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Real Property: MBE

Terms in this set (125)

Big 3 Property Interests
1) Estates: Giving Posession
2) Easements: Giving Rights of USE
3) Restrictive Covenants: Restricting another's use of their land.
How to get, keep, transfer Interests
1) Adverse Posession
2) Conveyancing
3) Recording
4) Security Interests
What comes with Property Interests
1) Rights of Support
2) Water Rights
Estates
An Estate always has right of POSSESSION.
includes PRESENT ESTATES and FUTURE INTERESTS
Present estates: 1)Fee Simple Absolute, 2)Life Estate
Future Interests: 1) Classification Rules, 2) RAP
Fee Simple Absolute
Runs forever and is FULLY ALIENABLE(freely transferable)
1) any direct restraint on alienation is VOID(ignore it)
2) Conditions on fee simple are OK, but ANY attempt to limit TRANSER is VOID.
3) Right of First Refusal is NOT invalid restraint.
4) Courts PRESUME fee simple, unless language shows Clear INTENT to create other estate.
Life Estate
NEVER measured by TIME, only by LIFE: (termination at fixed term of years = NOT life estate)
1) Creation of Life Estate may be IMPLIED by language.
2) Measuring life need not be the life of estate holder (life estate per autre vie)
3) If life estate tenant dies before MEASURING life, it pays to their estate until Measuring life dies.
4) Forefeiture Restrictions on Life Estates = OK.
5) Restrictions of transfer of Life Estate are OK.
Life Estate, Rights & Duties
1) Waste: Life Tenant MAINTAINS the estate, i.e. continues NORMAL USE of land in present condition. Anything MORE or LESS = WASTE.
3 types: Voluntary, Permissive, and Ammeliorative.
Life Estate, Voluntary Waste
1) Any Affirmative Action beyond maintenance which causes harm.
2) Life estate tenant liable to holder of the Future Interest.
3) Depeletion of minerals/resources is WASTE unless normal use of land was to deplete them
Life Estate, Permissive Waste
where Tenant has failed to MAINTAIN, tenant must do 3 things to avoid permissive waste:
1) REPAIR: must keep property in repair, but only responsible for ordinary repairs, NOT replacement.
2) TAXES: Life tenant pays all property taxes (but future interest holder must pay to avoid their interest being foreclosed upon if life tenant doesn't pay)
3) INTEREST: Life tenant pays Mortgage INTEREST, future interest holder pays PRINCIPLE.
4) Liability limited to: Income Received from land, or Reasonable Rental Value
5) Life tenant need NOT INSURE property.
Life Estate, Ameliorative Waste
Voluntary waste which alters property substantially but INCREASES the value of property.
1) if CHANGED CONDITIONS have made property RELATIVELY WORTHLESS in current condition, life tenant may tear it down with NO liability.
Class Gifts
Gifts to a class of UNNAMED persons.
1) members of a class who PREDECEASE Testator are eliminated from class, their gift LAPSES.
2) Class is established when will is Executed, the class stays OPEN because others may later meet class definition.
3) Class CLOSES when and one of the Class is Entitled to a DISTRIBUTION. (But only if testator didn't specify a date/trigger for the class to CLOSE)
Future Interests
= Future Possession. Interest EXISTS now but posessions will not come until later.
two bar exam types: 1) Classification Rules, 2) Rule Against Perpetuities.
Classification Rules
5 FUTURE INTERESTS.
Those RETAINED by Grantor: Estate Grantor keeps when Grantor gives LESS than the FULL Interest held by Grantor: 1) REVERSION,
2) Possibility of REVERTER,
3) Right of ENTRY/Power of TERMINATION)

Those GIVEN to Grantee: 4) Remainder,
5) Executory Interest
(all future interests to Grantee MUST be one of these two)
REVERSION
the Interest kept by Grantor when Grantor gives LESS than the DURATIONAL ESTATE Grantor had.
REVERSION NOT Certain to send property back to O, depends on circumstances in the grant.
-Reversion is NEVER subject to RAP
-Reversions can be Transferred Freely
- Grantor CAN'T keep Reversion if Grantor gave away his FULL interest.
Possibility of REVERTER
1) When Grantor gives a FEE SIMPLE DETERMINABLE, Grantor keeps Possibility of Reverter.
2) Fee Simple DETERMINABLE ends AUTOMATICALLY when Condtion happens.
3) Possibility of Reverter NEVER subject to RAP, and is FREELY transferable
4) key words: so long as, while, during, until
RIGHT of ENTRY/Power of Termination
When Grantor gives a FEE SIMPLE on a Condition Subsequent, Grantor keeps Right of Entry.
1) title goes back to Grantor not on violation of condition, but on Grantor's Exercise of Right of Entry
2) language MUST set condtion, AND right of Grantor to REENTER and RETAKE property. ("for the purpose of" does not create condition)
3) if language ambiguous, contrue it as fee simple determinable.
4) Right of Entry NOT subject to RAP, but NOT transferable in life(transferable in will/death)
REMAINDER
1) VESTED Remainder: it becomes POSESSORY on expiration fo the estate that comes before it, ie. no conditions or unknowns.
2) Vested Remainder SUBJECT to OPEN: Remainder interest is to a CLASS whose members are not yet fully known. Class remains OPEN to allow future persons who qualify as class members. (also called Vested Remainder subject to Partial Divestment.
