PROPERTY OUTLINE

I. INTRO TO PROPERTY: a. What is property? i. Real vs. personal b. Present and future interests: i. Tenant has a present possessor interest ii. Future possessory interest (whenever leasehold terminates) iii. Reversion: if LL retains future interest iv. Remainder: if Ll transfers future interest to 3rd party c. Lease v. K d. Lease: i. Conveyance (present transfer) ii. Covenants are independent iii. Two principal promises: 1. Ts promise to pay rent 2. LLs promise of Quiet Enjoyment iv. Common Law: T pay rents regardless of LLs fulfilling promise e. K: i. Covenants are dependent (protects other party) CLASSIFICATION SYSTEM: a. Term of Years: Tenancy for a term b. Periodic tenancy: Fixed period of duration and continues automatically until either LL/T gives notice of termination i. Express (in writing) ii. Implied (harder because of SOF) 1. Exceptions: a. Equity b. Month to month; year to year iii. Automatically turns over unless notice of term is given 1. Common law notice must equal length of period 2. Advance and at end of month a. Ex. 1 year = 6 month prior notice c. Tenancy at will: no fixed duration i. Lasts as long as either party desires ii. No advanced notice iii. Automatically ends if: 1. LL/tenant dies 2. LL transfers 3. May only be term in in less than 30 days (NY) a. Right to term does NOT equal tenancy at will d. Holdover tenancy: tenancy at sufferance i. K overrides rule can always vary rule w K 1. NYRPL 232 (a)

II.

III.

e. Lease v. license: i. License: 1. Type of K 2. Terminable ii. Lease: 1. A K with conveyance 2. Mutually enforceable promises 3. A conveyance of a present possessory interest 4. Dictates remedies and other issues 5. Breach -> LL/T court to enforce DUTY TO DELIVER POSSESSION Hannan v. Dusch a. Legal possession vs. Actual possession i. Legal: whether someone has all rights ii. Actual: in it or not iii. American vs. English rule: both share duty to deliver legal possession 1. American: LL has to only guarantee legal possession, not actual a. All T2 has is nobody has better right of possession b. New T has to sue holdover tenant 2. UK Rule: implied duty to deliver legal and actual possession a. In order to sue breach of K: must show i. Existence of a promise ii. Breach (do not know until beginning of term) iii. Damages (remedy = not paying rent for something not in possession of) b. Policy Reasons for Duty to Deliver: i. American Rule: not duty to deliver actual) 1. Someone shouldnt be responsible for tort of another 2. LL not at fault 3. T2 has sufficient legal and financial remedies to protect themselves 4. Should be express covenant that LL has to deliver actual and legal possession at the time and date + remedy a. T2 should have a provision that rent is conditioned upon delivery of both b. T2 can request prior lease agreements 5. NYRPL 223(a): Remedies of a lessee when possession is not delivered: a. Implied actual and legal possession; lessee can rescind lease and recover consideration paid (statutory default rule) 6. Common law: American Rule -only need to deliver actual possession

IV.

a. Weigh out both rules but state our jurisdiction governs the rule SUBLEASES & ASSIGNMENTS: a. Privity of estate: LL (lease as conveyance) T b. Privity of K: LL (lease as a K) T c. Privity of K: i. Anytime K with enforceable promises *sue for breach of K d. Privity of estate: (theoretical relationship) legal nexus holder of reversion (LL) and holder of possessory estate e. Assignment: something is being transferred i. T2 has privity of estate 1. Legal consequences: a. LL sues T2 for breach of K i. No privity of K between LL and T2? 1. Someone elses promise will be binding on T2 even though T2 did not personally make promise ii. Does not automatically sever K relationship unless: 1. Release (LL must choose) 2. Full performance f. LL can sue: i. T1 (privity of K) ii. T2: (privity of estate) g. T2 -- T3: privity of K: goes away by i. Release or full performance NOT DEATH h. How to sever priorities: i. Privity of K: 1. Full performance of promise 2. Satisfaction 3. Discharge 4. Innovation 5. Release (expressed) MUST BE EXPRESSED ii. Privity of Estate: 1. Transfer of possessory interest 2. Assignment i. Scenario examples: j. Special promises = real covenants : runs with land because of legal relationship between parties (each have interest in property) k. Suretyship: Party can get a remedy (T1 sued for T2s failure to pay rent) T1 can sue T2 for paid rent (ought to be paying vs. person legally paying) l. Subleases: Someone taking possession of lease and paying for it i. Must be less than entire lease ii. T1 as sublandlord 1. Has reversionary right at end of sublease (takes back into possession)

m. How to identify Sublease vs. Assignment: Ernst v. Conditt i. Formalistic rule: Common law/Traditional ii. Assignment = whole term with no interest or reversionary right iii. Sublease: less than everything transferred 1. Look at what document does formally iv. Modern Rule: Looks at intent of parties 1. LL vs. Assignee= always liable under privity of estate v. Rights: LL v. T1: 1. Assignment or sublease a. Modern Rule v. Formalistic Rule b. Assignment: i. LL v. T1 = POK ii. LL v. T2 (if assumption) POK & POE iii. Legal relationship between LL & T2 iv. K between LL & T1 remains v. No automatic relaease vi. No automatic assumption 1. Only assumption creates K relationship between T2 and LL c. Sublease: i. LL v. T1 = POK & POE ii. LL v. T2 = NONE iii. 20 year 1 day iv. No legal relationship between LL and T2 (subtenant) bc no POE v. K between LL & T1 remains 2. Transferability: Consent: under what circumstances will act imply required LL consent for assignment? a. Implied provision (absent express provision) i. LL argument: 1. Reliance on special skill Rowe v. A&P 2. % rate b. Default Rule: Transferability permitted (must see specific evidence) 3. Reasonable OR Unreasonable Consent to Assignment: a. Majority Rule: (traditional) May refuse consent even if arbitrary i. Argument: 1. LL should have control 2. Freedom of ownership 3. LL should only have to look to original T a. Respects the K (unambiguous reservation of rights to LL) T could have bargained for K

