Property outline

Luke Harriman
Perritt – Spring 2011

 Hohfeldian terms
o Things
 A right is something that can be enforced by a lawsuit against a person who has the correlative duty.
 Example: right to pick my own oranges.
 A privilege negates a right and duty, and typically would be asserted as an affirmative defense in the
lawsuit.
 Examples: self-defense, privilege to vote for whom I please, easement to walk on someone’s land,
privilege to pick someone else’s oranges.
 A power is the capacity to create or change a legal relationship.
 Immunity
 Example: sovereign immunity
 No-right
 Duty
 Disability
 Liability: responsibility. Subject to a power.
o Jural opposites. Without (1), I would have (2).
 Right/no-right
 Privilege/duty
 Power/disability
 Immunity/liability
o Jural correlatives (interests that exist on opposing sides of a pair of persons involved in a legal relationship)
 Right/duty
 Privilege/no-right
 Power/liability
 Immunity/disability

 Property rights bundle of sticks

o Right to exclude (example: Jacque). But, does not include right to exclude gov’t services (Shack).
o Right to assign
o Privilege to use
o Presumption: everything else

 Leaseholds
o Types of tenancy
 A term of years tenancy is for any fixed period of time.
 A periodic tenancy is a tenancy for periods of equal duration.
 Notice required
o A periodic tenancy of fixed duration continues unless notice is given
o A year-to-year tenancy requires half a year’s notice
o Any periodic tenancy of less than a year requires notice equal to the length of the period,
but not to exceed six months
 A tenancy at will gives the lessee right to possession until the estate is terminated by either party.
 A tenancy at sufferance arises when a tenant holds over after a lease expires. The landlord may evict the
tenant and get damages, or sign a new lease with the tenant.
o Statute of frauds requirement. According to the traditional common law rule, leases less than three years do not need
to be in writing. However, most American statutes require a writing for leases more than one year.
o Landlord/tenant relationship
 Entry by landlords. Landlords cannot enter tenants’ apartments without permission
 Self-help by landlords
 According to the common law rule, self-help by landlords is permissible if (1) the landlord has a
right to the property (e.g., the tenant is holding over), and (2) the self-help is peaceable (e.g.,
changing the locks).
 But, according to Berg, landlords may not use self-help.
 Wrongful vacation by tenant. According to Sommer, if a tenant wrongfully vacates, a landlord must
mitigate the damages by making reasonable efforts to re-lease the apartment.
  There is surrender/abandonment when the leaseholder conveys his interest to the landlord and the landlord
accepts
o Implied terms of a lease
 Taking possession
 According to the English rule, a landlord need only remove legal obstacles to the tenant’s taking
possession.
 According to the American rule, as in Hannan, a landlord must remove any legal or physical
impediments to the tenant taking possession.
 There is a breach of the covenant of quiet enjoyment when a tenant does not have full enjoyment of the
property, as in Reste, because of an interference by the landlord or someone under his authority
 Breach of the covenant of quiet enjoyment may also be tantamount to constructive eviction if it is
the result of an action by or a failure to act by the landlord, in which case the tenant is released
from the lease and may seek damages.
 There is a breach of the warranty of habitability if the apartment is not fit to live in, as in Hilder.
 A breach of the warranty of habitability may also be tantamount to constructive eviction if it is the
result of an action by or a failure to act by the landlord, in which case the tenant is released from
the lease and may seek damages.
o Remedies are the lost value, which may be obtained by withholding rent.
o Third party damage (e.g., hurricane)
 At common law, the tenant was responsible for third-party damage.
 However, the modern rule, as expressed in Mitchell, is that the landlord is responsible for third-party
damage.
o Assignments vs. subleases
 In an assignment, the original enant turns over his entire interest in the lease to another person, as in Ernst.
 The assignor (i.e., the original lessee)
o is liable for rent, and
o has privity of contract with the original lessor and the assignee.
 The assignee (i.e., the new lessee)
o is liable for rent,
o has privity of contract with the assignee, and
o has privity of estate with the lessor
 In a sublease, the original tenant turns over less than all of his interest in the lease to another person (e.g.,
only part of the remaining term).
 The original lessor may not refuse a reasonable sublease, according to Kendall.
 The assignor (the original lessee)
o has a reversionary interest in the property,
o is liable to the original lessor for all covenants,
o has privity of contract and privity of estate with the lessor, and
o has privity of contract and privity of estate with the assignee.
 The assignee (the new lessee)
o has no obligations to the lessor, and
o has privity of contract and privity of estate with the assignor.
o Harm to property so severe that it makes it uninhabitable may be a constructive eviction, which releases a tenant
from the lease, as in Reste.

 Condos
o Ownership of a condo involves two kinds of property interests: (1) in the unit itself, and (2) in the common areas.
o Condo documents
 Deed/condominium declaration (more weight)
 Must be recorded
 Grants power to the condo board to make bylaws
 Bylaws (less weight)
 Made after the transfer has been made
o Review of homeowners association decisions (same framework as for any review).
 (1) Is it within the authority given by the declaration, i.e., is it not ultra vires? If not, void.
 (2) Is it “reasonable,” i.e., is it not arbitrary or capricious?
 Different deference approaches. Different courts will treat condo association decisions with more
or less deference. Some courts will defer to all condo agreements, invalidating them only if they
are arbitrary and capricious; some will defer only to the declaration; some will subject all condo
documents to a reasonableness test.
 o According to Nahrstedt, condo association rules are presumed to be reasonable, unless
they can be proven to be arbitrary and having no relationship to the well-being of the
community.
o The Restatement says that condo association rules are presumed to be valid unless it lacks
rational justification
o Perrrit’s analysis
 (a) Are decisions to adopt new rules supported by (i) legitimate interests of the
association, and (ii) logic?
 (b) Are factual decisions backed by appropriate evidence?
 (c) Does the decision contravene superior sources of law?
 Going to court. According to 40 West 67th Street to kick someone out (or do anything else), shared interest
communities don’t have to go to court. All they have to do is exercise sound business judgment.

