Property Law Notes

Property law is a series of rules defining a person’s relationship to a thing

that others must respect.

Property Terms
Real property, real estate, realty- refers to land and improvements to
attached to the land. E.g., buildings, fences, dams.
Personal Property- all property other than real property e.g. books,
automobiles, stocks
Fixture- personal property permanently attached to real estate, but that can
be moved.
Intangible personal assets- can’t touch or be seen but has value nonetheless
e.g., stocks, bonds, goodwill.

Possession
The controlling and holding of personal property w/o a claim of ownership.
 2 Elements of possession:
o An intent to possess.
o Actual controlling or holding of property.
 Rules of Capture (Pierson rule)- Pursuit alone is insufficient to acquire
ownership in a wild animal; need physical possession.
o Exception: when one has mortally wounded the animal and has not
given up pursuit.
o An escaped wild animal belongs to no one unless it is not native to
the area such that a reasonable person would deem it belonged to
someone.
o A person does not lose possession of an animal that has a habit of
returning to its owner’s property. E.g., domesticated animals.
 A possessor has rights superior to all others in the world except the true
owner.

Question: Suppose Pierson saw Post closing in on the animal and said, “That
no-good Post can’t have that fox!” Then he shot the fox and carried it off
under Post’s nose.
Answer: The court may conclude Pierson did not have the intent to possess
the animal but to deprive Post of it. Control is not enough. Also, a court may
consider that Pierson acted in bad faith and should not be rewarded.

Basis Of Possession
1. Rule of first-in-time, first-in-right (first possession)- priority of
rights based on the time of acquiring the right in question. Under the rule,
the chronological possessor has a better title.

2. Constructive Possession- legally deemed to be in actual possession,

although they are not.
 A mortal wounding can be a constructive possession. (Pierson- fox)
 Land owners are said to be in constructive possession of the minerals
beneath the surface- i.e.. Whoever owns the surface also owns the
depths of the earth.

3. Custom- A practice or way of doing things that has been accepted for a
long time and is treated as if it were law. (Ghen- whale)
a. The judge in Ghen said custom should be recognized only when:
i. Its application is ltd. to the industry and those working in it.
ii. The whole industry recognizes the custom.
iii. The custom requires the first taker the only act of
appropriation that is possible.
iv. The custom is necessary for the survival of the industry.
v. The custom works well in practice.
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 Why is the court in Ghen requiring so many tests (i.e., so suspicious of
customs)?
 A custom of an industry is formulated for the benefit of the industry,
not society.
 Although a custom may benefit an industry, it might be dangerous to
those employed in that industry.
 The custom may be wasteful of the resource. E.g., in Ghen, not all the
dead whales were recovered.
 A custom may lead to overinvestment in technology e.g., a big bomb-
lance attached to a big ship may capture more whales but at what
cost?

Custom and Public Access

A custom giving rise to access must be long-continued, uninterrupted, and
reasonably asserted as a right.

Natural Resources and Water Law

 First possession and rules of capture apply.
 The first driller to tap and produce oil and natural resources underlying
the lands of several owners has acquired possession of the resource
brought to the surface, even though it may drain the pool under the
neighboring lands.
 It is a trespass to drill laterally, but it leads to inefficient overproduction if
each neighbor has an oil well on its property.

Actionable Interference (Keeble- ducks)

A property owner has a right to make lawful use of his property for profit
without malicious interference from others. Although the Plaintiff never had
actual physical possession of the ducks, the Plaintiff still had property rights
in the ducks because they were on his property.
Also, it would be bad public policy to encourage people to use weapons to
hurt their competitors.

Misappropriation
An action that protects P when P has, by substantial investment, created an
intangible thing of value not protected by patent, copyright, or other
intellectual property law, and the D appropriates the intangible at little cost
so that the P is injured and P’s continued use is jeopardized.

Even though the ordinary rules are present for a legal gift—offer, acceptance,
and delivery—the gift of an engagement ring is conditioned on a later event
(i.e., the parties' marriage). It is a conditional gift. The courts are divided
regarding whether the condition is satisfied if one of the parties breaks off
the engagement before the marriage occurs. All courts agree that the gift is
finalized once the marriage begins.

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FINDERS AND PRIOR POSSESSORS
A finder of lost property is a person who:
1. Takes control of the lost property, and
2. Has the intent to maintain possession of the property.
A finder has greater rights than anyone in the entire world except the true
owner.

Conversion- when a person wrongfully exerts control over property

inconsistent with the true owner’s rights. This can be remedied by:
 Replevin- action to recover the asset itself (plus money damages for
injury to the asset)
 Trover (forced sale)- action for monetary compensation for
conversion of personal property. Lose all rights to have the asset
returned.
o By paying the judgment, the losing party acquires the true
owner’s rights to sue (subrogation)
Mere possession alone can sustain a trespasser’s cause of action for
conversion against all but the true owner even though a thief has void title.

Types of Found Property

General rule #1- The finder keeps lost property and has rights
greater than anyone else except the true owner.
1) Lost property- Property the true owner unintentionally and
unknowingly dropped or lost.
2) Abandoned property- property the true owner intentionally and
voluntarily relinquished, with the intent no longer to own the object
and w/o transferring his rights to another person.
Has two elements:
 An act of abandonment
 An intent to abandon (must be proved, not presumed!)
Exception:
3) Mislaid property- property the true owner intentionally placed in a
given location then left, or intentionally left intending to return for it
later.
 Belongs to the owner of the locus in quo (the premises owner or
lessee) because he is in better position to give to true owner if they
returned looking for the item.

Other Exceptions:
 Finder on premises for limited purpose loses out to the landowner.
 All things found by EEs are found property to the landowner.
o Some courts make exceptions if item found in a public area,
e.g., a lobby.
 Items in a residence belong to the owner/ renter, assuming the
owner or renter lives there.

General rule #2: things embedded in the earth or attached to the

real estate go to the landowner.
Exception:
4) Treasure trove- valuables such as gold, silver, or diamonds hidden in
the ground or some other private place/ structure; the treasure is
sufficiently ancient to indicate the owner was probably dead or
incapable of identification. Belongs to the finder.
a. Favors the finder, even if the person is on the property for a
particular purpose, such as constructing improvements, and
even if the finder is a trespasser (if the trespass is minimal).

Policy argument for letting an employee keep the property- it rewards

honesty and encourages people to publicize their finds.

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Question: Opal owned a racehorse. Abel acquires title to it but realizing it
was fraudulent, transferred it to his creditor Ben. Ben thinking the title was
legal sold it to Cory. Under Cory’s training, the horse wins several races. Opal
sees one race and recognizes her horse. What advice would you give her?
Answer:

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GIFTS
A voluntary, irrevocable transfer of property from one person to another
without consideration. (If there was consideration, the law of gifts does not
apply)

Types of gifts:
A. Inter vivos Gifts- gifts between living persons. (Completely irrevocable).
 It has 3 elements:
i. Donative intent- donor’s intent to transfer ownership/ title to the
donee (transferring possession is insufficient)
o Donee bears burden of proof to show that donor had donative
intent.
o The evidentiary standard is high (clear and convincing).
o It must be unconditional to be valid. Cannot be subject to a
condition precedent (an act/ event that must occur or not occur
before the gift becomes effective.)
o A promise to give a gift in the future is a contract, not a gift, and
it will be unenforceable without consideration.
o To be valid, a gift must take effect presently at the time of the
delivery.
o An oral condition on a gift is invalid on the acceptance of the gift.
ii. Delivery of the object to the donee- an act that demonstrates an
intent to transfer the property.
o Physical delivery- once delivered, ownership shifts and lack of
consideration is not an issue. Other delivery methods usually
occur when the object is too large or heavy.
o Symbolic delivery- thing delivered stands in place of the
object, e.g. picture of the item, one of items delivered w/ written
description of other items, deed of sale or deed of gift.
o Constructive delivery- property not transferred BUT
something that gives access and control is e.g. keys to safe
or car.

iii. Donee’s acceptance of object- w/o evidence to show rejection,

there is no rejection.
It is also possible for a donor to give a gift to a donee through a third
person. The third person is acting as the agent of one of the parties.
The timing of the gift’s completion will depend on who the third person
works for. If the third person is an agent of the donor, the gift does not
take place until the agent “actually delivers” the property to the
donee. However, if the agent represents the donee, the gift is effective
as soon as the donor gives the property to the agent.

