Term
Fundamentals
What is property |
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Definition
| Legal relationship between people in regard to a thing |
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Term
Fundamentals
Name the bundle of rights |
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Definition
1. Right to possess or occupy
2. Right to use or right to enjoyment
3. Right to exclude others
4. Right to transfer/right to alienation of disposal |
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Term
| Fundamentals - What is possession |
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Definition
| i. Possession is physical custody of the property/object |
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Term
| Fundamentals - what is ownership? |
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Definition
| ii. Ownership is having legal title over the property/object |
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Term
| How is real property different from personal property? |
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Definition
i. Destructability - harder to destroy
ii. Mobility - land is immobale
iii. Fixed supply - land is limited
iv. Uniqueness - each piece of land is generally unique |
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Term
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Definition
| recovery of money damages for conversion of chattles |
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Term
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Definition
| - recovery of acctual possession of real estate |
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Term
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Definition
| - recover possession of chattles wrongfully withheld |
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Term
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Definition
| trover + Replevin - recover money damages/possesion of chattles |
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Term
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Definition
| occupation or possession justifies legal protection |
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Term
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Definition
| person has a rihgt to ownership of things she produced or acquires by labor |
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Term
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Definition
| private property results from a contract between individuals and the community |
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Term
| iv. Natural rights theory |
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Definition
| natural law dictates the recognition of private property |
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Term
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Definition
| the law promotes fulfillment of needs, aspirations and legal protection |
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Term
| 2. Acquisition of property |
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Definition
i. A person who has possession prevails against all claimants except the true owner.
ii. Prior possessor prevails over a subsequent possessor |
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Term
| b. Acquisition by capture |
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Definition
i. First possession of wild animals. Pursuit is not enough requirements
a. Mortally wound
b. Capture or
c. Kill and deprive it of its liberty |
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Term
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Definition
| vesting of property rights |
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Term
3. Subsequent Possession
a. Lost Property |
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Definition
Accidentally and unintentionally, does not know where it is.\i. Fidner entitled to possession against everyone except true owner.
ii. True owner has a year to claim property or it is the finders.
iii. Finder is a bailee of the true owner |
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Term
3. Subsequent Possession
b. Mislaid property |
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Definition
voluntarily placed by owner, who forgets where it is. Right of possession belongs to the owner of the premises upon which the property is found
i. Finder gains no rights
ii. Owner of the premises has best title, true owner trumps all |
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Term
3. Subsequent Possession
c. Abandoned property |
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Definition
Owner gives up possession. Finder is the new owner.
i. Finders keepers
ii. Finder has best claim
iii. Owner must intends to abandon and has relinquished all rights. |
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Term
3. Subsequent Possession
d. Treasure trove |
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Definition
| - hidden or concealed for a length of time to assume the owner is dead or undiscoverable. Belongs to the finder against alle xcept for the owner. |
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Term
3. Subsequent Possession
e. Law of salvage |
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Definition
| assumes property is owned by another and is not abandoned |
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Term
3. Subsequent Possession
f. Innocent Owner's defense |
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Definition
| landowner has right of possession when found on his land even if he is unaware of it. |
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Term
3. Subsequent Possession
g. Finder's statute |
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Definition
procedure for finding true owner
i. Post notice in news paper
ii. Report it to police
iii. If true owner doesn't appear in 90 days finder becomes new owner. |
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Term
| 4. Duties of a possessor: |
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Definition
a. Rightful posssession of property by non-owner. Bailee holds property for purpose and is then returned to bailor. Occurs when one takes of property with duty to care for it and return it.
i. Usually arises out of an understanding between parties
ii. Bailee - possessor
iii. Bailor - owner |
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Term
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Definition
i. Does a bailment exist
ii. What is the scope of the bailment?
iii. What standard of liability should have been imposed on the bailee
iv. Who has the burden of proof and how can it be satisfied? |
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Term
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Definition
i. Delivery of physical control over the chattel
ii. Intent on the part of the bailee to exercise control (acceptance) |
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Term
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Definition
i. After elements of bailment are established, bailee has burden of proof
ii. Burden of proof that bailee is at fault is on the bailor |
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Term
| Bailee standard of negligence |
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Definition
i. Strict - P does not have to prove negligence for conversion
ii. Negligence - must be proven for damage, lost or stolen |
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Term
| 5. Subsequent Possession: Adverse Possession |
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Definition
| i. Method transferring interest in land without true owner's consent |
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Term
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Definition
| - one who may be in adverse possession of another's land |
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Term
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Definition
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Term
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Definition
| boundaries should not remain uncertain indefinitely |
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Term
Adverse Possession elements
(OCEANA) |
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Definition
i. Open - visible and apparent
ii. Continuous - must be continuous for statutory period
iii. Exclusive - Cannot have 2 competing groups vying for control
iv. Adverse (Hostile) - Claim to be true owner, permissive use defeats hostility
v. Notorious - more than visible, acvtely claiming title, ascerting your claim
vi. Actual entry - must physically be there. Triggers a trespass action. |
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Term
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Definition
| : lawsuit in order to gain legal title of land from holder of legal title. |
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Term
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Definition
| time of successive adverse possessors can reach the SOL |
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Term
| 6. Rights above and below the surface |
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Definition
i. Landowners normally own everything above or below the surface
ii. Owners can transfer ownership of minerals below the surface.
iii. Owners of minerals have rights to remove them |
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Term
| a. Four types of Water Rights |
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Definition
i. Riparian
ii. Diffused
iii. Ground
iv. Ocean and Navigable |
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Term
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Definition
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Term
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Definition
| - Runoff water that no one wants |
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Term
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Definition
| limited by statute and rules |
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Term
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Definition
| can't own, held by government |
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Term
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Definition
boundry is on a natural stream.
1. Source of title - Right of riparian owner extends to a tract adjoinging if it is held as a single tract originally. |
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Term
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Definition
1. Owner may make unlimited use as long as natural flow is not diminished.
2. Upstream user cannot interfere with the use of downstream users |
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Term
| iii. Prior appropriation rights |
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Definition
| Prior appropriator has rights over later appropriator if the use is more beneficial but the prior appropriator may have to compensate the later. Only used in 8 most arid states. |
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Term
| c. Diffused Surface Water |
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Definition
i. Water that has no channel, generally unwanted.
ii. Liabilites, interests and benefits go with property.
iii. Common Enemy Rule - may combat the enemy no liability of harm to others
iv. Civil Rule/natural flow - any changes to natural state are liable to harm to others.
v. Reasonable use rule - similar to nusiance rule, use it reasonably. |
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Term
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Definition
| i. Run in an underground passage |
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Term
ii. Theories for ground water
1. American Reasonable use |
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Definition
| use is reasonable as long as it is used in connection with overlying land even if it causes harm to others. |
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Term
ii. Theories for ground water
2. Correlative rights rule: |
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Definition
| Cannot take more than ones share for beneficial purposes if it injures the others. |
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Term
ii. Theories for ground water
3. English Rule: |
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Definition
| common law - owner may use as he wishes as long as it is used without malice. |
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Term
d. Underground Water
iii. 2nd Restatemnt |
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Definition
1. Possessor of land or his grantee who withdraws groundwater and uses it for a beneficial purpose is not subject to liability for interference with the use of water by another unless:
a. It causes unreasonable harm lowering water table or reducing artesian pressure.
b. Groundwater forms an underground stream
c. Withdrawl of water has a direct and substantial effect upon the water of a watercourse or lake. |
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Term
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Definition
| Right of support from adjoining land |
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Term
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Definition
| Duty to provide Support from underneath |
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Term
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Definition
| writing by which the transferor or grantor describes the land in question and states it is being transferred to a recipient or grantee |
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Term
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Definition
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Term
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Definition
| gifts in contemplation of death |
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Term
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Definition
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Term
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Definition
i. Voluntary immediate transfer of property to another without consideration
ii. A proper gift is irrevocable |
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Term
| c. Elements of Acquisition by gift (IDA) |
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Definition
i. Intent to make a gift - donor must have intent immediately
ii. Delivery of the Gift - Actual/manual, constructive or symbolic
iii. Acceptance of the gift - Acceptance will be assumed if it is beneficial to the grantee donee. It is not presumed otherwise. |
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Term
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Definition
a. Given in contemplation of death, substiute for a will.
