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Property - Coggle Diagram

- - - - Indefeasible Interests: not subject to early termination (includes fee simple absolute and life estate)
      - Defeasible interests: allows a fee simple or life estate to be terminated if a stated event occurs (includes fee single determinable, subject to condition subsequent, and subject to an executory interest)
        
        A fee simple determinable is an estate that automatically terminates on the happening of a stated event.
        
        The interest that is left in a grantor who conveys a fee simple determinable is a possibility of reverter, which arises automatically in the grantor and can be devised by will in almost all jurisdictions.
        
        example: "so long as one or more dogs are kept on the property; if dogs are no longer kept on the property, then to the American Society for the Prevention of Cruelty to Animals (ASPCA)." ASPCA has an executory interest.
        
        "To A for Life" A life tenant is entitled to all ordinary uses and profits of the land, but he cannot lawfully do any act that would injure the interests of the remainderman. A grantor intends that the life tenant have the general use of the land in a reasonable manner, but that the land pass to the owner of the remainder, as nearly as practicable, unimpaired in its nature, character, and improvements.
        
        . A life tenant can substantially alter or even demolish existing buildings if (i) the market value of the future interests is not diminished and either (ii) the remainderman does not object, or (iii) a substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity or usefulness.
        
        Fee simple subject to condition subsequent: A fee simple subject to a condition subsequent is created when the grantor retains the power to terminate the estate of the grantee on the happening of a specified event. On the happening of that event, the estate of the grantee continues until the grantor exercises her power of termination (right of entry) by bringing suit or making reentry.
        
        A right of entry is a reversionary interest of the transferor, which is not subject to the Rule Against Perpetuities because it is vested.
    - - Interests retained by the grantor (includes reversion, possibility of reverter, and right of entry)
      - Interests created in a transferee (executory interests, remainders, and class gifts)
        
        A remainder is a future interest created in a transferee that is capable of taking in possession on the natural termination of the preceding estate. A remainder is vested if the beneficiaries are ascertainable and their taking in possession is not subject to a condition precedent. A vested remainder created in a class of persons that is certain to take but is subject to diminution by reason of others becoming entitled to take is a vested remainder subject to open. Vested remainders may be subject to total divestment if possession is subject to being defeated by the happening of a condition subsequent
  - - - Tenant must pay rent and may not commit waste
      - Landlord generally must repair, must deliver habitable premises, and may not interfere with tenant's
      - Governed largely by the lease and tort law
  - - - Requirements for burden to rub to later grantees: intent, notice, horizontal privity, vertical privity, touch and concern
        
        . After an assignment, the original tenant is no longer in privity of estate with the landlord. However, a tenant may still be held liable on its original contractual obligations to the landlord on privity of contract grounds.
        
        A sublessee is not personally liable to the landlord for rent or for the performance of any other covenants made by the original lessee in the main lease (unless the covenants are expressly assumed) because the sublessee does not hold the tenant’s full estate in the land (so no privity of estate).
        
        When a covenant runs with the land, subsequent owners of the land may enforce or be burdened by the covenant. If all of the requirements for the burden to run are met, the successor in interest to the burdened estate will be bound by the arrangement as effectively as if he had himself expressly agreed to be bound. To be bound: (i) the parties must have intended that the covenant run with the land; (ii) the original parties must have been in horizontal privity; (iii) the succeeding party must be in vertical privity with the original promisor; (iv) the covenant must touch and concern the land; and (v) generally, the burdened party must have actual or constructive notice of the covenant. Here, the intent is shown by the express language of the covenant, which says that it is intended to run with the land. Even without that language, the use of the words “heirs” and “assigns” would show the intent for the covenant to run. The original parties were in horizontal privity because at the time the vintner entered into the covenant, he and the friend shared an interest in the land independent of the covenant—as grantor and grantee.
      - Requirements for benefit to run: intent, vertical privity, touch and concern
      - Written promises to do or refrain from doing something on land, with a usual remedy of money damages
    - - Affirmative easements: right to use someone else's land
      - Negative easements: right to prevent something on another's land
      - Easement appurtenant: involves two tracts of land
        
        Dominant parcel has the benefit, which runs to grantees
        
        Servient parcel has the burden, which runs to grantees with notice
        
        Where there is an easement appurtenant, it passes with a transfer of the dominant tenement, even though it is an interest in the servient tenement.
      - Creation of easements
        
        Implication by operation of law: by use existing before a tract was divided, and by necessity for a landlocked parcel
        
        An easement by necessity (a form of easement by implication) will be implied when a landowner conveys a portion of their land with no way out except over some part of the grantor's remaining land. The owner of the servient parcel has the right to locate the easement, provided the location is reasonably convenient.
        
