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Property Outline

A. Co-Ownership

Tenants in Common (presumed unless specific language otherwise or husband and wife)

Joint Tenancy (4 unities-time, title, interest , possession

Tenancy by entirety

Shares Can be uneven Trad. Even (can be uneven)

Must be uneven

Survivorship No Yes YesPartition Yes Yes No (4 ways out

1.death 2. Divorce 3. Mutual creditor 4. Mutual agreement

If ambiguous languageo Granting clause is given more weight than language that describes type of deed unless

granting clause is ambiguous1. Germaine v Delaine-though conveyance looked like TIC b/c it said survivor gets in

fee simple (survivorship) it was construed as JT2. Kipp v Chips- though conveyance said JT, b/c it said then to heirs forever this made it

ambiguous and interest clear enough to make TIC

a. Tenants in Common-separate but undivided interest, each is descendible and can be passed through a will

b. Joint Tenants- Must have 4 unities-

o Four “unities” essential to a joint tenancy (1) Time – JT must receive their interests at same time (2) Title – all joint tenants must acquire title by the same

instrument or by a joint adverse possession; cannot arise by intestate succession or other act of law

(3) Interests (equal shares) – each JT must have the identical interest in the property

i. Same share of the undivided wholeii. Each JT must have same durational estate

(4) Possession – at creation each JT must have the right to possession of the whole property; however, one joint tenant can voluntarily give exclusive possession to the other joint tenant; also essential to tenancy in common

Can only partition by judicial partition or by selling and breaking a unity

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If secret inter vivos deed that grantee knows about before death→good but if grantee finds out after death right of survivorship prevails

Popular especially among husband+wife b/c if one JT dies property is passed and probate of that property is avoided

Where promise to convey at future date split- Common Law- JT continues even if one dies before conveyance so

only one gets proceeds Other- TIC is created when contract is made so if one dies before

conveyance→ estate gets proceedsc. Tenancy by the entirety-Have to be Husband+Wife +4 unities

o Not recognized in community property stateso IRS only one that can reach TBEo Feds can take property interest of owners engaged in illegal

activity, in TBE only take illegal owners survivorship interest so innocent not hurt.

o Deed or mortgage by only one is ineffective

Severance of Joint Tenancy

BY CONVEYANCE

1. Riddle v Harmon-P married and conveyed her JT to herself rather than common law way through straw man as TIC so can convey to daughter at death rather than to survivor if she died first.

o Can unilaterally convey interest to self don’t need straw man, just makes it more difficult

Simultaneous death act- 120 hours w/ in each other

BY MORTGAGE

2. Harms v Sparague- P+D JT, D took out mortgage on his part of JT→died, P took control and wants to quiet mortgage.

o Doesn’t sever 4 unities so title not severed so mortgage dies with mortgagers interest in property.

o Title Theory- pass title when mortgage-not here v Lien theory-just charge on property not conveyance so JT survive- here

Lien Theory (majority)-If bought at foreclosure b/c lien first before died→ P plus buyer would be TIC 4 unities would be destroyed

Title Theory-Minority of states hold mortgage is transfer of title so would sever 4 unities when take out

a. Joint Tenancy Bank Account

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o True joint tenancy account – Both have access to their half and survivorship rights

I. Banks prefer joint tenancy accounts; has little risko Payable-on-death account – It’s mine until I die and then it is yours

I. Not permitted in some jurisdictions because it viewed as essentially a will (but with no witnesses, not signed, etc)

II. Initially much resistance, permissible in many jurisdictions nowo Convenience account - O makes a deposit into O & A’s joint account but

intend that A only have the power to draw on the account to pay O’s bills and not for A to have survivorship rights (similar to power of attorney)

Majority of jurisdictions hold the surviving joint tenant take the sum remaining on deposit in a joint account, unless there is clear and convincing evidence that a convenience account was intended; burden of proof placed upon those challenging the joint tenant to prove otherwise

Regarding present rights, the majority of jurisdictions hold that the joint account belongs to the parties in proportion to the net contribution of each party

Relations among concurrent owners

o Both own all, neither can act to prejudice othero Partition if can decide on division (In Kind)if not→equitable partition (By Sale)

available to any JT or TICo Restriction on prohibiting partition good if last for only a reasonable time-not

unreasonable alienation1. Delfino v Vealencias-P+D TIC, D had house+business on land but P owned

99/144 interest. P wanted partition so could develop and D wanted in Kind partition so could stay on land b/c livelihood. T.C. partion by auction sale.

Cts. Favor in kind b/c land can be sentimental and more value to one owner

So in Kind unless party seeking by sale can show partition by sale is 1)in best interest of all parties not just one tenant or 2)impracticable or inequitable in kind- T.C. didn’t recognize that one party derived livelihood from land, so sale is not in best interest and need to see if can practically divide land.

Most courts do sale b/c efficient saves time and effort b/c parties wont agree to division and just want out plus don’t want to divide land too much or becomes less efficient tragedy of anti commons

Sharing benefits ad burden of co-ownership

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1. Spiller v Mackereth- P+D owned building, D didn’t use and P started using the whole thing as a warehouse, D wanted P to vacate half or pay half rental value. Judgment for P

o Absent specific agreement for rent, adverse possession or ouster (majority)- a cotenant in possession is not liable for value of use as long as doesn’t deprive other of use or run SOL for adverse possession-

there was none, D never tried to use, and locks on building could be construed as security measures to protect objects in warehouse and D never requested keys.

Ouster- D did not act as sole owner b/c didn’t stop P from enjoying land b/c P never tried.

o Minority-pay rent based on possession even w/o ouster2. Swartzbaugh v Sampson-P+husband joint tenants, husband entered into a

lease w/ D knowing P didn’t want it and walnut trees were removed to build boxing pavilion. P seeks to cancel lease cant do only can get rent.

o Cannot eject cotenant, can only demand her share of rent collected from 3rd party if paying full but not for profit made by own labor on land

o Neither tenant can act to prejudice other in TIC or JT, lessee risks partition and lessor doesn’t get that land.

P could have went for ouster and get half of what fair rental value for property only if adverse possession has begun or if won’t let P enter from cotenants tenant so would have to pay double rent unless already paying full rent in which case husband would have to pay

o If reduced value of property→ can recover for that, but P didn’t bring that

o P could have moved for partition against D but married so probably don’t want to do that and since built boxing ring could also probably collect for improvement on land

o JT not canceled merely suspended til end of lease(if lessor die→either 1)lease ends (Majority) 2)lease continues til end of lease→ to survivor, some states hold that lease is severance

Recovering cost of Repairs and Improvements

Cotenant can try and recoup losses or benefits in partition action, action for accounting (equitable), action for contribution

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o Rents and profits Has to share rent w/ cotenants but if ouster→FMV

o Taxes, mortgage payments, and other carrying charges Contribution = to value of their share in the property Cotenant paying more than his share receives a credit for the excess payments

in an accounting or partition action EXCEPTION: if the tenant who has paid taxes has been in sole possession of the

property, and the value of the use and enjoyment which he has had equals or exceeds such payments, no action in any form for contribution

o Repairs and improvements Co-tenant may get recovery in separate action only for necessary repairs if give

notice to other tenants or in action for partition or accounting w/o Minority-co-tenant cannot get contribution for necessary repairs

