Property I 1
I.
TRESPASS
i.
Rule: Unprivileged intentional physical intrusion onto property possessed by
another.
1. Intent met if D engaged in voluntary act
2. Consent or Necessity are defenses to trespass
i. The Right to Exclude: Public Policy Limits
1. A fundamental right: one has exclusive control to property.
1. In general, my home is my castle, and I have the right to exclude anyone, except
privileged individuals.
2. A civil right, that excludes those to whom I owe support.
3. The more I open property for other people, the more the right to exclude
diminishes and vice-versa.
2. State v. Shack: The ownership of real property does not include the right to refuse
access to individuals providing government services to workers who are housed on
the property.
1. Businesses and Commercial Enterprises
Early on the law imposed special obligations to innkeepers and common carries
for it was dangerous for people not to be able to receive accommodations, as
long as they can pay--- they would not be able to exclude.
III.
Desnick v. ABC: Entry onto another’s property is not unlawful trespassing if it does not
interfere with the owner’s ownership or possession of the property.
i. The fundamental right to exclude is not significantly different b/w the private
home and the business.
 Rationale: if business is open to public and depended on it for income, then
I will not exclude it, so the law did not exclude it.
 unless there is significant disturbance of the law, the customer cannot be
excluded.
Majority Rule: a business has the right to exclude anyone under a good, bad
or no reason, as long as it does not violate any law.
Right of Reasonable Access to Property Open to the Public
Unston v. Resort Int. Hotel: An individual has a right of reasonable access to
property open to the public.
1. When property owners open their premises to the general public in the pursuit of
their own property interests, they have no right to exclude people unreasonably.
2.
Majority Rule: (GA) Right of Reasonable access is to exclude without cause
and limit the duty to serve the public to innkeepers and common carriers.
ii. Homelessness Issue: The law prohibits discrimination based on sex, race, ethnicity, etc.
However, it does not protect economic statuses (homelessness).
1. So far, the private property rights tend to prevail, allowing establishment owners
to exclude on their own non-discriminatory bases.
1. Courts have said that following people in stores does not amount to
exclusion or discrimination.
III. Trespass Remedies
i. Glavin v. Eckman: A judge has broad discretion in trespass cases to determine the
appropriate measure of damages, including reasonable restoration damages,
particularly where the property in question is unusual.
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1. Restoration Damages: The rubric is to consider whether it is reasonably
necessary.
 Replacement costs are rarely available
 Diminished value of the property is the standard form of calculating
damages.
Jacque v. Steenberg Homes: A jury has discretion to award punitive damages for
intentional trespasses, even if compensatory damages were not warranted and only
nominal damages were awarded.
You cannot get punitive damages unless there is some compensatory award, but
it could be nominal, since damage is presumed for at leas $1, simply for the loss
of the right to property exclusion in a claim of trespass.
 Nominal damages= no actual damage, no real harm.
Ratio: generally speaking, is 9 to 1, for punitive damages from compensatory
damages. (IMPLIES THE GREAT IMPORTANCE OF THE RIGHT TO EXCLUDE).
Public Accommodations Statutes: all common carriers prohibited from all form of
unreasonable discrimination, not just race, religion or national origins
The Antidiscrimination Principlei. CRA 1964-Title II
1.
§2000(a)- prohibition against discrimination or segregation in places of public
accommodations
a. Protected Categories: Race, Color, Religion, National Origin
b. Place of Public accommodation: indicates some sort of inhabitabilitymotels, restaurants, lunch counters. (retail stores not included)
i. Issue: courts are split on a narrow to the list or broad interpretation
2.
§2000(a)(6) assertion of rights based on other federal or state laws in pursuit
of remedies
 Passed to regulate inter-state commerce
 Allows declaratory and injunctive relief
CRA of 1866
§ 1981-regulates race discrimination only
a.
Equal rights to make and enforce contracts (applies to private
establishments)
i. To have a claim requires denial of services or contracts
ii. Does not apply (in most jurisdictions) to private clubs with
selective/exclusive limited acceptance
2. §1982- regulates property rights
a. Right to land transactions
 Allows damages
Discrimination Against Persons with Disabilities
1. ADA 1990: Federal Law that applies in all States (this is the biggest global form of
discrim)
a. Title III: requires new construction for handicap access in places of public
accommodation (PPA)
i.
PPA: extensive list that includes most retail and food establishments
ii.
Requires all businesses to make accommodations for the disables
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iii.
Disabled Persons
 Impairment of a major life function
 OR a record of the impairment
 OR being regarded as having an impairment
vi. Free Speech Rights of Access to Public Property
1. Public Places: private places of public access
a.
Public Forums: property open to the public for entertainment, food, etc.
 sidewalks, parks, etc. (not any public place is public forum)
 May require permits and must comply with local rules
Some state constitutions have speech protections
Fed Statutes do too, but employers will designate who and where
Beach Access and the Public Trust
The people have a right to navigate and fish the coastal waters and that right
cannot be transferred to private hands.
(GA) has included the right to recreate
Public Trust Limits: usually the high tide mark, to come and go, on coastal
beaches
Dry sand: some private property owners may need to grant permission
Does not apply to lakes, rivers, etc.
Reasonable Access Extension: the public has a right to spread out on the beach,
regardless of private ownership of dry land, although mostly in the summer
months.
Mathews v. Bay Head: The public trust doctrine extends to dry beach area
above the foreshore owned by a quasi-public entity.
i.
The public may have the right to cross privately owned dry sand beaches in
order to gain access to the foreshore, for the right to sunbathe and
generally enjoy recreational activities.
viii. The Right to Be Somewhere and the Problem of Homelessness, 66-69
1.
Main concept: since they have no property, they have no general right to legal
presence (mostly overnight) anywhere.
2. Social Issues to Consider:
a. State and County laws provide for shelter, but women and children get
preference
b. Homelessness leads to crime
c. If you cannot be anywhere, where do you go? --- some places allows specific
open areas for overnight stay
ii.
ADVERSE POSSESSION
When a trespasser possesses another's property in a way that is continuous, exclusive,
open and notorious, for a period of time set by statute, the trespasser takes the property.
i. If the trespasser has possession of the property for a period of time longer than the
statute of limitations, the property owner is barred from requesting ejection (eviction)
i. Title versus Possession
1.
