Property PMBR CD #1 Perhaps the most difficult part of the bar exam.
Key to success on the bar exam is organization. 5 classifications of interest in Real Property a. Freehold estates give possession to property under some legal title. i. Fee simple ii. Fee tail iii. Life estates b. Non-freehold estates give mere possession, no legal title. (landlord-tenant law) i. Tenancy for years ii. Tenancy from period to period iii. Tenancy at will iv. Tenancy at sufferance c. Concurrent estates i. Joint tenancy ii. Tenancy by the entirety iii. Tenancy in common d. Nonpossessory interests in land (incorporeal) i. Easements ii. Profits iii. Covenants running with the land iv. Equitable servitudes v. Licenses e. Future interests i. Reversions ii. Possibility of reverter iii. Right of re-entry iv. Remainders 1. Contingent remainders 2. Vested remainders v. Executory interests f. Rights incident to possession i. Adverse possession ii. Lateral subjacent support iii. Water rights g. Conveyancing i. Recording statutes ii. Deeds iii. Equitable conversion doctrine h. Mortgages Freehold estates – give possession to land under some legal title a. Fee simple absolute – Potentially infinite duration – maximum estate person can own.
2 i. Most extensive estate a person can own; largest estate known to law ii. Largest estate known, potentially of infinite duration iii. Common law: To convey, words at common law had to be “To B (the grantee) and his heirs” 1. The words “and his heirs” used in a deed were construed as words of limitation. a. They described the quantum / size of the estate that was transferred to the grantee. iv. At Modern law, we designate the owner to the grantee X conveys land to B. v. Words of purchase indicate the grantee or the person that takes the property. vi. Conveyance to B would create a fee simple absolute today without necessarily including “and his heirs” or “and her heirs.” b. Fee simple defeasible i. Fee simple determinable 1. Fee simple estate created to continue until the happening or non-happening of a certain event 2. Possibility of reverter a. When that event occurs, the estate terminates automatically; automatic reversion to the grantor upon the happening or non-happening of that stated event. 3. Ex: X, owner in fee, conveys Blackacre to A, so long as the property is used as a school. a. If the property is no longer used as a school, title automatically reverts to the grantor upon the happening or non-happening of that stated event. 4. Words for fee simple determinable: a. “so long as” b. “during” c. “until” d. “while” 5. Fee simple determinable has a possibility of reverter since the grantee’s estate may end on the happening or nonhappening of an event 6. Possibility of reverter: Possibility that event occurs; but if that event does occur (i.e., when the property is no longer used as a school, for residential purposes, or where liquor is sold on property), there is an automatic reversion to the grantor on the happening or non-happening of a stated event. 7. Automatic reversion ii. Fee simple subject to condition subsequent
3 1. Fee simple estate that may be terminated on the happening or nonhappening of a stated event or contingency. 2. Ex: X, owner in fee, conveys Blackacre to A and his heirs, but if the land is not used as a farm, X may reenter the land. 3. Right of re-entry for broken condition 4. When the event occurs (if land no longer used as a school, if liquor is sold on the premises), the grantor or his heirs have the right / option of re-entering and reacquiring ownership to the property or possession to the property. 5. Compare: Fee simple determinable – automatic reversion back to the grantor on the happening of a stated event; right of re-entry – reversion is not automatic. 6. Words: (words of condition) a. “On condition that” b. “Subject to the condition that” c. “But if” iii. Fee simple subject to executory interest 1. Fee simple estate whereupon the happening or nonhappening of a stated event, ownership passes from one grantee to another grantee. 2. Shifting executory interest: a. Ownership passes from one grantee to another (i.e., from A to B). b. Ex: X, owner in fee, conveys Blackacre to A and his heirs, as long as the land is used as a farm, and if the land is not used as a farm, then to B and his heirs. c. Ex: X, owner of Blackacre in fee simple, conveys Blackacre to A and his heirs, but if A dies without issue living at his death, then to B and his heirs. i. Title passes from A to B if A dies without any issue living at his death. 3. Springing executory interest a. Ownership passes from the grantee back to the grantor; then, after some time, ownership passes from the grantor to another grantee. c. Fee tail (rarely tested on the exam) i. At common law, a fee tail was usually created by the words: 1. “To B (or the grantee) and the heirs of his body” ii. Inheritance was restricted to the lineal descendants of the grantee. iii. It was permissible for the grantor of a fee tail to restrict the inheritance to a particular group of lineal descendants of the grantee by proper words of limitation. ** 1. Ex: A grant to a male and the male heirs of his body a. This created a fee tail male. 2. Ex: A grant to a female and the female heirs of her body.
4 a. This created a fee tail female. iv. Lineal heirs for purposes of a fee tail are sons, daughters, grandchildren, and great-grandchildren. v. Collateral heirs include cousins, nieces, nephews, uncles, and aunts. d. Life estate i. Freehold estate where the duration is measured by the life or lives of one or more human beings. ii. Ex: X conveys Blackacre to A for life. 1. A has a life estate. iii. A life estate pour autre vie is a freehold estate where the duration is measured by someone else other than the grantee. iv. Ex: X conveys Blackacre to A for the life of B. 1. Example of life estate pour autre vie where duration of estate is measured by someone other than grantee. v. Dower 1. Widow is entitled, on the death of her husband, to a life estate of 1/3 of the lands her husband was seised in fee simple during the marriage. vi. Curtesy 1. Tenancy by curtesy is a life estate to which the husband was entitled to all of his wife’s lands. 2. Requirements: a. Husband had to be married to wife b. Wife must be seised in the land in fee simple or fee tail during the marriage. c. Wife must have issue born by the husband. d. Wife must predecease the husband. Future interests a. Reversions i. Estate remaining in the grantor who has conveyed a lesser estate than that owned by the grantor. ii. Ex: X, owner in fee, conveys Blackacre to B for life. 1. Here, a reversion back to the grantor iii. A reversion arises as a matter of simple subtraction. 1. If A has 5 apples and gives 3 away, he has 2 apples left. 2. 2 apples left, like a reversion in real property. 3. Here, X owns a fee simple estate. 4. He (X) conveys only a life estate, so hence the interest left in the grantor is a reversion. iv. Created where the grantor creates an expirable or a lesser estate compared to what he owns. 1. If the grantor is the owner of a fee simple estate and conveys a life estate, at the expiration of the life estate, you have a reversion back to the grantor. 2. Fee tail, life estate, contingent remainder that does not vest.
5 b. Possibility of reverter (fee simple determinable) i. Interest retained by the grantor of a determinable estate for a fee simple determinable ii. Possibility of reverter, once the stated event occurs, the estate ripens into an automatic reversion – a possessory estate – automatic reversion back to the grantor. 1. Possibility b/c if the event does not occur, obviously no reversion back to the grantor. iii. X, owner in fee, conveys land to A, as long as the land is farmed. 1. X has possibility of reverter. 2. If the land is not farmed, ownership reverts back to the grantor on the happening of that stated event. iv. Created where a grantor creates a fee simple determinable c. Rights of re-entry for condition broken i. Also called power of termination ii. Created in the grantor subject to a condition subsequent. iii. Right of re-entry means that there isn’t an automatic reversion of the grantor upon the happening or non-happening of that stated event. iv. Rather, the grantor or his heirs have the option of re-entry ** v. Created when the grantor creates a fee simple on condition subsequent. d. Remainders – Future interest created in a third person which is intended to take effect after the natural termination of the preceding estate. i. Every remainder must be preceded by either a fee tail or a life estate. ii. Contingent (not vested) 1. Any remainder which is created in favor of an ascertained person, but is subject to a condition precedent, or is created in favor of an unborn or unascertained person. 2. Ex: To B for life, remainder to C and his heirs, if C marries before B’s death. a. C has a remainder contingent upon his marriage before B dies. 3. Ex: A to B for life, remainder to C for life, if C survives X. a. C has a contingent remainder upon X’s predeceasing both B and C because the contingency of C’s surviving X must happen on or before the termination of B’s life estate. iii. Vested 1. Remainder created in an ascertained and existing person that is not subject to any condition precedent except the normal termination of the preceding estate. 2. Ex: A owner in fee conveys Blackacre to B for life with remainder to C and his heirs. a. C has a vested remainder.
It must take effect before the termination of the preceding life estate – namely. a. then to the children of B in fee. We know it will take effect after the termination of B’s life estate. ii. Ex: A conveys or devises to B for life. 5. C. ** ii. C has a vested remainder. B’s. C is an ascertained and existing person. 1. a. Ex: A conveys Blackacre to B for life and then to C and her heirs. b. A devises land to B for life. Limited to ascertained or identifiable person without words of condition and not subject to divestment. ii. 4. C’s interest is subject to open because of after born children of B because they
. ascertained. Types: a. C has a remainder absolutely vested. 3. then to C and her heirs. A remainder is subject to being partially divested when the remainderman is in existence and ascertained. Remainders absolutely vested i. B has one child. The seisin can pass to her immediately on B’s death. and she or her heirs are certain to acquire a possessory interest on the expiration of B’s life estate. But. b. C has a vested remainder. C’s remainder is vested because she is in existence. not subject to any condition precedent. i. Remainders vested subject to partial divestment (also called remainder vested subject to open) i. At the time of B’s death. Ex: Common kind of class gift. Common law standards: a.6 3. Ex: A conveys to B for life and then to C for life a. 1. i. 2. but the amount of her estate is subject to being diminished in favor of other members of a class. 6. Ex: A conveys to B and the heirs of her body and then to C and her heirs. C has a vested remainder. 4.
a lesser estate than the fee. Z has a vested remainder which takes effect after the natural expiration of the preceding life estate. a. The remainder must be created at the same time and in the same interest as the prior particular estate which supports it or precedes it. D’s interest is not a remainder. Here. then to C and her heirs. then to D and his heirs. Ex: A conveys to B for life. Ex: X is the owner of Blackacre in fee and he conveys Blackacre to Y. Remainder must be in favor of a transferee (usually a grantee) who is one other than the conveyor.
