estates and future interests outline

Estates and Future Interests:

William the Bastard in 1066 conquered England that yielded a system called Estates and Future Interests.

Present Estates 4 types:1) Fee Simple Absolute2) Fee Tail3) Defeasible Fees4) Life Estate

Fee Simple Absolute: Absolute ownership. Created “To A” or “To As and his heirsBest estate anyone could hope for, why?

1. Freely devisable (capable of passing by will)2. Freely descendible (passes to one’s heirs if one dies intestate, i.e. w/o will)3. Freely alienable (freely transferable inter vivos, i.e. transferable during one’s

lifetime.Ask: Is there an accompanying future interest? If on the exam O conveys Blackacre to A, or alternatively to A and his heirs, and you’re asked to say if there is any accompanying future interest, the answer is NO.

Any Future Interest? NOFee Tail: Product of history, virtually abolished in US today. The Fee tail depended on the grantors use for very specific uses: “To A and the heirs of his body.” This meant that when the fee tail was recognized the fee would pass to grantees lineal blood descendants no matter what. This was rooted to keep land all in the family and preserve family dynasties. It would be accompanied by a future interest. “To A and the heirs of his body” could be accompanied by a reversion in O or a remainder in some third party.Defeasible Fees*: There are three kinds of them:

1. Fee simple determinable (created by “To A so long as…”; “To A during…”; “To A until…”

a. Grantor must use clear durational language (To A during, To A unless, To A so long as…)

b. If the condition is violated, forfeiture is automatic. c. Thus Fee Simple determinable is a harsh form of defeasible fee. In face

of condition breached, the grantee suffers a very automatic forfeitureAny Future Interest: The Future Interest is: Possibility of Reverter in the Grantor.

Example: After choking on popcorn from Orville Redenbocker, Frank Sinatra designated his house as follows: From Frank Sinatra to Orville Redenbocker so long as popcorn is never made on the premises. Redenbocker’s present interest is thus a fee simple determinable. Frank Sinatra has the possibility of reverter. The nexis between present and future interest: FSDPOR – Fee Simple Determinable Possible of Reverter, also Frank Sinatra Didn’t Prefer Orville Redenbocker.

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2. Fee Simple Subject to Condition Subsequent : “To A, but if X happens, grantor reserves right to re-enter and retake.”

a. Grantor uses clear durational language and b. carving out right to re-enter: To Rachel, but if she makes coffee then

Grantor reserves the right to re-enter and retake.c. Thus, FSSCS is not automatically terminated, but it can be cut short at

the grantor’s option If the condition occurs. Thus, FSSCS is not as harsh as fee simple determinable. FSSCS is the Bobby Brown of the Defeasible Fees. He wrote a song about this type of estate, Bobby Brown the grantor, noticing that a condition of FSSCS had been violated, realized that he had a choice to reenter and retake: “It’s my prerogative.”

d. The future interest is “Right of Entry” i.e. the power of termination. The Grantor’s Interest is the “Right of Entry/Power of Termination.

3. Fee Simple subject to Executory Limitation: “To A, but if X event Occurs, then to B.” For example to Justin Bieber, but if Justin performs music on the premises then to Joe Jonas. Thus Jonas has an executive interest. This estate will be automatically forfeited if the condition occurs. But this time the interest is to someone OTHER than grantor. If grantee forfeits the estate the someone benefits other than O.

Any Future Interest: The Future Interest is the Shifting Executory Interest. 4. Life Estate: This is an estate that must be measured in explicit lifetime terms,

never in terms of years: “O conveys to A, for life.” [If it’s only for a number of years then that’s a “term of years estate” – which pertains to landlord/tenant.]

a. A has a lifetime interest, and O has a reversion (O’s future interest) – at the end of A’s lifetime then the estate goes back to O or if O’s dead then to O’s heirs.

b. Variation on Life Estate theme – Life Estate Pur Autre Vie. A life estate measured by a life other than the grantees. “To A for the life of B.” For example: “To Madonna for the life of David Letterman” Life Tenant and Waste DoctrineLife Tenant must not commit waste, which means the life tenant must not do anything that would hurt the future interest holders. The life tenant’s duties go hand in hand with the doctrine of waste. Maxim: Life Tenant must not commit waste. Property law means business here – don’t want value of property decreased because of conduct of life tenant.1. Voluntary Waste, synonymous with affirmative waste: Overt

Conduct that Causes a drop in value. Here, you’re looking for willful acts of destruction. So life tenant may have feisty temper and kick in one of Blackacre’s walls, then she has committed waste

2. Permissive Waste, synonymous with neglect: When land is allowed to fall into disrepair. Life tenant is failing to keep up the premises. The Life Tenant must maintain Blackacre. Maintaining means keeping it up. So if there’s a leak over kitchen sink, then

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you’re obligation is not to replace roof, but to patch in leaking holes. If you fail to do this, then you’re responsible.

3. Ameliorative Waste: Life tenant must not engage in conduct that will enhance the premises value, unless all future interest holders consent. For example, if you turn a house into a Sony Movieplex w/o permission, then you’ve committed ameliorative waste. What property law is trying to do here is recognize sentimental value. It is saying Blackacre is a beloved homestead, and you want to maintain future interest holder’s expectations that it will remain as such and not unilaterally transformed by a mere passer-through.

Any Future Interest? If future interest is held by O then it is a reversion, but If held by a third party, then the future interest is a remainder.

Future Interests: Future Interests Capable of Creation in O the Grantor.