A cotenant has no right to contribution for improvementso General RULE: interests of the improver are to be protected if

his can be accomplished without detriment to the interests of the other cotenants

If land physically partitioned, the improved portion awarded to the improving cotenant, if possible to do without jeopardizing the interest of non improving party as before improvement. If not then payments to improver may be due from noncontributing cotenants in sale ex. Swartzbaugh if moved for partition

Marital Property (TBE)

o Community (8 states)- more accurate representation of what people want-property you bring in is separate and inheritance is separate. Anything earned during marriage is shared

o Common Law (most states)-originally women property now owned by man and subject to creditors, reformed under married womens property acts-now women in control of property and immune from husbands debt and wife in control of all earnings outside of home

1. Sawada v Endo- P got hit by D in car who had no insurance, after D conveyed property to sons. P seeks to set aside conveyance. D property held in TBE by D + Wife.

o Under married womans property acts in TBE is not subject to claims of individual creditors for joint lives of spouses

o Since debt arose after TBE creditors had notice of it so not unfair b/c creditors can insist on having both TBE be subject

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Spendthrift trust protected even against beneficiary creditors but you cannot make one yourself (except in DE and AL)

PP-interest in family solidarity Exception : IRS can always reach TBE, No forfeiture of land if illegal acts and

innocent tenant doesn’t know of activity (Lincoln), if land used in criminal acts→forfeiture of criminals survivorship interest

Common Law Property rights upon termination of marriage

Divorce-

Ct. determines at discretion based on equitable distribution-o Majority states divide up marital property

Some all property during marriage (gifts,inheritance) Some just earnings during marriage (community-PP-

partnership as marriage)o Some states divide up all property

Death-

“Forced Share” Legislation- surviving spouse has elective share in all property-

o Conventional-can take what will has or fraction of his property whatever the state holds usually ½ or 1/3

o Uniform probate code-keep what in will and credit toward elective share

Doesn’t apply to property held in JT nor to life insurance policies

**** GA only common law state to not have elective share

Community Property System ( 8 states AZ, CA, ID, LA, NV, NM, TX, WA) also by statutes WI and AL-PP marriage is shared and contribute equally

Three property regimes usually available:o Hold all their property in separate ownership (American common

law system)o Hold property acquired from earnings as community property

(American community property system)o Hold all their property from whatever source as community

property (Universal property system) Property shared is all earnings and property during marriage/ not shared-

gifts, inheritance, property before marriage Divorce-half community property and all other property Death- ½ interest of dead spouse in community property according to will

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No TBE-but only difference is no survivorship in community property and tax advantage b/c taxes step up for community property when one spouse dies and some state allow one party to transfer or mortgage (minority on this provision) and creditor can follow manager so one creditor subject to entire community if equal manager (majority)

Management of community property

Can only be conveyed as undivided whole Equal management power-most states require joint transfers and management but

some don’t so either has to act in good faith toward other Majority-creditor can follow manager so if = → one creditor can reach all community

Mixing Community w/ Separate Property

“inception of right rule”- if buy before marriage even if paid off w/ community funds it is separate property

“time of vesting rule”-title does not pass until all payments paid “pro rata sharing rule”-% paid when separate is % own separate and % paid when

community is % owned by communityMigrating Couples

Where domiciled at time of property is whether subject to community property system and can only change characterization if change domicile and both parties agree not subject to system

Where domiciled at death governs personal property and where land located at death governs land

Quasi Community (CA)- at divorce or death ½ of a spouses property that would have been community had they been domiciled in CA all along now belongs to other spouse

B. Landlord Tenant Lawo Tenancy for years-set period of time can be less than year, ends when time up

o Can be made terminable on a condition alsoo Death of LL does not end it

o Periodic tenancies- recurring periods that continues until notice-one full period if less than year-must be actually delivered to person in writing

o Can be express or implied Month to Month- Give notice and ends at end of month Year- Have to give 6 month notice but now most states 30 days (if set 1,000 due

each month 12k year→year to year)

a. Tenancy at Will-No fixed period end whenever either party wants outo If only right in LL, tenant right at will is usually implied but not vice versa just a

life estate but if SOF not satisfied→TAWo Ends if either party decides no notice needed, tenant wastes, tenant attempts to

assign tenancy, LL transfers interest, LL executes a term lease

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1. Garner v Garrish- D got right to terminate on day of his choice, P inherited and wanted to terminate

o Life tenancies are becoming more acceptedo P cannot terminate if D keep paying

b. Tenancy at Sufferance (holdovers)-when tenant stays when tenancy endso Cant use self help forcible entry to evict, some states say cant even change locks

b/c judicial cheap and fast Landowner can 1. Evict (plus damages) sue or act as trespasser 2. Consent

(express or implied) to creation of new tenancy (need before old tenancy ends if new terms added)

If accept payment depending on jurisdiction can be implied consent to new tenancy either by length of original tenancy but not longer than a year or month by month

c. The lease- gives rise to LL/Tenant duties that others don’t have. Ct may interpret something that looks like lease as something else

1)SOF - >1 year→ must be in writing 2) Must list price but if don’t ct. can assign fair price if method for doing so given

Exceptions:a)Partial Performanceb) estoppels-serious reliance from oral agreement

o If sublease- no privity b/w original lessor and sub lesseeo If assignment-privity b/w original assignor and remote assigneeso LL can go after T1 if T2 defaultso 2 ways LL can go after sublease- 1. By statute 2. If subleasee agrees to be bound

by original leased. Discrimination

Federal Fair Housing Act §3604

o Cant discriminate on race, color, religion, sex, familial status (except in senior citizen housing or if unmarried), national orgin, handicap (not drug addictions, need to make reasonable accommodations but can charge for animal)

o Cant advertise or solicit that discriminateo Don’t need motive to prove and can sue for injunction

and damages §3603(b)(1)-Can discriminate if renting less than 3 single family

dwellings if don’t use real estate agent and don’t advertise showing discriminatory intent

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§ 3601: private clubs, dwellings for religious organizations, and certain specified persons are exempt from the FHA

Can discriminate against gays and don’t have to rent to unmarried couples or against people who would pose a threat to the dwelling or other tenants

Have to allow pet for handicap unless impossible Attorney fees from D to P if P win but only from P to D if claim is

frivolous Civil Rights Act of 1866-same for racial discrimination- except that

doesn’t prohibit advertising and doesn’t have exemptions of FHA and applies to all sale and rental of all types of buildings not just housing

o Need proof of intentional discrimination

e. Holdover Problem Delivery of Possession

1. Hannan v Dusch- D leased to P for 15 years and supposed to make available for move in date but old tenants still there and D failed to bring action to oust. D does not have an implied covenant to oust for the start of a lease w/o express covenant

English rule (Majority)-implied covenant to put tenant in actual possession for first day but after that Lessee’s job

o LL in better position to Oust and know if old tenant still there and can evict at less cost(weighing fairness and efficiency)

o Tenant can move to oust, can cancel contract and get damages, can get other housing and make LL pay until oust

American Rule (minority)-Lessee has legal right of possession but no duty on lessor to put in actual possession just need to deliver legal title

o Can oust and get damages, can collect the rent, can evict

f. Sublease and assignments-Tenant wants to end early

Assignment

Whoever LL contracts w/ has privity of estate and privity of contract, if assign to T2 then T2 has privity of estate and liable to LL

Novation- If LL release T1 of obligations and creates new contract w/ T2 where T1 assigned to T2, puts T1 off hook for rent but if not still on hook. T1 cant release his duty in contract to T2

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2. Ernst v Conditt- P leased to Rogers, lease said couldn’t sublease and has to clear stuff off land when lease up. Rogers sold business to D and D stopped paying rent, P sued D, D said Rogers only liable for rent. Debate over whether it was an assignment or a sublease.

