Comprehensive PMBR Property LEB

8/3/2019 Comprehensive PMBR Property LEB

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I. Freehold estates – give possession to land under somelegal title

i. Fee simple absolute – Potentially infinite duration – maximum estate person can own.

i. Most extensive estate a person can own; largest estate known to

lawii. Largest estate known, potentially of infinite durationiii. Common law: To convey, words at common law had to be “To B

(the grantee) and his heirs”1. The words “and his heirs” used in a deed were construed as

words of limitation.a. They described the quantum / size of the estate that

was transferred to the grantee.

iv. At Modern law, we designate the owner to the grantee Xconveys land to B.

v. Words of purchase indicate the grantee or the person that takes the

property.vi. Conveyance to B would create a fee simple absolute today withoutnecessarily including “and his heirs” or “and her heirs.”

j. Fee simple defeasiblei. Fee simple determinable

1. Fee simple estate created to continue until the happening or non-happening of a certain event

2. Possibility of reverter a. When that event occurs, the estate terminates

automatically; automatic reversion to the grantor upon the happening or non-happening of that stated

event.3. Ex: X, owner in fee, conveys Blackacre to A, so long as the property is used as a school.

a. If the property is no longer used as a school, titleautomatically reverts to the grantor upon thehappening or non-happening of that stated event.

4. Words for fee simple determinable:a. “so long as” b. “during”c. “until”d. “while”

5. Fee simple determinable has a possibility of reverter sincethe grantee’s estate may end on the happening or non-happening of an event

6. Possibility of reverter : Possibility that event occurs; but if that event does occur (i.e., when the property is no longer used as a school, for residential purposes, or where liquor issold on property), there is an automatic reversion to the

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grantor on the happening or non-happening of a statedevent.

7. Automatic reversionii. Fee simple subject to condition subsequent

1. Fee simple estate that may be terminated on the happening

or nonhappening of a stated event or contingency.2. Ex: X, owner in fee, conveys Blackacre to A and his heirs, but if the land is not used as a farm, X may reenter the land.

3. Right of re-entry for broken condition4. When the event occurs (if land no longer used as a school,

if liquor is sold on the premises), the grantor or his heirshave the right / option of re-entering and reacquiringownership to the property or possession to the property.

5. Compare: Fee simple determinable – automatic reversion back to the grantor on the happening of a stated event; rightof re-entry – reversion is not automatic.

6. Words: (words of condition)a. “On condition that” b. “Subject to the condition that”c. “But if”

iii. Fee simple subject to executory interest1. Fee simple estate whereupon the happening or

nonhappening of a stated event, ownership passes from onegrantee to another grantee.

2. Shifting executory interest :a. Ownership passes from one grantee to another (i.e.,

from A to B). b. Ex: X, owner in fee, conveys Blackacre to A and his

heirs, as long as the land is used as a farm, and if the land is not used as a farm, then to B and hisheirs.

c. Ex: X, owner of Blackacre in fee simple, conveysBlackacre to A and his heirs, but if A dies withoutissue living at his death, then to B and his heirs.

i. Title passes from A to B if A dies withoutany issue living at his death.

3. Springing executory interesta. Ownership passes from the grantee back to the

grantor; then, after some time, ownership passesfrom the grantor to another grantee.

k. Fee tail (rarely tested on the exam)i. At common law, a fee tail was usually created by the words:

1. “To B (or the grantee) and the heirs of his body”ii. Inheritance was restricted to the lineal descendants of the grantee.

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iii. It was permissible for the grantor of a fee tail to restrict theinheritance to a particular group of lineal descendants of thegrantee by proper words of limitation. **

1. Ex: A grant to a male and the male heirs of his bodya. This created a fee tail male.

2. Ex: A grant to a female and the female heirs of her body.a. This created a fee tail female.iv. Lineal heirs for purposes of a fee tail are sons, daughters,

grandchildren, and great-grandchildren.v. Collateral heirs include cousins, nieces, nephews, uncles, and

aunts.l. Life estate

i. Freehold estate where the duration is measured by the life or livesof one or more human beings.

ii. Ex: X conveys Blackacre to A for life.1. A has a life estate.

iii. A life estate pour autre vie is a freehold estate where the durationis measured by someone else other than the grantee.iv. Ex: X conveys Blackacre to A for the life of B.

1. Example of life estate pour autre vie where duration of estate is measured by someone other than grantee.

v. Dower 1. Widow is entitled, on the death of her husband, to a life

estate of 1/3 of the lands her husband was seised in feesimple during the marriage.

vi. Curtesy1. Tenancy by curtesy is a life estate to which the husband

was entitled to all of his wife’s lands.2. Requirements:

a. Husband had to be married to wife b. Wife must be seised in the land in fee simple or fee

tail during the marriage.c. Wife must have issue born by the husband.d. Wife must predecease the husband.

II. Future interestsm. Reversions

i. Estate remaining in the grantor who has conveyed a lesser estatethan that owned by the grantor.

ii. Ex: X, owner in fee, conveys Blackacre to B for life.1. Here, a reversion back to the grantor

iii. A reversion arises as a matter of simple subtraction.1. If A has 5 apples and gives 3 away, he has 2 apples left.2. 2 apples left, like a reversion in real property.3. Here, X owns a fee simple estate.4. He (X) conveys only a life estate, so hence the interest left

in the grantor is a reversion.

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iv. Created where the grantor creates an expirable or a lesser estatecompared to what he owns.

1. If the grantor is the owner of a fee simple estate andconveys a life estate, at the expiration of the life estate, youhave a reversion back to the grantor.

2. Fee tail, life estate, contingent remainder that does not vest.n. Possibility of reverter (fee simple determinable)i. Interest retained by the grantor of a determinable estate for a fee

simple determinableii. Possibility of reverter, once the stated event occurs, the estate

ripens into an automatic reversion – a possessory estate – automatic reversion back to the grantor.

1. Possibility b/c if the event does not occur, obviously noreversion back to the grantor.

iii. X, owner in fee, conveys land to A, as long as the land is farmed.1. X has possibility of reverter.

2. If the land is not farmed, ownership reverts back to thegrantor on the happening of that stated event.iv. Created where a grantor creates a fee simple determinable

o. Rights of re-entry for condition brokeni. Also called power of termination

ii. Created in the grantor subject to a condition subsequent.iii. Right of re-entry means that there isn’t an automatic reversion of

the grantor upon the happening or non-happening of that statedevent.

iv. Rather, the grantor or his heirs have the option of re-entry **v. Created when the grantor creates a fee simple on condition

subsequent. p. Remainders – Future interest created in a third person which is intended to

take effect after the natural termination of the preceding estate.i. Every remainder must be preceded by either a fee tail or a life

estate.ii. Contingent (not vested)

1. Any remainder which is created in favor of an ascertained person, but is subject to a condition precedent, or is createdin favor of an unborn or unascertained person.

2. Ex: To B for life, remainder to C and his heirs, if C marries before B’s death.

a. C has a remainder contingent upon his marriage before B dies.

3. Ex: A to B for life, remainder to C for life, if C survives X.a. C has a contingent remainder upon X’s

predeceasing both B and C because the contingencyof C’s surviving X must happen on or before thetermination of B’s life estate.

iii. Vested

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1. Remainder created in an ascertained and existing personthat is not subject to any condition precedent except thenormal termination of the preceding estate.

2. Ex: A owner in fee conveys Blackacre to B for life withremainder to C and his heirs.

a. C has a vested remainder.3. Ex: A conveys or devises to B for life, then to C and her heirs.

a. C has a vested remainder.i. We know it will take effect after the

termination of B’s life estate.ii. C is an ascertained and existing person, not

subject to any condition precedent.4. Ex: A conveys to B and the heirs of her body and then to C

and her heirs.a. C has a vested remainder.

5. Ex: A conveys to B for life and then to C for lifea. C has a vested remainder.i. It must take effect before the termination of

the preceding life estate – namely, B’s.6. Types:

a. Remainders absolutely vestedi. Limited to ascertained or identifiable person

without words of condition and not subjectto divestment.

ii. Ex: A conveys Blackacre to B for life andthen to C and her heirs.

1. C has a remainder absolutely vested. b. Remainders vested subject to partial divestment

(also called remainder vested subject to open)i. A remainder is subject to being partially

divested when the remainderman is inexistence and ascertained, but the amount of her estate is subject to being diminished infavor of other members of a class. **

ii. Ex: Common kind of class gift.1. A devises land to B for life, then to

the children of B in fee.2. At the time of B’s death, B has one

child, C.3. C’s remainder is vested because she

is in existence, ascertained, and sheor her heirs are certain to acquire a possessory interest on the expirationof B’s life estate.

4. Common law standards:

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a. The seisin can pass to her immediately on B’s death.

b. But, C’s interest is subject toopen because of after bornchildren of B because they

can come within terms of thegift.c. Remainders vested subject to complete divestment

i. A remainder is vested subject to completedivestment when the remainderman is incomplete existence and ascertained and her interest is not subject to a condition precedent, but her right to possession or enjoyment of her interest on the expirationof that prior interest is subject to atermination by reason of an executory

interest, power of appointment, or right of re-entry.ii. Ex: A conveys to B for life, then to C and

her heirs, but if C dies, leaving no survivingchildren, then to D and his heirs.

1. Here, C has a remainder vestedsubject to complete divestment onthe death of C without any survivingchildren.

2. D’s interest is not a remainder, butan executory interest.

3. If C dies without any children, thenownership transfers to D.

iv. Creation of remainder 1. Remainder must be in favor of a transferee (usually a

grantee) who is one other than the conveyor.2. The remainder must be created at the same time and in the

same interest as the prior particular estate which supports itor precedes it.