 System of estates
o Types of interests
 Present interests
 Freehold estates
o Fee simple absolute
 No restraints on alienation. A fee simple absolute has no restraints on alienation,
as in White.
 Construction preference for. There is a construction preference for fee simple
absolute, since public policy disfavors forfeiture
o Life estate. A life estate lasts for as long as the owner lives. The corresponding future
interest is a remainder.
 Leasehold estates (covered above)
 Defeasible fees
o A fee simple determinable ends automatically when some specified event happens, as in
Marenholnz.
 The corresponding future interest in the grantor,
 on natural termination (death), is a reversion.
 on unnatural termination (any other event), is a possibility of reverter.
 Tip-off language: “so long as,” “while,” “until”
o In a fee simple subject to condition subsequent, the grantor has the right to retake the
property upon occurrence of some event, but must bring an action.
 The corresponding future interest in the grantor is a right of entry.
 Tip-off language: “but if,” “upon condition,” “provided that”
o In a fee simple subject to executory limitation, a third party takes automatically upon
occurrence of the triggering event.
 Or “subject to complete divestment”
 The corresponding future interest (in a third party) is an executory interest. This
interest cuts off someone else’s possessory interest.
 A springing executory interest cuts short the grantor’s interest.
 A shifting executory interest cuts shorts another grantee’s interest.
 Future interests
 Alienability. At common law, future interests can be inherited but not transferred inter vivos or
devised. But, most states have moved away from this and made future interests alienable
 Interests retained by grantors
o Becoming possessory automatically
 With natural termination: reversion
 Corresponds with fee simple determinable.
 Transferable, descendible, devisable
 With unnatural termination: possibility of reverter
 Corresponds to fee simple determinable.
o Must bring an action: right of re-entry.
 Corresponds to fee simple subject to a condition subsequent
 Interests in a transferee
o A remainder becomes possessory on natural termination of the preceding life estate. For a
remainder to become possessory, (1) it must be known who takes possession, and (2) the
preceding estate must be extinguished. There are two types of remainders:
  Vested remainder. For a remainder to be vested it must (1) be given to an
ascertained person, and (2) not be subject to a condition precedent [not including
natural death].
 Example: to A for life, then to B and her heirs. B has vested remainder
in fee simple.
 Gets construction preference over contingent remainder
 A vested remainder may be subject to open/subject to partial
divestment if there is a possibility of anyone else joining the class.
 Contingent remainder. A remainder is contingent if it is (1) given to an
unascertained person or (2) made contingent on some unfulfilled condition
precedent [does not include death, but does include being alive].
 Example: to A for life, then to A’s heirs. (A’s heirs are unascertained.)
o An executory interests divests someone else’s interest ( and not because of death).
 Corresponding estate: [] subject to an executory interest. There are two types of
executory interests:
 A springing executory interest cuts short the grantor’s interest.
 A shifting executory interest cuts shorts another grantee’s interest.
o Waste. An action for waste may be brought by the holder of a future interest against a party that reduces the value of
land the other party has a life estate in.
 At common law, waste was anything that changed the value of property.
 However, according to Woodrick, an action that increases the value of a property is not waste.
 Preventing waste. Baker v. Weedon held that, to prevent waste, a court can order a sale of land with future
interests on it.

 Trusts
o Two parties:
 The trustee has legal title to the property of the trust, and has a fiduciary duty to act for the benefit of the
beneficiaries.
 The beneficiary has equitable title to the property.
o A spendthrift trust is not alienable by beneficiary or accessible by the beneficiary’s creditors, as in Broadway
National Bank.

 According to the rule against perpetuities, no interest is good unless it must vest (i.e., become no longer contingent), if at all,
not later than 21 years after some life in being at the creation of the interest.
o (1) Is the interest subject to the rule?
 Contingent remainders, executory interests, class gifts, and options (as in The Symphony Space, Inc.)
[typically just 21 years if it’s a corporation] are subject to the rule against perpetuities.
 Rights of first refusal, interests in grantors, and vested interests are not subject to the rule against
perpetuities.
 An interest is contingent if (1) it has an unascertainable owner, or (2) there is a condition precedent to the
interest becoming possessory.
o (2) Identify lives in being
o (3) Hypothesize scenarios
o (4) If an interest is void, strike that interest and only that interest from the grant.
o Class gifts
 A class gift is not vested in any member of the class until the interests of all members have vested.
Essentially made class gifts subject to open under RAP.
 But, under the rule of convenience, the class closes on the distribution date if a beneficiary of the class gift
is then entitled to distribution. This happens if one class member, but not all of them, qualifies to take
possession. If a member of the class is certain to qualify for distribution, that qualifies the gift under the
rule against perpetuities.
 However, this rule yields to evidence of a contrary intent.
 A class of issue is not ascertainable until both spouses die.
o Testamentary gifts. If a gift is testamentary, the clock doesn’t start until the giver dies.
o Heirs do not exist until someone dies.

