REAL PROPERTY: BAR CHECKLIST PRESENT ESTATES 1) Introduction

a) What Language Creates the Estate?b) Distinguishing Characteristics?

i) Devisable—pass by willii) Descendible—pass by intestacyiii) Alienable—inter vivos transfer during holder’s lifetime

c) What Future Interests?

2) Fee Simple Absolute

a) Creationi) “O to A”ii) “O to A and his heirs” (no longer needed)

b) Distinguishing Characteristicsi) Absolute ownershipii) Potentially infinite durationiii) Freely devisable, descendible, and alienable

c) Future Interesti) Noneii) O gave away everything he had

3) Fee Tail

a) Creation: “O to A and the heirs of his body”

b) Distinguishing Characteristicsi) Fee tail passes to grantee’s lineal blood descendants no matter whatii) Abolished everywhereiii) Becomes a fee simple absolute when one tries to convey a fee tail

c) Future Interesti) None today; O gave away everything he had (because a fee tail is a FSA)ii) Historically

(1) Grantor got a reversion(2) Third party got a remainder

4) Defeasible Estates (Three Types)

a) Two Rules to Note:

i) Words of mere desire, hope, or intention are insufficient to create defeasible fee(1) Courts disfavor restrictions on the free use of land(2) Court will not find a defeasible fee unless clear durational language is used

ii) Absolute restraints on alienation are void (“O to A so long as she never attempts to sell” is void)(1) Ban on the power to sell or transfer(2) Not linked to any reasonable time-limited purpose (“. . . so long as she waits till 2003

when title will be clear” is valid because limited by time and reasonable) b) Fee Simple Determinable

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i) Creation(1) Grantee must use clear durational language

(a) O to A so long as . . .(b) O to A during . . .(c) O to A until . . .

(2) If the stated condition is violated, forfeiture is automatic

ii) Distinguishing Characteristics(1) Freely devisable, descendible, and alienable but(2) ALWAYS subject to the condition(3) Can’t convey more than what you have

iii) Future Interest(1) Grantor has a possibility of reverter(2) F S D P O R—Frank Sinatra Didn’t Prefer Orville Redenbacher

c) Fee Simple Subject to Condition Subsequent

i) Creation(1) “O to A, but if X event occurs, grantor reserves the right to reenter and retake.”(2) Clear durational language and(3) Must carve out the right to reenter

ii) Distinguishing Characteristics(1) Not automatically terminated(2) Grantor has the prerogative to terminate if the stated condition occurs

iii) Future Interests: Grantor has Right of Entry/Power of Termination

d) Fee Simple Subject to Executory Limitation

i) Creation: O to A, but if X event occurs, then to B.

ii) Distinguishing Characteristics(1) Same as fee simple determinable(2) If condition is broken, automatic forfeiture in favor of someone other than grantor

(third party)

iii) Future Interests: Shifting executory interest

5) Life Estate

a) Shorthand Rules

i) Holder can transfer life estate but only a life estateii) Automatic transfer when the life tenant diesiii) Taxes and water right fees run with the landiv) Waste Rules

b) Creation

i) Explicit lifetime terms; Never in terms of years (“O to A for 4 years” is not a life estate)(1) O to A for Life(2) O to A for the life of B (life estate pur autre vie)

c) Distinguishing Characteristics

i) Life tenant is entitled to all ordinary uses and profits from the land

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ii) Waste Doctrine: Life tenant cannot commit waste—anything harming the future interest holders

(1) Voluntary/Affirmative Waste(a) Defined : Actual overt conduct causing a decrease in value (e.g., destruction of

property)(b) General Rule : Life tenant cannot consume or exploit natural resources on the

property(c) Exception : PURGE

(i) Prior Use—before the grant, land was used for exploitation (Open Mines Doctrine)

(ii) Reasonable Repairs—life tenant may consume natural resources for reasonable repairs and maintenance of the premises

(iii) Grant—Life tenant was expressly granted the right to exploit the land(iv)Exploitation—land is suitable only for exploitation

(2) Permissive Waste/Neglect(a) Land is allowed into disrepair or(b) Life tenant fails to reasonable protect the land(c) Life tenant must maintain the premises in reasonably good repair (d) Must pay all ordinary taxes

(i) Income/profits on the land—pay taxes relative to the income/profit(ii) No income/profit—pay taxes to the extent of premises fair rental value

