Professional Documents
Culture Documents
REAL PROPERTY
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PROPERTY 1
Ownership
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Under the common law whereby the co-tenants own the
property with an undivided interest in the whole, with a right to
survivorship. The right to survivorship is the distinguishing
feature of a joint tenancy: It means that when one tenant
dies, his share automatically passes to his co-tenant(s)
instead of his heirs. Each co-tenant must own an equal
share. Each takes with the four unities of PITT:
(Possession; Interest; Time; Title).
Note: Modernly the words “with right of survivorship”
need to be added to create a JTWRS, otherwise it is a
tenancy in common.
PROPERTY 3
Ownership
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Commonly referred to as the "four unities," they
are:
1. Unity of Possession (all tenants hold an
equal, undivided interest in the whole,);
2. Unity of Interest (same duration);
3. Unity of Title (created by the same
instrument); and
4. Unity of Time (simultaneous vesting of
interests).
MNEMONIC: PITT
PROPERTY 4
Ownership
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Any act disturbing one of the four unities (time, title,
possession, and interest) will sever the tenancy,
including SPAM:
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It is a co-tenancy that:
1. Can only exist between husband and wife
(it is "marital");
2. Has a right of survivorship;
3. Cannot be destroyed by severance;
4. Requires the same "four unities" as a
joint tenancy: time, title,
possession, and interest.
NOTE: A tenancy by the entirety is recognized in
some, but not all, states.
PROPERTY 6
Ownership
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A tenancy by the entirety can be severed
by any of four Ds: DDDD
1. Death;
2. Divorce;
3. Dual transfer by both H & W
4. Debtor in bankruptcy – either spouse
declares bankruptcy and trustee sells
tenancy to satisfy indebted spouse’s debt.
PROPERTY 7
Ownership
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It is a co-tenancy without a right to survivorship.
Unlike a joint tenancy, tenants in common can
obtain their interests in the property at different
times, from different instruments, and need not
have equal shares. The only "unity" recognized
in a tenancy in common is that of
possession - as long as the tenancy lasts each
tenant has a right to possess the entire property
equally even if he has an unequal share.
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Normally, a corporation owns the entire
premises, and each unit therein is leased
to tenant-stockholders who own stock in
the corporation itself. If the cooperative is
financed, it is treated as a single entity,
covered by a single mortgage (or
mortgages). The tenant-stockholder's
"proprietary lease" is usually contingent on
his continued holding of his shares in the
corporation.
PROPERTY 10
Ownership
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A tenancy which either landlord or tenant, or both, can
terminate any time without notice (at common law; most
states today require 30 days' notice on landlord only, not
tenant). It has no fixed duration.
CREATION: It can be expressly created, or it will be
implied by law if the lease does not provide for periodic
rent (which would make it a "periodic tenancy" or
"tenancy from period-to-period"), or the lease is invalid
(e.g., an oral lease for five years; the tenancy turns into a
periodic tenancy on payment of rent).
TERMINATION: Apart from landlord or tenant
terminating the tenancy, a tenancy at will can also be
terminated by operation of law; for instance, landlord's
selling the property, an attempt to assign by either party,
or the death of either will terminate the tenancy.
PROPERTY 13
Ownership
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It is a tenancy which is renewed automatically at the end of each
"period" (e.g., week, month, quarter) unless either lessor or lessee
terminates it,
EXAMPLE: "To Ignatz Feeble from month-to-month," "To Clarence
Clapsaddle for $250/week."
CREATION: Express agreement; implication (where tenant pays rent
on, say, a weekly basis and nothing else is said about a lease,
there's a periodic tenancy from week-to-week); when a lease is
invalid (e.g., through noncompliance with the Statute of Frauds;
tenancy is originally a tenancy at will, but once rent is paid and
accepted, it becomes a periodic tenancy); or by operation of law
(where tenant "holds over" after estate for years and landlord
accepts rent).
TERMINATION: Requires notice of at least one rental period.
However if the period is one year or longer, only six months' notice is
required. Also, many statutes require thirty days' notice regardless of the
length of the rental period.
NOTE: A new lease isn't created at the beginning of every rent
period; the rights and duties of the original lease carry over.