 Wild animals
o According to Pierson, chasing a fox doesn’t create ownership.
o Ghen: harpooning a whale gives you ownership
 Intellectual property
o Policy
 Justifications. The two chief justifications for providing intellectual property are efficiency (establishing
incentives to create) and Lockean-style justice (rewarding those who have put their labor into something).
 Tension. There is a tension between promoting creative activity (establishing more rights) vs. encouraging
availability (reducing the number of rights).
o Is there a copyright infringement?
 Registration of copyright as a prerequisite. A defendant must register a copyright before suing on it,
although registration is not necessary for protection. According to La Resolana, the defendant’s application
must be approved by the Copyright Office, not merely submitted, before a defendant sues. However,
allowing defendants to sue only after submitting a copyright application would speed up enforcement of
copyright cases and would promote registration of copyrights to the same extent, and is thus more desirable
from a policy perspective.
 (a) Is there a copyright? According to 17 U.S.C. 102, there is a copyright if (1) the category of creative
effort qualifies, (2) there is fixation, and (3) the effort is original.
 (1) The category of creative effort qualifies if the work falls into the literary, musical work, etc.
categories of 17 U.S.C. 102(a).
o 17 U.S.C. 102(b) states that copyright “does not extend to ideas, systems, processes,
concepts, principles.”
 (2) There is fixation when the expression is memorialized in such a way that it can be retrieved
later. Fixation must be done with knowledge of the creator.
 (3) Finally, the effort must be original. The level of originality required is very low.
o Derivative works. 17 U.S.C. 103(a) says that copyright exists in derivative works, but it
only covers what the creator adds to the work. According to Woods, to qualify as a
derivative work, there must be some originality.
 Transfer from one medium to another medium creates a derivative work.
 Ownership through infringement. In everywhere except for the 10th Circuit,
ownership of a derivative work exists even when the creator did not have the
right to create the derivative work.
o News. According to INS, news is not property, but stealing it unfairly if work has been
put into it can be unfair competition.
o Celebrity personality may be propertyAccording to White v. Samsung, celebrity
personality may be property.
 A joint copyright exists when multiple people work intending for the contributions to be merged.
 Collections. A copyright may be issued in a collection of works (e.g., a musical).
 (b) If so, does the plaintiff own the copyright? The plaintiff owns the copyright if (1) he has not put it in the
public domain, (2) he has not transferred enough of it to the defendant so that the defendant owns it, and (3)
no one else created it.
 (1) A copyright enters into the public domain after the death of the creator plus 70 years. In the
case of a work for hire, a work enters the public domain after 95 years.
 (2) the plaintiff has not transferred enough of it to the defendant so that the defendant owns it, and
o Transfer of ownership of copyright. According to 17 U.S.C. 204(a), transfer of a
copyright requires a written note signed by the conveyer. This transfer may be recorded
with the Register of Copyrights, which gives a subsequent purchaser constructive record
notice of the transfer.
 (3) no one else created it.
 Adverse possession of intellectual property. According to Gee, there can be adverse possession of
music. Adverse possession of a copyright occurs when it is falsely presented as somebody else’s
for the statutory period. Under the FCA, the statutory period is three years.
 (c) If so, did prima facie infringement occur? Prima facie infringement occurs when (a) the defendant did
something as to which the plaintiff has the right to exclude, and (b) the defendant’s conduct was within the
scope of the copyright.
 (a) The exclusive rights in the creator, from 17 U.S.C. § 106 are:
o (1) reproducing copies,
o (2) preparing derivative works,
o (3) distributing copies,
o (4) performing publicly,
o (5) displaying publicly,
o (6) performing publicly by means of a digital audio transmission (i.e., streaming over the
Internet)
 o Copying a product. According to Doris Silk, copying a product is okay.
 (b) the defendant’s conduct was within the scope of the copyright
 (d) If so, was the defendant’s conduct privileged? The defendant’s conduct is privileged if (1) it qualifies as
fair use, (2) the defendant’s conduct satisfies some other statutory privilege, or (3) the defendant’s conduct
was consented to by a joint owner.
 (1) Use is fair if it is used for purposes such as criticism, comment, news reporting, teaching,
scholarship, parody, review, or research.
o Factors for determining whether use is fair use include:
 Purpose and character of use (example: parody, review)
 Nature of copyrighted work
 Amount used
 Effect on potential market
 (2) the defendant’s satisfies some other statutory privilege, or
 (3) the defendant’s conduct was consented to by a joint owner.
 (e) What are the damages for breach of copyright?
o Transfer of ownership of copyright. According to 17 U.S.C. 204(a), transfer of a copyright requires a written note
signed by the conveyer. This transfer may be recorded with the Register of Copyrights, which gives a subsequent
purchaser constructive record notice of the transfer.
o Conflicts in copyright
 Between the transferee and the holder of a nonexclusive license. According 17 U.S.C 205(e), a previous
license prevails over a transfer of ownership if the license is evidenced by a written instrument signed by
the owner of the rights licensed or such owner’s duly authorized agent, and if—
 (1) the license was taken before execution of the transfer; or
 (2) the license was taken in good faith before recordation of the transfer and without notice of it.
 Between conflicting transferees. According to 17 U.S.C. § 205(d), the transfer executed first prevails if it is
recorded within one month after its execution. Otherwise, the later transfer prevails if it is recorded first, in
good faith, for valuable consideration, and without notice of the earlier transfer.

 Adverse possession
o Adverse possession requires entry that is open and notorious, continuous for the statutory period, adverse and under
a claim of right, and exclusive.
 (1) Entry. Entry is physical occupation.
 (2) Open and notorious. Whether adverse is “open and notorious” is determined by an objective standard.
 For real property, making improvements and paying taxes is evidence that the possession is open
and notorious.
 For chattels, one should consider (1) how likely the original owner is to find out about the
possession, and (2) how likely the owner is to identify the person who has taken the property.
 (3) Continuous. The use by the adverse possessor must be continuous for the statutory period.
 Trespass action required to interrupt. For the owner to interrupt the continuity of possession, he
must bring a trespass action.
 Of property owned by a person with a disability. If a person has a disability (e.g., insanity, youth)
that prevents them from bringing an action, they have an extra ten years after the disability is
removed to bring an action.
 Average true owner. The adverse possessor must use the property in the same way that an
“average true owner” would use it, as in Howard.
 Tacking. There are two approaches to whether or not successive adverse possessors may “tack”:
o (1) Successive adverse possessors may always tack.
o (2) Privity between successive adverse possessors is required for tacking.
 (4) Adverse and under a claim of right. Possession must also be adverse and under a claim of right for the
statutory period.
 Permission destroys. If the owner gives permission for the occupation, possession is not adverse.
o Acquiescence doctrine. However, according to the acquiescence doctrine, if an owner
acquiesces for part of the statutory period, the statutory clock does not reset and the
adverse possessor must only possess for the remainder of the statutory period.
 There are three approaches to determining whether possession is adverse.
o (1) According to Manillo, and most jurisdictions, intent is irrelevant.
o (2) In some jurisdictions, possession must reasonably be in good faith (e.g., under color
of title)
 o (3) Under the Maine doctrine, adverse possession must be in bad faith.
o The Manillo view that the intent of the adverse possessor is irrelevant is the best view
from a policy standpoint. The purpose of adverse possession is to preserve stability in
land possession, i.e., if a party has been possessing land for a long time, they should not
be interrupted. Intent of the party is irrelevant to this purpose.
 (5) Exclusive use. The exclusive use requirement means that the owner cannot also use the property.
o Of government property. There is no adverse possession against the state.
 However, adverse possession against the state should be allowed. The justification for adverse possession—
maintaining continuity of ownership—applies equally. Efficiency, etc.
o Of chattels. As long as the injured party diligently looks for the chattel, the statutory clock does not start running
until the injured party locates the chattel, as in O’Keefe. The statutory clock does not start running until the point in
time that the owner should reasonably have known that the chattel is gone.
 According to Doris Silk, copying a product is okay.
o Of intellectual property. According to Gee, there can be adverse possession of music. Adverse possession of a
copyright occurs when it is falsely presented as somebody else’s for the statutory period.