(3) Ameliorative Waste(a) Generally : Can’t do anything that will enhance the property’s value(b) Exception : all of future interest holders are known and they consent

d) Future Interestsi) Grantor gets a reversionii) Third party gets a remainder

FUTURE INTERESTS 1) Grantor’s Future Interests

a) Possibility of Reverter: Follows a Fee simple determinable ONLY

b) Right of Entry/Power of Termination: Follows a Fee Simple Subject to Condition Subsequent ONLY

c) Reversion (Leftovers): Follows Everything Else

2) Transferees: Future interest held by anyone other than the grantor is a remainder

a) Remainders: Either Vested or Contingent

i) Defined(1) Future interest created in a grantee(2) Capable of becoming possessory upon the expiration of a prior possessory estate(3) Created in the same conveyance as the prior possessory estate

ii) Remainderman (Sociable, polite, and patient)(1) Always accompanies a preceding estate of known, fixed duration (usually a life

estate)(2) Never follows a defeasible fee and cannot cut short or divest a prior transferee(3) If present estate is defeasible estate, future interest is never a remainder

b) Vested Remainder

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i) Defined(1)Created in an ascertained person and(2) Not subject to a condition precedent

ii) Indefeasibly vested Remainder(1) No conditions or strings attached(2) Remainderman is certain to acquire an estate in the future(3) O to A for life, remainder to B. A is alive and B is alive. B is certain to get the

remainder because no strings are attached. If B predeceases A, B’s heirs get the remainder.

iii) Subject to Complete Defeasance (Subject to Total Divestment)(1) Remainderman exists(2) No condition precedent BUT(3) Condition subsequent(4) Use the Comma Rule: O to A for life, remainder to B, provided, however, that if B

dies under the age of 24, then to C. A is alive. B is 20 years old.

iv) Subject to Open

(1) Defined(a) Remainder is vested in a group of takers(b) At least one is qualified to take possession(c) Each member’s share can be decreased because additional takers not yet

ascertained can still qualify as class members(d) O to A for life, then to B’s children. B has two kids, D and E. If B has another kid, D

and E don’t get as much.

(2) Classes must be open or closed(a) Open: possible for others to enter (see above example)(b) Closed: when any member can demand possession (when A (life tenant) dies or

when B dies)(c) Exception: Womb Rule

c) Contingent

i) As yet unborn or unascertained person (1) O to A for life, then to B’s first child. B has no children(2) O to A for life, then to B’s heirs. B’s alive. B can’t have heirs until he’s dead(3) O to A for life, then to those children of B who survive A.

ii) Subject to a condition precedent(1) Prerequisite must occur before future interest attaches(2) Appears before the language creating the remainder(3) O to A for life, then, if B graduates college, to B; B is a freshman in college.(4) O to A for life, and, if B has reached the age of 21, to B; B is 19.

iii) Rule of Destructibility of Contingent Remainders(1) Common Law: contingent remainder destroyed if it was still contingent at the time the

preceding estate ended(2) Today: abolished; if condition not satisfied, O or O’s heirs hold the estate subject to the

remainderman’s springing executory interest (gets it once condition satisfied)

iv) Rule in Shelley’s Case(1) O to A for life, then, on A’s death, to A’s heirs. A is alive. (only fact pattern)(2) Common Law

(a) Present and future interest would merge and A would have a FSA

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(b) Applicable even in the face of a contrary grantor intent(3) Today

(a) Abolished(b) A has life estate(c) Contingent remainders in the unknown heirs(d) O has a reversion

v) Doctrine of Worthier Title (Rule Against a Remainder in Grantor’s Heirs)(1) O to A for life, then to O’s heirs. O is alive(2) Contingent remainder is void(3) A has life estate; O has reversion(4) Rationale: promote free transfer of land(5) Rule of construction, so grantor’s intent controls

d) Executory Interest

i) Defined(1) Future interest created in a transferee (third party)(2) Not a remainder interest(3) Takes effect by cutting short another person’s interest (shifting) or the grantor’s

interest (springing)

ii) Shifting(1) Always follows a defeasible fee(2) Cuts short someone other than the grantor(3) O to A and her heirs, but if B returns from Canada this year, to B and his heirs

iii) Springing(1) Cuts short the grantor’s interest(2) O to A, if an when A marries. A is unmarried. A has a springing executory interest.O

has a FS subject to A’s springing executory interest.

RULE AGAINST PERPETUITIES 1) Rule

a) Future interest is void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life

2) Approach

a) What interest has been created?

i) Applies only to (1) Contingent remainders(2) Executory interests(3) Some vested remainders subject to open

ii) Does not apply to (1) Grantor Future interests (Possibility of Reverter; Right of Entry; Reversion)(2) Any indefeasibly vested fee(3) Any vested subject to defeasance

b) Identify the conditions precedent to the vesting

c) Find a measuring life (relevant life)

d) Is the interest certain to vest within 21 years of the death of the measuring life? If yes or no, void

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3) MBE Shorthand Rule

a) Last person mentioned by proper name, and all prior parties, take

b) Next subsequent person, not mentioned by proper name, takes

c) All additional parties lose and property reverts back to the grantor or grantor’s heirs

