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Real Property - Coggle Diagram

- - - - Types
        
        Fee Simple Subject to Condition Subsequent (FSSCS)
        
        Can terminate after a named event, grantor has right of reentry
        
        Limited by specific conditional language ("but if")
        
        Focus on the language of the grantor: suggests that the grantor must exercise a right in order to take possession
        
        Fee Simple Subject to an Executory Interest
        
        Automatically divests in a third party on the happening of a named event
        
        The future interest is held by a transferee and not the grantor
        
        Fee Simple Determinable (FSD)
        
        Terminates automatically after a duration, grantor has possibility of reverter
        
        Limited by specific durational language ("so long as")
        
        The fee simple lasts while the period is in play, but as soon as the period ends, the fee simple ends
      - May be terminated by the occurrence of an event/condition
      - Capable of lasting forever but also being terminated early
      - Condition will cut short the fee simple
    - - Doctrine of Waste
        
        Under the doctrine of waste, a LT generally must deliver the property to the future interest holder in substantially the same condition that it was in when she took possession, with allowance for normal wear and tear
        
        Three Kinds of Waste
        
        Affirmative Waste
        
        Waste caused by voluntary conduct, which causes a decrease in value
        
        Permissive Waste
        
        Waste caused by neglect toward the property, which causes a decrease in value
        
        LT has a duty to prevent permissive waste by making reasonable repairs
        
        Ameliorative Waste
        
        LT or other person in possession changes the use of the property and actually increases the value of the property
      - Lasts for duration of grantee's life (life estate transferred to someone else lasts for named grantee's life)
      - Life Tenant Duties
        
        Duty to make ordinary repairs
        
        LT must make reasonable repairs to preserve property
        
        Duty to pay current charges
        
        When there's a mortgage on property that is possessed by a LT, the LT is responsible for the interest payments, and the remainderman is liable for the principal.
        
        LT must pay all current charges due during LT (e.g., property taxes, mortgage interest) up to financial benefit from property
        
        The financial benefit is determined differently depending on whether the life tenant:
        
        occupies the property – in which case the financial benefit is measured by the fair market rental value of the property (e.g., reasonable rental value) or
        
        Reasonable Rental Value > Property Taxes = LT is liable to Remainderman for the full amount of the taxes paid
        
        does not occupy the property – in which case the financial benefit is measured by the income derived from the land (e.g., third-party rental income, crops grown on the land)
        
        If LT fails to pay property taxes, then the holder of a remainder interest may pay the taxes to protect the interest—but has no duty to the life tenant to do so
        
        The remainderman can then sue the life tenant for taxes paid, not to exceed the value of the financial benefit that the life tenant received from the property.
        
        Duty to prevent waste
      - Future Interests Following a Life Estate
        
        Reversion: if possession goes back to the grantor after the life estate ends, then the grantor retains a reversion
        
        Remainder: if possession of the land goes to a third party (transferee) after the life estate ends, then the 3P takes a remainder
      - Not inheritable (neither by will or intestate) because it ends naturally when the measuring life ends
    - - Largest possible estate in land, indefinite duration ("to A [and his heirs]")
      - No future interests associated with fee simple = capable of lasting forever
  - - - Possibility of Reverter
        
        a type of right that is automatically in effect when a grantor creates FSD
      - Right of Entry (power of termination)
        
        Must expressly state in conveyance of FSSCS and affirmatively exercised
        
        Does not vest automatically; it must be reclaimed (e.g., "O can re-enter and re-take")
      - Reversion
        
        Created when grantor transfers less than a fee interest to 3P ("to A for life, then to B for life" → O")
    - - Remainder: Future interested created in 3P (remainderman), to be taken after natural termination of a life estate ("to A for life, then to B"–B has a remainder), thus cannot follow a fee simple (but executory interest can cut it short)
        
        Vested Remainder: created in ascertained person + not subject to a condition precedent (other than termination)
        
        If the holder of a vested remainder dies, the interest passes to the holder's heirs
        
        VR subject to open (class gift): interest subject to diminution due to new class members (birth of additional persons who will share in the remainder as a class)
        
        "to A for life, then to children of B"
        
        When all the members are identified, the class is closed
        
        Rule of Convenience: Class closes when at least one member of the class becomes entitled to distribution (immediate possession)
        
        At least one member of the class must be vested. If no one in the class is vested, then the remainder is contingent
        
        VR subject to total (complete) divestment:if the occurrence of subsequent condition will eliminate the remainder interest
        
        "to A for life, then to B and heirs, but if B dies unmarried, then to C and heirs"
        
        B has VR subject to divestment by C's executory interest
        
        if ambiguous, construe as subject to divestment rather than contingent remainder or executory interest
        
        Contingent remainder: remainder not yet vested in unborn/unknown person, or subject to condition precedent
        
        "to A for life, then to children of B": Remainder is contingent if B has no children
        
        cf. VR subject to open
      - Executory Interests: Created in favor of 3P, cuts short previous estate before its natural termination (the word for terminating a prior interest is to "divest")
        
        Springing: follows a gap or cuts short grantor's estate (O → condition → 3P, 3P → O → 3P)
        
        Most likely springing if there are 2 parties (Grantor + Grantee) because the grantee will divest the grantor
        
        Shifting: Future interest in 3P that divests preceding grantee estate (3P1 → condition → 3P2)
        
        Most likely shifting if there are 3 parties (Grantor + Grantee + Grantee) because a grantee will divest another grantee
    - - Transferability of Remainders and Executory Interests
        
        Remainders, both vested and contingent, and executory interests are alienable (i.e., transferable during life or upon death)
      - Shelley's Rule
        
        Use the doctrine of merger to create a fee simple; prevents remainders in a grantee's heirs ("to A for life, then to A's heirs" → A has a fee simple)
      - Doctrine of Worthier Title
        
        Remainder in grantor's heirs ("to A for life, then O's heirs") is invalid and becomes reversion in grantor
    - - Rule: specific future interests are valid only if they must vest or fail by the end of a life in being plus 21 years
        
        RAP is not whether an interest vests or fails. It's about whether we will know if it vests or fails. Cannot have uncertainty.
        
