Outline Temp

8/3/2019 Outline Temp

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I. Discrimination in Leasinga. Traditional model of lease as conveyance allowed landlords to exercise complete discretion in

choosing its tenants (this is part of the right to exclude that comes with ownership of property)

b. Civil Rights Act of 1866 stated that all citizens have right to inherit, purchase, lease, sell, hold, aconvey real and personal property

c. Fair Housing Act-banned discrimination in housing based upon race, color, religion, and nationorigin (subsequent amendments have extended it to gender, familial status, and handicapped

status)

i. Familial Status: parents or a parent with dependent children under the age of 181. Why would a landlord want to discriminate against familial status?

a. Noise, inability to pay, damage issues, heightened sense of liability withyounger children

i. this all affects the landlord and the potential for their income (afinancial impact)

2. Reasons why Congress included familial status?a. family doesnt get housingb. discouraged from renting in a particular buildingc. might prevent families from educational opportunites to rent or buy in a

place with better educational opportunities or accessibility

d. main policy decision deals with the health, safety, and welfare of childrene. if families are systematically deprived to access of rental places, this poses

health and safety concerns that reflects on risks of the healthy developme

of children

f. want to encourage the integration of children of different races andeconomic backgrounds (this reduces racial tension)

ii. Handicap means (1)a physical or mental impairment which substantially limits one or moof such persons major life activities (2)a record of having such impairment (3)being

regarded as having such impairment (the term does not include current, illegal use of o

addiction to a controlled substance)

iii. FHA: an example of federal law that has placed restrictions on the methods owners canuse to find a tenant or buyer of real property

iv. FHA applies to all state and local gov, but the Act itself specifically exempts anyreasonable local, State, or Federal restrictions regarding the maximum number of

occupants permitted to occupy a dwelling

v. Exemptionsto FHA: group homes, religious organizations and private clubs, and anyreasonable local, State, or Federal restrictions regarding the maximum number of

occupants permitted to occupy a dwelling

vi. 2 federal laws that are significant:


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1. Section 2 of the Civil Rights Act Section 1982-there can be no racial discriminatiofor the rental or selling of real property

2. Fair Housing Action-bans discrimination in housing based upon race, color, religinational origin, gender, familial status, and handicapped status

a. *owner cannot put out an ad discriminating in such a manneri. when looking at an advertisement, the ordinary reader test is

applied: where the ad suggests to an ordinary reader that a particu

protected group is preferred or disrespected for the housing in

question

b. *owner cannot make favorable or unfavorable terms based on any of thesprotected categories

c. *owner cant misrepresent the status of the propertyd. *if renter or buyer is qualified after an offer is made, landowner cannot

refuse to sell or rent to the buyer

e. Landlord cannot advertise his or her own preferenced. Both Fair Housing Act and Civil Rights act discuss discrimination in housing based on race

i. However, Civil Rights Act only deals with race with regard to discrimination in housing(does not address gender, handicapped, etc. that FHA covers)

1. for example, if I am a woman, I would file under the FHAii. if any discrimination in housing claim falls under any of the protected classes other than

race ,must file under the Fair Housing Act

Easement

What rights are given? Does the person have the right to use someone elses land or do they have tright to restrict the use of someone elses land?

Here, since the facts tell us that.we know it is a

o Affirmative Easement right to make some limited affirmative use of land possessed by anoth(crossing over land to gain access to an adjacent tract

o Negative Easement limits the use of anothers landWe can also tell right away that this easement is an appurtenant or in gross.

o Appurtenant the owner of one parcel (dominant) has a right to use (or restrict the use of)another parcel (servient).

o In Gross gives its holder the rights to land without regard to any other parcel of land.The first issue is, was the easement properly created. Easements can be created one of four ways, by

prescription, implication, necessity, or by grant.

o Grant since easements are interests in land, they are subject to SOF and thus must be inwriting.

2 ways to create:


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by grant where the grantor executes and delivers to the grantee an instrumentconveying an easement over the servient land OR

by reservation where the grantor executes and delivers a deed conveying apossessory estate in the servient land to the grantee, but reserves for themselves

easement over the servient land

o Implied Easements law implies an easement in favor of one of the parties to a deed even ththe deed itself fails to create an express easement

Easements implied from Subdivision Plats Developer subdivides parcel of land, a purchaser is left without access to a

neighborhood street

Courts imply appurtenant easement presume that A bought the lot in relianceupon she could legally use neighborhood streets to reach lot

Implied Easement of Necessity when the owner of one parcel conveys part of the lanlandlocks a parcel in the process, and fails to create an express easement

Necessity must exist at the time the two parcels are first severed and must be frocommon ownership.

