Property I Outline (2) Fall 2009

8/9/2019 Property I Outline (2) Fall 2009

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Property

General RuleRights among people with respect to things

Bundle of rights with respect to a thing held by one person in relationshipto another

Property exists to the extent that the law recognizes it (legally recognized )

Each interest has certain rights associated with it

Rights can be to sell (transfer), exclude/include, possess anduse

Rights are not absolute, they are subject to certain limitations

Goal of property law is to resolve conflicts of peoplewith competing interests; to determine whose rightsare superior

Determination of ownership, rights, interest in Property

Check the law! Property interest in things is your legally recognized interest

Right only to the extent that law will protect that right

Property rights are not absolute (they are limited)

Rights exist only to the extent that they serve humanvalues

o (socially-acceptable justification)

Two-Pronged Test in defining Property1). What are the rightsamong people with respect to the thing?

Land Fee Simple, Tenancy, etc. Right to Exclude/Include

Right to Transfer (sell)

Right Possess and Use

2). What are the things attached to the rights?

Real Property (Land)o Right in land and what is attached to the land (airspace,

groundwater )

Personal Property (Chattel)o Jewelry, livestock, coins, books

Exception: human organs (courts do not recognizeas personal property)

Wild animals in their natural habitat (un-owned)

Intangible Personal Propertyo Stocks, bonds, patents, trademarks, copyrights


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First Possession:Acquisition by Discovery, Acquisition by Capture, Acquisition by Creation

First Occupancy (First Possession) Theory in General

First person to take occupancy or possession of the thing, owns it

Explains property rights in un-owned natural resources

Still the basic rule for determining priority of competing title claims inreal property

Offers quick, inexpensive method to resolve competing claims andavoid conflict

Drawback

Counterproductive because it wastes natural resources

Long-term conservation is impossible Ex.A,B, C all own parcel of land with underlying oil

deposit

A pumps out all underground oil so that no one else canclaim it, therefore no incentive to preserve for future use

John Lockes Labor Theory (Lockean Labor Theory)

Every person owns his own body

Each person owns the labor that his body performs

A person who labors to change something in nature for his benefit,mixes his labor with the thing

By mixing his labor with the thing he acquires rights in the thing

Acquisition by Discovery

Rule of DiscoveryDiscovery of land vests absolute title in the discoverer

Johnson v. MIntosh

Court issue is who has superior title to the land

Did Indians have right to sell the land to Plaintiff?

No, Indians only had right of occupancy

Indians had no legally recognized right to sell the land

Discoverer (European) had superior right to title of theland

Property right defined by law: Rule of Discovery


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Acquisition by Capture

Law of CaptureApplies only to animals in their natural habitat for to apply (notdomesticated or tamed)

Pierson v. PostEstablished the actual capture rule as American Standard for acquiringtitle to wild animals

General Rule for Law of Capture Majority rule

(Does not apply to domesticated animals) No one can own a wild animal

Ownership is acquired only through physical possession of theanimal

Physical possession (dominion and control) is:o First to capture or kill acquires title to it

Mortally wounding animal without giving up pursuit toacquire title to it

i.e. animal traps

Trapping also w/o abandoning is sufficient to constitutepossession of the wild animal

o Must then take the added step of taking possession

of it Mere chasing or pursuit does not give one a right to possession

against another who captures it (has dominion over)

If trap and escapes animal retains its wild animal status,possession is lost

o Exception: animal released and returns to captor

(animus revertendii)

Still property of captorWild Animal Rule

Only applies to wild animals in natural habit

If outside natural habit, gives notice that it belongs to

someone else Cannot acquire title to it

Public Policy RationaleReward successful hunters, ensured certainty in property rights,minimized arguments

Probable Capture Standard Minority Rule


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A pursuing hunter with a reasonable chance of capturing the animalis sufficient to create possession

Exception to General RuleAnimus Revertendi

A captured (or tamed) animal that has the habit of occasionallyreturning to its captor (captor is still considered the owner/possessor)

Include exotic animals not in natural habitat (i.e. giraffe,elephant)

Exotic nature of animal puts others on notice

Public Policy RationaleMotivates owners to tame wild animals for productive useoutweighs certainty

Actual Capture Standard and the Role of Custom*Court says that when dealing with industry custom or practice

relating to capture, then it should prevail*

Ghen v. Richo Rich takes blubber and oil from the whale that was harpooned and

killed by Gheno Rich acts contrary to custom that whoever kills the whale owns the

whaleo Only applies when referencing trade or commercial industry, not

sport/recreationo Custom was Judicially accepted

Public policy rationale

Critical to survival of local whaling industry

Public Policy Rationale for Capture Custom in Industry and TradeEndeavors that require a particular skill with outlay of significant

capital

Rights of Landowners Wild animals on the Land

Rule is ratione solio The owner of land has possession (constructive) of wild animals on his

land

Landowners are regarded as prior possessors of any animals ontheir land until the animals escape

Cannot trespass onto another land and kill/claim animalModern Law

Now replaced under Trespass lawsOnce animal leaves property; owner loses constructive

possessionTitle

2 can have titleA trespasses on Bs land and takes property


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B trespasses on As land and takes back propertyAs between A &B, B has superior title

Keeble v. Hickeringillo Plaintiff set up a decoy pond to lure and kill ducks on his land

o Defendant essentially interfered with Keebles trade by scaring the

ducks away (malicious interference with trade)o Court used doctrine of ratione soli

Public Policy Rationale for Capture RuleEncourages killing/capture of wild animals for benefit of society

Acquisition by Creation

Property in Ones Ideas and Expressions

Rights in the News

General Ruleo Property rights cannot exist in an idea

o Common Law Rule: Any product can be imitated or copied

o No property right in news as relates to general public

Rule: Absent some special common law or statutory right, a mans propertyis limited to the chattels which embody his invention

o Law does not favor monopoly but competition

International News Service v. Associated PressAssociated Press brought suit against INS for pirating and selling news thatAP gathered

No property right in the news itself; only property right is the creationof an original story from the news (article)

News creates itself; your interpretation is the property right(copyright)

As between competitors, court recognizes Quasi Right in newsgathering process

Cheney Brothers v. Doris Silk Corp.(1930) Defendant copied plaintiffs design

Court says that you can imitate any product (common law rule)o No copyright in the design (not protected)

o Modern Law: copyright in ability to create the design

Rights of Publicity


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White v. Samsung Electronics America, Inc.

Actor, politician or famous person has a property right to exclusive use ofname andlikeness for financial gainImage/Likeness (Vanna White Case)

Property rights to extent that one uses to make a living

Property Rights in Ones PersonMoore v. Regents of The University of California

General Rule:

Law generally acknowledges the authority of all persons to control thedestiny of their body parts(i.e. blood, bone marrow, hair)

Supreme Court overturned Court of Appeals and says no conversion (noproperty right)

Majority held that there is no ownership interest in cells after removalo No property rights in body parts/person

o Public Policy

Rationale:Court will not create property rights because of the larger Public policyat play pertaining to medical advancement research.