        Ask: WHEN IS THE LAST MOMENT IN TIME WE WILL KNOW WHETHER THIS INTEREST VESTS OR FAILS?
        
        RAP and Class Gifts: If the gift to any member of the class is void under RAP, the the gift is void as to all members of the class. The gift is "bad as to one, bad as to all"
        
        Exceptions
        
        Transfers of a specific dollar amount to each class member
        
        Transfers to a subclass that vests at a specific time (e.g., "to the children of B, and upon the death of each, to that child's issue")
        
        :warning:Remember: living people have the nasty habit of breeding = property law assumes that anyone who is alive can still have children
        
        Rule of Convenience: can save a class gift from being invalidated under RAP. The class closes as soon as a member of the class is entitled to immediate possession (an interpretive rule)
      - When, What, Who?
        
        When: Identifying when the interests were created
        
        Intervivos transfer: created at the time of the grant (note: an intervivos grantor might have a child born after the grant
        
        Devise (will): interests created at T's death, not when the will is drafted (note: can't have more children after death)
        
        What: Determine if the interests are subject to RAP
        
        Contigent Remainder
        
        Because (1) unascertainable grantee or (2) express condition precedent
        
        Class Gifts/VR subject to open
        
        Because of potential for additional class members
        
        Power of Appointment
        
        power to dictate who will receive a T's property
        
        Executory Interest
        
        because held by 3P and is not a remainder
        
        Right of first refusal
        
        almost always violates RAP if it doesn't provide a termination date within RAP period
        
        preemptive right to acquire property before transfer to another
        
        Option
        
        Right to purchase property in exchange for consideration
        
        Who: Identify the relevant and, if applicable, validating lives
        
        Relevant Life: person who affects vesting, usually mentioned or implied by the grant (e.g., prior life tenant, the parent where a conveyance is made to a child)
        
        Validating Life: person who tells us whether or not the interest vests within the RAP period (lifetime plus 21 years)
        
        if you can find a validating life, then you DON'T have a RAP violation
        
        Must have been alive when the interests were created
        
        Can validate her own interest
        
        If no no validating life, then the interest is no good and we strike it from the grant; if there is a validating life, then the interest is good
      - RAP Violations: when strike out the violating interest, as if the interest was never created in the first place
      - Exceptions to RAP
        
        Charities = doesn't apply to a gift from one charity to another charity
        
        options and rights of first refusal in leases or commercial deals are safe.
        
        AKA: If you’re dealing with a business-type deal — like buying, selling, or leasing commercial property — and the deal includes options or rights of first refusal, the RAP does not apply at all.
  - - - Joint Tenancy
        
        Cannot devise interest at death; instead, property passes automatically to the remaining joint tenants because of ROS
        
        When there's only one surviving JT = that person owns the property outright upon the death of the other JTs
        
        i.e., would pass to devisee if devised by will or pass to heirs if by intestacy
        
        Defining characteristic: survivorship
        
        the surviving JT(s) automatically take the deceased tenant's interest
        
        Creation: grantor must make a clear expression of intent PLUS must be survivorship language (e.g., "as joint tenants with a right of survivorship")
        
        Four Unities (PITT): JTs must take identical interests at same time by same instrument with same right to possession.
        
        Possession: every joint tenant has an equal right to possess the whole of the property
        
        Interest: JTs must have an equal share of the same type of interest.
        
        Time: JTs must receive their interests at the same time
        
        Title: JTs must receive their interests in the same instrumenet
        
        Severance: If one unity is lost, the JT is severed → creates a TIC
        
        Intervivos Conveyance/Transfer/Sale
        
        Leases
        
        Some jurisdictions: lease severs the JT
        
        Other jdxs: treat the lease as a temporary suspension of the JT
        
        Partition Action (to make TIC)
        
        Mortgage taken on JT interest under title theory jdx (no severance under lien theory--majority view)
        
        any lien against a JT's interest terminates upon that JT's death, so the surviving tenants' interests are not encumbered
        
        NOT by will
      - Tenancy by the Entirety
        
        4 unities + 5th unity of Marriage
        
        Only between legally married parties at the time of grant; conveyance needs both spouses
        
        Severed by: death, divorce, mutual agreement
        
        Cannot alienate or encumber their shares without the consent of their spouse
        
        Has a right of survivorship
      - Tenancy in Common
        
        Concurrent owners have separate (distinct, legal interests) but undivided interests in the property
        
        No right of survivorship = each co-tenant can transfer the property freely at death as well as during life
        
        Only Unity of Possession Required: Each TIC is entitled to possess and control the whole property
        
        May be terminated by partition
        
        Default concurrent interest
    - - Concurrent Estates: Ownership or possession of real property by two or more persons simultaneously
      - Concurrent owners each have right to use or possess the whole property
    - - Possession: right to possess the whole property. If ousted from any portion, can sue for $ and/or ejectment
      - Partition: Right to demand (bring action) to physically divide if feasible, or seek to sell and divide proceeds
        
