Transcript
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Property
General RuleRights among people with respect to things
Bundle of rights with respect to a thing held by one person in relationshipto another
Property exists to the extent that the law recognizes it (legally recognized )
Each interest has certain rights associated with it
Rights can be to sell (transfer), exclude/include, possess anduse
Rights are not absolute, they are subject to certain limitations
Goal of property law is to resolve conflicts of peoplewith competing interests; to determine whose rightsare superior
Determination of ownership, rights, interest in Property
Check the law! Property interest in things is your legally recognized interest
Right only to the extent that law will protect that right
Property rights are not absolute (they are limited)
Rights exist only to the extent that they serve humanvalues
o (socially-acceptable justification)
Two-Pronged Test in defining Property1). What are the rightsamong people with respect to the thing?
Land Fee Simple, Tenancy, etc. Right to Exclude/Include
Right to Transfer (sell)
Right Possess and Use
2). What are the things attached to the rights?
Real Property (Land)o Right in land and what is attached to the land (airspace,
groundwater )
Personal Property (Chattel)o Jewelry, livestock, coins, books
Exception: human organs (courts do not recognizeas personal property)
Wild animals in their natural habitat (un-owned)
Intangible Personal Propertyo Stocks, bonds, patents, trademarks, copyrights
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First Possession:Acquisition by Discovery, Acquisition by Capture, Acquisition by Creation
First Occupancy (First Possession) Theory in General
First person to take occupancy or possession of the thing, owns it
Explains property rights in un-owned natural resources
Still the basic rule for determining priority of competing title claims inreal property
Offers quick, inexpensive method to resolve competing claims andavoid conflict
Drawback
Counterproductive because it wastes natural resources
Long-term conservation is impossible Ex.A,B, C all own parcel of land with underlying oil
deposit
A pumps out all underground oil so that no one else canclaim it, therefore no incentive to preserve for future use
John Lockes Labor Theory (Lockean Labor Theory)
Every person owns his own body
Each person owns the labor that his body performs
A person who labors to change something in nature for his benefit,mixes his labor with the thing
By mixing his labor with the thing he acquires rights in the thing
Acquisition by Discovery
Rule of DiscoveryDiscovery of land vests absolute title in the discoverer
Johnson v. MIntosh
Court issue is who has superior title to the land
Did Indians have right to sell the land to Plaintiff?
No, Indians only had right of occupancy
Indians had no legally recognized right to sell the land
Discoverer (European) had superior right to title of theland
Property right defined by law: Rule of Discovery
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Acquisition by Capture
Law of CaptureApplies only to animals in their natural habitat for to apply (notdomesticated or tamed)
Pierson v. PostEstablished the actual capture rule as American Standard for acquiringtitle to wild animals
General Rule for Law of Capture Majority rule
(Does not apply to domesticated animals) No one can own a wild animal
Ownership is acquired only through physical possession of theanimal
Physical possession (dominion and control) is:o First to capture or kill acquires title to it
Mortally wounding animal without giving up pursuit toacquire title to it
i.e. animal traps
Trapping also w/o abandoning is sufficient to constitutepossession of the wild animal
o Must then take the added step of taking possession
of it Mere chasing or pursuit does not give one a right to possession
against another who captures it (has dominion over)
If trap and escapes animal retains its wild animal status,possession is lost
o Exception: animal released and returns to captor
(animus revertendii)
Still property of captorWild Animal Rule
Only applies to wild animals in natural habit
If outside natural habit, gives notice that it belongs to
someone else Cannot acquire title to it
Public Policy RationaleReward successful hunters, ensured certainty in property rights,minimized arguments
Probable Capture Standard Minority Rule
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A pursuing hunter with a reasonable chance of capturing the animalis sufficient to create possession
Exception to General RuleAnimus Revertendi
A captured (or tamed) animal that has the habit of occasionallyreturning to its captor (captor is still considered the owner/possessor)
Include exotic animals not in natural habitat (i.e. giraffe,elephant)
Exotic nature of animal puts others on notice
Public Policy RationaleMotivates owners to tame wild animals for productive useoutweighs certainty
Actual Capture Standard and the Role of Custom*Court says that when dealing with industry custom or practice
relating to capture, then it should prevail*
Ghen v. Richo Rich takes blubber and oil from the whale that was harpooned and
killed by Gheno Rich acts contrary to custom that whoever kills the whale owns the
whaleo Only applies when referencing trade or commercial industry, not
sport/recreationo Custom was Judicially accepted
Public policy rationale
Critical to survival of local whaling industry
Public Policy Rationale for Capture Custom in Industry and TradeEndeavors that require a particular skill with outlay of significant
capital
Rights of Landowners Wild animals on the Land
Rule is ratione solio The owner of land has possession (constructive) of wild animals on his
land
Landowners are regarded as prior possessors of any animals ontheir land until the animals escape
Cannot trespass onto another land and kill/claim animalModern Law
Now replaced under Trespass lawsOnce animal leaves property; owner loses constructive
possessionTitle
2 can have titleA trespasses on Bs land and takes property
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B trespasses on As land and takes back propertyAs between A &B, B has superior title
Keeble v. Hickeringillo Plaintiff set up a decoy pond to lure and kill ducks on his land
o Defendant essentially interfered with Keebles trade by scaring the
ducks away (malicious interference with trade)o Court used doctrine of ratione soli
Public Policy Rationale for Capture RuleEncourages killing/capture of wild animals for benefit of society
Acquisition by Creation
Property in Ones Ideas and Expressions
Rights in the News
General Ruleo Property rights cannot exist in an idea
o Common Law Rule: Any product can be imitated or copied
o No property right in news as relates to general public
Rule: Absent some special common law or statutory right, a mans propertyis limited to the chattels which embody his invention
o Law does not favor monopoly but competition
International News Service v. Associated PressAssociated Press brought suit against INS for pirating and selling news thatAP gathered
No property right in the news itself; only property right is the creationof an original story from the news (article)
News creates itself; your interpretation is the property right(copyright)
As between competitors, court recognizes Quasi Right in newsgathering process
Cheney Brothers v. Doris Silk Corp.(1930) Defendant copied plaintiffs design
Court says that you can imitate any product (common law rule)o No copyright in the design (not protected)
o Modern Law: copyright in ability to create the design
Rights of Publicity
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White v. Samsung Electronics America, Inc.
Actor, politician or famous person has a property right to exclusive use ofname andlikeness for financial gainImage/Likeness (Vanna White Case)
Property rights to extent that one uses to make a living
Property Rights in Ones PersonMoore v. Regents of The University of California
General Rule:
Law generally acknowledges the authority of all persons to control thedestiny of their body parts(i.e. blood, bone marrow, hair)
Supreme Court overturned Court of Appeals and says no conversion (noproperty right)
Majority held that there is no ownership interest in cells after removalo No property rights in body parts/person
o Public Policy
Rationale:Court will not create property rights because of the larger Public policyat play pertaining to medical advancement research.