Though said sublease intentions are for assignment b/c gave to D for remainder of term intentions clear Rogers did not intend to keep interest so LL and assignee are in privity and liable to each other but so is original T if easier to sue

Common law rule if grants for the entire term of lease→assignment despite terms or intention.

Words in instrument are not conclusive, intentions are

Sublease-if hold any right to “re-enter”(→ not at common law but rest of this is) or reversion before end of term of lease, an interest less than whole conveyed

LL not in privity w/ sublesee so can’t sue them

` Restraints

T1 can transfer freely if no covenant to contrary LL can cancel future sublease and assigns by canceling w/ T1 but if T1 forfeits his

right future one remain in tact3. Kendall v Ernest Pestana- Bixler got commercial lease from D who,

Bixler builds business and sells to P. Lease required written consent of D before could assign interest and failure to do so would render lease voidable. D wants to void b/c wants different terms/ increased rent. D cannot deny consent b/c want to raise lease higher

Majority- LL can withhold consent foe whatever reason when approval clause but often avoided by waiver and estoppels and can be contracted around

o Contractual restrictions on alienability are allowed b/c lessor has interest and should be allowed to protect interest and lessee could have bargained around it

Minority but growing (followed here)- consent can only be withheld where lessor has commercially reasonable objection to assignment but this does not apply to residential leases-can contract around this

o When discretion is given have to act in good faith and b/c policy against restraints in alienation

g. Defaulting tenant

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1. Berg v Wiley- D said need to make repairs w/ in 2 weeks and follow health code and if don’t comply can re-enter. On last day P closes business and says closed for repairs. Since P defaulted D came and changed locks when P was not there.

Modern (large minority)-No self help unless tenant abandons, need to use judicial proceeding only takes 3-10 days if P didn’t abandon, don’t want violence even if it costs a little wont effect rent too much

o Applies to both residential and commercial

Common Law (majority)- may use self help if LL entitled to possession and re-entry means are peaceable and reasonable

o May differentiate b/w if do→ home-usually no re-entry, commercial-re-entry if express provision

h. Landlord remedies in addition to eviction

Tenant abandons-no intention of returning and default in rent

1. Sommer v Kridel- D backed out of tenancy after signed lease, P wants to recover total lease from D. D owes nothing b/c P never tried mitigating

Modern Rule (large minority)-P has a duty to try and mitigate damages by treating just as any other empty apt (advertisement , showing it) don’t need to make special effort to rent that one out. Treated more as a contract not conveyance.

o Would be unfair to D if something devastating happened. o Breaching party has duty to show damages could be

mitigated and bear cost of mitigation and difference b/w what mitigates and actual rent and landlord has duty to show took reasonable efforts to do so b/c in best position has to take fair market value

o If fail to mitigate can either (split authorities) 1. No rent recovery or 2. Difference b/w rent and amount which can be avoided

Old Rule (majority)-LL no duty to mitigate b/c transfer of property so LL should not concern himself with tenants. LL can terminate lease, leave lease and sue for remaining rent, try and mitigate.

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Security Devices- 1)can sue for back rent and damages 2)can terminate lease 3) can sometimes recover for difference in rent supposed to be paid and new reasonable rental value (abandonment if Jurisdiction extends contract doctrine to leases) 4) Security Deposits (for damages and breaches but LL often withholds for menial reasons=problem) 4) Rent Acceleration (all rent due at point if default)

Landlord Duties: tenants rights and remedies

If substantial breach can leave and sue for constructive eviction but should stay and keep paying rent until know substantial breach b/c could be liable for default if not breach

i. Quiet enjoyment and constructive eviction Needs only be nuisanish and not be able to use land for enjoyment as

contemplated Constructive Eviction

o Tenant has to give reasonable notice and LL has to be in control or has to be LL tenants and LL has to take reasonable steps to abate can only sue for constructive eviction if Tenant moves out but can sue for difference in property value w/ breach if stay on

Partial Eviction- o Traditional Rule- If only partially evicted don’t have to pay rent

until made whole w/ land againo Rest 2d §6.1-only partial abatement of rent or termination and

sue for damageso Majority-not relieved of obligation to pay rent unless move off

all land Can waive these if know of before of problem before

1. Reste Realty Corp. v Cooper- D leased from P, and due to improperly graded driveway it flooded. Officer of P knew of it and fixed but then quit and told new guy how to fix it but didn’t so D left after complaints ignored. Debate over whether flooding is constructive eviction because violate implied covenant of quiet enjoyment→ is constructive eviction so doesn’t have to pay rent

Anything that materially disrupts or impairs a tenants enjoyment of leased premises of what meant for and tenant didn’t know about or didn’t expect to be a problem and that tenant is forced to move out → this is substantial breach and no further rent needs be paid

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j. Doctrine of illegal lease- if deplorable at time of lease was signed and LL has notice tenant can walk or stay and use as defense not to pay/ LL can kick out or collect reasonable rental value (tenancy at sufferance) and lease is unenforceable (brown v Southall realty)

k. Implied warranty of habitability-(more widely adopted rarely to commercial lease)- every lease implied warranty that it will be habitable- need to give reasonable time to cure and has to be substantial interference w/ enjoyment.

o Urban tenant does not have time to inspect and LL knows more about premises so better position to remedy, housing shortage so less bargaining power

LL needs to take reasonable steps Cant waive this even if know of condition before1. HIlder v St. Peter(best case for implied warranty)- P leased shit hole and

it was dangerous, smelly, and ugly so couldn’t enjoy it but stayed there and wants to not have to pay rent. D did no repair. Broke health code/ building codeso Major housing code violation is prima facie evidence of breach. One

or two small ones that don’t endanger health or welfare→ no breach

o 1. Must effect health or safety 2. Must notify and give LL reasonable time to repair 30 days

Damages can get specific performance, application of rent to repairs, recovery of lost attorney fees or [rent reduction is Diff b/w fair value as warranted and value as it exists (followed here)]

Others follows difference b/w rent and fair rental value as exists or percentage diminution approach (lease value lost by tenant)

Can use as sword or shield allowed to withhold rent and can deduct from rent if repair at own expense, punitive damages allowed if dire enough

Need to show willful and wanton or fraudulent conduct

o Some cts. Don’t allow retaliatory eviction within 90-180 days after good faith complaint in residential leases some allow after reasonable time to find adequate housing. After period tenant bear burden of proof to show retaliatory

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Tenants Dutieso Make minimal repairso Cant waste-cant change appearance or change realty extraordinary

in scope2. Chicago Board of Realtors v City of Chicago- D codified implied warranty

of habitability and P challenged→ critique of Implied warranty of habitabilityo Purpose to improve health/safety in housingo Provision not allowing LL to change interest at market value for late

payments will not further goal will have opposite effect LL will have less resources to improve so will increase prices

and tenant will be worse off and will be tougher for poor people to get housing

l. Landlord tort liabilityo Common law (majority)-no duty to make safe premise for tenants except:1)

latent defects(just warn of them and if T occupy→assume risk) 2) public use (has duty of ordinary care to correct where LL know or should know T wont fix before admitting public) 3)reasonable care over common areas (criminal activity ect.)