        Partition in kind = physical division
        
        Partition in sale = if physical partition is not practical or fair to all parties; proceeds are divided among co-tenants based on their ownership interests
        
        Co-Tenants can agree not to partition
      - Profits: entitled to 3P rent and profit from land proportionally. Profits belong to CT if brought by own efforts
      - Contributions for preservation of property: entitled to taxes, mortgages, necessary repairs shared proportionally
        
        Extraordinary repairs: no duty w/o agreement, but can offset with any rent collected and split rest of rent
        
        Improvements: no duty w/o agreement, but difference from increased price created goes to improving CT
    - - Each homeowner is under overarching covenants and restrictions (incl. fees) that govern whole community
        
        HOA may apply to planned unit developments (PUDs) or common interest developments (CIDs)
      - Each shareholder of co-op is tenant of corp. that holds title to land; co-op board decides who can occupy
      - Each condo owner owns FS to unit interior; all owners own walls, land, common areas as CTs
  - - - If T materially breaches lease, LL can retake by legal process (sue for rent) or eviction
        
        LL's Remedies for T's Breach
        
        Failure to Pay Rent: LL can sue for damages resulting from the breach as well as to remove the T from the property and terminate the lease
        
        Late Payment of Rent: LL is entitled to damages. If LL accepts late payment of rent, LL is treated as waiving his right to regain possession of the premises and terminate the lease
        
        Abandonment: if a T unjustifiably abandons the leasehold, T is treated as having made an offer to surrender his rights under the lease
        
        Acceptance of surrender = termination of lease
        
        T is not liable for any future rent
        
        LL's retaking possession coupled with LL's use of the premises or re-renting of the premises to a 3P may treated as acceptance
        
        Continuation of Lease = LL who does not accept the T's offer retains the right to continue to enforce the lease
        
        T remains obligated to continue paying rent
        
        Duty to Mitigate: making reasonable effort to re-rent the premises
      - If LL breaches, T may self-help: Terminate lease; abate rent to fair value; repair and offset future rent; seek damages
        
        Security deposits for T’s lease: LL must return deposit on termination, unless T’s obligations extend beyond termination. If LL fails to pay back T, LL is in default; T can then recover amount + damages
    - - Tenancy for years: For fixed period. Created by express agreement (writing > 1 yr)
        
        Terminates automatically upon the expiration of the term or when there's a breach of certain covenants (e.g., rent, habitability)
        
        No notice is required.
      - Periodic tenancy: Created by express or implied agreement (LL leases at monthly rent), or operation of law (T stays after lease expires).
        
        Termination
        
        Renews automatically until proper notice is given
        
        Proper notice means the terminating party gives notice before the start of what will be the last term
        
        Notice is effective on the last day of the period
        
        Year-to-year: notice must be given at least 6 months in advance; modern approach: a month's notice
      - Tenancy at will: No stated duration. Lasts until termination, death, or transfer. Created by express agreement
        
        This tenancy can generally be terminated by the landlord or the tenant.
        
        But if only one party is expressly given the right to terminate the leasehold, the arrangement may be deemed unconscionable if, for example, the arrangement is unfair due to one party's superior bargaining power. In such a case, both parties are given the ability to terminate the lease.
        
        BUT if a lease gives a tenant the sole right to terminate but is silent as to the landlord, courts typically will not imply a right of termination for the landlord.
      - Tenancy at sufferance: T occupies after lease expires.
        
        Terminates when:
        
        Landlord evicts
        
        Tenant vacates
        
        Landlord accepts rent (forms periodic tenancy)
        
        Absent an applicable statute, the landlord is not required to give notice to vacate the premises before taking steps to recover possession of the property
    - - Duty to pay rent. Duty to pay rent ends when T surrenders leasehold interest back to LL
        
        When duty to pay rent is suspended: failure to deliver actual possession of premises (LL duty), eviction (complete or partial), LL accepts surrender of premises, LL duty to mitigate damages, offsets for warranty of habitability (residential only), impossibility (premises are destroyed)
      - Duty to avoid waste No waste if premises damaged without fault of LL or T
    - - Duty to deliver actual possession of premises at beginning of lease term (breach if holdover T not been evicted)
        
        T may terminate the lease
        
        Minority rule: LL only required to deliver legal possession
      - Implied Covenant of Quiet Enjoyment: the T can withhold rent when the LL takes actions that make the premises wholly or substantially unsuitable for their intended purposes, and the T is constructively evicted
        
        Actual Eviction: T physically excluded from entire premises by LL or holdover T → T may stop rent
        
        Constructive Eviction: LL renders property uninhabitable + T vacates w/in reasonable time → T may stop rent and terminate lease. 3P interference is constructive eviction if LL knew or should have known about it
        
        Premises were unusable for their intended purposes
        
        The T notifies the LL of the problem
        
        LL does not correct the problem
        
        T vacates the premises after a reasonable amount of time has passed
        
        Partial (actual/constructive) eviction If T is prevented from possessing or using a portion of the leased premises
        
        Third parties: T must pay the reasonable rental value of the premises if partial eviction is by a 3P with superior claim to the property.
        
        T is not excused from paying rent if a 3P AP/trespasser partially evicts the T
        
        Landlord: T is completely excused from paying rent for the entire premises
      - Implied warranty of habitability (residential only) to make reasonably suitable for human dwelling (CL: N/A)
      - LL generally has no express duty to repair or maintain the premises.
        