 Gifts
o Types of gifts
 An inter vivos gift is made while the giver is alive.
 A gift causa mortis is only effective if the giver dies.
 A testamentary gift is made by a will. Rules for such gifts are defined by statute. In Illinois, testamentary
gifts must be (1) in writing, (2) signed by the testator, and (3) attested by two or more credible witnesses
(who cannot take under the will).
o Justifications: wrench of delivery, evidence
o The elements required for gifting property are (1) delivery, (2) with donative intent, and (3) acceptance of the gift.
Modern jurisprudence focuses more on intent than the formal requirements of delivery.
 (1) The first requirement is delivery of the item. The transferee must obtain dominion and control over the
property, and the transferor must give up control.
 There must be actual delivery if feasible. According to Neuman, there is a more strict requirement
for gifts causa mortis.
o For real property, this means delivery of the deed.
 If actual delivery is impractical, constructive delivery is acceptable (e.g., delivery of a key or an
endorsed check). Constructive delivery deprives the giver of access to the property while granting
access to the grantee.
o Of chattel. According to Gruen, if a donor wants to give a donee a remainder in a chattel
and retain a life estate for himself, constructive or symbolic delivery (e.g., a letter) is
sufficient to meet the delivery requirement.
 If actual delivery is impossible, symbolic delivery (e.g., a writing) is also acceptable. However,
some states do not accept symbolic delivery. But, symbolic delivery makes sense in light of the
modern emphasis on written documents.
 (2) The gift must be made with donative intent. The intent must be to transfer possession at present.
 Test: subjective interpretation by giftee.
 (3) There must be acceptance of the gift by the giftee. There is a presumption of acceptance; express
rejection is the only way to refute acceptance.
o Bailment. You can use this computer to finish your brief. Trustee relationship.

