Property Outline 01

7/31/2019 Property Outline 01

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o Finder has no title to property that is mislaid (in shop). McAvoy v. Medina (Customer of the shop owner placed his

wallet on the counter, but neglected to remove it. P found the wallet.)

Social policy an article would be more likely to get back into the possession of the original owner if the

shopkeeper is preferred to the customer.

Legal Reason Theoretically, the owner entrusted the property to the shop by leaving the item there.Therefore, owner has title.

Distinction b/t Hannah and McAvoy probably meaningless. Brooch was probably mislaid but the courtcould justify by saying that the owner of home never lived there so he wasnt in constructive possessionand didnt know it was there. Also, different jurisdictions rule differently.

Factors to consider: where item was found, who found it (employee or owner?), how was it lefto Employee/Agent

Finder/Employee usually can keep lost property assuming true owner doesnt claim it

English common law rule the principal or employer gets to keep lost property

Decided on a jurisdiction by jurisdiction basis. There may be overriding legislation

o Sum up - Finder of property acquires no rights in mislaid property, is entitled to possession of lost property

against everyone except the true owner (not all jurisdictions), and is entitled to keep abandoned property

Adverse PossessionOne who takes possession contrary to the possessory rights of another.

Permits one who owns title to property to lose title by inaction and allows someone who doesnt have title to get title,without buying the land

Guiding principle first in time does not usually apply

Rationale efficient use of property, encourage taking care of property, avoid problems where someone thinks he owns

land

Method: Owner loses right to sue/eject possessor once he satisfies all AP requirements.

Theories of Adverse Possession

o 1. Punitive sleeping theory if you own property and you sleep on your rights, you dont assert the rights, you

lose them. It is punishment for not asserting ownership rights on a piece of property

o 2. Reward earning theory if someone comes on the property and puts it to good use, and they do it for an

appropriate amt of time, then they should be rewarded. So you reward them with immunity to lawsuit.

In order to acquire title by adverse possession, possession must be actual, it must be under claim of title and the land

must either be enclosed or sufficiently improved. Van Valkenburgh v. Lutz (1952) (D occupies Ps land by building a one-bedroom shack on it, by cultivating a garden on it and by storing rubbish on it. D admitted that the land belonged to the P.Dissent it doesnt matter if he admitted it or not, he admitted it after the statutory period for AP had passed.)

o Prescriptive easement (gives trespasser the right to use a piece of property that they previously trespass on unlike

AP, not an exclusive right.

Requirementso 1. Actual entry giving exclusive possession

Entering must be un-permitted b/c if you recognize the right to property, have to recognize subordinance.

Clock starts running once you go onto anothers property

o 2. Open and Notorious entry that would put the owner on notice that the person is on his property

Possession need not be knowingly and intentionally hostile, but it must be notorious enough to give the true

owner actual or constructive notice of the encroachment. Manillo v. Gorski. (property owner sought (andfailed) to enjoin the alleged trespass of an adjoining landowner whose steps encroached 15 inches and whoclaimed title to the strip by adverse possession.)

Maine doctrine possession as an element of title by adverse possession cannot be based on mistake. It

must be a knowing wrongful taking.

Connecticut doctrine (French v. Peace) the very nature of the act (entry and possession) is an assertionof his own title, and the denial of the title of all others. Mistake is of no matter.

o 3. Possession must be adverse or hostile or under claim of right

It is not permissive must be on property acting as if he/she is owner of property

Rationale owner should know someone is on his property but person should also know that a person isacting on the property that is not consistent with the owners wishes owner should know that the person ison property treating it as if he were the owner

Claim of title is one way of expressing the requirement of hostility or claim of right on the part of an

adverse possessor


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Mental state

1. Objective standardMajority state of mind is irrelevant so long as you intend to claim the

land as your own

2. Good faith Standard can only satisfy element of claim of right if you mistakenly believe thatproperty you occupy is yours thought you owned it

3. Aggressive trespass standard (Maine Doctrine) only if you know the property is not yours,but you claim that it is yours

o Rationale cannot acquire by AP if you mistakenly occupied b/c if you knew it was

yours, you would not have occupied it.

o this is like a reward for possessing land and followed in distinct minority

o 4. The occupation must be continuous for the entire statutory period.

Land that is used in a customary manner(if such lands are used this way) is deemed to be used

continuously. Howard. It is not necessary that land be occupied continuously to vest title by AP. All thatis required is that the possession be of such quality that a third party would believe that the actual ownerwas occupying it.

Tacking between successive adverse possessors is established if there is a reasonable connection

between them (privity) Howard v. Kunto. (D had a house on and occupied land to which Howard had title)

Privity is established if there is any voluntary transfer from prior to subsequent possessor. Bydeed, oral or other writing as long as it is voluntary privity is established.

Time runs against the true owner from the time when adverse possession began, and so long as APcontinues unbroken it makes no difference who continues it as long as voluntary transfer.

There must be a voluntary transfer to establish privity.

Once an AP enters a piece of property, that persons possession must be interrupted by the trueowner, whoever that is. It doesnt matter that the owner of the property transfers the property to athird person.

Once AP enters the property and the clock cant be stopped by change of ownership.

o One an AP enters a piece of property, that persons possession must be interrupted by

the true owner, whoever that is to avoid possession. (prob. 2, page 150)

If O dies b/f A enters property and O had devised it to B for life and remainder to C. B dies and

then starts the clock running again when C takes possession (gets remainder).

Improvements and Encroachments

Buildings or fixtures erected without right, whether in good faith or not, became the

property of the landowner (Howard)

Modern tendency is to soften the impact of this rule on innocent improvers like Kuntos,either by granting them compensation equal to the market value of the improvements orpermitting removal of the improvements.

Occupying claimant or betterment Acts

If the encroachment is the result of an innocent mistake, courts tend to look at the relativehardships to the parties of granting or denying injunctive relief.

If the encroachment is willful or intentional, most courts issue an injunction requiringremoval of the encroachment regardless of the balance of convenience or relativehardships.

Color of Title (not essential to AP)

o Refers to a claim founded on a written instrument or a judgment or decree that is for some reason defective and

invalid, although not known (as where the grantor does not own the land conveyed by deed or is incompetent to

convey, or the deed is improperly executed.) Wrt AP: when you have a claim under color of title, if you occupy a part of what the deed gives you, you

have constructive possession of all. However, owner gets benefit of constructive possession if he lives onpart of property; but As actual possession of some part of that trumps the possession of the owner.

If 2 lots are conveyed by an invalid deed under color of title, and possessor of the deed adversely possesses

one lot, he doesnt adversely possess the 2nd, because the owner didnt have notice of Adverse Possession.

Disabilities mitigates the harsh doctrine of AP

Vary from jurisdiction to jurisdiction as does the length of time granted to the true owner.1. Insanity honored in most states2. Minor honored in every state3. Prison honored in most states


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Only relevant disability is the one that exists at the time the AP commences

Disability is immaterial unless it existed at the time when the COA accrued.

Have whatever is longer, whatever is left of SOL when the disability ceases or an additional 10 years.

Benefit of waiver goes to the true owner, whoever that true owner happens to be when the AP enters property. The heirs

disability is not at issue.

If heir is child, then his guardian can assert his ownership rights. Once Hs guardian asserts his rights, then H has a

disability. The guardian has 10 yrs to claim right of property if he does so, H owns property. That doesnt mean that anAP can come onto the property and begin to assert rights. Clock starts running again.

Cannot tack on disability of a transferee As a general matter, AP have no rights vis--vis (federal) governmental property (may be relief from rule in state or local.

Disabilities policy is not inconsistent w/sleeping theory b/c the disabled person is not negligently sleeping on his rights,something prevents him from asserting his rights. Wrt earning theory, it is problematic b/c tring to reward Ap for makinggood use of property and shouldnt matter the status of the true owner.


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Adverse Possession of personal Property

The statute of limitations is tolled if the owner of stolen chattel makes diligent efforts to locate and recover the lost chattel.OKeeffe v. Snyder. (Three of OKeeffes paintings were stolen from an art gallery. The thefts were not reported toanyone.)

Court gives the true owner the benefit of the Discovery Rule (B/f, the court of appeals said the COA occurred at the time of

the theft) once the true owner has actual or constructive knowledge of the missing chattelo 1. you have to know your property is missing (actual or constructive knowledge)

o 2. Know or should know you have a COA (court says you have to know who has the property). Only when you

know who has it, can you pursue the COAo 3. Must diligently pursue - You have to know that you have a cause of action

If you do not diligently pursue, SOL accrues from time of theft, in absence of fraud or theft.

o Court says that if you are diligently pursuing your goods, the SOL doesnt start yet

AP has to prove

o Open and notorious possession (have to know property is missing and know who has it)

o Aft establishing that, true owner has to prove that the true owner diligently pursued so sol is tolled

o If they cant prove they diligently pursued, then sol runs.

