originally is the max that a remote grantee can recover
Estoppel by deed: if a grantor gives a deed, but doesn’t have title, and later gets title, he is estopped from claiming that he has title later on
if A sells to B, but doesn’t have title, and then later gets title, A is estopped from claiming ownership, and B has title
DELIVERY OF DEED
-Intent to give something NOW (but can be a future interest)
-actual or constructive delivery (must be put beyond the grantor’s reach)
-you can give the deed to a 3rd party to hold, but it has to be an irrevocable escrow
-irrevocable escrow is valid delivery, but revocable is not
-acceptance
MORTGAGE V. INSTALLMENT LAND K
e. Mortgage
i. A loan for real prop secured by a lien
ii. 2 things required:
1. a note: an IOU saying the schedule of payments, how much you borrowed
2. a mortgage: the bank becomes a secured creditor, and the asset (the house) secures your debt
a. Majority allows the lender to create a deed of trust: the borrower conveys title of the house
to the trustee to secure the debt (so this makes the foreclosure easier; the trustee can sell w/o
going to court: no judicial foreclosure needed)
iii. Mortgage hypo: Bob and Betty buy a house
1. their 1st mortgage = 75k
2. their 2nd mortgage= 15k
3. the house forecloses and brings 50k. How should this be distributed?
4. all 50k goes to their 1st mortgage
5. can the lenders get the rest of their money?
a. we ask, “is this a fair price?”
i. if it’s a judicial sell, the ct will say yes, b/c they already approved it
ii. if a private sell out of a deed of trust, the court will ask if it is a fair price?
1. also, the court will look and see if there is an anti-deficiency statute, which
says you don’t have to pay the deficiency for your primary residency
iv. Lender’s Duties during a foreclosure
1. comply with the statutes
2. exercise due diligence
a. make a reasonable effort to obtain a good price
i. the prop should be sold in same manner as other properties in the neighborhood
(advertise, open house, get a realtor)
3. operate in good faith
a. intentional disregard of duty or purpose to injure would be bad faith
4. Murphy v. Financial Development Corp.
a. In this case, the bank should have set a minimum price, could have waited until another day
to have the sale, could have ran other ads in a regular newspaper; this would have been due
diligence
b. Even if a D complies with all the statutes, he may still be liable b/c of the duty to exercise
due diligence as well as the requirement to operate in good faith
c. Measure of damages:
i. if bad faith, damages = FMV minus the price obtained at foreclosure sale
1. fair market value is typically a range given by an appraiser
2. court usually takes the average of the range
ii. if good faith, but no due diligence, damages = fair price- the price obtained at
foreclosure
1. fair price is probably the bottom of the range of the FMV
iii. When do you use the standard that the price shocks the conscience?
1. if the only thing I have is the price is too low (and the D complied with all
3 elements)
a. this is very hard to show; the price must be really, really low
d. Why are the banks often the only bidders in a foreclosure sale?
i. notice may not be adequate to get sellers
ii. the bidders have to pay cash
e. If you are the buyer on a foreclosed land, you need to watch out for the right of redemption:
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i. in some states, the original owner can buy back the prop for a preset price for a
limited amount of time.
Installment Land K’s- seller acts as lender
-seller retains legal title to the prop throughout the duration of the entire K
-unlike mortgage, where the bank has a lien, but buyer gets title
-will have a “time is of the essence” clause that says if buyer defaults, the seller can retake and the buyer has to move out and everything
that had been paid becomes rent, and liquidated damages
-no state will automatically enforce this clause
-Bean is minority view- 6 states and Restmt.- basically treat like a mortgage. They give the borrower equitable title, and
make seller foreclose, follow statutes, use good faith and due diligence.
-Exception is when the buyer has abandoned or only paid a minimal sum, then the seller doesn’t have to treat it like
a mortgage and doesn’t have to foreclose
-the majority of the states proceed in equity (they do what is fair)
-give the borrower the right to pay the entire amount and get title. Depending on the facts, they may reward
restitution or demand forfeiture
-in some states, if seller accepts a late payment, then he automatically gives up his right to the forfeiture
clause, for this payment and all payments in future
RECORDING SYSTEM
INDEXES-2 types
1. tract index (only in about 6 states)
a. indexes docs by a parcel identification number
2. grantor/grantee index, aka Name Index
Grantee index- all instruments are indexed under the grantee’s name
Grantor index- all instruments are indexed alphabetically and chronologically under the grantor’s name
-Start with the grantee’s index and search backwards. Then come back forward through the grantor’s index
RECORDING ACTS
The recording acts generally don’t affect the validity of a deed.
-a deed is valid and good against the grantor upon delivery w/o recordation
Recording act: says county will maintain land records
-So why record?
1- allows people to search for ownership
2-to preserve a safe copy in a safe place
3- protects later purchasers from prior unrecorded interests
-this is an exception to 1st in time: if you are a bona-fide purchaser(without notice) and another prior person claims an
unrecorded interest, then you are protected.
What doesn’t recording do?
-If the county office mis-indexes something, then you can’t sue them b/c of sovereign immunity
-Majority rule is government doesn’t make any representations about the document. They are not saying it is valid.
-also, adverse possession doesn’t show up, either might a short term lease or a mechanics lien.
Hypo: 7 leases are conveyed from Owen to Tours on 2/16/71, and the 7 leases are in the deed, including the Wiley lease
-however, the recordation omits the Wiley lease, b/c of misrecordation (which was one of the 7 leases conveyed) from the index
-In 1975, the Wiley lease is conveyed from Owens to Burris
So how would Burris go about searching?
-first, he would go to the grantee index. He would look up Owens. He would find whomever the grantor was that sold to Owens.
-However, once in the grantor index, you would find that Owens had sold a lease to Tours. However, he wouldn’t see the Wiley lease, b/c
it was omitted when recorded.
-but in this case, the Wiley lease was specifically described, it was just misrecorded.
-This is the general rule: if a buyer can’t find the doc b/c it was mis-indexed, he is out of luck, and doesn’t own the
land. The 1st in time owner owns the prop.
Exception is if a statute says otherwise: a bona-fide purchaser w/o notice
-In CA,. The bona-fide purchaser trumps, unless he had actual notice.
General Rule: 1st delivery in time wins
-exception: if a statute says otherwise
CHAIN OF TITLE/PERSONS PROTECTED
6 new rules
1. notice statute- You are protected if you are a subsequent purchaser who takes w/o notice of prior transfer
- (if you inherited or got it as a gift, you are not a subsequent purchaser)
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-3 types of notice:
-actual (if he knew of prior transfer), or
-inquiry (if he should have known)
-record
2. Race-notice statute- you are protected if you are a subsequent purchaser, w/o notice of prior deed (at the date of purchase), and
you recorded first, and all in the chain have recorded (this satisfies the Zimmer rule)
3. Shelter rule- if grantor is a bona fide purchaser protected by recording act, then grantee is in his shoes, and has same rights
4. Zimmer rule- subsequent purchaser is protected by a race/notice statute only if all prior deeds in his chain of title are recorded
5. Patent defect in an acknowledgement – if you have something wrong with the actual deed, then it doesn’t give notice and is
treated as if unrecorded and doesn’t give notice to subsequent purchaser (ex. There is no signature, or they sign the wrong line)
6. latent defect in an acknowledgement- this counts as notice to the subsequent purchaser
- A defect that requires extrinsic evidence to know there is a defect (evidence outside of the document itself) (what is an example
of this?)
-Messersmith- however, the court in Messersmith treated a latent defect like it didn’t give notice (so make sure you
mention this option on the test)
-If the statute says that you have to be a subsequent purchaser in good faith (or bona fide), that means you can’t
have notice of a prior deed on the land
Chain of title- wild deed
O to A, does not record
A to B, Records
O to C, C records
-so, does C have notice? He would look to O, and trace backward, and then forward back up to O. However, he would never see
the deed from O to A (b/c it wasn’t recorded), and the “Wild Deed” from A to B.