3. Preceding estate must be of lesser duration than the interestof the conveyor or the grantor, so that there may be aninterest to pass on to the remaindermen.

a. Ex: X is the owner of Blackacre in fee and heconveys Blackacre to Y, for life, a lesser estate thanthe fee, and then at the expiration of Y’s life estate,title then passes to Z. Z has a vested remainder which takes effect after the natural expiration of the preceding life estate.

v. Preceding estate had to be either a fee tail or a life estate.vi. Today:

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1. Modern law: Preceding estate may be a fee tail, life estate,or a estate for years.

a. Preceding estate cannot be a fee simple estate.vii. Today: (multistate)

1. All remainders are considered transferable and alienable

(common law, they weren’t).viii. Contingent remainder is not subject to claims of creditors.(multistate)

ix. A vested remainder is subject to the claims of creditors.(multistate)

x. A remainder cannot take effect cutting short the prior estate, butafter the natural termination.

xi. Contingent remainders come within the rule against perpetuities;however, it does not apply with vested remainders.

xii. Vested remainderman has a claim against prior estate holder (thelife tenant) for waste; contingent remainder has no such right.

(multistate)xiii. Where we have a vested remainderman, the remainderman has aright to compel the prior estate owner to pay taxes and interest onencumbrances. (multistate)

q. Executory interest – Cuts short a prior estate.i. Shifting

1. Cuts short or terminates a preceding estate in favor of thegrantee.

2. Ex: A conveys to B for life, but if B becomes bankrupt,then to C and his heirs.

a. B has a life estate, subject to an executory shiftinginterest in C, with a reversion in A.

b. C’s interest is not a remainder because it does notawait the natural expiration of B’s life estate.

3. Ex: A, owner in fee, conveys Blackacre to B and his heirs, but if B marries C, then to C and his heirs.

a. Here, C has a shifting executory interest, that if Bmarries C, then B’s preceding estate is cut short andrights of possession or ownership goes from onegrantee to another, namely C.

b. Ownership passes from A the grantor to B, and thenhappening on the stated event, to C.

4. From transferee to transferee upon happening of conditioned event

ii. Springing1. Ex: A, owner in fee, conveys Blackacre to B and his heirs,

but if B marries C, 1 year later, to C and his heirs.2. Ownership passes from the grantor, A, to B, the grantee,

then there is a lapse of time – 1 year later, so if B marriesC, then rights to possession of the property would revert to

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A, the grantor or his heirs, and then after 1 year,ownership / right of possession would then pass on to C,the second grantee.

3. Grantor to grantee upon happening of conditioned event.4. Always involves lapse of time (even 1 day) between

happening of event and the other transferee getting theinterest.iii. An executory interest is a future contingent interest created in

favor of a transferee in the form of a springing or shifting usewhich, upon the happening of the contingency described, will beexecuted into a legal estate and which cannot be construed as aremainder.

iv. Elements:1. Always in favor of the transferee, who is someone other

than the transferor or grantor.a. An executory interest therefore should never be

confused with a reversion, possibility of reverter, or right of reentry for condition broken.i. Right of possession reverts back to grantor

for a remainder.2. It is always contingent and can never become vested

because when it vests, either as a future or present interest,it ceases to become an executory interest.

3. An executory interest cuts short a prior estate on thehappening or nonhappening of a certain event.

a. Compare: remainder follows the natural terminationof the preceding estate

PMBR CD #2

III. Contingent remaindera. Cannot follow a fee simple interest of any kind b. Any interest which follows a fee and is held by a third person must be an

executory interest. **i. Ex: If A conveys property to B and his heirs, but if B sells liquor

on the premises, then to C and his heirs.1. C has a shifting executory interest.2. C’s interest cannot be a contingent remainder b/c a

remainder cannot follow a fee simple estate and it cannotcut short a preceding estate.

IV. Executory devises and interestsc. Executory devises are identical with springing and shifting interests, but

executory devises are created by will.i. Springing and shifting uses or interests are created by deed or

grant inter vivos.

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V. Rule in Shelley’s case (abolished in most jurisdictions)d. Common law:

i. If in a conveyance or a will, a freehold estate (usually a life estate)is given to a person and in the same conveyance or will, aremainder is limited to the heirs of that person (of the grantee),

then the grantee takes both the freehold estate and the remainder.ii. In essence, the grantee ends up with a remainder in fee and theremainder to his or her heirs is cut off.

iii. Ex: Where X, owner in fee, conveys Blackacre to B for life, withremainder to B’s heirs.

1. In a jurisdiction that has adopted the rule in Shelley’s case,the remainder to B’s heirs is cut off, they don’t getanything and B ends up with fee simple estate.

2. B takes both his freehold estate and the remainder.3. There is a merger of the life estate with the remainder and

B ends up with a fee simple estate and the remainder to his

heirs is cut off.VI. Doctrine of Worthier Title (Rule against remainders ingrantor’s heirs)

e. Almost exactly the same as the Rule in Shelley’s casef. Applies to situations where the grantor, X, owner in fee, conveys

Blackacre to B for life with remainder to X’s heirs.i. The remainder is in the grantor’s heirs.

ii. Compare: Rule in Shelley’s case: remainder is in the grantee’sheirs.

iii. Jurisdiction that follows this doctrine:1. The remainder to X’s heirs at the expiration of B’s life

estate, is cut off – abrogated and you then have a reversionin fee back to the grantor (X) or his heirs.g. In its application to wills, the rule in its testamentary aspect requires that

the heir take by descent rather than by purchase or devise.i. Doctrine gets its name b/c the heir takes by descent rather than

devise.ii. It was said that title by descent was worthier or better than title

derived by purchase or devise.iii. Reason for this:

1. A descent of land barred the right of entry of the persondeseised.

2. If the title were acquired by purchase, the deseisee’s rightof entry was not barred.

VII. Rule Against Perpetuitiesh. No interest is valid unless it vests if at all not later than 21 years after

some life in being at the time of its creation of the interest.i. Only contingent interests, executory interests, and options to purchase

land in the future are covered by this rule.

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i. Any contingent interest which does not meet the rule are void abinitio.

j. “Must vest”i. Any contingent interest must vest within 21-years, or fail within

the 21-years.

ii. If the contingent interest is absolutely certain to vest or fail entirelywithin the period of the rule, then it is valid.k. “Not later than 21-years of some life in being”

i. Includes lives in being provided that they are not so numerous as to prevent practical determination of when the last life in being dies plus 21-years and gestation period.

l. “At the creation of the interest”i. Period of the rule begins when the interest is created.

1. In a will, it’s when the testator dies.2. In a deed, it’s when the deed is executed.

m. The rule is directed against remoteness in vesting.

i. Sole test: Must the interest vest or fail within the 21-year period permitted by the rule.1. If it may vest, it is void.2. If it must vest, it is not void – it’s valid.

n. Interests subject to the rule:i. Contingent remainders

ii. Executory interestsiii. Options to purchase land that are not incident to a lease, but rather

contained in a deed instrument.1. Options to purchase land that is in a lease, not subject to the

Rule.2. Most frequently tested on the bar (multistate)

a. Ex: Farpo owned Rosemead, a tract of land, andconveyed the property to Reak. The deed containsthe following provision:

i. Right of first refusal whereby anytime before the year 2222 the grantee has amodified offer for purchase of said premiseswhich she is to accept, then the grantee is tofurnish a right of first refusal to the grantor or the heirs.

ii. Right of first refusal violated the rule against perpetuities because the grantor has thisright or her heirs, had until 2222 in which toexercise this option to purchase land or rightof first refusal. The fact that the right of first refusal was given to the grantor or her heirs – we don’t know who the heirs are – until the grantor dies. As such, the option to

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purchase the land in the future might violatethe rule b/c it might vest too remotely.

iii. The grantor conveyed property to thegrantee and in the deed, it gave the grantor the right of first refusal that if the grantee

received an offer for sale of property, thegrantee had to submit the offer to the grantor and the grantor had right of first refusal to purchase the same property.

1. Grantor’s right of first refusal heredid not violate the Rule b/c thegrantor was the measuring life b/cwe’ll know within the grantor’slifetime whether the land will be purchased by another.

iv. Right of first refusal held by grantor or heirs

until sometime in the future – will violaterule; but where right of first refusal is held by grantor and you know within thegrantor’s lifetime whether the right will beexercised, no violation of the rule.(multistate)

iv. Powers of appointmentVIII. Class gifts (Remainders subject to open)

o. If a remainder interest is given to a class of persons, it is deemed vestedonly when the class is closed and all conditions precedent for everymember of the class, have been satisfied.

p. The entire class gift is void if the interest of one member of the classmight violate the rule.q. The class closing rule – class is closed when no one born after the date can

share the gift.i. Class can show physiologically, or

1. Class closes physiologically when the parent of the classdies.

2. Ex: A gift to A’s children would close physiologically atA’s death.

ii. Under the rule of convenience1. A class can close earlier so as not to violate the Rule

Against Perpetuities.2. Whenever any member of the class has the right to demand

possession of his or her share, the class can close.3. Gifts which would normally violate the Rule can be saved.

IX. Powers of appointmentr. General power of appointment is considered the equivalent of ownership

of property.

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s. If one has a power of appointment over property, he or she can exercisesuch power and alienate or transfer property.

t. If one can alienate property, the Rule is not offended.u. In order for Rule not to be violated, the power to exercise the power of

appointment must be within the time period allowed by the Rule.

X. Restraints in Alienationv. Restraints on alienation – provisions in deeds, wills, mortgages – thatrestrict the grantee’s power to convey property to others.

w. Whether a particular restraint is valid depends on many considerations:i. Kind of estate

1. Where you have a fee simple interest, any direct interest ona fee simple is invalid.

2. But, where you have lesser restraints, restraints onalienation of non-freehold estates (tenancy – periodictenancy or a tenancy at will) are commonly upheld.

a. Ex: Nonassignment clause in a lease is a common

example of restraint on alienation of a nonfreeholdestate that is upheld as valid.ii. Kind of restraint

1. Disabling restraint2. Forfeiture restraint3. Promissory restraint

iii. Extent of estate1. Restraint may only limit grantee with respect to time.2. Restraint may also restrain a person.

a. Restraint on a person is invalid. b. Ex: Grantee is prohibited from alienating property

to certain racial or religious or social groups – violation of 14th amendment Equal Protectionclause.

iv. Preemptive rights (right of first refusal)1. Partial restraint on alienation - -held as valid.