B. Gift Causa Mortis (“because of death”)- a gift that is made in

contemplation of impending death. The intent that possession takes effect
immediately, but ownership becomes absolute upon the donor’s death.
 Revocable/ conditional- the donee must give it back if the donor does
not die; the donee dies first, or the donor takes back the gift before
death.
 It also requires donative intent, delivery, and acceptance, but it must
be completed before the donor dies.
 The donor does not actually have to be dying. It is sufficient that the
donor makes the gift because he or she knows that he or she is about
to enter a situation in which there is a strong chance of death.
Note: transfer of property by will after death is not a gift; it is a devise
or bequest.

C. Conditional Gifts- transfers rights only when certain stated conditions

are met. A gift may be subject to a condition precedent or a condition
subsequent. e.g., “This car is yours when you graduate.” Marriage and
engagement gifts are generally conditional gifts. Most States allow
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 recovery of an engagement gift only if the person seeking to recover the
gift did not unreasonably terminate the engagement.

D. Anatomical Gifts- gifts of organs or body parts. The Uniform Anatomical

Gift Act allows anatomical gifts to be made by persons 18 or older or
certain members of a decedent’s family.

Uncashed check
A donor can stop payment on a check at any time before it is cashed. If a
donor dies before a check is cashed, his death revokes the bank's authority
to cash it, so the gift is incomplete because a donor retained the power to
revoke the gift. Delivery of a check is an incomplete assignment of funds on
account (Woo v Smart).

Questions:
1. The uncle wants to give his nephew a birthday gift of $10,000,
but he doesn't have enough money in his bank account right now.
So, he gives his nephew a check on July 1 but postdates the check
to September 1. He intends to deposit the necessary funds into
the account during this time. Is this a valid inter-vivos gift?
Even though a gift must be given presently and cannot take effect in the
future, in this case, the gift is being made and completed on July 1. The fact
that Nephew can't get his money until September 1 merely means that the
gift is of a future interest. However, the gift has been made and is
irrevocable as of July 1.

2. The uncle wants to give the nephew a birthday gift of $10,000,

but he's unsure. So, he hands Nephew a $10,000 on July 1 that is
dated September 1. Uncle says, "If you behave between now and
September 1, you can take the money. But I reserve the right to
stop payment on the check if you're not a good boy between now
and September 1. Is this a valid inter-vivos gift?
No, because the gift will not take effect until September, so the delivery
in July doesn't count. A valid inter-vivos gift must be of a present,
unconditional interest. In this case, the gift is revocable and conditional.
Therefore, it is not a valid inter-vivos gift.

Gift of a remainder (Gruen v. Gruen)

The father gave his son a gift of remainder interest (title) in chattel with
no right of possession until death.
 There was a present transfer of some interest, and the gift is
effective immediately.
 Once the gift is made, it is irrevocable, and the donor is limited to
the rights of a life tenant, not an owner.
 With the gift of a remainder, the title vests immediately in the
donee, and any possession is postponed until the donor’s death.

In a will, neither possession nor title vests immediately.

Engagement rings
 Modern view: The gift is conditioned on the parties actually
getting married, and subsequent ownership is not based on which
party was at fault for not getting married.
 Old view: If the donor was at fault, he may not recover the ring.

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TRESPASS- THE RIGHT TO EXCLUDE
Wrongs in which D breaches the boundary of or touches P’s real or personal
property or otherwise physically interferes with P’s right to exclude others
from occupying or using that property
Occurs when D:
1) causes or is a substantial factor in causing
2) a physical invasion of P’s land
3) The interest protected is the right of “exclusive possession of land and its
physical condition.”
a. Physical invasion- Traditional approach- Any tangible “thing” that
enters the land (e.g. liquid, visible solids, people)
b. Martin v Reynolds Metals Co. expands the definition of tangible.
Whether you can see it or not is not important. Introduces a more
scientific approach. Courts may require proof of actual harm or
substantial harm to land; otherwise, they can only ask for nominal
monetary damages.
4) with specific or general intent
a. does not require intent. D need not have intended to trespass but
only to have intended to be present on or interfere with the
possession of property that turns out to be owned by P

Damages for trespass

Nominal damages- just suing to make a statement/ enforce your rights.
Usually, when there is no actual damage.

Defenses:
1) Mistake defense DOES NOT apply in trespass.
2) Necessity- D has acted reasonably in damaging or destroying P’s
property, but P did not create the risk of harm.
a. Public necessity- risk to a large number of ppl that can be
reduced or eliminated by destroying/ damaging property, e.g., P’s
house torn down to stop the spread of a fire to the remainder of the
town. P cannot stop him from using the property. The owner is not
getting repaid because the house would have been damaged
anyway by fire, so P has not lost anything.
b. Private necessity- risk to one party or his property ONLY, and this
party can reduce or eliminate that risk by damaging or destroying
P’s property. The privilege of necessity is qualified or conditional, so
D is liable to P for damages. Privilege is conditioned on D later
compensating P for using his property.

Common Law’s strict Rule (Newsom)- as long as you do an act that causes
entry it does not matter whether your entry was intentional, accidental, or
negligent.

Role of punitive damages in enforcing right to exclude (Jacque v.

Steenberg Homes)
It is against public policy to only charge intentional trespassers a nominal fee
for damages because it does not deter behavior. When owners do not believe
the law will protect their rights to exclusive ownership, they resort to self-
help remedies.

Scope of invitations (Sammons)

 A property does not lose its private characted because the public is
generally invited to use it for a designated purpose.
 When a licensor revokes a license for someone on his land, he must
allow him a reasonable opportunity to remove himself and his
effects. This includes bringing assistance, such as a tow truck, that is
reasonably necessary for the removal of personal property on the
possessor’s land.

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8
ADVERSE POSSESSION & SOL
A means of acquiring possession of property by openly occupying it for a
period of time.

Possession of the property of another that is:

(a) exclusive
(b) open and notorious,
(c) continuous and
(d) Under a claim of right, the possessor can acquire title to the property if
the true owner does not move to evict the possessor before the SOL expires.

Statute of limitation- A law that sets a time limit for filing a cause of action.

Four required elements for an adverse possession to be effective:

1. The possessor entered the property and had exclusive possession.
a. The “exclusive” possession element means that the adverse possessor
must possess the property to the exclusion of the rightful owner.
 If the general public is using the land along with the adverse
possessor, the possession is not adverse because the adverse
possessor is taking no steps to exclude others. However, this
inference is weakened if the public usage is occasional or incidental.
b. An adverse possession need not necessarily be effective on an entire
property. A person can successfully adversely possess a portion of the
property as long as the possessor excludes the actual owner from that
portion.
2. The possession must be “open and notorious.”
 done so that the owner would notice the possession if he or she
bothered to look.
 If the adverse possession is on property that would not generally be
inspected by the true owner or whose occupation would not be obvious
to the true owner, then the adverse possession is ineffective.
3. The possession must be adverse to the rightful owner and under a claim
of right;
 possess the property without the owner’s consent and
 with the intent of remaining on the property permanently
 The possession need not have malicious intent or even the intent to
deprive the owner of property for an adverse possession to be valid. In
some jurisdictions, however, if a person occupies property in good faith
and under the mistaken belief that he or she already owns the
property, that does not constitute adverse possession.
4. The possession must be “continuous” for the statutory period.
 The possessor occupies the land to the degree and with the amount of
usage as the average owner would.
 The degree of possession considered continuous and uninterrupted will
vary depending on what the property is typically used for. If the
property is used as a permanent residence, then the adverse
possessor would have to live in the house as the average person would
live in a permanent residence. If the house is a vacation house, then its
occasional use at sporadic times during the year for the statutory
period could be sufficient.
 If the adverse possessor intentionally abandons the property for any
period of time without the intent to return, the continuity of adverse
possession is lost, and the adverse possession time period clock will re-
start from the beginning if he or she comes back and takes possession
of the land again.

Tacking
Combining a period of possession by an adverse possessor with the
possession of a previous adverse possessor can cause the total period of
possession to exceed the statutory period of limitations.