3) Contingent Remainder: something has to happen/be known for remainder to become POSSESSORY, either: A) CONDITION, remainder is contingent if Condition must be satisfied before Grantee can be Certain of Possession, B) Grantee not In Existence: Grantee's interest is Contingent on being born. C) Identity of Taker Unknown: remainder is Contingent until you can identify the taker BY NAME, i.e. to my widow= contingent remainder until widowers death
EXECUTORY INTEREST
acts to Cut Short the Estate that comes before it.
1) If future interest in a Grantee is not a REMAINDER, it MUST be an Executory Interest.
2) Holder of Executory Interes CANT sue Life Tenant for Waste.
3) SHIFTING exec Interest if it takes title from one Grantee and gives to another Grantee.
4) SPRINGING Exec Interest if if takes from Grantor and gives to a Grantee.
Rule Against Perpetuities
1) RAP ONLY applies to Contin gent Remainders, Executory Interests, and Vested Remainders Subject to Open.
2) Rule: No Interest is VALID unless it MUST vest, if at all, no later than 21 years after a LIFE in BEING at the Creation of the Interest.
3) Validity is determined at Time of Creation.(actual vesting doesn't matter if it could theoretically vest outside RAP)
4) Options and Rights of 1st Refusal VIOLATE RAP if they could be exercised outside of RAP period.
5) RAP NEVER violated if gift is from Charity to Charity
RAP, Class Gifts
1) Age Contingency in an Open class: watch for facts where the class is OPEN and gift over is CONTINGENT on a class member reaching a certain age.
2) Watch out for FERTILE OCTOGENARIANS: for RAP purposes, ANYONE is capable of having children.
*If class gift violates RAP as to ANY member, ENTIRE class loses*
RAP, UNBORN SPOUSE
Watch for a gift over following a widow/widower's life estate where gift CANT VEST until widow/widower DIES.
1) widow could be unborn at time of grant, therefor not a LIFE IN BEING, and a violation of RAP.
2) only an issue when VESTING doesn't occur until widow/widower dies.
3) If transfer is by WILL, RAP judged at time of death. If transfer by DEED, RAP judged at time deed executed.
Concurrent Ownership, Joint Tenancies
1) Right of SURVIVORSHIP: survivor AUTOMATICALLY takes decedants share.
2) Right to PARTITION: either party may ask for partition, DESTROYS Joint Tenancy and Survivorship Right.
Creation of Joint Tenancy
Requires 4 Unitites: TIME, TITLE, INTEREST, and POSSESSION.
1) Time: ALL interests must have vested at the SAME time.
2) Title: grant to Joitn Tenants must be by SAME INSTURMENT.
3) Interest: ALL joint tenants must take SAME KIND and SAME AMOUNT of interest.
4) Possession: ALL must have IDENTICAL rights of possession.
Language must Be EXPRESS, and include RIGHT of SURVIVORSHIp, if not then it is only Tenancy in Common
Destruction of Joint Tenancy
1) Partition: a voluntary destruction(by agreement or court order)
2) Severance: involuntary destruction(occurs when ANY 1 of 4 unities is disturbed) ONLY 4 ways to sever:
A) Conveyance: buyer gets tenancy in common, remaining joint tenants retain their JT interests.
B) Mortgate in a Title Theory state(Minority) (Majority is Lien Theory, no severance)
C) Contract of Sale: severance occurs when contract of sale is signed.
D) Creditor's Sale: actual JUDICIAL sale of an interest in the Joint tenancy.
Tenancies in Common
1) Right to Partition:
2) NO Right of Survivorship
ALL Tenants must have EQUAL POSSESSORY RIGHTS
is Default tenancy if other not specified
Allocating rights/duties among Co-Tenants
1) POSSESSION: each co-tenant has right to possess ALL property.
2) ACCOUNTABILITY: co-tenant MAY have to accoutn to another for share of profits.
GENERAL Rule: co-tenant DOES NOT need to Account to another cotenant for share of profits.
UNLESS: A) Ouster: accounting required when cotenant is keeping another off property or claiming right of exclussive posession. B) Agreement to share(in profits) C) Lease by co-tenant of property to 3rd party. D) Contribution: right of cotenant to require others to pay share for repairs/expenses.
Co-Tenant Accounting, Contribution
1) No Contribution for improvements/Non-Necesary repairs, but $ spent may be recouped at partition/sale of property.
2) Contribution available for any Mortgage(signed by all co-tenants) or any GOVT imposed obligation(Taxes. assessments)
Landlord Tenant Estates
1) Tenancy for years
2) Periodic Tenancy
3) Tenancy at Will
4) Tenancy at Sufferance
Tenancy for Years
applies to any SPECIFIC TIME period, not necessariliy a "year"
ANY tenancy for years OVER 1 year MUST be in writing
Periodic Tenancy
any REPEATING (ongoing, continuing, etc) estateuntil one Party gives VALID NOTICE.
Creation of Periodic Tenancy
1) by EXPRESS AGREEMENT
2) by IMPLICATION: where lease is silent as to Duration, Presumed to be Periodic Tenancy by RENT Payments.