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Acquisition by Gift

Gift Apresenttransfer of an interestin propertyCan be present interest or a future interest

Inter Vivos GiftGift given during ones life time or gifts between living persons

o Living donor makes an immediately effective (present)transferof property ownership to a living donee

Elements of Inter Vivos Gift

Irrevocable at the moment gift is given

Only way to get gift back is to have donee return/re-deliver gift

Testamentary GiftGifts that take effect upon the donors death (gift made in a will)

Gift Causa MortisGift given in response to impending death (deathbed gifts)

Elements of Gift Causa Mortis

Revocable if donor does not die

Must die from exact illness or threat of death that prompted thegift

Death must be imminent

Is subjective (donee must believe his death is imminent)

Gift Requirement1). Intention

Donor must intend to make an immediate (present) gift to thedonee

If a condition precedent there is no intent to make a gifto Condition Precedent


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o Donee has to do something to receive the gift

Ex. Father promises to give daughter a car if shegets an A in Property

Standard has to be clear and convincing; must be intent to givean immediate gift. Undisputed on the facts.

Title must transfer interestnot possession.

Possession may not happen until sometime in the future (validintent)

Ex: Gruen v. Grueno Gift was immediate because it was a transferof

interest/rights in a painting given to son on hisbirthday even thoughpossession was notimmediate (happened upon fathers death)

Intent exists to confirm donors subjective intent (stateof mind) to give giftModern Law

Delivery is subordinate to intent

If neither of above delivery methods is performed, mustlook at intent

So long as requisite intent is there, court will recognizethe gift even if delivery is not fully performed

2). DeliveryMain feature of delivery is Dominion and Control

Actual/Physicalo Donor must (physically) deliver the gift

o Main method of delivery for items of tangible

personal propertyo If you have dominion or control of the thing then:

Anything that can be delivered shouldbe delivered

o Courts favor actual delivery over all other delivery

methodso Deters fraud

Constructive

When manual delivery is impractical orimpossible

Only permissible when actual delivery is impossible

at time of gift Delivering a means of access of thing being gifted

Ex. Keys to a caro Donor physically transfers to donee means of

obtaining access to and control of property(handing over a key or title)

Symbolico Handing over something symbolic of the gift given


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o Written instrument declaring a gift of the subject

matter (title, letter, memo, note) that may be givenin conjunction with symbol

Ex. Deed to Land

Not the thing that gives you access to ormeans to control the thing

Agent Delivery (Delivery to a Third Party)

o To be effective, it depends on who it is delivered to

o Depends on relationship of parties that creates the

controlo Must look at who agent is to determine when

delivery is effectiveo If an agent of donor, then delivery is not complete

o If an agent of donee, then gift is delivered and

complete when gift is delivered to agent

Public Policy Goals Donee possession demonstrates donors intent to make a

gift Delivery warns donor about legal significance of the act

(prevents impulsive decisions)

Donees possession provides prima facie evidence that agift was made

Delivery exists to assure that there is an act to provideobjective manifestation of the donors subjective intent(Evidentiary in nature)

Corroborates intent to make a present gift3). Acceptance

Gift must be Accepted

Intention may be shown by oral evidence

Acceptance is assumed if gift is beneficial orvaluable to donee

o If acceptance is not assumed (a detriment to

donee), must be an added step of acceptance

Express acceptance (?)

Acquisition of Property by Find Finders Law

1. Important to identify Findera. First person to take control

2. Must be an act of controla. What acts constitutes sufficient control

3. Must determine what type of property4. Must identify competing claims


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5. Where is property found?6. Identify category of property

Lost

Owner involuntarily parted with the item and does notknow locationo

Length of lost time is inconsequential Rights superior to finder

Finder has superior rights to everyone in world excepttrue owner

Original owner always maintains ownership

First person to find; has title over anyone except true owner

If found on someone elses property (legally there), then it isyours

Exception:If you are there as a trespasser and find then it is not yours

If attached to or affixed to the land, generally the owner hassuperior title to yours

If owner has not taken possession of the land /title may or maynot be superior to yours

When found by an employee, claim is between employee andemployer

o Under agency law, employer has superior title

Mislaid

Owner intentionally places item in a location and forgets thelocation

True owner has right superior to finder

Finder is first person to take possession/control

Finder has superior rights to everyone in world except true

owner Exception:

o If found on property of another (house, shop, store)

o Owner of property where mislaid property is found

is entitled to possession over findero Property owner has superior title to everyone

including the finder, but not to original ownero Is person in the best position to return to original

owner

Owner of property is now bailee to original owner

Original owner always maintains ownership

Abandonedo Intentionally relinquished property

o Must look at subjective intent of person who abandoned

Express words or conduct

Would reasonable person ascertain by conduct that property isabandoned?

Finder is 1st person to find and intent to claim property as theirown


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Has superior to title to everyone including the owner

Where was it abandoned, what type of property is it

Treasure Trove

Usually gold bullion, silver (hidden by unknown person)

Hidden by unknown owner for an extended period of time or in

distant past Governed by other laws of Finders LawException:

If property is found embedded or otherwise affixedto land of another, it belongs to property owner wherelost property is found

If found on top of land, and not a trespasser, youcan be a finder of that lost property

True owner always retains ownership unless they haveabandoned; then must look at subjective intent

Not considered treasure trove unless identity of owner isunknown

May be distant past

Must look at where it is found

Follows general rule of Finders Law (lost, mislaid, abandoned)

Adverse Possession

Mixture of Statutory and State Law

Statute of Limitations requiremento Owner of property must make a superior claim to property by someone

who is adverse possessing the owners property

o Ranges from 10-20 years To acquire title to your property

Adverse Possession is an affirmative defense; must raise the defense; is notautomatic after the SOL

Some jurisdictions require occupant to pay taxes against the land

Elements (based on the use by a reasonable owner)Actual


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o Must physically occupy or use the particular parcel of land

o Must be used in the same manner that the true owner would use the

land

Depends on circumstances; can be residence, cultivation,improvement, grazing, pasturing, hunting, fishing or other usefulactivities

o

Must look at character, nature, and location of the lando Acts are different due to character of land

Act for possession of single family home will be different than a1,000 acre tract of land

o General Rule

Adverse Possessor only has title to land that he actuallyoccupies or uses

Bears burden of proving the boundaries

True Owner continues to own any UNOCCUPIED land

Constructive Ownership by Color of TitleGeneral Rule

Can only acquire title to the land AP actually occupies

EX. If A cultivates 5 acres of a 500 acre farm and meetsother requirements of AP, then he only obtains title to the5 cultivated acres

Exception: Constructive Possession by Color of Title

Claim because of faulty instrument (deed/tax sale) that conveystitle

No conveyance of legal title

Benefits

Shortens statute of limitations! If claimant has actual possession of PART of land described (5 of

500 acres) in the deed (or other document) he is deemed tohave constructive possession to entire land described in thedeed

Exclusiveo Possession cannot be shared with true owner or general public

at large

o If TO shares possession with the parcel AP is using, then exclusivity iscut off

Statute of Limitations starts overo Occasional visit by 3rd party does not necessarily interrupt exclusive