PROPERTY 15
Ownership
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The tenancy created when a tenant
wrongfully maintains possession of the
premises ("holds over") after the expiration
of the lease. The lessee is liable as a
trespasser; however, the lessor may, if he
chooses, hold the tenant to a new tenancy
merely by accepting rent (which creates a
tenancy from period-to period, continuing
until either lessor or lessee terminates it).
PROPERTY 16
Ownership
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It is a covenant enlarging the duties of the
landlord under the residential leases in many
states; it requires that the premises be "livable."
The standard generally applied is embodied in
housing codes; where there is no housing code,
the Restatement of Property 2d suggests that
the test is whether the conditions make the
promises "unsafe or unhealthy" for the tenant.
NOTE: The covenant does not apply to
commercial leases.
NOTE: The implied warranty of habitability,
unlike the covenant of quiet enjoyment, does not
require that the tenant vacate the promises to
pursue a claim.
PROPERTY 17
Ownership
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A constructive eviction arises when the tenant's
implied covenant of quiet enjoyment is breached.
In other words, if the landlord or his
representative makes the property uninhabitable,
by act or omission, the tenant may terminate the
lease and may perhaps seek damages.
TREND: The modern trend is to treat
nonperformance of a duty imposed by a
covenant in the lease, which results in making
the premises uninhabitable, as a constructive
eviction.
COMPARE: Actual eviction, in which the tenant
is dispossessed of all or most of the premises.
PROPERTY 18
Ownership
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COMMON LAW: The amount of notice
required is the same as the period (i.e., if
the tenancy is week-to week a week's
notice is required; if it's month to month, a
month's notice is necessary). However, if
the period is a year or more, six months'
notice is required.
MODERN RULE: By statute, many states
require only thirty days' notice, regardless
of the period involved.
PROPERTY 19
Ownership
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1. Landlord has a duty to control common areas.
Thus, even if another tenant (and not the landlord
himself) creates an unendurable racket in common
areas, there's constructive eviction.
2. Landlord has a duty not to allow a nuisance.
Thus, renting to a crack dealer, who operates a crack
den on the premises, would make the landlord
accountable for the nuisance.
NOTE: Under the modern trend, if the landlord
covenants to be responsible for other tenant's conduct
(e.g., covenanting to evict noisy tenants), he'll be bound
to it. Also, some modern courts bind landlords when the
lease of the offending tenant allows eviction (e.g., if
offending tenant plays loud music all night and his lease
allows eviction for excessive noise, some states would
require the landlord to evict the offending tenant).
PROPERTY 21
Ownership
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What is a "sublease"?
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It is tenant's transfer away of less than the entire estate left to him,
either in terms of possession (e.g., transferring half of the premises
for the rest of the lease term), or duration (e.g., transferring the
entire premises for a period shorter than the remainder of the lease).
COMPARE: An assignment, which occurs when a tenant transfers
away the entire remainder of his lease, in terms of both possession (the
entire premises), and duration.
SIGNIFICANCE OF DISTINCTION: A sublessee is not liable for
covenants running with the land; he can't sue or be sued by the
landlord. An assignee, on the other hand, is said to be in "privity of
estate" with the landlord, and so he can sue the landlord or be sued by
him.
NOTE: Even though a sublessee isn't liable under the lease to the
landlord, he can still be liable in tort for any damage he does to the
premier.
DISTINGUISHING ASSIGNMENTS AND SUBLEASES: See if the
tenant has anything left. If he does, it's a sublease; if not, it's an
assignment. Remember this by remembering that "sub" means
"less:' so the sublessee gets less than the entire remainder of the
lease.
PROPERTY 25
Ownership
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It depends on how much of the leasehold the
government takes, and for how long.
1. Whole property, forever: Lease is extinguished.
(Tenant is entitled to compensation; see below.)
2. Whole property, temporary: Lease continues at full
rent. (Tenant gets money from government for value of
occupancy.)
3. Part of property, forever: Lease continues at full rent to
landlord, (Tenant will receive some compensation from
government.)
COMPENSATION: Tenant gets fair rental value of
unexpired term of the lease, less rent he would have paid
pursuant to the lease. Landlord gets everything else.