Once necessity is gone, no more easement If you buy a property that has access at the time, but later is landlocked, no claim

to an easement of necessity

Policy: the subdivision of land should not render a portion of it less usable Law assumes that reasonable person must have assumed that landlocked parcel

had access over other parcel, otherwise wouldnt buy it

Courts disagree on what level of necessity is required, some say reasonablenecessity, some say strict

Some states have statutes that allow owner of landlocked parcel to pay servientowner for an easement; implied easement dont have to pay (implied in price)

elements:o a common owner severed the property (unity of ownership)o the necessity for egress and ingress existed at the time of the severance (

severance of the property caused one of the parcels to become landlocke

o the easement is strictly necessary for egress from and ingress to thelandlocked parcel

most courts interpret the term to mean strictly necessary for theeffective use of the property

implied easement based on preexisting use deed that subdivides a parcel of land msometimes fail to address the rights of parties w/ respect to uses of that land that

occurred prior to subdivision

From Bobs Ready to Wearemphasis on parties intent at time of severance


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o First have to establish the use sought to be imposed happened when bottracts had a common owner

o Then apply factors to find intent: Claimant grantee or grantor (courts favor grantee) Is it reasonable necessary (any other entrances/is there $ loss) Are their benefits to both parties? Manner of use before conveyance Prior use known to parties in present litigation

o Prescriptive Easement - an easement may be acquired by meeting the elements of adversepossession (Lost grant theory has fallen out of favor protected use of land if allowed by true

owner for a long time).

Continuous use for the statutory period - Open and Notorious - quite visible pattern of use Actual use quite literal pattern Hostile use presumption is that use was adverse (policy: supports party making

use of property).

o Policy: this supports the party that is making use of the property, encourao Exception: if servient land is wild, unenclosed, or unimproved then

presumption is permissive

Policy for: conservation purposes, owner may have bought prop foinvestment purposes, plus owner cannot be expected to have been

aware of invasion

o Exception: (Simmons Rule) if owner of real property constructs a way overfor his own use and convenience, use by other which doesnt interfere wit

his use will be presumed to be by license or permission

Policy for: encourages good neighborly relations (neighbors mightbuild their own fortresses otherwise), discourages litigation, use is

not control of land.

Policy Against: No way of knowing when permission was granted awhen not (also dont know if revoked), doesnt define what joint us

entails (slippery slope)

o Melendez found that adding on to a road infringed and constituted hostilto owner even though he created part of the road

o Licenses and easements by estoppel once granted, easement not revoacable (unless terms sit can be)

License contractual or permissive right to use/occupy land of another Revocable if revoked licensee cant get an injunction, but may sue for boc Irrevocable License based on detrimental reliance


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o If licensee incurs substantial expenses (with knowledge of owner) in relianupon continued use of license, can argue for estoppel

o Bobs Ready to wear granted irrevocable license, made improvements wknowledge of owner.

Next issue, was the use of the easement within its scope:

o Generally, disputes over scope of an easement will be governed by the intention of the parties the creation of the easement

"Rules of Reason" are employed when intentions of the parties are unclear (from LazyDog)

Owner of the servient estate may make any use of the burdened property that dnot unreasonably interfere with the enjoyment of the easement by its owner for

intended purpose;

The owner of the easement may make any use of the easement (includingmaintenance and improvement) that is reasonably necessary to the enjoyment of

the easement, and which does not cause unreasonable damage to the servientestate or unreasonably interfere with the enjoyment of the servient estate.

determine the rights of the respective landowners according to a reasonablenessstandard; presumed that parties did not intend unreasonable use of the easemen

o General Rule for express easements: disputes over the scope of an easement will be governed by the intention of the parties

the creation of the easement

o Default Rules for express easements:

Generally, the owner of the servient estate may make any use of the burdened propertythat does not unreasonably interfere with the enjoyment of the easement by its owner f

its intended purpose

conversely, the owner of the easement may make any use of the easement(including maintenance and improvement) that is reasonably necessary to the

enjoyment of the easement, and which does not cause unreasonable damage to

the servient estate or unreasonably interfere with the enjoyment of the servient

estate

essentially, both the easement holder and the servient land owner can use the easemenso long as their use does not unreasonably interfere with the others use

o Default rules for implied easements: easement implied by necessity: would look at circumstances that gave rise to the

easement; determine scope by the extent of the necessity

easement by prior existing use: look at the nature of the prior existing use to determinescope

easement by prescription: look at scope of easement within statutory periodo

when given a question dealing with scope, know:


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the nature of the use as it was originally intended the duration of the use whether the use of the easement was exclusive or nonexclusive the intensity of the use responsibility for the maintenance of the easement what type of easement it was: appurtenant, in gross, implied, express, prescriptive

o Maintenance of Easements General rule: dominant easement owner has the right to maintain the easement in a

condition that is suitable for passage (they can maintain it so they can use it, but are no

obligated to maintain it)

when both parties use the easement, the cost of maintenance will be apportioned betwedominant and servient owner

first look at the intention of the parties for the maintenance of an easement, if cantdiscern then use default rules (if deed is ambiguous, parol evidence may be considered

ascertaining the parties intent)

2 default rules: if the servient owner does not use the easement, then the easement holder is

responsible for maintaining the easement

if the servient owner also uses the easement along with the easement holder, theboth share the responsibility and expense associated with maintaining the

easement

Remedies of an easement holder if the servient owner does not live up to responsibility maintain easement:

