Real Property – Opening Paragraphs
Tenancy for Years
A tenancy for years is a tenancy that continues for a fixed period of time. A tenancy for a period greater than one year comes under the statute of frauds, and thus must be in writing, signed by the party to be charged, to be enforceable. It terminates upon the specified date.
A period tenancy is one that continues for successive or continuous intervals. It may be created expressly or by implication. The party who wishes to terminate the lease must provide written notice, and the notice must be at least equal to the length of the period itself. Also, the tenancy must end the conclusion of a natural lease period.
An assignment occurs when the assignor assigns his entire interest under the lease to another. The assignee stands in the shoes of the original tenant in a direct relationship with the landlord. The landlord and assignee are in privity of estate, and each is liable to the other on all lease covenants that run with the land. But, the landlord and assignor remain in privity of contract, thus the assignor remains liable for all unpaid rent.
An assignee and landlord are liable to each other for all covenants that run with the land. A covenant runs with the land if (1) the original parties to the lease intended that the covenants run with the land, and (2) the covenant “touches and concerns” the land. A covenant touches and concerns the land when the agreement burdens one party while benefiting the other, respecting their interests in the property.
A sublease occurs when the subleasor moves out of the premises, and allows the subleasee to move into the premises as the subleasor’s tenant. A subleasee is only in privity with the subleasor, and is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease unless the subleasee expressly assumes the covenants.
Thus, a subleasee cannot enforce any covenants made by the landlord in the original lease. However, a residential subleasee may be able to enforce the implied warranty of habitability against the landlord.
Implied Covenant of Quiet Enjoyment
A landlord has an implied duty not to interfere with a tenant’s quiet enjoyment and possession of the premises. The covenant may be breached by total, partial or constructive eviction.
A partial eviction requires physical exclusion from some part of the property. The tenant may stay on the portion that is not affected, but is not obligated to pay rent. But, if the eviction is done by someone claiming paramount title, the tenant must pay the landlord for the portion retained.
A constructive conviction occurs when the landlord, by failing to provide a services that he has a duty to provide, makes the property uninhabitable. The tenant must move out within a reasonable amount of time, and make seek damages. Unlike an actual eviction, the tenant must continue to pay rent.
Implied Covenant of Habitability
A landlord has a duty to ensure that a residence is reasonably suited for human habitation. The standard is usually set by the local housing code. Only applies to residential property. Where breached, tenant has three options: (1) abandon the premises and terminate the lease, (2) repair and abate rent, or (3) remain and sue for damages.
A joint tenancy occurs where two or more tenants possess the entire parcel with rights of survivorship. When a joint tenant dies his interest dissolves, and the surviving tenants retain an undivided right to the property, which is no longer subject to the deceased-tenant’s interest. At common law, four unities are required to create a joint tenancy: (1) unity of time, (2) unity of title, (3) unity of interest and (4) unity of possession (T-TIP).
Voluntary or involuntary intervivos conveyance severs the joint tenancy as to the transferred/encumbered interest, and creates a tenancy in common. The other joint tenancy remains in tact. Under the lien theory, encumbrance does not sever. Under the title theory, the encumbrance will not sever immediately, but it will sever upon foreclosure.
Tenancy in Common
A tenancy in common exists where two or more people hold title to a property with no right of survivorship. The common law presumes a tenancy in common is created where there is no mention of a right to survivorship.
Each co-tenant has a right to possess the entire parcel, subject to the equal rights of her co-tenant. Generally, a co-tenant in possession does not have to reimburse the other tenants for the rental value of her use of the premises. However, where one tenant wrongfully excludes another from possession of the parcel, there is an ouster, and the ousted tenant may bring a possessory action to recover the fair rental value of the property for the time she was ousted.
A co-tenant must share rent gained from a third party from exploitation of the land.
All co-tenants must contribute to taxes and mortgage.
All co-tenants must contribute to necessary repairs in proportion to their ownership interest. But, a co-tenant is not entitled to reimbursement for improvements to the property unless and until there is partition.
Possession for a statutorily prescribed period of time may, if certain elements are met, ripen into title. The adverse possession claimant must demonstrate: (1) continuous possession for the statutory period (at common law 20 years), (2) possession which is open and notorious – the way a record title owner would use the property, (3) The possession must be actual, not hypothetical or symbolic, and (3) the possession must be hostile – that is without the true owner’s consent.
