PROPERTY II PROF. LOPEZ SPRING 2010 1. The Sale of Land 2. The sales Contract a. Anatomy of a sales transaction i.

Four basic stages- Whether residential ( single family houses, condos, ect..) or commercial (office buildings, apartment, farms, shopping centers, ect…) every real property sales transaction has 4 stages. 1. Locating the buyer a. May use a real estate broker, who may in turn use a multiple listing service 2. Negotiating the contract a. Buyer executes a written contract that will satisfy the SOF and gives it to seller for signature b. Buyer also gives a good faith deposit c. The contract is likely to be a preprinted form d. Seller will accept or make counter offer 3. Preparing for the closing a. Called the executory period or executory interval b. Buyer will inspect the property, negotiate financing, and evaluate title c. Buyer will ask for a loan with the bank i. Bank will want a written promissory note signed by buyer and secured by the first priority mortgage d. Buyer will also get title insurance on the property 4. Closing the transaction a. Title is transferred to buyer when seller delivers the deed b. Role of the attorney Negotiated the deal, drafted sales contract, evaluated title documents, issued title opinion, advising client about zoning, and tax, negotiating terms of financing, handling the closing, negotiating any disputes ii. Attorneys still do these things for complex sales but in home sales the attorney's role has decreased c. Role of the real estate broker i. The unauthorized practice of law? 1. Brokers do now what lawyers use to is this unauthorized practice of law? ii. Duties of Broker 1. Like any agent, the broker owes a wide range of fiduciary duties to the principal including: care, skill, diligence, loyalty, and good faith iii. Broker's right to commission 1. Governed by listing agreement i.

Three types of listing agreements Open listing i. Broker has no exclusive right to obtain a buyer, only gets commission if he is the first to find a reading, willing, and able buyer b. Exclusive agency listing i. Agent is designated as the only real estate broker authorized to procure buyers, so he is entitled to commission if another broker finds a buyer, but not if the seller himself finds a buyer c. Exclusive right to sell listing i. Broker receives commission if anyone, even seller himself finds a buyer d. Requirements for valid contract i. Basic elements 1. All must have offer, acceptance, consideration, reasonably certain terms, and must satisfy the statute of frauds a. Must identify both parties b. Manifest intent to buy and sell c. Describe the property d. Purchase price e. Other material terms ii. The statute of frauds 1. A typical statute of frauds a. When a contract must be written and signed by the party against whom enforcement is sought b. If contract should be in statute but does not meet all the requirements it is deemed unenforceable but not void. i. If defense does not object on SOF grounds they are waived and contract can be valid 2. Requirements for enforceable contract a. Essential terms of contract i. Identify the parties ii. Include words showing intent iii. Specify the purchase price iv. Adequately describe the property 1. Id the land with reasonable certainty b. Contained in memorandum or other writing i. Need not be intended by the parties as an agreement ii. May be made after the agreement iii. May consist of more than one document iv. May be informal c. Signed by party against whom contract is enforced 3. Exceptions to statue of fraud a. Part performance i. Three potential actions which constitute part performance: 1. Taking possession of the property a.


Paying all or part of the purchase price Making improvements ii. Reliance arguments say it would be unfair to deny action to the party who has substantially changed their position on reliance on the oral contract b. Equitable estoppel i. Where one party has been induced by the other to substantially change position in justifiable reliance on an oral contract and ii. Serious or irreparable injury would result from refusing specific performance e. Contract provisions on title i. Purchase of title 1. Buyer will want a contract provision which specifies the quality of title that the seller must deliver. 2. If there is no such provision the default standard applies, marketable title 3. If buyer discovers before the sale is consummated that the seller cannot deliver the required title, he may rescind the contract 4. Those expressed or implied provisions in the contract expire when the transition closes under the doctrine of merger 5. Accordingly if the buyer discovers defects after, he will have to rely on covenants of title in the deed or other sources of title assurance ii. Implied covenant of marketable title 1. General rule a. If the contract is silent about the quality of title that the seller must deliver the default in the law requires marketable title or what is sometimes called Merchantable title i. This is viewed as both an implied condition and an implied covenant b. Does not demand that seller deliver perfect title 2. What is marketable title a. Title that is free from reasonable doubt but not from every doubt i. Title is unmarketable if the seller does not own the estate he purports to be selling ii. Title is generally unmarketable if it is subject to any lien, easement, or other encumbrance b. Judicial definitions usually focus on the quality of title that a reasonable person would accept 3. Seller lacks title a. When seller does not own the estate he claims to be selling b. More typically it is not this obvious and it appears that seller has valid title but there is a small chance that the title may be defective

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Adverse possession A number of states hold that title by AP is marketable where the seller proves there is no real possibility that the record owner will ever succeed in regaining title ii. Some jurisdictions do not consider AP title valid until brought in quiet title action Doctrine of implied covenant of marketability refers to adequate title not the condition of the land itself Seller is subject to encumbrance Generally i. Title is unmarketable if the seller's title is subject to any encumbrance 1. Encumbrance is a right or interest in land other than a present freehold estate or future interest therein, that reduces the value or restricts the use of the land 1. Mortgages, easements, covenants, tax liens, leases, encroachments, options, judgments liens, mechanic's liens, and water rights Effect of land use regulations i. All jurisdictions agree that the mere existence of zoning, building, and other land use regulations does not make title unmarketable ii. Most courts hold that violation of zoning ordinance does render the title unmarketable 1. The buyer should expect zoning but not expect that the property is in current violation of zoning iii. Majority hold that violation of building code does not make title unmarketable 1. Common law does not like to hold seller liable for defects in physical condition 2. Caveat emptor says that seller has no duty to inform prospective buyer about defects Effect of visible encumbrances i. Most courts hold that visible easements for roads, power lines, sewer pipes, or other utilities do not affect marketability ii. If buyer knows or reasonably should know of easement and enters into the contract then he agreed to accept the title subject to the easement Express title covenant Contracts specify that the seller will deliver marketable title, good title, clear title, insurable title (title that a title company is willing to insure) Record title i. Protects against adverse possession Buyer approval clause i.

Specific performance 1. unclean hands b. This is usually the best remedy in sale of land contract ii. General requirements a. Tender of performance 1. If seller fails to remedy the buyer is excused from performing the contract and seller is liable for breach of contract i. Buyer must make a reasonable effort to satisfy the financing condition a. Contract provisions on financing i. 6. Buyer may ask for specific performance. Buyer who learns about defects before closing must notify seller and give them a reasonable opportunity to cure the defects c. If this cannot be done the contract is deemed illusory and unenforceable iii. Modern courts are more willing to fill in gaps with reasonable terms 3. Usually applying to 2 or more lenders satisfies this duty g. Defenses to equitable judgment: laches. Seller must act in good faith. Sufficiency of buyers effort to obtain loan 1. Remedies for breach i.Breach of title covenant Seller is obligated to deliver marketable title at the time of closing b. recession. Usually a buyer needs a loan from the bank. . When parties adopt a vague clause they fail to reach an agreement on material terms 2. Is a equitable remedy so it will only be awarded when traditional money damages are inadequate iii. or sue for damages f. Court has wide discretion in equitable judgments 1. with reasonable diligence b. and if buyer cannot obtain such a loan they are excused from performing on the contract ii. Negotiating the condition 1. Sellers duty to deliver deed and buyers duty to pay purchase price are concurrent conditions h. Specific performance mandates that the breaching party perform the sales contract i. Abatement a. Vague and indefinite language 1. Closing the transaction i. recovery of down payment.

