PROPERTY OUTLINE

I. Propertya. Common-law courseb. Applies doctrines set out by courts to new fact patters

II. Title- ownership of propertya. Evidence of ownership: deed, will, go to registry of deeds and probateb. Evidence of personal property: possession (presumption of ownership)c. Right to ownership gives you:

i. Transfer in a full or limited way- buy, sell, let others borrow itii. Use

iii. Can’t use it to commit a crime or tortiv. Can exclude othersv. Use as collateral (limited transfer)

d. possession- the right under which one may exercise control over something to the exclusion of all others and the exercise of dominion over property (holding property in one’s power)

III. Bailmenta. Bailment- giving property to another for a short time for a limit purpose where the person

who has rightful possession is not the owner (voluntary bailment)i. Bailor- owner

ii. Bailee- person who takes possession with consent of the ownerb. reasonable care- bailee has a duty of reasonable care not to destroy, damage, or sell

property (modern rule)c. trover- if bailee or person who has the property sells it, the true owner (or bailor) can

recover money damages in a common law action for defendant’s conversion to his own use of a chattel owned or possessed by the plaintiff (trespass)

i. constructive trust- law can impose it and whatever money represents the property would be held in trust for the true owner- can get at least the amount the bailee sold the property for

d. replevin- lawsuit to obtain the return of the goods, not damages (ejectment)e. involuntary bailment- relationship between true owner and person who find property

when it is losti. voluntary bailor- true owner

ii. voluntary bailee- finderiii. duty owed: same issues as voluntary bailment (constructive trust, reasonable

care)1. true owner has superior rights of property

Subsequent Possession: Acquisition of Property by Find, Adverse Possession, and Gift

Finders

I. Finder’s claima. Depends on who the rival claimant is and whether the property was

i. Lostii. Abandoned

iii. Mislaidb. Finder’s have relative title

c. Policy objectives in finder’s law:i. Restore property to true owner

ii. Reward honest findersiii. Deliver reasonable expectations of landownersiv. Discourage trespassers and other wrongdoersv. Encourage productive use of property

d. Three factors that help determine finder’s rights:i. Intent of original owner (lost, mislaid, abandoned)

ii. Identity of competing claimantsiii. Location where item is found

II. Prior Possession Rule of Sequencea. Priority of possession is based on sequence of possession b. Prior finders prevail over later finders

i. Rationales:1. encourage finders to make productive use of findings2. provide a cheap, easy means of establishing presumptive title3. stability

c. True owner has greater title than finder and subsequent finder has inferior title against prior finders

i. Rankings: True Owner -> Finder #1 -> Finder #2d. finders have relative titlee. bright-line rule: sequence is applied no matter the character of the property possessors-

even if possession was acquired in torti. may not be fair, but is predictable and creates order

ii. cases are out there that defy rule out of fairness and equity

III. Abandoned propertya. Abandoned- owner has voluntarily and intentionally given up claims of ownership

i. Typically, finders prevailii. Intention is key

b. General rule: a finder of abandoned property acquires title, but is not invariablei. Trespassers are not likely to be rewarded

1. unless trespass is “trivial or merely technical”- Favorite v. Millerii. Owners of land where abandoned property is found may sometimes have strong

and reasonable expectations of abandoned property

IV. Lost propertya. Lost - owner unintentionally and involuntarily parts with it through neglect or

inadvertence and does not know where it isi. No duty owed to true owner

b. General rule : finder’s title for lost property is good against the whole world except the true owner, prior finders, and (sometimes) the owner of the land where the object is found (knowledge, embedded/attached, employer/employee, dominion)

c. Armory v. Delamiriei. Plaintiff took stone to jeweler to get it appraised; jeweler’s apprentice took stones

out, gave setting back, and wouldn’t return stonesii. True owner cannot be found (involuntary bailment situation)

iii. Defendant thinks he has possession because Armory didn’t have title (mere finder)

iv. Sues in trover- likely defendant sold stones so he couldn’t get them back

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1. awards money damages in the highest worth stones could have hadv. rule: finder’s title is good against the whole world except the true owner, prior

finders, and (sometimes) the owner of the land where the object is foundd. Anderson v. Gouldberg- prior possession applies even if the First Finder stole the watch

from the True Owner i. “One who has acquired the possession of property, whether by finding, bailment,

or by mere tort has a right to retain the possession as against a mere wrongdoer who is a stranger to his property”

V. Lost property and issue between finder and landownera. Hannah v. Peel

i. Facts1. Peel owned house and never moved in; house was used to house soldier’s

during WWII2. Hannah found a brooch while adjusting black out curtain; reported find;

police gave brooch to Peel and he sold it3. Hannah sued for money damages or return of the brooch4. Peel claims that because it was found on his property, it is his and he is

first in the sequence of possession5. Hannah follows Armory rule

ii. Locus in quo- place where something has alleged to occurrediii. freeholder- ownership rights (Peel is the freeholder)

1. nonfreeholder- renter/leasing2. conveyance- purchase; transfer of deed

iv. Sequence- does ownership of property where object is found count as prior possession?

1. constructive possession- not actual possession; deem circumstances to be as though person has actual possession/notice

a. possession even if there is no dominion exerted or hands are not physically on it

v. court applies precedent1. Bridges- applies general Armory rule that lost article is entitled to the

finder against all persons except the real ownera. Bank notes lost in public part of propertyb. Says location doesn’t matterc. Makes reference that object was lost, so Armory controls

d. In cases where object is lost, no duty is owned to the true owner2. Staffordshire v. Sherman

a. Worker discovers two rings embedded in the landb. Rings found on private propertyc. “The possessor of land is generally entitled as against the finder,

to chattels found on the land”d. Also, rings found in the course of what the worker was doing

(goes to landowner)3. Elwes v. Brigg Gas Co.

a. Prehistoric boat found on propertyb. Court ruled for lessor and said it did not matter that lessor did

not know boat existed prior to discoveryi. Demise- lease

c. Boat was embedded in the soil prior to purchase

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i. Had constructive possession of the boatvi. Court rules Peel did not have constructive possession

1. never moved in, was not aware until Hannah found brooch, and did not have possession of unknown contents

vii. Court ruled brooch was lost- finder’s rule in Armoryviii. Hannah acted commendably

VI. Mislaid propertya. Mislaid- owner v oluntarily puts it in a particular place, intending to retain ownership, but

then fails to reclaim it or forgets where it is.i. Owner of the locus in quo gets possession

1. more likely to be returned to true owner2. duty to care for mislaid items

b. problem: might be on the floor, but might not be losti. hard to make distinctions (circumstantial evidence)

c. McAvoy v. Medinai. Plaintiff was a customer in defendant’s barbershop. P found a pocket-book which

was lying on the table there. Defendant took it and counted the money, and plaintiff told him to keep it and if the owner showed up, to give it to them and to advertise. Plaintiff made three demands for the money. Owner was not found

ii. Rule: Mislaid property found in public places goes to the landowner. Mislaid property is property that the true owner placed somewhere with the intention of returning for it, but which cannot now be located.

iii. Court rules it’s mislaid- probably not lost1. best chance to return to landowner

VII. Finder’s Casesa. Armory

i. True owner -> finder -> subsequent possessionb. Hannah

i. True owner -> finder -> locus owner (lost property)c. McAvoy

i. True owner -> finder -> locus owner (mislaid property)

VIII. Basic Rules of Lost and Mislaid Propertya. Finder v. Landowner

i. Trespassing finders- trespassing finders of lost or mislaid property usually lose (Favorite v. Miller)

ii. Employee finders- older cases say employee finders must surrender the find to their employer if the employee has a contractual duty to report finds

iii. Invitee finders- invitee finder who finds property in the course of doing what he or she is invited to do must surrender it to the landowner

1. look for constructive possession2. Sharman

iv. Embedded Objects and Treasure Trove1. embedded- awarded to the landowner

a. landowner’s expectations of owning thing in the dirt2. treasure trove- gold, silver, or money buried with the intent of return and

recoverya. old view: reward to the finderb. modern vie: goes to the landowner, but courts still differ

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v. Private Homes1. question turns on whether landowner has constructive possession (are

they absentee owners)?2. also whether things are lost or mislaid, embedded, etc.

vi. Public Place1. lost property- goes to the finder (Bridges)2. mislaid property- goes to the landowner (McAvoy)3. circumstantial in determining whether it is lost or mislaid

IX. Equitable Divisiona. Equitable division- found property can sometimes be shared equitably among competing

claimantsi. Remedy in some cases to the “all or nothing” approach

ii. Ex: Barry Bonds baseball; both Popov and Hayashi had equal interest in the ball and court said they should share it equally

X. Statutesa. Statutes can modify common law rules and determinations of what is lost, mislaid, or

abandoned and who should get possession

XI. Key Termsa. Bailmentb. Constructive trustc. Troverd. Replevine. Freeholder/nonfreeholderf. Constructive possessiong. Locus in quoh. Losti. Mislaidj. Abandonedk. Demise

Adverse Possession

I. Key Termsa. Ejectment- equitable action as an alternative to trespass (money damages) where the

court gives you the right to mandate removal of person/occupier and stuff from property b. Action to Quiet Title- brought against all possible claimants of title; has the court say

who owns the propertyc. Doctrine of Relating Back- deals with taxes and adverse possession; don’t pay taxes for

property during adverse possession, but will pay back taxes on the years you occupied once you become record owner after statute of limitations expires

d. Interruption by Real Owner- ending the ability for adverse possessor to take advantage of the years after the cause of action accrues

i. Can’t get kicked off land and go back on; SOL starts back at zeroii. Examples: ejectment, action to quiet title, easement (rightful use of someone

else’s property), renting, prescriptione. Abandonment by Adverse Possessor- can’t come back and claim adverse possession

i. Lose time accrued if you want to come back and claim itf. Temporary Interruption by Adverse Possession

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i. Left and came backii. Statute of limitation is tolled (a stay is placed on it)

1. suspends time clock for time they left but didn’t abandong. Derivative Title v. Original Title

i. Derivative Title- title that results when an already existing right is transferred to a new owner

ii. Original Title- title that creates a right for the first time

II. Adverse Possessiona. If true owner fails to start legal proceedings to remove a person who adversely possesses

his land within the period of the statute of limitations, the true owner is forever barred from removing the adverse possessor

i. Possession ripens into title for the adverse possessorb. Two requirements of adverse possession:

i. Expiration of the relevant statute of limitations (statutory)ii. Adverse possession during the limitations period (common-law, can also be

statutory)c. Cause of action accrues when all the elements of adverse possession are met?- is this

correctd. Rationales for adverse possession- economic, psychological, moral

i. Sleeping theory- people who ignore their own land deserve to be penalized and not be able to assert ownership after a certain time period (use it or lose it)

ii. Earning theory- people who use land productively and beneficially for a long time ought to be rewarded

1. adverse possessor has invested time and effort into the land2. develops expectations of continued possession

iii. Stability theory- enables disputes and doubts about land titles to be cleared expeditiously by delivering title to person who has occupied the land as if she were the owner for a long time without objection

e. Adverse possession and prospective buyersi. Go inspect the property- title search will not show adverse possession

III. Elements of Adverse Possession: need to satisfy all elements to start the cause of actiona. Actual entry/possession

i. Must physically take possession of the land- clock on limitations runs on actual entry

ii. Some states define adverse possession by statute- Van Valkenburghb. Open, notorious, and visible

i. Possessor needs to give noticeii. Must be readily visible

iii. Open and notorious constitutes noticeiv. Act as true owner would in making it open, notorious, and visiblev. Underground occupation- Marengo case (needs to be visible)

1. Marengo Cave v. Ross- A & B owned lands adjacent; cave under both lands; A had an opening on his land and opens it as tourist attraction

a. Court says it was not open and notorious- protects true owners b. B didn’t know A was using his land underneath adversely

vi. Boundary disputes- Mannillovii. Most states- state of mind is irrelevant

c. Exclusive possession i. The possessor has excluded the true owner and the public

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ii. Possess in a manner an average true owner would under the circumstances such that observers would regard occupant as exercising exclusive dominion

iii. Group of people could exclusively occupy- concurrent ownershipd. Hostility or Adverse Claim of Right

i. Occupying land without permission of the true owner with an intention to remain1. no permission means not subordinate to the true owner2. unilateral act cannot destroy hostility- must be agreed upon by TO and

APa. ex: true owner says AP can own land (doesn’t destroy hostility

unless AP agrees)b. if adverse possessor disclaims ownership, the possessor has

stopped being adverseii. “hostility” does not mean ill will or malice

iii. Claim of right- claim a right to stay on the landiv. Three States of Mind for Adverse Claim of Right

1. Good Faith Occupation- adverse possessor must have a genuine, good faith belief that she owns the occupied property

a. if you know land is not yours, can never acquire title by adverse possession

b. color of title- ultimate in good faith2. Aggressive Trespass- the occupier knows the property is not hi but

intends to claim it nevertheless (bad faith)a. almost nobody adheres to this view today (rewards deliberate

trespassers)3. Objective- state of mind is irrelevant; courts focus on two things:

a. lack of permissionb. whether occupier’s acts and statements objectively appear to be

claims of ownershipv. Boundary Disputes

1. most courts apply objective test of hostility2. minority applies the Maine Doctrine subjective test- occupier is not

possessing adversely unless she occupied under a good faith but mistaken belief that the land is hers, but she would not have occupied the land if she knew the true facts

a. encourages perjury and rewards trespassere. Continuous

i. Possession is continuous for the period of statute of limitations ii. Without interruption

iii. Must occupy the property as continually as would a reasonable and average true owner of the property

1. ex: summer home in Howard v. Kuntoiv. Continuity is destroyed with abandonmentv. Tacking- when a possessor adds the time of a prior possession to his own

1. if privity of estate exists, tacking is permitteda. privity of estate- voluntary transfer from first possessor to

second possessor of either an estate in land or actual possession 2. tacking for owners

a. same as with possessors- time period for ejectment continues3. ouster- if adverse possessor is ousted by a third party, the third party

cannot tack the ousted possessor’s period of possessiona. the transfer must be voluntary

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b. 3 views if ousted possessor returnsi. Limitations period begins anew (favors true owners)

ii. Does not interrupt continual running of limitations period (favors adverse possessors)

iii. Statute of limitations is tolled, or suspended, for the period ousted was gone (intermediate view)

f. Must be for the statutory period - abide by the statute of limitations i. Adverse possession begins when adverse possessor takes or gets on property for

the first timeii. Possessor’s title is superior to all but the record owner between when cause of

action accrues until statute of limitations runs out

IV. Van Valkenburgh v. Lutza. Statute involved for adverse possession without color of title: must bring it within 15

years and requires additional factors:i. Where it has been protected by a substantial enclosure

ii. Where it has been usually cultivated or improvedb. Lutz bought lots 14 and 15 in 1912

i. Set up Charlie’s house and cleared triangular tract in 1920 on lot 19 and in 1916 put a truck farm in

c. Court held for Van Valkenburghi. Couldn’t prove that Lutz had “substantially enclosed” or “usually cultivated or

improved” the propertyii. Lutz testified he knew he was not on his land at the time- no claim of right

1. wasn’t hostileiii. court says garage, house, truck, supplies didn’t improve the propertyiv. didn’t use all the land- not a substantial amount

d. Court does give him a prescriptive right- right to use part of the land for a specific purpose on occasion, but title remains with VV

e. Seised- possessionf. Disseised- ownership is taken away

V. What if Person Messes with Property of Person who is Adversely Possessing?a. Adverse possessor can do anything record owner would do

i. Has relative title- has all rights of property against everyone except true owner

VI. Adverse Possession Elements Reviewa. Actual entryb. Open, notorious, and visiblec. Exclusived. Hostile/adverse claim of righte. Continuousf. Must be for the statutory period

VII. Color of Title and Constructive Adverse Possessiona. Color of Title- person enters under color of title when there is a defective deed or other

writing or decree that purports to deliver title to the possessor, but which the possessor does not know to be invalid

i. Writing or deed is defective or invalidii. Conveying land that is not actually theirs

b. Possessors who enter with color of title satisfy adversity element

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c. Bright line rule: with color of title, person is given constructive possession of all the land if he is in actual possession of only part of the land

i. Other rule: with color of title, in possession of adversely possessed area and constructive possession of a reasonable area

VIII. Mannillo v. Gorskia. Boundary dispute: Gorski bought lot and in 1946, son made addition and changes to his

house. In 1953, steps were extended 15 inches onto adjacent lot. Mannillo asserts no adverse possession because there was no hostility or adverse claim of right.

b. Encroachment was not an intention to invade Mannillo’s lands, but rather the mistaken belief that Gorski owned the land

i. wants to use Maine Doctrine: possession as an element of title by adverse possession cannot be bottomed on mistake. The occupier not possessing adversely if she occupied under a good faith but mistaken belief that the land is hers, but she would not have occupied if she knew the true facts.

ii. Gorski wants to use Connecticut Doctrine: look at actions, not state of mindc. Court adopts Connecticut Doctrine (issue 1)d. Issue 2: was it open and notorious?

i. Court remands to see if Mannillo had knowledge structure was on his lande. Open and notorious

i. More reasonable to use objective standardii. Look to see if it is visible

iii. Requires actual knowledge- just b/c it is in sight does not mean it is open and notorious (small encroachment)

iv. Look at the ordinary and prudent personf. equity can furnish relief- can buy the land from landowner for market value to keep their

improvement g. Rule: no open notorious if a small area is not clearly and self-evidently an encroachment

IX. Mistaken Boundariesa. Doctrine of agreed boundaries- if there is uncertainty between neighbors as to true

boundary line, an oral agreement to settle the matter is enforceable if neighbors accept the line for a long period of time

b. Doctrine of acquiescence- long acquiescence is evidence of an agreement between the parties fixing the boundary line

c. Doctrine of estoppel- when one neighbor makes representations about (or engages in conduct) that the location is a common boundary, and the other neighbor then changes her position on reliance of representations or conduct.

