Term
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Definition
- Four Categories of Freehold Estates:
- Fee Simple Absolute;
- The Fee Tail;
- The Defeasible Fees (3 Species); and
- Fee Simple Determinable
- Fee Simple Subject to Condition Subsequent
- Fee Simple Subject to Executory Limitation
- The Life Estate
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Term
Fee Simple Absolute (FSA) |
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Definition
- How to Create: "To A" or "To A and his heirs"
- Today "and his heirs" isn't needed
- Absolute ownership of potentially infinite duration
- Freely devisable, descendible, and alienable
- No Accompanying future interest
*Example 1 on pg. 3 of Handout* |
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Term
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Definition
- How to Create: "To A and the heirs of his body"
- Virtually abolished in US today, virtually never tested
- Today attempted creation of a fee tail creates a FSA
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Term
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Definition
- Three simple fees with "a catch":
- The Fee Simple Determinable
- The Fee Simple Subject to Condition Subsequent
- The Fee Simple Subject to Executory Limitation
- Defeasible: Subject to forfeiture if conditions surface
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Term
Construction of Defeasible Fees |
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Definition
- Two Important Rules of Construction:
- Words of mere desire, hope, or intention are insufficient to create a defeasible fee
- Courts disfavor restrictions on free land use
- Courts will not find a defeasible fee unless clear duration language is used
- Absolute restraints on alienation are void
- Absolute Restraint on Alienation: An absolute ban on the power to sell or transfer that is not linked to a reasonable, time-limited purpose
*Examples 6-8 on pg. 6-7 of Handout* |
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Term
Fee Simple Determinable (FSD) |
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Definition
- How to Create: "To A so long as...", "during", "until"
- Grantor must use clear durational language
- If stated condition is violated, forfeiture is automatic and immediate
- Devisable, descendable, and alienable, but always subject to the condition
- "Mick Jagger" Rule of Property:
- You may convey less than what you started with, but you can't convey more
- "You can't always get what you want"
- Accompanying Future Interest:
- Possibility of Reverter in the grantor
- "Frank Sinatra Doesn't Prefer Orville Redenbacher": Fee Simple Determinable Possibility of Reverter
- *Examples 2 and 3 on pg. 4 of Handout*
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Term
Fee Simple Subject to Condition Subsequent (FSSCS) |
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Definition
- How to Create: "To A, but if X ever occurs, grantor reserves right to reenter and retake"
- Grantor must:
- Use clear durational language, and
- State the right to reenter
- *Example 4 pg. 5 of Handout*
- This estate is not automatically ended, but it can be cut short at the grantor's option if the stated condition occurs
- Remember James Brown: "my prerogative" to choose to terminate or look the other way
- Accompanying Future Interest: Right of entry, synonymous w/ the power of termination
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Term
Fee Simple Subject to Executory Limitation (FSSEL) |
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Definition
- How to Create: "To A, but if X event occurs, to B"
- This estate is just like the FSD but now if the condition is broken, the estate is automatically forfeited in favor of someone other than O, the grantor
- Accompanying Future Interest: Shifting Executory Interest
*Example 5 on pg. 6 of Handout* |
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Term
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Definition
- How to Create: This is an estate that must be measured in explicit lifetime terms and never in terms of years
- O conveys: "To A for life"
- A has a LE
- A is known as the life tenant
- O has Reversion: At the end of A's lifetime, the estate reverts back to O or O's heirs
- *See "Contrast With" pg. 7 of Handout*
- The LE "pur autre vie":
- A life estate measured by a life other than the grantee's
- "To A for the life of B"
- *Examples 9-10 on pg. 8 of Handout*
- The life tenant's entitlements are rooted in the important Doctrine of Waste
- Two General Rules:
- The life tenant is entitled to all ordinary uses and profits from the land
- The life tenant must commit waste
- Three Species of Waste:
- Voluntary or Affirmative Waste
- Permissive Waste, or Neglect
- Ameliorative Waste
- Accompanying Future Interest:
- If held by O, called a Reversion
- If held by a third party, it is a Remainder
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Term
Voluntary or Affirmative Waste |
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Definition
- Overt Destruction
- Voluntary Waste and Natural Resources:
- General Rule: The life tenant must not consume or exploit natural resources on the property, unless one of 4 Exceptions apply (Think PURGE)
- PU: Prior Use
- Prior to the grant, the land was used for exploitation
- Prior Use and Open Mines Doctrine: If mining was done on the land before the life estate began, the life tenant may continue to mine, but is limited to mines already open; can't open new mines
- R: Repairs
- The life tenant may consume natural resources for repairs and maintenance
- G: Grant
- The life tenant may exploit if granted that right
- E: Exploitation
- The land is suitable only to exploit
- Example: coal mine or rock quarry
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Term
Permissive Waste or Neglect |
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Definition
- Occurs when land falls into disrepair
- Obligation to Repair:
- The life tenant must simply maintain the premises in reasonably good repair
- Example: Base line duty is something like patching a leaky ceiling routinely
- Obligation to Pay all Ordinary Taxes:
- The life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits from the land
- If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of premises Fair Rental Value (FRV)
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Term
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Definition
- Life tenant must not engage in acts that will enhance the property's value unless:
- All future interest holders are known and consent
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Term
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Definition
- Six categories of future interests:
- The Possibility of Reverter
- The Right of Entry, aka Power of Termination
- The Reversion
- Vested Remainder
- Contingent Remainder
- Executory Interest
- Classify them based on whether they are retained by the grantor or by a transferee
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Term
Future Interests Capable of Creation in the Grantor |
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Definition
- There are only Three Future Interests capable of creation by the grantor
- Possibility of Reverter:
- Right of Entry:
- Accompanies only FSSCS (Bobby Brown)
- Reversion:
- Future interest that arises in a grantor who transfers an estate of lesser quantum than she started with, other than FSD or FSSCS
- *See Example 11 on pg. 11 of Handout*
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Term
Future Interests in Transferees |
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Definition
- If future interest is held by someone other than the grantor, it has to be either:
- A Vested Remainder (3 Species)
- A Contingent Remainder, or
- An Executory Interest (2 Species)
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Term
