PROPERTY LAW:

Ownership v possession:

1. Individuals and corporations hold different:

a. Legal interest, or
b. Legal rights
Regarding property.
2. Ownership v possession

OWNERSHIP:

 The strongest – and most legally protected – right.

 Absolute right of the owner. Legitimation to claim to an object / land
 It means to own the object / land – subject to certain legal restrictions to enjoy, occupy,
posses, rent, use, give away the property –
 It gives the owner the right to possession.
 Transfer of ownership is a complex process and involves a conveyance.
 Different than possession

POSSESSIOIN:

 Physical control of an object

 Possessor has a better claim to the title of the object than anyone, except the owner himself.
 Continuous exercise of a claim to exclusively possess and use the object.
 It does not include the right of ownership.
 “prima facie evidence” of ownership

REAL PROPERTY VS PERSONAL PROPERTY

1. Law recognizes two distinct classes of properties

a. Real property
b. Personal property
2. The distinction is based on the rights that can be enforced either against
a. The land
b. A person for the value of the property.

Real property:

 “Real” derives from early legal history, when rights to recover specific property were known
as “real” rights attaching to the property itself.
 “land” means both:
o “corporal hereditaments”: tangible property that can be inherited, such as mines,
minerals, buildings…
o “Incorporeal hereditaments”: conceptual rights that exist “only in contemplation”
but can still be inherited, such as esement’s, rights to possess, sale, lease, and
enjoy…
o Civil law defines real property as “immovable property”, which includes the land,
everything that its attached to it and rights that “run with the land”
o The asset cannot be moved without destroying or materially altering it
o Examples:

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  Property that is fixed to earth, such as a plot of land or a building
constructed over such plot of land.
 Even if apparently movable: heavy machinery that cannot be moved from
property without destroying or altering it.

Personal property:

 Defined negatively as anything that is not real property.

 Concept defined under English law more widely than in civil law.
 Civil law defines personal property as “movable property”
 Examples: boats, clothes, furniture, cars and any other movable item that are not attached
to real estate.
 Can be moved or transported
 Types:
o Corporeal movable assets:
 Tangible from such as aircraft, cars, goods, raw materials, inventory, works
of art..
o Incorporeal movable assets:
 Intangible personal property having value but lacking personal substance
such as payment credit rights against insurance company; intellectual
property rights of an author in respect to his/her book; imagine rights in
case of celebrities.

Fixtures and fittings:

Every item in land is either a fixture or a fitting.

 Fixtures: are objects affixed to land or to a building so as to become part of the land or
building
o In effect, anything attached to the land becomes part of it and can not be removed.
o Example: cupboards, plumbing, electronic sockets, security alarm, radiators,
fireplaces, doorbells.
 Fitting: It is an object with its own identity and which is not attached to the land.
o Will not, automatically, pass with the land
o Seller or tenant can remove it
o Examples: beds, sofas, curtains, blinds, tables, mirrors, fridges and freezers, washing
machines, lamps.

FREEHOLD AND LEASEHOLD.

 Freehold:
o owner of a freehold (freeholder) owns the property and the land it stands.
o For unlimited period.
 Leasehold:
o Owner of a leasehold (leaseholder) owns the property but not the land on which it is
build (this Is owned by the freeholder).
o For a limited period
o Once the leasehold expires, ownership of the property passes to the freeholder.

OTHER INTERESTS IN LAND: EASEMENTS:

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  An easement holder has the right to use another’s tract of land for a special purpose but has
not right to possess or enjoy that land.
 It is presumed to be of perpetual duration unless the grant specifically limits the interest.

Types:

 Affirmative easement: which means the holder is entitled to make affirmative use of the
servient tenement.
o Example: right to lay pipe to access a road or a lake.
 Negative easement; which entitles the holder to compel the possessor servient tenement to
refrain from engaging in an activity on the servient estate.
o Prohibition to build a structure in excess to 3 stories.

Creation of easements:

1. Express grand: must be in writing and signed by the holder of the servient tenement unless
the duration is brief enough (1 year or less)
2. Express reservation: arises when a grantor conveys title to land but reserves the right to
continue to use the tract for a special purpose. Also in writing and signed.
3. Implication: creation by operation of law.
4. Prescription: by adverse possession:
a. Open and notorious
b. Adverse – no permission –
c. Continuous and uninterrupted
d. Statutory of time.

Property Law (ll) Real Estate Contracts.