Adverse Possession of Land: possessor has to believe they are true owners of the
land
a. Elements:
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
Adverse/Hostile: it is against the rights of the true owner
Without permission from the owner
 Actual: if the lands is actually used for residency, enjoyment or cultivation
Substantial improvements to the property
 Open and Notorious: if the true owner has notice of the possession
Visible/Obvious
A common notion of the ownership
 Exclusive: if the possessor is the only one to use the land as an owner would
during the time period
Right to allow and exclude from land, that doesn’t include
the true owner
 Continuous: if there are not breaks during the time of the possession (or
Taking on exists)
Without significant interruptions, not merely occasional
 Claim of Right: attitude that YOU own the land
Must be asserted in good faith by acting like a true owner
would
OR
 Color of Title: if the possessor has no actual title, but claims ownership
pursuant to the elements of adverse possession
 Paper identifying ownership (deed)
 Prescriptive Period: statutory length required for the possession to take
 (GA) 7 years by prescription if you believe you own it
 Does not begin over with every new owner (regarding the
doctrine of tacking)
Standard of Proof: clear and convincing evidence
 Possessors must believe they are true owners of the land
 It does not matter that possessor is mistake as long as he believes so
Result: if AP is established, the result is TITLE of the property
Brown v. Gobble: (Border Disputes) One who seeks to assert title in land by
adverse possession must prove each of the following for a period of more than ten
years: that he has held the land adversely and that the possession has been actual,
open and notorious, exclusive, continuous, and under a claim of title or color of title.
Tacking: the practice of adding up together successive time periods of
adverse possession in order to reach the statutory minimum. (benefits only the
adverse possessor)
The doctrine of tacking may be used if all other elements of adverse
possession satisfied
Romero v. Garcia: A void, unsigned deed is sufficient to create color of title for
an adverse possession claim, provided the property description and extrinsic
evidence are enough to enable a surveyor to ascertain the boundaries of the
property.
Nome 2000 v. Fagerstrom: The actions required for adverse possession depend
on the character of the land in question, and the requirements will be met if the land
is used for the statutory period as an average owner of similar property would use it.
b. Justifications for Adverse Possession
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c.
i. Roots not to be Disturbed
ii. Land Piracy
Prescriptive Easements
Rights (permission) to use that do not confer ownership
Grants permission for someone to use the land
i. Elements
 Adverse possession (use) minus exclusive
 Acquiescence- see me doing and do nothing (owner knew or should have
known)
ii. Licenses:
 Grant permission for land use
i. May be revocable at will
ii. Irrevocable if owner never intervenes
iii. (GA) the notice of easement does not have to be express, so the clearest way is in
progress -> maintain and improve the land
b. Community Feed Store v. Northeastern: Where one claiming a prescriptive easement
proves the general outlines of the area of his continuous, adverse, and notorious use
with reasonable certainty, that is sufficient to establish the claim.
d. Other Informal Ways to Transfer Title to Real Property 319-30
i. Improving Trespasser
 Courts are split in allowing owner to remove improving trespasser
ii. Removal of Encroaching Structure
 Traditional View: true owner is entitled to keeping or removing trespassing
property on his land. If not removed, he owns it.
 Modern View: more relaxed. If the trespasser was not a wrongdoer, but under a
misconception or mistake.
 True owner my buy from trespasser the value of the improvements or sell
the property to the improving trespasser
Unjust Enrichment v. Forced Sale
Somerville v. Jacobs: One who, through a reasonable mistake of fact and in
good faith, erects a building entirely upon the land of another with reasonable
belief that he owns the land, is entitled to recover the value of the
improvements from the landowner, or, in the alternative, to purchase the land
from the landowner for the value of the land minus the improvements.
i.
Majority View: a bad faith improver will not be granted the right to
compensation and will be ordinarily required to remove the encroaching
structure
NUISANCE
i. Solutions to Land Use Conflicts
 Privilege: Damnum Absque Injuria: Damage without legal remedies
i. When ∆ can engage in any activity in ∆s property, even though π's property may
be damaged. (some cases)-- Here the courts state that P has failed to "state a
cause of action upon which relief can be granted."
 Π cannot recover damages or obtain an injunction from ∆'s harmful activity.
a.
c.
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
ii.
Π may resort to convincing ∆ on her own; paying for ∆ to stop, or buying ∆'s
Land
 Strict Liability: When ∆ engages in prohibited conduct, then π is entitled to damages
that are caused to π's property
i.
Examples: Firing range in backyard , House of prostitution
 Π can also be entitled to an injunction
 ∆ may engage in the activity, free of liability, if with π's consent: paying,
permission request, etc.
Reasonableness: Moral vs. Policy Judgment by judge focused on the fairness or
justice of allowing or stopping the activity.
i. What would society loose if ∆ was stopped from the activity.

Factors to consider in the decision-making:
a. Harm to π and social utility of π's activity
b. Social benefits of ∆'s activity
c. Social benefits and costs of the conflicting land uses
d. Availability of alternative means to mitigate the harm
e. ∆'s motive
f. Which land use was established first (prior uses tend to have greater
protection).
 Prior Use
i. Prior Appropriation: grants the right to commit the harmful activity to the person
who first establish the land use
ii. Right to Farm: statutes that grant farmers the right to farm w/o liability for
nuisance if their farms were established before the neighboring homes were
built.
iii. Prescription / Adverse Possession: grants the right only after the use has
continued for a substantial period of time, determined by statute.
Remedies to Land Use Conflicts
 Dismissal of the complaint
i.
∆ may file a MTD under 12(b)(6), which will be granted if under Privilege of
Use
ii.
∆ may also file a Mtn requesting Declaratory Judgment that ∆ can use the
land free of liability for nuisance
 Damages
i.
To compensate for harm done, vary from state to state
ii.
Most common types of damages awarded are:
 Cost of Restoration: cost of repairing damage and restoring the
property to its prior condition
 Diminution of Market Value of the Property: the difference in
monetary value resulting from the damage to the property
 Injunction
i.
Court order to ∆ to do/not do certain acts: π may need to establish a prima
facie case for the injunction to be granted
 Purchased Injunction
i.
Conditional Injunction: an order ordering the π to pay ∆ for the stopping of
his activity.
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

iii.
iv.
Typically granted on cases when the economic burden to ∆ seems
unfair or when ∆ had some privilege or prior land use.
Rarely granted, very few cases.
Water Rights
 Legal Doctrines
i.
Armstrong v. Francis Corp.: A possessor of land has a right to reasonable
use of his land, even if that use causes the flow of surface waters from the
land to cause harm to another.
i. Common Enemy Rule: allows property owners the absolute freedom to develop
their property w/o liability for any resulting damage to neighbors caused by
increased run-off of surface water
ii. Natural Flow Rule: grants the injured property owner absolute security against
injury from flooding caused by the neighboring property owner's development of
her property.
iii.