Majority

Minority

clause Cts. Shouldnt rewrite K b. LL deserves increase of FMV property b. Minority Rule: (modern approach) LL must be commercially reasonable absent an express provision i. Argument: 1. Lease is more like a K 2. LL can have control but must be reasonable 3. T1 still liable 4. LL can have say over assignees 5. Good faith and fair dealing 6. Commercially reasonable a. Proposed assignees financial stability b. Suitability of particular property use c. Alterations made by property assignment c. RSC: LL cannot unreasonably withhold consent unless a freely negotiated provision gives LL such right Totally Silent General Requiring Restriction Restriction Reasonableness allowing (Silent on Restriction arbitrariness reasonableness) Rowe v. A&P Cannot transfer Enforce K Enforce K Transfers so even if LL is long as K no unreasonable unconscionable (Common law/ reliance on traditional) factors Kendall; can Enforce K Enforce K only transfer if (Kendall) LLs refusal is commercially unreasonable: Ex. Of Reasonableness: Financial stability, suitability of particular property use

RSC

Can always transfer unless K expressly allows LL to be unreasonable

V.

n. Dumpors Rule: Unless expressly stated, if LL consents to assignment 1, deemed consent to future assignments THE TENANT WHO DEFAULTS: Self Help a. Tenant In Possession vs. Tenant NOT in Possession Whether LL can take Whether after T abandons poss. Does LL self help to retake Have a duty to mitigate damages? possession (forcible Sommer v. Kridel: YES entry/D locks) if T in Kenneth Cole (NY: NO incl. residential) possession and defaults (Berg v. Wiley) Common law: LL can use SelfHelp so long as: (1) LL legally entitled to poss. (holdover T/breach & reentry); (2) reentry is peaceable b. Did T impliedly offer to terminate Lease? i. Surrender and/or abandonment by T? 1. Express (agreement to surrender) 2. Implied (T abandonement/surrender) ii. LLs acceptance: 1. Express 2. Implied (actions) intent; K standard iii. If T offers to terminate Lease and LL accepts cannot sue for wrongful eviction c. Policy reasons: having a good alternative with no possible threatened force (all self help is WRONG) never available to dispossess tenant. Want a higher standard, not a SPEEDIER one) DUTY TO MITIGATE: Holy Properties a. LL has options: i. Do nothing and collect full rent from T (no duty to mitigate) 1. LL OK with empty space 2. LL able to collect rent from T ii. Accept Ts surrender (term lease) re-enter and relet premises 1. Rent market Increase 2. LL wants to capture an increase in FMV 3. Tenants unable to assign/sublease iii. Notify that LL is entering/reletting for Ts benefit (duty to mitigate)

VI.

VII.

VIII.

1. Declining market or unable to collect rent from original T 2. LL doesnt want space empty 3. classic mitigation where LL decreases Ts damages iv. Enforce a K provision giving LL right to mitigate INTRO TO BREACH OF COV. OF QUIET ENJOYMENT: a. Express K contained covenant b. Implied Majority rule implied cov of QE in all leases c. Constructive eviction: Any act or omission of LL or anyone acting by, through or under LL or having superior title, rendering premises (interferes with beneficial enjoyment of premises) d. Proving a breach: i. Actual/Constructive? 1. If no: a. Must prove constructive: any wrongful act/omission of LL i. Omission: wrongful ii. Substantially unsuitable for the purpose leased OR seriously interferes with beneficial enjoyment of premises; AND iii. T abandons ii. NYRPL Sec. 227: When T may surrender premises 1. Building is (1) destroyed, or (2) injured by elements or any other cause to be unfit for occupancy and no express agreement made to contrary iii. Implied Warranty exists for cov of QE 1. T does not have to pay rent when implied cov. Breach MARKETABILITY: The standard of title the seller needs to deliver at the time of the closing when is implied in all Ks of sale a. May be modified b. What renders title unmarketable i. Chain of title defect 1. Forged deed 2. Encumbrances (more likely) c. Marketable title: i. Record Title: If went to the land records, shows who owns title but not dispositive of ownership ii. Insurance Title: What title insurance is willing to insure iii. Marketable title: Quality of title; common law implies promise of seller to convey title in sale 1. Buyer can terminate K and doesnt have to close if title is not marketable a. Seller has time to cure prior to closing 2. Law assures buyer a title free from reasonable doubt, but not every doubt

a. Reasons why need a standard of something less than perfect: i. Different to close because buyer could always claim some imperfection ii. Recognition that every property has some problem 1. Standard of imperfection would be impossible iv. Marketable Title Defects: 1. Chain of title (rare) total title failures (Low probability, high costs) a. Fraudulent transfer b. Forged deed c. Incapacity d. Duress e. Improper acknowledgement f. Deed was not delivered 2. Encumbrance (more likely): Reduces value of the property. Third party rights that someone might have relating to: a. Monetary: Right to money that creates a title problem i. Lien: describes certain rights of lienholder that give them the right to sell property in satisfaction related to debt: 1. Not recorded in land records 2. Mortgage lien (voluntary transaction) 3. Unpaid taxes (fed & state) 4. Mechanics liens (involving work on house) ii. Mortgage: if theres not debt, mortgage is meaningless b. Possessory (tenant): lease commercial real estate value of property is relative to lease 3. Uses: a. Easement: i. Neighbor with easement across property interferes with use ii. Zoning law NOT encumbrance 1. One of reasons why every buyers able to walk away 2. Has to be something about title that causes reduction of value of property iii. Encroachment: illegal intrusion upon property

