Professional Documents
Culture Documents
CONCEPT OF PROPERTY
Private Property
Occupation theory occupation or possession of a thing justifies legal protection of that thing
Labor theory moral right to ownership and control things through labor
Contract theory private property is the result of a contract between individuals and the community
Natural rights theory natural law dictates the recognition of private property
Social utility theory law should promote maximum fulfillment of human needs and aspirations; legal
protection of private property better promotes this
Sunstein
Bundle of Rights
Bundle of rights or expectations in tangible or intangible things that are enforceable against third parties,
including the government
Right to Possess/Occupy
Right to Use
Right to Exclude
Limitations
o Police/health official warrants
o Businesses have to adhere to public accommodation and discrimination statutes
SH trespasses on Js land
J brings action for trespass, wins because as possessor, he has the right to exclude
Right to Alienate/Transfer
Right to Destroy
Equitable Title
ADVERSE POSSESSION
Actual Possession
Engage in acts associated w/ possession of RE
o Have to use land in reasonable manner compared to other land in the vicinity
Actual possession depends on the context
Open and Notorious
TO supposed to benefit from O&N because it puts TO on notice
If TO has actual notice, doesnt need O&N
TO must be able to notice that something prejudicial to his interest is going on if he was there
Chaplin v. Sanders
Sanders used part of Chaplins land for their trailer park
Sanders gave actual notice, so court didnt need to decide O&N but
o Court said O&N satisfied anyway because residents treated land as their own
Court also decided hostile/state of mind issue claimants subjective intent irrelevant
Exclusive
Continuous
Hostile/Adverse
APs must be in privity with each other in order for predecessors possession to benefit the successors
possession
Privity:
o Written deed
o Intestate succession
o Wills
o Oral transfer
Very hard to prove
Depends on the context who the parties are and what their traditions are
Color of Title
Some sort of writing (doesnt have to be true or valid) that purports to say the holder has title
Debate over state of mind: if holder of title knows its false, its not a claim of right under the moral
position
If you have color of title, you can expand the area under which you can claim AP to more than what you
actually possess
Some states decrease the statute of limitations if AP has color of title
Legal Remedies
Ejectment
o Available to person who is out of possession and asserts a better right to possession than the
current possessor
o Owner records decree of ejectment to establish that current possessor is a trespasser
Trespass
o Another person enters upon owners land or otherwise disturbs owners possession of land w/o
permission or consent
o Successful claim entitles P to actual damages resulting from trespass and to injunctive relief
against future trespass
o Punitive damages may also be awarded
Whole hog AP
o tract of land with TO and AP
o AP possesses for long enough period of time so AP claims he owns the whole property as against
the TO
Boundary line disputes
o More common
o Two TOs with encroaching land
Future Interests
AP takes the land as he finds it so can only acquire title against those who have the current right of
possession
Mortgages are similar to future interests because if foreclosure occurs, the title passes to someone else
AP and Government
AP in California
AP of Chattels
Abandoned
o Owner no longer wants to possess it and voluntarily gives up all right, title, and interest
o Belongs to finder of property against all others, including former owner
Lost
o Owner unintentionally and involuntarily parts with property and does not know where it is
o Typically use the Armory Rule to determine who it belongs to
Mislaid
o Owner voluntarily puts property in a certain place and then overlooks or forgets where the
property is
o Finder of mislaid property acquires no rights
o Right of possession belongs to owner of premises on which the property is found, against all
others but the TO
o Property found in the scope of employment goes to the employer
o Assumption that TO may eventually recall where he placed it and return for it
Treasure trove
o Coin or currency concealed by owner usually means buried
o Must be old
o Belongs to finder against all but the TO
o Policy arguments (NELSON thinks these are silly)
Wants to get coin back into circulation
o Dont want to give property to trespassers so most courts will try to find the property as mislaid
Popov v. Hayashi
Ball = abandoned property
Ball bounced out of Ps glove
H got physical possession
Maybe P wins if you use some form of constructive possession
P had pre-possessory interest that compromised Hs claim of full possession
Court couldnt make up its mind so ordered the ball sold and the proceeds split evenly
NELSON thinks P got the shaft and no one got any justice
Pierson v. Post: First to Possession
Post in pursuit of fox fox goes up a tree
Pierson shoots the fox and takes physical possession
Actual v. constructive possession
o If its actual, Pierson clearly wins
o If its constructive, Post might be able to win
Court ruled that hot pursuit was not enough and gave it to Pierson
Policy Implications
Worried about slippery slope argument
Dont want to discourage active participation
Lost/Mislaid TO Exists
Armory Rule
Finders Statutes
Encourages or requires finder to take object to some county office and deliver possession of the chattel to
the government
Government advertises finding of the chattel which theoretically gives TO notice
Typically 1-2 years of notice phase
o If TO never shows up, finder gets the property
o Cuts off title in TO
Incentive is to encourage disclosure: if the TO doesnt show up, finder gets to keep it; if TO does show up,
finder gets reward
Benjamin v. Lindner Aviation
Benjamin finds money in wing of airplane owned by bank through foreclosure sale
Court ignores finders statutes and gives the money to the bank as owner of the premises on which it
was found, in this case an airplane