Three Tasks in Assessing Future Interests in Transferees |
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Definition
- Must distinguish vested remainders from contingent remainders;
- Must distinguish the three kinds of vested remainders from each other; and
- Must distinguish all remainders from executory interests
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Term
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Definition
- Remainder: Future Interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created
- "Remainderman is sociable, patient, and polite"
- Remainderman is sociable, never travels alone
- Remainderman always accompanies a preceding estate of fixed duration
- Preceding estate is usually a LE or a term of years
- Remainderman never follows a defeasible fee
- Remainders wait patiently for the preceding estate to naturally end
- Remainderman cannot cut short or divest a prior transferee
- If your present estate is a defeasible fee, your future interest is not a remainder, it is an executory interest if held by someone other than O, the grantor
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Term
Difference Between Vested and Contingent Remainders |
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Definition
- A remainder is vested if it is both created in an ascertained person and is not subject to any condition precedent
- A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent, or both
- Remainder that is contingent b/c it is created in as yet unborn or unascertained persons
- *Examples 12-14 on pg. 13 of Handout*
- Remainder that is contingent b/c it is subject to a condition precedent
- A condition is a condition precedent (CP) when it appears before the language creating the remainder or is woven into the grant to remainderman
- *Examples 15-16 on pg. 14 of Handout*
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Term
Contingent Remainder Rules |
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Definition
- Rule of Destructibility of Contingent Remainders:
- At C/L a CR was destroyed if it was still contingent at the time the preceding estate ended
- Today Destructibility Rule has been abolished
- *See Example 17 on pg. 14-15 of Handout*
- Rule in Shelley's Case:
- At C/L the rule would apply in one setting only:
- O conveys "To A for life, the, on A's death, to A's heirs." A is still alive
- Historically: The present and future interests merge, giving A a FSA
- Note: Rule in Shelley's Case is a rule of law, not a rule of construction
- Would apply even in the face of contrary grantor interest
- Today: Rule in Shelley's Case has been virtually abolished
- Today when O conveys "To A for lie, then to A's heirs":
- A has a LE
- A's yet unknown heirs have CR
- O has a Reversion since A could die w/o heirs
- Doctrine of Worthier Title:
- Still viable in most states
- Applies when O, who is alive, tries to create a future interest in his heirs
- *See Example 19 on pg. 15 of Handout*
- Doctrine endeavors to promote free land transfer
- Note: Doctrine of Worthier Title is a rule of construction, not a rule of law
- Grantor's intent controls
- If Grantor clearly intends to create a CR in his heirs, that intent is binding
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Term
Distinguishing 3 Kinds if Vested Remainders (VR) |
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Definition
- Note: Only Remainders can be vested
- Indefeasibly Vested Remainder (IVR):
- The holder of the remainder is certain to acquire an estate in the future with no strings attached
- *See Example 20 on pg. 16 of Handout*
- Vested Remainder Subject to Complete Defeasance (VRSCD):
- Remainderman exists
- His taking is NOT subject to any precedent
- His right to possessions could be cut short b/c of a Condition Subsequent (CS)
- Comma Rule: When conditional language in a transfer follows language that, taken alone and set off by commas, would create a VR, the condition is a CS, and you have a VRSCD
- In Contrast, if the conditional language appears before the language creating the remainder, the condition is a CP and you have a CR
- *See Examples 21-22 on pg. 17-18 in Handout*
- Vested Remainder Subject to Open (VRSO):
- Remainder is vested in a group of takers, at least one of whom is qualified to take
- Each class member's share is subject to partial diminution b/c additional members can still join in
- *Example 23 pg. 18 of Handout*
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Term
A Class is Either Open or Closed |
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Definition
- A class is open if others can join
- A class is closed when no others can join
- C/L Rule of Convenience:
- The class closes when any member can demand possession (*Illustration on pg. 19 of Handout*)
- Exception (The Womb Rule):
- Same facts as example 23 pg. 18
- A child of B in the womb at A's death will share w/ C and D
- If C or D predeceases A, at C/L their share goes to their devises or heirs
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Term
Distinguish Remainders from Executory Interests (EI) |
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Definition
- Executory Interest (EI):
- Future Interest created in a transferee (or third party), which is not a remainder and which takes by either cutting short some interest in another person ("shifting") or in the grantor or his heirs ("springing")
- Shifting EI:
- It always follows a Defeasible Fee and cuts short someone other than the grantor
- *Examples 24-25 on pg. 20 of Handout*
- Springing EI:
- Cuts off O, the grantor
- *Examples 26-27 on pg. 20-21 of Handout*
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Term
Rule Against Perpetuities (RAP) |
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Definition
- Rule: Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life
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Term
4 Step Technique for Assessing Potential RAP Problems |
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Definition
- Determine which future interests have been created by the conveyance
- RAP potentially only to CRs, EIs, and certain VRSOs
- RAP does not apply to any future interest in the grantor or to indefeasibly VRs, or to VRSCDs
- *Example 28 on pg. 21 of Handout*
- Identify the CPs to the vesting of the suspect future interest
- In Example 28 A must die leaving a child before a future interest holder can take
- Find all possible measuring lives
- Look for the people alive at the date of the conveyance whose lives and/or deaths are relevant to the condition's occurrence
- In Example 28 the measuring life is A
- Ask: Will we know for sure within 21 years of the death of any of the relevant measuring lives if the future interest holder(s) can take?
- If so the conveyance is good
- By Contrast: If we won't know for sure whether the future interest will vest (become certain) within 21 years of the death of any of the possible measuring lives, the future interest is good
- Consider Step 4 for each possible measuring life
- If the suspect future interest is sure to vest within 21 years of the death of any of the possible measuring lives, the future interest is good
- *Example 29 on pg. 22-23 of Handout*
- Fertile Octogenarian Rule: Presumes a person is fertile no matter what the age
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Term
Two Bright Line Rules of C/L RAP |
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Definition
- A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the C/L RAP (Memorize This!!)
- "Bad as to one, bad as to all": To be valid, it must be shown that the CP to every class member's taking will occur w/in the perpetuities period; if it is possible that a disposition might vest too remotely w/r/t any member of the class, the entire class gift is void
- *Example 30 on pg. 23 of Handout*
- Many Shifting EIs violate the RAP, an EI w/ no limit on time w/in which it must vest violates the RAP (Memorize This!!!)