Here, NJ does away with the AP rule wrt personal property and applies the discovery rule. As a result, there is a shifting ofburdens, under old rule, burden was on the AP to prove the satisfaction of all the elements; under discovery rule, the burdenis shifted to the true owner who has to demonstrate that it gets to take advantage of the discovery rule and if it doesnt theSOL begins to run. True owner has to prove diligence to take advantage of the discovery rule

o Thief can acquire title to property if the owner knows he has it and if the owner fails to pursue diligently, the SOL

begins to runo This is a rule of quasi adverse possession.

o Discovery rule allows the true owner a little bit of extra leeway it defers the running of the statute

o Entire burden is on the true owner.

Voidable Title only applies to Chattel

Under UCC, a purchaser of property acquires all title that the transferor had the power to convey. If the transferor had goodtitle, the purchaser has good title; if the transferor has bad title, it cant convey good title to the transferee. In that case, thepurchaser would only acquire possession from the transferor then we have to apply the rules of AP or discovery rule:

o Exception 1 Conveyance when the transferor holds a voidable title - a person with voidable title, has the power to

convey good title to a good faith purchaser for a value (bona fide purchaser). True owner has no COA if the holder

of voidable title sells to a BFP.

Voidable title obtained when the true owner voluntarily transfers property to someone; however transfer

is based on some fraud in the transaction (like a bad check)

o Exception 2 if property is entrusted to someone who deals in such goods, the dealer/non-owner has the power to

convey good title (bicycle shop)

o Policy -Law does balancing act as between the BFP and the true owner who had the best opportunity to avoid this

situation?

Non-owner can good transfer title to BFP, but a thief cannot transfer good title, except within AP/discovery rule.

Property can be transferred by:1. will2. Intestate succession3. Deed

4. AP adverse possessor gets title aft sol5. Court decree6. Legislative Act

DeedsDevelopment

Interest in property can be broken up temporally (LE, remainder)

Livery of seisen physically transfer the property symbolically

Courts of law began to recognize the written transfer and it became simpler to write a document so these various types ofdeeds were developed. System developed to require writing under SOF.

Most predominant way to transfer real propertyTraditional / Central Elements

1. Premises


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Granting clause - Owner of property intends to transfer property to other person

Recitation of consideration

Description of property

2. Habendum Tenendum Clause to have and to hold describes the nature of the estate.3. Warranty Clause tells you about the strengths of the transferors conviction wrt property, provides potential liability for the

seller. Tells force of conviction as to quality of title.

Present Covenant

i. Covenant of Seisin promise by grantor that he does owns property to be conveyed. Seller says to purchaserthat he has the right to possess this property that he is conveying to purchaser. Once I convey it, youll have theright to possess this property

ii. Right to convey promise grantor has power and legal ability to convey property (different with seisin b/c rightto possess (wife) not the same as right to convey (power of atty.)

iii. Covenant against encumbrances guarantee that there no one else has an interest in this property there areno easements, mortgages or tax liens or rental agreements

Future Covenants

i. Covenant of Warranty/Covenant of quiet enjoyment The grantor covenants that the grantee will not bedisturbed in possession or enjoyment of the property by a 3rd partys lawful assertion of superior title. If granteeis disturbed the grantor covenants to defend and compensate for any loss sustained by the assertion of superiortitle. Seller is liable.

ii. Covenant of Further Assurances if there are any defects in the conveyance, owner will provide you withcorrected documentation

4. Testimonium In witness whereof (seller)5. Acknowledgement in most jurisdictions, a deed cannot be enforced without a notary

Categories of DeedsWhat caption of deed says is irrelevant, it is the text of the deed that matters.

1. General Warranty Deeds Grantor warrants that he will defend that recipients title against all claims, even claims that havearisen b/f the grantor received his title, and even if the title grantor received is totally invalid.

2. Special Warranty Deeds Grantor only covenants to grantee that he will defend title against anyone claiming title by, throughor under grantor.

3. Quitclaim deed As is transfer Grantor gives grantee what he has, but doesnt know precisely what he has. Special burdenon grantee b/c no indemnity is available. Still sufficient to convey good title, grantor retains no liability.

Freehold Estates (possession and seisen)1. Definitions

a. Freehold possession and seisen (ownership)i. Present

ii. Futureiii. Co-ownership

b. Heirs persons who survive the decedent and are designated as intestate successors under the states statute of descenti. A living person has no heirs (yet)

ii. Classes of kindred are usually preferred as heirs in the following manner: first issue; and if no issue, thenparents; and if none, then collaterals.

iii. Spouses are not considered heirs.

c. Issue Children and descendants. Sub-category of heirs

d. Primogeniture The eldest son inherited the land. If the eldest son predeceased the decedent, leaving issue, his eldestson or other issue represented him under complex rules. Only if there were no sons would the decedents daughtersinherit.

e. Ancestor parents usually take as heirs if the decedent leaves no issue.f. Collaterals all persons related by blood to the decedent who are neither descendants nor ancestors are collateral kin.

Subset of heirs

g. Escheat if person dies intestate without any heirs, the persons real property escheats to the state where the property islocated.

h. Can divide property by possession, by time, by geographically

i. Order of heirs if person dies intestatei. 1. issue

ii. 2. parents


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iii. 3. collateralj. Note: child is considered as in being from time of conception if later born alive for purposes of property law.

2. Present/current possessory estates

a. Fee Simple Absolute greatest estate in land; it is absolute.i. Cannot own more than a FSA all interests must add up to FSA

1. Fee potentially infinite durations2. Simple no limitations on inheritability3. Absolute cannot be divested

ii. FSA can have encumbrances (mortgage)

iii. No artificial/automatic end to it. can sell it to anyone chosen; after death, will go to heirsiv. At English CL FS transferred by conveying deed to A and his heirs

1. To A Words of purchase conveyance by deed or by will2. and his heirs Words of limitation indicate that the property can be passed by inheritance.3. And ones heirs means that it is possible for property to descend to ones heirs

v. At American law, granter is presumed to convey his entire estate unless something is said that indicates lessthan that

1. In most jurisdictions, if grantor makes a conveyance to A, it is presumed that A gets a fee simpleinterest in that property.

2. To A and his heirs: A has a FSA.3. Potential heirs have no present interest in the property.4. Will can only devise property testator held at time of death. (Dad dies devising all prop to mom; then

g-pa dies without a will; since dad is dead, prop goes to kids, not wife)

b. Fee Tail lessor estate than fee simple - conveyance to a person and his or her descendantsi. Typically created by the words to B and the heirs of his body, limited inheritance to lineal descendants of the

grantee. If no lineal descendants survived at the grantees death, the property either reverted to the grantor orher successors or passed to a designated remainderman.

ii. Any intervivos transfer aft original feetail will not thrwart reversion to the original grantor.

iii. Today most U.S. jurisdictions have abolished the fee tail and have enacted statutes under which any attempt tocreate a fee tail result in the creation of a fee simple.

c. Life Estates An estate that last either for the life of the owner or life of another personi. An estate for life is an estate that is not terminable at any fixed or computable period of time, but cannot last

longer than the life or lives of one or more persons. It may arise by operation of law or may be created by anact or agreement of the parties.

ii. Courts presume that a conveyance of real property in a will was intended to convey a fee simple estate, unless

contrary intent is demonstrated. White v. Brown (1977) (Jessie Lide died leaving a will stating I wish EvelynWhite (P sister in law to Lide) to have my home to live in and not be sold . . . My is not to be sold. Whiteclaimed FSA. Brown (niece)). Note: court probably didnt like 12 sobrinos coming out of woodwork to try to inherit the property.Court reached the result it wanted.

1. Rule of constructions - Courts only apply the rules of construction when there is some ambiguitywhere there is a statute to be interpreted.

a. Unless expressly that the testator is conveying less than all they have, assume that they areconveying entire interest.

b. Rule construes against partial conveyance in the will, we will construe against partial intestate(part goes to willed person and part through intestate succession )

c. Courts do not favor restraints on alienationi. Public policy goal is for people to convey their land and not limit

d. Court will attempt to implement intent of testator underlying principle.

iii. Valuation of life estate and remainder1. In ordering a sale of land courts must balance the interests of those whose have a present interest and

those with a future interest. Baker v. Weedon (MI SC 1972) (Jon Weedon left a LE to Weedon and aremainder to the Bakers. Weedon wishes to sell the land now to reap its value; Baker wishes to retainownership of the land to allow its value to increase.)

a. Must look at interests of all parties. Life tenant must not act to the detriment of theremainderman and vice versa.

b. Economic waste. See below.