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Acquisition by Gift
Gift Apresenttransfer of an interestin propertyCan be present interest or a future interest
Inter Vivos GiftGift given during ones life time or gifts between living persons
o Living donor makes an immediately effective (present)transferof property ownership to a living donee
Elements of Inter Vivos Gift
Irrevocable at the moment gift is given
Only way to get gift back is to have donee return/re-deliver gift
Testamentary GiftGifts that take effect upon the donors death (gift made in a will)
Gift Causa MortisGift given in response to impending death (deathbed gifts)
Elements of Gift Causa Mortis
Revocable if donor does not die
Must die from exact illness or threat of death that prompted thegift
Death must be imminent
Is subjective (donee must believe his death is imminent)
Gift Requirement1). Intention
Donor must intend to make an immediate (present) gift to thedonee
If a condition precedent there is no intent to make a gifto Condition Precedent
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o Donee has to do something to receive the gift
Ex. Father promises to give daughter a car if shegets an A in Property
Standard has to be clear and convincing; must be intent to givean immediate gift. Undisputed on the facts.
Title must transfer interestnot possession.
Possession may not happen until sometime in the future (validintent)
Ex: Gruen v. Grueno Gift was immediate because it was a transferof
interest/rights in a painting given to son on hisbirthday even thoughpossession was notimmediate (happened upon fathers death)
Intent exists to confirm donors subjective intent (stateof mind) to give giftModern Law
Delivery is subordinate to intent
If neither of above delivery methods is performed, mustlook at intent
So long as requisite intent is there, court will recognizethe gift even if delivery is not fully performed
2). DeliveryMain feature of delivery is Dominion and Control
Actual/Physicalo Donor must (physically) deliver the gift
o Main method of delivery for items of tangible
personal propertyo If you have dominion or control of the thing then:
Anything that can be delivered shouldbe delivered
o Courts favor actual delivery over all other delivery
methodso Deters fraud
Constructive
When manual delivery is impractical orimpossible
Only permissible when actual delivery is impossible
at time of gift Delivering a means of access of thing being gifted
Ex. Keys to a caro Donor physically transfers to donee means of
obtaining access to and control of property(handing over a key or title)
Symbolico Handing over something symbolic of the gift given
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o Written instrument declaring a gift of the subject
matter (title, letter, memo, note) that may be givenin conjunction with symbol
Ex. Deed to Land
Not the thing that gives you access to ormeans to control the thing
Agent Delivery (Delivery to a Third Party)
o To be effective, it depends on who it is delivered to
o Depends on relationship of parties that creates the
controlo Must look at who agent is to determine when
delivery is effectiveo If an agent of donor, then delivery is not complete
o If an agent of donee, then gift is delivered and
complete when gift is delivered to agent
Public Policy Goals Donee possession demonstrates donors intent to make a
gift Delivery warns donor about legal significance of the act
(prevents impulsive decisions)
Donees possession provides prima facie evidence that agift was made
Delivery exists to assure that there is an act to provideobjective manifestation of the donors subjective intent(Evidentiary in nature)
Corroborates intent to make a present gift3). Acceptance
Gift must be Accepted
Intention may be shown by oral evidence
Acceptance is assumed if gift is beneficial orvaluable to donee
o If acceptance is not assumed (a detriment to
donee), must be an added step of acceptance
Express acceptance (?)
Acquisition of Property by Find Finders Law
1. Important to identify Findera. First person to take control
2. Must be an act of controla. What acts constitutes sufficient control
3. Must determine what type of property4. Must identify competing claims
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5. Where is property found?6. Identify category of property
Lost
Owner involuntarily parted with the item and does notknow locationo
Length of lost time is inconsequential Rights superior to finder
Finder has superior rights to everyone in world excepttrue owner
Original owner always maintains ownership
First person to find; has title over anyone except true owner
If found on someone elses property (legally there), then it isyours
Exception:If you are there as a trespasser and find then it is not yours
If attached to or affixed to the land, generally the owner hassuperior title to yours
If owner has not taken possession of the land /title may or maynot be superior to yours
When found by an employee, claim is between employee andemployer
o Under agency law, employer has superior title
Mislaid
Owner intentionally places item in a location and forgets thelocation
True owner has right superior to finder
Finder is first person to take possession/control
Finder has superior rights to everyone in world except true
owner Exception:
o If found on property of another (house, shop, store)
o Owner of property where mislaid property is found
is entitled to possession over findero Property owner has superior title to everyone
including the finder, but not to original ownero Is person in the best position to return to original
owner
Owner of property is now bailee to original owner
Original owner always maintains ownership
Abandonedo Intentionally relinquished property
o Must look at subjective intent of person who abandoned
Express words or conduct
Would reasonable person ascertain by conduct that property isabandoned?
Finder is 1st person to find and intent to claim property as theirown
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Has superior to title to everyone including the owner
Where was it abandoned, what type of property is it
Treasure Trove
Usually gold bullion, silver (hidden by unknown person)
Hidden by unknown owner for an extended period of time or in
distant past Governed by other laws of Finders LawException:
If property is found embedded or otherwise affixedto land of another, it belongs to property owner wherelost property is found
If found on top of land, and not a trespasser, youcan be a finder of that lost property
True owner always retains ownership unless they haveabandoned; then must look at subjective intent
Not considered treasure trove unless identity of owner isunknown
May be distant past
Must look at where it is found
Follows general rule of Finders Law (lost, mislaid, abandoned)
Adverse Possession
Mixture of Statutory and State Law
Statute of Limitations requiremento Owner of property must make a superior claim to property by someone
who is adverse possessing the owners property
o Ranges from 10-20 years To acquire title to your property
Adverse Possession is an affirmative defense; must raise the defense; is notautomatic after the SOL
Some jurisdictions require occupant to pay taxes against the land
Elements (based on the use by a reasonable owner)Actual
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o Must physically occupy or use the particular parcel of land
o Must be used in the same manner that the true owner would use the
land
Depends on circumstances; can be residence, cultivation,improvement, grazing, pasturing, hunting, fishing or other usefulactivities
o
Must look at character, nature, and location of the lando Acts are different due to character of land
Act for possession of single family home will be different than a1,000 acre tract of land
o General Rule
Adverse Possessor only has title to land that he actuallyoccupies or uses
Bears burden of proving the boundaries
True Owner continues to own any UNOCCUPIED land
Constructive Ownership by Color of TitleGeneral Rule
Can only acquire title to the land AP actually occupies
EX. If A cultivates 5 acres of a 500 acre farm and meetsother requirements of AP, then he only obtains title to the5 cultivated acres