. Creation of remainder 1. C has a remainder vested subject to complete divestment on the death of C without any surviving children. If C dies without any children. so that there may be an interest to pass on to the remaindermen. 2. Preceding estate must be of lesser duration than the interest of the conveyor or the grantor. then ownership transfers to D. power of appointment. Today: (multistate)
iv. but her right to possession or enjoyment of her interest on the expiration of that prior interest is subject to a termination by reason of an executory interest.
vii. Preceding estate had to be either a fee tail or a life estate. title then passes to Z. c. but if C dies. A remainder is vested subject to complete divestment when the remainderman is in complete existence and ascertained and her interest is not subject to a condition precedent. or a estate for years. 2. Modern law: Preceding estate may be a fee tail. for life. 3. vi. and then at the expiration of Y’s life estate. Today: 1. ii.
v. or right of re-entry. but an executory interest. leaving no surviving children. life estate. Preceding estate cannot be a fee simple estate. 1. a. Remainders vested subject to complete divestment i. 3.7 can come within terms of the gift.
it does not apply with vested remainders. Ex: A. (multistate) x. Springing 1. but if B marries C. Contingent remainders come within the rule against perpetuities. From transferee to transferee upon happening of conditioned event ii. ownership / right of possession would then pass on to C. a. Ownership passes from A the grantor to B. and then happening on the stated event. then to C and his heirs. owner in fee. Vested remainderman has a claim against prior estate holder (the life tenant) for waste. the grantee. xii. Where we have a vested remainderman. then there is a lapse of time – 1 year later. that if B marries C. 2. (multistate) xiii. Ex: A conveys to B for life. Cuts short or terminates a preceding estate in favor of the grantee. so if B marries C. Shifting 1. C has a shifting executory interest. (multistate) ix. but after the natural termination. namely C. owner in fee. Ex: A. conveys Blackacre to B and his heirs. 1 year later.8 1. they weren’t). b. A vested remainder is subject to the claims of creditors. 3. subject to an executory shifting interest in C. xi. then B’s preceding estate is cut short and rights of possession or ownership goes from one grantee to another. to B. to C. but if B becomes bankrupt. Contingent remainder is not subject to claims of creditors. with a reversion in A. Executory interest – Cuts short a prior estate. B has a life estate. 3. the grantor or his heirs. contingent remainder has no such right. conveys Blackacre to B and his heirs. A. 4.
. but if B marries C. and then after 1 year. (multistate) e. then rights to possession of the property would revert to A. then to C and his heirs. Grantor to grantee upon happening of conditioned event. Here. All remainders are considered transferable and alienable (common law. viii. the second grantee. to C and his heirs. C’s interest is not a remainder because it does not await the natural expiration of B’s life estate. the remainderman has a right to compel the prior estate owner to pay taxes and interest on encumbrances. i. b. A remainder cannot take effect cutting short the prior estate. however. 2. a. Ownership passes from the grantor.
Always involves lapse of time (even 1 day) between happening of event and the other transferee getting the interest. iii. An executory interest is a future contingent interest created in favor of a transferee in the form of a springing or shifting use which. Compare: remainder follows the natural termination of the preceding estate
. upon the happening of the contingency described. 2. it ceases to become an executory interest. possibility of reverter. iv. a. Always in favor of the transferee. either as a future or present interest. 3. An executory interest therefore should never be confused with a reversion. or right of reentry for condition broken. An executory interest cuts short a prior estate on the happening or nonhappening of a certain event. It is always contingent and can never become vested because when it vests. a. who is someone other than the transferor or grantor. will be executed into a legal estate and which cannot be construed as a remainder. Right of possession reverts back to grantor for a remainder. i. Elements: 1.9 4.
C has a shifting executory interest. with remainder to B’s heirs. conveys Blackacre to B for life. Jurisdiction that follows this doctrine: 1. a freehold estate (usually a life estate) is given to a person and in the same conveyance or will. ** i. 1. the remainder to B’s heirs is cut off.
IV. Applies to situations where the grantor. B takes both his freehold estate and the remainder. Springing and shifting uses or interests are created by deed or grant inter vivos. then to C and his heirs. Rule in Shelley’s case (abolished in most jurisdictions) a. The remainder is in the grantor’s heirs. The remainder to X’s heirs at the expiration of B’s life estate. then the grantee takes both the freehold estate and the remainder. ii. C’s interest cannot be a contingent remainder b/c a remainder cannot follow a fee simple estate and it cannot cut short a preceding estate. Cannot follow a fee simple interest of any kind b. but if B sells liquor on the premises. In essence. Ex: Where X. Ex: If A conveys property to B and his heirs. i. 1. Compare: Rule in Shelley’s case: remainder is in the grantee’s heirs. X. ii. Any interest which follows a fee and is held by a third person must be an executory interest. but executory devises are created by will. In a jurisdiction that has adopted the rule in Shelley’s case. iii. owner in fee. 2. 3. If in a conveyance or a will. Contingent remainder a.10 PMBR CD #2 I. Executory devises and interests a. conveys Blackacre to B for life with remainder to X’s heirs. owner in fee. Common law: i. There is a merger of the life estate with the remainder and B ends up with a fee simple estate and the remainder to his heirs is cut off. is cut off – abrogated and you then have a reversion in fee back to the grantor (X) or his heirs. Doctrine of Worthier Title (Rule against remainders in grantor’s heirs) a.
II. Almost exactly the same as the Rule in Shelley’s case b. 2. iii. the grantee ends up with a remainder in fee and the remainder to his or her heirs is cut off. they don’t get anything and B ends up with fee simple estate. a remainder is limited to the heirs of that person (of the grantee).
. Executory devises are identical with springing and shifting interests.
A descent of land barred the right of entry of the person deseised. The rule is directed against remoteness in vesting. Doctrine gets its name b/c the heir takes by descent rather than devise. but rather contained in a deed instrument. Most frequently tested on the bar (multistate)
. it is not void – it’s valid. 1. b. or fail within the 21-years. the deseisee’s right of entry was not barred. Sole test: Must the interest vest or fail within the 21-year period permitted by the rule. ii. ii. i. In its application to wills. not subject to the Rule. then it is valid. it is void. iii. “Not later than 21-years of some life in being” i. If it must vest. Contingent remainders ii. Includes lives in being provided that they are not so numerous as to prevent practical determination of when the last life in being dies plus 21-years and gestation period. Options to purchase land that are not incident to a lease. Any contingent interest must vest within 21-years. In a deed. Options to purchase land that is in a lease. “Must vest” i. If it may vest. It was said that title by descent was worthier or better than title derived by purchase or devise. No interest is valid unless it vests if at all not later than 21 years after some life in being at the time of its creation of the interest. If the contingent interest is absolutely certain to vest or fail entirely within the period of the rule. i. executory interests. 2. In a will. Period of the rule begins when the interest is created. Reason for this: 1.11 c. d. 2. 1. Interests subject to the rule: i. c. “At the creation of the interest” i. it’s when the testator dies. f. Executory interests iii. 2. and options to purchase land in the future are covered by this rule. e. Only contingent interests. Rule Against Perpetuities a. the rule in its testamentary aspect requires that the heir take by descent rather than by purchase or devise. Any contingent interest which does not meet the rule are void ab initio. g. it’s when the deed is executed. 2. i. 1. If the title were acquired by purchase.
but where right of first refusal is held by grantor and you know within the grantor’s lifetime whether the right will be exercised. The grantor conveyed property to the grantee and in the deed. it is deemed vested only when the class is closed and all conditions precedent for every member of the class. the grantee had to submit the offer to the grantor and the grantor had right of first refusal to purchase the same property. Right of first refusal violated the rule against perpetuities because the grantor has this right or her heirs. Right of first refusal whereby anytime before the year 2222 the grantee has a modified offer for purchase of said premises which she is to accept. a tract of land. Grantor’s right of first refusal here did not violate the Rule b/c the grantor was the measuring life b/c we’ll know within the grantor’s lifetime whether the land will be purchased by another. had until 2222 in which to exercise this option to purchase land or right of first refusal. iii. Powers of appointment Class gifts (Remainders subject to open) a. b. have been satisfied.
VI. and conveyed the property to Reak. As such. The fact that the right of first refusal was given to the grantor or her heirs – we don’t know who the heirs are – until the grantor dies. iv.12 a. the option to purchase the land in the future might violate the rule b/c it might vest too remotely. The entire class gift is void if the interest of one member of the class might violate the rule.
. (multistate) iv. ii. then the grantee is to furnish a right of first refusal to the grantor or the heirs. Ex: Farpo owned Rosemead. If a remainder interest is given to a class of persons. it gave the grantor the right of first refusal that if the grantee received an offer for sale of property. Right of first refusal held by grantor or heirs until sometime in the future – will violate rule. no violation of the rule. 1. The deed contains the following provision: i.
ii. Restraint on a person is invalid.13 c. the class can close. In order for Rule not to be violated. a. Forfeiture restraint 3. Class can show physiologically. the Rule is not offended. ii. The class closing rule – class is closed when no one born after the date can share the gift. Restraint may only limit grantee with respect to time. b. 2. mortgages – that restrict the grantee’s power to convey property to others. wills.
. Where you have a fee simple interest. i. b. Under the rule of convenience 1. d. Ex: Grantee is prohibited from alienating property to certain racial or religious or social groups – violation of 14th amendment Equal Protection clause. Disabling restraint 2. Restraints in Alienation a. Extent of estate 1. If one has a power of appointment over property. If one can alienate property. restraints on alienation of non-freehold estates (tenancy – periodic tenancy or a tenancy at will) are commonly upheld. Ex: A gift to A’s children would close physiologically at A’s death. c. b. Restraints on alienation – provisions in deeds. 2.
