MY NOTES

Property Fall 1998 Outline - Professor Carbone

Adverse Possession: a means of requiring property by long, uninterrupted possession. When one possesses of property longer than the statute of limitations, the possession is open and notorious with actual entry giving exclusive possession, is continuous and uninterrupted, and is hostile, then that person is said to be in adverse possession of the property.

Requirements

Running of Statute: the statute of limitation must be expired before AP can be claimed.

statute of limitations begins to run when the claimant goes adversely into possession of the true owners land

Open and Notorious Possession:

open: such as the usual owner would make use of the land;

notorious: must be sufficiently apparent to put the true owner on notice the trespass is occurring
examples:

look like real owner
farmlands require fencing, cultivation, or erection of buildings

Actual Entry Giving Exclusive Possession:

actual entry: an entry sufficient to give the true owner notice that a trespass is occurring which triggers the cause of action: starts the statute of limitations running

constructive possession of part: (enter in good faith, occupy comparative significant portion, one defined parcel) actual possession and entry of a portion of land described in the deed is sufficient adverse possession of the whole

exclusive possession: a possessor is not sharing with the true owner or the public generally

two or more individuals can acquire title by adverse possession as tenants in common

Continuous, Uninterrupted Possession: possession continue uninterrupted throughout the statutory period

degree of occupancy: such that the average owner would make use of that type of property

can be used seasonally if that is how the true owner would use - not considered a break in continuity

abandonment: the intentional relinquishment of possession

if the possessor abandons the property for any period of time, continuity of adverse possession is lost

tacking: an adverse possessor may tack onto his own period of adverse possession any period of adverse possessors in interest, provided there is privity between the adverse possessors

privity: a possessor voluntarily transferred to a subsequent possessor either an estate in land or physical possession
tacking is used to establish continuous possession for the statutory period
abandonment: tacking not permitted where one adverse possessor abandons even though another enters immediately

Hostile Possession: possession is without owner's consent and the possessor makes a claim of right to the property

objective test for claim of right (majority view): actions of the possessor must look like they are claims of ownership (CA, NY)

subjective test (minority): the adverse possessor must have a good faith belief that he has title

color of title: a claim founded on a written instrument, unknown to the claimant is defective and invalid

most states do not require color of title
entry under color of title is an advantage in all states

boundary line dispute: when one mistakenly believes a strip of land along his boundary is his

objective test (majority view): possessor's mistake is not determinative; the possessor is necessarily holding a claim or right if his actions appear to be a claim of ownership

Maine doctrine (minority view): if the possessor is mistaken as to the boundary and would not have occupied or claimed the land if he had known the mistake, the possessor has no intention to claim title and adversity is missing

agreement on boundaries: most courts will fix ownership as per the agreed line, provided that it is shown there was original uncertainty as to the true line, the agreed line was established, there has been lengthy acquiescence in the agreed line by the adjoining owners and/or their successors

Extent of land acquired by adverse possession

without color of title: possessor's claim only extends to such part of the land as he actually occupied or controlled in a manner consistent with ownership of such premises

with color of title: doctrine of constructive adverse possession applies

enters in good faith

occupies a significant portion of the property as compared to the whole
tract described in the deed is recognized as one defined parcel of land

Land That Cannot be Adversely Possessed

government land (federal, state, or local) is exempt from operation of the statute of limitations

Landlord Tenant Law: a blend of property law and contract law because a lease is both a conveyance of an estate in land and a contract containing promises

Nature of leasehold: an estate in land in which the tenant has a present possessory interest and the landlord has a future interest (reversion)

tenancy for years: an estate that lasts for some fixed period of time which may be more or less than a year

creation: usually is created by a written lease

termination: no notice is needed to bring the estate to an end because it states at the outset when it will end

periodic tenancy: a tenancy for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice

creation:

by express agreement: written in lease
by implication: if the lease has no set termination, but does provide for payment of rent at specific periods
by operation of law: if tenant holds over, or lease is invalid

termination: notice is required for termination; if notice of termination is not given, the lease automatically extends for another period
length of notice under common law:

half a year in order to terminate a year to year lease
if the period is shorter than one year, notice of termination must be given equal to the length of the period, but not to exceed six months
notice must terminate the tenancy on the final day of the period

in CA usually a month notice is required to end a periodic tenancy

tenancy at will: tenancy of no fixed period that endures so long as both landlord and tenant desire

creation: arises from a specific understanding between the parties that either party may terminate the tenancy at any time (must be an express agreement to a tenancy at will)

termination: may be terminated by either party without notice. Terminates by operation of law if:

either party dies;
tenant commits waste;
tenant attempts to assign the tenancy;
landlord transfers his interest in the property; or
the landlord executes a term lease to a third person.

