Plater Property Outline - BC Law

Ian Cohen Property Outline
Updated through 5/9/05 class notes Updated through 4/27/05 text notes Page 1 of 45
Property
1) STUFF FOR THE TEST
A)

B)
EXTRA STUFF TO MENTION not a lawyer does the law apply to this jurisdiction? walk the land ambulate terram First in time, first in right Extra Torts? Policy Someone should walk the land to look for unrecorded easements Should hire an engineer to do environmental due diligence and search for contamination protection against the superfund Should run the grantor-grantee index Should hire a surveyor to determine where/if there is an easement on the land CHECKLIST
2) LAND TRANSACTIONS
A)
THE PROCESS: i) first in time is first in right ii) Searching the title (1) Reverse grantor-grantee index (a) Start off with the grantee index
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(i) Start off with the name of the grantor (ii) Look at the last name and go year by year want to know who the previous grantor was (b) Then look at the grantor index (i) Look to see who each grantor conveyed the land to (2) Tract index (a) Organized by the address of the property (b) Only exists in less than 2% of the US (3) Malpractice (a) Based on the official index not some other index held by title insurance companies (b) Malpractice if there is a negligent mistake (c) Lawyers are held to what can be found in a grantee-grantor index (d) Marketable title acts (i) Limits the tile searches to a reasonable period usually 30 or 40 years (ii) When one person has a record title to land for a designated period of time, inconsistent claims or interests are extinguished (iii)All claimants of interest in land must file a notice of claim every 30 or 40 years (4) Always need to walk the land (a) Look for easements (b) Look for things that would not have been recorded iii) Title insurance (1) Guarantees that the insurance company has searched the public records and insures against any defects in the public record (2) Policy excludes:
(a) Unrecorded easements (b) Implied easements (c) Prescriptive easements (d) Claims of persons in possession not shown by the public record (3) Does not run with the land to successive purchasers (4) A one-time premium paid at the time the policy is issued iv) The purchase agreement (contract) (1) Looks forward to the day of closing when there will be a transfer of deed (2) Governed by the statute of frauds (1677) (a) Must be written (i) Non-writiten agreements to buy 1. Could be oral if money had already been paid could argue partial performance 2. If buyer already sold his property, could argue promissory estoppel a. Seller could not change mind b. Question of whether the contract was binding on both parties (b) Must include a description of the property (c) Must include the price (d) Must include the signature of the seller (3) Cannot misrepresent typical contract doctrine (4) Can be sued to force specific performance if it is specific enough (5) Usually states: within 12 days Purchasing Sales Agreement (PSA)
(6) implied warranty of marketable title (i) marketable title a title not subject to such reasonable doubt as would create a just apprehension of its validity in the mind of a reasonably, prudent and intelligent person, one which such persons, guided by competent legal advice, would be willing to take and for which they would be willing to pay fair value (ii) if the seller cannot convey a marketable title, the buyer is entitle to rescind the contract (iii)The implied warranty only lasts until the closing after that it must be explicit (iv)The title must be good (marketable) the land does not have to be marketable (v) The seller cannot destroy marketable title cannot be self-created (vi)May only be waived by express statement (vii) Marketable title is not a clearly objective determination 1. Changes depending on the community 2. Must get a consensus of the conveyancing lawyers in the community need expert witnesses 3. Should put a clause in the contract what marketable title is (viii) There must be a tangible burden the mere existence of a restriction might not destroy marketable title: 1. If the covenant was not being enforced could argue that was not a problem with title 2. If the covenant had not been enforced for 20 years could argue that there was an estoppel (ix)Dont want an alien chain of title 1. Could be a cloud on the title 2. Could be a fly speck on the title on the record but has no practical effect (7) Equitable conversion occurs as soon as there is a contract (a) Legal title stays with the seller (i) the property becomes personal property (ii) the seller is entitled to the value of the property
(iii)in some jurisdictions there is uniform sale and risk the duty of insurance goes with the party who has the right of present possession (b) Equitable title stays with the buyer (i) Generally the buyer owns the insurable interest in the property (ii) buyer should take out insurance between the date of the contract and the date of closing incase the property is damaged between the purchase agreement and closing (c) Double title exists until the contract is rescinded or there is a closing (a merger of equitable and legal title) (d) Duty to ensure (i) In some jurisdictions the duty of insurance goes with the party who has the right of present possession (ii) In some jurisdictions the duty of insurance goes with the party who has equitable title v) The purchase and sale agreement (PSA) (1) A novation a new and second contract that modifies the first (2) Typically by consensus if cant get a consensus, then go back to the first contract (3) States what is sold and what is not sold (4) Sale is contingent on: (a) Financing (b) Building inspection (c) Physical inspection of the premises covers beyond the house (d) Clear record title (in addition to marketable title) (i) Can go all the way back to the Indians and back to the present without any problems (ii) An unwritten easement would not affect clear record title would affect marketable title (5) There is a good faith duty to do whatever the contract requires cant get out of the contract by stating that sale is contingent on buyer doing X and then not do X vi) The deed
(1) Conveyed at the closing (2) Does not happen until: (a) Money has been secured (b) There has been a title search (c) There has been a building inspection and appraisal always call a licensed site professional to inspect the property (3) Both a contract and a deed (a) Has a warranty (4) If the buyer is not allowed to take control of the deed on the day of the closing then all the promises that are made on the deed expire (5) Warranties: (a) Present warranties (i) Breached at the moment of conveyance or not at all (ii) Run with the life of the grantee (iii)Stop at the next conveyance so a future purchaser cannot sue based on the present warranties of the previous conveyance (iv)Guarantee that: 1. The grantor is lawfully seized in fee simple 2. The grantor has a good right to convey in fee simple 3. The property is free of all encumbrances (implied warranty of marketable title) (b) Future warranties (i) Typically run with the land but are only allowed to be sued on by subsequent assignees if the subsequent assignees are ousted (ii) The amount that can be sue for is set at the purchase price on the day the covenant is made (iii)Typically dont get an y $ for violation of future warranties unless there has been a loss
