PROPERTY SHORT OUTLINE

I. INTELLECTUAL PROPERTY
 There is no actual object  just an idea (nothing is physically there)
 You own a right and no one else can own that right (bc it was your idea)

 PATENT: Inventor’s exclusive rights to their discovery

 Needs to be nonobvious & novel
 NOT a product of nature
 Discovery = invention
 “Natural phenomenon” vs. patentable man-made inventions
 Doctrine of Equivalence Steps:
 (1) Equivalent
 Small changes are not novel or innovative
 (2) Prosecution history
 If you gave up something then you can not claim equivalence
 (3) Not aware you were given some potential change up
 Then no bar to Doctrine of Equivalence

 COPYRIGHT: Author’s exclusive rights to their writings

 Needs to be for something original
 The Copyright Act: “Originality” = statute requires a work to be original to qualify for protection
 Does not mandate the quality of the work
 Work does not need to be registered to be copyrighted BUT…
 Registration eventually required before a suit for infringing copyright can be brought
 Provides additional security
 Protection arises when a work is fixed in a tangle medium of expression
 Authorship in some fixed meaning
 Creation of putting it in some fixed and physical evidence
 Utilitarian (YES) vs. Functional (NO)
 Utilitarian = YES if existed independently of functionality
 Functional = NO if function of feature was not separate from features

 TRADEMARK: Distinguishable mark (word, phrase, logo, etc.) to identify goods/manufacturer from others
 Elements:
 The mark cannot be merely descriptive Ex: Nike
 Cannot be deceptively similar to another company Logo
 Cannot confuse a consumer
 Can arise automatically without government registration BUT registration can…
 Evidence a mark
 Increase geographical coverage
 Make it “uncontestable”
 The Lahman Act: gives seller/producer right to “register” a trademark & prevent competitors from using
 “Infringement” = when someone else is using the trademark

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  Secondary Meaning: acquired when… in minds of the public, primary significance of
product feature is to identify source of the product rather than product itself Ex: Word
 Merely descriptive/generic marks need to have a secondary meaning “Nike”
itself
 Not trademarkable until this happens
 Functionality Doctrine: product is functional and cannot serve as a trademark if it is
essential to use or purpose of article, OR if it affects cost/quality of article
 If exclusive use would put competitors at a significant non-reputation-related disadvantage
 Trade Dress = the vibezzzzz  the appearance of something
 Will be distinctive and protectable Ex: NYC
 If not specific symbol/device that can be described/depicted, may not be a registerable Nike Store
trademark
 If it looks like everyone else  must become established in that area and used a lot

 TRADE SECRETS
 6 Factor Test: OIPVMTE
 O = Known outside the business Ex: Nike’s
 I = Known inside business marketing
 P = Precautions taken ideas
 V = Value
 M = $ spent to develop
 TE = Time/expense for someone else to develop

 INTERNET DOMAIN NAMES:

 Has organization with own rules and regulations
 Uses arbitration to settle disputes
 Ex: “sting.com”

 RIGHT OF PUBLICITY:
 Test = suggestion/confusion of endorsement
 Not always right of publicity issue the second there is a commercial interest
 @ Common Law… may be pled by alleging: [IACI]
 I = D’s use of P’s identity
 A = Appropriation of P’s name or likeness to D’s advantage
 Commercial or otherwise
 C = Lack of consent
 I = Resulting injury
 NIL = Name; Image; Likeness
 Defense:
 Parody
 Biography
 Journalists
 Transformative Image

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II. PERSONAL PROPERTY

 FINDERS’ CASES: finder of piece of personal property has rights above everybody except OG owner
 Mislaid = someone forgets they put property there, but intended to come back for it
 Order of Recovery: [true owner]  landowner
 Lost = a mistake/involuntary/carelessness; item there unintentionally
 Ambiguous = lost
 Order of Recovery: [true owner]  finder
 Abandoned = intentionally left behind
 Order of Recovery: 1st person to take it!
 Treasure Trove = needs to be antiquity; pirates!; buried or hidden treasure that consists of metals,
currency, or other similar valuables intentionally concealed in distant past by someone who intended to
return to it but didn’t
 Order of Recovery: finder

 BAILMENT: delivery of personal property by one person (bailor) to another who holds the property
(bailee) for a certain purpose; usually under express or implied K
 Bailment Theory
 Elements: [ADAFD] To recover, P must establish…
 A = An implied or express agreement
 D = A delivery of property in good condition
 A = Bailee’s acceptance of the property
AND
 F = Bailee’s failure to return the property
 D = OR bailee’s redelivery of the property in damaged condition
 Tell bailor what property is and they accept responsibility of it; presumption of negligence if something
is damaged
 Rebuttable Presumption: bailee can avoid liability by showing loss/damage was not their fault
 Bailee is liable upon proof that…
 Property was in good condition at time of bailment
AND
 It was returned in damaged condition (or not at all)
 Bail For Hire: duty to exercise “reasonable care” in safekeeping the bailed property and is liable for
negligence that causes loss or damage
 Bailee has duty to…
 Exercise care
 Not be negligent
 Gratuitous Bailee: someone keeping bailed articles only for benefit of bailor
 Less liability

 FUGACIOUS THINGS
 The creation of rights of yet-owned property
 RULE = ownership should be unambiguous and easily recognizable
 Limitations  Pooling: oil under land collected from multiple properties; don’t want others to
collect revenue of product under your property just because they withdrew it first

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  Solution: determine where resource comes from exactly and split revenue between properties
 RULE OF CAPTURE
 The one who actually possess the fugacious thing is the owner
 Rewards success  reflected a kind of distributive justice or fairness
 Possession = complete control
 If you take significant steps to obtain possession of abandoned property, and the efforts are
interrupted by the unlawful acts of another actor, you get legal interest in property
 Partial/Probable Capture: modification to the rule of capture to protect whaling industry (since whales
often break free); if whaler does all things possible to make the animal his own, that is sufficient
 Can’t be Determined?  SPLIT