o Minority-LL liable if failed to act as reasonable person. Common law factors considered but not rule

o Exculpatory clauses (relieving LL of liability) are generally valid but some cts. refuse to enforce in residential leases b/c unequal bargaining power and thought to increase personal injury

o If premise Destroyed-o Old rule-Tenant still has to pay b/c land still there though building noto New Rule- (doctrine of impossibility)-LL cant deliver to Tenant so

doesn’t have to pay rentm. Tenants Duties While in possession:LL rights and remedies

o Law of Waste-o Tenant breaches if make change to affect vital and substantial portion

of premises: characteristic appearance,purpose of premises, uses contemplated, change affecting realty

o Common law-duty too repair to keep premises in good repair, not normal wear and tear or substantial repair- BUT now LL duty to repair for most part b/c in better position

Implied warrant of Habitability seems to overrule tenant duty to repair but IWH doesn’t generally apply to commercial leases

o Majority- no duty to rebuild even if tenants fault unless express promise to

C. Transfers of Land

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Intro to buying and selling real estate- 1)Negotitaiton-legal description, price, date of closing-this is executor

contract b/c though sign no transfer of deed yet b./c still have obligations parties need to complete before closing 2) inspection by buyer 3)buyer does title search to make sure “good title” marketable title free and clear 4)mortgage loan (look to se if married and can transfer property w/o wife) 5)satisfy contingencies 6)delivery of deed-some states all parties need to be present others 3rd party can handle

o Only way to transfer or cancel transfer of property is in a signed writing

i. Liabilities and duties of Broker Broker no duty to tell seller what buyer willing to pay b/c interest in closing

but still has to make seller happy-Lawyers have ethical obligation to put clients interest in front of even his own b/c get paid same no matter what

1. Licari v Blackwelder- P hired D to find buyer at best possible price. D bought for 115,000 making P believe that was best price and that they were going occupy it but turned around and sold it for 160,000 soon after to someone P said not to deal with.

D had fiduciary duty to act in best interest and good faith of P’s and disclose potential other dealings. 45,000 profit unconscionable so P gets it

D intentionally misrepresented facts to trick to sello Majority Rule:

o Seller usually has selling broker and listing broker-A broker’s failure to communicate facts concerning a more advantageous sale or exchange renders him liable for whatever loss the client may suffer as a consequence and precludes recovery of a commission. May also lose broker’s license. RST (Second) of Agency § 387. Act in best interest of their principals

o Minority Rule:o Buyers should have brokers b/c will increase efficiency b/c will reveal more info

to broker o Dual agents- both have same broker and owes duty to act in good faith to both,

broker has to tell acting as dual agent\o Disclosure- duty to tell sellers agent and material defects known to broker and not

buyero Types of listings-agreement to broker to pay commission if fulfill duty

Open-least protective, seller can sell self or give to another broker and not pay commission

Exclusive agency listing-permits only one broker to sell property for specified time, owner can still sell self. Broker gets commission even if another broker secured buyer

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Exclusive right to sell- gets commission if any buyer buys during specified time. Most protected and majority of listings

o Lawyers give better advice b/c get paid regardless brokers only get paid on closing and lawyers have ethics standard but cost more

Commission is due

o Traditional(majority)-when broker bring ready buyer even if sale fails-can be contracted around by making commission conditional

o Minority-When closing or seller not acting in good faith to close

Requirements of contract for sale

n. Statute of Frauds-o Except for leases less than 3 years, no interest in land can be created or

transferred unless writing, and no action can be brought against a person for sale of land unless that agreement is in writing

o Need (1)signed by party to be bound (2)describe real estate (3)state price if no price cts. may imply reasonable price if method given for doing so

o Exceptions: Part Performance and Estoppel (induced to rely on contract and would be unconscionable injury if not enforced)→rest 2d §129

1. Hickey v Green- D agreed to sell to P for 15k P sends check but doesn’t fill in payee line b/c wasn’t sure who to put D holds onto check doesn’t refuse it but since doesn’t cash no partial performance, check is binding on P though. D sold house for 18k to someone else P offered to pay that D refused, P already sold own house.→estopppel to P

If don’t meet SOF can be enforced if reasonable reliance and on continuing assent of D and P position has so changed that only specific performance can remedy it

o Since D didn’t reject quick enough and P relied by selling house rapidly which should have been expected + reasonable

Emails have been found sufficient to constitute a “written document” and satisfy SOF; some courts have ruled otherwise b/c emails tend to lack caution

Marketable Title-implied in every contract Majority-recorded easement that buyer can see can still render title

unmarketable Minority-recorded easement that buyer can see cannot render title

unmarketable Hazardous waste on property cannot make title unmarketable

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1. Lohmeyer v Bower-P bought lot but in violation of zoning ordinance, P wants to rescind D tries to remedy by giving more land to fix violation→ can rescind if no clear marketable title

So no marketable title-must be substantial defect that subject buyer to injury (here was hazard of litigation and covenant restricting use) has to be encumbrance not just effect market value like wetlands restrictions or zoning laws unless violation of them and don’t know about

o Covenant restricting use wouldn’t be if was a benefit to land or if has bargained for special use

D agreed to free and clear marketable title and wasn’t D entitled to fix w/ in reasonable time but by buying

more land is making P agree to something that was not in contract

If P had title insurance→ could be obligated to continue anyways

Following equitable conversion, most courts hold that from the time of the contract of sale of real estate the burden of loss is on the purchaser, even though the seller retains possession

Some courts decline to apply equitable conversion and hold the loss is on the seller until legal title is conveyed.

i. Duty to Disclose-caveat emptor- Buyer has duty to prudently inspect if fail to cant rescind, unless 1. Latent defects 2.fiduciary relationship 3.act of concealment-affirmative misrep.4. Or Johnson- punishes non feasance now

Majority-disclose all known defects1. Stambovsky v Ackey- P from not in the area bought well known

haunted house in the area as advertised by D which impaired value of the house and D didn’t disclose.→ P can rescind

If seller knows of a condition that is unlikely to be discovered by careful and prudent buyer and impairs value of contract non disclosure allows rescission

As is clause does not extend to paranormal activity b/c not reasonable interpretation only physical condition

2. Johnson v Davis-D bought house, P said roof ok but leaked like a mofo and D wanted to rescind

Where seller knows of facts materially affecting value of property which are not readily observable and are not

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known to buyer, seller has to disclose. Punishing for nonfeasance (inaction) now and not just misfeasance

Materiality 2 standards- (majority) 1.Whether reasonable person would think was important in deciding to buy (objective) (Minority) 2.whether defect effects value or desirability of property to buyer (subjective)

o Encourages people to pick a bad decision when faced w/ two bad ones increases risk taking

Defense to hazardous materials if buyer knew about it or as is clause and reasonably discoverable and no fraud