If seller breaches for any other reason other than good faith inability to provide title. Allows buyer to recover full loss of bargain damages regardless of the seller's good faith 2. Offer the benefit of certainty and minimalize litigation c. then buyer can get loss of bargain damages c. Even if buyer is given money he will never be able to get an identical replacement so money damages are always inadequate Damages 1. .ii. Incidental and consequential damages a. Basic measure of damages for breach for real property sales contract is difference between the fair market value of the property at the time of the breach and the contract price b. Loss of bargain damages a. Consequential damages i. American Rule i. and attorneys fees b. Role of buyers deposit i. Seller is not liable for loss of bargain damages if the breach was caused by good faith inability to convey marketable title ii. title examination fees. Compensation for the out of pocket expenses incurred in reliance on the contract 1. With the specific performance an will reduce the purchase price 2. Inadequacy of money damages a. escrow fees. When breach caused a special. Liquidated damages a. foreseeable loss to the non breaching party ii. Costs of property inspection. Clauses within the contract which specify the amount of damages due if the contract is breached b. Modern trend is to compare the reasonable estimate with the actual damages 4. At the time the contract was signed the specified amount of liquidated damages was a reasonable estimate of future damages d. English Rule i. Buyer receives only payments made to the seller plus incidental damages iii. Incidental damages i. Future damages are difficult or impossible to determine in advance ii. Majority view: when liquidated damages clause is valid if: i. Lost profits are awarded only if they can be proven with reasonable certainty 3.

Fraudulent misrepresentation a. Rationale is based largely on difference between nonfeasance and misfeasance 3. Caveat Emptor (buyer beware) b. Why require disclosure a.e fiduciary relationship 2. Statutes in many states require the seller of residential property to have a written disclosure of such defects. Seller cannot intentionally misrepresent facts about the property in order to induce sale. Rescission and restitution 1. Made with the intent to induce the buyer to purchase d. but for commercial property it is still caveat emptor 2. If seller breaches this idea the buyer can rescind the contract or recover compensatory damages c. Seller of residential property who knows of a hidden or latent defect in the property that substantially affects the value or desirability of the property must disclose it to the buyer d. Known to the seller to be false c. Most states require the seller of residential property to disclose known latent defects to the buyer under certain conditions b. Thus seller can remain silent but cannot mislead 4. Condition of the property a. To the buyers detriment or loss ii. Modern trend allows breaching party to get deposit back if it proves that the deposit exceeds the seller's actual damages iii. Restitution a. Modern trend towards requiring disclosure 1. Rescission a. this is fraud 5. A false statement of material fact made by the seller to the buyer b. Common law approach 1. . General principles a. Which the buyer justifiably relies on in deciding to purchase e. The seller of real property had no duty to disclose latent defects to the buyer absent unusual circumstances i. Seller's duty to disclose i. Cancels the contact so that no further legal force or effect and the non breaching party is excused from performance 2.As a general rule breaching party is not entitled to its deposit b. Law Restores parties to precontract state 3.

Broker's Duty to disclose defects i. Magnitude of the risk 3.If there was no duty to disclose the buyer would have to have expert inspection or expressed warranty from seller. building code violations and other legal conditions affecting the use and enjoyment of the land c. both of which are increased transactional costs b. sliding hillside ii. A clear specific waiver will be enforced in most jurisdiction c. Leaky roof. Statutes typically say that previous owner having aids or the previous owners had a homicide or suicide do not need to be disclosed e. Statutory restrictions on duty to disclose 1. Material defects generally i. Off-site conditions i. Most use objective of what reasonable buyer would consider defects 2. Psychologically impacted property i. Seller need only disclose significant or material defects 1. termitedamage. Some states also include zoning violations. Reflections on Stambovsky 1. Physical or legal defects i. Involve analysis of: 1. Where a condition which has been created by the seller materially impairs the value of the contract and 2. Disclosure of duty saves the expense of the selfprotective measures that buyer would have to take if there were no legal remedies 3. Proximity of the condition 2. crumbling foundation. Stambovsky v. And the gravity of the threatened harm d. . Waiver of duty i. What must be disclosed a. Case where the house was known to be haunted ii. is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent buyer exercising due care 3. Some use subjective of what the particular buyer found as important defects b. Real estate broker representing the buyer has been required to disclose known defects or other material facts a. Ackley 1. The seller's nondisclosure allows the buyer to rescind iii.

Builder's implied warranty of quality i. implied warranty of habitability a. Implied warranty of quality. implied warranty of fitness. The mortgage a. Rather it allows buyer to recover if the builder failed to exercise the standard of skill and care customarily exercised by professional builders d. and does not guarantee that the home is free from all defects c. The buyer's pre-purchase investigation is not likely to reveal the defect because buyer lacks knowledge and the defects are latent and do not become apparent for years b. Warranty only applies to latent defects and not to obvious defects that a reasonable inspection would uncover 3. Applies only to sale of new homes by professional builders developers. least cost avoider d. Current trend is to recognize that a subsequent purchaser may sue builder under implied warranty based off of same public policy reasons as initial purchaser 2. The builder's expertise allows him to avoid defects through careful constructions. The obligations is almost always a loan of money evidenced by a promissory note 3. Policy rationale a. Builder is only liable for a reasonable period 4. The buyer reasonably expects that the builder will construct a suitable home c. If the borrower fails to make the payments required by the note or otherwise defaults the lender may cause the ii. Builder has ability to spread losses by charging higher prices 4. Title theory 1. Majority of states do not impose a duty on seller's agent to disclose to buyer d. The warranty in context 1. Rights of successor owners 1.The buyer's broker as an agent owes a fiduciary duty to his principal which includes the obligation of full disclosure iii. Implied warranty does not extend to commercial property 5. Majority hold that as a matter of law an implied warranty accompanies the sale of a new home by a builder/ developer 2. or other merchants ii. The conveyance of an interest in real property as security for performance of an obligation 2. . Does not impose strict liability on builder. Builder impliedly warrants the house has been constructed in a workmanlike manner and is fir for human habitations b. What is a mortgages i.

this is called foreclosure ii. What a mortgage must include: a. is evidence of the debt . Under court supervision. description of property. Mortgage is a legal nullity unless it secures an obligation 2. Judicial foreclosure 1. Evolution of the mortgage i. Lender will then issue a loan commitment which acts as acceptance and creates an enforceable contract ii. Contains an expressed provision by which the mortgagor consents to foreclosure of the equity of redemption by public auction sale but without judicial involvement c. Lien theory 1. It id's the parties. The material provisions of the mortgage (names of parties. Power of sale mortgage 1. Usually mortgage secures repayment of a loan evidenced by a written promissory note to be sold and apply the proceeds to satisfy the unpaid debt. Lender investigates borrowers financial condition and appraisal of the property 3. but most still record them to give notice to the world d. not title and the mortgagee can take possession only after foreclosure b. The secured obligation i. Treat the mortgage as a mere lien on the secured property to hold a security interest. The loan process 1. The promissory note 1. Mortgage is a security interest to the deed 3. the foreclosing mortgagee was forced to sell the property at public auction and distribute any surplus sales to junior leinholders and the mortgagor ii. Mortgage is viewed as the transfer of an interest in real property 2. words of intent) b. Execution formalities 1. A promissory note is simply a specialized contract between lender and borrower b. Role of the obligation 1. The creation of a mortgage i. The mortgage merely provides a remedy to compel performance a. A specialized contract a. The mortgage and promissory note are inseparable 4. Mortgage must be delivered to the mortgagee 3. Must be set forth in a written document executed by the mortgagor c. is signed by the borrower c. contains the borrowers promise to repay in the stated terms and condition. Borrower completes written loan application 2. Mortgage is fully valid and binding with out being recorded.

