Bundle of Sticks-classic theory; one owns a number of distinct rights that may be individually separated from the bundle: (EQUA DPIM) a. Exclude others (most important stick in bundle) b. Quiet enjoyment c. Use the land d. Alienate (sell/lease/give away) e. Develop the property/natural resources f. Possess g. Receive/earn Income from the property h. Manage the property i. Critiques: Unrealistic to have all rights and no duties; disconnects from context of the environment and others who hold interest in it. B. Web of Interests-modern theory preferred by Arnold a. Property is in the center, w/ several entities who have varying degrees of different interests in the property that are balanced. C. RTE Basic Principle –RTE is so important to the essence of property and society that courts authorize punitive damages for willful trespass even when actual damages are nominal. PP: a. Legal protection of RTE advances several values served by property: individual freedom and autonomy, the economic value of land (both socially wealthmaximizing and personally utilitarian), and personhood due to the ways in which an owner’s relationship w/ property helps to shape his identity. b. If landowner could not exclude unwanted trespassers, the other rights in the bundle, such as alienation, possession, and use, would be vastly diminished in value and utility. c. Society has a strong interest in preventing trespass d. Promotes social order: Society disfavors self-help with regard to land because more likely to result in violence e. Promotes economic productive use of the land f. Yet RTE not absolute b/c property serves human values. Courts may treat the owners’ property rights as BoR, by which legal and political institutions determine the scope of the rights according to social values. Courts might treat the owners’ property interests as a WoI, in which there are many different interestholders in the office complex. These interest holders may have varying degrees of interest in being present at Dr office or in excluding the uninvited from the complex; there is not just a single holder of the RTE in the WoI. 2 relevant exceptions: i. Invitation and Basic Services: when an owner of property has invited others onto his property, in part for his own benefit, he cannot exclude those seeking access to the invitees to offer basic services that meet their needs. • PP: 1) when landowner voluntarily invites ppl onto property, the landowner’s reasonable expectations about the RTE are diminished. 2) those legally present on another’s land at the owner’s invitation have interests in meeting basic human needs, in personal dignity and autonomy, and these values must be weighed against the owner’s

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control over his land 3) societal interest in the poor having access to services 4) law protects against the exploitation of those with relatively weak bargaining power. ii. Invitation to the Public and Public Forum Equivalency: when private property has become the equivalent of a public forum, the expressional interest of those attempting to reach the public may outweigh the private property owner’s RTE, subject to the owner’s right to impose reasonable limits aimed at avoiding excessive disruption. 1. Schmid Test (minority): In determining the existence of free speech rights on privately owned property, consider 3 factors: a. normal use of property i. Although the property is large – consisting of six 2story buildings – and therefore might be seen as hosting a variety of activities, it is substantially different than a regional shopping mall. People generally do not go to a commercial office center to congregate, hang out, communicate with one another, and build community in the ways that they do so at a large regional shopping mall. Most commercial office centers do not convey a community image and do not have many characteristics of public property. b. extent of public’s invitation to use i. The extent and nature of the public’s invitation to use a commercial office building is much more limited than for a regional shopping mall. The expected invitee is not the all-inclusive (or at least hopefully so for retailers) American consumer; the expected invitee is a much smaller class of consumers of particular professional and business services. On the other hand, it is reasonable to assume that owners who lease to MDs who perform abortions can anticipate that both patients and antiabortion protesters will be attracted to the property c. purpose of activity in relation to property’s public & private use i. Purpose of the expressional activity is to convey a persuasive (and perhaps upsetting) message to medical patients considering an abortion in a way that will convince them not to have the abortion. The activity is discordant with the normal use of the property for medical offices, because the protesters seek to deter others from using Dr. Land’s services; the anti-war protesters in Shack had no antishopping message. On the other hand, the expression of an anti-abortion message arguably has

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few effective channels, and the handing out of leaflets at an abortion clinic or medical office is one of the most effective means of communicating the intended message. 2. Bundle of Sticks: owner lacks a property right because his RTE has been taken or severely limited 3. Web of Interests: owner can simultaneously have property rights and have limits to his RTE 4. PP: 1) society has a particularly strong interest in free expression of ideas 2) personhood due to the ways in which the relationship w/ another’s property forms their identity 3) property functions as a social setting. Trespass to Chattels Principal Problem i. Issue: Will A be able to obtain-or can she reasonably seek-an

injunction to prevent Carl from leaning on her car when it is parked on the street in front of his store, even though he blatantly disregards her requests that he not lean on her car and even though he does not cause (nor is likely to cause) any damage to her car? ii. In this case, Amanda will want to rely heavily on the RTE as a component of property ownership. The RTE is one of the most essential sticks in the BoS, and she therefore has the right to prevent Carl from leaning on her car. His blatant disregard for her instructions to not lean on her car is affecting the essential nature of the ownership of her car. The blatant disregard is evidenced by the fact he laughs at her and tells her to "chill out." Surely she should also be able to obtain an injunction. It affects personhood due to the ways in which the relationship w/ another’s property forms their identity. This would be her argument. She would focus on the dissent which adopted a WoI approach, asking whether the owner suffered economic loss generally from the trespass. However, note that Carl's blatant disregard for her refusal is a little bit different from Jacque in that Carl is not doing it in a sneaky manner, and he leans on his own car when it is parked there as well as hers. It is arguably not quite as egregious, but nonetheless, she is insisting than he not lean on her car yet he is blatantly disregarding and laughing at her. iii. To be entitled to an injunction to prevent ongoing or future TTCs, the owner had to demonstrate that D's conduct was: 1) harmful to the physical condition, the quality, or the value of the chattel (none); 2) deprived the owner of the chattel's use for a substantial period of time (none); 3) affected some other legally protected interest of the owner (right to exclude). One major problem is that a car is mobile personal property. A could avoid this (non legal solution). Whether A has an actionable trespass to chattels claim is based on part in that chattel owners can indeed engage in effective self-help by simply moving their tangible personal property out of the place of the harm, helping judicial economy. A might make an argument that the RTE is in itself a legally protected interest, but that is not a

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strong argument. Overall, b/c none of the elements for TTC were met, A is not likely get injunction. An actionable claim for TTC must show harm.

D. AP-- one can acquire legal title of land w/o payment of money and w/o the consent of the legal record owner a. Throughout the statutory period, AP is building an original title that ripens into a full legal title once the period has run b. During the interim period, AP is liable for damages in trespass and is subject to ejectment c. 6 requirements: each element is a particular characteristic of "possession," which is the exercise of "dominion and control" over the property i. Actual Possession-“dominion and control over land” which simply means treating the property how a true owner would – evidence includes: (POIMEST) 1. Physical Occupation 2. Improvements 3. Maintenance 4. Excluding others 5. Securing (building fence) 6. Taxes (paying)– required in some JX ii. Hostile Possession- without the title holder’s permission 1. Easily defeated by signposts which give others permission to use private land iii. Open & Notorious Possession-occupy property in such a manner as to put the whole world, including the title owner, on reasonable notice; means the degree use is consistent as the average owner would. 1. Enough that the title holder SHOULD know iv. Exclusive Possession-no one adverse to the AP v. Continuous Possession- AP must hold that property continuously for the entire SoL period; means the degree of occupancy is consistent as the average owner would. 1. does not require continuous physical presence (AP can vacation) 2. Tacking of possession by subsequent occupants legitimate provided the occupants are in privity. a. Tacking: Process where AP adds his period of possession to that of a prior AP. For tacking to be permitted, there must be privity between the possessors. Privity means one possessor voluntarily transferred possession to a subsequent possessor. b. Tolling Statute: where the state protects certain title owners from having AP run against them due to certain types of disabilities, like age. If state law unknown, mention there might be a tolling statute and you would have to research it and see if this situation would have a basis for tolling. 3. PP: gives the owner notice that possessor is claiming ownership, and that the entries are not just a series of trespasses.

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i. a claim of right is satisfied under hostility alone. Anti-wilderness bias (it undervalues natural state of the land) AP may claim all the rights in the bundle of sticks have been usurped Principal P: Under the objective test. Permits uncompensated wealth transfer ii. subjective test-good faith intent is required a. Judicial economy(Easier for court to use. Encourages productive use of land = reward the user iii. 2 different tests (differ by state) to determine this: 1. There is an argument that the court would view the 3 months of O’s construction on BDGI consistent w/ Sims acting as a true owner would. C has a very good argument for AP if the court follows the objective test because in that case she has met the 6 elements. f. The title-holder will win. PP(also look at PP for AP in general) i. Discourages neglect of land = penalize the neglecter 1. Possession Under Claim of Right-extent to which the AP has some sort of legally legitimate claim to ownership of property. h. less evidence needed) + integrity (Discourages perjury) Causes of Action for AP (Should bring all 3 even if client only wants one) i. Third party expectations: people come to rely on AP PP against AP i. action for quiet title = declaratory judgment defining who has title PP for AP i. AP has to believe that the property is his b. personhood-people develop a personal attachment to their land. There are a couple of concerns however. Principal P: Sims AP land from BDGI by paving it in 1984. Social order: Provides an orderly and stable means for resolving boundary disputes – without it. and C will lose. which is related to the web of interest approach ii. even BCHI. Sims loses altogether. you would have disorderly self-help. iv. if the court follows the subjective test because she did not have a good faith belief that it was her own. objective test-claim of right satisfied by hostility alone a. AP wins less often which protects third parties who rely on deed records. action for trespass = money damages ii. The AP by Sims of CDGH was ended in 1994 b/c O paved it. etc. Current as of 1/10/2012 Page 5 of 40 . action for ejectment = injunction to recover exclusive possession iii. and merely giving his O a brief period of time to use it. If continuity and exclusivity is interrupted. O never did anything about the paving and the use of his land up to 1994. Downside—judicial economy + integrity compromised? 2. v. fire hazards. c. e. Neglect leads to public health problems. May reward theft iii.d. vi. g. court should not produce unjust results simply because it might take extra time and effort to try to ascertain the possessor's subjective state of mind. PP--Discourages theft. The taxes and the title-holder leaving some property raise some exclusive possession issues.