(iv)The majority rule is that the warranties dont run with the land (v) Guarantee that: 1. The grantor and his assignees will warrant and defend against the challenge of title from someone claiming to have superior title 2. Warranty of quiet enjoyment the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title 3. The grantor will execute any other documents require to perfect the title conveyed (c) May include an implied warranty of fitness held by a majority of states (i) An implied duty to disclose for defects known to the seller that could not have reasonably been discovered by the buyer (ii) A very limited duty (iii)An exception to the rule of caveat emptor (iv)The real-estate broker may be held liable as if it were a co-venture (v) some states include not only the title and property, but certain factors in the neighborhood a question of how far the neighborhood extends and if there is a duty at all 1. especially when a specific purpose for the property is know to the seller at the time of purchase 2. e.g. if the seller knew that the land was to be used for a family but there was a crack house next door (vi)may include an implied warranty of quality 1. if the seller is the person who built the house 2. the builder is charged with having better knowledge of the conditions of the house (vii) the seller may be liable if there is toxic waist on the land 1. EPA requires that the person who owns the land at the time the toxin is discovered is liable for the entire cost of cleanup 2. if a 3rd party had put the toxin on the land and the owner did not know of it then the owner is not liable unless there was constructive knowledge (this might not be constitutional) (6) Types of deeds (a) Quit claim deed
(i) I ___ grant and quitclaim all rights that I have in the following real estate (ii) Gives whatever title (if any) you have in the property (b) A general warranty deed a rebuttable presumption (i) Includes both present and future warranties (c) A special warranty deed (i) Includes the same warranties as with a general warranty deed (ii) The warranties only apply to things that the seller did does not apply to things that existed before the seller had the property (7) Merger by deed (a) All contracts are merged into the deed (b) A common law rule (c) Do not have to supply any of the promised things until the closing (d) The present warranties are extinguished (e) If there are previous promises that want to be continued, there must be explicit novation (8) Does not have to be recorded to be legally binding (9) Destruction of a deed does not invalidate it vii)The conveyance (1) There must be an intent to convey a present transfer of title (a) Void if only testamentary evidence must show that the deed was to take effect at the death of the grantor (2) There must be a writing statute of frauds (3) There must be delivery (actual or symbolic) recordation creates a presumption of delivery (a) May be handed from the grantor directly to the grantee upon receipt of the purchase price
(b) May be handed from the grantor to a third party (an escrow agent) who then hands it to a grantee upon closing (4) There must be acceptance presumed since there is value to the land (5) May be conditionality and futurity different from a transfer of gifts (a) May be put into an escrow by giving it to a 3rd party (i) a mini-trusteeship (ii) If there is no escrow, then the deed is valid but the condition is invalid (iii)The title of the grantee will relate back to the date the grantor handed the deed to the agent (iv)If the grantor dies before the escrow agent delivers the deed, the delivery is treated as if it occurred before the grantors death (b) May make a defeasible fee all that matters is that at some point the land comes back to the grantor (6) Invalid deed cases are treated as adverse possession
B)
CAVEAT EMPTOR
THE GENERAL RULE
i) Marketable title is an exception ii) Physical defects (1) Physical defects generally fall under caveat emptor only care about title defects (2) Exceptions: (a) If the seller creates a physical defect that could be expected to cut back on market value
C)
THE REAL ESTATE AGENT i) Typically represents the seller, not the buyer ii) The buyer is typically unprotected
D)
MORTGAGES i) A secured transaction
(1) Gives a promise to pay interest to someone in exchange for a promise to pay (2) secured by equity (3) the banks secured interest is the amount they loan plus expenses ii) The bank loans a % of the purchase price (1) The bank does not loan 100% of the purchase price a margin (2) The closer the % to the purchase price, the higher the interest rate (3) Allows a buffer to ensure that the bank collects the amount it is owed (4) A second mortgage on top of the first one, with the equity as collateral would have a higher rate of interest there is less of a buffer and the first bank gets paid off first iii) Two documents: (1) A contract (a) A promise to pay X amount over Y years plus annual interest (b) The due on clause if anything is done to change the legal status of the security in a way that diminishes it, the full debt will be due on the property (i) A violation of the mortgage (ii) A way for the banks not to lose their security (iii)Voidable in many states (2) A mortgage document purchaser conveys in fees simple to the bank to have and to hold if and when there is a failure to honor every provision in the contract (a) To have and to hold the habendum clause (b) A conveyance from the buyer (the grantor) to the bank (the grantee) (c) The buyer has present possession (d) The bank has a future interest (i) an executory interest
(ii) takes effect when there is a failure in fact on the contract (e) the mortgage document becomes part of the contract to lend money iv) the deed incorporates the contract (1) according to the deed: the bank gets the whole land if the borrower defaults (2) according to the contract: the borrower gets the extra money from the sale of the property by the bank v) if the buyer defaults on paying the bank (1) the bank goes to court to get a declaratory judgment that the contract is violated (a) the executory interest takes title (b) the banks interest is recorded (2) the bank also gets a summary judgment on the foreclosure on the equity of redemption (a) if the bank sells the property to a new buyer, the previous borrower can still come back and pay off the loan (plus expenses) to get the house (b) the law of mortgages is a equitable field (c) allows the bank to sell the title interest plus the foreclosure of the right of redemption (3) may ask for a foreclosure by deed for by sale (a) by deed taking the deed satisfies the debt (b) by sale the bank gets the amount due plus expenses and the borrower gets the rest (4) the land is put up at auction (a) banks dont want to own property (b) if there is money left over after the sale, then it goes to the borrower minus costs and expenses (c) if the property sells for less than the amount due to the bank, then the bank gets a deficiency judgment against the borrower (i) a personal judgment against the borrower
(ii) an unsecured debt (d) the bank must show good faith when conducting the sale to try to get as high a price as possible must show due diligence vi) Paying off the loan (1) The interest is frontloaded the first payments are mostly interest, the last are mostly principal (2) The interest is tax deductible the only reason people agree to pay so much interest (3) Equity in house as the principle is paid off there is a rising cushion of value (a) The amount the value of the house increases plus the amount of principal paid off vii)Installment sales contracts (1) When the day between contract and closing is very long (2) Allows the buyer to pay off the seller in installments (3) Should always make sure that the installment sales contract is recorded even if the time is short (a) Want to make sure that if the seller dies then the property wont be subject to debtors (b) If there is a single late payment then the seller can rescind (i) Would want a soft-nosed court to given back the money paid under equity (ii) Under common law cannot get the money paid back (iii)Best to include a clause that would provide that a mere missed payment would not be grounds for recession (4) Courts are increasingly saying that they are constructive mortgages (a) Created at equity, enforced at equity (b) Equity abhorrers a forfeiture (c) The court will create a constructive trust from an equitable conversion the seller holds the money paid in trust (d) Prevents the buyer from losing everything (as the legal terms of the contract would hold)