Reasonable Use Test: whether D's conduct caused unreasonable interference
with the neighbor's use of their land
 Balances the social benefit of D's property development
 Availability of cost-effective means to avoid damage
 Gravity of harm to P's property
a. Substantial harm to the neighboring property I likely to be found to be
unreasonable
Support Easements
 Landowners own both the surface and the earth beneath the surface unless they have
sold the surface to others on the form of mineral rights
 Noone v. Price: A landowner is entitled to lateral support from an adjacent land, but
only insomuch as the adjacent landowner anticipated when he first provided the
support.
i.
Lateral Support: Natural support provided to land by an adjoining piece of
land.
ii.
Subjacent Support: Natural support provided to land from directly
underneath its surface.

Easement – a limited right to do something on, or to control the use of, someone
else’s property.
 Right of way – the right to cross someone else’s property
i.
Affirmative Easement- a right to do something on someone else's property
ii. Negative easement – a right to prevent someone else from using
her own property in a certain way.
 Modern View: Negative Easements are
a. Servitudes – describes restrictions on land use
b. Most easements and servitudes are created by agreement among
neighbors.
iii.
Servitude for lateral support of land – created by the common law and each
owner has an obligation to maintain lateral support for neighboring land;
conversely, each owner has a right to prevent her neighbors from excavating on
their property to remove lateral support for her land.
 Land versus structures
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i.
Owners who withdraw lateral support for neighboring land are strictly liable for
any resulting damage to the land.
ii. On the other hand, owners have no duty to support structures on their
neighbors’ land.
iii. Owners do have a duty not to excavate in a negligent manner—they have a duty
to act as a reasonable prudent person would—they cannot use unreasonably
dangerous engineering methods or create unnecessary risks to adjoining
property.
iv. Owners are also obligated to provide temporary support for neighboring land
during excavation and to notify the neighbors if their excavation poses a risk to
neighboring structures.
 Retaining walls
i. If a retaining wall was built of defendant’s land for the purpose of maintaining
lateral support for plaintiff’s land, defendant has a strict obligation to keep the
wall in good repair to avoid loss of lateral support for the plaintiff’s land à this
obligation “runs with the land” and is binding on subsequent owners of the
property.
 The obligation only extends to such support as is needed to support the
neighbor’s land in its natural condition.
 If there is no statute, the owner of a retaining wall has no obligation to keep
it strong enough also to support the added weight of the neighbor’s
building.
 Natural conditions
i. Owner who reasonably should know that her property is subject to landslides
should take reasonable steps to protect property downhill from her.
 Measurement of damages
i. Cost of restoration
ii. The diminution in value of the property; and
iii. In the case for liability for damage to a building, the value of the lost use of the
building plus an amount representing permanent depreciation in the building’s
value.
v. Nuisance
Conduct that causes substantial harm and unreasonably interferes with the enjoyment
and use of neighboring property. Focus is not on the conduct, but on the
consequences.
i. Elements
i.
Substantial Harm: harm that would be offensive by a normal
(reasonable/ordinary) person
AND
b.
Unreasonable Interference: with the peaceable use and enjoyment of the
property
1. (GA) has a right to farm law: if a farm has been operated for one year, before the
resolution comes along, it is shielded from nuisance actions.
10. Questions to Ask
1. How bad is the harm?
2. How bad is the nuisance?
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11.
12.
13.
15.
3. How useful is the nuisance activity?
4. Who was the first to be?
5. Which activity to encourage socially?
6. Who can most cheaply avoid?
7. Who deserves to pay?
Remedies
1. Dismiss the Complaint
2. Damages: must be proven by π… will be applied when harm is capable of
repetition
3. Injunction: if damages are not adequate
4. Purchased Injunction: very rare, not often granted. Π will be required to defray
the cost to the ∆ of complying with the injunction.
Types of Nuisance
1.
Nuisance Per Accidens: nuisance in fact- has to be proved. The use is a lawful
use.
i.
Balancing Test: manner, place and circumstances
2.
Nuisance per Se: nuisance on its face. Once conduct has been established, we
assume that there has been an unreasonable interference
i.
Criminal conduct: meth lab of the neighbor. Against the law, and proving
neighbors actions will grant me recovery even if my property has not been
damaged.
3. Nuisance can be permanent or temporary.
i.
Permanent: of indefinite duration, permanent by nature, or has caused
irreparable harm to π's property.
1. Statutes of Limitations: begins to run from the time of the nuisance to
the time the harm occurred
ii.
Temporary Nuisance: occurs intermittently. (Jack hammering every other
Friday). If ∆ is able to abate it
1. SOL: renews with every harm/injury of the temporary nuisance.
Doctrine of Laches: Neglect to assert a right or claim that, together with lapse of
time and other circumstances, prejudices an adverse party. Neglecting to do what
should or could, have been done to assert a claim or right for an unreasonable and
unjustified time causing disadvantage to another.
1. Laches: A defense in equity under which a party claims that the opposing party
has failed to assert its rights within a timely manner and thus they cannot be
enforced.
 It is similar to 'statute of limitations' except is equitable rather than
statutory and is a common affirmative defense raised in civil actions.
Public vs. Private Nuisance
Public: the only one that can prosecute for it is a public official
i.
Example: students cutting down trees with chainsaws to avoid school
bussed from passing so not to go to school.
Light and Air
1. Easement of Light and Air: A legal right that, when recognized, grants the holder
access to the uninterrupted flow of light and air through another person’s
property.
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
2.
c.
4.
none exists unless created by a contract.
i.
Exception: "Spite Fences" - structures that are erected for the sole purpose
of maliciously harming the neighbor by interfering with her access to
sunlight.
ii.
Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc.: A landowner must
only use his property in a manner that does not injure the legal rights of
another.
(GA) Has passed laws/regulations of Solar Easement (FL included).
Doctrine of Ancient Light: An English common law rule allowing a landowner to
acquire a negative prescriptive easement over sunlight if the landowner had been
receiving sunlight across a neighboring property for a certain period of time.
(NOT THE LAW IN ANY STATE).
i.
Prah v. Maretti: Private nuisance law is applicable in disputes over access
to sunlight.
a.
Policy Consideration: The court thought that protecting solar
energy was commercially valuable.
PRESENT ESTATES & FUTURE INTERESTS
a.