 Concurrent ownership
o Types of tenancies
 (1) Tenants in common have distinct, fully alienable property interests in the entire property.
 There is a construction preference in favor of tenancy in common.
 Rent/accounting. According to Spiller, a co-tenant cannot charge his co-tenant for rent unless he
has been denied entry (i.e., unless he has been ousted). But, some jurisdictions disagree. The
correct rule should be that there must be an ouster, since both tenants have an interest in the entire
property. To charge a rent, a co-tenant should bring an action for an accounting.
 Waste. A co-tenant may also bring an action for waste.
 Upon death of a spouse, the dying spouse’s interest goes into the intestate/testate system, and does
not necessarily go to the surviving spouse.
 (2) In a joint tenancy with right of survivorship, the death of one owner automatically enlarges the interest
of the other.
 A JTWROS requires four unities:
 o (1) unity of time (which requires that both parties received their interest at the same
time),
o (2) unity of title (title must be acquired by the same interest or acquisition (this means
that it cannot pass through intestate succession),
o (3) unity of interest, and
 Both parties must have the same interest (e.g., both must have a life estate).
o (4) unity of possession.
 Each one must have a right to possess the whole.
o But many states have relaxed these requirements and found a JTWROS if the intent of
the grantor indicates it.
 Death of a co-owner. If a co-tenant of a JTWROS dies, the other party gets their interest, and
probate court is avoided.
 Alienability
o A JTWROS is not inheritable or devisable.
o Severance. Either party may sever a JTWROS. If one tenant conveys their interest to a
third party, the JTWROS turns into a tenancy in common.
 Mortgages and severance. According to Harms, one party conveying a mortgage
in a JTWROS does not destroy the joint tenancy. The mortgagee has a mortgage
only on the mortgagor’s interest. But, other courts take different approaches (i.e.,
the mortgage is extinguished, or the mortgagee obtains a mortgage on the whole
interest).
 (3) A tenancy by the entirities can only be held by married couples, cannot be alienated, and cannot be
severed except by divorce.
 Upon death of one spouse, the other spouse gets the entire interest.
o Related causes of action
 Ejectment is a cause of action to gain entry onto jointly held property.
 Accounting is a cause of action to obtain rent received by a co-tenant. According to Swartbaugh a tenant
must share the proceeds from leasing out property, even if there is no ouster and the other party is not
present. But, the correct rule should be that there must be ouster before an accounting is required, since
both co-tenants have an interest in the entire property.
 Partition is a cause of action to split property.
 According to Delfino, a court will partition in kind if possible, or if it is better for the owners. If
not, the partition will be by sale.
o In a partition in kind, a court will try to give owners the improvements they made.
o In a partition by sale, the court will try to compensate owners for their lost improvements.
 Waste. Concurrent owners have a duty not to reduce the value of land. The cause of action to recover the
lost value of the land is waste.
 Contribution. If one party is maintaining property (upkeep, taxes, etc.) he may bring a contribution action
against the other tenants as long as there is no ouster.
 Martial property is property acquired during the marriage and cannot be conveyed without permission of
both spouses.
 Exceptions. Property inherited or acquired by gift, or property excluded from marital property by
agreement of the spouses is not marital property.
 Management. One spouse may manage the property.
o Divorce
 Can opt-out of default rules through prenuptial agreements. Strong presumption of reasonability for
prenuptial agreements.
 Two steps:
 (1) Decide whether to grant the divorce. In states with no-fault divorce, this is a no-brainer.
 (2) Split up the marital property.
o Marital property states (most)
 What is marital property? Marital property is, in general, any property that is
acquired during the marriage.
 An inheritance is not marital property
 According to Graham, an MBA is not marital property.
 According to Elkus, celebrity status can be marital property, although
this a minority view.
 Marital property is divided equitably.
 The starting point for equitable distribution is that each spouse should
get ½ of the marital property.
  Other factors:
o Contribution of each party
o Dissipation by each party of the property (e.g., wrecking a car)
o Value of property assigned to each spouse by agreement
o Duration of marriage
o Economic circumstances of each spouse (e.g., child care
responsibilities)
o Rights/obligations from a previous marriage
o Pre-nupital agreement
o Needs, occupation, income, etc. of each party
o Custodial provisions for children
o Maintenance: stream of payments
o Future earning potential of each spouse
o Communal property is special kind of property ownership in marriage found in about 10
states. Both spouses own an undivided, 50% interest in property acquired during the
marriage and receive this at divorce.
o Choice of law.
 Real property obeys the law of the state it sits in.
 Otherwise, the law of the state the spouses reside in controls.
o Death
 Procedure
 Administrator. A court will appoint an administrator if the death is intestate (i.e., without a will),
or an executor if the death is testate (i.e., with a will). The administrator will deal with property as
if he were a trustee. He will identify debts, determine the nature of property interests, and send
notice to creditors (which, under Mullane, must be reasonably calculated to reach the creditors).
 Order of payments: people who paid expenses for death (funeral, etc.), administrators (lawyers,
etc., general creditors).
 Spousal shares
 Governing law
o Real property obeys the laws of the state in which it sits.
o Otherwise, the law of the decedent’s domicile at death governs, unless the will says
otherwise.
 In most states, a spouse has the option to take under the will or take the elective share (usually 1/4
to 1/2).
 In community property states, the spouse receives ½ of the marital property.
 Dower is now found only in a few states.
o Real property is within the scope of dower if it is owned freehold during marriage,
however briefly, and the property is inheritable by the issue of the marriage
 Does not apply to remainders or executory interests (not freehold)
o Typically, the wife receives a life estate in one third
o Mortgage by one spouse may or may not be permissible.
 Accessibility by creditors. According to Sawada, a surviving spouse’s interest is not reachable by creditors
after the mortgaging spouse dies.

 Transaction of property
o Contract for sale
 Statute of frauds. According to the statute of frauds, a sale of land must be evidenced by writing.
 Purposes: evidentiary, cautionary, channeling (certainty about whether it’s legally effective)
 E-mail may or may not satisfy the statute of frauds.
 Exceptions. According to Hickey, there is an exception to the statute of frauds if (1) the contract is
partly performed (e.g., money has been paid or possession has been taken), or (2) there is reliance.
 Implied warranties and duties in the contract for sale. The remedy for breach of these warranties is
rescission of the contract.
 (1) The implied warranty of marketable title requires that the title be free of valid outside claims
and encumbrances.
o Public restrictions on land use. According to Lohmeyer, public restrictions on land use,
such as zoning, make title unmarketable only if they are violated.
o Private restrictions on land use make title unmarketable if (1) they are violated, (2) the
buyer has not agreed to the restrictions, and (3) the restrictions actually restrict the buyers
privileges
  (2) According to Lempke, the implied warranty of workmanlike quality protects against latent
defects, and privity of contract is not required for suit on this warranty. In other words, a
subsequent purchaser can sue on this warranty.
o No “springing defects.” If a problem with the property would not have been a defect at
the time it was transferred, a subsequent purchaser may not sue on that problem, even if it
is later considered a defect.
 (3) The transferor has a duty to disclose latent, material defects, as in Stambovsky and Johnson.
o At common law, this duty did not exist, but now it does.
o What is a “material defect”?
 Approaches
 According to the objective test, a material defect is one that a
reasonable person would attach importance to.
 According to the subjective test, a material defect is one that would
affect the value or desirability of the property to the buyer.
 Hazardous waste is always considered a “material defect.”
o Contract is signed.
o Equitable conversion. According to the doctrine of equitable conversion, when the contract for sale is signed, the
buyer becomes the equitable owner of the property and the seller remains the legal owner. This means that the buyer
assumes the risk of property damage after the contract for sale is signed. Some courts, however, have declined to
apply this principle.
o Deed is transferred.
o Merger doctrine. According to the merger doctrine, once a contract for sale is performed and a deed is transferred,
the contract obligations are (theoretically) extinguished, and the deed is the only source of obligations, unless the
contract obligations are collateral to the deed. But, courts have steadily chipped away at this rule.
o Deed content requirement. All deeds must include a description of the tract of land.
o Delivery requirements. Delivery of the deed requires an act showing the intent of the transferor to be presently
bound by the transfer.
o Forged/fraudulent deeds. Forged deeds are always void. Fraudulent deeds are good if the subsequent purchaser is
bona fide, in good faith, and without notice of ownership.
o Title covenants/warranties (suing on the deed)
 Present covenants are broken, if ever, at the time the deed is delivered, and do not run with the land.
 The covenant of seisin requires that the grantor warrant that he owns the estate he purports to
convey, as in Bost.
o Damages for breach of the covenant of seisin are proportional to the sale price.
o Privity required? In some jurisdictions, a chose in action based on violation of the
covenant of seisin can be reassigned to subsequent buyers (e.g., in Iowa, as the
Rockafellor case held).
 The covenant of right to convey requires the grantor to warrant that he has the right to convey the
property.
o A trustee, for example, could own the property but not have the right to convey.
 The covenant against encumbrances requires the grantor to warrant that there are no encumbrances
on the land (e.g., mortgages, leases, easements, liens, restrictions, co-tenants, patent violations of
land use statutes).
o Damages are the cost of fixing the encumbrance, or the difference in land value between
the property with and without the encumbrance.
o Land use statutes
 According to Frimberger, a latent violation of a land use statute does not violate
the warranty against encumbrances
 According to Bianchi, a patent violation of a land use statute does violate the
warranty against encumbrances.
 Future covenants are broken, if ever, in the future. There is no breach unless someone else takes possession
or the grantee is constructively evicted.
 The covenant of general warranty means that the grantor warrants that he will defend the title
against lawful claims by third parties and compensate against any loss the grantee sustains by
assertion of superior title. The grantor is not liable for legal fees if the suit is successfully
defended.
o In some jurisdictions, the grantor must only against successful claims.
 The covenant of quiet enjoyment means that the grantor warrants that the grantee’s possession will
not be disturbed by the grantor or someone under his control, anyone with superior title, as in
Reste. [Almost the same as covenant of general warranty; go with that.]
  The covenant of further assurances means that grantor warrants that he will execute any other
documents to perfect the title conveyed.

