You are on page 1of 47

REAL PROPERTY

FIRST: IDENTIFY AND DESCRIBE INTEREST IN LAND (estate; easement; restrictive covenant) SECOND: How can these interests be ACQUIRED, RETAINED or TRANSFERRED?

I.

ESTATES IN LAND ± Freehold vs. Non-freehold A. PRESENT POSSESSORY ESTATES: freehold and non-freehold 1. key word for estates possession (if you have the right to possess, you have an estate) 2. estate w/future right of possession future interest 3. non-freehold estates landlord-tenant estates B. IDENTIFYING AND DESCRIBING FREEHOLD ESTATES (fee simple, inclu. defeasible fees; life estate; fee tail) 1. FEE SIMPLE ABSOLUTE (FSA) a. potentially infinite duration b. FSA must be fully alienable no direct restraints on transfer of ownership of FSA c. exception: right of first refusal is a valid restraint on alienation i. J wills farm to Y, but if Y tries to sell farm during her lifetime, then S has a right of first refusal. d. language of creation i. at common law: ³to A and his heirs´ ii. majority change: courts will presume a fee simple granted unless language shows a clear intent to do otherwise e. defeasible fees i. fee simple determinable ii. fee simple on condition subsequent iii. fee simple subject to executory interest 2. FEE TAIL a. At CL, a device to lock property into the grantee¶s family.

1

b. language of creation: i. ³to A and the heirs of his body´ ii. ³to A and his bodily heirs´ c. modern presumption: language presumed to create FSA unless bar exam asks to apply CL rule 3. LIFE ESTATE a. defined: present possessory estate in land that is usually measured by the life of the grantee b. creation: 2 ways: i) expressly; or 2) by implication c. key RULE: LE never measured by time ± only by life. d. by implication: ³to Luci and Lynda a/f death of my beloved wife Lady Byrd´ i. LB has LE created by necessary implication from terms of testator¶s will. e. life estate pur autre vie (life estate measured by the life of another) i. O to ³Tarzan for the life of Jane´ 1) T has a life estate for Jane¶s life. 2) What if Tarzan dies while Jane (measuring life) is still alive? a) at CL: seisin is vacant; anybody takes (until J dies) b) modern rule: if life tenant dies b/f measuring life dies, life estate passes to estate of deceased life tenant and continues until measuring life dies. c) if Jane dies first, T¶s life estate terminates. f. transfer of life estate i. Garth to Reba for life. Reba sells LE to Al. 1) R has a LE and is measuring life. 2) Al has a life estate pur autre vie. 3) If A dies b/f R, LE passes to A¶s estate and continues until R¶s death. g. restraints on alienation

2

i. modern rule: allows provision that terminates life estate if LT attempts to convey away life estate 4. RIGHTS AND DUTIES OF LIFE TENANT: DOCTRINE OF WASTE: Life tenant must maintain the estate a. Tenant for life is entitled to all ordinary uses and profits of the land; but he can¶t do any act that would injure the interests of the person who owns remainder or reversion b. voluntary waste: any affirmative action beyond right of maintenance that causes harm to the premises i. tenant may continue normal use of the land ii. any change of use = voluntary waste; and t may liable to holder of future interest iii. general rule: depletion of natural resources constitutes voluntary waste UNLESS consumption of such resources constitutes normal use of land open mines doctrine 1) sale of harvestable crops does NOT constitute waste c. permissive waste: failure to maintain. T must do 3 three things to avoid liability for permissive waste. i. repairs 1) rule: LT has obligation to make ordinary repairs but not replacements. 2) limitation: Liability limited to amount of rents and profits received from the land. 3) If no rents and profits, repair obligation limited to reasonable rental value of land IF tenant is using the land. 4) If no rents and profits, and t not using land no repair obligation ii. taxes 1) rule: LT must pay all taxes on the property. 2) limitation: obligation extends only to amount of rents and profits received from land.

3

3) if no rents and profits: obligation extends to reasonable rental value of the land 4) if no rents and profits and t not using land, no obligation to pay taxes?????? 5) if t fails to pay taxes: holder of future interest needs to be sure taxes are paid b/c tax sale will eliminate the future interest. And buyer at tax sale takes property free and clear of future interest. 6) GEORGIA: if tenant fails to pay taxes, life estate is forfeited. iii. mortgage debt 1) rule: LT must pay interest on mortgage indebtedness but NOT required to make principal payments. (holder of future interest must pay principal) 2) limitation: obligation limited to amount of rents and profits received 3) if no rents and profits obligation limited to reasonable rental value of land IF tenant is using land d. ameliorative waste: i. rule: AW occurs where LT alters property substantially but LT¶s activity increases value of the land 1) changed conditions: if changed conditions have made property relatively worthless, then LT can alter property w/out incurring liability to holder of future interest 2) remember: ³changed conditions´ & ³relatively worthless´ e. can give LTs right to sell any property for support and maintenance 5. SEISIN a. all freehold estates carry concept of seisin b. means that holder of seisin is taxpayer c. at the moment of each and every conveyance of Blackacre, property law wants to know who has seisin at all times and under all possible circumstances. 4

p. terminates: AUTOMATICALLY on the occurrence of some event 5 . possibility of reverter iii. executory interest D. transferability i. O ± reversion b. freely transferable inter vivos 2. classification rules* b. Possibility of Reverter. i. A: fee simple determinable ii. O to A for life. O to A and his heirs for so long as no liquor is consumed on the premises. reversions are vested ii. Classification Rules: 2 Categories of Future Interests a. FUTURE INTERESTS IN THE GRANTOR 1. follows fee simple determinable a. A ± life estate ii. reversion ii. see Hypo 11. freely transferable on death iii. follows life estate: arises in grantor whenever grantor conveys away less than the full durational estate that grantor had a. not subject to RAP. remainder ii. if at all. i. fee simple determinable (possibility of reverter) i. FIS retained by GRANTEE i. MBE Questions: 2 categories a. Rule: interest exists now but possession will not take place. rule a/g perpetuities 3. 2. FUTURE INTERESTS 1.C. until some time in the future. 9-10 c. FIs retained by the GRANTOR i. O: possibility of reverter b. Reversion. right of entry b. What is a future interest? a.

however. magic words 1) provided however 2) but if 3) on condition that iii. transferability i. A: fee simple on condition subsequent ii. creation 1) to create fscs magic words must by followed by language where grantor expressly reserves right to enter and retake c. terminates: when O does something to retake the property. NOT freely transferable inter vivos* (crucial difference b/w right of entry and possibility of reverter) E. grantor automatically retains a possibility of reverter iii. fee simple on condition subsequent i. RIGHT OF ENTRY a. rule: whenever grantor conveys FSD. not subject to RAP vested ii. O to A and her heirs. that if liquor is ever consumed on the premises then O or O¶s heirs shall have the right to re-enter and retake the premises. O: right of entry b. magic words 1) for so long as 2) while 3) during 4) until 3. FUTURE INTERESTS IN GRANTEE 1.ii. does NOT go back to grantor automatically when condition is broken 1) title stays in grantee until grantor exercises right of entry ii. provided. freely transferable on death iii. Remainders 6 . i.

Class Gifts: Vested Remainder Subject to Open a. no conditions to taking b. 5.a. A cannot have any more children and property will be distributed to A¶s children in fee simple. O to A for life. i. A: life estate ii. O: reversion b. class remains open to allow for future persons who qualify as class members by satisfying class description b. B: remainder in fee simple 3. Vested Remainder a. then to A¶s children. remainders are either vested or contingent 2.C. remainder: future interest in a 3rd party grantee that comes naturally and immediately on the termination of the preceding estate b. B. A has 3 children. Contingent Remainders a. Class Gifts: Time for Vesting and Rule of Convenience 7 . and then on A¶s death to B and his heirs. then to B and his heirs if B survives A.D: vested remainder subject to open iii. C and D. O: nothing iv. i. A: life estate ii. i. class closes on A¶s death b/c when A dies. i. O to A for life. i. rule: Where remainder interest is conveyed to a class of unnamed persons whose members are not yet fully known. O to A for life.e«. survivorship clauses. At time O makes this grant. taker is ascertainable ii. age contingencies 4. A: life estate ii. B: contingent remainder in fee simple iii. rule: remainder is vested if nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate. B.