        Latent defects: If LL leases knowing about defects not readily apparent, may be liable in tort to T or guests
        
        If LL assumes duty to perform minor repairs (e.g., keep wind- and water-tight) or repair damages caused by T, and is negligent, LL may be liable
    - - Assignment: T transfers entire remaining lease. T1 is in privity of estate with LL; covenants can be enforced against assignee (T1).
        
        T and LL remain in privity of K. LL can sue T or T1, e.g., for rent for period each owes
        
        i.e., T and T1 are jointly and severally liable for LL's entire harm arising from a breach of the lease (e.g., failure to pay rent)
        
        Damages can be reduced if LL is able to mitigate the harm
      - Sublease: T transfers part of remaining lease. T1 is not in privity of estate with LL; covenants not enforceable against sublessee.
        
        LL can sue only T, e.g., for rent (absent agreement). LL can evict T1
      - Restriction: Lease may prohibit assignment or sublease only if reasonable, but is narrowly construed against LL
        
        Rule in Dumpor’s Case: Once waived (e.g., consent, accepting rent), an anti-assignment covenant is unenforceable for the lease duration (implicit consent to future assignments by T) unless stated otherwise
  - - - If applied, the forum uses the (possibly foreign) jx’s whole law; the law ultimately used may be from anywhere
- - - - Components (2)
        
        The promissory note: borrower's promise to repay the loan/debt
        
        The mortgage: instrument that provides security for the note
      - Who's Who
        
        Mortgagor: person who grants the mortgage against her property (the borrower/debtor)
        
        Mortgagee: party to whom the mortgage is granted (the lender or bank)
      - Debt v. Security Interest
        
        Debt: borrower's personal financial obligation, as evidence by the note; can exist without the mortgage.
        
        Mortgage: is security for that debt; can't exist without the debt. Attaches to the property.
    - - Debtor will make a series of scheduled payments
        
        debtor pays until paid off
        
        Mortgage discharged
        
        debtor fails to make the required payments
        
        Debtor is in default
        
        Foreclosure: mortgagee may seize and sell the property to satisfy the debt
        
        Pre-Foreclosure Rights and Duties
        
        When can the Mortgagee/Lender Take Possession?
        
        3 more items...
        
        Waste
        
        1 more item...
        
        Ways to Avoid Foreclosure
        
        3 more items...
        
        Effects of Foreclosure
        
        Mortgagor
        
        2 more items...
        
        Purchaser
        
        2 more items...
        
        Senior Interests
        
        1 more item...
        
        Junior Interests
        
        1 more item...
        
        Priorities
        
        Analysis: classify the interest as senior or junior and then apply the rule to determine whether the interest survives foreclosure
        
        3 more items...
    - - Purchase-Money mortgages: a person takes out a loan for the purpose of purchasing a home
      - Future advance mortgages: a line of credit used for home; mortgagee distributes funds at intervals during the life of the mortgagee
    - - Majority ("lien states"): the mortgagor (borrower) is treated as the owner of the real property interest, and the mortgagee (lender) is treated as the holder of a lien on that interest.
        
        Treats a mortgage as a lien that does not sever a JT = the security interest has no effect on title or possession
        
        Mortgagee cannot take possession before foreclosure.
      - Minority ("title states"): Mortgage gives the mortgagee legal title to the property.
        
        A mortgage does sever a JT and converts it into a TIC.
        
        Mortgagor has the right to ownership once it satisfies the debt.
        
        The mortgagor retains both equitable title and the right of possession unless the mortgagor defaults.
      - Intermediate Theory (minority): Mortgagor retains legal title possession during the mortgage. Upon default, title and possession pass automatically to the mortgagee, without the need for foreclosure proceedings.
        
        Modern law often protects debtors by requiring some form of foreclosure procedures even under the intermediate theory
  - - - debtor executes a deed conveying the property to a 3P trustee
        
        Trustee holds the property in trust for the creditor
      - debtor usually keeps possession
        
        debtor defaults →
        
        Trustee is authorized to sell to satisfy the debt
    - - the buyer takes possession of the property while paying the purchase price in a series of installments over time
        
        states handle a buyer's failure to pay in one of three ways:
        
        Allow the seller to retain ownership of the property but require some form of restitution to the buyer
        
        Offer the buyer an equitable right of redemption—i.e., the buyer can keep the property by paying the full balance of the installment contract at any time prior to the foreclosure sale
        
        Treat the installment land contract as a mortgage, so the seller must foreclose to gain title to the property and the buyer has an equitable right of redemption and other protections
      - The seller retains title until the price is fully paid.
      - Many states extend foreclosure protections to installment buyer
    - - The debtor gives the creditor a deed conveying the property to the creditor in full. The creditor agrees either:
        
        not to record the deed
        
        to record the deed but to sell the property back to the debtor for a nominal amount when the debt is paid.
      - debtor defaults →
        
        the creditor either records the deed or simply keeps the property
      - Usually enforceable as an equitable mortgage unless competing equities (e.g., good-faith purchaser) take precedence.
    - - the owner sells the property, then immediately leases it back from the buyer
  - - - Mortgagor's Liability
        
        Mortgagor may transfer the property by deed (sale), by will, or by intestate succession
        
        Mortgagor remains personally liable after the transfer unless:
        
        Lender/mortgagee releases the mortgagor
        
        Lender modifies the transferee's (buyer/new owner) obligation
        
        Due-on-Sale Clause: make the entire debt due and payable upon the sale/transfer of the property
        
        Like an acceleration clause that allows the lender to speed up on the payment when the property is transferred
        
        Even without such a clause, it’s common for a seller to pay off the mortgage using the sale proceeds.
        