1. The Possibility of Reverter: accompanies only the fee simple determinable. (FSDPOR – Fee simple Determinable walks hand in hand with the Possibility of Reverter)

2. The Right of Entry/Power of Termination: It accompanies only the fee simple subject to condition subsequent. (The Bobby Brown of Future Interests)

3. The Reversion (the catchall): It arises whenever the grantor has something left over when creating a present estate. It’s a default answer choice whenever you intuit that grantor has given an estate of lesser quantum than what she started with then she has a reversion. For example, if I own a fee simple absolute and I convey to you a life estate, then the leftover is a reversion. This is any leftover that the grantor has left over for himself or his heirs as a result of a conveyance of lesser quantum/magnitude than she started with.

Future Interests Capable of Creation in Transferee:1. Remainders:

a. The “patient” future interest that waits for the preceding estate to end before it becomes possessory/before it takes. REMAINDERS NEVER FOLLOW DEFEASIBLE FEES. The remainderman is kind/patient and waits his turn. If, by contrast, there is a defeasible fee where left over someone else stands to benefit by an interruption then that person does not have a remainder. Example: To A for Life then to B. B has a remainder. B as remainderman is patiently waiting for life estate to come to its conclusion. Remaindermen do not cut short anyone else’s estate.

b. Remainders are either vested or contingent. c. Vested in two circumstances:

(1) when created in a known taker AND

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(2) not subject to a condition precedent. So remainderman will have swagger and be confident knowing that he has no strings attached to his estate. “To A for life and then to B.”

d. Remainders are contingent when (1) Created in as yet unknown takers. [E.g. “To A for Life and

then to B’s first child.” If B has no children then B has a contingent remainder. This is a remainder created in a taker not yet ascertained.] OR

(2) When subjected to a condition precedent. [E.g. “To A for Life and then if B graduates from college, then to B. A has a life estate, and, if B is still in high school. Because B hasn’t graduated from college, B has a contingent remainder. The interest is contingent because B hasn’t satisfied a condition precedent. Rules that Limit Contingent Remainders. Feudal times didn’t like contingent remainders, so sovereign decided that contingent remainders shouldn’t be encouraged. So several common laws arose:

A. Rule of Destructibility: A contingent remainder would be destroyed if it was still contingent when the preceding estate ended. Example: “To A for Life and then to B if B has reached age of 21 then to B. If A dies and B is only 19, then at Common Law then B’s interest would be destroyed. TODAY, however, the rule of destructibility has been abolished. Today the future interest would be allowed to persist no matter that it is still tentative.

B. The Rule in Shelley’s Case: Applies in one setting only: “To A for life and then to A’s heirs.” If A is alive then the present and future interests merge, giving A a fee simple absolute. The reason for this is to promote alienability. Today this has been abolished. It’s tested more in terms of history. TODAY, To A for Life and then to A’s heirs, then A has a life estate and A’s heirs have a contingent remainder. It’s contingent because we don’t know who A’s heirs are until A’s death.

C. Doctrine of Worthier Title: It applies when O who is alive tries to create a future interest in his own heirs. Eg. “O who is alive conveys to A for life and then to O’s heirs.“ Two results

a. If doctrine did not apply then A has a Life Estate, and O’s heirs have a contingent remainder. It would be contingent remainder because we can’t ascertain who O’s heirs are until A dies.

b. Instead thanks to Doctrine of Worthier Title, the contingent remainder to O’s heirs is void.

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Instead, thanks to Doctrine A has a Life Estate, and O has a reversion. This allows O and A to team up and sell the estate. Otherwise alienability would be limited. TODAY, the Doctrine of Worthier Title still exists today.

Lecture II.

Vested Remainders: If a remainder has been created in a known taker then the taker is not subject to a condition precedent. Ask: What category of vested remainder is this. Once you know the remainder is vested then you have to know which of 3 types of vested remainder the remainderman has:

1. Indefeasibly vested re mainders: The best kind of remainder to have. A remainder is indefeasibly vested when its taker is known and not subject to any conditions: “To A for life and then to B.” This is indefeasibly vested remainder if B is known and born.

2. Vested remainder subject to complete divestment . This is synonymous with vested remainder subject to complete defeasance. How do you know you have this? Remainderman exists, he is not subject to a condition precedent, but he is subject to a condition subsequent. A condition subsequent is some eventuality that if it happens then it will divest the remainderman of his estate. “To A for life, then to B, but if B dies under age 25 then to C.” If A is alive and B is only 20 then B has a vested remainder subject to complete divestment. Thus, if B dies under 25 then B’s estate loses everything. B’s heirs won’t be able to take. C’s heirs will take.

3. Vested remainder subject to open . The remainder is vested in a group, category, or class of takers, at least one of whom is eligible to take. ”To A for life then to B’s children.” A is alive. B has two children, C and D. Thus, C and D have vested remainder subject to open. Whenever you see a group/class gift then ask whether this class opened or closed. A class is open when others can still join. A class is closed when no one else can join. The class is closed when any member can demand possession. Thus, when A dies, then the class closes because then any of the children could demand possession.

If you’re a remainder then you’re waiting patiently for current estate to run its course. You’re not waiting for any forfeitureIf you stand to benefit by another’s benefit by another’s forfeiture then you have an executory interest. Executory interests take effect by cutting short another, or benefitting from another’s forfeiture. Executive interests are either shifting or springing.

1. Shifting executory interest always follows a defeasible fee, and cuts short someone other than O, the grantor. “to A, but if B returns from Canada next year, then to B.” Thus, B has a shifting executory interest. B is capable of interrupting A. B is not a remainderman because remainders never follow defeasible fees. Remainders are patient and typically follow life estates. A has a fee simple subject to B’s shifting executory interest.

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2. Springing Executory Interest cuts short O, the grantor. E.g.: “O conveys to A if and when he marries.” A is not married. A has a springing executory interest. Thus, once A marries then she has the power to cut off O.