3) by OPERATION of LAW: A) ORAL LEASE violating Statute of Frauds: acceptance of RENT creates Periodic Tenancy, Period is determined by Period of Rent Check Landlord Accepted. B) HOLDOVER: tenant stays after lease expires, landlord accepts Rent check.
TERMINATION of Periodic Tenancy
Requires proper NOTICE:
TIME: notic given must be equal to period of rent.(if year to year, just 6 months)
EFFECTIVE DAY: Notice of termination must specifcy the CORRECT effective day. ie. last day of the rent period. (can't give notice terminating on 15th if rental period is till 31, EVEN if more time than neceesary is given)
TENANCY AT WILL
Either party may Terminate at ANY time WITHOUT NOTICE.
Other means of Termination:
1) DEATH of EITHER party.
2) WASTE by the TENANT.
3) ASSIGNMENT by the TENANT
4) TRANSFER of TITLE by LANDLORD
5) LEASE by LANDLORD to 3rd party
TENANCY AT SUFFERANCE
is the possession of a holdover tenant. LANDLORD can either:
1) Hold Tenant as a wrongdoing TRESSPASSER and sue to evict AND recover damages OR
2) Impose New PERIODIC TENANCY on Tenant
3) For RESIDENTIAL Holdovers, period always Month to Month
4) for COMMERCIAL Holdovers, period is same as old period if under1 year, or year to year if old period > 1 year.
5) imposing new tenancy must be REASONABLE
6) Rent increased if Landlord told Tenant PRIOR to EXPIRATION of lease.
Tenant's Duties
Tenant must PAY RENT and NOT COMMIT WASTE.
if lease says "Repair and Maintain" Tenant Liable for ALL DAMAGES, UNLESS wear and tear specifically excluded.
*Tenant may TERMINATE lease if premises detroyed without Tenant's Fault
LANDLORD's REMEDIES
1) Failure to Pay Rent: sue for damages and Evict Tenant
2) if Tenant UNJUSTIFIABLY ABANDONS leasehold, Landlord may either A) treat offer as SURRENDER, retake premises and end Tenant Liability, or B) RE-RENT premises on Tenant's account and hold Tenant liable for deficiencies
LANDLORD's DUTIES
1) to give ACTUAL POSSESSION of premises when lease begins.
2) to deliver RESIDENTIAL premises in HABITABLE condition. (if breached Tenant can Move Out and END lease, or Stay and Sue for Damages)
3) Implied Covenant of Quiet Enjoyment: in EVERY lease, Landlord promises not to breach by A) Total Eviction(terminates lease), B) Partial Eviction(doesn't terminate lease, but T can stay and pay NO RENT), or C) Contructive Eviction(Landlord fails to provide contract service, making premise uninhabitable: must be Landlords fault, a TOTAL intereference with quiet enjoyment, and there must be an ABANDONMENT of premises in a reasonable time period)
Transfer of Lease
1) ASSIGNMENT: when Tenant Transfers EVERYTHING, holding Nothing back
2) SUBLEASE: when Tenant Transfers a PORTION of the lease period, holding some time back.
Assignments, Landlord Sues Tenant
A lease is a CONVEYANCE and a CONTRACT.
-CONVEYANCE Liability comes from PRIVITY of ESTATE (exists ONLY between present landlord and present tenant)
-CONTRACT Liability comes from PRIVITY of CONTRACT (exists where there is an agreement between parties, or assignee ASSUMES obligation under the lease)
-Tenant is Liable to Landlord if EITHER Privity exists.
-Rent, and COVENANTS(if they make land more valuable/useufl) run with the land, i.e privity of estate
Assignments, Tenant Sues Landlord
If original landlord sells to successor landlord, Tenant may still sue Original Landlord due to PRIVITY OF CONTRACT.
-sucessor landlord liable if lease covenant runs with the land AND there is privity of Contract or Privity of Estate.
Sublease
Sublessess NOT LIABLE to Landlord because NO PRIVITY of Contract or of ESTATE( since sublessor is deemed to have kept Estate)
Non-Assignment clause/Non-Sublease Clause
-They are VALID and ENFORCEABLE, even though they are a restraint on alienation.
BUT construed narrowly, so non-assignment clause doesn't prohibit sublease, and vice versa
-Violation of non-clause makes transfer VOIDABLE, but NOT VOID, Landlord must take action.
-If permission to assign/sublease despite clause, then clause is WAIVED for all time(unless landlord specifies waiver is a one-time deal)
-Acceptance of Rent from Transferee IMPLIES permission from Landlord and thus WAIVES clause permanently
Condemnation/Eminent Domain
1) Partial Takings: Tenant not released from Lease, but share in respective portion of Condemnation award for property taken
2) Full Takings: Lease is Extinguished, T is EXCUSED from paying Rent. (if FAIR RENTAL VALUE is MORE than they were paying, they get the excess value for the duration of the lease)
Landlord's Tort Liability
Common Law: NO DUTY to Tenant or Tenat's invitess for injuries on premieses. 5 EXCEPTIONS:
1) Latent Defects: L is under a DUTY to DISCLOSE latent defects which L either knows/has reason to know of(Latent defect=Tenant unaware, and reasonable person would be unaware)
2) Short Term Lease of Furnished Dwelling: L is liable for defects even if L didn't KNOW or have REASON to KNOW of defects.(short term= 3 months or less)
3) Common areas under L's Control: if injury is in area subject to L's control, then L liable if L failed to use Reasonable Care.