holdover tenancy: when a tenant rightfully in possession wrongfully remains in possession after termination of the tenancy, he is called a tenant at sufferance: he is a wrongdoer and liable for rent

hold-over doctrine: permits the landlord to hold the hold-over tenant to another term or evict the tenant

Selection of Tenants

Civil Rights Act of 1866: bars racial or ethnic discrimination only

applies to all property transfers
remedies: did not provide any effective remedies but courts have fashioned some: injunction against the landlord or seller, or damages

Fair Housing Act of 1968: unlawful to refuse to sell or rent a dwelling to any person because of race, color, religion, or national origin. Later amended to prohibit discrimination on basis of sex, persons with children, and handicapped persons

exemptions: private clubs, dwellings for religious organizations, a person renting a room within their own house

Tenant Duties (and Landlord Remedies)

tenant must pay rent: at common law, rent is due at the end of the leasehold term; leases usually contain a provision making rent payable at some other time

when rent accrues: at common law rent does not accrue from day to day; however most states have statutes that provide if a leasehold terminate before the term originally agreed upon, the tenant must pay a proportionate amount of the agreed rent

rent deposits: if considered a:

security deposit: the land lord must return it after recoverable damages

bonus: a future rent payment, then most courts permit the landlord to retain it after the tenant has been evicted

not to damage premises (waste): a tenant cannot damage - commit waste on - the leased premises. Restatement (modern trend): the tenant is entitled to make changes in the physical condition of the leased property which are reasonably necessary in order for the tenant to use the leased property in a manner that is reasonable under all the circumstances. Types of waste:

voluntary waste: results when the tenant intentionally or negligently damages the premises

permissive waste: tenant is not responsible for regular wear and tear resulting from normal use of the premises

no duty to make substantial repairs
tenant does have a duty to prevent damage from the elements (wind and water tight)
if tenant fails to do so he is liable for any resultant damage but not for the cost of repair

ameliorative waste: tenant is not permitted to make substantial alterations to leased structures even if the alteration increased the value of the property: tenant is under obligation to return the premises in the same nature and character as received

tenant is liable for cost of restoration
modern exception: courts will permit a change in the character of the premises so long as the change increases the value, is performed by a long term tenant, and reflects a change in the nature and character of the neighborhood

not to disturb other tenants: absent a covenant in a lease, there is no common law duty of a tenant not to make noise or otherwise disturb other tenants

usually in residential apartment leases: tenant cannot substantially interfere with the enjoyment by other tenants of their apartments

not to use the property for illegal purposes: if the tenant uses the premises for an illegal purpose, and the landlord is not party to the illegal use, the landlord may terminate the lease or obtain damages and injunctive relief

occasional unlawful conduct: duty is only breached if illegal conduct is continuous

landlord remedies: terminate lease, recover damages

landlord remedies:

tenant on premises but fails to pay rent: evict, or sue for rent

tenant abandons: do nothing or repossess

landlord does nothing: let premises lie idle and collect the rent from the abandoning tenant

landlord must mitigate damages (majority view): make reasonable efforts to relet to a new tenant (if landlord fails to do so, but could have, recovery against tenant is reduced accordingly)
traditional view: landlord may let the premises lie idle and collect the rent from the abandoning tenant, unless the tenant tenders an acceptable substituting tenant

landlord repossesses: tenants liability depends on whether the landlord has accepted a surrender of the premises

reletting or use of premises for landlord's own profits constitutes acceptance of surrender and the abandoning tenant is free from any rent liability