1. Something physical built on some property you dont own a. Fences, air conditioners, garage b. Garage: c. Lot A v. Lot B (with garage encroaching on A) i. Lot A is unmarketable bc Bs encroaching ii. Lot B is NOT unmarketable but may be a problem (if a goes to court) iii. BUT: A cannot interfere with Bs use of any portion of whats inside his lot square iv. As prop is unmarketable because piece of garage interferes with use v. (unrecorded deed = litigation because no record title) vi. Justification = visibility b. Property unmarketable because garage interferes with use c. Unrecorded deed = possible litigation because no title d. Common law: marketable title is implied in ALL K e. Default rule of free transferability d. Contractual variations on standard of marketability: Seller covenants to: Buyer or Deliver marketable title VERY buyer friendly Deliver marketable title subject to Buyer doesnt have to close if recorded Citibank mortgage anything less than Citibank mortgage Deliver MT subject to all :/ Buyer cannot use encumbrance of encumbrances of record record to get out of closing (*Lohmeyer) Deliver MT subject to all Very limited on buyer getting out of closing encumbrances *Lohmer ct reads in so long as not violated: Restrictive cov. Interferes with use and renders title unmarketable

 Any encumbrance of record that was violated = unmarketable title Rockerfeller: POE expands 3rd party benefit pres covenants? YES. Common law says: NO, cov. does NOT run for grantee Cov. Against encumbrances: violation of Frimberger land use does not equal breach of cov. Against encumbrances Cov. Of Quiet enjoyment: must be Brown v. Lober dispossessed and must have paramount title: Better title does not satisfy Q.E. Must have BOTH Existence of restrictive cov. Renders title Lohmeyer unmarketable: *read in so long as not violated e. Pre-closing doctrine: When B accepts deed at closing. Buyer deemed to be satsifyed with S obligation: K MERGES INTO DEED. i. Deed has promises 1. Marketability only means during executor period a. Executor Period: Ex. Grandpa signs K and dies, will says leave property to Randy & personal property. If GP was seller, did not have real property interests (equitable) and therefore Peter gets $ proceeds, because this equals personal property 2. All promises after closing = MERGED DEEDS: Any instrument/transfer may or may not contain promises. Promises allow opportunity to sue Seller under breach of cov. a. Minimum Deed requirements: i. Written instrument (pursuant to SOF) ii. Signed (by seller) iii. Delivered b. TYPES OF DEEDS: i. General/Full Warranty: has most promises ii. Special Warranty: Warrants against grantors own acts 1. Only relating to encumbrances allowed by grantor iii. Quit Claim Deed: No warranties, promises, money transfer. Instant conveyance c. DEED COVENANTS: d. Two types of Deed covs.: i. Present: Breach occurs at moment of CLOSING ii. Future: Breach occurs at moment POSSESSION is interfered e. Present: i. Covenant of Seisin: Right to convey title ii. Covenant of Right: (same as above)

IX.

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iii. Covenant against encumbrances: Property is free of encumbrances (pre closing concept re: marketability, cannot sue for marketability) f. Common Law: Present covenants are NOT deemed assigned because of (1) SOL and (2) Doctrine of merger g. Rockerfeller: Present covenants are implied COA for assignees h. Future: i. Covenant of Quiet Enjoyment: 1. An interference of buyers possession; WITH 2. Person holding better title than buyer ii. MUST have both happen (Brown v. Lober) 1. Cannot sue under present cov. Bc of: a. SOL b. Common Law doctrine: made something expressed thats otherwise implied iii. Covenant of further assurances: Promise to help if deeds rejected at recording office for whatever reason 1. Warrants title to fix imperfections and make absolute statement no encumbrances iv. General warranty: grantor is only responsible for losses against lawful claims & compensates grievances for loss due to superior title i. Deed Cov. Cases: i. Lober: Cov of Q.E. (must have both elements) ii. Frimberger: Cov against encumbrances 1. Breach of K claim: a. Must prove existence of promise; AND b. Breach of that promise (violation of land use does not = breach of cov. Against encumbrances) iii. Rockerfeller: Benefit of present cov. 1. Does third party get benefit of that promise? a. SOL starts at closing: NY 6 Years b. Real covenant runs with the land i. Common law: says NO. RECORDING STATUTES: Every conveyance NOT recorded is VOID against subsequent purchaser and whose conveyance is FIRST duly recorded a. Person who cares about ownership is the one either before or after closing. b. Good faith : (1) paid money; (2) didnt know about it; (3) recorded in good faith i. Why: 1. Issues with real estate 2. Proof of ownership 3. Title indexing/recording systems (relies on indexing)