Land sale contracts:

 Statue of frauds:
To be enforceable, a land contract must be memorized in writing – ESSENTIAL TERMS: –
o Description of the property
o Identification of the parties
o The price; and
o Manner of payment
 Doctrine of equitable coversion
o Once a contract is signed and each party is entitled to specific performance, equity
regards the purchase as the owner of the real property. The seller’s interest (which
consist of the rights to the proceeds of the sale) is considered personal property.
o The legal title that remains in the seller is considered to be held in trust for the
purchaser as a security for the debts owed by the seller (but possession remains in
the seller until closing)
 Risk of loss
o If the property is destroyed (without fault of either party) before the date set for
closing, the majority rule is that, because the buyer is deemed the owner, the risk of
loss in on the buyer.
o The buyer must pay the contract price regardless a loss due to fire or other casualty,
unless the contract states otherwise

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  Time of performance
o Presumption: time is not of the essence
o The closing date stated in the contract is not absolutely binding and party, even
though late in tendering performance can still enforce the contract.
o Usually up to 2 months is considered reasonable.
o Time will be considered “off the essence” if:
 The contract so stated; or
 The circumstances indicate that it was the parties intention; or
 One party gives the other notice that she desires to make time of the
essence.

Deeds:

Form and content:

It is a written instrument, which has been signed and delivered, by which one individual (the grantor)
conveys title to real property to another individual (the grantee) a conveyance of land, tenements,
or hereditaments, from one individual to another.

 Statue of frauds
 Description of land and parties
 Words of intent – i.e. Word “grant” is sufficient
 Signature – By the grantor / signature of the grantee is not necessary.

Delivery:

 A deed is not effective to transfer an interest in reality unless it has been delivered.
 Physical delivery is not necessary for a valid delivery.
 “delivery” refers to the grantor’s intention that the deed have some operative effects – i.e.
title pass immediately and irrevocably –

Example:

 John drafts an instrument conveying a house to Mary and hands the instrument to Mary “for
safekeeping”. Although handed to the name of the grantee. This is not a valid delivery – No
evidence of intent –
 John drafts an instrument conveying a house to Mary. John attempts to give the instrument
to Mary personally but is unable to find Mary. Nevertheless, John quits possession of the
house and thereafter treats Mary as the owner – Valid delivery –

Acceptance:

Concept:

 There must be an acceptance by the grantee in order to complete the conveyance

 Acceptance is presumed – If the conveyance of land is beneficial for the grantee / or has
knowledge –
 Acceptance “Related back” to the date of the delivery of the deed in escrow.

Recording:

 In nearly all cases, priority is given to the grantee first in time

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 o Example: If John conveys his house to Mary and then makes an identical conveyance
to Paul, Mary prevails over Paul on the theory that after the first conveyance John
has no interest left to convey.
 Recording is not essential for the validity of a deed. However if a grantee does not record
her instrument, she may lose out against a subsequent bone fide purchaser (BFP)
 How do I record a mortgage or an acquisition of land property? Filling a copy in the relevant
registry.
 The purpose for recording acts:
o Require a grantee to make some sort of recordation so as to given “notice to the
world” that
 Title to certain property has already been conveyed, and,
 To put subsequent Bona Fide Purchaser – i.e. gives value consideration and
has no notice of prior instrument from secret and /or prior instrument from
secret and/or unrecorded interests of others. –
 Notice statues:
o A subsequent BFP prevails over a prior grantee who failed to record.
 Important: no notice (actual or constructive) at the time of the conveyance.
 BFP is protected regardless whether she records at all.
o Example: On January 1, John conveys his house to Mary, Mary does not record.
On January 15, John conveys his house to Paul who gives valuable consideration and
has no notice of the deed from John to Mary.
Paul prevails over Mary.
 Race-notice statues:
o A subsequent BFP is protected only if she records before the prior grantee.
o Rationale: The best evidence of which deed was delivered first is to determine who
recorded first.
o Example: On January 1; John conveys his house to Mary. Mary does not record.
On January 15, John conveys his house to Paul.
On January 18, Mary records.
On January 20 , Paul records.
Mary prevails over Paul because Paul did not record first.
 Race statues:
o Whoever record first wins.
o Actual notice is irrelevant – it does not matter whether there is a BFP or not –
o Example:
 On January 1; John conveys his house to Mary, Mary does not record.
 On January 15, john conveys his house to Paul. He is aware of the deed to
Mary.
 Paul records.
 Then Mary records.
 Paul prevails over Mary because he recorded first, it is immaterial, whether
or not he had actual notice of Mary’s interests.

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