Landlord's Tort Liability, continued
4) Negligent Repairs: L is Liable for injury from L's repair of a dect in premises EVEN IF L used all due care in repairing(L created DECEPTIVE APPEARANCE of safety, for which L is Liable)
5) Public Use Exception: L is liable for injury from defects in premises if 3 requirements met: A) L must KNOW or Should KNOW of MAJOR defects, AND B) L must KNOW/Should Know that Tenant will not Fix the Defect, AND L must Know/Should Know the PUBLIC will be using the premises.
Tenant's Tort Liability
Tenant is ALWAYS liable to 3rd party INVITEES for NEGLIGENT failure to correct DANGEROUS conditions on the premises(regardless of Landlord's contractual liability)
Fixtures
If item becomes a fixture, it MAY NOT be removed by either Seller or Tenant.
-Key to determining Fixture status is INTENT of the one doing the installing.
-an agreement regarding the matter controls. if not, 4 factors:
1) Degree of attachment:
2) General custom(normal to leave or take with) (washers and dryers NEVER fixtures)
3) Degree of Harm: harm to premises if removed(if Tenant can remove without SUBSTANITAL DAMAGE, then not a fixture)
4) TRADE Fixtures: chattel used in Trade/Business are NOT fixtures.
-if Tenant can remove chattel, MUST be removed BEFORE lease ends.
-if OWNER can remove chattel, must be removed BEFORE CLOSING
EASEMENTS
A non-posessory interest in land involving a right of USE.
1) Easement APPURTENANT: directly benefits the USE and Enjoyment of a SPECIFIC piece of land. (ALWAYS 2 properties involved, the SERVIENT[burdened] estate and the DOMINANT[benefited] estate)
2) Easement in GROSS: No DOMINANT[benefitted] Estate. i.e. UTITLITY easements.
Creation of Easements
1) EXPRESS Easement:
2) Easement by IMPLICATION:
3) Easement by PRESCRIPTION:
Creation of EXPRESS Easement
1) requires an EXPRESS grant of an EASEMENT to someone else, or the RESERVATION of an Easement when land is sold to another.
2) MUST COMPLY with STATUTE OF FRAUDS and DEED formalities. (if easement for more than 1 year)
3) In WRITING, SIGNED by holder of SERVIENT[burdened] estate, and Executed like a Deed
Creation of Easement by IMPLICATION
1) Previous Use by a COMMON OWNER: which was CONTINUOUS, APPARENT(open/obvious), REASONABLY NECESSARY
2) Absolute right of ACCESS situation: property is LANDLOCKED. Owner of SERVIENT[burdened] estate chooses location of easement as long as it is reasonable.
Creation of Easement by PRESCRIPTION
Arises like title by adverse possession, 4 requirements:
1) Use must be ADVERSE to the owner,
2) Use must be CONTINUOUS and UNINTERUPTED(seasonal use ok if reasonable) for the statutory period(MBE: 20 years)
3) Use must be VISIBLE and NOTORIOUS, or with OWNER's KNOWLEDGE, and
4) Use must be WITHOUT Owner's PERMISSION (even oral grants of permission destroy Prescription)
Transfer the BENEFIT of an Easement
1) if easement APPURTENANT, it AUTOMATICALY goes along with DOMINANT[benefitted] estate. IMPOSSIBLE to transfer Seperately from DOMINANT estate.
2) if Easement in GROSS: A) COMMERCIAL easements in GROSS can ALWAYS be transferred. B) PERSONAL easements in GROSS NEVER transferable
Transferring BURDEN of an Easement
1) Easements are ALWAYS binding on Subsequent holders of SERVIENT[burdened] estates, even if easement NOT in their deed, as long as subsequent holder had NOTICE of easement.
USE of Easements
1) the terms of an easement control its USE.
2) if silent, TWO PRESUMPTIONS:
A) presumed that easement is PERPETUAL,
B) presumed that USE is of REASONABLE DEVELOPMENT of the DOMINANT[benefitted] Estate.
-Easement can only be used to benefit the DOMINANT esate, not other property. If use benefits other property, remedy is to ENJOIN excessive use, NOT TERMINATE the easement.
Repair of Easements
Holder of Easement must keep it in repair and can ALWAYS go on the SERVIENT[burdened] estate to repair easement.
1) Holder of easement must make REASONABLE restoration of SERVIENT estate after repairs.
2) Holder of easement is OBLIGATED to make NECESSARY repairs, holder of SERVIENT estate has NO OBLIGATION to repair.
Termination of Easements
6 ways to terminate outside terms of the easement:
1) Unity of Ownership/Merger
2) Valid Release
3) Abandonment:
4) Termination by Estoppel
5) Termination by Prescription
6)End of Necessity
Termination of Easements, UNITY of Ownership/MERGER
Whenever BOTH Dominant and Servient estates come together in the SAME owner, the easement is terminated.
1) Easements Terminated by MERGER/UNITY NEVER Revive.
Termination of Easements, Valid RELEASE
a valid release terminates an easement. It Must comply with Statute of Frauds Requirments,
AND all deed formalities
Termination of Easements, ABANDONMENT
The INTENT to ABANDON myst be MANIFESTED by taking some PHYSICAL ACT on the property itself that would show INTENT to ABANDON.