- *Example 31 on pg. 24-25 of Handout*
- Charity-to-Charity Exception:
- A gift from one charity to another will not violate the RAP; encourages people to be charitable
- *Example 32 on pg.25 of Handout*
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Term
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Definition
- "Wait and See" or "Second Look" Doctrine:
- What actually happened
- Majority reform effort
- Validity of any suspect future interest is determined on the basis of facts as they now exist at the end of the measuring life
- This eliminates the "what if" or "anything is possible" line of inquiry
- Uniform Statutory RAP (USRAP):
- Codifies the C/L RAP and, in addition, provides for an alternative 90 year vesting period
- Both the "Wait and See" and USRAP reforms embrace:
- The Cy Pres Doctrine:
- "As near as possible"
- If a given disposition violates the rule, a court may reform in a way that most closely matches grantor's intent, while complying with RAP
- Reduction of any offensive age contingency to 21 years
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Term
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Definition
- Three Forms of concurrent ownership:
- Joint Tenancy (JT):
- Two or more own w/ right of survivorship
- Tenancy by the Entirety (TBE):
- Between married partners w/ right of survivorship
- Tenancy in Common (TIC):
- Two or more own w/ no right of survivorship
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Term
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Definition
- Distinguishing Charcteristics
- Creation of a JT
- Severance of a JT
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Term
Distinguishing Characteristics of a JT |
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Definition
- When one joint tenant dies, his share goes to surviving joint tenants (Right of Survivorship (Ros))
- A joint tenant's interest is alienable; not devisable or descendable
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Term
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Definition
- The Four Unities:
- Remember "T-TIP"
- Joint tenants must take their interests:
- T: At the same Time,
- T: By the same Title (same instruments),
- I: Identical Interests, and
- P: Right to Possess as a whole
- Grantor must clearly express RoS
- JTs are disfavored, so in addition to the four unities, grantor must clearly state the RoS
- Use of a Straw:
- A conveys land to a "straw"
- "Straw" conveys to A and B as joint tenants w/ RoS
- *Example 33 on pg. 28 of Handout*
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Term
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Definition
- Remember SPAM:
- Sale
- Partition
- And
- Mortgage
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Term
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Definition
- A joint tenant can sell or transfer her interest during her lifetime
- Can do w/out other's knowledge or consent
- One joint tenant's sale severs JT as to the seller's interest b/c it disrupts the four unities
- Buyer is Tenant in Common (TIC)
- If more than two joint tenant's, the JT remains intact as between the other, non-transferring joint tenants
- *Example 34 on pg. 29 of Handout*
- In equity, a joint tenant's mere act of entering into a contract for the sale of her share will sever the JT as to that contracting party's interest
- Doctrine of Equitable Conversion:
- "Equity regards as done that which ought to be done"
- *Example 35 on pg. 29 of Handout*
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Term
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Definition
- Three Variations:
- By Voluntary Agreement:
- A peaceful way to dissolve the relationship
- Not likely on Bar
- Partition in Kind:
- Court action for physical division of Blackacre if in best interest of all parties
- Example: Farm or Vineyard
- Forced Sale:
- Court action, if in best interest of all parties, where Blackacre is sold and the proceeds are divided proportionally
- Example: Building or House
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Term
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Definition
- The Rule: One joint tenant's execution of a mortgage or a lien on his share will sever the JT as to that now encumbered share only in the minority of states to follow the Title Theory of mortgages
- Mortgage is functional equivalent of transfer of title
- By Contrast: The majority of states follow the Lien Theory of mortgages
- A joint tenant's execution of a mortgage on his interest won't sever JT
- No title transfer
- *Example 36 on pg. 30-31 of Handout*
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Term
Tenancy by the Entirety (TBE) |
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Definition
- Between married partners with RoS
- In most states that recognize the TBE, it arises presumptively at C/L in any grant to married partners
- But by statute some states demand clear statement to A and B as TBE to create TBE
- Very Protected Form of Co-Ownership
- Remember MC Hammer "Can't Touch This Bitch"
- Creditors of only one spouse can't touch this tenancy
- Unilateral Conveyance
- Neither tenant acting alone can defeat the RoS by unilateral transfer to a third party
- *Example 37 on pg. 32 of Handout*
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Term
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Definition
- Three Features:
- Each co-tenant owns and individual part and each has a right to posses the whole
- Each interest is devisable, descendable, and alienable
- No Ros between tenants in common
- The presumption favors the TIC
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Term
Rights and Duties of Co-Tenants |
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Definition
- Possession:
- Each co-tenant is entitled to posses the whole
- If one co-tenant wrongfully excludes another co-tenant from possession of the whole or any part, he has committed Ouster
- Ouster: Wrongful ejection, is actionable
- Rent From Co-Tenant in Exclusive Possession:
- Absent ouster, a co-tenant in exclusive possession is not liable to the others for rent
- Rent From Third Parties:
- A co-tenant who leases all or part of the premises to a third party must account to his co-tenants and give their fair share of rental income
- CoA would be Accounting
- Adverse Possession:
- Unless he has ousted the other co-tenants, one co-tenant in exclusive possession for the statutory adverse possession period cannot acquire title exclusively
- The hostility element of adverse possession is absent
- No hostility b/c no ouster
- Carrying Costs:
- Each co-tenant is responsible for his fair share of carrying costs based upon his undivided share
- Examples: Taxes; mortgage interest payments
- Repairs:
- The repairing co-tenant enjoys a right to contribution for reasonable, necessary repairs provided that she told the others of the need
- CoA would be Contribution
- Improvements:
- During the life of the co-tenancy, there is no right to contribution for improvements
- At Partition, the improving co-tenant is entitled to a credit equal to any increase in value he caused
- Attendantly, at partition, the so-called "improver" bears full liability for any drop in value he caused; he will suffer a debt
- Waste:
- A co-tenant must not commit waste
- Partition:
- A joint tenant or tenant in common has a right to bring an act of partition
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Term
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Definition
- The Four Leasehold or Nonfreehold Estates
- Tenant's Duties
- Landlord's Duties
- Assignment vs. Sublease
- Landlord's Tort Liability
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Term
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Definition
- Tenancy for Years (TY)
- Periodic Tenancy (PT)
- Tenancy at Will (TW)
- Tenancy at Sufferance (TS)
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Term
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Definition
- A lease for a fixed period
- Also called Term of Years or Estate for Years
- That period could be one day, 2 months, 50 years
- Have a TY when you know the termination day from the start
- B/c a TY states from the outside when it will terminate, no notice is needed to terminate
- A TY greater than 1 year must be in writing to be enforceable b/c of SoF
- *Example 38 on pg. 35 of Handout*
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Term
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Definition
- A lease that continues for successive intervals until landlord (L) or tenant (T) give proper notice to terminate
- PT can be created expressly
- PT can also arise by implication in any one of 3 Ways:
- Land is leased with no mention of duration, but provision is made for the payment of rent at set intervals
- *Example 39 on pg. 36 of Handout*
- An oral term of years in violation of SoF creates an implied PT measured by the way rent is tendered
- *Example 40 on pg. 36 of Handout*
- The Holdover: In a residential lease, if L elects to hold over a T who has wrongfully stayed on past the conclusion of the original lease
- Implied PT arises measured by the way rent is now tendered
- *Example 41 on pg. 36 of Handout*
- To terminate PT must give notice, usually in writing
- At C/L at least equal to the length of period itself unless otherwise agreed
- Exception: If the tenancy is year to year or greater, only need 6 months notice
- Note: By private agreement, the parties may lengthen or shorten these C/L prescribed notice provisions