Is only required to exclude those that a TO would exclude

Occasional trespasser may not cut off exclusivityTwo Adverse Possessors

If both occupy the land, then there is no exclusivity


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Court will normally rule that the 2 AP hold joint possession andwill acquire title as Tenants in Common

Open and Notoriouso Possession must so visible and obvious that TO who elects to inspect

his property is put on notice that someone is using his property

Posting signs, residing on land, building fences/improvementso If you clean up after yourself, then TO does not have notice

Secret or hidden activities do not satisfy notice to ownero Encroachment

Would a reasonable person be able to tell that someone is usingthe land with the naked eye

Court says will not require one to get land surveys to establishAP

HostileWithout permission from true ownerClaim of Title/ Claim of Right

Hostile without owners consent

3 viewsMajority (modern) Objective View (our view)

Subjective state of mind is irrelevant; AP must just usewithout consent

Possessors conduct is deemed objectively hostileJustification:

AP is a specialized SOL to recover possession of landEase of Administration; Provides a bright-line standard

Minority (Good Faith Test)(Claim of Right)AP must believe that they own land being adversely

possessedInnocently, but mistakenly believe

Justification:Method of curing minor title defects and protects title ofintended owner

Intentional TrespassMust know that land is not his and subjectively intends totake title from true owner (does not care and is takinganyway)

Continuous Must have been met for entire duration of Statutory Period

Must only be as continuous as that of a reasonable owner (look at nature ofproperty use

o Ex: Summer time use

Use in the same manner that reasonable owner uses

If TO returns to property it interrupts the continuity requirement (as well asexclusivity requirement)

o TO can interrupt continuous if he comes in uses land as you are

Transfer to successive TOs does not interrupt APs possessiono New Owner still has obligation to inspect and eject the AP


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*Intestate succession: succession by statute for someone who dieswithout a will*

Exception: Tackingo Successive Periods of AP by different persons combined together

o Satisfy the statutory duration requirement

Privity

Tacking is permissible only if successive claimants are in privitywith each other

Transfer of interest (can be deed, will; some legal means)

No privity between successive trespassers

Ex.If one AP owner uses for 10 years then transfers interest to another (privity)AP who uses for 10 years and neither use for the statutory period thenowners may tack together both periods to meet SOL requirement

Statutory Period (Requisite amount of time)Disability Statutes

oTolls the SOL

o If owner is under 18,(infancy), mentally unfit, imprisoned

o Disability of owner must exist at time AP starts possessingproperty

o After SOL is passed, Owner must bring action to eject AP within 10 years

after disability is removedo Owner has entire SOL period + 10 years after disability is removed

oThis only applies to Owner of the property

o If Disability arrives AFTER AP starts possession, it is irrelevant

o Disability has to be against the owner, not heirs, etc

Differences

SOL does not start to run until disability is over

Others provide that Statutory period begins running only AFTER disabilityends

Color of Title (Tolls statutory period) Claim founded on defective instrument

Defective instrument describes parcel of land

Statutory period is shortened but must still meet all elements of AP

At end of Statutory period will own everything described in the deed

Present Interests


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Present Estate (Possessory Estate )Freehold Estate

Must possess these 2 qualities

Immobile /Immovable

Land or some interest that derives from land

Duration

Indeterminate

3 type of Freehold EstatesFee Simple (the entire estate 100%)

o Not subject to any sort of termination

o Most common type of freehold estate

o Ex. O conveys to A and her heirs (Common Law)

o O conveys to A (Modern Law says sufficient)

GrantsDevises (willed)

Duration Indeterminate

When O conveys a fee simple and there are no heirs, thenO does NOT retain a reversion because he conveyed theentire estate (Fee simple).

o There is an escheatment to the state

*Escheatment*When there is no grantor at reversion or no heirs at

remainderFee Tail

Is a common law concept

O conveys to A and the heirs of her body

If heirs are in existence at time of grant they do have aninterest in the estate

Conveyance must be within the bloodline

Duration As long as a bloodline exists (not through adoption)

If A dies with no descendants or heirs from her body, the estateends

O retains a reversion; When O conveys a fee tail, hetransfers less than a Fee Simple therefore he has areversion

Life Estate

Endures for the life of a person

Always creates a future interest (remainder or reversion in theGrantor)Ex. O conveys to A for Life

This estate reverts back to O the grantorEx. O conveys to A for life, then to As heirs


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This estate gives a fee simple remainderin As heirs

O has given A, a Life Estate, then given a fee simpleremainder to As heirs

At this point there is no remainder or reversion after theheirs, it will fall into escheatment

Life Estate Pur Autre Vie (estate in the life of another)Ex. O conveys to A for the life of B

DurationIndeterminable because you do not know how long someone

will live

EscheatmentWhen there is no grantor at reversion or no heirs at remainder

Ambiguous language Must use Rules of Construction

Must yield to testators intent (words on the paper)

Common Law

Unless language is clear the legal presumption is that alife estate is intended unless the intent to pass Fee Simpleis clearly expressed

Public Policy

Law prefers as public policy the free alienability/transfer of land

It promotes the alienability and utility of land

Complete restraint on alienation is void as a matter of publicpolicy

Modern Law

Where the language is ambiguous, modern law will construe asa Fee Simple Transfer

Fee simple will be favored as a matter of law

Language must be clear on its face or the intent to pass a feesimple will be favored

WasteIs always an issue when there is a remainder

Affirmative/Voluntary Present interest (owner) does voluntary acts that significantly

decreases the value of the property

Is liable to remainder man for voluntary waste

Permissive

Present interest does not do anything to protect the value of theproperty


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Allows property to deteriorate (inaction)

Can be non- payment of property tax, mortgage, relatedexpenses necessary to preserve the estate for the futureinterest holder

AbsoluteOnly limitation is the estate that defines it

Defeasible EstatesCan apply to Fee Simple and Life EstatesA condition prematurely ends this type of estate

Ex. O conveys to A and her heirs, so long as use is residential

Questions to Asko Who holds the future interest?

Transferor of the interest in land OR a third partyGrantor/Transferor retains the future interest then it is only 2types of estates

Determinable estate Fee simple subject to a condition subsequent

Future interest is a possibility of reverter in thetransferor/grantor

o What words are used to create the defeasible interest?