3. RULE AGAINST PERPETUITIES: Certain future interests are void if there’s a chance that the interest might vest more than 21 years after the death of a measuring life. It is a compromise position. It is a compromise between idea that there should be no tying up land by elites, and the idea that land is power and that the elites have right to their power. Land may be tied up but a period of uncertainty may not be tied up for a certain amount of time (21 years) after the death of a certain measuring life. Won’t tie up land for duration of measuring life and additional 21 years. Technique for applying Rule of Perpetuities:

Step 1. Classify Future Interest: RAP applies only to certain contingent remainders, executory interests, and vested remainders subject to open. These are the only interests subject to RAP attack. RAP NEVER applies to future interests in O (e.g. possibility of reverter, right of entry, reversion). The RAP won’t apply to indefeasibly vested remainders or to vested remainders subject complete defeasance.

Step 2. Once you’ve identified future interest: Ask what has to Happen for a future interest holder to take?

Step 3. Find a measuring life. A measuring life is the life of someone who is alive at the time of conveyance and whose life or death is relevant to the condition occurring.

Step 4. Ask: Will we know for sure within 21 years of the death of that measuring life if the future interest holder can take? If yes, then the gift is good. If the answer is no, and we don’t know for sure, then the gift is bad.

Example: “To A for life and then to A’s children.” You’re told that A is alive and she has no children.”

Step 1. Step 1. This is a contingent remainder because we don’t know who A’s children are, we’re waiting for taker to become ascertained.

Step 2. Step 2. What has to happen for future interest holder to take: A must die leaving a child.

Step 3. Step 3. Find measuring life: In this instance A’s life is the measuring life.

Step 4. Step 4. Will we know w/in 21 years of A’s death whether there’s a taker or not? Yes we’ll know at the instant of A’s death if she left behind a child or not.

Co-Ownership/Concurrent Estates: More than one Person/Entity Owns Blackacre at Same time.There are three types of concurrent estates:

1. Joint tenancy: two or more own w/right of survivorship

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2. Tenancy by the Entirety: This is a marital interest btwn married partners w/right of survivorship.

3. Tenancy in Common: Two or more own w/no right of survivorship.

Joint TenancyTwo key features of joint tenancy.

1. Right of Survivorship means when one joint tenant dies, his share goes automatically to the surviving joint tenants. So if we were watching Vh1 divas tour w/three reuniting, the three singing the anthem to this would be Destiny’s Child: “I’m a survivor – I’m going to take yours and going to keep yours.” Joint tenants enjoy a remarkable entitlement vis-à-vis each other. Right of survivorship tells us that when one joint tenant dies his share going right to the living.

2. Second Major Point about JT is that a joint tenancy interest is alienable and you can sell it during your lifetime. But it is not devisable or descendible. It is not devisable or descendible because the share goes automatically to the survivors.

Joint tenancy is thus very efficient. How do you create one? Four unities:Unity 1: Time – Joint tenants have to take your tenancy at the same timeUnity 2: Title – buy the same instrument/titleUnity 3: With identical interestsUnity 4: With the Right to possess the whole

In addition, the grantor must CLEARLY state the right of survivorship

How do you sever a joint tenancy? 1. Principally by sell. A joint tenant can sell her interest during her lifetime –

even secretly. Once a joint tenant sells her share, she severs the joint tenancy w/respect to the joint tenancy as to the seller’s interest. This means that the buyer is a tenant in common.

Example: O Conveys Blackacre to Phoebe, Ross, and Monica w/right of survivorship. Each owns 1/3 plus right to enjoy the whole. We have the four unities here. If Phoebe sells her interest to Chandler. Thus, we ask what is the state of the title. Answer: Pheobe’s act severs the joint tenancy as to Phoebe’s interest. Phoebe’s unilateral sell to Chandler severs her interest. Chandler not taking at same time/same title. Ross and Monica take 2/3 as joint tenants. Ross has 1/3 as tenant in common. Ross then dies leaving behind heir Rachel. What’s the state of the title. Monica takes Ross’ share. Thus, Monica holds 2/3, and Ross holds 1/3. And they are now tenants in common. Rachel takes nothing. As Ross’s heir, Rachel takes NOTHING.

2. The other way to sever a joint tenancy is Partition. Partition is the means available for owners to dissolve their relationship. So, if our joint owners

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have come to end of the road and it’s time for dissolution. What are three types of partition?

i. One way is Voluntary Agreement – a peaceful way to end the relationship. When seeking a partition, the parties can always voluntarily agree.

ii. Another way is Parition in Kind: a court action for physical division of Blackacre. If in the best interest of all then court can physically divide the area. this works best when Blackacre is rural, spreading acreage that lends itself to this.

iii. Another variation is forced sell. The court can order that Blackacre be sold and the proceeds be divided up, if it’s in the interest of all parties. The proceeds would then be divided up proportionally.

Tenancy by the EntiretyA marital interest, and only exists between married partners who enjoy the right of survivorship. Two salient features:

1. What is the most salient feature is that it is a fiercely protected type of ownership. “You can’t touch this”: Creditors of only one spouse cannot reach this tenancy. It’s a marital interest and fiercely protected.

2. Another point is that NEITHER tenant acting alone can defeat the right of survivorship by trying to sell to another. Any disposition has to be in concert btwn married partners.

Tenancy in common.Three things:

1. Each cotenant owns an individual part and has the right to possess the whole2. There are NO survivorship btwn tenants in common. This means that each

interest is descendible, devisable, and alienable. 3. The presumption always favors the tenancy in common. When in doubt,

construe in favor of the tenancy in common. This is because the common law disfavored joint tenancies w/automatic right of survivorship. This is because Joint Tenancy allowed avoidance of system of probate process, and the state didn’t like this. It preferred the tenancy in common.