Mortgagor can bring suit to cancel the sale only where the price is so grossly inadequate as to shock the conscience of the court 3. Can be a long slow expensive process 3. State usury laws 1. If sale fails to cover the debt the mortgagor will be liable for deficiency judgment ii. Relatively ineffective today c. The mortgagor retains right to redeem property by repaying entire debt until the end of the process when the equity of redemption is eliminated c. Some state require mortgagee to make a good faith effort to obtain a fair and reasonable price f. . Three basic types 2. The mortgagor receives written notice b. Specified method by which the borrower repays the loan e. Arises out of expressed contract provision 2. Types of deeds i. Typical term is 25 or 30 years d. Term i. b. Place legal ceiling on the interest rate a lender may receive 2. Judicial foreclosure is available in all states and dominate in about half 2. Nature of installment land contract 1.4 Key components Amount Interest rate i. In event of default the seller gets property and all payments a. Buyer agreed to pay seller purchase price in installments over a period of years 2. Power of sale foreclosure 1. Foreclosure of mortgage i. The deed in context i. Foreclosure in context 1. 5. Five points of similarity in most jurisdictions a. The deed a. An alternative financing device: the installment of land contract i. The basic document used to transfer an estate or other interest in land during the owner's lifetime b. The foreclosure process ends in a public sale by auction d. Can be fixed or adjustable ii. Any surplus sales are given to junior leinholders or the mortgagor e. Deed defined 1. Amortization schedule i.

Consideration is needed in valid contracts but not in valid deeds a. Merely conveys whatever right or title the grantor may have in the property c. Grantor does not warrant that he owns the property or if he has any title that is good title c. Signed by the grantor 1. General principals a. Description of the land a. Requirements for valid deed i. give vi. Basic requirements: i. modern rules are less strict but you still must describe the property ii. most courts find the deed valid after the name is added. If the grantor expressly or impliedly authorizes the recipient of the deed to insert the name of the ultimate grantee. Contain words of conveyance 1. convey. until that point it is void iv. easements. Has no title covenants b. 1. Grantor states there are no mortgages. Metes and bounds 1.General warranty deed Provides the most title protection Six covenants i. Essential deed components 1. Most rudimentary method. liens. Affords no protection for acts or omissions of third parties 3. Identify the grantor and grantee v. transfer. Government survey iv. Use to have to describe all property in detail. No set form is needed iii. Methods of describing land i. Special warranty deed a. still used in eastern states iii. Plat or subdivision map 3. Describe the property 2. or other encumbrances on the property 2. Quitclaim deed a. Contains the same six title covenants but applies them only to defects caused by the acts or omissions of the grantor b. Grant. Nonessential deed components a. . Covenant against encumbrances 1. Identify the grantor 1. b. In writing ii.

an unrecorded deed is valid. First the document itself. Where grantor gives to third party 3. Seal is only require in a few states ii. grantor's intent is what matters i. an undelivered deed is void and passes no title to the grantee even if they are bona fide purchasers c. If grantor intends the deed to take effect only upon death no delivery has occurred thus the deed is a nullity and the property will be divided according to will 2. Where grantor retains deed or grantee 1. General principals a. Most courts follow the common law view that a grantor my not condition delivery to the grantee b.Recordation is irrelevant. Although a deed cannot be conditionally delivered directly to a grantee but it can be conditionally delivered to a third party ii. Deed in a box cases a. Similar issues as constructive or symbolic delivery in gift giving. Central rule is to follow the intent of the parties 1. Interpretation of deeds i. Witnesses are not required e. then extrinsic evidence b. Grantor conditionally delivers the deed to escrow agent who delivers it to the grantee when the contract conditions are met d. . To deliver the deed the grantor must manifest by words or actions an intent that the deed be immediately effective to transfer an interest in land to the grantee d. Sales escrow i. Presumptions a. Most courts remedy a condition by dropping it and vesting absolute title in the grantee 5. Delivery to third party a. Conditional delivery to grantee a. 2. it is customary to record though c. Delivery is presumed if the deed is recorded or the grantee has physical possession of the deed b. Physical delivery is not always enough. If grantor holds it still there is no such presumption ii. Delivery (for valid conveyance there must be delivery of the deed) 1. very difficult to say what the court will do 4. Deed is not effective until it is delivered. If grantee has it there is a rebuttable presumption of effective delivery. Common situations i. Acknowledgement public notary is used in recording deeds but not necessary for the deed to be valid d. Words and actions b.

First exception to the general rule: subsequent bona fide purchaser prevails i. 2 people claim present possessory estate 2. Forged deed is completely void and conveys nothing to a grantee or even a subsequent bona fide purchaser g. All state have modified this rule through recording acts iv. ii. Two non-possessory interests who debate their respective priority ii. Inducement by fraud is voidable ii. Problems arise in three situations 1. Fundamentals of land title a. The problem of conflicting title claims i. Fraud in the inducement 1. Conflict between present possessory estate and someone claiming a non-possessory interest like an easement. Three basic types of recording acts 1. The general rule is that the first who first delivers will prevail over anyone who acquires an interest later iii. Fraud in the inception 1. . In a title dispute between a first in time claimant and a later bona fide purchaser for value the bona fide purchaser prevails vi. The general rule first in time prevails c. Estoppel by deed i. Notice (about half of the state)and use the BFP doctrine 2. Nature of the exception i. One who acquires an interest from a bona fide purchaser also prevails over a first in time claimant b. e. The deed then becomes effective through delivery iii. The clerk will stamp the deed f. Doctrine applies when grantor uses a warranty deed to purportedly convey title to land he does not own to an innocent grantee. or covenant 3. If the grantor later acquires title to the land it automatically passes to the grantee 6.Recordation of deeds Grantor must execute the deed in the presence of a notary public or similar official who signs the acknowledgement form ii. Race-notice (about the other half of states) also use BFP doctrine but say BFP must be first to record 3. Most courts hold this void for all purposes h. Second exception shelter rule 1. First exception bona fide purchaser doctrine 1. When fraud prevents the grantor for knowing that he executed a deed 2. Effect of fraud i. lien. Race (Only two state) do not recognize the BFP exception v. Effect of forgery i.

The smaller the purchase price the greater the risk that it will not be held adequate 2. Purchasers knowledge is measured when the deed or other instrument is delivered e. A BFP is a subsequent purchaser who pays valuable consideration for an interest in real property without any notice of an interest that a third party already holds in the land 2. A notice statute protects subsequent purchaser for value who has no notice of the prior interest 2. Debt as value a. Without notice of the prior interest 1. In most jurisdictions the buyer who receives actual notice of a prior interest after paying part of the purchase price is considered a BFP for the payments before notice but not for those after iv. A mortgagee or other creditor who makes a loan and receives an interest in real property to secure repayment of the debt is considered a purchaser of value b. Without notice of prior interest ii. but must pay more than nominal value c. Notice after partial payment a. Subsequent purchaser b. prior purchasers are first in time and protected under common law iii. Grantee need not pay full market value. Donees and devisees and heirs are not purchasers for value b. or any possessory or non-possessory interest 3. . Creditor who obtains judgment on a lien 3. Relativity of title 1. Who is a bona fide purchaser? : notice jurisdiction i. lease.A bona fide purchaser (BFP) is one who purchases an interest in land for valuable consideration without notice of an interest already held by a third party 2. Almost anyone who acquires an interest in land 2. In title dispute between a first in time owner and a late BFP the BFP prevails ii. Anyone who acquires an easement. Pre-existing debt is not seen as value ii. A subsequent purchaser 1. mineral interest. Key parts a. Who is a bona fide purchaser? : race-notice jurisdictions 1. For value c. For value 1. restrictive covenant. mortgage. Applies only to subsequent purchasers. A subsequent purchaser for value without notice of prior interest 1. Title is relative not absolute d. Exceptions i. Defining value a. lien.