This means the tenant only gets paid if his lease was
less than the fair rental value for the rest of the lease,
Also, the tenant can recover for other damages, like
relocation costs.
PROPERTY 26
Ownership
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Abandonment is just what it sounds
like - tenant leaves the premises and stops
paying rent. The lease does not cease
due to abandonment.
A surrender, on the other hand, is a
formal conveyance, requiring a writing,
which does terminate the lease.
Furthermore, the landlord must
accept the surrender for it to be valid. (A
surrender may also operate by law, without
these requirements.)
PROPERTY 1
Rights in Land
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Riparian land is:
1. A continuous tract of land;
2. Under one ownership;
3. Which touches upon a watercourse or
lake.
Ownership of riparian land entitles the owner to
reasonable use of the water, which is popular
today under the "riparian rights" theory of water
rights (as opposed to the "prior appropriations"
theory of water rights, followed in a minority of
states). Domestic use is favored over
commercial use.
PROPERTY 3
Rights in Land
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The "natural flow" theory holds that riparian land
owners may use the water but must leave it
substantially in its natural state; in other words,
no riparian land owner may interfere with the
"natural flow" of the water. The rights of all
riparian land owners are considered equal, and
no owner can alter the quantity or quality of the
water. Furthermore, the water can only be used
for riparian lands.
NOTE: This theory has been substantially
replaced by the "reasonable use" theory of
riparian rights, and the riparian rights theory itself
has a counterpart, the "prior appropriations"
doctrine of water rights.
PROPERTY 4
Rights in Land
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REASONABLE USE THEORY (most popular
today):
1. The riparian owner may use water as he
desires,
2. Without unreasonably interfering with the
water rights of other riparian landowners.
3. Water is usable on riparian and
non-riparian land.
4. For liability to attach, the claimant must
show unreasonable use and damages.
PROPERTY 5
Rights in Land
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"NATURAL FLOW" THEORY (older, common law
theory):
1. The riparian landowner must leave the water in its
natural state;
2. Cannot unreasonably diminish its quantity or
quality;
3. Water can only be used on riparian land.
4. For a claim to succeed, the claimant need only
show material alteration in the water's quantity or
quality; he needn't show damages.
NOTE: The riparian rights doctrine itself is recognized by
most states; a few states follow the "prior appropriations"
doctrine.
PROPERTY 6
Rights in Land
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It is:
1. The intentional and substantial
Interference,
2. With a right of Possession in land,
3. By a tangible, Physical object.
MNEMONIC: PIP (Physical Interference
with Possession.
PROPERTY 7
Rights in Land
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It is conduct by defendant which creates an unreasonable,
substantial interference with plaintiff's use or enjoyment of property. It is
considered personal to the plaintiff.
NATURE OF CONDUCT REQUIRED: It must be either intentional and
unreasonable (unreasonability is determined by a balancing test) (the
most common type), or negligent, reckless, or unusually hazardous.
EXAMPLES: Loud noise, noxious odors.
DAMAGES RECOVERABLE; All harm resulting proximately from the
nuisance, both personal (including diseases caught from inhaling fumes,
for instance) and property.
INTEREST PROTECTED: Right to use and enjoy one's land.
NOTE: Plaintiff need not own the property affected, but he must be an
occupant of it (i.e., a tenant).
DISTINGUISH: PUBLIC NUISANCE: Look at the scope of the injury,
which is wider for public nuisance. A public nuisance affects the
community at large through an act or condition which unreasonably
interferes with the health, safety, or convenience of the general
public, e.g., blocking a public highway, operating a brothel.
PROPERTY 8
Rights in Land
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Physical invasion. Since trespass requires interference
with a landholder's exclusive possession, there must be
a physical invasion (e.g., building an overhang over
plaintiff's property, sending one's child onto plaintiff's
property after a request not to). On the other hand,
private nuisance is interference with plaintiff's use and
enjoyment of his land, regardless of physical invasion.
Thus, strong lights, excessive noise, or foul odors can
constitute private nuisance, but not trespass.