 TRANSFER OF PERSONAL PROPERTY

 Promissory Notes:
 Signed obligation for one person to pay another on a certain date with no other obligations
 ELEMENTS:
 A signature;
 An unconditional agreement to pay a specific sum at a specific time (or on demand);
 Timeframe of payment
 Any other obligations go into a separate agreement
 Cannot be collaborated in bad faith
 Governed by K Law (combo of K rights and property interest after purchased in a secondary market)
 Portable property  the paper itself is property and has its own value
 Can be sold to someone else
 Secondary Market: where financial institutions and investors buy and sell mortgages
 Must have physical possession of it
 Value exists bc owner can…
 File suit; prove the debt; force payment
 Any holder (“bearer”) of note is entitled to collect on it
 The original note does not need to confine payment to a specific payee

 Holder in Due Course:

 Any person who receives or holds a negotiable instrument (ex: check or promissory note) in good
faith and in exchange for value; without any notice or suspicion that it is overdue or was
previously dishonoured
 Such a holder is entitled to payment by the creator of that negotiable instrument
 ELEMENTS:
 Bought the note for value;
 Bought the note in good faith;
 No notice of any defense that would affect the validity of the instruments they hold

 Unauthorized Transfers:
 Stolen property does not pass title (voidable)
 Key is entrustment
 Exceptions:
 If you make it easy by entrusting it to someone else

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  Merchant Exception: if entrusted to agent
 Security Interest:
 Interest in someone else's property (created by K or by law); putting property as collateral
 Gives holder the right to seize, repossess, and then sell that property
 Repo man & inventory sales
 Bank could repossess if payments not made
 Do not hold title to that property (giving title, and then getting back a security interest)
 Perfecting Security Interest: By filing doc. (UCC-1)
 Key is timing!
 Through UCC-1  all inventory belongs to the bank; once bank seizes it, becomes bank’s
property; bank can come collect on all the property, then sell to someone else
 If there are collateral changes, need a new UCC-1 signed K
 You can trace proceeds of secured personal property

 CL FORMS OF PLEADING
 Can wrongfully interfere with personal property
 Trespass: something is wrongfully taken; invasion of real property; damage to personal property
 Replevin: action to get property back
 Conversion: does not depend on wrongful taking, only wrongful act
 Only personal property (has expanded to include documents)
 Bodily Extracts?
 [morality unclear]
 No rights to things given away (including body parts)
 BUT can’t sell your body parts (Black Market)
 What about organ donors then?

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III. REAL PROPERTY

 OWNERSHIP
 You can create real property interest by…
 Creation; adverse possession (use); transfer; government grants; discovery & occupation; gift; devise
or descent; purchase/sale or K
 Equitable Title = A beneficial interest in real property that gives the title holder the right to acquire legal
title to the property  at time of K
 Legal Title = Title that can be documented & available through public records  when deed is executed
 Grantor = a person who transfers an interest in real property
 Grantee = the party granted the property interest
 Elements of Property Transfer:
 Parties; preconditions; expressions that form K; obligations created for each party; representations &
warranties; breach and remedies; termination
 CREATION
 Creation by Gift:
 ELEMENTS:
 Intention on part of donor to make a gift;
 Delivery (or transfer) of the subject matter of the gift;
 Acceptance of gift by donor
 Includes: wills; descent
 Creation by Adverse Possession (Use):
 ELEMENTS:
 Open, hostile, notorious, visible, exclusive, continuous possession…
 For a number of years… [usually 20+ cumulative years, regardless of change in ownership]
 Without permission
 Strict; multiple burdens to prove; objective
 Creation by K
 TYPES OF OWNERSHIP
 Adverse Possession:
 Possession (for a statutorily prescribed period of time) can become title if CONAH met
 Balances interest of the rightful owner against those of the possessor
o Rightful Owner  who is afforded a significant amount of time within which to assert
his right in the face of another’s visible occupation of his land
o Possessor  whose period of uninterrupted use yields expectation and reliance interests
 CONAH Elements (Objective)
 Continuous = uninterrupted for the statutory period (≈20 years depending on jurisdiction)
o Tacking  regarding adverse possessor
 Open & Notorious = possession the owner would make under circumstances
o must be visible (actual or constructive)
o supposed to go out to look at your own property
o could be investigated
 Actual = possessor must make an actual physical entry onto the premises and take possession
to start the appropriate SOL
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  Hostile = possessor does not have true owner’s permission to be there

 Possessory & Future Interest in Land:

 A person can have a possessory and future interest in estate (undivided interest in land)
 There can be multiple concurrent possessory owners (that all have part of property)

 Fee Simple Absolute:

 Magic Words  “to grantee and his/her heirs…”
 ONE person owns ALL the legal rights
 Does NOT give heirs any right at all
 The expression signals one person owns everything and can give it all away when they die
 Implication is that it will go to heirs upon their death
 Gives the maximum away
 Life Estate:
 Magic Words  “to grantee for life…”
 If there is nothing else said… that property can go back to the person who gave away the
right (and then their heirs)
 Grantor must name a REMAINDER… or else REVERSION
 Remainder = who the personal property goes to after grantee dies
o Magic Words  “to grantee for life… and then to [remainder] and their heirs…”
 Reversion = property goes back to the grantor when grantee dies

 Undivided & Concurrent Interests:

 ELEMENTS: PITT Unity
 Unity of Possession = each joint tenant must have rights to possess/occupy entire property
 Unity of Interest = each joint tenant must hold interest of the same size/duration
 Unity of Time = each joint tenant must have acquired their interest at the same time
 Unity of Title = a single grant must create the interests
 Types:
 (1) Tenancy in Common [TIC] = shared tenancy where each holder has a distinct,
separately transferable interest; equal undivided interest
o ELEMENT: Unity of Possession ONLY
o Each Co-Tenant…
 Has right to use land
 Cannot exclude other co-tenants (share income)
 May be liable to account to other co-tenants
 May not commit waste
 May transfer their interest
 Own concurrent interests in the same property
o If one co-tenant dies, property passes to their heir(s)
o Not subject to severance; can “partition” the estate to divide into separate estates
 (2) Joint Tenancy with Right of Survivorship [JTWROS] = if one person dies, other person
can keep that property
o ELEMENTS: Unity of Possession, Time, Interest, and Title
 If one lacking, either TIC or Joint Life Estates (depending on court)
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 o Usually between two people
o Can be severed… by one transferring the property  creating TIC
 (3) Tenancy by the Entirety [TBE] = only between spouses; each own an undivided interest
in the property (100%), and have full rights to occupy and use it
o ELEMENTS: Unity of Possession, Time, Interest, and Title
o There is right of survivorship
o Cannot transfer their interest in the property without the consent of the other spouse
o Can only be severed… by divorce  becomes TIC