Exception: Constructive Possession by Color of Title
Claim because of faulty instrument (deed/tax sale) that conveystitle
No conveyance of legal title
Benefits
Shortens statute of limitations! If claimant has actual possession of PART of land described (5 of
500 acres) in the deed (or other document) he is deemed tohave constructive possession to entire land described in thedeed
Exclusiveo Possession cannot be shared with true owner or general public
at large
o If TO shares possession with the parcel AP is using, then exclusivity iscut off
Statute of Limitations starts overo Occasional visit by 3rd party does not necessarily interrupt exclusive
Is only required to exclude those that a TO would exclude
Occasional trespasser may not cut off exclusivityTwo Adverse Possessors
If both occupy the land, then there is no exclusivity
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Court will normally rule that the 2 AP hold joint possession andwill acquire title as Tenants in Common
Open and Notoriouso Possession must so visible and obvious that TO who elects to inspect
his property is put on notice that someone is using his property
Posting signs, residing on land, building fences/improvementso If you clean up after yourself, then TO does not have notice
Secret or hidden activities do not satisfy notice to ownero Encroachment
Would a reasonable person be able to tell that someone is usingthe land with the naked eye
Court says will not require one to get land surveys to establishAP
HostileWithout permission from true ownerClaim of Title/ Claim of Right
Hostile without owners consent
3 viewsMajority (modern) Objective View (our view)
Subjective state of mind is irrelevant; AP must just usewithout consent
Possessors conduct is deemed objectively hostileJustification:
AP is a specialized SOL to recover possession of landEase of Administration; Provides a bright-line standard
Minority (Good Faith Test)(Claim of Right)AP must believe that they own land being adversely
possessedInnocently, but mistakenly believe
Justification:Method of curing minor title defects and protects title ofintended owner
Intentional TrespassMust know that land is not his and subjectively intends totake title from true owner (does not care and is takinganyway)
Continuous Must have been met for entire duration of Statutory Period
Must only be as continuous as that of a reasonable owner (look at nature ofproperty use
o Ex: Summer time use
Use in the same manner that reasonable owner uses
If TO returns to property it interrupts the continuity requirement (as well asexclusivity requirement)
o TO can interrupt continuous if he comes in uses land as you are
Transfer to successive TOs does not interrupt APs possessiono New Owner still has obligation to inspect and eject the AP
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*Intestate succession: succession by statute for someone who dieswithout a will*
Exception: Tackingo Successive Periods of AP by different persons combined together
o Satisfy the statutory duration requirement
Privity
Tacking is permissible only if successive claimants are in privitywith each other
Transfer of interest (can be deed, will; some legal means)
No privity between successive trespassers
Ex.If one AP owner uses for 10 years then transfers interest to another (privity)AP who uses for 10 years and neither use for the statutory period thenowners may tack together both periods to meet SOL requirement
Statutory Period (Requisite amount of time)Disability Statutes
oTolls the SOL
o If owner is under 18,(infancy), mentally unfit, imprisoned
o Disability of owner must exist at time AP starts possessingproperty
o After SOL is passed, Owner must bring action to eject AP within 10 years
after disability is removedo Owner has entire SOL period + 10 years after disability is removed
oThis only applies to Owner of the property
o If Disability arrives AFTER AP starts possession, it is irrelevant
o Disability has to be against the owner, not heirs, etc
Differences
SOL does not start to run until disability is over
Others provide that Statutory period begins running only AFTER disabilityends
Color of Title (Tolls statutory period) Claim founded on defective instrument
Defective instrument describes parcel of land
Statutory period is shortened but must still meet all elements of AP
At end of Statutory period will own everything described in the deed
Present Interests
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Present Estate (Possessory Estate )Freehold Estate
Must possess these 2 qualities
Immobile /Immovable
Land or some interest that derives from land
Duration
Indeterminate
3 type of Freehold EstatesFee Simple (the entire estate 100%)
o Not subject to any sort of termination
o Most common type of freehold estate
o Ex. O conveys to A and her heirs (Common Law)
o O conveys to A (Modern Law says sufficient)
GrantsDevises (willed)
Duration Indeterminate
When O conveys a fee simple and there are no heirs, thenO does NOT retain a reversion because he conveyed theentire estate (Fee simple).
o There is an escheatment to the state
*Escheatment*When there is no grantor at reversion or no heirs at
remainderFee Tail
Is a common law concept
O conveys to A and the heirs of her body
If heirs are in existence at time of grant they do have aninterest in the estate
Conveyance must be within the bloodline
Duration As long as a bloodline exists (not through adoption)
If A dies with no descendants or heirs from her body, the estateends
O retains a reversion; When O conveys a fee tail, hetransfers less than a Fee Simple therefore he has areversion
Life Estate
Endures for the life of a person
Always creates a future interest (remainder or reversion in theGrantor)Ex. O conveys to A for Life
This estate reverts back to O the grantorEx. O conveys to A for life, then to As heirs
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This estate gives a fee simple remainderin As heirs
O has given A, a Life Estate, then given a fee simpleremainder to As heirs
At this point there is no remainder or reversion after theheirs, it will fall into escheatment
Life Estate Pur Autre Vie (estate in the life of another)Ex. O conveys to A for the life of B
DurationIndeterminable because you do not know how long someone
will live
EscheatmentWhen there is no grantor at reversion or no heirs at remainder
Ambiguous language Must use Rules of Construction
Must yield to testators intent (words on the paper)
Common Law
Unless language is clear the legal presumption is that alife estate is intended unless the intent to pass Fee Simpleis clearly expressed
Public Policy
Law prefers as public policy the free alienability/transfer of land
It promotes the alienability and utility of land
Complete restraint on alienation is void as a matter of publicpolicy
Modern Law
Where the language is ambiguous, modern law will construe asa Fee Simple Transfer
Fee simple will be favored as a matter of law
Language must be clear on its face or the intent to pass a feesimple will be favored
WasteIs always an issue when there is a remainder
Affirmative/Voluntary Present interest (owner) does voluntary acts that significantly
decreases the value of the property
Is liable to remainder man for voluntary waste
Permissive
Present interest does not do anything to protect the value of theproperty
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Allows property to deteriorate (inaction)
Can be non- payment of property tax, mortgage, relatedexpenses necessary to preserve the estate for the futureinterest holder
AbsoluteOnly limitation is the estate that defines it
Defeasible EstatesCan apply to Fee Simple and Life EstatesA condition prematurely ends this type of estate
Ex. O conveys to A and her heirs, so long as use is residential
Questions to Asko Who holds the future interest?
Transferor of the interest in land OR a third partyGrantor/Transferor retains the future interest then it is only 2types of estates
Determinable estate Fee simple subject to a condition subsequent
Future interest is a possibility of reverter in thetransferor/grantor
o What words are used to create the defeasible interest?