VII. 2. General power of appointment is considered the equivalent of ownership of property. Kind of restraint 1. Gifts which would normally violate the Rule can be saved. 3. where you have lesser restraints. Whether a particular restraint is valid depends on many considerations: i. Class closes physiologically when the parent of the class dies. Ex: Nonassignment clause in a lease is a common example of restraint on alienation of a nonfreehold estate that is upheld as valid. 2. any direct interest on a fee simple is invalid. a. Powers of appointment a. or 1. But. Whenever any member of the class has the right to demand possession of his or her share. A class can close earlier so as not to violate the Rule Against Perpetuities. Promissory restraint iii. Kind of estate 1. the power to exercise the power of appointment must be within the time period allowed by the Rule. he or she can exercise such power and alienate or transfer property. Restraint may also restrain a person.
5. b. 8. (on the multistate) 9. 6. There must be a clear expression of intent to create a joint tenancy. Ownership or possession by two or more persons at the same time. Unity of title (interest acquired by the same instrument) c. A form of co-ownership where each tenant owns an undivided interest in the whole estate. Creation – 4 unities requires at common law: a. 2.
.14 iv. 7. otherwise it will not be exercised. the title passes to the surviving joint tenant. b. Typical words for creating joint tenancy at common law. Common law: regarded as one legal entity. Co-ownership by husband & wife. a. Concurrent estates – Ownership or possession by two or more persons at the same time a. the joint tenancy is severed and a tenancy in common results. A joint tenancy is destroyed by a suit by partition which can be brought by any of the joint tenants. ii. A would have to state in his conveyance that he conveys Blackacre to B and C and their heirs as joint tenants. never by descent (intestacy). Where one of the joint tenants conveys his interest inter vivos. Preemptive rights (right of first refusal) 1.
IX. 2. Unity of time (interest must vest at the same time) b.-held as valid. Unity of interest (interest of the same type and duration) d. Today. i. 3. a. Unity of possession (each of the joint tenants are given identical rights of a joint tenant) 4. Always created by a deed or will. Joint tenancy 1. Distinguishing aspect: right of survivorship – upon the death of one tenant. Partial restraint on alienation . ** Under modern law. conveys it to B and C and to their heirs. Joint tenancy may be severed by a mortgage in a title theory jurisdiction or a contract to convey. a tenancy in common is created – modern law. in order to create a joint tenancy. but not today. 3 types of concurrent estates: i. joint tenancies are disfavored. If the words joint tenants are not used. A is the owner of Blackacre. Tenancy by the entirety – seized of the entirety 1.
Tenancy in common (each holds undivided ½ interest) 1. 5. 8. either by purchase or otherwise ). Where you have husband predeceasing the wife. 9. 7. A concurrent estate in which cotenants each own an undivided. iii. 10. 4. then title to the property – ownership passes – to the survivor. upon death of tenant in common by intestacy. Each cotenant can freely convey or transfer his or her interest by conveyance inter vivos or testamentary disposition. no right of survivorship – heirs don’t take. 10. Ouster when one cotenant ousts from possession her cotenant (i. 5 unities – husband and wife: a. both spouses needed to participate in the conveyance. Compare: Joint tenancy. Death destroys tenancy by the entirety 8. a. a. the ousted tenant has a cause of action against the possessor not to put her out and to regain possession of the property. interests. The only unity is the unity of possession inasmuch as each tenant is entitled to the whole of each estate. Divorced persons become tenancy in common. 5. a. Execution by a joint creditor of both husband and wife would constitute a severance. 2. possession. ** 3. wrongful exclusion from possession). A tenant in common does not own the whole property as in a joint tenancy. 7. Right of survivorship a. Tenancy in common may be destroyed by partition. No right of survivorship. In most states. In order to dispose of the property. Time. person 6. Conveyance – this interest is freely alienable. merger (merger when the entire title vests in one person. neither spouse could dispose of any interest held by tenancy by the entireties. Creditor of one spouse cannot levy on the state owned by the entirety.
. There is no fiduciary relationship between or among tenants in common. Partition – neither spouse is entitled to have a partition at common law (but you can with joint tenancy). Similar to joint tenancy 4. separate and distinct share of the property. Each tenant can dispose of his part or fraction thereof by deed or will.e.. 9.15 3. Divorce destroys tenancy by the entirety a. title. right of survivorship does attach. 6. There is no destruction of tenancy in common by conveyance.
Leases a. Rights and duties of tenants by the entireties. iii. A mortgage is regarded as a lien and one joint tenant’s execution of mortgage does not result in a severance. ii.
. Taxes 1. Where one tenant pays the entire taxes. a. But if a partition has been had (in equity court – action or suit for partition). Majority of estates tenant in possession has the right to retain profits gained by the use of the property. 2. Majority: A lease does not effectuate a severance of the joint tenancy Contracts to convey a. a contract to convey results in the severance of the joint tenancy despite the fact no conveyance actually occurs (contracts to convey – in equity. tenants and common: i.16 c. equitable interest in the property). joint tenants. B/c it involves a conveyance in land. iv. A mortgage is regarded as a transfer of title and destroys or severs the joint tenancy. Mortgages a. Repairs and improvements 1. Leasehold involves a conveyance of an estate (conveying right to possess property to another person for a limited period of time) and also constitutes a contract. A tenant has no right of contribution against other tenants with regard to repairs and improvements that one has made on the property. If there is ouster. XII. 2. X. then the court may make an equitable division of the proceeds and the court will take into account expenditures made by one tenant by way of an accounting. it comes within the Statute of Frauds and must be in writing to be enforceable. Majority of states – lien theory: i. unless there has been an ouster. Minority of states – title theory: i. Lease must be in writing and must contain the following elements to satisfy the Statute of Frauds: i. Must identify the lessor and lessee
XI. b. Landlord-tenant law a. Tenant in possession need not share profits with a cotenant out of possession. the ousted tenant may hold the tenant in possession for the profits collected during the time ousted. that tenant may compel contribution by the other tenants. Possession In all forms of concurrent ownership. each tenant has the right to possess and enjoy the whole of the property. (essay) i. Rents and profits 1. In most states. b.
d. she can collect no rent for any portion of such year. then the tenant’s leasehold interest merges with the fee. 3. the tenant’s duty to pay rent is extinguished. relieving tenant’s obligation to pay the rent. When rent accrues – at common law. Where there is a partial or temporary taking – if it’s for a short period of time or for a
. At common law.17 ii. as does interest on money loans. Contract aspect i. the lessor may not accept rent since rent does not accrue from day to day. Rent is viewed as the consideration paid by a tenant to her landlord for the use and enjoyment of the land. Where entire leasehold is taken by eminent domain (all of the leasehold condemned for full balance of the lease term). this does not relieve the tenant of obligation to pay rent. Rent is extinguished by eminent domain. storms. ** iii. Rent is extinguished or suspended by: 1. Most courts treat leases as contracts rather than conveyances (even though a lease involves both elements). ii. Eminent domain – takes both the leasehold and the reversion a. Set forth the amount of the rent that needs to be paid c. Modern leases contain many covenants – impose contractual obligations on the part of the landlord and tenant ii. tenant remains liable to pay rent even though because of fire. a. Tenant’s duties i.. If a lease provides for payment of an annual rent on the last day of the calendar year and the lessor accepts a surrender of the leasehold at any time of the year. Merger a. 2. Describe the leased land iii. Expiration of the lease 4. Ex: If lease provides for annual rent on last day of calendar year & lessor accepts surrender of leasehold for that portion of the year. Entire taking of leasehold or partial? i. Destruction of premises 1. Release by the landlord 2. Duty to pay rent 1. or other natural events. etc. State the term of the lease iv. rent is not apportionable as to time – it does not accrue from day to day. Where the tenant acquires title to the property (purchases the property). ii.
Constructive eviction a. b. Express agreement of the parties where the landlord gives the tenant permission to surrender. b.18 period less than the remaining term or if only a portion of the rented property is condemned. Relieves tenant’s duty to pay rent.
8. b..g. by the condemnation of part of the leasehold premises does not relieve the tenant of the obligation to pay rent. Tenant has an affirmative duty to make ordinary repairs on the premises. 1. Material breach of the landlord which violates the tenant’s in quiet covenant of quiet enjoyment if it renders the premises uninhabitable. Modern law. the tenant is not discharged from her obligation to pay rent. sole use of the premises becomes illegal – lease premises for the sale of raccoon furs and then the state enacts a statute prohibiting the sale of raccoon furs – making it illegal. Voluntary waste – Life tenant or tenant for years 1. Duty of repair a. this relieves tenant of his obligation not pay rent.
. Ex: Landlord leases office building to tenant and there’s a large parking lot with the agreement and if the parking lot is condemned. Complete or almost a complete frustration of purpose (e. Extinguishes tenant’s obligation to pay rent. c. such as exploiting minerals on the land (or removes timber of the property) unless the land was previously so used or as so provided in the lease. Injury of premises or land caused by an affirmative act of tenant.
6. Frustration of purpose a. Tenant cannot commit waste on the leased premises. Surrender a. i. then the tenant must quit the premises in a timely fashion in order to be relieved of the duty to pay rent.
5. the frustration of purpose would relieve tenant of his or her obligation to pay rent).
but which increases the value of the land. 2. 3. ii. Note: a tenant is not liable for ameliorating waste b/c it increases the value of the land. water enters the premises and damages the hardwood floor. Change in the physical characteristics of the occupied premises by an unauthorized act of the tenant. 2. 2. Ex: Where a tenant razes an old outmoded building on premises and erects a modern building which raises the value of the property from $50. Equitable waste 1. Ameliorating waste 1. Injury to the reversionary interest in land which is inconsistent with good husbandry and is recognized only by the equity court and does not constitute legal waste.000 to $200. Injury of premises or land caused by tenant’s failure to act when a tenant is under a duty to act. then you’re having a
. ** iv. iii. Ex: Where the tenant is about to commit an act which constitutes equitable waste. Ex: There is a leak in the roof and it’s raining outside and water is pouring down – one of the shingles is detached which causes the roof to leak and a rainstorm. the equity court can enjoin the tenant from doing that act. 3.19 this would constitute voluntary waste. Where you have the expression “without the impeachment of waste” in the lease.000. but no damages. Permissive waste 1. A tenant is under obligation to make ordinary repair and in this situation the tenant is liable for the damage or the permissive waste that has injured the property.