4) Bright Line Rules

a) Gifts to an open class conditioned on the members surviving beyond 21 years violates the RAP (bad as to one, bad as to all). Entire class gift is void

b) Executory interest with no time limit is void under RAP

c) Exception: Charity to Charity does not violate RAP

5) Reform Rules

a) Wait and See: Determine the facts as they now exist at conclusion of measuring life

b) 90 Year Rule

c) Both: Cy pres applies (as near as possible)—if given disposition violates the RAP, court may reform in a way that most closely matches grantor’s intent while still complying with the rule

d) Both: court will reduce any offensive age contingency to 21 years of age

CONCURRENT ESTATES 1) Joint Tenancy

a) Rules

i) Two or more own the estateii) Both with right of survivorship: where one joint tenant dies, share passes automatically

to surviving joint tenants iii) Can transfer during lifetime but not devisable or descendible (because the right of

survivorship)

b) Creation

i) The Four Unities (T-TIP and the Right of Survivorship) (1) Time (2) Title(3) Interests(4) Possess the Whole(5) Grantor must expressly state “the right of survivorship”

ii) Straw Man: Convey to a fake party and have that party convey a joint tenancy backc) Severance SPAM

i) Sale

(1) Joint tenant can sell or transfer her interest during her lifetime(a) Buyer becomes a tenant in common because 4 unities are lacking(b) Joint tenancy remain in tact as to the non-transferring joint tenants

(2) Joint Tenant Enters into Contract with Another for Sale

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(a) Severs the joint tenancy(b) At the time the contract is entered into (c) Equitable conversion

ii) Partition

(1) By voluntary Agreement: Allowable, peaceful way to end relationship

(2) Partition in Kind(a) Judicial action (b) Physical division of property(c) Must be in the best interests of all parties

(3) Forced Sale(a) Judicial action (b) Land is sold (c) Sale proceeds are divided proportionally(d) Must be in the best interests of all parties

iii) Mortgage

(1) Minority Title Theory of Mortgages: Execution of a mortgage or lien severs the joint tenancy as to the encumbered share

(2) Majority Lien Theory: Mortgage does not sever the joint tenancy

2) Tenancy by the Entirety

a) Rulesi) Protected marital interest between husband and wife ii) Right of survivorship

b) Creationi) Husband and wife become fictitious one personii) Right of survivorshipiii) Presumed in any conveyance to a husband and wife unless otherwise clearly

stated

c) Co-Ownership Rightsi) Creditors of one spouse can’t touch the tenancyii) Unilateral conveyance to a third party cannot defeat the right of survivorship

3) Tenancy in Common

a) Definedi) 2 or more person with ii) No right of survivorship

b) Three Featuresi) Each co-tenant owns an individual partii) Each has a right to possess the wholeiii) Each interest is descendible, devisable, and alienableiv) No survivorship rightsv) Presumption favors tenancy in common

4) Rights and Duties of Co-Tenants

a) Possessioni) Each co-tenant is entitled to possess and enjoy the wholeii) Wrongful exclusion of another co-tenant is a wrongful ouster

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b) Rent from Co-Tenant in Exclusive Possessioni) No ousterii) Co-tenant in exclusive possession iii) Not liable to the other co-tenants for rent

c) Rent from third partiesi) Co-tenant who leases all or part of the premises to third partyii) Must account to co-tenants with the fair share of rental income

d) Adverse possessioni) General Rule : Adverse possession does not apply to gain the interest of the other co-

tenantsii) Exception : ouster

e) Carrying costsi) Each co-tenant is liable for fair share of carrying costs

(1) Taxes(2) Mortgage interest payment

ii) All based upon undivided share that he holds

f) Repairsi) Repairing co-tenant has the right to contribution for necessary repairsii) Must notify the others of the need for the repairs

g) Improvementsi) No right to contribution for improvementsii) At partition, co-tenant is entitled to a credit equal to any increase in value caused by her

effortsiii) “Improver” bears full liability for any decrease in value caused by her efforts

h) Wastei) Co-tenant must not commit wasteii) Co-tenant can bring an action for waste during the life of the co-tenancy (voluntary,

permissive, and ameliorative)iii) Liable on the whole thing

i) Partition (See C.ii Above for Partition Rules): Joint tenant and tenant in common has right to bring action for partition

LANDLORD/TENANT LAW 1) Tenancy for Years

a) Lease for fixed, determined period of time (e.g., one day, one week, one month, 50 years)b) Termination date is known from the startc) No notice necessaryd) Term of Years greater than one year must be in writing (oral = implied periodic tenancy)

2) Periodic Tenancy

a) Creationi) Lease for successive intervals until landlord or tenant gives proper notice of termination ii) Can be created expressly (e.g., week to week, month to month, year to year) iii) Implied Periodic Tenancy