A few things about co-owners. A few rights and duties.1. Possession is entitled to enjoy the WHOLE. No matter his or her respective

share. It doesn’t matter if one person contributed 10% and someone else contributed 90%.

2. Each co-owner receives his or her fair share of rent income from a third party. Each is entitled to fair share of rental income from a third party.

3. A co-owner enjoys a right to contribution during the life of the co-tenancy for any repairs that she reasonably makes. If someone makes an improvement that is reasonable, then the person who made the improvement is entitled to a fair share from the other person – but she must give the other co-owner a chance to object.

4. Regarding improvements, there is no affirmative right to contribution during the life of the co-tenancy for so-called improvements.

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5. At partition, the improving co-tenant gets a credit equal to any objectively demonstrable increase in value caused by her efforts. At partition, the co-owner suffers a debit if her “improvements” actually caused a decrease in value.

6. Co-owners must not commit waste. No voluntary waste, no permissive waste is allowed, and no ameliorative waste is allowed.

Landlord/Tenant Law.Four leasehold interests:

1. Tenancy for years, synonymous with term of years, or an estate for years, this is an estate for a fixed period of time. (It could also be months, or weeks, though)

a. No notice is needed to terminate because by definition the term of years tells you when it is going to end. From the inception of the leasehold you’ll know when it will come to an end.

b. A term of years greater than 1 year must be in writing in order to be enforceable (Statute of Frauds imposition)

2. Periodic Tenancy, an open-ended leasehold that continues for successive intervals

a. This lease continues for successive intervals, until L or T give proper notice to terminate. It continues for successive intervals, and by definition is open-ended. To T for month-to-month, or year-to-year, or week-to-week.

b. Notice must be given before terminate, equal to the period itself, unless the parties agree to some other time-frame, i.e. in the lease. Thus, e.g. in a month-to-month tenancy, must give one month notice. If leasehold runs from year-to-year or greater, then only six months notice.

3. Tenancy at Will: A tenancy for no fixed duration, and continues for as long as L or T desires. The tenancy at will does not give you a sense of when it is going to close. It might go for a few days, or it might go for a number of years. Although the tenancy at will could be terminated at any time, in practice, however, by statute it usually requires reasonable notice.

4. Tenancy at Sufferance: T has wrongfully held over – past the expiration of the lease. On an exam, in the hold over setting, when you see that the tenant has stayed over the term of the lease, then she becomes a tenancy at sufferance. Under this, the Landlord can still receive rent. But the Tenancy at Sufference is usually short-lived. It occurs when Landlord either evicts tenant, or holds tenant to a new tenancy.

Within the context of L/T law, you will be expected to speak to certain dimensions of L/T relationship.

Tenant’s Duties:1. Tenant’s duty to repair: T must maintain premises and make ordinary

repairs to tenancy and make ordinary repairs.

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2. Tenant must not make waste. Law of waste, walks with the law of fixtures. These two constructs are intertwined. When a tenant removes a fixture, he commits voluntary waste. Thus, tenant must not remove fixtures. A fixture is a once-movable chattel/thing, that by virtue of its attachment to the premise objectively shows the intent to permanently improve the premises. E.g. the furnace, custom storm windows. T must not remove a fixture, even if she installed it in the first place. Fixtures pass w/ownership of the land. How to tell if something is a fixture:

a. there’s an expression before the installationb. If removal will cause substantial harm, T has shown intent to install a

fixture3. Tenant’s duty to pay rent. Two different settings:

a. T breaches duty to pay rent and is in possession of the premises: So if a landlord who is your client comes in and says that a T isn’t paying her rent the landlord can (1) evict properly or (2) sue for rent due. L MUST NOT ENGAGE IN SELF HELP, such as changing the locks, removing tenant, or removing the tenant’s property.

b. T is not paying rent and is wrongfully out of possession. T leaves wrongfully w/time left on a term of years lease. So now, your aggrieved landlord comes to you and says that tenant left w/2.5 years left on 5 yr contract, and L hasn’t been receiving rent. Three options S.I.R.: Surrender (view T’s abandonment as a tacit offer of surrender, which L accepts); Ignore the abandonment and hold T responsible for rent just as if T were still there. Unpaid rent will accrue – and this option is available in a minority of states. Re-let the premises on the wrongdoer’s behalf and hold his/her liable for any deficiency. Majority rule requires that L try to mitigate damages.

Landlord’s Duties:1. Duty to deliver possession. This tells us that L must put T in physical

possession of the premises at the start of the lease. 2. Implied covenant of quiet enjoyment. This is an implicit promise that

every landlord makes. It applies across the board to residential and commercial leases. Every tenant has right to private use and enjoyment of the premises without interference from L. This could be breached by (1) wrongful eviction, or (2) constructive eviction. T must SING: Substantial Interference due to L’s actions or neglect, the landlord must have Notice and L must fail to act meaningfully, and Good-bye meaning T must vacate w/in reasonable time after L fails to fix the problem.

3. Implied Warranty of Habitability: It applies only to residential leases. The Implied Warranty of Habitability is not applicable in commercial settings. The Implied Warranty of Habitability is not waivable. Any attempt to obtain a waiver is impossible. The building must be fit for basic habitation. Basic human living requirements must be met by premises. The appropriate standard could be supplied by local housing code or court conclusion. Standard types: no heat in winter, no running water, lack of adequate plumbing.

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a. T’s options when IWH is breached: (1) move out; or (2) repair and deduct the cost from future rent – allowed by statute in growing # of states; (3) reduce the rent or withhold it until court determines fair rental value; Typically T must put withheld rent into an escrow account – this is to ensure good faith; (4) remain in possession, pay rent, and sue for money damages has tenant playing it safe.