5. e. would not be permitted to raze the 6-story apartment building and build a single family home. f. 4. then the possessor has duty to warn the tresspasers of known dangerous conditions which the trespasser would not normally discover himself or herself. this would constitute equitable waste and this would be enjoined by the court in equity. in order to determine the duty of care which a possessor of land owes a licensee.20 situation dealing with equitable waste. trespassers i. Ex: A is the fee simple owner of Blackacre. invitees. iv. A tenant. conveying the apartment building. B can collect the rent with respect to the rents of all of the tenants in the apartment building. subleases. Landlord’s duties g. (multistate)
. Generally. granting a life estate here would have to include the words “without impeachment of waste” in the conveyance. fee simple owner. For a licensee. wants to raze this 6-story apartment building. B. no duty of care owed to trespasser unless an anticipated or discovered trespasser. tenant duties. Duty to inspect and make safe. On Blackacre. trespasser. Normally. Bar exam question dealing with landlord – tenant law. iii. ii. assignments. B would be enjoined if she threatened to raze the apartment building and construct a single family home b/c this would cause injury to the reversionary interest to the grantor or grantor’s heirs. B. Then. usually tested on landlord duties. Say. invitee. Tenant’s tort liability – duty of care to licensees. the duty of care generally owed is the duty to warn of known dangerous conditions. Duty owed to invitee: 1. granting B a life estate in the apartment building. there is a 6-story apartment building…we have A.
The tenant may quit the premises in a timely fashion and no longer be obligated to pay rent. invitees. if at the commencement of the lease. In every lease. i.html) c.1-4. a landlord may be liable for the tenant. Constructive eviction results from conduct or neglect on the part of the landlord which renders the premises uninhabitable. Doctrine of caveat emptor prevails (“buyer beware”). Premises suitable for particular purpose i. guest.3. Landlord does not impliedly warrant that leased premises is particular purpose. Actual eviction occurs when the landlord or paramount title holder excludes the tenant from the leased premises. (http://www. A lessee does not acquire the legal interest in the premises until he actually takes possession in the property. there is a hidden defect. Where there is a hidden defect – if at the commencement of a lease.edu/topics/landlord_tenant. Quiet enjoyment g. iv. licensees. a.21
PMBR CD #3 I. the tenant’s exclusive remedy is against the wrongdoer and the tenant has no action against the landlord. See Restatement 2d § 4. ii. Eviction by the landlord reaches the covenant of quiet enjoyment and relieves the tenant of his obligation to pay rent. Duty to deliver possession of premises i. e. Landlord is not liable for dangerous conditions existing on the leased premises. Duty to deliver possession f. This covenant ensure the tenant that his possession will not be disturbed by someone with a superior legal title to the land including the landlord. i. Tenant’s only recourse is to evict or go after the wrongdoer. iii. Contrary to the American rule b. there is a hidden defect which
. In the event there is a trespasser or a holdover tenant (tenant at sufferance).law. Exceptions: 1. American rule: Landlord does not have obligation to actually delivery possession of premises to the tenant. there is an implied covenant of quiet enjoyment. 1. 2. Landlord duties a. d. English rule (common law rule): Landlord impliedly warrants that the tenant will have the legal right to possession at the beginning of the leasehold term 1.cornell. ii. ii.
22 the landlord knows about or should know about and which the tenant is not likely to discover. i. month to month. c.
. but automatically renews( week to week. the tenant or other people entering the premises may recover against the landlord.). it is ineffective. Tenant is under a duty to repair and to perform ordinary repairs. notice is not effective. then automatic renewal. Periodic tenancies i. 2. if notice is not in compliance with the statutory compliant. then the landlord may be liable in tort from the resulting injuries. etc. ii. A landlord may be liable where the landlord undertakes the repairs (the tasks of making ordinary repairs) and does so in a negligent fashion. etc. etc. 5 years. iii. iii. h. Automatic renewal: 1. Tenancy does not terminate at the end of each period. 30-days notice (usually statutory). Rationale: Landlord is liable where he or she has enticed the lessee into a trap. 2. If injury results from defects. Tenancy for a term – tenancy for years i. At common law and in absence of lease covenant or statute. a. a. Leasehold estates a. 4 years. Tenancy from month to month. b. Tenancies at will i. Common law – can be terminated without advance notice (unlike periodic tenancy). Tenancies at sufferance
II. iv. week to week. Continues indefinitely until terminated by one of the parties. d. a. If no termination (that’s valid). Landlord is under no duty to repair. Fixed duration set forth in the lease – 6 months. not a landlord. Failure to give notice to terminate: 1. Ex: 30-day notice period and one of the parties gives 29-days. landlord in a lease for a short period of time for a completely furnished dwelling impliedly warrants fitness of the premises and the furnishings. unless one of the parties give notice of his or her intent to terminate. An estate that is terminable at the will of either the landlord or tenant. landlord is under no duty to repair. Continuing type of tenancy and not the inception of a new tenancy at the beginning of each period. ii. Where there is a completely furnished dwelling.
Ex: 5-year tenancy. Judy. After Year 2. she’s been in possession for 2. Effect of assignment by tenant (assignor).e.23 i. This would be an assignment. where she has retained any part of her leasehold estate. Ex: Landlord leases premises to tenant for 5-years. ii. the assignee. Assignee is bound to perform the original covenants in the lease and is held liable to the landlord…
. v. 1. But there is privity of contract (i. Tenancy arises where you have a holdover tenant. so she enters into a sublease with her friend where she transfers the premises to her friend for 1-year…since she retains part of the leasehold. covenant to pay rent). Tenant is transferring the entire remaining balance to her friend Judy. e. i. the tenant is still in privity of contract with the landlord even where you have an assignment. 2. in which case. 2. If she makes a complete transfer of her entire remaining estate. There is no longer privity of estate between the tenant and landlord. Q: Between the assignee and landlord after an assignment? a. then the transfer is a sublease. then from relation back to period of wrongful holdover period to the landlord as trespasser. tenant decides to go to Europe and tenant is planning on staying in Europe for the rest of her life. Absent no prohibition restricting or prohibiting transfers in a lease. where a tenant wrongfully remains in possession after the expiration of the lawful tenancy. so she transfers the remaining 2years under her tenancy for years to her friend. a tenant may transfer her leasehold interest in whole or in part. 1. Once tenant at sufferance is removed from land. she now wants to transfer…leave the state for 1 year…but she plans to reoccupy her apartment for Years 4 & 5. Liability of a holdover tenant: 1. iv. After Year 3. vi.. ** 1. iii. ii. she has made an assignment. the tenants and landlord – no privity of estate. You have an assignment and a leasehold agreement entered into between tenant and landlord and then the tenant assigns his rights to the assignees – this is where the tenant transfers her entire remaining balance under that leasehold. Conversely. then the transfer constitutes a sublease. There is still privity of contract between the tenant and landlord. There is both privity of estate and privity of contract. Cathy has a job position in CA for 1-year (internship). b.
5. The sale of an occupied apartment building constitutes such a transfer. Q: What about a second assignment? a. (multistate) b. Covenants against assignments or subleases are strictly construed.. Second assignee will be in privity of contract and privity of estate with the landlord. Many leases contain these clauses not to do these things without the consent of the landlord. b. Tenant and sublessee – no privity of contract and no privity of estate. A landlord can convey his ownership interest in the premises or the property. ix. then there is no privity of contract either. The original tenant therefore remains obligated under the covenants in the lease (i.
. 3. There may be privity of contract where the first assignee has expressly or in writing has assumed the covenants under the lease. Where the assignee reassigns her interest. A sublease creates no legal relationship between the landlord and subtenant. Assignment of the landlord 1.24 because these covenants run with the land and are based on privity of estate and privity of contract. ** vii. viii. covenant to pay rent). 4. c. her privity of estate ends **.e. However. Effect to pay rent: 1. Recognition of the new landlord by the tenant is called attornment. b. 2. Landlord’s reversionary interest is assignable. In a lease. a. A covenant that prohibits subleasing does not prohibit assignment and vice versa. These are strictly construed. For a chattel to become a fixture:
III. 2. you may have a clause prohibiting assignments or subleases. Chattel which becomes real property. The original tenant remains the landlord’s tenant and the sublessee is the tenant of the original tenant (his landlord). the original tenant (original lessee) remains in privity of contract and in privity of estate with the landlord. Fixture a. 3. 4. 2. and unless the first assignee has assumed the covenants under the lease. such as the covenant to pay the rent. 2. Lease covenants: 1. c.
1. iii. Easements i. Ex: You grant someone an easement for ingress / egress – to use a walkway. Easement holder does not have right to remove substance in the property. ii. Easements appurtenant a.a. or vegetable. iv. iii. whether the annexor is a licensee. Injury to the land d. Completeness with which the chattel is integrated with the use to which the land is being put.
IV.k. The chattel must be annexed to the reality either actually or constructively. but only has right to enter the person’s property and make limited use – ingress or egress. c. b. Nature of the article b. It must be the intention of the annexor that the chattel become a fixture. Manner of annexation to the land c. or the owner of the property. tenant at will. such as sand. dominant tenant) has the right to enter onto the servient tenement and has the right to make use of that tenement for ingress or egress. The relation which the annexor has with the land. Trade fixtures i. ii. Servient tenement is the land subject to the easement. It is the owner of the dominant tenement (a. b. The right of one person to go on land in possession of another and make limited use of that property.