if one has actual knowledge of a fact the others are also deemed to know the fact g. Second exception to the general rule: the Shelter Rule i. If a purchaser has actual notice of facts that would cause a reasonable person to inquire further he is deemed to know the additional facts that inquiry would uncover whether he inquired or not c. Based on purchasers duty to investigate suspicious circumstances b. Notice of any prior interest that would be revealed by an appropriate search of the public records affecting land title even if they never did a title search iv. A subsequent purchaser for value without notice of the prior interest and who records his interest first 2. In most states the purchaser is obligated to make a reasonable inspection of the land before purchaser ii. Might obtain actual notice through any method written or oral or nonverbal iii. Inquiry notice 1. . Notice from possession of land a. or a person who knows that a prior interest exists 2. Arises when the purchaser fails to investigate suspicious circumstances 2. Imputed notice a.A subsequent purchaser for value without notice of the prior interest who records first 1. Notice from reference in a recorded document i. Acts constituting possession 1. A grantee from a bona fide purchaser is protected as a BFP even though the grantee would not otherwise qualify for this status ii. Failure to inspect will constitute inquiry notice iii. Special rule for race jurisdictions: first purchaser for value to record prevails i. Race notice jurisdiction only add the one requirement f. Source of notice ii. Court looks at factors similar to that of Adverse Possession b. Defined a. General principles i. Arises from a special relationship between two or more persons. What constitutes notice i. Record notice/ constructive notice 1. Actual notice 1. In most states a reference in recorded document to an unrecorded document is sufficient to give inquiry notice 3. Knowledge of the prior interest. BFP transfers his protected status to subsequent purchasers h.

The system is simple in itself but is complex because not all recorded documents give constructive notice iii. burdensome. Four requirements 1. Document must take the form of a type of document that affects the title to or possession of real property. Provides confidence needed to invest Anatomy of the recording system i. a. Title searches can be long. and expensive The purpose of the recording system i. And it must have been witnessed 4. Title search using track index 1.i. Title search using grantor-grantee index 1. Priority is determined simply by which purchaser wins the race to the recorder's office Notice is irrelevant in race jurisdiction The recording system The recording system in context i. Almost all state require that the document be acknowledged before a public notary 2. d. Step one: search backward in time in the granteegrantor index b. . In a track index all entries are organized according tot the identity of the parcel involved. not merely freehold estates ii. iii. Mechanics of recording 1. Under race recording statutes the first purchaser for value to record prevails. e. It meets the formal requirements of recording b. f. Thus some documents are invalid Procedure for recording documents i. Protects new buyers 1. The recording acts in 48 states provide that a later purchaser is charged with constructive notice of a prior recorded interest even if they failed to search the records ii. Extends to all interests in real property. they merely are passive custodians 1. ii. deed . judgment Procedure for searching title i. c. Grantor must have signed the deed 3. Step two: search forward in time in the grantorgrantee index c. regardless of the names of the parties Recorded documents that provide constructive notice i. Overview a. Step three: read and evaluate documents that affect title ii. Protects existing owners from loosing their property to later purchasers ii. Government officials have very little control over the recorded documents. Mortgage.

Again the initial grantee was in the best place to avoid miscommunication so they should bear the burden 4. The chain of title generally a. Improperly indexed documents 1. Prior conveyance outside the recorded chain of title. When an improperly spelled name sounds substantially like the true name the spelling error is ignored ii. Deeds from common grantor of multiple lots iii. Generally the description must be sufficiently accurate that a title searcher could both find the recorded document and determine that it concerned the land in question ii. Methods of title insurance . Recorded documents that cannot be located using the standard title search are deemed outside the chain of title and they do not provide constructive notice to later buyers b. It is properly indexed g. commonly called a wild deed does not give constructive notice 5. Document outside the chain of title 1. Defective document 1. Recorded documents that do NOT provide constructive notice i.2. Any document recorded before the grantor obtained title is not in the chain of title b. If someone tries to record but there is a clerical error. Doctrine of idem sonana i. Prior document recorded too late a. indexed erroneously. This encourages those who record title to do so correctly 2. The title searcher must search not only under the correct name but all variations that sound like the correct name 3. or non-indexed the court will say the document still gives constructive notice because it was not the person's fault 8. Prior deed from grantor outside chain of title a. Thus under majority rule a title searcher need only search the index during the period after the grantor obtained title 3. Incorrect property description a. Incorrect name a. Invalid acknowledgement 2. Prior deed recorded after the grantor covered title to a subsequent purchaser is not in the chain of title and does not give constructive notice b. It contains not technical defects 3. Prior document recorded too early a. It is recorded in the chain of title 4.

The final three are future covenants a. Six title covenants a. Statute of limitations begins running when the deed is delivered 3. Overlaps a lot with covenant of seisin c. Covenants of title i. A deed usually contains express promises by grantor about the state of title to the land being conveyed. Covenant of quiet enjoyment(very similar to covenant of warranty) f. Warrants that the grantor is the owner of the estate described in the deed ii. Scope of title covenants 1. Are concerned with future acts or omissions b. What are title covenants 1. Covenant of right to convey i. Covent of right to convey c. these promises are known as covenants of title or title covenants ii. .a. Covenant of seisin i. Even a buyer who purchases with full knowledge of the title defect can recover for damages for breach of this covenant iii. Covenant against encumbrances i. Covenant of further assurances (does not usually apply ) 2. Covenant against encumbrances d. Title opinions and abstracts 3. Statute of limitations runs when the breach occurs 4. They are breached if at all at the very instant the deed is delivered to the grantee b. Warrants that the grantor has the legal right to transfer title ii. Breached if at all when grantee actually or constructively evicted by someone holding superior title d. Run with the land to remote grantors c. Title insurance iii. Title assurance in context Title is a set of intangible. Guarantees state of title at the time of the conveyance b. The first three are present covenants a. Covenant of seisin b. Covenant of warranty e. Three methods of title insurance 1. Nature of covenant i. None of these offer complete protections b. Covenants of title in deeds 2. legally enforceable rights relating to a specific parcel of land ii. Discussion of individual covenants a.

Torrens system 1. What is title insurance 1. Majority holds that the grantee's successor cannot sue the original grantor for breach of a present covenant 2. Damages cannot exceed original purchase price c. Is retrospective. . Obvious and visible encumbrances 1. All jurisdictions say that ordinances and regulations are not encumbrances iii. Most courts will say visible encumbrances are not warranted d. A promise that the grantor will execute any additional documents and take any other actions that are reasonably necessary to perfect the grantee's title iii.Warrants that there are no encumbrances on the land conveyed 2. Grantor agrees to indemnify the grantee who suffers an eviction or similar interference with possession of land by someone with superior title e. Remedies for breach of covenants 1. Future covenants a. Is a contract of indemnity between the issuing company and the property owner 2. Ordinances and regulations 1. not those that might arise in the future d. Covenant of further assurances i. it protects only against title defects that already exist at the time title is transferred. Covenant of warranty i. Insurer promises to compensate or indemnify the insured against losses caused by covered title defects 3. Registration of title i. Present covenants a. No rights or interests in third parties that would reduce the value or restrict the use of land ii. Now is identical to covenant of warranty f. Do run with the land to the grantee's successors iv. Title insurance policies i. Warrants that the grantees possession and enjoyment of the property will not be disturbed by anyone holding superior title ii. Rights of grantee's successors 1. Covenant of quiet enjoyment i. Grantor's promise to defend the grantees title against other claimants ii. Grantor is liable for compensatory damages if any title covenant is breached a. Government agency issues a certificate of title that establishes land title 1.

