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PROPERTY SMALL OUTLINE SPRING 2015 - RLA

I.

II.

Theories of Property
a. Externalities
b. Internalizing the Externality
c. Property rights are often on a collision course with the rights of others
i. Look at the goals the court is trying to reach
d. Tragedy of the Commons
i. Everybody owns everything
e. Tragedy of the Anticommons
i. Everything is private property
f. Bundle of sticks (most important)
i. Not all sticks are present in every bundle, but mere absence of
some sticks doesnt mean the absence of ownership rights
ii. Fee Simple Absolute having all the sticks
iii. Bundle of sticks you can take one out but the others are still
there
iv. Right to include
v. Right to exclude*
1. Issues of trespass, adverse possession, housing
discrimination
vi. Right to transfer/ sell
1. Real estate transactions, rule against perpetuities
vii. Right to use
1. Landlord/tenant, nuisance law
viii. Right to destroy
Acquisition
a. Adverse possession - COAH Continuous, Open/Notorious, Actual
& Hostile!
i. Three most common ways to obtain AP
1. Mistaken belief
2. Possessor encroaching on neighbors boundary
3. Possessor trying to take over someone elses land
b. Elements (all gauged objectively how a reasonable person would
treat the land)
i. Entry = actual possession of at least part of the property (unless
you actually enter true owner will not know you are acting
inconsistent with his rights)
1. Must occupy most of the land, not just a small piece
2. Notice to owner, has to be physical
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ii. Open and notorious = land owner must be on constructive


notice that you are there
1. Encroachments that are very small do not qualify must
be on actual notice for those
2. Unless agree, acquiesce, estoppel (boundary lines)
3. Means that it is visible to a reasonable person
4. Visible occupation cant be hidden obvious
iii. Continuous = but not constant - must use the land consistent
with the ordinary purposes of the land, how a true owner would
use it so if it is a summer home, do not have to be there all
winter. Must be there for an uninterrupted period of time (per
statute)
iv. Claim of Title = Your claim is inconsistent with owners claim
1. English: We dont care if you know its not yours
2. American: we protect innocent but not intentional
trespassers
v. Hostile = you do not have permission, your behavior is
incompatible with the true owners intent
1. They have to be there without the owners permission.
Permission always defeats Adverse Possession
c. Color of Title
i. Color of Title when the claim is based on a written
instrument that is defective and invalid, either the wrong
deed or the seller never really owned the land. Still must
enter the land, but only a small part of it, constructive
possession. In a few states it is required for AP, but most
states do not require it.
d. Tacking
i. Not allowed with ouster
ii. To satisfy the given statutory period, one adverse possessor may
tack on to his time with the land his predecessor's time, so long
as there is privity = satisfied by any nonhostile nexus between
the possessors, such as blood, contract, deed, or will.

e. Disabilities
i. Statute doesnt run against the true owner; tolls the SOL and
cannot be tacked.
1. Infancy
2. Insanity
3. Imprisonment (not in MD though)
ii. To benefit True owner must have the disability at the time of
entry of the AP
f. Adverse Possession of Chattel
i. Discovery rule
1. Cause of Action will no accrue until the injured party
discovers facts that will form a basis of a cause of
action
ii. Must have
1. Hostile
2. Actual
3. Visible
4. Exclusive
5. Continuous
g. Acquisition of Property Other Than by Voluntary Transfer
i. Discovery & Conquer
1. Two people cant have the same property interests
2. You cant sell/give more than what you have
3. All property has a chain of title (that will trace back to
the government)
4. You cannot sell/give more than you own
5. Also remember that discovery only gives the right to
conquer you have to do something to the property after
you discover it to gain possession of it
ii. First in time, first in right (Indians v. Government Case)
1. But what is means to be first is highly situational
2. European nations discovered the land and the first
discoverers have the exclusive rights to that land
3. The Indians had the right to use the land, but not possess
the land
4. The Europeans could extinguish the Indians right to use
but only by purchase or conquest
5. However, the Indians abandoned their right to use by
moving off of the land

a. Pros
i. Promotes peace because once discovered ,
property is off limits
ii. Certainty
iii. Administrative ease
iv. Encourages investment and development of
the land
v. History vested rights create reliance and
expectations
b. Cons
i. Arbitrary decision
ii. People may take more than they can use
(anti-environmental)
iii. Gives effect only to one notion of property
iv. Relies on power those who get there first,
get land
iii. Lockes Labor Theory
1. You can only acquire property by doing some type of
labor on it. The labor is putting everyone else on notice
that the property is yours.
iv. Capture (first in time)
1. (Fox Case) the first person to gain actual possession
of a wild animal by killing or restraining it so that there is
no reasonable possibility of escape has the property
rights to that animal. The rule of capture mortal
wounding required. Mere pursuit is not enough. You must
inflict a death wound.
a. Suggest that mortally wounding or trapping the
animal would be enough as well
b. This holding gives peace and certainty even if not
fair
c. Dissent suggests that this will discourage people
from hunting foxes if efforts will go to waste
d. Same with Fugitive Resources
e. Oil a field split between two properties, the
seconds propertys only recourse to pump the oil
faster than his neighbor. But the oil will be used up
quicker.

v. Creation Property in Ones Person


1. Take Away Points (Goals dont always alignt)
a. We care about producing more for the public
b. We care about rewarding those who produce
(original and copiers)
c. We care about more consumption
d. We can limit some and increase rewards but dont
want to limit all
i. Property Owners Right to Exclude (Has Limits)
a. Transferability of Rights (Jacque v. Steenberg Homes,
Inc.)
1. Everyone has a right to exclusive use of
their own property to the extent it does not
injure others
2. Right to exclude is seen as the most
important stick in the bundle
3. Reinforces ensuring democracy theory in
that if we know we can exclude others
from out land, we know we have a greater
right to that land
ii. State v. Shack
1. Ownership of real property does not
include the right to bar governmental
services to migrant workers residing
therein
2. Property rights serve human values and are
limited by it
a. Title to property cannot give the
owner complete dominion over
everyone who enters upon that
property
b. A mans right to property is not
absolute
3. Congress provided for assistance to
migrant workers and barring the entry of
persons who would offer such assistance
would frustrate Congressional intent

ii.

Finder
2. Lost/mislaid doctrine
a. Even a thief has superior title to those who come
back later even if thief got wrongfully they
would still have superior claim
b. Lost = accidently parted with and the finder of that
item will have the best claim of title to that item
c. Mislaid = item intentionally placed down then
unintentionally forgotten. In that case, if you find
it, the true owner will have the best title to a
mislaid item.
d. Abandoned = the finder of the item gets the actual
title because no one else has better title
i. Abandoned property owner knowingly
relinquishes all rights in property and finder
gets actual title and no one has better title
e. Found in a private home = will go to the
homeowner they will have best title compared to
everyone but the actual owner.
f. There is a subtle difference between lost and
mislaid
i. Lost means that owner left it somewhere
unintentionally
ii. Mislaid means that owner left it somewhere
intentionally and forgot to come back for it
iii. Goals of finders law: return items to true
owner, honesty, and expectations
iv. A person who has mislaid their property is
more likely to return to the shop to reclaim
it, therefore we want to keep it at the shop

iii.

iv.