. Requires 2 parcels of land – dominant tenement and adjoining servient tenement. c. such as for ingress or egress. They are removable by the tenant – tenant for life. Two types of easements: 1. tenant at will. tenant for years. Profits a prendre / profits: 1. timber. Various considerations in determining the intent of the annexor: a. The chattel must be appropriated for the purpose for which the land is to be used. Profits i.25 i. Rights in the land of others – nonpossessory interests or incorporeal interests in real property a. The right of one person to go onto the land of another and extract or remove something therefrom. ii. ** e. Chattels annexed to the land by the tenant for pecuniary gain during her tenancy.
2. iv. Certainly. Q: What happens if Jones conveys his property to Baker and Smith conveys his property to Carl? a. 1. Smith is the owner of the servient tenement. Easement appurtenant runs with the land because it can be enforced by or against successors in interest to the original contracting party. Ex: The City constructs a sewer line in your backyard. If Jones conveys his property to Baker. 3. 2 basic classifications of easements: a. If Smith gives Jones the right to enter onto the servient tenement for ingress and egress. Baker can enforce that easement against Smith or Carl. i. Easement in gross can run with the land. b. iii. the dominant tenement holder where you have
. Entitle the easement holder (usually. Ex: Jones is the owner of the dominant tenement. Jones is the owner of the property and Jones conveys the property to Smith. Ex: You only have a servient tenement subject to easement.26 d. v. Ex: City installs a sewer line across your backyard or a city installs telephone lines across your front yard. no adjoining dominant tenement. Affirmative easements i. Easements in gross a. Easement in gross is personal – it is intended to benefit the holder personally. ii. i. one parcel of land burdened with the easement. Easement in gross – you don’t have 2 adjoining tracts of land. that easement is going to run with the land and is going to burden the land as far as Smith or any successor in interest may be concerned. rather than in connection with any land that owner may own – here. Easement appurtenant runs with the land (adjoining tracts of land).
2 types of easements not in writing: i. U. ii. Negative easement prevents the servient tenement owner from doing some act or making a particular use of his or her property. S. and therefore must be in writing – deed or other similar type of written instrument. b. An easement is an interest in land. Prevents the servient tenement owner from doing some act or making a particular use of her land. b. Creation of easement a. Ex: B. Baker sells these individual lots to X. is the owner of Blackacre. a. that K comes within the statute of Frauds and it must be in writing in order to be enforceable. It comes within the Statute of Frauds – where you have a K for a sale or transfer for an interest in land.27 an easement appurtenant) to make some affirmative use of the dominant tenement. A owns Whiteacre. located between the ocean and A’s property. but in Y’s deed. Negative easement i. Ex: Baker owns a 100-acre tract of property and decides she is going to subdivide her property and sell off 100 1acre lots to various buyers. 4. Where you have a subdivisional scheme. i. 2. Baker sells this lot to Y. Y. B agrees in writing not to construct any structure on his property that interferes with A’s view of the ocean. Easements by implication (or necessity) 1. B has a negative easement – B is promising to refrain from building on his property so that A’s view of the ocean will not be impaired. no mention is
. 1. There is a highway bordering on the eastern tract of the property. Easement is an interest in land. It usually must be created in a writing in order to be enforceable.
Also called an easement by necessity. Even though there was no mention of the easement in C’s deed. the grantor. we would say that
. The only access Y has to the highway is over U’s land. owner of the property. is to be benefited by the easement across U’s property where Y is the grantee. where you have an implication by implication or implied reservation. Y has an easement by implication over U’s property by ingress and egress. Easement by implication can arise by grant or by reservation a. b. Usually. But. sells this lot to C and Baker retains these three lots here. c. the easement benefits the grantor. it is the grantor who is benefited by the easement. implication arises where reasonably necessary or strictly necessary for the benefit of the dominant tenement owner. In this situation. Baker’s only access to the highway is across C’s property. The grantee simply has to show that the easement was reasonably necessary. Ex: Baker. Here. who is the dominant tenement owner. if Y.28 made as to an easement for ingress or egress over U’s land. 2. Where Baker is the owner of this subdivision and baker. conveys this lot to Y. then this is an easement by grant where the easement benefits the grantee.
Let’s say that Able purchases Baker’s land in which case Baker’s easement is extinguished by merger. Continuous 5. Adverse use a. c. e. d. this is an easement by implication.29 if Baker’s only access to the highway is by the property. the dominant tenement owner) may execute a release terminating the easement. Abandonment
. Where the holder of the benefit of the easement – the holder of the benefit easement (normally. Use must be without permission (nonpermission) 2. Prescriptive easements (easements by proscription) 1. Where the servient tenement owner purchases the other parcel of land. Ex: Dominant tenement owned by Baker. Ex: Where both the dominant and servient tenements come under single ownership. Notorious 4. Say Baker has the easement / right to enter Able’s property for ingress / egress. Use must be continuous for the statutory period v. Where the fee simple title to both the servient and dominant tenements come into the hands of a single person. Open 3. Merger a. grantor is to show that the easement is strictly necessary. In order for the grantor to have an easement. (tested on the multistate) 2. 3. d. Easement may be extinguished by: 1. the grantee only has to prove that the easement is reasonably necessary. This is the servient tenement which is owned by Able. ii. b. For the grantee. then the easement is extinguished by merger. Written release a. acquiring title to both parcels of land.
. 4. Ex: Baker owns a large tract of land and many years ago. The easement will be extinguished if B&O removes the tracks – this will show nonuse coupled with an intent to abandon – this will extinguish the easement. Destruction of the servient tenement a. This mere nonuse will not extinguish the easement. he gave the B&O RR company an easement over the northern half of his property to run the railroad lines. no matter how long continued. The easement is then extinguished by prescription. but within the last 5 years or 7 years.e. 5. f. Where you have nonuse coupled by the intent to abandon. Prescription a. then this will extinguish the easement. seeking injunctive relief in order to enjoin the excessive use from continuing. Excessive use does not forfeit or extinguish the easement.30 a. If the easement is in a structure (i. c. e. Clear showing by the dominant tenement owner that she intends to abandon the use will extinguish the easement. An easement can be extinguished or terminated by prescription – when the servient tenement owner has used her land continuously and uninterruptedly for the statutory period of prescription in a way that is inconsistent with and adverse to the easement and without the consent of the dominant tenement owner. b. staircase or hallway for purposes of ingress or egress) and there is an involuntary destruction of the structure (by fire or flood). 6. d. Estoppel a. used that easement and trains traveled over that tract of land. Excessive use – then it is up for the servient owner to bring an action of equity to curb the excessive use. Mere nonuse. back in 1950. B&O has decided not to run its trains over that line and is no longer using the easement. The B&O RR Co. B has a right of way over A’s Blackacre and tells A that he has no intention of using the right of way again and has not used it for several years. that goes beyond the conditions of the easement. this would be sufficient to terminate an easement. i.. will not extinguish an easement.
Licenses i. 7. 1. Same rule applies to profits. Where the servient tenement owner in reasonable reliance of the conduct or oral assurances of the dominant tenement owner. 1. and you go shopping. iii. this is a license. at the option of the licensor to come on to the land for that limited purpose. ii. Generally.31 b. you pull your car in. b. If you park your vehicle on someone’s property. I’m going to continue to use that roadway for ingress or egress. then the profit holder or easement holder is entitled for compensation for the value that is lost. Mere permission to come on to land of another without being viewed as a trespasser. Ex: If you go to a shopping mall (the Beverly Center) and you go into the parking lot and in the mall facilities. this will extinguish the easement. B says I have a right of way. Where you have condemnation of the servient estate. Modern view: Where you have termination of an easement by condemnation or eminent domain. A then goes build a house over B’s right of way. a license is revocable. park your car. Example of estoppel. where you have a mall-type facility. (multistate) i. B has seen the construction – the house being built everyday. This is a license – mere privilege to park your car would constitute a license. it is irrevocable. If you had to pay for the parking. B will be estopped from using the easement. It is merely a privilege.
. Profit holder or easement holder not necessarily owner of property (just right to exploit). c. but where the license is coupled with an interest. uses the servient tenement in a manner inconsistent with the use of the easement. the holder of the easement (dominant tenement owner) is entitled to compensation for value lost. c. Condemnation / eminent domain a. where you don’t have to pay. Where you have the termination of a profit or easement by condemnation. a license is not an interest in land. a revocable privilege. then arguably now this interest could be viewed as a contract or it could be viewed as a license coupled with an interest that could make it irrevocable. Unlike an easement. this will result in extinguishment of the easement by estoppel.
your sitting in your seat at the stadium is a license. Ex: You’re a sports spectator and you go to watch the baseball team play. 1.). etc. 2. Property interest in sitting in the seat – license. Covenants running with the land e.32 iv. they can evict you from the stadium. The license is revocable. d. If you misbehave (throwing things at players. Tort classification – invitee (paying customer) (tort law). Duty of care to inspect and make safe for you (owner owes you this). Equitable servitudes
d. i. then the intention is clear that the covenant was intended to run with the land. An easement generally must be a writing complying with the Statute of Frauds. e. ii. i. Covenant must touch and concern the land. iii. noncorporeal interest in the land of another. Licensee simply has mere permission to enter onto the land.33
PMBR CD #4: I. but less than an easement in the sense that a covenant is not an interest in the land. g. Licensee never had possession of the land. A covenant running with the land is attached or connected with the estate since it may be enforced against or by someone who was not one of the original parties – it may be enforced by successors in interest to the original convenantor and convenantee (original convenanting parties). i. Ex: A is the owner of Blackacre and A sells B 100 bushels of potatoes which are stored in a shed or warehouse on Blackacre and at the same time that A sells B 100 bushels of potatoes. i. 1. License is not an interest in land. b. B has a irrevocable license b/c B’s right to enter into the property is coupled with an interest (i. c. i. A gives B permission / a license to enter Blackacre to remove the potatoes.
II. A license is generally revocable. A license is not the same thing as a lease. Licenses a. does not have to comply with the Statute of Frauds. A license is not the same thing as an easement. c. There must be privity of estate between the parties. d. Easement – substantial. Here.