interference must be substantial. Two types of Nuisance—Public & Private a. Examples: factory discharging chemicals which pollute water supply iv. reckless. this will be “substantial” damage only if a person of normal sensitivity would be seriously bothered. ii. ii. P will not win in nuisance . etc. noises. only if that person can show special damage—an injury or damage different from what other members of public have suffered. Whether the conduct is proscribed by statute or ordinance (Case: Spur) 3. it must also be either: intentional and unreasonable OR the unintentional result of negligent or reckless or abnormally dangerous activity. Substantial Interference—If P’s damage consists of his being inconvenienced or subjected to unpleasant smells. Even if D’s conduct is intentional. B.Chapter 9—Judicial Land Use Controls: The Law Nuisance A. safety. To constitute a public nuisance—nuisance must: i. A nuisance is different than a trespass that involves an interference with exclusive right of possession. Affect a considerable number of people or an entire community neighborhood. b. Factors to consider for unreasonableness of public nuisance: 1. comfort or convenience 2. Whether the conduct is of a continuing nature or has produced a permanent or long lasting effect v. Private Nuisance—nuisances causing substantial interference with private rights to use and enjoy land of an individual or small number of persons. In order to give rise to liability. or abnormally dangerous (which embody unreasonableness) iii. General principle—a person may not use his own land in an unreasonable manner that substantially lessens another’s use and enjoyment of his land. Unreasonableness—the relevant inquiry concerns the level of interference that results from the D’s conduct. i. Public Nuisance—are nuisances substantially affecting the rights enjoyed by citizens as a part of the public. Defendant’s mental state—must show that D’s conduct was either intentional OR negligent. Present in a public place where people frequently congregate or where the member of the public are likely to come within range of its influence iii. Parties that can sue—any member of the affected public. Whether the conduct substantially interferes with public health. peace.

the owner of the surface interest has the right not to have the surface subside or otherwise to damaged by the carrying out of the mining. This support is absolute—once support has been withdrawn and injury occurs. mineral rights) are severed from the surface rights. there is no right to support structures on the land (i. A very carefully constructs a large excavation almost to the edge of his property.unless he shows that D’s actions are unreasonable. Absolute right exists only with respect to land in its natural state. buildings) pg. Structures existing—the surface owner has the absolute right to support. Generally—every landowner is entitled to have his land receive the necessary physical support from adjacent and underlying soil. b. B’s right to lateral support has been violated. Arises only where sub-surface rights (i. When such a severance has taken place. Ordinarily. but also support of all structures existing on the date when the severance took place. Subjacent support—the right to support from underneath the surface a. the responsible person is liable even if he used utmost care in his operation. 2. Considers—utility and gravity of nuisance iv. Intentional (Restatement)—courts should consider whether the gravity of the harm outweighs the utility of the actor’s conduct. Lateral support—the right to support from adjoining soil. 3. pg 645 book c. 104. not only of unimproved land. REMEDIES . and he may recover damages. impairing the surface of B’s property. 2. Example—A and B are adjoining landowners. Parties that can sue—only landowners v. Takes into account the nature of the neighborhood— (Example: Steel mill in industrial park would not be unreasonable where it would be in a residential neighborhood) 1.e. C. This causes B’s soil to run into A’s excavation.e. a. Lateral and Subjacent Support 1. b.

The remaining four all arise as a matter of law without any expressed agreement b. Injunction—Court order requiring a person to do or prohibiting that person from doing a specific act. Real Covenants. Temporary damages—compensation awarded to pay for injuries sustained as the result of another party’s occasional wrongful acts. Easements burden the land in the possession of another iii. Negative easement . Elements 1. Equitable Servitudes 9. Licenses. 3. A non possessory right to use land in the possession of another ii. Licenses a. Authorize the holder to do a particular act on the servient land b. Expressed easements arise only when a landowner agrees to burden his land iii. The land burdened by the easement v. Dominant tenement/ dominant estate/ dominant land 1. Affirmative or negative a. Easement in context i. has an apparent efficiency objective to avoid the greater harm (social cost). Classifying easement 1. P must show that the harm to him actually outweighs the social utility of D’s conduct. (Aka—comparative hardship/equitable hardship. What is an easement i. 2. To obtain an injunction. Easements a. This means an easement is subject to the statute of frauds 3. Affirmative easements i. Not an interest in land b. Does not give the holder any right to possession but merely the right to use the land for a particular purpose 2. Doctrine of Balancing of the Equities—Comparison injury of plaintiff as compared to injury of the defendant and public. to enter the land of the other without being considered a trespasser 10.1. Damages—if the harm has already occurred. Non-possessory Interest in Land – Easements. A non possessory right to use land in the possession of another (such as for ingress and egress) ii. Easement is an interest in the land not simply a contractual right a. Defining easement 1. Merely a privilege that is revocable at the option of the licensor. P can recover compensatory damages 1. Does not have to comply with SOF c. The land benefited by the easement iv. Servient tenement/ servient estate/ servient land 1.

will. In gross i. Nature of easement 1. By reservation a. At common law it can only be reserved in favor of the grantor and never to a third party i. In writings ii. It is seen as attached to the dominant land and not to any particular owner of that land b. Must comply with statute of frauds i. When a grantor conveys or grants an easement to another 3. When grantor coveys land to another but reserves an easement in the land ii. Easement by reservation a. It is attached to the holder not the land 1. Manifest intent to create easement iv. Appurtenant i. Signed by grantor 2. Benefits the easement holder in using the dominant land ii.Entitles the dominant owner to prevent the servient owner from doing a particular act on the servient land 2. Many courts have abandoned this rule iii. Same formal requirements as above by grant b. By grant a. Policy rational 1. It involves only servient land there is no dominant land 3. Protects the personal liberty of landowners i. Creation of easement 1. Voluntarily created in a deed. Is personal to the holder and benefits the holder in a personal sense whether or not he owns any other parcel of land ii. Easement by grant a. Classification depends on intent of parties a. Appurtenant or in gross a. Identify parties iii. Law favors appurtenant c. Describe the land v. Access easements and easements for use or enjoyment are almost always appurtenant b. or other written instrument 2. An easement appurtenant is automatically transferred when the dominant tenement is transferred while an easement in gross remains with the holder c. If intent of parties cannot be determined the easement is presumed an appurtenant 4. Express easements i. .

d. Easement must be convenient or beneficial to the use and enjoyment of the dominant tenement but need not be absolutely necessary b. When the land was common the owner had to use one parcel to benefit the other and b. Reasonable necessity 2. this is called a quasi-easement . Is met if the owner would expend substantial money or labor in order to provide a substitute iii. Can be created by grant or reservation ii. . Arises from operation of the law based on circumstances without expressed agreement 2. Courts have not extended this to modern utilities i. Existing apparent and continuous use a. Reasonable necessity a. Sometimes called implied easement or easement by implication 2. Almost all involve roads to landlocked parcels a. Does not fall in statute of frauds 3. Easements implied from prior existing use Nature of easement 1. Required elements a. It must appear the parties intended the existing use to continue c. Severance of title a. Severance of title to land that was held in common at one time b. Land that was in common at one time is now divided an one parcel must go to a new owner and the other retained 3. Easement by necessity i. Creation of easement 1. Statute of frauds does not apply 3. Parties would reasonably expect that it will continue after severance of the title 4. An existing apparent and continuous use when severance occurs c. One cannot obtain an easement in ones own land. and describes existing use of dominant and servient land while both were owned by the same person d. Policy rational 1. Requires high degree of necessity when the title is severed but does not require prior use 4. Uses that are discoverable through reasonable inspection even if not readily visible e. Apparent i. Promotes productive use of land and continued use of land e. Continuous i. Nature of the easement 1.

expensive. or impractical it may be there will be no strict necessity iii. Creation of easement 1. 5. Adverse and under a claim of right i. Owner must not hold an easement or other legal right of access to cross the adjoining land ii. Necessity at time of severance a. If owner has any legal means of reaching the land regardless of how inconvenient.Two modifications Servient owner usually gets to decide the location for easement so long as its reasonable b. Creation of the easement 1. Required elements a. Continuous and uninterrupted for the statutory period d. Non-permissive use c. For statutory period 2. Parcel must be entirely surrounded by privately owned land without touching a public road 2. Severance caused property to be absolutely landlocked 1. Closely related to adverse possession in that both share the central concept that property rights in the land of another can be acquired by conspicuous long-term use 2. Such that a diligent owner who was present on the land at the time would be able to discover it b. Severance of title of land that was common b. Required elements a. Nature of easement 1. Strict necessity must exist at the time common ownership was severed b. Easement endures only as long as necessity endures ii. Strict necessity 2. Not necessary that the owner have actual knowledge a. . Few courts require active use. Must not be concealed or hidden from view c. Severance of title 3. Prescriptive easements i. Open and notorious b. and also the exclusive element is not that important 3. Policy rationale f. Involves statute of limitations a. Minority view: reasonable necessity iii. Traditional view: strict necessity i. Open and notorious use a. Tacking and tolling ii.