XI. Concurrent estates – Ownership or possession by two ormore persons at the same time

x. Ownership or possession by two or more persons at the same time.y. 3 types of concurrent estates:

i. Joint tenancy1. A form of co-ownership where each tenant owns an

undivided interest in the whole estate.2. Distinguishing aspect: right of survivorship – upon the

death of one tenant, the title passes to the surviving jointtenant.

3. Creation – 4 unities requires at common law:a. Unity of time (interest must vest at the same time) b. Unity of title (interest acquired by the same

instrument)

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c. Unity of interest (interest of the same type andduration)

d. Unity of possession (each of the joint tenants aregiven identical rights of a joint tenant)

4. Always created by a deed or will, never by descent

(intestacy).5. ** Under modern law, joint tenancies are disfavored.a. There must be a clear expression of intent to create

a joint tenancy, otherwise it will not be exercised.6. A is the owner of Blackacre, conveys it to B and C and to

their heirs.a. Typical words for creating joint tenancy at common

law, but not today. b. Today, in order to create a joint tenancy, A would

have to state in his conveyance that he conveysBlackacre to B and C and their heirs as joint

tenants.i. If the words joint tenants are not used, atenancy in common is created – modern law.

7. Where one of the joint tenants conveys his interest inter

vivos, the joint tenancy is severed and a tenancy in commonresults.

8. A joint tenancy is destroyed by a suit by partition whichcan be brought by any of the joint tenants. (on themultistate)

9. Joint tenancy may be severed by a mortgage in a titletheory jurisdiction or a contract to convey.

ii. Tenancy by the entirety – seized of the entirety

1. Co-ownership by husband & wife.2. Common law: regarded as one legal entity.3. Similar to joint tenancy4. Right of survivorship

a. Where you have husband predeceasing the wife,then title to the property – ownership passes – to thesurvivor.

5. 5 unities – husband and wife:

a. Time, title, interests, possession, person6. In most states, neither spouse could dispose of any interest

held by tenancy by the entireties.a. In order to dispose of the property, both spouses

needed to participate in the conveyance.7. Death destroys tenancy by the entirety8. Divorce destroys tenancy by the entirety

a. Divorced persons become tenancy in common.9. Execution by a joint creditor of both husband and wife

would constitute a severance.

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a. Creditor of one spouse cannot levy on the stateowned by the entirety.

10. Partition – neither spouse is entitled to have a partition atcommon law (but you can with joint tenancy).

iii. Tenancy in common (each holds undivided ½ interest)

1. A concurrent estate in which cotenants each own anundivided, separate and distinct share of the property.2. A tenant in common does not own the whole property as in

a joint tenancy. **3. Each tenant can dispose of his part or fraction thereof by

deed or will.4. The only unity is the unity of possession inasmuch as each

tenant is entitled to the whole of each estate.5. No right of survivorship; upon death of tenant in common

by intestacy, no right of survivorship – heirs don’t take.6. Compare: Joint tenancy, right of survivorship does attach.

7. Tenancy in common may be destroyed by partition, merger (merger when the entire title vests in one person, either by purchase or otherwise ).

8. Conveyance – this interest is freely alienable. Eachcotenant can freely convey or transfer his or her interest byconveyance inter vivos or testamentary disposition.

a. There is no destruction of tenancy in common byconveyance.

9. Ouster when one cotenant ousts from possession her cotenant (i.e., wrongful exclusion from possession), theousted tenant has a cause of action against the possessor not

to put her out and to regain possession of the property.10. There is no fiduciary relationship between or amongtenants in common.

z. Rights and duties of tenants by the entireties, joint tenants, tenants andcommon:

i. Possession In all forms of concurrent ownership, each tenanthas the right to possess and enjoy the whole of the property.

ii. Rents and profits

1. Majority of estates tenant in possession has the right toretain profits gained by the use of the property.

2. Tenant in possession need not share profits with a cotenant

out of possession, unless there has been an ouster.a. If there is ouster, the ousted tenant may hold the

tenant in possession for the profits collected duringthe time ousted.

iii. Taxes1. Where one tenant pays the entire taxes, that tenant may

compel contribution by the other tenants.iv. Repairs and improvements

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1. A tenant has no right of contribution against other tenantswith regard to repairs and improvements that one has madeon the property.

2. But if a partition has been had (in equity court – action or suit for partition), then the court may make an equitable

division of the proceeds and the court will take into accountexpenditures made by one tenant by way of an accounting.

XII. Mortgagesaa. Minority of states – title theory:

i. A mortgage is regarded as a transfer of title and destroys or seversthe joint tenancy.

bb. Majority of states – lien theory:i. A mortgage is regarded as a lien and one joint tenant’s execution

of mortgage does not result in a severance.XIII. Leases

cc. Majority: A lease does not effectuate a severance of the joint tenancyXIV. Contracts to conveydd. In most states, a contract to convey results in the severance of the joint

tenancy despite the fact no conveyance actually occurs (contracts toconvey – in equity; equitable interest in the property).

XV. Landlord-tenant lawee. Leasehold involves a conveyance of an estate (conveying right to possess

property to another person for a limited period of time) and alsoconstitutes a contract. (essay)

i. B/c it involves a conveyance in land, it comes within the Statute of Frauds and must be in writing to be enforceable.

ff. Lease must be in writing and must contain the following elements tosatisfy the Statute of Frauds:i. Must identify the lessor and lessee

ii. Describe the leased landiii. State the term of the leaseiv. Set forth the amount of the rent that needs to be paid

gg. Contract aspecti. Modern leases contain many covenants – impose contractual

obligations on the part of the landlord and tenantii. Most courts treat leases as contracts rather than conveyances

(even though a lease involves both elements).hh. Tenant’s duties

i. Duty to pay rent1. Rent is viewed as the consideration paid by a tenant to her

landlord for the use and enjoyment of the land.2. When rent accrues – at common law, rent is not

apportionable as to time – it does not accrue from day today, as does interest on money loans. If a lease providesfor payment of an annual rent on the last day of the

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calendar year and the lessor accepts a surrender of theleasehold at any time of the year, she can collect no rent for any portion of such year.

a. Ex: If lease provides for annual rent on last day of calendar year & lessor accepts surrender of

leasehold for that portion of the year, the lessor maynot accept rent since rent does not accrue from dayto day.

ii. Destruction of premises1. At common law, tenant remains liable to pay rent even

though because of fire, storms, etc., or other natural events,this does not relieve the tenant of obligation to pay rent. **

iii. Rent is extinguished or suspended by:1. Release by the landlord2. Merger

a. Where the tenant acquires title to the property

(purchases the property), then the tenant’s leaseholdinterest merges with the fee, relieving tenant’sobligation to pay the rent.

3. Expiration of the lease4. Eminent domain – takes both the leasehold and the

reversiona. Rent is extinguished by eminent domain. Entire

taking of leasehold or partial?i. Where entire leasehold is taken by eminent

domain (all of the leasehold condemned for full balance of the lease term), the tenant’sduty to pay rent is extinguished.

ii. Where there is a partial or temporary taking – if it’s for a short period of time or for a period less than the remaining term or if only a portion of the rented property iscondemned, the tenant is not discharged

from her obligation to pay rent.1. Ex: Landlord leases office building

to tenant and there’s a large parkinglot with the agreement and if the parking lot is condemned, by thecondemnation of part of theleasehold premises does not relievethe tenant of the obligation to payrent.

5. Constructive evictiona. Extinguishes tenant’s obligation to pay rent. b. Material breach of the landlord which violates the

tenant’s in quiet covenant of quiet enjoyment if it

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renders the premises uninhabitable, then the tenantmust quit the premises in a timely fashion in order to be relieved of the duty to pay rent.

6. Frustration of purposea. Modern law.

b. Relieves tenant’s duty to pay rent.c. Complete or almost a complete frustration of purpose (e.g., sole use of the premises becomesillegal – lease premises for the sale of raccoon fursand then the state enacts a statute prohibiting thesale of raccoon furs – making it illegal, thefrustration of purpose would relieve tenant of his or her obligation to pay rent).

7. Surrender a. Express agreement of the parties where the landlord

gives the tenant permission to surrender, this

relieves tenant of his obligation not pay rent.8. Duty of repair a. Tenant has an affirmative duty to make ordinary

repairs on the premises. b. Tenant cannot commit waste on the leased

premises.i. Voluntary waste – Life tenant or tenant for

years1. Injury of premises or land caused by

an affirmative act of tenant, such asexploiting minerals on the land (or removes timber of the property)unless the land was previously soused or as so provided in the lease,this would constitute voluntarywaste.

ii. Ameliorating waste1. Change in the physical

characteristics of the occupied premises by an unauthorized act of

the tenant, but which increases thevalue of the land.

2. Ex: Where a tenant razes an oldoutmoded building on premises anderects a modern building whichraises the value of the property from$50,000 to $200,000.

3. Note: a tenant is not liable for ameliorating waste b/c it increasesthe value of the land.

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iii. Permissive waste1. Injury of premises or land caused by

tenant’s failure to act when a tenantis under a duty to act.

2. Ex: There is a leak in the roof and

it’s raining outside and water is pouring down – one of the shinglesis detached which causes the roof toleak and a rainstorm, water enters the premises and damages the hardwoodfloor. A tenant is under obligation tomake ordinary repair and in thissituation the tenant is liable for thedamage or the permissive waste thathas injured the property. **

iv. Equitable waste

1. Injury to the reversionary interest inland which is inconsistent with good

husbandry and is recognized only by the equity court and does notconstitute legal waste.

2. Ex: Where the tenant is about tocommit an act which constitutesequitable waste, the equity court canenjoin the tenant from doing that act, but no damages.

3. Where you have the expression“without the impeachment of waste”in the lease, then you’re having asituation dealing with equitablewaste.

4. Ex: A is the fee simple owner of Blackacre. On Blackacre, there is a6-story apartment building…we haveA, fee simple owner, conveying theapartment building, granting B a lifeestate in the apartment building. Bcan collect the rent with respect tothe rents of all of the tenants in theapartment building. Say, B, wants toraze this 6-story apartment building.B would be enjoined if shethreatened to raze the apartment building and construct a singlefamily home b/c this would cause

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injury to the reversionary interest tothe grantor or grantor’s heirs.