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c. Jurisdiction: No matter what jur. A wins if they recorded first and B wins when A fails to record. Recording statute only says under certain circumstances other conveyances is void. i. Can they use recording statute to change result? 1. Always read recording statute from Bs perspective. 2. If B has actual knowledge, A always wins. ii. Bona Fide: Good faith and valuable consideration 1. Deserving of protection 2. Every conveyance is good against the good guy 3. At the moment of conveyance, did B know?? iii. Exception: Shelter Rule: 1. Without: A will always win because A recorded) 2. If B wins, C will get the benefit of Bs win v. A, C not disadvantaged by As recording because if B wins, A will always go run and record but B could never sell it. a. For recording statute to work: B has to be winner all the time until they sell. iv. Types of Jurisdiction: 1. Common Law: A always wins 2. Race Jurisdiction: Who recorded first?? (NY is a RACE jur.) 3. Notice Jurisdiction: No recorded notice = bona fide purchaser, can undo. a. Actual: Whats ACTUALLY in your brain b. Constructive: (implied) i. Record notice: you wouldve known if you looked, doesnt matter if they did not look, it was there ii. Inquiry Notice 4. Race Notice: Same elements of notice but also: a. Prove didnt know (deserving of justice) b. Prove they recorded first c. Have to be a bona fide purchaser d. Review + Deed: i. Use of privity of estate: to show transfer of title and possession 1. Conveyances satisfy POE a. Conveyance: Written instrument where youre creating transferring mortgaging estates and in land i. Must be in writing ii. MAY be recorded b. There is NO conveyance other than those by LAW i. A lease doesnt need to be recorded (because T is in possession) 1. Protected by taking possession

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XI.

ii. Buyer cannot use recording statute because lease doesnt need to be recorded ii. Assignment is 3 separate transactions 1. Original lease 2. Sale 3. Subsequent assignment to T2 a. Transfer of title and Transfer of possession is POE i. Recording statute can apply because applies to all conveyances and a lease is a conveyance (even though cannot be recorded < 3 years) b. Policy: intent is for recorded instrument to convey/notice to subsequent purchaser (deed has to describe property so someone can find it) iii. A recording deed gives constructive Notice (Luthi) 1. Mother hubbard clause: describing an unnamed property thats no longer described a. Protects any errors contained in the lease b. Sweeps in other parcels not specifically described c. Describes property in general language (make sure everything in chain of title was recorded) iv. *Anything REFERRED to in recorded document (but not recorded) you are in notice of ADVERSE POSSESSION: Moment in Time when TO loses right to bring COA for ejectment to AP because SOL has run a. TO may bring judgment against wrongful possessor b. AP: COA of Ejectment: i. Elements: 1. D is wrongfully in possession 2. P has either true ownership and lawful right of possession OR better rights than the other party (have to trump the other party) a. Policy reasons for SOL: i. What moment in time does D become unlawful possessory? 1. At time he walks on property c. AP1 v. AP2 DOES NOT EXIST. First in time, first in right. d. AP becomes TO when clock strikes midnight of last day of last year applicable to SOL i. Punishes sleeping owner and incentivizes to have doctrine to actually claim it as theirs e. Duration: i. Continuous: Was possession of property in a way TO would? Similar nature 1. (like, nature & condition, i.e. summer house) Kunto

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2. Tacking: Credit for prior possession of AP is permitted if succeeding occupants are in privity 3. Succession of trespassers even with no interval will allow defeat of title ii. Uninterrupted iii. Length of Time f. Possession: i. Actual (i.e. enclosures, cultivation, improvements) ii. Open & Notorious (notice): If AP is punishing sleeping owner, req. AP to be MATERIAL 1. Material (imputed): or major encroachment or possession (if AP occupied large piece of land, no need to survey to see it) a. Ex. 10 Feet = Material 2. Minor (actual) Somehting really small, no impute to know a. Manilo: Not exceeding several feet 15 is minor, no way to know iii. Exclusive: Looking for someone to act like TO 1. Look at intent first (either look or you dont) iv. Hostile & adverse: without consent 1. Hostile: Do Not have permission a. Jur. With intent requirement AP mistakenly thought it was their land vs. trespasser b. Main doctrine: jur. Req. in order to meet hostile AP: someone KNEW they didnt own the property 2. Claim of right a. State of Mind of AP b. Use in a similar manner that TO would c. Uninterrupted i. (intent to claim property as your own reasonable basis for belief that AP is True Owner (have to THINK you own it): *Jur. Req: State of Mind: AP know they didnt own property; Others require AP had good faith ii. NY: (Legislative enactment): Requires a reasonable basis for relief, not enough to be there without permission iii. TACKING: Squatters shouldnt profit from trespassers (Raising claim v. others several ppl received record title of tract on mistaken belief of anothers permits tacking) 1. AP1 to AP2 does NOT start SOL every time

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XII.

XIII.

3. Objective intent g. Exception: Constructive possession (productivity theory) why should TO benefit through AP if TO not making land more productive h. Disabilities: i. Tolling statute: (Stops clock) TO can bring COA after disability is removed 1. Disability statute: whether that extends period of time, helping TO, (where TO gets benefit) a. Time period b. DO NOT be distracted by subsequent disability* ACQUISITION OF PROPERTY: a. Purchase of Sale b. Adverse Possession c. Gift i. Transfer ii. Inter vivos transfer v. testamentary disp. 1. Requirements for an Effective transfer of a GIFT: a. Intention: i. Oral evidence ii. Difficult to prove b. Delivery i. Actual/manual physical act ii. Constructive 1. No constructive delivery if item is a. Present b. Capable of being there iii. Symbolic: implies the thing is incapable of being delivered (if watch can be delivered, writing is ineffective) c. no consideration d. Acceptance (presumed) e. Irrevocable iii. Ex. Lifetime gift of reversion (giving property when lease is up) 1. Gift = testamentary 2. Life estate ending and future interest 3. Reserving reservation = property law and conveyancing (NOT const. delivery) iv. Inter vivos gift: Present vs. future gift 1. Intent: look at all forms: whether gift was effective or NOT ESTATE CLASSIFICATION SYSTEM: What isnt conveyed by grantor, is retained. (Whatever property interest you have retained, you can transfer) a. Transfer: i. Inter vivos ii. Will iii. Intestacy b. Fee Simple Absolute: Cannot have restraints on alienation or transfer