viii) Transferring the mortgage (1) Could transfer the remaining debt to the buyer (2) The buyer would be added to the preexisting mortgage but the seller would not escape the duty to pay (3) The bank would record the buyer being added to the mortgage (a) Similar to a lien (b) A subsequent purchaser would see the lien on the property and the banks interest would be protected
E)
BONIFIED PURCHASERS i) A BP who could have recorded but didnt is not protected ii) Common law: the BP purchases whatever the seller has to sell iii) Statutory exemption recording acts allow the seller to pass on full title even if all that the seller had was a nullity (1) Types of statutes: (a) Race statute if there are competing claims, the person to record first prevails (i) Does not matter if the party to first record knew about the previously unrecorded conveyance (ii) Advantage is that it allows certainty (iii)Only present in a small number of states Louisiana and North Carolina (b) Notice statute a subsequent BP prevails over a prior purchaser as long as the subsequent purchaser acquires the interest without notice of the prior claim (i) Look to the time of the closing of the BP (ii) The subsequent purchaser must not have had notice on the record at the time they acquire the interest (iii)Recording by the BP does not make the conveyance effective only determines if a subsequent BP could come in and cut off title (c) Race-notice statute the subsequent purchaser prevails as long as they dully record first and had no notice of the preceding interest when first acquiring their interest (i) The subsequent purchaser must not have had notice on the record at the time they acquire the interest
(ii) The subsequent purchaser must be the first dully recorded 1. in order for a person not dully recorded to prevent a subsequent purchaser from the BP from taking the land, the person must bring a declaratory judgment against the BP a. All that needs to be done is to record the complaint b. subsequent purchasers are held to whatever they would see on the recorded titles (iii)the shelter rule the person who has not dully recorded cannot upset a later purchase by recording (2) Notice: (a) The law of notice implies that there will be a grantee-grantor deed in the deed out search (b) Actual notice (c) Constructive notice (i) Knowledge that the purchaser could have had by searching the title (ii) Does not matter if the purchaser never searches the title held to what you would have known if you had looked (d) Inquiry notice when the purchaser hears of something that would cause an ordinarily prudent person to inquire further (3) Recording must be dully recorded (a) dully that the record is findable by doing a deed-in to deed-out search only have to search deed in to deed out (b) e.g. if O A (does not record), O B (does not record), then A C (does not record), then A records, then B records, then C records (i) if in a race notice jurisdiction, C would still win because B is not dully recorded (ii) B is not dully recorded with respect to C since C would not see Bs recording in a deed indeed out search iv) Title by equitable estoppel (1) E.g. if A B (records), but A did not have title to the land, and then O A (records): (a) In the eyes of the registry of deeds, A owns the title (b) In the eyes of the common law, A owns the title
(c) In the eyes of equity, B owns the title (2) However, B would not be dully recorded so B should get a complaint registered to prevent a subsequent BP v) Bonified lenders (1) e.g. If A gives O a mortgage but does not record, and then B gives O a mortgage but knows of As mortgage but only records the second one, and then C gives O a mortgage but only is able to view Bs recorded mortgage, who has first claim to the property? (a) Between A and B, A prevails since B knew about A (b) Between B and C, B prevails since C knew about B (c) Between C and A need to go into an equitable partition of the foreclosure amount (i) Might argue that C should get the foreclosure amount minus Bs amount since C only knew of Bs claim (ii) Might argue that B had no duty to warn A and A was negligent first (iii)Might argue that As interest should trump Bs since B knew of As interest (iv) (v) Might be an equity argument about who had the most responsibility to the general public vi) Bonified purchasers of easements (1) E.g. O blackacre to A with an easement on whiteacre, then O B whiteacre and B doesnt know of the easement (a) Question of whether the buyer of a piece of land who did not know that a third party had purchased an easement on the land from the seller is subject to that easement (b) B would not have seen the easement since it was attached to whiteacres title (2) Doctrine of multiple deeds from a common grantor: (a) Pennsylvania held for what you would have seen if you had looked at the page even though the deed is not to the property (b) Most other states not held to knowledge of the easement unless there is a tip-off
3) LAND USE
A) SUBDIVISIONS
i) how they are made (1) the property is surveyed (2) the property is divided up and numbered on a plat map (3) the properties are conveyed to ones self in fee simple by a master deed with the plat map annexed (4) but you dont have to have a plat map and all that to subdivide can just sell off a bunch of parts of the property ii) mortgages on subdivisions (1) the original owner had a mortgage on the entire plot a blanket (umbrella) mortgage (2) each person who purchases a subdivision gets a second mortgage (a) the second mortgage is subject to the blanket mortgage, but the purchasers are protected from foreclosure of the first mortgage through the equity of marshalling (b) the equity of marshalling (i) the bank would want to foreclose on the most valuable plots of land (ii) equity requires that when a senior encumbrancer has the right tot being foreclosing, he must being with the most junior (least painful) lots would be the unsold lots (iii)goes by the time of investment (iv)this is the only reason people feel comfortable buying early and building a big house on the land (v) the bank is required to protect the next most senior
B) LANDUSE PLANNING
i) decide what the land should be used for (1) industrial (2) residential (3) commercial ii) look at the geophysical constraints walk the land
(1) topography (2) surface water (3) ground water (4) trees and vegetation (5) erosion (6) sight lines (7) sunshine (do a shade analysis) (8) roads & traffic patterns (9) flood plains (10) wind currents (avoid pollution) (11) distance to the city iii) look at public law constraints (1) historic preservation (2) wetlands (3) airports (4) flooding regulations (5) drinking water (6) subdivision regulations need to have water, electricity, sewage (7) septic system regulations (8) setbacks and buffers (9) lotting and building arrangements
(10) (11) (12) (13)
frontage health regulations signage easements, covenants, etc
iv) maximizing land values (1) a parcel of lands development potential is dependant on its natural constraints (2) the regulatory build-out is a function of federal law and state regulations and policies (a) build-out maximum potential value of a piece of land (3) good to regulate through zoning, bad to regulate through protections (a) a landowner relies on zoning in planning what to build (b) cant let a developer think that they can build X units but then discover that they can only build Y units when they get into the permitting process the private sector would not tolerate the response (c) over-regulating risks lawsuits
4) LAND USE RESTRICTIONS