C: executory interest 1) C takes EI b/c language of condition is made part of the grant over to C 7. remainders are patient) b. then to B and his heirs. Rule: No interest will be valid unless it must vest. apply this UNLESS language of grant specifies different intent of grantor c. the class CLOSES for a CLASS GIFT whenever any class member is entitled to distribution. RULE AGAINST PERPETUTITES 1. this is a rule of construction. Future Interests and the Law of Waste a. 8 . 24: O to A for life. if at all. then to B and his heirs. i. not a rule of law. Executory Interests a. holders of remainders have standing to sue for waste F. A: fee simple subject to executor interest ii. To identify: An EI operates to cut short the estate that comes before it. and if the property is ever used for something other than residential purposes. rule: under a rule of convenience. then to C and her heirs. therefore. but if at B¶s death. Hypo 23: O to A so long as the property is used for residential purposes. Hypo 20: 6. A: Life estate ii.a. B is not survived by issue. i. B: executor interest 1) B interest is not a remainder b/c remainders NEVER follow a fee simple. b. (Remember. B: vested remainder in fee simple subject to executory interest (aka vested remainder subject to total divestment or VRS to executory limitation) iii. w/in 21 years a/f the death of some life in being who was alive at the time the conveyance was made. holders ofexecutory interests do not have standing to sue for waste b. c.

remainder to my great grandchildren b. and property reverts back to grantor and grantor¶s heirs 5. executory interests b. interest is VOID. Drills (2) To my son for life. ii. cheat your way through a. to the American Cancer Society) i. examples a. Step 2: next subsequent party not mentioned by proper name will get the property c. Step 1: last person mentioned by proper name w/a future interest will get the property b. vested remainders subject to open d.e. is it possible that everyone alive at the time of the grant dies ± plus more than 21 years go by ± before that interest might vest)? if the answer is yes. ³to my neighbor so long as the property is used for residential purposes. 3. contingent remainders c. if right of first refusal given to ascertainable persons no RAP problem ii. Step 3: everybody following that person loses out. but if the property ceases to be used for residential purposes. rights of first refusal i. it might vest too remotely RAP problem 4. Executory Interest in ACS is void under RAP b/c it might vest beyond lives in being plus 21 years. then to my eldest grandchild living at my son¶s death for life. if right held by heirs and assigns. ask: could FI possibly vest in grantee outside the time period of the rule (i.2. Charity to charity exception does not apply b/c neighbor is not a charitable organization 9 . applies to a.

partition can occur by voluntary agreement iv. lines are drawn and party seeking is no longer a JT and will own portion outright. JOINT TENANCY 1. Mortgage i. time. a lien attaches to the title. possession: all JTs must have identical/same rights of possession.all JT interests must vest at the same time ii. but title is not transferred. 10 . right of partition i. majority rule (Georgia) in a lien theory state. ii. b. there is no severance of JT if one tenant mortgages his interest. SEVERANCE ± INVOLUNTARY Termination of JT a. iii.II. creation rule: Four unities must be present at the outset in to order to create a joint tenancy AND language of conveyance must clearly reflect grantor¶s intent to create a joint tenancy (must use words ³right of survivorship´) a. Four Unities ± TTIP i. rule: severance occurs when any one of the four unities is disturbed (JT cannot be severed by will) b. then judicial action seeking a partition may be brought 2. interest: all JTs must take same kind and same amount of interest iv. if parties can¶t reach an agreement. Therefore. When mortgage is executed. title: grant to all JTs must be by same instrument iii. CONCURRENT ESTATES IN LAND A. in partitioning. the unities are NOT disturbed. rule: If any joint tenant wants to be relieved of burdens of common ownership. right of survivorship: surviving tenants take automatically on death of a joint tenant c. Sale c. can do so by asking that property be partitioned.

d. no right of survivorship C. 3. 1 unity required: possession means each co-tenant is entitled to possess the whole 2. Contract of Sale i. even though title goes back to mortgager when mortgage is satisfied. TENANCY IN COMMON 1. If JT is not properly created. rule: in a contract of sale. Creditor¶s Sale of Interest in JT i. JT is severed on the date contract is signed b/c of the doctrine of equitable conversion.ii. B. not severable by unilateral act of co-tenant 5. e. no right of partition 4. four unities + unity of marriage 2. death b. execution by a joint creditor 6. minority rule: In a title theory state. Accountability 11 . there is a severance of the joint tenancy b/c when mortgage is executed. termination a. Georgia: does not recognize TIC D. Four unities are disturbed. Possession a. freely alienable 4. rule: no severance until the judicial sale actually takes place. TENANCY BY THE ENTIRETY 1. any TIC can force a partition 5. mutual agreement in writing c. rule: each co-tenant has right to possess whole of the property 2. then it results in a TIC. modern presumption is in favor of TIC. title passes from mortgagor to mortgagee. right of survivorship 3. INCIDENTS OF CO-OWNERSHIP 1.

rule: one co-tenant does not have to account to another for his share of the profits. issue: whether co-tenant has to SHARE PROFITS that co-tenant received from the land b. subject to 4 exceptions c. assessments for curbs. agreement to share iii. NON-FREEHOLD ESTATES (4 LL-T estates: Tenancy for Years. Notice 12 . III. ouster: accounting required if co-tenant is either keeping a co-tenant off the property or claiming a right of co-possession ii. ESTATE FOR YEARS 1. contribution required for any mortgage on property that has been signed by all co-tenants iv.a. paying mortgage yes. rule: right to contribution depends on what type of expenditure made on property i. lease of property by co-tenant to a third party iv. concerns right of co-tenant to force the others to pay fair share of expenditures made on property b. depletion of natural resources 3. home improvements contribution no right of yes. beginning date b. but only for ii. repairs (fixing the barn) necessary repairs iii. end date 2. Contribution a. Tenancy at Sufferance) A. one year tenancy may be oral 3. must specify: a. sewers. contribution required toward all governmentally imposed obligations such as property taxes. 4 exceptions i. streets. paying taxes yes. etc. Tenancy at Will. Key phrase specified time i. Periodic Tenancy. Statute of Frauds any tenancy for over 1 year must be in writing i.

rule: no notice required to terminate. then presumed to be a periodic tenancy measured bythe rent payment iii. Either party can terminate at any time. estate rolls on and on.i. rule: If lease doesn¶t specify how long tenancy is to last. Georgia: In GA. notice must satisfy 2 independent criteria: a. ii. periodic tenancy is created by operation of law for period specified in the rent check 4. until one party gives proper notice ii. enough time: amount of time equal to length of tenancy EXCEPT in case of year to year tenancy. implication: if no agreement as to duration a. to be valid. by operation of law ± occurs in 2 situations a. termination by operation of law 13 . which generally requires only 6 months b. tenancy for years presumed to exist if lease period is 5 years or more. no notice required 3. rule: when LL accepts a rent check from a holdover tenant. TENANCY AT WILL 1. periodic tenancy terminates by giving proper notice ii. holdover tenant is a tenant who was on property under a valid lease but the lease has expired ± and the tenant nonetheless remains on the property repeating. B. effective date specified in notice must be at the end of the period. effective date: to be valid. key phrase 3. creation i. without notice. holdover tenant i. 2. Anything less than 5 years is presumed to be a usufruct. PERIODIC TENANCY 1. whenever that period may be C. by express agreement ii. termination i. for period specified in grant 2. oral lease that violates SOF b.