Exclusive Possession – dominion and control and the RTE others? 1. definite description of the property leased iii. alienation c. Bundle of Sticks: LL transfers sticks including RTE. E. At most K. and use. but the ways that the owner is connected to the land. contract – for possessory interest in the land ii. the tenant. Sim's attorney would say Sim's has AP possessed BDGI. Web of Interests: not just the LL-tenant relationship. f. Used “lease. Express terms regarding parties' intent to reach a lease or license are persuasive to a court. Sporadic use of premises with shared control by owner with each use can never be deemed as exclusive possession iii. use of land. ii. and could incentivize K negotiation in future 2. Pen will argue that he has title to BDGI. Must show i. Not assignable. Alternatively. No assignment provision could mean lease b/c it expressly says so i.therefore meeting the two requirements. limited possession of location 2. looks like license Current as of 1/10/2012 Page 6 of 40 . may be oral or written. neighbors. conveyance – of an estate in land b. Consider limited dates. License. To differentiate. Tenant prefers lease. etc. but he should not concede that up front w/o getting something in return. g.” court may adopt formalistic approach and go with it. Intention to establish the relationship of LL and tenant. Assignable i. Principal P: Note underlying interest: LL favors license b/c does not create any interest in the property for the licensee—licensee merely gets the right to enter. quiet enjoyment. Lease-unrevocable transfer of right of exclusive possession of the premises for the lease term. ii. occupy. Pen's attorney would then say Sim's clearly have not possessed CDHG. several factors to determine and effectuate parties intent: (EEARP) i. but not controlling and courts may determine if the whole agreement is in accord with this intent 1. and voluntarily put up a fence halfway at the CH line. Rent-if one isn’t paying. the gov’t. No assignment provision could mean license b/c restating the law iv. utility easement holders. Sims will not be successful for AP CDGH. Then Sims could concede that but at least maintain possession of BCHI. d. “Lessor” and “lessee” weaker than “lease” ii. LL Tenant relationships: Lease or License? a. and the ways in which each of these persons are connected to the land and to one another. It is both: i. agreement for rent to be paid at particular times during a specified term e. but the problem with that is he only possessed it for 3 months.revocable agreement authorizing licensee to use the land in possession of another i.

Tenancy at Sufferance. 9/13/11 to 9/13/12 with a monthly rent of $1k iv. actual physical possession-no one else in possession of the property 1. LAFA will argue % of profits looks like rent and therefore indicative of a lease 2. or at some reasonable time thereafter) b.1. Modern statutes require notice of intent to terminate. Lease: economic productive use of the land to keep team in town to pay taxes/ just as owner can make the licensee come and go at will. year to year. Type of Tenancy a. terminates either when: 1.holdover tenant remains after lease ends i. LL takes legal action to eject the tenant. Requires notice equal to the length of the period. PP: Implied b/c unconscionable for the tenant to agree otherwise ii. F. or 2. Tenancy for Years. LL doesn’t have to kick out any holdovers/trespassers Current as of 1/10/2012 Page 7 of 40 . Month to month until 9/13/12--ambiguity in the terms of the lease. but most courts would construe this as a periodic tenancy. thus giving the parties limited certainty as to the duration of the tenancy. legal possession-simply the right to move in (minority) 1. Modern statutes permit it to end upon length of period v. etc) i. PP/WoI reasons for choosing one over the other 1. Exception: Only 6 month notice for a year-to-year periodic tenancy iv. the licensee may also leave at will: flexibility of license comes at a price--city may be deprived of a reasonably steady income flow and may see a vacancy rate high enough to drive the building into a negative cash flow status. Until 1/1/12 (presume that it is going to start either at the point at which the parties have signed the lease. d. and duties in K a. LL’s Duties: Implied Duties (3 below). Deliver Possession at the Commencement of the Lease Term – deliver either: i. c. License: more economic productive use of land to benefit community/ characteristic of the property: taxpayer financed public stadium which construes against private parties/ promote judicial economy related to LL-tenant proceedings/ note that even if license. May be made terminable on some event--"When the war ends” iii. Periodic Tenancy-Continually renewing lease with no set ending date (month to month. Tenancy at Will.No designated duration and terminates at the will of either party. iii. team might get damages for breach of K/characteristics of relationship between interest holders and property: protect third parties who rely upon license 2. statutory duties.fixed time period i. LL accepts payment of the rent-.creates periodic tenancy G. City will argue % of profits not rent b/c not over specified term v. ii. Continues until proper notice of termination is given. terminates automatically at the date provided for in the lease ii.

Even w/o affirmative activity by LL. If T wants to stop paying rent in a constructive eviction. iii. 2. Actual Partial Eviction-tenant deprived of a significant portion of the leased property (deprivation cannot be de minimus) 1. approximately 5 ft by 48 ft.Note: Tenant must deal with AP/trespasser during lease term. he must abandon the premises and terminate the tenancy. ii. a. L delivered actual physical possession of the land to TriState. was adjacent to Theresa's building. 1. remedies when caused by LL –total rent abatement while remaining in possession. This strip. 1 week after the work began. adjacent property that he leased to Tri-State Auto Parks as a parking lot. offering instead proportionate rent abatement. this is not an actual total eviction. Tri-State's attorney sent a letter to Theresa protesting the encroachment and demanding that the work be stopped. remedy – monetary damages proportionate to reduced beneficial use and enjoyment 2. Is this an actual partial eviction? Ask is it significant? Current as of 1/10/2012 Page 8 of 40 . was on a 3 month vacation and could not be reached. Building was completed 6 weeks later. Tri-State stopped paying the rent. there might be CE iv. Substantial Interference of Quiet Enjoyment-tenant deprived of beneficial use and enjoyment that causes damages but falls short of CE 1. with the approval of L. Theresa. Theresa began using a strip of the land leased to TriState for the storage of garbage. remedies when caused by LL –no longer obligated to pay rent and may elect to terminate the lease. which was 3K/month. meeting the first implied duty. 4 ways below: i. but that are so substantial that results in actual eviction of the property. until tenant is restored to possession. L also owned v. Theresa unsuccessfully negotiated with Tri-State for additional space. and then. Not to Interfere with Tenant’s Quiet Enjoyment – LL has a duty not to interfere with the tenant’s possession during tenancy. However. 1.  b. Several yrs later the Health Dept informed Theresa that she could not continue the unenclosed storage of garbage on the strip b/c of odor and fire danger. Courts also look to a more equitable outcome based on the context. however. Actual Total Eviction-tenant is deprived of all of the leased property 1. Constructive Eviction-Interferences by LL that fall short of a physical exclusion. Tri-State did not object to this practice and later erected 4 iron posts marking the strip. began construction of an extension of her building that enclosed the strip. Discuss the rights of the parties. unless caused by LL. PP – tenants need a protection against LLs whose interferences fall short of CE Principal P: L leased building to Theresa. and L is suing for rent.

But fundamentally Tri-State has a right to exclusive possession of the land. 5. to Tri-State.not so substantial that results in actual eviction of property. Permissive i. 6. Tenant makes improvement to the property. Any potential for punitive damages here (Jacque) a. may make it significant. a. a stick of the bundle of rights. a court might be more inclined to view this as a substantial breach of quiet enjoyment because they can award some kind of damages that would get more at the true value of this land to Tri-State. Yes. Theresa tried to negotiate with Tri-State. Tenant is negligent and fails to reasonably prevent waste that could be prevented (ex. 4. LL has no cause of action against the tenant for doing this. But also consider previously it was not interfering with their use of property. The only way Tri-State will be successful in an actual partial eviction against L is if this is with L's permission. which is evident. or the court may go down the road to constructive eviction or substantial breach of quiet enjoyment. T has duty to report leaky roof) c. No. Also since Teresa is just a trespasser or AP. it is up to Tri-State to eject her. Tri-state may liable to LL for breach of duty not commit waste a. L transferred the RTE. Voluntary i. Tenant cannot affirmatively use the property in such a way as to damage or destroy it b. Has Tri-State been constructively evicted? a. b. the remedy of total rent abatement is a pretty serious remedy. While when Tri-State quits paying rent. Substantial interference of quiet enjoyment? a.3. even if it is significant. she will be in a slightly more sympathetic position than in Jacque. The fact that is going to be a permanent structure c. However. Implied Warranty of Habitability(residential): Current as of 1/10/2012 Page 9 of 40 . and clearly knew she needed their permission. Tri-State said no and she did it anyway. they want to claim actual partial eviction so they get total rent abatement. Presumably because L owns both pieces of land. This suggests that this is exactly the situation where courts may reconsider total rent abatement-proportionate rent abatement might be more appropriate. Ameliorative i.

while others are determined on a context-specific case by case basis (CBC) 1. repair. LL is not liable for defects caused by the tenant.requires LL to maintain reasonable bare living requirements fit for human occupation 1. septic/plumbing systems in good working order – CBC 5. iv. LL has reasonable time to repair after notice is given.i. hot water/heating system – BLR 2. Against PP to permit tenant to waive defects that make the premises uninhabitable. you are going to have to prove the damages from the loss of enjoyment. Remain in possession. building must be structurally sound – BLR 3. v. More favorable for the tenant to pursue the IWOH. pay rent. iii. In SIOQE. heat and electricity in safe working condition – BLR 4. Scope of Duty and Conditions that Constitute a Breach .some things are BLRs. deduct reasonable amount from rent 2. then you do with substantial interference of quiet enjoyment. Consider: you get more remedies for a breach of the IWOH. Remain in possession. Minority view on breach: When LL given notice of alleged uninhabitable conditions not caused by the tenants themselves. What is considered minimum conditions of habitability in some regions may not be minimum conditions of habitability in others (AC depends location) 7. rodent/insect infestation – CBC 6. Substantial compliance with building and housing code standards will generally service as fulfillment of LL's duty to provide habitable premises. Majority view on breach: If LL is unaware of the condition. 8. Arguable IWOH breach is at least a substantial interference of quiet enjoyment. such as minor water leaks or wall cracks or the need for paint. ii. because society encourages the enforcement of housing code by tenants. No waiver of a breach of IWOH --Tenant awareness of defects irrelevant regarding the LL's duty 1. Fair rental value of the premises Current as of 1/10/2012 Page 10 of 40 . Remedies for breach of IWOH 1. IWOH. vi. 10. seek rent abatement (partial or total if nature of condition is so extreme) a. Measures for determining the amount of rent abatement to which a tenant is entitled: i. 9. a LL's breach of IWOH exists whether or not he has had a "reasonable" time to repair. Minor deficiencies do not constitute a breach. But code violation is not necessary to establish a breach so long as the claimed defect has an impact the premises being fit for human occupation.