Division of Ownership Over Time
i. Present Estate Holder: has the right to possess the property while her property rights
last
ii. Future Estate Holder: will obtain the right to possess the property when, and if, the
present interest terminated
a. Both may be created by sale, lease, will or trust.
iii. Kinds of Estates
a. Free Hold: the fee simple absolute is the highest form
b. Non-Freehold: the landlord tenant form, no possession of land
iv. Fee Simple Absolute: I own the land (fee), without (simple) conditions (absolute).
b. The Contemporary Estates System
i. Defeasible Fees: present interests that terminate at the happening of the specified
event, other than the death of the current owner
ii. Life Estates: present ownership rights that can be held during the life of a designated
individual.
a. Per Autre Vie: by another life-> an estate that is conveyed from O to A for the life
of A. It will be revert to O upon A's death.
b. Reversion: default of reversion (return of property) to the grantor -> If A sells it,
buyer looses property after A's death and goes back to O.
i.
B does not have a present legal interest on the property since A is still alive
and the conveyance can be changed again. (sister example).
c.
Remainders: when grantor designates a third party to obtain ownership when
the first grantee (A) dies.
i.
Vested Remainder: remainders to persons who are (1) identifiable at the
time of the conveyance, and (2) for whom there are no conditions
precedent [all C has to do is to wait for the natural termination of the
vested estate].
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
iii.
Examples: Dr. G to B for life, then to C's children. If C has
kids, then it is a vested remainder
 Absolutely Vested Remainder: not subject to change
 Vested Remainders Subject to Open: may b divided among
persons who will be born in the future
 Vested Remainder Subject to Divestment: may be destroyed by
an event that occurs after the original conveyance [G to B for life,
then to C, but if C has bought another house at time of B's death,
then to a Ministry. [ it is a vested remainder subject to
divestment].
ii.
Contingent Remainder: will happen if:
 The remainder will take effect only upon the happening of an event
that is not certain to happen
 OR-- the remainder will go to a person who cannot be ascertained at
the time of the conveyance
a. Example: Dr. G-> B for life, then to C's children.
i. G to B is a life estate
ii. To C's children is a contingent remainder because the
children, if none at the time of conveyance, are
unidentifiable.
Determinable Fee Interests
a. Fee Simple Absolute: I own the land (fee), without (simple) conditions (absolute).
b. Fee Simple Determinable:
i.
FI Grantor: Possibility of Reverter (automatic)
 O to A so long as A remains sober. O has some kind of reversionary
interest, since if A gets drunk, it goes back to O.
 If A gets drunk, O does not even need to know it, it automatically goes
back to O.
c.
Fee Simple subject to Condition Subsequent:
i.
FI Grantor: Right of Entry (for condition broken) OR Power of Termination
(discretionary- grantor needs to act) *** Used for adverse possession

example, O to A on condition that A remain sober, then O to have
right to re-enter.
 O must exercise right to re-own. It is not automatic.
d. Fee Simple Subject to Executory Limitation:
i.
FI 3rd Party: executory interest- can be shifting/springing
 O to A for life on condition that A remains sober, but if not, then to C.
 C becomes an executory interest (a third party). -- because it will cut
off the previous estate before its execution, if it happens at all.
e. Life Estate: a free hold estate
i.
FI Grantor: reversion
ii.
FI 3rd Party: Vested OR Contingent
 Dr. G -> B for life, so long as she does not allow lodgers, then to
Carolyn.
 Conveyance can be done for life
 Dr. G to B is a fee simple determinable
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
Carolyn has a vested remainder (waiting patiently), and an
executory interest (by way of B allowing lodgers).
Interpretation of Ambiguous Conveyances
Courts look at policies in order to interpret ambiguous conveyances
Intent of the Grantor: when the language is ambiguous, this would be the first
step the court will make to try and see what the original grantor might have
meant. (this one is paramount)
 To further the free use and alienability of property
 Can be discerned from language in the deed or will, or surrounding
circumstances
Majority View: construe a preference for the construction of
language that avoids a recognition for future interest
Presumption Against Forfeitures: a presumption of the courts against finding a
future interest in the property when the grantors language is unclear or
ambiguous
 Opposes the principle of promoting the grantor's intent
Majority View: If it is possible to interpret the language to avoid loss
of the property by the current owner, the courts will generally adopt this
approach/interpretation.
Contractual Agreement intended: an attempt by the courts to also discern what
the parties would have agreed to had they foreseen the ambiguity
Some other times, the court ignore the presumed intent of the parties
and focus on the social goal of promoting free use and alienability of
property.
Language Interpretation
Majority View: when conveyances include language explaining the
purpose of the transfer, the courts will find that the language is precatory,
and will interpret the conveyance to have transferred all the interests the
grantor owned
Minority View: the courts have found a future interest in the absence of
language clearly creating one.
Most courts are reluctant to this, and rather find it mainly when
the property is donated for future interests.
Fee Simple v. Defeasible Fee
Wood v. Board of Cty Commissioners: A conveyance of land passes the entire
estate of the grantor unless there is express language in the grant indicating
grantor intent to retain some kind of interest.
Fee Simple v. Life Estate
Edwards v. Bradley: Forfeiture restraints are valid as to life estates, but not to
fee simple estates.
Forfeiture Restraint: A restriction on land ownership that terminates the
owner’s interest if he attempts to transfer the land.
Cy Pres Doctrine: to interpret a trust as close as possible, in order to carry out
the settler's charitable intent
The court has the equitable power to reform the trust if necessary to
effectuate the grantor's true intent.
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Courts must determine whether the intent is to aid the particular charity
mentioned in the trust, or would the grantor have intended to the trust
income benefit some other charity if the first beneficiary ended its
existence.
Regulatory Rules
Johnson v. Whiton: A land conveyance that does not directly qualify as one of
the existing types of inheritance will be interpreted to create the most similar estate.
Rule Against Creation of New Estates: A grantor cannot create a new type of
inheritance, only those that are established
Rule Against Perpetuities 628-41
No interest is good unless it must vest, no later than 21 years after the death of some
life in being at the creation of the interest.
Abolished in most states
(GA) 90 years time for the Wait and See Rule
It invalidates future interests unless:
They are "certain to vest"
Or fail to vest
within the lifetime of someone
who is alive (in being)
at the creation of the interest
or no later than 21 years after his/her death.
Interests Subject to the Rule:
Non-vested Interests
Executory interests
Contingent remainders
Vested remainders subject to open: b/c some of the remainders in this
category are contingent and some vested.