X. Mistaken Improversa. Relative hardship test- tendency given in Mannillo; can force conveyance of land from

owner to the improver

XI. Howard v. Kuntoa. Color of title is presentb. Kunto had a deed to land used for a summer home that wasn’t the land on the deedc. 2 primary issues:

i. Claim of rightii. Continuous Possession

d. Continuous Possession

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i. Satisfied through use of a summer home- intended to be used as a summer home (meets continuity requirement)

ii. “The requisite possession requires such possession and dominion as ordinarily marks the conduct of owners in general, in holding, in managing, and caring for property of like nature and condition”- reasonable owner

e. Claim of Right- i. Whether purchase is adequate

ii. Tacking of adverse possession is permitted if the successive occupants are in privity

iii. Court allows tacking even when the deed is not for that land (color of title)

XII. Extent of Property Acquired by Adverse Possessiona. Color of title- possess all the land described in the defective deed, so long as it consists of

a single parcel and the possessor has occupied a significant portion of the parceli. Constructive possession never as good as actual, so if person enters with color of

title they will not acquire title to land that is actually occupied by someone elseb. No color of title- acquires only the land they actually physically possessed for the

limitations period

Problems- p. 1421.O owns Blackacre. Privity has to be voluntary conveyance and B’s possession doesn’t tack. If A abandons, it is not sufficient to lead to tacking. If A is ousted, 10 years and 6 months (tolling- most likely the right one)

XIII. Disabilitiesa. Statutes of limitations typically provide for tolling of the limitations time clock if the

owner is disabled from bringing an action to recover possession at the time the cause of action accrues

b. Typical disabilitiesi. Insanity or unsound mind

ii. Imprisonmentiii. Condition of being a minor

c. read the statute carefully!i. Typically, if owner is disabled at the time the cause of action accrues, the owner

may bring a suit for some specific period after the disability ceasesd. Future Interest Holders- adverse possession does not cut of their future claim to possession

owns the remainderd. How to deal with a disability problem

i. First calculate based on normal operation of statute of limitationsii. make sure disability exists at the time the cause of action accrues

iii. find the date on which the disability is removed an add 10 yearsiv. if that date puts you past the normal operation of statute of limitations, use

this extended statute of limitations under the disability statute.

1. O is insane 1980. O dies insane and intestate in 2003- SOL is 21 years and 10 year exception for disability

a. O’s heir, H, is under no disability in 2003. H has until 2013 (has full 10 years from removal of disability)

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b. O’s heir, H, is 6 years old in 2003. H has until 2013 ( H wasn’t a minor in 1980- disability wasn’t present when actual entry that began statute of limitations to go)

2.O has no disability in 1980. O dies intestate in 1998. O’s heir, H, is 2 years old in 1998. H has until 2001 (no disability when cause of action accrued)

3. O is 5 in 1980. In 1990 O becomes mentally ill, and O dies intestate in 2005. O’s heir, H, is under no disability. Does adverse possessor acquire title in 2001, 2003, or some later date? 2003 (disability disappeared in 1993); insanity is irrelevant

4. O disappears in 1993 and is not heard from again. You represent B, who wishes to buy from A. What advice do you give B?

XIV. Adverse Possession by Tenants and Co-Ownersa. Tenants- not usually capable of adverse possession because their entry was permissive-

subordinate to owners claim of titleb. Co-owners- usually not capable of adverse possession because every co-owner has equal

right to ownershipi. Adverse co-owner must oust the other co-owner by excluding the co-owner from

possession and claiming sole ownership

Fee Simple Estates

I. Vocabularya. Fee- inheritable interest in landb. Possessory estate- legal right to occupy the land immediatelyc. Future interest- right (and sometimes only the possibility) to possess the land at some

time in the futured. Freehold v. non-freehold estates

i. Freehold- ownership of propertyii. Non-freehold- lease/renting; possession is subordinate to the owner’s rights of

ownershipe. Seisen- possession of a freehold estate land; ownership

i. Means ownership instead of tenancy1. a nonfreeholder can have possession but not seisen

ii. Seizeniii. Seized/seised of the land- to take possession of property

f. Easement- interest in land owned by another person, consenting in the right to use or control the land for a specific, limited purpose

i. Using land but don’t have title (ownership doesn’t change)g. Livery of seisen- delivery of the possession of real property

i. Ex: owner of property who transfers (grantor) would hand over dirtii. Handing over right of possession- grantee is the new freeholder of the estate

h. Fee simple-absolute ownership that is potentially indefinitei. Issue- lineal descendantsj. Collaterals- not an issue or ancestor, but is still a blood relativek. Heir apparent- heir who is certain to inherit property unless he or she dies first or is

excluded by a valid willl. “dead hand control”- ability for people in this generation to control beyond their death

or conveyance to control something about the propertyi. Deciding by deed or will how property will be controlled in the future

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ii. Problem: too much dead hand control, too much inalienable property1. hard to get a loan from bank (bank can’t take it unless they are subject to

controls); can’t seize and sell at auction; hard to get a mortgage2. economic inefficiency

iii. why allow it?- easy to control and easy to transfer or convey to future generationsm. Alienability- power to transfer resources to another person

II. Four types of Freehold estatesa. Fee simpleb. Fee tail- lasts only for the lineal line of the grantee and that endures until its current

holder dies without issuei. “to A and the heirs of his body”

c. Defeasible feesd. Life estate

III. Estate in Land v. Landa. Estate in land is not the same thing as the land itselfb. Estate in land- connected to the land but existing apart from it

i. Consists of a bundle of legal rights and obligations towards other with respect to a particular parcel of Earth (title reality)

ii. Can be conveyed, subdivided, and put back together, but the land itself remains unchanged

IV. 3 ways to transfer titlea. Inter vivos conveyance by deed

i. Granter to granteeii. Operative at the delivery of the deed (when deed is given from grantor to grantee)

b. testamentary (with will) transfer by willi. transfer to devisee

ii. becomes operative at testator’s deathc. intestacy (no will) descent by operation of intestacy statute

i. decedent to heirii. becomes operative at the time of the decedent’s death

V. Limits on Transferabilitya. Purpose of landb. Maintenance of landc. Use of landd. Duration of occupancye. Restrictions or affirmative obligations

VI. How to enforce limitsa. Forfeiture- goes back to grantor or to a third partyb. conditionsc. Legal or equitable relief

VII. Fee Simplea. Also called a fee simple absoluteb. Fee simple absolute- can potentially endure forever

i. Absolute ownership in the duration that it is perpetual (can last forever)ii. Only time it can end is if a shorter estate is carved out (ex: life estate)

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iii. If nothing is done to carve out a smaller estate, it will always be a fee simple and will never change

iv. Ex: A is owner of property in fee simple absolute. When A conveys it to B, B now has possession in fee simple absolute

1. A can’t come back and question how E is handling or property or questioning a subsequent conveyance- A no longer has an interest

c. NOTE: unless mentioned otherwise, assumed Owner has fee simple absoluted. No future intereste. Example:

i. A owns Lot 1 and has title even though B is tenant, C is a bank, and D holds easement

VIII. Evolution of Language Conveying a Fee Simple Absolutea. Common law: fee simple absolute was created by a grant “to A and his heirs” (had to use

those words)i. “To A and his heirs” creates a perpetual estate, presently held by A

ii. “and his heirs”- words of limitationiii. “to A”- words of purchaseiv. Heirs- no interest in the estate at this point

b. Modern View: do not need to use words of limitation- “and his heirs”i. Can just say “to A” and it will be fee simple absolute unless the grant is to the

contrary in deedii. there is a language of conveyance (“O to A”)

iii. there is a legal description that helps locate the property

IX. Alienability and Inheritance of the Fee Simple Absolutea. A fee simple absolute is:

i. freely alienable,ii. devisable by will, or

iii. inheritable in intestacy (the state of dying without a will)b. alienation- owner of a fee simple absolute can convey the entire fee simple absolute to

another personi. fee simple absolute continues- it just has a new owner

c. devisability- land in fee simple absolute can be transferred by will i. devisees – received the transfer of the fee simply absolute from the testator

1. can be anyone prescribed by the will; are not heirs2. person dying with a will has devisees (of real property) or legatees (of

personal property)ii. owner of fee simple absolute can send it under his will to anyone he pleases, or

split it up into pieces that when added together create a fee simple absoluted. inheritance- transfers of property owned by a person dying without a will (intestacy)

i. after A’s death fee simple absolute will be held by heirs in the absence of a willii. heir- only a person dying intestate has heirs

iii. Usual statutory scheme for inheritance: think lineal1. decedent’s property is set aside for the surviving spouse to get a portion

and the remaining to the decedent’s children2. in the absence of a spouse or children, the decedent’s ancestors (parents)

are heirs3. in the absence of a surviving spouse, children, or ancestors, the heirs are

collateral kin a. brothers, sisters, nieces, nephews, aunts, uncles, and cousins

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4. in the absence of collateral kin, it goes to grandparentsa. no grandparents, go lineal to aunts and unclesb. no aunts and uncles, then cousins

5. if there are absolutely no heirs, the decedent’s property will escheat to the state

a. escheat- property goes to the state

X. Inheritance of a Fee Simple Termsa. Heirs- if a person dies without a will (intestate), decedent’s real property goes to heirs

(next of kin get personal property)i. A living person has no heirs!

1. have heirs apparent, but are powerlessii. Persons who survive the decedent and are designated as intestate successors

under the statute of descentiii. Surviving spouse is designated as an intestate successor of some share of

decedent’s landiv. Children will often get a share as wellv. Sequence:

1. first issue2. if no issue, then parents/ancestors3. if none, then collaterals

b. issue- all lineal descendents (children, grandchildren, great-grandchildren)i. does not only refer to immediate children

ii. right of representation- if any child of the decedent dies before the decedent leaving children who survive the decedent, the child’s share goes to his or her children through right of representation

iii. adoption- today, the inherit from adoptive parents and sometimes from natural parents

c. ancestors- by statute parents usually take heirs if the decedent leaves no issued. collaterals- all persons related by blood to the decedent who are neither ancestors or

descendants i. brothers, sisters, nephews, nieces, uncles, aunts, cousins

e. escheat- if there are no heirs, the property goes to the state

Problems- p. 183

3. a) no b) no

Problems- p. 1851. A gets 50% and 3 children get 50% by right of representation. B’s wife doesn’t get anything because B didn’t have an interest to Blackacre when he died2. No. It goes to ancestors. If not ancestors, then collateral kin. Only after there is nobody, then it escheats to the state

Life Estates

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I. Types of Estatesa. Fee Simple- “O to A”b. Life Estate- “O to A for life”c. “O to A for life, then to B”- life estate and B holds remainder in fee simple

II. Life Estatesa. Life Estates- a possessory estate that expires upon the death of a specified person

i. Determined by a regular, measurable life1. a life estate is freely alienable during life, but the transferee receives the

transferor’s life estatea. market value of a life estate is thus a fraction of the value of a

fee simple absolute 2. a life estate can also be defeasible

ii. “O to A for life”1. A- possessory estate2. O- future interest (reversion)3. when A dies, O gets the property in fee simple absolute through

reversioniii. reversion- what O retains in a life estate

1. O has a future interest now, but possession is delayed2. future interest in this case is a property right and is transferable

iv. “O to A for life, then to B”1. no reversion2. B has a remainder (a gift over)3. like reversions, remainders are alienable, devisable, and descendible4. if B dies while A is alive, remainder is part of B’s estate and goes to his

heirs or devisees5. when B takes possession, it is in fee simple

b. life estate pur autre vie- when the duration of a life estate is measured by the life of another

i. ex: A to G for life. G then conveys it to B. B has life estate measured in terms of G’s life

c. life estate lets transferor have some control over estate after A diesd. future interests in life estate

i. reversion- grantorii. remainder- third party

III. Estates and Interesta. Estates- are presently possessedb. Future interests- are present interest in future possession

i. All future interests are:1. alienable- by deed (inter vivos)2. devisable- by will3. descendible- by intestacy statute

c. Termination of a fee simplei. Done by carving estate up into smaller portions

1. ex: creating a life estate

IV. The Modern Life Estate- ***Emanuel p. 38***a. Equitable life estate- property interest, owned for life, in assets of a trust

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b. Legal life estate- estate for life in the assets themselves

V. Judicial Responses to the Inflexibility of the Legal Life Estatea. Best Interests of the All the Parties/ equitable necessity- where it can be proved that the

sale is in the best interest of the parties and is the only practical method to effectuate the grantor’s intention to provide material comfort for the life tenant and preservation of asset value for remainderment, a court may invoke its equity powers and order sale of all or part of the property

i. See Baker v. Weedonb. Waste- life tenant is entitled to all ordinary uses and profits form the land, but must not

commit waste and injure the interests of future takersi. Don’t have a fee simple so you cant do anything you want

ii. Waste- term used to describe actions of the life tenant that permanently impair the property’s value or the interest of the future interest holders.

iii. New cases regard waste as a device to prevent one person from unfairly reaping economic benefits from land possession imposing economic losses on another person who shares an interest in the land

1. affirmative waste- when life tenant acts affirmatively to damage land permanently (also called voluntary waste)

a. ex: life tenant cut down all the timber and burn barn 2. permissive waste- life tenant fails to act reasonably to protect

deterioration; life tenant must act like an “ordinary prudent person”a. ex: failing to pay property taxes or failing to repair roof

3. ameliorative waste- life tenant acts affirmatively to change the principal use of the property and thereby increases the value of the land

a. actionable only where it is clear that:i. grantor intended for no change in use

ii. property may still be used in way grantor intendediv. person holding a future interest can limit what present possessory estate owner

can do 1. can still use, sell, possess, exclude, but must not commit waste

VI. Baker v. Weedona. Weedon devised a farm to his widow, Anna, in a life estate and upon her death to her

children (if she had any) and if not, to the grandchildren from his first marriage. Commercial value of the land rose because it was in the path of urban development. Anna was making $1300 a year from farm. Anna wanted to sell the farm and invest the proceeds to increase her income, but remaindermen were unwilling to do so because they thought the value of the farm was increasing rapidly

b. “John to Anna for life, then to her children, or if no issue, to his grandchildren”c. How did state contact grandchildren

i. Registry of probate and/or deeds at the county leveld. grandchildren didn’t want to sell because they wanted the maximum value of propertye. court looks at competing claims throughout he best interests of the parties and avoidance

of wastei. sells only part of land to settle Anna’s financial woes and leaves the rest for the

grandchildren that could appreciate the valuef. hypothecate- pledging property as collateral for a loan

i. together, Anna and grandchildren make a fee simple

Problems- p. 142

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2.In 1990 A enters adversely upon Blackacre, owned by O. In 1991, O dies, leaving a will that devises Blackacre to B for life, remainder to C. In 2006 B dies without ever having to enter Blackacre. Who owns Blackacre?