Board of Education of Minneapolis v. Hughes
5/06 Hoerger to Hughes
4/09 Hoerger to D & W (quit claim deed)
11/09 D & W to Board of Ed
1/10 Board of Ed records
12/10 Hughes records
12/10 deed from Hoerger to D & W records
we are in a race/notice jurisdiction:
-we need to know when Hughes purchased, so we know if he is a subsequent purchaser or not. The choices are 5/06 or 12/10. The court
said Hughes purchased when he filled in his name, in 1910.
Rule: if your name is not on the deed as a grantee, you can fill it in later, and the deed is not effective until the name is
legally inserted
So Hughes is now the subsequent purchaser, and he doesn’t have notice. He traces back ownership from Hoerger, and then back to the
present day. Since the deed from Hoerger to D & W was never recorded, then he will never see the Bd of Education recording, b/c it is a
wild deed. Hughes wins.
Can the Bd of Ed recover from Hoerger?
-possible fraud?
-also Unjust enrichment
-Ms. Hoerger sold the house twice, so she would have to pay restitution the amount she was paid by D & W
Chain of Title: Deed to lot A includes an interest in Lot B (such as saying you can only build a single family home)
a. General rule: no notice to subsequent purchaser of lot B
i. Exception in ½ states
1. where there is a common plan and same grantor, then the subsequent purchaser is on notice of every
other deed in subdivision (Guillette v. Daly Drywall)
example:
Guillette v. Daly Dry Wall
Issue: Do you have notice of an interest in an adjacent lot?
-Gilmore sold lots in subdivision. The original plan didn’t include the restrictions
-These people bought lots:
Walcotts- didn’t have restrictions
Guillette- restriction on deed said that the subdivision could only include dwellings for one family
Paraskivas- deed didn’t have restrictions
Daly- bought a lot and his deed didn’t have restrictions. The deed did say that there was a master plan. But the master plan didn’t have
any restrictions. Daly wanted to build apts.
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-Half the states say that Daly is on notice and has to check all the deeds in the subdivision
-if you are in a subdivision w/ a common grantor and a common plan, then the chain of title includes all horizontal deeds
-Half the states say Daly is not on notice, b/c Guillettes deed is not on Daly’s chain of title, and therefore he is not required to search out
all deeds in subdivision
- if this was in a tract jurisdiction, it still wouldn’t tell you where to look. So in ½ the states you still have to go look at the
individual lot’s deeds in the subdivision
Chain of title: estoppel by deed- A is estopped from denying that he had title
A to B, and B records
O to A, and A records
A to C
The question is who prevails, B or C? C is a bona fide purchaser, and he wins
Majority says C wouldn’t find the title from A to B, b/c this is a wild deed (B would get money damages from A)
-Rule: later acquired title, reported out of order, there is no constructive notice to subsequent purchaser
-Minority says that you have to search, and if you don’t find it you are stuck, so B would get it.
P. 705 2a
A to B, but doesn’t record
O to A, but doesn’t record
B to C, who records
A to D, who records (D is shown the deed from O to A)
O to E, who records
Who gets, C, D, or E?
E is subsequent purchaser.
Is he a bona fide purchaser w/o notice of prior deeds?
-In a notice jurisdiction, E would win, b/c he would look in grantor index under O, and not find any of the recorded deeds
-In a race notice jurisdiction, who would win, C, D, or E?
C is out, b/c under the Zimmer rule, C can only claim if every claim in chain is recorded.
D is out, b/c under the Zimmer rule, D can only claim if every claim in chain is recorded
So E wins in a race notice jurisdiction
#2b
O to A, but does not record
O to B, who knows of the deed from O to A and does not record (so B is not a bona fide purchaser)
O to C, but does not record
B to D, but does not record (D is shown the deed from O to B)
A records
B records
D records
-Who prevails in a notice jurisdiction? A, C, or D?
-D is subsequent purchaser. He purchases w/o notice since nobody had recorded
-Who prevails in a race-notice jurisdiction? A, C, or D?
-A is first to record, so he wins
If, after D records, A conveys to E, who promptly records, who prevails in a notice jurisdiction?
O to A, but does not record
O to B, who knows of the deed from O to A and does not record (so B is not a bona fide purchaser)
O to C, but does not record
B to D, but does not record (D is shown the deed from O to B)
A records
B records
D records
A to E, and records
E is subsequent purchaser
-if like Morse v. Curtis (pg. 703-4), then E doesn’t have the duty to search for a recorded conveyance to discover whether the
grantor made a prior conveyance recorded later, so E wins
-if Woods v. Garnet (pg. 704), (which says that a deed recorded late, after another deed from the same owner, gave constructive
notice to subsequent purchasers). So, the E has a duty, and then D wins
In a race notice juris, E wins
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Subsequent purchaser - anybody who gets prop interest for valuable consideration.
ie. bank/motgager, leesee –
-someone who is not a subsequent purchaser, ie inheretance, and gift
Daniels v. Anderson
J sold lot A to D. And J gives D the right of first refusal to buy lot B
Merger, when Buyer accepts the deed to buy lot A, the K to buy lot A merges into the deed
-Merger rule didn’t apply here, b/c the deed to lot B didn’t merge into A, b/c it was seller financed. The court said that Z wasn’t
the purchaser until he paid the full amount and got the deed.
Z buys lot B from J.
In order for Z to prevail over D, he has to be a bona fide purchaser w/o notice of D’s prior interest
Is J on notice of B’s interest in Lot B?
He is on actual notice, b/c D’s wife alerted him to the fact
However, he had received the notice after already paying part of the K price? So when did he buy the Lot B? The court said that Z
wasn’t the purchaser until he paid the full amount and got the deed. Therefore, Z is not protected, and D gets the prop, and has to pay Z
2 methods of what to do in this case: (Pro Tanto)
1 Daniels gets the land, and has to pay Z
2 Z gets the land, and pays the remaining money to Daniels
-Most courts go with option 1
Chain of title problems
1 wild deed
2 Early recorded deed
1997 B to X and X records (but B didn’t have title yet)
1998 A to B (estoppel by deed would give prop to X)
in 2000, B wants to convey to C, and C wants to make sure B has good title
-C would’t look in 1997. So a small majority counts the 1997 deed as a wild deed, so C would be protected as a subsequent purchaser. A
minority says it is not a wild deed, and C is on notice, so he is not protected.
3. The late recorded deed
1995 A to B, and records
1997 B to X, but not recorded
1999 B to C, and records
2001, X records
What if D wants to buy from C?
-he would check each year back from 2001 and find C got from B in 1999
- Morse v. Curtis, about ½ states say it is a wild deed, and D isn’t on notice, and would get prop
-Woods v. Garnett, about ½ states say that it is recorded, and therefore serves as notice, so D wouldn’t get notice,
-but he may be able to get under Shelter Rule
Notice: 3 types: 1) actual, 2) record, 3) inquiry
Actual -If you search title and find out of another title
Record-When do you have record notice? If the deed is recorded, but the subsequent purchaser hasn’t looked. (also includes any public
documents, including court judgments) (the fact that they are misindexed doesn’t matter, you are still on notice.
Inquiry - stuff you have to ask about.