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i. Defeasible fees: coming to an end c. Fee simple determinable: Future interest applies automatically i. Future interest: Possibility of Reverter (POR) retained and held by grantor/creator ii. Ex.: 1. O to A and her heirs until A divorces; then to O 2. O to A and her heirs so long as A does not divorce; then to O 3. O to A and heirs during her marriage and until she remains married; then to O 4. O to A while not divorced; then to O 5. O to A so long as As married; then to O. d. Fee simple subject to a condition subsequent: FSSCS: Manually applied i. Future interest: Right of Entry, or Power of termination (ROE/POT) retained and held by Grantor/creator. The holder must actually do something to assert the right 1. Either grantor expressly reserves it, or its silent 2. Ex.: a. O to A; but if A divorces, then to O b. O to A; provided that A doesnt divorce, but if A divorces, then to O Estate Words of Words of Duration Future Purchase Limit interests Fee simple To A And his heirs Forever N/A absolute Fee Tail To A And the heirs of So long as A Reversion or his body can have heirs remainder Life estate To A For life (life of Life of A Reversion or (restraint on A) remainder alienation) Term of Years To A For X years Period Reversion (non-freehold) measured by the calendar e. No limits, unless a will clearly states intent of life estate, court will infer FSA because of no limits i. Competing interests between present interest holder (life estate) and future interest holder (Remainderman) f. Transferability of future interests: i. Common law: NO inter vivos transfers of POR or ROE g. Exception: Holder of future interest could transfer POR/ROE to the holder of the present possessory interest h. Review: i. Owner of estate could convey part or ALL of what owner has, but not more ii. Whatever isnt conveyed by grantor is retained

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XIV.

iii. Grantor can transfer retained piece to a 3rd party (inter vivos, will, intestacy) CO-TENANCIES: Concurrent ownership interests Tenants in common (TIC) Joint tenants Separate but undivided interests in the whole Tenants by the entirety a. Joint Tenancy: With rights of survivorship: Only have meaning at death i. Automatically goes to joint tenants by operation of law ii. Each JT has right of survivorship (if 2 jts one dies, the other because the SOLE owner of jointly held interest) iii. Creation: time, title, interest, possession 1. Single instrument, at the same time for all tenants iv. Severance: Normally results in the creation of a TIC Riddle v. Harmon 1. Rule: One joint tenant may unilaterally sever a joint tenancy without the use of an intermediary device 2. Policy: Cant hand dirty to yourself 3. Common Law: Need an intermediary device (like strawman) in order to transfer and unilaterally sever the joint tenancy a. If wanted a TIC: will transferring the estate OR a defeasible feee (FSD or FSSCS) 4. Could be destroyed by a transfer to a 3rd party 5. Can uniltaterally destroy JT and turn it into TIC v. Exists: moment of creation and up until party dies vi. Mortgage: Survivor ship? 1. Title theory: treated as conveyance and thus severs 2. Lien theory: does not sever (survivor might go free and clear) b. Tenancy by the Entirety: i. 4 unities + marriage: time, title, interest, possession, marriage 1. unless otherwise indicated ii. Severance: divorce severs TBE iii. Point: status of parties when possession is taken and HOW possession continues c. Intestate: Without a will i. Survivorship rule of the state would send it to the heir. d. Note: Mortgage/Judgment liens are NOT property transfers and therefore DO NOT SEVER

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XV.

PRIVATE LAND USE ARRANGEMENTS: a. Background: Some PLU are just the LAW of the covenants i. Running with land; and/or ii. Easements b. Types: i. Easement: A is given the right to enter upon Bs land ii. Profit: A is given the right to enter upon Bs land and remove something attached to land iii. Negative Covenant: A is given the right to enforce a restriction on the use of Bs land iv. Affirmative Covenant: A is given the right to require B to perform some act on Bs land v. Covenant: A is given the right to require B to pay money for upkeep of specified part. c. EASEMENT: A given the right to enter Bs property. i. Types: 1. Writing: a. Express i. Grant (adds to the title records) ii. Reservation (holds something back) Willard b. Elements for Creation of Express Easement: i. Intent to Create: Yes, generally but estoppel; are not created by an expressed reflected intent ii. Notice: Yes. But with exception iii. Writing: Yes for express, but also estoppel, implication (prior existing use/recording) iv. Horizontal/Vertical Privity: N/A v. Touch and Concern: N/A fulfilled by Appurtenant (general use) vi. Remedy: Specific performance/damages c. *A Deed without any EXPRESSED reservation cannot have ANY IMPLIED grants/reservation (subject to exceptions)

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Easement in Writing: Express Grant: B owns Lots 1 and 2, sells Lot 1 to A; A would like an easement over lot 2 Easement is a non-possessory right to property. (One estate is burdened and one is not) Dominant estate: Grantee (one given the use privilege) Servient Estate: Grantor (one burdened by the use privilege)

Easement by Reservation: Reservation: A owns Lots 1 and 2, A sells lot 2 to B, but wishes to have an easement to cross lot 2

2. Non-Writing: a. Easement by Estoppel b. Easement by implication i. Implied from prior existing use ii. By Necessity ii. Privity of estate effects anyone who is granted or takes possession of the property (Willard) CHURCH CASE iii. Privity of Estate possessor gets benefit of Cov. Of QE because runs with the land 1. Willard cannot claim breach of QE because not disposed a. Easement is not dispossession; just a grant to use.