        Due-on-encumbrance clause: an acceleration clause when the mortgagor obtains a second mortgage or otherwise encumbers the property
      - Transferee's Liability (In either instance, the lender can foreclose on the mortgage if the debtor defaults on the loan)
        
        "Assumes" the Mortgage
        
        upon default, if the buyer/transferee assumes the mortgage, the transferee is personally liable for the mortgage
        
        Both the original mortgagor and the transferee are liable upon default
        
        Most jdxs, the assumption agreement doesn't not have to be in writing
        
        A buyer who assumed a mortgage as part of the purchase price may not raise defenses—e.g., duress, statute of limitations, lack of legal capacity—that the debtor could have raised to avoid the mortgage obligation.
        
        Takes "subject to" the mortgage (e.g., "The deed given by the officer acknowledged that the land was being transferred subject to the mortgage")
        
        Transferee is not personally liable upon default
        
        If the deed is silent or ambiguous as to liability, the transferee/buyer is considered to have taken title subject to the mortgage (don't automatically impose liability; have to opt in)
    - - The note and mortgage that serves as security for the note are typically transferred together
        
        Transfer of mortgage without note: many states treat the transfer of the mortgage alone as void while other states treat the note as having automatically been transferred along with the mortgage
        
        Transfer of note without mortgage: mortgage is treated as automatically transferred along with the note
- - - - Exclusive: physical presence on land not shared with the owner
        
        AP cannot share possession with the true owner.
        
        If two people possess the property together, they can both acquire title by AP = TIC
      - Continuous: presence is continuous and uninterrupted for statutory period
        
        Three Phases
        
        Entry Phase: when the AP enters the land; required to trigger the applicable SOL
        
        End Phase: when the SOL runs out of time; now the AP is the legal owner of the property by operation of law
        
        Middle Phase: When the AP makes use of the property, between the entry and end phase
        
        Tacking: if the AP cannot satisfy the continuity requirement on her own, she can tack on her predecessor's time on the property to satisfy the SOL
        
        The current AP must be in privity with the prior AP. Privity is an exchange of some sort between the AP ("selling" interest to a subsequent "buyer")
        
        Disabilities: SOL will not run against a true owner who has a disability at the time the AP begins (e.g., infancy, insanity, or imprisonment)
        
        Disability must exist when the trespasser enters the property
        
        Interruptions: A true owner can interrupt the AP period by ejecting the AP. This will stop the AP clock.
      - Hostile: possession is without owner's consent
        
        Majority rule: ignores the AP's state of mind
        
        Minority rule: inquires into the AP's state of mind (can satisfy both good and bad faith.
        
        Good Faith: the AP's claim is hostile if she thinks the land is unowned or that she is the rightful owner. AP based on a mistake
        
        Bad Faith: AP knows the land is not hers and she tries to acquire title to the property by AP. This is AP based on an aggressive trespass
      - Open, notorious, actual: possession is apparent or visible to a reasonable owner
  - - - Disfavored and only valid if reasonable
      - Forms of Restraint
        
        Disabling: total prohibition of transfer.
        
        always void
        
        Forfeiture: property is forfeited if interest owner attempts to transfer his interest.
        
        Can be valid on a future interest or LE.
        
        Promissory: promise by the property interest holder not to transfer; enforceable by injunction to prevent transfer or by suit seeking damages for violating promise.
        
        Can be valid on a LE.
      - Prohibited Restraints
        
        absolute restraint on FS
        
        discriminatory restraints (i.e., FHA prohibits housing discrimination)
        
        Exemptions
        
        Single-family housing that is sold or rented without a broker (by the owner)
        
        "Ms. Murphy's Boarding House:" owner-occupied buildings with 4 or fewer living units
        
        religious orgs and private clubs
      - Permissible Restraints
        
        partial restraint—one that is for a limited time and a reasonable purpose—is generally valid.
        
        Right of Refusal
        
        Example: This right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another.
        
        Restraints in commercial transactions, when the basis is found in the parties' contractual obligations
        
        Option Contracts
        
        Restrictions on the transfer of a lease
        
        Cf. restraints on the use of property (e.g. covenants) are generally permissible
    - - Valid (e.g., an equitable property interest, such as a spendthrift clause)
  - - - A deed does not have to be recorded to be valid; a deed is valid at delivery
      - Concerned with subsequent purchasers
        
        Unprotected: grantees who acquire the title by gift, intestacy, or devise
        
        Only a grantee who pays value for an interest in real property is entitled to protection under the recording statutes
        
        E.g., A gift to a charity would not be protected; however, if the charity had recorded first, then the subsequent purchaser could not have been a BFP, because she would’ve had constructive notice of the charity’s deed.
        
        Shelter Rule
        
        a person who receives a property interest from a BFP is entitled to the same protection under the recording act as the BFP.
        
        Estoppel by Deed: arises when the grantor conveys land the grantor does not own
        
        if a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance
        
        the focus is on the later buyer (the BFP). So the first person to buy is not seeking protection under the recording act.
        