. f. the purchase of the potatoes).e. Covenant must make the land more value (increase utility) or less valuable (or curtail the use). e. If a license is coupled with an interest. b. Covenants running with the land a. There must be a covenant which must be in writing which is signed and complies with the Statute of Frauds. ii. Lessee or a tenant always has possession of the land.. As long as the words “assigns” or “successors” is used in the instrument. One of the contracting parties succeeds to an interest in the land of another. it is irrevocable. More than just a personal contract. does not have to be in writing. Hybrid between a contract and an easement. It must be the intent of the convenantor and convenantee that that convenant run with the land.
declaration of restrictions in subdivision or common development scheme. Restriction on the use of land enforceable in equity. h. iv. Notice. i. Inquiry notice i. 1. Breach of convenant is similar to breach of contract. 2. c. namely a BFP. You have to have notice. i. recorded with the Recorder’s Office).34 ii. 1. The transferee or grantee must take the land with either actual or constructive notice of the existence of the servitude. Notice may be: a. Baker is the owner of a 100-acre tract of land and subdivides the property and intends for a common development scheme that this subdivision will be restricted to residential use or restricted to only building single family homes.Damages may be inadequate. Intention on the parties to bind the land with this servitude. one who purchases lot of land would be on constructive or record notice of the restriction. iii. Breach of contract recovers money damages. Covenant running with the land may be extinguished by a. Actual notice b. Terminated i. ii. In order to have an equitable servitude. b. may seek injunctive relief.
III. privity of estate between grantor and grantee. Abandonment c. Covenant running with land may be extinguished in the same way as an easement or profit. iii.
. Ex: Privity of estate between a landlord & tenant. ii. The intention of the parties determines who may and who may not enforce the equitable servitude. There must be a writing. Merger b. complying with the Statute of Frauds. Generally enforceable with actions at law. 3 requirements must be satisfied: i. Grantor is succeeding to estate of landlord. We have a subdivision scheme or common development scheme. c. Equitable servitude usually arises in these common development schemes: i. Estoppel d. But sometimes -. Cannot be enforced by a person who gives value but has no notice of the servitude. Constructive notice (record notice. Nonbreaching party brings damages to recover for breach of contract or covenant. Grantee is succeeding to estate of tenant. Release Equitable servitudes a.
he contains restriction saying restricting use of lot to residential use only. In this type of restriction. iv. Declaration of restrictions a. Explain both covenant running with the land and equitable servitudes. If you see a restriction and you aren’t sure whether it should be enforced as a covenant running with the land or equitable servitude: a. Where the grantor or person who is developing common development scheme files a declaration of scheme with the recorder’s office – evinces intention to restrict the use of lots in the subdivision for residential purposes and sets forth intention to set up a comprehensive scheme for the subdivision – covenant running with the land. these lot owners may still be bound with the restriction even though it’s not in the deed b/c they’re deemed to have inquiry notice (they should be aware of the common developmental scheme) since all other lots have this restriction residential scheme. Say. Baker than develops and sells off these last 10 lots but fails to include any mention of the restriction. evincing an intention to restrict the use of the lot in the subdivision for residential purposes. all of the other lot owners have constructive notice and are bound by the restriction. 1. Therefore the lot owners may be bound by the equitable servitude. Multistate if you see a common development scheme. they are put on a inquiry notice. b. covenant running with the land: 1. It doesn’t even have to be adjacent lot owners. Where you have this declaration of restrictions. Where all of the lot owners get together and execute a formal agreement themselves.
. sell those off. Equitable servitude vs. Where the owner in a subdivision places restrictions on some of the lots. Equitable servitudes may be established in common development schemes. v. retains some lots himself or herself…you have situation of inquiry notice where people that buy the last lots even though they don’t have notice of equitable servitude. iii. 3. Where the grantor files this with the recorder’s office.35 ii. Where this is done. Baker wants to restrict the common development scheme and in the deed to 90 lot owners. each of deeds have this restriction. 1. 3 methods of imposing: 1. question probably deals with equitable servitude. 2 years later. Baker sells 90 lots. it is each lot within the tract that is going to be bound by such restrictions. 2. 2.
If remedy is in equity. etc. Can be extinguished or terminated by release. One lot owner to bring suit to enjoin the nonconforming use from being made. this results in extinguishment in equitable servitude. i. Privity of estate is required. Multistate: i. c. Changed neighborhood conditions may also operate to terminate an equitable servitude. Rights incident to possession and ownership of land a. etc. Where the purpose of the servitude becomes meaningless or impossible of attainment b/c of changed neighborhood conditions. iii. What is the remedy? 1. Extinguishment of equitable servitude: 1. Statute of limitations operate not only to bar one’s right to recover real property held adversely by another but may operate to oust
IV. ii. Adverse possession doctrine is based upon the statute of limitations for recovery of real property. i.). the restriction is usually an equitable servitude. 2.36 b.
. Person acquiring the property must take the land with actual or constructive land of the restriction. Where remedy is an action brought at law for money damages. abandonment. Adverse possession i. vi. then change in neighborhood conditions will extinguish an equitable servitude. this is an equitable servitude – b/c this is a restriction in equity. Privity of estate is not required for an equitable servitude. Ex: Change in neighborhood conditions (commercial development – office buildings. ii. Tested: a. or gas station built on neighborhood. Zoning changes will not terminate an equitable servitude which are inconsistent with the restrictions in the common plan. 2. you must have covenant running with the land. where purpose of servitude is meaningless. merger. Covenant running with the land: i. d.
notoriously. a. All elements must exist in order for adverse possessor to take title away from the rightful owner. The period
. 3. Tacking: There need not be continuous possession of the property by a single individual. The use must be open and notorious (not secret and clandestine) a. ii. e. Must claim a life estate. Ex: Somebody occupies property of another. 5. or a fee simple. The use must be continuous and without interruption for the statutory period – 7-years. Limitation of adverse possessor’s claims: a. Recording statutes have no application to adverse possession. openly. c. continuously and for the statutory period (for the statute of limitations). iii. If the owner of the property is still occupying the land. Use must be peaceable (no forcible physical eviction or eviction by court action). 6. Frequently tested on bar exam: 1. The use must be hostile and adverse (without permission) 4.37 adverse possessor with title to the property as though he had received a conveyance by deed. v. Use must be adverse (without permission) 2. etc. Requirements: 1. d. then he may not acquire a fee simple title in the property. 7. adversely without permission. then your use (adverse possessor’s use) is not actual and exclusive. iv. Adverse possessor cannot acquire a larger estate than he or she claims in the property. Sole. Actual and exclusive a. Adverse possessor must present to the world that he or she is the owner of the property. For the statutory period. No one claiming less than a freehold estate may get title by adverse possession. i. Ex: If the adverse possessor only claims a life estate in the property. fee tail. then he can acquire title by adverse possession and divest the rightful owner of the right of property. physical occupancy b. b. Statutory period on adverse possession begins to run when a cause of action accrues against the adverse possessor. 20-years. i. Adverse possessor cannot claim title to less than a freehold estate.
oral gift. written contract. Statute of limitations is for example 10years or 20-years in fact pattern. but if a person entitled to bring such action at the time the cause occurs is within the age of minority . or mere permission. One who is under a disability whether due to minority. a. 4. At the time of the accrual of the cause of action by the adverse possession. continuously for the statutory period under mistaken belief that he or she is the rightful owner of the property. i. 2. Privity exists between adverse possessors if the interest of one is passed onto the other by descent. such person shall bring such action within 10 years after the disability has been removed. or in prison. notoriously.” 1. imprisonment or insanity.38 of adverse possession may be tacked on by one adverse possessor to another. Title acquired by adverse possession is a substantive law title (good as gold). Minority view: Possessor does not hold title adversely unless the person intended to hold the property against the whole world. i. is given by statute – most states permit a person under the disability to toll (stopped) the running of adverse possession until the disability is removed. will. as long as there is privity between the two individuals. Honest mistake: Where a person occupies property of another openly. a. including the
. Facts say that this jurisdiction has this statute in effect – the statute which tolls the running for removal of disability is phrased in this fashion: “an action for the recovery of land shall be commenced within 10 years or 20 years after the right of action first occurred. Disability a. oral contract. Where you have disability. Tolling – takes into account the disability.of unsound mind. deed. that person has an extra period of time (ex: 10 years after with which to bring an action against the adverse possessor). Recording statutes don’t have application to title acquired by adverse possession. 3.
Majority: If you have an honest mistake.39 rightful owner in order for adverse possession statute to run. English rule (minority rule – minority of states): a. Subjacent support: 1. Where you have artificial structures on the land and the land in its natural condition would have been injured by the taking away of lateral support: 1. as opposed to the sides) as lateral support. including recovery for damage for both land and artificial structures. Land in its natural condition without any buildings or artificial structures by excavation or otherwise withdraws lateral support from his neighbor’s land is absolutely liable reliable of negligence – absolutely liable for damage caused to the land.
. Recovery is limited to damage to the land and does not include damage to the artificial structures on the land. Negligent excavation: 1. b. Same rules apply (right to below the land. Recovery would include both damage to the land and damage to the artificial structures. Where the adverse possessor wrongfully believes he’s the rightful owner. you don’t have the subjective intent to adversely possess. Lateral and subjacent support i. then the D is liable for the damage which naturally and proximately flows from his negligence. Visible adverse possession + intent to possess constitutes adverse character and not the subjective belief of the adverse possessor. vi. is what is important. The possession alone. ii. not the subjective intent of the adverse possessor. i. ** iv. If there is negligence on the part of the excavator / wrongdoer who removes lateral or subjacent support. v. ii. iii. you can still acquire title via adverse possession. English rule + American rule: a. American rule (majority view) a. Right of landowner to have land supported laterally by neighboring land is an inherent land. Interference with underground water. 2. Right of lateral support: 1. b. i.