Gifts
a. Requirements
i. Intention to give as a gift
1. Can be shown by words, deeds, letters, etc.
b. Delivery of the item being gifted
i. Actual
1. Law prefers this and often requires it.
c. Constructive
i. Handing over a key. (only ok when gift is too big
and is impossible to physically hand over
d. Symbolic
i. Handing over something that symbolizes the
property like a writing
e. Acceptance of the gift (usually implied and often
forgotten). Courts assume this unless its rejected.
General rule is: If a property can be handed over, it
MUST be
a. Serves anti-fraud function
g. Gift Causa Mortis (made in contemplation of
death)
i. Must have Intention AND Delivery
h. Gift Inter Vivos (gift made during life)
i. Deliver a Future Interest without actual
possession (painting case intent for the
future was good enough)

III.

Freehold Estates
a. You can only transfer what you have or less than what you have
b. Numerus Clausus Principle cannot create new types of estates; they
must fall within the types already in existence or are invalid
i. We are talking about the ownership/possessory interest in real
property and NOT the actual property item!
ii. The person who has the possessory interest has the bundle of
sticks
iii. Ownership and possessory interests can be different and
overlapping
iv. Pay attention to the vocabulary used
v. Will not change because lawyers like the fact that they are the
only ones that understand it they can make money off of it
c. Vocabulary
i. Words of purchase who is getting the land (O to A)
ii. Words of limitation for how long
1. And his/her heirs (FSA)
2. And the heirs of his/her body (fee tail)
3. For life (life estate)
4. For ___ years (term of years)
d. Estates in Land & Future Interests
i. Remember if you are alive, you have no heirs
e. 4 present possessory estates:
i. Fee Simple Absolute (FSA)
1. Largest, most comprehensive property right (Ultimate)
2. You have all the sticks in the bundle (biggest bundle)
3. Language:
a. O to A
b. Common Law: O to A and his heirs
4. Living people have no heirs, therefore while A is alive his
heirs have no interest in land, present or future
5. Any estate that is not a FSA will have a present interest
(Present interest is the unrestricted right to the immediate
use, possession, or enjoyment of property or the income
therefrom) and a remainder (remainder definition) (that
adds up to a FSA)
6. You can sell, devise, inherit, mortgage, etc.
7. FSA Lasts Forever no end point

ii. Fee Tail (generally abolished)


1. Language:
a. To A and to his heirs of his body has to do with
bloodline
2. If this is attempted now, will be a FSA
3. Anyone related can be an heir but only actual child by
blood (and his or her child, etc.) is heir of the body
4. Only transfers down the blood line, therefore not a FSA
because there are restrictions on who the heirs can be
5. The possessory interest is transferrable, but not the
interest to succeed
a. Only certain people can vest upon death of O
6. Problematic with respect to free transferability of land
iii. Defeasible Estates (Potentially Unlimited Ownership,
Subject to a Catch!)
a. Unlimited Ownership but subject to something
b. The can be no limitations on FSAs.
c. Defeasible Estates An estate that will terminate
prior to its natural end point upon occurrence of
some specified event
i. Compare: A life estate will terminate upon
the death of a grantee, but a defeasible life
estate will terminate at the earlier of the
death or occurrence of some specified event
ii. Purpose of such an estate is land use control
or behavior control
1. E.g., grant of land for as long as it is
used as a park (land use control)
2. Granting land for as long as grantee
refrains from drinking alcohol
(behavior control)
d. Three kinds of limitations
i. Determinable
ii. Subject to a condition subsequent
iii. Fee simple subject to executor limitation

2. Fee Simple Determinable (FSD)


a. Estate will end automatically upon the happening
of the limiting event
i. Future interest = possibility of reverter
b. Grantor does not have to do anything, the estate
goes back to him
c. Limitation is placed before the punctuation
d. Words
i. So long as
ii. While
iii. During
iv. Until
e. Examples: O to A until As youngest child reaches
25, then back to O; To A for so long as; to A
during or to A until; To A as long as she remains
a lawyer
f. If actualized, the forfeiture is automatic!
g. Just like FSA but subject to whatever the condition
is
3. Fee Simple Subject to Condition Subsequent
a. The estate will not end automatically
b. Future interest = right of re-entry where grantor
has to affirmatively take steps to take land back or
it will remain with grantee
c. Limitation is placed after the punctuation
d. Words
i. But if
ii. However
iii. Provided that
iv. On condition that
e. Examples: O to A, but if A sells liquor on the
property, then back to O; To A but if X event
occurs, Grantor reserves the right to re-enter and
retake
f. Not automatically terminated even if breach
occurs, Grantee is ok until Grantor exercises reentry
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g. Biggest distinguishing thing is that this is not


automatic Grantor has to exercise re-entry with
the power of termination
4. Fee Simple Subject to Executory Limitation
a. Similar to the preceding two, except that the
contingent remainder is in a 3rd party rather than
grantor
b. Examples: O to A, but when As youngest child
reaches 25, then to B; To A but if X event occurs
than to B
c. Accompanied by a shifting executory interest
d. Forfeiture is automatic but to a 3rd party instead of
Grantor
e. Accompany Future Interest is a Shifting Executory
Interest
(https://www.law.cornell.edu/wex/future_interest)
iv. Life Estate
1. Language:
a. O to A for life or To A for the life of B
b. O to A for life and A to B for 10 years
c. If A dies within 5 years, Bs interest terminates as
well
2. Tenant cannot commit waste
3. Reversion in the grantor; remainder in 3rd party if one is
specified.
4. Lasts for the life of the person to whom it was granted
a. If re-granted the measuring life is still the same,
i.e., that of the original grantee
5. Life estate + Remainder = Fee Simple Absolute
6. Problems with Life Estates
a. Sale cant sell it because you do not own
remainder
b. Lease cant lease beyond life tenants own life
c. Mortgage
d. Waste cant decrease value of the land or change
property drastically because it ultimately is not
yours
e. Excavation, etc.
f. Insurance

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g. Life tenant gets all of the proceeds if he decides to


insure the buildings

f. Future Interests
i. Possibility of reverter
1. Arises when an owner carves out his estate a
determinable estate. It is a future interest remaining in the
transferor or his heirs when a fee simple determinable is
created.
ii. Reversion
1. Reversion is an interest that is leftover in the owner when
he carves out an estate lesser than his own estate
2. Reversions are retained interests and are all vested in
transferor (NOT contingent)
3. Transfer must be:
a. 1) Vested AND
b. 2) less than the original estate
iii. Right of Entry
1. Arises out of an estate subject to condition subsequent,
whereas the owner retains the power to cut short or
terminate the estate, then the transferor has a right of
entry.
g. Third Partys Future Interests
i. Remainders (Always say remainder to what?)
a. A remainder is a future interest that sits around and
waits patiently until the termination of the
preceding possessory estate. The remainder than
moves in to possess as long as there is no condition

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2. Vested Remainder (not subject to RAP!)


a. It is given to an ascertained person at time of deed;
and
b. It is not subject to a condition precedent other than
natural termination (death). They may be subject to
a condition subsequent.
c. Vested remainder in.
i. Ascertained person AND no condition
precedent
d. Vests after natural termination of previous estate
e. 2 kinds
i. Vested indefeasibly = certain to divest
ii. Vested defeasibly = something can occur to
divest it partially or wholly (look at
commas)
3. Vested subject to open children (Class is either open
or closed)
a. This means that each class member's share is
subject to partial diminution, or partial decrease,
because additional takers, not yet ascertained, can
still qualify as class members.
b. To tell when the class has closed, apply the
common law rule of convenience. The rule of
convenience provides that the class closes
whenever any member can demand possession.