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iv. Common Law: One cannot reserve an interest in property to a stranger to the title (Balance in favor of giving effect to grantors intent) 1. Rule: Can be in place to frustrate grantors intent (LL estopped to object to the easement because gives express consent to it in original deed) d. KINDS OF EASEMENTS: i. Appurtenant: Benefits the owner OR possessor of a particular parcel of land: easement runs with land just limited for any church (Willard); OR ii. Gross: (for personal use) 1. If move down the block, can still use the parking lot? a. Cannot pass to another unless expressly agreed to i. Non-writing Estoppel: Use of land by permission b. License v. Easements: i. Easements: do not need written document, not easily revocable ii. License: could negate document, easily revocable c. Lease v. Easement: i. Lease: Rent, time limited, larger rights/interests: SOF ii. Easement: No time limit, limitation of rights/interests not subject to SOF e. QUASI-EASEMENTS: One part of a persons land benefits another party of another persons land i. 2 step Process in Compliance with Common law: 1. First: Cannot reserve easement for benefit of 3rd party under common law 2. Church transfers property to Peterson, reserving easement for themselves (Willard) f. EASEMENT CREATED BY (RIGHT OF WAY): i. Express written grant ii. Implication: (not written) 1. Use situation, easement implied from prior existing use a. Step one: i. Is it a written easement? No (because it wouldve been reservation instead) 1. Implied E by res by PEU: grantor retains the benefit 2. Implied E by G by PEU: Grantee receives the benefit 2. Quasi-Easement: when an owner utilized part of his land for the benefit of another part: a. Implied only if it is strict necessity

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iii. Estoppel: Licensor may not revoke license and restore his premises to former conditions after licensee exercises privilege given by license and erects improvement at considerable expense 1. Created when owner or tenant, to which right is claimed to be appurtenant or those under whom he claims title, has used a way over the land of another for as much as 15 years. NOTE: Encumbrances are enforceable property rights which effect land all classified by pecuniary, use, possessory, and rights and restrictions related to use (any 3rd party right to use in possession in right or lien, and tenant in his right of possession) iv. Implied E by PEU (by RESERVATION) vs. v. Implied E by PEU (by GRANT) 1. Because conveyance requires a description of what is conveyed, if deed says ENTIRE property is deeded failing to RESERVE an easement would invalidate. Whereas, grant of easement ADDS to the deed. 2. A deed with full cov. Of warranty and without an express reservation, CANNOT have a reservation by implication unless easement claimed is one of strict necessity (within meaning) vi. Majority: Only show reasonably necessary/intent for both implied easements by reservation and grant g. Easement by Prior Existing Use: i. Common ownership of the dominant and servient estate ii. Use by the common owner of one parcel to benefit the other (quasi easement) iii. Apparent iv. Continuous; AND v. Necessary 1. Modern rule: reasonably necessary NOTE: If there is a GWD with cov. Of no encumbrances, is there an implied easement? Common Law: does not get benefit of Promise, therefore it is likely to have an implied easement Rockerfeller jurisdiction: (3rd party benefit so long as within SOL) o If within SOL: 3rd party is entitled to benefit of present cov of no encumbrances in GWD, and therefore it is unlikely there is an implied easement within the deed, therefore 3rd party can sue BUT , however, if easement is STRICTLY NECESSARY (QUASI) then it must be required (Van Sandt- Factors)

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XVI.

BENEFITS AND BURDENS OF RUNNING COVENANTS: a. Privity of Estate: i. Horizontal Privity: Relationship between coventor and coventee: 1. LL/Tenant 2. Mutual Privity (Easement) 3. Instantaneous ii. Vertical: Subsequent transfers by B to C (POE) 1. Legal relationship b. Horizontal and vertical has POE because POE is legal relationship of the holder of reversion i. Rockerfeller: voluntary transfer of title

CASES NEEDED TO KNOW: Ernst v Conditt; Identify Assignment v. Sublease: Traditional/Majority Rule: what is IN the contract Kendall v Pestana; Assignment/Subleases: Can LL reasonably withhold consent. Kendalls lease was silent, therefore minority jurisdiction held that so long as commercially reasonable. Factors include: Financial stability of proposed assignee, known to default, etc.; vs. Majority rule that says LL can arbitrarily withhold consent; vs. RSC: LL cannot unreasonably withhold consent, unless theres a freel y negotiated provision in the K to the contrary Lohmeyer v Bower; So long as not violated read in provision by the court that held that the existence of a restrictive covenant renders title unmarketable Frimberger; Cov. Against encumbrances: violation of a land use does not equal a breach of covenant against encumbrances Rockafellor; 3rd party benefit to present covenants so long as SOL has not run vs. Common Law: which states that 3rd parties are not entitled to the benefit of present covenants but only future covenants which run with the land (Q/E) Board of Ed v Hughes; Wild Deed Case: Didnt impart constructive notice; this was when a deed was never signed so it was never properly recorded; didnt actually know in a race jurisdiction who records first. Benefit was given to the second purchaser who properly recorded the deed. Howard v Kunto; AP: continuation of a summer house; AP is satisfied by Duration: Continuous; Uninterrupted; Length of Time and Possession; Actual, Open and Notorious Material vs. Minor (15 vs. 10ft which is major to the courts Manilo); Exclusivesimilar in use to the TO; Adverse: without permission and Hostile: Claim of right: Main doctrine says AP knew that they didnt own property; and Intent Jur. Is when AP has a mistaken belief that he owned property; Gruen v Gruen; Painting inter vivos gift (future gift); Gift is satisfied by: INDIA: Intent, Delivery: Actual vs. Constructive: if it can be delivered it SHOULD be delivered; Acceptance (presumed); No consideration; and Irrevocable. Mahrenholz v County Board; depends on understanding whether or not the holder of the future interest can transfer it. Can POR or ROE be transferred; Legal question: Does the deed transfer a FSD or an FSSCS; Fact question: was the condition breached? Words such as so long as while during all equal FSD, Words provided that but however.. equal FSSCS