 Mortgages
o Two documents
 The promissory note establishes the mortgagor’s personal liability for the loan.
 The mortgage gives the mortgagee the right to take the house if the mortgagor doesn’t pay the mortgage.
o Two kinds of states:
 In lien states (most states), there is a contingent transfer of property which gives the mortgagor a fee simple
absolute when he satisfies the debt. The contingency vests possession in the mortgagee in fee simple
absolute if the homeowner defaults.
 The mortgagor has equitable title and legal title to the property.
 The mortgagee has an inchoate interest (right to take it back)
 The mortgagee must go through the judicial foreclosure process.
 In title states, the mortgagor transfers a defeasible fee to lender. The fee is defeased when the mortgagor
pays the debt.
 The mortgagor has equitable title to the property.
 The mortgagee has legal title to the property.
 To repossess, a mortgagee doesn’t need to go through the judicial foreclosure process. But, only
mortgagees (or their executors, assigns, etc.) can foreclose, as the court in Ibanez held.
o Mortgage alternatives
 In a deed of trust, the borrower conveys real property to a third party as a trustee for the lender, purely to
secure repayment of debt. The trustee may sell the property if there is a default and use the proceeds to
repay the debt without going through judicial foreclosure.
 In an installment land sale contract, the purchaser takes possession and the seller contracts to convey title
when the purchaser has paid the purchase price. The seller provides the financing.
 Generally, the buyer forfeits the property and the payments if he defaults.
o But, Bean held that in a land purchase contract in New York, a vendee becomes the
equitable owner of the property. If he defaults, the property is sold and the proceeds are
split between the vendor and the vendee.
o Foreclosures
 Foreclosures generally require a judicial action.
 Mortgagees are liable for a deficiency judgment if the foreclosure doesn’t yield enough money to cover the
amount left on the mortgage.
 Courts can review sale prices to make sure they are fair.
 Fiduciary duty. According to Murphy, in a foreclosure sale, a mortgagee has a fiduciary duty of good faith
and due diligence to the mortgagor and must exert a reasonable effort to obtain a fair and reasonable price
for the property.
 Getting the property back. A mortgagor may have the right to catch up on the loan.
 When a mortgagor pays back the loan, he has equity of redemption to get the property back.
 A borrow may also have a statutory right to pay back the loan and get the property back after the
foreclosure sale happens.

 Types of deeds
o In a general warranty deed, the grantee warrants against all defects in title, whether they arose before or after the
grantor took title.
o In a special warranty deed, the grantor warranties only against the grantor’s acts, not the acts of others. The grantor
is not liable if there was a problem with the previous grantor’s ownership.
o In a quitclaim deed, the grantor provides no warranty, but merely conveys whatever interest he owns.

 Delivery of a deed.
o Intent required. According to Rosengrant, to be effective, a deed must be delivered with the intent that it be
presently operative.
 Presumption of intent. According to Sweeny, where there is a delivery, there is a presumption that there is
intent, even if there is evidence that the grantor did not mean the deed to be effective. However, some
courts disagree with this.
o Delivery can be handing over the deed or the grantor’s declaring that he is bound by the deed.

 Title searches/the recording system

 o At common law, a transferor could not convey what he did not own, and there was no protection for innocent third-
party transferees.
o Under modern recording statutes, a bona fide purchaser may be protected if he is without notice of the other interest.
 Types of statutes
 Under a race statute, whoever records the deed first gets it. (Only North Carolina.)
 Under a notice statute, a good-faith, subsequent purchaser for value has good title if he is without
notice of the first purchaser. (Illinois.)
 Under a race-notice statute, a good-faith subsequent purchaser for value is protected against prior
instruments only if (1) he is without notice of the prior instruments, and (2) he records before the
prior instrument is recorded.
 The justifications for recording statutes are to protect bona fide purchasers and to encourage use of the
recording system.
 Types of notice/what constitutes notice?
 Actual notice involves actual knowledge that another person owns an interest in the property.
 Constructive notice (imputed notice)
o Inquiry notice. Inquiry notice exists when there is a condition that would cause any
reasonable person to inquire further, as in Harper. The Florida case of Waldorff held that
actual possession by another party constitutes inquiry notice.
 Characteristics common to a subdivision plan may constitute inquiry notice.
o Record notice requires purchasers to do a title search to see if a deed has been recorded.
 Defective deeds. According to Messersmith, to be validly recorded, a deed must
not be defective.
 Mother Hubbard clauses. According to Luthi, the recording of an instrument of
conveyance using a “Mother Hubbard” clause to describe the property conveyed
does not give constructive record notice to a subsequent purchaser.
 Misspelled names. According to Orr, recording of a misspelled name may or
may not give a subsequent purchaser constructive notice, depending on how bad
the misspelling is.
 Common grants with restrictions. According to Guilette, if there is a common
grant with restrictions, a subsequent purchaser of one of the plots has
constructive notice of the restrictions even if his deed didn’t contain the
restriction. In other words, he should have done a grantor title search.
 Illinois, New York, and Ohio adhere to the opposite view.
o Deeds from grantors who do not own the property. According to Sabo, a deed from a
grantor who does not own the property to a grantee does not give constructive notice to
subsequent purchasers of the property.
o According to the shelter rule, if a grantor gives property to a grantee but does not have title to the property, and the
grantor later gets title to the property, the title passes to the grantee.