Requires that claimant have good faith belief that he has the right to use the land c. Continuous and uninterrupted for statutory period a. Easements by estoppel or irrevocable licenses i. License a. In most cases this just means use must be separate and distinguishable from use by general public 6. the need only be as frequent as is appropriate given the nature of the easement and the character of the land b. Often consist of improvements to servient land b. Can be expressed or implied 3. Proof of open notorious continuous and uninterrupted creates presumption that use was adverse and burden shifts to owner to show consent i. . Usually statutory period is between 10 and 20 years iii. More likely to be found reasonable if the parties clearly intended to create a permanent right of access 4. Claimants use is independent of use by others b. Licensor's knowledge or reasonable expectation that reliance will occur 2. Exclusive use a. Reliance by licensee a. License b. Creation of irrevocable license 1. Policy rationale a. Required elements a. Usually an owner who gives a license can revoke it at any time 2. without permission of the servient owner and the claimants subjective intent is not relevant b. Nature of the easement 1. 4. Licensee's expenditure of substantial money or labor in good faith reliance c. If however the licensee expends substantial money or labor in reasonable reliance on the license and the licensor should reasonably expect such reliance the license can become irrevocable by estoppel 3.Use that is adverse and under claim of right Objective test i. Subjective test i. Knowledge of licensor iii. Policy rational g. Claimant need only use the land as a reasonable owner would. Some will not apply presumption if land is wild and unenclosed 5. Last only as long as necessary for licensee to recover the value of his investment ii.

Takes action that clearly manifest an intent to relinquish iv. ii. Easement in gross 1. Traditional approach iii. Modern approach m. Estoppel vii. Merger ii. Transfer of easement i. Abandonment 1. Change in location or dimensions of easements 1. the easement holder might release his rights 2. frequency and intensity of use of easement iii. Written release iii. Other types of easements Through subdivision Eminent domain Implied dedicated property i. In general 1. Licenses i. Can be terminated by eminent domain or estoppel l. Is freely transferable unless parties should not reasonable expected this k. Termination of easement i. Location and dimensions may change only if the owners of both lands agree j. . Misuse ix. Use of easement to benefit land other than dominant land 1. Easement holder cannot use the easement to benefit any other parcel other than the dominant land and a normal remedy if he does will be an injunction iv. Scope of easements i. Mere non-use is not abandonment 2. Lack of necessity x.h. iii. Owner must intend to abandon and relinquish his rights a. If the owner of the easement acquires the servient land the easement ends through the doctrine of merger 3. Any transfer to the dominant land also transfers the benefits of the easement unless there is a contrary agreement ii. Prescription v. Easement appurtenant 1. Manner. In general 1. Parties can impose an expressed limitation . Owner stops using it for a long time b. Destruction of servient tenement vi. Turns on intent of the parties ii. Entitles the holder to prevent the owner of servient land from doing a particular act ii. Eminent domain viii. Negative easements i.

Defining a real covenant 1. fish or other physical substances ii. Distinguish between promisor's burden and promisee's benefit 3. Issue is whether the benefit runs with the land c. What is a real covenant i. Three scenarios a. The promisee's successor could try to enforce the covenant against the original promisor i. Unlike an easement it is not an interest in the land of another b. gas. Is a promise concerning the use of land that benefits and burdens the original parties to the promise and also their successors and is enforceable in action for damages 2. oil. Profits are governed by same rules as easements 11. Birth of private land using planning i. Elements i. The issue is whether the burden runs b. Perspectives on the real covenant 1. Right to enter land of another to remove timber. Statute of frauds dose not apply and it can be created orally iv. Original promisee might seek to enforce the covenant against the promisor's successors i. gravel. The promisee's successor seeks to sue the promisor's successor i. and the promisee's successors are able to enforce the promise d. real covenants extend burdens and benefits of land use covenants to the successors of the original parties ii. Real Covenants a. Unlike equitable servitudes which are usually enforced through injunction. signed in writing ii. It is said to run with the land. A covenant. evidenced by words assigns or successors c. Includes right to sever and remove substance from land. real covenants usually have money damages as a remedy. this differs from easements iii.Informal permission that allows the licensee to use the land of another for narrow purposes ii. Intent. Distinguish between original parties and successors 2. Creation of a real covenant i. Profits a prendre i. game. Like equitable servitudes. Not an interest in land but rather a personal privilege iii. Promisor's successors are bound to perform the promise. but in reality it runs with the estate in land 3. real covenants are settled in an action at law for breach of contract iii. Licensor may revoke license at any time n. minerals. .

Intent is found in express language . The covenant must touch and concern the land iv. In order for a burden to run with the land and thereby bind the promisor's successor you need 6 elements i. Defining touch and concern land i. Writing that complies with Statute of Frauds 3. Require the promisor to perform some affirmative act 2. Burden must relate to the land 2. Covenants not to compete do not meet the touch and concern requirement iii.ii. 2. Negative covenants 1. Intent can be found in circumstances and conduct d. use or enjoyment of the premises ii. Vertical privity must exist vi. The issue is whether the benefit and burden run with the land Original promisee v. Covenant in writing a. For burden to run with the land the original parties must have horizontal privity i. Intent to blind successors a. The successor must have notice of the covenant 2. Use of the land 1. Original parties must have intended the covenant to bind successors b. words such as assign or successors is good to have c. Touch and concern land a. promisor's successor: does the burden run ? 1. Promise must exercise direct influence on the occupation. Burden does not run if the benefit is in gross or fails to touch and concern the land 5. Special problem: what if the benefit does not touch or concern i. Restricts the use of the promisor's land. Horizontal privity a. usually satisfies the touch and concern requirement 3. The original parties must intend to bind their successor s iii. . Many courts presume intent 4. Affirmative covenants 1. Usually the payment of money b. Requirements for burden to run a. Horizontal privity must exist v. Covenant must be in writing ii.