-you are on notice for stuff you knew about, and stuff you should have checked about
-So if a buyer is buying an apt building full of tenants, the buyer has to ask the tenant what their interest is (lease, own, whatever)
-the prior quitclaim deed does not put you on inquiry notice!!! Just b/c it is quitclaim doesn’t mean it is bad
Marketable title acts: once title has been on record for 40 years, it is good, and anything before that is barred. Nobody can bring a claim
dating before that:
Any claims by the government are not covered, any visible easements are not covered, mineral rights are not covered
-so you will probably have to do a title search anyways
Torrens system:
The local gov’t searches your title and gives you a certificate of title (kind of like for a car)
Problems with this system
-a high initial cost
-title companies hate them, b/c that is how they make money
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-indemnity funds are expensive and impractical to run
-one big claim can wipe it out
Private Nuisance
key different between nuisance and trespass is in nuisance you balance the interests
-also, in nuisance, there are usually multiple Pl’s and the costs are high to go to court
-some have said we should merge nuisance and trespass
-Martin case- fumes from aluminum plant killing cows. They did this under trespass, and then did the nuisance
balancing test. This is out of step with most courts. They should have done this under nuisance.
-Morgan v. High Penn Oil Co.
Pl owned their home and a trailer park, then the D’s had an oil refinery about 3 football fields away, and it emitted
nauseating gases
Nuisance elements:
1-Conduct of D that causes a substantial and unreasonable
How do you know what is unreasonable?
-Jost (aka threshold test)-look at the level of the interference that results from the conduct (reaches the right threshold to
be a nuisance)
-or,
-Restatement (modern trend) gives 2 ways:
1-gravity of the harm outweighs the utility of D’s conduct, or
-factors relevant to the gravity of the harm (looks at pl’s use)
-extent and character of harm, the social value of the pl’s use, its suitability to locality in
question, and the burden on pl of avoiding harm
-factors relevant to the utility of the actor’s conduct are:
-its social value, its suitability to the locality in question, and the impractiacablity of the D
preventing its harm
2- harm is serious and D can afford to pay the pl and continue to operate without going out of business
2-Interference with the pl’s use and enjoyment of the land
3-Intentional
-D acts with the purpose of interfering with the Pl’s use or enjoyment of land, or
-D knows (knowledge) its conduct is interfering with the Pl’s use or enjoyment of land, or
-D knows his conduct is substantially certain to interfere with the Pl’s use or enjoyment of land
-Or, Neg., reckless or abnormally dangerous activity
In Nuisance, we balance the factors to determine whether there is a nuisance. Then we balance again to decide what the remedy is.
Usually, the fact pattern for nuisance is like smoke, fumes, odors, noise, and light. ---these are not a trespass in Majority
-Coming to the nuisance is not a defense
-the person who is causing the nuisance can’t say they are not liable b/c they were there first. However, coming to the
nuisance is a factor to be weighed
Halfway house hypo: People don’t want halfway houses in their neighborhoods b/c it lowers prop values and makes the neighborhoods
unsafe
-the halfway house isn’t causing any interference with pl’s use and enjoyment, it is only speculative; so the majority say
you can’t sue to enjoin them from opening the house to start with. Minority says you can sue to enjoin if there was
substantial grounds to feel insecure, and the prop values had gone down
-Once the house is there, you can sue for injunction relief or damages
Amphitheaters v. Portland Meadows
Drive-in movie theater that was being interfered with by an amusement park next door
-the drive-in was there first
-the court found no nuisance, holding that the conflict arose not from unreasonable conduct by the D but from the abnormally
sensitive nature of the pl’s use
Substantial and Unreasonable interference must be proven in an objective sense
-Exception is if it is done out of spite.-if the only reason D does something is to vex a neighbor, then this will be seen as unreasonable
Aesthetic nuisance is a loser. Courts don’t want to get into judging what is good/bad taste.
Remedies for nuisance can be past damages, future damages, or an injunction: (presumption is for injunction)
Schultz-loud air conditioner unit at an apt. complex. The pl lived right behind complex. They sued for an injunction and for past
damages. Past damages were 10k
-In Texas, the damages were limited either to damages or injunction. Here, the court went for the injunction.
-The pl established a nuisance.
-The court balanced the factors to figure damages:
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1-What is the injury to the D if the injunction is granted?
-they would have to shut down the apts, or pay 200k to put in new air conditioner
2-What is the injury to the public if the injunction is granted (this would be inavailability of apts. This was found not high in
Houston
3-What is the injury to the pl if the injunction is denied?
-noise, devaluation of prop
-The burden is on the D to prove that it is necessary to continue the nuisance at the expense of the neighbor’s use and enjoyment. The
burden is on the D.
-Normally, if a nuisance is found, the pl will get an injunction---unless the injury to the pl is slight
-Or Doctrine of Necessity: if the service of the D is necessary to the public, then the D will just have to pay damages.
Boomer v. Atlantic Cement Co.- Cement Company polluting neighbors homes and yards.
-So the court gives the injunction, but really tap danced. They said they would give the injunction, but it would be taken away when they
paid the neighbors all damages, past, present, and future. So when the damages were paid, the D had a servitude on the land, basically the
right to pollute those pl’s prop.
Spur Industries v. Del Webb Development
Private nuisance- small group of people -interference with the use and enjoyment of pl’s land
Public nuisance--an unreasonable interference with a right common to the general public
-examples: public heath, safety, peace, comfort, or convenience
-Pl in a public nuisance has to be someone that has special injuries or damages that are different in kind than that which
the general public has experienced
Del Webb brought a suit against the cattle lots, b/c people weren’t buying the houses
-Del Webb got to sue b/c he had a special injury different in kind
So here we have a private nuisance and a public nuisance
So we have to figure out if we need an injunction for a public nuisance
-What is the injury to defendant if the injunction is granted?
-here, the injury to the D would be having to move, and maybe additional transportation costs to get cattle to the city
-What is the injury to the public if the injunction is granted (or denied)?
-there is really no injury to the public if granted, but if denied, the health costs, smell, flies, etc.
-What is the injury to the pl if the injunction is not granted?
-there is an injury to the pl if the injunction was not granted, such as not being able to sell the houses
So the court granted the injunction
-Then they said that Del Webb had to pay for the move of the feed lot
4 Remedies court may give:
-give an injunction (Shultz)
-let the activity continue if the D pays damages (Boomer)
-let the activity continue by denying all relief
-give an injunction and make the pl pay damages (Del Webb)
-If D is there 1st, and Pl brought people to foreseeable nuisance, Pl pays in proportion to amount he is responsible.
-So what is the rule?
Del Webb brought people to the nuisance, to the foreseeable detriment of Spur, so he has to pay for the relocation.
Residential use is highest use. You can put a residence in commercial zoning, but not vice versa
Ways to solve this problem:
-Zoning is one possible way to solve this.
-Also, states have right to farm laws. Pl’s can’t sue for Nuisance of the farm.
-and of course, Nuisance
-Environmental Controls-regulation v. incentives
-regulation- prohibits certain activities, req’s installation of prescribed technologies, and sets standards of emissions
-Incentives- induce compliance----incentives are much more decentralized than regulation
-These stand in contrast to the law of nuisance, which is judicial in nature
Lateral support- imposes a duty on neighboring land to provide the support that the subject parcel would need and receive under natural
conditions; a cause of action arises when subsidence occurs or is threatened (checked by a geologist) and then it runs against the
excavator.
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-The pl has to prove that the land in its natural condition would have subsided. (Pl has to show the subsidence would have
occurred w/o his improvements (his house, ect.)) If Pl can’t show this, then he has to prove that the excavator was negligent.
Subjacent support is the same analysis- drilling, tunnels, etc.
PRIVATE LAND USE CONTROLS- EASEMENTS, COVENANTS, LICENSES, AND PROFITS
-Profit- the right to enter upon someone’s land and remove something connected to or growing on the land (dirt, sand, gravel; or crops,
timber); has to be in writing
-License-the right to enter and use another’s prop (revocable)---doesn’t have to be in writing
-Easement-the right to enter upon someone’s land (and possibly use as a right of way) (irrevocable)
-you also may have a right to do something on the land (Park, trim trees, run utility lines)
How do we create an Easement?