5. Normally, granting a life estate herewould have to include the words“without impeachment of waste” in

the conveyance. Then, B, would not be permitted to raze the 6-storyapartment building and build a singlefamily home, this would constituteequitable waste and this would beenjoined by the court in equity.

ii. Tenant’s tort liability – duty of care to licensees, invitees, trespassersi. A tenant, in order to determine the duty of care which a possessor

of land owes a licensee, invitee, trespasser.ii. Generally, no duty of care owed to trespasser unless an anticipated

or discovered trespasser, then the possessor has duty to warn the

tresspasers of known dangerous conditions which the trespasser would not normally discover himself or herself.iii. For a licensee, the duty of care generally owed is the duty to warn

of known dangerous conditions.iv. Duty owed to invitee:

1. Duty to inspect and make safe. jj. Landlord’s duties

kk. Bar exam question dealing with landlord – tenant law, usually tested onlandlord duties, tenant duties, assignments, subleases. (multistate)

PMBR CD #3

XVI. Landlord dutiesa. Duty to deliver possession of premises

i. American rule: Landlord does not have obligation to actuallydelivery possession of premises to the tenant.

1. A lessee does not acquire the legal interest in the premisesuntil he actually takes possession in the property.

2. In the event there is a trespasser or a holdover tenant(tenant at sufferance), the tenant’s exclusive remedy isagainst the wrongdoer and the tenant has no action against

the landlord.a. Tenant’s only recourse is to evict or go after thewrongdoer.

ii. English rule (common law rule): Landlord impliedly warrants thatthe tenant will have the legal right to possession at the beginning of the leasehold term

1. Contrary to the American rule b. In every lease, there is an implied covenant of quiet enjoyment.

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i. Eviction by the landlord reaches the covenant of quiet enjoyment

and relieves the tenant of his obligation to pay rent.ii. This covenant ensure the tenant that his possession will not be

disturbed by someone with a superior legal title to the landincluding the landlord. See Restatement 2d § 4.1-4.3.

(http://www.law.cornell.edu/topics/landlord_tenant.html)c. Actual eviction occurs when the landlord or paramount title holder excludes the tenant from the leased premises.

d. Constructive eviction results from conduct or neglect on the part of thelandlord which renders the premises uninhabitable.

i. The tenant may quit the premises in a timely fashion and no longer be obligated to pay rent.

e. Duty to deliver possessionf. Quiet enjoymentg. Premises suitable for particular purpose

i. Landlord does not impliedly warrant that leased premises is

particular purpose.ii. Landlord is not liable for dangerous conditions existing on theleased premises.

iii. Doctrine of caveat emptor prevails (“buyer beware”).iv. Exceptions :

1. Where there is a hidden defect – if at the commencementof a lease, there is a hidden defect, a landlord may be liablefor the tenant, guest, invitees, licensees, if at thecommencement of the lease, there is a hidden defect whichthe landlord knows about or should know about and whichthe tenant is not likely to discover.

a. Rationale: Landlord is liable where he or she hasenticed the lessee into a trap.

2. Where there is a completely furnished dwelling; landlord

in a lease for a short period of time for a completelyfurnished dwelling impliedly warrants fitness of the premises and the furnishings.

a. If injury results from defects, the tenant or other people entering the premises may recover againstthe landlord.

h. Landlord is under no duty to repair. At common law and in absence of lease covenant or statute, landlord is under no duty to repair. Tenant isunder a duty to repair and to perform ordinary repairs, not a landlord.

i. A landlord may be liable where the landlord undertakes the repairs(the tasks of making ordinary repairs) and does so in a negligentfashion, then the landlord may be liable in tort from the resultinginjuries.

XVII. Leasehold estatesi. Tenancy for a term – tenancy for years

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i. Fixed duration set forth in the lease – 6 months, 4 years, 5 years,etc.

j. Periodic tenanciesi. Tenancy from month to month, week to week, etc.

ii. Continuing type of tenancy and not the inception of a new tenancy

at the beginning of each period.iii. Automatic renewal:1. Tenancy does not terminate at the end of each period, but

automatically renews( week to week, month to month, etc.),unless one of the parties give notice of his or her intent toterminate.

iv. Failure to give notice to terminate:1. 30-days notice (usually statutory); if notice is not in

compliance with the statutory compliant, it is ineffective.a. Ex: 30-day notice period and one of the parties

gives 29-days, notice is not effective.

2. If no termination (that’s valid), then automatic renewal.k. Tenancies at willi. An estate that is terminable at the will of either the landlord or

tenant.ii. Common law – can be terminated without advance notice (unlike

periodic tenancy).iii. Continues indefinitely until terminated by one of the parties.

l. Tenancies at sufferancei. Tenancy arises where you have a holdover tenant, where a tenant

wrongfully remains in possession after the expiration of the lawfultenancy.

ii. Liability of a holdover tenant:1. Once tenant at sufferance is removed from land, then from

relation back to period of wrongful holdover period to thelandlord as trespasser.

m. Absent no prohibition restricting or prohibiting transfers in a lease, atenant may transfer her leasehold interest in whole or in part.

i. If she makes a complete transfer of her entire remaining estate, shehas made an assignment.

ii. Conversely, where she has retained any part of her leaseholdestate, then the transfer is a sublease.

iii. Ex: Landlord leases premises to tenant for 5-years. After Year 3,tenant decides to go to Europe and tenant is planning on staying inEurope for the rest of her life, so she transfers the remaining 2-years under her tenancy for years to her friend, Judy.

1. This would be an assignment.2. Tenant is transferring the entire remaining balance to her

friend Judy, the assignee.iv. Ex: 5-year tenancy. After Year 2, Cathy has a job position in CA

for 1-year (internship), she’s been in possession for 2, she now

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wants to transfer…leave the state for 1 year…but she plans toreoccupy her apartment for Years 4 & 5, so she enters into asublease with her friend where she transfers the premises to her friend for 1-year…since she retains part of the leasehold, then thetransfer constitutes a sublease.

v. Effect of assignment by tenant (assignor), the tenant is still in privity of contract with the landlord even where you have anassignment. **

1. There is no longer privity of estate between the tenant andlandlord.

2. There is still privity of contract between the tenant andlandlord.

vi. You have an assignment and a leasehold agreement entered into between tenant and landlord and then the tenant assigns his rightsto the assignees – this is where the tenant transfers her entireremaining balance under that leasehold, in which case, the tenants

and landlord – no privity of estate. But there is privity of contract (i.e., covenant to pay rent).

1. Q: Between the assignee and landlord after an assignment?a. There is both privity of estate and privity of

contract. b. Assignee is bound to perform the original covenants

in the lease and is held liable to the landlord… because these covenants run with the land and are based on privity of estate and privity of contract.

2. Q: What about a second assignment?a. Where the assignee reassigns her interest, her

privity of estate ends **, and unless the firstassignee has assumed the covenants under thelease, then there is no privity of contract either.

b. Second assignee will be in privity of contract and privity of estate with the landlord.

c. There may be privity of contract where the firstassignee has expressly or in writing has assumed thecovenants under the lease, such as the covenant to pay the rent. **

vii. Effect to pay rent:1. Tenant and sublessee – no privity of contract and no privity

of estate.2. However, the original tenant (original lessee) remains in

privity of contract and in privity of estate with the landlord.3. A sublease creates no legal relationship between the

landlord and subtenant.4. The original tenant remains the landlord’s tenant and the

sublessee is the tenant of the original tenant (his landlord).

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5. The original tenant therefore remains obligated under thecovenants in the lease (i.e., covenant to pay rent).

viii. Assignment of the landlord1. Landlord’s reversionary interest is assignable.2. The sale of an occupied apartment building constitutes such

a transfer.3. A landlord can convey his ownership interest in the premises or the property.

4. Recognition of the new landlord by the tenant is calledattornment.

ix. Lease covenants:1. Covenants against assignments or subleases are strictly

construed.2. In a lease, you may have a clause prohibiting assignments

or subleases.a. Many leases contain these clauses not to do these

things without the consent of the landlord. b. These are strictly construed.c. A covenant that prohibits subleasing does not

prohibit assignment and vice versa.XVIII. Fixture

n. Chattel which becomes real property. (multistate)o. For a chattel to become a fixture:

i. It must be the intention of the annexor that the chattel become afixture.

1. Various considerations in determining the intent of theannexor:

a. Nature of the article b. Manner of annexation to the landc. Injury to the landd. Completeness with which the chattel is integrated

with the use to which the land is being put. **e. The relation which the annexor has with the land,

whether the annexor is a licensee, tenant at will, or the owner of the property.

ii. The chattel must be annexed to the reality either actually or constructively.

iii. The chattel must be appropriated for the purpose for which theland is to be used.

p. Trade fixturesi. Chattels annexed to the land by the tenant for pecuniary gain

during her tenancy.ii. They are removable by the tenant – tenant for life, tenant for years,

tenant at will.II. Rights in the land of others – nonpossessory interests or incorporeal interests

in real property

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a. Profitsi. Profits a prendre / profits:

1. The right of one person to go onto the land of another andextract or remove something therefrom, such as sand,timber, or vegetable.

b. Easementsi. The right of one person to go on land in possession of another andmake limited use of that property, such as for ingress or egress.

ii. Ex: You grant someone an easement for ingress / egress – to use awalkway.

iii. Easement holder does not have right to remove substance in the property, but only has right to enter the person’s property andmake limited use – ingress or egress.

iv. Two types of easements:1. Easements appurtenant

a. Requires 2 parcels of land – dominant tenement and

adjoining servient tenement. b. It is the owner of the dominant tenement (a.k.a.dominant tenant) has the right to enter onto theservient tenement and has the right to make use of that tenement for ingress or egress.

c. Servient tenement is the land subject to theeasement.

d. Easement appurtenant runs with the land (adjoiningtracts of land).

i. Ex: Jones is the owner of the dominanttenement. Smith is the owner of the servienttenement. If Smith gives Jones the right toenter onto the servient tenement for ingressand egress.