        For the later buyer to cut off the interest of the first buyer, needs to (in a race-notice jdx) record first and take without notice.
      - Baseline for recording problems is CL rule: "first in time, first in right" principle
      - What types of interests:
        
        Deeds
        
        Mortgages
        
        Leases
        
        Options
        
        Judgments affecting title
        
        Other (e.g., easements or covenants)
      - Three Kinds of Notice:
        
        Actual
        
        Constructive (i.e., record notice)
        
        E.g., land records
        
        Inquiry
        
        "Dude on the land"
        
        Mentioned interest in the deed to some other transaction
      - Types of Statutes:
        
        Notice Statute
        
        A SP wins if she acquires without notice of a prior, unrecorded conveyance
        
        Race Statute
        
        First to record wins, even if the SP had notice of a prior, unrecorded conveyance
        
        Race-Notice Statute
        
        A SP wins if two requirements are met:
        
        Acquired without notice of prior unrecorded conveyance
        
        Records first
    - - General Warranty
        
        grantor warrants the title against all defects, even if the grantor did not cause the defects
        
        Six Implied Covenants
        
        Present Covenants (breach occurs at the time of conveyance)
        
        Covenant of Seisin
        
        warrants that the deed describes the land in question
        
        Covenant of the Right to Convey
        
        warrants that the grantor (i.e., the seller) has the right to convey the property
        
        Covenant Against Encumbrances
        
        warrants that there are no undisclosed encumbrances (e.g., mortgage, lease, easement, or covenant) on the property that could limit its value
        
        Future Covenants (occurs only upon interference with possession by a 3P)
        
        Covenant of Quiet Enjoyment
        
        grantor promises that the grantee's possession will not be disturbed by a third-party claim
        
        Coventant of Warranty
        
        grantor promises to defend against future claims of title by a third party
        
        Covenant of Further Assurance
        
        Grantor promises to fix future title problems
      - Special Warranty
        
        Warrants against defects only caused by the grantor
        
        Includes the 6 implied covenants as a general warranty deed, but they only apply to the acts (or omissions) of the grantor
      - Quitclaim
        
        Grantor makes no warranties as to the health of the title
    - - For a transfer by deed to be effective:
        
        the grantee must accept the transfer, which is presumed if the transfer is beneficial to the grantee.
        
        Without conditions to a 3P
        
        But if the third party's transfer to the grantee is conditioned on the grantor's death, then the grantor's delivery of the deed to the third party must evidence the intent to make a present gift to be effective.
        
        This typically occurs when the grantor relinquishes the right to take back the deed by placing it beyond the grantor's control.
        
        A grantor can deliver the deed to the grantee through an independent third party.
        
        Physical transfer to grantee
        
        Recording in land records
        
        recording creates a rebuttable presumption that grantor intends the deed to be presently operative
        
        Grantee obtains possession
        
        the grantor must have the present intent to convey ownership of the property interest to the grantee and
  - - - Causes devise to fail if beneficiary predeceases testator
    - - satisfaction–beneficiary received devised property (or other asset intended to satisfy devise) during testator's life
      - extinction–specifically devised property not owned by testator (or destroyed or fundamentally changed) at death
    - - Allows beneficiary of specifically devised real property to use estate's remaining assets to pay off any encumbrances on that property
        
        Including a purchase-money mortgage
        
        Most states have abolished this doctrine, and payment of an encumbrance on devised real property is required only if the will so specifies.
    - - Reduces devises that cannot be satisfied by assets remaining after testator's debts are paid
      - Residuary devises abated first, followed by general & then specific devises
- - - - Would a purchaser or mortgagee (who has priority) expect the fixture to be part of the property?
    - - attached to real property in such a manner that it is treated as part of the realty and
      - used for some larger component or function of the land (e.g., to separate adjoining properties).
  - - - A valid ordinance may be challenged by...
        
        Variance: Gov’t permission to depart (or vary) from the literal restrictions of a zoning ordinance as an exception to the ordinance, sought as a permit based on one of two bases, an area variance or a use variance
        
        Use variance: A permit that allows operation of a structure for a purpose not permitted by the ordinance.
        
        Applicant must show:
        
        undue hardship but for the variance
        
        that the variance would not harm the community
        
        there is no fault in seeking the request (not a bad actor)
        
        Area variance: An exception that allows a building to exist in dimensions that slightly violate zoning ordinance
        
        Nonconforming use: A preexisting use of the land that now does not conform to ordinance at time of enacting.
        
        Amortization (payments over time) may be provided to landowner to gradually eliminate nonconforming use
        
        Such a use already in effect cannot be eliminated, unless it causes harm to the community, or just compensation is paid
        
        Special use permit: A permit required even if the zoning is proper for the intended use, e.g., hospitals, funeral [homes]
        
        Exaction: Gov’t may seek payment for permission to build (e.g., seek exaction payment from developer if gov’t has to install new traffic lights around new housing development)
        
        only if exaction is reasonably related to impact of dev
        
        Takings clause: If zoning reduces property value, gov’t must pay damages to owner.
      - Specifically, zoning ordinances are generally valid as long as reasonably related to public welfare, not too restrictive, and not discriminatory as to race or a particular parcel.
  - - - Subservient Estate: land burdened by the easement
      - Dominant Estate: land dominant by the easement
    - - Easements appurtenant
        
        the easement is tied to the use of the land
      - Easements in gross
        
        the easement benefits the holder personally
      - Affirmative easements
        
        the holder has the right to do something on someone else's property
      - Negative easements (or restrictive covenant)
        
        the holder has the right to prevent someone from doing something on her land
    - - Express Easement
        
        Is an interest in the land so it is subject to the SOF. Thus, it must be in writing.
        
        By grant
        
        By reservation: when a grantor conveys land but reserves an easement right in the land for the grantor's use and benefit.
        