-a writing with essential terms signed by the weasel
-these are usually created by grant or reservation
-grant: from O to A (just grant somebody an easement to your land)
-reservation: the reservation is to grantor.
Majority rule: you can’t reserve an easement in a 3 rd party
-a grantor may not, in deeding real prop to another, reserve an interest in the prop to a 3rd party
Minority rule (modern trend): a grantor may, in deeding real prop to another, reserve an interest in the prop to
a 3rd party
Example of minority rule: Willard v. First Church of Christ, Scientist
-Ms. McGuigan conveyed the lot to Peterson, subject to easement for parking for the church (which was a reservation to a 3 rd party),
which was recorded.
-Peterson then conveyed the lot to Willard (with no mention of easement)
-Willard did have notice of the easement, however, b/c the lot was being used (inquiry notice), Peterson told him of it (actual notice), and
record notice, b/c it was recorded.
-the court allows the reservation to the 3rd party (in this case, the church)
So what type of easement is this?
2 Types of Easements: Appurtenant or In Gross?
1-Easement Appurtenant- attached to a particular parcel; has both a servient and dominant estate
-benefits the owner of the dominant estate in the use of his land
-in other words, the easement will benefit the owner of the dominant estate as long as he owns it.
-the benefit of the easement attaches to the dominant estate and runs with the dominant estate regardless of who owns
the dominant estate
2-Easement In Gross- not attached to a particular parcel; has a servient estate but not a dominant estate
-benefits the owner of easement w/o regard to ownership of land
-benefits the owner of easement regardless of which parcel of land he owns, or if he owns any land at all
-When facts are ambiguous as to whether the parties intent, appurtenant is preferred by courts over in gross
Dominant estate- the land that is benefited by the easement (in our example, the church)
Servient estate-the lot that is burdened with the easement
-Normally, an easement has to be in writing: However, there are ways around this:
1- Easement by estoppel
-Holbrook- consent, + foreseeable + substantial reliance (majority rule)
-Minority rule: does not recognize easement by estoppel (NY, TX)
fact pattern for 2 & 3 (common owner, one parcel then divided into 2 or more)
2- easement emplied by prior existing use (Van Sandt)- really looking at intent (notice and reasonable necessity: this is Majority
rule)
-in Minority, you need strict necessity
3-easement implied by necessity- (Other)
-majority: strict necessity, and existed/ arose on severance
-minority rule: reasonable necessity
-in implied by necessity, when the necessity is removed, then the easement ends
4- easement by prescription (like adverse possession)
-exclusive (but true owner can still be using; but you are asserting the right for yourself, but not that you have to exclude
the true owner)
-continuous
-hostile
-open and notorious
5- minority doctrine by statute in the West
-if you can prove by necessity, and then you have to pay for the easement
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(if you don’t have a common owner, you may have to use this instead of 3 or 4)
Exceptions to the requirement of a writing for the creation of an Easement:
When a License can become an easement (looking at ways around the SOF)
-License-the right to come on the land to do something or to cross the land (and it is revocable)-ex. Plumber or dinner
guest
-a license can become irrevocable when it is coupled with an interest like a profit
-a license can become an easement through estoppel
1-Easement by Estoppel-Holbrook v. Taylor
D owned land, and there was a private road on it that was used to haul coal off of the land. Then the D built a house on the land,
after the mine closed. Then the Pl used the road to carry the stuff in to build his house, and then used the road once his house
was built. Then the D stopped allowing him to use the road. Then the pl sued to be able to have the easement.
-So Pl had an oral agreement to use the road (which is a license, and this is revocable). However, he sued to turn the
license into an easement, which would be irrevocable.
-The holder of the serviant lot is Holbrook (D). The holder of the dominant lot is Taylor (Pl)
-Majority Rule-Elements
1- Servient owner consents to use (either expressly or implicitly) (this is a license)
2- Servient owner knows or should have known that the dominant owner would substantially change his position believing that the
permission will not be revoked
3- Dominant owner substantially changes his position in reliance on the consent given by servient owner
a. this can be shown by improvements either on the dominant lot or the serviant lot (which contains the easement)
-Minority Rule- some states do not recognize easement by estoppel (NY, TX, RI )
2-Easement Implied by Prior Existing Use
1-one prior owner of a single parcel
2-who had a quasi-easement (owner uses part of the parcel to benefit another part)
3-then owner sells off the part of parcel
4-Intent of parties (did grantor mean to include easement)
-construe against grantor
-you look at terms of writing
-you look to see if consideration was given in lieu of easement
5-the new owner had notice of quasi-easement (it was apparent)
6-continuation of the easement is reasonably necessary (majority) or strictly necessary (minority)
Van Sandt- the test is trying to find the intent of the parties
-look at :
-reasonable necessity (majority) (minority is strict necessity)
-how hard would it be to put a new right of way in?
-is the easement really necessary?
-for strict necessity, if you can build a million dollar bridge, then the easement is not
strictly necessary.
-notice (meaning quasi-easement was apparent at time the parcels were severed)
-a party has notice if an inspection would have found it
diagram:
Road
Lot 19
Lot 20
Lot 4
Pl
D
D
Van Sandt
Royster
Gray
Servient
Dominant
Bailey owned all 3 lots. Built a house on Lot 4, with a sewer line to the road running thru lot 20 and 19 to the road. Then Bailey sold to
Van Sandt (he should have sold to him in FSA reserving a sewer easement to himself, but he didn’t). Then Bailey sold lot 20 to Royster,
and lot 4 to Gray. Then Van Sandt’s sewer backed up, and he sued the D’s.
The question is do D’s have an easement by implication?
-Quasi easement- exists when an owner uses part of her prop to benefit another part of her prop (can’t be an easement b/c one
cannot hold an easement on one’s own prop)
-Mesne (mean)- means there has been a lot of owners
3- Easement Implied by Necessity
1-need 1 owner of the dominant and servient lots, and then he severs dominant lot (which is then landlocked), and
2-need strict necessity (meaning dominant lot has no access and is landlocked (majority)
-minority is reasonable necessity
3- necessity existed or created or arose at the time of severance
-Courts will then imply an easement by necessity across the servient lot from which the landlocked parcel was severed
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-Note: when the necessity disappears, then the implied easement by necessity disappears
Othen v. Rosier- Originally there was 1 owner of the prop (Hill). Hill conveyed a servient parcel to Rosier. The question is did he
impliedly reserve an easement for the roadway went he severed his prop. The said the pl couldn’t show strict necessity, so he lost.
Easement by necessity endures only as long as necessary. Note, this is not true for an easement implied by prior existing use.
-Why? Implied by necessity is a matter of public policy. So if the necessity disappears, then the public policy disappears and
the easement ends. This is not true for implied by prior existing use easement. There, we looked at intent of the parties, not public policy.
4- Easement by Prescription---a prescriptive easement arises against the will of the servient lot owner
1-Exclusive : majority view is that it doesn’t have to be exclusive use (shows use is by permission)
majority-called exclusive (but true owner can still be using; but you are asserting the right for yourself, but not
that you have to exclude the true owner)
-minority: it has to be exclusive use
-who maintains the easement? (If the serviant owner maintains the easement, then it tends to show
that the dominant owner is using by permission
- if there is a gate over the road, this shows that the dominant party is using by permission
2-Continuous: pl must use the easement for the duration of the SOL
3-Hostile: pl must show adverse use (meaning there is no license (no permission))
4-Open and Notorious
Majority rule is that there is no fiction of the loss grant, so there is no assumption the use is by permission.
-If the owner sends a letter to the user saying stop using it, will that stop the running of the SOL for Easement by prescription?
No, this won’t work. However, if the letter says the person has permission, then this will be a license, which you can revoke, but
may lead to easement by estoppel.