ii. Also. PP: Not all commercial tenants savvy enough to incorporate into lease. sculptor Nesa rented loft for 2 year term. the open area market has become virtually unusable due to severe flooding from recent rainstorms. 3. Neighboring property values would decline if there was no IWOH 2. Modern urban tenant does not have time to inspect premises and put them in habitable condition. Nonetheless. K rent may be considered as evidence of the fair market value of the premises as warranted ii. When LL showed Nesa the loft. Furthermore. i. he replied by saying that unless she was some sort of idiot. pay rent. Remain in possession. "percentage reduction in rent" method of measuring damages. as well as a common area to display and sell their art to the public. e. rescission (only if condition is very extreme) vii. but each loft has a microwave and a small refrigerator (but no stove). PP against IWOH: 1. May reduce the supply of low-income housing and raise its price 2. 3.1. Minority rule b/c commercial tenants should be expected to bargain for what they want the conditions should be. Not like residential lease where people may not understand their legal rights. Implied warranty of suitability for nonresidential property-. viii. Health impacts on society 4. he told her that one of 2 toilets was not operational but that he would repair it soon. Many artists choose to fix their lofts up in a manner that enables them to stay overnight from time to time so they can work on their artwork anytime they choose. Nesa discovered that the loft lacked hot water. Intent behind conversion was to afford artist-occupant a space to work on their art in their respective lofts. PP for IWOH: 1. seek damages 4. Nesa wants to stay in the loft for the community. In the summer of 09. it is a good location for Current as of 1/10/2012 Page 11 of 40 . After she moved in. Each loft contains a huge open area with 2 enclosed toilets. Thus. No kitchen per se. the complex also contains a large common area that was intended to be used as an open-area market where the artists could sell their wares to the public. When she complained to LL. she must have realized that such a cheap rental surely would be missing something critical like hot water.LL has implied duty at inception of lease that there are no vital defects relating intended commercial purpose AND that these essential facilities will remain suitable. Law protects against the exploitation of those w/ relatively weak bargaining power. the rent is reduced by the percentage that the enjoyment of the premises has been reduced as a result of LL’s breach. PP: Warehouse recently converted into studio lofts for working artists. This is anticipated to be a long-term problem b/c of construction issue. Nesa was pleasantly surprised by the low monthly rent for the loft of $600 per month. Paternalism d.

LL Argue: If conditions truly bad enough. Two toilets may indicate male/female as in commercial settings. Any residential use of the property is merely incidental to commercial use. IWOS and 2 non-working toilets be a breach? a. No.soliciting business because it is right by the train station and the major highway. then IWOH would apply. The primary purpose of the property is nonresidential. IWOS and lack of hot water? 1. which would mean IWOH would apply. IWOH and common area? a.customary that particular commercial building come with hot water. If in JX. Characteristics of property is located in industrial area. and therefore a reasonable tenant might reasonably expect that IWOH apply. Just b/c people sleep in the property. Perhaps it is a breach of an express agreement on his part. Artists who stayed overnight motivated by work. Customary usage of the loft units in the building is partially residential. Might be vital defect relating to intended commercial purpose (art). consider the nature of the property such that the parties reasonably intended that it be used at least in part for residential purposes. If so. She comes to you for advice and asks you: 1) whether an IWOH has been breached with respect to the toilet. Nesa can go home. IWOH? a. but this is only applied in a minority of JX (assuming no express agreement). In terms of analyzing if it is residential or commercial. Also. and lack of hot water may not be vital defect relating intended commercial purpose 1. There is arguably a fair amount of residential use happening with LLs implied consent. may mean that not zoned for residential use. i. Nesa: May have reasonable argument that lease is at least partly residential. PP: courts worry that if IWOS. Nesa possibly has claim for damages of substantial interference of quiet Current as of 1/10/2012 Page 12 of 40 . 3. public health concerns regarding sanitation. a. Nesa could instead focus on IWOS for nonresidential properties. and 2) if so. doesn’t turn it into a residential property. because he said he would do it soon. No--consider what is custom for artist lofts in particular. Yes-. because one already works and it is not vital defect relating intended commercial purpose. the heat. and the market. will be a stronger case than IWOH: 1. Units lack many basic amenities intended for residential buildings. LLs will raise rents and commercial tenants will pass those costs onto their customers. specifically commercial. 1. a. a. It makes a difference whether it is her premises are uninhabitable or the common area. what remedies she can expect to obtain. a.

f. 1. partial eviction and doubtfully CE. notwithstanding the variation in rent. Nesa might argue that there was an express agreement that was violated because LL promised it to be fit for use. consider (ERRP) i. that is everything. definitely a breach IWOS. it is an assignment. IWOS and common area? d. Also could make CE. Rent (weak factor to consider…where A has the entire property for the entire remaining term of the lease with the RTE. is it a “vital defect” relating to intended commercial purpose? Not to Interfere with Tenant’s Quiet Enjoyment and Common 2. A court is going to be highly likely to treat this as a leasehold. c. 2 important things: 1st. Alternately. As far as the flooded marketplace is concerned. Assignment and Sublease Principal Problem a. 3. the court might view that as habitability related to lease. However may breach of IWOS (remedies?). Actual partial eviction-.) 1. Stronger case than IWOH b/c relates to intended commercial purpose.unusable marketplace would certainly constitute being deprived of a significant portion of the leased property. along w/ interference with tenant quiet enjoyment. sense that was one of the big selling parts of the location. H. 2nd. Substance over form—even though they called it sublease ii. b. the broken toilet and lack of hot water are unlikely breaches of IWOH b/c the rental property is a commercial lease. In determining whether a subsequent agreement is a sublease or assignment. Area: e. specifically substantial interference of quiet enjoyment. entire property. But it is not that her premises are unsuitable in themselves. However. Express terms regarding parties' intent are persuasive to a court. we want to protect the LL’s ability to get the rent. (remedies?). But could make an argument that the danger of the property makes living area breach of IWOH. So when the assignee has the entire remaining term of the lease. Breach of Substantial Interference of quiet enjoyment. but not controlling and courts may determine if the whole agreement is in accord with this intent 1. assignee rent exactly the amount of rent to be paid under the original lease Current as of 1/10/2012 Page 13 of 40 . the essence of what leasehold is the right to exclusive possession. and sticks in the bundle of rights.enjoyment b/c the inability to use the common area interferes with the quiet use and enjoyment for which she intended to use the property. In conclusion. It is possible if the stairs were dangerous.

the sublessee has no obligations to LL. Sublessees are not excused from paying rent altogether. because they remain in privity of K. 2. Assignment. as a practical matter. suppose that A leases to B who assigns to C. Equity: A should not have to pay double rent. both B and C are liable. most lease covenants do so run. transfer all of tenant’s rights indicates assignment 2. If the assignee does not pay the rent. 3. If it is a sublease. PP: 1. ii. The original tenant is obligated under the privity of contract. Rights: 1. 2. 3 Potential Situations i. and privity of estate arises as a matter of law between the LL and the assignee. Privity of K and privity of estate remain between A and B. The issue is whether a party is obligated to pay the rent through the remainder of the lease term. However. Sublessor remains liable to the original lessor for all covenants in the original lease. The LL cannot force the tenant. Sublessee pays rent to sublessor consistent with the creation of a new LL-tenant relationship. Similarly. sublessor retains right to repossess premises if sublessee defaults iv.Privity of K continues between the LL and the assignor. then she is not. ii. absent a novation. iii. all parties are in privity of K with one another so all will end up in lawsuit c. If no one pays rent to A. the sublessor could sue Alyssa. Suppose A leases to B. the tenant can assign or sublease without consent and sometimes without notice Current as of 1/10/2012 Page 14 of 40 . b. a. Ex.i. and therefore cannot sue or be sued by LL. privity of K arise between B and C. The assignor remains liable to the LL for all covenants in the original lease. assignee.” and. With a sublease. the sublessee is liable to the sublessor for the covenants in the sublease.A sublease creates a new LL-tenant relationship. Court could adopt formalistic approach which would have the effect of incentivizing K negotiation within lease This problem is about the duty to pay rent to the LL. If it is assignment. privity of K is created between the assignor and the assignee. 1. but rather the question is whether Larry can sue Alyssa for the rent. Note that in successive lease conflicts. An assignee is obligated under the privity of estate. The question is it an assignment or sublease. and B subleases to C. sublessee to actually be physically be present to the property. The privity of estate between LL and assignee requires both of them to perform those covenants in the original lease that “run with the land. The last assignee is in privity of estate with LL. assignee agreement to obey original lease 4. Sublease. There is neither privity of K nor privity of estate between LL and the sublessee. transfers less than all tenant’s rights indicates sublease 3. b. she is liable even if she already paid Terry. lease is silent on assignments/subleases. 2. presumably the assignment could be terminated.

the surrounding tenants. Courts vary on whether a violation of a CCR is a breach of marketable title. tenants not stuck living beyond their means. No waiver of a violation of the encumbrance when the buyer does not know of the violation." If no dispute arises thereafter. but not from every doubt. Adequate financial information disclosed? b. historically given effect. The impact on the value of the property. Legality of proposed use d. the buyer can rescind. MT is a title that a reasonable and prudent business person. 2. Buyer pays Seller (or the real estate or escrow agent) "earnest money" or a "deposit. Whether any other reasonable LL would withhold consent iii. Seller not relieved from the duty to provide MT at closing. d. c.ii. b. Buyer may refuse to close if believes that Seller unable to convey MT. subject to the agreed exceptions. MT is a title free from reasonable doubt. Difficulty in reselling. If Buyer finds defects after closing. she will NOT be able to rescind or get damages from Seller because the IWMT ends at closing. PP: 1. Buyer cannot be compelled to purchase a lawsuit. lease prohibits assignments/subleases all together. However. and possible discriminatory which raises concerns of equity. 3. 2. would accept. Ex-if in the K the buyer waives building restrictions. Contracts – Implied Warranty MT (PP notion is that nobody should agree to pay for real property for which the title is unmarketable. the title must be such that there is no reasonable probability that the buyer will be subjected to a lawsuit. lease prohibits assignments/subleases w/o consent. When a K of sale is executed. The K for sale may expressly enumerate the encumbrances and the Buyer may waive them. e.) a. Assignee/sublessee’s suitability for particular property (use the space according to the LL’s plans) i. with knowledge of the facts and their legal ramifications. objective factors to consider: a. LL’s reasonable. PP: Promote free alienation of land. c. except: prohibitions construed very liberally for the tenant I. but most JX require that LL cannot unreasonably withhold consent 1. the characteristics of the property. Exceptions: i. and it is then found that the building on the property violates the restrictions. after that the Seller is liable only for warranties made in the deed. Need for alternation of the premises e. the deal closes. Financial responsibility of proposed assignee/sublessee i. Ex--assume grass got too tall for a couple of Current as of 1/10/2012 Page 15 of 40 . But also note this is prejudicial.