- A owns Blackacre. A gains a fee simple because that’s the type of estate it was when the cause of action accrued. Just because estate changed is immaterial

3. O, owner of Blackacre, dies in 1991 devising “to B for life, remainder to C.” In 1992, A enters adversely upon the land. In 2006 B dies. Who owns Blackacre”

- A has life estate for the life of B’s life (pur autre vie)- When B dies, C (who has fee simple) can get them off the property. Cause of action starts all

over again! If they can get AP over C’s possession of life estate, A has a fee simple

Possessory Estates in Land

I. Possessory Estates in Landa. Freehold Estate- system of ownership

i. Fee simple - fully alienable; no restrictions or ability from previous owners to reach out and control use

ii. Life estate - usually disposing of property to family members and controlling someone who has a claim to property during and who takes it after life

1. reversion- goes back to owner, or their devisees or heirs2. remainder- to a third party or multiple third party

iii. Defeasible fee 1. fee simple determinable2. fee simple subject to a condition subsequent3. fee simple subject to an executory limitation

b. Non Freehold Estate- system of non-ownership (renter)i. Leasehold

Defeasible Fees

I. Defeasible Feesa. Defeasible fees- a fee simple that is subject to termination upon the happening of a future

event; doesn’t have to terminate1. strings attached, earmarking of funds

ii. Future even may never occur, in which case it endures as long as a fee simple absolute

b. Distinction between fee simple absolute and defeasible fee simplei. Fee simple absolute cannot terminate or divest based on a future event

ii. Defeasible fee is subject to termination or divestment upon the occurrence of a future event

c. Three Types of Defeasible Feesi. Fee simple determinable

ii. Fee simple subject to a condition subsequentiii. Fee simple subject to an executory limitation

d. used for charitable giving or controlling families

II. Future Interesta. Future interest- interest in property now, but possession is delayed; in defeasible fees the

future interests are:i. Possibility of reverter

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ii. Right of entry iii. executory interest

III. Fee Simple Determinablea. Fee simple determinable- created when grantor intends to grant a fee simple only until a

specified future event happens and uses language in the grant to manifest the intenti. Is limited durationally

ii. But could continue forever if even doesn’t happenb. words of duration that hint at fee simple

i. whileii. during the time that

iii. during the period thativ. for so long asv. until

c. possibility of reverter- interest retained in a fee simple determinablei. ex: estate is divided in present possessory estate (fee simple determinable) and

future interest (possibility of reverter) and added together create a fee simple absolute

d. automatic reversion in a fee simple determinable i. some courts do not like automatic reversion

ii. most courts reject self-help unilateral actse. still need to keep adverse possession in mindf. transferability - transferee takes the estate subject to the limitation that keeps it defeasible

i. alienableii. devisable

iii. descendibleg. example: “O to A for so long as the property is used for library purposes”

i. A has present possession until the property is ceased to be used for library purposes and if they don’t use it that way, O gets right to present possession

IV. Fee Simple Subject to a Condition Subsequenta. Fee simple subject to a condition subsequent- grantor intends to convey a fee simple

absolute, but has attached a string to the grant so that if a specified future event happens (condition subsequent) the grantor may pull the string and get his fee simple absolute back

i. Preferred more than a fee simple determinable because transfer is not automaticb. contrast with fee simple determinable

i. in FSSCS, there is a full grant of the fee simple, but it can be lost if right of entry is exercised

ii. in FSD, grantor retains possibility of reverterc. words to make FSSCS

i. but ifii. provided

iii. howeveriv. on the condition thatv. must

d. right of entry- interest retained by grantor in FSSCSi. action is necessary to assert right of entry

ii. don’t need to actually enter and take possession, but must do more than proclaim his intention to retake possession

e. not automatic- grantor must actually exercise right of entry for fee to come to an end

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i. has an option to terminatef. transferability- freely transferable

i. alienableii. devisable

iii. descendibleg. Preference for FSSCS

i. Courts don’t like the automatic forfeiture ii. Ambiguous cases- courts prefer to find fee simple subject to condition

subsequent1. makes forfeiture an option

h. example:i. “O to A, but if property ceases to be used for library purposes, then O retains

right of entry”ii. What if O never comes back? A is not trespassing and retains possession

i. laches- if a party is sleeping on their rights, coupled with a long period of time where they have not come forward, they lose their right to make a claim in equity

i. controls O’s ability to make a claim after failing to use right of entryii. similar to adverse possession

j. Mountainbrow Lodge No. 82, Independent Order of Odd Fellows v. Toscanoi. Habendum clause in will devising property to OOF- “Said property is restricted

for the use and benefit of OOF only; and in the event the same fails to be used by the OOF or in the event of sale or transfer by OOF part of all or any part of said lot, the same is to revert to the first parties herein, their successors, heirs, or assigns”

1. uses word revert- sounds like FSD2. rest sounds like a FSSCS

ii. why prefer FSSCS over FSD1. best use of property2. automatic reversion- person may not know it is theirs3. places burden on holder of right of entry rather than present possessor

iii. Odd Fellow argument- habendum clause restricts alienability and is therefore void

iv. Toscano argument- it is a fee simple subject to condition subsequentv. Issue: is it a FSA or a FSSCS?

1. court says you cant use a direct restraint on alienation2. “or” allows you to splice it and treat it as a FSSCS

vi. question: should we tolerate use restrictions for property to be used by certain people for specific purposes?

vii. Cast v. National Bank test- if condition subsequent expressly limits to an impermissibly small number of persons, it is void and unenforceable

1. what does “impermissibly” mean?

V. Fee Simple Subject to an Executory Limitationa. Fee simple subject to an executory limitation- fee simple that is divested (shifted) from a

transferee to another transferee upon the occurrence of some future eventi. Fee simple subject to an executory limitation- interest created in initial transferee

b. O doesn’t retain an interest, so if there is a breach or forfeiture, it goes to a third partyc. Executory interest- future interest created in a third partyd. Example:

i. “O to A for so long as property is used for library purposes, then to B”1. fee simple determinable example

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ii. “O to A, but if property is not used for library purposes, then to B”1. fee simple subject to a condition subsequent example

e. automatic- prevailing doctrine transfers fee to third party automatically, regardless if it is a FSD or a FSSCS

f. B gets interest automatically and it is in fee simple absolutei. If A is adversely possessing, up to B to call them on it

VI. Notea. Watch out for covenants- a formal agreement or promise

i. “O to A. A promises to use property for library purposes only”ii. Non-possessory interest enforceable either by injunctive or monetary damages

iii. Make sure it is drafted correctly

VII. Standardization of Estatesa. Once you label something, for example as a fee simple subject to a condition subsequent,

all the other characteristics fall in linei. If bad drafting causes ambiguity in the type of fee simple, court has to choose

what type it isb. numerus clausus- requires standardization of the type of property so people understand

their rights and what they are getting

Restraints on Alienation of Freehold Estates

I. Generally voida. Restraints on alienation of a freehold estate are generally voidb. Types:

i. Forfeitureii. Disabling

iii. Promissory

II. Forfeiturea. Causes forfeiture of the estate if alienation is attempted

i. Ex: “O to M, but if she ever attempts to transfer it, to J”

III. Disablinga. Disables owner by depriving them of any power to transfer the estate

i. Ex: “O to M, but no further transfer of the property shall be valid”

IV. Promissorya. Purports to extract a promise from the transferee that they will not alienate the property

i. Ex: “O to A, and A promises not to alienate the property”

V. Total and Partial restraints on a Fee Interesta. Total- generally void

i. Reasons:1. economic efficiency

b. Partial- some are valid, but most are voidi. is valid if it is for a reasonable purpose and limited in duration

VI. Restraints on Life Estates

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a. Are the most readily upheld, but validity depends on the type of restraint and type of life estate it is applied to

b. Legal Life Estates i. Restraint on alienation is to prevent gift of the estate or credit seizure of it

ii. Most courts void disabling restraints1. some courts will uphold promissory and forfeiture because these

restraints can be releasedc. Equitable Life Estates

i. Disabling restraints usually freely permitted1. ex: spendthrift trust- provides spendthrift relative with an income, but

prevents them from pledging trust assets as security or trying to use it as collateral to get credit

VII. Words Stricken in Voiding Restraints on Alienationa. Words that are stricken matterb. In 1973 B to S, only so long as it is done by 2003

i. B retains possession (strike everything from “to S….”)c. In 1973 B to S, but if S never sells, then B has a right of entry

i. S retains possession (strike everything from “but if…”)

Trusts

I. Trustsa. Another way of splitting titleb. Maintains the interests (life estate, future interests) but places an overlay on top of it

i. Trustee- holds a legal title in fee simple absolute1. can sell, mortgage, rent the property in fee simple to get value out of

property while the life tenant gets income and remainders get property’s value at the end of life tenant’s life

ii. in life estate, life tenant and remainder hold equitable titleiii. equitable life estate- life estate in trust that has a trustee holding title fee simple

c. trustee has fiduciary duties to those who have title in equityi. property in trust is constantly changing because trustee is selling (stocks, bonds,

jewelry) and retaining the proceeds and creating an income stream through investments for those who have equitable title

ii. property can become income producing

II. Division of Legal Ownership and Equitable/Beneficial Ownershipa. Central feature of the trust is legal/equitable division b. How a trust works

i. Trustor (also called settlor) transfers legal title of all his assets to a trusteeii. Trustee- becomes legal owner of the assets, but is charged with the responsibility

to manage those assets for the economic benefit of the trust beneficiaries, who have equitable ownership of the assets.

III. Advantages of the Trusta. Enables person to place assets in the hand of a property manager who can sell assets and

acquire new ones (adapt to changing conditions) b. Great flexibility in property management and concentration of assets for the benefit of the

identified beneficiaries for some distance into the future, even beyond life of trustor

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FUTURE INTERESTS

I. Future Interestsa. Future interests- interests that are not possessory, but are capable of becoming

possessory at some time in the futurei. it is a presently existing property interest but confers only a future right to

possession

II. 5 Types of Future Interestsa. Retained by grantor

i. Possibility of reverterii. Reversion

iii. Right of entryb. Retained by grantee

i. Contingent remainder:1. vested2. contingent

ii. Executory interest1. shifting2. springing

Interests Retained by Grantor

I. Reversiona. Future interest created when grantor conveys a lesser estate than that he originally

ownedb. Transferability- freely alienable, devisable, descendiblec. Created automatically whenever grantor conveys less than his entire interest in the

property- does not need to be expressly retained d. Does not necessarily become possessory in the future:

i. Ex: “O to M for life, then to A and her heirs if she survives M”e. reversion always follows a contingent remainderf. a reversion is not created when grantor conveys to one person part of his estate and

simultaneously conveys rest of his estate to anotheri. ex: J to E for life, then to R and her heirs

g. always vested: reversions are always vestedi. vested: must be created in a known person and not be subject to a condition

precedenth. distinguishing between reversion and:

i. right of entry- right of entry applies to FSSCSii. possibility of reverter- applies to FSD

i. lapse- future interests can lapse, meaning they are no longer interests

II. Possibility of Revertera. Future interest created when the grantor conveys the same quantity of estate that he

originally had, but conveys it with a determinable limitation attached and retains the right to future possession if and when the determinable limitation occurs.

i. Ex: B to P so long as it is used a warehouse1. P- fee simple determinable2. B- possibility of reverter

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b. when a determinable estate is created the grantor retains a possibility of revereter, unless the grantor simultaneously conveys in a third party what would be a possibility of reverter if retained by the grantor.

i. Would then be an executory interest in the third partyc. transferability- most states today permit a possibility of reverter to be:

i. alienatedii. devised

iii. inheritedd. possibility of reverter and right of entry can endure forever because:

i. triggering limitation may never occurii. both future interests are vested at creation, so they are immune from RAP

III. Right of Entrya. Future interest created when the grantor retains the power to cut short the conveyed

estate before its natural terminationi. Ex: H to O, but if property should ceased to be used for pasturing horses, H may

terminate the conveyed estate before its natural terminationb. retained when interest conveyed is a fee simple subject to condition subsequentc. transferability: jurisdictions today are split over whether to follow common law rule or

to permit free alienability

Future Interests Created in Grantees

I. Remaindera. Future interest created in a grantee that will become possessory (if it ever becomes

possessory) upon the natural expiration of the preceding possessory estatei. Never divests another estate- always accompanies a preceding estate of known or

fixed years (ex: life estate)b. nature of the estate held in remainder

i. can be any: fee simple, life estate, etc. (be sure to identify both the future interest and possessory estate)

c. classified as:i. vested remainders

ii. contingent remainders

II. Vested Remaindersa. A vested remainder is created if there is:

i. An ascertained (known) personii. Possession is not subject to any condition subsequent

b. natural expiration of a preceding estate is not a condition precedentc. Three types of vested remainders:

i. Indefeasibly vested remaindersii. Vested remainders subject to complete divestment

iii. Vested remainders subject to open (or partial divestment)

III. Indefeasibly Vested Remaindersa. Is certain to become both become and remain possessory

i. Nothing will prevent possession from happening, and once possession occurs, it will last forever within its natural or inherent limits (is not divested)

IV. Vested Remainders Subject to Complete Divestment

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a. Remainder created in a known person and not subject to any condition precedent, but which is subject to a condition subsequent that if it occurs, will completely divest the remaindermen of his interest

b. Transferability- are still vested and are alienable, descendible, or devisable

V. Vested Remainders Subject to Open or Partial Divestmenta. Remainder created in a class (or group) of grantees, at least one of who is presently

existing and entitled to possession as soon as the preceding estate expires, but which is capable of expansion to include as to yet unknown people

i. Ex: R to H for life, then to such of my children who have graduated from law school

1. once one of the children graduate from law school, it becomes vested, but it is subject to open

b. vested remainder subject to open are vested even though they are subject to dilution, the interest will survive its holder

c. when it is ambiguous, courts prefer a vested remainder to a contingent remainderd. class- is open if it is possible for new people to enter it, and is closed if new entrants are

not possiblei. class-closing rules- when either of two events occurs:

1. no longer physiologically possible to have new entrants2. “rule of convenience” applies- that a class closes if any member of the

class is entitled to immediate possession and that result is consistent with the intent of the grantor making the class gift (when any member can demand possession)

VI. Contingent Remaindersa. Remainder created in:

i. Unknown person or has a condition precedent to ultimate possessionb. are not certain to becoming possessoryc. contingent remainder will always leave a reversion in the grantord. interest after a contingent remainder must always be a contingent remainder

i. when contingent remainder vests, it becomes an executory intereste. condition precedent

i. must be expressed in the grant1. H to A for life, then to E if she graduates from Harvard

a. If she graduates from college is a condition precedent (contingent remainder)

f. condition precedent v. condition subsequenti. if condition is made an integral part of the grant in remainder, it is a contingent

remainder. But if the grant uses words to create a vested interest, and then proceeds to add a divesting condition, it is a vested remainder subject to partial or complete divestment

g. alternative contingent remaindersi. A to B for life, then to C if she has never gone to Canada, but if she has ever

gone to Canada, to Dii. Ask “when one vests, does the other drop out?” if yes, there is alternative

contingent remainderh. successive contingent remainders

i. ask “when one vests, does the other drop out” if no, it is successive contingent remainder

i. transferability: today nearly every jurisdiction permits alienable of contingent interests

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i. if the contingency is survival, the interest cannot pass by will or intestate succession, and if the contingency results from the fact that the holder is unknown there is no owner to convey it, so as a practical matter it is not alienable

VII. Executory Interestsa. Future interests in a grantee that divest either:

i. Another grantee’s possessory or future interest (shifting executory interest)ii. The grantor’s interest at some future time (springing executory interest)

b. shifting executory interesti. “O to A and her heirs, but if B returns from Canada sometime next year, to B and

his heirs.”1. B- shifting executory interest (can divest A’s possession)2. A- fee simple subject to an executory limitation

c. springing executory interesti. O conveys “To A, if an when he marries.” A is unmarried

ii. O conveys “To A, if and when he becomes a lawyer.” A is in high school.