40 vii. Reasonable use theory a. free from any unreasonable diminishment in quantity and free from pollution. Each riparian owner may use the water for any beneficial use. either on riparian or nonriparian lands. b. c. Water rights i. A’s use reduced the water level by 6 inches…violating natural flow theory. The diversion of the water causes the level of the water to go 6 inches below its natural or normal level. an upper riparian. Each riparian owner has a fundamental right to have the stream or lake remain substantially in its natural state. so long as he or she does not unreasonably interfere with the reasonable use of other riparians. If one excavates and this releasing semifluid or semisolid material from his neighbor’s land causing his neighbor’s land to sink. 5. along a stream of water. 3. Under the natural flow theory. Each riparian owner has a fundamental right to make maximum use of the water in the lake or stream provided that such use does not unreasonably interfere with the like use of other riparians. the injunction would not be granted b/c B can show no injury to himself as a lower riparian
. However. there is liability. A. diverts the water from the stream for the purpose of irrigating his riparian and nonriparian lands. this doctrine is predominant in a majority of states – all attracts of land which abut or touches lakes or streams is riparian. an injunction would issue b/c B has the right to have the level of the water maintained. Lakes and streams on the surface 1. Riparian water rights (riparian land – land with natural watercourse. there is plenty of water in the stream to support all of the uses to which the lower riparian can put the water use to. Each riparian may use the water for natural or artificial uses so long as he or she only uses it on riparian land and only does sensibly so as not to affect the quantity or quality of the water. Ex: (multistate) a. However. such as a river) 2. To be riparian. b. under the reasonable use theory. one only needs to be an owner of riparian land. Natural flow theory a. 4.
Owner of surface land may withdraw percolating water from underneath of the land and must make reasonable use of the water. 17 states follow prior appropriation. first in time. Subject to absolute ownership and control of the surface owner (common law). Whoever makes prior rights of the water. Underground or percolating waters 1. iii. a. Majority rule a. Natural uses – uses necessary for daily sustenance of human beings: a. no reasonable rights. western states follow this. iv. In these western states that follow this doctrine.41 b/c in the facts…plenty of water left for the lower riparians. Consumption uses c. Use of water for natural purposes is paramount and takes precedence over use of the water for artificial purposes. Even though use of the water may adversely affect lower riparian water rights. No equality of rights. One exception (minority view): i. If the surface owner makes unreasonable use of the water which affects neighboring land. the rule is that it is too damn bad. the beneficial use is protected. neighbor has cause of action against the surface land. Power c. Generally. Industrial uses 3. If withdrawal of percolating water affects adversely the neighboring land owner. first in right. Mining d. Household uses b. the prior use of the water is protected. Prior beneficial use of the water is protected. No legal redress in this situation. Common law rule (common enemy rule):
. Waters below the surface of land 2. 3. ii. Irrigation b. Reasonable use theory (American rule – majority): a. b. Surface waters 1. Artificial uses a. Domestic purposes (gardening for example) 2. Natural and artificial uses 1.
(where the tenant grows fructus industrials crops). then the landowners own the trees as tenants in common. They are considered to be a natural part of the land / real property. having a definite time of beginning and a definite date of termination. a. Viewed as real property until they are severed from the land. 3. Personal property iv. if crops such as apples. then this is viewed still as personal property and the crop belongs to the tenant. If trees. pears. This is regularly applied in a tenancy at will. If the tenant has severed the crops at the end of the tenancy. 3. Fructus industriales 1. oranges. 2. tenant has a reasonable time to remove crops which are planted after the termination of the term. are owned by property line of adjoining landowners. Called emblements: usually annual crops.
. Comes from man’s industry / Man’s annual planting. shrubs. but they are still referred to as emblements (even if they are perennial crops). Where you have a tenancy of will. growing crops (chattels attached to the land) ii.fertilizing. But. Landowner has unlimited discretion in dealing with surface waters – can build dikes or drain the water – and not be held liable to his or her neighbors. iii. citrus fruits. grasses. lemons…some of these crops are perennial. Any crops remaining becomes the property of the landlord. shrubs. cultivating . Fructus naturales 1. shrubs – these are viewed as being fructus naturales and are considered to be part of the land. If you have a tenancy at will. harvesting: grains. Surface rights (& subterranean rights) & above surface i. grapes. etc. beans. having no certain date of termination.. Surface waters = common enemy c. pineapple. if the tenancy is of uncertain duration. If a tenancy is an estate for years. corns. raspberries. Passes with conveyance of land. d. grasses. 2. 2. 4.42 a. Trees. Majority: A land owner has unlimited discretion in dealing with surface waters. Surface rights include natural vegetation such as trees. without the aid of man – trees. grapefruit. Those crops which come from nature’s bounty. b. but the severed grain remains on the land. Multistate: 1. the tenant’s right to remove growing crops or emblements is terminated when the tenancy is closed.
Minority view: rarely tested (contrary to rule of emblements) (followed in FL): on the death of the life tenant. personal representative of deceased life tenant is entitled to recover the sums invested in cultivation of the crop.43 the rule is that a tenant is permitted to remove all growing crops (all fructus industrials crops) after such tenancy if such crops are planted in the ground at the notice of termination and the tenant is given sufficient time to remove such crops.
. 3. The life tenant will not be entitled to proceeds of the crop. the title of an immature orange crop vests in the remainderman (contrary to common law view).
Appearing on face of the document or deed. Where you have a K that deals with sale or transfer of interest in land. Parole evidence is admissible to explain or supplement a written description or clear up an ambiguity. i. Sufficient description of the land conveyed. Conveyancing and mortgages a. 5. Ex: All of my land in LA county is sufficient for land to be conveyed. Conveyances in the US: i. 3. Oral promise to convey land where you have the doctrine of substantial part performance. c. Writing must be signed. it must be in writing in order to be enforceable under the Statute of Frauds. usually by the grantor or the party to be charged. Statutes usually provide that freehold estates may be conveyed by deed or other instruments. ii. Purchase price must also be included 4. subject to suit for reformation of the deed.44 PMBR CD #5: I. b. Must be present in the writing for a valid conveyance (Statute of Frauds): 1.
. Appearing after presentation of evidence. Patent ambiguity a. then title remains in grantor. 2. 2 basic types of ambiguity: 1. ii. Statute of Frauds is satisfied if a sufficient memorandum is in writing and signed by the person sought to be charged or the grantor. 3. Writing must identify the grantor & grantee 2. Promises on both sides. even though it does not necessarily constitute a deed instrument (even though conveyances are usually by deeds). iii. A writing which evidences an intention to convey an estate will be sustained. Insufficient description – description is too indefinite to describe the land. Description is adequate if it provides a good lead of the property sought to be conveyed. 1. 2. Latent ambiguity a. where the grantor promises to convey the property and the grantee agrees to pay the purchase price for the property. a. iv. Flexibility as to what constitutes a sufficient memorandum. however. as long as it is sufficient to satisfy the Statute of Frauds.
ii. before or after delivery) ii. 2. Although handed to the grantee. i. 3. Where deed is in the possession of the grantor. Parole evidence is admissible to prove grantor’s intent (conduct or statements by grantor. v. 1. we look to grantor’s intent: 1.e. Ex: A draws up an instrument conveying Blackacre to B and attempts to give instrument to B personally. iv. The fact the deed is recorded raises presumption that there has been made. make present transfer of the land). Where the purchaser pays the seller part or all of the purchase price and the buyer takes possession of the property or where the buyer pays part or all of the purchase price and makes improvements on the land. Title may pass even though the right to possession may be postponed to some future time. the presumption is that there has not been a valid delivery. iii. the rebuttable presumption has been raised that this is an effective delivery. The oral K is taken out of the Statute of Frauds and made enforceable where this applies. In order to have a valid conveyance. you must have delivery of the deed. Delivery issues i.
. …the grantor gives the deed to a third person for transmission to the grantee. Nearly all courts have held there is sufficient delivery b/c it was the present intent of the owner to make a valid conveyance. Purchaser can enforce the oral K where: a. 4. b. Delivery and acceptance of deeds i. but is unable to find him. vi.45 1. Delivery refers to the grantor’s subjective intent. showing that the grantor’s intent is that the deed have some operative effect. Where the deed is in the possession of the main grantee. or 1. Ex: A draws an instrument conveying Blackacre to B and hands the instrument to b for safekeeping. 2. Where the grantor retains the deed or the grantee gets physical possession of it. A deed is not effective to transfer property unless it has in fact been delivered. Can be satisfied by words or conduct. Valid delivery / effective delivery. Physical transfer of the deed is not necessary to make a valid delivery. A quits possession of property and treats B as the owner. not a valid delivery.. c. b/c no evidence that the grantor intended that the deed have present operative effect (i.
$100. Equitable conversion a. risk is on the buyer. the grantor. to sell Blackacre and they agree on a purchase price. Applies where we have a seller. The risk of loss is on the buyer. Since it was the grantor’s intent to make the deed presently operative. then grantor retains the title. The date for closing is set for November 1st. 2. a. Transfer will occur automatically upon occurrence of condition and A. will retain title. The
II. enters into a real estate sales agreement with the buyer. ii.naming B as a grantee and instructing C to give deed to B. i. i. Where you have transfer to a third party with no condition.000. if the property is destroyed by fire or flood. Buyer pays seller a deposit. A giving C a deed . when B has paid remaining balance of purchase price. the owner of the property. and then the parties enter into an executory real estate sales contract. No valid delivery here. Legal title still remains with the seller. during the period from September 1st after the real estate sales agreement is entered into and the closing date of November 1st when the buyer has the time to do a title search and come up with the payment price. b. According to the doctrine. Treats interest in land as if land had already been converted to personal property. only if the conditions have not been met and do not occur. Where grantee wrongfully acquires deed from escrow holder without performing conditions (payment of the purchase price).46 1. c. iii. 3. Conditional delivery (where deed is given to third party) is permissible. A giving C a deed . Escrow – certain conditions must be satisfied before deed is passed on to the grantee. Majority view: valid delivery has occurred. 1st to Nov. A valid conditional delivery has occurred. They enter into the real estate sales agreement on September 1st. i. Transfer of property with conditions: a. ii. 1st.naming B as a grantee and instructing C to give deed to B. During Sept. During the executory stage of the sales contract… iii.