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Adverse possessors can “tack” their periods of possession onto one
another’s possession if, and only if, the transfer from the first possessor to
the second possessor was made voluntarily (i.e., there was privity) (British
needs no privity).
e.g. Adverse possessors were tenants in common.
Ouster- A on the property, and B ousts A. There is no tacking.

SOL tolling & disabilities

SOL is tolled until the disability is cured or the person dies because of the
disabled owner’s diminished ability to monitor his property, check for
possible trespasses, and bring a lawsuit in time.
Get longer of the basic SOL and the cure +disability SOL.
 No tacking of disabilities allowed- the disability must exist when the
adverse possession began.
o Example. A is underaged in 2010 when B enters her property.
She becomes 18 at 2015 then joins the military for 4 years. The
SOL stops tolling in 2015 when she becomes an adult because
you cannot tack on when she joins the military.

Successive Landowners
Once an adverse possession begins to run against a landowner, it continues
to run against other subsequent landowners as well.

Adverse possessor suing adverse possessor.

If another ousts one adverse possessor, he can sue to exercise his right to
superior possession, assuming he did not abandon the property. The doctrine
of relativity of title applies (first in time).

Adverse possession of personal property (O’Keeffe v. Snyder (107-118)

 It is hard to satisfy the element of “open and notorious possession” of
personal property.
 Discovery rule: If owner is taking reasonable steps to find the property
the SOL will toll until they find out who has the item such as reporting
items missing.
o When owner knows or should know the identity of the possessor,
the SOL begins.
o Another approach is to put duty on the good faith purchaser to
investigate the artwork's ownership history.

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PROPERTY CONTRACTS
Land Sale Contract Requirements
The real estate contract is an executory period since title is not transferred
immediately because the buyer and seller must do certain things before
closing such as inspections, title search and securing financing.

A valid contract for the sale of land must satisfy the statute of frauds- i.e., it
must be in writing and signed by the party to be charged, AND contain all of
the essential terms (i.e., parties, property description, terms of price and
payment) EXCEPT when there is:
1. Partial performance by either the seller or buyer showing that a land
sale contract existed, such as Possession by the purchaser, Payment of
all or part of the purchase price, AND/OR Improvements to the land
made by the purchaser.
2. Promissory estoppel- detrimental reliance.

Merger of the Land Sale Contract and Deed

Traditional approach- sales contract provision not enforceable after
closing. Buyer’s rights limited to warranties or covenants in the deed or other
docs transferring title.
1. Contract Stage (Executory period). Prior to closing (i.e., the date that
the ownership of the property is transferred to the buyer), any liability
must be based on a provision in the land sale contract.
2. Deed Stage. After closing (i.e., the date that the ownership of the
property is transferred to the buyer), any liability must be based on a
deed warranty.

Modern approach- even after closing, if the provision does not pertain to
the title or is not normally in a deed, the court will enforce it.

Marketable Title
Title that is free from an unreasonable risk of litigation. All land sale
contracts require the seller to deliver marketable title to the buyer at closing.
Defects in title that render title unmarketable include:
 The seller does not own the estate he or she purports to be selling OR
 The seller’s title is subject to an unapparent encumbrance.
o E.g., mortgages, easements (that are not clearly visible upon
reasonable inspection of the land), covenants, leases, liens,
encroachments, options, and violations of zoning
ordinances. (Lohmeyer)
If the buyer learns of title defects before closing, the buyer must notify the
seller and allow a reasonable opportunity for the seller to cure the
defects. If the seller fails to deliver the required title at closing:
1. The buyer is excused from performing the contract AND
2. The seller is liable for breach of contract (e.g., the buyer may seek
monetary damages, specific performance, etc.).

Time is not of the essence but can pull you out of a deal if it is not ready
for closing.

Duty to Disclose Defects

Material defects are defects that substantially impact the value of the
property, the desirability of the property, OR the health and safety of its
occupants. Most jurisdictions impose a duty on the seller to disclose latent
material defects to the buyer. Caveat emptor is being eroded.
 General disclaimers (e.g., “as is”) do NOT satisfy the seller’s duty to
disclose.
 When the seller breaches this duty, the buyer can rescind the contract
or sue for damages after closing.
 Brokers can be liable for innocent or negligent misrepresentation,
which is why they have promoted seller disclosure laws to protect
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 themselves. (This policy is fair because the seller is in the best position
to know what is wrong with the property.)
 Malfeasance (intentional wrong); nonfeaseance= omission.

The Implied Warranty of Fitness (Quality/ Habitability) or Suitability

in New Construction
Applies to defects in new construction.
 It protects against latent defects (i.e., defects that are not discoverable
from a reasonable inspection) and warrants that the new construction
is safe and fit for human habitation.
 In most jurisdictions, both the initial purchaser and subsequent
purchaser may recover damages. In other jurisdictions, only the initial
purchaser can enforce this warranty.
 Not implied where the seller is not a “merchant of housing,” i.e., a
builder or commercial vendor.

Equitable Conversion and Risk of Loss

In most jurisdictions, the purchaser holds equitable title during the period
between the execution of the contract and the closing and delivery of the
deed. The purchaser is responsible for any damages to the property,
although the seller, as holder of legal title, has the right to possess the
property.
Some jurisdictions place the risk of loss on the seller until closing when a title
is conveyed.

Modern approach: risk of loss during the executory period lies with the party
in possession.

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MORTGAGES AND FORECLOSURE
Mortgagor= borrower
Mortgagee= lender

A mortgage is a security device used to secure repayment of a debt. It

comprises of:
 The Note- the borrower’s promise to repay the debt or loan.
 The Mortgage- the device that provides security to the note by allowing
the lender to force a foreclosure sale to recover the outstanding debt if
the borrower defaults on the loan.

Priority of recordings
The first-in-time rule says that the first recorded lien has priority over any later
liens.

Deed of Trust (aka security deed)

When a buyer executes a deed conveying the property to a third-party trustee
as collateral for the debt rather than to the bank itself. If the buyer defaults on
the debt to the bank, the trustee is authorized to sell the property to satisfy the
debt. If the buyer satisfies the debt, then the deed of trust is returned to the
buyer.

An acceleration clause provides that if a mortgagor defaults, the mortgagee

may elect to declare the entire outstanding balance of the mortgage
immediately due and payable.

Foreclosure Sale
 Equity of redemption is the right to reclaim a property before foreclosure
by paying interest, principal, and fees. This right terminates at the end of
foreclosure proceedings.
 After the home is auctioned to a buyer, the mortgagee no longer owns it. The
mortgagor can reacquire the property under a right of redemption by
paying the foreclosure buyer for the foreclosure sale price plus cost within
a specified period (usually three months to 2 years).
 Any interests recorded after the mortgage (easements etc. included) will
be wiped out in a foreclosure sale.
 When the foreclosure sale does not cover the debt, the mortgagee can
recover a judgment for the deficiency.
o The Mortgagee must exert reasonable effort to obtain a fair and
reasonable price.

Mortgages not part of foreclosure

A buyer of a foreclosed home takes the home subject to any mortgages not part
of the foreclosure proceedings. Unless the buyer assumes the mortgage, the
buyer is not personally liable on the debt, so the mortgagee cannot obtain a
deficiency judgment against him. However, if the mortgage is not paid, the
mortgagee can still foreclose and obtain a deficiency judgment against the
original mortgagor.

Formal delivery requirements

 The grantor must hand the deed to the grantee upon receipt of the
purchase price or put it in the hands of a third party (the escrow agent)
who hands the deed to the grantee upon closing.
 The grantor cannot recall a deed once it is delivered to the agent.
 If the grantor dies before the escrow agent delivers the deed, the
delivery is treated as if it occurred before the grantor’s death by
“relating back” the delivery to the date it was received by the agent
from the grantor.

Title insurance (725-28; 734-36)

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Provides home purchasers with the assurance they need when making a
large investment in real estate.
Continues as long as the insured owns the property (does not run with the
land).

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POST-CLOSING TITLE
The sales contract provisions are no longer enforceable after closing and
“merge” into the deed. The buyer’s rights are limited to the warranties
contained in the deed or other documents transferring title.