Words of time or duration (Fee simple determinable)o So long as, until, during, while
Words of condition (Fee simple subject to a conditionsubsequent)
o But if, provided that, however, on condition that
FeeSimpleDeterminable Expires automaticallywhen a stated event happens or
condition ceases to be met
Ex. O conveys to A, so long as A uses property for ahospital
Reverts back to O when land is no longer used as a hospital(determining event)
Always a future interesto Automatically reverts back to grantor or successor
in interest if the condition is broken
Estate is created using Words of Time
So long as, until, while, during
Subject to a Condition SubsequentDoes NOT automatically terminate the interest
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Grantor has a reversion as a right of entry
Must take additional legal steps to take the property back
Ex. O conveys to A on condition that A use property for ahospital
Estate is created using Words of Condition or Event
But if, provided that, however, on conditionthat
Types of Reversion
Possibility of Reverter
Determinable Estate
Right of Entry Estate subject to a condition subsequent
Mahrenholz v. County Board of School Trustees (208)
When unclear courts will favor a fee simple subject to a conditionsubsequent
o There is no automatic forfeiture of property
o Does not preclude owner from taking legal action to retain
property
Fee Simple Subject to Executory Limitation
Automatically expires when the condition is met
Ex. O conveys to A, so long as A uses for a hospital; thento B
Third party (B) does not have to do anything to get the property;is automatic
Automatic like Fee Simple Determinable
Right to Possession to a transferee, unlike Fee SimpleDeterminable
Equitable Estateo Created through a trust or given for the benefit of another
o Trustee has legal title
o Beneficiary has equitable title
O conveys Blackacre to A in trust for life, then to T
A has legal title
T has an equitable estateLegal Estate
Estate created through a deed or will
Restraint on Alienation Courts voids complete restraints on alienation
Will strike the portion of the grant that is complete restriction
Grantee will get whatever is left over
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Future Interests
Future Interests2 types
Can only be created by a grant (in themselves or someone else) or
will
Future Interest in Transferor
Reversion
Transferor, Grantor, or testator conveys estate less thanestate/interest that he possessed
No 3rd party to which estate will pass to
This is by operation of law
Ex. O transfers to A life estate
O has a fee simple absolute, and has transferred a life estatewhich is lesser than the fee simple. Therefore, by operation of
law, when As life estate ends, and since there is no 3rdparty,by operation of law, the property reverts back to O
Possibility of Reverter
When present interest is a fee simple determinable
Future interest is always a possibility of reverter in transferor
Language used are words of time: so long as, until, during,while
Present interest is automatically terminated once condition is nolonger met
Once interest is terminated and present interest continues tooccupy, then present interest is adversely possessing
Right of Entry
When present interest is a fee simple subject to aconditionsubsequent
The future interest in the transferor is always a right of entry
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Language used to create are conditional: but if, providedthat, however, on conditional that
Transferor retains a right to re-enter
Does not automatically terminate the present estate
Transferor must take additional action to re-claim the property
If present interest is still possessing property, adverse
possession does not start until transferor takes additional stepsto repossess the property
Future Interests in TransfereesFuture interest in someone other than Grantor
Remainder (4 types)
Created in 3rd
party that is capable of becoming a possessory interest uponnatural termination of the present estate
Vested
Created in a living, ascertainable person (must know who personis)
Cannot be subject to any condition precedentother thannatural termination of prior possessory estate (can be aconditional subsequent)
Condition Precedent the future interest must MEET acondition to GET the property
Condition Subject the future interest must MEET the
condition to KEEP the property
Indefeasible (must still meet criteria for vested )
Hallmark is itsAbsolute Certainty
Know that the future interest is certain to becomepossessory upon termination of the prior estate (becauseprior interest will certainly terminate)
Subject to Divestment (must still meet criteria for vested)
Subject to a condition subsequent
Must meet condition to KEEP the property
Interest will become possessory , but If condition isbroken, his interest is terminated
Subject to Openo Remainder created in a Class of persons
o Subject to open because class can expand or decrease
prior to present interest expiringo If B is alive, B can always have more children
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o Becomes indefeasibly vested remainder (changes once
class closes)o Once B dies (B can no longer have children)
o At least one person of the class must be
ascertainableThere must not be a condition precedent
Contingent
Subject to a condition precedent
Must meet the condition to GET the property
Ex. O to A for life; then to B for life, then to C
B must be alive to take the interest (B could die before A)
This is a condition precedentThis example, as far as Bs interest is correct as avestedremainder subject to divestment; for C it is acontingent remainder
Executory Interest (RAP does not apply)
Any interest that is not a Remainder
Is tied to a condition precedent
When condition is met it will then cut off the prior estate
Distinction between 2 type of interests hinges on ID of the personwhos estate is being cut off or divested
Cuts short the prior estateSpringing
Transferorsestate is cut short
ShiftingTransferees estate is cut short
Shifting
Present Estate | Future InterestO conveys A and heirs | but if C returnsfrom France then to C and Cs heirs
A is the transferee (shifting interest) because C can cut short As estate
C interest is a contingent remainder (has a condition precedent) Only way C can take is to cut off a prior interest
Springing
Present Estate | Future Interest
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O conveys A and heirs | if C returns fromFrance
Retains property UNTIL C returns from France
When C fulfills the condition, he takes the property cutting short Os interest
C cuts short Os estate
Contingent Executory Interest (RAP applies)o Can executory interest holders actions cut off the prior estate
o Is either Shifting or Springing
o When executory interest can do nothing to cut estate short is another
persono Ex. O to A as long as used for residential purposes, then to C
o C can do nothing but sit and wait
Must then ascertain if it is shifting or springing
Restriction of Future Interests
Must ascertain what type of future interest is
Destructibility of Contingent Remainderso Applies onlyto legalContingent Remainders
Legal - Created by a deed or will
Is a wait and see approach
If estate fails to vest, the contingent remainder is void
O conveys to A for life, then to B if B reaches 21, B = 10
Bs interest is struck if he is NOT 21 when As estate ends
B = 22o Can remove the contingency b/c it was met before
As deatho Does not apply to Vested Remainders or Executory Interestso Not to an Equitable Contingent Remainders
Created by trust document
If contingent remainder fails to vest at the natural termination of theprior estate, the contingent remainder is extinguished
o Ex. O conveys to A for life, then B if he reaches 21
o B is 6 years at As death; Bs contingent remainder fails to vest
at the natural termination of As estate; must strike through theremainder
o Property reverts back to O (because he had a FSA and only gave
A a life estate)
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Rule in Shelleys Caseo One instrument
o Creates a life estate (or fee tail) in land in A
o And Creates a remainder in fee simple in As heirs or (heirs of As
body)o
Life Estate and remainder are both legal or both equitableo Remainder becomes a fee simple (or fee tail)
You must strike through the LE, and there is now a FS in A.o Court says it is the same principle
o Ex. O conveys to A for Life, then to As heirs
Strike through to A for life, then to As
Still the same as O to A and her heirso Only applies if there is NO intervening estate
Ex. O conveys to A for life, then to B for life, then to As heirs
Bs estate intervenes, so Shelleys Case does not apply
Doctrine of Worthier Titleo When owner conveys to one party
o By the same instrument (same grant)o Conveys Remainder or Executory Interest in the owners heirs
o Then Owner retains the reversion and not the heirs
Ex. O conveys to A for life, then to Os heirs
Creates a reversion in O if O is alive at the natural termination ofthe estate
Do not know your heirs until your death; at your death goes toheirs
Doctrine of Merger
O conveys to A for life, then to B
The two estates merge and the lesser estate is extinguished
Since B has contingent remainder in Fee Simple Absolute, As lesser lifeestate is merged into Bs larger estate
A conveys to B
Can be a wait and see approach or may be determined at the grant
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Rule Against Perpetuities
Rule Against Perpetuities
No interest is good
Unless it must vest; if at all
Not later than 21 years after some life in being
At the creation of the interest
Rule applies to Legal or Equitable Documents (Will or Trust)
5 steps to evaluating RAP1). Determine if rule applies to the future interest
Rule only applies to 3 type of future interests:
Contingent Remainderso O conveys to A for life, then to B
Vested Remainders Subject to Openo Special Rule: All or Nothingo O conveys to A for life, then to As children
B, C, D (vested remainder subject to open)
Every interest in class must comply to RAP
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If one interest does not comply then itinvalidates everyinterest
Interest vests when the class closes
Class closes when A dies (cannot have anymore children)
Contingent Executory Interest
o Can still be shifting or springingo O conveys to A and heirs, but if A cuts down a tree,
then to B
Contingent executor remainderbecause B cannot do anything to cutoff the estate, B just sits there
O conveys to A and heirs, but if B returnsfrom France, to B
B cuts off As estate (must dosomething). This is a normalexecutory estate
Does not apply to future interests in atransferor
Does not apply to present interests2). If rule applies, when does perpetuities begin (life in being + 21
years)
Begins when instrument that creates the interestbecomes legally effective perpetuities period begins
Will becomes effective at DEATH of
A trust becomes effective only when DELIVERED tograntee
o Becomes effective when it becomes irrevocable
(by express terms or death of person
delivering the trust) Cannot be changed at this point
3). What must happen (what contingency must be met) for theinterest to vest or not vest?