Chappell Case (distinguishes from Benjamin)
US seizes car from drug dealers, finds money in it, takes the money, sells the car
Chappells buy it, mechanic fixing it up finds more money in it (doesnt belong to him because he is an
agent of the Chappells)
US says they own the money
Court rules the money is abandoned, not mislaid because drug dealers arent going to return for the car
Outlier Cases
Hannah v. Peele
Trespassers
Anderson v. Gouldberg
Anderson (trespasser) unlawfully cuts down trees, takes them to a saw mill
Gouldberg steals logs from a saw mill
A sues G for value of lumber
Two clear wrongdoers, court holds for A the first wrongdoer/possessor
Law of Salvage
Maritime law
Salvor raises sunken vessel/takes goods off of it
Gives that person a lien on the vessel
o Court determines what the value is of the salvage operation
Salvor gets to collect that money by selling ship or goods at public auction
If lien is not paid by owner, lien will be foreclosed
If its unowned, courts apply common law of finders Armory Rule
If ship is not in open waters, ship being embedded in the land means government is a possessor and gov
wins a lot of those cases as being prior/first possessor
Private v. public
The more private, the stronger the equities favor the landowner
The more public, the stronger the equities favor the finder
The more the land is open to the public in general, the weaker the landowners claim is
o Inviting people onto the landnot trespassers
o Expectation of owner who is opening land up to the publicreasonable owner wouldnt expect to
acquire an ownership interest
o Implicitly giving up property rights by inviting people in
Place where finder or TO has a special relationship to the owner of the premise
Claimant
TO
Prior possessor normally favors prior possessor (esp. if abandoned)
Loser (of the property) usually prevails if TO or PP
Landowner in possession owns FSA and in possession of the land
o Very strong position
o Still might lose
Tenant in possession
o Clearly mislaid, doesnt go to finder
o Depends on how long tenant has been there
Employer/employee
o Cant just use a but for argument focus on whether employee is in the scope of employment
Agent of the finder favors the finder
Trespasser almost always loses
o Might win in the states that have treasure trove doctrine
Invitee/licensee
o Cant use trespasser argument
ESTATES IN LAND
Estates vs. Non-Estates
Estate
Interest
Interest
Terminate
Fee Simple
Absolute (FSA)
none
n/a
cannot terminate;
duration is unlimited
Fee Simple
Determinable (FSD)
to A so long as
to A until...
possibility of
reverter
the grantor
automatically upon
occurrence of condition
Fee Simple on
to A on condition that
Condition
to A but grantor may
Subsequent (FS-CS) reenter if...
power of
the grantor
termination or right
of reentry
executory interest
(EI)
someone other
than grantor
automatically upon
occurrence of condition
Fee Tail
Remainder if so
stated, otherwise
reversion
third party if so
by the death of the
granted,
holder of the fee tail
otherwise, grantor with no surviving
bodily heirs (lineal
descendants)
Life Estate
to A for life
remainder if so
to A for life, remainder to B stated, otherwise
to A for the life of X
reversion
third party if
remainder is
granted, otherwise
the grantor
Woods v. County
Woods granted land for memorial hospital and county stopped using it as a hospital
No FS-D was created because deed lacked limiting language and particular circumstances under which
FS-D might expire
No FS-SCS was created because deed did not clearly state an intent of the grantors to retain
discretionary power
Court goes through checklist of title options and decides FSA
Typically not used much today because it violates Rule against Perpetuities
Future interest in third party that gives title automatically on occurrence of condition
Restrictive covenant
o Contract/promise with no effect on the title
o Could be an enforceable promise that could result in injunction or damages but doesnt affect title
Precatory interests
o Merely expresses a wish
o Not legally enforceable
Right of entry much easier to inadvertently waive by not doing anything in a reasonable amount of time
Most courts say possibility of reverter not capable of being waived because its automatic
Giving permission may waive possibility of reverter
Could convey possibility of reverter to present possessor to effectively give them full ownership
CA Statute on FS-DFS-SCS
In re 88 Acres
Fee Tail in US
o
o
o
o
o
Life Estate
LT has right to possess, to rents and profits, and to use and enjoyment
LT does not have power to exercise dominion (to treat land as if he is actually owner in FSA)
Conflicts of interest may occur between LT and future interest holder
Life estate pur autre vie is inheritable
People dont usually buy and sell life estates bc they would need to get a physical exam of the person who
owns the life estate to see if its worth their time and money
Sometimes life estates are transferred involuntarily via foreclosure and execution sale
o Buyer at execution sale will own life estate measured by first owners life
Life estate defeasibles exist where O would have future interest of reversion AND possibility of
reverter/right of entry
Leaseholds
Characteristics
Example
possibility of reverter
reversion
Possibility of Reverter
Right of Entry
Reversion
Name of Interest
Characteristics
Example
remainder
executory interest
Remainder
Must comply with all four rules
o Must be created at same time and by same doc that creates prior estate(s)
o Must follow a freehold estate but cannot follow FS (usually life estate or term of years or fee tail)
o Must not have capacity to cut short a prior estate
Must take possession only on natural termination of prior estate
o Must be no built in time gap between termination of prior estate and taking of possession by
remainderman
May create an estate in any interest (FSA, FS, life estate, etc)
Executory Interest
Restraints On Alienation
Express Unlimited Restraints
Courts generally uphold broad restrictions on life estates bc theyre limited in time
Disabling restraints are bad even on life estates; forfeiture restraints are ok
Restrictions on Leaseholds