A)
PRIVATE VS. PUBLIC LAW i) Can do things in private law that cannot due with public law ii) Private law always trumps public law if there is a conflict
B)
EASEMNTS
i) a less than fee simple interest ii) servient tenement the one that is burdened iii) dominant tenement the one that receives the easement iv) created by:
(1) prescription a title right that has been taken by time (a) In a jurisdiction not following lost grant theory, to prevent a PE the owner must effectively interrupt or stop the adverse use (b) Exclusivity: do not have to show that the claimant made exclusive use of the way, but that the claimants right to use the land does not depend on a like right by others (c) cannot have a prescriptive easement of a view would have to buy the rights to build above X feet so as to preserve your view (d) might be able to have one for solar panel use (2) express grant (a) expressly stated in writing (b) held back by a grantor in a fee simple deed that is conveyed to another person (3) estoppel (a) an equitable easement where there was reliance to the owner of the easements detriment (b) a question of how long it should last (i) should it be perpetual? (ii) Should it be until you recoup your investment? 1. equity is probably not a permanent easement 2. amortization of the reliance should end the reliance on the easement (4) dedication to the public (a) must be formally dedicated (b) must be accepted by the public (5) implied dedication to the public (a) where the landowner evidences an intent to dedicate, and the state accepts by maintaining the land used by the public (6) implication implied that landlocked parcel will be accessible
(a) based on intent do not have to pay for since assumed in the purchase price (i) implied from intent based on a prior existing use 1. based on assumptions of what parties expectations were at the time of the subdivision 2. based on prior use 3. implied on the basis of an apparent and continuous use of a portion of the tract existing when the tract was divided 4. implied grant if the grantee of the land needs the easement 5. implied reservation a. if the grantor of the land needs the easement for the land that he keeps b. harder to do since it was the fault of the grantor (ii) implied from intent with no prior existing use 1. based on the obvious necessity at the time of severance 2. based on the assumption of what the parties expectations were at the time of the subdivision 3. implied as an intended grant if the grantee of the land needs the easement 4. implied as an intended reservation if the grantor of the land needs the easement for the land that he keeps (b) based on public policy (implied by strict necessity) (i) based on a strong presumption against landlocked parcels (ii) have the pay the servient landowner should not pay full value for the easement since it lasts only as long as the necessity is present (iii)not based on intent of the parties (iv)not based on conditions at the time of the subdivision (v) e.g. if a parcel is sealed off by a calamity (vi)a question of whether it requires strict necessity whether there msut be no other way
v) what kind of easement you have: (1) a less than fee simple title based on a right to use (a) right of way (b) easement of access (c) profit a prendre (i) right to enter and take part of the land or something from the land (ii) a combination of easement of access, easement to mine, easement to take away (d) easement to enter and swim, sail, picnic, etc (e) development rights (f) conservation rights (i) prevent the servient owner form building on the land except as specified in the grant (ii) the value of the conservation easement is deductible as a chartable gift usually the development value of the land (iii)perpetual in duration (iv)transferable (v) can be in gross (g) easement to build (h) easement to occupy (i) easement to farm (j) easement to enter and mine and remove minerals (k) prescriptive easement (i) must be interpreted reasonably over time
(2) (3) (4) (5)
(6)
(7)
(ii) use not confined to the actual uses made during the prescriptive period (iii)uses must be consistent with the general kind of use by which the easement was created and with what the servient owner might reasonably expect to lose by failing to interrupt the adverse use dominant tenement or servient tenement? Express easement or implied easement? Exclusive easement or inclusive easement? (a) The presumption is that if an easement can be shared it will be shared Easement appurtenant or easement in gross? (a) Easement appurtenant (i) Presumes that it is linked to a pieces of property so it would be sold with the property (ii) A conceptual nexus (b) Easement in gross travels with a certain person, not connected to a piece of property Positive or negative? (a) Positive allows a permitted use (b) Negative the right of the dominant owner to stop the servient owner from doing something on the servient land (i) The right of the dominant owner to stop the servient Defeasible easement or indefeasible easement?
vi) Can be enforced by: (1) Trespass action (2) Ejectment (3) Injunction (4) damages
vii)Can be ended by: (1) By the own terms of the easement (a) allowed time (b) defeasibility condition clause (2) Adverse possession or a second prescriptive easement in violation of the terms of the easement (a) to prevent this, need to bring an ejectment action (b) the easement needs to be defended just like a piece of land (i) The easement for the old chain of title remains even through AP (ii) The easement runs even if not being used must be blocked in order for AP to end it (3) Merger (a) If the dominant and servient tenement become the property of the same party (b) The easement is killed by merger unless there is a separate document (c) If the parcel is subsequently re-divided, a new easement by implication can arise if the circumstances at that time indicate a new easement was intended (4) Conveyance back to the servient tenement by the dominant tenement (a release) (5) Counter estoppel (6) Release (7) Abandonment (8) Statute (9) Unreformable surcharge (a) overburdening (b) An irreparable violation of the terms of the easement if the person who uses the easement violates its terms or changes the nature of it
(c) Used it to such an extent that it destroys the nature of the easemnt (10) Destruction of the servient tenement (11) if the easement is based on equitable estoppel and the reliance has been paid off an end to the estoppel-fairness (12) An end to the necessity on an easement created by public policy (a) would not apply to severance easements implied from intent because it is based on the presumed original intent of the grant or reservation (b) equity will not enforce a vain thing feckless (13) viii) beach access (1) A public easement to the high water mark the majority of states (2) A public easement to the low water mark ME and MA (a) but not in Marthas Vineyard or Nantucket owned by the Duke of York, not King Charles (b) exception is that there is a public easement if you are: (i) fishing (ii) fouling (iii)navigating (3) a public easement to access the water and to the dry sand New Jersey (a) Matthews v. Bay Head (b) A customary right makes the court more willing to accept the easement ix) Splitting or changing an easement (1) If an easement grants access to blackacre, it can only be use for access to blackacre (2) Need to look at what the expectation of the parties was when the easement was created:
(a) Was it within the fair contemplation of the parties? (b) Does it so increase the burden on the servient tenement that it couldnt have been within the contemplation of the parties? (3) The servient owner may change the location of an easement, at his expense, if the change does not: (a) significantly lessen the utility of the easement (b) increase the burdens on the owner of the easement in its use and enjoyment (c) frustrate the purpose for which the easement was created
C) COVENANTS
i) a contract ii) created by an agreement between private parties iii) e.g. a piece of property must be used for residence #1 covenant in the US iv) dont have the gravitas of easements or defeasible fees v) flexible (1) flex covenant with a voting mechanism (2) judicial ruling that the covenant is not reasonable (a) much can be argued as to what is reasonable (b) a question of what the standards are standards are more likely to be reasonable if set up by a review board than if just imposed unilaterally (c) includes elements of governments, substantive, and procedural due process (3) public law vi) when a covenant requires a payment from the landowner, it should always take into account inflation to be effective vii)when drafting a covenant, should make explicit what the standards are viii) Created by:
(1) Created by express contract (a) Written statute of frauds (b) Oral (2) Created by implied contract (a.k.a. promissory estoppel) (a) A.k.a. an equitable servitude should be called a restrictive covenant that is being created in equity (b) The opposite of an easement (c) Implied by equity can sue for injunction but not legal (monetary) damages (d) Implied by implicit common plan (common scheme) (i) Look at the actual effect (ii) If there is an implied common scheme, then there is an implied negative reciprocal promise (iii)Some courts say that if 25% of a subdivision have residential covenants, and 40% of the subdivision has been sold, there is implied promise by the subdivider that it will all be residential (iv)Implied by notice 1. There is no notice on the title of the property a. the tip-off is that all of the other lots have residential houses b. need to walk the land 2. there is no requirement to read the titles of the other lots except in PA where there is constructive notice if the other lots have the covenant ix) Created when: (1) At the time of a fee simple deed conveyance usually ride on the deed (a) Promisor and promisee are linked by an estate relationship privity of estate (b) Promisor and promisee are linked by a contractual relationship privity of contract (2) At some other time
(a) Promisor and promisee are linked by a contractual relationship x) What kind of covenant you have: (1) Static or flexible? (a) Flex provision with a voting mechanism usually by a supermajority (2) Appurtenant or in gross? (3) Individual or multiple (a) Individual must be between at least 2 people (b) Multiple (i) Homeowner associations (ii) Subdivisions 1. the best way to have a covenant applied to all subdivisions it to put the covenants on the plat map 2. all residents can enforce since the covenants are mutually reciprocal (iii)Condo associations (4) Runs with the title rights or does not run with the title rights? (a) Not whether it runs with the land, because adverse possessors are not bound to what is on the title (5) Negative or positive? xi) How they are enforced: (1) By equity (a) Injunction (i) But cannot ask for an injunction after there has been reliance would be grounds for an equitable estoppel (b) Specific performance
(2) By legal remedies monetary damages xii)Who can enforce anyone with standing (1) The original parties (promisor and promisee) (a) so long as they have standing (b) May get both equitable relief and legal damages (2) Subsequent owners (successors in interest) (a) Must be a contract horizontal privity of contract (b) Must be vertical privity of estate successors to title rights who are in the chain of title (i) Best way for a HOA to have vertical privity is to give it a square foot of land (ii) The seller cannot usually be sued if a successor breaks the covenant (iii)exception: subdividers who have not sold all of the subdivisions can be sued if a successor breaks the covenant there is an expectation that the subdivider would enforce the covenant (c) in order to get legal damages($) must be horizontal privity of estate can get equitable damages without horizontal privity of estate (i) Successors to title rights if the successor has sueability for the damages 1. Can be enforced against original parties 2. Can be enforced against successors (ii) The legal damages benefit of the covenant runs even if there is no horizontal privity of estate (iii)The legal damages burden of the covenant does not run if there is no horizontal privity of estate 1. successors can only enforce monetary damages if there is horizontal privity of estate 2. Would want to manufacture privity of estate might convey to other party an easement to walk on land for one day (iv)Can get equitable damages without horizontal privity 1. e.g. specific performance
2. not a huge limitation since lawyers mostly sue for specific performance (d) The was intended to run with the title (i) I promise for myself and my heirs, successor and assigns (ii) A covenant runs with the title even if it was not on the buyers title (e) the covenant much touch and concern the land (i) an essential level of value, permanence, etc 1. is it just personal? 2. or des it have some oomph to it? (ii) e.g. could argue that a homeowners fee only deals with the association so it does not t&c the land (iii)e.g. could argue that a homeowners fee is tied to the maintenance of the roads and easements without which the land is useless so it does t&c the land (f) must be notice (i) successors who did not have actual or constructive notice of the covenant cannot be held to it (ii) recording in the chain of title is sufficient (3) Third party beneficiaries (a) If a contract is made for the benefit of a 3rd party who is not in privity to the transaction, the 3rd party may also bring an action for enforcement (b) There still must be a 1st and 2nd party in order for there to be a 3rd party (i) Without the other parties then the covenant would be an inchoate, incipient covenant (ii) Without the other parties the covenant would not have come into force and can only enforce a covenant that has come into force (c) the covenant cannot be enforced against the 3rd party beneficiary a one way benefit xiii) Can be ended by: (1) By the terms of the covenant private law
(2) Through public law (a) regulations dictating the length of the covenant (b) regulations dictating zoning (c) condemn the land (eminent domain) (i) not clear if beneficiaries need to be compensated for the termination of a covenant (3) Changes in conditions (a) If the covenant becomes obsolete or unuseful (b) The question isnt whether circumstances have changed, but whether the benefit received no longer the benefit intended (i) Need to look beyond the lot in question (ii) The benefit is not just for one lot but all of the appurtenant parcels (4) By agreement through a flex covenant (5) By universal party agreement (a release) (a) If dont waive on the record, probably doesnt bind only interpersonal (6) Race, color, creed or national origin covenants will be terminated (7) Violation of a public policy (8) Adverse possession (a) Covenants are attached to the original deed so AP would quash the original title different than servitudes (b) But could argue that the unfairness and disruption to the community means that the covenant should apply to the adverse possessor analogous to an easement (c) Would argue that there was no notice of the adverse possession and so the covenant should not end (d) Invalid deed cases are treated as adverse possession (e) Cannot claim destruction by AP if you have used the covenant against someone else

