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REAL PROPERTY 33 QS

By Laurie Weaver,2014-04-16 07:55
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A has: Fee Simple Determinable O has: Possibility of Reverter consume or exploit natural resources on property (e.g. timber, oil, or minerals), EXCEPT for PURGE (ii) a servient tenement, which bears the burden of the easement

    REAL PROPERTY (33 QS)

    I. Estates in Land

    A. Present Estates

    ? Devisable: pass by will

    Descendible: pass by the statutes of intestacy (without a will)

    Alienable: transferable inter vivos (during holders lifetime)

    Defeasible: capable of being annulled or avoided

    Future Future

    Estate Language to create Duration Transferability Interest Interest rd(Grantor) (3 Party)

    DDA (Devisable, “to A” OR Infinite Descendible and NONE NONE Fee Simple Absolute “to A & his heirs” Alienable)

    Lasts as long as “to A and the heirs of his Automatically to lineal blood Reversion Remainder Fee Tail body” lineal descendents descendants

    “to A so long as” / “to A DDA but As long as Possibility of Fee Simple during” subject to the - condition met Reverter Determinable “to A while” / “to A until” condition

    “to A, but if X event Until happening of happens, granter reserves Right of Fee Simple Subject to X event & Same as above - that right to re-enter and Entry Condition Subsequent reentry by grantor retake”

    “to A, but if X event occurs, As long as Executory Fee Simple Subject to Same as above - then to B” condition met Interest Executory Limitation

    “to A, for life” OR, Reversion NONE Until the end of the “to A for the life of B” measuring life “to A for life, then to B” DDA - Remainder Life Estate If measuring life Until the end of the (may be defeasible) still alive “to A for life, but if X event measuring life OR Executory Reversion happens, to B” until happening of Interest

    named event

    1. Fee Simple Absolute

    a. A living person has NO heirs (only prospective heirs).

    2. Fee Tail

    a. Past pass directly to lineal blood descendants

    b. Today would create fee simple absolute (because abolished in US & NY)

    3. Defeasible Fees

    a. Fee simple estates (i.e., of uncertain or potentially infinite duration) that can be terminated upon the happening of a stated

    event

    b. Important rules of construction:

    (i) Need duration language words of mere desire, hope, or intention are insufficient

    HYPOS: In each of these instances, A is vested with a fee simple absolute, and NOT a defeasible fee: “To A for the

    purpose of constructing a day care center”; “To A with the hope that he becomes a lawyer”; “To A with the expectation

    that the premises will be used as a Blockbuster video store.”

    (ii) Absolute restraints on alienation are void restraint need to be reasonable, time limited purpose

    HYPO: Absolute restraint on alienation (thus void): O conveys: “To A so long as she never attempts to sell.” A has:

    Fee Simple Absolute O has: Nothing

    COUNTER-HYPO: O conveys: “To A so long as she does not attempt to sell until the year 2008, when clouds on the

    title will be resolved.” (Note: Here the restraint is linked to a reasonable, time-limited purpose.) A has: Fee Simple

    Determinable O has: Possibility of Reverter

    c. Types

    (i) Fee Simple Determinable (In NY, it is called a Fee on Limitation) automatic reverter

    (a) Must use clear durational language (e.g. To A so long as, during, while, until)

    (b) Condition violated forfeiture automatic, & there‟s a possibility of reverter in the grantor

    (c) RAP not applicable.

    Frank Sinatra conveys Sinatra Palace “to Orville Redenbacher, so long as popcorn is never made on the premises.”

    Classify the interests. Orville has: Fee Simple Determinable - Frank has: Possibility of Reverter.

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    FSDPOR Fee Simple Determinable Possibility of Reverter Frank Sinatra Doesn‟t Prefer Orville Reden.

    (ii) Fee Simple Subject to Condition Subsequent (NY Fee on Condition) optional reentry

    (a) Must use clear durational language AND must carve out the right to re-enter (NY right of reacquisition)

    (b) Condition violate granter reserves the right to reentry

    (c) This estate is NOT automatically terminated, but it can be cut short at the grantor‟s option, if the stated condition

    occurs.

    (d) RAP not applicable

    Ross conveys “To Rachel, but if coffee is ever consumed on the premises grantor reserves the right to re-enter and

    re-take.” Rachel has: Fee Simple Subject to Condition Subsequent Ross has: Right of Entry (Power of

    Termination).

    Bobby Brown: Its my prerogative as to whether to choose to terminate or not.

    (iii) Fee Simple Subject to Executory Limitation automatic executive interest

    (a) Must use clear durational language (e.g. so long as, during, while, until) rd party (shifting executory interest) (b) Condition violated forfeiture automatic, then passes to 3(c) RAP applies

    HYPO: To Barry Manilow, but if Manilow ever performs music on the premises, then to Mandy. Barry has: Fee

    Simple subject to Mandy‟s shifting executory interest. - Mandy has: Shifting Executory Interest

    4. Life Estate

    a. Creation must be measured in explicit lifetime terms (never measured in terms of years)

    (i) Life Estate Pur Autre Vie- measured by the life other than grantees (to A for the life of B)

    O conveys: “To Madonna, for the life of David Letterman.” Madonna has: Life Estate pur autre vie. O has: reversion.