What conditions must be met to vest?
When does it change from a contingent remainder to avested remainder (right to possession, not necessarilyimmediate)
When is the contingent remainder met
What must happen for it to forever fail or does it fail to bemet?
Ex. O conveys to A for Life, then to As first child to reach 30
2 conditions precedent: A must have children and thechild must reach 30
Interest vests when first child reaches 30 (what musthappen to vest)
Interest fails and never vest when A dies without children(what must happen to not vest)
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Cannot apply Doctrine of Destructibility (have to wait andsee if A has children)
o On exam just explain the rule that appliesO conveys to A and heirs, but if A cuts down a treethen to B and heirs1) If A cuts down trees, B interests vests
2). If A does NOT cut down any trees before his death,then Bs interest NEVER vestsMust figure out if either of those things will
happen
4). Determine each relevant life that may invalidate the interest
Must test each life
If one life invalidates the interest, then the entire interest isinvalidated
Technically can use any life, practically should use only livesthat affect vesting of the interest
Concurrent Ownership
Tenancy in Common[Characteristics]
o Simplest most common form of concurrent ownership
o Undivided fractional share in the present interest (parcel of land)
Separate BUT undivided interest in the WHOLE
Entitled to 100% possession of the property regardless oftheir fractional share of the interest
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o Each entitled to simultaneous possession and enjoyment of WHOLE
parcel
Unity of Possession is the Hallmark of TICo Can acquire interest at different times in different instruments
May be conveyed by deed or willo No right of survivorship
A & B are TIC; A dies; As TIC interest will pass to his devisees orheirs, NOT to B
[Creation ]o Any conveyance that devises to two (2) or more unmarriedpersons
Modern (Majority) Law Any transfer created in 2 or more unmarried persons is
presumed that a tenancy in common is created unlesslanguage is clear that a joint tenancy was meant to becreated
Common (Minority) Law
Under common law a joint tenancy is presumed unlesslanguage is clear that tenancy in common is beingcreated
Must use the words Joint Tenancy with Right ofSurvivorship
Ex. To A and B, jointlyThis is a tenancy in Common; language is not express
enough to be JTIntestate Succession
Arises (be created) involuntarilyEx.
o D has FSA; dies intestate and leaves 3 children
(E,F,G) as surviving relativeso Each child has 1/3 interest as TIC with each other
Other Situationso TIC is created when a joint tenancy is severed
o TIC is created when a divorce ends a Tenancy by
the Entirety
[Transferability]
Either party has right to sell, mortgage, lease or transfer interestwithout consent of the other co-tenants
Transfer of interest DOES NOT terminate the tenancy in common A Co-tenant in common may devise or allow his interest to
descend by intestate succession
Joint Tenancy With Right of Survivorship[Characteristics]
Each tenant has an undivided share in the entire parcel
Right to 100% simultaneous possession of the entire parcel
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Each party is free to transfer the interest
Right of Survivorship (Unique to Joint Survivorship) Hallmarkof JT
When one co-tenant dies, his interest is transferred (merges) tothe living party by operation of law
Exceptions If both owners die simultaneously
o Estates is severed and becomes a Tenancy in Common
(with NO right of survivorship)o C & D have interest that passes to heirs or devisees
Exceptions - Public Policy If one co-owner causes the death of the other, the Joint Tenancy
is severed.Ex.C murders D (Estate now becomes a TIC)
C gets interest as TIC, Ds interest passes to his
heirs or devisees
[Creation of Joint Tenancy]Common Law
Four Unities - Creation of a Right of SurvivorshipDefault setting at common law if all four unities are presentMust meet all four conditions OR a Tenancy in Common is
created (by law)
Unity of TimeInterest must be acquired at the exact same time
Unity of Title
Interest must be acquired by the same instrument (will, deed,or joint AP,etc)
Unity of Interest
Each interest must be identical fractional shareo No different fractional shares
Unity of Possession
Each interest must have the same right of possession
Cannot be a restriction on use
Language used to Create (sufficient to create)
To E and F as Joint Tenants
To E and F as Joint Tenants with Right of Survivorship
Ex. To A and B, jointly
This is a Tenancy in Common; language is not expressenough to be JT
[Transferability]o Inalienable
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o Right of survivorship ends a joint tenants interest
Interest cannot be devised or descend by intestatesuccession
Severance of Joint Tenancy [Generally]
Can sever without consent (sometime knowledge) of other co-
tenant Joint tenant conveys interest to a 3rd person
Must sever one of the unities
Transfer/conveyance severs unities of time and title
Becomes a tenancy in common with the other owners atthis point
Can only be severed during lifetime
Cannot will the interest
No longer a Right of Survivorship
Can transfer title to yourself using a strawman
Strawman is a disinterested 3rd party who re-conveyed
the land back to the grantee This severs unity of time and of title
Converts to a tenancy in commonModern (Majority) Law
o Can sever the JT Ten by transferring to yourself
Do not need a straw person nowo Basically severs unity of time and title
o Have now acquired your interest at a different time and by a
different instrument
Problemo A,B,C (joint tenants)o C conveys interest to D (D is now a TIC with A & B)
o A & B are still JT Tenants
o If A dies, her share is merged to B (survivorship), but B is
a TIC with D
Tenancy by the Entirety[Characteristics]Common law
Abolished in most states
Under this law, H &W could not hold title as TIC or JT; wife
had no legal existence as a person Any conveyance to a husband and wife was deemed to be a
Tenancy by the Entirety
Title vested To the husband/wife as a collective unit
No respective/separate shares
Still need the four unities + MARRIAGE
Unity of Time, Title, Possession, and InterestRight of Survivorship
Can be terminated
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[Creation]
Recognized in about half of the states
Still follow common law presumption that marriagecreates a TBE
In other jurisdictions, intent to create must be clearly expressed
Most still require 5 unities: time, title, possession, interest and
marriageException:
One spouse can create a tenancy by entirety by directconveyance to both spouses even if unities of time andtitle are absentEx. W has FSA; can convey as :To H&W as tenants byentirety
[Transferability]
Couple as a unit owns entire estate
Traditionally, consent of both spouses required to convey estate
Historically, husband can transfer his right of survivorship, rightto lifetime possession, subject to wifes right of survivorship
Married Womens Property Actso Adopted in all common law marital property states