2. Economic Waste - is relevant whenever 2 or more persons have rights to posses property at the sametime. Waste is conduct by life tenant that permanently impairs the value of the land or the interest ofthe person holding title or having some subsequent estate.

a. Voluntary Waste someone makes an affirmative act that results in the devolution in value


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b. Involuntary waste based on negligence failure to take reasonable care of the property.c. Legal (ameliorating) principle use of land is substantially changed but the change increases

the value of the land e.g. tear down a house and put up shopping center still consideredwaste b/c the property isnt being maintained for its current use.

d. Rationalei. Grantor intends that the life tenant use the land in a reasonable manner and that it

passes remainder to have it and near as possible unimpaired in its nature, characterand improvements

ii. One should not impose severe economic damage on the other.

Restraints on Alienation

Courts do not like restraints on alienation. When a restrain is absolute meaning you cant convey the property to anyone, it isalways unenforceable. Courts will allow for some restrictions on alienations but prohibit unreasonable ones. (e.g. ok if you dontwant to sell house to mean neighbor, it doesnt restrict that much). Policy want people to be able to freely convey land.1. Disabling restraint takes away from the owner the ability to transfer the property. This is null and void (could get injunction)2. Forfeiture restraint causes immediate forfeiture of title if transfer is attempted. As soon as the attempt is made, title to theproperty goes to someone else3. Promissory restraint grantee promises not to transfer his interest. It does not mean interest cannot be conveyed. If grantorcatches the transfer b/f it is complete, he might get injunction. If transfer is already complete, relief would be limited to damages.

3. Defeasable estatesa. 3 categories, contemplating a termination of the estate (3 types can apply too the three types of freehold estates)b. Fee simple estates of potentially infinite duration that can be terminated by the happening of a specified event. B/c

defeasble fees can result in forfeitures, courts will construe, where possible, a purported limitation as a mere declarationof the grantors purpose or motive for making the grant

i. Fee simple determinable estate (FSD) estate that will automatically terminate upon the occurrence of anevent or the satisfaction of a condition. Not only will the determinable interest terminate on the event thatsatisfies the condition, but the property will automatically revert to the grantor, the person who originallycreated the determinable interest.

ii. Fee simple subject to condition subsequent (FSS) an FSS can terminate upon the occurrence of the event.Interest can end upon the occurrence of the event or satisfaction of a condition. However, it only ceases whenthe grantor takes an affirmative step to reclaim the property. If grantor doesnt do so, the present possessor

retains propertyiii. Fee simply subject to an executory limitation (FSE) ends when a condition is met or occurrence of event when the event occurs goes to third party, not back to the grantor. It is called this whether the transfer to a thirdparty is automatic or whether it requires some affirmative action by the third party.

Present interest Future interest

1. (fee tail, LE, fee simple) Fee simple determinable- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Possibility of reverter2. FS subject to a Condition Subsequent- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - right of reentry (power oftermination)3. FS subject to executory limitation- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - executory interest (limitation)

c. Distinguishing b/t FSD and FSSi. Only where the grantor creates a possibility of reverter will he or his successors become possessory owners of

property immediately upon the breaking of the condition. Mahrenholz v. County Bd. Of School Trustees (Ill

1981) (the Huttons conveyed land to the school to be used for school purposes only. Subsequently, the schoolused the land for storage.)

1. Note: some state disallow intervivos conveyance of future interests except when conveyance (arelease) is to the person with the residual estate (current possessory interest).

2. Was determined to be a FSD with possibility of reverter then the issue is whether the classes ceasingsatisfy the condition. If

a. If determined to be FSS, then the Huttons retain right of re-entry, and if cessation of classessatisfies, then whoever holds that right of re-entry has to act on it. You cant simply sit backand assume you get the property; otherwise, it continues as an on-going possessory right.

3. Rationale courts prefer property held in most freely alienable estate


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ii. If grantor dies without will, there is difficulty in determining the heir to which the future interest (possibility ofreverter) would go. Public policy that encourages making property more freely alienable.

iii. AP: If holders of future interest arent aware condition occurred and dont exercise right of possession, APcommences.

iv. Many states have done away with these, but it is a trap for the unwary, but you may create one interest whenyou intended to create the other.

1. Hughes: the jurisdiction just needs to choose between one or the other.

Distinguishing between FSD and FSC since many use mixed language.

1. FSD: Durational Language: so long as, if the property ever, during the continuation

2. FSC: If condition is indicated, but if the property is used other than for . . . .then right of re-entryTo be absolutely clear, must identify interest explicitlyRule: Restraints on transfer can be valid if they are not so restrictive to amount to a restraint on alienation. If unreasonable transfer,it can be stricken.E.g. Mountain Brow Lodge No. 82 v. Toscano-Facts: A deed provided that a lot shall revert back to the grantor if the grantee, a lodge (P), either failed to use the lot (for lodgepurposes) or attempted to sell it.-Holding, the no transfer provision was stricken as a restraint on alienation; restriction on use (although narrow) provision wasupheld. Note: dissent says that the restriction was effectively a restriction on transfer.Prof agrees with dissent. Proposition of too narrow restriction is valid one but the application to the particular facts are bad.

d. Fee simple determinable (determinable fee) an estate that automatically terminates on the happening of a stated eventand goes back to the granter. It is created by the use of durational, adverbial language, such asfor so long as, while,

during or until. A fee simple determinable can be conveyed by the owner thereof, but his grantee takes the land subjectto the termination of the estate by the happening of the event.

e. Fee simple on condition subsequent (Right of re-entry) created when the grantor retains the power to terminate theestate of the grantee upon the happening of a specified event. Upon the happening of the event stated in the conveyance,the estate of the grantee continues until the grantor exercises her power of termination (right of entry) by bringing suit ormaking re-entyr. The following words are usually held to create it: upon condition that, provided that, but if, and if ithappens that.

4. Future Interests (note: under property law - anyone conceived and later born alive for purposes of property law is a life)

D Three types of future interests that can be retained by the transferor

1. Reversion follows LE or Leasehold - grantor conveys an estate in the land which is smaller than the one he owns and in orderto become possessory, that future interest must follow the natural termination of the preceding estate.

- If all interests do not equal FSA, there is a reversion- LE and R in FT add up to less than FSA, so there is a reversion.

- If possibility that all estates end such that no one has (present) interest, then there is a reversion.-

2. Possibility of Reverter must follow determinable interest. Retained by grantor. Becomes possessory immediately upon theoccurrence of the condition. Always cuts short the preceding possession

- In FSD or FSC, future interest (of holder or grantor) cannot be divested. With CR situation, future interest can bedivested.3. Right of entry always follows FSC - power of termination. Gives the grantor the right to forfeit the preceding estate upon theoccurrence of a condition, not automatic. It cuts short the preceding possessory interest.

Future interest held by the transferee

(1) Remainder

1. Future interest in favor of a transferee that is created at the same time the prior possessory interest is created2. Remainder can only follow a fee-tail or a LE and it must be possible for the remainder to become possessory at the terminationof the prior estate (prior estate can terminate anytime including on conveyance of the property).3. A remainder never cuts short the preceding estate it always follows the natural termination of the preceding estate

Vested (ready to become possessory when all prior estates expire)

(1) If given to an ascertained persons AND(2) If it is not subject to a condition preceding

Contingent (Contingent upon an event occurring rather than natural termination of preceding estates)

(1) If given to an unascertained person OR(2) If given subject to a condition preceding

(2) Executory interest a future interest in a transferee that can take effect only by divesting or cutting short another interest.1. Shifting E.I. - When one transferee (holder of EI), divests another transferee

-E.g. to A to life, then to Jones, but if Jones first son gets married, to Smith.


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2. Springing E.I. when the EI holder divests the original transferor. E.g. I give to Jones my property when Jones firstson gets married Springing EI to Jones b/c in order to take, Jones will have to cut short my FSA. I have current possessoryinterest in property and I maintain that until and when Jones son gets married.

a. Determining present value of future estatesi. Future interest does have some value it is the right to possess property in the future, but it also has current

cash value.

1. (minority rule) Proceeds from eminent domain proceeding should be divided between the holder of theFSD and the holder of the reverter. Ink v. Canton (1965) (facts: The descendants of Harry Ink

conveyed to the city of Canton land to be used for park purposes only. Subsequently, the state of Ohioinstituted ED proceedings against the land for a highway.)

a. (market value (as a FSD) park value = grantors money. Anything above and beyond thevalue of the land as a park goes to the remainderman.

b. Problemsi. If all interests do not equal FSA, there is a reversion

ii. LE and remainder in FT add up to less than FSA, so there is a reversioniii. If possibility that all estates could end such that no one has present interest, there is a reversion

iv. LE (or any other estate) followed by a CR cannot add up to a FSA so there is reversionv. LE + VR (FSA) = FSAvi. Reversion

1. OA for 20 yrs. A has term of years; O retains reversion.vii. Executory Interest

c. Executory Interest

i. O A for life and then to B is B gives A a proper funeral1. If a condition precedent can only be satisfied aft the natural termination of prior estate then B has EI

b/c he would cut off Os (by reversion) estate aft condition is satisfied.

ii. Holders have an EI when it cuts short an estate, even if cutting off occurs at the present holders death, when thepresent holder has an interest they could have willed or devised (p. 265, Prob. 2)

iii. If E has a child (also issue), and B is dead and A dies, the child gets interest too. (p. 265, prob. 2)iv. EI vests upon becoming possessory.

d. Remainder

i. Contingent

1. LE + CR is less than FSA, so reversion

2. Alternative CR if one CR becomes vested, it eliminates the other there is no way that both A&B to

satisfy the condition. (E.g. page 263, problem 2.)3. If condition is within the clause (inside commas), then interest is contingent on that condition. (p. 274,

prob. 1(b)). If condition outside the clause (outside commas), interest is condition (p.274, prob. 1(a)).4. Compare:

a. To A for life, then to As children and their heirs, but if at As death he is not survived by anychildren, then to B and heirs condition outside the comma so not contingent on survival.

b. To A for life, then to such of As children as survive: condition is within commas so it iscontingent on survival.