    At the end of David Letterman‟s life, the estate reverts back to O or O‟s heirs.

    (ii) Alienable, devisable & descendible if measuring life is still alive

    (iii) NOTE: although a life estate is usually indefeasible, can make a life estate

    (a) determinable (“to A for life so long as alcohol isn‟t used on the premises”),

    (b) subject to a condition subsequent (“to A for life, but if A is divorced, grantor reserves right to reenter”), or

    (c) subject to an executory interest (“to A for life, but if A is divorced, to B”) b. Distinguishing Characteristics

    (i) Entitled to all ordinary uses & profits from the land

    (ii) Must not commit waste (anything that will harm the future interest holders) 3 kinds of waste (for which a future

    interest holder may sue for damages or injunction):

    (a) Voluntary/affirmative waste actual, overt conduct causing decrease in value; can not consume or exploit natural

    resources on property (e.g. timber, oil, or minerals), EXCEPT for PURGE

    - Prior Use: prior to the grant, land was used for exploitation (but no right to open new mine)

    - Reasonable repairs: life tenant may consume natural resources for reasonable repairs & maintenance of the

    premises.

    - Grant: life tenant expressly granted right to it.

    - Exploitation: the land is suitable only for exploitation (e.g., the land is a quarry)

    (b) Permissive waste/neglect land is allowed to fall into disrepair, or the life tenant fails to reasonably protect the

    land

    - Property Law says Life tenant must simply maintain the premises in reasonably good repair

    - Must pay all ordinary taxes, to the extent of the value of rents & profits. If no income or profits, must pay

    taxes up to the fair rental value.

    (c) Ameliorative waste life tenant must not engage in acts that will enhance property‟s value, UNLESS:

    - All future interest holders are known, & consent, OR

    - A substantial & permanent change in the neighborhood conditions

    B. Future Interests

    1. Future Interests in Transferor (O)

    a. Possibility of reverter accompanies only the fee simple determinable (remember FSDPOR) b. Right of entry/power of termination accompanies only the fee simple subject to condition subsequent.” It‟s my

    prerogative.”

    c. Reversion future interest that arises in a grantor who transfers an estate of lesser quantum than he started with (fee tail OR

    life estate); reversionary interests are vested & NOT subject to RAP

    HYPOS: O, the holder of a fee simple absolute, conveys: “To A for life.” O has conveyed less than what she started with.

    She has a reversion. “To A for 99 years.” O has conveyed less than what she started with. She has a reversion. “To A for

    life, then to B for 99 years.” O has still conveyed less than that with which she started. (Remember that the fee simple

    absolute can endure forever.) O has a reversion.

    2. Future Interests in Transferees

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    a. Remainders (contingent & vested) ? a future interest created in a grantee that become possessory upon the expiration of a

    prior possessory estate (created in same conveyance in which the remainder is created)

    Remember that remainderman (Forrest Gump) is sociable, patient and polite: (1) Remainderman is sociable. He never

    travels alone. In other words, remainderman always accompanies a preceding estate of known fixed duration. That

    preceding estate is usually a life estate or a term of years. For example: “To A for life, then to B,” or “To A for ten years, then to B.” (2) Remainderman is patient and polite, meaning: Remainderman never follows a defeasible fee. Remainderman

    waits patiently for the preceding estate to run its course. Remainderman cannot cut short or divest a prior transferee. In

    other words, if your present estate is a defeasible fee, your future interest is NOT a remainder. Instead, it will be executory interest.

    (i) Always accompanies a preceding estate of known, fixed duration (usually a life estate or a term of years) cannot cut

    short or divest a prior transferee (that‟s what executory interests do in defeasible fee); either vested or contingent:

    (ii) Vested Remainder created in ascertained person AND is NOT subject to any condition precedent

    (a) Indefeasibly vested remainder NO conditions attached (“to A for life, remainder to B”); NOT subject to RAP

    (b) Vested remainder subject to complete defeasance (NY remainder vested subject to total divestment) subject

    to a condition subsequent (“to A for life, remainder to B, provided, however, that if B dies under the age of 25, to

    C”; B has the vested remainder subject to complete defeasance, C has a shifting executory interest); NOT subject

    to RAP

    - If conditional language follows and set off by commas (condition subsequent) vested remainder subject to

    complete defeasance (Comma Rule)

    - If conditional language appears before (condition precedent) contingent remainder

    (c) Vested remainder subject to open vested remainder created in a class of persons (e.g. “children”) that is certain

    to become possessory, but is subject to diminution by additional persons not yet ascertain can still classify as class

    members (“to A for life, then to B‟s children”; B‟s children C, D‟s share might be decreased if B has another

    child); subject to RAP

    - Open it is possible for other to enter

    - Closed (i) maximum membership has been set, or (ii) whenever any member can demand possession (under

    rule of convenience, a class closes when some member of the class can call for distribution e.g. when A dies,

    regardless of Bs death)

    (iii) Contingent Remainder created in an unascertained person OR is subject to condition precedent, or both; subject to

    RAP. TIP: Condition precedent=prerequisite

    HYPO: “To A for life, then, if B graduates from college, to B.” A is alive. B is now in high school. Before B can take,

    he must graduate from college. He has not yet satisfied this condition precedent. B therefore has: contingent remainder.