Georgia law requires notice to terminate i. in case of commercial property. assignment by tenant iv. waste by tenant iii. Raised Rent: If LL gives T notice of increased rent b/f expiration of the lease. b. Impose new periodic tenancy a. in case of residential property new period usu. LL may not impose a new PT if it is NOT reasonable under the circumstances (T¶s moving van late by a few hours) iii. Duty to Pay Rent 2. Georgia: In GA. LL may elect to treat tenant as new periodic tenant. transfer of title by landlord v.i. LL must continue to provide utilities until eviction is complete ii. Duty to Maintain Premises 14 . T must give 60 days to tenant must 30 days to LL HOLDOVER TENANT D. TENANCY AT SUFFERANCE 1. LL¶s 2 Options i. then LL may properly demand payment of the higher rent amount E. DUTIES OF THE TENANT 1. month-to-month c. Sue to evict: LL may sue in trespass and to recover for damages a. lease by landlord to 3 party 4. death of either party ii. if expired lease for 1 year or more new periodic tenancy may be yearto-year d. Georgia: while recognizing tenancy at will. new tenancy measured by period covered by rent payment i. LL ii. arises in only 1 situation: refers to bare possession that tenant has over the property when T wrongfully holds over 2. If expired tenancy for less than 1 year.

at CL. LL accepts T¶s OFFER of abandonment i. modern majority view ± once T covenants to repair. Georgia: By statute. CL LL could sue for damages. If LL cannot deliver actual possession. holding T liable for DEFICIENCY i. surrender LL can treat T¶s abandonment as offer to surrender and accepts T¶s offer by retaking premises and terminating lease ii. express covenant by T to repair and maintain makes T an absolute insurer of the property ± w/exception that. ii. LL is in breach of the lease. DUTIES OF LANDLORD 1. T has no further rent obligation b. T will be given option to terminate the lease. If rent LL can get is less than what T obligated to pay. where lease includes covenant to repair a. Duty to deliver premises: LL must deliver possession to T when lease begins. but LL allowed to collect only amount in arrears b. T can RELET premises. T liable for deficiency F. LL must make reasonable effort to relet premises in order to mitigate T¶s damages (no such duty at CL) ii. T liable for everything ± including ordinary wear and tear unless parties¶ agreement expressly excludes this responsibility 3. if leased premises destroyed w/out T¶s fault. T not responsible for ordinary wear and tear b. 7 day grace period for T to pay rent ii. 15 . Under modern majority rule.i. where lease is silent T still subject to CL duty not to commit waste a. TODAY all states allow LL to sue for damages AND to terminate lease. T fails to pay rent a. thereby evicting T from property c. T unjustifiably abandons a. Landlord¶s Remedies i.

Georgia: LL has no duty to repair UNLESS T¶s interest is a usufruct. iv. ii. If this happens. total eviction ± obvious b. T can move out and end the lease.2. T can stay on what¶s left and stay for free ii. PARTIAL EVICTION: occurs where LL physically excludes T from only some portion of leased property i. modern rule: implied warranty of habitability: applies only in the case of RESIDENTIAL property ii. commercial or otherwise. who holds paramount title. T¶s remedies for breach of implied warranty of habitability a. can also occur where some third party. retaliatory eviction: If T lawfully reports LL for housing code violations. make reasonable repairs and deduct cost from future rent payments d. Duty regarding Condition of leased premises i. retakes property and physically excludes T iii. iii. constructive eviction ± occurs where LL fails to provide some service (doesn¶t involve actual 16 . in which case T under no further rent obligation b. warranty obligates LL to provideand maintain leased premises that are reasonably suited for residential use ± usu. Implied Covenant of Quiet Enjoyment i. rent is proportionately reduced to reflect amount taken. In which case. 3. means fit for basic human habitation iii. rule: if partial eviction by someone other than the LL. if LL fails to make necessary repairs w/in a reasonable time. rule: every lease includes LL¶s implied promise not to interfere w/T¶s quiet enjoyment of leased premises. promise is included in every lease ± residential. LL breaches in 1 of 3 ways a. LL is barred from penalizing T. c. T can stay on property and sue for damages c. T can make repairs and deduct.

rule: T is liable to LL for rent IF there is EITHER privity of estate or privity of contract ii. Hypo 55 6. privity of CONTRACT exists only where there is an agreement b/w LL and particular T from who LL seeks recovery iv. of an interest in land. a lease is a contract. creating PRIVITY OF CONTRACT b/w the parties to the lease agreement. Define assignment ± transfer ALL: 2. a lease is also a conveyance of an estate. privity of ESTATE ONLY exists b/w present LL and present tenant iii. i. ii. G. Georgia: T cannot transfer usufruct w/out first obtaining LL¶s consent. thereby creating PRIVITY OF ESTATE b/w the parties 5. Key to answering all assignment questions is to remember that a lease involves BOTH i. Define sublease ± transfer only a part 3. Assignment: Liability of Successive Assignees for Payment of Rent i.exclusion) that LL obligated to provide AND that failure makes property uninhabitable. three requirements to establish constructive eviction 1) must be LL¶s (and not 3rd party¶s) failure to provide some service 2) substantial interference w/T¶s quiet enjoyment of property 3) T must abandon w/in a reasonable time. ASSIGNMENTS AND SUBLEASES (Transfer of LL-T estates) Property aw favors free transferability of interests in land! 1. covenant to pay rent ± always runs w/land and therefore enforceable based on either privity of estate or privity of contract 17 . Assignee¶s Liability on other Lease Covenants i. 4.

Liability of Successive Landlords on Lease: T sues LL i. will T share in condemnation award. common sense approach to test and concern: if performance of covenant (promise) make the land MORE VALUABLE OR USEFUL. other covenants ± general rule: covenant will RUN w/land if it touches and concerns the land a. acceptance of rent also waives clause permanently iv. rule: Original LL continues to be liable to original tenant b/c of privity of K ii. CONDEMNATION OF LEASEHOLD INTEREST: FULL OR PARTIAL 1. 9. not transferred to sublessee which means no privity either way. is T¶s rent obligation excused? ii.ii. Second. Or he may sue for damages if he can prove any H. then covenant touches and concerns the land. NON-ASSIGNMENT CLAUSES (valid and enforceable): i. validity: even though a form of restraint on alienation. hypo 57 8. iii. if T makes an assignment of violation of a nonassigment clause. First. SUBLEASE: Subtenant¶s Liability for Rent i. effect of LL¶s consent to assignment a. 7. However. rule re WAIVER of nonassigment sublease clause: Permission given once means that a nonassignment clause is waived altogether ± unless LL states otherwise at time of giving permission b. sublessor keeps estate. iii. transfer is not void. rule: LL can recover rent from anyone w/whom he is in privity (either estate or contract) ii. rule: in case of a sublease. LL may terminate lease if provided by clause. what it is: clause in the lease that says T may not assign or sublet w/out express consent of LL ii. rule: SUCCESSIVE LLs may be liable to T if there is either privity of K or privity of estate. 18 . today all courts say such clauses are valid and thus enforceable. Two issues arise when state takes property that¶s under a lease pursuant to state¶s exercise of eminent domain i.