Easement holder can bring suit to recover what easement holder spent Easement holder can exercise their right to maintain easement, and then recover

their expenses from the person who is responsible for maintaining the easement

(entitled to setoff of expenses

o Change and Expansion of Use of Easement where the servient owner retains the privilege of sharing the benefit conferred by the

easement, it is said to be common or non-exclusive and therefore not subject to

apportionment by the easement owner

the term exclusive refers to the exclusion of the owner and possessor of theservient tenement from participation in the rights granted

an exclusive easement is transferable and divisible a non-exclusive easement is only transferable


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transferability focuses on the easement holders right to substitute a new easement holdin its place; by contrast, divisibility focuses on the easement holders right to allow

additional parties to share in the easement holders use of the servient land

common law rule for easements in gross: belongs to a person (personal to the holder),therefore not transferable

exception: commercial easements in gross are alienable and transferable the owner of an easement may license or authorize third persons to use its right of way

for purposes not inconsistent with the principal use granted

*also, if it does not increase the burden on the servient estate beyond the scopethe intended and authorized use

General Rule: an easement appurtenant to one parcel of land may not be extended by towner of the dominant estate to other parcels owned by him

Policy: this could increase the burden on the servient estate you can only use the easement for the benefit of the dominant parcel and canno

extend the easement to other subsequently acquired parcels

if an easement is appurtenant to a particular parcel of land, any extension thereoto other parcels is a misuse of the easement

o if you misuse the privilege, you lose the privilegeo misuse of the easement is a trespass

Balancing of harms: although there is misuse of the easement, if there is no added burdplaced on the servient estate, and the Plaintiff spends lots of money developing the thir

parcel that did not have the actual right to use the easement, the court could order an

equitable estoppel, or detrimental reliance

o Termination of Easementso Termination by Merger

The merger of the dominant and servient estates (i.e. when both estates are owned bythe same person) terminates an easement

An easement is a right to use another persons property. Once a person gains concurrenownership of both the dominant estate and the servient estate, the estate merges and t

easement disappears. If the common owner later severs the property, the old easement

does not reappear automatically. A new express or implied easement may be created on

later severance, of course.

because an easement is the right to use the property of another, you no longer need aneasement because you are the owner of the property

o Termination by Prescription If the owner of the servient parcel occupies it in a fashion that wrongfully interferes with

the easement, and maintains this interference adversely to the holder of the easement f

the statutory period for prescription, the easement is extinguished


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If the servient landowner engages in sufficiently open and notorious acts adverse to theeasement that continue for longer than the statute of limitations for acquiring prescripti

rights, the easement is terminated by prescription. In this circumstance, whether the

easement holder intended to abandon the easement is irrelevant.

The servient estate owner must use the easement in a manner adverse to the easementholders rights. The servient estate owner must prove her use of the property was

inconsistent with continuation of the easement.

o Termination by Written Conveyance or Release the holder of the easement may deliver a writing to the owner of the burdened land

indicating that he burdened land is released from the burden of the easement

the easement holder by deed can transfer part or all of the easement to the servient estowner. The release must be in writing to satisfy the Statute of Frauds.

the original grant can define the life of the easement, and it can terminate upon expirato Termination by Abandonment

Courts will terminate an easement when the holder of the easement has abandoned it Must be an affirmative act of abandonment on the part of the owner of the easement t

extinguish the easement

Mere nonuse of an easement, created by grant, is insufficient to satisfy this requirement A substituted access may serve as evidence of abandonment, but that by itself is not

dispositive

Use of a substitute road may be evidence of an abandonment of the old road, howeverthe mere use of a new right-of-way will not extinguish the old. There must also be an

abandonment by non-use of the old right-of-way

Those claiming abandonment carry the burden of showing by clear and convincingevidence an intent to abandon the easement

A finding of abandonment is usually based on circumstantial evidence rather than ondirect expressions of intent

Elements necessary for abandonment: exclusive use of the new right of way and nonusethe old right of way

In deciding whether an easement has been abandoned, courts generally focus on theintent of the easement holder, rather than the expectations of the owner of the servient

tenement

Courts have traditionally required clear and convincing evidence of the easement holdeintent to abandon the easementtypically in the form of an affirmative act by the

easement holder that demonstrates her intent to abandon the easement

Courts have universally held that mere non-use (regardless of its duration) is insufficientextinguish an easement