 Marital Property:
 Body of law that directs how property held by husband, wife, or both is divided or owned
 Common Law States [Equitable Distribution] =
 Marital estate = equitable (not necessarily equally divided)
 3 Circumstances:
o All property is split (50/50)
 Includes pre-marital property
o All property acquired during the marriage is shared
 Does not include pre-marital property
o All property acquired during the marriage is shared except by will, gift, or property
earning income
 Does not include pre-marital property
 Essentially a community property system
 Community Property States =
 Property that the couple has gotten during marriage will be divided
o Can be equitably split
 Not necessarily 50/50, but fair split
 Future earning capacity also taken into account
 Presumption that everything in the union is community property…
o BUT separate property only when it belongs to a specific spouse
 Determinations:
 Inception of title  how it came about
 Ex: will or inheritance; gifts to one spouse; pre-marital property
 Commingled Property  if ambiguous, presumed to be community property
 If one spouse paid to improve property, can be reimbursed for it
 Valuation of Property
 Experts & Appraisers
 Determining “fair market price”
 Not a science (value fought about)
 What about degrees?  hard to value

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  Trusts:
 Trustor sets up the trust, gives property to trustee who holds property for benefit of beneficiary
 Requirements:
 Clear form of writing [Who is in trust; who beneficiaries are; how to pay beneficiaries]
 Duty of Trustee = [high fiduciary duty]  LARPAA
o L = Loyalty
o A = avoid self-dealing
o R = reasonable and prudent investment
o P = protect and preserve trust property
o A = account to the beneficiary
o A = avoid commingling

 TRANSACTIONS
 Brokerage:
 RULE:
 Broker will get a commission if they find…
 … a ready, willing, and able buyer…
 …even if no sale occurs
 Have completed their duty if they find a buyer but no sale is made
 Broker = an intermediary; controls everything; used by buyers and sellers (seller pays for it all)
 Wants to know everything about property to avoid being held liable for something
 Brokerage Agreement = has to be in writing to be enforceable (SOF)
 “Accidental Sale” – even if broker hasn’t begun to make an effort (or seller finds buyer), must
still provide broker with commission; sometimes even if sale occurs post K with broker
 3 Possibilities:
 Sell below list price with agreement from seller
 Sell at list price
 Sell above list price (ex: through bidding war)
 Broker Liability = brokers can be liable for mistakes in transactions…
 Hoffman Rule Split (3 Approaches/Jurisdictions):
 (1) NO LIABILITY on broker who makes a mistaken representation
o If property speaks for itself (Buyer beware!)
o Does not have to be in good faith
 (2) NEGLIGENCE (middle ground)
o If the broker should have checked on something the seller informed them of
o Broker liable for negligence misrepresentation even when unaware of mistake (no intent)
 (3) STRICT LIABILITY
o As broker, never say anything!!
o Impose liability on broker even for innocently passing on a false representation from the
seller (even if you believe it true or had not checked info)
 Letter of Intent (LOI): Deal Letter

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 Done in anticipation of making a bigger K; holds you to duty to negotiate in good faith; not
enforceable unless all essential terms are present; agreement to agree ≠ enforceable
 Make it clear that the duty to negotiate is enforceable (risky)
 Agree to negotiate in good faith (but do not have to complete agreement)
 Statute of Frauds (SOF)
 In order to prevent oral testimony, statement has to be in writing
 3 Approaches:
 Strict = terms must be in K
 Middle = use the description in K and other context clues (extrinsic evidence) to look for further
clarification to determine missing information
 Loose = relaxed approach; just need a memorandum of an agreement and can then introduce
other forms of evidence
 Negotiation  needs to avoid fraud
 Cannot misrepresent about actual facts, but can “puff”

 AGREEMENTS
 Preconditions to Sale:
 Buyer wants…
 Title; Inspection; Financing
 Can walk if all not met
 Inspection = can be conditioned precedent that needs to be satisfied before an agreement becomes
binding or before a duty to perform arises
 Financing = inserted to protect buyers so they do not have to pay for the whole property themselves
 Purchase conditional on ability to get financing; dangerous for buyer to not have a financing
condition; important to be specific
 Bank can provide “pre-qualification”
 Not a final absolute commitment from the bank
 For when buyer finds property and as soon as K is formed
o Cannot get final financing from bank until there is a K
 Title = the aggregate of legal rights enjoyed by a person under law towards the ownership and
possession of a property
 Obligation to purchase only when the satisfactory title is delivered
 “Satisfaction” Clauses risky…
o Can easily get out of them; seller wants buyer to be specific about what they are worried
about
 Buyers want to look at title report before purchasing
o Most sellers want this done quickly to not tie up property for so long
 Options:
 Option Agreement = agreement that one party (usually the buyer) decides within a specific time
period whether or not to complete the deal
 Paying for right to decide if you want property (which gets temporarily taken off the market)
 A separate agreement/K that needs own K requirements (separate offer, consideration,
acceptance)
 Must be in writing (SOF)
 Specific Performance:
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  K remedy where court orders a party to actually perform its promise as closely as possible bc
monetary damages are inadequate to fix the harm
 Granted bc a parcel of real estate is such that nothing else will satisfy you (unique)
 Every piece of property is unique even if “identical”
 Escrow Agreements:
 Escrow = a neutral 3rd party who holds the money/documents for the parties
 Escrowee must make an independent determination of compliance with conditions of K (except
where it is beyond their ability)
 Earnest Money = money put down to show you are earnest
 A deposit but NOT a down payment (money releases at closing and can become part of down
payment at that time)
 Liquidated Damages = if buyer breaches, seller can keep earnest money
 Held in escrow until closing
 Seller Liable:
 Usually liable for misrepresentation
 Innocent misrepresentation = depends on jurisdiction
 Non-disclosure
 Warranty (1 year)
 Consumer protection
 Liability Outside Agreement:
 Parole Evidence Rule
 Can’t introduce any extrinsic evidence to alter a written K
 Common Exception = Fraud
 K not enforceable; then allowed to introduce external evidence if it’s evidence of fraud
 CL requires an intentional deception and there had to be reliance on that misrepresentation
 See also… [to the buyer]
 Negligent Misrepresentation = there were red flags, but never checked and misled seller
 Innocent Misrepresentation = honestly think house is fine and see no red flags, but incorrect
 Consumer Registration = implied warranty
 Strict Liability