5- Minority doctrine by statute in the West
- The owner of the landlocked parcel may have the right to condemn an easement over another’s prop. The dominant owner only
has to prove necessity, and then has to pay for the easement.
-(if you don’t have a common owner, you may have to use this instead of 3 or 4)
BEACH STUFF
Majority rule: Public owns the prop from the water to the mean high tide area (wet sand area)
Beach Access
Only for navigable water, not a man-made lake
1-Customary rights doctrine---Fl, OR, Tx, HI, says that the owner only owns to the vegetation, and the public can use the dry sand
2-In CA, the California Coastal Commission controls this, and says land owners own down to the wet sand area; but they said that the
land owner has to give an easement for public access.
3-Public Trust Doctrine-Matthews v. Bay Head Improvement Assn.
-D was trying to restrict access to the beach. They owned the access lands. They were a private organization. The court said
that they were really a quasi-public organization.
-The court said that the public has a right to an easement for public access to the wet sand areas
-They also said that the public also had a right to use the beach to lay out their towel.
-If the D had been a private, individual land owner, then this would have been a taking, and it would need to be
compensated. However, in this case, the D was a quasi-public organization, so it is not a taking and we don’t
need compensation.
Assignability of Easements
1-The common law is that easements in gross can’t be assigned (were not transferable)
2-Restatement 1st -commercial easements in gross are presumed assignable if that is the intent of the parties, but private (personal)
easements are not
3-The Restatement 3rd is that easements in gross can be assigned; just look at intent of the parties
-if 2 or more people own an easement in gross, they have to treat it as “one stock”. Therefore, a party can’t unilaterally transfer
easement.
-Easement appurtenant’s usually just get assigned when the land is sold. (they run with the land)
Scope of Easements
Brown v. Voss- Brown bought lot B, which had a house on it. Voss owned lot A, which had an easement and was the servient prop.
Brown then bought lot C, and wanted to build his house on that lot. Voss didn’t want him to use the easement to get to C. The court
agreed that the rule was that the owner of a dominant parcel (B) cannot use an easement (A) to go onto another adjacent prop (C)
Lot C- owned by Brown
Lot B- owned by Brown (dominant parcel)
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Lot A- owned by Voss (servient prop that contains easement)
1- General rule: the owner of a dominant parcel (B) cannot use an easement (A) to go onto another adjacent prop (C)
-rule: If an easement is appurtenant to a particular parcel of land, any extension thereof to other parcels is a misuse of the
easement. (any extension of an easement is a misuse)
2--what is the Remedy for Misuse?
Majority: remedy will be an injunction, saying you can’t use the easement until you remedy the misuse (Bowling alley and
luncheonette ex.)
Minority: damages
3-if the use of the prop has changed (ex. Single family to multiple dwellings), can the dominant estate still use the easement?
-look at factors
1-look at normal development, and see if this is comparably normal
2-also look at the express easement language and see what was intended by the parties
3-look at increased burden on servient estate
4-if an original easement is old and includes just using as a horse path, and then in 1940 you want to use car. This is ok.
-exception is for an easement by prescription: for these, whatever you did to get the easement by prescription is all you can use it
for (ex. If you drive cattle over the land, you can’t later drive your motorcycle over it)
5-if a party wants to change the location of an easement, he can’t do it unilaterally
-Majority: The location of an easement, once fixed by the parties, cannot be changed by the servient owner w/o permission of
the dominant owner.
-Restatement- party can move easement if reasonable and there won’t be much impact, they might let you change
Termination of Easements
Preseault v. US- railroad had an easement over the Preseault’s prop. Then they stopped using it and pulled up the tracks. Then years
later, through the Rails-to-Trails Act, the easements were turned into trails for hiking.
-Easement means A has a right to use B’s land in some way. Here, A=the railroad, and B=the Preseaults.
Issue 1: the conveyance said fee simple, but the court read it as an easement (courts disagree on that)
-did the railroad get a fee simple or an easement?
-the court said just give them what they need, an easement
-where it is ambiguous, give an easement
-where it is clear that it is fee simple, you can still argue, some courts say it is an easement
Issue 2: The court looked at the scope of the easement, and asked if the easement could be used as a trail.
-When looking at scope, ask if the change in the use of the prop was reasonably foreseeable
-Court found that trails were inconsistent with original use (courts disagree on this)
-scope of the easement test: you can adjust the scope in changing times to serve the original purpose so long as the
change is consistent with the terms of the original grant
-in this case, some courts say a public hiking trail is not consistent with a railroad, others say it is not
Issue 3: Ways to terminate an easement
1-abandon---must show non-use and intent
-the other party must conclusively and unequivocally show intent to abandon the easement
-mere non-use is not enough, you also need acts of the owner that show intent of the owner (conclusively and
unequivacoly) , or a purpose that is inconsistent with ownership
2-by prescription
-the adverse party (servient parcel owner) would have to wrongfully and physically prevent the owner of the easement (or the
public) from using the easement (either by putting up a fence or something like that) for the SOL
-you must wrongfully and physically block the owners of the easement for the SOL period
3-you can terminate by deed
- you can deed it back to the servient parcel owner
-or you can buy the servient parcel owner’s land, and then when you own it, you can’t have an easement on your own land
-merger: if both the easement and the land are owned by the same party, the easement will merge
4-if necessity ends, then easement by necessity terminates
Issue 4 : is there a taking w/o compensation
-the court said yes, b/c the scope was not foreseeable, or the easement had been terminated (abandoned)
-if there is a taking, then this requires compensation.
-2 ways to find a taking:
1-the hiking trail was beyond the scope, so the gov has to pay
2-the original easement was abandoned, and therefore doesn’t exist, so since they took the land they
have to pay
Negative easements- the right of the dominant owner to stop the servient owner from doing something on the servient land.
-still need a writing for the agreement, and you must bargain for all these things:
-Negative easement- A has the right to prevent B from doing something on B’s land
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-common law did not like negative easements, but allowed 4 negative easements:
A has the right to block B from:
1- blocking his windows (light)
2-interfering with the air flowing into your land in a defined channel
3-you could bargain for the right for the guy not to remove the support for your building (usually by excavating or removing a supporting
wall)
-hypo: the guy building the pool above your prop, then coming to you and asking for a negative easement of you not doing
anything that will remove the support of the land
4-you have the right to bargain for the guy not interfering with the flow of water in an artificial stream
Some juris- the minority allows for:
5-unobstructed view
6-unobstructed solar panels
7-the majority allows for conservation
Ways to create a negative easement:
1-express
2-estoppel
3-implied by necessity
4-implied by prior existing use
-For a Negative easement, you can’t create one by prescription, but the others are ok.
Covenants Running with the Land
General Info:
-Real Covenants- a promise having to do with land. Remedy is Damages
Example: Lot A is adjacent to Lot B
-A wants B to not put anything but a single family residence, and vice-versa
-Equitable servitudes- Remedy is specific performance or injunction
-Horizontal Privity:
Common Law: required a Landlord/Tenant relationship
Majority: requires a Grantor-Grantee relationship for the land
-2 ways to do this:
-A owns all the land and then grants lot B to B
-or A and B can each convey to a straw who grants it back to them with the Real Covenant
Minority (Rstmt 3rd ; modern trend)- eliminates horizontal and vertical privity
There are different requirements for the burden to run than for the benefit to run. It is harder for the burden to run
-First ask, are we trying to get the burden to run, or the benefit to run?
There are 6 requirements for the burden to run:
1- we need a writing, b/c a real covenant is a prop interest
2- the original parties (A & B) must intend to bind their successors
3- the burden must touch and concern the land
4- we need horizontal privity between the original parties who made the promise
-common law- must be landlord/tenant
-majority- requires a successive (grantor/grantee) relationship
-minority (and modern trend)-doesn’t require horizontal privity
5- we need vertical privity (from the former prop owner to the successor)
-is successor in privity with the original party who made promise
-majority: satisfied with grantor/grantee relationship
-minority: no privity required
6- Notice (this is a statutory requirement)
-if C is a subsequent bona-fide purchaser w/o notice, he may be protected by the recording act. So C has to have notice to be
bound by the covenant.