. the seller by this doctrine is deemed to be the equitable owner of the balance of the purchase price and the buyer is deemed to be the equitable owner (beneficial owner) of the property. deed has a present operative effect even though conditions to be met in the future.
can buy the K. ii. If the vendee goes through the sale and accepts the deed without any warranties of title. The deed supersedes the real estate K. d. When the vendee (purchaser) dies during the existence of the real estate K period. i. Vendor is only obligated to deliver good and marketable title at the time of the closing. b. then title to the property can pass on to the decedent’s heirs. an implied undertaking in a real estate K that a vendee has marketable title. Vendee may not rescind K before that. What if the vendor dies on Oct.
. administrator. Smith does her title search and discovers on October 15th that there is an encumbrance on the property (easement on the land). the deed supersedes the K which is no longer in effect.) – can still enforce the real estate sales K. the beneficial interest descends as personal property and the heir only gets a bare legal title which she must convey to the purchaser when the purchaser performs and the proceeds of the sale then goes to the vendor’s estate and then pass on by inheritance to his or her heirs. The K usually provides that the vendor will provide good and marketable title to the vendee. I’m rescinding the K. iii.47 buyer must take out insurance on the property to protect this expectancy interest he has at the closing date when title will pass to him. c. saying you aren’t giving good and marketable title. Smith contacts Jones. Marketable title a. Applies where there is an enforceable obligation to sell land (real estate sales contract). Where the vendor does not give this duty. the deed will supersede the K. vendee may rescind the K. Defects rendering title unmarketable: i. Risk of loss is on the vendee for casualty loss which happens during the executory period of the sales contract. Easement upon any appreciable part of the property
III. Vendor’s death does not negate the real estate sales K. but the duty to pay the purchase price falls on her personal representatives (executrix. Outstanding mortgages ii. i. i. Outstanding reverter rights iv. etc. e. Can the vendee do this? No b/c the vendor has until the date of the closing to render good and marketable title.15th? When the vendor dies during the existence of the existence of a specifically enforceable K. the right to receive the land goes to her heirs. Vendee can still enforce the K. buyer is regarded as the equitable owner of the land and the seller is the equitable owner of the purchase price. In an absence of agreement to the contrary. ii. Existence of restrictive covenants iii. If a deed is delivered and contains no warranty of title. f. Ex: Jones entering into a K to sell Blackacre to Smith. d. Encumbrances which the vendor cannot or will not remove v.
if at all.
. Generally includes covenants for seisin. 3 types of deeds: i.48 vi. Containers fewer assurances iii. Variations in the names of the grantors and grantees in the chain of title vii. Cover breaches that occur after the deed is delivered (in the future). Even though the parties can orally make a boundary line agreement and compliance with the Statute of Frauds is not required. k. Covenant for further assurances
IV. Very similar / synonymous ii. Covenants in deeds respecting title a. Special warranty 1. Covenant of further assurances i. Covenants for right to convey d. 3 covenants are in the present tense. i. right to convey. j. Meets statutory requirements 2. Covenant against encumbrances i. b. Property conveyed – no outstanding mortgages. General warranty ii. i. Judicial recognition is extended to boundary line agreements even though there is no right. Covenants for seisin and right to convey: i. Covenant of quiet enjoyment f. Quit claim 1. Covenants of quiet enjoyment and covenants of general warranty i. When a deed provides for usual covenants. Covenants for seisin c. Covenants against encumbrances i. grantee takes whatever the grantor has in the property. or restrictions . l. i. Guarantee to the grantee that the grantor owns the estate which the deed purports to convey. liens. m. b. Outstanding dower interest Boundary line agreements a. 3 of these are breached. No assurances and no warranties. this generally construes a general warranty deed. Oral agreement is valid and enforceable and does not have to come within the Statute of Frauds. when the deed is delivered.
V. quiet enjoyment. Covenant of general warranty g. h. Construed to have the same legal effect ii. general warranty.-easements or profits – that does not diminish value of property. Defend the grantee-covenantee against all legal claims by grantor or third parties who would evict the grantee-covenantee. e. against encumbrances.
b. Thereafter. Recovery: i.
. O does convey Blackacre to A. Undertaking on the grantor’s part – to do something on his or her part to perfect the grantee’s title. Pure notice
VI. If A goes ahead and after acquiring that deed from O.. prevails. ii. But these 3 covenants (quiet enjoyment. once O makes conveyance to A. purporting to convey title to Blackacre. Provide a means for giving constructive notice of ownership. A.49 i.e. ii. further assurances) run with the land and can be enforced by remote grantees that take through the covenantee grantee. None of the covenants protect the grantee against trespass or regression of a mere wrongdoer. Whoever records first. 3 basic types: i. If a person executes a deed purporting to convey an estate in land which he does not have. A conveys the property to C and C knows nothing about the A-B transaction – B did not record and C is viewed as a BFP who paid consideration without any prior notices. Recording Acts a. A conveys a deed to B. Covenants against encumbrances p. ii. Ex: O is the record title owner of Blackacre. n. O is the owner of the property. Pure race 1. Not used much in the US ii. Subsequent BFPs i. Covenants for seisin ii. Damage must be shown for recovery by the grantee. or does not own. o.
VII. or he purports to convey land of a larger estate which he does not own. b. general warranty. then title inures to the benefit of B by application of estoppel by deed or after quiet title doctrine. Estoppel by deed (Quiet title doctrine) a. B) in a majority of states. Covenants for right to convey iii. A mistakenly believes he is the owner and makes this deed to B. A makes a conveyance to B. q. In jurisdiction that follows the doctrine. c. O conveys to A. Covenants are contracts of indemnity and they indemnify grantee for his or her loss. mistakenly believes that he is the owner of the property. First 3 covenants cannot run with the land b/c they are personal choses in action when they are breached at the time the deed is delivered: i. After the A-B deed transaction-conveyance. the majority rule is that a subsequent BFP prevails over that prior grantee (i. then according to this doctrine. that estate passes to the grantee.
Combines essential features of pure race & pure notice. then the buyer is personally liable to the bank for that mortgage debt. Ex: On Jan. B prevails over A and B is a BFP without notice of conveyance. If the deed states that the buyer assumes the mortgage. Multistate: i.
. Race-notice 1. c. ii. the mortgagor (person who takes out a mortgage with the bank). On the other hand. On Jan 15th. In personam action a. if the deed is silent as to the existence of the mortgage or if the deed states that the land is subject to the mortgage.50 1. Is the buyer personally liable for the mortgage debt? i. f. Only BFPs are protected under notice and race-notice statutes. “Conveyance of an estate in land shall not be valid against any subsequent purchaser for value. Mortgagees are also protected – treated as BFPs – and they. 1st. d. Mortgagor conveys property to a buyer (sells). Exam: Whether the buyer is going to be personally liable to the bank for the mortgage debt still outstanding. O conveys Blackacre to A. A conveys Blackacre to B who gives valuable consideration and has no notice of the conveyance to A. A does not record.000 mortgage on your property with the bank. d.
VIII. too. Whenever you take out a mortgage on property. c. iii. you also execute the mortgage (the security of the debt). 2. He is if the deed contains language that the buyer assumes the mortgage debt. The bank is viewed as a the mortgagee. The subsequent BFP who pays value without notice of any prior conveyances or prior notices of encumbrances on the property prevails. Interest in land created by a written instrument providing security for an outstanding debt. unless the conveyance is recorded. then the buyer is not liable personally to the bank for that mortgage debt. Ex: You take out a $500. i. Look to the deed of conveyance from the mortgagor to the buyer: 1. are protected. Race-notice – subsequent BFP who paid value without notice but records first prevails.” 1. Mortgages a. b. whether or not she records first. you execute the promissory note which is evidence of the debt. Typical notice statute i. except such persons having actual notice of it. 3. The mortgagor is the property owner who takes out the mortgage with the bank. 2. e.
mortgagor may default and then the mortgagee institutes a foreclosure action. In rem action a. ** h. State that follows statutory redemption – if the mortgagor owed $500. In most states. If the buyer should fail to make mortgage payments. But.000. i.000 and then mortgagor pays off the mortgage indebtedness. After the foreclosure sale. g.000. Mortgagor can still pay off debt to bank – mortgagor is entitled at his election for redemption against mortgagee for value of land or the proceeds from the foreclosure sale **. The mortgagor then defaults. the mortgagor would be entitled to receive from the bank the difference from the foreclosure sale or the $200. there’s a foreclosure sale.51 4. the common law permits the mortgagor to pay off the mortgage debt and then reacquire clear title to the property.000. This is known as statutory redemption.
. most states permit the mortgagor …. the mortgagor then attempts to repay the bank the $500. a buyer can take the property free and clear of the mortgage if it’s not recorded by the mortgagee. bank sold property for $700. Equity of redemption (statutory redemption) i. The mortgagor takes out a $500. After the default and before the mortgagee brings a foreclosure action. iii. If a mortgage is not recorded and a mortgagor conveys property to a buyer without notice of that mortgage in a notice or race-notice jurisdiction.most states give the mortgagor 6 months to 12 months after the default…to repay the bank the mortgage indebtedness even though there’s been a foreclosure sale and title has passed to Baker. ii.000 he owes the bank. by statute.000 mortgage on the property with the mortgagee. and the mortgagee sales the property to Baker for $700. Mortgages come within the recording statutes and they must be recorded in order to protect a mortgagee. then the bank can foreclose because its security interest is an in rem type interest and the bank can bring a foreclosure action where there is a default by the buyer.