2 elements: intent to abandon


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o must be evidenced by some identifiable and unambiguous act inconsistenwith the continued ownership of the easement

o the best evidence of intent to abandon is a deed or other written docume(which moves abandonment very close to release)

subsequent nonuseo mere nonuse, no matter how long the duration of the nonuse, does not

constitute abandonment

o nonuse for a long enough time, however, does give credence that some opronouncement or act taken long ago constituted the requisite

unambiguous act denoting the intent to abandon

o Profit The right to enter anothers land and remove something (minerals, timber, fish, soil, etc.) or

other things constituting a natural part of the land

usually the person has an easement to venture onto the property as necessary to enthe profits interest

o License where a landowner permits another person to use property, but the permission is revocabl

at the landowners will (tickets to see a movie, concert)

main attribute is that it is revocable or terminable at will allows the licensee to do something that would otherwise be a trespass

o ex. a houseguest, the cable guy easement has to be in writing, license does not General Rule: a license may be revoked by the licensor at any time for any reason Exception: when there is a detrimental reliance on the person who is allowed to use the

license; in that case, landowner cannot revoke license only in extent necessary for the licens

not to be unfairly deprived of the fruits of their labor

o Promissory Servitudes Agreements that relate to the use of land major issue is whether agreements or promises between two landowners can be enforced

against successors to parties that originally made agreement

enforceable promises between a land owner and someone else negative or affirmative covenants Negative covenants: promises that restrict the owner of land from making certain uses of th

servient estate

Ex. a restriction permitting land to be used for residential purposes only Affirmative covenants: obligate the promisor to undertake affirmative acts


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Ex. a covenant requiring a landowner to pay a neighborhood subdivision associatioassessment

Real Covenants and Equitable Servitudes agreements, promises, or deed provisions that relate to real property (land and

improvements to land) and that bound or benefit subsequent owners of the respecti

properties solely because they own the property.

Real Covenant A promise that concerns a use of land (ex. Subdivision covenant: trees, lights, fixtures

etc.)

restrictive or negative covenantso prohibit or limit what an owner can do on his/her property

ex. no flamingos in yardo restrict or prohibit the uses that can be made of the burdened property

affirmative covenantso requires a landowner to do something on his or her property (require proper

owner to pay community interest fees that maintain subdivision roads)

o require the owner of the burdened estate to perform some act or to pay mon Real covenant v. equitable servitude

o The difference between a real covenant and an equitable servitude is remedysought

real covenant gives damages equitable servitude gives specific performance or injunction

o most actions involving land would want an equitable servitude Elements necessary for a real covenant to bind and benefit subsequent owners:

o intent to bind successorso touch an concern the land

Policy: making sure that the promise has something to do with the lanitself

General Rule: affirmative covenants do not run with the land traditionally courts found that only negative or restrictive

covenants would touch and concern the land

easier for the court to identify what restrictions place on theowner

courts less likely to enforce affirmative covenants because it ismore likely to be personal, benefiting a person rather than the

land (and touch and concern makes sure that the promise has

something to do with the land itself)

Exceptions: exceptions to the general rule:


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*a promise touches and concerns the land when it affects thelegal relations-the advantages and the burdens-of the parties t

the covenant, as owners of particular parcels of land and not

merely as members of the community in general, such as

taxpayers or owners of other land

modern courts will recognize affirmative and negative covenants * even when the benefit is in gross New Restatement with respect to touch and concern: get rid of

touch and concern, and focus whether servitude is unreasonab

restraint on alienation or otherwise violates public policy in som

way

how do you determine if the covenant touches and concerns the land what effect the covenant has on the land

o a promise touches and concerns the land when it affectthe legal relations--the advantages and the burdens--of

the parties to the covenant, as owners of particular parc

of land and not merely as members of the community i

general, such as taxpayers or owners of other land

o the landowner who has to pay the fee must be moreinterested in that than any non-landowner member in th

community

o it has a direct effect on the value of the property the burden wont touch and concern the land if the benefit is in gross

must be appurtenant

if the covenant is only in gross: a burden interferes with the lanby affecting the use of the land and the marketability of the lan

there is only a negative effect on the land and no positive effec

on another piece of land to strike a balance; all you have is

property that is burdened without the offsetting increase in val

of another land

o this is why courts were hesitant to enforce benefits ingross

if the covenant is appurtenant: there is an offset (the dominantland becomes more valuable and marketable)

Problem: O, who owns 2 adjacent lots, conveys one to A. The deed to A

contains a covenant restricting As lot to residential use.


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o Does the covenant touch and concern As land? Yes, itrestricts what A can do on the land and how A can use

property. If affects the physical use of As land.

o Does the covenant touch and conern Os land:? Yes, O idirectly concerned with what O can do on his property.

The physical environment that surrounds Os land that

touches and concerns.

o Lets assume that Os retained land was not immediatelyadjacent but was 1 mile away from the lot conveyed to

Does the covenants burden touch and concern Oland? It depends on what is going to be put on A

lot. Being 1 mile away might make the effect on

property so small that it no longer touches and

concerns Os land (to be negatively affected by A

land)

o vertical privity of estate the subsequent property owner must succeed to an original partys

entire estate in the property, either directly from an original party or

through person who can trace their interests back to an original party

the covenant

for a burden to run to a successor, the party must have succeeded to original promisors entire estate or ownership interest

the entire estate requirement means lessees are not in verticaprivity with their lessors

conversely, all that is required for a benefit to run is that a remote orsubsequent purchaser have a posessory interest in the property

adverse possession defeats the running of both benefits and burdenscompletely since the adverse possessor does not succeed to any party

interest

o horizontal privity of estate the relationship that must exist between the original parties to the

agreement

exists if the original parties have either mutual interests orsuccessive interests

o mutual interest: exists when each party has some interesin a given parcel of land

ex. an easement (right to use property owned bysomeone else)


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o successive interests: exists when the parties make thecovenant as a part of a grant of an estate from one to t

other, thereby standing in a grantor-grantee relationship

a few states require horizontal privity for the burden to run butnot for the benefit to run

o the original promisor would be burdened no matter if thoriginal promissee or a subsequent owner enforced the

covenant, but horizontal privity would be necessary to

enforce the covenant against subsequent purchasers of

burdened property

Mutual or Successive horizontal privity?o O owns 2 adjacent lots and sells one to X. The deed

contains a covenant restricting the land conveyed to

residential purposes.