    O has reversion (If B never graduates, O or O‟s heirs take.) If B graduates from college during A‟s lifetime: B's

    contingent remainder is transformed automatically into an indefeasibly vested remainder

    (a) Unborn or unascertained person “to A for life, then to those children of B who survive A”

    (b) Subject to a condition precedent “to A for life, then if B graduates from college, to B” – if B graduates, during

    A‟s lifetime, his contingent remainder automatically transforms into an indefeasibly vested remainder

    Rule in Shelley‟s Case Doctrine of Worthier Title Destruction of Contingent (Rule Against Remainders in (Rule Against a Remainder in Remainders: Grantee‟s Heirs): Grantor‟s Heirs):

    If same instrument created a life Contingent remainders destroyed, estate in A & gave the remainder Remainder in the grantor‟s heirs is Rule: if not vested at time of termination only to As heirs, the remainder invalid, so grantor has a reversion of preceding estate was not recognized

    Modern Treated as a rule of construction Abolished in most jurisdictions Abolished in most jurisdictions Status: only, not a rule of law.

    “to A for life, and if B has reached “to A for life, then, on As death, “to A for life, then to my heirs at Example: age 21, to B to A‟s heirs” law(O) (A dies before B reaches 21) (A is alive)

    - Bs contingent remainder Historic A has fee simple absolute (because destroyed - A has life estate Result (at present & future interests would - O or Os heirs take in fee simple - O has a reversion common law): merge) absolute

    - O or Os heirs hold estate subject - A has life estate - A has life estate Modern to Bs springing executory - As unknown heirs have - Os heirs have contingent Result: interest contingent remainder remainder - B takes, once reaches 21 - O has a reversion (c) Rule of Destructibility of Contingent Remainders abolished in the US/NY

    - D

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    octrine of Merger (related to destructibility of contingent remainders)

    ? When one person acquires all of the present & future interests in land except a contingent remainder,

    under common law, the contingent remainder is destroyed

    ? Example: X conveys “to Y for life, then to Z‟s children”; if, before Z has any children, X purchases Y‟s

    life estate, X will have a life estate pur autre vie AND a reversion these interests merge, & the

    contingent remainder in Z‟s unborn children is destroyed

    (d) Rule in Shelley‟s Case (Rule Against Remainders in Grantee‟s Heirs) abolished in US/NY

    (e) Doctrine of Worthier Title, a/k/a Rule Against a Remainder in Grantor‟s Heirs –

    - Doctrine tries to promote the free transfer of land

    - It‟s a rule of construction, & not a rule of law so, if grantor intends to create a contingent remainder in his

    heirs, that intent is binding

    - Applies only to inter vivos transfers (not wills) & only if the words “heirs” is use

    ? NY Distinctions

    1. Rule of Destructibility of Contingent Remainders abolished

    2. Rule in Shellys case (Rule against remainders in grantees heirs) abolished

    3. Doctrine of Worthier Title (Rule against remainders in grantors heirs) abolished in NY with

    respect to transfers taking effect after September 1, 1967

    b. Executory Interest (Executioner Dr Evil) rd(i) Future interests in 3 parties that either divest a transferee‟s preceding freehold estate (“shifting interests”) or follow a

    gap in possession or cut short a grantor‟s estate (“springing interests”)

    (ii) Unlike remainders, cut short prior transferee‟s interests:

    (a) Shifting always follows a defeasible fee & cuts short someone other than the grantor (“to A & his heirs, but if B

    returns from Canada sometime next year, to B & his heirs” or “to A, but if A uses the land for nonresidential

    purposes at any time during the next 20 years, then to B)

    (b) Springing cuts short the grantor (“to A, if & when he marries,” or “to A, if & when he becomes a lawyer”)

    (iii) Subject to RAP

    ? NY Distinctions Executory Interests

    Abolished the distinction b/w executory interests & contingent remainders instead, contingent

    remainders AND executory interests are called: remainders subject to a condition precedent

    C. Rule Against Perpetuities

    1. Rule certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest (i.e.

    become (i) possessory, (ii) an indefeasibly vested remainder, or (iii) a vested remainder subject to total divestment) more than

    21 years after the death of a measuring life

    RAP applies to: RAP does NOT apply to: (1) contingent remainders (1) reversions (any future interest in O, the grantor) (2) executory interests (2) indefeasibly vested remainder (3) certain vested remainders subject to open (3) vested remainders subject to complete defeasance (4) options to purchase land (4) charities