5. Always a reversion when the only remainders are CRs6. CR vests when it becomes vested.7. Rule from Shelleys case

a. At CL, CR were not favored, b/c it made conveying property more difficult. Several ruleswere instituted to make property more easily alienable

b. Rule makes land alienable one generation earlier.c. If an instrument creates a freehold estate in A and a remainder in As heirs, the

remainder becomes a remainder in fee simple in A.

d. If in a single document, a LE is given to a person and a remainder either in FS or in FT, isgiven to that persons heirs or the heirs of that persons body and the LE and the remainderare both either legal interests or equitable interests, the remainder becomes a remainder in thehands of the life tenant. E.g. To A for life, remainder to As heirs Remainder moves intothe hands of the life tenant.

i. Legal interest direct conveyanceii. Equitable interest interest conveyed in trust no legal interest but equitable right to

enjoy the interest.


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e. Requirements for applicability of Shellys Rule so that Remainder moves to Life Tenant:i. One document

ii. LE to one person and R to that persons heirs (or heirs of body in FT)iii. LE and R are both legal interests or equitable interests.

f. Examples (p. 285):i. To A for life, remainder to As children and their heirs Shellys rule is

inapplicable here b/c the gift is to As children and their heirs not to As heirs.

ii. To A for life, then to B for life, then to As heirs Shelleys rule applies

1. A has LE (+CR in FSA, due to Shelleys rule, contingent on ascertainingheirs)2. B has VR (LE)

3. O has reversion b/c FSA is contingent. A and B could renounce LE and theheirs were not yet identified.

4. Even if the interest is contingent only in the life tenants lifetime, he gainsthe ability to will, transfer or sell it away. And O still has reversion. Now,A has more say as to whom the property goes aft Bs death.

iii. O conveys to A for life, then to As heirs if A survives B.1. Rule applies so A = LE (+ CR (FSA) (vested in As heirs when A dies, if A

had survived B))

2. O has reversion, if A doesnt survive B.g. Rule in Shellys case has been abolished, but still lingers in some cases.

ii. Doctrine of Worthier Title (R or EI)1. Provides that when a grantor makes an inter vivos attempt to create either a remainder or an executory

interest in the class of his heirs, he or she creates no interest in his or her heirs but retains for himself areversion.

2. An inter vivos conveyance attempt to create a future interest in the grantors heirs is ineffective sograntor has a reversion.

a. E.g. O conveys to A and her life, then to Os heirs, the remainder of Os heirs is void and Ohas reversion, A has LE.

3. Policy justification designed to carry out the grantors intent.a. It is assumed that grantors seldom intend to create a remainder in their heirs that they cannot

change and therefore, the doctrine gives the grantor the right to change his mind by voidingthe remainder and creating a reversion in the grantor.

b. Makes property alienable earlier.4. Has been abolished in most states

iii. Vested remainder1. Ready to become possessory when all preceding estates expire

2. VR subject to open when other later born children could dilute of a vested remainder of the first.a. E.g. page 263 number 4.

3. Can devise a VR (FSA) even if it is subject to divestment and open. (p. 265, prob. 2)4. VR (FSA) can never be followed by a remainder, must be followed by EI.5. If have vested remainder, the VR divests the Os reversion.6. vested remainder can be subject to a condition subsequent, but not a condition precedent. P. 274 1(a)7. Subject to open means later children could be born8. Subject to partial divestment means there is an EI that could cut it off partially.

iv. Difference b/t CR and VR

1. Acceleration -a. VR accelerates into possession immediately upon termination of the preceding estate.

i. Natural termination is not considered to be condition preceding. Including if the lifetenant renounces the estate.

b. CR non-acceleration CR can only vest when

i. the condition is met orii. person become ascertained

2. Transferability

a. At early CL, VR were transferable intervivos, but cr were not transferable intervivos, except,CR holder could transfer his interest to the current possessor of the property.

b. Modern Rule: maj. of jurisdictions, VRs and CRs are freely transferable. Still a couple ofjurisdictions do not follow modern rule.


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3. Destructibility (CL rule abolished in states)a. VR are not destroyed b/c they are vested. Fixed right, doesnt wait for anything to become

vestedb. CR could be destroyed if it doesnt become vested at the time that it could become

possessory, on the termination of the preceding estate.

c. Maj rule today - both CR and VR are not destructible if person isnt prepared to takepossession at the termination. Still, a couple of jurisdictions may not follow modern rule.

4. Rule Against Perpetuitiesa. VR are not subject to RAP

b. CR are subject to RAPe. Rules furthering Marketability by destroying contingent future interests

i. Shellys Ruleii. Doctrine of Worthier Title

iii. Destructibility of Contingent Remainders1. CL if a CR did not vest at or b/f the termination of the preceding LE, it was destroyed

2. CR could also be destroyed by application of the merger doctrine if the LE and next vested estate inFS came into the hands of the same person, any intervening CR would be destroyed.

a. E.g. O conveys WA to A for life then to B and her heirs, if B survives A.i. A = LE

ii. B = CR (contingent upon B surviving A)iii. O = reversion (if B doesnt survive A)iv. If A conveys LE to O, Os reversion and LE would merge and Bs CR would be

destroyed b/c it had not vested by the time of convergence. O would have FSA.

v. If O conveys reversion to A, As interests (in LE and reversion) merge and CRwould be destroyed and at the point of merger, A has FSA.

3. Problems, page 289, prob. 14. Problems, p. 290, prob.

iv. Rule Against Perpetuities (p. 291)1. No interest is good unless it must vest (or fail to fest), if at all, not later than 21 years aft some life in

being at the creation of the interest. If it is not certain that the interest will either vest or fail to vest,then the interest is void at its creation.

2. An interest is void if there is any possibility, however remote, that the interest may vest more than 21years after some life in being at the creation of the interest.

a. Applies to CR and EI (also to cr (LE)), not to reversion

b. Technically, it also applies to vested remainders subject to open, but there is an exception tothat consumes the rule:

i. Under old cl, a vr subject to open became vested when the class was closed (parentwas dead) and all members of the class satisfied the condition precedent (all childrenare 21)

ii. Rule of convenience changed the rule - closed the class once any member of theclass became entitled to possession. This vests the interest earlier.

3. rule either validates (youll know whether it vests or fails) or invalidates (interest is void at outset)

4. To determine whether the RAP is validated, is you have to find a measuring or validating life. It is aperson who must be alive at the time conveyance is made b/c the person will be alive at the time of thegift. (we dont know whether the measuring life will satisfy the condition or not, but we will have ananswer within 21 years.)

a. 4 classes of people:i. the preceding life tenant page 292ii. the person who is named take the contingent interest

1. If the condition has to be satisfied by the validating life (during hislifetime), then RAP doesnt apply and the interest is good.

iii. anyone who can affect the identity of the takers

iv. anyone who can affect a condition precedingb. Requirements for validating life:

i. Must be born at time of conveyance

ii. Must be one of the classes above.

c. If the condition must vest or not vest within the life (or 21 yrs after) of one in any of theclasses above, RAP does not apply.


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5. Problems, p. 293 :a. 1. A= LE

i. B = CR (FSA) (continent upon reaching 30)ii. Validating life

1. preceding life tenant A is not validating life b/c if A dies right now, Bmay still never reach 30.

2. person named to take the interest - B has to reach 30 or not by the time hedies.

a. We dont know if B will satisfy the condition or not, but we willknow within 21 years of the end of the life in being.

iii. O = reversioniv. RAP doesnt apply b/c we will know if B is 30 or not when he dies so conveyance is

good.

b. 2. to A for life, then to As children for their lives, then to B if B is then alive, and if B is notthen alive, to Bs heirs.

i. A = LEii. As children = vr (LE), subj to open (if no kids, cr, subj to open)

iii. B = cr (FSA) (if alive)iv. Bs heirs = cr (FSA) (not vested b/c heirs are unascertained)v. Validating life

1. 1st gift - preceding life tenant (or affecting identity of takers)a. A affects the identity of the people in his class. Will know at As

death who As children are if A has no children when A dies,then well know.b. Applying the rule and it doesnt invalidate the first gift b/c at As

death, or 21 yrs aft, we know the identity of As children so thecondition is satisfied.