Words of time or duration (Fee simple determinable)o So long as, until, during, while

Words of condition (Fee simple subject to a conditionsubsequent)

o But if, provided that, however, on condition that

FeeSimpleDeterminable Expires automaticallywhen a stated event happens or

condition ceases to be met

Ex. O conveys to A, so long as A uses property for ahospital

Reverts back to O when land is no longer used as a hospital(determining event)

Always a future interesto Automatically reverts back to grantor or successor

in interest if the condition is broken

Estate is created using Words of Time

So long as, until, while, during

Subject to a Condition SubsequentDoes NOT automatically terminate the interest


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Grantor has a reversion as a right of entry

Must take additional legal steps to take the property back

Ex. O conveys to A on condition that A use property for ahospital

Estate is created using Words of Condition or Event

But if, provided that, however, on conditionthat

Types of Reversion

Possibility of Reverter

Determinable Estate

Right of Entry Estate subject to a condition subsequent

Mahrenholz v. County Board of School Trustees (208)

When unclear courts will favor a fee simple subject to a conditionsubsequent

o There is no automatic forfeiture of property

o Does not preclude owner from taking legal action to retain

property

Fee Simple Subject to Executory Limitation

Automatically expires when the condition is met

Ex. O conveys to A, so long as A uses for a hospital; thento B

Third party (B) does not have to do anything to get the property;is automatic

Automatic like Fee Simple Determinable

Right to Possession to a transferee, unlike Fee SimpleDeterminable

Equitable Estateo Created through a trust or given for the benefit of another

o Trustee has legal title

o Beneficiary has equitable title

O conveys Blackacre to A in trust for life, then to T

A has legal title

T has an equitable estateLegal Estate

Estate created through a deed or will

Restraint on Alienation Courts voids complete restraints on alienation

Will strike the portion of the grant that is complete restriction

Grantee will get whatever is left over


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Future Interests

Future Interests2 types

Can only be created by a grant (in themselves or someone else) or

will

Future Interest in Transferor

Reversion

Transferor, Grantor, or testator conveys estate less thanestate/interest that he possessed

No 3rd party to which estate will pass to

This is by operation of law

Ex. O transfers to A life estate

O has a fee simple absolute, and has transferred a life estatewhich is lesser than the fee simple. Therefore, by operation of

law, when As life estate ends, and since there is no 3rdparty,by operation of law, the property reverts back to O

Possibility of Reverter

When present interest is a fee simple determinable

Future interest is always a possibility of reverter in transferor

Language used are words of time: so long as, until, during,while

Present interest is automatically terminated once condition is nolonger met

Once interest is terminated and present interest continues tooccupy, then present interest is adversely possessing

Right of Entry

When present interest is a fee simple subject to aconditionsubsequent

The future interest in the transferor is always a right of entry


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Language used to create are conditional: but if, providedthat, however, on conditional that

Transferor retains a right to re-enter

Does not automatically terminate the present estate

Transferor must take additional action to re-claim the property

If present interest is still possessing property, adverse

possession does not start until transferor takes additional stepsto repossess the property

Future Interests in TransfereesFuture interest in someone other than Grantor

Remainder (4 types)

Created in 3rd

party that is capable of becoming a possessory interest uponnatural termination of the present estate

Vested

Created in a living, ascertainable person (must know who personis)

Cannot be subject to any condition precedentother thannatural termination of prior possessory estate (can be aconditional subsequent)

Condition Precedent the future interest must MEET acondition to GET the property

Condition Subject the future interest must MEET the

condition to KEEP the property

Indefeasible (must still meet criteria for vested )

Hallmark is itsAbsolute Certainty

Know that the future interest is certain to becomepossessory upon termination of the prior estate (becauseprior interest will certainly terminate)

Subject to Divestment (must still meet criteria for vested)

Subject to a condition subsequent

Must meet condition to KEEP the property

Interest will become possessory , but If condition isbroken, his interest is terminated

Subject to Openo Remainder created in a Class of persons

o Subject to open because class can expand or decrease

prior to present interest expiringo If B is alive, B can always have more children


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o Becomes indefeasibly vested remainder (changes once

class closes)o Once B dies (B can no longer have children)

o At least one person of the class must be

ascertainableThere must not be a condition precedent

Contingent

Subject to a condition precedent

Must meet the condition to GET the property

Ex. O to A for life; then to B for life, then to C

B must be alive to take the interest (B could die before A)

This is a condition precedentThis example, as far as Bs interest is correct as avestedremainder subject to divestment; for C it is acontingent remainder

Executory Interest (RAP does not apply)

Any interest that is not a Remainder

Is tied to a condition precedent

When condition is met it will then cut off the prior estate

Distinction between 2 type of interests hinges on ID of the personwhos estate is being cut off or divested

Cuts short the prior estateSpringing

Transferorsestate is cut short

ShiftingTransferees estate is cut short

Shifting

Present Estate | Future InterestO conveys A and heirs | but if C returnsfrom France then to C and Cs heirs

A is the transferee (shifting interest) because C can cut short As estate

C interest is a contingent remainder (has a condition precedent) Only way C can take is to cut off a prior interest

Springing

Present Estate | Future Interest


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O conveys A and heirs | if C returns fromFrance

Retains property UNTIL C returns from France

When C fulfills the condition, he takes the property cutting short Os interest

C cuts short Os estate

Contingent Executory Interest (RAP applies)o Can executory interest holders actions cut off the prior estate

o Is either Shifting or Springing

o When executory interest can do nothing to cut estate short is another

persono Ex. O to A as long as used for residential purposes, then to C

o C can do nothing but sit and wait

Must then ascertain if it is shifting or springing

Restriction of Future Interests

Must ascertain what type of future interest is

Destructibility of Contingent Remainderso Applies onlyto legalContingent Remainders

Legal - Created by a deed or will

Is a wait and see approach

If estate fails to vest, the contingent remainder is void

O conveys to A for life, then to B if B reaches 21, B = 10

Bs interest is struck if he is NOT 21 when As estate ends

B = 22o Can remove the contingency b/c it was met before

As deatho Does not apply to Vested Remainders or Executory Interestso Not to an Equitable Contingent Remainders

Created by trust document

If contingent remainder fails to vest at the natural termination of theprior estate, the contingent remainder is extinguished

o Ex. O conveys to A for life, then B if he reaches 21

o B is 6 years at As death; Bs contingent remainder fails to vest

at the natural termination of As estate; must strike through theremainder

o Property reverts back to O (because he had a FSA and only gave

A a life estate)


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Rule in Shelleys Caseo One instrument

o Creates a life estate (or fee tail) in land in A

o And Creates a remainder in fee simple in As heirs or (heirs of As

body)o

Life Estate and remainder are both legal or both equitableo Remainder becomes a fee simple (or fee tail)

You must strike through the LE, and there is now a FS in A.o Court says it is the same principle

o Ex. O conveys to A for Life, then to As heirs

Strike through to A for life, then to As

Still the same as O to A and her heirso Only applies if there is NO intervening estate

Ex. O conveys to A for life, then to B for life, then to As heirs

Bs estate intervenes, so Shelleys Case does not apply

Doctrine of Worthier Titleo When owner conveys to one party

o By the same instrument (same grant)o Conveys Remainder or Executory Interest in the owners heirs

o Then Owner retains the reversion and not the heirs

Ex. O conveys to A for life, then to Os heirs

Creates a reversion in O if O is alive at the natural termination ofthe estate

Do not know your heirs until your death; at your death goes toheirs

Doctrine of Merger

O conveys to A for life, then to B

The two estates merge and the lesser estate is extinguished

Since B has contingent remainder in Fee Simple Absolute, As lesser lifeestate is merged into Bs larger estate

A conveys to B

Can be a wait and see approach or may be determined at the grant


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Rule Against Perpetuities

Rule Against Perpetuities

No interest is good

Unless it must vest; if at all

Not later than 21 years after some life in being

At the creation of the interest

Rule applies to Legal or Equitable Documents (Will or Trust)