Usually an interest in life estates when life tenant and future interest holder are at odds
Not seen as much in leaseholds bc there are already provisions in the lease regarding waste
Holder of present interest not supposed to unreasonably damage holder of future interest
Owner of defeasible fee only charged for waste in limited circumstances bc his interest may go on forever
Future interest holder may collect damages or issue an injunction
Voluntary Waste
Ameliorative Waste
Waste that will make the property more valuable
Brokaw v. Fairchild
Brokaw wants to tear down fathers residence and build profitable apt building
Fathers grant mentioned my residence multiple times
Future interest holders didnt want apt buildings
Court decided that grantors intent was for building to remain a residence so Brokaw couldnt tear it
down
Melms v. PBR
PBR believe they own the property next door in FSA, but they really have a life estate pur autre vie
Tear down big mansion next door bc everything around it is industrial
Melms sues PBR for damages for tearing the house down
PBR made rational mistake and has no liability for damages because tearing down the house made the
land more valuable
Permissive Waste
CONCURRENT INTERESTS
CONCURRENT ESTATES
Joint Tenancy
o Cannot sever or change JT by the use of a will, no matter if its pre or post creation of JT
If OA, B, C as JT w/ right of survivorship and AR
o B and C are still JT to each other and R is TinC w/ 1/3 interest
o Right of survivorship effective between B and C
o When R dies, her 1/3 interest will go though her estate
In JT each person has an equal share and only natural humans can own in JT (not corporations)
Classic way to sever JT is a deed to a third party which converts interest to TinC
Deeding to third party can be secret, no notice needed to other JTs
Traditionally, JT had to satisfy these but courts have been moving away bc theyre too formalistic
Some courts now look at intent to sever
If any unity is broken, JT severed
Time: JTs have to have gotten interest at the same time
o A cannot convey deed to himself and another in JT bc then they didnt get the interest at the same
time or by the same document
Title: JTs must have derived interest from the same doc/instrument
Interest: JTs must have same percentage of interest
Possession: JTs must have right to possess the whole thing
Porter v. Porter
Right of survivorship does not arise out of marriage relationship absent either an express intent to
sever or actions inconsistent with the continuation of JT, a divorce judgment alone will not sever JT
Formalistic approach: divorce created TinC, H gave up right to possession
Intent approach: intent is not to sever, agreement was only temporary
Tenancy in Common
Partition
Split of concurrent estate when parties cant get along
Can be in kind (physical split) or by sale (monetary split)
Ark Land v. Harper
A&B dont want to sell their land to ArkLand but the other co-Ts already did
ArkLand wants it bc theres coal under it
Presumption was partition in kind to overcome it, party who wants partition by sale (ArkLand) must
show:
o Property cannot be conveniently partitioned in kind
o Interests of one or more parties will be promoted by the sale
o Interests of the other parties will not be prejudiced by the sale
A&B will get more money for it if its a partition by sale
Economic value of property is not exclusive test for determining whether to partition in kind or by sale
o Court must consider that interest of all TinCs
Physical partitions dont work when you have improved real estate (house or building on the property)
because you cant split up a house
Partition by sale goes to the highest bidder
TinC with highest fraction of interest most likely to buy property bc he would owe less
Partition also available for JT
Restraints on Alienation and Promissory Restraints
Multiple co-Ts can put promissory restraint on partition
Promissory restraint on partition does not restrict alienation so not as severe as restraints on alienation
Each party can sell their own interest but they cant have a partition by sale and force the others out
Alienation would be if each party could alienate the entire property, but here each party can only alienate
their own interest
A restraint on alienation would be a promise not to transfer the property voluntarily or involuntarily (but it
might get upheld if its reasonable in terms of time)
Owelty and Allotment
Owelty
o Only relevant for partition in kind
o Hard to split land up equally in value
o Pay the party whose land is less valuable
Allotment
o No sale of the land at all
o Not partition by sale or in kind
o If court believes one co-T should end up owning the land, court will determine value of fractional
interest and give it all to the T they like and that T pays off all the others in their fractional
amounts
o Functions like a deed transfer
Mortgages
Mortgage provides security for a loan (see real estate sale section)
Title Theory
Lender gets legal title until loan is paid off
Mortgagor keeps equitable title
Ruins unity of title, so JT severed under formalistic approach
Lien Theory
Most states are lien theory states (including CA)
Legal and equitable title remains with debtor
One JT getting a mortgage does not sever JT bc he still has legal title
Brant v. Hargrove (AZ)
AZ is lien theory state
Court decides deed of trust falls under lien theory just like mortgages do so unilateral mortgage by one
cotenant did not sever JT
N&A own as JT and both sign mortgage to Brants
All mortgage transferred to Brants was a lien so N&A did not sever unity of title
As interest goes to N on As death so Brant can get mortgage settled on full value of the property bc
court decides As signature was forged and it was a unilateral mortgage
Deed of Trust
Intra-Tenant Disputes
Remedies
Rental
In in-T collecting rents, out-T has right to rent or fair market value
If in-T is splitting rent and out-T isnt contributing, in-T can get contribution against out-T
Improvements
In-T cant get contribution for improvement to which out-T did not consent
Court will allow improving in-The benefit of that improvement in partition sale
Proving Ouster