NOTE: The same conduct can constitute both a trespass
and a private nuisance, e.g., air pollution.
DISTINGUISH: PRIVATE NUISANCE AND INVERSE
CONDEMNATION. Look at the gravity of the intrusion.
Inverse condemnation = taking of property by an actual
interference with property rights, without actually entering
the property. Private nuisance mere interference.
PROPERTY 9
Rights in Land
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What is a "fixture"?
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A fixture is a chattel which has been annexed (attached)
to land in such a way as to be regarded as real property.
As such, it passes with ownership of the land (barring an
agreement otherwise). Its requirements are:
1. Annexation to realty (e.g., heating system
installed = fixture). Note that if an item cannot be
removed without damaging the property, it's a fixture;
2. Appropriate to the use of the realty to which it is
connected (the more appropriate, the more likely it's a
fixture);
3. Intent to make a permanent accession, viewed
objectively. Look for any agreement, oral or written; also,
annexor's estate in land (owner is more likely to intend a
permanent accession than a mere lessee).
MNEMONIC: ARIA (Annexed to Realty; Intended;
Appropriate)
PROPERTY 13
Rights in Land
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What is an "easement"?
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1. Reservation
2. Implication
3. Prescription
4. Expressly (Will, Deed, Grant or
Reservation)
5. Necessity
MNEMONIC: RIPEN
PROPERTY 16
Rights in Land
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1. Vast majority of easements are affirmative
easements: One is allowed to use the "servient estate."
Remember: I CAN USE YOURS.
2. Negative easements: One can restrict the use of
another piece of land, the "servient estate." Remember,
YOU CAN'T USE YOURS. Negative easements are very
rare, and generally limited to four traditional types:
easements for air, light, subjacent or lateral support, or
flow of an artificial stream. Keep in mind that negative
easements cannot be created by prescription; that is, just
having access to air, light, and the rest, for the
prescriptive period, doesn't create an easement.
NOTE: Negative easements are very limited because
such restrictions can be classified as equitable
servitudes, so there's no reason to expand the scope of
negative easements.
PROPERTY 17
Rights in Land
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An "easement appurtenant" is an easement
granted to an individual only in his status as
possessor of a certain piece of land. The
easement is useful to the individual only
because he possesses that particular piece of
land. The parcel of land possessed by the
individual who holds the easement is known as
the "dominant tenement/estate"; the piece of
land "burdened" by the easement is known as
the "servient tenement/estate". You can easily
recognize an easement appurtenant, as
opposed to an easement in gross, because an
easement appurtenant must involve at least two
pieces of land; an easement in gross involves
only one, the "burdened" or servient estate.
PROPERTY 18
Rights in Land
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An "easement in gross" benefits an individual or
business, as opposed to the owner of a specific
piece of land. The most common type of
easement in gross is that of public utilities. (The
opposite number, an "easement appurtenant,"
benefits a specific piece of land). An easement in
gross is distinguished from an easement
appurtenant in that it involves only one piece of
land, a servient estate; an easement
appurtenant must involve at least two pieces of
land, a dominant and servient estate.
PROPERTY 19
Rights in Land
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Conveyancing. An easement appurtenant is
considered part of the dominant estate; when the
ownership of the estate is transferred, the
easement is, too, either explicitly or implicitly.An
easement in gross, on the other hand, cannot be
conveyed unless the grantor of the easement
expressly permits it. This is the traditional rule.
However, according to modern courts,
commercial easements in gross (those granted
for business reasons) are freely alienable barring
an expressed intent otherwise.
Note that, however, conveying the servient
tenement automatically conveys the easement,
either express or implied.
PROPERTY 21
Rights in Land
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A "dominant tenement/estate" is a parcel of land
possessed by an individual who enjoys an "easement
appurtenant" over a "servient estate" (the land burdened
by the easement). The most common kind of easement
appurtenant is a right-of-way.
For this image, you have to know that "serviette" is an
English word for table napkin.
Mental picture: Imagine a vast field, stretching across the
horizon. The left half is entirely covered with dominos
(the "dominant estate"). The right half is covered with
billowy yellow "serviettes" (the "servient estate").