 FINANCE / CONVEYANCE
 Real Estate Finance: Seller
$$$ deed
 The Main Players = seller; buyer-borrower; lender
 All giving something up & getting something Mortgage:
Buyer-
Lender
 Lender = always has duty to foreclose on default “deed of trust”
Borrower

 MAYBE  Trustee [duty to

note
foreclose on
 Property conveyed “in trust” to a trustee default]
Trustee

 who acts for the benefit of the lender

 Has power (upon default) to hold a private sale
 Only for “deed of trust” mortgage
 Otherwise, “note” goes together with “mortgage”
 Government Loans:
 Fannie Mae (FNMA) = not a primary lender; purchases and guarantees payment of loans to
secondary market investors

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  Freddie Mac (FNMC) = publicly traded & gov’t sponsored; expanded secondary market for
mortgages
 Ginnie Mae (GNMA) = fed gov’t corp. that guarantees securities that underwrite mortgages

 Credit Quartet:
 (1) Interest Rate (%) = can be fixed (remains the same throughout mortgage) OR adjustable (based
on fluctuating index)
 (2) Duration of payments = common for fixed-rate residential mortgages
 (3) Amortization = separating the payments for the loan principal and interest into periodic payments
to where the loan is paid off at a specified time
 (4) Amount financed = the principal
 Types of Mortgages:
 Straight Mortgage = go to court/auction [Judicial foreclosure]
 Property gets foreclosed and auctioned off at sheriff's auction
 Similar to “deed of trust” in all other aspects
 Deed of Trust = private sale [attorney conducts]
 Borrower, lender, seller, and trustee conduct foreclosure sale
 NO COURT ACTION NEEDED
 Default on payment leads to private foreclosure sale
 Lender gets everything in their favor bc risky money (trustee acts on behalf of lender)
 Duties of Trustee = sale must be properly advertised; must specify time, place, and forum of
the trustee’s sale; requires a reasonable auction
 FOR BOTH
 Valid security interest; can be sold; timely payment is essential; insurance requirement on the
borrower; due on sale clause; right to reinstate; default/accelerate for any breach; trustees can be
replaced; releases issue upon full payment
 Promissory Note:
 A promise to pay a certain amount on certain date(s)
 K that has an accelerated clause  permits the lender to “accelerate” which makes the entire
outstanding debt due immediately (foreclosure time!)
 Deed:
 Must be lawfully executed and delivered
 Must be in writing; signed by grantor; lawfully executed in accordance with statutory
requirements
 Standard of delivery  accomplished when grantor manifests the present intent to part with legal
control, regardless of whether the deed instrument is actually or literally transferred to grantee
 Covenants: [SECQED]
o Formal agreement/promise (usually included in a K) to do or not do particular act
PRESENT FUTURE
- Breached (if ever) at the instant of delivery - Not breached (if ever) until future date when grantee is disturbed
- SOL begins from moment the deed is delivered in possession
- SOL will not begin until that future date
S = Seisin E = Against C = Right to QE = Quiet D = Defend Title
Encumbrances Convey Enjoyment
grantor promises grantor promises that grantor promises grantor promises that grantor promises to defend grantee against
that he owns the there are no that he has the grantee will not be any lawful claims of title asserted by
land that he now servitudes or liens on power to make this disturbed by a 3rd party’s others
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 conveys the property transfer lawful claim of title
grantor promises to do whatever future acts
are reasonably necessary to perfect
grantee’s title if it later turns out to be
imperfect
 TYPES:
 Quitclaim Deed =
 NO COVENANTS
o Worst deed for a buyer, as grantor is not even promising that he has good title to convey
 Simply a declaration of record that the seller has no interest in the property
 Used just to clear things up on the title
 Not promising anything; no rights to the property
 General Warranty Deed =
 SIX CONVENANTS
 Grantor willingly assumes the sins (if any) of predecessors, and promises grantee that grantor
will be held accountable
 Promise that the title is valid against anyone
o Grantor warrants title against the world
 Limited/“Special” Warranty Deed =
 Grantor only speaking upon his own actions, not predecessors
o Warrants only against defects created by grantor
 Only promises:
o Grantor has not conveyed property to another
AND
o Property is free from encumbrances created by grantor

 FORECLOSURE
 Equity of Redemption:
 Dying doctrine
 Could redeem property if made payment within a certain time
 Upon payment, deed would be nullified
 Upon default, deed would be absolute
 Highly limited after auction
 Based on Old English history (not likely nowadays)
 Most states hold you can pay loans up until they foreclose
 Clogging Doctrine: prohibition on the erection of artificial barriers; or “clogging” the equity of
redemption except in a “workout”
 What banks do
 Wrongful Foreclosure:
 Tort action  P must prove that when the foreclosure proceeding begun, there was no default on
their part that would give rise to a right to foreclose
 Damages are only available when the foreclosure was absolutely void bc the mortgagee had no
right to foreclose at the time they attempted foreclosure