Future Interest Examples

I. O to A for life, then B.a. O- holds nothingb. A- life estatec. B- indefeasibly vested remainder in fee simpled. If B has no heirs, vested remainder in fee simple escheats to the State

II. O to A for life, then to B for life.a. A- life estateb. B- indefeasibly vested remainder in a life estatec. O- reversion in fee simple after consecutive life estate endsd. B’s future interest lapses when B dies

III. O to A for life, then to B for life, then to C.a. A- life estateb. B- indefeasibly vested remainder in life estatec. C- indefeasibly vested remainder in fee simple

i. Gets possession after consecutive life estates endd. if B dies before A, C gets possession after A diese. if C dies, it goes to his heirs or devisees or he can transfer it during his life

IV. O to A for life, then to B if B survives A.a. A- life estateb. B- contingent remainder in fee simple

i. Doesn’t cut A’s interest shortc. O- reversion in fee simpled. If B survives A, O’s reversion lapses

V. O to A for life, then to A’s first born.a. A- life estateb. A’s first born- contingent remainder (becomes vested remainder in fee simple when A’s

first child is born- ascertained person)c. O- reversion until A’s first born is born

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VI. O to A for life, then to A’s youngest child.a. A- life estateb. A’s youngest child- contingent remainder in fee simple c. O- reversion in fee simple if A doesn’t have children (common law: reversion lasts until

A dies)d. Vests in possession

VII. O to A for life, then to B if B attains age 21 before A dies (B is 15).a. A- life estateb. B- contingent remainder in fee simple (condition precedent)c. When B attains age 21, it becomes a vested remainder in fee simple (vests in interest)d. O holds reversion in fee simple, but once B turns 21 when A is alive, O’s interest lapses

VIII. O to A for life, then to B if B gives A a proper funeral.a. A- life estateb. O gets possession between death and funeralc. B- springing executory interest in fee simple

i. Not a contingent remainder because it can never become possessory upon A’s death

d. O- reversion in fee simple subject to an executory limitation when A diesi. Can become fee simple if B doesn’t give a proper funeral

IX. O to A for life, then to B for life, then to C if C survives A and B.a. A- life estateb. B- vested remainder in a life estatec. C- contingent remainder in fee simpled. O- reversion interest in fee simple (if C doesn’t survive A and B, it reverts back)

X. O to A, but if B graduates from medical school, then to B.a. A- fee simple subject to an executory limitationb. B- shifting executory interest in fee simple (cuts shorts A’s life estate)c. O- holds nothing

XI. O to B upon B’s graduation from medical schoola. O- fee simple subject to an executory limitation

i. Has present possessory interestb. B- springing executory interest

XII. O to A for life, then to B if B graduates from medical schoola. A- life estateb. B- contingent remainder in fee simplec. O- reversion in fee simpled. If B dies before A dies and doesn’t graduate, reverts back to Oe. If B graduates before A dies, B gets a vested remainder in fee simplef. If A dies before B graduates, reverts to O and holds a fee simple subject to an executory

limitation and B has a springing executory interest

XIII. O to A for life, then to A’s childrena. A- life estateb. A’s children- contingent remainder (unascertained and need a condition precedent)c. When A has a child, A’s child has a vested remainder subject to open

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i. Class closes at A’s death

XIV. O to A for life, then to B, but if B does not survive A, to C. a. A- life estateb. B- vested remainder subject to complete divestmentc. C- shifting executory interestd. If B dies before A, C then has a vested remainder in fee simple

XV. O to A for life, then to B if B survives A and if B does not survive A, to C.a. A- life estateb. B and C- alternate contingent remainders (conditions precedent)c. O- holds reversion (always hold a reversion when there is a contingent remainder)

XVI. O to A for life, then to A’s first child, but if that child does not survive A, then to Ba. Assume A has no childrenb. A- life estatec. A’s first child- contingent remainderd. B- successive contingent remainder

i. Vested in interest when A’s child is born but B’s interest does not drop oute. Contingent remainder always followed by another contingent remainderf. When contingent remainder becomes vested, it becomes an executory interest

Possessory Interests in Land

Freehold Nonfreehold

Present Future Later

Fee Simple (none)

Life Estate ReversionRemainder

-vested-indefeasibly vested-vested subject to open-vested subject to total divestment

-contingent-contingent-alternative contingent remainders-successive contingent remainders

Defeasible Fee-FSD Possibility of Reverter-FSSCS Right of Entry-FSSEL Executory Interests

-shifting-springing

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p. 238

a. C) O to A for life, then to B and her heirs, but if A is survived by any children, then to such surviving children and their heirs”- A is alive and has two children, C and Di. A- life estate

ii. B- vested remainder subject to total divestment (with a condition subsequent afterwards)iii. Surviving children- shifting executory interest that can divest B’s interestiv. O- retains nothingv. C and D- doesn’t add anything to the problem

b. B) O to A for life, then to such of A’s children as survive him, but if none of A’s children survives him, to B and her heirs.- A is alive and has 2 children, C and D

i. A- life estateii. A’s surviving children- contingent remainder

1. can only identify at A’s deathiii. B- contingent remainder

1. when A dies, interest of surviving children vests2. alternative contingent remainders

iv. O- reversion1. any time there is a contingent remainder there is a reversion2. life estate might terminate before the end of A’s life

c. A) O to A for life, then to A’s children and their heirs, but if A at A’s death is not survived by any children, then to B and her heirs.- A is alive and has no children

i. A- life estateii. A’s children- contingent remainder

iii. B- contingent remainderiv. Two years after conveyance, twins, C and D, are born to A.

1. A’s children- vested remainder subject to open divestment and subject to total divestment because B’s interest is a shifting executory interest because it is a divesting interest

v. when no children, it is successive (interest in B did not drop out)vi. O- no reversion (lapsed when A’s children were born)

RULE AGAINST PERPETUTITIES

I. Rule Against Perpetuities (RAP)a. Rule was needed that would apply to all contingent future interests to prevent uncertainty

about future ownership and possession from continuing so far into the future that land would become inalienable

b. Certain kinds of future interests are void if there is any possibility, however remote, that the given interest will vest more than 21 years after the death of a measuring life

c. No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest

d. How does RAP promote alienability?i. Limits dead-hand control

ii. Strikes contingent interestiii. Limits times contingent interests can be contingentiv. Protection of this generation, plus 21 years

II. RAP applies to:a. Contingent remaindersb. Executory interestsc. Vested remainders subject to open

i. Class gifts

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d. Options/rights of first refusal

III. RAP does not apply to:a. Present possessory estatesb. Vested remaindersc. Reversionary interests: are deemed vested

i. Possibility of reverterii. Reversions

iii. Right of entry

IV. Brief Summary of the Rulea. Vest- RAP is designed to eliminate uncertainty about ownership that persists too long

i. If an interest is certain to vest or certain not to vest within the permitted period it is good

ii. If there is any possibility, no matter how unlikely, that vesting could occur after expiration of the permitted period the interest is void

iii. An interest is vested in RAP when it is either vested in possession or vested in interest

b. Permitted Period of Uncertaintyi. An interest is good if it will vest or certainly vail to vest within:

1. 21 years from its creation, or2. during the life of some person alive at its creation, or3. upon the death of some person alive at its creation, or4. within 21 years after the death of some person alive at its creation

ii. RAP requires you to identify some person, living on the effective date of the grant, whose live can serve as the validating life for the interest in question

c. Validity Tested at Creation- validity of future interests under RAP is tested when they are created

i. If you can prove it is certain to vest or fail to vest within the permitted period, it is valid

ii. If you can prove a single scenario, no matter how remote, in which vesting may occur after period, the interest is void

d. class gift- for purposes of RAP, a gift to a class of people is not vested in any member of the class unless it is vested in every member of the class. Thus,

i. the class must be closed and ii. Any conditions precedent must be satisfied by every member of the closed class

V. Validating Livesa. To validate future interests under RAP, you must prove that the interest is certain to vest

or fail to vest within the lifetime of one or more person alive when the grant becomes effective, or within 21 years after the death of that person or persons

b. Lives in being, plus 21c. Look for Validating Life Among these 4 categories of persons:

i. Preceding life tenantii. Taker of contingent interest

iii. Person who affects condition precedentiv. Person who affects identity

d. Life must be relevant to the interest in questione. Can name people and you won’t get into any problemsf. Base it on a popular family

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i. O to my lineal descendants alive 21 years after death of last Rockefellar alive at time interest was made dies

ii. Way to get around dead hand controlg. A person in a life in being if in utero at the effective date of the granth. Class of persons as measuring lives: every possible member of the class must be alive at

the effective date of the grant (class must be closed)

VI. Charity-To-Charity Exceptiona. An executory interest following a defeasible fee is exempt from the RAP if the defeasible

fee and the following executory interest are both owned by charities

VII. Classic Traps Under RAPa. Fertility- RAP presumes that a person of any age, whether male or female, can produce a

childb. Unborn Widow- a bare reference to “A’s widow” is construed to refer to the unknown

person who answers that description on A’s death not necessarily the person who is A’s wife when the instrument is drafted

VIII. Applicability of RAP to commercial transactionsa. The Symphony Space, Inc. v. Pergola Properties, Inc.

i. Common law approach to commercial optionsii. In 1978, Broadwest sold a building in Manhattan to Symphony for much less

than its real value, in return for which Broadwest leased much of the building for a nominal rent and obtained an option to purchase the building, exercisable at any time until July 2003

1. why have option exercised at intervals? To see if property will improve over time

iii. SS Lawyer realizes the option can be exercised after 21 yearsiv. Must vest or fail to vest within 21 yearsv. Court applied RAP to commercial options, and because it could be exercised

after 21 year period, it was voidvi. Theories:

1. no incentive to improve building 2. foreclosed sale to someone other than optionee who could make better

use of the land

IX. Uniform Statutory Rule Against Perpetuities (USRAP)a. Adopted in 25 states- exempts options and other commercial transactions form the RAP

X. RAP and Commercial Transactions and Corporationsa. No lives in being formula, so it only has a 21 year windowb. Options to purchase- holder of option decides when it can vest (acts like a right of entry,

but right of entry not subject to RAP)c. Rights of first refusal- requires the owner, if and when she decides to sell, to offer the

property first to the holder of the rightd. In most cases, options to purchase and rights of first refusal are subject to RAPe. Disincentives to options:

i. Lack of incentive for property owners to improve the property (don’t know how long they will have to give it up)

ii. Option’s existence likely forecloses sale to others

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XI. RAP Reformsa. Wait and see doctrine- evaluates the validity of future interests under RAP as events

unfolded, not at the time of creation of the interestsi. Focus is on what actually happens, not on what might happen

ii. Eliminates “what if” or “anything is possible” line of inquiryb. USRAP- provides for waiting for a maximum of 90 years after the creation of the interest

to see if it has vestedc. Cy pres- judicial reformationd. NJ repealed RAP by statute

XII. Savings Clausea. Savings clause- designed to terminate the trust, and distribute the assets, at the expiration

of a specified measuring life plus 21 years, if the trust has not earlier terminated

RAP Examples (also get questions from p.248-49)

I. Obvious Remote Vesting a. Ask: “can it vest hundreds of years from now?”b. O to A, but if liquor is ever sold on the premises, then to B

i. A- FSSEL (condition subsequent)ii. B- shifting executory interest (divests A’s interest)

iii. B can take possession within any period of time, so B’s interest is void1. potentially infinite

iv. O to A remains (left with fee simple absolute)- everything else is strickenv. How to get around it:

1. O to A, but if liquor is ever sold on the premises, O has right of entrya. Can sell right of entry to B

c. O to Charity A, but if liquor is ever sold on the premises, then to Charity Bi. Charity-to-charity exception

ii. If one isn’t a charity, it doesn’t applyd. O to A upon completion of the office tower

i. O- present possessory interest (fee simple subject to an executory limitation)ii. A- springing executory interest

iii. Void- never says period of time it must be completed iv. O retains fee simple absolutev. Could have said “if completion is done within 21 years”

e. O to A for so long as liquor is never sold, but if it is sold, then to Bi. A- fee simple determinable

ii. Void- never says B will vest or not vest within 21 yearsiii. O- possibility of reverter

II. Preceding Life Tenant a. O to A for life, then to first child of A- assume A has no children

i. A- life estateii. First child of A- contingent remainder in fee simple (unascertained)

iii. O- reversion in fee simpleiv. Valid- interest of first child of A will vest or fail to vest within A’s lifetime or at

the death of A at the very latest1. contingent remainder will turn into a vested remainder

b. O to A for life, then to A’s children who survive Ai. A- life estate

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ii. O- reversion in fee simpleiii. A’s children who survive A- contingent remainder in fee simpleiv. Valid- know A’s children who survive A at A’s death

1. becomes vested at A’s deathc. O to A for life, then to A’s children who reach 21.

i. A- life estateii. A’s children who reach 21- contingent remainder in fee simple

iii. Valid- If she has kids, they will surely reach 21 within 21 years after A’s death (will vest)

iv. If she had kids who reached 21 and A is still alive, it is a vested remainder subject to open

d. O to A for life, then to A’s children who reach 25.i. A- life estate

ii. A’s children who reach 25- contingent remainderiii. O- reversion in fee simple after A’s deathiv. Void- may not vest within 21 years after A’s death

1. can turn 25 outside lives in being, plus 21e. O to A for life, then to A’s children who graduate from college.

i. A- life estateii. A’s children who graduate from college- contingent remainder in fee simple

iii. O- reversion in fee simpleiv. Void- possibility of vesting or not vesting 21 years after A’s deathv. Even if some children graduate, it is a vested remainder subject to open

vi. Could say “to A’s children who graduate from college within 21 years of A’s death”

III. Taker of Contingent Interest a. O to A for life, then to B if B reaches 50 – B is 2 years old

i. A- life estateii. O- reversion in fee simple

iii. B- contingent remainder in fee simpleiv. B is the validating lifev. B is alive at the time of the grant and will either turn 50 or die before turning 50

1. will happen, if it does, when B is alive2. will know within 21 years after B’s death- valid

IV. Person Who Affects Condition Precedent a. O to A for life, then to B if C graduates from medical school

i. A- life estateii. B- contingent remainder in fee simple (condition precedent- can’t vest until C

graduates from medical school)iii. O- reversion in fee simpleiv. Run A, B, C through lives in being, plus 21 test

1. will B’s interest vest or fail to vest during A’s life, at death, or 21 years after A’s death? Don’t know

2. will B’s interest vest or fail to vest during B’s life, at death, or 21 years after B’s death? Don’t know

3. will B’s interest vest or fail to vest during C’s life, at death, or 21 years after C’s death? Yes

a. C is the validating lifev. valid

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vi. when A dies, B holds springing executory interest

V. Person Who Affects Identity a. O to A for life, then to B’s children- assume B has no children

i. A- life estateii. O- reversion in fee simple

iii. B’s children- contingent remainder in fee simple1. if child is born, it becomes a vested remainder subject to open2. know who all the children are when B dies and interest vest

iv. when parent dies, everyone is identified1. at B’s death, B’s children becomes known

VI. Afterborn Problem a. If you realize you cant have a validating lift because of an afterborn, it is void

i. Precludes the validating lifeb. When it is void, you strike the portions that are void there are previous grants that are

validc. T to my grandchildren who reach 21- assume no grandchildren valid

i. T- testator (operative when testator dies)ii. Grandchildren- springing executory interest

iii. Testator- fee simple subject to an executory limitationiv. How to get the validating life- persons affecting the identity of the taker- T’s

childrenv. Last of T’s grandchildren will or will not turn 21 within 21 years of the last of

T’s children’s death (know whether it will vest or not)vi. T’s children are known at T’s death and the grandchildren are known at T’s

children’s deathd. O to my grandchildren who reach 21- void

i. O- gives deed inter vivos (operative upon delivery)ii. Life in being has to be alive when transfer becomes effective

iii. O might have another child before death (X)1. child born to X may or may not turn 21 within 21 years of the delivery of

the deed2. O’s new child would not be tied to 21 year formula so those born after

grant are not in grant and it is voide. O to my grandchildren born to my children A and B who reach 21- valid

i. A and B are defined children and close that classii. A and B are the validating lives

iii. The children born to A and B will be known when the last of A and B die, and will turn 21 before A and B’s death, at their death, or 21 years after the last of their deaths.

iv. Defined children helps remove the afterborn problemf. T to A for life, then to A’s children for their lives, then to B’s children- valid

i. B- validating lifeii. Will know B’s children at B’s death (vests in interest after being a contingent

remainder)

VII. P. 249- Problems and Notesa. 6. T to A for life, then to A’s children for their lives, and upon the death of A and

A’s children to…..i. B if A dies childless- valid

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1. vests at A’s death (know if A has any children)ii. B if A has no grandchildren then living at the time of A’s children’s death-

void (afterborn problems)1. void because we don’t know if all of A’s children have been born

a. can have a child after the devise so it wouldn’t satisfy lives in being, plus 21

b. no validating life- no way to tie B’s vesting to A’s childreniii. B’s children then living- void

1. doesn’t vest in possession until all the life estates prior or over- last one is at the time of A’s children’s deaths

2. The words "then living" refer to the time when the life estates of A's children have ended, but this class of A's children is not closed when the devise is made. There could be afterborn children whose life estates end well after a period of lives in being plus 21. That would mean the contingent remainder in B would be vesting remotely.