o Eliminated husbands exclusive right of control
o Either spouse has power to manage and control marital
property
Termination/Severance of Tenancy by the Entirety & Right ofSurvivorship
Death of a Spouse
Divorce (Remarriage does not AUTOMATICALLY
restore a TBE; must be a re-conveyance) Mutual agreement to sever - Transferred by spouses
togethero One party cannot break the unities or transfer
o If one spouse murders the other, TBE is severed
Murderer cannot enforce right of survivorship
Must look at where severances occur
2). T devises to A and B as joint tenants for their joint lives, remainder to thesurvivor
o Life Estate Per Autrie Vie (present estate)o This is a Tenancy in Common, they both have each have life estates in
the othero No survivorship mechanism in a Life Estate
o Only thing that gives a survivorship is the future estate conveyed
o Future interest is the remainder in the survivor
Can only use present interest to determine the interest
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Majority Rule
Cotenant is normally entitled to exclusive use of co-tenancyproperty w/o duty to compensate other cotenants
One cotenant does not owe rent to another cotenant
Each tenant has exclusive right to the property
One cotenant cannot maintain an AP claim against theother cotenant
Exception (to payment of rent to cotenants)Principle of Ouster
Occurs when a cotenant in possession refuses the request ofanother cotenant to share possession of the land
Occupying cotenant is liable to other cotenants for rent
Characteristics of Oustero Must make attempt to gain access and be refused
Denied access includes changing locks, usingproperty so that no use can be made of any other
part of propertyo Must show intent to exclude other cotenants
o If one tenant simply demands that cotenant in possession
pay rent, ouster has not occurred (must be demandingpossession not rent)
Adverse Possession
If Ouster occurs, cotenant in possession may begin start an APclaim against the cotenant not in possession (combined mustshow acts inconsistent with concurrent ownership)
Statute of Limitations begins to run for AP
Contribution
One cotenant seeks reimbursement from other cotenants for prorata share of expenses that complaining cotenant has paid (if hehas paid more than his pro rata share)
Taxes, mortgage payments, repairs/improvements
Can demand contribution after cotenants refuse to pay their prorata share
Accounting
Co-tenant can solely possess and keep profits generated fromSOLE possession
Once leased/rented to 3rd party he must account forprofits and share with co-tenants
Rents Received and Profits for use of Property
Each cotenant is entitled to his/her prorata share of rentsreceived from a 3rd party for use of the land
Co tenant collecting rent payments may offset costsassociated with generating/collecting rent
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Include amount expended on taxes, interest,mortgage principle, insurance
Taxes, Mortgage paymentsGeneral Rule
All cotenants are obligated to pay their proportionateshare of mortgage, tax and other payments that could give riseto a lien if unpaid
If one cotenant pay more than pro rata share, he mayrecover through a contribution action
Special RuleCotenant in Sole Possession
Cannot recover for payments unless exceed reasonablerental value of the property
Repairs, Improvements, Maintenance
Majority RuleCotenant who pays for repairs/improvements is not entitled tocontribution from other cotenants absent a prior agreement
RationaleCotenants may disagree over necessity, character, extent and
cost of repairsException to General Rule
WasteCo tenant cannot do anything on the property that constitutes
waste
Partition
Settles disagreements between cotenantsCan sell interest or institute partition action
Partition in Kind Actual physical partition of the property
Distributed according to interest
Favored over Partition by Sale
Partition by Sale
Easier and simpler than Partition in Kind
Done when partition in kind is impracticable
Oweltyo Payment by other cotenants to the other cotenant equalize value of
what is being partitioned
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Marital Property Interests
Common Lawo Husband and Wife considered a unit
o Not divisible at common law
o Existence of Wife was suspended during marriage
o Lost legal identity
Did not have legal right as a person to control her own property
Once married became property of husband
Viewed as inferior morally, mentally Needed husband to provide her with maintenance
Rights During Marriage
Husband obtained Life Estate if wife came into marriage withproperty
Property acquired during marriage became the husbands
Wife only entitled to keep personal property (clothing, jewelry)
Husband had sole possession of property without wifes consent
Had sole right to profits received from property during marriageor lifetime of both spouses
Wife could regain control over land only upon divorce orspouses death
Rights Upon Divorce
When divorce occurred was divided according to who held titleto property
Wife only had title to any property that was not sold beforemarriage
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Wife only entitled to alimony or support onlyifnot cause of thedivorce
Blameless wife was entitled to alimony
Rights Upon Death
When husband died only children could inherit; wife could
not Wife entitled to Dower
Entitled to 1/3 husbands qualifying realproperty
Kept wife from being disinherited
Only entitled if she had children from themarriage
Without Wifes consent, Husband could not transfer all ofhis interest nor could creditors seize to satisfy his debts
o Any transfer was subject to 1/3 interest of wife
(dower)
Wife could only use and enjoy the 1/3 during her lifetimeo Could not dispose of it through will
Curtesy
If Wife died, then property passed to her estateo Husband had LE; entitled to receive curtesy
Gave him life estate interest in wifesproperty
Would be disposed of at his death throughwifes estate
Only if marriage produced issue capable ofinheriting wifes lands
Traditional Viewo Property was retained by spouse who acquired it
o Husband still got everything in the Divorce
Modern ViewsEquitable Distribution
Followed by majority of states
Property acquired during marriage is equitably (fairly)distributed when divorce
Other than property acquired by gift
Property acquired prior to marriage remained separateproperties
Community Property Approach
Minority view 8 states (California)
All property acquired during marriage is community property
Will be divided equally
To avail oneself of this principle; must have a ceremonialmarriage
No common law marriage, cohabitation
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Sawado v. EndoIssue: Whether a TBE was subject to levy when one tenant died
Deed is effective when deliveredNOT when recordedo Married Womens Property Acts abrogated husbands dominance over
marital estateHawaii followed MWPA majority position
Interest of the husband or wife in the estate by the entirety is notsubject to claims of his/her individual creditors during joint live s of thespousesCannot lien up the property
In re Marriage of Grahamo Issue: What is marital property? Is education subject to division?