rent acceleration clause: provides the rent for the balance of the term shall become payable in full upon the tenant's default in payment for rent or some other obligation

if a landlord elects to accelerate rent, the landlord cannot terminate the lease and demand possession also - the tenant must be treated as a purchaser of the term for which payment is demanded (to allow otherwise, would constitute double recovery)

self help: most states consider forcible entry by landlord a crime; in such jurisdictions landlord is liable for damages to the tenant if he resorts to self help

some states allow reasonable force
some states allow landlord to enter only by peaceable means (changing the locks is forcible and not peaceable); very difficult to find self help measures that are not forcible, but peaceable; for this reason, self help is almost never allowed

Landlord Duties (and Tenant Remedies)

to deliver possession: statutes in most states require the landlord to put the tenant in actual possession of the premises at the beginning of the leasehold term

tenant remedy: a tenant is entitled is entitled for damages if landlord fails to deliver possession

example: if tenant had to find more expensive housing in the interim

not to interfere with tenant's quiet enjoyment: implied in every lease is a covenant that the landlord will interfere with the tenant's quiet enjoyment and possession of the premises; can be breached through:

actual eviction: when the tenant is excluded from the entire leased premises - obligation to pay rent is terminated

partial actual eviction: when the tenant is physically excluded from only part of the leased premises

partial eviction by landlord relieves tenant of obligation to pay rent for entire premises
partial eviction by third person: tenant is liable for the reasonable rental value of the portion he continues to possess

constructive eviction: if landlord fails to provide some service he has a legal duty to provide which makes the premises uninhabitable, tenant may terminate the lease and may seek damages

it must be the landlord's actions that cause injury
conditions must be very bad so court can conclude premises are uninhabitable (ex: flooding, no heat, no elevator service)
if tenant does not vacate within a reasonable time, showing premises where uninhabitable, he has waived the right to do so

to provide habitable premises (implied warranty of habitability): standards are more favorable to tenants than in constructive evictions, and the range of remedies is much broader:

standard: reasonably suitable for human residence

when defects or dangerous conditions are known to the landlord and not easily discoverable by an ordinary inspection, the landlord has a duty to disclose the defects

waiver by tenant: a waiver is not permitted, as it would be against public policy to permit it

remedies:

tenant may move out and terminate lease (as in constructive eviction)
tenant may make repairs directly and offset the cost against future rent obligations
tenant may reduce or abate rent to an amount equal to the fair rental value
tenant may remain in possession, pay full rent, and seek damages against the landlord

retaliatory eviction: landlord is not permitted to terminate the tenant's lease in retaliation if tenant reports code violations

Assignments and Subleases

assignment: if the instrument purports to transfer the lessee's estate for the entire remainder of his term it is an assignment, regardless of its form or the parties' intention.

privity: assignee comes into privity of estate with landlord (liable to each other)

duty to pay rent: although assignee is liable for rent, original tenant also remains liable (unless landlord expressly releases original tenant)

sublease: if the instrument purports to transfer the lessee's estate for less than the entire term, even for a day less, it is a sublease, regardless of its form or of the parties' intention.

common law: retention of a reversion and retention of a right of entry is necessary for a sublease.

reversion: period of time within the duration of the leasehold when the tenant will again be entitled to possession

ii. right of entry: landlord has right of entry if condition broken

duty to pay rent: sublessee is not personally liable to the landlord for rent (there is no privity of contract between the landlord and sublessee)

privity: no privity with landlord so sublessee is not personally liable for rent to landlord

distinctions:

intention controls: a few cases have rejected the common law rule that retention of reversion and right of entry is necessary to create a sublease and instead look to the intent of the parties

lump sum transfer: transfer of the lease for a lump sum indicates an assignment. Ernst v. Conditt

third party beneficiary rule: if an assignee or sublessee expressly assumes the covenants of the master lease, he is directly liable to the landlord as a third party beneficiary of the contract between the tenant and his assignee or sublessee

consent: landlord cannot unreasonably withhold consent to either a sublease or assignment in commercial leases - Kendall v Ernest Pestana, Inc