        Prescription: acquired through adverse, open and notorious, and continuous use for the statutory period
        
        Express grant or reservation (Statute of Frauds applies): an oral grant creates a license, which is not an interest in land
        
        The express easement for the landowner's old property benefits that property only and cannot be used for the landowner's expanded access to the new property. An easement is a liberty, privilege, or advantage that one may hold in the lands of another. The holder of an easement has the right to use a tract of land (called the servient tenement) for a special purpose; e.g., laying utility lines, or for ingress and egress. An easement can be created, as in this question, by express grant. If the parties to the original creation of the use specifically state the location of the easement, its dimensions, and the special use or limits to such use, the courts will honor this expression of specific intent. Absent specific limitations, it will be assumed that the parties intend that the easement meet both present and future reasonable needs of the dominant tenement. However, a basic change in the nature of the use is not allowed.
      - Termination of easements: can end by stated condition, unity of ownership between easement and servant estate, abandonment, estoppel, prescription, necdessity, relaese, or condemnation
    - - Requirements for burden to run: intent, notice, touch and concern
      - Requirements for benefit to run: intent touch and concern
      - Implied from a common scheme for development if notice exists
      - Equitable defenses apply (i.e., unclean hands, estoppel, acquiescence, changed neighborhood conditions)
      - Covenants with equitable remedies (i.e., injunction, specific performance)
- - - - If, at the testator's death, she no longer owns property that was specifically devised, that gift fails (i.e., is adeemed
      - If, at the testator's, the beneficiary has already died, his gift fails (i.e., lapses) or might pass to the beneficiary's descendants under an anti-lapse statute if he and the testator were related
      - Effective on the testator's death
    - - Time for performance presumed not of the essence
      - Marketable title: contracts contain an implied covenant that seller will deliver title free from an unreasonable to risk of litigation (when purchase price and deed exchanged)
        
        Absent a provision to the contrary, a contract for the sale of land contains an implied promise by the seller that she will deliver to the buyer a marketable title at the time of closing. This promise imposes on the seller an obligation to deliver a title that is free from reasonable doubt; i.e., free from questions that might present an unreasonable risk of litigation. Title is marketable if a reasonably prudent buyer would accept it in the exercise of ordinary prudence. An easement that reduces the value of the property (e.g., an easement of way for the benefit of a neighbor) generally renders title unmarketable. If the buyer determines, prior to closing, that the seller's title is unmarketable, he must notify the seller and allow a reasonable time to cure the defect. If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can rescind, sue for damages caused by the breach, or obtain specific performance with an abatement of the purchase price. However, the buyer cannot rescind prior to closing on grounds that the seller's title is unmarketable. Where an installment land contract is used, the seller's obligation is to furnish marketable title when delivery is to occur, e.g., when the buyer has made his final payment. Thus, a buyer cannot withhold payments or seek other remedies on grounds that the seller's title is unmarketable prior to the date of promised delivery.
        
        All contracts for the sale of land contain, unless the contract expressly provides otherwise, an implied covenant by the seller that she will deliver to the buyer a marketable title at the date of closing. Marketability refers to freedom from the possibility of litigation concerning the title; title is marketable if a reasonably prudent buyer, ready and able to purchase, will accept it in the exercise of ordinary prudence. At times, sellers will rely on adverse possession to show that defects in title have been cleared. However, courts generally will not permit such reliance when proof of adverse possession rests only on oral evidence that will not be available to the buyer in the future.
        
        equitable conversion: Although jurisdictions differ as to which party has the risk of loss, the majority rule is that where property subject to an enforceable contract for sale is destroyed without the fault of either party before the date set for closing, the risk of loss is on the buyer. Thus, the buyer must pay the contract price despite a loss due to fire, unless the contract provides otherwise
        
        In general, courts presume that time is not of the essence in real estate contracts. Thus, the closing date stated in the contract is not absolutely binding in equity, and a party, even though late in tendering his own performance, can still enforce the contract if he tenders within a reasonable time. (One to two months is usually considered reasonable.) Time will be considered of the essence only if: (i) the contract so states, (ii) the circumstances indicate it was the parties' intention, or (iii) one party gives the other notice that he desires to make time of the essence.
      - Statute of Frauds: no writing is required if buyer has partially performed through possession, improvement, or payment
    - - Must evidence an intent to transfer land and adequately describe the land and parties
      - Effective on delivery (i.e., words or conduct showing the grantors intent to immediately pass title) and acceptance (often presumed)
      - Types of deeds
        