No, not a mutual interest because neither O nor have an interest in a single parcel of property

Yes, successive interest because the transactionwhere O transferred the property to X, the

transaction involved the transfer of interests in th

property thereby creating a grantor-grantee

relationship

o What if O sells his portion of the land to Y. What is therelationship between Y and X?

No horizontal privity because there is no longer grantor-grantee relationship. This is a vertical pri

o O owns 2 adjacent lots and sells one to X, reserving forhimself an appurtenant easement of way. The deed

contains a covenant that X will keep the easement in

repair.

Mutual interest? Yes, because the transactionresulted in O and X having an interest in the sam

land

Successive interest exists for same reason as theprior example

o notice actual, constructive, or inquiry notice

o (original contract must meet general requirements of contract enforceability) Equitable Servitude

Elements necessary for an equitable servitude to bind and benefit subsequent owner


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o Intent to bind successors intent usually reflected by express language indicating that the covena

binds the covenanting parties and their heirs, successors, and assigns

heirs and assigns serveas rebuttable presumptions of the partiesintent to burden and benefit successors

This covenant runs with lando Touch and concern the lando Noticeo (original contract must meet general requirements of contract enforceability)

See examples on 2-8 and 2-10 class notes

Common Interest Communities

ogenerally the declaration establishes the initial and maximum amounts of assessments, proceduresincreasing assessments or levying special assessments, allocation of reserves for future capital need

and collection and enforcement mechanisms

o courts have generally found residents assessment obligations as covenants that run with the lando unpaid lot assessments constitute a lien against that lot, enabling the association to sell a lot in th

event that the lot owner cannot (or refuses) to pay the assessments

o homeowner associations have the implied power to levy dues or assessments even in the absence express authority

oa landowner who willfully purchases property subject to control of the association and derivesbenefits from membership in the association implies his consent to be charged assessments and d

common to all other members

o a common interest community has the power raise the funds reasonably necessary to carry out itsfunctions by levying assessments against the individually owned property in the community

o the power to levy assessments will be implied if not expressly granted by the declaraion or by stat Policy: to promote effective and efficient property management through defined operationa

requirements that preserve flexibility for such homeowner associations

oCICs are typically structured around a promissory servitude regime, established by means of a writtinstrument typically called a declaration

o either the declaration or a separate document will set forth so-called Covenants, Conditions, andRestrictions

o by their terms, the CCRs are stated as reciprocal restrictions and obligations, burdening each lotcovered by the declaration for the reciprocal benefit of every other lot

o the typical CIC is administered by an owners associationo owners association is responsible for regulating potentially conflicting or undesired uses within the

community by enforcing the communitys restrictive covenants


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o in many cases, association also responsible for managing and maintaining the communitys commoassets

o association is empowered to establish and collect assessmentsthereby spreading among all ownethe costs of constructing and maintaining the communitys common facilities

o the CCR should be recorded in the clerks office to provide notice to potential buyers shows that all the lots in the subdivision are subject to the same restrictions

all lots are burdened and benefited from the CCRSo See 2-12 class notes p. 638 with Dave Developero an implied obligation may be found where the declaration expressly creates an association for the

purpose of managing common property or enforcing use restrictions and design controls, but fails

include a mechanism for providing the funds necessary to carry out its functions. When such an

implied obligation is established, the lots are a common-interest community

o when association assessments go unpaid, the uncollected share of community expenses falls uponthe remaining neighbors in one of two ways:

the association may choose to maintain its existing level of services and simply pass the coson the remaining reliable owners

the association may choose to reduce its expenses by deferring or decreasing maintenance eliminating services

o implied reciprocal servitude: everyone is subject to the same restrictions, benefits, and burdenso some courts recognize an implied reciprocal servitude, while others do not:

courts that do imply reciprocal servitudes do so under a reciprocal servitude theory or a thiparty beneficiary theory

some courts require buyers to take steps to get notice of whether there are any restrictionsburdens that they can enforce or can be enforced against them

a title search of previous land sold by the landowner would have put on notice that therewere restrictions on those properties that would most likely extend to the current buyer

inquiry noticeo what do we need to imply a development scheme?:

(1) the two properties are proximate to one another (2)need a common development scheme: 2 elements

common owner, showing an intent to execute a general plan for the subdivsion deeds to various purchasers need to contain substantially uniform covenants and

restrictions

o if a development scheme exists, courts will imply a reciprocal servitudeo Implied Reciprocal Servitudes Problem

Developer has presented potential purchasers with subdivisions maps and other promotionamaterials that reference uniform development restrictions. Developer includes the restriction

in the first 20 deeds but inadvertently omits the restrictions form the next 10 deeds. Can we

imply reciprocal servitudes?


