II
PROPERTY LAW CONCEPTS
A
Ownership Concepts
1.
Generally, we don't own things. We own "rights" to use
things.
a.
The right to use something can be virtually unlimited and can
include the right to destroy the owned thing. This is true for
most personal property.
b.
Other rights to use things can be sharply limited as to time,
location & manner. This is especially true for real property,
which can be thought of as having rights in 5 dimensions.
The five dimensions of real property rights are:
i
The three dimensions of space (length, width, & height)
ii
The dimension of time.
iii
The dimension of use (one person can own rights to
remove timber, another to travel on the property,
another to live there, etc.....)
2.
Some ownership rights can be exercised & enforced by the
owner (the right to use a toothpick in any manner desired
generally doesn't require any outside help). Other
ownership rights are worthless unless enforced by the
government. (the rights to lateral and subjacent support)
3.
A right to use a thing in a particular manner which the
government will enforce is a legal or enforceable "interest".
4.
"Title" is evidence of possessing a legal interest which is
sufficient to get the government to enforce that interest.
a.
Title is not necessary to exercise some ownership interests,
such as the right to use an ink pen. It is necessary to exercise
other interests, such as the right to register a motor vehicle for
use on public roads.
B.
Types of Property - Personal property vs Real property
1.
Personal property - any thing which is not attached to the
earth.
a.
Means of acquiring title to personal property
i
Purchase
ii
Finding ( subject to statutory constraints such as the
Michigan Lost Goods Act which provides that the State
and the finder split the property, amongst other things)
iii
Accession / confusion. (Accession occurs when one
person adds value to another's property with their
consent. It generally results in a lienholder's interest.)
(Confusion occurs when fungible goods are co-mingled.
This results in a tenancy in common to the entire lot of
fungible goods.)
iv
Capture (applies only to "common" property). The
elements are: - The capture must be intentional.
- The captured object must be "free"
prior to capture ( wildlife, water, air
oil, gas, fluids)
- The captured object must remain in
captivity. It control is relinquished, or
if the object escapes, then the property
rights are relinquished as well.
v
Gift. The three elements of a gift are:
- There must be an intent to make a present
gift - not an intent to make a gift in the future.
- The given object must be delivered to the donee,
either actually or constructively.
- The donee must accept the gift.
b.
Means of losing title to personal property
i
Sale
ii
Gift
iii
Accession / confusion
iv
Loss / destruction / escape of captured objects
v
Forfeiture (criminal forfeiture)
vi
Fixture (attachment to real property). Personal
property is converted to real property when it becomes
"attached" to the real property. It is considered to be
attached, and hence, a fixture if:
- Removal will injure the real property, or
- Removal will injure the personal property,
- Removal will result in the personal property becoming
worthless. (paint scraped off of a building), or
- It was attached with intent to become a permanent
part of the real property.
2.
Real property - the earth and all things attached to it
a.
b.
C
Means of acquiring title to real property
i
Voluntary conveyance (Generally, voluntary
conveyances are by written instrument, such as a deed,
a will, an easement, etc..... This is because the Statute
of Frauds is available as a defense to void out voluntary
unwritten conveyances)
ii
Involuntary operation of law. (This includes intestate
rules, adverse possession, acquiescence, partition
actions, divorce, etc. These are generally thought of as
unwritten conveyances, although the substantive law
which provides for them is written, and title isn't
conveyed until a judgment is granted.)
Means of losing title to real property
i
Voluntary conveyance
ii
Involuntary operation of law
iii
Severance (When crops, trees, minerals, oil, gas, etc.
are removed (severed) from the earth, they cease being
real property and become personal property.
Dimensions of real property ownership - interests in land
1.
The dimension of time
a.
Real property is indestructible. As long as the earth supports
human life, real property rights outlast any individual. Therefore,
one method of categorizing real property ownership rights, is to
categorize them according to their duration.
b.
"Freehold" estates have an infinite duration. Leasehold estates
have a finite duration.
c.
Freehold estates that are inheritable are called "Fee" estates.
d.
i
Some "Fee" estates are subject to being lost if a
specified condition occurs or fails to occur in the
future.