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4. Contingent Remainder/Precedent
a. It is given to an unascertained person (or unborn
person), or
b. It is made contingent upon some event occurring
other than the natural termination of the preceding
estates (basically subject to a condition precedent).
i. Contingent remainder in
ii. Unascertained person OR condition
precedent
c. Alternative contingencies
d. Remainders go into possession immediately after
the current estate is up if time passes, even a day
= executory interest
e. READ CLAUSE BY CLAUSE BEFORE
COMMA CONTINGENT REMAINDER,
AFTER COMMA VESTED
f. Always remember if A does not have children yet
they are contingent***
5. A future interest in a transferee that must, in order to
become possessory:
a. Divest or cut short some interest in another
transferee (shifting executory interest); OR
b. Divest the transferor in the future (springing
executory interest)
c. Its a future interest following an estate subject to
an executory limitation.
d. Executory interest in ..
i. Shifting take from grantee
ii. Springing take from grantor
iii. If vested -> next is executory interest
e. MUST SAY WHAT YOUR INTEREST
ATTACHES TO

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h. RAP http://legaldictionary.thefreedictionary.com/rule+against+perpetuities
No interest is good unless it must vest, if at all, not later than
twenty-one years after some life in being at the creation of the
interest
Modern: can you come up with a scenario where the interest could vest
outside of the 21 year period after someones death?
If yes, the interest is invalid as of today.
CREATE, KILL, COUNT
Look at the conveyance
Only people we care about are the A, B, Cs of the
conveyance (lives in being at the creation of the interest)
Create imaginary kid
a. The rule strikes any interest that does not vest within 21 years after
the end of life that exists at the time the property is granted. The
offending clause will be stricken from the deed. Rule strikes out any
interest that does not necessarily vest or fail with 100% certainty
within 21 years of the life currently in existence. The Rule considers
all aspects, no matter how crazy (fertile octogenarian and unborn
widow).
b. Remember: Each interest created must be tested separately. Just
because one interest satisfies the rule doesnt mean all of the interests
satisfies the rule. The validating life can also be different for each
interest.
c. REMEMBER: You measure the validity of the deed TODAY when
the deed is signed.
d. PICK A LIFE; GIVE THEM A KID; KILL THEM OFF & SEE
WHAT WILL HAPPEN IN 21 YEARS.
e. Policy to Prevent:
i. Furthering alienability of property
ii. Furthering productivity of property
iii. Preventing undue concentration of wealth
iv. Prohibiting excessive dead-hand control
v. Prevent uncertainty
f. Only applies to:

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i. Contingent Remainders
ii. Executory Interests
iii. Vested Remainders subject to open
1. A class gift is not vested in any member of the class until
all members have vested, all or nothing rule.
g. Four Step of RAP
i. Determine which future interests have been created
ii. Identify the conditions precedent to the vesting of the suspect
future interest (what has to happen before the future interest
vests)
iii. Find a validating life
iv. Ask: Will we know for certain, within 21 years of the death of
the validating life, whether the future interest will vest?
Example: O transfers a sum in trust for A for life, then to As
first child to reach 21. A is the validating life. You can prove
that any child of A who reaches 21 will necessarily reach 21
within 21 years of As death. The remainder must vest or fail
within this period; it cannot possibly vest more than 21 years
after A dies. The remainder is valid.
Example: O transfers a sum in trust for A for life, then to As
first child to reach 25. A has no child age 25 or older. There is
no validating life; the contingent remainder is void. You cannot
prove that As first child to reach 25 will do so within 21 years
after As death.
h. Validating life
i. Could be anyone, but should be someone connected to the deed.
A child in the womb is considered to be alive for this rule. The
validating life must be alive at the time of conveyance. The key
is that to be a validating life, a person must be someone who
can affect vesting or termination of the interest.
ii. A validating life can be anyone and be named (The Rockefeller
Heirs) in a saving clause, but must be alive at the time of
conveyance.
iii. At the validating lifes death, the 21 year clock begins ticking.
At the end of that period, the life will vest or it will fail.

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i. Class Gifts
1. Class Gifts: The all or nothing rule. A class gift is not
vested in any member of the class until the interests of all
members of the class have bested. A gift that is vested
subject to open is not vested under the RAP. For a glass
gift to be vested under RAP, the class must be closed
(that is, each and every member of the class must be in
existence and identified), and all conditions precedent for
each and every member of the class must be satisfied,
within the RAP period.
2. Gifts to groups of unascertained people like children or
grandchildren. They are contingent because they are
subject to open. Even a transfer that is vested but subject
to open, then RAP does not consider it vested. Since you
could have a smaller share than expected its a
contingent remainder. This is an all or nothing rule for
class gifts
3. Rule of Convenience Equitable doctrine. Under this
rule, transfers to classes may be treated as closed (and
therefor not subject to open) if any member of the class
can be vested (can take now). This ROC cuts off the new
entrance of the class/recipients of transfer.
j. RAP Danger Signs
i. The condition is not personal to someone
ii. There is an identified age or time period of more than 21 years
iii. An interest is given to the generation after the next generation
(ie: grandchildren)
iv. A conveyance requires that holder survive someone who is
merely described rather than names (e.g. the unborn widow)
v. An identified even that would normally happen well within 21
years, but might not

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vi. The holder wont be identified until the death of someone


merely described rather than named
k. Mechanics of the Rule
i. Fertile Octogenarian - It is assumed a person at any age can
have a child.
ii. Unborn Widow
iii. Rule of Convenience the rule cuts off the possibility of new
entrants to a class at the earlier of two times:
1. The natural end when the possibility of births or
adoptions ends (with the death of the ancestor).
2. The premature or artificial closing of the class through
the operation of the rule of convenience. If the gift has
been distributed at certain time then the class is seen as
closed, not open to future child.
IV.