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Grantor's decedent conveyed property interest to plaintiff, who sought to quiet title. Defendant grantee opposed action, alleging as grantor never reentered property he did not own property and could not convey interest. Property deed conveyed a defeasible fee simple to grantee and created future interest in grantors. Court held resolution of matter depended on construction of deed's language. Court held if grantor had only naked right of reentry for condition broken, then he could not own the property until he had legally re-entered the land, but if possibility of reverter existed, then he owned property as soon as it ceased to be used for deed's purpose. Court held word "only" contained in granting clause established grantor intended to create fee simple determinable rather than fee simple subject to condition. Court held plaintiff entitled to pursue claim. OUTCOME: Court reversed and remanded lower court's decision, holding inclusion of the word "only" in the granting clause of the fee simple in deed created a fee simple determinable. Therefore, plaintiff entitled to pursue claim for quiet title even though grantor's inheritor had never reentered property. Rule: When you have the word revert and only you can assume that it is a FSD even though that is not the traditional wording. When the provisions of a fee simple which specify how possession is returned contain the language that the grantor "may" re-enter the land, this triggers a permissive return rather than a mandatory return. Willard v First Church; Exception to Common Law: The common law rule is that one cannot "reserve" an interest in property to a stranger to the title. Cannot create an easement in a third party, it violates the livery of seisin. Only grant or reservation can be used to create an express easement. (still correct in the majority of courts) Exception: A developer provided, in its subdivision proposal, that certain easements for streets were reserved to its assigns and successors. Faced with a challenge to the easement based on the rule against reservation to a stranger, the court noted that it was not justified in resorting to technical refinement as to the meaning of "reservations" to defeat the manifest intent of the parties. It held that the complaining landowner was estopped to object to the easement because of his express consent to it. Under certain circumstances you can make certain restriction by reservation for a third party. - The plaintiff did not read the deed, he should have known because the church used the parking before, and he did not record against it. Holbrook v Taylor; Easement by Estoppel [Hollbrook v Taylor] Issue: 1. At what point does an oral license become irrevocable? 2. If a license is irrevocable then its the same as an Easement?

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Rule: An exception to the statute of frauds by estoppel. 1. Easement by Estoppel (an exception to Statute of Frauds) The owner of servient parcel permits another to use land, the other changes position (e.g., making substantial improvements) in reliance upon the permissive use, and it was reasonable to foresee that the other might change his position. Van Sandt v Royster; Easement by implication had been created by the common predecessor: Common Law/UK rule: Bermans Note: This should be referred to as the traditional rule, it is no longer the majority rule. Implied Easement by Reservation only if it is strict necessity; Implied Grant of an Easement if apparent, intent is clear (it only has to be reasonably necessary) Why different standards between Implied E by PEU (by reservation) & Implied E by PEU (by grant)? Reservation = strict necessity under UK rule Grant = reasonable necessity with intent --there is a clear distinction between implied grants and implied reservations --To say that a grantor reserves to himself something out of the property granted, wholly by implication, not only offends the rule that one shall not derogate from his own grant, but conflicts with the grantors language in the conveyance, which, by the rule, is to be taken against him, and is wholly inconsistent with the theory on which our registry laws are based. Simply put: Conveyance requires a description of what is conveyed. If the deed says that the entire property is deeded, then failing to reserve an easement would invalidate the registry system. That is way it must be a strict necessity standard. A reservation of an Easement is in derogation of the express words of the grant; whereas a grant of an easement doesnt contradict the grant, but rather adds to it --The correct rule is, we think, that where, as here, one grants a parcel of land by metes and bounds, by a deed containing full covenants of warranty and without any express reservation, there can be no reservation by implication, unless the easement claimed is one of strict necessity, within the meaning of that term Modern (now majority): only show reasonably necessary/intent for both Implied Easements by Reservation and Grant Easement by Prior Existing Use: (i) common ownership of the dominant and servient estate (at some time in the past) AND

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the parcel was severed into 2 or more parcels in connection with conveyance (ii) use by the common owner of one parcel to benefit the other (i.e., a quasi-easement) --Quasi-Easement: if the owner didnt own both parcels, it would be an Easement (iii) which was apparent (or reasonably discoverable) [not the same as VISIBLE) (iv) continuous, and (v) necessary Necessity: this easement does not end when necessity ends. Use does not have to continue. Dont use it, then you dont lost it Bermans note: There are unusual circumstances that allows easements to go away, but for this class and the exam they do not go away. Othen v Rosier; No writing: easement by Necessity Easement by estoppel (hollbrook v. taylor) Easement by implication Easment implied from prior existing use o Van sandt v. Royster Easement by necessity (othen v. rosier)