Merger of Contract into Deed

When buyer signs deed and becomes final expression of agreement, will not be enforced word for word ex. If say no warranties but seller misrepresented something or fraud→warranty would survive

ii. Deed Warranties of Title- a. General Warranty Deed-Warrants against all defects in title (6 express

warranties)(first 3 present covenants so evaluate at time of deed SOL runs then) i. covenant of seisin (own it or not) ii. Covenant of right to convey iii. Covenant against encumbrances (liens, mortgages, easements, covenants) (last 3 future covenants problems arise after deed and SOL runs when broken) iv. general warranty (protection against lawful claims of superior title) v. quiet enjoyment (protection against superior title) vi. Further assurances (execute any documents to perfect title)

1. Brown v Lober- P bought from D got GW and conveyed land w/ no restrictions but D only had 1/3 mineral rights and didn’t tell P. P says constructive eviction b/c breach of quiet enjoyment. Couldn’t sue for breach of warranty b/c 10 yr SOL up on present covenants seisin in this case.

o No breach of quiet enjoyment just b/c there is a superior title b/c not stopped from enjoyment of land and mineral yet so this doctrine does not secure a perfect title

o Should have done title search or could have started mining and hoped someone tried to evict them and then sued on quiet enjoyment

Encumbrances- Passes of fee by conveyance has to affect title not just price of property-mortgage, judgment liens, tax liens, assessments, Estates or interests in the property less than the fee (leases, LE, dower rights), Easements or servitudes on the land

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Knowledge of such does not exclude covenant, just need intent to include in deed

2. Frimberger v Anzellotti- D conveyed to P w/ warranty saying no encumbrances but since on wetlands property was in violation b/c house encroaching on wetlands. P also claims misrepresentation

o Latent violations of land use regulations that seller did not know of and no one ever tried to enforce regulation and that does not appear on land record→ not encumbrance does not affect marketability of title

P should have been more specific in deed if wanted to protect against this

No damage yet b/c no one tried enforcing so would only be speculative and P could have requested waiver of this violation and didn’t.

o b/c no encumbrance no misrepresentation Recovery for breach of seisin-loss of consideration or interest-but

cannot recover for more than was grantor sold foro Rockafellor v Gray- American Rule (majority)- cant sue on

present covenants if breach → transfer English Rule-Can

Recovery for encumbrances-limited by price received by grantor-tries to put grantee in as good of position as if covenant had not been breached

Future Covenants-runs w/ land so needs something to attach to ex. Title to pass

For warranty and quiet enjoyment, coventees possession actually has to be disturbed

b. Special warranty deed-Warranty against grantors own actsc. Quit Claim deed-no warranty just conveyance

Hypos- If B hasent been sued by C yet cant sue A but can ask to put money in escrow to cover contigent liability so that doesn’t have to sue

B Can get title insurance if A warrants 15k but B warrants 20k to C and C sues B for 20k, B would only be able to sue for 15 k

Transfer of warranty deeds-o Minority- Warranty that grantor assigns to grantee who sells or assigns to

3rd party remote grantee is also transferred to them against grantoro Majority-remote grantee can only sue for future warranties not present

warranty

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o Seller not responsible for loss b/c of depressed price so if A→B(GW 20K)→C(GW 15k) if C sues B, B can only recover 15k from A. Sellers limited to what bought for to recover.

iii. Financing real estate transactionso If default on loan lender can:

o have power of sale which makes it cheaper than going through ct.

o Maybe get deficient judgment if sale is less than loan- sale needs to be fair and warranted ( some cts. Use fmv rather than what high bid is to determine if deficiency judgment). Scrutinize borrowers private sale more than foreclosure sale against lender to make sure not unfair sale.

o Buyer of foreclosed property taking risk b/c defaulter can come back w/ in 6 months to year and pay back and plus don’t have owner exposing all latent defects

o Acceleration clause-get all payments when defaulto Borrower can- Sell property, give title to lender in return for forfeiture of

claims, accept foreclosureo Financing not subject to UCC article 2 b/c not personal property

1. Murphy v fin dev. Corp- P had loan w/ D w/ power of sale. P defaulted and postponed sale once for P . Lenders bought for 27k as much as loan was b/c no other buyers present and sold 2 days later for 38k to house trading client

o As buyer+seller D had fiduciary duty to P so had to exert reasonable effort (good faith) to obtain fair reasonable price under circumstances and not act in bad faith (intentional disregard of duty or purpose to injure)

o No bad faith/c didn’t shock judicial conscience but did no good faith didn’t act in due diligence (negligence) to obtain fair price or whether reasonable person in D position would have adjourned sale-the fact that D offered at much higher price later that day showed knew could make money should have had upset price or postponed

o D should have published at more than P house and cuty hall and postoffice should have put in newspaper like last listing before postponement, or adjourned sale, or set min price

o If bad faith would be fmv-actual sale but only fair price-actual price mere negligence cases

o P had 19k in equity and house appraised at 46k so 27k sale price did not cover equity wouldn’t be fair

Cts. Usually uphold low price unless procedural irregularity like chilled bidding

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2 standards for invalidating foreclosure sale 1)shock conscience 2)grossly inadequate

iv. Subprime Mortgage Crisis Securitize- Bundled many different levels of mortgages (prime/alt

a/subprime) form many different area together to make it look like a grade A investment b/c seems safer that all area wont become depressed.

o But even Grade A loans people were having trouble paying so threw balance off and banks started foreclosing to make lendee eat drop in market.

1. Commonwealth v Fremont Investment & Loan- P claims D unfairly gave subprime loans and wants restrictions on D foreclosing. The ones that were deemed unfair were the ones secured by homes and low initial payment but after 2 years often skyrocketed above 50% of income but in hope of refinance before then and b/c value of mortgage was often 100% couldn’t get new loan.→ Injunction granted

Warning put out 1 yr before loans that even if comply w/ state+fed. Regulatory guideline like did can still be unfair

Unfair to base loan off of speculating rising house prices and ability to refinance and not expected payment ability and low introductory period gives false sense can afford

For public interest company still gets to recover and people keep home by working out better plan.

Pre-payment penalty not fair b/c benefits lender not borrowerv. Mortgages-merely creates lien

Seller should not accept late payments b/c may make buyer think promptness is not needed and may bar P from bringing forfeiture and remainder of purchase price

Future mortgages are subject to prior mortgages first, subsequent ones are riskier

o If only default on 2nd loan, acceleration clause in first makes you pay off first right then.

1. Bean v Walker-D bought property from P w/ agreement to pay over 15 years w/ clause that said if defaulted P could eject and keep equity as liquidated. D paid just over half and defaulted but also made substantial improvements on land

Buyer gets equitable title and seller holds legal title in trust until pays in full, mortgage merely creates a lien and D entitled to increase in property, so interest is created superseding terms of contract

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P can only foreclose on D and move for sale, would be inequity to lose all money put into house and house

Maybe can utilize forfeiture if minimal payments and where P paying for upkeep or if D abandons

Installment land sale contract-pay in installments and get title when done Usually restrictive b/c people who cant get mortgages Buyer forfeits land and payments if default (no foreclosure expense) Accepting late payments may waive sellers right to forfeiture

vi. Recording of title Tract Recording- all land divided into tracts and look up by parcel id

number, takes long time so cost a lot of money Grantor + Grantee system- 2 large books one of grantors one of

grantees alphabeticallya. Types of recording acts

Race statute-whoever records first is true owner (bright line rule) (few jurisdictions)

Notice statute- if subsequent purchaser has notice of prior purchaser either constructive (recorded) or actual, last bonafide purchaser w/o notice wins(half jurisdictions)

Race-Notice-Combo (Half Jurisdictions GA)-w/o notice of prior conveyance and record before prior conveyance

o Just need sufficient info to put on notice, inquiry notice good- where should have asked more questions sufficient way to be put on notice

o Eliminates law suits b/c extrinsic evidence Be careful of wives that don’t take husbands surnames Shelter rule- Defense where conveyee takes position of conveyor usually

helps more w/ notice1. Luthi v Evans- Owen conveyed to Intl. Tour through recorded

mother hubbard conveyance just general description of everything in county and then conveyed to Burris another parcel in county. Burris claims made it impossible to find in ct. house b/c didn’t have names of lessor/lesee, date or legal description so no constructive notice.