2. Partial Condemnation i. To answer. First ISSUE: Does T have to continue to pay rent for that portion of property taken by state? YES a. complete taking extinguishes lease and T is excused from paying any further rent. even if LL neither knows nor has reason to know of such defects. T will get amount equal to rent that was to be paid over remainder of lease for that portion of property that was condemned. T will share in condemnation award only to extent that the fair rental value of the property exceeds amount of rent due under the lease. a. Second ISSUE: Will T share in condemnation award? a. 3. SHORT TERM LEASE OF FURNISHED DWELLING a. scope ± LL must disclose but under no duty to repair ii. I. short term = 3 months iii. Complete Taking i.iii. 5 exceptions i. ii. Continue to pay rent? a. must first determine whether all or only a portion of leasehold property has been taken by the state. Share in condemnation award? a. TORT LIABILTY OF LANDLORD AND TENANT 1. rule: No. LATENT DEFECTS: LL under a duty to disclose latent defects which LL either knows or has reason to know of. rule: a partial taking by eminent domain does not release T from obligation to pay full rent. rule: in the case of a complete taking. latent defect ± defect that T does not know of and a reasonable person in T¶s position would not discover b. b. ii. rule: In case of a partial condemnation. general common law rule: No duty imposed on the landlord 2. COMMON PASSAGEWAYS under LL¶s Control 19 . for bar exam purposes. rule: Rental of a furnished dwelling for a short period of time makes LL liable for defects.

PUBLIC USE EXCEPTION a. regardless of whether LL may be liable as well. 20 . ii. I. iii. 3 requirements to invoke: i. LL must know (or should know) of major defects. FOUR FACTORS are relevant to determine intent: a. courts tend to favor Ts on this point. Therefore. general custom: is this the type of things that sellers or tenants normally take w/them when they leave? THIRD: degree of harm to premises on removal i. v. c. FIRST. LL must know (or SK) that public will be using premises. LL will be liable if LL failed to exercise reasonable care (negligence standard). Where there is NO AGREEMENT. 2. Court treats LL¶s conduct in making earlier repairs as creating deceptive appearance of safety and courts treat this conduct as negligence. NEGLIGENT REPAIRS undertaken by LL a. Rule: Fixtures become part of the real property. analysis turns on INTENT: did the one doing the installing intend that the item of personal property remain w/property as a real fixture? express intent: if express agreement b/w parties. TENANT¶S TORT LIABILITY i. 3. degree of attachment: more that has to be done to remove. b. rule: T ALWAYS liable to 3rd party invitee for negligent failure to correct dangerous conditions the leased premises. more likely there is intent for item to remain w/the property SECOND. iv. terms of the agreement control. 3. Key question: when is an item of personal property to be treated as a fixture? a. 1. FIXTURES A.a. LL must know (or SK) that T will not fix defect. sellers or tenants cannot remove fixtures. b.

FOURTH: trade fixtures: not considered fixtures. 21 . if T can remove item WITHOUT substantial harm to premises. d. courts gen.ii. tenant¶s situation: b/f T vacates at the end of the lease seller¶s situation: seller must remove item before closing ± or seller will lose chattel. e. hypo 69 If item of personal property is not a fixture. b. 4. allow inference that there was NO intent that item become a fixture trade fixtures are items of personal property used in trade or business. WHEN can it be removed? a. i.

easement appurtenant: any time easement DIRECTLY BENEFITS the USE and enjoyment of SPECIFIC PARCEL of land. which is property BURDENED by the easement ± or the servient tenement. be in writing. EXPRESS easement arises from: a. ii. quasi easement ?????? hypo 72 22 . classic example: utility easement B. Classify the easement: 1. a. c. previous use must satisfy three requirements: 1) 2) 3) ii. Method of creation 1. iii.II. previous use by a common grantor i. b. iii. BURDENED PROPERTY: servient tenement BENEFITED property: dominant tenement easements in gross: occurs where there is NO DOMINANT estate b/c there is only ONE PARCEL of land involved. it¶s classified as an easement appurtenant. Key concept: right of use A. express grant of easement to someone else. signed by the holder of the servient estate. reasonably necessary (extremely inconvenient otherwise) IMPLIED easement ± easements by implication arise in 2 ways: a. continuous. apparent (open and obvious). b. and satisfy all deed formalities NOTE: easements of a year or less do not have to be in writing. express reservation of easement when land sold to another person subject to statute of frauds: general rule is that EXPRESS easements must: i. 2. d. 2. EASEMENTS (know creation and termination) NON-POSSESSORY interest in land involving a RIGHT to USE the land. a.

ii. iv. rule: all who subsequently succeed to title to dominant estate become entitled to the benefit of the EA. transfer of easement APPURTENANT ± dominant estate i. 4 requirements i. ii. TRANSFER OF EASEMENTS 1. transfer of easement IN GROSS i. in the case of an EA.b. b. seasonal use may satisfy requirement use is visible and notorious use is without owner¶s permission ± oral permission enough to destroy hostility needed to establish a prescriptive easement GEORGIA: Statutory period for a prescriptive easement is 20 years for wild land ± and 7 years for improved land. Transfer of SERVIENT estate ± burden of the easement a. iii. 2. EASEMENT BY NECESSITY: absolute right of access rule i. ii. 1) iii. owner of servient estate can choose location of easement so long as choice is a reasonable one 3. ii. easements in gross that are commercial can always be transferred easements in gross that are personal cannot be transferred. EA cannot be TRANSFERRED separately from dominant estate. C. whether or not easement is mentioned in deed. use must be hostile/adverse to true owner. use must be continuous and uninterrupted (lasting for the specified statutory period). Transfer of BENEFIT of easement a. benefit is TRANSFERRED AUTOMATICALLY along w/the dominant estate. easement by PRESCRIPTION a. v. rule: easements are always binding on subsequent holders of servient estates ± even if the easement is not specifically 23 .

3. where easement is silent: 2 presumptions a. 6. rule: reasonable development is that development which would likely have been contemplated by the parties at the time the easement was granted. FIRST: unless otherwise specified. 3. to be valid. 5. ii. remedy for excessive use: enjoin excessive use but do NOT terminate easement rule: benefit holder (dominant estate) responsible for making repairs rule: benefit holder always has right to enter servient estate to repair easement rule: holder must make reasonable reservation of servient estate a/f making repairs rule: unless easement says otherwise. holder of servient estate has no repair obligation Estoppel a. SCOPE OF USE OF EASEMENT 1. b. 4. representation of relinquishment of estate by holder of dominant estate holder of servient estate must make a change in position in reliance on that representation E.mentioned in the deed of conveyance ± provided subsequent holder had NOTICE of the easement. 4. rule: specific terms of the easement control. SECOND: use presumed is that of reasonable development of dominant estate i. easement is presumed to be perpetual ± it lasts forever. Necessity Destruction Condemnation Release (Deed of) a. D. release must be in writing rule: mere non-use does not constitute abandonment Abandonment by Action a. 24 . 2. 2 requirements i. 2. 2. F. REPAIR OF THE EASEMENT 1. 3. TERMINATION OF EASEMENT (END CRAMP) 1.

license becomes irrevocable. 3. limited privilege to USE land in possession of licensor Not a property interest contract right revocable at will of licensor if revocation wrongful. RESTRICTIVE CONVENANTS AND EQUITABLE SERVITUDES A. implied easement will automatically terminate 7. intent must be manifested by holder of dominant estate taking some physical action that would show intent to abandon rule: when dominant and servient estates come together in same instrument. easement is terminated rule: once necessity gave rise to an implied easement ceases to exist. a license is created second rule: if money spent on property in furtherance of an oral license. b. Prescription a. RCs fall into 2 categories 25 .b. c. 2. 3. licensor may have to pay contract damages rule: ticket holders don¶t acquire any property rights in the ticket. e. b. PROFITS 1. 8. Restrictive covenant gives holder the right to restrict some third party in the use of third party¶s land 1. a. H. gives right to go on land of another and take away a natural resource along w/profit goes implied easement to go on land use easement rules to analyze issues involving profit III. but may sue for damages for breach of K. G. LICENSES tickets ± all tickets are licenses. d. 1. EASEMENTS FOR VIEW AND SUNLIGHT 1. first rule: if easement is attempted but FAILS due to SOF. 2. IRREVOCABLE LICENSES a. Merger (Unity of Ownership) a. one rule: no implied easements for view or sunlight what is a license? a. I.