These are called " Defeasible Fees".
ii
The highest "Fee" estate is called a "Fee Simple
Absolute". A "Fee Simple Absolute" is not
subject to
being taken in the future (except for non-compliance
with certain criminal laws and certain tax laws). It can
only be transferred by voluntary conveyance, by
operation of law after death, or by something
like abandonment (adverse possession).
Life estates and time share estates are estates which may or
may not be inheritable.
i.
Life estates are leasehold interests which generally are
not inheritable. They are an interest in land which
terminate upon someone's death. If the estate
terminates upon the death of the holder it is not
inheritable and can be thought of as a lease which ends
upon death. This is the usual case.
If the life estate is for the life of someone other than the
holder and the holder dies before the life estate expires,
then the remaining time is inheritable.
-
ii.
Dower and curtesy are old common law life
estates which were created automatically by
marriage. Dower is a 1/3 life estate held by
a wife in all real property owned by her husband
at any time while they are married. It becomes
vested on the husband's death and ends on the
wife's death. It does not end on divorce unless
specifically provided for in the divorce
judgment. Curtesy is the husband's version of
dower. Curtesy has been abolished in all 50
states. Dower has been abolished in most
states, but not in Michigan.
Time share estates refer to an interest in real property
which are limited to a fixed period, but which recurs
infinitely (say, the last two weeks of July). These can
be thought of as temporary fee estates, which are
generally inheritable.
2.
e.
Leasehold estates have a finite duration, which may or may not
be fixed at the time they are created.
f.
"Future interests" refer to ownership rights currently held by
someone else, but which may go to the holder in the future.
For example, the person who gets the rights under a life estate
or leasehold when the life estate or leasehold ends has a type
of future interest called a "reversion".
The dimensions of space and person
a.
Real property rights can be divided according to spatial
location (geography) as well as by time or use. Laws dealing
with the allocation of spatial rights (boundary law principles)
are beyond the scope of this course and are covered in LS 426.
b.
What is to be discussed here is the manner in which the rights
to use an entire spatial area in the same way and at the same
time can be allocated amongst several different persons.
(Concurrent ownership)
c.
Concurrent ownership types are referred to as "tenancies". Sole
ownership by one person or entity is called "severalty". Don't
ask why!
d.
Three types of tenancies:
i
Tenancy in Common - Similar to stock ownership.
Each owner may own different percentages
of the whole property. Still, each owner has
an equal right to possess and use the entire
premises. Each owner can transfer all or
any part of their ownership share to anyone
they choose by deed, by will, or by intestate.
If property is co-owned and there is any doubt
as to what type of tenancy was intended, the
courts will presume that a tenancy in common
was intended.
ii
Joint Tenancy - Very different from stock ownership.
Each owner has an equal percentage of
ownership and each owner has an equal
right to
use and possess the entire premises. No owner
can transfer a joint tenancy to an outsider. ( If A,
B, & C, are joint tenants and C sells her
interest to D, then A & B are joint
tenants of a 2/3 interest and D is a
tenant in common with a 1/3 interest.) No
dower rights attach to joint
tenancies.
Joint tenancies carry full rights of survivorship.
This means that if a joint tenant dies, her
interest automatically is transferred to her cotenants immediately at the moment of death.
Because the joint tenant's interest is transferred
immediately at death, it does not become part of
the decedents estate and hence can't be
conveyed by will. (It also avoids the probate
process, transfer taxes, and inheritance taxes,
which is why it is a very popular device for
transferring real estate amongst family
members.)
Since the courts interpret ambiguities in favor of
tenancies in common and against joint
tenancies, they are usually created with
very specific language such as: "...as joint
tenants with full rights of survivorship, and not
as tenants in common."
iii
Tenancy by the Entirety - This is a special form of
joint tenancy which is limited to married
couples. It is converted to a standard joint
tenancy upon divorce, if the parties remain coowners. It is no longer recognized in many
states, but remains valid and very common in
Michigan. The only significant difference
between a tenancy by the entireties and a joint
tenancy is that the owners of a tenancy by the
entireties receive some special protections from
creditor actions.