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must demonstrate 2 elements of a common element scheme:o (1) establish that developer pursued a course of conduct that indicated an

intention to have a general scheme

present evidence of the brochures and maps that show maps and plafor the subdivision, and the restrictions were contained in the first 20

deeds; this shows intention to have a general scheme

o (2) the deeds must contain restrictions that are substantially similar these 2 elements demonstrate a common element scheme and the court will imply

reciprocal servitudes

restrictions must be placed at the time the first lots were sold for there to be a commonelement scheme

o See 2-15 class notes Note 2 on p. 641o restrictions contained in the declaration of common interest communities are enforceable unless

unreasonable

Issue: what is reasonable? 2 approaches: equitable reasonableness: uphold restrictions that provide a reasonable means to

further collective health, happiness, and enjoyment of life of owners of a common

interest development

One of two different standards depending on whether restriction was adopted by amajority vote of homeowners or whether it was included in the declaration or maste

deed of the covenant

o By majority vote: subject to a reasonableness standardo In declaration: restriction is presumptively valid (a court will refuse to enforce

restriction only if it is arbitrary, violates public policy, or violates a constitution

right

By enforcing these rules, this gives validity to the covenant and protecthe general expectations of condominium owners that restrictions in

place at the time they purchase their units will be enforceable

Rule: when a restriction is contained in the declaration of the common interest developmenand is recorded with the county recorder, the restriction is presumed to be reasonable and

be enforced uniformly against all residents of the common interest development unless the

restriction is arbitrary, imposes burdens on the use of lands it affects that substantially

outweigh the restrictions benefits to the developments residents, or violates a fundamenta

public policy

o Restraints on leasing and restraints on transfer of property within a CIC are okay as long as it isreasonable

o if the language is unambiguous, the covenant shall be enforced according to its plain language, athe covenant shall not be subject to rules of interpretation or construction


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an ambiguity exists when the instrument at issue is susceptible of two or more reasonable bconflicting interpretations or meanings. The fact that the parties have suggested opposing

meanings of the disputed instrument does not necessarily compel the conclusion that the

instrument is ambiguous

o How the court resolves ambiguities in the covenant: determine the intent of the parties at the time the instrument was drafted if an ambiguity is found in the restrictive covenant, the court is to determine the intent of t

parties at the time the instrument was drafted. The interpretation of the restrictive covenant

intended by the drafters can be ascertained from the language of the covenants, the existin

circumstances at the time of the formulation of the covenants, and the conduct of the parti

Additionally, the mutual interpretation of the restrictive covenants afford cogent evidence o

their meaning.

In other words: to resolve ambiguity:

o intent of the parties at the time the covenant was drafted, language of thecovenant, conduct of the parties

o extrinsic circumstances General rule: restrictions on the use of land are not to be extended by implication, and dou

are to be resolved in favor of the free use of land

Restatement: land use restrictions are as likely to increase alienability and utility, as it is todecrease it

by protecting landowners expectations, you protect utility land restrictions might make the property more valuable, therefore increasing its val

and therefore its alienability

See 2-15 & 2-17 class notes Note 2 &3 p. 664, 665CICs: Termination and Amendments

o Covenant can be changed in 3 ways: unanimous agreement by everyone in entire community according to the terms provided for in the declaration litigation

abandonment

o those entitled to the benefit demonstrate intent to abandon their rights this test is met when the average person, upon inspection of a

subdivision and knowing of a certain restriction, will readily observe

sufficient violations so that he or she will logically infer that the prope

owners neither adhere to nor enforce the restriction

change of circumstanceso change in the character of the subdivision such that owners can no longer en

the benefits for which restrictions were created


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o changed circumstances applies where there is a change in the character of thsubdivisions where the owners can no longer enforce the restriction or enjoy

the benefits of the restriction even if they wanted to

if restriction cannot be enforced because of changed circumstances, itcannot be enforced against anyone

this differs from abandonment because the decision to abandon is up the homeowners

o Note: the changing circumstances doctrine will help you get rid of or amend old covenant, but will not allow you to make additions to a covenant

o Methods of termination: written release merger of the benefited and burdened parcels prescription (wrongful interference with the servitude for the prescriptive period)

applies to only one lot the restriction cannot be enforced against the entire community, only the one perso

abandonment the restriction is abandoned by the entire subdivision widespread violations that suggest the covenant no longer exists and the residents a

no longer interested in enforcing covenant

the restriction cannot be enforced against anyone in the communityo issue: whether a majority of the lotowners may adopt covenants which are new and different from

the existing covenants and which are binding on all of the lotowners

West Court allowed new covenants by landowners because they thought the definition of thword change included the addition of new covenants