i. Present intent to make a gift at death
ii. Contemplation of death
iii. Proper delivery
b. If death doesn't happen, gift is revoked |
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Term
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Definition
| property changing hands at death without a will |
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Term
7. Intestate succession
b. Per Stripes |
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Definition
| - Estate divided evenly amongst children. |
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Term
7. Intestate succession
c. Per Capita |
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Definition
| estate divided evenly amongst children and grandchildren. |
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Term
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Definition
| 1. Prepared to avoid intestate succession |
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Term
ii. Wills
2. Spousal Rights |
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Definition
| required amounts for spouse |
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Term
ii. Wills
3. Revoking a will |
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Definition
revocable until time of death
a. Can be revoked by a subsequent will,
b. Revocaton by operation off law - some states require revocation after marriage, divorce or birth. |
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Term
| iii. Testamentary Disposition |
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Definition
| transferring of property with a will. |
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Term
iii. Testamentary Disposition
1. English law of wills |
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Definition
| a. Permitted land to be disposed of by will, required to be in writing |
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Term
iii. Testamentary Disposition
1. English law of wills
b. Wills act 1837 |
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Definition
realty and personal property could be devised subject to following requirements
i. In writing
ii. Signed
iii. In front of two witnesses and
iv. The witnesses had to attest to and subscribe the will in the presence of two or more witness |
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Term
a. Direct Restraints on alienation
i. Disabling |
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Definition
| - makes alienability literally impossible |
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Term
a. Direct Restraints on alienation
ii. Forfeiture |
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Definition
| if alienation is attempted land goes back to grantor or gains power of termination. |
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Term
a. Direct Restraints on alienation
iii. Promissory |
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Definition
| agreement between grantor and grantee preventing futher conveyances. By grantee |
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Term
b. Protections of future interests
i. Waste |
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Definition
Unreasonable use by owner of a present possessory estate that reduces the value of a future interest.
1. Measuring unreasonable use
a. Nature of future estate
b. Possibilit if future estate becomes possessory |
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Term
b. Protections of future interests
2. Types of waste |
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Definition
a. Voluntary - Intentionally imparing the value of the property
b. Permissive - failure to make day to day repairs
c. Ameliorating - destruction to increase value is not allowed. |
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Term
b. Protections of future interests
3. Doctrines |
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Definition
a. Estovers - Allowing use of resources for household needs
b. Temberlands - Only use resources from off of land.
c. Open mines - can produce minerals form mines that are open during life estate. |
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Term
| ii. Unproductive property |
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Definition
1. Cannot sell unproductive property without permission from remainderman
2. Morgatge may require life tenant top ay interest and remainderman to pay principal. |
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Term
iv. Concurrent estates
1. 3 types |
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Definition
a. Joint tenancy
b. Tenancy by the entirety
c. Tenancy in common |
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Term
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Definition
a. Presumed at commonlaw
b. Right of survivorship - if one joint tenant the other joint tenant gets remaining rights.
c. Held by 2 or more tenants and must be created in original deed. |
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Term
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Definition
If any are missing, severance occurs. in joint tenancy
i. Time - acquired at same time
ii. Title - acquired under same instrument
iii. Interest - cotenants have exactly same interest
iv. Possession - cotenants have possession of entire eststse. |
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Term
3. Joint Tenancy
e. Severance |
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Definition
i. Inter vivos transfer - destroys unity of time and title.
ii. Transferee is a tenant in common, no right of survivorship
iii. Other joint tenants remain joint tenants with respect to eachother. |
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Term
3. Joint Tenancy
f. Undivided ownership |
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Definition
i. Possessory rights are undivided
ii. Each joint tenant has the right to possess the whole |
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Term
3. Joint Tenancy
g. Partition |
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Definition
i. Division of undivided interests - creates for different wholes
ii. Voluntary of involuntary
1. Voluntary - agreed upon
2. Involuntary - one takes another court
iii. Not an absolute right
iv. Can be restricted by original grant |
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Term
| 4. Tenancy by the entirety |
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Definition
a. Only exists between husband wife
b. Between nonspouses creates a preferred concurrent estate (joint tenancy or tenancy in comon)
c. Has right of survivorship
d. 4 unities are required, but is not severable.
e. Cannot be transferred or encumbered by one
f. Divoce will convert to preferred concurrent estate. |
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Term
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Definition
a. No right to survivorship
b. Fully transferable.
c. Only requires unity of possession.
d. Owns an undivided fractional part of a whole
e. May be partitioned
f. One can adversely possess - there must be ouster
g. Preferred by statutes and common law
h. Heirs that take by intestate usually receiva tenancy in common. |
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Term
| i. Actions tenants inc ommon can bring |
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Definition
i. Partition- sell land divide proceeds
ii. Accounting - bought out buy tenant, other tenant wants share.
iii. Contribution - tenant seeks share from cotenants for repairs |
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Term
10. Common law concurrent estates
a. Different mortgage theories
i. Title theory |
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Definition
1. Mortage (Bank) obtains legal title from date of mortgage
2. JT - mortgage by one joint tenant severs the joint tenancy |
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Term
10. Common law concurrent estates
a. Different mortgage theories
ii. Lien Theory |
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Definition
1. Mortgage is only a lien, no title passes at time of mortgage
2. JT, mortage by joint tenant does not sever the JT
3. States that hold theory strictly apply it.
4. Partial severance - allows lien to attach to half of suvivors interest. |
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Term
10. Common law concurrent estates
a. Different mortgage theories
iii. Intermediate theory |
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Definition
1. Legal title does not pass to mortgage until default
2. Severance doesn't occur until default. |
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Term
b. Disputes between tenants in common, 3 actions
1. Partition |
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Definition
one brings action, sell land and divide proceeds
a. Partition in Kind - divide then sell
b. Partion on sale - sell then divide proceeds |
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Term
b. Disputes between tenants in common
2. Accounting |
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Definition
| Tenant wants to receive his fair share. |
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Term
b. Disputes between tenants in common, 3 actions
3. Contribution |
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Definition
| Tenant wants other tenants to pay their share. |
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Term
| d. Joint Tenant is a Killer |
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Definition
i. Murderer only gets life interest in 1/2
ii. Murderer keeps all
iii. Murderer holds upon a constructive trust to extent of 1/2 of property as of the date victim dies for her life expectancy.
iv. Murderer is chargeable as constructive trustee of entire property for benefit of victims estate.
v. Murder is chargable as construve trustee of half the property for the benefit of the victims estate.
vi. Treat as regular joint tenancy |
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Term
d. Joint Tenant is a Killer
e. Uniform probate code appraoch |
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Definition
i. Seeks to prohibit a killer from benefitting from his wrongful acts. Essentially lose all benefits from the decedents estate.
1. Forfeiture of statutory benefits
2. Revocation of benefits under governeing instruments
3. Felonious and intentional killing |
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Term
Landlord Warranties
1. Covenant of Power to premises |
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Definition
a. Ability to confer legal title
b. Always implied
c. Landlord is warranting that they have the estate they are leasing |
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Term
i. Landlord Warranties
2. Coenant of quiet enjoyment |
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Definition
a. Ability to confer legal possession
b. Also impled
c. Tenat's right cannot be destroyed by LL
d. LL warrants that no third party has right over Tenant's
i. English Rule - LL has to warrant actual possession
ii. American - LL only has to warrant legal possession and T has to bring action to evict any holdover tenant
e. LL not responsible for 3rd parties (Trespassers)
f. Tenant is responsible for getting rid of trespassers. |
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Term
i. Landlord Warranties
3. Implied warranty of habitability |
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Definition
a. LL must take all reasonable action to maintain premise in habitable condtion including duty to repair resedintial leases only.
b. T's lack of duty is subject to laws of waste. Traditionally no duty to repair.
c. Applies to instances where the lease is silent. |
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Term
ii. Tenants Duties
1. Duty to pay rent |
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Definition
| T is obliged to pay rent regardless even if LL fails at his duties unless habitability is breached. |
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Term
ii. Tenants Duties
2. Duty to Take possession |
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Definition
| No duty unless express or implied in lease. |
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Term
ii. Tenants Duties
4. Duty to repair |
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Definition
a. No duty unless T expressly agrees.
b. T may be obligated to rebuild if T completely destroys the property. |
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Term
ii. Tenants Duties
5. Duty to deliver premises at the End of lease |
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Definition
a. T must give back premises at end of lease or be treated as a holdover t
b. Wrongful abandonment - if T fails to pay rent and abandons premises ll can
i. Accept it as a surrender and end the lease
ii. Leave the premises vacant and sue for rent owed
iii. Relet premises to minimize T's damage. |
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Term
ii. Tenants Duties
3. Restrictions on use of leased premises |
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Definition
a. Cannont use the propert y for illegal purpose
b. Cannot commit waste |
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Term
iii. Landlord Duties
1. Duty to deliver possession |
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Definition
a. Right to possess - Breach if someone has superior right to posses at commencement of lease.