Options to purchase property: interests that usually have been classified
as executory interests
Preemptive rights: or rights of first refusal
Interests Immune from the Rule: vested remainders (FSA)
All interests in the Grantor
Vested remainders
Reversions
Possibilities of reverter
Rights of entry
Steps to Follow
Determine state of the title
Decide which interests are subject to the rule
Tests the interests against the rule
Find a validating life
Facts at the time of conveyance created
Are there scenarios of violation?
Are there red flags?
Unborn widow
Late babies (80s) [still not dealing with unborn embryos].
Property I 14
Strike through offending language
Waste
Moore v. Phillips: A life tenant is obligated to maintain the property in good
repair so as to prevent decay and waste and preserve the property for those owners
with future interests.
Justification for having waited is very important, and the courts will place
heavy consideration on it.
Permissive Waste: Damage to property resulting from the failure of a tenant to
exercise ordinary care in maintaining the property for the benefit of owners with
future interests.
Voluntary Waste: Damage to property resulting from a deliberate, destructive
act.
Ameliorative: a waste that raises the value of the property
Racial Conditions 654-58
There is a Constitutional prohibition to conveyances on exclusion of races
The State Action Doctrine: only government is prevent from being racially
discriminatory under the Constitution (14th Amendment). (1955)
People had no constitutional obligation to not be racially discriminatory
on their conveyances (there are now statutes preventing this, like the Civil
Rights Act).
Rule Against Unreasonable Restraints on Marriage 658-61
General Rule: restrictions on a first marriage are invalid, unless meant to support
and not prevent. On a second or subsequent marriage, restrictions are permitted.
A provision that conditions the conveyance upon a divorce will not be upheld,
since society frowns upon divorce.
If the primary purpose is to provide support, and not to prevent marriage, a
court will determine that a restriction of that nature is reasonable.
The law supports one marriage, a spouse can enforce a restriction for a
subsequent marriage.
Lewis v. Searles: A provision containing a general restraint on marriage is valid
if it serves a legitimate purpose.
Restraints on Religion of Marriage: we all have a fundamental right to marry, but
not a fundamental right to inherit, so yes, religious restrictions are possible.
CONCURRENT OWNERSHIP & FAMILY PROPERTY
Rights that can be shared and owned at the same time. More than one person who
have the right to control resources.
a. Varieties of Common Ownership 663-64
i. Tenancy In Common
i.
The default form. If the conveyance is ambiguous, the modern preference is
to find it a tenancy in common, b/c they have the least restriction in the
alienation of rights in property.
1.
All tenants in common have a right to possess ALL of the property (all sisters
have a right to the same room)
2.
The interests are undivided, the right to access is complete.
Property I 15
i.
Even if conveyance is in disproportionate shares, unless it is for the
sale of the property, where the discrepancy may be an issue.
3.
If tenant in common dies, may leave interest by will/devise
ii. Dissolution
1.
Sever the Property: Can partition the interest of the property, and
everyone will get a portion (the preferred method).
2.
Force a Sale: Buy out the interest of another party, or sale the property fully
and distribute the profits
3.
Accounting: what everyone has spent minus what everyone takes, in order
to settle profits from the property.
ii. Joint Tenancy with Right of Survivorship
i. Difference with Tenancy in Common: the proportion of shares in property MUST
be equal.
1.
Equal shares only of the undivided interests in land
2.
Same time (obtained through conveyance)
3.
Obtained by the same title/instrument
4.
All have the same FULL rights to possession of the property
i. If Joint Tenant dies, interest in land automatically goes to joint tenant
remaining (does not go through the estate) -- a Will will surely fail
because the property will not enter his estate.
a. The surviving joint tenant has a Fee Simple Absolute interest in
the property.
ii. Dissolution by Severance: (Partition)by either transferring interest, or sale. Can
only give away a half-interest
iii. Tenancy by the Entirety: a form of joint tenancy available only to married couples
 the law in about 19 states

Cant be severed during the marriage (it can after dissolution of it).

To protect the marital estate: if the H encumbered the P, being held with W,
the creditors of the H could not foreclose on the P to satisfy the debt. Protected
the homestead if the marriage
i. Sawada v. Endo: The interest of a husband or wife in a tenancy by the entirety is
not subject to the claims of his or her individual creditors during the joint lives
of the spouses.
b. Conflicts over Rent and Possession 671-674
i. Olivas v. Olivas: A spouse who moves out of the marital residence by his own choosing
for personal reasons is not entitled to rent from the remaining spouse.
i. The remaining spouse will be liable for rent only if the parties cannot be expected
to live together reasonably on the property and they come to a mutual
agreement that one of them has to move out
c. Property Conflicts over Transfers by One Co-Owner 674-688
i.
Ongoing Co-Tenancy
i. Expense Responsibilities
1.
Must be shared amongst co-tenants
2.
Unless one lives in the property, and others do not, the one living is
'generally expected to pay taxes, insurance, repairs, etc., as long as the
Property I 16
amount does not exceed the fair value of the house'. -- the remainder will
be confided amongst the others
3.
Co-tenants are jointly responsible for takes, insurance, and necessary
repairs.
4.
Improvements: responsibility of the one doing it, unless agreed upon, or
increased value of the house upon sale of it.
ii. Ousting: Co-tenant who is ousted can be entitled to half-the rent of the property
for the time not lived there. Does not have to be a marriage. Can be used for a
claim of re-payment of adverse possession. "A wrongful thing to do"
1.
Wrongful: Rent!
2.
Constructive: Rent?
i. doesn’t necessarily carry the requirement that rent be paid
ii. Family Conflicts
i.
Carr v. Decking: A tenant in common who refuses to join in a lease executed
by the other tenant is not entitled to eject the lessee.
1.
Co-tenants have the right to own property w/o permission from co-owner,
and that includes leasing it.
2.
Ejectment not available as a remedy----> Partition is the only remedy
iii. Death
i.
Tenhet v. Boswell: A lease does not sever a joint tenancy, but expires upon
the death of the lessor.
1.
A partial alienation of one of the joint tenants interests, i.e., the lease, does
not breach any of the four unities because it only conveys, at most, a life
estate per autre vie.
2.
Majority view: (GA)it has to be a complete conveyance of all the joint
interests in order to sever the joint tenancy. Mortgages, leases, etc. do not
sever it. (Ga included here)
3.
Minority view: there is a temporary severance during the term of the lease.
iv. Divorce
i. Kresha v. Kresha: A divorced individual who takes land as part of the divorce
settlement takes the land subject valid encumbrances placed on it by the
former spouse.
1.