Subsequent purchasers need actual notice or prior sales not good

Improper indexing but proper description so can find land→constructivre notice (can be found b/c recorded)

Land not described w/ sufficient specificity and Burris had no knowledge

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Mother Hubbard (all property in a county)only good in emergency but as soon as possible need to specify, this was not emergency→ too much burden to find MH does not give constructive notice so would need actual notice to be good

2. Orr v Byers- P won 50k judgment against Elliott, but in judgment note made by P attorney spelled Elliott wrong slightly. So lien did not show up on Elliott property and was able to sell to D. P wants to foreclose b/c iden sonans(alternative spellings D is responsible for looking up minor mistakes if pronunciation close to same)

Iden Sonans is inapplicable where name is material b/c too prejudicial, not going to extend to real property would be too burdensome on transfer of property to look up all spelling only used for ID’ing people not constructive notice in good faith. If misspelled grantee probably still good b/c have to look up by grantor.

Alternative procedure(soundex) for searching for names has too many drawbacks too b/c brings too many choices

3. Board of Education v Hughes-H to D recorded Dec. 16 1910. H to D&W Dec 21 1910 filed in grantee name just prior to recording→P recorded Jan 27 1910. Race notice Jurisdiction

Deed not operative til grantee name on it D protected b/c recorded before D&W recorded, not

enough constructive notice to D from D&W to P b/c P (wild deed) stranger purchaser and stranger seller b/c not recorded

Need chain of recorded title for subsequent purchaser to be valid over another

4. Guillette v Daily Dry Wall Inc.- P wanted to stop D another lot owner from breaking restriction/term on P deed and a couple others that says neighborhood will not contain more than a single family dwelling. D deed did not mention but did refer to the deed plan that P has

Subsequent purchasers subject to restrictions of prior purchasers

Usually SOF bars restrictions not expressly written but where remaining land has restriction can be enforced

P had interest in rest of grantors land and P deed properly recorded so D subject to those restrictions and index was grantor grantee so not impossible to find restrictions set out in plan requiring that grantee look into all person right of subdivision in common grantor

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o Half jurisdictions follow half don’t b/c really expensive to look up and burdensome on transfer of property and say not constructive notice b/c not in chain of title

Can convey to straw person then convey back with restrictions title insurance to protect title in imperfect recording systems

Notice- 1)Actual 2)Constructive-Record and Inquiry (if reasonable prudent person would investigate further and would have revealed unrecorded interest)

D. Private Land Use Controls: the law of servitudes-increase total value of both parcels usually by burdening one

i. Covenantsa. enforceability by lawb. enforceability by equity

ii. Easements – interest of one person holds in the property of another (dominant estate-benefited parcel and Servient Estate burdened parcel)

Types of Easements:

1. In gross-both servient tenement, right to some person w/o regard to land ownership, states differ on if transferable

2. Appurtenant-a dominant and servient tenements, right goes to landowner of parcel of land, goes with land

Presumption in favor of appurtenant if ambiguouso Cannot have easements in own property but can reserve when sell

3. Negative Easement- right to prevent some use of servient estate Common law only 4- 1)light 2)air 3)subjacent or lateral support

4)continual flow of artificial streams4. Conservation Easement-generally negative easement in gross for

conservation of resources or history If wont recognize as easement in gross as valid may be enforced

as real covenant or equitable servitude5. Licenses-oral/written permission by occupant of land allowing licensee

to do some act that otherwise would be tress pass-this is revocable when servient owner die or sell(unless expressly or impliedly makes it not 1. Intention 2.equitable estoppels 3)license w/ interest) and easement is not until dominant owner died

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Last until nature of it doesn’t call for it anymore Cases of ambiguity b/w easement in gross or license are

considered license b/c hard to get rid of easement and less alienable

Assignable only if intended to be or estoppels and becomes irrevocable

1. Holbrook v Taylor- D been using P haul road for many years w. permission. D bought land and built house near P land and wants to continue using road but P wants to revoke/get in writing.

Estoppel- cannot revoke license if erect improvement of considerable expense so license becomes easement appurtenant

P agreed to let D use pass way and didn’t say anything when machines using road to build house and considerable expense

o Sheppard v Purvine-close friends and word considered bond, to require for a deed would be embarrassing to integrity so oral is binding. (majority)Estoppel applies to oral contracts

o Henry v Dalton-oral not enough need writing to create easement/irrevocable liscence even if relied upon and expended great money (minority)-estoppel does not apply to oral contracts b/c SOF should bar

o policy against irrevocability-punishes good neighbor who doesn’t say anything so licensee should pay for it

Create Easement: 1.express grant 2. Estoppels 3.by implication 4.by necessity

Express grant only one that needs to pass SOFo By Grant-

can reserve easement in grantor (majority) cant reserve easement in 3rd party need two

transactions or exception distinction b/w reservation ( new easement) and exception

(exisiting easement)1) Willard v First Church of Christ- P bought lot from Peterson who

never told of easement that land had when bought from Mcgurgon, but did say that D would want to use lot and clearly was at time using lot → appurtenant (but could be in gross b/c goes w/ church) runs with the land

Common law rule-one cannot reserve interest in property to stranger of title (could have used

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strawman)-but this is moot now b/c was to limit conveyance by deed

Follow grantors intent from four corners No reliance by P b/c did not get title insurance D openly using land when purchased so no

prejudice Must balance equitable/policy considerations to

determine if old rule should apply to prior grants→D b/c no reliance and intent for D

Mcgrugen reserved not excepted land so created new interest that did not exist before he is not excluding conveyance from something that existed before

By estoppels-makes liscence an easement/irrevocable

By Implication- easement implied under circumstances of prior use- 1)common owner 2)reasonable necessity 3)continuous use 4)intended continuation at time of division (look at price paid) 5)existing use (at time of division) 6)apparent (foreseeable, could be inferred by reasonable inspection, could be detected)

Doesn’t go away once get

By necessity-where property has been divided by common owner un such a manner that an easement for access was necessary at time of split- 1)common owner 2)necessity (strict-othen or reasonable) at severance (don’t need prior use or for someone to use at time of severance, last for as long as necessary)

2. Von Sandt v Royster- P wants to stop D from using underground sewer across P property which was owned by one person at one point and deeded to P and D. P basement keeps getting flooded D wont stop using. P claims took land free of burden b/c gw deed but D says appurtenant easement