        Subject to recording statutes
        
        No recording + no notice = BFP takes property free of easement
        
        Any notice (actual/inquiry/constructive) = Easement is enforceable**, even if unrecorded
        
        Negative easements must be express
      - Implied Easement
        
        informal; arise out of factual circumstances
        
        transferable
        
        not subject to SOF
        
        not subject to recording statutes, unless subsequent purchaser had notice of the easement
        
        once an easement is created and a court recognizes it, it could be subject to the recording act
        
        Four Kinds
        
        Easement by necessity
        
        created only when property is virtually useless (e.g., when the property is landlocked; there is no road or access without crossing another's land)
        
        Conditions that must be met:
        
        Common Ownership: a large estate owned by one owner
        
        Necessity at Severance: when the estates were severed into two separate estates (severance), one of the properties became virtually useless (landlocked) without an easement
        
        Necessity in a strict sense
        
        Ends when it is no longer necessary
        
        Failure to record and notice of prior easement have no bearing on the existence of the buyer's necessity
        
        Easement by implication (easement by prior use)
        
        Conditions that must be met:
        
        After severance: use must be continuous (consistent) and apparent at the time of severance
        
        Before severance: the owner of the large tract uses the land as if there's an easement over her land
        
        Common Ownership: a large estate owned by one owner
        
        Necessity: Use must be reasonable
        
        Easement by prescription (aka AP)
        
        AP is about possession, whereas easement by prescription concerns use
        
        Same elements as AP, except for exclusivity
        
        Easement by estoppel (license)
        
        Permission: starts with permissive use
        
        Reliance: Continues when the second neighbor relies on the first neighbor's promise
        
        must be reasonable and in good faith
        
        Permission Withdrawn: the first neighbor withdraws permission
        
        if reliance was detrimental to the second neighbor, the first neighbor is estopped from withdrawing permission, in effect creating an easement
        
        easement is not revocable
    - - Release
        
        the holder of the easement expressly releases it
        
        the release must be in writing (because it's an interest in land subject to SOF)
      - Merger
        
        An easement is terminated if the owner of the easement acquires fee title to the underlying estate
        
        The easement merges into the title
      - Abandonment
        
        The owner acts in affirmative way that shows a clear intent to relinquish the right
        
        Requires more than non-use or statements → usually need non-use plus an act demonstrating an intent to abandon
      - Prescription
        
        the holder fails to protect against the servient estate owner's interference for the statutory period
      - Sale to a BFP
      - Estoppel
        
        Servient owner changes position to his detriment in reliance on statements or conduct of the easement holder that the easement is abandoned
      - End of Necessity
        
        An easement by necessity lasts as long as the easement is needed.
  - - - Real Covenant (money damages)
        
        Promising Party
        
        Bound by contract
        
        Successor in interest (writing, intent to run, touch & concern, privity, notice)
        
        Bound by covenant
        
        Definition: A promise concerning the use of the land that runs to the successors to the promise ("runs with the land")
        
        the benefit of the covenant is the ability to enforce the covenant
        
        The burden of the covenant is being subject to it (i.e., bound by it)
        
        Requirements to Run
        
        Writing – covenant is in a writing that satisfies the statute of frauds
        
        Intent to run – promising parties intended for the covenant to run with the land
        
        Touch and concern – the benefit or burden of the covenant must affect both parties as owners of the land
        
        Negative covenant: a restriction on use will usually touch and concern because they restrict what you can do with your land.
        
        Discriminatory covenants do not touch and concern
        
        Affirmative covenant: a covenant to pay money (e.g., HOA fees)
        
        Notice – person to be bound had actual, constructive (i.e., record) notice
        
        Privity
        
        Horizontal Privity (speaks to the original parties)
        
        the original parties to the promise must have been in horizontal privity
        
        refers to the privity of estate, where the estate and covenant contained in the same instrument (e.g., the deed)
        
        Do not need horizontal privity to run a benefit
        
        Vertical Privity (refers to the relationship between original party and his/her successor to the property)
        
        to run the burden, the successor must take the original party's entire interest = strict vertical privity
        
        To run the benefit, the successor need only take an interest that is carved out of the original party's estate = relaxed vertical privity
        
        Termination
        
        Release
        
        Merger
        
        Severance
        
        Abandonment
        
        when an affirmative act—something more than neglect or nonuse—shows a clear intent to relinquish the covenant.
        
        End of necessity, destruction of related structure, and condemnation
        
        Prescription
        
        Estoppel
        
        Sale of Servient Estate
        
        Foreclosure of lien on servient estate
      - Equitable Servitude (injunction)
        
        Express (writing, intent to run, touch & concern, notice)
        
        Bound by servitude
        
        Implied by common scheme (intent to create, restrictive covenant, notice)
        
        Bound by common scheme
        
        Requirements
        
        Writing – servitude is in a writing that satisfies the statute of frauds (e.g., the deed)
        
        Intent to run – promising parties intended for the servitude to bind their successors in interest (e.g., the deed says "heirs and assigns")
        
        Touch and concern – servitude relates to the use, enjoyment, or occupation of the dominant and servient estates (e.g., the servitude restricts land use to single-family residences)
        
        Does NOT touch and concern the land: an economic benefit
        
        Notice – person to be bound had actual, record, or inquiry notice of the servitude (e.g., notice from the developer's properly-recorded deed).
        
        Implied Reciprocal Servitude: implied and need NOT be in writing
        
        Creation
        
        Developer must intend to create a covenant on all plots in the subdivision
        
        Promises must be reciprocal (i.e., burdens and benefits each and every parcel equally)
        
        Must be negative rather than positive (i.e., must be a restriction on the owner's use)
        
        A successor must be on notice of the restriction (at least inquiry notice)
        
        Must be a common plan or scheme
        
        To prove, look for:
        
        a (recorded) map of the community showing the common scheme
        
        marketing or advertisements of the community
        
        oral or written mention that the lots are burdened by common restriction
        
        Changed Circumstances Doctrine
        
        Look for situations where the restriction no longer makes sense due to drastic changes in the surrounding area since the restriction was put in place
        
        Critical Question: Does the property subject to the restriction still retain some benefit from the restriction?
        
        there has to be a massive change
        
        Common Interest Communities
        
        Real estate development in which individual units/lots are burdened by a covenant to pay dues to an association
        
        The association:
        
        Services: maintains grounds, provides facilities, etc.
        