Concurrent Estates
a. Several people own the same property at the same time (this is not an
absolute interest, but rather a concurrent interest)
b. Policy important for economic development
i. Protect family from creditors
ii. Pooling resources together to gain a property interest
c. Joint Tenancy
i. 2 or more people w/ equal ownership of property
ii. Language: Rights of survivorship
iii. Share is transferable inter vivos
1. JT may sell/transfer their estate w/o others
knowledge/consent
2. Estate is NOT devisable or descendible b/c of right of
survivorship
iv. Applies to joint bank accounts
v. 4 unities (right to survivorship must be expressed in deed to
create JT)
1. Time take at same time
2. Title same title (same deed for house)
3. Identical - equal shares
4. Possess right to possess the whole (50/50 still roam
about the 100%)
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vi. Termination of Joint Tenancy/Tenants in Common


1. Inter vivos sale (alters title)
2. Partition in kind: court orders physical division of
property
3. Partition in sale: court orders sale of the property with the
proceeds divided proprotionately
4. Voluntary agreement
vii. Creditors cannot reach the tenancy
1. Ex.: Bank Accounts
a. If a bank account is owned by joint tenants, then at
the death of one tenant, assuming there was the
intention to create a right of survivorship, the
survivor gets all of the money
d. Tenancy by the Entirety
i. Same 4 factors of Joint Tenancy + marriage
ii. Both people have to agree to any transfer cant just have 1 do
a transfer
e. Tenancy in Common
i. If you dont say TbE, courts will assume TiC
ii. Two or more tenants with NO rights of survivorship
iii. Each tenant has a separate but undivided interest in the property
iv. Each co-tenant owns an individual part, with the right to
possess the whole
v. Each interest is descendible, devisable & transferable (dont
need consent)
vi. Presumptive interest
f. Rights/Duties of Co-tenants
i. Possession
1. Each tenant has right to possess & enjoy the whole (% of
ownership doesnt matter)
ii. Rent
1. Rent: a co-tenant in exclusive possession is not liable to
the others for rent unless he ousted others
iii. Rent from 3rd Parties must provide rent to each owner
1. a co-tenant who leases all or part of the premises to a
third party must account to his co-tenants, providing
them with their fair share
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iv.

v.
vi.

vii.

viii.
ix.

a. Fair share is as much rental as is equal to his/her


undivided interest
Adverse Possession unless ouster co-tenant is in exclusive
possession and cannot acquire the whole through AP
1. AP: cant acquire through AP unless tenant ousted the
others
2. Ouster: when one co-tenant wrongfully excludes another
Carrying Costs
1. each tenant responsible for his/her fair share of premises
carrying costs
Repairs
1. the repairing co-tenant enjoys an affirmative right to
contribution for any reasonably necessary repairs that she
makes, provided that she has notified the others of the
need for the repairs
2. NOTE: MUST GIVE NOTICE!
Improvements
1. Improvements: no affirmative right to contribution for
improvements
a. When it is time to dissolve the co-tenancy, the
improver gets a credit equal to increase/decrease in
value
b. NOTE: Co-tenant could suffer a loss if the
improvement caused a diminution in value
Waste
1. Waste: co-tenant cannot commit waste &
2. Can bring an action for waste
Partition
1. Partition: there is a right to action for partition

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V.

Leasehold Estates
a. Landlord/Tenant law
i. Fair Housing Act
1. Know what you can and cannot discriminate against
2. Sexual Preference/Age/Political Affiliation are not
prohibited by Act
3. Unlawful to advertise for the sale or rental of a dwelling
that is
4. Small landlord renting basement you can discriminate
but not in your ad (policy is you have a right to choose
who is in your home)
b. 4 Leasehold Interests
i. Tenancy for years/term of years
1. Three Futures
a. Lease for a fixed period of time (if you know
termination state at start than its this lease
b. Notice is not necessary by definition you know
when ending
c. Statute of Frauds does apply greater than 1 year
has to be in writing
ii. Periodic tenancy
1. Leasehold interest that continues for successive or
continuous intervals until notice of termination
2. Can arise by implication in three ways:
a. Land is leased w/ no mention of duration, but
provision is made for the payment of rent at
regular intervals
b. An oral term of years that violate the SOF creates
an implied periodic tenancy
c. Holdover: if L elects to holdover a T who has
wrongfully stayed past the conclusion of the
original lease, an implied period tenancy arises
d. To terminate must have notice and notice must
be equal to half length of period.
i. If 1 year you need 6 month notice

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iii. Tenancy at will


1. No fixed duration
2. Lasts as long as either party wants this
3. However, note that unless the parties expressly agree to a
tenancy at will, the payment of regular rent will cause the
court to treat the tenancy as an implied periodic tenancy
iv. Tenancy at sufferance
1. Created when T has wrongfully heldover
a. L is still permitted to recover rent
2. Usually short lived b/c L will either evict T or hold the T
to a new lease
c. Tenant Duties
1. T is responsible for keeping the premises in reasonably
good repair
2. Tenant cannot commit waste:
a. Ameliorative waste: increases value
b. Permissive waste: neglect
c. Voluntary waste: overt, harmful acts of destruction
ii. Duty to pay rent
1. If T fails to pay rent & is in possession of the premises, L
has 2 options:
a. L can move to evict through appropriate judicial
proceeding
b. L can choose to continue the relationship with T
and then sue for the rent owed
2. Remember - Landlord cannot engage in self help!
3. Landlords options when Tenant fails to pay rent:
a. Surrender (lease is dissolved)
b. L can ignore the abandonment & hold tenant
responsible for unpaid rent, just as if T was still
there
i. In most states, L must attempt to mitigate
1. A L has a duty to mitigate damages
where he seeks to recover rents due
from a defaulting tenant
2. Ex. Reasonable effort to re-let an
apartment
3. Note: at CL, no duty to mitigate
22

c. L can re-let premises on the wrongdoer Ts behalf


& hold T liable for any deficiency
i. Duty to mitigate here: dont actually have to
succeed in finding new T, but must
demonstrate that you made reasonable, good
faith effort to do so
ii. Once apt. is re-let, L has 2 options:
1. Accept surrender of lease which
would free T1 from further payment
responsibilities; or
2. Rent on T1s account with any
additional money obtained going to
T1
d. Landlords duties
i. Duty to disclose
ii. Duty to deliver possession of the premises
1. English put tenant in legal title as well as physical
possession
2. American requires only legal possession
3. Legal Possession: T has lease that is above all others
iii. Duty to satisfy implied covenant of quiet enjoyment in every
residential & commercial lease (without interference from
landlord)
1. T has right to quiet use & enjoyment of premises w/o
interference from L
2. Breach:
a. L can breach this covenant by committing
constructive conviction
3. L has duty not to permit nuisance on premises
4. L has duty to control common areas
5. Can be breached by actually and wrongfully excluding
tenant from premises

23

6. Constructive eviction
a. Constructive eviction is the landlords interference
with the tenants enjoyment of the premises such
that the tenant has no choice but to vacate.
b. Substantial interference: Ts use & enjoyment
must be substantially interfered b/c of some act or
failure to act attributable by L
c. Notice: T must give L notice of the problem and L
must fail to act w/in a reasonable time
d. Goodbye: T must vacate the premises w/in
reasonable time after L fails to correct the problem
iv. Duty to satisfy implied warranty of habitability (residential
only)
1. Not waivable too fundamental (any attempt makes
lease a nullity)
2. Standard: premises must be fit for basic human habitation
a. May be supplied by housing code of independent
judicial conclusion
v. Ts Options if Warrant of Habitability is Breached (residential
only remember!)
1. Move: T can move out and terminate the lease
2. Repair & deduct: by statute, many states allow T to
make the repairs himself & then deduct the costs from
future rent
3. Remain: T can remain in possession & sue L for
damages
4. Reduce Rent: T may reduce rent in an amount equal to
the fair rental value of the premises in view of the defects
5. Note: Ts who do this normally need to put withheld rent
in Escrow to show good faith
vi. Standards premises must be fit for human habitation
1. Remedies for Breach:
a. Tenant can move
b. Repair & deduct
c. Remain (and sue landlord later)
d. Reduce rent (use escrow account for good faith)