INTENT: parties must intend that restriction run with the land NOTICE ± to person a/g enforcement sought a. covenant running w/land at law. equitable servitudes both involve a WRITTEN PROMISE that imposes a restriction on the use of land. b. actual notice CONSTRUCTIVE notice: notice given b/c restriction contained in deed that is duly recorded in buyer¶s direct chain of title inquiry notice CR: conveyancing and recording rule: if performance of covenant/promise makes land more valuable or useful. a. Successors must take entire estate held by predecessor AND HORIZTONAL PRIVITY: refers to original parties to the promise 1) these 2 parties must share some interest in land independent of the covenant B. 2. covenant touches and concerns the land As used here. TOUCH & CONCERN LAND PRIVITY: Who is SUCCESSOR IN INTEREST? a. ii.a. d. is SII is P. c. 2. b. 4 Requirements to enforce a restrictive covenant at law (PINT) 1. If facts show that SII is D. ONLY DIFFERENCE is theory used to ENFORCE the terms of the restriction. e. 3. c. 26 . know that P is trying to establish that BURDEN of covenant runs to and binds D VERTICAL privity: refers to those who subsequently obtain property subject to covenant. person trying to establish that the benefit of the covenant runs to P. b. d. BURDEN: SII is D ± requires both V and H privity i. 4. privity refers to a conveyance b/w the parties Two kinds of privity: vertical and horizontal to determine what kind of privity: distinguish benefit and burdens of covenant in other words. who is successor in interest? i. ii.

1. 2. VERTICAL privity: on benefit side. intent touch and concern This doctrine is relied on to allow EACH LOT OWNER in residential subdivision to enforce a restriction on use a/g every other lot owner in the subdivision. 3. 6.2) f. RECIPROCAL NEGATIVE SERVITUDE 2. 1. intent notice C. to establish HP. 4. . 3. 2. vertical and horizontal hypo 88 hypo 89 intent touch and concern privity ± vertical ONLY Hypo 90 D. 2. 1. hypo 93 27 G. 5. 4. EQUITABLE SERVITUDES: 3 requirements to obtain an INJUNCTION to enforce BURDEN of promise as an ES 1. NO HP required ii. 4 requirements to enforce BURDEN of a COVENANT: SII is D touch and concern privity a. only 2 requirements to enforce a BENEFIT of a covenant as an ES 1. INTENT that restriction be enforceable by SII restriction must TOUCH AND CONCERN the land NOTICE to subsequent purchaser NO PRIVITY is required to enforce promise in equity as an ES F. 2. 4. must be a conveyance of property b/w original parties BENEFIT: SSI IS P i. 3 requirements to enforce BENEFIT of COVENANT AT LAW: SII IS P E. by contrast. 3. rule is: holder of any succeeding possessory estate may enforce the benefit of the promise as a covenant at law.

true owner loses title to the property. (v) and for the statutory period of ____ years. Deed of Release Merger ± Unity of Ownership CHANGED CONDITIONS a. inquiry b. there is a COMMON SCHEME of development: i. 4. then use restriction will be eliminated IV. To establish title by adverse possession. 5. (iv) hostile. ADVERSE POSSESSION Where a statute of limitations in EJECTMENT cut¶s off true owner¶s RIGHT to RECOVER POSSESSION of her LAND. CHONAE A. 2. rule: if all lots in entire subdivision are affected. Six Requirements ± HELUVA 28 . (iii) continuous. 3. b. TERMINATION OF COVENANTS AND SERVITUDES 1. unclean hands: P has made same use of her property acquiescence: P let other neighboring landowners do same thing on their lots laches: P sat by while D built office building and only complained a/f building project was completed estoppel: P represented that she had no problems w/D¶s plans to construct an office building H. distinguish DEDICATION DEFENSEs to enforcement of covenant as an equitable servitude a. X must show that possession was (i) open and notorious (ii) actual and exclusive. iii. NOTICE i. an equitable servitude (negative covenant enforceable by injunction may be IMPLIED where: a. CS may be proven by evidence of INTENT to impose a SERVITUDE (restriction on use) on ALL land in the subdivision no actual notice CONSTRUCTIVE (or record) notice: Purchaser on record notice if restriction is contained in buyer¶s chain of title.3. c. ii. ISSUE is whether X being on true owner¶s land is merely a trespass or whether X has obtained title to the land by adverse possession. d. Once this statute runs. IMPLIED RECIPROCAL NEGATIVE SERVITUDE ± when developer subdivides land into several parcels and some deeds contain negative covenants and others do not.

and all other requirements of AP satisfied. Lasting: a. adverse possessor. true owner. first rule: amount of land actually possession must bear a reasonable relation to the whole. Exclusive: X must be excluding others from possessing the property. ii. b. which means parcel of land must be one seamless whole 2. but claim is not valid 29 . b. 3. Uninterrupted: kind of continuous use that an ordinary owner would make Visible: X¶s use and possession of property is out in the OPEN Actual: a. 4. X must ACTUALLY POSSESS land to obtain title 2 exceptions i. second rule: property must be unitary. 2 things NOT required a. constructive adverse possession leased land 7. use CL rule of 2 years GEORGIA: SOL of AP is 20 years UNLESS adverse possessor has written evidence of title. Statutory period runs. b.1. b. good faith is required in order to establish AP B. GEORGIA: In GA. Hostile: X is on land w/no right to be there. hypo 96: X goes on to property under color of title to a 100 acre farm. 6. doesn¶t have to know what he¶s doing 8. but actually possesses only 85 acres of the farm. O. in which case period is 7 years. c. doesn¶t have to know what¶s going on X. 2. 3. a. possession must LAST for STATUTORY PERIOD if no time period specified. CONSTRUCTIVE POSSESSION ± First exception to Actual Possession Requirement 1. 5. color of title: X makes some claim to title to land. rule: D of CAP expands kernel actual possession out to the full extent of the color of title under which AP makes his claim of right to the property two limitations a.

LEASED LAND: 2nd exception to actual possession requirement 1. 2. it will not keep clock from running. 3. TACKING 1. 2. 3. What has X obtained? X obtains 85 acres that X actually possessed and X gets other 15 acres b/c of D of CAP. AP and FUTURE INTERESTS FSD and Possibility of Reverter a. G. DISABILITIES: THREE Is 5. 2. rule: an adverse possessor can tack together successive periods of AP in order to satisfy statutory period no gaps in possession! Infancy Incarceration Insanity RULE: if a true owner is suffering from any of the three disabilities at the time the period of AP begins. FSCS and Right of Reentry a. title went automatically back to grantor (on POS) when condition operated rule: in case of FSCS. rule: NO AP a/g co-tenant UNLESS co-tenant in possession excludes other co-ts from possession and statutory period runs exclusion/ouster starts running of the clock for purposes of AP Life Tenant and Remaindermem a. C. 30 . rule: in case of FSD. Rule: AP clock does NOT start to run a/g holder of a FI until that interest becomes possessory. 2. Under law of future interest.b. E. 4. If disability was in existence on day AP beings. then clock for AP will NOT start to run until true owner is free of disability Intervening Disability a. F. rule: does NOT STOP clock. clock will not start to run until grantor exercises right of reentry D. 1. AP AGAINST CONCURRENT OWNERS 1. 1. rule: leasing land to a 3rd party constitutes possession for purposes of AP. happening of the condition starts the clock running for purposes of AP.