The obligation of the Seller to provide MT may supersede a waiver contractual provision. Not only is Buyer limited by the use of the property through the easement. Often the Seller will expressly contract that Buyer agrees to take title to the property subject to the mortgage. f. the Buyer must give the Seller a reasonable opportunity to pay off that mortgage before closing or at closing with the proceeds from the sale.) Often buyer must purchase or lose down payment. a. Someone else owns the property. regardless(test) g. 1. 6. Buyer will be compensated by the title insurance company. There are exceptions where the Buyer will not give the Seller reasonable opportunity to pay off mortgage: 1. What types of situations do not constitute a breach of MT? Current as of 1/10/2012 Page 16 of 40 . Easement is the right to utilize a portion of another's real property for a specific use. The "subject to" waiver provision was in direct conflict with the provision requiring the conveyance of a marketable title. f. AP 4. Ex: drainage easement across property may be sufficiently substantial encumbrance as to nullify the marketable title. g. Ex: Seller has 1 million mortgage and purchase price is 300k. ii. Doesn’t include utility easements. 4. Modern: Parties may K to shift MT into insurable title b/c it covers what the Buyer is most concerned about. there must be some language that makes it clear the Buyer was waiving MT with respect to that. the Buyer may NOT rescind the K. Instead. 2. Such restrictions frequently "run with the land" and are enforceable on subsequent buyers of the property. consider that insurable title is not good enough because of the risks of litigation. conditions and restrictions (CCR's) are a legal obligation imposed in a deed by the seller upon the buyer of real estate to do or not to do something. Mortgages: While technically a breach of MT. If it turns out there is a problem with MT. Older: Seller still has a MT duty. (Title insurance is a policy insuring against loss incurred as a result of a defective title. Covenants. including co-owners of property. Leases-B/c purchase does not include the right of possession until that lease ends. 3. In order to establish a waiver. but someone else has a property interest in the property.weeks--most courts would say that is too trivial to be actionable ii. However. Buyer's awareness of encumbrances does not mean that Seller who has promised to deliver MT is relieved of that duty. They are promises to everyone else in the subdivision to do or not do something. Breach b/c they affect ownership of property as a bundle of sticks. What types of situations constitute a breach of MT? 1.

Current as of 1/10/2012 Page 17 of 40 . earnest money shall be refunded and all rights of G terminated. But if title is good and G refuses to complete purchase. Yet MT concerns an objective analysis: does G have a right to terminate the K and get his deposit back because the title is not marketable? If G not getting MT as promised. even though expects little over $370. The purpose of the deposit was to impose a cost on G and provide a liquidated damages remedy to F and J. he would prefer to live in a new condo complex. specific performance if buyer still wants property i. Title to be subject to building and use restrictions general to the district. this title company will insure against loss or damage resulting from such violation. The ethics of seeking to revoke K of sale that is different than the real reason to get out of K. regardless of his reasons. land use regulations. which would then allow him to get out of the contract. G arguing to get his earnest money deposit back.000 as earnest money in part payment for purchase of the following described real estate:_. G would like to get out of K. Standard Owner's Policy. if property is in violation of these. F and J shall furnish purchaser. damages 1.000. However. Zoning laws. title is usually unmarketable. a. buyer gets back the earnest money deposit iii. which he normally would not be entitled to. he is entitled to get out of the K. standard utility easements are not considered encumbrances and do not make a title unmarketable. remaining $376. Advise him of his rights and obligations under the contract. Before getting into the legal issues. his attorney. K provides in pertinent part: Received from G $12.a. and cannot be made insurable. and will further insure that said violation will not work a forfeiture or reversion. G signs K to buy house from $388. Rescission ii. unless the title is not marketable. The preliminary title report shows the following item on the exception sheet: Declaration of protective restrictions. h. whether he has a claim that the title is not marketable. However. as soon as procurable and within 30 days of this date an Allied Title Insurance Co. Now. What does G want? G does not want to overpay AND he is interested in purchasing elsewhere in a place he likes better. if that is indeed the case ii. Principal Problem: F and J advertises the house for $388. recorded__Said restrictions violated in that house located only 2 feet from east side line whereas 5 feet required.000. if seller breaches.000.000. even though they may affect an owner's ability to use real estate. 2. If title is not insurable.000 to be paid in cash on closing.000. G is asking me. as recorded __ Yolo County. After signing K. Total purchase price is $388. Additionally. consider: 1. the earnest money may be retained by F and J as liquidated damages. G realizes house is only worth $372. What are G's chances of getting out of K and getting his 12k back? i. Remedies i.

G might also argue that not only is he purchasing a lawsuit. This is G's best argument. v. viii. Because each property owner has an interest in all of their neighbor’s setbacks. However. so long as it is applicable to that district( however. J. Instead. This particular restriction is one where the duty is owed to the other landowners in the subdivision and they might enforce it. Will the Court find a way to rule for F and J if they believe G is just trying to get out of K? No. Also will argue the "subject to" clause would mean that G has waived the existence of the covenant. Does not apply here b/c G is trying to terminate K AND get deposit back. Just b/c title is insurable does not necessarily mean it is MT and free from potential lawsuit. We have already noted that the existence of the covenant itself may or may not be a breach of MT. PP notion is nobody should agree to pay for real property for which the title is unmarketable. Efficient Breach refers to a voluntary breach of K and payment of damages by a party who concludes that it would incur greater economic loss by performing under the K. Like IWOH. it might be or it might not be. iv. but that the parties contracted to shift MT into insurable title. not the violation). What arguments might F and J make? Almost no chance that G’s claim is actionable. He might have to move the house. Note that this document contains insurable title language AND traditional MT language. vi. G would argue this is a possible purchase of a lawsuit b/c the property is in violation of an ordinance. he will be in violation. A violation of a covenant is not necessarily a breach of MT. Deeds – 3 Elements to Effectively Convey Title (deed is a manifestation of title) Current as of 1/10/2012 Page 18 of 40 . G will start out with the basic definition of MT.3. and if he obtains title to the property. since the title insurance company will broadly insure against problems arising out of this violation. The issue is not so much the covenant itself. other authorities say the Seller still has MT duty. and that this could basically subject G to a lawsuit and that the standard is a Buyer is not compelled to purchase a lawsuit. Other ways to resolve dispute with harming judicial economy. if not expressly in K. The question is not whether F and J promised MT b/c every K for the sale of real property includes an implied duty of MT. The fact that the title insurance company is willing to insure shows from a more objective stance that it will not be enforced. but that there actually might be some adverse interest on his ownership interest. iii. Therefore. But the bigger issue is the violation. he might be subject to some sort of lien filed by neighbors or the homeowners association. but court might be less favorable to G in its analysis. F and J's best argument is that G has agreed to insurable title. vii. which may or may not be a breach. court will imply it. The house is already there and restriction has been impliedly waived by neighbors and will not be enforceable by them. It is not so much that he has waived MT. F and J will argue he has gotten everything that he has bargained for.

Protect third parties who rely on deed records (tax officials) b.. But could be sufficient if proven through extrinsic evidence. Court may look at envelope that letter was sent in to find the legal names of the parties. signature of grantor 1. or future. if from the whole instrument the court can ascertain evidence of intention by grantor to convey title to land which is sufficiently described to the grantee. iv. ii. it must decide if it is reliable as well as relevant to the issue at hand. it is a deed if all the other elements are met.note PP concerns for each): i. Problem b/c M could have built many houses. PP Reasons for Deed Writing Requirements & Delivery Requirements 1. The envelope may give the court the proper legal names of the parties. M could have meant at the time of death. but oftentimes people use nicknames or family names when writing letters. this may give rise to a potential for perjury. Promote the free alienation of land i. Grantor/grantee name 1. These words of grant are not specific enough as to when. In order to promote the free alienation of land the legal system must effectuate the intent of the parties (ex. as an envelope can be easily forged. “house which M built”. or even a nickname. Permissible Form: general description is usually adequate. Words of Grant 1. a. If the court were to allow C to admit the envelope as evidence. But since M died intestate it could be inferred she meant to give the property now. 2. Other state specific elements vi. where in order to transfer title you have to fit into a set of legal requirements VS contextual approach where you look at the language/evidence to see if the alleged grantor intended to make a present transfer of title to the property to the alleged grantee.a. could be many M’s iii. Others: even though a document doesn't use express words. which do not provide the legal names needed. 2. Some courts require use of word grant. Obviously there are problems being too far on one side of the spectrum. Tension between formalistic approach. Legally sufficient description of property 1. ‘mom’ and ‘son’ weak. Family transaction) Current as of 1/10/2012 Page 19 of 40 . “shall belong to you”. Written Intent--grantor must express written present intent to convey legal title(b/c of SoF) to grantee through 5 requirements (Use evidence: language + extrinsic…. actual names would be best. any symbol executed with present intent v. but most be specific enough 2. However.

If too much of contextual approach. If court too formalistic about admitting evidence. we might be more accommodating of informal writings than if this were a commercial transaction. or just a hospitable invitation. the judicial system is closed off to people who are not savvy enough. which might help understand whether there was intent to transfer title? We have to look at the context of the relationship of the parties. c. Intent to deliver and make irrevocable (Subjective) Current as of 1/10/2012 Page 20 of 40 . Courts should be able to differentiate an informal letter from an informal deed ii. holding deed. WoI: What is the nature of the relationship of the interest holders to the property. Judicial economy and integrity i. f. having access to deed. we might think of them as having some relationship to that property. b. b. In this case. residential property that is being transferred by gift to a family member. the grantor must manifest: 1. it becomes too difficult for the court to be certain that it is basing its decision on relevant. Ceremonial: Recognition that the transfer of property is serious ii. You do not want to worry every time you write to invite someone over that you have suddenly transferred title to your property.ii. Protective: ensures Grantor has thought about what they are doing before transferring title to real property. Grantor recording deed (Delivery is presumed if recorded. Actual or constructive actions of delivery (objective--words or conduct) AND. Also look at the characteristics of the property. Reasonable expectations of the grantor and grantee d. but not necessary) 2. An invitation to stay could be a tenancy at will. Recognize multiple interests in land i. iii. ALTERNATIVELY: Promote formalistic approach and incentivize contract negotiation. Grantee seeing deed. Evidentiary: Enough evidence that delivery has actually been made so as not to harm judicial economy 3. Delivery of Deed--act by which grantor demonstrates that the deed is to be presently operative. When we are concerned about 3rd parties. They all have some interest in making sure that the deeds are clear enough. e. In order to deliver a deed. i. a. and thus effective to transfer an interest in land. license. reliable information. 3 purposes: 1. 2.