4. Retaliatory eviction: The landlord is barred from penalizing a good-faith whistle-blowing tenant. Landlord cannot raise tenant’s rent in response to tenant’s actions. This has purpose of not discouraging tenant from making complaints.

Servitudes: This refers to a number of non-possessory interests:EASEMENTS:

1) Easement – a grant of a non-possessory property interest that entitles its holder to some form of use or enjoyment of another’s land. Easements can be Affirmative or Negative.

2) Most easements are affirmative. The Affirmative Easement is right to do something on servient land. Common examples: right to place utility lines on another’s land, or the right of way across another’s land.

3) Negative Easement allows its holder to prevent a servient owner from doing something that would otherwise be permissible. Typically usually only in four category. LASS: Light; Air; Support; Stream water from an artificial flow. In a minority of states there’s also an easement for Scenic View. So LASSSV. You, as holder a negative easement to compel your neighbor the servient owner to refrain from doing something on her land. You may have negative easement for light giving you right to compel your neighbor to refrain from building on top of her structure on top of her land something that would impede your sunlight. You may obtain negative easement to prevent your neighbor from doing something on her land that would impede your unobstructed airflow. You may receive negative easement that give you right to impede your neighbor from doing something on her land that would undermine your property’s support. You may also receive a negative easement to prevent your neighbor from impeding your access to an artificial stream of water. Negative easements can only be created expressly in writing. These mostly abound in urban settings and are negative easements for light.

4) Easements are either Appurtenant or held in Gross. a. Appurtenant easements are when they benefit the holder in his

physical use or enjoyment of the property. It takes two to have an appurtenant easement: one is dominant (dominant tenement that gets benefit of easement) and the other servient (servient because it has burden of the easement). Example: A grants B a right of way across A’s land so that B can better reach B’s land. B’s land gets the benefit (dominant tenement) and A’s land is serving B’s easement, so A’s land

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is (servient tenement). You would say: B has an easement appurtenant to B’s dominant tenement.

b. Easement is in gross only when it gives the holder some personal or commercial advantage not related to his use or enjoyment of land. Servient land is burdened but there is no dominant land. The holder of the easement in gross derives some personal or monetary gain from the easement. When easement is in gross, only one parcel of land is involved and it is the servient land. E.g. right to build a billboard on someone’s lot; right to fish or swim in another’s pond; a power company’s right to place utility lines on another’s land. Only servient land is burdened because there is no dominant land.

i. The appurtenant easement is transferred automatically with the dominant tenement. An easement in gross is not transferrable unless it is for commercial purposes. This is because the easement in gross is considered personal to its owner.

(A) There are four ways to create an affirmative easement (PING):1. Prescription2. Implication3. Necessity4. Grant

a. Grant: an easement for more than one year must be in a writing. This is because of the statute of frauds. The document

b. Implication: easement is implied from existing use. Example: A owns two lots, lot 1 hooked to sewer drain on lot 2. A sells lot 1 to B with no mention of any right to use drain on A’s remaining lot 2. Court may nonetheless imply an easement on the part of B if two conditions are met: The previous use was (1) apparent and (2) the parties expected that the use would survive division because it’s reasonably necessary to the dominant land’s use and enjoyment.

c. Necessity: Landlocked setting. An easement of right of way will be implied of necessity when grantor conveys part of his land w/no way out except over part of some of grantor’s remaining land.

d. Prescription: An easement may be acquired by meeting the elements of adverse possession. COAH: Continuous for statutory period, Open and Notorious, Actual use, that is Hostile and Adverse w/o owner’s consent. for example, every day you walk across your neighbors land without your neighbor’s land in an open way without your neighbor’s consent, you may acquire the affirmative easement.

(B) Scope of Easement is set by terms and conditions that created it. There cannot be unilateral expansion.

(C) Terminating an Easement. There are several ways: 1. Easements created by necessity end as soon as the necessity ends.

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2. Estoppel doctrine applies when servient owner materially changes position in reasonable reliance on the easement holder’s assurances that the easement will not be enforced. This means that if A tells B that he won’t be using his right of way over B’s parcel any more. So relying on that info, B goes ahead and builds a swimming pool on the parcel. So, A is estopped from enforcing the easement because of A’s assurances that he wouldn’t need it anymore

3. Written release (most common) given by easement holder to servient owner.

4. Another way to terminate easement is by abandonment. The easement holder must show by physical action the intent never to use the easement again, to justify the conclusion that the easement wasn’t going to be used any more. For example, A has easement over Bs land and then builds structure that would prevent A from using the easement. B would have belief that A abandoned it.

5. Merger doctrine: easement ends when title to the easement and title to the servient land become vested in the same person.

6. Prescription: The servient owner may extinguish the easement by interfering with it in accordance w/the elements of Adverse Possession. COAH again: Continuous interference that is Open and Notorious, Actual, and Hostile to the easement holder.

LICENSES1) A license is a mere privilege to enter another’s land for some delineated

purpose. It’s a mere privilege. 2) Licenses are not subject to the Statute of Frauds. You don’t need a writing to

create a license. Licenses are informal devices. In actuality they are the flimsiest of the servitude family. There is, however, a price to pay for this informality.

3) Licenses are freely revocable at the will of the licensor unless estoppel applies to bar revocation. This is important. Licenses are revocable unless there is evidence that estoppel should apply to stop revocation.

