Property

Outline

  1. Adverse Possession
  2. RULE: For adverse possession, use of the land must be
  3. Hostile
  4. State of mind:

(1)some jurisdictions: objective test: their state of mind is irrelevant, as long as they INTEND to remain

(2)some jurisdictions: must have good faith: owner mus believe it was theirs

(3)some jurisdictions: bar bad faith claims

(4)Can either be:

(a)holds the property under claim of title (believes he owns it)

i)if under color of title, then they get the entire parcel described in the paper, otherwise they only get the part they adversely possessed

(b)or he acknowledges he has no right to it, but has the intent to claim it for his own

  1. If the true owner consents to the possession it is not adverse or hostile regardless of state of mind

(1)** look up what happened in that case where the guy wrote a letter giving permission but it was never received

  1. Open and Notorious
  2. Improvements on the land can prove this element
  3. Not hidden, sufficiently apparent to give notice to TO
  4. Continuous
  5. Exclusive
  6. For the requisite period of time
  1. Some states require color of title, some states require taxes to be paid
  2. An adverse possessor has all the rights of the True Owner, except against the True Owner
  1. Van Valkenburgh v. Lutz
  2. Facts: The Lutz’ owned tracks 14 and 15, they created a “traveled way” through a triangular tract of land, they built a shack on that land and cultivated part of it, knowing it was not theirs. The Van Valkenburghs bought the land. Lutz agreed to remove his stuff, but claimed a prescriptive right. Van Valkenburghs erected a fence, inviting this legal action
  3. 1st and 2nd litigations
  4. 1st law suit was for prescriptive rights (seeks use of some of the land)

(1)did this concede that he didn’t claim title??

  1. 2nd law suit was for adverse possession (seeks title of land)

(1)was the property occupied under claim of title??

(2)NO, Lutz agreed to move all his stuff, and acknowledged someone else’s right to the land

  1. The Court
  2. Argued that the Lutz’s didn’t improve the land (said the shack and the garden were not improvements)
  3. Required him to be using the whole land

(1)cultivation is an indication that you are treating it like your land

(2)Using land gives notice to the true owner that you are there, possessing it adversely

(a)if they don’t want to lose the land, they have to intervene, get you off the land

  1. Color of Title
  2. It looks like, and you believe, you have title, but you really don’t- you have a piece of paper saying you do
  3. Assume lots A and B, your parents own A and leave you in their will A and part of B. Your belief, based on the will, is that you own A and part of B
  4. IF you rely on that, even if you only occupy a tiny piece of the land, you get ALL of it when adverse possession is satisfied
  5. IF you don’t have color of title, you only get the part you adversely possessing
  1. Tacking
  2. If one person adversely possesses the land, and then another person takes over, they can tack on to the first possessor to satisfy the statute of limitations
  3. Does not apply in involuntary change of possessor
  4. (Likewise the TO can change, but the statute of limitations keeps going as long as the AP is continuous)
  1. Disasbility of T.O.
  2. If there is a disability at the time of encroachment, then the statute of limitations doesn’t start to run until the disability is over
  3. Includes: mental infirmity, imprisonment, infancy, etc.
  1. Prescriptive Easements
  2. Open, Visible, and Continuous and Uninterupted use of land under claim of right
  3. Not possessing it, you are just using it
  4. You concede that someone else owns, but INSIST that you have the right to use it
  5. ***What else do we need to know about this?
  6. Hostile
  7. Future Interest
  8. Harper v. Paradise: statute of limitations does not start to run against someone with a future interest, until they actually have possession
  9. Life estates, etc. think of Harper v. Paradise
  1. Landlord/ Tenant Law
  2. 2 Rules
  3. English Rule: Landlord is responsible for ensuring a tenant is out so another can move in
  4. PRO English Rule

(1)the landlord has better access to knowledge about a tenant holding over

(2)access to the information

  1. Implied covenant of lease to make the premise available
  2. Can absorb risk by absorbing cost into rent
  3. CON: landlord could never lease property until the original tenant had already left

(1)ENGLISH RULE INCREASES RENT because of the liability on the landlord, for protection