b. BACKGROUND a. V. or to satisfy 2nd requirement: look for B to take possession AND i.b. No tacking of disabilities H. GEORGIA: In GA. K of sale of RP governed by K law principles (CROSSOVER) K exists from moment signed until deed is transferred at closing. or B built improvements. To make it marketable title. at the closing comes the actual conveyance ± at which time real property concepts control once again. CONTRACT OF SALE & ESCROW PERIOD 1. even if disability not in existence at time period of AP began. comes the contract of sale. ii. rule: Any K for sale of any interest in RP must be in WRITING and signed by the one who is sued signed writing must include: i. ii. b. Later. ii. oral K must be certain and clear. SOL tolled during period that true owner is suffering under a disability. this time period is referred to the escrow period (K principles apply during escrow period). 2. b. DOCTRINE OF PART PERFORMANCE: EXCEPTION TO SOF a. iii. 6. c. description of property name of parties price STATUTE OF FRAUDS a. CONVEYANCING Conveyancing is a 2-step process: First. must be a court action to quiet title. A. 3. 31 . NO AP AGAINST GOVERNMENT LAND I. and acts of partial performance must prove up existence of a K B paid full or close to full purchase price. 2 requirements i. TITLE ACQUIRED BY AP IS NOT MARKETABLE 1.

no mortgages. no restrictive covenants. DEATH OF A PARTY BEFORE CLOSE OF ESCROW a. ii. iii. marketable title: title that reasonably prudent B would accept. equity will still order SP of the contract if necessary. At common law. GEORGIA: In GA. payment of full purchase price possession of prop along w/ partial payment of purchase price. b. rule: B/c of doctrine of EC. RULE: Every land sale K contains an implied warranty that S will deliver marketable title to B at close of escrow i. under this doctrine. does not have to be perfect proof of title: give B some tangible evidence of title title free of encumbrances: S must give B title free of encumbrances ± that is. the buyer bears the risk of loss. MARKETABLE TITLE a. b. of prop along w/substantial improvements to property 4. acts of part performance that are sufficient to allow specific performance consist of: i. etc.iii. no options.IS THIS RIGHT??? valid legal title as of date of closing: S must give buyer valid legal title on day of closing rule: B must NOTIFY S of any defect in title and allow S reasonable time to cure defect ± even that means postponing closing for 1 day 5. or poss. 32 . If B determines TITLE IS NOT MARKETABLE? i. which means minor defects do not matter. to satisfy this warranty: S must provide B w/3 things i. in general look to see that B took possession of property and then took some further action (in partial performance of the K) that clearly proves up existence of a K c. no easements. 6. buyer bears risk of loss. and therefore. c. ii. once k is signed equity treats property as the buyer¶s land. if either party dies before closing. RISK OF LOSS: DOCTRINE OF EQUITABLE CONVERSION a. ± other than those that have previously been disclosed to buyer . iii.

If defects in title can B rescind? a. MEASURE of damages is DIFFERENCE b/w K price and value of property as of date of breach LIQUIDATED DAMAGES: LD clause is provision that says B¶s deposit can be forfeited in event of B¶s breach. ii. rule one of Caveat Emptor: B cannot recover from S. Generally speaking. DAMAGES i. no problem as long as performance rendered w/in a reasonable time (2 months) K says otherwise. or facts make clear that parties intend that time is of the essence rule: Time is NOT of the essence in land sale Ks UNLESS: i. K will specify date for closing. B¶s Remedies for S¶s failure to deliver marketable title i. ii. if one party fails to perform on date specified i.d. b. CL exception ± actively concealing defects 33 . b. 8. d. REMEDIES FOR BREACH OF K FOR SALE OF REAL PROPERTY a. SPECIFIC PERFORMANCE i. c. at CL. iii. e. walks away damages for breach of K: measure by difference b/w K price and value of property as of date of breach specific performance: coupled w/a reduction in the purchase price to reflect defects in S¶s title 7. 9. TIME OF PERFORMANCE a. DEFECTS ON PROPERTY AS OF DATE OF CLOSING . rescission ± B rescinds. ii. which means it should not exceed 10% of K price available to both buyer and seller b. if K includes TOE clause and it¶s violated? rule: party who FAILED TO PERFORM no time is in BREACH of K and cannot enforce K. Clause will be enforced so long as amount is reasonable.

deed itself is subject to SOF. ii. K merges into deed and all K provisions extinguished UNLESS: i. Thus. OR included in the deed itself rule: TWO requirements must be satisfied for DEED to PASS to TITLE: a. a. GEORGIA: Required deed by properly attested in order to be recorded. means that there must be a writing signed by the seller. modern trend: impose duty to disclose to prospective B serious defects in property that S knows of and which are not obvious to B. 3. rule: AT CL. builder will be liable. must be 2 witnesses in order for deed to be properly attested and one must be a NOTARY. DEED FORMALITIES 1. B. if builder-seller conceals defects.i. modern rule ± implied warranty of fitness: i. implied warranty of fitness (or merchantability) that applies ONLY to sale of new residential housing by a builder-seller CL rule of caveat emptor applies in all other situations ii. ii. GEORGIA: GA law has not adopted implied warranty of habitability in case of sale of new housing by builderseller. However. now majority rule in cases involving residential property in majority of states today. b. iii. on closing. b. d. S cannot actively conceal such defects. EXECUTION a. 2. ii. contract is extinguished. EXECUTION DELIVERY Statute of Frauds i. rule: once deed accepted at closing. K specifies they survive at closing. c. just like K of sale. while S has no obligation to disclose any defects to B. 34 . RULE: deed must describe land w/sufficient accuracy in order to pass title.

Returning deed to grantor has no effect on title. hypo 112 & 113 rule: parol evidence may be used to clarify deed description land description by metes and bounds will control over description by acreage or any other description DELIVERY OF DEED a. iii. What if grantor hands over deed BUT tries to CONDITION delivery on some event? FIRST: delivery of a future interest i. v. if you can¶t ID property. no physical transfer is required. 5. means description must enable you to ID property that is being transferred. parol evidence may be used in showing intent of grantor. CONDITIONAL DELIVERY PROBLEMS a. c. This is a valid delivery of a future interest. b. once DELIVERY occurs. presumption of NO delivery which may be rebutted by grantee. RULE: legal test for delivery is solely a question of whether grantor had necessary INTENT to pass title. then deed is VOID for VAGUENESS and nothing gets transferred. title passes. d.i. no conveyance of title takes place i. ii. if grantor fails to deliver deed during his lifetime.´ plurality rule: ignore condition and consider complete ii. 35 . but not until I die. 4. b. e. this won¶t become effective unless you kill G. O: life estate A: vested remainder in fee simple SECOND: oral conditions ³X to H´ but in handing over deed X tells H ³of course. 1) 2) c. rule: recording deed raises presumption of delivery. i. hypo 116: ³To A. even if grantee knows nothing about deed. iv.´ and deed is handed to grantee.

grantee gets property 6. grantor cannot get deed back. 3 PRESENT Covenants ± PRESENT covenant is breached.d. Quitclaim Deeds a. DELIVERY MUST BE ACCEPTED a. These 3 are personal covenants and do not run w/the land. Grantor instructs escrow agent to deliver deed to grantee when condition satisfied once grantor delivers deed to escrow agent. Covenant against Encumbrances 1) 2) 36 . i. rule: delivery of a deed is valid only if accepted. if at all. and therefore B can sue on a present covenant IMMIEDIATELY. CONSIDERATION is not required in order for deed to be valid. rule: acceptance implied ± unless facts show otherwise. Covenant of Seisin Covenant of Right to Convey 1) these two covenants represent S¶s promise that S has title and possession and can validly convey both S promises there are no encumbrances ± other than those previously disclosed to B. iii. C. 2. grantor makes no promises re: TITLE If grantor makes any promises re: title. b. as long as grantee satisfies condition. at moment conveyance is made. called covenants for title. c. 3. THIRD: delivery conditioned on grantees¶ payment of purchase price i. COVENANTS OF TITLE 1. rule: this type of conditional delivery valid provided: 1) 2) 3) grantor makes delivery to 3rd party in escrow. ii. General Warranty Deeds ± deeds that include 6 traditional forms of covenants for title a.