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(1) No mention of duration but provision is made for payment of rent at set intervals(2) Oral term of years violates statute of frauds and creates an implied periodic

tenancy iv) Holdover

(1) Residential Lease(2) Landlord elects to holdover a tenant (3) Tenant wrongfully staying past the conclusion of original lease(4) Implied periodic tenancy determined by the way rent is now tendered

b) Terminationi) Notice, usually writtenii) At least equal to the length of the period itself unless otherwise agreediii) Year to year implied periodic tenancy requires 6 months notice

3) Tenancy at Willa) Lease for no fixed period of durationb) Unless otherwise expressly agreed, the payment of regular rent will cause a court to call the

leasehold an implied periodic tenancyc) Tenancy at will may be terminated by either party at any time unless a reasonable demand

to quit the premises is typically required

4) Tenancy at Sufferancea) Tenant wrongfully held over past the expiration of the leaseb) LL gets rentc) Lasts until LL evicts T or elects to hold T to a new term (then implied periodic tenancy created

determined by the manner of payment now tendered)

5) Tenant’s Duties

a) Liability to Third Partiesi) T must keep premises in reasonably good repairii) T liable for injuries to third party invitees even if LL expressly promises to make all

repairs

b) Duty to Repair

i) Where Lease is Silent

(1) General Rule : T required to keep premises in good repair

(2) T cannot commit waste(a) Voluntary (destruction)(b) Permissive Waste (neglect)(c) Ameliorative Waste (alteration that increase the value)

(3) Fixtures(a) Affixation to the realty that objectively shows intent to become part of the realty(b) Examples: heating systems, furnace; customized storm windows; lighting(c) Removal of a fixture is voluntary waste(d) T cannot remove even if T installed the fixture(e) Fixture passes with ownership (goes to LL)(f) Express agreement controls whether it’s a fixture(g) Absent agreement, T may remove if removal does not cause substantial harm

to the premises

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ii) Where T expressly Covenants to Maintain Property in Good Condition During the Lease Term(1) Common Law: T responsible for any loss to the property including forces of nature (2) Today: T may terminate the lease if premises destroyed without the fault of T

c) Duty to Pay Rent

i) No Rent and Possession(1) LL can evict or continue relationship and sue for rent (always gets action for rent even

if LL evicts)(2) LL CANNOT ENGAGE IN SELF HELP

(a) Can’t change locks(b) Can’t forcibly remove tenant(c) Can’t remove tenant’s property

ii) No Rent and No Possession (T abandons) SIR

(1) Surrender(a) Word/action by T that T gives up the leasehold(b) Abandonment = implicit offer of surrender which LL accepts(c) If un-expired lease is for more than a year, must be in writing

(2) Ignore(a) Minority Rule(b) Ignore the abandonment (c) Hold T responsible for unpaid rent as if he were still there

(3) Re-let(a) Re-let premises(b) Hold T responsible(c) LL must make reasonable efforts to re-let (mitigation)

6) Landlord’s Duties

a) Duty to Deliver Possessioni) Actual physical possessionii) If prior holdover is still in possession LL breaches

b) Implied Covenant of Quiet Enjoymenti) Residential and commercial leasesii) T has right to quiet use and enjoyment of premises without interference from LLiii) Wrongful eviction is a breachiv) Constructive eviction is a breach (SING)

(1) Substantial Interference : LL’s action or failure to act create a “chronic problem” (2) Notice : T gives LL notice of the problem and LL failed to reasonably respond(3) Goodbye : T gets the fuck out within a reasonable time after LL fails to correct the

problemv) General Rule: LL is not liable for acts of other tenantsvi) Exceptions:

(1) LL has a duty not to permit a nuisance on the premises(2) LL must control common areas

c) Implied Warranty of Habitabilityi) Residential lease only

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ii) Non-waivableiii) Standard : Premises must be fit for basic human habitation; bare living requirements must

be met(1) Local housing code(2) Independent judicial conclusion

iv) Examples(1) Failure to provide heat in winter(2) Lack of plumbing(3) Lack of running water

v) Entitlement for Breach—MR3 (Move; Repair, Reduce, Remain)(1) Move out and terminate lease(2) Repair and deduct costs from future rent(3) Reduce Rent (or withhold rent from LL and pay into an escrow account) (4) Remain in possession, pay rent, and seek money damages

d) Retaliatory Evictioni) LL can’t retaliate for T’s report of LL’s violations of housing code

(1) Can’t raise rent(2) Can’t end the lease(3) Can’t harass T(4) Can’t take any other retaliatory measures