- Note: PT must end at the conclusion of the natural lease
- *Example 42 on pg. 37 of Handout*
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Term
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Definition
- Tenancy for no fixed duration
- Unless the parties expressly agree to a TW, the payment of regular rent will cause a court to treat it as implied PT
- TW may be terminated by either party at any time, but a reasonable demand to vacate is typically needed
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Term
Tenancy at Sufferance (TS) |
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Definition
- Created when T has wrongfully held over past the expiration of the lease
- We give this wrongdoer a a TS to permit L to recover rent
- TS lasts only until L either evicts T or hold T to a new tenancy
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Term
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Definition
- T's Liability to Third Parties
- T's Duty to Repair
- T's Duty to Pay Rent
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Term
T's Liability to Third Parties |
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Definition
- Matter of Tort Law
- T is responsible for keeping the premises in good repair
- T is liable for injuries sustained by third parties T invited, even where L promised to make all repairs
- *Example 43 on pg. 38 of Handout*
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Term
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Definition
- T's Duty to Repair when the lease is silent:
- Standard: T must maintain the premises and make routine repairs other than those due to ordinary wear and tear
- Routine Repair: Using Drano to unclog sink
- Wear and Tear: Bathroom tiles need replacing after 8 years
- T must not commit waste
- Voluntary, Permissive, or Ameliorative
- Law of Fixtures (Separate Card)
- T's Duty to Repair when T has expressly covenanted in the lease to maintain the property in good condition for the duration of the lease:
- At C/L Historically, T was liable for any loss to the property including loss due to force of nature
- T is basically a sitting duck
- Today in the majority view T may end lease if the premises are destroyed w/out T's fault
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Term
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Definition
- Tested with waste doctrine
- When T removes a fixture he commits voluntary waste
- Fixture: A once movable chattel that, by virtue of it's annexation to realty, objectively shows the intent to permanently improve the realty
- Common Examples:
- Heating systems
- Custom storm windows
- Furnace
- Certain lighting installations
- T must not remove a fixture no matter that she installed it
- Fixtures pass with ownership of land
- *Example 44 on pg. 40 of Handout*
- How to tell when a T installation qualifies as fixture:
- Express Agreement controls:
- Any agreement on point b/t L and T is binding
- In the absence of an agreement, T may remove a chattel that she has installed so long as removal won't cause substantial harm to the premises
- If removal will cause substantial damage, in objective judgment T has shown the intent to install a fixture and fixture stays put
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Term
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Definition
- T breaches this duty and is in the possession of the premises:
- L's only options are to evict through the courts or continue the relationship and sue for rent due
- If L moves to evict, nonetheless entitled to rent from T until T, who is now a T at Sufferance, vacates
- L must not engage in self-help such as changing the locks, forcibly removing T, removing T's things
- Self-help is flatly outlawed
- Punishable civilly and criminally
- T breaches this duty but is out of possession:
- Example: T wrongfully vacates w/ time left on TY lease
- Remember SIR
- Surrender: T shows by words or conduct that she wants to give up the lease
- L could choose to treat T's abandonment as an implicit offer to surrender which L accepts
- If unexpected term is greater than one year, surrender must be in writing
- Ignore the abandonment and hold T responsible for the unpaid rent, just as if T was still there
- Available only in minority of states
- Re-let the premises on the wrongdoer T's behalf and hold T liable for any deficiency
- Majority Rule:
- L must at least try to re-let
- This is a mitigation principle
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Term
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Definition
- Duty to Deliver Possession
- Implied Covenant of Quiet Enjoyment
- Implied Warranty of Habitability
- Retaliatory Eviction
- Discrimination
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Term
Duty to Deliver Possession |
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Definition
- Majority Rule requires that L deliver both legal (lawful lease) and physical possession to new T
- L must put T in possession of the premises
- If at start of T's lease a prior holdover T is still in possession, L has breached and new T gets damages
- Note: In a minority of states L need only deliver legal possession to new T
- If prior holdover T is still in possession at start of T's lease, it is up to new T to bring eviction proceedings against holdover T
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Term
Implied Covenant of Quiet Enjoyment |
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Definition
- Applies to both residential and commercial leases
- T has right to quiet use and enjoyment of the premises w/out interference from L
- Breach by Wrongful Eviction:
- Occurs when L wrongfully evicts T or excludes T from premises
- Breach by Constructive Eviction:
- Remember SING
- Substantial Interference:
- Due to L's actions or failures
- Could be chronic or permanent
- Notice:
- T must notify L of the problem and L must fail to correct it
- Goodbye:
- T must vacate w/in reasonable time after L fails to correct the problem
- Is L liable for acts of other T's?
- General Rule: No
- Two Exceptions:
- L must not permit a nuisance on site
- L must control common areas
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Term
Implied Warranty of Habitability (IWOH) |
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Definition
- Applies only to residential leases
- Non-Waivable
- Standard:
- Premises must be fit for basic human dwelling
- Bare living requirements must be met
- Appropriate standard may be supplied by housing code or case law
- Problems triggering breach of IWOH: No heat in winter, no plumbing, no running water, etc.
- T's Entitlements when the IWOH is breached:
- Remember Mr. Cubed (MR3)
- M: Move out and end lease, but T don't have to
- R: Repair and deduct
- Allowable by statute in a lot of jurisdictions
- T may make reasonable repairs and deduct costs from future rent
- R: Reduce rent or withhold all rent until court determines FRV
- T places withheld rent in escrow account to show good faith
- R: Remain in possession
- Pay rent and affirmatively seek money damages
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Term
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Definition
- If T lawfully reports L for housing code violations, L is barred from penalizing T
- Examples:
- Raising rent
- Ending the lease
- Harassing T
- Taking other reprisals
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Term
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Definition
- FHA bars discrimination in sale or rental of property
- Doesn't apply to religious organizations, private clubs, and owner-occupied buildings w/ no more than 4 units
- When FHA applies, L must allow disabled Ts to make reasonable modifications to existing premises at the Ts own expense
- L must make reasonable accommodations in rules, policies, services to give disable tenants an equal opportunity to use dwelling
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Term
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Definition
- In absence of some prohibition in lease, T may freely transfer interest in whole (Assignment) or in part (Sublease)
- In the lease L can prohibit T from assigning or subletting w/out Ls prior written approval
- Once L consents to one transfer by T, L waives the right to object to future transfers by that T unless L reserves the right
- The Assignment:
- *Example 45-46 on pg. 45-46 of Handout*
- The Sublease:
- L and sublessee (T2) are neither in privity of estate nor contract
- T2 is responsible to T1 and vice versa
- Relationship b/t L and T2 is w/out privity and relationship b/t L and T1 remains fully intact
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Term
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Definition
- C/L of caveat lessee:
- The Norm: In tort L was under no duty to make the premises safe
- Five Most Important Exceptions to C/L:
- Remember when T learns of exceptions T CLAPS
- Common Areas:
- L must maintain all common areas
- Example: Hallways and stairwells
- Latent Defects Rule:
- L must warn T of hidden defects that L knows or should know about
- Simply a duty to warn not duty to repair
- Assumption of Repairs:
- L who voluntarily makes repairs must complete them w/ reasonable care
- Public Use Rules:
- L who:
- Leases public space (museum, convention hall), and
- Who should know b/c of the nature of the defect and the length of the lease that T will not repair,
- Is liable for defects on property
- Short Term lease of furnished dwelling:
- L is liable for any defect which proximately harm T