b. A future covenant is breached. i. at some later date when GRANTEE IS DISTURBED IN POSSESSION. a. 1. if at all. 3 FUTURE Covenants. courts say grantor gave an implied covenant that title will be conveyed to grantee. D. S promises to do whatever is necessary to pass title to B. grantee can sue to compel transfer of title RULE: Sale to a BFP will cut off rights of an earlier grantee and therefore will cut off grantee¶s right to rely on estoppel by deed doctrine. Future covenants run w/the land and therefore can be enforced by all subsequent purchasers. ii. b. Subsequent Sale to a BFP: confusing E. under this doctrine. Covenant of Warranty Covenant of Quiet Enjoyment 1) these 2 represent S¶s promise to protect B a/g anyone who comes along later and claims paramount title to property If S omitted something required to pass valid title. ESTOPPEL BY DEED DOCTRINE defined: a. 2. means that testamentary gift fails ± and it will NOT be replaced by other property 37 . P¶s damages will be limited to amount of purchase price received by the warrantor + incidental damages damages = purchase price + incidentals b. damages rule: where there is a breach of warranty. ADEMPTION a. gift is adeemed.future covenant is NOT breached immediately. BREACH of a covenant of title a. CONVEYANCING BY WILL 1. rule: if will purports to devise specific parcel of land. therefore. GEORGIA: Rule is that all 6 covenants of title run with the land and therefore can be enforced by any subsequent purchaser. 4. b. Covenant of Further Assurances 1) iv. but testator does not OWN at time of death. iii.

AT COMMON LAW. 3. b. Property will pass to devisee free of lien. hold legal title to real property. by a settlor who TRANSFERS TITLE to real property to a TRUSTEE. MODERN RULE: states adopted anti-lapse statutes that prevent lapse by allowing gift to pass to certain relatives of predeceasing beneficiary. LAPSE AND ANTI-LAPSE STATUTES a. F. must act in accordance w/Settlor¶s written instructions. lien must be exonerated from testator¶s estate. b. who holds and manages property subject to a FIDUCIARY DUTY to use highest care and skill for benefit of BENEFICIARIES OF a trust CREATION of a trust: trust can be created intervivos by deed OR ± by a will at death. 2. private trust is: i. TRUSTEES a. 3. ii. gift in will LAPSED ± that is. 38 . Trusts and RAP a. OWNERSHIP INTERESTS IN TRUST 1. EXONERATION a. subject to fiduciary duty if trustee dies. What is a TRUST? a. c. devisee will receive proceeds from sale of property if devised property is subject to a mortgage. d. b. exception: ademption doctrine does not apply to a gift of property that subject to an executory contract of sale (in escrow) at time of testator¶s death. created in writing.c. iii. instead. court can appoint a substitute. EXPRESS. Devisee entitled to have lien paid off from testator¶s residuary estate. iv. Trust IS subject to RAP. 2. Growing trend is to abolish this doctrine. 4. c. if beneficiary died BEFORE testator. gift was void.

B. 2. hypo 120 defined i. 4. as it did earlier«. ii. How does recording occur? a. a. c. PURPOSE: to CHANGE common law rule of ³first in time. RECORDING only serves to give notice of terms of the deed. An unrecorded deed is just as valid as b/w original parties as a recorded deed. noting the name of grantee. if SP does not satisfy requirements of applicable recording statute. first in right ± AND under CL rule. second step: clerk then indexes information in 2 indices: i. clerk then makes note of volume and page number where copy of deed can be found. SPs always lose. RECORDING RETENTION of interests in real property once such interests are acquired is what fundamentally distinguishes real property from personal property. first in right´ in order to PROTECT the interests of SUBSEQUENT PURCHASERS in certain situations generally. then just apply CL rule ± first in time. 3. grantor index: clerk lists transaction alphabetically by grantor. 39 . rule operates in exactly same manner in case of trusts. MECHANICS OF RECORDING 1. do NOT have named individuals as beneficiaries instead. REMEMBER: charity to charity exception to RAP applies cy pres doctrine: court may alter terms of a charitable trust in order to further Settlor¶s intent VI. ESSENTIAL PURPOSE OF RECORDING STATUTES 1. b. purpose is to let SP keep property ± provided that the SP can meet requirements of the applicable recording statute. A. 5. c. beneficiaries of trusts are EITHER established charities OR large groups of persons CHARITABLE TRUSTS b. and citing to volume and page number 5. i. a brief description of property.b. First step: court clerk files a copy of the deed in a book.

and are the FIRST to RECORD b. RACE-NOTICE jxn a.ii. donees. b.e. a purchaser who takes without notice of the earlier transaction. ii. BONA FIDE PURCHASER RULE: A BFP is a bonafide purchaser for value who takes without notice 1. 3. NOTICE ± 3 kinds 40 . or devisees) can shelter under the rights of BFPs. GEORGIA: a race-notice jurisdiction D. ANY considerations that is out of pocket is enough to be considered value bargain basement sale: if purchaser pays way below FMV. 2. Purchase for VALUE a. i. 1. RACE jxn: a. sole inquiry is notice and therefore a notice statute protects a subsequent purchaser for value who takes w/out notice of the earlier conveyance. d. recording is only important to the extent it imparts constructive notice notice irrelevant rule: whoever records FIRST keeps property protects all subsequent grantees who are BFP for value who i. 2. RECOMMENDED STRATEGY FOR IDENTIFYING RECORDING STATUTE E. devisee or doness cannot be a BFP and therefore cannot prevail over the claim of an earlier grantee shelter rule EXCEPTION: anyone (even heirs. grantee index: same info alphabetically by grantee C. notice statute protects subsequent grantees who are Bona Fide purchasers. 4. c. take WITHOUT NOITCE. donee or devisee: RULE: one who purports to take property as an heir. b. EXAMPLES OF RECORDING STATUTES F. purchaser paid sufficient value to qualify as PFV transferee is heir. c. rule: unless there is an explicit claim of fraud. DIFFERENT TYPES OF RECORDING ACTS NOTICE jurisdiction: a.

the SP must examine the land and must make inquiry as to any unexplained uses or possessions. TITLE SEARCHING 2. INQUIRY notice i. ii. RECORD notice i.a. deed must be recorded in buyer¶s direct chain of title ± so that SP can find it and inspect it in order to be a BFP who takes w/out notice. b. and so on. Adverse each link ± using GRANTOR index a. SUBSEQUENT INTERESTS PROTECTED BY RECORDING STATUTES 1. c. VII. mortgages CR: hypo 133 rule: judgment creditors are NOT protected by recording statutes judgment creditors TITLE SEARCHING AND PROBLEMS WITH CHAIN OF TITLE 1. a. SP will be charged w/notice of whatever such a physical inspection of property would reveal b. going back in time for whatever period required by marketable title statute look up name of last grantor in chain of title just constructed and see if that person recorded any interest in the property. G. look up seller¶s name and find name of seller¶s grantor. b. starting from the time they got the property until the time they passed title on the next link in the chain of title specifically. then SP is not a BFP i. 41 . shelter rule exception: anyone even those w/actual notice can shelter under rights of a BFP constructive notice arising from the record to impart record notice. generally protects subs. 2. ACTUAL: had actual notice of prior unrecorded conveyance. c. ii. then look up name of that person¶s grantor. look to see if grantor placed any encumbrances on the property repeat search for each grantor A. subsequent mortgages MBE fav a. Construct a chain of title ± using GRANTEE index a.