Deed Covenant or Warranties- Grantor’s promises or representations that

title is as presented at closing or that the Grantor will remedy the problem or
pay damages if a third party later successfully asserts an undisputed claim
on the title of the property.
 General Warranty Deed- The grantor guarantees that the title is free
from defects and encumbrances except those explicitly mentioned in
the deed. This warranty covers defects created by the grantor or any
previous titleholder, regardless of whether the grantor is aware of
these defects.
 Special Warranty Deed- grantor limits warranty to those defects or
encumbrances that are attributable to his acts. He makes no
warranties about defects or encumbrances created before he took title.
 Quit Claim Deed- carries no warranties.

Six Deed Covenants

The grantor is not obligated to make all covenants and is held only to those
in the deed.

1. Present Covenants
 Protects against any undisclosed defect or encumbrance that already
exists when the deed is delivered, and the grantee can immediately
bring suit for breach of these covenants, even though no one has
asserted a superior or paramount right to the property.
 Grantee’s rights last only until the SOL (which starts running from the
delivery date) expires.
 SOL may expire before the grantee discovers the breach, i.e., before a
person with a higher priority exercises those rights.

1. Seisin- grantor warrants that he owns the estate he is conveying. It

implies that the grantor is in possession of every part of it. Therefore, if a
grantor conveys Blackacre while a third party adversely possesses part,
the grantor has breached the covenant of seisin because the covenant is
broken.

2. Covenant right to convey- grantor warrants he has the right and power
to transfer good title to the grantor. E.g., A trustee may have a legal title
but is forbidden from transferring it by the trust.

3. Covenants against encumbrances- the grantor warrants that no

encumbrances burden the property except those mentioned or referred to
in the deed.
 Covenant during the executory period- buyer can rescind contract
in most courts and the parties are returned to their original positions
because of a violation of a zoning ordinance or environmental law.
 Covenants post-closing period- judges usually do not believe
grantors should be liable for potential violations of government
regulations. Additionally, it is too complicated to undo the sales
transaction.

2. Future Covenants
 Obligate the grantor to perform some act, such as defending against a
third party asserting a higher claim to the property upon some future
event.
 It cannot be violated until the grantor refuses to act and the grantee
has been ousted or evicted by someone having a paramount title or
right.

15
  Grantee cannot sue the grantor unless and until the future covenant is
breached.
 SOL begins to run when a third party asserts a paramount title or right
or the grantor refuses to execute a needed document.

4. Covenant for General Warranty- The grantor warrants that he will

defend against lawful claims and reimburse the grantee for any loss
that the grantee sustains by an assertion of superior title.
A grantee’s cause of action does not arise until the grantee has been
sued, ousted, or evicted by the party asserting a superior interest.

5. Covenant for Quiet Enjoyment- No one with superior title will

interfere with the grantee’s possession. (Just like general warranty)

6. Covenant for Further Assurances- grantor promises to execute any

other documents required to perfect the title conveyed.

16
RECORDING SYSTEMS & NOTICE
A purchaser puts the whole world on constructive notice of a transaction if the conveyance is properly
recorded pursuant to the appropriate recording act. This constructive notice means that any subsequent
purchaser of the same property will be considered to have legal notice of a recorded transaction, even
if the subsequent purchaser does not have any actual notice of it.

Types of Notice
Actual knowledge- actual knowledge from personal observations, a
document in the deed records, or hearing about it during negotiations or
conversations outside the transaction itself.

Constructive notice aka Record Notice- notice or knowledge a purchaser

can gain by searching the deed records.

Inquiry notice- prospective purchaser hears or observes something that

would cause an ordinary prudent person to inquire further. The most
important source comes from visiting the property.
 May have inquiry notice based on a common scheme of
development (subdivision) or may be required to check deeds to
neighboring property if a common grantor conveyed the properties.

Recording Systems
1. Notice statute- a subsequent bona fide purchaser or creditor for value
prevails over prior claimants if the subsequent purchaser acquires the
interest without notice of the prior claim.
 He does not have to record but risks losing to a subsequent BFP so
there is an incentive to record.

2. Race statute- when two persons hold competing claims to real property,
the first to properly record prevails even if he knows about previously
unrecorded conveyances.
 A non-recording grantor risks having another person’s claim take a
higher priority than her own interest.
 Some say it is unfair because an unscrupulous subsequent purchaser
who knows about an unrecorded document can take advantage of the
situation.

3. Race-notice statute- a subsequent bona fide purchaser or creditor for

value who first records will prevail against a person claiming a prior,
unrecorded interest if he did not have notice of the preceding interest
when he acquired his interest.
 He does not have to record but risks losing to a subsequent BFP.
 Resolves the issue of unscrupulous subsequent purchasers in Race
statute.

Chain of title problems

1. Wild deed- a recorded deed or other document that cannot be found
easily by a search of the grantor-grantee indices because a link in the
chain of title is not recorded or is recorded out of order.
O Although B recorded first, he does not have title because:
1. B did not properly record because a link in the chain is
missing. There is a wild deed between A-O.
A
2. X does not have constructive knowledge because of
the missing link.
Favoring X maintains the conclusiveness and integrity of
B the recording system.

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2. Shelter rule
A grantee (even one who has notice of an earlier conveyance to a
stranger not in her chain of title) can piggyback (is sheltered by) her
predecessors-in-interest’s prevailing good title.
Under the shelter rule, anyone who takes property from a bona fide
purchaser (“BFP”) without notice is treated as a BFP, even if the taker is not a
BFP in her own right.

3. Restrictions and easements on retained property not in the chain

of title.
When a property is sold but notice of easements or covenants is not
passed along, and the beneficiary of the easement or covenant wants to
enforce it, courts have two approaches.
i. Some jurisdictions say the current owner prevails because he is
obligated to check on all deeds to surrounding properties or on
deeds to lots transferred by the common grantor or by other owners
of the lot in the chain of title.
ii. Other jurisdictions say the person enforcing the covenant or
easement prevails because purchasers and their representatives
should know many covenants and easements are included in only
one deed from a common grantor.

4. Documents recorded out of chronological order.

A, anticipating his purchase of Blackacre from O, deeds it to B, who
promptly records it. Subsequently, A purchases Blackacre and records it.
Later, A sells Blackacre to X, who does not have notice of B’s deed and X’s
records.
 Some courts hold that even though A did not own Blackacre when
she transferred it, B takes possession by estoppel by deed.
 Other courts hold that B’s interest is not properly recorded, so X did
not have constructive notice, so X has title. B should have re-
recorded the (A to B) deed after the (O to A) deed was recorded.

5. Uncertainty whether prior subsequent purchasers had notice.

O Assume B knows that A has an unrecorded interest and rushes to

record his interest. A then records, and B then sells to X, who
does not have notice of the O to A deed.
A B will win the title only under Race notice.

Some notice and race jurisdictions favor A because B had notice

B of the O-A deed. They believe that a purchaser like X must search
all previous owners’ names down to the date of closing, which is
expensive. The issue also is proving B’s notice of the O-A
transfer.
X
Some jurisdictions say since X is a BFP w/o notice, he should
prevail because she would not find the O-A deed in search
records since it was recorded after the O-B deed. X’s chain of title
appears complete, and X’s prevailing maintains the certainty and
integrity of the records and reduces the impact to X of off-record
facts (B’s actual notice of A’s deed). B will, therefore, give a title
greater than he has.

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LEASES
A transfer of the right to exclusive possession of specific real or personal
property for an agreed, if indefinite, time-period.
 Conveyances of non-freehold estates in land.
 Maybe in exchange for rent.
 Statute of frauds requires leases with a term longer than one year to
be in writing.
 The landlord retains a reversion.

4 Categories of Leases
1. Term of years- an estate that lasts a fixed time-period. A lease that
expires at the end of a definite period.
 It ends naturally and is not divested unless some condition is attached
to the grant.
 The future interest is a reversion if the grantor owns the property
again after the term of years ends or a remainder if a third party takes
possession.
 Is alienable, inheritable, and devisable.
 The term of years can commence after the lease is executed or
delivered (i.e., on a future date).
 If the landlord dies during the term, the executor or administrator of his
estate has a duty to honor the lease’s terms and provisions.
 The expiration is self-executing and automatic. The tenant does not
have to provide notice that she will vacate at the end of the term, and
the landlord does not need to provide the tenant with a notice to
vacate.
 A lease failing as a term of years is either a periodic tenancy, a
tenancy at will, or a license.
o License- an authorization from an owner to enter premises
without liability for trespass. It is revocable at will by the owner
(and presumably by the licensee, too, on a principle of
mutuality).