Mere non-use not sufficient, no matter how long.
KEY is: ABANDONMENT by ACTION
Termination of Easements, Termination by ESTOPPEL
2 elements required:
1) There must be a REPRESENATION of RELINQUISHMENT by the holder of the DOMINANT estate
AND 2) a CHANGE of POSITION in reliance by the holder of SERVIENT estate.
Termination of Easements, Termination by PRESCRIPTION
Owner of SERVIENT estate must STOP the USE of the easement and keep it STOPPED for the Statutory period.
Termination of Easements, END of NECESSITY
Once the necessity that created an easement by necessity ceases to exist, so does the easement.
LICENSES
A license is a limited privilege of USE, and NOT a property interest; it is only a CONTRACT right, and it is REVOCABLE at the will of the licensor.
-Licensor may have to pay Contract DAMAGES for revocation, but there are NO Property Rights.
Licenses, Tickets
Tickets are ALWAYS licenses. Tickets give no IN REM(property) rights, only CONTRACT rights.
-Can ALWAYS be revoked, but CONTRACT damages may be secured by non-revoking party.
License, Irrevocable License
License PLUS Money spent on property furthering the license.
1) Anytime an easement is ATTEMPTED but fails due to the STATUTE if FRAUDS, there is a LICENSE.
2) If $ is spent on the property in furtherance of that ORAL LICENSE, the license becomes IRREVOCABLE and is just as good as an easement(and can be enforced under principles of estoppel)
-Irrevocable License is same thing as Easement by Estoppel
PROFITS
A PROFIT gives the right to go onto land and take a NATURAL RESOURCE away.
1) Along with the PROFIT goad an IMPLIED EASEMENT to go onto the land to get the resource and take it away.
2) Easement rules apply to PROFITS.
RESTRICTIVE COVENANTS
1) Give the right to RESTRICT someone else's use of their land.
two tpes:
1) Covenants at Law (when enforcing at law)[ie plaintiff wants $ damages]
2) Equittable Servitudes (when enforcing in equity)[ie plaintiff wants an injunction]
Covenants Running with the Land AT LAW
Four Requirements:
1) INTENT that it run with the land
2) NOTICE to the person against whom the enforcement is sought
3) Covenant Must TOUCH and CONCERN the land(must make land more valuable/useful)[Covenants NOT to Compete DO touch and concern the land]
4) PRIVITY-a CONVEYANCE of property from one party to another. Either A) HORIZONTAL Privity (ALWAYS refers to the ORIGINAL parties to the covenant, for HP must have a Conveyance of the property between original parties) or B) VERTICAL Privity( between party who subsequently OBTAINs property subject to the covenant and the ORIGINAL Party[only applicable if succesor takes FULL Estate]
Covenants Running with the Land AT LAW, privity
1) If Successor-in-interest is the Defendant, then someone is trying to have the BURDEN of the covenant run to that successor.
A) for BURDEN to run, there must be BOTH Vertical and Horizontal Privity
2) If Successor-in-interest is the Plaintiff, then that person is trying to have the BENEFIT of the covenant run to them.
B) for BENEFIT to run, you need ONLY VERTICAL Privity.
Equitable Servitudes
To enforce an Equitable Servitdue, you need:
1) INTENT that the restriction be enforceable by succesor's in itnerest,
2) NOTICE to the subsequent purchaser,
AND 3) restriction must TOUCH and CONCERN the land.
PRIVITY NOT REQUIRED
Equitable Servitudes, in Subdivisions
Mutual Rights of Enforcement, 2 requirements:
1) INTENT to create a servitude on ALL the land in the subdivision(found in the common Building Plan) AND
2) NOTICE: ACTUAL Notice, RECORD Notice(chain of title), or INQUIRY Notice(reasonable Search/Inquiry)
Equitable Defenses to Enforcement of Equitable Servitudes
1) UNCLEAN HANDS (Plaintiff did same thing as Defendant)
2) ACQUIESSENCE: (Plaintiff let neighbor another neighbor do the same thing)
3) LACHES( Plaintiff took too long to complain)
4) ESTOPPEL( Plaintiff earlier said he/she didn't mind Defendan't actions)
TERMINATION of Equitable Servitudes
ALWAYS terminated by RELEASE or UNITY/Merger, can also be terminated by CHANGED CONDITIONS
-Changed COnditions is ALL or NOTHING, ALL lots in the subdivision must be affected by the changed conditions
Adverse Possession
1) HOSTILE(no right to be on property)
2) EXCLUSSIVE(must be keeping others from possessing property)
3) LASTING (must last statutory period MBE: 20 YEARS)
4) UNINTERRUPTED (continuous, seasonal may work if a REASONABLE owner would be seasonal)
5) VISIBLE (open and notorious)
6) ACTUAL:(must actually possess, unless Constructive or Leasing the land)
-Owner need not KNOW trespasser is on land
-Adverse posesser does NOT need Good Faith
CAN'T ADVERSE POSSESS GOVT LAND
Constructive Adverse Possession
Adverse posessor has
1) COLOR of TITLE(bad title, not an intentional trespasser)
2) can grant posession to entire color of title tract, even if only ACTUAL possession of part of it.