b. Actual possession English Rule - LL must deliver actual possession
c. Actual possession American Rule - LL not required to deliver actual possession |
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Term
iii. Landlord Duties
2. Covenant of Quiet enjoyment |
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Definition
| LL promises that neither LL or third party will interfere with T's use and enjoyment of the premises |
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Term
iii. Landlord Duties
3. Eviction |
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Definition
a. Actual Eviction - Physical expulsion or exclusion from possession
b. Partial eviction - denial of possession for only part of the premises
i. Common Law - T's obligation to pay entire rent is suspended until possession of entire premises is handed over
ii. Restatement - T can stop paying rent or terminate lease and seek damages, cannot remain in possession without paying rent.
c. Constructive eviction - LL wrongfully acts substantially and materially depriving T of beneficial use and enjoyment of premises. Premises must be abandoned. |
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Term
iii. Landlord Duties
4. Warranty of Fitness for particular purpose |
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Definition
a. Common law - in absence of express lease provision, a warranty by LL is fit for any purpose.
b. Exceptions - short term lease of furnished residence under construction while rented. |
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Term
iii. Landlord Duties
5. Warranty of habitability |
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Definition
a. LL is required to take all reasonable action to maintain premise in habitable condition including duty to repair residential leases
i. Applies to residential leases for multiple families, not commercial leases
ii. Must give reasonable opputunity and time to cure defect.
iii. Have to show defect effects habitability
b. Remedies Available:
i. Rescission of contract - termination of lease
ii. Damages - compensatory
iii. Rent with-holding
iv. Reformation - reforming the contract of the lease.
v. Repair and Deduct
c. Retalitaory Eviction - LL evicts T in response to T's complaints. (dick move) |
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Term
| i. Factors of a net lease |
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Definition
1. Realtionship of the cost of the curative action and the rent reserved
2. Term for which the lease was made
3. Relationship of the benefit of the T to that of the landlord
4. Whether curative action is structural or non-structural
5. Degree T's enjoyment will be interfered with while curative action is being undertaken.
6. Likelihood that parties contemplated application legal order to make changes. |
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Term
b. Duties respecting fitness and repair of leased premises
ii. Rules for repair: |
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Definition
1. LL has duty to deliver exclusive possession and not interfere with possession if lease is silent.
2. Lessee has duty to not make permissive waste if lease is silent |
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Term
b. Duties respecting fitness and repair of leased premises
iii. Duties of residential landlords
1. Housing code approach |
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Definition
a. If residence does not meet code then it is closed down.
b. Problems
i. Insufficient burearcracy
ii. Time spent prosecuting not at top priority
iii. Only prosecutor could bring action, not tenant
iv. Building closed down if problems not fixed (disencentive for tenants) |
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Term
b. Duties respecting fitness and repair of leased premises
iv. Fitness of leased premises - Landlords tort liability |
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Definition
1. Not to be confused with duty to repair
2. LL is generally not liable to T or 3rd parties for sustained injuries unless
a. Injury occurs in a common area
b. Injury occurs due to latent defects LL fails to disclose
i. Latent defects - Cannot be seen
ii. Patent defects - can be seen
c. Injury occurs due to negligent repairs - only if LL voluntarily undertakes to make repairs.
d. Conditions are dangerous to persons outside the premises
e. Premises leased for admission of public
f. T and LL have agreed that LL will make repairs |
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Term
b. Duties respecting fitness and repair of leased premises
v. LL generally does not have a duty to provide security for tenants |
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Definition
1. Duty to guard against foreseeable risks
2. Commericial LL must exercise reasonable care to protect T from criminal activity
3. It is in a common area. |
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Term
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Definition
| Transferring all the remains off your lease. |
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Term
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Definition
| Transferring less than all that remains even by a day. No privity of contract w/ll or no privity of estate with LL |
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Term
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Definition
1. If LL is silent - can assign
2. LL prohibits - cannot assign
3. W/LL's consent - only with LLs consent
a. Can be limited to only reasonable reasons. Or not? |
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Term
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Definition
1. Notice is unilateral
2. Unlawful detainer - Tenatn that hasn't left after notice of termination and expiration of lease. |
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Term
| ii. Summary Eviction Statutes |
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Definition
1. Forcible Repossession
2. Summary actions for the recovery of possession. |
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Term
| iii. Abandonment / Surrender |
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Definition
1. Tenant quits premises before the end of the term without intent to return
2. Treats T's abandonment or surrender as an offer gives LL 3 Options (or 2 minority options) |
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Term
iii. Abandonment / Surrender
a. Majority options. |
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Definition
i. Accept T's offer to surrender by taking back premises
ii. Wait till lease terminates
iii. Reenter and relet premises on T's account
1. Original T responsible for rent difference
2. Original T responsible if LL cannot find new T
3. Original T may be held responseible if Sub T defaults on lease.
4. LL has to make a reasonable effort to find subT |
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Term
iii. Abandonment / Surrender
b. Minority Options |
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Definition
i. Accept T's offer to surrender - Terminates lease
ii. Reenter and relet premises on LLs own account - Terminates lease
1. Original T responsible for rent difference
2. Original T reponsible if LL cannot find new T
3. T and sub T may be responsible if SubT defaults
4. LL has to make a reasonable effort to find a subT |
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Term
| 3. Methods of Termination |
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Definition
a. Fomalities to end must mirror formalities to begin.
b. If a lease term for 2 years and entireleasehold would require formalities of statute of frauds to end over 1 year then would need writing. If statute does not rquire it then you don't need the writing.
4. Majority Opinion - LL does not have a duty to mitgate damages.
5. Minority opinion - LL has a duty to mitigate damages. |
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Term
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Definition
| Something traditionally characterized as chattle that has become fixed to real property. |
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Term
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Definition
a. Attachment - if property is damaged if it is removed
b. Intent of lease - lease shows intent of chattle to be a part of structure
c. Used for purposes of what land is used for |
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Term
12. Chapter 6 Covenants running with the land
a. Interest that grows out of promises made by landowners
i. Every covenant has a benefit and a burden |
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Definition
1. Benefit to the promisee
2. Burden is on the promisor
3. Running - future owner may be bound by the covenant or a future owner may be able to enforce the covenant. |
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Term
12. Chapter 6 Covenants running with the land
a. Interest that grows out of promises made by landowners
ii. Estates |
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Definition
1. Dominant Estate - Estate that has the benefit
2. Servient Estate - the state that has the burden |
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Term
12. Chapter 6 Covenants running with the land
a. Interest that grows out of promises made by landowners
iii. Covenant v. Easement |
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Definition
1. Covenant: landowner promises to restrict use of his land
2. Easeement: owner promises use of rights on his land |
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Term
| i. Steps to analyze covenants (assignments) |
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Definition
1. ID the covenants benefit and burden
2. ID the interest in land that is associated with each
3. Has either been transferred
4. Determine wheter or not burden or benefit runs with interest transferred |
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Term
4. Determine wheter or not burden or benefit runs with interest transferred
a. Intent |
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Definition
i. Must have intended successors in interest be bound by the terms of the covenant.
ii. May be inferred from circumstances surrounding creation of covenant or may be evidenced by language in conveyance. |
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Term
4. Determine wheter or not burden or benefit runs with interest transferred
b. Must touch and concern land |
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Definition
i. Must effect use and enjoyment of land
ii. Promises that between LL and T that are considered to touch and concern
1. Paying rent
2. Paying taxes
3. Making repairs
4. Providing service
5. Promises Not to assign or sublet
6. Renew or convey reversions |
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Term
4. Determine wheter or not burden or benefit runs with interest transferred
c. Presence of both horizontal and vertical privity
i. Horizontal Privity |
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Definition
1. Rests on relationship between original parties and the covenant
2. Requires that at the time the promisor entered into covenant w/the promisee the 2 shared some interest in the land independent of the covenant
3. 3 kinds
a. Relationship of tenure (applies to LL, T covenants)
b. Simultaneous interests
c. Instantaneous privity |
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Term
4. Determine wheter or not burden or benefit runs with interest transferred
c. Presence of both horizontal and vertical privity
ii. Vertical Privity |
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Definition
1. Between original parties and transferee/grantee or between subsequent grantees
2. To be bound, successor in interest to the covenanting party must hold the entire durational interest held by the covenanter at the time she made the covenant.