We consider the relationship of the original parties to the promise and ignore successors for horizontal privity c. Notice to successors a. an example is an easement e. imputed notice Promisee's successor v. Mutual interest in the same property. It should be easier to benefit successors rather than burden them b. Arises out of recording statutes not from common law covenants b. Actual. . Of successor succeeds to the entire estate in land held by the original grantor. Successive interests i. Relationship between original covenanting party and his successors b. Insist that there be a landlord tenant or similar relationship involving mutual interest in the land ii. original promisor: does the benefit run? 1. Some state abandon the requirement altogether d. Must have vertical privity c. iv. Horizontal privity and notice are not required d. Requirement for burden and benefit a. record (constructive). Requirement for benefit to run a. Look to burden requirements. Benefit of covenant must touch or concern the land iv. One who latter acquires interest without notice of a prior adverse claim is protected as a BFP c. Also the vertical privity is relaxed and will be found even when the successor received less than the entire interest of the grantor Promisee's successor v. No horizontal privity required 6. inquiry. Three competing views i. grantor-grantee iii. Vertical privity a. Grantor grantee relationship f. Must be in writing ii.iii. original promisor: do the burden and benefit both run ? 1. Anything less than the entire estate there will be no vertical privity 7. if they are met odds are the benefit requirements are met and they will both b. Majority view extends the doctrine to include all successive interests. Four elements i. Original parties must intend for it to benefit successors iii. Mutual interests i. vertical privity exists c. and the covenant will exist between the two successors. A promise concerning the use of land that benefits and burdens the original parties to the promise and their successors and 2. Defining equitable servitude 1. Special or consequential damages could also be recovered 12. Doctrine of merger could end it vi. Remedy is injunction and no need of privity of estate b. Estoppel v. 30 years ii. Elements i. The equitable servitude in context i. Primary tool for enforcing private land use restrictions ii. All home owners get together covenants conditions an restrictions CCR iii. When the conduct of the person entitled to the benefit demonstrates the intent to relinquish his or her right vii. Notice c. Remedies for breach of real covenant i.e. Termination of real covenants i. The difference between the fair market value of the property before and after the defendant's breach ii. Methods i. It is easier to enforce a promise as a equitable servitude than a real covenant because horizontal and vertical privity are not required iv. Equitable servitudes a. When changes in the conditions in the neighborhood of the burdened land have so substantially changed that the indented benefits of the covenant cannot be realized f. Three factors distinguish equitable servitudes from real covenant . The party benefited might release his right iii. Can end automatically if parties set a time limit i. Restriction of use of land enforceable in equity iii. Intention to bind the land iii. Abandonment 1. Owner in subdivision puts restriction on some and the intent of common development is manifest in inquiry notice d. in this case the parties must intend both to bind and benefit their successors e. Compensatory damages 1. What is an equitable servitude i. Writing that complies with SOF ii. Distinguished from other doctrines 1. Eminent domain could end it iv. The only requirement that will involve more analysis is the intent part. Declaration of restriction filed with recording office (usual method) ii. Is enforceable in equity ii.

Successors must have notice of the promise b. Four elements to bind a promisor's successors i. Neither vertical nor horizontal privity is needed 2. promisor's successor: does the Burden run? 1. In writing b. There is a special exception called the common scheme doctrine i. c. Promise must touch or concern the land iv. Two fundamental rules a. First: you must distinguish between original parties and their successors i. . b. ES are interest in land and thus the ES must satisfy the Statute of frauds b. Second: each ES has a burden and a benefit ii. Touch and concern 5. Original parties are usually bound by contract law but the successors are not and would only be bound in property law b. Both are interests in land 3. Notice to successors a. Three elements required for benefit to run a. Elements required in ES differ from negative easement and there are different defenses 4. Also courts do not like negative easements restrict the likelihood of it being used e. It harder to tell the difference between an equitable servitude and negative easement a. Both might involve a promise to refrain from acting b. Intent to bind successors 4. Creation of an equitable servitude i. Promisee's successor v. Both allow injunctive relief c. Arise from recording statutes iii.Standard is easier to meet Broader defenses to equitable servitudes traditional remedy for violation is injunction not damages 2. Promise must touch or concern a. Requirement for burden to run a. When developer manifests a common plan to impose uniform restrictions on a subdivision most courts will find implied ES 3. Promise must be in writing or implied from a common plan ii. Original promisor: does the benefit run 1. Perspectives on the equitable servitude 1. Original promisee v. Original parties must intend to bind successors iii. Original parties intend for the benefit to run c. Promise in writing or "common plan" a.

equitable servitudes and the subdivision i. Single family residence. covenants and the group home a. Nature of defense a. Creation of subdivision restrictions ii. utilitarian rationale b. Changed condition 1. . Racial covenants a. Anti-discrimination protections 1. Acquiescence a. abandonment. If defense was allowed then changed conditions would slowly encroach on entire neighborhood c. Most courts also do not enforce these because they are against public policy iv. Relative hardship iv. When plaintiff unreasonably delay in enforcing the promise 4. Under 14th amendment and the Fair Housing Act A and B cannot enter into an ES to agree not to ever sell to a black man 2. Termination of Equitable servitudes i. Laches a. will not invoke the changed condition defense b.Promisee's successor v. Other defenses 1. Release. Changed conditions outside of the community that only affect border lots. Implied burden: the implied reciprocal covenant and the common plan iii. Implied benefit g. promisor's successor: do the burden and benefit run? 1. If plaintiff manifests an intention not to enforce a land use promise and the defendant relies on this conduct reasonably to his detriment then defendant has defense of estoppel 3. Special problem. merger. If conditions change such that the benefit no longer exists then the ES no longer exists. Estoppel a. Both benefit and burden must run f. and eminent domain iii. The border lot exception does not apply if the changed outside conditions are so large that they affect all property in neighborhood v. Changes in zoning 1. Do not terminate but large changes in conditions might ii. Special problem the border lot a. Plaintiff who ignores violations by one person but not for the defendants will loose 2. Obsolete restrictions interfere with the productive use of land 2. Defense in general 1.

Constitutionality of zoning i. Police power i. Authorizes landowner application for variances and special exceptions iii. Servitudes in gross are permitted 13. Delegate administrative authority d. Restatement (third) of Property i. Parties intend to make ES b. Benefit and burden for negative easements automatically run b. Considers appeals from decisions made by zoning officials 2. The inherent governmental power to promote the health. Basic requirements a. . safety. Creation of servitudes 1. Benefit burden for affirmative covenants run only with vertical privity c. welfare. If plaintiff violates promise to one and then seeks to enforce it against another h. All forms of government land regulation c. 1. Amber Reality Co. unconstitutional. Enact zoning ordinances 3. Administered by a local agency usually called a zoning board ii. Firmly established the constitutionality of zoning in general f. Deprived owner of property without due process of law 2. and morals b. Took property without just compensation ii. Adopt a comprehensive plain 2. Servitude is not illegal. Zoning in general a. Variance 1. Basic functions 1. Zoning defined i. Village of Euclid v. Remedies for breach of equitable servitudes i. Administering the ordinance i. Special deviation from the strict enforcement of the ordinance e. Violated owners rights of equal protection 3. Constitutional objections to zoning 1. Nonconforming use a.Relative hardship doctrine: because this is equitable relief the courts will balance equities and hardships 5. Comply with SOF c. Zoning ordinance i. Unclean hands a. Special issues a. or against public policy 2. Do not need privity or touch and concern 3. Enables city council or other local legislative body to 1.

Terminating nonconforming use 1. Because separation of powers principle requires judicial deference to legislative judgments the decision is largely insulated from later judicial review b. Standards for amendments 1. Flexible zoning b. If a zoning amendment violates the spot zoning doctrine it is invalid iii. Amortization 1. Injury to surrounding landowners and public in general 4. Legislative judgment a. Any changes condition in the area i. In most states the owner who obtains a building permit and makes substantial expenditure in good faith reliance on the permit obtains vested right to use regardless of any later change in law 14. Structure containing the use is destroyed iv. Zoning amendments are presumed valid absent proof that they were arbitrary or unreasonable and a court will hold the amendment as valid even against a constitutional due process or equal protection argument b. Factors 1. .Is a use of land that lawfully existed before the ordinance was enacted but that does not comply with the ordinance ii. Modern approach to zoning i. Spot zoning i. Most courts bar expansion of a nonconforming use iii. The use is discontinued for a substantial periods 2. Role of the amendments 1. Owner intends to abandon the use b. Goes on a lot-by-lot basis rather than blind adherence to comprehensive plan ii. Zoning ordinance may be modified by zoning amendment adopted by the city council or other local government entity a. Size of parcel 2. Might place land in a whole new zone b. Tools for Zoning a. Zoning amendments i. Benefits conferred on parcel compared with surrounding parcels 3. Doctrine of vested rights i. Abandonment a. Gives the nonconforming use a fixed period of time to operate the use g. Might change uses that are allowed in a zone ii. Rezoning that confers special benefit on a small parcel of land regardless of the public interest or the comprehensive plan ii. Destruction a.