There are 4 requirements for the benefit to run with the land:
1- there must be a writing between the original parties
2- the original parties have to intend to benefit their successors
3- the benefit must touch and concern the land
4- there must be vertical privity between B and C, the former prop owner and the successor
-majority: must have grantor/grantee relationship
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-vertical privity is just one taking the entire state from your predecessor
-minority: not needed
For adverse possession, benefit will run, but burden won’t
4 Differences between equitable servitudes and real covenants
1-Remedy for an equitable servitude is an injunction; remedy for real cov is damages
2-Equitable servitude can be implied; real cov has to be in writing
3-an equitable servitude requires no privity; real cov needs privity
4-defenses are different and you have more with Equitable servitude
-Restatement 3rd doesn’t distinguish between real cov’s and equitable servitudes
A real covenant cannot arise by estoppel, implication, or prescription (it must be made in writing) (this is different than an easement)
Elements for Equitable Servitude:
1- Writing or common plan/scheme (where it can be implied)
-minority doe not allow the common plan/scheme to imply a writing. So you have to have a writing---this is California
2-original parties must intend to bind successors
3-it must touch & concern land
4- Successor must have notice
If you saw a case on the test like Tulk, you would want to discuss Equitable servitude, real covenant, and a negative easement
(unobstructed view), and an affirmative easement (the right for his tenants to use the land: this is reserved in a 3 rd party (under Willard
this would not be ok, however, under majority this would be ok)
-in prop, we don’t need consideration, and we don’t care about consideration
Example of Equitable Servitude:
Sanborn v. McLean-the owners of lots nearby want an injunction, so this is an equitable servitude case
-the D wants to build a gas station on his lots
-53 of the 91 lots had a restriction on them saying that they must be single family houses
-element 1 the D’s lot doesn’t have writing, so they have to get this by implying it through a common plan/scheme
-element 4, notice to successor, is also at issue. There was no recorded notice. But the court said they were on inquiry notice, b/c every
other house was in the neighborhood.
Neponsit Prop Owners’ Assoc. v. Emigrant Industrial Saving Bank- bank was asking for a declaration from the court to whether the
Equitable Servitude still exists on the land. They don’t want to pay the $4 a month.
The 1st issue was does the equitable servitude touch and concern the land?
-the $4 goes to the Neponsit homeowners assoc to maintain roads, land, sewers, beaches.
What is the difference between an affirmative covenant and a negative covenant?
-affirmative covenant: says the landowner has a burden to do something
-negative covenant: restricts the use of the land (the theory is that it raises the value of the surrounding land, and this is considered a good
thing)
Traditionally, courts are more likely to enforce a negative covenant than an affirmative covenant.
Why? Because with an affirmative covenant:
1) you have more continuing judicial supervision
2) enforcing an affirmative covenant, which requires the covantor to maintain prop or pay money, may impose a large personal
liability on a successor
3) an affirmative covenant, unlimited in time, resembles a feudal service or perpetual rent
So in this case, why is the paying $4 different than a normal affirmative covenant, thus allowing it to be treated as a negative covenant?
- it affected the neighboring land owners, and raised the value of the land by the homeowner assoc keeping up the roads, etc...
-therefore, the court decided to say it touched and concerned the land, b/c it affected the neighbors land value
P. 883 note case:
B owns a lot. Sells lot to L, and says he can’t build within 10 ft of lot line with Z. L then sells to K. Z then sues K, who says he wants to
build on the 10 ft, asking for an injunction, which is enforcement of an equitable servitude.
-Z was never a party to the original K. So can he sue? Does he have privity?
This is a negative covenant. Courts like to enforce neg covs, b/c they increase the value of land
-we have a writing
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-we have to have intent to bind successors
-does this touch and concern the land?
-when we look at this, we have to analyze privity of estate
-the court said Z was an intended 3rd party beneficiary (which is in K) and is not limited by privity of estate (which he doesn’t have)
-Notice: he had notice
privity of estate means you are the successor of the prop interest
Touch and concern examples
P. 887
1(a) this is a negative covenant
-some statutes say you can’t have a cov like this
-the rest 3rd assumes that the cov is valid, unless shown otherwise
1(b) this is a neg cov
-if it is a neg cov, then it touches and concerns under common law
-under restmt 3rd, you would have to see if it was against public policy
1(c) this is a neg cov
-does this touch and concern? Yes, neg automatically touches and concerns, so it is ok
-under restmt, you could possibly argue that this restriction is against public policy b/c we want people to conserve energy
1(d) this is neg, so it is automatically touches and concerns and will be upheld
-however, some state statutes make these covs void, like in CA
1(e) this is an affirmative covenant
-does this touch and concern land?
-ask if this money goes to the value of the surrounding land? Not really
-would it increase judicial supervision? Yep
-and it is like perpetual rent
so this cov wouldn’t be allowed
However, the restmt says that these types of servitudes are allowed, unless it is illegal or against public policy
What is the touch and concern test?
-What is the touch and concern test under Restmt 3 rd?
A servitude is valid unless it is illegal or unconstitutional or violates public policy
-We start our analyis of probs like this with:
Is the covenant negative or affirmative?
If neg, that means it restricts the use of the land
-if it does, then it touches and concerns the land
RECAP
Creation of covenants
Sanborn (gas station)= common scheme instead of a writing; D had inquiry notice
Neponsit- ($4 to be paid to NPOA)
-English Rule: only promise restricting use of prop (touching and concerning)
-contiuing judicial supervision
-liability
-perpetuity
-Amercian rule (Majority Rule)- look at effect of the affirmative promise and see if it has some bearing on the use and enjoyment of the
land. If it raises value of the land, then it is considered to touch and concern, and is ok
General Rule: Equitable servitude by the original promisor or his successors.
Majority says that a 3rd party beneficiary and a representative or agent can sue
P. 887 Negative covs, anything that restricts the use of the prop, automatically is said to touch and concern the prop. It may be restricted
on other grounds, such as 1st amend
a-d examples: no flag, no Christmas lights, no solar panels, no house used for day care
e- under majority, this would not be allowed (giving 10% to original developer when you sell). Under restmt, this would be allowed.
Maintenance fees, sports clubs, etc. will be found to touch and concern, and are generally upheld.
-with water use, and if you don’t need it, the court probably won’t ok this
Caulett-developer sells land with the restriction that the developer will get to build the house, and the K said it runs with the land.
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-Can this be enforced as an equitable servitude?
-writing? Yes
-Intent to bind successor? yes
-does it touch and concern-this is the issue
-Notice- Yes
does it touch and concern?
-1st, we ask is it a benefit or a burden?
-this is also a benefit for the developer.
-we have to ask if the benefit (which is in gross) touches and concerns the land?
-it has to either effect retained land of the owner (which in this case it doesn’t)
-or it has to benefit the surrounding lands somehow (like a negative cov does)
-here, the court found that neither was two above, so they said that the covenant couldn’t be enforced. They say this is a personal
covenant, which doesn’t touch and concern the land.
If the court had used the Restmt 3rd, the cov probably would have failed also, b/c it puts a restraint on alienablity
Prob 4 on p. 892
Developer wants a variance from the zoning dept of the city. City is willing, if the developer will give the city a covenant running with
the land limiting the use of 5 apts to families of low income.
We want to say that it is a neg restriction
It will be a benefit in gross to the City (or to the low income)
-does this touch and concern land retained by the grantor? To find this out, we have to argue that it will benefit the land retained by the
city: say it is a good public policy thing, less homeless in public parks, etc.