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 LIENS

 A security interest or legal right acquired in one’s property by a creditor

 Stays in effect until underlying obligation to creditor
 Can arise automatically by operation of law; no private foreclosure
 Vendor’s Lien:
 In favor of bank bc they provided money
 Judicial foreclosure
 Purchase money; whoever gave buyer money to purchase property has a lien that arises by law
 If bank finances  deed will say… “seller assigns its Vendor’s Lien to BANK”
 Construction Lien:
 A contractor who does work has a lien and can foreclose
 If a subcontractor is not paid… then a lien arises for them even if general contractor is paid

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IV. REAL ESTATE

 TITLE
 Types:
 Record Title = “of record”; whoever is listed in the record
 Does not actually get you the title
 Won’t show adverse possession
 Good Title = title can be defended against anyone who might claim it through litigation
 A challenge in court, but could win it
 Usually shows adverse possession
 Marketable Title = beyond reasonable doubt you have a better than good title and can
defend it
 No one will question title
 No one has been adversely possessing it
 Marketable Legislation:
 Any interest goes away after period of time UNLESS it stays “on record”
 Insurable Title = insurance on title by a company
 Does not have to be a record title
 Objective
 Limited  unless extra K liability

 Public Recording System 😈🏃🏃:

 All about evil satanic people selling property twice!!
 Bona Fide Purchaser [BFP] = for buyer to qualify as such…
 Buyer had to purchase for value
 Could not come to claim by will (devise), descent, or gift
AND
 At time of purchase, buyer had to be without notice that another got there first
 RULES:
o BFP  Notice Jurisdiction  BFP wins regardless of whether they record 1st
o BFP  Race-Notice Jurisdiction  BFP wins only if recorded 1st
 Notices:
 Constructive/Record = if recorded and didn’t check
 Actual = buyer actually and literally learned that seller is an evil double dealer
 Inquiry = buyer had duty to inspect before closing; a suspicious buyer should investigate
 Statutes/Jurisdiction:
 (1) Pure Race Jurisdiction
 Winner = 1st person to record has title!!
 Does not consider recorder’s status as BFP

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  Can award fraudulent people
 (2) Pure Notice Jurisdiction
 Winner = B wins if they have no notice (regardless of if they ever record)
 Buyer should still record promptly and properly to avoid any disputes
 (3) Race-Notice Jurisdiction
 Winner = B IF: 1st to record & has no notice

 Chain of Title:
 The historical record of ownership transfers of a specific piece of property
 The sequence of recorded documents capable of giving record notice to later takers
 Problems  Reasonable Title Search = search of the public records for any defects or encumbrances
in a property's chain of title
 Looks at what each owner did while they owned the property

 CLOSING
 Should be quick, uneventful, and mechanical bc it is simply an exchange of [signed] forms, and money
should be in escrow
 Termination…
 (1) …under option =
 Giving buyer an option (of usually around 30 days)
 Buyer must watch time and perform appropriate steps before it runs out
 (2) …for failure =
 Usually can terminate
 Either reasonably clear to buyer OR the seller is willing to return to marketing the property
 Buyer must act IF
 Buyer is unable to obtain financing as provided by agreement
 The title does not meet its requirements
 The inspections lead to a decision to terminate
 (3) …due to breach =
 Ex: late discovery of second easement; encumbrance; sellers’ position
 Destruction/Loss of Property Before Closing:
 Views =
 Majority View  From time of K to closing, loss/burden is on buyer
 Burden/loss on party in possession
 Burden/loss on the seller
 Solution = spell it out in K what happens!!
 Breach of K Remedies:
 Have to put innocent party in position as if there had been no breach = make whole again
 Must be proven with reasonable certainty
 Remedies for Buyer = seller must try to resell
 Damages; earnest money; mitigation
 Actual Damages:
 Expectation = they should get benefit of the bargain
 Consequential = foreseeable loss; beyond the market value if there were things that were
foreseeable; usually not mental distress; on top of expectation damages
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  Incidental = out-of-pocket
 Liquidated Damages:
 Elements: RAP
 R= reasonable estimate
 A= actual damages difficult to calculate
 P = parties intended to liquidate damages (in K)

 Equitable Remedies: (NOT $; except for attorney fees)

 Specific Performance = property is unique  must have that property bc it’s what was wanted
 Money will not make wronged party happy here
 Applies when the remedy at law is inadequate
 Property is always irreplaceable
 Also  injunctive relief; restitution; constructive trust; resulting trust; equitable liens;
accounting; back pay; subrogation (insurance co. now owns claim); declaratory judgement (court
will determine answer to disputed information); recession (K over); reformation (court fixes K)
 Lis Pendens:
 Pending land disputes that are of record
 Record a document that says seller agrees to sell property to buyer
 Seller now can’t sell property to anyone else
 Declaratory Judgement removes it