Look for evidence that grantor never formed a definite crystallized intention to do a legally effective delivery and did not believe himself bound by the deed. Assume that a validly delivered but unrecorded deed is good as between H. oral exchanges. Courts assessment of the facts. 1. S lived there before the deed was written up so the fact that she is in possession does not help H very much. H destroys the deed and makes a gift of a deed in favor of G. S thanks H and agrees that it is a good idea to keep the deed in the vault where it will be safe. v. Current as of 1/10/2012 Page 21 of 40 . Relationship between the grantor and the escrow agent i. b.iii. a. establishing delivery of deed to grantee. S does not have access to the vault and never sees the deed. Arguments in favor of H: i. S and G. H tells S about the deed. S sues H and G to quiet title in herself. Language. S never saw the deed. 1. because she has always treated it as her own. grantee seen the deed. and also tells her that she is now the owner of Merrywood. Joy would likely return it st 2. Principal Problem: H. Intent: Did H have the intent to deliver and make an irrevocable transfer(subjective)? a. a. Safety deposit deeds: 1. even though the grantor retains power to invoke 3. if they are available to testify as a witness. Death Escrow: Grantor may deliver deed to 3rd persons with the intent to deliver and make irrevocable. and places it in his vault for safekeeping. iv. H and S both live in Merrywood. Will depend on part on testimony regarding what the grantor said. 1 view: only requires intent to make irrevocable. the owner of Merrywood. grantee touched the deed. Thereafter. executes an otherwise valid deed conveying Merrywood to S. S never had access to the vault ii. it is a validly delivered deed. and grantor has no power to retrieve from third party. while reserving possession of the land until death. S never touched the deed. v. surrounding circumstances and facts c. he manually delivers the new deed to G. If Grantor intended deed to be legally effective before death. Since they are friends. the deed is not delivered during life and is no good as a deed. 2nd view: Other view requires BOTH intent to make irrevocable. Case helped if the deed is kept in the grantor’s safe box to which grantee has access. grantee know? 2 However. iv. H is still in co-possession vi. Who wins? 1. S could have recorded it. if grantor did not intend deed to be effective until death. iii.

it is more likely than not that the court would conclude that the conditional nature of the deed was acceptable and that it was properly delivered when given to 3rd party escrow agent (Joy). Discuss everything above…. because the deed Current as of 1/10/2012 Page 22 of 40 . the owner of Blackacre. to my nephew Mike. Overall looks like H is telling S one thing. and that Hal owned no land in County except Blackacre. H executed the deed ii. Hal instructed Joy not to give the deed to Mike unless Mike survived Hal. There is some ambiguity in this case. Hal wants to be able to revoke the transfer of title if Mike were to die before him. handed his friend Joy a deed granting “all my land in County. Executed deed vi. However. If Hal had a way to revoke the deed other than Mike’s death before his. S knew about the deed and agreed to put it the box 2.If she had moved in and H left. This is a way he can insure the property is transferred as he wishes. M consults you as to his rights and informs you that he has recorded his deed. Principle Problem 2: Death Escrows: Hal. he thereby makes an effective delivery as a matter of law. and instructs the third person to deliver it to the grantee on the grantor’s death. This constitutes a proper transfer to title even though Mike had no prior knowledge of the deed’s existence. b. The deed was not recorded. Joy is acting as the third party escrow agent for Hal’s deed. it would have moved us closer vii. Advise Mike as to his rights. Thereafter. but intending something else. Joy delivered the deed to Mike in accordance with Hal’s wishes. When a grantor delivers a deed to a third person with irrevocable instructions. A deed must also be properly delivered to the grantee in order to be valid. This is known as a conditional deed. Later evidence indicates he knows the proper way to deliver deed. State X. Here. Evidence has been destroyed viii. Arguments in favor of S i. a vacant parcel of land in Amador County. given the facts of the case. Hal died. a. though sister could argue WoI in that they are family and it was not expected ix. The deed will be given on the condition the Mike survives Hal.” Hal orally instructed Joy not to give the deed to Mike unless Mike survived Hal. This is acceptable because Hal wants to make sure that he is going to transfer the deed to Mike. Told sister b. State X. where is actual/constructive delivery? Strongly in favor of inadequate delivery. Actual/Constructive (objective): Even if H had the intent to deliver. because it is unknown if Hal had any way to revoke the deed. When Hal died. Four years later. then the court may say that the deed was not properly delivered when given to the 3rd party. which Joy delivered to him upon Hal’s death. Mike learned for the first time of Hal’s deed to him.

at which point mortgagee may take over possession of the land. the mortgagor grants the mortgagee a mortgage on the property. b. Legal title only passes to the mortgagor once the mortgagor has paid off the mortgage debt. If the debt is not paid. whoever holds note is entitled to foreclose on property • If under a negotiable note. the third party may foreclose on the property • 2 ways mortgage is a security interest in property:  Lien theory(majority) • Mortgagor holds legal title.was considered transferred when it was placed with Joy. the entire principal sum becomes immediately due and payable • Note defines whether the loan is a  Recourse loan(majority)—If on foreclosure the land does not bring in enough to pay the debt. Mortgages--To secure the debt owed the lender. for all intents and purposes. the entire principal sum of the loan becomes immediately due and payable  Due on sale clause-if mortgagor attempts to transfer property. the deed has been accepted under the law. commercial financing Current as of 1/10/2012 Page 23 of 40 . A judgment for this deficiency. is called a deficiency judgment. • Most notes contain 2 clauses:  Acceleration clause-if mortgagor defaults. 2 essential components: Note is the manifestation of the mortgagor's promise to repay the mortgagee. the deed has been successfully transferred and the property interest now belongs to Mike. loses equitable title.  Nonrecourse loan-mortgagee agrees that the only way of getting repayment if mortgagor defaults is foreclosure on the property • Note defined as:  Negotiable(majority): holder of the note may transfer the note to a third party and sell it  Nonnegotiable: holder of the note may not transfer to a third party Mortgage follows note. the mortgagee can sue the mortgagor on the note for the deficiency.  Title theory • Mortgagor holds equitable title. If mortgagor defaults under title theory. B/c the mortgagor remains the owner of the land. and very few people can acquire real estate for cash • Helps facilitate development. collectible out of the general asserts of the borrower. o Mortgages and PP: • Important for people to be able to own property. commercial real estate transactions. the mortgagee will "foreclose" the mortgage. As long as Mike agrees to accept the deed when Joy delivered it to him. Mortgagee gains a security interest in the land. Normally acceptance is presumed because in most cases people accept things of value. he is entitled to possession up until the point of a foreclosure sale. Once Mike recorded the deed.

in exchange for the mortgagee giving up the right of deficiency judgment o Statutory right of Redemption.Mortgages are very important in relation to the economy and society. 2) Where permitted. o Negotiation: Refinancing/New Terms/Extension/ Payment Plans o  Foreclosure: balance between protecting the mortgagor and protecting the mortgagee. this foreclosure process will extinguish all interests in the foreclosure property that are junior to the mortgage loan. when foreclosure is pending: In states that allow deficiency judgments. they would not be getting their security interest. Therefore. where it exists. the first mortgage loan will still o Current as of 1/10/2012 Page 24 of 40 . o Equitable right of Redemption: right of the mortgagor to redeem the property from the mortgagee. 2) Nonjudicial Foreclosure 1) Possible when mortgage provides that the mortgagee may conduct a foreclosure sale w/o decree from a court. • o Home Equity Loans (in flux) Fair market value of the property MINUS the debt of the property=equity (or the amount of value the owner has) Default: o Failure to make required payment on loan(acceleration and due on sale clauses) o When there is default. even if payment is late. ο Mortgagor cannot waive the equitable right of redemption as part of consideration for obtaining the loan. and anything left will be given to the borrower. before foreclosure sale. if a second mortgage is foreclosed. remaining in the property. unless there is a fear that the mortgagor. the mortgagee proposes to the mortgagor to waive the equitable right of redemption. o PP: enacted to protect mortgagor by giving them more time to come up with the money and save their property. look at the mortgage foreclosure crisis. mortgagee must provide notice of default. • Allows mortgagor to correct any bookkeeping errors o Most mortgagees do not want to go immediately from default to foreclosure. will destroy it. 2) Lender will be paid the amount of debt from the proceeds. permits mortgagor to redeem the property during a specified time period after the foreclosure sale. and asks for a decree from the court directing the property to be sold. mortgagee is entitled to the security interest in the property they bargained for. 1) Judicial Foreclosure: 1) Mortgagee alleges the fact that the debt is due and unpaid. and therefore used more often. ο After default. they are usually faster and less expensive than judicial foreclosures. o When a mortgage lender forecloses on mortgage loan. If they were not allowed to foreclose.

 T has purchased the interest that B had when she gave the second mortgage to L. o Multiple interest holders in foreclosed property: o B owns her house. and 4K to B. and the amount owed to L is 81k. first in right”—legal title trumps equitable T a. and L forecloses. TYPES OF RECORDING ACTS a. At the time of the default. L's mortgage would be eliminated b/c Tom gets the title that Barbara had when she gave her mortgage to the Bank. At L's foreclosure sale a third party. there may be a deficiency . the amount owing on Bank's loan is 115k. Common Law-“first in time. at that time. worth 220k. Bank may foreclose its mortgage. held by Bank. Race Statute-first to record has priority Current as of 1/10/2012 Page 25 of 40 . taking as security a mortgage on her equity. In that case. Quite often. which will be paid in full. and the surplus would be paid to Barbara. The 200k that Tom paid would be distributed as follows: 115k to Bank. What does T own now? What are the Bank's rights? How should the 90k be distributed? Assume that all the instruments have been promptly and properly recorded. 81k to L in repayment of the loan made by L.not enough money from the sale to pay what's owed on a junior mortgages. o So. subject to Bank's mortgage. including interest and costs of foreclosure. L lends her 80k. If T does not pay the 115k when it is due. but suppose B defaulted on the 115k Bank loan. B's subsequent junior mortgage given to L could not reduce the value of the security that she had previously given to Bank. one disadvantage of holding a second mortgage is that it will be eliminated by the foreclosure of the first mortgage. bidding 200k. if anything at all. paying 90k. although the second mortgage is eliminated. which is subject to a 120k mortgage. c. T. What title would Tom get? What would be L's legal position? How would the 200k be divided?  Tom would get title free of both mortgages. Tom gets exactly what B gave the Bank as security: title free of any mortgages. That is. junior lenders recover little. she owned the property free of any mortgages. Of the 90k paid by T. which now secures a loan of 115k.be attached to the property after foreclosure. the difference between the value of the house and the debt the house secures. 81k would be paid to L. B seeks an additional loan from L. Since. B's equity in the house is 100k. the borrower is still obligated to pay through a deficiency judgment. in a foreclosure. and Bank foreclosed before L foreclosed. Recording Statutes 1. o Same as above. but a 3rd or 4th mortgage loan that attaches after execution of the second mortgage will be extinguished. However. Thus. This is a junior mortgage because it subordinate to the mortgage held by Bank. Suppose also that Tom was the successful bidder at the Bank's foreclosure sale. T now owns the property. o Suppose that B defaults on her loan from L. the debt evidenced by the note is not. PP: bad b/c of potential for perjury and no reason for ppl to record b. is the successful bidder.