In most cases, ouster is not a physical act but a co-T who is in exclusive possession and by words or acts
evidences a claim of separate ownership
Acts that can give rise to ousters
o Possessors did more than simply make improvements and pay property taxes
o Possessors took unequivocal steps which were inconsistent with and exclusive of the rights of coTs not in possession
Rented premises to different people
Cutting and selling timber
o Acts were open and public to make occupation so visible, hostile, and notorious as to presume
notice to the non-possessor
Fiduciary Duty
Hypo:
o A and B are co-T and taxes dont get paid
o B purchases property at foreclosure sale; kicks A off
o Majority rule says co-Ts have fiduciary duty to each other so each co-T had the duty to pay taxes
o A can give B of what he paid at the sale to restore As ownership
Fiduciary duty limited to when title is derived from one document and co-Ts are related
If the debt has nothing to do with the real estate (like its for credit cards) then no fiduciary duty exists
COMMUNITY PROPERTY
Wills
Intestate Succession
Surviving spouse gets all com prop and a percentage of separate property (or all of it if there are no kids)
Divorce
Com prop split 50/50, each spouse keeps their separate property
Control
Most states give joint control of all com prop
o Personal property: either spouse may act with respect to outside world on behalf of the couple
o Real estate: one spouse can act unilaterally and convey it to a third party
But third party should always get signatures bc they dont know for sure whether its
separate property or not
Rights of Creditors
Version One: divide marital property into proportions the court deems just
Version Two: equitable apportion of all the property, com or sep
LANDLORD TENANT
NATURE AND CREATION OF LEASEHOLDS
Lease
Residential Leases
IWH means L has almost all the duty of repair/maintenance
Governed by URLTA and common law
Commercial Leases
No IWH
T bears all obligation of ownership under net lease
Governed by common law
License
Statute of Frauds
Oral lease cannot be enforced unless its for less than a year
Minimum elements lease has to contain to not be oral:
o Name of parties
o Rent price
o Specify property description
o Term (length) of lease
o Must be signed by party to be charged
Where parties operate under contract/lease that is unenforceable under SoF, if either party has engaged in
significant detrimental reliance, court might be inclined to take down the bar of SoF
Tenancy
Doesnt create a contract but says that now the party that wants to enforce can use the oral terms to try to do
so
Creation
Termination
terminates automatically
upon expiration of the
specified term
no notice necessary to
terminate
premature death of T or L
has no impact (their estates
are liable to carry out their
duties)
Periodic
Tenancy
Tenancy at
Will
Duration
Barash
Lawyer rents building and air flow sucks
B sues L
B wants to stay in building and pay no rent until its fixed
o Standard remedy under partial eviction
L not required to provide 24 hour ventilation bc its not in lease
B cant be deprived of something he was never entitled to in the first place so its only constructive
eviction BUT he didnt abandon the premises so he gets nothing
Inequitable for B to claim interference with use and enjoyment of premises while he still remained
on the premises
Adrian
Old T holding over, but new T has right to possession
Damages: can get difference between FMV and contract rent during that time
P wants to sue for lost profits
Court follows English Rule
o Implied that L will make the premises open to Ts entry, legally and actually, when the time
for possession of the lease arrives
American Rule
o Obligation to deliver legal right to possession but not actual physical property
Actual Eviction
L takes over part of premises and denies T the use of a portion of the premises crucial to the use of the
whole
Traditional common law rule is that lease terminates and T doesnt have to pay rent even if T remains in
possession of part of the leased premises
Sometimes T is completely relieved of rent obligation and sometimes only partially relieved
Useful to commercial T, not residential
Constructive Eviction
L so substantially interferes w/ Ts use and enjoyment or causes or allows inhospitable conditions to persist
that T is justified in vacating premises
T must prove:
o Ls wrongful conduct
Common law duties giving rise to wrongful conduct are very limited
Cant make fraudulent representations
Must disclose hidden physical defects
Duty to maintain common areas
Wrongful conduct usually arises out of not following terms in lease
o Caused a substantial interference with Ts use and enjoyment of leased premises
o T gave notice to L and allowed reasonable time for L to cure the defect
o T vacated property within a reasonable time after giving notice and L failed to cure the problem
Ls failure to maintain basic services to premises often serves as basis for constructive eviction
T can sue for difference between contract rent and suitable market rent OR difference between FMV of
other premise and suitable market rent
T has duty not to injure the value of Ls reversion with two exceptions
o T may make changes as are reasonably necessary to use the premises in the way contemplated by
the parties to the lease
o L not liable for damages resulting from normal wear and tear
L can waive Ts liability without impeachment from waste
Remedies and damages
o L can receive compensation equal to loss or value OR cost to return premises to prior condition
Duty to Repair
At common law, T took premises with all defects and had to live with it
o
o
o
Destruction of Premises
Termination of Lease
Under common law, T not released from obligations under lease
Most states now put risk of sudden destruction of premises on L
In case of improvements, T has option to terminate the lease
Duty to Rebuild
At common law, L had no obligation to rebuild after sudden casualty loss
Now different jurisdictions deal with it differently
leased premises
Privity of estate: both L and T have mutual, immediate, and simultaneous interests in the leased property
o
o
o