Quasi easement-when a person uses part of his land for benefit of another-if of apparent necessary and continuous nature→transfers to grantee when convey if not expressed only if 1. Buyer + seller know of drainage but don’t know where it runs but had opportunity to find out 2. Both know of drainage and buyer knows of location +assumes A knows

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o P knew of easement b/c knew had plumbing the fact that not visible does not mean not apparent (can see on prudent inspection known or forseeable) property needs for comfortable enjoyment of property, if would require disproportionate effort+expense to not use easement implied reservation is good

o Test quasi (apparent+continuous)- 1. Implied prior existing use 2. By necessity for enjoyment

New rule-reaosnable necessity for implied easemento Ct. uses necessity as big factor b/c cant sotp

using w.o great expense and wouldn’t know where pipes go if just knew plumbing

3. Othen v Rosier- P wants to enforce easement on D land b/c necessity/prescription. P used land many years before purchased in 1904. River threatening D land so built levee which made road impassable

For implied necessity reservation need 1. Unity of ownership[ of dominant and servient estates 2)roadway is a necessity not convenience 3)necessity existed at severance of 2 estates

o D got land and P not using land yet not necessityo Necessary- 2 tests- 1. Strict necessity 2. Reasonable necessity

o Ct. here uses strict saying can get to land some other way even if that is walking

o Necessary easement exists only so long as necessaryo In west cts. allow land locked landowners to condemn easement but have

to pay for it as long as unity at one point by private owners not u.s..o Cts. reluctant to do easements by necessity

b. Implication- doesn’t go away once get=difference w/ necessityo Wet sand right after upland and dry sand in some states is privately owned and

some owned by state under public trust doctrine

Transfer of Easement/Assignability

Appurtenant-transferable if parties intended b/c part of title so transferable

In gross- commercial easements are assignable and non commercial are not unless parties intend otherwise

4. Miller v Lutheran Conference Camp Association- P had right to fish + boat and granted an extra right to Rufus who gave license to D w/ extra right. P says in gross and cannot give away. D claims got by prescription

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and so alienable + divisible b/c P was bathing for period of time→D has no right

Done by prescription b/c bathing done systematically for commercial purposes and no one objected. It was intent to share business w/ rufus so P got fishing and boating by grant and got bathing by prescription

In gross conveyance to more than one owner so need to act as one owner and need permission to assign, cant assign just a share not divisible would be transferable if did get permission

Doctrine of mountjoy-if assignee decides to assign rights further to one or two or more but if two or more has to work together as one stock as no division

5. Brown v voss- D granted easement to P who obtained another parcel of land and wanted to use easement for that land too only 1 house still→D wins 1 dollar for misuse but not overburden not unreasonable burden

Any extension of easement appurtenant to other parcels is misuse and can overburden if unreasonable burden.

Easement got no extra use by use of 2nd parcel and it was reasonable development of property and D sat by and let P spend 11k on land and said nothing

Scope of Easements

o Can move someone’s easement to build if- 1)dominant owner agrees (older view) 2) it doesn’t significantly cause dominant inconvenience and servients own expense-Rest 3rd

Dominant owner pays to maintain so if more expensive to maintain could be burden

o Dominant owner can improve easement as long as promotes use of easement, w/in scope of easement and don’t unreasonably burden the easement or servient estate or owners use of property

o Easement holder can use as long as doesn’t overburden servient estate→ flexible but uncertain

Real Covenants and Equitable Servitudes

o Damages: must prove that it is an enforceable real covenant→ get money damages, if cant only remedy is injunction equitable servitude

o Not condition where can forfeit estatec. Negative easements-prevents owner of property from doing something on own land like

covenants but cts. reluctant to create so often construe as covenantd. Covenants- run with land and say how own land can be used- can be created by written

instrument, estoppels, or implication- can only collect money damages

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o If signed by grantor only and contains promise by grantee, promise is enforceable against the grantee

o Burden only imposed who acquire identical estate that was initially burdenedo Elements for covenant to run with land- 1)Intent of original parties for covenant

to run w/ land 2) Rest 3rd-negative covenants binding on all future owners don’t need horizontal privity

o Burdens of negative and affirmative covenants runs to adverse posessors

o But if haven’t acquired title yet may only enforce affirmative covenants (1) to repair, maintain, or render services to benefitted property or (2) that confer benefits that may be enjoyed by the possessor without diminishing the value of the covenant to the true owner and without materially increasing the burden of performance on the burdened party.

o No VP- Negative-all burdens and benefits run to subsequent ownerso Affirmative- VP required for affirmative burdens only

o Third Restatement Requirements for Creating Running covenants:

Intent Required

Horizontal Privity Not Required

Existence of General Plan Not Required

Writing Required (creation by estoppel and implication ok)

Benefits in Gross OK

Affirmative Burdens OK

Touch or Concern Not Required; covenant OK unless illegal or against public policy

Vertical Privity Required for affirmative burdens only

Notice Recording Act

Restatement (Third): eliminates many remaining distinctions b/w equitable servitudes and real covenants

o Horizontal privity not required to create a servitudeo Benefits in gross may be freely createdo Only requirements to create: intent, writing that satisfies SOF (or implication, estoppel,

prescription)o Servitude correctly “created” unless illegal or violates public policy

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o Which successors are bound or benefited is determined by nature of the performance called for

o Defenses based on notice arising out of the recording acts

e. Equitable servitude-enforceable in equity (injunction) against successors to benefitted or burdened estate w/ notice of them (easier that covenants to prove and most people prefer injunctions). No privity needed and can be created by implication and writing (must be signed by covenanter if in writing)

Elements of creation- 1)intend for promise ot run 2)actual or constructive notice 1. Tulk v Moxhay- P sold to Elms who sold to D w/ notice of covenant by P

to elms. P still owns houses in neighborhood and doesn’t want D to alter property and ruin garden

o Cant w/ notice of covenant have greater rights than person purchased from b/c original owner sold for reason of not ruining own property

o Would be inequitable to sell to elms at depressed price and then allow elms to buy at increased price w/o covenant

f. Termination n of covenants- 1)merger 2)release 3)acquisition 4)abandonment 5)unclean hands 6)laches 7)estoppels 8)eminent domain 9)substantial change 10)unanimous agreement

1. Western Land CO v Truskolaski- D seeks to enforce covenant by P saying can only have single family house in neighborhood. P says neighborhood has changed so much so inequitable/oppressive b/c pop increase and commercial increase.

o Covenant still of substantial value to homeowners, and changes were in vicinity not subdivision

o As long as original purpose can still be accomplished even if greater value in other uses should be enforced

o Zoning ordinances even if changed to commercial does not override private covenants

o Though two lots break law, p subdivided so as much at faulto No abandonment even though 1 babysitting too sporadic to

amount to general consent, must be so general to frustrate original purpose

2. Rick v West- P subdivided land and sold to D a lot zoned for residential and covenant for single family home. P tried selling to business D would not release covenant and P said substantial change

o Though D owns modest lot, relied on covenant in buying. Not a question of balancing interests no damages to P

o No substantial change took place in area

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Rest 3rd §7.10- modification and termination of servitudes b/c of changed condition

o If change has occurred which make original purpose impossible ct. may modify to complete purpose if this is not possible or practicable ct. may terminate and compensation for any harm may be awarded even if just modification

o If purpose of servitude can be accomplished but b/c of changed conditions no longer suitable for that use, a ct. may modify to permit other uses to preserve benefit of original servitude

o Servitudes held by public bodies or conservation organization not subject to this section