    (5) powers of appointment

    2. 4-step technique for assessing RAP problems

    a. Determine which future interests have been created by the conveyance

    b. Identify the conditions precedent to the vesting of the suspect future interest what must happen before a future interest

    holder can take?

    c. Find a measuring life look for a person alive at the date of the conveyance, & ask whether that person‟s life or death is

    relevant to the condition‟s occurrence

    d. Ask whether we‟ll know, within 21 years of the death of our measuring life, if our future interest holder can or cannot take

     if so, the conveyance is good

    “to A for life, then to the first of her children to reach the age of 30”

    A is 70; only child, B is 29 years old

    (1) Classify future interest Contingent remainder

    (2) Conditions precedent A must die; must have a child to reach 30

    (3) Measuring life A

    RAP applies B might die; A could have another child (Fertile (4) Certainty within 21 years Octogenarian Rule presumes that a person is fertile his/her age)

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    A has life estate Result O has revision 3. 2-Bright-Line Rules of common law RAP (memorize this)

    a. A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP

    (“bad as to one, bad as to all”)

    b. Many shifting executory interests violate the RAP an executory interest with no limit on the time within which it must

    vest violates the RAP (ex.: “to A & his heirs so long as the land is used for farm purposes, & if the land ceases to be so used,

    to B & his heirs” – we won‟t know with certainty within 21 years of the death of our measuring life if a future interest

    holder can take)

    ? NOTE: Charity-to-Charity Exception a gift from one charity to another does not violate the RAP

    4. Reform of the RAP

    a. “Wait & see” or “Second look” doctrine the validity of any suspect future interest is determined on the basis of the facts,

    as they now exist, at the conclusion of the measuring life. This eliminates the “what if” or “anything is possible” line of

    inquiry (parade of horribles).

    b. USRAP (Uniform Statutory Rule Against Perpetuities) codifies that common law RAP & in addition provides for an

    alternative 90 year vesting period

    c. Both the “wait & see” and USRAP adopt

    (i) Cy pres doctrine (“as near as possible”) – if a given disposition violates the rule, a court may reform it in a way that

    most closely matches the grantor‟s intent, while still complying with the RAP

    (ii) Reduction of any offensive age contingency to 21 years

    ? NY Perpetuities Reform Statute

    Applies the common law RAP, & has rejected “wait & see” & “cy pres,” except for charitable trusts

    & powers of appointment

    1. Where an interest would be invalid because it‟s made to depend on any person‟s having to attain

    an age in excess of 21 years, the age contingency is reduced to 21 years 2. „Fertile Octogenarian‟ principle is modified a woman over the age of 55 is presumed infertile,

    & the possibility that the person may have a child by adoption is disregarded 3. Rule against suspension of the absolute power of alienation applies common law RAP to

    restrictions on the power to sell or transfer so, an interest is void if it suspends the power to sell

    or transfer for a period longer than lives in being, plus 21 years (for a conveyance to be valid

    under the suspension rule, there must be persons who could join together in a conveyance of the

    full fee simple title within lives in being plus 21 years. 5. Common RAP cases

    a. Executory interest following defeasible fee: “to A for so long as no liquor is consumed on the premises, then to B” violates

    RAP

    b. Age contingency beyond age 21 in open class: “to X for life, then to those of X‟s children who attain the age of 25” – NY

    will reduce such age contingency to 21

    c. Fertile octogenarian: “to A for life, then to A‟s children, then to A‟s grandchildren in fee” is invalid as to A‟s

    grandchildren despite that A is 80 years old NY presumes that women over 55 can‟t bear children

    d. Unborn widow/er: “to A for life, then to A‟s widow for life, then to A‟s surviving issue in fee” – the gift to A‟s issue is

    invalid, because A‟s widow might be a spouse who was not in being when the interest was created (notice that a remainder

    to A‟s children would be valid, since, unlike issue, they would be determined at A‟s death) e. Administrative contingency: “to my issue surviving at the distribution of my estate” is invalid since the estate might be

    administered beyond the period of RAP

    f. Options & rights of first refusal: when A conveys Blackacre to B, he includes a clause in the deed that states: “B, his heirs,

    & assigns promise that upon finding a ready, willing & able buyer for Blackacre, Blackacre will be offered to A, his heirs,

    or assigns, on the same terms” – this is invalid because the right of first refusal can be exercised well beyond a life in being

    plus 21 years

    g. NOTE: when a void interest in stricken, the interests are classified as if the void interest were never there D. Concurrent Estates (i) joint tenancy; (ii) tenancy by the entirety; & (iii) tenancy in common

    1. Joint Tenancy (disfavored because they allow takers to avoid probate)

    a. Definition each tenant has an undivided interest in whole estate (each enjoys a share with the right to use the whole), with

    right of survivorship

    b. Characteristics

    (i) Right of survivorship if 1 joint tenant dies, his share passes automatically to surviving joint tenants