(GA) A mortgage does not severe the interest, it has to be a complete
transfer to sever the tenancy, a complete sale.
d. Marital Property 688-707
i. Married Women's Property Act
i. Allowed women to control the right of property and not only Husband
ii. H allowed to disposed of marital property and violated the 14th amendment
ii. Separate Property During Marriage: Spouses own property separately to the extent they
choose to share it or mingle it with their spouses property.
iii. Divorce: property will be divided evenly, in most jurisdictions
i. Community Property Model
1.
A form of common ownership of anything acquired DURING the marriage
2.
What the spouse brings into marriage is the spouse
3.
Does not include property received by gift, devise, bequest or inheritance,
even if received after the marriage or during it.
Property I 17
i. Divorce: Equitable Partition--- Split property 50/50
ii. (GA)Separate Property Model
1.
What the spouse brings into marriage is the spouse's
2.
Whatever you earn during the marriage is yours (always separate)
3.
There is an option to have joint ownership, by private arrangement
4.
You have an obligation to support your spouse
i. Pre-marital Agreements: modern view allows them to be enforced
ii. Homestead Law: an exception. A debtor protection measure
 The surviving spouse and the children in the family home have
some protection from the creditors of the deceased spouse
 Usually limited by statute, so any property in excess of the shield
amount, can't be sold. (In GA it is 5K).
 It is registered, to give the creditors notice. Usually along the
deed registration
Tax Liens
Majority View: IRS can force a sale or a partition to collect a debt
 Determined on a case-by-case basis
Unmarried Partners 707-17
Common Law Marriage: a cohabitation with an implied or express agreement to
hold themselves out as a married couple for a substantial period of time. It was
recognized at some point, but not anymore in every state has different rules for it.
Watts v. Watts: Unmarried cohabitants may each be entitled to a share of the
wealth jointly accumulated during the cohabitation.
 Meretricious Relationship (purely based on sex): a form of high end prostitutionone party provides sexual services and another provides financial support. Courts
refuse to enforce property arguments on this type of relationships.
 If children involved, the courts take a different approach to avoid injustice,
and may deviate from a meretricious status
Same-Sex Partners 717-722
Full-Faith in K law: marriage K in one state need not be recognized in another
state
In 2013, the act said that due process clause was violated, and created an
exception
GA and FL do not recognize same-sex marriages, and neither do the majority of
the states.
Most states allow other forms of protection: power of attorneys, contracts,
domestic partnership etc.
Forfeiture 722-729
Loosing Property because of Wrongful Conduct on the Property: the theory is
that the property itself has been bad and it is only fair to take it away from the "bad"
owners.
Domestic Violence: a most common from of imposing forfeiture.
 If it is a taking of the property, by court order, owners is entitled to just
compensation
Property I 18
Cote v. Cote: A taking occurs when an individual is deprived of all beneficial use
of his property as a result of some state action.
Forfeiture for a Family Member's Illegal Conduct
Innocent Owners : Some statutes recognize the Innocent Owner Doctrine:
allowing the non-guilty party to keep the property that was 'bad' by not knowing
of the 'bad acts' or knew about the crime but did everything w/I power to stop
the 'bad acts' (calling the police, etc.)
Forfeiture must be proportionate: son grows marijuana in backyard and state
wants to take house away from mom--- probably not ok because is is very
disproportionate and unfair.
Some states say battered wives syndrome does not constitute duress (the
sample case), so the property was in fact forfeited.
REAL ESTATE TRANSACTIONS
Structure of the Transaction 835-850
Attorney's Role
Typically the drafting of the legal documents associated with the
Exec Order of 2001- requires attorneys to make sure that clients are not on
terrorist lists
Attorneys cannot launder money through property
Brokers
Usually for transactions at arms length (typically not amongst family).
Both buyers and sellers can hire them
the relations are regulated by statutes in most states
In (GA), the broker and client relation is not fiduciary, but one of
reasonable care
The buyer's broker (Has obligations to the buyer): needs to notify the seller
about any solvency issues or concerns of the buyer
The seller's broker (Has obligations to the sellers)
Needs to disclose to the buyer the condition of the property, if he
knows about it, or not something the buyer can easily discover.
If buyer asks the broker a questions that he has knowledge of, he
most likely would be obligated to answer honestly
Stages of the Real Estate sale
Offer and Acceptance of the Property by the parties
Purchase of Sale Agreement (Contract):
Must be in writing to satisfy SOF
Consideration is the earnest money (payment) by the buyer
Terms Agreed Upon
a. Price, property description, closing information
b. Maybe that seller needs to find another home as soon as closing ends,
and buyer may need the same (sell his house first).
iv. Executory Period
a. It make take up to several months, so that the buyer has time to:
 Financing
 Inspecting the property
Property I 19

v.
ii.
Researching the title (needs to be a marketable title)
Closing
a. Recording of the deed not required, but it must be delivered
b. The deed extinguishes the purchase and sale agreement
 The deed becomes the final contract and no actions can be
brought up
 Only actions for fraud survive the closing, so the sale cannot be
reversed.
vi. After the Closing: It may takes some months
Sales Contract 850-872
i. Sales Contract:
 Statute of Frauds v. Part Performance and Estoppel
1. Burns v. McCormick: A contract granting the conveyance of land generally must
be in writing.
i.
Oral agreements can be recognized if the performance of the parties is
unequivocally related to the real estate (the party is behaving as if there
were a contract)
a. The appropriate remedy may be specific performance or a quantum
merit compensation (may require a separate action)
2. Hickey v. Green: An oral land-transfer agreement may be specifically enforced,
even though it violates the Statute of Frauds, if the party seeking enforcement
detrimentally relied on the validity of the contract and injustice can be avoided
only by specific performance.
i.
Equitable estoppel: If one party to the transaction induces the other to
make a substantial change of position to his or her detriment in good faith
reliance on the first party's actions, then the first party may be estopped
from denying the transaction.
 the parties are estopped because their conduct is inconsistent with
the contractual agreement
Gardner v. Gardner: A party who partially performs on an oral contract may
introduce evidence of the oral contract and be entitled to relief despite
nonconformance to the Statute of Frauds.
Part Performance: allows an oral sales K to be enforced if the buyer
has taken substantial steps to complete the transaction.
a. Substantial or full payment of the purchase price
b. Taking possession of the property
c. Making substantial improvements to the property
 The Parol evidence rule will allow oral evidence of the adverse
party
 The Statute of frauds is overruled if there is sufficient
performance of the alleged oral agreement
 Equity says, if you are too poor to pay, but can perform, we will
make you perform
ii.