1. Q: What happens if Jones conveyshis property to Baker and Smithconveys his property to Carl?

a. Easement appurtenant runswith the land because it can be enforced by or againstsuccessors in interest to theoriginal contracting party.

b. If Jones conveys his propertyto Baker, Baker can enforcethat easement against Smithor Carl.

2. Easements in grossa. Easement in gross – you don’t have 2 adjoining

tracts of land; one parcel of land burdened with theeasement.

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i. Ex: You only have a servient tenementsubject to easement.

ii. Ex: City installs a sewer line across your backyard or a city installs telephone linesacross your front yard.

iii. Easement in gross is personal – it isintended to benefit the holder personally,rather than in connection with any land thatowner may own – here, no adjoiningdominant tenement.

iv. Easement in gross can run with the land.v. Ex: The City constructs a sewer line in your

backyard. Jones is the owner of the propertyand Jones conveys the property to Smith.Certainly, that easement is going to run withthe land and is going to burden the land as

far as Smith or any successor in interest may be concerned.3. 2 basic classifications of easements:

a. Affirmative easementsi. Entitle the easement holder (usually, the

dominant tenement holder where you havean easement appurtenant) to make someaffirmative use of the dominant tenement.

b. Negative easementi. Prevents the servient tenement owner from

doing some act or making a particular use of her land.

ii. Ex: B, is the owner of Blackacre, located between the ocean and A’s property. Aowns Whiteacre. B agrees in writing not toconstruct any structure on his property thatinterferes with A’s view of the ocean. B hasa negative easement – B is promising torefrain from building on his property so thatA’s view of the ocean will not be impaired. Negative easement prevents the servienttenement owner from doing some act or making a particular use of his or her property.

4. Creation of easementa. An easement is an interest in land.

i. It comes within the Statute of Frauds – where you have a K for a sale or transfer for an interest in land, that K comes within the

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statute of Frauds and it must be in writing inorder to be enforceable.

1. It usually must be created in awriting in order to be enforceable.

2. Easement is an interest in land, and

therefore must be in writing – deedor other similar type of writteninstrument.

b. 2 types of easements not in writing:i. Easements by implication (or necessity)

1. Where you have a subdivisionalscheme.

a. Ex: Baker owns a 100-acretract of property and decidesshe is going to subdivide her property and sell off 100 1-

acre lots to various buyers.Baker sells these individuallots to X, Y, S, U. There is ahighway bordering on theeastern tract of the property.Baker sells this lot to Y, butin Y’s deed, no mention ismade as to an easement for ingress or egress over U’sland. The only access Y hasto the highway is over U’sland. Here, Y has aneasement by implication over U’s property by ingress andegress. Usually, implicationarises where reasonablynecessary or strictlynecessary for the benefit of the dominant tenementowner. Also called aneasement by necessity.

2. Easement by implication can arise bygrant or by reservation

a. Where Baker is the owner of this subdivision and baker,the grantor, conveys this lotto Y, if Y, who is thedominant tenement owner, isto be benefited by theeasement across U’s property

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where Y is the grantee, thenthis is an easement by grantwhere the easement benefitsthe grantee. The granteesimply has to show that the

easement was reasonablynecessary. b. But, where you have an

implication by implication or implied reservation, theeasement benefits thegrantor.

c. Ex: Baker, owner of the property, sells this lot to Cand Baker retains these threelots here. Baker’s only

access to the highway isacross C’s property. In thissituation, it is the grantor whois benefited by the easement.Even though there was nomention of the easement inC’s deed, we would say thatif Baker’s only access to thehighway is by the property,this is an easement byimplication.

d. In order for the grantor tohave an easement, grantor isto show that the easement isstrictly necessary.

e. For the grantee, the granteeonly has to prove that theeasement is reasonablynecessary.

ii. Prescriptive easements (easements by proscription)

1. Adverse usea. Use must be without

permission (nonpermission)2. Open3. Notorious4. Continuous5. Use must be continuous for the

statutory periodv. Easement may be extinguished by:

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1. Merger a. Where the fee simple title to both the servient and

dominant tenements come into the hands of a single person.

b. Ex: Where both the dominant and servient

tenements come under single ownership, acquiringtitle to both parcels of land.c. Ex: Dominant tenement owned by Baker. This is

the servient tenement which is owned by Able. SayBaker has the easement / right to enter Able’s property for ingress / egress. Let’s say that Able purchases Baker’s land in which case Baker’seasement is extinguished by merger.

d. Where the servient tenement owner purchases theother parcel of land, then the easement isextinguished by merger. (tested on the multistate)

2. Written releasea. Where the holder of the benefit of the easement – the holder of the benefit easement (normally, thedominant tenement owner) may execute a releaseterminating the easement.

3. Abandonmenta. Clear showing by the dominant tenement owner that

she intends to abandon the use will extinguish theeasement.

b. Mere nonuse, no matter how long continued, willnot extinguish an easement.

c. Where you have nonuse coupled by the intent toabandon, this would be sufficient to terminate aneasement.

d. Ex: Baker owns a large tract of land and many yearsago, back in 1950, he gave the B&O RR companyan easement over the northern half of his propertyto run the railroad lines. The B&O RR Co. usedthat easement and trains traveled over that tract of land, but within the last 5 years or 7 years, B&O hasdecided not to run its trains over that line and is nolonger using the easement. This mere nonuse willnot extinguish the easement. The easement will beextinguished if B&O removes the tracks – this willshow nonuse coupled with an intent to abandon – this will extinguish the easement.

e. Excessive use does not forfeit or extinguish theeasement.

f. Excessive use – then it is up for the servient owner to bring an action of equity to curb the excessive

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use, that goes beyond the conditions of theeasement, seeking injunctive relief in order toenjoin the excessive use from continuing.

4. Prescriptiona. An easement can be extinguished or terminated by

prescription – when the servient tenement owner has used her land continuously and uninterruptedlyfor the statutory period of prescription in a way thatis inconsistent with and adverse to the easement andwithout the consent of the dominant tenementowner.

i. The easement is then extinguished by prescription.

5. Destruction of the servient tenementa. If the easement is in a structure (i.e., staircase or

hallway for purposes of ingress or egress) and there

is an involuntary destruction of the structure (by fireor flood), then this will extinguish the easement.6. Estoppel

a. B has a right of way over A’s Blackacre and tells Athat he has no intention of using the right of wayagain and has not used it for several years.

b. A then goes build a house over B’s right of way. Bhas seen the construction – the house being builteveryday. B says I have a right of way, I’m goingto continue to use that roadway for ingress or egress. B will be estopped from using theeasement. Example of estoppel.

c. Where the servient tenement owner in reasonablereliance of the conduct or oral assurances of thedominant tenement owner, uses the servienttenement in a manner inconsistent with the use of the easement, this will result in extinguishment of

the easement by estoppel.7. Condemnation / eminent domain

a. Where you have condemnation of the servientestate, this will extinguish the easement.

b. Modern view: Where you have termination of aneasement by condemnation or eminent domain, theholder of the easement (dominant tenement owner)is entitled to compensation for value lost.(multistate)

i. Same rule applies to profits. Where youhave the termination of a profit or easement by condemnation, then the profit holder or easement holder is entitled for compensation

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for the value that is lost. Profit holder or easement holder not necessarily owner of property (just right to exploit).

c. Licensesi. Mere permission to come on to land of another without being

viewed as a trespasser.ii. Unlike an easement, a license is not an interest in land. It is merelya privilege, a revocable privilege, at the option of the licensor tocome on to the land for that limited purpose.

1. Generally, a license is revocable, but where the license iscoupled with an interest, it is irrevocable.

iii. Ex: If you go to a shopping mall (the Beverly Center) and you gointo the parking lot and in the mall facilities, you pull your car in, park your car, and you go shopping. This is a license – mere privilege to park your car would constitute a license. If you had topay for the parking, then arguably now this interest could be

viewed as a contract or it could be viewed as a license coupledwith an interest that could make it irrevocable.1. If you park your vehicle on someone’s property, where you

have a mall-type facility, where you don’t have to pay, thisis a license.

iv. Ex: You’re a sports spectator and you go to watch the baseballteam play, your sitting in your seat at the stadium is a license. If you misbehave (throwing things at players, etc.), they can evictyou from the stadium. The license is revocable.

1. Property interest in sitting in the seat – license.2. Tort classification – invitee (paying customer) (tort law).

Duty of care to inspect and make safe for you (owner owesyou this).

d. Covenants running with the lande. Equitable servitudes

PMBR CD #4:

XIX. Licensesa. A license is generally revocable. b. If a license is coupled with an interest, it is irrevocable.c. Ex: A is the owner of Blackacre and A sells B 100 bushels of potatoes

which are stored in a shed or warehouse on Blackacre and at the same timethat A sells B 100 bushels of potatoes, A gives B permission / a license toenter Blackacre to remove the potatoes. Here, B has a irrevocable license b/c B’s right to enter into the property is coupled with an interest (i.e., the purchase of the potatoes).

d. A license is not the same thing as a lease.i. Licensee never had possession of the land.

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ii. Licensee simply has mere permission to enter onto the land.iii. Lessee or a tenant always has possession of the land.

e. A license is not the same thing as an easement.i. Easement – substantial, noncorporeal interest in the land of

another.