D buys the house. This time she sells it to D. 2) However. which can only be done if people record deeds. PP for Recording: a. PP-protect first person to record c. if there were a tract index. d. so he has no reason to look up those names in the grantee/grantor index. Now there is a break in the chain of title. Race-Notice Statute-subsequent BFP wins if (1) at the time of conveyance they had no actual or constructive notice of the prior conveyance. A is aware that B never recorded his deed and decides to sell the same property a second time. Constructive notice is assumed if the prior conveyance was recorded c. D would find the B to C deed recorded for that particular parcel of land. Hypo: O conveys to A who does not record. and C records deed. and as far as he can tell from the record. A would win b/c A recorded before B. and therefore D would be on Current as of 1/10/2012 Page 26 of 40 . but you must give reasonable time before rescission 3) Wild Deed-non-recorded deed that breaks the chain of title 1) Buyers and lenders are not held to have constructive notice of wild deeds. because C’s deed was outside the chain of title. He looks up A’s name in the index. Notice/Race-notice: avoid rewarding people who take interest in land while knowing of other peoples’ interest in the land c. who does not record his deed. figure out who your grantor is (assume A) b. she still owns the property. look at A’s grantor in grantee index to make sure it was granted to him f. Thereafter. D would have had constructive notice of C’s interest and C would have prevailed. so C’s deed is a wild deed. Under a race or notice-race statute. if there are any encumbrances (except mortgage) it is a breach of IWMT. O then sells to B who does not record and has no notice of the previous transaction with A. look at A’s grantor in the grantor index to make sure it was granted to A e. So. How to use the deed index when you are buying property a. A records and then B records. Effectuate parties’ intent/ protect subsequent grantees d. All 3 recording statutes seek to make it relatively easy to ascertain title by reference to recorded documents. and (2) the subsequent BFP records before the prior purchaser. create a self-policing system instead of harming judicial economy 3. The record shows only A’s deed and C’s deed. Notice Statute-subsequent BFP wins if at the time of conveyance they had no actual or constructive notice of the prior conveyance. b. look in grantee index to make sure A actually owns the property d.b. 2. D does not have constructive notice of C’s interest in the property. Ex (notice statute): A transfers to B. B sells to C. and so forth…also. B owns Blackacre under a notice type statute. D does not know about B or C. If C had required B to record the A to B deed before C closed. look in grantor index to make sure A hasn’t given property to someone c. but the link between them (B’s deed) is missing.

Y records. (notice statute): 1) Z  Y. C's deed was a wild deed. Dawson made no search. 6) JX has both grantor-grantee index and tract-index. and C wins. both deeds in the tract index. Current as of 1/10/2012 Page 27 of 40 . and never recorded. We want to reward people who record promptly and put other subsequent purchasers on notice. X records.) 4) Shelter Doctrine–where the current grantee receives his interest from a prior grantee. Moreover. 7) What. 1) Three Types 1) Quitclaim Deed-no covenants implied. the current grantee is sheltered. 2) 6/15 B executed and delivered warranty deed purporting to transfer Wildacre to C for 50K. D had constructive notice of C's interest b/c he would have searched for B. C made no search of records to determine who appeared as owner of record. o 7/1-C has legal title. At the time D took interest. and the prior grantee would win a dispute with another grantee. That is enough under the grantor-grantee index. for 45K on June 30th. were the legal and equitable interests of A. Covenants of Title --After acceptance of deed. because he has transferred everything he has to C. Z  X. one cannot sue under IWMT due to the doctrine of merger – only actions are below. 8) What happens between C and D as to the title to Wildacre? o D is a BFP. Therefore. B and C in Wildacre as of June 2. B recorded immediately. A receives the money from B. 3) 6/30 B paid A the agreed upon purchase price of 45k. there has never been a decision which one takes precedence over the other. B receives his money from C. the recording statute provides that unrecorded deeds are void as to subsequent purchasers who are 1) innocent and 2) have paid valuable consideration (notice statute). X  W. but immediately records. However. Up until 6/30. June 16. and A executed and delivered to B his warranty deed to Wildacre. Ex. B has equitable title (K right). b/c equitable title can be assigned. written on the assumption that the grantor may not have title. (Entries in a tract index are made by block and lot number. and July 1? o 6/2-A still has legal title. and would have eventually found the deed from A to B as well. B has nothing. found that B transferred a deed to C. rather than by the name of the grantor or grantee. B recorded. And as soon as B had legal title. for 40K. 5) In property JX. X shelters W b/c X would win a dispute against Y 5) Principal P: 1) 6/1 A contracts to deliver warranty deed to B. or that the title is subject to encumbrances. A still has legal title. It will ripen into legal title at the time B has the deed. had no knowledge. o 6/16-C has B's equitable title. if any.o notice. D will not be protected by notice statute. 4) 7/15 B executed and delivered deed to D. o PP: Want to protect C b/c C recorded as soon as he had his equitable interest.

A is liable for breach of this covenant.grantor is peaceably in possession under a freehold title o possession-dominion and control (lease would be breach of seisin b/c someone else is in possession) o peaceably-no conflict or adversity o freehold title-full legal title 2) o Breaches: o The presence of an AP b/c it means the grantor is not peacefully in possession. Grantor is only 1 co-owner and is conveying total title. Alternatively. is held by any third party o encumbrance-other right or interest in the property o decreases the value of the property-a small decrease is enough (flower garden-yes or utility easement-maybe) o held by a third party-interest held not by grantor or grantee 4) covenant of Quiet enjoyment-grantee will not be evicted (either actually or constructively) by someone with paramount title o Note that PT holder may not be able to evict grantee. However. C would have no rights against A. Right of first refusal=means someone has to be offered title to the property first. If A's deed to C contains a covenant of seisin. Covenants of title in a deed are an alternative and additional method of title protection (in addition to a record search) available to a purchaser. of the covenants in the general warranty deed o Usually statutory b/c parties haven’t negotiated/drafted themselves 3) General Warranty Deed-6 standard covenants listed below 2) General Warranty Deed Covenants (SREQWA) 1) covenant of Seisin. AP whose title has ripened into legal possession) 3) covenant against Encumbrances-no other right or interest in the property conveyed. liberal court may want to punish negligent conveyers. and that strict courts might wait until they recognize a breach of the covenant of quiet enjoyment and covenant of warranty.Special Warranty Deed-specifies grantee is receiving some. It does not matter whether C had notice of B's interest in Blackacre by means of the recording system or otherwise. If there are facts out o Current as of 1/10/2012 Page 28 of 40 . if C had knowledge (as opposed to mere notice) of B's interest in Blackacre. unless C reasonably believed that A would eliminate B's rights before the closing 2) covenant of Right to convey-grantor has the power and authority to convey (breaches: Grantor does not have title. but not all. and then A purports to convey Blackacre to C. which decreases the value of the property but is consistent with the passing of a fee. o Foreclosure--only if dispossessed o Leasehold b/c someone else is in possession o Grantor does not have title Hypo: A conveys Blackacre to B who takes possession.

Breach(no breach until actual eviction or constructive eviction): o AP whose interest in the property ripens into title and files an action in ejectment to evict or prevent the grantee from taking possession of the property o Someone else has title to property o Mortgage (but only when the foreclosure is filed) o covenant of Warranty. enforceable only by immediate grantee o 1-3 are present covenants 2) future covenants. at what point in that timeframe does the grantee have a claim for breach of the covenant of quiet enjoyment. The reason here is that courts say they do not know there will be an eviction when it might not occur.grantor promises to compensate the grantee in the event he is evicted (actually or constructively) by someone with paramount title o Analyze w/ covenant of quiet enjoyment o A conveys Blackacre to B. B's deed was recorded. by dealing with all breaches of covenants of title all at once. Some courts are going to view that covenant as only being actionable once there is actually an eviction or where it is so imminent that any reasonable person would vacate the premises. conveying title by CA grant deed that is silent as to the existence of the mortgage.o there that indicate grantee might not be evicted. Other courts are more willing to see constructive eviction in a broader context. If there is someone out there who holds an interest who might at some point result in an eviction. A then purports to convey Blackacre to C by a deed containing a covenant of quiet enjoyment and a covenant of warranty. Future Covenants 1) present covenants. negligent in not having searched the records. Where there might be a non legal solution. B legally ousts C. inexperienced in real estate transactions. Part of the reason they might take this view is to promote judicial economy. borrows 100K securing the loan with a duly recorded mortgage against Blackacre. owner of Blackacre. enforceable by immediate grantee and all subsequent grantees o 4-6 are present covenants 4) Remedies 1) Damages for 1 through 5 2) Specific Performance for 6 5) Principal Problem: X. 6) covenant for further Assurances-grantor will supply further assurances in the form of documents that grantee may need in the future to prove title 3) Present v. X then sells the property to Y for 100k. did not discover it. but C. A is liable to C in damages for breach of his covenants of quiet enjoyment and warranty. fails to conduct a title 5) Current as of 1/10/2012 Page 29 of 40 .run w/ land. Y.do not run w/ land. could be construed as a waste of judicial economy.