Statute of Frauds
 Most instances require a signature in the writing by both parties
 Preferably, the adverse party's signature is required
Property I 20

All is needed is a document that identifies the parties with
 certainty,
 signed,
 indicates the subject matter of the contract,
 and the substance of the performance
What Constitutes a Breach
Misrepresentation and Fraudulent Nondisclosure
i.
Johnson v. Davis: Where a seller of property knows of facts materially
affecting the value or desirability of the property that are not observable
or known to the buyer, the seller has the duty to disclose them to the
buyer.
 seller has duty to disclose defects in property not readily
observable by buyer and not known to the buyer
Fraudulent Misrepresentation: An intentionally false statement of
material fact that induces another to act and results in injury to the party
relying on the statement.
a.
fraud survives the deed
(1) false statement of material fact -> something a reasonable
person would want to know about.
(2) declarant's knowledge that the representation is false
(3) intent that the misrepresentation induce another to act on it
(4) reliance by the other party on the misrepresentation
(5) injury of the other party by the reliance
c.
Caveat Emptor: let the buyer beware - does not
 (GA) Applicable in some states, including FL and AL
i. Majority Rule: in the case of apparent defects, as long as seller does
not affirmatively lie, the buyer is generally charged with notice of what
an inspection to the property would have revealed
ii. Minority Rule: concealment/non-disclosure generally does not
constitute fraud
iii. In Between: fraudulent non-disclosure applies only when the buyer
specifically asks about the defect and is lied to.
d.
Requirements for seller to disclose: Opinions are not fraud!!!!!
i. Majority view: sellers must disclose defects in real property
 Led paint
 Murder in the house (in some states)
 Any hazardous condition
 Insulation
 Asbestos
 Termites
 Landfill
 Neighborhood conditions/danger
Marketable Title: seller must produce a title that is able to be sold
Reasonably free of defect
Property acquired by adverse possession is marketable title
i. Some buyers can request:
Property I 21


Record validity: no adverse possession
Insurable title
When Title is not marketable
Chain of title defects : forged deeds, mis-describing deeds
Encumbrances: conflicting titles and leases, and easements,
covenants, mortgages, etc
Buyers and Sellers Remedies (essentially the same)
Specific performance: injunction to buy/sale
Damages: measured by the difference of the market value and K price
Rescission (or forfeiture of down payment): buyer to get down payment
back and seller to keep it
Vendee's/Vendor's lien: property can be sold to raise the funds to pay
back the deposit or to satisfy the buyer's obligations to pay the purchase
price
Deeds and Title Protection 872-893
Deeds: Essential terms that the deed MUST have
 Must identify the parties
 Describe the property being conveyed with sufficient specificity
 Metes and bounds
 Plats or subdivision map
 CGS (in GA)
 Must state the grantor's intent to convey the property interest in question
 Must contain the signature of the grantor
 Witness by 2 people (most states, not all)
Delivery of the Deed
Must be delivered to the grantee in order to effect the conveyance
1.
Constructive Delivery Doctrine: conduct that demonstrates intent to
transfer, like leaving deed with attorney, court, etc. [must be a third
person].
 Grantor has let go of the deed and someone else is holding it with
instructions to deliver at a time certain.
Types of deeds
Quit Claim Deed: relinquishing claims to the subject property (does not make
warranties or representations) grantor is transferring whatever interests he has.
A valid conveyance, even if at that point grantor does not have the right to
convey
Warranty deeds: Special or General assurances of good deed by seller
Present Covenants: SOL runs when grantee gets deed
 Covenant of seisin: grantor says he owns property conveyed
 Covenant of right to convey: grantor says he owns and has right
to convey
 Covenant against encumbrances : grantor says no encumbrances
exist he has not informed buyer of
Future covenants:

Covenant of warranty: to compensate the buyer if he looses
any money of a failure to convey good title (most used deed)
Property I 22

Covenant of quiet enjoyment: promises no claimant exists with
better title than grantor
 Covenant for further assurances: requests seller to cure title is it
turns out to be defective
Recording Acts
The Recording Systems: Every state has a Recording Act that creates a central
registry where people can records leases, deeds, decrees, etc. The Registry Offices are
in counties, and have to be recorded in the county the land if found.
Kinds of recording acts: Between grantor and grantee, after delivery, there is no
need to record. No claim of rescission.
 Each type depends on how the statute is written
Race Statute: race to the courthouse- the one to record first, prevails
even if he knows that someone else also has title to the property [codifies
the CL of first in time first in right]. NC
Notice Statute: if we have 2 successive purchasers, the second purchaser
prevails over the first if and only if the second purchaser did not know of
the earlier conveyance. If second doesn’t know, he takes over even if he
does not record first.
Race Notice States: (GA){most states} as between successive purchaser,
a successive prevails over first only if no notice of prior conveyance and
second records first.
Sabo v. Horvath: A purchaser has notice only of recorded deeds within his chain
of title, so the purchaser prevails as against any deed that was previously recorded
outside his chain of title of which he did not have knowledge.
Chain of Title: The history of the transfers of a parcel of land.
Wild Deed: A deed not properly recorded and thus not in the chain of title.
 Conveyance made before or after obtaining title of the property.
Majority View: constructive knowledge must be provided.
 How much burden may we place on the grantee.
Minority View: requires a search outside the chain of title
Estoppel by Deed: if landlord purports to convey a property interest she does
not own to a grantee, and the grantor subsequently comes to own the property
interest by receiving the deed, ownership is automatically vested in the grantee.
Shelter Doctrine: allows a bona fide purchase to convey property to a third party
even if the third party is on notice of an earlier conveyance.
Would prevail in any jurisdiction.
Fraud and Forgery
Zurstrassen v. Stonier: A forged deed is void and thus creates no passable
legal title
 (cannot transfer)
 [it does not matter that present holder is innocent]
 (same as stolen property ; except money).
Policy Consideration: protect the innocent purchaser. Find exact facts, to
not deprive the innocent owner
DEFENSES to FORGED DEEDS
Equitable Estoppel Elements
Property I 23
i.
ii.
iii.
iv.
v.
Representation of a material fact
Contrary to fact now asserted
Reliance on the misrepresentation by other party
Changed position to their detriment
2.
Waiver Elements
i. Right exists: Contest forgery?
ii. P knows about the right: Does [X] know what triggered the right? The
forgery?
iii. P intents to relinquish right (knowingly): Did [X] show intent?
a. One can also waive by conduct, but showing intent can be much
more difficult.
3.