Imagine a raised path, like St. Louis' Gateway to the
West, rising over the napkins, in gleaming steel. An
endless procession of cats is walking from the "domino"
side, over the pathway, purring (Purr: appurtenant).
PROPERTY 22
Rights in Land
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1. The two pieces of land must have been
under common ownership before severance;
2. Use of one part of the land by another part
must have been apparent;
3. And continuous;
4. The use must be reasonably necessary
for enjoyment of dominant estate.
MNEMONIC: COCAiNE: (Common Ownership;
Continuous; Apparent; Necessary)
PROPERTY 23
Rights in Land
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An easement by prescription requires use of
another's property that is similar to adverse
possession:
1. Actual;
2. Open and notorious;
3. Continuous (during statutory period; at
common law, 20 years);
5. Exclusive; (not as a member of the general
public does not mean owner is excluded);
and
5. Hostile and adverse (non-permissive).
PROPERTY 24
Rights in Land
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There are 7 ways to extinguish an easement: SURE NAP:
S– Stated condition
U– Unity of ownership
R– Release
E– Estoppel
N– Necessity
A– Abandonment
P– Prescription
PROPERTY 26
Rights in Land
What is a "profit"?
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It is an affirmative, non-possessory interest in
land, permitting the holder to take something
from another's land (typically minerals, water,
gravel, game, fish, or wood). It is considered a
property right protected by the Due Process
Clause, so that if the servient estate is taken by
eminent domain, the profit holder will be entitled
to compensation. Unlike an easement, if a
surcharge occurs, i.e., excessive use, a profit is
terminated, whereas an easement is not. The
appropriate remedy is an injunction and/or
money damages.
PROPERTY 27
Rights in Land
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An easement allows the holder to use another's
land; a profit, on the other hand, gives one the
right to take something from the land. However,
profits are the same as easements for the
purpose of creation (except there cannot be an
implied profit or a profit by necessity),
alienability, and termination. They are both
considered property rights protected by the Due
Process Clause, so that if the servient estate is
taken by eminent domain, the profit or easement
holder will be entitled to compensation.
PROPERTY 28
Rights in Land
What is a "license"?
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It is a personal privilege to enter upon the
licensor's land. It is not considered an interest in
land (thus, it need not be in writing), and it is
normally revocable. In two principal situations,
however, licenses are irrevocable:
1. LICENSE COUPLED WITH INTEREST-.
One's license is based on owning personal
property, on the land of another, and the license
is incidental to owning the personal property;
2. "EXECUTED" LICENSE: The licensee has
detrimentally relied on the grant of a license by
investing in the property such that termination of
the license would be inequitable.
PROPERTY 29
Rights in Land
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It's not always easy to tell, except that a
license is considered transitory, a personal
interest, generally revocable, and need not
be in writing, whereas an easement is an
interest in land, must comply with the
Statute of Frauds, and is generally
irrevocable. Furthermore, a license is not
alienable (unless the grantor specifically
provides otherwise); an easement is,
under certain circumstances. The key,
normally, is the intent of the parties.
PROPERTY 30
Rights in Land
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1. Express notice by the licensor;
2. Sale, lease or mortgage of the land by the
licensor;
3. Action of trespass against the licensee;
4. Death or insanity of either party;
5. Attempted assignment by the licensee;
6. Obstruction by the licensor;
7. Expiration of the time period set for the
license; and
8. Abandonment by the licensee.
MNEMONIC: DAN TOAST (Death; Assignment;
Notice; Trespass; Obstruction; Abandonment;
Sale; Time)
PROPERTY 31
Rights in Land
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In terms of its creation, it must comply with the Statute of Frauds (i.e.,
it must be in writing). Beyond that, you have to look at the burden and
the benefit separately. They both require that:
1. The parties must have intended that the agreement would run with
the land;
2. The agreement must "touch and concern" the land;
3. There must be privity of estate between the parties (the degree of
which is different, depending on whether a benefit or a burden is
involved).
However, the burden, and not the benefit, has one additional
requirement.
4. Notice (the prospective buyer of the burdened land must have
notice, before buying, of the burden (notice can be actual,
constructive, or inquiry)).