7) Assignments and Subleases

a) General Rules i) Lease Provisions can limit ability to assign or subletii) Once LL consents to one transfer by tenant, LL waives right to object to future transfers

unless LL expressly reserves the right

b) Assignments : Transfer of the Entire Interest in the Leaseholdi) Original tenant is still in privity of contract (NOT in privity of estate b/c tenant is not

on the estate)ii) LL and assignee are in privity of estate: LL and assignee (T2) liable to each other for all

covenants that run with the land. E.g.,(1) T2 promise to pay rent and pay taxes(2) T2 promises to paint premises and make repairs

iii) LL and Assignee are NOT in privity of contract unless T2 expressly assumes performance of all promises in original lease

c) Sublease : Transfer of Partial Interest in the Leaseholdi) LL and sublessee have no privityii) T2 and T1 are responsible to each other

8) Landlord’s Tort Liability

a) General Rulei) Caveat emptor: let the tenant bewareii) LL under no duty to make premises safe

b) Exceptions: C L A P Si) C ommon Areas : LL must keep common areas safeii) L atent defects : LL must warn of known or reasonably knowable latent defectsiii) A ssumption of Repairs

(1) General Rule: LL has no duty to repair(2) Exception: Once repairs undertaken, LL must complete repairs with reasonable care

iv) P ublic Use Rule : Lease of public space where LL knows tenant will not repair the defect v) S hort Term Lease of Furnished Dwelling : LL responsible for any defective condition which

proximately inures tenant (b/c tenant has no time to inspect or to put premises in good condition)

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SERVITUDES 1) Easements

a) Defined : Grant of a nonpossessory property interest where holder has limited use or enjoyment of the servient land

b) Affirmative (Most are Affirmative): where holder has the right to go onto the servient land and do something

c) Negative Easements : Holder can prevent servient landowner from doing something

i) Requirements(1) Must be express(2) Writing(3) Signed by grantor

ii) Common Types: L A S S(1) Light(2) Air(3) Support(4) Stream water from artificial flow

d) Appurtenant (Most): Benefits the holder in his physical use or enjoyment of his property. Must be two parcelsi) Dominant Tenement (derives the benefit)ii) Servient (bears the burden)

e) Gross : Holder has only personal or pecuniary advantage not related to holder’s land (servient land is burdened, but there is no dominant land)i) Billboardsii) Fishing or swimming in another’s pondiii) Utility company’s power lines

f) Transfer :i) Appurtenant easements transfer automatically with the dominant estateii) Servient estate remains burdened unless BFP without notice of the easement

g) Creation : P I N G

i) P rescription : C O A H(1) Continuous use for the given statutory period(2) Open and notorious(3) Actual use by the holder(4) Hostile use—holder uses the easement without the servient owner’s permission

(NOTE: permission defeats easement by prescription)

ii) I mplication (IMPLIED from existing use)(1) Previous use is apparent and(2) Parties expected that the use would survive the division(3) Reasonably necessary to the dominant land’s use and enjoyment

iii) N ecessity (Landlocked)(1) Grantor conveys land(2) No way out except over grantor’s remaining land

iv) G rant : Easement for more than one year must be in writing that complies with the formal elements of a deed (Statute of Frauds)

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h) Scope i) Scope determined by the terms of the grant orii) Conditions that created the easementiii) Holder cannot unilaterally expand the easementiv) E.g., A grants B an easement to use A’s private road to get to and from B’s land. B then

purchases an adjacent parcel and tries to expand the easement to benefit the new parcel. NOT allowed.

i) Termination : E N D C R A M P

i) E stoppel (1) Holder tells servient owner that easement will no longer be enforced(2) Servient owner reasonably relies on holder’s assurances

ii) N ecessity (1) Ends when necessity ends(2) If created by express grant, does not automatically end when necessity ends—

easement persists

iii) D estruction (1) Servient land is destroyed(2) NOT the conduct of the servient owner

iv) C ondemnation of the servient estate by the government’s eminent domain power

v) R elease : Holder gives a written release to the servient owner

vi) A bandonment (1) Physical action required (building a fence so holder can’t use the easement)(2) Nonuse or mere words are not enough

vii) M erger (Unity of Ownership): (1) Title to the easement and servient land become vested in the same person(2) Easement is NOT AUTOMATICALLY REVIVED if title is later separated

viii) P rescription (1) Servient owner interferes with the easement according to the elements of adverse

possession(2) Elements of Adverse Possession C O A H

(a) Continuous(b) Open and Notorious(c) Actual(d) Hostile to the holder

2) Licensesa) Defined : Privilege to enter another’s land for some delineated purpose b) Not subject to the statute of frauds (no writing required)c) Freely revocable at the will of the licensor unless estoppel applies to bar revocationd) Examples: Tickets; Neighbors talking by the fence granting each other rights of waye) Estoppel: Licensor cannot revoke IF licensee has invested substantial money, labor, or

both in reasonable reliance on license’s continuation

3) Profita) Defined : holder entitled to enter the servient land and take soil or some substance of the

soil (minerals, timber, oil) b) Rules for easements apply

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4) Covenant

a) Defined : promise to do or not to do something related to land (not a grant of a property interest—it’s a contractual limitation)i) Restrictive : promise to refrain from doing something related to the land (won’t build for

commercial purposes on the land)ii) Affirmative : promise to do something related to the land (promise to maintain a common

fence)

b) Burden will run with the land IF (W I T H N) (Burden Rarely Runs with the Land)i) Writing: Original promise must’ve been in writingii) Intent: Original parties intended that the covenant will run with the landiii) Touch and Concerns the Land:

(1) Promise affects the parties’ legal relationship as landowners(2) Covenants to pay money used in connection with the land (e.g., homeowner’s

association fees) touch and concern the landiv) Horizontal and Vertical Privity

(1) Horizontal : originally promising parties: grantor/grantee; landlord/tenant; mortgagor/mortgagee

(2) Vertical : some non-hostile nexus (contract, devise, or descent) NOT adverse possession

v) Notice: Notice of the promise when the subsequent acquirer took the land

c) Benefit will run with the land IF (W I T V)i) Writingii) Intent iii) Touch and Concerniv) Vertical Privity

5) Equitable Servitudes

a) Defined : A promise that equity will enforce against successors (injunctive relief is issue spotter)

b) Creation : W I T N E S (No Privity Required)i) Writing: Generally, but not alwaysii) Intent: original parties want the servitude to “bind successors and assignees”iii) Touch and Concern: affects parties as landowners iv) Notice: assignees of burdened land had notice of the promise

c) Implied Equitable Servitude : General or Common Scheme Doctrinei) Subdivider had a general scheme of residential development including the lot now in

questionii) Buyer had notice of the promise: A I R

(1) Actual Notice: Literal knowledge of the scheme in prior deeds(2) Inquiry Notice: neighborhood seems to conform to a common scheme (3) Record Notice (Split)

(a) Common grantor = record notice or(b) Common grantor = no record notice

d) Defenses i) Entire area or subdivision has changedii) Piecemeal changes are never good enough

ADVERSE POSSESSION 1) Defined : Possession for a statutorily prescribed period of time can ripen the possession into title

2) Elements : C O A H a) C ontinuous : uninterrupted during the statutory period

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b) O pen and Notorious : sort of possession that usual owner would make under the circumstances

c) Actual : entry can’t be hypothetical or fictitious (no symbolic entry like a letter of intent)d) H ostile : Possessor does not have the permission of the true owner

3) Tackinga) One adverse possessor can tack his time with land of predecessor’s time if he was in privity

with the predecessori) Any non-hostile nexusii) Blood, contract, deed, or will

b) Tacking not allowed if there has been an ouster

4) Disabilitiesa) SOL will not run against true owner if he has a disability at the inception of the adverse

possessionb) Disabilities: insanity; infancy; imprisonment

LAND CONVEYANCING: PURCHASE AND SALE OF REAL ESTATE 1) Land Contract

a) Statute of Frauds i) Writingii) Signed by the party to be chargediii) Description of the propertyiv) Stating some consideration

b) Wrong Size : Where land is more than actual size of parcel, specific performance with pro rata reduction in the purchase price

c) Part Performance Exception to Statute of Frauds : Part performance and two of the following three:i) Possession ii) Partial or full payment iii) Substantial improvements

d) Risk of Lossi) Equitable Conversion : once the contract is signed, buyer is the owner subject to

condition of paymentii) Destruction : Buyer bears risk of loss after he signs unless the contract says otherwise

e) Implied Promises (Two in Every Contract)

i) Marketable Title(1) Title is free from reasonable doubt(2) Title is free from lawsuits and threat of lawsuits(3) Does NOT include mortgage that will be paid off with proceeds from sale

ii) Examples of Unmarketable Title(1) Adverse possession of any part of the land(2) Encumbrances such as servitudes and mortgages unless buyer has waived(3) Zoning Violations

iii) No False Statements of Material Fact(1) Failing to disclose latent material defects(2) Seller responsible for material lies and omissions(3) General disclaimers of liability (as is; with all faults) do not excuse seller’s liability for

fraud or failure to disclose

f) No Implied Warranties of Fitness or Habitability

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i) General Rule : NO implied warranties of fitness or habitabilityii) Exception : NEW HOME by a builder/vendor

2) Deed

a) Executioni) Must be in writingii) Signed by the grantoriii) Unambiguous description (i.e., good lead: “all of my land in PA” OK; “some of my land in

PA” is not)iv) No consideration required

b) Deliveryi) Actual physical delivery from grantor to grantee in person, by mail, by agent, or

messengerii) Constructive Delivery

(1) Present intent to be immediately bound(2) Regardless of whether the deed reaches the grantee

iii) Express rejection by recipient defeats deliveryiv) Oral conditions drop out and delivery is accomplishedv) Delivery by escrow is permissible; If conditions are attached, title passes once conditions

are met

c) Covenants and Types of Deeds

i) Quitclaim Deed(1) No covenants(2) Grantor does not promise that he has title to convey(3) Worst deed a buyer can hope for

ii) General Warranty Deed

(1) Warrants against all defects in title including defects preceding the grantor (best deed for buyer)