D) DEFEASIBLE FEES
i) the strongest and least flexible land restriction ii) created by a conveyance (1) a will (2) a deed iii) equity abhors a forfeiture a big problem and one reason why should also have covenants or easements
E) LICENSES
i) the weakest land restriction ii) a contract right iii) cant be defended with an ejectment action iv) can be revoked at will so long as damages are paid
5) NON-CONSENSUAL LAND USE

A)
PRIVATE NUISANCE i) The use of private property by one person to harm the private property of another ii) Health damages make more persuasive a private case (1) Increases the chance of higher damages (2) Increases the chances of getting an injunction
B)
PUBLIC NUISANCE i) Based on a substantial harm that has been caused to a public right (1) If the government is not able or willing to respond to land use antagonism, the n the courts may sometimes step in ii) Must show that the injury is different in kind not just different in degree
(1) Traditionally would require a public official to bring the suit (2) But there is standing for a private citizen if can show that the injury is not just different in degree but different in kind (3) Health damages are always sufficient to create a public nuisance (a) A bodily injury is different in kind (b) Since everyones body is different then the injury is different in kind iii) Filing as a public interest is a defense against the argument against a private nuisance (1) Cannot get AP or PE against the public so if you sue on behalf of the public estoppel cannot be used as a defense (2) Allows the comparison between public interests instead of between public interest and private interest (3) A judge is supposed to do justice not only between the parties but between the parties and the public equity is balanced by the public interest as well iv) The easiest way to get an injunction is to file a public nuisance
C)
INTENTIONAL i) Must show that there was civil intent by Substantial, foreseeable certainty of the harm or the risk of harm (1) the must show only that had knowledge that continuing the actions would create a nuisance (2) the must have known to a substantial certainty that the actions were creating a nuisance (3) giving notice to is sufficient to create a substantial certainty a good reason to petition the ii) must show that suffered an unreasonable burden (1) unlike with negligence where must show that s actions were unreasonable iii) Must show that s actions caused the harm iv) Do not need to balance the utilities to prove the tort the locus of the balance is shifted to damages (1) The would prefer negligent nuisance so that the utilities would be balanced to prove the tort (2) The would prefer intentional nuisance so that utilities would only be balance after the tort has been proven
(3) Do not have to balance the utilities in order to get monetary damages will always get damages if there is harm (4) Need to balance the utilities to get an injunction
D)
NEGLIGENT i) Must show that the was harmed ii) Must show that the was owed a duty by iii) Must show that the was unreasonable in causing the harm iv) Must show that the utilities should be balanced in favor of may look at the state of the art
6) EMINENT DOMAIN
A) B) THE MAYOR BRINGS A LAWSUIT
MUST SHOW 5 GOVERNEMTNATL POWER REQUIREMENTS i) there is the power/authority to condemn (1) city authority comes from the state (a) cities dont have that power automatically (b) the city does so under its police power health, safety and welfare (2) federal authority comes from the constitution which comes from the states (a) comes from the commerce clause (b) must show that a congressional statute has delegated the power that the states gave to the fed (3) a question of substantive due process ii) must be acting for a proper public purpose (1) cannot be a poised purpose e.g. punishment for not doing something (2) a question of substantive due process
iii) the condemnation must serve the desired purpose (the means are related to the end) (1) a rational official must have been able to believe that the condemnation would serve a public purpose (2) condemnation might be prohibited if: (a) if the act bears no rational nexus to the purpose (b) where the pattern of regulation has insufficient supporting data or planning (c) if the condemnation is arbitrary or discriminatory (3) a question of substantive due process (4) a question of whether the condemnation was necessary (a) if it was for a property public purpose and the government has the authority, it was well neigh (nearly) unassailable (b) selling or giving to a private party might increase the necessity that has to be shown (c) usually broad necessity, not sharp necessity (d) the choice of site will usually not be enquired into unless can show irrationality iv) the private burden cannot be oppressive in relation to the public benefit (1) a question of how far the collective power of the majority can erode the property of the individual for the sake of public well-being (2) since the government will pay just compensation, the burden argument is eliminated (3) may argue that there is a rational alternative involves judicial acknowledgement of a less drastic means (4) a question of substantive due process v) the individual burden will be compensated (1) not clear if beneficiaries need to be compensated for the termination of a covenant (2) a question of procedural due process (3) must get just compensation
(a) do not get relocation costs (b) do not get sentimental value (c) get market value that is based on what an average land investor would pay for the land today with the foreseeable future economic uses in mind (4) The price that the government pays is fixed at the date just prior to the announcement of the condemnation (a) Anything that goes up as a result of the public enterprise is fixed at the prior date (b) But if the price went up as a result of private enterprise, the government would have to pay the higher price
C) D) PERSONAL PROPERTY MAY BE CONDEMNED IF THERE IS NO STATUTORIAL LIMITATION
IF THE CONDEMNED PROPERTY IS TO BE TRANSFERRED TO A 3
RD
PRIVATE PARTY
i) Still a public use as long as it goes to a public purpose Burman v. Parker ii) if a rational official could have believed that it served a public interest, the court will defer to the official even if the land goes to a private party must be a rational basis iii) the standard of review of rationality increases if it goes from private to private (1) must question if the condemnation was necessary to the purpose of the project as it was designed (a) look at the location and ask if it could be done elsewhere (b) but may consider esthetic reasons for the location without it being a poisoned purpose (2) must ask if the private entity remains accountable to the public (a) is the public still in control even though title is shifted to a private party? (b) Could accomplish this by putting covenants on the land or enacting a regulatory ordinance (3) the property must fit the act of taking (a) e.g. the Hathcock lawyers should have argued that the land was needed as a buffer for the airport
E)
THERE MUST BE EQUAL PROTECTION/APPLICATION OF CONDEMNATION i) But could remove one piece of property but leave (for example) an Italian American club if the IAC would be harmonious with the plan