MNEMONIC: SPIN CAT (Statute of Frauds; Privity; Intended; Notice;
Concern And Touch)
PROPERTY 33
Rights in Land
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COVENANTS, EQUITABLE
SERVITUDES, AND IMPLIED
RECIPROCAL SERVITUDES: HOW
THEY FIT TOGETHER.
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Whenever you're talking about these concepts, what
you're trying to determine is whether someone can be
bound to a property oriented agreement that he didn't
personally enter (or whether he can take advantage of
such an agreement). The strictest one of the three is a
"real" covenant, since it requires a writing, intent, "touch
and concern:' notice, and privity of estate. If the privity
requirement is missing, and/or the remedy sought is an
injunction instead of damages, then you're looking at an
equitable servitude problem. It requires a writing, intent,
"touch and concern," and notice. Thus, the big difference
between an equitable servitude and a real covenant is
that no privity is required for an equitable servitude (so,
for instance, it could be enforced against an adverse
possessor).
PROPERTY 35
Rights in Land
COVENANTS, EQUITABLE
SERVITUDES, AND IMPLIED
RECIPROCAL SERVITUDES: HOW
THEY FIT TOGETHER.
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An implied reciprocal servitude is just a special
"subcategory" of equitable servitudes that only
comes up in building restrictions in subdivisions.
If the developer had a common plan for the
subdivision from the beginning (i.e., a building
restriction), he assured earlier grantees that later
grantees would face the same restriction (e.g.,
no commercial buildings), and there's notice of
the restriction to later prospective buyers, they're
bound to the restriction. Look for implied
reciprocal servitudes only in these
circumstances: a building restriction in a
subdivision.
PROPERTY 36
Rights in Land
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It concerns the relationship between the original
promisor and promisee in a covenant. It is
required for both benefit and burden to run, in
most states. Most states maintain that
"Grantor/Grantee Privity" - the covenant
accompanies conveyance of the burdened
land - provides sufficient "horizontal privity" to
justify that the covenant "run with" the land. (In
other words, the promisor and promisee cannot
be "strangers to each other's title," i.e., merely
neighbors.)
PROPERTY 37
Rights in Land
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It concerns the relationship between each of the
original covenanting parties and their successors
in interest. For the burden in a covenant to run
from a promisor to his successors, "vertical
privity" requires that the entire estate (e.g.,
assignment of lease from a tenant, sale by a fee
owner, but not sublease or life estate) be
conveyed. For the benefit to run, the
requirements are less strict: "vertical privity" will
exist as long as the successor acquires a legal
interest in the land and takes possession (e.g., a
life estate from a fee owner does quality).
PROPERTY 38
Rights in Land
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An equitable servitude is a promise by the holder of a piece of land
to conduct a stated activity on or make a stated use of his property
(or a promise not to do so), which is binding on his successors. An
equitable servitude starts out as a mere promise by the land holder;
however, if the promise satisfies the Statute of Frauds (i.e., it's in
writing), and it meets three requirements - "touch and concern,"
intent, and notice - it will be binding on successors to the promisor
(the one whose land is burdened by the promise). It is considered
an interest in land.
NOTE: Like a real covenant, equitable servitudes only become an
issue when you're looking at successors in interest to the original
covenanting parties. The original parties are bound to the
agreement under regular contract law.
NOTE: An equitable servitude is very similar to a real covenant, but
its requirements are less stringent; it doesn't require privity. Also,
the remedy is different; breach of an equitable servitude results in an
injunction or specific performance, since those are equitable
remedies. Breach of a real covenant results in liability at law, namely
damages.
PROPERTY 39
Rights in Land
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1. Constructive or record
notice - covenant appears in grantee's
"chain of title;"
2. Inquiry/Implied notice - physical
appearance of neighborhood suggests
common plan or restriction;
3. Actual notice - knowledge of
covenant in current or prior deeds with
same restrictions.