        Special warranty deed: covenants against title defects created by the grantor
        
        Quitclaim deed: no covenants; transfers whatever interest grantor has
        
        General warranty deed: covenants against any title defects created by the grantor or prior titleholders
  - - - Open and notorious: when it is such as the usual owner would make of the land and is sufficient to put the true owner on notice of the fact of possession.
      - Adverse/hostile: without the owner's consent. It doesnt matter whether the possessor believes he is on his own land or knows he is trespassing on someone else's land.
      - Continuous: average owner would make of the property under the circumstances.
      - Actual and exclusive: means not sharing possession with the true owner or the general public.
      - The statutory period is the limitations period for an ejectment action.
- - - - This is the traditional common law rule: creation: needs 4 unities (TTIP)
        
        at the same TIME
        
        with IDENTICAL, equal INTERSTS
        
        with rights to possess the whole
        
        Under the unity of possession, each co-tenant has a right to possess the entire estate subject to the equal right of her co-tenant. A co-tenant out of possession cannot bring a possessory action unless there has been an "ouster"
        
        by the same TITLE
      - When one JT dies, share goes automatically to surviving joint tenant
      - Alienable inter vivos : transferable during lifetime. Inter vivos conveyance by one joint tenant of her entire interest destroys the joint tenancy (so that the transferee takes the interest as a tenant in common and not as as joint tenant in common) a conveyance of a lesser interest (such as a mortgage) may not effect a severance.
        
        Lien theory states: a mortgage is regarded as a lien on the title and one joint tenant's execution of a mortgage on her interest does not by itself cause a severance.
        
        However, the severance would occur only if the mortgage is foreclosed and the property sold. The mortgagee risks losing its interest if the mortgagor dies prior to foreclosure.
        
        Title theory states: a mortgage is regarded as a transfer of title, which destroys the unity of title and severs the joint tenancy.
        
        In most states, a severance results when one joint tenant executes a valid contract to convert her interest to another, even though no actual transfer of title has yet been made. The contract to convey is enforceable in equity, and hence is treated as an effective transfer of an equitable interest. If the seller dies before the title is transferred, the purchaser is entitled to a deed from the seller's estate and becomes a tenant in common with the original joint tenant.
        
        t. An inter vivos conveyance by one joint tenant, even a "secret" deed that is to take effect only upon the grantor's death, severs a joint tenancy. However, although acceptance (presumed or otherwise) usually "relates back" to the date of delivery of the deed in escrow, many courts refuse to relate back an acceptance where it would defeat the rights of intervening third parties, such as surviving joint tenants. Thus, the grantee's acceptance of the deed after the grantor's death does not relate back to defeat the right of survivorship.
      - Not descendible or devisable. Because of right of survivorship (at creation, this right needs to be clearly stated)
      - Severance & Sale: sell or transfer their interest during lifetime. a voluntary conveyance by a JT of their interest destroys the JT. Trasnferee takes as a tenant in common. DISRUPTS the 4 unities as to the seller's interest. If more than 2 JT, JT remains the same with respect to the others
        
        Severance and Partition
        
        By judicial action called partition in kind (physical)
        
        By judicial action called a forced sale (when single building)
        
        By voluntary agreement
        
        Transactions that will not result in severance: mortgages (lien on title does not sever a JT, in minority of states it does), effect of one JT murdering another
      - Although a joint tenant or tenant in common may have a right to compel contribution from other co-tenants for the cost of necessary repairs, taxes, and payments due on mortgages, she does not have a right to compel contribution for the cost of improvements.
        
        If one co-tenant wrongfully ousts another co-tenant from possession of the whole or any part of the premises, the ousted co-tenant is entitled to receive her share of the fair rental value of the property for the time she was wrongfully deprived of possession.
      - Creation under the modern rule:
        