    (ii) Alienable but NOT, divisible or descendible (because of the right of survivorship)

    c. Creation requires 4 unities + grantor must clearly express right of survivorship

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(i) 4 unities: (T-TIP):

    (a) at the same Time

    (b) by the same Title (i.e., same instrument)

    (c) Identical, equal interests

    (d) identical rights to Possess the whole

    (ii) Use of a „straw‟ (middle man/conduit) – to satisfy the 4 unities, grantor conveys land to strawman, who then conveys

    back to himself and another person as joint tenants with the right of survivorship

    EG: Dave holds Blackacre in fee simple absolute. He wishes to hold it as a joint tenant with his best friend Paul. How

    must Dave proceed? To satisfy the four unities, Dave must use a strawman. Step One: Dave conveys Blackacre to

    strawman. Step Two: Strawman conveys back to Dave and Paul as joint tenants with right of survivorship.

    ? NY Distinctions Joint Tenancy

    Dispenses with the need for straw permissible to convey directly using single deed even

    though the unities of “time” and “title” are not satisfied. Dave can convey directly to

    himself and Paul as joint tenants. d. Severance of a joint tenancy (SPaM):

    (i) Sale:

    (a) Sale or transfer interest during her lifetime (can do so secretly, without the others‟ knowledge or consent); this

    severs the joint tenancy because disrupts 4 unities & buyer is „tenant in common‟; BUT joint tenancy remains

    intact as between the other, non-transferring joint tenants

    (b) In equity, a joint tenant‟s mere act of entering into a contract (severed on this date) for the sale of share will sever

    the join tenancy as to that contracting party‟s interest – because of doctrine of equitable conversion provides that

    “equity regards as done that which ought to be done”

    HYPO: O conveys Blackacre to “Ringo, Paul, and John as joint tenants with the right of survivorship.” This form

    of concurrent estate is: a joint tenancy. On January 1, Ringo enters into a contract for sale of his interest in the

    joint tenancy to George, with the closing to take place on April 1. When does the severance as to Ringo‟s interest

    occur, and why? On January 1, under equitable conversion.

    (ii) Partition 3 methods:

    (a) Voluntary agreement allowable, peaceful way to end the relationship

    (b) Partition in kind judicial action for physical division of property, for best interests of all parties

    (c) Forced sale judicial action for best interests of all, the land is sold & proceeds are divided proportionately (this is

    an equitable action, & therefore the court may credit for the value of improvements erected, repairs made, & taxes

    paid) And

    (iii) Mortgage

    (a) Title theory of mortgage (minority) one joint tenant‟s execution of a mortgage or lien on his or her share will

    sever the joint tenancy as to that now encumbered share

    (b) Lien theory of mortgage (MAJORITY / including NY) a joint tenant‟s execution of a mortgage on his or her

    interests will not sever the joint tenancy; severance only occurs if the mortgage is foreclosed and the property is

    closed

    2. Tenancy by the Entirety (21 states recognized, including NY)

    a. Definition a protected marital interest between husband (H) & wife (W) with the right of survivorship

    b. Creation

    (i) Only be created by husband & wife (fictitious 1 person) with rights of survivorship

    (ii) Presumption that any conveyance to H &W, UNLESS clearly stated otherwise c. Protected form of co-ownership (Can’t touch this)

    (i) Creditors of only one spouse cannot touch the tenancy

    ? NY Distinctions Tenancy by the Entirety

    1 spouse may mortgage his interest & his creditors may enforce against that interests, BUT

    only as to the debtor spouse‟s share

    Non-debtor spouse‟s rights, including the right of survivorship, must not be compromised rd(ii) Unilateral conveyance to 3 party can NOT defeat the right of survivorship

    HYPO: Tony and Carmella, married to each other, own Blackacre as tenants by the entirety. Tony then secretly

    transfers his interest to Uncle Junior. What does Uncle Junior have? Nothing.

    d. Severance by (i) death, (ii) divorce, (iii) mutual agreement, or (iv) execution by a joint creditor

    3. Tenancy in Common

    a. Definition each co-tenant owns an individual part, & each has a right to possess the whole

    b. Characteristic each interest is descendible, divisible & alienable; BUT NO survivorship rights

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c. In multiple grantees presumption favors tenancy in common

    4. Rights & duties of Co-Tenants:

    a. Possession each co-tenant can possess & enjoy the whole; if one co-tenant excludes another, he‟s committed wrongful

    ouster

    b. Rent from co-tenant in exclusive possession absent ouster, a co-tenant in exclusive possession isn‟t liable to the others for

    rent rd parties A co-tenant who leases all or part of the premises to a third party must account to his co-tenants, c. Rent from 3providing them their fair share of their rental income

    d. Adverse possession absent ouster, one co-tenant in exclusive possession for the statutory adverse possession period

    cannot acquire title to the exclusion of the others (b/c no hostility because there is no ouster).