3) The Amount ACTUALLY Possessed must bear a REASONABLE RELATION to the whole.
4) Property must be UNITARY(no roads/etc through it)
Adverse Possession through LEASE
Leasing land to another counts as POSSESSION for purposes of adverse possession.
Adverse Possession against CONCURRENT owners
Occurs when the Possessor EXCLUDES the other co-tenants from possession AND the statute runs.
-The EXCLUSION starts the clock running, not just co-tenants absence from property
Adverse Possession, Future Interests, LIFE Estate
Life estate plus future interest: The clock doesn't start to run against the holder of a FUTURE interest until the life tenant DIES. May dispossess the current life tenant, but clock must start/run again against the future interest holder.
Adverse Possession, Future Interests, Fee Simple Determinable
the happening of the CONDITION starts the clock running for purposes of adverse possession
Adverse Possession, Future Interests, Fee Simple Subject to a CONDITION SUBSEQUENT
CLOCK doesn't start to run until GRANTOR exercises the RIGHT OF REENTRY
Adverse Possession, TACKING
periods of Adverse Possesison may TACk, but the periods MUST pass DIRECTLY from one adverse possessor to another.
Can tack periods of true OWNERSHIP(adverse possession doesn't have to be against the Present Owner for the entire statutory time)
Adverse Possession, Disability
Being a MINOR, INSANE, or in JAIL is a disability.
1) if Owner is under a disability at the time the adverse possession BEGINS, the clock doesn't start to run until OWNER is free of the disability.
2) if Owner's disability is AFTER adverse possession begins, it's an INTERVENING disability, and is IGNORED.
*NO TACKING of diabilites
Contract of Sale
Governed by normal contract rules, PLUS
1) STATUTE of FRAUDS: writing, signed by the one who is sued. Just need SOME kind of signed writing. needs a DESCRIPTION of the Property, the NAMES of the Parties, and the PRICE.
EXCEPT: doctrine of Part Performance: A) oral contract must be CERTAIN and CLEAR, AND B) the ACTS of part performance must clearly PROVE UP a contract(i.e. claimant in possession, AND paying full price or erecting improvements)
Effect of Contract of Sale between signing of Contract and closing
1) Risk of Loss
2) Death of a Party Before Closing
3) Marketable Title
4) Time of Performance
Contracts of Sale, Risk of Loss
if property is damaged/destrpoyed before closing, BUYER loses. Once contract signed, it is BUYERS land and BUYERS RISK(because of equitable conversion, meaning title is in buyer for all practical purposes)
-This is true EVEN if seller remains in POSSESSION and CONTROL
-This rule only applies absent fault of the Seller
Contract of Sale, Death of a Party before closing
Equitable Conversion preserves the rights as set in the contract.
1) If seller dies before closing, buyer closes with SELLER's Estate; Seller's interest is PERSONAL Property
2) if Buyer does before closing, Seller closes with BUYER's Estate; Buyer's interest is REAL Property
Contract of Sale, Marketable Title
Every land sale contract has implied warranty that seller will give Buyer Marketable title at CLOSING. Doesn't need to be perfect, just one that a reasonable person would accept. Seller must give Buyer 3 things:
1) PROOF of TITLE,
2) Title free of ENCUMBRANCES(no easements, covenants, etc unless mentioned in the contract)
3) Valid LEGAL TITLE on the DAY of CLOSING
Contracts of Sale, Buyer's remedies if no Marketable Title
Buyer must notify Seller and give Seller Reasonable time to CURE the defect EVEN if it postpones the closing day.
-If problem not CURED, buyer has three remedies:
1) Recission(buyer walks away)
2) Damages(file suit)
3) Specific Performance(buyer takes what is available, and price reduced to cover defect)
BUT if Buyer accepts deed without problems being Cured, no recourse based on Contract, only based on the DEED.
Contracts of Sale, Time of Performance
1) TIME is NOT of the essence in land sale contracts, unless contract/facts make it clear that it was.
2) if Time not of the essence, performance must be within a REASONABLE time after the date of closing as set in contract.
3) if TIME IS of the Essence, party who failed to perform in time can no longer enforce the contract
Remedies for Breach of Sales Contract
1) Damages: contract price MINUS value of land ON DAY OF BREACH.
2) Liquidated damages: buyers deposit may be forfeited as Liquidated damages as long as it is 10% of purchase price or less
3) SPECIFIC PERFORMANCE: ALWAYS available to buyers and sellers.
Defects on the Property
if Land not fit for Ordinary Purposes, and Buyer wants to rescind, TOO BAD, Buyer can't recover.
EXCEPT: 1) Seller must DISCLOSE serious defects that the Seller KNOWS of and aren't OBVIOUS to the buyer(seller can't actively CONCEAL defets)
AND 2) implied warranty of FITNESS or MERCHANTABILITY for new homes sold by a BUILDER-SELLER
Deed
Once Deed is Accepted, the contract MERGES into the deed and is destroyed, all CONTRACT provisions not included in deed are lost.