  1. Result: collective risk aversion: would rather pay $5 more a month than potentially have to pay double rent under the american rule

(1)like insurance, redistribute the risk

  1. American Rule: Tenant is responsible for the space once their lease starts... a holding over tenant is their problem
  2. The lease gives you title, not necessarily possession
  3. Tenant has the right to kick people out at that point, not the landlord

(1)like a trespasser would be handled by the tenant, not the landlord

  1. PRO American Rule:

(1)tenant has a remedy: they are in legal possession, but the remedies are the result of the rule that puts them in the position to need remedies: circular

(2)Rent is cheaper, because the burden isn’t on the landlord, so they don’t need to protect themselves

(3)the tenant has the option to ask for an express covenant of actual possession

  1. CON: burden is on the tenant- so they won’t sign lease until they know

(1)have to pay the rent still, and find another place to live... double rent

  1. Hannan v. Dusch
  2. Facts: Hannan is a new tenant, says it was Dusch’s responsibility to ensure actual possession, Dusch said he put Hannan in legal possession. Dusch wants rent, Hannan wants possession.
  3. Pro/Con analysis of English v. American Rule (see above)
  4. Dusch wins, American Rule... tenant responsibility
  1. Subleases and Assignments:
  2. Between Landlord and Tenant there is privity of estate and privity of contract
  3. Privity of contract: there is a contract, the liability that arises from this
  4. * go over this: Privity of estate: an interest in the land; the parties between whom there is a reversionary interest... (when the possessor stops possessing, who does it go back to?... that’s where the privity of estate is.) Rent runs with privity of estate
  5. Sublease:
  6. There is privity of estate and privity of contract between the Tenant and his subleasee...
  7. But no relationship between Landlord and Subleasee
  8. Liability: landlord cannot sue or be sued by Subleasee... T(2) isn’t protect if T(1) is evicted. There is no relationship between T(2) and L... Landlord and Tenant have the only relationship...
  9. Assignment:
  10. Privity of contract remains between landlord and tenant, but the tenant has given up all his interest in the land... so privity of estate doesn’t exist between landlord and tenant
  11. The assignee has a right to indemnity between him and the Tenant, but privity of estate between assignee and Landlord
  12. T(1) transfers entire interest to T(2)

(1)there can be a partial assignment of all of your interest in just part of the land

  1. Liability

(1)T(2) is first liable for the rent because rent runs with privity of estate

(2)T(1) is still liable for everything... even the things that run with privity of estate

(a)if something doesn’t run with the land, then T(1) is liable...

  1. Assignment with Assumption
  2. Gives rise to privity of contract between L and T(2)
  3. What does that mean between L and T(1)

(1)think they still have privity of contract

  1. You assume liability
  2. L becomes a 3rd party benficiary
  1. If the landlord and T(2) decide to change the terms, then T(1) is not liable

(1)as long as it materially alters...

(2)Implied Novation

  1. You can assume in a sublease as well
  1. Partial Assumption
  2. A subleasee or assignee can assume an obligation for certain clauses

(1)“use” clause: what the land can be used for

(2)“tenant mix” in a mall what kind of tenants are allowed

(3)“radius clause” certain things can’t be within certain radius of each other

  1. If T wants to be NOT LIABLE... NOVATION AND RELEASE
  2. You release yourself of liability, but it’s the only way to get out of a contract

(1)It’s the only way to get out of liability- buy yourself out

  1. Implied Novation: if T(2) and the Landlord change the terms of the lease... then they have written you out of the lease and you are not liable
  1. The Float:
  2. If T(2) is paying $1000 to T(1) on the 1st of the month, and T(1) is paying $700 to L on the 30th of the month, the T(1) has a float and can use the money/get the interest during the month

(1)put the money in an escrow otherwise T(2) might have to pay twice if T(1) bails