Boyle Court does not allow the addition of new covenants; the provision does not authorizemajority of lotowners to bind all lotowners to new and different covenants that restrict the

of land

o the question of whether a new addition to the covenant is permissible comes down to *notice* anwhat the property owners could have reasonably anticipated when they purchased their lot

o what if there is no declaration that allows for the amendment of covenants? How does thecommunity go about changing then?

courts traditionally have held that if a servitude regime does not contain a provisionauthorizing change by majority or super-majority vote, any change to the regime requires

unanimous consent. However, recent legislation in some states establishes a presumption th

a CIC servitude regime can be amended unless the declaration expressly provides to the

contrary

o Note: the changing circumstances doctrine will help you get rid of an old covenant, but will not allyou to make additions to a covenant

Land Transfer Transaction


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o 4 basic stages: find a buyer/find a property

hire real estate broker negotiate a contract

terms contingencies (taking property as is, etc.) price

executory period title search buyer obtains loan to finance the purchase

closing where the actual transfer takes place (buyer and seller sit down with broker or agent

and sign papers that states you are accepting property, willing to pay loan back, tha

bank has a lien on property because of loan, exchange title, give bank down paymen

bank gives real estate agents their commission checks, then seller walk away with ke

to the house)

o Real Estate Broker (under stage 1) many real estate transactions begin with securing a real estate agent or broker to assist on

or both of the parties in marketing or finding a property and negotiating an agreement for

the sale of the propertywhich is memorialized in a written contract

real estate brokers typically perform two separate functions: the listing functioni.e. entering into a brokerage contract with the seller to list th

property (typically in exchange for a commission ranging from 5-10% of the purchas

price) and thereafter advertising the property for sale by placing the property into th

brokers own promotional materials and onto an areas multiple listing service

the selling functioni.e. displaying the home to potential buyers and facilitatingnegotiation and contract formation between the seller and prospective buyers

3 different types of listing agreements (agreement that the seller and broker enter into): Open Agency: gives broker a commission only if the broker actually procures a buye

(the broker does not get a commission if the seller or another agent makes the sale)

Exclusive Agency-the owner may not use another agents efforts to sell the homeduring the effective period of the listing agreement

o The owner may sell the property through her own efforts without incurringliability for a brokerage commission

o If another broker sells the property, the broker still gets a commissiono If seller makes the sale himself, the broker does not get a commissiono broker gets a commission if the property is sold by any broker, but there is n

commission if the seller makes the sale himself


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Exclusive Right to sell-the broker has the exclusive right to facilitate sales of theproperty, even as against the property owner

o If the property owner sold the property during the period of the listingagreement, the broker would earn a commission even if the brokers efforts d

not facilitate the sale in any way

o Gets a commission no matter who sells the property (another broker orproperty owner)

Multiple Listing Service: a website for a broker to look at residential properties broker gets access to information about properties, but broker usually must split

commission 50/50 with the service (there is a listing broker and a selling broker, and

split commission will come from the sales price)

Traditional rule: a broker is entitled to a commission when he produces a buyer ready, williand able to purchase the property on the sellers terms, even if the sale is not completed

Ready, willing, and able: a buyer who has the willingness as well as the ability andcapacity to act on the transaction

o court deems a purchaser ready, willing, and able as soon as the contract ofsale is signed

o even if the seller tries to back out, this protects the broker so that he isguaranteed commission

o the signature of the seller means that: seller is presumed to be in acceptance of buyers financial capability of

purchasing the property

seller accepts the risk that the agreement will not result in an actual sa risk is on the seller and not the broker

o when a seller enters a valid unconditional contract of sale with a purchaserprocured by a broker, the purchasers acceptability is conclusively presumed

because the seller is estopped to deny the qualifications of a purchaser with

whom he is willing to contract

Modern Rule (Dobbs) Rule: in the absence of default by the seller, the brokers right tocommission comes into existence only when his buyer performs in accordance with the

contract of sale (in other words, a real estate broker does not earn a commission unless the

contract of sale is performed by the buyer)

a broker can still collect his commission, even under the Dobbs Rule, if the sellersimproper or frustrating conduct breaches the contract

Policy: in a practical world, the true test of a ready, willing, and able buyer is at thetime of closing, not at the time the contract of sale is signed. The buyer is not willing

and able if the buyer is not able or refuses to perform at closing. The traditional rule

unfair to the seller because the seller usually relies on paying commission out of the

sales profit.


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Traditionally the law has recognized that the broker works for the best interest for the seller many states have adopted statutes that change brokerage relationships

o a real estate agent can be a buyers agent, and a buyer is represented by arealtor unless the parties have agreed otherwise or the broker is only

performing ministerial duties (showing property, answering questions buyer m

have)

o law also provides for dual agency (broker is agent for both buyer and seller)provided that both parties give their informed consent

however, this provides for mixed loyalties and a conflict of interest See 2-24 class notes for Ready, Willing, and Able Problem

Issues in Contract Formation

o General Rule: all states have enacted a statute of frauds, which requires that the transfers of landand contracts for such transfersmust be in writing to be enforceable

o To satisfy the statute of frauds:

courts typically require that the writing identify the parties, describe the land, state thepurchase price, and be signed by the party to be charged. Courts also have recognized that

the writing need not be in a particular form; a letter, note, or other informal memo may

suffice.