6) O easement to A. B general warranty deed to C. B records. Z cannot recover from Y under the covenant of the right to convey b/c it is limited to grantor’s conveyances. it just means the mortgage is on the property. C is the latter to take the interest. O general warranty deed to B. This does not mean A owns the property. Z discovers the existence of the mortgage when he is forced to pay 100k to prevent foreclosure. 7) O mortgage to A. B records. A was the first to record as BFP.” 2) Z cannot recover from X b/c the 2 covenants are present covenants. O general warranty to B. That is. C records. or they could grant a quitclaim deed. 1) C v A o Is C's interest in the property subject to A's mortgage? Under a race statute. and therefore Z cannot recover.” X is a remote grantor to Z. Also notes that courts are going to be reluctant to saddle Y with responsibility for a mortgage that Y did not create and did not know about. After a few months. Do the statutes modify the covenant in a way that says Z is entitled to sue on those? No--only the immediate grantee constitutes an “assign. Does Z have a good chance of recovering damages from either X or Y? If so.search and has no knowledge of the mortgage. Under notice statute. A's wins under all 3. Parties may K around the statutes. Does it matter that C could have learned about it? No--it might matter if C had actual knowledge. Why do we hold B liable to C on the covenant against encumbrances? B could Current as of 1/10/2012 Page 30 of 40 . 3) PP: CA statute is only a fallback option to ensure some protection. Regarding the covenant against encumbrances. Y did not make the encumbrance (mortgage). but C had constructive notice of A's mortgage b/c it was in the deed records. There is an argument that b/c the mortgage existed on the property and that Y passed title counts as “suffered. Race notice. using a CA grant deed to convey title. But if they only use required words of grant. It should be intuitive that a mortgage is an encumbrance on the property. if C admits he had knowledge of the mortgage on the property. 2) C v B o The existence of A's mortgage means that B has breached the covenant against encumbrances. A records. A records. implied covenants: right to convey and covenant against encumbrances. Y did not convey the property to anyone else. Grantor could grant general warranty deed. how much will he recover from each D? 1) Issue: Concerns special warranty deeds by CA Statute. which provide 2 limited. Y later sells the property to Z for 90k. statutory defaults apply. Z cannot recover b/c its limited to covenants made by grantor. C records. Z also fails to conduct a title search and has no knowledge of the mortgage. consider the deed from Y to Z. A recorded before C recorded. 1) C v B--breach of the covenant against encumbrances. which might constitute a waiver. B general warranty deed to C. But constructive notice is not a waiver of any of the deed warranties. When discussing what constitutes breach.

O general warranty deed to B. going to be problematic for C to bring claim. B records. casualty losses constitute physical losses to the existing physical conditions of the property (fires. If the claim is about the right to convey the property in general. 8) A has AP possessed 5 ft of O's property. 1) C v B o Covenant of seisin breached b/c B is not peacefully in possession under freehold title o B does not have the power and authority to convey--A has AP the property. If claim is instead more focused. and therefore buyer is obligated to proceed w/ transaction o Doesn’t apply when the Seller causes the harm o Remedy: loss on buyer. B general warranty to C. then C can sue B on quiet enjoyment and warranty. which of the following and why? 1) Majority: doctrine of equitable conversion o Risk falls on the buyer b/c the buyer has equitable title at the time the K is signed. C will not be able to take possession. etc) 4) Loss-specific rules (Zoning changes. Non-Title Loss During Escrow –(doesn’t relate to property value) 1) What kind of rule allocates risk of loss? 1) Express terms of K o Well drafted Ks include provisions that allocate the risks of various kind of losses that will be given effect and control 2) IWMT? o IWMT controls. meeting all the elements for the statutory period. C records.o have put exceptions and exclusions in the deed of known encumbrances. hurricanes. o Covenant against encumbrances--not breached. Rule Current as of 1/10/2012 Page 31 of 40 . If the mortgage is just sitting on the property and the loan is being paid. seller can get SP of K 2) Minority/Mass. gov’t takes property) o Some courts say loss resulting from zoning change occurring between K signing and actual deed conveyance treated as casualty loss o Other courts disagree b/c not an actual physical loss 2) If casualty loss. If A forecloses on the property. o Quiet enjoyment and warranty are breached with respect to the 5 ft. However. 3) Casualty loss rule (see #2 below) o Generally. o Covenant of quiet enjoyment and warranty--not breached by the existence of the mortgage on the property. but they would be breached if there was a foreclosure. no breaches. where C is suing B on the covenant of the right to convey regarding that 5 ft. C will win. B merely does not own the 5 ft. floods.

plus insurance proceeds 3) Strict insurance K enforcement o Views insurance K as personal between the seller and insurance company. unlike the third-party 4) Principal P: B (developer of large shopping centers) enters into a K with S to purchase land for 1 million. 2) Equity o Insured party serves as a constructive trustee for the loss-bearing party. casualty losses constitute physical destruction or harm to the existing physical conditions of the property. buyer can rescind OR buyer can get SP w/ abatement 3) UVPRA (Uniform Vender and Purchaser Risk Act) o Whoever is in possession bears the risk. insured party cannot get the benefit of not bearing the risk. o Current as of 1/10/2012 Page 32 of 40 . retains the risk) 3) Is the loss-bearing party entitled to the benefit of insurance proceeds of the non-loss insured party? 3 possibilities: 1) 3rd party beneficiary o Yes—but requires them being expressly contemplated as a third party beneficiary under the K between the insurance company and the insured.Risk falls on the seller. Property at the time entered into a K was zoned to include a commercial shopping center. Cannot use the property for the intended physical use of the property. or in the case of the seller reduce the purchase price by the amount. Concerned local residents get the city council to amend the zoning ordinance to allow only single-family residences. o Against: Not damage to the physical conditions of the property. If the seller has retained possession during the period. (Ex. 900K due at closing. o Remedy: Loss on seller. So they either have to provide the insurance proceeds to the loss bearing party. o Is it a title defect? No. Therefore. Generally. which decreases the value of the property to 200K. as the buyer would not be getting what they bargained for. plus getting the insurance proceeds. o Is change in zoning a casualty loss? o For: There are arguments that the zoning change could fall under casualty loss. B wants to rescind K and get the 100K deposit back from S. B has already paid 100K down in escrow. the existence of a zoning regulation is not a title defect. o PP: prevent unjust enrichment---the insured party would get no risk of loss. 1) What kind of loss? o Is it a loss covered by express terms of K? No indication that this kind of loss was covered. and therefore the third-party has no interest at all in any proceeds under the policy o PP: insured has paid for the benefits.

2. 1. If the risk is on S. o Formalistic Rule: Courts know what to apply and parties know up front who bears the risk of loss. PP for UVPRA: o Remedies: If the risk is on B. But if parties do not specify. Tenancy in Common: Ex-“to A and B”…(though if married might be TBTE) i. S can specifically enforce the K. B can rescind OR get SP of the K. The likely remedy given the huge change in property value is that the risk is on S. The vendor is the one who is likely to have the insurance. iii. RoS. Ambiguous grants presumed as TIC ii. does NOT require undivided interest be equal 2. No RoS-shares instead pass to heirs iii. 3. iv.o If we did treat the zoning change as a casualty loss. and B can rescind the K. Created by specific language and 4 unities (now interpreted loosely) 1. Insurance should not end just b/c there is a K for the sale of property. o Incentivize negotiation in K language that allocates risk (regardless of which of 3 rules adopted) 2. Take interest at same time Current as of 1/10/2012 Page 33 of 40 . under PP? o Equity favors least cost: put the loss on buyer here b/c take the loss with the least cost o Relative bargaining power: Buyer here has lots of bargaining power. Undivided interest (means neither tenant can exclude the other from any portion of the property) 1. and the vendee won’t get the insurance until the K closes. Protect the reasonable expectations of the parties: DOEC inconsistent w/ the way people generally insure real property. a) Concurrent Estates-2 or more people own same interest in same property at same time. Promote insurance-insurance is the most effective way to deal with loss 1. which of the 3 follow? o D. Creditors can get to property 2.remaining JT(s) take the share of the property that deceased JT had ii. Joint Tenancy: i. PP for minority rule: 1. of equitable conversion: risk falls under buyer. o Protect the reasonable expectations of the parties: B should have reasonably expected such an event to occur. interest presumed equal. Why might a court adopt or continue with this rule. Always equal undivided interest in property. S should already have the property insured.

Bart and Rose TBTE + TIC with Ron. Cannot be converted into tenancy in common by the act of just one tenant. Take interest same interest 3. 25 years later Ron died. and their son Ron Lee. RoS ii. iv.) v.” Bart and Rose were married at the time the will was probated. So long as creditors do not try to satisfy that debt from the property. Ron would be ½. and therefore J has no interest. A and B will be JTs. Bart and Rose TBTE + JTs with w/ RoS with Ron. This would be divided ½ B and Rose and ½ Ron. iv. Creditor may use the property to satisfy the debtor-spouses debt after the other non-debtor spouse has passed away. Equal undivided interest in property. Ron was a minor and still living with Bart and Rose. b. it would be allowed. iii. 1. Bottom line—depends if he was a TIC or JT w/ his parents. 2. i. but they are tenants in common with respect to C. If Ron was a joint tenant w/ his parents. PP: necessary to protect non-debtor spouse. his interest would automatically go to them at his death b/c the RoS operates automatically at death. But if you treat them as “one” marital unit. it remains a joint tenancy. All tenants must have an equal interest in the property. Current as of 1/10/2012 Page 34 of 40 . Tenancy by the entirety treated as one co-tenant. 2 exceptions: a. What possibilities of coownership have been created between the 3 interest holders? 1. Tenancy by the Entirety i. jointly. 4. they hold it as tenants by the entirety. If the creditors force the sale of the property. J claims a 1/3 share. Creditors of an individual spouse may not reach any property that the debtor spouse holds as a tenant by the entirety. ii. All tenants must have a possessory interest in the whole 4. Creditors may only reach debtor’s joint tenant interest in property. J. leaving all his interest in the property to his friend. it severs the joint tenancy with respect to the debtor. J only entitled to property if Ron was a TIC w/ his parents. TBTE treated as one co-tenant. and B and Rose would be ½. 3. B and R come to you and insist that J has no interest in Pollenacre. Issue: Interpretation of will determine whether J gets any interest in property.2. Requires some marital language OR Facts of Marriage(Some states have statutory presumptions that if couple co-own property. Principal Problem: J died leaving farm to “Bart and Rose Lee. Alternatively. Federal gov’t can reach property held in a tenancy by the entirety to satisfy a tax obligation of the debtor spouse. Might not be allowed b/c 3 people who do not have exactly equal shares. Requires 4 unities and unity of marriage vi. J has filed suit seeking a declaration that she has a ½ interest in Pollenacre.