4) Typical license cases:a. Ticket cases – tickets create freely revocable licenses. So you if you

purchase tickets to a show. And all the other ppl are allowed in except for you. This is allowable as a property matter. A

b. Neighbors talking by the fence. For example so neighbor A by the fence says to B, you can have the right of way over my property. But then the next day, A says, I changed my mind. Although B is upset, seemingly oral easements create instead freely revocable licenses. Why? because they violate the Statute of Frauds. An easement should usually involve writing.

c. Estoppel will usually bar revocation of a license, but only when the licensee has invested substantial money or labor or both in reasonable reliance on the license’s continuance. In equity, estoppel may sometimes work as a bar to the freely revocable license.

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PROFIT1) The profit entitles its holder to enter servient land and take from it the soil or

some resource thereupon. Usually some substance of the soil. Most common profit would be right to take minerals, timber, oil from the land. EXAMBLE: Elijah goes to top of mountain and takes down some of the minerals because he’s a profit.

2) The profit shares all the rules of easements. So while we call it a profit because you can take something from that land.

COVENANT:1) A promise to do or not do something related to land. It is very different from

an easement b/c the covenant starts off as a mere contractual limitation regarding land. The covenant has very modest origins.

2) Covenants can be negative or affirmative. Negative easements are called restrictive covenants. Most restrictive covenants are negative. They are covenants/promises to refrain from doing something pertaining to land. EXAMPLE: I promise not to build for commercial purposes. Possibilities w/in covenants are endless. I promise not to display basketball hoop in driveway, paint my house a certain color, etc. Because property law required that negative easements be so narrow in scope, it required neighbors to make promises not to do certain things pertaining to their land.

a. Although most covenants are negative, some can be positive. A promise to do something related to land. EXAMPLE: I promise to paint our common fence.

3) How will you know whether to construe the promise as a covenant or as an equitable servitude? On an exam, there is tremendous factual overlap btwn sort of circumstance that could lead you to conclude that something is a covenant or that something is an equitable servitude. The answer to the question resides in this. When the plaintiff wants money damages, construe as a covenant. When the plaintiff wants an injunction, construe as an equitable servitude. The covenant is a legal device that grew up at law and has legal remedy (money damages). The equitable servitude grew up in equity and has equitable remedy (injunction). When plaintiff wants money damages – plaintiff wants covenant. When plaintiff wants injunction, then plaintiff wants equitable servitude.

4) In Covenant parlance, one tract is burdened, one tract is benefitted. When will covenant run with the land. The short answer, when it is capable of binding successors. Example: A promises B that A won’t build for commercial purposes. Immediately, A’s parcel is burdened, B’s parcel is benefitted. A sells his burdened parcel to A1. B sells his benefitted parcel to B1. Suppose that A1 begins manufacturing of a steak sauce plant. Suppose that B1 seeks to sue A1 for money damages for A1s defiance of the promise that A had made to B. Will B1 succeed, two separate contests must be resolved:

(1) does burden run from A to A1? [you start with burden side because it is HARDER for burdens to run than for benefits to run] To determine elements needed to determine if the burden runs, you start WITHN: Writing – original covenant had to be

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in writing; Intent – the original parties intended that the covenant would run (courts are generous in presuming intent); Touch and Concern the land – the promise must affect the parties as landowners and not merely members of the community at large; Horizontal (A and B had to be in succession of estate, i.e. enjoyed a grantor/grantee or landlord/tenant or mortgagor mortgagee relationship when promise was made or that A and B also share some other servitude btwn them. Horizontal privity is DIFFICULT to establish. It’s absence is the reason many burdens don’t run) and vertical privity are both needed for the burden to run. Vertical privity is the nexis btwn A and A1. It is much easier to establish – simply requires some non-hostile connection or maybe A1 is now the devisee or heir. The only time vertical privity will be absent is if A1 took by adverse possession. Notice—A1 must have had notice of the promise when A1 took.

(2) Does the benefit run from B to B1? Does B1 have standing to make this claim? A good question because A1 is w/in rights to look dubiously when receiving some summons form a B1. In property parlance does benefit run from B to B1. WITV: Writing – original promise btwn B and B1 was in writing; Intent – the original parties intended for benefit to run; Touch and Concern the land (the agreement affects the parties as land owners); Vertical privity – a nonhostile nexus btwn B and B1. Horizontal privity is not needed for benefit to run.

A(burdened) ----- B (benefitted)

Hour 5. Servitude is a generic construct. Be on lookout for Easement, which is the grant of non-possessory property interest. If grant doesn’t fall into easement rubric is it a license, revocable at will unless estoppel applies. If easement, license, profit isn’t there, then might it be that a covenant exists on the facts. If the promise btwn the parties follows more w/in realm of restrictive covenant and you see that your client is trying to receive money damages, then look for covenant elements. If you see the plaintiff trying to get injunctive relief then you need to look to equitable servitude.

EQUITABLE SERVITUDE.1. A promise that equity will enforce against successors. Because it is an

equitable remedy, it’s relief is an injunction to enjoin the offender from going ahead w/the breach of the promise.

2. To create an equitable servitude that will bind successors, you need WITNESS: Writing – the original promise will generally be in writing; Intent

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A

A1

B

B1

– the partners intended that the promise would bind successors; Touch and Concern the land, the promise affects the parties as land owners; Notice – the successors of the burdened land had notice of the promise; Equitable Servitude. Privity is NOT NEEDED to bind successors. Implied Equitable Servitude – the General or Common Scheme Doctrine. Sometimes Equitable Servitude will be implied when two elements of the doctrine are present. Facts that might be involved in testing the CSD. Suppose that A is a subdivider, and she subdivides her land into 50 lots. She sells the first 45 lots through deeds that restrict uses to residential purposes. She then sells one of the remaining lots to a commercial entity, B, by a deed that contains no restrictions. B wants to build commercially on his land. Can B be enjoined from doing so? Can B be held responsible for things not in B’s contract but in the deeds to everyone else. The Common Scheme Doctrine says yes, if two elements are met:

a. When the sells began, the subdivider had a general scheme of residential development which included defendant’s lot.

b. The defendant lot holder (B) had notice of the promise contained in the prior deeds. There are three types of notice B could have had AIR: Actual notice (had literal knowledge of the promise); Inquiry and Record notice are both forms of constructive notice. Inquiry notice means that neighborhood conforms to a common restriction (lay of the land); Record notice meaning the type of notice imputed to buyers thanks to the public records. In some jurisdictions a buyer B is responsible for knowing the records of other landholders who were given deeds from a common grantor.