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V. LAND USE REGULATIONS

 TAKINGS
 Taking: physically occupying property
 A regulation that wholly frustrates the owner’s reasonable investment-backed expectations, or
otherwise renders property completely useless
 NOT a taking  limitations that allow a reasonable use or ability to exploit ones property
 TYPES:
 Per Se Taking = a physical invasion
 Temporary Taking = must be compensated for the amount of time owner could not build
 Requires compensation, otherwise cities could just regulate until they get caught by courts
 Ex: amount of income they lost; the difference in costs to build now
 Also: rent regulations; price regulations; moratorium on construction
 Metaphorical Taking = so many restrictions that property has no value/use to you anymore
 Eminent Domain Taking = gov’t taking private property for public purposes
 5th Amendment: Due Process:
 Government can take your land IF…
 They provide just compensation
 Paid fair market price
 Exceptions: Can’t find at time of the taking; manifest injustice
AND
 It’s for reasons that benefit society
 The health, safety, and welfare of fellow citizens
 Essentially government just need a rational basis to “take” property
 Deference to local government
th
 14 Amendment: Equal Protection
 Can only claim if government took property through unequal treatment
 Low standard = as long as gov’t wasn’t being totally irrational, they will fulfill test
Any plausible reasoning will do, but there must be a reason
 Regulatory Taking = Tests…
 (1) Loretto Test: a gov’t regulation is a taking when the gov’t authorizes a permanent physical
occupation of real/personal property
 LoreTOE  permanent physical occupation
 (2) Lucas Test: a taking when the regulation causes the loss of all economically
beneficial/productive uses of the land, unless the regulation is justified by background principals
of property/nuisance law
 Lucas = USELESS  valueless & noxious (nuisance)
 (i) IF useless = taking
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  (ii) IF [nuisance]
 Valid = NOT taking
 Invalid = taking
 (3) Nollan-Dolan Test: regulation is a taking if the gov’t demands an exaction that lacks a nexus
with a legitimate state interest, or lacks proportionality to project’s impacts
 Exaction = a requirement that the developer provides specified land,
improvements, payments, or other benefits to the public to help offset the
project’s impacts
 Is the gov’t demanding that the owner must convey property rights in
exchange for approval of project?
 (a) Nollan = nexus  there must be a connection between the burden you’re creating and
what the gov’t is trying to limit/regulate
 Is there an essential nexus?
 Nollan = Nexus = con-NEX-ion
 (b) Dolan = proportionality  gov’t may not place land use restrictions on property unless
there is a rough proportionality between the conditions imposed and the impact of land use
 Is the exaction roughly proportional?
 Dolan = dole out portions = proportionality
 (4) Penn Central Balancing Test: Consider 3 Factors…
 C (character) OI (owner’s investment) EI (economic impact) PPPish [koi fish]
 C = (a) the character of the gov’t action involved in the regulation
 If the gov’t’s action is a physical action, rather than a “regulatory invasion,” then the
action is almost certainly a taking
 OI = (b) the extent to which the regulation has interfered with the owner’s reasonable
investment-backed expectations for the parcel as a whole
 EI = (c) the regulation’s economic impact on the affected property owner
 PPP = (d) physical invasion (e) broad public purpose (f) comprehensive plan (not
predictable)

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  Remedies:
 Compensatory Damages
 Inverse Condemnation = when gov’t takes property for public use that greatly damages the value
 Property owner must show that gov’t’s taking has failed to promote substantial gov’t interests
OR has deprived the owner of the economic value of one’s property

 ZONING – Public Regulations

 The Nuisance Action: (Old Common Law)
 Public Nuisance = hurting public safety
 The activity itself is bad!
 ELEMENTS: [ICUP]
 I = Injurious activity
 C = Continuous
 U = Unreasonable or unlawful use
 P = Proximate cause of harm to public health/safety
 Private Nuisance = hurting neighbor
 ELEMENTS: [UP(IRN)]
 U = Unreasonable result from interference/invasion to the property
 P = Proximate cause
 (IRN) = Intentional/reckless/negligent
 Can be legal and not intentional if reckless or negligent
 The activity was intentional, but not the harm
 Zoning Action Views:
 (1) Administrative View = Board members (not legislatures) oversee comprehensive plan
 Not used much
 (2) Legislative View = hearings required to establish or change zones
 More common
 Non-Flexible Zoning (Euclidian Zoning)
 Euclidean Zoning: land regulation that divides municipality into districts and has specifications
 Can only do in the zone what that zone permits you to do
 Remedy = political (not legal)
 State Zoning Enabling Act (SZEA):
 Zoning requires comprehensive plan done for public safety, health, and general welfare
 If there is a plan  no taking!
 Exception = Spot Zoning (plan is unreasonable or targeted)
 Approaches:
 Up-Zoning = increases value
 Down-Zoning = decreases value
 Extension Zoning = redrawing of borders to expand/contract an existing zone rather than create
new “gallstone” zones within a zone
 Spot Zoning = does not conform to a comprehensive plan at all  illegal
 Benefit of a single party/entity
 Aesthetic Zoning = requirement to build in a certain way and style
 Objective standard
 NOT OK = “it has to fit the vibezzz”  too vague [that one cannot follow]

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  Exclusionary Zoning = to exclude from single-purpose-areas (particularly residential) land uses
that are incompatible with primary land use
 NIMBY = Not-In-My-Backyard
 Cannot outwardly discriminate (14th Amendment)
 Performance Zoning = any land that complies with set standard for district is permitted

 Flexible Zoning (Non-Euclidian Zoning)

 Non-Euclidian Zoning: signals that a model is not based on the rigidly defined use districts of
Euclidian models
 Use Permits:
 Special/Conditional Use =
 Special permission to build something where it will not normally be, but with conditions on it
 Use of property for a purpose; some conditions on the property
 Allows something that should not technically be there
 Non-Conforming Use =
 The zoning classification has changed  someone relying on previous zoning is now not
conforming to zone
 When immediate removal would cause hardship, zoning ordinance may provide for toleration
of the nonconforming use for a period of time
 Amortization period  grace period
 Designates period of time granted to landowners of nonconforming use
 Destroyed property cannot be rebuilt to continue non-conforming use
 Floating Zones:
 An un-zoned area with nothing on it
 Specifies standard without designation of any geographical area;
 Usually used for undeveloped land [to then impose zoning when it is time to build]
 Plan entire development  get it accepted  then zone it
 Cluster Zoning = enables developer to qualify a unique “planned unit development” that includes
different kinds of uses and that varies from precise zoning requirements
 Planned Unit Development (PUD): large area (compromising multiple structures) is designed
as a whole, in a way that does not conform to zoning requirements imposed elsewhere
 Variances
 Permits use of property that conflicts with zoning category where there would be unnecessary
hardship if not allowed; permanent
 CONDITIONS: = HARDSHIP
 Can not be contrary to public interest
 Hardship = special conditions exist (literal enforcement would result in unnecessary hardship)
 The spirit of the ordinance is observed
 Substantial justice will be done
 Use Variance: permit a use of the property that conflicts with zoning categorization
 Area Variance: allows structures on the land to be built with more/less physical characteristics that
would conflict with zoning ordinance
 Subdivision Regulations:
 Plat = developer produces architectural plans drawn on the map