2. Periodic tenancy has no defined ending date. It continues until either

the landlord or the tenant gives notice of termination, e.g., to A from
month to month.
 Under common law, ½ a year’s notice is required to terminate a year-
to-year tenancy.
 The death of the landlord or tenant does not affect a periodic tenancy.
 The initial term’s length will conform to the frequency of the rent
payments. For example, if rent is paid monthly, the parties have a
month-to-month periodic tenancy.

3. Tenancy at will- holds over with the landlord’s permission.

4. Tenancy at sufferance- enters lawfully and holds over wrongfully
without the landlord’s consent after the tenancy terminates. (Drury)
a. The landlord can evict and seek damages OR create a new
tenancy.
b. In most jurisdictions, holding over gives rise to a periodic
tenancy; in others it create a term of years.
c. Not entitled to a notice to quit before his tenancy is terminated.

The difference between a tenant and a lodger (licensee) is a tenant

has exclusive legal possession of the premises; the licensee has a right to
use the premises subject to the landlord’s retention of control and right of
access. (Poroznoff)

Privity of contract
The lease exists between a landlord and tenant even after the tenant
transfers (either by assignment or subletting) the lease and vacates the

19
premises unless the landlord expressly agrees to substitute the transferee
for the tenant. This substitution is called Novation.

Privity of estate
Exists between a landlord and a tenant and a landlord and the tenant’s
assignee but not between the landlord and the tenant’s sublessee.
The landlord can sue his tenant or an assignee (but not sublessee) for back
rent.

Example 1. Larry leased a building to Terry. The lease results in a privity of

contract. There is also a privity of estate because they each own an interest
in the leased building.

Example 2. Terry assigns her entire interest in the leased building to Abby.
Larry is not in privity of contract with Abby since they have not contracted
with each other. Larry and Abby, however, have the privity of estate, which
obligates Abby to pay rent directly to Larry.

Example 3. Terry sublets to Sara. Larry is not in privity of contract with Sara
nor is he in privity of estate.

Sublease
When a tenant under an existing lease transfers her right to possession
under a new lease to a new tenant.
 Leaves intact and undisturbed the landlord-tenant relationship with the
prime landlord and the original tenant.
 It allows the original tenant to transfer possession for less than all of
the remaining term, enabling the original tenant to regain
possession after the subtenant vacates.
 Prime landlord does not have a relationship with the sub-leasee.

Assignments
The original tenant remains secondarily liable for rent as a surety—someone
against whom recovery may be had if the assignee does not pay.
 If the original tenant is forced to pay the rent to the landlord, the
original tenant may sue the assignee to recover what was paid. This is
called subrogation, i.e., the original tenant steps into the landlord's
shoes for the suit.
 Only if the assignee “assumes” the lease or promises to perform any of
the covenants does she have a privity of contract.
 The original tenant transfers all his remaining interest in the lease.
 If the first assignee assigns the lease to a second assignee, the first
assignee’s privity of estate with the landlord ends, so the first assignee
will not be liable for future rent to the original landlord. However, she
remains liable for any past-due rents related to her time of possession.

Lawsuits
 Assignees are liable based on the privity of the estate. Upon
assignment, the assignor relinquishes privity of estate.
 The assignor is still liable to the landlord based on the privity of
contract.
 Relief from liability only occurs if the landlord expressly agrees to a
release from liability.

Abandonment and duty to mitigate (Sommer)

 A landlord has a duty to mitigate damages where he seeks to recover
rents due from a defaulting tenant.
 If the landlord has other vacant apartments besides the one that the
tenant abandoned, his duty to mitigate includes making reasonable
efforts to re-let the apartment. He must treat the apartment as one of
his vacant stock.

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  The landlord is required to carry the burden of proving he used
reasonable diligence in attempting to re-let the premises.

Actual eviction- when the tenant is deprived of the occupancy of some part
of the demised premises. (Village Commons LLC v. Marion County
Prosecutors)

Constructive eviction (Village Commons LLC)

Occurs when a landlord, without intending to expel the tenant, performs
actions that deprive the tenant of the beneficial use of part of the property.
In such instances, the tenant can choose either to vacate the property and
terminate the lease and rent obligations, or to stay and pursue legal action
for trespass. To be exempt from paying rent under constructive eviction, the
tenant must leave the premises. Whether the tenant's decision to leave is
justified is a matter for the jury to decide.

Implied warranty of habitability: Hilder (550-64)

The landlord must deliver and maintain during the lease period premises that
are safe, clean, and fit for human habitation. This applies to all latent and
obvious defects.
 Courts may look at local and municipal codes and minimum housing
code standards. A substantial violation constitutes a breach.
 A tenant cannot waive the warranty by any written provision in the
lease or orally.
 A tenant who enters into a lease agreement with knowledge of a defect
cannot be said to have assumed the risk, thereby losing the protection
of the warranty.
The tenant must show:
1) The landlord had notice of the previously unknown defect and
2) Failed to repair it in a reasonable time, and
3) The defect affected habitability, existing during the time for which rent
was withheld.
Tenants can abandon the premises or stop paying rent. Once the landlord
corrects the defect, the tenant can pay rent again.

Landlord tort liability (565-68)

Leasehold and capture (Who owns the meteorite?)

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LIFE ESTATE
 Alienability/ assignable/ transferable- right to dispose (sell/ give away) of
property during owner’s lifetime (inter vivos transfer)
 Devisability/ testamentary power- right to dispose or transfer of property
by will.
 Descendible/ Inheritable- property can be passed by the state’s intestacy
statute to heirs of the owner who dies without a will.

For the life of the grantee.

 The grantor of life estate could control who takes the property at the
life tenant’s death.
o The present owner of a life estate has the right to alienate
(Davis).
 Grantor intends that descendability and devisability not be a part of
lessee’s estate.

 Reversion- If the grant to a life tenant does not stipulate who takes the
property upon the tenant’s death, the original grantor (or his estate if he
is deceased) takes possession. (Reversion in fee simple absolute)
 Remainder- a third party (not the grantor) who will take the property
after the life estate ends. E.g., to A for life, then to B.
 Does not divest/ cut short the prior estate or follow an interest that has
been cut short by a condition subsequent (only follows natural
termination of a prior estate)
 Must be created in same instrument of transfer as one or more
possessory interests (i.e. will, deed)

Life estate pur autre vie- when a person’s interest in a life estate is
measured by the life of a third person.
Example- O conveys to A for life. A transfers his life estate to B. The estate is
measured by A’s lifespan. If B dies during A’s lifetime, the life estate passes
to B’s heirs or devisees until A dies.
1. Lenders do not like life estates because a life tenant can die before the
loan is repaid. Transferor may choose life estates to impose obligations
on the life tenant, to avoid fees and costs involved in administering a
trust, to preserve the property in its present use, and for federal and
state tax reasons.
2. Conflicts between life tenant and remainderman (original grantor/ 3rd
party)- The life tenant can treat future interest holders as trespassers if
they try to use the property or remove anything from it. Life tenants
keep all income, rent, and profits from using the land during the life
estate.
3. Special rights under the “waste” and “open mines doctrine balance the
rights of the life tenant to extract minerals and change the use of the
land with the life tenant’s obligation to preserve the property in its
current condition for the future interest holders.
4. Life tenants must keep the premises in ordinary repairs, pay taxes, and
pay interest on any mortgages (and insurance in some jurisdictions).
He is not obligated to make improvements, repair extraordinary
damages caused by storms, etc.

Fee tail (fee simple conditional)- ownership lasts until the grantee’s lineage
dies out.

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NON-MARITAL CO-OWNERSHIP
Concurrent Estates- The transfer of real property to two or more people.
Cotenants- hold interest in real property at the same time.

Tenancy in common
 Default estate created by transfer.
 Each tenant has the right to process and enjoy the entire property even
if they do not have equal shares of the property AND
 To transfer their interest in the property freely during their lifetime OR at
death because there is no right of survivorship.