 Title insurance
o What it does. Defends lawsuits against land and compensates for damages.
o Title insurance does not run with the land.
o Acerage not covered. According to the New Jersey case of Walker Rogge, unless the contract specifically says so,
title insurance only covers title, not acreage or other items that an accurate survey would reveal.
o Cost of removal of hazardous substances not covered. According to the Lick Mill case from California, title
insurance does not cover the cost of removal of hazardous substances from property.

 Servitudes
o An easement is a non-exclusive, possessory interest in property, in writing, that benefits a dominant tenement at the
expense of a servient tenement.
 [Same bona fide purchaser, notice analysis applies.]
 Scope. The scope of an easement is determined by its terms, the express or implied intent of the grantor,
and the purpose of the easement.
 Appurtenant vs. in gross. An easement appurtenant benefits an owner of land, is transferrable, and runs
with the land. An easement in gross benefits a particular person, and is transferrable except in the case of
recreational easements like hunting or fishing. There is a construction preference in favor of easements
appurtenant.
 Ways easements they can arise
 Express. An easement may be express if written down in a deed.
  By prescription. For an easement to arise by prescription, it must be open and notorious, hostile,
and continue for the statutory period.
 By estoppel. An easement by estoppel arises from a license when the user under the license makes
an investment in reliance on being able to continue with the use, and the grantor is aware of the
investment.
 By necessity. An easement by necessity arises when (1) the dominant and servient tenement were
once commonly owned,
 By prior use. An easement by prior use arises when (1) the dominant and serivent tenement were
once commonly owned,
 Permission precludes creation of. An easement does not arise if the owner gives permission for its use (and
makes sure that no investment is made).
 Remedy. The remedy for interference with an easement is an injunction.
 A negative easement gives a landowner the right to prevent another landowner from doing something on
his land. Negative easements are disfavored by courts, except for the four traditional categories of (1) not
blocking windows, (2) not blocking air flowing in a defined channel, (3) not blocking water flowing in a
defined channel, and (4) not removing support from a building.
 Termination of easements. An easement may be terminated by:
 Estoppel. The servient landowner changes position in reasonable reliance of the holder’s assurance
that the easement will no longer be enforced.
 Disappearance of necessity. An easement created by necessity expires if the necessity disappears.
 Destruction. If the servient land is destroyed, the easement is terminated.
 Condemnation. If the servient land is condemned, the easement is terminated.
 Release. The holder of the easement can, in writing, release the easement.
 Abandonment. An easement disappears if , through non-use, the holder demonstrates an intention
not to use the easement again.
 Merger. If one owner takes title to both the servient and dominant estates, the easement is
terminated.
 Prescription. The servient estate may terminate the easement through prescription.
o A real covenant is a promise, in writing, to do or not do something that concerns the land. A negative, or restrictive
covenant is a promise not to do something; a positive, or affirmative covenant is a promise to do something. A
covenant can be enforced by bringing an action for damages. A covenant cannot arise by estoppel, implication, or
presecription.
 Condos. According to Neponsit, condo declarations that create real covenants are valid.
 There are five requirements for real covenants to run with the land:
 (1) intent of the parties to bind successors in interest
 (2) notice on the part of subsequent purchasers
 (3) potentially, horizontal privity. Horizontal privity is privity of estate between the original
covenanting parties. This requires that the covenant be expressed in a deed for land, i.e., there
must be a transfer in a property interest, not just a naked covenant.
 (4) potentially, vertical privity. This requires that there be some estate in land transferred, not just
a naked covenant. There are more stringent requirements for running of the burden than running of
the benefit. There are two approaches to analyzing whether there are vertical privity:
o (a) vertical privity exists only if the transferee has gotten the entire estate. The majority of
states follow this approach. [Analyze burden this way?]
o (b) vertical privity exists if the transferee has received part of what the transferor had.
The Restatement follows this approach. [Analyze benefit this way?]
 (5) the easement must touch and concern the land. Some states do not require this, but see
Neponsit.
 Remedies. The traditional remedy for breach of a real covenant is damages, but now injunctions are
available as well.
o Equitable servitude
 Requirements to run with the land. For an equitable servitude to run with the land, there are three
requirements:
 (1) intent of the parties to bind successors in interest,
 (2) notice on the part of subsequent purchasers,
 (3) the covenant must touch and concern the land.
 By common plan. An equitable servitude may arise from a common development plan. According to
Sanborn, subsequent purchasers may have inquiry notice for possible equitable servitudes based on the
appearance of the development. According to Neponsit, this obligation may exist for affirmative obligations
as well, but courts are more reluctant to apply these.
  Remedy. The remedy for breach of an equitable servitude is an injunction.