5 steps to evaluating RAP1). Determine if rule applies to the future interest

Rule only applies to 3 type of future interests:

Contingent Remainderso O conveys to A for life, then to B

Vested Remainders Subject to Openo Special Rule: All or Nothingo O conveys to A for life, then to As children

B, C, D (vested remainder subject to open)

Every interest in class must comply to RAP


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If one interest does not comply then itinvalidates everyinterest

Interest vests when the class closes

Class closes when A dies (cannot have anymore children)

Contingent Executory Interest

o Can still be shifting or springingo O conveys to A and heirs, but if A cuts down a tree,

then to B

Contingent executor remainderbecause B cannot do anything to cutoff the estate, B just sits there

O conveys to A and heirs, but if B returnsfrom France, to B

B cuts off As estate (must dosomething). This is a normalexecutory estate

Does not apply to future interests in atransferor

Does not apply to present interests2). If rule applies, when does perpetuities begin (life in being + 21

years)

Begins when instrument that creates the interestbecomes legally effective perpetuities period begins

Will becomes effective at DEATH of

A trust becomes effective only when DELIVERED tograntee

o Becomes effective when it becomes irrevocable

(by express terms or death of person

delivering the trust) Cannot be changed at this point

3). What must happen (what contingency must be met) for theinterest to vest or not vest?

What conditions must be met to vest?

When does it change from a contingent remainder to avested remainder (right to possession, not necessarilyimmediate)

When is the contingent remainder met

What must happen for it to forever fail or does it fail to bemet?

Ex. O conveys to A for Life, then to As first child to reach 30

2 conditions precedent: A must have children and thechild must reach 30

Interest vests when first child reaches 30 (what musthappen to vest)

Interest fails and never vest when A dies without children(what must happen to not vest)


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Cannot apply Doctrine of Destructibility (have to wait andsee if A has children)

o On exam just explain the rule that appliesO conveys to A and heirs, but if A cuts down a treethen to B and heirs1) If A cuts down trees, B interests vests

2). If A does NOT cut down any trees before his death,then Bs interest NEVER vestsMust figure out if either of those things will

happen

4). Determine each relevant life that may invalidate the interest

Must test each life

If one life invalidates the interest, then the entire interest isinvalidated

Technically can use any life, practically should use only livesthat affect vesting of the interest

Concurrent Ownership

Tenancy in Common[Characteristics]

o Simplest most common form of concurrent ownership

o Undivided fractional share in the present interest (parcel of land)

Separate BUT undivided interest in the WHOLE

Entitled to 100% possession of the property regardless oftheir fractional share of the interest


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o Each entitled to simultaneous possession and enjoyment of WHOLE

parcel

Unity of Possession is the Hallmark of TICo Can acquire interest at different times in different instruments

May be conveyed by deed or willo No right of survivorship

A & B are TIC; A dies; As TIC interest will pass to his devisees orheirs, NOT to B

[Creation ]o Any conveyance that devises to two (2) or more unmarriedpersons

Modern (Majority) Law Any transfer created in 2 or more unmarried persons is

presumed that a tenancy in common is created unlesslanguage is clear that a joint tenancy was meant to becreated

Common (Minority) Law

Under common law a joint tenancy is presumed unlesslanguage is clear that tenancy in common is beingcreated

Must use the words Joint Tenancy with Right ofSurvivorship

Ex. To A and B, jointlyThis is a tenancy in Common; language is not express

enough to be JTIntestate Succession

Arises (be created) involuntarilyEx.

o D has FSA; dies intestate and leaves 3 children

(E,F,G) as surviving relativeso Each child has 1/3 interest as TIC with each other

Other Situationso TIC is created when a joint tenancy is severed

o TIC is created when a divorce ends a Tenancy by

the Entirety

[Transferability]

Either party has right to sell, mortgage, lease or transfer interestwithout consent of the other co-tenants

Transfer of interest DOES NOT terminate the tenancy in common A Co-tenant in common may devise or allow his interest to

descend by intestate succession

Joint Tenancy With Right of Survivorship[Characteristics]

Each tenant has an undivided share in the entire parcel

Right to 100% simultaneous possession of the entire parcel


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Each party is free to transfer the interest

Right of Survivorship (Unique to Joint Survivorship) Hallmarkof JT

When one co-tenant dies, his interest is transferred (merges) tothe living party by operation of law

Exceptions If both owners die simultaneously

o Estates is severed and becomes a Tenancy in Common

(with NO right of survivorship)o C & D have interest that passes to heirs or devisees

Exceptions - Public Policy If one co-owner causes the death of the other, the Joint Tenancy

is severed.Ex.C murders D (Estate now becomes a TIC)

C gets interest as TIC, Ds interest passes to his

heirs or devisees

[Creation of Joint Tenancy]Common Law

Four Unities - Creation of a Right of SurvivorshipDefault setting at common law if all four unities are presentMust meet all four conditions OR a Tenancy in Common is

created (by law)

Unity of TimeInterest must be acquired at the exact same time

Unity of Title

Interest must be acquired by the same instrument (will, deed,or joint AP,etc)

Unity of Interest

Each interest must be identical fractional shareo No different fractional shares

Unity of Possession

Each interest must have the same right of possession

Cannot be a restriction on use

Language used to Create (sufficient to create)

To E and F as Joint Tenants

To E and F as Joint Tenants with Right of Survivorship

Ex. To A and B, jointly

This is a Tenancy in Common; language is not expressenough to be JT

[Transferability]o Inalienable


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o Right of survivorship ends a joint tenants interest

Interest cannot be devised or descend by intestatesuccession

Severance of Joint Tenancy [Generally]

Can sever without consent (sometime knowledge) of other co-

tenant Joint tenant conveys interest to a 3rd person

Must sever one of the unities

Transfer/conveyance severs unities of time and title

Becomes a tenancy in common with the other owners atthis point

Can only be severed during lifetime

Cannot will the interest

No longer a Right of Survivorship

Can transfer title to yourself using a strawman

Strawman is a disinterested 3rd party who re-conveyed

the land back to the grantee This severs unity of time and of title

Converts to a tenancy in commonModern (Majority) Law

o Can sever the JT Ten by transferring to yourself

Do not need a straw person nowo Basically severs unity of time and title

o Have now acquired your interest at a different time and by a

different instrument

Problemo A,B,C (joint tenants)o C conveys interest to D (D is now a TIC with A & B)

o A & B are still JT Tenants

o If A dies, her share is merged to B (survivorship), but B is

a TIC with D

Tenancy by the Entirety[Characteristics]Common law

Abolished in most states

Under this law, H &W could not hold title as TIC or JT; wife

had no legal existence as a person Any conveyance to a husband and wife was deemed to be a

Tenancy by the Entirety

Title vested To the husband/wife as a collective unit

No respective/separate shares

Still need the four unities + MARRIAGE

Unity of Time, Title, Possession, and InterestRight of Survivorship

Can be terminated


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[Creation]

Recognized in about half of the states

Still follow common law presumption that marriagecreates a TBE

In other jurisdictions, intent to create must be clearly expressed

Most still require 5 unities: time, title, possession, interest and

marriageException:

One spouse can create a tenancy by entirety by directconveyance to both spouses even if unities of time andtitle are absentEx. W has FSA; can convey as :To H&W as tenants byentirety

[Transferability]

Couple as a unit owns entire estate

Traditionally, consent of both spouses required to convey estate

Historically, husband can transfer his right of survivorship, rightto lifetime possession, subject to wifes right of survivorship

Married Womens Property Actso Adopted in all common law marital property states

o Eliminated husbands exclusive right of control

o Either spouse has power to manage and control marital

property

Termination/Severance of Tenancy by the Entirety & Right ofSurvivorship

Death of a Spouse

Divorce (Remarriage does not AUTOMATICALLY

restore a TBE; must be a re-conveyance) Mutual agreement to sever - Transferred by spouses

togethero One party cannot break the unities or transfer

o If one spouse murders the other, TBE is severed

Murderer cannot enforce right of survivorship

Must look at where severances occur

2). T devises to A and B as joint tenants for their joint lives, remainder to thesurvivor

o Life Estate Per Autrie Vie (present estate)o This is a Tenancy in Common, they both have each have life estates in

the othero No survivorship mechanism in a Life Estate

o Only thing that gives a survivorship is the future estate conveyed

o Future interest is the remainder in the survivor

Can only use present interest to determine the interest


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Majority Rule

Cotenant is normally entitled to exclusive use of co-tenancyproperty w/o duty to compensate other cotenants

One cotenant does not owe rent to another cotenant

Each tenant has exclusive right to the property

One cotenant cannot maintain an AP claim against theother cotenant

Exception (to payment of rent to cotenants)Principle of Ouster

Occurs when a cotenant in possession refuses the request ofanother cotenant to share possession of the land

Occupying cotenant is liable to other cotenants for rent

Characteristics of Oustero Must make attempt to gain access and be refused

Denied access includes changing locks, usingproperty so that no use can be made of any other

part of propertyo Must show intent to exclude other cotenants

o If one tenant simply demands that cotenant in possession

pay rent, ouster has not occurred (must be demandingpossession not rent)

Adverse Possession

If Ouster occurs, cotenant in possession may begin start an APclaim against the cotenant not in possession (combined mustshow acts inconsistent with concurrent ownership)

Statute of Limitations begins to run for AP

Contribution

One cotenant seeks reimbursement from other cotenants for prorata share of expenses that complaining cotenant has paid (if hehas paid more than his pro rata share)

Taxes, mortgage payments, repairs/improvements

Can demand contribution after cotenants refuse to pay their prorata share

Accounting

Co-tenant can solely possess and keep profits generated fromSOLE possession

Once leased/rented to 3rd party he must account forprofits and share with co-tenants

Rents Received and Profits for use of Property

Each cotenant is entitled to his/her prorata share of rentsreceived from a 3rd party for use of the land

Co tenant collecting rent payments may offset costsassociated with generating/collecting rent


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Include amount expended on taxes, interest,mortgage principle, insurance

Taxes, Mortgage paymentsGeneral Rule

All cotenants are obligated to pay their proportionateshare of mortgage, tax and other payments that could give riseto a lien if unpaid

If one cotenant pay more than pro rata share, he mayrecover through a contribution action

Special RuleCotenant in Sole Possession

Cannot recover for payments unless exceed reasonablerental value of the property

Repairs, Improvements, Maintenance

Majority RuleCotenant who pays for repairs/improvements is not entitled tocontribution from other cotenants absent a prior agreement

RationaleCotenants may disagree over necessity, character, extent and

cost of repairsException to General Rule

WasteCo tenant cannot do anything on the property that constitutes

waste

Partition

Settles disagreements between cotenantsCan sell interest or institute partition action

Partition in Kind Actual physical partition of the property

Distributed according to interest

Favored over Partition by Sale

Partition by Sale

Easier and simpler than Partition in Kind

Done when partition in kind is impracticable

Oweltyo Payment by other cotenants to the other cotenant equalize value of

what is being partitioned


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Marital Property Interests

Common Lawo Husband and Wife considered a unit

o Not divisible at common law

o Existence of Wife was suspended during marriage

o Lost legal identity

Did not have legal right as a person to control her own property

Once married became property of husband

Viewed as inferior morally, mentally Needed husband to provide her with maintenance

Rights During Marriage

Husband obtained Life Estate if wife came into marriage withproperty

Property acquired during marriage became the husbands

Wife only entitled to keep personal property (clothing, jewelry)

Husband had sole possession of property without wifes consent

Had sole right to profits received from property during marriageor lifetime of both spouses

Wife could regain control over land only upon divorce orspouses death

Rights Upon Divorce

When divorce occurred was divided according to who held titleto property

Wife only had title to any property that was not sold beforemarriage


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Wife only entitled to alimony or support onlyifnot cause of thedivorce

Blameless wife was entitled to alimony

Rights Upon Death

When husband died only children could inherit; wife could

not Wife entitled to Dower

Entitled to 1/3 husbands qualifying realproperty

Kept wife from being disinherited

Only entitled if she had children from themarriage

Without Wifes consent, Husband could not transfer all ofhis interest nor could creditors seize to satisfy his debts

o Any transfer was subject to 1/3 interest of wife

(dower)

Wife could only use and enjoy the 1/3 during her lifetimeo Could not dispose of it through will

Curtesy

If Wife died, then property passed to her estateo Husband had LE; entitled to receive curtesy

Gave him life estate interest in wifesproperty

Would be disposed of at his death throughwifes estate

Only if marriage produced issue capable ofinheriting wifes lands

Traditional Viewo Property was retained by spouse who acquired it

o Husband still got everything in the Divorce

Modern ViewsEquitable Distribution

Followed by majority of states

Property acquired during marriage is equitably (fairly)distributed when divorce

Other than property acquired by gift

Property acquired prior to marriage remained separateproperties

Community Property Approach

Minority view 8 states (California)

All property acquired during marriage is community property

Will be divided equally

To avail oneself of this principle; must have a ceremonialmarriage

No common law marriage, cohabitation


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Sawado v. EndoIssue: Whether a TBE was subject to levy when one tenant died

Deed is effective when deliveredNOT when recordedo Married Womens Property Acts abrogated husbands dominance over

marital estateHawaii followed MWPA majority position

Interest of the husband or wife in the estate by the entirety is notsubject to claims of his/her individual creditors during joint live s of thespousesCannot lien up the property

In re Marriage of Grahamo Issue: What is marital property? Is education subject to division?

o Wife supported husband through 2 degrees

o Husband got well-paying job and left he wife

o Wife asked for half of his degrees

o Trial Court found that education obtained by one spouse during

marriage was jointly-owned property

o Court of Appeals reversed Education itself is not property

Said does not have attributes of property

Not divisible, devisable, inheritable, saleable, transferable, etc.o Wife not asking for alimony or value received from the degree, but the

degree itself

Elkus v. ElkusIssue is whether her increased earning potential is subject to marital

distribution

Landlord/Tenant

Leasehold Estates/InterestsTenants Rights

Right to immediate possession & occupy that which he is leasing For fixed period of time