(2) Present Covenants (SOL begins to run at delivery)(a) Covenant of Seisin : grantor owns the estate he is conveying(b) Covenant of Right to Convey : grantor has the power to make the conveyance(c) Covenant Against Encumbrances : no servitudes or mortgages on the land

(3) Future Covenants (SOL begins to run when grantee is disturbed in possession)(a) Covenant for Quiet Enjoyment : grantee will not be disturbed in possession by 3d

party’s lawful chain of title(b) Covenant of Warranty : grantor will defend grantee should any lawful claims of

title be asserted by others(c) Covenant for Further Assurances : grantor will perform all reasonably necessary

future acts to perfect grantee’s title if title is not perfect

iii) Statutory/Special Deed(1) Grantor has not conveyed estate to anyone other than the grantee(2) Estate is free from encumbrances made by grantor(3) NOTE: grantor makes no representations on behalf of predecessors in interest

(compare warranty deed)

RECORDING SYSTEM 1) Key Rules

a) If buyer is a bona fide purchaser in a notice jurisdiction, that buyer wins

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b) If buyer is a bona fide purchaser in a race-notice jurisdiction, buyer wins if he recorded first

2) Bona Fide Purchaser

a) Purchaser for valuei) Substantial pecuniary consideration = valueii) Donees, heirs, or devises are not purchasers (Doomed Donee Rule)

b) Without notice that someone else acquired first (Notice = A I R)

i) A ctual Notice (1) Before buyer’s closing(2) Buyer has actual knowledge of another buyer’s existence

ii) I nquiry Notice (1) Buyer has inquiry notice of whatever an examination of the land would reveal

(even if he looks or not)(2) Buyer has a duty to inspect the premises before transfer(3) If a recording instrument refers to an unrecorded transaction, grantee is on notice of

whatever a reasonable follow up would reveal

iii) R ecord Notice : Another buyer’s deed is properly recorded within the chain of title at the time that the buyer takes(1) Properly Recorded : all conveyances are recorded (Wild Deed Rule: missing

conveyance; no good) (2) Chain of Title : documents capable of giving record notice to subsequent takers

(established through grantor-grantee index)

3) Notice Jurisdictionsa) “ . . . is recorded”b) If buyer is a BFP, he wins

4) Race-Notice Jurisdictionsa) “. . . is first recorded”b) If buyer is a BFP and he records first, he wins

5) Estoppel by Deeda) One who conveys realty in which he has no interest is estopped from denying the validity of

that conveyance is he subsequently acquires interest that he previously transferredb) A seller who has no interest in property that sells to a BFP loses to the BFP

MORTGAGES 1) Defined : security interest in land, intended by the parties to be collateral for the repayment of a

monetary obligation

2) Creation of Legal Mortgage (a.k.a. mortgage deed, note, security interest in land, deed of trust, sale leaseback)a) Debt (mortgagor)b) Voluntary transfer of a security interest in debtor’s land to secure the debt (mortgagee/bank)c) Must be in writing to comply with the statute of frauds

3) Equitable Mortgagea) Agreement between parties to secure the debt by using land as collateralb) Debtor gives Creditor gets a deedc) Parole evidence is freely admissible to show party’s true intent

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d) If the creditor sells the land to a BFP, BFP owns the land and the true owner can sue the BFP for fraud and to recover the proceeds of the sale

4) Rights of the Partiesa) Unless and until foreclosureb) Debtor-mortgagor has title and the right to possessionc) Creditor-mortgagee has a lien (right to look to the land if there is a default)

5) Transfer: All parties can transfer their interests

a) Creditor Transfers the Mortgage

i) Endorse and deliver to the transferee

(1) Transferee can become a holder in due course if(a) Negotiable—made payable to the named mortgagee(b) Original note is indorsed and signed by the named mortgagee(c) Original note delivered to the transferee(d) Taken in good faith without notice of any illegality(e) Transferee must pay value

(2) HDC takes free of personal defenses (defenses by the debtor against the creditor)(a) Lack of consideration(b) Fraud in the inducement(c) Unconscionability(d) Waiver(e) Estoppel