2. 2nd gift - B as validating lifea. Rule does not invalidate the transfer b/c we will know (or not

know) at the time of Bs death, whether he fulfilled the conditionof surviving As children.

3. 3rd gift Bs heirs condition: B has to die and outlive As childrena. B is validating life b/c he affects the identity of the takers and

affects the condition preceding.b. Condition for heirs: have to know who they are and will know at

the point B dies. We also have to know whether B has survivedAs children.c. Gift is valid b/c we have to know when B dies whether B survived

As children and if diesc. 3.

i. O = FSA, subj to EIii. Students = EI have to cut short Os interest

iii. Conditions: present members, admitted to the bariv. Measuring life

1. teacher no b/c do not know within 21 yrs of death whether it will vest ornot b/c people could pass the bar after 21 years.

2. student takers of the interest when the last student dies, you will knowwhether the

3. Interest is valid b/c you would know at the time of last students death,whether all have passed the bar.

v. For first child of A who is admitted to the bar

1. O = FSA, subj to divestment2. As child = EI (condition: first one to pass bar)3. Measuring life

a. Not teacher b/c a child of A could be born aft teachers death andpass the bar.

b. A cannot be validating life b/c his child could pass the bar morethan 21 years aft As death.

c. As child cannot be validating life b/c there is no child,


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i. But if a child were born, that child would be validatinglife b/c he would necessarily pass the bar or not pass thebar by his death or 21 years after.

4. Gift is invalid6. Modern Rule

a. Most jurisdictions have adopted revisions for RAP and it is usually wait and see period for 90days.

5. Concurrent Interests/Estatesa. Three types

i. Joint Tenancy -1. Two or more persons have separate, undivided interest in property, each has the right to use entire

property, but no JT has the right to deprive any other JT of use of the property. Survivorship rights.2. Tenants rights:

a. Separate, undivided interestb. Right to use entire property, but not exclude

c. Right to unilaterally sever by conveyance.3. All Four Unities required:

a. Interest ownership rights of each JT must be equalb. Possession each JT must have right to possess the entire propertyc. Time each JT must acquire his or her interest in the property at the same timed. Title All JTs must take under the same instrument. More than one instrument delivered at

same time is not sufficient.4. Survivorship right - Distinguishing feature of JT JT cannot pass by will or intestacy. When JT

dies, the other JTs get the property.a. Cannot devise an interest as a JT.b. Rule: A single joint tenant cannot obligate prop in a way that amounts to a detriment to the

other co-owners in JT.c. Can convey interest while alive which would break the JT.

5. Breaking JT

a. Any JT may unilaterally sever the JT by simply conveying his or her interest in the property.b. Party who to whom interest is conveyed and all the other JTs are now TC.c. Can only break JT by breaking one of the unities. (p. 337. prob. 3).d. Dying doesnt sever JTe. Divorce doesnt sever JT

f. Court has recourse to correct the harshness of the survivorship rule. A court in equity maylook at the other factors including contractual relationship and override rule.

g.ii. Tenancy in common

1. Each tenant has separate undivided interest in the property. They have right to possess entire property.2. Only unity required is the unity of possession3. No survivorship rights4. Interest of any TC can be inherited, passed by will or conveyed by deed.

iii. Tenancy in the entirety

1. Survivorship rights

2. Require all 4 unities and a 5th - marriage.3. Only spouses can take tenancy by the entirety. (however, some states allow same-sex or relatives to

hold property in tenancy in the entirety)

4. Neither tenant can defeat the survivorship rights of the other.5. Neither spouse may unilaterally sever the tenancy by the entirety.6. Many jurisdictions no longer recognize tenancy in the entirety.7. Possible ways to treat creditors of one tenant (in the entirety)

a. An estate by the entirety is not subject to the claims of creditors of only one of the spouses b/cneither spouse acting alone can transfer his or her interest. Sawada v. Endo (1977) (Kokichiand Ume Endo conveyed their property to their sons the same day that Kokichi got into anauto accident that injured the Sawadas)

b. Under Married Womans property Act, the interest of a husband or wife in an estate by theentireties is not subject to the claims of his or her individual creditors duing the joint lijnes ofthe spouses. B/f the husbands debtors could go after the husbands property and the wife


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could be stuck in CL, that was ok, there was nothing a wife could do to impair the interst ofthe husband.

c. The MWPA equalized it in three ways:i. Neither partys creditors can have any interest in the property (Sawada)

ii. Equalize by giving wife same rights as husband just as H could impair property, socould the wife

iii. Other jurisdictions, let creditor wait until one dies and if the creditor is a creditor ofthe survivor, then they are in luck.

8. At CL only real property could be held in estate in the entirety, and cash is considered pers prop.

b. Default estatei. CL presumption JT was presumptive sort of concurrent ownership if there was some ambiguity, JT wasdefault estate.

ii. Modern law presumption favors tenancy in common if person is less than clear about what she intends, itwill be tenancy in common

c. Problems i. Dont assumed just by words - For clarity, must sayJT, with right of survivorship. Most jurisdictions presume

TC if not clear. Saying JT might not be clear enough. Must say JT, with right of survivorship. (324, prob. 1)

ii. Prob. 2iii. Prob. 3, if they had TE, c gets undivided 1/2, then when the husband dies, A would get survivorship.

1. If husband conveys interest to another and then dies, wife gets prop. because he cannot convey right ofsurvivorship. If husband conveys to another and wife dies, the conveyee gets interest.

d. Effect of mortgage on JT: 2 theories

i. Lien theory if you give a mortgage, all you give to mortgagee is a lien (a claim secured by prop for paymentof a debt) on the property.

1. Mortgage does not sever a JT and the surviving joint tenant takes the interest of a decreased JT withoutbeing encumbered by the mortgage. Harms v. Sprague (1984) (As a favor to Sprague, Johnmortgaged his and Williams land, without telling William, and later devised everything to Spraguewhen he died.)

2. Cannot devise an interest in land if you are JT b/c you cant will a right of survivorship (something youdont have yet)

3. Mortgage doesnt sever a JT.

4. A mortgage will disappear if attached to a JTs interest and that JT dies b/f the other JT. But ifmortgagee (lender) forecloses b/f JT (John dies), the mortgage vests so he can demand sale of property

5. Policy: cannot be responsible for someone elses mortgage reflection of the idea that each JT will

have the right of survivorship. You should examine your risk b/f taking the risk, granting the mortgage(Simmons could have found out that it was a JT).

6. JT should know that their interest is free and clear, once they survive.ii. Title theory you give legal title to the mortgagee until the mortgage is paid. (remaining in dozen states

including GA); Here, a mortgage might break the JT.e. Termination of Co-ownership

i. Court can terminate JT and TC, but not TEii. Partition in kind

1. Rule: If a court wants to order partition in kind the following are necessarya. 1. it has to be practicalb. 2. It has to be equitable cant be to the detriment of one party to the benefit of the other.

i. Many courts will consider bests interests (highest valued use)c. If the above is not applicable then a partition by sale is applied.

iii. Partition by sale

1. A partition by sale should only be ordered if the physical attributes of the land in question and theinterests of the owners would be furthered are such that a partition is impracticable or inequitable.Delfino v. Vealencis (1980) (The Delfinos owned 99/144 of the property and wanted a residentialdevelopment, while Vealencis owned 45/144 and wanted to keep her garbage business on it.Held,partition by sale was not equitable)

iv. Default position (in this state) if partition is possible, then you should do it, courts dont favor forced sale ofproperty.

v. Ouster a cotenant has the right to use the entire property and if he does so, the cotenant (JT,TC) is entitled tonothing. However, if the possessing cotenant possesses by ousting, then he or she is responsible to pay theousted co-owners the fair rental value of his or her possession. Expressing an intent to use the property is not


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enough, must take affirmative step. So if attempt is made to go onto property and co-owner is ousted from theproperty, other co-owner owes half fair rental value.

1. The beginning of the running of the statute of limitations in cases of adverse possession; the liability ofan occupying cotenant for rent to other cotenants.

2. Policy nature of the ownership you have the right to use property so long as you dont infringe therights/ attempt of the other cotenant to use the property. Assumption is that the co-owner permits theuse until he seeks to assert right to use. Then co-owner in possession must share.

3. In the absence of an agreement to pay rent, a cotenant in possession is not liable to his or her cotenantsfor the value of his or her use and occupation of the property unless there is ouster of a cotenant.