  1. Ernst v. Conditt: See attached
  2. Facts: T(1) transfers entire interest to T(2), but in the contract they call it a sublet. Who is liable?
  3. T(2) argues that T(1) is liable because he said he would be and because he retained an interest in the land by having the right to come back on the land to fix something, but a right to enter is not an interest in the land.
  4. But, T(1) always retains privity of contract in a plain assignment... so this is not really an argument
  5. Court disagrees with T(2)... finds it was an assignment, and so T(2) is primarily liable, and T(1) is secondarily liable
  6. Even if it was a sublease T(2) is still liable, because in the contract he also ASSUMED
  1. Melchor: see attached
  2. Facts: Melchor leased to Rolm Corp. Who then merged with IBM, and so the new company took an assignment and assumption of lease, and later subleased to Rolm Systems, who also did a partial assumption
  3. Does T(3) have the right to enforce aribtration clause against Melchor
  4. The Court’s reasoning is WRONG
  5. They say that the subleasee can enforce it because the arbitration clause runs with privity of estate BUT there is no privity of estate between T(3) and L!!
  6. They went wrong because this is a sublease, not an assignment
  7. But why is the Court’s answer Right?
  8. Because of the Subleasee’s assumption, they are in privity of contract, and the arbitration clause should be enforced between them
  1. See Diagram of Probem C
  1. Sale of Land/ Warranties- Part I
  2. Sale of Land- 4 part process
  3. Locating buyer
  4. Negotiating contract
  5. Prepare for closing (executory period)
  6. Closing the transaction
  7. Marketable Title
  8. A title is free from reasonable doubt, with no reasonable probability that the buyer will be subject to a lawsuit
  9. Actions on this happen between contract of sale and conveyance (since marketability is implied in contract of sale, but merger doctrine usually keeps it out of the deed and not a cause of action after that)
  10. Also: problems in the chain of title indicating that the seller doesn’t have the full interest he purports to convey... may be a defect and render a title unmarketable
  11. Again it exposes buyer to potential litigation
  12. What effects marketable title?
  13. Zoning regulations do NOT
  14. CCRs do, but can be carved out
  15. A violation of a zoning restriction or a CCR does
  16. Adverse Possession: not necessarily... two options

(1)seller can perfect title through a suit

(2)seller can go to court and argue marketable title based on the unreasonableness of someone coming back after however long to reclaim title... if that’s found unreasonable, it’s marketable

  1. Conklin v. Davi
  2. Bad rule: that you evaluate the rule as of the moment of judgment, not the date of the closing of escrow: Date of Evaluation

(1)Insert “time is of the essence” clause

(a)you want performance by a drop dead date, with no later fixing

(2)True Owner needs to be a party to the adverse possession suit

  1. Argument: it is marketable because he adversely possessed it and would win a claim, BUT to be marketable it must be free from LITIGATION, not just unsuccessful litigation
  1. CCRs
  2. Private agreements (Zoning restrictions are public)
  3. Conditions, Covenants and Restrictions
  4. Lomeyer Case
  5. The VIOLATION of the CCRs creates unmarketable title

(1)NOT the existence of the CCR because that can be carved out

  1. Promises made in deed or lease that restricts the use or occupancy of real property...
  2. HAVE TO RECORD
  3. They follow the property: if you sell to someone, the covenants are still with the land
  4. Strawman Transaction: convey all lots with CCRs to a strawman who conveys it right back to you and now all the properties clearly have the CCRs attached to them
  1. Equitable Conversion
  2. Traditional Rule: risk of loss transferred with equitable title (when the contract was made), not upon delivery of legal title or possession, so buyer always bears the loss after the contract for sale is made
  3. In CA: the person in possession bears the loss, unless you contract around it
  1. Merger Doctrine:
  2. Folds the old contract into the new one (the contract for sale into the deed)
  3. Makes it the final integrated agreement of all our understandings
  4. Everything is merged together, so if it isn’t in there, it isn’t important
  1. Warranties- Part II
  2. General Warranty
  3. General warranty- the 6 covenants:
  4. Present and Future warranties

(1)Covenant of seisen: grantor guarentees that he owns what he is selling

(2)Covenant of Right to Convey: (ie. Grantor is not a trustee with title but no ability to convey... but very similar to covenant of seisen)

(3)Covenant against Encumbrances: includes, among other things: mortgages, liens, easements, and covenants

(4)Covenant of General Warranty: grantor will defend against lawful claims against the property and will compensate for any loss by an assertion of superior title