24

e.

f.
g.

h.

i.

vii. Duty to refrain from breaching doctrine of retaliatory eviction


1. Under common law, Landlord could resort to self-help
but due process discourages self-help. Modern rule = go
through the courts
2. Doctrine of Retaliatory Eviction: endeavors to protect the
good faith whistleblower, who shouldnt be chilled from
making lawful complaints for fear of incurring landlords
reprisals
3. Self-help: under CL , L entitled to possession could resort
to self-help w/o fear of civil liability as long as he used
no more force than necessary
Assignment
i. When original T transfers the entire leasehold interest
1. L -> T1 -> T2
ii. L & T1 will have privity of K (they exchanged original
promissory words)
1. L & T1 will be secondarily liable to each other
iii. L & T2 will have privity of estate
1. L & T2 are liable to each other for all covenants or
promise in the original lease
iv. T1 & T2 will have privity of K (tenants made agreement with
each other)
Privity of Estate is = Conveyance of right of possession
Privity of Contract = agreed upon legal terms
i. Original tenant transfers the entire leasehold interest
ii. L to T1 to T2. Landlord and T1 will have privity of contract.
Landlord and T2 will have privity of estate. Tenants will have
privity of contract with each other.
Sublease
i. When original T transfers less than the entire leasehold interest
1. Relationship bwtn L and T1 remains fully intact
2. Subleasee (T2) is responsible to T1
ii. L can only refuse subleasee for financial considerations
Liability Between Tenants
i. Tenants who are in privity of K can go after each other
ii. And, whoever ends up with privity of estate is liable to all other
tenants
iii. (the last person in the chain with privity of estate always gets
screwed)
25

VI.

Land Transactions
a. Every conveyance of RE consists of a 2-Step Process:
i. 1. The land K, which endures until Step #2
ii. 2. The closing, where the deed becomes the operative doc
1. 4 Items to Consider for K for Sale of Land
a. Statute of Frauds
b. Sellers Duty to Provide Marketable Title
c. The Sellers Duty to Disclose Defects
d. The Sellers Implied Warranty of Quality
b. Land K
i. Land K & SoF (in writing, signed by the party to be bound)
ii. Statute of Fraud Requirements:
1. Must be in writing
2. Signed by the party who is to be bound (aka the party we
are suing)
3. Describe the RE and terms
4. State the price
a. Specific price if set; or
b. Refer to price and method which will be ussed to
fix it
iii. Exceptions to Statute of Fraud Requirements:
a. Part Performance
i. Allows enforcement of oral agreement when
particular acts have been performed by one
of the parties to the agreement
ii. Only available if the Buyer takes physical
possession of the land AND:
1. Buyer pays all or part of the purchase
price
2. Buyer makes valuable improvements;
or
3. shows he would suffer irreparable
harm if the K is not enforced

26

b. Estoppel
i. Enforcement or an oral agreement to prevent
some sort of justice
ii. Only applies when:
1. An unconscionable injury would
result from denying enforcement of
the oral K after one party has been
induced by the other seriously to
change his position in reliance on the
K; or
2. When unjust enrichment would result
if a party who has received a benefit
of the others performance were
allowed to rely upon SoF
iv. Equitable Conversion
1. Equity regards as done that which ought to be done, once
the contract is signed. So buyer is deemed the owner of
the land subject to the condition that he remit the balance
of the purchasing price at closing.
2. If the property is destroyed in the gap between the K and
the closing, through no fault of either party, the buyer
bears the risk of loss unless the K states otherwise
v. Implied Promises
1. Marketable Title (this is implied)
a. Title that is free from reasonable doubt
i. That means:
1. Title free from lawsuits and threat of
litigation
2. Standard: reasonable person standard
3. Public restrictions will make title
automatically unmarketable since it is
easily discoverable (via public
records)

27

b. 3 times title will be unmarketable:


i. Adverse Possession (rationale: S must be
able to provide good record title, cant if
obtained via AP)
ii. Encumbrances (servitudes or liens on the
property but these can be waived by the
buyer)
iii. Zoning Violations (zoning ordinance
violation not just zoning ordinance
presence)
2. Sellers duty to disclose (Buyers Beware!)
a. Majority of states hold the seller liable for not
disclosing latent or material problems this can
depend on the jurisdiction (haunting house case)
b. Seller responsible for material lies or material
omissions
c. In every land K, the seller implicitly promises not
to make any false statements of material fact
d. However, there is no implied warranties of fitness
or habitability
e. EXCEPTION: sale of new homes by buildervendors
vi. Merger Doctrine
1. When a deed is executed, the previous K merges into the
deed and the deed is the final agreement
2. Buyer is still able to sue for misrepresentation of a
material fact or fraud
vii. Sellers Implied Warranty of Quality (Can be waived)
1. A builder of a new home or building gives an implied
warranty of quality, which can be extended to subsequent
purchases
2. Requires an adequate, workman-like job

28

viii. Remedies for Non-Breaching Party of the Sales K


1. Damages
a. Difference between what property ultimately sold
for and FMV at the time of the breach
2. Retention of the deposit (for sellers) or restitution/return
of deposit (for buyers)
3. Specific Performance of the K
4. Generally, the non-breaching party can determine what
remedy they want
c. Closing
i. Must have:
1. Execution of deed
a. Has to be in writing
b. Signed by Grantor
c. Formal Statutory Requirements
2. Delivery of deed (focus is on intent of the Grantor)
a. Delivery occurs when the grantor manifests the
present intent to part with legal control of the
land
b. Doesnt matter whether the deed instrument is
actually or literally transferred to the grantee
3. Conditional delivery
a. This is when you place a deed in the hands of a 3rd
party until an event happens and then when it does
deed is delivered (this doesnt usually happen)