3. Only assignments have vertical privity, not subleases. |
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Term
| ii. Assignments effecton the original covenantors liability |
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Definition
1. T who assigns the leasehold does not escape liability on the lease covenants
2. Generally only an express release of liability by the LL will release T
3. T can be released from liability by a modification of the lease terms by the LL and the assignee, without original T's consent after the assignment has taken place. |
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Term
b. Covenants between LL and T
iii. Effect of assignment on Tenants benefits |
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Definition
1. LL and T make covenants in lease
2. LLmakes promises that benefits T's interest in land, run with the leasehold estate assignment.
3. Assignee can enforce LL's obligations even though they never directly intereacted. |
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Term
b. Covenants between LL and T
iv. Running of a Ts covenant to pay |
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Definition
| covenant by T to insure premises for LLs benfit is personal and does not touch and concern Ts estate unless there's also some obligation to use insurance proceeds to repair physical damage. |
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Term
b. Covenants between LL and T
v. Characterizing a Ts duties as rent |
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Definition
| Ts covenant to pay rent does not touch and concern land. |
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Term
b. Covenants between LL and T
vi. Duty to refund Ts security deposit |
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Definition
1. Generally when LL assigns by transferring rents and reversion interest to a new owners, burdens of any covenant made by original LL in the lease that touch and concern the land will become new owners liabilites. Same is true of benefits of covenants given by T to LL in the lease
2. After selling premises, original LL remains liabile to T on a contractual basis and is ultimately liable to T if he experiences a breach of the lease covenants at hands of new owner. T has 2 different parties against whom he can enforce express covenants that touch and concern. |
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Term
b. Covenants between LL and T
vii. Effect of assumption by the assignee |
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Definition
1. Assignments cannot be implied, they actually have to take place
2. Cannot be an implied assumption by the assignee, it must actually occur.
3. Privity of estate and contract exists even if there is an assignment unless an assumption agreement has been made or unless assignee goes out of possession. |
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Term
b. Covenants between LL and T
viii. Modification of the lease as a discharge of the assignor. |
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Definition
1. After an assignment is made LL and T2 (the assignee) may mutaually agree to modify the lease. If done without t's consent and the modification makes T1's duties more burdensome, then T1 is released form liability.
2. 2 reasons for this
a. Suretyship law - detrimental modification of the obligation by the principal w/o the surety's consent discharges the surety
b. Contract Concept - modification of T's obligation by T2 is regarded as creating a new contract between T2 and Ll; old contract between T and LL is ended and T is discharged.
3. If T is released from LL then they cannot be forced to pay rent
4. Novation - forming of a new contract to replace original contract.
5. If novation changes rquirements then T1 will not be responsible. |
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Term
b. Covenants between LL and T
ix. Can a tenant that has made an assignment enforce a benfit |
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Definition
1. Under privity of estate the assignor cannot
2. Under contract estate |
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Term
b. Covenants between LL and T
x. Horizontal and vertical privity |
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Definition
1. Regardless of length of reserved portion of sublease, its enough to breach chain of vertical privity, hence a sublease there is no LL T relationship between LL and subtenants and neither benefits nor burdens associated with T1's estate will run at law.
2. Subtenatn cannot get damages for breach of covenants made by Ll in the master lease, benefit will not run
3. Incorrect use of terminology has no legal effect. |
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Term
b. Covenants between LL and T
xi. Effect of T's reservation of a right of entry - |
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Definition
| when T transfers the entire remaining term to T2 but reserves a right of entry, then that does not convert an assignemnt to a sublease. |
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Term
b. Covenants between LL and T
xiv. Enforcement of implie covenants by subtenants |
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Definition
1. Implied covenants can allow a subtenant to get an injunction of damages
2. Benefits run regardless of whether there is vertical privity |
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Term
b. Covenants between LL and T
xv. Recovery by assignor or sublessor of the benefits of the transfer |
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Definition
1. T who wishes to assign or sublease can often do so at a proffit
2. If government condemns alnd or building is destroyed by natural disaster either lease is terminated or if rent is prepaid T2 should get a prorata rebate when term is cut short. |
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Term
b. Covenants between LL and T
xvi. Vertical Privity on the LLs side - |
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Definition
| All could inter into a transfer that was analogous to a sublease on the Ts side. Transfer of less than LLs entire interest, situations benefit and burden of LL will not run to such parties at law since they don't have vertical privity with the Land Lord |
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Term
b. Covenants between LL and T
xvii. Duty to Pay Rent |
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Definition
| Under sublease the burdens don not run |
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Term
| c. Covenants between owners in fee |
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Definition
1. Whether some future owner is going to be bound by any covenants previous owners had
2. Deals with covenants associated with land held in fee rather than under lease
3. One who acquires real estate may become personally liable for the burdens of covenants made by a previous owner, even if the new holder of land has made no express promise to assume those obligations.
4. Benefit - one who buys land that has protection of covenants made in the past may be able to enforce those covenants thogh they were never expressly assigned to him or her. |
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Term
c. Covenants between owners in fee
ii. Externalities |
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Definition
1. Free Rider Problem - landowner benefits from the benefits of other owners
2. Cost Problem - cost money to get together and negotiate |
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Term
iii. Running Covenants at law
1. Horizontal privity
a. Relationship of Tenure |
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Definition
| HP between LL and T, nothing else will do |
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Term
iii. Running Covenants at law
1. Horizontal privity
b. Simultaneous interests |
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Definition
| Simultaneous interest in same piece of land |
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Term
iii. Running Covenants at law
1. Horizontal privity
c. Instantaneous Privity |
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Definition
i. Covenant placed into deed conveying effected parcel of land, at moment transfer occurs there is Horizontal privity
ii. Majority - Most courts accepted
iii. Minority - does not require horizontal privity |
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Term
iii. Running Covenants at law
1. Horizontal privity
d. Bigalow Test |
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Definition
| effeccts value that it touches and concerns |
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Term
iii. Running Covenants at law
1. Horizontal privity
e. Clark Test |
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Definition
| reasonable standard shows that it touches and concerns |
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Term
iii. Running Covenants at law
a. Rule for Vertical Privity |
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Definition
i. Full estate must be transferred
ii. Adverse possession does not grant vertical privity
iii. 3rd party beneficiaries have no Vertical Privity |
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Term
iv. Types of Owners associations
1. Planned Unit Development |
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Definition
a. Each owner holds title to his dwelling
b. Title to common area probably heald by owners association |
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Term
iv. Types of Owners associations
2. Condominium |
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Definition
a. Closely regulated by statutes,
b. Each owner holds title to his dwelling, and undivided fractional share of common areas as a tenant in common
c. Owners assocation has maintenance responsibility of common areas but does not own interest |
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Term
iv. Types of Owners associations
3. Cooperative Apartment |
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Definition
a. Owner association holds title to entire project
b. Each dwelling holds stock in the association and an inseperable proprietary lease.