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Term
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Definition
- Easement
- License
- Profit
- Covenant
- Equitable Servitudes
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Term
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Definition
- The grant of a nonpossessory property interest that entitles the holder to some form of use or enjoyment of another's land called the Servient Tenement (ST)
- Common Examples:
- Privilege to lay utility lines on another's land
- Easement giving its holder right of access across a tract of land
- Easements can be Affirmative or Negative (NE)
- Easement is either Appurtenant (AE) or In Gross (EIG)
- Easement and Transferability
- Creation of AE
- Scope of Easement
- Termination of Easement
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Term
Affirmative and Negative (NE) Easements |
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Definition
- Most easements are Affirmative: The right to do something on servient land (SL)
- Negative Easements:
- NE entitles its holders to prevent servient landowner from doing something that would otherwise be permissible
- Generally recognized in only 4 Categories: LASS
- Light
- Air
- Support
- Stream water from an artificial flow
- NE can only be created expressly, by writing signed by the grantor
- No natural or automatic right to a NE
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Term
Easement Either Appurtenant to Land (AE) or Held In Gross (EIG) |
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Definition
- AE when it benefits its holder in his physical use or enjoyment of the property
- How to know if you have a AE
- Two parcels involved; "It takes two baby"
- A Dominant Tenement (DT) takes benefit
- A ST suffers burden of easement
- *Example 47 on pg. 51 of Handout*
- EIG if it confers upon its holder only some personal or pecuniary advantage that is not related to his use or enjoyment of land
- SL is burdened
- No benefited DT
- Common Examples:
- Right to place billboard on another's lot
- Right to swim in another's pond
- Right to lay power lines on another's land
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Term
Easement and Transferability |
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Definition
- AE passes automatically w/ the DT, regardless of whether it is even mentioned in conveyance
- *Example 48 on pg. 52 of Handout*
- Note: Burden on EA also passes automatically with servient estate unless the new owner is bonafide purchaser (BFP) w/out notice of easement
- EIG is not transferable unless it is for commercial purposes
- *Examples 49-50 on pg. 52 of Handout*
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Term
Creation of an Affirmative Easement |
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Definition
- Can Arise in any of 4 Ways
- Remember PING
- Prescription:
- Easement may be acquired by satisfying the elements of adverse possession (AP)
- Note: Permission defeats the acquisition of an easement by prescription
- Easement by Prescription requires that the use be hostile (never got permission to do what you're doing)
- Implication:
- Easement implied from existing use
- Previous use was apparent, and
- Parties expected it would continue b/c it is reasonably necessary to the dominant land's use and enjoyment
- *Example 51 on pg. 53 of Handout*
- Necessity:
- The Landlocked Setting
- An easement of right of way will be implied necessary if grantor conveys a portion of his land with no way out except over part of the grantor's remaining land
- Grant:
- Easement to endure for more than one year must be in a writing that complies w/ formal elements of a deed
- B/c of SoF
- The writing to evidence easement is called The Deed of Easement
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Term
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Definition
- Determined by the terms that created it
- Unilateral expansion not allowed
- *Example 52 on pg. 54 of Handout*
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Term
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Definition
- Estoppel:
- Servient Owner (SO) materially changes position in reasonable reliance on the easement holder's assurances that the easement will not be enforced
- *Example 53 on pg. 55 of Handout*
- Necessity:
- Easements created by necessity expire as soon as the need ends
- If the easement attributable to necessity was created by express grant it persists even when the need ends
- *Example 54 on pg. 55 of Handout*
- Destruction:
- Destruction of SL, other than through willful conduct of SO ends the easement
- Condemnation:
- Condemnation of servient estate by eminent domain ends the easement
- Release:
- A written release, given by easement holder, to the SO
- Abandonment:
- Easement holder must demonstrate by physical action the intent to never use the easement again
- Note: Requires physical action by the easement holder
- Mere nonuse or mere words are insufficient to terminate by Abandonment
- *Example 55 on pg. 56 of Handout*
- Merger Doctrine (aka Unity of Ownership):
- Easement is extinguished when title to the easement and title to SL becomes vested in same person
- *Example 56 on pg. 56 of Handout*
- Note:
- If complete unity of title is achieved, the easement is extinguished
- Even though there may be later separation of title, the easement is not reinstated
- Prescription:
- SO may extinguish the easement by interfering with it in accordance w/ elements of AP
- *Example 57 on pg. 57 of Handout*
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Term
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Definition
- A mere privilege to enter another's land for a delineated purpose
- Licenses not subject to SoF
- Don't need a writing to create license
- Freely revocable, at the will of licensor, unless estoppel applies to bar revocation
- Classic License Cases:
- Ticket Cases:
- Tickets create freely revocable licenses
- Neighbors Talking by the Fence:
- Always bad outcome follows
- Oral easement creates freely revocable license
- *Example 58 on pg. 58 of Handout*
- Estoppel:
- Will apply to bar revocation only when the licensee has invested substantial money, labor, or both in reasonable reliance on the license's continuation
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Term
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Definition
- Entitles its holder to enter the SL and take from it:
- The soil or some substance of the soil, like minerals, timber, or oil
- The profit shares all the rules of easements
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Term
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Definition
- Covenant is a promise to do or not do something related to land
- Unlike an easement b/c it is not the grant of property interest
- Rather a contractual limitation or promise regarding land
- Usually negative (Restrictive Covenants (RC))
- RC is a promise to refrain from doing something related to land
- Example: Promise not to build for commercial purposes
- Can also be Affirmative (AC)
- AC is a promise to do something related to land
- Example: Promise to paint our common fence
- How to know whether to construe the given promise as a covenant or as an equitable servitude:
- On the basis of remedy P seeks
- If P seeks money damages, construe at law as covenant
- If P wants injunction, construe as equitable servitude
- In Covenant Parlance, one tract is burdened by the promise and another is benefited
- When will the covenant run w/ the land?
- *Example 59 on pg. 60 of Handout*
- Two separate contests must be resolved
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Term
First Contest: Does the Burden of A's Promise to B run from A to A1? |
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Definition
- Always analyze burdened side first
- Harder for burdens to run than for benefits to run
- Remember WITHN
- Elements Necessary for Burden to Run:
- Writing:
- Promise between A and B was in writing
- Intent:
- Original parties intended that the covenant would run
- Note: Courts are generous in finding the requisite intent
- Touch and Concern the Land:
- Promise must affect the parties' legal relations as landowners and not simply as members of the community at large
- Note: Covenants to pay money to be used in connection w/ land (HOA fees) and covenants not to compete do touch and concern the land
- Horizontal and Vertical Privity both Required for Burden to Run:
- Horizontal Privity (HP): nexus b/t original parties
- Requires succession of estate, meaning they were in grantor/grantee, landlord/tenant, or mortgagor/mortgagee relationship
- Vertical Privity (VP): nexus b/t A and A1
- Requires some non-hostile nexus such as contract, devise, descent
- Only time vertical privity will be absent is if A1 acquired interest through AP
- Notice:
- A1 had notice of the promise when he took
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Term
Second Contest: Does the Benefit of A's Promise to B Run from B to B1? |
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Definition
- Writing
- Promise from A to B was in writing
- Intent
- Original parties intended benefit to run
- Touch and Concern
- Promise affects parties as landowners
- VP
- Non-hostile nexus b/t B and B1
- Note: HP is not required for benefit to run
- Note: In most cases you'll be asked to assess whether both the burden and benefit run, don't get thrown if only one side has been transferred in a fact pattern
- *See "For Example" pg. 62 of Handout*