(3) HDC takes subject to real defenses (M A D F I F I4)(a) Material Alteration(b) Duress(c) Fraud in the Factum(d) Incapacity(e) Illegality(f) Infancy(g) Insolvency

b) If Debtor Sells the Propertyi) Lien remains on the land as long as the instrument (mortgage) has been properly

recordedii) All recording statutes apply to mortgages as well as deeds (treat the mortgage as if it was

a deed)iii) In a notice jurisdiction, a subsequent BFP wins over the bank/creditor who did not

recordiv) In a race-notice jurisdiction, a subsequent BFP who records first wins over the

bank/creditor

c) Personal Liability on the Debt when Debtor Sells the Property

i) “Assumed the Mortgage”(1) Buyer is primarily liable (new buyer has to pay the debt)(2) Debtor is secondarily liable

ii) Subject to the Mortgage(1) Debtor is personally liable(2) Buyer has no personal liability (new buyer need not pay the debt)(3) BUT : if the mortgage was recorded, mortgage remains on the land—if debtor defaults,

creditor can foreclose and buyer is shit out of luck

6) Foreclosure: Where debtor defaults and creditor needs to look to the land to cover the debt

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a) Defined : Proper judicial proceeding where land is sold and proceeds go to satisfy the debt

b) Proceeds

i) Sale yields less than the amount owed on the debt—creditor gets the amount and brings a deficiency judgment against the debtor

ii) Sale yields more than the amount owed on the debt—junior liens (lesser priority) paid off in order of priority and anything left over goes to the debtor

7) Effect of Foreclosure

a) Foreclosing party must notify all interested parties including debtorb) Parties that are not notified have their mortgage stay on the landc) Foreclosing party gets paid firstd) Liens inferior to the foreclosing party are paid next (their interest is eliminated by the

foreclosure sale)e) Senior mortgages stay with the land (New buyer is not personally liable, but creditor can

foreclose if debt is not paid)

8) Priorities

a) Creditors must recordb) Priority: First in time, first in rightc) Purchase Money Mortgage : Mortgage given to secure loan that enables the debtor to acquire

the land has superpriority d) Subordination Agreement: parties can agree to take a subordinate priority

9) Equitable Redemption (Majority of States)

a) Any time before foreclosure sale, debtor has right to redeem the land and free it of any mortgagesi) General Rule : Pay off the amount due plus interests and costsii) Acceleration clause : full balance and accrued interest plus costs

b) Once valid foreclosure has taken place, right to redeem is terminatedc) Debtor cannot waive the right to redeem in the mortgage itself

10)Statutory Redemption (Half of the States)

a) Debtor has a time period after foreclosure where debtor can redeemb) Debtor has to pay the foreclosure pricec) Bank/mortgagor has the right to possession during the statutory periodd) Nullifies the foreclosure sale and restores title to the debtor/owner

LATERAL SUPPORT 1) If land is improved by buildings and an adjacent landowner’s excavation causes improved land to

cave in, excavator is only liable if he acted negligently

2) Strict liability does not attach to the excavator’s action unless plaintiff shows that because of ’s action, ’s improved land would have collapse in its natural state

WATER RIGHTS 1) Riparian Doctrine

a) Water belongs to those who own the land containing the watercourse

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b) Riparians : share the right to reasonable use of the waterc) One riparian will be liable to the other for unreasonable interference with the other’s

use

2) Prior Appropriation Doctrine

a) Water belongs to the stateb) Right to divert and use can be acquired by an individual regardless of status as a riparianc) Rights are determined by priority of beneficial use (first in time, first in right)

3) Groundwater (Percolating Water)

a) Defined : Water beneath the surface of the earth that is not confined to a known channelb) Surface owner entitled to make reasonable usec) Cannot be wasteful

4) Surface Water

a) Defined : Come from rain, springs, or melting snow, and have not yet reached a natural watercourse or basin

b) Common Enemy Rule : surface water is considered a common enemy of landownersi) Landowner can change drainage or make other changes/improvements to combat the flow

of surface waterii) Cannot unnecessarily harm the another’s land

POSSESSOR’S RIGHTS 1) Trespass : invasion of land by tangible, physical object—gives rise to ejectment action

2) Nuisance : substantial, intentional, and unreasonable interference with another’s use and enjoyment of landa) Odors, noise, NOT physical invasionb) Hypersensitivity of plaintiff is not considered

EMINENT DOMAIN 1) Defined : Government’s 5th Amendment power to take private property for public use in

exchange for just compensation

2) Explicit Takings : acts of governmental condemnation

3) Regulatory Takings : government regulation that is not intended to be a taking but has the same effect—economic wipeout of the investment

4) Remedy : government must either compensate or terminate the regulation and pay damages

ZONING 1) Defined : government’s police power to enact statutes for reasonable control of land use

2) Variance : achieve flexibility in zoning fora) Undue hardship andb) Variance will not harm surrounding property values

3) Nonconforming Use : once lawful but not nonconforming due to new zoning ordinance

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a) Cannot be eliminated all at once unless just compensation is paidb) Otherwise, it is an unconstitutional taking

4) Unconstitutional Exactions : amenities that government seeks in exchange for granting permission to build. a) Must be reasonably related in nature and scope to the impact of proposed

developmentb) Otherwise, it’s unconstitutional

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