To satisfy SOF, need a signature by the party to be charged Some courts have found that a signed check may satisfy the SOF

o Exceptions to the SOF: (1)Equitable estoppel: a contract for the transfer of an interest in land may be specifically

enforced notwithstanding failure to comply with the Statute of Frauds if it is established thathe party seeking enforcement, in reasonable reliance on the contract and on the continuin

assent of the party against whom enforcement is sought, has so changed his position that

injustice can be avoided only by specific enforcement

if a party seeking to enforce an oral agreement can demonstrate (a) reasonable anddetrimental reliance on the oral agreement, and (b) the necessity for specific

enforcement of the agreement to avoid injustice or irreparable injury, the court can

estop the other party from asserting the statute of frauds as a defense

**2 requirements: detrimentally relied on the promise, and the promise was reasonab

(2)Part Performance: courts have considered acts taken in performance of an oral agreemensuch as the payment of money, together with either the transfer of possession of the land o

the construction of improvements (or both)as a sufficient evidentiary substitute for a writt

document; based upon these acts of part performance, courts have justified enforcement

an oral agreement in equity despite the lack of compliance with the statute of frauds

problematic, however, because courts often have held that sufficient acts of partperformance must be unequivocally referable to the existence of an oral agreemen

in other words, there must be no other plausible explanation


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o equity: the difference between the amount of the home and the money you still owe on it)Land Description

o SOF requires the real estate contract to contain an adequate description of the land being sold for the sales contract, something as simple as an address will do however, at the closing, a full legal description is usually required

o most courts are fairly lenient with the requirement that the real estate contract contain an adequatdescription of the land being sold, and do not require a formal legal description at this stage of thproceedings

instead, it is generally enough to give the street address, tax identification number, or someother description specific enough to identify the land with reasonable certainty

o some courts will allow extrinsic evidence to clarify an ambiguous description, however, they will nopermit such evidence to supply a description when one is completely missing from the contract

o most courts require the deed of conveyance to contain a full legal descriptiono 3 primary methods of land description: metes and bounds, government survey, and plat

Metes and bounds: describes the land in relation to natural monuments (e.g. rivers, rocks,trees) or artificial monuments (bridges, roads, fences, stakes, pins, or posts)

The description begins at some easily identifiable corner of the property and thentraces the boundary lines of the property by using distances, compass point heading

and monuments until the description closes by returning to the point of beginning

Government Survey Plat

o See Plat handoutTitle Investigation and Assurance: Quality of Title

o Title: how are system decides how interests in land are owedo the parties contract usually provideseither expressly or impliedlythat the seller will provide title

a certain quality

the contract usually uses the term marketable title marketable title means a title free from reasonable doubt as to the promised titles

validity

o a reasonable person having knowledge of all the relevant facts , and the legaconsequences flowing from those facts, would be willing to accept title

o Generally, the title is unmarketable if there is a reasonable probability the selldoes not own the full title alleged, the property is subject to an undisclosed

encumbrance, or the purchaser bears an unreasonable risk he or she would b

subject to litigation related to the property.

It is not the existence of an encumbrance or possible defect that causetitle to be unmarketable, rather it is the existence of an undisclosed

encumbrance and thus not made part of the bargain that makes the t

unmarketable


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**A good rule of thumb is that a title is unmarketable if acquiring the property woulsubject the purchaser to a real risk of litigation.

Policy: the law developed this requirement to protect the expectations of the typical buyer

land, who expects to receive a fee simple absolute estate subject to neither

(a)outstanding third-party property rights in the land that might interferer with buye

(or any successor owners) use of the land nor (b)reasonable doubt that such

outstanding rights may exist

such doubts or colorable claims are termed clouds on titleo what makes title unmarketable?

some flaw in the sellers title, suggesting the seller does not actually own the estate to beconveyed

the existence of undisclosed encumbrancesliens, easements, and other rights of third partin the land

events that have deprived the seller of title, such as the governments exercise of eminentdomain

o in defining marketable title, courts often focus on whether there are outstanding rights in the lanthat might interfere with its use. Accordingly, physical defects in the land or improvementssuch a

termite infestationnormally do not constitute title problems

o the seller generally has until the closing date to clear up any title defects and tender marketable tio The marketable title standard is implied in every sale for the purchase of property, unless the contr

says otherwise

o See 3-1 class notes Problems p. 729o Issue: Does the existence of an ordinance or covenant render the title unmarketable?

General rule: covenants are an encumbrance that will render title unmarketable, zoningrestrictions are not

why treat public restrictions different than private ones? A buyer may not anticipateprivate restrictions

Title exception clause: if there is a clause in the contract that states buyer will take title subjto all restrictions and easements of record, this can waive the buyers ability to object to the

content of any recorded restrictions

*as a buyer, ask the seller to list the easements and restrictions of recordoo

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