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  Process: Developer produces plat that is reviewed by an entity  any department may request
alterations  once recorded, developer can sell individual lots
 Once plat is approved, neighboring landowners do not have private cause of action against
the developer to challenge the community effects
 “Hold Zones” = prevent development on designated property
 Not a taking if it covers something…
 essential; short-term; narrow; shared among multiple landowners
 Extra-Territorial Jurisdiction  city can expand city limits by controlling property outside of
boundaries (problem when two cities collide)
 Environmental Regulation  Comprehensive Environmental Response, Compensation, and
Liability Act [CERCLA]
 Authorizes gov’t to remove hazardous materials and then to seek compensation from
potentially responsible parties by imposing liability on them
 Current owners; past owners; treatment/disposal person; transporters

 SERVITUDE / EASEMENTS – Private Zoning

 A family of non-possessory interests in land:
 Easement
 License
 Profit
 Covenant
 Equitable Servitude

 Easement: non-possessory interest in land providing the dominant estate holder rights against the
servient estate; right to do something
 Means by which a landowner grants another person the right to use the landowner's property for a
specific purpose
 Affirmative Easement = gives its holder the right to do something on another’s land
 Negative Easement = entitles its holder to compel the servient landowner to refrain from doing
something that would otherwise be permissible
 EITHER…
 Appurtenant to Land = benefits the easement holder in his physical use/enjoyment of own land
 Must have a dominant estate and servient estate
 Passes automatically with the dominant estate (and servient estate)
 Not personal to a particular holder
 In Gross = when it grants upon its holder only a personal or commercial gain
 Does not involve a dominant estate; can be transferred independently of any dominant estate
 Not transferable unless it is for commercial purposes
 Formation:
 (1) Expressed by agreement
 (2) Implied through…
Necessity Prior Use Prescriptive Public Dedication Estoppel
Elements: Has always been used Basically adverse Use alone Equity Including
 Unity of title possession Estoppel
 Severance Elements: Elements:
 Necessity at  Common Elements:  Landowner inducement of Elements:
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 time of ownership  Open belief in dedication  False
severance  Pre-existing  Notorious  Landowner competence Statement
 Necessity  Adverse  Public reliance + service (promise)
 Continuous by dedication  Relied upon
 Public acceptance

 License
 A freely revocable mere privilege to enter another’s land for some narrow purpose
 At the will of the licensor (unless estoppel applies)
 Right to come onto land to do something
 Non-permanent variation of easements
 Profit
 Entitles its holder to enter the servient estate and take from it
 Right to enter another’s land and exploit product/profits of the land
 Covenants
 Real Covenants: a promise to do or not do something related with the land; arises from K
 “Covenant that runs with the land” = covenant enforceable against and/or by future owners
 Spencer’s REQUIREMENTS: [In writing]
 Intent to run with the land (as opposed to being a personal obligation)
 Touch and concern land (not attached to person; not
personal)
 Vertical privity (successors to dom/serv)
 With last person on their property
 Horizontal privity
 The nexus between the originally conveying parties
(who were successions of estate)
 In connection with conveyance; created with transfer
of property
 Abolished by Restatement bc too easy to overcome
 Restrictive Covenants = a promise to refrain from doing something related to land
 Majority of covenants are restrictive
 Affirmative Covenants = a promise to do something related to land
 Equitable Servitudes
 A promise that equity will enforce against successors (with injunctive relief)
 Implied by courts where the requirements to establish a real covenant fail
 Where it would be unfair to allow a purchaser of land to ignore clear evidence that use of nearby
parcels by implication limited the use of an adjoining parcel to similar, residential purposes
 “Reciprocal Negative Easements” = imposing restrictions bc obviously that was not intended
 Servitudes:
 Describes an interest in one person’s land held by another person; regulates relationships
 Can…
 …be expressly conveyed (as by written easement or covenant)
 …arise from implication in a multitude of ways
 …be modified or terminated by agreement or implications
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 
RIGHTS GRANTED:
 Affirmative Use + Access = gives the owner a privilege to exploit the land of another
 Negative Obligations = prevents landowners from doing something
 Affirmative Objections = a duty
 “50 Shades of Grey” Terms:
 Dominant Estate = parcel that obtains benefits
 Servient Estate = parcel that is burdened
VI. COMMON LAW ESTATES

 POSSESSORY ESTATE
 Fee Simple  from grantor “to A and his/her heirs…”
 Indefinite duration; cannot create a future interest; freely devisable, descendible, and alienable
 Signifies that “A” gets everything and can give it away when they die
 The “heirs” are not guaranteed anything; “A” owns all the legal rights
 Not even used anymore
 Gives maximum away; implication is that when “A” dies it goes to their “heirs”
 Life Estate  from grantor “to A for life…”
 Automatically creates a future interest; “A” receives property until their death
 If nothing else said, after “A” dies… property goes back to grantor (and then their own heirs)
who gave property to “A”
 Must name a REMAINDER  or else REVERSION occurs
 [See “FUTURE INTEREST” below]
 Fee Tail  from grantor “to A and the heirs of his body…”
 Property passes directly to “A’s” lineal blood descendants (no matter what)
 Virtually abolished today
 Term of Years  from grantor “to A for # years…”
 Essentially a lease

 FUTURE INTEREST
 Reversion  from grantor “to A for life…” [and nothing else noted]
 Back to grantor (who needs to be alive)
 Grantor transfers a shorter estate than they own
 Grantor with a Fee Simple transfers a Life Estate
 Remainders  from grantor “to A for life… and then to [remainder] and his/her heirs…”
 Who personal property goes to after “A” dies
 Class Gifts = Remainders in a class are…
 Contingent IF no member of class yet exists
 Vested IF all possible members exist
 Vested Subject to Open IF more member come to exist
 Contingent Remainders 
 If created in an unascertained; an unknown person is subject to a condition precedent; or both
 If contingency gets removed, then the Remainder’s interests vests
 Vests = when property is secured; the beneficiary of the right or property interest
is certain to receive a specific amount, either now or in the future
 Condition Precedent  “if”