29

VII. Deeds
a. Deed procured by fraud:
i. VALID BUT VOIDABLE by the grantor in an action against
the grantee, but a subsequent bona fide purchaser from the
grantee, who is unaware of the fraud, prevails over the grantor
ii. Only applies to purchasers
b. Remember a forged Deed is void
c. However, the grantor whose signature appears on the deed prevails
d. ONLY applied to purchasers (not people who inherit land or receive it
as a gift)
i. Essential Elements of the Deed
ii. Grantor
iii. Grantee
iv. Words of grant
v. Description of the land involved
1. a deed MUST contain a description of the parcel of land
conveyed that locates the parcel by describing its
boundaries
vi. Signature of the grantor
vii. Attestation or acknowledgement (sometimes)
viii. Consideration NOT required (but you should include it)
1. should state that some consideration is being exchanged,
but you do not need to defend exactly how much
e. Types
i. General warranty deed
1. Best and most expensive deed
2. Warrants title from 6 defects, even if the defects arose
before or after the grantor took title
ii. Special warranty deed
1. Warrants only against Grantors own acts but not the acts
of others
2. Contains all or some of the covenants covered in General
Warranty Deed
3. Warrants only defects which arise during the grantors
time of holding title
4. Not liable for any defects which arose before the
grantors ownership
5. Basically, Grantor is saying that he has not created or
suffered a defect during his own ownership period
30

iii. Quit claim deed


1. No warranties of any kind
2. Merely conveys whatever the grantor has (and he may
not have anything
f. 6 covenants in general warranty deed
g. Present Covenants
i. Breached, if at all, at the moment the deed is delivered
ii. SOL begins at delivery
iii. Does not run with the land it is assigned
h. Future Covenants
1. Breached, if at all, when the grantee is actually, or
constructively, evicted at some time in the future
2. SOL beings when grantees possession is disturbed
3. It travels with the property
ii. Covenant of Seisin (present)
1. Grantor promises that he owns the estate being conveyed
in the deed
2. Focus is on ownership
3. Remedy is to return all or portion of the purchase price
iii. Covenant of Right to Convey (present)
1. Grantor promises that he has the power or authority to
convey the property
iv. Covenant against Encumbrances (mortgages/liens/easements)
(present)
1. Grantor promises that there are no liens, mortgages,
easements, covenants restricting use, or other
encumbrances on the property (other than those
specifically excepted in the deed)
2. Remedy is the cost to remove the encumbrance (if
possible), or difference in the value
v. Covenant of General Warranty (future)
1. Will defend against lawful claims by an usurping of
superior title
2. Grantor promises to defend against lawful claims of
superior title, & will compensate the grantee for any loss
suffered by the assertion of such superior title
3. Lawful claim is a claim that is ultimately successful
4. Basically, the grantor is saying no one has better title,
but even if they do, I have you covered
31

vi. Covenant of Quiet Enjoyment (future)


1. Superior title warrants against losing enjoyment
2. Grantor promises that the grantee will not be disturbed in
his possession or enjoyment of the property by
someones successful assertion of a superior title to the
property
3. Focus is on possession
4. Basically, asserting that there is no one else with better
title to the land
vii. Covenant of Further Assurances (future)
1. Promise that Grantor will execute any other documents to
preserve title (clerical fixing mistakes)
2. Grantor promises to do whatever else is reasonably
necessary to perfect the conveyed title, if it turns out to
be imperfect
3. For ex., if the grantor signed the Deed in black, but
should have signed in blue ink, he agrees to correct it
VIII. Recording System
a. Recording statutes are triggered when there are incompatible deeds &
there is a questions as to who should get the land
b. They do NOT affect the validity of the deed
c. Purpose: to provide notice to the public
d. Items that can be recorded:
i. Any doc creating interest in a piece of land deed, mortgage,
lease, etc
ii. Judgment or decree affecting title to land
iii. Wills or affidavits of heirship
e. Common Law
i. Still the law unless party qualifies for protection under
recording act
ii. Focus is on who got the land first
1. If a grantor gave his rights to A, he has nothing left to
give to anyone else
f. Modern View: Only applies to Subsequent Purchaser for Value/Bona
Fide Purchaser
i. A subsequent bona fide purchaser is protected against prior
unrecorded interests

32

g.
h.

a.

a.

ii. Bona Fide Purchaser:


1. Purchased the land for value (not a gift or via will); AND
2. Was not on notice that someone else owned the land
Does not apply to donees b/c they did not purchase for value
To be protected, you must comply w/ all requirements of the recording
statute
1. Actual Notice
a. When the purchaser actually & literally learns that
the seller is a double dealer, & has already
conveyed the property to someone else
2. Inquiry Notice (based on the facts a reasonable person
would make an inquiry)
a. (Constructive Notice): whether the purchaser
looks or not, he is on notice of whatever a routine
of the inspection of the property would reveal.
Buyers have a duty to inspect before closing
b. If at or before closing someone is in possession of
the property, the purchaser is on inquiry notice of
the fact, regardless of whether they have bothered
to examine the premises or not
3. Record Notice
a. If your Deed is recorded on land records, you
should know!
b. when at the time the purchaser takes the land,
someone elses deed for the property was properly
recorded w/in the chain of title
The Indexes
a. Look in the grantee index to see how A go the land
i. A from B, B from C, C from D, D from E, etc.
b. Look in the grantor index & make sure it lines up
i. E to D, D to C, C to B, B to A
Chain of Title
a. Chain of title is the sequence of recorded documents capable of
giving notice to subsequent purchasers
b. It is established through a title search of the grantor/grantee
index

33

a. The Wild Deed Problem


a. A deed that was recorded, but recorded improperly
b. An improperly recorded deed cannot give record notice of its
contents, b/c it is not attached to the chain of the title & will not
be discovered by a title searcher. It is treated as if it was
never recorded at all
a. Estoppel by Deed Problem
a. When seller conveys land w/o actually owning it first
b. If seller later gets title, it shoots back in time to the initial
conveyance and the seller is estopped from denying the validity
of the initial transfer
b. Notice Statute
i. Second purchaser if they took without notice will
prevail, no matter who recorded first
ii. Last bona fide purchaser wins
iii. Bona fide purchaser:
a. Actually bought the land for value
b. Did not have notice that someone got there
first
iv. UNLIKE a race statute, a subsequent purchaser can win
even if he doesnt record
c. Race Statute
i. The person who wins the race to record wins
ii. First to record wins
iii. Doesnt matter if subsequent purchaser has actual knowledge
of a prior purchases claim
d. Race-Notice Statute
i. Subsequent purchaser protected if he was without notice of a
prior instrument and records before the prior deed is recorded.
ii. A subsequent purchaser only wins IF:
1. He is a bona fide purchaser (w/o notice of prior
instrument); AND
2. He wins the race to record
i. Jurisdiction Morse/Woods
1. Morse: Subsequent purchaser only needs to Ex.: trace
title back in grantee index, and then forward in grantor
index from immediate grantor

34

2. Woods: Subsequent purchaser needs to trace title back in


grantee index, and trace title all the way forward in
grantor index

IX.

j. Marketable Title Acts


1. These are designed to limit the relevant chain of title to
some specified period of recent history
2. If the chain of title can be traced back beyond this time
frame, most claims based on an older instrument are
barred by the statute, unless they are incorporated into a
latter instrument recorded during the marketable time
period
Servitudes
i. Right of A to exercise some control over B. Persona A is
typically also a landowner
b. Easement
1. An easement is a grant of a non-possessory property
interest in land
2. Dominant tenement: parcel that derives the benefit as a
consequences of the easement
3. Servient tenement: the parcel that bears the burden of
the easement on your land
4. Unless specified, easements last forever
5. They can be affirmative or negative
ii. Types
1. Affirmative
a. Gives the holder the right to do something on
anothers land (servient tenement)
2. Negative
a. Gives the holder the right to compel the servient
land-owner to refrain from doing something that
would otherwise be allowed
b. Usually involves: light, air, support (mining),
streamwater
c. These are NOT natural/automatic rights, but are
only created by an express, signed writing, called
the deed of easement