1. An easement generally must be a writing complying withthe Statute of Frauds.ii. License is not an interest in land, does not have to comply with the

Statute of Frauds, does not have to be in writing.XX. Covenants running with the land

f. Hybrid between a contract and an easement.g. More than just a personal contract, but less than an easement in the sense

that a covenant is not an interest in the land.h. A covenant running with the land is attached or connected with the estate

since it may be enforced against or by someone who was not one of theoriginal parties – it may be enforced by successors in interest to the

original convenantor and convenantee (original convenanting parties).i. There must be a covenant which must be in writing which is signed andcomplies with the Statute of Frauds.

j. It must be the intent of the convenantor and convenantee that thatconvenant run with the land.

i. As long as the words “assigns” or “successors” is used in theinstrument, then the intention is clear that the covenant wasintended to run with the land.

k. Covenant must touch and concern the land.i. Covenant must make the land more value (increase utility) or less

valuable (or curtail the use).

l. There must be privity of estate between the parties.i. One of the contracting parties succeeds to an interest in the land of another.

ii. Ex: Privity of estate between a landlord & tenant; privity of estate between grantor and grantee. Grantor is succeeding to estate of landlord. Grantee is succeeding to estate of tenant.

m. Generally enforceable with actions at law.i. Breach of convenant is similar to breach of contract.

ii. Nonbreaching party brings damages to recover for breach of contract or covenant.

iii. Breach of contract recovers money damages.iv. But sometimes -- Damages may be inadequate, may seek

injunctive relief.n. Terminated

i. Covenant running with land may be extinguished in the same wayas an easement or profit.

1. Covenant running with the land may be extinguished bya. Merger b. Abandonment

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c. Estoppeld. Release

XXI. Equitable servitudeso. Restriction on the use of land enforceable in equity. p. In order to have an equitable servitude, 3 requirements must be satisfied:

i. There must be a writing, complying with the Statute of Frauds.ii. The intention of the parties determines who may and who may notenforce the equitable servitude. Intention on the parties to bind

the land with this servitude.iii. Notice. The transferee or grantee must take the land with either

actual or constructive notice of the existence of the servitude.1. Cannot be enforced by a person who gives value but has no

notice of the servitude, namely a BFP. You have to havenotice.

2. Notice may be:a. Actual notice

b. Constructive notice (record notice; declaration of restrictions in subdivision or common developmentscheme, recorded with the Recorder’s Office); onewho purchases lot of land would be on constructiveor record notice of the restriction.

c. Inquiry noticei. We have a subdivision scheme or common

development scheme.q. Equitable servitude usually arises in these common development schemes:

i. Baker is the owner of a 100-acre tract of land and subdivides the property and intends for a common development scheme that this

subdivision will be restricted to residential use or restricted to only building single family homes.ii. Equitable servitudes may be established in common development

schemes.

1. Multistate if you see a common development scheme,question probably deals with equitable servitude.

2. Say, Baker wants to restrict the common developmentscheme and in the deed to 90 lot owners, he containsrestriction saying restricting use of lot to residential useonly. Baker sells 90 lots; each of deeds have thisrestriction. 2 years later, Baker than develops and sells off

these last 10 lots but fails to include any mention of therestriction. In this type of restriction, these lot owners maystill be bound with the restriction even though it’s not in thedeed b/c they’re deemed to have inquiry notice (theyshould be aware of the common developmental scheme)since all other lots have this restriction residential scheme.Therefore the lot owners may be bound by the equitableservitude.

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iii. 3 methods of imposing:1. Declaration of restrictions

a. Where the grantor files this with the recorder’soffice, evincing an intention to restrict the use of thelot in the subdivision for residential purposes.

b. Where this is done, all of the other lot owners haveconstructive notice and are bound by the restriction.2. Where all of the lot owners get together and execute a

formal agreement themselves.3. Where the owner in a subdivision places restrictions on

some of the lots, sell those off, retains some lots himself or herself…you have situation of inquiry notice where peoplethat buy the last lots even though they don’t have notice of equitable servitude, they are put on a inquiry notice.

iv. Where the grantor or person who is developing commondevelopment scheme files a declaration of scheme with the

recorder’s office – evinces intention to restrict the use of lots in thesubdivision for residential purposes and sets forth intention to setup a comprehensive scheme for the subdivision – covenant

running with the land.1. Where you have this declaration of restrictions, it is each

lot within the tract that is going to be bound by suchrestrictions. It doesn’t even have to be adjacent lot owners.

v. Equitable servitude vs. covenant running with the land:1. If you see a restriction and you aren’t sure whether it

should be enforced as a covenant running with the land or equitable servitude:

a. Explain both covenant running with the land andequitable servitudes.

b. Covenant running with the land:i. Privity of estate is required.

c. Privity of estate is not required for an equitableservitude.

i. Person acquiring the property must take theland with actual or constructive land of therestriction.

d. Multistate:i. What is the remedy?

1. One lot owner to bring suit to enjointhe nonconforming use from beingmade, this is an equitable servitude – b/c this is a restriction in equity. If remedy is in equity, the restriction isusually an equitable servitude.

2. Where remedy is an action

brought at law for money

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damages, you must have covenantrunning with the land.

vi. Extinguishment of equitable servitude:1. Can be extinguished or terminated by release, merger,

abandonment, etc.

2. Tested :a. Changed neighborhood conditions may also operateto terminate an equitable servitude.

i. Where the purpose of the servitude becomesmeaningless or impossible of attainment b/cof changed neighborhood conditions, thisresults in extinguishment in equitableservitude.

ii. Ex: Change in neighborhood conditions(commercial development – office buildings, or gas station built on

neighborhood, etc.), where purpose of servitude is meaningless, then change inneighborhood conditions will extinguish anequitable servitude.

iii. Zoning changes will not terminate anequitable servitude which are inconsistentwith the restrictions in the common plan.

XXII. Rights incident to possession and ownership of landr. Adverse possession

i. Adverse possession doctrine is based upon the statute of limitations for recovery of real property.

ii. Statute of limitations operate not only to bar one’s right to recover real property held adversely by another but may operate to oustadverse possessor with title to the property as though he hadreceived a conveyance by deed.

iii. Ex: Somebody occupies property of another, adversely without permission, openly, notoriously, continuously and for the statutory period (for the statute of limitations), then he can acquire title byadverse possession and divest the rightful owner of the right of property.

iv. Requirements:

1. Use must be adverse (without permission)

2. Actual and exclusive

a. Sole, physical occupancy b. If the owner of the property is still occupying the

land, then your use (adverse possessor’s use) is notactual and exclusive.

3. The use must be hostile and adverse (without permission)4. The use must be open and notorious (not secret and

clandestine)

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a. Adverse possessor must present to the world that heor she is the owner of the property.

5. The use must be continuous and without interruption for the statutory period – 7-years, 20-years, etc.

6. For the statutory period.

7. Use must be peaceable (no forcible physical eviction or eviction by court action).a. All elements must exist in order for adverse

possessor to take title away from the rightful owner.v. Frequently tested on bar exam :

1. Limitation of adverse possessor’s claims:a. Adverse possessor cannot acquire a larger estate

than he or she claims in the property.i. Ex: If the adverse possessor only claims a

life estate in the property, then he may notacquire a fee simple title in the property.

b. Adverse possessor cannot claim title to less than afreehold estate.i. No one claiming less than a freehold estate

may get title by adverse possession.ii. Must claim a life estate, fee tail, or a fee

simple.c. Statutory period on adverse possession begins to

run when a cause of action accrues against theadverse possessor.

d. Recording statutes have no application to adverse possession.

e. Tacking : There need not be continuous possessionof the property by a single individual. The periodof adverse possession may be tacked on by oneadverse possessor to another, as long as there is privity between the two individuals.

i. Privity exists between adverse possessors if the interest of one is passed onto the other by descent, deed, will, written contract, oralcontract, oral gift, or mere permission.

2. Disabilitya. One who is under a disability whether due to

minority, imprisonment or insanity. At the time of the accrual of the cause of action by the adverse possession, is given by statute – most states permit a person under the disability to toll (stopped) therunning of adverse possession until the disability isremoved.

i. Statute of limitations is for example 10-years or 20-years in fact pattern. Facts say

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that this jurisdiction has this statute in effect – the statute which tolls the running for removal of disability is phrased in thisfashion: “an action for the recovery of landshall be commenced within 10 years or 20

years after the right of action first occurred, but if a person entitled to bring such actionat the time the cause occurs is within the ageof minority ,of unsound mind, or in prison,such person shall bring such action within10 years after the disability has beenremoved.”

1. Where you have disability, that person has an extra period of time(ex: 10 years after with which to bring an action against the adverse

possessor). Tolling – takes intoaccount the disability.3. Title acquired by adverse possession is a substantive law

title (good as gold).a. Recording statutes don’t have application to title

acquired by adverse possession.4. Honest mistake : Where a person occupies property of

another openly, notoriously, continuously for the statutory period under mistaken belief that he or she is the rightfulowner of the property.

a. Minority view : Possessor does not hold titleadversely unless the person intended to hold the property against the whole world, including therightful owner in order for adverse possessionstatute to run.

i. Where the adverse possessor wrongfully believes he’s the rightful owner, you don’thave the subjective intent to adversely possess.

b. Majority: If you have an honest mistake, you canstill acquire title via adverse possession.

i. The possession alone, not the subjectiveintent of the adverse possessor, is what isimportant.

ii. Visible adverse possession + intent to possess constitutes adverse character and notthe subjective belief of the adverse possessor.

s. Lateral and subjacent support

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i. Right of landowner to have land supported laterally by neighboringland is an inherent land.

ii. Right of lateral support:1. Land in its natural condition without any buildings or

artificial structures by excavation or otherwise withdraws

lateral support from his neighbor’s land is absolutely liablereliable of negligence – absolutely liable for damage causedto the land.

iii. Where you have artificial structures on the land and the land in itsnatural condition would have been injured by the taking away of lateral support:

1. English rule (minority rule – minority of states):a. Recovery would include both damage to the land

and damage to the artificial structures.2. American rule (majority view)

a. Recovery is limited to damage to the land and does

not include damage to the artificial structures on theland. **iv. Negligent excavation:

1. English rule + American rule:a. If there is negligence on the part of the excavator /

wrongdoer who removes lateral or subjacentsupport, then the D is liable for the damage whichnaturally and proximately flows from hisnegligence, including recovery for damage for bothland and artificial structures.

v. Subjacent support:1. Same rules apply (right to below the land, as opposed to the

sides) as lateral support.vi. Interference with underground water.

vii. If one excavates and this releasing semifluid or semisolid materialfrom his neighbor’s land causing his neighbor’s land to sink, thereis liability.

t. Water rightsi. Lakes and streams on the surface

1. Riparian water rights (riparian land – land with naturalwatercourse, such as a river)

2. this doctrine is predominant in a majority of states – allattracts of land which abut or touches lakes or streams isriparian. To be riparian, one only needs to be an owner of riparian land.