 Nuisance. Nuisance is a cause of action to prevent one property owner from using his property so as to create a non-
trespassery invasion that causes a significant, unreasonable interference with another person’s use of his property. Nuisance
can either be intentional and unreasonable, or the unintentional result of something negligent, reckless, or abnormally
dangerous.
o Public vs. private
 A public nuisance exists when there is damage to the public in general. To have standing to sue for public
nuisance, a landowner must have suffered special damage.
 A private nuisance exists when there is harm done to a particular plaintiff. According to the High Penn Oil
case, negligence is not required for a private nuisance to exist.
o Per se vs. per accidens
 A nuisance per se is something that would be a nuisance in any situation, like a brothel.
 A nuisance per accidens becomes a nuisance only because of the surrounding circumstances.
o Intentionality. Intent may be either purpose to cause the nuisance, or knowledge that the nuisance is ongoing and
refusing to abate it.
o In nuisance law, there are two views on the establishment of liability.
 Under the traditional view (still followed in some jurisdictions), a nuisance exists when there is an
unreasonable interference with the use of property as determined by a person of ordinary sensibilities in the
locale.
 Under the view espoused by the 2nd Restatement of Torts, a balancing test is required to determine whether
there is a nuisance. There is a nuisance only when the net social value of the activity is negative, e.g., when
the harm to the plaintiff exceeds the benefits to the defendant. Other factors include the cost of abating the
nuisance, the ability of the landowner to abate the nuisance, the suitability of the location to the activity,
and the ease of avoiding the nuisance.
o A purely aesthetic annoyance is a nuisance only if there is actual malice behind it.
o Remedies. Some courts do not require balancing of the equities to issue an injunction, as in Estancias Dallas and
Morgan v. High Penn Oil. However, most courts require a balancing of the equities before issuing an equitable
injunction for a nuisance. A court may find that there is a nuisance, but choose not to issue an injunction because the
activity has a net social benefit. A court may stay an injunction even if a potential injunction meets the balancing-of-
the-equities test. For example, the court in Boomer ordered permanent damages in lieu of an injunction. The court in
Del Webb issued an injunction but required the land developer plaintiff to indemnify the defendant.

 Challenges to deprivation of property (zoning, eminent domain)

o Is the action ultra vires? An action is ultra vires if the legislative body enacting it is not authorized to take that
action.
  Zoning. Municipalities generally have broad authority to zone, as in Euclid.
o If the action is not ultra vires, the plaintiff can argue that the action violated due process, or that it constitutes a
compensable taking under the Fifth and Fourteenth amendments.
o Due process violation? To establish a due process violation, a plaintiff must establish (1) that the state (2) deprived
her of a property interest, (3) without due process of law.
 (1) Is there a state action? The 14th Amendment prohibits only state deprivations of property interests, not
private ones (which are covered by the laws of nuisance, trespass to land, conversion, and trespass to
chattel).
 (2) Has there been a deprivation of life, liberty, or property? Identify the stick that is being taken away from
the owner’s bundle. If the state action takes away a stick that was never in a property owner’s bundle (e.g.,
something that is a common law nuisance), there is no deprivation of property.
 (3) Is there a legitimate state interest? Identify the state interest involved, and argue both sides.
 For zoning, according to Euclid, legitimate state interests include promoting safety and security,
reducing street accidents, decreasing noise, preserving an environment for raising children, aiding
in fire prevention, facilitating transportation, sewage, parks, and public entities, preventing land
overcrowding, and providing adequate light and air.
 (4) Is there a rational relationship between the legitimate state interest and the deprivation of property?
[Articulate the relationship. Is it very over- or under-inclusive?] Courts are very deferential to legislatures
identifying the rational relationship.
 (5) Has there been a deprivation of a fundamental right? Examples of fundamental rights are freedom of
expression, as in City of Ladue, freedom of religion, or discrimination based on race, as in Shelly v. Kramer.
Property is not a fundamental right for purposes of due process analysis.
 If there has been a deprivation of a fundamental right,
 (6) Was there must be a compelling state interest involved? Examples of compelling state interests include
national security, enforcing law and order, etc.
 If so,
 (7) Was the state action must be narrowly tailored to advance the compelling state interest? If the statute is
over- or under-inclusive, and the plaintiff can identify a less over- or under-inclusive means of advancing
the interest, the statute is unconstitutional.
o Has there been a compensable taking?
 First, has a stick been taken from the property owner’s bundle? Possibilities:
 (1) No stick. If the government removes a stick in a property owner’s bundle that was never there
in the first place, e.g., something that is a nuisance, it is, per se, not a taking.
 (2) In the middle ground, a balancing test is necessary, as in Pennsylvania Coal.
o Factors include the importance of the stick, the importance of the government interest,
and the means used.
 (1) Importance of the stick
 (2) Importance of government interest. Would a finding of taking interfere with
the ability of the government to govern?
 (3) Means used. Was the landowner singled out?
 (4) Would the finding of a taking interfere with the government’s power to
govern?
o In Pennsylvania Coal, the Supreme Court held that a regulation that effectively took
away all reasonable value of land (in this case, by removing mining rights) is a taking.
o The court in Penn Central held that a government designation of land as a landmark,
limiting future development rights, was not a taking.
 (3) Per se takings
o Complete seizure. If the government seizes properly entirely, there is a compensable
taking.
o Permanent physical occupation. In Lorretto, the Supreme Court decided that if the
government physically occupies someone’s property, or allows a physical occupation of
such property, it is, per say, a taking. [Includes easements, I think.]
o Removing all economically valuable uses of property. In Lucas, the court held that a
legislative action which effectively removed all economically valuable uses of property
was a taking.
 If there is not a taking, it is probably a legitimate zoning ordinance. According to Euclid, the enforcement
of reasonable zoning regulations is a valid exercise of the police power.
 Variances. According to Commons v. Westwood, a variance should be granted if (1) it is necessary
to avoid an undue hardship, and (2) it does not impinge upon a public good.
 [Note: for zoning actions, stop at “narrowly tailored”; don’t do taking, public purpose, or
compensation. No compensation is required.]
 Was the taking for public use? In Kelo, the Court held that “public use” means “public purpose,” and that
economic development qualifies as a public purpose.
 If so, then the property owner is entitled to just compensation.