c. Association is responsible for mainteance of entirety except for intereiors of individual units |
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Term
| 2. Affirmitive covenants to pay |
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Definition
| majority finds that thery touch and concern the land. Minority disagrees |
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Term
| 3. Association activities what touches and concerns |
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Definition
i. Repairs
ii. Purchasing pool chemicals
iii. Employing life guard - arguable
iv. Decorating for residents parties - arguabl
v. Sponsored lottery with prizes - dubious
vi. Bingo nights with prizes - no
vii. Providing manicure/pedicare services - no
b. Repair of common area for long perid ctouches and coners land |
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Term
| 4. Limitations on ammount of assestments |
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Definition
a. Covenants may fix assestments permanently
b. Careful drafters will include the following
i. State initial annual assestment, permitting increases only in reference to an inflation
ii. Clearly mark location of common area where assestments can be spent and the sorts of permitteded expenditures
iii. Auhorize special or captal assesstments only in limited amounts for specified purpose
iv. Give covenant an initial life
v. Make association a non-profit |
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Term
| 5. Enforcement powers of homeowners associations |
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Definition
a. Can use restrictions imposed by way of covenants in a subdivision are enforceable by other lot owners
b. Covents delegate enforcement powers to the association so it can sue an owner whos lot is in violation |
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Term
| a. Covenants running with the land |
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Definition
i. ID Covenants benefit and burden
ii. ID the interest in land that’s associated with both
iii. Has either interest been transferred
iv. Determine whether the burden or benefit runs with the interest tranasferred
1. Intent
2. Touch and concern
3. HP and VP
a. Tenure
b. Simultaneous interests
c. Instantaneous privity
d. Notice - Writing because of SOF |
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Term
d. Equitable servitudes - Alternative theory of recovery
i. Require |
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Definition
1. Intent
2. Touch and Concern
3. Notice
a. Actual
b. Implied - in the title found through title search
c. Recorded incumberance - found at recording office, assumes all encumbrances have been researched. |
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Term
d. Equitable servitudes - Alternative theory of recovery
ii. Enforcement in subdivisions of common plan |
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Definition
1. Groups of lots
2. Clustered or nearby
3. Most are burdend by identical/similar covenants
4. Gives Notice
a. Apparent - all houses in given neighborhood
b. Constructive - available in public record. |
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Term
d. Equitable servitudes - Alternative theory of recovery
iii. Reciprocal Negative easement - |
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Definition
1. right to prevent another person from making certain uses of his land. A restrictive covenant
2. Imposes burden on covenant on land which no covenant was expressed |
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Term
d. Equitable servitudes - Alternative theory of recovery
iv. What land is benefited? |
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Definition
| All lots are benefited within respect of covenants in common plan |
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Term
d. Equitable servitudes - Alternative theory of recovery
v. Statute of Frauds |
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Definition
| Requires conveyance of land to be in writing |
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Term
d. Equitable servitudes - Alternative theory of recovery
vi. Common Plan |
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Definition
1. Dinstinct uses of Common Plan Concept in Subdivision covenants
a. Defines the extent of the benefited land
b. Allows contract to include, lots that have been transferred by the developer to other owners at the time the covenant was imposed on the burdned lot in question
c. Allows contract to imply a covenant on a lot which had no express covenant imposed upon it by the developer
d. Gives notice of implied covenants to persons who buys lots burdned by such covenants. |
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Term
d. Equitable servitudes - Alternative theory of recovery
vii. Imposing covenants by declaration |
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Definition
1. Covenants are inserted into deeds for individual lots, but are commonly forgotten or have variations from one lot to the next
2. Reference in individual deeds to a declaration of covenants resolves this |
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Term
d. Equitable servitudes - Alternative theory of recovery
viii. Effectiveness of declaration |
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Definition
1. Ordinances usually require approval of the governing body
2. Developers prepare a precise map - subdivision plat
3. Once it is recorded it becomes part of the chain of title
4. Upon sale of the first lot it is effective, and declaration becomes a binding contract with the 2nd party |
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Term
e. Interpretation, Amendment and Termination of covenants.
i. Restriction of use |
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Definition
| i. Restriction of use is disfavored to restrictions on construction |
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Term
e. Interpretation, Amendment and Termination of covenants.
ii. Resedential or dwelling |
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Definition
1. Residential applies to where people make their home
2. May only apply to attached houses |
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Term
e. Interpretation, Amendment and Termination of covenants.
iii. Family - Single family residence - |
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Definition
| Spouse and immediate blood relations |
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Term
e. Interpretation, Amendment and Termination of covenants.
iv. Covenants barring group homes |
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Definition
1. Several states have adopted statutes making the covenants unenforacable
2. Court may also conclude, absence of statute that enforcement of restriction violates public policy
3. Fair housing act may also prevent enforcement. |
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Term
e. Interpretation, Amendment and Termination of covenants.
v. Fair housing act |
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Definition
| v. Fair housing act prevents discrimination of children, not elderly |
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Term
e. Interpretation, Amendment and Termination of covenants.
vi. 14th amendment |
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Definition
| prohibits racial discrimination by state, Equal protection clause protects private acts. |
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Term
e. Interpretation, Amendment and Termination of covenants.
vii. Waiver, abandonment, acquiesence |
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Definition
1. If no one attempts to enforce covenants in the face of a substantial number of violations the owners must give up their rights to enforce
2. Defense to enforcement of a covenant |
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Term
e. Interpretation, Amendment and Termination of covenants.
viii. Theories to opposing enforcement of covenants |
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Definition
1. Unclean hands
2. Express Waiver or release
3. Estoppel
4. Merger - aquiring ownership of all benefitted and burdned land, covenant is extinguished automatically
5. Experiation
6. Taking in eminent domain
7. Tax sales |
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Term
e. Interpretation, Amendment and Termination of covenants.
ix. Amendments and rules |
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Definition
1. Both must agree
2. 3 conditions
a. Right to amend and method must be in original documennt
b. Right to amend such restrictions implies only those changes contemplating a correction, improvement, or reformation of the agreement rather than destruction of it
c. Restriction may not be illegal or against public policy |
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Term
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Definition
1. Right or interest in the land that allows use, not possessory
2. Sometimes the enforcement of an easement will exclude others making it look possessory but its really an interest
3. Must be recored |
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Term
13. Easements Chapter 7
ii. Is an easement transferrable? |
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Definition
1. Is a set term
2. In writing
3. Whether its for a designated area |
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Term
13. Easements Chapter 7
iii. Appurtenant |
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Definition
| Easement or profit benefits a parcel of land |
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Term
13. Easements Chapter 7
iv. Easements In Gross |
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Definition
| easement or profit which doesn't benefit any piece of land |
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Term
13. Easements Chapter 7
b. Methods of Creation
i. Grant and the effect of informal grant or licensest |
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Definition
1. Most created expreseley by an instrument in writing
2. Darftsmen should describe location of easement of profit so that surveyor can run out the location by reference to the document alone.
3. Reservation - Grantors instrument of conveyance may simply provide grantor reserves an easement or profit, describing purpose, location and duration according to the principles of granting such interests.
4. Exception - witholding title to a piece of a larger parcel of land
5. No reservations may be made in favor of a stranger to the deed |
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Term
13. Easements Chapter 7
b. Methods of Creation
ii. Implication |
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Definition
| 1. Contract by agreement based on surrounding the acctual contract but original contract failed to recognize |
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Term
13. Easements Chapter 7
b. Methods of Creation
ii. Implication
a. From prior use (quasi) |
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Definition
a. From prior use (quasi)
i. Severance of unity of title - Must have had a single owner at some point
ii. Prior use continued after severance
iii. Reasonable necessity
iv. Continuous
v. Apparent - Based on prior use
1. Visible
2. Reasonably discoverable
3. Duty to enquire |
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Term
13. Easements Chapter 7
b. Methods of Creation
ii. Implication
b. From necessity |
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Definition
i. Requirements
1. Unity of title
2. Necessity for egress and ingress from appurtenant land existed at time of severance
ii. Strict necessity
iii. Reasonably necessary
iv. Valuable convenience |
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Term
13. Easements Chapter 7
b. Methods of Creation
ii. Implication
b. From necessity
c. From plat |
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Definition
i. Broad unity rule
ii. Intermediate or beneficial of full enjoyment rule
iii. Narrow or necessary rule |
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Term
13. Easements Chapter 7
b. Methods of Creation
ii. Implication
3. Location of easement |
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Definition
| 3. Location of easement can be determined by owner of servient estate |
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Term
| iii. Easements by prescription - |
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Definition
1. manner of acquiring an easement in anothers property by continuous and uniterrupted use in satisfaction of the statutory requirements of adverse possession
2. Rule
a. Open
b. Uninterrupted
c. Peacable
d. Notorious
e. Adverse under claim of right - Claimed right to use, cannot grow out of permissive use
f. Continuous for Statute of limitations |
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Term
| iv. Public easements based on long continuous |
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Definition
1. prescriptive easement may be obtained based on long continous use by the public
2. must show use and enjoyment of land was exclusive adverse continuous uninterrupted open and notorious and under a claim of right
3. implied common law dedication - one who permits/invites public to use her land for a time may be deemed to have made an offer of a dedication
4. Public trust doctrine - recognizes public rights to beach
5. Customary rights doctrine - creates public beach access |
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Term
| vi. Divisibility of easements |
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Definition
| when original holder grants portion of his rights to another retaining the remainder of his original rights for his own use |
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Term
vi. Divisibility of easements
1. In gross |
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Definition
a. Exclusive or non exclusive - can only divide if grant is exclusive
b. Whether exercise of divided easement complies with terms of original grant? |
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Term
vi. Divisibility of easements
2. Divisibility |
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Definition
a. Burden division places on servient owner must not exceed that contemplated by parties in original grant
b. Dcourts are generally unsympathetic if the only objection is they want part of the compensation
c. Exapansible easement - permit expansion upon payment of previously agreed upon accounts. |
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Term
Methods of Creation
vii. Servient owner may relocate without |
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Definition
| consent of dominant if grant does not show contrary intent, but not allowable if grant spells out the location |
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Term
Methods of Creation
viii. Extinguishment |
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Definition
viii. Extinguishment
1. End of an easement
2. Typically spelled out in grant
3. Prudent drafter would make them perpetual
4. Ways an easement terminates
a. By its own terms
b. Termination of the grantors estate
c. Express written release
d. Merger
e. Abandonment
i. Intent is difficult to establish
ii.
f. Estoppel
g. Adverse possession
h. Eminent Domain - Condemnation
i. Grant of license to obstruct by easement of owner
j. Destruction of either estate
k. Tax sale - made superior to easement by statute
l. Superior mortage rights - foreclosure of superior mortgage will wipe out an easement |
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Term
14. Contracts for Sale of Land - Chapter 8
a. Real estate brokers
i. Steps of realty transfer |
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Definition
1. Execution of a contract of sale
2. Inspection of the property and examination of fsellers title by the buyer
3. Arranging of financing by the buyer
4. Closing or settlement
5. Recording of the deed and any mortgage or other security instrument the buyer has executed |
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Term
14. Contracts for Sale of Land - Chapter 8
a. Real estate brokers
ii. Brokers Authority - |
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Definition
is to show, advertise and market, he cannot force sale against sellers will.