35

3. Appurtenant (If unclear, we assume its appurtenant)


a. Easement attached to land. Must be dominant and
subservient (burden) land.
b. The easement is appurtenant when it benefits the
easement holder in his physical use or enjoyment
of his own land
c. 2 parcels of land must be involved:
d. 1. Benefitted parcel: derives the advantage or
gain thanks to the easement (dominant tenement)
e. 2. Burdened parcel: suffers the imposition of the
easement (servient tenement)
4. Gross
a. Not dependent on land (power company can cross
over)
b. Easement gives the right to some person without
regard to ownership of land
iii. SoF
1. Easements must comply with SoF
iv. Creation of Affirmative Easements (like adverse possession)
1. Prescription
a. Easement by Adverse Possession
b. Ex.: A, a trespasser, cuts through Bs property
every day on the way to work. A may be
transformed into the holder of an affirmative
easement if:
c. Continuous patter of use for statutory period
(usually 10 years)
d. Open & notorious (visible)
e. Actual (physically traveling on land)
f. Hostile (without consent)
g. Remember, just like w/ AP, permission defeats the
acquisition of an easement by prescription

36

2. Implication
a. When there is a particular use that occurs on a
parcel of land that should survive the division of
the parcel
b. Courts will imply an easement from that prior or
existing use if:
i. The use was apparent at the time of the
division; and
ii. The parties expected & intended that the use
would survive division b/c it is reasonable
necessary to the now dominant tenements
use & enjoyment
3. Necessity
a. This is the landlocked setting at the time the land is
split up
b. An easement of right of way will be implied by
necessity of the grantor conveys a portion of his
land w/ no way out, except over some part of
grantors remaining land
c. Must be NECESSARY not just convenient
4. Grant (Deed of Easement)
a. Note, the SoF applies since an easement is a
property interest in land
b. Therefore, if the easement is to last over 1 year, it
has to be in writing (the writing is known as a deed
of easement)
v. Assignability of Easements (can happen sometimes)
1. An easement appurtenant transfers automatically with
the dominant tenement
2. Doesnt matter whether it is even mentioned in the
transfer
3. An easement appurtenant transfers automatically with the
servient tenement UNLESS the new owner is a bona
fide purchaser with no notice of the easement

37

4. The easement in gross is not transferable UNLESS it is


for commercial purposes (unless the parties intend to
permit assignment of the easement in gross)

vi. Termination of Easements


1. Estoppel
a. A tells B that A will no longer use easement; B
puts in pool; A cannot come back and enforce it
b. The servient owner materially changes position in
reasonable reliance on the easement holders
assurances that the easement will no longer be
enforced
2. Necessity
a. When necessity ends, easement ends unless there
was an easement by necessity and an expressive
grant would keep easement in effect
b. Easements created by necessity expire as soon as
the necessity ends
c. NOTE: if easement, attributable to necessity, was
nonetheless created by express grant, it will not
end with the necessity
3. Destruction
a. Destruction, other than through willful conduct of
the servient owner, will terminate the easement
4. Condemnation
a. Government/Eminent Domain
b. Condemnation of the servient tenement, by
governmental eminent domain power, will end the
easement
5. Release
a. In writing required
b. Release, in writing, given by the easement holder
to the servient landowner. The written release is
the most customary way to terminate an easement
6. Abandonment
a. The easement holder must demonstrate, by
physical action, the intent to never make use of the
easement again
38

b. Once an easement is abandoned, its gone

7. Merger
a. If B can cross over As land via easement, later B
buys As land, they merge and easement is
extinguished.
b. The easement is terminated when title to the
easement and title to the servient tenement become
vested in the same person
8. Prescription
a. An easement can be terminated when the servient
owner interferes w/ it in accordance w/ elements of
AP
c. License (far different than easement)
i. Parking at Garage
ii. Not subject to SoF
iii. Unlike an easement, a license is freely revocable at the will of
the licensor
iv. Length of license depends on purpose for which it was granted
v. It is a mere privilege to enter anothers land for some narrow
purpose
vi. Ex.: newspaper carrier, ticket holder, parking garage patron
1. License is Revocable in Two Ways:
a. When the license is coupled w/ an interest
i. Ex. O grants to A the right to take timber
from Blackacre, owned by O: A has an
interest (getting the timber) & an irrevocable
licenses to enter the land & take the timber
b. Estoppel
i. Applies to bar revocation when the licensee
has invested substantial money or labor or
both in reasonable reliance on licenses
continuation
d. Covenants (Remedy = Damages)
1. Promise to do or not do something in relation to the land

39

2. Generally, a covenant is a promise to do or not do


something related to land
3. It differs from an easement, because it is NOT the grant
of a property interest

i. Real Covenant
1. A real covenant is one that is capable of running with
estate in land
2. It is able to bind the successors to the originally
contracting or covenanting parties
3. A real covenant must be in writing and satisfy the SoF
4. An equitable servitude, does not always have to be in
writing it can be implied
ii. Restrictive (most covenants fall under this category)
1. A promise to refrain from doing something with the land
2. A promise to refrain from doing something relating to the
land
3. Ex. Promising not to build a store on my property
iii. Affirmative
1. A promise to do something related to the land
2. A promise to do something related to the land
3. Ex. I promise to maintain in good repair our fence, pay
condo dues, etc
iv. Parts
1. Burden (servient tenement)
2. Benefit (dominant tenement)
v. Running w/ land
a. Both Horizontal & Vertical privity are required for
the burden to run.
1. Horizontal privity (required for the benefit to run)
a. A the time of obligations/promises, it was all part
of a single parcel of land
b. Focus is on the relationship between A & B
c. They must have been in succession of estate when
they entered the agreement (privity of estate)
d. This simply means that there was some sort of
Real Estate transaction (grantor-grantee, landlordtenant, mortgagor-mortgagee, debtor-creditor) or in
40

some other relationship where they shared some


other servitude in common, in addition to the
covenant now in question
e. (this is difficult to satisfy)

2. Vertical privity
a. Whether the original owner or subsequent have the
same estate
b. Focus is on the relationship between A and A-1
c. Must be non-hostile
d. (basically means that there cant be vertical privity
if land is acquired via adverse possession)
vi. Requirements for whether the Covenant will run with the land
1. Writing Original promise must be in writing
2. Intent - original parties must have intended that the
promise would bind successors
3. Notice
a. A-1 must have had some form of notice of the
promise when he took
b. Actual: A-1 was literally & actually informed of
the existence of the covenant
c. Inquiry: the lay of the land should have informed
A-1 of the covenant
d. Record: Public records should have informed A-1
of the covenant
4. Touch & concern Promise must touch and concern the
land
5. Privity
vii. Requirements for whether the Benefit will run with the land
1. Four elements:
2. 1. Writing: original promise must have been in writing
3. 2. Intent: original parties must have intended that the
benefit would run
4. 3. Touch & Concern: promise must affect the parties in
their legal relations as landowners; must pertain to the
land
5. Vertical Privity ONLY