This is superseded by this-if no substantial benefit to person seeking enforcement or not capable of accomplishment can be extinguished upon payment

Could buy D land3. Shelley v Kraemer- when someone goes to ct. to enforce racial

covenant, cts cant enforce so covenant exist but can’t enforce in ct.4. Pocono Springs- as long as have perfect title in fee simple can’t just

abandon and not pay anymore fees. Land not valueless only D claiming it is. Intent ot abandon doesn’t matter

o Deed need to be sold or transferred b/c PA law has no way to abandon when have fee simple or perfect title

E. Common Interest Communities- 1)cooperatives-don’t need reason to reject someone, exclusivity only as long as don’t violate state+fed civil rights law 2)condominiums-TIC but separately owned

Condominiums-each unit owned separate in fee simple w/ home owners associate enforcing rules, and all common areas are TIC of owners. Monthly charge to insure liability and upkeep

1. Nahrstedt v Lakeside Villiage Condominum Assoc.- D restriction limited specific animals including cats which P moved in with one. P said didn’t create nuisance b/c indoor cats so can’t regulate

As long as apply uniformly and don’t violate constitutional right or public policy or burden doesn’t outweigh benefit to residents should be enforced if in master deed even if a little unreasonable

o Restriction promote health, happiness, and peace of mind of majority, could have lived any where but owners chose to live there for reason so protects expectations

Reasonableness standard for things that get voted in

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Civil Code Section 1354-enforceable equitable servitudes unless unreasonable, arbitrary, or violate fundamental pp.

Enforcing only after litigation would strain social fabric of condominiums and increase price b/c have to defend + flood ct.. So don’t look at fact specific circumstance look at reasonableness in light of whole community like here so need general rule

Plus if make exception other people would want exception and if change too much agreement is void.

Restriction was recorded so could have looked up even if didn’t know

o Restatement 3rd §3.1- Servitude is valid unless it is illegal, unconstitutional or violates public policy(unreasonably burdening a fundamental const right, imposing unreasonable restraint on alienation if they are unreasonable by balancing purpose served against the harm) or if indirect restraint (value of land) then only invlaid if lacks rational justification

o Reasonableness standard for regulation on community

Cooperative-title to building owned by corp. Residents own all stock and control through board. Long term renewable lease. One mortgage, if one fails to pay others must make up, can deny anyone want unless applicant can prove ethinc or racial discrimination

F. Legislative Land Use Control the law of Zoning-doesn’t violate 14th amendment police powers due process

First restriction were height, every city has zoning except Houston1. Village of Euclid v Ambler Realty-suburb of Cleveland mostly farms. D is

owner of land which was divided into multiple zones. P approves makes decision if unfair by seeing if unnecessary hardship. Zoning of residential greatly decreases property value. D made no effort to get building permit or try to building through P.

Only need legitimate state interest and law that achieves those ends to pass due process

o Look to nuisances for help look at circumstances at wholeo One apartment building can destroy residential area its safety,

traffic, and health and can be nuisance, bd. Just trying to protect area of health safety and morals by refusing infringement→police power

o P has power to limit buildings to prevent nuissanceo No evidence that would have an appreciable effect on

marketability of land b/c D wasn’t doing anything w/ land at time

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o Dissent: increases sprawl, inefficiency of land use, separate work from home, no mix

Euclidean zoning-higher uses permited (U1) permitted when lower apply (u7)

Non-euclinean-exclusive to those enumberated in sectionG. Non conforming use-runs with land

1. P.A. Northwestern Distributors v Zonining Hearing Board- Adult book store, D said cant have passed ordinance after

OLD RULE- Non conforming uses is constitutional police power as long as reasonable (benefit to community more than loss to landowner). Must be be necessary to health, safety and morals,- burden to prove is person challenging validity.

New RULE- right to use property unless against law, nuisance, or violate covenant restriction or easement, eminent domain or abandon 1)Need reaosnablness-90 days not reaosnbale for amortization wont get full price for sale of stuff. 2) Whether taking under state constitution

o Can stay open and expand if reasonable for business purposes

o Cant change existing lawful use of property- unconstitutional unless nuisance, illegal, abandoned, or eminent domain

o Would be different if future use not current useo If restrict current use could restrict future economic

development b/c people would be worriedo Slippery slope if allow this one b/c distasteful to part of

community what cant be regulated Concurrence- public gain v private burden-3months not

enough time to sell for reasonable price or find new income should use reasonableness standard not amortization of non conforming uses is per se unconstitutional

o Factors-amount invested, nature of use, public detriment, character of surrounding land, amount time needed to amortize

2. Toys R US- only need substantial discontinuance to conform like not sell but maybe use as warehouse and then use again 2 years later.

o Reasonableness-nature of use, amount invested, number of improvements, public detriment, character of surrounding hood, amount of time needed to amortize investment, how long rule has been around

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o Zoning can promote non efficient of land so need flexibility-special exception or variancea. Variance-used to avoid unfavorable holding or constitutionality holding

1. Commons v westwood zoning board- Person wanted to build 4 bedroom house on only undeveloped land but lot too small under ordinance neighbors objected thought would not look good.

o Variance- to avoid undue hardship on owner of land (no effective use of land if variance not granted)-1. Owner must have made reasonable efforts to comply w/ zoning and exceptional hardship must not be self inflicted 2. Variance must not do substantial hardship public good and intent and purpose of zoning ordinance (even though neighbors objected)

o Bd. Cant base decision on size of house b/c did not violate any traditional zoning purpose of light, air or open space reflected in ordinance. They didn’t base decision on aesthetics or value of neighborhood. If they did house was closely conforming w/ other houses and values

o If no variance land would go to waste no utility b/c no one will sell extra land to conform

Special Exceptions- Ordinance can list special exceptions if fall within also need to prove not detract from public health safety or welfare. Since more predictable are regulated less than variance

2. Cope v Inhabitant of the town of Brunswick- P wants apartment and need variance . But discretion given to board are broad need to give board conditions to pass, cant just give broad discretion w/o a standard to limit + guide for special exceptions. So by enacting this broad discretion apartment is good. Was given: to make or not make zoning exceptions based on a Zoning Board’s assessments of health, safety, welfare and essential property characteristics could lead to selectivity in enforcement of the law

H. Expanding Aims (exercising the muscle) of zoning-a. Aesthetic regulation- nuisances, building height, spacing, and location- resolves (light

and air, avoid and control fires, prevent overcrowding, exclude offensive industries) (Majority)-aesthetic is part of public welfare Important in historic zoning

1. State v ex rel staynoff v berkely- D applied for building permit and though met all zoning regulation + ordinances except not uniformity and

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grotesque b/c it was denied b/c of unusual design. Are they unconstitutional too vague and not uniform standard for aesthetics only generally

o Ordinances meant to protect health, safety and welfare of existing expensive houses

o Grotesque would impair value + stability of surrounding property, experts testified. P didn’t take into account later provision saying if impair value + stability + welfare + happiness of community and that can be measured.

o Furthers this goal clearly b/c experts and community has traditional house while trying to build modern

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