Possession by successive adverse possesers may be tacked together to make up the full statutory period provided that there is privity between them.
If the true owner is suffering from a disability at the time the statute of limitations begins to run, the period is tolled until the owner is free from the disability. If the true owner acquires a disability after the statutory period began to run – there is no tolling.
An affirmative easement is a non-possessory right that entitles its holder to go onto and do something on another’s land. It may be appurtenant, where the easement directly benefits the use and enjoyment of a specific property, or in gross where the easement only burdens land.
An affirmative easement can be created by express grant, implication (prior use or necessity), or prescription (adverse possession).
A negative easement is a grant of a non-possessory interest in land that entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible. Only applies to light, air, support, or stream of water from an artificial source. A minority of states, including CA, also allow negative easements for scenic views.
Can only be created expressly in a writing signed by the grantor.
Transfer of Easements
Where the easement is appurtenant, the benefit of the easement passes automatically with transfer of the land. Where an easement is in gross, the benefit of the easement passes with the land only if it is for commercial purposes.
The burden of a benefit – whether appurtenant or in gross – is binding on subsequent holders of the servient estate only if (1) the original parties to the easement agreed that the burden would be binding on subsequent holders, and (2) the party to be bound had actual, record or inquiry notice of the easement. Where a BFP takes burdened land without notice of the easement – it will not be binding on him.
Scope of an Easement
The terms of the agreement are controlling as to the scope of an easement. If an easement agreement is silent on duration, it is presumed to be a perpetual easement. The scope of the easement is limited to reasonable use of the development of the land which would have been contemplated at the time the easement was granted. If there is an excessive use, the easement does not automatically terminate, but rather, the use that goes beyond the scope is enjoined.
The benefited landowner has duty to make reasonably necessary repairs, and has implied consent to enter the burdened land to make repairs. The burdened landowner has no obligation to repair the easement.
Termination of an Easement
An easement is terminated where the dominant and servient estate are merged because a single owner holds title to both estates.
Written release given by the easement holder to the servient owner will terminate the easement.
An easement may terminate by estoppel where the easement holder represents that his is relinquishing his rights under the easement, and the servient landowner materially changes position in reliance on the representation.
An easement does not terminate by non-use, but an easement may terminate where there is (1) intent to terminate, accompanied with (2) a physical manifestation of abandonment of the easement.
A license is a privilege to enter another’s land for some delineated purpose. It need not be in writing. And it is freely revocable at the will of the licensor, unless estoppel applies to bar revocation. Estoppel will apply only if the licensee has invested substantial money or labor in reasonable reliance on the continuation of the license.
A profit entitles its holder to enter the servient estate to extract resources. Misuse that overly burdens the land will result in termination of the profit by “surcharge.” Otherwise, it shares the same rules as easements.
A promise to do (affirmative) or not do (restrictive) something related to the land.
The benefit of a covenant will run with the land if (1) it is in writing, (2) the original parties intended the covenant to run with the land, (3) the covenant touches and concerns the land, and (4) there is vertical privity – nexus between the seller and the purchaser.
The burden of a covenant will run with the land if (1) it is in writing, (2) the original parties intended the covenant to run with the land, (3) the covenant touches and concerns the land, (4) there is horizontal privity – nexus between the original promising parties, (4) there is vertical privity – nexus between the seller and the purchaser, and (5) the purchaser has actual, record, or inquiry notice that the parcel is burdened.
A promise to do or not do something related to the land that is accompanied by a request for injunctive relief.
It will bind successors if (1) in writing, (2) intent, (3) touch and concern, and (4) successor on notice.
Implied Reciprocal Servitude
An implied equitable servitude will hold an unrestricted lot holder to a restrictive covenant if (1) the sub-divider had a general scheme of residential development which included the purchaser’s lot and (2) the purchaser had actual, inquiry or record notice of the promise contained in the prior deeds.
Defense: Changed Conditions
Where a party seeking release from the terms of the equitable servitude can demonstrate that changed conditions are so pervasive that the entire area has changed – he will not be bound by the servitude.
Contracts for the sale of land
Generally, a land contract must satisfy the statute of frauds – it must be in writing, signed by the party to be bound. It must contain all the essential terms: parties, price, and a description of the land, which provides a good lead.