So can we put this all together under Creation of Covenants:
Rule 1: Negative covs (that restrict the use of land) are routinely held to touch and concern, and are probably valid
-also, in Maj: may be implied due to a common scheme or plan
Rule 2: affirmative covs (condo fees, gym fees) may touch and concern the land; we are going to look at the effect: look at where the
money goes, and does it enhance the value of the surrounding land
Rule 3: where benefit is in gross, you are going to have an extra tough time proving it touches and concerns the land, and it may be
invalid
Scope of CovenantsHill v. Community of Damien- group home for HIV patients
What does a restrictive covenant mean when it says single family residence only? Does the covenant violate the FHA?
3 ways to prove a violation of the FHA:
1-discriminatory intent- the party intended to discriminate
2-disparate impact-the conduct results in discrimination
3-failure to provide reasonable accommodation
Shelly case
Racially restrictive cov
Private agreement restricting the use of land: easement, neg. easement, real cov or equitable servitude?
-it wasn’t an easement or neg easement
-it wasn’t a real cov, b/c no horizontal priv and they wanted an injunction
case was decided on 14th amend equal protection grounds
-Also, most of these cov’s are not allowed under the FHA
-so we had to have state action, and the court held it would be state action to give an injunction. Court has also ruled
that giving damages would be state action
-it is unclear how far this would go
-however, not all giving of injunctions and damages is state action: example of court giving injunction against a church.
-other routes of getting rid of the restriction: (public policy reasons)
-unreasonable restraint on alienation, or spiteful or unconscionable
-So people can make private agreements that restrict the use of their prop. However, if they want a ruling by the court, then their
covenant may not be enforced under the 14th Amendment
***Note: Courts will enforce if a will says, MY SON GETS MY ESTATE IF HE MARRIES A CHRISTIAN. However, the court will
not determine if the woman is a Christian. You have to write the criterion in the will or appoint a neutral arbitrator.***
What are other ways to terminate a cov other than 14th Amendment and FHA?
-Western Land Co. v. Truskolaski- restriction said that the land was to be used for single family dwellings only. Developer wanted to
build a supermarket. He said that the restriction was no longer valid b/c the area had changed so much.
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To see if a covenant should be dropped, look at:
Does the Covenant remain a substantial value to the homeowners?
Within the subdivision, does the restriction still have some value?
-look at substantial changes
Hancock case (Wilshire Blvd.)
If the community had changed a lot (like the LA intersection), where there were now more businesses than houses, and the traffic was
very heavy, where there were 70 buses and hour stopping in front of the house. Here, the court said the restriction should be dropped.
Two other ways:
Abandoning covenants (only the benefit, not the burden)
Waiving covenants
Rick v. West- guy owned 62 acres, subdivided, and sold 1 lot to a lady (West). Then he wanted to sell the rest of the land to a hospital and
wanted to change the zoning, citing that nobody wanted the other lots so there were changed conditions. However, the court said that the
conditions hadn’t changed and that West still could live there and the other lots had to be single-family dwelling.
-the covenant could have been terminated if she had voluntarily conveyed it back to Rick.
Majority:
Restmt 3rd of prop- modification or termination of covs and servitudes
-when can you terminate or modify under this?
1-when the purpose of the cov is impossible to achieve
2-if the purpose can be achieved, but the servient estate is no longer suitable for the uses permitted by the servitude
Minority: Massachusetts says that damages are all that are available.
-no restriction shall be enforced unless it is determined that the restriction is, at the time of the proceeding, of actual and
substantial benefit to a person claiming rights of enforcement. Even if it is found to be of benefit, it shall not be enforced if:
there are a lot of reasons, but number 5 is very broad: the restriction shall not be enforced if it is for any other reason inequitable
or not in the public interest.
What does it take to abandon prop?
-Pocono Springs Civic Ass’n v. MacKenzie- owner is trying to abandon a prop that is the servient parcel, the one that is burdened with the
affirmative covenant.
-in the Presault case, the railroad abandoned their easement by:
-non-use, and intent to not return (unequivocally and conclusively)
-in Presault, it was the guy who had the benefit, the dominant owner, who abandoned.
-Rule: if you are the one with a benefit of a cov, then you can abandon
-However, here, the owners were the servient owner, with a burden. These people cannot abandon.
-a servient owner cannot abandon
-why? To transfer, you have to have a writing to someone else
A cov is not limited to the value of the lot
Rstmt 3rd
A cov to pay money terminates after a reasonable time if it doesn’t specify amount. It can also be terminated if becomes excessive in
relation to value or service to the land.
-This doesn’t apply to common interest community though.
If the gov condemns the land, they have to pay you, and the cov terminates
Ways to terminate or refuse to enforce (DEFENSES):
Real Covenants
1- Release it- deed it back
-also, the doctrine of merger
2-imminent domain, and then gov pays you
3-abandonment (by the benefited owner)
4-in a minority, changed conditions (this is an equitable doctrine)
Equitable Servitudes (when an injunction will not be enforced)
1- Release it- deed it back
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-also, the doctrine of merger
2-imminent domain, and then gov pays you
3-abandonment (by the benefited owner)
4-in a majority, changed conditions (this is an equitable doctrine)
5-racially restrictive cov under 14th amend with state action
6-unclean hands- court demands clean hands
7-laches-you snooze, you lose
8-estoppel- materially change position on reliance
4 Differences between equitable servitudes and real covenants
1-Remedy for an equitable servitude is an injunction; remedy for real cov is damages
2-Equitable servitude can be implied; real cov has to be in writing
3-an equitable servitude requires no privity; real cov needs privity
4-you have more defenses with equitable servitude
Special problems for covs and eq serv
-affirmative cov: the real problem is does it touch and concern? Neponsit and Collette
-standing: like in Neponsit, where the 3rd party got to sue
Enforcement of covs:
-what does single family residence mean
-FHA regs
-Shelly case
Zoning
Roadmap of section:
1-What are the policy assumptions of zoning?
2-Zoning is adopted and the current land owner has plans that would violate the zoning (is non-conforming) (Euclid case)
3-Zoning is adopted and the current land owner is actually violating the zoning when it is adopted (non-conforming use)
4-How are we going to build flexibility into zoning?
1-variances
2-special exceptions
3-amendments
5-Constitutional questions and 1st amendment freedom of speech
1-What are the policy assumptions of zoning?
-Aims of zoning:
1-to segregate the land for different uses
-benefits: keep up land values
-costs: sitting in traffic
2-wholesome housing is the most important goal: good residential areas
-preference is single-family housing with a yard (you can enforce this with min. lot size requirements and
setback)
3-open space is desirable for healthy living
-origin is “the garden city”
2-Zoning is adopted and the current landowner has plans that would violate the zoning (is non-conforming) (Euclid case)
-current owner is being harmed b/c he can’t do what he planned to do
-the pl realty company complained that the zoning violated the 14 th amendment right to substantive due process and equal
protection.
-the court said that the zoning didn’t violate the 14th Amendment
-they said the state has police power, to pass laws for the public welfare, safety, etc
So what do we get from Euclid?
1-zoning laws are presumed to be Constitutional, which means the burden is on the attacker to prove otherwise
2-the zoning will be upheld and doesn’t violate the 14th amendment unless it is arbitrary and capricious, and has no reasonable
relationship to public health, safety, welfare, and morals
3-the court will not substitute their policies for the legislature
-the court will not conduct an independent review
-if the validity is debatable at all, then the court will uphold zoning
3-Zoning is adopted and the current landowner is actually violating the zoning when it is adopted (non-conforming use)
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-the original thinking was that the non-conforming use would just fade away
-why did they think that the non-conforming use would fade away or extinguish?
They thought that thru destruction, abandonment, nuisance, and eminent domain, that they would just
disappear. However, this didn’t work. The non-conforming uses kept going. So then statutes were passed,
called amortization statutes.