2. Can sell if language of listing agreement is specific enough, may give broker power of attorney to enter into a contract to consumate sales. |
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Term
Chapter 8
a. Real estate brokers
iv. Multiple listing services |
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Definition
1. Lists details of house or property
2. Published in multiple listeing services book, operated by local board of realtors
3. Access is often essential to a successful marketing of property |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne |
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Definition
1. Ensures seller has the title
2. Gives buyer time to gather money
3. Allows seller time to find a new home
4. Gives buyer time to sell old home |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
ii. Essential terms writings |
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Definition
1. Parties
2. Subject matter
3. Consideration
4. Price
5. Promise upon both sides |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
iii. Who must sign |
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Definition
| buyer minority requires the seller |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
iv. Acts of Part Performance |
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Definition
1. Payment of part of purchase price
2. Going into possession of realty
3. Making substantial improvements |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
v. Contract must be proven |
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Definition
| Part performance doctrine takes ocntract out of statute of frauds permitting enforcement in equity despite absence of a substantial writing. |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
vi. Theories of Part performance
1. Detrimental reliance |
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Definition
a. Based on estoppel and articulated in the restatement of contracts.
b. Doesn't allow SOF to get in the way of Part PP because you cannot be reliant a contract that you aren't aware of. |
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Term
14. Contracts for Sale of Land - Chapter 8
b. Statute of Frauds and Part performacne
vi. Theories of Part performance
2. Evidentiary |
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Definition
| SOF has an evidentirary role, and we demand writing because it is easy for one of the parties to invent a contract where none existed. |
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Term
| vii. Damages as a remedy to Part Performance |
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Definition
1. PP can be used in equity for a suit in specific performance
2. Can't get damages for Part performance |
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Term
| c. Remedies in real estate contracts |
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Definition
a. Specific performance - forces sale of property
b. Damages - property stays with vendor and is sold to someone else |
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Term
c. Remedies in real estate contracts
ii. Date of Valuation |
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Definition
1. Consider damages recoverable by the seller when the buyer breaches
2. measures of loss of bargain damages measure the property’s market value as of the date of the breach
3. Courts frequently seem to assume that the resale price is good evidence of market value, and use. |
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Term
c. Remedies in real estate contracts
iii. Measurement of Value |
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Definition
| Courts rely on resale because it is pertinent measure of value because otherwise they must act on the basis of appraisal testimony, which is notoriously imprecise. |
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Term
| iv. When can the remedy for breach include compensatory damages |
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Definition
1. English Rule - when sellers breach is a result of title defects, buyers remedies is generally to return of his deposit, unless seller refused to convey or is guilty of fraud,
2. American rule - buyer may obrain benefit of bargain damages irrespective of the nature of the reasons for the sellers breach |
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Term
c. Remedies in real estate contracts
iv. When can the remedy for breach include compensatory damages |
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Definition
1. English Rule - when sellers breach is a result of title defects, buyers remedies is generally to return of his deposit, unless seller refused to convey or is guilty of fraud,
2. American rule - buyer may obrain benefit of bargain damages irrespective of the nature of the reasons for the sellers breach |
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Term
c. Remedies in real estate contracts
v. Incedental and Consequential (compensatory) damages - Foreseeable |
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Definition
1. Title exam, survey, attorney's fees in preparation of closing - always
2. Airfore for negotiation related travel - unrecoverable
3. Carrying costs at buyers present location - difficult, like not part of sellers breach
4. Loss of favorable financing - sometimes
5. Cost of temporary quarters - often |
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Term
c. Remedies in real estate contracts
vi. Other remedies |
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Definition
1. Restiution: return of money (deposit) with interest
2. Reimbursement - of costs expended in preparing for purchase, such as title examination, survey, property inspection and closing fees. |
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Term
c. Remedies in real estate contracts
vii. Grounds for denial of specific performance |
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Definition
1. Courts routinely grant specific performance for either party
2. Purchaser can get speicifc performance with an abatement in the price if purchaser cannot fully perform
3. Situation where performance may be denied
a. Produces unjust or unconscionable results
b. Purchaser has not notice or proper contract
c. Uniqueness is of no real consequence to the buyer
d. Conditions that have not been fulffilled, or if P is in substantial breach
e. Contract gives vender sole right to fofeit the purchasers earnest money as liquidated damages |
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Term
c. Remedies in real estate contracts
viii. Earnest Money - |
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Definition
| deposit money made in good faith |
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Term
c. Remedies in real estate contracts
ix. What date is reasonableness Meaasured? |
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Definition
1. By the time the contract is entered into, not necessarily the date of breah
2. By date of breach, hold that forfeitted amount must not be unreasonably disproportionate to actual damages suffered.
3. Other courts require reasonableness at both dates. |
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Term
c. Remedies in real estate contracts
x. How large a forfeiture is reasonable |
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Definition
1. Retention of large sums of deposite despirte that they plainly exceed actual damges
2. Set liquidated damages as a % of sales price |
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Term
d. Time of Performance and Tender
i. When a contract for sale of real property does not specify the time is of essence, |
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Definition
| eith party is entitle to reasonable adjournement of the closing date. |
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Term
d. Time of Performance and Tender
ii. When time is not of the essence |
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Definition
1. Part who is late but tenders performance w/in reasonable time after agreed closing may nevertheless
a. Enforce contract by specific performance
b. Rescend contract and receive earnest money if other party refuses but
i. Party who is late in tendering performance is liable for interm damages caused by delay and
ii. Party who is late is barred from recovery of damages ainst the other party if later repudiates the contract. |
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Term
14. Contracts for Sale of Land - Chapter 8
e. Title to be conveyed
i. 2 methods buyers employ for title searches |
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Definition
1. Obtain a written attorneys opinion on the title
2. Obtain title report from title insurance company |
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Term
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Definition
| abstract concept of legal conclusions representing interests in parcel of land are arranged and owned |
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Term
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Definition
1. One which a court will force upon an unwilling contracutally bound purchaser
2. Free of all reasonable risks of atack
3. Implied promise that the seller will convey marketable title is read into the contract
4. Can be varied in either direction, but only by strong language. I promise to convey perfect title, or I will convey whatever title I have but with no promise that I have any.
5. Less forceful langauuge will be interpreted as promise to convey marketable title at buyer's satisfaction
6. Failure is considered a material breach |
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Term
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Definition
1. Contracutal variant of marketable title
2. More lenient standard ons eller
3. Reputable title company would approve of and insure |
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Term
f. Insurable Title
avoid carelessness. |
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Definition
| ii. Insurable is not Marketable |
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Term
f. Insurable Title
iii. Defect agreed to in contract |
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Definition
| purchaser cannot object to the taking of a title which is subject only to defects mentioned and agreed to in the contract |
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Term
| iv. What defects effect Marketability |
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Definition
1. Encumbrances
2. Visible or beneficial encumbrances - (powerlines)
3. Limited Access
4. Encroachments
5. Title by adverse possession
6. Ordinance violations
7. Hazardous waste
8. Existing adverse possessors
9. Violations of covenants
10. Title Links not record
11. Unreasonable risks of litigation |
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Term
| v. Bringing title examination down to the closing |
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Definition
| Buy may want to check public record immediatel prior to accepting delivery and tendering cash, so that the buyer does not find a last minute defect |
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Term
| vi. Merger of title covenants - |
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Definition
1. merger holds that if a puchaser has an objection to title she must raise it prior to accepting delivery of the eed
2. Accepting the deed means the buyer is satisfied
3. Rule says that contracts tilte covenants are merged into the deed and does not apply to most non-title matters such as covenants regarding physical condition of property.