    ? NY Distinctions Theory of Implied Ouster

    A co-tenant may acquire full title by adverse possession, if he is in exclusive possession for

    20 continuous years e. Carrying costs each co-tenant is responsible for his fair share of carrying costs (taxes, mortgage interest payments, etc.)

    based on the undivided share that he holds (based on % of ownership).

    f. Repairs repairing co-tenant enjoys right to pro-rate contribution for necessary repairs (notice required to the others of the

    need of the repair)

    g. Improvements no right to contribution for “improvements”; BUT, at partition, improving co-tenant is entitled to credit

    equal to any increase in value or fully liable for any decrease in value

    h. Waste co-tenant must not commit waste (voluntary, permissive & ameliorative). Co-tenant can bring an action for waste

    during the life of the co-tenancy.

    i. Partition joint tenant or tenant in common has a right to bring an action for partition

    II. Landlord/Tenant Law A. Four Leasehold (estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has

    a future interest)

    1. Tenancy for Years (a.k.a. Estate for Years or Term of Years) could be months or weeks or 50 years.

    a. Definition lease for a fixed, determined period of time

    b. Creation greater than 1 year must be in writing to be enforceable, because of Statute of Frauds

    c. Termination NO notice necessary, because the term of years states from the outset when it‟ll terminate

    HYPO: L leases Blackacre to T “from January 1, 2003 to July 1, 2003.” Which form of tenancy exists here? Term of Years.

    Why? It is a leasehold for a fixed known period of time. How much notice is needed to terminate the tenancy? None

    2. Periodic tenancy

    a. Definition lease continues for successive periods, until terminated by proper notice by either party

    b. Creation:

    (i) Express Agreement to “T from month to month or year to year or week to week,” or

    (ii) Implication in one of 3 ways measured by the way rent is tendered:

    (a) Leased with NO mention of duration, but provision is made for rent payment at set intervals

    (b) Oral term of years in violation of the statute of frauds, creating an implied periodic tenancy

    (c) Holdover in a residential lease, if landlord elects to holdover a tenant who has wrongfully stayed on past

    conclusion of the original lease, measured by the way rent is now tendered.

    HYPO: T rents an apartment from L, beginning June 1. Nothing is said about duration. T pays rent each month.

    What tenancy exists here? T is an implied month to month periodic tenant.

    ? NY Distinctions Landlord who elects to holdover a tenant creates an implied month-to-

    month periodic tenancy, unless otherwise agreed. c. Termination automatically renewed until proper notice of termination, usually written, is given

    (i) At common law, Notice must be given at least equal to the length of the period itself, UNLESS otherwise agreed

    (ii) E.g. in month-to-month need at least 1 month‟s notice, but there‟s an exception for year-to-year tenancy, where only

    6 months‟ notice is required (may be shortened or lengthened by the parties)

    (iii) NOTE: By private agreement, the parties may lengthen or shorten these common-law prescribed notice provisions.

    Freedom of Contract

    (iv) NOTE: periodic tenancy must end at the conclusion of a natural lease period (last day of the period)

    HYPO: L leased Blackacre to T on January 1, 2003, for a periodic tenancy of month-to-month. On May 15, 2003, T

    sends written notice of termination. T is bound until June 30, 2003

    3. Tenancy at Will

    a. Definition no fixed period of duration (“to T for as long as landlord or tenant desires”)

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b. Creation unless the parties expressly agree to a tenancy at will, the payment of regular rent will cause a court to treat the

    tenancy as an implied periodic tenancy

    c. Termination may be terminated by either party at any time, but a reasonable demand to quit the premises is typically

    required

    ? NY Distinctions Landlord terminating a tenancy at will must give at least 30 days

    written notice of termination

    4. Tenancy at Sufferance

    a. Creation created when tenant has wrongfully held over past the expiration of the lease

    (i) Created to permit landlord to recover rent

    b. Termination lasts only until either landlord evicts the tenant or elects to hold the tenant to a new term

    ? NY Distinctions Landlord‟s acceptance of rent subsequent to the expiration of the term

    will create an implied month-to-month periodic tenancy, unless otherwise agreed

    B. Tenant’s Duties rd1. Tenant’s liabilities to 3 parties (Tort Law) must keep premises in reasonably good repair, & is liable for injuries rdsustained by 3 parties he invited, even where landlord has expressly promised to make all repairs

    HYPO: L leases a building to T, expressly promising to maintain the premises in a state of good repair. T‟s invitee trips over

    a loose floorboard and sues T. If invitee sues T, what result? T always loses. (It does not matter that T may seek

    indemnification from L. Vis-a-vis the plaintiff, who is a guest, T loses.