2. Many jurisdictions prohibit use variances iii. Most will allow variance even if purchaser buys home knowing it violate zoning. Public can vote on rezoning c. Use variance a. Change or mistake rule i. Judicial review of quasi judicial action 1. and protection to public interest 2. The owner cannot obtain reasonable return under the existing zoning due to some special characteristic of the property itself that is not generally shared by the surrounding parcels b. Rezoning is only appropriate to correct a mistake made in original zoning or if physical conditions have changed c. court reasons that denying variance will hurt society by lowering the productive value of the land 3. Allows a use that normally is prohibited in the zone b. Hardship a. Decision by local legislative body that affects only one parcel of land is essentially judicial not legislative in character ii. a literal enforcement of the provisions of the ordinance will result in undue hardship and so the spirit of the ordinance shall be observed as substantial justice done b. 2 Types of variances 1. General rule a. Hardship cannot come from buyer's own actions i.5. owing to special conditions. size. Protection of public interest . Not often used anymore ii. Spot zoning is more tolerated in modern flexible approach c. location. Allows a particular parcel of land to be used in a way that would otherwise violate the ordinance ii. Area variance a. Role of variance 1. Zoning by electorate 1. Whether rezoning is in accordance with comprehensive plan iv. where. setback. Hardship must stem from the nature of the land not from owners need c. Test for granting variance has 2 issues: hardship to the property owner. Other constraints on amendments i. In specific cases such variances from the terms of the ordinance as will not be contrary to the public interest. or similar requirements 2. An authorized deviation from strict enforcement of the zoning ordinance in an individual case due to specific hardship. Allows modification of height. Variances i. Standard variance 1.

it identifies the conditions that must be met before rezoning is approved but in theory does not legally bind itself to rezone the land 2. Standards for special exception 1. Cluster zones 1. Variance. Judicial attitude towards special exceptions is much more favorable than it is towards variances e. Done on a case by case basis ii. Whether variance will alter the essential character of the area iv. City approves creation of new zoning but does not specify its location 2. but modern trend is beginning to allow them ii. . Use that is authorized by the zoning ordinance if specified conditions are met 2. board provides notice to public. Floating zones 1. Represents a legislative decision that while the particular use is appropriate in the zone as a general matter. Usually invalid as spot zoning. Conditional zoning 1. Special exception allows use authorized by zoning ordinance. Modern trend accepts these as well iii. Owner applies. Places a limit on the density of a residential subdivision a. Procedure for obtaining variance 1. Contract zoning 1. Role of special exception 1. Same as getting a variance 2. Special exception distinguished from variance 1. City makes no official promise. Special exception (conditional or special use) i. Issuance of variance is an administrative decision that is quasi-judicial a. prevents harm to surrounding uses 2. certain restrictions are needed to ensure that it does not harm surrounding uses at its specified locations 3. in contrast. Procedure for obtaining special exception 1.Focuses on the impact the variance will have on the neighborhood b. Many ordinances are vague though and courts are divides as to whether the vague ones are valid iv. Invalid in most states iv. Use to be that zoning ordinances would be detailed and leave little room for discretion 2. It is easier to get a variance than defend it in successive litigation d. New zoning tools i. allows use that deviates from ordinance and relieves the property owner from unusual hardship iii. public hearing 2.

Also protects the residential character of neighborhood iii. The regulation is no broader than necessary 2. usually public health. Ordinance is valid only if supported by compelling state interest b. Borass 1. Challenges to equal protection are reviewed under a strict scrutiny or rational basis a. Substantive a. liberty. Applies when an ordinance or other regulation discriminates against a suspect class or infringes on a fundamental rights ii. On the time . State constitutions 1. Decisions based on state constitutional grounds cannot be overturned by federal court 2. place. Family zoning i. Note the standard is compelling interest not substantial iii. Equal protection 1. Freedom of speech i. Issues 1. Usually justified on the basis that it reduces traffic. or property 2. Village of Belle Terre v. A regulation will be upheld if it is rationally related to a legitimate state interest. Land use Controversies a. Content neutral regulations 1. and overcrowding ii. Focuses on the fundamental fairness of the procedure used to deprive a person of life. State courts are far more willing to strike down regulations based on substantive due process c. noise. Due process 1. and manner of the speech are upheld when a. Upheld family zoning . College students living together 2. Strict scrutiny i. Similar review on a relational basis b. Constitutionality is the ultimate constraint on zoning power ii. Federal question i. The government interest is substantial b. safety. welfare iii. congestion. Rational basis i. The regulation directly advances that interest c. Procedural a. Distinguish between content based and content neutral land use regulation ii.15. Non-profit iv. Examines the substance or content of the governmental decision as opposed to the means by which the decision was reached b.

Majority holds that aesthetics alone are not appropriate governmental purpose 3. Court held ordinance as legitimate exercise of police power using essentially the same basis of Due Process Clause 2. Cities can regulate billboards. Aesthetic Zoning i.Ordinance was mere social and economic and did not involve a fundamental right or suspect class. Pro: delivers better care than hospitals at less cost 2. Act does not apply to reasonable restrictions regarding max number of occupants 3. Specified design standards c. Stayanoff v. Con: increases noise traffic ect. thus the standard is that the ordinance need only need not be arbitrary or unreasonable 3. Marshalls dissent argues that the logic behind the family ordinance is flawed and the means are not rationally related to the end goal of controlling density 4. Fair Housing Act 1. State courts usually follow Marshal and prohibit family zoning d. junkyards and other unsightly uses bases on aesthetic consideration ii. Exclusionary Zoning i. Ordinances that demand large lot sizes and minimum floor space iii. And increase crime and violence ii. issue 1. Exception : a. Land use controls that tend to exclude low income and minority groups ii. Typical criteria include a. Protects aesthetic value 2. Justification for these type of statutes 1. Used often to shoot down ordinances against group homes 2. Protects property value 3. Appearance of surrounding area b. Does police power permit municipalities to regulate aesthetics 2. Berkely a. . Small non-profit facility 1. Structures 1. Group Homes i. Impact on property value 2. Court held the ordinance was not a max occupancy restriction but rather a land use restriction that did not fall in FHA's exception e. Promote strong tax base and quality public services f.

the public use requirement is satisfied 3. Future land uses . Gilleo 1. The amount that a willing buyer would pay in cash to a willing seller 2. City of New London a. Nor shall private property be taken for public use without just compensation 4. For public use i. residential signs 16. Rational is if there is something to restrict than there is something 3. The public purpose test 1. Eminent domain a. a purpose within the scope of the government police power. Taking can only be for public use b. g. Does not impact the just compensation ii. Eminent domain in context i. Takings clause of the Fifth amendment i. Public use is defined by the purpose underlying the governmental action 2. Without just compensation i. Signs Bad aesthetics lower property value and that’s a reasonable state interest In general municipalities may regulate signs under the police power ii. Two restrictions a. Ordinance may be invalid for prohibiting too much speech or on the basis that it prohibits too little speech 2. state. Constitution does not expressly grant eminent domain power to the federal government rather it restricts eminent domain power 2. Federal. Supreme court said the city can condemn an occupied home and then convey it to a private company as part of an economic development project d. There must be just compensation to the owner c. Fair market value standard a. Ordinance was struck down because it entirely foreclosed a traditional and important medium of expression. Defining just compensation 1. Scope of the takings clause 1. As long as property is taken for a legitimate public purpose. i. 14th amendment makes the restriction on taking applicable to states 5. and local governments have the inherent power to take private property for public use over the b. The problem of defining public use ii. Kelo v. City of Ladue v. Impact of owner's sentimental attachment or special need a.b.

Goodwill iv.Property must be valued at the highest and best use for which it could be adapted not merely its existing use iii. Eminent domain procedure 1. Partial takings e. .

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