The problem is “jointly” could just mean together—it might not mean JT with RoS. v. what is the parties’ intent) and 2) legal requirements. B and Rose and Ron are joint tenants. In order to overcome the presumption that the conveyance is a TIC. Sometimes conveyances are not going to necessarily reflect grantor’s intent. Clearly some extrinsic evidence MUST be brought in to determine if this is TBTE. and are equal undivided interest holders (1/3) because it does not say otherwise.” and the commas all aspects of language of deed that indicate J meant a husband and wife unit. Also consider not just family relationship. they probably meant in the technical sense of joint tenancy w/ RoS. grantor intends to create JT w/ ROS. The language is obviously ambiguous. not an adult. Surrounding Circumstances: Court might adopt formalistic or contextual approach. 4. Here. Being a family friend. and minor son. If so. if grantor’s intent clear. However. Obviously is TIC). What kind of relationships are there among B and Rose and Ron? Recall Ron was a minor at the time of will. Presumption: If all else fails. Language of the grant: Court will give effect to the clear. Basic concern is that intent is irrelevant if legal requirements not met (ex. couple must be married. 2. Note that if an attorney drafted it and used the term “jointly”. and legal requirements met. 3. What about contextual: consider nature of family relationships. expressed language of the instrument on its face. In order for TBTE. the double “and. it depends what relationship B and Rose have as to whether J would get a 1/3 interest or a ½ interest. That is the kind of family relationship where expect them to all have RoS if one dies. By referring to them Current as of 1/10/2012 Page 35 of 40 . B and Rose and Ron are TIC.” qualifies as a TBET. The question is then whether it is JT or TIC. 1/3 equal undivided interest.” might have malpractice claim. but instead deed says TiC. After identifying possibilities. it is unclear. Two major standards for determining what interest is: 1) grantor’s intent (or in a sales transaction. TIC unless the presumption has been overcome by manifestation of grantors intent and meeting the legal requirements for some other form concurrent ownership. who was family friend. The common last name. Do not go beyond the language of deed. but the relationship of B and Rose and Ron to the grantor J. it’s fine. iii.3. (If grantor writes out deed that says “to A and B as husband and wife. 4 components to interpret ambiguity. 1. the mention of the son. J knows B and Rose married. address underlying problem regarding what form of co ownership J actually intended create when he drafted the conveyance of the property. Note: If R was TIC. iv. and contrasted Ron as another unit. so it was mom dad. there must be adequate evidence of intent to create JT w/ RoS. There is authority to indicate that “jointly” is not enough to create a JT w/ RoS w/ the co-owners. so long as JX recognizes TBET and they are indeed husband and wife.

not business transaction. Once the lease expires. R died 3 months after the execution of the lease. Effectuate parties’ intent: where unclear. the JT become TIC. favor the above circumstantial. interest. 1) Any JT may destroy the RoS by severing the JT. do that. along w/ problems. it does not tell you the nature of the relationship. The lower court has held that although H’s RoS was not destroyed. and that the lease terminatied on R’s death. Promoting family relationships: Law tends to favor marriage. Promote free alienation of land/3rd party clarity: encourage voluntary transfer of property. could have very strong presumption—if don’t use required language. 4. Despite the laws protection of marital interests. There is also the competing argument that b/c he is a friend rather than a relative. because while it is true you can share the bundle of sticks. Without H’s knowledge. a. PP: a. when all else fails. This problem is where the bundle of rights has not been helpful. (talking about some sort of severance of the 4 unities of title —time. he is not concerned w/ RoS. H will own the property in fee simple absolute. possession) Current as of 1/10/2012 Page 36 of 40 .” he might be suggesting that they are TBTE. couple may choose JT with RoS. Moreover. Bottom line is that there are good arguments for any of the 4 possibilities. H must share the realty w/ B for the term of the lease. Where you have a married couple that in the law has a property interest. title. H brought suit to have the lease declared invalid. But if the parties’ intent may be ascertained. H argues that R’s unilateral grant of the lease did not destroy her RoS. o This concludes the concurrent ownership problem. Very complicated and ambiguous conveyance. c. The contextual analysis is similar to web of interests analysis. there is a tendency to treat that property as marital property. go with default. b. If there is ambiguity. Hard to imagine how this will be particularly equitable or inequitable. d. Upon severance. he cares about making gift to the family that stays in the family. 5) Severance of JT w/ RoS into TIC: Principal Problem: R and H owned land as JT’s. fall into defaults so as to promote the free alienation of land and clarity for 3rd parties. Equity: Law does not want to facilitate patently inequitable arrangements. But there are circumstances that the court may interpret the law in that particular set of facts to avoid one party from exploiting the other.w/ common last name and referring to “their son. R leased the property to defendant B for a period of 10 years at an annual rental rate of 15k. The surrounding circumstances and public policy is much more of a web of interests approach. To extent courts want to discourage ambiguity in arrangements.

and Z holds 1/3 interest in land as TIC with A/C. and C JT’s. through the lease. so arguably this would sever the JT. C would own 2/3s interest and B’s heirs a 1/3 interest as TIC. Rather. Leaseholds is the right of exclusive possession over the leased premises for the lease term. o o PP concerns regarding formalistic approach: a. o Modern View: Lease does not sever a JT. 2) Principal P: o Issue: Whether the lease to the property from R to B is a severance of JT w/ RoS. o If Z dies. B sells her share to Z. A owns 2/3 of the property as TIC with Z who owns 1/3. has the right to exclusive possession of the premises. R wanted make economic productive use of the land by placing tenant. court will recognize intent--not concerned w/ formalistic rules. o Other View: survivor holds the entire property not subject to the lease.JT conveys interest to 3rd party o A.(Does not matter whether H consented or not) o Formalistic View: Lease severs JT. exclude the other JT. If B subsequently died intestate. Z heir owns 1/3 property as TIC with JT A/C. B and C are JT. Obviously H was not using or occupying the property otherwise H would know about it. o Lease is not a severance of unity of title. o One view: surviving JT takes subject to the leasehold on a ½ interest. the mortgage destroys the unity of title and severs the JT. o JT takes out mortgage on property o Lien theory holds that mortgages do not sever JT. No evidence that R intended to sever JT when he leased to B. o Title theory: b/c a mortgage by a JT conveys the legal title of the JT. a lessee can protect himself against the risks of the lessor dying only by having all JTs sign the lease or by requiring the lessor to sever the JT beforehand. though it might be severance of the unity of possession b/c B. Current as of 1/10/2012 Page 37 of 40 . A conveys share to B. B now hold 1/3 as TIC. o If C dies. under the lease. R cannot. JT do not have the right to exclude other JTs. Under this view. (creates TIC) o Self conveyance: Historically not possible. turning it into TIC. o A. B. now is. Result: A and C hold equal shares of 2/3 interest in the land as JT. and B and C hold 2/3 as JT’s. If JT intends to sever JT.

b. JTs are often family members who expect to benefit from RoS c. Emphasizes that if you are representing someone who is taking an interest in real property. they need to be a part of the transaction. Negotiating 1. d. d. The problem-solving negotiator looks for ways to make the pie bigger. The mutually exclusive view is not the most ideal choice from the law’s perspective given the above PP considerations. and that you are comfortable with your negotiating counterpart. Identifies clearly the clients objectives a. which is particularly likely in a multiple item. rather than simply carving it up. Reaching an agreement through compromise--if not your goal. Also want to protect H--don’t want her to suddenly lose ½ interest of property upon R’s death. Of course. would be inequitable. save time and energy and go to court b. Less common than adversarial approach Current as of 1/10/2012 Page 38 of 40 . Consider creative solutions where we are not in the extreme of formalistic. Adopt interest-based bargaining. but rather find a way to get the lease to operate and maintain RoS. Must determine whether both personalities and subject matter involved in the negotiation lend themselves to this approach f. as it is likely to be. you might ask about the needs and interests of the other party. Such a view is not unfair to potential tenants such as B. how likely will a judgment be enforced?) d. Familiarize and prioritize w/ your clients goals and interests c. make sure who owns the property. If there is any chance that someone else out there has an interest in the property. Then the negotiators can work together to devise options that take into account as many of the needs and interests on the table as possible. novelty of the claim. which analyzes interests and looks for solutions to the mutual problems facing the negotiators. We would like to be able to recognize in some circumstances where maintain RoS but the tenant might be able to complete leaseterm. non-monetary negotiation. would have wanted to have all JTs sign the lease or require R to sever JT beforehand. If working with B. d. track record of other players in the game. you must be prepared to honestly share your client’s goals as well. Evaluating the case objectively (strength of legal support. credibility of likely witnesses. who are on constructive notice of the existence of multiple owners if the deed is recorded or the will probated. If you determine that the subject matter is appropriate. availability of admissible evidence. e. g. relative strengths and weakness of both sides.

by framing the problem. and you should hold firm at that point if you get there during the negotiation. d. and information you want your opponents to have. Carefully phrase questions so as to get the information you want k. you can often have a negotiation advantage. You should also set a target point. 3. Framing-. or that allows one party to benefit without damaging the other party. BATNA prevents negotiator from accepting an agreement that is too unfavorable. d. you should set a bottom line before you go into the negotiation. You should also use this final stage of the negotiation to make sure that you have actually reached an agreement. Target. c. h. Shared needs (if applicable. important. Establishing a Opening. Identify whether shared or independent needs are essential. unless you are satisfied that you have seriously misanalyzed the problem. These few moments at the end of a negotiation can make a large difference in the parties’ commitment to the agreement and willingness to carry it out. Finally. Frame the problem in a way that it is solvable by a win/win solution. Closing the Negotiation o. start here) m. Information as belonging to one of 3 categories: information you want. Once you believe you have achieved a negotiated resolution. i. This should be the point below which you absolutely do not intend to go. Understand competing needs and interests and sometimes your clients might have to consider making tradeoffs. or desirable. Be careful what you disclose . a point at which you would like to settle and that you believe is reasonable based on the information you have.2. Remove egocentricity by framing problem in a manner that all can accept. b/c better option outside the negotiation. Use active listening and info sharing to find out as much as you can about the other side’s interests. l. information you don’t want to divulge. but also give bargaining room b. Current as of 1/10/2012 Page 39 of 40 . c. Analyzes in substantial depth at least 5 negotiation strategies that have the potential to be effective at achieving the client’s objectives with at least 3 strategies having a high potential for success a. b. Opening should be credible. p. take a few moments to find out if it is possible to adjust the agreement in some way that benefits both parties. but consider that if you do not share you may come out with an outcome that is less economically beneficial to both parties j. and BATNA(best alternative to a negotiated agreement) a. Independent needs-those that can be met w/o an adverse impact on the other party n.

Consider other persons negotiating style and personality. b. a. including considering the nuances of those likely positions and strategies in light in comparison to the client’s objectives and strategies.4. which can have a huge impact on the progress of a negotiation. Important to consider other persons BATNA Current as of 1/10/2012 Page 40 of 40 . Considers and analyzes the other sides’ likely negotiation position and strategies.

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