    2. Tenant’s duty to repair

    a. When the lease is silent

    (i) Standard tenant must maintain the premises and make ordinary repairs

    (ii) Tenant must not commit waste voluntary, permissive, or ameliorative

    (iii) Law of Fixture (walks hand in hand with waste doctrine)

    (a) Definition a once movable chattel that has been so affixed to land that it has ceased being personal property

    and it objectively shows the intent to improve the realty. (heating systems, custom made storm windows, certain

    lighting installations). (fixtures pass with ownership of the land)

    (b) Tenant must NOT remove a fixture, no matter that tenant installed it (removing a fixture commits a voluntary

    waste)

    (c) Determining a tenant installation that qualifies as a fixture

    - Express agreement controls (agreement between L and T is binding)

    - Absence of agreement tenant may remove tenant installed chattel so long as removal does not cause

    substantial harm to the premises (if cause substantial harm, then in objective judgment tenant has shown

    intent to install a fixture and fixture must stay).

    b. When expressed covenanted to maintain the property in good condition for the duration of the lease

    (i) Common law tenant was responsible for any loss to the property, regardless of the cause, including loss

    attributable to force of nature (act of god)

    (ii) Today tenant may terminate lease if the premises are destroyed without his fault (followed in NY)

    3. Tenant’s duty to pay rent

    a. Tenant breaches this duty & in possession of the premises

    (i) Landlord‟s ONLY options are:

    (a) Evict through the courts; OR

    (b) Continue the relationship (now a tenant at sufferance) & sue for the rent due

    (ii) NO SELF HELP e.g. changing locks, forcibly removing the tenant; removing any of his possessions (self-help

    flatly prohibited and punishable civilly & criminally treble damages in NY) b. Tenant breaches this duty BUT is out of possession of the premises remember SIR:

    (i) Surrender tenant demonstrates, by words or actions, that he wishes to give up the leasehold (landlord could choose

    to treat tenant‟s abandonment as an implicit offer of surrender, and accepts). If unexpired term is greater than one

    year, surrender must be in writing to satisfy SOF.

    (ii) Ignore the abandonment & hold the tenant responsible for the unpaid rent, just as if the tenant were still there (this

    option is available only in a minority of states)

    (iii) Re-let the premises on the wrongdoer tenant‟s behalf, & hold him liable for any deficiency

    ? Majority Rule (mitigation principle) landlord must make reasonably good-faith effort to re-let

    ?

    ? NY Distinctions NY does NOT require landlords to mitigate damages when tenants

    abandon the premises

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    C. Landlord’s Duties

    1. Duty to deliver possession

    a. Majority view (English Rule) landlord must put tenant in actual physical possession of the premises (if a prior holdover

    tenant is still in possession at the start of the new tenant‟s lease, the new tenant is entitled to damages) b. Minority view (American Rule) landlord has NO duty to deliver actual possession at the commencement of the term, &

    hence is not in default when previous tenant continues wrongfully to occupy the premises. L only required to give legal

    possession.

    2. Implied covenant of quiet enjoyment (fundamental right applies to BOTH residential & commercial leases) a. Tenant has the right to quiet use & enjoyment of the Premises without interference from landlord:

    (i) Breach by actual wrongful eviction; or

    (ii) Breach by constructive eviction (e.g. every time it rains, apartment floods) three elements must be met (SiNG):

    (a) Substantial Interference attributable to landlord‟s actions or failures to act (chronic problem)

    (b) Notice tenant must give notice of problem & landlord must fail to respond meaningfully

    (c) Goodbye (get out) tenant must vacate within a reasonable time after landlord fails to correct

    b. Landlord is NOT liable for the acts of other tenants, EXCEPT:

    (i) Landlord has a duty not to permit a nuisance on the premises, &

    (ii) Landlord must control common areas

    3. Implied warranty of habitability (ONLY residential, NOT commercial leases) a. Non-waivable bare living requirements must be met (e.g., heat in winter, plumbing or running water); standard is

    supplied by local housing code or independent judicial conclusion 3): b. If warranty breached, the tenant is entitled to one of 4 options (MR(i) Move out & terminate the lease

    (ii) Repair & deduct tenant may make reasonable repairs & deduct their cost from future rent

    (iii) Reduced rent or withhold all the rent until the court determines fair rental value place rent in escrow account

    (iv) Remain in possession pay rent & affirmatively sue money damages

    c. NOTE: (i) Constructive eviction tenant must vacate; BUT (ii) Implied warranty of habitability tenant has different

    options, including vacate

    4. Retaliatory eviction

    ? If tenant lawfully reports landlord for housing code violations, landlord is barred from penalizing tenant, by raising rent,

    ending the lease, harassing tenant, other retaliatory measures, etc.

    D. Assignment v. Sublease

    1. General absent some prohibition in the lease, a tenant may freely transfer his interest in whole (assignment) or in part (sublease).

    a. Landlord’s prior written approval lease may prohibit the tenant from assigning or subletting without the landlord‟s

    prior written approval

    b. BUT, once the landlord consents to one transfer by the tenant, he waives the right to object to future transfers by that

    tenant, unless the landlord expressly reserves the right (Rule of Dumpor‟s Case)

    ? NY Covenants against Assignment or Subleases

     Assignment Subleases

    (residential tenant) (tenant in residential building having 4 or more units)

    May NOT assign without L‟s written consent Right Right to sublease subject to L‟s written consent (unless lease provides otherwise)