A tenancy by the entireties is created simply by
indicating in the deed that the grantees are
married. For example the following language
creates a tenancy by the entireties: "...conveys
to Mary and John, husband and wife...."
e.
3.
Co-Ownership issues.
i
Co-owners can be required to pay their pro-rated share
of taxes, insurance, mortgage costs, and other
necessary expenses, but not for repairs or
improvements made without their consent.
ii
Co-owners are entitled to a pro-rated share in all rents
and income generated from the property.
iii
Contracts to sell co-owned property rights, or to sever
items from the property (such as timber, minerals, or
crops) are voidable by co-owners who don't consent to
them.
The dimension of use
a.
Rights to use real property can be conveyed in bulk, or in
almost infinitely detailed bits and pieces.
b.
Because conflicts between land use rights can develop readily
and because of their potentially destructive consequences, a
vast body of substantive and remedial law has been developed
to resolve and prevent land use conflicts. This body of law
is the heart of this course.
c.
d.
Common law doctrines affecting land use include those relating
to:
Easements
Servitudes and restrictive covenants
Nuisance
Statutory provisions affecting land use include:
-
local zoning and land use regulations
local subdivision and density control ordinances
various state and federal land use statutes
e. A conveyance of a right to use land includes an implied
conveyance of all things necessary to exercise the right
( implied easements / easements by necessity )
f.
Easements are limited rights to use land owned by others in fee.
i.
Easements in gross are held by persons. They detach
rights from land and attach to a person. Unless
somehow limited in time they can be conveyed
separately from the holder's other lands. Mineral rights,
timber rights, hunting rights, and public road and utility
easements are examples.
ii
Appurtenant easements are held by land. They detach
rights from one parcel of land (the servient tenement)
and attach to another parcel of land (the dominant
tenement). Appurtenant easements "run with the land;
that is the easement becomes part of the dominant
tenement and cannot be conveyed separately from it.
iii
Easements are created by written grant, by implication,
and by prescription (adverse possession /
acquiescence).
-
Prescriptive use has the same requirements as
adverse possession / acquiescence except for
the requirement of exclusivity and except that
openness and notoriety requirements are
somewhat relaxed.
-
If the servient land owner installs and maintains
a gate across the road, or creates, or does the
bulk of the maintenance on a road, the use of
the road by others is presumed to be
permissive; not adverse.
-
Easements by implication or necessity arise
when a right to use property would be worthless
without the implied easement. ( Example: An
ingress-egress easement or a utility easement
to a landlocked parcel)
-
The easement by implication / necessity must
be created at the time the parcel was severed
from its parent parcel.
-
The use by the servient tenement was occurring
at the time of severance;
-
or
and -
An easement over the servient tenement was
necessary in order to use the dominant
tenement at the time of severance.
The necessity of use by the dominant tenement
must have been or should have been known by
the grantee of the servient tenement at the time
of severance
iv
v
An easement holder not only has the right to use the
easement, but to perform maintenance activities on the
easement.
-
The easement can be reasonably improved or
altered, but not to such an extent that it alters
the nature of the use. ( a dirt access road can be
graded and graveled, but probably can't be
paved, and certainly can't be converted into a 4
lane toll road.)
-
No unreasonable surcharge on the easement is
permitted. ( If a easement is granted to give the
owner of a landlocked "forty" access to her
property, she cannot put a 400 unit condo on
her "forty" and use the easement to access it.
-
The easement can only be used in its specified
manner. ( The beneficiary of an ingress-egress
easement can only drive across the easement,
she cannot park her vehicles on it.)
The servient tenement holder retains all rights to use the
affected property not specifically held by the
dominant tenement. In other words, the servient
tenement holder can do whatever she wants,
unless her use interferes with the dominant
tenement holder's use. (For example, a servient
tenement holder can build a house in a road right-ofway, but if the house interferes with vehicular vision,
or safety, or construction/maintenance activities, it
can be bulldozed. Also, a dominant tenement holder can
cut trees located within the easement, but the logs
belong to the servient tenement.)