4. Merger will not operate wheen there is fraud or mutual mistake |
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Term
| vii. Type of deed to be delivered |
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Definition
1. Covenant that title will be marketable does not address the nature of the deed tendered at closing
2. Good drafters will specify the type of deed to be used
3. Any deed will transfer what the grantor has so long as a covenant in contract calling for marketabile title necessary implies a warranty deed will be given
4. Contract clause provindg the conveyance to be a quitclaim deed does not logically negate the implied covenant that title will be marketable |
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Term
g. Equitable conversion
i. Two Relevant inquiries |
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Definition
1. Characterization of what is owned by each party during executory period?
2. Which party must absorb which Risks? |
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Term
| 1. Long Term installment contract |
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Definition
| purchaser takes possessoion of real estate immediately upon execution of contract, pays for a number of years and receives deed after last payment |
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Term
| 2. Short term ernest money contract |
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Definition
| single payment in full price at a closing date. |
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Term
|
Definition
1. Equitable conversion occurs only if there is a contract that equity would specifically enforce
2. No conversion if at the relevant time there is only an unaccepted offer or unexercised option
3. If an enforcable contract exists at time in question it is immaterial that it is later rescinded, abaonded or never enforced. |
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Term
| vi. When conversion is inapplicable |
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Definition
1. To avoid results they would consider unfair
2. Will not occur if contract is uneforcable. |
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Term
|
Definition
1. Equitable interest is real property and subject to judgment liens
2. the argument that imposing the lien would require the contract purchaser to examine the title and search for the liens before making each payment is dubious; in fact, the jurisdictions which treat the vendors interest as lienable simply hold until the purchaser get actual notice that a lien has been docketed |
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Term
| viii. Death of a contractin party during executory period |
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Definition
1. If an equitable conversion has occurred vendros interest descends as personal property to his legattees or next of ken
2. If an equitable interest has occurred the purchasers interest descneds as realty to devisees or heirs entitled to close the deed, purchase will be paid out of estate |
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Term
| ix. Risk of loss and equitable conversion - When property is damaged during executory period |
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Definition
1. Majority holds purchaser assumes risk during executory period - treated as land owner.
2. Minority: risk placed on seller, and permits buyer to rescend |
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Term
ix. Risk of loss and equitable conversion - When property is damaged during executory period
3. Types of losses |
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Definition
a. Zoning changes - contract connot be enforced if zoning changes, making property unusable for puchasers intents
b. Building code changes
c. Eminent domain actions |
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Term
|
Definition
|
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Term
|
Definition
| something that must occur before obligation to fullfill covenant arises |
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Term
|
Definition
1. General warranty deed - warrants title is good
2. Limited warranty deed - warrants seller has done nothing wrong w/respect to title
3. Quitclaim deed - no warranty of title, just what seller had. |
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Term
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Definition
1. Absolutely void - Set aside even if there is a bona fide purchaser
2. Voidable - may be set aside if still in the hadns of the original grantee (fraud in the inducement)
3. De minimus defects - deed remains valid
4. Warranties must be specifically defined in statutes |
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Term
|
Definition
1. Grantors name and signature
2. Indication of the manner of the deed
3. Recitation of consideration
4. Description of real estate
5. "Words of Grant"
6. Statement of exceptions (matters that the fee simple will be subject to)
7. Langauage evinciing an intent to make a conveyance
8. Date
9. Notary public's certificate
10. Stamps of various pbulic recording officials
11. Auditors stamp indicating that the recording fee has been paid
12. Stamps indicating payment of state excise tax |
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Term
15. Deeds and Titles Chapter 9
iv. Exceptions and reservations |
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Definition
1. Exception - holding back of previously existing interest in land
2. Reservation - creates and leaves grantor with a newly formed intrest in land
3. Cmmon law - deed may not create an interest in a third party by way of exception or reservation |
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Term
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Definition
| i. Can be a monument or fixed point |
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Term
ii. From that point there are 3 ways to describe the land
1. Government survey |
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Definition
a. Divides land into baselines/ ranges (E-W) and townships (N-S)
b. Townships are futher divided into 36 secitions
c. Each section can be divided in various ways |
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Term
i. Can be a monument or fixed point
ii. From that point there are 3 ways to describe the land
2. Metes and bounds |
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Definition
a. Start with an intial point, making a series of calls
b. Each call describes one side of the land boundary |
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Term
i. Can be a monument or fixed point
ii. From that point there are 3 ways to describe the land
3. Description by recorded plat |
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Definition
a. Intricate detailed survey created by subdivision developer
b. Sarts from an initial point |
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Term
| c. Ten Cannons of Deed construction |
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Definition
i. Deeds are interpreted against the grantor
ii. Unambiguous description will prevail over an ambiguous description
iii. Extrinsic evidence can explain latent ambiguity, but not patent ambiguity
iv. Monuments control courses and distances
v. Useless words can be disregarded
vi. Particular descriptions can be made certain by incorporation by refrence
vii. If exception is in error, conveyance of whole tract
viii. Boundary extends to center of stream road or border
ix. Deeds include appurtenances even if not mentioned |
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Term
| i. Requirements for valid delivery |
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Definition
i. Requirements for valid delivery
1. Intent by grantor to pass title immediately and
2. Act on part of grantor to evidence that intent |
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Term
| ii. A deed that has been recorded |
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Definition
| ii. A deed that has been recorded has been delivered |
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Term
d. Delivery
iv. Acceptance |
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Definition
1. Acceptance is presumed if deed is beneficial to grantee
2. Presumption does not apply if acceptance would be burdensome |
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Term
| v. Deeds conveying future interests |
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Definition
1. Delivery requires Intent must be to make deed immediately operative
2. Deed itself does not have to pass title presently possessory interest, instead it may convey future interest |
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Term
| vi. Valid delivery of a deed requires |
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Definition
| vi. Valid delivery of a deed requires it to pass beyond the control or domain of the grantor. |
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Term
d. Delivery
viii. Death escrow |
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Definition
1. Handing of the deed by grantor to 3rd party with instructions to give it to grantee upon grantors death.
2. Delivory from 3rd party to grantee is considered actual delivery
3. Ineffective if grantor reserves right to revoke deed |
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Term
|
Definition
i. Escrow agents owe a fiduciary duty to both parties in escrow
ii. Instructions do not have to be in writing |
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Term
| iii. Requirements of true Escrow |
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Definition
1. Grantor must not reserve any power to revoke the deed
2. Parties must have entered into an enforcable contract for sale
3. Parties must have entered into an enforcable contract of sale |
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Term
| iv. Duties of Escrow agents |
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Definition
1. Occupy a fiduciary position with respect to the parts and will be held liable for negligence or breach of instructions
2. Escrow agent that discovers fraud or fact to suggest fraud by one party has a duty to disclose them to the other party |
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Term
| v. Risk of loss from an escrow agents default - |
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Definition
| Loss falls on buyer or seller whether or not the agent has passed the deed |
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Term
| vi. Wrongful delivery by Escrow agents |
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Definition
1. Grantee cannot claim title if conditions have not yet been fulfilled or obtains it by deceit
2. Deed is void if grantee steals it and records it |
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Term
f. Warranties of Quality
i. Caveat empetor - no duty to disclose unless |
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Definition
1. There is a fiduciary relationship or
2. Seller has actively concealed |
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Term
f. Warranties of Quality
ii. Seller has to disclose conditions that |
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Definition
1. The seller created and
2. Latent defects |
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Term
| iii. Fraudulent concealment - |
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Definition
| seller is aware of the latent and material defect |
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Term
f. Warranties of Quality
iv. Liability for Nondisclosure. |
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Definition
1. Silence regarding defects is not actionable unless seller is engaged in active concealment that made silence misleading
2. Growing trend to treat silence as fraudulent concealment
3. Unless buyer has discovered the defect but does nothing about it
4. Factors that increase probablity of selleras liability
a. Personal residence purchased by unsophisticated perosn
b. Defect is dangerous to health or safety
c. Seller created the defect or failed at repairing it
d. Seller gave assurances about quality of improvements
e. Purchaser did not rely on profesional inspection by an engineer or other expert |
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Term
| v. Immplied warranties on existing housing - buyers are limited to claims of |
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Definition
1. Outright fraud
2. Fraudulent concealment theory and
3. Express warranties contracts |
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Term
| vi. Warranties foR LBUILDERS |
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Definition
1. IMPLIED WARRANTY
2. NEGLIGENCE IN TORT
3. STRICT LIABILITY TORT |
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Term
f. Warranties of Quality
vii. Time elimitations |
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Definition
elimitations
1. Statute of limtations
2. Statute of response |
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Term
|
Definition
1. Written
2. Clear and unambiguous
3. Adequate notice of warranties being waived
4. Specify types of latent defects waived
5. Acctually negotiated
6. Strictly construed against the builder |
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Term
g. Title covenants in deeds
i. 6 types of deeds |
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Definition
a. Covenant of Seisin
b. Right to convey
c. Against encumbrances
a. Warranty
b. Quiet enjoyment
c. Further assurances |
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Term
g. Title covenants in deeds
1. Present |
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Definition
d. SOL - Begins when deed is delivered
e. Breaches happen when failure of title exists of encumbrances
f. P's may sue immediate grantor |
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Term
g. Title covenants in deeds
2. Future |
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Definition
d. Statute of limtations begins when eviction occurs
e. Eviction by holder ofparamount title causes breach
f. Any previous owner may sue |
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Term
ii. Contract or deed?