(5)Covenant of Quiet enjoyment: possession will not be disturbed or their enjoyment, by assertion of superior title

(6)Covenant of further assurances: grantor will execute any other documents that are necessary to perfect title

  1. Covers all defects in title
  2. Present Covenants are breached at time of conveyance and the statutory period allows time for the breach to be discovered (starts to run at time of conveyance/breach)
  3. Future Covenants are breached at a later time and statute of limitations starts to run at time of breach
  1. Special Warranty Deed
  2. I haven’t done anything to foul up the title, can’t say anything about before me
  3. Same 6 warranties
  4. But only on whatever happened during direct grantor’s tenure
  5. Quitclaim Warranty
  6. No warranties, take it as it is
  1. Brown v. Lober
  2. Facts: remote grantor retained 2/3 mineral rights in land conveyed to Bosts (grantor), then grantor conveys to Brown (grantee), who then contracted to sell mineral rights for $6000, but can only sell 1/3 because he didn’t know but he only owns 1/3
  3. Brown didn’t have the 2/3 interest because Bosts never had it to give to him... the claim should have been under covenant of seisen, but the statute of limitations had run on that since it is a present covenant and the statute of limitation starts to run at conveyance
  4. In order to invoke a future covenant, need to have your possession Interfered with... here, you need to have possession of mineral rights, underground, interfered with - that’s a breach of quiet enjoyment
  5. But the interference needs to be by someone with superior title
  6. Can’t be an action for marketability: all actions on this happen between contract and conveyance (since it is usually included in the contract but not in the deed)
  7. Does this make sense?
  8. Assume a world where Brown’s arguments are correct... present covenants would be extended, and future covenants would be strict liability like the present ones... mesh them together - prices will go up
  9. What should Brown do?
  10. Problem with adverse possession- how are you open and notorious underground?
  11. Make a deal with True owner- you start digging, call and tell them you are doing this... they sue you, you share the profits
  12. If Bost knew about the 2/3- should have carved it out, or issued a special warranty or quitclaim
  1. Rockafellor v. Gray: see attached
  2. Facts: Doffing conveys to Rockafeller, who assumes the debt, Doffing owes Gray a mortgage of $500, it’s a lien on the property, then Gray judicial forecloses, Connelly buys it from the foreclosure, sells it to Dixon for $4000 and then Dixon sells to H&G for $7000
  3. Rockafellor sues Gray saying they didn’t get jurisdiction over him- he wants the land back
  4. H & G files a cross-complaint against Connelly
  5. There was a breach of covenant
  6. All that was actually conveyed to H&G was a right to sue (chose in action)
  7. H&G relied on the GWD issued by Connelly to think they were getting good title
  8. Recovery is measured by the stated consideration, Dixon’s stated consideration
  1. Who has title?
  2. Common Law: first in time, is first in right
  3. Recording is irrelevant
  4. Recording Statutes - can divest title from common law
  5. Race Statute: whoever records 1st wins
  6. Notice Statute: unrecorded conveyance is void against a SBFP4V
  7. Doesn’t have to record first
  8. Race/ Notice: unrecorded conveyance is void against a SBFP4V who records first
  1. Estoppel by Deed: see attached
  2. When O conveys to A something he doesn’t have, and then X conveys to O that which he purported to convey to A... it automatically goes to A
  3. It is considered that O got the property on A’s behalf
  4. Always check the dates, to see if the later divester has actual notice!
  1. Delivery
  2. Delivery requires INTENT TO DELIVER... which is often shown by manual delivery... but can be shown by other factors if significant enough to show intent
  3. Sweeney Case:
  4. Facts: Maurice owns property, conveys it to his brother, at some time executes a deed back to himself in the event that John dies before him, the first is recorded, the second is not, they leave with both deeds which Maurice later gives to John to hold, then Maurice dies
  5. Delivery requires: manual delivery/ physical possession and intent to deliver
  6. The conditional delivery actually vests delivery in the person (unless you were to use an escrow at which point delivery isn’t made until the condition is met)

(1)here, the condition to deliver and convey something, satisfies the requirement and actual delivery is made