F) CONSEQUENTIAL DAMAGES
i) if the government takes part of the property, may get damages for the diminution in value of the remainder of the property ii) often the damages are equal to the value of the remaining property and so the government will just take the whole piece of land iii) allowed only when there is a harm to the property value
G)
INVERSE CONDEMNATION i) A private party is suing the government to make the government sue the private party ii) The case sounds in private property rights over public power iii) The claim is that the government has, in effect, condemned the land by its physical action (1) Makes the government do avowedly what they are already doing silently (2) A recognition that the governments physical action is taking a prescriptive easement (3) A question of whether you can have a prescriptive easement if there is no physical trespass (a) An easement of noise (b) An easement of dust (c) An easement of pollution (d) An easement of vibration
7) REGULATORY TAKINGS
A)
MUST SHOW ONLY 4 OF THE 5 GOVERNMENTAL POWER REQUIREMENTS (NOT #5, PAYMENT OF COMPENSATION) A QUESTION OF SUBSTANTIVE DUE PROCESS i) There must be authority to pass the regulation (1) Ultra vires (2) Delegated from the state to the local government ii) The regulation must be for a proper public purpose
(1) Cannot be for a poisoned purpose (2) Concern about property values is not a poisoned purpose (except in Maine) iii) There must be a reasonable, rational relationship between the act and achieving the stated purpose (1) Cannot be arbitrary (2) When dealing with administrative procedures: (a) In informal proceedings (i) the test is if the government was arbitrary and capricious (ii) the burden of proof is on the individual (b) in formal proceedings: (i) the test is if there is substantial evidence (ii) the burden of proof is on the government defer less to the agencys judgment iv) The burden on the private interest cannot be excessive (1) A question of what constitutes an excessive burden (2) If the individual has been burdened beyond what is justified in the circumstance (3) Nobody in the common law has the right to impose on the private sector harms greater than are suffered by the public sector (4) Government operations must be proportionate (5) Look at the diminution of the value of the property (a) First look at whether there is a reasonable remaining use (i) Look at the whole parcel, not just the part that was regulated 1. A question of what the physical baseline should be conceptual severance 2. If the parameter of judicial inspection is the portion of the regulated property, then it will always be unconstitutional since it will always destroy 100% of the value
3. So must look at the parcel as a whole Tahoe (ii) The wipeout has to be such that you are left with nothing but a token of the property value 1. Look at if most of the property was rendered practically impossible to use this does not necessarily make it unconstitutional 2. Look at whether the land retains more than token value 3. If the government prevents all economic use, it is an unconstitutional taking (b) If there is a reasonable remaining use, then use the Penn Central Triad (i) Look at the diminution of property value not how much is taken away, but how much is left (ii) Look at the investment-backed expectations 1. A question of what the temporal baseline should be 2. How much $ was made before the regulation? 3. How much $ was expected to be made? 4. Whether the property owner knew of the regulation at the time of purchase time-of-purchase estoppel 5. Also takes into account subsequent investments made without notice 6. If there is constructive notice then would not care so much about subsequent investments (iii)Look at the purposes for what the government regulation was passed
8) EXACTION
A)
OCCURS IN SITUATIONS WHERE THE GOVERNMENT COULD CONSTITUTIONALLY HAVE DENIED THE ENTIRE
PERMIT APPLICATION OUTRIGHT WHERE THE GOVERNMENT CONDITIONS DEVELOPMENT PERMITS ON THE LANDOWNER PROPERTY TO THE GOVERNMENT
B)
PROVIDING FREE
C) D)
NOT A QUESTION OF REGULATORY TAKINGS OR WHETHER THE REGULATION GOES TOO FAR USUALLY ACCOMPANIES A
PUD
i) most PUDs have an adjudicative element
ii) most exactions are harder to get if they are not spelled out in the legislative action and are only adjudicative
E)
MUST ASK: i) Is this extortion? ii) Is this a reasonable condition?
F)
THE CONDITION MUST BE RATIONALLY LINKED TO THE ACTIVITY ALLOWED i) There must be a rational nexus Nolan (1) If there is no causal nexus, there is a constitutional theory that you cannot be punished (2) Before a government can reasonably act, there must be some fault linkage (3) A question of substantive due process ii) The required dedication must be related in both nature and extent to the impact of the proposed development Dolan iii) There must be proportionality Dolan (1) E.g. if a building would increase the traffic by X number of people, the bike path easement must reduce the traffic by roughly X number of people
G)
THE DIVISIBILITY ISSUE i) If part of a governmental action is stuck down, the remaining portion becomes the law (1) If the statute said: no, unless the default would be that the action was prevented the best way to draft the statute (2) If the statute said yes, if the default would be that the action was allowed ii) The presumption in law is that if the action is struck down, the ___ is presumed by the intent of the government agency that made the decision must go back and determine what the agency would have done
9) ZONING
A) ZONES ARE LEGAL CLASSIFICATIONS TELLING YOU WHAT YOU CAN AUTOMATICALLY LEGALLY DO OR ARE PROHIBITED FROM DOING
i) Do not need clearance from the zonoing board to build as long as you are buildign per the zone ii) First enacted in NYC as height restrictions