1. What are the differences? |
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Definition
a. Contract (K): implied covenant of marketable title
b. Deed (D): covenants of title |
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Term
ii. Contract or deed?
2. When may claim or suit be brought? |
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Definition
a. K: only before passage of legal title by delivery of deed
b. D: only after passage of legal title by delivery of deed |
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Term
ii. Contract or deed?
3. What remedies may the plaintiff obtain? |
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Definition
a. K: rescission and damages; half the states give damages only if seller acted in bad faith
b. D: Only damages (except for specific performance of covenant of further assurances) |
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Term
ii. Contract or deed?
4. What defect will breach the covenant? |
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Definition
a. K: title is unmarketable (unacceptable to a reasonable buyer (risk of litigation often enough))
b. D: title is defective in fact (failure of seisin or existence of encumbrances) |
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Term
ii. Contract or deed?
5. Will existing regulatory violations breach the covenant? |
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Definition
a. K: Yes (under several authorities)
b. D: No |
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Term
ii. Contract or deed?
6. Can plaintiff recover costs of defending the title against a third party? |
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Definition
a. K: No
b. D: Yes, provided the title defect is actually shown to exist. |
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Term
ii. Contract or deed?
7. Can remote grantees recover on the covenant? |
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Definition
a. K: No, since the claim must be brought before the title passes to the original grantee
b. D: Yes, under future covenants |
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Term
|
Definition
1. Present: sesin, right to convey against encumbrances
2. Future: warranty, quiet enjoyment, further assurances
3. Not implied by courts, must be on the face of the document
4. Specific statutes phrases or words can imply covenants |
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Term
| iv. What constitutes eviction? |
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Definition
Active assertion of paramount title by another party
1. By obtaining decree of specific performance to gain possession
2. Orders grantee off land
3. Grantee buys title to avoid eviction
4. Grantee surrenders claim
5. Grantee is sued by person with paramount title and enters into reasonable settlement |
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Term
g. Title covenants in deeds
v. Damages |
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Definition
1. Amount recoverable limited to consideration received by covenantor being sued
2. Damages for encumbrance measured by cost to remvoe, if possible, or diminution caused
3. Limited to actual loss. |
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Term
iii. Recording acts - can change result such that under circumstances B will prevail over
1. Notice |
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Definition
a. B must be a purchaser for value and without notice
b. Eery conveyance not recorded is void against any subsequent purchaser or mortgager in good faith and for valuable consideration from the same vendor
c. No instrument effect real estate is of any validity against subsequent purchasers for the valuable consideration w/o notice, unless filed in the office of the recorder |
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Term
iii. Recording acts - can change result such that under circumstances B will prevail over
2. Race |
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Definition
| 2. Race - no conveyance shall be valid as against BFP or 3rd part until it is recorded |
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|
Term
iii. Recording acts - can change result such that under circumstances B will prevail over
3. Race-Notice |
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Definition
| every conveyance not recorded is void as against any subsequent purchaser or motgager in good faith and for valuable consideration form the same vendor whose conveyance is first duly recorded. |
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Term
iii. Recording acts - can change result such that under circumstances B will prevail over
4. A will always |
|
Definition
| 4. A will always prevail if A records prior to the conveyance to B |
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|
Term
h. Recording
iv. Bonfide purchaser
1. Must purchase for value |
|
Definition
a. Excludes donees
b. Must pay more than nominal or grossly inadequate consideration
c. Not necessary to pay full market value
d. Promise to pay is not enough, must have started paying |
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|
Term
h. Recording
iv. Bonfide purchaser
2. Must purchase without any types of notice of other conveyance |
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Definition
a. Actual knowledge
b. Constructive inquiry notice
i. Inofmration suggests a possible problem, purchaser must make reasonable investigation
ii. Court will hold purchaser had constructivec notice of the information that would have been discovered
iii. Relying on grantor's explanation is not enough to avoid constructive notice
c. Constructive record notice
i. More than just recording office
ii. Recorded document could contain reference to unrecorded conveyance and thereby provide constructive notice of the unrecorded conveyance |
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Term
| 3. Quitclaim deeds and notice - |
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Definition
| - in most jurisdictions grantors unwillingness to provide deeds covenant put the grantee on notice of problem such that the grantee is not a bonafide purchaser. |
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Term
iv. Bonfide purchaser
4. Bona fide purchaser shelter - |
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Definition
| in chain of title can "shelter" later purchasers even if those purchasers have notice of problem prior to BFP |
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Term
|
Definition
| privaley held land can be tracked back to original grant of soverign |
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|
Term
2. Recording indexes -
a. Tract |
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Definition
description of all recorded documents affecting a particular parcel are on one or more pages
i. Easy to search
ii. Diffuclt for recording office when non-standard descriptions are used
iii. Only a few states use - generally those with government surveys |
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|
Term
2. Recording indexes
b. Name index |
|
Definition
indexed by name of parties
i. Easy to maintain
ii. Hard to search
iii. Two name indexes - grantor and grantees
iv. Start by looking up sellers name in grantees index |
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Term
| 3. Steps for searching for record title |
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Definition
a. Trace chain back using grantee's index - construct chain of title
b. Check each previous owner in grantor's index for adverse conveyance - then check each grantee for any adverse conveyances in grantor's index
c. Examine full copies of each instrument |
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|
Term
v. Title Search
4. Potential Problems |
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Definition
a. Unrecorded adverse deed followed by recorded conveyance - can't be found in search of name indexes - treat 2nd as unrecorded
i. Fact that no one can find it in the chain of title
ii. 2nd group should have realized they weren't buying recorded deed and should have told seller to record
b. Later recording of adverse deed - not located unless every owner is sear ched to present in grantor's index
c. Doctrine of after acquired title - grantor gives warranty but does not own the land
i. Grantor subsequently obtain title
ii. Instantly insures to grantee
iii. Problem is that this is going to be missed by searcher unless he searches all grantor's before grantor's original purchase
iv. Many courts will find 1st deed unrecorded |
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|
Term
vi. Title Assurance methods
1. Marketable title acts |
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Definition
a. Set defined period that must be search
b. Searcher must find root of title older than defined time period and trace chain of title to present
c. Adverse conveycances have no effect
d. Lots of exceptions - means that suchers must go further back
e. Gives purchaser more assurance
f. Resolves conflicting claims |
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Term
vi. Title Assurance methods
2. Torrens System |
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Definition
a. Registrations ystem
b. Issues certificate of title identifying what the holder owns
c. Complete guarntee of title to purchaser |
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Term
vi. Title Assurance methods
3. Title opinions and absracts |
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Definition
a. Attorney's opinion based on examination of public records
b. Attorney searchs recording office and other relevant offices
c. Issues a written opion
d. Some states have opinion banks where you can start your search
e. Title opinions - relevant in 2 cases
i. Purchaser and sale contracts require them - accpetable title opinion often a condition precedent to the purchaser for purchase
ii. Liability based on malpractice |
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|
Term
vi. Title Assurance methods
4. Abstracts |
|
Definition
a. Can be based on written opinion or abstract rather than personal search
b. Prepared by nonlawyer specialist
c. Summary of title - describing every deed, mortgage, judment, or other public ducment effecting title has ever been entered into public records
d. Do not draw conclusions about state title - only provides data - attorney then examines abstract and makes conclusions
e. Abstracts are not title insurance
f. Abstractor can be liable for negligence |
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Term
vi. Title Assurance methods
5. Title opinons and abstracts |
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Definition
a. Formerly the predominant method of title assurance
b. Important in few jurisidctions
c. Rise of title insurance has taken its place |
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Term
vi. Title Assurance methods
6. Advantages to title insurance to purchaser |
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Definition
a. Covers off record defects
b. Title insurer is strictly liable for defects where as attorney or abstractor is only liable for negligence. |
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