Ratification Elements
i. Knows all material facts
ii. Makes affirmative showing of
iii. Intent to adopt
4.
Latches (can also be a defense)
iii. Protective Mechanisms
1.
Marketable Title Acts: the systems attempt to clean forged titles out of the
system that tends to limit the title search to 30 to 40 years.
2.
Torrens System (GA is a voluntary) : a form of registration of titles that
the property owner can convene a quiet title action when there is no D
(does not need to wait for controversy) everyone with interest in the
property is notified, and the court determined and certifies the title, which
is then completely valid. [expensive to institute]
3.
Title Insurance: a right to recover for lost tiles. Companies that sell them
iv. McCoy v. Love: A deed obtained through fraud is generally voidable, not void, by
the defrauded party until it is passed to a bona fide purchaser.
VOID vs. VOIDABLE
i. Forged Deeds are Void:
 Transfer no interest to the grantee
 Cannot be the basis for transfer from the grantee to a subsequent bona fide
purchaser even though that purchaser has no knowledge of the forgery
Fraud Deeds are Voidable:
 Voidable by the defrauded victim only
 If the property passes to a bona fide purchaser w/o notice of the fraud, the
conveyance cant no longer be rescinded
 If the grantor somehow participated in creating her own problem by
negligence, she will be estopped from claiming a right to get the
property back once it has passed onto a bona fide purchaser
Real Estate Finance 893-923
Mortgages: Most real estate transaction in the US are financed by 3rd parties:
banks, credit unions, loan associations, mortgage brokers/companies.
The Note: buyer identifies house and price, and requests purchase prices, and
agrees to pay interest and amount owner, at specified times
Property I 24
The Mortgage: a series of promises, including to pay the note and to pay
property taxes as well as keep up the property and not let it loose its value, and
add insurance to it.
Mortgages pledges the property as security: collateral. Financial
institution can foreclose mortgage if owner fails to pay, and use the sale to
pay off the debt (a forced sale). [some form of tenant in common b/w
owner and bank].
Mortgagor keeps any excess of the note, even on foreclosure (not
anymore really). [some form of equity interest].
 Deficiency judgment: owner can sue for the remainder owed after the
foreclosure of a mortgaged property (created incentive to under-sell).
- bank needs to show the property was sold at or near market value.
Terminology:
 Lender / Mortgagee: has a secured interest in the property
 Borrower / Mortgagor : has equity of redemption (Until note is
paid off)
Mortgagor Protections
 There must be notice of the sale
 Has right to bid at foreclosure sale
 Some states prohibit deficiency judgments
 Many states allow to sue for unjust enrichments
 Many states require a judicially supervised sale: can be waived
by a power of sale
 Some states have a statutory right of redemption (not in GA), the
mortgagor can come in and buy property after sold, for its value,
after the first year.
Foreclosures
Central Financial Services v. Spears: The mere inadequacy of price is not
sufficient to set aside a foreclosure sale unless the price is so inadequate as to
“shock the conscience” of the court.
Foreclosure and its Requirements
An equitable process in which the court can intervene if it thinks the
results are unfair.
It is a form of injunctive process by the court.
Atlanta is one of the Highest foreclosure cities
GA protective institution rather than lenders
Borrower must receive notice from lender that foreclosure will
happen
Must be a public notice that the foreclosure sale will happen
Equity of redemption
Right to redeem up to the point of sale (Borrower should be allowed to
buy back after default until the time the property is sold again).
At CL, no equity of redemption, unless the state has passed a statute
granting this right (none in GA)
The statutory right of redemption creates a protection in the mortgage
area
Property I 25
Sub-Prime Mortgages
Sub-Prime Loans: given to borrowers who would not normally qualify for
current interest rates loans. Now most require a down payment of no less
that 10% of property value.
 (GA) does not do them
Shelter Cost: Comparison of income v. amount allowed to owe (DebtIncome Ratio)
 Usually about 25% (higher in most states now)
 Not allowed to exceed 50% of actual income
 Refinancing is allowed (re-doing loans/interest)
M&T Mortgage Corp. v. Foy: An interest rate above nine percent is a higher
priced loan and creates a rebuttable presumption of discriminatory lending
practices.
 CL Rule: if tenant was there before mortgage encumbered the property, he
gets to stay. If tenant leased after mortgage encumbered property, tenant
can be evicted.
 Mortgages are recorded: must be on record. (P can do due-diligence
and check before lease agreement).
Types of Mortgages ( similar to deed recording)
One can take as many mortgages on the property.
First one gets paid first, and leftovers move on to pay the second
Subsequent mortgagors have notice of prior mortgages
If there is a third mortgage, and number 2 mortgage defaults
Rule 1 First Come First Served: two still gets paid off first
Equitable Subrogation: someone who assumes the rights or obligations
of another steps into their shoes and assumes whatever rights or
obligations they had to the extent necessary to prevent unjust enrichment
 If I pay a debt that you owe, then I get to stand in your shoes with
respect to your interest.
 If your insurance pays off a car wreck, and you get a new car through
them, they are entitled to subrogation rights, and can sue on your
behalf, or gets the money back if you sue and win.
 Can be expressed by Ks, and is in most auto insurance cases, but
courts often apply it to mortgage cases
Installment Land Contracts (Rent - to - Own)
The note piece of the mortgage, w/o the mortgage piece of the mortgage
 Only one document 'buyer makes down payment and signs K under which
buyer promises to pay set amount on set period and seller promises to sell
when K complete
 Generally K say if at any point buyer defaults, seller keeps payments as
liquidated damages and can reclaim the property. ( a remedy for breach
that is preset as a reasonable estimate of what the damages would be in the
event of a breach, it is not a penalty).
 The court question on liquidated damages: is this reasonable that
parties could have anticipated or a penalty for breach? Courts will not
enforce penalties.
Property I 26
Stonebreaker v. Zinn: A liquidated damages clause is deemed a penalty and
thus invalid if the amount is grossly disproportional to the damages already
incurred.
Sebastian v. Floyd: When someone buys a house by using a purchase money
mortgage and then defaults on the payments, the buyer does not forfeit his
entire interest in the property.
Equitable Mortgages
The court can create a mortgage as a matter of equity
 A remedy available for unfair/ unconscionable transactions
Koening v. Van Reken: A deed absolute on its face may be deemed a mortgage
if the grantor is in poor financial condition, the purchase price of the property
for the deed is inadequate compared to market value, and the grantor intended
the conveyance to be an equitable mortgage.
Deeds recite consideration for the property (generally not past the
writing) but (in GA) the consideration can be challenged.