CONCURRENT OWNERSHIP

I. Concurrent Ownershipa. Concurrent ownership- when same interest in property is owned by more than one

person at the same timeb. 5 forms (we study only main three)

i. Tenancy in commonii. Joint tenancy

iii. Tenancy by the entiretyiv. Co-parencyv. Tenancy in partnership

II. Tenancy in Common a. Tenants in common own separate but undivided interests in the same interest in propertyb. Each tenant owns the entire property, but must necessarily share that ownership with the

other tenants in commonc. Transferability

i. Alienableii. Descendible

iii. Devisabled. Rights to Possession

i. Unity of possession: Each tenant in common is entitled to possess the entire property

1. ex: a 50% or 1% owner of property in common can use the entire property

e. Presumption of tenancy in common:i. By statute or judicial decision, a conveyance of real property to two or more

persons who are not married to each other is presumed to convey a tenancy in common when there is ambiguity (presumption is rebuttable)

f. Examples:i. O to A and B- tenancy in common in fee simple

1. if A conveys A’s ownership to C, it means that B and C are now concurrent estate owners in common

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2. if B dies without a will, it goes to B’s heir- C and B’s heir are 50, 50 owners

ii. O to A for life, then to B & C1. concurrent interests can live in the future interest world2. B & C- vested remainder in fee simple held as tenant in common

iii. O to A for life, then to A’s children1. A’s children- contingent remainder in fee2. when one child is born, it is a vested remainder subject to open3. more than 1 child- vested remainder subject to open in fee simple

held as tenancy in commong. no survivorship rights- no survivorship rights among tenants in common- may be

alienated, devised, or inherited separately from the other tenancy in common interestsh. can cause problems:

i. concurrent owners may not like each other after property is passed downi. if it is an intestacy (no will), it will be a tenancy in common

i. in joint tenants you need language to create a joint tenancy so the language is not created to create a joint tenancy because there is no language

j. Why prefer a tenancy in commoni. Promotes alienability

ii. Survivor determines the disposition of the property in the end in a joint tenancy

III. Joint Tenancya. Joint tenants own an undivided share in the same interest in property, but the surviving

joint tenant owns the entire estateb. Right of survivorship- hallmark of joint tenancy and main difference with tenant in

common. i. Upon the death of one tenant, the share held by the remaining joint tenants

increase proportionatelyii. Both hold 100% interest

iii. Ex: A and B own equal interest in property as joint tenants; If A dies, B takes possession of the entire property and A’s interest (joint tenant simply drops out of ownership unit)

iv. Right of survivorship is not a future interest (it is a mere expectancy and a gamble)

c. Creation of Joint Tenancy:i. Can only be created by inter vivos conveyance or a will

ii. Property acquired by multiple heirs through intestate succession is taken as tenants in common.

iii. A tenancy in common is presumed, unless there is clear evidence of joint tenancyiv. Modern presumption can be overcome only by a clearly expressed intention in

the grant itself1. O to A and B as joint tenants with the right of survivorship (anything

less than this phrase, it is likely presumed to be tenancy in common)d. Not Subject to Probate- an expensive, cumbersome, time-consuming judicial procedure

to transfer a decedent’s property e. Creditors of a joint tenant must seize and sell the debtor’s joint tenancy interest during

the debtor’s life because the joint tenant debtor’s interest disappears at his deathf. Evidence insufficient to form a Joint Tenancy:

i. “To A and B as joint tenants”

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ii. “To A and B jointly”iii. “To A and B as joint tenants, then to the survivor and her heirs”

IV. Four Unities of Joint Tenancy- interests of joint tenants must be equal in every respecta. a. If 4 unities are not satisfied, a tenancy in common is resultedb. Four unities must be meant; All Joint Tenants must their interests:

i. at the same time1. must receive their interests at the same moment in time

ii. under the same instrument1. must receive their interests under the same instrument: a deed, a will, or

a decree quieting title by joint adverse possessioniii. with the same interests

1. means two things:a. each joint tenant must have same share of undivided whole

i. ex: 2/3 to J and 1/3 to B- tenants in commonb. each joint tenant must have the same durational estate

i. ex: O to A, and to B for life (is a tenant in common- not a joint tenant)

1. can’t have one in fee simple and one in life est.iv. with the same right to possession of the entire property

1. each tenant must have the right to possession of the whole propertya. tenancy in common only shares unity of possession

V. Joint Tenancy Examplesa. O to A & B as JTWROS- validb. O to A for life, then to B & C as JTWROS- valid

i. If B dies, C gets B’s interest and possesses the whole interestc. O to A for life, then to A’s children [as JTWROS]- void

i. A’s children’s interest vests when A has a childii. Doesn’t meet unity of time- must be acquired or vest at the same time

iii. Could say “…then to A’s children who survive A”- can’t vest until A’s deathiv. If you can’t meet the 4 unities, you can’t make a joint tenancy

VI. Severance of a Joint Tenancya. Can sever a joint tenancyb. Destruction of any of the four unities severs a joint tenancyc. Conveyance: if a joint tenant conveys his interest to a third party or to another joint

tenancy, the joint tenancy is severed as to that interesti. Ex: A, B, C are joint tenants. A conveys to D. D has a tenancy in common with

B&C. B&C still have their joint tenancy.d. Joint tenancy is easily severable- turning a joint tenancy into a tenancy in common

i. At any time during their lives, A or B can convey their interest to a third party (X), and then then the joint tenancy becomes broken/severed

1. if A conveys interest to X, X and B own it as tenants in commonii. straw man - “middleman” of sorts used historically for an individual to beat the

system unilaterally severing a joint tenancy1. ex: A & B have a joint tenancy. A wants to sever it into a tenancy in

common. If A couldn’t do it unilaterally, she could convey her interest to C, severing the joint tenancy. C can then convey it back to A.

e. could be through sale, partition, or mortgagef. can not waive power to sever joint tenancy

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i. if there is a promissory restraint, it is a restraint on alienabilityg. Power to sever is:

i. Pro-alienabilityii. Can sever a joint tenancy and make it a tenancy in common

iii. Can sever it unilaterally (Riddle v. Harmon)h. Example:

i. O to A & B as JTWROS1. A conveys to X (severs)= X & B are tenants in common2. A can also just sever it into a tenancy in common unilaterally

VII. Tenancy by the Entiretya. Form of joint tenancy only available to a husband and wifeb. Like a joint tenancy, each tenant has a right of survivorshipc. Usually need four unities, plus marriage d. Tenancy by the entirety may not be severede. Today, married are presumed to take either as tenants by the entirety or as joint tenants

VIII. Problems- p. 2781. O to A, B, & C as JTWROS

v. 1/3 shares in eachvi. A conveys his 1/3 to D

1. D becomes tenant in common with B & C2. Doesn’t destroy joint tenancy of B & C (still hold as joint tenants)

vii. D is a tenant in common(1/3) with (joint tenancy of B & C) (2/3)viii. If B dies, C takes interest of B’s whole

1. D & C then hold fee simple as tenants in common2. T to A & B as joint tenants for their joint lives, then to survivor.

ix. Life estates in A & B1. Contingent remainder- wont know survivor until one dies where it will

vest for the otherx. How is it different than joint tenancy

1. Can’t sever in this example (you could in #1)xi. if A conveys life estate to C (pur autre vie) and B dies, A will own the fee simple

1. C only gets limited life interest of A2. if A conveys life estate to C, C shares it with B

3. tenancy by the entirety – joint tenancy plus marriagexii. Have to take title when they are married

xiii. Normally, partition is not available during tenancy by the entirety because it is not severable unless both parties agree

xiv. Since they were not married when they took title, it will either be a JT or TC, so unilateral partition is possible

xv. If they weren’t married when they got title, they could use a strawman1. A & B to X

a. X is the strawman 2. X to A & B as tenants by the entirety (new effective deed)

VIII. Riddle v. Harmon- Unilateral severanced. Rule: A joint tenant may unilaterally sever the joint tenancy without the use of an

intermediary device (at least in California)

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e. California court of appeals held that Frances Riddle could validly sever the joint tenancy with her husband, Jack, by a conveyance from herself as a joint tenant to herself as a tenant in common with Jack

i. When Frances was dying, she wanted to terminate it so Jack wouldn’t get right of survivorship

ii. Wants to create tenancy in common so she can control (devise) her portion of the property

f. Lawyer makes unilateral severancei. Riddle (grantor) as Joint Tenant -> Riddle as Tenancy in Common

1. lower court says she should have used a straw man2. court of appeals say lower courts relying on history is dumb

g. Takes a realistic view of severance and elevates the intent of the grantor to prominenceh. Did away with requirement for both creating and severing joint tenancies

i. “what you can do with 2 instruments you can now do with 1 if the intent is clear”i. Possibility of injustice:

i. Jack probably never knew joint tenancy was severedii. Frances could sever it, never tell Jack, Jack could die, and Frances could act like

she didn’t sever itiii. If Jack didn’t know, he may not be able to direct where he wants his estate to go

j. why do we not require notification?i. Inherent in very nature of the type of estate

ii. Could be a restraint on alienation- ppl may be afraid to sever if they have to give notice

k. if they wanted an inseverable estate, they could have:i. tenancy by the entirety

ii. joint life estate with a contingent remainder in fee to the survivoriii. fee simple to take effect in possession in the future

1. springing executory interestiv. a tenancy in common in fee simple with an executory interest in the survivor

l. if one of tenants in common sells present estate, they sell their fee simple subject to an executory limitation and person who gets it either has a fee simple or loses

****NOTE: Future Interest and Estates Examples- Makdisi

Partition

I. Partitiona. Can apply to both Joint Tenancy and Tenancy in Common

i. A tenant by the entirety cannot demand partitionb. Pro-alienabilityc. Can seek partition unilaterallyd. Partition- a joint tenant or a tenant in common may demand partition of the property at

any time and for any reason, or for no reason at all. i. Apart from an agreement by the parties, a partition is accomplished by a suit in

equity1. agreement not to partition is enforceable if:

a. it clearly manifests intent not to partitionb. duration is limited to a reasonable period of time

ii. two types of partition:1. partition in kind2. partition by sale

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II. Partition In Kinda. Physical division of the property

i. Instead of owning 50-50 of the whole, they own 100% of a halfii. By court order, destroys concurrent ownership and makes each party a 100%

owner of a smaller geographical areaiii. Rural undeveloped land is the most likely candidate for physical division

b. Courts will order partition in kind unless a party can prove either:i. Physical partition is impossible or impracticable

1. ex: single family house- can’t physically divide propertyii. Physical partition is not in the best interest of all the parties

1. best interest- evidence includes economic costs/gains, and also subjective costs as well

c. Delfino v. Vealencisi. Helen Vealencis owned 20.5 acres as a tenant in common with Delfinos

1. Helen used a portion of property and operated a garbage hauling business on it

2. Delfino’s wanted to develop the property into single family residences so they demanded a partition by sale

3. Helen wants to keep property because of her business and sentimental value of living their for so long

ii. evidence suggested total value of property would be maximized by partition by sale

iii. court held that it was not in the best interest of all the parties to do p by sale1. value of Helen of continued possession was sufficient that partition in

kind should be orderediv. owelty- the difference which is paid or secured by one cotenant to another, for the

purpose of equalizing a partition 1. requirement to compensate others for adverse impact of her garbage

operation on their proposed subdivisions2. attempts to make interests roughly equal

v. Helen ends up with (1/3) : 1 acre, biz, home ($72,000-26,000 owelty payment- $46,000)

vi. Delfino (2/3)- 19 acres sell for $725,000+26,000 owelty= $751,000

III. Partition by Salea. Even though it is not the most favored by courts, it is probably the most common method

of partitioni. Presumption- presumption by the court is that it will be partition in sale

ii. Generally, keeping parcel large rather than dividing it up makes it more valuableb. After a partition by sale, the net proceeds are divided among the co-owners in proportion

of their ownership interestsi. $ divided by their share

Sharing the Benefits and Burdens of a Co-Ownership

I. Rents, Profits, and Possession1. Each co-owner has the right to possess the entire property and 2. ex: cutting of timber (depends so long as they don’t cut more than their

share)b. no co-owner may exclude his fellow co-owners

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c. Exclusive possession by one co-owner- because each co-owner has a right to possess all of the property, exclusive possession by one co-owner is presumptively valid

i. Rental value of exclusive possession1. majority rule: cotenant in exclusive possession has no liability for her

share of rental value unless:a. other cotenants have been ousted, or

i. ouster- occurs if a tenant in exclusive possession either:1. denies physical entry by a cotenant

a. ex: changing locks2. denies cotenant’s claim to title3. as long as cotenant doesn’t bar access or deny

title, they don’t owe rent because they own the right to the whole thing

4. other ouster situation: beginning of running of statute of limitations for adverse possession

b. cotenant in possession owes fiduciary duty to other cotenants, orc. cotenant in possession has agreed to pay rent

2. majority rule premised on the fact that the tenant is entitled to possession3. Spiller v. Mackareth

a. P and D owned a commercial building as tenants in commoni. They have unity of possession

b. Spiller took possession of entire building and used it as a warehouse after its tenant left

c. When tenant pays rent, they split it 50-50i. If a landlord refuses to split it, they can go to court

through accountingd. Mackareth demanded that Spiller:

i. Vacate half the building orii. Pay rent

iii. Basically, he wants to be in the same position as if there was a real tenant

e. Mackareth couldn’t trigger ouster because:i. Spiller never denied Mackareth physical entry and never

claimed that Mackaerth wasn’t an owner4. minority rule- cotenant in exclusive possession is liable to cotenants out

of possession for their share of fair rental value unless there has been an agreement among the party to excuse the tenant in possession from this obligation

d. Rents from third partiesi. Cotenant who receives rents on the property from a third party is obligated to

account to his cotenants for those rents.ii. If the rents or other income received by a cotenant are greater than the cotenant’s

share, he is obligated to pay the excess to the other tenantse. Profits from the Land

i. If a cotenant permanently removes an asset from the land he must account to his cotenants for this reduction in value

ii. ex: if minerals are removed, cotenant must pay to the other cotenants their proportional share of the value of the removed minerals

II. Swartzbaugh v. Sampson

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a. John and Lola Swartzbaugh owned in joint tenancy a 60 acre orchard. John leased 4 acres to Sampson (conveyance of possession) who constructed a boxing pavilion

i. Joint tenancy, plus tenancyii. A lease does not sever a joint tenancy

iii. Lola tried to cancel leaseiv. Court denied her- a lease by a single joint tenant to a third party “is not a nullity

but it is a valid…contract in so far as the interest of the lessor in the joint property is concerned”

b. Lola’s other options:i. Outster- demand to be let into possession of the pavilion

1. monetary remedy 2. could get ½ value of reasonable rental value

ii. accounting- demand and receive half the rents received by John from Same1. in this case, however, she affirms the lease and becomes a landlord

iii. partition the leasehold1. partition by sale- can sell the whole thing and get half value of

undeveloped property; then have to make adjustments for value of lease2. partition in kind

iv. sever the joint tenancyv. profits- for the loss value of the walnut trees cut down

1. when a cotenant depletes the value of land from agricultural uses, they are liable for money damages

2. cotenant can’t prejudice the value of the land and damage other tenants’ interest (negative land use externalities)

III. Accounting for Costs of Ownership- read p. 308-310a. Rules that govern if you don’t have a contract with cotenantb. Mortgage Payments

i. Interest- each is required to pay their proportionate share of interest1. a cotenant who pays more than their share can be reimbursed

immediately, upon partition, or within limitations period following end of co-tenancy

ii. Principal- each obligated to pay proportionate share of principal; if A makes the payments of the mortgage, or pays more than their share, A can sue B for contribution

iii. Unless A lives on property and uses it as his primary residence1. value A is getting when B is out of possession is seen as equal to tax and

mortgage payment (don’t want a windfall)c. Taxes

i. Each is obligated to pay their proportionate share of taxes ii. A cotenant who pays more can recover the excess from fellow cotenants through

contribution, partition, during tenancy, or within limitations periodd. Repairs

i. Cotenant has no obligation to repair his property1. but repairs can be repaired (see below)

ii. A cotenant who voluntarily repairs the property may not force his cotenants to reimburse him for their share of the repairs, but the repairing cotenant can recover those excess repair costs in two situations:

1. accounting- if repairing cotenant is required to account to his fellow cotenants for rent, he can deduct from rents due the other cotenants their share of the repair costs incurred by repairing cotenant

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2. partition- repairing cotenant is entitled to be reimbursed for the repair costs in excess of her share

a. partition by sale- will be cash reimbursementb. partition in kind- either receive cash reimbursement from other

cotenants before physical division or receive a larger parcele. Improvements

i. No cotenant is under a duty to improve propertyii. Improving cotenant may not recover from fellow cotenants her pro rata share of

the cost of the improvements1. no credit for the cost of improvements is given as such in an accounting

or partition action2. ex: A builds house on vacant land; A has no right of contribution from B

iii. if property is physically divided pursuant to a partition action, the improved portion is awarded to the improving cotenant

iv. upon partition or if the improving cotenant is under a duty to account to cotenants for rent, the improving cotenant is entitled to recover only the value added by the improvement, not the costs of the improvement

1. Attendantly, at partition, the so-called improver bears full liability for any diminution in value caused by her efforts

f. Adverse Possessioni. Cotenants can occupy adversely to their fellow cotenants, but the cotenant must

be absolutely clear and unequivocal in notice that he claims exclusive and sole title in order for adverse possession to begin (nothing else will do)