determining reasonability: landlord may look at factors such as financial responsibility of the proposed new tenant, suitability of the building, but LL cannot consider general economic advantage (LL cannot refuse consent as a way to get T to terminate the lease)

common law (older view): landlord can withhold consent for any reason whatsoever

types of provisions:

express provisions: written out in lease

default provision supplied by law: govern when the lease is silent on specific issues

mandatory provisions: cannot be changed by parties

Rent Control

constitutionality: form of price regulation; have been held to be constitutional as it serves a legitimate public purpose
must provide landlord with a just and reasonable return on property
landlord cannot evict a tenant in order to rent to a new tenant at the market rate; leases must be renewed unless there is a good cause for eviction

arguments against rent control:

have to restrain other terms of contract if you are going to have rent control
rent control gets rid of need for landlord to keep a good reputation
rent control also makes a shortage of housing
rent control locks people into where they are. Over time this means the apartment they are in becomes something they don�t need, but don�t want to leave as they can not get a good deal elsewhere
RC has seized part of the value of the building, and turned it over to the tenant that happened to be there when the RC started
It redistributes some of the wealth
One more problem: how do you get new apartments built? Makes it unattractive to build new buildings.
Solution to this is either subsidies, or pass a law saying new buildings are exempt from RC. Problem here then is how does mayor make a binding contract with builder saying that RC will not be applied to that building in the future.

Estates in Land

Fee simple: absolute ownership; potentially infinite duration; no limits on its inhieritability; cannot be divested (cut short); cannot end upon the happening of any event, future interest in grantor

creation of a fee simple: must say "to A and his heirs"

heirs: persons who succeed to the real property of an applicable state; a living person has no heirs

issue: another form of heirs; means children, grandchildren, and all further descendants
most states do not require words "and his heirs" but recommended to use them

there are three types of fee simple. All are defeasible fee simple; have potential of infinite duration unless some event happens; often found in deeds restricting use of the land

fee simple determinable: limited that it will automatically end when some specified event happens; the fee simple automatically reverts to the grantor

traditional language used: words of limitation are often used (so long as, until, while)

fee simple determinable may be transferred, but remains subject to the limitation no matter who holds it
grantor has a future interest of a possibility of reverter

CALIFORNIA and Kentucky have abolished fee simple determinable; this language creates a fee simple subject to condition subsequent

fee simple subject to condition subsequent: fee simple that does not automatically terminate but can be cut short (divested) at the grantor's election when a stated condition happens

created by first giving grantee an unconditional fee simple and then providing that the fee simple may be divested by the grantor or his heirs if a specified condition happens

traditional language used: to A, but if X event happens; to A, upon condition that if X event happens; to A, provided, however, that if X event happens, the grantor retains a right of entry

courts prefer this type as forfeiture is optional; general policy of courts is to avoid forfeiture

fee simple subject to an executory limitation: a fee simple that is automatically divested in favor of a third person

forfeiture interest is in grantee, NOT grantor
ends automatically when condition happens

Fee tail: lasts only as long as the grantee or any of his descendants survives, and is inheritable only by the grantee's descendents

traditional language used: "to A and the heirs of his body"

future interest: reversion, remainder,
most states have abolished the use of fee tails

minority hold a fee simple to construe a life estate
majority hold that a fee tail is a fee simple

Life estate: an estate that has the potential duration of one or more human lives

measurement: usual life estate is measured by the grantee's life
life estate can be defeasible (determinable, subject to condition subsequent, or subject to an executory limitation)

waste: conduct by the life tenant that permanently impairs the value of the land or the interest of the person holding title:

affirmative waste: when life tenant actively causes permanent injury

permissive (involuntary) waste: when the land is allowed to fall into disrepair, or the tenant fails to take reasonable measures to protect the land from the elements

ameliorating waste: when the principle use of the land is substantially changed - but the change increases the value of the land

Future Interests: a nonpossessory interest capable of becoming possessory in the future; not a presently possessory interest - only a presently existing interest

two basic groups: a) future interests retained by grantor - must be either a reversion, possibility or reverter, or right of entry, b) future interest created in a grantee