3. Natural flow theorya. Each riparian owner has a fundamental right to have

the stream or lake remain substantially in its naturalstate, free from any unreasonable diminishment inquantity and free from pollution.

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b. Each riparian may use the water for natural or artificial uses so long as he or she only uses it onriparian land and only does sensibly so as not toaffect the quantity or quality of the water.

4. Reasonable use theory

a. Each riparian owner has a fundamental right tomake maximum use of the water in the lake or stream provided that such use does notunreasonably interfere with the like use of other riparians.

b. Each riparian owner may use the water for any beneficial use, either on riparian or nonriparianlands, so long as he or she does not unreasonablyinterfere with the reasonable use of other riparians.

5. Ex: (multistate)a. A, an upper riparian, along a stream of water,

diverts the water from the stream for the purpose of irrigating his riparian and nonriparian lands. Thediversion of the water causes the level of the water to go 6 inches below its natural or normal level.However, there is plenty of water in the stream tosupport all of the uses to which the lower ripariancan put the water use to. Under the natural flowtheory, an injunction would issue b/c B has the rightto have the level of the water maintained. A’s usereduced the water level by 6 inches…violatingnatural flow theory. However, under the reasonableuse theory, the injunction would not be granted b/cB can show no injury to himself as a lower riparian b/c in the facts…plenty of water left for the lower riparians.

ii. Natural and artificial uses1. Natural uses – uses necessary for daily sustenance of

human beings:a. Household uses b. Consumption usesc. Domestic purposes (gardening for example)

2. Artificial usesa. Irrigation b. Power c. Miningd. Industrial uses

3. Majority rulea. Use of water for natural purposes is paramount and

takes precedence over use of the water for artificial purposes.

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b. One exception (minority view):i. 17 states follow prior appropriation.

Generally, western states follow this. Inthese western states that follow this doctrine,the prior use of the water is protected. Prior

beneficial use of the water is protected.Even though use of the water may adverselyaffect lower riparian water rights, first intime, first in right. No equality of rights, noreasonable rights. Whoever makes prior rights of the water, the beneficial use is protected.

iii. Underground or percolating waters1. Waters below the surface of land2. Subject to absolute ownership and control of the surface

owner (common law).

a. If withdrawal of percolating water affects adverselythe neighboring land owner, the rule is that it is toodamn bad. No legal redress in this situation.

3. Reasonable use theory (American rule – majority):a. Owner of surface land may withdraw percolating

water from underneath of the land and must makereasonable use of the water. If the surface owner makes unreasonable use of the water which affectsneighboring land, neighbor has cause of actionagainst the surface land.

iv. Surface waters1. Common law rule (common enemy rule):

a. Majority: A land owner has unlimited discretion indealing with surface waters.

b. Surface waters = common enemyc. Landowner has unlimited discretion in dealing with

surface waters – can build dikes or drain the water – and not be held liable to his or her neighbors.

u. Surface rights (& subterranean rights) & above surfacei. Surface rights include natural vegetation such as trees, shrubs,

growing crops (chattels attached to the land)ii. Fructus naturales

1. Trees, grasses, shrubs – these are viewed as being fructusnaturales and are considered to be part of the land. Theyare considered to be a natural part of the land / real property. If trees, etc., are owned by property line of adjoining landowners, then the landowners own the trees astenants in common.

2. Passes with conveyance of land.

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3. Those crops which come from nature’s bounty, without theaid of man – trees, shrubs, grasses.

4. Viewed as real property until they are severed from theland.

iii. Fructus industriales

1. Comes from man’s industry / Man’s annual planting,cultivating ,fertilizing, harvesting: grains, beans, corns, pineapple, citrus fruits.

2. Called emblements: usually annual crops.a. But, if crops such as apples, pears, grapes,

raspberries, oranges, grapefruit, lemons…some of these crops are perennial, but they are still referredto as emblements (even if they are perennial crops).

3. Personal propertyiv. Multistate:

1. If a tenancy is an estate for years, having a definite time of

beginning and a definite date of termination, the tenant’sright to remove growing crops or emblements is terminatedwhen the tenancy is closed. Any crops remaining becomesthe property of the landlord. (where the tenant growsfructus industrials crops). If the tenant has severed thecrops at the end of the tenancy, but the severed grainremains on the land, then this is viewed still as personal property and the crop belongs to the tenant.

2. Where you have a tenancy of will, if the tenancy is of uncertain duration, having no certain date of termination,tenant has a reasonable time to remove crops which are planted after the termination of the term. This is regularlyapplied in a tenancy at will. If you have a tenancy at will,the rule is that a tenant is permitted to remove all growingcrops (all fructus industrials crops) after such tenancy if such crops are planted in the ground at the notice of termination and the tenant is given sufficient time toremove such crops.

3. Minority view: rarely tested (contrary to rule of emblements) (followed in FL): on the death of the lifetenant, the title of an immature orange crop vests in theremainderman (contrary to common law view); personalrepresentative of deceased life tenant is entitled to recover the sums invested in cultivation of the crop. The life tenantwill not be entitled to proceeds of the crop.

PMBR CD #5:

XXIII. Conveyancing and mortgagesa. Conveyances in the US:

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i. Statutes usually provide that freehold estates may be conveyed bydeed or other instruments.

ii. A writing which evidences an intention to convey an estate will besustained, however, even though it does not necessarily constitutea deed instrument (even though conveyances are usually by deeds),

as long as it is sufficient to satisfy the Statute of Frauds.1. Where you have a K that deals with sale or transfer of interest in land, it must be in writing in order to beenforceable under the Statute of Frauds.

2. Statute of Frauds is satisfied if a sufficient memorandum isin writing and signed by the person sought to be charged or the grantor.

3. Flexibility as to what constitutes a sufficient memorandum.iii. Must be present in the writing for a valid conveyance (Statute of

Frauds):1. Writing must identify the grantor & grantee

2. Sufficient description of the land conveyed.a. Description is adequate if it provides a good lead of the property sought to be conveyed.

b. Ex: All of my land in LA county is sufficient for land to be conveyed.

c. Insufficient description – description is tooindefinite to describe the land, then title remains ingrantor, subject to suit for reformation of the deed.

i. Parole evidence is admissible to explain or supplement a written description or clear upan ambiguity.

ii. 2 basic types of ambiguity:1. Patent ambiguity

a. Appearing on face of thedocument or deed.

2. Latent ambiguitya. Appearing after presentation

of evidence.3. Purchase price must also be included4. Promises on both sides, where the grantor promises to

convey the property and the grantee agrees to pay the purchase price for the property.

5. Writing must be signed, usually by the grantor or the partyto be charged.

iv. Oral promise to convey land where you have the doctrine of substantial part performance.

1. Purchaser can enforce the oral K where:a. Where the purchaser pays the seller part or all of the

purchase price and the buyer takes possession of the property or where the buyer pays part or all of the

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purchase price and makes improvements on theland.

i. The oral K is taken out of the Statute of Frauds and made enforceable where thisapplies.

b. Delivery and acceptance of deedsi. In order to have a valid conveyance, you must have delivery of thedeed.

1. A deed is not effective to transfer property unless it has infact been delivered.

ii. Physical transfer of the deed is not necessary to make a validdelivery.

iii. Delivery refers to the grantor’s subjective intent.iv. Valid delivery / effective delivery, we look to grantor’s intent:

1. Can be satisfied by words or conduct, showing that thegrantor’s intent is that the deed have some operative effect.

2. Title may pass even though the right to possession may be postponed to some future time.v. Ex: A draws an instrument conveying Blackacre to B and hands

the instrument to b for safekeeping. Although handed to thegrantee, not a valid delivery, b/c no evidence that the grantor intended that the deed have present operative effect (i.e., makepresent transfer of the land).

vi. Ex: A draws up an instrument conveying Blackacre to B andattempts to give instrument to B personally, but is unable to findhim. A quits possession of property and treats B as the owner. Nearly all courts have held there is sufficient delivery b/c it wasthe present intent of the owner to make a valid conveyance.

c. Delivery issuesi. Where the grantor retains the deed or the grantee gets physical

possession of it, or 1. Where the deed is in the possession of the main grantee, the

rebuttable presumption has been raised that this is aneffective delivery.

2. Where deed is in the possession of the grantor, the presumption is that there has not been a valid delivery.

3. The fact the deed is recorded raises presumption that therehas been made.

4. Parole evidence is admissible to prove grantor’s intent(conduct or statements by grantor, before or after delivery)

ii. …the grantor gives the deed to a third person for transmission tothe grantee.

1. Conditional delivery (where deed is given to third party) is permissible.

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2. Where you have transfer to a third party with no condition,A giving C a deed ,naming B as a grantee and instructing Cto give deed to B.

a. Majority view : valid delivery has occurred.i. Since it was the grantor’s intent to make the

deed presently operative.3. Transfer of property with conditions:a. Escrow – certain conditions must be satisfied before

deed is passed on to the grantee.i. A giving C a deed ,naming B as a grantee

and instructing C to give deed to B, when Bhas paid remaining balance of purchase price.

ii. A valid conditional delivery has occurred;deed has a present operative effect eventhough conditions to be met in the future.

Transfer will occur automatically uponoccurrence of condition and A, the grantor,will retain title, only if the conditions havenot been met and do not occur.

iii. Where grantee wrongfully acquires deedfrom escrow holder without performingconditions (payment of the purchase price),then grantor retains the title. No validdelivery here.