41

e. Unlike w/ burden, the person who succeeds for


benefit can actually have a lesser interest carved
out of the estate

e. Equitable servitudes (Remedy = Injunction)


1. A promise that equity will enforce against successors and
accompanied by injunctive relief.
2. Unlike a real covenant (which burdens the estate), an
equitable servitude sinks into the soil and burdens the
land itself
ii. Creation:
1. Writing
a. in general (but not always) the original promise
was in writing
2. Intent
a. the originally promising parties intended that the
promise would bind successors
3. Touch & concern
a. the promise affects the parties in their legal
relations as landowners; it pertains to land
4. Notice
a. the assignees or successors of the originally
promising parties had some form of notice of the
promise (actual or constructive)
iii. Implied Equitable Servitude
1. Occurs when sub-divider conveys lots through deeds that
contain a common restriction, but later conveys one or
more of the remaining lots through deeds containing no
such restriction
a. 2 requirements:
i. When the sales began, the sub-divider had a
general scheme of residential development
which included the lot in question
ii. The had some sort of notice
(actual/constructive) of the restriction when
he took the land

42

EMINENT DOMAIN
1.) Defined. Eminent domain is the government's Fifth Amendment power,
made binding on the states by the Fourteenth Amendment, to take private property
for public use in exchange for just compensation.
2.) Explicit takings. Explicit takings are overt acts of governmental
condemnation. For example, government comes knocking on your door and says,
We're sorry. But we must condemn your beloved Blackacre to make way for a
public highway. If, after notice and an opportunity to be heard, the taking is
deemed constitutionally permissible, the government must pay you just
compensation for its taking.
3.) Implicit or regulatory takings. Here, a private landowner claims that a
government regulation, although never intended to be a taking, nonetheless has the
same effect. The given regulation has significantly compromised that property
owner's reasonable, investment-backed expectations.
There are several tests that the U.S. Supreme Court has developed to assess
when a governmental regulation has gone so far as to be deemed a regulatory
taking:
A.) The categorical taking. This occurs when the given regulation works an
economic wipeout of the landowner's investment. For example, you buy land in
North Carolina for development. Three months later, the government imposes a
ban on development, to protect the beachfront. Note that you have not been the
target of an overt act of governmental condemnation. You still own the property.
You just cannot do anything with it. Hence, you argue that the regulation is an
implicit or regulatory taking, requiring that just compensation be paid to you. You
will succeed. The governmental ban or moratorium has worked a categorical,
wholesale deprivation of value to you.
B.) The reasonable return test. If the landowner is left with a reasonable
return on his investment, even in the presence of the governmental regulation, a
taking has not occurred. For example, you own Grand Central Terminal. The City
of New York now determines that Grand Central is to be designated a landmark,
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within the scope of the City's Landmark Preservation Act. That statute precludes
you from building atop the Terminal. You argue that the statute is a regulatory
taking. It has sufficiently diminished your investment-backed expectations. You
will lose, so long as you enjoy a reasonable return on your investment even
with the burdens of the landmark designation. Thus, if you can still operate the
Terminal productively, leasing out its existing space, for example, your glass is still
somewhat full.
C.) The diminution in value test. The diminution in value test is the flipside of the reasonable return coin. Now, instead of asking how full the glass is, ask
how empty it is, as a consequence of the given government regulation. For
example, Pennsylvania enacts a statute that precludes subsurface coal mining, in
order to avoid further harm to the land. Coal mining companies claim that the
regulation goes too far. It has worked too significant a diminution in value to them.
They may prevail, on the basis that the glass is nearly empty.
4.) Remedies for the regulatory taking. If the landowner succeeds with its
implicit taking claim, government must either compensate the owner or terminate
the regulation and pay the owner for damages that occurred while the regulation
was in effect. Hence, even temporary takings are compensable. 5.) Exactions.
Exactions are those amenities that government seeks in exchange for granting
permission to build. For example, suppose that you are a developer seeking
permission to build a 200unit residential development in the town of Utopia. The
town tells you that it will grant you the requisite permit if you agree to provide
several new streetlights, a small park and wider roads. Government, in other
words, is seeking exactions from you. As you might imagine, exactions are
inherently suspect. Left unchecked, they could become tantamount to takings
without just compensation. To protect against governmental abuse of power,
exactions must pass constitutional scrutiny. Government's demands must be
reasonably related, both in nature and scope, to the impact of the proposed
development. If they are not, the exactions are unconstitutional.

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ZONING
1.) Defined. Zoning is an inherit power of the state, derivative of its police
powers. We allow government to enact zoning ordinances to reasonably control
land use, for the protection of general health, safety and welfare.
2.) The variance. The variance is the principal means to achieve flexibility
in zoning. A variance is permission to depart from the literal requirements of a
zoning ordinance.
There are two kinds of variance: the area variance and the use variance.
a.) The area variance: The area variance deals with problems of compatible use
but ill-fit. The proponent of an area variance must satisfy both prongs of a twoprong test. She must demonstrate:
i.) undue hardship that has not been self-imposed; and
ii.) that the grant of the variance will not work diminution to neighboring property
values.
For example, A wishes to add a glass-enclosed front porch to her home. To do so,
she needs an area variance. Otherwise, her premises will be in violation of the
township's minimum setback requirement, which is a zoning ordinance that
requires that all homes be situated a certain minimum number of feet away from
the front curb. A's proposed addition presents a problem of illfit. She must petition
the township's Zoning Board of Adjustment for an area variance. To succeed, A
must demonstrate undue hardship. For instance, perhaps her child suffers from
respiratory maladies, and the pediatrician has indicated that the glass enclosure will
help to abate those ills. Additionally, in fairness to the neighbors, A must show that
the variance, if granted, will not adversely affect surrounding property values.

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b.) The use variance. The use variance is harder to obtain than the area variance.
The use variance has its proponent seeking to depart from the list of uses that are
permitted in a given zone. For example, A wishes to build a convenience store in a
district zoned exclusively for residential purposes. To succeed, A must obtain a use
variance from the Zoning Board of Adjustment. The use variance is granted only in
the presence of very exacting special circumstances.
3.) The nonconforming use. The nonconforming use is a once lawful, existing use
that is now rendered nonconforming because of a new zoning ordinance. This now
nonconforming use cannot be eliminated all at once, unless just compensation is
paid. Otherwise, its wholesale elimination would be tantamount to an
unconstitutional governmental taking without compensation. For example, A has
long operated a brickyard in the township of Utopia. Today, the township enacts an
ordinance prohibiting the operation of all junkyards. The township's enforcement
of that ordinance to shut down A's operation would be tantamount to a taking,
warranting the payment to A of just compensation. To escape the takings
conclusion, some jurisdictions provide for amortization. Defined by statute,
amortization is the gradual elimination, or the gradual phasing-out, of the now
nonconforming use.

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