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Term
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Definition
- Promise that equity will enforce against successors
- Accompanied by injunctive relief
- To create ES that will bind successors:
- WITNES:
- Writing
- Intent
- Touch and Concern
- Notice
- Equitable Servitude
- Note: Privity not required to bind successors
- Implied ES (General or Common Scheme Doctrine):
- *Example 60 on pg. 63 of Handout*
- Two Elements:
- When the sales began, subdivider (A) had a general scheme of residential development which included Defendant's lot
- Defendant lotholder (B) had notice of the promise in the prior deeds
- Three Forms of Notice potentially imputed to defendant:
- Remember AIR
- Actual Notice: D knew of common restriction
- Inquiry Notice: Neighborhood conforms to common restriction
- Record Notice: Form of notice sometimes imputed to buyers on basis of public records
- Inquiry and Record Notice are both forms of Constructive Notice
- Equitable Defenses to enforcement of ES:
- Changed Conditions:
- Changed circumstances alleged by party seeking release from terms of ES must be so pervasive that the entire area has changed
- Mere pockets of limited change never good enough
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Term
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Definition
- Basic Concept: Possession for a statutorily prescribed period of time can ripen into title if certain elements met
- Elements: COAH
- For possession to ripen into title it must be:
- Continuous
- Uninterrupted for statutory period
- Open and Notorious
- Sort of possession the usual owner would make under the circumstances
- Actual Entry
- Giving exclusive possession
- Hostile
- Possessor doesn't have owner's consent to be there
- Note: Possessor's subjective state of mind irrelevant
- Tacking:
- One adverse possessor may tack on to his time w/ the land his predecessor's time, as long as:
- There is privity
- Satisfied by any non-hostile nexus, such as contract, deed, or will
- *Example 61 on pg. 66 of Handout*
- Disabilities:
- SoL will not run against a true owner who is afflicted by a disability at the start of the AP
- Common Disabilities: insanity, infancy, imprisonment
- *Example 62 on pg. 66 of Handout*
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Term
Land Conveyance: The Purchase and Sale of Real Estate |
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Definition
- Every conveyance of real estate consists of a 2 Step Process
- Step 1: The Land Contract
- Transfers equitable title from Seller (S) to Buyer (B)
- Land Contract endures until step 2
- Step 2: The Closing
- Deed becomes operative document
- Deed transfers legal title from S to B, giving B right to possession
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Term
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Definition
- The LC and the SoF
- Problem of Risk of Loss
- Two Implied Promises in Every LC
- LC Contains no Implied Warranties of Fitness or Habitability
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Term
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Definition
- Standard:
- Must be in writing
- Signed by the party to be bound
- Must describe Blackacre
- Must state some consideration
- When the amount of land recited in LC is more than actual size of parcel:
- Specific Performance w/ pro rata reduction in price
- *Example 63 on pg. 67 of Handout*
- One Exception to SoF:
- Doctrine of Part Performance:
- If you have 2 of the following 3, the doctrine is satisfied and equity will decree specific performance of an oral contract for sale of land
- B takes possession,
- B pays all or part of the price, and/or
- B makes substantial improvements
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Term
The Problem of Risk and Loss |
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Definition
- Remember, LCs give B equitable title
- LC gives equitable title
- Closing gives deed and legal title
- In equity, once contract is signed B owns the land subject to the condition that he pay the purchase price at closing
- Doctrine of Equitable Conversion:
- Equity regards as done that which ought to be done
- Important Result: Destruction
- If in interim b/t contract and closing Blackacre is destroyed through no fault of either party, B bears the risk of loss unless contract states otherwise
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Term
Two Implied Promises in Every LC |
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Definition
- S promises to provide marketable title at closing
- Standard: Title free from reasonable doubt, free from lawsuits and threat of litigation
- Three Circumstances will render title unmarketable:
- AP: Even if part of title rests on AP it is unmarketable; S must be able to provide good record title
- Encumbrances: Marketable title means an unencumbered fee simple
- Mortgages and Servitudes render title unmarketable unless B has waived them
- Note:
- S has right to satisfy outstanding mortgage or lien at closing w/ proceeds of sale
- B can't claim title unmarketable b/c it is subject to a mortgage prior to closing so long as parties understand that the closing will result in mortgage being satisfied or discharged
- Zoning Violations: Title is unmarketable when Blackacre violates a zoning ordinance
- S promises not to make any false statements of material fact
- Majority of states hold S liable for failing to disclose latent material defects
- S is liable for material lies and omissions
- If contract contains a general disclaimer of liability ("as is" or "with all faults") the disclaimer won't excuse S from liability for fraud or failure to disclose
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Term
LC Contains No Implied Warranties of Fitness or Habitability |
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Definition
- C/L Norm: Caveat Emptor (buyer beware)
- Important Exception:
- Implied Warranty of Fitness and Workmanlike Construction
- Applies to the sale of a new home by a builder-vendor
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Term
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Definition
- Controlling document is now the Deed
- Deed passes legal title from S to B
- For Deed to pass legally from S to B it must be LEAD:
- Lawfully
- Executed
- And
- Delivered
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Term
Lawful Execution of a Deed |
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Definition
- Standard: Must be in writing signed by the grantor
- Note: Deed need not recite consideration and consideration don't have to pass to make a Deed
- Description of the land doesn't have to be perfect but it must be unambiguous and provide a good lead
- *Examples 64-65 on pg. 71 of Handout*
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Term
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Definition
- Delivery requirement could be satisfied when grantor physically transfers Deed to grantee
- Permissible to use mail, an agent, or a messenger
- Delivery doesn't necessarily require physical transfer of Deed itself
- Standard for Delivery is Legal Standard
- A test solely on present intent
- Ask: Did grantor have the present intent to be bound irrespective of whether or not the deed was handed over
- Recipient's express rejection of Deed defeats delivery
- *Example 66 on pg. 71 of Handout*
- If Deed, absolute on its face, is transferred to a grantee with an oral condition, the oral condition drops
- Not provable, delivery is achieved
- *Example 67 on pg. 72 of Handout*
- Delivery by Escrow is permitted
- Grantor may deliver executed Deed to a third party (escrow agent) w/ instructions that Deed be delivered to grantee once certain conditions are met
- Once conditions are met title passes to grantee
- Advantage of Escrow:
- If grantor dies, becomes incompetent, or is otherwise unavailable before express conditions are met, title still passes from escrow agent to grantee once conditions are met
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Term
Covenants for Title and Three Types of Deeds |
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Definition
- Quitclaim
- General Warranty Deed
- Statutory Special Warranty Deed
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Term
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Definition
- Contains no covenants
- Grantor isn't even promising that he has title to convey
- Worst kind of Deed for B
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Term
General Warranty Deed (GWD) |
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Definition
- Best Deed for B
- Warrants against all defects in title
- Includes those attributable to grantor's predecessors
- GWD typically contains all 6 of the following Covenants:
- First 3 are present covenants
- Present Covenant is breached, if ever, at moment of delivery
- SoL for for breach of present covenant begins to run from the instant of delivery
- Next 3 are future covenants
- Future Covenant is not breached, if ever, until grantee is disturbed in possession
- SoL for breach of future covenant won't begin to run until that future date
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Term
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Definition
- Covenant of Seisin:
- Grantor promises she owns the estate
- Covenant of Right to Convey:
- Grantor has power to transfer
- Grantor under no legal restraints
- Grantor under no temporary disability
- Covenant Against Encumbrances:
- No servitudes or mortgages on Blackacre