        JT's are disfavored: A conveyance to two or more persons presumptively creates a joint tenancy in common, which has no right of survivorship, rather than a joint tenancy. A joint tenancy results only when an intention to create a right of survivorship is clearly expressed.
    - - Created: marriage. "Cant touch this"
      - Creditors of only one spouse cannot touch this tenancy for satisfaction of the debt
      - One spouse, acting alone, cannot defeat the right of survivorship by unilaterally conveying to a third party
      - Severance: death, divorce, mutual agreement, or execution by a joint creditor of both the spouses can sever a tenancy by the entirety. On divorce, it becomes a tenancy in common
    - - Possession: each co tenant has the right to possess all portions of the property but has no right to exclusive possession of any party
      - Rents and profits: In most states, a co-tenant in exclusive possession of any part. Ouster is an actionable wrong. From third parties: have to share with other co-tenants
      - Adverse Possession: unless oustered, the co tenant with exclusive possession for the statutory adverse possession period cannot acquire title to the whole to the exclusion of the other co-tenant
      - Each pay their fair share of carrying costs (taxes and mortgage interest payments)
      - Repairs: right to contribution during the life of the co-tenancy for reasonable, necessary, repairs, provided they gave notice to the other co-tenant(s) of the need for the repair
      - Waste: Voluntary, permissive, and ameliorative waste (unilateral change that increases value)
  - - - Inquiry notice: what a reasomable inquiry would have revealed. Inquiring into the property
      - Record notice: is notice that the law imputes to the purchaser if a prior deed was properly recorded in the grantee's chain of title.
      - Actual notice: what the grantee actually knows
    - - Race-notice statutes: later BFP wins only if she records before the earlier grantee records
      - Race stattues: first to record wins: actual notice is irrelevant
      - Notice statutes: later BFP wins if earlier grant was not recorded.
        
        BFP: is a purchaser who takes for valuable consideration and without notice of a prior claim at the time of conveyance.
        
        A title search is not complete without an examination of possession. If the possession is unexplained by the record, the purchaser is obligated to make inquiry. The purchaser is charged with knowledge of whatever an inspection of the property would have disclosed and anything that would have been disclosed by the possessor
      - Recording acts do not protect a subsequent purchaser against interests that arise by operation of law (implied easements, title by adverse possession), because there is no instrument to record in order to perfect such interests.
    - - A deed is not effective to transfer an interest in realty unless it has been delivered, and there must be acceptance by the grantee to complete the conveyance.
      - deed to a nonexistent person is void and conveys no title.
      - As a general rule, delivery of the deed is the final operative act to complete a conveyance of title to the grantee, because courts will infer the grantee's acceptance if the conveyance is beneficial to him. However, all courts will consider evidence that is contrary to the presumption or inference.
      - A valid deed requires a writing containing a description of the land and parties, words of intent, and the grantor's signature. Here, the signature on the deed was forged. A defective deed may be voidable, which means that it would be set aside only if the property had not been conveyed to a bona fide purchaser, or it could be void, meaning that the deed would be set aside regardless of the property having passed to a bona fide purchaser. Deeds obtained by means of, among other things, duress, undue influence, or mistake are considered voidable. Deeds that were forged, never delivered, or obtained by fraud in the factum are void.
      - To be valid, a deed must be "delivered," which means that the grantor must have taken some action (not necessarily a manual handing over of the deed) with the intent that it operate to pass title immediately. Recording a deed that has been acknowledged before a notary is such an action and is presumed to carry with it the requisite intent. Even without the knowledge of the grantee, delivery to the recorder's office will satisfy the delivery requirement.
      - If a deed is given for security purposes rather than as an outright transfer of the property, it will be treated as an "equitable" mortgage and the creditor will be required to foreclose it by judicial action like any other mortgage. In determining whether an absolute deed is really a mortgage, the court considers the following factors: (i) the existence of a debt or promise of payment by the deed's grantor; (ii) the grantee's promise to return the land if the debt is paid; (iii) the fact that the amount advanced to the grantor/debtor was much lower than the value of the property; (iv) the degree of the grantor's financial distress; and (v) the parties' prior negotiations.
- - - - In all states, the equity of redemption provides the borrower with an equitable right, at any time prior to the foreclosure sale, to redeem the land or free it of the mortgage or lien by paying off the amount due or, if an acceleration clause applies, the full balance due. Only about half the states, however, give the borrower a statutory right to redeem for some fixed period after the foreclosure sale has occurred; the amount to be paid is generally the foreclosure sale price, rather than the amount of the original debt.
      - The proceeds of the foreclosure sale are used first to pay expenses of the sale, attorneys' fees, and court costs; then to pay the principal and accrued interest on the loan that was foreclosed; next to pay off any junior liens or other junior interests in the order of their priority; and finally, any remaining proceeds are distributed to the mortgagor.
    - - Title theory: mortgagee holds title until mortgage is satisfied
      - Intermediate theory: mortgagee holds title only after default
      - Lien theory: mortgagee holds a security interest only