Mnemonic: CIA
PROPERTY 1
Real Property Contract
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As a threshold matter, remember that since a land sale contract is a
contract, it must meet all of the typical contract requirements (e.g.,
mutuality, consideration), and since it's for an interest in land, it must
comply with the Statute of Frauds (i.e., it must be in writing, unless it fits
an exception like part performance). As to content, it must contain
"essential terms,"including:
1. Names of parties (grantor and grantee);
2. Price;
3. Terms and conditions (e.g., price, financing, and manner of
payment [if agreed upon]);
4. Description of land;
5. Signature (of the "party to be charged” viz. the party against
whom the contract is sought to be enforced).
MNEMONIC: Peter Piper Took Some Drugs (Parties; Price; Terms;
Signatures; Description)
N.B.: Remember that a conveyance only requires a valid deed and
delivery; however, a land sale contract is almost always used when
the conveyance involves a sale (rather than a gift) of real property.
PROPERTY 2
Real Property Contract
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No. The Statute of Frauds is satisfied by a
written memorandum signed by only the
party to be charged (that is, the party
against whom the contract is sought to be
enforced).
NOTE: A deed, on the other hand, need
only be signed by the grantor. The grantee
is bound by the terms of the deed through
acceptance of the deed and all of the
terms of the land sale contract are merged
into the deed.
PROPERTY 3
Real Property Contract
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1. Grantor's signature;
2. Parties;
3. Description of property;
4. Interest conveyed (e.g., fee, lease);
5. Intent to transfer;
6. Acknowledgements (for recording
purposes only, not necessary to bind the
parties).
MNEMONIC: PIG AID (Parties; Interest; Grantor
signature; Acknowledgements; Intent;
Description)
PROPERTY 5
Real Property Contract
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It is title which, viewed objectively, is free from reasonable doubt, and
which the reasonable buyer would accept without fear of
litigation.
SIGNIFICANCE: The conveyance of marketable title is an implied
covenant in land sale contracts; it is implied unless the contract
expressly provides for something other than marketable title (e.g.,
title insurable by a title insurance company). Note, however, that
even when marketable title is implied in a land sale contract, the
terms of the deed will control once the deed is conveyed, under the
doctrine of merger. This is a very easy item to test. Thus, for
instance, if a quitclaim deed is conveyed, there will be no obligation
to provide marketable title (since a quitclaim deed is free of express
or implied covenants).
REMEDIES FOR UNMARKETABLE TITLE: Buyer may rescind the
contract (and recover any money already paid), damages for breach of
con-tract (market value minus contract price, unless the seller acts in
good faith (i.e., doesn't intentionally breach the contract), in which case
halt the states limit the buyer to out of pocket expenses), or
specific performance of the contract with an abatement (reduction) of
the contract price due to the defect.
PROPERTY 7
Real Property Contract
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It is a:
1. Subsequent purchaser;
2. Who pays value;
3. Without notice of any prior
conveyance;
4. and is of good faith.
PROPERTY 1
Titles
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Possession must be:
1. Hostile;
2. Exclusive;
3. Lasting for the statutory period (at
common law, 20 years);
4. Uninterrupted for the period;
5. Visible;
6. Actual.
MNEMONIC: HELUVA
PROPERTY 2
Titles
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There are two principal "future" covenants in the general warranty deed with
full covenants. Under the covenant of quiet enjoyment, the grantor promises
that the grantee will not be disturbed in her enjoyment of the property by
anyone with a lawful claim. Alternatively, in some jurisdictions, this identical
assurance is given through the covenant of warranty under which the grantor
promises to defend grantee against lawful claims to title and to redress any loss
incurred. Finally, the grantor provides a covenant of further assurances. Here,
the grantor promises to execute any necessary documents to perfect title.
PROPERTY 3
Titles
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They are:
1. Race;
2. Notice; and
3. Race/Notice.
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It provides that no subsequent bona fide
purchaser is bound by an unrecorded prior
conveyance. Thus, if a property is
conveyed to two different individuals,
neither of whom records his conveyance,
the second purchaser will have title from
the moment the property is conveyed to
him.
COMPARE: Unlike a "race-notice" statute,
which does not protect a bona fide
purchaser until he records.
PROPERTY 5
Titles
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It provides that no subsequent bona fide
purchaser is bound by a prior conveyance
as long as he records first. Thus, the bona
fide purchaser's priority is not established
at the time of his conveyance, only when
and if he is the first to record.