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Term
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Definition
- Covenant of Quiet Enjoyment:
- Grantee won't be disturbed in possession by a third party's lawful claim of title
- Covenant of Warranty:
- Grantor will defend against lawful title claims brought by others
- Covenant for Further Assurances:
- Grantor will do whats needed in the future to perfect the title
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Term
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Definition
- Our Model: The course of the "double dealer"
- O conveys Blackacre to A
- O conveys Blackacre to B
- O (double dealer) dips out
- Battle b/t A and B
- Two Brightline Rules
- Two Routine Value Questions
- Three Forms of Notice
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Term
Recording Brightline Rules |
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Definition
- If B is a Bona Fide Purchaser (BFP) in a Notice Jurisdiction, B wins regardless of whether or not he records before A does
- If B is a BFP in a Race-Notice Jurisdiction, B wins if he records properly before A does
- Recording acts exist to protect only BFPs and Mortgagees (creditors)
- A BFP is one who:
- Buys Blackacre for value; and
- W/out notice that someone else got there first
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Term
Recording Routine Value Questions |
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Definition
- The Bargain Basement Sale
- If B remits substantial pecuniary consideration he is a buyer for value
- *Example 68 on pg. 75 of Handout*
- The Case of the Doomed Donee:
- Recording statutes do not protect heirs or devisees unless Shelter Rule applies
- *Example 69 (giggity) on pg. 76 of Handout*
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Term
Three Forms of Notice B May Potentially Be Charged With |
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Definition
AIR
- Actual Notice (AN): Prior to B's closing, B learns of A
- Inquiry Notice (IN):
- Whether B looks or not, on IN of whatever an examination of the land would show
- B of real estate has duty to inspect before transfer of title
- If another is in possession, B has IN regardless of whether B inspected or not
- If A was in possession B would be on IN
- B's status of BFP is defeated
- If a recorded instrument makes reference to an unrecorded transaction, grantee is on IN of whatever a reasonable following would reveal
- Record Notice (RN):
- B is on RN of A's Deed if at the time B takes A's Deed is recorded properly
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Term
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Definition
- The Notice Statute:
- "A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, w/out notice thereof, unless the conveyance is recorded"
- If at time B takes he is a BFP he wins
- Won't matter that A may record first
- Won't matter that B never records
- Last BFP to take wins
- The Race Notice Statute:
- "Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, w/out notice thereof, whose conveyance is first recorded"
- To prevail B must:
- Be a BFP, and
- Win the race to record
- *Example 70 on pg. 78 of Handout covers both*
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Term
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Definition
- The Shelter Rule:
- One who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against
- Transferee "takes shelter" in the status of her transferor
- "Steps into Shoes" of BFP even though otherwise fails to meet requirements of BFP status
- *Example 71 on pg. 78 of Handout*
- Note: The Shelter Rule aims to protect BFP by making it easier for B to transfer successfully w/out being penalized for O's "double dealings"
- Problem of the Wild Deed:
- Rule of the Wild Deed:
- If a deed, entered on the records (A to B), has a grantor unconnected to chain of title (O to A), the deed is a wild deed
- Incapable of giving record notice of existence
- As if it were never recorded
- *Example 72 on pg. 79 of Handout*
- Estoppel by Deed:
- One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if:
- He later acquires that previously transferred interest
- *Example 73 on pg. 80 of Handout*
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Term
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Definition
- Our Model:
- C, a creditor, is thinking of lending O 50k
- O offers Blackacre as collateral
- Creation of Mortgage
- Equitable Mortgage
- Parties Rights in Mortgage
- Transfer of Interests in Mortgage
- Foreclosure
- Effects of Foreclosure
- Priorities
- Redemption (statutory and in equity)
- Consumer Protection Defenses to Foreclosure
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Term
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Definition
- Mortgage:
- Conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a debt
- Union of Two Elements:
- A debt, and
- A voluntary transfer of a security interest (or lien) in debtor's land to secure debt
- Debtor: Mortgagor
- Creditor: Mortgagee
- Purchase Money Mortgage (PMM):
- Mortgage given to secure a loan that enables debtor to acquire now-encumbered land
- Non-Purchase Money Mortgage (NPMM):
- Borrow money for something else and put up land as collateral for repayment of that loan
- Mortgage must typically be in writing to satisfy SoF
- Legal Mortgage: evidenced by writing
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Term
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Definition
- *Example 74 on pg. 81 of Handout*
- Creditor loans O money, Blackacre is the collateral, instead of executing note or mortgage deed O hands creditor Deed to Blackacre that is absolute on its face
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Term
Parties Rights in Mortgage |
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Definition
- Unless and until foreclosure, debtor-mortgagor has title and right to posses
- Creditor-Mortgagee has a lien
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Term
Transfer of Interest in Mortgage |
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Definition
- Mortgage automatically follows a properly transferred note
- Creditor-Mortgagee can transfer his interest by:
- Endorsing the note and delivering it to the transferee, or
- Executing a separate document of assignment
- If note is endorsed and delivered, transferee is eligible to become holder in due course
- Takes note free of any personal defenses that could have been raised against original mortgagor
- Personal Defenses include:
- Lack of Consideration
- Fraud in the Inducement
- Unconscionability
- Waiver
- Estoppel
- Holder in due course may foreclose the mortgage despite any such personal defense
- By Contrast: Holder in due course is still subject to "real" defenses that the original debtor-mortgagor (maker) might raise
- MAD FIFI4, The Real Defenses (next card)
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Term
Transfer of Interest in Mortgage |
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Definition
- Mortgage automatically follows a properly transferred note
- Creditor-Mortgagee can transfer his interest by:
- Endorsing the note and delivering it to the transferee, or
- Executing a separate document of assignment
- If note is endorsed and delivered, transferee is eligible to become holder in due course
- Takes note free of any personal defenses that could have been raised against original mortgagor
- Personal Defenses include:
- Lack of Consideration
- Fraud in the Inducement
- Unconscionability
- Waiver
- Estoppel
- Holder in due course may foreclose the mortgage despite any such personal defense
- By Contrast: Holder in due course is still subject to "real" defenses that the original debtor-mortgagor (maker) might raise
- If debtor-mortgagor sells Blackacre, which is now mortgaged, the lien remains on the land so long as the mortgage was properly recorded
- In a notice state a subsequent BFP prevails over prior grantee or mortgagee who has not yet recorded properly at the time the BFP takes
- See (iii) on pg. 85 for personal liability on debt
- *Example 75-76 on pg. 84-85 of Handout*
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Term
The Real Defenses (Mortgages) |
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Definition
MAD FIFI4
- Material change in instrument
- Alteration of instrument
- Duress
- Fraudulent In the Factum (lie about the instrument)
- Incapacity
- Illegality
- Infancy
- Insolvency
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Term
Holder in Due Course (Mortgage) |
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Definition
- To be a Holder in Due Course of the note, following criteria must be met:
- Note must be negotiable, made payable to named mortgagee;
- The original note must be endorsed, signed by named mortgagee;
- Original note must be delivered to the transferee;
- Photocopy is unacceptable trash
- Transferee must take the note in good faith, w/out notice of any illegality; and
- Transferee must pay value for the note
- Some amount that is more than nominal
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Term
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Definition
- How to proceed assuming mortgagee-creditor must look to land for satisfaction:
- Mortgagee must foreclose by proper judicial action
- At foreclosure land is sold
- Sale proceeds go to satisfying the debt
- If sale proceeds are less than amount owed, mortgagee brings deficiency judgment for remaining amount
- If Surplus, junior liens are paid in order of priority
- Any remaining surplus goes to debtor