Right to use and enjoyment

Right to enjoy profits from the land (such as a Life Tenant)

Cannot commit waste

Right to Exclude others

Includes the LandlordLicenses


37/47

Do not enjoy all the rights of leasehold

Right to use

All licenses are revocable unless stated otherwise

Can be evictedEx:

o A buys a ticket to see a play

o Renting a hotel roomo Renting room in an extended stay hotel

Leaseso First point of Attack for resolving a conflict

o Leases are governed by Contract Law vs. Property Law (at Common

Law)o If silent on a particular matter must look at statutes

o If statutes are silent then must go to case law

Statute of Fraudso Provides that any contract (including lease) for more than term of oneyear must be in writingo Ifmore than one year without a written document, is not valid

o Oral agreements undera year do not have to be in writingo A month to month that continues for more than one year does not

have to be in writingo Unless agreement at start that month-to-month it will be more

than one year

Compliance with Statute

Must be In writing

Must have description of property subject to the lease

Must know the term of lease

Must be signedo Some states require signing by both parties (practically)

o Some require signing by party against whom you seek to

enforce the leaseo If landlord is seeking enforcement against tenant, tenant

must have signedo If tenant is seeking to enforce against landlord, landlord

must have signedo Does not make contract void, just means that you have

agreed to terms (basically a one-way contract)

Court Determinations of a leasehold or license

Looks at how much control person has over the area

Looks at Occupation of the area

Looks at language in the contract that defines the relationship

Non-Freehold EstatesTerm of Years


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Key Characteristic

Will continue for a designated period of time Must be fixed in advance (At start of tenancy)

Must able to compute duration from language (if no datesspecified)

Must know definitely when it will end

Must have specific start and end date Can be for months not necessarily years

Termination

Automatically expires on its end date (no notice required)o Not renewed unless language in

contract/agreement stateso If tenant remains is now a holdover tenant

Issues to consider: Trespass, AdversePossession

Clock for AP begins to tick

Landlord must take steps to evict holdover

tenant Landlord has 2 options:

Treat as Trespasser

Hold as new tenant to new leaseEx.

Commercial LeasesSome Residential Leases

Periodic Tenancy

Initial fixed period of time

May be month-to-month (residential), year-to-year

Terminates at end of each period with automatic renewal

Continues for equal periods of timeMay arise by implication

Based on conduct, absent an express agreemento Taking possession; paying rent

Termination

Notice is necessary (by landlord OR tenant)

Governed by Statute todayo 30 or 60 day notice must be given by either party

to terminate a periodic tenancy (oral or written)o If not in lease, must look to statute

Continues until tenant or landlord terminates through

notice

Tenancy- At- Willo Generally has no fixed duration

o Endures as long as tenant or landlord desires (at-will) (Common

Law)o May not be a lease to look at, must look at language that

created agreement


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40/47

Once tenant makes decision astrespasser he is stuck with the option

If landlord decides to hold as a newtenant he cannot later evict before theterm is expired

Garner v. Gerrish (Tenancy -at -Will )o Gerrish felt he had a Life Estate (freehold estate)

o Gerrish rented a house from Donovan and Donovan dies

o Executor evicted Gerrish

No end date (Not Term of Years)

No indication of renewal (No periodic tenancy)

By Default is a Tenancy at Will

Issue: Whether should be construed that only tenant canterminate or is there a reciprocal right for landlord to terminate

If Landlord has sole right to terminate a tenancy at will, bylaw then tenant also has reciprocal right to terminate(even though not explicitly stated)

Court said there was no symbolic delivery of land (liveryof seisin)

o Delivery of dirt, twig something from the land

o No longer necessary to do this to create a freehold

estateo Court said was a determinable estate (for so long

as)o Contract gave him right to live there so long as he

chose and paid rent

Crechale & Polles, Inc. v. Smith (Tenancy at Sufferance)o Accepted rent payment after trespasser/eviction/expiration of

leaseo Showed intent that he was creating a new lease

o Court said actions contradicted eviction language (get out)

o Once choosing one of the options as to how to treat holdover

tenant, he is held to that option

Selection of Tenants at Common Lawo Landlord can select anyone for any reason

o Could also refuse to rent to anyone for any reason

Fair Housing Acto Landlords cannot now discriminate on basis of sex, religion, race,

handicap, natural origin, familial statuso Cannot discriminate against a protected class (children are not a

protected class!)o Generally only apply to single family homes sold without assistance of

a real estate broker or agent (can discriminate)


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o Owner occupied with four or less units you cannot discriminate

Delivery of Possession (Landlord must deliver to Tenant)

Majority View (English)o Must deliver legal possession and actualpossession

If someone else is legally in possession of space or has legalright to possession, then landlord has not delivered to you legalpossession

Common LawMinority View (American View)

Under minority view, only have to deliver legalpossession

Not required to deliver actualpossession

If a holdover tenant is there, then YOU, not landlord has toevict the holdover tenant

*Tenant is still obligated to pay rent and perform his obligations under the lease*

Landlord/Tenant Transfer of Interests

AssignmentDefinition

Transfer of tenants existing lease to a 3rd party

Transfers his entire interest and leaves nothing for himselfTwo Privities Created

Privity of ContractPrivity of Estate

SubleasingDefinition

Wholly new lease between a tenant and a 3rd party

Reserves a portion of interest for himself with a right of re-entry/reversion

Ex. Transfers a term of years of 9 years and 364 days andreserves 1 day (less than the 10 years of his original

lease)Majority Rule - All or Nothing Test

o If a right of re-entry or reversion exists then is a sublease

o If transfers entire interest than is an assignment

Privity of Contracto Contract Law concept

o Assignment creates Privity of Contract


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o Once gives entire interest in estate, the assignment breaks

privity of Estateo B assigns to C (privity of K)

o If C fails to pay rent, B has options

B can sue; still in privity of contract

Unless B has an express release from A; he is still

obligated to Ao Even if A consents to assignment, then B is still

obligated to A

Privity of EstateA leases to B (leases portion of interest; not giving entire interest)A can sue C for any provision under the contract that touch and concern

the land (rent)

Express Release (novation)

Assignment Assumptiono Expressly assumed all the obligations

o B is still obligated to A unless A expressly releases

Multiple Assignmentso C assigns to D (gives entire interest); D fails to pay rent

o Any Privity of Estate C had with A and B moves to D

o A can sue B under Privity of K

o A can sue D under Privity of Estate

o A cannot sue C (no relationship left since C assigned his interest to D)

No relationship between B and D

B can sue Do C can sue D

Subleases ScenarioPrivity of E Privity of EPrivity of K Privity of K (Lease) (Sublease)

A--------------------------------------B----------------------------------C

o A leases to B (Privity of Estate & Privity of Contract)

o B subleases to C (whole new lease between B & C; B is Cs landlord;

new landlord/tenant rel)

Both Privity of Estate & Privity of Contract (because newrelationship was created)

o If C does not pay rent:

B still on hook to A for rent

A cannot sue C directly for failure to pay rento If C pays B and B is not paying A; C is not in contract in A