-Ways that extinguish a non-conforming use:
-destruction doctrine: if the premises were destroyed by an act of God, then the non-conforming use would be
extinguished---the owner can repair, but they can’t rebuild
-Abandonment: if an owner abandons the use, then he can’t start it back up again
-some jurisdictions say that you need intent; just closing it down isn’t enough, you need intent to
abandon the non-conforming use
-intent could be satisfied by asking to use the prop for another use (asking for permit)
-some jurisdictions say that you just need to discontinue the use for some number of years
-Nuisance
-Eminent domain
Ways that don’t extinguish non-conforming usages:
-if an owner sells his prop, the new owner can continue with the non-conforming use. A non-conforming use
runs with the land
-the prop owner has a vested right in the non-conforming use of the land
-an owner can change his non-conforming use in some juris, and not in others.
-an owner can repair damage to his prop, but not rebuild
So the gov couldn’t just wipe out the non-conforming use, b/c that would be a taking. So they passed amortization statutes.
Amortization Statutes: allow a reasonable time for the owner of the non-conforming use to recoup their investment
-note, that a court, when figuring what a reasonable time is to recoup, does not look at the owner’s particular situation to see how
long you need to recoup. They would use an objective std and look at a reasonable owner in your situation.
A majority of jurisdictions allow Amortization statutes:
-the idea is that society changes, and what is offensive also changes. Therefore we allow a non-conforming use to stay as long as
they need to in order to recoup their investment. Then they have to stop that use on the land.
The minority rule is that amortization of a lawful pre-existing nonconforming use is not allowed b/c it is a taking.
-so these jurisdictions would say that destruction, abandonment, nuisance, and eminent domain are the only way to get rid of a
non-conforming use
Examples:
Hypo 1: I have a hotel, and the zoning law changes:
-majority: amortization statute
-minority: no amortization statute
Hypo2: I have a permit and Gov changes ordinance right after I started building:
-what if you got a permit, just started building my hotel, and then the city passes an ordinance saying I can’t build?
Depending on facts, I maybe can show I have a vested right in non-conforming use.
-court looks at how much money has been invested in good faith, and how far I have gone in my plans
-if I am almost finished, then I may have a vested right
-If I am just started, then I probably wouldn’t
-then ask if I am in an amortization state, and then see how many years until I have to shut down the
hotel.
-If in minority, then I can keep it open unless destruction, abandonment, etc.
Hypo3: Permit by mistake:
What if the gov gives permit, but they messed up and shouldn’t have given it to me (like the case of building the 31 story building in an
area zoned for 19 stories.
-I can claim estoppel, and I have to show reasonable and detrimental reliance, and that I acted in good faith.
-good faith is using due diligence to see what the zoning was in the area. If I knew or should have known of the
ordinance, and I didn’t, then I can’t rely on estoppel.
-note: it is not reasonable to rely on zoning, b/c this often changes
4-How are we going to build flexibility into zoning?
1-variances (you ask for a variance when you can’t do what you want to do)
-use variance vs. area variance
-area: setbacks, height, size of lot
-use: change the type of use
-Commons v. Westwood Zoning Board- D was asking for an area variance, b/c they wanted to build a house on a 30’
frontage when a 75’ was required.
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-a use variance is harder to get than an area variance, but we are going to use the same test
-Elements of a variance: (burden of proof is on applicant)
1-Undue Hardship
factors:
-if there is a denial, will this mean the owner can’t use, which would result in a
taking?
-how the problem was created? Is hardship self-imposed? (the owner sold off part
of the prop and created the problem)
-most juris won’t say buying prop w/restriction is not automatic self
imposed
-Did the owner try to solve the problem to comply with existing zoning law?
-try to sell to the neighbor, or buy some extra prop from the neighbor to
solve problem
2-negative criteria must be satisfied
-have to show that the variance would not effect the pubic good or the overall zoning plan
-Would there be a substantial detriment to public good or intent of zoning plan if the
variance was given?
-look at minimum lot size and see if this will affect light, air and open
space
-would it bring down values of the neighboring props?
-look at minimum square ft requirements and see if it affects aesthetics of
the neighborhood
-variances run with the land
-notice, individual characteristics of the people are not taken into account (ex. Girl in wheelchair and
the building of the patio)
2-Special Exception
***difference between variance and exception***
-variance-my plan for the prop is prohibited by the zoning
-if it is denied, then this is considered a taking
-Exception- zoning law allows my plan subject to certain criteria
-the board acts as a finder of fact, seeing if the developer meets the criteria. There is not discretion.
-the reason we don’t allow the statute for a board to have discretion is we are worried about
corruption. So we don’t want vague statutes that allow discretion. The legislation is
supposed to decide what the criteria are, and if they don’t, it is an improper delegation of
their duty, and it is unconstitutional.
-if criteria are too vague, and in effect the criteria are being set by the board, this is unconstitutional
Note: remember, for a zoning plan (Euclid), the S.Ct. said that this was ok
3-zoning amendments
-with a zoning amendment, we aren’t talking about a new comprehensive plan, we are talking about a spot zoning
change, which only is for one party (spot zoning)
1-zoning amendments are presumed to be Constitutional, which means the burden is on the attacker to prove
otherwise
2-the zoning amendment will be upheld unless it is arbitrary and capricious, and has no reasonable relationship
to public health, safety, welfare, and morals
-if the validity is debatable at all, then court will uphold it
-some jurisdictions do apply a stricter std than this when:
-K rezoning- the owner of land and the zoning board have a K, and the board gives the amendment or variance if they
agree to limit the use of their land (ex. Not sell liquor at the neighborhood grocery store).
-however, this is wrong delegation of the states power
-so lawyers came up with conditional rezoning. With the conditional zoning, there is no K; the city says we will give
you the zoning if you don’t do X (ex. Sell liquor)
-so the moral is, get a covenant. B/C zoning can and does change, but the covenant is not affected
-Floating zones- decide they want a zone, what the criteria will be, and will decide later where to put it
-Cluster zone- a developer is permitted to construct dwellings in a pattern not in literal compliance with the area
restriction. However, overall population density is generally no greater than other residential areas (mainly just
residential)
-PUD-mix use zone of residential, commercial, and sometimes even industrial uses.
5-Constitutional questions and 1st amendment freedom of speech
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Note: the state can restrict speech depending on time, place, and manner
City of Ladue v. Gilleo-city had sign ordinance that said no signs except: to be able to identify your house, for sale signs, safety hazard
signs (beware of dog). Pl put up a sign protesting Gulf War. The city had a ban on this. She then asks for a variance, and was denied.
-Why do cities restrict signs? Visual clutter, safety, prevents a nuisance from starting up
-the court said that the content of what was being said could not be regulated.
There are 2 problems:
1-statute is underinclusive-this is restricting too little speech based on content
-so the court would be ok if the statute said you can’t have any signs at all, but just discriminating based on a few things is
unconstitutional
-if the statute discriminates based on content, then we need to ask if it is political speech or commercial speech
-we protect political speech more than commercial speech
-then the court looks at what is being protected by the discrimination. If the discrimination is based on content, then the court
will weigh the reason why the ordinance is needed vs. the discrimination, and see if the ordinance is valid
-statute is overinclusive-this is restricting too much based on content
-the court looks at whether there are other ways for the party to communicate, other than the sign
-and they look at how cheap, easy, effective, and convenient these other ways are
-A city can’t ban signs based on content
-there is not a compelling enough reason to discriminate on content
If you have a private cov that restricts signs, then under Shelly, the cov would be ok, and then you have to determine if there is state action
in the enforcement. However, courts have only said that state action is enforcement of racially restrictive covs, not 1st amend stuff
Art
Courts have been reluctant to restrict art
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