Spiller v. Mackereth (1976) (Aft another tenant vacated their building, Spiller used it as a warehouse,and Mackereth demanded he pay rent or vacate half of the building)

4. A JT has the right to convey or mortgage his interest in the property, even if the other joint tenantobjects. Swartzbaugh v. Sampson (1936) (Mr. S leased part of some land for a boxing pavilion, butMrs. S, the JT, never signed the lease and wants to cancel.)

a. For 5 yrs, Mrs. is JT with Sampson, not Mr.b. Any JT has the right to possess all of the property and if they do, without ousting any other

JT, they arent required to pay an rentc. In this case, Mr. leased the 5 acres to a third party so Mrs. is entitled to .5 of the revenue.

Mr. must pay.

d. Options for termination (Schwartzbaugh v. Sampson):i. Accounting: Mrs. could sue Mr. for accounting and get half of actual rentii. Ouster

1. Sue Sampson for ouster. If Mrs. S proves ouster when Sampson resists herattempt to enter, she would only be entitled to 1/2 of the reasonable rentalvalue of the land from Sampson. She would not be able to remove him orthe boxing arena from the land.

2. Mrs. could try to oust Sampson and then would have to pay Sampson .5 fairmarket rental value of property

3. Try to get ousted by husbandiii. Partition in kind

1. if the court can partition in kind and do so equitably, the court will awardthe Mr. the part that is leased and has improvements on it and it wouldaward Mrs. The part that is unimproved and unencumbered by the lease.

2. Court could partition and give the boxing part to Mrs. and Sampson wouldbe out of luck for the 5 years

3. Court could also petition in kind wrt Sampson on the 5 acres. Would expirein 5 yrs when lease ends.

iv. Partition by sale1. Court could auction property and split the money. Sampson would be out

of luck2. Mrs. seeks partition by sale of leasehold (right to use land for 5 years).

Sampson gets half of that b/c he was the JT (for 5 years) and he would haveto pay Mr. 15.

vi. Dividing of property when marriage is terminated

1. division in case of divorcea. At termination of marriage, in vast majority of jurisdictions, marital property is divided by

equitable division meaning that the court decides whatever it wants based on its view ofwhatever is equitable. I some jurisdictions the rule of community property pertains, and therethe marital property is divided 50/50. (GA is equitable)

b. Educational degree as property

i. An educational degree is not usually considered property, and therefore is not subjectto division upon divorce. In re Marriage of Graham. (Flight attendant supportshusband through MBA school, covering 70% of their expenses, and aft he graduatesthey divorce. Trial court discounted his earning ability to present value and then wasto pay her over time (she was screwed). Appellate reversed.)

ii. Restitution - Reimbursement to the spouse who workediii. Minority view: advanced degree and enhanced earning degree as a martial asset and

they make provisions for it. (investment in human capital) (very few NY. Dissentin Graham)

2. Marriage ending in Death


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a. Dower

i. Upon death of H, W was entitled to dower. Meant that W would received a lifeestate in 1/3 of any parcel of land owned by the H.

1. Property had to be inheritable by the issue of the couple doesnt meanissue get property, just that they should get the property

ii. Right of dower attached to property whenever property was acquired whether bymarriage or attaining property during marriage

iii. Dower could only be released by the Ws consent if the husband transferred theproperty at anytime during the marriage whoever took the property took it subject to

the wifes dower rightsiv. At CL, applies to real property.

b. Courtesy - If W died first, the husband was entitled to courtesy. H was therefore entitled toLE in the entirety of each piece of property owned by W, not just 1/3.

i. Only attached upon issue of that marriage being born alive and upon the wifessurvival of that birth. The later death of the issue is irrelevant. Then courtesyattached.

ii. At CL, applies only to real property

c. Elected Share - Dower and Courtesy have been abolished in almost all states and have beenreplaced by spouses elected share.

i. In those states, the states have defined a percentage of the deceased spousesproperty o which the surviving spouse is entitled. Called elected share b/c thedeceased spouse might be more genera than what the deceased would have under jus

the elected share.ii. Applies to all inheritable property: real, personal and intangible.

d. Problems, p. 395.i. If O conveys BA to A&B and then O dies, and Os W didnt consent, dower attaches

to any property H owns during marriage so Os W has marriage.

ii. Only inheritable interests are subject to dower. Dower doesnt attach to JT, becausewhen one JT dies, the other gets all the property. It is not inheritable.

iii. If JT is broken by one co-owner conveying interest to C. It is now TC so dower ofCs wife attaches and she is entitled to 1/3 LE in the property if C dies.

iv. To avoid giving wife dower, could form corporation and own all stock b/c dowerdoesnt apply to pers property.

v. Life Insurance goes to the beneficiary not an inheritable interest.

1. He could retain a LE in BA and give a remainder to his daughter a. Or he could make lifetime transfers intervivos transfers

b. Or put all prop in a trust and retain for himself the life interest inthe property.

f. Benefits and Burden of JT and TC

i. Accounting Anytime a JT in property, leases property right to 3rd party, then his or her co-owners are entitledto an accounting and that accounting entitles them to pro-rata share of that lease. (E.g. Mrs. could sue Mr. foraccounting and get have of actual rent)

ii. Protection from caption1. When one cotenant pays the mortgage or taxes on property to reserve property from foreclosure that

cotenant is entitled to a pro-rata contribution from each of the other cotenantsa. Minority jurisdiction: if cotenant pays taxes and mortgage and is in sole possession of the

property, he is not entitled to contribution from other cotenants this is exception to rule.

iii. Repairs1. If one or more co-owners but less than all of them, pays for repairs or maintenance of the property,

they are not entitled to contribution from the non-paying co-owners. However, they are entitled to thecredit for the cost of repairs/maintenance if there is an accounting for rental or if the property ispartitioned and sold

2. If property is not rented and someone seeks partition and property is sold, you will get credit first forrepair/maintenance costs and then split pro rata the net proceeds of the sale.

iv. Improvement

1. If one co-owner makes improvements on the property, he isnt entitled to contribution from the otherco-owners nor are they necessarily entitled to credit for the costs of those improvements; however, tothe extent that the rental value of the property or rent received by the property is enhanced by theproperty, the improver gets to recover cots out of that enhancements


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Leasehold Estate

1. Term of years (estate for years)

o Fixed duration that is either specified at the outset or can be determined by the application of some formula

o Period can be longer or shorter than a year(s)

o Must be in writing if the term exceeds one year (SOF)

o Terminates automatically at the end of the period without a requirement of notice

o Neither party may unilaterally lengthen or shorten the term of years

o Not terminated at death of T or LL, except residential leases for tenant in some jurisdictions.

2. Periodic tenancy (not terminated at death of tenant)

o Has an initial fixed duration, however, unless either the LL or the tenant terminates the periodic tenancy, it automatically

renews for another term of years equal until someone provides notice and terminates it.

Limitation: irrespective of the initial term of the lease, any renewal of the lease cannot exceed a year in mostjurisdictions.

What is difference b/t term of years and periodic tenancy and sufferance.o The initial period can vary and it is set by the parties.

o Under CL, a year to year tenancy required a min of 6 month notice to terminate by either party

For periodic tenancy that was less than a year, the notice required was the lesser of 6 months or the period.

Notice requirements:

Under CL, year to year Periodic tenancy, had 6 months notice

Under CL, Less than a year, notice required is the lesser of 6 months or the periodo

If pass deadline b/f the end of period to give notice you are locked in for the next period. Notice was required to provide that the tenancy would terminate at the end of the period.

In most states, CL rule have been altered wrt notice periods

o SOF periodic tenancies for yr or more must be in writing

o If parties agree to a tenancy and it is unclear what theyve agreed to; in some cases, a periodic tenancy can be implied in

law if the parties dont agree to a specified term but they identify the time for payment of rent, periodic tenancy can beimplied that assumes the period per payment of rent.

o If you miss deadline to provide notice, may require that you provide notice again for the day you are legally free of

obligation.

o Limitation

3. Tenancy at will (terminated at death of tenant)

o Created when the parties expressly provide that either party may terminate at will whenever they want to

o

Or when a T that is given possession and parties dont agree on a time period and rent is not denominated as covering aspecific period of time.

o LL has two options:

1. Eviction (plus damages) or

2. consent (express or implied) to creation of a new tenancy.

o Terminated on death of LL or T, exception wrt residential leases.

(Tenancy in sufferance) (not traditional)

o When a tenant stays on property aft expiration of the lease term not viewed as trespasser until LL indicates he does not

want T on the property.

o Once a LL elects either to treat a holdover as a trespasser or to hold him to a new term, he may not change his mind.

Crechale v. Smith. (1974) (Smith held over past the expiration of his lease, Crechale decided to treat Smith as atrespasser. Later, he cashed his check, thus deciding to hold him over to a new term)

LL who accepts rent from his holdover will be held to have consented to a periodic tencnacy for the amt of thecheck.

If LL elects to treat as holdover, then would renew the lease as term of years with in some jurisdictions limitingit to a year.