XXIV. Equitable conversiond. Treats interest in land as if land had already been converted to personal

property.e. Applies where we have a seller, the owner of the property, enters into areal estate sales agreement with the buyer, to sell Blackacre and they agreeon a purchase price, $100,000, and then the parties enter into an executoryreal estate sales contract. Buyer pays seller a deposit. They enter into thereal estate sales agreement on September 1st. The date for closing is setfor November 1st.

f. According to the doctrine, during the period from September 1st after thereal estate sales agreement is entered into and the closing date of November 1st when the buyer has the time to do a title search and come upwith the payment price, the seller by this doctrine is deemed to be theequitable owner of the balance of the purchase price and the buyer isdeemed to be the equitable owner (beneficial owner) of the property.

i. Legal title still remains with the seller.ii. During the executory stage of the sales contract…

iii. The risk of loss is on the buyer. During Sept. 1st to Nov. 1st, risk ison the buyer, if the property is destroyed by fire or flood. The buyer must take out insurance on the property to protect this

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expectancy interest he has at the closing date when title will pass tohim.

g. Applies where there is an enforceable obligation to sell land (real estatesales contract), buyer is regarded as the equitable owner of the land andthe seller is the equitable owner of the purchase price.

h. What if the vendor dies on Oct.15th

? When the vendor dies during theexistence of the existence of a specifically enforceable K, the beneficialinterest descends as personal property and the heir only gets a bare legaltitle which she must convey to the purchaser when the purchaser performsand the proceeds of the sale then goes to the vendor’s estate and then passon by inheritance to his or her heirs.

i. Vendor’s death does not negate the real estate sales K.ii. Vendee can still enforce the K.

i. When the vendee (purchaser) dies during the existence of the real estate K period, the right to receive the land goes to her heirs, but the duty to paythe purchase price falls on her personal representatives (executrix,

administrator, etc.) – can still enforce the real estate sales K, can buy theK, then title to the property can pass on to the decedent’s heirs.i. Risk of loss is on the vendee for casualty loss which happens

during the executory period of the sales contract.XXV. Marketable title

j. In an absence of agreement to the contrary, an implied undertaking in areal estate K that a vendee has marketable title. The K usually providesthat the vendor will provide good and marketable title to the vendee.Where the vendor does not give this duty, vendee may rescind the K.

i. The deed supersedes the real estate K.ii. If a deed is delivered and contains no warranty of title, the deed

supersedes the K which is no longer in effect.iii. If the vendee goes through the sale and accepts the deed withoutany warranties of title, the deed will supersede the K.

k. Vendor is only obligated to deliver good and marketable title at the time of the closing. Vendee may not rescind K before that.

l. Ex: Jones entering into a K to sell Blackacre to Smith. Smith does her titlesearch and discovers on October 15th that there is an encumbrance on the property (easement on the land). Smith contacts Jones, saying you aren’tgiving good and marketable title, I’m rescinding the K. Can the vendee dothis? No b/c the vendor has until the date of the closing to render goodand marketable title.

m. Defects rendering title unmarketable:i. Outstanding mortgages

ii. Existence of restrictive covenantsiii. Outstanding reverter rightsiv. Encumbrances which the vendor cannot or will not removev. Easement upon any appreciable part of the property

vi. Variations in the names of the grantors and grantees in the chain of title

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vii. Outstanding dower interestXXVI. Boundary line agreements

n. Judicial recognition is extended to boundary line agreements even thoughthere is no right.

o. Even though the parties can orally make a boundary line agreement and

compliance with the Statute of Frauds is not required.i. Oral agreement is valid and enforceable and does not have to comewithin the Statute of Frauds.

XXVII. Covenants in deeds respecting title p. 3 of these are breached, if at all, when the deed is delivered.q. Covenants for seisinr. Covenants for right to conveys. Covenants against encumbrances

i. 3 covenants are in the present tense.t. Covenant of quiet enjoymentu. Covenant of general warranty

v. Covenant of further assurancesi. Cover breaches that occur after the deed is delivered (in thefuture).

w. 3 types of deeds:i. General warranty

ii. Special warranty1. Meets statutory requirements2. Containers fewer assurances

iii. Quit claim1. No assurances and no warranties; grantee takes whatever

the grantor has in the property.

x. When a deed provides for usual covenants, this generally construes ageneral warranty deed.i. Generally includes covenants for seisin, right to convey, against

encumbrances, quiet enjoyment, general warranty.y. Covenants for seisin and right to convey:

i. Very similar / synonymousii. Guarantee to the grantee that the grantor owns the estate which the

deed purports to convey.z. Covenant against encumbrances

i. Property conveyed – no outstanding mortgages, liens, or restrictions - -easements or profits – that does not diminish valueof property.

aa. Covenants of quiet enjoyment and covenants of general warrantyi. Construed to have the same legal effect

ii. Defend the grantee-covenantee against all legal claims by grantor or third parties who would evict the grantee-covenantee.

bb. Covenant for further assurancesi. Not used much in the US

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ii. Undertaking on the grantor’s part – to do something on his or her part to perfect the grantee’s title.

cc. None of the covenants protect the grantee against trespass or regression of a mere wrongdoer.

dd. First 3 covenants cannot run with the land b/c they are personal choses in

action when they are breached at the time the deed is delivered:i. Covenants for seisinii. Covenants for right to convey

iii. Covenants against encumbrancesee. But these 3 covenants (quiet enjoyment, general warranty, further

assurances) run with the land and can be enforced by remote grantees thattake through the covenantee grantee.

ff. Recovery:i. Covenants are contracts of indemnity and they indemnify grantee

for his or her loss.ii. Damage must be shown for recovery by the grantee.

XXVIII. Estoppel by deed (Quiet title doctrine)gg. If a person executes a deed purporting to convey an estate in land whichhe does not have, or does not own, or he purports to convey land of alarger estate which he does not own, then according to this doctrine, thatestate passes to the grantee.

hh. Ex: O is the record title owner of Blackacre. A, mistakenly believes thathe is the owner of the property. A conveys a deed to B, purporting toconvey title to Blackacre. A mistakenly believes he is the owner andmakes this deed to B. After the A-B deed transaction-conveyance, O doesconvey Blackacre to A. In jurisdiction that follows the doctrine, once Omakes conveyance to A, then title inures to the benefit of B by application

of estoppel by deed or after quiet title doctrine.ii. Subsequent BFPsi. A makes a conveyance to B.

ii. O is the owner of the property. Thereafter, O conveys to A. If Agoes ahead and after acquiring that deed from O, A conveys the property to C and C knows nothing about the A-B transaction – Bdid not record and C is viewed as a BFP who paid considerationwithout any prior notices, the majority rule is that a subsequentBFP prevails over that prior grantee (i.e., B) in a majority of states.

XXIX. Recording Acts jj. Provide a means for giving constructive notice of ownership.kk. 3 basic types:

i. Pure race1. Whoever records first, prevails.

ii. Pure notice1. The subsequent BFP who pays value without notice of any

prior conveyances or prior notices of encumbrances on the property prevails, whether or not she records first.

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iii. Race-notice1. Combines essential features of pure race & pure notice.2. Race-notice – subsequent BFP who paid value without

notice but records first prevails.ll. Typical notice statute

i. “Conveyance of an estate in land shall not be valid against anysubsequent purchaser for value, except such persons having actualnotice of it, unless the conveyance is recorded.”

1. Ex: On Jan. 1st, O conveys Blackacre to A. A does notrecord. On Jan 15th, A conveys Blackacre to B who givesvaluable consideration and has no notice of the conveyanceto A. B prevails over A and B is a BFP without notice of conveyance.

mm. Only BFPs are protected under notice and race-notice statutes.i. Mortgagees are also protected – treated as BFPs – and they, too,

are protected.

XXX. Mortgagesnn. Interest in land created by a written instrument providing security for anoutstanding debt.

oo. Whenever you take out a mortgage on property, the mortgagor (personwho takes out a mortgage with the bank), you execute the promissory notewhich is evidence of the debt; you also execute the mortgage (the securityof the debt).

pp. The mortgagor is the property owner who takes out the mortgage with the bank.

qq. The bank is viewed as a the mortgagee.rr. Ex: You take out a $500,000 mortgage on your property with the bank.

ss. Multistate:i. Mortgagor conveys property to a buyer (sells). Exam: Whether the buyer is going to be personally liable to the bank for the mortgagedebt still outstanding.

ii. Look to the deed of conveyance from the mortgagor to the buyer:1. If the deed states that the buyer assumes the mortgage, then

the buyer is personally liable to the bank for that mortgagedebt.

2. On the other hand, if the deed is silent as to the existence of the mortgage or if the deed states that the land is subject tothe mortgage, then the buyer is not liable personally to the bank for that mortgage debt.

3. In personam actiona. Is the buyer personally liable for the mortgage debt?

i. He is if the deed contains language that the buyer assumes the mortgage debt.

4. In rem actiona. If the buyer should fail to make mortgage payments,

then the bank can foreclose because its security

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interest is an in rem type interest and the bank can bring a foreclosure action where there is a default by the buyer.

tt. Mortgages come within the recording statutes and they must be recordedin order to protect a mortgagee.

i. If a mortgage is not recorded and a mortgagor conveys property toa buyer without notice of that mortgage in a notice or race-notice jurisdiction, a buyer can take the property free and clear of themortgage if it’s not recorded by the mortgagee. **

uu. Equity of redemption (statutory redemption)i. The mortgagor takes out a $500,000 mortgage on the property with

the mortgagee. The mortgagor then defaults. After the default and before the mortgagee brings a foreclosure action, the common law permits the mortgagor to pay off the mortgage debt and thenreacquire clear title to the property.

ii. But, mortgagor may default and then the mortgagee institutes a

foreclosure action, there’s a foreclosure sale, and the mortgageesales the property to Baker for $700,000. After the foreclosuresale, the mortgagor then attempts to repay the bank the $500,000he owes the bank. This is known as statutory redemption. In moststates, by statute, most states permit the mortgagor ….most statesgive the mortgagor 6 months to 12 months after the default…torepay the bank the mortgage indebtedness even though there’s been a foreclosure sale and title has passed to Baker. Mortgagor can still pay off debt to bank – mortgagor is entitled at his electionfor redemption against mortgagee for value of land or the proceedsfrom the foreclosure sale **.

iii. State that follows statutory redemption – if the mortgagor owed$500,000, bank sold property for $700,000 and then mortgagor pays off the mortgage indebtedness, the mortgagor would beentitled to receive from the bank the difference from theforeclosure sale or the $200,000.

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Documents

Comprehensive PMBR Property LEB