The one defense to an equitable servitude is the Doctrine of Changed Conditions: An equitable servitude may be terminated when change has so infected the given area as to render the purpose of the servitude moot. You are obliged thanks to equitable servitude from building something for commercial purposes, but if the neighborhood has changed with more commercial purposes, then you may be relieved from being bound to the equitable servitude.

ADVERSE POSSESSION:Possession for a statutorily prescribed period of time can ripen into title if certain elements are met. The idea is that an entity who previously was a trespasser may be transformed into the rightful owner. The elements of Adverse Possession:

1. Continuous – uninterrupted for statutory period. 2. Open and Notorious – the sort of use that the usual owner would make under

the circumstances.3. Actual – the entry must be literal.4. Hostile – the possessor must not have True Owner’s permission to be there.

Within the realm of Adverse Possession there’s something to be said about tacking. One possessor of the land may tack onto the time with the land his predecessor’s land so long as there is privity (blood relationship, contract, will, deed). Tacking is

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not allowed when there has been an ouster. If an adverse possessor has come to her place on the land as a result of having forced off a predecessor then she won’t be able to tack on her own time to her predecessor’s time.

LAND TRANSFEREvery conveyance of real estate involves a two step process:

1. The land contract – it endures until step 2a. Must be in writing, signed by the party to be bound. It must describe

the land, and the writing must state some consideration.b. The one exception to the writing requirement: The Doctrine of Part

Performance. If you have any two of the following three facts, and equity intervenes to decree specific performance of the oral contract for the sale of land:

1) B takes possession; 2) B pays all or part of the price3) B makes substantial improvements

c. The problem of risk of loss – once contract is signed, B, the buyer owns the land subject to the condition that he paid the balance owed at the closing. This means that if, in the interim btwn contract and closing the land is destroyed through no fault of either party, then in equity B bears the Risk of Loss, unless the land contract says otherwise.

There are two implied promises in every land contract.1. Seller promises to provide marketable title at closing.

Marketable title means title free from doubt, lawsuits, and threat of litigation. Three things that render title unmarketable:

a. Adverse Possession – the majority rule says that seller must be able to provide good record title. So for title to be marketable it must not reside in adverse possession. Seller has to be able to demonstrate good record title.

b. Encumbrances – marketable title means an unencumbered fee simple: servitudes and liens render title unmarketable unless the buyer has waived them. Keep in mind that Blackacre is probably subject to some easement. Typically buyer will waive the requirement

c. Zoning violations – title is unmarketable when Blackacre violates a zoning ordinance.

2. Seller promises not to make any false statements of material fact. Seller is also liable for failure to disclose latent material defects. Seller responsible for material lies and omissions.

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2. The closing – at this point the deed becomes the operative document. The deed passes legal title from the seller to the buyer. For a dead to be good it’s got to be LEAD: Legally Executed And Delivered.

a. Lawful Execution means the deed was in writing and signed by the grantor.

b. Proper delivery occurs when the grantor literally transfers the deed to the grantee. Delivery does not necessarily mean the actual physical transfer of the deed itself. Delivery is a legal standard and not a literal standard. Delivery in property law as a legal construct defies our layperson ideas about what delivery means. Delivery means that grantor has shown the present intent to be immediately bound. Regardless of whether or not the deed itself was literally handed over. If a deed is transferred with an oral condition, then the oral condition typically drops out. That oral condition is deemed too susceptible to fraud. Therefore oral conditions tend to fall to the wayside.

3. There are three different types of deeds:a. Quitclaimb. General Warranty Deedc. The Statutory Special Warranty Deed

(1) Quitclaim contains no covenants. The grantor isn’t even guaranteeing that he has good title. It is thus the worse type of deed a buyer could hope for. It is an unusual type of deed.

(2) General Warranty Deed the best type of deed. This type of deed makes a host of promises. It is on behalf of the grantor, and from grantor’s predecessors. It warrants against ALL defects in title, including those due to grantor’s predecessors. It usually contains six covenants. First three are present covenants (a present covenant is breached if ever at the time of delivery – is to say that the statute of limitations for a breach of present covenant begins to run from the instant of delivery). The second three are future covenants – meaning that a future covenant isn’t breached until grantee is disturbed in possession. So the statute of limitations will not begin to run until that future date when the grantee is disturbed in possession.

1. Covenant of Seisin: Grantor promises he owns this estate.

2. Covenant of Right to Convey: Grantor has power to make this transfer. No restraints on grantor’s capacity to sell.

3. Covenant against encumbrances. Grantor promises there are no servitudes or liens on Blackacre.

4. Covenant for Quiet Enjoyment. Grantee won’t be disturbed in possession by a third-party’s lawful claim of title.

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5. Covenant of Warranty: Grantor promises to defend grantee against lawful title claims. If there is someone else who brings a claim against grantee, then grantor will defend the grantee.

6. Covenant for Further Assurances. Grantor promises to do whatever is needed in the future to perfect the title. More of a housekeeping type of promise.

(3) Statutory Special Warranty Deed contains two promises that the grantor makes on behalf of himself. He is not making any promises on behalf of his predecessors. The two promises

1. Grantor promises that he hasn’t conveyed Blackacre to anyone other than Grantee. Promising that he isn’t a double-dealer.