T pay taxes
T or L repair premises
L provide basic services
T not to assign or sublet (or not to do so w/o consent of L)
L to renew lease or convey reversion to T
Personal Covenants
Forfeiture restraints ok: generic clause that if T violates any provisions, L has right to terminate by reentry
Once L consents to first assignment, he has waived his right to object to future assignments
Assignments can still be effective without consent bc they still take place
Ls recovery is damages for breach of contract
Growing number of jurisdictions require L to have commercially reasonable basis for withholding consent
to transfer
Reasons to restrict
o L wants to know who is on the premises and if that person is credit-worthy
o Wants to prevent T from selling land at higher price (allows L to capture bonus value)
Rent recapture provisions: gives L the right to collect all or part of any appreciation in the rent charged to
T2
ACS v. Newman
T permitted to sublease w/o Ls consent but not assign
T enters sublease that ends two days before main lease
Court says any length of reversion = sublease
Kendall v. Pestana
Perlitch gets 40 year lease and enters 25 year lease with Bixler
Perlitch conveys remainder to Pestana
Bixler wants to transfer his interest to Kendall
Pestana says no bc Pestana is now Bixlers L
L did not have commercially reasonable objection
This case has something to do with capturing bonus value as well
Tippecanoe
Cant put another grocery store in
Tippecanoe wins bc promise not to lease to other grocery store T&Cs the land so it would violate the
lease covenant
TERMINATION OF LEASES
Landlords Eviction of Tenant in Default
Self-Help
L evicts T for defaulting w/o using judicial process not allowed to use excessive force
Majority rule allows self-help if:
o L has right to repossess leased premises
o Ls exercise of remedy is peaceable
Courts tending to restrict self help
Wofford v. Vavreck
SH not a legal form of action in PA so L has to go through legal process
Policy: SH increases potential of violence
o Judicial obligation to examine leasehold forfeiture best served by judiciary
o Undermines protections inherent in IWH
If L breaches IWH, T is released from obligation to pay rent, BUT L could
use threat of SH to make him pay rent
Harkins
H paying rent by the week to cheap hotel, then stops paying
Ejectment
Oust defaulting/holdover T
Can be a long time before final judgment
Benefits L
Unlawful detainer/rent and possession
Gives L a prompt hearing to evict defaulting Ts
L gives notice to T to cure defect or vacate
If T does not cure, L can pursue summary eviction
Abandonment
Anticipatory Repudiation
One party to a contract is in such substantial default that court assumes he will never perform
P can treat breach as if its anticipatory repudiation of the whole lease
Makes present value of all rent due now, assuming no duty to mitigate
L collects present value but T stays in possession
Hawkinson v. Johnson
Applies anticipatory repudiation to L-T (at least for 8th Cir.)
Limited damages to 10 years, not the full 67 left on the lease
Court decided damages should not extend so far into the future so as to be speculative
Mitigation
SECURITY DEPOSITS
Promise to return security deposit at the end of the lease does not T&C the land so as to burden a successor
L unless main lease says that L is required to use the security deposit to cure damages
Garcia v. Thong
NM is very pro-T
So much damage that it exceeded the security deposit so it didnt seem worth it to L to send the itemized
letter of damages to T
If owner fails to provide itemized list
o Owner forfeits right to hold deposit
o Forfeits right to assert counterclaim
o Liable to T for court costs and attny fees
o Forfeit right to assert independent action for damages
CA Statute
2 months rent max
Used to compensate L for default, used to cover cleaning costs
If L goes bankrupt, Ts claim to security deposit will be prior to any creditors
EASEMENTS
Easement vs. Estate vs. License
Easement: non possessory interest that gives you the right to use someone elses land
o Irrevocable
o Specially enforceable by injunction
o Generally transferable and capable of being abandoned
Estate equivalents
o Perpetual easement = FSA
o Easement for life = life estate
o Easement for years = term for years
o License = TatWill or TatSuff
License: does not imply interest in land
o Mere personal privilege to commit some act on the land without possessing it
o Terminable at will of landowner
o No writing or consideration needed
o Can become irrevocable through estoppel
o Express easement that fails for some reason becomes a license
Millbrook Hunt v. Smith
Hunt got right to hunt foxes on part of the land
Smith tries to say its a revocable license bc landowner kept absolute right to develop the land and
movethe trails
o Obviously not a lease bc its not dealing with a specified space
Hunt says its for a specified period of time which speaks to an easement but also there is a permanent
structure on the land with a lease for 75 years
75 year lease was like consideration for the easement
Definitions
Appurtenant easement
o Benefits the dominant estate
o
o
o
o
When owner of servient estate otherwise authorizes owner of dominant estate to use burdened property for
specific purpose, a license has basically been created
Sometimes courts will enforce the license as an easement by estoppel or irrevocable license
Three elements must be present
o Owner of servient estate consents to dominant estate holders use of servient estate
o Servient estate owner knows or should know the dominant estate owner will materially change his
position, believing the permissive use will not be revoked
o Dominant estate holder, reasonably believing permission will continue, substantially changes his
position by investing in improvements
If courts dont recognize easement by estoppel bc theyre strictly adhering to SoF reqs, courts will find
irrevocable license
Estoppel to revoke a license assumes original grantor granted permission of use by revocable license and
that over the years, party has invested and relied to his detriment on it
Easement by estoppel lasts forever