- *Example 77 on pg. 86 of Handout*
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Term
Effect of Foreclosures on Various Interests |
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Definition
- Foreclosures will terminate interests junior to the mortgage being foreclosed but will not effect senior interests
- Those with interests subordinate to those of the foreclosing party are necessary parties to the foreclosure action
- Debtor-mortgagor also considered necessary party and must be joined, particularly if creditor wants to sue dat nigga for personal deficiency judgment
- Failure to include necessary party results in preservation of that party's claim
- If necessary party not joined, mortgage remains on land
- Foreclosure doesn't effect senior interests
- B at sale takes subject to such interests
- B is not personally liable on senior debt
- If senior mortgage not paid, will foreclose
- *Example 78 on pg. 87-88 of Handout*
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Term
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Definition
- As a creditor, you must record
- Until you properly record your mortgage you have no priority
- Once recorded, priority is determined by norm of first in line first in right
- PMM: Mortgage given to secure a loan that enables a debtor to acquire encumbered land
- *Example 79 on pg. 89 of Handout*
- Purchase Money Mortgagee's Super Priority
- *Example 80 on pg. 89 of Handout*
- Subordination Agreements:
- Are permissible
- Senior creditor can subordinate its priority to a junior creditor
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Term
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Definition
- Redemption in Equity:
- Equitable Redemption is universally recognized up to date of sale
- Any time prior to foreclosure sale, debtor can try to redeem the land
- Once a valid foreclosure has taken place, the right to equitable redemption is gone
- Equitable Redemption is exercised by passing off the missed payment or payments plus interests plus costs
- Acceleration Clause:
- Permits the mortgagee to declare the full balance due in event of default
- If mortgage contains an Acceleration Clause, the full value + accrued interest + costs must be paid to redeem
- Clogging the Equity of Redemption:
- Prohibited
- A debtor may not waive the right to redeem mortgage itself
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Term
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Definition
- Recognized in half the states
- Gives debtor-mortgagor of a statutory right to redeem for some fixed period after the foreclosure sale
- Typically 6 months to 1 year
- Where recognized, applies after foreclosure
- Amount to be paid is usually foreclosure sale price rather than amount of original debt
- In most states that recognize statutory redemption, mortgagor has the right:
- To possess Blackacre during statutory period
- When mortgagor redeems, effect:
- Nullify the foreclosure sale
- Redeeming owner is restored to title
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Term
Consume Protection Defenses to Foreclosure |
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Definition
- Rules and Regulations designed to protect consumers from unfair lending practices
- Dodd-Franks Act (Act):
- Requires residential mortgage lenders to determine a mortgagor's ability to repay before making the loan
- Terms of loan must be understandable, and not unfair, deceptive, or abusive
- A lender's violation of Act can be used by the mortgagor as a defense in lender's foreclosure action
- Consumer Rights During Foreclosure Process:
- After mortgagor has defaulted, mortgagee must in good faith consider a request made by mortgagor for a loan modification or other alternative to foreclosure
- Mortgagee cannot file foreclosure action while such a request is pending
- If request is made after foreclosure action is filed, mortgagee cannot proceed to foreclose sale until request is resolved
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Term
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Definition
- If land is improved by buildings and an adjacent landowner's excavation causes that improved land to cave in, excavator will be liable only if negligent
- Strict Liability doesn't attach to the excavator's actions unless P shows that, b/c of D's actions, P's improved land would have collapsed even in its unadorned state
- P must show that improvements on his land did not contribute to his land's collapse for Strict Liability to apply
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Term
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Definition
Two Major Systems for Allocation in Watercourses:
- Riparian Doctrine:
- Water belongs to those who own the land bordering the watercourse
- These people known as riparians, who share the right of reasonable us of the water
- One riparian will be liable if use unreasonably interferes w/ other's use
- Prior Appropriation Doctrine:
- Water belongs initially to the state, but right to divert and use it can be acquired by an individual
- Regardless of whether or not he happens to be a riparian owner
- Rights are determined by priority of beneficial use
- Norm for Allocation: first in line first in right
- A person can acquire right to divert and use water from a watercourse merely by being the first to do it
- Any productive or beneficial use of water, including use for agriculture is sufficient to create Appropriation Right
- Groundwater (aka Percolating Water):
- Water beneath the surface of the earth that is not confined to a known channel
- Surface owner is entitled to make reasonable use of groundwater
- Use must not be wasteful
- Surface Waters:
- Common Enemy Rule:
- Surface water is a nemesis (like Doug and Alex Nguyen) and needs to be eradicated
- Landowner may change drainage or make any other changes/improvements on his land to combat the flow of surface water
- Many courts have modified rule to prohibit unnecessary harm to other's land
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Term
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Definition
- The possessor of land has the right to be free from trespass and nuisance
- Trespass:
- Invasion of land by physical object
- To remove trespasser, bring ejection action
- Private Nuisance:
- The substantial and unreasonable interference with another's land use
- Note:
- Unlike trespass, nuisance does not require physical invasion
- Odors and noise could give rise to a nuisance, but not a trespass
- Nuisance and the Hypersensitive P
- *Example 81 on pg. 93 of Handout*
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Term
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Definition
- Land Use Motha Fucka
- Pursuant to its police powers, gov may enact statutes to reasonably control land use
- The Variance
- Nonconforming Use
- Cumulative Zoning
- Unconstitutional Exactions
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Term
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Definition
- Principle means to achieve flexibility in zoning
- Proponent of the variance must show undue hardship and that granting of variance will not work diminution to neighboring property values
- Variance is granted or denied by administrative action, usually a zoning board
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Term
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Definition
- A once lawful, existing use now deemed nonconforming by a new zoning ordinance
- Cannot be eliminated all at once unless just compensation is paid
- Otherwise it could be deemed an unconstitutional taking
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Term
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Definition
- There are two types of zoning ordinances:
- Cumulative
- Noncumulative
- Cumulative Zoning Ordinance (CZO):
- Created a hierarchy of uses of land
- In order from highest use to lowest
- Single-family home
- Two-family home
- Apartment building
- Strip Mall
- Factory
- Under CZO, land that is zoned for a particular use may be used for that particular use or for any higher use
- *Example 83 on pg. 94 of Handout*
- Noncumulative Zoning Ordinance (NZO):
- Land may be used only for the purpose for which it is zoned
- *Example 84 on pg. 94 of Handout*
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Term
Unconstitutional Exactions |
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Definition
- Exactions:
- Those amenities govs seek in exchange for grating permission to build
- *Example 85 on pg. 95 of Handout*
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Term
Condominiums and Homeowners' Associations (HOA) |
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Definition
- Condominiums:
- Each owns the interior of her individual unit plus an undivided interest the exterior and common elements
- Examples: Common stairways, landscaping, the front gate, community room, etc.
- HOA:
- Oversees the common elements of a condo properly
- Owner of each condo is a member of the HOA
- HOA passes rules in a Declaration of Covenants, Conditions and Restrictions (CCR) that prescribe what owners can and can't do w/ their property
- Members of HOA vote to elect a board which governs and enforces CCR
- Each condo owner must pay regular dues or fees to HOA to maintain common elements
- If monthly fees aint enough to pay necessary expenses (major roof repair), HOA may impose additional one-time fees (special assessment) that each owner must pay
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