Joint Tenancy
At death, there is a right of survivorship (i.e., property interest goes to
other joint tenants).
A. Creation
 The transferor clearly expresses intent to create a joint tenancy and
uses “right of survivorship” language, e.g., I create a joint tenancy
between A & B with the intent to have right of survivorship.
 The 4 Unities
a. Possession – each joint tenant must have the right to possess
and enjoy the entire property.
b. Interest- Each joint tenant has equal share and type of interest.
i. Example 1. if three people in a life estate= 1/3 each in a
life estate
ii. Example 2. If four people in a fee simple= 1/4 each in a fee
simple
c. Time- each joint tenant must receive their property interest at
the same time.
d. Title- each joint tenant must receive their property interest in the
same instrument of title (one deed).

B. Termination
If any of the four unities are severed, the joint tenancy is terminated, and the
tenants own the property as tenancy in common.
 Strawman- a joint tenant conveys to a stranger, and that person
reconveys to the same tenant.
o Although in CA, one joint tenant can sever the joint tenancy
without the use of an intermediary. Riddle v. Harmon.
 Transferring property
 If a joint tenant conveys an interest to a creditor, e.g., a mortgage.
o Lien theory (majority)- the state will treat debt like a lien, so the
joint tenancy is not destroyed.
o Title theory (minority)- treat debt as a transfer of title destroying
the tenancy, and the cotenants will hold the property as tenants
in common.
o Authorities are split as to whether the joint tenancy is severed
when the mortgage is granted or when the foreclosure is
completed.

Example 1
A and B have a joint tenancy. A transfers her interest to C while alive. A and
B now have a tenancy in common because A’s action severed the joint
tenancy.

Example 2
A, B and C have a joint tenancy (each has a 1/3 interest). A transfers her
interest to D while alive. A now has a 1/3 interest tenancy in common
because A’s action severed the joint tenancy (the time and title is now
different). B and C each still have a 1/3 interest in joint tenancy.
If B dies, his 1/3 interest passes to C, who now has a 2/3 interest in a
tenancy in common.

23
Tenancy by Entirety
 It is more durable because only terminated by divorce, death, or
consent of both parties.
 Is not recognized in community property states.
 The Four Unities + Valid Marriage at time of the conveyance
 Sawada-creditors rights to jointly held marital property (tenancy by
entirety based on jurisdiction):
o Group II jurisdictions- the interests of the debtor spouse in the
estate is may be sold or levied upon for his or her separate
debts, subject to the other spouse’s contingent right of
ownership.
o Group III jurisdictions- the property is not subject to separate
debts of one spouse.
o Group IV jurisdictions- the contingent right of survivorship
appertaining to either spouse is separately alienable by him and
attachable by his creditors during the marriage. The use and
profits, however, may not be alienated or attached during
coverture.

Getting Along (or Not)

Spiller- cotenant moved into warehouse and was asked by other cotenant to
pay rent or vacate half of property.
Absent an agreement to pay rent or an ouster of a cotenant, a cotenant in
sole possession is not liable to his cotenants to pay rent for the value of his
use and occupation of the property because he has a right to use and
enjoyment of the entire property.
 In the minority view, the cotenant needs to pay rent if there is a demand
to vacate or pay rent.
 In the majority view, the cotenant does not pay rent unless he is in actual
possession and denies the other the right to enter or he agrees to pay
rent.

Swartzbaugh- husband rents to the boxing club w/o her permission

Can a joint tenant who has not joined in the leases executed by her
cotenant and a 3rd party sue to cancel the lease where the lessee is
in exclusive possession of the leased property?
No. When a joint tenant leases the property to a 3 rd party without the
other joint tenants’ permission, he is giving the lessee his right to possession
he enjoys. Since this is a right the Leasor already had, it does not
prejudicially affect the rights of the cotenants who are not in possession.
The joint tenant, however, is not bound by the lease terms. He can also
recover the reasonable value of the use and enjoyment of his share of the
estate if the tenant under the lease refuses to give him the right to enjoy his
share of the contract (ouster).

Options for cotenant who does not sign a lease w/ leasee:

 Partition
 Ouster
 Accounting

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PARTITIONS
Partition in Kind- when the property is divided, equitably and fairly,
between the multiple owners. Each co-owner will own a certain percentage
of the property.

1. Traditionally, courts favor this approach because it does not require

someone to sell their property against their will.
2. Modern courts decree sales in partition because either the parties wish
it or the court is convinced the sale is the fairest method of resolving
the conflict.

Partition by Sale occurs on two occasions:

A partition by sale should be ordered only when two conditions are satisfied:
1. The physical attributes of the land are such that a partition in kind is
impracticable or inequitable (i.e., the property cannot be physically or
equitably divided among the co-owners AND
a. Determining the practicality of physically partitioning the
property requires considering the situation, the location of
the parcel of land, the size and area of the property, the physical
structure and appurtenances on the property, the number of
competing ownership interests, and other factors.

2. A partition by sale would better promote the interests of the owners,

i.e., When a Partition in Kind cannot be made without substantial injury
to any of the interested parties, the court will order a sale of the entire
property, and the sale proceeds will be divided among the co-owners
and distributed accordingly.
a. When determining what constitutes “substantial injury,” the
court will look:
i. Whether the fair market value of each co-owners share of
the actual property would be materially less than the
amount each co-owner would receive from a sale of the
property as a whole.
ii. Whether dividing the property through Partition in Kind
would result in material impairment of any co-owners’
rights.
In Delfino, the court considered that the defendant was
sole owner in actual possession of the property—her home
and business were located there; her family business had
been there for many years. Selling would force her to lose
her home and income.
The party requesting the partition by sale must demonstrate that such a sale
would better promote the owners’ interests.
The fact that the economic value of the property as a whole would
be less if it were partitioned in kind is relevant but not dispositive,
especially in cases with emotional ties to the land.

Alternatives:
1. Assignment of all the property to one or more cotenants, provided they
pay the other cotenant compensation in an amount set by the court
(and presumably equal to fair market value).
2. Order partition by sale or kind plus payment of an owelty
(compensation) for the fact that
 partition in kind results in one cotenant getting a more valuable
part than others or
 partition by sale yields a higher price than it otherwise would
because one of the cotenants made valuable improvements.

Equitable Division of property on divorce

 Separate title- the property was divided by deciding who owned what
and confirming that ownership.

25
 o What husband owned, what wife owned and what they owned
jointly. Joint assets were split based on ownership percentage.
 Alimony- if poorer spouse needed economic support after divorce
 Equitable division system- all property owned by either spouse is
classified as:
o “separate property” (property acquired prior to marriage and
gifts made to the spouse during marriage) or
o “marital property” (everything else, including income)
o First must be considered property

Marital property at death

Elective share- survivor is entitled to a percent of the deceased spouse’s
estate, typically 1/3 or 1/2. If the decedent’s will is less generous to the
survivor, that spouse can disaffirm the will and take the mandated share. The
forced share treats real property and personal property alike and does not
give the survivor rights in property conveyed by the spouse before death.
Depending upon whether the assets go to the surviving spouse or to other
persons, the forced share may give the survivor too much or too little
property. The Uniform Probate Code (UPC) guarantees the survivor a
percentage of an augmented estate, which includes non-probate assets,
based on the length of marriage. For at least 15 years, the survivor takes
50%.

Common law= separate title

 Grants deed as tenancy in entirety or tenancy in common.

Community Property- a marriage is an economic partnership.

 All income earned during marriage belongs to both partners equally,
regardless of which spouse works or receives the income.
 Proceeds of community property are community property.
 Separate property allowed are either premarital property, gifts made to
one spouse, and inheritances.
 It does not matter if one spouse holds title to an asset.
 Grants deed as community property.

Example: A and B are married and live in a community property state. A uses
her earnings to buy a house in a neighboring state that uses a common law
marriage system. She dies and leaves her property to B and her daughter C.
Who owns the house.
Answer: Since the house was bought with community property income, B
owns an undivided ½ interest in the house while she is alive, and continues
to when she dies. He also now owns ¼ of A’s interest because he shares it
with C.