General

o Death of Tenant

Under CL, death of party neither a term of years nor a periodic tenancy is terminated upon the death of thetenant, but death terminates the tenancy at will.

In many jurisdictions, a residential lease is terminated upon the death of the tenant.

Delivery of Possession

o English rule In every lease implied covenant to tenant that the premises will be available for possession.


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Policy No tenant wants to buy lawsuit, they want ability to reside. Should be LLs obligation at the outset toprovide inhabitable land.

o American rule absent express covenant to deliver possession, there is no implied covenant to deliver possession, only

title

Policy if the LL required to give actual interest, he wouldnt be able to rent something currently being rented.

LL only has a duty to deliver the right to possession of the premises to a tenant, not actual possession. Hannanv. Dusch. (1930) (when Hannas lease was to begin, Dusch failed to evict a hold-over tenant.)

Subleases and Assignments

o Terms:

Sublease: a transaction in which a T or lessee conveys an interest in the leased premises that is less than hisown or retains a reversionary interest.

Assignment: transaction in which a party conveys his entire interest in property to another.

Privity of estate: mutual relationship wrt a piece of land

Privity of contract: a relationship b/t parties that arises b/c they have entered into a contract with one another.

Sublet: to transfer a portion of the lessees interest in a lease to another.

o Sublease vs. assignment

If sublease, no privity of contract b/t Ernst and Conditt and no privity of estate. If sublease, the original partyretains an interest/reversion in land. Ernst could sue Rogers if Conditt didnt pay.

If assignment, privity of estate b/t Ernst and Conditt b/c no reversion held by Rogers (Rogers gave entire

interest in land to Conditt; at natural termination of lease, property would return to Ernst.)

Privity of estate if interest is assigned Privity of contract b/t Ernst and Conditt b/c of TPB relationship and privity of contract b/t Ernst and

Rogers but Ernst didnt want to sue Rogers.

Course can reach the decision on 2 basis:

1. Formalistic basis when lessee transfers his entire interest under a lease, it is assignment

2. Intention of the parties to determine whether assignment or sublease.

Courts here used a formalistic approach, not intent of the parties to determine it was an assignment (Rogers

retained no interest after new contract) Ernst v. Conditt (1964) (Rogers, the original lessee, transferred hisinterest to Conditt. )

o Problems:

P. 472, (c) LL must have privity of estate or privity of contract with T to sue for recovery of rent.

Subrogation if LL sues any T, that T steps into LLs shoes and can sue anyone LL could have sued

under privity of estate or privity of contract. Also may be privity of contract b/t T and T1 b/ec he agreed to assume all the covenants in the lease.

o Absent contractual language to contrary, a lessor may not arbitrarily and unreasonably withhold consent to assignment.

Kendall v. Ernest Pestana (1985) (D demanded increased rent in exchange for consent to assign a lease)

There is implied assumption that the consent wont be denied unreasonably, if there the lease contains consentclause.

1. Conveyance theory Assumes LL conveys lease interest to tenant and an unreas withholding of

consent would be a restraint on alienation.

2. Contract theory - Good faith requirement - court could read into a contract a requirement of good

faith so that he cant withhold consent

Commercial: majority says you can withhold consent with or without reason in commercial context.

Once you put commercial property in the flow of commerce, then cannot restrict assignment of lease

unreasonably (e.g. based on religious preferences or political preferences). There are also other considerations. E.g. Overall scheme of mall.

Not limited to direct economic or financial considerations (Walmart)

Residential: if lease says you cant assign without consent, there is no implication that the consent must

reasonable. Policy greater interest in the LL in having more discretion as to the person leasing his property.

Problems:

p. 483. (a)

Tenant Responsibilities and rights /Waste

o T has a duty not to commit waste on LLs premises. There is no clear cut std as to what is waste. It is a factual

determination by court.


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T is not permitted to make a fundamental change in the appearance or function of a piece of property even ifthat change would enhance the value of a piece of property.

T is generally not permitted to remove fixtures from the property or to fail to make normal repairs to theproperty (ordinary wear and tear to the property).

The duty to repair doesnt extend to rebuilding the premises if there is substantial catastrophe.

All this can be altered by an express contraction.

o This all may be considered waste.

o Tenants rights

The development of contract leases from conveyance leases. 2 theories:

Independent clauses (conveyance theory) when you view a lease as a conveyance of property the

obligations are both are independent from each other.

o E.g. if T doesnt pay rent, LL has to sue for non-payment but still must perform.

Dependant clauses (contract theory) if the one doesnt perform his duty, the other can stop

performing.

Constructive Eviction

Requirements for CE:

o 1. Any act or omission by the LL that renders the property substantially unsuitable for the

purposes for which they were leased or

o 2. Any act or omission by the LL that seriously interferes with the Ts beneficial enjoymento

the premises. Must be reasonable time period.

If either of the 2 things happen, T has been constructively evicted and is entitled toleave.

Even if no apparent ability to control the interference of the beneficial enjoyment,

the T may still have cause for CE. P. 517, prob. 2(a)

A T may vacate premises and terminate the lease if his quiet enjoyment is interfered with by the LL.

Reste Realty Corp. v. Cooper (1969) (Whenever it rained, the basement that Cooper was leasingflooded. Cooper vacated w/i reas time since there was ample evidence to find she acted reasonablyunder the circumstances.)

Advantages permits T to vacate if there is substantial intereference with use

Disadvantages o T must reach legal conclusion at the time they act. If incorrect, then T has breached and is

liable for the lease.

Partial actual eviction kicked out of part of property. T can abandon the property and stop payingrent.

Partial CE Assuming Ts overall use of the property is not unsuitably diminished, T would not be

allowed to vacate and would have to pay pro rata for any part they can use. If the part from which T isevicted is essential to the Ts use, then it is considered a total eviction and can cease paying rent for thewhole.

o In minority of jurisdictions, CE is treated like actual and if there is any eviction, the T cant

vacate if part of premiseo What is minority and majority rule for actual partial and constructive partial.

Illegal leases

Remedies/rights and duties of to LL

o Common Law duties:

Caveat emptor as is T doesnt negotiate with LL wrt the condition of the property. Exceptions:

1. Short term leases of furnished dwellings LL had obligation to ensure that the premises remainedlivable

2. LL had duty to disclose latent defects of which the LL was aware or should have been aware and Tis not (undiscoverable w. reas diligence by T)

o LL liability does not extend to obviously dangerous piece of machinery (manufacturer may

still be liable)

3. To the extent that there were common areas LL was obligated to care for them in a workman likemanner to the extent that LL makes repairs they are not obligated to make, LL was obligated to carefor them in a workman like manner

o

4. LL not permitted to make fraudulent misrepresentations re: the phys. characteristics of the property


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LL doesnt have responsibility for the criminal activity of a 3rd party, but if securing the common areas is anelement of his cl duty (or if he undertakes to make repairs, he must do so in a reason manner). P. 517, prob. (b).

Common areas If disturbance in common areas, LL must make reas efforts to rid the disturbance. Despitereas. efforts, the T may still have cause for CE if the disturbance substantially interferes with the premises andthe intended purpose of use.

LLs responsibility to common areas varies depending on the leases description and extent of commonareas.

o If T defaults

Use of self-help

CL: LL could use self-help to retake land under certain circumstances (peaceful)

o 1. the LL is legally entitled to possession, such as when T is a hold-over

o 2. LLs means of entry are peaceable. Must take property voluntarily to be peaceable (if T

takes gives up property voluntarily then LL can take peaceably)o Policy to discourage LL from doing things that might erupt in violence or in non-peaceable

situation.

Modern Rule: A landlord must use summary proceedings (judicial remedies) and may not use self-help if T is in default. Berg v. Wiley (1978 MN SC) (Wiley tried to use self-help (hanging on awningand changing the locks) after Berg breached the lease. Ct adhered to the CL for Berg (means notpeaceably-voluntary transfer), but adopted new standard prospectively)

o Several jurisdictions retain self-help, but in those peaceable entry is required (Peaceable is not

defined in same way)o Judicial mechanisms for LL to get hands on prop immediately when T is destroying property

o Policy: discourage LL from doing things which might result in violence

o Restrictions on residential leases tighter than commercial leases.

o If T abandons property or surrendered the premises

LL has a duty to use reasonable efforts to mitigate damages (leases more like contracts)

A LL is under a duty to mitigate damages by making reasonable efforts to re-let an apt wrongfully

vacated by the tenant. Sommer v. Kridel (1977) (Sommer failed to make efforts to re-let an apt whenKridel abandoned it. Broken engagement and LL turned down perspective and sued K for all rent. 2cases)

o LL must have some indication that the T abandoned. Riverview.

o Burden is on LL to prove that he mitigated b/c he is in position to do so. Riverview.

o Reasonable efforts are putting apt back on market same as other apts.o Policy: efficient use of land and resources

If mkt price decreases and during time LL was attempting to mitigate damages, T owes LL thedifference. LL is entitled to recover full amt under lease.

o LL keeps excess rent

Surrendering the lease if the T surrenders the lease and the LL accepts, then the T has no future obligationsunder the lease (not even future rent) LL is entitled to damages for the breach including decrease in marketvalue. T has no future obligations under the lease if LL accepts surrender.