Deeds Require
1) EXECUTION and
2) DELIVERY
Deed, EXECUTION
1) Statute of Frauds applies to Deeds.(Seller MUST sign)
2) Description must be able to IDENTIFY the land, if not, deed is VOID (minor erros allowed as logn as it can still be identified) (Description by Metes and Bounds always wins out over any other description type)
Deed, DELIVERY
Doesn't need to be PHYSICAL, merely INTENT to pass title.
1) if intent to pass title shown, grantor safeguarding the deed doesn't show lack of delivery
2) RECORDING a deed creates presumption of delivery
3) Once DELIVERY occurs, TITLE passes, destroying/returning deed has no effect
4) Parol evidence allowed to show intent of grantor.
5) If GRANTOR dies with deed, presumption of No Delivery
Deed, Conditional Delivery
where Grantor hands over deed, but tires to condition delivery on some event:
1) If condition is in the DEED: it is valid delivery of a Future Interest
2) Oral Condition: IGNORE
3) Delivery conditional on GRantee Paying Purchase Price: A) valid provided Grantor delivers deed to ESCROW, once in ESCROW, Grantor can't get Deed back unless condition not met. B) Once in ESCROW, Grantee presumed to Accept, unless he REJECTS. C) NO CONSIDERATION needed for DEED (inlike contract of sale)
Covenants for Title
1) if Grantor makes NO promises regarding title, grantee gets QUIT CLAIM DEED(Deed for whatever Grantor owns, but Grantor promises nothing)
2) If Grantor makes promises Re: TITLE, they are COVENANTS for TITLE, Deeds with all 6 traditional covenants are GENERAL WARRANTY DEEDS
PRESENT COVENANTS for TITLE
can sue immediately on these, personal to Grantee, and do NOT run with the land.
1-2) Covenant of Sezin= Covenant of the Right to CONVEY(promise of seller that SELLER has TITLE and POSSESSION and can validly convey BOTH)
3) Covenant against ENCUMBRANCES(Grantor promises no easements, etc that aren't stated in the deed)
FUTURE COVENANTS for TITLE
these aren't breached immediately, but later when Grantee is disturbed in Possession(they run with the land AND to ALL subsequent Purchasers)
1-2) Covenant for QUIET ENJOYMENT and Covenant of WARRANTY( promise of Seller that Seller with Protect Buyer against ANYONE who later claims title)
3) Covenant of FURTHER ASSURANCE( Seller promises to do whatever necessary to pass valid title)
Damages for Breach of Contract
Damages are limited to the Purchase Price Received by WARRANTOR, Plus INCIDENTAL DAMAGES.
Estoppel by Deed
If A deeds land he doesn't own to B, then later acquires that SAME land, B gets title since A created Implied Covenant that title would pass to B
-BUT: if Grantor sells to BFP after getting title, then B loses
-Also called doctrine of After-Acquired Title
Deed to a Dead Person
Deed to a dead person is INVALID. BUT enforcement of Contract of Sale is permitted(new deed must be drawn up made out to buyer's estate)
RECORDING
Protects Subsequent Mortgagees, but NOT judgement Creditors.
Deed is VALID without Recording, but Recording required to give NOTICE.
three types:
1) NOTICE ACTS
2) RACE-NOTICE ACTS
3) PURE RACE ACTS
NOTICE ACTS
protects subsequent BFP's(those who give Value and who take Without NOTICE of earlier transaction)
*Recording is IRRELEVANT, except that it gives Notice, invalidatin BFP's claims (i.e. notice more important than actual recordation)

"without notice" or "in good faith"
BUT NOT "recorded first, or First recorded"(since first to file irrelevant)
RACE-NOTICE ACTS
Protect subsequent grantees who are BFP's for VALUE who take Without NOTICE AND! are FIRST to RECORD

"First Recorded", or "Recorded first"
AND with "without Notice" or "in good faith"
(because both notice, and being first to File are KEY)
PURE-RACE ACTS
NOTICE is IRRELEVANT, FIRST to FILE WINS! (even if subsequent purchaser NOT a BFP)

WONT use "without notice" or "in good faith" (because notice is irrelvant)
May use: RECORDED FIRST
BFP VAlue definition
1) unless explicit claim of fraud, ANY out of pocket something(expense) is enough to be considered value
BUT $1 not enough since it is not "out of pocket"
2) NOT a BFP if trying to take property as HEIR, DONEE or DEVISEE, since no out of pocket consideration
Shelter Rule Exception
ANYONE can shelter under the rights of a BFP. a BFP gives their rights to ALL who TAKE from a BFP in their chain of title.
What meets NOTICE requirement
1) ACTUAL NOTICE:
2) RECORD NOTICE: contructive notice that arises from the record(deed must be recorded in the CHAIN of TITLE)
3) INQUIRY NOTICE: A) if reading of deed on record discloses an UNRECORDED TRANSACTION, it must be checked out since on Notice for ANYTHING mentioned in a deed in chain of title. B) Notice presumed if an examination of the land would have shown someone' prior unrecorded right(must inquire as to any uses they find on land)
Record Notice Title Searching
1) CONSTRUCT Chain of TITLE by going to GRANTEE index, look up Seller's name to see who granted it to him, keep going back for the statutory period.