o Wife supported husband through 2 degrees
o Husband got well-paying job and left he wife
o Wife asked for half of his degrees
o Trial Court found that education obtained by one spouse during
marriage was jointly-owned property
o Court of Appeals reversed Education itself is not property
Said does not have attributes of property
Not divisible, devisable, inheritable, saleable, transferable, etc.o Wife not asking for alimony or value received from the degree, but the
degree itself
Elkus v. ElkusIssue is whether her increased earning potential is subject to marital
distribution
Landlord/Tenant
Leasehold Estates/InterestsTenants Rights
Right to immediate possession & occupy that which he is leasing For fixed period of time
Right to use and enjoyment
Right to enjoy profits from the land (such as a Life Tenant)
Cannot commit waste
Right to Exclude others
Includes the LandlordLicenses
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Do not enjoy all the rights of leasehold
Right to use
All licenses are revocable unless stated otherwise
Can be evictedEx:
o A buys a ticket to see a play
o Renting a hotel roomo Renting room in an extended stay hotel
Leaseso First point of Attack for resolving a conflict
o Leases are governed by Contract Law vs. Property Law (at Common
Law)o If silent on a particular matter must look at statutes
o If statutes are silent then must go to case law
Statute of Fraudso Provides that any contract (including lease) for more than term of oneyear must be in writingo Ifmore than one year without a written document, is not valid
o Oral agreements undera year do not have to be in writingo A month to month that continues for more than one year does not
have to be in writingo Unless agreement at start that month-to-month it will be more
than one year
Compliance with Statute
Must be In writing
Must have description of property subject to the lease
Must know the term of lease
Must be signedo Some states require signing by both parties (practically)
o Some require signing by party against whom you seek to
enforce the leaseo If landlord is seeking enforcement against tenant, tenant
must have signedo If tenant is seeking to enforce against landlord, landlord
must have signedo Does not make contract void, just means that you have
agreed to terms (basically a one-way contract)
Court Determinations of a leasehold or license
Looks at how much control person has over the area
Looks at Occupation of the area
Looks at language in the contract that defines the relationship
Non-Freehold EstatesTerm of Years
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Key Characteristic
Will continue for a designated period of time Must be fixed in advance (At start of tenancy)
Must able to compute duration from language (if no datesspecified)
Must know definitely when it will end
Must have specific start and end date Can be for months not necessarily years
Termination
Automatically expires on its end date (no notice required)o Not renewed unless language in
contract/agreement stateso If tenant remains is now a holdover tenant
Issues to consider: Trespass, AdversePossession
Clock for AP begins to tick
Landlord must take steps to evict holdover
tenant Landlord has 2 options:
Treat as Trespasser
Hold as new tenant to new leaseEx.
Commercial LeasesSome Residential Leases
Periodic Tenancy
Initial fixed period of time
May be month-to-month (residential), year-to-year
Terminates at end of each period with automatic renewal
Continues for equal periods of timeMay arise by implication
Based on conduct, absent an express agreemento Taking possession; paying rent
Termination
Notice is necessary (by landlord OR tenant)
Governed by Statute todayo 30 or 60 day notice must be given by either party
to terminate a periodic tenancy (oral or written)o If not in lease, must look to statute
Continues until tenant or landlord terminates through
notice
Tenancy- At- Willo Generally has no fixed duration
o Endures as long as tenant or landlord desires (at-will) (Common
Law)o May not be a lease to look at, must look at language that
created agreement
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Once tenant makes decision astrespasser he is stuck with the option
If landlord decides to hold as a newtenant he cannot later evict before theterm is expired
Garner v. Gerrish (Tenancy -at -Will )o Gerrish felt he had a Life Estate (freehold estate)
o Gerrish rented a house from Donovan and Donovan dies
o Executor evicted Gerrish
No end date (Not Term of Years)
No indication of renewal (No periodic tenancy)
By Default is a Tenancy at Will
Issue: Whether should be construed that only tenant canterminate or is there a reciprocal right for landlord to terminate
If Landlord has sole right to terminate a tenancy at will, bylaw then tenant also has reciprocal right to terminate(even though not explicitly stated)
Court said there was no symbolic delivery of land (liveryof seisin)
o Delivery of dirt, twig something from the land
o No longer necessary to do this to create a freehold
estateo Court said was a determinable estate (for so long
as)o Contract gave him right to live there so long as he
chose and paid rent
Crechale & Polles, Inc. v. Smith (Tenancy at Sufferance)o Accepted rent payment after trespasser/eviction/expiration of
leaseo Showed intent that he was creating a new lease
o Court said actions contradicted eviction language (get out)
o Once choosing one of the options as to how to treat holdover
tenant, he is held to that option
Selection of Tenants at Common Lawo Landlord can select anyone for any reason
o Could also refuse to rent to anyone for any reason
Fair Housing Acto Landlords cannot now discriminate on basis of sex, religion, race,
handicap, natural origin, familial statuso Cannot discriminate against a protected class (children are not a
protected class!)o Generally only apply to single family homes sold without assistance of
a real estate broker or agent (can discriminate)
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o Owner occupied with four or less units you cannot discriminate
Delivery of Possession (Landlord must deliver to Tenant)
Majority View (English)o Must deliver legal possession and actualpossession
If someone else is legally in possession of space or has legalright to possession, then landlord has not delivered to you legalpossession
Common LawMinority View (American View)
Under minority view, only have to deliver legalpossession
Not required to deliver actualpossession
If a holdover tenant is there, then YOU, not landlord has toevict the holdover tenant
*Tenant is still obligated to pay rent and perform his obligations under the lease*
Landlord/Tenant Transfer of Interests
AssignmentDefinition
Transfer of tenants existing lease to a 3rd party
Transfers his entire interest and leaves nothing for himselfTwo Privities Created
Privity of ContractPrivity of Estate
SubleasingDefinition
Wholly new lease between a tenant and a 3rd party
Reserves a portion of interest for himself with a right of re-entry/reversion
Ex. Transfers a term of years of 9 years and 364 days andreserves 1 day (less than the 10 years of his original
lease)Majority Rule - All or Nothing Test
o If a right of re-entry or reversion exists then is a sublease
o If transfers entire interest than is an assignment
Privity of Contracto Contract Law concept
o Assignment creates Privity of Contract
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o Once gives entire interest in estate, the assignment breaks
privity of Estateo B assigns to C (privity of K)
o If C fails to pay rent, B has options
B can sue; still in privity of contract
Unless B has an express release from A; he is still
obligated to Ao Even if A consents to assignment, then B is still
obligated to A
Privity of EstateA leases to B (leases portion of interest; not giving entire interest)A can sue C for any provision under the contract that touch and concern
the land (rent)
Express Release (novation)
Assignment Assumptiono Expressly assumed all the obligations
o B is still obligated to A unless A expressly releases
Multiple Assignmentso C assigns to D (gives entire interest); D fails to pay rent
o Any Privity of Estate C had with A and B moves to D
o A can sue B under Privity of K
o A can sue D under Privity of Estate
o A cannot sue C (no relationship left since C assigned his interest to D)
No relationship between B and D
B can sue Do C can sue D
Subleases ScenarioPrivity of E Privity of EPrivity of K Privity of K (Lease) (Sublease)
A--------------------------------------B----------------------------------C