Reversion: a future interest left in grantor after he conveys a vested estate of lessor quantum than he has

lessor quantum: a lessor estate in the hierarchy
all reversions are vested interests - to created a reversion it is only necessary that there be a possibility of the interest becoming possessory
not subject to the Rule Against Perpetuities

Possibility of Reverter: a future interest remaining in the grantor when a fee simple determinable is created

modern law: allows transfer (alienability) of possibility of reverter; viewed as a property interest

common law: viewed it as a mere possibility of becoming an interest and therefore was not a thing that could be transferred

Right of entry: when grantor creates an estate subject to condition subsequent and retains the power to cut short or terminate the estate, the grantor has a right of entry.

created only in grantor - cannot be created in a grantee
most states do not allow transfer (alienability) of right of entry; in some states the mere attempt destroys the right

Remainder: future interest created in grantee that is capable of becoming a present possessory estate upon the expiration of a prior possessory estate; the land "remains away" instead of reverting to the grantor; never cuts short the preceding estate, but waits until the preceding estate expires

essential characteristics:

can be created only by express grant in the same instrument in which the preceding possessory estate is created - cannot arise by operation of law
must follow a fee tail, life estate, or term of years - cannot follow a fee simple interest of any kind
must be capable of becoming possessory on natural termination of preceding estate; a remainder cannot divest a preceding estate prior to its normal expiration. Any interest divesting or following a fee simple must be an executory interest, not a remainder

classification of remainders: either vested or contingent

vested remainders: a remainder created in an ascertained person and not subject to a condition precedent; have the right to immediate possession; vested remainders are alienable inter vivos and devisable by will; three types of vested remainders:

indefeasibly vested remainder: the holder of the remainder is certain to acquire a possessory estate at some time in the future

vested remainder subject to open: it is vested in a class of persons, at least one of whom is qualified to take possession, but the shares of the class members are not fixed because more persons can subsequently become members

most common: a remainder that will "open up" and let more children in; one can always have more children until they die

vested remainder subject to complete defeasance: vested subject to being divested by operation of a condition subsequent or vested subject to defeasance by an inherent limitation of the estate in remainder

contingent remainders: if it is limited to either an unascertained person or subject to a condition precedent

no certainty that a contingent remainder will ever become possessory
the person is not yet born or cannot be determined until the happening of an event
remainders subject to condition precedent: an express condition which must occur before the remainder becomes possessory
whether a condition is precedent or subsequent depends on the words of the instrument.

the test: if the conditional element is incorporated into the description of, or into the gift to the person taking the remainder, then the remainder is contingent; but if, after words giving a vested interest, a clause is added divesting it, the remainder is vested

Rule in Shelley's Case: if (i) one instrument (ii) creates a freehold in land in A, and (iii) purports create a remainder in A's heirs (or in the heirs of A's body), and (iv) the estates are both legal or both equitable, then the remainder becomes a remainder in fee simple in A.

been abolished in most states
does not apply to executory interests
whatever estate is created and the remainder merge creating a fee simple
all American cases applying this rule have involved a life estate

Doctrine of Worthier Title: when an inter vivos conveyance purports to create a future interest in the heirs of the grantor the future interest is void and the grantor has a reversion

modern doctrine: apply doctrine to personal property as well as to land; it is a rule of construction, not a rule of law
doctrine only applies if future interest is to be given to grantor's heirs or next of kin. Does not apply if limited to children, issue
CALIFORNIA has abolished this doctrine - the heirs of O take the future interest limited to them under the instrument

Executory interests: interest created in a third party; divests the interest of another

No springing interests or shifting interests under common law
modern law allows shifting and springing interests under the Statute of Uses passed in 1536

springing executory interest: a future interest in a grantee that springs out of the grantor at a date subsequent to the granting of the interest, divesting the grantor; follows a gap in possession or divests the transferor

shifting executory interest: a future interest in a grantee that divests a preceding estate in another grantee prior to its natural termination; divests the interest of another transferee

any interest that follows a fee and is held by a third person is an executory interest
precede these interests