2008 Final Exam Study Topics:

1. Public Records: a. Does not assure searcher that a deed in the chain of title has not been forged. No way to determine whether it has been forged. In order to ensure chain of title, buyers should purchase title insurance. 2. Public Records of Multiple Liens (within close time frame) a. B on notice of both liens, which would take subject to each. b. Citibank should be concerned because mortgage on property may be junior to the liens and default by B, Citibank will be junior to the other lien holders. 3. Writing that satisfies SOF: a. SOF precludes enforcement of a K for the sale of land unless it is evidenced by a writing. Minimum requirements include: i. Signature of the party to be bound ii. Identification of the property iii. Purchase price b. Does the Check satisfy all requirements? c. If SOF is not satisfied, may P enforce K in equity? i. Required to prove: 1. Oral K existed and

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2. Reasonable Reliance: Changed his position in reasonable reliance on the K so that enforcement is required in order to avoid injustice. ii. Evidence? 1. Oral K: Check, testimony claim, etc. 2. Reliance: Change in position due to quitting job, reasonable reliance? iii. Evidence against: 1. Unreasonable reliance: Written K contemplation and signed, acted immediately, no reason to anticipate quitting job, oral offer of 2x more than FMV might be hesitant to follow through iv. Return to pre-K conditions? 4. Rescinding K: 2 Bases for Rescission: a. Breach of implied covenant to deliver Marketable title: i. MT: 1. Absent K provision, CL applies 2. CL implied on S covenant to deliver MT 3. Zoning violation renders title unmarketable (Lohmyer) b. Breach of Duty to Disclose Known Defect: i. CL Jurisdiction: no liability on this basis ii. NY Jurisdiction: Duty to disclose only if S created the condition, latent, and material. 1. If Jur. Imposes duty to disclose: Buyer must establish S knew, latent and material a. Actual Knowledge: Buyer knew if went to doctor as a result of problems experiencing b. Latent: Did parties notice defect pre K of sale? c. Material: i. Jurisdiction may determine materiality based on whether important to this buyer or to any buyer ii. Subjective standard: only care whether important to buyer. 1. Does S have reason to believe B would care? If so, B prevails iii. Objective standard: Whether reasonable person would be bothered by the odor?

5. Defeasible Estates: a. Go through analysis of each estate i. Fee Simple Absolute ii. Fee Simple Determinable iii. Fee Simple Subject to Condition Subsequent

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b. Determining an estate: i. Whether the condition stated in the deed is a valid condition or an invalid restraint on alienation: 1. Did the Grantor intend to convey a defeasible fee vs. Fee simple Absolute? a. Deed construed to effectuate intent of the grantor but ONLY if the Grantors intent does not violate public policy (RSC1 in fact pattern says that any condition that constitutes an invalid restraint on alienation will be void, and deed will then be construed to pass as a fee simple absolute because a fee simple absolute contains no limits or restraints on alienation) i. Restraint on alienation is invalid if it is in conflict with the interest created 1. Facts: Condition requires grantee to use property for its own purposes a. Condition on use (not outright restraint on alienation) ii. If the condition is valid, whether it creates an estate that ends automatically upon breach of the condition or an estate that ends upon the exercise of the right to reclaim the property by the holder of the future interest 1. FSD or FSSCS? a. FSD: terminates automatically on the breach of the specified condition i. Language used: So long as While during or other language indicating a determinate temporal duration. b. FSSCS: terminates only upon entry by the owner of the future interest (ROE or POT). i. provided however but if and on condition that 2. Here: Words revert immediately to the grantor strongly suggest that the grantor intended an automatic termination of the present interest upon breach of the condition. a. However: Words but if suggests FSSCS was intended. i. Automatic forfeitures are disfavored ii. If intent is clear, FSD is most likely.

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6. EASEMENTS: a. An easement is a non-exclusive right to use property owned by another person for a particular purpose. i. Express easement? 1. An easement is an interest in land. SOF requires conveyances of interests in land to be evidenced in writing. 2. No writing evidencing the easement in these facts, A does not have an express Easement a. Exceptions to writing requirement: i. Operation of law (not subject to SOF) 1. Easement by necessity, easement based on PEU, or easement by prescription. 2. Not Estoppel because facts do not suggest any prior permission, nor change of position. b. Easement by necessity to continue use of Lot b? i. E.N.: must establish: 1. Common ownership of her lot (dominant tenement) and the lot she is using (servient tenement) at some point in the past 2. Strict necessity Othen: a. Claimants property is landlocked without the easement and llandlock problem was created by the severance of the ownership of the two parcels involved. i. Satisfied through common ownership of 2 lots 1. Other access to outside world through diff means? Accessible pathway (highway) precludes in all jurisdictions easement by necessity a. Inadequate, difficult, or costly?? (Counter argue) c. Easement based on prior existing use of lot b? (offers an alternative basis upon which to claim an easement is PEU. Requires: i. Common ownership of two parcels involved in dispute ii. Use by common owner of one parcel to benefit the other (quasieasement) apparent or reasonably discoverable and continuous; and iii. Necessity. 1. Does not necessarily require STRICT necessity but may instead only require REASONBLE necessity iv. Jurisdictions: 1. Modern approach: reasonable necessity 2. Historic: reasonable necessity in case of implied grants but strict necessity in the case of implied reservations

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