o A leases to B (Privity of Estate & Privity of Contract)
o B subleases to C (whole new lease between B & C; B is Cs landlord;
new landlord/tenant rel)
Both Privity of Estate & Privity of Contract (because newrelationship was created)
o If C does not pay rent:
B still on hook to A for rent
A cannot sue C directly for failure to pay rento If C pays B and B is not paying A; C is not in contract in A
A cannot evict C; A must evict B
When main lease terminated so is sublease
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Any tenant under B is evicted
C Assigns to D:
Privity of Estate is now between B and D (severed between C & B)
Only privity of contract between C & D
B now in Privity of Estate and Privity of Contract with D; then D=no rent
Assignment Provisions Right to Assign or Sublease
o Tenant is free to assign, sublease or transfer absent an agreement to
the contrarySole Discretion Clause
o Can be at Landlords sole discretion
Landlord can refuse assign/sublease for any reason or no reasonat all
Cannot refuse on basis of race, gender or other protectedclass
o Silent Consent Clause - Lease is silent
May assign without Landlords consent
In terms of transferring interesto Lease cannot be assigned or sublet (express)
Construed very narrowly and literally
Against alienation concept
Court allows to certain extent (will strictly construe expressprovisions)
Does not prevent from subleasing, mortgaging, assigningunless EXPRESS in the lease
o Tenant can assign; Landlords assignment cannot beunreasonably withheld
Must be a reasonable explanation for withholding consent
Must be a commercially reasonable explanation (question offact)
Creditworthiness
Not using premises properly, appropriatelyLeasing without consent
No standard tied to it
When this is so courts impose a commercially reasonablestandard
Commercial LeaseWill imply a reasonable standard
Residential LeaseCourt is split as to sole discretion standard or reasonable
standardMore reason to deny under residential
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Rights of Tenant and Obligations of Landlord
Common Law Foundation
Is there a leaseo Must always look to lease for any Landlord/Tenant relationship
Must ascertain whether commercial or residential lease
What common law principles apply regarding L/T issues
What modern law principles apply regarding L/T issues
Duty of Repair No Leaseo If no lease (lease is silent)
Common Law principle
Duty to repair is on Tenant Landlord had not dutyo Caveat Emptor (Lessee beware)
o Tenant has affirmative duty to fix/cannot refuse to fix (principle
of waste commercial lease) Minor repairs
Modern LawDistinction between commercial and residential lease
Commercial Lease
Tenant has duty to repair
May include duty to rebuild
Looks factorsResidential LeaseImplied Warranty of Habitability&Implied Covenant of Quiet EnjoymentProtected by these 2 principles
o Only minor repairs
o Only duty to tenant is duty to make minor repairs because
of Implied Warranty and Covenant
Lease assigns obligation/duty to tenantCommon Law
oTenant must repair Lease expressly provides
oNo difference between commercial lease and residential lease
o If premises totally destroyed tenant had obligation to rebuild
Does not matter who is at faultCommercial Lease
Tenant continues to have obligation to repair which includes
obligation to rebuild Courts look at these factors whether to apply that obligation:
Cost of repair in relation to rent being paido If exceeds rental value, court may not order tenant not to
rebuildo Length of lease
o Look at parties intent
Residential Lease
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oDuty to repair
oOnly duty to make minor repairs; not duty to rebuild
Lease assigns obligation/duty to landlordCommon Law
o No distinction between commercial lease or residential lease
o
Landlord had obligation to repair Of no consequence to tenant; if Landlord refused to repair
Each provision was independent of each other
Only right is to sue landlord and seek damages; could notstop paying rent or terminate lease even if premises totallydestroyed
Modern Lawo If landlord refuses to meet obligations under lease
No distinction between commercial or residential lease
All lease provisions considered dependent on each other
If landlord refuses one provision, tenant can refuseanother (L does not repair; T can refuse rent)
Tenant has 2 options:Constructive Eviction and Implied Warranty of
Habitability
Constructive Eviction (most widely used in commercial leases)(Applicable to Covenant of Quiet Enjoyment, not Warranty of Habitability)
Must meet these 2 elements
Only situation where tenant can exercise these option when landlordrefuses to meet obligations under lease (express or implied)
Substantially interferes with use and quiet enjoyment
Tenants OptionsCan terminate and moveStop paying rentStay and seek damages
Measured by fair rental value when expenses exceed rent andother expense
Must take 3 stepso Must give landlord notice
o Must allow landlord reasonable time to cure the defect
(depends on defect)o If not cured after 1 & 2, must move out (within reasonable
time to sue for damages)
Include moving expenses, cost to rent newpremises (including commissions that need to be paid)
Offset damages
Occurs when landlord wrongful conduct substantially interfereswith tenants use and enjoyment of property
There must be some duty or obligation on landlord
If there is none, then no constructive eviction
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Standards for Constructive Evictiono What is the wrongful conduct of Landlord?
Can be affirmative act that interferes
Ex. Changed locks and tenant not given keys
Landlord may fail to do something legally obligated to doo Is Landlord responsible for acts of 3rdparties?
Generally not responsible acts of 3rd parties thatinterferes substantially with tenants use andenjoyment
Exception
Landlord must have the legal right to control 3rd partiesconduct
Substantial interferenceMust be of a substantial interference that a reasonable person wouldconclude makes property uninhabitable
o Interference does not have to be permanent; can be temporary;
does not have to be complete
No heat in Winter; toilet does not work but rest ofpremises is usable
May not be an affirmative obligation on landlord butWarranty of Habitability gives him that obligation (whetherexpressly stated or not)
If Tenant is aware of some conditions that ordinarily is aSI, may have waived his right to constructive eviction
Must exercise right to say repair before I move in
Implied Warranty of Habitability (all residential leases contain) Landlord must deliver the premises in habitable condition and must be
maintained throughout the lease If landlord violates this warranty (implied in every lease)
Even if affirmative on tenant for minor repairso Warranty of Habitability cannot be waived
When landlord breaches the duty, tenant can:o Make repairs (while still in premises) & Offset rent
o Terminate and sue for damages
o Stay in possession and sue for damages
o Remain and withhold rent
Factors that constitute a breach
Broken windows, leaky roofs, defective locks, lead-based paint,broken toilets, pipes, plumbing, defective wiring, lack of hot water,mold
Must give landlord noticeoNotice must be specific enough to inform landlord of defect
o Landlord must be given reasonable time to cure defect
o If tenant does not give notice or give reasonable opportunity to
cure:
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Landlord Responsibilities for Tenant InjuriesModern Law
Liable under general principles of Tort Law (negligence theory)
Self- Help
Self-HelpCommon Law Commercial Lease
Landlord may exercise self-help
Landlord must be legally entitled to possessiono Tenant breaches lease and it contains a re-entry
clause
Landlords self-help method must be peaceful
If a potential breach of peace, law will not accept self-help
Tenant
If he has not relinquished his possession (abandonment),no self-help method is peaceful
o Must look at the intent
Law usually frowns on self-help methods
Mitigation (Sommer v. Kreidel)Common Law (decided under principles of property law)
Mitigation is not required
Landlord can sit for entire lease and sue tenant for entire leaseModern Law (decided under principles of contract law)
Landlord cannot sit by idly and not lease the premises (build updamages)
Must mitigate damagesConstructive Eviction
o Substantially interferes with use and enjoyment
o Use constitutes what tenant would use the property for
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