Rule against perpetuities: no interest is valid unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest

alternate definition: an interest is void if there is any possibility, however remote, that the interest may vest more than 21 years after some life in being at the creation of the interest

perpetuities period begins to run: at the time the interests are created

must vest: it must be shown that the interest created in the transferee must vest, regardless of what might happen, within the lives in being plus 21 years; is vested when:

the interest becomes a present possessory estate; or
the interest becomes an indefeasibly vested remainder or a vested remainder subject to total divestment

if at all: the interest does not have to take within the perpetuities period in order to be valid; many contingent remainders never vest because the condition precedent to their taking is not satisfied

lives in being: any lives to be used to show the validity or invalidity of an interest, but no lives are of any help unless they are somehow connected with the vesting of an interest

measuring lives: used to show the validity or invalidity of interests
the number of measuring lives must be reasonable

applies to: contingent remainders and executory interests, vested remainders subject to open (future interests created in 3^rd person); does not apply to vested remainders or future interests in the grantor (reversion, possibility of reverter, right of entry)
rule is directed at the creation of contingent interests that might vest in the distant future; if there is any possibility that a contingent interest will vest too remotely (more than 21 years) the contingent interest is void from the outset
the rule is a rule of logical proof: person claiming the gift must be able to show without a shadow of a doubt there is no possibility of it vesting too remotely
to solve these types of problems look to relevant lives (the person who enables you to prove that the interest is valid). Relevant lives are persons who can affect vesting of the interest

Concurrent Estates

Tenancy in common: a form of concurrent ownership wherein each co-tenant is the owner of a separate and distinct share of the property, which has not been divided among the co-tenants (each owner has a separate undivided interest in the whole)

right to possession: each tenant has the right to possess and enjoy the entire property - the co-tenants can come to any agreement about possession they desire

no right of survivorship: when a tenant in common dies, his interest passes to his devisees or heirs - it does not go to the surviving tenant in common

alienability: a tenant in common can sell, give, or otherwise dispose of undivided share in the same manner as sole owner could

modern law: whenever a conveyance is made to two or more persons who are not husband and wife, they are presumed to take as tenants in common and not as joint tenants

Joint tenancy: a form of concurrent ownership wherein each co-tenant owns an undivided share of property (as in a tenancy in common) and the surviving co-tenant has a right to the whole estate - there can be many co-tenants; the tenant who lives the longest takes the property

creation:

conveyance: must created by deed or will, or by joint adverse possession

four unities requirement:

unity of time: interests vested at the same time
unity of title: interests aquired by the same instrument
unity of interest: interests of the same type and duration
unity of possession: interests give identical right to enjoyment

modern law: many states have abolished rule that a conveyance by a sole owner to himself and another as joint tenants created only a tenancy in common

an owner can create a joint tenancy in herself and another by a single deed even though the unities of time and title are not satisfied
under modern law joint tenancies are disfavored: must be a clear expression of intent such as: "to H and W as joint tenants with a right of survivorship"

when two or more persons take property by a single conveyance a tenancy in common, not joint tenancy is assumed (unless clearly expressed)

severance: can be destroyed at any time

common law: automatically severed if one of the four unities was severed

modern law: same as common law, but if one of the four unities was severed unknowingly, the courts will look to intent of parties

conveyance by joint tenant: of undivided interest destroys the joint tenancy so that the transferee takes the interest as a tenant in common and not as a joint tenant

conveyance to self: common law required one person to convey to another person and not to herself (use of a strawman); no longer required - can be conveyed in a single deed

options courts have in splitting up co-tenancies:

partition the land: an equity proceeding in which the court physically divides or sells the common property, adjusts all claims of the parties, and separates them

partition sale: if physical partition is not feasible or in the best interest of the parties, the court will order the property sold and the sale proceeds divided equally among the co-tenants

ouster: an act by one co-tenant that deprives another co-tenant of the right to possession

if one co-tenant ousts another co-tenant, he must pay the ousted tenant his share of the reasonable rental value of the property

there is an ouster when an occupying co-tenant refuses to admit another co-tenant into possession
also occurs if co-tenant denies title of another co-tenant
if the occupying co-tenant refuses to pay an appropriate rental value demanded by a co-tenant out of possession
remedies: bring suit to collect share of reasonable rent or suit to partition the property