26
TRUSTS
Allow settlors to arrange their assets in ways that maximize flexibility in
property management and transfer wealth to future generations.
 The trustee holds legal title (is legal owner) to the trust property and
manages the property for the benefit of beneficiaries.
 The trustee has the power to sell trust assets and reinvest proceeds in
other assets.
 The net income of the trust is paid to beneficiaries, and upon termination
of the trust, the assets as they exist are handed to the beneficiaries, free
of the trust.
 Trustees hold equitable interest, so courts of equity enforce their duties.

Broadway National Bank v. Adams (346-50)

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 EASEMENT (AFFIRMATIVE AND NEGATIVE)
An easement is a right one person holds to use another’s land.
 Affirmative easement- right to go onto property for a specific purpose.
 Negative easement- right to prevent the possessor of the servient
estate from doing some act on the servient estate.
o Duty not to block light.
o Duty not to interfere with airflow.
o Duty not to interfere with water flow in artificial streams on the
dominant estate.
o Duty not to remove support from a house on the dominant
estate.

CREATION OF EASEMENTS
A. EXPRESS EASEMENTS - An express easement can be created by grant
or by reservation. An express easement that fails for some reason (such
as it fails the Statute of Frauds) is a license. Munn. (specifically, Henry v.
Dalton pg. 780)
 By Grant. An express easement by grant arises when it is
affirmatively created by the parties in writing that satisfies the statute
of frauds.
o Granted by deed.
o The grantor sells a part of her property and grants the purchaser
an easement over the grantor’s retained land.
o Grantor maintains dominant estate; grantee has servient estate.
 By Reservation. An express easement by reservation is created when
a grantor conveys land but reserves an easement right in that land for
his use.
 By Estoppel. An investment in improvements either to the
subservient estate or to the other land of the investor.

B. IMPLIED EASEMENTS
1. The unity of ownership (there was a common owner) is severed.
2. The use was in place before the severance.
3. The use was visible or apparent at the time of the severance, and
 Discoverable by a reasonable inspection (Van Sandt)
4. The easement is reasonably necessary for the enjoyment of the dominant
estate.
 An alternative access cannot be obtained without substantial
expense of money or labor.
 Efforts to duplicate facilities or the cost of reestablishing an
entitlement to make the prior use would be extremely wasteful.
 Implied grant- easement benefits the grantee.
 Implied reservation- easement benefits the grantor.

Types of Implied Easements:

I. Implied Easement by Necessity.
1. A common owner severed the property.
2. The severance created the necessity for an easement of egress and
ingress and
a. Necessity must exist at the time of severance. If created later it
is not necessity.
3. The easement is strictly necessary for access to the landlocked parcel.
a. The dominant estate cannot enjoy the property without the
easement.
Lasts only so long as the necessity lasts.

II. Statutory Easement of Necessity

A statute that gives the owner of landlocked land the right to condemn an
easement across neighboring land if they can show requisite necessity. It
does not matter how the landlocking occurred; prior common ownership
of the dominant and servient estates is not required.

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III. Implied Easement by Prescription- Long-continued adverse use. The
trespasser’s use must be:
 Hostile (i.e., without permission from the owner of the land).
 Open and notorious (i.e., not hidden); AND
 Continuous for the statutory period.
 Actual use, i.e., physical presence on the servient estate, must be
only affirmative easement.
 To prevent a prescriptive easement from being acquired, the owner
must effectively interrupt or stop the adverse use.
 Use of a prescriptive easement is limited to the general kind of use
the easement was created for and what the servient owner might
reasonably expect to lose by failing to interrupt the adverse use.
E.g., if easement was created to ride horses you cannot ride a
motor vehicle there.

IV. Easement by Estoppel- A dominant estate holder, in reliance on the

inaction of a landowner, invests in improvements on either the servient or
dominant estate. (Mund (well case))

V. Quasi Easement- a use that existed when the common owner sold part
of the land. Because no one can create an easement on his or her own
property, it is referred to as a quasi-easement. The use benefits one of
the lots but is physically located on the other.
 Endures indefinitely because of the owner’s intent at the time of
severance.

Exam Tip. Unlike adverse possession, the use need NOT be exclusive (e.g.,
a public easement to access a beach).

Termination of an Easement. Any of the following may terminate an

easement:
 Release. An easement is terminated if the holder expressly releases
it. The release must be in writing and satisfy the statute of frauds.
 Merger. The easement is extinguished if the dominant and servient
tenements come into the same ownership.
 Abandonment. An easement is terminated if the holder demonstrates
an intent to never use the easement again (e.g., act of obtaining an
alternative means of access) through physical action.
o Requires more than non-use or statements.
 Prescription. An easement is terminated if the holder fails to protect
against trespassers for the statutory period or prevents the easement
from being used for the prescriptive period.
 Sale to a Bona Fide Purchaser. An easement may be terminated if
the landowner sells the property.
 Estoppel. An easement is terminated if the landowner reasonably
relies to his detriment on the easement holder’s assurance that the
easement will no longer be used.
 End of Necessity. An easement by necessity lasts as long as
necessary — if it is no longer necessary, the easement terminates.
 Expiration
 Estoppel- if the government uses its eminent domain power.

Profits and Licenses. The following two interests are NOT easements:
 A profit a prendre (“profit”) is a right to enter another’s land to
remove a specific natural resource.
 A license is a revocable permission to use another’s land (e.g., a ticket
to a music concert).

ASSIGNMENT OF EASEMENTS

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An “easement in gross” personal covenant that benefits the owner and
not the land itself.
 Unless assignable, ends no later than the holder’s (grantee’s) death.

An easement appurtenant benefits the owner or possessor of a particular

parcel of land. Rights or obligations of servitude are tied to ownership or
occupancy of land.
 It has the potential to continue indefinitely.
 Transfers with the property it benefits.
 The majority rule is that it cannot be used in connection with a non-
dominant land, and such use is subject to an injunction. This fixed rule
prevents uncertainty in land transactions.
 Voss v. Brown departed from that rule. In exceptional cases, courts
permit a landowner to extend use to property adjacent to the dominant
estate by awarding servient owner damages, rather than an injunction,
for unauthorized use.

Example: O deeds E the right to use his parking lot (easement). E sells her
home, which is 5 miles away to P.
 If E can continue to park there, it is an easement in gross.
 If P can park there (E cannot), it is an appurtenant easement.

Scope of Easements (Voss v. Brown)

An easement appurtenant to one parcel of land may not be extended by the
owner of the dominant estate to other parcels owned by him, whether
adjoining or distinct tracts, to which the easement is not appurtenant.
 Any extension is a misuse of the easement.
 When deciding whether to award an injunction courts consider:
o If there is damage to the servient lot owner from the use of the
easement,
o an increase in the volume of travel on the easement,
o an increase in the burden on the servient estate, and
o the landowner did not stand by and watch the easement owner
expend monies on a project expanding the easement.

Question
Suppose O grants A an easement to reach her property that is fixed by
mutual agreement. Subsequently, O proposes to change the location at his
expense to facilitate the development of his land and A objects. Can O
change the easement?
Restatement Third of Property grants servient owners the right to make
reasonable changes in the location or dimensions of an easement to permit
normal use and development of the servient estate only if the changes do
not:
 Significantly lessen the utility of the easement.
 Increase the burdens on the owner of the easement in its use and
enjoyment.
 Frustrate the purpose for which the easement was created.
However, some courts prefer the traditional approach of saying that once
fixed by the parties, it cannot be changed without the permission of the
dominant owner.

Modifications to Easement
(Example VanCleve speed bumps.)
The servient owner retains a right of dominion and use of the property. The
court considers the relative benefits of the modification against the claim of
injury to the dominant property.

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COVENANTS (AFFIRMATIVE AND RESTRICTIVE)
Real Covenants
A promise concerning the use of the land that runs to successors of the
promise. It typically requires the holder to either do something OR refrain
from doing something to the land.

Creation by Implication: Although a promise creates a covenant, an

equitable servitude can be created by implication. The most common way
this can happen is when an entire development is built under a common plan
or scheme. Courts will often infer an implied promise by all of the owners of
tracts in that development to use their tracts in a manner that is consistent
with the original plan or scheme. For an equitable servitude to be created in
this manner, the buyer against whom it is being enforced must have had
notice of the common plan or must have had reason to know of the common
plan.

Touch and Concern= physically touch and concern the land

Examples: limit lot to SFH, ban improvements closer to 5ft from a property
line, requiring all brick exterior.