Estoppel to revoke a license ends when the use ends
Ricenbaw
No express written doc, at most an oral agreement in 1901 for a drain from Ricenbaws land over
Krauss land
Kraus wants the drain off his land
Irrevocable easement created by estoppel applies
o Ricenbaw has relied on, repaired, and maintained the drain to his detriment
Floating Easement
SoF does not require description of easements exact location as long as it can be located on a specific
servient estate
Floating easement does not specify precise location on servient estate which creates title problems
If it truly floats and someone builds on the property, easement holder can put it anywhere
If use of easement is visible, court will determine location based on that
Underlying owner can go to court to force easement holder to locate it
Boyd v. BellSouth
BS owned big lot of land and severed it
Boyds got one piece of land and wanted to use the driveway to the loading dock
BS blocked it
Court determined there was an implied easement
o Unity of title existed
o BS used the road and it was visible
Stinking Sewer Case (Otero v. Pacheco)
Pacheco owns lots and builds houses on them
Conveys one lot to Oteros but had a sewage line running from his house across their house so the houses
used the same pipe and it backed up
Court found that Pacheco had easement by implied reservation as a result of a reasonable necessity that
continues to exist and most people should realize plumbing is hooked up to something so it was visible
and apparent (Nelson disagrees)
CREATION BY IMPLICATION
Nothing oral or written about the easement and parties havent agreed to anything
Use was in place at the time the single parcel of land was severed or divided into adjoining parcels, leaving
one parcel benefitting the other in some way
Emphasizes the parties likely intent at the time of severance
Must show these elements:
o Unity of ownership is severed
o Use was in place before severance
o Use was visible or apparent at time of severance
o Easement is necessary for the enjoyment of the dominant estate
CREATION BY PRESCRIPTION
Elements
Presumptions
Public uses roadway over rural area for years and years and landowner says nothing
Landowner has implicitly dedicated the road to the public by allowing use to continue for a long time
Feloney v. Baye
F claims he has the right to use the driveway by prescription
Hes only used it for 6 years and SOL is 10
Court determines there was a presumption of permission for using your neighbors land to turn around
Policy: prescriptive easements not favored bc they reward trespassers
Swope (AK Case)
Swopes put sign on trail telling people to keep out
Trails Coalition brings action to have trail deemed as public easement by prescription
Trails Coalition represents the public it doesnt have to be continuous use by that organization
Court finds easement by prescription exists
Not adverse use, just an indication of intent by landowner to dedicate the road to the public
Gion v. City of Santa Cruz
Public goes across Gions land to get to the ocean and Gion didnt do anything about it
Government paid for a parking lot over part of it
Court held that Gion, by watching and not doing anything, implicitly dedicated easement in the property
to the public
CA Statutes negate Gion cant have an implied dedication unless you make it express
Delineates the extent of use an easement holder may make of servient estate
Surcharge occurs if scope of easement is violated in any way
Any easement is capable of being expanded by prescription
Location
Intensity of Use
Easement holder can use easement as long as use is reasonably necessary and does not overburden servient
estate
Stresses the original parties intent
Evolves to accommodate reasonably foreseeable changes
Express Appurtenant
Cameron v. Barton
Two issues
o Use of easement changed with tech
o Use of dominant estate changed
Passway is very general term so parties should have foreseen tech changes
Unless easement expressly said no one foresees a change, etc etc
Implied Appurtenant
No written document and not very likely to occur
Frisco Case
Court assumes implied easement
Looks at how it was used in the past and whether new use will create surcharge
Easements by Prescription
No writing unless someone has gone to court to establish prescription in the past
Two issues
o Try to get testimony looking back about how the easement was used when it might have come into
being by prescription
o Does the current use surcharge it?
MA Case
Pool family had prescriptive easement connecting them to main roadway
Started increasing use of the roadway
Court determines how Pools originally used it, assumed it was a valid easement by prescription, and
looked at all the changes
If revolutionary change goes on long enough, it can expand the easement by prescription
May permit others to use the easement as long as the total burden on the servient estate does not
amount to surcharge or misuse of easement
Nonexclusive easements: easement holder has right to use easement but servient owner can authorize
others to use it
o Servient owner retains power to decide how many persons can use the easement
Pasadena Case
Pasadena installed water pipes in their easement
Fee owner grants easement in the same space to D
Court holds Ds pipes can go in because its nonexclusive so grantor had the right to devise
Landowner may make any use of the land which does not interfere unreasonably with easement
MPM v. Dwyer
Unless expressly denied by the terms of the easement, servient owner can go to court to force relocation as
long as such relocation would not materially increase the cost or inconvenience the easement holders use
Goes against majority rule
TERMINATING EASEMENTS
Merging
Two separate owners of Lot 1 and Lot 2 (with easement from 1 to 2) both convey land to A
A has merged the land so the easement disappears
If A conveys Lot 1 to B with no mention of easement, B gets no easement
If A conveys Lot 1 to B and mentions the easement, B gets an easement bc its renewed
If A conveys Lot 2 and doesnt reserve the easement for himself, would have to show implied easement by
reservation (which is hard)
William Bros v. Peck