        Enforces the covenants: the association has standing
        
        Three Types
        
        Owner's Association: where property owners belong and pay dues to an association or board
        
        Condominiums: where individual units are owned outright, but common areas are owned collectively as TIC
        
        Cooperatives: property is owned by a corporation (made up of residents/shareholders) that leases individual units to shareholders (residents)
  - - - Unlike an easement, license is freely revocable, unless
        
        The license was coupled with an interest in the property (e.g., a remainderman's license to enter and inspect property)
        
        the licensee detrimentally relied on the license (e.g., paid money to use or maintain the license)
      - License cannot be transferred
      - License automatically terminates when the licensee dies or the conveyance of the licensed property.
      - Mere notice of the license does not prevent it from terminating
    - - can be created without consideration or a writing
  - - - Interference: Use & enjoyment of property
      - Unreasonable: Severity of harm outweighs utility of interference
      - Substantial interference—offensive, annoying, or intolerable to normal person
        
        Proof of harm not required when plaintiff is public entity or government actor.
    - - Public right—eg, health, safety, peace, property
      - Unreasonable: Interference is significant or violated law
      - Special harm—harm different from that of public at large
  - - - Lateral Support: absolute right to support from side of land
        
        If land in natural state: adjacent landowner D is strictly liable for damage if excavation causes land to subside
        
        if D improved land (e.g., building): Adjacent D is strictly liable for excavation if land would have collapsed in natural state
        
        Otherwise, liable for damage if D's excavation was negligent
      - Subjacent Support: absolute right to underground support of natural land and structures pre-existing when subjacent estate was created.
        
        Arises when the landowner conveys to a 3P the right to access and remove oil, gas, or minerals from beneath the land
        
        Owner of the rights is strictly liable for any failure to support the land and buildings that existed on the land when the mining rights were conveyed
        
        Owner is liable only for negligence for damage to any improvements built after the rights were conveyed
  - - - Personal Property
        
        Pass automatically with land except when:
        
        harvested – severed from land
        
        ripe – mature (some courts)
        
        planted by tenant with indefinite leasehold
        
        planted by adverse possessor under claim of right
    - - Part of Real Property
        
        Pass automatically with land
- - - - All LSK's include an implied covenant of marketability, to convey marketable title that is reasonably free from doubt and defects (such that a reasonable person would accept and pay for it)
        
        Defects (buyer may waive the above defects in the K of sale:
        
        Title acquired by AP that has not yet been quieted
        
        Future Interests wherein the holders of such interests have not agreed to the transfer
        
        Private encumbrance (e.g., mortgage, covenant, option, or easement)
        
        Easement that is beneficial, visible, or known to buyer does not impair marketability
        
        Violating of a zoning ordinance
        
        Significant physical defect (e.g., an encroachment that is incurable)
        
        Failure to produce marketable title is a waivable buyer's defense against LSK enforcement
        
        Buyer must notify seller and give reasonable time to cure defects.
        
        Seller's liability on implied covenant ends if buyer fails to notify and closing occurs
        
        If unmarketable at time of closing, seller is in breach
        
        Remedies
        
        Rescission
        
        Damages
        
        Specific Performance with abatement (reduced purchase price)
        
        Quiet title suit
  - - - Thus, an obligation contained in the LSK, such as the seller's duty to deliver marketable title, is merged into the deed and cannot thereafter be enforced unless the deed contained that obligation
      - IF a buyer wants to enforce an obligation in the K, the buyer must do so at or before closing
      - Types of Deeds
        
        General Warranty
        
        grantor warrants the title against all defects, even if the grantor did not cause the defects
        
        Six Implied Covenants
        
        Present Covenants (breach occurs at the time of conveyance)
        
        Covenant of Seisin
        
        1 more item...
        
        Covenant of the Right to Convey
        
        1 more item...
        
        Covenant Against Encumbrances
        
        1 more item...
        
        Future Covenants (occurs only upon interference with possession by a 3P)
        
        Covenant of Quiet Enjoyment
        
        1 more item...
        
        Coventant of Warranty
        
        1 more item...
        
        Covenant of Further Assurance
        
        1 more item...
        
        Special Warranty
        
        Warrants against defects only caused by the grantor
        
        Includes the 6 implied covenants as a general warranty deed, but they only apply to the acts (or omissions) of the grantor
        
        Quitclaim
        
        Grantor makes no warranties as to the health of the title
  - - - Follows equitable title: if property destroyed before closing without fault of parties, buyer bears risk.
        
        Relation back: buyer's title relates back to time of deposit in escrow if justice requires (e.g., incompetent seller)
        
        Uniform Vendor and Purchaser Risk Act (UVPRA, minority view): seller retains risk of loss until transfer of legal title or buyer takes possession
        
        Casualty Insurance: When the ROL is on the buyer and the seller has casualty insurance, the seller is generally required to give the buyer credit against the purchase price in the amount of the insurance proceeds when a casualty occurs
        
        This does not mean the ROL shifts to the seller who has casualty insurance
      - Specific performance may be denied to prevent seller enrichment