A cannot evict C; A must evict B

When main lease terminated so is sublease


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Any tenant under B is evicted

C Assigns to D:

Privity of Estate is now between B and D (severed between C & B)

Only privity of contract between C & D

B now in Privity of Estate and Privity of Contract with D; then D=no rent

Assignment Provisions Right to Assign or Sublease

o Tenant is free to assign, sublease or transfer absent an agreement to

the contrarySole Discretion Clause

o Can be at Landlords sole discretion

Landlord can refuse assign/sublease for any reason or no reasonat all

Cannot refuse on basis of race, gender or other protectedclass

o Silent Consent Clause - Lease is silent

May assign without Landlords consent

In terms of transferring interesto Lease cannot be assigned or sublet (express)

Construed very narrowly and literally

Against alienation concept

Court allows to certain extent (will strictly construe expressprovisions)

Does not prevent from subleasing, mortgaging, assigningunless EXPRESS in the lease

o Tenant can assign; Landlords assignment cannot beunreasonably withheld

Must be a reasonable explanation for withholding consent

Must be a commercially reasonable explanation (question offact)

Creditworthiness

Not using premises properly, appropriatelyLeasing without consent

No standard tied to it

When this is so courts impose a commercially reasonablestandard

Commercial LeaseWill imply a reasonable standard

Residential LeaseCourt is split as to sole discretion standard or reasonable

standardMore reason to deny under residential


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Rights of Tenant and Obligations of Landlord

Common Law Foundation

Is there a leaseo Must always look to lease for any Landlord/Tenant relationship

Must ascertain whether commercial or residential lease

What common law principles apply regarding L/T issues

What modern law principles apply regarding L/T issues

Duty of Repair No Leaseo If no lease (lease is silent)

Common Law principle

Duty to repair is on Tenant Landlord had not dutyo Caveat Emptor (Lessee beware)

o Tenant has affirmative duty to fix/cannot refuse to fix (principle

of waste commercial lease) Minor repairs

Modern LawDistinction between commercial and residential lease

Commercial Lease

Tenant has duty to repair

May include duty to rebuild

Looks factorsResidential LeaseImplied Warranty of Habitability&Implied Covenant of Quiet EnjoymentProtected by these 2 principles

o Only minor repairs

o Only duty to tenant is duty to make minor repairs because

of Implied Warranty and Covenant

Lease assigns obligation/duty to tenantCommon Law

oTenant must repair Lease expressly provides

oNo difference between commercial lease and residential lease

o If premises totally destroyed tenant had obligation to rebuild

Does not matter who is at faultCommercial Lease

Tenant continues to have obligation to repair which includes

obligation to rebuild Courts look at these factors whether to apply that obligation:

Cost of repair in relation to rent being paido If exceeds rental value, court may not order tenant not to

rebuildo Length of lease

o Look at parties intent

Residential Lease


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oDuty to repair

oOnly duty to make minor repairs; not duty to rebuild

Lease assigns obligation/duty to landlordCommon Law

o No distinction between commercial lease or residential lease

o

Landlord had obligation to repair Of no consequence to tenant; if Landlord refused to repair

Each provision was independent of each other

Only right is to sue landlord and seek damages; could notstop paying rent or terminate lease even if premises totallydestroyed

Modern Lawo If landlord refuses to meet obligations under lease

No distinction between commercial or residential lease

All lease provisions considered dependent on each other

If landlord refuses one provision, tenant can refuseanother (L does not repair; T can refuse rent)

Tenant has 2 options:Constructive Eviction and Implied Warranty of

Habitability

Constructive Eviction (most widely used in commercial leases)(Applicable to Covenant of Quiet Enjoyment, not Warranty of Habitability)

Must meet these 2 elements

Only situation where tenant can exercise these option when landlordrefuses to meet obligations under lease (express or implied)

Substantially interferes with use and quiet enjoyment

Tenants OptionsCan terminate and moveStop paying rentStay and seek damages

Measured by fair rental value when expenses exceed rent andother expense

Must take 3 stepso Must give landlord notice

o Must allow landlord reasonable time to cure the defect

(depends on defect)o If not cured after 1 & 2, must move out (within reasonable

time to sue for damages)

Include moving expenses, cost to rent newpremises (including commissions that need to be paid)

Offset damages

Occurs when landlord wrongful conduct substantially interfereswith tenants use and enjoyment of property

There must be some duty or obligation on landlord

If there is none, then no constructive eviction


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Standards for Constructive Evictiono What is the wrongful conduct of Landlord?

Can be affirmative act that interferes

Ex. Changed locks and tenant not given keys

Landlord may fail to do something legally obligated to doo Is Landlord responsible for acts of 3rdparties?

Generally not responsible acts of 3rd parties thatinterferes substantially with tenants use andenjoyment

Exception

Landlord must have the legal right to control 3rd partiesconduct

Substantial interferenceMust be of a substantial interference that a reasonable person wouldconclude makes property uninhabitable

o Interference does not have to be permanent; can be temporary;

does not have to be complete

No heat in Winter; toilet does not work but rest ofpremises is usable

May not be an affirmative obligation on landlord butWarranty of Habitability gives him that obligation (whetherexpressly stated or not)

If Tenant is aware of some conditions that ordinarily is aSI, may have waived his right to constructive eviction

Must exercise right to say repair before I move in

Implied Warranty of Habitability (all residential leases contain) Landlord must deliver the premises in habitable condition and must be

maintained throughout the lease If landlord violates this warranty (implied in every lease)

Even if affirmative on tenant for minor repairso Warranty of Habitability cannot be waived

When landlord breaches the duty, tenant can:o Make repairs (while still in premises) & Offset rent

o Terminate and sue for damages

o Stay in possession and sue for damages

o Remain and withhold rent

Factors that constitute a breach

Broken windows, leaky roofs, defective locks, lead-based paint,broken toilets, pipes, plumbing, defective wiring, lack of hot water,mold

Must give landlord noticeoNotice must be specific enough to inform landlord of defect

o Landlord must be given reasonable time to cure defect

o If tenant does not give notice or give reasonable opportunity to

cure:


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Landlord Responsibilities for Tenant InjuriesModern Law

Liable under general principles of Tort Law (negligence theory)

Self- Help

Self-HelpCommon Law Commercial Lease

Landlord may exercise self-help

Landlord must be legally entitled to possessiono Tenant breaches lease and it contains a re-entry

clause

Landlords self-help method must be peaceful

If a potential breach of peace, law will not accept self-help

Tenant

If he has not relinquished his possession (abandonment),no self-help method is peaceful

o Must look at the intent

Law usually frowns on self-help methods

Mitigation (Sommer v. Kreidel)Common Law (decided under principles of property law)

Mitigation is not required

Landlord can sit for entire lease and sue tenant for entire leaseModern Law (decided under principles of contract law)

Landlord cannot sit by idly and not lease the premises (build updamages)

Must mitigate damagesConstructive Eviction

o Substantially interferes with use and enjoyment

o Use constitutes what tenant would use the property for

Property I Outline (2) Fall 2009

Documents

Transcript of Property I Outline (2) Fall 2009