However, a court may enforce an oral land sale contract under the doctrine of part performance. The party seeking enforcement must show (1) payment of all or part of the purchase price, and either (2) delivery of possession or (3) improvements by the purchaser.
The seller promises to provide marketable title at closing. That is, title must be free from reasonable doubt. Title will be unmarketable if (1) any portion of the title rests on adverse possession, (2) there are any servitudes or outstanding mortgages on the on the land, or (3) the property is in violation of a zoning ordinance.
The deed must be in writing, singed by the grantor, and delivered to the grantee. Delivery is satisfied where there the grantor has a present intent to be immediately transfer the interest in the property. Physical delivery is not required. But, where the recipient expressly rejects the deed, there is no delivery. Under the doctrine of merger, the K terms of the land sale agreement are merged into the deed – including the price, parties and description.
Where the grantor delivers the deed directly to the grantee, oral conditions on the deed are not binding.
However, where the grantor delivers the deed to a third party, oral conditions are binding, and title will transfer automatically upon the occurrence of the condition. Absent the condition, the grantor will retain title.
The quitclaim deed
Contains no covenants. The grantor promises only to convey marketable title at the time of closing, the grantor is not responsible for any problems that arise after closing.
The general warrant deed
Contains six covenants, which the grantor makes on behalf of himself and all predecessors in interest.
Covenant of seisin: grantor warrants that he owns the estate he now seeks to convey.
*Covenant of right to convey*: grantor promises that he has the power to make this conveyance. Meaning there are no temporary restraints on grantor’s power to sell.
Covenant against encumbrances: grantor promises that there are no servitudes or mortgages on the land.
Covenant for quiet enjoyment: grantor promises that grantee will not be disturbed in possession by a 3rd party’s lawful claim of title.
Covenant of warranty: grantor promises to defend grantee should there be any lawful claims of title asserted by others.
Covenant of further assurances: grantor promises to do whatever future acts are reasonably necessary to perfect the title if it later turns out to be imperfect.
Note: a future covenants is not breach, if ever, until grantee is disturbed in possession. Thus, thus statute of limitations will not begin to run until that future date.
The statutory special warranty deed
Contains two covenants, which the grantor makes on behalf of himself only.
Grantor promises that he has not conveyed the estate to anyone other than grantee.
Grantor promises that the estate is free from any encumbrances made by the grantor.
The Recording System
In a pure race jurisdiction, whoever records first wins, and actual notice is irrelevant.
In a notice jurisdiction, a subsequent BFP is protected if she records the conveyance.
In a race-notice jurisdiction, a subsequent BFP is protected if she records her conveyance before the prior grantee.
The Shelter Rule
One who takes from a BFP, will prevail against any entity that the transferor BFP would have prevailed against. In other words, the transferee “takes shelter” in the status of his transferor, and thereby “steps into the shoes” of the transferor.
If a deed, entered on the record, has a grantor unconnected to the chain of title, the deed is a wild deed, and it is incapable of giving record notice of its existence.
Where a mortgagee transfers his interest in the mortgage by endorsing the note and delivering it to the transferee, the transferee is eligible to become a holder in due course, and thus takes the note free of any personal defenses that could have been raised against the original mortgagee. However, the holder in due course is still subject to “real” defenses such as MAD FIFI4.
The debtor-mortgagee may transfer his interest, but the lien remains on the land. The subsequent buyer takes subject to a properly recorded lien, but assumes no personal liability unless she assumes the mortgage.
Foreclosure destroys all interests junior to the mortgage being foreclosed, including easements. All parties with subordinate interest must be given notice of the foreclosure as necessary parties. Failure to include necessary parties will result in the preservation of that party’s interest despite foreclosure and sale.
Where a party breaches a land-sale contract, the non-breaching party may recover
Compensatory damages for any foreseeable harm. Must show causation, certainty, foreseeability, and unavoidable damages.
Specific Performance. Must show (1) inadequate legal remedy, (2) definite and certain contract terms, (3) feasibility of enforcement, (4) mutuality of enforcement, and (5) lack of defenses.
Injunction where there is interference with one’s property rights. Must show: (1) inadequate legal remedy, (2) property right, (3) feasibility of enforcement, (4) balance of hardships, (5) lack of defenses.
Defenses include: unclean hands, laches, freedom of speech, freedom of association.