    Consent CAN unconditionally be withheld Can NOT be unreasonably withheld

    (Result) (T‟s sole remedy is to seek release from lease) (unreasonable withheld consent is deemed consent)

    2. Assignment

    a. Landlord & Tenant2 (assignee)

    (i) Privity of estate (i.e. liable to each other for all of the covenants in the original lease that “run with the land,” such as

    the promise to pay rent, repair or paint the premises, & pay taxes)

    (ii) NOT privity of contract unless T2 expressly assumed performance of all promises of the original lease

    b. Landlord & Tenant1 (assignor)

    (i) NO longer in privity of estate,

    (ii) Remain in privity of contract (AND are secondarily liable to each other)

    c. If Landlord Tenant1 Tenant2 Tenant3

    (i) Landlord & Tenant1 privity of contract & secondarily liable to L (if T3 can‟t pay)

    (ii) Landlord & Tenant3 privity of estate

    (iii) Landlord & Tenant2 NO privity of estate once T2 assigned to T3; NO privity of contract (unless T2 expressly

    assumed all promised in the original lease)

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    d. NOTE: when landlord assigns, although no longer in privity of estate, the original landlord & tenant remain in privity of

    contract unless there is a novation so, both the old & new landlords are liable

    3. Sublease

    a. Landlord & sublessee are in NEITHER privity of estate NOR privity of contract they share no nexus

    b. BUT, primary tenant & the subtenant are in privity of estate AND privity of contract (T2 responsible to T1 not L)

     Assignee: Sublessor:

    privity of estate: YES no

    privity of contract: no (unless he assumes contract duties) no

    E. Landlord’s Tort Liability (caveat emptor)

    1. Common Law of caveat lessee („let the tenant beware‟) – landlord has no duty to make the premises safe

    2. Exceptions (CLAPS):

    a. Common areas hallways, stairwells, etc.

    b. Latent defects rule landlord must warn tenant of hidden defects of which landlord has, or should have, knowledge (Duty

    to warn but NOT duty to repair)

    c. Assumption of repairs once undertaken, a landlord must complete repairs with reasonable care (if repairs done

    negligently, L is liable)

    d. Public use rule when landlord leases public spaces (e.g. convention centers, museums or auditoriums), & who should

    know, because of the nature of the defect & the length of the lease, that tenant won‟t repair, landlord is liable for any

    defects on the premises.

    e. Short term lease of furnished dwelling landlord is responsible for any defective condition which proximately injure

    tenant

    III. Servitudes nonpossessory interests in land, creating a right to use land possessed by someone else A. Easements (strongest form)

    1. Definition a grant of nonpossessory property interest that entitled its holder to some form of use or enjoyment of another‟s

    land (i.e. servient tenement)

    2. Scope of easement set by the terms of the grant or conditions that created the easement - unilateral expansion of easement

    NOT allowed

    3. NOTE: overuse or misuse of an easement does NOT terminate the easement the appropriate remedy for the servient owner is

    an injunction against the misuse

    4. Affirmative v. Negative easements

    a. Positive easements the right to go onto & do something on the servient land

    b. Negative easements can only be created expressly, by writing signed by the grantor; no natural or automatic right to

    LASS: (i) Light; (ii) Air; (iii) Support; (iv) Streamwater from an artificial flow (and (v) scenic view in a minority of states) 5. Easements appurtenant to land („it takes two‟)

    a. Definition the when easement benefits its holder in his physical use or enjoyment of his property

    b. “It takes 2” parcels of land – (i) a dominant tenement, which derives the benefit, & (ii) a servient tenement, which bears

    the burden of the easement

    c. Transferred automatically with dominant tenement, regardless whether mentioned in the conveyance

    d. Passes automatically with servient tenement, unless the new owner is a bona fide purchaser, without notice

    6. Easements held in gross

    a. Definition confers upon its holder only some personal or pecuniary advantage (e.g. right to place a billboard on

    another‟s lot; right to swim in another‟s pond; utility co‟s right to lay power lines on another‟s land) that‟s not related

    to the use or enjoyment of his land (benefits holder & NO benefited or dominant tenement). So here, only one parcel

    of land is involved servient tenement, which is burdened by this easement (i.e A has an easement to swim in B‟s lake)

    b. Transferable ONLY if it is for commercial purposes (i.e., not a personal easement in gross like swimming in a lake

    where it is personal to the holder).

    7. Creation can be created by PING:

    a. Prescription satisfying the elements of adverse possession (COAH)

    (i) Continuous use for the given statutory period (10 years in NY);

    (ii) Open & notorious use; (iii) Actual use; & (iv) Hostile use

    ? NOTE: permission defeats the acquisition of an easement by prescription, because it‟s no longer hostile

    b. Implication an easement (“quasi-easement”) can be implied from existing use if:

    (i) prior to the division of a single tract,

    (ii) an apparent & continuous use exists on the “servient” part,

    (iii) that is reasonable necessary for the enjoyment of the “dominant”, &

    (iv) Court determines that the parties intended the use to continue after division of the land

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