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  The condition may or may not occur
 Ex: “to A for life, and then to B if she survives C…”
 B’s interest is contingent on them surviving C
 Unascertained Holder  “children” [if no children born at the time]
 It is not possible at the time interest is created to identify the people who will take possession
 Ex: “to A for life, and then to his children…”
 At the time interest is created, A does not have children

 Vested Remainders 
 If no contingency or unascertainable
 Indefeasible 
 No condition; not to be lost, annulled, or overturned
 Ex: “to A for life, and then to B…”
 Vested Subject to Open 
 If more members come to exist
 Ex: “to A for life, and then to A’s children…”
 Vested Subject to Divestment 
 The interest can be taken away under the circumstances
 Ex: “to A for life, and then to B, but if B divorces, then to C…”
 Executory Interest 
 Cuts short an existing estate
 Shifting  follows a grantee [“A”]
 Diverts the estate of “A”
 Ex: “to A for life, and then B and her heirs; but if B marries C, then to D and his heirs…”
 The interest for B can be cut short and shifted to D
 Springing  follows a grantor
 Leaves a gap in between the preceding interest and executory interest
 Ex: “to A for life, and then one year after A’s death, to B…”
 Interest from A sprung to B after one year of A’s death

 DEFEASIBLE FEES
 Cuts the interest short; cuts short an inherently permanent estate
 FEE SIMPLE TYPES
 Determinable  “until”; “so long as”; “while”; “during”
 The interest ends automatically upon the occurrence of an event
 Possibility of a Reversion
 Ex: from grantor “to A and their heirs so long as A does not divorce…”
 The interest reverts back to grantor if A divorces
 Subject to a Condition Subsequent  “but if”; “provided, however”; “upon the condition that”
 A condition that permits grantor to terminate
 Creates a right of entry
 Ex: “to A and their heirs, but if A divorces, then grantor and his heirs shall have the right to enter”
 Creates a condition that the grantor could cut the interest short if a condition is met
 To an Executory Limitation  “but if”; “on condition”; “however”
 Does not revert back to grantor  not retained by grantor; given to a 3rd person

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  Shifting =
 Ex: “to A and his heirs, but if property is not used residentially, then to B and her heirs…”
 Springing =
 Ex: “to A and his heirs, but if property is not used residentially, then to B five years later…”

 MODERN MARKETABILITY
 Restrictions on Alienation 
 Cannot give property in Fee Simple Absolute with a restriction on it
 Some states allow a partial restriction
 Rules Against Perpetuities 
 No interest is valid unless it must vest (if at all) with the lives being +21 years
 Limits on ancient grantor’s ability to create contingent interest far into the future
 Limits a non-vested interest by a period that will end 21 years after the deaths of the identified
living persons
 Modifications:
 Savings Clause = included a granting clause that states every interest will vest one day before the
end of the perpetuities period
 Replace the “what might happen approach” with the “wait and see” approach
 Disadvantages = no one knows what will happen in the future
 Reformation = changing the terms
 Court revises K to make the gift vest in time to avoid the rule
 Reduction of the age category
 Revising age to 21 years old
 Ex: if the interest vests when the remainder turns 35, it just changes to 21
automatically
 NY Rule = if a grant is contingent upon the recipient’s reaching +21 years old, the
condition shall be reduced to avoid a violation
 Applies to:
 Contingent Remainders; Vested Remainders Subject to Open; Executory Interest
 Does NOT Apply to:
 Vested Interests that are Defeasible; Fee Simple Determinable; Fee Simple Subject to a
Condition Subsequent; Future Interests; Charitable Trusts

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VII. LEASES

 TYPES
 Estate for a Fixed-Term/Years
 Elements:
 A tenancy with a definite length
 Notice not necessary to terminate
 >1 year must be in writing (SOF)
 Periodic Tenancy with Automatic Renewal
 Extends itself for successive specified periods unless proper notice termination is given
 By landlord or tenant
 Tenancy at Will
 Terminable at the pleasure of either party; has no fixed termination
 No fixed period/duration; lasts as long as either landlord or tenant desires
 Tenancy at Sufferance
 Results from rightful beginning of the process… followed by wrongful retention after the estate has
terminated
 Tenant who holds over may become a Tenant at Sufferance at least until the landlord treats tenant as
either: trespasser OR a periodic tenant
 When a tenant has wrongfully held over (past conclusion of OG lease)… landlord can continue to
recover rent
 Statutory Tenancies
 Regulate the circumstance of notice, thereby changing the periodic tenancy
 Ex: rent control
 Trespass
 Some occupiers of land are trespassers
 Squatters!!!

 TRANSFER OF LEASEHOLDS
 Ask: What does the K say? What has been agreed to?
 Kendall Case
 Majority Rule  allows landlord to refuse consent; landlords allows that level of discretion
 Minority Rule  must be a commercially reasonable ground
 A “mix” is reasonable

 ASSIGNMENTS

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  Elements:
 All of the lease is transferred
 New tenant liable for destruction
 1st tenant gone
 New tenant has taken over every obligation
 Rule = landlord basically has to let assignment happen; must have a reasonable reason to deny it; OG
tenant (assignor) can ask for lease back if new tenant stops paying rent

 SUBLEASE
 Elements:
 Only a portion
 Right to enter
 Lessee stays on
 Just giving a portion of lease property right; subleasor still on the hook & has right to reenter

 RENT CLAUSES
 Types
 Fixed
 Percentage
 Escalating
 Triple-Net
 Tenant Responsible for TIM = Taxes; Insurance; Mortgage
 Only for commercial

 SNDA CLAUSES (SNDAS)

 Tenant signs agreement acknowledging that lender can foreclose on the property
 If lender forecloses, then…
 Subordination
 Lease to lender; making existing lease junior
 Non-Disturbance
 Lender promises to not disturb
 Many states will say that this is only if lender elects to keep lease
 Attornment
 Tenant agrees to pay if lender elects to keep the lease
 Second Subordination
 Lender gives up 1st subordination and allows lease on the property to be the senior

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