Do not Touch And Concern

Examples: generally, payment of money, e.g., a named management
company will manage property for a percent of rentals; the house will be
built with a specific builder.
Courts dislike these “tying” relationships because:
1) It encumbers the lot so much that it may dissuade some future
purchasers who may prefer different companies.
2) It is open-ended because it imposes costly, uncertain, and unforeseen
financial burdens.
3) The original landowners who entered these contracts may not have
been sophisticated enough to appreciate the long-term consequences of
a promise.
4) Many of these are unreasonable restraints on trade.

 Personal covenant benefits the grantor personally but does not benefit
the land.

 Running with land- parties intended for successors to be bound by

agreement:
o Writing. The covenant must be included in writing in the original
conveyance (i.e., must satisfy the statute of frauds).
o Intent. The original parties must have intended for the covenant to
run with the land.
o Touch and Concern. The covenant must touch and concern the
land (i.e., the burden of the covenant must affect both the Promisee
and promisor as landowners — usually by increasing the value of
the land).
o Strict Vertical Privity. The successor must take the original
party’s entire interest. The servient landowner must have
voluntarily transferred the land to the successor owner for the
burden to run with the land. The burden does not run to adverse
possessors because they are not successors to the original owner’s
estate but take on a new title by operation of law.
o Horizontal Privity. The original contracting parties shared some
level of ownership or control in the land. If the two parties who
agreed to the covenant were merely neighbors and one of the
parties had no ownership interest in the servient land, then the
covenant will not run with the land.
o Notice. The new owner must have notice of the covenant. Notice
may be either actual or constructive (i.e., record notice). Inquiry

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 notice may suffice for equitable servitude (e.g., inspecting the land
would reveal the servitude).

Personal Covenant vs. Covenant Running With Land

The remedy for a breach of a real covenant is money damages.
 The benefit of the covenant is the ability to enforce the covenant.
 The burden of the covenant is being subject to it or bound by it.

For a benefit to run to successors, the following four elements must be

present: Writing, Intent, “Touch and Concern” and Relaxed Vertical
Privity.
 Relaxed Vertical Privity. The successor need only take an interest
that is carved out of the original party’s estate (i.e., the successor can
take less than the original party’s entire interest in the property – e.g.,
the successor takes a life estate from a fee simple).

For a burden to run to successors, the following six elements must be

present: Writing, Intent, Touch and concern, Strict Vertical Privity, Horizontal
Privity, and Notice.
 Strict Vertical Privity. The successor must take the original party’s
entire interest.

EQUITABLE SERVITUDES
An equitable servitude operates like a real covenant
with easier requirements. The main difference between a real covenant and
an equitable servitude is in the remedy. The remedy for a breach of an
equitable servitude is injunctive relief.
 For equitable servitudes, there is NO privity requirement.
 For a benefit to run to a successor, the following elements must be
present: Writing, Intent, Touch, and Concern.
 For a burden to run to a successor, the following four elements must
be present: Writing, Intent, Touch and Concern, and Notice.
 “In gross” - created by person who held no property that benefitted
from the servitude.
 Appurtenant- benefit or burden tied to the ownership or occupancy of
a particular lot.

IMPLIED RECIPROCAL SERVITUDES

Implied reciprocal servitudes arise in planned subdivisions. Most
jurisdictions impose the following requirements to enforce an implied
reciprocal servitude:
1. There must be intent to create a servitude on all plots (i.e., a common
scheme);
2. The servitude must be negative (i.e., a promise to refrain from doing
something), AND
3. The party against whom enforcement of the servitude is sought must
have actual, constructive, or inquiry notice.
Reciprocal negative servitudes are implied from the common scheme (i.e.,
writing is NOT required for an equitable servitude created by implication).

Example: Donald buys 100 acres of land with the intent of dividing it into lots
on which to build single-family residences. He divides the property into lots
and begins to sell them off, one at a time. At first, he inserts a provision into
every deed requiring the property to be used only as a single-family
residence. However, later, he forgets to insert this provision into the deed.
Sheila buys one of these lots, but the provision is missing, so she decides to
build an apartment building on her lot. If Sheila knew or should have known
about the original plan, a court would likely infer an implied equitable
servitude to prevent Sheila from building an apartment building on her lot.

Termination of Covenants

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 1) Merger
2) Formal release
3) Acquiescence- P has failed to enforce the servitude against other
breaches and seeks to enforce it against D.
4) Unclean hands- P is trying to enforce a violation of servitude against D
that P also has previously violated.
5) Abandonment- resembles acquiescence except enforceable against the
entire parcel rather than only to the P immediately involved.
6) Estoppel- D has relied upon P’s conduct, making it inequitable for P to
enforce servitude.
7) Laches- P’s unreasonable delay in enforcement causes prejudice to the
defendant.
8) Government eminent domain
9) Changed conditions- e.g., satellite dish law change.

Covenants in Condos and Coops

The Homeowners’ Association acts as an agent or representative of property
owners and advances their interests. Therefore, the members are property
owners who have the right to enforce the covenant even though there is no
privity.

Gated Communities
Board decisions are not subject to state action review but to a rule of
reasonableness. The members agreed to the rule, and adherence is
important to maintain the communal living they enjoy.

Policy: With condos, coops, and gated communities, if people are exempted
from participating, it can result in a tragedy of the commons free riders and
holdouts. HOAs, etc., help manage conflicts and pool collective funds to
manage community resources. Their rules ensure common resources are not
misallocated.

NUISANCE
Private nuisance- substantial and unreasonable non-trespassory
invasion of another’s interest in the use and enjoyment of land.
 Affects a single person or a small definite group of people.
 P must demonstrate that D either intentionally created the nuisance,
acted negligently, or engaged in inherently dangerous activities.
 Usually intangible, such as smell, lights, sounds, vibrations, dust, and
pollution of air and water
 Substantial- a reasonable person with normal sensitivities would
consider the interference to be substantial.
 Liable for unintentional interference resulting from negligent, reckless,
or abnormally dangerous activity.
 Liable for intentional invasion or interference when conduct is
unreasonable.
o Intentional- acts for the purpose of causing it or knows or is
substantially certain that it is a result of his conduct.
 Most nuisance cases involve inconsistent land use. Most communities
prevent this by having zoning laws.
 When invasion is just physical, it is a trespass.
 Reasonableness factors: whether the conduct in question significantly
interferes with public health, safety, peace, comfort, or convenience;
whether the conduct is proscribed by statute (Spur); whether the
conduct is of a continuing nature or has produced a permanent tor
long-lasting effect.

Balancing of utilities analysis- each landowner must tolerate some

inconveniences and annoyances for the benefit of industrial and
technological advances.

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  Only if the harm to P outweighed the social utility of the defendant’s
activity would there be an injunction. Otherwise, D can carry out the
activity, and D is entitled to monetary damages for the diminution in
value of his property.
 In cases where both parties’ uses are socially beneficial, the one less
suited to the locale is enjoined, or the one to use the place first will
prevail since the other came to the nuisance.

Public nuisance—act or conduct that inconveniences the public by

interfering with a common right, e.g., obstruction of a public street, running
a white house.
 Must affect a considerable number of people or an entire community or
neighborhood.

The tragedy of the commons- it is in the interest of an individual to

exploit a collective resource, but in the community's interest that the
collective resource be managed sustainably.
A “limited access commons” in which a group of individuals permits each
member to exploit a collective resource but bans outsiders from doing so
avoids the tragic consequences for the group. Limited numbers and shared
outlooks tend to reduce strategic behavior among the group members.

Externalities- when a person decides how to use a resource without taking

full account of the effects on others. As a result, resources are misused, i.e.,
used in a way when another way would make society as a whole better off.
Externalities can be positive; for example, street musicians hoping for tips
also benefit those who enjoy the music.

Injunction Options
 Grant injunction but postpone its effects to a specified future date to give
opportunity for technical advances to permit the defendant to eliminate
the nuisance.
 Grant injunction conditioned on the payment of permanent damages to
the plaintiff, which would compensate for total economic loss to their
property, present and future, caused by the defendant’s operations.

Coming to the Nuisance is normally a bar to relief.

In Spur, although Webb came to the nuisance because households were also
affected, the court opted not to bar relief.

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