who holds the deed of trust until the loan is paid in full. 2.3. Where security deed is used. A. sale leaseback w/option to repurchase given by debtor to a third party trustee. 2. first RULE: where reading of deed on record discloses an unrecorded txn. DEED OF TRUST LAND SALE CONTRACT: installment land sale K refers to arrangement where debtor signs K promising to make payments to seller/lender BUT seller keeps title to property until loan is paid in full GEORGIA: GA permits use of a deed to secure a debt. Recording outside Chain of Title Role of Inquiry notice in title search a. SECURITY INTERESTS IN REAL PROPERTY A ³security interest´ in real property is a device used to secure a loan on the property. the loan is reflected in promissory note given by borrower and the security interest is reflected in a separate written instrument. DEEDS RECORDED TOO LATE 1. MORTGAGE a. title searcher only looks at grantor¶s actions during period of record ownership B. grantor/borrower owes grantee/lender money and gives grantee a deed that is absolute on its face. Concept of Legal Blinders a. DEFINE 3 DIFFERENT TYPES OF SECURITY INTERESTSS 1. b. 3. Typically. b. grantee promises to reconvey land to grantor when debt is paid d. given by the debtor (MORTGAGOR) to the creditor (MORTGAGEE) if the loan is not paid in full. VIII. Separately. sheriff sells land at a courtordered foreclosure sale equitable mortgage: absolute deed w/separate promise of reconveyance i. 42 4. title passes to grantee/lender until debt is paid off. a. c. SP must make a physical inspection of the property and must investigate any unexplained possessions or unexplained uses of the property. SP has to make inquiry in order to take w/out notice and qualify as a BFP second RULE: remember ± to qualify as a BFP without inquiry notice. .

statutory right of redemption: half states allow mortgagor/borrower a statutory right to redeem for some fixed period of time AFTER the foreclosure sale (usu. even if other mortgages are recorded first b. waiver i. RULE: at any time ± right up until moment of foreclosure sale ± debtor can redeem property by amount that is due and payable ± the amount in arrears (plus interest) ± UNLESS mortgage includes an ACCELERATION CLAUSE acceleration clause i. senior mortgage may agree to subordinate to a junior mortgage PMM is mortgage taken out to BUY the property rule: PMM receives priority over any other mortgages executed at about the same time. c. Purchase Money Mortgage i. Foreclosure by Public Auction Sale Priorities on Payments of Multiple Mortgages a. 6 months to 1 year) 2. PRIORITY allocated based on CL rule first in time. ii. if a mortgage was not recorded or recorded too late. c. 43 . Debtor must pay off ENTIRE BALANCE of mortgage in order to redeem the property RULE is that right of redemption cannot be waived in original mortgage or Deed of trust ± BUT can be waived later attempt to waive in original mortgage called clogging b. if mortgage includes this. PROTECTIONS OF MORTGAGES AND DEEDS OF TRUST 1. 3. Debtor¶s Right of Redemption ± Equity of Redemption a. e. RULE: where multiple mortgages on a single property. may have to apply terms of applicable recording statute to determine how to allocate priorities apply recording statute like you would a deed priorities changed by K ± voluntary subordination i.B. ii. d. UNLESS order changed by terms of applicable recording statute therefore. d. first in right.

such as a bank RULE: if mortgagor does anything to increase a senior mortgage. If they are NOT made party to any fc. C. even though courts hostile to them Mortgagor¶s (Grantor¶s) Transfer of Property a.iii. c. S can cancel K. then that senior mortgage loses its priority over junior mortgages ± BUT ONLY to the extent of the modification Changes in Senior Mortgages i. grantee¶s personal liability on mortgage: not personally liable unless grantee specifically assumes mortgage REMEMBER: mortgage still has to be paid or mortgagee will foreclose on property. PMM by seller gets priority over PMM given by a third party lender. pay costs of fc pay off mortgage foreclosed on pay off jr. Payment of Proceeds from a FC Sale a. c. interests in order of priority pay any remaining balance to mortgagor/borrower 6. TRANSFER OF SECURITY INTERESTS IN REAL PROPERTY 1. 4. f. 44 . interests not eliminated by fc. grantee automatically take property subject to mortgage. then jr. keep all monies paid to date. 5. 1. Foreclosure eliminates Junior Interests a. Anti-Deficiency Statutes forfeiture clause: if debtor misses payment. b. they continue in place and buyer will take property subject to senior interest protections to folders of jr. RULE: whenever grantor transfers title. jr. b. interests are a necessary party to any fc proceeding. LAND-SALE CONTRACTS D. So grantee is subject to losing property in a fc sale. d. RULE: Foreclosure wipes out all junior interests BUT fc does not wipe out senior interests. 2. b. and retake property enforceability of forfeiture clause: will be enforced. interests: have right to pay off mortgage being foreclosed on in order to keep interests from being wiped out i.

d. RIGHTS OF SUPPORT A. 3. 3. entire balance of the loan becomes immediately payable and due. if fixture is not made in a timely manner. MAJORITY RULE: RIPARIAN RIGHTS 45 . 2. SUBJACENT SUPPORT: Support of Surface from the BOTTOM 1. b. On the other hand. 2. S may the fixture remove w/out regard to priority of earlier mortgage ± the earlier security interest on the property. 3. LATERAL SUPPORT: support from both SIDES 1. 2. Mortgagee¶s (Creditor¶s) Transfer of Note: a. then S¶s security interest in the chattel is subordinate to earlier mortgage. if S of that chattel made that UCC filing in a timely manner. c. IX. RIVERS AND LAKES 1. any modification of obligation by creditor/mortgagee and grantee will relieve original borrower of liability rule: mortgagee can freely transfer note and mortgage will always follow note is secures says that if mortgagor transfers property w/out mortgagee¶s consent. rule: seller of a fixture who provides a purchase money security interest in the chattel must make a UCC article 9 fixture filing w/in 20 days after attachment. WATER RIGHTS A. rule: landowner has right to have her land supported by adjoining landowners and strict liability results if land is not supported rule: strictly liable only if land would have collapsed anyway. rule: surface owners have right to have their land supported from bottom and strict liability will result if land is not supported scope of right of subjacent support: right extends to land and to IMPROVEMENTS existing on land as of date mineral rights were severed in fee simple X. E. even w/out buildings on it Problems involving right of subjacent support arise a. SECURITY INTERESTS IN FIXTURES 1. 2. where the MINERAL RIGHTS have been LEGALLY SEVERED from the SURFACE RIGHTS B. Due on Sale Clauses a.

c. modern courts allow landowner to take REASONABLE MEANS to deal w/surface waters 2. c. impossible to follow this approach as a practical matter and still make productive use of the land therefore. rule in Georgia is that a landowner may take out up 100. rule: First in time ± takes! general rule: first person who makes beneficial use of water from a lake or stream has that right protected a/g those who come later. so long as use continues priority in time determines all rights MINORITY RULE: PRIOR APPROPRIATION c. 46 . although landowner must use it on property and NOT export it elsewhere GEORGIA: By statute. ii. C. 2. UNDERGROUND WATER (percolating or well water) rule: landowner entitled to make reasonable use of ground water. rule: landowner can do anything he wants w/floodwater ± reasonable or not surface water is a common enemy and any owner can change its course to get rid of it GEORGIA: Georgia appears to follow natural flow approach. NATURAL FLOW a. b. d. a. riparian refers to those whose property borders on lake or stream rule: DOMESTIC use: riparian owner may use ALL water needed for domestic use rule: NON-DOMESTIC use: riparian owners limited to standard of reasonable use for non-domestic purposes GEORGIA: Georgia is a riparian rights jxn. SURFACE WATER (runoff or flood water) 1. B.000 gallons of water a day w/out first obtaining a permit. b. natural flow approach requires a landowner NOT to make any changes at all in flow of flood water as it rushes across surface of land i. 1. in theory. 2.a. b. COMMON ENEMY APPROACH a.

47 .