LEASEHOLD ESTATES

Interests in Real Property

Possessory Non-Possessory

Freehold Nonfreehold CovenantsEasements

Fee Simple Licenses (sometimes)Defeasible FeesLife Estate[Life Estate Determinable] Leaseholds

Term of yearsPeriodic tenancy Tenancy at willLease duration based on parties intentions- Garner

I. What makes it a lease?a. Gives the leaseholder the right to exclusive possession for the duration of the termb. Has all the legal rights of a possessor and may sue others for invasion of possessory

interest, such as through ejectment, trespass, or nuisancec. Contemporary and Traditional View of Leases

i. Traditional- tenant has the obligation to pay rent no matter what, and the landlord has the right to retake possession only if the tenant defaults in paying the rent

ii. Contemporary (Contract)- promises are mutually dependent

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d. leaseholds- type of leasehold depends on the duration of the estate i. are not only conveyances, but contracts as well

ii. 3 types:1. term of years2. period tenancy3. tenancy at will

II. Term of Yearsa. Term of years- is a lease for a single, fixed term for any length

i. Term must either be clearly set out in the lease or by reference to a formula that will produce a fixed calendar date for the beginning and end of the leasehold

ii. Can be any length- month, 10 years- so long as the period is fixediii. Terminates on its own- no notice is needed

b. a term of years can be defeasible, either determinable or subject to a condition subsequent

c. examples:i. O to A (fs)

1. A (ll) to Tenant for 5 yearsa. A holds a reversion

2. A (ll) to Tenant for 5 years, then to B for 5 yearsa. A holds a reversion and B holds a remainder

ii. if A sells the property to someone else during the lease (C), C has to follow the lease terms and gains A’s reversionary interest

iii. A (ll) to tenant for the “duration of the war”1. courts are split- some hold it as tenancy at will and some hold it as a term

of yearsd. no change in terms in intestacy, devisee, or inter vivos transfer

i. ex: if A dies with a will, A1 (devisee) follows terms

III. Periodic Tenancya. Periodic tenancy- leasehold for a recurring period of time, such a “month to month” or

“year to year”i. Continues in existence on its own until either landlord or tenant gives advance

notice to the other party of termination of the lease1. common law requires at least 6 months to terminate year-to-year tenancy2. common law requires notice equal to the length of the period (but not

more than 6 months) for periods less than a year (ex: a month to terminate a month-to-month)

b. Examplesi. O to A (fs)

1. A (ll) to Tenant for year to year (month to month)2. A (ll) to Tenant “for an annual rent of $12,000 payable in monthly

installments of $1,000”a. Courts will usually hold this as a year to year unless intentions of

the parties indicate otherwisec. no change in terms in testacy, devisee, or inter vivos transfer

i. death has no impactd. Notice to Terminate

i. Common Law1. 6 months advance notice necessary to terminate a year-to-year tenancy

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2. notice equal to the length of the period (but not more than 6 months) is necessary for periods less than a year

3. notice is only effective at the end of the periode. Fixing the Period of Periodic Tenancies Created by Operation of Law

i. If person takes possession of a long-term lease void under the Statute of Frauds (not in writing), but has paid rent, most courts conclude that it is a year to year lease

1. some determine by the rent calculation in the void lease2. some courts measure the period by the way rent is actually paid

IV. Tenancy at Willa. Tenancy at will- leasehold for no fixed time or period

i. Lasts as long as both parties desireii. Either party may terminate it by any time or by operation of law

1. a unilaterally terminable lease cannot be a tenancy at law- it is a determinable tenancy

2. Garner v. Gerrisha. Donovan leased house to Gerrish and the lease stated that

“Gerrish has the privilege of terminating this agreement at a date of his own choice”

b. Donovan died; his executor wants to terminate lease (thinks it is a tenancy at will)

c. Court construed the lease to carry out the intentions of the parties decided that it created a life estate terminable at the will of the tenant

b. death of either landlord or tenant terminates the tenancy at willi. if A dies, and B takes possession, B can immediately terminate the lease

c. Terminationi. By parties:

1. a landlord terminates by giving noticeii. Operation of Law: if either party dies, if the tenant attempts to assign his tenancy,

or if the landlord conveys his interest, a tenancy at will is terminated by operation of law

V. Problems- p. 364a. 1. term of years lease; LL has no rights (terminates automatically)b. 2. periodic tenancy; landlord is entitled to 6 months notice b/c it is a year to year lease

and no notice was givenc. 3. periodic tenancy; can be year to year or month to month (a lot of options depending on

the jurisdiction)i. Would have to pay for December- needs to give a month’s notice and is effective

from the end of that month (not on hook for jan, feb, march, etc.)

VI. Tenancy at Sufferance (holdovers)a. Not really a tenancy like the other 3- will always in the end resemble one of the 3

i. Not a real tenancy because landlord has not consented to their occupationb. Holdovers- tenants who remain in possession after their right to do so has expired

i. When they do so, it creates a tenancy at sufferance ii. Must be voluntary

1. if they are in continued possession b/c of circumstances beyond their control, they are not treated as holdovers (ex: sick, injured, etc.

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c. Landlord has 2 options for a Tenancy at Sufference: must be exercised in a reasonable period of time:

i. Eviction and recovery of damages for lost possession1. treating them like a trespasser2. can recover damages measured by the reasonable value of the use of the

property for the holdover period, plus any special damagesa. original rent is presumptive evidence of fair market value (can be

rebutted)ii. binding the tenant to a new term

1. hold him as a tenant to the terms of the existing the lease2. deters holdovers, which benefits tenants generally because a new tenant

places a great deal of reliance on old tenant’s timely departurea. half jurisdictions follow rule that as long as LL gives new tenant

legal right to be on the property, that is enough and it is the new tenant who has to seek eviction of the holder (legal possession theory)

b. other half says LL has to give actual physical possession of the place for rent obligation to start (actual possession theory)

3. most treat new tenancy as a periodic tenancy, and some treat it as a term of years for a maximum of 1 year

a. some courts determine term’s length by the way the rent is stated in the old lease

d. election is irrevocable- the landlord cannot change his mind after he makes his decisioni. Crechale & Polles, Inc. v. Smith- P leased premises to D for 5 years; before

expiration of the term, Smith wanted an extension for a short-term to accommodate his relocation

1. Crechale denied the extension and demanded Smith vacate; Smith stayed for a month, sent a rent check, and Crechale cashed it

a. Crechale then said he was renewing for a term of years2. Court held that Crechale first decided to treat Smith as a trespasser and

terminate the lease. The subsequent acceptance of the rent created a periodic tenancy

3. can’t change your mind after you make a decision

SUBLEASES AND ASSIGNMENTS

I. Assignments and Leaseholdsa. Assignments- places assignee in privity of estate with owner and are liable to each other

for performance of the lease obligations that “run” with the leasehold estatei. Does not destroy privity of contract- contractual duties created by a lease

continue to be personal obligations of the original parties even after assignmentb. Sublease- does not create privity of estate between landlord and subtenant

i. Subtenant is only liable to the tenant for lease obligationsii. No privity of contract either because contractual relationship is between

subtenant and tenant

II. Assignmenta. Assignment- Transfer of the party’s entire interest under the lease for the rest of the

specified termi. Tenant retains no interest

b. can be freely conveyed- alienable

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c. privity of estate- assignment places assignee in privity of estate with original party (landlord)

i. ex: L to T, T assigns to T1; T1 and L are in privity of estateii. assignee is obligated to perform all the lease covenants that “run with the estate”-

real covenants (ex: promise to pay rent, make repairs, etc.)iii. allows landlord to sue assignee under privity of estateiv. personal promises- do not run with assignment

1. promisor (prior tenant) remains obligated to perform even after assignment, unless he is released from the obligation

d. privity of contract- assignment does not destroy binding effect of contractual promises as personal obligations; does not destroy privity of contract between landlord and original tenant unless they are released of obligations

i. release and novation:1. landlord’s consent and acceptance of assignment does not constitute a

release of tenant’s obligations under the lease2. novation- express release, when coupled with the promise by assignee to

assume performance, is clear evidence of intent of landlord to release tenant

a. tenant is then no longer in privity of contract with landlord, so tenant is no longer liable to landlord

b. gets original tenant off the hookc. don’t really use in sublease situation

ii. assumption1. assumption- assumption of performance of the lease obligations can

occur without release, and puts both the original tenant and assignee in privity of contract

a. ex: L to T, T to T1 (assignment and assumption)i. both T1 and T are in privity of contract with L

ii. T1 is in privity of estate with L2. assumption must be expressly made3. in states that recognize the contract notion of third party beneficiary, an

assignee can become in privity of contract with landlord by an express assumption of the lease obligations

4. once privity of contract is created by assumption, it remains until and unless the contractual obligations are released (see Emanuel ex- p. 125)

e. Assignor Tenant Liabilityi. When tenant assigns his leasehold, he is not released from the contract

1. Landlord is free to sue either original tenant or assignee if there is a default

2. can do subrogation for assignor tenant to recover from assignee tenant any amount he pays to the landlord on behalf of the assignee’s default

f. Multiple Assignmentsi. An assignee in privity of contract with landlord remains liable for default of

subsequent assignees, however remote, unless there has been a releaseii. An assignee in privity of estate with the landlord is liable only for the default

occurs during the period in which there is a privity of estate1. assignor who has not been released remains in privity of contract with

the landlord and is liable for the default of any assignee g. Liability

i. Direct line through real covenantsii. Original tenant can be free through express novation

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III. Subleasesa. Sublease- occurs when lessee transfers anything less than the entire interest in the

leasehold, thereby retaining a reversionb. Not really a conveyance like an assignment isc. Privity of Contract/Estate

i. A sublessee has neither privity of contract nor privity of estate with the landlordii. Sublessor and sublessee are in privity of contract and privity of estate

d. Tenant Default Under Principal Leasei. If principal tenant/sublessor defaults on the principal lease the landlord is entitled

to terminate the principal leasee. Can get a direct relationship between LL and ST through:

i. Assumptionii. Statutory remedies that allow LL to go directly to ST

iii. Equitable remedies if tenant is insolvent1. lien

iv. terminate the master lease (“head lease”) b/w LL and T

IV. Distinguishing Assignment from Subleasea. Courts use two methods:

i. Examining the substance of the transaction to determine if the tenant has transferred her entire interest in the leasehold

1. common law rule was that it was an assignment unless tenant retained a reversion, no matter how brief its duration (very last second of the term would make it a sublease)

ii. Intent of the parties1. if for an increased rent, sublease is usually indicated2. for a lump sum, assignment is usual inference3. if transferee expressly assumes the lease obligations an assignment is the

inferred intention b. Pitfalls of error

i. If you think it is a sublease and pays rent to tenant, they will be liable to same rent to the landlord (assuming tenant pockets the rent)

ii. A tenant who subleases for entire remainder of his term (at a profit) will find that he is denied that profit if he fails to retain a reversion or a right of reentry, assuming that retained right is enough to create a sublease

Privity of Estate with LL Privity of K with LLAssignment

- Assignee Yes No (not without more)Sublease

- Subtenant No No (not without more)

V. Privity of Contract & Privity of Estatea. Privity of estate- voluntary transfer of possession

i. Assignment- when assigned to an assignee, privity of estate transfers to assignee (returns possession stick at the end of the term)

1. privity of estate no longer between previous tenant/landlord2. LL and assignee can sue each other

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ii. Sublease- not full conveyance for balance of term (only a part)1. tenant hands possession stick back to tenant

a. thus, not a conveyance of the estate!2. tenant retains privity of estate with landlord3. tenant-subtenant have their own relationship4. LL can’t sue ST under privity of estate

iii. real covenants- obligations or restrictions connected to real property (rent, repair, maintenance)

1. landlord/assignee owe duties to each otheriv. personal covenants- do not assign; tenant still owes them to LL (not connected

to real property)b. Privity of Contract

i. Subleases and assignments do not destroy privity of contractsii. Every time there is a lease, LL and T are in privity of contract and are liable to

each otheriii. Sublease- can get PK with assumption and then be liable to each otheriv. Can sue original tenant under PK and PEv. Assignment

1. PK doesn’t cease between original parties2. tenant remains liable on the lease

c. can have only 1 PE, but can have more than 1 PKi. assumption of the obligations create multiple privity of contracts (third party

beneficiary)1. LL can now sue either assignee or tenant under PK, and assignee under

PE

VI. Problems- p. 394a. 3 yr term- 1 yr later (sublease)

i. L rights against T- can sue under PE and PKii. L Rights against ST- nothing (no direct line of liability)

b. 3 yr, conveys for balance of term (assignment)i. L rights against T- PK

ii. L rights against A- PEc. 3 yr lease, assigned to assignee with “all covenants in the lease”

i. T1- assignment and assumptionii. T3- privity of estate

iii. T and T1- privity of contractiv. Assumption doesn’t get assigned when passed downv. T3- primarily liable

vi. T1, T2- secondarily liable1. guarantors of performance- back up

vii. don’t have to be in possession to be liabled. Examples

i. LL-T, T assigns to T1 with assumption (assignment and assumption)1. can sue on real and personal covenants- PE, PK

ii. LL-T, T assigns to T11. can only sue on real covenants (no assumptions)

VII. Ernst v. Conditta. LL- Ernst, T- Rogers, T1- Condittb. Lease said Rogers remained liable to Ernst under the lease (“privity of contract”)

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c. P. 389- Conditt assumes master lease- privity of contractd. T and T1 are in Privity of Ke. T1- Privity of E f. Shouldn’t matter whether or not it was an assignment or a sublease b/c T1 is liable under

PE and PK (strange case- not good for case law)g. General rule for distinction of sublease and assignment

i. Does the transfer last for the remainder of the term

VIII. Lease Restrictions/Withholding Consenta. Unless a lease expressly limits or prohibits assignment or sublease, a tenant is free to

transfer leasehold by either methodi. Some courts use strict construction

ii. Express restrictions only apply to voluntary inter vivosiii. If silent, assume free alienability

b. Three Stagesi. Some leases absolutely prohibit assignment/subleases, only allowed if it is freely

negotiated or statutorily authorizedii. If silent, assume free alienability

iii. Middle Ground- reasonableness of withholding consent1. Majority Rule2. Minority Rule

c. Majority Rule: permits landlord to deny consent to transfer for any reason or no reason, even if it is unreasonable

i. Anti-discrimination statutes limit landlord ability to reject prospective tenantsd. Minority Rule: landlord has an obligation to act commercially reasonable when

denying consent to a transferi. Applies to commercial leases only

ii. Is the Restatement position and is growingiii. Pestana case- must have commercially reasonable objectioniv. Courts apply objective test to this question

1. landlord may not reject transferees to secure a commercial advantage or because transferees proposed use is ethically offensive to landlord, but otherwise reasonable

e. Landlord can waive lease restrictions, but once the landlord has expressly waived a transfer restriction the restriction is destroyed unless he specifically reserves the right to bar future transfers

i. Can be avoided by saying waiver applies to this transfer only, or an express statement that transfer restrictions bind tenant’s assignees, thus preserving

f. Kendall v. Ernst Pestana- Minority Rule of Withholding Consenti. LL- Pestana, T- Bixler, T1- Kendall (assignee)

ii. Pestana wont give consent b/c he wants to create a new lease with Kendall and raise rent

iii. California says this is not a commercially reasonable objection1. good faith and fair dealing2. policy against restraints against alienation3. rejects assertion that increase in market value of property only belongs to

lessor, not lesseea. get what you bargained for duration of lease

g. Termination and Recapture in Commercial Leasei. Clause in a California case between sophisticated tenants said that:

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1. tenant, before entering into any sublease or assignment, was to give LL written notice identifying intended sublease or assignee and specifying terms of intended transfer

2. landlord could then terminate the lease with tenant and, if LL elected to do so, enter into new lease with intended assignee or sublessee

3. that tenant was not entitled to any profit realized by LL in consequence of termination and reletting

DEFAULTING TENANTS

Landlord’s Remedies

I. Remedies Typically Derived from Lease Provisionsa. Rent acceleration: makes rent for the entire balance of the term immediately payable

upon a tenant default under the leasei. If landlord elects to accelerate rent she may not terminate the lease and take

possessionii. Is an immediate sale of the balance of the lease term- a landlord cannot sell

remainder of term and take it away from tenantiii. Landlord who retakes possession after abandonment can’t accelerate rent

b. Security deposits: tenant deposits a sum of money as security for her performance of the tenant’s lease obligations

i. Landlord is indebted to the tenant and must return the deposit at the end of the lease, less any charges attributable to tenant default

c. Liquidated damages: amount must be reasonably related to the probable amount of damages suffered by landlord upon tenant default, but the damages must not be capable of easy determination

d. Confession of judgment: tenant agrees to waive service of process and authorizes someone to confess judgment for him

i. Quick and efficient, but are of doubtful validity and sometimes prohibited by statute