D owned Lot 1, S owned Lot 2 (express easement over S for cranberry bog) and both deeded land to
Edgewood
Edgewood has no easement bc you cant have an easement in your own land
Edgewood conveys S Lot to WB and D lot to Peck
Peck gets torrens certificate of title that says Peck owns land in FSA together with the easement
WB not subject to easement bc merger destroyed the easement before Peck got title
Torrens office shouldnt have recognized the easement bc the merger doctrine trumps everything
Abandonment
Estoppel to Assert
Easement by Prescription
Hickerson v. Bender
H had appurtenant easement over Bs land
B claims Hs predecessors abandoned but they could only prove nonuse which wasnt enough
BUT Hs predecessors failed to object to obstruction so its clearly conduct thats inconsistent with use
of the easement
Court says doing nothing is conduct AND there was AP so easement was terminated
Once you close on an earnest money contract that violates SoF, you cant undo the whole transaction- its
over
If earnest money contract is entirely oral, its not enforceable BUT
Buyer can get his money back (restitution) so to that extent the law recognizes that there is a contract
Part Performance
Can allow enforcement with no writing
Payment of all or part of purchase price
Going into possession of the realty
Making substantial improvements
Some courts say acts must point unequivocally to contracts for the sale of land
Burns v. McCormick
Come live with me on the farm, take care of me till I die, the land will be yours
Purchase price = care until death
Purchaser seeks specific performance
Seller defends via SoF didnt unequivocally refer to sale of land
Burns tried to show that he relied to his detriment on the agreement
Johnston v. Curtis
Valid earnest money contract in writing to sell a house
Problem is that modification to contract has to be in writing also
Parties agreed to oral modification of purchase price after appraisal
Part performance:
o Buyer moved in
o Made a payment to the seller
Buyer can recover 10k difference in sales price with J and what it actually sold for
USE OF DEEDS
Bryant v. Clark
15 annual installments as balanced at 6%
Court says it violates SoF bc it doesnt specify when and the amount of each installment so its
unenforceable
Types of Deeds
Warranty Deeds
Most common
Puts grantors personal liability on the line
Warrants the deed for himself and all his predecessors
Provides the most protection for grantees (assuming grantor has money)
Conveys and warrants or grants, conveys, and warrants
Can list encumbrances as exceptions the warranties do not cover
Quitclaim Deed
Grantor conveying to grantee everything he has but doesnt warrant anything
Government always uses quitclaim deeds
Chase Federal v. Schreiber
Old lady conveys deed to conman
o Consideration = love and affection
Heirs argue there was no consideration so its not valid
o Love and affection is only valid consideration between two related parties
This case changes the law to say you dont need consideration at all for a deed
Good for charities bc they get land conveyed as gifts all the time
USE OF ESCROWS
Earnest Money Contract
Escrow
Earnest money
o Assuming valid earnest money contract, seller is allowed to take earnest money but cannot also
sue for damages
o Buyer sometimes adds language to EMC saying it is in lieu of all other remedies for seller
o Buyer basically owns an option and can walk away and only lose EMC
Loss of bargain rule for damages
o Difference between contract price and FMV at the time of breach
o Problematic bc seller needs to prove their house is worth less than the contract price to get
damages
Specific performance
o Pretty much just amounts to payment of the purchase price
Defects
Every state has recording office to help buyers determine if they are getting good title
Seller promises that title is marketable aka free from reasonable doubt
Marketability of title is implied in every contract unless parties expressly provide for otherwise
If title is not marketable, its a breach by seller and buyer can either get EM back with certain add ons or
sue for damages or specific performance with abatement for value of defect
Marketability is main protection buyer has before deal closes
Once deal is closed, buyer loses ability to assert title as not marketable (bc hes accepted it)
History/Types
Balloon Mortgage
Short term mortgage with MR only making interest payments until loan came due
If MR could not pay off entire principal, MR had to ask lender to renew the loan or attempt to refinance
with another lender
Due on sale clauses: if MR transfers interest, lender can accelerate mortgage so its all due
Amortized Mortgage
Allows MR to repay loans over many years by making monthly principal and interest payments
Monthly payment is set so that only a portion is needed to cover the interest that has accrued since the last
preceding payment
Remainder of each monthly payment applied toward outstanding principal balance
Interest that accrues each month will be less than the interest in the preceding month
Different Actors
Originators
o Deals with borrower
o Banks
o Thrifts
o Mortgage broker takes your financial info and finds you a lender
o Mortgage banker borrows a lot of money short term from banks
Secondary markets
o Quasi-governmental
o Fannie Mae and Freddie Mac
o Preferential rates when borrowing from federal reserve
o Securitizers
Insurers
Foreclosure
Strict Foreclosure
Foreclosure by Sale
CA says you cant get deficiency judgments unless you foreclose judicially
Power of Sale Foreclosure
Junior Mortgages
Purchaser gets property free of junior mortgages bc valid foreclosure of senior mortgage will wipe out
junior mortgages
Junior lenders require higher interest rates bc it is a riskier investment on their part
MR gives 300k mortgage to E1 (Chase) which foreclosed and P bought
MR also gave E2 a 75k loan
Two purposes of foreclosure:
Available for 6-12 months after foreclosure in about half the states
Mortgage foreclosed, borrower still in possession
Borrower can tender to P what P paid at the sale plus accruing interest and taxes
Mechanics Lien
Anyone who works on real estate to improve it and is not paid has the right to file a mechanics lien in the