2. Grantor promises that Blackacre is free from any encumbrances made by grantor.

Land Recording System: One basic model to keep in mind: The recording system has everything to do

with resolving problems that arise because of the double-dealer. O conveys Blackacre to A. Later, O conveys the very same parcel of Blackacre to B. O is nowhere to be found, as he skipped town. In the battle between A who got there first and B who got there last, the question would be who wins? Recording system has been enacted in all states to answer this question. Two bright line rules to answer the question:

1. If B is a bona fide purchaser in a notice jurisdiction then B wins regardless of whether B records before A.

2. If B is a bona fide purchaser and we are in a race-notice jurisdiction then B wins if she records properly before A.

Recording statutes protect bona fide purchasers and mortagees. Recording statutes are elitist. In order to qualify for protection of statute, you have to prove 1) that you are a bona fide purchaser. To be a bona fide purchaser you have to (A) buy Blackacre for pecuniary value. Recording statutes don’t protect devisees, or recipients of gifts. (B) to be a bona fide purchaser you also have had to buy the property w/o notice that someone had gotten there first. Three types of Notice AIR: Actual (if B is told of A being in the property), Inquiry (B is on inquiry notice of whatever inspection of Blackacre would show regardless of whether B actually inquired), Record (B is on notice of A’s deed if at the time B takes A’s deed was recorded properly in public records). Then, if you are a bona fide purchaser then whether B beats A depends on whether the jurisdiction is a Race or Race-Notice jurisdiction.

1) In a Notice System: B wins if B is a BFP when he takes. B wins over any competing predecessors. The last BFP to enter the scene always wins. Even in a notice system, you would counsel your client to properly record the property. So long as B is the last BFP then B defeats A.

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2) In a Race-Notice System B wins, if he is a BFP when he takes and he also wins the race to record. Now, to prevail, B must show he is the last person to enter the scene and he is the first to record properly.

3) Race system: It exists in only handful of jurisdictions. In order to win the race, one only has to win the race to the recording system. Notice is not required. Because it strips the requirement to actually check out the property being sold, race statutes are becoming increasingly vestigial.

In the Race or Race Notice jurisdiction, A would have won if A had properly recorded before B took. When is a deed recorded properly?

o A deed is recorded properly when it is recorded w/in the chain of title. The chain of title refers to the sequence of documents capable of giving record notice to later takers. For a deed to be recorded properly it’s got to be hooked into a larger chain of title. In vast majority of states, the chain is recorded in grantor/grantee index.

Problem of the Wild Deed. O sells Blackacre to A who does not record. Later A sells to B. B records the A to B deed. The A to B deed, although recorded, is not connected to the chain of title. Why not? Because the O to A link is missing from the records. The A to B link therefore is called a “Wild Deed.” Rule of the Wild Deed: If a deed entered on the records (A to B) has a grantor (O to A) unconnected to the chain of title, then the deed is a wild deed. It is incapable of giving record notice of its contents. Wild deeds are nullities for purposes of recording system. They do not give notice to any subsequent purchasers.

Concept of Estoppel by Deed:Concept of Estoppel by Deed: An equitable principle, that tells us that one who conveys realty in which he has no interest will be estopped from denying the validity of that transfer if he later comes to acquire what he had previously purported to convey. So if I sell you Blackacre today and I don’t have Blackacre today, but a couple years from now I do actually obtain which I purportedly sold to you, I cannot obtain what I purportedly sold you. I am estopped from it.

EMINENT DOMAIN: Governments Fifth Amendment Power to take private property for public use

in exchange for just compensation (from takings clause) There are two types of taking:

1) Explicit taking: overt act of government condemnation. Gov’t comes knocking on your door saying sorry got to take your Blackacre in order to build a highway.

2) Implicit taking: a regulatory taking – a government regulation that while never intended by the gov’t to work a taking nonetheless has the same effect.

ZONING: Pursuant to its police power, gov’t may enact statutes to reasonably control

land use. It’s an exercise of state and local government’s delegated to them police powers.

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The variance is the principle means available to achieve flexibility in zoning. There are two sorts of variances:

1. Area Variance: deals with an allowable use that presents a problem of ill fit. For example, in a residentially zoned district, I seek permission to add a glass enclosed front porch onto my property. In order to do this, I need an area variance to satisfy the minimum set back requirement. Otherwise, I will be in defiance of my area variance. To get one, I have to show A) undue hardship if variance were denied, and B) that my variance won’t damage surrounding property value.

2. Use Variance: Permission to depart from the list of allowable uses in a given zone. The seeker of a use variance may be seeking to build a commercial space in an a residential neighborhood. Obtaining a use variance is usually harder to obtain and is granted only in special circumstances (difficult to establish – usually defined by statutory and regulatory scheme). The variance is ruled upon by a zoning board/administrative body. The zoning board makes determinations as to whether to grant or deny variances, but they are appealable to the courts.

A nonconforming use is a once-lawful use now deemed non-conforming because of a new zoning ordinance. The non-conforming use can’t be eliminated all at once unless just compensation is paid. Otherwise, gov’t would have succeeded in a taking w/o compensation.

EXACTIONS: The amenities a gov’t seeks in exchange for granting permission to build. For

example, if I’m a developer seeking a permit to build in a given town. Town says it’s willing to give us the permit if we’re willing to build a pool for community use, or park for use.

To pass constitutional scrutiny, any exactions that gov’t seeks must be reasonably related in nature and scope to the impact of the proposed development. If they are not then the exactions are unconstitutional. (This is to avoid actual or the appearance of gov’t extortion of potential developers)

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