B) C)
PREVENTS ATTACKS BASED ON ARBITRARINESS
ARE RATIONAL AS LONG AS THEY ARE BASED ON A PLAN AUTHORITY TO CREATE ZONES
i) A statutes delegates the power to an agency (1) an organic act (2) The agency is the city or town ii) The towns have the power to: (1) Set up a planning board (a) Zoning ordinance would be passed based on the guidance of the plan (b) The plan alone binds no-one (c) The plan prevents the argument that the zone is not rational (2) Power to zone (a) Power to adjudicate (b) The power is delegated to a zoning board (c) The zoning is binding (3) Power to create a building code (a) Building code is enforced by a certificate of occupancy (b) Violation of the building code is not usually held to be a violation of the warranty of fitness
D)
EUCLIDIAN ZONING
ZONES BASED ON CATEGORES OF USE
i) Y if what you want to do is automatically allowed ii) N if what you want to do is automatically forbidden iii) SP if you can get a special permit

E)
ZONING IS CUMULATIVE i) R1 < R-2 through 4 < C-1 < C-2 ii) But cannot put residences in an industrial zone
F)
FLEXIBILITY MECHANISMS i) A special exception subject to a permit (1) The zoning board has the power to grant this (2) Requires the community to have a say at a town meeting ii) Variance (1) Supposed to prove an unconstitutional taking if the individual harm is too great (2) Supposed to be much harder to get than a special exception (3) But the community has no say since it is a matter of constitutional rights, so in reality it is easier to get than a special exception iii) Re-legislation (1) Amend the zone (2) The State Attorney General might have to sign off on any amendment (like in the Needham case) (3) There are problems with unconstitutional spot-zoning where a zone is amended to have one place different than those around it (a) Cannot be an arbitrary amendment that is not guided by a rational explanation (b) Cannot be a poisoned purpose (c) Best way is to put it into the plan with the advice of the planning board there could be a floating zone iv) Executive fudging (1) Discretion in interpreting and applying the regulations v) PENCU Pre-Existing Non-Conforming Use
(1) (2) (3) (4) (5) (6)
so long as the government does not alternatively provide, PENCUs may remain Tend to be windfalls/monopolies that expand rather than die off Listed on the map If no PENCU is allowed then sue for regulatory taking Once you reach the limit of a PENCU, ask for a PUD The zoning regulation might provide for amortization (a) upon notice and a vote of the city council, a PENCU will have X years to close (b) Lets the PENCU fall apart (c) Not a magic number of years must balance the loss to the individual with the number of years of amortization
vi) PUD Planed Unit Development (1) A zone that exists in the ordinance (on the plan) but has not been brought to ground (2) Aka floating zone (3) A mixed use development (4) A use on review (5) Not based on a map (6) It is not as of right (7) Usually granted in exchange for an exaction (8) Not Euclidian
G)
DISCRIMINATION
THE FAIR HOUSING ACT
i) Federal and state statutes cant discriminate based on a handicap ii) must make reasonable accommodations to allow the handicapped to make use of their property
iii) would be able to ask for a variance if zoning discriminated based on handicap iv) the question is what class of people fit under the fair housing act (1) race, creed, color, national origin, handicap (2) the terms of the statute are determined by: (a) the courts interpretation (b) the agency (i) by adjudicating when the agency applies the law to a set of facts (ii) by legislating by passing a regulation v) Cant prevent a class of people from living in a town Mt. Laurel (1) Discriminating against the poor is not a suspect class (2) But cant act in a way that would burden or injure the health, safety or welfare of the rest of the state (3) It is irrational not to make it realistically possible not to have low income housing somewhere in your community for developing communities (4) Local zoning has an element defined by state-wide rationality (5) The Tibou Hypothesis it is inefficient to have every community have low income housing since the low income jobs tend to be near urban centers vi) the question of safety is a separate issue
H)
GROWTH CONTROLS i) Population density is highest around coast ii) Growth follows the car (1) Interstate highways (2) Trucking commerce iii) Mt. Laurel
(1) A case that was litigated like the 5 federal tests but was in state court (2) Now must take into account state-wide harms and necessities iv) Question is what towns can do within their own borders (1) Cannot have a fixed cap on the number of people Boca Raton (a) No rational relationship between the municipal purposes being served and the population limit (b) Plan would (likely) not have any connection to the growth control (i) If there were studies to show that the city had been totally built out and the utilities were at their limit, this would help (2) Can have a phased process that limits the number of people over time Ramapo (a) Not an absolute freeze (i) Had to get a special permit (ii) Based on a point system that was based on traffic, sewer, etc (b) Not a permanent ban (i) Built into a phased process over time that allows for rolling planning (ii) Studies were built into the plan (iii)Allowed the time for the city to build the sufficient infrastructure (3) Can have a limit based on the limitations of the infrastructure Livermore (a) A growth cap until schools, sewers, water supply, etc was upgraded (b) Was passed by voter referendum (had to be tried to determine if it was rationally related) v) The more democratic a growth control is, the less you know why it was enacted (1) Cant be scrutinized so cant show a rational basis dead per se (2) Agencies must set out some reason that relates to the purposes the legislature delegated to them
(3) Cannot hold democratic decisions not the same degree of scrutiny for due process that can hold an agency vi) Growth controls are a regional issue, not a local issue
10)
A) B) C)
HOMELESSNESS
THE DEFINITION OF THE POVERTY LINE HAS BECOME LESS INCLUSIVE APPEARS THAT THERE ARE FEWER PEOPLE BELOW THE POVERTY LINE IF LOW INCOME HOUSING WERE AVAILABLE, HOW MANY OF THE HOMELSS COULD COME OFF THE STREETS?
11)
A) B) C) D)
CONFLICTS BETWEEN LAWS

MUST FIRST DETERMINE IF THERE IS REALLY A CONFLICT
CAN THE LAWS COEXIST?
BETWEEN PRIVATE AND PUBLIC LAW, THE PUBLIC LAW GOVERNS

BETWEEN COMMON LAW AND STATUTORY LAW, STATUTORY LAW GOVERNS BETWEEN A REGULATION AND COMMON LAW, REGULATION GOVERNS
i) but still need to look at how the agency arrived at the regulation
E) F) AS BETWEEN STATE AND LOCAL REGULATION, STATE TRUMPS AS BETWEEN FEDERAL AND STATE/LOCAL
BETWEEN A CONSTITUTION AND A PUBLIC TRUST
i) must determine if there was authority, proper public purpose, etc for the federal law ii) the assumption is that federal government does not intend to preempt unless it is explicitly stated iii) generally, the public trust doctrine binds the federal government

Plater Property Outline - BC Law

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Plater Property Outline - BC Law

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Ian Cohen Property Outline

Ian Cohen Property Outline

Ian Cohen Property Outline

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Ian Cohen Property Outline

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Ian Cohen Property Outline

THE GENERAL RULE

MORTGAGES i) A secured transaction

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(10) (11) (12) (13)

frontage health regulations signage easements, covenants, etc

4) LAND USE RESTRICTIONS

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(2) (3) (4) (5)

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5) NON-CONSENSUAL LAND USE

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IF THE CONDEMNED PROPERTY IS TO BE TRANSFERRED TO A 3

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i) most PUDs have an adjudicative element

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MUST ASK: i) Is this extortion? ii) Is this a reasonable condition?

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ZONES BASED ON CATEGORES OF USE

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(1) (2) (3) (4) (5) (6)

THE FAIR HOUSING ACT

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CONFLICTS BETWEEN LAWS

CAN THE LAWS COEXIST?

BETWEEN PRIVATE AND PUBLIC LAW, THE PUBLIC LAW GOVERNS

BETWEEN A CONSTITUTION AND A PUBLIC TRUST

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