recorders office
Payment to general contractor not deemed to be payment to subs
o So if GC doesnt pay subs, homeowner wouldnt know
o Homeowner should insist the GC supply lien waivers from all subs
Mechanic has from the date of last work to 3-6 months to file the claim
Lien claimant still has time to file claim if you close on a house within the time frame above
Becomes problematic when youre purchasing a new development
RECORDING ACTS
NC, LA, DE
Whoever records first, wins
Very efficient, less to litigate
SP just has to pay value and record first
Notice Statutes
Paying Value
Notice
Mortgage Hypo
States split evenly over whether judgment lien creditor is protected by recording acts
When judgment is recorded in any county where debtor has real estate, it becomes a lien on that real estate
at the time its recorded
MR gives 300k to E1 thats unrecorded
MR gives 40k to JL
50% states hold that JL did not pay present value
If there is an execution sale and P is BFP (paid present value) it cuts off E1 if he hasnt recorded before the
sale or if P doesnt know about E1
In CA, JL gets benefit of recording acts if they record it (deemed to have present value even though its an
antecedent debt)
DEED COVENANTS
Come into play when real estate transaction has closed and the deed is delivered but the title is determined
to be deficient after closing
Eviction can be constructive or actual
CA present covenant SOL is 6 years from the date of the delivery of deed
Future Covenants
Hypos
One
o
o
o
o
o
o
o
o
o
o
o
Two
o
Brown v. Lober
Lober conveys warranty deed to Brown
Brown enters contract with coal company but it turns out he only owns 1/3 of the coal
Brown sues Lober on the covenant of seisin (Lober didnt have good title to 2/3 of the coal)
10 year SOL on present covenant had already run so Brown was SOL
Then Brown wanted to sue on covenant of warranty or quiet enjoyment bc SOL wouldnt run until there
had been an eviction (and hes arguing constructive eviction)
The court says thats BS, theres no eviction
Title Insurance
TIs policy is insurers promise that, if the title is not in the condition described by the policy on its
effective date, the insurer will attempt to fix the problem or will indemnify the insured for the resulting loss
Secondary market wont purchase titles without TI, even in torrens system
So a lot of properties are torrens + TI (which gets expensive)
Lenders always require title insurance
If sold on the secondary market, TI goes along with the sale
Involved in every land transaction in CA
Owners Policies
Lenders Policies
Exceptions
TI Obligations
TI company has the option to cure the defect once theyre sued
If youre displaced from your real estate, they pay you the full policy amount
Most common defects
o Mechanics liens bc if they insure against them but the lien is recorded after the policy is issued,
that sucks
o Plant search errors
o Forgeries
o Missing property taxes
New Additions
Lost Grant Theory for Prescriptive Easements
V unpopular
Can compare PE to AP or can use lost grant theory
Creates a legal fiction
Assumes that in theory, in the past, the person using the land had a writing that gave him the right
to use the land but now the writing is gone
If underlying owner protests to use bc the writing is gone, it just enhances the notion that use is
adverse
Evidentiary Theory and Estoppel by Reliance Theory of Part Performance
Evidentiary theory
o Need to provide evidence for the 3 acts of part performance (payment, possession,
improvements)
o Some courts need 2/3 some need all 3
o Either party can use acts of performance to their advantage
o If SOF is meant to serve as needing writing to evidence the contract, then other forms of
evidence should suffice
Estoppel by reliance theory
o Acts of detrimental reliance carried out by party seeking enforcement
o Acts of detrimental reliance by seller
Moved out of house and bought another one
Unique modifications to satisfy buyer
o Broad range of actions could constitute reasonable reliance
Presumption of Permission courts find EbyE or Irrevocable License
Presumption of Hostility courts find AP
Disabling Restraints and Forfeiture Restraints in Leases
Disabling: lease is void or terminated if assignment/sublet occurs without permission
Not being void or terminated and being limited in scope (like only for assignment, not sublease)
indicate forfeiture restraint
Court interprets in favor of alienability
Acceleration Clause and Anticipatory Repudiation
Under acceleration clause, premises have to be left open for T
o Can sue for all damages/rental value that T owes up front
If not, rely on AR
o Repudiation of lease implies T not going to comply with lease terms
Duty to Mitigate
Cant make sweetheart deals (renting out to friends and family for a reduced price)
Cant treat the property negatively
Penalties for not mitigating
o Might not be able to recover at all
o Court awards difference in what reasonable mitigation WOULD have brought vs. what
they got
If L does nothing,
o Must leave premises as is
o May not lease it out
If L rents it out for same price or higher:
o Sues T for unpaid rent until new T found
If L sues out for less than original rent
o Sue T for difference in rent + unpaid rent
Surrender
Used if L not going to bring an action to recover against T
Rejecting surrender
o Send letter to T stating surrender is rejected and that any action taken is on Ts behalf
o Send to last known address to put T on notice
If L enters premise and changes them in any way without sending letter, it would look like an
acceptance of surrender
Abandonment of Easement
Can be express or implied
Implied abandonment requires unequivocal acts which show an intent to abandon
Silence + any number of acts (blocking the easement, establishing another easement elsewhere,
failing to maintain the easement) can evidence abandonment
Abandoned easement returns to the SO
Easement Surcharge
Look at purpose and quantity
Easement by Estoppel or Irrevocable License
With reliance and consistent use, party can acquire easement or license that is essentially
irrevocable
Doctrine of Equitable Conversion
Buying and Selling Property