II. Remedies Derived from Statute and Common Lawa. Eviction- most leases contain express provisions permitting landlord to terminate lease

upon tenant default of any lease obligationi. because today, lease covenants are considered dependent, statutes permit a

landlord to terminate a lease and evict the tenant for nonpayment of rent, but usually not for breach of most other lease covenants

ii. if says they may terminate upon default, it is a right of entry1. must notify the tenant and give the tenant reasonable time to cure the

default (Restatement Sec. 13.1)iii. if termination is automatic, it is determinable

1. can proceed to a summary proceedingiv. Summary Proceeding- expeditious judicial eviction remedy (also called

unlawful detainer or forcible entry and detainer) 1. every American state has a statute and is given calendar preference on

court dockets2. only issue in proceeding is entitlement of possession

a. landlord has to prove that lease was validly terminated and they are entitled to possession

i. ex: violated lease provision and tenant has no defense

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3. requirementsa. landlord is required to give tenant minimal notice to quit

i. usually not more than 3 daysii. notice states that landlord will terminate the lease and

file suit for unlawful detainer (nonpayment of rent) if not cured within 3 days

b. Ejectment- no used as much because it does not have the efficiency advantage of summary proceeding (tenant is entitled to plead affirmative defenses)

c. Self-Help- i. At common law, landlord was entitled to use reasonable force to oust tenant

themselves, but American jurisdictions splinter on remedyii. No self-help- not yet the majority rule

1. a landlord must use judicial proceedings2. ex: Berg v. Wiley

iii. reasonably forceful self-help- some states permit landlords to use reasonable force to oust the tenant

iv. peaceable self-help- common law rule still observed in many jurisdictions1. landlord must use peaceable means

d. why protect the tenant?i. Working or living on property; landlord just gets money

ii. Harder on tenant if you make it really easy to dispossess tenantiii. Public policy

III. Berg v. Wileya. Wiley leases to Philip Berg, who assigns 5 yr lease to Kathleen Berg b. KBerg bound by “real covenants” (privity of estate)

i. Wiley has reversion at end of leaseii. Lease required Berg to obtain written permission from Wiley to alter structure,

obligated Berg to operate the restaurant lawfully, and gave Wiley right to take possession upon default

c. Berg began remodeling without permission and had health code violationsd. Wiley gave Berg 2 weeks to fix problems, and after that, Wiley entered premises and

changed the locks (claimed self-help)i. Says Berg breached provisions of the lease

ii. Wiley re-lete. Common-Law Rule on Self-Help:

i. Landlord is legally entitled to possessionii. Landlord’s means of reentry are peaceable

f. Court departs from common law rule and says that the “only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession to a landlord’s claim of breach of a written lease is to resort to judicial processes”

i. But says that even if common-law rule applied, Wiley’s actions not peaceable

IV. Tenant Abandonmenta. Surrender- if tenant abandons lease in midst of valid lease term the tenant offers to

surrender the leasei. Landlord has 3 options:

1. accept surrender: this terminates the leasea. tenant obligations cease at moment of termination and surrender,

not at abandonment

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b. tenant’s liability is rent due up to the moment of termination plus damages created by the abandonment

c. Damages:i. Transactional costs of finding a new tenant plus

whatever shortfall exists between lease rentals for remainder of surrendered lease and fair market value of the remainder

ii. Anticipatory repudiation- permits the landlord to recover damages when tenant has made it clear he is not only abandoning but denies any further lease obligation

1. are limited to damages “reasonably forecasted”2. reject surrender and leave premises untouched: preserving landlord’s

entitlement to rent for the remainder of terma. now the minority viewb. rule rejects the idea of duty to mitigate damagesc. justifications for rule

i. tenant is in breach & shouldn’t impose duties on LLii. tenant bought the possession for the term

iii. duty to relet an abandoned apartment may deprive LL of marginal rents by diverting tenants from other apartments

iv. contrary rule encourages abandonment3. retake possession and relet premises:

a. must do so voluntarily or with a duty to mitigate damagesb. duty to mitigate damages: many states hold that a landlord is not

free to do nothing after abandonmenti. must use reasonable efforts

ii. Sommer v. Kriedel- “landlord has to show that they used reasonable diligence to relet the apartment and that in doing so he had treated the abandoned apartments as one o vacant stock”

b. if surrendered by T and LL accepts, the lease is terminatedi. LL can sue for back rent

1. can’t sue for future rent payments (lease is terminated- no rent due)ii. LL can sue for the difference between the rent reserved under the old lease and

reasonable rental value of old lease term1. anticipatory breach

a. ex: 2 year lease with 12k in rent a year; surrendered a year in, but market has changed and reasonable rent is now 8k (can get the 4k difference)

b. can only do it if the market has changedc. if surrender not accepted, lease is still in effect

i. some states say no duty to mitigate and sue tenant for balance remainingii. some states say landlord has duty to mitigate and must make reasonable efforts to

relet premises on the tenant’s account1. can sue tenant for deficiency2. tenant takes any overage or surplus

a. what if market is good? More incentive to accept surrender and relet on new terms

V. Sommer v. Kridel- New Jersey Case

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a. Sommer leased apartment to Kridel for 2 year termi. Kridel tried to surrender lease, but Sommer did not accept the surrender

b. landlord/tenant- privity of estate and privity of contractc. Old rule in NJ: landlord had no duty to mitigate

i. Could sublease or assignii. It is tenant’s property

d. New Rule: landlord has a duty to mitigate damages caused by defaulting tenanti. Required to use reasonable diligence to relet the apartment

ii. Burden of proof on the landlord to show they mitigated (case-by-case basis)iii. could also consent to assign and sublease

VI. Seizure of Personal Propertya. If tenant defaults, can seize tenant’s personal property in the leased premises and hold it

until tenant cured default (called distress or distraint)i. Some states prohibit this or place restrictions

b. Can also file suit to enforce a lien

Landlord Duties and Tenant’s Remedies

I. Dependent Covenants- tenant is relieved from rent obligations if the landlord breaches a covenant in the lease

a. Previously had independent covenants- if LL did something wrong, tenant can sue but is still stuck making rent payments under the lease

b. Covenant of title/possession- at delivery; only person with title can convey itc. Covenant of quiet enjoymentd. Illegal leasee. Implied warranty of habitability

II. Exceptions to the “Common Law No Landlord Duty” Rulea. Duty to disclose latent defectsb. Maintain common areasc. Avoid fraudulent misrepresentation of premisesd. Abate nuisancese. Make agreed upon repairs in a non-negligent way

Quiet Enjoyment

I. Covenant of Quiet Enjoymenta. Protects tenant in commercial as well as residential context, but warranty of habitability

usually takes over the residential contexti. Think of it as in commercial

b. Every tenant has a right of quiet enjoyment of the lease premises without interference of the landlord

i. Expectation that the tenant won’t be ousted or evictedii. LL won’t disturb you

c. Obligation is implied by law, if not made explicitd. Duty of the landlord to refrain from wrongful actual or constructive evictione. Actual Eviction- Occurs when L wrongfully evicts T or deprives T of possession of the

whole or any parti. Total- tenant who is totally ousted from physical possession of the premises no

longer is obligated to pay rent and can elect to terminate the lease

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ii. Partial- ouster of tenant from any part of premises relieves tenant of obligation to pay any rent at all until and unless tenant is restored possession of entire leasehold

f. Constructive Eviction- broadening of the quiet enjoyment doctrinei. if landlord substantially interferes with the tenant’s use and enjoyment of the

leased property- so much so that it’s intended purpose of the tenant’s occupation is frustrated- a constructive eviction has occurred

ii. Treating some kind of conditions of premises to be so substandard, harmful, so much of an interference it is as though the tenant has been evicted

iii. Tenant is not physically oustediv. Elements of constructive eviction :

1. wrongful act or failure of the landlorda. landlord must act wrongfully, not a third partyb. look at their duty under the lease- is it violatedc. landlord is responsible for tenant actions that constitute a

nuisance or which occur in common areas, whether result was a “natural and probable consequence of landlord’s action”

2. substantial and material interference of the tenant’s beneficial use and enjoyment of the premises

a. “so essentially deprived of the beneficial use or enjoyment of the leased premises that they are rendered unsuitable for occupancy for the purposes of which they are leased”

3. must provide notice4. complete vacation of the premises

a. tenant must completely vacate premises within a reasonable time after the interference

v. partial constructive eviction1. in most jurisdictions, tenant is not relieved of obligation to pay rent

g. Remediesi. Can either stay in possession or abandon

ii. Stay in possession1. can stay in possession and sue for damages2. (value of property without breach)-(value of property with breach)

iii. Abandon 1. invoked for constructive possession

a. lease is terminated upon justified vacation of premises and no rent is owed

2. may be still be able to get damages caused by constructive possession a. suing for damages b/c you have to pay a higher rent somewhere

else- market went up

II. Reste Realty Corp. v. Coopera. Cooper leased office space on bottom floor of a building; LL maintained an adjacent

driveway in such a manner that every rainstorm Cooper’s space would be inundated with water running off the driveway

b. Signed a 5 year lease, then renegotiated, knowing there was a problemi. Signed under reliance

c. Flooding became so severe and wasn’t fixed that Cooper could not use the premises as he intended

i. Sent notice of vacation and vacated the premisesd. Court finds for Cooper- uses constructive eviction

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i. “any act or omission of the landlord…which renders the premises unsuitable for the purpose for which they are leased, or which seriously interferes with the beneficial enjoyment of the premises, is a breach of the covenant of quiet enjoyment and constitutes constructive eviction of the tenant

1. ex: failure to supply heat, sewage clogging, using part of premises for lewd purposes that makes other part “unfit for occupancy”

2. must vacate in a reasonable timee. Cooper not liable for the rent claimed by Reste

III. Problems- p. 430a. 2(a). Yes. Can make quiet enjoyment claim

i. Other tenants are within landlord’s controlb. 2(b). No. Deadlocking doors and hiring security are reasonable efforts

Illegal Lease

I. Illegal Leasesa. Short lived, but still exists- led way for warranty of habitabilityb. If there are violations in premises at time lease is entered, lease is illegalc. Does not apply if code violations develop after making of the leased. Tenant under an illegal lease is a tenancy at sufferance, and LL is entitled to reasonable

rental value of premises given its condition

Warranty of Habitability

I. Warranty of Habitabilitya. Pretty much limited to the residential contextb. Not able to be waivedc. An implied-in-law obligation of the landlord to provide that the premises are fit for

human habitationi. Reasonable person standard- would reasonable person find this uninhabitable?

ii. Two separate obligations:1. warranty implied at the inception of the lease2. implied continuing duty of repair

d. to invoke, must give notice of the uninhabitable condition and given a reasonable opportunity to correct the problem

e. covers all latent and patent defects in essential facilities of the residential uniti. facilities vital to the use of premises for residential purposes

f. Some Problems that trigger breach:i. no heat in winter, water, electricity, plumbing, mold, infestation, lead paint,

asbestosg. Rationale:

i. Fairness, social welfareii. Redresses unequal bargaining power of rich LL and poor tenants

iii. Encourage compliance with local housing codesiv. Punish slumlords- message sending

h. usually happens when tenant stays in possession, doesn’t pay, and is sued by landlordi. can invoke IWH as a defense

ii. sort of like tenant self-help

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II. Tenant Remedies for Landlord Breach of Implied Warranty of Habitabilitya. Terminate and leave and sue for damages- tenant may terminate the lease, vacate

premises, and recover damagesi. Usually relocation costs plus excess of replacement rents over lease rentals for

balance of term)b. Stay and Withhold Rent- tenant may remain in possession and withhold rent, pending

landlord correction of the defecti. Can put the rent in a judicial escrow account (pay the rent to the court and goes

into the account and releases it to LL when condition has been fixed)c. Stay and Repair- use reasonable amount of the rent to make repairs sufficient to bring

premises into habitable condition i. “Repair and deduct”

d. Stay and Recover Damagesi. Tenant can remain and get damages for discomfort and annoyance as well as rent

abatement or deductione. Damages Calculation of Rent

i. (value of apartment as warranted)-(value of apartment in defective condition)1. “as warranted”-“as is”2. warranted value- stated rent3. defective value- lower than warranted value, which may be 0

ii. (agreed upon rent)-(fair rental value)1. agreed upon rent- 2. actual fair value3. if agreed upon is the fair value, damages are nil

f. Percentage Diminution- if certain parts of apartment are in such poor shape, deduct percentage from habitable section

g. Punitive Damages- when circumstances involve willful, wanton, and fraudulent conduct

III. Hilder v. St. Petera. Hilder rented an apartment from St. Peter; apartment was filthy, lacked locked door,

plumbing leaked water, poor electricity, broken sewer linesb. Notified LL, LL did nothingc. Hilder won under implied warranty of habitability- promise to retain property in way that

maintains adequate human habitationi. Also entitled to punitive damages

IV. Problems- p. 439

Implied Warranty of Habitability (cont’d)Landlord lets garbage pile up after strike- is LL at fault under this theory?

- not relevant whether LL can exercise control in warranty of habitability context- work stoppages, natural disasters- if it materially changes the property to the detriment of the

tenants, landlord is liable

Look at:- are health and safety reasonably affected negatively

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- is habitat unfit- doesn’t matter who caused it, how it came to be (LL is liable)

NUISANCE

I. Nuisancea. thinking about effects of something on your property affecting the use and enjoyment of

someone else’s propertyb. nuisance - a person may not use his own land in an unreasonable manner that

substantially lessens another persons use or enjoyment of his landi. can be private or public

1. private- interference with purely private rights to us and enjoyment of land- usually by one or ore nearby landowners

2. public- interference with public rights- those held in common by everyone

a. a public nuisance can also be a private nuisancec. substantial interference with private rights to use and enjoy land either by:

i. intentional and unreasonable conduct; orii. unintentional conduct that is either negligent, reckless, or so abnormally

inherently dangerous that strict liability is imposedd. Two main kinds of nuisances

i. Nuisances per se- nuisance no matter where it is1. ex: health code violation

ii. nuisance per accidens- location of nuisance matters; whether it is a nuisance depends on what it is near

II. Two Main Inquiries of Nuisancesa. Determination of nuisance

i. Intentional: Substantial, intentional, unreasonable1. unreasonable- two ways to determine an unreasonable nuisance

a. balancing test- balancing the gravity of the harm to the plaintiff inflicted by the conduct against the social utility of continuing the conduct (Restatement)

b. threshold test- nuisance exists if the injury is severe enough to be above some maximum level of interference that a person can be expected to endure

i. too much, too unreasonable for them to lose use and enjoyment of property

ii. Unintentional: Substantial, unintentional result of abnormally dangerous, negligent, or reckless activity

b. Decision on remedyi. Injunction

1. used to be automatic2. standard has become untenable due to intense urban areas,

industrializationii. Money damages

1. balancing the equities- compare injury to P if injunction is denied with the injury to D and to the public if injunction is granted

III. Private Nuisance and Public Nuisance

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a. Private- i. intentional and unreasonable conduct; or

ii. unintentional conduct that is either negligent, reckless, or so abnormally inherently dangerous that strict liability is imposed

b. Publici. Affects the rights held in common by everybody

ii. More commonly, a public nuisance is also a private nuisancec. Relationship to trespass

i. Trespass- physical invasion of person’s land1. can be microscopic

ii. Nuisance- interference with person’s right to use and enjoy land

IV. Air Pollutiona. Morgan v. High Penn Oil

i. Noxious fumes from oil refinery affecting nearby residents, restaurant, homes, trailers (private nuisance)

ii. Court says it is a nuisance1. substantially interfered with use and enjoyment of property2. was intentional because High Penn knew what it was doing and did not

intend to change its operation; was an abatable private nuisance3. was also unreasonable

iii. court gives an injunction- no guarantee High Penn would stop without an injunction

b. uses threshold test to determine reasonablenessc. provides injunction and temporary damages for past harm

i. when money damages are insufficient, go to equity

V. Noise Pollutiona. Estancias Dallas Corp. v. Schultz

i. Private nuisance- Estancias constructed an apartment complex adjacent to Schultz’s residence

1. to save 40k, CAC was located 5ft from Schultz’s lot lineii. Intentional nuisance b/c corporation knew about the noise and were going to

continueiii. Is substantial- based on the facts (affecting sleep, discussion, entertainment,

sound)iv. Unreasonableness- applies threshold testv. Changing the location of the unit would cost $150k to $200k

vi. Issued an injunction1. not a housing shortage- ppl can go elsewhere2. explicitly rejected damages

a. would cause to great sufferingb. goes to the original “have a nuisance, get an injunction”