COMPARE: Under a pure "notice" statute,
the subsequent bona fide purchaser is
protected from the moment of the
conveyance.
PROPERTY 6
Titles
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To protect subsequent purchasers of interests in
land from earlier claimants of whom they are
unaware. Instead of going by the common law
rule "First in time, first in right," recording acts
sometimes void deeds of earlier grantees in
favor in later ones.
NOTE: Recording acts - at least the two most
common types, notice and race-notice - protect
only "bona fide" purchasers and encumbrances
(that is, those who pay value and take without
notice of prior conveyances, in good faith).
PROPERTY 1
Real Property Mortgages
What is a "mortgage?"
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It is an:
1. interest in land;
2. created by a written instrument;
3. which provides security;
4. for the payment of a debt or the
performance of a duty.
PROPERTY 2
Real Property Mortgages
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Junior interests are encumbrances that
came about after the mortgage being
foreclosed; senior interests came about
before. When a mortgage is foreclosed,
junior interests are destroyed, and senior
interests are preserved (i.e., the buyer at
the foreclosure sale will have to satisfy the
senior interests at some point, or they can
foreclose. However, the senior interests
can only be satisfied by sale of the
property; the buyer isn't personally liable).
PROPERTY 5
Real Property Mortgages
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If the owner/mortgagor sells the property to a third party and conveys a deed
(and assuming the mortgage was properly recorded), the grantee will take the
property subject to the mortgage. This means that the grantee has no
personal liability on the debt, but if the debtor fails to maintain payments
on the obligation, the property is subject to foreclosure by the mortgagee.
Alternatively, the grantee may agree to assume the mortgage. This means
that the grantee is now primarily liable on the obligation. The original mortgagor
will remain secondarily liable following an assumption, unless the parties agree
to a novation.
PROPERTY 1
Future Interests
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Those possessory interests we would call
leases:
1. Estate for years;
2. Tenancies from period-to-period (or
“periodic tenancies”);
3. Tenancies at will; and
4. Tenancies at sufferance.
PROPERTY 2
Future Interests
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1. Fee Simple
2. Fee Tail
3. Life Estate
MNEMONIC: STALE (Simple; Tail; Life Estate)
SIGNIFICANCE: Non-freehold estates are terms
of years or leasehold estates. Holders and
non-freehold estates are not “seised” of the
land - they do not hold legal title - which
comes into play, for example, with the
destructibility of contingent remainders.
PROPERTY 3
Future Interests
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“And his heirs.” Thus, a conveyance “to Ishmael
and his heirs” was required to give Ishmael’s
heirs ANY interest at all in the property.
NOTE: “to Ishmael,” which is all that would be
required to convey a fee simple estate today,
would, historically, only have given Ishmael a life
estate in the property, with a reversion in the
grantor/transferor. NO OTHER WORDING was
permissible - not even “to Ishmael in fee
simple!”
N.B.: The “magic words” were ONLY necessary
in INTER VIVOS transfers (conveyances) - at
common law, a BEQUEST “to Ishmael” WOULD
create a fee simple absolute!
PROPERTY 4
Future Interests
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The Rule Against Perpetuities states, in
principal, that no interest is good unless it must
vest, if at all, not later than 21 years after one or
more lives in being at the creation of the interest.
Thus, if an interest is capable of vesting more
than 21 years after a life in being, it is void. The
Rule applies to both real and personal property,
and to the legal and equitable interests in them.
It does NOT apply to any interest in grantor -
reversions, possibilities of reverter, and powers
of termination; nor does it apply to vested
interests, like vested remainders, nor fee simple
estates. It applies only to contingent
remainders, executory interests, and powers of
appointment.
PROPERTY 7
Future Interests
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Contingent remainders and executory interests
are the most common ones - in other words,
interests that are vested. Note that options to
purchase land which are not connected to leases
for years, and powers of appointment, are also
subject to the Rule Against Perpetuities.
NOTE: Future interests in the grantor (reversion,
possibility of reverter and power of termination)
are not subject to the Rule (i.e., they can vest
“remotely”) - nor are vested remainders in
grantees.