If LL doesnt accept surrender, still duty to mitigate and LL does this by renting to another T. If that Trents for lower, the first T still on the hook. If that rents at higher rent, first T is entitled to differencebut is still liable for whole lease term. At that time, the LL can release the first T and then first T is noton the hook and LL is responsible.

If LL accepts surrender, no going back.

Illegal Leases

o Illegal lease must rest on a substantial code violation that existed at the time the lease was entered into. Minor technical

violations and violations of which the LL had neither actual nor constructive notice do not render a lease illegal.

o T can claim illegal lease while continuing to occupy the premises. Abandonment is not required. However, T is

required to pay the fair rental value of the property during that occupancy (but not more than original amt). Between CEand illegal lease, T is exposed to less liability with illegal lease claim.

o Not waivable

o A T at an illegal lease is a tenant at sufferance.

Warranty of Habitability


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o The rental of any residential dwelling unit contains an implied warranty, whether oral or written, stipulating that the LL

will deliver over and maintain, throughout the period of the tenancy, premises that are safe, clean and fit for humanhabitation. The warranty cannot be waived. Difficult to define. Habitability is determined on a case by case basis.

Hilder v . St. Peter (1984) (D leased an apt unfit for habitability to Hilder (P). Though Hilder informed St. Peterof these defects, he failed to remedy them.)

o Code violation enough are not alone, T still needs to demonstrate that health and safety are compromised b/c of the

condition.

o Most jurisdictions recognize the warranty of habitability

o Breach of warranty occurs even if it is not LLs fault. E.g. garbage strike. P. 528(4)(a).

o Policy: As a society, we dont want people living in unsafe or unhealthy environment.o Process:

When breach occurs, T must give notice to LL and give the LL a reas opportunity to rectify the problem

If LL fails to fix the problems remedies available are:

1. Sue (for specific performance, damages)

o Computation of damages: must look at fair value of rental property w. the problem. In Hilder

fair rental value was determined to be $0. Other damages (kids got sick, sicknesses, etc) andpunitive damages also available.

2. Self-fix it themselves and offset price against rent that accrues. Doesnt mean T can stop payingrent.

3. T could vacate and cease paying rento History of LL/T relationship

Began with caveat lesses T could only Sue LL if there were actual eviction Them, T could sue LL and then leave in case of CE

Then jurisdictions began to recognize illegal lease offense when apt wasnt up to code (unwaivable)

Then, property doesnt provide safe and healthy place to live, implied warranty of habitability (unwaivable-though practically, a T can waive these by failing to assert his rights.

Discrimination and Rental Housingo Statutes:

Civil Rights Act (1866) 1982 All citizens of the U.S. shall have the same right, in every State and Territory,as is enjoyed by white citizens thereof to inherit, purchase, lease sell, hold, and convey real and personalproperty

Bars all racial discrimination, private and public in the sale or rental or property

Fair Housing Act 3604

Unlawful to discriminate based on race, religion, gender, handicap (incl. AIDS), familial status,national origin, but not against marital status or sexual orientation or lawyers. Familiar status includesanyone with kids.

Distinguishing the two: The 1866 law is narrower than FHA b/c reaches only racial discrimination, notdiscrimination in the provision of services and facilities, and does not prohibit discriminatory advertising; it isbroader in that it contains none of the exemptions found in the FHA (and 1866 had no cap on damages)

o In private home, can rent to whomever you chose, but Fair housing Act says its unlawful to print or publish an ad that

indicates any preference limitation or discrimination. E.g. ad that says apt in private white home is discriminatory. P.438. If just private home then violation of Civil Rights Act (1966) b/c she discriminated, but not FHA, becauseexemption.

o Proving discrimination in housing

Burden of proof

1. Initially, the P has the burden to prove they are in the protected class and have prima facie case:o 1. Member of statutorily protected class

o 2. Applied for Rent

o 3. Qualified to rent

o 4. Apt was available at the time they were seeking to acquire it

o 5. Denied the rental

2. Now, BoP shifts to the D to show they had some permissible reason for not renting

o Must explain actions to show that there was no discriminatory intent. If choose not to

respond, lose.

3. Now, BoP shifts back to P who must prove that Ds reason was a pretext and the real reason wasbased on a discriminatory intent.


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o Housing providers can defeat discrimination claims by showing legit reasons for refusing to

rent, and factfinders are allowed to inquire into the providers subjective intent in questioningg prospective applicants. Soules v. U.S. Dept of Housing and Urban Development (1992)(A single mother sued for discrimination aft being denied the opp to apply for an apartmentbased on her family status.)

Disability discrimination:

Amendment to FHA to include people with disability as a protected class in 1988

o Rule: When one has a disability, it is discriminatory to refuse to make reasonable and

necessary accommodations for the people

Often numerous laws, regs, that affect a particular set of facts. Those laws may require different levelsof proof so important to discern which remedies appropriate under each law.

Accommodations must be reasonable and must take both parties needs into account. Bronk v.

Ineichen (1995) (2 deaf ladies desired to house a dog in the apt, but prohibited by L. Held, error injury instructions b/c no clarification b/t state and fed laws and different standards)

Tenants Rights

Rent control usually seen as causing more trouble than goodo Pros: prices are more affordable for lower income people

Protects renters from LLs capricious price increaseso Cons: No incentive to provide housing if cant earn money.

Economists think it is counter-productive

Con right to safe and healthy housing?

Public housing Housing subsidies seem to

o Pros: affordable housing

o Cons:


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Land Use Controls

Servitudes Private land use controls - Limited non-possessory interests in property which binds or burdens one piece ofproperty for the benefit of a person or another piece of property.

o Types:

Easements

Profits

Licenses

Real Covenants

Equitable Servitudes

o Positive Easements

Easement created by written instrument gives a person the right to come onto the land of another person. As a generalmatter, being an interest of land, must comply with SOF, meaning they have to be in writing. Exceptions: fraud, part-perf and estoppel.

Remedy: injunction or damages.

An easement can have a duration comparable to any of the possessory estates. An easement can be in FS or for

life, or for a term of year.

o Easement is not revocable.

There are occasions in which easements are createdby writing, implication or by prescription.

A grantorcan reserve an easement in property for a person other than the grantee. Willard v. First Church of

Christ, Scientist (1972) (McGuigan sold Petersen a lot with an easement allowing nearby church-goers to park on

it, but Petersen sold it to Willard w/o mentioning the easement.)o Rejected CL Rule 2 parties to the conveyance, the grantor and the grantee. The CL rule: when 2

parties conveying land, interest cannot be reserved for a 3rd party.

o Many jurisdictions have abandoned the CL rule and adopted this rule, focusing on thegrantors intent.

Here, if you did away with the easement it would be inequitable b/c the demonstrated intent of the partieswas to provide rights to the 3p.

Rationale for intent rather than CL

Inequity would have resulted by virtue of the discounted price that Peterson paid, acquiring a FS

subj to the encumbrance.

Willard could have researched the deed and discovered the encumbrance. Or Buy Title Ins.

Peterson violated a covenant b/c he falsely represented that the property was free fromencumbrance, when indeed it was encumbered. So Willard can sue Peterson for damages.

Willard could not show reliance b/c he would have to say that he knew about the attempt and thathe knew the CL rule precluded such a transfer. But he didnt know about the easement

o Possible drafting techniques to avoid CL problem:

1. Sell lot to 3p (church) with understanding that church sell it to other parties (Peterson witheasement)

2. Directly convey an easement to the 3rd party (church) and then convey the property to buyers

(Peterson or Willard) with the deed already encumbered.

3. Retained easement for self and then later transferred it to the church.

Categories of Easements:

Appurtenant Easement (belongs to the land) benefits the dominant tenement and burdens the servient tenant.

An easement always benefits land. Benefits dominant party b/c the owner has the right to enter into the servientland. Attaches to the land. An easement benefits dominant tenement in the use of his or her land.

o

Dominant tenement is the propertye being benefited and servient tenement is the property being burdened.o In Willard, it was an A easement but could make argument for in gross b/c the grant was vague.

Easement in Gross (belongs to the person) runs to a person and burdens the servient tenant but there is no

dominant tenant. Safe if specify person or argument by name, otherwise arguable, A easement.

Positive Negative

Appurtenant Easements Runs with land and allows use Runs with land and restricts use

Easements in GrossRuns with person and allows use Runs with person and restricts use.

Licenses A license is permission given by the occupant of the land allowing the licensee to do wsome act that otherwise would

be a trespass. (E.g. p

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