3. how does it harm Estancias?a. Impedes D’s use of property, could spend money to fix air

conditioner, use it for another purpose, or sell it

VI. Air Pollutiona. Boomer v. Atlantic Cement Co.- Pay Damages and Continue Activity

i. Private nuisance- group of neighboring landowners found cement factory’s smoke, dirt, noise, and vibration interfered with use and enjoyment of property

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ii. Intentional, substantial, and unreasonable1. applied threshold2. found to be a nuisance even thought it was done lawfully

iii. The court determined permanent damages were allowed where the loss recoverable is small in comparison with the cost of removal of the nuisance.

iv. Servitude on land- easement (bought the ability to use the land in a polluting manner); stick from the bundle

1. Cement factory paying owner and getting an easement to pollutev. when selling, reduced value of the land, plus the damage reward, it is as If you

didn’t have a problemvi. permanent damages- court did not give an injunction, but gave permanent

damages (balancing formula)1. Atlantic could fully compensate plaintiffs for past and future harm

without ceasing its business2. injunction would not solve the problem3. technically impossibility in meantime of abatement4. factory was more valuable use and also had positive externalities (jobs,

revenuesvii. issued injunction unless Defendant pays permanent damages

VII. Air Pollution and a Public Nuisancea. Spur Industries v. Del Webb Development

i. Public and private nuisance1. nuisance per se

a. statutory/health violation b/c of the flies2. Public- “is an unreasonable interference with a right common to the

general public”a. interferes with health, safety, peace, comfort or convenience

3. private- stink of cattle feedlot affect residencesii. Spur operated a cattle feed and the feed lot naturally generated enormous

quantities of manure, attracting insects and creating noxious odors, but no one objected at first b/c there were no neighbors

iii. Del Web created a retirement city that expanded until it was sufficiently close to Spur’s lot to make the two uses incompatible

iv. Court enjoined Spur, but required Del Webb to pay Spur “a reasonable amount of the cost of moving or shutting down the feed lot”

v. Equity required Del Webb to compensate b/c Webb came into the nuisance, but the people are the injured

vi. Why isn’t “coming to the nuisance enough?”1. usually just a factor to be balanced; in Arizona, it was dispositive but

went around precedent2. public nuisance- health violation 3. would be harming innocent purchasers

b. thresholdc. injunction

i. with P paying Ds reasonable costs of relocation or shutting down1. have a duty to somewhat limit damages- be reasonable

VIII. Options and Remediesa. No nuisance- use continues without restraintb. Enjoin nuisance- stops nuisance generating activity

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c. Award damages for nuisance but commit it to continuei. Ex: court can award permanent damages if deciding not to use an injunction-

amount sufficient to compensate now for all past and future injury that may be inflicted by continuation of the nuisance

d. Enjoin nuisance, but award damages to enjoined actori. Was the holding in Del Webb

ii. Del Webb came to the nuisance- courts hold that those who knowingly acquire and use land in a manner incompatible with existing uses have voluntarily assumed burden of what might be a nuisance were it to have been the late arrival

1. in some cases this is dispositive and won’t get plaintiff a nuisance victory2. others it can lead to damage reward for D, but also enjoined

iii. wouldn’t have had an action unless he started building near the nuisance

IX. Lateral Subjacent Support Rightsa. Lateral support- right to support from adjacent land

i. Land and structure distinction1. land- landowner who alters his land by removing the lateral support from

his neighbor’s land is strictly liable for any resulting damage to his neighbor’s land

a. also applies to artificial supports, like retaining walls2. structures- landowner is liable for damage to structures from withdrawal

of lateral support if either of 2 conditions is met:a. landowner was negligent and collapse would not have occurred

but for the added weight of the structuresb. collapse would have occurred whether or not the structures were

there c. if withdrawal of lateral support is so extensive natural contours

would have collapsed, it’s strict liability; if not enough to cause natural contours to collapse, negligence

b. subjacent support- occurs when ownership is split into ownership of the surface and ownership under the surface

i. owner of the underground rights is strictly liable for any damage caused to land or structures on the surface resulting from withdrawal of subjacent support

ZONING

I. Zoninga. Governmental power to regulate land use (accomplished through police powers)

i. Divides a political jurisdiction into specific separate geographic areas and impose limits on the permissible uses of land within each area

b. takes some of the theory of nuisance prevention

II. Objectives of Zoninga. Prevent incompatible uses from occurring (reducing need for nuisance laws)b. Increase property values by minimizing use conflictsc. Channel development into patterns that serve larger social goals

III. Constitutional Validitya. Village of Euclid v. Amber Realty

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i. SCOTUS upheld validity of law against due process and equal protection challenges

ii. Cumulative Zoning restrictions broke districts up by:1. uses2. height3. area

iii. Goal of minimizing land use conflicts to prevent nuisances was legitimate exercise of state’s police power b/c it wasn’t unreasonable nor arbitrary

iv. Town is trying to achieve health and stability of single-family residences and most efficient uses of property

v. Why excluding single-family residence zone reasonable1. reduces traffic2. security3. disturbing noises4. excluding apartments- court treats them like a nuisance accidente

vi. not arbitrary or confiscatory

IV. Cumulative Zoninga. “Euclidian” Zoning- law identifies land use in a spectrum of “higher” to “lower”

i. “highest”- single-family residential useii. Apartments and other multiple-family dwellings

iii. Light commercialiv. Heavy commercialv. “lowest”- industrial

b. all uses at the zoned district and higher will be permittedi. ex: single-family can go into other zones; industrial can’t go into any others

V. Mutually Exclusive Zoninga. Permits some uses in zone but excludes all othersb. Often used with respect to industrial or heavy commercial districts

VI. Density Zoninga. Controls density in an area- done through limits on height or size of structures, location

upon their site, and functional uses created within the structure

VII. Covenants and Zoninga. If covenant is more restrictive than the zoning restriction, the covenant controls

i. Ex: portion of parcel says for hospital purposes only within an area that allows industrial, commercial residential

1. hospital is more restrictive2. also, if parcel changed to only residential, hospital can still stay b/c of

non-conforming use doctrineb. if covenant is inconsistent with the zoning covenant will govern for as long as the non-

conforming use doctrine protects that use

VIII. Authorization of Zoninga. Most adopted at local level, although some states regulate use statewideb. Power is reserved to states and local governmentc. Enabling act- law authorizing localities to engage in zoning

i. State legislatures can delegate zoning authority to administrative agenciesd. Standard State Zoning Act empowers cities to:

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i. Regulate and restrict height, stories, and size of buildings, percentage lot that can be occupied, size of yards and open spaces, density of population, and location and use of buildings and structures

ii. Create use zones with differing regulationsiii. Modify zoning laws and grant variances in the public interestiv. Requires states to develop:

1. comprehensive plan to accomplish public objectives2. create procedures to establish, enforce, and alter zoning regulations3. establish a zoning commission and an appeal mechanism for landowners

e. ultra vires- beyond the authority given to the locality under the zoning actf. comprehensive plan: usually doesn’t have to be binding but must be implemented by

actual zoning ordinances for some public purpose

IX. Non-Conforming Usesa. Zoning responds to dynamic changes in communitiesb. Non-conforming use - when zoning is introduced some existing land uses will not be in

conformity with the uses permitted under the new zoning lawi. Non-conforming uses permitted to continue because their immediate abatement

would amount to either:1. taking of property without just compensation2. unreasonable exercise of the zoning power

c. could transfer a non-conforming use to another and it will still remain a nonconforming use

d. Termination of Non-Conforming Use:i. Abandoned, discontinued, or voluntarily terminated

1. usually need proof that user has voluntarily intended to abandon nonconforming use

2. discontinuance for a specific period terminates permission for the useii. Act of God destruction

1. replacement or structure must conform to zoning lawiii. Nuisanceiv. Extinguished by eminent domainv. Natural expansion- Change or enlargement in use

1. if it expands it is no longer a nonconforming usevi. Major repairs that extend life of use

vii. Amortization- half states use it

X. Non-Conforming Uses: Amortizationa. Amortization - zoning law may specify a period after which the nonconforming use must

ceasei. Must be long enough to avoid a successful charge that forced phase-out amount

to an uncompensated taking or denial of substantive due processii. Does it allow adequate time for elimination of non-conforming use?

b. Majority Rule : Valid if reasonable; Look at “weighing the public gain against the private los which removal of use would entail”:

i. Nature of useii. Character of structure

iii. Locationiv. Portion of user’s total business is affectedv. Salvage value

vi. Extent of depreciation

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vii. Any monopoly or other advantage conferred on user by reason of foreclosure of similar and competing uses

c. Minority Rule : invalid per se (constitutes an uncompensated taking of property, no matter the length the amortization period is)

d. PA Northwestern Distributors, Inc. v. Zoning Hearing Boardi. Moon Township adopted ordinance making it illegal to operate an adult store

ii. PA Northwester became a non-conforming use; had to cease to use it in 90 days or convert it to a legal use

iii. Says it is per se confiscatoryiv. Concurring justice thought it was void b/c amortization period was unreasonable

e. spot zoning- one parcel or small number typically owned by same party get bad or good treatment

Exactions

I. Exactionsa. Exactions- Government imposes a condition to obtaining a permit that could not

independently be imposed without compensating the landlord

II. Rule for Permit Conditions- The Permit Condition Musta. Legitimate State Interest: Further a legitimate state interestb. Essential Nexus: Have an essential nexus to negative impacts generated by the proposed

project (a substantial relationship to the government’s valid regulatory objective)i. Ex: Nollan

c. Roughly Proportional: Nature and scope of condition is roughly proportional to the impact of the proposed development, based on an individualized assessment undertaken by the municipality

i. Ex: Dolanii. Extends Nollan- even if there is a clear connection, the permit must be roughly

proportional to the interestiii. Individualized assessment- go out and see how it is going to work (no

assumptions or assertionsiv. No specific formula

III. Essential Nexusa. Nollan v. California Coastal Commission- 1987

i. Nollan owned beachfront property- lot extended to mean high-tide water mater along peach; sought approval from Commission for permission to demolish structure and put a new one up, but Commission refused to grant a permit unless he consented to a recorded easement which would permit unrestricted public use of Nollan’s beachfront lying between retaining wall and high-tide mark

ii. State interest: 1. preventing beach congestion2. preventing “psychological barrier- not limiting visual access to beach

iii. no essential nexus: view of beach won’t be improved by a public easement to get access to the beach

1. condition failed to further the end advanced as justification for prohibition; was not substantially advanced

IV. Rough Proportionalitya. Dolan v. City of Tigard- 199

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i. Dolan wanted to expand her store and portion of site was within flood plainii. City conditioned permit on dedicating to public use the entire portion of the lot

within the flood plain, as well as an additional 15 ft strip of land adjacent to the flood plain as a pedestrian walkway/path

iii. Government interests:1. prevent flooding from more runoff caused by paved parking lot and

bigger building2. potential for more traffic

iv. essential nexus- legitimate purposes are furthered by conditionsv. not roughly proportional: failed to sow how a public greenway (with ppl

coming all the time) would be better than a private one and court didn’t show evidence that additional number of vehicle and bicycle trips generated by development reasonably relate to the dedication of an easement

1. people allowed on path at all times2. could find a traffic consultant and do studies to see if it is roughly

proportional3. height, width restrictions may show proportionality

b. NJ Supreme Court case- developer only has to pay pro rata share that they would get benefit from

EMINENT DOMAIN

I. Eminent Domaina. Was a historical practice that there was an assumption that government has power to take

i. Evolved over time- was originally power to take for large public projectsii. Compensation came later on

b. All governments in the US have the power to take private property and use it for public purposes, but the power is limited by the US Constitution

c. 5th Amendment (Takings Clause)- “private property shall not be taken for public use without just compensation”

i. Applies to federal and state governments; incorporated through 14th

d. Two prongs of the Takings Clause:i. Public use - designed to prevent any taking that forces a transfer of private

property from one private person to another with no public benefit1. governments sometimes take private property and convey it to another in

order to reap a collateral public benefit2. used to benefit the public as a whole

ii. Just compensation - stipulates that when governmental power is used to seize private property the public pays the proper own the value of property

1. usually it is fair market value- price a willing buyer and willing seller would agree upon

a. owner is not entitled to any additional value that is subjective and peculiar to owner (sentimental)

b. severance damages- owner can be paid the difference between the value of entire parcel before taking and value of parcel left to owner after taking (before-and-after rule)

c. fair market value due is calculated without regard to the effect of condemnation itself on values

II. “Public Use” Requirement

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a. No governmental seizure of private property may occur unless it is for a public use (even if compensation is provided)

b. Meaning of “Public Use”i. Literal reading of Constitution (SCOTUS rejected this view in Kelo)

1. would limit government power to take property to instances where property will actually be used by the public (park, road, school)

a. collateral public benefits not permissible (ex: conveyed property to private corporation to provide economic benefits to comm.)

ii. Public Benefit1. extreme deference to legislative judgments on public use

a. ex:i. economic revitalization

ii. taxesiii. jobsiv. revenue growthv. don’t get these things without private development

2. as long as the taking is rationally related to any conceivable public purpose the “public use” requirement is satisfied

a. Berman v. Parker- “urban renewal” scheme in which blighted property was condemned and transferred to private developer was public use

b. Hawaii Housing Authority v. Midriff- public use that forced transfer of fee titles in order to eliminate the perceived social and economic evils of land oligarchy (rational relationship)

III. Eminent Domain Chart- Distinguishing Between Regulatory Takings a. Compensable takings pursuant to government’s eminent domain power

i. Explicit, intentionally done by a governmental body or other entity vested with eminent domain power

1. Kelo example2. given by the takings clause

ii. Inadvertently done by purported police power (regulatory takings)1. different taking than (i)2. government has purported to regulate and court says that if they do, they

have to compensate- regulatory takings start out as noncompensableb. Noncompensable regulation of property pursuant to government’s police power

i. No compensationii. Zoning, historic preservation, environmental controls

IV. Valuation of Estates and Associated Future Interests in Eminent Domaina. Fee Simple Absolute- easiest

i. Only have to deal with present possessory ownerb. Life Estate with Reversion or Remainder- more difficult

i. Have to find future interests and compensate them the sticks in their bundleii. Lump sum would be given and divided upon actuarial tables to determine

allocation between life tenant and future owners 1. how old is life tenant- how much longer they expected to live

c. Defeasible Fee with Right of Entry, Possibility of Reverter, of Executory Interesti. When government wants to take fee simple, they want everything

ii. Problem distinguishable from life estate: defeasible fee may never end while a life estate surely will

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iii. Majority view: in a defeasible fee, the holder of the fee gets the entire condemnation award

iv. Restatement view- if defeasible fee will probably not end within a reasonable period of time (not imminent), fee holder should have entire award

1. unless you can show verge of breach, future interest gets nothingv. could use RAP for executory interests to see if it will vest

vi. PR + RE can use some statutes that set 30 year limits1. can use this factor as well to determine if it can vest & value property

vii. Ink v. City of Canton- diverges from rules and pays out to future interest in defeasible fee

V. States and Eminent Domaina. States are free to interpret their own Constitutions independently and have the power to

define public use limit upon takings differently than the US Supreme Courtb. States can be more restrictive in its takings power

i. The Takings Clause is a floor, not a ceilingii. After Kelo, some states have limited the use of eminent domain to give people

greater property rights

VI. Relationship Between Public Use and Just Compensationa. Courts are reluctant to deny eminent domain power, fearing that desirable public benefits

would be lost b/c the transaction costs of proceeding through voluntary transfers are insurmountable

i. Two ways courts address weak public use test1. liability rule- traditional fair market value compensation would be paid,

but compensation would increase as the taking appears to edge closer to looking like a private-to-private transfer (less errors in the long run)

2. usings- whether government actually uses the property

VII. Kelo v. City of New Londona. New London decided to condemn private residential properties in order to assemble a 90

acre tract for a Pfizer plant. The property was to include a small urban village, 80 new homes, 90,000 sq. ft. of office space, a marina, retail space, water-dependent uses. New London was having a lot of problems

i. Kelo held out on the transferii. Blight- deterioration or dilapidation of the property

b. Court held that so long as the condemnation was part of a comprehensive development plan that had been subjected to thorough deliberation, the Court would defer to the judgment of government officials

i. The taking was rationally related to a conceivable public purposeii. Would create economic revitalization in New London, jobs, revenue growth

iii. Holding: give deference to legislative decisions as long as plans are comprehensive

iv. Public purpose: Court says “it’s the purpose, not the mechanics”- looks at the ends, not the means

v. Government’s pursuit of a public purpose will often benefit individual private parties

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