2) ADVERSE Chain by looking at GRANTOR index, and check if each seller recorded anything DURING their period of ownership which would burden property.(doesn't matter if it happened before or after ownership)
Security Interests
1) MORTGAGE: normal def, and also: A) Absolute Deed with separate promise to reconvery deed back(treated as an equitable mortgage) and B) Sale/Leaseback with option to REpurchase(treated as normal mortgage)
2) DEED of TRUST: Given by Debtor to a 3rd party trustee who holds it until loan is paid off. If loan isn't paid then trustee may EITHER get court to order sale, OR trustee may sale property on his own AT PUBLIC AUCTION
3) Installment Land Contract: Debtor signs a contract promising to make payment, and Seller keeps Title until loan is paid off.
Consequences of having Mortgage/Deed of Trust
1) Equity of Redemption
2) Foreclosure must be by PUBLIC AUCTION SALE
3) If Multiple Mortgages:
4) Foreclosure wipes out ALL Subsequent Junior Interests, but LEAVE INTACT Prior SENIOR Interests
5) Order of Proceeds Use:
6) Mortgagee may Sue for Balance Due
Mortgage/Deed of Trust, Equity of Redemption
At any time up the the foreclosure sale, debtor can REDEEM the property by paying off arrears. BUT if ACCELERATION clause, Debtor must pay off entire balance.
1) Right of Redemption cannot be waived in the Document, but may be done LATER for separate Consideration
2) Different from a STATE Statutory right of Redemption.
Mortgage/Deed of Trust, Foreclosure, Multiple Mortgages
First in Time, First in right, UNLESS Recording Act changes priorities.
1) Priority determined same as deed priority
2) Priority may be changed by contract
3) PURCHASE MONEY Mortgages given priority over other mortgages executed at same time, EVEN if NOT recorded first.
4) PMM given by the SELLER gets PRIORITY over a PMM given by a 3rd Party Lender.(Sellers win over Banks)
5) if owner INCREASES the debt of a SENIOR mortgage, the INCREASED AMOUNT loses its priority to existing Junior Mortgages
Mortgage/Deed of Trust, Foreclosure's effect on Senior/Junior Interests
Foreclosure wipes out ALL Subsequent Junior Interests, but LEAVE INTACT Prior SENIOR Interests
Junior leinholders may PAY OFF any mortgage being foreclosed upon in order to keep their interests from being wiped out(and thus are NECESSARY PARTIES to a foreclosure) IF Junior Interests not given notice, their interests CONTINUE.
THIS APPLIES TO ALL JUNIOR INTERESTS, INCLUDING EASEMENTS & LEASES
Mortgage/Deed of Trust, Foreclosure, Order of Payment
1) Pay Costs of the Foreclosure(including expenses and Attorney's fees)
2) Pay the Mortgage that was foreclosed upon(and accrued interest)
3) Pay off JUNIOR interests in full(in their priority order)
4) Anything left goes to Debtor
Consequences of Installment Land Contract
FORFEITURE CLAUSES: Strict and WILL be enforced. Provide that if debtor misses SINGLE payment, Seller can cancel the contract, keep all the money paid to date, AND get the property back.
Transfer of Mortgage, Mortgagor(borrower)
Mortgagor can transfer TITLE to property and the transferee takes subject to the mortgage.
1) Mortgagor continues to be PERSONALLY liable on the mortgage.
2) UNLESS Grantee Specifically ASSUMES the mortgage, the grantee is NOT perosnally liable, but if not paid, property can be foreclosed upon.
3) Even if Grantee ASSUMES mortgage, originaly mortgagee is STILL PERSONALLY Liable
If Mortgagee(lender) and Grantee(subsequent Buyer) alter the obligation, the original Mortgagee(borrower) is DISCHARGED of ALL Liabilioty
Transfer of Mortgage, Mortgagee(lender)
Lender may free transfer the Note and mortgage tags along with it
Transfer of Mortgage, Due on Sale Clauses
ARE ENFORCEABLE. Provide that if borrower transfers without Lender's consent, the FULL AMOUNT of loan is IMMEDIATELY DUE
FIXTURE FILING
governed by UCC Article 9, must be made within 20 days of attachment to get priority over existing interests.
1) if fixture filing properly done, supplier of chattel may remove it regardless of other interests
Right of SUPPORT
1) LATTERAL SUPPORT: landowner has right to have his land supportes by adkoining land owners and STRICT LIABILITY if land is not supported.(but not for IMPROVEMENTS unless land would have collapsed without the improvement)
2) SUBJACENT SUPPORT: Right to surface support from below, STRICT LIABILITY if surface isn't supported.
-Right applies to LAND, and IMPROVEMENTS existing when Mineral rights were severed from Fee SIMPLE
If excavator NEGLIGENT, normal TORT actions STILL Available
Water Rights, Rivers and Lakes
Riparian: property bordering lake/stream
1) Owner may use all water needed for DOMESTIC purposes.
2) Only REASONABLE USE if NON-Domestic Use

EXCEPT: Prior APPROPRIATION First to make BENEFICIAL USE of water has right to continued use(priority in time rules)
Water Rights, Underground water
Landowner entiteld to REASONABLE use of groundwater, but must make use of it ON THE PROPERTY
Water Rights, Surface Water
1) NATURAL FLOW: Courts allow REASONABLE steps to dela with flood water
2) COMMON ENEMY: can do ANYTHING to protect against floodwater, reasonableness doesn't matter!
Sets with similar terms